Investment Articles

Money markets are defined as organized exchanges of funds. This allows participants to lend and borrow money for a maximum of a year. These markets were popularized on two fronts. The first is the individual investor who wants to be able to invest a smaller amount of money while being able to take advantage of considerable safety and liquidity. The second front is that of governments, banks, and other businesses who have found this to be an efficient way to transact funds.

Purpose

The main reason for money markets is to generate money. This is true for both the public and private sectors. The attraction for most investors is the short-term maturity of money markets that range from 24 hours to a full year. However, the norm is approximately three months. It is possible for investors to sell their investments before the maturity, but they will lose the interest they could have earned if they had waited for them to mature.

Markets are traded in secondary markets as well. Secondary markets are where investors buy and sell securities and assets from investors as opposed to the issuing organizations. While there is a loose association of these markets in New York City, these centralized markets really do not have a centralized location.

Types of Instruments

Most products are specialized which means they are routinely traded with large finance organizations and banks who have a better understanding of the money market. Common money market instruments include: futures options and contracts, discount window, shares in market instruments, federal funds, repurchase agreements, and negotiable certificates of deposits.

Other products also include: commercial paper, short-term municipal securities, mutual funds, and bankers’ acceptances.

Short-Term Investment Pools

Short-term investment funds of local government pools, bank trust departments, and money market mutual funds are all included under the umbrella of short-term investment pools. They combine different money market instruments. As a result, highly specialized money market products available and understandable to traders do not possess the knowledge required for these instruments. One other benefit is that the minimum of $100,000 is not required unlike it is to purchase other money market products.
Money market mutual funds are operated by bank trust departments and are an assessable short-term investment pool. This type of mutual fund is either classified as taxable funds or taxable exempt funds. Tax-exempt funds are free from all federal tax because the money is invested in securities that are issued by local and state governments. Taxable funds are securities investments which include commercial papers and treasury bills; his requires investors to pay federal tax.

Eurodollars

The term Eurodollars is a bit deceiving, because it does not have much to do with Europe. They are actually United States dollars that are deposited in banks outside America. They get their name from the evolution of the market in Europe, but can be held in any country around the world. Banks benefit from them because they can be operated on a narrow margin and are somewhat regulation free. This means banks can circumvent the costs associated with regulations. One of the drawbacks of Eurodollar deposits is that they tend to require millions and it reaches maturity in several months. For this reason, the largest organizations have the ability to attain the Eurodollar market. This type of investment has less liquidity than other money markets, although they do offer higher yields.

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Agricultural investment has many fans in the investosphere, the likes of Jim Rogers for example, founder of the Quantum fund alongside George Soros has been quoted as saying that agricultural investment is likely to be the best asset class of out time. So firstly lets look at the different modes of agricultural investment that are available for retail investors.

Agricultural Investment Funds
Direct Farm Ownership- Hands On
Direct Farm Ownership – Hands Off

First we look at Agriculture Investment Funds. These managed investment vehicles – available under the banner of most major investment houses – operate in the same way as other types of investment fund, gathering together the capital of smaller investors and participating in larger transactions such as buying up 1,000´s of hectares of managed farmland in various countries and essentially positioning themselves as very large global farm owner operators. Investors profit from rent received from the farming tenants, the sale of crops, the resale of the agricultural land at a later date, or a combination of all three exit strategies.

Investors benefit from expert management, and portfolio diversification, and agricultural funds have performed very well recently, as have all agricultural investment modes.

Next we take look at the most hands on form of agricultural investment, direct farm ownership with a view to working the land and selling the crops. This type of agricultural investment is by far the most hands on, and high risk, of all investment strategies, and shouldn’t be undertaken by anyone without a serious level of expertise and experience in the farming sector. It really is not simply a case of fulfilling the country dream, farming is a serious business.

In terms of UK performance, 88% of farms in the UK were profitable in 2009, and farmer also receive EU subsidies in Euros, ensuring that farmers in the UK have also recently won big on currency swings and the devaluation of GBP Sterling.

Now we look at perhaps the best in terms of the middle ground, an investment strategy that allows us access to an appreciating asset in the form of farmland, and an income yield in the form of rent, whilst at the same time avoiding huge management fees and the issue of having to farm the land ourselves.

This middle ground strategy in agricultural investment involves buying arable land and leasing it back to a framer who farms crops. This is, I believe, the best strategy for investors wanting a hands-off investment, yet still utilising the asset to produce income, as well as benefiting from capital growth.

Annual income yields of up to 7% are absolutely achievable in the current climate, and when combined with capital growth, this option is possibly the best route to 100% ROI over 5 years with minimum risk.

David Garner is Managing Partner at DGC Investment Consultants – http://www.dgc-ai.com – a boutique offshore consultancy advising a community of High Net Worth Individuals, Family Offices and Institutions on a broad range of non-correlated assets.

Since Goldman Sachs coined the BRIC acronym, Brazil, Russia, India and China have come to the forefront of the world stage. Not only are their economies growing, but investment in these emerging markets is booming.

The four giants already have a bigger share of world trade than the US. Share values in the BRICs more than doubled between 2005 and 2009 and their predicted GDP growth this year is the envy of most developed nations. Just ten years ago, only one BRIC had investment grading, a status now shared by all four.

Each BRIC has carved its world niche. China has become top exporter of goods, recently exceeding Germany’s export value to take the world number one position. Russia has large oil and gas deposits, while India excels in software. And Brazil dominates the agricultural commodity markets with what the Financial Times calls, “super-competitive farmers”.

When it comes to car manufacturing, all four BRICs share potential and there has been a huge recent increase in those investing in Brazil and China. This multi-million investment by the world’s top manufacturers has kept the automobile sector afloat during the last 18 months – one of the most difficult periods ever for car sales globally.

The market for cars in Brazil is booming. Sales of all vehicles in the country reached 3.14 million last year, an all-time record and an 11% increase on 2008. Topping the sales was Fiat with 737,000 vehicles followed by Volkswagen with 686,000 and GM with 595,000.

Like so many sectors in Brazil at the moment, the automobile market offers potential for huge growth. Brazil’s population numbers around 200 million, but the ratio of cars to people is one car per seven people. Compare this to the US where the ratio comes in at one car per 1.2 Americans and it’s easy to appreciate the potential.

Sales of cars are expected to rise even further this year with experts predicting that total sales will reach 5.7 million cars by 2020. This massive hike is fuelled by the growing purchasing power of Brazilians who are increasingly affluent and keen to buy consumer goods. For many Brazilians, cars are top of their must-have lists.

Unsurprisingly, investment in Brazil – the fifth largest market for car manufacturers in the world – runs to billions. Ford is investing R$4.6 billion (US$2.3 billion) between 2011 and 2015. Volkswagen is injecting R$6.2 billion of investment funds into Brazil from this year to 2014. Investment by Fiat is also high – R$1.8 billion will find its way into car manufacturing in Brazil and Argentina this year alone. French manufacturers, Peugeot and Renault, are also investing around R$1 billion each in Brazil.

While the car industry falters in many developed nations, car manufacturing in Brazil is a very different story. Ford in Brazil made profits during 23 consecutive quarters up to Q3 last year. Ford’s President in Brazil, Marcos de Oliveira claims these results are due to Brazil’s economic strength and stability. “The big difference is the stability Brazil has achieved over the last ten years,” he said.

The success of the car manufacturing industry in Brazil is yet another indication of the country’s huge potential. A booming economy, ever-richer population and massive resources all combine to make Brazil the BRIC of the moment. And the list of investment opportunities – property, commodities, alternative investments – seems endless.

For more information on overseas property investment and to find out about Obelisk’s latest projects, contact Obelisk on 0034 952 820 319.

Contact us via email: info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.com.

The best investment fund for average investors would be an investment fund for all seasons, your best investment to just buy and hold. This investment package would be a fund of mutual funds to hold in good times and bad. Where do you find such an investment?

The majority of investors need total balance in their investment portfolio in order to make their money grow while avoiding heavy investment losses. Even the best funds today fall a bit short of this goal, but you can assemble your own best investment fund from the list of mutual funds available from the major fund families like Fidelity and Vanguard. Here are the instructions.

The best investment fund formula: Two parts traditional balanced fund, plus one part money market and one part alternative investment fund. Mix together and stir once a year for best investment results. Putting together this investment fund requires only three steps, and the first two are simple. Here’s what you do.

Put ½ of your money that’s earmarked for long-term growth in a traditional balanced fund that allocates 60% to stocks and most of the rest to bonds. This is the traditional balanced portfolio for growth and higher income. Then put ¼ in a money market fund for safety with interest income in the form of dividends. Now you have just one step left to achieve total balance and the best investment portfolio to hold year in and year out, in good times and bad. Risk level: moderate.

Our final step requires some assembly because to my knowledge no fund company offers an alternative investment fund; but some offer the pieces and parts (funds) you need to complete the job. They fall under the following categories of equity (stock) funds: international, gold, real estate, and natural resources (or energy). The last three are referred to as specialty funds because they specialize in specific sectors or industries. These particular sectors focus on areas that qualify as alternative investments.

The remaining ¼ of your money goes to this alternative investment fund, in mutual fund categories as follows: 2 parts international, and 1 part gold, 1 part real estate, and 1 part natural resources or energy. You now have assembled the best investment fund I can come up with, and it will look like this: 50% balanced funds, 25% money market, 10% international, and 5% each to gold, real estate and natural resources. I call this portfolio a total balance fund… set up to weather good times and bad.

It’s the alternative investment ¼ that really makes the difference and creates total balance in your overall portfolio. When the U.S. stock and/or bond market are performing poorly, you’ve got a back up in the form of international investments, gold, real estate and natural resources or energy.

Some day the major mutual fund companies will likely launch a total balance and/or alternative investment fund because it makes good investment sense. Pension funds and other large institutional investors expanded their investment horizons years ago. Until that time, putting together your best investment fund will require a bit of assembly.

Once a year you should check to assure that your allocation percentages of 50%, 25%, 10%, 5%, 5%, 5% are on track and total 100%. When any of them gets out of line by a couple of percentage points or more its time to move money to get your balance back in line. That’s not a lot of maintenance considering the fact that the rest of the time you’ve got real balance working for you year after year.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Investment is essential in order to make your money grow. It is also necessary to reach once financial goal. Investment can be done with both high and little money. It is therefore necessary to have a good idea before investing. Many investors want to know as where to invest money so that they could earn highest rates of return. The reason for investment may differ and the fact remains that investment is like saving and all investment makes profit, so when you invest you are sure to get the return after certain duration. The great thing about investing in today’s world is that there are many avenues available for people to invest money. The most common known areas to invest money are stocks, bonds, mutual funds, real estates, and e-commerce.

Though, all investments have high and low risks but its said that – no risk no game and risk is there in everything we do and one to know details before investing in any of the area. Stock market is the most popular area for investment as it helps one in making high money but there is also a high risk factor for one never knows as when the market would crash, devaluing the cost of the company’s shares. Another area of investment is mutual funds. Mutual funds have many benefits and involve less risk as these are collections of stocks and bonds that proves to be beneficial in later years. Also, it is important to know that mutual funds offers wide range of stocks types like real estates, health care, or automobile manufactures. So people invest in real estates because it is safer way to invest money as the real estate market does not fluctuate as often or as extreme as the stock market and the real estates value are usually on the rise. Of all it is important to remember that one requires high value for a longer period to get high return.

There are still other areas of investment with little money. So, one can also think of investing through Dividend Reinvestment plans also known as drips and the Direct Stock Purchase Plans. These plans are safe and allow one to buy stocks directly from the company. One is sure to make money over time when invested in these plans.

Investment is vital for all for their future growth as only if you invest money that you could make money. Mutual fund offers best platform to invest. So just gather the knowledge about mutual funds investment and see your money grow. This is the age of investment and all one need to do is to go for a happy investment!

Harish Chandra Khulbe is a student finding his way into the online business world. He has a passion for online business and playing cricket.

Is there really that much difference in performance between investment funds or are they all much of a muchness as I have some investments and pensions and I have no way of knowing whether or not I am getting the best performance for my money or not.

That’s an interesting one. Let me give you a really quick example by using the ‘cautious’ sector, why everyone should immediately look at who their money is invested with and look for independent investment advice.

Let’s take an investor who has decided to invest into a cautious managed fund in pursuit of protection of their assets. The investor’s general expectation would be that the returns would be broadly similar across most funds. Unfortunately not. Over the last year you would have had some very interesting results.

For example Marlborough fund managers have a fund that is down -12.4% over the last year with its MFM Tait Walker cautious fund.(1)

That may not seem to be much of an issue but when you see the average for the sector is +16.8% and that only two other funds have lost money over that year out of 168, you may think it peculiar. The best two funds returned 43% and 31% respectively. And so an investor in the best fund would be 85% better off than the worst fund for that one year!

Such disparities should not occur in a sector that is supposed to be cautious, yet they exist. Similarly on a study of risk, the difference is immense. The riskiest fund, as measured by Standard deviation over five years, carries 221% more risk than the most cautious fund.(2)

If you look over five years the numbers are even more interesting. Top of the ‘I didn’t do a thing with your money’ list is AXA defensive distribution with a shocking -3.3% return over the period when the sector average was 18.8%.(3) Consider the poor folk who have over £132m invested here have the joy of an annual total expense ratio of 1.64% for the joy of losing that much money.(4)

A really useful measure of a fund is something called Sharpe ratio. In simple terms, Sharpe ratio measures how well the return of an asset compensates the investor for the risk taken. And so it’s a measure I rely on when ascertaining which funds to purchase or not to purchase for investors.

So consider what happens when I ascertain the worst Sharpe ratios over the five year period i.e. those funds who add least value for the risk taken. Ranking very highly in the ‘we really haven’t done very well top 20′ are some high profile names. Joining AXA are: three funds from Santander (was Abbey), two funds from a Barclays legal and general fund, one from Norwich union (Aviva), one from Lloyds (Scottish widows) and HSBC.(5)

As if banks haven’t had a bad enough time overcharging and making inappropriate decisions, here they are providing the worst value for the risk they are taking with investments.

And the charges are not too favourable: For example the Scottish widows balanced fund has a total expense ratio (basically the total charge) of 2%.(6) The Legal and General (Barclays) balanced portfolio trust has an even worse total expense ratio of 2.05% per year.(7)

Investors are also being subjected to an age old tradition of up front charges that they don’t need to endure. For example HSBC income fund of funds has an up front fee of 4%, and that is one of the cheaper options.(8) Three years ago we moved most of our customers to a system that enabled them to buy all their investments at cost (c0.3%), yet customers within these banks’ funds are still being subjected to brutal costs and investment capability.

Seeing as the decade I have dubbed as the naughty noughties are out of the way, perhaps in the ‘ones’ investors will put oneself first. If you have a query regarding a fund that you would like to find our more about e-mail info@wwfp.net.

Source:
(1) Trustnet
(2) Lipper
(3) Trustnet
(4) AXA
(5) Lipper
(6) Scottish widows
(7) Barclays Legal and General
(8) Digital look

About Peter McGahan and Worldwide Financial Planning: Peter McGahan is the Managing Director of Worldwide Financial Planning – FT Award winning Independent Financial Advisers. Peter writes for many national and local press publications and is widely respected as an expert in personal finance. Worldwide Financial Planning specialise in the provision of expert one-to-one advice in the areas of Mortgage, Business Finance, Investment, Pension and Retirement Planning and Inheritance Tax.

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. ‘The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.’ Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made. The above represents the personal opinions of Peter McGahan. All information is based on our understanding of current tax practices, which are subject to change. The value of shares and investments can go down as well as up.

You may find out the same thing I did when you first approach private money investors: credibility is everything.

It was a few years into my investing career when I realized that I would need private money to get to the next level. A successful business man, a mentor of mine, told me that honesty and character is what most potential investors look for. At the time, I thought that just a deal and a nice rate of return were all I needed to have people throwing money at me. While these were indeed critical components, reputation and credibility were equally (if not more) important.

But, what exactly is credibility in this context? Does it mean having a lot of real estate deals under your belt? Does it mean 25 years of investing experience? What does it mean to have credibility with private investors?

It’s not as complicated as it may seem. First of all,

credibility begins with your reputation. If you have a good reputation (you do what you say, treat people with respect, etc.) then what you say to the investor will be taken seriously and they will consider your opportunity.

The importance of reputation cannot be overstated. Warren Buffett, one of the greatest investors (in any category) of all time has been quoted as saying (in reference to his employees):

“Lose money for my firm and I will be understanding. Lose one shred of reputation for my firm and I will be ruthless.”

This sums it up pretty well. If the world’s greatest investor thinks reputation is important, shouldn’t you?

In addition, when it comes to credibility, it is critical for you to approach investors with confidence and boldness. Think of it this way: if someone were asking you to invest funds in a real estate investment, wouldn’t you feel better if someone was confident and sure of themselves?

When you stammer, ‘hem and haw’ or otherwise lack confidence when talking to investors, they will be less inclined to view you as a good home for their investment dollars. Psychology is very important in money movement and people like to sleep well at night. The thought of a restless night sleep will be enough to turn the investor away from you.

Another factor in building credibility with private investors is having the right paperwork to support your proposal. Do you have a business plan? Do you have the proper disclosures and offering documents? Do the details of your project make good economic sense? If you don’t cover the bases in this area, you can expect less credibility in the eyes of the investor.

Don’t make the mistake of thinking that private investors are simply financial robots who only care about numbers and mortgages and collateral. That might be true if you were selling large commercial mortgage backed securities in big financial markets, but if you’re raising $3 million for your next real estate project, your investors are going to want to know about YOU. If you want access to private money – credibility is key.

Adam Davis is a real estate investor, author, speaker and founder of Ultimate Private Money. He teaches real estate investors how to raise capital from private investors. Adam has completed hundreds of real estate deals- from single family house flips, lease options to apartment buildings, land contracts and hard money loans – all with none of his own money. All told, he has raised millions of dollars from private individuals to finance real estate deals. For a FREE audio program on how to get private money go to: http://www.UltimatePrivateMoney.com.

I get quite cross when I hear people talking about ‘emerging markets’ or even ‘BRICs’ as a single great lump of investment. To me, investing in Russia is completely different from investing, in, say, Brazil or China.

How do we distinguish one emerging market from another? Let’s look at what’s available in the market right now.

There’s one kind of emerging market, which I call the post-colonial market. Russia is a good example. What’s good about Russia? Well, it’s big, and it’s got loads of natural resources – aluminium, oil, gas, precious metals, you name it, it’s got it. In fact it’s got so much gas that it can hold its neighbour Ukraine to ransom just by turning off the taps.

Unfortunately most of those natural resources are in unfriendly environments, like Siberia – a frozen waste most of the year which turns into a mosquito-ridden waste for the remaining few months of it. The cost of extraction is high, and when I took a look at Russian aluminium a few years ago the cost of production was actually higher than the market price. Commodities prices has rocketed since then, but it’s probable that Russian plants still have a higher cost of production than more efficient producers – since most of the profits of high prices seem to have gone to buying Premier League football clubs, rather than investing in more up-to-date facilities.

‘Post-colonial’ emerging markets don’t do well in the long run. Much of Africa runs this sort of economy, exporting oil or coffee – and failing to create new industries with the returns. These markets are tied to commodity prices, and if commodity prices fall, they’ll do spectacularly badly.

Then there’s, say, China. Far from being a natural resources producer, China is now a net importer of many commodities. For instance Chinese demand (or lack of it) is the usual quoted reason behind moves in the copper price. Instead, China has become a major exporting economy competing in labour intensive sectors such as textiles, electrical equipment, and industrial machinery.

I like to think of this as a ‘truly emerging’ market. It’s not just ‘emerging’ in terms of being a long way away and having an increasing GDP – it’s also emerging in the sense of structurally changing its economy. It’s emerging from an agricultural and commodity-driven economy into a capitalist manufacturing and services economy – something which, if you read your Christopher Hill, England did back in the 17th century.

India is another market that’s emerging in this way. True, it still has a huge hinterland of rural poverty relying on the agrarian economy, but it has managed to build companies like Wipro that are competitive on a global scale. Visit the call-centres and IT companies of Bangalore, even, and you’ll see a tin shack with two cows lying in the dust next to a gleaming Norwich Union office building – but despite fits and starts, despite incredible bureaucracy and uneven development, the economy is changing.

Of course you could take the view that finding the term ‘emerging markets’ deceptive is a piece of pedantry on my part – it’s a convenient term for the non-developed world. In my view, though, that’s a bit like Columbus found ‘India’ a useful description for that little set of islands he found – a basic navigational mistake covered up later by calling them the West Indies.

More seriously, though, an increasing number of collective investments including ETFs and OEICs market themselves to investors using the ‘emerging markets’ label. Investors obviously think they’re getting one clearly defined thing – and my worry is that if they don’t do their research in depth on the funds, they’re going to get another.

An investor who thinks they’re getting into ‘the next Taiwan’ or ‘the next Korea’, looking for an economy based on mass production of industrial goods, is going to be pretty disappointed if they end up with a fund whose main holdings are oil, copper and palm oil producers.

Fortunately investors can pick and choose which emerging markets they want – at least to some extent. For instance Lyxor offers ETFs that focus on specific markets – there’s an MSCI India ETF, a China Enterprise ETF, and an MSCI AC Asia-Pacific (ex-Japan). First State offers a set of investment funds including Indian Subcontinent, Greater China Growth, and Latin America. (It also offers interesting funds playing particular aspects of world markets, such as the First State Global Listed Infrastructure fund and Global Property, though these are not focused on emerging markets per se.)

Saying ‘I want an emerging markets percentage in my portfolio’ is not enough. It’s like saying ‘I want to buy some stocks’ without any idea of whether you’re a value investor, a growth investor, an income investor, or what sectors might be attractive. Investors need to decide on what kind of emerging markets they want to buy – and why.

You can read more about emerging market investing here.

Victor Igden is a writer who spent fifteen years working in the City as an analyst. He writes a regular column on Stockopedia about UK Value Investing with views on the best options and pitfalls for value investors.

If you still feel ordinary and like beginners who have not had much experience in investing, here are some specific tips that you can apply.

IDENTIFY YOUR CHARACTER in investing, whether you are someone who is more concerned with security than the return of investment, or would you prefer to take the product a more risky investment, but promise a high return lebi. Every person has a different level of acceptance of this investment risk. This factor is influenced by age, experience in investing, time frame, the amount of funds, investment objectives, and others. Therefore a suitable investment products for others is not necessarily suitable for you, and vice versa, depending on factors earlier.

TAKE THE RISK INVESTMENT Spreading (diversification). Wherever you save money? In savings? Deposits? Gold? Do not put your eggs in one basket, if falling can break all. For placement-divide your funds into several different types of investment risk level. The purpose of this spread of investment risk is to place the synergy between the various advantages and disadvantages of each placement of investment funds.

Establish WRITTEN IN INVESTMENT OBJECTIVES, specific and measurable. write down all the financial goals you want to accomplish in a book or in a special file on the computer so easy to remember. In fact, if need be written on a piece of paper and glue them in place easily visible, so you better motivation. Also orderly administration. Save your investment data, not separately. Your investment objectives must also be clear to what measurable targets and time. No matter if the investments made there is no purpose. Set only a few target funds annually chill.

Online Investing can be a realistic source of additional funding as long as you take the time to research things properly.

In my first 7 tip article I introduced online investing beginners to some of the key things that they need to do to be successful. But of course there are always other things that will help to ensure success and this article aims to help with that.

1. Use software to manage confidential information

As soon as you decide to invest online develop a strategy for keeping your account details secure. Be mindful that online investment opportunities are tempting targets for thieves. Use a robust strategy for user names and passwords to minimise the chances that anyone could access your account. Do not use the same user name and password for more than one account.

SIDEBAR: Search online for free software that will help you with this

2. Find an ecurrency exchanger

Online investing programmes use payment processors to manage deposits and withdrawals. Financing payment processors can normally be done either by a direct payment from your bank account or through an e-currency exchanger. Make sure that the e-currency exchanger you use has a verifiable track record and deals with your transactions quickly and efficiently.

3. Do your own research

As you will be investing your own money in a programme the onus is on you to do the necessary research into its viability. There are several good sources of information available to you which will enable you to make your decision. One thing you should be aware of is that online investment websites are not always the best source of information and should always be treated with caution.

4. Find something you have an interest in

As you should treat any online investing as a business it makes sense to look for online investments that you have an interest in. Currently there are programmes that specialise in forex, sports arbitrage, investment funding and environmental projects to name a few. By focusing on one area to start with you will learn to spot trends and how these may impact the investments you have.

5. Decide whether you want passive or active

The decision to get involved in either passive or active online investments will depend heavily on the time you have available and your knowledge and interest in a particular area. The advantage with active trading is that you keep full control of your funds whereas with a passive approach you are entrusting your funds to a group that you may know little about.

6. Use Discretion

Not everyone you know will be supportive of your attempts to invest in online programmes. Don’t let this put you off, it is highly likely that they know very little about the subject and speak from a position of ignorance and fear. Keep your dealings private and don’t broadcast your involvement widely as discretion will serve you well in the end

7. Diversify

Even if you start out with a limited bank be prepared to invest in more than one opportunity straight away. Given the higher risk profile of online investments it is crucial that you develop a strategy for diversification right from the outset. Whilst this may mean your funds could grow at a slower rate you are reducing the potential to lose them all if a specific programme fails.

Nothing is more important than protecting your own money…take the time to get it right

For more great tips on online investing you can visit my blog at http://www.onlineinvestingguru.com

From John Murphy and Online Investing Guru