Transcripts

"Money File"-Investing At Your Best in 2007

SUSIE GHARIB: From the "money file" tonight, how you can make the best of your investments in 2007. Here's Harriet Johnson Brackey, personal finance columnist for the South Florida "Sun-Sentinel."

HARRIET BRACKEY, PERSONAL FINANCE REPORTER, SO. FLORIDA SUN SENTINEL: I looked at the stock market the other day and really, it is surprising. All the major indexes are up, each one by double-digits. The economy, too, has done much better than expected. We're jumping into 2007 from a very solid base. I say investors should keep this in mind as you take your tax losses and make plans for the New Year.

Here's the big picture. We've had four and a half years in which quarterly profits have grown by double digits. Interest rates are stable. And yes, autos and housing are worrisome, but at least housing's decline is expected to end in a year or 18 months. Despite that and despite higher oil prices, the consumer was spending like crazy in November. The economy grew. Inflation was tame. So how can you make the most of this?

First, it's a great time to sell high-flying stocks and spread those gains to other parts of your portfolio. You'll lower your risk by diversifying. And since interest rates are no longer going up, it might be time to lock in a longer-term certificate of deposit. On the spending side, here's an idea. Can you improve your credit score? A good score would help you refinance a high-rate auto loan or get a better deal on a credit card, again, because rates are stable. These ideas are basic, but New Year's is a great time to get your personal finance basics in order. I'm Harriet Johnson Brackey.