Investment Articles

The traditional guide to investing or investing guide tends to focus on stocks and bonds and the benefits of the balance achieved by owning both. In past years this basic investment strategy has worked for the most part. Investing in 2010 and beyond might be a different story.

Any guide to investing or investment strategy for 2010 and beyond will need to make adjustments in focus. For many years the major investment houses have recommended a balanced portfolio consisting of stocks and bonds. Conventional wisdom assumes that investing 60% in stocks and 40% in bonds should produce good long term returns at only a moderate level of investor risk. Little attention has been given to the other asset classes or other major investment options.

Over the years investors and money managers tended to act and react to the economic environment in a somewhat predictable fashion. In bad economic times they sold stocks and bought bonds, which sent stock prices down and bond prices up. As the economic picture brightened they moved money from bonds to stocks sending stock prices higher. Both investments did well in the 1980s and 1990s as the economy generally grew and interest rates generally fell over that time period.

Even in more recent times a portfolio of stocks and bonds worked, as losses in one asset class were at least somewhat offset by gains in the other. Together they offered the investor both the higher income from bonds and the higher growth and profit potential of stocks. Plus, this basic traditional investment strategy produced a balanced portfolio with only a moderate level of risk. Investing in 2010 and beyond won’t be that simple.

The real problem with the guidance provided in a traditional guide to investing or with the conventional investment strategy discussed above is the level of today’s interest rates. In 2010 interest rates hit record lows, approaching zero in the money markets. When rates reverse direction and head upward in the future bonds will fall in value, period. Stock prices will fight an uphill battle as consumers cut spending, causing corporate sales and profits to fall.

Think “diversification” as your guide to investing in 2010 and beyond, and move some of your investment dollars outside of the traditional box of stocks and bonds. Include the other two asset classes in your investment portfolio: safe cash equivalents like money market funds, and alternative investments like real estate, gold, and natural resources mutual funds. The first will pay interest that increases as interest rates go up; and well selected alternative investments can produce profits to offset losses in a falling stock market.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Value Averaging (VA) is a hybrid of Dollar Cost Averaging (DCA), which is more familiar to most investors, and the process of portfolio rebalancing. Proponents of the VA investment strategy feel that this method allows those who use it to experience the proverbial “best of both worlds.”

How Value Averaging Works

Michael E. Edleson, a former Harvard finance professor, used simulations to compare the Value Averaging method to dollar cost averaging and also to the purchases of a constant number of shares in every investment period. While potential differences in risk were not considered, he concluded that Value Averaging provided investors with “an inherent return advantage” in keeping with the time-honored recommendation to “buy low and sell high.”

Edleson, who was also a former Nasdaq Chief Economist, feels that a missing ingredient has been added to DCA that makes Value Averaging a superior method – focusing on a portfolio’s anticipated rate of return, which assists in pinpointing periods of under and over-performance in the stock market.

Dollar cost averaging is based on the principle that, rather than investing a large sum of money at one time, you should make small investments over a designated time period. For example, if you had $12,000 on January 1st that you planned to invest, you would invest $1,000 on a monthly basis through to December. It is felt that your risk would be reduced, especially in times of high volatility, because you would be purchasing stocks in a range of prices over a 12-month period, rather purchasing all of the shares in a lump sum for the same price.

With the Value Averaging strategy, whenever a portfolio under-performs, the share prices will probably also be low, and investors will therefore have to make a larger investment to make up for the under-performance. The converse is also true, and if the portfolio outperforms it’s targeted rate of return, share prices will tend to be high as well, and that is not the time to purchase more shares. Investors may even profit from a sale, as long as they are guided by the portfolio target value, which is a calculated value. While dollar cost averaging is unchanging, value averaging forces sales when prices rise sharply and forces larger purchases – more shares purchased – when prices fall.

Value Averaging definitely proves its worth and works best when the stock market is highly volatile, because it forces investors to be disciplined when they invest.

Using Value Averaging

VA is a formula based investment technique, where a mathematical formula is used to guide how much is invested into a stock at a specific time. VA’s goal is to increase a stock’s value, rather than its market price, by a calculated amount on a periodic basis.

To begin, you determine the amount of money you will need to set aside to reach a particular goal, such as financing your retirement. Next, based on the yearly return you expect to realize on what you invest, you calculate what you will have to invest every month in order to attain that goal. For example, if you plan on accumulating $500,000 within a 20-year period and determine that you can earn 8% annually, you would need to set aside approximately $875 each month. This would enable you to track your progress toward that goal on a month-by-month basis.

Note that with this method, the emphasis is on establishing a portfolio target value or “value path.” For example, suppose that at the end of the 12th month you realize that your portfolio value should be at $10,950 according to your plan, but because of a downturn in the stock market, it is only worth $10,000. This indicates that in the following month, you should invest an additional $950 along with your usual $875 for a total of $1,825 in order to stay on track.

Realistically, this is a procedure that you would follow every month, and whenever you fall behind, you would add to your monthly investment. By way of contrast, whenever the return on your investment was higher than you expected and your portfolio was worth more than the pre-determined value, that would be the time to reduce your usual investment or consider selling some of your stock.

Value averaging can also be modified so that no sales take place, which is important when investing in non tax-sheltered accounts.

What You Can Expect

Value averaging works better than DCA in almost all market conditions, the benefits are really accentuated in a highly volatile market.

Under the Value Averaging approach, the ending total value will be pre-determined before you start your investing program, so as in our example above the ending value is $500,000. In other words, when you start the value averaging program, the ending amount is known, but the amount to be invested monthly varies.

Under the dollar cost averaging approach, the total portfolio value at the end of the period could be any value, but the total amount to be invested is fixed – in this example, 12 months times 20 years times $875, for a total amount invested of $210,000. When you start a dollar cost averaging program, the amount to be invested is known, but the ending amount isn’t.

In summary, Value Averaging is an investment strategy that provides a more systematic way for investors to reach their investment goals and it is a promising investment technique that merits broader attention from financial advisors, financial institutions and the investing public.

For a more theoretical review of the two strategies and examples of how they compare under different market conditions, you can refer to the paper “A Statistical Comparison of Value Averaging Vs. Dollar Cost Averaging and Random Investment Techniques” by Paul Marshall.

Bruce Ramsey is the Portfolio Manager of the Blue Chip Value Averaging mutual fund. The world’s first mutual fund that uses the Value Averaging investment strategy to make its buy and sell decisions.

People tend to compare real estate investing vs. stock investing because these are the two primary roads to investment success. Both areas of investing have advantages and disadvantages. Savvy investors in both arenas can employ techniques and strategies to maximize profits or moderate risk in the years ahead.

Conventional real estate investing has traditionally focused on buying rental properties primarily with borrowed money. The basic formula for success has normally been to maintain a positive cash flow from rental income, while making physical improvements to the property that maximize return on investment. As the value of the property increases the potential for a profitable sale increases as well. In a successful venture a typical real estate investment offers the investor both income and growth in the value of the investment.

Over the years, well-selected and well managed properties have proven to be profitable investments as a rule, rather than as an exception, for most investors. Until recent times, the value of real estate was consistently on the rise with few notable exceptions. The primary advantage and source of potentially large profits in real estate investing is financial leverage, the use of borrowed money. After all, why pay cash for a property that can double in value over time when you can put only 10% down and buy 10 properties with your money by using financial leverage?

Stock investing also offers growth in investment value; and income in the form of dividends. Over the long term stock investors have earned 10% a year, on average, for the past 80 years or so. Liquidity is a big advantage here, as investors can buy or sell shares at market value on any business day, for a total cost of $10 for commissions. No active management is required on the investor’s part, and profit potential is limited only by the individual’s skill or lack of it in stock selection and market timing.

The primary disadvantage to stock investing is the lack of consistency in performance, as up and down cycles in stock prices are normal, not the exception. The new or average investor is vulnerable to significant loss on a reoccurring basis as a matter of normal routine. Real estate investing has the disadvantage of poor liquidity… plus, properties require active management and routine maintenance. If you need to sell in a hurry you’re in trouble, because the process can be both time consuming and costly.

The financial crisis of 2008 has increased risk in both real estate investing and in stock investing, while creating opportunities for the informed investor. The savvy real estate investor who knows the techniques for profiting from short sales and options to buy property has unlimited opportunities. Even the average stock investor can profit in the years ahead while moderating risk, with a balanced portfolio and a sound investment strategy.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Knowing how to invest is more important today than ever before. With Social Security and company pensions questionable at best, Americans need to learn to invest for their own future financial security. Here are some pointers and major mistakes to avoid if you don’t feel real comfortable as an investor.

Learning how to invest is really not much different than learning how to play any other game. First, you need a general understanding of the objective and the rules. Second, focus on the basic aspects of the game. Then, concentrate on avoiding major mistakes while you hone your skills and develope a winning strategy.

Your objective as an investor should be to earn higher than average investment returns over the long term with only a moderate level of risk. To do this you will need to manage a diversified investment portfolio that includes safe investments, bonds, and equities (stocks). It’s a major mistake to keep all of your money in the bank at low interest rates because at that rate of return you won’t stay ahead of inflation after paying income taxes. Totally trusting a financial planner or going it alone without any investment help can also be expensive mistakes for the average investor.

So, the question is how to invest with a diversified portfolio and investment help you can afford and trust. The answer is to invest in mutual funds: money market funds for safety and interest, bond funds to earn higher interest income, and equity or stock funds for higher potential returns and long term growth. Mutual funds are designed for folks with little more than a grasp of investment basics. They select the individual investment securities for their investors as a group and professionally manage a portfolio based on the fund’s stated financial objectives.

By investing across the board in all three basic mutual fund types you can achieve balance while keeping risk at a moderate level. For example, losses in stock funds can be offset in part by the relative safety and interest income from money market and bond funds. As a general rule of thumb, all but the oldest of investors need some money in stocks to boost profits and stay ahead of inflation and taxes. How much of your total portfolio you allocate to stock funds vs. money market and bond funds will depend on your age and risk tolerance.

If you’re not real comfortable with how to invest but know that you need to anyway, start investing in mutual funds. If you invest equal amounts in all three of the basic fund types you can get started with only a moderate level of risk while avoiding major costly mistakes. Then take your game and investment strategy to a higher level by doing some homework with the assistance of a good investing guide.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

The 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

Your best investment strategy if you feel clueless could be the simple investment strategy or “rule of thumb” that’s been around for years. Here we explain the basics of this strategy, and then get into how to put it into action without stress or strain.

It’s nice to have a basic guideline to go by when managing your investments. Traditionally, the most basic guideline has focused on two things: the need for balance in an investment portfolio and the age of the investor. Simply put, your best investment strategy is a function of these two factors. Balance is a way to control risk while earning higher long term returns. The traditional approach to investment strategy focuses on owning both stocks and bonds to achieve balance, since losses in one of these investment options is often offset by gains in the other.

Age is taken into consideration because it is assumed that younger investors can afford to take more risk in pursuit of higher returns in order to accumulate a larger nest egg for retirement. After all, earning 5% a year $10,000 grows to $43,000 in 30 years vs. $174,000 at 10%. If you are young and experience a setback you’ve got plenty of time to make up for it. When you are older this is not the case – you need less risk, more safety, and income.

Stocks are the primary investment of choice for young investors, and over the long term have returned 10% on average per year. On the flip side, bonds are preferred by oldsters, and have returned 5% to 6% on average over the years at a lower level of risk. In putting together your best investment strategy the traditional question becomes: how much of each of these two investment options should you hold in your investment portfolio? Here’s the traditional rule of thumb.

You should allocate a percentage to bonds that is equal to your age, with the rest going to stocks. In other words, the best investment strategy for a 20-year old is 20% to bonds and 80% to stocks. At age 60, you want 60% in bonds and 40% in stocks; and at age 40 a ratio of 40% bonds and 60% stocks is your best investment strategy. That’s the rule of thumb that’s been around at least as long as I have, and I’ve been into investing for 35 years. There are no guarantees in investing, but keeping the above guidelines in mind should keep you out of major trouble over the long term.

Over time you need to invest more conservatively as you age, so you need to adjust your portfolio over time to reflect this. Now, how can average or even clueless investors set up their best investment strategy without picking the individual stocks and bonds to invest in? The simplest way is through mutual funds: bond funds, stock funds, or balanced funds. Mutual funds pick the stocks and/or bonds for you and handle all of the management details. In fact, the traditional balanced fund invests 40% in bonds and 60% goes to stocks.

Other balanced funds, like target funds and lifecycle funds, can be either more conservative or more aggressive in their asset allocation to the two primary investment options, stocks and bonds. If you really feel clueless, go with a balanced fund that fits your risk profile. The fund’s literature will describe how it ranks in terms of risk from high to low. Above all else, your best investment strategy is one that you feel comfortable with in terms of risk.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

How to save your hard earned money? Do you have an investment plan? Here are some tips to select appropriate investing options to retire wealthy.

Traditionally, there are 3 investment options available. The golden rule is to diversify your portfolio among all the options depending upon your risk appetite, earnings and the time span you let the assets to grow. The diversification balances your portfolio between the risk prone ones to the conservative ones and thus preventing heavy exposure of wealth in a single asset class.

Investment options

1) Equity Shares

It is, basically, the most common asset class where people put their money because it has
high return on investment, but at the same time, involves substantial amount of risk. People buying equity shares of a company are legally part of the company and thus profit to the company is entitled to them. People who are younger and at the beginning of their career, having higher risk appetite can allocate considerable amount in this class. But people who are about to retire in a few years can limit their exposure, as it is highly risky in their part.

2) Bonds, Mutual funds, Savings A/c

Bonds are securities that people can buy from governments, private companies, etc and the issuer of
the bond is obliged to pay the lender. It involves less risk appetite because of its lesser rate of return. Similarly, savings account also is a good option for investment with less risk. Since the return on investment is less, it is savvy to expose only a part of your wealth in this class. But again, it depends upon ones risk appetite and time horizon.

3) Real Estate

Real estate is yet another area which one should have in their portfolio. Real estates are tangible assets
that provides more stability to a portfolio. But it requires long time period to grow your wealth.

One more asset class getting popular these days are commodities. For instance, gold and silver come under this class and it is good to include them in your portfolio as well. Gold is considered to be the safe haven for investors during inflation, because during inflation gold rate will increase as well, preventing your portfolio from falling off the bridge.

The best investment strategy is to invest in all said classes. And invest only your risk capital that is the money not set aside for emergency needs and monthly expenses.

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.

If you are like many individuals looking to increase the value of your money in an economy where financial institutions pay only two percent on a savings account, but do not know where to invest your money please read further. I have been in the work force for many years but other than mutual funds, government bonds, investment certificates and other products available through my local bank manager or investment councilor at the same bank had no real investment knowledge.

Like many of us I have had the hot tip from a business colleague and bought stock to make a million only to see it crash and was out a few thousand, instead of on the way to easy street. I told everyone on my office floor about the stock and they purchased the warrants, even the vice president of marketing wanted to know what to do with them after a month. This is not the proper way to increase your worth through unknown commodities.

I then decided to contact a bank investment advisor at my branch, after consultation purchased an income mutual fund that had been a very good producer for 5 years but made me nothing. To be honest the market dropped and through no fault of the advisor I lost money. Not to complain about these branch individuals as they provide good information, but they really only sell products recommended by their financial institutions and in most cases are not privy to long term investment strategy other than what they receive from head office. Most banks are tied in with large brokerage houses but it does not benefit them to refer you in many cases because they lose the commission or bonus on your investments.

I was advertising a service in a local church bulletin and got a call from a parishioner who did not want my service but wanted to sell me his as an Investment Advisor. Being from a large brokerage I was skeptical but practiced the just say no before going to a meeting with him. Once at a meeting I was thoroughly educated in the various products including stocks, exchange traded funds, managed accounts, and research related websites out on the market that I was unaware of being a novice investor and not in receipt of this information from my bank. I was also made aware of the levels of investment risk associated with various products and although realized the stock market was volatile, I discovered that there were many opportunities that had a good upside and little downside. Afterwards I changed my investment strategies to include many of the ideas that were given to me through the meeting. I also discovered by using an investment advisor from a large brokerage firm that the commissions I paid over the course of a year were directly in line with what I was paying my bank to invest money in an income producing mutual fund. I had no idea that I was paying commission on the product to the bank because I was told there was no commission on any monies withdrawn. The fee was actually embedded in the expenses of the fund and came off the bottom line.

Being a novice I was unaware and should have asked if there were any fees associated with the bank product. The other item of importance which I believe is related to the stock market downturn is that brokerage firms have you sign off on all investments where risk is a factor a change to previous policies.

I am not recommending any stocks or institutions, but being a new investor and there are millions of us out there in all working age brackets, it benefits you to get advice from an independent brokerage house. If they do not provide you with the education to make a qualified decision regarding any amount of money you might want to invest, then say no to any suggestions. However, over the long term, getting the right advice can save you both time and money. After all, even if you have a degree in business, or watch business television regularly, it is difficult to rival a full time investment professionals knowledge when coupled with independent in-house research.

How to succeed in the stock market with new software. It allows you resources comparable to what Day Traders of major financial institutions use and is accessible from home or the office. To learn more please Visit http://www.Peterpro.com/stockassault.aspx