Category: Investing

What Are The Short And Long Term Risks Of Investing In Land As A Real Asset Investment?

Land assets are quite capable of yielding strong investment returns. But risks are everywhere – know what they are, and work with professionals if you can.

Without risk there is no reward, correct?

Investors understand the equation well, and financial planners help guide them to achieving the right balance of risk. Not only should the rewards be worth the worry, but favourable returns on investment should be well-timed to the investor’s needs. What’s clear today is that investing in real assets such as land – at a time of exceptionally high demand for residential real estate – seems like a good risk.

Alas, it is still quite possible to get it wrong. While some of history’s greatest wealth has been built from buying, owning and selling land and developed real estate, there are all kinds of circumstances – and bad ideas – that create unnecessary risk. In addition, there is the dynamic of time, whether the investor expects gains in the short, medium or long run. Consider the following that could occur to the land investor:

Landowners unwilling to sell at a reasonable price – Land that is designated for agricultural use is worth much less than when approved for residential or commercial purposes. An existing landowner may be aware of that valuation difference, and get greedy when pricing the land for sale. Seasoned property fund managers would know the level of price tolerance to make asset growth feasible – and be willing to seek land investment opportunities elsewhere.

Real estate is very reactive to economic downturns – The drop off in home sales and homebuilding in the UK after the 2008 financial crisis is a recent and clear lesson on how broader economics play a large role in real estate investments. Property investors who sold in 2007 saw great asset growth during the last of the bubble years, while those who were forced to sell in 2009 probably lost quite a bit. This is why shorter-term investments, such as those focused on strategic land development, at least enable the investors to have a clearer picture of market conditions when the development is complete.

REITs – The liquidity of real estate investment trusts make it attractive for the investor who is worried about the aforementioned economic downturns. But because it is traded on the exchanges, a REIT is also subject to even momentary fluctuations of the markets due to unrelated events. Also, due to a regulatory set-up that renders real estate investment trusts unsupervised by the Financial Conduct Authority (FCA), no complaints to this agency can be made, nor can compensation claims can be made with the Financial Services Compensation Scheme.

Ill-advised schemes such as “land banking” – While authorisations by the FCA provide due warning against this, there remain investments in what’s called land banking. This is where plots of land are purchased where planning permission is unlikely due to greenbelt status, remediation expenses on brownfield land, or simply being too small for development at scale.

It makes sense for would-be land investors to engage an independent financial advisor for guidance. A holistic review of an investor’s risk profile can help identify when real estate makes sense – be it through either a REIT, alternative investments in land or buying rental property.

Which Is the Best Day to Invest Your Money?

Many people have a strong belief in the power of planets, stars, comets, etc. That is why they wait for the auspicious time and moment, for practically everything that they do. Similarly, they have inauspicious periods too, during which all important decisions and purchases get deferred.

This is true for their investments too.

Well, my domain knowledge does not encompass the heavenly bodies and their likely positive and negative impact on our lives. As such, I am not the right person to comment on these so-called “astrologically favorable” days.

But yes, based on my many years of experience on this planet earth, I have identified some of the “financially highly fortunate” days to profitably invest our money.

I share these with you, so that you too can turn lucky with your investments.

The day we have ample time

I would strongly advise you against taking any investment decision if you are hard pressed for time. Mistakes multiply when you can’t give your undivided attention and time to study the investment that you are considering. And these errors and omissions often prove to be very expensive. In fact, the best trick up the fraudsters’ sleeves is to offer you schemes that close in a day or two; leaving you with no time to think. So, make sure that you make your investments on the day you are totally relaxed, with no time constraints.

The day we have ample information

The most irresponsible, unwise and foolhardy thing to do would be to invest your money in a product with only a limited knowledge about it. If fact, in my opinion, you would be doing the greatest disservice to your family’s well-being if you do so. Moreover, nowadays unlimited and free information is available on the internet. Hence, there is simply no excuse to not getting all the relevant details about any investment before committing to it. Many losses can easily be avoided by getting the right inputs. As I once mentioned… Know or No!

The day we have ample trust

As with any vocation, you will come across both good and bad bankers, brokers, agents and advisors. Given that your hard-earned money is at stake, you can’t afford to be naive and gullible. It would be very dangerous to blindly trust anyone in such matters. However, there is no magic formula to verify someone’s trustworthiness. It only comes with time. So build your relationships slowly and with small amounts. We have to manage our money for many decades. So investing a few years in building honest and reliable alliances, would undoubtedly be the best investment.

These are my best days to invest my money carefully, judiciously and objectively. And I see no reason whatsoever, why they can’t be your auspicious days too. Good Luck.

Becoming A Sports Investor

To began, it is extremely crucial to approach sport investing with realistic expectations and goals. A sports Investor simply needs to register a winning accuracy rate of 52. 4% to be successful and stay profitable. While the majority eventually don’t succeed in hitting the 52% threshold, it is a task that can be done if you’re dedicated and disciplined. To be more precise, if your intention is to become an effective sports investor, you will simply have to follow basic rules which comprise proper money management and being able to pick winners.

If you’re only interested in sports investing as a way to get rich quick then I would suggest you to look elsewhere because that will most likely not happen for you. To be frank with you, there’s no short cut in this industry and all the professionals will tell you sports investing is more like running a marathon than a sprint. Patience and long termed planning is necessary to come out on top. The idea is to win just enough bets to slowly build up your account on a month to month basis. As long as you’re in profit at the end of each month or week, nothing else should really matter.

By looking hard enough on the internet, you will come across more than a few handicappers who have great winning percentage when it comes to betting on sports, but their downfall is their inability to control the amount of money they are placing on each bet. This is where money management is so essential if you wish to always stay profitable and not lose money. No matter how good the odds looks, you must stay discipline enough to bet the same amount of money on every games and this amount should be no less or no more than 2% of your total bankroll. That surely means that if you have $1000 on your betting account, the amount of money you should place on each bet is $20.

The hardest part in becoming a successful sports investor is to understand how to correctly pick winners consistently. For this, you will need to do your homework and properly handicap each games that fits into your betting strategy.

When it comes to handicapping or analyzing games to bet on, there are more than a few ways to go about it effectively. I may go more into details about specific handicapping strategies but that may be for the next article since this one is getting a bit too long. But the bottom line concerning handicapping games is that you need to stay inform about the specific games you believe offers you the best chance for success.

Top Investment Strategies For Today’s Investor

Are you looking for the best INVESTMENT STRATEGIES? In spite of the fact that it may not be so clear from the volumes of materials that have been composed on the subject, contributing is an advanced investment strategies starting with one year then onto the next. Gone are the times of essentially putting resources into a term store that permits you to exacerbate your investment installments and throughout the span of ten years you will have multiplied your vital.

As a consequence of falling premium rates in the course of recent decades, investment strategies have moved and have ended up more “advanced.” These days, the following three investment strategies might be utilized to improve your investment portfolio’s returns over the short-, medium- and long haul.

High Risk Investing

One of the best INVESTMENT STRATEGIES is high risk investing. Stretching your investment portfolio to incorporate non-customary sorts of investments is essentially obligatory in today’s premium nature’s domain. Confronted with low “ensured” rates, speculators are needing to take a gander at possibly higher danger investments, for example, values to revel in the development they need in their portfolio or other pay delivering investments, for example, land on the off chance that they need to appreciate more noteworthy month to month salary.

Look Into Securities

After the business inconveniences of 2007, 2008 and early-2009, numerous speculators have come back to the essentials of value contributing which states that putting it is most shrewd to put resources into values that pay profits. Not just are such organizations frequently better promoted and can create enduring measures of money to pay those profits, yet they are more averse to come up short given their administration in a specific industry or division. With a closer eye on danger, speculators have put resources into more-robust organizations as well as in organizations that pay wage as a major aspect of the value offerings.

Make Constant Contributions

On the off chance that nothing else, knowledge of the past has reliably taught us that we would be better off today on the off chance that we had contributed all that we claimed at the utter bottom of the business amendment. This will dependably be the situation. The issue is that we are not exceptionally decently prepared to focus when that bottom really happens.

One approach to keep away from this is through standard investment commitments, whether it is part a protuberance whole throughout the span of a 12 month period or contributing a preset sum with each paycheck; contributing cash all the time permits even the most traditionalist financial specialists to pay a “normal” cost for their investments.

The deciding result is that over the long haul they will have paid considerably short of what on the off chance that they had attempted to time the business sector with less incessant investment commitments.

In the event that you think you have what it takes to contribute on your own, think about utilizing a rebate online intermediary. Most expenses will be significantly lessened with any firm when you do the leg work and examination yourself, even with the reduced representatives.

Best Forex Brokers – Why You Need Them

There are few fields in the economic sector that are shrouded in as much mysticism as that of trading in stocks and shares. However even more mysterious and yet the largest and most lucrative segments of the same seems to be currency trading. The approximate $ trillion being traded daily in the Forex markets dwarfs the combined $99 billion being traded in all of the world’s stock markets combined.

Forex trading is still in its nascent stages in many countries but is fast becoming a popular investment option. Currency trading can be an extremely profitable business venture, but it is not for everyone. There are many variables involved in the trade whose dynamics have to be understood by anyone who is venturing forth into this field. To become a successful trader you need to first understand what the currency market is all about. Complicated technical systems and information overload can make you slow and confuse you right from the start, making you lose money instead of making your profits grow. In order to succeed you will need to focus on a set of simple trading strategies that you can implement without hesitation. You will also need to have a thorough understanding of the different variables that may affect the position of your stocks in the market, become pro active, spot an opportunity and act on it wisely.

Or you can simply hire the best Forex brokers to manage the investment decisions for you! These professionals will provide you with the best tips and trading information to ensure that your strategies do not fail. Their expert knowledge and understanding of the market has enabled them to ensure that their clients receive accurate market insights for a more profitable and less risky trading experience. As long as you have an expert Forex broker by your side to guide you in your currency trading venture, you will always be safe from the risks of involved in this type of investments. Their expert advice will help you make the best decisions, spot the best opportunities and make the most profit from your venture.

This is why seeking professional help at the right time can help you make the best investments. Hiring the best Forex brokers is a task that every currency trader looks to take up but making the selection often calls for careful screening and research. A thorough background research of a broker, a detailed assessment of his track record, his working style current financial status, experience of past clients and service quality – all these are points to consider. These factors can be assessed in many ways – directly meeting with the broking firm, online checks on their website and third party review sites and a search on social media platforms. The decision to choose the best broker to manage your account will of course be a tough one but once you manage to do it right, most of your trading woes will vanish away completely.

Five Excellent Investment Characteristics

We favor investments that are low cost, tax efficient, diversified, liquid, and simple. Many investors often run into trouble when they invest in things that do not have these five characteristics. Investments with these five characteristics have been profitable over time, but typically are not very exciting. There is generally not a “hot story that you need to act on now!” associated with them. The financial services industry generally does not favor these type of investments because they generate very little profit from them. We are in the business of helping to maximize the wealth of our clients, not the financial services industry. Keep in mind that this list of investment characteristics is not comprehensive. Other factors to look for in investments might include attractive valuation, low correlation to your other holdings, a nice dividend yield or interest income, a tilt towards areas of the market that have produced higher returns such as value stocks, an appropriate risk level for you, etc.

Low Cost. We typically invest in low cost index based funds and exchange traded funds (ETF’s). The funds we invest in have an average expense ratio of only.30% per year. The typical actively traded equity mutual fund has an average expense ratio of 1% or more. With investment funds, the best predictor of future relative performance is the expense ratio on the fund; the lower the better. Hedge funds typically have annual expense ratios of 2% plus 20% of any profits earned. Some variable annuities and permanent life insurance “investments” can have annual expenses of 2% or more. By keeping a close eye on the costs of our investments, we can save our clients significant amounts of money each year and help them achieve higher returns over time (all else being equal). With investment products, you don’t get better performance with a higher cost product, in fact you typically get worse performance.

Tax Efficient. Our investments (index based funds and ETF’s) are extremely tax efficient and they allow the investor to have some control over the timing of the taxes. These types of funds have low turnover (trading activity), which is a common characteristic of tax efficient investments. We recommend avoiding mutual funds with high turnover due to their tax inefficiency. After the recent big increase in the U.S. stock market, many active equity mutual funds have “imbedded” capital gains of as much as 30%-45%. If you buy those mutual funds now you may end up paying capital gains taxes on those imbedded gains even if you didn’t own the fund during the increase. ETF’s typically do not generate long and short-term capital gain distributions at yearend, and they do not have imbedded capital gains like active mutual funds. Hedge funds are typically tax inefficient due to their very high turnover. In addition to investing in tax-efficient products we also do many other things to help keep our client taxes minimized such as tax loss harvesting, keeping our turnover/trading low, putting the right type of investments in the right type of accounts (tax location), using losses to offset capital gains, using holdings with large capital gains for gifting, investing in tax-free municipal bonds, etc.

Diversified. We like to invest in diversified funds because they reduce your stock specific risk, and the overall risk of your portfolio. Bad news released about one stock may cause it to drop 50%, which is horrible news if that stock is 20% of your whole portfolio, but will be barely noticed in a fund of 1,000 stock positions. We tend to favor funds that typically have at least a hundred holdings and often several hundred holdings or more. These diversified funds give you broad representation of the whole asset class you are trying to get exposure to, while eliminating the stock specific risk. We are not likely to invest in the newest Solar Energy Company Equity Fund with 10 stock positions, for example. We don’t believe in taking any risks (such as stock specific risk) that you will not get paid for in higher expected return.

Liquid. We like investments that you can sell in one minute or one day if you decide to do so, and those which you can sell at or very close to the prevailing market price. With liquid investments you always (daily) know the exact price and value of your investments. All of the investment funds we recommend meet this standard. We don’t like investments which you are locked into for years without the ability to get your money back at all or without paying large exit fees. Examples of illiquid investments would be hedge funds, private equity funds, annuities, private company stock, tiny publicly traded stocks, startup company stock or debt, illiquid obscure bonds, structured products, some life insurance “investments,” private real estate partnerships, etc. We prefer investment funds that have been around for some time, are large in size, and have high average daily trading volumes.

Simple. We prefer investments that are simple, transparent, and easy to understand. If you don’t understand it, don’t invest in it. All of our investments are simple and transparent; we know exactly what we own. Complicated investment products are designed in favor of the seller, not the buyer, and usually have high hidden fees. Examples of complicated and non-transparent investments that we generally avoid are hedge funds, private equity funds, structured products, some life insurance “investment” products, variable annuities, private company stock, startup company stock or loans, etc. “Make everything as simple as possible, but not simpler.” -Albert Einstein.

We believe most investors should have the majority of their portfolio invested in things that have these five excellent characteristics. By doing so you will avoid plenty of mistakes, negative surprises, and risks along the way. In addition, we believe your after tax investment returns will likely be higher over long periods of time. Of course not every smart or good investment will have all of these characteristics. For example, income producing real estate property is illiquid (and often not diversified) but can be an excellent long-term investment if purchased and managed properly. Owning your own business is illiquid and not diversified but can be an excellent way to build wealth as well. We believe these five investment characteristics become even more important as you enter retirement, since at that point you may be more focused on reducing risk and preserving your wealth than building it, and you may need the liquidity to spend and gift part of your wealth during retirement. These five excellent investment characteristics can be a good screening device for possible investments and good factors to think about when investing.

Automated Trading With MetaTrader 4

The MT4 platform supports automated trading, or system trading. Automated trading involves developing an objective set of rules for trade entries and exits, and programming the rules in the platform’s proprietary language (MQL4 in this case) so that the platform can handle all of the associated analytical and trading processes. Perhaps the biggest advantage of automated trading is the ability to remove some of the emotion from trading. Since these systems can trade completely mechanically based on the predetermined rules of a trading plan, dealing with losses or second-guessing a trade entry will not affect system performance. Another significant advantage to trade automation is that the trades are automatically executed with extremely fast reaction times.

An automated trading system must clearly identify buy, sell, stop-loss and profit-target rules. In other words, the system must identify the conditions under which a trade will be initiated (whether a long or a short trade), when the trade should be closed at a loss, and when the trade should be closed at a profit.

The various benefits of automated trading make it a helpful tool for traders, but it is important to remember that certain aspects of automation can fail. For example, if the connection to the Internet or data server is lost, the trader must recognize the error and manually fix the problem. If left unnoticed, a position could unintentionally be left naked in the market (without stop-loss or take profit orders).

MetaEditor is MT4’s interface used for creating, editing and compiling program source codes written in MetaQuotes Language 4 (MQL4), MT4’s proprietary programming language. An Expert Advisors Wizard is a built-in feature of the MetaEditor that assists in the creation of new MQL4 programs. Once a program has been written, it must be compiled in MetaEditor. After successful compiling, the executable program code can be launched and/or tested in the MT4 Terminal. Traders can create several distinct programs using the MetaEditor:

  • Expert Advisors – programs in the terminal that have been developed in MQL4 and used for the automation of analytical and trading processes. Some platforms refer to these as strategies.
  • Custom Indicators – programs developed in MQL4 by the user to function as a technical indicator. Custom indicators are intended for analyzing price activity but not for trading itself.
  • Scripts – programs written in MQL4 and intended to perform a single execution of some action. A script can fulfill both analytical and trading functions. Once a script has completed its function once, it automatically stops.

Staying In Control Of Your Stock Investment

The stock market without a doubt appears unstable and volatile. However, it is possible to maintain a firm grip on and make good money in the process. This translates into following the golden rules of trading which will keep you in charge and in control of everything that your investment goes through. The rules are the difference between investors who have positive stock trading tales to tell and those who have negative stories of their trading efforts. It is always helpful to work with a strategy to make stock investment and trading work for you.

Setting your Trading Guidelines for Success

It is one of the very important keys to making it big in the stock market scene. Take the time to learn from mistakes that other investors have made in the past and stay clear from paths that might lead you down the same path. The use of latest market information is an old trick that will always come in handy for you. The use of insightful services such as information provided by newsletters can keep you in the know with good stock trading recommendations that will work for you. When you set limits with your buying and selling, make sure to stick to them at all times. Have your own dos and don’ts to protect your investment.

All kinds of business come with some sort of risks. You will be forced to take risks at some point with your trading to make returns. All you have to do is ensure that you are taking wise risks that will bring you better results than failure in the end. This calls for proper foresight and good planning to avail huge profit opportunities. It should be a simple way of protecting your own capital base any time and day.

When you lay down your trading rules, you will find it very easy to make a decision. This means sticking to the rules at all times without changing your mind. Even during those times you feel under pressure to sell or buy stocks, make sure that you are still within the rules that you have set for yourself. Carefully laid stock trading rules will always aid good decision making opening chances of making money.

Patience is a virtue when it comes to stock trading. Avoid being in a rush to make money. It should be more gratifying to watch your valuable stocks piling and growing. You will need plenty of tolerance and patience and give room to make mistakes and learn from them too. You can find help to be your own boss and to make trading decisions that will bring you good tidings at all times. You can use newsletters for impressive market recommendations to guide you to amazing money making chances. By subscribing, you will receive weekly newsletters with the latest and most profitable recommendations to keep you in control of your stocks and investments without spending too much at it.

Investment Planning – How to Create a Sound Investment Plan?

Investment Planning is one of the important aspects of Financial Planning. The probability of achieving your financial goals depends on how well you plan your investments.

What is Investment Planning?

Investment Planning is the process of placing your monies/funds into proper investment vehicles based on your financial goals and the time frame to achieve them. How much risk you can afford to take is also an important point here.

We normally give more importance to RETURNS than goals. Example – You get a bonus of Rs 1 Lakh then the first question which may come to mind is – ” Can I get 10% returns if this 1 lakh is invested in XYZ product?”

Rather it should be ‘for which goal should I invest this Rs 1 Lakh?’

Investment Planning Process:

So, how should I plan the investments? Is there a better approach?

  • Identify your Financial Goals: These goals can be buying a house, planning for kid’s higher education etc., You can sort them as High, Medium and Low priority goals.
  • Analyze how much risk you can afford : You’re the best judge for yourself to decide on how much risk you can take on your investments. There are certain psychometric tests which can be used to measure your risk taking capacity. The risk profiles can be Aggressive, Medium and Conservative.
  • Identify time frame for your goals: You can divide the goals based on the duration as Short, Medium and Long term goals.
  • Identify financial products: Now based on the above points, identify the financial products which match your requirements.

Investment planning – Important points to ponder upon:

  • Dynamic process – Investment planning and Financial planning is a continuous process. This is not a one time event. Your goals and economic profile may keep changing. Accordingly, accommodate your investments.
  • Realistic – Try to set the goal amounts in a realistic way. Consider various factors like your future income growth, job stability, savings rate etc., The goals should be attainable.
  • Taxation – While identifying investment products, you may check if they are tax efficient or not. But do not buy them just to save taxes. Consider buying them only if they meet your requirements. Also, find out the tax adjusted returns for each product.
  • Re-balancing & Re-allocation – Not only your priorities change over a period of time but also the financial market conditions. Tweak your investment portfolios as per the changing conditions.
  • Tracking & Monitoring – Maintain a portfolio tracker to stay up to date on your investments’ performance.
  • Diversification – Identify investments across the asset classes. Spread your risk. Do not invest in one product category only.

I believe that many of us chase only the returns and unnecessarily complicate the financial lives. Do not just chase returns but chase your Goals too.

Autopilot: Avoiding Complacency With Investing

Imagine you’re piloting a plane coming in for a landing at the end of a long flight. You’re on autopilot because of dense fog enshrouding the runway but everything is going smoothly. You’re descending to 500 feet, 400 feet… You start thinking about how you’ll be able to take a break and spend some nice time with your family. What will everyone want to do? Go for a hike? Have some friends over to grill out back? Or just take it easy and decide later?

Suddenly, at 50 feet, the plane points steeply towards the ground. With only four seconds to touchdown, you immediately grab the control column and pull back to avert a nosedive onto the runway. Your landing is rough, but you avoid a complete disaster.

This incident actually happened with a Boeing 747 traveling from Miami to London in 2000. It was documented in the book How We Decide by Jonah Lehrer for its lessons on decision making. It can just as easily serve as an instruction manual for investors lulled by an extended period of low volatility.

Investors might be forgiven for being less than completely vigilant. After all, it’s been three years since the market has experienced a correction in the summer of 2011. We all have other things to do. In fact, Lehrer notes this is exactly how most people envision autopilot: “People who aren’t pilots tend to think that when the autopilot is on, the pilot can just take a nap”.

Lessons:

Be alert

Just because market volatility has been low for an extended period of time doesn’t mean you can be cavalier about your investments. As Lehrer reports, “You can’t ever relax in the cockpit.” In the case of the fated flight in 2000, it was a software glitch that caused the problem. But it could have been anything. Investing, like flying, is a complicated undertaking and as such it requires ongoing attention. Problems can arise from anywhere and at any time, including at the worst possible time.

Be prepared

Despite several efforts to improve airline safety between 1940 and 1990, Lehrer notes that the percentage of plane crashes due to pilot error remained remarkably steady. Error rates finally declined dramatically with the advent of realistic flight simulators. “The benefit of a flight simulator,” Lehrer explains, “is that it allows pilots to internalize their new knowledge. Instead of memorizing lessons, a pilot can train the emotional brain, preparing the parts of the cortex that will actually make the decision when up in the air.”

Investing too can evoke significant emotional responses which can override cognitive responses and lead to poor decision making. Investors can replicate the experience of flight simulators by being fully aware of possible investment hazards, by familiarizing themselves with what tough situations “feel” like, and by developing constructive responses that can be invoked easily in a time of need.

Collaborate

Prior to the 1970s, Lehrer tells us, “many cockpit mistakes were attributable, at least in part, to the ‘God-like certainty’ of the pilot in command.” Research revealed that important mistakes were often made due to unusual arrogance on the part of a leader and to unusual deference on the part of other team members. In response, an alternative decision making strategy was designed (Cockpit Resource Management, or CRM) to “create an environment in which a diversity of viewpoints was freely shared.”

The main lesson for investors from these developments is to not place too much credence in any one person’s opinion. While wealth advisors and money managers may very well be more attuned to various financial market news, they are human too and can get distracted and make mistakes. It behooves everyone involved to pay attention and to ask questions if things don’t make sense.

Be vigilant

While the autopilot technology and pilot training have both improved substantially, neither is perfect all the time. As in the example of the Miami to London flight in 2000, the autopilot worked beautifully until it didn’t. Fortunately the pilots were paying attention and reacted immediately and appropriately. As Lehrer determines, “the real reason planes are so safe, even though both the pilot and the autopilot are fallible, is that both systems are constantly working to correct each other.”

While many investors would prefer to remain completely uninvolved in the management of their investments, such a course presents multiple opportunities for mistakes to be made. There are good people and good systems that can help, but just like with autopilot, each can fail. You can vastly improve your chances of investment success by keeping an eye on things to make sure they are all working properly.