Daily Investment Tips

If you read the news in 2011, most headlines was about how bad things were for investors, falling stock markets and European debt crisis. But the true is even in this crisis there were areas where investors made money. Investors who bought Junk bonds of companies such as Ford saw good returns, some stocks even out performed the market in 2011 (check this video of best performing stocks in 2011). The lesson here is, if you look at individual stocks you are likely to find value and opportunities.

Best Opportunities to Invest your Money In 2012

Facebook IPO in 2012

You can’t talk of investment opportunities in 2012 without mentioning Facebook. 2012 is the year this social network will go public. I have big feeling Facebook is another Google: it will keep getting bigger and bigger. Other tech IPOs in 2011, Linkend and Groupon, opened high on first day but came to down later. The only people who made money were the early investors and the few who were lucky to buy the IPO.

Buying Short Term Bonds

As rates go up, the value of bonds that have long dated maturities go down, sometimes significantly. For that reason, stick with short term bonds (both government and corporate), Inflation Linked Bonds (TIPs) and Floating Rate Notes. Once rates go up — and they have nowhere to go but up — gradually change those holdings into longer term bonds.

Buying Under Water Properties

There are millions of mortgages across US that are under water, the value of this properties have fallen low and the return on investment is now high. If you have enough cash and you buy this properties, you can get a good return renting out the properties.

Investing In Companies Catering in Luxury Goods

2011 was the year the middle class disappeared. Companies that target the upper end of the market have continued to do well. Stats indicate the number of super rich people has gone up, these group continues to spend on luxury cars, boats etc. Companies like Lululemon Athletica (targeting Yoga lovers) have continued to see year-over-year earnings growth at or above 50%.

Investing in Low End companies

As the middle class disappears, the majority of these people are finding themselves in the lower end. As numbers of low income people continue to swell, discount retailers such as Wal Mart will continue to do well.

To find best opportunities to invest your Money In 2012 you need to look at individual stocks and not the whole market.

written by Constantine Njeru \\ tags: Athletica, Best Investments, Best Performing Stocks, Cars Boats, Debt Crisis, Facebook, Google, Inflation Linked Bonds, investing 2012, investment 2012, Investment Opportunities, Ipo, Junk Bonds, Linkend, Luxury Cars, Luxury Goods, Maturities, Middle Class, opportunities 2012, Return On Investment, Stock Markets, Term Bonds

Long term investing is the secret to how Warren Buffet makes money. A $10,000 investment in Berkshire Hathaway in 1965, the year Warren Buffett started the company, would have grow to be worth nearly $30 million by 2005.

Buffett’s long term investing strategy is arguably the most successful ever. No one has come close to matching his annual stock market returns.

Warren Buffet Secret  of long term investing is summed up by the following three quotes by him:-

• I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
• Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
• Our favourite holding period is forever.

More Warren Tips For Long Term Investing

• Always invest for the long term.
• Does the business have favourable long term prospects
• Do not take yearly results too seriously. Instead, focus on four or five-year averages.
• As far as you are concerned, the stock market does not exist. Ignore it.
• Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.

Long Term Investing

written by Constantine Njeru \\ tags: Berkshire Hathaway, Holding Period, Invest, Investing Strategy, Quotes, Stock Market Returns, Warren Buffett

Words of wisdom from Mark Cuban, billionaire owner of the Dallas Mavericks:

 . . . Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write. Your 2nd thought will be “what a great problem to have,” and your 3rd should be a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you. . . . While some people might find it distasteful to pay taxes. I don’t. I find it Patriotic.

I’m not saying that the government’s use of tax money is the most efficient use of our hard-earned capital. It obviously is not. In a perfect world, there would be a better option. We don’t live in a perfect world. We don’t live in a perfect time. We live in a time where the government plays a big role in an effort to help lead us out this Great Recession. That’s reality.

So I will repeat my point. Get out there and make a boatload of money. Enjoy the shit out your money. Pay your taxes.

written by Constantine Njeru \\ tags: Billionaire Owner, Boatload, Dallas Mavericks, Efficient Use, First Thought, Mark Cuban, Owner Of The Dallas Mavericks, Pay Taxes, Paying Taxes, Paying Your Taxes, Perfect Time, Perfect World, Recession, Tax Money, Words Of Wisdom

Life insurance is often considered as an investment that one makes to secure his future and that of his family. There are two common types of life insurance, the term and whole life insurance. Term insurance insures’ an individual for a specific period of time like 20 or 30 years. This has little if any benefit since the sum insured is only payable after the event of death of the insured within the insured period. However, the whole life insurance policy covers the insured for his lifetime and in case death occurs then his beneficiaries receive the sum assured by the insurer.

Payment of Premiums

Whole life insurance is a good way of securing your family’s future in the event of your death. The amount of premiums to be paid varies depending on factors such as age. A young person taking a whole life insurance policy will be required to pay a less amount for his premiums while a one who is in his old age will be required more for his premiums.

Another factor determining amount is the health of the insured. A healthy person will be required to pay fewer premiums compared to a person with unstable health condition. The amount of premiums paid will also vary from one insurance company to another depending on their rates and interests. One with a high income earning can also choose to increase the value of his premiums hence the amount assured after maturity of the policy will be higher.

Why Invest in Whole Life Insurance

There are many benefits that come with taking a whole life insurance policy. Although most of these will not directly benefit you as the policy holder, they will be of great importance to your family or the beneficiaries after your death. Here are some benefits of whole life insurance.

o It offers financial security to your family. In case of death, one is assured that their spouse and children will continue living a comfortable life afterwards. This is usually the main reason people take this policy and is quite reasonable.

o It can be used for a loan. A life insurance policy holder can take a loan out against the cash value. In this case the money taken belongs to him therefore he will not be required any interest or pay back the amount taken.

o It offers tax benefits to beneficiaries. The insured amount in most cases is free from income tax to your named beneficiaries.

o The amount assured can be used to pay off mortgage loan in the case of death of the insured party.

o A whole life insurance policy can be used to cover expenses after death of the insured. These include funeral costs or family expenses such as the children’s college funding.

Having a life insurance is with no doubt a good investment strategy not only to your benefit but also to those you leave behind. It saves you the worry of wondering what will happen to your family and loved ones once the time of your death comes.

Article courtesy of auto insurance.

written by Constantine Njeru \\ tags: Beneficiaries, Benefit, Case Of Death, Financial Security, Health Condition, Healthy Person, Insurance, Insurance Company, Insurance Life, Insurer, Invest, Investing In Life, Life Insurance Policy, Lifetime, Maturity, Period Of Time, Premiums, Term Insurance, Whole Life Insurance, Young Person

In a world where many fear the economic future of American economy, Warren Buffet is confident of the future.

Warren Buffett said in his 2011 letter to Berkshire Hathaway shareholders Saturday that he still believes America’s best days are ahead.

Highlights From the Warren Buffet Shareholder Letter 2011

Don’t trust companies financial statement, do your own homework – Buffett urged investors not to focus on the net income figures that companies report because they are easily manipulated through accounting tricks or by selling investments.

Dangers of investing in borrowed money – “When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive,” Buffett said. “Once having profited from its wonders, very few people retreat to more conservative practices.”

This is the time to invest – He plans to put to use Berkshire Hathaway $38 Billion cash hoard. “We’re prepared,” Buffett wrote. “Our elephant gun has been reloaded, and my trigger finger is itchy.”

Housing is set for recovery- He said a housing recovery will likely begin within the next year, which would help the economy and several Berkshire subsidiaries, including ones that make carpets and bricks.

To download a copy go to Berkshire Hathaway Shareholder Letters.

written by Constantine Njeru \\ tags: American Economy, Berkshire Hathaway, Berkshire Hathaway Shareholders, Bricks, Carpets, Elephant, Elephant Gun, Financial Statement, Hoard, Homework, Leverage, Many Fear, Neighbors, Net Income, Shareholder Letters, Subsidiaries, Trigger Finger, Trust Companies, Warren Buffet Shareholder Letter, Warren Buffett

Billionaire hedge fund manager John Paulson will forever be remembered for $4 billions he made in 2007. When the housing market was burning the money manager was making billions.

The latest news is John Paulson did it again by earning an estimated $5 billion in 2010 thanks mainly to bets the economy would recover. This is better than the $4 billion haul made off the subprime bet.

How John Paulson Makes Money

John Paulson runs his own hedge fund investment firm, Paulson & Co. Inc. (PCI). It is an employee owned hedge fund sponsor, primarily providing services to pooled investment vehicles. He is earns money through commissions on funds under management plus a share of profits.

John Paulson Investing Strategy

The firm manages separate client-focused portfolios, employing merger arbitrage, long/short, and event-driven strategy to make its investments. Paulson & Co. Inc. utilizes fundamental analysis to make its investments, benchmarking the performance of its investments against the S&P 500 Index.

John Paulson Investment Philosophy

In a Wallstreet Journal interview this is how he summarizes his investment philosophy: “The flexibility of having long and short exposure across the capital structure allows us to optimize performance across market cycles. Our goals are capital preservation, above average returns over the long term, and low correlation to the markets.” As the market recovers from its shortfalls of the past years, Paulson is betting on strong economic growth in the recovery: “it is time to be in the stock market,” he says, and that now is not the time “to be under-invested”.

written by Constantine Njeru \\ tags: Amp, Bet, Bets, Billionaire, Billions, Capital Preservation, Capital Structure, Commissions, Driven Strategy, Economy, Fund Investment, Fundamental Analysis, Hedge Fund Manager, Housing Market, Investment Firm, Investment Philosophy, Investment Vehicles, Investments, John Paulson, Market Cycles, Merger Arbitrage, Money Manager, Portfolios, Profits, Shortfalls, Stock Market, Wallstreet Journal

Michael Covel is the author of best selling books Turtle Trader, Trend following and latest Trend Following Learn How to Make Money in Up or down market. Michael Covel trading idea is what matters in evaluating stock is the price. If the price is going up, buy ; Just follow the trend whether that trend is up or down.

Michael Covel trading tips

1. IPOs are for gamblers, unless you are an insider.
2. No one knows what the stock market ceiling will be. If they say so, they are making it up. Buy only now if you know exactly how much you can afford to lose.
3. No one can predict market direction, so you have to be ready to exit and protect your capital. This all requires a trading plan well in advance of entering the market.
4. The main drivers of sentiment in the stock market is herd behavior, not fundamentals [even though they may say its fundamentals]. People want to get rich fast, so they jump on board [with no exit planned]. That usually ends badly.

Michael Covel website is full of trading and investing resources. You can vist Michael Covel website to read finance articles or even buy one of his books or buy one of his trading course.

written by Constantine Njeru \\ tags: Best Selling Books, Finance Articles, Gamblers, Herd Behavior, How To Make Money, Insider, Investing Resources, Ipos, Market Direction, Michael Covel, Sentiment, Stock Market, Turtle, Turtle Trader

The best way to play the stock market is to seek information that you can help you understand more about companies, industry and economy. Seeking only tips will not get you far because chances are you may act on a bad tip.

I like the following websites for investment advice. They are parked with information that I use to better understand the markets.

Businessweek Online.

I have been a subscriber since I first opened my good old yahoo email account. I have never been disappointed. The recent merger with bloomberg will only make them stronger.

UK Financial Times Online.

To access the full articles you need you need to be a paid up member. They have free account that limits you to read 10 articles a month. But they will send you headlines of all top business news.

Wallstreet Journal Online.

The biggest business publication in the world. With such a large financial support you can be assured they will find business information that matters.

Yahoo Finance.

The beauty of Yahoo Finance is syndicated feed they run on the site. They have articles written from top finance blogs.

Google Finance.

This is not a single site but an aggregator of business news. They have fabulous charts that can help you track trends over a period of time.

written by Constantine Njeru \\ tags: Aggregator, Business Information, Business Publication, Businessweek, Economy, Financial Times, Google, Headlines, Investment Advice, Merger, Period Of Time, Single Site, Stock Market, Subscriber, Top Business News, Top Finance, Uk Financial Times, Yahoo, Yahoo Email Account

There are many offshore investing scams floating around the internet.

Offshore scam artist have beautiful websites, luxurious literature, and “educational” tutorials.

They ask investors to put money in non-existent companies inside foreign countries. They promise investors high returns and tax-free results with absolutely no danger.

Offshore scam artist use sophisticated lingo such as “bank debentures” or “standby letters of credit,” complicated-sounding aspects like “offshore fund leasing,” and inexplicable instruments similar to “interbank trading” and also “seasoned notes.”

Tutorials are quite often held in thrilling areas and cost thousands of dollars to go to; marketers tout “connections” and a assurance of “no taxes” on your investment

Because this scams are outside the jurisdiction of united states, law- enforcement organizations simply cannot investigate when investors cry foul.

written by Constantine Njeru \\ tags: Bank Debentures, Educational Tutorials, Foreign Countries, Fund Leasing, Interbank, Investment Scams, Investors, Jurisdiction, Law Enforcement Organizations, Letters Of Credit, Lingo, Literature, Marketers, Money, Offshore Fund, Offshore Investing, Scam Artist, Scams, Standby Letters Of Credit, Thousands Of Dollars

I was over at Amazon online market and browsed some of the books on market Psychology. I read the reviews and the following chart sums up the psychology of the market.

Copyright wallstreetfoollies.com

Image source wallstreetfollies

Some of the books review on Market Psychology I read were

1. Art of Contrary thinking by Humprey Bancroft Neil

2. The Crowd : A study of popular minds by Gustva Le Bon

3. Speculation as a fine art of life by Dickson G Watts

4. Why You Win or Lose : The Psychology of speculation by Fred C. Kelly

5. The Nature of Risk by Justin Marris

written by Constantine Njeru \\ tags: Amazon, Art Of Contrary Thinking, Art Of Life, Bancroft, Books Review, Books Reviews, Crowd, Dickson G Watts, Fine Art, Fred C Kelly, Humprey, Market Psychology, Marris, Psychology Books, Risk, Speculation, Stock Market, Sums