Investment Articles

ETF’s (exchange traded funds) are the fastest growing investment vehicle right now. And there a good reasons for this. Whether you are investing through your Roth-Ira or playing the stock market with a brokerage account, you might want to consider investing in ETFs. ETFs are one of four main ways to invest in stocks, the other three are individual stocks, mutual funds and index funds. Let’s dive into the details.

So what is an ETF anyway?

ETFs are extremely similar to mutual funds. The most notable similarity between ETFs and mutual funds is that both are made up of numerous market stocks. Conventional mutual funds do not trade throughout the day, whereas ETFs do. Why would you care? Well, it gives you an added degree of flexibility to trade throughout the day. With a mutual fund, you can only make a move at the end of the closing day. With an ETF, you can trade at any time you choose while the market is open.

On fees for ETFs…

Although ETFs charge a management fee, fees for ETFs are significantly lower than mutual funds or even index funds. Look into mutual funds and you’ll start to realize the exorbitantly high fees. With an ETF, it’s typical to only pay between .1% and .7% of your total assets. This is music to an investor’s ears if he/she is “cost conscious.” Personally, I am fundamentally opposed to paying fees higher than .5%. I mean, think about it, you wouldn’t want to throw money down the drain would you? Over the long haul, fees can nickel and dime you, and eventually take a significant portion of your retirement portfolio. ETF’s are also more tax efficient than mutual/index funds.

Greater investing flexibility.

Unlike most index funds or even mutual funds, ETFs do not require an initial investment. This is a selling point, especially for young investors. I, for one remember being in college and wanting to invest and realizing that most investment choices required an initial amount. As an example, the index funds that I hold within my Roth-Ira require an initial investment of $3,000. As a poor college student, it’s hard to meet this initial requirement. That’s where ETFs come in.

Diversify, diversify, did I mention diversify?

You can pick up a couple ETFs and cover all your market segments. You can protect yourself as well as make some solid gains in the market. For example, you can split $1,000 across large cap stocks, small caps, emerging markets, REITs and bonds. You pay a nominal fee for this exposure and flexibility. Unlike a mutual fund, you can control overlap within your ETF choices.

So, where can I buy ETFs?

Pretty much anywhere really. Whether it’s a Roth-Ira, 401k, individual broker account, it’s up to you. I recommend Vanguard for starting out with your ETF investment purchases. Vanguard offers unlimited free trades for ETFs, so this is a no-brainer. Sharebuilder, TDAmeritrade, and TradeKing are also great choices. Although ETFs are a great investment choice, make sure to do your own research. Go with reputable funds with long standing performance and low fees.

http://www.freemoneywisdom.com

Small Investment, Big Gains

As a small investor has limited funds when compared with corporate and institutional investors, there are many commodities and stocks that are out of reach because of the immensely high prices they sell at. A CFD trade requires an outlay of just a fraction of the total investment value. This advantage lets small individual investors with limited funds take big positions in the market.

For example, investor S prefers to trade in shares directly. He buys 100 shares of company C at £50 apiece bringing his total investment to £5,000. Investor C has a much more limited budget. He takes a long position on CFDs of 100 company C shares. His broker requires that he maintain a 5% initial margin. So, his initial outlay is 5% of £5,000 which is £250. Interest and maintenance charges do apply on investor C’s investment, adding to his costs but still his total investment cost does not come anywhere near investor S’s £5,000 investment.

The price of the share zooms up to £100. Now, investor S stands to gain £10,000 if he sells his shares in the market. The total gain he will make from the transaction is (£10,000 – £5000 =) £5000. He has doubled his original investment.

Investor C can close his long position in the share and get the change in price for every share he has a CFD on. His broker pays him £50 (change in price) x 100 shares = £5,000 when he closes the trade. Although investor C gets the same sum total from the transaction, his profit is £5000 – £150 = £4850. He has multiplied his initial investment many times over. Although interest, commission and fees are deducted from this amount, investor C has still made a far more profitable transaction than S.

Avoid Stamp Duty

As there is no physical exchange of assets, the CFD investor avoids stamp duty that applies on regular share purchase and sale. When the exposure is high, this translates into significant savings for the investor.

Flexibility to Switch Quickly

CFDs give the investor great flexibility to switch from non performing investments to potential winners quickly and with less cost. Global interbank rates are now low and this has made CFD trading a much cheaper option than before. In fact, when calculated for the short term, holding a position in a share through CFDs is much cheaper than actually owning the shares. This is in spite of the charges, commission and interest levied from investor accounts by CFD brokers.

CFD trading online can result in very profitable investments, provided you know when to invest in them and when to pull out. By keeping your finger on the pulse of the market, you can succeed with contract for difference trades and make attractive returns on your investment.

Having become disillusioned by the small amount of interest rates that my local bank was paying me, I decided to look for an alternative. Having done a thorough research I settled for One Year Investment Bonds. I also learnt about the risks that are involved in investing in bonds and therefore I decided to diversify my portfolio. Apart from the federal government’s bonds I invested in Blue Chip companies.

After choosing the companies that had a solid financial record over the past few years I visited my local stockbroker to help me make my investment. I was advised to invest in a mutual fund since I did not have enough money to make the initial investment that was required. Some bonds will require on to invest $1000 or even $5000 and these large sums of money do not grow on trees. Some mutual finds specialize in investing in bonds providing bond funds for people with limited budgets like me. I also decided to buy federal government bonds through the Treasury Direct website. I bought these bonds through the internet and without the help of a broker.

These benefits of these bonds are that they are low risk savings and they are easy to convert to cash. They also earn great interest rates enabling me to enjoy a great lifestyle. These bonds are also available in electronic form. I am able to buy, manage and redeem my bonds through the internet. There is also a new program at Treasury Direct known as the Smart Exchange that allows bond owners to convert their paper bonds to electronic securities.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program. ( http://www.onlinewealthking.com )

Investors are always looking for the most effective ways to invest their money. In case that you do not know it, big Funds represents one of these methods. Understanding Hedge Funds is something that you should consider prior to investing your money in this mechanism.

One of the procedures, which are covered by selling short stocks while acquiring long stocks. This operation is actually the basis of these funds. Understanding Hedge Funds actually means that you have to master this technique, knowing at all times what kind of operations you have to complete to get the results you expect.

However, only understanding Hedge Funds is not going to help you to get the expected results. In order to obtain a high return of investment, you have to invest much more money than you would do in common stocks. This way, these big Funds can be considered as a mechanism that guides investors in making profit, especially in high-risk investments. In addition, understanding Hedge Funds also implies a technique called leverage. This actually means that the capital from investors is combined with the money borrowed from a bank.

The fee that is associated with these big Funds wears the name of incentive fee. Understanding Hedge Funds actually means to also comprehend that the incentive fee is not based on a percentage, as many investors expect, but on a part of their profits. This fee is re-invested with the intention of making even more money.

Another important thing related to understanding Hedge Funds is the fact that the investors need to meet the minimum initial investment criterion. Without having the necessary funds, they cannot obtain their own Hedge Funds. In addition, you should know that making profit from hedgers and big Funds is all about timing and planning. And one of the best times you should choose to invest is especially when a company merges with another one.

Want a looking glass into the future? World Recognized for their past trend forecasts and accurate stock market calls, Forecast For Tomorrow provides regular updates to help you make BIG profits in any economic climate. Get tomorrow’s news today, Visit http://www.forecastfortomorrow.com

Knowing and understanding your risk tolerance is a part of figuring out your investment style. There are a number of other factors to consider apart from your risk profile and these are your age and your investment time frame.

The sort of investing that you do will depend on your goals and your need for either income or growth. It is also dependent on your understanding of money matters and the time that you are able to devote to your investment strategy. There are different questionnaires that will help you identify your personal tolerance to risk.

I have seen it written online that saving for retirement in your twenties means taking on a conservative or moderate style of investing but I disagree with this. If you are 20 and saving for retirement you will have about 45 years to invest and to my mind you can afford to take on more risk as you have a longer period to recoup losses. You are also more likely to be investing by drip feed which can be beneficial with the concept of dollar cost averaging — a 20 year old can be more than a conservative investor. After all a conservative investor wants to keep their initial investment intact — if $5000 is invested they want to make sure that they get that back.

By the same token I have seen articles suggesting saving for a house in a year or two and taking on an aggressive approach to investing. This to me is madness as in the short-term share markets are very volatile and you could lose your deposit when you need it most. To my mind this would be a speculative style of investing.

An aggressive investor is willing to take risks that others wouldn’t be willing to take and invest larger sums of money in riskier strategies in the hope of achieving higher returns. An aggressive investor will often have most of their investments tied up in the share market.

For those approaching retirement it is more likely that your style would be changing from an aggressive, balanced or moderate investor to one that is more conservative, or even defensive. This is a time in life where you will want to start conserving your money for the years ahead and your funds to be there to cover your living expenses. This does not mean investing totally in income bearing investments because everyone needs a component of growth to ensure that their funds keep up with inflation.

If you are unsure about figuring out your investment style and the places you should invest it would be worthwhile speaking to a Financial Planner.

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.

In the world of investments, there are soft asset investments which are things such as cash and bank documents and there are hard asset investments such as land or gemstones. Hard asset investments are those tangible investments that can be held or touched, that are right there in front of you. If you are considering investing in gemstones, it is wise to consider that such an investment is not one for a fast return, but more of a long term investment. Gemstones are first and foremost a hobby or a collector’s item to be enjoyed. It takes quite a few years for gemstones to appreciate and rise in value to provide a significant return on your initial investment.

Gemstones are gaining in value these days due to the fact that the supply is limited, for many mines have been depleted of their assets. As a result, the prices of gemstones have risen steadily, for they always maintain their worth as time goes on. If you enjoy precious gems, enjoy looking at them and collecting them, investing in gemstones might be a place to put some of your interests. Gemstones can be collected raw and uncut or they can be cut, polished and mounted in various pieces of jewelry.

Buying gemstones that are rough and uncut is the best way to get the most for your money. If you take those rough gemstones and have them cut and mounted into beautiful pieces of jewelry, they will bring a much more lucrative return than just selling them as uncut gems. The market for rough, uncut gems is bigger than the market for gorgeous jewelry, so a buyer for the jewelry might take longer to find. But it is definitely well worth the wait, for gemstones done this way do bring more return on the investment. More cash up front.

Most of those people who are investing in gemstones are collectors. They enjoy looking at their gemstone collection and enjoy showing it off to others as well. Gemstones are not an investment opportunity for the get rich quick set, but more of a long term investment for a collector who wants to enjoy his or her investment. That being said, over a period of years, the gemstones do appreciate and will bring about a nice profit eventually. This is evident most of all at estate sales when survivors decide to sell Great-Uncle Harry’s private gemstone collection that has appreciated over time and brings a nice sum to the estate.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

In this tumultuous economy there are many unconventional methods of making a profit including investing in tax lien certificates. With so many foreclosures occurring all over the country, these are becoming increasingly lucrative and safe ways to make a profit. There are several reasons to consider branching out your investment portfolio with this method.

One of the allures of purchasing tax lien certificates is that there is generous collateral in the case of a default on payments. If the owner of the property fails to make the required payment (which includes the interest that can potentially increase after the initial year) the certificate holder may have the right to the property or to the profit made at an auction. Sometimes these foreclosures can happen quite suddenly and you might see a very large return on a small initial investment.

While a bit more of a risky endeavor, if you are seeking to buy your own home, tax lien certificates can be an inexpensive option. In the very least you will end up with some interest on your investment, but with so many foreclosures happening across the country, it is not all that unusual for property owners to simply walk away, leaving their property for the lien holder to collect. Yes, you can actually buy a house for the cost of any outstanding taxes. It isn’t the wisest reason to go into collecting these types of certificates, but it certainly has been done successfully before.

Great profits can be had through purchasing these types of certificates, but there are also some risks involved. Don’t rely on this method as your own only investment. While it is a great way to diversify and take a chance for some big returns, there are also some sluggish interest rates. When choosing tax lien certificates, you receive little information about the property itself and may be going by a few pictures or just a simple description. A crumbling shack in the middle of nowhere that isn’t worth the materials it took to build it is certainly not going to make a good financial investment. Probably the biggest mistake any first time investor makes is buying a lien on a property that is vacant and overall useless. In these cases, the government often can’t be bothered to foreclose and the owners don’t care enough to pay the tax, leaving you stuck with nothing.

To help you make better choices, learn a bit about the real estate and property market in the area that you are considering purchasing tax lien certificates. Check the foreclosure rates as well as how many homes are selling. If your ultimate goal is to get properties that are on their way to auction to turn a quick profit, it won’t be very helpful is no one is currently buying real estate in the area. Many states also have highly variable interest rates and regulations regarding what you are entitled to as the certificate holder, so a bit of research will be invaluable.

If you are interested in tax lien certificates you should consider the assistance of professionals to help you with decision making. To learn more, visit: http://www.civicsource.com/

Startup companies come and go. In this fast paced society, only the strong and well-funded survive. A start-up company is just what it says, a company that is just in its beginning phases. Realize that while investing in these companies can be lucrative for investors, it can also be quite risky. Many companies fail within the first year, whether traditional bricks and mortar companies or online ones. Unfortunately, there is no way to tell on paper which ones will succeed, which ones will fail and which will make you the next dot com millionaire.

Investing in these companies can be done alone, as the primary investor or as a silent partner. This, however, requires you to have your eyes and ears open and to be actively searching out people who have a great idea or invented a unique product and want to start a business. Unfortunately, it also requires you to know where to look, which can be labor intensive. As an investor, you may have a day job and not have time to do hours of research and legwork just to find your next deal.

Many investors choose instead to work with venture capital groups. A venture capital group or a venture capital company pools the money of several investors together to fund the next big idea. It also allows you to invest in more expensive companies by joining several other investors. More importantly, working with other venture capitalists gives you access to a fund manager, who does all the research, negotiations and analysis in order to protect your money and ensure that it is invested in a sound business. Do not just hand your money over to the fund manager. Study each suggestion well and do your own research.

In the excitement of the dot com boom several years ago, some investors got caught up in the frenzy and invested their money in startups destined to fail. Usually, members of venture capital groups have the same goal for the future, to get in on the ground floor of a company and reap the rewards.

Investing in these type of business also requires patience. Waiting until a company turns a profit can happen immediately but, more likely, will take many years. Pulling out your support too soon can rob you of unexpected profits; yet, pulling out too late can cause an investor to lose their initial investment. And, while it is possible to fund a startup on your own, investors should stick with the convenience and relative safety of a venture capital group for their investment strategy.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

Hedge funds are investment funds that are managed by an investment manager or broker. Private money is pooled together and invested according to a specialized strategy that takes the group members goals and preferences into consideration. For example, if the group prefers to be aggressive about making money, then the investment manager may invest in companies or assets that come with higher risks but offer higher payouts. These funds are generally limited to a small group of people and have a minimum investment amount of at least $10,000. This begs the question of whether investing in hedge funds is right for you.

The first thing you should know is that to even take part in most of these funds, you must be an accredited investor. This means you have to have over $1 million dollars in assets or at least $200,000 in annual income. Since the minimum investment is so high, this is likely to ensure that you won’t be spending money you don’t have. Hedge funds are high risk investments and it is very possible that you will lose every penny that you put into the fund. Therefore you should never be investing in these funds with money you can’t stand to lose.

But with that high risk come the possibility of high returns. Some funds return as much as 20% a year depending on the strategy of the fund manager. If you are looking to make money fast then investing in these funds is certainly one way you can do it. However, you must be certain that you are working with a fund manager who is knowledgeable and experienced in the market. All it takes is one bad deal to send your money down the drain. Take the time to thoroughly investigate the person handling the fund until you are certain they know what they are doing.

Investing in hedge funds is also very costly. In addition to your initial investment, you will also be paying the fund manager a fee for every year they manage the fund. That fee can be anywhere from 1.5% to 20% of the gains made in the fund. On top of that, you must agree to be a part of the fund for a contracted length of time, typically one year. This is to avoid any losses that may result from members pulling their money out and forcing the fund manager to sell assets at a loss. Learn all you can about hedge funds to determine if it is the best investment option for you.

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

The biggest reason small businesses fail is not for lack of solid business understanding, or market demand, or even mismanagement. The biggest reason they fail fail is undercapitalization. The reason is simple: starting a new business is overwhelming. There are so many things to figure out, usually in a very short period of time. Unexpected and unknown expenses can whittle away any initial investment capital. One important consideration that many new owners fail to calculate into the startup budget is their own burn rate. Very few can expect to see a major influx of clients or customers from day one.

The burn rate of a startup business is simply the amount of cash burned through each day, week, or month, while gaining those all important clients, customers or contracts. Whether or not customers or clients call, the phones must be in service. The office must be maintained at a comfortable temperature even if no one shows up to. Landlords do not care if you expect to double your cash flow next month when your business starts taking off, they want the rent paid now. Your suppliers or vendors are not usually in business to front you, either.

By far, the biggest portion of the burn rate goes to employees and their benefits. You cannot do without the employees you need to get off the ground running. As a business owner, you cannot take over every role and wait to fill the most important positions later. Customers, clients and contractors buy into your people. As a owner, investing in small business means adequate staffing from day one. Your customers and clients will hesitate if your office is staffed only by one overworked employee because she is all you can afford right now. To gain the business, you need to display that you are ready on every angle, employees included.

While investing in small business is considered a gamble, it does not hurt to look around and research a business for investment consideration. The first thing you should do is ensure that the business is simply undercapitalized rather than based on an unsustainable profit model that will keep them in the red for years to come. You may be surprised at how little money it takes to save a properly set up a business from extinction. Many of them close down over an unbelievable sum. If you roll up sleeve and spread your investment dollars wisely, this investment can pay off in spades.

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.