Saturday, 23 August 2014

Some Investors Focus on Yield When Choosing Investments

These are not easiest of times for investors, especially with investment returns at all-time lows, political and social turmoil disrupting key economic regions, and the constant threat of inflation looming. Regardless of the obstacles threatening global markets, private investors and asset managers from across the globe are discovering ways to make the challenges in today’s markets work in their favor, rather than against them.

Nowadays, to combat the disappointing returns and risks from traditional assets in a portfolio, an investor's strategy often begins with a focus on yield, and then works it way backward from there. In applying this approach, the portfolio's holdings are chosen because they will perform well and deliver strong and steady returns (of 8 percent to 13 percent per annum), no matter how the other asset classes or international markets perform. This type of long-term security has become increasingly important to investment-seekers everywhere, regardless of their demographic.

"Yield is at the root of every decision that we make in our portfolio, [whether it’s] buying stocks or doing asset allocations."- a Multi-Asset Product Manager at Schroders

Experienced investors know that the proper alternative asset allocation can substantially increase the value of a portfolio. This is especially true when you stop to consider that, aside from the common investment risks, markets can at times be incorrectly priced; particularly in instances where investor joy and euphoria has pushed values too high, or investor fear has (in contrast) pushed values down to extremely low levels. As most investors are aware, this is an all-too-common occurrence on Wall Street, where stocks prices are sometimes subject to unexpected influence and/or intentional manipulation.

With a focus on investing for the best return, investors are choosing investment options that are hardly influenced by politics or by the performance of investments in traditional markets. In fact, a rising number are investing in the hard assets that drive economic growth in emerging and developed nations around the world. Aside from providing a strong yield, these investments also provide security against crashing stock markets and rising inflation.

Sunday, 10 August 2014

How To Choose Investing Options That Will Meet Your Needs

Creating a sound investment strategy is not always the most simple of tasks to accomplish. There are a number of well-established factors, as well as even more unique factors from your own point of view, that must be considered and addressed in order to properly determine your best strategy for investing. Given that each investor has unique needs and desired outcomes, there is no such thing as a one-size-fits-all strategy. What works for someone else may not match up to your desired return outcomes and long-term goals. For instance, if earning a steady profit from your investments is the strategy for investing you have chosen, then you must make sure to seek-out opportunities that pay out dividends or "for-use" fees on your investment. This usually involves finding income producing assets that have a proven to provide a dividend or similar payout.

One of the proven ways of doing this is to create (what I call) a "matrix" on a spreadsheet. Doing this will illustrate your goals, identify your risk tolerance, and clearly define the desired outcome you expect from your investments. To begin, write out the return you expect on a piece of paper. Also include which of the common risk factors are of concern to you and the types of investing opportunities you are looking for. Then, begin conducting in-depth research to uncover investment types that have already demonstrated that they can meet/exceed your needs. Once again, if earning a steady profit is your goal, you are going to want to find asset purchases that are used regularly, and that usage is paid for. This includes investments like real estate (apartments, income properties or rental units), container investments (rental/lease fees) and others. Depending on how your matrix is established, you may have a lot of cash to invest, and therefore are more apt to try real estate investments; or perhaps instead you have chosen a steady return strategy as your preferred criteria. If this is the case, then the advantages of shipping container investing should certainly be considered.

When weighing your options, it is paramount that you stick closely to the investment plan that you have created (above) and only select the opportunities that meet its criteria. When necessary, find investor reviews that can help to address any underlying concerns and increase your confidence. With this in mind, I cannot begin to tell you how important it is to take the time to set the record straight about investments and investing returns, especially if you intend to make an educated decision about your financial future.

Sunday, 3 August 2014

The Long-Term Growth In Global Trade Reduces Investing Risks

As an investor, you are always trying to minimize the risks associated with your investments. It is an ongoing challenge that you must constantly wrestle with. The question investors are asking themselves is whether or not investment offerings in global markets offer less exposure to risk than investments currently offered in North American markets. The truth be told, ALL investments have some sort of inherent risk involved. In fact, the very definition of the word Investment implies that their are risks ahead:

A thing that is worth buying because it MAY be profitable or useful in the future
- Source: Google Definitions

The word "may" found in the definition above suggests that there is always a chance an investment opportunity will not pay out profitably. I cannot begin to express how important it is for the individual investor to accept this fact, manage the uncertain aspects of their portfolio, and keep investment risks to a minimum. Obviously then, the goal is to continually reduce investing risks without affecting your portfolio's overall ability to profit from your immediate holdings. The challenge is which investment road to take.

In order to reduce your investment risks, you will need to look for guarantees, or markets that almost certain to rise in the future. One of those options is to invest in emerging markets and the global trade that feeds them. Look around the world, international trade is flourishing and continuing to grow at a very decent rate. Be that what it may, the question still remains. Will investing in global trade reduce investing risks? In my mind it depends a great deal on what you invest in. However, as global trade numbers continue to grow, and are expected to continue to increase, you simply need to find an investment that grows on pace with the world's economic prosperity. In doing this, you will reduce your investment risk, by choosing an investment that promises long-term growth and profitability.

If you are looking for my recommendation, I suggest you find a vehicle that is directly involved in building and maintaining economic growth in developed and emerging countries around the world. Making an investment in the shipping industry for example, is a great means of getting involved in the global growth while at the same time, minimizing your exposure to risk.

Saturday, 19 July 2014

How I Earn a Steady Income From Investing In Alternatives

The Internet is littered with hundreds of thousands of "get-rich-quick" schemes and regrettably many investors have fallen for the lure of high return with minimum investment. The reality is though, and any investor will tell you this, it is hard to make a high return quickly without exposing yourself to risk.

One of main criteria for investments is: Can it return a steady income stream for me?. As an investor, I find tremendous value in knowing that my investments are both profitable AND provide long-term asset growth. When you factor in monthly dividends (or profits) from investments you will find that the overall return is significantly higher than most, and it is being accompanied by reduced overall risk, given that you are being paid out as your investment matures.

To be honest, there are not a lot of options when looking for this type of investment. Personally I prefer income producing assets, like real estate and investing in shipping containers, as both  provide me with a monthly dividend. Albeit income property most often comes with the added burden of having to chase after people and payments, my shipping container investments all return a steady profit each month while being managed by industry professionals. Let me take a moment to explain further ...

I have chosen to hire a broker to manage the containers I have purchased in order to simplify my involvement. Each month I receive a check with my profits - and sometimes it isn't much - however, it IS a return placed in my bank account each month without having to do anything outside of my initial investment. In fact, the company I am using to broker my container leasing has been paying me monthly dividends for 3 years and I continue to receive monthly checks from my initial investment. Furthermore - with regards to my exit strategy, my shipping container retain much of their value of time and can be sold anytime I am ready. When we compare this to real estate income properties, paying off the asset (condo, house etc) usually takes a great deal of time (15 to 20 years sometimes) and the real estate markets can be very volatile when it comes time to sell.

All things considered, alongside my modest holdings in traditional offerings (stocks, bonds, etc.,) I continue to earn a steady profit each month from my investments in alternatives. This traditional-nontraditional approach has consistently delivered performances and returns that, over the years, few other investment strategies have provided me.

Wednesday, 29 January 2014

Saving For Retirement Takes Careful Planning and Foresight

Planning and foresight are just two of the strategies used to guard against not having enough to live on when you retire. A sound retirement account also requires research and advice from qualified sources. Saving properly for retirement is no easy task, considering that the past decade has not been pleasant when it comes to cutbacks, layoffs, flat salaries, cuts in benefits and so forth and so on. While the stock market has been performing rather well these past 18 months or so, no one can predict when a "correction" will occur. Some people say that the events of late January 2014, are an indication that the bull may be tired of running.

There are income producing assets available that can boost not only your outlook and confidence in the future, but your retirement savings as well.  Investing in alternatives, the non-traditional investment opportunities that can produce above market returns, should be a small portion of your portfolio that just may generate whatever shortfall you may have experienced, as a result of withdrawing from your retirement savings, market corrections or who knows what.

Is there a safe way to withdraw to avoid risks inherent in investing in uncertain markets?

"Financial security in retirement is likely to be a shifting target that is influenced by largely unpredictable factors. Just as economic pressures continue to change, the thinking about retirement withdrawal rates continues to evolve. Rules of thumb may be useful and educational, but they are no substitute for a detailed, personalized retirement plan that is monitored frequently and adjusted as conditions demand."- Deena Katz, Wall Street Journal

Planning for retirement used to be easy, back when big corporations gave out gold watches and fat retirement pensions, along with free medical for life and other benefits; but not anymore.  Now the strategy and tactics of assuring a comfortable retirement must be hammered out early; as early as post-college graduation or sooner.  Young people today have little to no idea what it will cost to retire  in thirty years from now.  Heck, nobody has a firm grasp of the future, just best guessing. Regrettably thoroughly researching and learning as much as one can about common investment risks is an all-important education that most overlook/avoid. That’s why alternative investments should not be discounted; it should be embraced once an investor understands the markets, the associated risks, and has researched her/his choices from the vast array of income producing assets in the alternatives arena.

Traditional investment vehicles like stocks and bonds, mutual funds and others provide a pretty balanced risk level, and your retirement planning may not require much tweaking. However, the cost of retirement is more than most are aware of, so some elevated risk in small portions may just be the ticket to higher yields and better overall portfolio outcomes.  Mindful of risk, some investors look toward precious metals, shipping container investments, real estate and a myriad of other vehicles.  One reason is the possibility of greater returns, despite the risks involved.  The limits on liquidity is both a benefit and a risk, and should also be taken into account.  While some view liquidity as all important, the lack of it is also a way to handcuff one’s self, keeping from being affected by "shiny object syndrome."  Jumping at the next great thing is often where investors get into trouble.

In the end, the planning you do for retirement savings should start early, reviewed often, have frequent risk evaluation and experience an annual adjustment of the plan to better predict goal attainment or shortfall.  It takes foresight, planning, timing, research, as well as sound advice, to weather the retirement savings storm and be successful in choosing a good investment that both provides and protects.

Thursday, 16 January 2014

Is The American Stock Market Overvalued and in a Bubble?

Can any say "Housing Bubble?" Sure you can.  Any American stock market investor, like most of the U.S. population has a short memory when it comes to bad things. Past catastrophes and the housing bubble bursting set off a chain reaction of bad things that we as a nation are still trying to dig out from under.  We’re an optimistic group, after all, so when it comes to common investment risks, investors may wish to find income producing assets in extremely small niche stocks, rather than the S&P.

Almost everyone to whom I pay attention say we’re headed for a fall, but it depends on a number of elements to align.  Bernanke’s asset bubble, as far as both he and Janet Yellen are concerned, is that over valuation is nothing to worry about.  Economic easing by printing money has caused stock prices to rise along with their "value" and corporate bottom lines. Stock prices, real estate and precious metals all rose in 2012 and most of 2013, with gold and silver in a downward slide these past few weeks.  So moving your money there may not meet your goals.

Forbes’ Jesse Columbo believes strongly about the market valuation beyond reasonable back in December, 2013,  Thomas H. Kee Jr. of Stock Traders Daily stated just yesterday the swings in the market this past week call for strict focus, and has been shouting from the roof tops since November, 2013 , that the stock market is way overvalued.  David Kostin of Goldman Sachs, as late as yesterday said there is no rationality to the overvaluation of the market.

Warren Buffet, perhaps the greatest investor in the world – ever, has felt negatively about the value of the American stock market since November, and his position hasn't changed as far as I know.
Here’s his take on how to value the markets. In 1999, and again in 2001, in an interview with Carol Loomis of Fortune:

"The market value of all publicly traded securities as a percentage of the country's business -- that is, as a percentage of GNP. The ratio has certain limitations in telling you what you need to know. Still, it is probably the best single measure of where valuations stand at any given moment."

At a ratio of 70 – 80%, Buffet feels confident the market is doing fine, but heading nearer to 200% is playing with fire.  The Buffet Ratio is currently standing at 134%.  Smell anything smoldering?

The one positive person going on record of which I am aware is Kiplinger’s Anne Kates Smith . The view she sees is continued growth in the market, leaving he bears wanting.

Simply put, the real answer to the question is the American stock market overvalued is "it depends on whom you ask."  Let’s face it, people who are in the market have got to be asking themselves when the ride will end, and nearly no one wants the uptick to stop ticking up. With that being said, people looking for good investments should perhaps begin to look somewhere toward individual under-performing assets. Bubbles burst, don’t they?  Don’t let me sway your opinion.  Think about what your goals are and to what level risk you are willing to sustain. But, if you ask me, the bull can’t run forever.

Thursday, 12 December 2013

This Investment Gave Me Piece Of Mind and a Steady Income

Being prepared for retirement, both financially and with piece of mind, is something that takes careful planning and commitment; particularly if you are developing the investment strategy yourself. In my case, I can confidently say that in my planning I have conducted endless hours of research and in doing so, critiqued countless opportunities. Serious investors know to expect this if they hope to be successful.

When planning for retirement, it is not just about saving money in a bank account. It is about maintaining your lifestyle and income. Over the years I have become increasingly fond of income producing assets to generate revenue and "keep the paychecks coming," so to speak. Although it is nice (and necessary) to maintain cash holdings, I prefer to see my money placed in assets that generate consistent returns and have demonstrated they are easy to liquidate. This allows me to maintain my lifestyle with a steady income and provides access to money if I need it.

Although long-term investments like stocks and bonds are intended to ensure financial stability in the future, the fact that their values are subject to change based on a number of political and corporate influences that are well beyond my control, has never been very appealing to me. I prefer to invest money where there has been consistent growth year after year. And, one thing that you can be certain will work extra-hard to record strong improvements, is the global economy. No matter where you look, countries all over the world are working really hard to improve their economic performance. In order to achieve meaningful growth, government officials and investors must continuously make investments that promote economic growth.

An international industry that does an incredible job of promoting a steady improvement in the economies of the world, is the maritime shipping sector. The fact that trade (both imports and exports) plays such an important role in increasing GDP in countries, speaks to its value as an investment. And, from financial institutions funding post-panamax vessels and port improvements to an investor investing in cargo containers, the shipping industry has presented the investment community with a number profitable opportunities to contribute to and profit from economic growth.

One such opportunity that I recently invested in, as mentioned in an earlier blog post, is container investing with Pacific Tycoon – a container leasing and management company from Hong Kong. After purchasing a number of shipping containers, they were added to the company's existing fleet and as an investor and container owner, I earn revenues each month. This alternative investment opportunity gives me piece of mind that I am investing in the strength of the global economy and I also get to enjoy the benefits of an income producing asset each month, to help supplement my retirement income. In my opinion, this strategy is much less risky than tempting fate in the stock or bonds market.