Tag: wealth

  • How to Invest In Stocks?

    How to Invest In Stocks?

    How to Invest In Stocks?
    Investing in stocks is an outstanding approach to grow wealth. But how to start? Follow the explanation below to learn how to invest in stocks.

    There is a difference between understanding that investing in stocks is a reasonable financial decision and understanding how to invest in stocks. If you are a beginner it can be very important. Yes, investing in stocks is a reasonable decision in any circumstances. But do you know how to invest in stocks? It isn’t just about picking some stock and putting the money. For many people, the stock market is a big enigma but it hasn’t to be. Also, many people are questioning how to invest in stocks and still, this is complicated for them. So many potential investors are scared to start investing. 

    But we have to say they are making maybe the biggest mistake in their lives. There are so many benefits of investing. The effort that it takes to learn how to invest in stocks, will result in great benefit. Anyway, the advantages of investing far outweigh the efforts spent to learn. One thing is for sure, investing in stocks isn’t frustrating at all. At least, it shouldn’t be. 

    So, let’s start. 

    We are going to explain how to start investing in stocks

    First of all, you can buy and sell shares in any public company at any time. The principle is almost the same as any other business. The point is to buy a share of stocks in the company when it is cheaper than its actual value. The next step is to hold on for some time until its value has risen to the position that you feel satisfied to sell it for a profit.

    So a successful investment could be (please keep that in mind this is a made-up example) as followed. Let’s say you bought a stock of a company and you paid $20 per share. And you hold on to this company for 3 years. After that period of time, your stock has grown at $50. You wouldn’t like to miss this opportunity for profit and earn 2.5 times more than your initial investment was. Even better is if you bought a dividend-pay stock so you can gain profits along the way without selling any of its shares.

    How really to invest in stocks

    You cannot start without any knowledge about it. Therefore, you have to know the fundamentals of investing. The main goal of investing is to make money. That will not be complicated if you have a plan and investment strategy. So, we already said that investing is simply buying assets that are supposed to grow in value. That can be stocks, bonds, ETFs, mutual funds. But keep in mind that you don’t have guarantees that your investment will increase in value over time.

    You are wary of taking risks now, aren’t you? Don’t be, we know your hard-earned money can be at risk. You may choose some low-risk investments, for example, bonds. But historically, stocks generated larger returns than bonds. And you are seeking wealth. You may ask why to invest and not put your money into a savings account. Well, investments will give you higher returns, particularly over a long time.

    But you have to decide where to invest, what are your financial goals. We are talking about how to invest in stocks. And if you follow some rules it can be safe and provide you high returns.

    Let’s buy our first stock

    As a beginner investor, you can invest for the long-term or invest in companies that mean something special to you personally. It is always easier to make a success with the long term-investing. Trying to make short-term profits can be a tricky part for new investors.
    So, in short-term investing, you have to know when to buy and sell. That requires great research, education, and a bit of luck. Yes, why not say that. If you choose a long-term investing, all you have to do is pick a great company at a fair price. Your stock will increase in value over time. The possible costly errors will be reduced as the longer your investing horizon is. Invest in companies that you are already familiar with.

    Okay, let’s assume you found a company you would like to invest in. So, you can buy shares in that company through a broker. Brokers provide you to easily do that. Remember, they are charging a fee for the services. Buying stocks is simple like you are picking something from the online catalog. Just pick the stock you want, the number of shares you want, and your purchase is completed when you put money. You have great options with online brokers but you have to check them before starting working with them. Also, online brokers will charge you lower fees. How to choose a broker you will find HERE.

    Follow three basic strategies when investing 

    Start investing earlier
    If you want your money to work for you, and you start investing as soon as you can, the more chances it will have for growth.
    Stay invested as long as you can
    This is something about compounding returns. The point is to stay invested, meaning don’t go in and out of the market. If you stay invested you’re able to earn more money than you have already earned.
    Risk management
    You’ll need to spread out your investments to be able to handle the risks. Never put all your money in just one investment. It is too risky and dangerous. Diversification is the recipe for successful investing. When you have several investments added to your portfolio, the risk of losing money is lower. Some of your investments will be winners, some will not. But over a long haul, you will profit.

    Stocks pay you dividends

    That will provide you a stream of income and without having to sell even one share. We know you’ve heard how investors are interested in the drop and rise of the value of stocks. But, trust us, they are very interested in the dividends paying stocks. To make clear what dividends are. They are amounts that the companies are paying to their stockholders for each share of stock they hold. It is commonly less than one dollar, for example. But…

    Let’s say you want to buy shares in the company at $10 per share. And you want to invest $2.000. So, you’ll have 200 shares of that company. That company pays a dividend of $0.10 quarterly. What does it mean? This means you will have $20 every three months, $0.10 x 200 = $20. It isn’t much, but for one year you will receive $80 and you can reinvest it or buy some other stake of shares in different companies. Anyway, it is an additional income from one stock. When you become a large investor, dividends only could provide you a nice life. For example, instead of $2.000 investment, you were able to invest $2.000.000. In this case, you would own 200.000 shares of the stock mentioned in our example. That would mean you could have a $20.000 per quarter or $80.000 per year just in dividends. Not bad, right? Moreover, you didn’t need to sell any of your stock. 

    The companies can change their dividends. It is normal. They can pay out a smaller dividend per share or raise them. You have to know that dividends are not guaranteed. They are just a nice bonus, particularly with a solid company with a long history of raising dividends.

    How to invest in stocks in four steps

    It is very important to estimate what some company means to you. If the company has some meaning to you, you’ll be more interested in it. You’ll be more inspired to research it and you can invest with confidence. So, that will be the first step before starting investing in stocks. Find and examine a company that means something to you. 

    The second step is to examine how the company prevents its rivals to take over the control over its market. In other words, it is a so-called moat. Big companies with famous brands have a moat, for example. They are unique in the market, well-recognized, and well-positioned. The competitors can stay on the coast and cry but you will have a safe investment. 

    Also, pay attention to management. Are the people who are the leaders of the company competent? You don’t want to invest in the company which is led by corrupted managers.  

    But maybe the most important part of how to invest in stocks is to find a company with a high safety margin. It is a financial ratio that estimates the number of sales that exceed the break-even point. In other words, that is the point where the company stops being profitable.

    Also, the safety margin represents the difference between the intrinsic value and the market price of stocks. To calculate the safety margin use this formula:

    Safety margin = sales – the break-even point

    Bottom line

    You may ask how much you should invest in stocks.
    The amount of money you should invest in stocks is up to you and your financial condition. Never invest more than you can afford to lose, that’s the rule. Even the smartest and most advanced investors sometimes can be dried. Never invest in something you can’t understand. Always calculate the risks. In that way, you’ll be able to recognize the potential reward and the probability of loss.  Does the stock have a history of giving returns, how losses could occur, are important questions and you have to find the answers. 

    Don’t jump into the stock market without knowing why. Do detailed research to avoid big losses and failures.  Your most important step should be to research the companies, though. The final step is to buy a stock and start getting rewards. 

    While this article isn’t meant to cover everything you need to know about investing in stocks or everything on how to invest in stocks. That is the no-end process. For more to know, participate in our Full Trading & Investing Course.

  • Mutual funds are an opportunity to make wealth

    Mutual funds are an opportunity to make wealth

    3 min read

    Mutual funds are an opportunity to make wealth 1

    What are the benefits of mutual funds? How much do they cost? Which funds are right for you? What should you consider before investing?

    These are just a few of the questions we’ll answer here.

    Mutual funds are not bank deposits and are not guaranteed by any government agency.

    They involve risks, including the potential loss of some or all of your investment. Past performance is not a solid sign of future performance.

    However, it can help you evaluate a fund’s volatility and how it operates in various market circumstances.

    WHY INVEST IN MUTUAL FUNDS?

    Mutual funds are an opportunity to make wealth

    Advantages

    As an example, more than 100 million Americans use mutual funds to invest in their long-term goals. Here are some of the benefits they offer:

    Professional management

    When you invest in a mutual fund, your money is managed by full-time professionals. They research and select investments that are appropriate for the goals of each fund, and monitor the fund’s performance so they can change the portfolio when needed.

    Diversification

    Buying shares in a mutual fund make it comfortable for you to spread your investment over many different companies and industries. This may help to protect your assets over market volatility. Nevertheless, diversification doesn’t ensure a profit or defend against a loss.

    Choice

    Mutual funds give you a wide variety of choices to help meet your financial goals. You can invest for different objectives, at different levels of risk and in different kinds of securities.

    Affordability

    Mutual funds allow you to invest with a nearly small amount of money. Without a fund, it would usually demand a much considerable investment to build such a diversified portfolio.

    Liquidity

    You can ordinarily sell your shares at any moment and for any cause. Anyway, there may be exceptional moments when fund purchases are limited because of some extreme market requirements.

    Automatic Reinvestment

    Mutual funds give you the choice of reinvesting your yields and capital gains in new shares of the fund, without being indebted a sales charge.

    A mutual fund is when a group of investors gives money to managers to invest in diversified securities. It can be stocks and bonds, for example. Because it’s group, every part-owner as the investor is, profits and loses an equivalent piece. The costs of the mutual fund are divided according to the cost proportion. And, because the funds are diversified among stocks or bonds and other securities, they are regularly lower risk than individual stocks or bonds.

    To some investors, choosing individual securities to invest in and guide can be a risky task.

    Access mutual funds. With benefits like added assurance and lower risk, mutual funds are one of the best investment opportunities to enter the market. But before you take your place into the group funds, you need to know the tricks.

    Mutual funds are under the control of money managers.

    What is Mutual Fund Investment? 5

    They create portfolios for investment with a pool of money. Often, they have different kinds of investment goals. Some managers, like fixed-income managers, focus on generating low-risk, high pay-off investments for their funds, while long-term growth managers try to beat the Nasdaq or S&P 500 during the fiscal year.

    Shares in a mutual fund are typically bought at the fund’s current net asset value (NAV, or sometimes NAVPS) per share. This figure is determined by dividing the total value of all the securities in the fund by the number of outstanding shares.

    Mutual funds are actually investments like buying stock in companies.

    Investors purchase shares into the mutual fund. That, in turn, provides them a right to the fund’s assets. Hence, the value of the mutual fund represents the value of its portfolio.

    Let’s say you invest in a mutual fund. Well, not you but a manager will invest the public funds added to the fund. A manager will invest them in several securities, for example in stocks and bonds.

    The manager is ordinarily selected by a board of directors and is frequently an owner of the part in the fund.

    Such a fund manager will pick analysts to help in making investment decisions. Majority of funds will engage some accountant who’s task is to measure the net asset value of the fund every day. That will define the price of the share in the fund.

    Most mutual funds also have compliance officers who keep up-to-date on regulations.

    When investors purchase into a mutual fund, their money is managed by the fund manager. Such professionalist invests that money in different assets with specific intentions for risk and returns in judgment: like long-term increase or fixed-profit.

    Some funds may be more dangerous than others, that’s true. But usually, the composition of a mutual fund manages risks well-known low.

    Mutual funds only trade once daily and are often part of a 401(k) or an individual retirement account, IRA.

    The biggest benefit of mutual funds is, they are handled by someone other than the individual investor. You just have to put the hard decisions in an expert’s hands. The fund manager is more prepared for reasonably allocating our funds than we could do it by ourselves.

    The mutual funds regularly submit several portfolios with a group supply of money. So the personal risk to all investors is lessened. So we can say that mutual funds are honestly low-risk and high-reward.

    But, mutual funds include some fees in the kind of annual fees and stockholder fees.

    Annual running fees usually are 1%-3% of the annual funds under control. The stockholder fees are in line with the commissions paid by when buy or sell funds.

    Besides that, an obvious lack of mutual funds is that you don’t have constant control of stocks you’re investing in. Hence, for some traders, this may produce some difficulty, particularly if your fund begins dropping.

    Don’t waste your money!

    risk disclosure

  • Investment Opportunities – How To Identify

    Investment Opportunities – How To Identify

    How To Identify Investment Opportunities
    It isn’t easy to find investment opportunities and anyone can fall into many traps while seeking that. Here is how to avoid them.

    By Guy Avtalyon

    Someone would say: We all know the basic words to successful investing: Buy low and sell high. But it isn’t so easy to find good investment opportunities.

    What else or different you can tell us?

    First of all, I have to tell you that investors need to have rules.

    Otherwise, the common saying can be difficult to perform, especially when many of your friends and colleagues are doing the opposite. If you don’t have a solid structure and order you are predestined to fail.

    Investing or trading is like a robotic work, without emotion and always strong adherent to your rules.

    You can find more and more investment opportunities opening themselves up to the investors. But not all of them are good investment opportunities. In fact, so many opportunities have drawbacks. First, you can be confused and may not pick the right one. Second, you might want to pick too many. That is dangerous per se. You can end up running like a headless fly, monitoring too many stocks, with investing more than it is reasonable. Hence, you may neglect something very important for your investment goals and financial security. The consequence easily could be your empty bank account or you’ll end up in debts.
    The following are things to look for when finding an investment opportunity.  If some investment opportunity has most of these things or all of them, you are looking at one that is likely to bring you wealth.

    For example, if you don’t see yourself owning stock in a company you are looking for in the next ten years, then you should stay away from investing in that company. Most of the money made in business investments come from owning stock in the company. Investors are leaving it alone until the value rises and reinvesting your dividends versus rapidly buying and selling your stock in a business. That is the so-called long-term viability.

    You have to measure the risk involved in a market investment against the potential reward. A good ratio is one to three. After that, you should set up a maximum acceptable loss.

    What is the first rule of investing?

    BUY LOW!

    Determine the baseline value for an investment or trade, and wait to buy it until the price is below what is reasonable. When the stock market declines and other investors panicked and start short selling, that is the best time to look for buying opportunities. Ideally, you want to purchase an asset after the price falls significantly, with the expectation that it will rise again in the future and produce a good return.

    All rules of investing

    The second rule of all investment is to SELL HIGH!

     

    After the price rises dramatically it is time to consider selling an asset. This is often a time of stock market growth when many people are impatient to buy into a rising market. When some investment shows significant gains, this is the ideal time to cash out and lock in your return. You could gather the income into a secure investment or look for a new underperforming asset and try to repeat your success.

    How to find investment opportunities?

    The golden rule is to LEARN FROM YOUR LOSSES! Yes!

    In trying to buy low and sell high, you are forced to make some mistakes. If it is easy to buy low and sell high, everyone would do it. Try not to lose sleep over it or give up investing altogether when you lose money on some investment. Maybe you just have to take a break for a while and later capture market returns with an index fund. Or you will learn to more carefully research investment before putting more than you can luxuriously afford to lose on the line. Your fears can’t be the limiting factor that mutes your potential. Let that storm be the fuel that moves you to success.

    Where to find investment opportunities?

    Use your fear to produce better outcomes!

    You should have a list of the investments you have made in the past. Think about what you could do to produce better outcomes in the future. You can get colossal insight from physically writing down outcomes you would like to avoid. That can prevent you from making emotional investment decisions. If you have a financial planner or adviser or someone else who will look over your investment ideas, that adds gravely deeper layers of reliability and responsibility.

    You have to have a plan to avoid later regrets!

    Of course, that large loss can cause you to regret because of bad investment decision. There’s also the regret that comes from watching other investments got wings. When you have a good plan of inventorying and you analyze your investment options often, that can help avoid a negative result. Writing it down makes it easier to stick to a plan.

    Ultimately, investing is about finding the lifestyle that you want to live. So, you can’t do that if never find good Investment opportunities.

    Choosing wisely may produce enough wealth to allow you to retire sooner or walk away from an annoying job. All you need is to use logic and stick to a financial plan to successfully build wealth.

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