Better Investment Reviews

Forex.  For knowledgeable investors, or for the gunslinger-gambler type of investors, this is a familiar word that will probably bring either a smile or a scowl and not much in between the two.  For everyone else Forex can sound like anything between a delivery service ripping off a more familiar name to a strange science fiction type of alien monster.  Obviously it is neither: forex is referential to currency trading.  Basically, when investors talk about forex, they are talking about trading one nation’s currency for another, and then selling down the line in the hope that changes in international markets will cause a profit.

These are also sometimes referred to as currency speculations.  There are an increasing number of trading companies that are moving to online web pages that allow for currency speculation online.  These companies provide an online trading platform for investors, or any individuals that want to speculate on the exchange rate between any two world currencies.  The obvious hope is to make a profit when the value of the currency changes in the investor’s favor.  The forex market is familiar to a lot of people, as it is considered the largest market in the world with daily reported volume of over 1.8 trillion.

The interesting thing about forex trading is that since it is an international trading scheme, a web site that is set up internationally can be open since 24/7 since somewhere in the world there is always a market open.  Somewhere around the world, a financial center is open for business, and banks and other institutions exchange currencies, every hour of the day and night with generally only minor gaps on the weekend.  Basically foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day.

While there are a lot of different ideas and strategies for how to best go about trading, the end goal is fairly simple.  Buy a currency when it is low, and then sell it when it is high.  For example, suppose one dollar is worth one hundred yen.  $100 then equals 10,000 yen.  Now wait for a year.  Suppose the United States economy slows down, has some major warning signs, but Japan is doing great.  Now one dollar does not equal 100 yen, but 75.  Another way to look at this is that a year ago 100 yen equals $1, but now 75 yen equals $1.  Now your 10,000 yen can be sold for $133.33.  The investor just made 33% in one year!  That is forex, and the promise of this type of one year turn around is what has investors from all walks of life playing the table in hope of making a Vegas type score.

I am widely recognized as a leading expert in the stock market and especially at teaching you how to become your neighbor’s millionaire next door.  I didn’t start out as knowledgeable and skilled as I am now.  I started out knowing nearly nothing.  I was so inexperienced in my early twenties that I could only stand by when a full service stock broker stole $85,000 from my eighty year old grandmother. I watched the nationwide stock brokerage protect the interests of the full service broker and my grandmother lost everything.

The pain of this was so intense that it drove me to complete my Ph.D. in finance — less than a hundred of us graduate in this degree worldwide annually because it is so mathematically difficult.  My frustration and anger at the big rich forces behind Wall Street drove me to become a modern day master of money.  This is what you have to do — wake up!!!  Wake up to the fact that you can make it as a stock investor.  Wake up to the fact that you control your destiny and that you can stop handing all of the control over to the Wall Street machine that could absolutely care less about your financial future.  This is the first step — take full responsibility for you earnings, savings and investment.

I learned years ago from a friend of mine, Dr. Van Tharp, Ph.D., that if I didn’t take full responsibility for my investing that I would never progress — I would simply break the fragile feedback loop that allows all of us to learn from our mistakes.  Any time you blame anyone for a financial mistake you destroy the opportunity to learn and thrive from the situation.  The simple decision you must make is to deeply, totally, firmly, and finally, say to your self, “I am the master of my universe — I am in control — Wall Street has no power over my mind” is the key critical change you must make in your thinking.

Some people will think that you are arrogant but just blow them off and laugh all the way to the bank.  Stop listening to people — are these nosy little bug a bugs in your life that so quickly nay say your investment dreams paying your bills or giving you money to move ahead — no so blow them off!  They just want to give you bad advice so that you fall into their same financial loser traps.  In terms of investing become an island unto yourself and very carefully cultivate relationships with people who really do know what they are doing in investing. This is exactly what I did.  I started seeking out people who really understand the markets.  I found them over time and I asked them lots of questions.

Foreclosure investing is actually quite another world when people have finally taken that risk and go for it. This really applies to anything else in life. Remember all those late nights where you’d stay up and watch those “how to make millions in your sleep” commercials. Or perhaps you remember all those times you went to the book store and purchased tons of real estate investment study guides.

In fact you probably have a impressive home library and collection of real estate, investment, and how to get rich quick type books by now. Some people may get a feeling of being overwhelmed after wading through those thick books and studying all the complex terminology.

The truth is, if you are a naturally goal-oriented and self-disciplined person than you can probably achieve a full-time income in real estate within a year with the right system. So how do you choose the “right” system when everyone and his uncle says they are an expert or guru within the real estate domain?

One thing you might want to consider doing is to align yourself with a acquaintance or relative who is already successful in real estate investment or at least in the branch of real estate that you are interested in doing. Don’t be shy, definitely get in touch with them.

It may be a friend from high school or university, or perhaps even a former room mate that you knew when you were just getting started with your own life and needed someone to share the rent costs with in order to have your own place, etc. I am sure that if you brainstorm for a bit, you may even surprise yourself at how much opportunity there is in your own circle.

That is actually a very good idea- the number one way to get into real estate successfully is to have a mentor or at minimum someone that can really show you the ropes and provide feedback in real-time. No matter how well written the courses you’re looking at is, nothing really compares to a trusted friend or adviser that can actually walk you through this process step-by-step.

Even if it isn’t step by step, it’s still great to be able to call someone up and ask for advice on what you are doing as well as to add some motivation to the process. Folks this relationship is priceless. You can save hundreds of hours of time learning things on your own, and also save thousands upon thousands of dollars in costly mistakes.

Ultimately you will have to walk the path yourself in order to learn and profit from this wonderful industry. But the initial first steps will furnish you with the momentum to be able to soar on your own two wings.

Let’s be honest, many of us dream have that one day starting up and successfully running a new business and leaving our miserable jobs behind to become our own bosses.

And whilst many do just that and at least make a go at running a new business there are even more who never quite stop dreaming about it and find the courage to actually do so.

One of the reasons people give for not starting up a new business is a lack of finance. Well firstly that is a very poor excuse, if you believe in yourself and your own abilities to make a success of your venture then that alone is the biggest investment you can make in running a new business. Yes, you are the most valuable asset a new business can have, you and your specialist knowledge, your pride in getting a job done properly and having an absolute belief in your own abilities to make a success of running your new business.

Let’s say it again, ultimately you are the only thing worth investing in for running a new business and you don’t cost a penny, dime or cent. So what are you waiting for?? Running a new business is absolutely free, you don’t actually need to invest in it to get it off the ground because all the investment should come from within you and not from a bank or money-lender.

So once you’ve decided to invest in yourself, first in order to get your new business off the ground you are at some point going to have to think some sort of financial investment. See, eventually money does come into it but it is useless if your business plan is useless or you don’t have the personal wherewithal to actually make a good idea happen and the best place to seek such investment will be your bank.

All banks will have a new business advisory department and they will be more than happy to talk with you of your business plans, so make sure your plan is a good and sustainable one and if it is: they’ll certainly listen and if they like it, they will definitely lend you the money. It should be said that banks exist for you to borrow for things such as investing in a new business, they like people who are prepared to give it a go and if you demonstrate this and a fierce determination they’ll lend you the money to kick-start your new business.

When investing in starting up and running a new business it is vital that you don’t waste your initial investment on fancy cars, flash offices and a menagerie of staff. Basically, don’t walk before you crawl, all these trappings of success will come in time but to start off creating an image of success ultimately will mean you will fail because the best investment you can make at this stage of running a new business is dedication and hard work, that’s how you achieve lasting fulfillment and success and the trappings that go with it. If you just want the trappings without the hard work then don’t bother starting your own business because hard work is a better investment than an unearned top-of-the-range motor.

Reaching to nature for the best metaphor to consider when investing for running a new business, it is a whole lot better to invest in a bag of acorns and watch them grow, yield and flourish than it is to buy a lot of old oaks and see them wither and die.

And finally, again, it should said the biggest and best investment for a new business is you, your idea and your desire to succeed. With these, you can’t go wrong!!

Smart people sometimes make dumb mistakes when it comes to investing. Part of the reason for this, I guess, is that most people don’t have the time to learn what they need to know to make good decisions. Another reason is that oftentimes when you make a dumb mistake, somebody else—an investment salesperson, for example—makes money. Fortunately, you can save yourself lots of money and a bunch of headaches by not making bad investment decisions.

<b>Don’t Forget to Diversify</b>

The average stock market return is 10 percent or so, but to earn 10 percent you need to own a broad range of stocks. In other words, you need to diversify.

Everybody who thinks about this for more than a few minutes realizes that it is true, but it’s amazing how many people don’t diversify. For example, some people hold huge chunks of their employer’s stock but little else. Or they own a handful of stocks in the same industry.

To make money on the stock market, you need around 15 to 20 stocks in a variety of industries. (I didn’t just make up these figures; the 15 to 20 number comes from a statistical calculation that many upper-division and graduate finance textbooks explain.) With fewer than 10 to 20 stocks, your portfolio’s returns will very likely be something greater or less than the stock market average. Of course, you don’t care if your portfolio’s return is greater than the stock market average, but you do care if your portfolio’s return is less than the stock market average.

By the way, to be fair I should tell you that some very bright people disagree with me on this business of holding 15 to 20 stocks. For example, Peter Lynch, the outrageously successful former manager of the Fidelity Magellan mutual fund, suggests that individual investors hold 4 to 6 stocks that they understand well.

His feeling, which he shares in his books, is that by following this strategy, an individual investor can beat the stock market average. Mr. Lynch knows more about picking stocks than I ever will, but I nonetheless respectfully disagree with him for two reasons. First, I think that Peter Lynch is one of those modest geniuses who underestimate their intellectual prowess. I wonder if he underestimates the powerful analytical skills he brings to his stock picking. Second, I think that most individual investors lack the accounting knowledge to accurately make use of the quarterly and annual financial statements that publicly held companies provide in the ways that Mr. Lynch suggests.

<b>Have Patience</b>

The stock market and other securities markets bounce around on a daily, weekly, and even yearly basis, but the general trend over extended periods of time has always been up. Since World War II, the worst one-year return has been –26.5 percent. The worst ten-year return in recent history was 1.2 percent. Those numbers are pretty scary, but things look much better if you look longer term. The worst 25-year return was 7.9 percent annually.

It’s important for investors to have patience. There will be many bad years. Many times, one bad year is followed by another bad year. But over time, the good years outnumber the bad. They compensate for the bad years too. Patient investors who stay in the market in both the good and bad years almost always do better than people who try to follow every fad or buy last year’s hot stock.

<b>Invest Regularly</b>

You may already know about dollar-average investing. Instead of purchasing a set number of shares at regular intervals, you purchase a regular dollar amount, such as $100. If the share price is $10, you purchase ten shares. If the share price is $20, you purchase five shares. If the share price is $5, you purchase twenty shares.

Dollar-average investing offers two advantages. The biggest is that you regularly invest—in both good markets and bad markets. If you buy $100 of stock at the beginning of every month, for example, you don’t stop buying stock when the market is way down and every financial journalist in the world is working to fan the fires of fear.

The other advantage of dollar-average investing is that you buy more shares when the price is low and fewer shares when the price is high. As a result, you don’t get carried away on a tide of optimism and end up buying most of the stock when the market or the stock is up. In the same way, you also don’t get scared away and stop buying a stock when the market or the stock is down.

One of the easiest ways to implement a dollar-average investing program is by participating in something like an employer-sponsored 401(k) plan or deferred compensation plan. With these plans, you effectively invest each time money is withheld from your paycheck.

To make dollar-average investing work with individual stocks, you need to dollar-average each stock. In other words, if you’re buying stock in IBM, you need to buy a set dollar amount of IBM stock each month, each quarter, or whatever.

<b>Don’t Ignore Investment Expenses</b>

Investment expenses can add up quickly. Small differences in expense ratios, costly investment newsletter subscriptions, online financial services (including Quicken Quotes!), and income taxes can easily subtract hundreds of thousands of dollars from your net worth over a lifetime of investing.

To show you what I mean, here are a couple of quick examples. Let’s say that you’re saving $7,000 per year of 401(k) money in a couple of mutual funds that track the Standard & Poor’s 500 index. One fund charges a 0.25 percent annual expense ratio, and the other fund charges a 1 percent annual expense ratio. In 35 years, you’ll have about $900,000 in the fund with the 0.25 percent expense ratio and about $750,000 in the fund with the 1 percent ratio.

Here’s another example: Let’s say that you don’t spend $500 a year on a special investment newsletter, but you instead stick the money in a tax-deductible investment such as an IRA. Let’s say you also stick your tax savings in the tax-deductible investment. After 35 years, you’ll accumulate roughly $200,000.

Investment expenses can add up to really big numbers when you realize that you could have invested the money and earned interest and dividends for years.

<b>Don’t Get Greedy</b>

I wish there was some risk-free way to earn 15 or 20 percent annually. I really, really do. But, alas, there isn’t. The stock market’s average return is somewhere between 9 and 10 percent, depending on how many decades you go back. The significantly more risky small company stocks have done slightly better. On average, they return annual profits of 12 to 13 percent. Fortunately, you can get rich earning 9 percent returns. You just need to take your time. But no risk-free investments consistently return annual profits significantly above the stock market’s long-run averages.

I mention this for a simple reason: People make all sorts of foolish investment decisions when they get greedy and pursue returns that are out of line with the average annual returns of the stock market. If someone tells you that he has a sure-thing investment or investment strategy that pays, say, 15 percent, don’t believe it. And, for Pete’s sake, don’t buy investments or investment advice from that person.

If someone really did have a sure-thing method of producing annual returns of, say, 18 percent, that person would soon be the richest person in the world. With solid year-in, year-out returns like that, the person could run a $20 billion investment fund and earn $500 million a year. The moral is: There is no such thing as a sure thing in investing.

<b>Don’t Get Fancy</b>

For years now, I’ve made the better part of my living by analyzing complex investments. Nevertheless, I think that it makes most sense for investors to stick with simple investments: mutual funds, individual stocks, government and corporate bonds, and so on.

As a practical matter, it’s very difficult for people who haven’t been trained in financial analysis to analyze complex investments such as real estate partnership units, derivatives, and cash-value life insurance. You need to understand how to construct accurate cash-flow forecasts. You need to know how to calculate things like internal rates of return and net present values with the data from cash-flow forecasts. Financial analysis is nowhere near as complex as rocket science. Still, it’s not something you can do without a degree in accounting or finance, a computer, and a spreadsheet program (like Microsoft Excel or Lotus 1-2-3).