Showing posts with label Bonds. Show all posts
Showing posts with label Bonds. Show all posts

Thursday, October 26, 2023

The Intricacies of Investment: 3 Tips for Starting an Investment Portfolio

Investing may seem intimidating, but it’s critical to long-term financial success. Investing provides a way to grow your money over time so that it can work for you. 

While a risk is associated with investing, there are also many rewards. Starting an investment portfolio can lay the foundation for a better financial future. 

However, before you get started, you should consider a few things. In this blog post, we’ll review three tips for starting an investment portfolio.

Understand Your Investing Goals

Before you start investing, you need to understand your financial goals. What do you hope to achieve with your investments? Are you looking to save for retirement, purchase a property, or build a nest egg? Knowing what you want to achieve will guide your investment decisions.

Additionally, you should consider your risk tolerance. This refers to the amount of risk you are willing to take on. Risk is inherent in investing, but the degree of risk varies between different investment types. Usually, higher risks correspond with the potential for higher returns. 

However, high returns also come with a higher risk of loss, that is it's more likely to be a loss than a return. Understanding your risk tolerance will help you choose the right investments that align with your comfort level.

Diversify Your Investments

Diversification is important in any financial investment portfolio. It means investing in different types of assets, such as stocks, bonds, real estate, or commodities. This spreads out your risk so that if one type of investment does not perform well, the others can help cushion the blow.

It’s also important to diversify within each asset type. For example, if you invest in stocks, consider investing in stocks from different sectors. 

This reduces your exposure to any one industry. Diversification helps to ensure long-term returns and mitigates against short-term market corrections.

Start Small

When it comes to investing, starting small is the way to go. Investing a small amount regularly over a long period will have a greater impact than investing a large sum once. 

This is because investing regularly in small amounts averages out the cost of investment, which can result in a less volatile and more stable returns. It also helps to minimize the risk from market fluctuations.

Starting small also allows you to become familiar with the investment process without putting too much at risk. Over time, as your confidence grows, you can increase your investments.

Seek Professional Advice and Practice

Achieving a solid financial future through investing isn't something you have to do alone. It's a journey that can be significantly enriched by seeking guidance from investment professionals. 

They can provide valuable insights, help you understand market dynamics, and guide you in making informed investment decisions for your finances. 

Additionally, financial investment practice is key. The more you invest, the more comfortable you'll become with the process and the better your understanding of the nuances of the market.

Final Thoughts

Investing is a journey filled with opportunities to learn, grow, and build a stronger financial future. Achieving a successful start involves key factors such as comprehending your investment objectives, diversifying your portfolio, commencing with smaller investments, and seeking professional guidance. 

Investing is not a get-rich-quick scheme but a long-term commitment that requires patience, planning, and understanding. Make informed decisions and adjust your strategies as needed. 

With the right approach and mindset, you'll be on your way to building a robust investment portfolio that can help you achieve your financial goals.

Tuesday, August 8, 2023

Investing for Resilience: The Trends of Different Strategies

Investing for resilience means choosing investment strategies that can withstand economic fluctuations and/or market volatility. As a senior, you might be thinking about the ways in which you can safeguard your finances, ensure stable returns for your retirement years, and stay ahead of inflation.

Investment strategies such as precious metals, fixed-income investments, stock market investing, real estate investments, and mutual funds and ETFs can help you protect your nest egg and ensure that your investments remain profitable over a longer period of time. 

In this blog, we will dive into the different investment strategies you can use to make your portfolio more resilient and stay on top of the latest trends for each strategy.

Understanding the Basics

Before we dive into the different investment strategies, it's important to understand what an investment strategy is. Investment strategies help you define how you will invest your money, how much of your assets you will allocate to each type of investment, and how you will manage the risk associated with each strategy. 

The different types of strategies you can pursue range from conservative (low-risk) to aggressive (high-risk) approaches. 

Depending on your investment goals, risk tolerance, and overall financial situation, you can develop a customized investment strategy that fits your needs and helps you build wealth over time.

Precious Metals

Investing in precious metals, such as gold, silver, platinum, or palladium, is a popular strategy for building resilience, particularly during times of economic and political uncertainty. Precious metals are considered a safe haven asset because they tend to hold their value and appreciate in price over time. 

They also provide a hedge against inflation and a store of value that can protect against currency devaluation. Specialist places like Fisher Capital Group will help you purchase coins, bars, exchange-traded funds (ETFs), or even mining stocks. 

However, remember that investing in precious metals carries some risks, such as fluctuations in spot prices, market liquidity, and storage costs.

Bonds and Fixed-Income

Bonds and fixed-income investments, such as treasury bills, corporate bonds, municipal bonds, and certificates of deposit (CDs), are other popular investment strategies for stabilizing your portfolio. 

Bonds provide a fixed rate of return and income that is typically higher than savings accounts or money market funds. They are less volatile than stocks and can offer protection against interest rate risk and inflation. 

However, investing in bonds also carries some risks, such as interest rate changes, credit risk, and inflation, so it's important to stay aware and consider consulting with a professional to help you understand bonds.

The Stock Market

Stock market investing is a more aggressive investment strategy that can help you capture higher returns but also comes with higher risk. The stock market is a collection of publicly traded companies that issue stocks or shares to investors. 

Investing in stocks allows you to own a part of a company's equity and benefit from its potential growth and profitability. However, stock prices can be volatile and unpredictable, and investing without a clear understanding of market trends or company fundamentals can result in high losses. 

So it's important to diversify your stock portfolio, invest in both domestic and international markets, and have a long-term investment horizon. If you are looking for expert advice, there are many stock market advisors that can help guide the process.

Real Estate

Real estate investments are a tangible asset class offering unique benefits, such as passive income, tax advantages, diversification, and appreciation potential. 

Real estate investments can take many forms, such as rental properties, vacation homes, commercial properties, or real estate investment trusts (REITs)

Keep in mind that investing in real estate can also be complex and require more upkeep, funding, and maintenance than other investment strategies. 

It's important to have a comprehensive understanding of the real estate market, local trends, and property management before investing in real estate, and be sure to have a plan for when the scene becomes too involved, like hiring a property manager for your rental properties or talking with an expert on where your investments should be.

Mutual Funds and ETFs: Diversification Made Easy

Finally, mutual funds and ETFs are investment vehicles that offer a convenient way to diversify your portfolio and access multiple asset classes without managing individual securities. 

Mutual funds and ETFs pool money from multiple investors and invest in a range of stocks, bonds, and other securities. They offer low fees, easy accessibility, and professional management. 

It's important to choose funds that fit your investment goals, match your risk tolerance, and align with your financial strategy. Always be sure you are making informed decisions to lower the risk for your money.

Investing for resilience means choosing a mix of investment strategies that can help you protect your finances during times of economic or market turbulence. 

Precious metals, fixed-income investments, stock market investing, real estate investments, and mutual funds are all valid options for building resilience and creating wealth over time. It's important to carefully consider your investment goals, risk tolerance, and financial situation before committing to any investment strategy. 

Always seek the advice of a professional financial advisor before making investment decisions. Remember, investing is a lifelong journey, not a sprint. Stay informed, stay diversified, and stay resilient.

Saturday, March 27, 2021

How to Start Investing: And What to Invest in

Investing money is a very reliable way to build wealth over a period of time. However, the whole process can seem very daunting if you’re just getting started. 

The good news is that many wealthy investors too started with a level of skepticism, but they somehow got to learn the right steps to take, implemented them, and became successful. Today, you’re going to learn the basic steps you need to take to start investing, and what to invest in, so keep reading!

Determine how much you want to invest

Many investment options today allow people to invest low or high amounts of cash. Therefore, it makes sense to begin by deciding how much you’re willing to invest before choosing your methods. Of course, the amount of money you want to invest should be informed by your investment goal.

If you are looking to secure your retirement, for instance, you should generally aim to invest between 10% and 15% of your yearly income for retirement. Ideally, regardless of your goal, you have to consider your time horizon and the amount of cash you need, and then sort of work backward to break the amount into weekly or monthly investments.

Know your options

The most important part of investing is understanding every instrument available and the level of risk it carries. Some of the most popular investment options you’ll want to consider include the following:

Stocks. These are shares of ownership in a company, and you buy them for a share price. When the company profits, you too profit.

Bonds. These are loans you give to a government entity or a company. Before the organization pays you back, you get interest.

Index funds. These are investment vehicles that track market indexes. You can use them to balance your investment portfolio.

Mutual funds. These are collections of investments that allow you to buy a diverse assortment in a single transaction instead of picking individual bonds and stocks.

As a beginner, you should look to invest in these instruments because they are profitable and generally safe.

Pick a strategy

The next thing you should do is pick an investment strategy based on your saving goals. For instance, if you’re planning on securing your retirement, and your goal is more like two decades away, you can invest most of your money in stocks. If you don’t like the process of picking specific stocks, you can go for mutual funds or index funds.

If your goal is short-term, and you need the cash within a shorter time-frame, such as five years, you can consider Bank certificates of deposit (CDs) and short-term bond funds. 

If you’re more comfortable waiting to see your money and investing long term, then a DST 1031 property investment may be a good idea.

Alternatively, you can skip this step by opening an investment account through a qualified Robo-advisor. They’ll help you build your investment portfolio and look after it.

Understand your risk tolerance

As you may already know, not all investments are successful. Every investment comes with a certain level of risk, although it’s usually correlated with returns. Before you invest, you need to find a balance between maximizing the returns and getting a comfortable risk level.

For instance, if you are willing to lean more towards forfeiting high returns to reduce risk as much as possible, you can go with bonds. 

They are very low risk, and they yield relatively low returns of around 2-3%. On the other hand, you can go with stocks to enjoy the annual returns of about 10% per year, but be ready to incur higher risk.

As you can imagine, there is a huge difference in risk within the broad categories of bonds and stocks. For instance, Treasury bonds are very low-risk investments, and they usually have low-interest rates. 

That means that the reward is low. Conversely, a high-yield bond comes with a higher risk of default. Although it’s important to keep risk at the back of your mind, you shouldn’t get over-concerned about it, according to Forbes.

The best way to approach this is using a Robo-advisor to create an investment plan that suits your financial goals and risk tolerance.

If you’ve just decided to start investing, congratulations! You’ve already completed the first step. What you need to do now is follow the next steps above to get started.

Tuesday, February 26, 2019

A Guide to Start Investing

Every wealth management advisor will start with one very basic principle: you need to save money--and the earlier, the better. We don’t think it’s necessary to convince you of the wisdom in that.

Here’s the problem: for most of us, investing is much harder than it sounds. There are already too many demands on our money: student loans, rent, car repairs, and groceries, just to name a few. Buying a new alternator before you go on that road trip is a much higher priority than saving up for retirement.

When you’re living on a shoestring budget, how can you invest without making major sacrifices in your life?

Well, here are some ways that you can start investing NOW - not when your car is paid off, not when you’ve finally gotten around to setting a budget, not when retirement gets close enough to scare you straight. You can put these principles into action without feeling like you’re living like a pauper.

Making Short-Term Investments

Sometimes we have expendable cash for a little while, but we’re anticipating big costs in the future, so locking away that cash into a long-term investment account feels crazy. However, there’s a better option than letting it sit in a savings account with a return of 1% or less: short-term investments! 

When it comes to short-term investments, it’s better to focus on low-risk options, since there’s not as much time for the investment to self-correct. However, even low-risk, low-return investments will do you a lot more good than a savings account. 

Talk to your investment broker about short-term investment options, or check out some easy online investment software or apps (like Acorn, Robinhood, and Betterment) that will let you play with short-term projects.

Setting Up Automatic Deposits to Investment Accounts

This is one of the most reliable and time-honored habits of smart investors. Automatic deposits into a retirement account will allow you to invest without feeling the pain of conscious deductions. If you invest before even counting that money as part of your monthly income, it doesn’t have the same pang. 

Use Extra Savings Techniques to Grow Your Investment

We all have a few things that happen throughout the year that just feel like bonus money. Any time you have that boost, consider turning it into investment, instead of an indulgence that will depreciate the moment you buy it.

  • Tax returns: We’re in a dangerous place when we start considering tax returns money that’s owed to us, because we never know precisely how much it will be. Consider depositing the whole amount as soon as you get it, or treat yourself to something you really want or need, but turn over any surplus to savings.
  • Yearly bonuses at work: If your company does yearly bonuses, think about it as a gift towards your retirement instead of fuel for yet another Holiday impulse-buy.
  • Rebates: Some are factored into the price of something we buy, but some rebates come as a surprise.
  • Sales: Did you just save 30 bucks on that jacket that you really wanted to buy? What a windfall! But most of us will forget about those savings, or spend them on something we don’t need because we look at it as free money. Put that free money to work instead.
  • Resolution savings: Have you ever gone without a certain treat for a certain amount of time, due to Lent, or a health resolution with a friend? When my grandmother wanted to quit smoking, I promised to give up chocolate to support her. Even more than the health bonus that this brought, I realized that I was saving up to $15 a month by cutting an unhealthy habit out of my life. It’s not much, but it does add up! We all need our indulgences, but the next time you make a health resolution, consider the savings in cash. It will keep you motivated because it’s a positive benefit that you can see right away. To keep from rewarding yourself by falling straight back into your favorite treat, put that money towards a rainy day instead.

Bonus: Educate Yourself, Over Time

As you can see, it’s fairly simple to start investing. All you need to do is put your best foot forward to start getting involved. The key, after that, is to continually get better and better at it. 

This comes with continuously educating yourself about what your accounts are doing, and what you can do in the future to improve your portfolio. With time, a clearer understanding of things like fund transfers, cryptocurrency, and common vs preferred stocks will feel like 2nd nature to you.

In Summary!

So, next time your dad guilts you about planning for retirement, or you read an article that makes you feel way behind in money matters, don’t beat yourself up about it. Just put these three methods to work and watch your savings accumulate without feeling the pain.

Sunday, December 15, 2013

4 Good Tips To Secure A Stable Retirement

There has been a lot of talk these days about retirement funds dwindling and the fact that many people may be forced to work late into their 70s. The truth is that those who plan ahead for their retirement and make intelligent investment decisions should have no trouble retiring when they feel the time is right. Here are four good tips that should ensure that you have a stable and financially secure retirement.

1. Invest in Stocks, Bonds and/or Mutual Funds

Investing is the best way to ensure that you have enough money to retire at a time of your choosing. While you may save up a lot of money through 40-50 years of working, investing gives you a chance to double or triple that sum by the time you retire. By conducting bond market research, buying stocks that you believe will rise in price, and researching the best mutual fund options, you will give yourself a great financial platform in retirement. Some prefer to invest in stocks and bonds independently. However, if you do not trust your knowledge of the markets, you may be better off letting a mutual fund handle the specifics of investing.

2. Keep Your Mind Sharp

Even if you have retired from your job, it is important to keep your mind fresh and stimulated every day. Find an intellectual activity that suits your personality. Whether it is reading a book, learning a new language, solving puzzles and riddles, or becoming a history buff, exercising your mind every day will help you stay healthier and livelier much longer.

3. Exercise Regularly

Keeping your body in the right shape is just as important as exercising your brain. While you are probably not going to be completing any marathons when you are 65 or 70, it is always good to walk a few times a week or head to the gym. Exercising will help you maintain a healthy weight, lower blood pressure, and keep your muscles and bones in tip top shape as you age.

4. Explore New Places and Things

Many people enter retirement and lose their purpose in life. No longer having to work everyday, they can become lost and confused in the adjustment period. Make exciting plans for retirement, such as visiting new continents, exploring new areas in your city, and meeting new people. Sometimes when we become adults and start having to spend all of our time working, we lose touch with some of the activities and hobbies that make us happy. Retirement is the perfect time to dust off your old guitar, or read that novel you always talked about reading. Not only will these activities broaden your horizons, but they will keep you excited and in good spirits.

Retiring can be daunting and overwhelming at the best of times, which is why you do not want to be unprepared. Secure your financial future, and make plans to keep you occupied during your retirement years. That way, retirement will be the next phase of your life, instead of being the beginning of the end.

Thursday, June 27, 2013

Are You Missing Out by Not Knowing About Wealth Management?

Finance (Photo credit: Tax Credits)
In this day and age, it’s never been so important to know who to make the most of your money. Maximising your cash flow and taking care of your finances is advisable when the economy is good, but in these hard times it’s become an absolute necessity. Yet, large numbers of people still remain in the dark when it comes to assessing and managing their wealth.

Why Should We Look After Our Finances?

Looking after your finances has numerous benefits, including giving your wealth the opportunity to grow. On the other hand, not taking care of your finances can have devastating consequences. For this reason alone, it’s advisable that you get clued up about the best way to take care of your money, and the best way to start is by learning about wealth management.

How Does Wealth Management Work?

In its simplest form, wealth management is the process by which financial planning, advice, management and investment are all corralled together under the same heading, with one purpose in mind – to maximise the assets of the client in question. However wealth management is much more complicated than this, and requires significant time, knowledge and effort to be applied correctly. If wealth management is carried out properly by an experienced financial advisor, this can result in a significant return for their client. If you’d like to find out more about how wealth management can benefit you directly, you should visit for more detailed information.

Which Areas Does Wealth Management Cover?

Wealth management is a large and complex practice which can be effectively utilised across multiple financial products. These may include:
  • Pensions and Annuities 
  • Savings and Investments 
  • Stocks, Bonds and Shares 
  • Portfolio Management

The specific type of wealth management you may need will be entirely dependent upon which financial products you already own, and your proposals for future investments and savings. If, for example, you are coming up to retirement age, you may need advice on how to maximise the value of your pension. Alternatively, if you are a young professional who has just received a promotion, you may be interested in investing your newly increased salary across various different trading options.

Wealth management services also differ between locations. Wealth management companies in London, for example, will be more likely to offer a broader range of international investment services than a smaller, regional company. Clients with small portfolios and limited resources often prefer the personal service of a smaller company. However clients with large portfolios and a significant amount of capital would be wiser to choose a larger, international company, which is more likely to be able to diversify their investments across a wider range of options. 

Advice and Information on Wealth Management

If you’re interested in the idea of investing in wealth management, or simply want more information but don’t know where to begin, it’s always advisable that you get in direct contact with a professional wealth management services provider, such as Sanlam. Their financial experts are always on hand to help you make a decision about whether or not wealth management is right for you.

Tuesday, March 12, 2013

Confused About Retails Bonds? Learn How to Start Investing

Interest Rates
Interest Rates (Photo credit: 401(K) 2013)

With interest rates on savings accounts still rooted to rock bottom, many people are looking for alternative places to invest their cash to get a decent return.

One such option is a retail bond. Not everyone will have heard of retail bonds and they may well sound like a complicated financial instrument but in reality are relatively straightforward. They allow the individual to control the level of risk they are exposed to.

If you think you might be interested in 
investing in retail bonds and want to know more, read on to find out more.

Retail bonds: the basics

A retail bond is simply a way of investing your money in a certain company, which not only returns your capital at the end of an agreed period, but also pays you interest along the way.

Cash flow can be tough for a company to raise and when it comes to growth and expansion, an injection of capital is needed. One way of getting this is to create a series of bonds that investors can buy. The company offers a guaranteed interest rate in return for the use of the cash for the agreed period. The concept really is that simple.

The amount of interest offered will depend on the size and stability of the company. Large organisations such as Tesco might offer bonds with an interest rate of around 5-6% whilst a smaller, less secure business might have to give an investor around 10% in order to be sufficiently attractive. As a general rule, the higher the rate of interest, the more risky the investment is.

How do I buy a bond?

If you already have an investment portfolio, the chances are that you have either a wealth manager or a stockbroker who executes deals on your behalf. They will be able to purchase a retail bond upon your instructions.

If you are new to investing, it is possible to set up an account with a stockbroker on an 'execution only' basis, which means you will not be receiving advice or management services. This will be the cheapest way for you to get your foot onto the ladder.

When you are ready to purchase your bond, there are several factors you need to ensure you have carefully considered. How long you want your money to remain invested for, the level of risk you are willing to accept and the return you are hoping to receive are all key and will help to determine your choice of company to purchase the retail bond from.

Once you think you may have identified a suitable target - research, research, research. A company that offers a higher interest rate will be at a greater risk of going bust or defaulting on the debt, so think very carefully before ploughing your money in.

To summarise, retail bonds are very accessible to the general public even though they may not be the most well-known way to invest. However, with detailed planning, research and clear goals, it is possible to secure a much better return on your money than with a bank.

Samantha Wood is an experienced finance writer but wishes she had more money to invest. To keep up to date with the latest opportunities and news, Samantha uses sources such as 
Investing In Retail Bonds.  

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