Investment Articles

Introduction
The bottom line of every business is controlled by finance. The strength of finance includes control of the future of all the employees of a certain company. There are diverse aspects of investment controlled by finance. A company’s cash flow management is based on its investment policies. A proper financial investment helps a company in maintaining a perfect balance in the cash flow such that there is no sudden deficit that could lead to hazardous results. Financial investment in a planed manner has a role to control the investment, insurance and risk management issues of a company. These together contribute towards economic success.

Risk, Rate and Diversification
Before one goes through the deep features that are included in financial investment, it is required to understand the concept of risk. There are basically two different meanings that are given to risk. It could either be considered as loss of a certain portion of the capital investment or not enough profit as compared to the assets at stake. It is impossible to eliminate risk entirely. It can be reduced by diversifying the business. The intelligence lies in managing the risks such that if taken in the short term, it produces a long-run benefit. One should manage risks such that it lies well-within the context of the aimed goals. (The Daily Angle, 2009)

The next important part of investment is the rate of return. It is often believed that the more a person takes risks; the higher would be the rate of return. Whenever there is greater amount of security that comes from lower amount of risks, it becomes more suitable for the risk avert investors. This is termed as risk/rate trade off.

The third most important part of investment in finance is in terms of diversification. It is a reality that if a company deals in just one sort of business, there is a higher probability of failure. If the same company has many forms of business, then one form can certainly counteract the other. This is the benefit of diversity. Diversification in business can be adopted in the following ways:

• Across asset classes
• Across markets and regions
• Across investment management styles

Factors of Successful Investment

• One would have to decide the appropriate time as to when to sell a fixed-interest investment. If a person sells the same before the time of maturity, there are chances for the rate of interest to fall within the period of holding the investment. If this happens, the seller could enjoy a profit on the original investment.
• At the same times, if the interest rate rises during the time of investment, then there are chances that the seller would receive a lower amount as compared to the amount he could have received at maturity. This would therefore result into a loss.
• Another important factor that the investor must keep in mind is that the way a form of maturity or bond performs in the market would be different for different bond or maturity based on the economic conditions of the market. There could be arise but at the same time a fall too. (Vong, 2006)

Sources of Finance

Internal Sources

Personal Savings: In this form of financial sourcing, a businessman invests money in his own business. A substantial amount is used for running one’s own business.

Retained profits: In this form of sourcing, a businessman doesn’t use his money but saves it. These profits are termed as kept by the accountants and not spent.

Working Capital: The daily expenses that are accounted in the firm are termed as the working capital. This includes stationery, rent, wages etc. The working capital can also be defined as the difference between the assets and the current liabilities of a company.

Sale of Assets: This form of financial sourcing is required when the business is in desperate need of cash. At this point of time, the only alternative left for the company is to sale some of its fixed assets as they do not provide any revenue and use it in the development of the business. (Radcliffe, 2005)

External Sources

Ownership Capital:

Ownership refers to those businessmen who are shareholders. This occurs in a limited liability company as the partners and the owners of businesses are not holders of shares. There are two types of shares:

Ordinary Shares: These are those shares that are issued to the owners of a company. These shares can be entitled to dividends once a fixed amount of profit has been made or after a certain date. The ordinary shareholders can put funds into the companies through their respective retained profits. This might not bring in large amount of funds but it is preferable as a low-cost source of finance. The ordinary shareholders can also put their funds by paying for a new issue of shares. This is efficient when a company is in the growing stage.

Preference Shares: These are those shares which have a fixed percentage of dividends even before the ordinary shareholders receive any amount of dividends. It can be advantageous as these dividends are not required to be paid in those years when the profit has decreased substantially. There are no voting rights associated with these shares so there is total control of the shareholders. It does not put any restriction in the borrowing power of the company. (Brigham, 2004)

Non-Ownership Capital:

Debentures: These are the raised capital of a company in the long-term for which interest is paid under a written acknowledgement. They can be advantageous when the interest rates are volatile in nature. The coupon rate of debentures can be changed according to the fluctuation in the market rates.

Bank-Lending: These are the most important forms of financial sourcing. These are generally for a shorter period of time but at times they can also be taken on a medium-term basis. In case of short-term lending, the companies are required to keep an overdraft which is given by the bank and the interest is charged accordingly on the given amount. This is generally done for a period of three years or less. The medium-term lending is done on a three to ten year basis. This sort of lending is done for the larger companies according to a set margin depending on the riskiness and credit-standing of the borrower.

Leasing: In this form of financial sourcing, there is an owner of an asset who allows another person to use it. Here, the user is responsible for the equipments granted. (Metrick, 2006)

Terms of Investment in Finance

Opportunity Cost

Opportunity cost gives the best possible alternative that could be considered in making the investment decisions of a company. The basic principle of economics is to consider the resources as scarce. Under the situation, opportunity costs refer to that cost which makes sure that there is optimum utilization of the resources. Let’s say a company invests a sum of 5,000,000 ADE in the training and research programs, then its effectiveness can be measured when the company analyses the consequences of spending the same amount in some other operational cost. So, before accessing the rue cost of any financial decision, calculation of opportunity cost is a fundamental.

Net Present Value (NPV)

The value of inventory changes for a company gradually over a certain period of time. The net present value is the actual present value derived from the cash flows over that period of time. It includes a specific discounted rate which is according to the rate at which the capital needed for a certain project could be returned. So, NPV is the total value that a particular investment in the firm adds value to that firm. If it is greater than zero, it is accepted or else rejected.
Internal Rate of Return (IRR)

IRR gives an indication of the quality of the investment. It tells the company whether they should make the investments or not. So, a good IRR indicates that a particular project gives a better yield as compared to the alternative investments. In general, IRR should be larger than the cost of the capital for adding value to a company. (Wilmerding, 2006)

Discounted Rate of Return

The discounted rate of return gives the expected rate of return of an investor from an investment.

Roles of Investment in Finance

Strategic Role: The strategies with respect to the investment in finance are based on its objectives. The strategic role of financial investment is to ensure that the policies implemented by the company eliminate all those elements that have no contribution to the financial success of the company. A company should plan its financial strategies in such a way that they are not only opportunistic in nature but also practically feasible. They are bound to avert risks to the maximum. A proper dissemination of the policies of a company is also a part of the strategic role of the financial investment. This keeps the employees on track of the financial restrictions of the company.

Operational Role: The operational role of the financial investment process is to restrict the company members from crossing the boundaries of financial distress. The operations should provide a platform for the future planning of the company. This is more prominent with maximum involvement of the manager. Another important role of the financial investment is the training of the members of a company to live up to the financial requirements of the company. This includes the budgeting process and the methodologies involved in maintaining the cash flow. All the assets and the debts should be managed as a part of the operational role of the financial investment. So, much of the balance sheet of a company owes its being to the operational role of financial investment.

Responsibilities of Investment in Finance

The financial investment of a company is bound to affect the stakeholders. A company lives on the expectations of many of its stakeholders. Even during tough financial times, the company should make sure that it is able to meet the stakeholders’ expectations. This has an adverse affect when the prices of the shares of an organization suddenly lower. A stakeholder would invest in a company when he is confident of the fact that the investment in the company would not let the prices go down. A company should therefore have a risk calculated amount that helps it in these periods. (Lerner, 2008)

I am a pre final year student at the Indian Institute of Information Technology and Management, Gwalior, India pursuing a five year integrated course (dual degree) leading to the award of B.Tech (Information Technology) and MBA. I am currently in the 9th Semester. ABV-IIITM Gwalior, a Deemed University, is an apex Institute, established by the ministry of HRD (Human Resource Development), Government of India.
The competitive environment at my Institute coupled with my inherent trait of trying to learn something new from each experience has made me come a long way in these four years. I have not only learnt to work under pressure and intense competition with some of the brightest students in the country but have also worked with an esteemed KPO called CBI Solutions in the meanwhile. This has given me the experience to get exposed to some of the most challenging marketing traits in the business. Moreover, I have been awarded first rank for IT and Entrepreneurship at the end of my 7th Semester.
I have been privileged to work at Polaris Retail Infotech Limited, Gurgaon from May to July’08. This taught me the practical application of relationship marketing as I saw the preparation of customer interfaces through their software Smart Store. This is visible at billing counters at retail stores of the fame of Shopper’s Stop. Also, I’ve been in the editorial board of my college magazine, La Vista for the past 3 years and eventually I hold the responsibility of the Chief Editor.

If you are not going to use your own funds to invest or set up in an Italian business then there are several options open to you. The first and most obvious routes are through your accountant (commercialista) and your Italian bank. You will need to make sure you have a detailed business plan and that it has been translated into Italian and is set out in an acceptable format. Italians can be very rigid in the way they expect things to be done, so it is as well to conform to that and present something in a format they recognise.

The perfect scenario is to have an Italian partner who knows the ropes and the people concerned, as Italy is still a country where the personal touch is invaluable when doing business.

Main Lending Types:
The following list shows some of the main lending tools available for business in Italy:

Mortgage
Lease
Secured loan
Short-term credit
Medium and long-term credit
Evergreen credit
Factoring

Grants and Incentives

Funds and incentives for businesses are available from the EU, the state, the region and the provinces. Research is key and it may take some time to discover what is available.

As well as any geographic considerations, the finance and incentives available can depend upon the type of business. The main incentives cover R&D, training, SMEs, new investment, export and international business and investment in manufacturing, training and research.

For women in business, as we have seen in the case study for Caserma Carina, there are special funds and incentives available (agevolazioni per l’imprenditoria femminile).

EU:

There are over 450 different types of grants available from the EU available from various EU bodies including the European Investment Bank, the Council of Europe and the European Commission. These are awarded according to location and business sector and a useful link is here.

ZFU:

Based on the French scheme, the Zone Franche Urbane (Urban Tax-Free Zones) is a new incentive launched in June 2009. It is targeted at new small or ‘micro’ businesses and focuses on the urban regeneration of very small areas in 22 central and southern Italian towns (see below). Setting up a business is tax-free, with no payments for ICI, income tax or IRAP for 5 years. In a press release, EU Competition Commissioner Neelie Kroes said: “The Italian measure will foster new business activity in deprived areas and thus boost local employment. In the longer term, the promotion of business activities will help engender positive development in vulnerable areas at both a social and economic level, without disproportionately affecting competition.”

The 22 Towns

Sicily: Catania, Gela, Erice

Calabria: Crotone Rossano and Lamezia Terme

Basilicata: Matera

Puglia: Taranto, Lecce and Andria

Campania: Naples, Torre Annunziata and Mondragone

Molise: Campobasso

Sardinia: Cagliari, Quartu Sant’Elena, Iglesias

Lazio: Velletri and Sora

Abruzzo: Pescara

Tuscany: Massa Carrara

Liguria: Ventimiglia

State:

Invitalia is the government agency for inward investment promotion and enterprise development dedicated to assist companies in all stages of the investment process, to support new business ventures and to enhance local development.

Invitalia’s Inward Investment arm promotes inviting business opportunities and strives for the success of each investment project. It is the single national reference point for advising companies eager to expand or to set up a new business in Italy by providing a full spectrum of services in all stages of the investment process.

The service kit spans from updated information on the business environment, to investment opportunities in specific sectors and business advisory services throughout the implementation process. Invitalia’s services are tailor-made, free of charge and confidential.

Region:

The different regions of Italy have their own economic policies. Some benefit from a wide range of EU structural funds while others offer their own incentives for SMEs. Globus is a platform for all the Italian Chambers of Commerce to aid Italian companies in ‘internationalizing’ their companies and has details of a range of regional grants which are updated regularly.

Some regions are more proactive than others. It is a good idea to do a web search see if the region you are going to invest in has any kind of grants or incentives available. One example of the kind of site you might find is from the region of Piemonte. The Piemonte Agency offers free advice to companies wishing to invest in the region and who manage the regional investment contract for Piemonte.

Province:

The regions are divided into provinces and these too can be sources of finance. Contact your local Chamber of Commerce to find out the latest details of any provincial funds available.

Breaking down the investment, investment holding and finally exit into its component steps is a good first step toward achieving your cash flow and wealth building goals from rental real estate. Next, providing the tools, information, processes, considerations, and vendor resources under each of the component step area is an effective way to assist the new investor or to improve the game of the proven professional or veteran investor.

To accomplish this investing goal, this article proposes an investment model. The models components are:

General Partner and Investor Preparation

Project Identification and Qualification

Business Plan Development

Operations

Marketing & Sales (Developing Investors, Buyers, and Tenants)

Purchase Contract

Closing and Initial Operations

Debt and Equity Financing

Investor Communications

Exit Plans

This model does not attempt to reduce the investment process into more “salient” points. Depending on the investment opportunity any given requirement can become very important. As a result, the association does not believe in providing a “simplified” view of the process.

Instead this model is developed intending to allow the investor (whether new or very experienced) to view the steps for a given area without the confusion and clutter of considering all the items simultaneously. In effect, the model makes it easier to eat the elephant a bite at a time and avoid choking on the entire beast.

Supporting this concept investors must identify a resource that will provide a comprehensive set of tools, market information, and other items outlined within this structure. The investor will then be able to step through these items as they approach a new investment, prepare for their first investment, improve the performance of an existing investment, or move toward an exit from an investment in a organized and thoughtful sequence.

The model will provide the structure to allow the investor to assure themselves that they have not overlooked any critical steps. Further, if you are investing through another group, the model will provide a means for the novice or less involved person to more effectively assure that the correct steps and risk mitigation is in place protecting their invested capital or to make a decision not to invest in the opportunity.

Investors should avail themselves of all means possible to assure that they have mitigated risk, protected planned cash and income returns, protected their asset against catastrophic loss and have a thorough grasp of the issues. The investment model is an important tool for this purpose.

Mr. Ratcliff is a US Naval Academy graduate and past class president, former Marine Officer, residential / multifamily investor and and founder of the International Residential Real Estate Investors Association – http://www.irreia.org.

http://irreia.org/getmypaidmembership.htm

Being a successful investor is not hard but it is more difficult than it looks. What makes it more difficult is not acquiring the mental the skills you need, accounting and basic mathematics can be learned by anyone. What makes it difficult is the emotional or behavioural skills you need. The difficulty in mastering these skills is that the wrong approach is hard wired into our brains, making it very difficult to take the correct action.

Here are my 7 indispensable traits of a great investor:

1. The ability to seek and buy undervalued securities

At first glance this seems easy but it is not. Ignoring companies with upwards rocketing share prices while looking companies those share prices are hitting new lows is not easy. A current market example will be ignoring companies like Amazon (PE = 66) and Apple (PE = 22) and be looking at companies like the German insurance giant Allianz (PE 9) and other solid companies left behind in the current rally. This trait will result in you not being able to talk about your portfolio at cocktail parties because after mentioning your investments you will either get a blank stare or asked if you are mad and do not read the newspaper? I am immediately self excluded from hot stock conversations at cocktail parties. It does not bother me in the least as I invest to make money not to have something to talk about.

2. The ability to stick to your investment process

Even the most time tested investment processes under-performs in some years. In fact studies have shown that they can under-perform for up to three or four years. It is exactly the reason why Joel Greenblatt says that, in spite of the spectacular success of his Magic Formula, it will never become so popular that its effectiveness will be reduced. If you follow a time tested investment process and it is under-performing, by all means re-evaluate the reasons why it is under-performing, but be very careful before changing it. You may be changing at exactly the wrong time. Think of the value investors that started investing in internet stocks just before the internet bubble burst.

3. The willingness to learn from past mistakes

This is also harder than it sounds. Losing money on an investment is a painful experience. However working through your past mistakes provides the perfect opportunity to see where you went wrong and improve your investment process.

My best example is in 2007 my largest position Lambert Howarth went into administration. It was not so much the complete loss that hurt my performance it was the fact that I allowed the position to become a too large a position in my portfolio. Especially such a small company.

I also keep an investment diary where I write a short note on the reasons for buying as selling an investment. I have also started keeping track of investment after I sold them to see in order to compare my sell decision with the share price performance after I have sold. I review both on a half yearly basis and, if appropriate, make adjustments to my investment process.

4. Have the courage of your conviction

Once you have gone through your company valuation process and completed you analysis it is time to put your money on the table and invest. If the share price is moving against the market hitting new lows it is of course a reason to be careful, and a reason to make sure you have not overlooked something, but if not it is time to buy. Irrespective of what friends, colleagues or other investors may be thinking or doing. Because of my fear that it will get even worse, I missed the March 2009 lows and did not invest. That was in spite of me watching companies I have already analysed fall to ridiculously low prices. I am talking of price to earnings ratios of less than four. I watched the companies drop to price earning ratios of four and even two and still did not buy. But I learned from that experience, made changes to my investment process and I think I will be able to buy when it happens next time. Believe me it will.

5. Have a system for managing risk

Risk management is not rocket science. But you have to think of what your tolerance for risk is, write it down, and implement it as part of your portfolio management.

Things you have to think about:

That is the maximum percentage of your portfolio you want to invest in one company? Mine is 4% as I want a minimum diversification if 25 names in my portfolio.

Will you follow a strict stop loss system? For example sell at a 16% to 20% loss irrespective of what has happened. I have developed a semi-rigid system that works for me based on valuation and portfolio weighting. Its a bit too complicated to explain here but it will be part of a future article.

What percentage of your portfolio will you invest in one industry? I have a rule of about 20% but its not something I apply rigorously.

If you use multiple investment strategies do you have a limit as to that percentage of your portfolio should be invested in each. For example if you follow a low price earnings strategy what is the maximum percentage you will allow to have room for other strategies such as low price to book companies? I do not have any limit with regards to any strategy.

6. Have the courage to sell

This point may seem obvious but it is not. I have fallen in love with a good performing company only to see the share price decline after reaching a new high. I am sure you know the feeling. In order to avoid this happening I re-evaluate the companies in my portfolio soon after the release of interim or annual results to see if there any fully or overvalued positions that have to be sold.

I also have a system in place where I review a position after an increase of 50% and 100%.Usually however this problem takes care of itself. I do not like having more than 30 companies in my portfolio. Should I thus want to add a new position I have to decide what position to sell before the new company can be added. This process results in new undervalued positions being added to my portfolio all the while at the same time getting rid of over or fully valued positions.

Also remember, the lowest risk profits in any position are made when a company moves from being undervalued to fairly valued, as this is the time when you have the largest margin of safety. Holding a security with the expectation that it will move up in price from fairly valued to highly or overvalued is risky as downside protection i.e. the amount of undervaluation is gone.

I learned the above traits over the 20+ years I have been active in investing. Some were learned with financial losses, something I hope I can help you avoid. Investing is not rocket science. It has more to do with common sense than most people realise. If you have answered the important questions and have a system in place to take care of the ups and downs you can be certain of acceptable investment returns over time.

Tim du Toit is the editor and founder of Eurosharelab. He has more than 20 year of institutional and personal investing experience in emerging and developed markets. Tim is based in Hamburg, Germany. More of his articles can be found at http://www.eurosharelab.com

Corporate bonds are issued by both public and private companies. When an investor purchases a this type of bond, in effect, the investor is lending money to the company. Companies use this money to purchase necessary items or pursue business expansion. In return for investors investing money, the company pays investors a predetermined rate of interest. On the date that the bond matures, the company gives the investor the money back plus interest. Some of the benefits of this type of investment include the following.

Excellent Yields

Corporate bonds often offer much higher yields than other types of bonds. Granted, there are also higher risks. The higher level of risk is definitely something that the investor must take into account. However, if the investor can tolerate more risk, they can be an excellent investment opportunity.

Steady Income and Ease of Knowing Risk

If you seek income that is steady and if you are interested in preserving the principal, these company bonds offer a good opportunity to do that. Also, they are usually rated based on the credit history of the company and the company’s ability to repay its obligations. The higher the rating, the safer a corporate bond is likely to be. It is an easy matter for investors to know how high a rating is. Thus, in this way, an investor can know exactly how much risk he or she is taking during the investment process.

Diversity of Investment

Those interested in investing in corporate bonds can choose to invest in various sectors. The investor need not limit himself or herself to one investment sector. This is helpful because diversification can be a good way to reduce the risk of investing in this type of bonds.

Liquidity

In the event that an investor decides to sell a bond before it matures, the investor can usually sell the bond quickly because of the large size and liquidity of the corporate bond market. The fact that an investor can sell quickly makes it comparatively safer to purchase corporate bonds. This makes corporate bonds a good investment opportunity.

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.

When starting out on your investment journey, one of the critical stages involves setting the foundations. In fact one of the most common questions I receive from clients is… OK, you’ve convinced me that property investing is the way to build serious wealth. So where do I start?

Step 1 is (unfortunately) the most commonly ignored phase in the property investment process. What is Step 1 you ask – it’s establishing a plan.

If you don’t know where you’re going then any road will get you there (as they say)! The moral to this story is that you must set goals and have an investment plan, unlike me when I first started… investing based on ’spur of the moment’ decisions. It cost me many thousands of dollars BUT more importantly it taught me some very expensive lessons, lessons I have never forgotten. This is a good example of failing to plan.

The ’silver lining’ on this cloud was that I was able to use the capital losses to offset future capital gains thereby reducing my future tax liability, although there are much more effective ways to legitimately minimise tax.

Imagine meeting up with yourself in 15, 20 or 25 years. How would you like to see yourself? How would you like relatives, friends and business colleagues to see you? This process requires that you think about and start with your destination in mind and seriously consider how you would like to be remembered.

Once you are able to clearly visualise that, you are much more likely to be able to describe how you would like to live. Answers to these questions should be reflected in your values and your values must be written.

This process should include:

- Establishing your goal(s) – be specific: you’ve likely heard about S.M.A.R.T. goals (ie they should be Specific; Measurable; Achievable; Realistic and Time Bound) – Preparing a budget

- personal cash flow and balance sheet: you’ll be amazed at just how much money you waste. In fact many of my clients find that the money they can save, allows them to purchase either their first OR another investment property

- Designing an action plan. Include all specific actions required to achieve your goal(s): yes, this is a painstaking task BUT one that’s well worthwhile. What you are doing here is breaking down your goal(s) into ‘bight-sized’ chunks

- Persist – most folks give up… don’t be one of them: many folks give up just because they are faced with a challenge – that’s the reason approximately 95 percent of people end up dead or dead broke

- Find a mentor – someone who has already done what you want to do… this will fast track your success. As I always say: you will pay for your education one way or another, either learning through very costly mistakes OR paying for your knowledge!

My philosophy is always to find someone who has the knowledge and experience and pay them to teach me. It’s much quicker and far less expensive. In fact it’s an investment in yourself and that’s extremely important.

Want to learn more about Real Estate Buyers Agents and how to develop amazing property strategies? Claim Garry’s popular Free Report: ‘The 7 Most Costly Mistakes That Property Investors Make And How To Avoid Them’ identifying strategies you can implement immediately guaranteed to save you thousands, available at: http://www.ifyl.com.au

Last week I took my car into the repair shop. It was a new repair shop and I had quite frankly been putting off going to this shop, even though it had been highly recommended.

Friends told me about their positive experiences, how the owners were conscientious, very reasonably priced and that I would get far better service than the at the auto dealerships. Yet for some reason I put it off going to see them until my car finally died last week.

Isn’t that just human nature? We wait until the situation seems hopeless to change whether an auto mechanic or something as important as an investment advisor.

Why? The answer is simple! The devil you know is more comfortable than the devil you don’t.

If you are experiencing pain today, why risk experiencing even more pain? We tend to focus on the negative rather than the positive a change could bring us.

How many individuals are doing the same with their investment advisors in a dangerous game that could affect your financial future? You may be saying to yourself, “but my advisor did well last year.”

That may be true, but the bigger question is how did he do in 2008? We are in a secular bear market and stock indexes moves, both up and down, are exaggerated. Big market moves up are followed by big moves down and vice versa. The overall trend of the market according to Crestmont Research during these periods is basically sideways, see Secular Stock Markets Explained at CrestmontResearch.com

Did you know the market averages as measured by the S&P 500 dropped some 54% in the 2007-2008 bear market? Let’s say you were fortunate enough to capture the full 60%+ recovery in the market from the March 2009 lows to date. Did you know that you are still more than 25% below where you were in October 2007, assuming you stayed completely invested throughout that time period?

Did you know that the rally off the March 2009 market lows already ranks as larger than any bear market rally from the depression-era? See the Chart of the Day – Depression-Era Bear Market Rallies.

Now this rally may continue for the next one or two quarters, but let’s face it nothing goes straight up. If your advisor hurt you in 2008 and has not done anything to change his/her investment process its time to move on or at least diversify your asset management between multiple advisors.

Finding an investment advisor that can earn high returns in a strong bull market is not your challenge. It’s finding an advisor that will protect your capital when markets are colliding. That is the challenge!

An author, Certified Public Accountant and Personal Financial Specialist, Jeff Diercks has helped high net worth and institutional investors grow their investment assets in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in trend following investment strategies.

InTrust Advisors has a multi-day email series that might help called “Five Days to a World Class Investment Advisor.” This email series may be just what you need to get you motivated to secure your future today. You can sign up at http://www.InTrustAdvisors.com.

How would you like to make a big heap of money, and maybe even become the owner of a few hot properties at a fraction of their market price? Dumb question, right?

Who wouldn’t want to sit back and relax at home, knowing that they have a guaranteed profit coming their way? And everyone would love to own a few properties in desirable neighborhoods, that can bring in even more cash through rental income – when you’re not using them to enjoy a vacation, that is!

We all know that times have been hard lately, but there’s a little-known way to make the economic recession work for you instead of against you. This investment opportunity can actually make you more money when the stock market and real estate market are low! To find out how that’s possible, just read on to learn a little more about this unique low-risk, high-return investment opportunity.

Have you ever heard of tax liens? The idea is simple: when someone owns a property, they have to pay taxes to the county in which the property’s located. If the owner doesn’t pay those taxes, the county places a tax lien on the property. You can get more detailed information from our website, ebook and resource list later, but those are the basic facts right there.

So how does this make you rich? Well, the county doesn’t like to sit around without getting its money back, so it can sell the tax lien certificate to make up for those unpaid taxes. And this is where you come in – if you buy the tax lien certificate, then the homeowner now owes you money, plus interest! When they pay, you’ll have made a great profit on your investment. And if they don’t pay, you get to keep the property!

Sounds like a dream, right? Well it’s all for real, and it’s easy to start investing. Here’s a few more amazing facts about tax liens:

The county places a guaranteed minimum rate of interest on the tax lien, so you know you’ll make a profit.

The interest is collected for you by the government – you never contact the homeowner or deal with any other companies involved in the property.

As the holder of the tax lien certificate, you’re first in line to get paid – before the mortgage company, before the home equity loan company, before everyone!

Never invested before? You can be confident about tax lien investments. They’re not difficult, and we’ll tell you everything you need to know, every step of the way. We’ll tell you the secrets of the trade and supply you with all the necessary information to be a successful tax lien investor. You can also get an e-book that includes a state-by-state guide to interest rates and investment processes, as well as a useful list of resources to help you research and choose your investments.

So what are you waiting for? Come join us and take the first step toward a better future! For detailed information about tax liens and a step-by-step guide to investing: http://www.taxlienshomes.com

For a handy guide to the market value of properties in the USA: http://www.zillow.com

Any investor who sincerely works towards making the most of the current market trend will never underestimate the importance of having an investment strategy predefined before he starts investing. Investment environment is increasingly becoming complex and encompass various kinds of marketable securities. Nevertheless, importance of a well-defined and suitable investment strategy cannot be underestimated.

An investment strategy defines how an investor should go about choosing securities to invest in. It is a basic guide for where to invest, when to invest and how much to invest. There are five important steps in an investment process which should not be neglected. They are:

1. Defining an Investment strategy/policy
2. Analyzing securities
3. Constructing a portfolio to minimize risk
4. Evaluating the performance of the portfolio, and
5. Revising the portfolio

An investor cannot define his investment strategy unless he defines his investment objective and investment surplus to his disposal. Objective of ‘making more money’ is very vague. Of course everyone wants to make more money! Objectives have to be clearly defined in terms of risk and return. Understanding the relationship between risk and return will go a long way while building a portfolio that can provide optimum returns for the amount of risk an investor can take.

A commonly neglected aspect while choosing a venue of investment is the individual tax status. It does not make sense for a tax-exempt investor to invest in government securities or other tax-exempt investment options.

The second step of analyzing securities enables the investor to distinguish between underpriced and overpriced stock. Return can be maximized by investing in stocks which are currently underpriced but have the potential to increase (remember buy low sell high). There are two approaches used for analyzing securities; Technical analysis and Fundamental analysis.

Technical analysis involves studying the trends of stock prices movements. Technical analysts claim that by studying recurring trends and patterns in price movements it is possible to predict near term price movements. This is based on the assumption that price trends and pattern repeat themselves.

On the other hand, fundamental analysts believe that intrinsic value is equal to the present value of all the cash flows that a firm expects to gain in the future. Present value is therefore computed by forecasting the timing and amount of future cash flows and discounting these by applying an appropriate discount rate. A stock is considered undervalued and worth investing in only if this intrinsic value is reasonably less than the stock’s current market price. This is based on the belief that mispriced stocks will be corrected by the market at some point of time in the future, and that underpriced stocks will appreciate and overpriced stocks will depreciate.

To read more, please refer to http://understandingbasicsoffinance.blogspot.com/.

Geetika