forex fire

Does a buy and hold strategy still work well for unit trust funds? There’s an argument that buy and hold is not a strategy, but is the same as not doing anything. To make it worse, your investment may ’sink’.

Given an example, let’s say, you bought into an equity fund in December 1998 and kept it until December 2004 and had a return on investment (ROI) of -2%. If you had actively managed your investments and switched to a bond fund (during bull bond market) and returned to equity later (during bull equity market), your ROI would have been 15%. Thus, some analysts suggest a buying, monitoring and rebalancing strategy.

The buy and hold strategy is based on an assumption that over the long run, markets will go up eventually. It’s a strategy that helps the investor save on transaction costs, taxes on capital gains and avoid the hassle of buying and selling.

There are a number of factors concerning this strategy. First, it’s assumed that the portfolio is diversified into different stocks and asset classes. If the investor only invested in one stock, he won’t even recover the cost today. He needs to invest across the asset classes (bonds, gold, cash etc.). In the long term, the portfolio will give good but not necessarily the best results.

Second, the investments must be fundamentally sound. In developing countries, a buy and hold strategy may not produce the best results many changes are still taking place. Thus, business cycle, the economic and investing environment and government policies will change, in line with the country’s development. When change happen, you can’t ignore the impact.

That being the case, investors are advised to review their investments regularly (at least once a year). But should unit trust investors try timing the market? As you know, a unit trust fund is a medium to long term investment vehicle. However, you can’t just invest and forget about it. Investors should monitor them closely and not easily give up control of their hard earned money.

Not all investors are literate enough to know when to enter and exit asset classes. Investors’ emotions come into play, making it hard for them to sell and take profit or cut losses, especially those who invest directly in the market. Thus, leave it to the professionals if you’re clueless and illiterate about financial markets, although even professionals can’t get it right all the time too as timing the market is never easy.

Another critical element of unit trust investing is to figure out if you’re comfortable with the fund manager’s style. If the investor were to rebalance his portfolio himself, in this case, the asset allocation decision is made by the investor himself. When markets move, he decides whether to buy, hold or sell.

For you those of you who prefer taking control of your investment, even if it’s a small sum, make sure you go into a fund that charges minimal entry and exit fees or allows free switches between funds in the same company and in the same year. Only move your investments when you believe market fundamentals have changed, otherwise don’t get caught up with investor sentiment.

Even if there were no changes in the investing environment, your own objectives may have changed, so it’s wise to review your portfolio at least once a year.

For investors who prefers to let the fund manager decide so long as they get a reasonable return on investments, there are funds that allow you to just sit back and watch your investments grow (if you’re lucky!). Go with funds and fund managers whose investment style suits your risk profile.

Finally, investors need to be educated. Get literate in your finances or make sure your investment consultant is literate.

Michael Russell
Your Independent guide to Investing

Have you heard of the Forex Assassin software which promises to help you make capital gains in the currency market? Currency trading is one of the most profitable methods to make money when done correctly, but will require you to have good knowledge about the markets. So can the Forex Assassin help you if you are a beginner trader?

1. How Can You Trade The Foreign Exchange Profitably?

The currency market is a global market open 24 hours a day, and there are plenty of opportunities. Unfortunately, if you want to spot all these opportunities, you will have to sit in front of your computer screen monitoring charts all day.

2. How Does The Forex Assassin Work?

Trading the currency market carelessly has caused many people to lose a fortune, so you need to make sure you know how this market works and what influences price movements. With the Forex Assassin software, it uses a formula that takes price as an input to tell you your buy and sell prices. This formula takes into account the factors that influence the each currency pair and gives you the best chances of success. It is completely mechanical because it is price driven and requires no decision making on the user’s part.

3. What Is The Price Driven Method All About?

It is a very innovative and original approach of trading that is very different from traditional methods. Forex Assassin software only uses time element and the price of each currency pair to determine whether you have a profitable trade on your hands and the target profit and stop loss you should set.

4. Is The Forex Assassin Suitable For You?

Many people want to make money from currency trading but are often held back because they think they will need to quit their day jobs to do it successfully. All that is about to change as automated robots like this one is programmed and introduced. With a few minutes every day, you enter the prices into the software, and it will tell you what you need to trade on. Then you will place your trades and you are done for the day!

Is The Forex Assassin another useless piece of Forex trading software? Visit http://www.top-review.org/the-forex-assassin.htm to see results of this trading software, and Click Here to Download The Forex Assassin!

I invite you to take the next few minutes to learn the truth about the real estate market, how it compares to other methods of building assets and why it is such a lucrative form of investing. Many potential investors will say, ‘I need to get into the Florida Investment Property market’, especially taking into account current stock market fluctuations and the HOT market for investment properties, but simply don’t know the facts about Orlando property investing and how to use sale and leaseback method of property management.

When is the last time your financial advisor or stockbroker tried to convince you that moving a portion of your assets into the Florida Investment Property market might be a good idea? Never Right? The ‘why’ is simple. They don’t earn commissions when you buy Florida Investment Property. It is also likely that you have probably never had an ‘apples to apples’ comparison of stocks versus Florida Investment Property quite like the one you will see here.

Reason 1:

Leverage: Banks will not typically loan money to buy stocks. Banks will however, compete fiercely to loan money to buy Florida Investment Property. Your first question should be, ‘why is that’? It has to do with risk management, which we will discuss later. The fact that banks want to loan you money to buy Florida Investment Property creates a situation which we will call LEVERAGE.

Let’s assume that you have $10,000 to put into some type of investment. If you choose to buy $10,000 worth of stocks, you will own exactly $10,000 worth of stocks. Pretty straight-forward. However, suppose you choose to invest that $10,000 into Florida Investment Property using a 90% mortgage (which in many cases can go up to 95-100% mortgages in today’s market), you will own $100,000 worth of Florida Investment Property. If both of your investments were to appreciate by 10%, your actual gain with your stocks would be $1000 where your actual gain with Florida Investment Property would be $10,000. That equates to an actual 10% return on investment vs. a 100% return on investment. That’s what we call leverage.

Leverage: Florida Real Estate vs. Stocks

The traditional argument against Florida Investment Property Investing (mainly from Stock Brokers) has always been ‘I can get an average of 10% from stocks with little effort so why would I invest in Orlando Investment Property that only appreciates 6-7% per year’? This point-of-view is not taking leverage into account.

If you take the above statement to be true and compare the REAL numbers, the stock investment gained 10% of the initial $10,000 value (or $1000) and the Orlando Investment Property investment gained 6% of the initial $100,000 value (or $6000). That is still an actual return of 10% versus 60%. It is not hard to see which investment provides a greater immediate return on investment. Additionally. these numbers do not take into account any income from your property during the course of the year, or the substantial tax advantages to owning property, which we will discuss later.

Reason 2:

Value: As we mentioned previously, if you invest $10,000 into purchasing stocks, you own $10,000 worth of stocks (a fairly obvious point). If you invest $10,000 into purchasing Orlando Investment Property using the leverage of a 90% mortgage, you own $100,000 worth of Orlando Investment Property right? Well, only if you paid retail for your property. Any savvy investor will tell you that there are excellent deals to be had in Orlando Investment Property, you just have to find them.

What if you purchased a $100,000 property that happened to be worth $110,000 the day you bought it? Does it happen? The answer is yes, all the time. If you have your eyes open and are willing to ‘go through the numbers’ to find good deals, they are all around you. You may be asking yourself, why would anybody sell a $110,000 property for $100,000?

Value: Making money when you buy.

The reasons are endless as to why a quick sale is desired, but just to name a few: job relocation, divorce, an estate is being settled or maybe a current appraisal on the property simply wasn’t done prior to selling. By ‘finding this deal’ you have accomplished two things.

You have added $10,000 to your asset column in the form of equity.

You have created additional LEVERAGE for yourself as the value of your property increases (a 6-10% gain on $110,000 is better than a 6-10% gain on $100,000!) Remember, you make money in Orlando Investment Property when you buy, not when you sell.

Reason 3:

Control: Let’s take our assumption one step further. When you buy your $10,000 worth of stocks, what can you do to increase its value? If we follow the previous assumption, you have invested $10,000 using a 90% mortgage to purchase a $100,000 property that has an actual value of $110,000 because you ‘found a good deal’. So what can you do to further increase the value of your new $110,000 property?

It is amazing what a cleanup, a little landscaping and a paint job can do to increase the value of a property. Only a few hundred dollars well spent can result in huge value gains in Orlando Investment Property. Your $110,000 property with a little effort could easily be worth $115,000, $120,000 or more virtually overnight! Do you have to do any of this work yourself? Absolutely not! If you like to do that sort of thing then have at it, but if not, simply hire it done and accept a little lower net gain.

Reason 4:

Superior Tax Position: The tax code in the United States is geared to reward Investors who make housing and other property available to the population. When you invest in stocks, you are taxed at some of the highest rates in the tax code. When you invest in Orlando Investment Property, you put yourself in one of the best tax positions in the business world. Remember the wealthy that hold substantial portions of their assets in Orlando Investment Property? Tax advantages are one of the main reasons this is true.

Continuing with the above example, let’s say that you have completed your ‘deal’ with the $10,000 invested with a 90% mortgage to purchase the $100,000 property that appraised for $110,000 (because you ‘found a good deal’), which you improved to say, $115,000 by spending another $1000 on cleanup etc. Assume that one year passes and the Orlando Investment Property market grew by 6%, your property would now be worth $122,000. So far, so good right? If you are like most people, you may want to spend some of your hard earned money.

Let’s do the numbers. You have a mortgage at current rates that started at $90,000 and after a year worth of payments (the majority of which are tax deductible) you still owe approximately $89,000. However, your property is now worth approximately $122,000. If you were to refinance at 90% once again, you would take out a new mortgage of approximately $110,000. This will leave you with approximately $21,000 in cash in your pocket. Now, the BIG question; do you have to pay tax on that money? Absolutely Not! You have not sold the property or realized a ‘capital gain’. You have simply borrowed money from yourself. You are able to do what you wish with that money, free from any tax whatsoever. Obviously, a good strategy might be to purchase two more properties just like your first deal!

Also, we have not taken into account the fact that ALL of your interest payments on this property are tax deductible. In addition, you are also able to depreciate the property itself and all of its contents for additional tax advantages if you choose to do so.

Let’s be fair and compare the Orlando Investment Property tax position with the stock scenario. Assume that the $10,000 initial stock investment grew by 10% in the first year, creating a gain of $1000 and you wish to access it. If you draw it out, you will pay from 20-28% (or higher) in capital gains tax in order to have access to this money. This reduces your net gain to $800 (actual 8%) or less, depending on your tax situation. Compare that to Orlando Investment Property and you are beginning to get the picture.

Reason 5:

Limit Your Exposure To Risk

Risk Management: Do you remember at the top when we said that banks would compete fiercely to loan you money on Orlando Investment Property? The answer to the ‘why’ is very simple. Low Risk. Banks incur little if any risk when loaning money on Orlando Investment Property due to the steady, solid growth rate of the property market, as well as the fact that if you default on your payments they will simply sell the property to somebody else. This is in direct contrast to the volatile stock market, which can vary daily with sharp increases and decreases in value. Furthermore, banks realize that a property isn’t going anywhere, whereas many investors know all too well about .com and other types of companies that were there yesterday and gone today.

This is all not to say that Orlando Investment Property markets don’t go down from time to time, however the dips are much less dramatic than that which can take place in the stock market, proven out by the banks’ willingness to loan money on property.

Reason 6:

Protecting your peace of mind.

Finally, Now that we understand the value of leverage and risk management we realize that a 6% Orlando Investment Property gain ‘beats the pants off’ a 10% stock gain in actual return on investment by a wide margin (approximately 50%, not taking into account several factors that can increase this number such as tax advantages, income on property etc.) Owning good, solid Orlando Investment Property allows you to sleep at night, or go on an extended vacation without worrying about your asset column. This is directly opposed to holding a substantial percentage of your assets in stocks.

Lisa Carson
http://www.biminibayresortinvestment.com
lcarson@biminibayresortinvestment.com

If you are looking for flexible investment vehicles that you manipulate within your portfolio such as stocks, bonds, futures you should pay close attention to ETF’s. By definition ETF stands for exchange traded fund, an ETF holds assets such as bonds and stocks and its net worth is equivalent to that of the negotiable instrument it holds; an ETF can also be thought of as an investment portfolio that holds stocks and bonds or other negotiable instruments that are traded on a stock exchange which is very similar to the way that stocks are traded.

The main difference between stocks and ETF’s (besides that an ETF is a portfolio of bonds or stocks) is that an exchange traded fund tracks and index hence the reason why they’re called index funds. There are many indexes that can be tracked through ETF’s, an investor may choose to track and index for it to Dow Jones, NASDAQ, a specific industry such as the manufacturing industry where they may choose to track and index of an emerging market, these markets can be in different countries so much like stocks and investor can also buy an ETF which tracks a particular index of an industry which thrives in different countries across the world.

The whole ETF concept has been around for about 15 years and the first to hit the market did it in 1993 and was better known as “spiders” — ETF symbol was SPDRs, this ETF in particular tracked the Standard and Poor’s 500 index of large-company stocks. During the early 1990s when there is investment vehicle was introduced to the market the most popular type of ETF’s were those which track the index of the technology sector because of obvious reasons, today there is a huge variety of ETF’s that operate in different countries and it can be said that the amount of ETF’s its equivalent to the number of industries that are being traded in the stock exchange.

Benefits of ETFs

One of the most obvious benefits when it comes to ETF’s is their low operating costs; let’s illustrate this point, the Vanguard total Stock market VIPER which is an ETF that tracks the index for the entire US stock market carries an annual operating cost of 0.07% of the total assets, that is equivalent of saying that a $10,000 investment would have an annual operating fee of seven dollars.

Another great benefit of dealing with an ETF is that such trading vehicle is structured for tax efficiency this is because an ETF itself doesn’t have to buy or sell securities so this means that there are not any taxable gains to be passed on. And ETF can generate taxable gains but, an exchange traded fund is often sold as a stock will be sold in the stock market, they are not redeemed by the holders so in order for an investor to realize capital gains he would have to sell the shares or trade the ETF in order to reflect changes in the underlying index.

Last (but not least) ETFs are very flexible when they are compared against other investment instrument such as mutual funds, in other words a mutual fund is often priced once and this usually happens at the end of the trading day, ETFs on the other hand can be bought or sold exactly as you would with stocks and similarly to stocks you could also buy on margin (using other people’s money) and you can also sell short when the market conditions are appropriate.

Financialbusinessmatters.com provides more Forex and Stock trading guides for savvy investors. Get corporate finance website templates and create a community of investors who share your interest, visit us today!

Don’t send them your money.

Yes, it really is that simple and easy — if you can control your greed-induced stupidity.

Yes, I know some people claim that some High Yield Investment Programs are honest and legitimate. Unfortunately, I see no evidence to support this claim — and find many good reasons to believe that all HYIPs and HYIP monitor sites are frauds from the get-go.

HYIP is short for High Yield Investment Programs. These are basically web sites which ask for your money in exchange for a guaranteed return on your investment which if true would shame Warren Buffett with his inadequacies and failures as an investor.

Returns of 1/2 to 5% DAILY! 6% weekly. 10% monthly. 730% annually.

Those are figures I just pulled from a small sampling of recommended HYIPs listed on an HYIP monitor site. Others claim more or less, but these are typical.

Hungry for returns like these? Most people are. They sure make ordinary mutual funds look weak and insipid don’t they? Makes you wonder why ordinary mutual fund managers earn millions of dollars when they can’t even guarantee a return of a mere 1/2% per day.

Even better — these returns are available to anybody. The minimum investments range from only $10 to $100.

If you were a trader who knew how to make such astronomical returns, would you want to be bothered with managing money for investors who can only afford to send you $10?

In the United States — and most countries have similar laws — all securities must be registered unless they’re placed privately with accredited investors. That’s people who have a net worth of at least $US 1 million and/or net annual income of at least $US 200,000. Needless to say, those people are not $10 investors!

By seeking funds for unregistered securities on a public web site, HYIPs appear to be violating these laws — even if the administrator has honest intentions.

But that’s not likely, because all HYIP administrators want your money sent in the form of e-gold, so it’s untraceable and nonrefundable. If they were honest, they’d accept your check.

HYIP experts advise doing due diligence before you invest, by investigating the administrators through their domain names. But if the HYIPs had honest intentions, they’d give you their names, physical mailing addresses and telephone numbers. Many HYIP sites don’t even pretend to tell you who or where they are.

And how do HYIPs achieve their extremely high but guaranteed results? Gambling in Macau casinos, forex trading, day trading, certificates of deposits, gold investments, investments on the NYSE and Nikkei, oil investments, manufacturing, venture capital, a single matrix multilevel marketing scheme that moved you up as people sent money after you, playing online Texas Hold ‘Em, the prime bank fraud and more. That’s what their sites claim, anyway. Some HYIPs don’t even bother to lie to you. They don’t even pretend they’re investing your money in anything.

As for the HYIPs that do claim to be investing in something legitimate (the majority) — what’s their trading edge that enables them to guarantee such high returns? They don’t tell you. They don’t brag about it. They don’t even give you a clue. You’re expected to simply accept their word for it. The lack of attention they devote to convincing prospective investors that their claims are credible is itself a show of contempt.

I’ve seen marketing materials for mutual funds, investment newsletters, investment books, trading software, investing courses and seminars — and all of them go to great lengths to convince prospects that their methods are successful. They don’t give away their secrets but they obviously believe prospects won’t send their money unless they first establish their credibility.

And no such marketing materials claim they can guarantee results every day, week or month! All trading systems have downs as well as ups.

Oh, yes — no HYIP has lasted over one year. Most go out of business long before that. Naive koolaid drinkers believe that some were started by administrators with honest intentions who just failed to make money, so they closed up shop without refunding any money.

If they were honest they wouldn’t make claims they couldn’t fulfil. They would give you their names and addresses. They would accept all legal forms of money, not just e-gold. And if they did go out of business despite their successful investment strategies, they would return as much money as possible.

They didn’t “succumb to the dark side” when their business failed. They were on the dark side when they started it in a deceptive manner.

But some HYIP investors make money — how’s that possible?

The obvious explanation for all HYIPs is that they’re plain and simple ponzi schemes. The first few investors and the traffic-generating HYIP monitor sites are paid with money sent by later investors. As long as the program continues for a time, the early investors can show a profit. When the flow of money from new suckers slows down, the administrator stops paying anybody and goes on a long vacation, before starting a new HYIP under a new name.

HYIPs rely solely on your greed — and that approach seems to be working.

I hope that now you understand that if you want a real return on your invested money, you need to put it in real investments — not send it to scammers.

Copyright 2007 by Richard Stooker

Everything you know about investing is wrong.

To learn more about HYIPs, go to: what are high yield investment programs or HYIPs

Capital gains are an illusion. Put cash in your pocket by learning the secrets of investing for income.

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