Tag Archives: investment strategy
You might think about savings and investment in isolation. But, what you really need to focus on is the fact – what would you like your money to do for you? Once we are decided about the manner in which the money is slated to be used in future, an effective investment strategy can be formulated. This is also related to the prospective performance of your investments, as it would be a marker for your savings and your financial status.
Asset allocation plays a big role here. It will help you determine the portfolio returns and aid you to devise mechanisms through which you can improve them. It can aid you in mitigating the risks involved. If you are able to devise a effective plan to diversify your major asset classes, in the form of cash, commercial property, fixed interests and equities investment, to name a few, you would find yourself in a better position to manage your investment.
Each investment portfolio incurs a specific variant of risk. So, as you develop a precise idea of your investment requirements, building the rest of the strategy would become easier. Be it the purpose of investment, the time horizon for the investment, the amount of risks undertaken or the corresponding security you stand to attain. These are all vital factors that need to be considered to efficiently safe-guard your savings.
Apparently, the term ‘contrarian’ means doing something that is different from the usual perception. It is a deviation from the normal which is not really readily acceptable at all times. But, in the investment world, being contrarian often yields good results. The effectiveness of investment is solely dependent on the amount of return it can generate. A contrarian investor always acts in counter-point to the prevalent market trend. In contrast to the contrarian investor, you have the fundamental or the value investor. He goes for a purchase or sale depending on the price of the assets in relation to their intrinsic value.
In contrarian investing, the investment strategy is devised on the fact that there is likely to be a negative serial of the co-relation of the prices. It is more-or-less a predictable guess that once the prices have gone up, they are sure to come down. Here, a certain aspect of the investors’ psychology comes into play. The investors are usually found to move in a herd-like behavior. In contrarian investing, the focus lies on this particular aspect.
It believes in independent action and negates this attribute of mass pessimism or optimism. It is intellectual independence blended with agnosticism with regard to the consensus views. Further contrarian investing deals with broad strategies instead of just focusing upon specific investments. Timing of the actions is perhaps the other most important factor. You can have contrary reactions that are favorable to the same challenge.
Since its creation in 1974, the IRAs have enabled the individuals to save their money in the retirement account or trusts, to attain benefits for themselves or their preferred beneficiaries. The IRA accounts should be strictly governed in adherence to the Sec. 408. With the self-directed IRAs, the investor is endowed with an enhanced control over the investment decisions. They are mostly referred to as the real estate IRAs, although, one can equally focus on the operating businesses, private placements, investment partnerships and notes.
IRAs are considered to be great investment opportunities in the investment finance sector, if the investor is well-acquainted with the volatility of the stock market movements. It is a profitable investment strategy if one follows the regulations mentioned in the Sec. 4975; he will then be able to effectively steer away from the tax penalties. The most appealing part of the self-directed IRA is that you can efficiently diversify your investment. Say, if you concentrate on the Roth IRA, the growth of your assets would be free from taxation and you would also stand to receive potentially higher returns. There is an important point to note in this regard. Since a custodian cannot offer any advice concerning investments, the investor needs to be careful about the transaction requirements. But the savings generated from it at the fair end of one’s life is surely satisfying as the energy and effort devoted to it is none-the-less huge.
Whether you are planning to purchase a house or devise a retirement plan, an expert advice goes a long way in ensuring that you are able to attain your objectives, that too with financial security. There are various aspects to be taken care of in this regard: taxes, legal facets, retirement factors, investment details, insurance and estate. All these elements may not be directly included in your plan but they need to be taken care of with due importance. A specialized financial planner can effectively evaluate your circumstances and simplify the choices before you. If you are looking for money saving tips, through tax savings, energy savings and account interest savings, you need an investment advisor and a proper investment strategy in place.
The financial planner will help you understand the responsibilities associated with the services available and their limitations. After you decide on the terms, he collects the necessary information to analyze your situation. It is now time to devise a personal financial plan and suggest investment strategies that will aid you attain your goals. In accordance with the elements selected by you, you financial planner applies the strategies and coordinates them with the other professionals. He is basically required to effectively monitor all you investment actions and work to align them with you objectives and in the process help you to build an effective investment portfolio.