Investment Articles

Maybe some of us want to believe that it does not take money to make money. I would like to believe it too but so far, I found that it is more real when I use money to make money, and it is much easier too. Right now, if you are investing and you have all the intention to let your money make money, then I will share two simple tips with you.

But I do not make any guarantee on the end results here. It may vary according to how well you apply them.

The First Tip: Create More Winners.

‘Winners’ refer to your investment that gives you positive returns. Now, the only concern here is return on investment (ROI). You may use a high risk portfolio, slow but safe return investment vehicles, and other kind of investing but the bottom line is; it gives positive return.

Once you have identified a winner, you can duplicate the process and acquire more winners. It may take a while for you to select one successfully but in the end, it will pay you in spades.

Along the way, you probably going to make mistakes and wrong decisions, but you need to take it as a lesson. The faster you learn, the faster you can reap the reward from your investing effort.

Perhaps, you can skip the learning curve faster by having experts to guide you or get yourself educated. There are resources you can tap into with some research. An expert used to advice other investors, “Train your brain to see what your eyes could not.”

The Second Tip: Cut Your Loses

This tip is so obvious but in reality, people like to keep a losing portfolio, hoping that a miracle will happen and turn things around to their favor.

But the wise knows that, “Chances favor the prepared mind.”

The prepared minds are willing to let go of the losing portfolio when the situation calls for. They rely on hope after they have made enough ‘calculated-risk’. In fact, they would not jump into an investment if they did not devise the way out first.

Find winners and kick losers; this is probably the smartest investment tips to have your money make more money.

Like what you read here? You can find more useful articles when you go here right away: make money ideas

It just hit me one day! There are all of these online investment sites urging you to invest, invest, invest, or apply for a loan, apply for a loan, apply for a loan! Really, these online investment sites seemed to just appear out of almost nowhere and they also seemed to be everywhere.

I initially found these sites to be just plain old annoying when they first exploded onto the scene. The advertisements began to blur together in my mind, due to the sheer volume of different company names and slogans, I can only suppose.

Well, one day it kind of dawned on me. YOU (the consumer) could use these sites to make some PASSIVE MONEY! In my opinion, that is the absolute best and most rare form of cash!

How is it done, let me tell you. In just 2 sentences.

Here it goes:

Approach one of these flashy online investment/loan sites and request a loan of a certain amount of money. Get the money and then re-invest the money back into the site.

Yep, it’s that easy.

However, there is an important point that you cannot miss! You need this key concept to make the investment work for you! You must re-invest the money into investments with the online site that have a greater return (interest rate) than the loan you took out!

Now, here is the FUN math part! The greater the difference between the interest rate of the investment and the interest rate on your loan, the more PASSIVE CASH YOU WILL MAKE!

An example, you get a loan from X online investment site for $10,000 at an interest rate of 10%, for a term of 2 years.

You take all of this money and re-invest it into X online investment site, making sure that the investment has an interest rate that is greater than 10% (remember the investment has to have a higher interest rate than your loan for this to work).

Back to the example, you re-invest the entire $10,000 into an investment with X online investment site at an interest rate of 15%, for a term of 2 years.

Here is how it works out:

Once the 2 year investment/loan term is finished, what exactly will you have?

Loan:

$10,000 times 10% = $1,000 times 2 years = $2,000

$2,000 plus $10,000 = $12,000

So, after the 2 years passed, you would have paid $12,000 in total for your loan.

Investment:

$10,000 times 15% = $1,500 times 2 years = $3,000

$3,000 plus $10,000 = $13,000

So, after the 2 years passed, you would have made a total of $13,000 on your investment.

For your profit? As usual, investment dollars minus loan dollars.

$13,000 minus $12,000 = $1,000

$1,000 profit.

AND THAT IS $1,000 PASSIVE DOLLARS! THE MONEY WORKED FOR YOU, YOU DIDN’T HAVE TO DO ANYTHING!

Now that is what I call, the perfect online investment idea! And it can be explained in just 2 sentences!

Lisa Kai Lee is a 30 year old wife living with her husband in the Los Angeles area. Lisa Kai Lee has a website http://www.lisakailee.com that is filled with useful information that you just might need to know someday! SMART TIPS FOR SMART PEOPLE Visit and subscribe!

Under normal circumstances the recession of 2008-2009 would be completely over now. Unemployment would have returned to somewhere between five and six percent. People who lost their jobs before the bank and financial crisis would have either returned to similar jobs or embarked on new careers, and people would have started thousands of new businesses.

Why hasn’t this happened? One word: Uncertainty.

There are so many changes taking place in government right now, and so many potential changes being contemplated, that substantial numbers of people – individuals and employers – are unwilling to invest right now.

This presents an opportunity for the prudent and thoughtful investor.

Opportunities exist because investments that under normal conditions sell for far more than current, are underpriced. What will environmental regulations be? What will financial reform bring? What is happening with health care costs? These are all perfectly legitimate questions.

But…

Whatever the future conditions are going to be, the best run companies are going to respond to them properly, and to a more successful degree than their peers. So while the future is not guaranteed by any stretch of the imagination, the proper response is not to blow off investing now.

The proper response is to determine which companies are best positioned to benefit regardless of changes and circumstances, AND which companies have the most effective management at dealing with issues, changes, and market conditions. These are analysis we are constantly (and successfully) performing for our investment clients.

Since the shares of many of these companies are undervalued, and since they frequently pay dividends in excess of current bank and bond rates, the smart thing to do is make investments now in HIGH QUALITY companies because: 1) They will thrive in the future environment(s), 2) their share prices are cheap now, and 3) because the cash flow from dividends exceeds what can be earned elsewhere.

This is a winning risk reduction strategy. This is also a way to increase your rate of return and likely reduce your taxes. What has your investment advisor done for you lately? Invited you to a wine tasting? Sent you an expensive gift? Or produced winning investments for you through a sound and effective strategy?

Over the years, investors have viewed diversification as the one “true free lunch.” Indeed, asset classes such as global stock markets, real estate, timber, commodities, managed futures, and other alternative assets – have served their proponents well. On the other hand, some analysts argue that the diversification benefits fall apart at the worst possible moments. This seems to be true, as witnessed by the recent financial crisis, which saw well-diversified portfolios decline by -25% or more. How can both sides of the argument be true? Is there anything an endowment or institutional investor can do?

Using the best practices from institutional investing and hedge fund strategies – and applying a mathematical and scientific approach to improve statistical and risk management concepts – can maximize the use of information and available diversification potential. It is useful to apply theoretical approaches in a sensible manner to ensure practical and robust results in our pragmatic world. The result is a more complete model that combines Monte Carlo analyses, Post-MPT, and more meaningful risk measures. Below, are a few thoughts on these statistical measures and methods.

Global Stocks, Rising Correlations, and Semi-Correlation

Starting in the 1980’s, international stocks were the hot investment category. They added diversification to a well-diversified portfolio. The Japanese stock market moved from about 10,000 to around 40,000 during the 1980’s and helped spur interest in foreign stocks. U.S., European, and Asian stock markets have always been correlated to one another, but correlations were normally in the 0.4 to 0.7 range before the mid-1990’s.

Mean-variance and other Modern Portfolio Theory models were “happy” to see these relatively low correlations. Portfolio optimizers showed you could increase your overall equity exposure slightly, allocate a material amount of your equity exposure to other regions around the globe – and still increase your portfolio’s overall risk/return characteristics. Over the years, international stocks (instead of just a home country’s stocks) have served diversified portfolios well.

However, as with most good ideas, the benefit of international stocks dwindled over the years. Mathematically, there will always be some benefit to global stocks, but the numbers show a generally increasing (rolling) correlation levels over the years. Correlations between foreign stocks and the S&P have risen from an average of about 0.5 or 0.6 in the late 80’s and early 90’s (when international stocks started to become popular) to current levels of around 0.8 or 0.9.

Key Takeaways:

Correlations amongst global stock markets have generally risen over the years; diversification benefits declined.
Interestingly, there are spikes in correlation, especially at times of financial crisis. Note 1987 Crash spike, as well as the very high correlations during the current recession.
The previous bullet point quantifies the observation of many investment analysts: that the diversification benefits of many asset classes are less than expected.

Semi-Correlation

In general, we have seen that markets sometimes decline together – and diversification benefits dissipate – at the worst times. When there is turmoil, markets become more correlated, as portfolio managers cut losses and try to maintain liquidity. I have developed proprietary indicators (* is one example, below) to determine if diversification might really help in times of need.

Correlations & Semi-Correlations for S&P 500 and Various Sectors (1987-present)

Correlation Nasdaq-S&P = 0.84
Correlation Europe-S&P = 0.80
Correlation Asia-S&P = 0.69
Semi-Correl(*) Nasdaq-S&P = 0.95
Semi-Correl(*) Europe-S&P = 0.93
Semi-Correl(*) Asia-S&P = 0.82

I sometimes mention “semi-deviation” as a better overall risk measure than standard deviation (because it measures downside risk). Semi-correlation is a similar approach that takes some of the noise out (noise due to upside moves / correlation) and tries to measure “times of trouble” more directly. From the chart above, we can see that correlations do indeed increase during financial market volatility. More specifically, the chart shows that when the S&P declined, the Nasdaq, European, and Asian markets were lower about 90% of the time. Indeed, if we study “material” declines, the diversification numbers worsen to closer to 100%.

Real Estate Correlation over Time (1982-present)

Real estate is another asset class that has provided good diversification over the years, with a long-term correlation with stocks of around 0.1. Based on data from 1982 until the present, we have seen correlations rise from near 0.0 to recent correlations closer to 0.3 or more, with the recent financial crisis being closely related to real estate.

Summary

The correlation of some asset classes has risen over the years. In addition, history has shown that the actual benefits of diversification are lower than expected, due to markets declining together during market crises. Using a good set of tools can help investors get a more realistic understanding of the probabilities. These tools have uncovered some interesting relationships amongst asset classes and strategies.

In addition, the financial markets and world around us are constantly evolving. The value of a good idea often declines over time. What will be the next great investment idea? It is important to constantly improve to stay competitive in our fast-moving world. Continual research and a collaborative effort, with an empowered investment team, can help an organization stay ahead of the crowd and achieve good risk-adjusted returns.

Carlton Chin, CFA, is an MIT-trained quant who enjoys applying numbers to everything from the financial markets to sports analytics. He has worked with institutional investors on portfolio optimization and as an alternative investment strategy proprietary trader.

Carlton been featured in the NY Times, Wall St. Journal, MARhedge & Financial Trader. He holds both undergraduate and graduate degrees from MIT. http://www.CARATcapital.com

Investment tips are very important to consider especially for beginners. This is a way of guiding what to do or what kind of investment to choose. With the right basic foundation of knowledge, a beginner can build from there towards a deeper understanding of how to invest and what types of investments they might be interested in, and most importantly how to make the most out of their money.

Most forms of investing involve some form of monetary risk. That being said, it’s important that you invest only the amount that will not hurt you too much if you end up loosing it. It is necessary that you think positively but not to the extent that you assume that after your first investment, you’ll be rich in an instant. That is one of the many mentalities that people have when it comes to investing. Investments can either be risky or risk-free. Greater risk of losses tends to mean greater possibilities of greater gains. The risks and possibilities go hand in hand in risky investments like stock investment. People prefer to invest on stocks because it can give much higher returns compared to other investments. However, if you can’t handle losses, it is best to go with a less risky form of investment, or a risk-free investment vehicle.

Stock investment is just one of so many kinds of investments that you can choose from. You can also invest in businesses outside of the stock market, foreign currencies on the Forex, real estate, annuity payments, and many other things. Whatever investment you prefer, conducting research and gathering information from reliable sources would be of great help; this is called due diligence. It is a must to remember that you have to experience the ups and downs of investing for you to completely understand how it works and learn the perfect strategies so you can advance in your investing abilities, and reduce future losses.

Please read my Hub for more investment tips.

Van Eck responds to popularity of small-caps in Brazil with a wider net of Latin American stocks while First Trust creates the BICK, an emerging markets play swapping Korea for Russia.

First, the innovative Van Eck family of ETFs has introduced a Latin America Small-Cap ETF ( LATM – news – people ) to build on its popular Brazil Small-Cap ETF ( BRF – news – people ).

Brazil dominates LATM with 43% of the basket, followed by Mexico at 23% and Canada at 19%. The small-caps in this new basket remind me of what a small-cap represented when I started in this business with Robert W. Baird: with a market cap of at least $150 million and meet certain liquidity requirements. Coupling LATM with large cap regional ILF could be a powerful double-barreled shotgun aimed at Latin American growth.

Next comes a First Trust spin on the BRIC concept by throwing out Russia and replacing it with South Korea (NYSE: EWY) one of my favorite emerging market holdings. The First Trust BICK Index Fund (NASDAQ: BICK) began trading this week.

To some, adding South Korea will seem odd since it is now leading the group of 20 and has a per capita far higher than India, China and Brazil. In fact South Korea has a GDP roughly equal to that of India though its population is about 5% of India. South Korea’s future is closely tied to growing with these countries and adding it into this grouping should add balance and lower volatility and risk. Another aspect I like is that each country receives an equal 25% allocation in the index, consisting of up to 25 stocks, which are also equally weighted. It would be better to have more of a concentrated approach with a total of 40 stocks.

Currently, BICK has 87 holdings, and the top 10 holdings all have weightings of more than 2%. The largest sectors are: Financials 24.8%, Technology 22.1%, Materials 13.4%, Industrials 9.6% and Telecommunications 8.5%. The top holdings, all from India, are Icici Bank ( IBN – news – people ), Satyam Computer Services ( SAY – news – people ), Tata Motors ( TTM – news – people ), Patni Computer Systems ( PTI – news – people ), and Infosys Technologies ( INFY – news – people ). The new ETF will have an expense ratio of 0.70%.

More information can be found at the First Trust homepage contains links to the BICK fact sheet and the Investor Guide.

Finally, Schwab’s eight low-fee ETFs have reached cumulative assets of $1 billion: –Schwab U.S. Broad Stock Market (SCHB), 0.08% expense ratio:

–Schwab U.S. Large-Cap (SCHX), 0.08% expense ratio

–Schwab U.S. Small-Cap (SCHA), 0.15% expense ratio

–Schwab International Equity (SCHF), 0.15% expense ratio

–Schwab U.S. Large-Cap Growth (SCHG), 0.15% expense ratio

–Schwab U.S. Large-Cap Value (SCHV), 0.15% expense ratio –Schwab International Small-Cap Equity (SCHC), 0.35% expense ratio –Schwab Emerging Markets Equity (SCHE), 0.35% expense ratio

Carl T. Delfeld is the publisher and author of “Around the World with ChartwellETF.com,” a weekly newsletter focused on using ETFs (Exchange-traded Funds) to take advantage of the investment opportunities offered by Global and Emerging Markets and providing recommendation for building a global investment portfolio. Visit http://www.chartwelladvisor.com to view recent featured articles and investment advice.

Spanish banks are borrowing record amounts from the European Central Bank as the country’s financial institutions struggle to gain funding from the global capital markets.

Spanish banks borrowed €85.6bn ($105.7 billion) from the ECB last month. This was double the amount lent to them before the collapse of Lehman Brothers in September 2008 and 16.5% of net eurozone loans offered by the central bank.

This is the highest amount since the launch of the eurozone in 1999 and a disproportionately large share of the emergency funds provided by the euro’s monetary guardian, according to analysis by Royal Bank of Scotland (RBS) and Evolution. Spanish banks account for 11% of the eurozone banking system.

This just reflects Spain’s struggle to hold things together and the acute stage of Spain’s liquidity crisis. The exchange-traded fund iShares MSCI Spain Index (EWP), which corresponds to the price and yield performance of publicly traded securities in the Spanish markets, is down -24.6% this year.

This is coupled with a no growth economy that at its peak in 2006 relied on tourism and housing for 25% of GDP. Housing starts in 2006 were greater than Italy, Germany, France and U.K. COMBINED.

R&D only accounts for 1.3% of GDP. High school graduation rate is 1/2 EU average. Adjusted for GDP, Spain’s unsold housing inventory is 6 times that of America. Spain does not even have one university in the world’s top 150. Unemployment rate is 22%. Budget deficit is 11.5% of GDP. Total debt is 270% of GDP. Credit downgrades equal higher borrowing costs equal debt spiral. Looks like Spain has some work to do.

Carl T. Delfeld is the publisher and author of “Around the World with ChartwellETF.com,” a weekly newsletter focused on using ETFs (Exchange-traded Funds) to take advantage of the investment opportunities offered by Global and Emerging Markets and providing recommendation for building a global investment portfolio. Visit http://www.chartwelladvisor.com to view recent featured articles and investment advice.

The New Philanthropists

Many philanthropists today want something that charitable donors a few decades ago never asked of their beneficiaries: A stronger voice in how their contributions are spent. People are much more astute and sophisticated about holding nonprofits accountable. It’s very easy to look up the tax returns of similar charities on the Internet and then ask, ‘Why are you spending 35% of every dollar on administrative costs when this other charity only spends 25%?

New Generation Takes Over

But the desire for accountability is just part of what makes today’s philanthropists different from those who gave in the past. They also want to perpetuate the same entrepreneurial values that, in many cases, gave rise to their fortunes. To them, contributions should provide measurable returns.

People are looking at donations not just as contributions, but as investments in a solution. To this point, a growing trend toward strategic, ‘investment-like’ giving aimed at maximizing societal return on investing. Philanthropists are now giving their charities the same kind of disciplined scrutiny they devote to stocks and bonds. These donors are consulting with their Investment Advisors to develop strategies designed to realize the maximum potential of their charitable dollars.

Blended Value Strikes a Balance

One of the more innovative examples of the donation-as-investment is “blended value” investing. It’s a form of strategic philanthropy in which you invest in a mission, and expect both a financial and a societal return. For example, someone may invest in a fund devoted to a particular cause, such as creating low-income housing. The investor would receive a fixed rate of return much like he would from a money market or bond fund. However the rate would be lower than that of a conventional fund because part of the return would contribute to the specified cause.

Donor Advised Funds Provide Flexibility

Other donation models with an investment-driven component include donor-advised funds, and family, or private, foundations. Gifts to a fund are donations to a charitable organization, which results in an income tax deduction. The donated assets can then be managed within the donor-advised fund, which is a tax-exempt entity. The primary attraction of these funds to involved philanthropists is that donors can plan and recommend the timing and amount of their gifts – and who receives them – at any time. And while the decision about how to spend the donation ultimately rests with the charitable organization which has oversight of the fund, donors’ wishes are strongly considered and are frequently honored, unless there is a specific reason to deny the recommendation. Of course, the receiving organization must be a qualified tax-exempt organization and the donor cannot receive an unqualified benefit from the charity.

A private foundation can provide an even greater degree of involvement and control, as family members actively manage the investments and grant-making strategies. While private foundations require added time, administration, regulatory oversight and costs to operate, they can be an excellent way to give money to a number of charities within a specified time or in perpetuity, according to the priorities the family sets. An Investment Advisor can be a key facilitator, explaining to families the resources and people (such as other professional advisors) they need to start a foundation.

Whatever philanthropic strategy a donor chooses, it’s important to set up regular meetings with a Financial Advisor to get your ambitious giving goals off on the right track. With open communication, donors are more likely to come away more informed about where their money is going, and more satisfied that it is being spent as intended.

The same premium on candor also applies to conversations with the groups receiving donations. Charitable organizations have become very responsive. They have to demonstrate how your donations will have an impact. It’s important for donors to have very focused conversations with the executive staff. Ask them to demonstrate how the impact of your donations will be measured, as well as how the charitable mission’s success will be evaluated.

Learn more about the charitable-giving products and services available through Frontwater Capital.

Jeff Kaminker PM, MBA, CFA, P.Eng
President, Frontwater Capital
Toll Free: 1-877-903-9031

The market has been largely news-driven of late, fluctuating to the tune of the latest headline. Stocks have been taking it on the chin, but the news is not all that bad. In fact, the news remains pretty good:

1. low rates
2. liquidity
3. good earnings
4. negative investor sentiment

The problem is that all of this good news is old news.

In the big picture, Greece, Spain and the rest of the EU will not bring down the world. The steps the EU, IMF and individual nations have taken recently are appropriate and should help resolve the crisis. Just this week, both the Germans and British announced additional austerity measures with large cuts in government spending. Yes, it will dampen the strength of the economic recovery – not only for Europe but also Asia and North America – but we already know the world is in a slow growth environment.

Stocks appear oversold right now, and should not “let go” quite yet. The big question will be consumer spending. The last few reports have shown moderate increases, and if that trend continues we’ve got a new bull market on our hands….but that’s not what I am expecting. My crystal ball shows a severe slowdown in spending, continued high unemployment and lower-than-expected GDP. That will lead to the dreaded deflation, which will be horrific for stocks. Regardless of the outcome, we remain alert and on the ready.

Investor Strategy

Different economic cycles require different investment strategies. Stocks do well during inflation periods but get hammered by deflation. Bonds do well with deflation but get crushed by inflation. And of course, during a crisis of confidence everything gets killed.

This is a very dangerous environment and investors must be prepared with a “tactical” investment approach. In addition and most importantly, there will be a time in the near future when you will need to be in cash, so you must have an exit strategy.

Keith Springer, President of Capital Financial Advisory Services a SEC Registered Investment Advisory Firm, providing Wealth Management and Mortgage Consulting Services. For more information on how to build and maintain a solid retirement plan, please contact Keith Springer at 916-925-8900 or keith@keithspringer.com, http://www.keithspringer.com

So you are planning to take your first step to invest in an investment company? Well, this is good news for you because at last you have realized that investing early in life is very important considering the present condition of the economy. Every individual needs to prepare for the future. And even if the economy is not stable, it is still vital to work on ways to be ready for the coming days instead of simply leaving everything to fate and destiny. When talking about investing, the best investment advice that you would hear from seasoned investors is that slow but steady profits are much better compared to instant big blast profit gained from an extremely impulsive and risky investment.

This is not to say that there are investments that are totally risk-free. Of course, all investments come with risk and that is a given! This explains the great need for sensible thinking and thorough research about the investment that you want to venture in. Gathering valuable information would be one effective tool to help you prepare better for your investment pursuit. In line with this, here are some essential tips that you need to focus on before choosing an investment offer:

• Choose an investment company that have the financial resources to support their target. All companies have visions for achieving success. When you choose one to invest in, you should be certain that you have thoroughly researched about their standing in the industry. Do not merely rely on the promises of providing investors with superlative returns (ROI). Look deeper and make considerable financial statement analysis. You need to be certain on their plans how to compensate their investors. Companies that you should invest in should have enough capital to pay their investors.

• Research about the company that you are interested to invest in. Look into records and ask around about that particular company so as to have enough idea about the direction where the company is heading to. In doing so, it would be easier for you to analyse if you should invest or not.

• Go for companies that have appealing and fascinating security price. After you have looked into the company’s background, you need to take the initiative to find out the present trading price of the company’s stocks. After you are done with the first two tasks, you should not miss doing this because this would be a differentiating factor if you are confused on which company should you invest in.

Every investment comes with risk, following these three investment advices would make it easier for you to choose which company is worthy to invest in and which ones should be given a second thought. You should keep in mind the advice of seasoned investors that a slow but steady flow of profits is much better than an instant “bombastic” gain that is not stable. With these tips, you would be able to distinguish which company is actually the best one to venture in for greater profits in the long-term.

Tono has been writing articles for nearly 4 years. Come visit his latest website over at http://uniquechesssets.org/ which helps people find the best unique chess sets and information they are looking when trying to improve their chess playing skills.