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Bonds - Are They Right For Your Portfolio?

By: Bill Dufrane

For those wishing to invest their money - usually those wishing to put away a tidy nest egg for retirement or their children for school - there are a lot of decisions to make. You can’t jump into just any arrangement, and especially not the first offer that comes your way. Perhaps the most pertinent question you might ask yourself when investing is, what should oneu invest in - in other words, what’s good to invest in right now?

1. Put Your Money First

The final aspect of investing in bonds shouldn’t be the qustion as to what you should buy or sell, but rather, how much capital you are going to gain in the form of dividends. Remember, you aren’t buying stocks, you are investing. This means you expect a return on your investment.

2. Stocks

If you plan on investing in stocks, a general rule is to hold them for at least 10 years. Stocks will, over this period of time, outperform any other possible investment. Don’t even think about real estate, bonds, or commodities, stocks are definately the way to go, and it is not uncommon to see returns of up to or over 10%.

Of course, that is not to say that stocks are always the safest choice. Few investors actually buy stock and hold it for ten or more years. Also, with the exception of mutual funds individuals tend not to invest in stocks in general, but rather in a particular company. Also, even then, times change because new and better technologies come to pass. General Electric no longer makes most of its revenue from light bulbs, for example.

2. Bonds

If youre going to go with a bond, first of all, expect to pay a minimum of $5,000. You will definately want to invest in a bond that is rated AA or higher, and stick to a well known, major brokerage to handle your investment. Even with inflation you can expect to make only 4% profit per year. Of course, 4% of $5,000 is only $200, but over a period of 10 years that turns into $2,000. Of course, in today’s economy $2,000 won’t even last a month for rent, food, utilties, etc. Even so, bonds have advantages no other instrument enjoys. Since they have a set interest rate and maturity date, their behavior is much more readily predictable, given plausible assumptions about interest rate changes and other economic factors. You can’t attribute this kind of reliability to stocks, for example.

3. Currencies Or Commodities

The beginning investor should never engage in trading commodities or currencies, such as FOREX. Don’t believe the hype surrounding these investments - there is a reason why so much money is floating around out there - people are losing it!

4. Real Estate

If you think that the value of real estate is always on the rise, think again. Although a great way to make substantial gains, if you are going to make any real money you have to be able to invest a lot of your capital - more than any other variety of investing. Many simply can’t do it part time and try to make it their full time job. Some succeed, many fail.

5. Funds

If you are looking to make some quick cash, funds offer a great alternative to direct investing. Mutual funds, one of the more common types, pool investor money and diversify investment (usually) into a variety of instruments - stocks, bonds, currency, commodities, etc. Investors save money by not incurring a fee for every trade, but pay management fees of one kind or another (usually annual), and those can eat substantially into overall return on your investment.

Article Source: http://www.noviceinvesting.com/Article

For more great bond related articles and resources check out www.bondshq.info

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Asian Stocks Fall in U.S. Trading, Led by BHP, Commodity Shares (Bloomberg.com)
Dec. 21 (Bloomberg) — Asian stocks fell in U.S. trading as reports showed U.S. economic growth slowed and manufacturing in the Philadelphia region contracted by the most in more than three years. BHP Billiton and other commodity shares led the decline.

Should You Choose Stocks Or Bonds?

By: Bill Dufrane

The difference between stocks and bonds isn’t clear to those just starting in the wonderful world of investing. While stocks give investors part ownership of a company, bonds are loans made by investors to corporations or governments. Rather than benefiting from company profits the way that stock holders do, bond holders receive a fixed rate of return a fixed interest rate. Bonds only last for so long and have a termination date called the date of maturity. Also, they can take decades to mature, whereas stock exchanges happen with lightning speed every day. If you are just looking to make a quick buck with high risk, go for stocks. In comparison, if you need stability, say, for a retirement, you might choose bonds.

1. Risks Versus Rewards

As hinted at earlier, stocks have a higher rate of risk whereas bonds are more secure. Of course to say bonds are safer than stocks doesn’t automatically mean that you will always make money on bonds. A bond is an investment - and as such it may not be paid back. US government bonds are considered to be the safest type of bonds. Blue chip corporations (those with established performance records that span over many decades) are also very safe bond investments. Smaller corporations have a greater risk of defaulting on their bonds, but if the business goes bankrupt bond-holders are preferential creditors and will get compensated first.

2. Trading Bonds

Traditionally, bonds were the exclusive trading realm of huge corporations and banks. Not any more - even a savvy investor can begin trading bonds with as little as $5,000. Bonds bought and sold after the initial issues are quoted in increments of $100. A bond that is listed at 96 is selling for $96 per $100 face value.

3. Stocks Or Bonds?

Given what you have read so far, you might think that stocks are better for the short term and bonds for the long term, but the statistics do not lie. Bonds offer greater security and return on your investment than stocks, overall. The situation changes, however, when time spans of longer than 10 years are considered. The stock market has consistently outperformed bond investments by a large factor. This is because companies continue to increase in value and any short term fluctuations in the stock market become smoothed out. Overall, you should never put all your eggs in one basket - consider a bond as part of your portfolio to help cushion against market fluctuations. A mixture of investments is always the best choice.

Article Source: http://www.noviceinvesting.com/Article

For more great stocks related articles and resources check out stockhub.info

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The Basics Of Investing In Stocks And Shares

By: Joseph Kenny

Stocks can be considered a tool for building wealth, as they are a part of almost every investment portfolio. They represent the ownership of a company and are bought in the form of shares. Shares refer to the stock of a particular company. Your stake in a company depends on how many shares you possess, because these are considered a part of the companys capital.

The popularity of investing in the stock market is increasing constantly. Today, investment in stocks and shares is not limited to the well to do; even the average middle-class is getting into it in droves. The opening up of markets with advanced trading technologies has made owning shares easy for everyone. However, if you are planning to invest, do not depend on luck to get you returns. Investment in stocks is considered a very risky affair. It requires a high rate of return. You need to use a well thought out strategy and necessary tools to invest in the share market.

The allure of investing in shares and stocks, however, does not mean that every would-be investor has the know-how of this often-slippery market. If you feel that the get-rich-quick theory applies to stocks and shares, then it is a misguided notion, because stocks are not the answer to instant wealth. Just like the real estate market, the share market also involves a lot of risk. Yet, people are often under the misconception that they will get rich instantly if they invest in shares.

You can buy a share in a stock when a company first enlists on the stock market that is, at flotation or privatization. Alternatively, you can purchase shares once they are in circulation and are traded.

You could go to a stockbroker if you want to buy stocks. Stockbrokers do business with the stock exchange. They hold the shares in an account that is created in the name of the nominee. You can also keep your shares in the form of a paper certificate. Once the buying and selling of shares is over the transaction is made complete through an electronic system. This system is responsible for linking all the banks along with the stockbroker and registrars of the respective companies.

You can invest in international stocks as well. When a company performs trading in a stock market of another country, their stocks are known as International stocks. These stocks are traded like the UK stocks or, for that matter those traded in the Nasdaq in the US. All the stock exchanges in the world work in the same manner.

There is no guarantee when it comes to Investment in stocks but if you are ready to take a big risk then you can expect great returns on your investment. Despite the risk factor this form of investment has outperformed other investment options like bonds or saving accounts. So if you have the right strategy and you make the right moves in the stock market then nothing can stop the money from rolling in.

Article Source: http://www.noviceinvesting.com/Article

Joe Kenny writes for the UK Loans Store where you will can compare UK loans and offer more information on UK secured loans and other loan topics available on site. Visit Today: www.ukpersonalloanstore.co.uk

Stocks higher in early trading (AP via Yahoo! News)
U.S. stock headed higher on Thursday in what could be thin pre-holiday trading, with results from Nike Inc. and a second look at third-quarter growth in the U.S. likely to feature.

Asian Stocks Fall in U.S. Trading, Led by BHP, Commodity Shares (Bloomberg.com)
Dec. 21 (Bloomberg) — Asian stocks fell in U.S. trading as reports showed U.S. economic growth slowed and manufacturing in the Philadelphia region contracted by the most in more than three years. BHP Billiton and other commodity shares led the decline.

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Friedman, Billings, Ramsey settles trading charges (Market Watch)
WASHINGTON (MarketWatch) — Broker-dealer Friedman, Billings, Ramsey settled charges that it engaged in insider-trading and other activities while working on behalf of CompuDyne Corp., securities regulators said Wednesday.

Report On Stock Research

By: Stu Pearson

The report of stock research contains all the information like the fair value estimate of a companys worth. Likewise, guides on when to buy and when to sell stocks as well as the selling prices of stocks are also discussed and displayed on the stock research report.

A stock research report is accomplished by expert analysts who are renowned in their own companies and their industries. Their reports mainly cover strengths and weaknesses, lines of business, whats good and bad about recent stock investment decisions as well as some projections of what to expect from a company in terms of its financial health.

The stock research report also tells you whether a company is worth buying or selling and just when to buy and sell stocks from this company. Knowing such information can help you in earning back a great deal of profits from your stock investment.

In addition, the significance of such reports cannot be taken for granted, especially in a world where the market is unstable, wherein in a blink of an eye you might lose everything you have invested. Stock research reports keep you up-to-date with the latest and timely developments happening in the stock market. Stock reports are just one of the services provided by most online stock research providers.

When you sign up or joined an online stock research provider you were provided with stock alerts regarding new analyst reports plus some daily commentaries. Aside from that, you will also enjoy the privilege of having daily dose of expert opinion about companies they cover in the news. They also have portfolio alerts that tell you when your portfolio is underperforming or outperforming.

With a stock research report you will always be guided on what course of actions to take especially if you cannot monitor your portfolio regularly. Remember that the stock investment requires for keen monitoring or else you will find yourself losing money instead of gaining back more profit.

However, the stock research report is not a free service, most providers of these types of reports only offer free-day trials for new members but afterwards would require for a monthly or annual subscription fee.

Be sure to correctly choose the stock research provider; opt for those highly regarded providers that already have names in the stock investment market. Dont be fooled by those stock research providers claiming that they have the best stock investment solutions and promises you very high rate of investment returns. These promises often times just remain to be a promise that can never be realized since the provider that you have chosen is really not that knowledgeable in stock investment.

Look for those providers that possess credible portfolios and to be really sure you may try to confirm by researching further the authenticity of their claims. You may also try to ask your friends, colleagues and family whether they are familiar with the provider you are investigating. Even better still, ask people in the stock market if they are familiar with the provider you are inquiring about. If it is really true that they are a reputable stock research provider, then their reputation will echo the sentiment.

Article Source: http://www.noviceinvesting.com/Article

Stu Pearson has an interest Business & Finance related topics. To access more information on free stock research or on stock research online, please click on the links.

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