No matter how much money you make, it pays to keep on top of money coming in and going out. Even if you do a good job of that, there are important times in your life when talking with a professional adviser makes sense.
Almost every major life event – finding or losing a job, getting married or divorced, having a baby, buying a home — is likely to have a major impact on your finances. A new job may mean you are making more money — no problem there as long as you know the best way to invest it. Getting married may mean you have a second income to count on, but now you have someone counting on yours as well. Buying a house means you have to come up with a hefty sum of cash for a down payment, get used to monthly mortgage payments and meet the expense of house repairs.
Let’s look at what happens if a baby comes into your financial picture. First, medical bills need to be paid, so having good medical insurance is important. Few insurance plans cover everything, so you’ll need to have a cash reserve to cover deductibles and extras, not to mention the furniture, clothing and sundries you’ll need when the newborn comes home. With a new addition to the family, you’ll want to make sure that the entire family (baby, too) is protected if something should happened to you — that means reviewing life and disability insurance to be sure it’s adequate for your new responsibilities.
There’s the future to start thinking about, too. Will your child go to college? If so, the College Board estimates that secondary education costs are rising 7% to 8% annually, a rate much higher than the rate of inflation. To afford the average $7,000 total costs for a state university, you need to start saving $195 a month. Wait until your child is 7 years old and the monthly amount jumps to $240! So, it’s smart to put away a little sum each month.
What can you do to accommodate new strains on your paycheck? How can you meet all of your new responsibilities? With an important financial goal (such as educating a child) you’ll want to work with a generalist — a financial planner. A lot of professionals specialize in areas such as taxes or stocks, but a financial planner helps you understand the “big picture.” A qualified financial planner can help you sort through your current financial situation, help you set short- and long-term goals and objectives, then present a “blueprint” designed to show you how you can meet your goals while staying within your means.
There’s nothing more certain than change. And just as you learn to adapt to the changes life throws your way, you can count on things changing with your finances as well.
This material was prepared by Raymond James for use by Kevin F. Duffy CFP® CRPC, Vice President, Investments of (Raymond James & Associates, Member New York Stock Exchange/SIPC or Raymond James Financial Services, Inc. Member FINRA/SIPC).
Kevin joined the Financial Services Industry in 2001; he has acquired both the CFP® and the CRPC® designations. These designations are a testament to his integrity and commitment to his clients. Kevin views every client relationship as unique and develops individual solutions to address individual goals. In today’s challenging market Kevin uses his knowledge to help retirees and pre-retirees like you plan for lifetime income, while minimizing the devastating effects of market risk. When you meet Kevin, he will address some of the common financial mistakes made by investors and how to overcome them. You do not want to miss this opportunity with Mr. Duffy.
DO YOU ASPIRE TO BE A SUCCESSFUL INVESTOR IN CAPITAL MARKET?
NEED FOR INVESTMENT
v To earn return on idle resources
v To generate a specified sum of money for a specific goal in life
v To make a provision for an uncertain future.
INVESTMENT AVENUES IN THE STOCK MARKET
Securities are classified into ownership and debt instruments namely, equity shares and debentures. REGULATORY MECHANISM:
SEBI FOCUS AREAS
I – COMPANIES AND OTHER ENTITIES
SEBI is focussed upon creating a:
v Disclosures oriented attitude,
v Good Corporate Governance,
v Ethical practices,
v Stakeholders’ orientation, and
v Transparency in operations of resource raisers.
Disclosures in Indian Capital Market should be at par with global standards.
II – MARKET PLACE
SEBI is focused upon creating an:
v Efficient,
v Effective,
v Transparent,
v Clean,
v Competitive, and
v Customers oriented Market Place.
Indian Market is at par with global standards in almost all operational parameters. Indeed, better than that at some of the dimensions.
III – INVESTORS
SEBI is focused on empowering investors through spreading the critical message that: “The most protected investor is the educated one”.
INVESTMENT CRITERIA
Investor should evaluate securities broadly on the following criteria:
Liquidityaspects
Safety aspects
Returns criteria
Tax savings attribute
Investor involvement is required to manage the investment portfolio
Minimum amount that investor can invest
RISK FACTORS
Risks are positively correlated with probability of returns i.e. high returns means high risk too.
Different securities carry different risk-return profiles
Risks may take place in the form of
credit risk (the counter party may default payment)
return risk (return from investment may depend on several contingent factors)
liquidity risk
INVESTMENT DECISION RULES
Empower investors through information.
Investing is a serious business.
Be informed about the risks and rewards of products/mechanisms before investing. This understanding would facilitate prudent decision making at investor end.
Investor just don’t a paper, investor take stake in an organization. Equip investor with the required information before initiating this relationship.
Seek advice from an expert, if required, before committing any position in the market
Read documents and understand the implications before entering in to contracts, with various intermediaries in the market and issuers.
Deal with only the SEBI registered intermediaries. Know investor intermediary, his history, potential to deliver etc. before entering into relationship. Don’t get carried away just by the charges.
Don’t be carried away by the persuasion of the broker/selling agent. Take investor decisions independently and discreetly based on the information. Be doubly sure about the suitability of the product/ products/ contracts to investor before investing.
Do ask for relevant documents from investor intermediary.
Maintain the records of all investor communication with various intermediaries and issuers. This would help investor resolve the dispute, which may arise out of investor dealing with them.
INVESTORS PROTECTION
Investors in their own interest must observe certain basic ground rules and investment principles.
ØInvestor should be apparent about the investment objectives and realistically review the risk taking capacity; should do his due diligence and home work before investing/ divesting any particular scrip and choose proper timing. In a moment stated, he should not be spontaneous in buying, emotional in holding and panicky in selling. One should be modest in expectations of gains and patient for their realization.
When the price of scrip is rising sharply and swiftly, without any conceivably concrete reasons, it should set the investor thinking before buying. Similarly, when there has been too much of publicity and hype about a particular entity or scrip, one should exercise caution and ascertain the real influencing factor. He should enquire about the quality of management, and the background of promoters.
These are common sense – based cautions, which should temper the temptations of the sensex – based happiness It is relevant here to remember Mr. Malcolm Forbes’s words of determination: he says: No earnings record, no chart, no prospects can entice him to a stock in a company , where he has a poor opinion about management or CEO.
It is indeed amazing that our ancestors of antiquity in their words of wisdom have given profound advice on matters which concern us even today. Let me put it in our today’s parlance, what an ancient sage observed: He said: one should do deliberations on likely profit and loss and the final gains before embarking into any venture or investment.
A wise person will not venture into such a gamble in quest of gain and in the process loses the capital itself. Or, in other words, a wise investor will not washout scrip, assuming it a blue chip, hoping to realize capital gains, and ending up in capital loss.
2. A small and retail investor may not have adequate time, knowledge or expertise to decide on and to execute a judicious, prudent investment plan. For him, his advice was: find a proper person and entrust the job to him so that he could do the job for you at the appropriate time.
Grievances of investors:
Grievance related to
Whom to contact
Issue/ Company
Compliance officer of the issuer company/Lead Manager/Stock Exchange
Trading/Broker/ Sub-broker
Investor Grievance Cell of
concerned Exchange
Mutual Fund
Compliance Office of Mutual Fund
Depository Services
Investor Relation Cell of
Concerned Depository
Corporate Action
Concerned Company/ Exchange
Intermediary
Compliance officer of the intermediary/
Affiliated industry association/SRO
Office of Investor Assistance and Education takes up grievances against the following:
Bankers to Issue
Brokers
Clearing and settlement organizations
Credit Rating Agencies
Custodians
Debenture Trustees
Depositories
Depository Participants
Derivative Exchanges and related organizations
Foreign Institutional Investors
Foreign Venture Capital Investors
Merchant Bankers
Mutual Funds
Portfolio Managers
Registrars and Transfer Agents
Securities Exchanges
Securities lending intermediaries
Sub-brokers
Underwriters
Venture Capital Funds
back of securities
Collective Investment Schemes
Compliance with listing conditions
Corporate Governance
Corporate restructuring
Debentures
Delisting of Securities
Issue of securities
Non-receipt of Dividend
Substantial Acquisition and Takeovers
Transfer of securities
FINAL MESSAGE
View investor as a customer of financial instruments and own the responsible of investor decisions. Use the information and understand the systems before committing investor resources.
SEBI would facilitate investor path through consistently improving the:
quality and quantity of disclosures by resource raisers, and
Creating efficiency, effectiveness and transparency in the operations in the market place.
By communicating the above message, SEBI does not disown its responsibility.Hence the role of a regulator in relation to investor empowerment is to implement a mandatory system for investor education. The regulator should ensure that the investor is made well aware of his rights to complain, with an easy, quick and non-judicial route for complaint and recompense should there be a problem, as well as the ability to use the courts. The regulator should also ensure that information is made widely and easily available, at a reasonable cost.
Dr.R.SRINIVASAN is a Post graduate in commerce and corporate secretary ship . He received his doctoral degreein the Managementfaculty from Alagappa University in 1997. He is now Working as an ASSOCIATE PROFESSORin Post graduate and Research Department of Corporate Secretaryship at Bharathidasan Government College for Women (Autonomous), Pondicherry University, Puducherry.He currently teaches Accounting ,financial management and Research Methodology Subjects. Before Joining BGCW, he was teaching in SNR College, Coimbatore, Sindhi college, Chennai& T.S.Narayanasamy College, Chennai for eight years. He was with the industry for a short term at Salzar Electronics Pvt. Ltd, Coimbatore. He has about 20 years of teaching experience and having research experience of 15 years. His interests are in Accounting and finance, Capital Market, Quantitative Methods. He underwent the Faculty Development Programme at Indian Institute of Management Ahmedabad during 2000-01. He has presented 20 papers in national and international conferences and has published twenty papers in the areas of Finance and Human resource Management in National Journals. Co-authored a book titled, ‘Investors Protection, published by Raj Publications, New Delhi He has delivered lectures in contemporary finance topics at Pondicherry University. He is involved in consultancy projects for Godrej Saralee, Chennai in the areas of Statistical Applications. He has supervised a number of research projects in the area of corporate finance and Human Resource Management. He is the Board of examiner in corporate Secretaryship and Management for the past two decades. .
In last week’s column I discussed academic studies that confirm the remarkable consistency of the market’s annual seasonal pattern, how with few exceptions markets in the majority of countries tend to make most of their gains in the winter months, and experience most of their serious corrections and bear market declines between May and November.
I cautioned that because 2009 was one of the rare years when those seasonal patterns did not appear, investors should not be lulled into a false sense of security, that they may be surprised how aggressively the seasonal pattern bounces back in 2010.
There is another historical pattern that also has to be considered for next year. I remind you of it every four years. It’s the Four-Year Presidential Cycle.
The history of the Presidential Cycle is that the economy and stock market tend to have problems in the first two years of each new president’s term, and then recover and be robust over the last two years of the term.
Studies show the reason for that pattern is that each new Administration realizes the economy and stock market must be strong when the next election time rolls around if they are to be re-elected. So they pull out all the stops to stimulate the economy to make sure that happens. However, all that excessive priming of the pump usually has the economy overheated, and the stock market overbought and overpriced, by the time the next election takes place.
Those excesses then need to be corrected, the corrections taking place in the first two years of the next term. Then stimulus efforts begin again to make sure the economy and stock market are strong again for the following election.
The cycle has a very consistent pattern. For instance, almost all bear markets have taken place in the first two years of the presidential cycle, and almost all recoveries have been underway in the last two years of the cycle.
The pattern is not consistent when a president is in his second term, perhaps because he cannot be re-elected. For instance, the pattern was clearly evident in Reagan’s, Clinton’s, and Bush Jr’s first terms. But normal corrections were not allowed to take place in the first two years of their second terms, the economy and market just kept on going. That allowed the excesses to become more serious. So the 1987 crash took place in the third year of Reagan’s second term, the 2000-2002 bear market began in the fourth year of Clinton’s second term, and the recent 2007-2009 bear market began in the fourth year of Bush’s second term.
However, although the problems started a year earlier for the next president in those instances, in the final year of the previous administration, the corrections (a crash and two severe bear markets) were so severe that it still took until the 3rd year of the next president’s term to see recovery clearly underway.
So what does that mean for next year, when we have a president in his first term, and next year will be the second year in this presidential cycle?
There will still be economic problems, in the real estate sector when the program of big tax rebates to home buyers expires in the spring, in the financial sector as commercial loan defaults continue to spike, in consumer spending (75% of the economy) as consumers remain hunkered down under high debt levels and high unemployment. No one expects any more than tepid economic growth next year. There may even be a dip back into recession for a quarter or two. Of the seven recessions since 1957, five had W bottoms rather than V bottoms. That is, they experienced one or two positive quarters and then dropped back into recession for one or two quarters.
So between annual seasonality patterns probably returning, and economic problems not having gone completely away, and next year being the 2nd year of the presidential cycle, we can expect problems sometime during the year for the stock market.
However, there is something else – a big positive.
The most consistent market pattern we have ever encountered is that since at least 1918 there has been a substantial rally from the low in the second year of every Presidential term to the high the following year. That is so whether it was a president’s first or second term. Even the conservative Dow gained an average of 50% in those rallies.
It has taken place no matter which political party was in office, in periods of war or peace, high or low interest rates, high or low inflation, high or low budget deficits, or whatever.
In fact the market makes most of its long-term gains in the period from the low in the second year of the presidential cycle through the following election year. It’s a period when you would not want to be out of the market, a period when even and hold investing is at its best.
The problem is in getting safely to that low. Historically, it has more often taken place in the fall, but over the years every month has had a turn or two in producing the low, even January.
So, it is highly likely there will be an important time next year to take profits and stand aside, to avoid the large losses that have taken place within each year recently. But also a time to with both hands, to even use margin and leverage. But it will be tricky to identify those key turning points. The problem is not made easier by the fact that each of the last two years experienced serious downturns right out of the gate, beginning just a few days into January.
For that reason, although our Seasonal Timing Strategy is in its favorable season and subscribers are 100% invested, we have a very close protective stop on its holdings to prevent a loss of any size, while our Market-Timing Strategy portfolio is still on a signal, but now only cautiously invested in diversified holdings at least until we have the data for the first few days of the new year.
Sy Harding is editor of , and the free daily market blog, .
Sy Harding is CEO of Asset Management Research Corp., author of 1999′s Riding the Bear and 2007′s Beat the Market the Easy Way, editor of and
From 1991-2007 I increased my 401K plan over 3,000% using company stock and mutual funds, ETF’s are popular, but are passive, index managed vehicles with subpar gains most of the time and hard to pick if you do not know what sector is hot.
Believe me, I did not earn a fortune in the insurance industry during the 1990’s and mid-2000’s. Religious payroll contribution of 6% did the trick. Plus I was in the hot service sector and my company stock increased 1200% in one case and another 500% in the other when my division was spun off. Sure, lucky me, but the 2000’s brought on a private equity firm buyout of my spun off division and mutual funds were the only game in town: between 2001-2007 I increased my portfolio 11.36% annually with just Fidelity mutual funds in the Mid-Cap Value arena and the Large Cap Value arena.
The next 3-5 years looks good for stocks after we get over this final hump of the recession and the Fed starts to slowly raise interest rates in a timely manner. Company stock should do well and a 25% allocation in a 401K plan would be a prudent choice.
As far as mutual funds, I would go with a mix of Mid-Cap and Large Cap Value…the two areas that take off after a recession as new monies are put to work in R&D at small to medium sized firms and Value stocks in the Large Cap arena are the hottest new thing. Slow and steady investment and dollar cost averaging never hurt anyone, especially the 20 and 30 somethings who have time to over come downturns in the economy.
But you might be saying, why is this 50’s something guy smiling after the Financial Crisis of 2008? Because I was 90% cash since late 2007! After the Dow backed down from 14,000 level, I knew the party was over for a while. One thing all investors should have is a stop in mind for ANY investment be it investment monies or 401K monies.
The market contracts regularly on a 5%-10% correction basis and then snaps back; once the correction hits an 11% or 12% correction, the next move is a 20% correction or greater like we experienced in the Fall of 2008 and the Spring of 2000.
Watch your investments monthly or better yet bi-weekly and have a level when it dips go mainly to cash while being eligible to remain in the mutual funds you are in. Hopefully, your 401K plan is good and matches not only company stock but mutual fund contributions as well.
Become a student of the market! Its hard to do I know with a full-time job and family.
Learn and prosper!
Check out my websites: and . Also look into the following mutual funds: FLPSX, FCNTX, FDVLX and TAVFX for the Value mix I spoke of earlier. These are the funds I was in and the funds that I am still invested.
Steven Kinney is a day trader and internet marketer with various websites: and
The benefits of becoming a private lender are numerous and above all it allows you to grow your retirement savings more quickly than many other methods on the market today.
Private Lending isn’t such a gamble if you stick to my “Full House” of lending tips. Here is the winning full house of 3 Cs and a pair of Ss:
Control – You get to pick and choose, and often set the terms of your investment. You are in control just like a bank, because in this case, you are the bank.
Consistency – Unlike stocks you don’t have to worry about what’s happening on Wall Street in this recessive economy. You will know the exact amount you will make on your money, no guessing if the market is up or down today.
Competence – When you find successful real estate investors you can be assured that they are experts at obtaining properties well below current market values. This assures that the investment for your loan is solid.
Security – Also unlike stocks you will have collateral! The investment is secured because your loan is attached to real property that has value not just numbers in some Wall Street broker’s computer. There is an old saying, that they aren’t making anymore land so it will always have value. Real estate has allowed more people just like you to become millionaires than any other investment vehicle ever!
Simplicity – You won’t need to jump through a lot of qualifying hoops and paperwork. You are the bank; you have the money, all the complex paperwork is handled by the real estate investor. You can relax and watch your money grow!
To get your FREE REPORT on private lending and other real estate tips go to . Kyle Pavey is a real estate solution professional. Feel free to visit his website at .
Well, here we are with only hours left before the year is over. Virtually every investment is up other than the US dollar.
Not much has changed since my last . But I have provided some interesting charts that show us what is possible in the coming weeks for the dollar, gold and natural gas.
US Dollar Trend Analysis – Resistance Levels The dollar has shown some strength in the past month. It was a no brainer trade for 2009. You were either long gold or short the dollar. The chart below shows the key resistance levels for the $USD. I have a feeling we are going to see the dollar test the 80 -81 levels before rolling over and heading south again.
If this happens then gold and silver will continue to pull back. I am actually hoping the dollar moves higher and gold drops back to test the $1000-1060 level. This would clear the way for gold and the dollar to continue with their longer term trends with increased momentum (dollar collapses, gold goes parabolic).
GLD Gold ETF – Daily Chart The daily gold swing trading chart is really starting to look attractive for a signal. Depending on what the US dollar does in the coming days will set the tone for gold.
We could see gold start to rally starting tomorrow or it will become volatile and start to sell off sharply in the coming days. Right now we have very light volume so any moves/breakouts cannot be taken seriously or with a large position.
If the dollar starts to rally we could see the GLD ETF drop to the $97.50 – $103 level.
Spot Gold Trend Analysis – 18 Day, 1hr Bar Chart Starting in 2010 I will be providing futures trading analysis and signals so I thought I would provide a chart of the spot gold trend I have been day trading over the holidays.
This may seem like I am going against my #1 trading Rule – Never Trade Against the Trend, but the trend changes depending on time frame and trading style you are using. In short, gold reversed very strong 18 days ago just as we anticipated it would. The selling momentum was so strong it made for excellent gold futures day trading setups which I took advantage of over the past 10 trading days.
The chart below is of the 100 ounce gold GC Feb 10 futures contract which I traded. The chart is shrunk down and does not show my setups, nor does the chart look very sexy, but it clearly shows the direction of the trend and the BIG SELLING VOLUME.
The table shows my recent trades and if you take a close look all of the trades I did were Short Trades. Because the momentum and trend is down on this time frame I only traded perfect short setups (profiting from gold as it loses value).
UNG Natural Gas Trading Fund UNG appears to be trading at resistance and starting to look like its rolling over. It did move above last weeks high which voids the reversal candle we had Tuesday and Thursday, or else it would have been a short setup for us. I don’t chase a trade, that’s my #2 rule, so I am waiting for a possible bounce here, test of resistance then another reversal back down.
Commodity & ETF Year End Trends: In short, we continue the waiting game for more setups in the coming weeks as volatility and volume creep back into the market. The dollar and gold are currently trading at pivot points and no one knows which way to play them.
Trading futures run virtually 24 hours a day and have provided some excellent trading opportunities that I will be providing in the coming weeks for traders.
Natural Gas is trading at pivot point and looking ready for another move down.
Crude oil and the board market I feel will top out in the next 2-5 days but nothing worth putting any money on at this time. I would like to thank everyone for their kind words and support over the past 12 months. I wish you all a happy and safe New Years!
Chris Vermeulen is Founder of the popular trading site . There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris’ uniquely consistent investment opportunities that carry exceptionally low risk and high return.
Reach Chris at: Chris[at]theGoildAndOilGuy[dot]com
If you’ve paid much attention to the news lately, you’ll have noticed that gold is a hot topic, maybe the hottest. Its spectacular rise in price has taken many by surprise, but for those in the know, it’s perfectly natural. So why are so many investors flocking to gold bullion?
The fact is that gold is the ultimate safe haven for investors. When people lose faith in paper money and conventional investments such as stocks and bonds, it’s to gold they flock. If you factor in gold’s limited supply and the demand from industry and jewellery makers to gold bullion, you’ll understand why pundits say the only way for gold is up. So how can you take advantage of the amazing gold market?
The fact is you have a wide range of choices when it comes to taking advantage of gold. Here’s a look at your options. We can separate them into type main types – the first is where you own your wealth on paper and the second is where you actually take possession of the yellow metal.
One popular way to take advantage of the demand for gold is to stocks in mining companies. Obviously if they’re mining more gold, their earnings are up and so are your dividends as well as the price of the stock. The problem is knowing which companies to invest in.
Another option is through the use of exchange traded funds (ETF). These represent physical gold bullion held in trust in bank vaults. These can only be traded during stock market hours and there’s a storage charge for the gold.
Then there’s digital gold currency or e-gold which is becoming increasingly popular. The problem is that there are no specific financial regulations for this product. And as the dealers are not banks, they don’t have to comply with banking regulations.
Next, you can invest in via Self-Invested Personal Pensions (SIPPs). These are a new type of personal pension plan that hold investments until you retire and allow you to manage their own fund by investing in asset classes of their choice. One benefit is that you can claim up to 40% income tax back depending on your income tax band. You’re allowed to hold investment grade gold in a SIPP in the form of a bar, or of a wafer, of a weight accepted by the bullion markets. It must be stored with a secure third party and you can’t take possession.
Finally there are gold options and gold futures. To deal in these, you have to handle a complex, fast-moving market. You need to be a hands-on investor and it’s not for those who can’t handle risk and uncertainty. Better leave this one to the professionals.
Now we’ll look at personally-owned gold investments. Essentially you have the choice of jewellery, coins and gold bars.
Jewellery makes for wonderful keeps sakes and souvenirs but the cost of craftsmanship and design makes it a poor investment vehicle. In addition, pure gold is too soft for most jewellery so some alloy is used. This means when you come to sell your gold jewellery, it will have to be assayed which adds to transaction costs.
Another popular way to invest in gold is through coins like , the American gold eagle or the Canadian coins. While these make fine keepsakes and have a definite value, they’re not efficient investment vehicles owing partly to the costs of workmanship.
Finally, you can gold bullion bars. Here you’re acquiring investment grade gold at the spot price. This is the most cost effective way to invest in gold. In the UK, you can online for next day postal delivery. And when it comes to sell, the market is extremely liquid. What’s more, buying investment grade gold bullion for investment is stamp duty free and tax free (VAT exempt) in the UK and EU due to the EU Gold Directive of 2000.
Buying gold bullion was long a difficult business and it was hard to get clear information. The internet has changed all that, brought transparency to the proceedings, and reduced transaction costs and hidden fees.
Buying gold and silver bullion online for UK home delivery is now a straightforward procedure. Just visit the website of a reputable online bullion dealer, peruse the offerings and place your . Your bullion will arrive in a day or two by insured .
Michiel Van Kets writes articles for Bullion by Post which is part of Jewellery Quarter Bullion Limited, the company offers private UK investors the opportunity to gold bullion bars at trade prices. All fine silver and <a rel="nofollow" target="_blank" href="https:// ” title=”gold bars”>gold bars are brand new and manufactured by London Bullion Market Association approved refiners. The company provides the lowest margins in the UK, <a rel="nofollow" target="_blank" href="https:// ” title=” gold bullion”> gold bullion bars at real time spot based pricing and real-time stock availability.
Stop chasing the latest hot mutual fund and start checking out mutual fund families and their performance records. To begin, you start off looking at Fidelity, Vanguard and T. Rowe Price. These are the three major players in the mutual fund field.
All have been around. Fidelity is the family of funds I am invested in and Vanguard is a bunch of index funds that follow a particular segment of the market and provide passively managed returns at low cost. T.Rowe Price is a lot like Fidelity. All fund families recommended above are no-load funds that do not charge an upfront fee or “Load” to join.
Next start looking at funds that are actively managed vs. looking at passively managed index funds….you are betting on the jockey and not on the horse for performance. Look at their three, five and ten year returns. Look at the growth of $10,000.00 over a ten year period. And finally, look at their Morningstar or Lipper Ranking and how the fund is rated by these two non-profit organizations.
The outlook for the economy over the next 3-5 years looks good after we get over this final hump of the recession. Now is the time to SLOWLY and PRUDENTLY rearrange your portfolio to take advantage of the next up trend in the market. And don’t forget to allocate a small portion of your monies to alternate investments such as futures, stock options and low risk Forex currency accounts. Emerging Markets and International Investments should do well as the over all world economy improves too.
Use any website you like to track your mutual funds: Fund family websites and MarketWatch are the best to research and track fund performance.
With Fidelity, try looking at FLPSX, FCNTX, FDVLX. And also look at Third Avenue Value (TAVFX) as an alternate or addition to FDVLX. I have been in these funds since 2001 and averaged 11.36% annual returns up until late 2007.
Please see my websites: and .
Steven Kinney is a day trader and internet marketer. See his websites: and
The United States already has a Value Added Tax (VAT) or something very close to it, according to an op-ed piece distributed this week to daily and weekly newspapers across the country. It?s called SCHIP, according to Chris McCalla, legislative director of the association which represents some 2,000 tobacconists nationwide.
McCalla was referring to the controversial European VAT which is being considered for application in the United States on top of other taxes and that SCHIP is similarly applied. McCalla explained that SCHIP ? the State Children?s Health Insurance Program ? is the equivalent of a VAT.
?A VAT by any other name is still a VAT and, whether we like it or not (we don?t), the U.S. is already using a VAT-like tax under the guise of SCHIP which was originally enacted by Congress in 1997 and substantially expanded in early 2009,? said McCalla.
?SCHIP is ? funded entirely by tobacco taxes. The tobacco industry ? including members of (IPCPR) ? has always been in favor of healthcare insurance for children, but for its funding to rely solely on the declining base of tobacco federal excise taxes doesn?t make any sense. Healthcare costs go up and tax receipts go down because fewer people can afford the heavily taxed tobacco products or they find ways to avoid paying any tobacco taxes at all. Add a so-called VAT and it makes even less sense.?
He added that VAT is a misnomer. Instead, ?it should be called ?an excuse to collect a hidden federal tax on products every step of the way ? from providers of parts and components to manufacturers to wholesalers and retailers.?
?Manufacturers of hand-made cigars, for example, pay the tax when they sell their premium cigars and pipe tobaccos to retail tobacconists. Then, in most cases, the retailers pay to their state governments a state excise tax on those same tobacco products except that the state excise tax is on the cost of the product including the full amount of the federal SCHIP tax. That?s what?s happening now: Our members pay state taxes on top of federal taxes, not just one in addition to another. VAT would compound that once again. And, don?t forget state and local taxes on top of all that!? he said.
McCalla reminded readers that current taxes are only applied when the consumer makes a purchase.
?As it is now, when a manufacturer sells products to a distributor and when the distributor sells his products to a retailer, there is no tax levied or paid, federal or state, except for excise taxes such as on tobacco. State and local taxes are levied when the products are sold to the consumer ? you and me.
?Remember, a VAT is a hidden federal tax which will be imposed on that same product and its component parts, every step of the way ? from parts suppliers to manufacturers to wholesalers to distributors to retailers, including when it is sold to you and me when the state and local taxes are added on top of it all. It?s a tax on a tax on a tax on a? well, you get the idea.
According to McCalla, either way ?we?re screwed. Paying taxes on taxes and compounding them with more taxes is what it VAT all about. It will be the end of many businesses ? not just smoke shops and cigar bars. It will mean the loss of many jobs, and it will create pricing of products that will put them out of the reach of many consumers ? including you and me.?
McCalla recommended that all U.S. voters ? smokers and non-smokers alike ? should ?become knowledgeable about SCHIP and VAT and, indeed, our nation?s entire system of federal and state taxation and let their elected representatives know how they feel.?
Smart investing includes risk management; however, most people focus on how much money they can make without paying attention to strategically analyzing risk. It is important for an investor to fully understand the concept of risk before embarking on an investment plan and to implement certain safeguards to ensure their success rate is increased.
In investment terms, risk is associated with the end of period value of the investment and the primary concern for any investor is a reduction in value of the original sum invested. There is no way of completely eliminating financial risk, even with the placement of assets in a bank account, therefore, a strategic investment plan should incorporate risk reduction techniques that have proven to create a greater opportunity of coming out ahead.
The most frequent techniques for reducing risk in investment are diversification, dollar cost averaging and time, and in to better understand these areas we will expand upon their meaning and how they can be implemented.
Diversification
Diversification in finance mixes a wide variety of investments within a portfolio and can include investing in different markets, regions or countries. Diversification is a frequent practice of investment managers to reduce risk without substantial reduction in returns.
Diversification reduces risk because markets do not always move in tandem and many financial instruments will react differently to market conditions. A balanced portfolio will be less volatile than one that is concentrated on a single asset and can include the following strategies:
1) Spread the portfolio among multiple investment vehicles.
2) Vary the risk in securities.
3) Vary by industry or geographical location.
4) Vary the investment managers and the strategies used by those managers.
Dollar Cost Averaging
It is an investor’s dream to be able to enter the market at its bottom but nobody can really tell when a market has ever reached this point. In reality, we will often see people get caught at the top of the market instead of buying low and selling high.
Dollar cost averaging is a timing strategy of investing equal dollar amounts regularly and periodically over specific time periods and is a technique that prevents investors from putting all their money in the market at the inappropriate time.
Time as a Risk Moderator
Time not only works for investors through the power of compounding but also helps to dampen the risk of investments. If we look at most major markets, we will see that the stock market will usually follow an upward trend with interim fluctuations. By focusing strategies on a long term basis, many of these fluctuations can be leveled in comparison to the overall performance as recoveries happen and markets will often surpass a previous high. It is worth noting that there is no specific formula for time as a risk moderator and indefinite waiting periods could be considered when implementing.
For any investor, the primary step in the formulation of a successful strategy should be the setting of an investment objective. Although “to make money” may be a fair representation of your goal, it does not focus on the strategic process that needs to take place in to achieve what we have originally set out to do. The investment objective must be realistic and specific and should take into account the risk tolerance, personal needs and circumstance and any constraints that the investor may have.
It is recommended that every potential investor carries out a . Many companies are available to help with this and provide the direction and equipment needed to carry out a proper analysis and most should carry this important service out free of charge. It is also vital that any company that assists a potential investor with their strategy should describe these risk reduction techniques in greater detail and explain the ways in which they can be incorporated into an investment plan.
For a free and comparison of the market, contact Alliance Insurance Services on 2891 8915 or visit
Alliance Insurance Services is an independent broker providing services for health insurance, life insurance, savings and investments.
