The holidays can make money concerns seem even bigger.  So, we enlisted senior business correspondent and host of  Bulls & Bears, Brenda Buttner to help you out.

Last week, the Balance Sheet asked you to submit your financial question to Brenda, and as promised, here are your answers.

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Dear Brenda,

I need advice on investing.  I am a 70-year-old retiree.   Am I wasting money by investing in several mutual funds, considering all the fees?   I'm living off of savings.  I fear I'll have to start dipping into my principal as opposed to interest only.

Thank You —  Marilyn

Dear Marilyn,

You are asking a very important question, one that many investors ignore. Fees from mutual funds can take a bite out of your return. The most expensive are "loads" - these are fees you usually pay up-front to get into a fund. But even no-load funds can carry a hefty price tag as well. Don’t rule out mutual funds, though. The real issue is, are you getting what you pay for? A good mutual fund with a great stock-picker at the helm can be well worth the fees you pay. If you are comfortable picking stocks on your own, then by all means, skip the funds. But most of us can use a little help, and a well-performing mutual fund is often a good part of a portfolio.

 

Ms. Buttner,

I am a retired federal employee with approximately 100k in the Thrift Saving Plan.  Seventy-five percent of this money is in their "G" Fund which is mostly government-related items and is very conservative.  The other 25% is in their "F" Fund which is not as conservative as the "G" Fund.

Now that the DOW has reached the 10K mark, should I start the process of being a little more liberal with my plan and invest in their riskier "C" Fund.  I don't feel like getting too risky.  What do you think?

Thanks —  Bill

Dear Bill,

The market has had quite a run-up since the lows after the attack on America, and eventually our economy will recover. We may already be well on our way out of recession. So the question is not "if" but "when." Still, although I am bullish about the market, many stocks are still expensive and may have come too far too fast, so we won’t likely have a ride straight up. Historically, stocks have outperformed other investments in the long-term, but if you don’t think you can handle some volatility in the short-term, or you’re investing money you may need in the next few years, think twice about going more aggressive.

 

Dear Brenda, 

I have stocks in Home Depot and General Electric.  While Home Depot seems to fluctuate up and down, which is normal, GE seems to be on a downward spiral.   I know they are involved unfavorably in several directions and I don't see any hope of an upward trend for a long time in the future.  Should I take my losses and sell now before it gets worse or do you see a future in me holding on longer?  

E. Redman,

Dear Mr. Redman,

These are both strong companies and have been strong stocks.

Let me take Home Depot first. I think it may be a bit expensive, even though it dominates its industry and is a market leader. So buying Home Depot may not be a great idea right now. However, you already own it and have probably made plenty of money on it. At this point, I’m not sure the company can continue to produce the sales and earnings growth it has enjoyed. It’s built so many stores, many of which are now competing with one another. So taking profits might not be unwise.

Now on to General Electric, which I myself own in my 401(k). I will likely hold on for a while, even though the legendary CEO Jack Welch has retired. I have faith this stock will continue to be a performer, if certainly not at levels we’ve seen in the past. However, selling now and taking a profit could certainly be a wise course of action, too, especially if you bought at low levels. The stock has had a real run long-term.

 

Brenda,

I was scheduled to sign on a home mortgage on the Tuesday before Thanksgiving.  The Friday before, the bank closed down the mortgage department.  I am about to restart the process.  What are the chances of this happening again?  Is this prevalent at this time? 

Shirley

Dear Shirley,

I have never heard of this happening. Certainly, if you are with a reputable, big bank, there should be little chance of it closing down its department. I wish you luck this time!

 

Ms. Buttner,

Would a growth-income or income-growth mutual fund be best to invest in right now?

Wayne 

Dear Wayne,

If the past two years have taught us anything, it’s that diversification is smart. All the people who unfortunately had all their money in tech and internet stocks right before the bubble burst learned this the hard way. So a good mix of stocks and bonds is often a good way to invest. The allocations of each depend on your time horizon and your risk tolerance, too, so be sure to consider that.