Investment Articles

Since historical times, wars were won by people with the best plans and strategies. While we do not advocate war today, many people nevertheless still fight with poverty daily, trying to triumph over it. Here, one good way to emerge the victor over this dreadful opponent would be through investing. Like anything else, stratagems are needed to invest well and because of this, please read on to discover the gems you need for victory!

Today, one good way to invest well would be to determine if the investment is a one-time only opportunity or one that offers you ongoing systems and possibilities for wealth creation. This is important because it acts as a barometer for you to gauge how much you can learn from the investment. Usually, investments that provide you consistent opportunities to generate wealth tend to be better as it guarantees a certain amount of cash flow at lower risk. Nevertheless, different situations warrant for varying measures and there is definitely no magic bullet which can solve all problems for investing.

Moreover, an investor should also ask himself the rationale in pumping money for the investment besides its returns. Such reasons have to be beneficial for yourself and others because wealth creation is mostly about win-win. For example, if you intend to buy rental property, the rationale can be because you are providing housing for tenants, thus creating value for them. A general guideline is that if you don’t create value via your investment directly or indirectly, it may not be worth investing.

Furthermore, investors should ask if the investment will create personal confidence or fear for them. Generally, it is better not to dabble with investments that generate fear in you because humans are easily swayed by feelings. Given that fear is a very powerful emotion, it can sometimes cause people to pass wrong judgments and make wrong decisions that can result in heavy losses.

Nevertheless, fear occasionally is caused by lack of research and knowledge of the particular investment. For this, investors ought to read up more and know every aspect of the investment well to generate certainty and predictability. Like what Buffett said, don’t try to jump over 7-foot bars. Instead, look for 1-foot bars that you can step over.

In addition, the particular investment should also support, utilize and contribute to what you love and want to do. With this, you will pay more attention to the investment because in the first place, you already liked it as it is aligned to your passion.

However, while this is important to do what you like, investors should take note that they shouldn’t take on too much risks and any excessive risk ought to be transferred to people or companies willing to take them. For example, insurance firms where they collect all the risks and charge premiums to people who transfer them risks. However, as these companies pool resources together, the risk they undertake is greatly reduced even though they appear to take on huge risks.

Hence, in conclusion, after covering the golden strategies to invest well, I believe readers now have a clearer picture about investing. Armed with such precious knowledge, start investing and do it well!

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Many companies use two ways to raise the money required for business growth. The way in which they do this is through issuing shares or issuing bonds. With shares you become a part owner of the company but with bonds you become a lender to the company. Corporate bonds are one of the main ways for them to raise capital. The question arises: just how safe are corporate bonds?

As with all bonds, corporate bond prices are sensitive to universal fluctuations in interest rates. Standard & Poor’s, Moody’s or Fitch rate most bonds. Any with a rating of B B B or higher are considered to be investment grade. Those rated lower would be considered as a “junk bond.” The higher the rating the lower the rate of return the issuer can offer. While an investment-grade corporate bond may still default you can be more confident in its ability to repay its debt.

Ratings can be used to help you make better investment decisions and they allow investors to compare the financial strength of each company. A poor credit rating indicates a higher risk that the company will default and you will not get your money back as promised.The benefits of credit ratings are that they are widely available and offer a simple measure of risk. A low credit rating does not necessarily mean you should ignore the company but it does indicate that caution is warranted.

Investment-grade corporate bonds are suitable for investors seeking income and for conservative investors who want a higher yield than would be available with government or treasury bonds. They also add diversification for the more aggressive investor. These bonds are considered very safe investments, and they pay slightly higher yields than government bonds

At the end of the day corporate bonds are only as safe as the company in which you invest. Read annual reports to learn about the company’s cash reserves, their outstanding debt and profit projections. Look for realistic responses to economic changes. Do they adjust in times of economic downturn?

As with any investment corporate bonds vary in the degree of safety that they offer the investor, and nothing is guaranteed. The corporation issuing the bond guarantees the bond, but the safety of the investment depends largely on the credit worthiness of the company. Municipal and government bonds will have a higher rating than a corporate bond and they offer lower income opportunities as a result of the lower risk. Corporate bonds are safer than shares as they have preference over share holders in the event that the company fails.

When considering investing you should think of your own personal circumstances, your desire for risk, your personal strategies for investing, and the current market conditions. The final decision will be yours and you can only use the tools available to assess the safety of corporate bonds.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

A disclosure statement is available free on request.

Successful investors have a system. They have rules that they follow and that they don’t deviate from. Take Warren Buffett. In the 1990’s, he did not get into the Internet companies. People thought he was nuts. And what happened? The Internet bubble popped. Now, Warren’s back on top, well ahead of where he was back in the 1990’s when he seemed like the only person not making money on the Internet.

When I ask folks about their stock, “When do you know when to get out?” a lot people just answer, “I don’t know! I’m just going to keep it. It’s going to keep up isn’t it?” For some people, that’s their system — buy and hold or as I call it buy and hope.

But sometimes, like 2008 — that’s not the most productive way to invest your money. I heard of a lot of people who lost thirty, forty, fifty, sixty percent in 2008 through the buy and hold way of doing things.

Once you’re in retirement, your time frame is going to seem short. So to protect yourself, what do you do?

You set rules. Create and follow a system.

Number one, I always tell people, is avoid big losses. If demand is falling, it’s time to get out. Number two is to periodically take profits off the table. Generally speaking, we take profits when a position has gone up 30%. Then again when the position is up50% and/or when demand starts to weaken. You’re not in the investment to own the company, you’re in it to make money. And one way to make sure you do is to take profits off the table from time to time. Set a level – a percentage — then live by it and invest by it. And don’t deviate from it. That’s your system. That’s the best way to do anything with investments – to remove the emotion out of your investing.

We’ve kind of joked with some of our clients about being married to their stocks – even when growth stops for years and years. If it stopped, or went backwards, why do you want to hold it? It’s all because it’s an emotional attachment. You bought it because you liked it. You loved it. It did well for you. But honestly, who cares? It’s a stock, it’s a company. Move on to something else. Find something different. Having a set of rules, and setting goals for your investments, is the best way to keep emotion out of your financial life.

Copyright (c) 2010 Brian Fricke

Brian Fricke is the Author of “Worry Free Retirement, Do What You Want, When you Want, Where You Want”. For the last 6 years in a row Brian and his company – Financial Management Concepts – have been named one of America’s Top Wealth Managers. For more information, please visit http://www.BrianFricke.com

For anyone who has one eye on the investment markets, it is impossible not to notice just what an important role gold bullion coins have to play. There are obviously all sorts of gold commodities which can be invested in but it tends to be coins that the savviest of investors turn to.

Gold bullion coins are not only an incredibly worthwhile venture from a return on investment perspective – they are also highly visually appealing and collectible in their own right. Many people like to add gold coins from all over the world to their investment portfolios – such as the American Eagle coin from the United States or the eye catching Golden Panda from China.

What to Consider Before Buying

It always pays to be cautious when it comes to any form of investment and keeping an eye on the gold markets is also extremely prudent but, so far as investments go, they seldom come much more reliable than gold bullion coins. Such is the demand for such products, and the fact there is only a finite supply of the precious metal, means that the price of gold in general will only head in one direction in the long run – and that is upwards.

Gold investment is nothing new and people have been doing it for years. The fact it is one of the cornerstones of the investment and has been for decades, gives investors an additional level of peace of mind when they decide to invest in gold coins. In order to find the widest selection and best prices for gold coins, the majority of investors will search online as this will provide them with gold products emanating from all over the world that they can invest in.

Gold bullion coins are something that thousands of investors will add to their portfolios each year and for good reason. If you comprehend the fact that this type of commodity be viewed as a medium to long term investment, you are likely to do very well out of it financially.

For the finest choice in gold bullion coins, visit the premier site UK Gold Bullion. Great prices and superb customer service! Go there today – http://www.ukgoldbullion.co.uk

There sure is a lot of talk about derivative trading in the stock markets and commodity markets. Still, very few people actually understand derivative trading. The reality is it’s not really that difficult a concept, but it is if no one has ever sat down and explained it to you, because the concept is somewhat foreign to normal everyday thought. Are derivative trading schemes good for our markets? Well, this is a highly debated topic isn’t it?

Many believe that they are as they allow for balance to come into play on a given commodity or stock, and thus, iron out the trends. But if everyone does it, then the trends become erratic and thus we see more volatility, which is good for the derivative traders who love to play, but not so good for rational markets. Large traders and market makers often are able to exacerbate trends in this way and make a lot of money doing so.

Some think that the mathematics involved in derivative trading are far too complicated for the average investor or stock picker, and that maybe so perhaps, but maybe they should have paid more attention in math class in High School and College?

Former FED Chairman Greenspan believes that derivative trading is good for markets, and others disagree and believe that such trading schemes are very bad for markets, especially when the derivative traders are only interested in scraping the cream off the top rather than investing in companies worthy of note or allowing the derivative trades to rationally reset over bought or undervalued securities.

The other day, an investor asked me about an article I wrote on Benign Derivatives and B9D strategy, and as I began to brainstorm with him, I explained my basic premise, that is all derivative trading can be benign or even good for markets, but they generally are not. Over all if controlled somewhat, they can assist in stabilizing and rationalizing stocks and commodities to where they really should be.

Still, at some point we all need to step back and consider what’s fair, and where should we draw the line? Should some large players be allowed to use these schemes to win big, and others not able to play? If so, why have them at all? These are all interesting questions yes? Sure they are. Please consider all this.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes it’s hard work to write 21,300 articles; http://www.bloggingcontent.net/

A budget is basically a money plan which includes your financial goals. By having a budget you can plan to achieve your financial objectives and this means making frequent investments. Your budget will help you to know what you have coming in as income and what expenses go out each month allowing you the capacity to make adjustments for your investing.

You may have heard the old adage “pay yourself first”. The usual recommended amount is to put 10% of everything you earn into investment. This is where retirement funds and managed funds become useful as you can invest regular amounts without having to invest large sums. These funds, particularly retirement saving, can be taken from your pay packet before being paid to your account. This is useful as a way to “set and forget”. If it is taken out of your pay it will not affect your budget.

One of your first investment priorities is to set up an emergency fund. When you budget you need to put aside a certain amount of money for unexpected expenses as well as the normal anticipated spending costs. Start with setting up an emergency fund until you have three or four months worth of net income replacement in an interest earning call account. The regular amount you invest will depend on your expenses and outgoings. Once you have your emergency fund in place the money you were putting away can be redirected into other investments.

Save for annual goals such as holidays. Save a regular sum for your travel for annual vacations. Decide on the amount you need for your travel expenses. For example if you want to spend $6,000 annually you will need to invest $500 each month. As this is an annual goal it will be ongoing.

Saving for specific goals is done in a similar fashion to your vacation fund. First establish when you want to achieve the goal and then calculate how much you need to set aside to achieve this in the time frame you envisage. In this case $6,000 in five years will mean investing $100 a month (not counting for interest payments). That is the total sum divided by the number of years and then divided by 12.

If you have a surplus in your budget after catering for your goals then invest that surplus — provided there is no debt to clear. You are able to invest small sums into managed funds (mutual funds) and sometimes amounts as small as $50 are accepted as a regular monthly investment.

While investing is important to your financial security do not forget your commitments when doing your budget. This includes commitments that may be annual and even your gift giving, entertainment and other miscellaneous spending. Adjusting your budget to make frequent investments is all part of an ongoing budgeting plan.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

A disclosure statement is available free on request.

Where is the US economy headed?

No doubt, recovery expectations have risen over the past few months, mostly on the back of stimulus packages and proactive stance of the government. But this doesn’t seem to be a long term fix to the situation as debt is rising and soon it will build up as a mountain of worries. Everyone is aware of the situation but all efforts are being made to keep the economy running in the shorter term.

Is the Debt Problem Really Intense in US?

It’s really hard to say if the economy will collapse in 2011, but it’s almost certain that if the government continues to spend on temporary relief packages to stimulate the economy, the mountain of increasing debt will lead to the biggest financial disaster ever witnessed by mankind. At present US government, businesses nationwide and American consumers are all sailing on the same boat, which is headed for an iceberg. If you do not agree to what is being said here, then read on to know hard facts.

Will the Housing Market Recover in 2011?

Mortgage defaults are still appearing fresh in the market, keeping the housing prices near record lows. Defaults have been record high and still increasing since mid 2007. What if housing prices fail to show considerable recovery going into 2011? Well, many economists are of the view that housing market may not show any sign of improvement till the end of next year. Now, this could result in a second wave of foreclosures, which will make the cracks much wider and hopes of recovery will be shattered for long. Is Consumer Spend and Employment Situation still a Threat? Ideally, a recession is a temporary blip in economic activity, but this time around it has stayed much longer. This is evident from the employment situation, as the unemployment data is not improving despite so much quantitative and qualitative easing by the monetary authorities. Latest stimulus package has provided a support to the financial markets as investors believe that this money will help in creating jobs in the system, and as an end result consumer spend will once again pick up. But, so far things have not worked as they were expected by the Fed, and same could be the case yet again.

Are the Americans Broke?

There is no hiding from the fact that more and more American citizens are filing for personal bankruptcy. In such scenarios, how can authorities expect the demand to surface again, when people are high on debt?
America simply needs jobs, and it needs them at a much higher pace than anticipated. The recent recession, which is now officially over, may have been an indicator of an upcoming depression in the system, as it was much more than what a recession is. Now, if we again slip back to negative growth, which cannot be ruled out so early, then the economic chaos will spread its wings globally, and the world will spend a decade with a flat growth.

Investors and traders should remain prepared such financial turmoil anytime soon. Even saving up on brokerage costs, by opting for cheap online discount brokers, can help in maximizing returns in such uncertain times.

Read More:
Future of US Economy

Compare Online Brokers at http://www.comparebroker.com We can assist you in opening an investment account with a leading brokerage. Visit our site for latest reviews of offers and promotions from different brokers. Our blog section is regularly updated with informative write-ups for traders and investors.

In times of a rapidly expanding population, low interest rates, inflation and murky equity markets, investors are searching for assets that will grow in value, produce a regular income, and retain value in the event of a crash. Essentially we need a safe haven for our cash and that is leading many investors towards the agricultural sector as 75 million new mouths to feed every year and a changing diet in developing economies supports the theory that agribusiness will do well in the mid to long term.

There are a number of options open for investors choosing this sector, from agricultural investment funds, ETFs, direct investment into agribusiness companies, or trading soft-commodities such as wheat. My problem here lies in the fact that these investment strategies do not tick all of our boxes. Funds incur management fees, and over the lifetime of a mutual fund investors lose 80% of their gain to management fees, commodities can be volatile in the short term, and investing into agribusiness companies does provide any level of non-correlation.

So what is the alternative? More and more canny investors, both private and institutional, are snapping up what little good quality agricultural land is left in the hope that as time passes, and the population continues to grow, the land we have will become more valuable in the face of a higher demand for food. We also know that well tilled land will produce an income every year from the growth and sale of crops, replacing the lost risk-free income we no longer achieve from holding cash. Of course, if someone somewhere finds an alternative to food then the value of farmland will fall, but I think we can all agree that we will all have to eat at some point and therefore arable land retains value even in the worst of circumstances.

So how does the small investor source a piece of agricultural land large enough to farm commercially? And how do we reduce general agricultural risk such as exposure to poor weather, commodity prices and quality farm management? There are opportunities for the smaller investor to take part in large farmland investment transactions, either pooling capital with other investors in order to purchase better and larger land parcels, and other very interesting structured vehicles allowing the small investor to purchase a small piece of a much larger, commercially managed farm, with the farmer shouldering the general agricultural risk and paying the land owning investor a fixed annual income. This methodology provides the farmer with much needed liquid capital to expand operations, whilst providing the investor with risk-managed exposure to high-yielding farmland, income, principle protection and capital growth.

Where should one consider purchasing farmland? We have been actively investing in the UK, Latin America and Australia since 2007, and have consistently achieved an annual income of between 7% and 12% depending on the location of the farm and the structure in which we invest. At the same time we have also captured all of the capital growth in the value of the land, growing our wealth even through the recent financial crisis.

For further information please feel free to click to download our complete Agricultural Investment Guide.

Download the free Agriculture Investment Guide at http://www.dgcassetmanagement.com/

Investors looking for regular fixed income through the payment of interest can invest in debentures and in bonds. They are both fixed income instruments put out by borrowers wishing to raise capital for various business purposes.

In finance, a bond is a debt security, in which the approved issuer owes the holders a debt which they are obliged to repay at a later date. This later date is termed the maturity. The obligation is to repay both the principal and interest (the coupon). It is simply a loan in the form of a security with different terminology. Bonds and debentures enable the issuer to finance long-term investments with external funds.

So what are the differences?

Debentures and bonds are debt instruments with different types of risk exposure. Generally bondholders are secured by access to the underlying asset in case of default by the issuer. In contrast, debentures are unsecured and holders do not have recourse to assets if the debenture issuer defaults.Debentures are backed only by the general creditworthiness and reputation of the issuer.

A bond price fluctuates according to the market interest rates. If the interest rates go down the value of the bond goes up whereas the reverse applies if the interest rates rise. The varying price becomes important when the bond is being traded but not much of a concern if holding to maturity. Liquidity is possible during the term of the investment, unlike debentures which do not tend to be traded. Debentures may be broken at a penalty rate.

The interest rate offered on bonds depends on a number of factors, including the maturity and the credit rating of the issuer. Normally the longer the time frame of the bond, the higher the offered return. The better the credit rating of the issuer, the lower the interest rate that is offered. Interest rates on debentures tend to be higher to reflect the higher risk.

The main International Rating Houses for bonds are Moody’s, S&P and Fitch. They each have their own rating scale but are very similar using ‘A A A’ as the top tier. When you were at school you no doubt thought a B was not too bad, in fact pretty good, but when applied to a bond or debenture this is not the case. This is more of a speculative rating meaning there is a one in five chance of default over five years. It is important to note that ratings will not always predict default perfectly. Failure is a possible outcome for even a highly rated institution. Bond issues come with a rating whereas some companies offering debentures may apply to be rated but this is not always the case.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

A disclosure statement is available free on request.

Often people equalize stock market investing with the activity of gambling. They compare Casinos in Las Vegas with 11 Wall Street in New York and underline the high risk factors of both endeavors.
Gamblers as well as investment brokers have lost millions of dollars within seconds in the past. Still the question maintains: Is it more valuable to test your luck in the casino or at the stock market?

Unpredictable Losses are bound to Occur in Gambling

In fact, gambling and stock investing might show many similarities, but isn’t it one step too far to put them on the same level? The outcomes of gambling such as Black Jack or Roulette are not predictable. Regardless of the strategies gamblers might have, wining or loosing are left to fortune at the end.

Flash Losses are common in Stocks

The same counts for stock investments as it is never 100% sure what the outcome might be as long unpredictable things might happen. And unpredictable things have happened in the past. The attacks on the World Trade Center and the very recent financial and economic crisis are just two examples that drastically hit the stock exchange and changed the rules of the game immediately. Investors had to face irreparable losses sometimes within minutes.

Risk Chases Quick Profit Avenues

Indeed, risk is involved in both ways that aim at multiplying ones capital in an ideally short period. But the investment broker seems to be left with more options than the gambler. Investments on the stock markets can be well informed. Experts in the financial sectors can observe financial flows and access statistics that document even the tiniest tendencies that might cause change. As long as the stock market investor keeps tracks on global developments in politics and economy, the risk he faces can be kept at bay. Gamblers, on the other hand, choose by intuition and gambling does not bear a hidden success strategy.

Another advantage of the stock market is the possibility of long-term investments. Even if the patient investor seems to lose contemporarily, his stocks might recover in the long run and leave him with a gain over time. In a casino, however, the money is gone as soon as the dealer ends the game. Attempts to regain lost amounts by investing even more money are mostly doomed to fail. Furthermore, gambling is highly addictive as the players always hope to win in the next round. Thus it is hard to keep track on how much you are investing.

Conclusion
On the base of well-informed choice making and a patient, deliberate strategy, the stock market investor can succeed to increase risks to a minimum. Although a gambler, after having been fortunate one, might take the money, gambling addictions have shown that the risk stays to be uncontrollable. In conclusion, the stock investor as well as the gambler should be aware of the possibility to loose and the necessity to back off early enough.
Read More:-
Common Investment Mistakes

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We can assist you in opening an investment account with a leading brokerage. Visit our site for latest reviews of offers and promotions from different brokers. Our blog section is regularly updated with informative write-ups for traders and investors.