Investment Articles

It is difficult to go just about anywhere without hearing about green these days. It is hard to say whether people are just happy to use as a means of getting more business or if society really does care more about the planet, but the fact of the matter is that positive changes are being put in place to improve the impact we have. One place you might not have realized you can make a difference is with your investments.

Green investing is the act of investing money into companies, properties, etc that are involved in sustainable practices is some way. There are no set guidelines at this point, but various fund managers set their own guidelines of just how green a company needs to be for access to their money. For example, a green investment fund might target companies that are working on technologies to improve the environment.

Other than these green mutual funds, there are also green bonds and green real estate to invest in. With green bonds, the government set up guidelines around what kind of energy is being used for a project and if it is redeveloping a brownfield as a guideline. By investing a green bond you can steer companies towards green projects because it is where the money is. Investing in green real estate investment trusts, you put your money into properties that have proven themselves to be above the norm in terms of sustainability.

The art of green investing is still in its infancy but there are many ways for just about anyone to get involved. If you feel you have done everything you can by reducing your own energy consumption or overall footprint, putting your investments into sustainability as well might be a good decision that makes you feel good as well.

Find out more about green investing at Green Investing Times

A common question is whether it is necessary to cash in all your investments when you emigrate to Australia. The answer is that it is not necessary – but the tax rules in Australia might make it sensible to do so.

It is important to be aware of the following tax implications:

Any dividends from shares and distributions from unit trusts will be liable for income tax in the UK. You will still have a personal allowance even when you are no longer resident here.

The investment income will also be taxed in Australia but any income tax paid in the UK can be offset to avoid double taxation.

Non-residents do not pay UK capital gain tax as long as they remain abroad for at least 5 complete tax years. A good tip might be to delay selling an investment until at least the 6 April following your departure from the UK.

Australian capital gains tax is payable only on the increase in value between arriving in Australia and when the investment is sold. It is therefore important to get a written valuation very close to the date of departure. The amount of capital gains tax payable depends on when the sales takes place so professional advice is important.

Private company shares are subject to separate rules and professional advice is very important.

This is a measure to discourage Australians from investing in foreign investments in order to shelter income from income tax. It subjects investments, which accumulate over time but do not actually pay an income on a regular basis, to income tax. The rules cover Foreign Investment Funds (FIFs) such as shares and mutual funds (e.g. Unit Trusts) as well as Foreign Life Policies (FLPs). UK personal pension funds are considered to be FIFs and are therefore affected but employer sponsored pensions are not affected.

Tax is charged at your marginal rate on any increase in value between 30 June in the current year and 30 June in the previous year.

Timing of a disposal is important as the liability to this tax is only on assets held on 30 June.

A high earner in Australia could be paying tax on foreign investment funds at 46.5% and probably would not want to continue holding such an investment.

Life assurance policies and investment bonds can also be liable to another Australian tax, known as s26AH, when they are encashed.

There is no inheritance tax in Australia. However, UK domiciled individuals are liable to inheritance tax in the UK on their worldwide assets. It is a complicated and lengthy process to change your domicile from the UK to Australia, and owning assets here can make it more difficult.

Currently the rate of UK inheritance tax is 40% on worldwide assets above the annual allowance (£325,000 in 2009/2010). No tax is payable on transfers between spouses and civil partners.

Mike Wilson is a director of Scottsdale Consulting Ltd, having entered Financial Services in 1985 he specialises in pensions and investments as well as expat services and QROPS schemes. He has a wealth of experience in advising clients and in training other financial advisers.

When you do your weekly shopping at the supermarket, do you keep your eye out for bargains to fill your pantry? If canned spaghetti is half price this week, do you buy a couple of extra tins? Shopping for investments is just the same as buying spaghetti. We store investments to create wealth which can be spent in the future just as we store spaghetti in our pantry to be eaten later.

When is the best time to buy investments? When they are cheap. So when the price of shares drops, the logical thing to do is to buy more – right? Well, logical it may be, but human beings are strange creatures. When it comes to buying investments we seem to apply a perverse logic. Instead of celebrating the fact that there are bargains to be had, we complain that the value of the “spaghetti” we have in the “pantry” has fallen. This would of course be a problem if we had intended to sell the spaghetti this week, but it is reasonable to assume that this is not the case. What is evident throughout the history of sharemarkets is that investors buy more as prices go up, then panic and sell when prices drop. Yet logic tells us we should do exactly the opposite. The secrets of creating wealth through investing in shares are to be able to resist the emotional effects of price changes, to make sound investments at the right price and to take a long term view.

By nature, shares are volatile. Those investors who have the emotional strength to stick with the market through its troughs are rewarded with higher returns over the long term than are achievable through investments in fixed interest or property. Declines in the sharemarket are always temporary and should be seen as opportunities to buy.

One of the realities of share investing is that it is never possible to get your timing exactly right. Spaghetti might be half price this week, but next week it could be discounted by 60%, or it might be back up to full price. However, the longer the shares are held, the less important the initial purchase price becomes. If spaghetti increases in price to $5.00 a can in 10 years time, does it really matter if you paid $1.50 for it last week when you could have bought it for $1.25 this week?

If you are retired, you might argue that you won’t be around in 10 years time and that shares are therefore not an appropriate investment. This is not true. The biggest investment risk retired investors face is that they will outlive their investment funds. If you need $5,000 a year to supplement your pension and you live for less than 10 years, then you will require a maximum of $50,000 to be invested in short term, stable investments. Any investment funds over this amount could be invested long term (i.e. for 10 years or more) in shares for a higher return, thus reducing the risk of outliving investment funds and increasing the value of your estate.

Liz Koh is a financial planner and the author of the best selling book – Your Money Personality: Unlock the Secret to a Rich and Happy Life, Awa Press, 2008, available from http://www.awapress.com

For Liz’s best tips for financial security, visit her website http://www.moneymaxcoach.com to receive your free e-book “8 Steps to Financial Freedom”.

First and foremost, college students have more resources than they think. Even if you can just put away a few dollars each week, you are still working towards creating a sound investment portfolio even during your university years. Ten or twenty dollar a week doesn’t seem like much but it adds up quickly.

Remember to pay yourself first. So many students fail to see that they should pay themselves for the work that they do. Most suggest that ten percent of a person’s income should go into retirement or into savings. When investing money while in college, you can opt to go for this lofty goal or you can opt for a smaller amount.

List your sources of income. Work Study programs are designed to help students pay tuition. However, some of this money may go above and beyond the basic tuition payments. Anything above your basic tuition costs can be rolled into a savings account, an IRA or into mutual funds.

Since most college students are young, they have the unique opportunity to go aggressive with their stocks and mutual funds. This is a daring approach and many may prefer to take a slow and steady approach to their college investments. The choice depends on your philosophy and your future outlook on your investments down the road.

Keep in mind that stocks will generally be more risky than mutual funds. You can still opt to go aggressive in the mutual fund investments but they are still a little safer than playing the stock market. Also, don’t fret about not putting enough money away in your savings venture. As long as you are contributing something you are ahead of the game.

Consider your years attending a university as a series of investments. You will be putting in time to achieve goals. Once you have earned your degree you can move on to your professional career, an IRA and many more investment opportunities.

Students are already investing their time and effort into earning a degree. Why not continue in the spirit of preparing for a bright future by investing money while in college?

To learn much more about the investment and finance, visit http://world-online-resources.com/finance/ where you’ll find this and much more, including invesmet, finance, insurance, mortgage rates and quotes.

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.

For more information on investing and top CD rates, please visit our site.

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.