Finance

Things to do before investing

Friends, family, and readers always ask me that question. What do I need to do to start investing?
The answers to this question will be a little unparallel.

The same way stocks grows in value and pay nice dividend is the same way a business can also go bankrupt or cease paying dividends. When I mentioned to look for business with value and business that has been around for century doesn’t always guarantee that you are 100% safe from volatility. Look what happen to GE. I believe you should approach the market with caution and be vigilant. Don’t put all your eggs in one basket. In investment the terms you need to know is “diversify”.

It’s important to informed yourself, I’m not talking about the daily news. The daily news can impact things also but that should be the least thing you need to worry about because the market have a funny way of responding to daily activities. Do research about the business you want to invest in. Your hard earnings should be investing in valueable assets.

You don’t have to do it alone if you don’t want to there is a lot of Investment manager out there. Most of them have that saying “we do better when you do better”. It’s a way of telling you that they want you to make money so in return they can make their own profit. If you are not comfortable doing that you can also pick stocks base on valueable research.

One other thing to keep in mind is that the younger you are more aggressive you might be while someone that’s over 50 will want to be very conservative.

The next step is you must have the money to invest. It’s unwise to invest money that you will soon need. When the time comes the market might not be favorable to sale in your portfolio.
So make sure you have some kind of emergency fund which can cover all your bills for about 90 days. Lesson one in the Investment industry is to never ever borrow money to invest because in this game there is never guarantee. Also keep in unlike the banks the money you Invest are not FDIC insured! So words to the wise, make your investments count and invest wisely.

Finance, saving

Investment terms and their definition

Just like in every profession there are terms and conditions that an individual have to understand prior to making a decision. Some terms might be easier to understand  while  others  might take longer. Before making any decisions mean you’ll need some sort of understanding before understanding the full benefits of them. If you just getting into investing it’s important for you to review, research, and ask alot of questions. While in the process you might find yourselves understanding some of the aspects of investing but not all of it and that is perfectly okay because the world wasn’t made in one day.

Start the process small and steady. Let’s start with my favorite, all my investments is base on Dividend. Dividend is a distribution by a corporation. When the company makes a profits or a surplus a proportion of that is divided with the shareholders. Owning shares in a corporation really makes you part owner of that business. When they do well you get rewarded some company will go the extra mile just like Costco did these year distribute extra money because of a surplus. Dividends can be paid once, as a special use of them, or they can be paid more regularly, such as monthly, quarterly, semi-annually, or annually.

Portfolio is a collection of financial Investments
It can be stocks, cash,bond commodity and real estate, Arts and ETF (extend traded funds).
If you are talking to people who are using that term your circle is good. I’m always curious to see what’s in other people portfolio.

Asset / allocation: An asset is a resource or property having a monetary/economic value possessed by an individual or entity, which is capable to generate some future economic benefit. No matter how aggressive you are it’s always good to diversify your portfolio holding by allocating them to do so you divide them by classes to limit risk because some asset perform opposite to each other. For example we have technologies, pharmaceuticals, consumer staples and utilities just to name a few.

Don’t ever think of your car as an asset
It’s a liability it devalue daily and cost to maintain.
Bear market: is a market that is falling. A bear market has a downward trend, and someone who believes the market is headed for a drop
Represent by a red color and a bear.

Bull market: a bull market is a condition of a financial market in which price are rising or expected to rise usually represent by the color green and a bull.

Capital gain (or loss): is the difference between what you bought an investment for and what you sell if for. If you buy 100 shares of a stock at $10 a share (spending $1,000) and sell your shares later for $25 a share ($2,500), you have a capital gain of $1,500. A loss occurs when you sell for less than you paid. So, if you sell this stock for $5 instead ($500), you have a capital loss of $500).

Blue chip: You might hear reporters and others refer to “blue-chip stocks.” Blue chips are companies that have a long history of good earnings, good balance sheets, and even regularly increasing dividends. These are solid companies that may not be exciting, but they are likely to provide reasonable returns over time.

Those are just a few of the market terminologies
No need to learn them by heart. You can just look them up whenever but they are very important.

What is risk tolerance?
Is your ability to psychologically endure the potential of losing money on an investment.
All investment carry some type of risk while some can be riskier.

What are the best stock a bigginner investor should buy? That question do not have a straight forward answer as not all investors have the same goals nor same risk tolerance.

How do I become a successful investor?
Start with a plan, diversify, stick with your plan regardless of volatility. Focus on generating after tax returns.

Finance

Type of Investments

To start investing one needs confidence and tolerance, most importantly you need to have goals. You’ll need to choose an investing firm that meant all the crucial things that you are looking for. There are many of firm out there and you will need to selective. Also research and decide what you want to invest on don’t rush the process. After selecting which investment firm you feel comfortable with, open an account that platform will be where you manage when to buy or sell.

According to wikipedia Stock, Equity and Share market: is the aggregation of buyers and sellers of stocks which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment in the stock market is most often done via stockbrokerages and electronic trading platforms. Investment is usually made with an investment strategy in mind.

Money Market Deposit

A money market account (MMA) or money market deposit account (MMDA) is a deposit account that pays interest based on current interest rates in the money markets. The interest rates paid are generally higher than those of savings accounts and transaction accounts; however, some banks will require higher minimum balances in money market accounts to avoid monthly fees and to earn interest.

Money market accounts should not be confused with money market funds, which are mutual funds that invest in money market securities.

Money market accounts are better than CDs if you’re looking for a more accessible account. … MMA rates are typically higher than basic savings accounts and short-term CD rates. CDs can have higher rates than a money market account, but those are often the long-term accounts from two years and upwards. And you won’t be able to touch your money without being fine before it comes to terms.
Interest on money market accounts is usually compounded daily and paid monthly.

Index Fund

An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments. The main advantage of index funds for investors is they don’t require much time to manage as the investors don’t have to spend time analyzing various stocks or stock portfolios. Many investors also find it difficult to beat the performance of the S&P 500 Index due to their lack of experience/skill in investing.

ETFs are bought and sold throughout the day on stock exchanges while mutual funds are bought and sold based on their price at day’s end. An ETF holds assets such as stocks, bonds, currencies, and/or commodities such as gold bars, and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.

Annuities

An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. You buy an annuity either with a single payment or a series of payments called premiums.

Some annuity contracts provide a way to save for retirement. Others can turn your savings into a stream of retirement income. Still others do both. If you use an annuity as a savings vehicle and the insurance company delays your pay-out to the future, you have a deferred annuity. If you use the annuity to create a source of retirement income and your payments start right away, you have an immediate annuity. 

*Stocks
*Bonds
*Investment Funds
*Bank Products
*Options
*Annuities
*Retirement
*Saving for Education
*Alternative and Complex Products
*Initial Coin Offerings and Cryptocurrencies
*Commodity Futures
*Security Futures
*Insurance