Important Things About Retirement Investment Planning

By Gurg Sumit Kumar 

Apart from your home and your car, retirement investment is probably the biggest fund you will ever create. Though retirement investment planning seems like a very dull subject especially if your retirement date is still at a distant horizon-it is really important. As retired life is going to be around one third of your life and you have to have a plan for it. Even seemingly small difference now can make a big difference in your coming life. So, it's never early to start planning for your retirement and it's worth spending some time to do your own research and getting your details right.

Most people reach their retirement years without enough money to support them and their lifestyle. So, they have to scale back on their plans for retired life or worst still continue working just to survive. Would you like to be one of those people? If not than spend some time doing your research and start your retirement investment planning. Which investment plans are best tools to get you to your final goals? Well it defers from person to person..

Many investors have made money investing in many different fields like real estates, stocks etc. which one is right for you? The best way is to pick something of your interest or consult with some reputed consultants. Wise decision will be not to put all your money in one bag as no investment is 100% secured. Even if you decide to stick to one sector, for example let's say you invest in stocks, if so make sure to invest in lot of different stock options and always take professional help.

One of the most important things about retirement investment planning is to be consistent. If you are investing in stocks don't take pension holidays when your funds are blooming. Whether you invest in stocks or something else consistency is as important as choosing the right fund to invest in. Now there is this theory of cost averaging: when the stocks are cheaper you buy more shares than when they are expensive as a result you get an average on price over the time. So, if you are not a consistent on your savings you end up waiting for the time when things improve as a result not saving enough. Consistency is by far the best way to help your funds grow as much as possible.

And by far the most important thing is to re-examine your plans regularly. It's easy to forget about your investment plans after setting it up and that is a big mistake as things change. New options become available and with better returns but many firms will not give you these new rates. You have to be on top of it to get the best rates or else it will affect your final retirement fund. So, you have to have a solid retirement investment planning if you want to enjoy your retired life.

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Best Investment Ideas and Best Safe Investments for 2012

By James Leitz

Here we list some of the best investment ideas and tackle the challenge of finding the best safe investments for 2012. What might appear to be one of the best investment ideas to the uninformed could turn out to be one of the worst.

Looking at the big picture for investment ideas in 2012, moderation in asset allocation and a balanced investment portfolio will be the most basic key to success. There are 4 asset classes, and average investors need to spread their money across at least the first three to keep their overall portfolio risk moderate. The 4 categories in asset allocation are: safe investments, bonds, stocks and alternative investments like gold and real estate (optional). Asset allocation can be simplified, because there are mutual funds available to average investors that represent each of the 4 asset classes. Now let's get more specific about the best investment ideas for 2012 starting with safe investments.

Safe investments earn interest and do not fluctuate in price. You will need to look outside of mutual funds in 2012 to find the best safe investments because record low interest rates have taken yields on money market securities (and hence money market funds) down to just about zero. One of the best investment ideas if you have an account with a discount broker or major mutual fund company is to shop for one-year CDs paying higher rates if you can't get competitive rates from your local bank. Do not tie your money up for longer periods just to earn a little more interest. One of these days interest rates will go back up and you will be locked in at a lower rate and face penalty charges if you cash in early.

Finding the best safe investments will be truly challenging in 2012, but here are some more investment ideas. If you are in a retirement plan like a 401k that has a fixed or stable account option do not overlook it. You can often get a much higher interest rate there (maybe 4% to 5%) than anywhere else outside of your retirement plan. If you own an older retirement annuity or universal life insurance policy, it might have a fixed account you can add money to that is guaranteed to never pay less than 3% or 4%. Remember, truly safe investments like U.S. Treasury bills and bank money market and savings accounts are paying WAY LESS than 1%!

Over the past 30 years bonds and bond funds have become a favorite with investors because they have been consistent performers and returned on average about 10% per year... basically about equal to what stocks have returned, but with considerably less risk. Many investors have fallen in love with their bonds funds and consider them to be among the world's best safe investments. Bond funds are NOT safe investments. They have performed well since 1981 (when interest rates and inflation were at record highs) for one primary reason. Both inflation and interest rates have been falling for 30 years, which has sent bond prices higher. Loading up on bond funds now is NOT one of the best investment ideas for 2012. In fact, it is one of the worst investment ideas.

When interest rates and/or inflation turn around and head upward bond funds, especially those that hold long-term bond issues, will be losers. That's how bonds work. One of the very best investment ideas for 2012 is to sell your long-term bond funds if you own any, and switch to funds holding bonds with average maturities of about five years. These are called intermediate-term bond funds; and average investors should have some money invested here as part of their asset allocation strategy to add balance to their investment portfolio. These are not truly safe investments, but they are much safer than long-term funds.

My best investment ideas in the stock department focus on stock funds. Do not go heavily into the more aggressive funds that invest primarily in growth and/or small company stocks. These pay little if anything in dividend income and tend to be more risky and volatile than the average stock fund. Go with funds that invest in high quality large-company stocks with excellent dividend paying histories. Look for funds that are paying 2% or more in dividends. One of the best investment ideas for 2012 and beyond: invest in no-load funds with low yearly expenses. No-load means no sales charges, and low expenses mean higher net returns to the investor.

Alternative investments include the likes of real estate, gold and other precious metals, natural resources, commodities, foreign investments and so on. One of the best investment ideas for managing a truly balanced investment portfolio is to include this fourth asset class as well. The simplest way for the average investor to add these alternatives to their portfolio is with mutual funds that specialize in these areas or sectors. My best investment ideas here: don't go heavily into any one area, and don't chase after a sector (like gold) just because it's hot. Real estate and natural resources funds would be my picks as two of the best investment ideas in the alternative investments asset class.

Article Source: http://EzineArticles.com/6800356

How to Invest Your Money After You Retire

By Barry Rabinowitz 

WHAT'S YOUR FINANCIAL PLAN?

Over the past two years we have been on a roller coaster ride in the financial markets, and have seen the major stock market indices fall to a 12 year low, then rebound almost 100%. Daily moves of over 100 points have been common, and with the market off close to 20% from the recent highs, many individuals are wondering about a replay of the 2008 bear market.

What should investor's be doing: Now is a good time to be reviewing your asset allocation, ie., the mix of cash, equities and bonds in your portfolio. Assuming that nothing has changed, you have a diversified portfolio, and your investment allocation adequately reflects your goals, objectives and risk tolerance, you should be "staying the course."

History shows that selling in a panic, or letting your emotions drive your investment decisions, is a recipe for disaster. In fact, the major reason investors don't earn market returns, is that they buy high and sell low, and convert all their assets to cash during a market downturn. According to Dalbar Inc., a financial research firm, for the 20 year period ending December 31, 2010, the S&P averaged a yearly compound return of 9%. However, the average stock fund investor, during that same time, averaged only 3.8% a year, as they switched in and out of funds every 3-4 years. That was barely enough to beat inflation, which averaged almost 3% annually over that period.

What's my plan? If you've worked with a financial planner, such as a Certified Financial Planner professional, CFP®, you should be able to articulate those goals all by yourself or refer to an Investment Policy Statement you made together. Your Investment Policy Statement should be relied on to keep you focused, especially in volatile times like today. All wealthy investors and large successful endowments, ie., Harvard and Yale, operate with an Investment Policy Statement. Much of the riskiest investing, overbuying and panic selling during the 1990s and early 2000s could have been avoided if individual investors had sought advice for achieving long term specific goals, such as retirement.

You pay a financial planner to devise a financial strategy that matches your risk tolerance and long term financial goals. No, there is absolutely no way to guarantee that you will never lose money. But if a plan truly matches you, the noise shouldn't make a difference, especially if you don't need the money today.
What's my risk tolerance? At your meeting with a planner, you should have discussed a number of questions about how you handle risk and what your expectations about investment returns were. You want to be certain your investments reflect your time horizon, and risk tolerance.

Am I diversified? Diversification is one of the means that you can employ to reduce market risk and volatility. Are you diversified among all the asset categories?
Do you own any bonds in your account? If you do, are they of the highest quality, and are they laddered? Many investors lost money in their bond accounts because they were not of the highest quality and/or used leverage to enhance their yields. Due to fear in the markets, municipals, which are tax free, are actually yielding more than US Government securities, which are fully taxable. Are you taking advantage of this anomaly to earn high quality tax free income?

Cash Reserves? With all the uncertainty in the economy and the markets, do you have an emergency fund of at least one- two years living expenses? You don't want to be in the position of having to liquidate securities in a down market.

Should you keep investing? Definitely. Markets go up and also go down, but over time the markets go up more than they go down. We are going through some rough weather in the economy and the markets; we have had rough periods in the past, and we will encounter rough periods in the future.
If you are worried about the market and your investments, there is no reason you shouldn't call your planner to calm your nerves and confirm what you are doing.

If your planner has not discussed any of the above with you, maybe it's time to find a new planner. And if you have never talked to a planner before, now might be a pretty good time to start.

Article Source: http://EzineArticles.com/6552727

Investing Basics - What Are Your Investment Goals

 By K Bhanot 

When it comes to investing, many first time investors want to jump right in with both feet. Unfortunately, very few of those investors are successful. Investing in anything requires some degree of skill. It is important to remember that few investments are a sure thing - there is the risk of losing your money!

Before you jump right in, it is better to not only find out more about investing and how it all works, but also to determine what your goals are. What do you hope to achieve with your investments? Will you be funding a college education? Buying a home? Retiring? Before you invest a single penny, really think about what you hope to achieve with that investment. Knowing what your goal is will help you make smarter investment decisions along the way!

Too often, people invest money with dreams of becoming rich overnight. This is possible - but it is also rare. It is usually a very bad idea to start investing with hopes of becoming rich overnight. It is safer to invest your money in such a way that it will grow slowly over time, and be used for retirement or a child's education. However, if your investment goal is to get rich quick, you should learn as much about high-yield, short term investing as you possibly can before you invest.

You should strongly consider talking to a financial planner before making any investments. Your financial planner can help you determine what type of investing you must do to reach the financial goals that you have set. He or she can give you realistic information as to what kind of returns you can expect and how long it will take to reach your specific goals.

Don't invest to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it! Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.
Again, remember that investing requires more than calling a broker and telling them that you want to buy stocks or bonds. It takes a certain amount of research and knowledge about the market if you hope to invest successfully.

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Financial Planning Advice

By Steve Mackie 

If you want to enjoy a better level of financial security, good financial planning is essential. Knowing what to do with your money to get the best results and how to implement a solid planning strategy can be difficult, so it's a good idea to employ the services of a financial advisor.
Advisors can offer guidance on any financial planning matter, with many of them specialising in a certain field. While you can find information about wealth management online or in books, getting qualified advice from someone in the financial services industry makes much more sense. You can't always be sure that what you read online is up to date or entirely factual, so it's better not to risk it.

Choosing a Financial Advisor
When looking to approach a financial advisor you should always make sure that they are regulated by the Financial Services Authority (in the UK), or the relevant authorising body in the country from which they operate. Using regulated financial advisors means that if something goes wrong, you have an avenue for an official complaints procedure and potentially even compensation. Always check the financial authority's database of registered users before you commit to a product from any financial advisor or financial planning company.
Professional advisors are well trained and qualified to give you all of the most current planning advice across a wide range of areas. You might be looking for financial planning advice to help you set aside a lump sum to help you in the future. Your financial advisor will be able to tell you about the different products and services that you can use to ensure that your money is safe and well invested. They will discuss different options with you such as savings plans or lump sum and offshore investments - an independent advisor will be able to source products from across the whole marketplace ensuring that you get impartial advice with your best interests in mind.

Financial Planning For A Variety Of Purposes
Among the other financial planning matters that a professional advisor can help you with are things such as retirement and pension planning, education fees planning, life assurance/insurance and medical insurance policies. A good financial advisor will never try to force you to invest in something or purchase a specific product. If you feel that you are being pushed into a financial planning direction that doesn't feel right for you, it may be a good idea to walk away and try to find a more reputable financial company to help you with your requirements.

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Is Now a Good Time to Invest in Gold?

By Lawrence Reaves 

Gold has been enjoying record breaking price rises over the last couple of years. This has been thanks largely to the poor economic climate, and the financial crisis which sent shock waves around the global system. The question many people are now asking is whether the gold market has topped out and if so, should they buy or sell?
Gold broke through the record $1,200 an ounce ceiling last year, but it has bounced around for some time. There is a lot of market uncertainty which is fuelled by the slow, but definite improvement in the underlying economy, particularly the recovery in the stock markets and the easing concerns over interest rates.

The Buy/Sell Decision
Buying gold makes financial sense when the stock markets are falling and the economic outlook is grim. Governments and institutional investors buy gold as a hedge against inflation and to prop up the value of their currency; buying gold also makes sense because the value will increase as times get harder. The gold market is therefore populated with more buyers than sellers, and the demand for gold will force the price ever upwards.

Selling gold makes financial sense when the economy is picking up and stock markets are rising. It is better to invest in stocks and bonds where there is real growth and inflation beating returns available, rather than hold gold. The lack of buyers for gold results in the price of gold dropping.
So, should you buy or sell?
This depends on your outlook for the economy. At the moment the indices are starting to look positive for an economic recovery which means that the smart money is selling gold. This is reflected in the plateau that has been reached in the gold price after breaking through the $1,200 ceiling. In fact, the price of gold has started to slip in direct reaction to good economic news.

For individuals who have gold, usually in the form of old jewelry, the price of gold is at an all-time high. More positive economic news will certainly lead to the record price for gold dropping further, and it is likely that the price of gold will go into freefall as investors look to unload their holdings and move back into the stock markets.
This means that there is a strong SELL recommendation for gold holders.

How do you sell your old gold?
Selling old gold items is simple. Go online and find a company which is a "refiner"; this is a company which will actually take your old gold and turn it into "new" gold. Refiners will advertize their "spot" price for gold, which will fluctuate on a daily basis, so be sure to check it frequently. Once you have found a company you wish to do business with, they will arrange for a secure courier to collect your items, they will then appraise them and make you an offer. You can decline the offer, in which case they will be returned to you, or you can accept the deal and a check or bank transfer will be with you within a week.
It's as simple as that, so remember NOW is a GOOD time to SELL your old GOLD.

Article Source: http://EzineArticles.com/5785141

2 Smart & Easy Ways to Save

 

 By Connie Barker 

Saving is one of the most beneficial things you can do to plan for the future. For those that save money on a regular basis, you can find that it is much easier than you think to save for college, buy a home or a large purchase such as a dream vacation. Unfortunately, saving is not easy to do and requires discipline, but if you want to save money, here are two smart and easy ways to do so.

Save Money Using a 401K Account
One of the easiest and most effective ways to save money is through an employer's 401K account. With a 401K account, you can have your employer deduct a set amount from your paycheck during each pay cycle. The good news is that you receive your paycheck with the amount already deducted- this ensures that the amount is saved each pay period. Once deducted, you have the option of investing the money in stocks, bonds, mutual funds, money market accounts, etc. So not only are you able to save a specific amount of money each pay period, but your money will hopefully grow.

Another great feature regarding 401K accounts is that when money is deducted from your paycheck it is deducted without tax. Taxes are not paid upfront, only when you cash out your 401K account. This means you can save money that is normally taxed, invest it, and reap the benefits of growth, all before having to pay taxes on it.

Save Money by Paying Yourself First
If you are self employed or your employer doesn't offer a 401K plan, one strategy to make sure you save money is to pay yourself first. Just like you will always find the money to pay off the electric bill, you should always pay yourself first. Come up with a percentage or a set amount each pay check such as $50 per paycheck or 10% of the net and in a few short months, you will be amazed at how much you were able to save.

To increase the effectiveness of this strategy, try to place your saved money in a savings account where it will grow with the help of a compound interest rate. Saving as little as 5% of your paycheck can leave you with a small fortune of several hundred dollars to a couple of thousand dollars at the end of the year.

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