Posts Tagged ‘cash’

House and Money Investing

Do you want to build a home? The one that is of standard and does not require a lot of money-work? You better start to invest in a manufactured home. Because of the past financial crisis, many people suffered from their mortgages in their housing loans. So other investors thought of refurnishing those cheap manufactured homes (aged 5 to 25 years old) and later on sell them at a higher price with a mark-up price of 25%! Good idea in investing money, isn’t it?

You can guarantee that it is of quality as it is built with specifications and standard materials. Once it is done, one can simply move the house to the place or lot where they want it. It is good if they have invested on land already. It is possible that buyers can have a $4000 savings on it depending on their location. That’s a great savings!

There are things to consider in the location before you move the house. You need to check the most basic necessities like electricity, water, light, gas, sewer connections. All of these need to be incorporated or installed in the house. So make sure as before selling it, you have already fix these things.

Take this recommended budget of $110,000 to remodel a manufactured house and you can sell it at $185,500 after all those property and insurances taxes deducted from it. So you may try to partner some construction companies and check how you could work out with the budget.

Paid To Blog: New Online Income

People are so lucky today that with the presence of the internet, a lot of income opportunities await those who work at the convenience of their computers at home. Simply because there are many lucrative ways to be done online and those who prefer working at home like me!

To those who are new or still learning the world of blogging, it will be a good jumpstart for you to know how blogging will help you in terms of monetary aid. Getting paid to blog is one eye-opener for those who own blogs or websites. The opportunity to express your opinions or views on stuff that you want to talk or share about online is a milestone for many when in the old time we just have our own personal diaries to record events or memes day by day. But if you get paid with your hobby of writing is totally a lot interesting and most of all, fun!

Blog marketing is indeed very easy now with blogadvertisingstore.com. They open new and better horizons to bloggers and aspiring writers. They try to make it very easy for both advertisers who need the services of bloggers. You get the convenience on the things that you need. And it is a sure pay! Satisfaction guaranteed on both parties. All you need to do is have a blog. Put good content to it and learn to drive traffic to it so many will also read or see you blog. That is very important to get more paid writing opportunities from blogadvertisingstore.com.

Voicing out your own opinions or topics that interest you through your blogs is one form of expressing your views and points. If you are share something online, it will be a great avenue for a lot of people to read what you have in mind and know what you are feeling.

This new paid to blog opportunity is a great help for a lot of people who are staying at home and doing work-at-home jobs. This is legit and sure way of online income. Hope this help a lot to you.

13 Advantages of actively managing your money yourself

A friend of mine forwarded the article below to my email. It’s about managing your money on your own while not getting any help from financial managers or experts. I would like to share this to you as it may give you an idea on making decisions on how will you want your hard earned money be managed.

In my opinion, I will agree to some points of the author but it’s also good that we also have those fund managers or financial experts do the job in growing our money. I also have “some” of my money or investments handled or coursed through brokers or fund managers as I find their capabilities significant in my investing strategies. So far, I’m satisfied with the service, it’s just how you look for a good broker with less or minimal fees and of course, TRUST is important. These people already got the experience and  they know that their primary concern is giving you the best they could do. To make their client happy! If you think, they are helpful enough, I think, you might stick to them for “some” not all of your investments.

I’m definitely a NEWBIE! To start in this money endeavor, seeking help from those knowledgeable folks is a good option. If I find myself capable of doing it on my own, having mastered the strategy, then, I will be better to manage my own money already.  For now, learning from others and getting the best option from those financial experts is still my recommendation. Well, you may want to read the article. Read it below:

Most investors do not realise, but as a private investor managing his own money, he has got an immense advantage over a fund manager due to factors he may not even be aware of.

Sure it will take up some of your free time but it will probably be one of the most awarding activities you can invest your time in. We have all worked hard for the money we have saved and it would only be prudent to invest in the best way possible. With public pension systems crumbling around the world because of ageing populations, making the most of your savings had gotten much more important.

1. You can wait

As a private investor you can wait for attractive investment opportunities to present themselves. If you cannot find anything attractive you can stay in cash. Fund managers do not have this luxury.

They have to invest in whatever their investment area is irrespective of valuation. Holding cash in the fund management world is known as career risk as the fund manager runs the risk of falling behind his peers or his benchmark. The larger the cash position the higher the career risk.

The best example of career risk I have read is value fund managers losing their jobs because they refused to buy internet shares during the internet bubble.

2. You can invest anywhere and everywhere

As a private investor you can invest in any type of asset in any country that offers an attractive risk return trade-off, be it corporate bonds, equities, options, real estate etc.

Fund managers have to stay within the fund’s investment area. Additionally complying with regulations, even further limits their investment choices. You can argue that you can change to a fund in another investment area but that is also actively managing your money.

3. You can invest in any size

This is similar to the investing anywhere and everywhere as you have the freedom of investing in small or large companies whatever is most attractively priced.

I was recently astounded when I heard of a value fund manager that had to invest in companies that have a high weighting in a particular share index because he had institutional investors (read large investors) that would withdraw their funds should his performance deviate too much from the market.

This is ludicrous, why invest with a value manager if you really want market index performance? You want a value manager to do what he does best, search for undervalued companies.

4. You have no benchmark

As a private investor I only have one goal in mind, to grow my investment portfolio each year irrespective of what the market does.

I do not consider it a good year if I have lost 25% while the market has lost 40%.

I am sure your goal is the same.

Fund managers only have one goal, beating his benchmark irrespective of absolute return. I cannot remember how many times I have heard a fund manager say that he has to remain fully invested in his investment area as that is what his investors expect of him.

Just think of what happened to investors in technology funds as the internet bubble deflated.

5. You can focus and ignore

Studying, understanding and applying what has worked in investing is all you need to do to be wildly successful as a private investor. You can only focus on a few things and ignore the market noise, you only have to spend relatively little time to be successful.

Fund managers have to have an opinion on a lot of different investment areas because they have to appear competent in company and client meetings. It is tough for them to have to say I do not know.

I do not watch financial television, its complete rubbish and a waste of time.

Mainly yo-yo news i.e. what went up and down.

I have my investment criteria, I look for companies that falls within it and I study only that. The rest does not interest me and that saves a lot of time.

6. No conflict of interest

This is a big one. You only have your best interests at heart. In other words all your decisions are in your best interest.

Fund managers have to think of keeping their jobs, increasing their assets under management and keeping clients happy. All this means is that their investment performance is not the most important thing on their minds.

Also fund managers in companies what also offer investment banking services may be pressurised to buy securities of investment banking clients irrespective of investment attractiveness.

7. You can have a long view

According to a study by the New York Stock Exchange the average holding period of shares held by investors have declined from five to six years in the 1950’s to 11 months. That means that the average investor has an investment horizon shorter than one financial year.

It is unlikely that a company with problems, as undervalued investment inevitably have, can sort them out in such a short period of time.

As a private investor you can follow the company over many years and realise the gains when the company gets revalued by the market. This may be the largest competitive advantage you have.

The ability to look at a company solely on valuation and keep it as long as it is undervalued.

8. No peer pressure

Accept if you discuss your investment with friends or family you will have no peer pressure to buy or sell any investments. I have gotten to the point that I am reluctant to discuss my investments because the response I get is either, “never heard of it” or “what, you must be mad, don’t you read the newspaper?”

Fund managers have a different problem. The funds they manage get compared to benchmark indices and other funds, including the individual fund holdings.

Should you stand out in any way invites questions. Should the performance be worse than the peer group or benchmark career risk increases.

If you manage your own money you have none of these problems.

9. You decide

You make the final decision after you have done the analysis. You may be wrong but at least you make the calls either way. A lot of funds are managed where committees decide what is bought and sold.

Apart from the problems of group-think investment committees are staffed with people throughout the organisation with different investment approaches, not all of which has shown good historical results.

Furthermore it may be difficult to tell your boss that his investment idea stinks if you have your bonus evaluation later that day. This leads to suboptimal and sometimes completely dysfunctional decision making.

10. You can concentrate

If you find a really compelling idea you can choose to invest as large a part of your capital as you feel comfortable with.

With 80% of non-market risk diversified away with as few as 15 positions you can determine what your optimal number of investments are.

Mine is 30 as I feel comfortable with the weighting of each position in my portfolio and I can easily keep track of the investments.

When I see funds with 100 or more investments my first thoughts are that they must not have much conviction in any of their ideas. Also with so many positions you may as well buy the market itself through an inexpensive exchange traded fund.

11. You control the costs

Controlling costs and fees, or the friction of investing, is a very important part of part of realising superior long term results.

Using a discount broker I can buy and sell most shares for around 1% brokerage.

If I hold a position for three years that equates to 0.33% per year plus a 0.25% custody fee. That is a lot lower than funds that charge 1% to 1.5% per year on top of a 5% initial fee and other expenses.

Calculated over a period of 20 to 30 years keeping costs low makes a huge difference.

12. Down years are more bearable

This goes along with the point on making your own decisions. Should you have a bad year at least you know you made the decisions, can learn from your mistakes and make adjustments to your investment strategy.

13. You can be fully invested

Should you find a large number of attractive investments you can be fully invested and remain so even if the markets declined and you are still convinced of the investment case of each investment.

With a fund manager this is unfortunately not the case. When markets fall they are bound to get redemptions. In order meet the redemptions they must either have cash available or sell investments. But when markets are falling liquidity drops as well. That means that because investments have to be sold liquid investments are sold first.

This selling pressure puts pressure on share prices leading the markets to fall further thus triggering more redemptions. You get the picture.

Some fund managers plan for such eventualities be keeping a certain amount of liquid investments or by keeping at least a small amount of cash on hand. This as mentioned in one of the points above leads to suboptimal investments not necessarily the managers best ideas.

Luckily as a private investor you do not have this problem. I always keep a cash reserve of one years living expenses aside to ensure that I do not have any pressure to sell investments should the market decline unexpectedly. Also a large cash reserve gives me the peace of mind and opportunity to focus on investing for the long term.

There are of course a few funds where the drawbacks mentioned below do not apply but they are in the minority. The large bulk of fund management companies are focused on growing the amount of money they manage, where maximizing the returns to investors come a distant last.

Entry Credits: www.eurosharelab.com

You have read the article already. In the end, it’s your decision whether you manage you money or get a fund manager for you. As what I’ve said, I’m a NEWBIE, I need help from the experts. I invested in mutual funds which are managed by fund managers. I see my money is growing and so far, satisfied with the service. I’m happy. That’s important. Now, what’s your take? wbpitfe5qk

Will Philex Mining (PX) follow Meralco (MER) trend?

Big time stock market veterans might be on the verge of bid war in acquiring shares of ownership with Philex Mining (PX). Be expecting the two big group who are suspected to be responsible on Meralco’s (MER) sudden boom in price value for the past months will continue to do some bidding business!

To quote a post from pinoymoneytalk.com”

In just one week, the price of PX has ballooned by 36%, closing today (August 11) at P10.75.

Look at the recent 3 trading days’ price increase of PX:

* August 7: Closed at P9.00; up 13.9% from previous trading day
* August 10: Closed at P9.90; up 10.0%
* August 11: Closed at P10.75; up 8.6%

Are you interested in buying PX now? Buy at 10.50 or below. Target to sell at 12. But hold to buy at 9 just in case it goes south. Note, PX is quite into the bullish trend and our current market is not yet so BULLISH yet. So how much more if it is? Profit! This is just my view, if you take it, it’s up to you. Happy trading!

Today’s Stock Buzz- August 8, 2009

Prices dive as investors continue pocketing gains

Without any leads to spur buying, investors again pocketed profits on Friday, sending share prices down.

The benchmark Philippine Stock Exchange index slipped by 2.04% or 58.23 points to 2,782.98, while the all-shares index declined by 1.56% or 28.17 points to 1,771.12.

A total of 5.22 billion shares worth P2.84 billion were traded, with net foreign buying at P89 million. Decliners led advancers 80 to 40 while 46 stocks did not move.

“The market experienced a major correction after rallying so much in the past. But this should be seen as something healthy since this would give investors a chance to enter,” Jeng T. Calma of A&A Securities, Inc. said.

She said stocks might rally again but it is hard to say when considering now is the “ghost” month of August, when stocks normally slump. She advised investors not to do heavy buying but to instead accumulate stocks slowly.

Ms. Calma, however, said it is unlikely the market would go below 2,700 since there is a strong support at this level as shown by the market’s past behavior.

US stocks, meanwhile, closed lower on Thursday night — giving no clues to investors — ahead of the release of employment data for July.

The Dow Jones industrial average lost 0.27% or 24.71 points to 9,256.26, while the Standard & Poor’s 500 index declined by 0.56% or 5.64 points to 997.08. The Nasdaq composite index slid by 1% or 19.89 points to 1,973.16.

At home, the service sector dipped by 3.18% or 46 points to 1,400.45, while holding firms declined by 2.39% or 36.79 points to 1,497.28.

Industrial shares lost 2.37% or 102.40 points to 4,212.52, while financial shares was down by 1.87% or 11.43 points to 599.02.

Property stocks slipped by 0.13% or 1.28 points to 975.56.

Mining and oil stocks, on the other hand, climbed by 6.72% or 480.89 points to 7,630.86.

Blue chips closed mixed, with the Manila Electric Co. tumbling by 4.47% or P11 to P235 and index heavyweight Philippine Long Distance Telephone Co. dipping by 4.11% or P105 to P2,445.

The Bank of the Philippine Islands lost 2.17% or a peso to P45.

Metropolitan Bank & Trust Co. and Andrew Tan-led Megaworld Corp. did not move at P39 and P1.34 per share, respectively.

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Importance of Savings

If we want to achieve our financial goals, then we must start to save as early as possible. And that is NOW! The earlier we started our savings attitude, the more possible we can achieve our
financial goals.

We are used with this equation, INCOME – EXPENSE = SAVINGS. This is the scenario given above. As long as we received our paychecks, we spend it on a lot of ways. Whatever left from our expenses is our savings. I always believe in the concept of ‘delayed gratification’. That is, we delay our satisfaction in order to prepare for a future goal.

And this is where we need to save wisely. We need to arrange our equation. Instead of the equation written above, why not use INCOME -SAVINGS = EXPENSE. In this scenario, we pay ourselves first more than anything else. Each time we received our paychecks, we set aside a portion of it to our savings. We treat SAVINGS as an EXPENSE.

Savings is the most important of all expenses because it buys the most important thing - YOUR FUTURE.
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Playing with the Stock Market

First and foremost, what is

the stock market? A stock market is an avenue for companies and corporations to offer their shares in the public. Once a company listed their shares in the stock market, then the public is free to buy and sell those

stocks. So what’s the pros and cons of

a company in listing their

stocks publicly?

Pros:

1. To raise capital. Companies hire an advisor called underwriter to formulate the Initial Public Offering (IPO) price of the company’s stock depending on several factors. Then executives of these companies will conduct a roadshow usually out of the country to entice foreign investors to buy these shares. The IPO price is the starting price of the company’s stock in

the stock market when it first traded publicly. An oversold stock mean that it did well in its

initial public offering. It means that a lot of investors bought the stock. It can be twice or thrice oversold depending on the turn out of the IPO.

Cons:

Since the company’s stock is now open for public, it can be subject to several external factors. Investors can now play its stocks. It can now be a subject for scrutiny by investors and analysts. Also, it can be a subject for manipulation. A company that did well, meaning, it beats analysts estimates on its earnings and profits will probably go higher as investors buy these shares. In contrast, those that did not meet or has some problems in liquidity, credit, labor, compliance, etc. will be dumped by the investors that will lead to the so-called ‘equity dry up’. This led to the recent bankruptcy of Lehman Brothers.

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RICH and POOR Dads Compared

His poor dad says: “I CAN’T AFFORD IT!” while his rich dad says: “HOW CAN I AFFORD IT?”

His poor dad says: “MONEY IS THE ROOT OF ALL EVIL!” while his rich dad says: “LACK OF MONEY IS THE ROOT OF ALL EVIL!”

By viewing these two contrasting ideas, his poor dad’s brain stopped working when he said those, killing his initiative and promoting negativity while his rich dad’s brain kept on thinking on ways creating initiative and promoting optimism. Which one is best? Of course, undeniably, it’s rich dad’s ideas!

Robert Kiyosaki continued and coined the term RAT RACE. This is the race of our lifetime INCOME and SPEND. We receive our income regularly from our paychecks yet we spend the same to pay bills and satisfy our wants. We are now trapped in this rat race. We live our lives to pay our everyday bills! Now, how can we escape from this rat race trap? By understanding the Cashflow Quadrant.

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