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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Allocating Funds Between Stocks and Bonds

We have just gone through a severe recession during which many people lost a large chunk of their investments. Investors are now taking all kinds of precautions and one of the things that you may be considering is whether they should completely give up on stocks. And even if you continue to invest in stocks, how do you know when to get out of the market? [Read more…]

Common Myths about Income Saving and Investing

A recent survey by a top American financial magazine has revealed that a large majority of Americans could be financially illiterate. A dismal 18% of the sample audience was able to answer three basic questions about money correctly. [Read more…]

How to Make Smart and Profitable Investments

Everyone has a dream of making huge profits with their investment portfolio. While this may not be a realistic expectation all the time, it is definitely possible to get your portfolio to give you good returns in line with your requirements or better. However, this can be achieved only if you understand the basics of investing. [Read more…]

How to Protect Your Investment from Inflation and Put More Money in Your Pocket

When you are investing with a long term horizon – say for retirement, for your kids’ college fund or for medical expenses, you should always take the effect of inflation into account. Because of inflation, you end up paying more than you used to for the same things. And as it is an inescapable aspect of the economy, your investment strategy should be adjusted to deal with it. [Read more…]

Be Proactive in Managing Your 401(k) Investments

401(k) is a retirement plan that can receive contributions from both the employer and the employee. Your contribution is taken from the salary before calculating your taxable income, which is one of the most significant benefits of the plan. Usually, companies match the contribution made by the employee. This is one of the major differences between IRA and 401(k) plans since IRA plans do not usually get employer contributions. [Read more…]

Time Tested Risk Management with Diversification

Diversification is a time-tested strategy to spread your risk and optimize your returns. It is a sound principle to follow whether you are investing for your retirement, your children’s education, or are just seeking some quick short-term gains. [Read more…]

Smart Short Term and Long Term Investing Tips

Post recession, as vulnerable financial institutions have grabbed federal aid to save their businesses from bankruptcy, most of the investment options no longer look safe. Interest rates have fallen, investment bankers and stock traders are being held for fraudulent practices; the list is unfortunately long. In the present financial situation, you may be wondering how to find safe and reliable options to invest your hard earned money. [Read more…]

How to Ensure a Comfortable Post-Retirement Life

People are often unable to retire as early as they had planned. Either they do not have enough money in their retirement fund or they have debts piled up, and they have to keep working to get rid of them. To be able to retire early, you have to carefully plan your finances and maintain a strict control on your expenses. [Read more…]

Probe into Activities of Goldman Sachs in Europe

Goldman Sachs, the investment banking giant, could face a probe into its activities by some of the European countries. Following the fraud case against the company, the United Kingdom and Germany have asked for information from the US Securities and Exchange Commission (SEC) regarding the activities of the company. [Read more…]

Fixed Income Investment Options for Post Retirement Life

Retirement funds and bank accounts, with their falling returns, can no longer guarantee a secure life after retirement. People have become wary of relying on traditional investment options for supporting themselves after what transpired during the financial crisis. An alternative is fixed income investments, which allow you to strike a good balance between risk and return. [Read more…]

Leveraged Buyouts Could Be Revived Soon

Private equity firms have always preferred leveraged buyouts as the main method of acquiring a new company. The past couple of years have seen the private equity market going through a rough phase and activity almost drying up. The last time a major buyout was announced was that of Hilton by Blackstone in July 2007. Ever since the financial downturn, the only major buyout has been that of IMS Health. [Read more…]

How to Increase the Returns from Your Investments

We make investments in order to get good returns on our money. But we often feel disappointed by how our investments fare. A lot of the times, this is because we do not invest in a structured way and don’t even monitor returns regularly from our investments. Here I will discuss some practical ways with which you can maximize the gains on your investments. [Read more…]

How to Invest in a Mutual Fund

Investing in mutual funds is a great way to earn higher returns on your funds. Understanding how the mutual fund market works and the key success factors for such investments can make sure that you keep your money safe. [Read more…]

Withdrawing CD Money before Maturity can be Expensive

Certificate of Deposits (CDs) as we all know are bank accounts in which the customer deposits a minimum balance for a fixed period. These accounts offer higher interest rates than savings accounts but have a hefty penalty if you withdraw your money before maturity period of the deposit. [Read more…]

How Exchange Traded Funds or ETF Work

An exchange-traded fund (ETF) is an instrument that tracks a single asset, or a set of assets, and trades on the exchange like a stock. It is becoming a popular investment option, but you should know how it works before you put your money in it. [Read more…]

Proposal to Make Loan Backed Bonds Transparent and Safer

During the 2008 market crash, a number of investors who had significant sums parked in consumer loan backed bonds found their investments turning bad. Soaring default rates meant that many such bonds failed to generate the returns that the issuers had ‘guaranteed’. The Securities and Exchange Commission has now proposed some new rules, which are aimed at addressing these risks and making such bonds attractive investment instruments once again. [Read more…]

One of Wall Street’s Biggest Investment Firms Goldman Sachs Denies Betting Allegations

One of Wall Street’s biggest investment and securities firms, Goldman Sachs, has been accused of betting against its clients. The firm allegedly sold securities backed by mortgages to clients, while reducing its own exposure to similar instruments in a bid to lower its risk. [Read more…]

Is Gold A Sound Investment Option or Media Hype?

There is a lot of hype surrounding gold as an investment opportunity. The poor economic situation has subdued the value of other assets, and gold prices have risen as people look for safer investment options.

In reality, the increase in price of gold is a trend that is similar to the recent real estate bubble or the oil bubble. Discerning institutional investors tend to park funds in assets they believe will improve in value, owing to which prices escalate for that particular asset. [Read more…]

Stocks Show Heartening Rise as Consumer Optimism Grows

As signs of improvement on the employment scene become evident, the optimism in the stock market appears to be growing too. Increased demand in the service industry is contributing to confidence among investors.

A government report, which was released late last week showed how the employment scenario was finally witnessing a change for the better after a long haul of three subdued years. In March, the biggest job gain in the year was recorded. Although more private employers were seen adding to their employee roll as opposed to the government affiliated organizations, optimism has not been dampened by this fact. [Read more…]

Understanding Interest Rate Fluctuations

In order to invest your money in the right instruments, it is important to understand what rate your investments will grow at. Financial institutions offer interest rates based on numerous factors. Knowing about how interest rates are fixed can help you in making sound investments and in estimating the returns that you will get by investing in a particular instrument. [Read more…]

Hedge Fund Managers Make Billions

Hedge find managers seem to have benefit from the strong recovery in the financial sector and the government coming to the aid of large banks on the brink of collapsing. According to industry reports, managers of leading hedge funds raked in billions as fees and capital gains last year. [Read more…]

Do You Know What Your Saving Goals Are?

We are often told that we should allocate some of our income to savings. Some financial experts even come up with how much that allocation should be, and arbitrary numbers like 10% or 15% are recommended.

I have to say I don’t really understand this. How can they create a general rule about savings when all of us have a unique financial situation. And unless you know exactly what you are saving for, how can you decide how much to save? For all you know, you may just be better off spending some of that money now instead of keeping it for future. [Read more…]

Saving Money for an Anxiety Free Retirement

The recession has perhaps hit retirees the worst as they were forced to sit back and watch their life savings dissolve right before their eyes without being able to do anything about it.

The typical problems faced by retirees- decreased mobility, more likelihood of debilities and many others are hugely exacerbated when an additional stress factor is added to the mix – that of worrying if there is enough money left to handle basic needs such as being able to attend to emergencies. These anxieties can be taken care of to a large extent by tweaking the retirement savings plan during the earning years. [Read more…]

Benefits and Disadvantages of Roth 401(k) Plan

Roth 401(k) is a retirement savings plan which combines the features of Roth IRA and a traditional 401(k). If you are expecting an increase in tax rate when you retire, then Roth 401(k) plan is likely to be beneficial as the tax distributions after the maturity age will not be taxable. Also while switching employers, Roth 401(k) plans can be rolled over to a Roth IRA or to another Roth 401(k), which is a great flexibility that you can use. [Read more…]

Basic Guide to a Certificate of Deposit

A certificate of deposit is a low risk investment and gives higher returns than saving accounts. It operates by taking a certain amount as investment for a fixed period that can be anything from one month to even more than five years. CDs are issued by banks and the Federal Deposit Insurance Corporation (FDIC) insures them up to $250,000, which means they come with a guarantee from the U.S. government. [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…]

Supreme Court Sends Mutual Fund Fees Case Back to Lower Court

The Jones v. Harris Associates case, which was in the news when a district court supported the Chicago-based Harris Associates by finding the mutual fund fees charged reasonable, has come into the spotlight once again as the Supreme Court has sent the case back to the lower court. [Read more…]

Investment Alternatives to Mutual Funds

Those days when investors could blindly stack their cash in mutual funds are behind us. The returns from mutual fund investments have gone down and various other investment options have emerged that look much better. Many retail investors seem to have ignored this fact and they are still not moving their cash from mutual funds to other areas. [Read more…]

Investment Lessons from the Recession

The recession is hopefully behind us now, but it is important to learn some lessons from it so that you can invest more wisely when the next bear market comes. A lot of people lost large proportions of their investments in the stock market crash of 2008. However, that does not mean it is impossible to protect your money when the times are rough. Here are some tips to shield your investments from the next bear market. [Read more…]

How to Increase Your Net Worth

Keeping track of your finances can help you make sound decisions in financial matters. A fair assessment of your position is critical to achieve savings or repayment goals because it will tell you how much extra funds you can afford to put into these areas. [Read more…]

Diversify Your Investments Before It’s too Late

Don’t put all eggs in one basket. This adage holds true even in the highly sophisticated world of finance. Investors have always been advised to spread their investments among different baskets of assets that do not depreciate in value at the same time. This diversification is believed to make investments less risky, as even if one asset starts falling in value, your profits from other assets can offset that loss. [Read more…]

Organization Your Personal Finance in 4 Steps

When it comes down to it, personal finance has a lot to do with organization. You can make all the right decisions, invest in all the right places, and know about all the right options, but if you cannot keep track of it all it can turn out to be a lost cause. With that said, here are some quick and easy tips on organizing your finances and getting your money in order. [Read more…]

Risking Your Financial Stability for Short Term Growth

Is there really such a thing as short term growth? It seems that so many of us are aching to make smart investments that pay off big in a short time period, but this leaves our finances in a risky spot. It is not always worth shooting for that big pay off. You really shouldn’t look at investments the way you look at a lottery. All in all, the term short term growth is sort of misleading. In many cases there is no such thing. [Read more…]