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.