investor
A Beginner’s Guide to Investing
You may have heard the old, Chinese curse that states “May you live in interesting times.” For investors it seems that this curse has come to pass. Market volatility is through the roof, with the stock market swinging wildly up and down like some sick carnival ride, and taking investors with it every day .
What do you do if you are a beginning investor; still brand new to the world of finance and investing ? Over 50% of Americans polled in recent survey, think that their best chance for financial security is to stumble on a list of the most picked winning lottery numbers. This beginner’s guide to investing will help get you started off on the right foot.
What are Your Investing Goals?
Weather you are starting a business or beginning to invest, you’ll want to make a plan. Like a road map, a plan will lay out where you want to go, and the road you’ll take to get there. The plan will answer a few questions so you can achieve your goals. In fact, that is the first question you must answer. What are your investing goals? Are you trying to stash away a retirement nest egg, saving for the kid’s college education, or stashing a little away, just in case? How much money will you need?
Time Horizon
What is the time horizon for your investment strategy? In other words, when will you need the money? You’ll have a different strategy if you’re in your 50’s and nearing retirement, than if you’re fresh out of college and have 40 years of work ahead of you.
Risk Tolerance
How risk averse are you? If you’re the type that abhors risk, there are certain investments that are just not for you. In general, riskier investments will give you a higher rate of return, at a cost of possibly losing a good portion of your growth, or even your principle. You’ll want to structure your investment portfolio to take into account your personal taste for risk.
Income or Growth
A common investment goal is future income. If you are looking for your investments to provide you with a long term income, with regular payments you can use to live on, you’ll need to structure your portfolio accordingly. Regular income is most commonly derived from dividend payments. There are hundreds of strong companies that have a long history of paying out attractive dividends every quarter. These payments can be suffucuent to sustain you during a long, comfortable retirement, especiallly when combined with Social Security and any company ro military pension you may be receiving. Bonds would be another way to receive a regular income stream that one could use to live on. If you are looking for your investments to provide a regular, long term income, steer clear of risk, as you could see your income stream vanish or be severely diminished in the blink of an eye .
Many people invest for growth. This tends to be a riskier strategy, but for younger people who have plenty of time before they need their money, this is less of a concern. If you’re trying to amass as large a nest egg as possible than you’d want to target maximum growth, remember that you’re but one market fluctuation from disaster .
Diversification
Most investment experts recomend a sound diversification strategy. Diversification is a process of acquiring different investments that are each affected differently by economic factors. For example transportation stockks will be highly affected by fuel prices, while high tecfh investments will be less affected by them. This strategy seeks to minimize risk and maximize return by allocating a mix of investment vehicles, each with different risk exposures. In addition a well diversified portfolio uses instruments that are exposed to risk from different areas.
Blue chip stocks are strong companies that have a solid track record for performance in most of the financial metrics. A great hedge against problems is a well rounded portfolio of blue chips in various sectors, such as transportation, mining, consumer goods, and tech stocks. You could then mix those blue chip holdings with some small cap (smaller, younger companies whose market capitalization, or the total value of all their stock, is between $300 million and $2 billion) stocks to round out your holdings. The purpose of adding the small cap stocks is that small caps generally have more room for growth than the larger companies.
The whole point of diversification is to protect your assets by helping to ensure that no one economic or local problem can drastically affect all your holdings. That is why a well diversified portfolio has different companies from different industries.
Stocks vs. Bonds When most people think of investing, stocks are the first thing that spring to mind. A share of stock is simply a piece of the company. You are actually a part owner of the firm, and you own more of the company for each share that you buy. You’ll share (no pun intended) in the fortunes of the company as it grows and becomes more profitable. Many companies also pay out portions of their profits every year or quarter in payments to shareholders called dividends. You can reinvest these dividends in more of the company’s shares, or keep the funds for other purposes. Companies typically sell shares of themselves to raise money so they can finance growth.
Whereas stocks are ownership in a company, bonds are basically loaning a company money in exchange for being repaid your money with interest ,over time. They are shares of company debt. . Basically, a company that needs an infusion of cash borrows the money from investors by selling them bonds. The bonds are then repaid over a specific time period. These bonds are traded like stocks. Although not always true, bonds often rise when stocks fall and vise versa. Bonds are considered debt financing, whereas stocks are known as equity financing .
Municipal Bonds
Certain kinds of bonds are the financial instruments used by local government entities to bring in money for public projects like highways, bridges, schools, parks and libraries . These spcial bonds are called municipal bonds. They often have lower rates of return than corporate bonds, but their proceeds are normally tax free, and they are often lower risk than corporate, although that doesn’t mean they are completely safe. Sometimes cities do default on their bonds, but it is relatively rare (unless you’re looking at bonds from California) .
Where to Trade Stocks and Bonds
You can not just go out and buy stocks like so much chocolate chip mint ice cream. To purchase stocks you must go to a specialized market called a stock exchange. Unless you are one of a select few, you can not do this yourself, but must have a broker do it for you . Sometimes, stock exchanges are physical buildings, full of people making trades, or they can be a virtual exchange that exists purely in the computer world. The New York Stock Exchange is an example of a physical stock exchange, whereas the NASDAQ is a virtual exchange. The trades made in both are just as real and you’ll find examples of solid companies on both exchanges.
One of the most exciting things to come down the pike for the individual investor is the rise of online discount stock brokers. This allows the average person to become a very hands on investor at previously unheard of prices. In the past, all stock trades had to be done through a full service broker, which charged a pretty penny for their services. They often earned their money, because they had access to all the important information that was required to make good stock trades. Now, however most of that information is at the fingertips of anyone with a computer, so people can make their own, well informed investment decisions.
One thing investment experts and financial professionals are in universal agreement about is the need to start investing early. You will reap far greater benefits by starting early than if you wair even a few years, and you may never be able to catch where you would have been, all due to the power of compound interest you harness by giving your investments more time to grow. Compounding harnesses investment gains and reinvests them. The power of compounding means that an investor who starts early and invests wisely is almost assured of amassing a very large nest egg . Starting early is the key to an enjoyable retirement. So go out there and get started. Your future depends on it. Your other choice is to hit the lucky lotto numbers, and the odds there just aren’t that good.
Need Wholesale Houses For Fix and Flip Deals?
Every Investor wants to get as many houses as possible and flip them quick for profit but often its difficult because you just can’t find 10 or 20 houses every single month to work on. So what do you do? Well unless your uncle is a asset manager of a big bank and can just sell you as many properties as you want then your in trouble. There is a way though so don’t give up just yet.
Ok, you need more projects to work on but you don’t have time to go find the next deal so what do you do. Go find a wholesaler in your area and let them find a deal for you. This is what my business does. We find your next deal. We market and line up the deal and even get it under contract.
Well most big investors go to people called wholesalers. These people do all the marketing, talk to all the R.E.O. managers, and look at all the houses that have come out on the market that day so you don’t have to. They put together a large buyers list and when they get a property under contract, they send the listing out to everyone in a email and its first come first serve but its quick.
You will have to put a earnest money deposit down (usually twice the amount that the wholealer paid) but when you do, the house is yours. They assign the contract to you and congratulations, your the new owner of the house. You need to do your homework on the house though. If the numbers are wrong then you just bought it and good luck on what your going to do then. Also if you mess up and can’t close then your deposit is gone. You messed it up not the wholesaler.
A good wholesaler can get 5-10 properties a month to sell his investors and some can do many many more. Now this is not free so don’t go scratching your head when you see the wholeasler get a 10K check at closing. They market alot and expect to get paid for that work. I have seen some checks far above that but my philosophy is as long as everyone is making money then im happy. There is enough for everyone in this market so don’t be greedy but expect them to get paid. In case you didn’t realize it, I am a wholesaler and my company does very well. We find numerous deals each month and they don’t last long.
Building Corporations with Credit and Private Investor Funds
A few no credit loan products I can recommend:
Building Corporations with Credit and Private Investor Funds
Learn the insider secrets to creating corporation credit. Full info & flowcharts that we use to create our Corporations with Credit for resale. Start ups to Million in reported credit lines. Over 50,000 Clients purchased our proven system via PayPal®.
Building Corporations with Credit and Private Investor Funds
Loan Officer 101 – Loan Officer Training.
Learn How To Make 0,000 Per Year As A Loan Officer With This 18-lesson Training Program, Complete With 28 Marketing Ideas!
Loan Officer 101 – Loan Officer Training.
Credit Counseling For Credit Reports And Credit Repair Workbook
75% Commission!! Brand New, but Will Convert! A hands on guide to building and keeping excellent credit. No hype or Bs, just tons of little known info and tips from an industry veteran in a workbook format. Includes 3 Excellent bonuses!
Credit Counseling For Credit Reports And Credit Repair Workbook
I Survived Real Estate 2008 – Part 16
I Survived Real Estate 2008 picks up with the panel interview from the last session where Bruce Norris talks about how Wall Street keeps calling to find out when bottom is so they can profit even though they are part of the reason were in this current situation.
Rick Sharga talks about large pools of money purchasing these loans at deep discounts and then fixing the principles of the people in the homes.
Bruce then responds by talking about HR3221 about how HUD can buy first trust deeds at a discount and how the new structure would allow them to alter the loan of the person in the property. Bruce worries about the ramifications of this program. It is limited in who can apply since it applies to adjustable mortgages only. The people who really get burned are those next door who qualified for a fixed loan and are making the payments. They did everything correctly but they dont apply for the principle reduction. With California being a non recourse state, Bruce worries the dominos that might fall. Bruce then asks Philip Tirone if bailing from mortgages is becoming more acceptable.
Philip says clients dont care about the moral issue of walking away; they are more concerned about the credit ramification. Philip talks about the raised loan limits and how everyone thought it would make a difference. They think things are going to help but when you get into the legislation, it doesnt.
Bruce agrees with Christopher Thornberg in that the median price has to become more reasonable. Christopher thinks another 6 months and everyone will qualify.
Tommy Williams brings up the very important point of moral hazard in letting something like bailouts occur. Not holding consumers accountable sets up a larger problem for the future.
Bruce asks Christopher about Merrill Lynch taking .22 cents on the dollar for a $30 billion package of CDOs. He says they actually got 5% in cash and carried back a note and guaranteed the pile. Bruce asks whose money was actually lost. Christopher says it was the consumer investing in their company. Christopher says this buyout is another instrument and accounting mechanism. The financial system, Christopher says, is an absolute mess. All banks are having a difficult time. Were having an issue with cash because of it. [Part 17 Continues the panel discussion]
Platinum Sponsors:
The San Diego Creative Investors Association (SDCIA): http://www.sdcia.com/
Investors Workshops: http://www.investorsworkshops.com/
Frye / Wiles: http://www.fryewiles.com/
Proxibid: http://www.proxibid.com/
White House Catering: http://www.whcatering.com/
MVT Productions: http://www.mvtproductions.tv/
Pechanga Resort and Casino: http://pechanga.com/
The Denver Nuggets: http://www.nba.com/nuggets/
The Chicago Bulls: http://www.nba.com/bulls/
The Cleveland Cavaliers: http://www.nba.com/cavaliers/
Gold Sponsors:
7 Steps to a 720 Credit Score and Philip X. Tirone- http://www.7stepsto720.com/
Chicago Title – https://www.ctic.com/
Elite Auctions – http://www.sellwithauction.com/
Foreclosure Trackers – http://www.foreclosuretrackers.com/
Investors Resource Center of America LA and Steve and Robyn Love – http://www.irca-losangeles.com/
Las Brisas Escrow – http://www.lasbrisasescrow.com/
National Club of Real Estate Investors and Sam Saddat – http://www.ncrei.com/
Northern California Real Estate Investors Association (Norcalreia) and David Granzella – http://www.norcalreia.com/
North San Diego Real Estate Investors and Linda Wessels – http://www.nsdrei.org/
RealtyTrac – http://www.realtytrac.com/
RE Ventures and Michael Pines – http://www.reventuresrealty.com/
Real Estate Investors Club of Los Angeles and Phyllis Rockower – http://www.realestateclubla.com/
Real Wealth Investor and Scott Whaley – http://www.realwealthinvestor.com/
Saddleback Valley Communities – http://svc4.com/
Silverstar Finance and Janet French – http://www.silverstarfinance.com/
Sunset Hills Memorial Park and Mortuary – http://www.sunsethills.cc/
The Mission Inn – http://www.missioninn.com/
The Mortgage Equity Group – http://themeg.net/
The Naked Real Estate Investor Club – Rosie Nieto – http://www.nakedrealestateinvestorsclub.com/
The Short Sale Processor and Nick Manfredi – http://www.theshortsaleprocessor.com/
Virtual Real Estate Tour and Layla Tusko – http://1wealthcreation.com/
Wholesale Capital Corporation – http://www.wccmtg.com/
Duration : 0:8:13
What is a Private Money Lender?
http://www.twolearnreturns.com – How to increase your returns by 40% – 50%. Private Lender Education and Training
Duration : 0:1:40
Sale Offer Ads
Categories
Tags
Archives
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009