Investment Articles

As the UK heads into a period of extended inflation, low interest rates and volatile stock markets, investors are looking for safe investments to preserve and grow capital. Many investors are turning to gold as prices continue to rise due to an increasing demand from investors, but more savvy money men consider farmland to be the safest investment in 2010 as demand for food continues to rise and a severe shortage on the supply side continues to push up prices and create safer investment returns.

Farmland is considering a safe investment as it is a renewable resource, constantly reproducing the commodities that the population needs – food! Therefore consistently generating an income for landowners and retaining its value, especially in times of inflation.

The value of agricultural land in the UK has risen by 13% for the first six months of 2010, and by 19.7% for the twelve months to July according to the Knight Frank Farmland Index, the industry standard for measuring agricultural land values. In fact there has not been a single seven year period since records began, where farmland in the UK has not risen in value quicker than the rate of inflation, providing safe investment returns for landowners. The income generated from leasing good quality land to commercial farmers also goes some way to replacing the lost risk-free income on cash deposits due to such low interest rates.

There is always of course an element of risk, land values could fall for example, but as demand for food is rising at the fastest pace in history and the amount of land per person on the planet has halved from 0.42 hectares to 0.21 hectares, the next seven years is extremely unlikely to be the first time that agricultural land values will fall. There is also a risk that your farming tenant could default on his rent, but this risk is also minimal as agricultural occupancy rates in the UK are close to 100% year round.

So those investors looking for the safest investment possible should carefully consider whether a well-place agriculture investment in the form of good quality farmland will have a good fit for their portfolio, It would certainly provide growth and income and a very low risk profile.

To learn more about investing in agricultural land, or farmland as an inflation hedge, download the Agricultural Investment Guide at www.dgc-ai.com/btl-farmland

David Garner in Managing Partner at DGC Business Consulting – http://www.dgc-ai.com – a property investment boutique for high-net-worth investors. DGC specialise in sourcing off-market assets at deep discounts to valautions and design and deliver innovative low-risk pruchase and holding structures designed to minimise risk and maximise the potential for upside returns.

The common consensus among the Bank of England and economists is that the UK is heading for a period of extended inflation up to 2012/2013, and savvy investors are looking for alternative assets that are proved to grow in value quicker than inflation rises, effectively hedging inflation as part of their overall investment strategy. These inflation investments should be designed to provide income and preserve capital at a time when short term market visibility is at an all time low, and quantative easing programmes combined with low interest rates start to squeeze the value out of cash as inflation rises.

Historically investors looking for an inflation hedge have turned to Gold, seeing the precious metal as a safe investment that will hold its value, even in uncertain economic times. The value of gold is a market led by supply and demand, there is only a finite amount of gold on the market, ands as demand rises, so too does the price per ounce.

The problem with gold as an investment is that it is essentially a useless commodity and is used mostly for the purposes of storing cash as an asset, and more and more investors are now investing in farmland as this asset exhibits the same characteristics as precious metals, yet will always remain in demand from a growing population demanding more food, ensuring that farmland investment is supported by rock solid fundamentals and landowners have in their possession an asset that will always command a price regardless of the happenings within financial markets.

Farmland is an almost perfect inflation hedge investment, as agricultural land values have continued to rise for the last ten years. There has in fact not been a single seven year period that farmland values in the UK have fallen since record began, and as the demand for food is rising at the fastest pace in history, the next seven years is extremely unlikely to be the first time that happens.

As agricultural land also provides a stable consistent income in the form of a rental yield when leasing the land to a commercial farmer, this asset class also goes some way to replacing the income lost due to low interest rates.

In short, agricultural land provide investors with a near perfect inflation hedge, stable income, and remain very liquid as only 0.1% of farmland changes hands in the UK each year, making good quality land hard to find, further limiting supply and supporting future values. Generally speaking, good quality farmland will sell within 90 days depending on location and grade etc.

To learn more about investing in agricultural land, or farmland as an inflation hedge, download the Agricultural Investment Guide at www.dgc-ai.com/btl-farmland

About the Author:

David Garner in Managing Partner at DGC Business Consulting, (http://www.dgc-ai.com) a boutique property advisory for high-net-worth investors. DGC source property assets at deep discounts to valuation and design and deliver proprietary investment structures allowing investors to acquire off-market assets fro income and growth.

If you learn how to invest the right way you can invest for your future relatively free from worry without putting all your money in the bank. Here are the steps you need to take to invest for the long term like a professional, complete with a recommended best investment portfolio.

First, accept the fact that you will need to learn how to invest because you will never get ahead playing it totally safe. A 1-year CD pays less than 1% interest. Second, classify yourself on a scale of 1 to 10 in terms of risk tolerance with a 1 being totally safety conscious and 10 being aggressive. Since most people are comfortable with only moderate risk, we will base our best investment portfolio on a risk factor of 3 to 5, moderately conservative.

Third, view investing as a long term proposition whether you are 21 or 71 years old. Expect that even the best investment portfolio will fluctuate in value somewhat. Fourth, invest in tax-favored accounts such as IRA and 401k plans if possible, and do not overlook Roth plans that are FREE from federal income tax.

Fifth, invest only in the three basic mutual fund types: money market funds, bond funds, and stock funds. Avoid sales charges and high yearly expenses by investing in no-load funds, and allow your dividends to reinvest to buy additional fund shares. If you are investing outside of your employer’s plan check out Fidelity and Vanguard, the two largest fund companies in America. Both offer no-load funds and have favorable yearly expenses.

Step Six is where we get down to the nitty-gritty of where and how to invest with only moderate risk. Keep 20% of your investment portfolio invested in money market (MM) funds to earn interest with high safety. Invest and keep 40% in intermediate-term bond funds to earn higher interest with moderate risk. The remaining 40% goes to stock funds for long term growth and higher profit potential at a higher level of risk.

You can get by owning just one MM fund and one or two bond funds. If you are in a 401k plan with a “stable account” option, substitute it for the MM fund if it pays more interest. Stock funds are a different story. Here you need broad diversification, and should concentrate on funds that invest in large-cap blue chip companies like GE, IBM, Exxon, and so on. An S&P 500 Index fund tracks the stock market and is an ideal holding. You may want to hold 3 or 4 different stock funds, including an international fund, to be heavily diversified.

Step Seven is where you must follow through so that our best investment portfolio can deliver for you over the years and you can sleep at night without worry, knowing that you have a sound investment strategy. Realize that nobody on the face of this earth knows, at any given time, what the best investment is or how to invest profitably with a high degree of certainty. That’s why we diversify and put together an investment portfolio. In Step Six we said to KEEP 20% in MM funds, 40% in bond funds, and 40% in stock funds. KEEP is the operative word, because over time things always change in the investment world. Each of our three basic fund types will have periods of time when they produce good returns and periods when they don’t.

You must review your progress at least once a year, like in January. And you will need to make adjustments by moving money around when your percentages get off track as the various funds perform differently. For example, if your stock funds total less than 40% of your portfolio value, move money to them from the other funds to get back to 40%. In this way you will stay on track, and in the process be shifting money from funds that are getting pricey to funds that are getting cheaper. This lowers your average cost per share over time in both your bond funds and stock funds, and makes managing your investment portfolio an automatic ongoing process.

Now, if anything in this article confused you don’t give up the ship. You can learn investment basics and learn how to invest and follow this plan. Just start at the beginning with a good investment guide, and keep reading articles about investing. It’s easier than you think if you learn the basics first.

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.

Have you had the smallholding dream? I can tell you that you are not the only one.

Many “hobby farmers” or “lifestylers”, – City workers and canny investors, are using their capital to chase the dream of agriculture and buying farmland, and non-farming buyers make up a much larger proportion of sales than ever before.

This has contributed to the recent escalation in the rise of farmland prices, as agricultural land continues to beat both commercial property and the residential market.

During the past six months arable land has rocketed in value by 8%, and by 13% year to date (July 2010) according the Knight Frank Farmland Index, with most experts believing prices will continue to rise for at least seven years.

The price of agricultural land rose by 19.7% for the twelve months to July, and continued interest from institutional funds looking to invest in agriculture by purchasing vast tracts of farmland and leasing it to commercial farmers is adding to the upward pressure.

Many savvy investors are now looking to swap faltering residential and commercial buy to let investments, and invest in a piece of good quality agricultural land instead. Some have been frightened off from the stock market due to the ongoing volatility and lack of visibility in the market and are now also investing in agriculture for a more stable income and positive growth.

These high-net-worth investors pursuing the farmland dream are not alone in their hunt to acquire and invest in farmland. Values are also feeling upward pressure as food prices increase at a time when there is a sharp decrease in the amount of agricultural land for sale.

Commodity prices for wheat and other cereals are at a 40 year low but peaked in 2008. According to leading finance broker Savills Private Finance, the actual acreage being advertised publicly has fallen from around 600,000 acres in the 1960s down to around 125,000 acres today.

There is still a lack of supply, although we source our assets from land owning farmers that want to become tenant farmers because mortgage payments are too high, so we get access to farmland that is not on the open market.

There are of course other options for investors looking to profit from the boom.

There are a number of agricultural investment funds to consider for those wishing to invest in farmland and still qualify for inheritance tax (IHT) relief.

Generally speaking, minimum investment levels are £20,000 with various modes of investment and offer the option to invest through a self-invested personal pension or offshore bond as well as with liquid capital.

As with any AIM stock, only investors choosing to hold the property for two years or more will qualify for the IHT relief.

In Europe, arable land is already worth twice that of land in Britain in places like Denmark and Ireland. Investors from these countries are now looking to the UK to cash in on the boom.

When compared to our closest agricultural rivals such as Ireland, UK arable land is still very cheap and has the margin to expand in value by 100%, I think personally that we are in for a period of prolonged growth, imagine if agricultural land values doubled by 2020, we would then be able to say that they are only priced as Irish farmland was ten years ago.

How is farmland treated by the Tax Man?

Land that is actively farmed could qualify for 100% relief from death duty, which means that there would be no IHT liability.

If the land is being farmed by the owner, you would qualify for 100% relief on the land after 24 months. Equally, the same rule applies if you have a tenant farmer do the work, as long as you have a profit share arrangement. If you lease the land to a commercial farmer, then you would qualify after seven years.

David Garner is Manageing Partner at DGC Business Consulting Ltd, a boutique investment consultancy specialising in agriculture investment and property investment.

David Garner is available for comment or discussion on david@dgc-ai.com or 020 7043 2592 or visit the DGC website to download the Agriculture Investment Guide at the DGC website.

You need the best investment guide you can find in this messed up economy and tough investment environment. You’ll also need a good guide to investing for beginners to navigate the rough waters ahead. Investing has never been more difficult or confusing. It’s time to learn how to invest, and here’s how to go about it.

First, you’ll need to get a handle on the investment universe including any investments you might already own. This is not that difficult if you have a good investment guide, since there are only 4 basic investment alternatives out there. Second, you’ll need to learn how to invest and put together a sound investment strategy that will work for you in both good times and bad. That’s what a good guide to investing for beginners can do for you.

In other words, learning how to invest successfully over the long term is a two step process. Skip step number one and you won’t understand step two. Without step two you won’t be able to put the investment knowledge you learned in step one into action. Up front I stated that now is a tough time to invest. Now I’ll back that up with my 35 years of investing experience, in terms of the 4 basic investment alternatives available to all investors. Consider this a mini investment guide and a wake up call. Investing for beginners is no picnic today.

Your 4 basic investment alternatives in order of safest to riskiest: safe investments, bonds, stocks, and alternative investments. Safe investments like bank accounts and money funds pay interest, and these days they don’t pay much. The score in late summer 2010: 1-yr. CDs at less than 1% and money funds at less than.05%, or one-twentieth of 1%. This is not normal, and is in fact downright scary. The government can hardly push rates lower to stimulate the economy as they’ve done in past years. We are already looking at zero interest rates in the money markets.

In order to earn higher interest income of 3% or more, average investors are moving money into bonds in the form of bond funds, which are not really safe investments. Simply put, when interest rates go UP, the value of bonds go DOWN. That’s a basic investment fact you can count on – interest rate risk. If you believe that interest rates will fluctuate as they always have and will go up in the not-too-distant future, bonds are not exactly great investment alternatives at this time. With two down and two to go, we move into the riskier choices that involve assuming the risk of ownership in order to earn higher returns.

Any guide to investing for beginners can point out that on average, over the long term, stocks have returned about 10% a year. The problem is that over the past 10 years the average investor would have done better with his or her money in safe investments in the bank. And over the past 3 years, a loss of about 10% a year was common for the stock funds that invest money for millions of average investors. Investor confidence in the economy and the stock market is not high, as billions of dollars are being pulled out of stock funds and moved someplace else (like to bond and money funds) in search of greater safety.

In the past when uncertainty was high and confidence in the stock market was low, smart investors turned to other (alternative) investments like real estate to find opportunity. That’s been a problem this time around, because the financial system seems unable to get the traction needed get things moving again. High unemployment won’t go away and millions of mortgages are “under water”, as people decide to just walk away from their financial obligations. Gold and silver have done well compared to other investment alternatives. If history is any guide to investing, that’s not exactly a cheerful note. People buy and hoard gold in times of fear and desperation.

Out of our 4 basic choices, none looks like a screaming BUY opportunity. Some of the best minds in the investment world are suggesting that investors need to start viewing the investing game differently and lower their expectations. I suggest that you start with the basics and curl up with a good investment guide on a rainy day. Then, you’ll want to follow up and learn how to invest with a guide to investing written for beginners. Once you start to get up to speed you might even begin to enjoy the challenge. And make no mistake about it… investing today is a challenge.

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.

Online investing has become a popular tool for both seasoned and newbie investors. Most of the major investment companies now offer investors the opportunity to buy, sell, and trade all types of investment products from the comfort of home.

Investors can participate in online investing 24 hours a day, 7 days a week from nearly any location in the world. Newbie investors have the opportunity to learn all facets of investing by viewing webinars presented on company websites or interacting with other investors through community forums.

Members can open accounts, deposit funds into existing accounts, engage in trading activities, and even purchase real estate. However, before becoming active in this financial arena, participants must take time to conduct research and understand the pros and cons of this investing practice.

Individuals should familiarize their self with the different types of investment products to determine which ones will help them reach their financial goals. Investors should research the anticipated return on investment, earned interest, and tax ramifications. It is also important to become familiar with each investment company and thoroughly review terms of service and assessed fees.

Individuals who have never purchased investment products often find online investing somewhat intimidating. Those who are just starting out should consider working with investment firms who have brick-and-mortar businesses where they can meet agents face-to-face and obtain personal consultations.

Perhaps the biggest concern people have regarding online investing is security. While this is a legitimate concern, it is important to realize that any information transferred online can be hacked. From banks to hospitals and company websites to government agencies, nothing is 100-percent hack-proof. However, reputable investment companies go to great lengths to protect their clients’ personal information. The chance of having investment information stolen is miniscule compared to other types of online transactions.

One of the most trustworthy sources for learning about investment products and security protection is InvestingOnline.org. Visitors can utilize the investing simulator to learn about the different types of investment tools. This website allows visitors to purchase, sell and trade virtual stocks to become familiar with how the process works. Investing Online offers an entire section regarding how to spot investment scams, along with a multitude of security tips and recommendations.

After conducting research and determining which products are best suited for personal goals, it’s time to locate a good investment company. Some of the more popular companies include: Merrill Lynch, Charles Schwab, Fidelity Investments, Vanguard, Edward Jones, and BNY Mellon. Corporate websites often include article libraries, audio and video webinars, and interactive tools which help clients become familiar with the company and services offered. Most investment firms offer complimentary consultations to new clients to help create a profitable financial portfolio. Consultations can take place in person, by phone, or via instant message systems.

There is no one-size-fits-all approach to investing. Some people choose one product and incorporate additional products over the course of time. Some investors prefer to utilize two or more investment firms or purchase multiple products to avoid placing all their financial eggs in one basket.

The most common investment products include: treasury bonds, stocks and options, certificates of deposit (CDs), mutual funds, life insurance annuities, and tax-deferred income annuities. Investing in real estate can be a profitable choice for those familiar with the market. In addition to buying physical property, investors can also purchase real estate stock or cash flow notes such as seller carry back trust deeds.

Online investing has opened the doors for people of all ages and financial status to capitalize on a variety of investment products. Those who take time to learn the process and understand which products offer the highest return on investment can build a strong portfolio that can provide emergency funds, pay for future expenses, or create a retirement nest egg.

Learn how to harness the power of online investing from author and real estate investor, Simon Volkov. His website provides a comprehensive article library regarding the various types of investment products, along with tips and resources for earning the highest profit. Discover which investment products are best suited for your needs by visiting www.SimonVolkov.com.

Finding the best agriculture investment can be tricky for the inexperienced investor with little or no knowledge of the sector, but there are of course many different options available including agriculture investment funds, direct agricultural land investment, and purchasing equities in agricultural companies. In this article I will go some way to explaining the different options, the risks they present to investors, the mechanics of how each type of agriculture investment works, and the returns that are currently being achieved. You can also download a complete agriculture investment guide at the link at the bottom of this article.

Firstly we will look at the relevance of agriculture investment for the current economic climate, and whether this particular sector shows us the signs of being able to generate growth and income.

The Current Economic Climate

The global economy is still in a state of turmoil, and the UK in particular is cutting back public spending to reduce an unmanageable national debt, the population is growing, and quantitative easing is likely to lead us into a period of extended inflation. Also, the lack of economic visibility means that it is very hard to value assets such as stocks, and interest rates being so low means that our cash deposits are not generating any tangible income to speak of.

So what does this mean for investors? It means that we need to buy assets that have a positive correlation with inflation i.e. they go up in value quicker than the rate of inflation, these assets must also generate an income to replace the income we have lost from cash, and finally any asset that we purchase must also have a strong and measurable track record.

It is very clear that agriculture investment, especially investing in agricultural land, displays the characteristics of growth, income, a positive correlation with inflation, is easy to value, and has a clear and evident track record to analyse, and as such agriculture investment ticks all of the relevant boxes to potentially become the ideal asset class for investors today.

Agriculture Investment Fundamentals

The fundamentals supporting agriculture investment are pretty easy to measure; as the global population grows we need more food, to produce more food we need more agricultural land as this is the resource that provides all of the grain and cereals that we eat, and all of the space to graze the livestock that end up on our plate. So we are dealing with a very basic question of supply and demand, if demand increases and supply can’t keep up, the value of the underlying asset increases, so let’s look at some of the key indicators of supply and demand for agriculture investment.

For seven of the last eight years we have consumed more grain than we have produced, bringing the global store down to critical levels.

Since 1961 the amount of agricultural land per person has dropped by 50% (0.42 hectares per person down to 0.21 hectares per person in 2007).

The global population is expected to grow by 9 billion by 2050.

Most think tanks and experts believe that we will need to increase the amount of agricultural land by 50% to support that growth, essentially a productive field the size of greater London need to be found every week.

In the last ten years virtually no more land has been bought into production as climate change, degradation and development and a host of other factors mean that there is little or no more new land we could use to farm.

The underlying asset that produces our food, the land, will become more valuable as more people demand food.

Agricultural land value rise when the food it produces can be sold for a higher price, making owning farmland more profitable, and food prices are at a 40 year low, leaving room for around 400% price inflation. In fact a bushel of wheat cost around $27 in the early seventies and now costs just $3.

Farmland in the UK has risen in value by 20% from June 2009 to June 2010, and 13% in 2010 alone according to the Knight Frank Farmland Index.

So the fundamentals supporting agriculture investment are sound and very clearly demonstrate a good picture for potential investment. But can we absorb price inflation? Well there are a myriad of studies that tell us very clearly that as a population, we absorb increases in food prices almost 100%, and sacrifice spending in other areas, so yes, we can.

Methods of Agriculture Investment

Agriculture Investment Funds

There are many types of agriculture investment funds to choose from, most invest in farming businesses, other purely in arable land, and others by stock in agricultural services companies. Most agriculture investment funds are showing excellent growth, and the fact that they are buying has increased the level of demand in the market therefore their mere presence is contributing to capital growth. Rural agent Savills recently commented on the fact that they have access to £7 billion in capital from fund to purchase farms, that is enough capital to purchase six times the amount of farmland that will be advertised in the UK this year, in fact, according to Knight Frank there has been 30% less farmland advertised this year from last, and buyer enquiries have increased by 9%.

To talk about risk for a moment, the risk involved with this fund based investment strategy is that you give over control to a fund manager who will spend your money for you and acquire assets that he or she believes are relevant. Also, if one fund performs badly, that usually has a knock on effect for other agriculture investment funds as confidence in this particular strategy takes a hot, you can therefore lose value through no fault of your own. You also have to pay a fund management fee, eating into your profits.

In terms of the returns one can expect from a fund, this varies wildly but most project annual returns of around 10%, although this will vary depending on a whole host of factors including the fund management, investment strategy, and general market conditions.

Buying Shares in Agricultural Companies as an Agriculture Investment

Another option for chose considering cashing in on agriculture investment is to purchase shares in an agricultural business, be that a farming business, or a services business, the options to consider vary wildly and careful thought must be undertaken to pick a suitable market (LSE, NASDAQ etc), and then a suitable company in which to invest. The business of picking shares remains, in my opinion, a job best left to those with the time, experience and resources to carefully research the company, its management, and it product line, and only those company displaying sound fundamentals should be added to a portfolio.

The risk here is as with any equity based investment, a down-swing in the market can cause a good company to lose value and thus affect the wealth of the investor in a negative way. We have all seen recently how a bear market can bring down profitable companies and the whole premise of agriculture investment is to avoid financial markets and add an element of non-correlation to a portfolio, ensuring the investor owns an asset that is unaffected by volatile stock markets.

So does an agriculture investment in the form of shares fit the bill? Well not really, as we were looking for stability, non-correlation, a positive correlation with inflation and income, and this mode of agriculture investment ticks none of those boxes other than a nominal dividend.

Buying Farmland as an Agriculture Investment

In my opinion the most sensible strategy for investors is to acquire profitable farmland that has a track record of producing an income yield, and rent that land to a commercial farmer. This mode of agriculture investment allows the buyer to access an asset that displays all of the characteristics that we are looking for, non-correlation with stock markets, positive correlation with inflation, income and growth, as UK farmland continues to increase in value yet is still only half the price of agricultural land in Ireland, Denmark and the Netherlands, leaving a huge margin for future growth.

There are of course a number of risks to consider here as well, sourcing good land for example, and of course sourcing and managing a farming tenant, these risks can all be managed effectively by partnering with a specialist agriculture investment consultancy that will handle the sourcing of both land and tenant and also handle all ongoing management too.

So to summarise, if one is to make an agriculture investment, the best option right at this moment is to buy agricultural land, giving the investor growth and income in a volatile market.

To download the complete Agriculture Investment Guide click here.

Download the Agriculture investment Guide at http://www.dgc-ai.com

DGC Business Consulting Ltd source and manage farmland, residential property, and commercial property for investors, as well as provide research and due diligence for asset acquisitions across Europe.

Since most people are lacking in investment experience, the best investment guide for most folks keeps things simple and starts with the basics. The ideal guide to get you off and running should cover virtually every investment option of interest to the general investing public. Buckle up and read on as I lay before you the universe of investments in plain simple English.

Not only will this basic investment guide for the inexperienced investor list all of the popular investment choices out there, it puts them into perspective. For example, some investments are safe and can quickly and easily be bought or sold because they have high liquidity; while others offer high profit potential with significant risk and low liquidity. This investment guide divides the investment universe into just two general categories: FIXED and VARIABLE investments. Each of these can be further separated into two parts, for a total of just four basic investment options, which are often referred to as asset classes.

Fixed investments pay interest and are safer than their variable counterparts. They get their name from the fact that either the investor’s principal (amount invested) or the interest rate paid is fixed and does not change for the life of the investment. Cash equivalents like money market funds or savings accounts is the first subcategory here, where the principal is fixed and does not fluctuate in value, while the interest rate can vary over time. The other subcategory is bonds, where the interest rate is fixed but the principal is not, as bonds fluctuate in value.

Variable investments are growth oriented and their price or value fluctuates, or is variable. Both profit potential and risk are greater here as the primary objective is to profit from an increase in the price or value of the investment. Stocks are the first subcategory and they offer good growth potential with some dividend income, and can easily be bought or sold on any business day at market price. Alternative investments include real estate, oil, gold, other commodities, and all other investments not mentioned above as the fourth category; and they can offer investors growth opportunities and perhaps income with varying degrees of liquidity.

In a fixed investment the investor is simply lending money to an entity like a bank, corporation or the government to earn interest. With a variable investment you take on the risks associated with ownership in order to make a higher rate of return. In putting together and managing your personal investment portfolio include all four of the asset

classes to achieve balance. In this way you should be able to get long term growth plus income with only a moderate level of risk.

In any endeavor the devil can be in the details, and investing is no different. Even a complete investment guide can’t walk you through the details of every specific investment option available today. But now you should have the big picture in your mind and a foundation to build upon.

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.

The best investment guide would cover investment options and investment strategy. This investment guide would be complete and start with basic financial concepts and expand to include the entire universe of investments. That’s a tall order, so let’s just start with a simple version, and talk about all of the investments in the world in plain English.

Your best investment is a good, complete investment guide. I’ve been tuned in to the world of investing for 35 years and have read over 100 books on investments and investing. Most of them center on the stock market or some form of investment technique or get-rich-quick scheme. Many are time sensitive and out of date by the time you read them. Many tell you how to invest money like the author did when he made his millions.

What you seldom get with an investment guide or book is an understanding of investment basics and a simplified blueprint of your many investment options. So, here’s your simplest and free best investment guide to all of the investments in the world. There are only 4 different investments or asset classes out there depending on how you categorize things. Once you bring it down to this level you have a basic framework to work with.

CASH EQUIVALENTS and other safe investments pay interest. Either your principal or rate of interest is fixed for a period of time. Examples include U.S. Treasury bills, money market mutual funds and bank savings accounts. Advantages include high liquidity (access to your money) and safety, low risk.

BONDS are long-term debt instruments and they pay more interest income than the above. Examples include U.S. Treasury bonds, corporate bonds and bond funds of various types. Advantages include relatively high interest income with a moderate level of risk.

EQUITIES or STOCKS represent ownership in a corporation. Examples include blue chip stocks, growth stocks and equity funds. Advantages include ample liquidity, growth and some income in the form of dividends. Risk is significant and profit potential is high.

ALTERNATIVE INVESTMENTS is our final category. Examples include real estate, gold, and foreign investments. Advantages include high profit potential and an alternative to stocks when they are out of favor. Risk can be significant here as well.

That’s about as simple as an investment guide can get. All investment options can be fit into one of these asset classes. The important thing is that you have a perspective, and that you understand the investment characteristics of any investment before you invest money. For example, someone pitches an investment to you. Where does it fit in our above format?

How does it rate in terms of: safety, liquidity, growth and profit potential, income provided and risk? All investment options can be and should be rated in terms of the above to assure that they fit your needs and risk profile.

If you learn how to invest you’ll have a means of supporting yourself for the rest of your life. Once you have a sound understanding of investment basics you’ve built a great foundation for learning how to invest. The best investment guide would cover both.

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.

To learn to invest informed and learn how to invest with confidence most people should break the subject down into two parts: investment basics and investing. By tackling topics or articles in the following order you can learn how to invest money as an informed investor without wasting too much time and effort.

First get a handle on basic financial concepts, terms and investment basics. Every investment in the world can be evaluated based on just a few simple characteristics. Don’t invest money in anything until you know if it fits YOUR needs for such things as safety, liquidity, growth, and income. Only if you invest informed can you avoid the costly mistakes that are caused by picking an investment that’s not right for you.

Then, as a basic investment guide, focus on stocks and bonds because this is where you are most likely to invest money in the future. Once you have a handle on these securities, its time to get familiar with investment markets and how to invest in them. If you don’t understand the stock market, for example, your knowledge of stocks (equities) is of little value in the real world of investing.

Learning all about mutual funds should be your next step and shouldn’t be difficult now that you know stocks and bonds. After all, these securities are where most mutual funds invest money for their investors. And mutual funds are where most investors invest money in stocks and bonds in 401k plans, IRAs and other accounts. There are thousands of funds to choose from but 99% of them fall into 1 of 4 general categories.

You should also get familiar with other investments like money market securities and annuities before you move from the INVESTMENT GUIDE phase of your education to the INVESTING GUIDE segment. In other words, before you can learn to invest informed you’ll need a clear understanding of all of your major investment options and how they compare in terms of their basic investment characteristics. This is not as difficult as it sounds since the universe of investments can be condensed into only 4 different categories or asset classes: cash equivalents (safe, liquid investments), bonds, stocks, and alternative investments.

Investing is the art of putting an investment strategy together and managing your money at a level of risk that’s within your comfort level. Once you understand the investment end of things you need a game plan in the form of a complete investment strategy. Asset allocation is the single most important part of any strategy; and your portfolio asset allocation over time will be the main thing that determines your success or failure as an investor. Concentrate on learning asset allocation: how to invest money (in what proportion) across the 4 asset classes mentioned above.

Now you’ll also want to learn to apply various investing strategies or tools to help offset risk while earning higher than average investment returns. The two important things to understand when you get started in the learning process are the following. Learning how to invest is easier than you think if you take the subject one step at a time in a logical sequence. Second, learning to invest informed is actually a two step process: learn investment basics, and then learn investing.

Don’t get discouraged if you don’t understand something in an investing article you are reading. Back up and search for another article that covers the topic or area that confused you. For example, if you are confused by an article on bond funds it’s probably because you don’t understand bonds in general. Most people don’t. Most people don’t get much out of an adventure novel, either, if they start reading on page 47.

Take fear and anxiety out of investing. Learn to invest informed.

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.