Question:
I was recently recommended IACIX—ING American Century Small- Mid-Cap Value Portfolio. Do you have any opinions on this fund? Didn’t you say that small-mid funds are growth not value?
Answer
ING American Century Small-Mid Cap Value (IACIX) is not a mutual fund we currently recommend. We prefer William Blair Small-Cap Value (WBVDX) or Delaware Small-Cap Value (DEVLX). However, all three track pretty closely.
All Small-Cap companies are not growth. Growth is measured by earnings and revenue growth. Value is about price ratios: price-to-earnings, price-to-book value, and price-to-sales. It is possible to have a mature, stable company that is a Small-Cap company because they are in an industry that is small. Companies inside Small-Cap funds may be purchased by other firms, giving the underlying asset growth, but the fund itself is seeking assets that are considered value plays.
We do like the fact that ING American Century Small- Mid-Cap Value is only $355 million in assets. We believe Small-Cap funds must stay small and nimble, otherwise, they may have a tough time buying or selling assets without moving the market.
Question:
I was trading on my own through a discount broker, but it’s time consuming. I’m working with a broker now, and he wants to put some conditional orders in place—he mentioned stop-loss. I thought conditional orders are more expensive than regular buy/sell orders. Will these benefit me?
Answer:
Generally, stop-loss orders are not more expensive than traditional buy or sell orders. Stop orders are when you set a price before a certain action takes place, whether that is a buy or sell. They are best used for short-term trading, or when you will be away from your portfolio and will not be able to pay attention to it.
However, we are wary of the stop-loss. If you have set a certain price to sell a security, and the security drops to the price, your order is executed. But, if bad news were revealed about your security, and the price plummets through your target price, your order will be fulfilled at any price you can get—often much lower than you wanted.
We prefer limit orders, as you can set the price you want to buy or sell your security. The trade then is only placed at that price or better.
Question:
I’ve owned shares of American Tower Corp for a few years. It has done extremely well in the time I’ve owned it. However, I know very little about it, what they do, or where they’re going. Is this OK to hold? Should I trim?
Answer:
American Tower Corp. (NYSE: AMT) owns, operates and develops communications sites, including leasing antenna space on multi-tenant communications sites to wireless providers, radio and television broadcast companies and government agencies. We recommend holding the company, as it has merged into American Tower REIT, Inc., which has a 90% payout of annual income. We believe the company has growth ahead. However, we do not recommend buying more at this time. The stock looks too expensive, even after a 10% decline in price since May 15, 2013.
At Henssler Financial we believe you should Live Ready, which includes understanding your holdings and investment strategy. If you have questions regarding your investments, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.