Most adults know that they need to invest in order to meet their long time financial goals. Most people enter the investment world with little real live experience, even less investment-applicable education, and a myriad of unrealistic expectations.

Every investor is different, and each has their own set of criteria. Some may base their decisions purely on the facts; others might be more inclined to factor their feel for the people at the helm into the equation. Some may be in the right frame of mind for risk-taking; others might be playing it safe for a while, or waiting to see how out-standing investments play out.

Seven Realistic Expectations – This Is What You Want:

1. I want to lose less market value than my markets do, during cyclical corrections.

2. I want always to be prepared for corrections, and with enough cash to take advantage of lower prices.

3. I want my investment “base income” to be dependable and consistent — even in the midst of financial crises.

4. I want my investment portfolio to make faster moves to new All Time Market Value Highs.

5. I want the productive “Working Capital” in my portfolio to grow constantly and consistently throughout the market cycle.

6. I want my annual “base income” to grow every year, regardless of market conditions.

7. I want never again to experience disappearing profits in excess of a reasonable target %.

Six Steps To A Secure Investment Future – This Is How You Get It:

1. Learn how to use “cost based” asset allocation techniques.

2, Learn how to develop and apply fundamental risk minimization techniques.

3. Learn to understand the investment environment and to use it to your advantage.

4. Learn how to select income investments and how to guage their performance.

5. Learn how to select “safer” stocks, diversify properly, and to establish profit targets.

6. Learn how do protect yourself from the demons of Wall Street and their media cronies.

Author:- Steven Selengut

 “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”- Warren Buffet.

The right time to get back in the market may be just around the corner. With global economies sinking, sometimes dramatically, it can be a scary thought to put your hard-earned money on the line. However, a smart investor will realise that golden opportunities are appearing if proper research is done.

It has not dropped dramatically since the financial collapse of 2008-2009, but it is still in familiar territory. It may take another another year or more for a large upswing in the markets, but at least we hope that the Dow will not drop below previous lows. That may bring hope and some peace of mind about starting to invest again.

For investors, the operative question is simple, albeit very broad: In the midst of this crisis, what do we do?

A good rule of thumb: If a stock you are considering for investment depends upon a speedy return to normal, you should be looking elsewhere. Warren Buffett has often said that you should invest in businesses that you wouldn’t mind owning if the stock market were closed for an extended period.

Dollar Cost Averaging

The concept of Dollar Cost Averaging comes to mind in the current market situation. It is the process of buying stocks or similar investments on a regular basis, such as once a month, using a fixed amount of money. When prices are low, you are able to buy more shares. When prices are high, you buy fewer. In this way, you are able to take advantage of temporary low prices. This is especially helpful for long-term investments, such as retirement accounts. It may go against human nature to buy stocks when everything is falling and red but in fact it can lead to a bigger payoff if done correctly.
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We have seen a number of dark days for stock markets all around the world in the past months. But how frightened should we be? Is the next Great Depression upon us? How can we distinguish a small crisis from a huge one? One way to deal with these questions and to calm our feelings of panic is to look closely at a single bad day. When we do that, the details can show us that the bigger picture may not be as bad as we fear, and, hopefully, quell our feelings of panic.

Let’s look back at September 29. On that day, the Dow Jones Industrial Average fell 7% and the S&P dropped by 8.8%. The Dow’s declines were the largest since the 9/11 attacks, and the S&P had its worst day since Black Monday in 1987. Media headlines included comparisons to the “Crash of 1929” and even “The Great Depression,” but, in spite of all of this, were things really as bad as they seemed?

The first thing to do when we have a horrible day like this is to look at as many of the details as you can. Now, when you do this you should expect some bad news. But the real insight will come when you compare the details of a single bad day to the details of an even worse day that history has proven to be a true market crash.

So let’s put September 29 into perspective.

Before the US stock markets opened on that morning, bad news was already spreading. The financial crisis had reached Europe. Governments were forced to bail out the Belgium bank Fortis, the U.K. nationalized mortgage lender Bradford & Bingley, and Germany’s Hype Real Estate Holding. At home, Wachovia announced that it was in talks with several firms to be sold. Wachovia, in fact, did not fail, but scared customers had pulled their funds after Washington Mutual’s collapse.

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It’s virtually impossible to know what size home you can afford if you aren’t fully aware of how much money you are earning and how much you are spending each month.

Start with your income: How much do you bring home after taxes and retirement plan contributions?

Next, look at your expenses: What are your necessary expenses? How much are you paying each month toward your debt? What additional expenses do you have that wouldn’t be deemed “necessary?” How much money do you have left (if any)?

This will help you see how much breathing room is in your current budget, what expenses might be on the chopping block and the space you have for additional home and mortgage expenses when buying a home.
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emergency-fund

In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. People who are living on a lean-and-mean budget will have the toughest time setting aside money for emergencies. If it’s possible to squeeze out another $40 or $50 each month and put it in a money market account, it’s worth doing.

Establishing an emergency savings account is vital in good times and in bad. The purpose of the fund is to sock away three to six month’s living expenses. But this money could also be used when you’re staring at major, unplanned expenses such as a car breakdown or a leaky roof.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit.

Saving your money in a small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

I echo the idea of treating the emergency fund as a bill, put the money away and don’t be tempted by the latest sale. Success at building an emergency fund depends on consistency of saving money on a regular basis and keeping this money separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point.

The size of the special savings account will depend on your personal situation. I always advice my clients to keep between three to six months salary in the reserve. But you will have to decide on an appropriate amount based factors such as your Dependants and fixed monthly expenses.

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Stock prices reflect the trading decisions of many individuals and I have been thinking of starting a stock market prediction business. Clearly, there is a huge market for timely information of this type, and just as clearly, predicting the future is much easier than dealing with the realities of what is actually happening at the moment.

If investors could know what’s going to happen next, they could develop a plan to deal with it NOW; maybe Wall Street will help me get this new business up and running.

What’s that? Wall Street institutions already spend billions predicting future price movements of the stock market, individual issues & indices, commodities, and hemlines. Really? Is that right also? Economists have been analyzing and charting world economies for decades, showing clearly the repetitive cyclical changes and their upward bias.

Funny, or strange would be more accurate, that the advice generated by the oracle of Wall Street always assumes that the current environment, good or bad, will be everlasting. Isn’t it this kind of thinking that prolongs the downturns and “bubbles” the advances– in all markets?

If it were true that our favorite pinstriped product pushers can actually predict the future, why would investors do what they do in response to the predictions? Why would financial professionals holler: “sell” at lower prices, and “buy at any price” when market valuations surge upward?

Here’s some experienced advice that you will not find on the “street of dreams”: Sell into rallies. Buy on bad news. Buy slowly; sell quickly. Always sell too soon. Always buy too soon. And by the way, who do you think is buying and selling the securities you have been told to dump or to hoard?

No self respecting guru would ever refute the basic truth that the market indices, individual issue prices, the economy, and interest rates will always move in both directions… unpredictably and forever.

This is where you need to focus your attention if you want to get through the investment process with your sanity. You must expect and plan for directional change and learn to use it to your advantage. Tranquilizers may be necessary to get you through the first few cycles, but if you have minimized your risk properly, you can thrive on the long-term, and very predictable, volatility of the markets.

The risk of loss cannot be eliminated. A simple change in a security’s market value is not a loss of principal just as certainly as a change in the market value of your home is not evidence of termite damage. Markets are complicated, and emotions about one’s assets are even more so.

Cyclical changes in all markets are predictable conceptually, just as knowing approximately where you are within a cycle is knowable actually. The key is to understand what your securities are expected to do within the cyclical framework.

Predicting individual stock prices is a totally different ball game that requires a more powerful crystal ball and an array of semi legal and illegal relationships that are unavailable to most investors. There are just too many variables.

Prediction is impossible, but probability assessment has enormous potential. Investing in individual issues has to be done differently, and with rules, guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation tools that are portfolio specific.

This is not nearly as difficult as it sounds, and if you are a shopper who looks for bargains elsewhere in your life, you should have no trouble understanding the workings of the stock market. There are only three decision-making scenarios that investors need to master if they want to predict long-term success for their portfolios.

The “Buy” decision has two important steps: Step one allocates the available investment assets, by purpose, between equity and income securities, based on the goals of the investment program. It is done best using a “cost” based model. Step two establishes strict selection quality measures and diversifies properly within each security class.

The “Sell” decision involves setting reasonable profit taking targets for every security in the portfolio. Loss taking decisions must not be undertaken out of fear, and must be avoided during severe market downturns. Understanding the forces causing market value shrinkage is important and a highly disciplined hand at the emotion control button is essential.

Market Value is a decision making assistant… buy lower & sell higher than you buy.

The “Hold” decision is most common, and it regulates and moderates the process, keeping it less than frantic. Continue to hold on to fundamentally strong equities and income securities that are providing their normal cash flow. Hold weaker positions until the appropriate cycle (market, interest, economy) changes direction, and then consider whether to sell or to buy more.

Wall Street spins reality in whatever manner it can to make most investors unhappy, thus increasing new product sales. Your confusion, fear, greed, impatience, and need for a quick panacea fuels their profit engines, not yours.

What will the new decade bring for employment and career prospects? An interesting set of statistics posted by the Bureau of Labour offers some insight into trends and provides information on where career and business opportunities might lie.
1) Management and consulting services

Leading the list of five industries with the largest wage and salary employment growth potential in the ten years from 2008 to 2018 is the category of management, scientific and technical consulting services.

The sector falls under professional and business and could see an increase of 82% in employment figures. It will certainly prove to be the decade for consultants and professional advisors.

2) Services for the elderly and persons with disabilities

There is no prize for reckognising this as a growth area for employment. This field, falling under health care and social assistance, is considered to grow by 73% in providing employment and business opportunities.

With the ageing population in almost all parts of the world, it is not difficult to see that providing care for elderly people will be a substantial growth industry. Furthermore, as civilisations become more aware of the rights of disabled people, this in turn will lead to more inclusive care facilities for disabled people.

Besides the trend towards mainstreaming disabled people in schooling and the work environment there is a further push to allow disabled people to live independent lives. This particular trend will lead to a growth in the category described in number three.

3) Home health care services

Another winner in the health care and social assistance sector is the home health care service industry. This is considered to have growth potential of 46% for wage and salary employment.

Allowing the elderly to remain at home and providing assistance with care will become a more humane way of dealing with frail people. Add to this the care of disabled people at home rather than at institutions and one can see this sector could be in for a growth in employment opportunities.

4) Computer system designs

Systems design and related services falling under professional and business sector is considered a growth area in terms of wage and employment and is said to be growing by up to 45% in the period under discussion.

Technological innovation will provide for a large scale requirement for computer systems. Every gadget has a computer chip and operating system. Designing these will allow for more employment. Could it mean that computer science should become a compulsory subject in schools?

5) Retail trade

The retail trade may be growing and showing an increase in wage and employment opportunities of 40% during the term under discussion. Some of this growth could be diversified though in that the retail sector is showing particular growth in the online environment.

Some parts of retail will migrate more towards the computer system design skills set and move away from stacking shelves and ringing up goods on a cash register. Either way, retail will employ more people.

These are some interesting trends and it might be advisable for young people and members of the older generation finding themselves without traditional jobs to focus on acquiring skills in any of the above industry sectors.

Debt has become a major issue in the life of the Americans. In order to resolve this problem the two most valuable results are either debt settlement company or filing bankruptcy. But before you opt for any one of the above mentioned programs you need to know the advantages and disadvantages that would help you to choose the right kind of plan that would suit your pocket.

Determine the depth of your debt:

1) Demand a copy of your credit report from the credit card companies.

2) Recheck the information provided on the statement of the credit card companies. Search for any incorrect entries regarding personal information, account which are not liable to you and even accounts which are actually paid in full but showing an out standing balance.

3) Keep a record of the credit score which is also known as Fair Issac Credit Organization (FICO) score. FICO has been named after a software that calculates the credit score. The average FICO score on the ascending side is 500.

4) Add up all the balances that are due from your credit accounts, loans, both the secured and unsecured loans and also include the collection account.

All these information would help you to decide to make a choice between a debt settlement program and filing for bankruptcy.


Keep a check on the monthly finances:

Prepare a spread sheet where you can incorporate all the credit information regarding the income and expenditure. If you file for bankruptcy you have to present the average monthly income and that too before 6 months filing for bankruptcy petition. In both the cases debt settlement program or filing bankruptcy requires the calculation of the monthly income. Make a separate spreadsheet for the monthly expenses like groceries, insurance, education related cost and so on.

Now subtract the total amount of expenditure from the total amount of income, the amount which would be left can be used to repay the debts you have incurred. If you have a zero balance or negative balance then it shows that you cannot afford to pay off the debt.

How do you know that debt settlement is right for you?

• See if you can pay off your debt with the current income. If your income is less then the amount of your expenses then be sure that debt settlement program is not a good solution for you. It won’t be able to deliver you out of this financial crisis. If your monthly income is more than your expenditure then the debt settlement company can guide you with debt solutions
• Calculate the total amount of credit card debt you owe and find out whether you qualify to enroll for a debt settlement service. Choose a debt settlement company according to the total amount you owe as each company varies the credit card balance requirement.
• Choose a reliable debt settlement company. Avoid the companies which charge a huge up front fee. Choose the debt settlement companies which are accredited by Better Business Bureau. And ensure that the fee they are charging are affordable for your pocket.
• Prepare yourself regarding the negative aspect that surrounds a debt settlement company such as creditors call, damaged credit record and tax problems.

How do you know bankruptcy is right for you?

• Look for other option other than bankruptcy if that can pull you out from the financial catastrophe. On line search can give innumerable options like debt settlement programs, debt management programs and so on.
• Do you qualify for filing bankruptcy? Just search for bankruptcy code on line and there are even books which can explain the bankruptcy in much easier way. Hire a bankruptcy attorney who can give you an able guidance and make you aware whether you qualify filing for bankruptcy or not.
• There are many chapters in filing for bankruptcy see in which chapter you qualify before filing for bankruptcy read through the rules and guidelines associated with each of the chapters.
• Keep it in mind that bankruptcy remains on your credit record for a long time, So if you file for bankruptcy you should prepare your self that you are going to ruin the credit record for next seven years.

So it’s your call to choose the right plan for you which would help you to burden you from the horrid night mare of debt.

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Dan was a single guy living at home with his widowed father and working in the family business.

When he found out he was going to inherit a fortune when his sickly father died, he decided to find a wife with whom to share his fortune.

One evening at an investment meeting he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.

“I may just look an ordinary man” he said to her, “but soon my father will die and I will inherit $200 million”

Impressed, the woman asked for his business card and three days later, she became his stepmother.

Women are so much better at Financial Planning than men.

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