Investment Articles

Comparison charts. They can be useful or detrimental, all depending on what you are using them for. Recently, the Wall Street Journal published a comparison chart highlighting the time period between June and September for 2008-2011. The chart’s purpose is to take a look at the starting point of June and use the information from previous years to determine whether the market is trending downward or set to climb in 2011.

What does the chart tell us? Well, looking at 2008, we can see the market was down slightly at the beginning of summer, then seemed to level off for a period right before plummeting. In 2010 the market was a bit choppy in June and July, but then took off. About the same occurred in 2009. So, what is the moral of the story here?

Looking for Trends

After going through the hindsight information we have from 2008-2010, the Journal made a few interesting points. The ultimate conclusion was that “although a global collapse, as seen in 2008, is unlikely, stocks do not appear to be poised for a big rally either.” So, no earth shattering predictions here.

The part of this year-by-year comparison I found most interesting was the fact that the article was using the chart as a way to potentially predict what may happen, due to previous trends, but also noted that the plunge of September 2008 was greatly intensified due to the implosion of Lehman Brothers.

When the 158 year old Lehman Brothers declared itself insolvent, there were no trend charts to predict it would occur, and although CEO Dick Fuld probably saw the writing on the wall for quite some time, average investors like you and me played golf while Fuld met with Bank of America and Barclays, desperate to save his firm from bankruptcy.

Bottom line? If an unpredictable event was a key issue in 2008’s financial crisis, than looking at the chart to try to determine future trends is essentially futile. Why? Because, of course, another unforeseeable event could be currently looming on the horizon, or it may not be. That’s the thing about unpredictable events…They’re unpredictable. Such an event could either send the market into an strong recovery, or pull it into a downward spiral.

What’s The Answer? More Information?

Maybe the answer is to break out more charts, because to really get an accurate picture, we’ll need to look at the strengths and weaknesses of each current investment possibility. This will make our predictions much more accurate, right? No. This will turn us into crazy people with highly irrational behavior who can’t sleep at night because we have to keep up with every news story, not to mention quarterly earnings reports, financial strength calculations, debt ratios, and numerous additional statistics and projections for all our investments. Of course, you realize this is impossible. Even with today’s technology and the millions of reports that can be run, no one can predict the future.

The Real Answer to the Investment Strategy Question

Since unforeseen events will always be a huge factor, trying to time the market, even with the best and most up to date information, is unwise. It is, essentially, a form of gambling. The only way to invest prudently is by using the investment strategy that has been proven to outperform any rise or drop in the market, and it’s pretty simple; short term volatility is always trumped by long term performance.

In order to perform well over time, smart investors will also do the following:

Be aware of and cut fees and unnecessary costs.
Determine your risk potential. The closer you are to retirement age, the less loss you can absorb. Be aware of that and work inside of your set risk parameters.
Properly diversify your portfolio by spreading investments over a wide enough range to minimize risk as much as possible.
Do not get in and out of the market based on fear or panic. Investing with the crowd will cause you to put your money in popular, trending investments. It will also set you up to pull out during times of panic when you see others doing the same.
Return to the basics of buying low and selling high. This involves rebalancing according to a set plan; selling off gains and reinvesting in poor performers to keep your portfolio from becoming improperly weighted in areas that can leave you vulnerable.

What Will This September Bring?

That remains to be seen, but with all the possible scenarios, one thing is certain; trying to time the market or predict the future is not only impossible, but will keep you up at night.

When you understand how the market really works and learn that it will continue to perform over time, you will not have to stress over the news, past performance charts, or even sudden catastrophes or turns of events.

For more practical insights on investment strategies, be sure to take advantage of my resources including my 7 Deadly Investor Traps CD & Workbook.  It’s free of charge and is found at my site http://www.FinancialCoachShow.com. These resources will bring clarity to the most common investment mistakes, such as taking advice from a financial salesperson instead of a fiduciary, and how to discover if you are paying hidden fees and commissions along with your financial advisor’s fees. This information can make the difference in thousands of dollars each year that can go directly into your nest egg instead of someone else’s pocket.

Bryan’s logical approach to investing and his determination to expose corrupt practices in the industry has led him to spearhead his own financial education company and gained him recognition with publications such as the Wall-Street Journal, US Senior News, Investment News, Financial Advisor Magazine, Forbes, Fortune, Kiplinger’s, Investment Advisor Magazine. Bryan can also be heard on his weekly radio show, The Financial Coach, which is broadcast in St. Louis, MO, where he resides.

Know More about Bryan at http://thefinancialcoach.com.

Back in the 90’s there was a comedy series entitled, British Men Behaving Badly which basically depicted the drunken life of two roommates who acted like a couple of two year olds. The title must have been pretty compelling to producers, because it resurfaced in 2002, when the Oxygen network had a three year run with a reality show called, Girls Behaving Badly.

I think if we got together in the investment world, we could come up with a few reality shows of our own. Investors Behaving Badly could depict the real life irrational thinking patterns of individuals who confidently fill out their risk profile questionnaire, determine a strategy for investment success, and then quickly cave under the first signs of pressure.

Here’s our predictable cast of characters. Do you recognize yourself in any of the following?

The Buy-High / Sell-Low Investor:
The star of our show, unfortunately, is the investor who is lacking the basic, yet required ability to maintain a steady, long-term course, despite fluctuations in the market. The buy-high, sell-low guy goes against the first rule of investing, which is, of course, to buy when prices are down and sell off gains when stock prices rise.

Okay, it’s pretty easy to simply point out this wrong thinking. We all know this is backward. Let’s look at the reason why some investors partake in this bad behavior.

This type of investor hasn’t yet learned to discipline himself and acts on feelings of anxiety and fear. In his defense, financial advisors looking to push products have helped to condition this investor for failure. Touting past performance and market timing capabilities, many financial advisors offer ill advice that produces a false sense of security in certain investments. When expected returns don’t materialize or the market takes a dive, the first instinct is to take what marbles he has left and go home.

The solution for the buy-high, sell-low investor? Knowledge of how markets really work and the ability to stay on a proven course are key factors. I believe many investors crumble under the pressure of fluctuations in the market, simply due to the fact that they are not fully persuaded (through proper and available data) that markets are efficient and continue to perform over time. The temptation to bail out is high when prices start to tumble, but if an investor has a properly constructed portfolio, the best plan of action is to ride out the low periods, knowing that missing the upswings will only bring additional grief.

The Non-Diversified Investor:
The next investor in our lineup is the guy who thinks his portfolio is properly diversified just because he has tacked on a small allocation to an international stock or added a few bonds. Basically, this investor doesn’t fully understand how to properly diversify his portfolio. Diversification involves several key factors that need to be decided first. These factors include an investors financial goal, a projected timeline for achieving that goal, and risk tolerance.

Once those three factors are decided, diversification makes more sense. In simplest terms, a diversified portfolio will spread money across different classes of investments in order to minimize risk by reducing the fluctuations of returns. This is accomplished by spreading investment dollars across sectors that don’t track together. When one begins to drop, others will reduce the potential loss because they won’t fall at the same time.

Many investment strategies can be learned and understood through real life business situations. Let’s say you own a convenience store near the beach. When your store first opens, you sell the basics for an enjoyable day in the sun. These items include sun screen, towels, beach toys, and other sunny weather things. After a while you notice that on rainy days you aren’t selling anything at all. These days are quite a loss and are affecting your bottom line. In order to minimize your losses, you may choose to carry items people look for when unexpected storms or problems arise, so you start to carry umbrellas, rain ponchos, first aid kits, aspirin…you get the picture. Sure, maybe you aren’t having stellar sales days when it rains, but you are finding a way to offset your losses by offering items that are purchased at different times. If you understand this, then you understand the basics of diversification. Investments that don’t track together are key to a properly balanced portfolio.

The Market Timing Investor:
We all know this character. He’s the one who pours over the statistics looking for trends and probabilities that will provide him with a winning hand. I say “winning hand” because the market timing guy is essentially gambling with his investment dollars. No one can predict the future and regardless of how sound a company or investment may appear, one catastrophic event or newsworthy change in corporate hierarchy can send a market timer into a stress induced frenzy.

Take for example the recent resignation of Steve Jobs from the Apple corporation. This news, coupled with the fact that Apple shares dropped directly following this event could send a market timer down a path of speculation. Looking at Apple’s inside trading over the past year, an investor could draw some conclusions. William Campbell, former Apple VP of marketing, sold off 3 million dollars of shares just a month prior to Job’s resignation. Going deeper, there haven’t been any insider purchases over the past 12 months, only sell offs. What could this mean? Armed with this information, a market timer could decide it’s time to pull out of Apple stocks, which by the way, returned to normal levels within two days after the CEO change.

We could use plenty of other examples of the market timer. The bottom line here is this: Instead of trying to time the market, predict the future, or figure out what is going to happen next, the prudent investor will properly diversify his portfolio to minimize potential loss, rely on the market to perform, and stop chasing the news. When you have a plan in place, you can live your life, enjoy your family, and stop obsessing over “what might happen.”

The Hot-Stock Chasing Investor:
Last, but not least, we have the investor who just can’t stop himself from following the crowd. Yes, that’s the way we are wired as humans. If everyone is doing it, it must be good. No one wants to miss out. Unfortunately, when it comes to investing strategies in general, this is a bad idea. Why? First of all, most crowds follow hype created in an effort to boost stock prices.

Again, as we always advise, a properly weighted portfolio and self discipline are key. When things are going well, financial advisors and investors alike may be tempted to throw caution to the wind and buy in areas that are hot. The trouble with this is the fact that by the time something is considered hot, it has probably already had its run. So, what happens? Once again, investors fall into the trap of buying higher than they should and then pulling out when the prices start to fall.

Do you recognize yourself in any of our Investors Behaving Badly all-star cast? The best way to avoid falling into any of these unfortunate investment strategy traps is by having the correct plan in motion and sticking to the plan. Turn off the news, stop checking stock highlights multiple times per day, and stop acting on emotions. Grab your free copy of 7 Deadly Traps of Investing and learn how to adopt and stick to a prudent investment strategy that you can work with…instead of against.

Bryan’s logical approach to investing and his determination to expose corrupt practices in the industry has led him to spearhead his own financial education company and gained him recognition with publications such as the Wall-Street Journal, US Senior News, Investment News, Financial Advisor Magazine, Forbes, Fortune, Kiplinger’s, Investment Advisor Magazine. Bryan can also be heard on his weekly radio show, The Financial Coach, which is broadcast in St. Louis, MO, where he resides.

Know More about Bryan at http://thefinancialcoach.com

High CD rates alone are not enough, as venturing in CD requires more strategy and preparation than you think. It is true that having good CD rates definitely make the most of your returns. However, having several CD investment strategies is still highly recommended. Such a strategy, like CD laddering, provides great benefits for optimizing your investment returns.

Fundamentals of CD Laddering

In CD laddering, investors basically deposit their investments in a distributed fashion among CDs that have distinct gains and term durations. Laddering is a mitigation strategy that enhances liquidity and instigates a periodic rate of return. Consequently, it can also restrain the risks of having to isolate your savings in long terms by taking advantage of the varying interest rates.

A carefully planned CD ladder will certainly pay off at different intervals. This only implies that the investor can have greater control over his multiple investments. He can actually anticipate when his return will arrive and make use of that as an advantage. Fluctuating interest rates are unavoidable during this era. If an investor applies laddering, he may take advantage of these fluctuations. For instance, if interest rates are escalating during one of the investor’s pay off time, then the investor may choose to reinvest into a CD with a much higher interest. Or, he may just want to let the savings rollover which in turn, creates a new and much better CD. If the investor wants to liquidate the CD, he may do so.

Investment Earnings on an Interval Basis

One of the great features of CD laddering is the periodic term durations. Instead of having the usual one-time deposit for a very long duration, let us say 5 years, an investor has the option to distribute the total investment into 5 CDs with different maturities. For instance, a $ 100,000 deposit may be divided into five $ 20,000 deposits, each with different maturity dates starting from 1 year, up to 5 years. Every year, there will be a return and the investor will have a great flexibility on how he will reinvest the capital depending on the interest rate fluctuations.

Various kinds of CDs ranging from standard to variable rate CDs can also be incorporated into the ladder strategy. In this case, the investor will accept additional risk while introducing a higher reward. Provisional CDs like market-index CDs can also be included in the laddering plan.

One thing to note is that, reinvesting your principal from one CD into a fresh CD that has equal maturity date to your current longest duration CD will allow you to benefit on high investment rates while consistently receiving great returns. Another great thing with CD laddering is that investors have the liberty to customize their CD term durations; may it be annually, semiannually, monthly or quarterly, whichever he prefers.

More Benefits from CD Laddering

For safekeeping purposes, Federal Deposit Insurance Corporation (FDIC) covers all CD investments, so guaranteed, your money is safe. Moreover, laddering provides higher CD rates compared to standard individual CD rates. With this strategy, investors will be able to get into several interest rates and cost average the finances. CD laddering is perfect for investors who are less aggressive when it comes to investing. Investors who engage in CD laddering experience optimum liquidity and return of investment.

For more information, visit our website http://www.cdrates.org.

I’m a hardcore baseball fan. I played the game in college and to me, it’s truly the all American sport. One of the things that makes baseball so great is the fact that although there is plenty of team effort involved, there is always that moment of truth between the pitcher and the batter when it essentially becomes a one-on-one.

Before their turn at bat, every batter warms up in the on-deck circle. What do they do there? Well, they do what batters have done for decades, of course, they practice their swing with weighted bats. You’ve seen the routine a million times. Depending on the batter’s preference, they can use anything from weighted clay sleeves slid onto the bat to a type of half-bat, half-pipe contraption. Some on-deck circles still have the old-fashioned 20-lb sledge hammer; you gotta love that. Regardless of their device, let’s talk today about the reasoning behind this die-hard on-deck ritual.

The idea behind it is pretty simple and appears to make perfect sense. By swinging something heavier than normal just before his turn at the plate, the batter will perform better at bat. The logic behind this? The bat will seem lighter and the batter will be able to handle it with additional speed, power and agility. Sounds reasonable. After all, batters have been doing this for centuries.

So, What’s the Problem With This?

I’m glad you asked. According to numerous scientific studies, it has been proven that the on-deck routine that has been trusted for generations is completely backwards. In fact, the exact opposite is true. The more weight a batter uses to swing in the on-deck circle, the slower his swing will be in the batter’s box. Coop DeRenne, University of Hawaii’s physical-education professor (and guru of the on-deck ritual) has proven his findings down to the hard numbers: A 10-13% increase in bat weight will cause a decrease in swing in the batter’s box between three to five miles per hour.

Startling isn’t it? So, why doesn’t someone provide the batters with this information? Surely if they were aware of the scientific proof, they would throw this ritual aside, right? Wrong. This information has been available for more than two decades, The entire ritual is based on superstition, but batters are so ingrained with this belief system, they are unwilling to change. Coaches and managers are afraid to jar hitters out of their comfort zone, so leave well enough alone.

How Does This Thought Process Compare to Investment Habits?

Just like with baseball, investors have a long history of ingrained thinking patterns. They’ve been indoctrinated with belief systems that simply don’t work, have been proven to be false, and yet they go on with their ritualistic mentality.

Imagine what could happen if the batters took the scientific advice and changed their on-deck circle warm up routine. Research shows that by using a bat of the same weight during the warm-up, the player won’t hinder their swing performance, in fact, they can reverse the damaging effects of the weighted bat, thus, increasing their swing speed up to five miles per hour. All it takes is the willingness to believe the evidence and act accordingly.

The Evidence for Investment Strategies

Now, back to the investment world. Our ingrained belief system (or on-deck rituals) tell us we can beat the market. We’ve been handed that belief system and we’ve bought into it. We’ve been told that mutual fund managers, stock pickers, financial advisors, and analysts can give us that winning edge when it comes to investing.

They’ve handed us the proverbial weighted bat and told us, “This is the way to beat the market. Our firm has a track record for picking top performers,” and many of us buy into it, even though research has proven, beyond a shadow of a doubt, that markets are efficient, prices of stocks are accurately priced (based on buyers and sellers), and the only thing that is going to move that is news, world events, and things that are beyond our control or ability to predict. No one can accurately predict the future. One weather related catastrophe or political decision can drastically affect values in a matter of moments. There is no way to control or predict these things.

So, What is the Answer?

So what can you do? Instead of taking the weighted bat, or belief system, which is actually hindering your performance, the smart investor (realizing there is no way to control or predict world events or changes) relies on what they can control, which are your allocations.

Studies have proven that over 94% of your return is based on having the right allocation, being in different asset classes and categories.  The ONLY way to track asset classes accurately is to own Index Funds or ETF’s.  With this in mind, just as batters should ditch the weighted bats on the on-deck circle, investors should ditch mutual funds and actively managed accounts.

Are you in the on-deck circle holding onto false belief systems? As a society, once a thought becomes ingrained, it can be difficult to overcome our emotional attachment to that belief.

No one purposely sets out to hinder their performance, not the major league batter and certainly not you, the investor. Knowledge is power, and the more solid, proven information you equip yourself with, the better position you will be in for a stable financial future. The first step involves breaking away from false belief systems. Get rid of the weighted bat.

For more information on proper investment strategies, and ways to avoid the mistakes, traps, and false belief systems, please grab your free copy of The 7 Deadly Traps of Investing.

Know More about Bryan at http://thefinancialcoach.com

All it Takes to Make a Million Dollars is Time, Consistency and Rate of Return. Timothy McMahon, editor at Financial Trend Forecaster, shared some numbers and data to support the statement on a blog post and it got me thinking about a pretty exciting reality: Anyone can be a millionaire.

It’s true. The tools are available, especially here in opportunity-rich North America, for anyone with a little bit of self-discipline and a willingness to learn. A-a-a-a-and there’s the rub. Despite having the key to the Million Dollar Formula, those two little characteristics make all the difference when it comes to WANTING a million dollars versus actually MAKING a million dollars.

Think about it. We all know that a journey of a thousand miles begins with a single step. And then another and another, until we finally reach the destination. We know the destination is there waiting for us even though we can’t see it. We know that paths are available to get us there, sometimes many different routes. So why do so many of us never actually make it there?

Self-Discipline

It’s been said that ultimately we are the sum of our choices in life. Nowhere is that more apparent than in our financial picture. Good habits are the cornerstone of success but to develop them you have to be willing to prioritize and maybe even curb some indulgences along the way.

The ability to delay gratification is a huge struggle for most of us. But it’s also your most powerful tool when it comes to money, saving and investing. Patience really is a virtue. If CONSISTENCY is one of the keys to the Million Dollar Formula, then having a plan and a system can really help you balance and manage the process, as well as to stay focused on the end goal. This is especially important when the goal is long-term, like retirement and the benefits can’t be seen or felt immediately. Make it as easy as possible for yourself to be successful!

Temptation and accessibility are the silent saboteurs when it comes to your money and savings. Take steps to make it harder to access your funds, like setting up a separate savings account that is NOT linked to your ATM card or locking up your credit cards (carry only one for true emergencies). Choose to go to the park or beach instead of the mall. Unsubscribe from magazines and emails with advertising and offers. Keep pictures to remind yourself of the end-goal and track your progress so you have a visual representation of your success.

Treat your savings like an iron-clad fixed expense and take it off the top of each paycheck no matter when or how often it comes in. YES, YOU CAN! Remember, it’s about making choices. Latte or $1M? Eat out or $1M? New car or $1M? Every single indulgence is a choice you make that adds up and pushes your goal back a little further. It’s not about doing without; it’s about values and priorities. If you want to get to the Million Dollar Destination you have to make it a priority. How quickly you get there depends on how high a priority you want (or need) to make it.

McMahon shares the math about the effects of Time and Consistency, along with an interesting thought: “Even if you don’t have a (lump sum) nest egg you can retire a millionaire. Simply by saving $10 per day and investing it at 15% per year you will still reach Millionaire status in 25 years. Is 25 years too long to save become a Millionaire? The average mortgage is 30 years! So why are people willing to go in debt for 30 years but not save for 25 years?”

Willingness to Learn

People will often tell themselves that others have more opportunities, more cash, more luck or more whatever so that they can absolve themselves of any and all responsibility for their own success (or failure!) The truth is that we are each in charge of how we handle the people, things and events in our lives.

We are in the Digital Information Age. There is information readily available on just about every possible topic you can think of, including money, finance and investing. There are many paths to get to the Million Dollar Destination but not all of them will be right for you. Taking time to read about different options and benefits will help you make informed decisions and more likely to avoid costly mistakes and setbacks.

Knowledge is power. Even a child can understand the value of knowledge. I asked my 13 year old son which he’d rather have: A million dollars or the ability to make a million dollars. He explained that, of course, knowing how to make a million would let him do it over and over again. (But as we all know, knowing and doing are two completely different things – cue self-discipline!)

Are you familiar with the phrase, The rich get richer and the poor get poorer? Knowledge and discipline really do make all the difference in the world. McMahon shares this insight and helpful information about Assets and Liabilities:

The Wealthy buy Assets; the Poor buy Liabilities; The Middle Class buy Liabilities believing they are Assets.

Knowing the difference between an Asset and a Liability is fundamental to building wealth. Assets earn money and can appreciate in value; liabilities cost you and depreciate. A rental home has the capacity to provide income and tax benefits AFTER covering its operating expenses, as well as the potential to appreciate in value. Conversely, that boat you’re eyeing might provide hours of enjoyment and entertainment but it depreciates the minute you purchase and costs you every month for storage, gas, licensing, registration, maintenance and repairs.

As your funds grow, so will the temptation to spend and/or move them around. It’s important to understand the pros and cons and the ins and outs of what you are invested in so that you can make informed decisions, regardless of whether it’s the stock market, real estate or any other asset class. Rates of return vary greatly from product to product and every investment carries its own risk and parameters. Again, there are many possible paths to get to the Million Dollar Destination so you need a basic understanding how they work to decide which is right for you.

Million Dollar Formula

So here it is again, the not-so-secret formula for anyone to make a million dollars:

Time + Consistency + Rate of Return = $1Million

Whether it’s the magic of compound interest or the brilliance of principal reduction, the sooner you start, the longer your funds have to work for you.

Now that you have the Million Dollar Formula, the big question is ~ What are you going to do with it?

BTW, did you know that one of the best graduation or birthday gifts that you can give your kids is a ROTH IRA? They may not fully appreciate it now but over TIME when it helps to pay for their college education or a down payment on a house, rest assured your kids will profusely thank and consider you a financial genius!

Jacqueline Ross, CCIM is an experienced investor, educator and real estate professional. She founded Investment Strategies, Inc. to work with property owners and investors nationwide to achieve personal and financial goals through real estate and related investments. Sign up to receive eNews updates and learn more about strategies that can help manage risk, create additional income, tap into and activate ‘lazy’ equity, maximize retirement fund potential, truly diversify investment portfolios and build wealth.

Women really do make great investors. Why? Because investing is about more than just math and numbers.

Women are becoming more and more deeply invested in their own financial success for many reasons: Careers are being pursued and marriage is being delayed, divorce rates are higher than ever, single-moms and women who are the sole or main breadwinner in the family are increasing, cost of living is rising steadily, job security is virtually non-existent…the list goes on. There are no guarantees in life and situations can change drastically in the blink of an eye. Independence and self-sufficiency are more than just words; they are a gateway to freedom. Women are no longer content or willing to be dependent on others for their quality of life.

A lot of the Myths about Women and Money floating around out there are simply false. Statistics show that women are blowing the stereotypes out of the water when it comes to money and investing: Women are MORE likely to join a retirement plan, women save on average 10% MORE than men, women actually spend LESS than men, and women are MORE likely to diversify their investment portfolio.

True power and independence happen not when you HAVE money, but when you know how to MAKE money.

Just ask any lottery winner or divorcee who has blown through a divorce settlement trying to sustain a champagne lifestyle on a beer budget! A lump-sum goes away pretty fast when there is nothing in place to replenish it. The first step is learning about Assets & Liabilities; the next step is doing something with that knowledge.

As Rich Woman Coach Nichole explains in a video Coaching Tip about Women and Investing on Robert Kiyosaki’s Rich Dad website, there’s a lot more to successful investing than just numbers and calculations. The Rich Woman coaches identified their top 5 characteristics that make women great investors:

Asking for help
Planning
Multitasking
Diligent research
Value shopping

Let’s take a closer look at these strengths, how they each contribute and add up to a Great Investor Profile:

Asking for Help. Women typically know how to ask for help when they know they need it. And in my experience, more often than not, they prefer to ask other women. Have you noticed all the networks and clubs and resources that are geared towards supporting women in financial and business endeavors? The Daily Worth, WomenOwned.com, Ladies Who Launch, National Association of Women Business Owners (NAWBO), My Wealth Spa to name a few. Many of these were created or developed just in this past decade.

Women seek and value mentors that can support and assist them in a non-intimidating, non-judgmental forum. Although men often view women’s lunchtime or evening gatherings as a sewing circle gossip session, women frequently use friends and colleagues as sounding boards for new ideas, thoughts and perspectives. Brainstorming and round-table sessions are becoming more and more mainstream, even in the ‘Old Boys Club’ organizations because there is strength and power in teams and in seeking outside opinions and help.

Planning. Most women become good planners by necessity. Often in addition to full-time employment or business ownership, women take on, or inherit by default, the monumental task of running the household, juggling kids activities, making and keeping family appointments, planning and organizing family vacations, meals, etc. It takes a lot of planning and organization to make sure everything runs smoothly from day to day and week to week.

Investing demands a similar kind of planning and organization to be efficient and get the most out of your capital. The ability to make and stick to short and long-term goals is important but having a system to monitor and track it all is priceless, especially when it comes to finance and investing.

Multitasking. Women are also known to be exceptional multitaskers. Handling several issues or tasks at once is all in a day’s work for most women. This translates well into the world of investing because there are always many different things going on in many different markets and across many different asset classes.

Women who are able to see various market factors and how they can affect an investment will be much more able to predict possible outcomes and proactively make adjustments as needed. Diversification is also easily appreciated and accepted by women who are more likely to hedge their bets as opposed to going for the glory in a single ‘Hail Mary’ home-run move.

Diligent Research. Women know how to do their homework. They are used to budgeting, comparing prices, finding the right pediatrician, school, camp, mechanic, gardener, insurance, etc. In finance and investing, this means that women know how to investigate and identify investments that will work best for them.

Investing involves a LOT of research. ‘Due Diligence’ is an investment term that refers to the process of verifying data presented, investigating the investment parameters and terms so that the investor can make an educated decision to purchase or decline. As a real estate investor, I screen and analyze literally hundreds of properties before finally deciding to offer in on one or two. Diligently investigating the investment and the people involved is a crucial step in protecting your investment funds up front and finding a good fit for your specific purposes.

Value Shopping. Warren Buffet once said, “Price is what you pay; value is what you get.” Women seem to intrinsically know how to stretch a budget and shop for bargains. They are aware of what’s available, what the going rates are and will go clear across town to get something at a discount. Women know that it makes sense to get a designer gown at half price if they are willing to find and sew on a couple of missing buttons.

Investing for value or value-add opportunity follows the same principles as shopping for any kind of bargain. You need to have a good idea of the general market value so that you have a benchmark to evaluate the investment you are looking to purchase and know when it’s priced below its true value, or when a few simple steps are all it takes to realize its potential (add value, like sewing on a button). Once you know what to look for, it gets easier to spot the gems.

Finance and investing may seem like a spider’s web of intricacy and detail but understanding the rules and knowing how to filter out the junk makes it a lot easier. Women have the skills and qualities to excel in the investment arena on their own terms. Women really do make great investors!

“A woman is like a tea bag; you never know how strong she is until you put her in hot water.” ~ Eleanor Roosevelt ~

Jacqueline Ross, CCIM is an experienced investor, educator and real estate professional. She founded Investment Strategies, Inc. to work with property owners and investors nationwide to achieve personal and financial goals through real estate and related investments. Sign up to receive eNews updates and learn more about strategies that can help manage risk, create additional income, tap into and activate ‘lazy’ equity, maximize retirement fund potential, truly diversify investment portfolios and build wealth.

In times of plenty, we seek safe haven for surplus cash that will generate passive income for the future. In times of need, some of us take desperate steps to increase our money supply to meet the demands of the day. Both actions necessitate investment decisions, decisions that many of us are oftentimes not qualified nor experienced to make wisely without help. Thus, begs the need to know the answers to the four “wives” (why, when, where, who) and one “husband” (how) questions with respect to investing and financial planning. This article will discuss the two most important pre-requisites to making wise investments.

As a licenced financial planner and a business and financial advisor to small and medium companies, I am often asked to give investment tips or advice. Whether I am a fantastic investment guru or tipster or not is immaterial as I would always avoid answering such questions without knowing and understanding the financial background, status and financial goals of the questioner. This article is not intended to be a primer in investing or financial planning as one can select a book on the subject in any good high street or online bookstore. Rather, I would like to share what I consider to be the top two amongst the many pre-requisites an investor should consider before making an investment decision.

1. Have a Financial Plan with SMART goals

Planning in general is an activity we engage in all the time – planning for a holiday, planning for a wedding, or planning for any other event or planning to achieve a particular objective. However, how many of us really get involved in developing a truly comprehensive personal financial plan and implement the same? If not, why not?

The Certified Financial Planner Board of Standards, Inc (CFPBSI) defines financial planning as “the process of meeting your life goals through the proper management of your finances”. Life goals are goals dear to us that we would like see come to pass, especially during our lifetime. Such goals can be as simple as saving to buy a car or for a cruise around the world, or a bit more challenging in investing to mitigate the effects of inflation in planning for retirement.

In goal setting, it is imperative that we be rational and do not set goals that will be too difficult to achieve in the timeframe required else we can be truly discouraged and discard the plan altogether. Thus, it is good to follow the SMART principle, taught in Management 101, which states that our goals should be Specific (say, save to buy our particular dream car), Measurable (say, save $50,000 to buy a car), Achievable (say, plan to buy a car costing a sum we can afford), Realistic (as in planning to buy a car and not a trip to the moon although it can come true for some), and Timely (say, achievable within a reasonable time period).

Knowing our SMART financial goals will enable us to plan how to achieve them. If we are not sure how to develop a financial plan that is workable for us, we can seek the services of a financial planner. A point to note is to ensure that we consult a financial planner that is adequately qualified (say, having the CFPBSI’s Certified Financial Planner certification that is recognized worldwide) and experienced (and perhaps licenced to practice as a financial planner by the appropriate authorities to ensure accountability and ethical behavior).

2. Understand your personal financial risk profile

Prior to making any investment decisions, it is necessary that we understand ourselves in relation to our individual financial risk profile. All of us take risks in our daily lives and these could include crossing a busy street, or taking a flight somewhere, or even getting married considering the increasing number of separations/divorces. It is important to note that different people have different thresholds in the level of risk they are willing to take for any number of reasons.

Assuming a risk that we are not prepared or capable to cope with may result in adverse consequences and detrimental to our health. Similarly, the level of financial risk we are willing to assume or can tolerate should be carefully evaluated and such an exercise will normally be based on a set of criteria relevant to each individual. In addition, the risk profile of an individual can change as his or her personal status changes and it is generally accepted that a younger person can assume a higher financial risk compared to a person nearing retirement as the former has time to accumulate or recoup losses due to investment decisions not realizing their desired potential.

Thus, it is wise to understand our financial risk appetite and risk profile so that the investment decisions we make will commensurate with our risk profile. Investment opportunities abound in the marketplace for all risk profile types, whether one is considered a conservative or can take high risk.

In summary, the above are what I consider the two essential pre-requisites to investing and the others mainly pertain to details in understanding investing, investment strategies, and investment opportunities that can be found in any good investment text books or articles, advice from investment professionals or financial planners, or perhaps can be the subject of a follow-up article by this writer. A last piece of advice is to re-emphasise the fact that we should not make any investment decisions that can adversely impact our financial well-being until we have a sound financial plan, and if professional advice is required, do always consult a qualified and licenced financial planner to help develop one’s personal financial plan. Always remember this well-known adage – FAILING TO PLAN IS PLANNING TO FAIL.

This article is written by Christopher Chew. He is a licenced financial planner and part-time lecturer with a passion to share information to enrich lives. Follow his blog on ( http://www.trustyoucan.blogspot.com ) or Facebook page (”financial freedom and legacy”).

You have many options for developing trading strategies with ETFs. These Exchange Traded Funds have become very popular because they resemble mutual funds but offer the flexibility of trading like stocks.

Typical screening methods are offered by most brokerage websites that allow you to screen based on performance over different time periods or, for example, by industry or economic sector. Trading based on these methods is the most elementary.

Good ETF investment strategies require a bit more work and decision making. Just a few years ago there were less than a few hundred ETFs, now the number is over a thousand and growing daily. When there were less than 200 it was relatively easy to choose where to invest, now like stocks and mutual funds the choosing can appear to be more complex. But it doesn’t need to be complex or intimidating.

The principles of developing an ETF trading strategy rely on the principle of divide and conquer along with separating the weak from the strong. You can do this by reading, lots of reading, studying charts, lots of charts, or by using a software program that will easily allow you to sort the ETFs into manageable groups from which you can find the strong, profitable winners.

Trying to find a few strong winning candidates from a thousand or so symbols has a variety of pitfalls that ultimately leads either to defeat or to mediocre results. These pitfalls occur because similar symbols, let’s say ETFs based on China will clump together or all the bond ETFs will be clumped and these clumps will hide and camouflage other potential winners.

My first suggestion is to divide and conquer; separate the ETFs into categories, and yes, some ETFs may fall into two or three categories but that is okay as long as you don’t overdo it.

Categories that I use include:

• Domestic
• Foreign
• Europe
• South America
• Asia
• Emerging
• Sectors
• Assets
• Energy
• Health
• Precious Metals
• And the list can go on

By dividing the ETF symbols into categories you have a better chance of finding potential winners. Each group may not be growing or producing winners at the same time but that leaves you the opportunity to easily shift to a group that is growing and to a ticker symbol that can make you money. It is easier to spot trends and winners from within small groups than from a large mass, just like it’s easier to appreciate the blooms on a cherry tree in the park than to pick out the most attractive tree in the forest a mile away.

Separating the weak from the strong, in other words finding those tickers that will make you money, can be accomplished a variety of ways.

A few keys to finding winners:

• Study charts
• Screen for performance
• Relative Strength Analysis

I am partial to first letting relative strength analysis, Alpha in particular; separate the leaders from the followers. After I have found the leaders within my groups I set up sell signals to both safeguard my money against dramatic losses and to lock in my future profits. Yes, you can do this using programs like Excel or if you value your time, investment software. Once my software, using Alpha, has found the best buy candidates I do review a few charts to verify the recommendations before placing my buy orders.

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana. View his software at: http://www.dynamicinvestorpro.com

To be really basic there are pretty much just a few different types of mainstream investments. They are stocks or shares, property, bonds and cash. Now if you haven’t done any investing before I may have just terrified you. Just try to remember that most things in life sound complicated or confusing when you first start learning about them.

OK, so when we look a bit deeper into it, there are quite a few sub-categories for each kind of investment. And each area of investing comes with its own challenges, positives, negatives and quite a steep learning curve as well.

The good news is, that when you are a new investor you will probably start out slowly and so you’ll learn about each type of investment as you’re ready to “play” with them.

The next question to ask yourself is “What type of investor am I?” Most people will fit into one of these categories and either be a conservative, middle of the range or an aggressive investor. And you may find that once you have some experience in investing, your style of investing may change also. Particular types of investments also usually fit into one of two categories – high risk or low risk.

The share market can be very intimidating for those new to investing and I recommend getting some other investing experience before tackling this type of investing.

Many people start their investment journey as conservative investors and will most often invest in cash-type investments. What I mean by this is that they invest their money in very conservative financial vehicles, such as interest bearing accounts at a bank, mutual funds, retirement funds, Government-backed bonds, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments in a way, but often don’t even keep up with inflation. It also means you are relying on other people to invest your money wisely and that you have absolutely no control over it.

Modest investors are still fairly conservative and will often invest a good part of their portfolio in cash investment products, while at the same time some may try their hand in the stock market, others may purchase property and most moderate risk investors will be looking at low to moderate risk investments.

The more aggressive investors generally do a lot of their investing in the stock market, which can be quite a volatile market. If you plan to get into share trading I strongly suggest doing at least one course that has been recommended to you by someone you trust and then to paper-trade (practice trading – real trades, but without actually buying them) for at least six months. Aggressive investors will look at business ventures along with higher risk property deals and are often will to put the larger part of their portfolio in higher risk opportunities.

So let’s say you’re an aggressive investor and you find an older apartment building. You would plan to invest even more money renovating the property, which can be risky if you have not calculated all the outcomes correctly. You would invest this way because you anticipate being able to increase the rental fees for each apartment or perhaps you were looking to flip the property for a net profit. This can be very lucrative and it can also cause bankruptcy. Usually it comes down to how well you do your homework and how much experience you have.

Property in any given area tends to go through cycles, so again you need to be educated before you jump into any “deals of a lifetime”, especially if everyone is jumping in at the same time. Usually by that time all the real deals have been snapped up by the savvy investors and you are looking at the peak of the cycle, just before it starts to decline. I will go into cycle details in much more depth in future posts. Oh, and it’s not just property that has cycles – just something that you should be aware of.

If you’re seriously considering investing you first need to decide what risk level you are comfortable with and how much money you have to start out with. Seriously, there are very few people who get rich working for someone else, so you’re on the right track, because you’re going to look after your own money way better than anyone else in the long run. Just remember – especially when you’re starting out – that any money you plan to invest, you must be comfortable with the idea of losing it. You mustn’t invest with money you can’t afford to lose.

Julie started investing from an early age, owning her own 7 days a week business at 18 years old, and has continued throughout her life to educate herself on multiple investment strategies. Her main focus has been residential property investing. She has owned multiple rental properties, renovated 11 homes, performed sub-divisions, bought off the plan, been successful with property options and now lives on over 110 acres in rural South Australia. While she leans toward property investments, she has also educated herself with many other investment vehicles and encourages others to do the same. Looking into a variety of investments can help you decide what investing strategies are a good fit for you.

Exchange Traded Funds (ETFs) offer low expense ratios and high trading flexibility. That makes them attractive alternatives to traditional mutual funds. And they can serve as part of both long-term and short-term investment strategy. Here’s the scoop…

ETFs trade intraday just like a stock – unlike mutual funds. You can buy them long or sell short; use them in hedge strategies, and buy them on margin. If you can think of a strategy that can be implemented with a stock or bond, that strategy can be applied with an ETF – but instead of trading the stock or bond issued by a single company, you’re trading an entire market or market segment. That’s what makes them flexible.

*ETF Costs:

Though ETF fees may be less than most mutual funds, some are higher. So check their fees before you buy. Use the NASD Mutual Fund Analyzer to compare the expenses of up to three exchange traded funds, mutual funds or share classes of the same mutual fund.

Be careful not to offset any ETF fee advantages by accumulating commissions and other trading costs if you trade them frequently. Trading imposes commissions. But infrequent or high volume trading can help keep commission costs at a minimum.

*Using ETF index funds as an investment strategy:

You can choose ETFs that invest in broad-market indexes. There are ETFs that mirror the S&P 500, the Nasdaq 100, the Dow Industrials and about every other major market index – on the equity side. While on the fixed-income side, other ETFs track long-term and short-term bond indexes including the Lehman 1-to-3 Year Treasury, the Lehman 20-Year Treasury and the Lehman Aggregate Bond Index. Owning only two or three ETFs, you can create a broad and diverse portfolio that covers most of equity market and much of the fixed-income market. Then just stick to a buy-and-hold strategy as you would with any other index product.

*Actively Managing ETFs:

With ETFs you can create a broadly diversified portfolio but choose to actively manage it instead of just buying and holding a major ETF indexes as is done in passive management.

Apart from broad market index-based ETFs, you can buy ETFs targeted at a wide array of small-cap, sector, commodity, international, emerging market, and other investing opportunities. ETFs track indexes in just about every area, including biotechnology, healthcare, REITs, gold, Japan, and more.

You might add one or more of these targeted ETFs to your broad market ETFs as an aggressive addition to a conservative portfolio. Then, you can buy and hold it to create a long-term portfolio or trade more actively. As an example, if biotechnology is set to fall and while gold should rise, trade out of your biotech position and into gold in a matter of moments at any time during the trading day.

ETF offer a range of investment strategies and flexibility that’s unique to them. Perhaps they offer an approach to investing you’re looking for.

Shane Flait helps you with your financial legal, tax, and retirement goals.

Read his ebook: ‘Wise Way to Financial Independence’ => http://www.easyretirementknowhow.com/WiseWayGate.htm.