Investment Articles

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 investment market can be complex to navigate, especially for the novice, and knowing the characteristics and details of any product that you are considering investing in is an important step in building a successful investment portfolio. Structured bonds, which come in a wide variety of guises, can be particularly complicated.

What is a structured Bond?

Sometimes know as structured products, or structured deposits, they can be offered with the potential to generate a regular income or capital growth.

Such bonds are usually put together by the provider to suit the needs of a particular type of investor. This means that finding the right structured bond product for your needs will depend on your individual circumstances.

Different types of product will provide different levels of risk and return. Your investment will usually be linked to a particular index, such as the FTSE 100, depending on the structured bond product that you choose. This means that any return that you receive will depend in large part upon the performance of the index that your bond investment is linked to. The investment objectives of a structured bond product should be clearly stated and made available to the investor at the outset.

Structured bonds are usually taken out for a fixed period of time, this period can vary according to the product that you choose, from a matter of months, usually up to six years. Like other fixed term investment products you may be charged exit penalties if you wish to withdraw you money before the fixed period is over. This means that you should carefully consider the length of commitment that you are able to make, or you could end up losing out.

A plan provider will usually have your investment underwritten by a counter-party such as an investment bank. before embarking on a structured bond investment you should be aware of any compensation that you would be eligible for should the firm that you are invested with, or the counter-party go bust.

Sometimes structured bonds will be sold as “kick out” products. This means that if the index to which your investment is linked reaches a certain level, the products may be “kicked out” early, usually on the following anniversary. However, if this does happen you will usually have already received a certain level of growth on your investment.

Some structured bond products will offer a degree of capital protection, but yield may fluctuate. Investing through a structured product can often be a safer option than investing directly in stocks and shares, but it is important to remember that any risks involved should be carefully considered and you could end up getting back less than you originally invested.

There are many different types of structured bonds available, and negotiating the terms and individual characteristics associated with each product can be difficult without the help of independent investment advice, particularly for the novice investor. Nevertheless, structured products can bring greater diversity to your portfolio, and with the right advice you may be able to find a product that is suited to both your attitude to risk and your desire to generate a desirable level of return for your capital.

John T Hughes writes for Savings Bonds, a site dedicated to helping you to find leading savings or investment bonds options that may be suited to your needs.

When it comes to making long range investment goals for your future many first time investors want to jump in head first without having any prior knowledge of what they are doing. Eventually and unfortunately many of these investors never become successful investors and usually just give up. Investing in itself does require some level of skill and it takes time coupled with your ability to learn.

It is important to understand and remember that every investment that you make is not a sure thing in itself. There is always a the risk of losing money. However, your risk can be minimize if you take the time to learn and know when to take a loss and run! Before you dive in head first it is imperative to not only find out more how the investment game works, but to determine what your investment goals are.

The questions that you should ask yourself before taking the plunge are, what are the reasons that you are investing. Are you investing for long term or short term reasons? What are you trying to achieve with your investments? Are you investing for your children college education? Your retirement? A vacation? Buying your first home, etc? Before you part with a single red penny, think about these questions and write down what you hope to achieve by investing. Knowing what your long and short range goals are will help you make smarter and wiser investment decisions for you and your family.

All too often people invest their money with pipe dreams of becoming an overnight millionaire. I have been there too! I am quite sure that it has happen for a few people, but overall those types of opportunities are rare indeed. It is not a very good idea to start your investment portfolio with unrealistic dreams and goals of becoming rich overnight. It is always best to invest your hard earned money in such a way that it will increase slowly and safely over time where it can therefore be used for a child’s education or your retirement, etc.

Another strongly advised decision would be to talk with a financial planner before you make an investment. A financial planner can guide you in the right direction and help you determine the type of investments that you are looking for that will help you reach your financial goals that you have set. He/She can give you a realistic overview of the type of returns that you can expect and how long it will take to reach your specified goals.

Again, remember that investing for your future will take time and effort and your willingness to learn. Never entrust your financial and investment future to someone else. You must also do your due diligence and learn investment strategies for yourself as well. It will take your delving into and doing your research and acquiring knowledge about the stock market and other types of investments if you hope for your investments to be successfully.

M. Cunningham Is the owner and webmaster of Investment Top Tips. You will find lots of information and investment advice and tips plus loads of FREE products.

Click here to learn more about the basics of investing at…. http://www.investmenttoptips.com

What are the best Australian investments in 2011 and for the coming years? This article describes five of the best investments in Australian based on data and information provided by several of the leading advisers and institutions in Australia. While views and opinions may differ on the viability of these investments it is felt that these segments offer he best potential for a return on investment in both the short term as well into the foreseeable future. It should be noted that the information presented here is offered as opinion only and should not be considered as professional investment advice. For professional advice seek the services of a registered and licensed Australian financial adviser.

Property and Real Estate:
Property in both residential and commercial varieties remains a stable investment. Australian has seen significant growth in property values over the last ten years and this trend is set to continue into the future. In the second quarter of 2011 the Australian real estate market saw a 1.3$ increase in property values. The majority of experts in this are agree that a real estate bubble is not likely to occur making this a solid investment both today and into the coming years.

The Share Market:
The Australian Share market while affected by the global economy has not seen the major fluctuations experienced by overseas markets. Some of the hot share markets and segments to consider and those which are expected to increase in value over time are:

Energy

Financials

Health Care

Industrials

Materials

Telecommunication Services

Utilities

Managed Investment Funds:
Managed investment funds allow investors access to a professionally managed portfolio investments through a single security or contract. With managed investments an investor owns a percentage of the overall investment portfolio in consideration of the size of the investment and are therefore entitles to profit and dividend of the portfolio as well being subject to loss in circumstance where the portfolio values declines. As an investor it is important to compare the financials managed funds in order to determine their viability. Consult with a financial advisor to discuss various funds and management opportunities available to you.

While there are many more investment strategies to consider in Australia the three outlined here may be your best bet for the remainder of the year as well as into 2012. Remember to develop a reliable resource of research data and information to help make your investment decision informed ones.

Investing doesn’t need to be difficult. To quickly learn more about investing in Australia including shares and property investing visit http://investingaustralia.com.au

There has been a surprising, although not fully unanticipated, rise in the amount of alternative investors over recent years and various specialist investment companies now exist to cater for this demand by offering investments that are not only lucrative, but are also environmentally friendly.

Investing in our own planet is becoming big business these days and now there are a number of ways solo investors and larger companies and organisations can make money whilst concentrating on reducing their own carbon emissions.

Carbon Trading

Carbon trading is basically an economical approach to reducing pollution and the resultant build up of green house gasses in the earth’s atmosphere which in turn leads to climate change and global warming, and so far it has been very effective. Industries that emit pollutants into the atmosphere are now required to purchase permits to do so. The total amount they are permitted to pollute comes under strict controls. All industries must have these permits, and these permits are effectively carbon credits. Each carbon credit is worth 1 tonne of Co2 or the equivalent amount of emitted polutants.

This credit system encourages those who pollute to reduce their emissions, and when they do so they will have spare credit that they can trade to industries and businesses that need more credit to increase their own levels. This way the polluting business that buys the excess credit isn’t really adding any more Co2 to the atmosphere because they have purchased the credit from a business that has reduced their pollution level.

This trading provides avenues for investment by identifying those companies who are attempting to gain carbon credit by reducing emissions.

Pensions

Carbon credits are also a very popular choice for SIPPs (self invested personal pensions). Because only a few, very select investments are made each year, and the tax office allows for extra revenue to be made from SIPPs, there is a very good chance of excellent returns. If you’re going to put money away for your future retirement and you want an alternative investment, then you may as well invest it in something that will give you a good return and also protect rare Earth commodities for future generations too.

This is further enabled through investment specialists being able to offer short, medium and long term investments, with exit strategies in place to allow investors to get out when they want; very unlike collective investment schemes that don’t allow this type of management and manoeuvrability.

Select-Global is one of the most influential and innovative companies in the Alternative Investment and SIPP Investment arena.  We are dedicated to guiding our investors through the sometimes complex world of investment opportunities that the global Alternative Investment markets offer. Our mission is to provide the most up-to-date information and investment advice in the world’s most favourable Alternative Investment and SIPP Investment markets. We pride ourselves on the unparalleled levels of professionalism and the ethical services we offer our clients. http://www.select-global.com

“Your account is a brokerage account and not an advisory account. Our interests may not always be the same as yours. Please ask us questions to make sure you under-stand your rights and our obligations to you, including the extent of our obligations to disclose conflicts of interest and to act in your best interest. We are paid both by you and, sometimes, by people who compensate us based on what you buy. Therefore, our profits and our salesperson’s compensation, may vary by product and over time.”

The foregoing disclosure was part of a rule enacted by the Securities and Exchange Commission (”SEC”) in an effort to address an ongoing dispute about the disparity of standards for stockbrokers and investment advisers. The Financial Planning Association sued the SEC over the disparity and won, with the court striking down the rule and requiring that stockbrokers charging fees for investment advice register as an investment adviser.

The long-needed disclosure finally made the conflict of interests regarding stockbrokers very clear to investors. An SEC commissioned study by the Rand Corporation revealed that an alarmingly high percentage of investors mistakenly believed that it was stockbrokers, not investment advisers, who owed clients a fiduciary duty. A TD Ameritrade study resulted in similar findings. And yet the SEC did not require stockbrokers to continue to disclose the conflict of interests issue.

The recently passed Dodd-Franks Act included provisions which would allow the SEC to enact a universal fiduciary standard that would apply to anyone providing investment advice to the public. It is hard to see how anyone could legitimately argue against such a common sense requirement, as it furthers the express intent of the federal securities laws and the expressed purpose of the SEC, namely to protect investors. And yet Congress continues to stall and delay implementation of a universal fiduciary standard, even suggesting that yet another study should be done.

In an effort to help Congress and save taxpayers’ money, I conducted an informal survey of 210 people based on the following question – At the present time, investment advisers are required to always put a client’s interest first, but stockbrokers are allowed to put their own personal and financial interests ahead of their clients’ interests. Do you feel that anyone providing investment advice to the public should always be required to disclose any actual or potential conflicts of interest and always put their clients’ interest first? Of the 210 people polled, 100% answered in the affirmative, with many expressing surprise that this situation even existed. You are welcome Congress.

The SEC’s failure to continue to require the conflicts of interest disclosure for regular brokerage accounts highlights the need for investors to be proactive in managing their investment accounts. Not all stockbrokers are dishonest and not all investment advisers are honest. A healthy dose of skepticism never hurts. That being said, based upon my experience, I offer the following proactive strategies.

1. Always keep copies of all forms and documents that are filled out and/or signed. Documents have been known to disappear or change when questions come up.

2. Never sign blank documents and leave it to someone else to fill the document in.

3. Never give anyone discretionary control over investment accounts. Abuse of discretion is one of the leading complaints regarding stockbrokers and investment advisors. The potential risks simply outweigh any alleged benefit. If an investor is asked to sign a trading authorization so that a brokerage firm can accept orders from the investor’s broker or advisor, the investor should write “NO DISCRETION” on the form to avoid any confusion as to the power being authorized.

4. Read all account statements and correspondence received from a brokerage firm, a broker or an advisor. If wrongdoing is going on in an account and is reflected in the account statements or correspondence, failure to promptly notify the brokerage firm and to object to such questionable activity may prevent an investor from recovering any losses resulting from such activity.

5. Ask questions. Ask why certain investments are being recommended. Ask whether a purchase of a recommended investment product would result in a commission for the broker or the advisor making the recommendation and, if so, what the amount of the commission would be. Ask whether the recommended investment product is a proprietary product of the company that the broker or the advisor is affiliated with and, if so, ask whether the broker or the advisor can recommend similar non-proprietary products. Ask whether the recommended product has ongoing fees and, if so, how much those fees are. Even if an investor is turning the management of their investment account over to a money manager, the investor should continually ask questions in order to protect against losses due to “black box” asset allocation.

6. Consider all aspects of an investment. Some investors only look at the historical or projected return of an investment before making an investment decision. Investors should always consider factors such as the risk/volatility of an investment, the fees associated with an investment, and the tax aspects of an investment. This is particularly true when considering the purchase of an annuity.

7. Be alert to brokers and advisors possibly “working their book.” When business is slow, brokers and advisors may be advised to “work their book.” This may explain unexpected phone calls suggesting that an investor review their investment portfolio and reallocate their assets, switch mutual funds to buy funds from a different fund family, or perform an annuity exchange.

It is illegal for a broker or an investment advisor to make investment recommendations for the purpose of generating commissions. Certain practices should raise red flags for investors. Recommendations that an investor sell funds of one mutual fund company and buy the same or similar type funds of another mutual fund company should be questioned. Recommendations that an investor sell funds of one mutual fund company and buy different types of funds from another mutual fund company should be questioned if the original mutual fund company offers the same or similar type funds as those being recommended, as most mutual fund companies allow an investor to make internal fund exchanges without incurring new commissions.

Recommendations that an investor exchange one annuity for another annuity should always be questioned since the exchange will result in new commissions for the broker or the advisor.

Recommending that an annuity owner exchange annuities is especially suspicious when the current annuity is still subject to surrender charges, as the client would lose money as a result of having to pay surrender charges for the exchange. An investor who becomes aware of such practices should promptly notify the appropriate regulatory organizations.

8. Don’t be lulled into a false sense of security by an advisor’s credentials or designations. The number of letters after an advisor’s name does not ensure the skill or the integrity of the advisor. The most widely respected and recognized designation in the financial planning industry is the CFP designation conferred by the CFP Board of Standards. The CFP designation signifies that an individual has a certain level of experience in financial planning, has completed an extensive examination, and has complied with continuing education requirements.

Always ask for both Parts I and II, and all schedules, especially Schedule F, of an investment advisor’s Form ADV. Take the time to read the material to find out about the planner’s background and qualifications. Although registered investment advisors are allowed to use a disclosure brochure instead of their Form ADV, insist on the investment advisor’s Form ADV. Many disclosure brochures are nothing more than glorified marketing brochures, while the Form ADV contains the information the investment advisor filed with regulatory officials. Also check the planner’s records at the NASD’s web site www.nasdr.com.

James W, Watkins, III is an attorney, a CFP professional and an Accredited Wealth Management Adviser. His areas of expertise include wealth manageemnt, wealth preservation, wealth protection and fiduciary law. He is CEO of InvestSense, LLC, a registered investment adviser firm located in Atlanta, Georgia. For additional articles and information, visit http://www.investsense.com.” Mr. Watkins can be contacted at tawj3@yahoo.com and followed on Twitter @InvestSense.

In Part One of this article, we highlighted strategies that proactive investors can use to better protect their financial security. The strategies mentioned in Part One were more oriented toward the investment account as a whole.

However, most securities claims involve allegations of unsuitability and/or breach of fiduciary duty regarding investment products and/or investment advisory services. Given the number of investment options available to investors today, it is easy for an unscrupulous stockbroker or investment adviser to take advantage of an investor, especially an inexperienced investor.

The following strategies can be used by the proactive investors to avoid some of the more common complaints in securities claims.

1. Choose appropriate classes of mutual fund shares to reduce expenses. Fees and other expenses reduce an investor’s return. Therefore, no-load mutual funds and/or exchange traded funds should generally be an investor’s first choice due to their reduced fee structure.

If an investor chooses not to use either no-load funds or exchange traded funds, A shares and B shares are the only type of mutual fund shares most investors should consider. Many investors immediately lean toward B shares since they do not require the investor to pay front-end sales charges, or commissions. B shares, however, may not be the best choice for the long-term investor due to the higher annual fees associated with B shares.

Generally speaking, A shares are often a better deal for a long-term investor due to the fact that annual fees for A shares are typically less than the annual fees charged by B shares. If an investor has a large amount of money to invest, A shares often offer breakpoints to reduce any applicable sales charges.

Breakpoints are not generally offered on B shares. B shares are often a better deal for short-term investors, since B shares do not impose a front-end sales charge. While B shares generally carry higher annual fees and often impose deferred sales charges if an investor redeems the shares within a specified period of time, the holding period during which deferred sales charge are applicable is usually relatively short.

The investor’s ability to redeem B shares without penalty within a short period of time also allows the investor to minimize the effect of the higher annual fees of the B shares. Some mutual fund companies offer to convert B shares into A shares after a certain period of time has elapsed. Each investor must evaluate their own situation to determine the choice that is best for them.

Investors with managed accounts should always check to see whether their advisor is using A shares or B shares in the management of their account. In most cases, it is generally agreed that advisors should only use A shares in managed accounts due to the lower annual fees charged by A shares and the fact that most mutual funds offer to waive sales charges for A shares held in managed accounts.

Another factor favoring the choice of A shares over B shares in managed accounts is the deferred sales charges on B shares. Since managed accounts often involve frequent reallocations of the account’s assets, holding B shares in a managed account may ensure that the value of the investor’s account is reduced by the payment of deferred sales charges.

2. Use breakpoints, when possible, to reduce the commissions on mutual fund purchases. Most mutual fund companies offer investors a discount on front-end sales charges once an investor has invested a certain amount of money in their mutual funds. Most mutual funds begin to offer such discounts once an investor has invested a cumulative total of $50,000 in their funds, with additional discounts for certain levels of additional investments. Recommendations spreading investments among a multitude of asset classes may be cause for questioning, especially when large amounts of money are being invested and/or the recommended amounts are just below breakpoint levels.

3. Get more than one opinion. Medical patients are often advised to get a second opinion on major medical decisions. Decisions affecting one’s financial security are equally important. Unsuitable investment advice can drastically affect one’s life. Unfortunately, some people holding themselves out as financial planners and investment advisors may be more interested in selling insurance and investment products than in the quality of the financial advice they are providing.

4. Avoid the variable annuity trap. Without question, variable annuities are one of the most over-hyped, most oversold, and least understood investment products. A much publicized article in the Wall Street Journal reported that annuity salesmen at an annuity “boot camp” were instructed to treat potential annuity customers “like blind twelve-year olds,” and to tell customers that the annuities were “like credit cards.”

The NASD and the SEC are investigating various complaints regarding the sale of these investment products and have already imposed sanctions in some cases. The high fees and expenses associated with variable annuities, along with their lack of liquidity and their negative tax aspects, make them an unwise investment choice for most investors.

Annuities can also have devastating effect on an investor’s estate plan, resulting in most of the investor’s money going to the company issuing the annuity rather than the investor’s heirs and loved ones.

5. Don’t buy life insurance for investment purposes. A popular mantra among insurance agents is that variable life insurance is the “Swiss army knife of financial planning.” Anyone who hears such advice should look for another financial adviser. If an investor needs life insurance, then they should buy life insurance that guarantees the amount of protection needed, which is the intended purpose of insurance.

Life insurance is neither intended for or appropriate for investment purposes. The high fees and expenses associated with insurance are totally inconsistent with one of the basic tenets of investing, namely to minimize loss of principal so as to maximize the amount of money working for the investor. While it is illegal for an insurance agent to misrepresent the nature of an insurance product, recent cases involving the alleged misrepresentation of life insurance as retirement/ investment programs demonstrate the need for investors to get advice from more than one investment advisor to better protect their interests.

6. Beware of “black box” financial planning and portfolio recommendations. Many financial advisers will offer to provide customers and potential customers with financial plans or asset allocation plans. The price for such plans can range from free to thousands of dollars.

In most cases these are created with software programs based upon the input entered by the financial adviser. While investors are warned that “past performance is no guarantee of future returns,” and we scoff at fortune tellers predicting the future, that is exactly what is generally used in creating such plans, historical returns or “guesstimates” of future returns, resulting in the familiar “garbage in, garbage out” scenario.

Furthermore, such software programs can be easily manipulated to produce whatever results are desired. Most of the commercial software programs are based upon a financial theory known as Modern Portfolio Theory, which is known to have an inherent bias toward certain types of investments.

By manipulating the input data in favor of the preferred investments, certain results can be guaranteed. This inherent instability of such computer programs has led one expert to refer to such programs as “error-estimation optimizers.”

James W, Watkins, III is an attorney, a CFP professional and an Accredited Wealth Management Adviser. His areas of expertise include wealth preservation, wealth protection and fiduciary law. He is CEO of InvestSense, LLC, a registered investment adviser firm located in Atlanta, Georgia. For additional articles and information, visit http://www.investsense.com. Mr. Watkins can be contacted at tawj3@yahoo.com and followed on Twitter @InvestSense.

As stock portfolios continue to display volatility, many investors are now starting investigate alternative investments, with one area of particular interest being agriculture investments, or specifically farmland investments.

I think it is now particularly relevant to talk bring up that oft-used and rarely heeded piece of investment advice; “Past performance is no guarantee of future performance and investors should of course be cautious in the use of historical data when making investment decisions.”

Now the reasons for investing in real assets that produce essential commodities in perpetuity are sound. Population growth and rising incomes drive demand, whilst urbanisation, water scarcity, climate change and a host of other factors suppress supply, and these two fundamental trends converge to drive up food prices and with them, farm revenues and the capital value of farmland assets.

These, in my opinion, are the reasons to invest in agriculture, and although history and hindsight can demonstrate how these assets and markets have performed during certain conditions, the wise investor should perhaps look to the future, rather than the past to ascertain the likely performance of their holdings.

As witnessed recently in equity markets across the globe, the time frame used to provide data for predicting future events, is crucial. Rather than simply use the longest data set available, one is better positioned perhaps to use data from periods in time where economic conditions are most likely to be characteristic of future conditions.

A good example that has relevance to agriculture investments is the depression of commodity prices during the 1980’s, where a reduction in demand for food from developing countries resulted in the accumulation of large grain stocks. If you feel that in the future, demand from developing nations is likely to fall, then data from this period would be most relevant to use to project future commodity prices as you believe the same set of conditions will prevail. In this set of circumstance and taking this set of data, you would project that commodity prices and farmland prices would fall.

If you believe that demand for commodities such as food will continue to grow, as it did in the 1970’s, then you would expect commodity prices and farmland prices to rise as they did then, based on the assumption that the same set of circumstances in terms of supply and demand will ultimately prevail. Using this piece of historical data alone would lead you to believe that agriculture is a strong buy, and farmland investment assets will continue to rise in value.

Again, when making your own decision as to whether you feel farmland values will rise or fall (they will surely do both over time), you should base your answer on whether you feel that demand is likely to increase, and whether we have the capacity to increase supply accordingly. The answer to these questions lies in the present, not in the past and one could simply ask three very simple questions:

Will there be more people on Earth in 10, 20, 30 or 50 years?
Is there more land to produce crops to feed this excess?
If not, can we increase the amount of food we grow per hectare?

It is the answer to these questions that should define your opinion on asset values in the agricultural sector, standalone facts and statistics form the past.

Download the agriculture investments and forestry investment reports at: http://www.dgcassetmanagement.com

David Garner is Partner at boutique alternative investment boutique DGC Asset Management Limited.

For the new investor, participating in the stock market can be a daunting experience. Lack of knowledge and risk assessment are the major issues that face every investor, especially the beginner. Here are some ideas to consider:

Know before you go. Information is valuable. You would do well to learn about the area of investing in which you have interest. The library, the bookstore and the internet are good resources for gaining knowledge. A basic understanding of how things work will allow you to take your first steps with a greater degree of comfort.
Understand the process. Everything has a beginning, a middle and an end. What are the practical circumstances that may affect your risk and your value? How do they occur and when? Try to avoid following others blindly. Their situation may not be the same as yours. It is better to rely on your own knowledge and to build your experience level.
Read the prospectus. An investment fund has a prospectus which describes not only the objective of the fund but also the portfolio, the fees and charges incurred, the management, the nature of the risk, the valuation process, and how you put your money in and take your money out. There is an ongoing effort to make prospectuses easier for the public to read. Take some time to over the basics.
Ask questions. Someone besides you has asked the same questions before. The investment company, the broker, the regulatory organization or an informed third party knows the answer. Follow up on your concerns until you are satisfied.
Start small. You are more likely to make mistakes in the first part of your learning curve. Keep your investments small. You will pay a lower price for the cost of learning. Investing is not a guaranteed activity. Seasoned investors lose money–usually because of a risk taken rather than because they lack knowledge. Informed risk-taking is better than uninformed risk-taking. Small losses are better than big losses.
Start simple. There are many investments and strategies that are complicated. Invest in what you understand. It is not enough that someone has explained how things work. You should understand the investment completely. “I didn’t realize that could happen,” is not a pleasant admission for an investor.
Choose a suitable investment. What is your tolerance for risk? Everyone has their own answer. Determine your comfort zone and make sure that the investment choice matches. A good investment is one that you can stay with over a longer period of time.
Set a goal. How much is enough? What is reasonable? Ask yourself what you want from your investment and what is your time frame. Periodically assess your progress toward the goal. Are you on track or should you change your expectations? Further research may help you answer these questions.
Assume responsibility. When you invest your money, you are responsible for what happens. Someone else may have given you information or advice but, in the end, the results are yours. Taking ownership of your choices heightens your level of interest and understanding. You also gain useful experience.
Admit errors and make changes. Sometimes impulse prevails over reason or you make a wrong choice. A small mistake is better than a big mistake. Be honest with yourself and take action.
Follow your own advice, avoid the herd. The herd mentality doesn’t take your situation into account. Examine your investment choices from your own vantage point:–what is good for you.
Become your own expert. Information or advice from others is often incomplete or misleading. Do your own research and assessment. Develop your own reasons for making choices. When it comes to your money, you will take the best care.

Howard Feigenbaum is Registered Principal and Owner of Sharemaster, a Broker-Dealer firm that specializes in monthly dividend income funds.

http://www.monthlydividendcheck.com/

Year and last few years it has been very difficult for someone to invest and make money. With turbulent markets, violent commodity swings and a crashing house market many people are scratching their heads as to where they should be putting their money or investing in the next few years.

Many people are jealous of the top investors are out there, as they always know where to go to make money no matter what the economic environment or situation is. They seem to have a knack for going to where the money is. Most people do not realize, but the reason these top investors almost always make money is due following simple rules, and their own strategies that have made the money in the past. There are no complex mathematical equations to go along with the simple strategies. It really is all about money management and common sense.

Even though the economy is in a very dire situation right now, you have to understand that there are very good opportunities right now to invest and make a lot of money. But you must follow three simple strategies right as there is a lot of uncertainty out there in today global environment.

If you follow these top three rules of investing you are almost guaranteed to make money and Succeed.

The top three rules are: -

1. Investing is not hard at all. You just have to realise when and where to go to the money to make it yourself. It is always a good idea to follow the investment advice of successful investors, or find yourself a mentor that can show you the ropes and expose their ideas and areas of investment. Their many years of investing and experience can teach you a lot of things, and save you making a lot of mistakes in the short term and long-term.

2. By panic, sell hysteria. This is one of the underlying principles of investing that can make you a lot of money quickly. The average investor normally does the opposite of this, when they see a bullish run or a trend somewhere they normally buy after it is too late. There they wonder why they lose their shirt on a particular investment down the track. Since day one investors have always made money from buying low and selling at a higher price. This is pure common sense and simple to do.

3. Diversification. This is a very simple strategy also. Never ever put all your eggs in one basket. Let’s say you put all your life savings in one particular stock, mutual fund or property, And something catastrophic ends up happening you are at risk of losing all your capital on that one investment. Everything is gone. That is why it’s always important to diversify your portfolio around several different investments in case one or two of these and are failing somewhere down the track. You still have the other investment you can rely on.

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