lmi300.jpgIn periods of volatility, it is natural for investors to be concerned about the value of their investments. However it is important to remember that equity investing is for the long term.

Over the past 25 years, equity markets have weathered fluctuating conditions to deliver strong returns.

Equities do carry a higher level of risk than bonds and cash, and investors can expect greater levels of volatility. But as a part of a well diversified portfolio, they have historically proved the best way to grow capital.

Significant events:

  • Black Monday Crash – Oct 1987 Worst single-day market crash in history as the Dow Jones loses nearly a quarter of its value.
  • Gulf War (Desert Storm) – Jan 1991 US- led forces repel Iraqi invasion of Kuwait. Global markets largely take the conflict in their stride.
  • Black Wednesday (Sterling leaves ERM) – Economic imbalances and currency speculation force sterling out of the ERM. A large devaluation in Sterling prompts speedy recovery.
  • Russian default/LTCM Crisis – Aug 1998 – Russia defaults on loan repayments, causing contagion across many assets. Hedge fund LTCM loses billions of dollars, but concerted efforts of global central banks stabilise markets.
  • Height of Tech Bubble – March 2000 – NASDAQ peaks in March 2000, driven by speculative demand for technology stocks. Prices reach unsustainable levels, triggering a dramatic crash and a three year bear market.
  • Terorist attacks on America – Sept 2001 – Investor nervousness grows in the wake ofterrorist destruction of the World Trade Centre. Interest rate cuts by global central banks helps to restore confidence.
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The other day I read an amazing statistic? It said that as many as half the people who end up divorced had a strong feeling before the wedding that they were doing the wrong thing but they were too embarrassed to pull out at the last minute. The fear of embarrassment is a powerful influence in the lives of most people.

Imagine that you slipped over in a public street, what would your first reaction be? If you are like most people you would look around to see who saw you.

Another, well known, statistic is that fear of public speaking is the number one fear that people have, but is it true? I suggest that their fear of public speaking is really a fear of being embarrassed publicly if they mess up.

So what’s all this got to do with being broke?

In order to become wealthy you need to set a goal to become wealthy. Since having lots of money is a lot more fun than being broke why doesn’t everyone set a serious goal to be rich? The reason is that they are afraid of the embarrassment if they tell everyone that they are going to be rich and then they fail.

It seems crazy to let your life be controlled by the fear of what other people may think of you, yet that is exactly what most people are doing. What about you? Are you letting the fear of embarrassment keep you from reaching your full potential, financially or otherwise?

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loans1.jpgAfter consumers complete the loan application and have chosen a loan type, the lender provides several documents to borrowers that disclose important aspects of the loan.

When it comes to borrowing money, it is common to focus on the interest rate. It makes sense, because the interest rate plays the largest role in determining how much the loan will actually cost, plus the interest rate is the easiest way for lenders to market their products.

While interest rates are certainly important, every loan has four common factors that will ultimately determine whether or not the loan is a good deal.

– Most loans come with some type of fee. This fee is usually used to pay for processing or originating the loan, and the fee isn’t always transparent. Sometimes the fees can be worked into the overall cost of the loan, or they may be completely separate. You will probably have to ask in order to find out what the fees are.

– Again, interest rates are used to advertise most loans, and obviously, the lower the rate, the better. One thing you do have to consider is whether the rate is fixed or adjustable, and if there are any special conditions that need to be met in order to qualify for the advertised rate.

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22778734.jpgThe recipe for a successful business meal seems deceptively easy. “Let’s meet for lunch,” you tell a client or associate. You get together. You talk business. A business lunch is never about lunch, it’s about business.

The self-made rich don’t get there by accident. They weren’t broke up until one day when they went to their mailbox they found that someone had left them a check for a few million dollars. The self-made rich got rich because of what they know, how they think, what they do and how they do it.

Do you think that if you knew what they know thought like they thought, and did the things that they do, in the same way that they do them, that you too may become rich? I think that you would find that indeed you would become rich by following that formula.

But why take them to lunch (or dinner)? The self-made rich have learned that their time is very valuable. You may be able to buy some of their consulting time but it won’t come cheap.

But even the rich have to eat sometime. Also, when that rich person is having lunch he is probably more relaxed and open to conversation.

What do you think a self-made rich person likes to talk about? You will probably find that his two favorite topics of conversation are himself and the things that he is doing to make money. The self-made rich get that way by following their passion and learning how to leverage that passion so that it provides them with a large amount of money.

Okay. Why should you pay for lunch? After all, that rich person can afford to pay much more easily than you can.

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captsgeooj83130407111840photo00photodefault-376x512.jpgThe euro climbed to a record high of US$1.5070 in midmorning European trading on Wednesday as sentiment increased that the U.S. Federal Reserve would continue its rate cut campaign.

Oil prices rose to a new intraday high near $102 a barrel Wednesday as a slide in the U.S. dollar prompted investors to pump more money into energy futures as a hedge against inflation.

Along with the rise in the British pound, which is nearing US$2 again, the surging euro will not be kind to Americans visiting Europe — they’ll have to pay more for hotel rooms in , entrance fees at the Louvre and chocolates in Belgium.

On the other hand, the stronger Euro makes shopping trips to the more appealing to Europeans.

The Euro’s strength is not likely to weaken anytime soon, given that any “worsening in interest-rate differentials dilutes a key support for the dollar.”

Weaker growth prospects in the United States, coupled with its deficit will “exert a significant downward influence” in the long term and cause some countries to shift more of their reserves from dollars to other currencies, including the Euro.

But, at the same time, the European Central Bank, which has left its own rates unchanged since last summer, is expected to keep them at 4 percent when it meets next week.

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moneystack1.jpgTo be a good investor it requires financial intelligence that you should constantly improve. You have to start reading a lot of books and magazines, the great idea can come without even knowing. Inform yourself from local, national, even from global news. Any information you get from TV or newspaper, you need to learn something from it, keep your mind open. That’s how you start to become a good investor.

Successful investing requires three components, money, time and discipline, the chances are that you have the first two and have to work on the discipline part.

Investors who analyze the company can better judge the value of the stock and profit from buying and selling it. Your greatest asset in stock investing is knowledge (and a little common sense). To succeed in the world of stock investing, keep in mind these key success factors:

Analyze yourself. What do you want to accomplish with your stock investing? What are your investment goals?

Know where to get information. The decisions you make about your money and what stocks to invest in require quality information.

Understand why you want to invest in stocks. Are you seeking appreciation (capital gains) or income (dividends)?

Do some research. Look at the company whose stock you’re considering to see whether it’s a profitable company worthy of your investment dollars.

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retirement-planning.jpgWhen people discuss retiring or having a sea change or chasing their passion, the different reactions usually involve money: “I’d love to do it but I don’t have enough money.”

You reach retirement age and don’t have enough to retire on, you’ll be left with two options, either to delay your retirement or reduce your standard of living in retirement. Which one would you choose?

It always helps to know what you are aiming at and wealth creation is no different. I will assume that you want to build wealth in order to be able to retire and still live well. How much money will you really need?

I was attending a wealth building conference and one of the other speakers, a financial planner, made a statement that when you retire you only need about 50% of you pre-retirement income. I was amazed at this statement and I asked him back stage how he came to that conclusion. He told me that all retired people do is sit around and watch television all day.

My response to him was that this was a description of what broke people do (namely his clients). Retired people who have successfully built a decent wealth portfolio are living the time of their life! What are you aiming at? The lifestyle of the television watching clients of our financial planning friend or the time of your life lifestyle that comes with wealth?

How much will you need for a good lifestyle in retirement?

The short answer is that, if you want to maintain the lifestyle that you are accustomed to then you will need a monthly income equal to your monthly income one month before you retired. Anything less and there is something that you will have to give up.

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tuition.gifCollege costs increase at about twice the inflation rate. Current increases have averaged 5% to 8%.

It is no secret that college tuition and expenses have been on a steady rise for many years. This has many families worried that they will not be able to afford to send their kids to college. Many even shy away from encouraging their children to dream of a college education. Trade skills are almost being forced on the younger generation. The daunting and staggering college costs are changing the way that we raise our kids.

Imagine if you were told not to dream. What if you told your parents that you wanted to be a doctor and they just had to turn you down? What does this do to the self esteem of a young child? Many families, college educated or not, struggle to keep up with housing costs and the cost of living in general. Saving for college simply is not in the cards for a lot more families than many would like to believe. What does this mean for the future of our country?

We are trending towards generation after generation of minimum wage and poverty level workers. What happens then? They can not afford college for their children and so the cycle continues. If you have been worried about affording college for your children, then there are some things that you should realize.

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college_degree_250x251.jpgAn education loan is a form of financial aid that must be repaid, with interest. Student loans also provide a variety of deferment options and extended repayment terms.

Student and graduate loans are becoming more popular as student debt continues to rise and students seek alternative ways of dealing with it. The good news is that student or graduate loans are generally available without the need to show steady income or offer security. This is extremely helpful, as most students will not have either of these.

Student and graduate loans also come at relatively good interest rates, particularly having regard to the fact that they are completely unsecured. The thing to be wary of is that such loans may lock the student into a long-term relationship with the lender that may not be the most advantageous one.

Graduate loans on the other hand, are far more expensive than student loans. These loans are generally offered on graduation, when student loans are no longer available, to cover the costs of transition from student life to working life. This may include finding a new place to live, buying work clothes etc.

Graduate loans will also be used to pay off student overdrafts, which are offered to all students as standard features of their bank accounts. The point to remember is that while graduate loans are relatively cheap when compared to personal loans, they are far more expensive than student loans.

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Offshore investment is the keeping of money in a jurisdiction other than one’s country of residence. Offshore jurisdictions are a commonly accepted solution to reducing excessive tax burdens levied in most countries to both large and small scale investors alike.

Selected offshore domiciles are superficially viewed by some as havens used by to conceal or protect illegally acquired money from law enforcement in the investor’s country. Although this may be the case, legitimate investors also take advantage of higher rates of return or lower rates of tax on that return offered by operating via such domiciles. The advantage to this is that such operations are both legal and less costly than the solutions offered in the investor’s country – or “onshore”

Another reason why ‘offshore’ investment is superior to ‘onshore’ investment is because it is less regulated, and the behavior of the offshore investment provider, whether he is a banker, fund manager, trustee or stock-broker, is freer than it could be in a more regulated environment.

Offshore investing refers to a wide range of investment strategies that capitalize on advantages offered outside of an investor’s home country.

The most important advantage in offshore investing is that you can make a lot of money without paying almost any taxes. If the investor lives in a place where he pays taxes like most countries then he will only pay taxes on his dividend or interest made.

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