Establishing Credit Helps Build Financial Stability

One of the problems many people find when they first go to make a large purchase such as a car or house is that they do not have the necessary credit in order to receive financing. This does not mean that they have bad credit, but they have not proven that they are responsible with credit to any potential lenders.

There are several steps you can take to establish your credit. One of the first things you will want to do is to open a checking and savings account. You should be able to get these for no fees and low if any balance requirements, making them easy to use. Though it’s possible to live without such accounts, they are a positive way to build credit and prove that you have money in the bank. Another great reason to get a checking or savings account with a financial institution such as a bank or credit union is that they are a great place to apply for loans in the future since you have already established a relationship with them.

Another way to establish and build credit is to open a credit card. A store card is easier to obtain, but it also less usable and will have a smaller balance. A major credit card will carry a larger balance and be accepted at most locations. Regardless of what type of card you get, you will want to make sure to pay off the balance each month in order not to have to pay any fees or interest. If you are worried that you will be tempted to spend beyond your means, do not carry your card around with you but instead file it somewhere safe.

Once you have started these small steps to establishing credit, you will be better equipped and prepared to make larger purchases on credit. These steps you take today will help you reach your financial goals in the future.

Life Insurance: 7 Reasons Why You Might Like Life Insurance

Life insurance is planned to protect your household and others who may depend upon you for financial support. Having insurance protection may secure anybody of semipermanent financial freedom and peace of mind. Here are 7 reasons why you might like life insurance.

Reason #1:
A life assurance policy is valuable whenever you have somebody depending upon you for financial support.The policy stays active until you either cancel it, stop paying insurance premiums or pass away. In the case of your death, an amount of money is paid out to the beneficiary you named. The policyholder has womb-to-tomb coverage without any future medical checkups, unless an alteration is made to the policy's contract.

Reason #2:

The cash in value of a policy is the amount of money you could receive should you choose to cancel your policy.If you live longer than the length of a term life policy, no money will be paid out to you. If this takes place with a whole life insurance policy, you will still have an investment fund share left.

Reason #3:
Whole life insurance consists of life assurance plus an investment on which you are able to earn interest.Whole life blends a term life policy with an investment element. You consequently pay part of your premium for the insurance coverage and the other part for an investment fund that earns interest.

Reason #4:
Term life insurance costs less than whole life insurance since the premium you pay is for life assurance alone.Term insurance covers the policyholder for the duration of the policy and has no investment funds connected to it. A Term life insurance policy may be a better alternative if you are going to keep it for shorter than twenty years.

Reason #5:
You can borrow money against the cash in value at the latest policy loan rate of interest.A part of the money you pay into a whole life insurance policy is invested and collects a cash in value. The life insurance premium you pay is carved up between the insurance coverage and tan investment fund. The income on the cash value of the policy can be withdrawn or borrowed against in the form of a policy loan by the policyholder.

Reason #6:
A whole life policy may be employed as an estate-planning medium.A policyholder can establish an insurance trust which will use the returns of the policy to pay the estate taxes once the policyholder dies.

Reason #7:
The policyholder commonly pays a steady premium for whole life which ordinarily does not increase as a policyholder matures.A whole life insurance policy may be a better alternative for older folks since term life insurance gets increasingly more expensive as you reach 60 years of age.What type of policy might accommodate you the best?

Whole life insurance or term life insurance? You should consider your fiscal budget, estimate how much you are capable or willing to pay for a policy and then do a life insurance comparison.

The solution to your life assurance needs is a subjective and fiscal one that had better be considered carefully before arriving at a decision.

Students Guide To Making Money To Pay Student Fees Without Student Loan Consolidation

Student loans are a major factor in making students get in debt, just to have a good education. Student debt consolidation can make the problem worse, as you keep adding debts. Another alternative is to use your own initiative by bootstrapping and making your own business to pay for your tuition fees.So, you want to leave the student loan consolidation, and find alternatives to pay for your tuition fees.

Paying your student tuition fees without the need of student loan consolidation is possible, when you take a look at what is available to you. As you are reading this likely online, then I will focus on online methods, as the internet is a great place to start a project which can pay your student tuition fees, your student loan, and hopefully provide you a long term nest egg.

Now you may be thinking that starting your own business would be a costly venture marked with loads of risk. You are absolutely right, if you want a McDonald's franchise, but what we are looking for is something small that has potential to grow, depending on how much time you invest into this.

Even with only a few hundred dollars, you could soon be on your way to not needing a student loan consolidation loan; you could even start with no money! Now, you may be wondering how is it possible to not get a student loan consolidation loan and be able to pay your student tuition fees.

First we need to take stock of your abilities, and here is where an important key will come in. Consider what you are good at, maybe it is a subject you are studying, maybe it is your passion or your hobby.

The areas we will focus on are eBay, Affiliate Marketing, and Freelancing. All these options are easy to get into, and with consistent effort, can bring you many rewards. Let us begin by looking at an example - a student who likes to DJ. In this example this person could sell on eBay DJ products, music or many other items. As an affiliate marketer you could do the same thing, but with your own web site, and with freelancing, you could make music or mix music for people who need music made.

You may be wondering what is all of these different options, you may have heard of eBay or you may not, you may have heard of affiliate marketing or you may have not. I will cover these so you can get a firm grip of how important they can be to pay student tuition fees, and also cut out the need to get a student loan consolidation program in effect.

eBay to cut out getting student loan consolidation loans:
eBay is an online auction platform. Each day millions of dollars worth of products are sold all across the world through eBay's auction platform. The best way to cut out the need to get a student loan consolidation just to fund your new venture, is to look at old things you no longer need. You could sell old things you do not need, then you could find wholesalers or suppliers selling what you want to sell. You make a mark up (your profit - costs), and continue to do, and increase profits (part of which can be used to mitigate the need of student loan consolidation loans).

Affiliate Marketing to cut out getting student loan consolidation loans:
Affiliate marketing is similar to selling on eBay, the only difference, is that you are promoting a product which someone else sells and delivers, and pays you commission. This makes starting this project very easily to cut out the need for extra student loans or student loan consolidation loans. Though be aware that you will need to learn about online marketing and find the right formula that works for you.

Freelancing to cut out getting student loan consolidation loans:
Freelancing is pretty easy to get started in. For one, you do not need to have money in most cases to get started. If you have an experience or are studying a subject, you may have knowledge and skills which others would be willing to pay you for your time. eLance and other websites allow you to put up your details, and bid for jobs. These jobs can easily be worked around your busy student life schedule! It can also be a great way to earn money, some people even find that it pays a full times salary, depending on how much time you put in.

There are many ways to get started to earn money, and reduce the need for student loan consolidation loans. So many students today get into debts which could take over a decade to pay back. By taking your own initiative, and with calculated risk, you could easily get into a position that gives yourself a life long enjoyable career. Debt into wealth!

THING TO DO WHEN YOU'RE IN CAR ACCIDENT - INSURANCE

Getting into a car accident can be a traumatic shock to the system. Even if you aren't injured, the fear and adrenaline that inevitably accompany such an event can quickly cloud your judgment. It is for this reason that experts recommend preparing for such contingencies ahead of time, as you don't want to be faced with multiplying choices and confusion at the scene of the accident. The good news is that governing bodies in transportation have agreed on some basic guidelines you can use to make sense of such situations as they arise.

Auto insurance quote provides you the best possible car insurance for life. Keep yourself prepared for any contingency and you may find such accidents become far more manageable. Keep yourself prepared for any contingency and you may find such accidents become far more manageable.The first priority in the event of a car accident is to get you and any injured passengers to safety.

If the cars are still operating, that means turning on your hazards and moving everything to the side of the road. If you have lost such mobility, you will want to put cones or flares down the road to give the scene a wide buffer zone of safety. A number of car safety kits include such equipment as a matter of course, so it may be wise to look into a preventive purchase such as this.Once the scene is secure, it is time to exchange information with other drivers. Resist the urge to make accusations at this point - the essential thing is to get the data you need so you can sort out the financial details later. Be sure and get the other driver's name, address, phone number, insurance company, policy number, driver's license number and plate number. You may also want to take photographs and create a written record of precisely what happened. Next the police report. Again, you want to be as detailed as possible here, including any charts or diagrams you think might be illuminating. A number of drivers balk at this step of the process, hoping they can work out an independent payment scheme with the other driver and keep insurance out of the picture. In fact, such plans rarely go as one might hope, especially as other drivers may file their own reports without telling you. If you want to avoid lone liability or an exorbitant repair estimate, it is wise to protect yourself with a trail of paperwork from day one.It is important as well to read your own insurance policy ahead of time, as a number of specific conditions may be required immediately after a car accident. Fast filing and ready compliance will likely save you money down the line. It's also useful to know what kind of services you can expect in the immediate aftermath of an event like this - some policies pay for towing, for instance, while others may not.Good preparation and a level head are the surest ways to keep you safe, secure and protected following a car accident. Whether you have been in a wreck recently or simply want to plan for an uncertain future, smart preventive measures can save you considerable headaches down the line.

The Securities Market is nothing but speculation

A lot of folks will be transformed into angry and annoyed intellectual after reading the topic of my article. And they will have to be placed over some liquid refreshments to bring their temper down. But that's alright as this whole routine is something we have been exercising for many years now.

Dictionary meaning of Speculation is 'engagement in business transactions involving considerable risk but offering the chance of large gains, esp. trading in commodities, stocks, etc., in the hope of profit from changes in the market price.

'In my view, Speculation is a state of mind. The only difference between an investment and speculation is not what an investor does but to what he wants and what his level of knowledge is. For example, Someone tells you that X stock is going to go up and you just go ahead and buy it without any further research. By comparison, someone else could know everything about X, it's prospects, the industry, it's peers and come to the conclusion that it's a good buy. Clearly, the very same action, depending on how much an investor knows, could be intensely speculative or could be a carefully considered investment.

A carefully taken decision not only reduces the risk of loss but it also gives you a confidence to hold on to your stock if there is a fall in the overall market. There is nothing wrong in checking the calls of various financial advisors on TV or in some Stock Market Tips Website but you must do your own research and check all the important details of company, its competitors, valuations, future prospects et cetera.

Are you, in this sense, a speculator? Here are a few checkpoints. The more of these you answer yes to, the closer you are to being a speculator:

a) You never try to balance risk between different investments.

b) You buy stocks of companies without a clear idea of how their businesses work.

c) You choose which new issues to invest in based on the ads of those new issues.

d) You buy stocks because they've gone up.

e) You sell stocks because they've gone down.

f) You think a stock with a lower price is cheaper than one with a higher price.

g) You think the previous checkpoint is a mistake.

h) You answered yes to most of these checkpoints and yet you are sure you are an investor and not a speculator.

Invest in quality businesses, not stock symbols

For most people investing in a stock is little more than watching the trail left by the stock symbol as its price wanders along some drunken path. They know that the symbol is associated with a company while not being too sure what is expected of this company to ensure that its share price will rise. It is a case of let�s sit back and hope for the best.

Then there are others who deliberately do not want to know anything about the activities of the company. They want to study the pure movement of the stock price with the belief that they can use this information to make forecasts about the future movements of the price. This is like trying to play bridge without looking at the cards. It just makes no sense to ignore the fact that the stock symbol is attached to a company. And it makes no sense not to apply sound business principles to analyze these companies. The more we know about the company, then the more confident we can be about the price of the stock. Not on a day to day basis, but over time.

So before buying a stock, think of it in terms of buying a whole company, just as if you were buying a store down the street. If you were buying a store you would want to know all about it.

What were its products?

How consistent are the sales?

Do they keep trying new products or do their products stay fairly constant?

What competitors does the store have and what distinguishes it from them?

What would be the most worrying thing about owning such a store?

This leads to the idea of looking for companies that have a strong and durable economic moat. Just as castles have moats to protect them from invaders, so companies can have economic moats to protect them from challenges of competitors and changes in consumer preferences. The moat can be made up of attributes such as brand name, geographical position or patents and licenses.

All these principles about purchasing businesses are equally applicable to purchasing shares. It becomes one of the most enjoyable parts of investing to look into the �business� aspects of any company that you are considering adding to your portfolio.

Don�t invest for ten minutes if you�re not prepared to invest for ten years

When we look at the share price of a company we usually see a wildly fluctuating graph with mighty hills and plunging chasms. For example, on the right is the graph of the daily closing prices of a company over ten years. It would be a brave person who could look at this graph and say what was going to happen in the next 24 hours, let alone the next 5 to 10 years. Yet this is a typical graph of the prices of a listed company.

In other words, as investors we focus on the medium to long term business characteristics of companies. It is these that drive the share price. Focusing on the short-term aspects of a company including both business and price fluctuations is foolish. Even though we focus on the long-term, the investment is even more profitable if we purchase the stock during one of its drops.

HIGH PRICE / EARNING RATIO AND STOCK MARKET

After some forty years of banking and investments, I retired in 2001. But since I do not golf, I soon found retirement to be very boring. So I decided to return to the investment world after ten months. However, those ten months were not a complete waste of time, for I had spent them in trying to utilize my forty years of investment experience to gain perspective on the most recent stock market "bubble" and subsequent "crash."

There were several people who saw the stock market crash coming, but they had different ideas as to when it would occur. Those who were too early had to suffer the derision of their peers. It was difficult to take a stand when so many were proclaiming that we were in a "new era" of investing and that the old rules no longer applied. Since the beginning of 1998 through the market high of March 2000, among 8,000 stock recommendations by Wall Street analysts, only 29 recommended "sell."

I am on record as having called for a cautious approach to investment two years before the "Crash of 2000." In an in-house investment newsletter dated April 1998, I have a picture of the "Titanic" with the caption: "Does anyone see any icebergs?"

When I resumed employment in 2002, I happened to glance at the chart on the last page of Value Line, which showed the stock market as having topped out, by coincidence, in April 1998, the same date as my "Titanic" newsletter! The Value Line Composite Index reached a high of 508.39 on April 21, 1998 and has been lower EVER SINCE! But on the first page of the same issue, the date of the market high was given as "5-22-01"! When I contacted Value Line about this discrepancy , I was surprised to learn that they had changed their method of computing the index for "market highs" from "geometric" to "arithmetic." They said they would change the name of the Value Line "Composite" Index to the Value Line "Geometric" Index, since that is how it has been computed over the years. Currently Value Line is showing a recent market low on 10-9-02 and the most recent market high, based on this new "arithmetic" index, on 4-5-04,

ANOTHER ALL-TIME HIGH! If they had stayed with the original "geometric" index, the all-time high would still be April 21, 1998!

Later that year, I was pleasantly surprised to read in "Barron's" an interview with Ned Davis, of Ned Davis Research, that said that his indicators had picked up on the bear market's beginnings in April 1998, the same date as my "Titanic" newsletter! So, my instincts were correct! I believe that we are in a "secular" downturn that began in April 1998 and the "Bubble of 2000" was a market rally in what was already a long-term bear market.

Another development transpired soon after I resumed employment in 2002. I happened to notice one day that, in its "Market Laboratory," "Barron's" had inexplicably changed the P/E Ratio of the S&P 500 to 28.57 from 40.03 the previous week! This was due to a change to "operating" earnings of $39.28 from "net" or "reported " earnings of $28.31 the previous week. I and others wrote to "Barron's Mailbag" to complain about this change and to disagree with it, since these new P/E ratios could not be compared with historical P/Es. "Barron's apparently accepted our arguments and, about two months later, changed back to using "reported" earnings instead of "operating" earnings and revised the S&P 500 data to show a P/E Ratio of 45.09 compared to a previous week's 29.64.

But a similar problem occurred the next day in a sister publication to "Barron's." On April 9, 2002, "The Wall Street Journal" came out with a new format that included, for the first time, charts and data for the Nasdaq Composite, S&P 500 Index and Russell 2000, in addition to its own three Dow Jones indices. The P/E Ratio for the S&P 500 was given as 26, instead of the 45.09 now found in "Barron's." I wrote to the WSJ and after much correspondence back and forth, they finally accepted my argument and on July 29, 2002 changed the P/E Ratio for the S&P 500 from 19 to 30! I had given them examples showing where some financial writers had inadvertently confused "apples" with "oranges" by comparing their P/E of 19, based on "operating" earnings, with the long-term average P/E of 16, based on "reported" earnings.

Because I started to be cautious about investing as early as April 1998, since I thought that price/earnings ratios for the stock market were perilously high, I was not hurt personally by the "Crash of 2000" and had tried to get my clients into less aggressive and more liquid positions in their investment portfolios. But the pressures to go along with the market were tremendous!
Price/earnings ratios do not enable us to "time the market." But comparing them to past historical performance does enable us to tell when a stock market is high and vulnerable to eventual correction, even though others around us may have lost their bearings. High P/Es alert us to a need for caution and a conservative approach in our investment decisions, such as a renewed emphasis on dividends. Very high P/Es usually indicate a long-term bear market may ensue for a very long period of time. We are apparently in such a long-term bear market now. But in determining whether the market is high, we must be vigilant with regard to what data mambers of the financial press are reporting to us, so we can compare "apples" with "apples." When the financial information does not appear to be correct, we, as financial analysts, owe it to the investment community to challenge such information. That is what I have concluded from my personal "odyssey" in the investment world.

After three years of the DJIA and the S&P 500 closing below their previous year-end figures, the market finally closed higher at the end of 2003. But the P/E ratio is still high for both indices.

Does anyone see any icebergs?

Henry V. Janoski, MBA, CFA, CSA is a 1955 graduate 'magna cum laude" of Yale University and a member of Phi Beta Kappa. He received his MBA in finance and banking from the Wharton Graduate Business School of the University of Pennsylvania in 1960 and holds the professional designations of Chartered Financial Analyst (CFA) and Certified Senior Advisor (CSA). As a registered investment advisor representative with the title of Senior Investment Officer, he is located in Scranton, PA. His biography is listed in "Who's Who in Finance and Industry" and in "Who's Who in America." E-mail address: HJanoski@aol.com

INVESTING IN THE STOCK MARKET - WHEN TO!

Is really not as important as to how you invest in the stock market. And how you invest in the stock market should take into consideration what goals you are setting for that stock market investment.

For example, are you investing for capital appreciation or for income through dividend paying stocks? Or is the investment in the stock market for the combination of both capital appreciation and dividend income?

Are you investing through a Mutual fund(s) or selecting your own individual stocks?

Do you invest with a lump-sum dollar amount or dollar-cost average into your stock or Mutual fund positions (buying the same stock or Mutual fund at different prices over the years)?
Is your investment dollar spread too thin and are all of those dollars working for your ROI (return on investment)?

Do you pay commission fees to purchase a stock?

Do you pay load fees in your Mutual fund(s)? How much does your Mutual fund(s) charge you for management, operating and marketing fees (they are called 'hidden fees')?
'How' you invest in the stock market is more important than 'when' you invest in the stock market and 'how' you invest will determine your ROI.

When you invest in the stock market is after you devise a how-to plan that takes into consideration all of the factors above. Quite frankly, every cent of your investor dollar should benefit you and your family and no one else.

It is my opinion that all stock purchases should be made without commission fees (which is possible). That the investment in all stocks should be a long-term investment, and that every stock purchased should have a history of raising their dividend every year. And all dividends should be reinvested back into the company's shares (also commission free), until retirement.

By purchasing those companies that have a long-term history of raising their dividend each year (for example, Comerica ? 35 years, Proctor and Gamble ? 47 years, BB&T ? 32 years, GE ? 28 years, Atmos Energy - 17 years (they also provide a 3% discount on all shares purchased through dividend reinvestments), the 'HOW' you invest becomes automatic- you dollar-cost average into your holdings through the dividends provided by the companies every quarter.
The dividend is the one factor a company cannot 'fudge'.

The money has to be there to pay the shareholder. If a company can raise their dividend every year, the company MUST be doing something right! When a company has a long history of raising their dividend every year you in a sense eliminate risk, since a lower stock price for that company just means a higher dividend yield. If, for example, a stock purchased at $50.00 a share drops to $36.00 a share, the income provided by the dividend income accelerates, and your dividend reinvestment provides you a better dividend 'bang for your buck'.

There have been many up and downs in the stock market these past 47 years (I know, I've been in almost 40 of them) ? yet Proctor and Gamble has never failed to raise their dividend during those past 47 years.

Below is an example of two types of investors that have $10,000 to invest in the stock market. One is a lump-sum investor, the other a dollar-cost averaging investor. One investor doesn't care about dividends, the dollar-cost averaging investor does.

Each investor took a different 'HOW' to invest and both investors had the same 'WHEN' when they invested. Let's say they invested at the same time, each stock purchased at $50 dollars a share and every quarter the stock dropped $2.00 a share, till the stocks hit a bottom of $36.00, and then recovers back to $50.00.

The lump-sum investor bought the fictitious company ABC, which does not pay a dividend, and the dollar-cost averaging investor purchased the fictitious company XYZ, which pays a quarterly dividend of 50 cents a share (a 4.0% yearly dividend yield), and the company had a history of raising their dividend every March for the past 41 consecutive years. Both purchases were made in January.

The lump sum investor bought 200 shares of ABC at $50.00 a share, watched the stock drop to $36.00, then recover back to $50.00 and when all was said and done ended up right where he started with 200 shares of ABC worth $10,000.

The dollar-cost averaging investor purchased 100 shares of XYZ in January for $5,000.00, (the stock paying a quarterly 50 cent a share dividend for a 4.0 percent yearly dividend yield), and purchased $1,000.00 worth of more shares every quarter for the next 5 quarters. Each quarter the dividend from the company was also reinvested into more shares of stock. Each March the company raised its dividend 2 cents a share, marking 45 consecutive years of rising dividends.

All purchases were commission free.

January, 100 shares of XYZ @ 50.00 a share = $5,000
Date: Stock Price: Div. Purchases: Share Purchases:
March $48.00 @.52 = 1.083 $1,000 = 20.83 shares
June $46.00 @.52 = 1.378 $1,000 = 21.74 shares
Sept $44.00 @.52 = 1.714 $1,000 = 22.72 shares Dec. $42.00 @.52 = 2.098 $1,000 = 23.81 shares March $40.00 @.54 = 2.098 $1,000 = 25.00 shares
June $38.00 @.54 = 2.637 - 0 - Sept $36.00 @.54 = 3.169 - 0 - Dec. $38.00 @.54 = 3.393 - 0 - March $40.00 @.56 = 3.260 - 0 - June $42.00 @.56 = 3.194 - 0 - Sept $44.00 @.56 = 3.045 - 0 - Dec. $48.00 @.56 = 2.827 - 0 - March $50.00 @.58 = 2.843 - 0 -

The dollar-cost averaging investor now owns 247.953 shares of XYZ. The value at $50.00 a share = $12,397.65.

So, the lump-sum investor ends up right where he started, 200 shares of ABC worth $10,000, and the dollar-cost averaging investor ends up owning 247.953 shares of XYZ worth $12,397.65, along with the dividend income generated from owning those shares. Both had the same 'when' when they invested.

The dividend yield at 58 cents a quarter (.58 divided by $50.00 x 4 x 100 =), a 4.64% yearly dividend yield. Every quarter every dividend received from the company was higher than the previous dividend, no matter what the stock price was at the end of the quarter.

The dollar-cost averaging investor is receiving a dividend for the next quarter from XYZ (no matter what the stock price happens to be) of .58 X 247.953 shares = $143.81, and the next quarter (and every quarter thereafter) the dividend would be even higher if the company, at least, maintained their dividend.

If XYZ repeated the same performance history ($50.00 down to $36.00, back up to $50.00) for the next 3 years, and ABC did the same - the HOW you invest in the stock market makes all the difference in the world.
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You have permission to this article either electronically or in print as long as the author bylines are included, with a live link, and the article is not changed in any way, (typos excluded). Please provide a courtesy e-mail to: charles@thestockopolyplan.com telling where the article was published.
Charles M. O'Melia is an individual investor with almost 40 years of experience and passion for the stock market. Author of the book 'The Stockopoly Plan', published by American-Book Publishing. For more excerpts from The Stockopoly Plan, please visit http://www.thestockopolyplan.com

VALUE INVESTING

By definition, value investing is the process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios. Of course, it is not nearly this simple. Value investing is the corner stone of long-term growth. Those who practice it survive the ups and downs of the market and are more likely to emerge wealthy than those who ride the market, in principle, due to the higher quality of the companies falling under the prerequisites of the value investor. Value investing is essentially concerned with getting the most profit at the lowest cost. The basis of value is profit. Value investing is an investment style which favors good stocks at great prices over great stocks at good prices. Value investor extraordinaire Warren Buffett has used this style to become a billionaire.

It's important to keep in mind that value investing is not concerned with how much the price of a stock has risen or fallen necessarily, but rather what is the "intrinsic" or inherent value of the stock, and is it currently trading below that price, i.e. at a discount to it's intrinsic value. The important point here is that when looking at stocks that are trading at or above their intrinsic value, the only hope for gaining value is based on future events, since the stock price already represents what the company is worth. However, when dealing with stocks that are undervalued, or available at a discount, unforeseen events are unimportant in that without any new earnings or additional profits, the shares are already "poised" to return to that inherent value which they have.

The question now, of course, is "why would stock prices not always reflect the true value of the company and the intrinsic value of its shares?" In short, value investors believe that share prices are frequently wrong as indicators of the underlying value of the company and its shares. The efficient market theory suggests that share prices always reflect all available information about a company, and value investors refute this with the idea that investment opportunities are created by disagreements between the actual stock prices, and the calculated intrinsic value of those stocks.

Finding Value Stocks

Value investing is based on the answers to two simple questions:
1. What is the actual value of this company?
2. Can its shares be purchased for less than the actual (intrinsic) value?

Clearly, the important point here is, "how is the intrinsic value accurately determined?" An important point is that companies may be undervalued and overvalued regardless of what the overall markets are doing. Every investor should be aware of and prepared for the inherent market volatility, and the simple fact that stock prices will fluctuate, sometimes quite significantly.

Benjamin Graham has often said that if investors cannot be prepared to accept a 50% decline in value without becoming riddled with panic, then investing may not be for them...or rather, successful investing, as it often takes significant losses in a particular security before gains are made, due to the idea that value investors do not try to time the market, and are focused on the underlying fundamentals of the companies. Furthermore, the quality of the companies targeted by the value investors' screening methods should be, over the long term, less volatile and susceptible to market "panic" than the average stock.

This is also a two way road of sorts. On one hand, there is no sense in worrying about depressions, upturns, and recoveries due to the underlying quality of the value investments. On the other hand, investments should only be made in companies which can flourish and do well in any market environment. Doing solid investment research and making equally solid investment decisions will take investors much further than trying to forecast the markets.

How Many Different Stocks?

In terms of diversification, there are many discrepancies over exactly how many different stocks a solid portfolio should be made up of. My personal view is that there should not be as many stock as normally make up a mutual fund. Many will disagree with this, but what it's worth, I think that owning a portfolio of 100, 200, or even more companies not only serves to limit risk, but it really limits the possibility for reward as well. Also, as Warren Buffett has said many times, the more companies you own, the less you know about each one.

As I write this, there are 42 stocks in our recommended portfolio. This number may very well grow in the coming months, as it may decrease in number, but one thing to keep in mind is, out of the thousands of companies available for purchase, only a very small percentage meet the stringent requirements of the diligent value investor. This is both a blessing and a curse. Very often, there is simply nothing to buy, and this is fine. The trap to avoid falling into is to lower your requirements for a stock when there simply isn't anything meeting the normal requirements. This is how many an investor has fallen into making poor investment decisions, putting money into companies not really adequate for their respective portfolio, and it will certainly have a long term effect on gains.

David Pakman has been writing about politics and investing for years now, and runs the websites www.heartheissues.com and http://pakman.thevividedge.com

EVALUATING A MONEY MANAGER

Scams and frauds are designed to take your money through false promises and phony claims. Money management is supposedly designed to increase your net worth. Sometimes these two worlds meet and the results are not in your favor, i.e., you have a considerable decrease in net worth.

The information in this article won't keep future money managers honest but it will help you find the one who is right for your situation. There are four criteria you must consider before you give your money to anyone to manage.

1) Philosophy-- This is the thought theology used by the money manager to make your money grow. In other words, does (s)he focus on stocks, options, mutual funds, annuities, a blend of investment vehicles, etc.? Does this philosophy coincide with your risk tolerance? If stocks are too risky, a manager concentrating in that arena isn't for you. The philosophy also points you to their performance.

2) Performance-- We all know the markets are not stagnant. They go up, they go down. No investment manager can predict the market with absolute certainty. But, they should perform well, or even above average, in their specialty. For example, a stock focused money manager in today's market environment should have performance numbers that would make even Warren Buffet take notice. You want as long a performance record as possbile. To be fair, one market cycle should give you a decent indication of the manager's performance in his/her area(s) of expertise.

3) Process-- This is the means the manager uses to select securities for the portfolios. For example, does (s)he relyonly on in house research or does (s)he incorporate researchfrom outside sources? If so, who are they and on what frequency are they used?

4) Personnel-- Besides wanting to know the manager's experience, you'd be wise to learn all you could about the folks working in the office. Who actually manages the portfolio? His/her experience? How long has (s)he been in business? Who will manage your account when (s)he is out of the office, on vacation, on business?

Some people would say cost is one of the criteria. I say it is, but to a lesser degree. In over 30 years in this business, I can guarantee that paying the highest commission did not necessarily result in receiving the best advice. Paying the lowest commission did not necessarily result in receiving the worst advice.

Cost comes in the form of fees and commissions. ALL money managers charge. Cost, initially, should not be in your criteria because it often becomes the ONLY determining factor. That will skewer your thinking and could result in not having awinning team working for you. Make the above four parameters yourprimary criteria and cost will take care of itself.

How? You will be quoted a charge. If you are not comfortable with that price, negotiate. All fees and commissions are negotiable. If the manager refuses to negotiate, then and only then, make cost a member of the criteria team.

This article won't solve all of the money management problems or costs associated therewith. However, it'll at least start you thinking in the right direction and keepyour money in your pocket until you are ready to hand it over.

SELL MY HOUSE FAST

What are the options for anyone looking to sell their property?

Traditional Estate Agent route - expensive and VERY slow Online Estate Agent - less expensive but still slow Property auction - fast but price not guaranteed to reach reserve, still have to pay auction house fees and VAT Sell to a buyer who specializes in purchasing property for cash - slightly below market value but VERY fast DIY private house sale - a fast option that could save you £000s So, how do you go about selling your house privately?

This might sound like a scary alternative but with the advent of the Internet it really is a viable alternative to the snail-like High Street option and is gathering popularity amongst house-sellers fed up of being charged £000s for selling their properties. We often forget that Estate Agents are unregulated salesmen with no professional valuation training other than an inside knowledge of what other properties on their books have sold for. The only true professionals involved in the house buying and selling process are the surveyor and conveyancing solicitor.

There are just 4 easy steps to making a private house sale:

PRICING.

There are websites available where you can check the actual selling prices of properties in your area (rather than the over-inflated estimates dreamt up by untrained agents). These will give you a much more accurate idea of what your property is worth. Depending on how quickly you wish to sell should influence how much above or below this figure you are willing to set your price at. Bear in mind that a potential buyer may wish to negotiate you down on the advertised price so don’t pitch it at your absolute minimum, as this will leave you no room for manoeuvre.

ADVERTISING.

Online advertising fees are much more reasonable than those of commission-based Estate Agents and websites that advertise your property have clear itemised lists of added extras you can purchase if you so desire but these are not always necessary.

HIP.

Any property sold on the open market must have a Home Information Pack, which will cost around £350 and can be commissioned independently.

DETAILS.

All you need is a digital camera and a reasonable eye for a good photo. You need around 6-10 decent pictures of the front of the house, garden and key rooms plus accurate internal measurements. For a small additional cost, online property advertising sites will also provide a customised For Sale sign, as these are great for generating interest from local buyers. You can get your property details online in a fraction of the time it takes an Estate Agent to start advertising. If you really don’t feel up to trying this alternative why not consider a quick cash sale to a company that specializes in this market. They can complete within 4 weeks of your initial enquiry and provide the peace of mind of a guaranteed property sale (no pulling out at the last moment and no broken chains). When you consider that Estate Agents over-value properties by between 5%-15% and you may have to reduce your price to slightly below the surveyors valuation to secure a quick sale this option doesn’t sound quite as bad as you might first imagine. If you also factor in the benefits of a free valuation by an independent surveyor, free legal fees and no requirement for a Home Information Pack plus completion in around 4 weeks Sell-My-House-Fast could be THE quick and economical solution to your current financial difficulties.

STOCK MARKET STRATEGIES DECISIONS

Initiate TradeThe trading strategy begins with leading off by placing a position in anticipation that the possible Head & Shoulders Bottom will be activated. This is a vertical bull call spread. Lower strike calls are purchased and higher strike calls are sold. An approximate upside measuring objective can be obtained at this time. This would imply placing a vertical bull call spread with the highest strike at the measuring objective. It is suggested, however, that the closest out-of the-money calls be purchased and the calls one strike higher be sold. This is for liquidity considerations in anticipation of follow-up action when the neckline is penetrated.

The next lower level in the decision tree shows the two most distinct price moves that could occur a rally or a sell off. The market also could move sideways or experience myriad other price gyrations.

Valid Breakout

A close above the neckline on a noticeable increase in volume officially activates the H&S Bottom, This allows the technician to construct the specific upside measuring objective. It is also the time to make any trading strategy more directionally aggressive. For a vertical bull call spread, one-half of the losing leg should be liquidated. This means buying back covering one half of the higher strike calls that were sold short.

It is of almost importance for any trader to have a defined risk parameter. For classical bar chartists, this is usually straightforward. Assuming there was no possible second left shoulder on the chart, the technician would not expect the low of the right shoulder to be taken out. Thus, the bullish outlook would not seriously deteriorate unless a sell off to below the right shoulder occurred. Stop-loss orders in the options themselves are not usually recommended. A mental stop in the underlying instrument is the preferred approach. This means, of course, that a trader must possess the discipline to exit from a losing options position if the technical aspects of the underlying instrument begin breaking down.

Failure

Any Head & Shoulders formation is destroyed when the extreme of the head is violated, even intra day. Any bull strategy must be abandoned. The entire vertical bull spread should be liquidated.

Making a new price low affirms that the direction of the major trend remains downward. It does not automatically create a specific downside measuring objective. Therefore, it is never advisable to liquidate the long calls and stay with the short calls of the vertical spread. The position would turn into one of unlimited risk. It is far better to exit from a losing position and look for another more clear-cut technical situation.

Objective Met

When any classical bar charting measuring objective is met, it is prudent to realize at least some profits. In the case of the Head & Shoulders formation, profits on one-quarter to one-half of the position should be taken. Why only 25 percent? An H&S measuring objective is a minimum target. Although no specific maximum objective can be calculated, quotes often move far beyond the minimum objective. A trader should try to follow the old adage of cutting losses and letting profits run. This is what is being done in removing only a portion of the winning trade. The decision to exit from the remaining open positions should be based on usual support/resistance and volume/open interest considerations.

Fullback

In the long run, the most optimal path through the decision tree would flow. A price sell-off on declining volume back to the neckline would prompt removal of any remaining bearish positions. All short calls should be covered. The resulting position is simply long call options. Note that this is the technical situation in the options strategy matrix that results in the long call strategy.

Objective Met

A trader should begin to take partial profits when an objective is achieved. Removing 25 to 50 percent of all bullish positions is suggested. But this is, as economists are wont to say, all other things beingequal. This is not usually the case. For example, if the underlying instrument is a futures contract, open interest changes become important. In a futures contract, open interest declining as a price target is being achieved is a warning signal. The percentage of profitable positions removed would move up to 75 percent.

In general, protective mental sell-stops in the underlying instrument would follow the market up moving in fits and starts depending upon where support formed on the chart.

Symmetry Destroyed

If quotes move below the right shoulder low, the symmetry of the Head & Shoulders Bottom is destroyed. This does not automatically invalidate the pattern. The pattern is destroyed if the low of the head is taken out. But a trader must begin to mitigate the loss of the long call position. Removing approximately one-half of the long calls would accomplish this.

Another Chance

Since the Head & Shoulders Bottom remains valid, the original upside measuring objective is intact. A bullish stance should be held unless the low of this second pullback is taken out. The decision to add to bull positions is tricky. A close above the neckline once again would certainly revive the bullish look of the chart. Aggressive traders can then look to increase a bullish bias possibly with outright longs in the underlying instrument rather than long calls.

Pattern DestroyedThe worst path through the decision tree culminates, the H&S pattern has failed. Although the H&S formation is usually highly reliable, it does fail in up to 20 percent of the cases. If enough premium is remaining in the long call options, they can be liquidated. If so little premium remains, they can be held rather than paying commissions. May be the trader will get lucky and a price rally will occur. But a trader who uses the words luck or hope is in a terrible situation.

EVERYTHING THAT YOU NEED TO KNOW ABOUT HEALTH INSURANCE

A Health Insurance refers to the policy which is designed in such a way that it helps and protects you and your family from high expenditure on health coverage and other medical care service. Usually a monthly premium is paid, which is taken to be a co-payment for the services that you get. The health insurance premium can be paid to the insurer on monthly, quarterly and annual basis. Deductibles refer to the amounts which are paid for the covered services, within a period of time, according to the terms and conditions with your insurance agent. There are numerous members who have higher deductibles and these people need to pay their first installment in thousands of dollars, before the insurance company begins to make the payments. A co-payment refers to the amount which is paid by the member along with the physicians' visit and also with the doctors and surgical care.

Health Insurance can be separated into two types, such as the managed care plans and indemnity plans. Managed care plans comprise different plans such as preferred provider organizations, the health maintenance organizations and the point of service plans. If you take indemnity plans, you are given the liberty to decide your own medical doctor as well as spend for your medical costs. Different payment options are given for such expenditures, and the expense can be made totality or in specified amounts for a day. There are many managed care plans which will offer you with wider coverage which is related to an arrangement which is made between the selected network and the insurer which will help you to organize all your health care, which will also aid you to get referred to various specialists in the network. The health insurance policy which is subsidized by the employer is taken as the most reasonably priced and in cases where the employer is not given the facility of health insurance, there has be an individual health insurance policy.

In cases of good health insurance, there are many types of coverages. For instance, there is one for hospital expenditure which will help you to give payments for your board, room and other incidental expenses, if you are hospitalized. There are various surgical expenses insurance which will help you to give coverage for the surgeon's charge and other related expenses. There is a physician's expense insurance which will aid you to spend for the visits to different doctors and hospitals. There is also a major kind of medical insurance which offers an ample coverage and maximum benefit policy, which is specifically designed to give you with high range benefits and protects against several catastrophic losses. Before choosing any kind of health insurance facilities, you need to consider the amount of affordability of the hospital care and the doctor's visit.

CAR INSURANCE OVER THE PHONE OR WEB?

I don't like computers - another great waste of time as far as I'm concerned, though I am forced to use one a couple of hours a week for work - but spotting my wife's laptop on the kitchen, I figured I could at least go online and try out one of those sites where they do all the searching around for the best quotes.

But how much money was I actually going to save? I could have given in and simply renewed with my existing insurer, regardless of the fact that they'd seem to have ignored my five years of no claims and spotless driving record and lovingly given me practically the same price as last year.

Sorting out car insurance was not the best, most interesting way to use up a morning off work, so I allowed my dislike of computers to be overridden by a sheer necessity to alleviate this increasing boredom and disinterest.

The clock was ticking and there were a range of more appealing jobs to do around the house, like mending the fence, oiling that squeaky living room door, or even chucking the dog's blanket in the wash.

I looked at the computer again. Feeling my arm still aching from cradling the phone while struggling around with my driving documents and scribbling numbers and names down on scraps of paper I knew I was going to have to make a rational decision over my now apparent irrational dislike of modern technology.

So I made a cup of tea. Then refreshed, and with a combination of mock enthusiasm and a desire to get on with the rest of the morning, I turned on the computer and found a web site that, without me barely realising, had found me a pretty good deal on car insurance.

And I saved some money. So much in fact that for spending 10 minutes online filling out a simple and easy to use form, it was worth more to renew my car insurance this way than it was to have gone into work and earn money!

Of course, I put the laptop back in exactly the same place as my wife had left it. I'm always telling her they're a waste of time, though maybe know I'll have to admit that for some things, they're pretty useful. Though of course, I'd rather wash the dog any day of the week.

GETTING THE LOWEST CAR INSURANCE QUOTE

Finding the lowest car insurance quote is something that most people do not take the time to do. I have a hard time understanding this, because many of these people are the same ones who will drive all the way across town to save a penny a gallon for gas or will buy 15 cases of mustard because they save 50 cents. But while they are saving nickels and dimes, the dollars are racing out the door because they are not paying attention to their car insurance.

I have no beef with bargain hunters and commend them for their perseverance. But at the same time, it only makes good common sense that if you are going to get the best prices on things, be sure to include a big ticket item such as your auto insurance. Sure it takes more effort to understand what you are comparing, but at the end of the day it makes a huge amount of financial sense.

If you are like most people, you simply renew your auto insurance every year without getting a new quote, even from the same company. It's the easiest way to do it, but remember that easy is not the same as cost effective. Car insurance rates are changing all the time, and if you don't spend the time to comparison shop, chances are better than excellent that you are paying more than you need to.

I am not saying that your current car insurance company is ripping you off. The truth of the matter is that they might be offering you the best deal available for your particular driving habits and situation. But the keyword here is "might", and if you don't do any comparison shopping, you'll never know that, will you?

One classic example is one of the most costly coverages you can have on your car, which is collision insurance. When your car was new, your finance company required you to carry collision insurance. But if your car is paid off, did you know that you can legally DROP the collision coverage? Or if your collision deductible is $100, you are paying about three to four times more for it compared to having a collision deductible set at $1000.What are your coverage limits? As an example, looking at the personal liability coverage that almost all states require you to have, if the policy limit is set at $25,000 that is barely going to cover anything in today's lawsuit-happy world and you are really not protecting yourself with that level of coverage limit.

A more reasonable limit that would truly protect you would be something like $250,000. Yes it will cost more, but there is no sense in paying for something that is going to provide inadequate protection if you need to file a claim.Get car insurance quotes from various companies to compare rates and programs, and make sure you are comparing apples to apples in terms of deductibles and coverage limits. You are also encouraged to get an online car insurance quote to see what can be offered there. Frequently these companies can offer extremely aggressive rates, and you might be pleasantly surprised to find out how much you can save.

There is no cost to get an online quote, but you cannot really compare quotes if you don't get one.Do your comparison shopping, just as you would for any other major purchase, to make sure you are getting the most value for the money you are spending. Don't merely renew your existing policy every year just because it is easy.

Monthly Bill Organizer-How To Stay On Top Of Your Finances Quickly And Easily

1001mutualfund tips :

A monthly bill organizer is very important for maintaining positive cash flow. Very simply, cash flow in and cash flow out are two important aspects of one's financial stability.

It hurts when one has to pay more than he is entitled to. Taxes are inevitable but late fees can be curbed down to level zero.

For most of us it is the credit card bill that takes a toll. A common mistake made by not so frugal ones. Use credit cards until they max out and pay little every month.

By the time you realize your credit card bill would have soared higher than the expense you incurred with maximum interest charges and late fees. For some it would be the phone and internet bills, gas and electricity and the list goes on.

Ever picked up a financial best seller? The first thing they talk about is organizing your expenses before saving. You can take the first step by getting a monthly bill organizer. Money that you save from those monstrous interest rates and late fees will actually go into your savings. A mail and bill organizer can certainly help you to have the money you need on hand at any given time.

Unfortunately, many people fall behind on their payments because they simply can't keep track of them all, and therefore, end up not paying them at all. Also, it's pretty hard to stay within your budget when you don't know how much you've spent and have coming in per month. This is where a bill paying organizer comes in.

A monthly bill organizer has its greatest value in helping you to easily keep track of cash flow and make adjustments accordingly if you have more going out then coming in. without having this information, it's impossible to see the areas you need improvement on.Keeping track of your expenses is certainly an underutilized skill nowadays, as it's something not really taught much ins school, and this is why so many people have so much trouble staying on target with their expense throughout their lives. The reality is, your financial situation is one of the most important of your life; if you don't have your finances in order, you are in serious trouble.

Unfortunately, in school today you are often taught accounting, history, physical education, science, etc, but very rarely taught how to manage money. this is one of the prime reasons so many people have trouble with this. Fortunately for you, a monthly bill organizer can take some serious pressure off of you in this situation.

Depending upon the number of bills you receive every month and your budget you can go either for a leather bill organizer or a wooden, plastic box one that has different slots for different bills. Place it on your desk or near your dining, coffee table where you can easily spot them.

This way you won't miss on a payment. If you can get a small sliding door attached to your organizer it would be good to keep pens, checks handy. Otherwise, you can place a pen stand near your organizer. This organizer will make your corner clutter free as you would find your statements and bills stacked neatly on it and not crumpled in your drawer.

With the help of monthly bill organizer you will find money in your wallet that used to go away as late fees. You will notice this after couple of months when you will have extra money for the beautiful dress you always wanted to buy but hesitated to keep your monthly expenses at par.

A few way to find out the MUTUAL FUND performance

Mutual funds allow people to invest their money in a way that will provide them with future benefits. When you are looking at a mutual fund in which you can invest in you may wish to look at several different ones. The mutual fund performance will help you to see what stocks and bonds work well in the market as compared to others. You can also find more help with this answer in various financial news articles.

One such article or guide that you may find to be useful is that of the Morningstar review. The review will have the latest market news which will indicate how a mutual fund performance has gone. You will also need to look at various other factors before you make any type of commitment about a mutual fund that you have seen.

These factors are the price you need to pay to buy and sell your stocks and bonds. The type of load that you are signing up for and also the other administrative expenses you will be expected to help out with. In looking at the mutual fund performance you should consider how your tax bill will be affected.

The tax bill is likely to be affected by a capital gains distribution. You can use various online mutual funds calculators to find what these tax costs are likely to be. The other item that should be investigated in a mutual fund performance evaluation is that of the volatility. When you are thinking of investing in mutual funds you want the stocks that you have chosen to be relatively stable.

The choice of a volatile mutual fund will only spell higher risks for you. The best way to know if any given mutual funds have a tendency to volatility is by reading the funds annual reports and prospectuses. You should also compare the yearly performance figures. All of this information will inform you if various companies that you are looking into have the ability to weather the stock market with ease or if there are drastic ups and down periods of investment.

Another way to find out the mutual fund performance is to ask about any changes which may have occurred. These changes will include a change of personnel or the investment advisor that you were working with is no longer available. All of these minor changes have the ability of affecting the outlook of your mutual fund.Therefore before you choose to invest with any mutual funds group it is always best to see what the mutual fund performance of this company is like. This knowledge is vital to getting the best deal on mutual funds that you can.

Winning With Mutual Funds

A mutual fund (called 'unit trust' in Asia) is an investment vehicle that pools money from many individual investors. A professional fund manager invests and manages these funds into stocks, bonds and other securities.

People usually invest in mutual funds because it is offers the advantage of broad diversification (it spreads your money over tens or hundreds of stocks to reduce risk) and professional management. However, do remember that as broad diversification reduces risks, it also reduces return.

First, here is the bad news. If you speak to most people who have invested in unit trusts in Asia (especially Singapore) or in mutual funds, most would report losing money or just earning measly returns of 2%-4%. In fact, in the year 2004, it was reported in the Straits Times that 559,000 Singaporeans lost $680 million by investing their CPF in these funds. By going to the largest unit trust distributor Asia, you can easily calculate that only 6% of unit trusts beat the S&P 500 over a ten-year period. What are the chances of you placing your bet on this 6%? Chances are you would have had lower returns that the index, while still having to pay those hefty sales charges and annual management fees.

How about the US mutual fund market? On average, less than 10% of mutual funds beat the S&P 500 index each year! What's worse is that it is a different 10% each year. Less than 3% of mutual funds are able to beat the S&P 500 Index over a five to ten year period. So again, what are the chances of you beating the market through betting on the right fund? Only 3%! You have better odds at the Black Jack table. The worse thing is that the fund manager gets paid an annual management fee whether or not the fund makes money.

Why is it so difficult for most people to make money in mutual funds? There are four main reasons.

1) High Sales Charges & Management FeesMost people buy mutual funds through banks and financial institutions at retail prices where there is a sales charge (front load) and high annual management fees (expense ratios).In Asia, most banks & financial institutions sell unit trusts with a sales charge of 5%-6% and with annual fees of 1.5%-2%. It means that before you even begin, you are down 6.5%-8% on your investment and will be down another 1.5% every year. Your fund must outperform the S&P 500 by 6.5%-8% just to make it worth your while! Again, less than 10% of funds worldwide can achieve this every year and less than 3% can achieve this over five years.

2) Buying the Hottest Performing FundsMost people choose funds based on high short-term returns. These are the funds that are normally pushed and advertised by financial retailers. They feature impressive and enticing returns like 'This fund was up +65% in the last six months'.The fact is that the best short-term performing funds tend to also be big losers in the subsequent years and long term. Why? Because these funds tend to be invested in hot stocks or hot sectors where the stocks have been rising rapidly and fund managers buy, riding on the momentum. That is why they post very spectacular returns. However, strong buying activity tend to push these stocks to be overvalued and sure enough, the stocks will come crashing down in the next few years. Mutual funds that consistently beat the S&P 500 tend to be invested in non-hot sectors and do not post spectacular short-term returns.

3) Limited Selection of Unit Trusts LocallyIf you are in Asia, then you are normally exposed to only a limited number of unit trusts. A check with fundsupermart.com (the largest Asian unit trust distributor) shows that there are just about 300 funds available here compared to over 8,000 funds in the US market.When I made a search on the Top Performing Fund sold locally (year 2005), I was presented with 'Fidelity America USD' with a 10-year annualized return of 11.27%. (Recall that the S&P 500 returned 12.08% a year). So, even the top-performing fund couldn't beat the S&P 500 after deducting expenses & fees!!

4) Lack of Research Knowledge, Data & ToolsThe single most important reason why investors lose money in mutual fundsis because they don't have the knowledge or necessary information to search for the top 3% of consistent performing funds at the lowest costs. Investors tend to buy on the advice of their bank managers, facts from the fund fact sheet or prospectus which does not provide enough information to select the right fund.

Three Things To Consider When Choosing Unit Trust

With so many funds to choose from it becomes harder to choose a unit trust that won't steer you wrong. With so many choices it can be tricky to pinpoint the goals of the funds and whether they match with your goals.

Here are three things to consider when choosing a unit trust.

1. Are you looking for stability, income, or growth? If growth is what you seek then you are looking for the investment to increase in value over time. If you are looking for stability then you are looking for a unit trust that will protect your investment. This is the first of three things to consider when choosing a unit trust.

2. What is the funds investment strategy? You will want to obtain the fund fact sheet and prospectus from the company which will outline what securities and shares the fund might invest in and what their method of selecting them is. It will also outline the funds investment practices as well as how the fund has done in the past 1 to 10 years. Of the three things to consider when choosing a unit trust this requires the most research.

3. Knowing the riskOne of the three things to consider when choosing a unit trust is to know the risks. Funds go up and down and that's the risk you need to understand. There are types of risks that you need to be aware of. Currencies, politics, inflation - these are all other risks you face. If you are investing out of your country currency and politics are a big risk factor. Inflation may be a big or small risk factor depending on the economy at the time of investment. Understand your risks.Consider any fees attached to both purchasing and selling the unit trust and you'll want to note if there is a lock in. Selling before this period and you will pay a penalty which can be substantial.

Of the three things to consider when choosing a unit trust this is the most critical of the three things to consider when choosing a unit trustThese three things to consider when choosing a unit trust are just the beginning. There are many things you need to watch for but it will get you going. In fact now that you know what three things to consider when choosing a unit trust you should be prepared to shop wisely?There is no need to choose any one of the three things to consider when choosing a unit trust because you need to be involved in all strategies.

How Mutual Funds Works?

What are Mutual funds?

A company dealing in mutual funds invests the money of several investors in bonds, stocks, securities, assets and several other short-term money-market instruments. The combined holdings owned by the mutual fund are known as its portfolio. When you invest in a mutual fund you become a shareholder of the company.

Each share in a mutual fund company is the representation of he investor's proportionate ownership of the fund holdings and the income generated. You earn dividends when the mutual fund company earns a profit, however, your shares will decrease in value if it faces a loss. A professional investment manager does the buying and selling of securities for the growth of the fund.

Types of mutual funds: Equity funds: These funds involve only common stock investments. They can earn a lot of profit, but are also very risky.

Fixed income funds: They include corporate and government securities. These funds offer fixed returns at a low risk.

Balanced funds: This is the combination of bonds and stocks with a low risk. However, the investment does not earn a lot through these funds.

How it works?

Mutual fund shares can be purchased from the company itself or a broker. There are secondary market investors also, like the New York Stock Exchange. Per share net asset value of the funds or NAV is the price that you pay for buying a mutual fund share. It also includes the shareholder fee that is imposed by the fund, at time of purchase. The best feature of mutual funds is that these shares are redeemable. You, as an investor, can sell your shares back to the broker. In order to accommodate new investors, mutual fund companies generally create new shares and sell them. They keep selling their shares continuously till they become large.

Investment advisers act as separate entities and are responsible for managing the investment portfolio of the mutual funds. Investing in mutual funds tends to lower the risk factor because they are the result of diverse investments. Since someone else manages your investments, you need not worry about keeping constant tabs on the investment, though a periodical check enhances your personal book of accounts. Managing funds is the full time job of the fund manager and he is responsible for the performance and health of the investment.

The rate of returns in mutual funds is based on the increase or decrease of the value, during a specific period. Returns of a fund indicate the track record. It is important to remember that the past performance cannot guarantee future results. As in the case of any investment or business, mutual funds also have risks associated with the returns. It is essential to set your financial goals and requirements, before investing in a mutual fund.

The Actual Cost of Term Life Insurance

The Internet has lots of information about the benefits of life insurance, but few websites tell how much life insurance actually costs. Each year, however, Insure.com surveys 25 leading insurance companies—those with A.M. Best Company ratings of A++ or A+, called “Superior,” and those with ratings of A or A-, considered “Excellent”—to find the lowest rates available for level term life insurance by age and gender.

The latest survey was taken on November 12, 2007 and published on the website three days later. The results were positive for consumers: The price of life insurance continues to decline.Part of the reason for the decline is competition. Websites that offer price comparisons are causing insurance companies to lower their prices to compete. It is a variation on the theme of the “when banks compete, you win.” When insurance companies compete, you win, too.

The Internet has also helped by automating—and thus lowering the cost of—the application process. Another reason prices are falling is the declining death rate. The age-adjusted death rate in 2004 was 800.8 deaths per 100,000 people, a decrease of 3.8 percent from the 2003 rate and a the lowest recorded U.S. figure. Fewer deaths mean the insurance companies pay fewer death benefits. This reduces costs and gives the insurance companies more time to earn more income from the premiums paid into the system.

Some of the extra income goes to the bottom line, enhancing profits, but some income is plowed back into operations, allowing the companies to lower their rates.The Insure.com survey included 10-, 20-, and 30-year level term policies with three popular death benefits: $250,000, $500,000, and $1,000,000. The survey assumes the consumer is in ideal health, meets stringent guidelines for height-to-weight ratios, and does not partake of any risky activities, such as skydiving, motorcycle racing, or mountain climbing. To keep the survey simple, it focused on rates in just one state: California.

The survey found that lowest annual rate for a 10-year level term policy worth $250,000 was $108. The lowest rate for a 20-year, $250,000 policy was $153 a year. Those rates were available to both men and women aged 30 and 35. The lowest annual rate for a 30-year, $250,000 policy was $228. That rate was available to 30-year-old men and women. At 35, the rate rose slightly for both genders, to $250 a year.Rates increase with age. They also go up depending on other factors, such as death rates at certain ages. Because women encounter breast and cervical cancer at relatively early ages, they actually pay more than men do for 30-year policies at age 40. Women pay $355 a year for a 30-year, $250,000 policy, while men pay $335 a year.

Men and women age 40 pay the same for 10-year policies ($130 a year) and 20-year policies ($203 a year).The actuarial tables begin to turn at age 45. Women no longer pay more than men do for any policy. However, men pay more than women do for 20- and 30-year term policies: $340 and $520 a year for men, compared to $318 and $428 a year for women. Men and women both pay $183 a year for 10-year term policy worth $250,000.The pattern holds at age 50: Men and women pay the same for a 10-year policy ($263 a year), but men pay more than women do for a 20-year policy ($510 a year compared to $370 a year) and for a 30-year policy ($768 a year compared to $585 a year).Men and women no longer pay the same for any term policies, beginning at age 55. The lowest rate for men for a 10-year, $250,000 policy is $403 a year. For women, it is $345 a year.

The lowest rate men can get for a 20-year policy is $773 a year, while women can get the same policy for $580 a year. Age 55 is the last year in the survey that men or women can qualify for a 30-year term policy. The lowest rate for men was $1,550 a year; the lowest rate for women was $1,080.The purpose of the death benefit is to replace the lost income of a deceased family member. The amount of the death benefit should equal the deceased person’s annual income for a period of years, giving the family time to adjust to the changes. Experts differ on how long that period should be. Some say as little as three years, others say as much as 10 years.

If the breadwinner contributes $50,000 a year, then a $250,000 death benefit would cover five years of lost income. To cover 10 years of lost income, the death benefit would need to be $500,000. To compensate for 10 years lost of an annual $100,000 income, the policy would have to pay $1 million.As death benefits increase, so do rates, of course. The gap between men and women increase for the larger amounts, as well. This is because differences in mortality rates that are statistically insignificant at $250,000 begin to have an impact at the $500,000 level. Rates are not the same for 30-year-old men and women seeking a 30-year term policy worth $500,000. The lowest rate for men is $395 a year.

Women can get the same policy for 18% less, or $325 a year. The difference between the genders increases—not just in dollar amount, but in percentage—at the $1 million level. 30-year-old men must pay $710 a year for a $1 million, 30-year term policy. Women the same age pay 21% less, or $565 a year, for the same policy.Although the survey was based on individuals in ideal health, the increases in life expectancy and ongoing competition among insurers mean good deals are available for almost everyone.

Pros And Cons of Different Types Of Investments

When deciding where to invest your money, you need to always take into account your investment goals and objectives. Different types of investments carry varying degrees of risks and potential return.

CD
A bank CD is a very safe investment. The CD is FDIC insured up to $100,000, so there truly is minimal risk. The only downside is that you cannot withdraw that money in the CD for a specific amount of time or else you'll receive a penalty. Bank CDs generally only pay up to 5% interest.

Bonds
A bond is essentially a loan you make to a company or a government. Bonds have varying degrees of risk, from essentially risk-free treasuries to junk bonds. The higher the risk of the bond, the higher the return will generally be.

Stocks
Stocks are investments in companies. Depending on the company, the risk of the investment can be high or low. Obviously, buying stock in Johnson and Johnson is a lot less risky than a new internet startup company. In general, the stock market returns on average about 10% a year, though the actual return of any given stock will vary significantly.

Mutual Funds
A mutual fund typically invests in over 100 stocks, so it's an instant way to diversify your portfolio. However, the mutual fund generally charges a fee, which is about 1% of your assets per year. Because of this fee, most mutual funds do not outperform the market; a monkey blindly picking 100 stocks but not charging you a fee could easily outperform most mutual funds.

Real Estate
Real estate is a popular investment. The most obvious real estate investment you'll make is when you purchase your home. Your home can go up or down in value when you sell it; it depends on the housing market in your area.

Tips For Choosing High-Performance Mutual Fund

Most people who invest in mutual funds don't know what they are doing. They take advice from someone at a bank or perhaps a friend and plunk down money into a fund. Sometimes this strategy works, but most of the time, it doesn't.

When you invest your money in a mutual fund, you are trusting someone to invest in the stock market for you. Because of this, you want to be sure this person knows what he or she is doing. Also, you want to make sure that this person is not charging you too much to manage your money for you. Mutual funds fees are "hidden," in the sense that they do not charge you an upfront fee but rather a percentage of the amount of money in your account. If this percentage is too high, you would do better just blindly picking stocks yourself.

Here are five helpful tips for choosing the right mutual funds.

1. Keep the fees low. Generally, expense fees should not be much higher than 1% if it is just a basic domestic equity fund. You should never invest money in a fund that also charges a "load," which is an additional fee that is ridiculous to pay. Never invest in funds that charge loads; those funds are for suckers.

2. Check the asset base. Mutual fund managers only know of so many good investments. When they have too much money to manage, they begin investing in stocks they don't like much but need to invest in anyway or else they'll just have money laying around. There's little reason to invest in a fund with over $5 billion in assets. It's best if it's under $2 billion generally.

3. Consider an index fund. This is a fund that tracks a stock index, such as the S&P 500. For these funds, the manager just buys whatever stocks happen to be in the index. Since this is not much work, the fees are much lower. Even though this method is simple, it has proven to perform better than most mutual funds. Some high performance index funds include FSMKX (Fidelity S&P 500) and VIMSX (Vanguard S&P 400 Midcap.

4. Evaluate the fund's strategy. If you have a long term outlook, look for a more aggressive fund that invests in small-cap stocks, international stocks, and riskier stocks in general. High risk tends to result in high performance in the long run. If you are more risk-averse, consider an S&P 500 index fund.

5. Keep the fees low. Did I mention this already? Well, I'll mention it again. This is where most people mess up. Make sure you are not paying a load or paying too much in fees to the mutual fund.
More information about mutual funds can be found at Research Mutual Funds.