Investment Articles

Last week I spoke about stocks vs funds and which to choose as part of your investment portfolio. Of course once you have made the decision on what route you are going to take then comes the even big decision – what stocks/funds to buy?

So if you have your crystal ball now would be a good time to take it out and gaze into for guidance…..the point is no one or nothing will be able to tell you where you will make a guaranteed return but you can do certain things which can help you make good educated choices which give you the best chance at a solid return.

For the average investor I would almost always recommend a portfolio made up of funds – they are run by professional managers who buy and sell stocks for a living, giving you the time to focus on what you do for a living. They are also well diversified across a range of stocks often upward of 100. Of course if some is keen on having individual stocks I would suggest only a small percentage – almost like a gambling fund which allows you to have a crack at things yourself.

The first step is to think about what you want to achieve – how long you want to invest for and what sort of return you are expecting each year. Coupled with this you need to consider how much risk you are willing to take. But how do you decide what is too much risk? Well think of it like this you have you money sitting in the bank earning very little (maybe 1% or less in some places) this is no risk but you earn very little in the way of a return (technically you could be losing depending on factors such as inflation) on the other hand you could be invested in a company that heavily involved in a new technology that has massive market potential but has not yet been adopted by the market (say new computer software). There is very little chance of losing your money when it is in the bank however most new businesses/technologies fail. You need to think about where you fit on this scale – think of it as a continuum from 1 (no risk) to 10 (high risk). Remember you don’t want to go to sleep at night worrying about your money so take this into account when deciding on your risk tolerance.

So you now have a starting platform you know your expectations, goals and attitude to risk – what next? You need to create a portfolio which is balanced both geographically and asset wise – here I would recommend seeing an advisor and get them to recommend a series of funds which, if you like you can then check them out yourself – one thing you will learn is there are many funds operating in the same sector and there is no harm in comparing to ensure you pick the right one. Professional advice will, at least, narrow down the options for you. It is the same reasoning here for picking funds over individual stocks, an advisor will have spent the time researching what funds are best for a given sector and how to build a portfolio where risk and return is managed for the investor.

Remember just because you live in a certain country does not mean you have to select funds that only invest in your country – look at other areas like China or India, Australia or Latin America – all have shown strong growth over the last two years and really every portfolio should have some exposure to these markets.

If you do the right leg work you can create a portfolio that should be a winner long term and as I always tell people – why not have your cake and eat it.

http://www.qropsworld.com

With all of the volatility in the economy these days, many people are questioning what the safest investment strategy is. If this is a concern for you, then you might have already considered mutual funds, stocks, gold and several other strategies. Yet, how do you know which investment strategy to put your money in so that it will not only be safe but that it will grow? In this article, I’ll be covering some of my favorite investment strategies and how they can help you in increasing personal wealth and building financial security.

Two Evergreen Investment Strategies

By far the “safest” place to put your money is in an investment that you have control over. This is a scary thought for some of us. However, it’s even scarier to have no certainty or sense of control when your investments aren’t doing well. That said, I believe that one of the most certain places that you can invest your money is in building your own business. Sure, you can invest your money in stocks and mutual funds and invest in someone else’s business.

However, why do that when you could be investing in something which you have control over and which is 100% directed towards adding value for you. For example, if you own a marketing company and you invest money into a new project management or ERP software which allows you to keep better track of your resources, then you’re increasing your chances at earning more money. You’re also making it easier for you to run your business and therefore eliminating a lot of the stress from your life.

Not to mention that you’re probably buying more time for yourself and thus creating more opportunity to do the things which you really enjoy. So the additional benefits of investing in your own business go far beyond financial freedom.

The second investment strategy which is most secure is investment in real estate. As long as human beings are occupying buildings, real estate will be valuable. Sure, the prices of housing will fluctuate, but buying and selling isn’t the only strategy when it comes to real estate investing. Not to mention that the possibility of your real estate dropping all the way to zero value is unheard of.

Provided that you do your homework about real estate investments, you can build a VERY secure net worth by purchasing real estate and either selling it for a profit or renting it for residual monthly income. Real estate investing and investing in your own business are rock solid strategies which you can pretty much count on in any economy. Of course, it’s important that you apply these strategies wisely, but that’s the case with any investment strategy.

Much success in your investing!

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The recession and the anticipatory fall in stock prices that preceded it has scared a lot of investors away from the market. This is unfortunate since it is during these times that the stock positions are built that result in the truly great returns. Just like shopping at the supermarket, the time to stock up is when things is when they are on sale.

Individuals tend to do just the opposite when it comes to investing, however, buying only after big run-ups and selling after prices have declined. The result is so pervasive that there are strategies that actually try to follow the inflows and outflows of “the crowd” and do the opposite. The more bullish the public is, the more stock one sells. The more bearish, the more one buys. This strategy has additional merit in that when everyone is bullish it probably means that they have already invested all of the money they have and there is little capital available to drive stocks higher. (Note that with real estate, once home prices has risen to the point that individuals could not even afford the payments with no money-down, interest only loans, housing prices quickly went from straight up to straight down.)

The difficulty is that individuals tend to equate buying and seeing prices rise with “winning” and buying and seeing prices falling as “losing.” One needs to get over this mindset to succeed at investing because it will cause one to miss out on great investing opportunities. If one buys a stock in a falling market and sees the shares decline a bit, one should see it as an opportunity to buy more at lower prices. If held long enough (and assuming that quality stocks are being purchased) the stock should be much higher than either price paid. One should take advantage of the fact that a falling market causes all stocks – good and bad – to fall. The difference is that the good stocks quickly recover while the bad languish.

Unfortunately, the style needed for successful investing runs counter to an individual’s normal psychology. If a person buys a stock and it goes down, he may initially stay with his convictions and perhaps pick up a few shares (like doubling down in gambling), but if the stock continues to decline he will eventually sell out. If he does not sell out, he may sell as soon as the price returns to the price paid, feeling that he “got his money back,” only to see the stock soar to new heights.

This can be avoided with a few simple strategies:

1. When buying a stock, particularly in a down market, build up a larger position by buying only a portion at a time. For example, build up a 500 share position by buying 100-200 shares at a time on dips. One should have a targeted number of shares before starting, however, to avoid the other common mistake of averaging down in a losing stock.

2. Plan to invest for the long-term. If one is planning to be invested for 10-20 years in a stock, one will have a different perspective on 10-20% declines.

3. Do not invest money that is needed in the near-term. If a retirement is looming or college tuition bills are just around the corner, funds needed to pay for these expenses should not be invested in the stock market. Because downturns can last for five to ten years, one should not have money invested in stocks that will be needed within the next five years or so. While putting cash into a CD may seem like a waste, the psychological peace it will give will result in smarter investment decisions.

The other question that may be asked is “What types of stocks should one buy during a recession?” As was previously stated, all stocks tend to go down during downturns in the market. This means that the shares of the top companies in a sector will tend to fall along with those of the second and third-tier companies.

Find the companies that are leaders in the industry, which probably had higher PE ratios than the industry average during the good times. Other good signs are companies that have little if any debt, strong cash flows, and had consistent earnings growth. These companies will tend to be stronger than their competitors and therefore better able to weather the recession. They will pick up market share as their competitors fail, emerging from the recession stronger than ever.

To learn more about stock investing, stock picking, and growing wealth, please visit the Small Investor: http://smallivy.wordpress.com. Find hundreds of articles on investment strategies, tips, and tactics for investing and growing wealth.

Is it possible to be a successful trader and make a living from it? Yes, but it is not easy. It takes a lot deal of hard work. You need to read books to gain your knowledge, and perform your own research. Just because you have made a few successful trading in short term, it doesn’t mean you will win the game in long term.

When you enter a position and you have doubt why you are in it, GET OUT IMMEDIATELY!. If you do not know why you are in a trade, then you are guessing/betting.

Trading is mostly psychology game. After a significant losses or frequent loss, our psychology can get in the way of trading. A lot of traders experience large losses. Many of them stop trading and never return. Others work hard to understand what went wrong and try to fix their system. To be a successful trader, you need to manage both the technical game (your trading system) and the emotional side of trading.

According to a book written by Alexander Elder: Trading for a Living, : Psychology, Trading Tactics, Money Management, to be a successful trader you need three M’s: Mind, Method, and Money. The book helps you discipline your Mind, shows you the Methods for trading, and shows you how to manage Money in your trading accounts.

To be a successful trader, you need to:

Become a cool, and calm trader
Read the behavior of the market crowd
Develop a powerful trading system
Find the trades with the best odds of success
Find entry and exit points, set stops, and take profits

There are some lessons you can learn from the book:

As an individual trader, you need to be discipline and patience to beat the institutional traders who have faster information, a better research reports, and lower psychological burden for trading Other People’s Money (OPM)
Opening prices are determined by amateurs whilst closing prices are determined by professionals.

Make money with option. Learn options strategies that makes money

When you work, you might not always get the results you want and it doesn’t matter how hard you work. Sometimes, you even need a break and this is also valid when it comes to betting. You may have a period of time when you guess a lot of outcomes, but you can also miss a lot of outcomes during a season. If you don’t feel very inspired, if the luck is not on your side, you should really take a break. You should think of giving up on betting for about a week or two, after which you can start all over again. This will definitely help you see things better and will bring you higher profits.

You should never live with the impression that all your bets will be winners because there is no chance something like that can happen. Most of the betters increase their stakes once they win something. Of course, they increase their stakes when they lose some bets, too because they have the impression that this is the best solution to recover all the money they have lost. This usually happens because the betters know that they can’t lose all the time, but they should also know that the chances are calculated just like they always are and it doesn’t matter if they won or lost before.

Last but not least, you shouldn’t be greedy. Most of the betters believe that they are invincible if they win a few matches. greed is natural, but you have to control it, especially when your money is at stake. All in all, obey these rules and you should make some nice profits from the bets you place.

Our website, Spread Betting Explained, offers you everything you need to know on spread betting, so visit us at www.spreadbettingexplained.net.

The following article is written to answer the question, What is a Directory of Angels Used For? A directory of investors has a number of uses in addition to the primary purpose of putting angels in touch with young or expanding businesses.

Finding Investors: The most common use of the database is to secure investors for a business or start-up. Small businesses need financing and angel investors are willing to invest in companies with sound management and that have the potential to make a good return on investment. But small businesses and entrepreneurs often have trouble contacting potential investors which is where a database is extremely helpful.
Providing Services: Like any other group of private investors, there are various service providers who would like to contact angel investors for opportunities to work together. For example, a law firm may want to use the contact details to provide legal services. Likewise angel investors often hire accountants and an accounting firm may want contact details for angel investors.
Build recognition in the investing community: As a small business or entrepreneur, especially one in the technology sector, it’s helpful to build up recognition of your business to potential investors. Angels often invest in groups and they meet so while one angel you contact using the database may not be interested in the investment opportunity, he or she may be able to forward the investment opportunity to others.I hope this has answered the question, What is a Directory of Angels Used For? As you can see there are other uses for a database besides simply cold-calling the contacts included in the directory.

But… if you want to be able to quickly contact and work with angel investors you will need a angel investor directory in Excel format.

- Theo O’Brien

In this article I will explain why Gold and Silver are the best options to protecting your wealth in this volatile world economy. As Investing Expert and #1 Best Selling Author Michael Maloney said, “The most dangerous investment is in U.S. Dollars.”

Since the beginning of civilization, Gold and Silver have been a safeguard of wealth. As world currencies fluctuate in value, these precious metals have always maintained their value, and are great options for anybody to hedge their wealth against inflation in our volatile economy.

Since the world financial crisis began, roughly in 2008, the Federal Reserve has been printing money like crazy, nearly doubling the amount of U.S. Dollars in existence to nearly $2 Trillion. This mass over-printing of money within a short period of time causes inflation. Due to inflation, the U.S. Dollar is actually becoming less valuable.

It’s my belief that since the U.S. Government and Federal Reserve have over-printed money in mass quantities since 2008, this has caused the jump in price of Gold and Silver. For example, in 1971, the average price of Gold was $40.62 per ounce. Just five years ago, in 2005, the average price of Gold was $444.74 per ounce. Today, in 2010, the price of Gold is $1276.20 per ounce. In 1971, the price of Silver was $1.39 per ounce. Just five years ago, in 2005, Silver was averaging $7.31 per ounce, and today, in 2010, Silver is $20.80 per ounce. That is a 287% increase in the price of Gold over a 5 year period and a 284% increase in Silver over the same time period.

As global economic conditions continue to deteriorate, more and more people are realizing that Gold and Silver have historically been an excellent safeguard of personal wealth. It is my belief that Gold and Silver are rock-solid, long-term investments. I advise everybody to continue to research the fantastic opportunities to invest in Precious Metals.

Dylan Wirtz is a Wealth Development Advisor located in Santa Barbara, California. He is an expert in Gold and Silver Investing. To learn more go to: http://www.DylanWirtz.com

Last week’s article regarding Jane’s debate seemed to raise a stir amongst my friends so I thought I would carry on the theme today. I was not being arrogant towards Jane’s plight but merely pointing out that she was a normal bright girl but not financially educated.

Jane’s dilemma was based around her non understanding of the consequences of her financial decisions. It is of course true to surmise that when we were young, all of life’s choices and decisions were made for us.

As we grow as human beings and mature, we have to learn how to make our own choices. This is often a slow and painstaking process which can be full of elation and dejection depending on the result. You are not taught in school how to make these decisions and you are not advised how to deal with the consequences, so life for most people gets more difficult, including Jane.

In most peoples lives, their financial choices are the most important decisions a person can make. The reason for this is if you can make good decisions and take control of your finances, it will empower you to make a new world for you to thrive in.

People become rich and successful for 3 reasons.

Firstly, they do not procrastinate, they are decision makers, they are not afraid to be wrong.
Secondly, they understand the rules of money, they do not use their own money to buy liabilities.
Thirdly, they understand tax laws and definitely pay a lower percentage that working and middle class people.

So for Jane, now is the time to take stock of her financial situation. It is time to confront her fears, her stale thinking patterns and all of the other obstacles put in the way by her confidents – not forgetting herself.

These obstacles that have stopped her getting ahead financially.

The most important lesson for Jane is to change her mindset and do it today.
My guess was that Jane was in her early 30’s. She will need to spend around 1/3 of her wages for the rest of her life to support her lifestyle after she retires, assuming the government of the day will let her retire? She will already be paying a third (minimum) of her wages in tax. Jane is living below her means to get ahead. This is no way to live your life and this is why I advise Jane to change today.

Yesterday, I attended a training course. The course is designed to create financial freedom by creating passive income for life. Unbelievably, it was attended by a professional footballer who at the age of 24 recognized he cannot play football forever and wants financial freedom for his family in the future, even though he is single today!

His decision to attend speaks volumes for him as a person. No matter what happens in his football career, he will always be financially secure. He made a conscious decision to spend his rest day networking with like minded people who would normally be cheering (or booing) from the stands. He was also the last person to leave after the event.

It is never too early to change your thinking patterns, it is never to late to create financial freedom. Create a team around you of like minded people, these people will inspire you to make the right decisions in your life. I was not part of Jane’s team so had no influence on her…

But I know a certain professional footballer I would have on my team every day!

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I overheard a hot debate this week whilst in my local pub. The nature of the debate was centred around weather a person (Jane) with savings should use them to reduce her mortgage or use them to invest with. Jane had a great salary but was worried her job may not be as secure as she had believed as little as 3 months earlier. She thought if she paid off her mortgage using cash-flow from her salary along with her savings, her future would be secure no matter what happened to her in a professional capacity.

I sat there quietly whilst heated discussion points were aired. There was lots of talk about good debt, bad debt, gearing, cash-flow, investments and security. However, there seemed to be a very important point missed from the conversation. Put simply, all cash-flow should not be treated in the same way.

Anyone who has read Rich Dad Poor Dad will understand this point instantly.

Cash-flow which is achieved as an employee is not the same as cash-flow achieved through a financially astute investment. The conversation also failed to impress the importance of buying your investments, particularly property when the market is trending downwards. This is because better deals can be achieved and cash-flow will be higher than in an upward market. Writing today, property is once again king with massive rewards to be had for the astute or well advised investor.

Cash-flow gained through increasing your assets (property investments) is a much better way of reducing your mortgage than cash-flow achieved through your salary. The obvious reason for this is we are taxed much higher on our salaries.

The conversation was strangely biased towards the fact that Jane’s job was for life. Her friends were possibly being kind in suggesting her firm would never sack her or attempt to move her on. Her services were way too valuable for that to happen. They had failed to take up Jane’s point that she felt insecure and were she to lose it, where would she stand? Most people never think they will lose their jobs but an increasing number have and many more will follow in the coming months. The result is if you do not own your job, you have no control over it’s cash-flow.

By putting the money in to an asset (property in this case), you are in control because you own the asset. With a little due diligence and some good advice from me, Jane would have been informed enough to make a wise decision that would have paid her a cash-flow for the rest of her life.

It has been said by many that your home is a place for shelter and to raise a family-not an asset. We all love our homes but few realise they are liabilities. It is therefore nonsense to pour your savings in to your liability, especially in a declining market.

The perfect scenario for Jane would be to continuing to pay her mortgage but also to gently increase her assets as she could afford to. The assets would create cash-flow which could be used to pay her mortgage (if she wished). The key to this result is that Jane would make herself more tax efficient and she would be in control of her financial future no matter what happened in her job.

As I did not know the lady in question there was no benefit of her sitting on my table – unless of course she is reading this article?

About the author:

Our no-nonsense honest approach ensures you are offered the best opportunities out there!

Imagine being locked up in a dark cell, and you can’t leave. You don’t choose where you sleep, what you eat, or even what clothes you want to wear.

Sure you can get out, but not for decades? Who knows where you will be then, and all the opportunities you might have lost.

Welcome to 401k: Financial Prison.

Does this sound familiar? Every year millions of Americans blindly throw money into their 401k prison, and they don’t even know what is going on behind those walls. Well here are 5 reasons why your 401k just might be your financial prison.

The Sentence: Your 401k has been sentenced. You cannot take it out until your are 59 1/2, unless you pay a severe penalty. All this time you are losing out on all the opportunity and wealth your money could be creating you outside these walls.

The Warden: Most people don’t even understand where their 401k money is being invested. Many 401k’s are poorly invested in stocks and mutual funds that are losing money. Instead of being in control of your money, someone chosen by your company is deciding what investments are best for you.

The Penalty: Sure you can pull your money out of your 401k, but it is going to cost you. There are severe penalties for taking your money out of your 401k, and many companies have hidden fees and policies that you aren’t even aware of.

The Government: 401k’s are under government control. We have a national debt and a spending craze that is only getting worse and worse. Where the government giveth, it taketh away. Your 401k is under risk of future government decisions and possible added fees.

The Taxman: You finally complete your life sentence. Now it’s time to pay the tax. It’s safe to say taxes are going to be higher when you retire. Couple that with inflation and your in for trouble. Many people are finding themselves with less money then they planned on. Their 401k retirement has left them short of their retirement dreams.

Your money is your money. You need to be in control. Understanding your 401k is a great step towards financial freedom. Contributing up to your match can be a great move, if you understand what you are getting into. However, understanding all your options will help you make the best choice when it comes to your short and long term investment goals.
There are other investment alternatives, some that may work much better for you.

Learn more about your options at http://www.BecomingYourOwnBank.com.