Because Your Money Matters » Investing Matters

Annuity’s Third Choice – The Indexed Annuity

GuestPoster — Mon, 06 Sep 2010 08:03:04 +0000

There was a time when consumers were faced just two choices when it came to choosing annuity contracts. The fixed annuity, which is capable of providing an investor with a reliable and steady income, was a favorite for those involved in retirement planning. With a variable annuity, the account value is based on the performance of individual stocks in the portfolio and this gives the investor the ability to hedge any inflation risk.

Now there is a third choice called the fixed indexed annuity. It was created to offer investors less risk than seen with a variable annuity but more growth than a fixed annuity. Indexed annuities are not really as complicated as they sound at first.

Anyone who understands the fundamentals of how an annuity works and has had annuities explained to them already has the basic knowledge needed to understand everything about an indexed annuity. An equity index simply takes into account additional factors. Like a variable annuity, the indexed annuity is tied to the market performance but it is not completely dependent upon its fluctuations. With a variable account, as soon as the investment portfolio sees a decrease, the value of the account decreases as well.

With an indexed annuity, there is room for some market participation by the investor. The value of the account is directly related to the index and it will increase when the index tied to it increases. Even during those times when the market goes down, there is a minimum return that will be realized. In some cases the return is 0% but the advantage with this type of investment is it cannot dip below that and go negative. As a result, your account will react to any index increases but will not decrease during a down market. To offset those times when the market is down, the investor is able to benefit from a predetermined portion of that growth. How much the investor can participate in will be determined by spreads, participation rates and spreads.

Gold Investing Tips 101

GuestPoster — Sat, 28 Aug 2010 08:44:01 +0000

Finding the right gold investment for you and your family is one of the best things that you can do. It is a safe, wise investment that can yield you many wonderful benefits in the years to come. It takes a lot of time, and dedication to get started, so to make things a bit easier for you, we have compiled information that should help you get started.

Gold Investing: The Beginning

One thing that you will probably notice about gold investments is the simple fact that there are man options to choose from. But finding the right option can prove to be overwhelming. For example, you can invest in gold mining stocks, gold ETF, and hard assets. For the sake of first time investing, we highly recommend that you start out with assets.

What are assets? They are generally items like gold coins, and gold bars. Tangible assets that you would have full control over. Unlike investing in gold ETF, where you don’t actually own the gold, rather you would only own a portion of the gold. Each investment has its advantages and disadvantages. However, to get started with ease, start with hard assets.

Gold Investing: Where To Buy

You would be surprised to learn that you can find hard assets at a variety of locations. From pawn shops, to antique shops, hard assets are available just about anywhere locally. Even many jewelry stores have started selling gold coins. The main thing is to do your research, and find the right option for your current lifestyle.

Another help to you will be the internet. Not only can you shop for and buy gold coins on the internet, but you can also keep yourself up to date on the latest news concerning gold. Whether it be gold stocks, or gold mutual funds, you will be able to stay on top of the information that is important to you when it comes to gold.

Gold Investing: Closing Thoughts

Now you can begin working your way to a more solid investment future by learning from these simple wealth management tips and suggestions. Soon enough you will reap the wonderful benefits for you and your family.

Why You Should Keep A Close Eye On Your Stocks

GuestPoster — Sun, 15 Aug 2010 14:18:01 +0000

You work hard for your money and sometimes you want your money to work hard for you. This is why you look for investment opportunities and many people find these opportunities in the stock market. If you decide to invest in stocks you should learn to follow the market closely.

When you first learn how to buy stock, you should understand the money you invest will go up and down with the stock. In the ideal situation is where you catch the stock at a low price and when it rises to a high price you sell it and be happy with the profit that you made.

Sometimes investors buy stocks and then tend to forget about them. You can’t allow yourself to do that. You much watch the company for any announcements and even bad press. Anything negative such as a recall can send the stock spiraling down and you money that you invested can be lost. When you play the market you must play to win. Playing to win means watching the industry that the company you invested is in. You must learn to look for market trends. Are they releasing a new product that the public really is anticipating? That can send the stock up to high levels.

Don’t be an investor that thinks just because they picked a good stock at that time it will continue to stay that way. The market and industry could turn at anytime and the best stocks to buy right now may not be the best a month from now. If you are not paying attention it can turn out to be a very bad break for you. Sometimes the information you are looking for might be on page 3 of the business section and it might not be front page news. If you are serious about making money you must learn to dig deeper into the industry and company you are investing in. It can be the difference between success and failure.

Beware of Penny Stocks

GuestPoster — Thu, 29 Jul 2010 19:42:59 +0000

If you’ve ever watched the movie Boiler Room, you seen what people can do with penny stocks. Most experts and investment advisors tell their clients to be wary of penny stocks because they are often used to defraud investors. It is a highly risky investment strategy to use.

What they do is set up a fake company. Then they issue false documents and issue and IPO. They make up some back story of how it’s going to grow to be the next Microsoft or Google and people can get in on the ground floor.

This strategy often works because the stocks are so cheap and it’s one of a few options for finding small investments. Although the official definition of a penny stock according to the SEC is less than $5 a share, often you can find them for $1-2 a share. The cheapness of the stock and the potential to make exponentially large returns, even should it rise to a measly $8 a share is irresistible to some.

The main problem with these stocks is that they go under the radar. They are too small for anyone to really care about. And they often have very little information about them that you can find in the public domain. Unless you know the people running the company first had, it is often difficult to determine if they are a legitimate company.

Even if they are a legitimate company, you might get stuck with the stocks if you buy them. Penny stocks usually have very low liquidity. That means there isn’t much trading volume on any given day. That means if you want to sell your stocks, you may not be able to find a buyer. That might be a problem if you are trying to unload as quickly as possible.

If you do develop a strategy of buying penny stocks, because there are legitimate ones out there, I would consider diversifying across many different stocks. If you invest in 5 different penny stocks, it is unlikely that all of them will be fraudulent or a bad buy. In any case, you should be very cautious.

The Buy, Hold, And Monitor Investment Strategy

GuestPoster — Wed, 28 Jul 2010 03:29:57 +0000

The most famous strategy used to make money in the stock market is undoubtedly the buy and hold strategy. It’s not a bad strategy and a lot of people have made fortunes based on this strategy. However, does this method still work? Would it be advisable for a new investor to employ the buy and hold strategy? In reality, it doesn’t matter who you are, stock picking for beginners or seasoned investors is the same. After all, the goal for both is to make money.

In an age where we can trade stocks at the comfort of our own homes, it can be addicting to be a day trader. However, it is important to note that trading is different from actual investing. In trading, you might be holding a stock for a few days or even a few seconds. In investing, you should take a long term view as your end goal is to become a shareholder. At least, that’s how it should play out. More often than not, investors buy and sell without giving it much thought and often times, lose a bit of their capital investment. Not only that, they also lose some money in transaction fees as well. They have become a trader, and not an investor and that’s a whole different ball game.

So, when you want to be a buy and hold investor, you really do have to make long term stock picks. This means 5-10 years is your investment horizon. You should be comfortable with that scenario and you should also have money in the bank to give you a cushion on hard economic times so you’re not tempted to pull out. A lot of people actually do make good stock choices but due to unforeseen circumstances, they are forced to sell too early. So before you buy, make sure you can afford it.

Therefore, if you’re committed to staying with a company for the long term, you undoubtedly have to make the right call on which stock to buy. Obviously, this requires research. However, while you might have done good research, sometimes the picks do turn out to be duds without fault on your part. Perhaps the company is going a different direction from the business plan that they had laid out before. If this is the case, you need to monitor your portfolio. If this prompts you to sell, then sometimes you need to do so.

The buy and hold strategy still works to this day. However, the caveat being that you need to monitor your stock choices as well.

Play It Safe With Bond Funds

GuestPoster — Tue, 27 Jul 2010 03:05:01 +0000

For some people the stock market and traditional forms of investment can have a little bit too much risk associated with them. This can be particularly true for those who have retirement coming up soon. When this is the case, then they need some way to grow their money without risking losing it all. The easiest way for them to do this is to buy bonds.

Bonds can be an investment in either investment grade corporate bonds or government bonds. They are considered much safer than investing in the company’s stock itself. The companies take your money as a loan to help them pay off their debt and then pay you back after a predetermined amount with interest added on. They are safer than stocks because the stock can move rapidly up or down and you could lose your shirt in the process. With a bond, you are guaranteed to make money on your investment so long as the company makes good on it’s debt (they almost always do). Any company that would not make good on it’s debt is not worth investing in anyway.

In order to spread around risk even more, some choose to invest in bond funds. These funds work in the same way that a mutual fund works with stocks. It gets you invested in a wide basket of bonds all for a small amount of money. This means that you won’t face the risk of getting invested in one single bond that doesn’t end up getting paid out. It also means that you don’t have to worry about doing any research into your investments for yourself. You can just set aside a certain amount of money each month and just watch it grow and grow.

If you are looking for a new way to grow your money, then you might consider buying into some funds that invest in bonds.

Understanding IRA Rates on CDs

GuestPoster — Mon, 26 Jul 2010 19:23:54 +0000

Individual Retirement Accounts are tax-deferred savings plan that taxpayers and soon-to-be retirees build for their retirement. Several investors are fully aware that the contributions placed in these plans will advance sans dividends, taxation on gains, or interest until the cash is withdrawn for retirement. Simple cash, CDs, mutual funds, and stocks are investments that can be procured through an IRA. This article will focus on certificates of deposit and their IRA interest rate.

Certificates of Deposit Basics

Though CDs have a relatively low rate of return, CDs are safe investments since they are insured. At present, the NCUA and FDIC raised the insurance limit for Individual Retirement Accounts to $250,000 each bank as well as credit union requests.

Many banks recommend IRAs that are CD-specific to their customers, making an impression that CD-based IRAs and regular investment-based IRAs are not the same. In reality, an IRA is a specific tax arrangement applied to several different investments by the IRA tax rules. These assets should use the exact same regulations and policies stipulated by the Internal Revenue Service.

Term of CDs

The term of the CDs openly corresponds to the cash housed in the CD. Thus, a five year CD will mean that there is security of gains for five years. You should note though, that IRA CDs may vary somehow. CDs come with several rules that govern the use of funds. These rues incorporate extensive tax penalties when cash is distributed from the account before you even become 59 ½ years of age. On the other hand, there are no tax implications if you buy a new CD or you plan to transfer a CD in your own IRA account.

Advantages

Until the contributed funds inside the IRA are distributed, you will not face taxation. Therefore, IRA account generates interest for your retirement that is free from tax. This feature permits you to have more funds saved for your retirement.

A CD-specific IRA also comes with other benefits. First, you are granted full control over your money since the CD is set up under your name and social security number. In addition, the credit unions and banks are intermittently wiling to remove premature distribution penalties depending on your financial circumstance.

What is Forex Option Trading?

GuestPoster — Sun, 25 Jul 2010 21:14:03 +0000

Forex stands for Foreign Exchange Market. Forex option trading is a contract between a buyer and a seller in regards to “premiums”. In this contract, a buyer has the right, but is not obligated, to sell/buy any specific amount of currency against another at a fixed price or before a set date. For this right, a Forex buyer must pay the amount of the “premium” to the seller. Forex option trading deals with choosing the right time to buy or sell these premiums. A possible loss or gain will still depend on the flow of the exchange market. Since the Foreign Exchange Market is unpredictable and requires constant study and observation.

These options are made available so that traders may limit their risk and expect a possible increase in profits (that is if they are right) in Forex option trading. These are the two types of option trading.

Call and Put Option – In this setup, buyers could buy “premiums” from the option seller at a specific time and price. They also have lower priced premiums, making the risk smaller and the gains higher. This traditional option trading has two sub types.

American Style – This option can be exercised anytime before the specified date.

European Style – In this type of option, you could only exercise your right on a specific date.

Single Payment Options Trading (SPOT) – This setup allows the investor to set the conditions and the amount of payout he or she wishes, if the specified conditions are met. In this option, the two parties will set conditions on which the investor collects the agreed payout sum.

Unlike gains from other activities such as selling your old jewelry to scrap bold buyers, the success and failure in a Forex investment lies on the skills a trader has in recognizing price trends, not in getting a good gold exchange rate. These skills can be learned and applied on Forex 0ption trading. While some may find these options difficult to use. It provides traders the choice of profit with low risks. Uncertainty and lack of determination on the part of traders might lead to loss and even bankruptcy. It is reassuring that traders can use these options and exercise their “rights” in regards to Forex option trading.

The advantages of Forex Option Trading is that you could have unlimited gain potential, your risks is limited to the amount of option premiums you buy; you could set the price of the premium and its expiration date. The same could be said for Forex investments, you have to choose when to buy or sell your currencies to achieve bigger profits.

In SPOT trading, you receive a payout if the price reach a certain level or doesn’t reach that specific level. Of course, if conditions are met, you can achieve a higher desirable payout.

Selling Annuity Tips

musica9999 — Wed, 09 Dec 2009 06:14:53 +0000

If you would like to know more about selling annuity payments, then this is the article for you. Specifically we will be discussing what an annuity is, what the benefits of an annuity are, and how selling your annuity can give you cash that you can use today. After reading this article, you will know more about annuities and you will have a better idea if selling yours is a good idea.

So what is an annuity? Well, to put it simply, an annuity is a series of set payments that are paid on a set schedule. For example, a person could have an annuity that paid $3,000 a month for 3 years. An annuity can be the result of a trust that was setup by a relative or it could be the result of lottery winnings, a court decision, or a gift. Annuities are more common than one might think. Many Americans rely on annuities as their primary source of income.

So what are the benefits of having an annuity? The greatest benefit to an annuity is that you receive a set amount of money each month for a period of time. Why is this beneficial? Well, in a word, it creates stability. Having money that you can rely on each month makes life a lot easier because you know that most of your bills will be paid without you having to work. This is a great stress reliever, especially in these troubled times that we are living in.

Why might selling my annuity be a good idea? Selling your annuity will allow you to receive a lump sum amount of money today. However, there are costs. You will get a reduced amount of money if you decide to sell annuity payments. Basically, you will not receive the future value of all your annuity payments, you will get an amount that is a percentage of the future value of all your annuity payments. This is a compromise you must be willing to make if you would like to sell annuity payments that you are currently receiving.

S selling annuities is an easy task and it can reap many rewards. However, you must always consider the consequences that you will face as well. We talked about what an annuity is, what the benefits of an annuity are, and why people who sell annuities may be on to something. Now that you have this information, it is time to sell your annuity today.

An annuity is a series of set payments that are paid on a set schedule. For example, a person could have an annuity that paid $3,000 a month for 3 years. An annuity can be the result of a trust that was setup by a relative or it could be the result of lottery winnings, a court decision, or a gift. Annuities are more common than one might think. Many Americans rely on annuities as their primary source of income.

So selling annuities is an easy task and it can reap many rewards. However, you must always consider the consequences that you will face as well. We talked about what an annuity is, what the benefits of an annuity are, and why people who sell annuities may be on to something. Now that you have this information, it is time to sell your annuity today.