Investment Articles

Due to the fact that costs of education are constantly growing (both in private and public sectors) it is really important to consider college investment plans. These are plans that are intended for educational purposes only.

So, if you have a child and you want to be sure that he/ she will have an opportunity to study at a university then you should definitely learn as more as possible about college investment plans. Here are some basic aspects to be aware of before you start dealing with this issue.

It’s obvious that the key function of this plan is to fund your child’s education. While making this choice you will be also provided with some tax benefits and, in addition, it will be possible to invest the money you are putting aside.

The other essential detail to pay attention to is that the funds are controlled by contributors till the child reaches a college age. Besides, it should be underlined that while dealing with these plans, funds invested must be spent on higher education only. As concerning the contributions, it is essential to keep in mind that they should be done on a regular basis because only in such manner you will be able to save enough.

It goes without saying that this is a really important step for every family to make and that is the reason why, before making your final choice, you should make a thorough research. It is always better to evaluate several plans that are available, to compare their investment strategies, tax benefits and, of course, the greatest attention must be paid to the way your child will benefit from the plan after reaching the college age.

In fact, the best method to make your research is browsing through official websites. In this way you will be able to find all required info in a quick and comfortable manner. Plus, it is recommended to consult a financial expert about which of the college investment plans will be the most suitable for you.

Join the public discussion about Eigeline Network and its financial planning potential in this YouTube video – your feedback is highly appreciated.

Investment is the commitment of money or capital to buy financial instruments or other assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument. Investment is a term normally used in the fields of economics, business management and finance. Your focus in investing is on return and can run the spectrum from conservative to very belligerent in terms of risk.

The best way to defend your stock investments is to own a broad mix of large and small companies and foreign and domestic issues. Business risk is, maybe, the most familiar and easily understood. The main technique for reducing investment risk is diversification. Thoughtful investment selections that meet your goals and risk profile keep individual stock and bond risks at a suitable level.

Many of the wealthiest people in the world owe their fortunes to different types of residual income – from stocks and bonds to investment trusts, real estate and possessions. Technical selection assumes that security prices typically move in identifiable patterns that can be determined through chart techniques to extrapolate trends.

In these difficult days when the soundness of our financial system has come into question, it is critical to find the optimum investment strategies which will guard and grow your wealth. I shall let you in on a little secret about investing; it is not nearly as hard as you think. The first thing you require to do is realize that there is no “perfect” way or time for you to start.

Basic Knowledge

As anything in our life, money has its own laws. It is impossible to become rich if you do not know basic rules according to which money is working. The secret of wealth is not in earning money, but in saving and multiplying it.

Not long time ago I have dreamt of winning a lottery. I thought that this will decide all my problems. But I want you to know, that no matter how much you win sooner or later you will become even more poor than you were before. What are the typical thoughts of almost every “jack pot dreamer”? I will: buy a house, bye a car, I will travel, I will give money for those relatives/friends who need it. Have you noticed that here is only one idea: spending, spending, spending. And if you permanently bite an apple it will end.

For all time people have always loved money. Just as they love it now, they will continue to do so in the future. However, at the same time not having enough money causes suffering for billions of people. What a nightmare! What’s the problem with making money? Maybe it’s just that we don’t understand it. Why do so many people get depressed when they think about making money? Perhaps because
we are instinctively afraid of things we do not know much about how to create a cash flow.

Almost everyone knows ways to make money and they think this is enough for success and financial freedom. But look at the people who by the age of 50 earn five times more than at 25. Are they more successful? More protected? Can they now work just for fun? Do they have enough cash flow? Of course not. They may have better cars, larger homes, better credits, more sophisticated food and more expensive clothes, but they have failed in changing the most important thing. Every day they still have to find ways to make more money. As a consequence, these people missed out on freedom.

How many hours per month do you exchange for money? How much money do you get without any effort?

One of my friends is earning over $500,000 a year but neither I, his wife, his children (I wonder how they were even born), nor his friends ever see him. We sometimes hear about him and know that he often complains about his health, his boss and employees, that he is tired, busy or has not used any of his vacation time. We see him once a year at his birthday party if, of course, he can get there. We understand that we do not want to live the way he does. He has money but does not have a “quality” lifestyle. I call this income “low-quality”.

Financial Freedom
Control over your financial life can provide you with important resources such as more time, increased cash flow and better health. I list “time” first because this is the most important component of our financial freedom.

So what you should learn when dreaming of Financial Freedom?

-how to spend your money

-how to save your money

-and, of course, How to Increase Your Money by creating a Cash Flow

Where can you learn all these things? In School? College? Now I know only 1 place where you can do it. International School of Investments and Finance

In the course Master of Personal Finance and Master of Investments the most successful investors will tell you about:

·Investments goals

·Financial Planning

·Investment Instruments

·Principle and rules of investment

·Investment Strategies

·Personal Finance

If you can not control the process You CAN NOT manage it. Control is understanding of the laws and schemes according which these or that processes are developing. Money is not the exception. Begin to understand money, take them under your control, Grow Rich!

For more information, please, visit http://www.annanikulina.com

Over the years, investors have viewed diversification as the one “true free lunch.” Indeed, asset classes such as global stock markets, real estate, timber, commodities, managed futures, and other alternative assets – have served their proponents well. On the other hand, some analysts argue that the diversification benefits fall apart at the worst possible moments. This seems to be true, as witnessed by the recent financial crisis, which saw well-diversified portfolios decline by -25% or more. How can both sides of the argument be true? Is there anything an endowment or institutional investor can do?

Using the best practices from institutional investing and hedge fund strategies – and applying a mathematical and scientific approach to improve statistical and risk management concepts – can maximize the use of information and available diversification potential. It is useful to apply theoretical approaches in a sensible manner to ensure practical and robust results in our pragmatic world. The result is a more complete model that combines Monte Carlo analyses, Post-MPT, and more meaningful risk measures. Below, are a few thoughts on these statistical measures and methods.

Global Stocks, Rising Correlations, and Semi-Correlation

Starting in the 1980’s, international stocks were the hot investment category. They added diversification to a well-diversified portfolio. The Japanese stock market moved from about 10,000 to around 40,000 during the 1980’s and helped spur interest in foreign stocks. U.S., European, and Asian stock markets have always been correlated to one another, but correlations were normally in the 0.4 to 0.7 range before the mid-1990’s.

Mean-variance and other Modern Portfolio Theory models were “happy” to see these relatively low correlations. Portfolio optimizers showed you could increase your overall equity exposure slightly, allocate a material amount of your equity exposure to other regions around the globe – and still increase your portfolio’s overall risk/return characteristics. Over the years, international stocks (instead of just a home country’s stocks) have served diversified portfolios well.

However, as with most good ideas, the benefit of international stocks dwindled over the years. Mathematically, there will always be some benefit to global stocks, but the numbers show a generally increasing (rolling) correlation levels over the years. Correlations between foreign stocks and the S&P have risen from an average of about 0.5 or 0.6 in the late 80’s and early 90’s (when international stocks started to become popular) to current levels of around 0.8 or 0.9.

Key Takeaways:

Correlations amongst global stock markets have generally risen over the years; diversification benefits declined.
Interestingly, there are spikes in correlation, especially at times of financial crisis. Note 1987 Crash spike, as well as the very high correlations during the current recession.
The previous bullet point quantifies the observation of many investment analysts: that the diversification benefits of many asset classes are less than expected.

Semi-Correlation

In general, we have seen that markets sometimes decline together – and diversification benefits dissipate – at the worst times. When there is turmoil, markets become more correlated, as portfolio managers cut losses and try to maintain liquidity. I have developed proprietary indicators (* is one example, below) to determine if diversification might really help in times of need.

Correlations & Semi-Correlations for S&P 500 and Various Sectors (1987-present)

Correlation Nasdaq-S&P = 0.84
Correlation Europe-S&P = 0.80
Correlation Asia-S&P = 0.69
Semi-Correl(*) Nasdaq-S&P = 0.95
Semi-Correl(*) Europe-S&P = 0.93
Semi-Correl(*) Asia-S&P = 0.82

I sometimes mention “semi-deviation” as a better overall risk measure than standard deviation (because it measures downside risk). Semi-correlation is a similar approach that takes some of the noise out (noise due to upside moves / correlation) and tries to measure “times of trouble” more directly. From the chart above, we can see that correlations do indeed increase during financial market volatility. More specifically, the chart shows that when the S&P declined, the Nasdaq, European, and Asian markets were lower about 90% of the time. Indeed, if we study “material” declines, the diversification numbers worsen to closer to 100%.

Real Estate Correlation over Time (1982-present)

Real estate is another asset class that has provided good diversification over the years, with a long-term correlation with stocks of around 0.1. Based on data from 1982 until the present, we have seen correlations rise from near 0.0 to recent correlations closer to 0.3 or more, with the recent financial crisis being closely related to real estate.

Summary

The correlation of some asset classes has risen over the years. In addition, history has shown that the actual benefits of diversification are lower than expected, due to markets declining together during market crises. Using a good set of tools can help investors get a more realistic understanding of the probabilities. These tools have uncovered some interesting relationships amongst asset classes and strategies.

In addition, the financial markets and world around us are constantly evolving. The value of a good idea often declines over time. What will be the next great investment idea? It is important to constantly improve to stay competitive in our fast-moving world. Continual research and a collaborative effort, with an empowered investment team, can help an organization stay ahead of the crowd and achieve good risk-adjusted returns.

Carlton Chin, CFA, is an MIT-trained quant who enjoys applying numbers to everything from the financial markets to sports analytics. He has worked with institutional investors on portfolio optimization and as an alternative investment strategy proprietary trader.

Carlton been featured in the NY Times, Wall St. Journal, MARhedge & Financial Trader. He holds both undergraduate and graduate degrees from MIT. http://www.CARATcapital.com

If you’ve decided to go in for sports betting rather than any other traditional forms of investing, such as stock options or forex trading, you should be aware that you’ll need to develop your money management skills in order to be successful. Money management concepts are normally easy to explain and even to understand. The actual problem arises only when you start using these techniques. But with a little effort, you should be able to master them quite easily.

Money management strategies help you manage your funds well. Your sports investing strategy will entirely depend on your investing budget and your bankroll. And because it completely depends on the available funds, there’s no way you will spend beyond the allotted amount and exceed your bankroll. To understand this, here’s a small example. Let’s say you have a $1,000 bankroll and let’s assume you’re just starting your stint with sports investing. In this case, you’re new to sports investing and you’re new to the sports investing system as well. In sports investing, you’re termed as a level 1 bettor. When you’re a level 1 bettor, you’re expected to invest not more than 1% of your bank roll, in this case, $10.

You then move on and depending on your experience, you can invest 2% of your bankroll. This percentage then increases to 5 and then 10 too. Level 10, however, is very rare because these are players with over a few years of experience. Their experience allows them to invest more and reap more. And because they’re experienced, the chances of them losing their investment are very minimal. Until someone reaches this level of expertise, sports betting systems don’t allow investing 10% of their bankroll. Therefore, most people are within the 1% to 5% bracket. So even in sports betting experience does come with wisdom.

The above example may have been helpful in understanding the basics of money management strategies in sports investing. This example also illustrates that there is a structure to sports betting. You don’t bet randomly. You follow a process over the years in terms of the amount you invest. This structure helps you be a much more sensible bettor and at the same time make considerable amount of money in the long run. These investment strategies are good enough to make a living out of sports investing entirely and also remain a great income source after retirement.

Dan Penner is an expert in sports investing and is also the owner of Investors Group Sports Picks and The Sports Investor.

With the world economy turning and tumbling and great business empires collapsing overnight, making an investment has become more risky than ever before. This fills the investors with anxiety and the consumers with fear, resulting in further economic recession. But there are several investment methods that remain relatively safe in spite of the conditions of the market.

Without a doubt treasury bonds remain as the safest investment method in a tough economy. Saving in fixed deposits is also a safe and reliable investment method even if the interest rates remain low.
Investing in gold and other precious metals like platinum and silver are also a good option. Even though the price of these metals tend to fluctuate over time, the turn over is generally good. In spite of all the technology, all world currencies are dependent on the value of gold, making it a very reliable investment method.

Investing in penny stocks, stocks which cost less than $5 is also a great option. Unlike investments in the normal stock market, investing in penny stocks is more suitable for times of recession because it requires less capital. Having the ability to hire a broker also offers the less experienced and less knowledgeable novice investors a chance to enter the market. However, an investment in penny stocks must be done with great care, because of the many penny stock scams that have been uncovered in recent years.

Another method to make the best of these recession times is to invest in real estate. With the prices of houses, apartments and land, as well as of building materials and labor costs falling, these times are ideal for investments in this sector.

With the right investment strategies you can use these bad times as an asset. If you can think ahead and make the best of today, your investment is sure to boom once the world economy turns better in the near future.

Many fantastic investment options like investing in penny stocks, gold and real estate are available to future investors in spite of the tough economic conditions.

I can’t tell you how many times I have heard that the key to making money is “hard work” in the last six months. The new economy appears to have resulted in a 180 degree turn from the mindset of a little more than a year ago when it comes to investment decisions. The overall lack of stability across the board has really shaken the fundamentals of our investing philosophy.

As the credit markets are still very tightly guarded, and as a commercial banker friend of mine recently said, “we are really only loaning money to individuals that have enough money to cover the loan.” Many folks are going back to depression era thinking of it is time to tighten up the belts and hit the pavement, the key to making a good living is to hit the streets with hard work.

Overall, this may not be a terribly bad thing. Investment strategies were getting pretty crazy, like hedged derivative swaps, which if you don’t know what that is, that is okay because I just made it up; which isn’t much of a stretch from what was going on with our Wall Street friends. In a nutshell, investment strategies were being created to take advantage of the latest phenomenon in the market, and you just had to trust your broker knew what he was doing. This is somewhat reminiscent of Enron, however they couldn’t even explain what they were doing, but for a while there, they were printing money, or so it seemed, and all was right with the world.

Times have changed; investors now want to know what they are investing in, to the extent that CD’s and treasury bonds are popular again with, even with their low interest rates.

Just a little food for thought, but historically speaking the most wealth is made coming out of recessions and market adjustments. This wealth, is absolutely not made by individuals who believe that it is time to hit the streets and work harder, nor are these individuals pulling out of the market and investing in CD’s and treasury bonds.

The largest wealth is created in either emerging products/services or investing in significantly undervalued assets. There will always be a new greatest thing out on the market, however this is the more risky of the two substantial wealth building strategies, as there are countless failures for every new product success. There are businesses, like venture capital funds which take the Babe Ruth approach to investing, failing two thirds of the time, having a few base hits, but the occasional home run can make or break the company. Varying statistics show that these venture capital funds only work with less than 1% of the potential opportunities that cross their desk, so it is obvious that this is a full time, specialized endeavor best left to the professionals with DEEP pockets.

On the other hand, investing in undervalued assets, does not require you to be willing fail more than you succeed, it simply requires a little restraint and a brain. The restraint is required because the reason many fail with this type of strategy is because they jump on the bandwagon of the next best thing, or the get rich quick lure is simply too good to pass up. What is required here is a simplistic investing strategy centered on investments you understand.

For example, most investors and advisors preach diversification, don’t put all your eggs in one basket, however if you take a look at the wealthiest investors on the planet, you will find their strategy is the exact opposite. Take Warren Buffet for example, his entire strategy revolves around investing in a handful of companies that he knows and understands for the long haul. On a daily, weekly, monthly and yearly basis the stock market can appear to be pretty volatile, but no matter how volatile it may appear stretch the results over a long enough time line and the trend will emerge. Warren always sees the long-term view of the market and is able to pick out strong companies that, for some reason or another, the market, in the short term, has significantly undervalued. Additionally, where most investors buy stock, see the stock begin to slide even further then attempt to sell in a panic, Warren will simply buy more, knowing that he is continuing to buy stock as it approaches the bottom of the temporarily undervalued company. Once it turns around, he gets to ride the wave back up, and will continue to hold on to the stock as its value increases over time.

Another strategy, and my personal favorite, is investing in undervalued real estate. Like any type of investment, investing in real estate is similar to steering and airplane. Between any two points along any journey, an airplane is off course the vast majority of the time. Winds are constantly changing and pushing the plane off course, with the pilot having to constantly make corrections, sometimes undershooting (winds stronger than anticipated), sometimes overshooting, (winds less than expected), the course thus having to correct the corrections. The real estate market is the same way. At any given time, the estimated value of a property can be either over valued or undervalued based on the current market conditions.

Like Mr. Buffet, the key to knowing where the current market estimates are vs. the more accurate long-term view of a properties value is simply to take a long view of the market stretching far enough back in time to see where the general trend line is and compare it to the current value. When the current market conditions place a properties value significantly under the long term trend line, then you have a true candidate for a potential undervalued property. The next step is to understand the actual market conditions themselves to determine whether the local economic environment is simply over reacting to economic conditions, or if there is an underlying problem. For example, in Florida, real estate prices spiked through the roof, the so called bubble popped sending real estate values plummeting. In this example the market over reacted on both sides, market prices were too high to begin with, but the subsequent collapse has sent prices back almost 20 years in some areas, which is also an overreaction and an opportunity for a long-view investor to capitalize on significantly undervalued real estate. The scarcity principle works here as there is simply only so much coastal/warm weather real estate in the United States, and values will not stay depressed forever.

On the flip side if you are in a market that is propped up by one or two major employers that either are faltering or considering leaving the area, then the problem is a local one and an investment in this area would be unwise.

In short, if all else remains equal and the only change in the real estate market is the real estate prices adjusting to the macro economy, then look for over reactions for investing purposes. If the local economy is faltering due to micro economic conditions, then steer clear.

One of the key bonuses to investing in real estate is the principle of leverage, meaning banks will lend on real estate but not stocks. But we will cover this in another article. Stay tuned and smart investing.

http://www.problempropertybuyer.com
http://www.wealthbuilderinvestments.com

The market has been largely news-driven of late, fluctuating to the tune of the latest headline. Stocks have been taking it on the chin, but the news is not all that bad. In fact, the news remains pretty good:

1. low rates
2. liquidity
3. good earnings
4. negative investor sentiment

The problem is that all of this good news is old news.

In the big picture, Greece, Spain and the rest of the EU will not bring down the world. The steps the EU, IMF and individual nations have taken recently are appropriate and should help resolve the crisis. Just this week, both the Germans and British announced additional austerity measures with large cuts in government spending. Yes, it will dampen the strength of the economic recovery – not only for Europe but also Asia and North America – but we already know the world is in a slow growth environment.

Stocks appear oversold right now, and should not “let go” quite yet. The big question will be consumer spending. The last few reports have shown moderate increases, and if that trend continues we’ve got a new bull market on our hands….but that’s not what I am expecting. My crystal ball shows a severe slowdown in spending, continued high unemployment and lower-than-expected GDP. That will lead to the dreaded deflation, which will be horrific for stocks. Regardless of the outcome, we remain alert and on the ready.

Investor Strategy

Different economic cycles require different investment strategies. Stocks do well during inflation periods but get hammered by deflation. Bonds do well with deflation but get crushed by inflation. And of course, during a crisis of confidence everything gets killed.

This is a very dangerous environment and investors must be prepared with a “tactical” investment approach. In addition and most importantly, there will be a time in the near future when you will need to be in cash, so you must have an exit strategy.

Keith Springer, President of Capital Financial Advisory Services a SEC Registered Investment Advisory Firm, providing Wealth Management and Mortgage Consulting Services. For more information on how to build and maintain a solid retirement plan, please contact Keith Springer at 916-925-8900 or keith@keithspringer.com, http://www.keithspringer.com

Exchange traded funds have become the newest investment fund ever since the year of 1993. These trade funds have an easier and better trading option and are definitely more diverse when it comes to portfolio management. They are more convenient and definitely have more added benefits. Since then until this very day, the investments made to the ETF has increased to about two hundred and fifty billion dollars.

Exchange traded funds are in tune with a particular country or a company from a particular country. ETFs are different from mutual funds in the way they are traded. They are bought and sold via a stock exchange just like a company’s stocks and bonds. ETFs, unlike stocks, are traded through the whole day and are not kept available only at one given point of time. These are traded depending upon their demand and supply, unlike other investments that are based on the funds’ contents.

To many investors, bonds may not be the most exciting of ways to build ones portfolio, but it surely is looked upon as a reliable measure. Exchange traded funds on the other hand are more popular and its popularity is gaining much importance in today’s market. If you are a person who wishes to have more excitement and reliability at the same time, then it is time that you looked at the ETF bonds. Since its inception, in the form of assets in ETF bonds in December 2004, the investments to such bonds have gone from $8.5 billion to more than $90 billion over the past few years.

Unlike other bond funds, an ETF bond has better transparency. The true value of the ETF bond along with the possibility of trading them in the public market makes them even more appreciated. These bonds also have a very smaller fee attached to them. Commissions are also deducted every time you buy or sell an ETF bond, but unlike other bond funds, these commissions need not be paid if fund trading happens for a longer duration of time.

As an investor, you need to remember that investment strategies and investment products differ from one investor to another. Just like all other investments, ETFs too have their own benefits and drawbacks, but overall, this would be that investment tool which provides total transparency along with the other characteristics of a bond.

Darius has been writing online for a while now. He has a wide range of interests and topics that he likes to write about. You can check out some of his websites at http://www.daliteprojectionscreen.org and http://www.citronellabarkcollar.net

This article takes a comprehensive survey of those investment risks that, as an investment advisor, I manage on an ongoing basis for my clients across the Greater Toronto Area.

Managing the 10 most prevalent investment risks:

Time Horizon – the amount of time you can spare to have your money tied up in an investment. Investment mismatch is where money that is earmarked for the short term is invested in a long term strategy and vice versa. The riskiest type of mismatch is where money is being saved for the very long term, 20 years or longer, and the portfolio is invested in short term investment strategies. This approach is a two for one deal, as it will eventually also expose you to another investment risk, inflation.

Inflation – when things get more expensive over time. Inflation can be the biggest silent destroyer of wealth over the long term. In Canada, our average annual rate of inflation has been 3.2% since 1914. This means that over a period of 22 years Canadian money can lose 50% of its original value due to inflation. Imagine saving for 30 years only to find that your purchasing power diminished much more drastically than you expected by the time you were ready for retirement. On the other hand, a reasonable amount of inflation gives rise to the increase in value of hard assets such as property, equity shares and some commodities. Investing in these harder assets helps to manage exposure to inflation, over the long term. Incorporating such assets into your investment strategy involves balancing financial planning requirements with tolerance for investment risk.

Interest Rates – the amount of interest you receive for lending money. Receiving interest income can be an important part of your investment strategy. But beware! Interest rates are a constant moving target that can erode the market value of your bonds, similarly to the equity market. In order to manage interest rate risk, bond portfolios must be properly constructed by diversifying within the various characteristics of all available bonds appropriate for consideration.

Liquidity – the ability to cash out of your investment anytime, easily and at a fair price. It’s hard to sell something when nobody wants to buy it. Worse is when there are enough distressed sellers in a market at any one time that they can drive prices down, farther and farther. In order to effectively manage investment risk involved with liquidity, I recommend diversifying investment portfolio holdings and never putting all your money into one single asset class.

Recessions – when the economy sucks! Recessions are a natural part of the economy. They can be very tough on people, I agree, but as investors they can present us with good buying opportunities and prepare us for the eventual spring or economic recovery. Opportunities to manage this risk present themselves, in part, because different countries can be at different points of the economic cycle at the same time and certain industries and sectors can experience a business cycle of their own. In basic terms, not everything gets flushed down the toilet at the same time.

Dominating Trends – when things don’t change over a long period of time. Underneath the general economic climate lies the main dominating trend of an economy or even a specific industry. This dominating trend, despite its ups and downs, generally leans in one direction over the long term. As an example, at one time the Japanese stock market was the darling of the investment world. In 1990, its dominant trend shifted downward. Investors who bought at the peak of the Japanese market in 1990, and held on to their investments, were still underwater 20 years later. Even though there were periods of growth along the way, the stock market failed to reach new heights. Typical investors that made money in this market were those that went counter to the traditional buy and hold investment strategy.

Volatility – the degree to which the value of your stocks bounces up and down. There is a direct relationship between the uncertainty of an economic climate and the volatility of certain investments. But, volatility is not necessarily an investment risk, in and of itself. For instance, if an investment doubled your money over a 6 year period, you might conclude that it was a great investment and not so risky after all. If, on the other hand, that 6 year period was so volatile that you had, not one but, several meltdowns, would you still agree that it was a good investment? In this example, the investment risk is about whether we will stomach the roller coaster ride or end up cashing in our chips before the time is up. Volatility leads to emotional investing, even for the hard core investors. Good portfolio construction manages volatility, as an investment risk. It strives to give investors a pleasant ride without sacrificing returns.

Bear Markets – when prices in the stock market have been hammered and everything looks gloomy. Bear market is actually an industry term. It’s when the stock market goes into a funk after a good long run. Bear markets can be short and shallow, or they can be long and deep. It’s difficult to predict the exact beginning or end of a bear market, but once you are in the bears’ den, running from the bear (selling low) is rarely a good strategy. Getting defensive helps to manage investment risk and prepare cash and investments for the eventual end of the bear market.

Bull Markets – when prices in the stock market keep going up and everybody is happy. Yes, believe it or not bull market is also an industry term. It’s the opposite of a bear market. The investment risk involved with a bull market is that it can make investors (and advisors) feel overconfident, thinking that easy money can be made without exposure to investment risk. Knowing when the bull market is about to end is also tricky. Finding newer and younger bull markets is, generally, the best way to manage investment risk when a mature bull market runs its eventual course.

Impatience – the restless feeling one gets when their investment isn’t going up fast enough and they sell too early. I cannot tell you how hard this investment risk is to overcome. It just is. If all the dots have been connected and nothing has changed to make an investment turn bad, then sometimes the best approach is to be patient and wait for the price to go back up.

Susan Mallin works with MGI Securities as a Toronto-based investment advisor. As an investment advisor at MGI Securities, Susan is able to offer clients a full suite of investment services and investment products. Her process was designed to guide clients through a sea of choices in order to help them make decisions, in a manner that is simple yet effective, throughout the journey of reaching their financial goals. Susan’s investment practice isn’t focused on account size or age. It’s about desire, attitude and willingness to succeed.

Copyright Susan Mallin. All rights reserved. You may reprint this article as long as you leave all of the links active, do not edit the article and give the author credit.