Archive for February, 2013

10 Tips for First-Time investors Part 1

Welcome to our 2 Part Blog series on Tips for the 1st time Investor.  The way and the means that people are investing today have changed due to the economy being, well, precarious, so we decided to put together a Blog that gives the new investor some great Tips to help them get started.  So without further ado here we go!

  1. When investing, always consider where your passions lie and try to invest in something that follows those passions.  For example if you truly adore wine then investing in wine may be an excellent idea.  If you’re a teetotaler it may not. When you’re searching for an investment keep your passions in mind and you’ll be fine.
  2. Knowing when you will need the money should determine your stock choices.  Say, for example, that you will be purchasing property in 5 years. If so, you’ll need an investment that pays quicker so that you can make what you need in that time.  If, on the other hand, you’re looking to fund your retirement and that won’t happen for 20 more years your choices will be quite different.
  3. The willingness to leave your money alone for a long time is a good one when it comes to investing because, frankly, the short term changes in the market can be a killer. If you don’t want to lose occasionally you may want to avoid risky short term investments.  Indeed, long term almost always pays better if you can wait. (And that’s the catch.)
  4. Look at the world as your investing oyster and don’t put all your investments in the US only.  The fact is, many countries are on the upswing but aren’t the place that many people would invest because of fears of what will happen there.  Still, investing in technology overseas is a great idea and usually an investment winner.  Don’t put all your eggs into a single American basket.
  5. Understand what you’re investing in. Unless you have an excellent advisor who you trust implicitly don’t invest in something that you don’t understand.  If you ask questions and they aren’t answered to your liking you should walk away.  The last thing that you want is to invest in something that you’re unable to understand because you won’t know if and when it’s time to stay in or get out.

Those are the first 5 of 10.  Come back and see us soon for 6 through 10 and use the info well.  See you soon!

More Investment Tips for 2013

If you’re looking for more Investing Tips for 2013 we have a few of them here for you today so, without further ado, let’s get started. 

If you’re looking at mega-caps be very selective.  Many appear to be ‘cheap’ and even tempting but the majority come with some serious strategic challenges and will continue to languish as they did last year.  Small and mid-sized cap equities should perform well however. In the cyclical sector you should look at quality growth stocks, recovery stocks and mid-cap stocks.

If you’re expecting a recovery in the West it would be a good idea not to bank on it too heavily.  Experts expect growth to be between 2 and 2.5% this year at best, especially due to the fact that the US is being held back by declining North Sea output, a secular decline in many types of financial services and an over dependence for European exports. Non-Euro countries should see reasonable growth this year however even as Euro countries spiral out of control and peripheral European countries struggle.  Even though growth is slow in developed markets however they should still see increases in corporate profits.

If you’re keen on investing in resource equities you may be onto a good idea.  The companies that have raised their output, secured excellent terms on new resources and avoided excessive acquisitions are the ones that will be returning cash back to their investors in the form of buy-backs and dividends.  One of the newest keys to investing in this sector has been stockpiling.

Emerging markets will hold some opportunities this year as they recover from the last 2 years of underperforming.  Indeed they are undervalued in relation to global equities on a PE ratio discount of 14% when both have comparable earnings growth.  The majority of these are relatively expensive, to be sure, but on a long term basis really do look very appealing financially.  The fact still remains however that emerging markets are one of the few bright spots in the bond market globally and they offer gaining currencies and falling yields.

A number of other Tips that we believe you should keep in mind are;

  • Equity market growth will be modest in 2013. Don’t expect highs or lows.
  • Inflation is still going to be a problem and will stay around 2%.
  • Gold will most likely rise due to the failure of positive real interest rates to return.
  • Conventional bonds will be outperformed by inflation-indexed bonds in 2013.
  • Avoid government bonds in developed markets.
  • A bull market will more than likely not return in 2013 but rather in 2014.
  • Invest long-term rather than short.

Quick and easy to digest, yes?  We hope that these Tips have been helpful and we invite you back soon for more of the same.

Long-Term Investments Tips for 2013

 

Most financial experts (of which I am not) will tell you that long-term investments can be the best and the safest that you can make.  There are certainly those that would argue this point but, rather than do that, we will just accept the fact that long term investments can be solid investments and, with that in mind, present some excellent Tips that you can use in 2013 to make sure yours are solid.

Hot tips can sometimes burn you. You should always be wary of anything that’s ‘hot’ in the investing world.  Do your due diligence and research before you take anyone’s advice, even a friend’s. If it looks ‘too good to be true’ then it probably is.

Confucius say ‘all will have a bad day once in a while’. What this means is simply that, when you suddenly have a bad day investment-wise, or even a string of them, there’s no need to panic. If you’ve researched and chosen solid investment opportunities daily fluctuations don’t really matter.

Stay the course.  If you have a clear strategy and your investments are doing well don’t change it.  It’s only if there is a very clear sign that your strategy isn’t working that you should even consider changing it lest you lose everything you’ve already gained. Remember, patience is a virtue in life as well as in investing.

Think around the box.  In the UK there is a very strong market for ‘alternative’ investments. Things like fine wine and local art, for example, can diversify your portfolio and even make investing a bit of fun. There are plenty of opportunities out there if you do a little searching and ask some questions.

The taxman cometh, but no worries. The sad truth is that many investors stress over lowering the amount of money they make so that they don’t pay as much in taxes.  We think the opposite is true.  Make as much as you can and let Uncle Sam take his cut.  In the end you’ll do better and have less stress.

A number of other Tips that you should keep in mind are these;

Long term investing means that your money won’t be available for quite some time.  If you’re going to need access to said money they may not be your best choice.

Long term investments can pay handsomely. The key is to have the patience necessary to let your money grow for many years.

Investments like fine wine are only good long-term investments if you don’t drink them.

Penalties for taking money out of long-term investments can be high.

These Tips should help you to make some great decisions this year about your long term investing goals.  Good luck with them and please make sure to come back soon for more.

 

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