The best investment strategy for 2010 and beyond is not likely to be the normal investment strategy recommended year after year by many investment firms. Things ARE different this time. Here’s your basic investment guide of things to consider going forward.
Year after year the basic investment strategy or asset allocation recommended for most people: 60% stocks and 40% bonds. Stocks or stock funds are the growth element and bonds or bond funds are the safer investment that provides higher income in this asset allocation. In theory, losses in one should be offset by gains in the other. It’s time to review your present asset allocation. You might be taking more risk than you think you are.
Sometimes the best investment strategy is aggressive in nature; other times a bit of defense is called for. Rarely does chasing a hot asset class pay off for long. With the stock market up 60% in less than a year and high bond prices (super-low interest rates), that’s exactly what many investors are doing. At the same time some are chasing gold at historically high prices, and emerging stock markets that have been on fire (like China).
Your asset allocation has probably changed since you last looked due to fast changing markets. Take a good look, and then decide if your investment strategy is on track at an acceptable level of risk. If you are heavy into either stocks or bonds (or both) you might want to lighten up and diversify more. In 2010 and beyond the investment landscape could change considerably.
What if the financial crisis is not really over, or the U.S. dollar continues to be unstable? What if economic growth fails to materialize or interest rates soar? The USA has not been faced with more economic uncertainty in my time, and I’ve followed the economy and the markets since 1972. Here’s a basic investment guide to avoiding heavy losses should the going get tough again.
If you hold bonds or bond funds consider shortening your maturities and cutting your exposure. For example, if you hold long-term bond funds consider moving to intermediate-term and short-term bond funds. Rising interest rates will send bond prices (values) down, and long-term bonds will get hit the hardest. You will sacrifice higher interest income, but will increase safety with this investment strategy.
Stocks and stock funds may have moved up too far too fast in 2009. Don’t chase the stock market unless you want to speculate. Consider lightening up your asset allocation to stocks that closely follow the market in general. It’s quite likely that much of this move upward was “window dressing” by large portfolio managers who want to look good at year end. Some of it was no doubt caused by individual investors looking for higher returns in a low-interest-rate environment. Any bad news in 2010 could prompt these same investors to sell and send stock prices down.
Now that you’ve cut your asset allocation to bond and stock investments in general, where do you put this money? When in doubt CASH is king. Cash refers to safe, liquid investments like savings accounts, short-term CDs, and money market securities. Money market mutual funds are the easiest way for the average investor to put money into money market securities. With short-term interest rates at historical lows many investors have taken money out of these safe investments. If you want to play defense, increase your asset allocation to cash.
For offense consider moving money periodically into a variety of areas often overlooked by average investors… to broaden your diversification. For example, consider stocks in the following specialty sectors: basic materials, natural resources, real estate, foreign securities, and precious metals if you don’t already have money there. Mutual funds are available in all the above specialty sectors as well. Invest in increments to smooth out the risk of bad timing.
In times of high uncertainty don’t follow the crowd. Your best investment strategy is to survive financially with your investment assets intact. When the dust settles get more aggressive with your asset allocation. Meanwhile, cash is king; and diversify, diversify, diversify.
By: James Leitz
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Filed under Investing by on Sep 5th, 2010. 
During these tough economic times, many investors are starting to panic. They’ve lost trust in the stock market but have no idea where to put their money. The problem is that many investors think their only investment option is the stock market. They may view alternative investment opportunities, take real estate for an example, as too risky. The bottom line is that they want their investments to be safe and smart, yielding positive results both now and in the future. After all, many of these investors are putting their life savings on the line.
In the face of such unsure times, there is a sound solution: invest your money in gold and other precious metals. No matter what part of the world you call home, gold is a safe investment. According to NBI (National Bullion Investors, LLC), “Gold prices will rise next year as the financial crisis pushes more investors into the precious metal safe haven.” In fact, the gold industry expects bullion prices to hit $958.6 per troy ounce by November of 2009. Considering that current prices hover around $902 per ounce, we’re looking at a hefty increase if trends remain the same over the next year.
For the past ten years, Alan Greenspan, the widely respected former chairman of the US Federal Reserve, has touted the wisdom of investing in gold. He predicted that fiat money would someday be worthless but commented that, “Gold is always accepted.” More and more investors, from the middle class to the very wealthy, are beginning to share his sentiments.
Jeremy Charles, the head of precious metals at HSBC in London, noted that many investors were turning to gold as their confidence in the U.S. dollar is shaken. Don’t expect this to be a temporary fix, though; Mr. Charles believes that we’re facing a structural change in the way people approach their investments. He states that even after the current credit crisis comes to an end, gold will be viewed differently. “High bullion prices are here to stay,” he declared. Meaning that gold will continue to be a wise investment option for many years to come.
According to FT.com, which recently covered an annual London Bullion Market Association meeting in Tokyo, some bankers are so worried about the security and stability of the financial system that they are putting their money into physical gold, which involves taking possession of bullion bars and coins and thus removing their investment from the financial system. Because of this high demand for gold coins, dealers worldwide are actually running out of stock of popular coins.
Now, more than ever, is the time to sit down with your portfolio and reconsider your investment needs. Open your mind to new opportunities and think about diversifying your investments. If you’re a bit uncomfortable with putting all of your money in gold, that’s okay; you can start off slow, putting 10 or 15% into the precious metal. Remember, gold is much more than the material that you wear around your ring finger; it’s actual money that can pad your savings account and help build your wealth.
By: Ron Wellman
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Read more on Gold As an Investment Option – Increasingly Popular, Steadily Smart…
Filed under Investing by on Sep 4th, 2010.
I want to start some investment and buy some stock online, so where can you start from? where can you get the information froms? Do i need to hire a stockbroker? How much starting money do you need to start? ( i am not very rich or i wouldnt be here 
)
Filed under Investing by on Sep 4th, 2010.
What would be some good ways to invest this?
I don’t really wanna keep it tied up in anything for longer than two years, because my own family’s financial situation is uncertain.
Filed under Investing by on Sep 4th, 2010.
There are many types of investments. Mainly classified into four forms of assets:
1. Property
2. Short Term Deposits
3. Shares
4. Bonds
Each form of asset involves different investment that caters to different type of risk, return, liquidity, and maturity duration.
Brief Description on Different Types of Investments:
o Short Term Deposit: Bank’s savings account is the simplest form of short-term investment. One of the main advantages of this investment is that, the supplier avows 100 % guarantee of the returns. However, returns offered are low in comparison to other investments, but there is no chance of investment dropping in value like other types of investments.
Short-term deposit offers total liquidity. It means investors can withdraw all their money whenever they need. It is perfect option for short-term savings or emergency funds.
However, it is not a valid option for medium of long- term deposits.
Bank Fixed Term Investment: The lump sum money deposited for a set term usually six or twelve months is locked away by the bank for a fixed period. Here, the investors get higher interest than a straight savings account. Depending on interest rates, this is investment option is the best for medium or short-term investment.
o Bonds: Basically, it is considered as IOU issued by a company or government. The investors invest money in the bonds for a certain time, to get it back at a particular interest rate. For a fixed period, bonds lock away the investor’s money. However, sometimes, the investors can withdraw the deposited money for the trading purpose.
Usually, a bond is not an ideal option for short-term investment. Instead of bonds, the small investors are supposed to go for managed funds. It would be good for small investors not to directly invest in the bonds.
o Property: It is safe and profitable to invest in a property. It is beneficial for long-term goals. Most importantly, the investment without the right knowledge and deft attention is liable to suffer significantly.
Moreover, the losses incurred in property investments are not published. Prior to investing in any property, the investors need to understand and manage different issues and aspects of property investment.
There are two types of Property investments: Direct and Indirect Property Investment.
Direct Property Investment: The investors have to manage the daily administration such as finding tenants, bond and rent collection, and looking after the maintenance issues. Or else, go for property Management Company that charges fees for these services.
Indirect Property Investment: The investors have options to invest either in managed investment fund or superannuation scheme. Here the investors acquire ownership without need of actually finding the property and doing the hands on management. It offers the diversified benefits for the average investors.
o Shares: The investors are viable to get right share and value of the company, by investing in a company listed on a stock exchange. The investors can assess return through dividends and capital gains. Through shares, investors can invest in vast range of companies operating in different regions and can make benefit of long-term gains.
By: Jon Elton
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Filed under Investing by on Sep 4th, 2010.
There are a variety of different methods available to invest in the stock market. However, what most people believe are a safe investment can actually be a LOSING investment over the long run.
So, before you invest another dollar in the stock market, it is best to know the various investment vehicles available.
1. Government Bonds, Certificates of Deposit, and Money Market Accounts
I lump all of these into one group because they are the least risky of all investments. Unfortunately, they are almost the worst performing investment as well. Why? Because these 3 investment vehicles pay a lower rate of return than most other investment vehicles. In February of 2006, a very good money market account or CD account may get 3.5% – 4.5% a year return on the investment, which is barely above the annual inflation rate of approx. 1.7%. But if you are primarily concerned with preserving your investment capital, these 3 traditionally do very well.
2. Corporate bonds
Corporate bonds can offer a better rate of return than government bonds, but of course, they are a bit more risky. For example, GE 14 year bonds are currently offering a 5.65% rate of return. The risk here is that GM could become financially unstable, and not be able to pay back the loan that the bond represents. However, a highly rated corporate bond is generally a safe investment.
3. Mutual Funds
Mutual funds, are in my opinion, the worst possible investment. Now, I know some mutual funds have a 30% – 40% return per year, and some even more. However, the fees involved are usually very high, and MOST mutual funds actually performs WORSE then the market indexes do. The reason for this is in part, because of the management fees involved, as well as the restrictive trading as dictated by each mutual funds prospectus.
Mutual funds are not free to buy and sell any stock at any time that they choose. It must correlate to their investment strategy, even when they strategy is doomed to lose money!
For this reason, I steer clear of mutual funds these days.
4. Stocks
Ah, stocks. Now this is where the fun starts. Stock trading is where you can start getting consistent returns of 20% – 100% or more a year. Sounds great…so what’s the downside? Well, you can loose are your capital easier than in the previous 3 methods, and it takes a more active role on your part to achieve these returns. If you are interested in making more than 20% a year, I advise checking out BreakingWallStreet.com, and find the best stock picking system for you.
5.Options
Options are actually above and beyond what most investors ever consider. In fact, most stock brokers and financial advisors have one thing and one thing only to say about trading options: they are too risky. And yes, they are even more risky than stocks, and should never be invested into non-discretionary money. HOWEVER, options can and do give returns of 100% – 200% in a single DAY. Once again, using a carefully planned out trading system, one can trade options with minimal risk for loss, and a great upside potential. Again, check into the various options systems advertised on the internet.
Keep in mind, that I am not a stock broker nor financial advisor, and before you invest in anything, you should always consult a financial advisor. You can lose all of your money by investing in what you don’t know about. However, it is wise to know all your options, so you can decide how serious you are about investing, and be able to make the money you deserve!
By: Greg Podsakoff
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Filed under Investing by on Sep 2nd, 2010.
suppose some one has 2,000000 $ cash. what is the best area of investment in United states that does not need very specific managerial talents or is not so risky.
Thank you very much
By: Mike
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Filed under Investing by on Sep 2nd, 2010.
By: pkb1971
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Filed under Investing by on Sep 2nd, 2010.
Filed under Investing by on Sep 2nd, 2010.
Investment clubs can be a fantastic opportunity for kids to learn about investing. As they learn about investments they will develop a better understanding of money.
How to get started
The first step is to find a kid-friendly investment club. Browse investment club websites to determine if there are special sections devoted to teaching children or teens about investing. Speak with your neighbors, friends and colleagues to find out if they know of any investment clubs for kids. If you can’t find a suitable club you can start your own. Consider getting together with other parents to start an investment club for kids.
Choosing a portfolio
One of the hardest things with any investment club is deciding on the specific investments to make. Children have less money to work with than adults so it is important to stick to stocks that are well within their budget. What is most fun for kids is to choose stocks from companies they are familiar with. Think about clothing, food, computer, game software or other companies they use products from.
Learning about stocks
Before deciding on what stocks to invest, teach your kids to learn more about the companies they are considering. Children can learn more about a company from its website, by reading its annual report or by looking at its daily stock reports and trends.
Finding money to invest in stocks
Children can start by saving their allowance to invest in stocks. Open a savings account at a local bank so they can easily make periodic deposits. Teach children to save part of the money they receive as birthday or Christmas gifts. Older children can be paid extra for completing additional chores around the house. When children are old enough to work outside the home encourage them to take on a part-time job. Parents can help children by setting up a matching program where parents will match the investment amount the child has.
Keeping track of investments
Choose an investment club that offers interactive charts and reports. This will allow you and your child to record and keep track of their investments. Set aside a certain day of the week to spend an hour looking at how the stocks are doing. Make sure to stay on top of the investments and sell stocks when necessary. Follow the market trends using the newspaper or Internet to determine how you think the chosen stocks will perform. Teach children to make a connection between current events and stock trends.
By: Alvin Toh
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Read more on Investment Clubs for Kids – Investing Isn’t Just For Grown-ups…
Filed under Investing by on Sep 2nd, 2010.