Archive for September, 2009


Don’t Forget Property Investments in Your Portfolio

Filed Under: Investment Strategy by Bill — 5 Comments
September 6, 2009

When I talk to many people about their retirement portfolios we often talk about their stocks and bonds.  This is because these assets easily build up in a 401k with no load mutual funds or the well commercialized stock market industry having everyone think they should be a trader.  If you ask about which property investments the person owns they usually respond with “my house.”  Unfortunately it’s hard to count your house as a property investment because you’ll be less likely to sell it if you need the money now, it provides no monthly income unless you rent a room out which is invasive to most peoples’ home life, and even though you say you’ll sell your big expensive house in your later years most of you won’t because it has become your home. 

Personally, the property investment advice I prescribe to is 1/3 of my portfolio will be in real estate.  Unfortunately the price of entry for real estate is higher than stocks and bonds so I plan on entering more in my mid game.  Here are a few of the options I’m looking at.

Rental Property Investment

I think rental properties is the most obvious entry point for new investors.  They feel like buying a house like you already have experience with and then you’re just getting someone to pay you what your mortgage cost plus expenses.  If you want to get in with little money you probably will be spending money each month on the upkeep of the property, but you’ll gain when you sell the place in the future or your mortgage gets paid off and you turn way cash flow positive.  The traps many people get into is assuming nothing bad will happen to the rental property and you’ll always have tenants.  I will probably look elsewhere as I don’t deal well with day to day people I don’t know, I tend to work better with business minded people when it comes to money.

Commercial Property Investments

The commercial property investment can be anything from a warehouse you lease to another company to a strip mall.  These are good if you have a business mind because you can work with the company to write a lease that pays you more as they make more, then you have the ability to help them be more profitable.  The bad side of these investments is they are more tied to the general economy like your stocks then residential households.  Don’t consider these if you’re looking for less correlated investments to your stocks and bonds.

Overseas Property Investments

The biggest reason I’m looking to overseas property investments is I want an excuse to own beach front property in the Caribbean.  Unfortunately, so does everyone else.  Overseas investments can be great because they are more overlooked by the global community and as the population expands the thoughts of moving and retiring over seas will become more and more appealing.  The tough part is working with the foreign laws and communities.  For this reason I propose you work with property investment companies to deal with the legal transactions.

Investment property is worth the effort and can provide amazing leveraged returns over the long haul.  Just take your time and research as with any investment before purchasing.  If in doubt keep the transactions simple with a long term mindset as those have the highest probability of a positive outcome.

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Stock Market Investing

Filed Under: Investment Strategy by Ty Coon — Comments Off
September 4, 2009

One of the most unique opportunities our economy provides is the ability to make money through stock market investing. Of all the types of ways to make money, the stock market above all other types of strategies provides anyone with knowledge, experience and capital to leverage it into a fortune sitting in their own house with just a computer and a brokerage account. But, while the opportunity is there, many shy away from investing in the stock market because of the learning curve involved.

Part of the problem is the financial industry. On the one hand, they have made it very easy to trade stocks via the internet, while on the other they have convinced most of the general public that stock market investment strategies are too complicated for the average investor. Today, though that couldn’t be farther from the truth. With the advent of the internet, and the vast array of different trading sites, simulations, financial information and news sources, the playing field has changed so that anyone who decides to study the market and put in the research can profit from it.

But, if you decide to begin investing in stock market trades, do know that it is a skill that you must learn through experience and not by sitting on the sidelines. There is no better way to learn and study the market than with your own hard earned cash on the line. While practicing on paper will help you get a feel for the mechanics of how the stock market works, only real investments can fine tune your real life decision making. Your own money, once you invest it, also comes with pressure to make the right investment decisions. Only under this type of pressure, will your skill be tested to the fullest. Prepare to make mistakes and don’t shy away from them. Keep track of every trade, print out charts of the stock performance and take detailed notes on why you got in and why you got out of the stock. During a downtrend in the market, review your past trades to see how you can improve your performance.

Stock market investments provide one of the best ways to accumulate wealth. Therefore, it makes it even more paramount that you take it upon yourself to learn first hand the skills involved rather than leave it up to a stranger or friend. Only you can manage your money to it’s fullest extent. But, you can only do that if you make the decision to do so. That’s why you should visit Stock Market Investing Today to learn more.

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No Load Mutual Funds Are Not Just For Grandpa

Filed Under: Investment Strategy by Bill — Comments Off
September 3, 2009

So what exactly is a load vs no load mutual fund?  A load fund is essentially a sales commission for the advisor or broker who found the mutual fund for you.  There are either charged front end (sales commission), back end (out of profits) or level loaded (a percentage of the purchase every year.)  The no load mutual funds don’t charge you any commission because the money is made internally in the running of the fund.  Most research shows that there is no real difference in return on investments between no load funds and load funds as a whole, however if you don’t know how to pick you a good mutual fund then the sales commission may be cheap compared to picking a poor performer. 

Why does any of this matter if you are one of the hot shot stock market traders reading this blog?  Well these mutual funds are helmed by some brillant stock market minds with the full resources of multi-billion dollar portfolios.  Beat that with your free google searches!  While they may not make the best returns they have the ability to move large amounts of money.  Something that gets hard to do when your trading from your laptop.  So if you’re doing well and you can’t manage to trade every dollar you have, moving some of your retirment money to a no load mutual fund may be a smart move to lower the risk of your overall portfolio. 

Best No Load Mutual Funds

Picking your top no load mutual funds is most easily whittled down by first choosing why you’re picking the fund.  I tend to pick funds in areas where I’m either bad or have no interest in managing my own investments.  Therefore my mutual fund choices tend to focus on foreign investments.  Now I have a whole team of experts watching over seas while I focus on what I like doing.  For you it may be boring blue chips or income investment, just use these mutual funds to round out your choices.  The next thing you do to whittle down list is look at their past performance, I like to pick ones with more than 10 years history.  Don’t forget to look at their expense ratios (fees) since earning 3% per year more than the competition means nothing if they charge 4% a year more.  Finally I read the prospectus to make sure their views fall mainly in line with mine becaue I don’t like yelling at my statements every quarter when they go against my grain.

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