Tips For Your Financial Future

Selecting the right schools can affect your personal finance. One of the most cost effective methods to get an important degree or certification is by attending cheaper schools for component of your education, and switch over to a more costly or better-ranked school for the remainder. Your credits will merge from the previous school and you’ll still acquire the graduation benefits from your new school.

Attempt utilizing cash to pay for all of your purchases subsequent week. Whenever you buy goods with cash instead of plastic credits cards, it’s easier to see precisely how much money you’re parting with. Also, if you do not possess a charge card on your individual you can avoid impulse buys.

Avoid purchasing new gadgets as soon as they come out. Once we have all noticed lately with some of the most popular new products, the price is likely to come down inside the very first 6 months of release. Don’t hop on the train to purchase your new toy at release, and you’ll save yourself a bundle.

A higher education can make sure that you get a better position in individual finance. Census data shows that individuals who have a bachelor’s degree can earn nearly double the money that somebody with just a diploma earns. Even though you will find expenses to visit college, within the end it’ll pay for itself and much more.

A great rule of How To Save Money, is to set aside 10% of your earnings each payday into a savings account. Make certain that you don’t have a debit or charge card linked to this account, as it is too tempting to spend it if you discover something you cannot appear to live without.

Pay yourself initial. Each month, put a bit cash from your take-home pay into an emergency savings account. Eventually, you might be confronted with unplanned expenses, and this way you’ll have the ability to take care of them without getting to resort to credit cards. If feasible, try to build up an emergency fund that may cover at least 3 months of living expenditures.

The envelope system is a tried and accurate budgeting technique that can function nicely for those who’ve a hard time staying inside their budget. Cash out your paycheck at every pay period and put a predetermined amount of cash into every envelope for every line on your budget. You can then only spend the money that you have for every item. It prevents you from spending too much money as you have a visual for what is left.

Exploring Your Options: Learning To Earn Big With Options Online Trading

If you are interested in online stock trading or other avenues of Online Trading than buying and selling options are a good place to begin. Options trading has proven to be possibly the most versatile and affordable of all online trading investments. Thy cost less than stocks and provide a high leverage approach to online trading that can limit the risk of loss.

Buying options is sort of like purchasing an insurance policy for your investment. When you buy options you are under no obligation to actually buy or sell the underlying instrument. You just possess the right to do so. For example, suppose you are interested in buying a car from your neighbor, but you don’t have the immediate cash to do so. Therefore, you offer your neighbor $200 for the option to buy the car for $1500 in 6 weeks. During the 6 weeks, the neighbor can’t sell the car to anyone else. However, during that time, you learn that the car will need a new engine and that the neighbor is not going to put a new one in. With this new disclosure, when the 6 weeks are up, you choose not to exercise your right to purchase the car. You are out of $200, but you also avoid buying a car that would have ended up costing you a lot more in repairs in the future. In the same way, options trading, allows you ample time to investigate the market before you exercise your option to buy. You don’t get that same luxury when buying stocks.

Options trading is possibly the most versatile Investment Option. They provide limited risk and most notably have the ability to be profitable in both bear and bullish markets. However, no matter what you online trading options you choose you must become educated, consistent and disciplined in your approach.

Biggest Investment Mistakes

In order to fall under the umbrella of “Financial Responsibility” most people understand that they need to start planning early. However, despite best intentions, often times the culprit called life gets in the way. Home improvements, car repairs and unexpected job losses all seem to come together to put a kink in even the most well-laid financial plans.

To keep yourself closer to the financial finish line, there are a few common financial pitfalls you can avoid. Although you may fall short of the goal from time to time, knowing where you stand and where you are poised to land are incredibly valuable in being financially sound for the long term.

Thinking It Is Too Late

The best financial advice taps into individuals in their twenties, when there is little debt, few obligations, and a high potential of earnings. Unfortunately, few of us are ever the financially responsible adults we want to be straight out of college. It’s important to remember that no matter where you are on your financial journey – one of the lucky few in their twenties or one of the more common forty-somethings realizing that their savings account just isn’t what it used to be – it’s never to early or late to get started accumulating for retirement or even a down payment on a home. Doing nothing is the only way to guarantee that you’ll have nothing. Thinking You Have More Time

On the flip side of the coin, you must also do everything in your power to get started investing right away. Although no one is going to berate you for failing to start saving twenty years ago, it doesn’t do any good to wait another twenty to get started. It doesn’t matter if you have thousands of dollars in debt or are switching jobs for the sixth time in as many years. Meet with a Financial Advisor right now to learn what your next steps should be.

Not Looking Far Enough Ahead

Some beginners make the mistake of How To Invest Money only to realize a few years later that those funds are needed somewhere else. Consider the time frame of each and every investment you make. Few advisors will recommend touching money in the stock market before five years is up, but a money market account or certificates of deposit can turn around quicker than that. You’ll also need to remember that most investments do much, much better if they are left alone. Trading in and out of the market or changing your mind frequently can come with higher fees or other monetary setbacks. Time are investments best friend.

Three Investments That May Have Hit Their Peak

All financial instruments have a varying chart if you try to map down the returns you get out of it and accordingly, have their highs and lows. Each financial investment that you make reaches a point where the returns are at their peak and everybody is making huge profits. If you have a diversified investment portfolio, you’ll often have the chance to reap benefits out of various peaks by involving yourself in high frequency trading.

If you’re using portfolio management services, they’ll often help you and get you involved in this high frequency trading so that you reap utmost benefits out of it.

So, what are the three investments that we think may have already hit their peak?

1. Equity Investments (Stock Markets)

Often the money that you invest in a company as an owner or holder of a stock yields results in a very volatile manner. However, various facts and numbers report that we may just have seen the peak of all stock markets globally in 2018.

Various wealth management advisors are suggesting customers move their money elsewhere because of the trade battles between various economically strong countries affecting the global market. The Sensex dropped by 1% in December and all global markets followed this lead with even higher drops. Many resources suggest that the global economy is slowing down and if you don’t have a diversified investment portfolio, you could well be heading for a period where profits are not high if you have invested in Equity Investments.

While many suggest that this global battle of trades won’t affect Indian markets and may even help the economy by affecting the price of crude oil for example; it is also right to assume that Equity Investments have hit their peak already and may take up to a decade to start gaining similar profits. However, if you are availing portfolio management services, worry not because they most probably know where to invest instead.

2. Small Cap Mutual Funds

If you talked to all the wealth management advisors one year before, all of them would suggest you invest and buy into small cap mutual funds. However, today, they wouldn’t be so keen on the idea. If you have a diversified investment portfolio, you’ve most probably invested in a few small cap mutual funds. Probably the riskiest investment that you can make, small cap mutual funds can yield you either high or low returns.

The past three years have been very promising for startups and small companies, however, on an average, the small cap funds return reduced by 13%. Over the last ten years, Small Cap Mutual Funds have on an average yielded a result of 20% profit. Many sources suggest that this in fact, was their peak and they can never really return to that stature again.

Nevertheless, what must be taken into consideration is that Small Cap Mutual Funds have highly unpredictable and volatile returns, so while we may be suggesting they’re reached their peak, they could well surprise all of us. However, if you use any portfolio management services, thanks to their experience, you probably have nothing to worry about as they will know where to invest your money without having to take too much risk.

3. Tax Saving Schemes

Various tax saving schemes in India such as Public Provident Fund (PPF), Equity Linked Saving Services (ELSS), National Pension Scheme (NPS) and many more are believed to have also reached their peaks. Many wealth management advisors would suggest that Tax Saving Schemes could never go wrong, and they’re probably right. What it really comes down to is if the profit is enough and worth it? Most of the returns you get from these tax saving schemes are after a long period of time (most probably your retirement) and with the generation getting younger, many argue that these tax saving schemes have hit their peak.

Many people also argue that this has got to do with the shaping of politics and the financial situations involved around it in the country. If you use any portfolio management services, make sure to consult them and let them suggest you whether to invest in tax saving schemes such as PPF, ELSS or NPS.

Tips to best manage a diverse investment portfolio

An investment portfolio’s success is largely dependent on the efficiency of its asset allocation. Therefore, it is highly advised that an individual or a company’s investment decisions are made in accordance with their goals, and with due consideration paid to the time horizon and their extent of risk tolerance. Taking these elements into account is considered critical for determining the structure of an investment portfolio. However, in order to create a portfolio that benefits you at various stages of your life, fulfills your goals for the decided time-frame, and keeps your risk tolerance in mind, the concept of diversity comes into play.

A diversified portfolio is one which contains investment options, especially equities, across a broad spectrum of market categories. This enables an investor to escape the choke hold of a failing market, as a diversified investment portfolio consists of assets that are historically known to move in different directions. Thus, minimizing the risk, mitigating losses against gains, and offering a balance in investments. These diversified portfolios are often best managed in the following ways:

#1: Widen Your Knowledge

A diversified investment portfolio is riddled with investment options that range from stocks with higher risk potential, stocks with long-term growth potential, conservative stocks that promise regular dividends, and even individual stocks. This abundance of alternatives requires an investor to brush up their understanding of the stock market in order to manage their portfolio effectively.

Knowledge in this particular area can be gained through self-education, attending classes in investing, reading books on the subject of investment, using the services of virtual trading simulators, or practically taking part in actual investing and learning as you go along.

#2: Keep on Building

Add investments to your portfolio on a regular basis, regardless of the size of wealth at your disposal. Use dollar-cost averaging as a tool to counteract the effects of major highs and lows that are created by the volatile nature of the market, while systematically expanding your Investment Portfolio. This would not only allow you to manage your existing investments productively by making smaller additions to them, but it will also smooth out the market anomalies an investor might face.

#3: Know the Cost You Are Paying

When it comes to reallocation of your assets or rebalancing your portfolio, certain commission costs or transaction fee is incurred. Lacking knowledge in this regard and not being cautious with the charges involved can result in accumulated losses. However, it is also crucial to be aware that the cheap option is not always the best option.

#4: Re-balance

It must be understood, that as significant as it is to introduce a level of diversification into your portfolio, it is equally important to regularly rebalance your diverse investment options. With deep fluctuations in the market, it is necessary for an investor to bring changes in their asset allocation accordingly, instead of leaving their Diversified Portfolio to fate.

Holding on to your investments is thought to be a sound strategy. However, it is essential for you stay updated about current market conditions and handling your investments suitably.

Investing can be a fun experience with its educational, informative, and rewarding nature. Although, in order to take advantage of this source of wealth creation, one must adopt a disciplined approach while building a diversified investment portfolio. Managing a diversified portfolio in a smart manner can help in countering risks, while maximizing the possibility of growth by keeping your investment portfolio balanced.

This management of an individual or company’s investment portfolio can also be done by seeking help from financial advisors, who have the required experience and time to best manage your investments for you.

6 Signs Your Money is Properly Diversified

Diversification is a defensive risk-management technique, which strongly stresses on the addition of various unrelated investment types and asset classes in your portfolio. This approach is meant to offset the ill-effects of fluctuations and encourage investment growth, while protecting the value of your investments. This strategy of diversifying your investments is undertaken by spreading your wealth amongst different investment options.

However, it is particularly common of investors to remain under the false impression of having a diversified investment portfolio, when in reality, their portfolio consists of similar asset types. This is why, the presence of the following signs enables an investor to determine whether his/her investment portfolio is truly diversified.

1) Your investment portfolio consists of a mix of growth and defensive assets.

An investment portfolio comprising of, but not limited to, equities, bonds, commodities, government savings, and cash, etc., indicates that diversification is adequately practiced.

2) Short-term performance is the least of your worries.

Market fluctuations occurring on a daily basis or at frequent intervals is bound to affect an individual’s investment. Unless, his/her portfolio is well-diversified. As, in that particular case, the everyday movement in the market has little impact on your investments.

3) Your portfolio is built around a long-term strategy.

Investing with the intention of creating future wealth often leads to an investor plunging money into assets for a longer period of time and exercising patience while picking different investment options that eventually become available, thus building a diversified investment portfolio.

4) You are less likely to chase “hot” investments.

With a diversified portfolio ensuring consistent investment returns, chasing trends often takes a backseat, as investors are satisfied with the stability their portfolio offers.

5) You leverage Exchange Traded Funds (ETFs).

ETFs are open ended investments that own a range of assets, from shares to bonds, which can be invested in. These funds provide exposure to a portfolio, and therefore, their presence results in diversification.

6) You factor in age, risk tolerance, and financial goals.

If your asset allocation reflects your age despite different investment stages, is designed taking your risk tolerance into consideration, and is built in accordance with your future financial goals, then it means that you have a diversified investment portfolio that is meant to align with your needs and transform overtime.

A diversified investment portfolio has the ability to weather crucial financial storms and stay afloat in times of fluctuations and volatility, as it is not reliant upon a single investment option for the purpose of promising returns.

Fear of Investing on Your Own

Are you intimidated by the idea of plunging your hard-earned capital into stocks when you have never taken that leap before? Are you uncertain about where you should even begin if/when considering the wide world of investments? Are you wondering how to invest money online and how to go about the process? Or is the idea of making a bad investment choice on your own deterring you from even attempting to make a good one? Well, in any of those above mentioned cases, you have arrived at the right place.

If investing on your own feels like a task that makes you slightly restless, then do take solace in the fact that you are not a lone ranger. Welcome to the club!

Many a times, individuals decide to guard their wealth with their lives because the fear of investing into an option that they have minimal awareness about seems daunting and worrisome. However, in the recent years, with technological advances becoming a force to be reckoned with, alternatives have been provided to newbie investors to make their investment journey pleasant and simpler. With no hustle and bustle of the previous century, where only an uncommonly rich investor was able to pool money into his/her chosen financial options, online investment specialists and an abundance of information are now available at the click of a button. This method is referred to as online investing.

Now, folks, you might wonder how to invest online, if you consider it as one of your go-to options. Well, in simple terms, if you have a computer at your disposal, enough money to initially open your trading account, and a satisfactorily sound financial standing, you can take your first step into the world of investment.

Although, notwithstanding the reasons why the idea of investing your wealth on your own strikes a stark fear in your heart, investing is not a bad option by a long shot. You may reap losses at some point, but the returns you will receive upon making a well-thought investment will outshine the negatives. Furthermore, there are expert investment companies, such as MC-WEALTH, who are more than willing to guide you through the process of how to invest online, while successfully providing you with an automated investment platform which is economical and painless to use. Thus, making investment an exciting process.

Building an Investment Portfolio – Marathon or Sprint?

The key to earning and accumulating substantial wealth via investments is to build a strong portfolio. A strong portfolio is one which includes strong stocks and investment avenues that have the capability of delivering benefits year after year. Putting together a portfolio like that often takes patience, resilience, determination, dedication and effective investment portfolio management. Just like preparing for a marathon.

Most everyone and everything in the 21^st century is driven by instant gratification – instant food, instant delivery, instant results! We wish to enjoy things without delay whether it is instant noodles or instant returns on our investments. Trading and investing today is treated like a sprint where the ultimate goal is to get ahead of the other person. You may identify the strong stocks and end up selling those in a bid to get some instant gratification. In this rush to make profits off of the good stocks, investment portfolio management takes a backseat. You are then left with not-so-great stocks which may pull your entire portfolio southwards.

Adopting an investment portfolio management strategy includes investing in good stocks and continuously monitoring their performance – just like you would do while preparing for a marathon. Here are some principles that you can follow whether building a strong portfolio or running a marathon!

Long-term Mindset

Winning and investing both require a long-term mindset. Short-term investors are like sprinters. Sprinters want to win the race and short-term investors want to make a quick buck. Time, patience and a carefully formulated strategy are essential if you want to complete a marathon or stay invested for a longer time. Investment Portfolio Management helps you to build a portfolio with stocks that meet your risks and requirement.

Discipline

Irrespective of the type of marathon you want to run, you need to build up endurance and stamina which of course takes, discipline and regular practice. The process of investment portfolio management to build a strong portfolio requires the same level of dedication and practice. For a marathon, you would have to exercise, jog and run every day to build up your stamina. When it comes to investing, SIPs are a good way of regularizing investments. Systematic Investment Plans (SIPs) help you to invest regularly without burning a hole in your pocket. Over time, you can increase your installments frequency and amount. Also, the more you invest, the more adept you get at identifying good performers. So, SIPs are effective strategy for investment portfolio management.

Emergency Reserve

When preparing for a marathon, it is advised to build up an energy reserve through stretches and workouts. This emergency reserve holds you up and prevents you from fainting or collapsing during the marathon. Similarly, another aspect of effective investment portfolio management is creating an emergency fund. Before you start investing for the long run, make sure you have set aside a sufficient amount of reserve. This reserve will exist to protect you during any kind of emergencies. Experts suggest saving an amount equivalent to at least three months of living expenses. In this way, even if some of your stocks don’t perform well, it won’t lead to a major financial setback.

There is another key similarity between investment portfolio management undertaken to build a strong portfolio and running a marathon. At the beginning of both, you must evaluate your goals, strengths and weaknesses. When you know where you stand, you know how and where to begin. Since every marathon runner and investor is different, the steps of preparation may also differ. If you’re looking for instant gratification, your investment strategies will differ from those looking to create long term wealth. Long-term investors have long-term goals and lofty aims which they intend to achieve step by step. So, if you belong to the latter group, adopt a marathoner’s mindset and start planning!

What Skills Do You Need For Asset Management?

Asset Management may be a self-explanatory term, being explained in the most succinct of ways as the management of one’s assets. However, the process is not as straightforward as the name suggests. Tons of thought process, monitoring, mathematical calculations, algorithms, and strong predictions go into the management of assets of a company or an individual. But this is not a profession that can be pursued without the presence of certain skills.

In order to embark on the journey of becoming an asset manager, following key skills and qualifications are required. These requirements are detailed below:

1. Well-versed in the field of finance

Demonstrating financial modelling and computing skills by obtaining a graduate degree in finance or a similar discipline is considered a top requirement for a career in Asset Management. Earning a degree, attaining professional credentials, and simultaneously expanding your knowledge of accounting and statistics is fundamental for an individual to pursue the path of becoming an asset manager and landing more opportunities in the finance industry.

2. Analytical and Quantitative skills

Asset management comprises of a variety of qualitative and quantitative analysis,which are carried out to predict future movement of investment options, to understand the effects of certain business moves that seem rather difficult to be measured in numbers, to forecast changes in statistical data, and manage assets accordingly. Therefore, possessing analytical skills and being on-top of your number-crunching game becomes a necessity.

3. Honing your Communication skills

To successfully sweep his/her clients off their feet and to articulately present their ideas to their senior colleagues, asset managers are required to have a strong hold on their communication and interpersonal skills. Effective communication does not merely allow an individual to convey his/her findings in an effectual manner, but also results in an asset manager achieving optimal performance levels.

4. Exhibiting Organizational skills

An asset manager’s client portfolio is often laden with a hefty inventory and enormous chunks of money. Therefore, paying proper attention to detail and organizing the portfolios methodically can lead to an effective plan-of-action.

5. Problem-Solving skills

When handling assets of various kinds and dealing with movements in the markets, problems are bound to arise at some point. However, the ability to tackle these problems and create opportunities from them to your client’s advantage is what an asset manager should have a prowess on.

6. Reporting and Persuasion skills

The very nature of asset management requires a manager to regularly report his/her findings to their clients and fund managers regarding the performance of different asset classes, including equities, bonds, etc., to inform the clients about the anticipated future movement of the diversified investment options, and to apprise the operational and functional condition of the portfolio as a whole. Furthermore, asset managers must have the ability to defend their portfolio-related decisions and give concrete reasons to back said decisions.

7. Hunger to be in the know-how

To succeed in the field of asset management, it is of vital importance for an individual to be exceedingly aware of the market trends, to be aware of the changing market dynamics, to stay updated about finance opportunities, and keep up with the latest products and services. An asset manager, in precise terms, should be hungry for more research, more discussions, more debates, and especially dedicated to his/her clients and to managing their assets and numbers.

Asset management is known to be one of the most sought-after and extensively competitive careers in the world, which is why it requires a particular kind of intellectually curious, confident, passionate, driven, and tenacious person, who can effectively manage portfolios and look after his/her clients’ assets and understand their financial needs while working towards managing their wealth efficiently.

How to Invest Money with our Investment portfolios

It is human tendency to pursue investments that produce sky-high returns as fast as possible without losing the principal amount. Unfortunately, investment products that produce high returns with low risk do not exist. But you can get decent high returns and reduce risk with diversification through investment portfolios. This is the mandate by which an investment making company, such as an asset management firm or wealth management firm operates.

An Investment making company, as the name suggests, is a company that makes investments on your behalf. An investment making company can specialize as an asset management company, a hedge fund or a mutual fund. These companies employ experienced financial managers to build up your investment portfolios. The investment portfolios are put together depending on numerous factors ascertained by you.

Factors that Determine Investment Choice

Any investment making company, financial advisor or intermediary will always ask you to consider these factors before making investment decisions.

• Age: Typically, younger investors are working age and have less responsibilities and longer time horizon. Hence, they have a greater tolerance for risk compared to older investors.
• Goal: Investment goals can be short-term or long-term. Generally safer investment options are for short-term goals and the riskier options for the long-term.
• Profile: This comprises personal characteristics such as monthly earning, job stability, number of financial dependents, investment goals and risk appetite.

Investment portfolios commonly suggested by an investment making company

Different investment portfolios are appropriate for individuals with different risk appetites.

High Risk Appetite

Investors falling into this bracket are younger and have long-term goals. The investment portfolio that is typically suggested by an investment making company would consist of volatile financial assets.

• Direct Equity: A very volatile asset class with no guarantee of returns. Additionally, it is difficult to pick the right stock and timing the entry and exit.
• Equity Mutual Funds: These are predominantly invested in equity stocks. As per the SEBI mandate, these schemes must invest at least 65% of the assets in equity and equity-related investments.
• Market-cap stocks: These are mutual funds designed as per market capitalization. Such funds would have a high proportion of small-cap stocks since small companies have the potential to grow rapidly in the future and therefore likely to produce significant gains in the long-run.
• Equity-Linked Savings Schemes (ELSS): These are tax-saving mutual fund schemes with a lock-in period of 3 years.

Moderate Risk Appetite

Investors falling into this bracket would typically be in mid-life age and have medium-term goals. The investment portfolio typically suggested by an investment making company would consist of a mix of safe bets and volatile financial assets.

• Balanced Mutual Funds: Funds are invested in a mix of equities and debt. The purpose is to stabilise an investment portfolio by balancing the objective of high returns without loss of principal amount.
• Monthly Income Plans: Funds are predominantly invested in debt instruments and have a 15-20% exposure to equities. This allows hybrid funds to generate higher returns than debt funds. Investors get income in the form of dividends.
• Arbitrage Funds: These are equity-oriented funds with the objective to take advantage in the stock’s mispricing between the futures market and the derivatives market.
• National Pension Scheme (NPS): Having this scheme in the investment portfolio allows investors to achieve tax benefits during their youth and also build their long-term retirement corpus. This scheme invests in a mix of equity, fixed deposits, liquid and government funds, among others.

Low Risk Appetite

Investors falling into this bracket are either conservative or in their old age. The Investment Portfolio that is typically suggested by an investment making company would consist of safe investment options.

• Debt Mutual Funds: These funds typically invest over 80-85% in debt. They are ideal for investors seeking steady returns.
• Bank Fixed Deposits: This is a safe investing choice to include in your investment portfolio as each depositor is insured up to a maximum of INR 1 lakh, both for principal and interest.

Money Market Funds: These funds invest in short-term fixed income securities such as government bonds, treasury bills, banker’s acceptances, commercial paper and certificates of deposits.