Investment Articles

As the UK heads into a period of extended inflation, low interest rates and volatile stock markets, investors are looking for safe investments to preserve and grow capital. Many investors are turning to gold as prices continue to rise due to an increasing demand from investors, but more savvy money men consider farmland to be the safest investment in 2010 as demand for food continues to rise and a severe shortage on the supply side continues to push up prices and create safer investment returns.

Farmland is considering a safe investment as it is a renewable resource, constantly reproducing the commodities that the population needs – food! Therefore consistently generating an income for landowners and retaining its value, especially in times of inflation.

The value of agricultural land in the UK has risen by 13% for the first six months of 2010, and by 19.7% for the twelve months to July according to the Knight Frank Farmland Index, the industry standard for measuring agricultural land values. In fact there has not been a single seven year period since records began, where farmland in the UK has not risen in value quicker than the rate of inflation, providing safe investment returns for landowners. The income generated from leasing good quality land to commercial farmers also goes some way to replacing the lost risk-free income on cash deposits due to such low interest rates.

There is always of course an element of risk, land values could fall for example, but as demand for food is rising at the fastest pace in history and the amount of land per person on the planet has halved from 0.42 hectares to 0.21 hectares, the next seven years is extremely unlikely to be the first time that agricultural land values will fall. There is also a risk that your farming tenant could default on his rent, but this risk is also minimal as agricultural occupancy rates in the UK are close to 100% year round.

So those investors looking for the safest investment possible should carefully consider whether a well-place agriculture investment in the form of good quality farmland will have a good fit for their portfolio, It would certainly provide growth and income and a very low risk profile.

To learn more about investing in agricultural land, or farmland as an inflation hedge, download the Agricultural Investment Guide at www.dgc-ai.com/btl-farmland

David Garner in Managing Partner at DGC Business Consulting – http://www.dgc-ai.com – a property investment boutique for high-net-worth investors. DGC specialise in sourcing off-market assets at deep discounts to valautions and design and deliver innovative low-risk pruchase and holding structures designed to minimise risk and maximise the potential for upside returns.

The common consensus among the Bank of England and economists is that the UK is heading for a period of extended inflation up to 2012/2013, and savvy investors are looking for alternative assets that are proved to grow in value quicker than inflation rises, effectively hedging inflation as part of their overall investment strategy. These inflation investments should be designed to provide income and preserve capital at a time when short term market visibility is at an all time low, and quantative easing programmes combined with low interest rates start to squeeze the value out of cash as inflation rises.

Historically investors looking for an inflation hedge have turned to Gold, seeing the precious metal as a safe investment that will hold its value, even in uncertain economic times. The value of gold is a market led by supply and demand, there is only a finite amount of gold on the market, ands as demand rises, so too does the price per ounce.

The problem with gold as an investment is that it is essentially a useless commodity and is used mostly for the purposes of storing cash as an asset, and more and more investors are now investing in farmland as this asset exhibits the same characteristics as precious metals, yet will always remain in demand from a growing population demanding more food, ensuring that farmland investment is supported by rock solid fundamentals and landowners have in their possession an asset that will always command a price regardless of the happenings within financial markets.

Farmland is an almost perfect inflation hedge investment, as agricultural land values have continued to rise for the last ten years. There has in fact not been a single seven year period that farmland values in the UK have fallen since record began, and as the demand for food is rising at the fastest pace in history, the next seven years is extremely unlikely to be the first time that happens.

As agricultural land also provides a stable consistent income in the form of a rental yield when leasing the land to a commercial farmer, this asset class also goes some way to replacing the income lost due to low interest rates.

In short, agricultural land provide investors with a near perfect inflation hedge, stable income, and remain very liquid as only 0.1% of farmland changes hands in the UK each year, making good quality land hard to find, further limiting supply and supporting future values. Generally speaking, good quality farmland will sell within 90 days depending on location and grade etc.

To learn more about investing in agricultural land, or farmland as an inflation hedge, download the Agricultural Investment Guide at www.dgc-ai.com/btl-farmland

About the Author:

David Garner in Managing Partner at DGC Business Consulting, (http://www.dgc-ai.com) a boutique property advisory for high-net-worth investors. DGC source property assets at deep discounts to valuation and design and deliver proprietary investment structures allowing investors to acquire off-market assets fro income and growth.

If you learn how to invest the right way you can invest for your future relatively free from worry without putting all your money in the bank. Here are the steps you need to take to invest for the long term like a professional, complete with a recommended best investment portfolio.

First, accept the fact that you will need to learn how to invest because you will never get ahead playing it totally safe. A 1-year CD pays less than 1% interest. Second, classify yourself on a scale of 1 to 10 in terms of risk tolerance with a 1 being totally safety conscious and 10 being aggressive. Since most people are comfortable with only moderate risk, we will base our best investment portfolio on a risk factor of 3 to 5, moderately conservative.

Third, view investing as a long term proposition whether you are 21 or 71 years old. Expect that even the best investment portfolio will fluctuate in value somewhat. Fourth, invest in tax-favored accounts such as IRA and 401k plans if possible, and do not overlook Roth plans that are FREE from federal income tax.

Fifth, invest only in the three basic mutual fund types: money market funds, bond funds, and stock funds. Avoid sales charges and high yearly expenses by investing in no-load funds, and allow your dividends to reinvest to buy additional fund shares. If you are investing outside of your employer’s plan check out Fidelity and Vanguard, the two largest fund companies in America. Both offer no-load funds and have favorable yearly expenses.

Step Six is where we get down to the nitty-gritty of where and how to invest with only moderate risk. Keep 20% of your investment portfolio invested in money market (MM) funds to earn interest with high safety. Invest and keep 40% in intermediate-term bond funds to earn higher interest with moderate risk. The remaining 40% goes to stock funds for long term growth and higher profit potential at a higher level of risk.

You can get by owning just one MM fund and one or two bond funds. If you are in a 401k plan with a “stable account” option, substitute it for the MM fund if it pays more interest. Stock funds are a different story. Here you need broad diversification, and should concentrate on funds that invest in large-cap blue chip companies like GE, IBM, Exxon, and so on. An S&P 500 Index fund tracks the stock market and is an ideal holding. You may want to hold 3 or 4 different stock funds, including an international fund, to be heavily diversified.

Step Seven is where you must follow through so that our best investment portfolio can deliver for you over the years and you can sleep at night without worry, knowing that you have a sound investment strategy. Realize that nobody on the face of this earth knows, at any given time, what the best investment is or how to invest profitably with a high degree of certainty. That’s why we diversify and put together an investment portfolio. In Step Six we said to KEEP 20% in MM funds, 40% in bond funds, and 40% in stock funds. KEEP is the operative word, because over time things always change in the investment world. Each of our three basic fund types will have periods of time when they produce good returns and periods when they don’t.

You must review your progress at least once a year, like in January. And you will need to make adjustments by moving money around when your percentages get off track as the various funds perform differently. For example, if your stock funds total less than 40% of your portfolio value, move money to them from the other funds to get back to 40%. In this way you will stay on track, and in the process be shifting money from funds that are getting pricey to funds that are getting cheaper. This lowers your average cost per share over time in both your bond funds and stock funds, and makes managing your investment portfolio an automatic ongoing process.

Now, if anything in this article confused you don’t give up the ship. You can learn investment basics and learn how to invest and follow this plan. Just start at the beginning with a good investment guide, and keep reading articles about investing. It’s easier than you think if you learn the basics first.

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.

Investments in precious metals have always been popular among people. And there is nothing weird since this type of investment is considered to be one of the safest possible options. The other great advantage that can not be disregarded is stability. Basically speaking, due to the number of benefits more and more people all over the world are considering this investment choice. And here comes the other questions: Which of the precious metals you should invest in? It goes without saying that gold and silver are the most popular variants. So, which one to choose – gold or silver investment?

The following information will help you to make this choice.

To begin with it should be pointed out that silver formed proportional raiser that was almost always higher than the one created by gold. In addition, the cost of silver increased in 3 – 4 times while cost of gold doubled. To go into more details there is a need to add that it is a historical fact that the cost of silver has been significantly rising every time the dollar rates dropped.

The other important aspect to take into consideration is that silver was more frequently used for industrial purposes and consequently this strengthened its value. For example, this metal is used in plastic industry, photography, digital cameras, laptops, coin minting, and so on.

Besides, there is one more important plus of silver as an investment option. I am talking here about its affordability if compared to gold which is usually bought by rich people.

As you can see, all the things mentioned make silver a really great and safe investment. But, at the same time, you should understand that is not reasonable to neglect investment in gold. And if you want to diversify your investment portfolio both metals discussed should be included. This will be the wisest decision for you to make.

P.S. If you are interested to join the interactive discussion help on YouTube.com about online investment tool – please comment to the Income NonStop video review and share your personal feedback.

You need the best investment guide you can find in this messed up economy and tough investment environment. You’ll also need a good guide to investing for beginners to navigate the rough waters ahead. Investing has never been more difficult or confusing. It’s time to learn how to invest, and here’s how to go about it.

First, you’ll need to get a handle on the investment universe including any investments you might already own. This is not that difficult if you have a good investment guide, since there are only 4 basic investment alternatives out there. Second, you’ll need to learn how to invest and put together a sound investment strategy that will work for you in both good times and bad. That’s what a good guide to investing for beginners can do for you.

In other words, learning how to invest successfully over the long term is a two step process. Skip step number one and you won’t understand step two. Without step two you won’t be able to put the investment knowledge you learned in step one into action. Up front I stated that now is a tough time to invest. Now I’ll back that up with my 35 years of investing experience, in terms of the 4 basic investment alternatives available to all investors. Consider this a mini investment guide and a wake up call. Investing for beginners is no picnic today.

Your 4 basic investment alternatives in order of safest to riskiest: safe investments, bonds, stocks, and alternative investments. Safe investments like bank accounts and money funds pay interest, and these days they don’t pay much. The score in late summer 2010: 1-yr. CDs at less than 1% and money funds at less than.05%, or one-twentieth of 1%. This is not normal, and is in fact downright scary. The government can hardly push rates lower to stimulate the economy as they’ve done in past years. We are already looking at zero interest rates in the money markets.

In order to earn higher interest income of 3% or more, average investors are moving money into bonds in the form of bond funds, which are not really safe investments. Simply put, when interest rates go UP, the value of bonds go DOWN. That’s a basic investment fact you can count on – interest rate risk. If you believe that interest rates will fluctuate as they always have and will go up in the not-too-distant future, bonds are not exactly great investment alternatives at this time. With two down and two to go, we move into the riskier choices that involve assuming the risk of ownership in order to earn higher returns.

Any guide to investing for beginners can point out that on average, over the long term, stocks have returned about 10% a year. The problem is that over the past 10 years the average investor would have done better with his or her money in safe investments in the bank. And over the past 3 years, a loss of about 10% a year was common for the stock funds that invest money for millions of average investors. Investor confidence in the economy and the stock market is not high, as billions of dollars are being pulled out of stock funds and moved someplace else (like to bond and money funds) in search of greater safety.

In the past when uncertainty was high and confidence in the stock market was low, smart investors turned to other (alternative) investments like real estate to find opportunity. That’s been a problem this time around, because the financial system seems unable to get the traction needed get things moving again. High unemployment won’t go away and millions of mortgages are “under water”, as people decide to just walk away from their financial obligations. Gold and silver have done well compared to other investment alternatives. If history is any guide to investing, that’s not exactly a cheerful note. People buy and hoard gold in times of fear and desperation.

Out of our 4 basic choices, none looks like a screaming BUY opportunity. Some of the best minds in the investment world are suggesting that investors need to start viewing the investing game differently and lower their expectations. I suggest that you start with the basics and curl up with a good investment guide on a rainy day. Then, you’ll want to follow up and learn how to invest with a guide to investing written for beginners. Once you start to get up to speed you might even begin to enjoy the challenge. And make no mistake about it… investing today is a challenge.

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 single best way to know how attractive your commercial real estate deal will be to the bank is to know and understand the current debt service coverage ratio. In other words, if you took a snapshot of the current rental income of your subject property, the bank wants to know what the ratio is between that amount vs. the amount that you’ll need to be paying them every month. When it comes to these sorts of deals, the bank will always look at the property first and then you second. Even if your credit isn’t the greatest and you don’t have tons of assets, there are banks that will still finance your acquisition based on the financial strength of the property. This may take some extensive legwork to find depending on your personal financial strength, but it can be done.

To calculate the debt service coverage ratio, you’ll want to divide the net operating income (monthly) and divide it by the monthly payment to the bank (monthly). Banks will actually tell you what their target debt service coverage ratio (dscr) is if you ask them, but on the conservative side you’ll want to keep it somewhere in the 1.2 to 1.4 range, with 1.4 being the best. With a dscr of 1.4, you’ll most likely be successful at getting financing up to 80% loan to value. It has been much more difficult to obtain financing lately, but if you have a dscr of around 1.4 you shouldn’t have much of a problem as it makes very good business sense for a bank to finance such a safe investment. This is additionally true if the property is managed by a reputable management company. In some rare cases, arrangements can be made where the management company sends the monthly payment directly to the bank each month, which will add additional attractiveness to the deal for the bank.

There are still some very good deals out there if you know where to look. If you need help finding some good investment deals, please visit our website at http://www.invesco.info and leave your contact information so we can respond to your request.

IVESCO/Virtual Banking Companies Unlimited, LLC is a Portfolio Selection Agent for an International Private Placement Trading Platform. For additional details on our investment opportunities, please visit our website at http://www.invesco.info and register your contact information so we may respond to you promptly.

Many illustrations of investment performance calculate the growth of a hypothetical investment from a given starting point.  Typically there is a benchmark, such as the S&P 500 index, charted alongside for comparison purposes.  The models show that had you invested a specific dollar amount, for example $10,000, you would have the initial $10,000 plus whatever growth through dividend re-investments and asset price appreciation at the end of the evaluation period.  This measures an investment’s total return for the period and is based on a buy-and-hold strategy that is quite different from how most people invest.

Controlling Your Emotions?

Morningstar, an independent investment research company, compiled returns for how the average mutual fund investor did during the 2000’s. The research added a layer of analysis to the total return calculation by also tracking the cash flows in and out of the mutual fund.  They wanted to see what the performance looked like if you took into account additional buys and sells in the fund during the same time frame.  Then they compared the findings to the buy-and-hold strategy that mutual funds use to report investment performance.  What the findings show is that most investors suffer from bad timing as they get in when prices are high and get out when prices are low.  This is a reflection of how market forces can drive investor emotions and result in behaviors that cause poor relative investment performance.

Slow And Steady

Another interesting discovery is how fund companies provide different investing experiences for the average investor.  The institutions that stick to fundamentally sound investment principles were proven to have better investor returns relative to total returns than those companies that use a short-term, current-trends marketing strategy to attract investors.

Financial Symmetry’s composite results for the decade were an average annual rate of return of 4.93% compared to the average annual investor return of 1.68% across all funds.

http://www.finsymnews.com

Will Holt, CFP, CPA, is a partner in the Raleigh, NC financial planning firm Financial Symmetry, Inc. – http://www.finsymnews.com.

With literally thousands of managed funds available, selecting a good one can be a daunting task. Following a few simple guidelines will assist in picking a sound one.

Objectives and Timeframe
Part of the key to picking a good managed fund is first looking at your own personal situation. A retiree may look for a fund with solid income (i.e. regular dividends or distributions along with a high yield), whereas a young first time investor might be looking for long term capital growth. The former might be reliant on their managed fund for income, whereas the latter might prefer a fund that re-invests dividends, potentially leading to even greater returns at a later point in time. The proportion of one’s investments a proposed managed fund is likely to be (including other stock investments, property etc) also needs to be considered.

Risk Profile
Staying with the same example, a retiree who has accumulated substantial assets might elect to choose a managed fund with lower risk, to maintain those assets (for example, a diversified fund, or a fund that invests in only larger “blue chip” securities). Such a retiree’s assets, if diversified, might allow for investment in a higher risk, but potentially higher reward fund (such as a sector specific fund, or a fund that only invests in small start up companies) if this makes up only a small overall proportion of their net wealth. Conversely, if a first time investor’s proposed managed fund investment is likely to make up a high proportion of their savings, then investing in a lower risk fund may be more prudent. Risk may be able to be increased as savings are built up over time, and investments diversified.

Independent Research Houses
Every fund manager is always going to sing the praises of their own products. Highlighting attractive investment returns over one year as compared to similar funds might not tell the whole story – the comparative returns over three or five years might not be as attractive. An independent research house can assist in providing detailed analysis of a fund, and also the fund manager’s relative merits. Bear in mind that fund managers pay independent research houses to research their funds.

Consistent Track Record
Look for a fund manager and a fund that have provided reliable returns over a medium to longer term timeframe (more than 1-2 years). Short term performance can sometimes be anomalous. Performance also needs to be viewed with regard to overall market conditions. A rise of ten percent in a year is great compared to bank interest, but very poor if the overall market has risen thirty percent.

Past Performance Is Not Necessarily An Indicator Of Future Performance
This common disclaimer does highlight the inherent risks in investing. One take away from this is that it is important to look at past performance, but it is equally important to look at the reasons behind the figures. Are the results based on sound investment principles or good fortune? Does the fund manager’s outlook and strategy give you confidence in their ability to continue to provide you with good returns in the future?

Share Trading can contain many pitfalls. Heed each of the factors listed above, and you will give yourself the best chance of choosing a managed fund with positive performance.

William Shaw is a boutique investment manager which specializes in offering Managed Accounts to private individuals, Self Managed Super Funds and financial planners in Australia. Our Managed Accounts service has outperformed the ASX 200 by 23.32%. For more information about our managed share investment service and about our high conviction active investment methodology, visit Managed Funds

Unlike the share market when the bond yield goes up the bond price actually goes down. This is in fact in a bit different than what we normally observe. Below is the detail explanation of exactly what happens.

Understanding the concept is fairly simple. It is piece of document which promises you to payback your invested principle after the maturity date plus an interest (simple or compound) in fixed intervals. These are not same as stock market shares. When you own a piece of company share then you partly own the company with its risks for as long as you own the stock. Bonds in the other hand have a maturity date and you will get the promised interest on the money and will get your principle back after maturity.

There are various types issued by various entities. The include but not limited to – Federal Government, Provincial Government, Local Governments, Corporations etc. Bonds are generally considered very sound investment if issued by a financially sound government. There are cases where a government has defaulted on its bonds.

Bond has few important terms, such as price, Interest rate, Par value, maturity date and finally bond yield. Generally in the mortgage market the most discussed terms are Price and Yields.

Assume you own a bond of 100$ value with a 2 years maturity. The interest rate is 6% per year. So, you will receive total of 12$ (based on simple interest) within this 2 years. Now you want to sell your bond in the middle of the term. You get an offer of 90$ for that bond. The new owner will receive 106$ after one year on an investment of 90$. He/she will earn (106-90)/90 = 17.78% on that bond. That is called bond yield. Hence when bond prices go down yields goes up.

Following are some examples of many types of bonds available in the market.

- Convertible bonds
- Corporate bonds
- Eurobonds
- Extendible/retractable bonds
- Foreign currency bonds
- Government bonds
- High yield bonds
- Inflation-attached bonds
- U.S. treasury inflation protected securities (tips)
- Mortgage-backed securities
- Zero coupon or “strip” bonds
- Asset-backed securities

Many analysts in the market tend to use the yield curves to predict the future. It is not a very well proven idea. Many times those predictions has missed their targets. It can give you a fair idea about what is coming but not without its drawbacks.

Sudip Adhikari

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

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

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

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

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

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