Investment Articles

If you are like most people on the planet, you covet your positive investment returns and are scared to death that you might give up those returns in this tough market climate. I believe this is why a majority of individual investors missed some or all of the recent stock market ascent off the March 2009 lows and 60%+ move higher.

I think this is why a November 2009 survey of high net worth investors by Investment News, showed that only a slim portion of the wealthy feel in control of their financial lives, an even smaller number (fewer than 9%) enjoy thinking about financial matters and only about a quarter feel successful in investing.

So what is the secret to feeling better about your investments and protecting your portfolio from Mr. Market’s bears? The answer is to have a plan to identify and hedge your portfolio when market conditions clearly show a change in market direction may be coming.

This is where trend following shines. Trend following strategies don’t try to predict market or stock movements, instead they capitalizes on the market’s movements wherever or whenever they occur. Trend followers respond to what is happening rather than anticipating what might happen.

The goal of the trend follower is to let a new trend develop and then invest with that trend. The trend follower then holds that position until there is a reversal. The smart trend follower does not invest at the exact bottom because he/she wants confirmation that a turn (reversal) has occurred. Likewise the trend follower will generally not sell at the exact top (which is more easily identified after the fact). They sell after a clearly identified change in trend (reversal). Therefore, the trend follower is able to capture the “meat” of the trend.

Another very important point is that the trend follower is indifferent as to whether the trend is going up or down to capture his/her return…as long as there is a trend they can make money.

So how can trend following be used to protect your portfolio from the bears? Simple, in your manager allocation include a trend following manager in your allocation. During times of sustained market distress, this manager’s positive returns in a bear environment will help to hedge or offset losses elsewhere in your investment portfolio.

The amount you allocate to the trend follower then becomes a question of how much of the remainder of your portfolio do you want to hedge or protect. Best of all this strategy is not insurance or options, which you may pay for and never use (sunk costs). These managers can make money, as long as there are trends to follow, in both up and down markets. They therefore are a perfect compliment to other managers and styles in a well diversified stable of managers.

An author, Certified Public Accountant and Personal Financial Specialist, Jeff Diercks has helped high net worth and institutional investors grow their investment assets in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in trend following investment strategies. For a powerful guide to investing called “Make the Trend Your Friend”, visit http://www.intrustadvisors.com.

Are you on the lookout for rewarding areas of the stock market to invest your capital into? If you are searching for the most profitable portions of the marketplace, look into IPO investments. Before you can invest into IPOs though, you should definitely use an IPO valuation so you can know that you are looking at an investment that is worth your consideration.

Performing an evaluation before you purchase an IPO is essential if you desire to obtain a great deal on the investments you make. An evaluation is basically the most important action you will take while you are creating your investment strategies. There are many different factors you can look into while you are evaluating a company as well.

An essential piece of data you must look into as you are evaluating a company is the amount of debt and the value of any assets the business may maintain on its records. As you are checking the financial data relating to the company you are interested in, you should add up the total value of the assets the company owns and compare that total value to the size of the debt the business owes.

In an optimal situation, you will find companies that are selling below the difference of this equation. If you discover a company selling for less than the value of its assets, you are looking at a good investment, because you are purchasing a dollar for $. 50 in this case.

There are many other factors you should look into if you wish to make a great investment for your IPO purchase. A very important factor you can look into when you are analyzing a stock is the value of the income the business is pulling in. The most important stat inherent in the financial statements of a company is the amount of revenue the company is bringing in each month and each year. This number should always be larger than the total operating expenses of the company you are interested in. If the value of the revenue is larger than the operating expenses, you are looking at a profitable business venture.

Another factor you should look into when you are evaluating an IPO is the type of business the IPO is representing. When you are investing, make sure you are purchasing a company that you can stand behind. The easiest way to stand behind a company is by deciding whether or not you would purchase the products the company sells personally. If you would personally purchase the products the company sells, you are looking at a solid investment opportunity.

Other factors that need to be investigated before an investment can be made include the type of market the IPO is being released into, the companies or individuals who are releasing IPO, and other factors that affect the value of the investment once it hits the open market.

If you take all of these aspects of the IPO into consideration, you will certainly make a decent investment once you are finally ready to purchase the IPO. As long as you know that you are purchasing a company that is worth more than the value you are buying it for, or the services and products the business is offering are more valuable than the company is currently being evaluated for, your IPO valuation will yield you profitable results.

There are many things to consider on how to IPO properly and legally. For more information about the IPO process, be sure to consult with the professionals.

Broker financial services is a term that encompasses a variety of services, typically to the individual investor, that take a client’s entire financial plan into account. The exact services vary between firms, but most provide some or all of certain basic functions.

One of the first things the broker will do is sit down with the client and determine the client’s goals and expectations. Naturally, buying and selling stocks and bonds is one of the broker financial services offered, but the broker will also analyze the client’s willingness and ability to take risks. For those with little risk tolerance, such as those near retirement age who have a comfortable nest egg established, he will recommend funds that minimize risk. Others who have the need to be more aggressive in their investment strategies may be directed to higher risk opportunities, such as hedge funds.

The analysis of the client’s insurance needs is also typically included with broker financial services. Life insurance, long term care, or umbrella policies may all be evaluated or recommended. The sales of the policies are sometimes handled by the firm, but may also be acquired elsewhere.

Broker financial services usually include directing the investments in a 401(k) or SEP to help maximize the return. They can also assist with 401(k) rollovers or evaluation of a self-directed plan.

Home ownership and/or equity evaluation may also be offered as broker financial services. Topics such as the timing of sales (for purposes of capital gains taxes) or reverse home mortgages are often included in the package of broker financial services offered.

Retirement planning is one of the main functions of broker financial services. The broker will meet with the client to determine how much will be needed for a comfortable retirement. By factoring in such things as inflation, current salary and savings, expected income from Social Security, among others, the broker can advise how much the client needs to save or invest and the rate of return needed to achieve the stated goal.

Inheritance planning may also be one of the broker financial services offered by some firms. The broker can advise on the benefits and disadvantages of trusts, “gifting” the inheritance during life, and other strategies that can impact the taxes for their heirs.

Few online firms can offer complete broker financial services. Most often, it is necessary to find a firm locally so that clients can meet face to face with the broker for a lengthy initial consultation and then periodic follow ups.

When planning to allow one firm to handle all broker financial services, it is important for potential clients to investigate the firm’s credentials and record. For example, if the firm sells insurance, they should be properly licensed and registered. Likewise, they should have the ability to trade directly on the market floor. It is also best if the broker is a licensed financial planner, with credentials in estate planning. Large, established firms with nationwide offices are typically safer, since small, independent brokers can go out of business for a variety of reasons, perhaps taking your investments along.

David has been writing articles for nearly 2 years. Come visit one of his latest websites over at http://www.internetstockbrokersite.com which helps people find the best internet stock broker information and resources they are looking for when deciding the best way to tackle the share market and what options are available.

What if I told you there was a way to improve your financial situation versus your peers. Would you be interested? According to a November 2009 survey of high net worth investors by Investment News, 99% of wealthy individuals and almost 90% of mega-millionaires felt that their financial situation is somewhat worse or much worse than their peers.

Now why would this be the case? One answer comes to mind, the wrong approach to their investments. It was too easy during the 1980s and 1990s to hire an investment advisor or manager and get market like returns with little downside volatility. However, as we entered the twenty first century something changed, we entered a secular bear market.

Secular bear markets are periods of great volatility of return and little upward price movement outside of a large trading range. Such periods last between 17-25 years on average. Here is what has happened in recent such periods in the economy:

Market Period – Annual Return

2000-Present
-4.68%

1966-1982
.83%

1929-1953
1.69%

1906-1924
-4.29%

The only way to make money in secular bear market periods is to trade the large up and down swings of the market. Buying and holding securities just does not work in this type of market.

We believe that is where “trend following” shines. Trend following strategies don’t try to predict market or stock movements, instead they capitalizes on the market’s movements wherever or whenever they occur. Trend followers respond to what is happening rather than anticipating what might happen.

So what is a trend? A trend is a strong, sustained move that can last from several days to a number of years. Typically a trend is something we see everyday that translates to continuing price move in the stock markets. An example would be the rising dominance of a country or region of the world that translates into a long and sustained upward move in stocks from that country.

The goal of the trend follower is to let a new trend develop and then invest with that trend. The trend follower then holds that position until there is a reversal. Trend following is based on the premise that there is always a trend taking shape somewhere in the market. The trend will lead to a strong move higher (or lower) in price. If the investor can identify the trend and jump on board, they will make money.

The smart trend follower does not invest at the exact bottom because he/she wants confirmation that a turn (reversal) has occurred. Likewise the trend follower will generally not sell at the exact top (which is more easily identified after the fact). They sell after a clearly identified change in trend (reversal). Therefore, the trend follower is able to capture the “meat” of the trend.

Another very important point is that the trend follower is indifferent as to whether the trend is going up or down to capture his/her return…as long as there is a trend they can make money. This latter statement is very important, the trend follower is agnostic as to the direction of the trend so they can make money or at least protect capital in down markets. This gives the trend following investor an advantage over their peers and improves their financial situation.

So if you want to improve your financial situation, on a relative or absolute basis, versus your peers, trend following may just be the answer.

An author, registered investment advisor and Personal Financial Specialist, Jeff Diercks has helped investors grow and protect their portfolios in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in ETF investing and trend following investment strategies. Check out his website at http://www.intrustadvisors.com for a number of free resources including a powerful guide to investing called “Make the Trend Your Friend.”

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.

There are a number of reasons why an ETF (exchange traded fund) can be a safer and more cost-effective investment than a mutual fund or a portfolio of individual stocks.

ETFs are a quick and easy way of creating a diverse portfolio. Investments in ETFs can cover a wide range of options in a number of sectors, locations and classes of assets, as well as different investment strategies. They usually track a collection of securities that underlie the benchmark index. This benchmark can be formed from bonds and stocks, as well as other securities (e.g. commodities). It is much harder to create such a diverse range of investments by investing in each element individually and the risks are much less with ETFs. One or two ETFs can provide as much asset class coverage and weighting as a large selection of carefully researched stocks and bonds.

There is excellent trading flexibility with an ETF. Unlike mutual funds, where the sale is processed at the end of day net asset value prices, ETF sales go through immediately. ETFs trade globally on all the main stock exchanges so the price you get will be the price quoted at the moment of sale. A range of choices for trading is available, including limit and market orders, buying on a margin, and short selling. It is sometimes possible to buy and sell options on ETFs on derivative markets. There is no minimum investment threshold required to buy ETFs.

It has been proven in numerous studies that mutual funds rarely outperform the return of an index. ETFs can do much better than mutual funds. They can efficiently realize index performance and the yearly management fee is lower than for mutual funds.

This cheaper management fee means that investing in an ETF can be more cost effective than putting your money in a mutual fund. Over a long-term investment, this difference can add up to substantial savings.

Plenty of information is available for investors to see what is happening to their ETF investment. The holdings are reported on a daily basis, with the specific weighting of the constituents of the tracked index being disclosed. This will show when there has been a modification of the position of the ETF in a particular security. The transparency this gives generates confidence in the maintenance of the original strategy.

Mutual funds generally limit their reporting to just twice yearly, which can leave the investor unaware of what is going on for many months at a time. By the time the report is made available, the fund could have changed drastically in terms of the holdings, weightings or investment style.

It is usually more tax efficient to invest in an ETF rather than a mutual fund. Capital gains tax is usually only paid on ETF investments when shares are sold, while it must be paid on the gains made by a mutual fund even while the funds are being kept in it. The investor could also end up paying more capital gains tax if they invest in individual shares and stocks, as there will be frequent tax payments to be made and there will also be transaction commissions to pay. ETFs may offer regular dividends or distributions and tax will have to be paid on these if it is held in a non-registered account.

The diversity of ETF investments means that they can be far less volatile than other investments, which reflect the daily changes of individual stocks. The overall ETF movement will depend on all of the holdings that are part of the fund, so the other holdings will moderate a single volatile movement in one. This reduces the risk to the investor.

Looking for more EFT strategies and tips? Visit us at Global Mutual Funds – Australia’s pre-eminent provider of global investment product alternatives and solutions. Find out what you need to know about equities, options trading, and how exchange traded funds can help build your long term wealth.

In our “can’t wait”, “get it now” society, wouldn’t it be nice to learn how to get more from your investment assets. Wouldn’t you like to secure a financial future for you and your family, while worrying less and prospering in both up and down markets? Obviously, this is the American dream! However, it is an achievable dream. Here are seven investing secrets to help you achieve these elusive goals. You won’t hear these from your broker!

1. Markets move in cycles. Learn to recognize these cycles and the investment strategies that prosper in that cycle. Right now we are in a secular bear market. Expect a lot of volatility and little long-term market movement within a large trading range.

2. Buy and hold won’t work right now. The reason, see secret #1. You need an actively managed investment strategy to win in this environment.

3. Trend following works in all cycles, especially secular bear markets. Find an advisor or manager who can spot up or down trends and ride them to profits within this longer term trading range.

4. Mutual funds are dead! Exchange Traded Funds (ETFs) are the way to go. They are low cost, marginable, can be traded intraday, give broad diversity of holdings, allow for stop loss orders, cover just about any stock, bond or commodity market and put and call options can be purchased or sold against the ETF position.

5. Risk management is the key to survival. Make sure you or your advisor have a written plan on how to manage your assets. This plan should also be specific as to when positions are entered and when (and how) they should be exited to protect your capital. This plan should be more than the standard investment policy statement.

6. Stay away from CNBC. This is the surest way to poor investment decisions is to get caught up in the 24 hype this channel must produce to keep an audience. If you must watch this channel, do so only during non-market hours.

7. Cut your losers short and let your winners ride. This is investing 101, but it is surprising how many people hold their losers and eagerly take profits on their winners. Let your winners ride as long as the trend is intact. Limit losses to no more than 6-8% of your position cost.

An author, registered investment advisor and Personal Financial Specialist, Jeff Diercks has helped high net worth and institutional investors grow their investment assets in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in trend following investment strategies. Mr. Diercks’ firm, InTrust Advisors, has a multi-day mini-course that might help you achieve better investment results with your portfolio called “Seven Days to a Life Changing Investment Results.” This mini-course may be just what you need to get you motivated to secure your future today. You can sign up at http://www.intrustadvisors.com/investment-management-services/#sevendays.

The daily results of an inverse exchange traded fund are based on the inverse daily performance of the underlying benchmark or index. A range of derivatives including index swaps and futures contracts are used to meet the objectives of the investment in order to generate results that are opposite to the underlying benchmark or index. This means that the ETF goes up when the benchmark or index goes down, and vice versa. An investment in an ETF is rather like holding short positions, or profiting from declining prices, thanks to a combination of advanced investment strategies.

The results of leveraged exchange traded fund are generated as a multiple of the daily performance return of the underlying benchmark or index. This could be a 200% return, for example. However, they will not provide the same multiple over the long term. In a single day, a leveraged ETF will generally meet the objective for the multiple of the daily performance, but if they are held for longer than a day, the returns will vary from this multiple.

A leveraged ETF works by using a number of derivatives, for example index swaps and futures contracts, in order to provide this multiple of the market exposure for the stocks in the fund. The risks are higher in a leveraged fund, as losses will also be multiplied by the same amount.

Both inverse and leveraged exchange traded funds are designed to be only held short term; which for a leveraged fund can mean just a single day. Investors looking to hold a longer term security should not consider them. Long term, a leveraged fund can drift away from its benchmark due to the effects of compounding, especially during periods of market volatility.

Investors should make sure that they understand the nature of exchange traded funds before they put any money into it, and that they are clear on the risks involved in such an investment.

Looking for more advice on the risks and benefits of exchange traded funds? Visit us at Global Mutual Funds – Australia’s pre-eminent provider of global investment product alternatives and solutions. Find out what you need to know about equities, options trading, and how EFT’s can help build your long term wealth.

Last week I took my car into the repair shop. It was a new repair shop and I had quite frankly been putting off going to this shop, even though it had been highly recommended.

Friends told me about their positive experiences, how the owners were conscientious, very reasonably priced and that I would get far better service than the at the auto dealerships. Yet for some reason I put it off going to see them until my car finally died last week.

Isn’t that just human nature? We wait until the situation seems hopeless to change whether an auto mechanic or something as important as an investment advisor.

Why? The answer is simple! The devil you know is more comfortable than the devil you don’t.

If you are experiencing pain today, why risk experiencing even more pain? We tend to focus on the negative rather than the positive a change could bring us.

How many individuals are doing the same with their investment advisors in a dangerous game that could affect your financial future? You may be saying to yourself, “but my advisor did well last year.”

That may be true, but the bigger question is how did he do in 2008? We are in a secular bear market and stock indexes moves, both up and down, are exaggerated. Big market moves up are followed by big moves down and vice versa. The overall trend of the market according to Crestmont Research during these periods is basically sideways, see Secular Stock Markets Explained at CrestmontResearch.com

Did you know the market averages as measured by the S&P 500 dropped some 54% in the 2007-2008 bear market? Let’s say you were fortunate enough to capture the full 60%+ recovery in the market from the March 2009 lows to date. Did you know that you are still more than 25% below where you were in October 2007, assuming you stayed completely invested throughout that time period?

Did you know that the rally off the March 2009 market lows already ranks as larger than any bear market rally from the depression-era? See the Chart of the Day – Depression-Era Bear Market Rallies.

Now this rally may continue for the next one or two quarters, but let’s face it nothing goes straight up. If your advisor hurt you in 2008 and has not done anything to change his/her investment process its time to move on or at least diversify your asset management between multiple advisors.

Finding an investment advisor that can earn high returns in a strong bull market is not your challenge. It’s finding an advisor that will protect your capital when markets are colliding. That is the challenge!

An author, Certified Public Accountant and Personal Financial Specialist, Jeff Diercks has helped high net worth and institutional investors grow their investment assets in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in trend following investment strategies.

InTrust Advisors has a multi-day email series that might help called “Five Days to a World Class Investment Advisor.” This email series may be just what you need to get you motivated to secure your future today. You can sign up at http://www.InTrustAdvisors.com.

When it comes to your money, it seems hard to know how to use it wisely. It can be quite daunting to decide on which investment techniques will bring the most returns with the lowest hazards. It varies from individual to individual, the amount of risk they are willing to take on certain investment prospects. Remember it’s your money and you can choose how, when and where you invest it. And you decide the investment strategies for your own future.

Attempting to understand and comprehend the complexities of the investment world and the language is overwhelming. It could be simpler to ask your ma and pa or family for help with your investments. They may or may not be as experienced as they or even you suspect your mother and father are. For instance recommendation online offered can be information such as don’t invest your money in the stock market if you are counting on it take it out in less than five years.

Asking an investor or a finance advisor will help you learn more about the investment world and different investment methods. Again don’t feel the advice given to you is set in stone. You are allowed to decide where and when your cash is invested. Remember their counsel is just recommendation; it’s not always the best way to invest your money.

Taking a class on investment can be extremely useful. This class shouldn’t be given by an entity that is bias towards a certain way of investment. Instead you need to enroll in an economics class or investment techniques class at your local varsity. Such info will help you better understand the options of investment open around you together with provide you statics and facts that are not as biased. The regular routes are the stock market, bonds, cash markets and your personal savings. Other investment that deals more with assets is investing in gold, collectibles, property and commercial property. There are uncommon new kinds of investments such as online trading.

Online trading is not dealing with stock market trading. It is an investment opportunity where you may have a choice about the lending, rate of interest and period of time. All business gets done online which is a novel concept. Borrowers purchase Notes online and then fulfill the contract of that Note.

Before you leap into the world of investing, find out more about all the opportunities and assorted investment techniques that are available to you. Receiving advice is helpful to your journey, but do not be forced into any investment ideas you are unsure about. Make the best of your money by studying about investing.

My name is Nate, and I like money so I always search for coupons. I also like to sing a lot.