Investment Articles

One of the very cool things about investing and wealth building is that there are so many ways to do it. There are thousands of simple low risk ways to make massive amounts of income. One of the most popular investment vehicles is the stock market. Within the stock market is a very beautiful thing called the stock option. I’m going to give you some reasons why you need to be trading stock options right now

Reason #1 – Trading Options gives you Leverage

Leverage leverage and more leverage! For a fraction of the cost of buying an actual stock you can buy an option and make a lot of money if the stock price moves even a little bit.

With an option trade a $1 move in a $20 stock price could mean a 200% profit for you, maybe more!

Reason #2 – Selling Options can provide An additional income stream on stocks you already own

If you own stocks that are pretty flat, you can sell call options against those stocks and get a monthly income while you own the stock.

Not only will you be getting a monthly income, you will also be lowering your cost basis for the stock every month.

Let’s say you bought the stock at $20 and you sold a call option against that stock for $1. By selling that call option, your cost basis for the stock is now $19 ($20 – $1). Keep doing this and you could make you money back on a stock in no time, even if that stock has been flat!

Reason #3 – Options can be like Insurance on your stocks

If you own some stocks and the stocks have had a nice rise in price, you can buy some put options to protect you from drops in the price and losing out on your profit.

Buying put options are a great way to protect your brokerage account from unexpected drops in a stock price. Put options allow you to sell a stock at a specific price no matter what happens with the stock itself.

Reason #4 – Options are a way to get paid to buy stocks

If you don’t own any stock and you see a stock you like, you can get paid to buy that stock at a price you choose. Let’s say you like abc stock and it is currently selling at $35. You think it is an excellent buy at $33. Instead of waiting for abc to hit $33 you can sell some put options at the $33 strike price and if the stock does do to $33, you keep the money you got by selling the put option, you get the stock at $33 AND your cost basis is lower by whatever you received for the put option.

I have been investing for over a decade and have done meticulous research on how to build wealth. My primary focus is on strategies that can create low risk residual streams of income.

Not only do I personally practice the methods I write about, I have also coached many others in these methods to show them (and to show myself) how easy it is to make money with passive residual streams of income. You can read more about my best strategies at http://bestresidualincomestrategies.com/

The point of a hedge is to make money for clients regardless of market direction. Hedge funds will buy and hold stocks, they will sell short, as well as buy and sell options. These particular funds differ from most traditional funds, which adhere to the buy and hold concept. In these particular funds, an investor will pay a performance fee as well as a management fee it performs well. These investments, which include foundations, college endowments, and pension funds are worth billions of dollars. Over 1 % of financial institution assets are comprised of these funds, with total assets around $2 trillion. Many large funds choose this type of fund because of their potential upside during a bull market.

These funds can offer some nice returns dependent on how the they are positioned in the market and how strong the market is performing. If investments of this kind are leveraged well, the investor will realize size able to returns as opposed to other funds. With this in mind, one must also be wary of the potential losses that can be suffered when the wrong investment vehicle is being leveraged. In short, take your time and do your research when choosing any type of fund. The crash in 2008 seemed to motivate large pension funds into direct hedge fund investing. A lot of people were hurt by the 2008 crash, lending to more hedge fund investing to recuperate some losses. The rules of hedge fund investing have become stricter since 2008, limiting participation to accredited investors, weening out the small, private investor.

A hedge fund managers uses the same information available to all investors. For instance, you did not need to be a hedge fund manager to evaluate some opportunities in Japan after the tsunami. However, the sheer size of these type of funds lends to significant research and investment opportunities that an ordinary investor does not have. However, on the same note, these large funds can sometimes find it difficult to find a place to invest billions of dollars. When this kind of fund takes a position in an equity, it changes the direction of the market. An individual investor can profit from studying a hedge fund, being aware of where the money is going. A lot of successful investors yield high returns by mirroring a successful hedge funds investment strategy. How available that information is depends on the individual investors savvy. Again, hedge funds move the market.

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The day before Thanksgiving many of us will be preparing our homes to receive guests, or making the trek to a friend, or relatives gathering.

But the 23rd of November is D-day for the congressional debt committee.

There are many factors to consider:

Will Greece’s economy fail, causing them to no longer have credit whereby having to move to an all cash system?

What will be the outcome of the Italian issue, and its subsequent effect on the global economy?

There are many questions, with speculations disguised as answers.

The bigger question, what are you going to do about your situation? Your personal finances are just as important as the global economy because you are a part of that same deteriorating economy.

What are some of the ways you plan to protect the money you currently have from the future impending inflation, and will you still gain interest on your money? Will it be enough to either live off of, or will you use it to build for the future?

With the rocking and rolling of the stock market, should you place your money in bonds? But didn’t the analyst say the bond market is a bubble waiting to burst?

Should you move to tangible assets such as gold, silver, etc.?

Will futures be the new ‘now’ market for growing an income, or retirement portfolio?

What’s happening with mutual funds?

The answer to all of these questions is everything has a cycle. Study the cycles and you may be able to predict an outcome.

The stock market currently appears to be in a sideways pattern and with a new cycle starting around the year 2016, but what type of cycle will it be?

Are we in for a Bull or Bear market future?

Only time can really tell.

All bubbles do burst eventually, the futures market may be having gains at this time of the year, and gold’s value is through the roof and moving higher with silver riding its coattails. Mutual funds are currently stagnating, but some will gain with the shifts of the S and P.

Real Estate is still a viable consideration for investing, if done wisely. The area, growth rate, employment, and expanding or shrinking housing availability are factors when considering an investment property.

With all time lows on residential and commercial property it would only make sense to have an implemented strategy to invest in real estate.

If you decide to buy a house to rent out, check to make sure other homeowners are not doing the same thing, and if so then how many other homes will be for rent and at what price.

If you decide to invest in an apartment then check to see if there is a shadow market from residential. If a shadow market exists, how much of an impact will it have on being able to rent your units, and still being able to not only break even on the new investment but also realize a profit?

For which ever investment vehicle you are going to utilize to guard against an uncertain future, ensure you weigh all the pros and cons and make an investment choice which will work for you, yielding you appreciation in the present and future.

Knowing what you know now, would you have invested in the stock market and real estate after the crash in the early 1900’s?

As with all cycles and time, change is always on the horizon.

Please visit our blog for more information http://BackedByRealEstate.com.

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You work hard for your money, and you want your money to work hard for you. We all need savings and investments to retire comfortably or to fall back on should unexpected circumstances arise. To that end, common investment vehicles include the stock market, mutual funds and retirement/superannuation accounts. But whichever investment vehicle you opt to employ, it pays to ensure that you are familiar with the mistakes commonly made by new investors.

1) Not having an adequate plan. The saying goes that failing to plan is planning to fail, and in the case of your investments, you not only need a solid strategy as to how to invest your funds, but you need to have realistically mapped out the regular contributions you will be able to put into your investments. If your investments are not tailored to suit your age and situation and managed according to current market conditions, then you basically have a glorified savings account.

2) Placing all of your eggs in one basket. This is not only a risky strategy, but one which is certain to limit your money’s growth potential over time. The reason you need to have a good combination of stocks, bonds and other investment options is that different investment vehicles will perform differently, depending on the economic conditions at the time. A diverse investment portfolio has a greater potential to endure an unpredictable economic climate.

3) Too much emphasis on high-risk investments. The age-old concept of the “get rich quick” scheme is a common pitfall that many people are aware of, yet continues to burn investors. A new investor must keep in mind at all times that their investments are a long-term strategy, and as such, a potentially high short-term gain is simply not worth pursuing when it is weighed up against the risk of losing your hard-earned money.

4) Overly conservative investing. Although this is of far lesser concern and it may even seem counter-intuitive at first, it is worth keeping in mind that a lack of market knowledge could lead an individual to be too conservative in their investments. This can ultimately result in a lack of sufficient returns to meet the investment goal.

5) Investing with debt. Of fundamental importance when you are laying out your overall investment plan is to make an honest assessment of what you can afford to set aside for investment contributions. Put simply, your money must be free to invest. If you have already racked up credit card debts for example, and you are being charged upwards of 19% interest on this debt, then your first priority should be to pay off that debt. As your investments are unlikely to pay you a return anywhere near the interest on your debt, the elimination of debt ought to be the higher priority.

6) Paying astronomical commission fees. Just as you would with any other product or service, you should take the time to shop around and compare prices before you invest, once you have decided upon a course of action. It pays to take into account an investment professional’s background and level of industry experience.

7) Failing to seek the advice of a professional. Mastering finance and investment requires many years of industry experience and expert knowledge. In the same way that you would trust your health & wellbeing to a medical professional, so to you should consult an investment professional when you are planning for your future and financial well-being. As much as it can be useful to conduct your own research to gain a broad understanding of investment strategies, a qualified financial professional will take your own particular circumstances into account when making recommendations.

Provided that your investment strategy reflects a long-term focus, has enough inbuilt diversity to withstand market volatility and is managed with the aid of experienced and professional advice, you should reap the benefits of a robust investment portfolio that will yield excellent returns on your hard-earned income.

This article was written by James T. Hannagan for Australian-Dollars.com, a site that follows and investigates the Australian Dollar against the world currency market, with a view to investment in this heavily resource-backed currency amidst global economic uncertainty.

Investors typically use performance benchmarks like the Sharpe Ratio or the Sortino Ratio to rank mutual funds, ETFs, and index trackers. However, these common performance benchmarks have several drawbacks and can often be very misleading. The Omega Ratio, however, addresses these shortcomings and delivers a far more sophisticated method of ranking investments.

The Sharpe Ratio originated in the 1960s and is also known as the reward-to-risk ratio. It’s the effective return of a fund divided by its standard deviation, and its primary advantage is that it is widely given in fund data sheets. The standard deviation is employed by the Sharpe Ratio as a proxy for risk. However, this is misleading for several very important reasons.

Firstly, standard deviation assumes that investment returns are normally distributed. In other words, the returns have the classic bell-shape. For many investment vehicles, this is not necessarily the case. Hedge funds and other investments often display skew and kurtosis in their returns. Skew and kurtosis are mathematical terms that indicate wider (or narrower) or taller (or shorter) distributions than that typical of a normal distribution.

Secondly, most investors think of risk as the probability of making a loss – in other words the size of the left-hand side of the distribution. This is not what is represented by the standard deviation, which merely indicates how widely dispersed investment returns around the mean are. By discarding information from the empirical returns distribution, standard deviation does not adequately represent the risk of making extreme losses.

Thirdly, the standard deviation penalizes variation above the mean and variation below the mean equally. However, most investors only worry about variation below the mean, but positively encourage variation above the mean. This point is partly address in the Sortino Ratio, which is similar to the Sharpe Ratio but only penalizes downside deviation.

Finally, the historical average is used to represent the expected return. This again is misleading because the average gives equal weighting to returns in the far past and returns in the recent past. The later are a better indication of future performance than the former.

The Omega Ratio was developed to address the failures of the Sharpe Ratio. The Omega Ratio is defined as the area of the returns distribution above a threshold divided by the returns of a distribution below a threshold. In other words, it’s the probability-weighed upside divided by the probability-weighted downside (with a higher value being better than a lower value). This definition elegantly captures all the critical information in the returns distribution, and more importantly adequately describes the risk of making extreme losses.

However, an investment with a high Omega Ratio can be more volatile than an investment with a high Sharpe Ratio.

Both the Sharpe Ratio and Omega Ratio can be easily calculated using tools like spreadsheets or other math packages.

Samir H Khan writes for http://investexcel.net, a repository of tools and commentary for investors and quantitative analysts. For example, the website offers a spreadsheet which calculates the Omega Ratio.

Green investing focuses on investing in companies and technologies that are deemed to be good for the environment. This includes individual companies that have a solid track record of reducing the environmental impact of their operations, as well as companies that offer alternative energy technologies such as solar and wind power. Green investors will also avoid investing in companies that have a negative impact on the environment, such as companies with poor emissions standards. Socially responsible investing is broader in its focus in that it considers companies that create a social and environmental benefit, and avoids companies that have a negative effect on society. Companies with a strong record of charitable contributions that provide a fair and diverse workplace, and/or that have a minimal impact on the environment are just a few examples of social responsibility. A major part of socially responsible investing is the exclusion of certain industries that are deemed to have a negative impact on society, including those involved in alcohol, tobacco and defence.

Six Trends in socially responsible investing to watch for in 2010.

1 Continued push towards technology.

As technology has been a pillar of the fundamentals of social investing, 2011 will not prove any different. It will be the development of technology that allows the world to achieve better sustainability, ranging in areas from energy to food scarcity. Considered to be an underlying mega-trend of socially responsible investing, the advancement of technology, and subsequently human productivity, will continue to be a strong foundation in the performance of socially responsible investment portfolios.

2 Renewable energy.

Continuing to push forward for renewable energy, socially responsible investors and companies are looking for the new technologies that will turn renewable energy into a cost-effective reality. Shell for example, will expand its investments in renewable technologies such as wind, solar and hydro power by also investing in next generation sustainable bio-fuels that will not drive up food prices or lead to deforestation. When this technology is mature, it will create a new evolutionary process of cost-effective renewable energy. Green investments in this sector will continue to grow in a quest to find better, more sustainable energy sources.

3 Changing tide for all companies.

As the movements for human rights, sustainability, and corporate governance responsibility have moved into the mainstream consumer’s radar, all corporations will eventually be impacted by shifting perspectives – and held responsible for their corporate governance sustainability practices. In addition, prompted by the growing strength and influence of social investing dollars, which account for $1 out of every $5 of managed investment funds, corporations have no choice but to respond to the changing tide. An exemplary example is Walmart, the black sheep of retail corporations, who recently released its first sustainability report – and also began offering sustainable farm produce and organic food in the stores.

4 Global warming measures.

With mainstream financial powerhouses launching “climate change funds,” global warming measures will continue to fuel the growth of socially responsible investing and green investing. With additional calls from both the scientific community and policy makers, companies are taking heed. In addition, there are significant profits to be made. According to the “Carbon Beta” research report published by Innovest Strategic Value Advisors, the corporations who capitalized upon climate change opportunities have performed better than their industry peers. This value can only continue to grow, with government policies moving towards stricter emission controls, benefiting those socially responsible stocks that are geared toward solving the environmental problem.

5 Going green.

The socially responsible investing focus on green investments has been a significantly prominent staple of the screening process of sustainability. However, in 2011, expect additional “financially green” investment vehicles introduced to the global market. With growing consumer awareness fuelled by media coverage, the report predicted an increased demand for green investing – and related green financial instruments – offered by specialised investment firms. In addition, with the launch of several regulated and non-regulated green funds, focused on environmentally friendly initiatives and sustainable companies, the trend of green investments in the financial sector will be a big mover in 2010.

6 Community investing.

Having grown five times in value since 1995, community investment efforts will continue to be a leading trend in social investing for 2011. With the private real estate market in the US either decreasing or hitting a plateau, the supply of land available for low-income housing and economic projects increases – creating additional opportunities for community investments.

Final Remarks

Don’t let the recent events on global stock markets scare you off. Green investment fundamentals are rock solid. Green Investing is at the nexus of stimulus support by governments around the World. But it’s not just governments. Corporations, too, are ramping up their Green investments. You may be familiar with some of them. Big companies like Intel… PepsiCo… Dell… and Wal-Mart are investing substantial amounts of money in solar, energy-efficient buildings, sustainable food practices and other renewable technologies.

World leaders and CEOs of multinational corporations aren’t tree-hugging liberals getting into Green Investments because they want to “make the world a better place.” They are shrewd economic realists betting big dollars that Green technology is vital to their economic survival. A few years ago, Green Investing may have been the domain of environmental idealists, but today it is one of the fastest-growing sectors on global markets. It is still early days, and the sector is still young enough to provide tremendous opportunities to the discerning investor. Green is here to stay. And it’s shaping up to be the cornerstone of the 21st century economy.

We can show investors that socially responsible agriculture investments in the emerging markets,can lead to both great profits and a better world for future generations.

Our goal is to provide consultancy to managers of unique, green investment opportunities that will maximise the profit for investors, as they at the same time work towards a healthier planet.

An investment fund is a type of investment vehicle used to invest in the stock market. An investment fund is where the investor contributes a sum of money into that fund, which has already been invested into certain areas of the stock market. The idea is to minimise the risk by spreading the amount invested into several areas of the stock market at once.

This has the following advantages:

· Minimises risk to the investor as the fund will be configured to buy stocks and shares in different commodities.

· Can be configured on the basis of risk, so the more adventurous may look for a high risk, high return fund, while a more cautions investor may look for a low risk, low return fund.

· Avoids the scenario of putting your eggs in one basket, which many financial people would advise against doing.

· They are good for the inexperienced investor as they invest in many areas of the market.

It is worth remembering that stocks can do well one year and perform poorly the next.

Investment funds still require key decisions to be made, especially in the area of risk. Though some investment funds may be labelled as cautions, or low risk, they can still carry a significant risk of not making money in the stock market, and subsequently high risk funds may not carry as much risk as originally thought. This is due to the changing nature of the world economy, and one of the many reasons why the stock market is watched closely.

It is always a good idea to seek some kind of advice on financial matters, as the issues can be complex and difficult to grasp without guidance. The key here is to ensure you choose a financial advisor or investment company which is not just interested in your cash but wants to provide a good service. Some decisions should be made by the investor, and the investor alone as there is no need for outside interference. When choosing a good fund manager, ensure you choose one which basis their fee on the quality of service rather than making unnecessary decisions on your behalf.

Investment funds represent a good way to learn about investing and they are a good investment vehicle in their own right, especially as they are effectively a ready made financial portfolio. They are used by both the seasoned investor and the beginner, and offer value to both.

Investment funds often represent investors investments on a large scale.

Richard Teahon writes for Fundsnet.co.uk, which was founded by Chairman Simon Dixon, with a view to reduce the cost of financial investing. It offers a variety of financial products, including but not limited to stocks and shares ISAs, consultancy and advice, trust and pension investments, emerging markets, commodities, and unit trusts and OEICs. The product range was created to suit every type of investor.

The Solar Panel Process

Long before a solar panel (called a module in the industry), can be installed on a business or household rooftop, there are some steps that must take place. It all starts with plain ol’ sand, from which silicon is extracted via various chemical processes. The refined and nearly pure silicon, called polysilicon or poly, is then heated and cast into cubes, called ingots. Cube-shaped ingots are then sawed into square wafers. Then the magic happens. The polysilicon wafers are then placed on a substrate, usually glass, to make a solar cell. A number of cells are then arranged together and set in place to form a panel. The final package is called a module. That’s how a solar panel is made in a nutshell. But hidden in those few steps are hundreds of companies, thousands of patents, and more than a few investment vehicles that can make those “in the know” a lot of money.

For nearly a decade, the industry surged ahead with a compounded annual growth rate over 40%, and investors made a lot of money on the companies making it happen.

The solar market is still set to triple in size in the next five years. By 2015, installed solar capacity will grow another 347% to over 72 gigawatts as utilities worldwide are incentivized and forced to adopt sustainable production assets, and as solar energy reaches price parity in a growing number of markets. In order for those forecasts to hold true, improved policy is going to have to do battle with current economic conditions. The Current State of the Solar Market is currently facing rapidly falling prices, both for its raw material and its finished product. A seasonal dip in demand and the related oversupply of panels coupled with the general economic slowdown and restricted lending has led to an up to ~30% decrease in selling prices for solar modules. Of course, the operating costs of solar companies have not fallen as quickly, forcing companies to reduce profit margins as they sell discounted panels. In fact, in the recent price scramble, Chinese manufacturers have opened an advantage over historically dominant European companies. Established Chinese producers are currently offering contracted prices of about €2.00 per watt, while European suppliers are struggling to break below €2.50 per watt.

As such, Chinese solar companies are poised to gain some European market share. You should see that reflected in their share prices over the next few quarters. Even with the economy in the pits, the German solar market–the largest in the world–is still set for steady growth, thanks to renewed lending by German state bank KfW and national political commitment. Funding for rooftop and small ground installations is also flowing again from large European investment banks and local savings banks. Other countries in the European Union will take longer than Germany to heat their solar markets back up. Any astute investor should thus ensure that they have exposure to the German market, which is predicted to be one of the earliest to recover from the current economic downturn. Only the most highly efficient panels with the best prices and best warranties will be purchased. Smaller Chinese companies are probably the most at risk. Balance sheets for all solar companies will be off for the next few quarters as reduced demand from the recession and cyclical seasonal patterns works its way off balance sheets.

In addition to Germany, the U.S. considered the sleeping giant of the solar industry is also doing much to ensure a robust solar rebound. Here’s a snapshot of what the U.S. recent stimulus did for the solar industry: Investors are now able to take a 30% federal refund on the value of a new installation before deducting any state incentives. So a theoretical $100.00 dollar solar system in North Carolina (35% state credit) now only costs the investor $35.00-because both federal and state incentives are now calculated from the full price. Best part is, those federal incentives have no cap and the project need only be finished by 2017 to qualify. This incentive alone will rapidly increase solar demand as homeowners and investors a like rush to get discounts on solar installations on the taxpayers’ dime. But there are many more solar provisions in the stimulus that will only magnify the gains that can be taken on the right solar stocks. There’s also $6 billion dedicated to paying the fees on guaranteed loans. This clause is aimed at encouraging banks to make loans for renewable projects. Most estimates say that $6 billion in guarantees will translate into $60 in new loans.

What constitutes a lucrative investment strategy really depends on you as an individual investor – what can be considered lucrative to some is low yield to others, but there are certain common elements.

Appetite for risk
It goes without saying that the higher the potential profit or yield, the higher the risk there will be in a given investment. No investment is completely risk free, although some investments, like homes, bonds, and precious metals can certainly appear to be. We’ve all witnessed what a recession can do to even the most steadfast investments, so bear this in mind when considering in something previously regarded as bulletproof.

Elements of a lucrative investment strategy
A lucrative investment strategy consists of several common denominators. Firstly, the strategy will be risk balanced, meaning that there is an appropriate balance between the level of risk in the investment. Too low a risk, and the investment will yield too little. To high a risk, and the investment will be tantamount to gambling. The strategy will also take into account yield, meaning that an investment strategy will be selected that clearly meets the investor’s goals for profit. Goals need to be reasonable, achievable, and realistic, and devoid of any greediness or fantasy. Lastly, a timeline needs to be developed. Some investments will be necessarily short term – like getting in and out of a rising stock – or long term, like purchasing a piece of property.

Pitfalls in the strategy
What was formerly a lucrative investment strategy could turn into a nightmare if you don’t watch for some common errors. Trying to make too much money too quickly is one of the easiest traps to fall into, and it’s a vicious cycle as well. Many investors have seen initial successes only to raise their risk threshold to the point where they take greater and greater risks with the promises of making more money, ultimately leading to total failure. At the high end of risk, there is very little difference between an investment and a slot machine.

Your lucrative investment strategy needs to start with a plan of clearly defined goals, only after your house is in order and you have plenty of savings on tap. Your investment plan is the most important document you create, because it will be a roadmap for you to follow, and keep your greed in check. Once you’ve met your investment goals on a particular investment, your plan will remind you to exit that investment. Remember, a lucrative strategy must be relatively safe and relatively long term to truly be called lucrative. Many things are lucrative for short periods of time every once in a while – not many things are lucrative reliably and for long periods of time.

Diversity is the final key to a lucrative investment strategy. It’s unwise to keep all your investments in the same form, and some diversification is necessary for profit as well as for safety. Your portfolio should be a good mix of investment vehicles to protect you against any market fluctuations, and keep your holdings strong and secure.

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As The Bank Of England base rate rests at its unprecedented low of 0.5%, savers may be wondering which savings and investments will provide the most lucrative return, or if investing in new products is even worth it at all. With a gloomy financial forecast, our savings and investments are now more important than ever and it pays to be clued up about the best saving products on the market.

THE BOND BASIC

Just as the public will find themselves in a position of needing to loan money at some point or another in their life (mortgages for example), companies and the government also occasionally need a financial lending hand. The substantial amount of money that such large infrastructures require is best accumulated through issuing bonds to the public market. A bond then, is a loan in which a member of the public becomes the lender to the borrower, or issuer of the bond, such as a bank. The number of investors, sometimes thousands, each provide a portion of the capital needed by the issuer. In exchange for the bond the investor is rewarded with interest payments.

THE FIXED RATE BOND

If you have a financial lump sum to invest then a fixed rate bond could be the perfect investment vehicle. As the title implies, a ‘fixed-rate’ will pay a guaranteed amount of interest for a set length of time. You will have the security of knowing in advance what your savings will earn.

FIXED RATE BOND FACTS

- Gives exactly what it says on the tin; the advantage or guarantying a set or ‘fixed’ amount of interest. This gives a sense of security that if the Bank of England base rate drops, and therefore your issuers interest rates also, then you will remain on a higher interest rate. In this case your investment will be working hard for your money.

- The interest rates offered in bonds are usually higher than instant access savings accounts.

- Fixed rate bonds are especially good for savers that are easily tempted as you will not be able to touch your money until the fixed term is completed.

- There is usually a a minimum deposit ranging from £1 to anything even over £50,000.

- There is also a set length of time in which you will be contracted into your bond usually ranging from 6 months to 5 years.

- Depending on which bond and provider you are with, you probably will have no access your savings during the fixed term. It is important to invest money you can only afford to lock away.

- Early closure, withdrawals or deposits may not be allowed or result in an additional charge.

- Having a set rate means that you know exactly how much you will receive by the end of your return so you can plan and organise your finances.

- A fixed rate bond could be used as an income or income growth in retirement. Its set rate means you know exactly how much you will receive so you can plan and organise your finances.

- It is low risk investment as you are guaranteed a fixed, steady interest rate, even if interest rates drop. Alternatively, the national rate of inflation could increases higher than the interest you will earning in a bond.

Interest rates are constantly fluctuating and there are always new fixed rate bonds being released onto the market. As with any kind of investment or saving, comparing the market for the best fixed rate bonds will reward you in the long term.

Searching for the best fixed bond rates can be a headache. A bond comparison website is one way to search for the best fixed rate bonds and may help you to secure a competitive interest rate for your savings.