Investment Articles

For the first time stock investing was a losing proposition for a decade. The stock market lost ground from year-end 1999 through 2009. Stock investing for people owning equity funds was a disappointment to say the least. How should you invest in stocks in the future? Or… should you avoid them altogether?

The bottom line is that you need to invest in stocks if you want to get ahead financially. The real question is how to invest money in them without getting hurt in the process. And the truth of the matter is that few people know how to invest… period. Paint this picture in your mind: stocks (also called equities) have been the best investment since the great depression; and the stock market just had its worst 10-year period in modern times.

Unless you have the time, cash, and inclination to invest in real estate, equities are the best investment for every-day people. Bonds have returned about half as much and money in the bank about half as much again OVER THE LONG TERM. If stocks have rewarded investors with earnings of 10% a year, bonds returned maybe 6% and safe savings alternatives have paid closer to 3%.

To reduce your risk and still invest in stocks, just invest money in bonds and safe investments as well. Do not avoid equities, because safer investments do not have the proven ability to pay enough to offset taxes and inflation. If you earn 3% in interest in a year and inflation eats it up, you lose money after paying income taxes on your 3% interest earnings. Since stock investing is what will either make or break your financial plans for the future, let’s concentrate on this as our best investment for getting ahead over the next decade.

Make a resolution to keep ½ to ¼ of your investment assets in a variety of equity funds over the next decade with the rest in bonds and safer investments. For example, if you have a 401k at work you might spit your money equally three ways: equity funds, bond funds, and money market fund or stable account. That would make you a moderate conservative in terms of risk. Go with 50% in a variety of equity funds; and equal amount in the other two to be moderately aggressive.

Diversification is the first key to stock investing with less risk, and diversified equity funds give you this. The second key is to invest in stocks through a variety of equity funds. The stock market sets the pace for general diversified funds, but some funds invest money in specialized areas like real estate, oil and gold. Others invest money internationally. Include such funds in the equities portion of your portfolio.

The first 10 years of the new millennium is now history. Go forward and invest money on an even keel. If you decide to invest in stocks with ½ of your money in a variety of equity funds, add to your positions when you are now longer so invested; and take money off the table if you go over 50%. It’s as simple as moving money from fund to fund to stay on track.

Playing the stock market is not necessary to get ahead, and few every-day people who play win over the long term. Yes, you should invest in stocks; and the best investment vehicle for most of the people most of the time is equity funds.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

When you begin to look into investing in bonds you will quickly come across the term, bond ratings. In order to help investor determine what the most suitable bond to invest in is, there has been a series of ratings developed by a few reputable industry companies. These ratings are design to provide the investor with risk rating profile of the bonds on offer in the market place. One of the most common has been developed by Standard and Poor’s and this is referenced widely within the financial industry. The descriptions below are based on the Standards and Poor’s ratings.

The rating scale is based from levels A to D, and there are multiple ratings within each level. The highest rating is the triple A, these are deemed to be the safest and less risky investments. The other levels are double A and A, the double A is a very safe investment and the A is safe but could be impacted if economic conditions change, for the worse. The B level consists of triple B, double B and B. Triple B is the highest in this level and should provide adequate protection for your investment but that protection is less that the A level ratings. Double B and B bonds respectively are not as safe as the triple B rated bonds and slightly better than the C level bonds. The investment in double B and B bonds is a speculative investment and the risk that is known to be with speculative investment should be considered. The risks are that the ability for the organisation to repay the bond maybe affected by the organisations exposure to business and economic down turns in trading.

The C level bonds are far more speculative than the B level ones, therefore your risk exposure increases significantly. The D level is given when an organisation has already defaulted on payments to existing investors. This rating may also signify that there is an active bankruptcy petition, which needless to say is an extremely risky investment to consider undertaking. The use of plus (+) or minus (-) is applied to bond ratings from double A to triple C, to further define these rating levels. You interpret these as the plus being slightly higher, meaning less risk and the minus being slightly lower with more risk. There are times when bonds do not have a rating applied to them, this will be identified with a NR (no rating) to the actual bond.

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Today, treasury bonds do not have high yields and corporate bonds are risky. There is, however, a middle tier of fixed income investments. These securities have higher yields than treasuries, but aren’t as risky as corporate bonds.

These investments fall in four categories:

1. Ginnie Mae – This government agency creates securities out of mortgages originated by federal agencies – including the Federal Housing Administration and Department of Veteran Affairs. Like treasuries, these securities are fully backed by the U.S. government. However, Ginnie Mae securities have two disadvantages over treasuries: call risk (the principal may be paid off early) and no state tax exemption. Each of these slice about a quarter point from the expected return. As a result, you should only look at Ginnie Mae securities that yield at least half a point over comparable treasury bonds.

2. Fannie Mae and Freddie Mac – These quasi-federal agencies buy mortgages and package them into securities. They also can issue debt. These securities are “implicitly” backed by the U.S. government, which makes them slightly more risky than fully backed securities (like treasuries). However, it is very unlikely that the government would not bail them out.

3. FDIC Backed Bank Bonds – These are bonds that are issued by commercial banks and fully backed by the government’s Federal Deposit Insurance Corporation.

4. Debt Issued By The Federal Home Loan Bank or Tennessee Valley Authority – Like Fannie Mae and Freddie Mac Securities, these fixed income investments are implicitly (rather than fully) backed by the U.S. government. Like treasuries, they are exempt from state income tax, but they do have call risk.

These four types of securities can help you create a well-diversified and high-performing portfolio.

Over the years, Praveen Puri, a trading and financial veteran, developed a passion for simplicity, minimalism, and Eastern philosophy. He developed a pure Zen trading system. It uses no news reports, indicators, charts, or parameters to distract you from Now. They are nothing but crutches that keep you hobbling around, instead of surfing in flow with the market.

So you are interested to know more about bonds and bond Investing. Before you start to throw your money at the different bonds in the market, it is important that you have a good idea what a bond is.

When you buy a bond, you are actually lending money to the organization or company. You can think it as a form of an IOU. Most government agencies and companies raise their capital through bond issues. Bonds provide the assurance that you will be receiving regular payout from these agencies and companies without cay controlling interest in them.

All bonds are issued with a specific face amount known as the principal or par value. This is usually in the amounts of $1,000. Like any loans, bonds pay out interest. Most of the time, the interest rate is fixed and is usually given out two times in a year. For example a $1,000 bond at 5% interest would pay an investor $50 per year as interest. With 2 payments, the investor will receive $25 each time.

Bonds also come with a certain lifespan and that can be 10, 15 or 20 years. Upon reaching its maturity, bond holders will receive all their money back. So if you happen to invest $1000 in a 10 year bond that pays 5% interest, you are going to get a total of $500 over 10 years and your $1000 back at the end of the term.

If you are keen to buy bonds, you can either buy them direct from agencies and companies which sell them or through the brokerage houses and banks that issue them. Most of the time, agencies and companies do not default on their loans so you will be getting all your money back with interest. However, there are also riskier bonds known as junk bonds which offer higher interest rates.

Before you decide on which bonds to invest in, you should find out more about investment grade bonds at http://www.investmentgradebonds.net. Find out how to diversify your investment wisely so that you can maximize your investment income today.

When looking at the different types of investments to put your money in it’s important to understand the risks associated with each. Investment risk generally relates to the possibility of losing your money, either in the short term or the long term.

As an example the kind of factors to take into account regarding risk are:

The risk of falling short term values.
The risk of falling long term values.
The risk the provider going out of business.
The risk of making less than other asset types.
The risk of choosing the wrong investment account, plan or fund.

These provide an idea of just some of the considerations to take into account before making an investment, although the above is by no means an exhaustive list.

In managing risk successfully and choosing the right investments for you the most important element of investing to get right is to realise that the investments have to be personal to you.

The way to do that is to manage the two primary elements of risk. They are:

The risk of making investments that are inappropriate for your needs.
The risk of making investments that are inappropriate for your attitude towards risk.

Taking steps to avoid the first will ensure that you have a well structured portfolio. That is, having allocated some money towards a cash reserve, short term money and long term investments. This will mean you have some cash to fall back on in times of need, some money saved for short term expenditures and some surplus assets invested for the future. Having done this you can be safe in the knowledge that your ongoing financial needs are well catered for.

Taking steps to manage the second will enable you to put together a well balanced long term portfolio that is in keeping with your own personal attitudes. Having assessed what type of investor you are and whether you would prefer mainly lower risk or mainly higher risk assets you can then start to choose what individual investments would be suitable. At this point the list above that relates to the risks associated with individual investments comes into play.

A table of high risk and low risk investments can help you to clarify in your own mind where certain investments sit on a scale of risk.

Ultimately most people will be suited to a well balanced mix of low, medium, and high risk investments. However the extent to which you invest in these levels of risk will come down to personal taste, appetite for risk, and your own financial circumstances i.e. whether you can afford the risks.

Jaskarn Pawar, Director, Investor Profile Ltd

If you are a UK investor with an ISA, Personal Pension or Unit Trust investments then Investor Profile’s free online investment monitoring service could help make your life easier.

In the tradable fixed interest market there are a number of different types of securities, from senior bonds with a fixed coupon (interest rate) and maturity date, through to perpetual preference shares with resettable coupons and no maturity date. Some of the key points to note about the various types of tradable fixed income securities available are:

Senior Bonds – These bonds can be either secured or unsecured. They rank ahead of subordinated debt holders and shareholders. Senior debt for large corporations is typically given a credit rating by a global credit rating agency. Typically these bonds have a fixed maturity date and fixed coupon. On maturity the principal is redeemed to the holder in cash. High quality corporate bonds are easily traded in the secondary market without undue premiums added for risk or liquidity.

Subordinated Bond – These bonds rank below senior debt and all other debt but before shareholders and unsecured creditors for repayment in the event of liquidation. There are also a large number of Subordinated Callable Bonds on issue by banks in the New Zealand market. These have tended to be 10 year bonds callable after five years meaning that the initial coupon is fixed for the first five years and if the bonds are not called (ie redeemed for cash) at the end of the first five years then the coupon will be reset at either a new fixed or floating rate for a further five years and then they are repaid in full.

Capital Note – Fixed rate unsecured notes are subordinated to all other debt obligations of the issuer. Rather than a maturity date, capital notes have an “election date” at which time the note holder may elect to invest for a further period on new terms and conditions or convert the notes into ordinary shares of the issuer. In any event the issuer retains the right to pay note holders in cash on the election date.

Capital Bond – Subordinated to all other debt obligations of the issuer. Typically these have a maturity date but may be exchanged, repaid or resold earlier in certain circumstances. They also tend to have a reset date at which time certain terms can be adjusted. On set election dates, holders can elect to retain the bonds at the new terms or request the company sell their bonds at the issue price on the election date, using a resale facility established by the company for that purpose. If the company is unable to sell the bonds the holder can elect to have the bonds converted to shares.

Perpetual Bond and Perpetual Preference Shares – As a perpetual issue the securities do not have a maturity date which means the only exit option for a holder is to sell on market. The primary difference between perpetual bonds and perpetual preference shares is that the bonds pay interest and the shares pay a dividend, which is usually fully imputed. Perpetual issues are typically unsecured and subordinated ranking behind all other creditors. The coupon paid by the security is reset periodically at a margin over the prevailing swap rate with the issuer also having the ability to call (redeem) the security.

Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand’s largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates.

http://www.craigsip.com/

Earnings have become a much talked about issue. Another rubber toy that some use to disturb others. Everyone who starts on the net knows within a month that 98% of the affiliates fail to earn. Many mails with a subject line reading 98% fail are you one of them, do the rounds. Only one who is spending on the net at present will bother.

I have seen so many have still not seen a penny even though they have spent on their hosting account for more than six months. Consider yourself lucky if you got in and out the sparkling blue bells of the web within 3 months. The net is not a place that interviews one for a job. It is free for all who are willing to pay. But in the present economic scene how many can stick it out is the question. This free for all is just half the story the rest is not as cheap as it is made out to be.

Business with another means transactions that are not detrimental to anyone inside or outside the business while being mutually beneficial to the business parties. It does not ever mean that one party takes the funds of the other party while teaching how to do the same to the rest.

In the present tight financial situation can we fully trust another to work our advertising for us? I would suggest that one should not get carried away with people who say they earned millions without doing any preliminary work. Take your time over it. No need for a web site to learn as you already have bought the basics to learn like a computer. Everyone goes to school and college spending thousands to learn. Well the computer investment is the school. Getting a job with what we learn is the earning part. The net is just like any other job hunt. This important lesson is not taught on the net.

The reason 98% fail is because they do not know when to say goodbye to the business they have started. The worst thing a human can do is getting attached to business. Do not treat your business like you treat your child. If you are uncomfortable with it do not give it more than two chances. Do not think that it will magically change if you keep feeding it. Chances are most likely you will change.

In the past years I had a good industrial spare part business running not because of the orders but because of the free goodwill. I write articles as a dedication to this free goodwill that was given to me.

Success is not in the amount of money in your account but in you yourself. The human is what is most important without whom there can be neither money nor success. Gandhi was a successful man but went around in farmers clothes. He said goodbye to his business when the time came to do so. There are so many such instances. It is what we choose as success. I feel the free goodwill I have earned is heaven sent. God really gives more than any man can. I give back into society what it has given to me freely. I wonder how many humans would do that, maybe not many, which is why the human race is now a thankless lot, intolerant towards women by suppressing them.

Bhuvaneswari Calambakkam

With the economy in rough shape, investors are desperately seeking all kinds of new financial possibilities. One area for investment that has actually been available for many years, but is once again rising into the public eye is trust deed investment. This offers the potential for double digit returns, but only if the investor heads to the best and most reliable sources. Finding trust deeds for sale is relatively simple; the investor simply seeks a TDIC, which is a trust deed investment company, but they must really scrutinize the company’s offerings.

Like all other financial businesses, one TDIC may have a far more successful history than another, and it is the work of the investor to determine which group is offering the best chances for profitability.

It helps to first understand how purchasing trust deeds for sale can yield good returns. A trust deed is not a mortgage-backed vehicle, nor is it any sort of publicly traded item. Instead it is a way to participate in making a real estate loan available to a group or company in need of financing.

For example, the TDIC that you are considering might have an investment opportunity in the construction of an enormous shopping center. The money you invest would be used for the building project and would provide you with a “fractional note” or partial ownership of the actual deed on the property. In exchange for your financial risk, the borrower would pay a significantly higher rate of interest on the loan – usually in the area of twelve percent.

Clearly, not all TD’s for sale are going to be for enormous construction projects, and an investor should demand complete transparency on the entire transaction. The TDIC should be able to provide investors with such details as the LTV (loan to value ratio) on the transaction, the anticipated monthly return, an accurate appraisal on the building or property, and any issues that may present some sort of encumbrance such as legal problems or necessary upgrades, etc.

This transparency makes trust deeds for sale a far more predictable form of investment than the wildly fluctuating markets. Not only do they offer such low-risk opportunities, but they come with decided tax advantages too. Most investors can look at their TD income as a tax free source until the time of withdrawal, which makes them a great option for those with self-directed IRAs.

Finally, when seeking trust deeds for sale it is interesting to note that a vast majority of private money lenders, which is another way of looking at those investing in trust deeds, will end up working with a group or business within fifty miles of their home area. This means that the trust deeds you purchase are likely to fund projects or properties within your neighborhood or city. This is a good thing because most TDICs spend tons of time evaluating the asset that they will recommend to investors; even more than any traditional bank. This also means investors can physically “see” and visit the projects in which their funds are being used.

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You may be thinking about investing your money into bonds. These are viewed as being less risky than the share market, as companies or governments guarantee them. Government bonds are seen to be the most secure of all bonds, as it is more likely that a corporation could go bankrupt before the government. When you take out a bond, you are actually loaning money to that organization or government entity and they will pay back to you your initial investment plus the additional money you earn for lending them your money. Make sure that you consider what is the best investment for you situation.

Treasury bonds are possibly the most common bonds you have heard about. These are in the news a lot as the Uncle Sam is raising money to bail out the economy from the recent financial crisis. These are long term so you need to be prepared to invest your money, most likely for more than 10 years. This type of investment is viewed as one of the safest that you can make. These bonds are sometimes called T-Bonds. Similar to treasury bonds are agency bonds. Agency bonds are issued by U.S. Government agencies. These bonds are not viewed as being as safe as treasury bonds are. Although these are backed by the U.S. Government they are not guaranteed by the U.S. Government, unlike the treasury ones which are guaranteed. Another type of these are municipal bonds. These bonds are issued by state, local or city governments to raise funds to provide services to the community. These services include roads, schools, community centers and many more. The good thing about these bonds is that are generally exempt from taxes on the interest they earn and your investment is providing worthwhile services to the community. These investments are secure, possible to the same extend that the agency ones are.

Corporate bonds are issued by private companies to raise cash. These bonds are not as safe as the government ones, so they will normally offer higher returns to make them more attractive to invest in. The zero-coupon bonds offer no interest (or coupons). You may think well why would you invest in these? The reason is that these are sold at a significant discount to what they are valued at. This means when they mature you get the value price when you sell them not what you paid for them, which can mean a huge profit to you. The final type is very well known, it is the junk bond. This is known for giving higher returns or losing all you money, hence the name junk. This type is only those who are willing to take the high risk of losing everything, with the chance to get high returns instead.

Tom has been writing for many years now. Not only does this author specialize in financial matters, you can also check out his latest web site at http://braunpowermax.com/ which reviews and lists the best Braun PowerMax MX2050 blenders for your kitchen.

The first thing to draw your attention at TradeKing is the clear and very usable layout of the website, and along with this the commission pricing, which as quoted by them ‘Not a pricing structure, just a price’ – For all equity and option trades there is a commission of $4.95, plus a contract fee of $0.65 on each option trade, mutual funds have a low fee of 3%, and mutual funds with load incur no fee, and the unloaded fee is $14.95 for buy and sell.

The customer service aspect of the site is very easily found, and they offer an F&Q section, live chat and phone service between the hours of 8am and 6 pm EST time, and also an email service which they strive to respond to within 24 hours.

A wealth of information can be found under the quotes and research tab, as well as trading tools including calculators, scanners and screeners Other services offered on the site include a learning center, forums, blogs – including the CEO´s and Options guy´s content, along with charts and reports, making this a great place for the beginner through to the expert.

The site offers some great security features including firewalls and SSL security, and the username/password combination which becomes blocked upon a set number of failed login attempts. You also have the option to set an automated log off for idle use, which can be set from 15 through to 180 minutes.

I can tell you the three things that TradeKing has going for it, based on the conversations that I have had with some of their clients:

1. Competitive commission structure.

2. Strong customer service.

3. Abundance of useful tools that are available (for free) to TradeKing customers.

TradeKing seems to be a good bet if you are thinking about opening a new online brokerage account.

TradeKing Pros:

Flat Rate Pricing at $4.95 per trade
Helpful customer service
Simple to use Trading Platform
Plenty of great tools

TradeKing Cons:

Lack of full service broker options
No forex or commodities trading priviledges
Slower than average website speed due to high traffic

Overall, TradeKing is a great low priced discount brokerage firm for investors who want to keep costs low while gaining access to all the professional Wall Street investing tools.

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