Investment Articles

To become rich, you need to first have some form of savings which you can invest in order to get better returns or earnings. This article tells you how you can make your savings work best for you.

Have you ever thought how much money you would be making five years from now or still better, how much savings you would have in hand? Do you want to change your lives for the better or continue to lead the same for a lifetime? If you want to lead a better lifestyle and become rich, you have got to act now.

Well, job security is important and is definitely needed. But after a while, one needs to start taking planned risks and make use of potential opportunities that come their way. If you want to become rich, invest in the right venues. For this you need to first have some savings. Only by saving money can you make investments. The stock market is a good place to invest your funds and earn good return. This requires you to study the market situation and learn the art of trading. It is a wrong notion that only investments made in large companies give you high returns and vice versa. Emerging industries are a better choice because as they grow, you can make more money.

Real estate is another avenue which can help you become rich. If you start with little money, you can curtail your risks. For starters, apartment buildings would be a safer bet to invest. With the number of people seeking homes every day, the inflow will be more consistent when you invest in apartment buildings. Even minor deals will fetch you good cash flow. As buildings appreciate over a period of time, the longer you hold the property, the greater will be the return when you sell it. Over time, the rentals also increase and your equity also develops.

Off late, gold has become a very profitable investment option. The price of gold has only gone up over the years, so much so that it has almost tripled in the last 10 years. Since gold never loses its value nor has the gold market ever crashed, it is a very good investment to become rich. There will always remain good demand for gold. Hence, higher the demand, higher the prices will be. Unlike stocks and bonds, which fluctuate in uncertain market conditions, the price of gold is not influenced by such factors.

Looking at the present state of economy, it is only wise to invest in such avenues that will withstand the test of time and help you become rich successfully.

If you want to become rich, there is no better time than now. The longer you delay, the larger will be the number of hopefuls standing in line ahead of you to try their luck at earning some of the riches the riches that the US has in abundance.

“If you’re serious about Become Rich, creating wealth and achieving financial freedom then why not sign up NOW for more insider secrets on Become Rich at www.MillionaireMindsetSecrets.com Make sure to download for FREE the 7 Secrets of Wealth Creation e-Guide.”

Investments are always a smart choice when you planning to earn big in order to become rich. If you do your homework before investing and do not rush into quick money making schemes then you can easily earn big and get rich in the end.

In recent times of economic downfall getting financial stability has become a matter of concern for many people out there. All of us have still harbor the dream of becoming rich. But, we often keep on wondering what the ideal way to become rich is. You will find many lucrative and easy ways to get rich fast. But often theses ways may backfire and you may end up losing more than you gained. So it’s always better to think of smart and secure ways of getting rich or get financial stability in your life. One such stable, yet secure, mean is investments. With smart investments you can easily become rich and also secure your wealth at the same time.

You may wonder how it is possible to make smart investments and become rich at the same time. Well, there are a few significant steps to do so. Here’s a short guide of what you really need to do.
• Investment is a vast concept. So before you really get into investments you better make yourself well equipped with all the required knowledge on all kinds of financial investments which can earn you some great returns.
• Be wise and do not rush in and invest all that you earn in one place. Invest only the amount you can afford to so can you can maintain a healthy lifestyle at the same time also.
• Don’t invest in something that promises to make you rich overnight. Usually these promises result in scams or frauds. So don’t play with your money and invest in something which offers a return that is too good and true.
• Before you invest get all the information related to that particular field of investment. You can easily consult any financial ad-visor or go online to search for information related to that particular investment plan. For example in you are into stocks you better take up a mini course over stocks which are easily available over the internet. But do not let anyone talk you into making an investment you are not willing to do or can’t afford. Always think logically and make wise choices for you which will suit your needs the best and also pay you great in return.
• Always read the information provided on the agreements of the investments you are looking to make for any hidden costs. Don’t go for something which says “free” as it may cost you a lot later.
• However, you may ask where to invest smartly to become rich in a short span of time? Mutual fund is always a good and wise choice in terms of smart investments. But always make sure you understand all the pros and cons and all the facts related to mutual funds and how it works. But do not buy them when they are going for a capital gain distribution and understand the expense ratio well before you invest in any such funds.

No matter where you invest, always think wise and do your research before taking the next step with your investments as this is your hard earned money and you don’t want it to go in vain in your quest to become rich fast.

“If you’re serious about Become Rich, creating wealth and achieving financial freedom then why not sign up NOW for more insider secrets on Become Rich at www.MillionaireMindsetSecrets.com Make sure to download for FREE the 7 Secrets of Wealth Creation e-Guide.”

Most traders know the value of implementing trading systems but not all of them recognize the importance of back testing. If you’ve only just begun dabbling in market investments, this is one of the many considerations that you should focus on right away. You just can’t make considerable profits without it.

For beginners, the term doesn’t immediately give itself away. Even so, it is not a very complicated term to understand. What it involves is taking a trade system or plan into a process that will run it through a set of historical market data. This will let you see how a certain system will fare against a set of past market information.

The most obvious advantage of getting into comprehensive back tests is obvious. Clearly the procedure gives traders a chance to determine if their current approach is likely to be successful or not. In other words, they get an insight on whether the plans they are thinking of adopting have the potential to be profitable. Even if you are only dealing with historical details, you will still be able to arrive at the answer to the question of profitability simply because what has happened in the past can replicate itself in a similar fashion in the future.

There’s more than just a single shot at profitability at stake here. A truly scientific test can also help determine if a system can consistently perform well in future trades. Moreover, it can also help supply the necessary information that you would need to improve or complete your plan. A test for example can help you decide on how and where to allocate your resources.

The technical benefits of back testing are clear. Bear in mind though that there are also intangible benefits that you can gain from it. The most important advantage of the process is that it solidifies a trader’s confidence in his system. Being confident is crucial because without this feeling, you will forever be tempted to abandon or arbitrarily and constantly modify your plan even if it might potentially yield some profitable and sustainable results. In effect, you will be trading as if you had no clear plan at all.

In short, a systematic and comprehensive test has a lasting impact on trading psychology. Once you’ve finished pushing your plan through a series of back tests, you will cease to be afraid of your decisions. Because you know that your plan works, you never have to hold on too long or let go too early of your trade positions.

You can test your chosen system using the software included in your charting package. In some cases though, these testers just aren’t good enough. A typically ineffective tool takes a system through securities individually. This doesn’t just render slow results. It also leads to inaccurate conclusions simply because securities aren’t treated as part of a portfolio. An ideal procedure should be able to take into account the interrelatedness of a portfolio of securities.

You can’t go wrong with back testing. This is the one key that can most likely lead to profitable results. Don’t just settle for any test facility though. Go for one that has been proven to be effective and reliable.

Want To Learn More About The Benefits Of Back Testing?
Find Out All You Need To Know At http://www.meta-formula.com.

Have you had the smallholding dream? I can tell you that you are not the only one.

Many “hobby farmers” or “lifestylers”, – City workers and canny investors, are using their capital to chase the dream of agriculture and buying farmland, and non-farming buyers make up a much larger proportion of sales than ever before.

This has contributed to the recent escalation in the rise of farmland prices, as agricultural land continues to beat both commercial property and the residential market.

During the past six months arable land has rocketed in value by 8%, and by 13% year to date (July 2010) according the Knight Frank Farmland Index, with most experts believing prices will continue to rise for at least seven years.

The price of agricultural land rose by 19.7% for the twelve months to July, and continued interest from institutional funds looking to invest in agriculture by purchasing vast tracts of farmland and leasing it to commercial farmers is adding to the upward pressure.

Many savvy investors are now looking to swap faltering residential and commercial buy to let investments, and invest in a piece of good quality agricultural land instead. Some have been frightened off from the stock market due to the ongoing volatility and lack of visibility in the market and are now also investing in agriculture for a more stable income and positive growth.

These high-net-worth investors pursuing the farmland dream are not alone in their hunt to acquire and invest in farmland. Values are also feeling upward pressure as food prices increase at a time when there is a sharp decrease in the amount of agricultural land for sale.

Commodity prices for wheat and other cereals are at a 40 year low but peaked in 2008. According to leading finance broker Savills Private Finance, the actual acreage being advertised publicly has fallen from around 600,000 acres in the 1960s down to around 125,000 acres today.

There is still a lack of supply, although we source our assets from land owning farmers that want to become tenant farmers because mortgage payments are too high, so we get access to farmland that is not on the open market.

There are of course other options for investors looking to profit from the boom.

There are a number of agricultural investment funds to consider for those wishing to invest in farmland and still qualify for inheritance tax (IHT) relief.

Generally speaking, minimum investment levels are £20,000 with various modes of investment and offer the option to invest through a self-invested personal pension or offshore bond as well as with liquid capital.

As with any AIM stock, only investors choosing to hold the property for two years or more will qualify for the IHT relief.

In Europe, arable land is already worth twice that of land in Britain in places like Denmark and Ireland. Investors from these countries are now looking to the UK to cash in on the boom.

When compared to our closest agricultural rivals such as Ireland, UK arable land is still very cheap and has the margin to expand in value by 100%, I think personally that we are in for a period of prolonged growth, imagine if agricultural land values doubled by 2020, we would then be able to say that they are only priced as Irish farmland was ten years ago.

How is farmland treated by the Tax Man?

Land that is actively farmed could qualify for 100% relief from death duty, which means that there would be no IHT liability.

If the land is being farmed by the owner, you would qualify for 100% relief on the land after 24 months. Equally, the same rule applies if you have a tenant farmer do the work, as long as you have a profit share arrangement. If you lease the land to a commercial farmer, then you would qualify after seven years.

David Garner is Manageing Partner at DGC Business Consulting Ltd, a boutique investment consultancy specialising in agriculture investment and property investment.

David Garner is available for comment or discussion on david@dgc-ai.com or 020 7043 2592 or visit the DGC website to download the Agriculture Investment Guide at the DGC website.

Sometimes I hate being right. I am often asked for a forecast of bank cd rates and last week I made a doozy. Unfortunately, it seems to be coming true.

I predicted that 1-year CD rates would be heading towards 0.50% and 5-year CDs down to 1.50%. When you remove the top players, we are quickly approaching those numbers. Which also means that the top players are likely to begin going down. (And we saw some of that this week)

Institutional jumbo CD investors are especially hard hit. The top player such as Alliant Federal Credit Union still had a 1.75% APY for 1-year, however it dropped to 1.60% this week. Sadly it is still one of the top 1-year rates. Unfortunately it isn’t available for institutional CD buyers. And once you have $250,000 of personal funds with them you have to move on down the list. The average for the top 10 and top 20 certificate of deposit rates is quickly decreasing.

As with any investment vehicle, those who try to time the market generally don’t fare so well. That is why I believe long-term CDs with low penalties are a good option. You get some better yield now and have a fixed cost to close if rates go up anytime soon. Of course, rates rising anytime soon doesn’t seem likely.

Here is an example of a 5-year CD with a 90-Day penalty and how it performs when compared to straight term CDs. The rate is a 3.00% APY and if you invest $100,000 you will earn $3000 every year for the next five years. The penalty to close is a fixed cost of $739.73. If you decided to close your CD after one year, your net earnings would be $2,260.27 and that would the same as investing in a 1-year CD at 2.26%. I haven’t seen too many of those lately. After 2-years it would be the same as a 2.63%. So you can outperform the current CD market by adding some long-term CDs with penalties that aren’t too high.

If you need help with your Jumbo CDs, give us a shout or check out Compare CD Rates

Chris Duncan is a FINRA Registered Representative. He works for Jumbo CD Investments, Inc., a leading CD research and placement firm. He specializes in helping clients find the highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Visit us at Best CD Rates

We are constantly seeking the right time to invest our money. This is, so that we get to maximise our returns in the future. When you read the papers or tabloids, there will be countless ads calling you to invest. If property investment is the thing, you jump. If the stock market is doing well, you jump.

However, the timing is all that matters. You may have read countless books on Warren Buffett on how he chooses to hold a certain investment for long periods of time. Preferably forever. The difference between him and you can never be more distinct. Questions you should ask yourself would be:

1. Do I have the holding power, ( e g: cash)should might investment turn negative.
2. Have I chosen the right company, industry or country?
3. When do I exit or rebalance my portfolio to take advantage of other opportunities?

If you have invested in property in 1997, it would have taken you at least 13 years just to break even, which is now. You would have bought it at a high price. In investment terms, you’re buying the high.

Similarly, if you have bought stock and shares at the height of the economic boom in 2007, chances are, you might be in a loss right now figuring out the best time to get out.

Do you wish you could know a better way on when to invest in anything?

A simple rule adopted by Warren Buffett (the world’s richest Investor) is,

” be greedy when others are fearful and be fearful when others are greedy “.

As long as you do not follow the herd, the chances of exposing yourself to risk is greatly reduced. You sell properties at the high. You buy when property prices are low. It is common sense. Unfortunately, it’s not so common anymore. Now, people are rushing to bid for the best property sites. There’s nothing wrong with that if you are in it for the long term. However, taking your time and having a relook at your investment objectives is a sure-fire way to lead you to investing success.

What professional investors do to the stock market is different from the rest. They buy the low. That means they buy when others are in sheer panic. They buy when the economy is gloomy. They buy when everything is at a bargain. A rule of thumb is to look at the P/E ratio of stocks and indices. A P/E ratio is a n abbreviation of price-to-earnings ratio. When you look at a particular stock listing, look out for this number. Anything that is well below 15 is worth buying. That does not mean that you take into account only that and it will start giving you a fortune. What I am saying here is that it gives you a gauge on how undervalued the company or index is. As at January to March 2009,the P/E ratios of most companies were around 6-8.That’s greatly undervalued!

Stock indices like the Dow Jones Industrial index, S&P 500, Nasdaq, STI and many others were well below 15.

If you were to put your money during this times, you would have made at least a 40% gain on your investments in less than a year. For your information, at the height of the economic boom in 2007,most companies were having P/E ratios of around 60!

Definitely not a good time to buy but a good time to sell. Whatever goes up, will eventually come down. Therefore when the market goes down, we want to know when it is really an opportunity to invest. If you wait for a good time for the opportunity to present itself, your returns will be spectacular rather than modest.

So now, you know the very basic thing to look out for before you invest. As my teacher once told me, “never buy the high, never sell the low”.

The P/E ratios on average at the point of writing is about 20.Then again, it still is an opportunity depending on where you’re investing in. If you remember the pointers, you will know what needs to happen before you can pounce on the opportunity.

Recession.

For more articles you can visit my blog at http://www.syafiqshaidi.wordpress.com

Treasury Inflation Protected Securities (known as TIPS), are inflation indexed bonds issued by the US Government. But what do they really offer you as an investor and how exactly do they work???

First of all, there’s a lot of investor angst regarding future inflationary expectations. After all – it’s a normal concern with the government deficit exploding to unfathomable proportions on a minute by minute basis (not to mention interest rates overall are at historically low levels, and when rates revert to the statistical mean inflation is a likely counterpart to that occurrence).

TIPS can be purchased direct from the US government through the treasury, a bank, broker or dealer – or most preferably through a low cost index fund such as DFA Inflation Protected Securities (DIPSX). Individual TIPS are purchased according to an auction process, where you can either accept whatever yield is determined at the auction or set a minimum yield you’re willing to accept. In the auction method, if your requested yield target isn’t met – your purchase request will not be executed.

TIPS come in 5, 10, and 30 year maturities and are bought in increments of $100. The return of principal AND ongoing interest payments depend on the TIPS principal value adjustment for the consumer price index (the CPI which is the most commonly used measure of inflation). The coupon payment however, is a constant and stays the same for the life of the security. This is where TIPS get a little tricky – while the coupon payment remains the same, the TIP itself fluctuates meaning the actual yield you receive will vary.

With the underlying TIPS unit value fluctuating based on the CPI, each coupon payment interest rate fluctuates (fixed dollar payment divided by a fluctuating par value equals a floating interest rate). So while the principal value fluctuates, the interest rate is fixed. This is how the holder is protected from inflationary pressures. If inflation increases, the underlying TIPS par value increases along with it.

As with the majority of US Government debt obligations, TIPS pay their coupon semi-annually. The index for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS).

In what situations would TIPS be a viable option for your investment portfolio? Take for example an expectation of inflationary pressures over the next five years. If you were to invest in a portfolio of TIPS, as inflation occurs the principal value of the TIPS rises to compensate you for the inflationary pressure. Your coupon payment remains the same, but your TIPS principal investment is worth more.

Now let’s look at the opposite of inflation – deflationary pressures. Should deflation occur, your principal value would drop. TIPS do have a backstop for deflation however. The TIPS maturity value payment is the greater of $100 per TIPS unit, or the adjusted current value at that time.

Treasury auctions vary by security type and date, and it’s challenging to find relevant samples for different types of issue. However here’s some real life examples of TIPS and regular 5 year treasury notes for comparison.

In a recent TIPS auction on April 26th, 2010, 5 year TIPS were priced at 99.767648 (or $99.77 per $100 par value TIPS security) with a rate of.50%. On the same day, the 5 year treasury note yield was sitting right at 2.6%. In this case, the regular 5 year treasury note is yielding roughly 5 times as much as the 5 year TIPS. Seems like a lot to give up for some inflation protection doesn’t it? The wide disparity in yield is primarily due to investor expectations of inflationary pressure (investors are willing to accept a lower interest rate for the inflation protection).

There is an upside however. Let’s look at a similar 5 year TIPS security issued last year on 4/15/2009. It was issued at $100.11 for each $100 TIPS and a rate of 1.25%. At the same time the normal 5 year treasury note yield was at 1.71% – not nearly the spread of the first noted TIPS example. That same treasury note issue today (June 5th, 2010) is indexed at 1.02858 or each TIPS is worth $102.86.

A 5 year treasury note issued on April 30, 2009 (as close as possible to the last TIPS example) priced at 99.691687 ($996.91 per $1,000 maturity par value) and yielded 1.875%. Today through TD Ameritrade where I custody client assets, that same 5 year note is priced at 101.188 ($1,011.88 per $1,000 maturity par value).

The roughly one year old 5 year treasury note has earned a return of the coupon payment (two payments at $9.375 each plus some accrued interest which we’re discounting for this example), plus an increase in principal of $14.97 which equates to a 3.37% return. For comparison, the closest issued TIPS issue from April 15, 2009 has garnered a return of two coupon payments (I’m using 10 TIPS to bring this example to parity with the $1,000 par value treasury note) of $6.25, and experienced an increase in value of $27.48 for a comparative return of 3.99%. In this example the TIPS outperforms the treasury note by a reasonable margin.

Granted, these examples aren’t perfect, but they’re close for illustrative purposes on TIPS calculations and values compared to treasury note calculations and values.

There are downsides to TIPS however – one being taxes. Should the principal value rise with inflation in a given year you’re taxed on the growth (which is NOT distributed, it’s only on paper) as if it were income. This creates somewhat of a phantom income tax – you don’t actually receive the money, but you’re taxed as if you did! The upside of this is you establish a new basis in the security and won’t be taxed on it again, and in fact if deflation occurs may have a loss to put on your tax return. Of course, don’t take my word for it – please consult your tax advisor.

In addition to the tax issue, there’s also political risk associated with the US Government (the rules can change – after all the rules change all the time!) in addition to the fact that the government calculates the CPI (who’s to say they’ve got their calculations right, and are they manipulated for other political or economic reasons?).

While TIPS are great for some investors, they’re not right for everyone, and certainly not right for an entire (or even a majority of) portfolio. However, should inflation pick up from these historically low levels over the next five years, the TIPS should comparatively do just fine compared to the regular 5 year treasury notes.

With all of the TIPS calculations noted above, still one of the best ways to hedge inflation is with a diversified portfolio of passive investment assets such as Dimensional Fund Advisors (DFA Funds), and other exchange traded funds (ETF’s). At Red Rock Wealth Management, our portfolios provide a substantial amount of NON-dollar denominated assets (a great way to hedge against a weak dollar). Client portfolios consist of over 13,000 equity (stock) securities across 41 countries. In addition, many US based companies hold non-dollar assets as well, and the Red Rock Wealth Management portfolio philosophy also holds other tangible assets the government can’t “print” – such as gold, oil, and timber.

The point is, through proper investment management your risk associated with inflation can be mitigated substantially through Treasury Inflation Protected Securities AND broad diversification.

Consider adding TIPS to your portfolio for a component of inflation protection, just make sure you fully understand all of the positive AND negative aspects of TIPS!

Greg Phelps is an Financial Advisor & Retirement Planner, and a Fee-Only CERTIFIED FINANCIAL PLANNER (TM) in Las Vegas and Henderson, Nevada. With over 15 years of financial industry experience, Greg is an accomplished financial advisor, author, and speaker. Through his financial consultant positions with two of the largest investment banking firms on Wall Street – Morgan Stanley and Goldman Sachs, as well as serving as the Regional Manager of Wealth Management and National Manager of Fiduciary Advisory Services at the 5th largest accounting firm in the country – RSM McGladrey, he’s consistently and ambitiously improved his skill and knowledge in the financial planning field. In addition to creating a Free Mortgage Rate Quotes utility for use by financial advisors with their clients, he strives to deliver exceptional financial planning advice and guidance in all areas relevant to his clients, with a specialty focus in retirement financial planning.

By now, it should be abundantly clear to most everyone on the planet that the U.S. won’t exactly be leapfrogging out of this recession. In fact, the big concern now is that we’ll be “double-dipping” sometime soon and revisiting the ugly depths of this extremely stubborn downturn.

Ignoring, for the moment, that to double-dip you actually have to rise between dips – something our economy has not conclusively demonstrated – this business of returning to the bottom of the recession is something that, frighteningly enough, may have already taken place. Consider these dismal signs:

• A half-million new claims for unemployment benefits were filed in mid-August – that’s an increase of 12,000 from the previous week and the highest figure in over nine months (of supposed recovery). It was the fourth increase in jobless claims in the previous five weeks. So far, since 2007, the economy has lost 8.4 million jobs – hopefully, yours wasn’t among them. The recession keeps forcing employers to make miserable choices.

• Manufacturing in the beleaguered mid-Atlantic states, for just one sampling of the nation, has contracted unexpectedly for the first time since July 2009.

• The dollar has dropped against the Japanese yen to its lowest point in 15 years – so much for the alleged revival of our greenback.

• We’re still muddling through a bewildering season of declining home prices.

• Japan’s GDP growth has (virtually) halted in the second quarter of the year. Imagine a busy, creative country like Japan experiencing zero growth?

Sadly, we could go on. But you get the picture. No need to clobber you with more bad news, as abundant as that is. What we could really use right now are some useful tips in dealing with the recession. That’s whether the economy is actually guilty of double-dipping or not.

Here, then, are five such tips:

1/ Sell What They’re Buying. How solid is your work? Your business? Are you selling something that’s entirely dependent on people having discretionary income…that same discretionary income that’s now a fond memory? Or do you work selling stuff people actually need whether the economy stinks or not? Like medical help? Or groceries? It might make sense to take a good, long look at what you do for a living.

2/ Brace Your Portfolio with Gold. Let’s face it, most investors (somehow) remain gold-resistant. That is, they believe investing begins and ends with some form of paper or digits – like stocks, mutual funds, bonds and so forth. Unfortunately paper has laid a big, fat egg over the past decade while gold has absolutely blossomed. You can make a compelling case that gold is THE historical diversification for paper and hard times. The question is, are you safely diversified for what lies ahead?

3/ Adopt a Budget, If You Haven’t Already. Sometimes the most seemingly disciplined professional can have the least discipline when it comes to what he or she does in private. Particularly when it comes to budgeting home finances. It may seem like a desperate move, but budgeting can often save an astonishing amount of money. When we have to, we can live surprisingly simple lives.

4/ Stay Liquid Enough to Pick Up Bargains. This may seem to contradict the previous two tips, but think about it: When are you going to get another crack at the outrageous real estate, auto and retail sale prices going on today? Things may ultimately prove more valuable than paper money these days. Some of these discounts are simply unreal as companies unload their inventories at break-even prices (and even way below that) just to survive. This is once-in-a-lifetime stuff. Just be shrewd about it, don’t go overboard, and allow for just such a “discount-buy” category in your newly created budget.

5/ Don’t Assume The Stock Market MUST Return to Profitable Territory. Nothing says it has to. There’s no “stocks-can’t-stay-down-for-long” rule. Let’s see…the Dow was 10,788 back in May of 1999…and just 10,411 at this writing (in August of 2010). That’s a drop of 3.5% in 11 years. Needless to say, that’s not how you make money. Consider this: Just before the Great Depression, the Dow set a new high. So when did it revisit that high after the Depression? 25 years later, in November of 1954! “Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even,” observed analyst R. Salsman. Mr. Salsman was voicing what most Wall Street “gurus” will never tell you. What’s worse for Wall Street, starting now and over the next decade, baby boomers will be retiring and cashing in their stocks in droves. Who will replace them? No one, that’s who. Another giant baby boomer generation isn’t following on the heels of this one. So stocks and mutual funds are not – and will not be – the investment end-of-the-rainbow many so-called experts would have you believe. The recent massacre of Americans’ 401ks should be enough to tell you that.

Chin up. We can get through this tough time. We just have to keep our heads, be alert and be ready, willing and able to adapt.

During a recession, we can’t afford to keep all of our investment “guns” pointed in the same direction.

Kevin DeMeritt, President of Lear Capital, is a published author, analyst and expert guest on more than 1000 radio programs, including Rush Limbaugh and Coast to Coast with George Noory, discussing today’s economy, gold and the geopolitical picture. Now more than ever, his insights are welcome by nervous investors. Visit http://www.LearCapital.com for all the investing help you need.

Searching for a stock is the obvious first step to investing. You hear about stocks on television and radio, and notice some mentioned in the paper, or other people tell you about what they know (or think they know). Start keeping a list of all the stocks you hear of. And you will hear more and more, and find more and more mentions everyday as you get more into the subject of investing.

May as well make a list. Some of the stocks that arrive on your list might be very good ones. Of course you will investigate all of them, and eliminate probably most. But, if you are just starting out it is well worth the effort to check out everything you can.

Searching for stock can and does take time but it’s always worth it. You are dealing with your money. You don’t want to do this hastily or emotionally. The original research of searching for the stocks you want to invest in may well be the most important part of stock investing.

Good investors control their investments; their investments do not control them.

There are resources online you should investigate: MorningStar, the Wall Street Journal, Success Magazine, yahoo.com/finance, Reuters.com/finance/stocks, and many more. Search them out, decide what’s best for you and study what they have to teach you.

Get familiar with stock charts. If you have a broker already, ask them what charts they use; maybe they have one online that you can learn from. If not charts.com is free. Play with the charts until you are comfortable in reading one, and are quite sure about what it is telling you.

Don’t get caught up in what you think you’re learning from studying charts or from reading the papers. This is just a familiarization period. You’re learning to gather important stock information, not trying to make judgments. You’ve much more to do before you’re ready to invest.

Remember what you read in your local paper that has to do with stocks is probably old news as far as stock news goes. Everything that happens in the stock market happens so quickly by the time it gets to your newspaper it’s long past timely. That’s why you need to learn to investigate stocks and dig out information about the company(s) rather than depending on impulses and gossip.

Incidentally, if a stock symbol has four or more letters the stock is traded on the NASDAQ or the over the counter exchange; if the symbol is less than four, it is traded on the New York Stock Exchange or the American stock exchange. It helps to know which exchange you want to look at if you’re looking things up in the Wall Street Journal or other news paper.

The most important thing right now is to not be in a hurry. Once you’ve decided to invest most people are anxious to get started. But, you have a lot to learn if you’ve never done this. You don’t want to be hasty.

Setting out to create a list of 25 stocks and keep notes on all you learn about them, is just the beginning. As you learn about them you will be eliminating stocks off the list.

It is important to keep notes on how you do your research. As you get more experience you will find some of the things you thought were important to do when you started are not giving you information you can use. Keeping notes on all you do will help you to learn as you can evaluate your learning process as well as evaluating the stock.

And have fun. Even research can be exciting. And the real gem, might be in the next paragraph, or on the next page. So enjoy!

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Any risk associated with finance is called financial risk. A definite decision in any sort of investment or credit runs the probable danger of suffering a loss i.e. a return which is lower than the actual expected return. This may be in the field of investment, business, credit, insurance, market and liquidity. The financial risk may take place at the domestic ground as well as at in international finance. There are certain management tools as well as assessment tools to help mitigate the dangers.

Financial Risk Management Tools

In order to mitigate the dangers as well as manage the various aspects of the financial exposure, one can use the following tools:

• Financial or Technical risk modeling
• Risk insurance and Self-insurance
• Transfer of risk through: Insurance in environment and Captive insurance
• Programs involved with Alternative Risk Finance

Some of the financial risk analysis tools include:

• RiskPAC
• CORAS
• OCTAVE
• Proteus
• RiskOptix
• RSAM

RiskPAC: It provides automated risk analysis. It eliminates the vulnerabilities in the design of strategy that is to be implemented. The tool carefully manages and mitigates the probable dangers. It includes both the long term as well as the short term uncertainties.

CORAS: This new improved user interface mitigates the risk which can be insured. One can transfer the risk. Depending on the probability of the uncertainty of a particular venture, the company figures out the list or the field where the individual particularly runs the danger of suffering losses in finance.

OCTAVE: OCTAVEAT is a tool, which includes the techniques as well as the methods for risk-based information on the security and the strategic assessment of a cost. By payment of a definite premium, you can mitigate the danger. You can attain risk insurance in various aspects.

RiskOptix: You can audit plan and regulate pressure with this tool. You can also make policies based on the uncertainties that you would face.

Key Concepts

Risk = Probability of Event X Cost of Event

The tools used in finance analysis are based on the particular formula mentioned above. You can avail more information about different tools online and use the information for the benefit of your company. Each of the tools is ideal for proper assessment. The assessment report helps provide you with a definite program on which you can base your finances for the particular abatement. Both internal and external factors contribute to risks in an investment plan.

Julia is a full time freelancer who loves to write on a wide range of topics. Talk to Julia now if you need content for your business or personal needs.