ComputerHunter.org |
|
|
|||
|
 |
Creating a Financial Future--Putting Your Plan Into Action Part 2
Real Estate can be a useful tool for investing. The simplest real estate investment is not truly an investment, but a cost-reduction ? that is owning your own home. Buying rather than renting allows one to put residential costs toward assets rather than into someone else's pocket. However, if interest is high, the amount you pay to borrow money could make the deal less attractive. Today, with interest rates at an all-time low, it is difficult to imagine many cases where renting is more attractive than purchasing. Income Real Estate is also viable for some. This would include owning small apartment buildings, storage facilities, or shopping centers. This does, however, involve time commitments, just like running any other business, but the income levels can be very positive if you have selected your property carefully. Bonds represent money loaned to companies or governments at interest. This is a fairly secure way to make money, as long as you loan to secure companies or governments. However a K-Mart bond, or a Government of Zimbabwe bond would obviously not be a wise choice today. Bond-rating institutions like of severe recession or depression and falling interest rates. However, when interest rates are rising, older bonds issued at lower interest rates can actually lose value precipitiously. Thus, in this age of fast-moving interest rates, bond prices tend to fluctuate much more widely than in the past, and their reputation as a perfect investment for widows and orphans is not longer viable. While they may be useful as part of a broad plan, bonds themselves are sterile. By this I mean that they don't grow. If a growing portfolio is important to you, bonds may not be useful. As with any other investment type, one must consider the broad implications. Stocks represent ownership interests in businesses. As with investing in personal businesses, one owns the actual company. However, stocks avoid some of the problems of investing in smaller businesses. Liquidity is not a significant problem here, since one can sell shares whenever necessary. Moreover, one needn't worry about making a part-time commitment to running the company, as corporate management is already in place. However, one must always monitor management to be sure they are working in the best interests of shareholders. Normally, one can depend upon the media and help in this monitoring process, but even this method fails occasionally. Still, despite this problem, stocks are often the ideal investment for most people. Mutual Funds are simply baskets of stocks, bonds, or other investments, held jointly with other fund shareholders. They help small investors diversify their holdings. (Diversification vs. Concentration ? one can either choose to spread their money among a broad variety of investments or concentrate in one or two. Generally concentration is much more risky.) Derivatives make up a broad category of vehicles that are 'derived' from other investments. This may include options, futures, or swaps. Options, for example, are considered derivatives because they are based upon the performance of a company stock. If the stock goes up, or down, the option may be worth more or less. Derivatives are sometimes useful for larger account management, but generally provide a more intense outcome. Thus if shares of a company go up a small amount, an option may go up a lot, and vice versa. This use of leverage can make derivatives riskier, and generally not appropriate for small investors. In much the same way, using debt for investing, such as margin buying, also increases leverage, and therefore increases intensity and risk. We recommend avoiding borrowing for investment purposes except in extreme cases, as the risk makes this option stressful for many. The choice of assets is only part of the battle. Most importantly, one must select whether to invest for income, growth, or incrementalism. To reach Scott Pearson for comments or to learn more about his Investment Advisor services, visit http://www.valueview.net Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.
Google News - Top Stories
|
|
|
|
RELATED ARTICLES
Short Term Savings Products When you invest, it simply means that you are putting your funds in products, in this case short-term savings vehicles, which will allow you to reap high financial rewards. 5 Things To Know About The Stock Market 50% Of U.S. Households Invest In The Stock Market Individuals invest in the stock market directly, through mutual funds, their pension plans, profit sharing plans, 401k's, IRA's, etc. New U.S. Mint Coins a Golden Opportunity In April, the U.S. Mint revealed plans to strike in early 2006 new .9999 bullion coins to go after the growing world market for .9999 fine (24-karat) gold coins. Studies show that pure gold coins claim 60% of the world's gold bullion coin market, which is some $2.4 billion annually. The Royal Canadian Mint's Maple Leafs hold the number one spot for pure gold coins. However, problems with Maple Leafs have surfaced. Dont Catch a Falling Knife One of the most common mistakes made by inexperienced investors is trying to "catch a falling knife". This is the phrase used to describe the habit of buying stocks that are in "freefall", and is a poor strategy, albeit common among new investors. Sadly, it is a common practice even among old and experienced investors. I've even fallen prey to it myself. It Must Be Joe Cockers Market Agonizing displays of poor theatrics failed to entertain my mind one recent Saturday evening. I scrolled across several television channels hoping for an engaging program. Finally, one particular concert intrigued my senses. There on the stage performed one of rock and roll's most expressive singers. Larry, Moe and Curley, Investment Brokers Larry, Moe and Curley were sitting in their favorite restaurant just off Wall Street having their usual 3 martini lunch and were discussing the day's events and their client portfolios. Investing: The Art Of Making Your Money Work For You There is a lot to know about investing. It all depends on what type of investing you are interested in as well. There are many different types of investment options out there. So what is investing, specifically? Trading Systems A trading system consists of a set of rules for viewing markets and making trades. The advantages of trading systems can be hidden when they become associated with trading platforms involving trade order submission and processing. A clarification of their roles can help explain the benefits of using a trading system. This can be done without identifying a particular platform or system. Once the platform infrastructure is isolated, a brief look can be taken at why a trader can benefit from a trading system. Reading Between The Lines In Annual Proxy Statements Upper Saddle River, N.J. - May 11, 2005 - Now that a large number of the proxy statements for public companies with fiscal years ending December 31, 2004 have been issued, those of us that scrutinize them for a living, as well as those that have invested in those companies, have an opportunity to analyze their executive pay packages in detail. With all of the attention on Corporate Governance and how to improve the level of transparency and insure that a strong relationship exists between pay and performance, these statements provide for interesting reading. Investigate Before You Invest "Through wisdom is a house built. And by understanding it is established. And by knowledge shall every room be filled with precious and pleasant riches!" --Bible Sell Discipline for Investors: Importance and Execution Investors usually don't have an aversion to buying an asset. The real gut wrenching decision is when - and if - to sell. What most don't realize (or don't want to realize) is the overwhelming importance of the sell decision. Let's explore the reasons why and the techniques that can calm a seller's nerves. Investing for Retirement - Not an All or Nothing Play In 1519, Hernando Cortes, beached on the shores of unexplored Mexico, made a fateful decision: he would burn the ships he and his men arrived in and attempt to overthrow Montezuma and the mighty Aztec empire. The decision was risky. The Aztecs were meant to possess large numbers of brave warriors while Cortes had only a handful of men. If Cortes had the slightest setback there would be no escape. On the other hand, Cortes had no choice. The powerful Governor of Cuba wanted his head. Cortes had defied the Governor time and time again and his best option for getting out of the situation was to win favor with King Charles by conquering a civilization rich in gold and other treasures. Since Cortes' men might get a little antsy if the going got rough and decide they would prefer going home, Cortes decided it would be best to completely align their incentives with his. He did this by burning the ships. Anything but success would now equal death for Cortes and all of his men. Thus began the famous march from Vera Cruz to Tenochtitlan. Bearish or Bullish? If you are interested in stock investing and the stock market, you may have plenty of questions. Even if you have already started investing, you may still have many questions about the details of the stock market and your options. Even the stock investing pro needs tips now and again and is on a path of continuous daily learning. That is their lifestyle and sometimes their contribution in life. Property Investment Just Got Exciting There is an area in Brazil that has lower crime & lower property prices than where your are probably sitting right now! Six Principles of Successful Investing 1. Begin investing immediately Why You Need To Buy and Sell Gold Coins (Part 2) How to Collect Rare Coins For Fun and Profit Stock Market Money Management Skills Let's start by saying: You can't be afraid to take a loss. The investors that are the most successful in the stock market are the people who are willing to lose money. Stock Market Horizons: Gold $3,000, Oil $70 In the last two decades, even though gold prices have dwindled from $850 to $350 an ounce, there are still market gurus who predict gold price to hit $3000 an ounce. Hecla seems to be quite bullish about the future. Invisible Mutual Fund Fees Erode Your Returns! Many investors think that investing in mutual funds is free. What nonsense! Funds collect more than $50 billion a year in fees from investors. That is truly a ton of money. The first way you get hosed in a mutual fund is due to high fees charged. These fees can dramatically reduce your returns over time! Approaches to Investing Here is a small summary of the three major approaches to investing:
|
|
|
|
|
