Investment Articles

An Investment Trust is a form of collective instrument. It is a close-end fund and is constituted as public limited company. Investor’s money is pooled together from a sale of a fixed number of shares. Usually there is a fund manager that invests in the stocks and shares of various companies. This type of trust has no employees just a board of directors.

The first investment trust was the Foreign & Colonial Investment Trust and it started in 1868. It is the oldest form of investment, it is the largest global growth investment trust in the world and it is still open to investment.

It is always a close-end trust. This means that there are a fixed number of shares in issue which are listed on the stock exchange. These shares can be bought and sold through a stockbroker like any other shares. So why is this different for the investor? With this type of trust, the shares are traded independently of the fund’s net asset value and they can often be at a substantial discount.

If you have such a trust than you will have to pay stockbroker commissions. The difference between the price at which you sell and the price at which you buy is known as the bid-offer spread on the trust’s share price.

An Investment Trust is taxed according to its investment income but its capital gains are not taxed. This type of trust can be better aligned with the investor’s interests. This avoids the double taxation which would otherwise arise when shareholders sell their shares in the Trust and are taxed on their gains.

The Real Estate Investment Trust is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REIT’s usually receive special tax considerations and offer investors high yields as well as a high liquidity method of investing in real estate.

Learn from professionals how buying gold can help you in times of recession.

When investing $50 there are many options to choose from. Investing $50 allows investors to learn about each investment while growing their wealth.

1. Stocks – Investing in stocks for $50 gives you two options. The first option in through a direct investment through the company or its representative. This option is often referred to as a Drip plan which stands for dividend reinvestment plan. You send your payment to the company your investing in. The second option is through a discount stock broker whom charges from $3-$15/trade depending on the brokerage firm.

2, Real Estate – There are two options of investing in real estate. The first option is through REIT’s or real estate investment trusts that can be bought on the stock exchange. The second option is to buy physical land through a few companies that have no down payments and low monthly payments.

3. Mutual Funds – Most mutual funds have a minimum initial investment of $2,500 however many funds will allow you to waive the initial minimum requirement if you agree to make automatic deposits. You simply fill out the application form and send in a voided check and every month they will withdraw $50 from your checking account and invest it in the mutual fund.

4.C.D. – Certificate of Deposits as they are commonly known as usually require a minimum of a few hundred dollars to open. There are a few banks that will allow no minimum C.D.’s that you can invest in online.

5. Credit Card Loans – Most people do not realize that when a credit card account goes into default it is often sold to a secondary lender whom then contacts the creditor. The secondary lenders buy the defaulted credit card accounts for pennies on the dollar and attempt to collect the full loaned amount. Anyone can buy these defaulted loans from various companies.

Investing $50 will give you experience and help create wealth. It is always a good idea to invest with smaller amounts of money when first getting into a new investment. These $50 investments will allow you to gain knowledge and help you achieve a financial foundation.

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We’ve written a lot of articles about picking the right penny stocks. This is obviously a very important step, the next is timing your purchase. When should I buy and how many shares should I buy are also important questions to think about. You should have your strategy mapped out before you make your trade.

The goal is to make money and you are able to do this if you buy low and sell higher. This will not always happen and you have to have your strategy in place. Be prepared to take a loss, will your sell be triggered by a certain % of loss or will it be triggered by support breaking. Set your stop loss and forget about it. You are buying the stock because you expect the price to rise, when it doesn’t there was a flaw in your strategy or your penny stock picks. Look back at our articles on how to review a company and what to look for in share price as well as share structure. If you do your due diligence and the stock drops in price you need to have that stop loss set. A penny stock can and will have you lose every cent you’ve invested in it if your not careful. Being able to minimize losses is a must when trading these low priced over the counter stocks.

Some traders will buy a company at a support level but will be prepared to add more shares if the company dips again where they will then add more shares. This can be a solid strategy but its risky as the stock may continue to fall and now you’ve lost more of your initial investment. The strategy can payoff by buying a second lot of shares and the price rises, you can sell, mitigating the loss on the first batch and sometimes covering the cost all together.

You sell shares to gain profit as the goal. Selling to avoid losing more money locks you in for a loss but that loss can be a lot smaller than full loss of investment. In the penny stock market you will take a lot of losses and have a lot of runners. What you need to be able to accomplish is let the winners run and maximize profit while dumping the mistake and lessening your losses. Cut your losses and let your runners run and never ever look back.

Selling for a profit is even tough. You may think its easy but its not. Your trading a thinly traded stock with a low float, you make the right call and news comes. The stock takes off and every tick is 30% gained and the amount keeps getting higher. Not selling has been reinforced now the stock begins to dip, if you sell here you lose a percentage of what you could’ve had, as you hesitate, the stock dips more. You hope it goes back up to the high and don’t sell. This happens all the time. Thats why we never look back. You will sometimes sell at the top and sometimes you’ll miss you can’t look back. Penny stocks are a quick trading game. Sometimes a split second is the difference between a thousand dollar gain or a hundred dollar loss. You need to be able to take quick profits as well as realize when you have the runner. Plan your trade out before time, entry and exit, then remember to trade your plan. Never fall in love with a penny stock.

Here are some great Penny Stock Picks

We’ve been trading all types of stocks for many years. We also provide advice to others whether its a beginner just learning how to trade or a seasoned pro looking for input on a particular trade. Do not use our advice as a buy and sell signal but use it as the floor to base your own due diligence upon. As traders we wish people only made money but that’s not the way it works in reality. Therefore we have to take us much gain as possible while limiting the losses. Try OTC Bulletin Board if your looking for even more trading information.

It may seem like an impossible task to invest on a low income, but the benefits far outweigh the sacrifices. Unlike savings, which serve short-term financial goals like buying a new car or establishing an emergency fund, investments are intended to meet your long-term financial goals, including providing for a child’s college education or your retirement.

Regardless of income, the money that you do have needs to be managed. The best investment products for you will be determined by your long-term financial goals. Discuss these with a financial advisor who may be able to assist you with finding investments that best serve your goals – even if they seem small or insignificant compared to the figures you read about or see on television.

Types of Investments

Retirement plans: 401(k) and IRAs Many people choose to invest through their employer, taking advantages of the matching funds and tax benefits that accompany many 401(k) plans and IRAs (Individual Retirement Arrangements). Contributing at least the amount your employer will match is one way to get a significant return on your investment. Because the employee typically decides the contribution, you can begin with a small amount each paycheck, gradually raising your contribution as your salary increases. If your employer does not provide a retirement plan, you can still set up an IRA as an individual, and reap the tax benefits.

Stocks, Bonds, and Mutual Funds When you purchase a stock, you are buying a share of ownership in a company. A bond is a loan of money to a company, or government, that promises to pay back the principal plus interest. Mutual funds pool money from many investors to buy a variety of stocks, bonds, or other securities. Investing through a mutual fund, rather than purchasing stocks and bonds on your own, provides several benefits, such as being able to choose from a variety of professionally managed funds tailored for different levels of risk and rates of return. Some mutual funds have an initial investment of as little as $50, making them an ideal place to begin investing on a tight budget.

Beginning Investing

Consider your long-term financial goals, and determine what type of investment combination, or portfolio, will best serve those goals. Then, begin investing. No matter what the initial investment is, the important thing is to start. A financial advisor may be able to help you find areas in your budget to cut back in order to increase your ability to invest, and direct your investments so they may best serve your long-term financial goals.

Questions? Email me at wesley@thewandwgroup.com and visit our website at http://www.thewandwgroup.com New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning.

Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.

What is a tax free bond, and how can you invest in such a thing? A tax-free bond invests in municipal bonds. It is a debt security issued by the state or local government. They pose as good investments since they don’t attract tax. They also attract very high interest on their value. How you can invest in tax free bonds is based on a number of factors; most important of all, your knowledge about these bonds.

There are two attractive tax-free bonds in the market namely; the general obligation and revenue bonds. General obligation bonds are state securities meant for raising money for projects like community development, schools, sewers etc. The General Obligation tax free bond is considered as safer in comparison to the Revenue Bond. On the other hand, the Revenue Bond is issued by a state or local government company. Both are available in the market. The interest on your investment comes from the business profits of the issuer.

Deciding on what to invest on can be challenging. However, if you are an average investor with some experience in the market, you can determine what the ideal bonds to buy through equivalent yield formula.

You may want to invest heavily; the tax free bonds provide you with insulation against heavy tax on your investment. There are two thumb rules in the market

• Study the yield potential of the bond you want to invest in, this provides an overview of the benefits.
• Invest objectively; the value of these bonds is high, as such it’s ideal to invest high enough money to earn high yields unlike when you invest small amounts.

Investing in tax free bonds promises you, as an investor, very good yields on your initial investment. You can choose to invest in either the general obligation or the revenue bond. Each provides an attractive interest on your initial investment. Learning how to project possible earnings is done using the equivalent yield formula. If you have little knowledge about bonds, it’s ideal you study books about investing in this topic.

Charles E. Johnson is an entrepreneur and the current owner of Articleportfolio.com. For more information on the bond market and investing in bonds, visit the Articleportfolio.com bonds page here: http://www.articleportfolio.com/buying-bonds.html.

Everyone has heard about a friend of a friend who knew a guy that had a sister who got involved with a company just before they went public, made a small seed investment and when the company went public she made millions.

Real Pre – Public investments in companies that are built to last with solid executive management and board of directors all wrapped in a industry that can still flourish in a recession are extremely difficult to find and impossible to be part of unless you are ‘in the know’, meaning you are the auditing or contract attorney for the company filing with the SEC, the accounting firm doing the third party audit, the consulting firm who is putting together the corporate strategies for the company or the investor relations industry that is gearing up for the publicity and promotions campaign to run in a post offering environment.

Typically the invitation to invest in a pre-public company comes in the form of a Direct Public Offering after the company is divided into shares with a private placement memorandum and before the third party audit and before and during the comments stage of the S1 filing. If you are fortunate enough to invest in a company with the above description you will most likely being offered deeply discounted stock (cheaper than what will be offered in the public market) which means you will (if the offering goes as planned) increase your initial investment amount by 200+ percent.

This is not at all a rare instance. Getting invited to invest in the pre-public, seed capital stage is actually quite simple if you know who to talk to. The best companies to become aligned with are ‘go public’ facilitation consultants and corporate turnaround consultants. These groups take companies public for a living and can usually plug you right in when the company is qualifying with the SEC and needs to have 40 investors on the book to qualify to go public (on the OTCBB). Simply contact the company and they will typically give you a quick information form to fill out to collect your name, phone, investment history and investment threshold.

It’s a fact, once you started investing in solid pre-IPO stock investments, you will dump your broker and never buy stock the traditional way again. Now get out there and experience the power of seed capital investment!

Are you an investor that wants to feel the power of a Pre IPO investment first hand? Are you interested in investing in up and coming technology companies, alternative energy companies with massive contracts to fill, Chinese companies with incredible capabilities that are now expanding to the US public marketplace? Then you need to start getting emails from Princeton Corporate Solutions. Get updates on the latest IPO’s a few months or even weeks before they go public. Click Here to get more information: http://spreadsheets.google.com/viewform?formkey=dEl2aEhJLXZIYmhfbUp6VWVqTURnUmc6MA

Covered calls are a conservative option trade that typically outperforms standard stock trading strategies in the majority of markets. The reason is because covered calls draw out profits from speculators while collecting a premium on the trade and holding onto the stock for dividends. Since you have multiple sources of profit in the trade, you have the opportunity to make money when the stock goes up, down or sideways.

For those who don’t already know, writing a covered call involves buying 100 shares of stock and then selling the call option on those 100 shares 1 or 2 strikes out of the money in the front month. This lowers your initial investment in order to own the stock and gives you multiple sources of profit.

Covered calls are an options trade best played on equities that are mild to moderately bullish in nature. A covered call outperforms standard stock trading strategies only when the market is mildly bullish or neutral. When the market rallies, writing covered calls will dramatically cut into your profit margins because you will get exercised against and be forced to sell your shares at a smaller than possible profit.

Here are some of the things I look for in writing a covered call:

1. 3-5% ROI from the premium. Assuming the stock doesn’t change in price during the trade, you should have made 3-5% of the value of the stock on the money gathered in the premium. Aim too high and you risk a lot. Aim too low and you’re hardly making any money.

If your profit margin is too high, it’s a sign that there is a great deal of speculation and volatility associated with this particular stock. You do not want to be buying a covered call on a stock that has a 6-10% ROI from the premium each month. The reason is because you risk things like catastrophic gapping from sudden news announcements or dramatic bullish breakouts that cut into your profit margins upon being exercised. Avoid this and play it safe with a smaller monthly ROI.

2. A stock should be trading above its 200 day exponential moving average for at least a month. Typically the 200 day EMA is the benchmark of whether an asset for an options trade is in an uptrend or a downtrend. Look to this as your primary technical indicator when determining a stock to write covered calls on.

3. A stock should have a Price to Earnings Ratios between 15 and 25. The price to earnings ratio measures a company’s earnings versus the value of each share of stock in the company. It’s an indicator of how valuable a company is, the lower the number, the better the earnings per share and the more profitable and growth oriented a company is. The higher the number, worse the earnings are per share and the more overvalued a company is. Companies with P/E Ratios above 30 are usually the result of mass speculation without much earnings to show for it.

You should expect a company to be moderately to well valued to place a covered call on it, so don’t look for the undervalued companies ready to explode or the overvalued companies preparing to crash. Try to stick somewhere in between.

4. A stock should have a relative strength index between 45 and 70. Relative strength is the measurement of the overall amount of upswings in price action versus the overall amount of downswings averaged out over a period of time. When the average number rises above 70, the position is considered overbought and values below 30 are considered oversold.

I recommend staying in between 45 and 70 to make sure you are dealing with a stock that has a positive outlook, but isn’t going to explode off the chart any time soon. This will help make sure your options trade isn’t getting cut out of profits by being exercised and is still performing well without losing equity in the market.

For more tips and options trading strategies like this one, be sure to check out http://www.tamingthemarkets.com

-Eric Conklin
Blogger and Trader
http://www.tamingthemarkets.com

While the term “leveraged debt” may seem unfamiliar to you, it is a fairly common practice in personal finances as well as business finances. The term refers to a scenario when a person or business chooses to make a large investment with the help of various financial resources, including borrowed capital. Leveraged debt is used to increase returns on an investment; however, there are serious risks involved.

Examples in Business and Personal Finances

The most common uses of leveraged debt include business, stock, and real estate investments.

In business, leveraged debt is a tool used to magnify returns on large scale operations. For example, if a company has only $1 million in equity, but they believe they can profit from funding a $10 million operation, they may use “borrowed capital” to fund the remaining $9 million. In this scenario, the company is trusting that their operation will be successful enough to make a considerable profit, even after repaying the $9 million in loans.

In personal finances, it is common for people to use leveraged debt when investing in the stock market. For example, if a person feels confident in their ability to do well in stocks, but they do not have the cash they need to purchase shares, they may take out a loan to for the initial investment. If a person borrows $1,000 and invests it with a return of $5,000, they have earned 500% profit.

Purchasing a home is another investment in which people frequently use leveraged debt. For example, if person wants to buy a $100,000 home, but only has $20,000 for a down payment, they make take out a loan for the remaining $80,000. Once they make the purchase, they can begin to rent out the home for, let’s say, $600 a month. After renting out the house for a just two years, they have gained $14,400 in rent. Additionally, if the real estate market does well, their profit margin can increase even more.

Risks Involved

Leveraged debt can significantly increase your investment’s returns; however, it can also increase your losses. When relying on borrowed capital, it is important to thoroughly research your investment, because if it fails you will still be held accountable for the debts you owe, which can often be quite substantial. In the event that you are unable to pay them, you may find yourself filing for bankruptcy.

For more information about leveraged debts and bankruptcy, contact the Austin bankruptcy lawyers of Slater, Kennon & Jameson, LLP.

Joseph Devine

Many people want to play on the stock market in hopes of making the magical selection that will provide them with lots of disposable income and make all their dreams come true. Although it might seem like the stock market is a place where you get thousands of dollars in return for a small investment, there are actually a lot of very complex processes and equations that go into determining who makes money, and who does not. More often than not, naive investors will sink all their money into one prospect only to have it shudder and die within a few months. Not all investing is created equal, and if you want the best dividends, you need to understand how the process works and what to look out for.

The first thing to understand is exactly what dividends are. When a company goes public and starts to trade its stock on the big boards, they begin to take on public shareholders. These shareholders can be investment firms, banks, or normal people that are interested in gaining something back on their money. In a certain sense, these people become partial owners of the company, and when the company does well, it usually rewards them for their initial investment. When a successful company turns a profit, it has the option of distributing percentages of these profits to its shareholders, and when it does, these shared profits are known as dividends.

Many people think that dividends are the fastest way to see a return on your investment without really having to do anything, but it’s important to remember that there are many different ways in which the market and the price of the stock can affect the dividend you do, or do not see. When thinking about getting involved in this type of investing, you must take care to consider the payout ratio very carefully. Many companies will try to attract investors with ratios that sound too good to be true, and they usually are. Anything over sixty five percent is a ratio that you should probably stay away from.

In the first couple of years, it’s important to remember that the best thing you can do with your dividends is reinvest them. Unless something unusual happens, they probably won’t be huge amounts of profit for you anyway, and you can strengthen your portfolio consistently if you allow those dividends to continue working for you in the open market.

Ready to get started? Learn more about investing and dividend yield at http://www.DividendYieldLive.com today!

Why should you want to buy silver at $15 an ounce when you can wait for silver to go down to $12 an ounce. The simple and realistic answer is the supply of silver decreases with time. Trying to wait for low prices will negatively affect your ability to buy the quantities you want. Buying on a cost average method allows a consistent accumulation of silver.The short term price you pay today will be considered a bargain in the future.

If you could flash forward one year and look at the price you paid for silver today, you will realize that the price you paid last year was a bargain. Making small changes in your spending profile can benefit you greatly. Do you purchase cigarettes on a regular basis? Consider this, once purchased your cigarette purchase is destroyed upon use. You will get a one time value from each cigarette. But to repeat the experience you will have to give away more money. With the regular purchase of silver, whether weekly or monthly, you have a product that lasts year after year after year.

If you take the same amount of money that you spend on pampering yourself and buy silver you increase your real wealth. Forget about that daily cup of gourmet coffer and buy yourself an ounce or two of silver.

Become part of or start a silver investing club. Most silver brokers buy from wholesale sources. Leverage the power of group buying to negotiate purchase rates that are fair and favorable to your silver investment club. Silver brokers work on commission. Do not overlook the power of negotiating. Make sure you have a plan a and an plan b. If your club plans to purchase more than $1000 in a single transaction ask for a discount. If your club purchases $2500 or more in a single transaction ask for a larger discount. Another advantage of a group membership is that you can be more productive with 100 people giving one percent of effort than 1 person giving 100 percent of their effort. Their is strength in numbers.

If there are no clubs in your immediate area then look at the penny saver magazines of surrounding communities. If you have to start your own club run an ad in the local newspaper or penny saver magazine. An example ad would be: Investment club forming. initial investment under $50. Automatic monthly purchases to acquire precious metals. Call telephone xxx-xxxx. Place your ads under the business, financial, and personals section of the penny saver publication. Of course, this technique will work just as well with the local newspaper.

You can also post advertisements in the form of flyers. These flyers can be put on public bulletin boards. Convenience stores, food stores and churches are excellent places to advertise. Just make sure you get permission first. And sometimes you do not need permission.

Look at your bank account and tell me if you are getting a fair return on the money you loan to the bank. If not you need an equalizer to develop you wealth. Using your paper money to acquire real money protects your economic standing. Your best friend when it comes to your finances is you. Be proactive in managing your assets.The systematic acquisition of silver coins can be painless. You have alternatives to starting a silver club. For a more direct and systematic way to own silver consider joining already established silver clubs.

Watch the current trend in owning precious metals. Do what the smart money movers are doing.The possibility of silver prices skyrocketing to three digits may not be far away. Consider this, the fiat currency you have in your savings account is being inflated away on a continuous basis. Acquire real wealth now. Buy silver because the price will surely increase.

Thank you for reading my article. Please read my other articles. For more information on investing in silver click on the link below to American Eagle Silver Dollar..

Ronald Roberts is a former Army Officer and MPA graduate. His many interests include public administration and academia. His favorite quote: Never despise a humble beginning. His blog is http://www.americaneaglesilverdollar.info.