Good Investment Ideas

Good Investment Ideas

By Aastha Dogra
Last Updated: 3/15/2012

The following article suggests some good investment ideas, which if done properly, can provide consistent high-yield returns and are also pretty safe. Read on...

Looking at the negative impact of the economic recession, people have realized that along with earning money, it is wise to save money and invest prudently so that one has enough fund to meet any unforeseen circumstances. When it comes to investing one's hard-earned money, no one would want to take unnecessary risks with their money. That's why, many people hire consultants for suggestions and tips on how to invest their money and also on the rapidly changing market conditions. Still, having some knowledge of the various options is always handy, whether you have a professional undertaking financial management for you or you are relying on yourself to do the same. To help you out, given below is some information on the investment ideas and options that are available today.

Best Investment Options

Real Estate
Though the realty market is facing a slump due to the economic downfall, it is expected to rise in the coming years, and is counted among the best investments. Real estate is a long-term investment, so you cannot expect short-term returns. So if you are ready to invest in real estate, it is a viable option. Investing in a land or an apartment can provide you a way to create a large source of passive income. Also, the price values are expected to go up over time. However, one should consider the various risk factors before going for this source of investment. According to market analysts, the cities in the United States which are considered good investments options for real estate are - Dallas-Fort Worth-Arlington, TX, San Antonio, TX, Houston, TX, Oklahoma City, OK, Indianapolis-Carmel, IN, Salt Lake City, UT, Phoenix, AZ, Tulsa, OK, Denver-Aurora, CO and Charlotte-Gastonia-Concord, NC-SC. If you are considering investing in countries other than America, invest in Brazil, Australia, India and France.

Stock Market
The economic recession has proved how volatile the stock market can be. Still, investing in stocks today can be considered as a good option for two reasons - firstly, most stocks are currently available at low prices and secondly, the markets are showing signs of revival all over the world. However, think of stock investing only if you have done a thorough research on the market and can track it on a daily basis. Also, diversify your stock portfolio by investing in a number of sectors to reduce the risk of heavy losses. Diversification helps to spread your investments among different sectors, so that if one sector incurs losses, you have nothing to lose. To be sure that you are making sound and good investments, you can opt to hire professional portfolio management services.

Treasury Bonds
One of the best investments for college students is to put their money in US treasury bonds. Since these are issued by the government, they are safe and just right for young people. They are counted among the good investments for college students as they can be bought for as little as $1000, thus making them quite affordable. The maturity period is always more than seven years and you can expect a yield of 5% or more.

Gold
Investing in gold has emerged to be one of the most profitable and lucrative options. You can either buy gold coins, gold bars or you can opt for government-backed gold certificates and Exchange Trade Funds (ETF), if you do not wish to keep the gold physically with you. Investing in gold is advantageous as gold prices have more or less remained immune to the recession. For making profits through gold investment, always buy gold when the prices hit bottom and sell it when the prices go up considerably i.e. during the festive season.

Banks and Financial Institutions
If you are searching for investments that are safe, go in for a fixed deposit scheme offered by banks or any other financial institution. Currently, you can expect some really good returns on these, and it is also one of the best long-term investments. You can also invest in various recurring deposits and provident funds, which banks offer.

These are some of the best investment options, which if undertaken after a thorough research and timed properly, can contribute immensely to wealth creation. Explore all options before investing your hard-earned money and make the best choices. Besides, be prepared to deal with any kind of losses in the event that it occurs. So take your time while deciding on the ones you want to opt for and invest at the right time. Best of luck!

Disclaimer: This article is intended for informative purposes only. Consult your financial consultant before making any investment decisions.

This article was originally published by Buzzle

Best money investment

Cash Investments

Most investors will tell you that there are three basic types of investments:  stocks, bonds, and cash.  Some individuals treat cash as something you only need to have on hand for those unexpected expenses.  But as we shall see, cash can, and should, play an important role in nearly everyone's mix of portfolio assets.

Cash Assets
There is no doubt that having cash around as "spending money" is a necessity for many of us.  We need cash to pay our monthly bills, and we might also like the idea of having some extra money handy in case an unexpected expense arises.  Those are two pretty compelling reasons to have, and hold, cash.

Asset Allocation
There are other reasons to hold onto cash, even beyond those "rainy day" expenses.  In fact, asset allocation theory tells us there are several factors that drive our need to hold cash, for example:

• Years Until Retirement - this factor should read more like: years until the money is needed.  The point here is the closer you are in time to needing money, the more liquid the investment.

• Risk Tolerance - if you're the type of person that panics when their investments are performing poorly, then you're a good candidate for investing in cash.

• Knowledge and Comfort with Alternative Investments - unfortunately for some of us, we are limited in our investment choices due to a lack of knowledge.  We simply don't know how to invest our money elsewhere, so we hold cash.  In this example, probably in-excess.

Advantages of Cash Investing
The primary advantage of cash is the preservation of capital.  That's a fancy way of saying cash is a very safe investment.  If you place your money in Money Market Funds or Certificates of Deposit, then you might even be covered by the Federal Deposit Insurance Corporation, or FDIC, which means your deposit is insured against loss.

Another advantage of cash is that it prevents you from liquidating assets from other classes, such as stocks or bonds, when you have a large expense coming up.  The last thing you want to do is sell a portion of your stock portfolio during a bear market to pay for your daughter's wedding.  Holding cash is a simple way to meet these types of financial obligations.

Cash investments are also extremely liquid assets.  That means they can be quickly exchanged for products or services we need.  In most cases, all we need to do is make a simple withdrawal from an account to have immediate access to our money.

Disadvantages of Cash Investing

On the other hand, the primary disadvantage of cash has to do with the overall return on investment.  The higher rewards in life usually go to investors that are willing to take greater risks.  That means relatively safe investments, such as cash, will provide relatively low returns.

This is one of the reasons many investors spend so much time trying to figure out how much cash they need on hand.  Investing is like putting our money to work, and if too much money is sitting around idle, then we're missing out on greater returns.

Where to Invest Cash
If you're convinced that cash can, and should, play an important role in your investment portfolio, then you have four options when it comes to cash investments:

• Certificates of Deposit
• Money Market Mutual Funds
• Money Market Accounts
• High Yield Checking Accounts

Certificates of Deposit
If you're an investor searching for a relatively low risk investment, then certificates of deposits, or CDs, might be of interest to you.  A CD is nothing more than a deposit account with a thrift institution or bank, which typically offers a higher rate of interest than a savings account.  CDs normally carry Federal Deposit Insurance Coverage up to $250,000.

Purchasing a CD
With a CD, you are investing a fixed amount of cash for a fixed period of time.  The more common terms you'll find for a CD include three months, six months, one year, three or five years. Interest is paid on a CD at predetermined intervals, usually monthly.  CDs that are redeemed early are frequently subject to an early withdrawal penalty.
Before buying a CD, make sure you understand all the terms and conditions associated with the deposit, including:

• Maturity Date - find out when the CD matures, most banks will provide this information in writing.
• Early Withdrawal Penalties - determine what early withdrawal penalties exist.  Penalties are usually stated in terms such as the forfeiting of interest payments.
• Callable CDs - a callable CD gives the bank the right to call in the CD after a set period of time.  If interest rates suddenly fall, then the bank can call in the CD, which means you need to move your cash elsewhere at a most undesirable time.
• Brokered CDs - if you're planning to invest a lot of money in CDs, then you need to understand if the CD deposit is being brokered.  FDIC insurance is on a per institution basis, with a limit of $250,000.  You'll want to make sure all of your CDs are not with the same financial institution.

Money Market Mutual Funds
Money market mutual funds are mutual funds that invest in short-term debt instruments.  Money market funds invest in certificates of deposits, government securities, commercial paper of companies, and other low-risk, highly-liquid securities. Unlike other mutual funds, they attempt to keep their net asset value (NAV) at a constant $1.00 per share.

High Yield Checking / Money Market Accounts
The exact rules may vary slightly with respect to high yield checking accounts and money market accounts.  But for many of us, these two investments are nearly identical.  These types of accounts are typically offered through local banks, and allow you to write checks.

In exchange for offering higher yields than savings accounts, high yield checking and money market accounts normally have fairly high minimum balance requirements.  There may also be restrictions with respect to the number of transactions allowed each month, such as the number of checks written.  You may also be subject to penalties if you exceed these thresholds.  Banks limit the number of transactions, so they can invest the money in longer-term, higher yield securities.

The important point to remember is simply this: before investing your cash in any of the above mentioned accounts, make sure you understand all of the fund's terms and conditions.  Ultimately it's your money, and you need to fully understand the rules associated with gaining access to that money.

Source: Here

best low risk investments

Risk-free investing
 Low-risk options 

National savings and gilts
One of the lowest risk investment options is the National Savings and Investments (NS&I) tax-free saving certificates. Particularly index-linked savings certificates, which guarantee to outstrip inflation.

A number of issues are offered each year, and you can invest up to £15,000 in each one.

If interest was, say, at 1.35% plus inflation, with RPI at 3.0% it would give a rate of 4.35% equivalent to 5.45% gross for a basic-rate, 7.30% for higher-rate, taxpayers.

Alongside these are British government stocks or gilts, which can be bought through a stockbroker.

These usually pay interest twice a year, plus the stock's nominal value when it reaches its redemption date, which may be ten or more years later. They can be sold before this for a less certain return.

Cash Isas

A good way of boosting your savings is to hold them in a cash Isa. The interest from these accounts is tax-free.

You can pay in up to £5,640 in the 2012-13 tax year, and top up your Isa account annually. Most savers can benefit by using their annual Isa allowance before putting any remaining funds into ordinary taxed accounts. But remember that if you want to move your Isa to a higher interest product, apply to transfer it rather than taking out the money and reinvesting it yourself.

This is because if you withdraw your money and then reinvest it during the same tax year, you'll be using up all or part of your tax free allowance for that tax year.

Savings accounts
You may use a current account for everyday spending, but it makes sense to move any surplus funds into a savings account.

In choosing one, you need to look carefully at its features as well as the interest rate it pays.

Instant or easy-access accounts suit those who may need to withdraw money at short notice. They are suitable accounts for rainy day funds but don't offer much growth above inflation.

For example, if you invested £10,000, the gross interest you would get at 6.4% is £640. Tax at 20% on this is £128, which leaves £512 net. For higher-rate taxpayers the net rate is 3.84%, which means their money lags 0.06% behind inflation.

Higher rates of interest are often offered to savers when they open a new account. These bonus rates commonly last for 6-12 months, reverting to a lower rate thereafter, so it is worth making regular checks to confirm the rate you will receive.

Some savings accounts offer higher rates of interest to those who can give 30, 60 or even 90-days notice before making withdrawals and often the best interest rates can be from accounts accessed online.

Others limit the number of withdrawals you can make to three or four a year – deducting interest if you need to make more. Another common feature is tiered interest rates, where those who can afford to deposit a large sum are paid a higher rate.

Regular deposits can also earn you higher rates with some accounts. Accounts of this kind do not normally allow withdrawals during the year though and are often capped in terms of the total amount you can save.

Higher rates still can be earned by combining your savings and current account, or saving with your mortgage provider.

Bonds
Bonds could provide another safer option for those looking to invest.

Guaranteed income or growth bonds are sold by insurance companies and guarantee to repay your original investment, plus interest, provided you hold them for the full term – typically up to five years. As with any fixed-rate product, you may lose out if the base rate rises.

Guaranteed equity bonds offer a less certain return and are only risk-free in that you should get back your original investment, but interest paid is linked to stock-market performance. There is a risk of a poor return if equities fall over the period you hold the bond.

NS&I also pays premium bond prizes tax-free. These are not the same as guaranteed interest, as you may not win, but your original investment is never at risk, except from inflation if you don't win anything.

Cash under the mattress
Finally, worried savers may be tempted to put their cash under the mattress. But surprisingly, this is a fairly risky strategy.

As it is not earning interest, your capital will be seriously eroded by inflation, even if inflation is currently low. And you won't be able to claim on your house insurance if your cash is stolen or goes up in smoke.

Source: Here