What Is Your Investment Risk Tolerance? by Jim Pre...

What Is Your Investment Risk Tolerance? by Jim Pretin
It is extremely important to have investments. Without some money set aside for retirement, you will never be able to enjoy your golden years. Social Security will likely be depleted within the next 30 or 40 years, so you should not be depending upon the U.S. Government to take care of you when you retire. Besides, Social Security does not even pay enough to help senior citizens live comfortably. So, you need to invest your money wisely, perhaps aggressively, in order to grow your portfolio to a level that will adequately support you after you retire, and you need to start while you are still young.
You need to ask yourself the following question when deciding in what you are going to invest: What is your investment risk tolerance? Answering this question will enable you to develop your entire investment strategy. Are you going to put all of your money into variable securities, like stocks? Are you going to balance your portfolio with a mix of stocks and fixed-income securities (like certificates of deposit or other money market instruments, etc.)? Should you buy bonds? Should you invest in an annuity?
Answering these questions can be difficult and time-consuming, but necessary nonetheless. When evaluating your risk tolerance, you should first consider what type of person you are. If you like to take risks, then invest accordingly. If you hate to take chances, then play it safe. Also, you need to assess what your long-term goals are. Do you want to make a lot of money, or just enough to retire on? Do you have kids that you will one day want to send to college or provide other financial support to?
We will now set forth an appropriate investment strategy for each different risk tolerance, beginning with high-risk tolerance. If you are not afraid of losing money and do not have any kids or other responsibilities weighing you down, then you might consider putting together a very aggressive portfolio. In this case, you should have a portfolio that consists of mostly equities (stocks). The stocks you select should be companies that have the potential to grow tremendously. The higher the risk, the higher the potential reward. Though you should still keep some of your money invested in blue-chip companies with stable finances, you should put a great deal of your money in new companies, hedge funds, and perhaps junk bonds. You should consult with a financial advisor when looking for the right hedge funds or junk bonds in which to invest.
What if you have a medium risk tolerance? Well, for those of you that fall in the middle, the answer is simple. You should have a balanced portfolio. You need to have a mix of stocks, bonds, and fixed-income securities. You may want to set aside a very small amount of money for speculative investments such as the aforementioned hedge funds, penny stocks, or perhaps derivatives, but most of your money should be allocated towards a mix of stable small-cap, mid-cap, and large-cap stocks, government and corporate bonds, and fixed-income securities.
Finally, for those of you who are extremely risk averse, you need to compose a portfolio that consists of mostly high-yield government bonds and certain money market instruments that pay a decent interest rate. You should also invest in corporate bonds issued by companies with a high credit rating, and stocks of companies that consistently pay dividends (dividend income will help to offset any losses in the share price of the stock).
I hope this information will assist you in making your investment decisions. Formulate a plan to set aside a certain percentage of your income for investing on an annual basis and start while you are still young. The earlier you begin, the more money you can potentially make down the road. Using your risk tolerance, select a portfolio that meets your needs, and you should do fine.
About the Author
Jim Pretin is the owner of http://www.forms4free.com/, a service that helps programmers make email forms.



Basic Investing Tips That You Have to Know by William King
To limit the scope of this article, we will focus completely on the investing basics as they relate to you personally making investment decisions not giving money to a financial institution, which will make the investing decisions for you.

The first part of investing basics is knowing how to invest and where to invest. This can be answered quite simply: there are two ways in which to invest through an offline brokerage or through an online brokerage. Today, however, this is somewhat of a false dichotomy, as most offline brokerages also have websites. To invest, simply open up an account with either an online brokerage, such as ScottTrade or ShareBuilder, or open up an account with an offline brokerage or a financial institution; put money into the account; and then purchase shares based on an overall strategy. While you might be able to get better, more professional tips from an offline brokerage or financial institution, you will have better access to fundamental and technical information such as financial reports and graphs, respectively if you use ScottTrade or ShareBuilder.

The second part of investing basics involves knowing what it will cost. This, of course, will also depend on the brokerage you select. If you select an online brokerage, the cost of trading will probably be lower, since competition is stiffer and prices are easier to compare. Most online brokerages no longer charge commissions, but instead charge flat rate fees. This is important to take into consideration, especially if you plan on daytrading and earning small profits on multiple trades.

The third part of investing basics involves knowing what risks are involved. While there are some exceptions to this rule, here is the basic premise of a risk and investment: the more profitable a given investment could be, the higher the risk generally is. For instance, if you want attain 25% growth on your portfolio each year, you might have to risk losing 20%. But if you want to gain 10%, you might only have to risk losing 2%.

The fourth part of investing basics involves developing strategies. This part is important because it can make stock selection a predictable, mathematical process. This involves developing a list of requirements before you purchase any stock. For instance, you might determine that you want to make a diversified investment that includes two high-risk stocks, seven low-risk stocks, six medium-risk stocks. You will then want to determine what your goal is: to generate growth or to generate income via dividends. You will then want to begin sorting through stocks and choosing stocks specifically based on these goals.

The last thing you must know about investing basics is when to buy and when to sell. While this part of investing basics can get quite complicated when considering short and long positions, we wont go into that here. Instead, for beginners, it is more important to remember to trade based on specific pre-created goals, rather than basing each trade on emotion, which has lead many people into making poor financial decisions in the past.

About the Author
Will King is the webmaster for 101 Investing Tips where you'll find many resources and other articles on just about everything related to investing.


Make Money Fast - With This Investment & Even Better Is... by sacha tarkovsky
It's easy to understand by anyone and making a success of making money fast in this investment is common sense.

Donald trump has made billions so did Howard Hughes and even comedian Bob Hope amassed a fortune in it.

So what is it?

This investment may surprise you - Its land and it offers the following advantages:

1. It's cheap. Far cheaper than real estate for example.

2. In certain locations investors are making triple digit gains with little downside volatility - Far less than in mutual funds.

More of the locations you can make triple digit gains later

3. It's an easy to understand investment by anyone. Land that is snapped up for development increases in value pure and simple.

4. It's easy to buy and sell and far less complicated than property.

5. You can easily do it yourself if not there are specialist realtors to help you with low minimum investments

So if you fancy triple digit gains annually with low risk read on and find out how.
So where do I buy?

Land investment offers the best potential for growth in emerging booming economies abroad.
An economy that fits this criteria is Costa Rica and record numbers of Americans are buying here.

It's just a three hour flight and property prices are up to 70% less than in the USA and it's only a three hour direct flight.

This property needs to be built on land and most people want ocean view. Buying ocean view property is therefore a great investment But that's not all!

In Costa Rica the economy is booming, its stable, the government makes it easy to buy and it is very tax advantageous to invest.

The best locations are on the central pacific coast near the town of Jaco which are booming expanding and this allows investors to buy land in and around developing infrastructure and make big gains.

Think about it
Investors in land have been making 30 - 100% annual gains in Costa Rica for years and the trend looks set to continue and best of all the entry prices are cheap and downside risk is low.
Instead of sticking with under performing mutual funds look at this alternative investment as a way to make money fast and you may be glad you did.

About the Author

WEALTH BUILDING REPORT

For a FREE report on how to build wealth in land and property visit our website for a huge resource of articles, features and downloads and at http://www.net-planet.org/index.html