Investing Tips Information» Investment Protection

A Sound Financial Plan For Your Children

Bryan — Fri, 12 Jun 2009 01:26:31 +0000

Planning For Your Child’s Financial Future

by Cashmere Lashkari

As parents we love our children. We give them the best of everything that we can. Even at the risk of spoiling them silly. There is a desire to give the child the best that you can afford. Be it clothes, toys or education. Yet not many parents plan wisely for the financial future of their child.

You are alive and well today, and able to earn money regularly to meet the needs of your children. God forbid if something was to happen to you, what would be the state of your children? Not only will they be devastated that their parent is no more, but they would suffer severe financial hardships as well.

There is no guarantee of life. All of us feel immune to diseases for at least a couple of decades more in our thirties. What we don’t cater for is the unexpected. A healthy 30 year old can be dead in a car accident on the way to work. Don’t think it will happen to you? Why take a chance?

Secure your Child’s Future today!

Here’s a list of things that you can do. Do them all or pick a combination of what works best for you.

Get Life Insurance

While most of us have some sort of group policy at work, it is not enough for the child. It will help in the immediate transition though. So get a separate life insurance policy for your self. This should be payable as a monthly income to the family to help on a regular basis. There are options of paying the premium on a quarterly, annual or monthly basis.

Get Education Policies

Your child is going to need money at various stages in his or her education. At high school, graduation, and post graduation levels. Have separate policies that mature in the specific time frame that you will need the cash. These should be lump sum payments available for admissions and donations. The premiums can be paid monthly, quarterly or annually.

Get Gold

Buying gold was considered the wisest investment in the olden days. Even today it is a sound investment. While investing in physical gold may not be the greatest idea, considering how easily it can be robbed, get into gold funds. These are traded like regular mutual funds on the stock market. A great investment opportunity. Invest as much as you like when you have extra funds around.

Get Mutual Funds

The equity market always gives great returns in the long run. There are crashes when the market suffers, but if you invest in a SIP or Systematic Investment Policy, you will be immune to the daily ups and downs of the stock market. To safe guard your investments even more, invest in mutual funds that have performed well over the last five years and tend to invest in blue chip companies. Invest a fixed amount every month.

Get a PPF

A Public Provident Fund in the name of the child is a great idea to save money. You need to invest a bare minimum on a yearly basis, and when you have extra money you can park it there. The temptation to spend must be avoided at all costs. Even if it is something luxurious for the child. Earmark it as education money. Invest a fixed amount every year.

These are a few basic steps that you can take to ensure that your child always has a financially secure future.

To have your blog posts written by an experienced blogger contact me at cashlash@yahoo.com
Visit my personal blog at http://www.cashmerelashkari.com

Investment Frauds

Bryan — Wed, 29 Apr 2009 12:37:24 +0000

Unfortunately, investment fraud is way too common. I have heard of way too many people who have been ripped off by investment scams. Christopher writes an artcle about Investment scams.

5 Sure Fire Ways to Avoid Investment Fraud

For anyone that has ever looked for investments on the internet, you have probably come across HYIP oriented investments. HYIP is an abbreviation for High Yield Investment Program, which refers to a type of investment where the investor has the potential to generate a substantial return on their investment. This sounds great, except that the overwhelming majority – and I do mean the overwhelming majority – of these supposed investment funds are frauds. This article will tell you the main things can alert you to a fraud before you end up putting your money in one.

1. They Guarantee High Returns

No credible fund manager would ever, ever promise a guaranteed return on their investment. Why? Well, simply because genuine investments don’t operate like that. You may have months and years of extremely impressive returns, only to be followed by periods of unimpressive or negative returns. Historical expectations are fine, but they can’t predict the future. If you are looking into an investment that promises a guaranteed rate of return (and its not some kind of low yield fixed income investment), then you should stay away. This is definitely one of the biggest fraud signs to look out for.

2. They Promise Against Loses

This is somewhat related to the first point, but it pertains to the investment’s risk level. One day, out of complete curiosity, I went on to live support with one of the large HYIP sites. When I asked about the security of my investment, I was told that it was completely safe and protected. When I enquired further, the person that I was speaking with couldn’t explain how this was possible, aside from stating that it would be managed by professionals who have been trading for many years, and that it was diversified. None of this is an assurance of safety, and is simply a façade for the uninformed. The last straw came when they mentioned to me that it was also guaranteed by some other secretive fund full of cash. Even if there was such a source of capital, how could it be sufficient to pay back the principal for all of their investors if they collapsed? Frankly, it couldn’t – and realistically, it doesn’t need to, since it doesn’t really exist in the first place. Any reputable money manager is going to be candid with you about the risks of the investment. If they try to claim that they have no risk, or attempt to obfuscate their level of risk, it is best to give them a miss.

3. They Take Direct Control Of Your Money

Anyone familiar with the Madoff fiasco should know that one of the first ways to spot a fraud or ponzi scheme is if you are sending your checks directly to them. Scammers are usually very skilled – more skilled, in fact, than many legitimate investment funds – at setting up easy ways for you to send them your money. You can usually wire it, send a check to them, or even use paypal. Customers are often fooled by the guise of professionalism that this creates and don’t notice the insidious problem: they are sending their money directory to a firm that could well be a scam, with absolutely no 3rd party oversight. Genuine investment firms house their money at an independent custodian, so the client is able to have their account in their own name, with no potential for fraud on the part of the investment firm. This is definitely more tedious in terms of paperwork for the client, but the lack of this necessary safeguard is a easy way to spot a fraudster.

4. They Aren’t Sufficiently Transparent

Most of these investment scams won’t allow you full access to your account. Sure, they might send you monthly statements, but that means absolutely nothing. A statement can be forged to swindle $50 Billion from many large investors, so they can definitely be very convincing. Instead, what you need is the ability to actually login to your account, allowing you to view every activity that happens in your account as it occurs. This includes making an trade, taking an trade loss or gain, and any fees charged to the account.

Finally, I would even be hesitant about trusting the ability to access this information through the investment company in question. Many of these frauds have complex software, capable of reproducing what your investments should be doing, even if your capital isn’t really invested at all. As with the previous red flag, the only sure fire way to avoid an investment scam is if you are able to access your account information through a third party custodian, rather than directory through the investment firm.

5. They Aren’t Able To Explain Their Market Edge

No successful investment fund is going to give away the specific details of how they generate returns, but they should be able to offer a verbal overview of their market inefficiency. If they are unwilling to do this, or if they give some convoluted explanation, you should be suspicious. It doesn’t have to be incredibly complex, but they should be able to offer you a general idea of how they are able to profit.

Finally, don’t be tricked by people who claim to have gotten regular payments on Internet forums or investment review sites. Firstly, they could obviously be fake – but even more likely, as in the case of ponzi scams, they may well have gotten payments. In a ponzi scheme investors get regular payments that come from the initial investment in their account or the accounts of fellow investors. Regular distributions is no sign that it isn’t a scam; in fact, returns that are too regular may well be the sign that it is a fraud, since real investments are not cash machines, and tend to go through up and down periods. That said, with this guide, you should be able to avoid any investment frauds that you encounter. Just remember that any one of these by itself isn’t automatically a deal breaker. If they the red flag goes up for several of these, however, I would be very apprehensive of investing any money with that firm.

Christopher Muir is President and CEO of Invariant Capital Management, a New York-based managed Forex fund. Invariant specializes exclusively in robust, systematic trading strategies, focusing primarily on the G10 currencies.

Article Source: http://EzineArticles.com/?expert=Christopher_Muir

Investor Mistakes You Definitely Should Avoid

Bryan — Wed, 25 Mar 2009 03:10:23 +0000

Investor mistakes happen and the big ones can kill you financially. If you lose half of your money, you need to double what you have left to get back to break even. Here we discuss the major investor mistakes, not the obvious.

Call the following rules investing basics, or simply investor mistakes to avoid. The sorry thing about these investor mistakes is that some financial planners I have known not only embrace them, but they use them as sales tools, so beware.

Never play “catch up”. For example, your financial planner reviews your progress and finds that you are not on track to reach your retirement goals. Even though you are a relatively conservative investor he recommends investing heavily in aggressive stock funds to earn a higher return. The stock market tanks, and your dreams of early retirement go down the drain. This course of action goes against sound investing basics. Unfortunately, in 2008 and early 2009 too many investors made this major investor mistake.

Averaging down on a stock is an investor mistake, and an old sales tool used by some stock brokers to work a client for commissions. Your broker calls and suggests buying stock in XYZ Financial at $10 per share. XYZ sold for over $40 less than a year ago. You buy 1000 shares and the broker makes a commission. Two months later he calls back when XYZ is selling for $5. The broker exclaims that if XYZ was a good buy at $10 it’s a great buy at $5. You buy 2000 more shares, and he makes a commission.

When XYZ hits $2 your man pimps you again, because at $2 XYZ is the opportunity of a lifetime. You buy 5000 more shares, he makes yet another commission and soon after XYZ goes broke. You lose every penny you had invested. You made a major investor mistake and violated one of the rules of investing basics. If XYZ was a good buy at $10 and $5, why did it then go to $2, and end up broke?

Do not believe that higher interest rates are good for investors. Savers may benefit, but investor mistakes in times of rising interest rates can be costly. Bonds and bond funds will fall in value, and often times stocks and stock funds as well.

Do not believe that you have nothing to worry about if your investment portfolio is diversified. You are diversified if you own several stock funds, but in a bad stock market they will likely all be losers. For much of 2008-2009 there was virtually no good place for average investors to invest and make good returns. Investors lost lots of money, diversified or not, even if they understood investing basics.

Paying ongoing fees for service, or for timing services, is often an investor mistake. For example, you roll your $200,000 retirement plan into an IRA through a financial professional. He puts you into various mutual funds from various fund families. In addition to sales charges of almost 5% and yearly fund expense of over 1%, you are also charged a yearly service fee of 1 1/2%. That amounts to $3000 the first year and grows with the value of your account. Be careful what you sign, these extra fees are not necessary.

In regard to paying for timing services, this is almost always an investor mistake. Very few market timing services have a good long-term record for timing the stock market.

The last of our investor mistakes to avoid: don’t complicate your life by getting disorganized. You may have had numerous employers and retirement plans. Now you have your money scattered about and have lost control. Consolidate by rolling these retirement funds into an IRA with one or two major mutual fund families. You will be able to access your accounts and get service no matter where you live.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com

Article Source: http://EzineArticles.com/?expert=James_Leitz

Investing During The Onset Of Recessions

Bryan — Thu, 24 Jul 2008 00:40:55 +0000

When the economy is booming it is easy to make profits as just about everything goes up in values. However, during the onset of recessions and depressions investing in any old thing will not work. In fact you should invest as if there is a recession about to happen all the time in my opinion.

James writes an article about recession proof investing, but I would have a different approach. I would always invest in mutual funds that make money whether the markets are going up, down or sideways. They are funds that deal in futures, currencies or other derivatives. Trading can be very lucrative during the onset of the recession, as the market can fall very quickly allowing for many good “short” profits to be made. If you are not confident of trading though, then having some of your portfolio in mutual funds that invest in derivatives is the way to go. I invest in these types of funds via overseas investments.

Recession Proof Investing – Where to Make Money in a Recession

With most Western economies facing economic downturns, if not all out recession it is becoming increasingly hard for investors to find good investments that provide solid returns.

The recent global credit crisis has made it much more expensive for companies to borrow money to fund their activities. Virtually every listed company uses some for of debt to finance part of their trading activities meaning that there are virtually no companies out there that have been unaffected by this crisis. This increased cost of borrowing has forced profits much lower and for some highly leveraged companies it has spelled the end, just as it did for Bear Stearns. All of this has meant that stock prices have been falling and with the economic climate set to get worse traditional equity stocks look set to lose investors money.

Diversification is Key

Traditionally in recessions investors were well advised to move funds into what are known as ‘staple sectors’ such as food industries, the theory being we all need to eat and buy their goods. However the impact of increase borrowing costs as well as rising commodities prices has meant that food prices are getting more expensive and hitting the bottom lines of food industry companies.

In order to better recession proof your investments it is essential to learn to not be afraid of investing in new markets or industries. May investors make the mistake of believing they ca only succeed by sticking to investing in their specialized niche. This works when markets are rising however when they are falling it can be compared to trying to pick good apples out of a rotting basket. Instead look for a new fresh basket in which to invest.

Learn more about exactly how to recession proof your investing or learn to trade commodities.

Article Source: http://EzineArticles.com/?expert=James_McKerr

Lessons For Successful Trading

Bryan — Thu, 17 Jul 2008 06:20:39 +0000

Successful traders can make money whether the market goes up, down or sideways. However, there are some basic rules that apply to become a successful trader. To me they include good money management skills, discipline and a good frame of mind (trading psychology). Darlene Nelson has provided an article below that gives 3 lessons that she believes to be needed in order to become a successful trader. There are quite a few useful tips within it.

Three Lessons That Every Successful Trader Learns by Darlene Nelson

LESSON 1. AVOID THE COMMON THIEF I have noticed that some people display a common error in judgment that can be devastating. It’s kind of like letting a thief into your home and saying, “please turn out the lights when you leave.” The next morning you wake up and the house is empty, the safe is open, and all your deeds are missing. A few days later you get a call from your pension plan coordinator who bears heart-wrenching news “there is nothing left in you account, do you still plan on using our services?”What is this thief? What could people do that would cause them to lose nearly everything before they wake up? The answer is: Many people will start out slow and each time they make a mistake they try to solve it with larger amounts of cash. Over time they can drain their bank accounts, brokerage accounts, pension funds, and every other source of money. Only then do they stop and say, “Oops, I guess my trading methods are not working.”

Do you mind if I make a suggestion? When you decide to invest in the stock market, it’s best to use only a portion of your money for “High Risk Investments.” What is a high-risk investment? Anything that you personally control that can lose value if you make a mistake! Let’s say you have $30,000 of available funds, don’t dive right in with the whole thing, how about starting out with 10%. That means you would start with $3,000. Then you ask yourself a few questions:

“Is it OK if I place this money at risk?” “Can I handle the possibility that I may lose this entire amount?” “Can I accept that risk without losing my mind and self?”

If you can answer each question with a YES, it is indeed risk money that you will be able to use and you will be able to handle the ups and downs of the market. If the money is too important, you will end up making all the wrong decisions because your choices will be made because of fear and worry, not logic and informed choices.

Once you have arrived at the amount you want to work with, use that for a while. Then, as you experience positive results, you might reconsider. You could add a little, if it fits your plan. However, if you are having a difficult time and you feel like you need more money to help you “make up” your losses. STOP. Don’t add another penny. I have seen so many people who are still confused about things; use hard earned cash to experiment in the market. When they have a few bad plays, they go back to their secure funds and get another cash infusion. They continue doing this until they have nearly exhausted everything. Then they finally decide that they need to go back to the basics and find out what’s wrong.

The common thief is thinking that you can solve investment problems by throwing more cash into the system. There is nothing wrong with starting out small and working with that money until it becomes a massive amount.

Don’t get me wrong; I am not trying to say that most people lose money when they start investing in the market. That’s not realistic, I know people that have done great and others that have not done great. I have spent many years teaching people how to invest in the market. That exposure has given me the opportunity to talk with all kinds of people with just as many different experiences in the market.

I realize that using the concepts presented in this series of reports works best when you have a little more than $2,000, but not too much more. I have worked with tons of people that started out investing in the market with $2,000 or less which grew to hundreds of thousands of dollars.

How do you avoid the common thief? Be careful and go back to the basics if things are not working.

LESSON 2. IF YOU’RE WRONG, EXIT QUICK AT A SMALL LOSS One of my favorite stock market instructors is Ryan Litchfield*. Ryan says something like this “IF YOU NEED TO EAT A TOAD, EAT IT FAST BEFORE IT GETS TOO BIG”. The same applies to investing in the market – if a play is going bad or if you discover that your investment choice is wrong, get out ASAP. When a play goes bad take your loss immediately before your small error becomes a big disaster.

Let’s say a stock has reached it’s resistance and has started falling, you decide to short some stock or sell a call with plans to buy back at a profit when the stock falls far enough. To your dismay, the stock stops moving down shortly after you get filled on your sell order and then that stock starts moving like a rocket – IN THE WRONG DIRECTION costing you money. By the end of the day, the stock price has broken up through resistance. That night when you look at the charts, you realize that the stock may continue to go up a lot, make the decision to get out fast. When the market opens the next day, wait a short while (at least until amateur hour is over) then if the stock has not moved back in the right direction – call your broker and close the play!

The problem is people depend on hope too long. The stock shoots in the wrong direction and they keep holding on, hoping and praying for a miracle, until the play gets way out of control and it becomes a substantial loss potential. If you stay in a losing play too long, you will end up riding that nightmare all the way to the poor farm.

If a play moves against you, get out while the cost is small. There is nothing wrong with taking a small loss by closing the play. It is impossible to be 100% correct, all of the time. The stock market has its own mind and it will act the way it wants, regardless of our desires. Rather than looking at losses as a bad thing, think them as the cost of doing business. For example:

A grocer orders 5,000 boxes of cereal because a major kid’s fair is coming to town. The fair is canceled and the grocer is left holding far more cereal than she can handle. She gets out a big sign that says: “Cereal 50% off, while supplies last, hurry in for the big savings.”

Will that grocer spend the next three days crying over the cereal disaster? Nope, it’s never going to enter her mind, she will just look at it as a cost of doing business. She knows that it is far better to sell the cereal at a small loss, so she can use her money and shelf space for the production of income. If she were to hang on to the cereal, refusing to sell at a loss, she could end up losing customers because they are getting old, spoiled products. Not to mention, she can’t buy other supplies because she has too much money into the cereal. Eventually she could be faced with an even bigger loss when she has to dispose of spoiled products that no one wants to buy.

There is nothing wrong with selling groceries at a loss, if that is what it takes to move the product, providing it does not happen too many times. Even if you take a loss, it is better get out. Just like the grocer, you still have your capital left for other products (plays), which will bring you profits in the future. And you can always make a profit by getting back into the stock as it provides you with another window of opportunity. If you get out of a play because a stock moves the wrong way you will be happy that you got out early when you see that it kept moving the wrong way. Sure, you had to get out at a loss but you rescued some of your money. You can take that rescued cash and do other plays without having to watch a loser play get worse day after day. Believe me – that’s no fun!

Everyone has a few bad plays, mixed in with their good plays. If you win seven out of ten times, you will be ahead of the game at the end of the month. If you are sure to keep the losses small, your account will go up 7 down 3 up 7 down 3 up 7 down 3. If you are not having enough successful plays, it’s time to stop, go back to the basics, go back to class, do more practice trades, and get back on track.

LESSON 3. EVERYONE PAYS FOR EDUCATION In life education always costs us something. We can learn by attending the school of hard knocks or getting a formal education. Either way, we will invest time, money, and energy. The stock market is no different than any other profession or opportunity: if you want to make a profit, you have to learn how. There are no short-cuts or easy tricks; if it was easy, then everyone would be millionaires. I have seen people lose $10,000, $20,000, $50,000 and even more before they finally get the message – you have to know the rules before you play the stock market game.

I teach many online, free, stock classes each week. These classes are intended to be introductions to stock market investment concepts. You can get enhanced education by attending one of my live classes. I invite you to come spend two days with me. I promise to share two information-packed days with you and other serious investors. Many students tell me that if they could start over again, they would have attended my live class when they were first invited, instead of “wasting months, wandering in the dark, guessing.”

When you attend my live workshop you will learn in two days what has taken me many years to discover. I am constantly updating the subject material and improving the tools so that I can be sure to teach you everything I can in two days. Join me, it’s going to be an exhilarating experience.

Happy Trading,

Darlene Nelson

About the Author
Darlene Nelson is a professional stock trader and educator affiliated with BetterTrades. Visit the BetterTrades website to find out about online stock market classes.

Keeping Your Real Estate Investment Safe When Disaster Strikes

Bryan — Fri, 14 Dec 2007 07:09:38 +0000

Once you’ve finished searching for that real estate investment of a lifetime, you’ve gone to the open houses, you’ve gotten the financing, made an offer, sat at home worrying if it’s going to be accepted, had the celebratory dinner once it was and then moved in, you’re faced with the chore of protecting it. The number of threats that your property faces can be staggering. It’s not just termites and crude neighbours that are looking to sink your land value. Natural disasters are a part of owning land too.

It doesn’t seem to matter where you live in North America; there is a natural disaster with your name on it. The south has hurricanes, the northeast and Midwest has blizzards and the west has earthquakes. A quake is the most sinister of all natural disasters. People in the rest of the country can see a hurricane and blizzard coming days; sometimes even weeks away and properly prepare their property for the coming storm. With quakes, there is no warning (usually), there is no report on the news that morning saying you’re scheduled to get one. They just happen. So, how can you protect your investment from getting a bad case of the shakes? Here are a few tips.

A good first step would be to pick up the phone or log onto the company that carries your home insurance. Almost no homeowner’s policies cover earthquakes. If you have the extra cash every month, earthquake insurance is a very good idea, but be warned, it is considered catastrophic insurance, so the deductible is going to be very high, usually between 10-15 percent of the amount of your policy. It’s still a good thing to have. Check the website of the US Geological Survey to see if you live in a high enough risk area to warrant extra insurance.

A quick quake-proofing of your home is another good idea. This won’t so much protect your house as it will protect you if one strikes. Use latches to keep cabinets closed, always make sure you have fresh water around and working batteries in all flashlights. These are common sense steps that anyone who lives in any sort of disaster area should follow, whether it is earthquakes, hurricanes or blizzards.

A final step to safeguard your home is to know where your utilities shut offs are. Fires are common after earthquakes and you’ll want to know where your gas main shut off valve is so that you can turn it off and hopefully keep your house safe after a major quake. Also, do not turn the gas back on until you are told it’s safe to do so.

Keeping your investment safe from natural disasters can seem impossible, but with a little common sense planning, you can minimize the damage.