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smart investing

Investing

Bond Buying Basics For Newbies

When buying bonds, you want to be sure that you know exactly what you are doing. If you aren’t sure what you are doing, you may want to go back to the drawing board and learn more about purchasing and investing in bonds. Not only do you want to know what a bond is – you also want to know why a bond is important and why it can be such a good investment. Plus, you will want to know how to purchase and invest your money in bonds. Indeed, it is not a simple process, so you want to make sure you are comfortable before you buy. Here are some bond buying basics for newbies.

Learn what a bond is.

A bond is basically a surety license that is granted when you purchase the bond. The money essentially goes to some kind of municipality or government agency. The bond is basically a ticket that says that you will be paid back when you turn in the bond. If you wait a few years, the bond could be worth a lot of money as interest accrues.

March 30, 2015

Investing

5 Tips For Protecting Your Investments

Whether you are a seasoned investor or just starting out, there is no “easy switch” to make investing less of a challenge. Due to the volatility of the market place your hard earned money can disappear in the blink of an eye. While certain sectors are improving, the economy is still sluggish, despite slight signs of rebound. Yet, for anyone to have any semblance of longevity in the stock market, you have to play your cards right and protect your investments anyway you can.

Here are 5 tips for protecting your investments:

You never want to take irrational steps to withdraw all your money each time you see the market temporally take a dip. This is one of the biggest ways to lose money. It is recommended that you let your money “weather” the storm. Even if the stock market hits a record low, soon enough the high tide will come back in and you’ll be back on top. In the long run, letting your investments ride the multiple, daily waves of the stock market will have bigger returns in the long run.

Another important way to protect your investments is to find the lowest risk possible so that you aren’t left paying high taxes on possible losses. This might sound confusing, but one of the biggest mistakes newbie investors make is not considering the value of their returns after taxes. Depending on the sector you have invested in, what can look like a positive or winning reward on paper won’t look so great after the IRS takes a big chunk.

March 23, 2013

Investing

Growth And Value Investing – Which Is Right For You?

The world of investing is vast, and it holds a level of complexity that many beginning investors greatly underestimate. It’s possible to make a fortune through smart investment, but it’s even easier to lose that fortune on one wrong call. Two competing schools of thought in the investing world, growth and value investing, each hold the potential for large returns. However, deciding which of these different kinds of investment is right for you is not always as simple as it may seem. There are benefits and downfalls with either approach to investing, and making the most of your dollar requires careful planning and deep understanding of both.

According to value investing, the best way to make your money work for you is to buy stocks that trade lower than their true value. Investors who subscribe to this mode of thinking seek out stocks that they believe the market has assigned inappropriately low values. Due to the emotional nature of many markets, a single piece of good or bad news can change the price of a given stock to a figure that is less than its actual worth. Value investors read the market carefully to determine which stocks are trading for less than their intrinsic value, and they make a profit by selling when these stocks inflate in price once again.

March 6, 2013

Investing

5 Tips For Choosing The Right Stocks To Invest In

For most people, the prospect of playing the stock market is more than a little daunting. It’s not exactly something that the average person learns in school or picks up along the way. And yet, speculating on stocks has the potential to help your money grow a lot faster than letting it sit in a savings account or CD. It’s just the fact that you are equally likely to lose your shirt that draws most people up short. Hey, it is a gamble, no matter how many facts and figures go into it. But in truth, it’s not exactly like you’re flying blind when you choose to invest. There are all kinds of resources at your disposal to help you out when it comes to finding the right stocks to invest in. And here are just a few tips to help you get started.

Understand risk. Before you even think of investing in stocks you need to understand that they come with varying levels of risk, although they tend to fall into either the low-risk or high-risk category. The real difference is the amount of money you stand to make (or lose) and how quickly. So if you’re betting with your life savings, you might want to steer clear of high-risk stocks. But if you’re just having some fun with your pocket change and you want to gamble big, then by all means treat your foray into investing like a crapshoot. Or if you’re trying to build a diverse portfolio, consider one that is heavily weighted towards low-risk stocks, bonds, and mutual funds with a smattering of higher-risk ventures.

March 5, 2013

Investing

A Quick Personal Finance Reference Guide For Newlyweds

Friends of ours do premarital counseling, and due to the lack of financial education in Canada, I thought I would create a simple personal finance reference guide that our friends could use for the next couple they counsel. Although it is meant for couples who are first starting a new life together, some of the information might be helpful to people in other stages of life as well. So I thought I would share it on my blog as well.

RESPs

-Children need to have a SIN number, so apply for one as soon as your child is born.

-Government gives you 20% grant on up to $2500.00 of contributions per year for your child.

-Can be set up at any financial institution in Canada.

-Choose investments that are meant for long term growth such as mutual funds. Stay away from term deposits as your money won’t grow.

-Depending on your income, your child may also receive free money from the government in the form of Bonds so even if you can’t afford to put a lot into an RESP, set one up as soon as you have your child’s SIN, and when grandparents, etc. give your child money for birthdays, etc. just pop that money into the RESP.

-Note that it is wise to open a family plan RESP if you have more than one child.

-Select a financial institution that doesn’t charge any fees to have an RESP or to set it up.

September 12, 2012

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