Archive for: ‘October 2014’

Understanding Mutual Funds and Unit Trusts

October 30, 2014 Posted by admin

Understanding Mutual Funds and Unit Trusts

For those who want to get involved in the stock market, but don`t have sufficient funds to make it worthwhile purchasing just one company`s stock, mutual funds, or unit trusts, can be a good option. Many companies allow the purchasing of these on a monthly basis, thus `drip feeding` the purchases over a period of time.

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it on their behalf. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The term mutual funds is used in the United States and Canada. In the UK, Ireland, Australia and some other countries they are known as unit trusts. For our purposes mutual funds and unit trusts have been to mean virtually the same thing, but note there are some differences, which should be checked at the time of any purchase.

Trusts and OEICs provide a mechanism of investing in a broad selection of shares, thus reducing the risks of investing in individual shares. There are thousands of Unit Trusts and hundreds of OEICs to choose from, so it is important to select the right fund to meet your needs.

Unit trusts are open-ended; the fund is equitably divided into units which vary in price in direct proportion to the variation in value of the fund’s net asset value. Each time money is invested new units are created to match the prevailing unit buying price; each time units are redeemed the assets sold match the prevailing unit selling price.

Each Unit Trust has its own investment objective and the fund manager has to invest to achieve this objective. The fund manager will invest the money on behalf of the unit holders (or shareholders). The value of your investment will vary according to the total value of the fund.

The trust manager makes a profit in the difference between the purchase price of the unit or offer price and the sale value of units or the bid price. This difference is known as the bid-offer spread. The bid-offer spread varies from company to company, and even from fund to fund within the same company. Market conditions will often dictate the size of the spread, the lower the spread the better for the investor. Some fees are declared as a percentage of your investment, others are built into the price.

Mutual funds, and unit trusts, can invest in many kinds of securities. The most common are cash instruments, stock, gilts, and bonds, but there are hundreds of sub-categories. Common areas to invest in are stocks in geographical areas, such as North America, Europe, Asia and so on. Or, they can invest in Emerging Markets, New Companies, companies with green credentials, small companies, or the bigger so-called Blue Chip companies etc.

Bond funds can vary according to risk, for example high-yield junk bonds or investment-grade corporate bonds, type of issuers such as government agencies, or corporations, or even the maturity of the bonds as in short or long term.

Smart Online Investment in Mutual Funds

October 30, 2014 Posted by admin

In the age of speed and the era of internet, when everything that you ever wanted to know and anything you ever wanted to purchase is available online, then why not investments?

Yes! Time is precious in our everyday busy lives. When shuttling between work and home takes much time on road and the rest of the day is packed between meetings and deadlines. In those few precious moments of peace that you get or steal, if you have to manage your money then it would be tough to personally go to an investment bank. It would be more than demanding to first get an understanding of investment types and policies and then get down to understand market, figure out ways to crack the technicalities, read the policy documents, zero down priorities in terms of lock in period, liquidity, etc. and all of it in person. Thus to simplify things, to save time and encourage people to invest in mutual funds, online investment was made possible.

Most of the investment banks have recognized that as people have got comfortable with online transactions, so has the investor. Earlier investment in mutual funds was a tall task that involved a lot of paper work, but with the increased popularity and usage of online mutual fund investment it has become evident that offline is pass� and online application is a shorter and a simpler process. All it requires is filling of a form, which can be submitted right away, hence no more standing in long queues. And since online transfer of funds is just a quick click job; transferred and commercial transactions happen in a jiffy.

When investing in mutual funds, it’s essential to know various plans, schemes and its features as well as the terms involved, that’s exactly why all this is clearly mentioned on the websites of almost all the Asset Management Companies (AMCs). Also, to further assist the user with their risk profiling websites of various investment companies like, Reliance Mutual seek some basic answers from the investor to get back to them with solutions. To facilitate smooth flow for your experience of online investment in mutual funds, there is everything from basic information of product offered, to market updates, to latest NAVs, scheme information, application form etc. available online. Also there are several tools and calculators, which further assist the investors to calculate their goals, SIP and estimate of corpus as well. With so much information accessible and that too all the time, investment in mutual funds is no longer a tedious process.

And having invested online in mutual funds, the investor is assigned a transaction pin and has a dashboard of his investments, where it can track the performance & transactions, check for additional information, dividends etc.

Balance your Investments with Balanced Funds

October 29, 2014 Posted by admin

What is a balanced fund?

A balanced fund is a fund in which investment is made in combination of equity class and debt class capital to ensure both income and capital appreciation on investment while avoiding excessive risk. In such investment, a mutual fund usually buys a combination of common stock, preferred stock, bonds, and short-term bonds. In other words, balanced funds reflect single mutual fund providing combined benefits of investment in stocks (for growth) and bonds (for income).

Key features

Balanced funds offer balanced solutions for those seeking stability and growth from their investment. Some of the peculiar features of such funds are as follows:

� Balanced fund seeks to optimize the risk-adjusted return by distributing assets between equity and debt capital.
� Such funds belong to “asset allocation” family. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum.
� Generally, an average balance fund maintains a 60:40 equity debt ratio, which means 60% of investment in equity and rest in debt capital. However, equity allocation in such funds can go up to 80% in bullish markets and even go down to 65% in bearish markets. Such allocation tends to reduce volatility of return by managing downturns in the stock market without too much of a loss.
� By investing in equity for capital appreciation and debt for stable returns, you can reduce instability of returns by increasing / decreasing exposure to various markets, based on in-depth research and analysis.

Investor Profile

Balance fund schemes provide benefits of both equity and debt scheme in a single fund investment. These funds are usually opted by
A) Investors looking for debt plus returns
B) Investors considering reasonable returns with equity and lower risk through diversification

Thus, balanced funds provides the twin benefits of growth from equity markets and steady income from debt market as well as lower volatility of returns and lower risk through diversification.
Most of us want to invest in top performing mutual funds to get best return out of our investment. In order to invest in right investment scheme, it is essential to understand different risks and rewards associated with each mutual fund. Generally, higher the risk, higher is the return associated with a mutual fund. Basically, there are three types of mutual funds:

1) Equity funds: Such funds principally invest in stocks. Such funds basically aims to maximize long-term returns from an optimally diversified portfolio invested in equity funds and related securities.

2) Fixed-income funds: A fixed income mutual fund promises a fixed rate of return and less of a risk than other mutual fund investments. In such funds, money is primarily invested in government and corporate debt. While fund holding may increase in value but the basic purpose of such scheme is to provide current income on a steady basis to investors.

3) Money market funds: It is an open fund in which money is invested in different equity and debt securities in money market such as Treasury bills, certificates of deposit, and commercial paper. The core goal of such investment is to preserve capital along with modest capital gains.

In order to make right investment, investor must define his or goals and desires in relation to the money invested. Whether one desires for capital gains or a current income, identifying investment goal helps to make right investment decision.

Arranging Commercial Finance for Auckland

October 26, 2014 Posted by admin

Commercial Finance Brokers

Few people are aware of the position known as a commercial finance broker which is regrettable due to the fact finance brokers actually have important services to provide.

The importance of commercial finance brokers lies in their expertise to arrange and close a commercial financial deal. The deals they can handle range from a mortgage on a building, through a lease, financing the purchase of new plant or even the acquisition of another company. Commercial finance is a complex and vast field. This is why a lot of people actually tend to overlook some of its aspects.

One of the reasons why commercial finance brokering is not a popular position is because there are already all kinds of lenders. Ordinarily, people will just go to banks to fund lease companies or fund their businesses. However, there are a lot of options to consider and that include commercial finance brokers. There are companies which interest lies in funding specific types of businesses or deals. For example companies finance dental practices while others provide commercial mortgages for property. The role of the commercial finance broker is to help business owners understand the complexities and get access to viable financing arrangements.

This Is Why Getting A Finance Broker Will Be A Good Idea
Hiring a broker does not instantly mean paying one. Brokers will give their best shot in scoring you the best possible deal. They only get paid when they successfully scored a deal. Sometimes brokerages might be paid a fee at the beginning to cover initial costs but not always.

A Broker will prepare finance applications
Any funding organisation will want to see the finance projections and performance of the potential borrower. Some of the documents you will need to present include balance sheets, and profit forecasts. You may also need an outline of the actual project you are looking to fund. The broker will be able to advise on how to present the documents and what needs to be included.

The broker will walk you through the whole process
If you don’t know anything about finance then the more you need to hire a broker. There’s nothing like the relief you get from knowing that you have the right person to tell you what you need to know.

Brokers match the right lender to their client
Lenders have their own areas of knowledge and experience. Asset financing which involves financing the purchase of assets such as equipment can be the target of some companies. Others will arrange financing for specific activities like business acquisition. Since you have a broker, your needs are considered and you’re likely to be referred to companies that are likely to be interested. This not only increases your chances of getting the right funding the best rates but also reduces wasted time in approaching the wrong lenders.

Brokers know what they are doing
Brokers for commercial financing provide sound advice to clients based on years of activity and experience in negotiating finance for their clients. A broker who knows what he’s doing can introduce you to companies that have the capacity to meet your needs.

So what can you expect from a broker?
If you are not confident of what you know, you can still have that sense of security if you get a broker who’s knowledgeable in the field. Your broker can help you from the writing the proposal to negotiating with the lenders. Also, you get to avoid the time consuming process which can be really stressful. You get to focus on the things that you are really good at rather than forcing yourself to get to know a difficult and tedious process such as funding application.

In addition, finance brokers do not have links with any finance providers and these people certainly work hard finding the best loaners to give you finances you want.

Should You Invest in Mutual Funds

October 26, 2014 Posted by admin

Bill Gates probably doesn’t invest in mutual funds (funds), maybe because most of his money is tied up in Microsoft stock. Warren Buffet made his billions by managing investments, so he does not need their help, either. But, if you have money to invest and don’t really know how to invest and manage an investment portfolio, you should consider investing in mutual funds. Millions of average investors do.

Keep in mind that mutual funds are designed for folks who want professional investment management at a moderate cost. These are not short-term investments, but rather are for people with longer-term investment horizons. Once you have cash reserves in the bank for short term needs like emergencies, you are ready to invest.

Should you invest in mutual funds? If one or more of the following apply to you, you probably should.

If you want to accumulate a nest egg for retirement, give these investment packages consideration. For example, if you have a typical 401k plan at work, most of the investment options available to you are mutual funds.

If you decide to open a traditional IRA or Roth IRA, consider going with a major mutual fund family. This will give you a wide array of investment options, from safe and conservative to aggressive and growth oriented.

If you want to start slow and learn how to invest as you go, you should invest in mutual funds. For example, you can set things up so that $100 a month automatically flows from your checking account to a couple of mutual funds within a fund family.

If you want to invest in stocks and/or bonds, but don’t know how to invest in them, join the crowd and do it the sensible and easy way with funds.

If you have a lump sum of money to invest from a retirement plan, a CD that matured or from an inheritance, look no further. For example, if you leave your job where you had money in a 401k, you can move it and avoid taxes and penalties with a direct rollover to a mutual fund family.

If you are retired and want to earn a higher return with relative safety, try bond funds in addition to money market funds. When you want to receive a monthly income, they will send you the amount you specify.

If you want an investment in real estate, oil & gas, or gold the easy way, invest in mutual funds and let them deal with the details.

It doesn’t matter if you are young or old, rich or of modest means, conservative or aggressive as an investor. You need an investment portfolio that contains a variety of investment types. Unless you really know how to invest and can manage your own stocks, bonds, and money market securities�you should invest in mutual funds.

Finally, if you don’t know much about investing�you’re probably a red-blooded American. As a financial planner I worked with folks from all walks of life. Few knew how to invest on their own, so I often recommended mutual funds.

The Basics to Know about Mutual Funds.

October 23, 2014 Posted by admin

Not paying attention the economic rise or fall, the broker is likely mostly to tell the investors to still invest. Depending on the time, he may say during the crisis, that there’s a tendency to go back up or while the economic augmentation, he can speak about a good basis to start.

Can we treat such a method to be right? Do we have to say “buy, hold, and prosper” or “buy, hold, and lose”? It’s like a resistance between Broker and Challenge. A simple case study will prove which method is more profitable. The investment broker will buy and hold a random mutual fund, and the investors will buy and sell the fund based on market conditions.

They buy the AIM Basic Value C (GTVCX) fund at the beginning of 2005 for the price of 30 dollars. The challenge will conclude on October 5th 2009.

Let’s examine a simple example in order to find out what way is more beneficial. The Broker purchases and holds a mutual fund, but the investors are going to buy and vendor the fund based on the market situation. As an example they may buy funds at 2006 for 50 dollars, The challenge will make the conclusion on October 5th 2009.

The broker saves during bad and good time. The investor made up his mind to utilize one strategy. Whether the fund falls more than some percent below its 350 days average, he will definitely sell it. But if it rises above 350 days average, the latter will buy and hold it.

When the broker loses 42.6% of his portfolio to the purchase and hold plan, the investor who is more flexible obtained a 10% augmentation for the same gap of time. Do we encounter often with such results? Yes. it happens. Regardless the lost transaction fees, the investor having bought during the augmentation and vendored during the fall came out eventually.

But does it imply that people who buy mutual funds have to actively run their portfolio? Yes and no. If the manager had to rule it actively with hedging strategies for failure markets – that would help. Otherwise, a bad manager may get wasting results no matter what the economic climate is.

The Investor of Actions

A good number of investors prefer to run their funds on full wings. But of course you need knowledge and a practical experience. Nevertheless, the money return is going to compensate all the time invested.

The rest methods, except that we discussed here, rely mostly on indicators. No matter what technique an investor utilizes or he has someone else to run his capital.

The comprehension of the present market will help to make appropriate decisions.

Learn to Calculate Your Mutual Fund Returns

October 18, 2014 Posted by admin

New investors often get confused by the terms fund managers use. It might seem like gibberish – but with a little effort though, you can understand it. So here’s a rundown on something that investors are most interested in – mutual fund returns. After all, isn’t that the whole reason for someone investing? The returns on your investments can be calculated in different ways. With some effort, you can learn to gauge how your fund is performing at given periods of time. Read on to know more about calculating mutual fund returns.

Investing seems quite tricky, but it can be simple when you understand the underlying basics. One of the many things that investors are often confused about is the return they get from their investment. They often believe that net asset value – or NAV – is an indicator of how much return they will get. This is by no means true – NAV is simply the price at which a share is bought or sold. However, NAV can help you analyse the fund’s performance over a period of time. Generally, the calculated time is the entry date and the exit date of the fund. This method is known as the point-to-point return method. Generally, the point-to-point method is preferred for periods shorter than a year. Now, using this method, if you were to calculate the increase in NAV between one day and another, you would get the absolute return. This is the change in price – also known as profit or loss – of the NAV. In other words, you express the change in your portfolio as a percentage.

But if you would rather know the change in your fund on an annual basis, then you can check the Compounded Annual Growth Rate or CGAR. It is more commonly called the annual return. The problem with this method of calculation is that you get the average return in a year. This means that you don’t know whether there has been a dip or rise in the interim. Usually, this is counteracted by the rolling returns method. This method employs continuous calculations for specific intervals. The intervals can be days, weeks, months or years. Suppose you hold a share for two years. Each day’s change will be calculated by the point-to-point method for the entirety of the two years. The average of trading days in a year will be taken as the rolling return for one year for your portfolio. Once you have the average rolling return for your portfolio, you can compare it with the average rolling return for the entire category. This will help you understand whether or not your fund has performed up to mark.

Calculating your returns generally helps you decide whether you want to continue holding a share or whether you would be better of ridding yourself of it. If you find that these methods are too complex to use on a regular basis, then you can make use of the many mutual fund calculators available on the internet. They usually save you a lot of hassle. But keep in mind that you sh\ould occasionally cross check your results by manual calculation too.

Bridge Financing

October 17, 2014 Posted by admin

Bridge financing is a method of financing, used to maintain business credit liquidity while waiting for an anticipated incoming cash flow. Bridge financing is commonly used when the cash flow from a sale is expected after payment for the purchase. An example would be when you sell a house and won’t receive cash for the house for 90 days, but you have already purchased a new house that requires payment within the next 30 days. Bridge financing would cover the 60 day gap in between payment.

Bridge loans are usually more expensive than conventional financing to compensate for the high loan risk. They typically carry a higher interest rate, points and additional fees that are amortized over a shorter period. The lender may also require lower loan to value ratios and collateral that would not be used in conventional financing. Although, they are also arranged more quickly and have much less documentation than other types of loans. Bridge loan interest rates are usually 12-15%, terms ranging less than 12 months. The loan to value ratios generally stay less than 65% for commercial property and 80% for residential, based on the appraised values.

Bridge financing is also typically done by banks underwriting an offering of bonds. If the banks are unsuccessful in bonds to qualified buyers, they are normally required to buy the bonds from the issuing company themselves, on terms that would be much less favorable than if they had been able to act as an intermediary and just sold the bonds to other institutional buyers.

Another type of bridge financing is used by companies before do an initial public offering. It is used to obtain the cash needed to maintain current operations until the stock goes public. Many times the company will offer stock at a discounted rate as payment towards the loan. It is essentially a forwarded payment on the anticipation of future sales. There are 2 types of bridging finance. Closed bridging and Open Bridging. Closed bridge financing has an exit date associated with the funds. This ensures that the loan can be repaid on this date and the interest rates are lower than open bridging. Closed bridging is less risky for the lender because it usually has terms of less than 12 months.

Open bridging loans have much higher risk for the lender. There is no exact end date on the funding although there may be set payment dates in order for banks to recoup some of the funds along the way.

Accounts Receivable Financing- The India Connection

October 17, 2014 Posted by admin

Accounts Receivable Financing- The India Connection explores the vast growing marketplace in India and how you can benefit from this trend by importing goods or exporting goods to this ginormous economy with accounts receivable financing.

India is one of the oldest civilizations in the world. Their history goes back over 10,000 years. India is the largest democracy in the world. As of July, 2007, the Central Intelligence Agency for the United States Government estimated that the population of India is over one billion, one hundred twenty nine million people. In contrast, the population of the United States is estimated to be a little over three hundred two million people. That’s 129,000,000 versus 302,000,000 people; India has over four times the population of the U.S. in a geographic area lightly more than one-third the size of the U.S.

India has the third largest economy and the second fastest growing economy in Asia. It has a vast pool of professional talent and an enormous reservoir of intellectual capital with a growing middle class.

India’s dense population creates economic opportunities and pressing internal social problems such as overcrowding, environmental degradation, poverty and social unrest. The economy and society are in a state of rapid transition. There are pressing environmental issues because of overpopulation such as air pollution from industrial effluents and vehicle emissions, water pollution from poor sanitary conditions and soil erosion.

According to the World Bank, about 380 million people in India live in poverty on less than $1 a day; this is about one-third of the population. Nevertheless, middle and upper class Indians have created immense wealth in an economy bursting with opportunities. India’s business climate is changing rapidly.

This social paradox is in some ways similar to the controversy in the U.S. over big box stores and their effect on smaller retailers. The same issue is debated in India regarding Western style supermarkets versus mom and pop stores. India has a child labor problem; the U.S. has a problem with illegal immigrants who tend to take the lowest paid jobs in the U.S., performing jobs that most legal Americans do not want to do. We live in a world of conflict, change and opportunities.

There are 14 official languages in India. Hindi is the national language. English is a secondary language used for national, political and commercial communication. India is the largest English speaking nation in the world. India’s legal system is based on English common law.

India’s economy is growing over 10% per year with a labor force of more than 500 million people. The Indian retail sector is growing at a rate of 47% per year. Manufacturing is expanding. There are large numbers of well educated people skilled in the English language. Today India is a major exporter of software services and software workers. Other major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining and machinery.

In 2006 India exported over $123 billion dollars of textile goods, gems and jewelry, engineering goods, chemicals, leather items; only 17% were exported to U.S. partners. Imports the same year were $184 billion dollars; less than 6% of this import business originated with U.S. partners.

What does this all have to do with accounts receivable financing? The expertise of a commercial finance company can be invaluable with regard to helping you succeed in India’s enormous marketplace. If you want to export goods to India, a commercial finance company will check the credit of the business in India that you are selling to; this can facilitate capital for exponential growth to creditworthy customers. If you want to import goods from India, purchase order financing combined with accounts receivable financing can help you to achieve the same goal of increasing cash flow to grow your business.

Albert Einstein said: “We owe a lot to the Indians, who taught us how to count, without which no worthwhile scientific discovery could have been made”. Mark Twain said: “India is the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition. Our most valuable and most instructive materials in the history of man are treasured up in India only”.

The bottom line: India is a land of great problems and great opportunities. Accounts receivable financing combined with purchase order financing can help you succeed in this vast democratic, English speaking marketplace.

Let’s Get The Ignition Running With Business Car Finance

October 16, 2014 Posted by admin

Business sector has increased manifolds in the last few decades and especially in a past few years. The reason for that being vested interests of many people in the sector and the kind of profile that the business follows. That is why it is essential to keep a good and pleasing profile in order to succeed or in order to do well in ones area of business. There are many that are necessary or at least play an important role in its successful running, one such thing that many people may notice are the cars.

Cars play an important role for a business, they can sometimes be the difference between the winning and losing of important contracts, tenders etc. They are kind of utilities that are missed when they are not there; in short, they are nowadays accessories that a business just cannot do without. So they are a must for any business. For businesspersons who cannot afford them, well! For them we have business car finance.

With Business car finance [], a business can finance for any of the cars available in the domestic or the international car market. So the full variety of the automobiles is available to the business runners. With this it helps both the small business and the large scale business people. Cars in business do not mean only luxury cars; they include all the automobiles that a business may need at any point of time in their business. It can be trucks, lorries or utility vehicles. So, that makes the business car finance an even more attractive proposition for the businessmen when we explore the full coverage area of the business car finances.

Cars usually help the business in the following way:

* Carry the delegates or the owners from site to site or from one premise to another.
* Luxury cars add to the value or goodwill of the business.
* Heavy duty cars help in transportation of stock from place to place.
* Owning a business car also costs less than a borrowed vehicle.

With these benefits it should not be that hard to imagine for anyone why to move in for cars.

Business car finance is an option that has emerged as a good option for any one who wants to buy cars, this option is similar to any loan that any one takes with similar options. The options include taking secured or unsecured business car finance, business car finance for people with both normal or bad credit history, and many other similar options that form the part of any loan deal. The same can be applied to how the borrower can apply for business car finance, just go online and fill out your forms and the finance would be available to you in no time.