Are Bonds Smart Investments

Why Bonds are Best Investments for Baby Boomers

With several hundred baby boomers nearing retirement in the coming years, there is much fear about how much strain the social security system can bear. Many analysts predict that when all of these retirees come to depend on social security to meet their post retirement living expenses, the entire system may collapse.

It cannot be said with certainty that social security is doomed but it is clear that in near future, Americans may get a much smaller percentage as social security than at present. What is certain is that retirees can no longer depend entirely on Uncle Sam for their post retirement living expenses.

While it is critical for every citizen to start saving for retirement it is now more important than ever for near retirees to ensure that they invest in safe avenues. In this way they can be assured of having a financially secure post retirement life.

Bonds as investment option

Bonds are the best investment options for people on the verge of retirement. These instruments are safe because they offer assured returns at the end of a fixed period. A bond, as opposed to equity, is a loan that you make to the issuer.
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Are Your Making Smart Investment Decisions

Are you a Wise Investor?

Investing for the future is a task that is best started as early in your career as possible. Although a novice investor cannot aim at duplicating the success of a market savvy investment guru, it is not an impossible task for such investors to make money in the markets. What it requires is some basic knowledge about how investing works, options you can invest in and safeguards you should establish to keep your investments safe. Here a few points to keep in mind if you are a new investor.

Avoid ‘get rich quick’ tips

No one can predict the market with perfect accuracy. Never base your investments on ‘sure winners’ recommended by brokers, friends or acquaintances. The savvy investors who have made a killing in the markets have based their investments on research and personal judgment. Invest only as much cash as you are willing to write off in such ‘sure fire’ high risk channels.
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Bonds As Part of Your Investment Strategy

When you buy a bond from a company, you are essentially loaning the money to the company to fund their projects. This money is loaned by you to the company for a specific period of time. After this period, the company returns your money along with an interest paid on it.

The total returns on the bonds may not always be fixed, as is the case with variable interest rate bonds. So be cautious about the amount of money you invest in bonds and check on the reputation of the company with whom you plan to invest.

Difference between a bond and a bond mutual fund
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What You Should Know About Investing in Stocks

When you invest in the stocks of a company, you gain ownership of a part of the company. So it is important to invest in a profitable firm whose shares will grow and give you good returns in time. As different industries have different growth rates and profitability, stocks in companies from different industries will bring varied degrees of risk and returns for you.

This is because the value of a company depends on how relevant its product or service is in the market at a given point in time. For this reason, it becomes crucial to analyze which industries and specific companies are profitable and whether investing in them could be beneficial in the long run. Here are two useful tips on investing in the stock market.
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Tips On How to Invest Your Money With The Economy In Mind

If you are new to the world of stocks, bonds and other financial instruments, you should know that investment is both an art and science. Only after you understand how the financial market works should you start making your investment plans. Here are a few things you should think about if you are keen to invest your money.

Understand Your Risk Appetite

You must not only be open to the risk of losing money but also decide exactly how much you can afford to lose. You should realize that every investment carries some inherent risk of loss and that some investments carry higher risk than others.
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It’s Never Too Late to Start Investing

Earning a steady income gives you the financial support you need for as long as you work. But by the time you reach retirement age, you should have enough money saved – through 401ks, annuities, IRA funds, or any other fund – to live the rest of your life comfortably.

The earlier you start saving, the more you will end up with. If you’re already close to retirement and have not put aside much, you may face some difficulties when you stop working, but it is not too late to act now. There are many options that are available that will help you earn good returns over the next few years. Start assessing the possibilities immediately and you may still be able to manage a comfortable post retirement life. [Read more…]

Don’t Fixate On Income When Investing

Everyone needs to save money for a rainy day. To achieve this, you can look at different ways to increase your income and boost your savings. One of the most popular ways to get additional income is investing.

Investing requires a certain degree of calculation and risk assessment. You need to understand the risks involved and employ the safest means to get a good return. With most people considering long term locking-in of capital too risky, they are increasingly investing in stocks and bonds that give a continuous stream of income. However, if you fixate on a portfolio that is not diversified enough in terms of cash flows that it generates, you may lose money in the long term. [Read more…]

Investing in Tough Industries is Not Always a Bad Idea

There are many industries that are considered a bad choice for investors as they generally do not give good returns. Most investors simply stay away from these industries, which include airlines, real estate and other such industries that are capital intensive and suffer a lot of uncertainty. [Read more…]

Smart Investing Advice for Young Families

With children comes a great responsibility, and you should plan for your and their future carefully, so that your family does not have to face financial problems later. [Read more…]

Homebuilders Stocks Outperform but Analysts Say Sector Not Out of Trouble Yet

Homebuilders stocks have gone up again and the SPDR S&P Homebuilders ETF now stands at a year-on-year increase of 30%. The rise came on news that the housing market is stabilizing and sales and prices of new homes are improving. [Read more…]

Why ETFs are Better Investments Over Mutual Funds for the Novice Investor

ETFs are a good option for investors who want to diversify their portfolio but don’t really know how and what to invest in. Although mutual funds are a good diversification choice, ETFs bring some unique advantages to the table, which make them doubly attractive. [Read more…]

How to Prioritize and Manage Your Investment Goals

Setting investment goals is very important to put your savings to productive use and constantly check your financial health. You should prioritize these goals and stay committed to them.

You can share your investment goals with your spouse or a family member who can support you and help you stay focused. You should also learn how to manage conflicting goals, so that they do not have an adverse impact on your finances. [Read more…]

Prioritizing Your Financial Goals for Wealth Building

I consider prioritizing financial goals and money allocation as the most important part of financial planning. People are often faced with questions of whether to repay debt, save or invest money. If you have to choose between these goals, then your current financial situation should be your best guide [Read more…]

Municipal Bonds An Attractive Opportunity for Wealthy Investors

Municipal bonds are debt based securities issued by states and cities to finance their day to day operations and to fund entities like colleges, NGOs, nonprofit hospitals etc. The main advantage of these interest paying securities is their tax exemption status. This relieves the buyers from paying taxes on the interest income and also allows the government to borrow at competitive rates so that they can fund their large projects. [Read more…]

Low Cost Investing with Exchange Traded Funds

Exchange Traded Funds (ETFs) are either actively managed or indexed investment funds comprising of a stocks basket of a number of different companies traded on the markets. ETFs are traded on the stock exchanges like shares of the companies. [Read more…]

Tips on How to Make Money from IPOs

Initial public offerings, or IPOs, are considered riskier than the rest of the stock market because there is lot of uncertainty attached to them. It is hard to predict the right price of an IPO stock, but understanding the market fundamentals will help you make money out of these opportunities. And if you get it right, investing in IPOs can be extremely profitable. [Read more…]

How to Build Your Retirement Savings

When you are young, retirement seems like a distant prospect, which you do not need to worry about. However, before you know, time will fly and you will be close to your retirement age. Instead of being sorry later, it is better you start investing when you still have ample time to build your retirement savings without unnecessary pressure. If you start early, you get more time to earn higher returns on your investment. [Read more…]

The Benefits of Investing Early in Your Life

You might have just started enjoying the freedom of getting a paycheck and would be tempted to spend it all on shopping, traveling and having fun. Studies show that many young Americans are careless with their finances. They do not save money, forget to pay their bills on time and do not bother about starting retirement funds. But remember that lack of investments and spending more than your income can be very harmful in the long run. [Read more…]

New to Investing Do Trial Runs Using a Mock Portfolio

Various sites such as Yahoo! Finance and AOL allow users to build a mock portfolio online. In a mock portfolio, the user makes imaginary investments in various stocks. These site tools map out the losses and gains on the stock investment of the user, which can later be used for analysis of the investment strategy by the user. It gives an idea of how the investment would have done in the real stock market. [Read more…]

It May be Time to Change Your Investment Strategy

The old wisdom about investing your money included avoiding touts, looking for low cost investments, being consistent, and keeping a diversified portfolio. However, there are certain changes that you should bring in your investment strategy to adapt to the changes in the economic situation. [Read more…]

How to Protect Yourself from Investment and Ponzi Scams

Investment frauds are being perpetrated at a wider scale these days. One of the common frauds is the Ponzi scheme in which the investor is paid back from his own money or from the money of new investors, but the schemes soon collapses, wiping out the wealth of later investors. You have to be cautious while investing so that you do not fall into any of these traps. The best way to protect your wealth is to find a trustworthy financial adviser. [Read more…]

How to Invest Your Money Overseas

Is there anything like the right time to invest? How much should your investments be and where should you invest? These and many other such questions are often faced by a new investor. Investing can be risky business when you are putting your hard earned money into volatile assets, and it is important to be careful about these decisions. [Read more…]

Common Investing Mistakes to Avoid

Making smart investment decisions is neither pure science nor pure sentiment. It is mostly about keeping things simple and manageable. But it seems that it is easier than done for most investors who end up making mistakes that does just the opposite. The end result is disappointment, poor returns and sometimes even worse. Some of the common investing mistakes that lead to poor results are discussed here. [Read more…]

10 Tips For Investing In Mutual Funds

Mutual funds have been a very popular investment used to save money and create wealth for quite some time. The problem is that a lot of people don’t even understand what exactly they are, or how they can benefit investors. Thus, a few things need to be clarified so that everyone can understand mutual funds a bit more. So get comfortable and read through these 10 essential pieces of information when it comes to mutual funds. [Read more…]