Janet Schlarbaum, Mark Schlarbaum Experience Weblog

Submitted by: Janet Schlarbaum

Author: Phoenix Delray

When it comes to making investments or plotting out an investment strategy, many people feel as if they are in a rowboat holding only one oar and stuck in the middle of an ocean. Spinning in circles without a direction is not a good place to be. But without a solid investment strategy in place, it could happen. The first step toward reaching the shores of your Financial Freedom Island is to know how you are going to get there. Developing a diversified investment plan is a great way to achieve your financial goals. Investing in mutual funds offers the opportunity to achieve specific goals and to tidily manage your portfolio.

If you are looking for an easy way to diversify your investment strategy without diving directly into the deep end of the financial know how pool, mutual funds are definitely an option worth investigating. A mutual fund is a pool of individuals money that is invested to satisfy the investment objectives of the group by the funds portfolio manager. Mutual funds are diverse, meaning that mutual funds are generally comprised of securities from a number of sources, such as stocks, bonds, and cash investments. The diversification of the monies makes it less likely that losses from one company or industry will have a significant negative impact to a mutual funds overall performance. There are noteworthy advantages to investing in mutual funds.

Portfolio managers or Investment advisers professionally manage mutual funds on a full time basis. It is their job to stay abreast with all factors that affect the marketplace. Private investors would have to devote substantial time to achieve similarly effective management. Mutual funds come in a wide variety of available options. Investors can choose mutual funds with very low risks regarding their principal investment. Conversely, investors may opt to take greater risks with their investments in pursuit of higher returns. Investing in mutual funds allows investors to maintain conservative, moderate, or aggressive portfolios or all three.

Mutual funds also offer a great amount of convenience to investors. Mutual funds are easy to buy or sell; easy to transfer from one fund to another; and you can set up automatic investments to a mutual fund account directly from your bank account. Most companies that manage mutual funds offer extensive record keeping services so investors can easily track their funds performance. Determining your specific needs is the first step in selecting which type of mutual fund would best suits your investment needs. People generally invest in mutual funds for either long term growth, high current income, or to maintain stability of their investment.

Article Selected By: Janet Schlarbaum

Author: Stanley Chua

Portfolio management is an important part of your life. Maybe more important than you realize. You have an overall portfolio that is made up of everything you own. Within that portfolio is your investment assets that you need to manage in order to reach your financial goals and have a healthy and wealthy nest eggs to enjoy in your golden retirement years.

Managing your financial portfolio is a lot like juggling. A young person, perhaps fresh out of college, might start by juggling small, similar-sized balls (which include a small income and a small debt). Over time, different things happen (perhaps that person buys a house or some stock) and suddenly objects of different size and weight are added to the mix.

Then, as life goes on, objects of increasing risk and danger might be added as well: a credit card… a high risk stock… a personal tragedy. They’re not all bad (from a financial perspective) but they can hurt a person’s financial portfolio if not handled right.

Portfolio management is the ongoing process of balancing (or juggling!) your personal assets in order to meet your personal goals and expectations and, as much as possible, increase returns while minimizing risk.

Here are 10 simple tips to ensure that your overall portfolio is in good shape…

Strategy 1 : Understand your financial needs. Knowing Thy Self is the first step to creating and managing a portfolio that will do what you want it to do. This knowledge will help you set realistic future financial goals and decide how much risk to include in your investment strategy.

Strategy 2 : Have a financial plan. Adhere to it and your egg-nest will grow steadily and abundantly.

Strategy 3 : Pay down your non-income generating debts. This kind of debt is what we call “Bad Debt”, which will not able to provide you with monetary returns. Some examples include your home mortgages, car financing etc

Strategy 4 : Build a good credit rating. A good credit reputation makes banks more willing to lend you money during raining days or when investment opportunities strike.

Strategy 5 : Work toward buying a home instead of renting. This is of course assuming that the cost of house ownership is lower than the overall rental cost.

Strategy 6 : Reduce your depreciating assets and increase your appreciating assets. Imagine your investment property is worth twice as compared to the time you bought it 5 years ago ? You can then ask your bank to increase your mortgage amount and use the additional funds to finance another investment property with no money down !

Strategy 7 : Make sure you have adequate insurance coverage for a variety of worst-case scenarios. Golden rule is “Always save for the rainy days”

Strategy 8 : Be aware of the risks and rewards of each type of investment. One great strategy is to diversify across and within your asset classes to minimize risk that is only specific to a particular asset

Strategy 9 : Be familiar with investments in general. Gaining knowledge makes you nimble to capitalize on good investment opportunities when they come by.

Strategy 10 : Maintain a budget… Stick to it and sleep soundly at night

Article Selected By: Janet Schlarbaum

Author: Mika Hamilton

Years ago trading was usually an activity carried out by wealthy individuals from families that had likely been wealthy for generations. It wasn’t uncommon for the corporations of old to be owned and controlled by the members of a single family. However, over time the markets began to accommodate institutions comprised of groups of investors. This type of trading also evolved to involve different types of investment possibilities that served the interests of a variety of companies and people particularly for long-term savings goals.

Pension Funds
A pension is any payment made to a retired person based on years of service. Most pension payments are made in the form of annuity payments that pay a set amount each year. A pension fund usually involves regular contributions by the employer to an investment account. The risks of investment are taken by the plan sponsor (the employer). The investment account requires constant management to ensure the success of the fund.

Insurance
It used to be that insurance companies were only associated with planning for the future as far as life insurance or health insurance to protect against emergencies. Life and health insurance are an absolute necessity when trying to ensure financial security. Disaster can strike at any time making it not only an emotionally difficult time for family, but also financially if not prepared. Insurance companies over the years due to increasing medical costs have begun delving into other areas of financial planning. Namely the offering of financial products like Mutual funds (to be discussed in a moment) and annuities that make saving for the future easier and more accessible no matter what the financial position or need is.

Mutual Funds
A mutual fund is perhaps one of the most popular means of long term investing and is the vehicle of choice in IRAs and 401k accounts. A mutual fund is basically a way of investing in a pool of different companies in order to minimize risk. A mutual fund investment can involve investing in stocks, bonds and other securities. The appeal of a mutual fund is the fact that a fund manager makes the decisions regarding what investments should be made. Usually with mutual funds, an investor can choose the level of risk they are willing to assume. Since the goal is long term investing, a degree of risk is acceptable since overtime the collective value of the stocks in a fund will grow.

Article Selected By: Janet Schlarbaum

Author: Samuel martin

In the complicated world of financial services, you’re being misled.

Wall Street advisors employ a strategy of “active marketing,” which is the continual development of new products designed and marketed as the latest and greatest solution to investors’ fears and concerns. There is an addiction factor at work here; active marketing feeds our desire to roll the dice. This rolling of the dice takes the form of stock picking, market timing and return chasing, activities otherwise known as active management.

The alternative is to “super-diversify” your portfolio with a wide array of unrelated investment choices and assets. This strategy allows you to own the market as a whole, rather than just a few of its components, thereby increasing your return and reducing the risk.

Based on Nobel Prize-winning research known as Modern Portfolio Theory, the application of this theory into a properly diversified portfolio - what I call a “Market Return Portfolio” - consists of no-load institutional asset class mutual funds you normally don’t see in many portfolios. Choices such as micro-cap, small cap international, emerging markets and value stocks can lead to more consistent long-term returns equal to or somewhat greater than the market at large.

Another important aspect of proper portfolio management is finding the right firm to work with. Look for one that is independent, uses a fee structure whereby the firm is paid directly and only from clients, and uses a market return approach. The right strategy, managed by the right help, can truly bring wealth without worry.

In some sense, worry-free investing isn’t really possible. People will always worry about taking care of their families and they’ll always worry about their country’s economy. Yet true “wealth without worry” means not having to track the daily movement of the market, saving time and energy for more important things in life.

Investors’ confidence should be put not in an adviser or their own stock-picking prowess, but rather in the economic miracle we call capitalism. By tracking market movement over the past seven or eight decades, we see that the market goes up more than 80 percent of the time.