Simple guide to invest

 
Mutual funds are a collection of stocks and/or bonds invested in different securities, which include fixed market securities and money market instrumentals. It facilitates investors to put their money under an efficient investment management. There are three types of mutual funds namely, income funds, growth funds, and balanced funds.

The basic principle underlying mutual funds is to pool in money with other people to convert it into funds. Mutual funds generally buy shares in stocks wherein an experienced fund manager performs the task of selecting, purchasing and selling off the stocks himself. Certificates are then issued to the shareholders as a testimony of proof of their partnership and participation in the emoluments of funds.

There are particularly three ways in which you can make money from a mutual fund. They are:

1. Benefits can be earned from the commission on stocks, and interests on bonds. All the income received all round the year is paid by the funds in the form of a distribution.

2. The fund will have an outstanding benefit provided the funds sell high priced securities. Most of the profits are given back to the investors in a distribution.

3. The value of the fund’s share automatically increases with an increase in the value of unsold high priced fund holdings. Accordingly, you can always sell shares of your mutual fund for profits.

Many people find investing in mutual funds an attractive option to that of dealing directly with the stock market because it is comparatively safe. In fact, these days, mutual funds have become the first preference of many investors. Mutual funds provide a balanced and better approach compared to conventional stock market alternatives. It has an added advantage of investing in several distinct sectors and firms, so, if one company suffers losses, the others may be rising. Investing in mutual funds, therefore, minimizes the loss-bearing risk of monetary assets.

In a nutshell, here are the salient points of the advantages of mutual funds:

1. Cost-effectiveness of investing in mutual funds: The main advantage of investing in mutual funds is the efficient management of your finances. Investors buy funds because they lack the competence and time to manage their own portfolio. It is a cost effective method, especially for a small investor because it is expensive to get a manager to manage individual investments.

2. Diversification: Compared to individual stocks or bonds, mutual funds diversify the risk of bearing loss. The basic intention being to invest in a diverse number of assets in order to overcome the negatives of loss making stocks or bonds by the profits reaped by others.

3. Economy of Scale: The transaction expenses are relatively low as a mutual fund is bought and sold in large amounts of credits.

4. Liquidity: Mutual funds provide the opportunity of converting shares into cash at any point of time.

5. Simplicity: It is easy to buy a mutual fund. Most companies have their own automatic purchase plans, and the minimum investment rates are very small.

Therefore, investing in mutual funds is certainly a secure investment as the chance of loss is spread out, and the opportunity for gains are numerous. At the same time, it is both cost-effective and an investment that gives great future returns.

The days of depending on government largesse in meeting old age financial requirements are growing dimmer by the day. Hence, investing in mutual funds can be a wise choice, especially for those who plan for an early retirement and hope to enjoy a secure senior citizenship.
by: Joseph Kenny

Real estate is often termed as the safest investment avenue. In fact, real estate investments done with proper evaluation of the property (and its true value), can lead to good profits. This is one reason why some people pursue real estate investment as their full time job. The talks of real estate are generally focussed towards residential real estate; commercial real estate seems to take a back seat. However, commercial real estate too is a good option for investing in real estate.

Commercial real estate includes a lot of different kinds of properties. Most people relate commercial real estate with only office complexes or factories/ industrial units. However, that is not all of commercial real estate. There is more to commercial real estate. Health care centers, retail structures and warehouse are all good examples of commercial real estate. Even residential properties like apartments (or any property that consists of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is much in demand.

So, is commercial real estate really profitable? Well, if it were not profitable I would not have been writing about commercial real estate at all. So, commercial real estate is profitable for sure. The only thing with commercial real estate is that recognising the opportunity is a bit difficult as compared to residential real estate.

An excellent resource for learning real estate investing tactics is: Real Estate Investing Course

But commercial real estate profits can be real big (in fact, much bigger than you would expect from residential real estate of the same proportion). You could take up commercial real estate for either reselling after appreciation or for renting out to, say, retailers. The commercial real estate development is in fact treated as the first sign for growth of residential real estate. Once you know of the possibility of significant commercial growth in the region (either due to tax breaks or whatever), you should start evaluating the potential for appreciation in the prices of commercial real estate and then go for it quickly (as soon as you find a good deal).

And you must really work towards getting a good deal. If you find that commercial real estate, e.g. land, is available in big chunks which are too expensive for you to buy, you could look at forming a small investor group (with your friends) and buy it together (and split the profits later). In some cases e.g. when a retail boom is expected in a region, you might find it profitable to buy a property that you can convert into a warehouse for the purpose of renting to small businesses.

So commercial real estate presents a whole plethora of investing opportunities, you just need to grab it.
By: Andrew Koblick

Trading stocks online isn’t for the faint at heart, especially when one good market day can result in an unexpected crash the next. The vast number of stock trading platforms from some of the biggest names in finance offer stock solutions to experts right on down to a day trader or novice. Before you begin investing your life savings into an unpredictable market economy, keep these stock trading tips in mind.

• Pay attention to industry trends-If an up and coming website or company gets extensive media attention or business, consider purchasing stock from them.

• Don’t be afraid to invest for fear of loss…the quicker you buy stocks, the faster you can make a profit.

• Know your trade options: some services allow you to use your mobile phone for trades, as well as faxing or over-the-phone.

• If you cancel a trade, make sure it’s complete before making another trade. Simply because you receive a cancellation receipt, it may have already gone through. Know who to contact for trading.

• Don’t trade with a company you don’t know anything about. If possible, look into their investment history, so you know you’re trading reputable stock.

• Join an online stock trading service that provides up-to-date market forecasts and comprehensive market overview features. When trading, you need access to instant stats.

6Star Reviews cites online stock trading services TD Ameritrade and Zecco as great choices in personal investment that incorporate the latter. Zecco offers great rates and 10 free trades a month if stock brokers meet the minimum balance requirement.

Options trades are $4.50 a trade, which is a low rate that new traders will surely appreciate. Similarly, TD Ameritrade runs specials such as 30-day commission-free trades and a $100 bonus on current new account openings. Before signing up with a particular company, consider your level of trading expertise, as well as your financial resources, as some sites offer lower rates than others.
By: Kelly Liyakasa

Investing in low-income housing is beneficial, because it provides you more cash flow. This can be better explained with the help of an example. In a small town, the average cost of two-bedroom house is around $130,000 and you will get $800 a month as rent for it. The cost of a mobile home will not be more than $45000 and the probable amount of rent is $500 a month. Therefore, the increase in the amount of rent is not in proportion to the increase in the cost of the house. There is about a 200 percent increase in cost as compared to only a 60 percent increase in the rent. What it indicates is that investing in low-income housing like mobile homes, run-down apartments and old houses can be a wise decision.

Risk And Management Problems Are The Price For Higher Returns People often tend to ignore investing in low-income housing, because of the greater amount of risk and problems in managing such kind of houses. This is true. Whatever negative points they may have in their minds are not baseless. You may need to manage small repairs here and there on and off. Sometimes you may receive the rent late. However, you should not forget that this is the price you are paying to get higher returns. Had there been no possibility of getting higher returns, nobody would have recommended investing in low-income housing.

Tips on Buying Investing in low-income housing is ideal for generating a long-term cash flow. In fact, low-income housing is a very good asset capable of producing income for several reasons. The very first reason is that houses are plentiful. Hoses exist everywhere, whether it is a city, a town or the neighborhood. The easy availability makes houses easy to buy. Getting discounts on buying is also possible because so many sellers want to sell the property due to problems. If the house is well maintained, the average period of occupancy for a tenant is three to five years, while most of the other cash flow vehicles do not have this longer occupancy period.

Tips on Selling Investing in low-income housing may fetch you 10 to 15 percent price premiums if you sell the property by agreeing for a sort of payment contract with the buyer. By investing in low-income housing you are not putting your money in slums. These are starter homes, but the location is not always so great.

25 Percent To 40 Percent ROI You should keep an eye on the auction sales such as tax, estate, and foreclosure sales for investing in low-income housing. There, it is possible to buy these houses for $3,000 to $25,000. You may receive $350 to $500 a month by renting out these houses. In terms of return on investment, it may be possible to get average returns between 25 percent and 40 percent.
By: Tina Young

If you are looking for a cheap home owners insurance, you often have to compromise with the price; the more expensive the better policy. Although this is the main rule, there are some exceptions. One of these exceptions is discount home owners insurance. How do you find it?

Have You filed claims the last couple of years?

If you haven't filed any claims for a couple of years or so, you might be able to save some money to the tune of 15% on your premiums. Also, if you use the same insurance company for a couple of years, that will also look good and you can save bucks.

Why Not Get Multiple Policies From The Same Provider

It might be a great solution to get it all together ? auto, home, health, travel and whatever other coverage you need to get under the same company, you can save lots. This can chop off a wopping 10-15% of your premium. All it takes is just a little bit of planning!

Are You Protected?

It's standard for many companies to offer you a discount if you have things like burglar alarms or smoke detectors installed. You might also have one that is connected to a third party monitoring company. That will save you even more bucks.

Know Where The Nearest Fire Station Is

There are a few things in terms of location that can alter your premiums. If you live far from a fire station or fire hydrant, you'll normally have to pay more. The opposite is the case If you live within the city limits; them you will pay less on your premiums, compared with living out in the sticks.

The Building Materials of Your House

What your house is made if will actually make a difference in how much you pay. For example, wood houses carry higher premiums than good, solid concrete structures.

Higher Payments On The Deductible

If You can afford it, you should pay as much as possible on your deductible, thus your premium will be lower. If you are able to pay something like $200 or $1000, you can bring that premium down as much as 20%!

Stop Smoking!

Non-smokers will save cash; even as much as like 15% in many cases. Check out if the company you use offers a deal for non-smokers.

Now, after I have provided you with a few pointers to help you save cash on your house you might be ready to buy your home owners insurance. Anyway, you should consult your agent. Most insurance agents also know of some tricks to get you out of paying piles of cash.
by: Marvin Toller

So Why Home Owner Insurance?

So you purchased a house. Congratulations! Buying a home is a big step in anyone’s life and a great investment. Now it’s time to protect your investment by purchasing home owner insurance.

Home insurance is an insurance policy that covers your house, the garage, other related structures, and also personal possessions inside the home against damages caused by everything from fire to natural disasters and even theft. Different home insurance policies offer different levels of coverage. An all-risk policy, for example, covers your home and your property against any and all disasters or theft. However, just like with any insurance policy, the higher the coverage, the higher your premiums.

Home Owner Insurance and Coverage

Many lending institutions mandate mortgage clients to have a basic level of home owner insurance to receive a home loan. This requirement guarantees them that in the case of a catastrophic event, their mortgage balance will still be paid out. But you don’t need to stop there. Depending on what specific items and areas of your home you want protected and in what type of event (i.e. earthquake, fire, theft) you want your home protected in, you can increase your home insurance coverage above and beyond the level required by the mortgage company.

The price of your home is fundamentally where you begin when deciding on the level of coverage for your home. So, you need to first establish the amount it would cost to repair and/or rebuild your home. Once that amount has been established, insure your home for that amount. Some home owner insurance policies also automatically adjust the level of coverage each year to take into consideration appreciation and the increased value of your home.

Home Owner Insurance and Personal Property

Remember, protecting your home is not the only reason to get home insurance. Different levels of coverage can also protect the items in your home. It you want to protect your home and everything in it, take inventory of your personal property, including furniture, high-end electronics and appliances, and anything of value. This will establish a value for all items in your home. Take this value and add it to the coverage level of your home insurance policy. If you can’t afford that amount of coverage, take a percentage of the overall value of your personal property and adjust the level of coverage based on what you can afford and what you’d want replaced. If you want to protect your personal property, you need home owner insurance.

Home Owner Insurance and Pets

Believe it or not, your pets play a part in why you need home owner insurance and in deciding the level of home insurance coverage you choose. That’s because your pets can cause damage to your home and injury to others. Different levels of home insurance coverage also cover injury in the home and protect you against lawsuits. If you have pets, remember that they can lead to damage and injury; so invest in home insurance and choose your level of home insurance coverage accordingly.

If you want to protect your home and your family, you need home insurance. It covers you when the unexpected occurs. Without it, you could end up losing everything.
by: Brad Stroh

A typical homeowners insurance policy has four key ingredients. They are:

1. Homeowner insurance coverage for your home itself
2. Homeowner insurance coverage for your family's personal items
3. Homeowner liability coverage
4. Coverage for the expenses of temporary living should you have to vacate your home because of fire, flood or other disaster covered by your homeowner policy.

The portion of the homeowner coverage for your home itself provides funds for the repair or reconstruction of your home if it has been damaged or destroyed by disaster such as hurricane, hail, lightning, fire or any other covered event. What is not covered with a standard homeowner policy is normal wear and tear on your home or damage caused by an earthquake or flood. (There are homeowner policies that cover these, but they are more costly and in some regions, such as flood prone areas they are not available at all.)

When you take our your homeowner policy you'll want to be sure and buy enough coverage for total reconstruction of your home

Most standard homeowner policies also protect structures on your property although detached from your home, such as in-law quarters, garage or gazebo. It's common practice to cover these unattached structures for ten percent of the covered value of your house.

Should any of your clothing, electronic equipment, furnishings, or other personal belongings be destroyed by insured disaster, or stolen, they are covered by your homeowner policy. Most carriers cover them at the rate of 50-70 percent of the total dollar figure of your home structure's coverage.

There is also a clause in your homeowner policy for coverage of off-premises items. Which means that if you take your personal belongings elsewhere and they become lost or damaged your homeowner policy will generally reimburse you at least ten percent of the amount of coverage that you have on them when they are on your home premises. Homeowner policies also provide up to $500 of protection against unauthorized credit card use as well.

For high priced items like jewelry and fur a standard homeowner policy will usually limit your coverage to $100-$2000. You can purchase coverage up to appraised value for an additional charge. In either case there is no deductible and coverage includes your accidental loss of the items.

Foliage around your home such as trees and shrubs also come under the protection of your homeowner policy. Usually the money figure is five percent of the home's insured value, but up to $500 for each bloom. They are protected against even riots, vandalism, explosion and airplane crashes. They are not insured against wind or disease damage.

Liability coverage protects you against litigation should anyone or anything become injured on your premises. You are also covered for damage done by your children or pets to the property of others as well. This coverage is in force even if you are not in your own home or on your own property. It covers any court defense as well as any court appointed financial award against you. The coverage limit is generally more than $100,000, although a $300,000 minimum is a standard recommendation.

Your homeowner policy also takes care of living expenses if you temporarily have to vacate your home because of damage and during repair and reconstruction of your home. Coverage includes hotel costs, meals in restaurants and other common expenses. Coverage limit of 20 percent of your home's insured value is common for this. If part of your home served as rental property your homeowner policy will also reimburse you the amount of the rent that you are losing because of the disaster.
by: Robert Michael