Tag Archive | "Investing"

Quick Tips For Those Investing In Commercial Real Estate (2)

Quick Tips For Those Investing In Commercial Real Estate

Today there are lots of opportunities in commercial real estate investment. This is especially true of properties that can provide an investor with even greater returns than the stock market or a savings account. When you invest in real estate, it is a secure investment that will stand the test of time. When you compare an investment in residential real estate with one in commercial real estate, it is quite clear that commercial real estate is the way to go.

Accept the fact that investing in commercial real estate can be a costly proposition. Getting property inspections, appraisals, soil tests and satisfying any other requirements imposed by your municipality all cost more money than similar residential property requirements. After completing these steps you may decide the property is not for you and have to start your search again.

Due diligence is required for commercial properties as well. This requires you to get a property inspection, an appraisal, and inspections that are required by the local laws. This will cost a great deal of money. If you find that the property is not worth it and lose that money you spent getting the inspections, then it is money well lost.

When looking for a commercial real estate investment, don’t automatically select apartments. Not that there is anything bad about apartments. However, there are also industrial buildings, office buildings, mobile home parks, raw land and many other commercial properties. Find the type of property that meets your needs and personal investment goals.

Even if you have already purchased a commercial real estate property, it is important to keep in mind that it is a long process. Some commercial property owners grow impatient with the process and want to give up on it. Just remember, everything has to be made official, documents need to be signed and possibly, repairs need to be made.

Remember to take everything your real estate agent says with a grain of salt. While they technically are on your side, at the end of the day they prefer to turn several quick purchases instead of making 0 extra by pushing for the absolute best deal for you. Listen to their advice, but remember to make your own final judgement.

If investing in commercial properties, always be aware that there are many other properties available. You should never allow yourself to feel pressured into a sale because you feel it is a last-resort. Other properties always go up for sale, so keep away from becoming emotionally involved with your sales.

In the long-term, commercial real estate investments are bound to be among the most profitable investments possible. Nonetheless, it can be frustrating to find a good commercial property, and managing commercial real estate can be quite challenging. Sometimes it’s easier to handle a larger investment than a smaller one because the increased income will allow you to hire staff and delegate day-to-day responsibilities. In the final analysis, you must weigh the pros and cons for yourself and make the decision that will bring you the greatest returns with the least hassle.

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Successful Investing For Income In Shares Or Forex

Successful Investing For Income In Shares Or Forex

Investment for income is generally a long-term proposition. It implies stability and it makes particularly good sense for people who do not expect to become market experts or security analysts.

In fact, there are respected authorities who state flatly that the investor who seeks anything more than income from securities must be classed as a speculator, a risky role to play for any but the most sure-footed professional.

Long term, it should be noted, does not mean forever. It does not mean buy-and-forget. Whatever your holdings, you should review them several times a year and stay alert for news indicating whether the prospects are good that your companies will continue to maintain their present level of earnings.

Unless you have strong reasons for dissatisfaction with an income stock, however, there is little to be gained by switching. Generally speaking, there is not enough difference in the yield, say, from two good-quality utility company stocks to justify the expense of selling one and buying the other. (Although 100 shares of a stock paying would produce more income annually than one paying .50, it would take more than a year to rationalize the commissions and taxes paid to sell the latter and buy the former).

Dividends have their own way of accumulating. Given the steady upward trend of stocks in this century, a well-chosen security will reward the investor who holds it patiently. In even five years there can be a dramatic increase in yield. Take, for instance, Central Illinois Public Service CIP on the ticker tape—a moderately well-rated small utility company serving agricultural, mining, and manufacturing areas of central and southern Illinois. In 1953 it hit a low of 17⅛ which meant a 6.7 per cent return in a .20 dividend. In 1955 the dividend was upped to .35; in 1956 it went to .60; in 1958 to .68; and in 1959 to .76. It is now .92.

Meanwhile, its price, reflecting the increased dividend, has more than doubled. At a recent quotation of 44, the yield was a respectable, but not unusual 4.3 per cent. The investor who bought at the 1953 low, however, is now receiving a quite spectacular 10.7 per cent return.

At this point, day-to-day dips and rises in Central Illinois Public Service mean little to the investor of seven years’ standing. By now the dividend would have to be cut more than a third before he found himself where he started, and 64 per cent—to 70 cents—before he reached the 4 per cent return of the man who bought at 40. These drastic cuts are not inconceivable. But the cushion for the investor who bought in 1953 is considerable. There would have to be some quite violent reversals in the price and prospects of CIP before he would be moved to sell out.

The problem of stability is a beguiling one. For many investors it represents the compromise between safety and risk. Safety, as we will see, offers a discouragingly low return. Risk is the privilege of those who can afford it exhilarating when one has dared and won, but painfully, most truly felt by the loser. Somewhere in between, most investors decide, there must be a sensible course, commensurately rewarding and so there seems to be. Stability is the touchstone. The gauges of stability are many.

The one hazard is that they are inevitably based on past performance. No one can say for sure when the downhill slide will begin, when the earnings will diminish, when the seemingly unshakable dividend will be cut or passed.

One gauge, nonetheless, is the consistency and longevity of a company’s dividend payments. A company that has rewarded its shareholders through fair weather and foul must not only be considered strong, but reasonably proud of its performance and eager to maintain public confidence in it.

These records are easy to check. Any broker, for instance, can supply you with a list of the 50 companies with the longest records for consecutive annual dividend payments. It is an impressive group, headed by the Pennsylvania Railroad, which has managed to pay a dividend every year since 1848.

There are no dividends from investing in currencies but you can make more money from a good movement in your currency pairs.

Using Forex software will help you to predict when and which ways different currencies are likely to move.

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Investing In Gold Coins And Bullion

Investing In Gold Coins And Bullion

The first known coins were minted in the mid-seventh century B.C. Coins revolutionized the conduct of commerce.

Alexander the Great introduced a regulated and universal coinage throughout his empire. Coins were typically engraved with the likenesses of rulers and deities, providing a historical snapshot. Coin collecting started in Renaissance Europe. Wealthy

Europeans collected Greek and Roman coinage.
The United States minted its first gold coin in 1795. From then until 1933, U.S. mints produced hundreds of styles and denominations of gold, silver and other coins. Dazzling pieces of artistry and history, collectible rare coins and bullion are among the most prudent additions to any quality investment portfolio.

A collection of coins and bullion could add value and stability to a portfolio. Investing a percentage of a diversified portfolio in gold, silver and platinum could act as a hedge against inflation. Gold can be viewed as an alternative asset class. Tangible assets are usually not as susceptible to the same market pressures as stocks and bonds. Typically, gold is not correlated to either the stock or bond markets.

Gold often trades inversely to the U.S. dollar, making it a useful hedge in times of dollar depreciation. The gold supply is limited – all the gold ever mined would fit into a storage room about 55 feet long, 55 feet tall and 55 feet wide.

Bullion is a term for coins, ingots, private issue, and so on that trade below, at, or slightly above their intrinsic metal value. Only the precious metals (gold, silver, platinum, and palladium) are included as bullion. A bullion coin is a legal tender coin that trades at a slight premium to its melt value.

Examples of bullion: U.S. Gold, Platinum and Silver Eagles, Canadian Maple Leafs, South African Krugerrands. A rare coin can be determined by several factors: mintage, grade, series. Values of coins are determined by both scarcity and grade.

Set building is the practice of collecting a complete series of coins representing all the different designs of a certain U.S. coin, for instance. It provides a systematic path for the collector.

Investors have frequently found that a carefully assembled set of coins is worth substantially more than the total of its individual pieces. Well-compiled sets have also tended to be more liquid than comparable accumulations of random coins. It can provide an exciting historical treasure hunt, as well as an investment instrument.

Set building provides the investor with the opportunity to define objectives and formulate strategy. Set building can be a life-long adventure. Sets can be collected by: type (which can be any particular design or denomination), series (all dates and mints struck of a denomination) or design type, commemorative issues, and more.

A key date coin is generally considered to be the most important coin in a particular series, usually the lowest-mintage and/or the most expensive. Rarity is based on the number of specimens extant of any particular numismatic item.

For protection, investors and collectors should only buy rare U.S. coins that have been graded and certified by the three leading independent coin-grading firms: professional Coin Grading Service (PCGS), numismatic Guaranty Corporation (NGC), independent Coin Grading Company (ICG). These organizations are recognized industry-wide for their accuracy, objectivity and high standards.

These services help to make the market in numismatic coins safer and more liquid. When a coin is graded, it is immediately encased in a tamper-resistant slab and sealed with its certification number and grade displayed.

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Investing In China: Chinese Banks

Investing In China: Chinese Banks

China’s banking sector has traditionally served as a party-controlled feeding trough for its inefficient, unprofitable state-owned enterprises (SOEs), most of which were technically insolvent. The process was simple – extend a loan to an unqualified SOE applicant, then write off the loan as a bad debt when it failed to repay. This situation is beginning to change, and Chinese banks are attracting the attention of foreign banks that are beginning to view them as investment opportunities rather than potential competitors. Nevertheless, China’s banking industry is beset by several problems.

1. SOE Lending: The importance of the Chinese banking sector as a source of domestic capital is hard to overstate. Mainland China’s stock markets are anemic compared to the behemoths of Hong Kong, Tokyo and New York, and China’s bond market is virtually nonexistent. That leaves banks as the only major source of over-the-table domestic funding for private enterprises. Yet SOE lending continues to siphon off a good part of banking capital, notwithstanding that China’s stock markets were largely designed to provide SOEs with an alternative source of funding. Many domestic companies have resorted to the underground institutional loan sharks with their high interest rates, or rely solely on retained earnings for funding. Even though SOE loan defaults have declined dramatically at some banks for recent loans, the industry as a whole is still experiencing a hangover from imprudent lending under earlier, more politicized lending policies.

2. Corruption: There is a crackdown underway, but corruption is rampant in many sectors of the Chinese economy and the government is always cracking down on corruption in this or that industry. Meanwhile the cycle continues. It is tempting to predict that only the threat of bankruptcy due to foreign competition will ever be enough to create the political will necessary for consistent enforcement of the law.

3. Decentralization: China’s banking sector looks fairly centralized on paper, but the hidden problem is the de facto independence from headquarters of far-flung branches. China’s branch banks have been used to operating with a much greater independence than is the rule in the West (thus contributing greatly to the corruption problem), and any attempt to assert control from HQ is bound to be met with spirited local resistance.

The moment of truth is coming up fast, however, as China’s WTO commitments require it to fully open its banking and insurance markets to foreign competition next year. The government is responding by introducing a host of new regulations to rationalize lending practices and by cracking down on internal corruption (whether the new regulations will actually be followed by the branch banks is a question that only time can answer). Banks are responding by listing with IPOs on overseas markets and with American-style “downsizing”, closing branches and laying off staff.

Foreign banks are responding by investing billions of dollars into Chinese banks, surprising in light of the above problems. Furthermore, they are acquiring minority stakes that are unlikely to ever offer them operational control, in some cases mainly for the purpose of securing access to distribution networks for insurance, credit cards, and investment products after 2007.

Nobody wants to see China’s banks wither in the wake of foreign competition – not even their foreign “competitors”, because a Chinese banking crisis would have a significant negative effect on the entire world economy.

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Achieving Success In Oil & Natural Gas Investing

Achieving Success In Oil & Natural Gas Investing

Investments in oil & gas private placements, or direct participation projects should only be made by investors who understand, or learn how to implement a deliberate plan to minimize risk, while clearly understanding a likely, and reasonable risk/reward ratio…investors need to accept the over-all risk they must take to achieve the upside necessary to justify taking the risk in the first place.

Investing in oil & gas projects usually takes a check-list approach in my view. Investors should realize that almost all oil & gas development operations involve technical challenges. Deals take time to develop and come to fruition, actually, often up to two years before significant pay-back of capital is possible.

Oil & Gas investing is not for investors who don’t need the tax advantages, or who simply think they are going to get steady, and fixed rates of return each month immediately after they first start investing. The only exception that I know of is when you find an oil and gas investment which is nearly fully funded already, and is one which is beginning to achieve some level of success when you find it.

Spreading-out your capital in multiple well drilling programs with people who control, or operate their own deals makes more sense to me than trusting a promotional company who wants to test a new drilling location with your money.

Investing in the Stock market where you get liquidity with public stocks on the larger exchanges, and your principal is typically safer is a better place to start when considering oil & gas investing.

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Momentum Investing and Trend Following: The Secret to Significant Portfolio Returns

Momentum Investing and Trend Following: The Secret to Significant Portfolio Returns

Two popular terms which often confuse investors are “trend following” and “momentum investing.” Perhaps the most glaring commonality between these two is their blatant defiance of “buy and hold,” the practice of selecting an investment and holding it indefinitely, believing that over time the market goes up, and therefore any investment will appreciate. Although the buy and hold approach has been touted for years by academics as the best method of investing, in reality it has its shortcomings, which are apparent in every Bear market.

Despite being the antithesis of buy and hold, both momentum investing and trend following strategies are predicated upon a disciplined investment approach that’s designed to buy when the price of an issue is increasing and sell when the price is declining. Additionally, an exit strategy is normally incorporated to override the human tendency to hold losing positions much too long. Yet despite the distinct characteristics that these two terms share, in reality they are quite different.

What is Trend Following?

Trend following, in its most basic definition, is a systematic investment approach predicated upon buying and selling securities based on the sustained price movement of the issue. It’s important to point out that trend followers don’t predict the future price movement of a stock; rather they examine the issue using technical analysis to determine which direction, if any, the equity is currently moving. If a bullish trend is emerging, the trend follower will likely buy a position in the stock and hold it until the trend begins to weaken or change direction. If the equity exhibits a bearish trend, the trend follower can short the position, wait until the trend reverses, or merely find another issue.

But there’s much more to being a successful trend follower than just selecting and buying securities. In fact, it can be argued that the most important aspect of trend following isn’t when and what to buy, but rather when and what to sell! Often times, successful trend followers establish a “sell rule” that must be violated prior to selling the issue. These sell rules vary depending on the risk tolerance of each investor, but they typically consist of a trailing stop loss coupled with a confirming indicator. The overarching benefit of sell rules is that they provide a disciplined, mechanical methodology which the average investor should seriously consider implementing into his investment philosophy.

What is Momentum Investing?

Momentum investors are constantly searching for companies that are moving faster than the market. They believe substantial returns can be realized if they find, buy and hold onto those issues for as long as the price continues to go up. The old axiom, “if it isn’t broken, don’t fix it” illustrates the shared philosophy of momentum investors; those companies with the biggest price changes over the last few months are more likely to continue making substantial gains.

Fundamental analysis plays a much bigger role in momentum investing than it does in trend following. Momentum investors believe that buried within a company’s earnings statement is the reason why the price has been increasing so dramatically. And if that underlying reason is uncovered, the opportunity presents itself to capitalize on that knowledge in the future.

In the case of trend following, investors want to identify where a security may be within the performance cycle. For example, how close to the 52-week high or low is the current market price and what is the short-term direction of the issue? For the momentum investor, the key criteria may be the relative strength of the security versus the market or more importantly the peer group of the particular security in question.

How to Develop a Successful Investment Strategy

Investors often ask why go through all the effort of actively managing a portfolio. The simple answer lies in the proven behaviors of economic cycles and sector rotation. Independent studies have proven that over time the largest percentage of a securities’ price appreciation is driven by the industrial group within which the company is classified and not the performance of the individual company itself.

However, the real reason why investors should actively manage their portfolios is a concept called the “Time Value of Money,” also known as “Compounding Rate of Growth.” Many financial professionals will use the example of how a penny, if doubled every day, is worth over million after only 30 days. A very impressive and eye opening number given the small amount of initial capital outlay. What would happen if instead of doubling the penny every day, it were to grow by only 75%? The investment would be worth slightly over 5,000 rather than .7 million. Reducing the growth rate further to 50% and the end value is now ,917.51. A 25% growth rate for 30 days produces a value of only .08.

How does the concept of compounding growth translate into the selection of an investment strategy? Investors who actively manage their portfolios, either through trend following or momentum investing, have the ability to take modest gains and re-invest the profit in other trending securities over and over again. Buy and hold investors are not awarded this luxury since they rarely sell when the price is at the top. Rather, they buy a position when the price is low, ride the position all the way up in a bull market, and then watch as is loses value in a bear market. It’s a very frustrating strategy, equally hard on the stomach as it is on the wallet.

Both strategies, trend following and momentum investing, demand a certain level of self-discipline in order to be successful. A portfolio risk-management system that uses the current market price and equity level of a position and some form of market volatility measurement is recommended. An example of such a system could be a proprietary market model focused on technical indicators, back tested over time, coupled with a volatility indicator. The system might employ either the Average Directional Movement Index (ADX/R), the CBOE Volatility Index (VIX) or the more traditional Advance Decline Line, Breadth or Volume indicators.

Taking Portfolio Risk Management Systems One Step Further

One noted management system authored by William O’Neil is CANSLIM. The CANSLIM approach combines both fundamental and technical analysis much like the Core Equity Portfolio available at QMA Investment Management, LLC. The weakness in the CANSLIM approach, along with many other similar systems, is that they stop short of providing a truly utilitarian system for the investor. The user ends up with a list of stocks, all of whom have meet the systems criteria, but no method for distinguishing between the good, the better and the best.

To address this problem, Alpha Advisor Service, LLC created the AAS Rating Score. This number is a time-weighted risk-adjusted alpha value used to rank each of the 1700 investments analyzed daily by AAS. The purpose of the AAS Rating Score is to create a level field to measure all investment alternatives. The highest AAS rated securities provide the greatest risk-adjusted return compared to the lowest rated securities. This approach is superior to other forms of alpha analysis since it is time-weighted, thereby identifying those stocks or funds that are providing greater returns for the risk taken. A tool of this caliber, which is available for any investor via the Alpha Advisor Service Newsletter, provides the means of not only developing a customized portfolio risk-management system, but also a disciplined method of buying and selling the securities within the portfolio.

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Investing in Oil in the Face of Terrorism

Investing in Oil in the Face of Terrorism

Terrorist attacks threaten the security of nations and create an atmosphere of uncertainty. These threats impact stocks and commodities markets around the world and make investment decisions very difficult, even for the experts.

So what can average investors do? First, they should ask themselves what the likelihood is of a major terrorist attack. Then, they should determine whether their portfolios are hedged sufficiently with oil-related investments that would increase in value should a major terrorist attack disrupt oil production and distribution.

“One of the critical issues we face with oil security is its transportation,” said Roger L. Cory, president of Mammoth Resource Partners Inc., a Kentucky-based oil and gas exploration company. “Our oil transport system is a worldwide network. It’s practically impossible to secure it all and one soft target for terrorists can create significant disruptions.”

Mammoth Resource Partners released a lengthy report detailing the vulnerability of this industry to terrorism. The report warns that the “oil transportation system provides an endless array of possibilities for the terror networks to exploit.”

Oil wells, drilling platforms, loading terminals, ports, tanker ships, storage tanks and refineries are all prime targets. The 200,000 miles of pipeline in the U.S. and the 10,000 miles of pipeline in Saudi Arabia are particularly vulnerable, especially as most of the pipelines are above ground and poorly guarded, according to the report.

Straits and canals around the world also can be terrorist targets. More than 6,000 oil tankers travel through the Bosporus annually, and 80 percent of all Persian Gulf oil – 40 percent of the world’s oil production – travels through the Strait of Hormuz.

The Ras Tanura complex in Saudi Arabia is an example of the precariousness of the situation. According to the Mammoth report, “Experts estimate that a single aircraft flown into the Ras Tanura could disable it indefinitely and create an instant oil price spike of to 0 per barrel.” Current prices are around per barrel.

What does all of this mean for those who want to invest in the oil industry? Investors should be cautious, Cory says. Buying stock in multinational companies may not bring much return because you are investing in a company, not in oil. Since natural resource mutual funds are diversified, their oil holdings may not be sufficient to return a decent profit. With oil futures and options, there is greater risk. Timing is everything; being off in your calculations by just a few days could cost you dearly. And, the professionals know that 80 percent of all options are worthless when they expire.

Oil and gas partnerships – in which investors own a percentage of the resources extracted from the wells they funded – provide a middle path between low- and high-risk investments.

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Trading Tips For Successful Forex Investing

Trading Tips For Successful Forex Investing

If every investor out there suddenly started to profit, then the markets would completely shut down. Somebody has to lose money for other people to make money, and that’s what’s so dangerous about a market like Forex. However, if you check out these tips and tactics, you can end up on the right side of the fence.

Do not put all of your funds into one line. Divide your capital into a certain number of equal parts and distribute it that way. If you have 50 shares and you end up losing one, that is only 2% of your total capital. Put it all in one line, lose, and all your money will be gone.

Make sure you use the Forex market for your analysis and not the news. Just because good news is coming out about a country does not mean that the currency news is good. So do not let lots of good news about a countries political standing or economy influence your decisions on holding its currency.

If you are a first time investor using Forex a good advice that can be offered is to not invest blindly. Many first timers just pick a current without reason and watch it. Do some research first then pick a currency to watch. Your wallet will thank you for it later.

Understanding each individual currency is critical to trading the Forex market. The Japanese Yen is dependent on the fortunes of the Japanese stock market, the Nikkei index, and also the real estate market in Japan. These are not independent activities, they all tie into the price of the currency and the trading of the Yen.

Making too many trades on the forex market can drain your bank account and your energy. Focus on the trades you really want to make as part of your overall plan. Often, the less you trade, the more profit you end up making.

Have a formal system of operations in your home office to keep things organized, running on schedule and allowing you to focus on your forex trades. Try to do the same things in the same order every day, so you are less likely to forget a step and end up in trouble later.

A lack of experience with forex often results in taking risks. Inexperienced people get very excited with an initial winning streak. It is vital to use self-discipline if you start losing. Stop after 3 losses in a row and stay away for a couple of days. Think about and evaluate your past decisions and possibly use some demo trading to get back on track.

If you are new to the trading world, one of the things you must do is to study the market. You should also practice what you are doing by using a mini account. When you are trading, remember that the lower the risk you are taking, the higher your chances of making money.

Using the right information, such as the tips in this article, will ensure that you’re never one of the marketplace losers. You won’t have to worry about other people taking advantage of you, as long as you’re willing to apply the tips you learned here. You might not become an expert overnight, but you won’t become one of the losers, either.

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Basic Investing Rules

Basic Investing Rules

Investing your money can be a great way to ensure your financial future. With the right investment choices, you can be sure to have money for emergencies, to put towards the education of your children, and to have available when the time comes for you to retire. There is a key word in the preceding phrase however- “right”. If you make the wrong investment choices, you may just end up where you started or worse, flat broke. Most people who invest wisely by making the right decisions with their money follow the same basic investment pattern, although they may define it by another name. It might be that you are the cynical type who chooses to believe that the basic rules could not possibly be as easy as they seem, in an area that seems so complex. It is true. However, that these rules have withstood the test of time.

First of all, make sure that the money you choose to invest is indeed earmarked for the purpose. As in any form of gambling, there is nothing to be gained and everything to be lost when it comes to investing. Do not put up money that you cannot afford to lose should the market take a downturn.

One rule that people seem to refuse to apply in any area of their lives, including the world of investing, is lean not on your own understanding. Most of the time, this is the result of people balking at entrusting another person with their money, believing that with a little understanding they can work the market themselves. This reasoning is fundamentally flawed. In the first place, most people will not be able to begin to unravel the complicated graphs, pie charts, and statistics by which the investment world relates its information. In order to understand what the numbers mean, you will need to have some basic training. There may come a time after you have had some experience in the market that you will be able to make sound decisions on your own, but the initial get-your-feet-wet phase is not the time to attempt it. Check the background of the advisor you choose, as there are a lot of brokers out there looking for a quick fleece. The best brokers will have years of experience, a variety of investment backgrounds, and will probably cost you much less than you might think.

Think long term. Unless you invest millions of dollars initially, it will take time for your investments to mature and begin to accumulate substantial gains. The best investments are proven over time, and thus it is best to place your funds in long term choices. The details of this are plain- it is best to forget about this money in terms of a cash fall back, at least for a number of years.

Diversification is an oft-flogged truism of the investment world. A good portfolio will include cash and cash equivalents (GICs, fixed annuities), growth investments (stocks), and growth and income investments such as mutual funds. Diversification ensures that you do not have all your eggs in one basket should any part of the market experience a downturn. Note that diversification means not only investing in several areas, but also making sure that no one area contains a disproportionate percentage of your funds.

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Discover Investing For College Students

Discover Investing For College Students

If you are in your forties or older, you may have memories of being an absolutely broke college student and the thought of “investing for college students” was the farthest thought from our mind. Most of us back then, when we were attending our various institutions of higher learning, were concerned about partying and where the next meal was coming from. In fact, there was often a certain connection to our fellow man and even a certain sense of pride in being a “starving student.” Well, it is the rare college student today who is “starving.” Most have access to funding from a variety of sources, and some even seem to live better than we do.

However, it is becoming more and more common for students to graduate with a lot of debt, and, unfortunately, the way they live while in school takes its toll later on when it comes time to pay back loans and student credit cards after tossing the caps in the air. If you are a college student or have a college student in your life, you should know that investing for college students, while still within the hallowed halls of learning is not impossible, and in fact, it can be downright smart.

If you are a student and start your “investing for college students” now, you will be much more likely to be able to fund a retirement, plan for your own kids’ college educations, buy a home without struggling to pay the mortgage every month, and do all the other financial things that go along with life.

Some students nowadays have more than one scholarship and/or are benefiting from a pre-paid tuition plan purchased by their parents. There are lots of students who actually have disposable income. For example, I purchased pre-paid college for my daughter and she also qualified for academic scholarships. After paying tuition, fees, and books, she has three hundred dollars left over each semester. Since she also works part-time and we help support her, she actually has money. There are lots of other students in similar situations, as well. It just makes sense for her to start building her wealth now while her responsibilities are relatively small.

Even if you don’t have that kind of “free money” coming in, it still makes sense to invest some of what you do have. There are very safe ways to invest, such as CD’s at the bank. Some students even invest in real estate rather than renting for four years, although some would probably be leery of that during this real estate market. You should not overlook investing in mutual funds and stocks, however, just because you think you don’t have a lot to put aside.

In today’s times, there are lots of professionals who cater to your lifestyle and needs as a student, and it is now very common to find brokers who will accept small amounts of capital. There are online services and brokers who speciliaze in the field of “investing for college students. Therefore, as you continue your higher education in your discipline don’t ingnore your financial education as well.

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