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Preventing Investment Fraud

If you are new to the investing world, there are people out there who will try and scam you. This is true with every aspect of life, and the world of investing is no exception. If there is money to be made or stolen you can rest assure there are crooks out there trying to find a way to steal yours.


There is no safer place than to keep your money in a savings account at the local bank. As long as the bank is FDIC insured your money will be protected by the government. A limit of $250,000 does apply to these types of accounts. So if you have over that amount you should not place all of it in the same account. A savings account is a type of investment because your money is earning interest as it sits there. The bank will use it to make loans and give you a specified percentage rate in return for letting them use it. At the moment rates are not that favorable and many are considering other investment options.


Placing your money with a stock broker is another alternative. There are many online brokers that will allow you to direct your funds into a variety of different asset classes. When looking at a broker make sure that they too offer insurance from SIPC. Brokers who will not insure your accounts can potentially be scams that will take your money and run. Using a broker based in your own country is also advised. If the broker asks for money to be transferred to an overseas account, red flags should go off in your head. There are many reputable brokers here in the U.S. that are available to the retail investor. Going online and researching the various brokers that are available is a good idea. Many will have both full service financial advisors, to help you out, or let you choose the stocks you would like to buy yourself. Your investment experience and knowledge will help you make the decision as to how much help you require form your stock broker.


Like stock brokers, currency brokers will offer you as an investor the opportunity to invest in the currency markets. There are many online foreign currency scams on the internet, mostly revolving around computer programs that will make you money. Please do not trust these money making systems, as they will not make you the money as promised. The same basic principles hold true when trying to find a good currency broker. Do your research online and read the many forex broker reviews that are available. These reviews will help you to see the pros and cons that other investors had with the brokers that are available to the retail investor. Make sure your broker, either stock or currency, has representative available for you to speak with by telephone. Making sure that there office has a building headquarters is one way of making sure that the broker is legitimate. As mentioned before many of the scams revolve around brokers that work from third world countries and offer no brokerage service at all.


Giving your money away to someone who claims to be an investment advisor can also lead you to lose money. Besides the various brokers that are available to the retail investor there are other types of investments, such as hedge funds. Hedge fund can promise to offer greater returns, however they do not always do this in reality. These funds are the riskiest types of investments when it comes to fraud. Make sure you know of other investors who have money with the fund before you invest any of your own. The fund manager can be gone the next day with your cash never to be seen again, it has happened before and will most likely happen again. If you take your time and do the appropriate research there should be no issue on how reputable your local bank, broker or fund manager is. If as an investor you do not feel confident or comfortable giving your money to a particular institution then do not do it. Ask as many questions as you need answered for them to earn your business

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Which Stocks Does Your Mutual Fund Hold?

Mutual fund holdings are vital information to fund investors when evaluating a manager’s performance as reported. Without knowing what a fund’s holdings are, investors can neither fully appreciate why a manager has performed well, nor can they thoroughly come to grasp about any poor results. Even if a fund is doing ok, investors may decide that the fund investments are overlapping with their other portfolios or not in line with their own investing goals and want to relocate the money elsewhere. But without access to a set of complete information on a fund’s portfolio, investors are basically kept in the dark and can’t decide for themselves on any of those personal investment decisions.


What Does the Law Require
By law, mutual funds are required to release complete portfolio holdings only twice a year. For actively managed funds, in the interim of 6 months, their holdings could have been turned over many times and the information at investors’ hands can never be real time, live feeds, considering today’s online technology has made instant exchange of information nothing but possible. In fact, the decades-old securities law enacted such a rule because of the concern that fund companies couldn’t afford to mail out a report every day.


Objection to Frequent Portfolio Disclosure
Chief concern among mutual fund companies is that timely portfolio updates of fund holdings can tip off their intentions to the market. It may cause potential front run on a fund where other traders can buy shares ahead of the fund and drive up prices, while the fund is still taking the time to build up positions in a stock. But supporters of full, on-time publication of portfolio holdings argue that the hidden reason why funds are reluctant to do anything beyond what the law requires is that managers might be concerned about revealing questionable trading practice in any disclosure. Funds do a lot of window-dressing trading close to quarter end to boost performance and increase management compensation.


Other Concerns by Financial Advisers
Some financial advisory don’t think that requiring more disclosures of a fund’s holdings is a good idea. They contend that overwhelming information can lead investors to losing their long-term focus and becoming obsessed with fund trading. The advantage of having accessible information as claimed by some investors may be overblown. They also observe that people who are trading stocks and looking for ideas are more interested in getting a first look at a fund’s holdings.

Amid all the conflicting viewpoints, some mutual fund companies are stepping up to make more frequent disclosures on their portfolio holdings. More quarterly updates are now available, with monthly reports on top holdings. To the delight of some investors, a fund named OpenFund lets investors view active trading on its website, while others post weekly trading commentaries by fund managers. A standard monthly reporting ought to be possible if the idea of leaving out sensible trading information is made to consensus.

What happened to the stock market today?

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Finding The Best-Suited Funds For Your IRA

Investing hard-earned money in Individual Retirement Funds can be risky, but there are IRA funds that have been performing very well and would definitely be wise to consider. Dodge and Cox Stock has proven to be a reliable fund since its start in 1965. Sometimes going with an older fund is a good idea. The strong performance of Dodge and Cox makes it a good choice for those who are interested in dividend-oriented portfolios and strong risk-adjusted returns.


Vanguard REIT Index Fund has proven to be another fund with good performance. Even though real estate has been risky of late, this fund has been doing very well, especially considering that REITs must distribute 90% of earnings to shareholders every year. Real estate allows for a more diversified portfolio and is a good choice for an IRA fund.


Roth IRAs have always been a good option for IRA investing. After age 59 and 1/2, withdrawals are not taxed, and the rules for withdrawal are more flexible to work with. And since contributions can be withdrawn without the risk of penalty or taxes, Roth IRAs are a good choice if money may be needed sooner rather than later.


Another good choice would be the Vanguard Total Bond Market Index Fund. Half of its portfolio deals in agency and Treasury bonds and the other half in corporate bonds. This fund is expected to perform well in years to come.


Third Avenue Value has been performing reasonably well in the last ten years. Considering the state of the economy, this fund is still doing better than others. It might be worth checking into as an IRA investment. The funds listed here are options to consider when looking for the best IRA funds. Retirement should be relaxing and worry-free, and good investing today can contribute towards a happier tomorrow.

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Top Gold ETF To Buy

For those of you considering investing in gold as a preventative measure against paper currencies and the mismanagement of governments, the best loved and unarguable top gold ETF to buy is GLD – also called SPDR Gold Shares. The unique feature of this Gold ETF centers on its relationship literally matching the valuation of gold. Although one could reasonably assume this to be standard, where ETF’s, or Exchange Traded Funds are concerned, it is certainly not. Numerous ETF’s operate with futures contracts that are generally less predictable and so riskier investments. Although past performance is no guarantee of future results, gold ETF funds like GLD, prove to be a less risky option than alternative commodity investments, particularly for those that understand well what is happening with the economic picture.


There are those investors who feel confidant that deflation has already begun, and that would prove to be gold bearish. A few of them will indicate television advertising, claiming that after the public catches on to an investment, it is time to sell. Yet different investors believe that because of the government running the printing presses overtime to create more money, the value of gold will keep going up. Gold more or less proves to be protection against a declining dollar, and its performance is based on other country’s currencies and economies as much as it is on those of ours. Could our economy perform sufficiently for us to build up our currency’s value, or might we have to maintain a weaker dollar to be able to compete internationally? Perhaps more involved than before in history, this involves a complex series of actions and reactions.


Despite all of the background noise going on, a constant concept emerges. The majority of both gold bears and bulls concur with gold maintaining the upward trend over both the medium time frame, as well as internationally. A number of investors today feel certain that one day the specter of hyperinflation will rear its ugly head, causing GLD, and also UGL (ProShares Ultra Gold), to both be solid investment ideas for all long term minded investors.

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Joel Greenblatt Knows How to Invest In the Future

Joel Greenblatt’s most recent book, “Magic Formula Investing” deals with the basic philosophy of buying stocks from high earning companies cheaply that will then yield high returns on your investment. There exist only one Magic Formula Fund which is reporting recording stocks as of this day .


This idea follows  the launch of his online money management company, Formula Investing, last  October, in which he offers clients “a unique stock screening system, and a disciplined approach to managing portfolios of high value stock” for them. He is also the author of “The Little Book That Beats The Market”, which was on the NY Times bestseller list, as well as “You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits”, published back in 1997.


Born in Great Neck on the north shore of Long Island on December 13, 1957, Greenblatt, served as the former chairman of Alliant Techsystems, and is the founder of  the New York Securities Auction Corp. He also began Gotham Captial, a hedge fund backed by Michael Milken (the infamous “junk bond king”) in 1985.
In addition to his devotion to investing on Wall Street, Joel Greenblatt firmly believes in investing his own money in New York City’s educational system, particularly those schools catering to minority students.


Not only did he gift $2.5 million to the Ozone Park, NY elementary school PS 65Q, whose student body is primarily made up of kids from South Asian and South American immigrant families, but he also held found a charter school in Manhattan known as the “Harlem Success Academy” in 2006. Both schools continue to receive his support and have merited high marks for their growing academic achievements. In addition, Greenblatt serves on the board for the Institute for Student Achievement, which works to develop small senior high schools out of  larger ones in order to raise the standard of education in communities across the country.

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High Yields: How to Invest in a High-Yield ETF

If you are like most people, then you like the idea of having your money work for you. One way in which it does this is when it is invested. When your money is invested, it grows as the companies you are invested in grow. Thus, you make money off of the work of others.


However, all too often people are afraid to put their money to work in the stock market because it seems like a confusing place. Many worry that their money might evaporate away if a stock goes under. For example, if you invest in a gold ETF fund, and the price of gold collapses, then you’re busted — you lose your investment. The same goes for Oil ETFs, the natural gas ETF and others. While this fear is legitimate if you are invested in only one stock, there are ways to diversify your money and to grow it without having to learn the complexities of the market. This way is by investing in a high yield ETF.


A high yield ETF (Exchange Traded Fund) is an investment vehicle in which your money is given to a professional who manages the money for you by placing it into a number of high yielding stocks. A high yield stock means a stock that pays a high dividend relative to it’s share price. By investing in this kind of ETF you are allowing compound interest to work in your favor in order to significantly grow your money over time.


Conservative style investors might be particularly drawn to high yield ETF’s because of the glamor of the high dividend. Investors have the option of receiving their dividend (share of the company’s earnings) in the form of a check every three months, or in the form of reinvestment in the stock. Reinvestment in the stock gives you a bigger share each time and is generally thought of as the smarter move financially, unless you are using the money as income.


While ETF’s are a relatively new product of Wall Street, they are in many ways similar to mutual funds. They allow you to not have to worry about studying the stock market before investing. You may simply place your money into these funds on a set schedule (i.e. monthly, weekly, etc.) and allow it to grow over time for you. This makes your investing automatic, rather than focusing on random ETF news and sound bites. Naturally you should never jump into an investment halfheartedly. If you want your money to work for you and compound over time, then you are going to need to stick to your investment plan.

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Stock Dividends And Their Benefits

When any company makes a profit, the directors may divide the profit among the stockholders as ‘dividends’ or they may decide to use it to expand the business. Dividends may be paid only out of the company’s profits only. When profits are used to expand the business, the directors and stockholders may decide to issue more stock to show that there is more money invested in the business. The new stock will be divided among the stockholders as a ‘stock dividend’. Hence, stock dividend could be conveniently defined as the distribution of extra shares among the stockholders or investors of the company.


Many companies and financial institutions offer shares to the investors in order to generate money for the organization. The investors also put money in the organization through these shares. Such an investment is greatly dependent on the reputation and performance of the organization. Hoping to get good returns in the form of cash dividends or stock dividends is the main reason behind making these investments. There are many advantages of stock dividend. Firstly, no tax is levied on such dividends, much to the relief of the stockholder.


In case a stockholder earns some stock dividends from the company he invested in, he or she is not expected to pay any type of tax on that until he or she decides to sell the additional shares. Secondly, the stock dividends earned by the stockholder enables him or her with additional ownership in the organization, which in turn may prove profitable to the stockholder in the future. The stock dividends are given to a particular stockholder depending on the number of shares he or she holds. How lucrative a certain stock dividend is going to be; again depends on the performance of the organization in the market.


I might add here that I am the stockholder in a few companies of good standing in the commercial market. I have always been a little skeptical before investing in any stock or shares. Somehow, going by the sea changes that have been happening in the economic scenario, I have always opted for cash dividend instead of stock dividend. Cash dividend is one way of ensuring that you have ready cash on your hand at the end of the year based on the company’s earnings. This money can be utilized for reinvesting, if need be. What if you opt for stock dividend, and suddenly the company does not perform well and reports sick, all your shares will nothing but worthless pieces of paper. You will have to again wait with bated breath and hope that the company is revived with a rehabilitation package in place.

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