Fred's Finance, Investing & Marketing Blog

Investing money in 2011 and 2012 puts the investor between a rock and a hard place as investing has become more difficult. Investing in stocks has gained favor vs. bonds in recent months. What’s going on, how should you invest, and why do I say investing has become difficult?

The stock market just about doubled in value between early 2009 and early 2011, and investing money in stocks (equities) and selling bonds appeared to be the new trend in investing for 2011. Does this mean that investors are confident that the U.S. economy is well and getting better? Not necessarily. More than likely it means that investing in equities appears to be the lesser of two evils. Bonds and bond funds have a cloud hanging over their head. Interest rates could start rising significantly in 2011 or in 2012 and this spells trouble for anyone investing in bonds.

There are very few statements you can make in the world of investing money that are universally accepted as fact. One of them is this: when interest rates go up, bond prices (values) go down. In simple terms, the fixed interest payments that these securities pay become less attractive to investors as rates go up. So, many investors will sell their bonds… sending prices down… and put their money someplace else. Since the government had been holding interest rates down for months to stimulate the economy, rates are likely to go up in 2011 or 2012, if the government stops this policy as planned. Investing money in bonds will then be a loosing proposition if rates rise significantly. That’s a fact and about as black and white as investing gets.

Stock investing is more of a gray area. High and rising interest rates can slash corporate profits and this tends to send stock prices down. But in early 2011 rates might have been rising, but they certainly were not high by historical standards. Corporate profits were strong and investors dumped bonds and switched to stocks. The other major alternative for investing money was safe investments like one-year CDs and money market funds. With both of them paying less than 1% a year, there was little reason for the average investor to invest in either. The only real advantage in safe investments at these low interest rates is safety and liquidity.

In other words, none of the three basic investment areas where most people invest look very attractive. That’s what makes investing money in 2011 and going forward difficult. If interest rates continue to climb bonds are guaranteed losers and stocks will eventually get hit. Safe investments might not look attractive when they start paying at 1% or 2%, but they will at 3%, and that’s where folks will put there money.

So, how should most people invest money for 2011-2012? Cut your exposure to bonds and avoid long-term bonds and funds that invest in them. Long-term bonds and funds will get hurt the most if rates rise significantly. Go with intermediate or shorter term bond funds. Move some money into money market funds. They are safe and the interest they earn will automatically go up with rising interest rates. Investing money in stocks or equity funds should remain a part of your overall strategy, but avoid aggressive growth issues or growth funds that don’t pay significant dividends. Look for dividend yields of at least 2% in high quality stocks or equity funds. Growth stocks are often hardest hit when corporate profits fall.

Diversification and balance are your keys to success when investing money in 2011-2012. There are times you can invest aggressively, and there are times when a more cautious approach is called for. With interest rate hikes looming over the markets, this is not the time to throw caution to the wind.

Many a time, I see many newbie online investors empty their bank account into online investment programs they know little or nothing about its reliability and continuity and before long, they’ve burnt their fingers. Each time I witness this incident, it is something that really makes me very sad and empathic. So after witnessing and hearing of many of this victimizing incident for some time, it dawned on me to offer some help in my own little way by writing out some of the features online investors should look out for in a reliable online investment program before they start investing their money into them: in other to help ameliorate this pathetic situation.

Find Out If It Has An Offline Version

To know if an online investment program is reliable or not make out time to find out if the online investment program has an offline version. If you check and you see that there is an offline version, take a further step to find out if it is not a gambling program, if after your researches, you find out that it is not a gambling program then you know that its online version will be reliable; this is so as investment programs, online and offline are the same. Many people think the internet is a kind of Disney land where money is digitally processed- so even the riskiest of online investment programs they empty their bank account into them in other to get an overnight turnover.

The Percentage Of Interest

By the percentage of interest, I mean the percentage the investment firm promises to pay you within a given period of time. Yes the percentage is what you really have to critically scrutinize to see if it is normal and realizable and can stand the test of time. If you find out that the promised percentage is on the outrageously high side, then don’t invest in it; because if the percentage is very much on the high side, it means either it is a gamble where you are likely to loose your money within a twinkle of an eye or it is a scam program established to trap people’s money by offering outrageous percentage of interest.

The Programs Pedigree

Before you choose an online investment program to invest into, find out its pedigree. By this I mean find out how many people that are doing the business and how many percentage of them are actually making good profit from it. If after your research, you find out that its only a tiny percentage of the total people involved in it that are actually making substantial profit from the program, know that the program is not reliable and consequently you shouldn’t invest in it.

And another thing, find out how long the program has been on. If the program has stood the test of time, then the program is reliable and worth sticking out your neck on with some percentage of your money.

In the current financial marketplace, with low interest rates and market volatility, getting a really good return on your investments is difficult to achieve. Most investors are always looking for that special product or stock that offers extra special returns. However, to get the sort of returns that are significantly above average requires not just excellent research, analysis, financial advice – and luck; it also requires courage, as you are entering into the realms of risk-taking.

It is a truism that risk and reward go hand in hand – the bigger the potential investment return, the greater the potential risk of loss. So the question is, when it comes to investing your hard earned savings, have you got the stomach for what could be a roller coaster ride, in order to ensure you get the best possible investment returns?

As an investor, your attitude to risk is crucial and should be one of the first things that you discuss with your financial adviser. But discussing it is perhaps not enough, as it allows subjectivity to creep in, both on the side of the investor and adviser.

This is why several financial adviser firms now use risk-profiling tools to provide objectivity to the whole investment planning process. These tools are not just gimmicks but provide the basis for a meaningful discussion that is not “led” by the adviser.

The results can be surprising and can highlight gaps between an investors’ actual and perceived risk tolerance. They can also show disparities between the investors’ risk tolerance and current asset allocation. Also, if you are investing as a couple, both of you should take the test separately because it can highlight differences in attitudes that need consideration.

There are various tests out there, including some sophisticated online options. Several providers of investment products also offer risk and asset allocation tests but these should be treated with caution as they veer towards recommending their own products. Personally, I quite like the simplicity of questionnaires provided free by some financial advisers as they are quick and easy to complete, make you think and can lead to a productive dialogue with the adviser.

Most tests measure an investor’s risk tolerance and create a risk profile for that investor, along with a recommended asset allocation strategy.

Obviously other factors also come into play, such as an investor’s risk capacity. In other words, the investor may be willing to take risks but may not be financially well placed to do so. So the ability to absorb losses should also be taken into account.

Similarly, age and timescales have an impact. For example, whilst the attitude to risk of investors approaching retirement may still be gung-ho, they should perhaps consider safer investment options. On the other hand, even cautious younger investors looking at an investment window of 10 to 20 years will actually find that the likelihood of losses in equities is small and the returns greater. For them, equities carry far less risk than someone on a short timescale.

A final thought. Taking the test alone can help you, as an investor, understand your attitude to risk and whether your existing portfolio is right for you but it cannot help you pick products or investments. This is where you still need to talk to a quality financial adviser.

Eye Level Holdings LLC never gave up when many businesses were forced to close their doors. They fought hard by staying informed about new technological developments and studying past inventions that were highly successful.

Eye Level Holdings LLC Maintains Integrity And Financial Strength

Besides operating as a holdings company, Eye Level Holdings LLC takes pride in offering high quality services, integrity, and absolute financial strength. Eye Level Holdings LLC provides holding services for many technological companies throughout Arizona. Based in Phoenix, Eye Level Holdings LLC began a few years ago, purchasing a stake in several high quality companies that deal with the technologies of search engine optimization, media solutions, interactive software, and computer information systems.

Eye Level Holdings LLC — A Company That Gives Back To The Community

Although Eye Level Holdings LLC invests in businesses, it also invests in the community. Eye Level Holdings strives to stay involved in the cutting edge of the latest technology, but also realizes that a well-developed community contributes to a higher functioning economy. Therefore, Eye Level Holdings LLC stays heavily involved in the community and focuses on its philanthropic efforts. Eye Level Holdings LLC devotes lots of time and resources to charities and chooses charities based on employee nominations. Because they see the executives of the company giving back to the community, the employees follow that lead and they are proud to work for a generous business that cares about more than just making profits.

When there are credit card debts, settlement companies can be chosen as the last stop before filing bankruptcy. They can pull you out of the devastating financial position you are in giving you a chance to avoid bankruptcy.

When people obtain loans they are sure that their earnings would be enough to pay them back. However due to the recent recession many people have lost their jobs and they have had to spend their savings to survive. Because of this they have no way of paying back debts.

The banks are also worried about receiving their money back. However when people turn down the continuous reminders of the banks it has no other option than to write off the debts. They can also take legal actions and declare you as insolvent. It is always a messy business and it is advisable to pay debts than facing all these complications.

Some people might think the bankruptcy is better than paying the debts back. But as black listed people they lose all privileges given by the banks and the opportunity to obtain any more loans. Once the recession is diminished they will have to regret their position.

Therefore by any means debts should be paid off. When there is no money at hand to pay, settlement companies can come in to aid. They can negotiate with the banks and settle the debt at a reduced position. Then it would complete payments on behalf of the client allowing him to pay within a longer time. It gives three benefits for the client. Firstly when there are multiple credit balances, they can be dealt together by these negotiation methods. This means lesser complications. Secondly he would not have to pay the full amount but only a percentage of the debt. Thirdly it would buy him more time to pay back loans.

Therefore it is more advantageous to use such a service to get out of debt than accepting bankruptcy.