Investment Articles

In the current economic climate, many Investors and Financial Planners are seeking alternatives to volatile stock markets and dismal deposit accounts in an effort to boost portfolio income without dramatically altering overall risk profile. One such are of interest for the Income Investor is strategic property, as high-yield property assets can be acquired from distressed sellers with deep discounts to market value, enhancing income returns and reducing capital risk.

There are number of markets around the world where, in the tail end of the global financial crisis, income-generating property assets can be acquired from financial institutions keen to rid their balance sheets of illiquid assets in order to borrow freely in money markets. Indeed, holding defaulted loans or repossessed properties can limit the amount of borrowing a financial institution can do, and as such many are prepared to let these asset go at rock-bottom prices.

The most obvious market for Investor to consider is the US property market, where the bulk of sub-prime mortgage defaults have now been processed and foreclosed and a glut of property sits empty and unsold. At the same time, rental yield in some areas can exceed 35% per annum, and whilst the quality of the underlying property assets can in many cases be questionable at best, such high yields make for superb long-term income investments for those Investors capable of withstanding the relative illiquidity of real estate.

Another option for the Investor seeking to benefit from this transfer of wealth is to acquire said properties with the aim of improving the asset quality through refurbishment and disposing of the property very quickly on the open market. This strategy allows Investors to capture the discount as a liquid capital gain, and where the end-users are able to access reasonable home loans, properties can often be bought, refurbished and sold within 30 days, and if the original discount was 50% to market value, then Investors can easily double their money on a monthly or bi-monthly basis, and utilise profits to expand into further properties and even greater gains.

This opportunity is unique, and is only relevant in a distressed market where there is a plethora of homes to buy at good discounts, and plenty of future homeowners looking to get back on the property ladder, and of course where the new owner can source a mortgage. For those Investors seeking a longer terms and perhaps more hands off income investment, they might consider buying individual rental properties. The same discounts apply, and a local management company can take care of tenant and property management. There are also some more structured fund-like property investments where investors can buy a stake in an existing property portfolio that is already generating income, and these kinds of products remove the risks associated with direct ownership of real estate assets based thousands of miles away.

In summary, strategic property investments offer investors the opportunity to collect market-beating income, and whilst not suitable for those who might require instant access to their funds, high yielding assets of this nature will often generate an income 4 or 5 times greater than the majority of financial products currently on offer.

This is an excerpt from DGC Asset Management’s Investment Alternatives Guide. Free to download at the DGC Asset Management website

The advent of online share trading has seen a dramatic increase in stock market newsletters and courses. Many traders inadvertently find themselves stuck in the beginner’s cycle. They may have attended a course or seminar, or purchased a black box system only to find the results are drastically different from those that were touted, so they move onto the next one.

Others may have purchased some trading software and read a few books to begin a more self directed approach, only to find themselves suffering from ‘analysis paralysis’ as they discover the plethora of indicators within the software and devote much time to discovering the holy grail. They flip from one stock trading system to another, perhaps discarding methods prematurely. Chances are the trader is focused on short term trading strategies and mostly using discretionary methods.

The trader’s life becomes a revolving door of disappointment and frustration as they move from method to method without consistent results – the beginner’s cycle. The question becomes: how do you break the cycle?

First, stop trading if you are throwing good money after bad and you are not confident in your methods – step back and look honestly at how you are engaging the market, what is working and what is not. If you have a trading plan, revise it; if not, then begin writing one – treat your trading as a business. Focus on your goals, strengths and weaknesses.

If you have not addressed your trader’s mindset in any way, now is the time to start. If you have, but are still struggling, perhaps you need to do more. A good starting place could be reading “Trading in the Zone” by Mark Douglas. Although not about the stock market, the concepts in Mark’s book are discussed in more depth in Eckhart Tolle’s brilliant “The Power of Now”. Professional assistance such as psychologists may also be beneficial. Whichever methods you choose, the goal is to gain a better understanding of yourself and in particular whether you have any repeating operating patterns, usually subconscious, that may be hindering your trading performance.

Most aspiring traders seem to focus on short term strategies that are discretionary in nature so it makes sense that if this is the case and you are stuck in the beginner’s cycle then it may be more beneficial to focus on a mechanical long term trading strategy instead which has many benefits. If you do not yet have the skills to design and thoroughly test your own then, following someone else’s could be an option. Be sure to conduct sound due diligence on the system and provider if you head down this path. Make sure that the system is tested thoroughly, not optimised and you are comfortable with it and the drawdowns inherent in the system.

Look for a system that is thoroughly tested with backtested and real time results made available, created and personally traded by a licensed and experience trading professional, and has various portfolio categories to choose from that suit differing risk tolerances.

Trading stocks with a longer term mechanical system allows the beginner to trade in a more relaxed manner, but importantly provides the one ingredient that is most likely missing in their trading life that will allow them to break the beginner’s cycle, and that is time. Choose an end-of-day system that only takes a short time each day to administer, thus freeing up a significant amount of time to work on other areas of trading whilst still allowing one to trade and experience capital growth.

It takes time to work on your trading plan, to develop a strong trader’s psychology, to learn more about money management, to create and test other trading ideas thoroughly, to learn software coding and to learn about other markets. These things can be done without the added pressure placed on oneself in the expectation of immediate results. New systems or strategies can be added to the trading plan as capital allows, by which time the trader will have a much more solid foundation from which to grow.

The Chartist’s Growth Portfolio: * Specific buy and sell recommendations * Less than 10 minutes work per day * Easy to manage and understand * Can be used in a SMSF * Use any broker * Personally traded by Nick Radge, The Chartist Subscribe to The Chartist’s Growth Portfolio at https://www.thechartist.com.au/membership-packages/long-term-traders.html

In order for a financial vehicle to be worthy of all phases of a consumer’s lifetime, it must be liquid, it must have a proven track record (or rate of return) and it must have the flexibility to adapt to the consumer’s changing financial needs. Indexed universal life is a unique strategy that can provide all of these features and more. Let’s take a closer look at how IUL can be a fit for each phase of a consumer’s life: introduction, accumulation and preservation.

During the introduction phase, the consumer has usually completed their education/training and is eager to take on the world like a boxer lacing up his gloves for his first fight. This phase is usually the first step to the complete financial picture.

During this phase, the consumer has usually either started or is about to start both a career and family. Financial concerns are usually short term and the road map to retirement is in its rough draft. Concerns such as providing an education for the kids are usually the extent of long-term planning during the introduction phase.

Universal life can provide the perfect tool to accumulate funds tax deferred to help with a child’s education. IUL has the flexibility to contribute either as little or as much as the family can afford without financial consequences such as lapsing a policy.

This allows for the flexibility a young family may need in a struggling economy. In fact, IUL has become a preferred choice for college tuition plans, such as the 529 plan. Benefits include the ability to withdrawal the funds at any time without penalty and having no limitations on annual contributions (outside of MEC limitations). Mom and dad take comfort in knowing that if their child chooses an alternative option to college, they will not be penalized and will still have the capability to receive tax free withdrawals.

In the accumulation phase, the benefits of a universal life policy can continue to be advantageous. In this phase, the consumer is in the process of achieving long-term wealth and minimizing long-term liabilities. Consumers are using IUL as protection against the loss of a family’s income in the event of a breadwinner’s death.

Business owners can also benefit from cash value life insurance. They will often use this strategy to pay for business expenses that can be accessed in the form of a loan while avoiding federal income taxes. Additionally, many small businesses today are utilizing IUL as a way to protect themselves against the death of a business partner or key employee that would have a significant impact on the profitability of the business. Or the business owner can protect his family from a premature death, ensuring a financial remedy in the event of a catastrophe.

The ability to withdraw funds tax free and the luxury of protecting the breadwinner with an accelerated tax free death benefit is making the IUL more attractive than ever for families and financial professionals.

The final phase of one’s financial life is the preservation phase. During this phase, the consumer will be looking at exiting from the workforce and easing into retirement.

Most retirees entering this phase will have two major concerns today: rising income taxes and a bear market. Considering that most retirees will live on an income of approximately 70 percent of their average working income, their concerns are valid.

With our federal debt just recently exceeding $15 trillion, most feel that federal tax rates are likely to rise. When adding volatility to the equation, the retiree can easily find themselves in trouble, especially considering most retirement plans fluctuate in value with market performance and are usually taxable upon withdrawal. Because of this, retirees are turning to IUL as a means to bypass market volatility, enjoy moderate returns through both indexing and annual reset and have the ability to withdraw their funds exempt from federal income tax.

UIL can be a perfect fit for the three phases of one’s financial life: the introduction, accumulation and preservation phases. Regardless of which financial phase one is in, the IUL has the flexibility to adapt and conform to the changing needs of both the investor and financial professional.

With some things in life, it can pay to jump in head first and think later. Others take careful consideration and a lot of thought before initiating. Investments definitely fall into the latter category. With their high risk and financial implications, often investments prove to be one of the biggest decisions of many people’s lives.

Investing should never be a light-hearted decision. Before making any investment, there are a number of factors that you should consider.

Think About Why You’re Investing

There are a number of reasons why people choose to invest. Some people invest to help form a nest-egg for their retirement, others may want to help boost their property assets. The obvious incentive is the possibility of growing your money. However investments should never been seen as a means of overcoming a cash flow shortfall and they will not provide a short term fix.

You should never go into any investment blind and it is crucial that you fully understand your investment. You may have dreams of a self-named personal yacht carrying you on to the Mediterranean shore upon retirement but unfortunately there are no guarantees of returns with investments.

You should think about your goals, priorities and what you are hoping to achieve from investing. It is also important to consult the experts and do thorough research before making any investment decisions. Only when you fully understand all aspects of the investment process should you consider making one.

Think About The Risks

Often with investments, the potential fruitfulness can glaze over the dangers. However it is undeniable that investments are a risky business. A fundamental aspect of investment is taking calculated risks in an attempt to reap the rewards if they are successful. Typically in the investment world, smaller risk will also often mean lower potential growth of your money which is why many investors make bigger brave decisions whilst understanding the risks that they may bring.

In addition to the overall risk of losing your investments and receiving no returns, there are a number of factors out of your control with investments which enhance the risk factor. The economic climate can change rapidly and shares can fall and quickly as they rise. “Although you may be urged investors to make decisions quickly due to the regular fluctuations of the market, make sure you know the pitfalls first.

The bottom line is that you should never invest money that you cannot afford to lose. The best investors are those who prepare themselves for short-term losses in order to try and make long-term gains.

Speak to The Professionals

Seeking investment advice could help to save you money. Whether you are a novice or an experienced investor, investment advisors can offer you expert guidance on making investments that best suit your circumstances. They can also talk you through the risks involved and help you to make calculated decisions to try and help boost your wealth.

John T Hughes writes for Share Dealing Account, a leading online source of information on share dealing accounts in the UK.

The best investment opportunity for 2012 and 2013 could be stocks, but any bond investment is suspect at best. With even the best safe investments paying zip it’s important to look for investment opportunity elsewhere. How about an investment in real estate that requires no time, effort or management on the investor’s part?

Real estate is the best investment opportunity for 2012, 2013 and going forward because it’s selling cheap. Interest rates are at historical lows, which is also great for investors buying properties. Record low rates are very BAD for bond investors, because bonds pay a fixed interest rate. In fact, when rates do go up – bond and bond fund investors WILL lose money as bond prices (values) fall. That’s the way bonds work.

As an investment opportunity stocks and stock funds are the wild card. Stocks could go up in value as bonds fall: that’s the way it has worked for many years now. But stocks are not cheap… having doubled in value between early 2009 and early 2012. Gold is not cheap either, having been on an up trend for more than 10 years. This leaves real estate as the best major investment opportunity available to the average investor.

Opportunity in real estate is everywhere in the USA for 2012 and 2013. The problem with investment here for the average person: management and a lack of liquidity. Someone has to deal with the day to day operations; and you can’t buy, rent and sell a property investment quickly and easily without significant costs. Or, can you?

The best investment opportunity is staring you right in the face if you know where to look, and it’s designed to solve these problems for the average investor: real estate stock mutual funds. These are the best investment opportunity for the average person who wants a piece of the action in his or her portfolio. No active management is required on the investor’s part, and you can buy today and sell a day later if you want to.

Professional portfolio managers make the investment decisions for you.

If you know which mutual fund companies to invest with your real estate mutual fund investment can also be a BEST BUY. No charge to buy or sell, with less than 1% a year going to pay for management expenses. That’s why I call these funds your best real estate investment opportunity for 2012 and 2013 and beyond. These funds hold equity (stocks) in companies that invest in the likes of office buildings, other rental properties, shopping malls, and home builders.

When you consider your choices, real estate stands out as the best investment opportunity going forward. Your best way to invest is in no-load mutual funds that specialize by holding investment trusts that own commercial properties diversified across the USA. To find your best deal search for “no-load real estate mutual funds” on the internet.

Author James Leitz has 40 years of investing experience and would like to help you learn how to invest. Get up to speed on how to invest at http://www.investinformed.com.

It seems that the volatility in the markets have had almost no effect on increasing dividends accrued in the Asian markets. Asian investors are realizing great success and opportunities with exchange traded funds despite the increasing costs in rental properties, real estate, and even food commodities. Index fund portfolios are manipulating these market increases through more aggressive investment schemes. This is proving to be a lucrative time for those involved with the Singapore Exchange.

Since investment in an index fund is considered to be a form of passive trading, Asian investors are able to keep a number of costs down. First and foremost is the cost entailed to have a management company handle their portfolio. Many of these mutual funds do not possess a competitive edge with the larger traded stocks and funds, so their acquisition and monitoring is also less expensive. While gravely overlooked on the Hong Kong Exchange, these funds have brought about an insurgence of success for their investors over the past few years.

Asian buy side firms are seeing the benefits of investing in exchange traded funds for many of their clients. One of the major reasons in the pure nature of these funds. On its face the ETF has the ability to keep tabs on a single fund or commodity, or even a couple of commodities at the same time. It seeks to replicate the trends in the market and cause a competitive edge for the owner. The secondary aspect of the tf is that it has the ability to be easily traded and exchanged like an actual stock.

The fluctuating price indexes and the rising cost of real estate have had a detrimental effect on many stocks, assets, and portfolios. The liquidity of the ETF and the ability to buy and sell it with greater ease has made it a number one acquisition among many investors. Even the major trading corporations and buy side firms are quickly realizing that to ensure their financial health and that of their investors and clients, these are the commodity to acquire. While many traditional stocks and lower risk funds have ceased to be as lucrative as they once were, the ETF is rising is strength and stability. It also appears that the adaptability of the ETF to market trends has been a contributing factor to the increased opportunities of the Asian market in the face of increasing inflation.

If you are responsible for pricing Exchange Traded Funds, you should check out our website for more.

The options markets are divided into two main types – the calls and the puts. The possible trades are also divided into two types – the long or the short. To illustrate the relation and complexity of options to trades is that an option that is long might be short on the underlying market just and vice versa. These things might be a little difficult to understand by an inexperienced investor, so let’s take an example. We have a long call when we pay money for an option and when we receive money for that option that is a short call. We have a long put when we pay money for an option and receiving money on an option is considered a short put. It still might seem a little confusing for somebody that is new to the investment business.

As the option market is divided into call and puts, a better definition is that a call option is an understanding that provides an investor the option of purchasing a stock, or any other marketable item (commodity for example) at a certain price at a certain period of time. A put option is an agreement that provides the owner the opportunity of selling the marketable item at a certain price in a certain period of time. To make it easier to remember, calls are for investors and puts are for stock owners. As calls and puts are further subdivided into long and short, a clearer and shorter example is that a long option is the opposite of a short option just as a long put is the opposite of a short put. When money is spent for an option we have a short put or a short call and its complete opposite would be a long put or a long call when money is paid for a specific option.

Rolling options on the other hand, is a term used in the investment business which refers to a contract that offers the buyer the right of purchasing a marketable item at a future date within a certain period of time but for a certain agreed upon fee which is clearly defined from the very beginning of the contract. Rolling options provides the buyer the right of extending the timeframe in which he can use his right, in exchange of an additional fee. Rolling options are mostly used in real estate construction and development. Rolling options can also be applied for covered calls, and it is used when you have a covered call position and you decide to purchase again the option part and put up another option to sell which has a different strike or different expiration date.

Some websites like the borntosell.com website can explain much more about rolling options on covered calls.

In today’s tough economic climate, people are looking for ways to get back some of their wealth that they lost over the last few years. Most conventional markets did not perform as well as they have in the past, which caused investors to lose a large sum of money. If more people would have invested in alternative markets, they would have been better prepared to weather the economic storm and would not have lost as much of their money as they did.

Outperform Traditional Markets

One of the best ways investing in alternative markets can help grow your portfolio is that these markets typically outperform conventional markets during bear markets. When every other investment opportunity is struggling to show a profit, alternative markets can be providing terrific ROI figures. It is because of this ability to return a positive ROI, even in a down economy, that every investor should add alternatives to their stock portfolio.

Independent of Other Markets

Another great reason for investing in alternative markets is to diversify your portfolio. All of the traditional markets such as cash, stocks, and bonds are intertwined and dependent on each other. When one of those markets starts to perform poorly, the others will tend to follow. If you had all of your money tied up in these traditional markets, you could potentially lose a large portion of your wealth whenever one of those markets started to perform poorly.

On the other hand, alternatives are not correlated to the traditional markets and therefore are not subject to their influence. If the traditional markets start to tank, alternative markets can still thrive. This will allow you to continue to see your investment portfolio grow even when traditional markets are tanking. Not putting all of your investment eggs in one basket is the only way to ensure you do not lose all of your wealth at one time.

Investing in alternatives is also a great way to take advantage of emerging markets. Most investors focus a large portion of their time and efforts into the traditional markets. Since these investors are not on the lookout for new markets to get involved with, you are able to take advantage of these new investment opportunities and get in on the ground floor. This could help you realize a tremendous return on your investment should you discover a highly profitable alternative market.

Developing a sound investment strategy is vital to your future financial independence. If you stick all of your investment eggs in one basket, you run the risk of losing all of your wealth when one of the traditional markets collapses. However, if you spread your investments around to include alternative markets, your chances of going broke are greatly reduced.

If you do not know which alternative markets you should invest in, consider seeking the advice of a company such as Altegris. This type of company can help invest your money wisely in alternative markets.

“The Crash is over,” says Mark Zandi, the Chief economist for Moody’s Analytics. With a recovering US Housing Market, now is the best time to invest in USA property. The only thing you have to decide is where to buy. Read on for info on the Top 5 USA Property markets…

1. TEXAS- Hands down the number 1 place to buy property in this economy with a 11.5% estimated profit increase according to the ROI. “Texas Real Estate defies US property market” says Texas Real Estate Magazine. The rise in property prices means an increase in returns and value for your investment. Finding reliable tenants for your property is also extremely important. It is a good thing that Austin is a job creating machine that expects to have created more than 810,000 new jobs by the end of 2012. Unemployment is also expected to drop from 7.1 percent in 2010 down to 5.8% by the end of the year. The bottom line is that buying USA property in Texas will give you ample returns and tenant security.

2. FLORIDA- All the recent speculation about the USA property market has thrown the media into a frenzy. However, when it comes to the Florida market, everyone seems to agree. Zillow and Florida Relators are reporting an upward shift in prices across the state. The numbers show that single family home sales are up 30%! The increase in sales is a good sign that prices will begin to rise steadily for 2012. This prediction is supported by the Federal Reserve’s report on an increase in borrowers wanting prime residential mortgages. Banks are expected to start issuing more loans over the course of 2012.

3. ATLANTA- This place has the total package for USA property investment. For the past decade, Atlanta has seen some of the largest population increases in history. A growing city certainly means a growing economy and a decrease in unemployment. Still, prices are extremely low due to the large number of foreclosures. At the same time, rent hasn’t seen the same decreases most other cities in the USA. A strong demand for renters means that you won’t have problems finding quality tenants!

4. TENNESSEE- Memphis and other cities in Tennessee faced hard times during the housing crisis. Right now, prices are extremely low because of the large number of foreclosures. Have you ever heard the expression “Buy low, sell high?” Property prices in Memphis are expected to rise steadily over the course of the next decade, making it a hot spot for potential USA property investors.

5. OKLAHOMA- The best thing you can do is stay away from the West Coast. Places like California, Nevada, and Arizona are bust markets. Instead, look at middle states with strong economic fundamentals. Oklahoma City has a reliable economy and steadily increasing housing market. Sometimes, the safe play is also the best!

I am an Investment Adviser for U.S Invest, a company that specializes in US property investment for Australians. We help you purchase exclusive properties with the best possible returns and the lowest amount of risk. Get more free information at http://www.usinvest.com.au/free-gift/. Contact me at usinv.team@yahoo.com

Prior to 2008 the Federal Government remained diligent upon separation of private business and fiscal policy. All of that changed in September of 2008. The initial federal stimulus of Wall Street was sparked by plummeting Collateralized Debt Obligations (CDOs). Yes, we have all heard the news. However, there is still an inherent misunderstanding of the trillions of dollars of stimulus that followed.

After the initial bailout of Wall Street that exceeded $800 billion; the Federal Reserve, led by Bernanke, remained vigilant to ensure that a financial crisis would not be repeated again in an attempt to prevent another financial collapse on US soil. This “federal assistance” still continues today, and there is still no end in sight.

The first step of the Fed’s vigilance (after the initial Federal Stimulus) was to enact Quantitative Easement I (QEI). On 11/24/2008, Bernanke announced additional Federal stimulation that was to start on 01/01/2009 in order to help ensure that another financial crisis would not cripple the US banking system. The Fed promised to purchase $500 billion in Mortgage bonds to act as a foundation of a volatile market. On 03/18/2009, the Federal Government extended the initial $500 billion to an additional $1.2 trillion. The added stimulus purchased another $750 billion of mortgage backed securities and an additional $300 billion in long – term Treasury securities over the next 6 months. The total estimated Government funds for QE I came to $1.8 trillion. This extension of Federal funds caused our 30 year fixed mortgage to fall to 4.78%, the lowest rate on record since the mortgage interest rates were tracked in the early 1970s.

The market rallied quite considerably after QE1. During this time several talking heads were praising the Federal stimulus, saying that the recession had finally come to an end. It was to no surprise that many of these same talking heads were the same ones who went on record reassuring the strength of the US economy right before the initial Federal stimulus of 2008.

However, just as with any short term solution, the market would eventually start to fall again throughout 2010. When the artificial foundation of QE1 starting crumbling; all market indexes fell, which caused the Fed to act again on 11/03/2010. In the latter part of 2010, Bernanke announced the second round of Quantitative Easement known as QEII. QEII was a promise from the Fed to purchase $600 billion in long – term treasuries over the span of the next 8 months.
Ironically, this Federal stimulus expired just a couple of months before the debt ceiling had to be raised again in August of 2011. As anticipated, extreme volatility took center stage and the realization of our nations spending came into the spotlight. Many financial professionals today argue that the volatility brought on by the raising the debt ceiling offset the need for QEII, causing wasted Federal spending.

Because of the volatility of raising the debt ceiling, the Fed acted on a new program of spending known as Operation Twist. On September 21st, 2011 the Federal Reserve announced a plan to sell $400 billion of Treasury securities with a maturity of less than 3 years old in order to purchase the same amount of longer – term Treasuries having a maturity range from 6 to 30 years. The buying and selling of these Treasuries are to extend through June of 2012. The purpose of this Federal intervention was to help keep interest rates low, as the Fed promised through 2014.

Earlier in May of 2012 the Dow Jones Industrial Average was above the 13,000 mark, and disappointing data reflecting jobs data and a faltering Euro is causing volatility in the market again. Many argue that the market has been propped up by the Fed’s printing press ready to intervene with QEIII at a moment’s notice.

Make no mistake about it, this trend is very likely to continue for the next several years; causing excessive drops and gains in the market to become the norm. Volatility has been prevalent over the last decade because of a securities and banking industry that revolves around a business philosophy of leveraging assets. By the end of this year the total tally of the Federal Spending could exceed $5 trillion dollars, especially of QEIII becomes a reality. Bottom line, the end of this correction is nowhere in sight and our mounting debt proves it.

However, there are ways to protect your money from these unprecedented times. Through annual reset, core concepts of non leveraged assets can offer financial guarantees. Interest crediting methods known as indexing will allow for moderate returns to be locked in without a threat of volatility. Investors are embracing this philosophy of financial protection regardless of the Fed’s short term solutions of Federal stimulus.