By [http://ezinearticles.com/?expert=Mike_Singh]Mike Singh
For many individuals, the thought of investing their money in stocks, securities and bonds can be a scary proposition. For some, images of Bernard Madoff coupled with the recession makes for a very risky market indeed. You have probably heard of too many banks, insurance companies and investment houses folding under the pressure of the recession as well as the domino effect of fraudulent Ponzi schemes.
For others, you probably think that the investment world is so complicated and complex that it is confusing to all but the likes of Warren Buffett. In many ways, it can be, especially with akjargon. However, with proper education and training, you can actually make money investing on your own. Here is how to do it.
Begin Your Education
Education empowers individuals to take on and succeed at challenges that previously seemed insurmountable. You will learn to understand the technical lingo - bid, ask, spread, annual percentage yield, annual percentage rate, to name a few - that goes with each type of investment whether it is a certificate of deposit or a crude oil future.
You must apply what you learn. Just reading on and on without applying your new knowledge is pointless. You will only learn by taking action, figuring out what works and doing more of the same.
Be Familiar With Tools
You have many online resources that will help you understand the concepts but also assist you in making smarter decisions. Just to name a few of these investment tools, you have stock screeners and filters, visual maps, e-mail alerts, comparison tools for ETF, market and stocks, market tools like ETF tracker as well as various worksheets and calculators.
Investment Strategies
As mentioned earlier, education and tools alone do not make a wise investor. You still have to apply your intelligence of them so that you can make informed decisions. Some of the lessons that we've learned along the years are as follows:
* Always limit your exposure to risk. Although taking big risks is a given in investments, you have to take calculated risks. This means that you have to avoid "slippery places" like commodities and short sales. Instead, stick to safe investments like CDs and proven stocks. You may not make big money but at least you will not lose big money either.
* Stay in the investment market. You may experience large blips in your investments due to economic conditions but, by and large, you will still have good returns on your investments when you continue to do your due diligence.
With your education and tools put to the right use, you can and will [http://www.stock-trading-made-ez.com/Penny_Stocks.html]make money investing on your own. Visit http://www.stock-trading-made-ez.com/ to learn more.
Article Source: http://EzineArticles.com/?expert=Mike_Singh http://EzineArticles.com/?How-to-Make-Money-Investing-on-Your-Own&id=3079124
Sunday, October 18, 2009
The Golden Rules of Investing
By [http://ezinearticles.com/?expert=John_Leske]John Leske
When it comes to investing, there is an inordinate amount of information and opinion that is freely available. Most people have an opinion about the direction of the economy, markets, which asset classes or sectors will do best, and which specific securities will out perform. And most of these opinions are supported by valid reasoning and sometimes by informational "evidence".
But how helpful is this when investing?
To be a good investor over the long term you need to abide by some intelligent investment rules. Unfortunately, devising the rules is a much tougher act than coming up with forecasts and opinions. Following the rules is even tougher, especially when they may conflict with your forecasts and opinions.
The three golden rules:
1. Never invest until you have an articulated, long term strategy with a clear set of rules for investing;
2. Never disobey the rules;
3. Never ignore the rules. To do so makes then obsolete. Replace them with revised and improved rules, but never ignore them.
While this advice may appear a little trite, it is amazing how many people invest without any long term strategy or rules. We think it's because:
* It takes time and effort to devise a strategy and rules. Many people just couldn't be bothered, don't know where to start or don't comprehend the lifetime cost of missing this step;
* They are used to things changing so quickly in their life and careers that committing to something long term is seen to have little value;
* Immediate opportunities are given much higher priority than long term strategic decisions. This is driven by the tendency to be distracted by issues that are urgent ahead of those that are important;
* A need to be in control and to control one's own destiny. This drives a preference for decisions that offer more immediate evidence of success. Opportunism generally wins out over prudence in this battle.
A practical example
Common logic given for the shift from shares to cash throughout 2008 was that share values were falling and cash rates were better. This apparently rational reasoning was given more strength because it was strongly correlated with investors' emotions at the time.
But how useful is this reactive reasoning in a strategic sense? Could you rely on it for managing your wealth over the long term?
Let's have a look at the rules that flow from this reasoning:
1. Follow the most recent trend.
2. Sell assets that show poor recent past performance; and
3. Buy assets that show good recent past performance.
That seems relatively clear but it's not really specific enough. To be a practical set of rules, you need to specify the period that will be used to measure recent past performance. So, for the sake of adding clarity, let's add a forth rule:
4. Recent past performance is determined by the return over the past 12 months.
You also need to consider how often you want to trade. If the past 12 month performance of cash and shares fluctuates month by month, then you'd be up for some sizeable trading costs. So, to avoid excessive trading, we'll add two final rules:
5. Hold each position for a minimum of 3 months; and
6. Only implement decisions after 3 months of confirming past performance.
So, now you have some practical investing rules derived from some commonly accepted reasoning.
Intelligent investment rules
It's not just a matter of following the rules, you also need an intelligent set of rules.
We tested the above rules, using the two asset classes of cash and Australian shares (S&P/ASX 300 Accum. Index), over a 29 year period. We compared this approach to a more traditional buy and hold approach. We constructed the comparison so that both exposures exhibited the the same level of risk for the tested period, (as determined by the level of volatility).
The lifetime cost ...
Over the 29 year period, you would have been 40% worse off by implementing the rules based on recent past performance. This loss of wealth has nothing to do with taking more or less risk; it comes down to the application of poor investment rules over a long period of time.
While reasoning and opinion are powerful and emotive drivers, they often lead to investment results that are far from optimal. Actions are generally driven by popularism and emotion.
It's important not to let the plethora of information and opinion take precedence over the disciplined application of an intelligent investment strategy. Seasoned investors rarely denote their investment success to opportunism or striking it lucky. It's about having a smart, long term strategy and sticking to it.
A good adviser can help you build a sound strategy that suits you. They will provide you with an intelligent set of rules (based on rigorous research) and they will help you to implement those rules over time.
The lifetime cost of ignoring these three golden rules can be substantial.
Wealth Foundations is an independently owned personal financial advisory firm that offers wealth management and strategic financial planning services. For more information, visit [http://www.wealthfoundations.com.au]Wealth Management.
Article Source: http://EzineArticles.com/?expert=John_Leske http://EzineArticles.com/?The-Golden-Rules-of-Investing&id=3055203
When it comes to investing, there is an inordinate amount of information and opinion that is freely available. Most people have an opinion about the direction of the economy, markets, which asset classes or sectors will do best, and which specific securities will out perform. And most of these opinions are supported by valid reasoning and sometimes by informational "evidence".
But how helpful is this when investing?
To be a good investor over the long term you need to abide by some intelligent investment rules. Unfortunately, devising the rules is a much tougher act than coming up with forecasts and opinions. Following the rules is even tougher, especially when they may conflict with your forecasts and opinions.
The three golden rules:
1. Never invest until you have an articulated, long term strategy with a clear set of rules for investing;
2. Never disobey the rules;
3. Never ignore the rules. To do so makes then obsolete. Replace them with revised and improved rules, but never ignore them.
While this advice may appear a little trite, it is amazing how many people invest without any long term strategy or rules. We think it's because:
* It takes time and effort to devise a strategy and rules. Many people just couldn't be bothered, don't know where to start or don't comprehend the lifetime cost of missing this step;
* They are used to things changing so quickly in their life and careers that committing to something long term is seen to have little value;
* Immediate opportunities are given much higher priority than long term strategic decisions. This is driven by the tendency to be distracted by issues that are urgent ahead of those that are important;
* A need to be in control and to control one's own destiny. This drives a preference for decisions that offer more immediate evidence of success. Opportunism generally wins out over prudence in this battle.
A practical example
Common logic given for the shift from shares to cash throughout 2008 was that share values were falling and cash rates were better. This apparently rational reasoning was given more strength because it was strongly correlated with investors' emotions at the time.
But how useful is this reactive reasoning in a strategic sense? Could you rely on it for managing your wealth over the long term?
Let's have a look at the rules that flow from this reasoning:
1. Follow the most recent trend.
2. Sell assets that show poor recent past performance; and
3. Buy assets that show good recent past performance.
That seems relatively clear but it's not really specific enough. To be a practical set of rules, you need to specify the period that will be used to measure recent past performance. So, for the sake of adding clarity, let's add a forth rule:
4. Recent past performance is determined by the return over the past 12 months.
You also need to consider how often you want to trade. If the past 12 month performance of cash and shares fluctuates month by month, then you'd be up for some sizeable trading costs. So, to avoid excessive trading, we'll add two final rules:
5. Hold each position for a minimum of 3 months; and
6. Only implement decisions after 3 months of confirming past performance.
So, now you have some practical investing rules derived from some commonly accepted reasoning.
Intelligent investment rules
It's not just a matter of following the rules, you also need an intelligent set of rules.
We tested the above rules, using the two asset classes of cash and Australian shares (S&P/ASX 300 Accum. Index), over a 29 year period. We compared this approach to a more traditional buy and hold approach. We constructed the comparison so that both exposures exhibited the the same level of risk for the tested period, (as determined by the level of volatility).
The lifetime cost ...
Over the 29 year period, you would have been 40% worse off by implementing the rules based on recent past performance. This loss of wealth has nothing to do with taking more or less risk; it comes down to the application of poor investment rules over a long period of time.
While reasoning and opinion are powerful and emotive drivers, they often lead to investment results that are far from optimal. Actions are generally driven by popularism and emotion.
It's important not to let the plethora of information and opinion take precedence over the disciplined application of an intelligent investment strategy. Seasoned investors rarely denote their investment success to opportunism or striking it lucky. It's about having a smart, long term strategy and sticking to it.
A good adviser can help you build a sound strategy that suits you. They will provide you with an intelligent set of rules (based on rigorous research) and they will help you to implement those rules over time.
The lifetime cost of ignoring these three golden rules can be substantial.
Wealth Foundations is an independently owned personal financial advisory firm that offers wealth management and strategic financial planning services. For more information, visit [http://www.wealthfoundations.com.au]Wealth Management.
Article Source: http://EzineArticles.com/?expert=John_Leske http://EzineArticles.com/?The-Golden-Rules-of-Investing&id=3055203
Buying, Selling and Collecting Gold Coins and Investing in Gold
By [http://ezinearticles.com/?expert=Adam_Brenner]Adam Brenner
Gold has historically been a treasured and enduring commodity. It has been lusted after and collected, seized by tyrants and pirates and the like for centuries. It's color and beauty are unequaled. It has forever been admired, molded, minted and worn as a symbol of wealth, stature.
Gold itself, has carried with it throughout history a romantic lure and reverence that goes along with it's monetary value. It's value by weight is a measure of the real wealth and stability of national currencies worldwide. Almost every country's paper money has been devalued over time and many have become completely worthless, except for precious metals such as silver and gold.
The unique and amazing precious metal cannot be created by man, nor can it be destroyed or altered in any way. It has remained one of the most valuable liquid investments with no geographical boundaries. Gold can be bought, sold, traded and stored in many different parts of the world. Naturally, gold coins from almost any country are also bought and sold frequently and are a good investment for many. Gold is still the foundation of the current monetary system and one of the most stable forms of currency or wealth.
At one point in time in the US, prior to and up until 1933, all paper bills minted were backed in full by gold reserves. Today, our paper currencies are backed by nothing more than a mere promise of their value by the government.
But gold coins are always going to retain their value and possibly increase over time, depending on the rarity and age of the particular coins and the number of coins made of a particular issue.
Another popular aspect of gold coin collecting is the Mexican Peso. When it comes to Mexican coin collecting, of particular importance is one's ability to identify Mexican peso gold coins. This will ensure he is actually getting genuine coins to add to his growing coin collection.
The Mexican peso coins were first introduced in the 1920s and were originally made to celebrate the independence of Mexico. One of the first coins made was a Centenario. The coins were about 90% gold with 10% copper to make the coin more durable and long lasting.
If you are starting out as a coin collector, the Mexican gold peso is a good place to start and they are still among the most popular gold coins to collect along with other gold coins including the American eagle gold coins. The Mexican peso had a figure of a winged goddess of victory holding a laurel wreath and with the other hand, she held chains. The feminine figure stood in front of two volcanoes, which were the Iztacchautl and Popcatepetl, both of which are volcanoes located in Mexico.
Other than the most popular Mexican 50 Peso coins, many collectors also enjoy collecting the smaller denomination coins including the 20 Peso gold coin, the 5 Peso coin and both the 2.5 and the 2 Peso gold coins as well.
For more information about Gold Coins, Gold, Silver and Precious Metals visit http://americancoinnj.com
Article Source: http://EzineArticles.com/?expert=Adam_Brenner http://EzineArticles.com/?Buying,-Selling-and-Collecting-Gold-Coins-and-Investing-in-Gold&id=3064317
Gold has historically been a treasured and enduring commodity. It has been lusted after and collected, seized by tyrants and pirates and the like for centuries. It's color and beauty are unequaled. It has forever been admired, molded, minted and worn as a symbol of wealth, stature.
Gold itself, has carried with it throughout history a romantic lure and reverence that goes along with it's monetary value. It's value by weight is a measure of the real wealth and stability of national currencies worldwide. Almost every country's paper money has been devalued over time and many have become completely worthless, except for precious metals such as silver and gold.
The unique and amazing precious metal cannot be created by man, nor can it be destroyed or altered in any way. It has remained one of the most valuable liquid investments with no geographical boundaries. Gold can be bought, sold, traded and stored in many different parts of the world. Naturally, gold coins from almost any country are also bought and sold frequently and are a good investment for many. Gold is still the foundation of the current monetary system and one of the most stable forms of currency or wealth.
At one point in time in the US, prior to and up until 1933, all paper bills minted were backed in full by gold reserves. Today, our paper currencies are backed by nothing more than a mere promise of their value by the government.
But gold coins are always going to retain their value and possibly increase over time, depending on the rarity and age of the particular coins and the number of coins made of a particular issue.
Another popular aspect of gold coin collecting is the Mexican Peso. When it comes to Mexican coin collecting, of particular importance is one's ability to identify Mexican peso gold coins. This will ensure he is actually getting genuine coins to add to his growing coin collection.
The Mexican peso coins were first introduced in the 1920s and were originally made to celebrate the independence of Mexico. One of the first coins made was a Centenario. The coins were about 90% gold with 10% copper to make the coin more durable and long lasting.
If you are starting out as a coin collector, the Mexican gold peso is a good place to start and they are still among the most popular gold coins to collect along with other gold coins including the American eagle gold coins. The Mexican peso had a figure of a winged goddess of victory holding a laurel wreath and with the other hand, she held chains. The feminine figure stood in front of two volcanoes, which were the Iztacchautl and Popcatepetl, both of which are volcanoes located in Mexico.
Other than the most popular Mexican 50 Peso coins, many collectors also enjoy collecting the smaller denomination coins including the 20 Peso gold coin, the 5 Peso coin and both the 2.5 and the 2 Peso gold coins as well.
For more information about Gold Coins, Gold, Silver and Precious Metals visit http://americancoinnj.com
Article Source: http://EzineArticles.com/?expert=Adam_Brenner http://EzineArticles.com/?Buying,-Selling-and-Collecting-Gold-Coins-and-Investing-in-Gold&id=3064317
Wednesday, October 14, 2009
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