Developing a Plan: The Basis of Successful Investing

Warren E. Buffett offers the following advice on the qualities of a successful investor. Buffett essentially suggests that a successful investor does not need an extraordinarily high IQ, exceptional business acumen, or inside information. To enjoy a lifetime of successful investing, you need a solid decision-making framework and the ability to maintain your emotions.A successful investment strategy requires a thoughtful plan. Developing a plan is not difficult, but staying with it during times of uncertainty and events that seem to counter you plan’s strategy is often difficult. This tutorial discusses the necessity of establishing a trading plan, what investment options best suit your needs, and the challenges you could encounter if you don’t have a plan.The benefits of developing a trading planYou can establish optimal circumstances for experiencing solid investment growth if you stick to your plan despite opposing popular opinion, current trends, or analysts’ forecasts. Develop your investment plan and focus on your long-term goals and objectives.Maintain focus on your planAll financial markets can be erratic. It has experienced significant fluctuations in business cycles, inflation, and interest rates, along with economical recessions throughout the past century. The 1990s experienced a surge of growth due to the bull market pushing the Dow Jones industrial average (DIJA) up 300 percent. This economic growth was accompanied by low interest rates and inflation. During this time, an extraordinary number of Internet-based technology firms were created due to the increased popularity of online commerce and other computer-reliant businesses. This growth was rapid and a downturn occurred just as fast. Between 2000 and 2002, the DIJA dropped 38 percent, triggering a massive sell-off of technology stocks which kept indexes in a depressed state well into the middle of 2001. Large-scale corporate accounting scandals contributed to the downturn. Then in the fall of 2001, the United States suffered a catastrophic terrorist attack that sent the nation into a high level of uncertainty and further weakened the strength of the market.These are the kinds of events that can tax your emotions in terms of your investment strategies. It’s times like these that it is imperative that you have a plan and stick to it. This is when you establish a long-term focus on your objectives. Toward the end of 2002 through 2005, the DJIA rose 44 percent. Investors who let their emotions govern their trading strategies and sold off all their positions missed out on this upturn.The three deadly sins and how to avoid themThe three emotions that accompany trading are fear, hope, and greed. When prices plunge, fear compels you to sell low without reviewing your position. Under these circumstances, you should revisit the original reasons for your investments and determine if they have changed. For example, you might focus on the short term and immediately sell when the price drops below its intrinsic value. In this case, you could miss out if the price recovers.An investment strategy that is based on hope might compel you to buy certain stocks based on the hope that a company’s future performance will reflect on their past performance. This is what occurred during the surge of the Internet-based, dot-com companies during the late 1990s. This is where you need to devote your research into a company’s fundamentals and less on their past performance when determining the worth of their stock. Investing primarily on hope could have you ending up with an overvalued stock with more risk of a loss than a gain.The greed emotion can distort your rationale for certain investments. It can compel you to hold onto a position for too long. If your plan is to hold out a little longer to gain a few percentage points, your position could backfire and result in a loss. Again, in the late 1990s, investors were enjoying double-digit gains on their Internet-company stocks. Instead of scaling back on their investments, many individuals held onto their positions with the hope that the prices would keep going up. Even when the prices were beginning to drop, investors held out hoping that their stocks would rally. Unfortunately, the rally never happened and investors experienced substantial losses.An effective investment plan requires that you properly manage the three deadly sins of investing.The key components of an investment planDetermine your investment objectivesThe first component in your investment plan is to determine your investment objectives. The three main categories involved in your objectives are income, growth, and safety.If your plan is to establish a steady income stream, your objective focuses on the income category. Investors in this category tend to be low-risk and don’t require capital appreciation. They use their investments as an income source.If your focus is on increasing your portfolio’s value over the long term, your objective is growth-based. In contrast to the income category, investors strive for capital appreciation. Investors in this category tend to be younger and have a longer investment time frame. If this is your preferred category, consider your age, investment expectations, and tolerance to risk.The final category is safety. Investors who prefer to prevent loss of their principle investment. They want to maintain the current value of their portfolio and avoid risks that are common with stocks and other less secure investments.Risk toleranceWhile the main reason for growing your portfolio is to increase your wealth, you need to consider how much risk you are willing to take. If you struggle with the market’s volatility, your strategy should focus more on the safety or income categories. If you are more resilient to a fluctuating market and can accept some losses, you might favor the growth category. This category has the potential for higher gains. Nevertheless, you need to be honest with yourself and the level of risk you are willing to take as you set up your investment plan.Asset AllocationAs discussed in the previous sections, part of your investment plan is to determine your risk tolerance and investment objectives. After you establish these components, you can begin to determine how you will allocate the assets in your portfolio and how they will match your goals and risk tolerance. For example, if you are interested in pursuing a growth-oriented category, you could allocate 60 percent in stocks, 15 percent in cash equivalents, and 25 percent in bonds.Make sure your asset allocation reinforces your objectives and risk tolerance. If your focus is on safety, your objectives need to include safe, fixed-income assets such as money market securities, high-quality corporate securities (with high debt ratings), and government bonds.If your strategy focuses on an income category, you should focus on fixed-income strategies. Your investments might include bonds with lower ratings that provide higher yields and dividend-paying stocks.If your focus is on the growth category, your portfolio should focus on common stock, mutual funds, or exchange-traded funds (ETF). With this category, you need to vigilant in managing your portfolio by regularly reviewing your objectives and adjusting them according to your risk tolerance and objectives.Effective asset allocation helps you establish a guideline for properly diversification of your portfolio. This enables you to work toward your objectives and manage a comfortable amount of risk.Investment choicesYour trading strategy includes deciding what types of investments to buy and how you will allocate your assets.GrowthIf your strategy is based on growth, you might consider mutual funds or ETFs that have high market-performance potential.Wealth protection/income generationIf you choose to pursue a wealth protection method, you might choose government bonds or professionally-managed bond funds.Choosing your own stocksIf you prefer to select your own stocks, establish some rules for how you will enter and exit your positions. You objectives and investment strategies will determine these rules. Whatever approach you use, one trading rule you should establish is to use stop-loss orders as a form of protection against downward price movements. For example, if your investment drops 60 percent, it will need to increase 110 percent in order to break even. You choose the price that you will set the order, but a good rule to follow is to set a stop-loss order at 10 percent below the purchase price for long-term investments and a stop-loss order at 3-to-5 percent for short term trades.Your strategy might also include investing in professionally-managed products such as mutual funds. These give you access to professional money managers. If you hope to use mutual funds to increase the value of your portfolio, choose growth funds that focus on capital appreciation. If your intent is to pursue an income-oriented approach, choose income-generating avenues such as dividend-paying stocks or bond funds. Make sure your allocation and risk structure align with your diversification and risk tolerance.Index funds and ETFsIndex funds and ETFs are passively-managed products that have low fees and tax efficiencies (lower than actively-managed funds). These investments could be a good way to manage your asset allocation plan because they are low-cost and well diversified. Essentially, they are baskets of stocks that represent an index, a sector, or a country.SummaryThe most important component in reaching your investment goals is your plan. It helps you establish investment guidelines and a level of protection against loss. It’s important that you develop a plan based on an honest assessment of your investment style, level of risk tolerance, and objectives. You also must avoid letting your emotions influence your investment decisions even during the more discouraging times.
If you are still uncertain about your ability to effectively develop and follow a plan, consider employing the services of an investment advisor. This person’s expertise can help you adhere to a solid plan to meet your investment objectives.

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Average Credit Cards With Great Rates

Average credit cards are usually low on features and carry higher rates when compared to other credit cards. Most of the credit cards that consumers will find online are designed for people with very good credit or poor credit. However, in today’s market, the average credit scores nationwide for consumers have been trending downward. This is forcing banks and credit card issuers to focus on consumers who have fair to average credit more so than they have in the past.When shopping online for average credit cards, consumers are typically offered credit cards that are geared towards consumers who have poor credit. This is simple economics, credit card websites make money when you are approved for a credit card, and credit cards in this class will allow them to get more credit cards approved. Unfortunately, in this scenario the credit card issuers win and the consumer loses.However, if you know where to look, and which cards to apply for, consumers with average credit can find great deals in today’s credit card market. They may be buried on the last page of most credit card websites, but they do exist. Direct Banc is one of the few credit card websites that prominently displays the best of the average credit cards up front. These credit cards will carry the lowest rates and the best features for applicants with fair to average credit. Here are a couple examples:IberiaBank Visa® Classic Card – IberiaBank is directly related to Pulaski Bank, one of these two banks recently bought the other one, I’m really not sure how it went down. Nonetheless, they offer a great credit card for those who have average credit. This credit card, like most credit cards, has a variable rate that hovers around 4% – 5% their credit threshold is stated as “Average”.Average credit is an unclear term, and each bank has a different definition of what “average” is. What we have noticed at Direct Banc, is that IberiaBank defines average credit as one who has a few bumps and bruises on his or her credit but generally pays their bills on time. Ample discretionary income and residential stability are key factors for them as well.Another great credit card for average credit is the Capital One® Platinum card. This card offers a low 8.9% interest rate for those with average credit who qualify. One of the great features you will find with this card is a 0% balance transfer feature. Transferring a balance from another card to a 0% interest rate will give consumers a huge break on their monthly payments. As with all cards, we suggest that you read Capital One’s® important disclosures for More Information.Finding average credit cards for fair to average credit may be a little harder than hopping on a website and applying for the first card that you see displayed. Most of the cards you will see prominently displayed are either aimed at consumers whose credit is very good, or those whose credit is very poor. However, if you take your time, read the fine print, you can find great deals on average credit cards.

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7 Easy Steps to Making Money Online

How to start a $50,000 + business. Literally copy my method, for making money online.Everybody is searching for that elusive niche ebook, knowing that when they find it, they will make an absolute killing. Many ordinary people have made tens of thousands of dollars, in a home based business, making money online, from that one Goldmine ebook.
Publishing ebooks is a proven home based business, for making money online, which can be run from home, in your spare time; until you get full time earnings, for part time hours and say goodbye to the Boss! Making money online is a goal of many people wanting a home based business, but finding niches to exploit can be both time consuming and frustrating unless you know to look. The problem with is many marketing gurus will tell you how ‘they’ made their fortunes (at a price), but they rarely ‘show you’ how to do it.
Well thankfully not all marketers are the same. In this article I’m going to ‘show you’ the simple Easy Steps To Making Money Online strategies, that anyone can use to find many niche markets, that can be used to make money online. They you can sell as many of your ebooks to them, as you could possibly want, making a really successful home based business.
The best thing is that all the resources, I’ll show you to use, are Freely available on the internet. So you can try these at home without spending a single dime!A word of warning here, these steps are easy, but if you are not prepared to put in a bit of effort doing your research, then you had just as well stop reading this article now!!Easy Steps To Making Money Online: 1Go to freekeywords.wordtracker.com It won’t cost a penny to use. This is a truly remarkable tool to narrow down a large niche, to the Goldmine sub niche that will put dollars in your bank account. Making money online suddenly becomes a whole lot easier. In the search box, type in your keyword. E.g. “golf slice”. The results that are displayed are the number of searches, for that keyword, or keyword phrase per DAY. So 100 per day equates to 3000 a month.
Note down or use ‘copy and paste’ to put all these results into Notepad, Word or some other word processing package. Pop them into a folder titled “Golf Niche Research” (for example).
The next 2 steps for making money online use two great research tools, Dummies and Amazon. They sell books, but don’t worry we won’t be competing against them, as part of your home based business. We’ll be producing a digital ebook, which can be sent to your customers immediately, once they’ve parted with their dollars and it won’t cost you a penny in shipping!! Great idea yeah?
Another fascinating thing about downloadable ebooks is that oddly enough ebooks have a higher perceived value. Dummies might charge $15 + shipping for a normal book and the customer will have to wait a day or more for its delivery. You’ll be delivering your $40+ ebook to them, making money online, instantly. They get immediate gratification for their dollars and access to your ebook – you bank the cash.Easy Steps To Making Money Online: 2Go to dummies.com Here is a great free tool for the aspiring ebook publisher. You will find loads of possible niche topics by searching the Dummies book range. Search through the titles in general niches, e.g. Golf, as my example and again note down possible sub niche titles (e.g. golf slice cure), considering the keywords you already had from Step1 above. Note down the results and pop into your “Golf Niche Research” folder, as before under the title “Dummies Research” for example.Easy Steps To Making Money Online: 3Go to amazon.com This is truly an amazing resource for locating niche markets. Very few people know this one – you’re now one of the few! In the search bar select “books”. Then type in the niche you’d like to create an ebook around. Go through the lists of books, and jot down in Notepad etc. any interesting book titles, especially any which you see links with previous research in Steps 1 and 2. Put these results into your “Golf Niche Research” folder as before, under the title “Amazon Research”.Easy Steps To Making Money Online: 4Go to goarticles.com This is the third great free, home based business resource, for locating subjects to create ebooks around, enabling you to make money online. Type in your niche subject into the search bar and you’ll be amazed at hundreds and thousands of ebook ideas, which could make money online, for you. Again note down possible ideas in Notepad etc. and pop into your “Golf Niche Research” folder, called “Articles Research”.The aim is to end up with an Enormous List of possible niche topics from Steps 1 to 4.Easy Steps To Making Money Online: 5Take each of your research files in your “Golf Niche Research” folder, print them out with the title on e.g. “Dummies Research”. Lay they out side by side on the kitchen table – not a good idea around meal times, nor if your 1 year old is around – they tend to eat anything. Some kids have no respect for a $ 50,000 + ebook project, do they?
Take a highlight pen, scan your pages looking for items that link and highlight them. Use a different color for separate sub niches. You are now beginning to create a sharper focus, for your ebook ideas, for making money online.Easy Steps To Making Money Online: 6To be really thorough, go back to freekeywords.wordtracker.com and type in some of the sub niche ideas you have found from step 5 above. If there are a lot of people searching for these keywords or keyword phrases (e.g. golf slice cure or golf for seniors), at least 5000 a month; then you’ve located an ebook topic, that could make you some really serious money online. Remember in this search tool, the results shown are per day. So any keywords with around 170 searches per day, equates to that 5000 per month target. Your home based business is now almost ready to roll out.Now let me make one thing clear. What I’ve laid out today are a set of Easy Steps that literally anyone can follow to find that elusive Goldmine ebook. They are easy steps to making money online, but does require a bit of effort. Don’t think that for one minute that you can chuck together a website, sit back and get rich. Many marketers would have a home based business like yours, believe this.
Done properly with the structured approach I have set out, could dramatically change your financial situation. In time you could give up the day job and have your own homed based business, making some serious money online. You won’t become rich overnight, but by setting up a network of mini websites, that each makes $2000+ a month it can seriously affect your wealth!!I think I know what you’re thinking, “How can I possibly write an ebook”, to make money online, even after doing my research? I’ll describe two options here. The first involves a cost; the second won’t cost you a penny!Easy Steps To Making Money Online: 7If you don’t have specialist knowledge of your sub niche topic, to write your own ebook, you can hire a writer to do it for you. Go to elance.com For around $500 a ghostwriter, will create the entire ebook for you. You put your name on it, publish it and keep 100 % of the dollar sales.Alternatively, you can create it the Free way. I’ll go into more detail about this, in my next article, or if you’d like to find out more, click on the link http://www.easystepstomakingmoneyonline.com or copy and paste it into your browser. You are welcome to subscribe to my free weekly newsletter, offering more great tips for making money online and home based business ideas. There are several hours of free video training included! Yes free video!When you have got your ebook, you’ll be able to set up a downloadable system. This will run on autopilot, delivering your ebook to your customers and collecting their payments 24/7. Money will be going into your bank account – even while you are asleep – this has to be the best bit!Please take action and try these steps out. I promise – anyone can do this, just follow my Easy Step strategies for making money online. Until next time, happy researching for that Goldmine ebook.

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