 |
|
The source of the best business, financial and legal news |
|
|
||||
|
||||
|
||||
|
|
|
|
|
 | |
| |
 |
Business Informations |
|
|
|
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.
MORE RESOURCES:
investing - Google News |
|
|
|
RELATED ARTICLES
Why the Rich Keep Getting Richer Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated, caring, brilliant individuals? Becoming rich isn't hard, but it does require a bit of time and knowledge. Having time to get rich, educating oneself, and buying assets are the three key factors in attaining untold wealth. Finding the Perfect Company The perfect company - it's the holy grail of the investment world. The company that will make its initial investment hundreds of times over. Using Divergences to Keep Out of Bad Trades The American Football season just came to an end with my team getting close to the championship but falling short again. I am a big fan of the Indianapolis Colts and we keep having a groundhog day season year after year but it is still fun to watch. Day Trading Strategy or Stock Trading Software? The Way You Pick Stocks Affects Your Results The trading method you employ to approach the stock market can make a big difference in your results.Stock trading is a very competitive field and in order to succeed you need to FOCUS on a set of simple strategies that you can implement without hesitation. How to Choose the Right Share Class You'll want to opt for the no-load or institutional share class instead. If you're a no-load investor who is determined to buy a fund that's primarily broker-sold, go through a supermarket and opt for the D shares. Invest or be Pink Slipped Firing an employee seems to be easier and easier for corporations. Up until now you allowed them to set your clocks. Secret Stock Options Trading Strategies the Experts Don`t Want You to Know To understand stock options, we need to look at Webster’s Dictionary’s definition of the word strategy.Webster’s Dictionary defines the term strategy as1. Variable Annuities You know all the articles you read about annuities that have extremely high fees? And the ones that people lose a lot of money in? Well, these are better known as variable annuities. yes, they do have some advantages. How Do I Start Investing Online and What Are Some Basic Tips? If you are new to investing online, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Asset Allocation: Critical to Your Investment Success Asset allocation is a critical component of investing success. Both research and academic studies show asset allocation to be single most significant factor in determining your financial goals. To Retire Rich, Save and Invest Early If you want to retire rich, start saving investing early. The most powerful tool when it comes to retiring rich, is compounding your returns on money saved when you are young. Rules of Simple IRA Your Business Needs to Know A Savings Incentive Match Plan for Employees plan, better known as a SIMPLE plan, is an IRA-based retirement plan available to employers with fewer than 100 employees.Under a SIMPLE IRA plan, an employee can contribute a portion of his pay to his SIMPLE IRA account. Will a Falling Dollar Derail Your Plans for Retirement? How much are you willing to pay for a tank of gas? We've all watched as gas prices hit record highs, but what would you do if you filled your tank and paid by credit card only to discover on your monthly statement that you paid $80 to fill an economy car. No, this is not some future doomsday projection of oil prices. Copy Cat or How to Use a Successful Trading System How many books have you read about successful traders? How they did this or that and made a fortune and are still doing it. You say to yourself, "I'm going to follow his method and get rich". How to Terror-Proof Your Money "To drift is to be in hell, to be in heaven is to steer." -George Bernard ShawFormer Homeland Security Director, Tom Ridge, has said it's not a matter of "if" we'll have another terrorist attack, but when. IF - The Wonders of Investing If it seems as if all investors are selling, who is buying? If trading has become entertainment for you, it may be time to refocus on profits. If your stock has reached an annual low, can it go any lower? If your stock has reached an annual high, can it go any higher? If all the television analysts jumped off a bridge, would anyone care? If your portfolio is based solely on fundamental analysis, perhaps it is time to learn technical analysis. Basic Options Terms Options are good investing and speculative instruments. But options terminology may confuse even experienced investors. Beginning Investor - Investment Terms Over the course of the past two months, readers have brought to my attention that there is a steep learning curve for investment terminology. That's why the focus of this month's Beginning Investor column will be investment terminology. Holy Grail Investments Every year I go to the Money Show in Orlando, Florida. Thousands attend. Invest To Make Money, Not To Get Rich The technology boom of the '90s romanticized the "rags-to-riches" ideal that all of us dream about when investing. For those that invested $1000 in Dell at $5 during 1990, held through the seven splits, then sold in March 2000 at $59, the dream was a reality.
|
| home | site map |
| © 2006 |
|
|
|
|
|
|
||||
|
||||
|
