Investment Articles

During these trying financial times most people are re-evaluating how and where they decide to invest their money. However, for many it is too late as they have already lost years and years of gains on their investments. The advisors that will make it through this mess unscathed are the ones that will learn to adapt to the current conditions and understand that their clients are sick and tired of losing money.

Many advisors are still spouting buzz words like asset allocation and diversification, while trying to make you feel all warm and cozy about putting your money at risk. Understand that diversifying your investments it not at all a bad idea, one just needs to understand that diversification doesn’t always equal great returns.

Think about this: you’ve got all your extra cashflow in your diversified investments that is giving you a pretty decent 7% return. What you don’t think about is the car payment (3% of which is interest), the 10% interest on your credit card payment. So, in reality, your 7% gain is cancelled out by the interest you are paying to other people.

Now imagine if you eliminated your debt and could pay the interest on your car payment to yourself. All the sudden you’ve gone from putting your money at risk and hoping for a decent 7% return to being on the risk free road to creating more wealth than you ever could with mutual funds or diversified stock portfolios.

A shift in the market requires a shift in thinking. How many people do you know that were planning on retiring this year but have to go back to work because their retirement funds suffered huge losses? Why worry about postponing retirement, when you can do what the wealthy have been doing for years…become your own bank!

Nick Drzayich
Eagle Capital Management
http://www.eaglecapitalmanagement.com
208-484-3120

Investing is very much like buying groceries. In order to get the best deal on the items that you and your family want, you learn to “play the game.”

When it comes to groceries, here is one version of the game as it is played currently:

Watch the ads in the Thursday newspaper. This will tell you what’s on sale this week at the different stores.

Get the coupons from the Sunday paper. This time of year (the fall) the coupons are the best. The rest of the year, the coupons contain savings for new, sometimes silly products. But in the fall until the week before Thanksgiving, and then for a couple weeks until Christmas, the coupons are for real food that every one buys. Stuff like flour, sugar, baking soda and powder, green beans, corn, stuffing, rice, canola oil, pie crusts and fillings, cheese, crackers, and so forth.

The coupons used to be good for a longer period of time. Now the expiration date is usually within three months or so.

If you buy a certain amount of groceries around Thanksgiving you can get a free turkey – off brand if the economy is good; Butterball sometimes if times are tough, and only on frozen turkeys, never on fresh ones.

If you shop at Target and get a Target branded credit card, after every thousand dollars you spend, the send you a coupon good for 10% off of everything you buy for a day.

So here’s how we play the game at our house. Meat and produce at Central Market. Buy ground round when it’s on sale. Choose whatever expensive meat is on sale. Bought a whole rib eye this summer for half off – so we bought two. New York strips on sale last week for half price – we bought nine (there are three of us).

Buy staples, house items, and personal items at Target. Took Deb last Thursday night. Tab started at $289 dollars. She had 10% coupon – give that first! Then she had other coupons. Total out the door $229. She saved $60 by playing the game. What does $60 buy? Two meals out for the family at Chelsea’s favorite restaurant, or… In other words we make money go further by playing the game.

In groceries, what do you do if the price goes down? Buy, and then celebrate.

These are the exact same principles used in successful investing. When the price of a quality investment goes down, you buy! YOU don’t sell when the price goes down – Every smart grocery shopper knows THAT!

The only difference in investing and grocery shopping is that, in investing, there are no ads or coupons. You need someone, a smart investment advisor (like me), to tell you when things are on sale.

Could you benefit from our competence and trustworthiness? What about someone who would appreciate the information provided in these articles? E-mail me at dana@thebarfieldgroup.com.

Dana Barfield invites you to visit his retirement home page http://www.retirementwhys.com and blog blog.retirementwhys.com. Be sure to ask for the report Selecting Retirement Investments when you visit either of these resources.

Wealth can mean different things for many people, and the word can be applied in many contexts. For an investor, wealth becomes an objective – a primary financial goal. To accumulate capital in their portfolio and to invest and grow the amount of expendable income, becomes a priority when managing investments. The measure of someone’s wealth extends to the total assets owned and can include real estate, funds, liquid assets, as well as other forms of investments.

How a person measures or calculates their wealth is important, and a method should be developed. It will directly affect their approach to investing, and the financial strategies used. How a person manages risk when investing is also an important factor, even more so than the returns.

There are many strategies to manage risk. Risk will be different for every investor, as will the amount of risk that an investor will be able to tolerate. For an aggressive investor, the willingness to accept high risk is different from a very conservative investor.

Individual risk is related to an investor’s personal wealth – the amount of money that he or she can afford to lose and for how long. It is also related to how much that particular investor needs to earn and within what time frame.

Managing individual risk depends on how much money can be invested, at a comfortable pace for the investor. It also takes into consideration how much time the investor has, for example as in the case of retirement. Factors such as the number of years until retirement and the rate at which the investment grows, will determine the type of investment and risk taken.

Market risk is another factor to consider when managing risk. This is the typical risk associated within a specific market. For examples, stocks dive and real state bubbles. The ability of an investor to survive these conditions in the market, should determine how they approach it with their portfolio – if they enter it at all.

Money should be invested in a variety of areas to assist in avoiding losses. To manage market risk, investors should consider staying within markets that they are familiar with. Investors who understand risk, the markets, and their expectations in time, are able to develop a well diversified investment portfolio.

Risk can be managed by building a cushion to minimize it, or by ignoring it. The most valuable way you can manage your investment risk is by educating yourself on what you are intending to become involved in. Knowledge is power, and power is money.

Looking for more risk management 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 can help build your long term wealth.

With all of the investment opportunities that exist in the world today, it can sometimes be difficult to choose which specific ones you want to invest your money into. It seems like all too often that the “hot stocks” of the day end up becoming little more than a flash in the pan, and the stocks that no one really wants to invest in end up growing suddenly in value while people lament that they should have invested in it while they had the chance. If you’ve ever found yourself wondering how you can sort through these seemingly random fluctuations in order to find the best stocks for your investments, then this article is for you.

Below you’ll find ideas on how you can do a little research and hopefully turn that little bit of research into a large profit from the stock investments that you find.

Find Investments that You Trust

One of the best ways to choose the right stock is to do your research and find out as much as you can about the brands that you trust. Many trusted companies that have been in business for years tend to have fairly secure stock shares, and investments in these companies usually provide added security and stability to a well-maintained and diversified investment portfolio.

While it’s important to keep periodic watch over your investments so that some of your more trusted stocks don’t suddenly drop in value, many trusted companies and international retailers find their stock to have a much lower maintenance level than up-and-coming companies who may be affected by unexpected scandals or financial problems.

Search for Recent News

Another good way to find investments that are timely and likely to be profitable is to take the time to read over news stories that might influence the value of the stocks of the company involved. By staying up-to-date on the news and how it relates to major companies that you might be considering investing your money into, you can learn to anticipate increases and decreases in the value of the shares of those companies’ stocks. This can become especially useful if you learn about major scandals early on and are able to sell off shares before their price drops, or if you hear about new advancements that certain companies are making and are able to purchase shares before the price begins to skyrocket.

Keep an Eye Out for New Technologies

Just as you should watch the news for major events that can influence stock prices, you should also keep an eye on news from the technology sector and fields such as biochemistry and health care. New advancements in any of these fields can cause stock prices for the companies that made the advancements to start to climb quickly. By learning about new technologies before they become well known you can potentially get the jump on some rather important investment opportunities. Not every new technology will mean a major increase in stock value, but for every one that does there is a good chance on making serious profits from your initial investments.

Invest for the Long Term

In most cases, it’s also important to try and learn from your research whether or not an investment will do well as a long-term investment. While some short-term investments can be fine (and can net large profits if you choose the right times to buy and sell), long-term investments can add security and stability to your financial plans that short-term investments can’t.

Paul Parker writes finance and loan articles for the UK Loans Only website at http://www.ukloansonly.co.uk

It goes without saying that, the purpose for investing is to get returns from the money that one puts into a mutual funds pool. For that reason therefore, every investor is out looking for what he may term as, a smart investment. While the word smart is an acronym for some valuable characteristics, not many people have internalized it in as far as their money is concerned.

Putting money in a scheme is not something to be taken for granted. One needs to have a specific reason for doing so. The reason could be that one is saving for his children education, or saving to buy a home in future. With such goals in mind, one is able to choose the right kind of security. You therefore need to carry out a market survey to achieve this goal.

When you know why you are putting your money in a scheme, you are then able to measure the kind of return to expect. This is to say that once you know which type of security to buy, you are in a position to calculate the rate of return to expect. In most cases this will be determined by the market trends, but if you check out the performance of that security in the past, you will get a general idea of what to expect.

As you venture into the stock market, beware that there are many types of securities that you can buy. One way to determine which one to go for and which one to avoid is by comparing the risk versus the return. They both tend to move towards the same direction in that, as one increases the other one does too. This way, you will be able to determine whether the scheme is achievable or not.

Peter Gitundu Creates Interesting And Thought Provoking Content on Investment. For More Information, Read More Of His Articles Here SMALL BUSINESS MENTOR.

When you buy a bond, you are actually loaning your money to the organization that issued the bond. That is why bonds are often called “debt instruments.” The principal (the “face value” of the bond) is repaid on the maturity date. In the meantime, you are paid a set amount of interest, usually every six months. This interest is called the “coupon” or “coupon rate.” It’s called that because bonds used to come with little coupons attached that you would cut off and send in twice a year to receive the interest payment. Nowadays, the coupon rate is nothing more than the annual interest rate.

When deciding which types of bonds to invest in, it’s important to know all you can about each. Among the types of bonds you can choose from are:

Treasury Bonds

Treasury bonds, also known as “T-bonds” for short, are issued by the United States government and are considered to be the safest of the three bonds. The only risk is if they are sold prior to maturity (but this holds true for all bonds). Super-safety comes at a cost, though, and in the case of treasury bonds that means lower returns than other bonds.

Interest is paid on treasury bonds twice a year, and can be purchased in maturities ranging up to 30 years. All T-bonds bonds are issued in face values of $1,000 with different purchase minimums with each type of security. It is impossible to redeem a treasury bond before maturity, and interest payments stop as soon as the bonds mature.

Corporate

Corporate bonds are issued by companies in order to raise capital. While they can be very safe investments when issued by strong, established companies, the reverse is true for companies that are not rock solid. Unlike treasury bonds, corporate bonds have what is known as a “call provision”, which allows the bond holder to get their principle investment back before maturity.

Most corporate bonds have fixed interest rates, and some, called “zero coupons” are sold at a significant discount in exchange for the bondholder agreeing to wait until maturity to receive interest payments.

Because determining which companies are strong and which aren’t can be very tricky, there are companies who evaluate the fiscal integrity of various corporations to determine their bond-worthiness. Moody’s Investors Services and Standard and Poor are two examples of such rating companies.

Municipal

Municipal bonds are issued by state, county, or city governments for the purpose of financing government sponsored functions (I.E., building a highway or a school), or for other “non governmental” purposes, such as raising money for low income housing or student loans.

Municipal bonds, like T-bonds, pay interest twice a year. These investments can be very safe, but do carry risks as well. Moody’s and Standard & Poor rate municipal bonds based on their credit quality, so when investing in them, it’s a very good idea to use these ratings as a guideline.

Municipal bonds are subject to significant market risk if sold before maturity.

Maintaining a Diversified Portfolio

Many personal financial advisors recommend that investors maintain a diversified investment portfolio consisting of bonds, stocks and cash in varying percentages, depending upon individual circumstances and objectives. Because bonds typically have a predictable stream of payments and repayment of principal, many people invest in them to preserve and increase their capital or to receive dependable interest income. Whatever the purpose-saving for your children’s college education or a new home, increasing retirement income or any of a number of other financial goals-investing in bonds can help you achieve your objectives.

Assessing Risk

All investments offer a balance between risk and potential return. The risk is the chance that you will lose some or all the money you invest. The return is the money you stand to make on the investment.

The balance between risk and return varies by the type of investment, the entity that issues it, the state of the economy and the cycle of the securities markets. As a general rule, to earn the higher returns, you have to take greater risk. Conversely, the least risky investments also have the lowest returns.

The bond market is no exception to this rule. Bonds in general are considered less risky than stocks for several reasons:

• Bonds carry the promise of their issuer to return the face value of the security to the holder at maturity; stocks have no such promise from their issuer.
• Most bonds pay investors a fixed rate of interest income that is also backed by a promise from the issuer. Stocks sometimes pay dividends, but their issuer has no obligation to make these payments to shareholders.
• Historically the bond market has been less vulnerable to price swings or volatility than the stock market.

The average returns from bond investments have also been historically lower, if more stable, than average stock market returns.

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