Investment Articles

Most investment strategies pitch somewhere upon the continuum between a high risk / high return approach on the one end and a low risk / low return approach on the other. The problem with pursuing high investment returns, is that the capital value of investments may decrease in the short term before they increase again. The problem with conservative low-return investments is that the real value of capital may over time decrease due to inflation.

The art of investing lies in finding the approach that suits you personally best. One should on the one hand try to maximise the return on capital, but at a risk level that is acceptable to you. The question is what is regarded as acceptable risk and, is the acceptability a constant factor that stays the same under any circumstances? The answer is no. More risk is acceptable under certain circumstances, but before these circumstances are discussed, it is necessary to discuss the following terms that will be used, that are often confused:

Saving

Saving is the action of putting money aside. It means that money is not spend, but is kept at the owners disposal.

Investing

Investing means that money is handed over to a third party for purchasing assets with the purpose of long term investment growth. Investors transfer the their funds with the intention that financial assets like shares and bonds or hard assets like diamonds are bought. Investing does not mean to hand money over to dubious schemes.

Gambling

To gamble is normally understood as “to play a game for money or other stakes” like putting money on a roulette wheel or buying a lotto ticket. It can also mean to buy a share that you know nothing about or investing in a scheme you don’t understand.

Marketers of illegal schemes use the word “investing” to lure people to hand their money over to them. Initially, when “investors” receive high payouts, they think the scheme is the best investment thinkable. The fact that it has nothing to do with investment, only dawns on them when they lost all their money and it is to late to recover anything.

Speculation

Speculation means that a calculated risk are taken to make money on a relatively short term. One may for instance buy property with the purpose to sell it in a year or two at a higher price. The price of the property may not rise, but at least you have done sufficient homework to make sure that there is a high probability that it will rise.

Now that we are sure about the terms, we can look at the circumstances under which a higher risk may be appropriate.

Surplus income: The higher your surplus income, the higher the risk you should be able to handle in investing money.
Frequency of investment To invest a certain amount regularly, holds less risk than to invest a single amount at once.
Amount: If the amount you want to invest, is a small percentage of your total capital, you can accept greater risk.
Term: Greater risk can be handled with longer investment terms. Young people can therefore accept greater risk, but if the term of their financial objectives is shorter, investment portfolios should be structured less risky.
Income: If you receive an income from your investment, it should be structured more conservative with less risk. If you are not receiving an income at the moment, but plan to do so in future, you can decide to pursue a higher return till you need the income. When this happens, the investment could be restructured to reflect the new situation.
Investment experience: Investors with little investment experience should be more wary against risk than investors with lots of experience in this regard.
Dependants: Investors with more dependents should be more wary towards risk than those with few dependants.
Health: Healthy investors can handle more risk than unhealthy investors.
Diversification: An investor that already has a well diversified investment portfolio, can accept greater risk with new investments than investors with undiversified portfolios.
Timing: Share investments are normally more risky than some other investments. Investment risk can however be reduced if shares are bought when the economic cycle is on it’s lowest. Risk can also be lowered if investors buy shares of strong well established companies with little debt and healthy balance sheets.
Emotional tolerance:Some people loves the adrenaline rush in going for high returns, with no regard to the risk. They are emotionally capable of doing it this way. For other, it is a nightmare if their investment fall by a single percentage point. One should therefore know how you will respond to sudden capital depreciation.

Summary

One’s view on risk forms an extremely important element in investment planning. It is as irresponsible to take unnecessary risks as it is to be satisfied with a low return on your money. However, to pursue higher return, goes with the responsibility to research the investment opportunity thoroughly before parting with your money.

Dr. Manus J. Moolman is the CEO of My Wealth and has done extensive research on investing strategies. My Wealth is dedicated to advising anyone from average every people to professionals to choose the best investment for their risk profile.

Want to contact us? Visit our website at: http://www.myebroker.info/

Warren Buffett, a popular investor and one of the world’s wealthiest people once said: “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

And you can have your spot under the shade too – through careful and prolific investments.

Though the current economic conditions may still seem unstable, the benefits of investing rings true in any market, and in any time.

Making investments means putting your money in something that would make it grow. Simply put, it’s also equivalent to making your hard-earned money work for you. Unlike saving your money in a bank, investing is focused more on getting returns.

Starting to invest though, is more than just about having the money. It is not just about knowing where to concentrate investing either.

First and foremost, it is about strategizing. Know what your objectives are – is it for education, retirement or business? According to Robert Kiyosaki, it can also be for three reasons: to be secure, to be comfortable, or to be rich. Whichever it is, your objectives would be your primary guide in building your investment portfolio.

Investing is not about random allocations or deciding based on popularity lists. You should choose your investments carefully, and go specifically with what works for your financial goals. Warren Buffett’s investment portfolio isn’t exactly what you would call an ‘all-star cast’, but it works really well for him.

Remember as well that when you invest your money, you look at it as being a part-owner of a company. You become part of its development and you benefit from its growth. Understand as well, that the world’s top investors didn’t get rich just by putting some money aside to let it multiply. Monitor your investments, and analyze their movements.

Investing is also about timing, and taking calculated risks. There may be instances that you have to hold off on putting in more money into an investment or you may have to completely let go (selling) of it. Either way, these are part and parcel of the process of investing.

And in comparison to savings accounts, your diversified investments offer both short and long-term financial benefits. It gives you the security of having an ‘emergency fund’ that you can take out of when necessary, and still maintain growth. It also allows you to widen your horizon when it comes to future plans.

More importantly investing also helps you lay a solid foundation for your family’s financial stability, and a comfortable retirement for yourself.

Sharlene Mercier of SoHo Realty is a licensed real estate professional with over a decade of experience, who’s dedicated to guiding you through the real estate process.

For more information, please visit our website at http://www.sohorealty.net

What a Real Estate Investment Program’s Passive Income Does for You

Let’s talk about what a real estate investment program’s passive income does for you and what you’ll see in year one verses year ten.

A real estate investment program is a great vehicle for creating passive income that increases with every year because all the work that goes into the set up and maintenance of the system is managed by the program and is paid for out of your monthly rental income.

Even after paying all the monthly expenses from your real estate investment a cash flow will continue to grow from year to year just from having rent and increasing those rents. So even if you don’t take into account tax benefits, the growing cash flow of passive rental income makes a real estate investment program an ideal way to secure future income that will keep on growing.

Let’s take a look. When you start off in year one your monthly cash flow will be $200 or more a month. In order to qualify for our real estate investment program, all of our properties are guaranteed to have a cash flow of at least $200 a month. So what that means is, with a property that brings in $100 a month in rental income, total expenses, including mortgage payment and property management, would equal $800 a month. Therefore, your total cash flow is $200 a month. Now this is actually $200 plus a month because a property must have a minimum of $200 a month cash flow or it doesn’t qualify for our program. So $200 a month above expenses is typical and many are $250 to $300 a month. Now this is year one.

Let’s just take it to year five. In real estate, when you rent, do you expect rents to go up or go down? You expect rents to go up. Just like death and taxes, the one thing guaranteed to go back up is your rent. So, in five years, let’s just say rent has gone up $25 a year. Which is not a huge rent increase. So in five years, you’re looking at an income of $1125, while your total expenses are still $800 dollars. And why is that? It is because you have a thirty year mortgage. Your principle, interest, taxes and insurance are all going to be the same. That doesn’t change; It’s a fixed cost now. So the only difference here is that you’ve increased your cash flow by $125 a month.

Just by increasing the rent $25 a year, you’ve increased your cash flow to $325 a month, which is an increase of approximately 60 percent of real cash flow in your pocket. Now, imagine doing this more than once. Imagine having four to six properties. This would be a monthly increase of $1600 to almost $2000 a month for you. You can see what the difference in just year 5 this is going to do for you. By year ten this would be almost $500 a month in monthly income just for one property. That is a tidy nest egg of almost $5,500 additional income dollars a year without working harder for it. Using a real estate investment program to establish future passive income is a smart investment and working smarter, not harder is what passive income is all about.

Investing isn’t just about heading to Wall Street anymore. Today, there are so many different investment opportunities that it can actually boggle the mind. While it’s certainly out of some price ranges, reviewing a bit of information could help you see that investing in hydro-power is a good option for your investment dollars. There are plenty of reasons to think about doing so, and few drawbacks. If you’re serious about investing then you may want to look beyond just buying stock in a company and consider the benefits of investing in this energy source. It may very well manage to surprise you.

Hydro-power provides over twenty percent of the world’s energy, and makes up seventy percent of the renewable energy generated in America. While wind and solar are certainly being looked at, the fact is that this source of energy has been around for decades and investing in wisely into this market has been one of the most profitable moves major investors can make. The reasons are obvious when you think about it. Nearly everyone in the nation uses electricity, and a good portion of that energy – particularly in rural areas – comes from hydro plants and dams. Few investing opportunities can deliver the same level of dependable returns that you’ll get from investing in hydro-power.

There’s another reason that investing in hydro-power makes sense beyond just the profitability. Simply put, there’s a huge push today to ‘go green’. While this source of energy has been around for years, the fact is that simply investing into this source can help your organization look even better in the public eye. You’ll show that you’re serious about the planet and about our place in it when you invest in green energy, and that can go a long way towards improving public image. You’ll get a boost in your bank account and a boost in image, all from making a smart investment.

Of course, investing in this market usually isn’t cheap. You may be able to make some small purchases but to accomplish anything of major consequence you’ll have to make a serious effort. But few things can be as profitable as this investment, and as oil restrictions keep tightening there’s never been a better time to look into alternative energy investments. Wind and solar are great, but hydro-power is a proven commodity. Placing your cash into it is a smart move that very few people will end up regretting. Take the time to take a closer look and you’ll likely come to the same realization.

Let Inquest advise you the best path to invest in the market with confidence.

Having some amount of savings gives you a good level of security given the turbulence in the financial markets and in many of the world’s economies. However, the uncertainty will inevitably affect you, your choices and perhaps your money in one way or another. That is why you have to be extremely careful and ensure that you will make smart investment decisions. This should minimize risks and provide for good returns.

Adopt an investment plan especially tailored for your needs. You know your spending habits best and what major expenditure you will have in the near future. You have a precise idea about your income and the value of the assets that you have. This should be enough to help you come up with a plan for your investments.

Diversify the assets that you are holding. This is particularly applicable to financial products. This is the most effective method for minimizing risk so you should definitely use it. However, given the shaky markets at present, you have to be extremely careful about the choice of stocks and bonds. In general, government bonds were considered to have the lowest risk for investors. However, with the recent events in Europe – more countries becoming unable to repay their debts – this is not necessarily the case. Experts recommend that you put more time and effort in research and in managing your portfolio. Holding stocks and bonds in the ling term is no longer considered a low-risk strategy with good returns.

Be realistic in your expectations and do not increase risk too much. The reality is that you can expect between 5% and 10% return on your investment when keeping risk low. For many people this seems insufficient. However, increasing the risk is certainly not recommended given the extremely shaky markets that are affected by literally every rumor.

Do not mix investment and personal affairs. Lending money to friends and investing in a relative’s business may seem good ideas when you have relative financial stability. However, these are the riskiest of investment decisions even in a stable and well-performing economy, according to experts. Avoid them if you do not want to lose money.

Use the services of a financial advisor, but always take the major decisions yourself. An experienced professional should help you come up with an investment plan suitable for your needs and assist you in starting and managing a portfolio. However, many advisors seem to offer things that are too good to be true. That is why you should always evaluate each proposal carefully before making a decision.

As investors, you are concerned about the outlook of the economy. You mostly rely on yield curve data to provide you awareness on the activities in the economy and the changes in interest rates. The yield curve’s slope is among the best indicators of future recessions, inflation and economic growth. By interpreting the slope of the curve you are able to make wise and smart investment decisions. To assure security on your investment you need to be resourceful as well as equipped with tools that will provide you with accurate data.

Imagine a tool that has the capability to provide analysis on all the yield curve’s components. And a tool that will provide you with signs on upcoming recession and economic transition. A tool that will conveniently provide the data that determines the interest rates you pay on your house, cars and boats. These tools exist and you can find and acquire them online.

Numerous yield curve data software providers are already being sought after all over the world by traders and sales personnel in various financial institutions. They are well-known with back office and middle office employees and it comes at a reasonable price yet they are an amazingly powerful way to view market trends in financial data or to get open access to reference data using their own add-ons. Various banks, buy side users, financial service providers and hedge funds are the software’s range of users.

You won’t have difficulty anymore in making a decision on whether to invest in a real estate or not. The slope of the curve will help you in your decision on your investment. Timing is everything. While the economy is experiencing some slow-down which provides negative effects on the current prices of real estates and the yield curve shows you a steepening curve then you’ll know that the prices will increase in the future.

There are sites that offer yield curve data software that have features that can aid in your financial decision-making. You can have a clear view on the bond market’s levels of inflation, economic activity and interest rates. We are living in a very competitive market so we’ll need an advance, quick and effective tool that can quickly provide us with accurate data that can aid us in making investment decisions. These tools can help us react faster to market changes and acquire an advantage over our competitors. By predicting future recessions and growth you can make better decisions on your investments.

My experiences in trading and investments have taught me how vital data and information are in providing higher success in my transactions. I believe that we should be constantly updated in the changes in the market in order to react faster. I wish to inform everyone how effective yield curve data in providing us forecast on future recession and growth. I want to share about the tools I used offered at Derivative Trading System that helped with my analysis of the yield curve data.

The recent Arab Spring shook the Middle East. However, the UAE remains stable and safe, with business activities at a normal level. There as been no such uprising in the region and the country has become a default refuge from unrest. These aspects lead to a trend slightly different then the usual: more traffic from Arab countries to the UAE and more business. Europe’s growing sovereign-debt crisis and the unstable US economy could well be the cause of this “regionalization” – Arabs investing their petrol dollars in other Arab countries, the UAE being the center of such activity.

Dubai has seen none of the violence that has destabilized the region. Its hotel, retail and residential real estate sectors are enjoying a boost from general stability of the country. According to Reuters, anecdotal evidence suggests that Arabs, middle class and above, are buying Dubai property to hedge their risks in other countries.

Similarly in India, a weaker currency is encouraging Indian expatriates in the Gulf to invest in domestic markets. According to the Economic Times, non-resident Indians, especially those living in the Gulf, have invested about Rs 75 crore in August and September of this year in the region, the largest pay-in in over 2 and a half years.

Recently, Russell Investments classified the UAE as an emerging market as opposed to the frontier market designation given by MSCI (Morgan Stanley Capital International) and Standard and Poor’s. The UAE is the first Gulf Cooperation Council (GCC) country to graduate from frontier to emerging market status within the Russell Global Index series. The market in the UAE seems to be welcoming investments. In addition, articles say that those willing to invest in the UAE, have a longer term approach to investing and are not phased by short-term market fluctuations. This clearly demonstrates the relatively higher comparative value of investing in the UAE over other parts of the world.

According to the UAE Investor Attitudes Index as published in UAE daily – The National, about 60 per cent of the investors surveyed said it was a good time to put money in gold, and half said fixed-rate bank deposits were smart investments. The survey was based on interviews with over 750 people in the UAE, who are market investors, majority whom were expatriates. Dubai’s roar and rumble has always been connected to the real estate market. There is still over-supply in the market and investors seem to not want to invest heavily in real estate. Though there are still a number of challenges to overcome, it seems stability is on its way up.

Supporting that, Kabir Mulchandani, UAE real estate veteran says that pessimism is just in people’s minds. “I transfer property every day. My optimism comes from real demand and real purchasers with real money. I see a steady growth in prices until 2014 but then I see a significant jump between 2014 and 2016. Then probably in 2017 and 2018, when suppliers are against us to come back, hopefully we will have some stabilization.”

Once pending infrastructure projects are near completion, more investors are likely to look into investing in the property market which is certainly taking an upturn. According to a recent survey of the industry by PricewaterhouseCoopers (PwC) and INSEAD Abu Dhabi, the private equity industry in the Middle East and North Africa (MENA) has emerged stronger from the global financial crisis and the recent political turmoil in the region. In addition, the survey showed the small-and medium-sized enterprises (SMEs) sector has emerged as new investment target for the regional private equity players.

All in all, there seem to be enough good reasons to invest in the UAE in the long-term. The rest, time will tell!

Kabir Mulchandani Skai Holdings Dubai-UAE

My writings are to share my thoughts and opinions, and to engage in a conversation about the property market, entrepreneurship, new books and new ideas about how to change things for the better.

The whole idea behind making financial investments is to get a good return on your investment. Making smart investments should be your goal. Not researching your options can possibly be the biggest mistake you can make. You want to learn as much as you can understand. Taking the time to find the most lucrative investment strategy can make the difference between you losing or winning.

How you choose to invest your money will most likely be based on how much risk you’re willing to take. As with all investment endeavors, there is a loss risk. Having a good financial plan from the start is essential. Researching the various investment strategies can help you figure out what you feel safest with.

Buy Long

Buying stock long is not a lucrative investment strategy. With this particular strategy, you can only lose what you have put into it. It may sound good to know that it offers minimal risk; it also offers the least return.

Buy short, sell long

This strategy has a little bit of risk attached to it but can be lucrative if it’s used properly. With this particular type of investment, the assets or securities that are being sold have been borrowed from a third party; intending on buying the same assets later on. The seller unloads the assets at a higher price. When the price of the assets drops, is when they pay the original owner. The seller is simply profiting from the drop in price. This strategy is profitable as long as the drop in price is substantial enough.
Buy and Hold

A passive technique, the “buy and hold” can be considered a lucrative investment strategy. The investor buys the stock and holds onto it, no matter what happens with the market. Equities to yield a higher return than assets do. This strategy is also beneficial tax wise because long term investments are taxed at a lower rate than short term investments.

Set triggers

This is not an investment technique but can also be considered a lucrative investment strategy. Set triggers for yourself. For example, a downturn in the market can be used as a trigger to buy stock that may have been too rich for your blood before. This strategy can aid in you acquiring very lucrative assets. However, you should set guidelines and limits and be sure to stick to them.

These are only four investment strategies among many. Only a professional truly understands how any of them work. Before you make any investment decisions, it would be wise to seek counsel. Let them guide you on how to make your money grow. Keep in mind however, that it is your money being invested. Just because they recommend it, doesn’t mean you have to do it if you’re uncomfortable with their suggestions.

Finding a lucrative investment strategy is a key factor in making your investments worth anything. The idea is to yield a return that is noticeable. As was stated before, with any investment there is risk. The right strategy should decrease the risk factor for you.

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With high inflation, we need to take control of our finance and plan for our futures nowadays. Living within one means reduce the risk of debt but is it sufficient to secure your future? Why do we need to be financially free and have financial control?

We need to invest to build up a source of income, which will continue to grow and be able to provide a secure future for ourselves and possibly our next generation.

The reasons to invest include:

1. Let your money work for you: Learn to save money and invest the rest so that it grows even when you are sleeping.
2. Cope with inflation: If you have wise investment that surpasses the inflation rate, you have a sound future finances. You have no worries of the prices of dairy expenses.
3. Business owner: Business needs to invest, whether small or big small sized business. Investing not only grow the capital and expand the business but also teaches one to become a successful businessman.
4. Dependents: Money generated from investment can help to pay bills, buy accessories and pay expenses for holidays.
5. Education: Education fee is increasing with inflation. Investing in an education plan helps to support someone’s studies.
6. Assurance: By making long term investment, you can be assured of sufficient money if you plan to retire. Start investing young and you can have a higher return before you retire.
7. Attaining things you want: The returns from investment can be used to get those things that you dream off, such as cars, houses, etc.

Investment return has to be a source of money unrelated to our regular wages, but money from income producing assets. We have to invest in income producing assets so that they will grow and we can be financially independent.

The investment risk level that you take depends on your needs. If you are interested to make fast money, you would be interested in investment which involves high risk. If your plan is for retirement, you would prefer something that is safer and can grow over time.

The main objective in investing is to create wealth and security with time. It is always impossible to earn an income as one will want to retire. Hence, smart investment helps to insure your financial future. The earlier you gain the investment knowledge, the more successful you will be. Longer time in investment means higher return and you can retire earlier.

To get more free tips and advice on making money and business opportunities Click here to download my free ebook Or visit my website @ www.savemoneyoffer.com

You have likely heard the old saying, ‘Don’t put all your eggs in one basket.’ This summarizes the entire philosophy of a diversified investment portfolio. The idea is to spread out the risk. You do not want to have 100% of your investment capital riding on a single investment. For example, you would not want to have your entire investment portfolio allocated to commodities. This might represent very slow growth and/or improper risk allocation. Likewise, you would not invest 100% of your capital into penny stocks that may go up and down in value just as quickly as the wind blows. Maintaining a diversified investment account will allow you to reap the benefits of multiple investments while at the same time protecting yourself from a single catastrophic loss if one of the investments happens to tumble.

Stock Market Investing Is A Fundamental Element Of A Diversified Portfolio

The United States stock market has increased in value, on average, about 11% since the 1920’s. This includes the time of the Great Depression, the stock market dive of 1987 and the dot-com crash of more modern times. Over time, the stock market increases in value. Those who invest in the stock market are in a position to benefit from this slow increase in value. Those who invest for the long-term are most able to capitalize on the growth of the stock market. It is a fundamentally sound investment when done properly. There are number of ways to invest in the stock market including mutual funds, spider funds, and stock indexes, to name just at few of the methods. Individual stock purchases can also be profitable if done correctly. As always, talk with an investment adviser about your options and how stock investment fits into your overall game plan.

Penny Stock

A more specific type of stock market investing revolves around penny stocks. These are stocks that have a small price tag and potentially a significant return. However, the potential also exists for significant losses if prices go against you. For this reason, penny stocks are generally considered to be a risky investment and are not suitable for all investors. The appeal of the penny stock is to ‘find the next Walmart.’ What this means is that the investor (or perhaps in this case the speculator) is looking to buy a company stock for a very small amount of money (perhaps just a few pennies) in the hopes that it may soar to be worth several dollars per share in the future. This is generally the fundamental game plan with a penny stock.

Mutual Funds Investing

Mutual fund investing is another one of the ways to invest in the stock market. Mutual fund exist for the purpose of spreading out risk. By their very nature they are designed to help increase overall portfolio returns while at the same time reducing overall risk to investment capital. The way this is achieved is to spread out the mutual funds overall portfolio into a number of different stocks. This diversification can help with risk reduction. People enjoy investing mutual funds because it allows them the opportunity to invest in a number of different companies all at the same time. It also allows for their money to be managed by a skilled professionals so that as individuals they do not have to do the decision making themselves. For these reasons it is easy to see why mutual funds have a very broad appeal and are one of the most popular investment opportunities available. Bear in mind that just because a mutual fund has done well in the past does not necessarily mean that they will continue to do well in the future. This is one of the challenges common to mutual funds.

Value Investing

Value investing is generally a broad definition of investing done by purchasing companies that have fundamentally sound value. In other words, a company that displays consistent earnings and offers a good value for the price of the shares offered would represent a company fitting into the category of a value investment. A number of fundamental investors organize their portfolios according to a value investing approach. Buying stocks that are of good value can represent a fundamentally sound investment strategy.

Bonds Investing

When you talk about bonds investing you generally think of safe and secure investments, and for good reason. Bonds generally represent one of the safest investments available. A bond is something like a promissory note. A company or government might issue a bond in order to raise funds for a particular project. When raising the funds, the entity will offer a bond containing a specific investment return which is to be repaid to the investor according to the term and length of the bond. It is something like lending money to a company and then giving you a specific return on your money. This can represent one of the safest forms of investments and likewise is popular for many people.

Commodities Investing

Commodities can represent one of the more confusing types of options available for investors. It is best to consult with skilled professionals and financial advisers when it comes to the topics of commodities. Commodities can be viewed as both a high risk opportunity as well as a safe and secure opportunity for financial returns. It depends on the approach first and foremost. Many investors view commodities as a hedge against their other investments-designed to provide a counter-cyclical approach to investing that can help diversify overall risk and returns.

Consult With An Advisor

Consulting with the skilled investment adviser is one of the best options that any investor can take before allocating their money. It is a good idea to diversify, but if the diversification is done without a systematic game plan than the results can be less than spectacular. A solid game plan, rolled out over a long period of time can be one of the best approach is to systematic, long-term investing that will yield fruitful financial returns. Long-term investing should be the goal of almost every investor looking to double and triple their capital in the years ahead. Begin first by talking with your investment adviser about a systematic game plan for your investment blueprint.

For more great tips and expert advice on investing for a bright and secure future, please visit us at http://www.elementaryinvesting.com.