A sub-category of finance is personal finance which depends on financial planning.There are some steps of personal finance:
*Asset means property which included home,car,stock,bank balance etc.It depends personal income and expenses.
*Financial Plan is most important for now a days.It help us to reduces our expanses and increases our profit or income.
*Investment is one of the part of Personal finance.Now a days people invested on business,stock market etc.
*Retirement Planning is another important area of Personal finance.It means how much a man get asset or money after retire.
*Tax Planning is one other features of personal finance. Managing taxes is not a question of if you will pay taxes, but when and how much.Now Government gives many policy of tax deductions and credits, which can be used to reduce the lifetime tax burden.
Yaa, so we all are pretty aware of the fact that market is falling in this recession period, indeed; the graph is moving downwards. Same fall with US economy…its going hand-in-hand with finance market. Therefore, there is a tie-up between this ceasing market & this flimsy economy….but, this tie-up has generated some new, fabulous scopes of investment in a specific set of stocks. Investment, at this time, in those stocks is a wise plan….guess which are they? “Blue chip stocks”!!
Really, man….start saving some of your money right away for investment in blue-chips. At present situation, the trades with Blue-chips are very likely to turn out to be damn profitable….because these stocks are carrying good potential & better possibilities. Why? Reasons are below:
1) No body is predicting, that the blue chip stocks are or will be on sale.
2) All these kinds of stocks are being ignored & undervalued by most of the buyers currently; the rates are also at their lows. Let me give an example:--As of March 9, The trade for Apple Inc. had been running at $83 per share, where as in last may it had been traded at $189. Anothet stock, Sony is currently running the trade at $19 per share where as in last June it was sold at $51.
3) At least 193 stocks out of the 500 Blue-chip companies enlisted in the S&P have an earnings-based price to earnings ratio of 10 or lower for the past year. That means, they are maintaining such ratio constantly for 1 year now….
All S&P 500 companies do not have the status of “Blue-chip”; for example, in the year 2007 only 36 were there. So, a bit search work is required in order to find themout….but, too much endevour isnt needed at all. Just some basic stock market research over your computer…and you’ll find those companies you are planning to invest on. Just listen to the names. Check out the blue chips and pick your favorite.
1. Portfolio matters An important factor is portfolios. Off late, so many portfolios have gone extremely heavy in stocks in market, thanks to the success of this market over the past few years. But this strategy is highly risky. It is a safer way to have less or, at least half of the portfolio in stocks. You can easily make up the rest part with cash. Bonds, property etc middle-ground investments are also another option to fill up the rest portion. “Ready made balanced portfolio funds” have become damn famous off late. A lot of investment houses have launched these new types of portfolio funds. One latest fund among all these is New Star with its Tri-Star product. This fund is a shorter and easier method to make a portfolio of balanced (equilibrium) investment. With a small holding of cash this profitable fund is divided almost equally between bonds, stocks & commercial property.
2. Issues regarding equity Isas, equity bonds and CTFs Products like Equity ISAs, equity bonds, or CTFs normally track one particular index. Sometimes, professional managers also takes care of their management. Those products, which are tracking a specific index figure are completely dependant on market. Their performance is also highly depending on the overall performance and ups & downs of stock market. In stock market, many basic equity-based bonds track markets. Another good option: fund of funds. These make investment in various different funds, and thus the possibility of spreading risk is more. In today’s market, you can hold them within an Isa wrapper, but there is usually a fee to switch funds. Courtesy to the skills of the professional manager looking after your equity Isa product, the managed fund you have invested in via your Isa should weather the downturn more effectively. Suppose, you own a risky fund; for example- a high-growth fund which invests in smaller stocks. Then it would be a really considerable option to switch to a cautious managed fund.
3. Other types of investments Always try to follow the stock buying trends and time of the fund managers, and analyse the situations in which they are buying. If you keep your eyes open, you’ll see that the managers normally do not follow the general public trend of running after only those ones which are working at present and valued only at present by buyers. Rather, they search for those stocks which carry definite prospects for future, but are not very valuable asset in market at present, so not valued by public. You should better go for those defensive stocks, in case you prefer to invest in individual stocks. It can really be a nice and considerable option to buy those stocks whose price rates normally do not fluctuate or respond to the volatility of market. Some example of those defensive stocks are those of utility companies, pharmaceuticals, tobacco producers, food makers, etc. Don’t get frustrated or disheartened due to this prevailing recession in market…..it does not necessarily mean a down or lethal situation for investment. Right now, many situation managers are considering downturns as fresh buying opportunities. So definitely you as a potential and willing investor can follow their ways. Some situations manager are even saying that as due to this recent downturn stocks have gone overvalued, naturally very little no. of shares are there to choose from for picking up and the fall has widened the buying opportunities.
Ups and downs are on in stock market as usual, and especially prices are more fluctuatuing amidst this recession which still looms over the market, which is already under pressure. Those, who are set to invest in this inconvenient market, should keep that point in mind. But, yes, you are the investor, who is taking the risk; you have to get the best fruit possible out of your investment even in this stormy market scenario. Keeping your stand here in mind, I planned to share some tips with you guys for taking care of your invested money in this present stock market.
1. No fear-fear is useless Stock investment is a long term proceedure, lengthy way of investment. You must be mentally prepared to walk through too many price related ups and downs, and regardless of present market situation, many different and fully unforseen market outcomes you may face at times which no way match the forecasts. There may come scary and staggeringly low price rates, fraustrating conditions and greatly uncertain market phases…..and you have to be ready to take them all. Everybody does, dear. Equity stocks should outperform every other asset class in long run.
2. If can not play, sell up & forget It is true, that at very recent past, the stock market had had a fine run. A lot of investors have done well. But, its true as well that stock game is a nerve game, and not at all situation we can hold on to it. If at any point (for example, when the rates are extremely fluctuating) you feel that your nerves are failing and you can not take the tension any more, may be you would very much like to do the trade at a more safe mode, and be at safer zone with your investment. Selling away your stocks that you hold may be a worth considering decision at that moment. I would advise: sell up what you have, take home the profit and put your money in a savings account. An expert stock analyser says its totally ok to hold cash for just a certain period of time and sell it off then to get profit in case you have no year long investment plan. And, he says that it is no way mandatory that you have to have a long-term investment planning, if you are not ready. In fact, not all the stocks in market are ideal for longer time period. Selling up some of your stocks stored and putting the profit in a high interest rate account is profitable as well, and makes sense.
I am in a bit hurry today, so that’s all for the day and would get back with other tips on my next post. It is to be continued…….
Target-date retirement funds are an excellent way of investment after retirement for people who lack the time or the expertise to allocate and monitor their retirement investments. If the man or woman is nearing retirement, it would be a wise idea for him or her to move to a target-date retirement fund. - to have a systematic investment strategy that can see them through retirement.
The basic concept of target-date retirement fund is to select a target fund with a date corresponding to the year of your retirement. You get a mixture of stocks and bonds made for someone of your age which becomes more conservative as you grow older.
These funds have two big benefits:
1) These reduce the possibility that you will sabotage your investment plan and tactics by moving your money around in reaction to the market's sudden ups and downs.
2) They simplify your way to spread your money in a broad range of investments
But, like all other funds and savings policies, you have to act carefully about taking to this fund. You should first need a very clear idea of your financial benefit from this fund before you jump into one.
The most important point: target funds do not all agree on what is an appropriate mixture of stocks and bonds at different ages. Naturally, funds from different companies who have the same retirement date may hold totally different concentrations of stock - and fare pretty differently when the market would take a dive.
Here are some examples: According to Morningstar, Oppenheimer Transition 2010 A (a fund developed for those people who will be retiring next year) holds 65% of its assets in stocks. All other funds designed for retirement investors of the same age like- T. Rowe Price Retirement 2010 and Vanguard Target Retirement 2010 hold 57% and 54% of assets in equities respectively……while MFS Lifetime 2010 A has less than 30% of its assets in stocks.
That difference in net amount of stock asset held by target funds implies that investors in these funds had totally different experiences as the markets went haywire over the past year. For the twelve months through January 9th, for example, Oppenheimer Transition 2010 was down 38.7%, compared to 24.8% for T. Rowe Price Retirement 2010,
Fact is, no "correct" percentage of stock should be in the 401(k) of the person who is getting closed to retirement. The more stocks you own, the bigger hit your portfolio is going to take when the market heads south. However, still you might want to keep more than 30% of your retirement portfolio in stocks; there are a lot of reasons for that like- the need to protect the purchasing power of your retirement savings over the long term or the desire to leave a legacy to your offspring.
Anyway, whichever investment process you pick up after u retire is entirely upto you based on your preference and faith. All you need to have is the ability to foresee the future of the funds or sectors wherein you invest and act more wisely for any investment. The more insight about investment market you gain, the more accurately you can foresee the outcome and performance of your investment in coming days the more successful investor you will gradually become-even after your retirement.
For all the enthusiastic Forex traders including those who are just at the beginning level and those who are a bit experienced in this trading field, there should be no looking back at year 2008-let us get over it, we need to move on to start afresh with our personal investment and trading for a better outcome. As we are going to stand in front of a new Forex trading platform this year, so before we all get started with trading in Forex this year, there are a couple of important aspects of Forex trading that I would like to share with you all. According to the experts from this industry, these instructions are very likely to be effective and useful for 2009 Forex trading… keeping them in mind while trading forex is going to increase your chances of success considerably even if only 2-3 of these ring a bell with you.
So let’s get started…
1. Open a demo account. You must learn to trade it first before getting into live transaction with real money. You will usually learn how to avoid some mistakes and also get familiar with and enhance your knowledge on the broker’s trading platform. 2. Normally, there are no commissions in trading in currencies. That is why it costs less than any other financial market. All you pay is the market maker’s spread (which all financial markets have too). The cheaper your costs, the quicker you can start generating profits for you.
3. Unlike commodities or all the stocks currencies trade in pairs. In stocks you should buy either: 1) GOOGLE (GOOG : 334.06 0.00 0.00%) or 2) IBM
4. Regularly study, keep in touch and gain enough knowledge. There are a lot of examples of unplanned, knowledge less traders in America, who just do not know how little they know about the latest trends, happenings and updates of this industry, and still they go on to dive into trading in this market . Show some zeal and do spend some cash to join a good forex trading tutorial with state-of-art faculty, or take a relevant forex trading course. Because any of these two may save you thousands in the end!!!
5. Start with a Mini account. Many traders want to start with a standard account. However, as far as my hard gained knowledge in forex trading goes, this is the quickest way for a new and novice trader to lose money in trading. The “trading size” is so large (in number of currency units controlled) that if anybody is wrong, he is gone!! A standard account will cause 10 times the losses that a mini account would cause on the same exact trade.
6. Before starting to trade in Forex one must be well aware of proper way or location to find out the data that comes out on each country; he or she must know the exact time when it’s coming out! Many related, quality online resources are there in internet to have all of this data in one handy place.
7. Under any circumstances, one should risk maximum 1-5% of your account balance. However, if you have to risk more of your account than that on a particular trade, then either you don’t have sufficient balance in your account or your stops are excessively wide. Most people, whose risk amount of account balance exceeds that stipulated range (1-5%), fall under the former category rather than the latter; they are very likely to lack enough money in account.
8. Begin with some small-range trading. By that, I mean to trade one mini lot per order at first. Start with only one order in the market at one time. If you get your estimated profit with that trading, you can increase your lot size. Oh, by the way, if you can’t make money with a 1 mini lot trade, there is no chance that you could have made money with 5 mini lots at risk. In fact, your loss would be 5 times bigger….or even worse!!!
9. Start off with an account which is very well capitalized. Even many experienced Forex traders face this confusion of not being able to determine exactly what amount of money is required to start an account with. But instead of asking this question to your broker, you should rather ask him how much is practical to keep to start your new account. You will come to know that most mini accounts should had been started with at least $3,000 to $5,000 dollars; yet, in the industry they will let you start with $200 to $300 dollars. Too little of capital = too high of percentage of the account risked on each trade. That’s the logic behind this point.
10. You should begin with trading the most liquid pairs in the market….it is indeed a good idea. These pairs will have the smallest spreads between the buy and sell quotes. Some examples of such pairs are: EUR/USD, USD/JPY, GBP/USD, USD/CHF, EUR/CHF, etc.
