Investment Articles

The best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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 best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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 best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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 best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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 best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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 best investment strategy for 2011 and beyond will vary from traditional investment strategy for good reason. Today’s investment scene and economic conditions are anything but normal. Here we look at today’s exceptions to the norm and the best ways to protect your investment portfolio going forward.

The best long term investment strategy typically recommended in the past for average investors: allocate about 55% to stocks and 40% to bonds, with the remainder going to safe investments. Sometimes real estate or gold were thrown into the mix. For the most part, this strategy worked. For 2011 and beyond it’s time to think twice about asset allocation and your specific investment options in the five areas mentioned above. Some are skating on thin ice; while others are headed where few of today’s investors have ever been before.

The good news is that average investors can put together an investment strategy best suited to the new economic reality by simply investing in mutual funds. All five of the above investment options and more are available in funds. Plus, funds come complete with professional money management and plenty of flexibility. Once you’re with one of best fund companies you can easily make changes to your portfolio free of charge. So, let’s take a look at some of the exceptions to the norm or extremes that exist today. Then, we’ll suggest changes to consider for 2011 and beyond in terms of mutual funds, starting with safe investments and ending with gold.

Safe investments pay interest and don’t fluctuate in value. The best in class here for most investors is still money market funds, where the interest you earn automatically changes with interest rates. Thirty years ago interest rates peaked and have since basically been falling. Then, you could earn close to 20% with high liquidity and safety in a money fund. As 2011 unfolds you’re looking at more like.1%. Both of these rates represent DRAMATIC extremes or exceptions to the norm. Few of today’s average investors have experienced a significant upward trend in interest rates. Prepare for this possibility. Your best investment strategy here is to keep 10% to 20% in money funds.

In pondering your best investment strategy with bond funds picture yourself skating on thin ice. That’s what people who loaded up on bond funds to get higher interest income for 2011 and future years are doing. Lighten up here in general and avoid or get rid of long-term bond funds. They pay higher dividend yields (interest) but will take a major hit when interest rates head north for real. The extreme situation here has been bond prices, which became very high as a result of investors bidding up prices in a bizarre low-interest-rate environment. The best investment options here for most folks are short-term and intermediate-term bond funds. You will make less interest income vs. long-term funds, but you will have much less exposure to losses if the ice cracks and bond prices tumble.

The financial crisis and recession are officially over, but the stock market hesitates in its attempt to reach new highs for 2011 and beyond. Economic growth has been in question as unemployment stubbornly remains at high levels relative to the norm. This situation is unusual for an economic recovery; but don’t speculate about the future of stocks and don’t avoid stock funds. The best investment strategy here is to favor general diversified stock funds that invest in high quality, dividend-paying U.S. companies vs. smaller less-stable companies that pay little in the way of dividends. Then diversify even further with international funds to spread out your risk. In this way you will participate if stocks continue to struggle upward, but you shouldn’t get hammered too severally if they don’t. Your best stock strategy if you lean to the conservative side is to lighten up on diversified stock funds in general.

As a financial planner I often recommended both gold funds and real estate funds to average investors, even when traditional investment strategy all but ignored these investment options. Both of these funds add additional diversification and balance to a portfolio. Both have also experienced changes in character in recent times that deviates from past norms. For years real estate funds were steady performers and paid handsome dividends. They were clobbered in the recent financial crisis and recession. Even with a 4 ½ % mortgage rate the real estate sector lacks gusto in turning around, but at least realty prices are not excessively high. The best investment strategy here if you believe the industry will recover in 2011 or beyond: put 5% to 10% in a real estate fund to further diversify your portfolio.

Now let’s talk about the last extreme in today’s investment scene, precious metals. If you think that today’s infatuation with gold is normal, here are some historical lows and highs for an ounce of gold, in round numbers, you should look at. From a low of $100 in 1976… to a high of $850 in 1980… and then down to $250 in 2001. Since 2001 began, gold has glittered, with its price pushing through $1400 in December of 2010. In that same time period stocks struggled. Don’t push your luck in 2011 and beyond. Gold and gold funds are not a growth investment and are anything but safe at today’s prices. Your best investment strategy is to cut back if you have money here, and to stay away if you don’t. Gold has become a speculation vs. a traditional hedge against inflation, which is presently mild by any standard.

Getting more aggressive is sometimes the best investment strategy… like when prices are hitting extreme LOWS in the investment markets. For 2011 and beyond it’s best to focus on the extremes that could spell trouble in the future as they unfold… like extremely low interest rates suddenly climbing significantly. Protect your investment portfolio with a good defense, diversify across the board to deal with uncertainty, and live to invest more aggressively another day.

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.

We’re all shopping for good safe investments for 2011 and beyond, but be careful in your search for the best. Some that look like good investments aren’t safe at all. Others are just relatively safe.

Good safe investments have been scarce for years as interest rates have fallen to record lows. In 2011 and beyond the future course of interest rates could separate the best from those that only appeared to be good investments. Here we define safe or fixed investments, and then look into the average person’s best alternatives in each of the three basic categories on the safe side of the fence.

Safe investments are fixed in nature vs. variable investments like stocks, real estate or commodities. Your income or interest rates, principal, or both can be fixed and maybe guaranteed by the government. You are basically acting as a money lender to a borrower like a bank, government entity, or a private enterprise like a corporation. In any case, the borrower offers terms for payment of interest and for repayment of their debt to you. Your three basic choices in the safe or relatively safe investments arena: CASH EQUIVALENTS where only your PRINCIPAL (money invested) is fixed, BONDS where only INTEREST RATES are fixed, and SAVINGS VEHICLES where BOTH principal and interest rates are fixed for a period of time.

Taking them in order, the first category is often simply referred to as CASH. Examples include bank savings and money market accounts, and money market mutual funds that invest in high-quality safe short-term money market securities for their investors. Safety with high liquidity is the signature here. You can get your principal back intact quickly and easily. These will be especially good investments for 2011 and beyond if interest rates go up because your interest income is not fixed and should follow suit. Your best investments here will be money market funds where your interest income automatically goes up with interest rates. Banks raise rates at their own discretion.

Bonds have fixed interest rates that do not change for the life of the security. They pay higher interest income and were good investments for years as rates were falling. These are basically long-term debt securities that trade in the open market like stocks do. Bonds promise to pay back your principal when they mature… but maturity can be 20 or 30 years away. Meanwhile your principal or the value of your bonds will fluctuate. The longer the term until maturity the greater the influence of changing interest rates. The value of bonds will fall if rates go up in 2011 or beyond, which only makes them relatively safe investments.

The best investments for the average investor in the bond department, looking down the road, will be short-term to intermediate-term bond funds. These hold bonds that mature in a few years vs. long- term funds with average maturities in their portfolios of 20 years or more. The latter pay more interest income and might look like good safe investments if you look at their performance records. But remember, the trend in interest rates could change drastically in 2011 and beyond. We’ve been hovering near all-time lows in interest rates and highs is bond prices. Don’t be the last to get the word when the party is over.

Some safe investments like bank certificates of deposit (CDs) and Savings Bonds come with fixed interest rates (for a period of time) and government guarantees for safety of principal. If the rate offered on a certificate or promissory note looks too good to be true, check to assure that it’s insured by the government. Some advertisements are misleading. The best investments here simply amount to shopping for good interest rates without locking in a rate for too long. If rates go up and you liquidate early you face penalties. Stagger your maturities. If you lock in a rate of 2% for 5 years or more, you won’t be a happy camper if rates go north. For the very best investments here look to your stable or fixed account if you have a 401k or other retirement plan that has one.

Finding good safe investments for 2011 and beyond can best be accomplished by putting together your own package consisting of the best investments from each of the three safe and relatively safe options just discussed. For most people this means a combination of money market funds, shorter-term bond funds (with average maturities of 7 years or less), and CDs with various maturities. This way you can make the best of it while interest rates are low – without putting yourself at significant risk if rates take off in the not too distant future.

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 best investment strategies for 2011 and beyond will reflect the new realities in the world of investments: better safe than sorry. Diversification is the key to good investment strategies, but as the future unfolds finding the best alternatives in each investment class could get a bit tricky. Here’s a basic guide geared to making life easier for average investors, which includes most of us.

The challenge facing investors today: how to put together the best investment strategies to make your money can grow without too much risk. Stock funds and bond funds are always part of the mix for most folks, and so are good safe investments. Looking down the road, there could be more trouble in the world’s debt markets; and America’s plans to stimulate a luke-warm economy by lowering interest rates to new lows might not have the intended effect. So, let’s look at how to stay out of harm’s way in 2011 and beyond in case another shoe drops, starting with what are and what are not safe investments.

Going into 2011, bonds and bond funds were like magnets for people who wanted higher interest income in relatively safe investments. Compared to other alternatives investors got higher interest income, but many people don’t understand the safety issue. Truly safe investments are fixed in nature, pay interest, and do not fluctuate in value. Bonds have a fixed interest rate but fluctuate in value as they trade in the open market. Bond funds have worked well for average investors over the years as interest rates have fallen to historical lows. Don’t push your luck here.

The flip side: when interest rates and/or inflation heat up bond funds holding long term bonds in their portfolios will be anything but safe. They will lose significant value. Your best investment strategy here is to go with intermediate and short-term bond funds. You will make less in interest income, but these funds are definitely safer than long term funds. Money market funds are safe and will pay higher interest income as rates rise. There’s only one problem with them for 2011. Unless or until interest rates take off, they are paying next to nothing.

The real challenge until rates move up is in finding good safe investments that pay a respectable rate of interest… without locking in a rate for too long. No one could have predicted mortgage rates at less than 5% or 5-yr CDs at less than 2%, but it happened. Your best safe investments might not be found in mutual funds in 2011, but you may be overlooking some options elsewhere. If you are in a retirement plan (like 401k) you may have a fixed or stable account available. If you own a retirement annuity or universal life policy it may have a guaranteed minimum interest rate. In either case the interest rate could be quite attractive relative to other options.

Stocks and bonds are still the cornerstones of a good investment strategy. And for the vast majority of people mutual funds are the best way to invest in both. We’ve discussed how to move toward a safe investment strategy in bond funds. With stock funds we can do this in two different ways: by increasing diversification and by favoring conservative funds with a good history of paying dividends. We’ll start with the latter.

When the economy and/or optimism are growing, growth and small-company stock funds are often the best investment. These funds can grow dramatically in value as stock prices run up, but they rarely pay much in the form of dividends. In times of high uncertainty equity-income funds that invest in high-quality dividend paying stocks can be a step in the safe direction. If the market goes south they should be less volatile on the down side, and the dividends they pay can cushion the blow somewhat.

The best investment strategies for stock (equity) funds in 2011 and beyond will focus on increasing your scope of diversification. Too many Americans own general diversified equity funds that only invest in U.S. stocks, and ignore the rest. One of the best ways to get more diversification is with international and global equity funds. Another way is to add specialty stock funds to your portfolio. Gold funds have been one of the best investments for several years, but history shows that gold can get real cold real quick. Don’t put more than 5% of your investment dollars in gold funds. Consider natural resources, real estate, and basic materials specialty funds as well to add even more diversification.

The best safe investment strategies going forward will focus on reducing risk in the stocks and bonds department, while getting the best rates available on the truly safe investments in your portfolio. With increased diversification you can lower your overall risk and still make your money grow over the longer term. If another financial crisis rears its ugly head… you now have investment strategies geared to the safe side to keep you out of major trouble in 2011 and beyond.

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.

Would you like to know the high income investments strategy? Probably, all would be interested in it. You need to make your investment options strong enough to support you during the times, when you are helpless. For this, it is very important to learn investing in the right way. Just investment in any option available is not a good choice. You should know in what you are investing, its time period, its pros and cons, etc. considering all the above factors, one can go for investment option that is most feasible and suitable to him.

There is an assortment of investment strategies available, however you need to simplify them and evaluate it in order tom comprehend whether it is for you or not. In order to make high income investments sensible option, you need to acquire a firm grasp of some of then noticeable features of investments. These include income, growth, safety, liquidity, and tax benefits. Each investment options have to be evaluated by rating it in terms of these features.

Get hold on bonds and stocks. These are the huge high income investments options that each individual should understand while investing their capital into it. Basically, stock investment is directed to people who desire to expand with flexibility. In case, you desire high income and safety, then bond investment is the preferable choice for you.

You can speed on liquid and safe investments such as bank money market accounts and money market securities. All the investment portfolios should boast bonds, stocks and liquid safe assets. You can also spread your hands into alternative high income investments such as oil, gas, gold, real estate and other such tangibles, products or commodities. You can also go for foreign securities as high income investments. Such investment options can generate growth for the investors when the condition of the stock market is not good.

Then, you need to also focus on the concept of mutual funds. It is quite easy as you can now comprehend the kinds of investments in which these funds invest their sum. Mutual funds administers your money for you, however, it is important to select a good fund. You are provided with some basic alternatives such as balanced funds, stock funds, money market funds, bond funds, etc.

The ultimate step is to invest in a concept wherein you can administer and maintain a balanced portfolio of your investments; however at your own risk. You have to expertise in investing concepts and tools such as balance, rebalance, asset allocation and averaging dollar expense. If all these steps are followed properly, you find the investment option very easy and manageable. Or else, you will just remain confused and lost in this cycle of investment. If you are interested to know more about high income investments, then you can visit cash value life insurance for further details and assistance. High income investments are very necessary and mandatory in today’s world because one can never predict what can happen tomorrow.

Did you know that there are high income investments outside of the market?

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Many companies use two ways to raise the money required for business growth. The way in which they do this is through issuing shares or issuing bonds. With shares you become a part owner of the company but with bonds you become a lender to the company. Corporate bonds are one of the main ways for them to raise capital. The question arises: just how safe are corporate bonds?

As with all bonds, corporate bond prices are sensitive to universal fluctuations in interest rates. Standard & Poor’s, Moody’s or Fitch rate most bonds. Any with a rating of B B B or higher are considered to be investment grade. Those rated lower would be considered as a “junk bond.” The higher the rating the lower the rate of return the issuer can offer. While an investment-grade corporate bond may still default you can be more confident in its ability to repay its debt.

Ratings can be used to help you make better investment decisions and they allow investors to compare the financial strength of each company. A poor credit rating indicates a higher risk that the company will default and you will not get your money back as promised.The benefits of credit ratings are that they are widely available and offer a simple measure of risk. A low credit rating does not necessarily mean you should ignore the company but it does indicate that caution is warranted.

Investment-grade corporate bonds are suitable for investors seeking income and for conservative investors who want a higher yield than would be available with government or treasury bonds. They also add diversification for the more aggressive investor. These bonds are considered very safe investments, and they pay slightly higher yields than government bonds

At the end of the day corporate bonds are only as safe as the company in which you invest. Read annual reports to learn about the company’s cash reserves, their outstanding debt and profit projections. Look for realistic responses to economic changes. Do they adjust in times of economic downturn?

As with any investment corporate bonds vary in the degree of safety that they offer the investor, and nothing is guaranteed. The corporation issuing the bond guarantees the bond, but the safety of the investment depends largely on the credit worthiness of the company. Municipal and government bonds will have a higher rating than a corporate bond and they offer lower income opportunities as a result of the lower risk. Corporate bonds are safer than shares as they have preference over share holders in the event that the company fails.

When considering investing you should think of your own personal circumstances, your desire for risk, your personal strategies for investing, and the current market conditions. The final decision will be yours and you can only use the tools available to assess the safety of corporate bonds.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

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