In especially volatile economic times, the drive to invest money wisely becomes more poignant. Traditional money-management strategies are examined with hesitation: just because an investment portfolio behaved well once before does not dictate its success in the future. Hindsight has recently taught us that savvy investors need to consider market trends, market volatility and new investment vehicles; they need to recognize excessive risk and the potential for an institution to collect toxic assets. Far from straightforward, an investor’s job has been complicated manyfold by the stress thrust upon the global economy. There are, however, firms that are wisely learning from the mistakes and ill-judgments of the past and developing new investment strategies using non-traditional investment vehicles.
InTrust Advisors, a Florida-based investment boutique, has taken the investment path less traveled. In the early 1990’s, a new type of investment vehicle, exchange-traded funds, or ETFs, was in its infancy. Designed as an alternative to stocks and open-ended mutual funds, an exchange-traded fund is a portfolio of securities, a basket of securities that is tradable like an individual stock on major stock exchanges. Popularity of this new product boomed. In the United States, more than 845 listed ETFs represented over $543 billion in assets as of December 31, 2008. InTrust recognized the potential of exchange-traded funds, harnessed their advantage and applied its own specialized investment strategy to reach client objectives.
The EFT in and of itself offers several advantages, relative to stocks and open-ended mutual funds, to an investment client. First, exchange-traded funds are more tax efficient, operating with fewer taxable events and only being subjected to capital gains tax upon final of the EFT. Second, exchange-traded funds are more liquid, reflecting the liquidity of the underlying securities in the constituent. Thirdly, EFTs are required to maintain a higher level of transparency, fully disclosed all holdings daily. However, not all EFTs are created equal.
InTrust Advisors has developed five unique ETF portfolios designed to be cost and tax efficient, that follow the exclusive InTrust trend following and price momentum models. InTrust’s Market Adaptive Investment Solution (MAPS) is the “special sauce” that capitalizes on the investment power of the exchange-traded fund. This strategy adapts to changes in the market so as to maximize the return on a client’s investment and realize returns faster. Though a market may dip or rise dramatically, InTrust’s MAPS helps retain balance better than traditional “ and hold” strategies.
For high net-worth clients, InTrust Advisors is also pleased to offer customized exchange-traded fund investment solutions. The Personalized Portfolio Solution uses InTrust’s trend following models to actively trade in confirmed bull markets and transfer to cash, gold or treasury exchange-traded funds in confirmed bear markets. InTrust’s research indicates that the discipline of such bear-bull reactive activity can add, annually, nearly 3% to long-term returns.
Born of a multi-client family in 1997, InTrust Advisors continues to be run by its founder and CEO, Jeff Diercks.
For more information on EFTs and MAPS, visit InTrustAdvisors.
InTrust Advisors design a series of cost efficient (ETF) solutions from proprietary trend following and price momentum models. For more information, visit .
Investing your money in mutual funds is a wise move especially for your long term goals. There are different types available in the market. One of these is the income mutual funds whereby the investor gets an income on a monthly or quarterly basis. Other types focus mostly on capital growth instead of this type or they opt for a combination of both. When you want to invest for a long period of time and get a regular income, then this is the option you need to consider. When you invest in this type of fund you get a percentage of its total earnings.
You make an initial investment of a couple of dollars or even less and still enjoy the benefits of owning a part of a large portfolio. Income mutual funds are mostly categorized as either balanced or equity income funds. The balanced type normally tries to balance the investments in stocks and bonds. The income equity funds often concentrate more on dividend paying stocks. Despite the fact that they may both have varying holdings, their main focus is generating and maintaining a high income level and preserving capital.
In comparison to money market or bonds funds, they are considered to be a better investment choice. This is because they produce higher returns than those that you would find in the money market and bond funds.
This type of investment is also considered quite safe as they mostly invest in companies that are creditworthy and established. These companies can be counted onto provide dividends and interest payments.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
In these tough economic times it is hard for you to trust a particular type of investment. Luckily, mutual bonds offer some sort of shelter during these times and give you a chance to still make money. However, it is advisable that you take your time when you are choosing the type of mutual fund that will work well for you. Investing in bonds is a good idea and this ensures constant interest payments and possible capital appreciation when the bond prices increase.
Bond mutual funds help you achieve this and much more. The middle risk investment venture that pursue strategies that are supposed to give higher returns. Investing in bonds and debt securities is less risky than stocks. They also provide the stability that many investors are looking for and since they are diversified, there is the reduced risk of default. In addition some bond mutual funds are also federal or state tax exempt. They are also more liquid than bonds since they can be bought easily and sold in smaller units. It is not easy to bonds and hold them since they are not as liquid as bond funds.
There are many different types of bond funds. The government bond funds invest in debt securities that are offered by the government such as treasury bills, treasury bonds, treasury notes etc. Then there are the municipal bond funds that invest in securities issued by the state and/or local governments for doing public works like building bridges, constructing schools etc.
Some of these are exempt from federal taxes since they have the backing of the federal government. The corporate bond funds invest in debt securities of corporations. They are a bit more risky than the other two types as they are not backed by the government. Despite this, they pay out a higher income in comparison to government funds.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
It can be difficult sometimes to find a reliable and safe way of investing. This is because many people may not be fully aware of the options that they have available in the market. However, the best thing to do when you decide to invest is to ensure that you are equipped with the necessary and proper facts. It is important that you are fully aware of what your investment option entails so that you do not get any surprises along the way. Mutual funds are a popular investment option and have the advantages of professional management, convenience and liquidity. It is also vital that you understand that mutual funds are not entirely risk free. When you have the proper information, it is easier for you to make an informed decision and compare the different mutual funds so that you can get the right one for you. This will depend on your goals, the length of time you want to invest and your risk tolerance.
It is also essential that you also put funds charges, fees and expenses, the age and size of the fund, the fund’s risk and volatility into consideration. You can also compare funds by measuring them by their returns. This way you will be able to see how much the fund has gained over a certain period of time. The fund’s benchmark is also another way for you to compare mutual funds.
It will provide you with a standard for you to make your assessment. This will help you assess what the fund has made against what it should have earned. It is also advisable that you compare returns. When doing this, ensure that the time period is equal and also the product is similar as far as risk is concerned.
Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Mutual Funds and how to effectively invest your money.
The world’s economy is in turmoil and so is the stock market. This has made investing quite difficult. Among other alternatives, people have been left with the option of investing in mutual funds. Mutual funds 2009 come in various types and the best of these are discussed in this article.
There are various criteria used in selecting these funds. The first is to look at the income-dividends ratio. It is through one’s income that they can know the percentage that their income will yield. The second criterion is the future trends. On should be able to choose funds that will be able to stand the test of time. Here we focus on future gains as opposed to the short term ones.
The last but most important method of selecting funds is to look at the long-term performance. It is important to purchase such investments not based on how they are performing today but by considering how they will be performing in the future. The most realiable mutual funds 2009 have been suggested as follows; The American Century High-Yield Fund: This has higher percentage of dividends of 9% which is higher than others. The New Alternative Fund is another type of fund that one would want to put into consideration.
There is an environmental-friendly way of doing things. It is mainly used by companies that focus on renewable energy. The Franklin Utilities Fund has a dividend yield of 4% and a ten year annualized return of 5%. ING Corporate Leaders Trust Fund is another type of mutual funds 2009 which has 2% dividends. Other types include Vanguard Energy Fund and the Municipal Bond Fund. The investor of this should be careful on the choices they make.
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Mutual funds are one category of investment securities that offer a very wide range of options from which an investor can choose from. This means that, one will be able to spread risk and also increase chances of making more money from the various investment options. The securities that one can under the mutual funds investment category include stocks and bonds. This is what is known as mutual funds diversification.
This means that, with the diversification, there is a great chance for growth and as such, mutual funds are able to balance themselves out, even when the economic times are hard or when the stock market is not doing so well. However, they have their disadvantages as well. Depending on where you invest your money, there is usually no guarantee that you will fetch a good return on your investment.
The reason for this is because, the mutual fund managers are not the same, charges on commissions and other fees differ widely also. The other criteria for mutual funds diversification is the categorization into income and equity funds. Income funds are those that one invests in, purposely for the sake of earning an income. They are more reliable because they are offered by the government and they have a steady dividend return.
Equity funds on the other hand are more growth oriented and they guarantee no return on the investment. However, the more they grow, the more they are likely to fetch, once dividends are declared. Other mutual funds diversification strategies are to be found in other categories like the index funds, the international funds and the sector funds, they all have their specific attributes that make them unique. To get the best out of these investments, keep looking out for any changes and keep your mind open. Also invest in as many categories as possible.
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It is widely accepted that every successful business must have a strong working capital position. It is in this context; an attempt was made to explain the concept and various determinative factors influencing net current assets below:
Gross working capital refers to working capital as the total of current assets. That is to say, Gross working capital = Total current assets. Net working capital refers to working capital as excess of current assets over current liabilities. In other words net working capital refers to current assets financed by long term funds or capital employed of the business.
Accordingly, Net working capital = Current assets – Current liabilities
The net working capital position of the firm is an imperative contemplation, as this will determine the firm’s profitability and risk. Here the profitability refers to profits after expenses and risk refers to the probability that a firm will become technically insolvent where it will be unable to meet obligations when they become due for payment.
A finance manager has to make an appropriate financing mix, which will limit the risk and increase the profitability. Financing mix refers to the proportion of current assets financed by current liabilities and long term funds.
There are two approaches which determine the financing mix (1) Aggressive approach (2) Conservative approach.
According to aggressive approach the long term funds are used to finance only the core or fixed portion of current assets (e.g., minimum level of finished goods inventory, raw material etc) and the other portion i.e. temporary and seasonal requirements are financed by short term funds. This is of high risk and high profit financing mix.
According to conservative approach the total current assets are financed from long term sources and short term sources are used only in emergency situation i.e. when there is an unexpected cash outflow. This is of low-risk and low-profit financing mix.
As we observed two methods of financing mix, one method is of high risk high profit and other is of risk low profit. A finance manager has to trade off between these two extremes.
Operating Cycle:
As there is a time lag between and realization of receivables there is a need for sufficient working capital to deal with the problem which arises due to lack of immediate realization of cash against goods sold. The operating cycle is the length of time required for conversion of non-cash assets into cash. This operating cycle refers to the time taken for the conversion of cash into raw material, raw materials into work-in-progress, work-in-progress into finished goods, finished into receivables into cash and this cycle repeats.
The operating cycle length differs from firm to firm. If a firm has lengthy production process or a firm has liberal credit policy the length of operating cycle will be more. On the other hand, if a firm does not extent credit or the firm is not a manufacturing concern i.e. where cash will be converted into inventory directly then the length of operating cycle will be reduced to a greater extent.
The length of operating cycle is calculated based on the following:
Raw materials storage period (RMSP)
Work in process period (WIPP)
Finished goods storage period (FGP)
Debtors collection period (DCP)
Creditors Payment Period (CPP)
ThereforeLength of operating cycle = 1+2+ 3+4-5
FACTORS INFLUENCING WORKING CAPITAL NEEDS:
A firm should have neither low nor high working capital. Low working capital involves more risk and more returns, high working capital involves less risk and less returns. Risk here refers to technical insolvency while returns refer to increased profits/earnings. The amount of working capital is determined by a wide variety of factors:
Nature of Business: The working capital requirement of a firm depends on the nature of the business. For example, a firm involved in of services rather than manufacturing or a firm is allowing only cash . In the first instance, no investment is required in either raw materials or WIP or finished goods, while in the second occasion there exists no receivable as there is immediate realization of cash. Hence the requirement of working capital will be lower.
2Seasonality of Operations:
If the product of the firm has a seasonal demand like refrigerators, the firms need high working capital in the periods of summer, as the demand for the refrigerators is more and the firm needs low working capital in the periods of winter, as the demand for the product is low.
3. Production Cycle:
The term production cycle refers to the time involved in the manufacture of goods. It covers the time span between the procurement of the raw materials and the completion of the manufacturing process leading to the production of goods. As funds are necessarily tied up during the production cycle, the production cycle has a bearing on the quantum of working capital.
The longer the time span of production cycle, the larger will be the funds tied up and therefore the larger the working capital needed and vice versa.
4.Production Policy:
The quantum of working capital is also determined by production policy. In case of the firms having seasonal demand of the products like refrigerators, air coolers etc. and the production policy of the firm determines the amount of working capital requirement. If the firm has production policy to carry production at a steady level to meet the peak demand, this will result in a large accumulation of finished goods (inventories) during the off-seasons and the abrupt during the peak season. The progressive accumulation of finished goods will naturally require an increasing amount of working capital. If the firm has production policy to produce only when there is a demand then the firm needs low working capital during the slack season and high working capital during season.
5. Credit Policy:
The level of the working capital is also determined by the credit policy, as the firm’s credit policy determines the amount of receivables. If the firm has a liberal credit policy, then the firm needs high working capital and the firm needs low working capital if the company’s credit policy does not allow it to extend credit to the buyers.
6. Market Conditions:
The working capital requirements are also determined by the market conditions. In case of the high degree of competition prevailing in the market the firm has to maintain larger inventories as customers are not inclined to wait for the product. This needs higher working capital requirements. If there is good demand for the product and the competition is weak, a firm can manage with smaller inventory of finished goods, as customers can wait for the product if it is not available in the market.
Thus, a firm can manage with low inventory and will need low working capital requirements.
7.Conditions of Supply:
The availability of raw materials and spares also determine the level of working capital. If there is ready availability of raw materials and spares, a firm can maintain minimum inventory and need less working capital. If the supply of raw materials is unpredictable, then the firm has to acquire stocks as and when they are available for ensuring continuous production.
Thus, the firm needs to maintain larger inventory average and needs larger requirementofworkingcapital.
CONCLUSION:
From the above discussion, it is made clear that the objective of financial management is to maximize the shareholders wealth. Hence, it is needed to generate sufficient profits. The profits generated depend mainly on volume. When the goods are being sold on credit as is the normal practice of business firms today to cope with increased competition the of goods cannot be converted into cash instantly because of time lag between and realization of cash. Further this is possible only through evolving effective working capital policy and better administration on current assets financing.
Dr.R.SRINIVASAN is a Post graduate in commerce and Management. He received his doctoral degree 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.
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If you want to make investments, you need to know as much as you can on how to mutual funds. Mutual funds are the way to go in to make really good investments in your purchase.
This is because these are very easy to and these are also very simple to sell. Mutual funds are rich in benefits and features. You will have to do your homework on how to mutual funds.
You need to identify which of these can accommodate what you need and can provide you with the investment that you can get your hands on.
The first step is to get the basic steps on how to mutual funds. This is basically a portfolio that contains the variety of securities like bonds, certificates, and stocks.
Most of these funds have concentration or a focal point that can guide you in the kind of investment that you are venturing.
The next step if you are going to mutual funds is to identify your investment goals. The specific objectives eventually determine the sort of the mutual fund that is very appropriate to your needs.
If you are going to pay off for your college education or save up for your retirement, it only makes sense that you get as much profit as you can with your mutual fund.
Determine how you mutual funds and make it reflect in your overall portfolio. The whole investment is only the portion of your collective assets. These should then be allocated to your mutual funds in accordance to your plan.
You can determine the percentage and then just strictly stick to these. If you are going to mutual funds, double check whether these consist stocks which may be a risk in your investment.
After having done these, the next step on how to mutual funds is to evaluate your risk level. You can tailor your investments in such a way that you are less aggressive.
It is important to be averse on the market but sometimes the best thing to do is to just let it flow. You don’t need to be sleepless at night. Just make a sound decision and hope that the process you did on how to mutual funds is a good investment.
Finally, when you search for the mutual funds to then the financial magazines that you need to rate depend on the risks, performances, and the other parameters of such funds.
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Mutual funds pool money from investors, who are constantly saving into the fund and at the same time, others are withdrawing from the fund, forcing the investment managers to keep large sums of money as liquid cash. This is one disadvantage of a mutual fund because, keeping liquid cash is detrimental to the growth of a portfolio since, it ties the money. The money is not invested in productive endeavors, thereby reducing the benefits that could have been accrued.
The various fees charged include shareholders fees, which come in the form of loads and redemption fees. Loads are divided into front load fund, back load fund, constant load fund as well as no load fund, calculated as a percentage of the amount of stock you wish to or sell. Annual fund operating fees include the cost of keeping shareholders records and financial statements, marketing and advertisement fees. As an investor who is only starting out on investment, it would be wise if you could start up with funds that have low investment requirements.
A front load fund entails paying the commission that would accrue up front and in a back load fund, you pay the commission upon selling all or part of your holding. A constant load fund deducts commissions on a regular basis, while a no load Fund does not charge any commission. There are many no load funds out there and in most instances, they out perform the loaded funds since all your money goes into buying shares. There are also many examples of load funds out there, but the most prominent ones are the index mutual funds.
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A fine cigar is one of life’s luxuries. Just open a fine mahogany humidor, select a fragrant private-stock cigar, and light up. The experience is one that is memorable and enduring. The reason for this is because our sense of smell is the sense that is closest related to memory in the human brain, and the aroma of a fine cigar will be just that.
In a time when we must reflect on what we can do with what we have and what we have to offer, it is a luxury that can be truly appreciated and enjoyed. There’s a reason behind the saying, “A fine cigar gets you through every major life event.”
Selecting cigars to give as gifts for the holiday season is also a way to show that you have every expectation that the future will be bright. There are many ways to cigars to give as holiday gifts:
1.Purchase from online companies that enjoy great reputations and will deliver at a discounted rate. Make sure you will be given notice as to the conditions of delivery, so that the cigars arrive fresh and are not dried out or damp.
2.Go to a local tobacconist. Enter their walk-in humidors and purchase some fine cigars that way. Reputable dealers will be happy to supply you with information regarding the type, size and style or cigar for your budget.
3.Going to a newspaper stand or a drugstore to purchase cigars is not a bad idea. There are some very reputable brands that are carried by such sellers; however, you must make sure that your purchase is fresh and offers a good quality cigar. These will not be the locations to find premium or super-premium cigars.
The persons who will appreciate such a gift are:
1.Professionals who have done a great job like your broker and your lawyer.
2.The postman, gardener, janitor or mailman in your building. You must make sure they smoke cigars, and if they do, they will treasure and appreciate the gift. Cigars will go much further than cookies or fruitcake in this regard.
3.The people in your life who matter and who might enjoy support. Enclose a note that says “Times are tough, but you’re tougher.”
4.Musician and artist friends who appreciate the challenges of unstable economic times. These types of people are often without funds to purchase fine cigars and will be appreciative of the luxury of a fine cigar.
Whatever the reason for giving cigars as a gift, your budget can include either one cigar or a box of 10 or 20 or more. The gift is consumable and biodegradable because cigar tobacco is the finest and most chemically pure of all tobaccos.
There is nothing like knowing that you are giving the best, and a fine cigar is an outstanding way to keep friends, clients or sponsors well appointed toward you and all your endeavors.
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