Investment Articles

People who care about their future and the future of their family, care about well-being and stability always pay a great attention to investments. As you know there is a rather wade range of investment options to choose from, such as stocks, bonds, precious metals and so on. In this article you will find some useful recommendations on investing in precious metal since this type of investing is a really popular one.

But, before providing you with the advices there is a need to clarify why this investment option is so frequently preferred. You see, the point is that people choose this way because it is one of the safest and the one that promises stability and increasing demand. Also, it should be specified that there are many ways of investing in bullion, for example, buying coins, bullions and bars.

And now let’s come to some useful recommendations:

1. First of all, you should find out as more as possible about what you are going to invest in. Only after a thorough research is made, you are ready to make your final decision.

2. Before buying coins or bullions it is recommended to shop around to find the best deal. Keep in mind that rates offered online, offline and by dealers, usually differ.

3. It goes without saying that gold is the most popular bullion investment choice. And if this is your decision, you need to keep in mind that your deposit box is really safe. By the way, this advice works for other “bullion” type metals too.

4. It is also important to be knowledgeable about the look of bars and coins due to the fact even the slightest imperfection can seriously influence the price.

5. It is not recommended to make investments into bullions only, because it is always wise to diversify your investment portfolio,

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There are two types of dud investments:

Absolute rubbish that was bad from the start – possibly even fraudulent (there are always a few of those around).
Investments that are perfectly good in principle but, for one reason or another, perform badly for a time.

The answer to dealing with the second type – investments that don’t do so well for a while – is to make sure you don’t have all your eggs in that one basket. That way, while one does badly for a while, the others should hold your portfolio steady until the badly-performing one picks itself up (or doesn’t in some cases). Many stock market investments will go up and down over the years but if you have invested in a nice cheap tracker fund, your money is likely to increase gradually over time if you leave it for long enough.

As for the first type, sadly, there’s no fail-safe way to spot a loser. If there were then wealth would be much more evenly distributed around the world. However, there are some pretty sound principles to keep in mind that will at least protect you from the very worst ‘investments’ and help you mitigate the effects of the not-so-good ones. Here are my top tips for protecting yourself from the worst ones:

Always keep in mind that ‘if it sounds too good to be true it probably is’ when you read or hear of amazing, easy-money schemes that are ‘guaranteed’ to make you rich.
The more the hype, the more you should worry. Big ads on radio, on the Net or even through word-of-mouth usually mean a dodgy idea that you should avoid.
Don’t go to investment seminars that are run by individuals or companies with a vested interest. Property seminars run by development syndicates who want to get you to invest in their portfolios, investment seminars run by fund managers or people trying to get you to sign up for an expensive series of investment classes should be avoided totally. These are just sales events aimed to get you into a closed room so that they can brain-wash you into handing over your cash.
Ignore all ‘tips’ from friends down the pub, your brother-in-law’s dodgy mate, someone your mum met at the hairdressers or even your best friend who should know better. If you’re really interested in what they are suggesting then do your own research, talk to people who genuinely know and then make up your mind.
Anything that promises returns of more than 10% a year (particularly those that guarantee it) should be approached with extreme caution. They are highly likely to be bogus. It is certainly possible to achieve much more than 10% a year with some investments – Warren Buffet’s company Berkshire Hathaway made huge average annual gains of 20.3 % between 1965 and 2008. However, nine times out of ten, anyone trying to sell you a product that they say will bring in more than 10% or more per year is a liar and a fraudster.
Watch out for new investments connected to whatever is the fashionable asset class at the moment. For example, during the property boom all sorts of funds and seminars connected to residential and commercial buildings were peddled and far too many punters lost a whole lot of cash through them.
Pretty much anything that your bank is trying to sell you should be regarded with the utmost suspicion. This goes for all financial products, not just investments. If your bank tries to get you in for a ‘consultation’ always say no. It’s simply a sales talk and if you are naive enough to go, be prepared to come out having had your pocket picked.
Any schemes you find on the Web where there’s one long web-page with big headlines blaring “I made $30,000 in one week!” or similar. These are bogus and laughable at best.
Anything that is suggested to you over the phone by a cold-caller from a so-called investment company with a ‘dead-cert’ investment product. This is likely to be a boiler room scam so if you get one of these calls just put the phone down, or, better still, tell them to wait a moment, put the receiver down on the table and go off to make yourself a cup of tea, wash the dishes, do the ironing, read a book, get married and do whatever you like until the caller realises that he’s been had.

Jasmine Birtles is the founder of the money-making and money-saving website http://www.moneymagpie.com

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Most people enter the investment arena thinking that “Risk” is a board game they played in college. Today, I would guess that the majority of investors have never owned an individual share of common stock or a Municipal Bond.

The popularity of investment products has heightened the risk for all investors and has indirectly led to many of the policy errors that threaten both capitalism and the economic fabric of America. Market prices are increasingly and inappropriately influenced by decision-making based only on the derivatives that contain them.

Few people consider the investment risk associated with public policy decisions. Product investors and derivative speculators participate in less personal markets, where it is more difficult to connect the dots between their personal financial interests and their political alignments.

So in a very real sense, investors have to deal with public policy risk every bit as much as they need to analyze the risks associated with the securities and other financial products they hold in their portfolios — complicated, but it is doable.

Apart from these important peripheral considerations, the risk of loss in any equity investment is generally greater than the risk of loss in any debt related instrument. The potential reward from each type is just the opposite, and that’s where all the excitement begins.

Do we risk more for the chance of a greater return, or do we risk less and try to preserve our investment capital? Keeping in mind that investment capital is a measure of cost, not of market value, and that the only real loss is a realized loss.

Typically, the older the investor, the more boring or income focused the portfolio should be — minimizing the overall level of risk. But it’s difficult to actively minimize or manage your risk in the “open end” mutual fund or passively managed ETF marketplaces.

Risk minimization requires the identification of what’s inside a portfolio. Risk control requires decision-making by the owner of the investment assets. Risk management requires a selection process from a universe of securities that meet a known set of qualitative standards.

Product owners assume the added “fear and greed” risk of the general population, while their fund mangers stand aside and mumble about the opportunities lost in either direction.

Without a risk sensitive menu to select from, 401(k) participants need to minimize risk by: (a) avoiding the poor diversification that may be a requirement of their plan, and (b) developing outside income portfolios with any investable income above the employer matching contribution.

The first and most important management action focused on risk minimization in any “program” is the development of an asset allocation plan. The plan separates “liquid” investment assets into two buckets (Equity and Income) based on cost, not market value. No portfolio should have less than 30% in the income bucket — no ifs, ands, or buts.

And no investment plan should be developed “tax” or “cost” first. Risk minimization comes first, and then tax minimization if possible. Finally, transaction cost minimization can be considered if you are qualified to run your program yourself.

A cost based asset allocation approach (Working Capital Model) assures growing levels of “base income” throughout the portfolio development process and, possibly, into retirement. Income growth, by the way, is the only real hedge against that other economic risk, inflation — a buying power problem that has nothing to do with the market value of the income producing assets.

Minimizing investment risk is done best through the use of disciplined sets of rules for the various operations involved in managing a portfolio. Strict rules need to be developed for security selection, three types of diversification, income production, and for profit taking.

Forget the Wall Street “I-can-fix-that” product menagerie. We’re not interested in massaging our market value to take the sting out of cyclical market value changes. Our plan is to take advantage of these changes as they unwind around us over time, and when they occur unexpectedly, causing short-term disruptions and dislocations.

In the securities markets (stocks and bonds), the real risk of loss can be minimized without products and futures speculations, without commodities and hedge funds, and without the ageda that most people experience throughout their investment lifetimes.

The old fashioned principles of investing: Quality, Diversification, and Income, plus disciplined, targeted, Profit Taking are the only hedges an investment portfolio needs to assure long-term success. Conveniently, the QDI+PT applies equally well to both classes of investment securities.

“Q” is for quality. If you study the long-term behavior of Investment Grade Value Stocks, and high quality income CEFs, you’ll discover that they hedge themselves quite effectively.

Risk is wrung out of portfolios by investing only in S & P, B+ or better rated, dividend paying, and historically profitable companies and then only when their equity prices are well below their 52-week highs.

“D” is for diversification. Absolutely never allow any position in your portfolio to exceed 5% of total portfolio working capital (i.e., the total cost basis) and never start a position anywhere near maximum exposure. You want to be able to buy more at lower prices.

Similar diversification rules apply to industry exposure and global diversification through the use of the mainly world class companies in the investment grade quality categories.

“I” is for income. Own no security that does not pay regular, dependable, dividends or interest. Regular and growing dividends are a quality indicator in equities. In the income “bucket”, seek out above average yields while avoiding those that seem either too high or two low.

Managed closed end funds do it best and provide easy “PT” and “buy more” opportunities. Buy established CEFs with long term “income” (not ROC) payment records.

“PT” is for profit taking. Absolutely always smile and take your profits willingly, net/net 7% to 10% (dependent upon available reinvestment possibilities and security class), and never, ever, look back.

Trading this same body of securities, again and again, has been shown to sustain growth of capital and income consistently in a relatively low risk environment.

Google Part III: Ten Time Tested Risk Minimization Strategies

Steve Selengut
http://www.sancoservices.com
http://www.valuestockbuylistprogram.com
Professional Portfolio Management since 1979
Author of: “The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read”, and “A Millionaire’s Secret Investment Strategy”

Many of you are expecting me to say that now, given the economy, the administration, unemployment and other factors, it is a high risk time to invest. The opposite is actually true – now is a relatively low risk time to invest in quality assets and here’s why:

There is a significant difference between feeling safe and actually being safe. One can feel safe because one actually is safe, but one can also feel safe by ignoring facts, pursuing a completely selfish agenda, from lack of careful thinking and consideration, as a result of overrun emotions, sickness, and/or lack of rest or nourishment. One can only be safe when one is actually safe – it’s the only option as it pertains to the latter.

This is important because many people feel safe when they are doing the same thing(s) lots of other people are also doing. Whether or not the crowd is actually correct, “there is safety in numbers” goes the old saying. While this is true in football and armed conflict, it is largely false when it comes to investing. The riskiest time to invest is when the majority thinks it’s safe. The safest time to invest is when the majority considers conditions too risky.

In other words, the times when investing safety exists to the greatest extent is not when the most people are actually investing. Consequently when one sees the markets rising every day by greater and greater margins (obviously not happening right now) that is the most perilous time to invest. When most people are worried, well that’s a pretty good sign of safety.

The best time, the lowest risk point, and the safest time to invest in quality companies is when there is a tremendous amount of worry and uncertainty – in other words when most people FEEL UNSAFE.

Unemployment is currently unusually high. Is that normal or abnormal? Obviously abnormally high. If it were normal what would the economy look like? Substantially better – because more people would be buying things, more people would be investing, etc. Since things run in cycles, what is the next phase in the cycle of unemployment? The next phase is improvement. How does that impact investments? Very positively.

Yes, but what about inflation? Aren’t we going to soon have high inflation? We only have inflation when too many people are spending too much money chasing too few goods and services. How can we have high inflation when so many people are not working? We can’t. And even if we do have high inflation, this condition is excellent for some investments that just might surprise you.

What about the administration? In every situation there are opportunities to make money. This will be the case regardless of which party is in office.

What about interest rates? While interest rates are likely to rise from the current rate of essentially zero, rates are going to remain low until we have inflation, and even then, given the amount of government debt in the U.S., interest rates are just as likely to stay abnormally low as anything else, because it saves the government vast amounts of interest payments.

Millions of people loose money in the investment markets for no other reason than they invest when they feel safe, instead of investing when they are safe. What has been your pattern?

Have you acted on nonsensical rules like dollar cost averaging and asset allocation which have you investing in the wrong things, at the wrong times? These principles have you investing completely off cycle to when it is actually safe to invest. Isn’t it about time that you got on cycle and made money in your investments?

Get started investing now before the economy completely rights itself and it is too late.

Introduction

It is with mixed blessings and a heart of gratitude to God Almighty that I introduce you to the stock market; where the rich make their millions. Once again, you are welcome.

Investment is very important in the life of every human who wants to be balanced in life; retire earlier than expected, own a fortune etc. you might have heard or come across cases of some individuals who were relieved of one financial problem or the other through their investment.

There are many ways to invest your money of which some are:

• The stock market
• Real estate
• Bond
• Mutual fund
• Money market etc.

Our discussion shall focus mainly on the stock market. The stock market has a wild range of money making opportunities wrapped up in it waiting to be exploited. These we shall discuss in pages ahead.

The Nigerian Stock Exchange

Due to the findings of many researchers, stock analysts, institutional investors, fund managers etc. the Nigerian stock exchange has been defined in many ways. My aim is for you to understand what the name simply means. Going by the name; “the Nigerian stock market”. It is a place where units of shares of companies in Nigeria (or branch in Nigeria) are being exchanged for money.

Stock investment

Stock investment really means giving your money to a company and holding some part of that company (shares) in view of making profit.

The profit I mean is your own profit based on how good the company you invested in does after some time.

Stock and shares

These words; stock and shares, are used interchangeably to mean the same thing. But it should be noted here that all shares are stocks but not all stocks are shares.

Shares: unit(s) of a company held by you according to the amount you lent the company. If the company is making profit and their price is increasing on the exchange, you also are making profit. There is no time agreement between you and the company. You can sell at any time and make gain/loss according to the price the stock is going at the exchange.

Stocks: buying in bulk. e.g. 60%, 50%, of the entire number of shares of the company at an agreed return and an agreed time.

follow up post at http://www.learnstockmarketonline.blogspot.com

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

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

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

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

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

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

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

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

Investment is the commitment of money or capital to buy financial instruments or other assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument. Investment is a term normally used in the fields of economics, business management and finance. Your focus in investing is on return and can run the spectrum from conservative to very belligerent in terms of risk.

The best way to defend your stock investments is to own a broad mix of large and small companies and foreign and domestic issues. Business risk is, maybe, the most familiar and easily understood. The main technique for reducing investment risk is diversification. Thoughtful investment selections that meet your goals and risk profile keep individual stock and bond risks at a suitable level.

Many of the wealthiest people in the world owe their fortunes to different types of residual income – from stocks and bonds to investment trusts, real estate and possessions. Technical selection assumes that security prices typically move in identifiable patterns that can be determined through chart techniques to extrapolate trends.

In these difficult days when the soundness of our financial system has come into question, it is critical to find the optimum investment strategies which will guard and grow your wealth. I shall let you in on a little secret about investing; it is not nearly as hard as you think. The first thing you require to do is realize that there is no “perfect” way or time for you to start.

Last year was a very difficult one for Russia. The currency depreciated, GDP contracted, and the Treasury ran the budget with a deficit and depleted the Reserve Fund by more than half. Unsurprisingly, since then and up until recently, the consensus outlook for Russia ranged from gloomy to cautious. My interpretation of what was occurring in the Russian economy is a bit different – since early 2009, after the government and the Central Bank devalued the currency and brought the ruble to more of an equilibrium level, money markets began recovering. In previous notes, I mentioned that the slow devaluation orchestrated by the Central Bank may have helped a few major companies and banks avoid financial problems, but this also destabilized money markets and created problems for the entire economy, as by printing rubles and lending them to select banks (while gradually devaluing the currency) the Central Bank encouraged speculation against the ruble. Money stopped circulating and began flowing directly to the forex market. After the Central Bank was finished with these exercises, the situation gradually stabilized, so that money demand started to rise and the economy began recovering.

That said, my view was always that the bottom was reached in January 2009 (or more broadly, in 1Q09) and thereafter m-o-m (and Q-o-Q) recovery was sustainable (even though y-o-y numbers remained negative for some time due to the base effect – as cheap credit artificially inflated domestic demand in 2006-08). The most recent industrial output figures fully confirm this view – industry grew by more than 10% y-o-y in 5m10, consumption eventually delivered positive y-o-y growth, and investment also entered positive growth territory.

It is remarkable how Russia’s performance this year looks healthier than that in many other countries, as economic expansion is being driven largely by private money since public spending was not growing y-o-y in early 2010 and is not supposed to grow significantly for the year as a whole. The government’s recent decision (approved by the Duma last week) to amend the 2010 budget and increase expenditures by over R300 bln does not alter this view much, even though it raises concerns about the possibility of future amendments. Indeed, the fact that the economy delivered very strong results in 1H10 without any additional government stimulus means that additional government spending is (and always was) useless, if not harmful, as it only helped maintain high inflation and never stimulated growth, while this year inflation decelerated to below 6%.

Overall, the Russian economy appeared rather flexible and showed a strong ability to grow after the government was forced to scale back its intervention. Firm growth this year is being driven by organic, not overheated, domestic demand, so that the system seems able to find a sort of balance in various respects, such as an equilibrium exchange rate, investment/GDP ratio and rate of growth in consumption. In the past, the government always tried to pull the system out of this equilibrium, thereby creating various distortions.

Meanwhile, the Russian government was not alone in its efforts to generate imbalances – other governments have done similar things while increasing their economic intervention over the past decade (not to mention some of the European governments or the US administration, which slashed rates after 2001 and expanded the budget deficit). My view has always been that governments are primarily to blame for the current global economic turmoil. The private sector simply responded organically to the populist moves that regulators in the advanced economies exercised over the past decade. Economic populism in the advanced economies combined with a number of politically motivated decisions was the source of the current crisis. Cheap money encouraged excessive risk taking, while redistribution of wealth in the EU reduced the competitiveness of the region’s economy. Eventually, excessive spending resulted in excessive borrowing. Increased military spending in major countries also contributed to economic distortions. Debt/GDP ratios in many countries exceeded the “critical” 60% and even climbed to 100% or more. Needless to say, debt service is now becoming a major impediment to growth worldwide.

Despite the very negative media coverage that Russia “enjoyed” last year, the country is largely immune from such problems. The major macroeconomic risk is associated with the excessive dependence of the budget on the oil price – I broached this issue in the past, suggesting that with the break even price of oil staying at around $95/bbl, there is no other way for the government to proceed, apart from containing (ideally cutting) spending. Otherwise, the country enjoys a positive current account surplus, while its budget deficit will stay this year at around 3% of GDP or even less (Finance Minister Alexei Kudrin mentioned that the federal budget deficit was only 2.4% of GDP in 1H10, which is quite encouraging even though still an estimate, as the official budget execution numbers and GDP statistics for 1H10 have yet to be released). The country’s total external debt/GDP ratio last year stayed below 40%, and it will be closer to 30% this year – a very manageable level.

Overall, despite numerous institutional drawbacks, Russia’s macroeconomic conditions look solid and much better compared with all of the former Soviet republics (including the Baltic states). Russia’s GDP per capita was the highest among all of the republics of the former USSR (excluding the Baltics), while its total external debt/GDP ratio (private and public debt) was moderate. Even though GDP per capita in the Baltic states was higher last year, it is clear that this wealth was largely borrowed (another illustration of the geopolitically motivated decision in favor of accelerated accession of those countries to the Eurozone). Unsurprisingly, growth is not expected in these countries this year, while Russia’s GDP per capita will return to more than $10,000 (I expect around $10,600). The relatively low debt/GDP ratio will allow the Russian economy to grow faster compared with many over-indebted countries, including those in the periphery of the Eurozone.

It is remarkable that Russia’s GDP per capita stayed higher than in many other former Soviet countries, despite the fact that Russia for years continued subsidizing countries such as Belarus and Ukraine through discounted energy prices. Only a few countries out of the 15 former Soviet republics were able to increase their GDP per capita in 2009 over the 1991 level. Aside from Russia, this group included energy-rich Kazakhstan, Azerbaijan and Turkmenistan (and even in the case of the last two, the difference was not significant).

The wealthy countries became even wealthier after the breakup of the Soviet Union, while republics with lower income became poorer (again, this refers to the Baltic countries, which had a higher GDP per capita in the USSR and were able to “upgrade” their GDP per capita thanks to borrowing and subsidies from the EU). Even though “upgrades” in Russia and Kazakhstan were based on natural resources, they looked more organic compared with those countries that borrowed extensively and which are now supposed to repay debts that exceed 100% of GDP. Interestingly, the population has fallen by 11-17% in the Baltic countries since 1991, due largely to emigration, which helped inflate per capita GDP. In Russia, the population contracted less, by 4.4%, while in Central Asian countries, populations have risen significantly, which has reduced GDP per capita. Meanwhile, in the entire FSU region, the population contracted by a modest 2%, while dollar-denominated GDP increased by around 1.8%, i.e. both numbers remained essentially unchanged over nearly two decades, while redistribution of income took place.

The data also illustrate who eventually subsidized whom in the past – after the Soviet republics became independent, Russia benefited more with respect to its GDP per capita. From this standpoint, speculation regarding the Kremlin’s intention to spread its influence across the former Soviet republics should take into account the economic costs of such a policy. At a relatively low level of GDP per capita (by international, not regional, standards), it seems as though Russia is unable and unwilling to play the same consolidating role that Germany plays in the Eurozone by redistributing its nearly $200 bln current account surplus across the region.

Jeffrey F. Combs, 54, MBA, a veteran of Wall Street (Morgan, Stanley; Lehman Brothers) has been living and investing in Russia since 1995. He is a frequent speaker at Investment Conferences, and considered to be an authority on the Russian and CIS investment markets.

Investment tips are very important to consider especially for beginners. This is a way of guiding what to do or what kind of investment to choose. With the right basic foundation of knowledge, a beginner can build from there towards a deeper understanding of how to invest and what types of investments they might be interested in, and most importantly how to make the most out of their money.

Most forms of investing involve some form of monetary risk. That being said, it’s important that you invest only the amount that will not hurt you too much if you end up loosing it. It is necessary that you think positively but not to the extent that you assume that after your first investment, you’ll be rich in an instant. That is one of the many mentalities that people have when it comes to investing. Investments can either be risky or risk-free. Greater risk of losses tends to mean greater possibilities of greater gains. The risks and possibilities go hand in hand in risky investments like stock investment. People prefer to invest on stocks because it can give much higher returns compared to other investments. However, if you can’t handle losses, it is best to go with a less risky form of investment, or a risk-free investment vehicle.

Stock investment is just one of so many kinds of investments that you can choose from. You can also invest in businesses outside of the stock market, foreign currencies on the Forex, real estate, annuity payments, and many other things. Whatever investment you prefer, conducting research and gathering information from reliable sources would be of great help; this is called due diligence. It is a must to remember that you have to experience the ups and downs of investing for you to completely understand how it works and learn the perfect strategies so you can advance in your investing abilities, and reduce future losses.

Please read my Hub for more investment tips.

Most of us are impatient when it comes to getting what we want, and this can include everything from our next meal to a significant return on our investments. But is it really realistic to get a big return on a stock market investment or a real estate property we recently purchased? What about all those stories of flipping properties overnight or doing some magical stock trading in order to make a quick buck?

We don’t deny that some have made money quickly on these kinds of investments, but we recommend looking at your investing as a long-term proposition. Let’s take a real estate property as an example. You could, in theory, find a property which is worth quite a bit because of its condition and neighborhood. However, perhaps the seller is desperate to sell because of a family emergency, or maybe the current price of the property is lower than expected because there are some cosmetic issues that you could easily fix.

This may become a profitable property for you, but there are many factors involved that you may not have considered. First of all, you will have to pay the actual cost of upgrading the property. Secondly, you have to factor in all of the closing costs involved including the upfront interest (known as points), the property inspections and appraisals, loan origination fees, and possibly other fees as well. When you factor all these properties, it becomes more difficult to make a quick profit. The real estate market could come crashing down unexpectedly just as it did in the late 2000s.

Of course, if you misjudged the value of the property or the cost of renovations, you might be stuck with a much more expensive project than you had anticipated. You could be scrambling just to break even, or you could make only a small profit after a significant amount of effort.

This is an example that demonstrates why we believe real estate should be viewed as a long-term investment plan. The same could be said about the stock market, however. Many people panic when there is a recession or other crisis that sends stock market values down. There is certainly a time to sell a bad stock, but far too many people panic and sell everything in order to make sure they don’t lose more than they already have. If they were to stay in the game for the long-term, and if they had a well diversified portfolio that would guard against individual losers, they would have a good chance of surviving through the bear markets and eventually making a good profit.

Joshua is an avid researcher and enjoys writing about many topics, including health and fitness, real estate, business, and investing. Please visit his site for more information on plastic binding spines at http://plasticcoilbinding.org today.