By Dan Goldie
If you are an investor under the age of 40, you have one big advantage over everyone else: you have an incredibly long investment time horizon during which to grow your investment dollars. Here is how to take advantage of it.
If you are an investor under the age of 40, you have one big advantage over everyone else: you have an incredibly long investment time horizon during which to grow your investment dollars.
The power of compounding is one of the great wonders of investing. The benefit of an extra decade or two can make a huge difference to your ending wealth. To capture this benefit, you have to start investing early and intelligently, and with consistency and discipline. After all, it is only with regular, long-term success that financial goals are realized.
For most investors, staying focused over the long run is challenging. The temptation to speculate can be high, and there is plenty of noise and distraction vying for your attention, making it easy to get sidetracked. Some of the confusion is caused by Wall Street hoping to get your business by playing to your hopes or fears. Some of it is the financial press trying to get catch your attention to sell advertising. Other noise is generated by the very nature of financial markets themselves, and the vast amount of information all around us. Now, more than ever, it is difficult to keep disciplined and stay the course.
The bottom line: it is not the day-to-day fluctuations of markets that should concern you. The primary risk you face as a young investor is the constant threat of inflation eating away at the purchasing power of your assets. For example, at just 3% per year, inflation will reduce the purchasing power of a portfolio by one-third after 14 years, and one-half after only 23 years. Your most important task is to invest your assets to protect yourself from this erosion.
A successful, long-term investor knows the difference between comfortable portfolio and a safe one. A comfortable portfolio does not fluctuate much in value. It might be invested in stable things like bank CDs with an expected return not much more than the rate of inflation. Alternatively, a safe portfolio has expected returns well above inflation. It is invested predominately in stocks and highly diversified. This equity oriented portfolio fluctuates with market movements and can be uncomfortable — especially during stock market declines — but it provides for long-run inflation protection.
As a young investor, you may not have made a lot of investment mistakes. That can be good and bad — good because you haven’t lost money; bad because you haven’t learned any lessons the hard way. As one of my colleagues likes to say: the market is a great teacher, but it charges a steep tuition. You can skip the tuition payment by learning how to invest prudently early on.
Remember that the stock market is not a zero-sum game. There are not winners and losers in these markets, with the winners taking all the spoils and the losers going broke. Capitalism generates positive returns overall, and, although some win more than others, everyone can succeed. The elegant truth of economics is that the return on capital is exactly equal to the cost of capital. In other words, in the aggregate, the return to investors is equal to the payment required of those entities — such as governments and corporations — seeking to attract investment capital.
Wealth is created when natural resources, labor, intellectual capital, and financial capital combine to produce economic growth. As an investor, you are entitled to a share of that economic growth when your financial assets are invested in and used by the global economy. This is not a free lunch. It is your fair share of profits as compensation for putting your money to work.
One of your main goals should be to capture as much of the global return on capital as you can. Cut your investment costs, make sure you have a widely diversified portfolio, and stay disciplined. Investing this way, you can have a successful investment experience!
Dan Goldie is a financial advisor and financial planner working with high net worth individuals and families. He is the co-author of the new book, The Investment Answer: Learn to Manage Your Money & Protect Your Financial Future. Investment advice provided through Dan Goldie Financial Services LLC, a Registered Investment Advisor.
Article Source:
http://www.articlebiz.com/article/1051379224-1-important-investment-lessons-for-young-people/
Showing posts with label investing. Show all posts
Showing posts with label investing. Show all posts
Wednesday, April 27, 2011
Monday, April 25, 2011
Better Money Management in 5 Steps
By Randall Stewart
How well do you manage your money? Ultimately, your financial success depends on your ability to take better control of your financial affairs.
Here are 5 positive habits to help you become more effective in managing your money, no matter how much you start with:
1. Start by involving your whole family in the learning process.
Engage your whole family in learning about how to effectively manage money. Don’t keep your financial affairs or investments a secret. Ongoing communication about your financial matters is an absolute must if you would like to establish trust, accountability and a sense of financial peace within your household.
2. Reduce your debt load and expenses while increasing your savings.
Could you decrease your expenditures and be content with getting by with a little less? List three to five areas you could cut back on right away that would allow you to reallocate the money not spent to increase your savings over time.
Reducing your debt load may be a long-term goal, but once you eliminate the heavy burden of bad debt, you can begin accumulating wealth.
3. Gain peace of mind with your emergency fund.
There is nothing like being worry free of knowing how you will pay for the next crisis down the road. Your goal should be to build up enough reserve funds over the course of the next year to cover three to six months of your normal expenses.
Start by opening a savings account or money market account that doesn’t penalize you for deposits and withdrawals. Eventually, you will also be able to set aside additional savings for long-term projects such as vacations, post-secondary education or projects around the home.
4. Create balance in your money management plan.
The following money management plan allows you to build up your savings and rewards you every month for your efforts. Start by setting up separate accounts for each of the following categories and allocate funds in accordance with the recommended amounts:
10% of your net income for investing in your financial freedom
Your goal is to set aside money every month, building up your capital in various investments.
At no point in time should you spend the capital that you have already invested. You may reallocate capital to finance a project that is going to create wealth, but avoid the temptation to pay off any expenses.
10% for your education
Your financial literacy is fundamental to becoming a wise investor. This knowledge may be gained from a variety of sources, such as home self-study courses, workshops, seminars, books, CDs, websites and investment clubs.
10% for giving
Giving not only brings joy to others; it also brings you a sense of gratification in knowing that you are adding value to other people’s lives. Get into the habit of supporting your community and helping those in need.
10% for your emergency fund and future projects
As outlined already outlined, set aside money to cover any unforeseen expenses.
10% for play
Life should be enjoyed now and through retirement. A secret to managing money well is establishing balance between hard work and rewarding yourself. Your play account should be spent each month on ways that rejuvenate your body and spirit such as a weekend getaway for two, a meal in a classy restaurant or a day at a health spa.
50% for necessities
The majority of your monthly financial obligations or expenses fall into this category. Make a concerted effort to reduce your expenses in the early goings by cutting back on certain luxuries or desires. A key factor to getting ahead is coming to an agreement with your spouse about how you will manage your financial affairs, including your long-term financial goals.
5. Track your cash flow and your net worth.
Your cash flow analysis
An important aspect of controlling your money and being successful in the world of finances is keeping tabs on your cash flow on a regular basis. Your cash flow analysis is a written plan of how you spend your money. It is a simple cost-breakdown of your expenses, as seen in most budgets, and involves tracking your income and expenses on a monthly basis. Your cash flow analysis should take into account several important factors, such as:
• your budget priorities as a family, based on your passions and dreams
• the impact of your specific family values on your cash flow
• specific short-term budgeting plans, as well as long-term projections over a six-month to one-year period.
One easy way to keep track of your cash flow is to use an electronic spreadsheet.
Your net worth
Besides monitoring your cash flow, it is important to periodically assess your net worth. To calculate your net worth, you need to total up the assets you possess and subtract your liabilities. Assets typically show up in categories such as:
• investments,
• bank accounts,
• pension plans,
• chattels or
• equity in your personal residence.
On the other hand, liabilities include such categories as:
• credit card debt,
• long-term loans,
• home mortgage,
• taxes owing or
• unpaid bills.
Calculate your net worth right now and then monitor your net worth every three to four months. The simplest way to keep track of your net worth is with an electronic spreadsheet.
In summary, by implementing these 5 positive money management habits you will begin to realize your dreams for a better future. Keep in mind that what you focus your attention on will increase.
How well do you manage your money? Ultimately, your financial success depends on your ability to take better control of your financial affairs.
Here are 5 positive habits to help you become more effective in managing your money, no matter how much you start with:
1. Start by involving your whole family in the learning process.
Engage your whole family in learning about how to effectively manage money. Don’t keep your financial affairs or investments a secret. Ongoing communication about your financial matters is an absolute must if you would like to establish trust, accountability and a sense of financial peace within your household.
2. Reduce your debt load and expenses while increasing your savings.
Could you decrease your expenditures and be content with getting by with a little less? List three to five areas you could cut back on right away that would allow you to reallocate the money not spent to increase your savings over time.
Reducing your debt load may be a long-term goal, but once you eliminate the heavy burden of bad debt, you can begin accumulating wealth.
3. Gain peace of mind with your emergency fund.
There is nothing like being worry free of knowing how you will pay for the next crisis down the road. Your goal should be to build up enough reserve funds over the course of the next year to cover three to six months of your normal expenses.
Start by opening a savings account or money market account that doesn’t penalize you for deposits and withdrawals. Eventually, you will also be able to set aside additional savings for long-term projects such as vacations, post-secondary education or projects around the home.
4. Create balance in your money management plan.
The following money management plan allows you to build up your savings and rewards you every month for your efforts. Start by setting up separate accounts for each of the following categories and allocate funds in accordance with the recommended amounts:
10% of your net income for investing in your financial freedom
Your goal is to set aside money every month, building up your capital in various investments.
At no point in time should you spend the capital that you have already invested. You may reallocate capital to finance a project that is going to create wealth, but avoid the temptation to pay off any expenses.
10% for your education
Your financial literacy is fundamental to becoming a wise investor. This knowledge may be gained from a variety of sources, such as home self-study courses, workshops, seminars, books, CDs, websites and investment clubs.
10% for giving
Giving not only brings joy to others; it also brings you a sense of gratification in knowing that you are adding value to other people’s lives. Get into the habit of supporting your community and helping those in need.
10% for your emergency fund and future projects
As outlined already outlined, set aside money to cover any unforeseen expenses.
10% for play
Life should be enjoyed now and through retirement. A secret to managing money well is establishing balance between hard work and rewarding yourself. Your play account should be spent each month on ways that rejuvenate your body and spirit such as a weekend getaway for two, a meal in a classy restaurant or a day at a health spa.
50% for necessities
The majority of your monthly financial obligations or expenses fall into this category. Make a concerted effort to reduce your expenses in the early goings by cutting back on certain luxuries or desires. A key factor to getting ahead is coming to an agreement with your spouse about how you will manage your financial affairs, including your long-term financial goals.
5. Track your cash flow and your net worth.
Your cash flow analysis
An important aspect of controlling your money and being successful in the world of finances is keeping tabs on your cash flow on a regular basis. Your cash flow analysis is a written plan of how you spend your money. It is a simple cost-breakdown of your expenses, as seen in most budgets, and involves tracking your income and expenses on a monthly basis. Your cash flow analysis should take into account several important factors, such as:
• your budget priorities as a family, based on your passions and dreams
• the impact of your specific family values on your cash flow
• specific short-term budgeting plans, as well as long-term projections over a six-month to one-year period.
One easy way to keep track of your cash flow is to use an electronic spreadsheet.
Your net worth
Besides monitoring your cash flow, it is important to periodically assess your net worth. To calculate your net worth, you need to total up the assets you possess and subtract your liabilities. Assets typically show up in categories such as:
• investments,
• bank accounts,
• pension plans,
• chattels or
• equity in your personal residence.
On the other hand, liabilities include such categories as:
• credit card debt,
• long-term loans,
• home mortgage,
• taxes owing or
• unpaid bills.
Calculate your net worth right now and then monitor your net worth every three to four months. The simplest way to keep track of your net worth is with an electronic spreadsheet.
In summary, by implementing these 5 positive money management habits you will begin to realize your dreams for a better future. Keep in mind that what you focus your attention on will increase.
Tuesday, April 19, 2011
How To Invest Money Wisely
By Bill Ingram
How to Invest Money
How to invest money wisely is the question that many people ask themselves, but very few really understand the process of investing money. Anytime that you invest money, there is some amount of risk involved. Before you decide to invest your money, you need to evaluate the risk against the potential return that you will receive. It is best to both invest and save your money at the same time. The difference is that when you invest, you have a much higher possible return, but also an increased risk.
Every day you are making financial decisions that impact your life. In order to be a thriving investor, you need to make investing and saving a part of your daily routine. Many ask how to save money to use for investing. You will be surprised how little savings it takes to begin your path to riches. You might invest $20 or you might invest $1000. You need to invest an amount that you feel comfortable with after all of the bills are paid.
But you wonder how to invest money wisely? There are two types of investors. You can be an active investor, where you or your broker picks your own stocks, bonds, and other investments. Or you can be a passive investor. This is when you follow the advice of an index created by some other party.
If you are investing a small amount of money, probably the best route that you should take is with Dividend Reinvestment Plans, or DRPs. This is when you do not go through a broker, but you directly pick stocks from the companies or their agents. There are thousands of major companies that offer stock plans. If you are just beginning with investing, this is a good starting place. You can eventually even set up an automatic payment plan.
DRPs are considered a safe way to create wealth over a long period of time. However, it is very important for you to keep all of your records for tax purposes. There are many ways to invest money with imagination being the limit. Do your due diligence and research before doing so.
Another method if you want to know how to invest money is to use index funds. This is a good choice if you have a few hundred dollars to invest. Index funds normally track an index, such as the Dow or NASDAQ. Some indexes permit you to invest less than $250, but you should not use this if you are investing more than $100. The biggest benefit from an index is that they are inexpensive because they just track the index. Two of the most popular index funds are through mutual funds or Exchange Traded Funds.
If you have a little more money to invest, you might want to consider a discount brokerage account. This is when to pay an expert to buy stocks, bonds, mutual funds, or other investments. You should only invest money in the stock market if you have reason to believe it will go up. It is a risk, but with the advice of your financial advisor, you could end up making a lot of money. However, keep in mind that the stock market is so unpredictable, so it is also possible that you could lose everything that you have invested.
Forex Trading is also a good choice if you have a considerable amount of money to invest. This is when you purchase one currency at precise exchange rate and then sell it when the exchange rate goes up. Forex Trading is basically when you make a substantial number of small transactions each day. In order to complete Forex Trading, just find a broker and get them to open the accounts for you.
It is important to research your options on how to invest money, so that you can make the best decision based on your needs. Go online and look at all of the possibilities, and then choose wisely.
With the economy like it is today, the stock market fluctuates frequently. Therefore, it is important to make wise and thought out investments, so you can be sensible with your money. Because investing sounds complicated, you may feel you do not know how to invest money; however, it is really quite simple and rewarding if you have the patience and take the time to be well informed and educated on the strategies involved.
Having said that there is a website that can give you more ideas on how to invest money. To help you achieve your financial goals go to http://www.howtobecomeamillionaireonline.org.
Article Source: http://EzineArticles.com/?expert=Bill_Ingram
http://EzineArticles.com/?How-to-Invest-Money-Wisely&id=6116228
Monday, April 11, 2011
Income Investing: Selecting the Right Stuff
By: Steve Selengut
When is 3 percent better than 6 percent? Yeah, we all know the answer, but only until the prices of the securities we already own begin to fall. Then, logic and mathematical acumen disappear and we become susceptible to all kinds of special cures for the periodic onset of higher interest rates. We'll be told to sit in cash until rates stop rising, or to sell the securities we own now, before they lose even more of their precious Market Value. Other gurus will suggest the purchase of shorter-term bonds or CDs (ugh) to stem the tide of the perceived erosion in portfolio values. There are two important things that your mother never told you about Income Investing: (1) Higher Interest Rates are good for investors, even better than lower rates, and (2) Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult.
Higher Interest Rates are the result of the Government's efforts to slow a growing economy in hopes of preventing an appearance of the three headed inflation monster. A quick glance over your shoulder might remind you of recent times when the government was trying to heal the wounds of a misguided Wall Street attack on traditional investment principles by lowering interest rates. The strategy worked, the economy rebounded, and Wall Street is trying to scramble back to where it was nearly six years ago. Think about the impact of changing interest rates on your Income Securities during the past five years. Bonds and Preferred Stocks; Government and Municipal Securities; they all moved higher in Market Value. Sure you felt wealthier, but the increase in your Annual Spendable Income got smaller and smaller. Your total income could well have decreased during the period as higher interest rate holdings were called away (at face value), and reinvestments were made at lower yields!
How many of you have mental bruises from the realization that you could have taken profits during the downward trajectory of the cycle, on the very securities that you now lament over. The nerve; falling below the price you paid for them years ago. But the income on these turncoats is the same as it was in 2004, when their prices were ten or twenty percent higher. This is the work of Mother Nature's financial twin sister. It's like acorns, snowfalls, and crocuses. You need to dress properly for seasonal changes and invest properly for cyclical changes. Remember the days of Bearer Bonds? There was never a whisper about Market Value erosian. Was it the IRS or Institutional Wall Street that took them away?
Higher rates are good for investors, particularly when retirement is a factor in your investment decisions. The more you receive for your reinvestment dollars, the more likely it is that you won't need a second job to maintain your standard of living. I know of no retail entity, from grocery store to cruise line that will accept the Market Value of your portfolio as payment for goods or services. Income pays the bills, more is always better than less, and only increased income levels can protect you from inflation! So, you say, how does a person take advantage of the cyclical nature of interest rates to garner the best possible income on investment quality securities? You might also ask why Wall Street makes such a fuss about the dismal bond market and offers more of their patented Sell Low, Buy High advisories, but that should be fairly obvious. An unhappy investor is Wall Streets best customer.
Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult, but it does require a change in focus from the statement bottom line... and the use of a few security types that you may not be 100% comfortable with. I'm going to assume that you are familiar with these investments, each of which could be considered (from time to time) for a spot in the well diversified Income Portion of your Asset Allocation: (1) The traditional individual Municipal and Corporate Bonds, Treasuries, Government Agency Securities, and Preferred Stocks. (2) The eyebrow raising Unit Trust varietals, Closed End Funds, Royalty Trusts, and REITs. [Purposely excluded: CDs and Money Funds, which are not investments by definition; CMOs and Zeros, mutations developed by some sicko MBAs; and Open End Mutual Funds, which just can't work because they are really "managed by the mob"... i.e., investors.] The market rules that apply to all of these are fairly predictable, but the ability to create a safer, higher yielding, and flexible portfolio varies considerably within the security types. For example, most people who invest in Individual bonds wind up with a laundry list of odd lot positions, with short durations and low yields, designed for the benefit of that smiling guy in the big corner office. There is a better way, but you have to focus on income and be willing to trade occasionally.
The larger the portfolio, the more likely it is that you will be able to buy round lots of a diversified group of bonds, preferred stocks, etc. But regardless of size, individual securities of all kinds have liquidity problems, higher risk levels than are necessary, and lower yields spaced out over inconvenient time periods. Of the traditional types listed above, only preferred stock holdings are easily added to during upward interest rate movements, and cheap to take profits on when rates fall. The downside on all of these is their callability, in best-yield-first order. Wall Street loves these securities because they command the highest possible trading costs... costs that need not be disclosed to the consumer, particularly at issue. Unit Trusts are traditional securities set to music, a tune that generally assures the investor of a higher yield than is possible through personal portfolio creation. There are several additional advantages: instant diversification, quality, and monthly cash flow that may include principal (better in rising rate markets, ya follow?), and insulation from year-end swap scams. Unfortunately, the Unit Trusts are not managed, so there are few capital gains distributions to smile about, and once all of the securities are redeemed, the party is over. Trading opportunities, the very heart and soul of successful Portfolio Management, are practically non-existent.
What if you could own common stock in companies that manage the traditional Income Securities and other recognized income producers like real estate, energy production, mortgages, etc.? Closed End Funds (CEFs), REITs, and Royalty Trusts demand your attention... and don't let the idea of "leverage" spook you. AAA + insured corporate bonds, and Utility Preferred Stocks are "leverage". The sacred 30-year Treasury Bond is "leverage". Most corporations, all governments (and most private citizens) use leverage. Without leverage, most people would be commuting to work on bicycles. Every CEF can be researched as part of your selection process to determine how much leverage is involved, and the benefits... you're not going to be happy when you realize what you've been talked out of! CEFs, and the other Investment Company securities mentioned, are managed by professionals who are not taking their direction form that mob (also mentioned earlier). They provide you the opportunity to have a properly structured portfolio with a significantly higher yield, even after the management fees that are inside.
Certainly, a REIT or Royalty Trust is more risky than a CEF comprised of Preferred Stocks or Corporate Bonds, but here you have a way to participate in the widest variety of fixed and variable income alternatives in a much more manageable form. When prices rise, profit taking is routine in a liquid market; when prices fall, you can add to your position, increasing your yield and reducing your cost basis at the same time. Now don't start to salivate about the prospect of throwing all your money into Real Estate and/or Gas and Oil Pipelines. Diversify properly as you would with any other investments, and make sure that your living expenses (actual or projected) are taken care of by the less risky CEFs in the portfolio. In bond CEFs, you can get un-leveraged portfolios, state specific and/or insured Municipal portfolios, etc. Monthly income (frequently augmented by capital gains distributions) at a level that is most often significantly better than your broker can obtain for you. I told you you'd be angry!
Another feature of Investment Company shares (and please stay away from gimmicky, passively managed, or indexed types) is somewhat surprising and difficult to explain. The price you pay for the shares frequently represents a discount from the market value of the securities contained in the managed portfolio. So instead of buying a diversified group of illiquid individual securities at a premium, you are reaping the benefit of a portfolio of (quite possibly the same) securities at a discount. Additionally, and unlike regular Mutual Funds that can issue as many shares as they like without your approval, CEFs will give you the first shot at any additional shares they intend to distribute to investors.
Stop, put down the phone. Move into these securities calmly, without taking unnecessary losses on good quality holdings, and never buy a new issue. I meant to say: absolutely never buy a new issue, for all of the usual reasons. As with individual securities, there are reasons for unusually high or low yields, like too much risk or poor management. No matter how well managed a junk bond portfolio is, it's still just junk. So do a little research and spread your dollars around the many management companies that are out there. If your advisor tells you that all of this is risky, ill-advised foolishness... well, that's Wall Street, and the baby needs shoes.
The final article in this Income Investing trilogy will be on managing the Income Portfolio using the Working Capital Model.
Author Bio
Steve Selengut
www.sancoservices.com
Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"
Article Source: http://www.ArticleGeek.com - Free Website Content
When is 3 percent better than 6 percent? Yeah, we all know the answer, but only until the prices of the securities we already own begin to fall. Then, logic and mathematical acumen disappear and we become susceptible to all kinds of special cures for the periodic onset of higher interest rates. We'll be told to sit in cash until rates stop rising, or to sell the securities we own now, before they lose even more of their precious Market Value. Other gurus will suggest the purchase of shorter-term bonds or CDs (ugh) to stem the tide of the perceived erosion in portfolio values. There are two important things that your mother never told you about Income Investing: (1) Higher Interest Rates are good for investors, even better than lower rates, and (2) Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult.
Higher Interest Rates are the result of the Government's efforts to slow a growing economy in hopes of preventing an appearance of the three headed inflation monster. A quick glance over your shoulder might remind you of recent times when the government was trying to heal the wounds of a misguided Wall Street attack on traditional investment principles by lowering interest rates. The strategy worked, the economy rebounded, and Wall Street is trying to scramble back to where it was nearly six years ago. Think about the impact of changing interest rates on your Income Securities during the past five years. Bonds and Preferred Stocks; Government and Municipal Securities; they all moved higher in Market Value. Sure you felt wealthier, but the increase in your Annual Spendable Income got smaller and smaller. Your total income could well have decreased during the period as higher interest rate holdings were called away (at face value), and reinvestments were made at lower yields!
How many of you have mental bruises from the realization that you could have taken profits during the downward trajectory of the cycle, on the very securities that you now lament over. The nerve; falling below the price you paid for them years ago. But the income on these turncoats is the same as it was in 2004, when their prices were ten or twenty percent higher. This is the work of Mother Nature's financial twin sister. It's like acorns, snowfalls, and crocuses. You need to dress properly for seasonal changes and invest properly for cyclical changes. Remember the days of Bearer Bonds? There was never a whisper about Market Value erosian. Was it the IRS or Institutional Wall Street that took them away?
Higher rates are good for investors, particularly when retirement is a factor in your investment decisions. The more you receive for your reinvestment dollars, the more likely it is that you won't need a second job to maintain your standard of living. I know of no retail entity, from grocery store to cruise line that will accept the Market Value of your portfolio as payment for goods or services. Income pays the bills, more is always better than less, and only increased income levels can protect you from inflation! So, you say, how does a person take advantage of the cyclical nature of interest rates to garner the best possible income on investment quality securities? You might also ask why Wall Street makes such a fuss about the dismal bond market and offers more of their patented Sell Low, Buy High advisories, but that should be fairly obvious. An unhappy investor is Wall Streets best customer.
Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult, but it does require a change in focus from the statement bottom line... and the use of a few security types that you may not be 100% comfortable with. I'm going to assume that you are familiar with these investments, each of which could be considered (from time to time) for a spot in the well diversified Income Portion of your Asset Allocation: (1) The traditional individual Municipal and Corporate Bonds, Treasuries, Government Agency Securities, and Preferred Stocks. (2) The eyebrow raising Unit Trust varietals, Closed End Funds, Royalty Trusts, and REITs. [Purposely excluded: CDs and Money Funds, which are not investments by definition; CMOs and Zeros, mutations developed by some sicko MBAs; and Open End Mutual Funds, which just can't work because they are really "managed by the mob"... i.e., investors.] The market rules that apply to all of these are fairly predictable, but the ability to create a safer, higher yielding, and flexible portfolio varies considerably within the security types. For example, most people who invest in Individual bonds wind up with a laundry list of odd lot positions, with short durations and low yields, designed for the benefit of that smiling guy in the big corner office. There is a better way, but you have to focus on income and be willing to trade occasionally.
The larger the portfolio, the more likely it is that you will be able to buy round lots of a diversified group of bonds, preferred stocks, etc. But regardless of size, individual securities of all kinds have liquidity problems, higher risk levels than are necessary, and lower yields spaced out over inconvenient time periods. Of the traditional types listed above, only preferred stock holdings are easily added to during upward interest rate movements, and cheap to take profits on when rates fall. The downside on all of these is their callability, in best-yield-first order. Wall Street loves these securities because they command the highest possible trading costs... costs that need not be disclosed to the consumer, particularly at issue. Unit Trusts are traditional securities set to music, a tune that generally assures the investor of a higher yield than is possible through personal portfolio creation. There are several additional advantages: instant diversification, quality, and monthly cash flow that may include principal (better in rising rate markets, ya follow?), and insulation from year-end swap scams. Unfortunately, the Unit Trusts are not managed, so there are few capital gains distributions to smile about, and once all of the securities are redeemed, the party is over. Trading opportunities, the very heart and soul of successful Portfolio Management, are practically non-existent.
What if you could own common stock in companies that manage the traditional Income Securities and other recognized income producers like real estate, energy production, mortgages, etc.? Closed End Funds (CEFs), REITs, and Royalty Trusts demand your attention... and don't let the idea of "leverage" spook you. AAA + insured corporate bonds, and Utility Preferred Stocks are "leverage". The sacred 30-year Treasury Bond is "leverage". Most corporations, all governments (and most private citizens) use leverage. Without leverage, most people would be commuting to work on bicycles. Every CEF can be researched as part of your selection process to determine how much leverage is involved, and the benefits... you're not going to be happy when you realize what you've been talked out of! CEFs, and the other Investment Company securities mentioned, are managed by professionals who are not taking their direction form that mob (also mentioned earlier). They provide you the opportunity to have a properly structured portfolio with a significantly higher yield, even after the management fees that are inside.
Certainly, a REIT or Royalty Trust is more risky than a CEF comprised of Preferred Stocks or Corporate Bonds, but here you have a way to participate in the widest variety of fixed and variable income alternatives in a much more manageable form. When prices rise, profit taking is routine in a liquid market; when prices fall, you can add to your position, increasing your yield and reducing your cost basis at the same time. Now don't start to salivate about the prospect of throwing all your money into Real Estate and/or Gas and Oil Pipelines. Diversify properly as you would with any other investments, and make sure that your living expenses (actual or projected) are taken care of by the less risky CEFs in the portfolio. In bond CEFs, you can get un-leveraged portfolios, state specific and/or insured Municipal portfolios, etc. Monthly income (frequently augmented by capital gains distributions) at a level that is most often significantly better than your broker can obtain for you. I told you you'd be angry!
Another feature of Investment Company shares (and please stay away from gimmicky, passively managed, or indexed types) is somewhat surprising and difficult to explain. The price you pay for the shares frequently represents a discount from the market value of the securities contained in the managed portfolio. So instead of buying a diversified group of illiquid individual securities at a premium, you are reaping the benefit of a portfolio of (quite possibly the same) securities at a discount. Additionally, and unlike regular Mutual Funds that can issue as many shares as they like without your approval, CEFs will give you the first shot at any additional shares they intend to distribute to investors.
Stop, put down the phone. Move into these securities calmly, without taking unnecessary losses on good quality holdings, and never buy a new issue. I meant to say: absolutely never buy a new issue, for all of the usual reasons. As with individual securities, there are reasons for unusually high or low yields, like too much risk or poor management. No matter how well managed a junk bond portfolio is, it's still just junk. So do a little research and spread your dollars around the many management companies that are out there. If your advisor tells you that all of this is risky, ill-advised foolishness... well, that's Wall Street, and the baby needs shoes.
The final article in this Income Investing trilogy will be on managing the Income Portfolio using the Working Capital Model.
Author Bio
Steve Selengut
www.sancoservices.com
Professional Portfolio Management since 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"
Article Source: http://www.ArticleGeek.com - Free Website Content
Investing in the Stock Market
By: Kieran Waldron
Had you invested in real estate (or property as it is known in the UK) over the past 30 years or so you would have done very well.However, prices have now reached such a level that it may not be such a good investment especially in the short-term. Over the long-term,prices are sure to appreciate once again. Outside of bricks and mortar, the stock market still
provides the skilled individual with one of the best opportunities at capital appreciation.
With the globalization of markets now having been accomplished enabling an individual to trade in almost any market across the globe from anywhere, we will concentrate on the American market which is still the biggest and most liquid market. Having decided to concentrate on the American market, you now must decide on what sort of companies offer the best opportunities for making a profit.Small technology or biotechnology companies can sometimes offer spectacular gains in the short-term. However, your chance of picking them out of the bunch in advance of the significant move in their share price, unless you are equipped with insider knowledge, is pretty slim. Therefore concentrating on large established companies is a much safer route to profits.Concentrating on the constituent members of the S&P 500 index provides the investor with ample scope for investment in established companies. I will therefore solely turn my attention to the latter to provide the necessary fodder.
When viewing companies in an index such as the S&P 500, you have got to be aware of the different sectors within it. In order to reduce your risk, it is inadvisable to invest in more than one company in any one sector at a given time. Picking on a sector that is currently advancing, or about to advance, and then looking for the most eligible company within that sector likely to profit from the favorable tide can be very rewarding. The company chosen needn't be the market leader in that particular sector. If Xxon Mobil, for
instance, dominates the Oil and Gas sector, a second or third line company in that sector such as Occidental Petroleum may give you a much better opportunity to profit from rising oil prices for example.
Ideally you are looking for an established company in a sector that is advancing, or likely to advance, that is paying increasing dividends from rising profits, and with a p/e ratio ( that is payment/earnings) less onerous than its peers.P/e ratios are only relevant when comparing companies within the same sector. Another approach to picking a company whose share price is likely to advance is to pick a large company with good prospects when it is temporarily out of favor with the market. Both AIG Group and Pfizer have been in the doghouse over the last couple of years enabling astute investors to profit from their short-term
unpopularity.With the latter strategy timing is of crucial importance.
If you segregate, say, $20,000 as starting capital for investment purposes from other funds required to live from month to month, the best place to initially put it is into a high-interest bank account until such time as you are ready to invest. This account should pay 4% or better interest per year.You would then limit your investment in any one share to 15% of the total, or $3,000 including dealing expenses per investment. It is inadvisable,especially in jittery markets, to have more than 70% of the total invested at any one time.The market has moods and when everything looks black on the horizon good shares will fall back with the mediocre and bad ones giving you a chance to buy a good share at cheap prices for recovery.
If you do your own research, it is best to use and execution- only broker who are cheaper than those offering investment advice. Pick a large broker with many years service in the market. If you want a broker offering investment advice, go for one who has a proven record of offering impartial advice in the market as recommended by a friend or acquaintance.
Author Bio
About the author: Kieran Waldron is a researcher on many subjects who has recently become an internet publisher. More articles on investment can be viewed at the following website: www.investingaim.com
Article Source: http://www.ArticleGeek.com - Free Website Content
Had you invested in real estate (or property as it is known in the UK) over the past 30 years or so you would have done very well.However, prices have now reached such a level that it may not be such a good investment especially in the short-term. Over the long-term,prices are sure to appreciate once again. Outside of bricks and mortar, the stock market still
provides the skilled individual with one of the best opportunities at capital appreciation.
With the globalization of markets now having been accomplished enabling an individual to trade in almost any market across the globe from anywhere, we will concentrate on the American market which is still the biggest and most liquid market. Having decided to concentrate on the American market, you now must decide on what sort of companies offer the best opportunities for making a profit.Small technology or biotechnology companies can sometimes offer spectacular gains in the short-term. However, your chance of picking them out of the bunch in advance of the significant move in their share price, unless you are equipped with insider knowledge, is pretty slim. Therefore concentrating on large established companies is a much safer route to profits.Concentrating on the constituent members of the S&P 500 index provides the investor with ample scope for investment in established companies. I will therefore solely turn my attention to the latter to provide the necessary fodder.
When viewing companies in an index such as the S&P 500, you have got to be aware of the different sectors within it. In order to reduce your risk, it is inadvisable to invest in more than one company in any one sector at a given time. Picking on a sector that is currently advancing, or about to advance, and then looking for the most eligible company within that sector likely to profit from the favorable tide can be very rewarding. The company chosen needn't be the market leader in that particular sector. If Xxon Mobil, for
instance, dominates the Oil and Gas sector, a second or third line company in that sector such as Occidental Petroleum may give you a much better opportunity to profit from rising oil prices for example.
Ideally you are looking for an established company in a sector that is advancing, or likely to advance, that is paying increasing dividends from rising profits, and with a p/e ratio ( that is payment/earnings) less onerous than its peers.P/e ratios are only relevant when comparing companies within the same sector. Another approach to picking a company whose share price is likely to advance is to pick a large company with good prospects when it is temporarily out of favor with the market. Both AIG Group and Pfizer have been in the doghouse over the last couple of years enabling astute investors to profit from their short-term
unpopularity.With the latter strategy timing is of crucial importance.
If you segregate, say, $20,000 as starting capital for investment purposes from other funds required to live from month to month, the best place to initially put it is into a high-interest bank account until such time as you are ready to invest. This account should pay 4% or better interest per year.You would then limit your investment in any one share to 15% of the total, or $3,000 including dealing expenses per investment. It is inadvisable,especially in jittery markets, to have more than 70% of the total invested at any one time.The market has moods and when everything looks black on the horizon good shares will fall back with the mediocre and bad ones giving you a chance to buy a good share at cheap prices for recovery.
If you do your own research, it is best to use and execution- only broker who are cheaper than those offering investment advice. Pick a large broker with many years service in the market. If you want a broker offering investment advice, go for one who has a proven record of offering impartial advice in the market as recommended by a friend or acquaintance.
Author Bio
About the author: Kieran Waldron is a researcher on many subjects who has recently become an internet publisher. More articles on investment can be viewed at the following website: www.investingaim.com
Article Source: http://www.ArticleGeek.com - Free Website Content
The Basics of Investing
The Basics of Investing
Author: Ade Lamidi
Copyright (c) 2007 Ade Lamidi
Investing can be defined in many different ways. It can be termed as the proactive use of your money to make more money or, to say it another way, it is your money working for you. Another way of looking at it is when you use your savings to buy something and think you will earn a decent amount of income and/or go up in value over time.
The concept behind investing is that you put your money to use in such a way that it is likely to turn into more money. So investing is not only an opportunity to make more money, but away to protect the money that you currently have.
Short-term investing or day trading cannot be classed as investing because it's virtually impossible to see the very near-term future of a stock, however if you enlighten yourself and then take a long-term perspective, there is an excellent chance that you will earn a great return on your investment. In retrospect, investing will require a more conscious decision.
When you put your money to invest that and it accrues value at a slower rate than the rate of inflation it will worth less and less as time passes. So in other words, you have to be creative and take some risk if you want to make more from your initial investment.
Stock Investing is more than just the receiving the right to receive future cash distributions from any business. When you initially buy a stock, you are buying a piece of a company or business and you become a part owner. For example, a lot of the people that joined Microsoft in the early days became part owners as well as employees of the company and ended up as millionaires because the value of Microsoft shares shot up.
There are different characteristics that set investing in stocks apart from savings. Trading in stocks differs from investing when you consider that trading relies more on the fluctuations of the stock value itself. Furthermore, stock investing risks are not distributed equally across all time-periods in which it is possible to own stocks.
Real Estate investing is another form of investing that can generate wealth. However, most people are lead to believe that real estate investing is only for the wealthy folks. What seems to amaze me it the amount of people who get started in real estate investing, only to fail when the going gets tough. Buying and flipping real estate over time has proven to be a great way to get started in real estate investing. Another way of taking advantage to real estate investing is to use the no money down concept and keep your ethics intact. A lot of people continue to ask if it is possible to get a piece of real estate without any of your own money. There are different ways to invest in real estate with none of your own money. It all depends on the value of the real estate in question when you purchase it. If you can get it at a reasonable discount to actual value, there are specialist lenders that will borrow you all the money up front in exchange for a good return on the money they borrowed you.
Finally, succeeding in investing will require you to anticipate the anticipations of others. The real key to investing is to minimize the outward risk and to maximize the financial reward. Investing could be termed as the science and art of trading off risk against reward.
------
This article was written by Ade Lamidi, webmaster at http://www.SucceedAtInvesting.com , a website dedicated to Investing and investment related articles.
Article Source: http://www.articlealley.com/article_183731_19.html
Author: Ade Lamidi
Copyright (c) 2007 Ade Lamidi
Investing can be defined in many different ways. It can be termed as the proactive use of your money to make more money or, to say it another way, it is your money working for you. Another way of looking at it is when you use your savings to buy something and think you will earn a decent amount of income and/or go up in value over time.
The concept behind investing is that you put your money to use in such a way that it is likely to turn into more money. So investing is not only an opportunity to make more money, but away to protect the money that you currently have.
Short-term investing or day trading cannot be classed as investing because it's virtually impossible to see the very near-term future of a stock, however if you enlighten yourself and then take a long-term perspective, there is an excellent chance that you will earn a great return on your investment. In retrospect, investing will require a more conscious decision.
When you put your money to invest that and it accrues value at a slower rate than the rate of inflation it will worth less and less as time passes. So in other words, you have to be creative and take some risk if you want to make more from your initial investment.
Stock Investing is more than just the receiving the right to receive future cash distributions from any business. When you initially buy a stock, you are buying a piece of a company or business and you become a part owner. For example, a lot of the people that joined Microsoft in the early days became part owners as well as employees of the company and ended up as millionaires because the value of Microsoft shares shot up.
There are different characteristics that set investing in stocks apart from savings. Trading in stocks differs from investing when you consider that trading relies more on the fluctuations of the stock value itself. Furthermore, stock investing risks are not distributed equally across all time-periods in which it is possible to own stocks.
Real Estate investing is another form of investing that can generate wealth. However, most people are lead to believe that real estate investing is only for the wealthy folks. What seems to amaze me it the amount of people who get started in real estate investing, only to fail when the going gets tough. Buying and flipping real estate over time has proven to be a great way to get started in real estate investing. Another way of taking advantage to real estate investing is to use the no money down concept and keep your ethics intact. A lot of people continue to ask if it is possible to get a piece of real estate without any of your own money. There are different ways to invest in real estate with none of your own money. It all depends on the value of the real estate in question when you purchase it. If you can get it at a reasonable discount to actual value, there are specialist lenders that will borrow you all the money up front in exchange for a good return on the money they borrowed you.
Finally, succeeding in investing will require you to anticipate the anticipations of others. The real key to investing is to minimize the outward risk and to maximize the financial reward. Investing could be termed as the science and art of trading off risk against reward.
------
This article was written by Ade Lamidi, webmaster at http://www.SucceedAtInvesting.com , a website dedicated to Investing and investment related articles.
Article Source: http://www.articlealley.com/article_183731_19.html
How To Start Stock Market Investing
How To Start Stock Market Investing
Author: Antwan Rhodes
The latest years have proven that there was a decline within the stock markets. Those people who had previously invested with the stock market may be reluctant to interact within the stocks out of concern that their investments are now not the same. This might mean only one thing for the beginning investor-procrastination in investing, in all probability on account of doubt and lack of faith within the market.
Getting a superb understanding of the financial markets is a vital course of and simply as very important as it might be, it may also seem daunting for the start investor. The market knowledge, speculative materials and monetary info that you could possibly lay your fingers on could appear overwhelming. This could make the information seem unreasonable and possibly even useless.
The business of stock markets has been around for around 2 hundred years... however not all are conscious of the varied elements that comprise trading within the market. The stock market is a generalized time period used to symbolize the place where the buying and selling of stocks and bonds take place. Trading implies both acts of sale and purchase. Stocks signify the variety of models one owns in a selected company.
When a stock is used to bring up money, it is called as fairness financing. The money that traders place in such stocks is known as an fairness capital. Firms give out stocks for certain sums of money to raise money. This is then used for numerous functions reminiscent of expanding the company, paying for infrastructure and other items. This is also carried out when they need to increase extra money. The point right here being that as an investor, if the corporate's stock's prices improve, so does the worth of your share and if the opposite occurs, the value of your share drops too.
If you promote the stocks at a worth increased than that for which you purchased it, you benefit from the investment. The knowledge provided right here is merely an overview and treats the subject of stocks in as easy a fashion as is feasible here.
If you are trying to make long-term investments, shopping for stocks is a good idea. When you purchase a bit of the company's stock it is equal to purchasing a bit of its future benefits and profits as well. Several studies have shown that over a time period of ten years, the amount that an investor positive aspects from investing within the stocks of a company as opposed to investing in other areas (similar to bonds and long-term deposits) is larger than in the latter area.
One of many methods by which people spend money on stocks is once they get information about a probably benefiting funding opportunity from a broker, a friend who is an investor, an agent etc. They could find yourself shopping for stocks when the market is viable and eventually promote the stocks when the market hits a low. This manner they have an inclination to lose money. This is usually the predicament of those who don't have an investment strategy.
Additional Resource(s):
How To Start Stock Market Investing
Article Source: http://www.articlealley.com/article_2062303_63.html
About the Author: Author is a leading writer about http://www.thestreet.com/
http://www.thestreet.com/
Author: Antwan Rhodes
The latest years have proven that there was a decline within the stock markets. Those people who had previously invested with the stock market may be reluctant to interact within the stocks out of concern that their investments are now not the same. This might mean only one thing for the beginning investor-procrastination in investing, in all probability on account of doubt and lack of faith within the market.
Getting a superb understanding of the financial markets is a vital course of and simply as very important as it might be, it may also seem daunting for the start investor. The market knowledge, speculative materials and monetary info that you could possibly lay your fingers on could appear overwhelming. This could make the information seem unreasonable and possibly even useless.
The business of stock markets has been around for around 2 hundred years... however not all are conscious of the varied elements that comprise trading within the market. The stock market is a generalized time period used to symbolize the place where the buying and selling of stocks and bonds take place. Trading implies both acts of sale and purchase. Stocks signify the variety of models one owns in a selected company.
When a stock is used to bring up money, it is called as fairness financing. The money that traders place in such stocks is known as an fairness capital. Firms give out stocks for certain sums of money to raise money. This is then used for numerous functions reminiscent of expanding the company, paying for infrastructure and other items. This is also carried out when they need to increase extra money. The point right here being that as an investor, if the corporate's stock's prices improve, so does the worth of your share and if the opposite occurs, the value of your share drops too.
If you promote the stocks at a worth increased than that for which you purchased it, you benefit from the investment. The knowledge provided right here is merely an overview and treats the subject of stocks in as easy a fashion as is feasible here.
If you are trying to make long-term investments, shopping for stocks is a good idea. When you purchase a bit of the company's stock it is equal to purchasing a bit of its future benefits and profits as well. Several studies have shown that over a time period of ten years, the amount that an investor positive aspects from investing within the stocks of a company as opposed to investing in other areas (similar to bonds and long-term deposits) is larger than in the latter area.
One of many methods by which people spend money on stocks is once they get information about a probably benefiting funding opportunity from a broker, a friend who is an investor, an agent etc. They could find yourself shopping for stocks when the market is viable and eventually promote the stocks when the market hits a low. This manner they have an inclination to lose money. This is usually the predicament of those who don't have an investment strategy.
Additional Resource(s):
How To Start Stock Market Investing
Article Source: http://www.articlealley.com/article_2062303_63.html
About the Author: Author is a leading writer about http://www.thestreet.com/
http://www.thestreet.com/
Stock Market Advice - Investing Tips for Beginners
Stock Market Advice - Investing Tips for Beginners
Author: Mark
It’s understandable that almost all new investors are feeling a bit scared by speed and difficulty of stock market. Not only the stock market insists individuals to surrender their hard-earned cash in the exchange for pieces of paper that might or will not be worth in an coming days, they have to also cope with a foreign terminology, strategy & analysis. The worst thing you will perform just as one investor is beginning to agree without question all stock market advice that has been thrown at you. It is vital that you research only the basics which drive the market, then begin to seek out answers to queries that occur in your own mind.
Seeking around for stock market recommendations like a beginner, it’s significant to start with sources that have already proven that they are fine as well as truthful. Despite where you go for the guidance, keep in mind that nobody has all solutions you must keep the firm grip on good judgment & keep away from situations where you take the unnecessary risk.
One of the primary pieces of the stock market advice to take to heart like a first time is that stocks with low prices do not necessarily have a low-price risk with them. Since you start looking over the internet, you may see a lot of have a discussion regarding "penny stocks” that noises ideal for the starter only the penny! What they do not tell you are the upper the stock price, the better the business is unstable, that implies you would be in both large profits & losses without warning some time.
The other important tip for newcomers in search of stock market advice, there is certainly no cause why you should go it alone. You will find numerous other investors out there who've made errors already painful & if they can't undo their decisions they can share their information & keep the other investor distrust of creating those same poor choices. Take time to join a small number of online communities of the stock trading specialists where you may raise queries & practice your study in the secure environment before putting your skill to the work in world.
You are suggested to spend Ten Minutes in a week, to get useful and actionable Stock Market Information for building wealth and making you richer and most successful investor. Subscribe to Free Weekly Wealth Letter and find useful Stock Market Information.
Article Source: http://www.articlealley.com/article_2177084_19.html
Author: Mark
It’s understandable that almost all new investors are feeling a bit scared by speed and difficulty of stock market. Not only the stock market insists individuals to surrender their hard-earned cash in the exchange for pieces of paper that might or will not be worth in an coming days, they have to also cope with a foreign terminology, strategy & analysis. The worst thing you will perform just as one investor is beginning to agree without question all stock market advice that has been thrown at you. It is vital that you research only the basics which drive the market, then begin to seek out answers to queries that occur in your own mind.
Seeking around for stock market recommendations like a beginner, it’s significant to start with sources that have already proven that they are fine as well as truthful. Despite where you go for the guidance, keep in mind that nobody has all solutions you must keep the firm grip on good judgment & keep away from situations where you take the unnecessary risk.
One of the primary pieces of the stock market advice to take to heart like a first time is that stocks with low prices do not necessarily have a low-price risk with them. Since you start looking over the internet, you may see a lot of have a discussion regarding "penny stocks” that noises ideal for the starter only the penny! What they do not tell you are the upper the stock price, the better the business is unstable, that implies you would be in both large profits & losses without warning some time.
The other important tip for newcomers in search of stock market advice, there is certainly no cause why you should go it alone. You will find numerous other investors out there who've made errors already painful & if they can't undo their decisions they can share their information & keep the other investor distrust of creating those same poor choices. Take time to join a small number of online communities of the stock trading specialists where you may raise queries & practice your study in the secure environment before putting your skill to the work in world.
You are suggested to spend Ten Minutes in a week, to get useful and actionable Stock Market Information for building wealth and making you richer and most successful investor. Subscribe to Free Weekly Wealth Letter and find useful Stock Market Information.
Article Source: http://www.articlealley.com/article_2177084_19.html
Three Important Investing Tips For Inexperienced Investors
Three Important Investing Tips For Inexperienced Investors
Author: John Burrow
Investing your hard eared money can be a mine field. Every day we read and hear about people who had their life savings wiped out by scrupulous investors. When Bernie Maddoff made the headlines the world was outraged by how much money he stole from uninformed investors. You don't want to be one of them and what you want to do is to tread carefully yet have enough trust in the right people to have your money work hard for you while its safe and secure.
If you want to invest then you will have to trust people. Its been said that investing is a team sport and you need to have experts do those things you don't do well. Like doctors, lawyers and accountants you should be able to trust an experienced investor with your money. Even with the help of a professional you need to be careful. Here are 3 great tips to help you get the most of your investing while staying safe and secure.
1. Know the risk and the reward
All investments you make are "dictated" by the relationship between risk and reward. High risk investments usually have high rewards. Low risk investments usually have a lower return and the amount of risk you are comfortable with should dictate your investment strategy. If you have a professional dealing with your investments then you need to make sure that you know exactly what the risks are.
2. Commitment
One of the problems with investing in mutual funds is that you need to commit yourself for a set period of time. The time frames usually vary from 1 to 10 years and while this is not usually a big deal the problem comes in when you want to get your money out. Most funds charge an exit fee when you need to get your money out. Make sure you know exactly what's involved if you need to get your money out.
3. Fees and charges
Most inexperienced investors burn their fingers with fees and charges. Like any other professional, investors who take care of your investments will charge you a fee. These fees are usually built into the investment package and can be very high. I've seen funds that charge as much as 5% which is a lot. It's important that you know exactly what fees and charges are involved as you do not want to get any nasty surprises when you get your end-of-year statement.Are you looking for high interest saving accounts? See my blog to learn more about finding the best savings account interest rates ...
Article Source: http://www.articlealley.com/article_2111295_19.html
Author: John Burrow
Investing your hard eared money can be a mine field. Every day we read and hear about people who had their life savings wiped out by scrupulous investors. When Bernie Maddoff made the headlines the world was outraged by how much money he stole from uninformed investors. You don't want to be one of them and what you want to do is to tread carefully yet have enough trust in the right people to have your money work hard for you while its safe and secure.
If you want to invest then you will have to trust people. Its been said that investing is a team sport and you need to have experts do those things you don't do well. Like doctors, lawyers and accountants you should be able to trust an experienced investor with your money. Even with the help of a professional you need to be careful. Here are 3 great tips to help you get the most of your investing while staying safe and secure.
1. Know the risk and the reward
All investments you make are "dictated" by the relationship between risk and reward. High risk investments usually have high rewards. Low risk investments usually have a lower return and the amount of risk you are comfortable with should dictate your investment strategy. If you have a professional dealing with your investments then you need to make sure that you know exactly what the risks are.
2. Commitment
One of the problems with investing in mutual funds is that you need to commit yourself for a set period of time. The time frames usually vary from 1 to 10 years and while this is not usually a big deal the problem comes in when you want to get your money out. Most funds charge an exit fee when you need to get your money out. Make sure you know exactly what's involved if you need to get your money out.
3. Fees and charges
Most inexperienced investors burn their fingers with fees and charges. Like any other professional, investors who take care of your investments will charge you a fee. These fees are usually built into the investment package and can be very high. I've seen funds that charge as much as 5% which is a lot. It's important that you know exactly what fees and charges are involved as you do not want to get any nasty surprises when you get your end-of-year statement.Are you looking for high interest saving accounts? See my blog to learn more about finding the best savings account interest rates ...
Article Source: http://www.articlealley.com/article_2111295_19.html
Investing for Newcomers - What Everybody Ought to Know
Investing for Newcomers - What Everybody Ought to Know
Author: Elliott Fuentes
Numerous select to invest in the stock market to put together for an uncertain potential. Sad to say, all also frequently, individuals are beneath the mistaken impression that stocks are their only choice. A lot of other selections are offered from valuable metals to bonds and commodities. Achieving a balance in your portfolio is essential to becoming a effective investor. This is specifically genuine of those who want to offer for their spouse and children in the long term. Investigation any investment totally prior to paying for as you want to accomplish long term accomplishment rather than just a fast cash sport. Of program, if you are in for quick phrase gains, your tactic will will need to be diverse.
The stock industry is greatest for these who are wanting for equally quick phrase and lengthy expression gains. Be recommended that every person investing in the stock market place picks some losers even though, even those with a long time of encounter. The stock market place carries a lot of hazards and you have to establish how a lot you are prepared to take on. Again, this will differ from investor to investor so be certain you know what your objectives are just before you do something.
For a lot more details about "investing", you should go to: investing
If you are searching for a protected investment, pick genuine estate. While returns do take an prolonged time period of time and there will be highs and lows when it arrives to your investment, if you hold on to the home till the marketplace improves, you can see massive gains working with this investment technique. Around the past decade, a lot of chose to obtain residences in want of repair. The homes would be fixed up and offered at a revenue. Decide if you have the skill set to get on some of these repairs on your own. If you have to outsource all of the work, your revenue will be substantially lowered.
Foreign exchange buying and selling is a different choice. Right here you perform with foreign currencies so there is a special learning curve with this variety of investing. The very same is accurate of day trading and commodities. Prior to you do any investing, be confident you know what you are carrying out or request the assistance of a seasoned trader. This will let you to have the returns you are right after with less hazards. Money can be created with investing as extended as it is accomplished properly.
Investing for Novices - What Every person Should Know
Article Source: http://www.articlealley.com/article_2076913_3.html
About the Author: Author Bio
Author: Elliott Fuentes
Numerous select to invest in the stock market to put together for an uncertain potential. Sad to say, all also frequently, individuals are beneath the mistaken impression that stocks are their only choice. A lot of other selections are offered from valuable metals to bonds and commodities. Achieving a balance in your portfolio is essential to becoming a effective investor. This is specifically genuine of those who want to offer for their spouse and children in the long term. Investigation any investment totally prior to paying for as you want to accomplish long term accomplishment rather than just a fast cash sport. Of program, if you are in for quick phrase gains, your tactic will will need to be diverse.
The stock industry is greatest for these who are wanting for equally quick phrase and lengthy expression gains. Be recommended that every person investing in the stock market place picks some losers even though, even those with a long time of encounter. The stock market place carries a lot of hazards and you have to establish how a lot you are prepared to take on. Again, this will differ from investor to investor so be certain you know what your objectives are just before you do something.
For a lot more details about "investing", you should go to: investing
If you are searching for a protected investment, pick genuine estate. While returns do take an prolonged time period of time and there will be highs and lows when it arrives to your investment, if you hold on to the home till the marketplace improves, you can see massive gains working with this investment technique. Around the past decade, a lot of chose to obtain residences in want of repair. The homes would be fixed up and offered at a revenue. Decide if you have the skill set to get on some of these repairs on your own. If you have to outsource all of the work, your revenue will be substantially lowered.
Foreign exchange buying and selling is a different choice. Right here you perform with foreign currencies so there is a special learning curve with this variety of investing. The very same is accurate of day trading and commodities. Prior to you do any investing, be confident you know what you are carrying out or request the assistance of a seasoned trader. This will let you to have the returns you are right after with less hazards. Money can be created with investing as extended as it is accomplished properly.
Investing for Novices - What Every person Should Know
Article Source: http://www.articlealley.com/article_2076913_3.html
About the Author: Author Bio
Techniques For Investing in The Stock Market
Techniques For Investing in The Stock Market
Author: Christian Bayonne
Techniques for investing in the stock market come in a variety of flavors. Every investor has its own way of investing. When it comes to stock investing there are many techniques as there are many investments to choose from. To help you find and define your style, in this article we will cover the following basic investment styles:
• Value investing
• Growth investing
• Technical investing.
Value Investing
The objective of value investing is to find the bargains - cheap stocks that are overlooked by the market.Value investor look for companies that are financially strong ,with low stock prices compared to their intrinsic value (their growth and earnings).
Growth Investing
In contrast to value investing, growth investing favors stocks of companies whose earnings or revenues are growing faster than the industry or the overall market. The price-to-earnings(P/E) ratios is very important in the work of growth investor .Growth companies often have higher P/E ratios which means higher stock prices.
Technical Investing
Technical Investing is based on the use of technical analysis. Technicians study the charts of stock historical price and volume patterns as guide to future stock price direction. Such investment style is built on three principles:
-Stock prices and volume patterns are predictive of others
-Stock prices and volume activities have a tendency to follow trend.
-Prices reflect all the available market forces at any given time.
Technical investing, by comparison to value and growth styles, relies heavily on non-economic factors.
These basic techniques for investing in the stock market are not for everyone. An investing technique can work for one investor and fail for the other. However, just remember there are no perfect techniques and that all these investment styles are complementary to each other. They all give insights about an investment. From these basic techniques, you can define and design your own techniques for investing in the stock market.
Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for the last decade. He is also the co-owner of Best Stock To Buy in Canada, Europe, US.
Article Source: http://www.articlealley.com/article_1542845_63.html
About the Author: Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for the last decade. He is also the co-owner of Stock Picks Canada, Europe, US.
http://www.stockonrise.com
Author: Christian Bayonne
Techniques for investing in the stock market come in a variety of flavors. Every investor has its own way of investing. When it comes to stock investing there are many techniques as there are many investments to choose from. To help you find and define your style, in this article we will cover the following basic investment styles:
• Value investing
• Growth investing
• Technical investing.
Value Investing
The objective of value investing is to find the bargains - cheap stocks that are overlooked by the market.Value investor look for companies that are financially strong ,with low stock prices compared to their intrinsic value (their growth and earnings).
Growth Investing
In contrast to value investing, growth investing favors stocks of companies whose earnings or revenues are growing faster than the industry or the overall market. The price-to-earnings(P/E) ratios is very important in the work of growth investor .Growth companies often have higher P/E ratios which means higher stock prices.
Technical Investing
Technical Investing is based on the use of technical analysis. Technicians study the charts of stock historical price and volume patterns as guide to future stock price direction. Such investment style is built on three principles:
-Stock prices and volume patterns are predictive of others
-Stock prices and volume activities have a tendency to follow trend.
-Prices reflect all the available market forces at any given time.
Technical investing, by comparison to value and growth styles, relies heavily on non-economic factors.
These basic techniques for investing in the stock market are not for everyone. An investing technique can work for one investor and fail for the other. However, just remember there are no perfect techniques and that all these investment styles are complementary to each other. They all give insights about an investment. From these basic techniques, you can define and design your own techniques for investing in the stock market.
Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for the last decade. He is also the co-owner of Best Stock To Buy in Canada, Europe, US.
Article Source: http://www.articlealley.com/article_1542845_63.html
About the Author: Christian Bayonne is a do-it-yourself investor, who has been investing in stocks for the last decade. He is also the co-owner of Stock Picks Canada, Europe, US.
http://www.stockonrise.com
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