How to force bankers to read your investment banking resume

There are 2 main ways to side step the normal recruiting process to guarantee your investment banking resume gets read.

Experience

This first exception is thanks to the class system in the banking candidate world; experienced v virgin.  It's two tiered with the experienced at the top and the virgins at the bottom.

Any Investment banking internship success">investment banking internship counts as experience – from bulge bracket to 10-man boutique investment bank.

By ‘investment banking' we mean summers spent in M&A or capital markets etc.  S&T and research will suffice, but expect to show up at the bottom of the ‘experienced pile'. 

Meanwhile back office internships barely count.

Other high quality finance experiences count too, eg hedge fund internship.  Whilst 5-star names like McKinsey, Microsoft, Newscorp (provided you weren't phone tapping it up!) work too – i.e. management consulting and F500 corporate.

If you possess this experience you are "pre approved".

That means your resume (especially those of you with an investment banking intern resume) will get preferential treatment – think top of the pile and 20 extra seconds of consideration. 

Or perhaps – ironically – less attention since you're such an obvious candidate!

Contacts

The second exception is thanks to nepotism, ass-kissing and cold hard cash.

Aka the Resume Pass, this involves emailing your resume to an interested banker outside of the normal recruiting process.

You could be asked for it at a networking event by a Credit Suisse Associate (eg me) or your Daddy who's on one of MD Larry Larryson's boards could slip it into Larry's bag at the next meeting of Giganticfuknconglomerate Inc (eg my friend).

The power of a resume pass is that the banker who asked for it will take significant time to review it.  I mean, they will actually take 40 seconds to read it from top to bottom. 

And if the banker likes it, they will pass it on to the bankers in charge of recruiting along with a note "like this kid".  Can you spell ‘guaranteed interview' you nepotistic rich kid?!

I need to pause us for a second here to talk about networking & resumes. 

Your chance of getting an interview from a ‘warm' resume submission like this is literally 1000% greater than submitting it into the cold, unforgiving vacuum that is official recruiting.  So please make sure you master networking in banking – a topic we'll talk extensively about in a later tutorial.

Author: Inside Investment Banking

Horse Racing Tips - Be a Great Punter

Every person is choosing where to invest their money. Some invest them to have long-term satisfaction and some would find happiness in easy money.

Every person is choosing where to invest their money. Some invest them to have long-term satisfaction and some would find happiness in easy money. No matter what you choose, your instincts and power of judgment is involved, and that allows us to decide whether or not to choose a specific path for greatness. This also happens when you are fond of betting in horse races. You rely on your instincts and your judgment, yet it is still not enough to get the best results that you are looking for. Races have unpredictable outcomes, which means you need help from other sources and sometimes personal judgment is not enough to win it. Horse racing tips are just around waiting for you to uncover them; you just have to know where to look in order to use them.

If you are new to this line of work, then you seriously need a heads up. You will have a larger risk of losing your first bets, but don�t worry because there are a lot of reliable sources when it comes to races. It is also advisable to bet in smaller amounts especially when you are just still observing. You also need peers to give you a walkthrough all throughout the process of the race that way, you can ask for questions every time you do not understand something. It is also best to have someone come with you to the race that knows how the whole system works.

Betting on a winning horse is very tricky, especially when there are many horses to choose from. What you need to do before betting is to find reference that could help you decide which horse has a better chance of winning. You can put to good use past racing results and statistics; it will somehow give you an idea in which horse to bet on.

Other than human interaction, there are also other sources of racing information which you can put to good use. With the help of the internet, many people are able to be connected all around the world. You can conduct research for tips. There are plenty of websites that cater to punters alone. You can also visit forums and interact with other punters and learn from them. Although you cannot make sure that everything is valid, but it is a good start.

Learning horse tips are just one way of making a better decision when you bet in a race. There are still a lot of factors to consider though. There is no surefire way to win when it comes to these types of games because most of the time, results are unpredictable. Learn from your mistakes.

Author: Ramon Allen

Reasons Why We Should Invest and Save Our Own Money

Money is the one thing that we all need and want. There is nothing in the world you can do without money. Not only do we need to make enough money to live by. We have to find ways to learn how to invest on our own. Money is the only thing that doesn't come with instructions. When you buy a car it has a manual to help you with the up keep. When you buy cloths there are instructions on how to take care of them. Why it is that money is the one thing we are left to figure out on our own? In most cases people make mistakes that are hard to overcome. One can make all sorts of excuses but the fact remains that the information that is needed to learn how to invest your own money is out there. If you don't look for it, it is not going to decide that it needs to come to you.

Take for instance a bank financial adviser or stock broker. Now if we do get our hands on some money the first thing we are taught is go to the bank and give it to them to secure our future. Let's take a closer look at what a bank actually does with the money. The bank takes your money and invests it into the global economy where they get a higher return. After the bank gets the higher return, they pay us whatever interest rate that they want to pay us, which is always very low. Is this fair to us and our families? Do they have a legal right to do this? No, it is not fair to us and yes they have every right to ensure their success through taking our money and making a huge return because we give it to them. This all holds true with stock brokers as well. It is not in their best intent to make us the most money even though they make it seem that way. Brokers get high commission to invest your money into the market but if you take a loss, they too still will have made enough money on your money.

Now don't get me wrong, I am not saying that you should not use these institutions to have some of your money set aside for the future. I am simply saying that why shouldn't we learn how to invest our own money to get a higher return like they do. We can take full advantage of what our money is making by learning how to invest.

You don't have to have a lot of money to invest. You just have to have a plan and stick to it on a consistent basis. You can invest as little as 25 to 50 dollars a month with some online bankers and if you are consistent in as little as 5 years you can see money that you can move to a mutual fund that average about 12% interest over a period of time, or simply learn how to options trade.

This is another way to invest your money into the stock market while being able to buy or sell. Options trading give you more leverage than just about any other form of trading. Trading options with the right system, you can become a pro in as little as a few weeks. Options trading is a system that you implement and follow. The best thing about options trading is that you don't have to be in front of a computer everyday to be effective ounce you have learned the system.

Author: Garrick Breaux

Advantages and Disadvantages of Investing in Bonds

Planning to invest in bonds? The following article, which brings forth the advantages and disadvantages of investing in bonds, will help you in making up your mind. Read on... If you have extra money at your disposal for investment, you should make sure that you do not put all your eggs in the same basket i.e. invest in only one type of investment instrument. In the uncertain economic circumstances that are prevailing today, making diversified investments is the need of the hour, so that, even if you experience losses in one investment, the gains in other ones can make up for it.

Stocks, gold, real estate, mutual funds, fixed deposits in banks, and bonds, these are some of the most popular forms of investment today. Some of these investments can be highly risky, such as stocks, while bonds, on the other hand, promise safety and a fixed, regular income. Though, let me tell you that none of these investments are without their own fair share of pros and cons. Now, let us see what are bonds.

What are Bonds?

Bonds can be defined as debts, which a company or the government undertakes, by borrowing money from the public, when it is in need of funds. There are different types of bonds issued to the public today, such as U.S. Government bonds, municipal bonds, corporate bonds, and mortgage-backed bonds, to name a few. The funds that are raised through corporate bonds might be needed to invest in further growth of the company or to invest in new ventures. When the government issues bonds and raises money, it is usually used to finance various public works such as building roads, maintaining street lighting, keeping up the government buildings and parks, etc. In exchange for these borrowings, the company/government pays the investors a fixed rate of interest, which is paid at a stipulated time, for a fixed period. This makes bonds a reliable source of investment. You may further go through how do bonds work. Next, we move on to know, the advantages and disadvantages.

Advantages
The biggest advantage of investing in bonds is that there are very less chances that you will lose out on your investment. So, people who do not believe in taking undue risks with their money, should invest in bonds. People who are nearing retirement and thus, cannot afford to risk their hard-earned money, will find dependable bond investments very suitable.

When compared to other safer forms of investments, such as saving accounts in banks, bonds pay a much higher rate of interest. So, instead of keeping money in a bank, people can invest in bonds and earn a good interest rate. Secondly, with bonds, there is no anticipation and anxiety over when the principal amount will be paid or when the interest will be received as everything is pre-decided and the investor is aware of the maturity date and the time when interest is due on his investment. Thus, bonds do not need constant monitoring like some other investment instruments. Lastly, certain bonds, such as municipal bonds, can sometimes be exempt from income tax. This adds on to the profits earned through them.

Disadvantages
The foremost disadvantage of bonds is that when compared to shares, gold and real estate, the rate of interest that they generate is very less. That's why, people who want to double/triple their money with some good investments, do not put their money in bonds.

Another disadvantage of bonds is that there is always a risk of the company which has issued the bonds, going bankrupt. Considering the effect that the economic recession has had on various businesses in recent years, this is one possibility that cannot be completely ruled out. So, in case this happens, the bonds will not yield any interest, plus the investor will lose out on the principal amount too. Then there is one issue related to long term bonds. The duration of the long term bonds can be anywhere more than twelve years. If an investor's money is tied up in some low yielding long term bonds and suddenly the interest rates of banks or other bonds go up, there is nothing much the investor can do about the situation. In such a case, an investor will end up making much lesser money as he could have, if he had invested in other instruments.

Author: Aastha Dogra

Best Investment Options for 2012

There are countless modes or options which can be deemed to be the best investment options for 2012. Here is a quick overview of some of the popular options along with their pros and cons. No single option can instantly make an individual a millionaire or a billionaire. This is the simple, yet harsh truth, that all of us need to accept. However, certain avenues of investment provide us with a genuine amount of security, a little extra cash and in some cases, genuine peace of mind. Our financial interests are secured by these investments.

Investing Concept and Terminology

Before you dig deep into the issue of finding the best possible investment destinations, you will need to be familiar with some key terms, that are often used in the industry of financial investment. In case of investments, Return on Investment (ROI) is one of the most important indicators, as to which investment vehicle is really good and which is not. The return on investment is calculated by subtracting the already invested amount, from the total returned amount. The product is then turned into a percentage, sometimes the element of time is also multiplied into the said percentage. Next off, you need to consider two parallel factors namely, for how much time is it necessary to undertake the installment payment, and secondly, also check the schedule for the installment payment. Thirdly, check the safety of the investment channel. Check the assured returns and lastly, check the amount that is going to be affected by potential portfolio performance and the performance of the economy. As a rule of thumb, note that you should get back your total investment. Plus, you should get a return rate of at least 5-7%. Of course, returns that are over 7% are also great and welcome. Also note that there is a certain limitation over what rate of return you would get, hence do not expect a rate of 300% or anything like that, a rate over 10-15% is good enough. Some investments that are performing well may also pay 20% or more but this is not very common. Lastly, invest money, keeping your short term and long term liquidity requirements in mind.

Best Investment Options for 2012

The following is an explanatory list of some of the popular and safe investments, which have decent yield.

1. Shares and Stock
The stock market is one of the greatest place to store away all your free cash. There are two things that you need to do, if you want to make a substantial profit through the stock market. You need to purchase good promising stocks at a low market value and sell them, at a substantially higher price, to ensure that you get a good profit. Now when it comes to stock markets, there is a possibility of losing everything that you have invested, hence updating yourself about the stock markets on a daily basis helps a lot. Now any economy, along with all its stock and money markets goes through 4 primary phases, namely, a fall (also known as a bearish market), a rock bottom, a rise (known as a bullish market), and finally an apex. In such instances during the fall and the rock bottom, since the prices of stocks are dropping and are at an all time low, it is good to purchase securities at such a point. When things go into upward motion towards the apex, it is time to start selling. The best-selling point is of course the apex. Apart from common shares, there are a lot of other securities in the stock market such as bonds, debentures, asset backed securities and options, into which you can invest. In 2012, volatility is going to be the order of the day, in markets all over the world. Therefore, stock investment is going to be even more risky. Ergo, utmost discretion is advised, when investing in any kind of market based security, including stocks and bonds. Research thoroughly, before making any kind of investment.

2. Funds and Accounts
Professionally managed funds and accounts are also an alternate option to shares and common stock. The advantage of any professionally managed fund is that the risk of losing money is eliminated to a great extent and a rate of return of about 5-7% is also ensured. Depending upon the portfolio and the general performance of the economy and markets (stock and money markets), the returns of the funds and accounts vary. Mutual funds and annuities, which are the most prominent funds have a guaranteed benefits/returns clause, that is, as per the clause you will get a return of about 5-7% or in some cases even more, along with the initial amount that you have invested. In addition to that, you will also have bonus benefits and returns.

If the portfolio in which you have invested works out wonders, then the managing company shares some of the extra profits with you. The best thing about such funds and accounts is that the funds are invested in highly versatile channels and destinations, which include money markets, stock markets, offshore high yield accounts and funds, direct investments into some specified high performing companies, preferential and non-preferential stocks, basically anything and everything that provides excellent returns. Such funds and accounts include, Mutual Funds, Collective Investment Schemes (CIS), Systemic Investment Plans (SIP), Cash Back Investment Plans (CBIP), Unit Linked Investment Plans (ULIP) and annuities. However, remember that most mutual funds invest in stock markets all around the world and therefore, they too are going to be subject to much volatility in 2012. Thoroughly research the current and past performance of the fund and analyze the quality of its portfolio before going ahead.

3. Governmental Sources
Now the safest of all options are the governmental sources. Government investments include bonds and certificates of federal Government, state governments, treasury bonds and bills. These instruments tend to have a return on investment and a small period of expiry. Individual Retirement Accounts (IRA) and 401(k) are some other options which are operated by the government. The merit of these accounts and schemes is that they tend to have an excellent rate of return of about 5-10%, not to mention the security and safety that it offers. In 2012, these government backed investment channels are the safest harbors for your money.

4. Life Insurance
Some types of insurance policies such as health and auto insurance may be viewed to be an expenditure, however life insurance is something that ensures complete financial security for you and your family. Conventionally, a life insurance policy works in a manner similar to investment funds and accounts. The insurance policy does provide a return after every few years and also has a death benefit clause. So basically, it's a good investment not just for you but also for your family.

Author: Scholasticus K

Are You Crazy Enough To Learn How To Invest Real Estate?

The very fact that you are reading this article indicates that you may be crazy enough to be thinking how to invest real estate, even in this upside down market. Why is it that some people can succeed, even prosper, in this down real estate market while so many others are struggling? Even more importantly, are you one of the ones that can prosper? Most important of all, you have to figure out how much. Sound crazy? Maybe a little bit, but that may be what it takes to learn how to invest in real estate and succeed in this crazy market.

So, what are the fundamental drivers at work that still make real estate an attractive investment? Believe it or not, the two fundamental drivers are supply and demand. I don�t mean the current glut of homes on the market-that is a temporary phenomenon. A fundamental demand driver is population growth. The world�s population is growing, not shrinking. That is a fundamental fact. This is one reason why people are looking to find out how to invest real estate.

The second fundamental is supply. We can make more cars when that market picks up. We can make more clothes and computers. We cannot, however, make more earth; there is a finite, limited supply of it. The fundamental supply and demand equation now becomes, ever increasing demand with a finite supply. So until we figure out a way to colonize the moon, real estate is, over time, only going to grow in value. Maybe this real estate investment idea isn�t all that crazy after all?

So now you have a reason for why to invest in real estate. This does not yet answer how to invest in real estate, but it gives you a reason to learn more. After all, we are living in the moment, and the spot market for real estate is not that great. At least, it is not that great if you are a seller. Sellers are not seeing the prices that they think their properties are worth. It is clearly a buyer�s market.

This buyer�s market is how to invest real estate. It costs sellers money for every extra month that they have to make a payment. Most sellers are accepting offers that would have been laughed out the door as little as six months ago. Herein lays the secret: Buy Low, Sell High. You say you have heard that before? It is sound advice regardless of the market you trade in. When you think how to invest real estate, think �Buy Low�.

Economists are predicting an economic turnaround later this year. Governments are doing everything they can to make that turnaround happen faster. While real estate prices may not immediately rebound to the levels they were at two years ago, they are going to go back up. The law of Supply and Demand guarantees it. Prices are also at record lows now, so this market presents a very rare opportunity to fulfill the Buy Low part of the strategy. Clearly, a big part of how to invest real estate is timing.

Obviously there is still risk. Is it the right risk for you? Are you crazy enough learn more about how to invest in real estate, and make your fortune investing in this real estate market?

Author: Otto Ruebsamen

Security Systems: Top 5 Reasons to Invest in Them

Security systems and alarm systems, especially the latest ones that are usually wireless and have a lot of paraphernalia attached, are the order of the day. This includes cctv equipment, cctv security cameras and access control mechanisms, all of which add up to provide a state-of-the-art security network for the household or office space in question.

However, most of these security systems come at fairly high price-ranges, especially wireless setups. Installing such complex security alarms is also not a cakewalk, and employing professionals who have been trained in the art of mounting cctv security cameras and alarm systems can also be taxing on the budget.

So why should you consider installing such security systems in the first place? Here are 5 concrete reasons to invest in them, especially if you value a secure home or workplace:

� Staying secure � If you were planning to go out on a vacation or have bought a home in a deserted area, electronic security systems can come in real handy. From restricting access to inner areas of your property to allowing you to monitor the whole area from your access control room, electronic alarm systems have come of age.

� Round-the-clock security support � Unlike physical security guards or manually monitored cctv security cameras, state-of-the-art security systems are usually automated. This helps you keep track of unwarranted movement, intrusions or property damage 24x7, without having to sit down and manually control everything.

� Flexible monitoring � Wireless cctv equipment has been a great boon for households and larger corporate workspaces, especially those which have multitudes of cctv security systems and alarm systems installed throughout the monitored area. With access control being concentrated from a single point, monitoring has become flexible and easy � such that a single individual can survey a huge corporate area without having to move around from room to room doing physical checks!

� Emergency assistance � This might be a seemingly distant advantage of having a wireless security alarm or cctv equipment installed in your premises, but it is of great value when medical calamities strike. For instance, you may avail immediate medical support by pressing the �emergency� button on the security systems, instead of having to call up your friends, family or colleagues and explain the whole situation to them � saving invaluable time in the process!

� Better investment of time and energy � Sure the installation of security systems and cctv equipment can be a heavy deal as the initial investment, but you will reap rewards you had not accounted for in the long run. From saving precious time and money to avoiding costly yet often ineffective investments in physical security guards, there are advantages galore. Add to this your peace of mind once you have had the security alarms installed by experts, and you have a real winner of a deal at hand!

However, to actually avail the afore-mentioned benefits, hiring the right professionals for the job should be your foremost concern and not the price. Selecting the best company that has an enviable track record in installing alarm systems and effective access control units should be chosen, albeit after thorough research and market reviews.

Author: Andrew Decosta

'How to Invest in Your Online Marketing Today'

Most Web business owners have limited ... ... so itonly makes sense to invest in ... that really works. Todaythe top two ways people find what they want online are ... ind

Most Web business owners have limited marketing resources, so it
only makes sense to invest in marketing that really works. Today
the top two ways people find what they want online are through
search indexes, and through links.

Which means, search engine optimization (SEO) and targeted link
building are the top marketing tactics today that are worth your
investment. You can certainly choose one or the other, but
here's why we recommend you do both:

SEO services are all about getting you the best possible search
engine positioning. Although search engines are used by close to
80% of the population online today to find resources, currently
they index less than 40% of the Internet overall. Which means
that more than 60% of all Internet resources cannot be found
through the search engines at all.

This raises the question: 'If people can't find the resources
they want through search engines and directories, how DO they
find them and where do they look?'

The answer is, 'through links'. After search indexes, this is
the 2nd most popular way to find anything online, and opens the
door to a much higher percentage of the Internet's resources
than search indexes can offer.

Targeted link building finds the sites where your market
gathers, then works to establish a direct link from those sites
to yours. In this way it brings you one step closer to reaching
your target markets - the people frequenting sites in your
market niche.

And because targeted links enhance your listings with the top 19
search engines and directories today, you'll become a more
visible and a recognized player in your niche market. SEO and
link building combine in a symbiotic relationship, and it works
to your advantage.

Can you see why you need to invest in both site optimization and
link building? Targeted link building reaches out to the online
community to find your target audience and build your network,
while an SEO campaign enhances and effectively submits your Web
site assets.

Author: Scott T. Smith

Why You Should Invest in a 401K Plan

The excuses have all been heard before when trying to put off your savings for retirement. When is truly the �right time� for you to do so? Honestly, the �right time� to invest was probably years ago. But there is still hope. If you were to take a collapsible ruler from 1 inch to 60 inches, near the age of retirement, you can pin down when you should invest. At the age of 18, you probably have just gotten your first full time job where they offer you a 401K plan. But you are only 18, and you may not make a lot of money, and you probably want to spend it on personal items. You really don�t have too many expenses compared to an adult, but you want to take advantage of that. So you can fold up the first section of your ruler.

Now you are 20 to 21 years old, and you have met someone nice in your life. You plan to propose and you will need any bit of extra money you can get to pay for the wedding expenses and to afford the new life the two of you will share. You put off investing once again. After the wedding, ahead a few years, you are now around the age of 25, but you are ready to take it to the next step and have a baby. With all the baby expenses, you cannot really invest in retirement right now, either. You can fold up the second section of your ruler.

Around the age of 36, you begin thinking about your child�s future, what colleges you can afford to send them to, any extracurricular sports or expenses they may have. You need to save for things like this, without a doubt. You may say, �I�ll invest when my child goes off to college and starts living on his or her own.� So you have to fold up the third section of your ruler. Now you only have 2 sections of your ruler left, compared to the 5 sections you had in the beginning, but you just haven�t had the �time.�

Near the age of 48, you only have one section left in your ruler, and your children are finally out on their own. You can invest now, but you haven�t had the time to really �live� or �splurge.� You may put off investing for a few more years so you don�t strain your finances, but you only have from 6 to 12 more years left to invest in your plan. When you do sit down and make that decision, the most you can invest at this time will only leave with from $12,000 to $24,000 in your 401K plan. If an18 year old had got the 401k investment advice and started to invest, he would have about $84,000, investing the same amount or even less than you during each pay period. This is quite a significant difference, and the 18 year old will already be 100% vested, meaning they can walk away from their job with every bit of money that their company matched them at, while you will still need to continue investing for years before this happens. While incomes decline and rates of inflation rise, any extra bit of money during your retirement is needed to supplement the monthly income you are no longer receiving from a full time job.

401K investments come out of your paycheck tax free, and often do not even make a noticeable difference in your income. Because less of your paycheck is being taxed, the amount you invested in your retirement plan will often be larger than the amount that you are missing from your paycheck. While it is easy to argue that you need every bit of money you can spare to pay for your expenses or change of life events, the truth is that you can actually afford more than you think.

Author: Lance Peters

How to Create a Good Investment Portfolio

Looking forward to investing wisely for the future? Here are some useful tips on how to create a good investment portfolio that will see you through the ups and downs in the economy. Investing for the future is not only essential but also is something that you should start early. When we think of investing, what comes to our mind is the stock market. However, you'd be surprised to know that there are several other areas of investment and it is up to you to decide the ones that are best for you. So, which is the best way to invest, you may ask. Well, the truth is that there are several factors that you need to consider before you arrive upon a decision as to where you should invest your hard-earned money. A common trick is to have a diversified investment portfolio by investing in a variety of investment vehicles. This reduces the level of risk to a great extent. So, what to go for and what to avoid while creating your investment portfolio? Just go through this article to find out for yourself!

How to Build the Right Investment Portfolio

Set a Goal for Investment
The first step towards creating a good investment portfolio is to set a goal for yourself. What do you want to invest for? How much money would you need and after how long? Once you have found answers to these questions, chalk out your investment plans accordingly. Remember that how you invest shall depend a lot on what you're investing for. For example, if you are investing for a new home, you would naturally want the returns soon. On the other hand, if you are planning to invest for a comfortable life post retirement, then you'd definitely want something that helps your money grow considerably over a prolonged time (provided you start investing early in your career). Also, the amount of money that you would need is something that you should calculate beforehand. This would play a key role in helping you choose what you would invest in.

Invest for Emergency
So, you have set your long-term and short-term goals and are prepared to chalk out an investment plan. But wait! What about emergency situations that may arise? Would you be financially ready to face them? For this, you need to invest some amount of money in cash equivalent investments such as investing in gold and precious metals, liquid funds, savings accounts and treasury bills. In addition to this, you need to invest in insurance plans to protect yourself and your family in the face of an emergency.

Calculate the Risk Involved
Let's consider that you have zeroed in on an investment vehicle that is likely to fetch you high returns. But are you willing to take the risk that comes with it? It's human nature to aim for the highest possible returns on the money invested. But remember that high returns are accompanied by higher risks. In fact, higher the risk you are willing to take, higher the returns you get! So, is it a wise decision to put your money at stake just for the sake of higher returns? Definitely not! You should decide what level of risk you can handle and you should do this after taking into account factors such as your age and experience. Remember that putting your money in the stock market involves risks such as market risk (the entire stock market experiences a decline), industry risk (stocks of a particular industry, such as the steel industry, experiences a decline), and individual stock risk (decline in prices of stocks of a particular firm or organization).

Create a Diverse Portfolio
Creating a diverse portfolio means that you should invest in a variety of investment vehicles. This way, you invest your money in both low-risk as well as high-risk vehicles, and your risk gets balanced out. You can invest in bonds, stocks, mutual funds, cash equivalents and even property. A good way to balance your investment portfolio is to invest in stocks, bonds and mutual funds.

Stocks: Stocks are nothing but shares in the ownership of a firm. When you buy stocks of a company, you should know that the value of the stocks is directly proportional to the profits earned by the company. In other words, the more profit a company earns, the higher the value of its stocks. Stockholders earn a percentage of the company's profits, depending on the value of the stock purchased by them. The higher the profits made by the company, the higher the returns you earn from stocks. However, in case the company suffers losses, you don't stand to gain any returns. Not only this, the price of the stocks of the particular company also falls, due to which it becomes difficult for you to recover your initial investment by selling the stocks you hold. So, you see that stocks are quite risky and hence it is not recommended that you invest your entire investing amount in purchasing stocks.

Even though it is difficult to predict the future growth of a company, the P/E ratio can help you to some extent in this regard. Before investing in stocks of a company, you can determine whether there is any probability of the stock prices going higher due to substantial growth of the company or huge profits. The P/E ratio or price-to-earnings ratio is the ratio of the price paid for each share to the amount earned per share by the company. Let's consider an example: say a company earns $3 per share while each share sells in the market for $30, then the P/E ratio is 10 (30/3=10). The higher the P/E ratio of a particular company, higher the demand for its shares in the market.

There are two basic types of stocks: blue chip stocks and small cap stocks. "Blue chip" stocks refer to the stocks of big and established companies that have had a consistent record of earning profits and paying dividends to their stockholders on time. "Small cap" or small capitalization stocks refer to stocks of newly established or less established companies. The interesting thing about "small cap" stocks is that they have the potential to give big returns if the company witnesses immense growth. However, there is also a greater chance of depreciation in the value of "small cap" stocks, and this can happen when the company fails to witness growth as anticipated.

Bonds: Bonds are different from stocks because they offer a fixed income for a certain interval of time and a bondholder does not have a share in the ownership of the company. Bonds are issued for the purpose of collecting capital from investors who are ready to invest in a new venture. A bond signifies that the company has borrowed a certain sum of money (the price paid for the bond) from the person who purchased the bond. It is a promissory note which states that the company is liable to return the principal amount paid for the bond, along with a fixed return. This "fixed return" is nothing but the interest on the principal amount paid for the bond, and is determined by the rate of interest mentioned on the bond. This rate of interest is termed as the coupon rate. The advantage of bonds is that you earn a fixed amount, irrespective of the revenue earned by the company. Every bond has a predetermined time period (known as the time to maturity of the bond) after which the bondholder gets back the principal amount from the company. Depending on the market condition, an investor should decide whether he should invest more of his money in bonds or in stocks.

Mutual Funds: A mutual fund is a low-risk, fixed-income investment. A professional creates a portfolio consisting of stocks and bonds, and units of this portfolio are then sold to individual investors. To invest in a mutual fund, all you need to do is just purchase a small part of it. The advantage of investing in mutual funds is that the risk involved is negligible, and you have a range of mutual funds to choose from. Moreover, mutual funds are relatively hassle-free as they do not require you to keep a tab on the market trends. This is because the professional manager who assembles the mutual fund, takes care of this.

Practice Asset Allocation
Now that you know about the benefits of diversifying your profile, it is also important to allocate the correct amount of money under each area of investment. This is known as asset allocation. The general rule is to invest more in low-risk vehicles and less in investments that come with a high level of risk. If you are investing in both, bonds and stocks, the ratio between the two should ideally be 80-20. What you should aim for, while creating your investment portfolio, is that it should protect you from changes in the economy. In other words, even if the market witnesses decline, there should not be a drastic change in your returns. A good idea would be to get a financial checkup done to chalk out a design for your investment portfolio, taking into consideration your goals and willingness to take risks. Your bank will help you in this regard.

Invest Wisely
No matter where you invest your money, it pays to invest wisely. Be logical at every step, and think twice before you invest, to save yourself from losing your money. Hurrying with investment decisions is not advisable, as experts say that you should research well before you decide to invest. If you're investing in the stock market, you should observe and study the market trends carefully to know where exactly you should invest and how much. Certain investment vehicles promise to fetch you very good returns in a short period of time, but they are risky. Even though you can set aside a small amount to invest in high-risk investment vehicles, it is best advised that you refrain from taking huge risks when it comes to your investment. It is for a simple reason: one bad decision, and you end up losing a lot! Just look at it this way: you may gain many times the amount you invest in high-risk investment vehicles, but there are good chances that you may have to part with the entire sum of money! On the other hand, if you invest in simple investments that involve little or no risk, you are sure to get a considerable amount at the time of your retirement, or whenever you want to.

Tips for Creating an Investment Portfolio

Author: Mukulika Mukherjee

Investment Property: An Ideal Investment

What makes investing in property really a good investment option? When there are other investment avenues open, why is it that investment propertynever fades out? Even while the other avenues are offering better rates of return, people still go in for investing in the real estate. The reasons are abound, from the purely financial consideration based on profitability to the more emotional and psychological reasons. Let us explore some of the reasons which make investment property hot.

Absolute returns matter: Investing a big sum in the real estate sector over a period of time can actually make you earn big after some period of time. While some other options may be offering you better returns, there might be requirement of lower sums which might in fact make you diversify more rather than putting all money in one option to get maximum returns. In property, you have to invest big.

A thing which you can own and use: Commodities or metals, most of the times, can not be used. These can only be used by selling these off or mortgaging them to convert these to money which is then used for doing anything else. Property can be used as such either for living or for work anytime that you like.

A more secure investment: Can a thief take away your property? He can of course take away the investments done on papers and deprive you of possessions but this is not possible to be done with property unless there is intentional white collar crime done against you with malicious means.

Earn income in more than one way: With investment property, you can take the rental income by leasing out your unit or you can even sell off the same during the peak rate season to get the maximum profit.
Rental income can be substantial in some areas. You can retain the title to the property even while earning income from it.

While it is true that there are some distinctive advantages of it, there are some peculiarities of this investment as well. You need big sum to invest which might not be possible for everyone. This investment needs to be locked in for years if it is some under-construction project. Also, the market demand may not be all that good for selling the property or renting it at the desired rates. You might have to wait for the opportune time in future or compromise with the rates that you are seeking.

Small Investment Ideas

When it comes to investing, the commonly held belief is that investments require huge chunks of money. The fact is that there are several small investment ideas that beginners in the investment world can use to create wealth and a better financial future. Don't be disheartened if you are unable to invest in the booming real estate market near the classy sea facing residential area of California. Many of us don't have the capital to do so. But this must not deter you from working on your investment strategies. Investment doesn't mean you must have millions of dollars aside in your bank account. In fact, investments begin on a small scale. You save pennies that eventually, in the long term, give you back millions. Investments are also not an overnight effort. It takes time, brainstorming, discipline and patience from your side to create wealth. Beginners in the investment world, who wish to save certain fractions of their hard-earned money should focus on small investment ideas to secure their financial future.

Small Investment Ideas 2011: An Overview
What are some of the best small scale investment ideas in the financial year 2011. While investment banks and billion dollar investing firms are bullish about the iconic Apple, Pepsi, or Microsoft, where should you focus your attention, in the investment and business world? Keep in mind that you are a small investor and so you have to exercise your fair sense of judgment and common sense before diversifying your money in different sorts of investment schemes. Fresh college graduates and start up entrepreneurs belong to the category of 'beginner investors', who would like to save some money and build their wealth. Mentioned below are several investment ideas for small investors.

Where to Begin
The group of people who belong to the small investors group are generally individuals with fixed salaries or retail investors. Small investors can begin by investing in stock markets. It is said that making money through stock markets is an easy task, if you are aware of stock investing basics. It is also a fact that stock markets will return you the money way higher than your investments. Though losses can be incurred due to a harsh economy, small investors can keep their investment amount limited and observe the market for some period to change their investment strategies. Mutual funds are amongst the low risk and high benefit options for individuals with small sum of investments. Mutual funds are managed by experts and investors who don't have time to monitor the stock market, can easily benefit from it. They just have to invest some fixed amount of money and the rest is taken care by the mutual fund managers of the company. One of the best options for starters or fresh college graduates is to invest in government securities and bonds. Many starters don't pay significant attention to the value of investing in their IRA plans. IRA investment schemes are amazingly beneficial in the end years of retirement and investing some amount in it, is a habit that must be formed at early stages of the career.

Author: Kundan Pandey

Learning To Invest In Foreclosures

There is lots of talk these days about foreclosures. Investing in foreclosures can be a big money maker when it comes to real estate investing niches. While investing in foreclosures results in large profits when you choose the right house, ther are pitfalls that you must look out for before you buy a foreclosure. there are a lot of other factors to consider.

A foreclosure occurs when the owner defaults on the mortgage. The bank has to start the process of taking the property that was pledged as security for the homeowner's loan. If the homeowner can't remedy the situation by paying the bank any money that is then owed, the property will likely make its way to public auction where it will be sold to the highest bidder at a sheriff's or trustee's sale. In my state of California, they use a trustee sale.

When you are investing in a foreclosure, the first step is to determine what you are doing with the property. Do you plan on flipping it for a profit? Are you going to keep it as a rental? This will determine what area you should look in when searching what type of foreclosure properties you're interested in pursuing.

The main factor to consider when you invest in a foreclosure is to know the law in that jurisdiction. There are laws that vary from state to state and county to county that govern foreclosures and if you violate those laws, accidentally or purposefully, serious consequences will follow.

A lot of the home study courses and infomercial gurus advise buying a foreclosure and then renting the property back to the homeowner with the hope that they'll repurchase it at a higher price in the near future. Do not do this! One of the highest risks a real estate investor can take is letting the previous owner come back and reclaim their property because they misunderstood what you had agreed upon. In most states, you, the real estate investor, is the "bad" guy - you lose!

Besides, would you really want a tenant in your property that has a history of not paying their bills? Of course not! You should always run a credit report on the potential tenant no matter what their excuse is today. However, many beginner real estate investors as well as many experienced foreclosure investors do that very same thing each day and pay a high price for doing so, oftentimes losing their investment completely when a judge declares that the transaction was indeed a usurious loan instead of an option to repurchase.

During various stages of foreclosure, you can make a deal happen between you and the homeowner in default, wait and purchase at the auction, buy after the auction or many other more sophisticated strategies. If you intend to buy a property at the public auction, know that in some states, the law sets a certain time frame for foreclosures to become finalized commonly referred to as a redemption period.

If you're considering investing in foreclosures, it is highly advisable for you to find out if and how this law potentially affects the ownership and possession of the property in your local area. You may think you own the property, when in fact you are a temporary caretaker for a set period of time. Once again, know rhe law!

If there is a redemption period, the homeowner could be working out a deal with another investor or attempting to sell the property in some other manner without you even being aware what is happening. This can obviously have a big impact on what you do to the property during the redemption period, even if the property is vacant at the time of the auction.

You could find yourself investing in foreclosures, putting money into them, only to lose all of the profit you thought you had coming to you. You are buying real estate foreclosures to make a profit. Act like it and treat it has a business!

Many real estate investors look at investing in foreclosures as a sure bet to increase their wealth and or portfolio but fail to realize the potential pitfalls that await them. Knowing what to do as well as what not to do will save you a ton of money and headaches as you progress into the arena of investing in foreclosures.

When you finally decide to buy real estate foreclosures, the bottom line is always to make a profit. A good rule of thumb to follow is only consider buying a foreclosure if you stand to make at least a 30% profit no matter what happens. That way, you'll never have to worry whether or not you should make a deal or not.

Once you learn your local market for investing in foreclosures, you will find yourself keeping an eye on which properties are headed to foreclosure and how to potentially make potentially high profit deals happen on a regular basis. You will also begin networking and becoming familiar with other investors in your area.

Finally, do not do everything yourself, especially if you are just starting out in the business. You should actively seek out someone more experienced than yourself to model.

And remember, that education and specialized knowledge are key as well as taking massive action on what you learn along the way will guarantee your success as a pro real estate investor!

Author: Richard Bleuze

Angel Investing Related Information

Thirdly, it's really important to act wisely from the very beginning. Even when you start to make great profits do not waste them on unnecessary private shopping. Rather plan how you can reinvest the income to keep the growth process a cyclic activity. Next crucial point to bear in mind is that if business functions as a partnership, risk is incredibly reduced.

However , there are many investment pitfalls that can be avoided. Knowing where you financially stand and where you'll finish up are critical to know if you'd like to be financially successful in the longer term. it is straightforward to understand why folk find it difficult to invest after they have gone through such a troublesome and coarse cheap time.

The key to start investing in times of recession is to kick off with the right thinking and mentality and know that unfortunate events are much more likely to happen, but they are not guaranteed and not everyone will be affected by them. Interest rates tend to fall in poor conditions making it cheaper to borrow money allowing you to invest in the stock exchange during recessions and once the market has recovered you will find advantages in the increase in the prices that your investment will bring in the shape of profits when you make a decision to sell. You have got to analyze the opportunities and see what affect recession will have in every market and then decide to invest.For securing your capital and making profits you can invest in the US treasury bonds that tie up your cash for a period of 10 years and benefit from the low rates. Investing in the US treasury bonds is a guaranteed way to extend your amount and benefit from the low interest rates. The corporate bonds also pay out higher amounts in the times of recession but have an added risk linked with them then compared to treasury bonds.

Many people forget that they can get more information about any subject matter, be it investing information or any other on any of the major search engines like Google. If you need more information about stock market investing, head on to Google.com and be more informed..

You can easily find out the assets that have real worth and the ones in which you must invest in the times of crises. The assets whose price remains the same or fluctuates within a little in recession tends to have higher value and investing in such assets can be useful. An alternative way of investing in recession is by investing in the money market accounts because these guarantee profits and will not tie your money for longer periods. Investing cash in the money market accounts provides you with a safe and lucrative way of investing.

Keeping all these major elements in mind it is entirely an individual's choice to choose the kind of investment that's the best for them. Different folks have different preferences and face different experiences in their life so you cannot base your call on someone else's viewpoints.

When first starting, take "baby steps" and keep your risk as low as practicable. Decide how much you can afford, and don't get in over your head. By starting slowly, you can allow yourself to learn the ropes without getting burned by your mistakes. Beginning financiers who want to invest in individual stocks don't always need to grasp a way to thoroughly select individual stocks. A good way for beginning to start investing is to speculate in professionally managed stock portfolios via mutual funds.

Author: sandeepkumar

Ways to Invest Money

Even though numerous persons tend not to care to think about it right up until they pass their middle age mark, it's by no means too quickly to commence investing money for the long term and/or retirement. The reality is you don't would like to invest your whole life slaving away at some organization. Like quite a great deal the entire human race, you desire to hit a point when you can retire and live out the rest of one's life comfortably. This is why it truly is vital to think about wonderful approaches to invest money for that future. Very first and foremost, if you've not gotten began with this yet, it is time to step up and think of how you happen to be going to begin investing some money now.

One particular of the wonderful points about investing money in this day and age is all of the possibilities. It is not like it was 50 years ago. You are not limited to some 401K, a couple of stocks, and perhaps some bonds. These days, you might want to contemplate a Roth Ira. This really is a great way to invest money to the long term, due to the fact it is possible to pay all with the taxes in your monetary investments up front. This can be perfect considering that you will be definitely paying less inside lengthy operate. You should maintain in brain that taxes go up as time moves forward. Therefore should you need to pay taxes in your investments down the road, you'll definitely be losing a lot more money. Not to mention, having a Roth Ira, you can pull out your money as quickly as five many years down the road, and you will discover no penalties.

How much must you invest? Properly, this all depends on what you have to reside on, and what you will need for your future. Everybody is different. Whilst efficient ways to invest money are important, the portion you invest is also something to put some thought into. Clearly you cannot invest what you tend not to have. So as soon as you pay all of your respective bills and costs each and every month, you are able to only invest what you might have left. A number of which you might possibly wish to place inside a savings account for emergency purposes. It can be sensible to invest in various methods. This signifies not putting all of the eggs in one particular basket. Factor about different solutions to invest money, as opposed to just a single great a single.

Author: kayla15210

Invest Wisely - Buy Investment Properties

So you have had a windfall or have some good amount stacked away in savings which you want to put to good use, what better than to buy investment properties. An investment property is an excellent way of making money. It is definitely not a get-rich-quick scheme but something that can steadily increase your net worth if you choose and buy the right property. Generally the value of real estate increases slowly over a period of time. With the right advice at the right time you can invest in the right property minimizing the chances of going wrong.

It is important that you use knowledge and expertise when you buy investment properties. If you have got the knowledge and the experience in the field there is nothing like it. But since this is not possible for all you can take the help of professionals and real estate agents. Make sure you check their history, their success rate, their knowledge about the rules and regulations regarding purchase of property and whether they are able to show you any properties in the location of your choice.

When you buy investment properties, locations matter a lot. Areas where there is high growth, good tourism generally lead to good development and most often are very sought after. However remember that such properties are expensive as the returns are high and guaranteed to a certain extent. Unless you have that kind of money ready in hand or have a partner / investor who can pitch in for you, you want to look at other cheaper but viable options.

Ideally you can plan to invest for a few years, may be rent out the property for a few years, wait till the market turns ripe and then sell to make a tidy profit. If so you want to check the development in the area and surrounding areas, check about the future plans and then buy. When investing in such a property look at how is the demand in the area for rental properties? Is the interest only during times of high season or is it year round? Renting out the property will help maintain and upkeep the building and also keep fetching you returns even if only a tiny amount every month.

Author: Mac Daniel

Perhaps It's Time To Invest In A New Air Conditioner

Your air conditioner system is a complex collection of parts that need to work together to cool your air. Understanding how all of these parts function and work together can save you a small fortune in repair charges. Your unit is a large home investment so when it is 90 degrees in the shade in the middle of August, you want your system to work well for you. By knowing which parts of your unit could be at fault when your system begins running poorly could save substantial savings when you need an air conditioning contractor.

The first thing you want to check before calling an air conditioner repair service is that the thermostat or any main switches to the air conditioner are set up properly and turned on. Sometimes knobs and dials will get accidently knocked or settings will change over the winter that can cause your air conditioner to function improperly.

Check the batteries in the thermostat and reset the running modes on your system. Next you will want to check the power to the air conditioner unit to make sure that a separate breaker is in the on-position or that it hasn't been tripped by a power surge. Check the outlet first, if this is out then check the breaker. Many times consumers pay unnecessary fees because they did not check the power source.

Clean your air conditioning unit. Check the fans and duct work and make sure that they are not clogged. It is also important to change your air filters regularly as a dirty system will not filter air properly. After that, see that all the fans are able to spin and operate properly before calling an air conditioner repair service. You should check this occasionally through the season to keep your system running correctly. Fans will get clogged with dirt and stop working but if you keep them clean and running smoothly you should have few problems with your air conditioning system.

Air conditioner replacement is an excellent idea if you have any doubts about your system because today's technology can offer you greater savings, with greener technology. With so many heating and cooling contractors out there make sure you have someone reliable in mind to call. You may want to look into some of the latest advances in air conditioning like ductless systems, energy recovery ventilators, and electronic air cleaners.

Heating and air conditioning professionals are reputable air conditioning contractors. They will send a trained, tested, and certified technician to your house or business at no charge. They will diagnose the problem and give you an exact price quote for your air conditioning unit and if you decide you don't want the service, you pay nothing.

Some companies have a preferred service club which offers consumers additional savings for your plumbing, heating and air conditioning needs. Flat rate pricing is a fair pricing system that allows you to receive repair and replacement services. For a fee that you can count on without being surprised by additional fees if the repair goes over the estimated time needed.

The experienced technician that works with you will show you the cost in writing and explain the fee and any questions you might have. If you find that you are not able to maintain your air conditioning unit without a little help, call in the professionals.

Author: Nick Messe

Should retirees invest in real estate?

As a retiree, have you ever wondered where you should invest your money? You may have heard a lot of suggestions from people saying you should invest in real estate or in the stock market. But if you have just become more confused with those suggestions, this article will help you decide whether real estate investment is right for you.

There was a time, years ago, when people investing in real estate were guaranteed a profit. Sadly, that ended back in 2008 with the real estate crash. Now, people who once invested heavily in real estate are simply looking for good bargains that can earn them a bit of a profit. So, while there may be numerous opportunities to invest in real estate at the present time, you have to carefully review every aspect of it to make sure that your investment doesn�t result in a loss.

� Carefully Assess the Risk- Retirees are more careful about their decisions as they know they cannot afford a do-over. If you invest in real estate, you are taking a risk, especially now that there isn�t enough time to recover or regain what you might lose from your investments. Real estate is becoming one of the main investments being considered by retirees, aside from stocks. However, before you put your money into it, it is very important that you review certain aspects of real estate. Just like any other investment you need to ask whether or not it is a promising investment vehicle, provides constant income, protects against inflation, and is easily reversible. While there may be some real estate properties that turn out positive in all those aspects, individuals nearing retirement age should be more discerning.

� Profitability- If you are looking for a property to invest in, make sure that it will be profitable. Some people make the mistake of buying a property such as land, just because it is a bargain. They become owners of the land, but because they do not have any plans for it, they do not earn any income from it. There are people who prefer to invest in homes and apartments. They repair the places, clean them up, fix them and rent them out to people. Some decide to resell the homes and apartments after renovating them at prices sometimes just slightly above the purchase prices.

� New Responsibilities- Although, having rental properties gives you the advantage of earning a constant income, the only disadvantage of having these properties to rent is the fact that you also become a landlord. This means that you will be responsible for anything involving the apartment. You have to conduct routine maintenance, take care of complaints, and fix what needs to be fixed. In reality, this isn�t what all retirees are looking for in an investment. Retirees want to live a comfortable life, free from stress, worry, and pressure. This is why many retirees seek investments which can be more easily managed.

Author: Joy Mali M

Some Information On How To Invest Wisely

All over the world, people have been seeking the right help and education on how to invest wisely. In doing so, other important questions pop up like when to invest and where to invest.

Luckily for all of us, help is easier to find and our choice is wider compare to before. Banks, government and other private consultant agencies can give us different ideas and programs on how to invest our money. Aside from that, they too can help us determine when to invest.

Some of the options where you can place our money are mutual funds, time deposit, and stock market. Mutual funds can be risky since they follow the flow of the stock market. Time deposits have low interest rate returns.

People invest money for a profit. This of course is the main reason why people look for different investment options. The main objective in investing is the rate of return of your money invested.

A Time deposit is definitely not the kind of investment that would offer profit and high rate of return. Mutual funds and stocks are still at the top options when it comes to investment.

Mutual funds compared with stocks shows interesting results. First, mutual funds and stocks are dependent on the economic conditions and are not risk free. Of course, all investments faces risk, but what�s good about these two options is that sometimes you can expect return of your investment faster than projected.

Because of these reasons, how to invest wisely could turn into a question of which is the best investment? To solve this, most people invest their money in both. Diversification is one of the great advantages that you could get with mutual funds.

This means that your money will be place in different groups of stocks, which could help balance the risk that you are facing. Moreover, mutual fund investors are often provided with financial consultants.

This could mean that they do not have to go left and right to ask how to invest their money wisely or when to invest. But it not best to always depend on consultants because they to do not have a crystal ball that tells the future.

So how does mutual fund works and what makes it a good choice? It works by pooling money from different investors. The gathered fund is invested in different stocks, bonds, assets and other securities.

There are also different types of mutual funds and the four basic are money market funds, bond funds, domestic stock funds and international funds. All of these types can of course offer investors different rates of interest and returns.

Now, if you think that mutual fund investment is the best option for you, then all you have to do is check how to invest in mutual funds. You can easily do this by conducting research and asking right people.

The right people are of course those that know how to invest wisely and when to invest. Investment consultant agencies and business professionals can be the people to ask.

Author: Rudy S. Silva

What Is The Best Way To Invest Money

Want to know what is the best way to invest money? Visit Myreviewsnow.net to get a viable option to earn above market returns on your cash.

http://www.WHATISTHEBESTWAYTOINVESTMONEY.COM

Author: aaron aaron

Advantages and Disadvantages of Investing in Stocks

People who are planning to invest in stocks should definitely have prior knowledge about the various risks involved. Putting large amount of money in stocks is no child's play and it is always good to know the pros and cons of such investments. If you are a working professional and have the basic knowledge of investments, then I'm pretty sure that the thought of investing in stock market must have definitely occurred. After all stocks are tempting and offer an easy way to earn profits. If you want to have a diversified portfolio, it is essential that you put out some money in the market and enjoy its benefits. There are various ways of investing money; mutual funds, real estate, gold, bonds, etc. However, stocks remain the favorite option for investors who want to make huge profits in a short span of time.

Stocks are nothing but a share in the ownership of the company. When investors purchase stocks they represent a claim on the company's profits and earnings. If the investor starts acquiring more and more stock the claim of the investor over the company also becomes more. When an investor buys a stock, he/she gets a stock certificate (a piece of paper) as a proof of the ownership. Today this piece of paper is hardly in use and most of the data is stored electronically which makes it easier for stock trading.

There are two types of stock available in the market - Common Stock and Preferred Stock. Common stock is a popular form of stock and most of the stock trading happens in this type. Common stocks provide investors with ownership of the company and offer share in the company's profits. Most people prefer buying common stocks because they get to participate in the election of board members and yield higher returns which is never fixed. In case of bankruptcy, common stockholders will be the last ones to be paid until the company has paid the money to creditors, employees and bond holders. Preferred stocks also give certain degree of ownership to the stock-holder but with no voting rights. Investors who buy preferred stocks are entitled to receive a fixed dividend forever; this is not the case with common stocks where the amount of the dividends keeps on changing. The best advantage of dealing in preferred stocks are, in time of bankruptcy preferred stockholders are paid before common stockholders.

Pros and Cons of Stock Investment

It is not that difficult to understand how the stock market works. As a beginner, it is advised that you chip in $500 as the initial investment. Most financial consultants will advise not to put in more as it is better to learn the rules of the game before playing it. $500 is the minimum figure with which you can start stock trading. You can also hire an online trader and seek professional guidance before you choose to buy or sell stocks.

Author: Kulbhushaan Raghuvanshi