Companies often borrow money by issuing bonds when they need funds for a new project or for expanding their business. Any purchaser of a corporate bond is merely lending to the company for interest, which is paid at the end of the specified period. It is usually a low risk investment as compared to stocks, though the failure of the company may lead to non-payment. [Read more…]
Rethinking Investment of Retirement Savings in Your 401(k) Plan
If you have been investing the money for your retirement savings in a 401(k) plan offered by your employer, then it is time to rethink your strategy. Although, 401(k) is considered almost sacred as far as retirement savings go, its value has been decreasing lately. [Read more…]
Quick Guide to Traditional IRA Investment
IRA or Individual Retirement Account is an investment option through which people can save funds for their post-retirement life. There are many types of IRAs including Traditional IRAs and Roth IRAs. Both of these IRAs can be created by individuals, who can invest up to a fixed amount every year in these accounts. Two other IRAs – SEPs and SIMPLEs are established by employers. [Read more…]
Low Risk High Return Investments
Whenever interest rates drop, people look out for investments with higher returns and low risks. But it is important to remember that all options that will offer higher returns will also involve relatively greater risk.
Take for example, reverse convertible notes or revertible notes, which are financial instruments with returns tied to a stock value. These instruments offer a higher rate of return, but if the stock value drops, you can suffer significant losses. In some cases, even the principal amount might not be recoverable. Yet another example is investing in a bond fund where you run the risk of losing your investment when the interest rates increase. The risk will increase with the term of the bond. [Read more…]
How Inflation Affects Your Savings
Inflation is one of the most important factors that you should take into account when you are planning your finances. Without proper measures, inflation can make a huge dent on your savings. That is why it is critical to understand how inflation works and what you can do to protect your finances. [Read more…]
Balance Your Portfolio with Treasury Inflation Protected Securities
Usually most investment portfolios have a large percentage of stocks. In times of a financial boom, this worked great but if you planned for retirement in 2009, these same stocks would have led to huge declines in the value of your portfolio.
On the other hand, if you had put all your money in bonds or CDs (certificates of deposit), then you would have to live with dismal returns, especially when you consider the impact that 3% long term inflation will have on your savings. [Read more…]
Get 200.00 Dollars Cash for Opening a New Bank Account
Many leading banks are trying to lure new customers to open checking accounts by offering them upfront cash incentives. The incentives vary from bank to bank and from state to state, but if you are lucky, you can get up to $200 in cash if you accept the bank’s offer. [Read more…]
Investment Lessons from the Financial Crisis
The financial crisis and the painful recession are behind us now. Although the unemployment numbers are still very high, there are many reasons to believe that things will soon start improving on that front too. These have been major events, and it is important to learn from them as an investor.
If you were invested in stocks just before the collapse of the stock market, you would understandably be skeptical right now. Many investors lost their faith in the market and have refrained from investing since then. But you have to put your money in some assets, and as the rebound in the stock market since March 2009 has showed, if you time your investment correctly there are still some great opportunities to earn profits. Here are some lessons that you should take away from the crisis to become a better investor.
Don’t Panic
When the stock market was at its lowest levels in 2009, almost everyone had a pessimistic outlook. More bad news was in store, we were told by the so-called financial experts. But investors who were able to shut out the noise sensed an opportunity and their investments have grown by more than 60% since then. The important lesson is to not go with the hype. Analyze the satiation with a calm mind and try to find opportunities.
Think Long Term
Anyone who tells you that you can make assured quick money in the market either has no idea of what he is talking about or is simply fooling you. In the short term, the market is nothing more than a casino. You’ll win some, you’ll lose some, and then you’ll realize that it was a total waste of time. Keep your investment horizon long term. Treat your investments in good stocks as an asset and not as a bet. You should target modest but assured returns instead of going for risky investments.
Diversify
One of the oldest tenets of investing is still one of the most important. When you invest, you should never concentrate all your risk in a single stock. By creating a diversified portfolio, which also has bonds in it, you spread your risk. So if the price of one of your stocks collapses, you would still be able to make up for that loss with profits from other stocks.
Keep these tips in mind and be smart about your investments. Don’t make investment decisions because they feel right, you need to think them through.
