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