|Gary B. Smith|
Question: My wife and I are both 50 years old and plan to work until we are 60. We each have deferred comp accounts (I have a 457b and she has a 403b) through our employers. We also invest the maximum allowed in our Roth IRAs. At what point prior to retirement should we change our investment strategy from accumulating wealth to preserving what we already have? — John
Gary B. Smith: John, not to be morbid, but the best way to answer that question would be to know your life expectancy. In the U.S. that number is roughly 77.1 years, acknowledging that a lot depends on your lifestyle, current health, family history, etc. Still, assuming you have 30 more years to enjoy life, I'd continue to accumulate vs. preserving until I was at least in my early 60s.
Question: Last year I bought JDSU at $1.53. You predicted that it would double. Today it closed at $3.71. At one point it was at $3.79. Would you say buy or sell? I have put a 10% trailing stop on it for the moment. — Barb
Gary B. Smith: Barb, a trailing stop is fine, but as you can see by the below chart, the stock is probably done moving for now. You have essentially a "double," so I'd look to take profits now.
|JDSU ran into trouble right about where you'd expect: this resistance. My take would be to rake your profits off the table and await further results.|
Question: Should I sell my Citigroup stock? I own 750 shares of Wal-Mart. Should I hold or sell? — Margie
Gary B. Smith: Margie, your question revolves not only around the prospects for C and WMT, but also of any other prospects out there. Essentially, you have two stocks that aren't moving, and look unlikely to for awhile. If you have something you like better, I'd certainly move into that, but for now, neither are broken so there's no reason to exit.
|Citi is dead money right now, but there's no reason to sell unless it breaks down from this congestion.|
|Another example of a stock doing zilch. No reason to sell, though, unless you have a better opportunity.|
Question: Where is the best place to put $60 - $80K for a while, until I purchase a condo, hopefully within a year? Right now I have $111K in a Wachovia Bank Money Market, but Capital One is offering one with 4.25%. — P.M. (Silver Spring, MD)
Gary B. Smith: I assume what you're looking for is a safe, short-term investment that will maximize your income. In that regard, the 4.25% return you're looking at is fine although you may want to also look at a 6-month Treasury bill which currently pays about 4.6%
Question: What is the minimum amount of money that should be invested in the stock market? For instance I'm on Social Security. Would it be considered a waste of time for me to invest $5, $10, or maybe $20 a week in a mutual fund? Or would I have to consider putting hundreds of dollars in the market at a time for an investment to be worthwhile? — Rich (CT)
Gary B. Smith: Rich, there is no minimum amount, and if you plan to be in the market for another 10 years or so, it is still the best place to be. Mutual funds sound like a good place to go, but ensure the cost of each transaction is less than the amount you'll be investing!
Question: I would like your thoughts on Duke Energy. With the upcoming merger with Cinergy, is this a marriage made in hell or heaven for current stock holders? — Rick
Gary B. Smith: Rick, the answer revolves around the cost savings, versus the market power of a DUK/CIN merger. In exploring the merger, the cost savings do look significant. However, DUK-CIN will still face a ton of competition and I'm just not sure the new stock will offer anything above money market returns.
Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."