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Posts Tagged ‘investment’

Many investors, both beginners and experienced, are stuck with the statement that investing in bonds safer than stocks. This is not entirely true.

Financial Planner Benjamin Graham said, should be the first to ask, “depending on condition and price as well,” before stating which one is more secure.

An example will give an overview of this concept. Imagine you have two options to invest. First, corporate debt, aka bonds with interest of 8.5% per year. If the company goes bankrupt, you are in the third row who will receive your money back, after the creditors and shareholders get a share of the liquidation of assets.

In a bankruptcy situation like this, usually the controlling shareholder funds are preferred, after the last new minority shareholder of creditors, including bondholders. But each company can also apply different things.

Should you really avoid bankruptcy situation like this because it is very complex and many new investors are not fully aware of the bankruptcy procedure in situations like the one above.

The second option, the shares in a company that did not have debt trading at p / e ratio of 10, with the yield of 10%. Good management, sales grew more stable and higher than inflation. If something happens to the company, the shareholders being the first to be served because no debt especially bond holders.

In situations like this, you will choose to invest shares in the company because it is safer than bonds. Do not be surprised, there are many more reasons to confirm this theory.

Here are a few reasons stocks safer than bonds as quoted from beginner invest

1. Risk stocks similar to bonds, but stocks will be in front of the queue more than bonds if the company went bankrupt. In his book output in 1934, Graham said, in a normal situation (in the sense of risk is not high), holding the shares as safe as bonds. If there is something in the company, shareholders’ funds will be returned immediately after the employees, landowners, and other vendors to get the liquidation.

2. Usually the minimum interest on the bonds of about 8.5% per year but it has not cut taxes, so the net yield of about 5.53% has been cut in income taxes. So about 35% of the yield or profit that you can run into tax. While the stock, the dividend yield is usually about 5% and only 15% of taxable net yield so much as 4.25%. So the difference between stocks and bonds rather than 3.5% but only 1.28%.

3. If everything goes well, dividend stocks have the potential investors could be improved in order to enjoy a higher share of profits from the rate of inflation. This is usually done after the company raised prices of products and enjoy a surge in profits. This can not happen in bonds, because in the beginning you’ve set a fixed interest that can not be changed. If inflation suddenly rose high as the crisis in 1998, is still interest you received as agreed earlier.

If Not Forever More Safely From Stock, Why Many People Think the contrary? The answer, as many new investors who can not distinguish between volatility and risk.

Volatility is a term used to describe price movements are frequent, fast and sometimes very high or very low. A stock may go up or down as much as 50% in one year.

Volatility and risk is not always the same thing. Perhaps both are still difficult to distinguish, because there are still many people who choose to avoid such volatility. For example, people prefer to get a yield of 8.5% per year, although only 5.53% after taxes, whereas about 11% inflation.

Although inflation eroded, many people feel comfortable with investing in bonds is not to have struggled with all the ‘roller coaster’, as often happens in the stock investment.

In conclusion, the bond today is not as safe as before, such as stocks that are already not too risky. All returned to that statement at the beginning, “depending on the condition and the price also.”

So where is the safest according to you?

Investment plays an important role in our survival. At the present time, saving money is not enough, especially with the interest savings are still far below the annual inflation so the value of your money will be increasingly eroded from year to year.

For example, if you have a USD 100 million is stored securely in a bank with an annual interest of 5%. Thus, in one year you will have a Rp 105 million. That number is increasing, but the actual value falls.

With the inflation, which on average is usually around 6% per year, then if one year ago with the money of Rp 100 million you can buy a car, this year the car price to $ 106 million. The money you save in one year was not even enough to buy a car, even with interest the bank.

To avoid this happening, you need investment. The place could be anywhere, stocks, bonds, mutual funds atua property. This last one is the way of investments that do not require a lot of money, but with a fairly high yield.

By investing in mutual funds, money in the long run will result in higher values ​​of inflation. Mutual Fund is an option for potential investors who do not have large funds, lack of time and access to information and want to have a diversified portfolio.

How do mutual funds invest safely? Here are tips for beginner investors provided by the Senior Financial Planner Akbar’s Financial Check-Up, Lisa Soemarto as he said at the launch of his book “Reaching the future with the Mutual Fund” in the Grand Indonesia, Jakarta, Saturday (26/11/2011) .

1. Consult with your Financial Planner (Financial Planning)

There are plus minus if we direct it to the dealer mutual fund, because of course the sale is limited. It is worth consulting with a financial planner because it is an independent profession. So it can be directly recommended products, continues then we will be more confident to invest.

2. Determine the types of mutual funds based on financial goals

Setting usability funds invested in the Fund. Are the funds for the purchase of assets, to fund children’s education, for retirement or for any other purposes in the future.

3. Set a time period based on the investment needs

Set a time period when the funds will be used. Thus, investors can specify the type of Investment Fund that will be purchased in accordance with the time period. Not all of Mutual Funds in accordance with investment objectives.

4. Know your risk profile

Types of Mutual Funds derived are also tailored to the risk profile of investors. This will determine the allocation of Thomasin magnitude of these types of Mutual Funds that have purchased the customizable between investor risk profiles and risk profile types of Mutual Funds

5. Select Investment Managers

Investment Manager’s background can be read in prospekstus Mutual Funds. Select Investment Managers who already have experience in managing a mutual fund.

The following guidelines can you do in selecting Investment Managers:

Select which already have big names
Check the Fund Fact Sheet, if it shows a good performance of return (return on investment since published) is higher than interest rates and inflation rates. Examples of Mutual Funds A ‘return’ since published in 2006 is 100%. Then ‘return’ Investment Fund is a 100% per year: 5 years = 20%. Above 20% is good.
Select which already has a website because we can download Fund Fact Sheetnya and there is an auto debit each month.
Check if the Investment Manager have had problems in the capital markets
Check how much money is managed by the Investment Manager.

Successful investing.

Investments must be Arrested for Long Term

The key to successful investing is the fifth in must be retained for a long enough period of time. This is done to ward off the volatility and risk of loss. The biggest mistake that is often taken by investors is always too ready to protect their portfolios, so often panic when the market crashed and took off the entire investment.

In fact, investors should be sure that the weakening trend that is only part of the cycle that will eventually bounce back, unless it is an investment instrument cycle is nearing its peak.

• Evaluate each investment trends

The key to successful investing is the sixth in a contrary investor, but not against the market. For example, when everyone take action to buy, you must be a seller. Vice versa, when everyone is selling, you must be a buyer. As Warren Buffett said, “you should be greedy when others fear, and fear when others greedy.”

• Know the peak of the cycle of the investment before maturity

The seventh or last key in successful investing is to oversee the investment cycle peak before falling. An investment will reach its peak before it finally entered the downward trend. Indeed peak can not be seen by the naked eye, but there are some features you can consider:

The yield that you get a sudden speeding, higher than that usually you get within a year. Soon this investment cycle will reach its peak.
If all you know, friends, relatives and neighbors talk about the benefits of investment results obtained in the same instrument with you. The characteristics of approaching its peak.
If more people started to stop working and rely on just living by trading stocks through online trading in the stock, or a real estate broker. Examples like these show that both instruments investment cycle has reached its peak, it is time you are looking for a new investment instrument with a cycle that is still young.

Good luck to start investing …

The best investment strategy can turn into disaster if you have no stomach to handle.

1. The bag is filled with people who know the price of everything but the value of nothing. Phillip Fisher. Another way of saying that without education and research investment, leading to poor investment decisions. Research is much more to listen to the mainstream.

2. Invest in yourself. His career is the engine of wealth. Paul Clitheroe. It is not only that you must attend a university.

There is a difference between educated and go to school. When someone wants to educate about the opportunities and places to do it, like this blog, for example. Today more than ever, knowledge is available to anyone and completely free.

3. From time to time the market does something so stupid that leaves you breathless. Jim Cramer. There are no sure bets in the investment world, there is a risk in everything. Prepare for the ups and downs.

4. The individual investor should act consistently as an investor and not as a speculator. Ben Graham. You are an investor, not someone who can predict the future base their decisions on facts and analysis rather than speculative risk forecast.

5. This is not how much money you earn, but the amount of money working for you and for how long this does. Robert Kiyosaki

If you are a millionaire at 30, but at 40 everything has gone to hell, you have not done anything. Grow and protect their investments carefully may be the basis of wealth for many generations to come of his family.

6. Know what you own and because he possesses. Peter Lynch. Do your homework before making a decision. Once you’ve made a decision, make sure you evaluate your portfolio in a timely manner.

7. The financial peace of mind is not the acquisition of things. It’s about learning to live with less than you earn, so if you do that, you can give money and have money to invest. Not win until you do that. Dave Ramsey. Cute right?

When it comes to the world of investing three words come to your mind of the uninitiated like me in these matters, the stock market, overwhelming, intimidating and frightening. The reasons for this kind of thinking is due to the fact that if we do not know well what is the investment in which we are getting, you can lose your shirt. Even if the trial and error is key for many investments, someone before you lost the shirt and those mistakes can serve you-people do not want your mistakes will lead to bankruptcy or you will lose the savings you worked so hard to put together.

For many of us the doubts and questions about the world of investment, are endless, so this kind of dating can help you visualize the big picture.

Not guarantee anything, but something we can serve as the authors already suffered and have suffered the vicissitudes of the financial market, therefore we see that such.

1. Investment in knowledge pays the best interest. Benjamin Franklin. When it comes to investing, nothing pays as much as education. Make the necessary research and study and analyze before making any decision.
2. The bearish streaks in the investment world does not end in 4 years, ending in 10 or 15 years or more. Jim Rogers.

May 10 or 15 years of bearish streaks are not common, but during that downtime, lost their shyness and go against the trend. Sure you could very well make a fortune or lose your shirt.

3. I’ll tell you how to become rich: Close the doors. Be fearful when others are greedy, Be greedy when others are fearful. Warren Buffett.

Be prepared to invest in a declining market and “out” on the rise.

4. Investments, what is comfortable is rarely profitable. Robert Arnott. Sometimes, very often, we must leave our comfort zone, to make significant gains.

Know the limits of your comfort zone and try to get out of it in small steps. As much as you need to know the market, you need to know oneself.

The real estate investment is usually one of the most profitable out there, but it all depends on the type of investments made and properties acquired.

Whether investments in real estate are usually very good but we also have several to give us very good capital, also tend to be long-term investments.

The good thing about this type of investment is that mortgage and they can cover their own investment, but we must also look to leave us some profits.

For investments in real estate is not necessary to be a financial expert or anything like that, we need to know to choose the most suitable properties for us to leave the best possible income.

The good thing about real estate investments is that they never lose value, if not to the contrary, this is always going to increase. Read the rest of this entry »

Mutual fund investments are those made by several persons, which provide money to invest in either stocks, bonds, deposits, etc. All these people are gathered for a fund administration company.

Such companies, working for Commissions, which leave the diversified investment management, but all risk is borne by investors.

Investments in mutual funds, usually a type of investment easier, and you do not need to be very skilled in financial literacy, as well as their investment is very high.

The profitability of investments in mutual funds is very good, not as high as an investment in the stock market, but you can leave good profits, in turn is often a long term investment.

Irrigation is running on this type of investment is medium or low, because the management company is represented by experts in all matters of investment, they make investments in a diversified way. Read the rest of this entry »

Show the profitability of the company in relation to sales, property and investment, also indicating the operational efficiency of business management.

In turn, the profitability ratios are divided into:
* Ratio of return on investment.
* Ratio of return on equity.
* Ratio of gross profit on sales.
* Ratio of net return on sales.
* Rate of return per share.
* Ratio of dividends per share.

Ratio of return on investment (ROA)
The ratio is more representative of the global march of the company, as it allows assessing their ability to profit from the use of total assets.
(Net Income / Assets) x 100

Ratio of return on equity (ROE)
This ratio measures the ability to generate net income to shareholders’ investment and which has caused the company (equity).
(Net income / equity) x 100

Ratio of gross profit on sales
Also called gross margin, or profit margin shows the company for their sales.
(Gross Profit / Net Sales) x 100

Read the rest of this entry »

The Consumer Federation of America has a list of ways to save money on your everyday life. Here are a few of the tips on how to do it:

-If you want insurance protection only, and not a savings and investment product, buy a policy term life insurance (Term Life Insurance).

-You can save more than $ 100 per year in fees by selecting a free checking account or one that requires no minimum balance. Ask for a complete list of fees charged in these accounts, including charges for the use of automated teller machine (ATM) and debit card.

-To yield the highest return on savings (annual percentage yield) with little or no risk, consider certificates of deposit (CD) or savings bonds USA (Series I or EE).

-Be sure to consider the price difference between financing with a low interest rate and a lower selling price. Remember that receive funding from zero or low rate of grantee may keep you from getting a refund or rebate.

-Once you have selected a specific brand and model [Electronics], check the Internet or yellow pages to see which stores have them. Call at least four of these stores to compare prices and ask if that’s the lowest price they can offer. This comparison shopping can save you $ 100 or more.

-You will spend less on food if you shop with a list, by taking advantage of sales, and purchase basic ingredients, rather than pre-packaged ingredients or items ready to eat.

From a psychological perspective the terms that traders use every day in this market as a bull, bear or assumptions are indeed top of trends. A bear market is indicative of a bear market, bull market indicates a growing market and a top so when the market has reached its highest peak. Whichever method you choose to identify trends, one must always bear in mind that these should not be underestimated, but in the same way should not be overstated.

Currently the market offers a huge number of alternatives to choose from, and by identifying trends trader offers a unique opportunity to contextualize and rationalize their operational implementation. Still, any decision on the market involves risk and you can not rely on the repetition of certain trends like molds or templates, which show the same behavior over and over again. We must also assess the fluctuations and sudden movements that occur during some days in an unpredictable manner.

IG Markets, one of the providers of CFDs (Contracts for Difference) in Spain, offers a wide range of resources that will be helpful in your trading, such as daily reviews of experienced analysts in the market. In addition to pattern recognition tool IG Markets graphics, may be always on alert for potential opportunities presented to it in their operations.

Note: The above comments do not constitute investment advice and IG Markets therefore accepts no responsibility for any use that may be made of them. CFDs are a leveraged product that carries a high level of risk and may result in losses that exceed your initial deposit. Make sure you understand fully the risk involved and make a constant monitoring of your investment.