December 22nd, 2009 at 12:46am
Under Investing
The markets don’t always behave the way we’d like them to: Geopolitical turmoil, natural disasters, interest rates and world events can have a profound effect on market movements. If recent market volatility has you concerned about the economy, you are not alone; this is a confusing time for many investors. Some have decided to stay the course, while others are sitting on the sidelines waiting for the market to rebound. However, since no one can predict how the markets will perform, it’s important to develop an investment strategy that can help you stay on the right track to meeting your long-term financial goals. Here are some strategies that you can implement today, that may help to manage risk during these uncertain times.Work with a Financial Advisor. There are a lot of do-it-yourself investment resources available to investors today. However, none of those resources can replace the experienced, personal service a Financial Advisor provides. A Financial Advisor can offer an understanding of your complete financial picture, not just your investments. Additionally, in periods of market volatility when you need the most support, a Financial Advisor can provide:• Access to important decision-making research and information;• Ongoing monitoring of your investment portfolio, while anticipating your changing needs; and• A comprehensive market-volatility plan.Have a plan. Developing a financial plan is one of the best ways to meet your long-term goals. Your plan should also include an action plan to address market volatility, which should be developed well in advance of a turbulent market. Having a market-volatility plan will help you to set realistic goals and appropriately manage your return expectations.Invest regularly. It may not seem intuitive, but investing regularly—even during market downturns—can help to reduce your overall costs. Dollar cost averaging is one of the best ways to invest regularly, since you’re investing a fixed amount on a fixed schedule, regardless of how the markets perform. Investing regularly can also have intrinsic benefits: It encourages discipline and may also ease the anxiety of daily market fluctuations.Diversify. If you’ve ever heard the saying, “Don’t put all your eggs in one basket,” then you already have a basic understanding of diversification. Diversifying your portfolio can reduce risk and volatility if the assets have little or no correlation to each other.Investing in mutual funds is one way to achieve portfolio diversification, since mutual funds are typically a diversified investment. There are also several other ways to diversify and potentially reduce portfolio volatility:• Within an asset category, such as purchasing different types of mutual funds;• Among asset categories, such as purchasing stocks and bonds; and• Outside of the United States, since some markets move opposite to the US stock market.Put volatility to work for you. Do you think of the glass as half empty or half full? Your perspective can affect the investment decisions you make during market downturns. Investors who view market volatility negatively can make irrational decisions. A down market can be an opportunity for you to build your portfolio and take advantage of lower unit costs.Stay invested. You are probably anxious during times when the value of your investments has decreased. As a result, you may be tempted to move out of the market, sit on the sidelines and wait for the market to rebound. However, since no one knows how the markets will move, how do you know you’re leaving at the right time? Also, how will you know when it is the right time to get off the sidelines and start investing again?If you have worked with a Financial Advisor, your investment strategy was developed to help you meet your long-term goals. Timing the market could potentially jeopardize your financial plan—and your future goals.Be patient. There will always be uncertainty in the markets; market volatility is a natural part of the investment cycle. Although it may take some time, markets do rebound.In the meantime, call your Financial Advisor to help you develop an action plan for market volatility and continue to focus on your long-term investment goals rather than short-term market moves.Graeme H. Patey is a Financial Advisor located in Cleveland, Ohio and may be reached at 216-523-3015 or http://fa.smithbarney.com/graemepatey. Asset allocation and diversification strategies do not guarantee a profit or protect against loss.A periodic investment plan such as dollar cost averaging does not assure a profit or protect against a loss.International stocks are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.Mutual fund investments are subject to market risk, including the possible loss of principal. They are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges and expenses, and other information regarding the mutual fund and variable annuity contract and its underlying investments, which should be carefully considered before investing. Prospectuses are available through your Financial Advisor or at www.smithbarney.com. Read the prospectus carefully before you invest or send money.Smith Barney does not provide tax or legal advice, and it is important to consult with a tax or legal advisor before investing.© 2008 Citigroup Global Markets Inc. Member SIPC. Securities are offered through Citigroup Global Markets Inc. Smith Barney is a division and service mark of Citigroup Global Markets Inc. and its affiliates and is used and registered throughout the world. Citi and Citi with Arc Design are trademarks and service marks of Citigroup Inc. and its affiliates, and are used and registered throughout the world. Working WealthSM is a service mark of Citigroup Global Markets Inc. Citigroup Global Markets Inc. and Citibank are affiliated companies under the common control of Citigroup Inc.INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT GUARANTEED • MAY LOSE VALUE
By admin
December 1st, 2009 at 11:46am
Under Investing
I want to know about stocks, shares and how i need to start investing in stock/share market?
By admin
November 21st, 2009 at 07:43pm
Under Investing
Recently, there was an article on CNNMoney that spoke about the “secrets” of the elite rich in the United States. In turn, several articles were written about this article, including one that stated that the richest of Americans “built their wealth with diversification, wealth preservation and strategic growth.” That is a ridiculous statement in itself because two of those strategies, diversification and preservation don’t help build wealth. Perhaps the richest of Americans use these two strategies to maintain an even keel AFTER they have accumulated great wealth, but certainly they didn’t use them during the accumulation phase. According to this article, a survey of Northern Trust uncovered that the “richest Americans do not heavily rely on high-risk investment vehicles like hedge funds to make money, but are moderate risk takers who put more than half of their asset allocation into U.S. stocks and cash.”
Again, just as former hedge fund manager and multi-millionaire Jim Cramer said that he used certain financial journalists, including ones employed by the Wall Street Journal, as pawns to spread misinformation far and wide to benefit himself, again this is an example of investment institutions using the media as pawns to spread their myths to keep the masses of retail investors ignorant. The CNNMoney article made it appear that the richest of Americans built their wealth by being conservative and slowly growing their money over time. That’s an oxymoron right there. To state that the rich became rich by slowly growing their money over time. Well, if they are slowly growing their money and becoming even richer, then this implies that they were rich to begin with. So how did they accumulate wealth? Surely not by “slowly growing” their money.Sure, some of the “richest Americans do not heavily rely on high-risk investments” because they ARE ALREADY EXTREMELY RICH. The majority of ultra-rich do NOT build their fortunes by speculating on high-risk investments as is commonly believed. Often they build fortunes utilizing volatile assets and investments but that does NOT mean they were engaging in risky behavior. Many times, investing in a hedge fund can be much riskier than investing in some of the assets that your investment firm will tell you is “risky”. But investment firms will gladly place a portion of your money in hedge funds because the fees they earn from hedge funds are so high even as they advise you not to put your money in a much less risky investment with much greater earning potential. And THIS IS THE SECRET that investment firms never tell you.Volatile assets that often can be used to build great wealth are NOT RISKY if they are purchased at entry points that are extremely favorable and provide a low-risk point of entry. 99% of investors don’t understand what high-risk investments truly are because they have been misinformed by their advisors and their firms for the past half of a century. Purchasing volatile assets at low risk-high reward entry points greatly mitigates and neutralizes the great majority of risk of volatile assets. If you don’t understand this concept then you need to.
Many millionaires that are wealthy but that could be extremely wealthy fail to build enormous wealth because investment and financial institutions mislead them about certain investment opportunities and describe them as complex and risky and are able to convince their clients of this belief because they never properly explain risk-reward scenarios to their clients. However, those investors that are extremely wealthy are the rare breed that understand this concept. If investors had a choice between allocating $1,000,000 in a historically volatile Investment A that has a 78% chance of returning a 250% gain versus an Investment B that has a 95% chance of earning 9%, most investors would choose Investment A.
However, because Investment A may exhibit 50% more volatility than Investment B, the great majority of advisors would steer their client away from the former investment into the latter one. In fact, this is exactly what even “prestigious” firms that cater to ultra high net-worth clients do because they allow misinformed, uneducated investors dictate the rules of engagement to them, and they would much rather appease such powerful, important people with slow,minimal gains rather than empower and enlighten them and boost their returns like never before. They would choose to steer them away because they present the investment opportunities incorrectly, merely telling their client that while they could earn 350% from Investment A there was also a very realistic probability that they could lose $300,000, and that shooting for the slow but steady $90,000 a year is much better for them.
If you are thinking to yourself, “That makes absolutely no sense?” Why would firms not earn 20% a year for their clients if they could instead of 8% a year? The answer is because the overwhelming majority of investment firms, no matter how prestigious their brand, are merely highly glorified sales machines. They fail to convince clients to invest in phenomenal investment opportunities that sometimes arise like Investment A because in order for Investment A to be a moderate risk, very high reward investment, it must be entered at a low risk entry point so that the probability of being down $300,000 at any give time would be reduced from perhaps 50% to 20%.
And that even if their timing is not optimal, then a firm must educate the client that as long as they don’t panic when they are down, the odds are still extremely high that they will earn a 250% or better gain. However, the greatest factor that determines why firms will not seek this strategy is time. Engaging in much better strategies such as these for their clients would take massive amounts of time in client education and enough time in research that the amount of assets gathered would take a serious hit.
So because it is not in a firm’s interest to engage in activities that maximize portfolio returns (unless it is their own institutional portfolio), instead, we have Chief Investment Officers at top investment firms making statements like, “”Generally they [the richest of Americans] want to see prudently managed growth without a lot of surprises, which is why we emphasize diversification.” Again, this is a sales & marketing campaign statement, not an aboveboard statement about how to make money for clients.If clients are uncomfortable with strategies that would actually built great wealth for them instead of producing mediocre or subpar returns, their discomfort only originates from the fact that the largest investment firms have been deceiving their clients, just as Jim Cramer had deceived the thundering sheep herd for years, about the realities of building wealth. This discomfort originates solely from the fact that he or she has been kept in the dark for so long. Thus, we have a misinformation-driven cauldron of investors making bad investment decisions that exists today. In 2007, you’ll still find Chief Investment Officers of very well known firms making ridiculous statement that investors need to invest at least 50% of their stock portfolio in U.S. stocks if they wish to grow their portfolios exponentially.
How are they going to grow their portfolios exponentially with more than half of their stocks in a stock market (the U.S.) that has NEVER been the best performing market in the past 25 years (even among developed stock markets)? How will they grow their portfolios exponentially by buying stocks in market that trades in what is quite possibly the worst currency on earth among developed markets (the U.S. dollar)? Yes I know that when the U.S. dollar shows a brief spike in strength as is likely to happen soon (I’m writing this article in April, 2007), that many people will question what I am saying, but this is only again because they are victims to the mass deception mind-games of the investment industry. I suppose if planning to earn better than subpar returns in your stock portfolio is engaging in risky behavior as Chief Investment Officers of various firms claim, then yes, I whole-heartedly endorse engaging in risky behavior.
And because so many people, yes, even those considered quite wealthy, fall victim to the preaching of investment industry demagogues, there is a second mistake that many rich investors will soon make.
Another survey of wealthy U.S. investors uncovered that a large percentage of investors with investment assets of over a million do not employ any type of investment advisor but plan to do so soon giving the increasingly gloomy nature of the U.S. stock markets. To that, this is what I have to say. Making money in difficult markets is ten times more difficult than making money in bull markets. If investors believe that it will be increasingly more difficult to make money in U.S. stock markets, but yet top investment firms in the U.S. continue to preach that more than half of your portfolio should be in U.S. stocks (mostly to cover their respective firm’s inadequate coverage of emerging markets), how is the hiring one of these men possibly going to improve these investors’ future performance outlook?But there is an EXTREMELY important distinction to be made here. What I’ve written above applies to the behavior and mindset of some of the richest people in America, but not THE very richest people in America. The very richest people in America, those you might categorize as the world’s ultra-rich, possess a very different mindset and behavior set than those that are just rich. The ultra-rich have positioned their portfolios extremely differently from how the rich people discussed above have positioned their portfolios. The reason why articles regarding their behavior and investment decisions are virtually non-existent is because they don’t grant interviews and they don’t want people to know what they are doing. But I’ve investigated what they are doing, and trust me, it is nothing remotely similar to the behavior of wealthy investors described by Northern Trust and other investment firms.
If you would like to find out why the ultra-rich always manage their own money or able to find the 1 in a million consultant truly capable of providing them the returns they desire, consult our resource of “101 Reasons Why Managing Your Own Money is the Only Way to Build Wealth.” Even if the ultra-wealthy have someone managing their money for them, the only way they were capable of finding this 1 in a million financial consultant was due to the fact that if they had to, they could manage their own money successfully as well. Only be first fully understanding the most successful investment strategies themselves could they identify an advisor capable of employing such strategies. However, a great majority of ultra-wealthy continue to handle and make their own investment decisions.
By admin
October 22nd, 2009 at 04:56am
Under Real Estate
Buying home, condo or any other real estate in a market that is protected from a bursting bubble is every investor’s dream. Knowing where to look for these bubble-proof markets and how to identify them is crucial.
There are some important factors that investors should consider when searching for stable investments such as single-family homes, condos or any other type of real estate. Some of these factors include a fast growing population (which positively impacts the demand for housing), a solid and diverse economy (which impacts employment rates and subsequent demand for housing), rising incomes (which impacts buyers’ ability to purchase real estate), a developing infrastructure (which contributes to the appeal of a city or community), and restrictions on future real estate development (which limits future supply of real estate). Investing in real estate within communities that meet these criteria may prove to be more profitable than communities that are missing one or more of these factors.
A recent report by Business 2.0 Magazine identified U.S. cities that have consistently demonstrated price appreciation in the real estate market. The October 2006 issue of the Magazine identified the top 5 real estate markets that demonstrated an upward price trend over a long period time. The top-ranking cities were:
1. San Francisco, California
2. Los Angeles, California
3. Seattle, Washington
4. Boston, Massachusetts
5. New York City, New York
San Francisco topped the list with an average annual home price appreciation of 4.2% from 1949 to 2006. In contrast, the national average was 2.3%. Strong restrictions on real estate development and a limited geography helped push San Francisco to the top slot.
Los Angeles ranked second in the report. The average annual home price appreciation in Los Angeles was 3.7% from 1949 to 2006. Reductions in available land and increasing restrictions on further development helped pushed Los Angeles to the number 2 slot.
Home prices in Seattle, which was third on the list, demonstrated an average appreciation rate of 3.2% from 1949 to 2006. While Seattle made the top 5 list, recent easing of building restrictions may cause Seattle to fall out of the top 5 over the next few years.
Boston was fourth in the rankings. The city has seen annual home prices appreciate by 3% over the period from 1949 to 2006. A strong increase in per capita income contributed to Boston’s high ranking.
New York City follows close behind with an average annual home price appreciation of 3% from 1949 to 2006. A limited geography, large population, and finite number of properties contributed to New York’s high ranking.
While there is no guarantee that any of the real estate markets listed previously are truly “bubble proof,” the factors described above may help investors find the profitable markets and avoid “bubble” markets. Since the real estate market is constantly changing, be sure to seek out the services of a skillful real estate agent to help you navigate your next real estate purchase.
By admin
October 13th, 2009 at 10:52am
Under Real Estate
Second home sales have been increasing over the last few years with more people becoming second home owners. In 2005 alone, 40 percent of the homes sold were second homes. Demographics, all time low mortgage rates, and healthy rise in home prices have contributed to this development in the second home market. Besides these, a major factor that has helped augment the buying and selling of second homes is the real estate professional.
The National Association of Realtors conducted research on the profile of second-home owners in 2006. According to the NAR report entitled ’2006 Profile of Second-Home Owners’, a majority of second home sales transactions are conducted using the services of real estate agents.
The statistics are remarkable; 64 % of vacation home buyers purchased their home using the services of a real estate agent by the end of 2005 – a marked increase from less than 50 % of vacation-home buyers in 2003. Also, 65 % of investment-home buyers purchased their home with the help of a real estate agent – an increase from 53 % of pre-2003. In comparison, only 14 % of vacation-home buyers and 7 % of investment-home buyers purchased directly from builders from 2003 to 2005.
The growing role of the real estate professional is evident from the following figures:
1. Of vacation home sales made, 71 % of them were second homes and 74 % of the sales were made using the services of a real estate agent.
2. Of the investment properties sold, 85 % of them were previously owned and 62 % of the sales were made using the services of a real estate agent.
The use of real estate agents in second home sales transactions varied according to the home’ location.
1. Buyers used a real estate agent more frequently while purchasing a vacation home located in a suburb/subdivision (56 %) or a rural area (57 %) than for homes in other locations.
2. About 66 % of buyers who purchased an investment property in an urban/central city area or in a suburb/subdivision, used the services of a real estate agent more frequently than those who purchased a home in other locations.
Real estate professionals continue to be the first source of information to second-home buyers (38 % of vacation-home buyers and 34 % of investment-home buyers). The real estate professional also plays a major role when second-home owners plan to buy additional properties. If you are thinking of buying a second home or vacation home, seek out the services of a real estate agent to guide you through your next home purchase.
1. The percentage of second home owners who are more likely to use a real estate agent in their next home purchase is quite high. Among vacation-home owners it is 79 % and investment-home owners 73 %.
2. Among second home owners, 65 % of vacation-home owners and 64% of investment-property owners are more likely to use a real estate agent in their next home sales.
Given these statistics, it is no wonder that the real estate agent plays a pivotal role in helping people buy and sell second homes. So whether you are a second-home buyer or seller, enlist the services of an agent for a smooth, hassle free real estate transaction.
By admin
September 23rd, 2009 at 02:52pm
Under Investing
I am just beginning to learn about investing and would like to invest internationally… just not sure where a beginner like myself should start or how to do it for that matter… or what to invest in (stocks, bonds, mutual funds etc). Any advice?
By admin
September 6th, 2009 at 03:02pm
Under Small Business
Im looking at setting up a business so im looking for more oppinions/help on the issue for small business and potential small business people such as myself
thanks for your time and if you have any links to any things which can help me on the issue is most welcome e.g. how to market the business, suppliers for small business etc
By admin