Daily Investment Tips

Investing money wisely has never been easy, those who say it is easy only talk about investing but never try investing.The following investing tips will help you in your dream of investing money wisely.

1. Learn About Investing

Knowledge is power. Learn about finances, economy, reading and analysing company accounts. You can self educate yourself or pay for investing classes. The more you understand about how investment work the easier it will be to make an informed decision.

2. Don’t put all your eggs in one basket.

This has to be the number one rule of investing money wisely. Diversify your investments. Make a Proper Asset Allocation (Mix of bonds, stocks and Cash)

3. Open an Investment account

Open a bank account where every month you deposit a percentage of your monthly income. The money in this account should be used only for making investments.

4. Ignore Markets Up and Down

Markets are volatile and will have its swings the best thing is to ignore them. Nobody can predict what will happen in the short term, but history has taught us that over the long term markets move upwards.

5. Ignore The Noise

Everyday analysts and economists make predictions, estimates and give their view on how things will go, the media covers these reports extensively. The problem is that more often than not these reports are contradictory and confusing to the investors. Conclusion: Just ignore the noise.

6.Make changes as needed

Things change; you grow older and closer to retirement, you will have children, get a raise/promotion etc. Your portfolio should not be static and needs to change as your circumstances change. Make changes as needed.

7. Buy Index Fund

If all the above sound confusing just buy an index fund that tracks major indices. History has taught us that over the long term markets move upwards.

written by Constantine Njeru \\ tags: Analysing, Bonds, Buy Index Fund, Circumstances, Company Accounts, Economists, Eggs In One Basket, Estimates, Investing Money, Investing Tips, Investment Account, Investment Work, Knowledge Is Power, Major Indices, Money Investing, Money Investments, Proper Asset Allocation, Retirement, Swings, Term Markets

Richard Russell says gold is on its way to $6,000:

This time, gold has, so far, only multiplied five times — from 255 to 1430. If gold was to repeat its 1970 performance and multiply 24 times, it would rise to over 6,000. But there’s a difference between the two gold bull markets: This time the other half of the world’s population (China, India, Asia) has been added to the mix. And this time, the very viability of fiat currencies is a part of the picture.

Richard Russell has since 1958 been editor-publisher of the Dow Theory Letters, which “cover the U.S. stock market, foreign markets, bonds, precious metals, commodities, economics — plus Russell’s widely-followed comments and observations and stock market philosophy.

Source: Kingworldnews.

written by Constantine Njeru \\ tags: Bonds, Bull Markets, China, Commodities, Dow Theory Letters, Economics, Editor Publisher, Fiat, Fiat Currencies, Foreign Markets, Half Of The World, India Asia, Market Philosophy, Population, Precious Metals, Richard Russell, Russell Gold, Time Gold, U S Stock Market, Viability

Bill Gross, Fund manager of PIMCO, announced in March 2011 that the world’s biggest bond fund has cut its holdings of US government-related debt to zero.

The move to exit US government debt is because the fund is forecasting a rise in US bond yield. Such rises would hit the value of holdings of bonds as their price move inversely to their yields.

This was the quote from Bill Gross:-

“Yields may have to go higher, maybe even much higher to attract buying interest,”

written by Constantine Njeru \\ tags: Bill Gross, Bond Fund, Bond Yield, Bonds, Government Debt, Pimco, Price Move, Quote

Bill Miller has offered his  stock picks. Speaking on CNBC he was bullish about the following stocks.

1. IBM
2. Hewlett Packard
3. Microsoft
4. Intel

For some time now Bill Miller has been recommending large caps stock. The legendary investor has beaten market averages for 15 years straight.

This was his bullish message to investors back in August 2010

U.S. large capitalization stocks represent a once in a lifetime opportunity in my opinion to buy the best quality companies in the world at bargain prices. The last time they were this cheap relative to bonds was 1951. I was 1 year old then, but did not have then sufficient sentience or capital to invest. I do now, and if you are reading this, so do you.

Bill Miller has measured stocks in terms of historical PE ratio, dividend yield & relative to bonds and he concluded stocks are cheap.

written by Constantine Njeru \\ tags: Amp, Bargain Prices, Best Quality, Bill Miller, Bonds, Capitalization Stocks, Caps, Cnbc, Dividend Yield, Hewlett Packard, Intel, Investor, Investors, Last Time, Lifetime Opportunity, Market Averages, Pe Ratio, Quality Companies, Sentience, Stock Picks

Bill Gross, director of Pimco, best known as the most successful bond investor of his generation, has given his thoughts on how Federal Reserve plan to pump money into the US Economy will affect the bond market in the future.

He has termed the move by Federal Reserve bank a giant ponzi scheme. Yes, the entire federal money system is a Ponzi scheme, but this isn’t news. This system has been in place for about 100 years.

The Future of Bond Market Prices and Interest Rates

The actions of the Fed, led by Chairman Ben Bernanke, will “likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment,” he wrote in a commentary posted on Pimco’s website Wednesday. See Gross’s full commentary.

Check writing in the trillions is not a bondholder’s friend; it is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme,” he said.

The End Game

Such a plan “raises bond prices to create the illusion of high annual returns, but ultimately it reaches a dead-end where those prices can no longer go up,” Gross wrote. “Having arrived at its destination, the market then offers near 0% returns and a picking of the creditor’s pocket via inflation and negative real interest rates.”

written by Constantine Njeru \\ tags: 100 Years, Ben Bernanke, Bill Gross, Bond Market, Bond Prices, Bondholder, Bonds, Creditor, End Game, Equity Managers, Federal Money, Federal Reserve, Federal Reserve Bank, Illusion, Inflation, Interest Rates, Money System, Ponzi scheme, T News, Trillions

Warren Buffet is recommending buying or investing in stocks instead on bonds. From a Motley Fool blog post:-

Warren Buffett said this week that investors that are buying bonds at current yields are “making a mistake,” offering the following investment advice on asset allocation:

“It’s quite clear that stocks are cheaper than bonds,” Buffett said. “I can’t imagine anyone having bonds in their portfolio when they can own equities, a diversified group of equities.”

written by Constantine Njeru \\ tags: Asset Allocation, Blog, Bonds, Current Yields, Diversified Group, Investing In Stocks, Investment Advice, Investment Recommendation, Investors, Mistake, Motley Fool, Warren Buffet, Warren Buffett

Roger Coleman, Morgan Stanley Smith Barney was ranked number one on 2010 Barron list of top 100 financial advisors in the state of New York.

Roger Coleman Investing advice

Roger Coleman preaches diversification, and has his managers following a Morgan Stanley model for global allocation: about 30% in bonds; 45% in equities; and 25% in alternative investments.

written by Constantine Njeru \\ tags: Alternative Investments, Barron, Bonds, Diversification, Financial Advice, Financial Advisors, Financial Investment, Global Allocation, Investing Advice, Investment Tips, Morgan Stanley, Roger Coleman, Roger Smith, Smith Barney, Stanley Smith, State Of New York

Yahoo finance have an interesting interview with Michael Pento, senior market strategist at Delta Global Advisors. The man has come up with some neat mathematical calculations on why Americas’ debt is a disaster waiting to happen.

I have always thought uncle Sam is too big to fail but after reading Michael Pento interview the US could be another Greece tragedy or may be, another Argentina.

Using Treasury Department’s recent U.S debt estimates that showed total U.S. debt will top $13.6 trillion this year and rise to 102% of GDP by 2015. Moreover, the publicly traded debt (debt excluding intra-governmental obligations) will rise to $14 trillion by 2015, up from “just” $7.5 trillion in 2009.

Mr Pento then calculates, At $14 trillion, the interest payments on the public debt will total about $1 trillion in 2015, he continues; even assuming solid growth and low inflation, that would equal about 30% of total government revenue. “What do you think that does to our bond market?,” Pento wonders. “It leads to a dollar crisis and a bond market crisis. That’s why gold refuses to go down. ”

If Pento is right then expect the yield on US treasuries to rise. Investors in bonds could see the value of the bonds fall.

Read the rest at the Source Yahoo Finance

written by Constantine Njeru \\ tags: Bond Market, Bonds, Debt Crisis, Dollar Crisis, Gdp, Global Advisors, Government Revenue, Governmental Obligations, Inflation, Interest Payments, Market Crisis, Market Strategist, Mathematical Calculations, Michael Pento, Public Debt, Treasuries, Treasury Department, Trillion, Uncle Sam, Yahoo Finance

We know Greece in a financial hole and investors are already betting that Greece will default on its bonds sooner or later. The investosr who think a default akin to Russian default in the 1990s is on the cards are shorting Greece bonds.

When Greece Economic minister was asked by a BBC report about the possibility of a default this is what he said, They will lose their shirt!

But the reality on the ground is that Greece is a sinking ship. They are running out of time, they need to find 9 billion euros by 19th May just to pay off due debt. The public is strongly opposed to any attempts by the Government to cut spending to raise funds. They cant borrow money, lenders are demanding reforms first before any new lending. The greece government is dead broke.

Worse still, on April 26, Greece debt was downgraded to junk status by rating agency standard & poor.  In the report S &Pwarned holders of Greek debt that they only had an “average chance” of between 30% and 50% of getting their money back in the event of a debt restructuring or default.

written by Constantine Njeru \\ tags: 1990s, Amp, Attempts, Bbc, Bbc Report, Betting, Bonds, Cards, Debt Restructuring, Financial Hole, Greece, Greece Government, Investor, Investors, Junk Status, Money Lenders, Running Out Of Time, Russian Default, Sinking Ship