This week's answer comes from:

Lou Stanasolovich

Louis P. Stanasolovich, CFP is Founder, CEO, and President of Legend Financial Advisors, Inc. (Legend), a fee-only financial advisory firm with its headquarters located in Pittsburgh, Pennsylvania.  Legend provides Wealth Advisory Services, including Comprehensive Financial Planning and Investment Management, to affluent and wealthy individuals as well as business entities.  Mr. Stanasolovich has been selected by Worth Magazine as one of “The 250 Best Financial Advisors in America” five successive times, by Medical Economics as one of “The 150 Best Financial Advisors in America for Doctors” three consecutive times and most recently by Mutual Funds magazine as one of “The 100 Great Financial Planners in America” in its October, 2001 issue.  His investment process has been profiled in Barron’s, Business Week, Investment Advisor, Investment News, Morningstar Investor, USA Today, Worth, and on the Internet publication TheStreet.com.  He can be reached via e-mail at legend@legend-financial.com, via the website - www.legend-financial.com, or at (888) 236-5960.

Is this a good time to buy bond funds for income?

Are there fund that concentrate on water?

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Is this a good time to buy bond funds for income?

from Sharon

A: Let us change the question a bit.  Is it a good time to buy bonds with interest rates at near all time lows but likely to rise somewhat over the next few years?  About the most you could reasonably expect is a 5% total return (4% for municipals) under the best of circumstances.  With inflation expected to be in the 3.0% to 4.0% range, that does not leave much for income after inflation, unless you don’t care about keeping with inflation.  In that case, you would run out of principal in roughly 13 to 18 years.  Obviously, investing for income without capital appreciation or total return, as it is known, doesn’t make sense.

However, one way to accomplish your goals is to invest for total return which would include investing in both bonds and stocks.  You may also want to simplify matters by investing in a balanced fund or an asset allocation fund such as Leuthold Core Investment Fund.

Are there funds that concentrate on water?

from Kristina

Q: I have followed for some time the issue of water across the globe. What good opportunities exist for investing in funds that concentrate on water and water company infrastructure.

A: There is only one fund that I know of. It is called the Pictet Global Water Fund. It is a no-load fund.

Important Disclaimer

Investing in equities involves a serious principal risk, and no assurance can be given that the techniques described here will be successful. Returns vary and you may have a gain or loss when you sell your shares. Past performance is no guarantee of future results. Index returns shown are historical and include the change in share price, reinvestment of dividends, and capital gains. Indexes are unmanaged and do not reflect the impact of transaction costs. Transaction costs would have reduced the total returns.

International investments, especially those in emerging markets, entail greater risks (as well as greater potential rewards) than U.S. investing. These risks include political and economic uncertainties of foreign countries, as well as the risk of currency fluctuations. These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less-established markets and economies.

Lastly, the questions and responses set forth here are for general informational purposes only and are not intended to substitute for performing your own independent research or contacting your financial or legal professional before making any investment decisions. We make no guarantees as to the performance of any investment strategy you choose and are not responsible for any losses you might incur.