Investment Articles

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 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.

If anyone is still holding onto the hope that we are simply in a financial slump and not a full blown recession, it’s time to accept the facts. The economy of the United States and the world in general is is the dumps. Businesses are still failing every day and the housing bubble is a long way away from recovery. But as is often said, from misfortune and disaster comes hope and opportunity. A financial crisis holds many opportunities for those who know how to find them and use them to the best advantage.

Only the most sociopathic among us are happy to take advantage of the suffering of others. But in a financial crisis, recovery often depends on just such action. Don’t think about it in terms of other people’s misfortune but rather in your good luck. Economic recovery depends on new opportunities arising. By doing everything possible to profit from the recession, you are actually helping the population and the economy in general.

Experts agree that the economic recovery depends on the recovery of the housing market. You can help with this while at the same time getting yourself a great deal on a home. Housing prices are at a near all time low when adjusted for inflation. Banks are desperate to remove these toxic properties from the books. To do so they are willing to offer you outstanding deals on price as well as mortgage interest rates. It’s sad that so many people have lost their homes, but the economy first must recover before these people can ever hope to once again own a home. Do your part by putting yourself into a foreclosed home.

Many Americans lost fortunes in the stock market over the last couple of years. Their loss is literally your gain. If you have the liquid capital available to invest, the deals are simply amazing. The stock market will rebound and those who are able to invest now will be the ones who see a huge return on their investment. 25% or higher annual returns on stock market investments are not farfetched.

Consumer products such as cars are also at a near all time bargain. Car manufacturers are suffering to an even greater degree than other sectors of the economy and have received billions in government loans. They are forced to pass along some great deals to consumers. If you are even considering buying a new auto, do it now. The deals are just too good to pass up.

The recession sucks. It’s that simple. But it doesn’t have to mean the end of our economic structure. For those who are still liquid, this economy represents the best opportunities we have seen in several decades. New wealth is waiting to be made and wise investors can turn this situation into something truly spectacular. We are all sad for those who lost so much due to the bad decisions of others, but that doesn’t mean we are destined to suffer in poverty. Turn misfortune into success and take advantage of a downed economy.

For more financial advice from Sally, please visit her blog.

If you are considering stock market investment you’ll definitely want to take a closer look at Fundamental Analysis. As a stock investor there are many tools available to help you decide which stock you’re going to buy, in today’s computer age technical analysis has become more popular but it will pay you not to overlook the more well-established system known as Fundamental Analysis. Fundamental analysis, that is to say examining what are known as the key ratios of the stock provide a method of quickly showing how much the stock is worth and how well the company is performing compared to other companies in the same sector.

The objective of fundamental analysis is to help you understand how much money the company you are considering investing in is making and how those earnings are expected to change in the future. Like all things company earnings are always subject to speculation, if the company has a good earnings record this will help to give investors confidence in the stock because they will expect the stock price and the companies dividends to rise as the earnings rise.

All listed companies must report their earnings on a regular basis, these reports are subject to detailed analysis and if the figures do not meet the market’s expectations there are bound to be a downturn in the company’s stock price.

Fundamental analysis relies on a detailed examination of the companies financial statements. Every company that is traded on the stock market must publish these financial statements regularly, in the past it was normal to produce these as just printed reports but today they are also readily available on the Internet via the company’s website and as such are easily accessible to anybody who is considering investment in the company’s stock. All financial statements include a least the following items, an income statement, the company balance sheet, the external auditors report, cash flow statement, a description of the company’s business activities and the expectation of earnings for the next financial year.

Before we cover the actual key ratios lets consider the individual parts of a typical company financial statement.

Perhaps the most important part of the financial statement is the external auditors report. The company’s auditor is always an independent certified public accountancy firm which is required to examine the company’s financial reports to establish if the information provided in the financial statement is a true and accurate description of the company’s earnings. The Independent auditors report expresses the auditors opinion of the accuracy of the information in the financial statement, any financial statement that does not have an independent auditor’s report is worthless because obviously it could contain misleading information which could result in a bad investment decision. It must be remembered that an independent auditor’s report is not an absolute guarantee of the accuracy of that report but without it the financial statement has no credibility at all.

The company balance sheet is also an important source of information for fundamental analysis, the balance sheet is actually a snapshot of the company’s financial affairs at a given point in time. The balance sheet will allow you to see the interrelationship between the company’s assets that is to say property and equipment inventory and cash against its liabilities and the retained equity in the company.

The company’s income statement will show information about income generated by the company’s activities and the costs which were incurred in generating that income this will allow you to establish the earnings per share on both the gross and net basis.

And finally we come to the statement of cash flow this is rather like the income statement but it gives a more detailed picture of how the money flows into or out of the company over the financial year. The income statement shows money coming in from sales, investments in the company, or borrowing and how the company handles its expenses. It is a very valuable indication of how the company is managed on a day-to-day basis.

In part two of this article I will go into greater detail about key financial ratios that are use in fundamental analysis and how they can help you in arriving at stock investment decisions.

For more vital information about Fundamental Analysis visit http://www.stockinvestingforbeginner.com/

There are three things that you need to consider before you decided where to invest your money.

Return
Risk
LiquidityHigh return, high risk! This is the law of investment. If you want to get high return, you must be ready to face the risk. Beside return and risk, you must consider the liquidity of the investment. Here are some examples for some kind of investment:

Saving in the bank

It is the safest investment. The return and risk is low. How about the liquidity? Saving is very liquid, anytime you need your money, you can withdraw it.

Investing in Houses, Apartments and Other Building

House, apartment and other building like warehouse are good investment. It can give you high return and relatively low risk. Each year the price of the building usually rise up. But, it’s not a liquid investment. You couldn’t get the return as soon as you need it.

Stock Market Investment

stock trades in stock market, you can sell your stock in an hour or even in a minute and you can get the return as soon as you sold it. Stock trading is a liquid and high return investment. Off course it is high risk too.

I couldn’t tell you exactly that here or there are the best place to invest. My suggestion is you better divide your money into some places of investment. There is a nice sentence in the world of investment, “Don’t put your eggs in one basket! If you drop the basket, you will lose all your eggs.” So, be wise!

Happy Investing!

Fendi Heri Yanto is someone who plans to retire young retires rich. He considers many kind of investment. While learning about stock trades, he is building a site that could be a guide to stock market investment. Check it out http://Stock-TradingGuide.us