Investment Management

13 Advantages of Actively Managing Your Money Yourself

2010-02-14T13:08:00.000-08:00

By Tim Du Toit

Most investors do not realize, but as a private investor managing his own money, he has got an immense advantage over a fund manager due to factors he may not even be aware of.

Sure it will take up some of your free time but it will probably be one of the most awarding activities you can invest your time in.

We have all worked hard for the money we have saved and it would only be prudent to invest in in the best way possible.

With public pension systems crumbling around the world because of aging populations, making the most of your savings had gotten much more important.

Below are the advantage I have come up with. If you come up with any others please send me a short note.

1. You can wait
As a private investor you can wait for attractive investment opportunities to present themselves. If you cannot find anything attractive you can stay in cash.

Fund managers do not have this luxury. They have to invest in whatever their investment area is irrespective of valuation.

Holding cash in the fund management world is known as career risk as the fund manager runs the risk of falling behind his peers or his benchmark. The larger the cash position the higher the career risk.

The best example of career risk I have read is value fund managers losing their jobs because they refused to buy internet shares during the internet bubble.

2. You can invest anywhere and everywhere
As a private investor you can invest in any type of asset in any country that offers an attractive risk return trade-off, be it corporate bonds, equities, options, real estate etc.

Fund managers have to stay within the fund's investment area. Additionally complying with regulations, even further limits their investment choices.

You can argue that you can change to a fund in another investment area but that is also actively managing your money.

3. You can invest in any size
This is similar to the investing anywhere and everywhere as you have the freedom of investing in small or large companies whatever is most attractively priced.

I was recently astounded when I heard of a value fund manager that had to invest in companies that have a high weighting in a particular share index because he had institutional investors (read large investors) that would withdraw their funds should his performance deviate too much from the market.

This is ludicrous, why invest with a value manager if you really want market index performance? You want a value manager to do what he does best, search for undervalued companies.

4. You have no benchmark
As a private investor I only have one goal in mind, to grow my investment portfolio each year irrespective of what the market does.

I do not consider it a good year if I have lost 25% while the market has lost 40%.

I am sure your goal is the same.

Fund managers only have one goal, beating his benchmark irrespective of absolute return. I cannot remember how many times I have heard a fund manager say that he has to remain fully invested in his investment area as that is what his investors expect of him.

Just think of what happened to investors in technology funds as the internet bubble deflated.

5. You can focus and ignore
Studying, understanding and applying what has worked in investing is all you need to do to be wildly successful as a private investor.

You can only focus on a few things and ignore the market noise, you only have to spend relatively little time to be successful.

Fund managers have to have an opinion on a lot of different investment areas because they have to appear competent in company and client meetings. It is tough for them to have to say I do not know.

I do not watch financial television, its complete rubbish and a waste of time. Mainly yo-yo news i.e. what went up and down.

I have my investment criteria, I look for companies that falls within it and I study only that. The rest does not interest me and that saves a lot of time.

6. No conflict of interest
This is a big one. You only have your best interests at heart. In other words all your decisions are in your best interest.

Fund managers have to think of keeping their jobs, increasing their assets under management and keeping clients happy.

All this means is that their investment performance is not the most important thing on their minds.

Also fund managers in companies what also offer investment banking services may be pressurised to buy securities of investment banking clients irrespective of investment attractiveness.

7. You can have a long view
According to a study by the New York Stock Exchange the average holding period of shares held by investors have declined from five to six years in the 1950's to 11 months.

It is unlikely that a company with problems, as undervalued investment inevitably have, can sort them out in such a short period of time.

As a private investor you can follow the company over many years and realize the gains when the company gets revalued by the market.

This may be the largest competitive advantage you have. The ability to look at a company solely on valuation and keep it as long as it is undervalued.

8. No peer pressure
Accept if you discuss your investment with friends or family you will have no peer pressure to buy or sell any investments.

I have gotten to the point that I am reluctant to discuss my investments because the response I get is either, "never heard of it" or "what, you must be mad, don't you read the newspaper?"

Fund managers have a different problem. The funds they manage get compared to benchmark indices and other funds, including the individual fund holdings. Should you stand out in any way invites questions. Should the performance be worse than the peer group or benchmark career risk increases.

If you manage your own money you have none of these problems.

9. You decide
You make the final decision after you have done the analysis. You may be wrong but at least you make the calls either way.

A lot of funds are managed where committees decide what is bought and sold. Apart from the problems of group-think investment committees are staffed with people throughout the organization with different investment approaches, not all of which has shown good historical results.

Furthermore it may be difficult to tell your boss that his investment idea stinks if you have your bonus evaluation later that day.

This leads to suboptimal and sometimes completely dysfunctional decision making.

10. You can concentrate
If you find a really compelling idea you can choose to invest as large a part of your capital as you feel comfortable with.

With 80% of non-market risk diversified away with as few as 15 positions you can determine what your optimal number of investments are.

Mine is 30 as I feel comfortable with the weighting of each position in my portfolio and I can easily keep track of the investments.

When I see funds with 100 or more investments my first thoughts are that they must not have much conviction in any of their ideas.

Also with so many positions you may as well buy the market itself through an inexpensive exchange traded fund.

11. You control the costs
Controlling costs and fees, or the friction of investing, is a very important part of part of realizing superior long term results.

Using a discount broker I can buy and sell most shares for around 1% brokerage. If I hold a position for three years that equates to 0.33% per year plus a 0.25% custody fee.

That is a lot lower than funds that charge 1% to 1.5% per year on top of a 5% initial fee and other expenses.

Calculated over a period of 20 to 30 years keeping costs low makes a huge difference.

12. Down years are more bearable
This goes along with the point on making your own decisions.

Should you have a bad year at least you know you made the decisions, can learn from your mistakes and make adjustments to your investment strategy.

13. You can be fully invested
Should you find a large number of attractive investments you can be fully invested and remain so even if the markets declined and you are still convinced of the investment case of each investment.

With a fund manager this is unfortunately not the case. When markets fall they are bound to get redemptions. In order meet the redemptions they must either have cash available or sell investments.

But when markets are falling liquidity drops as well. That means that because investments have to be sold liquid investments are sold first. This selling pressure puts pressure on share prices leading the markets to fall further thus triggering more redemptions. You get the picture.

Some fund managers plan for such eventualities be keeping a certain amount of liquid investments or by keeping at least a small amount of cash on hand.

This as mentioned in one of the points above leads to suboptimal investments not necessarily the managers best ideas.

Luckily as a private investor you do not have this problem.

I always keep a cash reserve of one years living expenses aside to ensure that I do not have any pressure to sell investments should the market decline unexpectedly.

Also a large cash reserve gives me the peace of mind and opportunity to focus on investing for the long term.

There are of course a few funds where the drawbacks mentioned below do not apply but they are in the minority. The large bulk of fund management companies are focused on growing the amount of money they manage, where maximizing the returns to investors come a distant last.

Investments Solutions UK - Know Your Investment Objective

2010-02-11T13:06:00.000-08:00

By Anton Kadin

Investment is imperative if you are earning well and if you want to convert your wealth into big fortune. People are utilizing various investment solutions UK so that they can see the growth of their money. And this is natural, because this is the true nature of money to grow and you can make it grow by applying a little insight and seeking advice from expert financial advisors.

You can make many investment objectives according to your needs. These objectives vary from person to person, but essentially they can fall into three broad categories...

1. The investment should provide a lump sum amount sometime in the future either by investing a lump sum now or by saving regularly.

2. The investment should be providing a particular income now by investing a lump sum.

3. The investment should provide a particular income some time in the future either by investing a lump sum now or by saving regularly.

So, whatever your investment objective is you can try various investment solutions UK tools to fulfill the same. These days various kinds of investment solutions are offered by investment firms. These all investment solutions are different variables of cash (deposits), corporate bonds and gilts, equities (shares) and property. You can invest in regular savings, cash ISA, lump sum investments, endowments, maxi ISA, property, wrap accounts, investment bonds, offshore investments, distribution bonds, national savings certificates etc.

So, you are required to define your financial goals and investment objectives before choosing any investment solutions UK product. Because you must know what amount of money you can invest and what would be the investment result. Bad investment can result in bad results which is not good for your financial health. Always be careful before investing and must consult a reputed, genuine and expert investment consultant. You can check about various such consultants on the Internet also.

Get Investment Advice

2010-02-08T13:03:00.000-08:00

By Alison Cole

Advice on investments can be found on the Internet or at a local brokerage firm. Many choose to invest on their own to save money by using a discount broker, reducing your transaction costs. Discount brokerage houses are set up just to carry out a trade, but do not give advice.

If you decide to do-it-yourself, you can go on the Internet and get advice for a small fee at a few sites. Then continue the trade through a discount brokerage house. In other words, an investment online site will give you a financial profile for a fee and they will give you a plan and recommendations on stocks and bonds. They will monitor your portfolio and give recommendations when to buy and sell when necessary.

One such advisory is http://www.createafund.com. It charges an upfront annual management fee of 1% on your capital. For this you get a plan prepared by a financial planner that allocates your assets, telling you how much of your money you should invest in stocks, how much in bonds and how much you should keep in cash. It also recommends specific stocks and bonds. Transaction costs are included in your fee.

The following tips on online resources should provide you with valuable information.

CNN online news is a great source for advice on the market and current research of stocks. Hoover’s site will give you recent stock news and company descriptions. Go to Quicken to find out a company’s profile and current quotes, and the Securities and Exchange Commission (SEC) site will give you information about filings and enforcement. Make sure that you look for disclosure statements on Internet sites and newsletters on who wrote the information. Tips can sometimes be misleading because companies trying to sell stock write them.

Comparison of an Investment Fund Management Approach

2010-02-05T13:00:00.000-08:00

By Hans Bool

In the Netherlands there are two popular investment funds. There is also a site -- morningstar.nl -- where the characteristics of funds can be compared. I've tried it for those two funds and came up with a peculiar fact, when looking at the last (5 years') performance of both funds:

* Ytd (09) -19,55% /\ -8,13%
* 2008 -39,26% /\ -66%
* 2007 -1,28% /\ 31,94%
* 2006 7,52% /\ 18,1%
* 2005 28,62% /\ 38,81%
* 2004 5,04% /\ 5,74%

If someone would have invested 1000 euros starting from 2004 the left fund would have returned (today) 667 euros, the right fund would have returned 675 euros.

Amazing, how small a difference! This could be due to the small margin the fund managers are allowed to deviate from the world ... index benchmark.

Yet their investment strategies are quite different.

The year-to-date investment loss for the left fund is due to their cash position of -5% which means they are over invested. The other fund has a cash position of +5%.

The left fund uses a bottom-up stock-picking strategy, whereas the right fund uses a -- what I would call a -- commercial approach; they try to identify the trend (internet, commodities, etc.) and use this as the bases of the stock selection.

The left-approach could be summarized as an investment engineering approach: investing like an engineer, not too influenced by the market situation. Focusing on an own judgment where the market could be wrong after all.

But when evaluating, there is hardly any difference in the final return of both. After five year the private investor betting on either the left or right fund is left with exactly the same amount (about 670 euros of the initial investment of 1000).

What would this mean for the private investor? One funds seems to go with the market flow, the other is more stubborn in an own proprietary approach. But in the end they leave the private investor with the same return...

If it doesn't matter that much one could argue to get rid of these funds and invest in index funds. It is more transparent. But for the client less interesting they like to follow the strategy of the fund manager and find out that after five years it turns out all more or less the same.

Investment Solutions Company - For Smart Investment Decisions

2010-02-02T12:58:00.000-08:00

By Anton K. Kadin

Every element on this earth keeps growing. This is the nature of the earth. There is no life without growth. Same is true for money also. If you can not make your money grow, if you can not make money out of your money, and if you can not save your money for long-term profit then it is useless. You must provide wings to your money so that it can make you fly. And you can do this through investments only. Various investment options are available in the market. You need not to get confused. Choose an investments solutions company to remove all the confusions.

An investment can be perceived as a saving and an additional income. Both these factors are necessary. Any form of property, either in cash or kind, which has the potential to grow in value can be an investment. These days various investment products are offered by the financial market and you can make a smart decision by opting for an investments solutions company. These days investment products are available in the form of funds which pool together people's money and are invested in a mixture of different investment solutions like equities, bonds or even property and cash.

An Investments Solutions Company can provide a fund manager who can look after these funds. Also, there are various other kinds of investments which are made by four variables cash, corporate bonds and gilts, equities and property. Some of these investment products are regular savings, cash ISA, lump sum investments, property, wrap accounts, distribution bonds, national savings certificates, investment bonds etc. These all investment products have different qualities and all of them need variable investment. But all of these are good investments.

And whatever investment product you choose make sure that it is fulfilling your investment needs. You must be saving good money. So, be a smart investor and opt for investments solutions company.

Discover 5 Powerful Ways to Manage Your Millions

2010-01-30T12:55:00.000-08:00

By Melanie C

Those people who have managed to acquire - or inherit - a large amount of wealth know that it needs to be looked after to avoid loss. There is nothing so easy as spending money if you have plenty, so the first thing you need to do is be sure that your wealth is actually increasing rather than decreasing. Unless certain procedures for wealth protection are followed you may wake up one fine morning to find creditors knocking on your door.

One way to ensure your millions actually increase rather than decrease is to take advantage of private retail banking. Private banking is when a bank creates products especially for the needs of the high net worth individual, rather than simply offering commercial products already available. Other services in private banking include special wealth management advice, as well as financial planning suited to the needs of the individual. This should not be confused with private banks that are not incorporated.

Special estate planning is also necessary to protect and maximise the goals of the owner. This will include making sure that your intended beneficiaries do actually get what you want them to get, with a minimum loss to taxes and other costs. It is especially necessary for minor children to be looked after correctly. And you need to have plans in place in case of incapacity in old age.

Legal resources and special taxation advice are necessary for those with millions; otherwise they could see the taxman scoot off with most of their money. Legal advice from those who are specially trained in advising high net worth individuals is necessary. An ordinary solicitor or accountant would not have the experience or training to do what is necessary. To sum up, wealth management includes using tailored banking services, special investment management, estate planning, taxation advice and special legal resources.

Why You Need to Do a Mutual Fund Research Before Investing

2010-01-27T12:52:00.000-08:00

By Peter Gitundu

When investing in mutual funds, it is always advisable to first conduct some market research to be able to determine which category is best to invest in. Research is best carried out by professionals and investment managers but all the same, this does not leave out an investor who is willing to do so for his own good and for the sake of information.

You may consider researching by category and this means that you will look at the types of mutual funds available. As you look at the category, you will also look at the type of security that particular category invests in so that you can determine the kind of returns to expect. Another thing to look at while at the category is the risk each type of investment carries. While high risk may be thought of to translate to good investment, this may not necessarily be the case in every situation,

Mutual funds are generally known to carry low risk, owing to the fact that they are collectively owned and hence attract a lot of investors. The higher the risk an investment carries, the more likely it is to perform poorly. For this reason you need to compare the level of risk in each type of investment, which is basically another criteria that one can use in the research. Comparison helps you to make an informed choice on the best way to go.

One other thing to look at is the price history of the investment. The performance of the investments in the broader market will help you establish what kind of performance to expect in future. However, do not rely on the prices of the recent past, but dig deeper and see how the prices were at least five years and above ago.

Investment Fund Performance Charts -- Industry Cynicism About Unsophisticated Individual Investors

2010-01-24T12:49:00.000-08:00

By Larry Russell

The securities industry knows that chasing historical performance is bad for individual investors, but they encourage this behavior by publishing historical performance charts and 4 star and 5 star ratings, which are also largely meaningless. For the industry not to know would imply that many very smart professional investment managers have had their heads in the sand about decades of financial research.

The securities industry and many of its brokers and investment advisors know that low cost index strategies are better for individual investors. However, the "active-management-beat-the-market" industry crowd will not make any money off of you, if they tell you that. They have to push the "we deliver superior performance" mantra, because that is the justification for their excessively high and performance killing fees. Since market realities make it virtually impossible for actively managed funds to consistently beat the market after their fees, they have to resort to promises, deceptions, and what Darrel Huff would call "statistical" lies.*

* (Darrell Huff wrote a short and very informative book, "How to Lie with Statistics," which was first published in 1954 and was amusingly illustrated by Irving Geis. This book is still in print and remains very popular on Amazon. It plainly and humorously discusses how statistics can be distorted and misused to serve the self-interest of the presenter.)

These lies include: #1 selecting only winners to promote, #2 easy index benchmarking, and #3 hard to interpret cumulative historical performance charts. Those in the industry who do not understand this have not bothered to do their homework. And, why should they? If these superior performance hustlers learned what is good for individual investors, they might also realize that they should find another career that adds some genuine value to our society.

How one fund family solves this problem -- They refuse to play the game.

In the May/June 2007 issue of the Journal of Indexes, there was a "Straight Talk" interview with John Brennan, CEO of the Vanguard Group, who succeeded John Bogle in 1996. (Pages 24-25, 50) When asked about performance chasing, Brennan said the following: "The way(s) you mitigate against it are several. One, you never -- in our view -- never promote performance. You just never run a performance ad. I think that is endemic to our business, and I think it's a shame for our industry. When you read a performance ad, there is an assumption that the strong performance will continue. And that is not necessarily true. The second thing is ... when you call Vanguard to talk about our funds, or when you read our literature, you won't find a Morningstar Star Rating. ... At the end of the day, firms that promote performance do so at their own peril." (And, The Skilled Investor would add -- at the peril of their clients, that is, you!)

(Note that there is no business relationship between The Skilled Investor website and the Vanguard Group or the Journal of Indexes. I have not received any kind of compensation for this article whatsoever.)

Stock Investing Vs Just Saving Money

2010-01-21T12:47:00.000-08:00

By James Leitz

Personal finance involves saving money and budgeting. It also includes investment management, specifically stock investing. If you really want to make money and get ahead realize that stock investing is a key ingredient of personal finance. Here we bring you up to speed on stock investing vs. saving money in the bank. Then we suggest the best ways to invest in stocks if you lack experience.

Saving money for a rainy day is an important part of personal finance. We all need a cash reserve to cover emergencies and as a cushion to make sure we can pay the bills. It's a nice secure feeling to have money in the bank, even if it earns meager interest rates. But how do you really make money to get ahead?

Just saving money is not enough. At 3% interest it takes 24 years to double your money. At 10% it doubles in 7 years. How can an average person make 10% a year? You guessed it ... stock investing. OVER THE LONG TERM for the past 50 to 80 years, stocks have returned ON AVERAGE about 10% a year vs. about 3% for safe investments like money in the bank.

Once you have your head above water and can pay your bills with cash left over, investment management is the area of personal finance that determines whether you get ahead or not. Stock investing is your growth engine. Now, how does the average person invest in stocks without financial experience?

If you have a 401k or similar plan at work, this is the best place to start stock investing. Start small if you are not comfortable at first, but invest some of your contributions in general diversified stock funds. By doing this you are invested in a long list of stocks. If other investors make money in stocks, you should too. Remember, over the long term stocks have returned about 10% a year vs. 3% for the safest investments like money in the bank.

If you don't have a retirement plan at work to invest in, you can invest in stock funds (stock mutual funds) on your own or through an investment representative or financial planner.

If you want to do it yourself and avoid sales charges and other fees call a major no-load fund family like Fidelity or Vanguard. If you want professional help call a financial professional.

Either way, get your personal finance show on the road and make money to get ahead by stock investing. Eventually you'll want to add bond funds and money market funds to the mix. But remember, stocks are your growth engine. Invest a portion of your investment assets there to at least get your investment management headed in the right direction.

Stock investments do not carry guarantees like saving money in the bank does. There will always be risk and bumps in the road. Think years down the road when you invest in stocks and don't let temporary setbacks upset you.

How can you lower the risks of investing in stocks? Get yourself up to speed. Do your homework and learn how to invest.

Start Investing Small on Your Own

2010-01-18T12:44:00.000-08:00

By James Leitz

The new investor can start investing small with a large selection of investment options to choose from. If you want to go it alone and save money, your best investment path will depend on how much freedom you want. Here are two low-cost ways to start investing on your own.

If you want to start investing the easy way with professional money managers making the specific investment decisions for you I recommend no-load mutual funds. You save money by not paying a sales charge or commission when you invest, and yearly expenses can be quite low. With a major fund family you have a wide variety of investment options. This is your best investment path if you want help with investment management.

If you want the freedom to invest in anything from real estate to individual stocks and bonds... gold and silver or oil and gas... even in mutual funds: open an account with a major discount broker. It will cost about $10 to make an investment on your computer and the same to sell it. You can buy or sell in seconds on any business day. The investment management is all up to you.

With a discount brokerage account the new investor will save money and have more investment options than ever before in history. Trust me, compared to the old days the new investor has it made today. It's even easier to start investing than you think, thanks in part to stocks that are actually exchange traded funds (ETFs). Let me give you an example.

Let's say that gold prices have your attention and you would like a piece of the action. You only want to invest about $1000, and want to be able to get in and out quickly in case things get dicey in the gold market. You can pour over the stats for various gold mining stocks in search of the best investment. Or you can simply buy shares in an ETF that invests in gold bullion and tracks the price of it... stock symbol GLD.

A few years ago I would have advised every new investor to invest in mutual funds. But for you more adventuresome types who want to play a more active role in your own investment management... open an account with a discount broker. You don't need to trade stocks or otherwise speculate just because you have an account. Look into ETFs on your broker's web site. These investment funds can make your investing life easier.

If you want to start investing on your own I suggest you start small if you pick your own investments in a brokerage account. For larger amounts, like IRA rollovers, I suggest no-load funds for the new investor. Or, try it both ways. But if you really want to make your money grow, do your homework along the way.

Wealth Management Company - For Fair Financial Advice

2010-01-15T12:42:00.000-08:00

By Anton K. Kadin

This has been said that management means planning, organizing, leading and controlling. These four components are also necessary for the management of your wealth. Any wealth management company provides that. They make efforts so that a right direction can be provided to your money and it can grow. You would be interested in savings and investments, sometimes in tax-efficient way, and in that case any such company can provide great help to you.

Really, plan is necessary for wealth issues. How you want to invest your money? Where you want to invest it? What investment time-span you need? How much you should expect in return? For how long you should invest? These are some of the basic questions for the individuals. Sometimes you can get blurred answers of these questions. Because answer requires knowledge. Which you can get from a wealth management company only. You can learn about investment basics from the financial experts who can understand each movement of financial market.

Also, if you are running a company then taking the services of a wealth management company is imperative. It can help you in growing long-term wealth and for achieving long-term profit. It may provide services like portfolio management, trust and estate management, investment management, portfolio rebalancing, financing solutions, private management tax advice etc. They may provide you advice as what kind of bank account for your employees or insurance plan would be beneficial for you.

You can also choose a Wealth Management Company for audit and assurance, bookkeeping, company formation, debt help & business recovery, financial services, legal services, payroll, taxation and many more which you require. You can utilize the expertise of chartered accountants and financial experts of these company. You can get good advice and get maximum profit out of any financial endeavour. Hence, be your financial need small or big, choose an efficient wealth management company for fair advice. And this way plan, organize, lead and control your money.

Money Management Made Easy

2010-01-12T12:41:00.000-08:00

By James Leitz

Money management, or investment management, need not stress you out. An investment program complete with diversification and professional asset allocation can be yours at low cost. Here's how to find professional money management to make your investing life as easy as possible while keeping your costs down.

Mutual funds (funds) were designed for average investors. These investments are basically investor-friendly baskets of securities that offer diversification and professional investment management to folks of all walks of life. Fund companies (families) that offer them want your business if you can afford to invest at least a couple of thousand dollars and/or a couple hundred a month.

But if you want to set up an investment program that works for you and is low-cost, remember two things. Some funds offer the inexperienced or new investor more money management service than others. Second, not all fund companies are low-cost. Let's talk about the management aspect first.

When you invest in a mutual fund diversification and professional investment management are automatically a part of the package. For example, if you own shares in a stock fund you own a small part of a large diversified portfolio of stocks that is managed for you and many other investors.

But what you don't get with a stock fund (or bond fund or money market fund) is asset allocation. That's up to you to figure out. How much should you invest in stocks vs. bonds vs. the money market? That's called asset allocation, and more than any other factor it determines your success or failure as an investor.

Some funds make life easier for you and offer asset allocation as one of their money management services. These are called BALANCED FUNDS and they go by various names. Examples include: asset allocation, total return, lifecycle, and target retirement funds. They range from conservative to aggressive.

In setting up your investment program just make sure you read the literature that profiles the fund's risk (conservative, moderate or aggressive) and pick one that matches your risk profile. They take care of the rest: diversification, investment management and asset allocation.

In regard to investing costs, some fund companies charge considerably more than others. You can pay sales charges of more than 5% upfront plus more than 2% a year for fund expenses. Or, if you go with a major no-load fund company there are no sales charges and yearly expenses can be less than ½% a year.

The two largest fund companies in America offer no-load funds: Fidelity and Vanguard.

Asset Management For the Small Investor

2010-01-09T12:38:00.000-08:00

By James Leitz

Professional asset management, investment management, often refers to an expensive financial service big financial firms offer other big companies or rich folks. What about the little guy who wants to invest money and needs help in the asset management department? Never fear, you CAN get help investing money, even if you're on a budget and clueless.

Large investment management firms aren't interested in you unless you invest money in vast quantities. But other asset management organizations are. These investment companies are called mutual fund families or mutual fund companies, and they offer professional investment management to average folks. You don't need a bundle of cash to invest money here; nor do you need to know a lot about investing money.

Mutual fund families offer a variety of different funds, all of which are professionally managed for the benefit of those who invest money in them. Few investors have the investment management skills necessary to oversee a portfolio of investments. Enter ... mutual funds.

Let's say you're thinking about investing money in bonds to earn a higher rate of interest. Are you capable of selecting bonds to invest in? Or, you think stocks in emerging countries like Argentina, China, and North Korea would be a good investment. Are you confident that you can invest money in these markets on your own?

How about putting together a well-balanced portfolio of stocks, bonds and money market securities? Can you handle the asset management? With mutual funds you have all of the above at your finger tips, generally at a modest or reasonable cost.

More examples of what you can invest money in through mutual funds: tax-free bonds and money market securities, growth stocks, real estate stocks, gold stocks, energy stocks, high-yield bonds, intermediate-term bonds, and balanced funds that invest in a combination of stocks, bonds and money market securities.

When you invest money in a mutual fund you own a small part of a large portfolio of investments (securities). In a stock fund, for example, you don't actually own the stocks in the fund's portfolio. You simply own shares in the whole package. If the stocks the fund owns go up in value, you make money. If they fall you lose money.

If you want to make money in the world of investing and don't know much about investing money, get professional help you can afford. Mutual funds offer asset management the average investor can afford. Look no further.

Wall Street's Overlooked High Performance Investments

2010-01-06T12:35:00.000-08:00

By Paul R Skarp

As global stock markets tumbled during late 2008 many investors witnessed staggering losses in their IRA's and 401K's. However, not all investors were that unfortunate; some actually prospered reaping returns of +25% or more for 2008.

What did these investors know that you may have overlooked? Professionally managed futures and foreign exchange.

What are Managed Futures and Foreign Exchange?

The terms Managed Futures and Managed Foreign Exchange describes an industry made up of professional asset managers known as Commodity Trading Advisors (CTA) and Commodity Pool Operators (CPO).

Investment management professionals and sophisticated investors have been utilizing these investment instruments for over 30 years.

With practically a zero correlation to stocks and other traditional asset classes, one of the most attractive features of managed futures and foreign exchange investments is the ability of these asset classes to add profound diversification to an overall investment portfolio.

Benefits of Managed Products?

With little or no correlation to stocks, being one of the main benefits of managed futures and foreign exchange some others include:

-Ability to possible profit in rising and falling market environments.
-Reduced portfolio volatility.
-Provide return in economic environments in which traditional stock and fixed income investments offer limited -Return opportunities.
-Both individual managed accounts as well as pooled investments .
-Minimum investment sizes can be as low as $1000 in some fund based solutions.

CTA Performance Index (Average Performance of a Basket of Commodity Trading Advisors)

1980 (+) 63.69% 1990 (+) 21.02% 2000 (+) 7.86% 1981 (+) 23.9% 1991 (+) 3.73% 2001 (+) 0.84% 1982 (+) 16.68% 1992 (-) 0.91% 2002 (+) 12.36% 1983 (+) 23.75% 1993 (+) 10.37% 2003 (+) 8.69% 1984 (+) 8.74% 1994 (-) 0.65% 2004 (+) 3.3% 1985 (+) 25.5% 1995 (+) 13.64% 2005 (+) 1.71% 1986 (+) 3.82% 1996 (+) 9.12% 2006 (+) 3.54% 1987 (+) 57.27% 1997 (+) 10.89% 2007 (+) 7.64% 1988 (+) 21.76% 1998 (+) 7.01% 2008 (+) 14.09%

"Simply put, the logical extension of using investment managers with specialized knowledge of traditional markets to obtain maximum return / risk tradeoffs is to add specialized managers who can obtain the unique returns in market conditions and types of markets not generally available to traditional asset managers; that is managed futures."

Thomas Schneeweis Professor of Finance University of Massachusetts

Risk and Reward of Managed Products:

While Commodities, in general, have sometimes been regarded as high risk investments in the past, over the period 1990-2001, the average annualized standard deviations of individual CTAs and the Dow Jones 30 industrials were very similar at approximately 25%.

More importantly, modern portfolio investment theory has shown that assets should be compared on a risk-adjusted bases (i.e. mean return and standard deviation) and that the potential benefit of adding an asset to an existing portfolio may be measured by an assets excess break even return or the difference between its actual return and the return required to improve an asset's or portfolio's Sharpe ratio.

In conclusion, managed futures and foreign exchange not lonely offer investors the ability to diversity their investment portfolios but to lower overall portfolio risk and volatility simultaneously. By adding managed futures and / or foreign exchange as an investment class investors can create more robust investment portfolios to protect themselves during turbulent investment environments.

Analyzing Company Stock Holdings - Wagner Investment Management

2010-01-03T12:34:00.000-08:00

By Jason Martin

Today, I'll break down Wagner Investment Management Inc and show you their biggest holdings. This is a great way to get investment ideas and to see where the market is leaning.

Wagner has many holdings, but I picked out the ones where they have a stock position of at least $4 million. Of those eight positions, I'll show you seven of them.

Oil

Two of the seven positions are oil plays—and large ones for Wagner. They have $5.26 million in Schlumberger and 5.22 million in ExxonMobil.

International

Wagner's largest position—$9.51 million—is in the exchange traded fund iShares MSCI EAFE Index (EFA).

This ETF is up 10.31% on the year.

Construction

Jacobs Engineering Group (JEC) is a professional services company that provides construction and technical services. Wagner has a position of $4 million in this company.

Tech

As their tech play, Wagner is heavy in Cisco ($4.2 million), which is up just over 8% on the year.

This holding shows us that Wagner is looking at market cap most likely. Nokia was a better play this year (47.4%), but their market cap is $65 billion less.

Stability

Wagner has a $5.12 million position in General Electric, which is a large cap stable stock. GE has a market cap of $412.8 billion and it's up 9.5% year-to-date.

Small Cap

Finally, Wagner has a $6.749 million position in the Russell 2000 Index, which is up 6.45% on the year.

Learning

By looking at the larger holdings of a company, we can see they're thinking. Wagner's largest holding is in an international blended fund. They have solid investments in tech and oil as well.

Wagner was a company I picked at random to investigate—something I do often.

Aside from learning the above, I also noticed that Wagner had holdings in both Coke and Pepsi, but their Coke holding was 30% larger.

Like many investment companies, they hold shares in Google. They also have a few Yahoo shares. We can use this comparison to gauge expectations and trust. Wagner has $2.58 million in Google and $7,000 in Yahoo. That tells you about all you need to know.

Invest in R-pM Corporations that can Manage Your Investment

2009-12-31T04:37:00.000-08:00

By H. Greene

You likely invest in corporations. As an investor, you try to identify precisely how you are to gain a return on your investment and have some idea of what that return should be.

Do you realize that the corporations that you invest in have no way to do the same when they use the money you have invested. Corporations do not have a fundamentally strong means to plan and manage the return on their investments, from initiation through to measuring the return. So corporations rarely really invest, they either spend or speculate.

Many corporations approach investor funds as money to spend rather than considering use of the funds as an obligation to gain a return on the funds used. The money simply disappears into normal operations.

Even when corporations attempt to invest in capital development and growth, they face difficulties because they are not structured to plan and manage investments. They cannot identify the precise points that benefits are produced to build up the individual benefits that justify the investment. And if they cannot plan these benefits, they certainly cannot manage benefits through to the return.

Corporations estimate the return for core business investments like a new production line. But they rarely have a precise idea of the return from investments, particularly for investments in business change. The objective of business change investments is performance improvement or solution implementation. Investments meeting these objectives are investments in costs, but provide no benefit per se.

Most investment projects itemize the cost of the investment, but do not correspondingly itemize the benefits or return on the investments. Return on investment is a estimate of how much certain entities like sales or revenues will improve. The estimate is often camouflaged as a sophisticated cost-benefit or internal rate of return analysis.

Rather than estimating how an investment will increase sales and revenues, the corporation must itemize and manage the individual benefits of each improvement to justify investment and follow through to see that the actual individual benefits add up to increased sales and revenues.

Those of you familiar with conventional development methods will wonder how to do this. Conventional development methods follow such steps as identify the problem, design the solution, plan the cost of the solution, acquire or develop the solution, test the solution, train users on the solution, implement the solution, and operate the solution. All of these steps are on the cost side of the investment. There are no steps on the benefit side.

This problem has existed, since the beginning of business. 20th century corporations are structured to incur and manage tangible costs, but they are not structured to manage unknown costs and to create and manage the value required to provide benefits and the return on investments. Corporations do not manage the utilization of each item of capital in operations, so they have no professional capabilities to manage the development of capital.

Since corporations find investments so hard to manage, many do not develop the internal capability to manage investments. They bring in consultants to manage the investment for them. The consultants face the same problem. Their methods do not plan or manage the benefits or return on investments.

Corporations and consultants will never be able to manage investments with conventional development methods that develop and manage contrived entities like processes, systems, and activities, rather than business reality.

Result-performance Management (R-pM) organizes, manages, and develops the business through the only two entities that directly portray business reality; results produced and performance solutions utilized.

R-pM provides a way for the enterprise to develop results in addition to performance. The value and benefit of investment come from result development; the costs come from performance development. The corporation must use R-pM to take three fundamental steps to be able to manage investments properly:

Structure corporation results to plan and manage value, including the value-added by investments

Structure capital as performance solutions to be professionally managed in development and operations.

Develop a professional investment management capability to plan and manage development over time.

Value can be planned and managed only through results. So, only when the corporation has structured its results properly, has structured its capital, and has the professional capability to manage change over time, will the corporation be able to plan and manage the benefits of investment and measure of the precise return on investment.

It is only when a corporation is structured through R-pM that we as investors can be confident that the corporation will plan and manage the utilization of our investment for a planned and managed return.

MFC Global Investment Management

2009-12-28T04:35:00.000-08:00

By Paul Abbey

The world of wealth building and wealth management is a puzzle made up of many pieces where each pieces requires the other pieces in order for them to have meaning. First there is the investor. Who is this person? It might be the employees of the growth companies that created the jobs or it might be their employers. Whatever market they all exist in and whatever products or services they work in they still must have a strategy for growth. All grow begins in an incubator environment. Then as they expand jobs are created and finally profit is made. This profit of course will eventually need to be invested. That is where asset management comes in.

One of the larger asset management companies is MFC Global Investment Management®. MFC Global Investment Management®. is the asset management division of Manulife Financial. MFC Global Investment Management's diversified group of companies.

And what they offer is a systematic approach to creating wealth.

Asset management companies help you to transcend obstacles.

Now there are many types of obstacles. - The Three Primary Types of Obstacles. Obstacles come in many types, shapes and forms. Some are a reflection of our own internal limitations while others are external, a reflection of events, circumstances and the environment that surrounds us. Whichever they are they can keep us from reaching our goals. What they all have in common is that they reduce effectiveness, freedom and increase the amount of cash you need to spend to live well. As there are systems in all aspects of life so there is also a system for organizing and classifying obstacles. Generally speaking there are two primary types of obstacles.

1. Internal resource obstacle IROs. Poor time management skills, shyness, or an inability to surf the Internet are all IROs. When there is an internal resource obstacle, it will control the accessibility to and the effectiveness of your investing choices.

2. Those that are created by changes in the marketplace - I call these market driven obstacles (MDOs). Market driven obstacle exists when the demand for a good or service increases or decreases in such a way as to negatively influence your ability to obtain it at the lowest cash cost possible. Needing a reduced priced gift on Christmas Eve, or buying a cheap hot dog at a ball game. Your ability to leverage your skills within the framework of transcending or adjusting to these obstacles will determine you success on the investing playing field.

Baby Boomers Must Implement a Different Investment Management Strategy - Right Now!

2009-12-25T04:33:00.000-08:00

By Al Kernek

There is a lot of talk about what people should be doing with their investments during this deep recession. 401Ks and savings have dropped by one-third to one-half for the majority of people. Most advice centers around traditional "wait and hold" strategies, figuring that when the market goes back up, you will regain lost portfolio value. Sell now and you lock in your losses, according to conventional wisdom. THIS IS DANGEROUS ADVICE FOR BABY BOOMERS!

First, there is no guarantee that the stock market is going to get well in the near future. You've heard commentators and government officials taking about a bottoming out this Fall, followed by a gradual recovery. This is pure speculation and perhaps wishful thinking. There are reports emerging that FHA loan defaults are now exceeding subprime defaults - another wave of foreclosures is on the horizon. And no one is talking about the potential for massive personal bankruptcies from credit card defaults over the coming year. What do you think out-of-work people have been living on?!

Baby Boomers don't have time to wait for a recovery that will likely take years to happen. And even then, don't expect the market to rise to the lofty levels seen in the past. If you sit there and passively watch your savings dwindle with each monthly statement, you may lose another fifty percent or so before the bottom is reached.

All the articles I've read and commentaries I've watched avoid the mentioning the Baby Boomer generation. The sad fact is that we are quietly being written off. Our home equity is gone or greatly diminished. Our savings are being savaged. The outlook is not good, and the only advice we are receiving from the financial community is to be prepared to work longer...way longer.

Don't expect your investment firm - T. Rowe Price, BofA, whomever - to notify you with a recommended strategy for Baby Boomers. You are the last thing on their minds right now, somewhere way below their next bailout or executive retreat.

GET MAD! if you still have some savings, take immediate action. Review your portfolio yourself using tools provided by your investment firm or independent sites like SmartMoney.com. If you own stocks or mutual funds that performed badly over the past year and continue to lose value every month, SELL THEM! If your portfolio contains stocks from commercial financial institutions, SELL THEM! GET OUT NOW! Remember what happened to WaMu investors and all the other recent examples. Salvage what you can and re-align your savings into safer bonds, CDs or Money Market funds.

You must do the homework yourself or employ someone knowledgeable who understands the dilemma Baby Boomers face. Those of us in our late fifties and sixties don't have the years to recoup lost earnings. Much of the savings we accumulated over thirty years or so is gone...poof, evaporated. And most of what is left will be gone too unless you take personal control over your situation. There is little chance of getting back what has been lost, but you can do something to prevent losing what is left.

Investing - Managing Risk With Warrants, Options & Leaps

2009-12-22T04:30:00.000-08:00

By Dudley Baker

Regardless of what the markets are currently doing, now, more than ever is the time to take action to protect your portfolio.

Over the last few weeks investors have been very very surprised at the performance of virtually all of the markets with the big initial shock coming from the 9% decline in the Shanghai markets overnight. Many analysts have had some great insight into what the problems are, the effects of them and how investors should approach the markets. Unfortunately, we have many different opinions from these analysts. While differing opinions are great to read it can and does create much doubt in the mind of the average investor. This is truly a time that you, the investor, must firmly believe in your investment philosophy or at a minimum attempt to protect yourself in the event you are wrong.

We at Precious Metals Warrants (preciousmetalswarrants.com)personally follow many of the top analysts and also read as much as possible on websites for information and conflicting opinions. While, yes, we have our own opinions much is based upon the collective views of some of the top analysts in the world. When our favorites are not on the same path we attempt to evaluate the risk of our investments and how to manage this risk with long term warrants, options or Leaps.

Recently Jim Rogers, which I like to refer to respectfully as Mr. Commodity, was quoted as, predicting "a real estate crash that would trigger defaults and spread contagion to emerging markets. You cannot believe how bad it's going to get before it gets any better. It's going to be a disaster for many who don't have a clue about what happens when a real estate bubble pops....the crisis would spread to emerging markets which now faced a prolonged bear run. This is the end of the liquidity party. Some emerging markets will go down 80 percent, some will go down 50 percent, some will most probably collapse."

Dr. Marc Faber says, "most investors are heading for huge losses...but gold to outperform."

Richard Russell says, "gold looks fine. Stop worrying."

Chris Laird speaks of a, "World Liquidity Crisis Emerging."

Another analyst writing on these websites which I respect is Adam Hamilton. Adam sees the possibility of a 2 year bear market in the equity markets similar to the 1973 - 1974 with a drop of approximately 45 - 50% in the Dow by the end of December 2008. On the other hand he sees gold, silver and the commodity sectors increasing as eventually the fear and the fleeing money in the equity markets will find a new home in the commodities. He sees this commodity cycle, by historical standards, as being only about half over with much more excitement to come.

Short-term we did have all markets recently going down together - equities, gold, silver, mining stocks, etc. This has now scared many precious metals investors into thinking that if the equity markets collapse, then so will gold, silver, and the mining shares. This we believe, however, will be only a short-term disconnect before the money goes into the commodity sectors.

A few of the mine fields in the investment arena today:
* World Liquidity
* Yen Carry Trade (and the unwinding thereof)
* Derivative markets
* U.S. Sub-Prime mortgage market
* U.S. Dollar
* U.S. Deficits
* Iraq and Iran

Any of the above could bring down the entire house of cards as we know it today. Scary times? You bet. I personally suspect one day an event will occur in the derivative markets or with the unwinding of the Yen carry trade. These are areas of which the average investor has absolutely zero knowledge other than perhaps hearing the terms mentioned in the financial press or on CNBC. Think about it, investors would not even know what hit them nor be able to explain it. Like being hit by a truck and not even seeing it coming at you. At least it will be quick but the financial pain could easily last a lifetime if you are not properly positioned.

With the above gloomy backdrop, what is the level of risk you are willing to accept?

Remember as investors, each of us must make this decision each day in the financial markets. The decision of risk is ours and ours alone, not our brokers or advisors. The ultimate responsibility lies with each of us. At the end of the day, if our investments do not perform, we must take responsibility for the losses ourselves.

Should we as investors be concerned about unfolding events? Should we be fearful? Should we be running for the exits? Maybe all of the above are appropriate as this is surely a time for immediate reflection on our investments and the protection thereof.

Allow me to address briefly how two different classes of investors could address this financial dilemma:

1. If you are an investor still primarily investing in traditional equities and perhaps the emerging markets:
* Liquidate all your stocks or positions
* Liquidate enough to be comfortable
* Use Puts, i.e. Leaps on the Standard & Poor's 500 for downside protection
* Invest in precious metals, the bullion, mining shares, long-term warrants, call options,
* Leaps or ETF's on gold or silver.

2. If you are an investor heavily involved in the precious metals sector, mutual funds, mining shares or long-term warrants:
* Liquidate enough of your positions to be comfortable holding the cash in Euros
* Increase exposure to the bullion or ETF's on gold or silver
* Purchase Leap Puts on an index, i.e. Standard & Poor's 500 for downside protection

Will the current storms pass without incident? Perhaps, but financial well being and decision making are now front row center.

Successful Investment Management 101 - Portfolio Rebalancing

2009-12-19T04:28:00.000-08:00

By Keith Springer

Rebalancing your portfolio will save your neck…and your heart! “Rebalancing” is clearly one of the most misunderstood concepts for individual investors but should be one of the most widely followed by every single individual investor. After all, institutional investors have been doing it religiously forever and wouldn’t think of ignoring it. This could be why institutions routinely outperform individuals year after year. See our site at http://www.capfas.com.

Rebalancing is simply the process of realigning the weightings of one's portfolio of assets. For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting it into cash or bonds. Sometimes, all it takes is a periodic rebalancing of your portfolio, back to your desired mix of stocks and fixed-income investments, to smooth out the bumps.
Making these adjustments can make all the difference between complete financial success and dismal failure. A study by Brinson, Singer and Beebower determined that the proper asset allocation, the selection of which specific asset classes to invest in and how much, accounted for 91.5% of the success of a portfolio! All other factors, such as market timing, security selection and other factors account for only 8.5%. This is very surprising to most individual investors.

The proper asset allocation depends on not only your financial, but your life’s goals and dreams. When to retire, how much you’ll need, paying for college tuition, getting that sail boat etc, all affects how much risk is needed to take in order to achieve these objectives. If you’re younger with a higher risk tolerance, you’d allocate more to stocks perhaps to more aggressive sectors. As you get closer to retirement, you can not afford the huge gyrations, so you might lessen the aggressive stock holdings.
For instance, over the last half-century, the worst one-year stretch for a portfolio of 60 percent stocks, 30 percent bonds and 10 percent cash was a loss of 24.1 percent. That occurred in the 12 months that ended in September 1974. By comparison, the worst one-year loss for a more conservative mix – 40 percent stocks, 40 percent bonds and 20 percent cash – was just 15.5 percent during the same period. Yet to achieve this lower risk, the switch in asset allocation strategy would have reduced your average annual returns to 8.3 percent from 9.2 percent.

For some investors, that may be too significant a loss of potential returns to consider. So does tactical rebalancing work, rather than permanently reducing your exposure to stocks for the long run? The answer turns out to be yes! Say you started investing at the end of 1984, in a portfolio consisting of 60 percent stocks, 30 percent bonds and 10 percent cash, and never rebalanced this portfolio back to that 60-30-10 ratio. Instead, you did what a surprisingly large percentage of individual investors do: you let the market take your investments for a ride.

Through the end of June, this strategy would have earned an average annual gain of 11.1 percent since 1984. Now, had you started in 1984 with the same strategy, but this time rebalanced your portfolio annually, you would have earned nearly as much on your investments: 10.7 percent a year, on average. But at the same time, that portfolio would have been 18 percent less volatile, based on standard deviation. The buffering effect of rebalancing might have been saved your heart AND your neck!

Unfortunately, a vast majority of individual investors fail to take that simple step. According to a new study by Hewitt Associates, the employee benefit research firm in Lincolnshire, Ill., only 18 percent of workers who invested in a 401(k) retirement plan rebalanced their accounts in 2005 as well as in 2004, according to Hewitt. The fact is, whether or not you tweak your mix of stocks and bonds, the market will do it for you – probably in a way you won’t like.

Over the long term, stocks, tend to outperform bonds. So “if you rely on inertia and don’t rebalance regularly, over the long run, you’re going to end up with a bigger allocation to stocks than you started with. However, rebalancing is not just about resetting your mix of stocks and bonds. You should also consider periodically resetting the types of stocks or funds you own. This is a critical piece of the puzzle many investors overlook. I review account statements all the time, and more often than not, people tend to own stocks and funds that they bought years ago in very different market environments with the hope that these former leaders will be lead once again. Most of the stocks that lead the last bull market have severely underperformed this time around and it will most likely stay that way. Hope is not a strategy!

If you have not rebalanced your portfolio for several years, chances are that you probably have higher risk than you intend and probably overexposed to the most volatile areas, so rebalancing may be critical.

Be the expert…or hire one! Personal finance is serious business. You need to get the fundamentals down pat, spend a lifetime updating yourself on the subject, and learn the ins and outs of the financial markets. For some reason people always think they can take short cuts with their asset management and retirement planning. The biggest mistake one can make is to fail to educate yourself or hire a finance specialist to take care of you. Men and women, but especially men, hate to ask for directions. This is a cliché about driving, and I don't know if it's true or not, but it most assuredly is in personal finance.

For a free portfolio review and asset allocation report that is tailor made for you, call us today. Your success may depend on it!

The Investment Management Guide to Business Management

2009-12-16T04:26:00.000-08:00

By Hans Bool

Investment is about allocating different investment instruments into a portfolio in such a way that this portfolio is aligned with your personal profile.
Banks and financial advisors could help you achieving this alignment by offering a certain modelportfolio. This is a sort of benchmark that corresponds to a certain (risk-return) profile. By a series of questions, you can find out about your investment profile and having done that you can select the appropriate model portfolio.

Another question the financial advisor will ask you is the purpose (or long term goal) of your investments. Your goal and your investment profile together serve as a personal investment strategy. The model(portfolio) serves as a benchmark; if your portfolio grows, the distributions of the different assets will change. You are then to take (operational) actions in order to re-establish the alignment of the portfolio with you profile.

If you translate this to business management, you will end up with a performance management approach.

First you need to find out your business goal, which we could say is growth (growth of the business portfolio). This can also be a departmental figure. Than you need of profile of your business. This profile could be compared with the investment profile. Although not exactly the same, the business profile is also about risk-and-return characteristics. One company is different than the other. Risk-and-return is part of this; imagine that a cyclical (trading) company is much more prone to (business) risk than a ‘normal’ producer.

Companies need a strategy in order to achieve future growth. This strategy could be the same as the current business profile, but normally it is not; not seldom, strategy implies new business development and growth but not necessarily in the same direction that is indicated by the current profile.

Performance management is a next step. Performance management is about measuring where you stand in the process of achieving the strategy. Or put differently using the investment jargon; how does your strategic profile match with the profile of your current organization? Aligning these is you objective in achieving the business strategy.

Active Fund Investment Management – Do You REALLY Know the Costs?

2009-12-13T04:22:00.000-08:00

By Ray Prince

This article looks at a very important topic:

Investing for your future.

The reason I say very important is that in our experience some investors have either limited knowledge on the subject or a lack of access to enough information to help with their decision making.

When dealing with clients’ money, we are very clear about the way in which we recommend they invest. This is based on a concept known as Modern Portfolio Theory, which uses passive not active funds.

NOTE: Passive funds do not employ the services of a fund manager, whereas active funds do.

Our clients are then rewarded by accepting the market return based on the risk they wish to take at a lower cost than many actively managed funds.

When meeting new clients they are often not aware of the historical failure (in terms of consistent performance) of many actively managed funds and the associated high costs.

As costs are the one thing we can control, we would normally illustrate these costs and how they eat
into the real return they could expect.

Let’s look a little further at these costs.

Ignoring trading costs for now (which is a cost based on how many shares the fund manager buys and sells in a year), below is an example of fixed costs of both passive and active funds.

James has existing investments made up of existing PEPs/ISAs/Unit Trusts totalling £100,000.

The advertised costs would typically be:

• Existing active annual management charge – 1.5%

• Equivalent passive annual management charge – 0.9%

What we can deduct from this is that the active manager has to grow his fund by 0.6% per annum to equal the passive fund.

However, what is missing here and what fund management companies have to show (introduced recently), are the costs to trade the shares that are incurred in any one year.

Example

The average actively managed fund trades 75% of its holdings every year, and the average passive fund trades 15%.

Taking into account the annual fixed charges above, the effect of this takes the typical charges to:

• Existing active annual total charges – 2.85%

• Equivalent passive total charges – 1.17%

This is a massive 1.68% difference!

Other Considerations

We need also to bear in mind that a lot of funds trade more than this. For example, it is not uncommon for some funds to trade 100-300% rather than the 75% average.

This takes the costs to something like 3.3% - 6.9% per annum!
(some 2.1% to 5.7% above the costs of a passive fund).

Exceptions

There are exceptions to the debate though.

There are a number of actively managed funds that have delivered consistent returns over the long term. Examples are Fidelity Special Situations run by Anthony Bolton and Neil Woodford who runs the Invesco Perpetual Income and High Income funds.

However, we cannot be sure that these funds will continue to prosper in the way they have, but we can be sure they will carry the extra expenses highlighted above.

The Financial Tips Bottom Line

Actively managed funds can be expensive, especially when you take ALL costs into account. As we can see, if a fund has a high ‘trading percentage’ the overall costs increase significantly.

If you use active funds make sure you request this information from your fund manager(s) and review your portfolio.

Recommended Reading

There is an excellent (readable) book that has recently been released on how to invest your money. “Smarter Investing” by Tim Hale, paperback, is available at amazon for £10.99.

SMSF Investment Management - Thinking Like a Professional Fund Manager

2009-12-10T04:20:00.000-08:00

By Christina Bong

According to this article "Small Funds now Biggest Sector of Super Industry" in The Australian newspaper on 1 October 2008, Self Managed Super Funds (SMSF) have become the biggest sector in the Superannuation industry. As mentioned in a speech by the Australian Deputy Commission of Taxation in a SMSF conference in February 2009, funds invested in the sector is around AUD348 billion or 31% of total super funds and that equates to nearly twice the market capitalisation of the top 5 banks put together!

As a group, SMSF trustees control a staggering amount of money and we should start thinking as professional fund managers rather than as "mum and dad" retail investors. I had a look at the Education for Professionals section on the Australian Stock Exchange (ASX) website and I found a document on education for Australian Equity Fund Managers. Most of the presentations mentioned in this document are about using options to hedge risk and to generate additional income, which sound very much like what I have been doing for my SMSF.

Just knowing this has certainly boosted my confidence in my own investment management capabilities. I used to think that all professional fund managers would surely be more knowledgeable than me but if the ASX still needs to educate some of them on what I already know, that may not necessarily be the case. My suspicions have been further confirmed by this article "Aussie Super funds are Among the Worst" in the Herald Sun on 25 June 2009, which tells us that a report released by the Organisation for Economic Co-operation and Development (OECD) showed that Australian super funds turned in the second-worst performance of all 30 OECD countries, suffering losses of almost 27 per cent last year. I am really glad we decided to take control of our super savings by starting our own SMSF in 2007. Instead of losses, we are expecting a positive return for the last financial year.

Investment Management - Put More Smart Cash in Your Future

2009-12-07T04:18:00.000-08:00

By Steve Selengut

The stock market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor and if they don't measure their progress too frequently against irrelevant indices.

The income securities market is most often a less dynamic place where investors can consistently make reasonable returns on their capital if they understand the basic principles of the endeavor and if they focus steadfastly on the income produced by their holdings.

Securities markets are truly fascinating--- replete with promise, mystery, and unscripted daily drama. But individual investors are even more interesting. We've become media driven creatures that must have reasons, predictability, blame, scapegoats, instant gratification, and an imaginary sprite called certainty.

We are becoming a culture of hindsightful speculators, attempting to replace the raw beauty of unpredictable market and economic cycles with an upward only mythology superimposed on a vast casino-like landscape. Most would-be investors are simply keyboard-skilled gamblers, impatient, lazy, and unfamiliar with the nature of the securities they bet upon--- in either direction.

Wall Street provides chips, tables, odds, croupiers, and atmosphere. There are no controls on speculation, and (obviously) no oversight to prevent product creativity from undermining the very foundations of capitalism. Big brother picks up the pieces and imposes more controls and safeguards on the innocent--- while we re-elect the guilty.

Yet the beacons of simplicity burn brightly at the end of the always-under-construction tunnel between The Battery and Capital Hill. If investors could focus on them (unemotionally) through a cycle or two, the sanctity of stocks and bonds would be re-affirmed and the rationale for derivative drug abuse all but eliminated.

The classic investment strategy that worked so well prior to the development of the multi-level derivatives is so simple, and so trite, that it just begs to be ignored. B-o-r-i-n-g! Surely, the investment Holy Grail will never be found by individual issue buyers and coupon clippers.

Investors willing to identify the realities of our wonderful marketplaces, to recognize and embrace the opportunities with an understanding that goes beyond media hype and blog threads, will survive and prosper. They just need to look back, to rediscover the principles of investment success that can shelter their futures--- but without futures.

The Investor's Creed is a pillar of the Working Capital Model, an investment management methodology developed over three decades ago. It synthesizes basic asset allocation principles, an IGVSI trading strategy, and market psychology into five principles of portfolio operation that transcend market cycles, administrations, and global temperature changes.

Remember, this is a summary and it should raise questions--- limited explanation is provided:

One: "My intention is to be fully invested in accordance with my planned equity/fixed income asset allocation." There must always be a "planned asset allocation" using cost basis instead of market value for calculations. Always be looking for buying opportunities that meet your quality, diversification, and income (QDI) standards.

Two: "Every security I own is for sale, and every security I own generates some form of cash flow that cannot be reinvested immediately." It is important that a profit-taking target is assigned to every security; it is essential that you pull the trigger when or before the target is achieved. The words "I do not need the income" cannot be thought, much less uttered.

Three: "I am happy when my smart-cash position is nearly 0% because all of my money is then working as hard as it possibly can to meet my objectives." Smart Cash is compounding capital, created by portfolio dividends, interest, and profits. If it remains uninvested while new investment opportunities exist, it loses IQ points rapidly. Long corrections can make you too happy.

Four: "I am ecstatic when my smart cash position approaches 100% because that means I've sold everything at a profit, and---" This condition should occur whenever there is a serious rally going on in IGVSI equities and you have no income asset allocation in the portfolio. In that case, it's a good time to re-assess your asset allocation plan.

Five: "--- that I am in a position to take advantage of any new investment opportunities (that fit my guidelines) as soon as I become aware of them." Unless the equity market is at an all time high level, it is likely that there are new buying opportunities out there. But never relax your QDI standards, or rush into overpriced securities.

Simply put, The Investor's Creed portfolio management plan keeps you buying investment grade securities when prices are low, and selling them at a relatively easy to achieve profit-taking target. Investment grade companies are most likely to survive major financial havoc, are generally in the forefront of cyclical advances, and are always kind enough to provide regular cash flow for portfolio building or grocery shopping.

If you've ever turned an unrealized gain into a realized loss, if you've ever sold mutual fund shares to deal with monthly expenses, if you've ever been unable to take advantage of low prices for lack of income, this is an approach you need to consider. It won't work without well thought out QDI rules and a disciplined mouse.

Finding the Right Alternative Investment Management Company

2009-12-04T04:16:00.000-08:00

By Chris Robertson

Roiling stock markets and uncertain returns have investors understandably wary these days. However, the current global economic situation also presents unprecedented opportunities to savvy investors. Prices are low and the potential for short- and long-term profit is high, making it a great time to take your money out of the proverbial mattress and make wise investment choices.

Every investment has an associated risk; the trick is to balance the risk of reward with the risk of loss. That's where alternative investment management companies come in. Although making money is never easy, a knowledgeable management team can funnel investments into the vehicles that are most likely to produce a financial profit.

In this day and age, the key to producing investment income is diversification. While alternative investment management (AIM) companies by definition use controversial vehicles to generate profits, the best businesses tap into a wide range of investment types. This diversification minimizes risk, in that if one or two investments under perform, others in the portfolio are likely to make up the difference.

So, what types of investments do AIMs engage in? Stocks and bonds certainly play a role, but AIMs also take advantage of instruments like Forex and hedge funds. For the uninitiated, Forex is the Foreign Exchange market, whereby currencies are bought and sold. As the largest financial market in the world, Forex involves buying and selling currencies in pairs, such as buying the Euro and selling the U.S. dollar, or buying the U.S. dollar and selling the Japanese yen. As you can imagine, a great deal of expertise is required to successfully buy and sell currencies, yet a full 95 percent of Forex activity is from speculators (as opposed to governments and companies that must convert from foreign to domestic currencies).

Although hedge funds have gotten a bad reputation in recent months, particularly in the U.S., the reality is that hedge funds can make spectacular profits. That's because hedge funds can succeed in minimizing risk by "hedging" their investments, and by engaging in riskier behavior that can realize substantial returns. Hedge fund activities can range from short selling and buying distressed securities to investing in gold and commodities.

When searching for an alternative investment company with which to do business, start your search online. The Internet has made it easy for private investors to hook up with AIMs for a minimum investment. Yet it's important to select a company that has a professional financial team and sound financial advisers who can enhance returns while reducing the risk of investment. In addition, you should look for an offshore company. Because there are fewer regulations, and because these companies typically don't have opulent offices in several different countries, their compliance costs and overhead expenses are both low. That means lower fees and a greater return on your investment.

Finally, look for an AIM that puts the customer first. Unparalleled investor relationships are an asset that separates the best from the rest. With a commitment to helping investors grow their own portfolios, the AIM will continue to grow and create a stable investment environment for all involved.

Going Into Real Estate Investment Management

2009-12-01T04:10:00.000-08:00

By Kamyar Shah

Nobody can say for sure that there is any business that is 100 percent secure, and that always gives a positive return, regardless of it being not properly looked after by the owner. The case is the same with real estate investment management . If done properly, you can earn a good sum of money out of the same. There are many satisfied investors who have changed their lives by going in for this business. More so those who had purchased villas before the prices boomed up. With the prices of other commodities rising due to the increase in oil prices, the prices of villas are going down. This is the right time to put in some of your money into villas. They will pay you back far more than any other venture can.

If you think that you have a sixth sense for understanding and running a new business, you are wrong. If the new business you are planning to start has any connections with your old business then you do stand a chance, otherwise not. The same holds true for real estate investment management . You need to have basic ideas about how villas should be taken care of, what are the risks involved and how to avoid risks all together apart from other things before you embark on this type of work. The amount of money that you have to invest over here is far more than what you need to invest in a normal business. Therefore it is important that you know the basics right before stepping ahead and parting with your cash.

Spend some time and learn as much as you can about the market. There are many web sites which you can visit that will help you to have an in depth idea about real estate investment management . Apart from this there are a number of books dealing with the subject and spending some time reading and understanding them before you part with your money is a good idea. There are two ways of approaching a business, the casual way and the professional way. It goes without saying that those who follow the professional approach always ends up being a winner. There are so many ifs and buts in this field that it takes experience too. However, if you are well prepared when you start, you shall be able to avoid the most dangerous pitfalls.

Once you have understood the basics of real estate investment management , there are some software that will help you to take care of the villa that you are planning to purchase and lease out. Before splurging your money on the villa of your choice, check out its selling price with a number of agents. At times there is more than one agent for a particular villa, and someone might offer you a slightly lower rate than the other. Though the difference might not be awesome, it does make a difference.

Finally, check out the history of the villa you are intending to buy. Are there any dues by ways of taxes? Has any part of the same been sold to someone? Before planning to spend your money on a villa and then going in for real estate investment management , you need to make sure that the villa is free from any encumbrances.

Real Estate Investment Management Property

2009-11-28T04:08:00.000-08:00

By Kamyar Shah

Real estate investment management property can be found in many ways. The investor runs into problems when he does not know the specific type of investment he would like to focus on. Unfortunately, the type of property invested in is significantly affected by what best fills your investment desires. Of all the types of real estate investment management property available, this blog will focus on finding property for flipping or rehabbing the property.

Hunt for Bargains

It is crucial to do your research and seek bargains for properties that will have excellent potential for flipping. Bargain property is sold cheap for a reason. Most of the time the bargain is due to simple cosmetic damages and are simple to fix. A good place to start your search is to work with a realtor who is willing to accept lower prices to help find those bargain properties. A knowledgeable professional gives you access to properties normally unavailable to you. Many properties are available only through professional listings.

Look for good deals through foreclosures, auctions and homes on the verge of foreclosure or property being disposed of due to divorce. Many owners who find themselves in theses situations are very willing to be more flexible with the price. By no means offer the full price being asked for. Begin your negotiations with a low offer and work up. It is possible you will lose some properties this way but in the end you will your profits will be more for a smaller investment in the property you want.

Be familiar with the Neighborhood

Learn as much as possible about the neighborhood before putting a bid on a potential real estate investment management property. Family homes put in the middle of retirement homes will not sell well, nor do you want a singles resident in a family area. Avoid areas on the decline since profits will be much lower, and selling might be impossible to recover what you put into the property. You should look for bargains that are being rehabilitated with low crime rates and a have outstanding possibility for growth.

Family rehabs should be in safe neighborhoods. The crime rate should be low with access to good schools and family entertainment opportunities are offered. Having these things affects the price you will be able to expect when the renovations are completed. The neighborhood also affects the types of renovations you will need to do on the property. Purchasing a property in an area unfamiliar to you can be the same as buying a home sight unseen.

Get a Complete Inspection

One of the most important steps when selecting a real estate investment management property is getting a complete inspection before purchasing. Problems that may arise while you are in the process of rehabbing can be prepared for with a qualified home inspection. Knowing ahead what needs to be done will affect how much money you should offer, what will need to be invested in repairs and the final profit you can expect in the end.

Without a complete inspection by a qualified professional could lead to disaster once renovations begin requiring unexpected money and time to find the root of the problems. Inspections can save you money and time by pointing out the potential trouble that will need to be repaired for resale. An inspection will also be aware of any structural problems, problems with codes and any other things that may lead to potential loss of a real estate investment management profit.

Do Not Buy the First Property You See

Remember this, you do not necessarily need to purchase the very first property you see. If it does not feel right, pass it up. Buying real estate investment management property is part science and part instinct. Continue to search until you find the property that meets all your investment needs.

Finding the perfect property to invest in can be found in many ways. Know the specific type of investment you want to make. Do your homework. Focus on those types of properties that interest you to fulfill your investment desires.

5 Investment Managers You Should Learn From

2009-11-25T04:05:00.000-08:00

By Don Swanson

Legions of investment gurus beckon us to follow, but is anyone really worth our time and money? The most popular investor in the world is Warren Buffett, but is he really our best example? Why do we seek to emulate Buffett, and not other spectacularly successful investment managers? Does he deserve his oracle status? While you may not agree with all the differing styles, let's examine him alongside other legendary investors:

Warren Buffett

He has been turned into the icon of the American Dream. With his humble demeanor and aw-shucks attitude, he buys quality business for less than they're worth, where the market dominance of the firm creates a "margin of safety" in the stock. His problem is that many of his investments are in declining industries, where he could have sold the businesses and reinvested in better firms (see Dairy Queen).

He learned investing from Ben Graham, who first wrote about this margin of safety. But over time, Warren evolved from buying decent companies for dirt cheap to buying great firms for a fair price. Fortunately for him, he is now the buyer of choice for closely-held businesses, which gives him the right of first refusal for deals inaccessible to most managers. Unfortunately, missteps like selling index puts near the market highs have slightly tarnished his sterling reputation.

Other than heading a large firm and his status the world's richest man for a time, what makes him so endearing? The public swoons over his image as a humble, down-to-earth man making simple buys that the average investor believes they can imitate. His main strategy, on its face, is quite simple, but 20% returns over 50+ years is by no accounts easy.

David Swensen

Next to Buffett, Swensen has one of the best reputations today. He has managed the Yale endowment since 1985, garnering compounded returns of 14.5% even after a 25% drop in the last fiscal year. He advocates passive buy and hold allocations in a retail investor's portfolio, going so far as to recommend his own lazy portfolio:

- 30% in Vanguard Total Stock Market Index (VTSMX) - 20% in Vanguard REIT Index (VGSIX) - 20% in Vanguard Total International Stock (VGTSX) or (15% inVDMIX and 5% in VEIEX) - 15% in Vanguard Inflation Protected Securities (VIPSX) - 15% in Vanguard Short Term Treasury Index (VFISX)

However, his success at Yale doesn't lie in passive buy and hold. He is famous for moving beyond normal stock and bond allocations into alternative investments, including hedge funds, private equity, timber, commodities, etc. He may still buy and hold his investments, but he has access to the best alpha-producing managers in the world, and takes full advantage of their availability.

He argues that average investors should not try to pick investments, as they are hopelessly outclassed by institutions with the best analytics, talent and strategies.

George Soros

In short, his strategy is to ride massive global trends, and then capitalize on his belief in Reflexivity. Reflexivity is the concept that faulty belief systems create unsustainable trends. When the belief pervades the great majority of market participants, a low risk trade can be made in the opposite direction of the trend.

He is interesting in that his great desire is to be remembered not as an investor, but as a philosopher and philanthropist, donating funds to encourage democracy in eastern Europe, and proclaiming his theory of Reflexivity.

He is most famous for "breaking" the Bank of England, betting against the pound because of a faulty policy. His other most notable accomplishment is founding (with Jim Rogers) and managing the Quantum fund to average returns of 30% from 1970-2000. His strategies are much harder to imitate than Buffett's, as he bets on currencies, stocks and bonds all over the world, requiring a diverse economic acumen far beyond any normal investment manager.

William O'Neill

He is the founder of Investor's Business Daily, and one of the first to marry fundamental and technical analysis into the same stockpicking strategy. He advocates buying newer stocks with high earnings growth and low debt, but only if they have leading price action during a bull market. His most valuable lesson is the maxim of cutting your losses at no more than 7-8%. He writes detailed selling rules for all possible scenarios because he learned firsthand that it's not the winnings that make a great investor, but knowing how to take a loss.

In order to be successful with his strategy, one must keep a watch list of suitable stocks, waiting for a stock to reach a buy point. This point is supposed to be the least risky price at which to buy. O'Neill's strategy is popular because it presents the possibility for large returns while limiting losses.

Richard Dennis

It is very understandable if you have not heard his name before. Dennis traded his account from a few hundred dollars to $200mm. He is famous for creating the "Turtle Traders," a group of trend-following traders that he taught from scratch to become successful investment managers. He would trade any asset classes, but created rigid technical buy and sell rules that he followed religiously, trading breakouts in the direction of the current market trend. While his technical strategy was fairly simple, it required discipline that was very difficult for most people. He himself suffered large losses when he diverged from his strategy.

Are you willing to backtest strategies and follow the proven ones even when they underperform the market, in exchange for fantastic returns in the long run? Learn from Richard Dennis.

Conclusion

Regardless of style, you can learn from each of the above investors. Each is a master of their own style, a style that fits their personality and strengths completely. Buffett could never follow Richard Dennis, and Swensen could not be a George Soros. If you find an investment style you are comfortable with, stick with it at all costs.

A word of caution, though. How much of your life are you willing to devote to investments? If you are not willing to live and breath the markets, don't even think about global macro. If your emotions get the best of you, stay away from Richard Dennis. The easiest to follow would be Swensen, who as a master asset allocator does not trade individual assets, but instead works to diversify and find the best managers.

Do you think it is possible to emulate the masters, or is it purely luck that has made them successful? Are there any other managers that you believe are better than those above? Can any average person become a great investor?

Investment Manager Facts

2009-11-22T04:03:00.000-08:00

By Shamin Napreeda

When it comes to investing large amounts of assets, an investment manager is the logical choice for most people. Most mutual fund companies or investment firms have investing counselors who are in charge of handling individual accounts or complete mutual fund groups.

They do this by controlling an investor's portfolio either by direct action from the client or discretionary money management where the investor allows the investing manager to decide on what to do with his investing instruments. An investor is not just a private client but also refers to any agency that uses asset management investing as a key part of their portfolio.

For someone interesting in becoming an investment manager, it is best to have at least a bachelor's degree in business. It is also necessary to complete at least one year of Chartered Financial Analyst Training if you are going to work for an investment firm. Also, it required to get registered and a license when working as an investing counselor.

The first year salary for this job is around 30,000 dollars. It doesn't sound like much, but it has a sharp annual increase that in five years, most annual salaries increase to between 80,000 to 100,000 dollars for this profession.

The most frequent type of investment manager is those that work with mutual funds. A mutual fund manager is in charge of handling large pools of money that individual investors have grouped together and allowed the manager of these funds to handle the discretionary decisions when it comes to investing this money. Most mutual funds consist of investing in the Stock Market, bonds, securities and other short term money market instruments. This type of plan usually benefits all those who are have money in that fund. The downside is that if the assets lose money, all the investors lose money.

Before the current economic situation, investment management was a growing job field but now its job prospects have dwindled slightly during the current recession.

Investment Management Using Portfolio Management Software

2009-11-19T04:01:00.000-08:00

By Wright Brianna

Investment Management denotes the management of different securities as well as assets in a professional manner, in order to meet some specified goals of Investors. Securities commonly refer to stocks, shares, bonds etc., whereas assets may include real estate, jewelry as well. Investors can be either institutions like corporations or insurance companies; or private investors like individuals.

Therefore, an Investment Portfolio can be defined as the list of financial investments held by the investor taken up collectively. Investment Portfolio Management therefore refers to the process by which an investment portfolio is accessed and maintained. There are several professionals who specialize in this function.

Now, along with theses professionals, more and more people are opting to go for a more savvy solution, i.e. Portfolio Management Software. As it is, today's world of evolving technologies has also grown up to create soft wares which would help investors to manage their investment portfolios properly. A Portfolio Management Software is equipped with a number of features, which can help an investor in effectively managing his/her portfolio.

However, it is important to choose a Portfolio Management Software, which should be good enough to carry proper features which would help in managing your portfolio. So, the software should carry features regarding keeping records of the investments, which have been made, as well as disposed of, along with dates and times, linking to exact trades. Such records would help you while you are evaluating your annual or monthly income from the portfolio.

Along with this, your software should also support the different kinds of accounting methods, which would help the investor at times when he/she would be required to do the financial record keeping for the purpose of payment of his/her tax returns.

Nowadays, most investment portfolio management soft wares have the facility of preparing as well as storing relevant information in regard to a number of portfolios. This way, an investor can keep separate records in terms of short term, medium term as well as long term investments, along with some goal-specific investments as well such as tax saving investments. Effective software would offer numerous to innumerable number of such portfolios.

Investment portfolio management software would most often reveal real time prices of stocks and shares in the market, where the investor is dealing into. The real time price ticker might also constitute various features like tracking the shares that the investor has invested into, or is tracking for the purpose of future investment. The graph might also show different markers for Sell or Buy prices.

Property Investment Management - Is it Worth the Cost?

2009-11-16T03:59:00.000-08:00

By Chris Smitts

Do you plan on investing in some property? If so, have you thought about how you might manage that investment? If you don't intend to live inside of the property that you have purchased, you may want to look into property investment management.

Professional property managers can help you keep your investment in order, and some of them can even manage tenant relationships for you. In fact, most people that own some kind of rental property almost never manage their own investment. Why? There are numerous reasons why this type of management is best left up to professionals.

You may be a great investor. You may invest in numerous things that are extremely lucrative. You may even be able to find great properties to choose from, and you might select the best possible property that's for sale. All of this is great, but investing really has very little to do with managing. How is this possible?

Managing a building that includes any kind of tenant (commercial or otherwise) can be a real hassle. This is especially true if you do not have any management skills. Purchasing property is one thing, but property investment management is quite another.

Sometimes, it's best to put the things that you do not know about in the hands of a trained professional. This way, you can work on your investments without worrying about tenant issues. How do you find a great expert for your property? Well, start by asking for referrals, and then move on to the internet.

A great property investment management firm will connect you with one individual manager that will handle all of your affairs. In addition, you should know all about their operations before you actually commit to any kind of contract. If you think that you can manage your own property, then give it a stab.

Otherwise, leave the property investment management up to the professionals. Keep in mind that investing in property is something you may be good at, while actually keeping tenants at bay may not be part of your skill set. Wouldn't it be nice to own a rental property without worrying about all the extra things that go along with it?

After all, you are simply an investor, not a property manager. In this case, finding a great management firm is your best possible option. Go ahead and invest in a rental property, just make sure that you hire the right people to manage that property.

Get Reviews on Investment Management Service and Bank Accounts

2009-11-13T03:57:00.000-08:00

By Shruti J.

Investment management is the professional management of various securities (shares, bonds etc.) and assets (e.g., real estate), to meet specified investment goals for the benefit of the investors. The provision of 'investment management services' includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Since businesses are growing at an incredible pace with global expansion plans, an investment management industry is also evolving at breakneck speed. In order to achieve its maximum potential, every company has to manage their growth strategically, mitigate risks and accept regulatory analysis; and they have to do it all in a decisive and clear-sighted manner. There are many investment management companies who have highly specialized asset management professionals who can provide clear insights into the most pressing issues of their clients.

These professional investment management companies offer their clients a wide range of services. They provide advice on investment and related matters and help their clients manage their investments, so they can achieve maximum returns regardless of market conditions. They help their clients to protect wealth in the most appropriate and effective manner. They even avail the clients with risk management strategies for long term as well as short term investments. Many of the latest innovative techniques allow a more comprehensive control of risk, without compromising the opportunities for healthy returns. To get the best of investment management, it is advised to hire investment management companies who are specialized and focus their approach towards client's goal achievement. They prepare the monetary investment portfolios to show a clear picture of financial status of company. These services are aimed to identify the assets or resources of the company. Thus, an investment management service is the best way to gain optimum utilization of the available tangible and non-tangible resources for gaining maximum return on investment.
Bank accounts are the safety lockers of our lifetime investments as they offer safety and security when we deposit our investment like cash, jewelery in them. In addition to both these factors, bank accounts also allow us to earn interest on our savings. Bank accounts are the most important necessity of our life as they give us the assurance of safety of our valuables as well as investments. So, it is advisable to be informed about bank accounts available and some basic information about them. Bank accounts designed to process large numbers of transactions may offer credit and debit facilities. However, there are many types of bank accounts out of which some are commonly used by large number of people. This includes savings account, current account, personal account, money market deposit account etc.

Current accounts are usually meant for businesses or personal client. They are meant to securely and quickly provide frequent access to funds on demand. They allow the account holder to receive payments by cash, cheque, direct debit, standing order, ATM card etc. Overdraft facility is also avail with this account. Saving accounts allow the account holder to set aside a portion of their liquid assets while earning a monetary return. Withdrawals from a savings account are occasionally costly and are sometimes much higher and more time-consuming. A personal account is an account for use by an individual for their own needs. Banks differentiate their services for personal accounts from business accounts by setting lower minimum balance requirements, lower fees, free checks, free ATM usage, free debit card usage, etc.

There are many more bank accounts which are categorized by their operations. However, there is lot of procedural formalities involved while opening any new bank account and one has to be well informed as well as ready with proper documentation. Some banks may apply strict norms while approving any bank account. Thus, first decide your need of bank account and which type of bank account. Be well informed about that account operation, bank reputation in which you want to open a bank account, interest rate charged, transactions flexibility etc.

Principles of Investment Management

2009-11-10T03:54:00.000-08:00

By Steve Selengut

Many Investment Gurus, with a straight face and a gleam in their eye, will insist that successful investing is a function of expansive research, skillful market timing, and detailed technical analysis. Others emphasize fundamental information about companies, industries, and markets. But trends and numbers are secondary to a thorough understanding of the basic principles of Investing and Management, and their interrelationships. The ingredients for a successful investment portfolio are these: stubborn belief in the Quality, Diversification, and Income trinity from Investments 101, and operations that employ the Planning, Leading, Organizing, and Controlling skills introduced in Freshman Management. Here are some things to keep in mind while you season your experience with patience and marinate your investment process with discipline:

* A viable Investment Program begins with the private development of an Investment Plan. The first step is the identification of personal goals and objectives and a time frame for goal achievement. The end result should be a near autopilot, long-term and increasing, retirement income. Asset Allocation is used to structure the portfolio so that it operates in a goal directed manner. The finished Plan must be flexible in design, based upon reasonable expectations, simple in structure and operation, and easy to supervise.

* Use a "cost based" Asset Allocation Model. Although most of the Investment World operates on a Market Value basis for everything from performance analysis to Asset Allocation and Diversification decision modeling, you will improve your long-term results and stay within your allocation and diversification guidelines better by using a system based upon Working Capital. This widely unknown Asset Allocation "model" takes the hype out of daily stock market reporting and keeps the income investor's focus on appropriate statistics.

* Control your emotions, among other things. Clearly, fear and greed are the two that require the most control in the investment environment... particularly in these days of a reckless media, Internet empowered scam merchants, high-speed information gathering/processing, and cheap personalized trading capabilities. Love and hate need to be dealt with as well, but there are fewer out-of-body influences on these. Only strictly disciplined decision makers need apply for your Investment Management position... and you may not be the ideal candidate. Investment Management is a continual responsibility, not a weekend and occasional evenings avocation.

* Avoid hindsightful analysis, and uninformed (or salesperson) criticism. It is painfully comical how hindsight has taken over in our society... in sports, finance, politics, and the professions, everywhere... everyone you hear is second-guessing and finger pointing. No one is willing to take responsibility for their own actions and everyone is willing to sue whoever coulda', woulda' or shoulda' prevented whatever happened. Investors cannot afford to be Little League crybabies. Make one of the three basic decisions (which are?) and don't look back. No person or program can predict the future, and your portfolio requires management today. The playing field for the investment game is uncertainty.

* Establish a profit-taking target for every security you purchase. The purpose of investing is to make more money than you could in a guaranteed, non-negotiable instrument. This larger money making expectation comes with an assumption of some form of risk... there are several, and its "in there" in all investments. In Equities, set a reasonable profit target and take less if you can get it quickly. With income investments, never say no to a profit equal to a year's income, or 10% if you like round numbers. There are always new investment opportunities, and there is no such thing as a bad profit... or a good loss.

* Examine Market Value numbers at intelligent intervals. Frequent examination is stressful and non-productive. There are no averages or indices that compare with a properly diversified Investment Portfolio, particularly if your Equity selections are screened for Quality and Income. Investing is a long-term endeavor, and neither Shock(sic) Market symbols nor current yields operate on a calendar year schedule. Look at market peaks and troughs over significant time periods that include "cycles"... and do separate your analysis by class.

* Avoid what the crowd is doing and shun investment products. Consumers buy products; Investors buy securities. The crowd is driven by the very emotions that you must learn to control. Stay focused on your plan; analyze your annual income and trading statistics. Buy and hold creates more real tax problems than real millionaires, and gimmicks and fads last just slightly longer than spring fashions. Always buy good stuff on bad news and sell into good news announcements.

* Don't try to save the world with your investment decisions. Never limit your investment opportunities artificially. Votes work better when it comes to changing your world, and corporations should not be the targets of your political hates... get rid of incumbents, state and local, until there are changes in the tax code, social security, tort law, environmental issues, etc. In the meantime, invest with your head, not your heart. The business of a capitalist society is...

* Keep in mind that you need Income to pay the bills, and that your cost of living in retirement will be higher than you think. If you insist on some income from every Equity security you ever own, and beat-the-bank income from income securities, you will obtain two important things: An annually increasing cash flow that will rise at a rate greater than most normal inflation rates, and a higher quality investment portfolio for better long-term investment performance. (If you use a cost based Asset Allocation model with at least 30% invested in income securities and no open end Mutual Funds or Index ETFs.) Never settle for tiny short-term yields or get hooked on those that are unsustainably high.

* Investing is not a competitive event, ever. You don't need to beat the market. You need to accomplish a set of personalized goals. Not even your twin's portfolio should be the same as yours. The faster you run, the less likely it is that you will succeed over time. Big risks, foolproof gimmicks, and exotic computer programs occasion more failures than success stories. Remember the Investment gods? They created Stocks and Bonds... only Stocks and Bonds!

* Avoid Unrealized Gains, Embrace Volatility, Increase Annual Income, and remember that all key investment moments are only visible in rear view mirrors. Most unrealized gains become Schedule D realized losses. As of today there has never been a correction (rally) that has not succumbed to the next rally (correction). Only an increasing income level can beat back inflation... a bigger market value number just doesn't do it.

Investment Management Equals Change Management?

2009-11-07T03:51:00.000-08:00

By Hans Bool

Simple formulas are often wrong or do not grasp the whole issue. Of course, but sometimes a simple formula shows a very important relation.

For example in the world of investments and trading on the stock-exchange. It is all about managing change; the change is that where one trend is followed-up by another one. And it is your task to manage all that.

A first requirement is to understand what is going on. In business a manager, a team a specialist is to know what is going on in the market and adjust the business approach on it. If there is a turn in the market, the company should either cut costs and or increase its sales resources. But the first thing is to understand that something has changed; why don't customers buy as easy as before and how to formulate the product on this change?

In the stock market this is more or less the same, as the change-cycles are much more frequent. Until the beginning of March we had the bear market motivated by fear, now there seems to be a euphoric phase where bad news no longer drives the stock prices. Somewhere in between the trend has changed and if the investor didn't acknowledge that change he will loose - that is according and depending on his trading or investment approach.

The formula in either case is simple:

- acknowledge the change (trend)
- act (accordingly)!

Of course the whole formula is much more complex. It is not only about signaling a change of trend, but also understanding the fundamentals of it. If a trend is only based on fear, the trader should act on it, but also be prepared about the strength - credibility - of the change. How fundamental is it?

Another example: Twitter.

This is something new. The early adapters get in directly, the more skeptical and conservative "investor" professional, ... will wait to see how fundamental the change is.

Remember Second life? I don't hear anyone about it. Whereas it was a real trend where people and especially companies invested heavily... many just before the trend ended...

If you want to manage a change (in either investment or in business):

- keep track of the trends
- check how it fits with your strategy
- change - your investments, resources according to the new situation and on the assumption that the new trend will continue for some time.

In business the trends are less visible and less easy to anticipate or react on. But the idea to change is more or less the same as in other areas: join the new trend if you think it will continue and if it fits your approach; so you will benefit from it.

One important difference between investments and business management is the organization of the portfolio. An investment can be sold in minutes; an organizational change requires much more effort and energy and ... will take time to be effective.

How to Improve Funding Your Commercial Development Pacific Investment Management Fund

2009-11-04T03:49:00.000-08:00

By Bryant Decker

Along the coast of Southern California there are dozens of incomplete or undeveloped properties that seem based on location to have innumerate possibilities of a very profitable future. A number of my close associates and friends have been successful real estate developers in the Western United States for decades and have continue to express to me their frustrations in obtaining project funding. Mitch, a developer in Newport Beach said," I went from receiving 70 to 90% of the cost of construction on an apartment complex at 5 to 8% interest per year through out the 90s and early 2000s to getting offers of 20 to 30% loan to cost financing since mid 2007." The restriction on banks to lend based on poor decisions and a "ask and you shall receive lending" attitude through 2006 has now left this economy in a state where even the most deserving projects are being turned down.

Many of these projects would fill a much needed gap in the construction employment section creating thousands of construction jobs. I sat down with the Vice President of Lending for a very reputable private mortgage fund in Irvine, California; Pacific Investment Management Fund to ask him directly what type of projects they are funding. The private lending world, many times known as "hard money lenders" are attempting to bridge the gap in institution financing that has been created by the frozen credit markets. In my two hour long conversation with Mr. Joseph as we sat at Pacific Investment's mahogany conference table overlooking Newport Beach's backbay he outlined the following guidelines or tips for anyone looking to obtain financing for their development or real estate project.

8 Tips from Pacific Investment Management Fund's Vice President of Lending Brian Joseph:

1. Presentation is a very important step. Take a few days and prepare a concise well organized executive summary. Make sure to paint the overall picture of the project and why this particular project is needed in a crowded real estate market. It is important to separate yourself from the pack this can be accomplish in a well organized and neatly presented packet.

2. Seek the advice of a CPA or Accountant to help in the preparation of pro-formas and/or existing financial performance. Include these specific ratios for any commercial project: Debt Service Coverage Ratio, Return on Investment, Break Even Point, and Vacancy factors using the low industry standard.

3. Have an appraisal based on a conservative approach. Too many appraisals are done for the retail client rather than the wholesale lender. An inflated value kills more projects than any other factor. Developers should advise their real estate appraiser to bring the value in for a wholesale client. This will allow the developer to see true profit margins and adjust cost factors.

4. If you are seeking greater than a 65% loan amount based on the future value of the project and the client does not have the other 35% cash on hand bring in a partner prior to trying to obtain financing. "Skin the game" is extremely important, lenders like to see that the client is willing to partake in the risk with the lender. With the client usually taking the lion's share of the profits it is important to ensure they are willing to take equal part in the risk of the project.

5. Do not try and obtain financing as a rookie, it is nearly impossible to attain financing if this is your first project in this particular industry. For example if you are trying to build a flagged hotel and your background is in residential construction, bring on a flagged hotel advisor prior to seeking financing.

6. Be realistic in your ratios. Plan on an annual interest expense based on a 8-12% interest rate if you are outside the conventional lending arena. Do not have your proformas based on a 6 or 7% interest rate if you are seeking private funding. Many clients projects are profitable at 6 or 7% but debt service ratios are well below 1.00 at the cost of money in the private lending world.

7. The single most important factor in obtaining funding for your development is your Exit Strategy. This is how and when the lender will be repaid. Do not submit a loan request that state the exit strategy is to obtain conventional financing. In many cases lenders funded projects with that single exit and are now stuck with undervalued or non performing properties. Provide three or four different options to pay off the lender at the end of the terms. Investigate USDA, HUD and other Federal loan options as well as different sales strategies to unload the completed project. For example, if you are attempting to build a condominium complex investigate the following exit strategies: (a) conventional financing and the exact current lending parameters that have to be met (b) turning the complex into section 8 HUD housing and what grants are available (c) leasing the complex out as rentals and what the debt coverage ratio would be (d) selling off the individual units and the exact absorption rate that will be needed to liquidate all the properties prior to the note ballooning (e) upgrading the development to be used as an assisted living center/nursing home.

8. If your project is turned down by conventional banks make sure that your project's business plan has covered each of the points above specifically. If your lending needs cannot be met by your local bank or credit union trying submitting your loan to the dozens of private mortgage funds like Pacific Investment Management Fund or Redwood Mortgage in California. Many projects are left unfunded due to the lack of effort and preparation developers and investors are now required to perform prior to seeking financing.

Investment Management Firms

2009-11-01T03:46:00.000-08:00

By Thomas Morva

When talking about investment management firms, it is very important to understand profit maximization and wealth maximization. According to the objective of profit maximization, the ultimate goal of a business enterprise is to maximize its profits. All the efforts of the organization are to be directed to achieve this goal. The profit maximization objective is justified, as business is conducted for earning profit. When profit earning is the aim of the business, profit maximization should be the obvious objective. Profitability is an indicator of the efficiency with which the firm is managed. The higher the profit, the better the efficiency. For growth and expansion, profit is the main source of finance. To meet unforeseen contingencies reserves are necessary, which is possible only if there is enough profit.

However, the profit maximization objective is objected to on some grounds. The term profit is vague. It may assume different meaning in different contexts. It may be short-term or long-term. The concept of profit maximization generally ignores the time value of money. All profit gained in different time periods are taken together. The risk involved in any given project and the uncertainty of return are not at all considered. Accounting bias influences profit.

On the other hand, according to the objective of wealth maximization the ultimate goal of a business enterprise is to maximize the wealth of the shareholders, which is represented by the market value of the shares of the firm. Wealth is defined as the net present worth of the firm, i.e., the present value of all future returns.

Though the wealth maximization objective seems superior to the profit maximization objective, it is to be noted that the former is based upon the latter. The market price of shares, which is the indicator of the wealth of the firm, is based on the long-term returns of the firm. The returns that accrue to the investor would be a function of the earnings of the company. Thus it can be said that these objectives are not competing.

Do You Need an Investment Manager to Make Money in the Stock Market?

2009-10-29T03:44:00.000-07:00

By Tim Parker

All of the great psychologists of the our world would send us to people like Freud for the answer to the question, do we need an investment manager. The fact is that most of us have that ego that psychologists speak of. In our quest for affirmation of worth, we want to think that we're good at everything. How's that for psychological theory?

If that's true, (on Wall Street there is no absence of ego) it may be time to admit that we can't do it ourselves. Just like we can't take out our own appendix, fix our own car, or build our own circuit boards in to a computer, we probably need help with our investment so maybe it's time to put our egos aside and admit that an investment manager would be good for us.

Let's be clear, though. I don't believe that we need to hand our money over to some Wall Street insider although you may consider it. If you have a retirement account through your employer and have mutual funds, there is an 80% chance that the person managing your money isn't doing any better than what the broader market is doing. In other words, if the market is up 3%, that is about all that your retirement is up. Keep in mind that a certificate of deposit could do that good so don't be too impressed.

If we need to drop our ego and get an investment manager, what is it that I'm talking about? The great news is that there are some services out there that allow you to do all of your own buy and selling buy get the advice of somebody who has proven success as an investor.

One of those services is Action Alerts Plus where an expert like best selling author and CNBC commentator Jim Cramer is doing your research for you and all you have to do is buy and sell when he tells you to execute the trade. My secret is that I don't have enough time to do all of my research so I let Action Alert Plus do it for me.

Here's how it works. You will receive e-mails throughout the day that will say something like, "After you receive this alert, I'm going to buy 100 shares of (some stock). The reason I like it is (insert facts here)" If it is one of the stocks that you like and need for your fund, you would trade with him whenever he buys and sells.

You may have started investing because you wanted to save money for your child's college, finance a vacation, or some other expense that is important to you and your family's life only to find that the riches others claim to make weren't coming to you. That's when you know that you need help. There's no shame in asking for help. There is only shame in losing money. Nobody will know how you made your money and you won't care when you aren't the family applying for student loans when your child goes to college.

An Investment Management Software For Easy Stock Trading

2009-10-26T03:42:00.000-07:00

By Zhi Q Huang

Picking a good stock investment management software program can be difficult but the benefits will pay off easily over time. These programs will benefit all kinds of investors. Beginners and advanced traders can use these investment programs to make more money in the trading markets.

They can use it to organize and track all of their current investment picks in stocks. They can manage their entire portfolio with one program. These programs are also handy for providing graphical representations, charts, analysis datas, quote picks, and recommendations to help every investor make more money in the stock market. There are different types of investment tracking software for stock trading. Day traders and professional stock brokers will also. benefit. The really difficult part is choosing a program that is right for your purposes. These software programs are generally very expensive. It's best to see them as a property of investment.

When thinking of buying one, recognize what these software will do for you. How can you make more money with these programs? Realize that these software will track your daily investment progress. It can even report your taxes on time so you won't have to use a certified accountant. That's because the investment management software platform will come up with easily-read reports quickly and efficiently.

So decide if you want to fork over the cash today for one of these investment platforms. It will help you make a lot of money or at least slightly more in the future. Do some research as to the types available. Check the investment forums for recommendations and advice on selection. Many of these traders will already have used one, two, three, or many programs in the past and they can give you a better idea of which ones are best for you.

Market Cycle Investment Management

2009-10-23T03:39:00.000-07:00

By Steve Selengut

Whatever happened to the Stock Market Cycle; the Interest Rate Cycle; Baby Jane? How did Wall Street get away with pushing these facts of financial life down the basement stairs? Most investors, I'm beginning to believe, and all financial advisors, media representatives, and market gurus have abandoned these fascinating curves for the comfort of a straight-edged twelve-month playing field... simple, yes; realistic, not. I have to wonder if things would be different with a more investor-friendly tax-code, but that would be far less lucrative for The Wizards...

Investing with a calendar year focus has no basis in the realities of finance, business, or economics... isn't it obvious that the Stock and Bond Markets are far more closely related to the Business Cycle than to the Earth's around the Sun? Investopedia reports that, during the last sixty years, most business cycles have lasted three to five years from peak-to-peak. The Stock Market Cycle (in terms of the S & P 500 Average) is the period of time between the two latest highs of that average which are separated by at least a 15% decline in the average. The second high needs only to be 15% above the nadir, it doesn't have to represent a new All Time High (ATH). Interest rates (based on the 10 Year Treasury Bond), seem to cycle in the two to five year range, and are much more closely related to Business or Economic cycles than they are to the Stock Market Cycle. Confused?

Well, you should be. Although they are closely intertwined, none of these financial realities are predictable and, therefore, need to be dealt with as hindsightful tools in the performance analysis process... a process that needs to be undertaken using personalized expectations. How many times in the last 20 years do you think that any of these cycles peaked on a December 31st? The "I'll try this approach for a year or so and then change if it doesn't work out better than everything else" mentality, combined with a regressive tax code that rewards losses more than gains, has killed cyclical analysis dead. It's time to get back on our hogs and try something old. Let's re-cycle peak-to-peak analysis like we do plastics and paper products. It might just put more "green" in our retirement programs. As recently as 1980, Separate Account (the first Mutual Funds) Investment Managers were reporting fund performance in terms of income generation and peak-to-peak growth in Market Value. But that was before investing became the number-two spectator sport in America.

Few investment professionals would argue with the observation that a viable investment program begins with the development of a realistic plan, and most would agree that investment planning requires the identification of long-term personal goals and objectives. Some experts would even agree that the end result should be a near autopilot, long-term and increasing, retirement income. Asset Allocation is used to organize and control the structure of the portfolio so that it operates in a goal directed manner. Is this easy or what! It would be if the average investor would just let things alone long enough for them to work out according to the plan. That's the rub. Wall Street, the financial media, and financial professionals (including CPAs) have no interest in letting things work out according to plan... even if it's a plan that they designed.

Is it clear that calendar year performance evaluation allows an average of just six months for an equity selection to 'perform'? Is it clear that the change in Market Value of an income security over the course of a year is meaningless? Is it clear that a portfolio containing both types of securities cannot be compared with an average or index that is comprised of just one or the other? It is crystal clear until it's your portfolio that has had the audacity to shrink in Market Value over the course of the year! Human nature is predictable but not necessarily rational. Mother Nature's financial twin's twisted sense of humor, though, is both... and totally unrelated to third rock movements.

If the change in a portfolio's Market Value is really so important (the Working Capital Model would argue that it is not), why not do it over a period of time that recognizes where we happen to be, cyclically? Interest Rates have cycled seven or eight times over the past twenty-five years; the stock market has been nearly twice as volatile. Peak-to-peak analysis, although hindsightful, raises a type of question that can, at least, be portfolio personalized for analysis:

(1) Did my Equity portfolio grow in Market Value between January 2000 and January of 2002, or between January 2002 and either January 2004 or June of 2006? These were cycles on the DJIA, which at its high in June 2006, was still below the ATH established in early 2000. These are meaningful time periods that can be used to study the effectiveness of various equity-only portfolio strategies. S & P 500 cycles were pretty much the same.

(2) Does my Income Portfolio generate more income today than it did the last time interest rates were at these levels is still the most important question that should be raised... regardless of Market Value. Sorry.

But as important as it may be to determine the answers to such questions, it is equally important to understand why the results were what they were. Did I withdraw money from the portfolio, or take losses on investment grade securities for tax reasons? Did I fail to follow the plan, or lose control of my Asset Allocation? Did I change variable expenses into fixed expenses or allow tax considerations to keep me from realizing profits. Were there changes in the investment markets that would make peak-to-peak analysis less meaningful than in the past?

So by taking away the move-your-money, racetrack, mentality that runs today's investment performance evaluation methodologies, we create a calmer, more cerebral, management exercise with which to tweak our investment strategy. We may have gone backwards because we stayed on the sidelines instead of buying when prices were low. It may have been the strategy, it may have been the management, it could have been the diversification formula, or the buy-sell-hold decision-making rules. It may even have been the fear or greed that influenced our judgment. By looking at things cyclically, and analytically, instead of celestially and emotionally, we either allow our strategy to prove itself over a reasonable period of time or obtain the information needed to change it constructively.

The recent popularity of Index ETFs has detracted from the usefulness of both the popular market averages and the most useful market statistics. Issue Breadth, 52-week High and Low, Most Actives, Most Advanced, and Most Declined figures now include thousands of these hybrid and derivative securities. A bigger problem is the artificial demand created for index-included securities, a demand unrelated to corporate financial statement fundamentals. Another problem for Investment Grade Value Stock only investors is the absence of a well-recognized average or index to use for analysis... the IGVSI and related Market Stats should help.

Analyze this: if the strategy makes sense in the long run, why knock yourself out in months, quarters, and years? Where have all the cycles gone...

Quantitative Investment Management - The Low-Stress High-Yield Approach to Investing

2009-10-20T03:38:00.000-07:00

By Steven Floyd

Are you sick and tired of being stressed out by the stock market's every move? Have you had it with losing big money every time the market turns south? Read on to discover quantitative investment management, also known as the absolute return investing, the low stress and high yield approach to investments.

Most people invest with their gut. And their gut is an awful investment advisor. To make money in the stock market, you need to buy low and sell high. But that's not how your gut works. It gets excited when the market goes up and wants you to start buying when the stocks are moving towards their highest prices, and when they come crashing back down, it wants you to sell. The result -- you stand to lose a lot of money.

Enter the quantitative investment approach. It takes the gut out of the equation. Instead, you're dealing with sophisticated computer models and the input from experienced investment advisors. Of course you will need the right kind of computer models. And you definitely need the right kind of advisors, ones who are working entirely on your behalf, i.e., fee-only advisors.

And make sure that your advisor's investment philosophy is based on quantitative investment strategies, not buy and hold, and that he is not pushing mutual funds.

There are two parts to the quantitative investment approach. Its sophisticated computer models analyze essentially two crucial components that contribute to investment success: the market and individual equities.

1) The market

The computer models analyze the market based on countless indicators and data to determine where the stock market is headed -- up or down. So it can tell you whether it's a good idea to be in the stock market at any given moment -- or not.

There are alternatives, after all. And cash gives you the most flexibility. So if the market is not the place to be, cash keeps your money safe for the time being, yet it also allows you to put it to work the minute the market turns around again.

In a nutshell, a computer generated system will tell you when to invest -- or buy -- and when to get out -- or sell. And it takes all the emotions out of it. You follow the calculations, and the results tend to be far more accurate than your gut could ever be. And far more rewarding.

2) Selecting equities

You also need the second key component of a successful quantitative investment management approach to really make it work. And that part involves selecting the specific equities in which to invest. After all, you need to know where to invest the money when it's time to be in the market in order to get good results.

And that's where quantitative investment management approach really shines. Traditional mutual funds tend to have lots of clunkers mixed in with the good funds. In fact, they give the 80/20 rule a whole new meaning.

With the quantitative approach, the computer selects the best of the best, which results in a portfolio of winners. The computer will also continue to monitor those equities and indicate that it might be time to sell if any of them should stop performing to specifications.

Investment Management Advice

2009-10-17T03:35:00.000-07:00

By Alison Cole

Management investment advice is an encompassing process. A management investment advisor can give you plans that will help you meet your goals by evaluating your situation and exploring opportunities for your growth and success. This expert will help you understand the challenges you face and guide you in making the right investment decisions.

An expert management investment advisor will first gather information from you. This information will concern your goals, family, assets, tax rate, risk tolerance, liquidity and income needs. You will then be given options and recommendations regarding stocks, pensions and irrevocable trusts that match your investment profile. You and your advisor will develop an investment plan utilizing stocks, bonds, cash and other investments that are structured to fit your needs and lifestyle.

You will be giving an investment policy statement so that you know what is being done and how it’s being done. Should changes occur, ongoing evaluations of your situation will occur and meetings with your investment manager will take place regularly. It is important to stay in continual contact with your investment management advisor, because of the constantly changing climmate in the financial world. Values of commodities rise and fall with world events and with the natural fluxuations of the world economy. You will have to stay abreast of these factors through your advisor.

Investment management advisors generally have a wealth of institutional data and knowledge about where best to put your money. They profit when you profit, so it works for everybody. Make sure your advisor company has been in the business for a long while; this ensure they have built up a solid reputation and will not put your wealth in jeopardy.

The Best Investment Management For the New Investor

2009-10-14T03:33:00.000-07:00

By James Leitz

The best investment for the new investor features professional investment management and asset allocation with an investment company you can trust. Though today's headlines make investor fraud look like the national pastime, there are places the new investor can invest with confidence. Read on, and I'll fill you in and steer you toward the best investment management that's very affordable.

As an inexperienced or new investor you need help with investment management and asset allocation, even if you don't fully understand these terms. You also need help in separating the good guys from the bad guys. Let's start with the latter.

Financial fraud and illegal schemes that financially wipe out innocent investors are largely the domain of independent operators or middlemen. You can best avoid them by investing directly with a major investment company. By definition, a mutual fund is an investment company.

To find one you can afford and trust, go to your favorite search engine and enter "top mutual funds". Some of the fund companies listed work directly with investors and have no sales charges. Included are the two largest in America: Fidelity and Vanguard. In my opinion, these large investment companies offer the best investment management that is both available to and affordable to the investing public. They are a great place to start investing.

Some of the funds they offer take care of the asset allocation for you as well, at a total cost of 1% a year or less. These are called BALANCED FUNDS, which in my opinion are the best investment for the inexperienced or new investor who wants to keep things simple. Balanced funds do the asset allocation for you by investing in stocks and bonds and money market securities.

Balanced funds range in risk from conservative to aggressive. You simply pick the fund that fits your comfort level, and they do the rest. Millions of investors trust the major fund companies, and the mutual fund industry has been regulated by the government for years. So, relax new investor and start small.

You can start investing with a trustworthy investment company that takes care of the investment management and asset allocation for you at relatively low cost. Then if you want to grow and learn to invest on your own, find yourself a good investing guide and pour over it. Who knows, someday people might be coming to you for investment help.

The Best Investment Management For Your Money

2009-10-11T03:31:00.000-07:00

By James Leitz

Good investment management requires that you pick good investments, maintain diversification and pay attention to details. Since most people don't really know how to invest on their own, many of them turn to professionals to handle the investment management chore for them. This can be costly. Here's how to get the most bang for your buck ... your best investment.

If you've got several million to invest you're probably not much more knowledgeable than most folks when it comes to investing money - you just have more of it. Hence you can afford to pay big bucks to someone else to pick good investments for you and manage your investments.

Otherwise, you either learn how to invest on your own, pay what you can for professional help, or avoid investing altogether. The latter is a poor choice if you ever expect to get ahead financially. That seems to leave you with two negative choices if you are not really interested in studying investing in detail or paying hard-earned money to someone who calls himself an investment professional.

Don't fret; I've got some good news for you! If you are willing to put forth a little time and effort you can get good professional investment management for a lot less than you think. I call this the peoples' best investment: no-load mutual funds.

Mutual funds in general are designed for folks who need or want help picking good investments and putting together an investment portfolio with diversification. The problem is that some funds have sales charges, yearly expenses and other fees associated with buying, holding and/or selling them. Not only does the fund itself have a cost structure, the investment professional offering them needs to get paid, too.

With no-load funds there is no middleman giving you advice and selling you on the merits of the product (fund). There is no investment salesman telling you how to invest or where to invest ... and charging you for his efforts.

Instead of costing you 5% off the top and 2% or more a year for expenses and perhaps other charges and fees ... you can get professional investment management from some of the largest and best fund companies in the country for less than 1% a year in fund expenses. Period, that's your total cost to invest.

When you invest in no-load funds I suggest you deal directly with the fund company, rather than investing through a brokerage firm's web site. You can go to their web site or call a toll-free number to get info or to open a mutual fund account.

With no-load funds there should be no charges or fees to pay, only modest yearly expenses which are automatically deducted inside the funds themselves. The best investment management deal around? For my money it's no-load funds.

Investment Management Training

2009-10-08T03:29:00.000-07:00

By Thomas Morva

In the early period of development of finance as a profession, i.e., until the early 1950s, investment management was primarily concerned with the procurement of funds. The subject matter was mainly confined to financial problems arising during episodic events like incorporation, merger, consolidation and reorganization. Thus, the traditional role of the investment manager was to raise externally the funds required by joint stock companies. The internal administration of finance was either ignored or dealt with by the promoter entrepreneur himself.

With the passage of time, the role of investment manager has undergone drastic changes. Presently, the investment manager is in charge of determining the total amount of capital required for both the short-term (working capital) and long-term (fixed capital). This is done by proper forecasting and planning of finance. Secondly, their job profile includes investing the funds in assets and projects, with the aim of making profits. This is to be done in such a way that the earnings are more than the cost so that there is a positive net return to the concern.

Now the investment manager is concerned with the management of assets, raising and allocation of capital, and valuation of the firm. Besides, he has to ensure the supply of funds to all parts of the organization, evaluate the financial performance, negotiate with bankers, financial institutions and other suppliers of credit, and keep track of stock exchange quotations and the behavior of stock price.

To play his role well the investment manager has different tools, such as cost of capital, leverage, capital budgeting, working capital management techniques and fund flow analysis/cash flow analysis. Cost of capital helps in deciding the appropriate source of finance. Normally the sources with minimum costs are selected, so that the weighted average cost of capital can be kept to a minimum. Capital budgeting helps in deciding the proper investment mix; the available resources should be used in the most profitable way. For this purpose, suitable projects should be selected from alternative courses by using capital budgeting techniques.

Investment Management

2009-10-05T03:27:00.000-07:00

By Thomas Morva

In a business enterprise, finance is the connecting link of all the functional areas such as production, personnel and marketing, so the management of finance is vital to the smooth performance of the organization. The basic financial operations are investment, which deals with acquisition of fixed assets; financing, which deals with raising required funds from various sources; and profit appropriation, which deals with appropriating the profit earned by the enterprise among the suppliers of funds.

Regarding investment, assets/ projects are to be selected only by considering their net returns. Regarding financing, it is to be ensured that the firm gets the required financing at the lowest possible cost. Similarly, regarding profit appropriation it is to be seen that sufficient funds are provided for the developmental activities of the enterprise, without impairing the interest of the suppliers. In a firm where these operations are planned and controlled properly it can be said that there exists efficient investment management. Thus, investment management may be defined as that part of managerial activity which is concerned with the planning and controlling of the financial resources of a firm.

As every business activity requires investments, investment management is closely related with other areas of management. When investment is managed properly, other areas will also show good performance. Investment management helps in monitoring the effective deployment of funds in fixed and working capital. This will, in turn, ensure better working of the enterprise.

All the operations and resources in a business organization are managed with the same broad objective, i.e., to attain the objective of the enterprise. So each resource or area should be managed in such a way as to contribute to the fulfillment of the objective of enterprise. However, there are specific objectives for each functional area. In the case of investment, the objective is to ensure that the firm obtains the required finance at the lowest possible cost, and uses it in the maximum beneficial way.

Investment Management - The Key to Get Your Finance Under Control

2009-10-02T03:25:00.000-07:00

By Sturat Mitchel

Investment management is nothing but a process of keeping track of all your money investments in various securities and assets so that the investor benefits in the best manner possible. The investment advisor is the one who balances the portfolio of the investor in such a way that he can take advantage of equity and the debt market. Investors can be either organizations or private investors like you and me. There are many investment management advisors that provide a wide range services like fund management, counseling, planning, tax advice etc.

Many people prefer to seek advice from investment management firms rather than directly approaching an agent to manage their investments. Here are some of the famous asset management firms: Barclays Global Investors, State Street Global Advisors, Fidelity Investments, The Vanguard Group, JPMorgan Chase, Capital Group, Deutsche Bank, Northern Trust, Citigroup, Merrill Lynch & Co. and Goldman Sachs. A certified financial planner or an investment consultant will help you plan your finances well. He will take stock of your existing debts and tell you how you could control of your financial destiny. He will track your short-term and long term financial goals and give you options about how you can smartly plan your investments.

There are different factors that play an important role in investment management: market trends, your age, your risk-appetite, your long-term goals etc. For instance, a person who is close to retirement may need to invest more in debt market, so that he can secure the money for retirement. Similarly, a person in his 20s or 30s can invest in equity markets or more safely, in mutual funds etc. You should make it a point to listen to your investment manager who will show you the right way to make use of your money. However, you should also do your own research and find out what works best for you financially.

Organizational Investment Management

2009-09-29T03:23:00.000-07:00

By Richard B. Chai

What are managed?
Essentially, Investment organization refers to the activities carried out by organizations to meet various asset goals. It also involves the supervision and operations related to the assets and securities of the organization. For instance, real estate is one of the valuable capital assets of any organization. Securities involve the negotiable instruments or fungible commodities that represent certain financial value. Also, common stocks are equity security, while debentures and bonds are all debt securities.

Why investment management?
By carrying out efficient asset management and meeting the various investment goals, the organization meets the expectations of the investors. These investors could be private stakeholders who are involved through mutual funds or other collective schemes for asset. The investors could also consist of other stakeholder organizations like various corporations and insurance companies.

What is the investment administration process?
The Investment management process fundamentally consists of deciding how and where to invest the funds. It also comprises of either or both fund organization and collective investment management. There are hundreds of 'investment advisors' today, both individual fund managers as well as dedicated firms offering their services in this segment. But there are many rich private investors who hire special teams for the sake of discretionary and advisory investment management and these teams or firms refer to the process as portfolio organization or wealth organization.

The asset organization 'industry' is responsible for the movement of billions and trillions of various currencies and various tasks are adopted in such a procedure. Firstly, this work requires a lot of analysis and financial research. Asset selection and asset allocation is dealt by the decision makers or advisory board. Bespoke funds are the strongly managed funds that satisfy particular investor requirements, and Blue Chip funds are 'reliable returns on asset' funds. Asset portfolio construction is another important task. This represents the various kinds of assets made by specific investors. Weighting of asset classes (stocks, shares, bonds) is done carefully, considering the relative financial bias.

All organization plans must be executed within a time frame, for maximum returns. A solid plan implementation move is undertaken by the asset organization firms and individuals. Past, present and future asset plans must be analyzed.

Career in investment management
The asset organization industry offers a lot of scope for career. There are fund managers who direct the investment, marketers who bring in funds, internal auditors who examine systems, compliance staff professionals who ensure that activities conform to regulations, financial controllers who account for the money owned and spent, back office workers who monitor and report transactions, computer operators and experts among other investment managing professionals. Independent firms involved in asset organization are known to produce best results.

Possible business problems
Firms who work on investment organization face problems of staffing, because the professionals who generate above-average results often leave the firm in order to manage personal portfolios. Also, the skilled professionals are expensive to hire. Good performance is not sustainable forever, and investors might not tolerate the tough times.

Yet, today the investment organization industry is vast and well spread out, with many countries showing immense potential.

Investment Management Advisors

2009-09-26T03:21:00.000-07:00

By Thomas Morva

Investment management refers to the process of managing money being used for investments. Investment profiles are managed through sound decisions about security purchases and sales. Investment management advisors provide investment management services including money management, investment projections, investment counseling, and investment management planning. Investment management advisors may work as individual entities or may be a part of investment management firms. Those who work for reputable investment management firms are preferred over solo agents because of their credibility and reputation. These agents are usually college degree holders who have gained bachelor degrees in business and also have relevant investment management experience tucked in their belts.

There are two types of investment management advisors, those who offer direct financial advice to individuals or businesses and those who offer asset management for corporate clients. The services offered by investment management advisors are not given for free. The usual rate charged by these advisors varies depending on the project, the monetary investment involved, or the current standing of whom they advise. They also charge higher fees to corporate accounts than they do to individuals because of the sheer complexity of the tasks when catering to larger companies. Their fees may be calculated percentages of the assets gained, annual fees, or even hourly rates.

Investment management advisors are monitored by government run agencies and private investment management associations to ensure the quality of their services. The certifications issued by government agencies and private associations protect investment management advisors and their clients alike. They are subject to laws and regulations governing money management and must meet strict requirements prior to certification and registry as qualified investment management advisors. They work assuring client confidentiality and provide complete disclosure of all investment deals. Most, if not all investment management advisors are also licensed stockbrokers to enable them to carry out investor authorized sales and purchasers.

Private Investment Management is #1 Key to Success

2009-09-23T03:20:00.000-07:00

By Patrick Zanders

There are ads all over the Internet and late night television that touts the best way to have success in the forex market. They will tell you that swing trading, the London Rush method, multiple robots, and purchasing never failing signals are your way to financial prosperity...DO NOT buy into this. There are a number of ways to make money in forex, but the only way to keep it and keep moving forward is through proper private investment management...Also known as money management.

After working for and discussing trading methods with many traders, I came to realize that not all traders were created equal and that this is a major concern for anyone that is trying to decide on a forex trader to handle their money. In fact, it's best not to have them handle your money at all, but that will be in a follow up article. For now though, let's focus on what to ask the trader.

I am going to start this assuming that you have already checked out the traders references, looked at their trading history charts as proof that they can indeed do what they say they can, and now you feel good enough to let them trade your money. The first and most important thing to listen for is how they handle emotions and how they trade your cash.

Any trader worth his or her salt is one that is a low key, not real excitable, bore to be around and talk to kind of person. The reason for this is because a trader that gets excited is one that relies on emotion and you do not want "feelings" to get in the way of "facts". You want a trader that looks at the trade as a job and not an adventure.

The other aspect is the actual money management. You want to find a trader that never invests more than 1% of your money on any given trade. This means that the ceiling for you to make money is wide open, but the chance of a bad trade hurting you is minimized in a big way.

The forex market is a great tool for making serious money, but the avenue to make that money relies heavily on choosing the right trader and especially one that understands private investment management.

Investment Management Help From Advisors

2009-09-20T03:17:00.000-07:00

By Sambit Sahoo

Investing money in the financial markets is indeed a wise option to ensure that your stock of wealth grows over time. However, in order to be certain of such steady income-generation, expert and informed management of investments needs to be undertaken. Investment projects, if handled properly, can yield a rich rate of return. Hence, prudent management of these projects becomes all the more important. There are quite a number of firms that offer their professional service to individuals. Potential investors should ideally hire the services of one such firm from the very outset.

Finance investment projects are dealt in an expert manner by the firms that are have the experience and expertise in handling investments for their clients. Finance experts, in most cases, have a wealth of experience in dealing with financial instruments. As such, they are at a good position to weigh the pros and cons of various investment projects. The projects that would be profitable over an extended period of time should be undertaken by the clients. The clients can also learn some tricks of managing their investments from the richly experienced financial planners.

Financial markets are, by nature, fluctuating in nature. As such, the working mechanism in these markets is also rather complex. Firms try to address this situation by formulating such policies that could be easily understood by the common investors. These financial strategies should also be flexible enough to take in certain changes in financial investment management plans, if the market condition requires such changes.

For relatively new entrants in the realm of finance investment markets, taking up excessively risky projects are not advisable. Most finance service providers recommend adopting comparatively 'safe' projects in the initial periods. As investors get the hang of the working methods in these markets, they can move on to more risky investment projects. The desire to accept greater risks, in the hope of reaping larger profits, of clients need also be taken into account by the investment management firms. It should be kept in mind that this behaviour towards greater risks varies from person to person.

Investment advisors are well-equipped to help clients undertake profitable investment projects. Prior to actually starting to spend hard-earned money on such projects, professional help from investment advisors should be sought for. With the help and guidance of the advisors, investors can make their investment ventures extremely rewarding ones.

Learn How To Get Rich In 5 Easy Steps

2009-09-17T10:21:00.000-07:00

Your vivid pursuit to learn how to get rich in less than five years or three years. Surely, this is possible but let's go through the 5 foundations you need in your journey to learn how to get rich easily.

Step #1: Learn How To Get Rich From A Rich Friend
You should not judge everyone who's wearing a gold ring, nice clothes or driving a Porsche to be rich. The real wealthy ones are those to learn how to get rich forever.

Step #2: Take Care Of Yourself And Your Family First
Awesome stuff but never ever neglect your personal life. First, meet your family's needs all the time.

Step #3: Invest In Good Business Courses And Marketing Resources
Alright, please do not go out to your local bookstore and buy every business or marketing books in sight. Instead do your own research about some good business related motivational foundation books to start. The library is a good start to learn how to get rich.

Step #4: Do Not Be Stingy But Start A Business
Instead save your money and budget an amount to start an online business. I suggest putting aside $1500 to $3200 as a safety net.

Step #5: Remember Your 'Rich Friend?
Got that "rich friend" I was talking about? Great. Make sure you contact him by email or phone or whatever regularly to get small bits of information about his business. Then, at the same time applying what was learned in your own business.

A desire to learn how to get rich is a powerful intention. You are applying the law of attraction in your life. Never give up and remember to allow yourself a chance to invest in great marketing products online. Your financial freedom depends on it.

How To Design A Website In 3 Easy Steps
If you are looking high and low on how to design a website look no further!
Forget even all your so called web designers who are out to quote a killer price for you. There is a plague going on where people think that using a certain jargon will give them the ability to "overcharge" you.

Likewise, lets begin your lesson on how to design a website.
Step #1: Determine Your Theme
Just like any other web designers will ask you is this. Don't be freaked out just keep reading. Colors can be anything from your own liking or a certain format.
Name 3 type of main colors that you like. Remember this and start to imagine what would you want to website visitors to feel when they arrive at your website. Relaxed? Excited? Touched? Sexually Aroused? All these are emotions when visitors come.
Pick one or a combination then decide the format of your website. Where you want to position your menus or contents.

Step #2: Getting Your Website Done
Often times, many of my friends gets puzzled when they want to learn how to design a website. They say it takes a good software like FrontPage or DreamWeaver to do it. Guess what? Go ahead and search about the many "free website editors" you can find on Google. Choose on that you like and start editing like its a MS Word document. Then save it.

Step #3: Making Your Website Public
Get the word out! Thats what you need to do after you have designed your website. Use an FTP uploader. Don't worry if you don't know what that means. It just stands for File Transfer Protocol. You will need a web host (a space for your website to reside) to store your work on the Internet.

Invest in a good reliable host. Make sure you get a good uptime, space and support with this service. Some web hosting services can cost between $10 - $100 monthly depending on what you want.

Learn more advanced methods on how to design a website online. Making your web content fresh and appealing will really impact your bottom line profits and traffic conversion.

Investment - Can You Do Without It?

2009-09-14T10:18:00.000-07:00

It is hard to imagine if anyone is living without money and it is equally hard to imagine if humans are living without investing in someway or the other. In plain language, investment means the act of investing or laying out money or capital in an enterprise with the expectation of profit. But at the same time the term investment also means money that is invested with an expectation of profit.

Investment is closely related with earning money and employing it to earn more by its virtue of its inherent multiplication factor. It is this character of money (read investment) which drives people invest in various asset types in which they are comfortable with. As a general rule, it is not quite natural for the novice investors to pursue high return investment categories as they perceive the high element of associated risk is beyond their control.

The Big Question: Could You Do Without Investment?
The more conventional the asset type is more the investors and thus investment. Traditional investments like investment on gold and land have never let down the investors although rate at which they appreciated was below par till recently.

Current Investment Scenario
The current investment arena is extremely wide and intricately interdependent. The simplest investment by far, the savings account, contributes to the pool which bank draws from, for advancing loans to a variety investors. Thus the return on your investment (savings) is connected to the return the bank expects.

Investment Options for You
It is impractical to attempt to list out all investment types.
1. Investment on stocks and securities
2. Investment in money market instruments
3. Investment in mutual funds
4. Investment in ventures
5. Investment in insurance

Speculative Investment
It is difficult to foretell how and why people make investment decisions. Although it beats logic, it goes by gut feeling of investors. Many stock investment and real estate speculators have made big time money taking tremendous risk.

A. Real Estate Investment Companies
Real estate investment companies acts as brokers and represents both buyers and sellers and create ideal opportunities for real estate investors. They represent clients in the sale, purchase, exchange and the finance of the real estate investment. Real estate investment companies are ideal for individual investors who want to take advantage of the real estate market but are unable to spend time on it. Most companies give personal attention and due importance to individual investors as they are their primary and most crucial segment of business.

The real estate investment companies deal with active brokers, a wide variety of investors, vendors, consultants and governmental agencies. Individuals can avoid many dangers associated with real estate investment by investing through companies as most companies employ personals that are trained to handle the pressure situations that often crop up in real estate investment. The investors can achieve the financial security and freedom which enables them to pursue other involvements.

Acquisitions, property management, due diligence, redevelopment, leasing, debt analysis and procurement, tax documentation, disposition analysis and detailed monthly reporting are some of the important services provided by real estate investment companies. Real estate investment companies are also referred as Real estate investment trust (REIT). Real estate investment companies have special federal tax treatment and must comply with certain tax requirements. There is a slight difference between Real estate investment companies and real estate investment trusts.

B. Best Online High Return Investment Company
Choosing the best online high return investment company. While some people may be shrewd investors who understand the market to an extent that they know where to invest and to what extent, there are others who are absolute novices in this field.

Thought it would get easier? When you search the Internet for a good investment company, what you see are countless pages that enlist a large number of investment companies.
Choosing the best company from all the available options can be quite an overwhelming task. This piece of writing aims to give you some useful tips about how to choose the best investment company. Search the Internet for an online investment company. Out of the umpteen number of pages that you get as your search result, focus on the first two pages, as the results tend to become a little wayward as you go farther.

Don’t limit your focus only to those names that you recognise from television or radio commercials. There may be several other websites that offer brilliant investment opportunities. Before signing up with an investment company, you need to assess your own choice of investment. If you want a diverse portfolio to boast of, then go in for a company that offers a wide array of investment options.

If your choice of investment is only stocks or mutual funds, then go in for an investment company that exclusively deals with these categories. You must also look at the minimum initial investment that an online company requires from you and whether you are ready to offer that kind of money or not. Besides taking into due consideration all the above points, you must avoid taking your business to an investment company that charges an exorbitant membership fees or does not give you free access to your own investments

How to Make Big Money Safely in Stock Market

2009-09-11T10:14:00.000-07:00

(1) Stock Market is Tough Place to Make Any Money Consistently
Numerous academic studies have shown that more than 90% of mutual funds failed to beat market over the long run and that more than 90% of individual investors lost money in the
stock market. Too many people and too many Wall Street experts or mutual fund managers are buying and selling stocks like madmen, with no sound strategy or any hope of long term success. Ironically, they're the ones who create opportunities for prudent, long term oriented investors.To be successful in stock market, you either have to become an expert yourself or to seek help from real successful experts. Stock market is such a brutal place that there is no room for half-expert or expert pretenders. The truth is that only a small percentage of disciplined and experienced people earn disproportionate huge amount of return, many times at the expense of the rest. It is an insult to "Wall Street expert" professional title when so many of such "expert pretenders" failed to beat index or merely stay break-even.

(2) Majority of huge performance claims in Ads by "Experts" are not real
Too many investment newsletters or hot mutual funds touted their huge past performance and went into disaster later on. For example, they would tout huge percentage of gains for certain winning stocks and hide the losing stocks. If you look deeper into their whole portfolio performance, their portfolio performance was not impressive at all. Many investment newsletters will have multiple portfolios in publication. In their ads, they will only mention the performance of the winning portfolio and hide the losing portfolio. Which portfolio do
you follow? Most important of all, which portfolio out of many does the newsletter author invests for his/her own money? If the newsletter author or the mutual fund manager does not invest into a portfolio himself or herself, how would you trust their services? Even if past performance of a newsletter or a mutual fund was pretty good, it may not indicate good performance in the future. Certain investment methods such as growth stocks investing are known to be risky. Momentum investing or day trading methods are known to be extremely risky methods that can wipe out life savings over night. While a risky method can produce fabulous gain in relative short term, over the long run, a risky method is more likely to make people poorer rather than richer even if a short term gain was gigantic. Gigantic short term gain is just a dangerous stock market trap to lure the inexperienced people into the market.

(3) Value Investing is the Only Proven Safe Method
Value mutual funds are well known to have lower volatility than growth mutual funds. Numerous industry and acedemic studies have shown that value stocks as a group performed
far better than growth stocks in bear market. Many technology and internet so called "growth stocks" lost 90% to 99% of value in just a couple of years after 2000 while many value stocks went up during the same time frame.In fact, the single most important element to obtain high investment performance over the long run is to maintain MARGIN OF SAFETY of a portfolio. That is why the greatest investor Warren Buffet once quote "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.".

(4) Value Investing is the Proven Method to Make Big Money in the Stock Market
There are certainly other methods of investing or trading, which made people rich. There are certainly many under- performing value mutual funds, which give people wrong impression that value investing is equivalent of low performance with less risk. However, I want to emphasize that in fact value investing is investment style that can obtain high performance with less
risk.
* In the early years of my investment career, I have studied and tried all kinds of well known methods of famous investors or traders, Short term trading, Momentum trading, Technical Analysis, CANSLIM, growth stock long term buy and hold, Random Walk theory, etc. Evidenced by my past investment performance, value investing is the only method that delivered gigantic investment return consistently for me over past many years. In 2003, I have made more than $150,000 in stock market with value investing method. With the power of compounding, there is really no upper limit for the investment profit with value investing.
* In 1984, Warren Buffet gave a speech titled The Superinvestors of Graham-and-Doddsville, which categorized performance of many famous value investors who beat market year in and year out. Many of people mentioned in this article are legendary multi-billionaire right now. It is true that only a small percentage of investors can beat market consistently. It is also not coincident at all that the second richest person in the world is a value investor named Warren Buffet, a student of Benjamin Graham as well.

(5) Value investing will not distract your regular job
The nicest thing about value investing is that it will not distract your regular job if you choose not to stare at the stock market frequently in your office. Many newbies in the stock market still believe that if they stare at stock price quote closely, they can obtain better chances of winning. Staring at the stock quote is least important part of this game. In fact, staring closely at the stock price quote is more likely to create a loser rather than a winner because of greed and fear in the stock market. The more one is unable to resist the mad mood of Mr. Market, the more likely one is unable to invest successfully with value investment method. I am not saying that successful value investing does not require time. The time you will need in value investing depends on the investment vehicle you utilize. If you invest with a value mutual fund, you will not need much time in stock market and you only need to follow up quarterly with your fund's performance. If you are a passive investor of my investment newsletter Blast Investor Real-time Plus and you follow my model portfolio passively, you will only need to pay attention to my infrequent trade alert closely and read my newsletter issues every 2 weeks.

(6) Successful Value Investing is Hard, But You can Do It!
Value investing not only requires tons of knowledge and expertise in financial analysis, accounting, US tax law, US bankruptcy law, etc., it also requires real life training of right psychology to fight against greed and fear in the stock market.

(7) You need to start early in value investing
Let's be honest about value investing, it is not a get-rich- quick scam and it takes time to really make living with value investing without need of your regular job. You need large starting principle if you want to make living from stock market investment than your salary.

By reading Warren Buffet's article above, you can pretty much guess that successful value investors can achieve 20% to 30% per year performance consistently over the long run regardless of whether market is bear or bull although it is possible to obtain significantly higher performance in earlier investment years due to smaller fund size and luck. 20% or 30% more consistent investment return is already very high return over the long run. Since Peter Lynch retired from Fidelity, you can rarely find a mutual fund with that kind of performance over past many years. The best approach is to treat stock market investment as side business in addition to your regular job. Your regular job help you pay your bills and help you earn the initial principle for value investing. Too many people naively believe that they can get rich quick with speculative trading method in stock market rather than a hard work with a job and value investing at side. It is a lot easier to make your first $50,000 net worth with a job rather than speculation in stock market.Even if you do not have large sum of money right now as principle to make really big profit out of value investing, you still want to start value investing early so that you can learn in and out of value investing in your earlier years of investing in the stock market. Successful investment is long term process. Let's do a quick math, if your starting capital for investing is $50,000 and your annual compouned rate of return is 30%, you will need 9 years to surpass $500,000 net worth.

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke
Are you attracted to the idea of being in control of your financial future, but confused about how to start investing in the stock or share market, while avoiding costly mistakes?
You've probably attended seminars, read other newsletters or broker reports telling you to buy this or buy that ..... you've probably heard or read a lot of confusing and sometimes conflicting information?

The real surprising facts are that very few online investors actually make money long term.
Maybe you want to develop some extra income or even manage your own superannuation retirement fund? For instance, from 1 July 2005, as a result of new rules on ‘choice of superannuation fund’, for the first time millions more Australian employees will be able to choose a fund for their future superannuation guarantee contributions.

Maybe you're attracted to the charts you've seen showing the power of compounding investments & have worked out the benefits to you of having a higher percentage return?
The reality is that only the very few achieve long term success by online trading or investing in the stock or share markets around the world. Even less for those who are online trading in the highly leveraged CFD’s, futures, options, FX & other commodities markets.

You will still lose - and may lose regularly sometimes - but the key difference between those who win or those who lose overall is to keep the value of your total losses low compared with your profits gained.

In his definitive book ‘Trade Your way to Financial Freedom’, Dr Van Tharp calls this ‘expectancy’.
Improving your own online investing or trading performance in the stock or share market & developing your own home based business requires investors and traders to learn how to strengthen each of the three legs of your investing or trading stool, as first described by Dr Alexander Elder in his books 'Trading for a Living' & 'Come Into my Trading Room':
• Technical Analysis
• Money & Risk Management and
• Your own personal Psychology

At the very least, you need all three legs to be very strong - in order to survive, then thrive to successfully make money & outperform in the stock or share market. Very experienced online traders and investors John Atkinson and Jim Berg, authors of the soon to be released Investing Online Newsletter© and the Online Trading Report©, prefer to add a fourth leg when they invest in the stock & share markets - that of fundamental analysis.

As part of his overall money & risk management, John Atkinson has designed and developed his own Portfolio Management tools to plan and track individual stock selection, optimization and portfolio growth.

John Atkinson knows first hand what it means to lose enormously, both financially and emotionally in the stock or share market. He lost his Sydney Harbour waterfront home in the technology stock crash of 2000 and beyond. John then searched the finance education world for the best investing online & online trading information to learn how to trade and invest online successfully.

With his experience learnt from the school of very hard knocks, John Atkinson now aims to help online investors and traders avoid the pitfalls that await unsuspecting novices and teach them some of the methods he’s since learnt to trade profitably and with much better risk control.

In direct contrast, John’s partner, Jim Berg is a former broker, private trader and lecturer with over 20 years experience in the investment industry. He has appeared on CNBC Asia and Market Wrap and is a regular guest speaker at the Australian Stock Exchange (ASX), Sydney Futures Exchange (SFE), Australian Technical Analysts Association (ATAA) & Traders Expos in capital cities. The first edition of his book 'The Share Traders Handbook, Fundamental & Technical Analysis Combined' has literally been a sell-out success.

Using the tools and trading strategies from his workshops and seminars, Jim Berg won the 2002 Personal Investor Magazine Trading Competition.
The first step is to protect your capital and survive in the market long enough before you can profit. Instead of giving you a fish (e.g. stock tips), Jim Berg and John Atkinson teach online stock & share investors and traders how to fish (invest) for life. The second step is learning how you can grow your portfolio and thrive in the stock or share market. Jim Berg’s investment strategies have achieved breakthrough results and are very different to the way the majority of investors operate.

Author Jim Berg says:
Others contacted us wondering where to begin or how to improve their current portfolio performance.
We realised many online stock and share market investors and traders are looking for on-going support to help lead them through the stock or share market minefield, dodge the pitfalls and actually profit long term. Our aim is to help people from all walks of life develop into the best online investor or trader that you can become and to generate the returns from your investments that you deserve.”

Principles of Investment Management

2009-09-08T10:09:00.000-07:00

Many Investment Gurus, with a straight face and a gleam in their eye, will insist that successful investing is a function of expansive research, skillful market timing, and detailed technical analysis. Others emphasize fundamental information about companies, industries, and markets. But trends and numbers are secondary to a thorough understanding of the basic principles of Investing and Management, and their interrelationships. The ingredients for a successful investment portfolio are these: stubborn belief in the Quality, Diversification, and Income trinity from Investments 101, and operations that employ the Planning, Leading, Organizing, and Controlling skills introduced in Freshman Management. Here are some things to keep in mind while you season your experience with patience and marinate your investment process with discipline:
* A viable Investment Program begins with the private development of an Investment Plan. The first step is the identification of personal goals and objectives and a time frame for goal achievement. The end result should be a near autopilot, long-term and increasing, retirement income. Asset Allocation is used to structure the portfolio so that it operates in a goal directed manner. The finished Plan must be flexible in design, based upon reasonable expectations, simple in structure and operation, and easy to supervise.

* Use a "cost based" Asset Allocation Model. Although most of the Investment World operates on a Market Value basis for everything from performance analysis to Asset Allocation and Diversification decision modeling, you will improve your long-term results and stay within your allocation and diversification guidelines better by using a system based upon Working Capital.

* Control your emotions, among other things. Clearly, fear and greed are the two that require the most control in the investment environment... particularly in these days of a reckless media, Internet empowered scam merchants, high-speed information gathering/processing, and cheap personalized trading capabilities. Only strictly disciplined decision makers need apply for your Investment Management position... and you may not be the ideal candidate. Investment Management is a continual responsibility, not a weekend and occasional evenings avocation.

* Avoid hindsightful analysis, and uninformed (or salesperson) criticism. No one is willing to take responsibility for their own actions and everyone is willing to sue whoever coulda', woulda' or shoulda' prevented whatever happened. Investors cannot afford to be Little League crybabies. The playing field for the investment game is uncertainty.

* Establish a profit-taking target for every security you purchase. With income investments, never say no to a profit equal to a year's income, or 10% if you like round numbers. * Examine Market Value numbers at intelligent intervals. Frequent examination is stressful and non-productive. There are no averages or indices that compare with a properly diversified Investment Portfolio, particularly if your Equity selections are screened for Quality and Income. Investing is a long-term endeavor, and neither Shock(sic) Market symbols nor current yields operate on a calendar year schedule. Look at market peaks and troughs over significant time periods that include "cycles"... and do separate your analysis by class.

* Avoid what the crowd is doing and shun investment products. Consumers buy products; Investors buy securities. Stay focused on your plan; analyze your annual income and trading statistics. Always buy good stuff on bad news and sell into good news announcements.

* Don't try to save the world with your investment decisions. Never limit your investment opportunities artificially. Votes work better when it comes to changing your world, and corporations should not be the targets of your political hates... get rid of incumbents, state and local, until there are changes in the tax code, social security, tort law, environmental issues, etc. The business of a capitalist society is...
If you insist on some income from every Equity security you ever own, and beat-the-bank income from income securities, you will obtain two important things: An annually increasing cash flow that will rise at a rate greater than most normal inflation rates, and a higher quality investment portfolio for better long-term investment performance. (If you use a cost based Asset Allocation model with at least 30% invested in income securities and no open end Mutual Funds or Index ETFs.) Never settle for tiny short-term yields or get hooked on those that are unsustainably high.

* Investing is not a competitive event, ever. You don't need to beat the market. Big risks, foolproof gimmicks, and exotic computer programs occasion more failures than success stories. Remember the Investment gods? They created Stocks and Bonds... only Stocks and Bonds!

* Avoid Unrealized Gains, Embrace Volatility, Increase Annual Income, and remember that all key investment moments are only visible in rear view mirrors. Most unrealized gains become Schedule D realized losses. As of today there has never been a correction (rally) that has not succumbed to the next rally (correction). Only an increasing income level can beat back inflation... a bigger market value number just doesn't do it.

1. Investment Management Training
The subject matter was mainly confined to financial problems arising during episodic events like incorporation, merger, consolidation and reorganization. Thus, the traditional role of the investment manager was to raise externally the funds required by joint stock companies. With the passage of time, the role of investment manager has undergone drastic changes. Presently, the investment manager is in charge of determining the total amount of capital required for both the short-term (working capital) and long-term (fixed capital). This is done by proper forecasting and planning of finance. Secondly, their job profile includes investing the funds in assets and projects, with the aim of making profits. Now the investment manager is concerned with the management of assets, raising and allocation of capital, and valuation of the firm. Besides, he has to ensure the supply of funds to all parts of the organization, evaluate the financial performance, negotiate with bankers, financial institutions and other suppliers of credit, and keep track of stock exchange quotations and the behavior of stock price.

To play his role well the investment manager has different tools, such as cost of capital, leverage, capital budgeting, working capital management techniques and fund flow analysis/cash flow analysis. Cost of capital helps in deciding the appropriate source of finance. Normally the sources with minimum costs are selected, so that the weighted average cost of capital can be kept to a minimum. Capital budgeting helps in deciding the proper investment mix; the available resources should be used in the most profitable way.

2. Investment Management Firms
When talking about investment management firms, it is very important to understand profit maximization and wealth maximization. According to the objective of profit maximization, the ultimate goal of a business enterprise is to maximize its profits. The profit maximization objective is justified, as business is conducted for earning profit. When profit earning is the aim of the business, profit maximization should be the obvious objective. The higher the profit, the better the efficiency. For growth and expansion, profit is the main source of finance. The term profit is vague. It may be short-term or long-term. The concept of profit maximization generally ignores the time value of money. All profit gained in different time periods are taken together. Accounting bias influences profit.

On the other hand, according to the objective of wealth maximization the ultimate goal of a business enterprise is to maximize the wealth of the shareholders, which is represented by the market value of the shares of the firm. Wealth is defined as the net present worth of the firm, i.e., the present value of all future returns.

Though the wealth maximization objective seems superior to the profit maximization objective, it is to be noted that the former is based upon the latter. The market price of shares, which is the indicator of the wealth of the firm, is based on the long-term returns of the firm. The returns that accrue to the investor would be a function of the earnings of the company.

Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing

2009-09-05T10:04:00.000-07:00

Have you ever thought of investing? Does the idea of making money with stocks, bonds, mutual funds and real estate interest you?
Investing is essential to making money. Whether it be stock investing, investing online, real estate investing, finance investing, investing in bonds, investing in mutual funds. All are essential in helping secure your finances, and financial stability for you and your family. If you are interested in investing, continue reading about ways to make money. We will briefly discuss the concepts of investing with stocks and mutual funds, investing with real estate and investing online.

Stock & Mutual Fund Investing
The stock market is a great place to make money. If you intend on investing with stocks and mutual funds, we highly suggest that you first do research on the companies you wish to invest in. Although the stock market is a great place to make money, there is also a degree of risk involved.

Real Estate Investing
Investing in real estate is safer than the stock market. A lot of people purchase homes that need are in need of remodeling, and can make a lot of money by fixing them up and selling them.

Online Investing
Another fast growing way to invest is through trading online. It’s amazing at how easily you can work your finances online, and make money without even leaving the house!
Whether it be investing with stocks, investing with mutual funds, investing with real estate or investing online, do your research and make some money! If you are looking for a resource to help you with investing, you can visit our website and you will find ample information about investments, and how to make money.

7 Top Real Estate Investing Jobs
Real Estate investing has long been proven to make tons of CA$H for the active investor and many of the real estate investing methods and techniques used to make some of the biggest (and quickest) CA$H only require a little time and a bit of knowledge (i.e., NO MONEY and NO CREDIT!) to rapidly bring home a really big check!

That is the appeal of Real Estate investing courses to most people ¨C to do deals that require little/no money or credit yet pay back huge rewards for the time and knowledge you
get from following their systems. Yet, the "investing" gets a bit lost in most of the world of "Real Estate Investing" - there is no "investing" other than a bit of time - there is no ROI (Return On Investment) other than the time-for-money factor. That is why I call these activities Real Estate Investing Jobs - they stop bringing income as soon as you stop working
them.

Real Estate Investing through these jobs, while they make you CA$H, will never give you financial freedom as they only generate quick money and not long-term, passive income.
This article will look at some of the more popular methods of Real Estate Investing jobs. One of the biggest challenges to overcome is the fact that, when discussing the money made through Real Estate Investing, the numbers of dollars are much more than your common corporate job, and many people simply are not ready to handle such discussions.

One of the first lessons I teach my students is how to get past the fear of discussing hundreds of thousands of dollars and changing the programming you were given as a child to
form open ideas about money and investing to make even more money. Can you comfortably discuss figures in the hundreds of thousands of dollars?
Most people learn quite quickly - with just a little bit of practice.

With that in mind, it is time to look at these Real Estate Investing Jobs more closely.
1. Property Profiling (birddogging) - this popular way to get started in real estate investing provides a real estate investing job with a decent income - something along the lines of what a factory worker would make in the area.

2. Lease Purchase - this powerful tool can be utilized to buy and sell property with no money out of your pocket (a Real Estate Investing sandwich), while keeping a nice pocketful
of money for your time (can you tell this is one of my favorites?) An active person can make about 1.5 - 3 times more than the Property Profiler, on average.

3. Subject To - with a bit of training, you can make this method of real estate investing really pay off big. Once you know how to negotiate these deals, your real estate investing income will reach that of corporate executives - with much less of a time requirement.

4. Foreclosures - while highly lucrative and one of the top income producing methods of real estate investing, the time and knowledge required to actively pursue such deals is becoming more difficult all the time.

5. Tax Lien certificates - this is a true form of Real Estate Investing - actually putting your money into something that produces a return - one of the safest investments around with returns that beat any other form of passive investing.

6. Short Sales - this form of Real Estate Investing is another job, as your knowledge level and timing are extremely important. A lot of money can be made with this type of Real Estate Investing job - as much or more than any other form - once you know how.

7. Secondary notes/Purchasing Equity positions - a 'higher level' of real estate investing, where more knowledge is needed to limit the risk, however, the returns on equity position purchases can be extremely high - from 6%-10% for fully passive results and 'sky's the limit' for purchasing equity positions.

Yes, once you get past the internal false programming - the LIES you have been taught all your life about money, you can begin a successful career in Real Estate Investing - through a variety of Real Estate Investing Jobs and then onto true, full, watch-your-money-grow Real Estate Investing.

Before You Invest You Must Read This

2009-09-02T10:00:00.000-07:00

It is important to answer the following questions before you begin to invest any of your money. The answers to these questions will help to guide you to when, what, where, and how much to invest. You will need to look over and re-examine these answers many of times.

1. Set clear goals and write them down- Develop financial goals for 1 year, 5 years, 10 years, and long term. It is extremely important that all of your short term goals help you to reach your long term goals because that why we are doing all of this. Any good plan must be realistic. In the area of investments the rewards can be great but only when they are done one step at a time. Therefore, once you have more research into the opportunities available to you, go back and fine tune your goals. Share your goals with someone in your family. Whoever, in your family that will be most effected by these goals.

2. Create a finacial plan- Now you need to create a financial plan to reach your short term goals. By reaching and accomplishing those sort term goals the long term goal will be reached. You need to decide how much time, energy, and money you are going to need to invest in order to accomplish your short term goals. Use all of the resources you can find to answer these questions. You will find some of my own ideas as well as other ideas I have found posted in the Articles section of The Savvy Investor. Do not be afraid to take the time needed to answer these questions before you actually begin to invest. Lastly, stay the course once you begin.

3. Establish a spending plan with the actual amount you have to invest- The prime force behind your investment opportunities will be the amount of money you have to invest. This is you investment life line. Do not over extend it , but also do not be afraid to invest enough to reach your goals. So take the time to create a budget by tracking your current spending. Do not over extend how much you can invest and definitely don't borrow money to invest. It is financial suicide to let high interest accumulate while you put your money into investments with lower returns. Finally, refrain from taking on any new debt.

4. Educate yourself over and over- Remember that all of the three above areas assume that you are educating yourself. In order for you to be successful in your investments you need knowledge. The above areas can only be accomplished with the correct amount of time spent to learn about yourself, investment risks, investment rewards, investment strategies, and many other aspects of investment knowledge. Use all of the resources available to you to learn which market is best for you and then all of the concepts and strategies of that particular market before you begin. There are many articles and links on The Savvy Investor but don not hesitate to find other resources such as books, magazines, and financial journals to help you out.

In closing, it is better to spend a little money on education than lose a lot of money by jumping in blind.

Everybody Wants to Know How to Invest
Those unfamiliar with the process of making and managing investments often have more than a few trepidations about investing in general. They figure that, since they do not know how to invest, they will never learn. Of course the horror stories of investors who lost their life savings on some bad deal don’t help people to feel any less secure when figuring out how to invest.

Fortunately “how to invest” can be taught and learned. “What to invest in” or “where to invest” is another matter entirely – if someone can tell you that, and be 100% correct every time, latch on and don’t let go because you have found the fabled Rosetta Stone.

A big part of the investment process will depend on how much money you have to invest. The amount will determine the best investments for you as well as the best methods of investing – whether you’re best off acting on your own or working with an investment counselor or advisor. If you have a small amount to invest, say a few thousand dollars, you may want to start small with an interest bearing account such as a CD. Higher investment amounts usually warrant bigger investments, but bigger investments are riskier as well. If you’re investing ten thousand dollars or more, it is definitely advisable to use the services of an investment counselor or advisor. This professional can show you how to invest your money as wisely as possible to get the best rate of return you can.

Those investing very large sums of money, one hundred thousand dollars or more, will have no shortage of those who want to show them how to invest.

How Can You Achieve Success In Property Investment?

2009-08-30T09:56:00.000-07:00

Every one wants to invest in property. If you are not aware “what is property investment” it is not possible that you can achieve success. If you are planning for property investment, first of all you will have to be aware about it. Thirdly, how much finance you should manage to invest? This article will guide you in four steps “How can you achieve success in property investment”. “What is property investment” – When one or more investors buy units of company or property, he invest his funds. It increases economical transactions. Investment property may be commercial property, industrial property or personal property, like buying rental property as investment in Bulgaria or any where. You can invest your funds in emerging real estate markets for economic growth.

After investment, an investor looks to receive income on their investments every time from the occupying property. Return on investment depends on increase or decrease in the cost of operating the property. Capital growth may be reflected by increase or decrease in the property value held by investor.

Investor can achieve eternal secure investment if his property value may increase when he realizes to sale his property. Property investment in real estate or buying a rental property or investing in Bulgarian properties is long term investments. I think now you will be aware about “property investment” after reading this article.

5 Steps to Successful Property Investment
Over the years I've developed the following structure and I'll always stick to it so that I know I have done all the homework necessary to make a sound investment and reduce any potential risk to a level I'm comfortable with.

Step 1 - Research Research Research
This is possibly the most important aspect of any investment decision. When I talk about 'researching' a potential investment, what I mean is to do all the necessary homework to find out if the investment is right for you and if it will provide the return you're looking for.

Sometimes it is tempting to overlook research and maybe follow a tip from a friend on a potential investment. Many people also don't do research because they don't know where to find the required information and so they may make a blind investment, hoping on good returns. Even worse, they may put off making the decision (to invest or not to invest) and stay stuck in procrastination while the asset starts to show strong growth.

So what needs to be researched before investing in property?
Location - such things as the population, main industry, main employers, future investment in infrastructure, tourism, local universities.
Property prices - average, median, recent sales, potential rental returns, previous and predicted growth.
Tax and ownership laws - country and state laws, occupier/investor tax rates.
You can never do too much research.
Thorough research will give you peace of mind to make confident investment decisions.

It may be in books, newspapers, special reports, published on the Internet or available from real estate agents. You can find the information you need to make a confident investment decision.

Step 2 - Know your Numbers
Note: This step primarily deals with rental returns and does not take a property's annual appreciation or depreciation into account.
Before investing in property it's important to do the numbers to know
• What you can afford to purchase
• Purchase and ongoing upkeep costs
• Potential rental returns
• Monthly cash surplus or deficit
• The Purchase Price

Purchasing Costs - items such as Stamp Duty, legal fees, real estate agents' commission, legal fees.
Rental Income - If the property is rented to tenants, how much rent can you charge?
Ongoing Costs - Management Fees, mortgage repayments, repairs and maintenance, letting fees, Municipal or Council rates.
Net Return - this is the end result once you have accounted for all of the income and expenditure and it will show if you will have a cash surplus or deficit.
The more properties you calculate returns on, the better idea you will have of what is available in the market to suit your requirements. You'll also protect yourself from any surprise costs. Please remember, there may be more costs you need to factor into your calculations according to your situation

Step 3 - Create your Criteria
Before you go shopping for your investment property it's important to know exactly what you're looking for so that you buy a place that suits your requirements. The best way to do this is to create a list of certain criteria that a potential property must meet.
• Town population no lower than 10,000
• Expected rent at least 7% of the purchase price
• Brick house on land, no more than 10 years old
• Initial repairs to cost no more than $1,000.

Whatever criteria you choose is up to you but it gives you control over what you buy and will certainly decrease the time you spend looking for a property. From carrying out your research and working out the numbers you should find it easy to create your criteria. Now you can go and buy the property that's right for you.

Step 4 - Property Insurance and Management
Like any investment, we always look to minimise the risk of loss or damage and it's no different when it comes to property. There are a number of ways to do this including taking out a suitable insurance policy and finding the right property manager.

Whether you buy a property to live in or rent, it is potentially at risk for various reasons and so you can insure the property against these risks. Insurance policies can cover you for loss in the case of structural damage, theft, flooding and many other instances.

Landlord insurance policies are also available for extra cover of instances such as malicious damage, legal fees, loss of rent etc. If you are buying a holiday home or a rental property you might consider employing the services of a Property Manager. The role of a Property Manager is wide and varied and a good one can save you a lot of time and money.
They can find new tenants, arrange to have your property cleaned, collect rent, keep an eye on your property, pay your bills out of incoming rent and much, much more. Finding the right Property Manager will pay off rather than choosing someone who won't look after your property the way you want them to.
It's important to shop around to seek out the best Property Manager and you can do this by asking the right questions. A good Property Manager will communicate regularly with you and be available to address any concerns you might have.

Additional measures to secure your investment include the local neighbourhood watch, security alarms, window locks and smoke alarms.

Step 5 - Tracking your Investment
Once you've invested your hard earned cash you'll want to know how it's performing and what sort of return you're getting. Again, we're only going to look at rental returns rather than growth as the growth is only speculative.

Every month you should keep all receipts of income and expenditure concerning the property.
• Statements from the Property Manager
• Bank mortgage statements
• Receipts for repairs
• Payment receipts for Municipality or Council rates
• Any correspondence regarding the property

By tracking the figures regularly you can see how your investment is performing and this information can then be filed with your annual tax accounts.

Real Estate Investing - The Job Escape

2009-08-27T09:52:00.000-07:00

Real estate investing is pretty unusual in lots of ways. Real estate investing is creative. Real estate investing is risk-taking excitement. Real estate investing is diverse activity. Most of all, real estate investing is very profitable.

According to surveys, 75% of the workforce hates what they do every day at their job. The survey was unneeded. Common sense and observation tells you that. On and on it goes, but most of all, they hate their limited salary – payment per what the job pays rather than payment according to their personal contribution. The locked-in salary cap is most despicable because it pays an employee what the job is worth and not what the person is worth. The color of your skin is not the problem. Your lack of superlative educational degrees is not the problem. The problem is that a job pays what the job is worth and not what the employee is worth.

It takes guts to work on commission or for projected profit-per-job. It takes guts to live in the unknown. Some can’t make the transition from salaried job to entrepreneur.
The beauty of real estate investing is that you can do it on a shoestring budget, and you can do it part time until full-time is justified! Real estate investing is possible without cash reserves and without good credit. Real estate investing doesn’t require a big bank account or an 800 FICO score on a credit report. Real estate investing can be initiated without ever walking into a bank to request a loan and without ever filling out a mortgage app.

When I started investing in real estate, I found it incredible that I could buy a $500,000 rental property with a $10 bill, and without a credit check or income verification! And that’s exactly how I launched my real estate investing career 25 years ago. It’s even easier today because credit is the easiest to obtain ever in history. We are in an amazing period of opportunity for entering real estate investing.

Know-how savvy in real estate investing can be learned like any other skill. And it doesn’t require one of those complicated $3000 real estate investing seminars or costly $25,000 real estate investing coaches. What it takes to transition from a job to a real estate investing career is “know-how savvy” and guts. You can investigate the possibility of “escaping the job” at Real estate investing is not in any list of high school electives. You can’t get an accredited degree in real estate investing. You won’t find a high school or college guidance counselor who recommends a career in real estate investing (if the guidance counselor understood real estate investing, he or she probably wouldn’t be a guidance counselor!)

The public school system and educational curriculum in the U.S. is only a feeble attempt to prepare students to just “get a job.” Unfortunately there is no class in “Making Money 101.” I never learned anything about succeeding as an entrepreneur or becoming wealthy during my 10 years in the university classroom. I only became a multi-millionaire when I learned the skills of real estate investing, and I paid the price out-of-pocket and out-of-the-classroom for that education. I learned these skills in the ole University of Hard Knocks through trial-and-error.
Never disparage the cost of education. You’ve gotta get this know-how outside of a classroom, and learning how to make money is gonna cost you. But if you think the cost of education is expensive, you should calculate the cost of ignorance!

However, learning real estate investing doesn’t have to cost you an arm and a leg. Yes, I know, the real estate investing TV infomercials and the real estate investing seminars held around the country charge big bucks for those 3-day seminars and week-long Boot Camps. I’m not exaggerating the real estate investing educational system, because I know it inside and out. I personally know many of the so-called “gurus.” My opinion is that the fees charged are exorbitant because the promoters have found deep pockets in the marketplace.

When I started my real estate investing career 25 years ago, real estate investing TV infomercials were unknown and real estate investing seminars were extremely rare. Back then, Mark Haroldsen followed an emerging trend started by Al Lowry and Nick Nickerson by holding occasional real estate investing seminars across the country. Later Robert Allen expanded the industry. Robert Allen promoted real estate investing conventions in the major cities across the U.S. He found a market for costly real estate investing packages of information with cassette tapes and note books. TV infomercials, expensive seminars, and outlandish coaching fees followed in subsequent years. Would-be real estate investing aspirants today who want more than an inadequate salary from a job in Dullsville often conclude that they have to “pay through the nose” for real estate investing know-how.

However, through diligent searching, these wanna-bees often find that this education in real estate investing is more readily obtained from other sources than they previously imagined.
Real estate investing is probably one of the most easily learned skills never taught in school. Real estate investing is probably one of the most prolific careers available on Planet Earth. Because families now live in houses instead of caves, houses available for fix up are everywhere. And probably nothing contributes to upgrading the deplorable housing conditions across America comparable to real estate investing in fix up properties.

The entrepreneur-minded aspirant who discovers the real estate investing industry often catches a vision of life-beyond-a-job. Books and online courses offer an alternative to expensive seminars and coaching.

A. Real Estate Investing - Books,TV Infomercials, and Seminars
Real estate investing has become popularized today because of real estate investing TV infomercials and traveling seminar circuits. But real estate investing has not always been so popular. It was one of the first real estate investing books to get national attention. A little later, Al Lowry authored "How You Can Become Financially Independent by Investing in Real Estate." Al Lowry might be called "the father of the modern-day real estate seminars," because he was the first to hold seminars as a result of his book sales.

But it was Mark Haroldsen who carried the real estate investing book/seminar thrust to the next level. If you were tuned in to real estate investing at that time, you remember the newspaper and magazine advertising showing a picture of suave and bald-headed Mark leaning against the front hood of his Mercedes. I have had lunch with Mark and Al Lowry as they swapped stories of the advertising blitzes that vaulted them into national prominence for their real estate investing prowess. Mark later wrote "The Courage To Be Rich" and "Tax Free."
But it was Robert Allen who capitalized on the previous groundwork by Lowry and Haroldsen. Robert Allen was reportedly paid $1 million advance royalties for his best-selling book, "Nothing Down," a compilation of 50 techniques for buying property with no money. Robert had learned these techniques from several years experience with a commercial real estate firm. He later wrote "Creating Wealth" and "Getting Started in Real Estate Investing." The Robert Allen Real Estate Investing Seminars became a phenomenal marketing bonanza. The authors of various real estate investing techniques spoke at these seminars, but their spiel focused on selling packages of real estate investing materials that they offered for sale. Millions of dollars of real estate investing materials were sold at these 3 day conventions. I keep all of these books in my personal library, and you can probably still find them in your public library and book stores. We are now presented a variety of ways for making money in real estate investing in TV infomercials, books and seminars. Real estate investing is learned through trial and error. Real estate investing skills and techniques are acquired by practice. Every real estate investor has unique needs and is in a unique situation. Objectives of real estate investing differs.
However, if you are limited with real estate investing educational dollars and need to generate quick return on investment, I think fixing up cheap houses is an ideal beginning point. Real estate investing in makeover properties generates quick, profitable dollars with low risk.

B. Real Estate Investing Skill Acquisition
Real estate investing is not in any list of high school electives. You can’t get an accredited degree in real estate investing. You won’t find a high school or college guidance counselor who recommends a career in real estate investing (if the guidance counselor understood real estate investing, he or she probably wouldn’t be a guidance counselor!)
Unfortunately there is no class in “Making Money 101.” No teacher ever taught a class in “How to Succeed When Everyone Else is Failing.” I only became a multi-millionaire when I learned the skills of real estate investing, and I paid the price out-of-pocket and out-of-the-classroom for that education. I learned these skills in the ole University of Hard Knocks through trial-and-error.

Never disparage the cost of education. You’ve gotta get this know-how outside of a classroom, and learning how to make money is gonna cost you. But if you think the cost of education is expensive, you should calculate the cost of ignorance!

However, learning real estate investing doesn’t have to cost you an arm and a leg. Yes, I know, the real estate investing TV infomercials and the real estate investing seminars held around the country charge big bucks for those 3-day seminars and week-long Boot Camps. I’m not exaggerating the real estate investing educational system, because I know it inside and out. My opinion is that the fees charged are exorbitant because the promoters have found deep pockets in the marketplace.

When I started my real estate investing career 25 years ago, real estate investing TV infomercials were unknown and real estate investing seminars were extremely rare. Back then, Mark Haroldsen followed an emerging trend started by Al Lowry and Nick Nickerson by holding occasional real estate investing seminars across the country. Later Robert Allen expanded the industry. Robert Allen promoted real estate investing conventions in the major cities across the U.S. He found a market for costly real estate investing packages of information with cassette tapes and note books. TV infomercials, expensive seminars, and outlandish coaching fees followed in subsequent years. Would-be real estate investing aspirants today who want more than an inadequate salary from a job in Dullsville often conclude that they have to “pay through the nose” for real estate investing know-how.

However, through diligent searching, these wanna-bees often find that this education in real estate investing is more readily obtained from other sources than they previously imagined.
Real estate investing is probably one of the most easily learned skills never taught in school. Real estate investing is probably one of the most prolific careers available on Planet Earth. Because families now live in houses instead of caves, houses available for fix up are everywhere. And probably nothing contributes to upgrading the deplorable housing conditions across America comparable to real estate investing in fix up properties.

The entrepreneur-minded aspirant who discovers the real estate investing industry often catches a vision of life-beyond-a-job. Books and online courses offer an alternative to expensive seminars and coaching.

Alternative Investments - Which Is the Best for Your Portfolio?

2009-08-24T09:46:00.000-07:00

If you are looking at alternative investments the one we consider the best has an average gain of 920% over 20 years and has outperformed shares and property with less downside risk.

Alternative Investments What Are They?
The term alternative investments typically refers to hedge funds, private equity investing, high return mutual funds and a variety of non-traditional asset investments such as land, timber, art, precious metals and a variety of other collectables.

Alternative Investments - Reduce Risk and Increase Long Term Performance!
The addition of alternative investments to a portfolio of traditional investments can not only enhance overall portfolio returns, but also help reduce downside swings and losses.

Portfolio Diversification
The concept of not putting all your eggs in one basket when investing, and spreading the risk is not a new concept - Harry Markowtiz reduced it to a mathematical formula in 1952.
Today, his work remains a major influence on both asset managers and investors when considering the overall make up of an investment portfolio.

Low Correlation
Markowitz worked on the assumption that all investors what to avoid risk if possible.
The definition of this is "correlation," and measures how much an investor can expect different investments or asset classes to change in price relative to each other.

Attractive Rates of Return
If you choose the right alternative investment, then it will not only help reduce the risk of your portfolio, but can help provide better overall returns because some investments are correlated and move together. An investor should therefore combine a number of non-correlated investments to balance the risk and reward of the portfolio.

What is the Best Alternative Investment?
UK land is an ideal alternative investment to add to your portfolio - the reason for this is:
Its historical performance, not only has shown good growth, but downside risk has been relatively low.
Land has also produced solid long term gains regardless of whether stocks, equities and mutual have been rising or falling.
Land Prices Rising Strongly Creates an Investment Opportunity UK land has on average risen in value by 920% over 20 years.
The UK is one of the most densely populated countries in Europe and has a rising population, combined with a severe housing shortage.
There is a need for new homes to be built and land developed. You can make significant gains by buying land that could get planning permission in the future.

Alternative Investments are not Just for the Rich!
Many specialist companies will help you select land that has a high potential to rise in value.

Low Risk Investments - The Best Investment is Sometimes not the Most Obvious!
When most people think of low risk investments, they tend to choose from the following:
• Bank deposits
• Bank savings accounts
• Money market accounts
• Fixed income bonds
• Blue chip stocks
• Mutual funds

There are however, other low risk investments to consider that, in terms of long term capital growth potential can yield far higher returns with low risk.
A high yield on an investment does not necessarily mean taking a high risk. Let’s look at the options and analyze the risk / reward:
• Bank Deposits, Money Market, Fixed Income, Savings Accounts
• These represent probably the lowest risk investments you can have, and their return reflects this.
• Mutual Funds
• Blue Chip Stocks

With the performance of fund managers being poor, many investors simply try to make their capital grow by picking blue chip stocks and holding them for the long term. Again, performance of this buy and long-term hold strategy normally produces poor long-term growth.

What Returns can You Expect with Low Risk Investments?
Furthermore, wouldn’t you like an investment that unlike the stock market has shown better capital gains longer term with lower volatility? Well, if you are considering low risk investments consider the following:
UK Land - Low Risk and High Rewards
Land can be considered a low risk investment and remains one of the major secrets of the world’s wealthiest investors.

The Facts about UK Land Growth
In the last 20 years UK average land values have increased by nearly 1,000% and growth in the last year exceeded 30%!
Now consider this is the average growth, with careful selection of land plots capital gains achieved by astute investors have been much higher.

Why You Should Invest in Land
Unlike equities, the capital growth of land investments is attractive and so is the downside risk:
• Growth is consistent
• Low downside volatility
At one time land investment was just for the wealthy. Today, there are a number of companies helping smaller investors select plots of land to buy, and investments typically start at about $10,000.

Your Options with Low Risk Investments
If you invest your money, you want to have a spread of different asset classes to reduce risk and increase rewards.
For most investors this means money market, bank deposits, and savings accounts, fixed income bonds for security and mutual funds and equity investments for growth.
It may be prudent for many investors to diversify some their investments in mutual funds into land and take advantage of higher growth rates and lower volatility.

Where is Florida Investment Property

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Florida Investment Property – Why Investing is a Wise Decision
There are many reasons to purchase investment property in Florida, the foremost being value appreciation. Property values generally rise while debt decreases; making real estate purchases a good investment. Every year since 1968, the national median home price has risen. Usually, home values increase at around the rate of inflation, with a greater increase possible. In recent years, median prices have increased by as much as 9 percent, making purchasing investment property in Florida a wise long term investment. Building equity is an excellent reason to purchase investment property in Florida. Purchasing property forces you to save, making you a wise investor without realizing it. Owning investment property in one Florida location may make it possible for you to expand, purchasing a second and third property as rental profits increase. Owning investment property in Florida gives you borrowing power, the ability to use your property equity to borrow funds for your own use, or for further investment. Owning investment property in Florida gives you a sense of stability, not only for the consistent rental income, but for the potential of it becoming a regular seasonal vacation home for your family. There is stability on owning an investment property in Florida that can also be used as a family vacation resort.

Why the Interest in Florida Investment Property?
Considering the myriad of investment property locations on the market, Florida investment property is one of the most desirable. Home to 11 of the country's 100 fastest-growing counties, a Florida investment property has high potential as a profit-maker, unlike most other areas. Port St. Lucie, Miramar and Cape Coral are the fastest growing cities in Florida. It’s unlikely you will make a mistake investing in Florida real estate considering the vast number of tourists and new residents flocking to the land of sun and surf. Selecting a location depends on your goals for purchasing Florida investment property. Carefully consider what you intend to do with your Florida investment property. Will your purchase be used mainly as a rental property for vacationers? Once you have determined whether your Florida investment property will be used primarily for vacationers or for local renters, and whether you intend on using it as a vacation resort yourself, it is easier to choose the location.

Florida Investment Property Locations
There are so many location options of investment property in Florida, making it difficult to select just the right location. Do you desire a beachfront location, or one close to the coast, or would you rather select property in a town setting. Tourist area or settled community, inland or beachside? Asking these questions helps you narrow down your search. Each area where an investment property in Florida is located has its own flavor, its own attractions. Let’s start with the Miami area. Miami is located in the southeastern corner of Florida and Miami Beach is a seven mile long island known as America’s Riviera. Home appreciation rate in the Miami area is about 11% with the median home price around $240,000. There are diverse offerings of single family homes, ocean front property and ocean view condominiums. Condos and town homes may be cheaper, depending on location, but with price escalation and population density, even there it may be hard to find a bargain. Miami offers beautiful beaches with perennial sunshine but traffic congestion and the increasing population boom may be a deterrent to some. Just forty miles north of Miami, lies Boca Raton with five miles of coastline and gorgeous beaches. Appreciation rate here is around 11%. Clearwater, on the west coast of Florida borders Clearwater Harbor and the Gulf of Mexico. Indian Shores is a small historic community offering condos, gulf front property and Intracoastal Waterway homes and town homes. The appreciation rate for investment property in Florida, Clearwater is about 9%.

Investment Property in Florida – Daytona Beach, Jacksonville and Destin
Moving north in our search for investment property in Florida, let’s take a look at the Daytona Beach area. Daytona is known as a spring break and family playground on Florida’s east coast about 50 miles northeast of Orlando. Homes prices are surprisingly reasonable here in comparison with other popular Florida beach locations. A large variety of housing choices exist, everything from inland or waterfront property, to townhouses and single family homes, ocean front or inland. Older homes abound but there are also several new upscale building projects. Let’s take a look further north at Jacksonville. Jacksonville is known as Florida’s River City due to the ever-present St. John’s River which flows through the city, ponds and lakes. A modestly priced investment property in Florida can be found here with a range from $60,000 to several million. Appreciation is around 9% with continual growing home construction. Destin is located in the Emerald Coast of Florida, sitting on the Gulf of Mexico. Destin boasts great seafood, and excellent golfing and fishing. Home appreciation here is around 12% with the median home price about $165,000. Condos and townhouses here begin at $100,000 and can go upwards in the millions for waterfront property.

Investment Property in Florida – Attractive Tourist Areas
Let’s play a little word association. Real estate is booming here with the median price taking a dramatic jump from $166,000 to $200,000, an appreciation of 27%, making investing near Orlando a great venture. Conway Belle Isle, east Orange County, Maitland/Winter Park and northwest Orange County have seen the most dramatic property value increases. There is a strong job market here without forecasts of a downturn, keeping prices strong. There are a large variety of properties to choose from, including starter homes, modest cottages, older homes and impressive new developments. Orlando is called the City Beautiful and owes part of that title to its cleanliness, newness and innovation and variety of lakes and nearby attractions. Whether you are considering investment property in Florida as a rental for locals, as a tourist rental or to rent and use yourself, Orlando is an excellent choice in location. Consider the varied options of attractions in the Orlando area. Walt Disney World would be foremost as a draw card, followed by Sea World, and Universal Studios. Wet-N-Wild draws a huge number of the sizzling summer crowd, a great place to cool down on a scorching Florida summer day. Kennedy Space Center makes a great day trip as well as Cocoa Beach, home of Ron Jon’s Surf Shop and Daytona Beach, a world famous family and spring break destination.

Investment Property in Florida – Locations near Disney World
Having established that owning investment property near Orlando would be a wise investment decision, the search now begins for a specific location. Disney World, Sea World and Universal Studios are located on the south side of Orlando. Condos, town homes and single family homes are commonly purchased for investment purchase in this area. Closest to the Disney area is the community of Kissimmee, Florida. It is now booming with tourist activity. Close to Disney, within 30 to 45 minutes, lies the lesser-known town of Davenport, Florida. Looking to get into a ground floor investment opportunity? Bimimi Bay Resort, a brand new town home resort development is now offering purchase opportunities.