Investment Articles

Pools are often an important consideration of any real estate buying decision. They are convenient and can add beauty and class to a home. Though you probably won’t have difficulty finding a home that already has this feature, you might also want to consider the feasibility of adding one to a property you really want to purchase, then rent or later sell if it is not already included. While pools are definitely an expense to install, you will find them well worth the effort, especially if the investment property is located in an area where summers are particularly hot.

Many families enjoy in ground pools during the summers and don’t mind the necessary upkeep. This is important to consider, especially if you plan to rent your investment property out to families. Even individuals enjoy pools so this may still be a selling point for some who have never had access to their own swimming pool. When looking for real estate, above ground pools are also a good choice. You will need to have enough room to install one which involves measuring your property and ensuring there aren’t power lines or trees nearby. You will also need to make sure you have a level piece of land on which to place the pool before purchasing it. When you are installing an above ground pool, you will need to think about the amount of space your Indianapolis real estate property occupies. Many of the above ground pools require enough room for supports and struts in order to keep the sides sturdy. Look at the weight of the water that is in the pool and you will see that it needs supports.

You will also need to have a power source for your pool. All pools will have filters installed and those filters will need to work in order to keep your pool from becoming dirty. This is why it is a good idea to install a power cable near your pool and change your filter on a regular basis. You will need to know when to turn it off for the winter season. This will keep it from becoming damaged during cold weather. You will also need to have a cover for your pool to keep it clean and secure. Pools are nice to have, but they can also have a bearing on the space and quality of your investment property. When you look at other options for your pool, keep this in mind. You want to have a pool that will be enjoyable to those renting or buying from you, thus making it well worth your while to have it installed.

Copyright (c) 2010 Jack Bosch

Jack Bosch has revealed where to find the best investment property just for you at www.landforpennies.com. You can get a free preview of Jack Bosch’s innovative course by visiting www.landforpennies.com.

It’s time to decide where to invest money and where not to invest for 2011 and beyond. The flow of money and the investment tide could be changing, so you’ll want to invest money with your eyes wide open going forward. Here we look at safe investments, stock funds vs. bond funds and gold.

What does the flow of money and a changing tide have to do with where to invest in 2011 or 2012? Where money flows in – prices rise. Where it exits from prices fall. In recent years gold has soared to all time highs. In the stock funds vs. bond funds arena investors have flooded bond funds with money inflows of hundreds of billions of dollars as bond prices climbed. Stock funds watched money run for the exits. There had been a rising tide in gold and bond fund prices as 2011 approached the scene. This will change if investors decide to invest their money elsewhere.

WHERE TO INVEST MONEY IN SAFE INVESTMENTS: Safe investments pay interest, and very little of it these days. If you see a higher interest rate on what appears to be a bank CD, look twice before you invest money. Make sure it is federally insured by the government because there are misleading imitations out there. If you have money in a retirement plan at work or with a life insurance company, check to see if they offer a fixed or stable account option. These safe investments often pay the best rate around. Do not invest money in the average bond fund if you need high safety. For 2011 and 2012, these are not necessarily safe investments. Go with safe money market funds instead.

WHERE TO INVEST MONEY TO EARN MORE INTEREST: For almost 30 years as INTEREST RATES FELL, bond funds were the place millions of average investors put their money to earn higher interest income, with relative safety. With interest rates near record lows the risk of owning these funds now somewhat offsets the potential rewards. Rule #1 in regard to bond funds: when interest rates go up, fund prices (values) fall. Rule #2: long-term fund prices fall the most. Do not invest money in long-term funds unless you are willing to bet that interest rates will fall further in 2011-2012. Instead, go with a mix of short-term and intermediate-term funds.

WHERE TO INVEST MONEY FOR GROWTH AND INCOME: In the stock funds vs. bond funds debate for 2011, stock funds are the favorite in the growth department. Bond funds are not growth investments. Frankly, I’d shy away from stock funds that invest your money in growth and smaller-company stocks that pay little or no income in the form of dividends. Instead go with general diversified stock funds that invest in large-cap company stocks that pay good dividends. It will be nice to have some dividend income in case the tide for stocks goes out. Consider putting some money in real estate stock funds for income and to add even more diversification to your portfolio.

In 2011 and 2012 the issue of where to invest money will likely focus on stock funds vs. bond funds. Gold is bound to be in the headlines as well. At over $1300 an ounce, gold has become a speculation. If you invest in gold keep one eye on the exits. The average investor needs to invest with a long-term strategy that includes both stock funds and bond funds. Go for dividends in the stock category and avoid long-term in the bond department. Invest money like the investment tide was ready to turn, because it could in 2011 if INTEREST RATES RISE.

Author and former financial planner James Leitz brings 40 years of investing experience to readers in his complete investing guide for beginners, INVEST INFORMED. Learn how to invest starting with investment basics in plain simple English. To get up to speed on both investments and investing money for 2011 and beyond visit Jim at http://www.investinformed.com now.

Many people think that they are good at managing their money. Experts also say that when they ask their clients, most of them are emphatic that they have made the right investments. This may be because they may be getting reasonably fair returns from the investments they have made. But, they do not know that things may not remain the same always. Only when a financial crisis occurs, these investors will realize that whatever “right” investment decisions they have made were wrong choices.

The truth of the matter is that you have to work hard and learn how to make investments. It is better you keep in mind the following few points:

- You should first understand that financial crisis may occur any time and you can never foresee it. What you should do is to reduce the impact it can make on your finances, should such a crisis occur.

- Investment is nothing but saving when you are spending. For taking the right steps, you need not learn the financial technicalities or jargon. You should move on the right track for which a financial planner may help you. Once you are on the right track, you can definitely have a good grip on your finances. Then, managing your investments will not be an issue at all.

- The first step you should take is to take an honest look at your credit card payments. You may not know that when you make regular monthly payments towards your credit card bills, you are paying more than what you should do. This means that you do not know where your money is going.

- For successful handling of your finances and investments, you should be clear about your goals. This needs planning. You should know why you are making investments. Having too many goals will lead you nowhere. If the goal is clear and if you split it into short-term milestones, achieving the final goal will be easy.

- Managing your finances involves your family members also. Therefore, once you learn how you should go about it, you should ensure that all your family members also learn whatever you have learned. This will help you in making the right decisions with their co-operation. Sometimes, you may have to cut corners and so, without their co-operation, you can not achieve your goal. Cutting corners does not mean you should not enjoy the small comforts and luxuries of life. The main point is that you should never squander money.

- Managing finances and making investments are dynamic processes. You should always be open to new ideas and options.

Managing finances and investments are not very complicated. If you focus on your goal and plan properly, you can move on the right track to success.

Raman Kuppuswamy has been writing articles on various topics for the last several years. You may kindly visit http://hubpages.com/profile/dreamdamodar and read the informative and interesting articles on various other important topics.

Having given due consideration to the strategies in Part 1, let’s now consider other tax effective investments to help children with the costs of higher education.

Trust Arrangements

In cases where the donor is confident that the child will have a mature disposition at age 18, a bare trust based investment will offer maximum tax efficiency.

Where more control is required over the investment so that there is, in effect, a “wait and see” approach before the child benefits at age 18, a discretionary trust may be more appropriate.

We will now look at these in more detail. Clearly, in either case, the underlying investment should be made to achieve maximum tax efficiency within the constraints of the required investment parameters.

It is not generally legally possible (although certain life policy exceptions do exist) to make outright gifts of assets to minor children and obtain a valid legal discharge. Indeed, it is not often advisable from a practical standpoint. For this reason trusts can be used effectively.

Two options exist:

Bare Trust

Here the donor could consider an investment into a collective investment (unit trust or OEIC) held subject to a bare trust for the absolute benefit of the child.

The advantages of this structure would be:

Income

Where the grandparent is the donor, income will be taxed as the grandchild’s. It is likely that the grandchild will be a non-taxpayer. This means that where dividend income arises, recovery of the tax credit on those dividends will not be possible and so, if this is of importance, an investment in corporate bond funds could be considered.

These generate interest distributions which are paid under deduction of income tax at 20% and this can be recovered by or on behalf of a non-taxpayer.

Alternatively, an investment in an offshore corporate bond fund could be considered. Here interest is paid
gross and so this will avoid the need for a reclaim of tax.

In cases where the parent is the donor of a bare trust for the benefit of his/her minor child who is unmarried and not in a civil partnership, then if the gross income on investments within the trust exceeds 100 gross in a tax year, it would be taxed on the parent. Therefore, if the parent is a higher rate taxpayer, it may be appropriate to invest in low yielding investments and concentrate an achieving capital growth.

Capital growth

Capital gains will be taxed on the child so this could be a useful way, through careful investment management, of using the child’s annual CGT exemption of 10,100 (tax year 2010/11).

Moreover, the annual exemption is not restricted according to the number of trusts created by the same settlor. Any gains that exceed the annual exemption in a tax year will probably only be taxed at 18%.

Where investment funds are held in a bare trust and being invested to assist with the future payment of university costs, the collective investment could be gradually encashed over three or four years. The child could draw down on the investment from age 18 and, provided capital gains fall within the annual CGT exemption, in effect enjoy a tax-free stream of capital payments.

Another investment that could be held in a bare trust is a single premium bond. H M Revenue and Customs now takes the view that where chargeable event gains arise on single premium bonds heldsubject to a bare trust, they should be taxed on the beneficiary.

The exception to that is in cases where the beneficiary is the settlor’s minor unmarried child not in a civil partnership where the “100 rule” applies (ie. if gross income exceeds 100 in a tax year, it is taxed in full on the parental settlor). However, this rule doesn’t apply with a grandparent settlor or a parental settlor once the child attains age 18.

Therefore, if full policy/segment encashments are made from a bond, chargeable event gains may well count as the child’s income and so, provided the child is not a higher rate taxpayer, in effect provide a series of tax-free payments.

To facilitate some tax-free encashments to fund the costs of pre- university education the 5% (tax-deferred) annual allowances could be used in the knowledge that on eventual encashment after the child had attained age 18, a tax charge is unlikely to arise. Of course, tax (while important) should not be the only determinant of underlying investment strategy.

Investors should always aim to strike an appropriate balance between investment suitability and tax efficiency – ideally achieving both.

Gifts to bare trusts are PETs and so no immediate IHT would arise. Indeed, they will be totally free of IHT if the donor survives for 7 years.

Discretionary / Flexible Trust

A discretionary trust would give control to the trustees to determine who should benefit from the gift and when. This means that if the child does not have a financial need at age 18 or is not responsible enough to receive cash at that time, the release of benefits could be held back until a later date.

Aside from the 1,000 standard rate band, trustees of discretionary trusts are charged to income tax as if they are additional rate taxpayers. Since 6 April 2010, the tax rates on income above this band arising to discretionary trustees are 50% (42.5% on dividends) regardless of the trust’s level of income.

This means that in cases where a grandparent is the settlor, it may be appropriate for the trustees to distribute income to a grandchild beneficiary who is a lower or non-taxpayer in order to recover the additional rate tax paid by the trustees.

Indeed, in these circumstances an interest in possession trust that gives the grandchild a vested right to income but with the trustees having the power to appoint capital may be attractive as this will avoid the beneficiaries having to recover income tax that the trustees have already paid.

In cases where the settlor is the parent of a minor unmarried child beneficiary, it should be noted that
the “100 rule” can apply. This means that if more than 100 of gross income in a tax year is paid out of the trust to the minor child beneficiary of the settlor, it will be taxed on that parental settlor.

Another planning point to consider, where appropriate, might be to trigger the “settlor-interested trust
rules” by including the settlor’s spouse in the class of beneficiaries. This would result in the income being assessed on the settlor which would lower the tax rate provided the settlor is not an “additional rate” taxpayer.

Two types of investment may be appropriate for the trust.

Collectives

If income was not to be distributed it would generally, from a tax standpoint at least, be best for the trustees to invest for capital growth, for example in collectives. This will enable them to use their annual Capital Gains Tax exemption, which is normally 5,050, with excess gains only taxed at 28%. However this investment strategy may introduce an increased level of risk into the portfolio.

Should an adult grandchild have a need for cash at or after age 18 in circumstances which would mean the trustees would have a likely CGT liability, the trustees could make an absolute appointment of benefits to the grandchild and claim CGT hold- over relief. This would mean that the gain would effectively be transferred to the beneficiary, who would have his full annual CGT exemption (10,100) to offset against
any capital gains that arise on subsequent encashment.

Investment Bonds

Alternatively, (and especially if the settlor-interested trust or gains oriented collective strategies were not possible or appropriate) in order to avoid the high rate of tax that trustees pay on trust income, the trustees could invest in single premium bonds.

In such circumstances, any chargeable event gains (which will include reinvested income within the bond) will automatically be taxed on the settlor if he/she is alive and UK resident in the tax year in question.

Their top rate of tax may well be lower than that of the trustees. Otherwise, chargeable event gains will be taxed on UK resident trustees at 50%, with a 20% tax credit available in respect of chargeable event gains arising under a UK bond.

A UK single premium bond could thus be a particularly tax attractive investment where there is a desire to invest for growth from reinvested income rather than capital gain.

In cases where the trustees wish to encash the bond to realise cash to make a payment to an adult beneficiary to fund university costs or assist with a mortgage or wedding costs, thought could be given to making an appropriate appointment of capital, and then the trustees assigning the bond to that adult beneficiary.

That would not in itself trigger a chargeable event but future chargeable event gains on encashment of the bond will be taxed on the beneficiary at his/her tax rate which will hopefully be lower than the rate paid by the settlor/ trustees.

Gifts to discretionary trusts are chargeable lifetime transfers but an immediate IHT charge would only arise if the settlor exceeded his nil rate band (on a seven year cumulative basis).

Whilst ten-year periodic charges can arise, these are only likely to be an issue if a substantial amount was being placed in trust which is fairly unlikely in these cases.

The Financial Tips Bottom Line

Children will need help in later life to meet a number of financial commitments – be it university costs, assistance in buying a house or funding the costs of a wedding. All of these costs can be expected to increase in the future.

Unless large sums of capital are available, the only realistic way of financing these costs is for a parent or grandparent to set up an advance programme of saving.

The demise of the Child Trust Fund means that Government help will not be available in the future.

All parents and grandparents / guardians need to be aware of tax-efficient investment products and, where appropriate, trusts to maximise the returns available for the child. Where trusts are used, these can enhance tax efficiency and the trust selected can be tailored to meet the parent / grandparent’s and child’s circumstances.

Ray Prince is a fee based Certified Financial Planner with Rutherford Wilkinson ltd, and helps UK Resident Doctors and Dentists plan to achieve their financial objectives. Just visit http://www.medicaldentalfs.com where you can request your free retirement planning guide.

Rutherford Wilkinson ltd is authorised and regulated by the Financial Services Authority.

There are tremendous benefits to asset allocation and there is no denying it. The problem is these benefits are the exact opposite of what adherents and proponents of asset allocation consider them to be. In other words, if you utilize asset allocation (AA) as your investment strategy, it won’t work. The way to derive benefit from asset allocation is to do the opposite of what this theory suggests.

There are two basic tenets of AA: 1) individual investment selection does not matter, and 2) the timing of investment does not matter. (Don’t blame me – these are not my ideas, nor are they my strategy!) What asset allocators say matters is time in the market AND that you invest in the correct sectors and asset classes.

What this means is that asset allocators give no regard to what specific investments are purchased and it does not matter when investments are made. What this means is adherents to AA are frequently purchasing things for no business related, fundamental reason and they are selling things for no business related, fundamental reason. What this means is there are frequently mis-priced assets in the market. Whenever there is a disparity between price and value, opportunity for profit exists.

This creates a set of circumstances where good assets are, at times, priced below what they are worth, creating an opportunity to buy at reduced risk and with the potential for increased return. It also creates situations where assets are overpriced, creating opportunities to sell at prices above actual value. This also increases returns for the investor who purchased an asset early on in the price cycle.

The vast majority of investors seeking financial planning assistance are sold advice that is based solely on the principles of AA. Unfortunately, AA is a failed theory that compromised billions, if not trillions, of dollars of investments over the last three years.

The way to benefit from asset allocation is to recognize that those who practice and sell it, create real opportunity for investment profits, but only for those who don’t use it.

Need a new (and effective) strategy? dana@thebarfieldgroup.com

Dana Barfield is the president of The Barfield Group, a boutique financial advisory firm he founded 20 years ago, that since inception has provided industry leading advice to business owners and investors. He writes frequently on a variety of subjects including business ownership, investment/retirement, widows, politics, economics and life. The point of all Dana’s writings and work can be summed up in three questions: What is, has, or will happen? What does this mean and why does it matter? How should we respond as a result? View his other writings and contact him through http://laurusjournal.com.

How to tell a difference if Your Broker is a dealing desk (D.D) or non-dealing desk (N-DD), especially when all dealing desk brokers claim that they are non-dealing desk?

Most Traders are not realizing that their success in trading currency markets is depending on their sponsoring broker. There is an “artificial market” that has been creating and fully controlled by most of very well branded brokers that claim that are Non-Dealing. Many of us that trade through for example FXCM, IBFX, FXDD, FXSol, Gain Capital, Investtechfx, Alpari and many many more, are trading in Artificial Market. Due to broker’s full control over every traded transaction the “Artificial Market”, the odds are stacked against us more then playing black jack in casino. Imagine, the dealer/broker can not only see his hand bat also yours and if he doesn’t like his cards he can sneak another one from time to time. Find broker who is offering “low leverage”, brokers that offer 300:1 or 500:1 leverage have very “unique business model” – transferring money from clients accounts to their own pockets, they are not there to look after your interest, you need to remember Dealing Desk is there to take trades against you, they sell you when you are buying and buying when you are selling, they make an impression that you are transacting with “interbank” but in reality orders ends up on a Dealing Desk of a Broker. Dealing Desk Brokers DO NOT like or even ALLOW for scalping the trading.
 
The D.D Brokers spike rates to take out trades when it suits their purposes.

Now listen to this very carefully -

D.D Brokers “SPIKE THE RATE” of up to 10-20 pips on routine bases to fill “unbalanced” trades, leverage their own account or to meet immediate liquidity requirements. I hope one day NFA or FSA will start indicting those “branded” brokers for manipulating rates to their own advantage and ripping their trader’s accounts.

Red Flags Dealing Desk A

1. “Scalpers” are not welcome, or charged a FEE for Scalping

2. Offering FIX SPREAD and/or LOW SPREAD (0.5pip, 1pip…)

3. Delayed Execution of your ORDER

4. Offering Leverage 300:1, 400:1 even 500:1

5. Slippage at closing positive trade

6. Limiting Stop Loss at 10 or 15 pips
 
ADVANTAGES OF THE NON-DEALING DESK

1. No Inherent Conflict of Interest. N.D. D. brokerage firms do not trade against their clients. As facilitators of trading, they do not take positions that may from time-to-time conflict with the interests of individual traders.

2. Market Access. STP (straight through processing) N.D.D. brokers offer every trader, no matter of a size, equal access to the interbank market. The rates (bid and ask prices) are not set by an individual broker but those derived from active trading between participating banks, institutional investors, FCM’s and individual traders. The process itself makes every trader regardless of size an independent market maker.

3. Anonymity: Trading is done in total anonymity – the N.D.D. broker does not know or have a need to know your positions so stop loss orders are not/cannot be targeted for takeout when a broker has a need to meet liquidity requirements.

Pricing Intervention (Bias). N.D.D. broker rates as well as bid/ask prices come directly from the interbank system. They are not filtered or otherwise manipulated to maintain established (undisclosed) profit margins or spiked by the broker to gain a trading advantage.

Transparency. No games No gimmicks. What you see is what you get, dollar in dollar out – Straight Through Processing (STP)

Spreads are Variable, Not Fixed. The Forex is an extremely liquid market. Spreads are in a constant state of flux and when traders trade through a STP non-dealing desk their tickets are cleared through BBO model Best Bank Offer.

During peak trading hours, spreads can drop to zero, a fact most traders using a dealing desk are not aware of. During off-peak hours, spreads can be considerably higher.

Straight Through Processing /Non-dealing desk brokers don’t offer or execute trades based on fixed spreads. They charge a nominal transaction fee. Such is not the case with the dealing desk broker. Whether interbank spreads are high or low, they just boost their rates to guarantee the profits they have imputed in their fixed spreads. They also generate an undisclosed amount of income trading against their trader clients.

If you want to trade with THE NON-DEALING DESK. broker visit http://www.vertifx.com/.

By now you’ve probably heard that North and South Korea started shooting at each other – which served as a reminder to me (and I hope you as well) that what we call “the economy” is no longer a US economy. It’s a global economy, and it becomes more and more global every day.

Soon after the Korean event, the Dow dropped 150 points in one day. But the irony is, the very next day, the market closed up 150 points.

What that tells me at least in the near term; is that there hasn’t been much of an impact from what’s happening in Korea. There’s also been additional volatility connected to concerns about the debt levels of various countries across the world.

Unfortunately, no amount of planning can ever take into account what we call “life events.” “Stuff” that comes at you from left-field, that you just can’t fathom or factor into a planning scenario.

After all, who on earth ever would have thought something like 9/11 could possibly happen before it happened? The bottom line is, we still live in a world of uncertainty. Which means when it comes to your investment strategy, you need to have to have a strategy or game plan that you have faith, trust and confidence in.

At the same time, you must remember that no investment strategy, even ours, is perfect. But you have to be able to trust that strategy when the unexpected happens.

The problem is, without a plan and absent an investment strategy you have trust and confidence in, your emotions do take over, especially when you’re in a heightened level of stress and anxiety. And when emotions take over they tend to lead to poor choices and poor decisions.

So it’s best to have a system in place NOW that you have trust and confidence in, whether it’s handled by a trusted professional like me or your own system. That’s really one of the central guiding posts of all successful investors. If you look at people like Warren Buffet, they all have a system that they have trust and confidence in, even when it temporarily makes them ‘look stupid’.

I remember back in the internet.com heyday, Warren Buffet was criticized and chastised when he didn’t buy the first Internet stock. He was made out to be a sort of “industry tool” who was past his prime, not keeping up with the times. But he stuck with his system. And even though on a short-term basis it made him look ’stupid’, look where he is today–right back on top.

So when it comes your investments, you need to have a system that you have trust and confidence in. Because unfortunately, there will always be periods of uncertainty.

Events you can’t predict are going to pop up out of nowhere. That’s when you have to have a solid investment system that you trust. Because that will see you through the uncertain times and keep you on solid ground.

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

What exactly is the “gold standard?” This term refers to a system in which all forms of legal tender are based against a weight of gold. This type of monetary system uses a fixed price of gold as a comparison for currency and bank deposits. There are three different types of gold standard systems that have been used since the 18th century, which include gold specie standard, gold exchange standard and gold bullion standard. Each is slightly different and has played a different role in history.

1. The Gold Exchange Standard

With this monetary system, the less precious metal coins are used as the standard. These metals include silver. Those implementing the system have usually decided upon the exact exchange rate with any country using gold standard. Before 1900, any countries that were using silver standard began switching their currency units to the gold standard that was being used in the United States or the UK. Examples of countries that made this change include the Philippines, Japan and Mexico, who each valued their silver currency units as 50 cents per US dollar.

2. The Gold Bullion Standard

The most common form of gold standard is the one based on the price of bullion that is based on worldwide demand. Since 1925, this method has been commonly used, as the British Parliament declared the gold specie standard to be void. Because of the large volume of bullion that was shipped out of the UK after that, this gold standard was ended as well. Countries that use gold standard are somewhat insulated against having governmental inflation of prices because of excesses in paper currency. When the exchange rates are fixed, then international trade is more certain and more fair.

3. The Gold Specie Standard

This type of gold standard is related to the actual gold coins circulating worldwide. Each monetary or currency unit is based on the actual denominational value of one denomination of gold coin. Gold coins that are made from other metals mixed with gold are also considered.

Since the medieval empires, the gold specie standard has been commonly used, though not always formally recognized. The British West Indies use this system in their modern currency based on the Spanish doubloon coin. In the United States, the gold specie standard was adopted in 1873, with the Gold Eagle coin as its unit.

Unfortunately, the gold standard can sometimes affect monetary systems and policies and make them less effective when any attempt to stabilize an economy is made due to recession or slowing of economical systems. When the amount of gold determines the amount of money in the world, then the gold standard can affect international economies adversely.

I’d like to invite you to view more articles about precious metals and coins and download a free ebook. J. Mark Heppard is a reputable coin and precious metals dealer and expert based in Metro Detroit. Visit the website for more information, articles, resources, and tips on how to collect, buy, and/or sell collectible coins and precious metals. http://www.SellMeCoins.com

In this quick little guide we’ll go over the basics of a sound, successful investment strategy. I’m going to describe to you the few key points that will help protect you from downturns, and keep your investments safely rising in almost any market.

The first thing we have to do is understand the difference between speculation and investment. They should never be mixed up, and they are very different from each other.

An investor is someone who entrusts some vehicle of the market, be it in the form of stocks, bonds, private investments, or something else to grow his or her money through genuine value growth, business planning, or sound financial management. When an investor hands their money over to a third party he´s doing so after having considered the risks and benefits, and after having taken a good look at the fundamentals and numbers behind a given company or other investment opportunity (e.g: Government Bonds). In essence an investor makes educated decisions and allocations that are based on tangible probabilities.

A speculator speculates: taking risks based on guesses, gut feelings, and trends in the general market that may not have any specific connection to a particular asset. Speculation is basically an attempt to outguess or even predict the timing of market movements.

Bearing these differences in mind, let’s proceed to some basic rules of sound investment management. These mostly apply to stocks, but we’ll finish with a bit said on other kinds of investments.

First Rule: Never get confused

The first rule is that you should never confuse speculation with investment. If you don´t have a very clear series of reasons for trusting the inherent value of the company behind a stock over the long run, then don´t buy into it if you want to call yourself an investor. If you’re investing in the company behind a stock, giving it your money to use for what you think will be carefully planned growth, and intending to keep your investment as part of a planned strategy for a long while, then you may call yourself an investor. If you’re trying to outguess the market, time the movement of stocks, and making hunches based on what’s in the news, then you’re speculating.

Second Rule: Don´t bet the college fund

Never speculate with money you cannot afford to lose. Speculating is fine, it can be fun, and if you’re lucky you might have some great successes, but mostly it depends on pure luck. Are you willing to bet the assets for your future and your children’s futures on pure luck? Probably not, so reserve your speculating only for the money which won´t cause a financial catastrophe if it burns away. Do this by creating an entire separate portfolio for speculative investments and keep the money in the form of liquid cash until you’re ready to make speculative moves.

Keep your speculative actions and the decisions behind them entirely separate from the reasoning that leads your investment actions. The two should not be mixed together at all.

Third Rule: Your real investments

Separate your real investment money, which should always make up the majority of your available assets, and put it into yet another fund. This fund must have nothing to do with your speculation fund, and should be designed in such a way that it can be left unsupervised without worrying about how it will do. Your investments are what you’re depending on for your own, and maybe even your children’s financial security, thus they have to be very reliable. So reliable that you could walk away from them for months at a time and not worry at all.

Fourth Rule: True diversification

Make your investment portfolio diverse. Now, a lot of people view diversity as selecting a few stocks from each of a whole array of companies, or maybe buying into the S&P 500 or DJIA stock indexes. This is a mistaken assumption, and although it protects you from the downs of individual stocks, it doesn´t protect at all against the collapse of the entire market. Sometimes nearly every stock goes downhill, and the very few that don´t are impossible to foresee. By diversification, I refer to something far more genuine and secure; real diversification.

Fifth Rule: Five Steps to safety

Diversify for real, and create far more financial security. A truly diversified and secure investment portfolio is made up of several pillars, each consisting of a totally different kind of asset. Thus, break your available investment capital four or five different ways evenly (e.g.: 10,000 being split into five quantities of 2000 each). Having done this, invest one part into stocks (especially stocks that are volatile, with good earnings and revenue fundamentals and without debt far in excess of assets); one part in precious metals, especially gold and silver; one part in bonds, especially long term bonds which come from an issuer that is as unlikely to default as possible; one part, perhaps, on real estate in markets where prices are not far in excess of reasonable for the size of the property. Finally, keep one part in the form of cash or equivalents: assets such as U.S treasury bills, money market accounts, or the foreign currency of a low debt, financially stable country.

Now that you have the five parts of your genuinely diversified portfolio set out, you can rest easy knowing that no matter what happens in the markets, short of an asteroid impact or global nuclear exchange, you will do well over the long run. This is because in any market; deflationary, inflationary; recessionary, or bullish, at least a couple of your pillars will do well, balancing the whole out over the long run. Now it´s time for the last rule, adjustment.

The Sixth Rule: Adjustments

You have to adjust your portfolio periodically. The best option would be on an annual basis. As the portfolio matures, certain assets will sometimes grow much faster than others, thus the stock component could wind up making up say 50% of the total value. This once again destabilizes your growth and creates too much volatility. Thus, every so often, take whatever has grown to beyond 20 or 25% and sell off the excess, redistributing the windfall amongst the others evenly. Do the opposite if one has dropped particularly after the same time, add enough to increase it back to 25%. This way you would be systemizing the principle of buying low and selling high on an annual basis, while also keeping a percentage of the growing or declining asset pillars for the possibility of their even further growth.

These are just some basic rules, and there are many others which could also be tried and found to work better, at least for the short run. However, with the portfolio rules described above, you’ll at least be providing yourself with the security of a very stable and problem resistant investment program. This is exactly what you need if you’re sincerely keeping your long term future in mind.

Many people earn a living solely on doing foreign exchange. After living a life of working for a corporate company, they take a chunk of their money and invest it on the forex market. Some fail, but those who succeed can easily live off the profits that they make. Most of them work in the comforts of their own living rooms, with a TV tuned in to a channel that features the different market trends that occur, some have mobile phones ready on one hand and a telephone on the other, while some have laptops opened that feature trading robots.

The best thing about these trading robots is that they can easily make money for you while you sit idly in front of a computer screen. Not only can they predict market trends, they can also easily guide you to financial success. Forex Trading Systems is their forte, and if you are a novice, they can easily tell you what you need to do in the field of foreign exchange.

Forex, also known as the foreign exchange market, is not just any ordinary market where you buy your daily goods. It is a market where the exchange of money is done using different currencies such as the European Euro, the Japanese Yen, the British Pound, and even the dollar. This is where two different currencies are paired up. An estimate is made to gauge the fluctuating market, and based on the market, the currencies will either be sold by an investor or more will be bought. This is the only market in the world that never sleeps day in and day out, since as one market closes on one part of the world, another one opens. This is one reason why trading robots that are able to work 24 hours for seven days are essential.

Trading robots are slowly taking the jobs of professional traders that are hired to do transactions. These robots are made to take into consideration factors that are not in the domain of finances such as politics, current events in potential countries that you may want to invest in, as well as socio-cultural events.

The good thing about these robots is that they can easily predict market trends easily, which will serve as a good thing for those who are still starting out with foreign exchange. These trading robots can make trading easier, and they can even be programmed for the different preferences of different traders. Indeed, the thing they all have in common is that they are all machines, and that the choice of what the investors will buy or sell will still rely on their own financial strategies.

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Are YOU ready to fight for your future?