Sunday, October 7, 2007

Real Option

Real estate is an intelligent option to add to your portfolio and diversify your risk. Real estate, as an investment option generating profits for an investor was unheard of years before. There was just a market rumour that, real estate could at anytime capture the markets. Later on, the real estate market heated up and the scenario changed rapidly.

Take an example of Bangalore (India) where people who had bought land years back have suddenly become billionaires. They were just common people whose lands have appreciated. It has finally emerged as an ideal investment over the years and there are many takers this day for a land thats available at a fair price or has an appreciation potential. The market is far more vibrant today and the participation of investors is ever increasing. Moreover there are many speculative market players who try to create an artificial rise in prices. So a balanced real estate market can prove a stable investment for a layman.

Real estate as an investment avenue
The investment scenario in the country has taken a backseat and has experienced a steep fall over the last few years. However, this downfall is a just the result of skyrocketing prices. The demand has steadied again as the need for office spaces and business houses have increased. The rentals being collected are the chief source of regular income. Thus the real estate sector is at par with other investment options like stocks, shares etc.

Investment in housing and residential property is a wise option with a massive potential. Moreover housing finance companies offer easy loans to people seeking to invest in property deals.

Office and residential spaces

These are the more trusted options available to an investor today. People who possess property can transfer it to a company or individuals and gain regular income from it. In fact more people who are into real estate investing are considering this glamorous option. Rental incomes are anywhere between 11% to 15% and are also offering the benefit of capital gains too. In another market option the customer can also lease the property and gain a monthly rental. However one must not forget that the risk element is to be kept in mind.

Diversification of holdings

As an investor one can hold property in various markets and also across many states and countries. If at all the market condition tends to slow down in a particular state there can be a total slowdown in the business of real estate investors. Hence intelligent investors make it a point to hold property across states so that there is a diversification of risk. Thus the business doesnt suffer on a large scale and is more stable even at such times. An investor can further diversify his real estate holdings into residential and commercial holdings. But, office spaces and lease or rental properties remain evergreen options.

To cap it all, real estate remains one best option with people who are willing to play it big.

Written by Charles Smithston. Striving to achieve financial freedom? Join The Team Wealth Builder community and get to know about the different streams for investing money to get rich. Visit TeamWealthBuilder for tips on how to invest on long-term income building methods to get out of the rat race. Get yourself interested in the discussion about stock markets, real estates, mutual funds, businesses, web sites and much more and drive yourself to the financial freedom sector.

Forex Trading Strategies - Self Discipline Is The Key

The biggest appeal of Forex trading is that it offers instant wealth creation. But an offer is nothing more than an offer and the opportunity will pay off only for those who approach the foreign exchange market equipped with Forex trading strategies. The strategies should be well though out, unique if possible, and leave the trader with the understanding that tactics are only one useful element in the complicated world of Forex trading.

Regardless of whether you want to participate in day trading, position trading, or swing trading, Forex trading strategies will reduce your risk, but only if you have the discipline to stick with them. Traders who are undisciplined can turn the most sophisticated trading plans into hash, but a disciplined and flexible trader can see opportunities to take profgits from even the direst situations.

The Best Forex Trading Strategies
There is a school of though among some Forex traders that the very best traders have convoluted Forex trading strategies and are simply blessed with a keenly developed market sense. They also share a belief that there is a faction among Forex traders who are privy to inside information on which they can base their Forex investment strategies.

But no matter what anyone believes, there are some common traits which separate the winners from the losers in the Forex trading arena. What are they?

The best Forex traders take the time to observer market patterns and put together strategies which raise their odds of making money. They repeatedly capitalize on the same knowledge

The best Forex traders never enter a trade without having an exit strategy. They set their getting in price, and they set their getting out price. If the getting-in price never comes around, they dont change it. When the getting-out price is reached, they exit. They know when to cut their losses, and when to lock in their profits. And they have the discipline to do both.

The best Forex traders never become greedy. They are much more comfortable making many small gains than they are trying for the grand slam. They are traders for the long term.

The best Forex traders recognize the wisdom of getting in when others are getting out of a position, and exiting a position when the crowd arrives. They are natural contrarians.

Anyone Can Do It, With A Little Restraint
Forex trading strategies are only as good as the discipline of the trader who employs them. For those willing to exercise self restraint, the Forex markets can be very profitable indeed. As long as someone uses only risk capital for Forex trading, and sticks to a plan, there is no reason why he or she cannot become a success at Forex trading.

You can also find more info on Currency Forex and Forex Brokers. is a comprehensive resource to know about e-Forex Trading System.

Rising Interest Rates and Why We Should Care

A new client of ours recently came into some unforeseen money. With the desire to act wisely and give his cash the opportunity to grow, he told us that he wanted to invest in something safe. We asked him if he had any ideas and he responded immediately: Bonds. Twenty years ago, we would have agreed that bonds were a safe investment. But with interest rates on the rise as they are today, yesterdays sure thing is fast becoming todays risk.

Lets refer to our new client as Bob. Bob is a typical retiree. He lives with his wife, who is also retired, and they have two grown children with families of their own. Bob and his wife both receive monthly social security payments and pensions from their former companies. In addition, they receive IRA distributions from their retirement savings.

Investing in bonds (or bond mutual funds or bond trusts) to supplement pensions and/or social security income has been a typical safe move for many retired people for the past 20-plus years. With interest rates going down, seniors who locked into fixed high interest rate investments received chunky interest payments, and in many cases watched their principal go up as well.

However, nothing lasts forever, and because interests rates are cyclical in nature, bonds arent necessarily the safe investments that many people view them to be. Let us explain: When interest rates go down, bond prices go up. Now, with interest rates at 45-year historical lows, we think theres a pretty good chance that rates will start to climb. The Federal Reserve, otherwise known as The Fed, (under the leadership of Alan Greenspan) has a huge impact on interest rates. Banks will raise their prime rate consistent with federal fund rate hikes. Eventually, after enough short-term rate hikes, we predict that long-term rates will follow. Shortly thereafter, the bond market will have to catch up, and bond prices will be forced in one direction: Down.

So this is how it looks for our friend Bob: Short-term interest rates are creeping higher, while long-term rates have not yet caught up. Long bond yields are in the middle of dropping, which means that long bond prices are increasing, due to the inverse relationship between yield and price. Something is definitely wrong with this picture. With interest rates going higher, how can long bond prices be going higher too? Remember what we said about the other important inverse relationship, the one between bonds and interest rates: Its only a matter of time before the longer bond markets correct and long bond prices start heading down.

If youre feeling confused by all of these relationships, dont worrymany financial professionals feel the same way. Nevertheless, youre probably wondering: What can I do to protect my investment portfolio? Well, this is what we recommend:

1)Review your investment objectives.
2)Review your investment time frame.
3)Ask your broker/advisor what options you have regarding the prevention of loss of principal and income.

The good news for Bob and others like him is that strategies are available to help protect his money. One strategy we recommend involves shortening and staggering maturities of individual bonds so that money comes due on a regular basis. This will allow Bob to assess the interest rate environment regularly, giving him the option to purchase additional bonds at the current interest rate, or waiting for rates to change.

Due to rampant confusion and misunderstandings when it comes to bond investments, it is important to remember the difference between various bonds and bond funds. U.S. government Treasury bonds (T-bonds), municipal bonds, corporate bonds, junk bonds, bond trusts, government bond mutual funds, municipal bond mutual funds, etc. are some of the most common ways an investor can get involved in the bond market. But as with any investment, each of these bond investments has its own ratings, risks, performance predictions, and principal guarantees. For example, with U.S. government bond mutual funds, there are NO guarantees of principal.

Were not suggesting that Bob should avoid the bond market like the plague, only that he should keep a watchful eye on it. There is still money to be made by investing in bonds, but with interest rates on the rise, there clearly is an increased potential for loss. Our goal is to help Bob maintain a lifestyle that involves choice. We want him to enjoy that upcoming vacation with his wife, the new car every four years, summer camp for the grandkids Bob has worked hard for a lifetime to make these things happen. By watching his portfolio closely and investing carefully in the bond market, were confident that Bob will be able to turn his plans into reality, despite rising interest rates.

Don is President of Conrad Capital Management, an independent registered investment advisor in Melville, New York. Before launching his own firm in 1997, Don held a combined seventeen-year tenure at E.F. Hutton and PaineWebber, where he served as Senior Vice-President at both firms.

Don can be reached by phone: (631) 439-7878 or email: Also, to learn more about Conrad Capital Management, visit the website at:

Don started his career in the late 1970s at a nationally recognized mutual fund company and was recruited after three years by E.F. Hutton Company to work in the consumer retail division. During his thirteen-year tenure there, he spent two years specializing in and trading the 30-year treasury bond. For the last five years, he served as a senior vice president focusing his efforts in the Consulting Services division, maintaining offices in both Long Island and Manhattan.

In 1993, he was recruited by PaineWebber as a Senior Vice President in the consumer retail division. In addition to managing his clients assets, he was asked by senior management to conduct a nationwide tour to train financial consultants in the Consulting Services division. Don also made a video on the use of advanced technology in the financial services industry. This video was distributed to PaineWebber offices internationally.

After almost five years at PaineWebber, Don decided to pursue his dream by starting Conrad Capital Management in order to offer his clients more choices and flexibility.

Financial Investment Tips - 7 Tips For Not Losing Money On Your Mutual Fund Investments

Investing in mutual funds has inherent risks. You cannot totally eliminate all risk from any financial investment. However, you can significantly reduce your risk and lower your chances of losing your principle by following these seven tips.

1.Know the risks.

Not only should you know the risks but you should know them before you buy. Many people learn by trial and error. That way of learning means that you will get burned every time you learn a lesson. Your life will be more comfortable if you learn from the mistakes of others. Then you get the benefit of the lesson without the financial injury.

2.Discern who has your best interest at heart.

You always want to have your radar on so you can discern who is a friend or a foe. It takes practice to be able to tell who has your best interests at heart. If someone only calls you when they want you to buy something, they may have their self-interest above what is best for you.

One of the best principles to utilize when judging the merits of someone's ideas is to use third party verification. See if what someone tells you can also be verified by a third party. Who else says that this investment is a solid long term play?

3.Always understand how financial instruments work.

If you cannot explain how something works in one to three sentences then you may not fully grasp what it does or how it works. That lack of knowledge can end up harming you later. An easy way to research financial terms and investment vehicles is to use a search engine like Google or Type a term in a search engine and you will easily find simple explanations to almost any confusing terms.

4.Know your options.

Don't think that you must invest in the single item that is in front of you. Understand what options you have. You may discover that something that is similar but ten times better for your individual comfort level.

For example, many people have bought REIT's and mutual funds that invest in real estate over the last ten years. However many experienced investors that I know have been surprised to see people use these investment vehicles when they can easily invest in real estate directly as a private lender without the fees and expenses.

5.Stay within your risk comfort zone.

Some people fall into the trap of feeling that they must take more risk because they are close to retirement and need to grow their savings faster. This attitude can lead to chasing the highest return without fully assessing all of the risks involved. Staying within your comfort zone can bring you more sleep and less stress.

6.Get answers to all of your questions.

If you have serious reservations about an investment, do not purchase it. First, get your questions answered, and then decide if it is right for you. Too many people accept what someone presents to them without fully understanding it.

7.Ask an expert.

Talk to other people who know more than you do about the financial subject you are interested in. Discover their opinion and how they feel about the topic. They may be able to suggest an alternative that suits your needs better.

If you are wondering where you can find an investment that many experienced investors describe as being very secure and earns high returns, then go to

If you'd like to read a Special Report on getting higher returns in your IRA, then you can download it by going here and looking in the left hand column.

Written by Dan Snyder - founder of the Association of Private Lenders.

Variable Annuities - The Uncensored Version

With all the investments out there such as mutual funds, exchange traded funds, hedge funds, stocks, bonds, etc., why then the huge attraction to variable annuities? You cant pick up a newspaper, turn on the television, listen to the radio, or have a conversation about investments without the subject of variable annuities (VAs) coming up. So, whats all the buzz about? Well, ironically, all of the hype thats pushed to the forefront is almost always negative. Nevertheless, the latest estimates are that close to one trillion dollars are invested in VAs. What does a statistic like that signal to investors? It tells you that something good must be happening, right? Why would so much money be invested in variable annuities if people werent benefiting in one way or another?

Well, heres the inside scoop: Although several variable annuities are great additions to many investment portfolios, certain ones at times can be detrimental to the overall health of any portfolio. This can be due to potential lengthy lock-up periods, high expense ratios, and possible conflicts of interest that can arise because of the often high commissions paid by the investor. As you know, anytime large commissions are involved in sales, misrepresentation, lack of disclosure, and other types of foul play can be involved as well. Some of the people that are selling VAs see it as an opportunity to make a fast buck.

Unfortunately, in the process, trusting investors not well versed in this area of expertise can find themselves on the short end of the stick. When this happens, the real tragedy is the major group affected by it; thats typically seniors 50-80 years old who are gearing up for, or are already in, retirement. Both groups are almost always in a position where money saved up can rarely be recovered by the remaining years of work or through returning to the work force and starting over again. And remember, in a lot of cases, its their lifelong savings were talking about! This is another classic example of the One bad apple theory: A few brokers/agents illegally putting their own selfish interests first, ahead of the well being of their clients. And unfortunately, this has rung true, and has been a rapidly growing phenomenon.

Heres the good news: A lot of these potentially abusive policies have been sold outside of New York State, where the insurance laws are more lenient. The way this works is each state usually has its own rules and regulations governing the insurance industry. New York State is one of the most highly regulated and toughest states in the country to do business in for the insurance companies. For an insurance company to do business here, they must agree to participate in the New York state insurance pool. This pool helps insulate investors from the risk of losing their money in the event their insurance company should go bankrupt. Well, that protects you if the insurance company screws up, but that doesnt seem to be where the problem lies today. What we see as the major problem is this: How can investors today protect themselves from getting ripped off or ill advised from one of these bad apple annuity salespeople?

First, it probably makes sense for us to give you a little background on what a variable annuity is. A variable annuity contract allows you to allocate your premium among a number of investment portfolios, consisting of any mixture of stocks, fixed income instruments or money market accounts. Your contract value will reflect the performance of the underlying investments held in those portfolios, minus the contract expenses, and is subject to market risk, including the potential loss of the principal invested. A variable annuity is a personal retirement account that brings together the best features of managed investments and insurance. Your money accumulates tax-deferred in professionally managed funds until withdrawn. And, you can feel safer knowing your beneficiaries will receive benefits upon death. In addition, guaranteed income and principal protection can be purchased within the contract. After everything our country has been through over the last few years, many investors are willing to pay for these guarantees. Because of the potential to have tax-deferred growth with guarantees in place, more and more people are looking to variable annuities as a panacea to stock market uncertainty. Heres a case that just recently crossed our path.

When Mr. and Mrs. Jones came into our office inquiring about variable annuities a few weeks ago, with all the buzz previously discussed, we expected them to be more thoroughly versed on the topic. During our consultation, we found out very quickly that they were not. They had violated one of the cardinal rules of investing. Mr. and Mrs. Jones had not educated themselves on the topic of variable annuities. They actually said the reason theyre interested in variable annuities is because their friends have them and continuously rant and rave about how good they are. We see it in our business often; investment decisions, regardless if correct or incorrect, being made for the wrong reasons. It ends up that the Jones are a great example of a situation where we feel that a variable annuity would be a fitting investment that would assist them in meeting their needs and financial goals.

Heres why: Mr. and Mrs. Jones are both 68 years old and have been married for 39 years. Theyve both just recently retired, and are currently receiving monthly social security and pension payments. Between the two of them, their monthly intake is $4,500. Their regular expenses average at $5,000, with an additional $500-$1,000 spent for miscellaneous reasons. Because of the $1,000-$1,500 monthly shortfall that usually exists, their main need is to supplement the payments they receive with an additional income. This supplement would be essential in helping them to meet their necessary expenses and have some money left over for travel, entertainment and lifes unpredictable expenses that seem to have a habit of always coming up. They were interested in choosing an investment path that would give their money a chance to grow rather aggressively, tax-deferred, while minimizing downside risk and maintaining principal protection, while concurrently serving as a reliable income source (a case not unfamiliar to us). Because of the needs, risk tolerances, and financial and personal situation of Mr. and Mrs. Jones, the variable annuity not only was a good fit, but the best we could figure.

When shopping for annuities, or any type of investment for that matter, the first thing we recommend doing is to make a list of your needs, goals, time frame, and desired investment amount. That is the first thing we did with Mr. and Mrs. Jones when they walked into our office. Even before discussing annuity types and insurance company ratings, you need to have a plan with goals clearly laid out. We usually create a grid for comparative purposes where each category can get a checkmark and weighting so that priorities can be determined. Some important categories to analyze when dealing with variable annuities are expense ratios, lock-up period lengths, annual withdrawal limits, penalties, surrender charges, and age constraints for certain benefits within the annuity. Benefits often discussed are guaranteed income options, up front bonus options, stepped-up death benefits, etc. That is why it is important to take the approach that allows one to visually understand and weigh what you are getting for the amount youre paying.

There are many reasons why investors, like Mr. and Mrs. Jones, may choose to go with a variable annuity rather than more typical types of safe investments, such as bonds. Although bonds can serve as a stable source of fixed income under many circumstances, the returns are often not enough for many. With the 10-year Treasury bond currently yielding a return of 3.9%, versus the 6.5% the S & P 500 is yielding, its no wonder more people are turning to more aggressive options that strive to take advantage of upswings in the market, while providing some type of protection on the downside. That is when the variable annuity becomes an option you may want to explore. But with more VAs to choose from than there are pain relievers on a drugstore shelf, how can you choose the annuity that is most appropriate for you, if it is appropriate at all in the first place?

Well, the answer lies in education. Weve found out over time that there is no single best way for one to educate himself/herself. Whether its reading a book about VAs at a local bookstore on a Saturday afternoon, attending a two-day seminar, listening to a set of audio tapes in the car during your drive in to work, or enlisting the help of a trusted advisor; any of the above methods, in addition to many others, can be extremely helpful in getting familiarized with the wide array of investment vehicles available to you. In this case, the clich knowledge is power proves to be very true. Its the difference between developing a general understanding of what are fitting investments that will help you reach your financial goals, or just getting lost in the mix. This idea has been proven to us over and over again.

When the client is informed and has all of his or her questions answered, not only does their satisfaction increase, but also their comfort level with the decisions that are made. Some investors might feel a little intimidated by this process, but thats ok and perfectly natural. There are literally thousands of different routes one can take when investing, and its not always easy to know which one is in your best interest, but that is why a trusted advisor is there. After youve gained a feel for what is available out there and what youre looking for, then its often wise to consult with a trusted advisor in order to have a professional opinion that is keeping your best interests in mind.

In the end, a good indicator of how qualified the annuity specialist youre dealing with is would be your gut feeling. This should be the final deciding factor, and arguably the most important. If Mr. and Mrs. Jones can look this person in the eye and feel as though he or she is keeping their best interests in mind, theyll most likely feel good about the idea of working with this person. If everything else mentioned above checks out ok, chances are the Jones will be comfortable with the decision they come to make. This in turn usually leads to a feeling of strong gratification when the expected outcome of your investment decision becomes a reality.

Don Conrad is president of Conrad Capital Management, an independent registered investment advisor, in Melville, New York. Can be reached by phone: (631) 439-7878 or email:

Don started his career in the late 1970s at a nationally recognized mutual fund company and was recruited after three years by E.F. Hutton Company to work in the consumer retail division. During his thirteen-year tenure there, he spent two years specializing in and trading the 30-year treasury bond. For the last five years, he served as a senior vice president focusing his efforts in the Consulting Services division, maintaining offices in both Long Island and Manhattan.

In 1993, he was recruited by PaineWebber as a Senior Vice President in the consumer retail division. In addition to managing his clients assets, he was asked by senior management to conduct a nationwide tour to train financial consultants in the Consulting Services division. Don also made a video on the use of advanced technology in the financial services industry. This video was distributed to PaineWebber offices internationally.

After almost five years at PaineWebber, Don decided to pursue his dream by starting Conrad Capital Management in order to offer his clients more choices and flexibility.