Mar
30
Are You Investing or Speculating? Your Answer May be Detrimental to Your Future Wealth
Filed Under investing | Comments Off
Karla Arguello asked:
Oil prices are high, real estate is down, the dollar is flat, unemployment is high, your investments are down, and no one really knows what’s going to happen with the elections in November. The future is uncertain to say the least, and for many the fear of uncertainty can lead them to make poor investment decisions that will have a rippling effect into their future. It is times like these that separate the well prepared investor from the panic stricken speculator. Let’s explore the difference between the two and the consequences.
An investor is someone who invests using a consistent, long-term strategy to secure their financial future using well diversified investments. Generally the focus is on minimizing risk while maximizing return.
A speculator or market timer is someone who is less concerned about consistency and who switches investments on an emotional whim.
During a bull market most people would say that they are investors, but when the stock markets are jittery investors get tested, revealing many closeted speculators. This may include you, if you liquidated your investments and are waiting for the markets to recover to get back in.
Why This Strategy Does Not Work
You simply cannot predict when the markets will rally and when the markets will hit rock bottom. And missing the upswings of the market can be very damaging to your long term returns as seen in the following graph.
Understanding Risk
Investing in the stock market is not risk free. You should understand and feel comfortable with the level of risk in your portfolio so that when the market goes through its cycles you are well prepared. Let’s explore this further. Let’s use a hypothetical portfolio ABC with the following risk and return criteria:
Standard deviation = 10% (Standard deviation is a statistical measurement that sheds light on historical volatility. This is a good measure of the portfolio’s risk. The higher the standard deviation, the riskier the portfolio.)
Expected return = 12%
If you own portfolio ABC what can you expect going forward? To answer this question we must go back to statistics. If you are a long term investor you expect that the average return will be 12%. This does not mean that you will earn 12% every year. After all, there is market risk to consider. For example, one year you may earn 6% another year 25% or anywhere in between, and so forth.
At any given period you can be 68% confident that your portfolio’s return will fall within a range of 2% to 22%. And you can be almost certain that your portfolio’s return may fall anywhere from -18% to 42%. Can you deal with this? Most investors enjoy the up side of risk, but seldom enjoy the downside. Case in point, an investor that earns 32% on a portfolio whose long term expected return is 12% is a happy camper. But, is that same investor happy when the same portfolio (whose expected return is 12%) earns a crummy -8%?
The point of this example is to understand that returns will vary from year to year. Depending on the standard deviation of your portfolio, those figures will fluctuate within a given range and you must be willing to live with that volatility. Just like you will not get 12% returns every year, you will also not get negative returns every year. Long term investors must understand and accept this risk if they want to be appropriately compensated.
Remember you are a long term investor. It’s the long term strategy that matters. Over the long run when you average the positive and negative returns your portfolio’s total return will approximate 12%. All the bumps in between are just part of the investment process.
Quoting Warren Buffet “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
The Importance of Diversification
As investors, we must understand that markets are cyclical and that there is risk involved in investing in the stock market. While that risk never completely goes away, we can do a lot to minimize the portfolio risk to the best extent possible. The best way to do this is to diversify our investments across different asset classes (or categories of the stock market) The key here is to identify investments in segments that perform opposite to one another under different market conditions (known as negative correlation), or at least have low correlations to each other. The result is higher returns and lower risk over time.
One common example that simplifies this concept is that of suntan lotion and umbrellas:
If you own a store that sells suntan lotion in Florida, more than likely you will do very well when it’s sunny out and people are going to the beach or outdoors. However, we all know that it rains in Florida, so on rainy days your store may not do so well. To diversify the risk of not selling any suntan lotion on rainy days you could consider also stocking up on umbrellas. That way you will make money whether it rains or it’s sunny out. This is the concept of diversification. Market conditions that cause one asset category to perform well, often cause another asset category to have average or poor returns. If properly executed, diversification will smooth out the unsystematic (market) risk events in your portfolio.
What About Asset Allocation?
Asset allocation describes how you choose to distribute your investments among investment vehicles such as stocks, fixed income, alternative assets, cash etc. According to Roger G. Ibbotson’s The True Impact of Asset Allocation on Returns“for the long-term individual investor who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100 percent of performance—regardless of whether one is measuring return variability across time, return variation between funds, or return amount.”
How you decide to distribute your assets among investments is a personal choice that needs to be looked at very carefully. In making this decision you should take the following into consideration:
Time horizon: how long will it be before you need to start withdrawing money from your portfolio? You don’t want to find yourself in a position where you need the money and you have to sell part, or your entire portfolio at a loss. The longer your time horizon the more risk you may be able to accept. The closer you get to your investment goal i.e. retirement; you can reduce the level of risk by reducing your equity exposure and increasing your fixed income levels.
Risk tolerance: You may want higher returns, but when your ABC portfolio is negative you feel like you’re going to be sick. You may be taking on more risk than you can stomach. You have to be realistic with yourself and face the fact that you need a portfolio that will not deliver huge returns but will help you outpace inflation.
Conclusion
When it comes to investing and life in general, it always pays to do your homework and have a plan. As a long term investor your goal is to diversify your investments to reduce risk and maximize your long term results. This involves the careful selection and distribution of assets among investment vehicles that support your risk tolerance, time horizon and individual needs, as well as the appropriate mix of negatively correlated asset categories.
There is no denying the sexy allure of timing the market, or the fact that speculators can make money, and do get lucky investing in what’s “hot”. However, the reality is that they can’t consistently beat the market. More times than not, speculators end up buying high and selling low in a panic. You will always hear how much money a speculator made on one or two investments, but you will rarely hear how much money they have lost on their other not-so-“hot” investments. It is wiser to develop a long term strategy and remain consistent even when the market misbehaves. After all, if we do our homework we would know what to expect in the long run and this includes expecting, that at some point or another, our portfolios will experience a few bad periods. What matters is the long term performance of our investments and most of all our peace of mind.
Market risk is not predictable nor avoidable that is why stocks have higher returns than “safe” savings and fixed income investments.
Bamboo Indoor Fountain
Oil prices are high, real estate is down, the dollar is flat, unemployment is high, your investments are down, and no one really knows what’s going to happen with the elections in November. The future is uncertain to say the least, and for many the fear of uncertainty can lead them to make poor investment decisions that will have a rippling effect into their future. It is times like these that separate the well prepared investor from the panic stricken speculator. Let’s explore the difference between the two and the consequences.
An investor is someone who invests using a consistent, long-term strategy to secure their financial future using well diversified investments. Generally the focus is on minimizing risk while maximizing return.
A speculator or market timer is someone who is less concerned about consistency and who switches investments on an emotional whim.
During a bull market most people would say that they are investors, but when the stock markets are jittery investors get tested, revealing many closeted speculators. This may include you, if you liquidated your investments and are waiting for the markets to recover to get back in.
Why This Strategy Does Not Work
You simply cannot predict when the markets will rally and when the markets will hit rock bottom. And missing the upswings of the market can be very damaging to your long term returns as seen in the following graph.
Understanding Risk
Investing in the stock market is not risk free. You should understand and feel comfortable with the level of risk in your portfolio so that when the market goes through its cycles you are well prepared. Let’s explore this further. Let’s use a hypothetical portfolio ABC with the following risk and return criteria:
Standard deviation = 10% (Standard deviation is a statistical measurement that sheds light on historical volatility. This is a good measure of the portfolio’s risk. The higher the standard deviation, the riskier the portfolio.)
Expected return = 12%
If you own portfolio ABC what can you expect going forward? To answer this question we must go back to statistics. If you are a long term investor you expect that the average return will be 12%. This does not mean that you will earn 12% every year. After all, there is market risk to consider. For example, one year you may earn 6% another year 25% or anywhere in between, and so forth.
At any given period you can be 68% confident that your portfolio’s return will fall within a range of 2% to 22%. And you can be almost certain that your portfolio’s return may fall anywhere from -18% to 42%. Can you deal with this? Most investors enjoy the up side of risk, but seldom enjoy the downside. Case in point, an investor that earns 32% on a portfolio whose long term expected return is 12% is a happy camper. But, is that same investor happy when the same portfolio (whose expected return is 12%) earns a crummy -8%?
The point of this example is to understand that returns will vary from year to year. Depending on the standard deviation of your portfolio, those figures will fluctuate within a given range and you must be willing to live with that volatility. Just like you will not get 12% returns every year, you will also not get negative returns every year. Long term investors must understand and accept this risk if they want to be appropriately compensated.
Remember you are a long term investor. It’s the long term strategy that matters. Over the long run when you average the positive and negative returns your portfolio’s total return will approximate 12%. All the bumps in between are just part of the investment process.
Quoting Warren Buffet “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
The Importance of Diversification
As investors, we must understand that markets are cyclical and that there is risk involved in investing in the stock market. While that risk never completely goes away, we can do a lot to minimize the portfolio risk to the best extent possible. The best way to do this is to diversify our investments across different asset classes (or categories of the stock market) The key here is to identify investments in segments that perform opposite to one another under different market conditions (known as negative correlation), or at least have low correlations to each other. The result is higher returns and lower risk over time.
One common example that simplifies this concept is that of suntan lotion and umbrellas:
If you own a store that sells suntan lotion in Florida, more than likely you will do very well when it’s sunny out and people are going to the beach or outdoors. However, we all know that it rains in Florida, so on rainy days your store may not do so well. To diversify the risk of not selling any suntan lotion on rainy days you could consider also stocking up on umbrellas. That way you will make money whether it rains or it’s sunny out. This is the concept of diversification. Market conditions that cause one asset category to perform well, often cause another asset category to have average or poor returns. If properly executed, diversification will smooth out the unsystematic (market) risk events in your portfolio.
What About Asset Allocation?
Asset allocation describes how you choose to distribute your investments among investment vehicles such as stocks, fixed income, alternative assets, cash etc. According to Roger G. Ibbotson’s The True Impact of Asset Allocation on Returns“for the long-term individual investor who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100 percent of performance—regardless of whether one is measuring return variability across time, return variation between funds, or return amount.”
How you decide to distribute your assets among investments is a personal choice that needs to be looked at very carefully. In making this decision you should take the following into consideration:
Time horizon: how long will it be before you need to start withdrawing money from your portfolio? You don’t want to find yourself in a position where you need the money and you have to sell part, or your entire portfolio at a loss. The longer your time horizon the more risk you may be able to accept. The closer you get to your investment goal i.e. retirement; you can reduce the level of risk by reducing your equity exposure and increasing your fixed income levels.
Risk tolerance: You may want higher returns, but when your ABC portfolio is negative you feel like you’re going to be sick. You may be taking on more risk than you can stomach. You have to be realistic with yourself and face the fact that you need a portfolio that will not deliver huge returns but will help you outpace inflation.
Conclusion
When it comes to investing and life in general, it always pays to do your homework and have a plan. As a long term investor your goal is to diversify your investments to reduce risk and maximize your long term results. This involves the careful selection and distribution of assets among investment vehicles that support your risk tolerance, time horizon and individual needs, as well as the appropriate mix of negatively correlated asset categories.
There is no denying the sexy allure of timing the market, or the fact that speculators can make money, and do get lucky investing in what’s “hot”. However, the reality is that they can’t consistently beat the market. More times than not, speculators end up buying high and selling low in a panic. You will always hear how much money a speculator made on one or two investments, but you will rarely hear how much money they have lost on their other not-so-“hot” investments. It is wiser to develop a long term strategy and remain consistent even when the market misbehaves. After all, if we do our homework we would know what to expect in the long run and this includes expecting, that at some point or another, our portfolios will experience a few bad periods. What matters is the long term performance of our investments and most of all our peace of mind.
Market risk is not predictable nor avoidable that is why stocks have higher returns than “safe” savings and fixed income investments.
Bamboo Indoor Fountain
Mar
30
investing?
Filed Under investing | Comments Off
matt t asked:
hi im interested in investing in the stock market and stuff like that. does anyone have any websites or books that would help? as i am a teen, a teen oriented book or site would be helpful. thanks.
Plumbing Tips For Homeowners
hi im interested in investing in the stock market and stuff like that. does anyone have any websites or books that would help? as i am a teen, a teen oriented book or site would be helpful. thanks.
Plumbing Tips For Homeowners
Mar
25
Investing?
Filed Under investing | Comments Off
zorkordevin asked:
Hi,
I’m interested in buying some stock….I’d like to be able to buy it online.. and I’m wondering if anyone know’s of a good website that accepts paypal that I can buy/sell shares.
Hi,
I’m interested in buying some stock….I’d like to be able to buy it online.. and I’m wondering if anyone know’s of a good website that accepts paypal that I can buy/sell shares.
Mar
22
Seven Strategies For Investing During Volatile Markets
Filed Under investing | Comments Off
Graeme H. Patey asked:
The markets don’t always behave the way we’d like them to: Geopolitical turmoil, natural disasters, interest rates and world events can have a profound effect on market movements. If recent market volatility has you concerned about the economy, you are not alone; this is a confusing time for many investors. Some have decided to stay the course, while others are sitting on the sidelines waiting for the market to rebound. However, since no one can predict how the markets will perform, it’s important to develop an investment strategy that can help you stay on the right track to meeting your long-term financial goals. Here are some strategies that you can implement today, that may help to manage risk during these uncertain times.
Work with a Financial Advisor. There are a lot of do-it-yourself investment resources available to investors today. However, none of those resources can replace the experienced, personal service a Financial Advisor provides. A Financial Advisor can offer an understanding of your complete financial picture, not just your investments. Additionally, in periods of market volatility when you need the most support, a Financial Advisor can provide:
• Access to important decision-making research and information;
• Ongoing monitoring of your investment portfolio, while anticipating your changing needs; and
• A comprehensive market-volatility plan.
Have a plan. Developing a financial plan is one of the best ways to meet your long-term goals. Your plan should also include an action plan to address market volatility, which should be developed well in advance of a turbulent market. Having a market-volatility plan will help you to set realistic goals and appropriately manage your return expectations.
Invest regularly. It may not seem intuitive, but investing regularly—even during market downturns—can help to reduce your overall costs. Dollar cost averaging is one of the best ways to invest regularly, since you’re investing a fixed amount on a fixed schedule, regardless of how the markets perform. Investing regularly can also have intrinsic benefits: It encourages discipline and may also ease the anxiety of daily market fluctuations.
Diversify. If you’ve ever heard the saying, “Don’t put all your eggs in one basket,” then you already have a basic understanding of diversification. Diversifying your portfolio can reduce risk and volatility if the assets have little or no correlation to each other.
Investing in mutual funds is one way to achieve portfolio diversification, since mutual funds are typically a diversified investment. There are also several other ways to diversify and potentially reduce portfolio volatility:
• Within an asset category, such as purchasing different types of mutual funds;
• Among asset categories, such as purchasing stocks and bonds; and
• Outside of the United States, since some markets move opposite to the US stock market.
Put volatility to work for you. Do you think of the glass as half empty or half full? Your perspective can affect the investment decisions you make during market downturns. Investors who view market volatility negatively can make irrational decisions. A down market can be an opportunity for you to build your portfolio and take advantage of lower unit costs.
Stay invested. You are probably anxious during times when the value of your investments has decreased. As a result, you may be tempted to move out of the market, sit on the sidelines and wait for the market to rebound. However, since no one knows how the markets will move, how do you know you’re leaving at the right time? Also, how will you know when it is the right time to get off the sidelines and start investing again?
If you have worked with a Financial Advisor, your investment strategy was developed to help you meet your long-term goals. Timing the market could potentially jeopardize your financial plan—and your future goals.
Be patient. There will always be uncertainty in the markets; market volatility is a natural part of the investment cycle. Although it may take some time, markets do rebound.
In the meantime, call your Financial Advisor to help you develop an action plan for market volatility and continue to focus on your long-term investment goals rather than short-term market moves.
Graeme H. Patey is a Financial Advisor located in Cleveland, Ohio and may be reached at
216-523-3015 or http://fa.smithbarney.com/graemepatey.
Asset allocation and diversification strategies do not guarantee a profit or protect against loss.
A periodic investment plan such as dollar cost averaging does not assure a profit or protect against a loss.
International stocks are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.
Mutual fund investments are subject to market risk, including the possible loss of principal. They are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges and expenses, and other information regarding the mutual fund and variable annuity contract and its underlying investments, which should be carefully considered before investing. Prospectuses are available through your Financial Advisor or at www.smithbarney.com. Read the prospectus carefully before you invest or send money.
Smith Barney does not provide tax or legal advice, and it is important to consult with a tax or legal advisor before investing.
© 2008 Citigroup Global Markets Inc. Member SIPC. Securities are offered through Citigroup Global Markets Inc. Smith Barney is a division and service mark of Citigroup Global Markets Inc. and its affiliates and is used and registered throughout the world. Citi and Citi with Arc Design are trademarks and service marks of Citigroup Inc. and its affiliates, and are used and registered throughout the world. Working WealthSM is a service mark of Citigroup Global Markets Inc. Citigroup Global Markets Inc. and Citibank are affiliated companies under the common control of Citigroup Inc.
INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT GUARANTEED • MAY LOSE VALUE
Can Vending Machines
The markets don’t always behave the way we’d like them to: Geopolitical turmoil, natural disasters, interest rates and world events can have a profound effect on market movements. If recent market volatility has you concerned about the economy, you are not alone; this is a confusing time for many investors. Some have decided to stay the course, while others are sitting on the sidelines waiting for the market to rebound. However, since no one can predict how the markets will perform, it’s important to develop an investment strategy that can help you stay on the right track to meeting your long-term financial goals. Here are some strategies that you can implement today, that may help to manage risk during these uncertain times.
Work with a Financial Advisor. There are a lot of do-it-yourself investment resources available to investors today. However, none of those resources can replace the experienced, personal service a Financial Advisor provides. A Financial Advisor can offer an understanding of your complete financial picture, not just your investments. Additionally, in periods of market volatility when you need the most support, a Financial Advisor can provide:
• Access to important decision-making research and information;
• Ongoing monitoring of your investment portfolio, while anticipating your changing needs; and
• A comprehensive market-volatility plan.
Have a plan. Developing a financial plan is one of the best ways to meet your long-term goals. Your plan should also include an action plan to address market volatility, which should be developed well in advance of a turbulent market. Having a market-volatility plan will help you to set realistic goals and appropriately manage your return expectations.
Invest regularly. It may not seem intuitive, but investing regularly—even during market downturns—can help to reduce your overall costs. Dollar cost averaging is one of the best ways to invest regularly, since you’re investing a fixed amount on a fixed schedule, regardless of how the markets perform. Investing regularly can also have intrinsic benefits: It encourages discipline and may also ease the anxiety of daily market fluctuations.
Diversify. If you’ve ever heard the saying, “Don’t put all your eggs in one basket,” then you already have a basic understanding of diversification. Diversifying your portfolio can reduce risk and volatility if the assets have little or no correlation to each other.
Investing in mutual funds is one way to achieve portfolio diversification, since mutual funds are typically a diversified investment. There are also several other ways to diversify and potentially reduce portfolio volatility:
• Within an asset category, such as purchasing different types of mutual funds;
• Among asset categories, such as purchasing stocks and bonds; and
• Outside of the United States, since some markets move opposite to the US stock market.
Put volatility to work for you. Do you think of the glass as half empty or half full? Your perspective can affect the investment decisions you make during market downturns. Investors who view market volatility negatively can make irrational decisions. A down market can be an opportunity for you to build your portfolio and take advantage of lower unit costs.
Stay invested. You are probably anxious during times when the value of your investments has decreased. As a result, you may be tempted to move out of the market, sit on the sidelines and wait for the market to rebound. However, since no one knows how the markets will move, how do you know you’re leaving at the right time? Also, how will you know when it is the right time to get off the sidelines and start investing again?
If you have worked with a Financial Advisor, your investment strategy was developed to help you meet your long-term goals. Timing the market could potentially jeopardize your financial plan—and your future goals.
Be patient. There will always be uncertainty in the markets; market volatility is a natural part of the investment cycle. Although it may take some time, markets do rebound.
In the meantime, call your Financial Advisor to help you develop an action plan for market volatility and continue to focus on your long-term investment goals rather than short-term market moves.
Graeme H. Patey is a Financial Advisor located in Cleveland, Ohio and may be reached at
216-523-3015 or http://fa.smithbarney.com/graemepatey.
Asset allocation and diversification strategies do not guarantee a profit or protect against loss.
A periodic investment plan such as dollar cost averaging does not assure a profit or protect against a loss.
International stocks are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.
Mutual fund investments are subject to market risk, including the possible loss of principal. They are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges and expenses, and other information regarding the mutual fund and variable annuity contract and its underlying investments, which should be carefully considered before investing. Prospectuses are available through your Financial Advisor or at www.smithbarney.com. Read the prospectus carefully before you invest or send money.
Smith Barney does not provide tax or legal advice, and it is important to consult with a tax or legal advisor before investing.
© 2008 Citigroup Global Markets Inc. Member SIPC. Securities are offered through Citigroup Global Markets Inc. Smith Barney is a division and service mark of Citigroup Global Markets Inc. and its affiliates and is used and registered throughout the world. Citi and Citi with Arc Design are trademarks and service marks of Citigroup Inc. and its affiliates, and are used and registered throughout the world. Working WealthSM is a service mark of Citigroup Global Markets Inc. Citigroup Global Markets Inc. and Citibank are affiliated companies under the common control of Citigroup Inc.
INVESTMENT PRODUCTS: NOT FDIC INSURED • NOT GUARANTEED • MAY LOSE VALUE
Can Vending Machines
Mar
21
What are three stocks that are worth investing in? Two others that should be avoided?
Filed Under investing | Comments Off
questionandanswers asked:
I would like to know about two or three stocks that are worth investing in, preferably both stable and fluctuating ones (in that there are either big gains or big losses)?
I would like to know about two or three stocks that are worth investing in, preferably both stable and fluctuating ones (in that there are either big gains or big losses)?
and, i would like to know a few stocks to stay away from that would not allow me to buy low and sell high.
Bass Fishing Tackle
Mar
19
A Legitimate High Yield Investment With Low Risk?
Filed Under investing | Comments Off
John Hanlin asked:
Investors today want to know: “Where can I find a legitimate high yield investment with low risk for my money?”
Many people have seen their retirement savings wither in the current global financial calamity. And, as a result, we are seeing an exodus of investors out of the stock markets and into the safest money investments they can find to shelter what’s left of their lifetime savings until the economy stabilizes.
We’re seeing many investors now moving their money into investments such as Certificates of Deposit and U.S. Treasury Securities whose returns likely won’t keep up with the rate of inflation because of their very low yields. But, people are settling for these low returns versus the risk of losing more in the stock markets or elsewhere. They’re scared and many don’t know where else to turn.
The truth is that investors today don’t have to settle for these sub-inflation or break-even investments. They can still find legitimate high yield investment opportunities with very low risk to principal if they just knew where to look.
So, here’s the problem: most people don’t know where to look to find legitimate high yield investment opportunities. They are so ’shell-shocked’ from their portfolio and stock market declines that they’re scared, cynical and skeptical when presented with opportunities that claim to be “high yield investments”. And, they turn a deaf ear to investments that they might have welcomed in better times.
But who can blame them? We’re seeing a resurgance of Ponzi schemes and other scams, identify theft, etc.
Fact #1: You can still find legitimate high yield investment opportunities today with low risk to your principal.
Fact #2: Many of the richest people in the world today, made their fortunes when the economies hit rock bottom. These investors chose to look for opportunities when the masses focused on despair. They recognized how stock markets and economies are cyclical by nature and they looked to the future.
So, let’s see if we can’t look to the future and spot a legitimate high yield investment opportunity staring at us right now:
Two realities that are public knowledge in America today are:
1) There is a limited amount of undeveloped, raw land available in the U.S.
2) The U.S. population is projected to grow +29% between 2000-2030.
In other words: “We’re making more people, but we can’t make any more land.”
What does this information tell us?
i) We will have approximately 82,000,0000 more people living in the United States by the year 2030. (According to the U.S. Census Bureau.)
ii) These new people will need new homes, new schools, new shopping, new businesses and new communities to support them.
So, what legitimate high yield investment opportunites does this present?
Let’s talk about “Raw Land Development”. Ever heard of it? If not, you should seriously consider learning about it right now.
This situation, of limited supply (limited amount of raw land) and growing demand (population growth) is a fundamental economic illustration of what happens when demand for a product is greater than its supply. By definition, the product becomes more valuable. Yes?
Well, the products, in this situation, would be the new homes, new schools, new shopping, new businesses and new communities needed to support the growing demand created by population growth.
This poses a tremendous opportunity for what legitimate high yield investment? How about “Raw Land Development”, the essential ‘building blocks’ of new community construction.
In December of 2004, the highly acclaimed Washington DC think-tank, Brookings Institution commissioned a research study conducted by Virginia Tech University. This study was titled “Toward a New Metropolis: The Opportunity To Rebuild America.”
According to the study, to accomodate the projected population growth, America’s future raw land development and construction needs require approximately 209 BILLION square feet of new land development between 2000 - 2030.
Estimated cost? $25 TRILLION. And, the bulk of this massive raw land development and construction expansion will be spent in 10 major metropolitan regions, which the Brookings study calls ” Megapolitans”. Plus, the study tells us exactly where these 10 Megapolitans are located.
By the way, this is happening right now!
How can investors profit from this legitimate high yield investment opportunity?
1st) By educating themselves asap about Raw Land Development
2nd) By researching the Brookings Institution study findings.
3rd) By investing in the companies that will be driving this new raw land development growth.
Raw Land Development Investment Benefits:
A) Legitimate High Yield Investment:
A proven investment option is to invest as a ’silent investor partner’ with a professional raw land development company. The key is finding seasoned, reputable companies in this field.
Professional raw land development companies or ‘land developers’ often seek outside investors as silent partners to raise capital for their raw land development projects. Silent partners have no involvement in the day-to-day management activities of the business, but they share in the net profits of the project. In addition to profit sharing, some professional raw land developers also will pay high yield interest to their silent partners for the use of their money until the principal is returned.
B) Legitimate Low Risk Investments:
It is regular practice for professional raw land development companies to back their silent investor partners’ principal investments with project assets (e.g. the value of the land itself). This means that in the event of a developer default (heaven forbid), the project assets can be sold and the silent investors can recoup some or all of their principal plus any net profits.
In addition, for added security, silent investor partners are commonly placed in First Position for the raw land development project’s assets and revenue. This means that in the event of a developer default, if the project’s assets must be sold, the silent partners will be the first in line to be paid. (Similar to when a bank holds the mortgage or first deed on a home.)
IMPORTANT NOTES:
I. Per industry averages, a professionally managed raw land development project will increase the value of raw land by 2-5 times its original cost. In other words, a professional land developer will typically sell a completed raw land development project for 200-500% more than they paid for it originally as undeveloped, raw land.
II. It is widely held that real estate investment has created more riches than any other form of investments. Taking that one step further: Raw Land Development is the most profitable form of real estate.
III. For these reasons, professionally managed raw land development investment has been the cornerstone for many of the world’s wealthiest investors’ investment portfolios for generations.
Until recently, participation in raw land development projects was restricted to the very rich due to the exorbitant minimum investments required (often $1 Million +).
However, this has changed in the past several years, with some professional land developers dramatically reducing their minimum investment rquirements to allow smaller-scale investors to now participate in these legitimate high yield investments.
Pellet Stove Comparisons
Investors today want to know: “Where can I find a legitimate high yield investment with low risk for my money?”
Many people have seen their retirement savings wither in the current global financial calamity. And, as a result, we are seeing an exodus of investors out of the stock markets and into the safest money investments they can find to shelter what’s left of their lifetime savings until the economy stabilizes.
We’re seeing many investors now moving their money into investments such as Certificates of Deposit and U.S. Treasury Securities whose returns likely won’t keep up with the rate of inflation because of their very low yields. But, people are settling for these low returns versus the risk of losing more in the stock markets or elsewhere. They’re scared and many don’t know where else to turn.
The truth is that investors today don’t have to settle for these sub-inflation or break-even investments. They can still find legitimate high yield investment opportunities with very low risk to principal if they just knew where to look.
So, here’s the problem: most people don’t know where to look to find legitimate high yield investment opportunities. They are so ’shell-shocked’ from their portfolio and stock market declines that they’re scared, cynical and skeptical when presented with opportunities that claim to be “high yield investments”. And, they turn a deaf ear to investments that they might have welcomed in better times.
But who can blame them? We’re seeing a resurgance of Ponzi schemes and other scams, identify theft, etc.
Fact #1: You can still find legitimate high yield investment opportunities today with low risk to your principal.
Fact #2: Many of the richest people in the world today, made their fortunes when the economies hit rock bottom. These investors chose to look for opportunities when the masses focused on despair. They recognized how stock markets and economies are cyclical by nature and they looked to the future.
So, let’s see if we can’t look to the future and spot a legitimate high yield investment opportunity staring at us right now:
Two realities that are public knowledge in America today are:
1) There is a limited amount of undeveloped, raw land available in the U.S.
2) The U.S. population is projected to grow +29% between 2000-2030.
In other words: “We’re making more people, but we can’t make any more land.”
What does this information tell us?
i) We will have approximately 82,000,0000 more people living in the United States by the year 2030. (According to the U.S. Census Bureau.)
ii) These new people will need new homes, new schools, new shopping, new businesses and new communities to support them.
So, what legitimate high yield investment opportunites does this present?
Let’s talk about “Raw Land Development”. Ever heard of it? If not, you should seriously consider learning about it right now.
This situation, of limited supply (limited amount of raw land) and growing demand (population growth) is a fundamental economic illustration of what happens when demand for a product is greater than its supply. By definition, the product becomes more valuable. Yes?
Well, the products, in this situation, would be the new homes, new schools, new shopping, new businesses and new communities needed to support the growing demand created by population growth.
This poses a tremendous opportunity for what legitimate high yield investment? How about “Raw Land Development”, the essential ‘building blocks’ of new community construction.
In December of 2004, the highly acclaimed Washington DC think-tank, Brookings Institution commissioned a research study conducted by Virginia Tech University. This study was titled “Toward a New Metropolis: The Opportunity To Rebuild America.”
According to the study, to accomodate the projected population growth, America’s future raw land development and construction needs require approximately 209 BILLION square feet of new land development between 2000 - 2030.
Estimated cost? $25 TRILLION. And, the bulk of this massive raw land development and construction expansion will be spent in 10 major metropolitan regions, which the Brookings study calls ” Megapolitans”. Plus, the study tells us exactly where these 10 Megapolitans are located.
By the way, this is happening right now!
How can investors profit from this legitimate high yield investment opportunity?
1st) By educating themselves asap about Raw Land Development
2nd) By researching the Brookings Institution study findings.
3rd) By investing in the companies that will be driving this new raw land development growth.
Raw Land Development Investment Benefits:
A) Legitimate High Yield Investment:
A proven investment option is to invest as a ’silent investor partner’ with a professional raw land development company. The key is finding seasoned, reputable companies in this field.
Professional raw land development companies or ‘land developers’ often seek outside investors as silent partners to raise capital for their raw land development projects. Silent partners have no involvement in the day-to-day management activities of the business, but they share in the net profits of the project. In addition to profit sharing, some professional raw land developers also will pay high yield interest to their silent partners for the use of their money until the principal is returned.
B) Legitimate Low Risk Investments:
It is regular practice for professional raw land development companies to back their silent investor partners’ principal investments with project assets (e.g. the value of the land itself). This means that in the event of a developer default (heaven forbid), the project assets can be sold and the silent investors can recoup some or all of their principal plus any net profits.
In addition, for added security, silent investor partners are commonly placed in First Position for the raw land development project’s assets and revenue. This means that in the event of a developer default, if the project’s assets must be sold, the silent partners will be the first in line to be paid. (Similar to when a bank holds the mortgage or first deed on a home.)
IMPORTANT NOTES:
I. Per industry averages, a professionally managed raw land development project will increase the value of raw land by 2-5 times its original cost. In other words, a professional land developer will typically sell a completed raw land development project for 200-500% more than they paid for it originally as undeveloped, raw land.
II. It is widely held that real estate investment has created more riches than any other form of investments. Taking that one step further: Raw Land Development is the most profitable form of real estate.
III. For these reasons, professionally managed raw land development investment has been the cornerstone for many of the world’s wealthiest investors’ investment portfolios for generations.
Until recently, participation in raw land development projects was restricted to the very rich due to the exorbitant minimum investments required (often $1 Million +).
However, this has changed in the past several years, with some professional land developers dramatically reducing their minimum investment rquirements to allow smaller-scale investors to now participate in these legitimate high yield investments.
Pellet Stove Comparisons
Mar
18
What are the criterias to be seen before investing ain a company?
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Mystery asked:
i ama a university studenst aand i have a project where we have to analyze ourselves as an investor or a shareholder
What are the things i should see before investing in a company??
Pls help asap
thanks in advance
Steps To Performing Cpr
i ama a university studenst aand i have a project where we have to analyze ourselves as an investor or a shareholder
What are the things i should see before investing in a company??
Pls help asap
thanks in advance
Steps To Performing Cpr
Mar
17
Investing?
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Victoria. asked:
About how much money should I have set aside if I want to buy stock and make any money at it? Also is it possible to end up owing money? Not just losing what I invested but owing? Ok thanks I know it sounds dumb but I have hardly any Idea about this any help is appreciated.
thanks
Pellet Stove Comparisons
About how much money should I have set aside if I want to buy stock and make any money at it? Also is it possible to end up owing money? Not just losing what I invested but owing? Ok thanks I know it sounds dumb but I have hardly any Idea about this any help is appreciated.
thanks
Pellet Stove Comparisons
Mar
17
Should You Invest in Mutual Funds?
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James Leitz asked:
Bill Gates probably doesn’t invest in mutual funds (funds), maybe because most of his money is tied up in Microsoft stock. Warren Buffet made his billions by managing investments, so he does not need their help, either. But, if you have money to invest and don’t really know how to invest and manage an investment portfolio, you should consider investing in mutual funds. Millions of average investors do.
Keep in mind that mutual funds are designed for folks who want professional investment management at a moderate cost. These are not short-term investments, but rather are for people with longer-term investment horizons. Once you have cash reserves in the bank for short term needs like emergencies, you are ready to invest.
Should you invest in mutual funds? If one or more of the following apply to you, you probably should.
If you want to accumulate a nest egg for retirement, give these investment packages consideration. For example, if you have a typical 401k plan at work, most of the investment options available to you are mutual funds.
If you decide to open a traditional IRA or Roth IRA, consider going with a major mutual fund family. This will give you a wide array of investment options, from safe and conservative to aggressive and growth oriented.
If you want to start slow and learn how to invest as you go, you should invest in mutual funds. For example, you can set things up so that $100 a month automatically flows from your checking account to a couple of mutual funds within a fund family.
If you want to invest in stocks and/or bonds, but don’t know how to invest in them, join the crowd and do it the sensible and easy way with funds.
If you have a lump sum of money to invest from a retirement plan, a CD that matured or from an inheritance, look no further. For example, if you leave your job where you had money in a 401k, you can move it and avoid taxes and penalties with a direct rollover to a mutual fund family.
If you are retired and want to earn a higher return with relative safety, try bond funds in addition to money market funds. When you want to receive a monthly income, they will send you the amount you specify.
If you want an investment in real estate, oil & gas, or gold the easy way, invest in mutual funds and let them deal with the details.
It doesn’t matter if you are young or old, rich or of modest means, conservative or aggressive as an investor. You need an investment portfolio that contains a variety of investment types. Unless you really know how to invest and can manage your own stocks, bonds, and money market securities…you should invest in mutual funds.
Finally, if you don’t know much about investing…you’re probably a red-blooded American. As a financial planner I worked with folks from all walks of life. Few knew how to invest on their own, so I often recommended mutual funds.
Glade Scented Candles
Bill Gates probably doesn’t invest in mutual funds (funds), maybe because most of his money is tied up in Microsoft stock. Warren Buffet made his billions by managing investments, so he does not need their help, either. But, if you have money to invest and don’t really know how to invest and manage an investment portfolio, you should consider investing in mutual funds. Millions of average investors do.
Keep in mind that mutual funds are designed for folks who want professional investment management at a moderate cost. These are not short-term investments, but rather are for people with longer-term investment horizons. Once you have cash reserves in the bank for short term needs like emergencies, you are ready to invest.
Should you invest in mutual funds? If one or more of the following apply to you, you probably should.
If you want to accumulate a nest egg for retirement, give these investment packages consideration. For example, if you have a typical 401k plan at work, most of the investment options available to you are mutual funds.
If you decide to open a traditional IRA or Roth IRA, consider going with a major mutual fund family. This will give you a wide array of investment options, from safe and conservative to aggressive and growth oriented.
If you want to start slow and learn how to invest as you go, you should invest in mutual funds. For example, you can set things up so that $100 a month automatically flows from your checking account to a couple of mutual funds within a fund family.
If you want to invest in stocks and/or bonds, but don’t know how to invest in them, join the crowd and do it the sensible and easy way with funds.
If you have a lump sum of money to invest from a retirement plan, a CD that matured or from an inheritance, look no further. For example, if you leave your job where you had money in a 401k, you can move it and avoid taxes and penalties with a direct rollover to a mutual fund family.
If you are retired and want to earn a higher return with relative safety, try bond funds in addition to money market funds. When you want to receive a monthly income, they will send you the amount you specify.
If you want an investment in real estate, oil & gas, or gold the easy way, invest in mutual funds and let them deal with the details.
It doesn’t matter if you are young or old, rich or of modest means, conservative or aggressive as an investor. You need an investment portfolio that contains a variety of investment types. Unless you really know how to invest and can manage your own stocks, bonds, and money market securities…you should invest in mutual funds.
Finally, if you don’t know much about investing…you’re probably a red-blooded American. As a financial planner I worked with folks from all walks of life. Few knew how to invest on their own, so I often recommended mutual funds.
Glade Scented Candles
Mar
16
Are Investors still investing in start ups despite the economy?
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Texan31 asked:
I was wondering whether or not investors or Venture Capitalist are still investing dollars into start up companies despite the recession? I would imagine they are much more careful with their funds, but has there been a significant drop in VC backed start ups?
I was wondering whether or not investors or Venture Capitalist are still investing dollars into start up companies despite the recession? I would imagine they are much more careful with their funds, but has there been a significant drop in VC backed start ups?
We have already closed our series A investment, but may be looking for more funding, and I’m not too sure how much money is out there.
Thanks for any help
Painted Kitchen Cabinets
