Financial Investment For Newbies

Investment refers to savings or deferred consumption, which is made by the individual to risk his savings in the hope to gain some returns. Investment is viewed differently in terms of economics and finance. In terms of finance, the goal of investment is to produce future cash flows and in terms of economics, investment is the production of goods for a period which are not consumed but utilized for further production.

Why investment?

The most important reason to invest your savings is to beat the inflation, to achieve financial goals and to plan for retirement. Inflation means paying more for the same goods and services in future. When trying to achieve financial goals like buying house or paying education you need your money also to earn along with you in order to beat inflation. You also need to invest in order to fund your needs when you become old and not capable of earnings (i.e.) plan for your retirement.

How to invest?

The type of investment option to choose depends on what you are trying to achieve. Those were the days when the marriage or education of child were expensive but were affordable and investment avenues of that days earned you a good rate of return. So they were manageable with minimal planning. But these days with rise in inflation and with lower rate of return has worked against parents in their mission for a better quality of life for their children. Commencement of planning at an early stage of the life is an important step in the process. Investment avenues like equity funds that offer tax-free returns over longer time frames to manage child’s education/marriage or retirement.

Choosing the right investment product is a difficult task for investor. This task is even more difficult when it come to senior citizens as they will have limited amount. Life will become miserable if they does not have regular source of income. As a result senior citizen should do the balancing act between the return and risk of his investment. For senior citizen, the risk element should be low as much as possible.

For individual investor the objective is to maximize the return on their investment. An individual can maximize return at cost of high risk. The investment options available to investor are equities, fixed income securities, debt, foreign securities, real estate and e-currencies. While investing the constraints of the government rules and regulations and that of investor financial capability and availability of time should be kept in mind.

Financial Investments: Know When to Quit

When it comes to trading there is always a time to buy and a time to sell. This is how smart investors know when to keep their money allocated to a stock, and when they need to take that money out and allocate it elsewhere, to prevent a market loss. The active trader’s “time exit strategy” is a modern expression of that message. What is a time exit strategy? It is the guideline that sets the outer time boundary for the trading commitment you make when you open a position that is, the maximum time that you plan to maintain your trade exposure. Of course, if a trade reaches its price target before the time exit point, many traders would book their profits by closing their position. Or, in addition to that, if the trade hits a price driven stop loss signal, they might sell out of the position early and limit their losses. Either way, the first point to keep in mind is that the time exit barrier is merely a guideline, but it is a very helpful guideline to follow when your financial investments are on the line.

The next important step is determining when your time exit strategy in particular will be. That will depend on the kind of trading strategy that you are following. If your strategy anticipates rapid movement, your time exit point may be minutes, if not only seconds away. This applies to riskier investments whose prices may fall at any given moment. However, time exit points can also be set for the end of the day, or even some number of days in the future – it all depends on the expectations that you had in mind when you initially started the trade. This will bring us to the second key point. Once you have your time exit point set and already determined, your step after this will be to consider what you will do when you reach this point, if you ever do reach this point. You can automatically terminate any trade or investment at your own time exit deadline once you have predetermined this. If you have strong confidence in your profit price goal and stop loss protection levels, you may decide that reaching the time exit point without reaching one of these levels indicates the security has been trading sideways and you should thus exit the position when the time indicator is reached.

However, many traders use their time exit signals simply as indicators. As a result, they re-evaluate their position in the light of the current market when they reach a time exit signal and determine whether to maintain and extend the time frame or close the position. This is a very smart method in determining whether to stay with a fund or not because it allows you to set an initial goal and then, later, re-evaluate the goal based on the changes in the market. Remember, a comprehensive sell strategy is essential for maximizing your opportunity to capture profit or limit loss. Any time you are investing or trading stocks or anything else, you must go for some stock investing advice to know when the right time for you to quit will be. If you do not determine this beforehand, it will be harder and more confusing for you to be able to decide when you should quit. You may let it sit for too long, and we all know that “time is money.” If you did not set a goal to sell at a certain point, you may miss that point one evening and end up losing a massive amount.

Financial Investments

Financial investments are of many types and are mainly used for wealth generation and savings protection. People choose to invest in property, stocks, mutual funds, and bank accounts. Stock markets, currency markets, and futures trading markets are high yield markets, but they also carry an equal amount of risk with the investments. Fixed deposits and savings accounts offer security but they do not offer high yields. Life insurance policies and annuities are also types of investment plans that people can contribute to for future security.

Stock trading involves buying shares of companies at a particular time with the hope of reselling it later at a higher price. The profits or losses incurred are determined by these price changes, which are in relation to the initial price at which the stock was bought. Stock trading generally deals with buying a right to a corporation’s profits and assets. Speculation in stock trading is on the rise with the availability of technology and services. As stock trading can also be performed over the Internet, stock market traders can compare prices, discuss the stock market scenario, and post their queries online regarding trading strategies.
Life insurance polices can be sold for cash and this process is known as life settlement. Life settlements are now a necessary point to consider in the estate planning process for seniors. Before the introduction of life settlement option, there was no option for people above the age of sixty-five, who had an unwanted life insurance policy. They could lapse, cancel, or surrender their policies to the insurance company for the surrender value.

Real estate or property investment is considered the safest option in investment and the property owner can make profit by either renting or reselling. Investors can approach real estate agents to assess all their requirements and objectives in order to find the best rates. Real estate agents are well versed in the rates of various areas; they help customers find a suitable mortgage.

Investors can choose their investment type according to their preferences and expectations.

Why I Do Not Buy Wine As a Financial Investment

I am not a wine expert, but I know a thing or two about investing. I’ll try to give my 2 cents worth of advice when it comes to investing in fine wine as a financial investment, not an investment in future drinking.

The basics of investing in wine is like all other investments, it all comes down to supply and demand.

Supply side:

The great thing about wine is that the supply side is easy to understand and it is always decreasing. It is decreasing because when you look at a wine the relevant thing to look at is a specific wine from a specific vintage. The supply of this wine will always be decreasing since there will always be bottles of the wine consumed.

Demand side:

The demand for wine is close to impossible to understand. I will start by listing what I think are the major drivers for fine wine demand:

1. Scores: What scores the major wine critics gives the specific wine in the specific vintage. The major critics are Robert Parker, Allan Meadows, Jancis Robins and Stephen Tanzer

2. The Economy: Wine is a luxury good, and as for all goods, the demand is always more volatile for luxury goods. It’s worth mentioning that fine wine is a global market. Economical growth in Asia and South America can balance out economical down turns in Europe and the US

3. Speculation: Stiglitz has a simple, but to my understanding, very accurate definition of when you have a bubble. “the basic intuition is straightforward: if the reason that the price is high today is only because investors believe that the selling price will be high tomorrow-when “fundamental” factors do not seem to justify such a price-then a bubble exists.” It is not a good time to invest in fine wine when you hear your friends, who are not experts in fine wine and the drivers behind the prices of fine wine, say that investing in wine is a good idea

Why I do not invest in wine for financial purposes:

1. I do not have enough knowledge about wine
2. I do not have enough knowledge about the economical future of Asia and South America to understand whether the growth here will outweigh the down turn in European and American economies
3. I do believe that there might be tendencies indicating a bubble
4. I do not have the perfect storage facility for my wines. If you don’t the wine will be worth nothing
5. Fakes: One factor that I haven’t mentioned is the existence of fake wines. The Rudy Kurniwan case is a great example of this.

3 Tips to Securing the Best Financial Investment Software

Financial investment software is that which scours real time market data to find high probability investing opportunities. Thousands and millions of traders globally are now using this relatively new technology to make the kind of money that they want from the market because it enables you to trade in your free time without knowledge or experience of analytics required – all of that is done for you so that you can focus on the investing aspect.

I’ve tested and regularly used enough financial investment software options to know that all things aren’t equal with each program in this niche. Therefore I’ve compiled 3 essential tips which have helped me spot the phonies and find the truly legitimate and effective programs out there, so here is what to know to get the best financial investment software.

1 – Penny Stocks – I’ve found that the best financial investment software targets penny stocks. The cheapest investments offer the greatest profit potential, so being able to have a strong penny stock picker on your side is invaluable. When I say targets I mean exclusively targets penny stocks, don’t go for a program which tries to do it all because honestly there is a great deal more volatility associated with cheaper stocks given their cheap prices, so it’s a different process altogether.

2 – Customer Support – Forget about flashy websites, good customer support tells you everything you need to know about a publisher which in turn says a great deal about their financial investment software. If they don’t have phone support, send them an email in which you show interest in their program, ask any questions if you have any, but the main point is the see how long it takes them to get back if they do at all. You’d be surprised at how many publishers simply ignore emails like that.

3 – Guarantee – Finally, it’s essential that the financial investment software you go with comes with a money back guarantee on it. No legitimate publisher will offer anything less, so if you don’t see that guarantee that should raise some big red flags right away. More importantly you can use a money back guarantee to test any program you’re interested in firsthand which sounds complicated but it’s as easy as getting the program then sitting back and receiving it’s first few stock picks then check their subsequent performances. If you’re anything less than satisfied, get your refund and be on your way. The truth is that most publishers want you to try their financial investment software in this way if they’re serious about their program.