Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Investing Strategies

How to Invest in a Money Market

Posted June 3, 2011 by Caroline Leah

A money market account is actually a kind of mutual fund that functions almost like a savings account the main difference being the money market accounts pay rates of interest higher than the usual savings account. You can trade with the short term government and corporate bonds when you open an account with money market. The money market funds however have variable rates of interest as the make up of money changes according to the maturity of the short term bonds.

They are available in banks, credit unions and other financial institutions too. There are also money market funds that are tax exempted. You however need to be careful while investing in a money market. Here are a few tips and suggestions to keep in mind.

• Before you start off with investing in money market accounts, you need to     first understand how the money market funds or accounts work. Only a thorough knowledge helps brings success in the field of investment.
• Learn all the terms that are related to the money market by reviewing the glossary that is made available on the internet for the beginners.
• There is quite a difference between the money market funds and money market accounts. Learn the difference and then choose which one is best suited for your needs and you can either make short term investments or long term too.
• Gather details about the various popular money market funds including the minimum requirements for the investment. Make sure you have the required capital to make the investment before deciding where to invest money.
• You can perform the research about the money market funds and accounts online and look out for the impressive looking ones. (more…)

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Are ETF’s Right for You?

Posted May 25, 2011 by Bernz

Taking the time to make sure you are spending your hard earned money wisely is very important in every aspect of life and money spent on investments should be no different. If you have done any kind of investing before now, it is likely that you have spent some time researching which stocks, bonds, etc. to invest in, but you may now be looking at trying something new. ETFs, or Exchange Traded Funds, may be the right choice for you, but you must make sure that you research this investment as well so that you can be confident that you are investing your money well.

An Exchange Traded Fund is an investment fund similar to a mutual fund that holds stocks as assets. There are many different reasons that so many people find EFTs desirable and one of the big ones is that they carry relative low costs. If you are looking for something that is similar to stocks, then an ETF may the right choice for you. One of the other benefits that many investors like about ETFs is that they may be taxed at a lower rate than other investments. When you are looking to invest your money in something, it is always a good idea to keep all of the costs associated with the investment as low as possible.

You should also keep in mind that the question of whether ETFs are right for you may not be the question that you want to ask, but what you should be asking is “which ETF is right for me?” There are many different kinds to choose from and if you are not an expert in the financial world, you should make sure you understand what each one can offer you so that you can choose the best ones to fit your needs.
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What are Municipal Bonds?

Posted May 16, 2011 by Bernz

If you are familiar with investing at all, you already know that there are two basic types of investments. The first type of investment that many people hear about on television and from other news media is a stock. Buying stock in a company is like becoming a part owner of the company. If the company does well, you can make money, but you also risk losing money if the company does not do so well. While stocks may be great investments for some people, they are not the right choice for everyone and every investment situation.

The second type of investment is a bond which is very different from a stock. While a stock is like purchasing part of a company, a bond is more like lending your money to the issuer, possibly a company or an organization. Bonds are also different because they are bought with an end date in mind. With a bond, you will not see the value increase or decrease, but you will be paid interest during the term of the bond.

There are a few different kinds of bonds, but one of the most popular kinds of bonds for investors, especially those in the higher tax brackets, is a municipal bond. Local governments issue municipal bonds which are the preferred choice for some investors because they are tax exempt unlike other bonds. If you are interested in purchasing a municipal bond, you will not have to pay tax, either to the state government or federal government, on the interest you earn from the bond.
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Do I Still Need a 401k?

Posted February 13, 2011 by Bernz

After hearing about the severe financial hit many people have taken with the recent financial turn, and with stories of people losing all their investment in their 401k many people wonder if a 401k is still a sound financial instrument.  From the start let’s point out what a 401k is, an investment strategy designed to help you supplement your income during retirement.  A 401k is not guaranteed, just as stocks are not guaranteed, but this in and of itself does not mean that a 401k is really a risky place to invest your money.

The presumed tax benefits of a 401k are one of the major reasons why people continue to invest at least part of their money in a qualified retirement account.  The amount that you divert into the 401k is not taxed, and over the course of the 30 years or so that a 401k is designed to hold your money you can accrue a relatively large savings on your income tax.

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An Introduction to Investing in the Stock Market

Posted February 6, 2011 by Bernz

The economy is very different from what it was a decade ago, and all signs point to the fact that the economy will never be exactly the same.  In a perfect world the stock market would be predictable;  specific market conditions would correspond to specific results.  The stock market is nowhere near perfect though, and as a result a thorough understanding of how market conditions effects profit margins is very beneficial.  Global competition in the marketplace has introduced a whole new level of complexity to the process of investing, and items that were sure fire investments in the past no longer have that status.

Investing in the stock market at its core is a numbers game, but to be truly successful in the market it requires an understanding of the motivations behind why companies make certain financial moves.  There is a fine line between insider trading and being well-informed about a trade prospect.  The well-informed investor knows how to spread assets over a variety of different investments; diversifying is essential to saying competitive in the stop market.

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Posted in Investing Basics, Investing Strategies, Stock Market Investing, Stock Watch | 1 Comment »