Unless you’re Warren Buffett, the idea of investing can appear puzzling or even daunting. Average people are simply unequipped with the right mental framework and adequate experience to make and stick with sound investment decisions.
Any attempt to throw your savings blindly on the first financial product you stumble on can end in economic catastrophe. Still, it’s no reason to park your retirement funds on a stagnant account that isn’t growing interested. Here are five great investments you should make today.
Invest in stocks of well-known companies like Google or in utility companies that are sure to stay financially stable in the next decade or two. These entities are backed up by market capitalization exceeding $10 billion. Choose stocks that have been consistently increasing their dividends and are working on promising projects and breakthroughs in their particular industry.
If you know what to look for in a property and can commit enough capital, real estate is a great low-risk way to invest your money. You can either purchase, renovate, and then resell the property again for a profit or build your own real estate if you have the labor force and education. Prospecting investors who believe the housing markets in their country are recovering but do not want to get involved in the actual procurement of property can invest in real estate investment trusts. This financial product prices in the underlying asset, which is real estate ranging from malls to apartment buildings.
Health Insurance Companies
Thanks to ObamaCare, which notably garnered huge acclaims and criticism, people are now required to have health insurance. According to reports, up to 48 million uninsured new healthcare insurance customers are being expected into the market. Investing in health insurance companies like Humana or United Health can be profitable long-term investments if one can properly time their positions.
Investing isn’t necessarily tied to financial products. Items of potential untapped value that’s priced cheaply at the moment can also become a good investment. Storage units are a good example. They free up space on your household or office, which could be used or converted into a more meaningful and functional area. This gives you a place to store antiques and valuables, a wise investment, that can be sold later for more money.
If you have good taste in wine, you can actually turn it into an investment portfolio. Buying wine and selling them a few years later can turn small expenses into considerable profits. A $250 bottle, for example, can be resold for $1,000 after 10 or 20 years.
Sometimes, it pays off to spend upfront. These few investments are a great start to get you where you want to be financially in the future.
Gaining Profit in Long Term with the Binary Options
A binary options trading has gain popularity in the last few years because investing in binary options is safe and secure, the potential payout is a fixed number and is always clearly displayed on the platform. There are no hidden fees, spreads or other surprises when trading binary options.
Interested in binary options as long term investment and don’t know much about it?
Let’s begin explaining binary option first!!
When you trade binary options, you have to choose your trade from a few main categories; binary options on commodities, indices, forex binary options, futures indices, and binary stock options.
The main thing that drives investment is a calculation. The more accurate you calculate and by having a positive mindset, success will be always there. Now, let discuss how binary options can be an effective long term investment.
Prepare before you invest
Technical analysis is a vital aspect of any kind of trade, like forex, stocks, or bonds. Due to the binary options trading nature, analyzing current and previous data of interesting assets is necessary.
You need a good understanding of market indicators in order to make precise price predictions, otherwise, you risk losing your entire money. For this reason, a binary options trading is sometimes called as an all or nothing option in some trading circles.
From the risk-averse to the risk-taker, know about it before you invest. When you want to trade for the long term you are betting the option will go up. Hence, analysis and right judging of risk is the key factor of long term binary options investment.
Stay updated on market news
Regardless of which assets you find most suitable to invest in while trading in binary options, market conditions can be quite unpredictable as there are many external entities that influence asset prices.
Something as small as raised trading tariffs or a shortage in certain commodities can have serious effects on assets such as currencies and commodities.
In this regard, one ought to be well informed on current issues that affect trade volumes and the trading market at large through platforms such as social media, the press, and independent websites that offer real-time news about trading assets.
Coupled with in-depth market analysis, following current market trends is one of the long term measures that every binary options trader has to maintain in order to continue on a winning streak of consistent profits.
Wait for the right time and duration
The first thing you need to do to have the binary options a long term investment is by ensuring you make your investments at the right time. After technical analysis and selecting the right investment, timing is what matters. With the binary options investments, there are different investment durations. The time durations determine the type of investment you are planning.
You will choose between the various time periods, and since you want a long term investment, you should select a long time period. You will also have to select an item to invest with, which will take a long time to generate the targeted profit.
Have the strength to lose
Above all, to invest in binary options traders you need to have the strength to lose. There is no investor who has gained 100%. To gain in the long term you should have the tenacity as well as the mind-set that you can lose. It is important to understand that some taking losses are necessary in order to gain in the long term; that’s how profits are made.
Forex Trading Basics Every Investor Should Know
Forex or foreign exchange trading, also known as currency trading has taken the world by storm. It comes as no surprise that this super dynamic market has appealed to scores of adventurous traders and investors due to its constant activity.
With the world’s economy is a constant state of flux these days and currencies the world over being on a roller coaster ride of value, do know that it can also be a risky activity and needs a certain level of skill for success.
You cannot jump in headfirst without a well-educated dip in the forex trading world-first unless you have no concern about what you stand to lose. Let’s take a quick look at some forex trading basics before you begin this fast-paced and thrilling journey –
What is the Forex Market?
Few people know how large the Forex (FX) or currency market really is and it keeps getting larger and is currently the largest financial market.
As we know the value of currencies keeps changing, and the movement of these currencies and their trading makes a huge, global marketplace with more investors than most other trading activities. The ups and downs in exchange rate values, price fluctuations and the like, keep the forex market buzzing and busy.
The eight most commonly traded currencies on a global scale are the British Pound (GBP), Euro (EUR), American Dollar (USD), Australian Dollar (AUD), Japanese Yen (JPY), Swiss Franc (CHF), New Zealand dollar (NZD) and Canadian Dollar (CAD).
How does it work?
The foreign exchange market runs for 24 hours from Monday to Friday, including three trading sessions spanning America, Europe, and Asia. Traders usually trade the main currencies during market hours and will find more trading activity for a particular currency depending on the time-based trading session you work in.
And of course, with the different time zones across the world and so many traders, it is constantly bustling, thanks to the advent of online trading and the way it has opened the space up. Many online forex trading platforms nowadays offer a number of different trading accounts, online assistance, and basic forex education as well.
Investors usually trade currencies in pairs and you have to keep a close watch on the particular exchange rate fluctuations, that take place largely to the demand and supply of the currencies. In basic terms, you will be buying and selling one currency for another, and playing off the two values.
You can start off in small micro lots to minimize risk while you get the hang of it and figure out if it is something you want to get into full scale. Since there are a limited number of currency combinations you can play with, this also makes it easier to manage your portfolio as opposed to dealing with a large number of stocks.
Awareness of Risks
You cannot study forex trading basics, without being clear that there are high levels of risks involved. Before you start make sure you are sure you can bear the risks and ascertain your investment goals and your experience level.
Before you start off, make sure you do as much research as possible and make a well-educated entry into this humongous playing field!
Why Inflation is Good for Forex Trading
When foreign currencies are being traded, anything that changes their value either upwards or downwards is a good thing. It does not really matter whether a particular currency is going to experience an increase or decrease in value – the key element is simply changed. As long as the change is happening, you can earn money by making Forex trades.
Inflation’s Impact on a Nation’s Economy
To truly analyze the effect of inflation on the Forex markets, it is important to look at the process by which inflation affects all economies. When there are expectations of an increase in inflation, chances are that the central bank in a country will react, generally by adjusting their interest rates. This is their economic control policy. If inflation rates are going up, the central bank will raise interest rates in an attempt to steady consumer prices, currency values and the economy as a whole.
Different interest rate adjustments can have varying impacts on the economy. For example, if the federal funds rate in the United States is lowered by the Federal Reserve, that will result in the interest rates that local banks charge being lowered. This will make getting a loan from banks more feasible. The chain reaction that is set off from this ultimately results in an increase in economic activity.
More money is invested in stocks, more products and services are bought and more capital is invested in new businesses and scientific endeavors. Companies expand and new companies are formed. The opposite happens when interest rates are increased.
How Does This Tie into the Forex Markets?
The key question for a Forex trader is: how do these changes affect the Forex market? The answer is fairly simple because a decrease in inflation will result in a decrease in interest rates that will trickle down and create a lower value for the country’s currency. In turn, when there is an increase in inflation and interest rates, there will be a higher value for the country’s currency as a result of the decreased economic activity.
There are two ways to make money in Forex trades: you can either go long or short. Going long means that you buy the base currency and sell the quote currency. This happens when you think the value of the base currency will rise. So, if you believe there is going to be increased inflation in the United States, you will take a long position with the dollar as your base currency.
If you believe there is going to be decreased inflation in the United States and lowered interest rates, then you will take a short position and sell the base currency to buy the quote currency. This will work once the dollar loses value. Either way, then, it is possible to make money. The most successful Forex traders are simply able to accurately assess market conditions to predict how currency values will change.
Knowing Bond Credit Ratings As Investment Options
It was only recently that there was a lot of furor when rating agency Standard & Poor downgraded United States’ credit rating from AAA to AA-plus. This meant a huge blow to the world economy as a whole because a number of economies across the world depend on the American continent for credit.
It also essentially meant that the borrowing costs for the American government, companies, and consumers were raised. As far as the bond values of these institutions are concerned, it proved to be a major body blow and reflections of this were clearly evident in the investment market.
Even though bond credit ratings have a major impact on individual investors, not a whole lot of people are really aware of how a credit rating impacts their bond investment. That is why it is important to provide them with an idea on Bond Credit Ratings and how it affects them in the longer run.
What is Bond Rating?
A bond rating is a grade given to bonds indicating their credit quality. There are various organizations like Standard and Poor’s, Moody’s and Fitch that provide this analysis depending on the bond issuer’s financial strength, or the ability of that company or government to pay the customers the principle and interest amounts on time.
Expressing the ratings
The ratings are expressed with the help of letters like A to C. ‘AAA’ rating signifies that the bond quality of that firm is at the top while ‘C’ indicates the lowest grade. Here is the list of expressions used and what they indicate-
AAA- High Credit quality
AA and BBB- Medium credit quality
BB, B, CCC, CC, C- Low credit quality
D- Bonds that are defaulting in paying principles or interest
How it impacts investors?
The ratings are used to analyze the credit risk that you as a bond purchaser are undertaking. While buying bonds either from a company or the government, you are lending them a loan. Your aim here is to get back your money within the time mentioned with a higher interest rate.
However, if the company, the government or the municipality fails to pay you back by becoming insolvent, you are in risk of losing what you had initially invested.
Assessing the credit risk of that particular institution becomes absolutely necessary for you as an investor so that you do not end up on the losing side. Organizations like S&P, Fitch and Moody’s are therefore there to protect your investment from loss.
Facts to remember
Credit ratings are the measuring stick used by most banks and fund managers while analyzing and establishing the suitability and adaptability of a bond as an investment option. However, for investors, it is also important to keep in mind that situations can change rapidly.
A company having an ‘AAA’ credit rating might suddenly end up on the losing side if its performance in the consumer market falls down. Regularly checking the rating agency websites might be useful in such cases. Brokering houses and investment banks can also help you in this area.
In the end, it can be said that bond investment even though mostly assures guaranteed returns, can sometimes be a risky option. Even while investing in the government bonds your money is not secured. Having a clear idea on bond credit ratings is therefore optimally important before you go on with bond investment.
How To Be A Cutting Edge Investor with IPO Calendar
IPO Calendars Offer the Latest Information in a Fast-Paced World
An IPO calendar is useful if you are interested in investing in stocks that are new to the stock market. It will tell you which companies are expected to begin publicly trading their shares, and when, so you can research those companies and make stock trading decisions. Each stock analyst will compile his or her own IPO calendar, so it’s important to remember that there is no single, official IPO calendar out there.
That means if you are looking for upcoming IPOs, don’t just settle for one source. There are several sources online, so consult them all. One analyst’s calendar might be different from another. Analysts who compile IPO calendars use information from investment banks, which they gather from their contacts in those areas. So you see, an IPO calendar is based on networking, quality of contacts in the field, and how hard an analyst works to compile the most up to date and accurate calendar possible.
They are released each week, which means the world of upcoming IPOs is a fast-paced business. The information required to compile an IPO calendar is sourced from investment bankers, who get their information from the underwriters themselves. Underwriters are directly involved with the company that’s thinking of going public, so they have official data on upcoming IPOs, direct from the source.
In the week preceding an upcoming IPO, the underwriters and bankers begin to formalize details about an IPO, which is why every good IPO calendar is updated weekly, to give the most recent information possible.
The world of initial public offerings is pretty exciting if you like investing and the stock market. Here’s a sample of things that were happening one year ago, a particularly exciting time for IPOs since we saw Zynga go public on the tails of Groupon and other social media giants.
December 2011 IPO Calendar
December 2011 opened up with just a handful of companies set to go public the week of December 5, 2011.
- One of these was Peak Resorts, a ski resort company with locations across the United States, filed last April. They had incurred debt from developing the Mt. Snow ski area in Vermont and hope to cover that debt with the Peak Resorts IPO. Peak Resorts has more ski resort locations than any other operator in the U.S. They hoped to raise over $40 million by listing on the NASDAQ.
- Another company on the December 2011 IPO Calendar for that week was HomeStreet, a bank based in Seattle. They were ordered by officials to raise capital for their banks, which are in Washington, Oregon, and Hawaii.
- Farmville was heading to the big time as its maker Zynga had an IPO in December 2011. It’s big news since the Zynga IPO was expected to be the biggest initial public offering since Google went public in 2004. The Zynga IPO also knocked the Groupon IPO out of first place as the biggest internet IPO since Google. Why? Because Zynga makes the games that provide much of the financing for Facebook, the hottest internet phenomenon since Google. The terms of the Zynga IPO were huge: they were expected to raise $1 billion. They offered one million class A shares at $8.50 to $10 per share. The Zynga IPO underwriters were Morgan Stanley and Goldman, Sachs & Co. Zynga was formed in 2007 and in just four years is present in over one hundred countries and over 200 million users per month. They make their money by selling premium services and virtual goods to a small portion of their users. What a way for the 2011 IPO calendar to finish up: with a boom!
November 2011 IPO Calendar
The November 2011 IPO calendar looked so promising a the beginning of the month. Then things didn’t turn out so well after all. Out of the 16 initial public offerings originally slated for the November 2011 IPO calendar, only a handful actually materialized and did well.
Many of the companies listed on the November 2011 IPO calendar were timing their market debuts to take advantage of the previous month’s market strength. One was Delphi Automotive, which actually filed for bankruptcy in 2005 and was in the process of shifting from a union-based North American workforce to one of the temp workers and low-cost countries like Brazil. Their IPO began at the low end of the price range.
Another company on the November 2011 IPO calendar was LaShou Group but their IPO has been delayed. Other November 2011 IPO calendar disappointments besides delays were offerings at the low end. Usually, analysts want to see fewer but better quality IPOs rather than a lot of cheap ones.
January 2012 IPO Calendar
Baby, it’s cold outside, but the calendar of initial public offerings rolls out another series of exciting events for investors. Several filings that month, but one name that’s very recognizable on the January 2012 IPO Calendar was AVG. AVG Technologies N.V. makes antivirus software and filed that month at a price of $16 to $18 per share. They planned to trade on the NYSE with symbol AVG.
Also up on that month’s IPO Calendar was Peak Resorts, only this is a withdrawal from the list. It’s a restaurant/hotel company that owns and runs ski resorts across the US. The Peak Resorts IPO was announced late last year.
Biggest news a year ago January 2012 was the Renewable Energy Group IPO. They priced their initial public offering at $10 a share, which was a bit low according to analysts. It was the only US IPO planned for the third week of January 2012, so it was watched carefully. They had actually first filed in July 2011 for $100 million.