Investment Articles

Well of course you can. In any number of ways. You could bet all your cash on the toss of a coin, and if you get it right (and you are betting with an organisation that pays out) you can double your money immediately. Easy as anything.

But perhaps the better question is “Can you double your money in a year while maintaining a controlled risk?”
And the answer, cheeringly, is yes, it is possible.

The sad truth is that most of us have no real idea about how to analyse and ‘price’ risk. Appearances can be deceptive.

BCCI called itself a bank. So we the public, rather naturally, thought it was a bank. Turned out it wasn’t a bank, (and the Bank of England knew it!). And people in the City commented afterwards ‘well everyone knew that it was a bit dodgy’. Everyone in the City, maybe, but how were the public supposed to know?

Icelandic Banks – well, if you used interest rate comparison sites such as moneysavingexpert.com, you would not have seen any warnings saying “Watch out, Iceland only has a population of 320 thousand, some cod, and an infinite supply of lava, so how on earth can it be financing such a large proportion of the worlds commercial activity?”

And then there’s Northern Rock – saved only by the generosity of the UK taxpayer.

Can you rely on analysis carried out by bankers?

When Robert Maxwell had his famous boating incident, he left 50 banks with huge losses. Had each and every one of these banks carried out a careful risk analysis? No. They had acted like a flock of sheep. Were the risks lending money to Robert Maxwell totally hidden? No, definitely not. Private Eye had run a continuous campaign about the Bouncing Cheque, and named the Maxwell boat the SS Pension Fund (as he had looted pension funds belonging to his employees).
Nevertheless, the banks kept lending.

So it is pretty difficult to assess risk, either doing it for yourself, or following institutions employing well remunerated ‘experts’.

But the other factor that should be taken into account when assessing any risk, is what level of reward will I receive in relation to the risk I am taking?

When it comes to banking, banks have a very simple way indeed of increasing the amount deposited. A mere 1% increase in interest paid per year will place the bank at the top of a comparison chart and attract a massive inflow of capital. 1% is really nothing, when compared to risk. £100 per £10,000 deposit. Insignificant. But enough to suck(er) billions of pounds.

Some banks are based on illegal activity – such as BCCI which had a lot of deposits from unsavoury sources. Some do not understand the nature of the risks that they are taking, failing to see that long term commitments cannot automatically and inevitably always be financed by short term borrowings. Some are just led by relentlessly ambitious and greedy individuals who are indifferent to the woes of those they shred. But whatever the reason for their collective incompetence (in protecting and growing the wealth of their customers, not in their ability to foster the growth of their own wealth), the public must now surely be aware that bankers cannot be trusted to steer us all to a financially secure old age.

So instead of ’safe’ deposits in a bank, how does ‘gambling’ sound to you?

“Very risky” is probably the thought, or “a mugs’ game”.

So are bookmakers and casino operators mugs, or do they have a better idea of how to calculate risk than bankers – and then do they stick to any winning formula that they have devised?

Take roulette. Pays out evens if for example, the ball lands on black. Is this a good bet? YES – BUT ONLY IF YOU ARE THE BANKER. Why? Because there are 36 numbers on the roulette table half of which are black. But there is also a 0, and if the ball lands on this, the banker takes all. So on average, one time in 37 the bank will win (the other times the chances balance out). This is what gives the bank the edge. And in Las Vegas, they double up their edge by putting another 0 on the table, and clear up 2 times in 38.

Do I want to ‘gamble’ at roulette? YES I DO, but only if I can be the banker (please do not follow the internet tipsters pushing the idea of doubling up on a bet – this is long term financial suicide which I go into in another article published elsewhere).

Placing your money in a bank and hoping that long term interest rates exceed long term inflation may be the biggest gamble of the lot. If you are interested in achieving higher rates of return on your capital, then you need to look outside the normal fixed rate deposit schemes, which are supposedly safe.

Are higher rate returns risk free? Of course not. But there are some available that do represent a far higher return relative to risk than the traditional ’safe’ options of fixed term investment vehicles – including treasuries and gilts!

The author is a trader and investor with varied interests from real estate to stocks. With international commercial experience, and an education in both law and economics, the opinions stated are personal and may be contrarian. Further information on which investments may work, and warnings on which investments will not work, is available at www.investmentadvice-online.com

Agricultural investment has many fans in the investosphere, the likes of Jim Rogers for example, founder of the Quantum fund alongside George Soros has been quoted as saying that agricultural investment is likely to be the best asset class of out time. So firstly lets look at the different modes of agricultural investment that are available for retail investors.

Agricultural Investment Funds
Direct Farm Ownership- Hands On
Direct Farm Ownership – Hands Off

First we look at Agriculture Investment Funds. These managed investment vehicles – available under the banner of most major investment houses – operate in the same way as other types of investment fund, gathering together the capital of smaller investors and participating in larger transactions such as buying up 1,000´s of hectares of managed farmland in various countries and essentially positioning themselves as very large global farm owner operators. Investors profit from rent received from the farming tenants, the sale of crops, the resale of the agricultural land at a later date, or a combination of all three exit strategies.

Investors benefit from expert management, and portfolio diversification, and agricultural funds have performed very well recently, as have all agricultural investment modes.

Next we take look at the most hands on form of agricultural investment, direct farm ownership with a view to working the land and selling the crops. This type of agricultural investment is by far the most hands on, and high risk, of all investment strategies, and shouldn’t be undertaken by anyone without a serious level of expertise and experience in the farming sector. It really is not simply a case of fulfilling the country dream, farming is a serious business.

In terms of UK performance, 88% of farms in the UK were profitable in 2009, and farmer also receive EU subsidies in Euros, ensuring that farmers in the UK have also recently won big on currency swings and the devaluation of GBP Sterling.

Now we look at perhaps the best in terms of the middle ground, an investment strategy that allows us access to an appreciating asset in the form of farmland, and an income yield in the form of rent, whilst at the same time avoiding huge management fees and the issue of having to farm the land ourselves.

This middle ground strategy in agricultural investment involves buying arable land and leasing it back to a framer who farms crops. This is, I believe, the best strategy for investors wanting a hands-off investment, yet still utilising the asset to produce income, as well as benefiting from capital growth.

Annual income yields of up to 7% are absolutely achievable in the current climate, and when combined with capital growth, this option is possibly the best route to 100% ROI over 5 years with minimum risk.

David Garner is Managing Partner at DGC Investment Consultants – http://www.dgc-ai.com – a boutique offshore consultancy advising a community of High Net Worth Individuals, Family Offices and Institutions on a broad range of non-correlated assets.

If you have any clue about the world around you, then you have already realized the influence gas investments has on your daily life. If you haven’t, and many times even if you have realized the impact and influence the oil industry has and the profit potential available there, you most likely have never learned about or understood how you could begin to leverage these investment vehicles in ways that could explode your income and net worth. There are 5 major reasons that will certainly convince you that gas investments need to be a huge part of your portfolio.

5 Reasons That Will Convince You

1. There are huge tax advantages with these types of investment vehicles. Even with a $0 basis, many investors find that they still have annual tax deductions from their oil and gas interests. Few vehicles offer this type of shelter for your money.

2. The second reason that you need to be aware of includes two words, passive ownership. Choosing the right company to handle your money in gas investments, you will instantly find that you can have a completely hands off approach if you wish and still create monthly income and yearly profit increases. In addition, by diversifying your portfolio and investing in various well packages, you can significantly reduce your risk.

3. You maintain full and completely undivided ownership of your interest. You have the ability to liquidate at any time if and when you wish and in any way that you may choose. This ease of access to your investment should the need come offers a huge advantage other investment vehicles rarely offer.

4. Another huge advantage that is related to taxes but when used properly creates huge opportunities to increase your income. This advantage is the fact that investors are able to use these as 1031 exchangeable vehicles. That means you can sell your interest for a profit. The government then allows you an allotted length of time to take the money you have earned from your sale and invest it in another similar investment vehicle without paying taxes on the profit made.

5. Finally, the final reason that will convince you, if the others haven’t already, is that gas investments allow you a hedge against the rising energy prices and their impact on your financial situation. The only way leverage, take advantage of, and benefit from rising energy costs is to own it or possess interests in it.

You need a reliable company with a successful record of helping people just like you to create a significant increase in the value of your portfolio as well as monthly income with gas investments. You need someone you can trust who knows what they are doing. You need: Savvyroyalties.
Distributed by http://www.ContentCrooner.com

Oil and gas investments aren’t a new idea or concept. Nearly everyone has at least heard about or know of their existence. The problem is in the lack of knowledge shared about how powerful these investment vehicles can be. At times the risk can be a bit more than the comfort zone of most people, but it’s a misconception that it’s always a risky place to put your money. There are various reasons that make oil and gas investments extremely powerful but here we will talk about 3 very powerful secrets about why these need to be a part of your portfolio.

The 3 Reasons You Should Be Using The Powerful Leverage Of Oil And Gas Investments

Many people find themselves wondering how gas prices are constantly going up and down. What they don’t understand is that there is an entire world of people who are constantly influencing those prices and that world is made up of investors. Oil and gas investments offer advantages that other vehicles could never compare to. Here are 3 of those advantages as well as reasons why your about to change your entire point of view about being able to multiply your money ten fold.

1. One of the biggest reasons these vehicles are so powerful would easily be it’s ability to offer complete ownership with absolutely no liability. Perpetual ownership is a normal part of this vehicle while also being able to maintain no liability of any type related to royalties as well as minerals. In addition, with perpetual ownership, you automatically gain the advantage of the opportunity of drilling for additional wells as well as any formations that may lie deeper but have yet to be accessed and in turn increase your income.

2. As a vehicle in your portfolio, oil and gas investments offer various strategies and advantages for protecting money as well as cutting back on costs often times related to other paper assets. For example, there are no lease expenses on the investors part to any mineral owner and royalty owner. There are also no capital calls. There is never a need for additional capital for anyone with a working interest ownership.

3. The best and most powerful reason of all for shifting your portfolio around is in it’s ability to create instant cash flow. Many investors find an ongoing monthly return on their investment and monthly cash flow of 5 to 25%. Not to bad by any standards. In addition, you maintain full independent ownership of your investment and the property.

You need a reliable company with a successful record of helping people just like you to create a significant increase in the value of your portfolio as well as monthly income with gas investments. You need someone you can trust who knows what they are doing. You need: SavvyRoyalties
Distributed by http://www.ContentCrooner.com

When someone is seeking investment advice, the subject of exchange-traded funds (ETFs) often arises since they are becoming a popular investment vehicle. ETFs are a great way for someone with a small amount to invest to get a decent investment. In order to use this type of investment to your advantage, you have to understand how they work.

You are probably familiar with mutual funds because they are more common. Mutual funds and ETFs are similar in some respects. Like a mutual, an EFT holds multiple investments within it. Unlike these funds, ETFs are traded through an exchange, like NYSE, and are not purchased from an issuing company. Other differences are the redemption structure and the tax efficiency.

ETFs have some distinct benefits that mutual funds do not have. Here are five of benefits:

1 – ETFs are an attractive investment because of intraday pricing. This means they are traded on an active stock exchange so the sales are immediate and not based on the price at the close of trading. Essentially
this means you could purchase ETFs at a reduced price or get a premium when selling them.

2 – Tax efficiency makes ETFs much more attractive than mutual funds. When a fund is sold, there is typically a capital gains distribution. When you sell an ETF, there are no gains to be distributed. However if a major component of the ETF is changed, it may trigger a distribution of gains.

3 – Exchange-traded funds are beneficial because they have much lower fees than mutual funds. Since an ETF is a no-load fund, you do not pay redemption fees when you decide to liquidate it. They also tend to have much lower annual fees. Although rare, on occasion the fee can be higher.

4 – Unlike many mutual funds, exchange-traded funds do not require a minimum investment. With a fund, you often have to invest at least $2,500 dollars. Since this is not true of ETFs, they are great to diversify your investments.

5 – Another major benefit of exchange-traded funds is their liquidity. That means you are able to keep your portfolio balanced by using your ETFs for the liquid component. You can even set a limit just as you would with stocks, which makes for more flexible trading that you could never get with a mutual. Remember to check your ETF, because they do not have all this liquidity.

Although the points laid out are benefits, they can quickly become liabilities. So remember to be careful when buying and selling ETFs. They are a great way to diversifying a smaller investment but do require you to ensure they are managed well.

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

If you want to become rich then you will want to become a great investor. If you can become a great investor then you will be able to make a lot of money very quickly starting with very little. Look at investment gurus like Warren Buffet or Donald Trump. They know how to make a lot of money because they are great investors. They live the lives that most people only dream about. This could be you. In this article I plan to shed some light on how you can become a successful investor.

Dedicate Yourself To Learning
This is absolutely necessary if you want to become a success. Every great investor is dedicated to learning. Everyday they are learning something new about finance and something new about how to make more money and generate more income.

It is easy to get a lot of money. Rich people who know nothing about investing are a dime a dozen. For these people it is often best to hand over their money to someone who, hopefully, knows what they are doing more than them and can invest their money for them. But the greatest investors invest their own money and therefore are constantly investing into their knowledge base.

To get started it is a good idea to read some books on investing, listen to some tapes and maybe go to a seminar. A free email newsletter that talks about wealth is also great, because it will get you learning something every single week. People often scoff at paying money to learn about investing, saying they can’t afford it. But they end up losing even more money investing because they don’t know what they are doing. So don’t be afraid to pay for your education, it could make you rich.

Don’t Be Afraid To Lose A Little
Great investors seek to learn something from every trade they do, and thus they are not afraid of losing a little bit of money. Even if they lose money the lessons that they learned from the investment experience will help them make more money back quicker and easier than before.

If you have dedicated yourself to learning then you shouldn’t be afraid of losing a little bit of money. It is good to understand that when you are starting to invest you shouldn’t expect to make a lot of money straight away. It takes time and practice to become good enough at investing that you start to make a lot of money, and often you have to lose a little before you can make a lot.

I am not telling you to go and throw you money at any random investment because you don’t care whether you lose your money. I am just saying that you should not let fear hold you back. So many people are average investors because they invest not to lose, they don’t invest to win. Do your research and your due diligence and then invest seeking to learn something (and hopefully make money). If you lose a little then learn from the experience and become wiser, then use your new knowledge to make your money back.

Invest
I know this sounds obvious, but in order to become a great investor you need to actually invest. It is great to read books and to study and go to seminars, but eventually you have to take the step of faith and start investing. Start investing your time into studying and learning about specific investment vehicles and then start investing your money into those investment vehicles.

Putting money into something really accelerates the learning process. Every time you invest your money into something it is a good idea to learn from the experience. That way whether you make money or not, you are learning how to make more money quicker next time. So if you want to become a great investor you need to have the goal of learning something new from every investment you do.

My wife said something profound the other day. She said “If you want to become rich you have to be ok with the fact that you will be a student for the rest of your life”. The financial market is always changing and there are always things to learn. If you want to become rich by being a great investor you have to be ok with the fact that you will always be a student of wealth. Because to become a great investor you have to continually learn, not be afraid of losing some money and be willing to constantly take steps out into the unknown so you can make money and so you can learn.

Your next step towards becoming rich is to increase your financial IQ through education. By educating yourself in the area of finances you will be able to get a greater return on investment and you will be able to earn more with less work and less risk. Does that sound good to you?

If you want to increase your financial IQ and start becoming rich then I recommend the free newsletter and audio teaching that Rich Academy provides. If you want to start becoming rich today then go to http://www.richacademy.com and enter your name and email address to get a free copy of Ryan McLean’s audio teaching. Hurry, this offer is available for a limited time only.

Index investing often means two things… BORING AND CUMBERSOME! Too often though the psychological portion of investing takes over. Everyone knows that this is about the worst possible thing but unfortunately that doesn’t change anyone’s decisions. People want the action, to see the stock on CNBC blow out the 52 week high, and to just be part of the next big thing.

So when people think of index investing these thoughts normally don’t come to mind. Let’s face it though index investing off the March Low’s of 2009 would have brought over a 60% return! Not bad in less than a year’s time. Further, here at Clariti Research we understand the love for excitement because that’s what building the EMPIRE is all about! We want the thrill of glory, the joy conquest, and the growth of personal dreams. By the end of this article we hope to help make index investing more fun, profitable, and realistic while helping you avoid the pitfalls put out by Wall Street.

Now in the 21st century when it comes to indexing it’s time to update your investment vehicles. Today, if you want to properly index we think ETF’s are the way to go. As well, the term ETF stands for "exchange traded fund" for people not familiar with the term. In particular we like the iShares ETF’s for a few reasons we’ll review shortly.

The first advantage of ETF’s is that they’re more liquid investment vehicles than mutual funds. ETF’s you can sell in the open market in live time…mutual funds not possible. Here is an example of why this might be important to an investor. When we all saw the DOW tank about 700+ points on one day in 2008 people who held ETF’s could liquidate their positions in the live market while mutual fund holders couldn’t.

Now we like iShares ETF’s in particular because they are the largest ETF firm in the world and have the most liquid ETF’s generally. When you’re invested you’re on Wall Street that means playing with the pros. So playing with the biggest most recognized player in the ETF industry makes sense to us and helps minimize rookie mistakes. Remember you’re not a rookie you’re a personal EMPIRE builders!

A second advantage of ETF index is they offer greater investment transparency. ETF index’s quote live in the market all day. What this means is all investments held must be disclosed in live times to give accurate pricing of an ETF index. Mutual funds only have to disclose 4 times a year on what they hold! In fact you could call your "financial professional" right now, ask him what all your mutual funds hold, and I doubt he would even have a clue.

Unless he’s friends with the mutual fund manager he knows about as much as you do from the last quarterly statement disclosure. With an iShares Index ETF like (IYY) or (IVE) you can go on the iShares website anytime to see every company it holds, what industries, financial ratios like the P/E, percentages, and so on. Mutual funds look like dinosaurs when compared to ETF’s. The sad thing is mutual funds have done little to change to become more transparent even with ETF’s competing against them. Really shows what priority they take toward their investors.

A third advantage of ETF’s particular to iShares is the management fee. On average iShare’s index ETF’s have fee-management cost of.4%. The average mutually fund cost after fees, charges, and whatever else they try to tack on comes out to about 2% or sometimes 3% on the high end. So at a minimum over 10 years they’re taking 20% no compounded (2% times 10 years) from you. Let’s face it all these mutual fund indexes are trying to do is replicate an index not even beat it. Maybe if they were trying to beat the indexes then we could understand justification for a higher fee.

At the end index investments with iShares ETF’s does exactly what we want. From a professional standpoint they offer lower management costs, immediate access to our investments via liquidity, and track the long term index performance. From a psychological standpoint it offers us the excitement of live pricing in the market, let’s us know when we can yell for joy when we see something on CNBC via transparency, and to know we’re in the action just in a more diversified manner.

So if you’re looking to track US indexes’ iShares offers (IYY) for the Dow 30 or (IVE) for the S&P 500. Now mutual funds once had they’re day and rightful purpose before the internet and when it was too expensive to index as an individual person. Those days are over though and just like the 21st century has all but barely dawned upon us the same goes with building the EMPIRE through ETF indexes!

Ready to receive amazing low risk value stock picks and or more Clariti Research Team articles? CLICK HERE. Start building your personal empire today at http://www.claritiresearch.com.

You hear a lot of horror stories about fixed and index-linked annuities – mostly coming from sources that are biased, have a vested interest in trashing annuities or are just plain uninformed. Ironically, most of the stories (sometimes referred to as case studies) feature payout two-tier annuities and discuss these dogs as if all fixed annuities are two-tier.

A two-tier annuity is one that requires you to take your money out in installment payments over a period of time in order to get the full account value. Unfortunately, you are not guaranteed by the insurance company (very few insurance companies even offer payout two-tier annuities) a market rate of return during the installment payout period; therefore, you’re trusting the insurance company to pay you a market rate and you can bet your next Social Security check that an insurance company that would issue a payout two-tier annuity can’t be trusted to pay you a fair interest rate during the installment payout phase. On the other hand, if you withdraw your money lump sum you’re in for a shocker because you’ll lose any previous bonus paid and get only the minimum guaranteed earnings rather than the more attractive returns shown on your last annual statement. In other words, lump sum withdrawal means the rate you’ll earn will never keep you even with inflation – you’ll lose purchasing power with every passing day.

The sad truth is that most of the horror stories involved elderly people that should never have owned an annuity – any annuity – in the first place. Unfortunately, they were sold a two-tier annuity which is, in my opinion, the worst of the worst and then found out they were locked into a long-term contract with no escape clause. Their complaints fell on deaf ears at the two-tier insurance company and the financial advisor who sold them the two-tier. Their complaints were picked up by the press, regulators and brokerage community which then painted all fixed annuities with the two-tier paint brush. The facts are: annuities, like all saving and investment vehicles, are not good for everyone nor are they universally bad for everyone. So, before you nix all annuities, take the time to learn the real truth about annuities in general and two-tiers in particular. I think you’ll be surprised to learn that the “no loss” provision of most fixed annuities along with avoiding income taxes on earnings until you actually withdraw them, are two major pluses that you can’t find in other safe places where you keep your retirement money.

If you’d like to read more about the lawsuits filed against two-tier annuity issuers and see what other say about tw0-tier annuities, go to any of the following links:

http://www.ag.state.mn.us/Consumer/PressRelease/AllianzSnnuities.asp

Smart investing includes risk management; however, most people focus on how much money they can make without paying attention to strategically analyzing risk. It is important for an investor to fully understand the concept of risk before embarking on an investment plan and to implement certain safeguards to ensure their success rate is increased.

In investment terms, risk is associated with the end of period value of the investment and the primary concern for any investor is a reduction in value of the original sum invested. There is no way of completely eliminating financial risk, even with the placement of assets in a bank account, therefore, a strategic investment plan should incorporate risk reduction techniques that have proven to create a greater opportunity of coming out ahead.

The most frequent techniques for reducing risk in investment are diversification, dollar cost averaging and time, and in order to better understand these areas we will expand upon their meaning and how they can be implemented.

Diversification

Diversification in finance mixes a wide variety of investments within a portfolio and can include investing in different markets, regions or countries. Diversification is a frequent practice of investment managers to reduce risk without substantial reduction in returns.

Diversification reduces risk because markets do not always move in tandem and many financial instruments will react differently to market conditions. A balanced portfolio will be less volatile than one that is concentrated on a single asset and can include the following strategies:

1) Spread the portfolio among multiple investment vehicles.
2) Vary the risk in securities.
3) Vary by industry or geographical location.
4) Vary the investment managers and the strategies used by those managers.

Dollar Cost Averaging

It is an investor’s dream to be able to enter the market at its bottom but nobody can really tell when a market has ever reached this point. In reality, we will often see people get caught at the top of the market instead of buying low and selling high.

Dollar cost averaging is a timing strategy of investing equal dollar amounts regularly and periodically over specific time periods and is a technique that prevents investors from putting all their money in the market at the inappropriate time.

Time as a Risk Moderator

Time not only works for investors through the power of compounding but also helps to dampen the risk of investments. If we look at most major markets, we will see that the stock market will usually follow an upward trend with interim fluctuations. By focusing strategies on a long term basis, many of these fluctuations can be leveled in comparison to the overall performance as recoveries happen and markets will often surpass a previous high. It is worth noting that there is no specific formula for time as a risk moderator and indefinite waiting periods could be considered when implementing.

For any investor, the primary step in the formulation of a successful strategy should be the setting of an investment objective. Although “to make money” may be a fair representation of your goal, it does not focus on the strategic process that needs to take place in order to achieve what we have originally set out to do. The investment objective must be realistic and specific and should take into account the risk tolerance, personal needs and circumstance and any constraints that the investor may have.

It is recommended that every potential investor carries out a financial needs analysis. Many companies are available to help with this and provide the direction and equipment needed to carry out a proper analysis and most should carry this important service out free of charge. It is also vital that any company that assists a potential investor with their strategy should describe these risk reduction techniques in greater detail and explain the ways in which they can be incorporated into an investment plan.

For a free financial needs analysis and comparison of the market, contact Alliance Insurance Services on 2891 8915 or visit http://www.alliancegroup.com.hk

Alliance Insurance Services is an independent broker and provides services for Health Insurance, Life Insurance, Savings and Investments. For further information please visit http://www.alliancegroup.com.hk

For the first time stock investing was a losing proposition for a decade. The stock market lost ground from year-end 1999 through 2009. Stock investing for people owning equity funds was a disappointment to say the least. How should you invest in stocks in the future? Or… should you avoid them altogether?

The bottom line is that you need to invest in stocks if you want to get ahead financially. The real question is how to invest money in them without getting hurt in the process. And the truth of the matter is that few people know how to invest… period. Paint this picture in your mind: stocks (also called equities) have been the best investment since the great depression; and the stock market just had its worst 10-year period in modern times.

Unless you have the time, cash, and inclination to invest in real estate, equities are the best investment for every-day people. Bonds have returned about half as much and money in the bank about half as much again OVER THE LONG TERM. If stocks have rewarded investors with earnings of 10% a year, bonds returned maybe 6% and safe savings alternatives have paid closer to 3%.

To reduce your risk and still invest in stocks, just invest money in bonds and safe investments as well. Do not avoid equities, because safer investments do not have the proven ability to pay enough to offset taxes and inflation. If you earn 3% in interest in a year and inflation eats it up, you lose money after paying income taxes on your 3% interest earnings. Since stock investing is what will either make or break your financial plans for the future, let’s concentrate on this as our best investment for getting ahead over the next decade.

Make a resolution to keep ½ to ¼ of your investment assets in a variety of equity funds over the next decade with the rest in bonds and safer investments. For example, if you have a 401k at work you might spit your money equally three ways: equity funds, bond funds, and money market fund or stable account. That would make you a moderate conservative in terms of risk. Go with 50% in a variety of equity funds; and equal amount in the other two to be moderately aggressive.

Diversification is the first key to stock investing with less risk, and diversified equity funds give you this. The second key is to invest in stocks through a variety of equity funds. The stock market sets the pace for general diversified funds, but some funds invest money in specialized areas like real estate, oil and gold. Others invest money internationally. Include such funds in the equities portion of your portfolio.

The first 10 years of the new millennium is now history. Go forward and invest money on an even keel. If you decide to invest in stocks with ½ of your money in a variety of equity funds, add to your positions when you are now longer so invested; and take money off the table if you go over 50%. It’s as simple as moving money from fund to fund to stay on track.

Playing the stock market is not necessary to get ahead, and few every-day people who play win over the long term. Yes, you should invest in stocks; and the best investment vehicle for most of the people most of the time is equity funds.

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.