Archive for: ‘October 2014’

‘Now Is Right Time’ To Sort Out Finances

October 15, 2014 Posted by admin

Over half of Britons are not ‘financially fit’, a new study reveals.

Research carried out by Lloyds TSB as part of its bank mass index (BMI) suggested that the typical person is managing various areas of their finances, such as investments, unsecured debt and pensions, ineffectively. Basing its findings on the body mass index, the financial services firm pointed out that the average adult has a BMI score of 28. With this figure meaning someone is “financially overweight”, it was revealed that such people owe a “much greater” amount of debt than they have in savings. Overall, 46 per cent of consumers were revealed to be over-committed in a monetarily sense.

However, fiscal problems could be even more pronounced for the 12 per cent of adults revealed to be “financially obese”. With a BMI of at least 30, these people were indicated to be relying too much on credit as over a quarter of their income goes towards making repayments on unsecured borrowing.

Due to such difficulties with money it may be possible that significant numbers of consumers are struggling with loan and credit card repayments, in addition to having uncompetitive financial products such as pension plans and savings accounts.

On the other hand, 42 per cent of people are shown to be “fit” when it comes to managing monetary deals and offers. Meanwhile, young people and those living in Scotland were shown to be most likely to be financially unfit, in comparison to people from Wales and the south-west of England who are the most adept at managing money.

Commenting on the findings, Ian Larkin, managing director of consumer banking at Lloyds TSB, said: “Our physical health is something that the nation is taking increasingly seriously. Most of us know our body mass index, but our financial health seems to be less of a priority and often people have misapprehensions about the real state of their money.”

Research from the financial services provider also revealed that a quarter (25 per cent) of people lack the motivation required to sort out their spending, with 22 per cent of respondents believing that doing so is too challenging. However, Lloyds TSB pointed out that following its survey 16 per cent are looking to take immediate action to get to grips with money management.

“The Lloyds TSB BMI is a great wake up call for people who might have been neglecting their financial affairs – helping to put them on the right track. There has never been a better time to get Britain financially fit,” Mr Larkin added.

Furthermore, the firm advised consumers looking to sort out their money to examine their spending habits and set up a budget. Meanwhile, a debt consolidation loan was also advised as a means of quickly repaying monies owed on credit and store cards. Lloyds TSB also suggested that loans often attract a more competitive rate of interest than plastic borrowing.

By getting a debt consolidation loan, people may find that they can merge numerous demands on their finances into a single low-cost monthly repayment. This could be of particular assistance to those looking to get to grips with mortgage costs. A recent Abbey Mortgages study showed that about a third of homeowners – some 10.3 million consumers – state they would take out a fixed-rate mortgage if they were required to remortgage their property immediately.

Consumers Reluctant to ‘Discuss’ Finances

October 11, 2014 Posted by admin

Despite concerns about money management, Britons are generally unwilling to talk about their financial situation, a new study indicates.

In research carried out by Picture Financial, consumers are four times as likely to discuss ‘the birds and the bees’ with their family members than monetary matters. Overall, finances are ranked fourth on the list of “hot topics” talked about in the home coming behind sex, current affairs and religion. Meanwhile, just under two out of five (38 per cent) households argue more often about money than work relationships, television, family members or politics.

The news comes as more than three-quarters of Britons are concerned about their family’s financial management, with half of the population believing that lending through credit cards and personal loans is a good thing. These respondents added that, when used sensibly, borrowing can be an “acceptable means” of maintaining a certain standard of living.

Commenting on the figures, Julia Dallimore, marketing director for Picture Financial, said: “There is a sharp contrast in our willingness to talk about sex and current affairs compared with credit and borrowing. This reluctance to discuss our money can lead to a ‘head in the sand’ approach to our finances. Being more open with our money management and taking regular time out to review and sort our finances can make all the difference to our financial health.”

Behavioural psychologist Donna Dawson added: “Despite being a nation of regular credit users, we tend to shroud our family finances in mystery when we really don’t need to and as a result this can lead to unnecessary tension. We shouldn’t feel so restricted when it comes to discussing our finances with our family, as a lack of communication can impact not only on family life but also on our ability to take proper financial stock.”

The Picture Financial study also showed that younger people tend to have the greatest concerns over credit. Some 19 per cent of respondents aged between 16 and 24 were reported to be constantly worried about their finances, with this proportion falling to six per cent among those over the age of 55. However, young Britons were said they were reluctant to discuss their monetary situation as only seven per cent regularly talk to their family members about this subject.

In addition, older consumers are indicated as having a “more realistic attitude” to money. Just under half (48 per cent) of the over-55s claim that credit can be a good thing if used wisely, in comparison to 34 per cent of 25 to 34-year-olds. Britons in the upper age bracket were also reported to be honest about their finances, as 92 per cent have claimed to have never lied about money.

At the beginning of last month, Helen Saxon, a spokesperson for the Finance and Leasing Association, pointed out that credit uptake is decreasing due to the effect of recent base rate increases by the Bank of England over the last year. However, she claimed that borrowing can be “a good thing” if used well as it gives people the opportunity to make purchases they would be unable to do so otherwise and has in the past helped to support the British economy.

Rims Financing and Bad Credit Scores

October 10, 2014 Posted by admin

Rims Financing and Bad Credit Scores Credit scores have often been a requirement in applying for loans and financing. It can be both an advantage and a limitation. People who have good credit performance can easily avail for loans or financing. Most of the time, they are the ones granted priority. On the contrary, people who have bad credit performance are the ones often denied loans or financing. This is the reason why some of them would rather be stuck with what they have. When it comes to wheels, people find the need to replace their wheels when they have been damaged or deteriorated. The damages or deterioration can badly affect the car’s performance. Since car wheels can be really expensive, people would rather garage their car than spend money for it. Some, on the other hand, would still look for ways to get the wheels their car needs.Have you ever wondered how you can get your wheels financed despite having a bad credit score? Now, it has become possible for car owners and enthusiasts to purchase their wheels through rims financing despite bad credit scores. A number of financing companies are offering their services to both good and bad credit holders. Some even specializes with people who have bad credit scores. The point is, purchasing and owning the best quality wheels at the most affordable prices is possible even though you have bad credit scores.Car retailers or car accessory outlets offering in-house rims financing allow people to purchase wheels in good quality at the most affordable prices. They have also provided car owners and enthusiasts with a variety of rim styles and collections to choose from. You are not limited to specific brands for you car. You can choose the rim style which best suits your style without limiting your car to its original rim style or tire brand. These financing companies give you options unlike the normal car accessory retailers.In addition to these wide rim and tire collections, these financing companies give you the best rim and tire packages. People are encouraged to buy wheel package deals because it is rather cheaper to buy them together than separately. One tire alone can cost up to $600 while you can get these tires together with rims in a similar price. So, it is much better to purchase package deals if you want to have more savings. Also, package deals guarantee you perfect fitment. Once you get the wheels for your car, you can instantly change your wheels without worrying about wheel fitment problems. Since you are guided by car and wheel experts, it will be easier for you to find the perfect wheels for your car.Considering these amazing offers and services, you can easily change your wheels when you need such replacements. Do not let your financial situation prevent you from having the convenience through your car. With the rise of rims financing, you can easily get the best Rims financing for your car at the cheapest prices. Bad credit scores no more. Get your wheels financed now!

The Hedge Fund Vs. The Mutual Fund

October 10, 2014 Posted by admin

If you are considering investing in a hedge fund, you are not alone. Many people do not even know what this kind of fund is, and how it differs from a regular mutual fund. The truth is, they are not the same thing.

Some Of The Differences

Investments

A hedge investment does not always put money in publicly traded securities, as do mutual funds. These funds invest in a variety of things, whether it be art, real estate, web domain names, stocks, options, or other investments.

Restrictive

One of the things that separate them is that they are more limited about who can invest in them. Whereas mutual funds are open to anyone, you have to be an accredited investor to put money in hedge investments. Also, you often have to meet their net worth standards.

Similarities

Like mutual funds, the investors in these funds have to pay a performance fee to the manager of the fund.

Return on investment

These funds are still largely based on how the economy as a whole is performing. In some years, they average a 9% return on investment. Other years, it is significantly lower.

How To Find The Best One

A hedge fund can be a good or bad investment – it really depends on which one you go with. The important thing to do is to look at the past history of a fund beforehand. This will be the best predictor of its future performance.

The funds that have shown stable growth over the past 10-15 years are certainly better than a new fund that has no history, or one that has a negative track record. Long term growth is one of the best predictors of future performance.

The reality is that these funds can be a good investment, but you can do much better if you are willing to do the work on your own. While they can earn you a decent income, you can make a higher return on investment from putting money in individual stocks. In particular, taking a long term, value investing approach is your best option. This strategy can often net you returns of 15-20% per year.

How It Works

All you do is look for stocks of profitable companies that are undervalued, and invest in them. Stocks can become undervalued in the short term for a variety of reasons, many of which have nothing to do with the company’s performance. This is the time to take advantage of them, because long term stock performance tends to correlate to the company’s overall performance.

The way to find these companies is to look at their income statement. Try to find firms that have been profitable for the past 10 years, and that have low long term debt levels. Only once you know the company is performing well should you look at their stock price. If the market capitalization is 70% or less of the intrinsic value, it would be a good time to buy.

Conclusion

Putting money in a hedge fund is a good safe option if you are an accredited investor. However, you can do better as a value investor of individual stocks if you have the time and k

A Discussion of Commercial Bridging Finance

October 9, 2014 Posted by admin

Anybody who has ever arranged bridging finance for a residential property purchase will know how complicated the entire process of application can be, the situation is significantly more complex when it comes to arranging commercial bridging finance. Personal finance lenders consider bridging finance to be one of the most risky forms of lending; this statement is doubly true for commercial lenders.

There are however, some great opportunities for a knowledgeable commercial finance broker to arrange bridging finance that is not only cost effective, but will cover 100% of the actual property cost, making the capital investment for the short term an incredible 0%. Intrigued? Let’s take a look at how this is achieved.

Firstly we need to consider valuation, by choosing a lender that will allow the borrow to work from the open market value of the property, rather than the actual purchase price, the loan to value amount increases, which means that the actual loan is for an amount close to what you are actually paying for the new property. Many high street lenders will refuse to work from the purchase price and refuse to recognise such things as a good deal and any possible built-in equity in the new building.

Some lenders will also allow the borrower to roll the interest into the bridging finance, which means that no repayments will be due, as they have already been added to the loan value. This is a great way to secure a property which is going to take some time to secure, as your business will not need to find hefty load repayments each month.

It should be noted that this form of borrowing is primarily aimed at those needing to secure bridging finance in the form of a closed bridge, which, means that contacts have already been signed for the property deal, those who are seeking an open bridge will find matters far less flexible and may only be able to acquire 70% of the cost of purchase through bridging finance.

Whichever form of bridging finance you are seeking, either open or closed bridge, it is highly recommended that you seek out the advice and guidance of a qualified, professional commercial finance broker, they will be able to help you with preparing the mountain of supporting documentation that will need to accompany your application, including a well thought out business plan and fully audited accounts. A good broker will also have access to a far wider range of lender, and be able to source the most effective product for your needs, they will also act as the front line of communication between your company and the lenders themselves, this alone is worth the brokers fee, as dealing with commercial lenders is renowned as being complicated and drawn out. If you wish to secure your bridging finance in the shortest possible time, you are going to need a commercial finance broker to assist you with your bridging finance application at every stage.

Bike Finance – Own A Vehicle Through Low Cost Finance

October 8, 2014 Posted by admin

If you are thinking of taking out Bike Finance [http://www.bikefinance.org.uk] to purchase a bike of your choice, then ensure first that the loan is made available to you at low rate of interest and also that overall costs of availing the loan is less burdensome. But to ensure such a loan, you must keep these things in mind.

First of all, you should have a credit rating that is acceptable to the lenders. in other words, you should not be carrying many risks for the lenders, take out copies of your credit report from all the three credit rating agencies and make sure that it has no errors about the payments that you made in the past. If your credit rating is poor, then pay off some debts and apply for these loans with an improved rating,

It is advisable to make a good amount of down payment to the lender. Save the money for few months prior to applying for the loan. The higher down payment will ensure many benefits like low interest rate for bad credit borrowers and easy approval of the loan.

Depending on your requirements and circumstances, you can borrow bike finance in secured or unsecured options. For greater amount of loan to buy a new vehicle, the secured loan is made available against a valued property of the borrower. Low rate of interest is the main advantage of such a loan. The unsecured loan is meant for small borrowings, without collateral. Interest rate will be little higher. Repayment of both the secured or unsecured loan is made in 5-7years.

Bad credit borrowers too can take out bike finance once they are willing to make higher down payment. But they must repay the loan in timely manner or they will loose their property, in case of taking tout the loan in its secured option. Apply for the rate quotes of as many lenders as you can. This way, you can find out a suitable deal at low rate and fewer extra charges.

How to Choose a Mutual Fund

October 8, 2014 Posted by admin

You must know what you are looking for. For most investors, choosing a mutual fund is like hitting a mall without a what-to-buy list and end-up buying things based on the neighbour advice or a few advertisements. This does not work with investing. Just because it worked out well for your neighbour last year, does not mean it is going to do for you too, this year. To choose the right mutual fund for your portfolio, you must learn to shrewdly balance cost, risk and performance. Here is how
Analyze Yourself: To start with, take a candid judgment on your financial goals and risk tolerance. This will ease you to develop the right investment strategy. Are you willing to consider a fund that invests profoundly in stocks? The wavering stock market can greatly risk your prospective returns.

Be Familiar with Fund Styles: To choose right, you should get familiar with the idea of �EUR” fund styles. Knowledge about these fund styles helps you to include a blend of styles and make a good strategy based on diversification, which helps reduce risk. But it is important to keep in mind – diversification does not guarantee any profit or loss protection.

Look for Disciplined Fund Companies: The most important thing to always keep in mind while opting for a mutual fund �EUR” past performance is not necessarily indicative of the future returns. Go for relative study of the fund listings to recognize the most disciplined performers over the past 5, 10, 15 or 20 years while evaluating the right choice of mutual funds.

Check the Cost of Funds: The annual fees charged by the funds are represented by the expense ratio. It includes management fees, administrative costs, 12b-1 distribution cost, advisory costs etc. You should choose mutual funds with a substantially low expense ratio.

Track Record of the Fund Manager: The investment success may dramatically depend on the fund�EUR(TM)s management. Experts who select and monitor the fund should be evaluated on the basis of experience in managing a fund over a full market cycle, consistency in providing fine returns and strong discipline with sticking to an investment approach for longer terms.

Turnover: The annual turnover signifies how long a mutual fund holds on to a stock it purchases. The basic rule is �EUR” the longer it holds, the lesser the trading and lower the turnover. A 100% turnover implies all the fund�EUR(TM)s holdings have changed every year. Preferably, turnover should be less than 80% of mutual fund average.

Unjustifiable Load on the Fund: Some mutual funds charge sales load which is compensated to the broker and does not acquire any benefit to the investors. Load funds charge sales commissions which may fluctuate from 1% – 8%. It can be treated as a negative return on the asset with no extraordinary privileges for the investor.

How To Pick The Best Mutual Fund – The Ultimate Guide

October 7, 2014 Posted by admin

Picking individual stocks for your portfolio can be really difficult under the best of circumstances. Under the worst of circumstances it can be downright dangerous because if you make just a few bad choices you can lose your shirt quicker than you would think.

One way to save yourself from the dangers of investing in individual stocks, or even of investing in the stock market at all is to invest primarily in mutual funds. The problem then becomes, which mutual fund should you select? There are thousands of mutual funds and it can become a dizzying exercise in futility to pick the right one. Fortunately that is exactly what I’m going to talk about with this article today.

In order to select the best mutual fund for you and your specific portfolio requirements and risk aversion, you should follow five basic rules.

Those rules are one, diversify; two, analyze the funds performance over a very long period of time; three, look for funds that have a continuity of investment styles; for, use your money funds wisely if at all possible; and five, recognize any mistakes that you have made, cut your losses and move on.

Let’s talk about diversification. Everybody knows that you should diversify your stock portfolio, but most people don’t realize that you should also diversify your mutual funds. I recommend you pick at least three different mutual funds depending on your exact investment needs.

Now let’s talk about analyzing performance. You should evaluate the mutual funds performance over long periods of time and under different market conditions. All mutual funds do good during bull markets, but you should look to see how well your fund did during the last two or three recessions before you get the real picture about how well the fund will handle things in the future.

To say just a word on the continuity of style; you should always read mutual funds annual reports as well as proxy statements. From those reports you’ll see if your mutual fund has shifted its investment style drastically over the years and if they did then why did they do that? It probably means that what they were doing wasn’t working. You want a fund that has done the same thing for many years with success and hasn’t had to jump from fad to fad in order to find success.

I won’t say much about the rule about using your money funds wisely but you should find a money market fund that invests in the most secure things possible especially in light of the current recession and financial crisis or meltdown as it has been termed by some.

Finally recognize any mistakes and get the heck out of there. This one should be self-evident. We all make mistakes even in choosing bad mutual funds and it won’t take you very long to determine if this has been the case for you. If so, don’t wait for the market to turnaround in order for you to make your profits back, just cut your losses and find a better mutual fund.

Managing Mutual Funds

October 7, 2014 Posted by admin

You have learned about stocks and how to invest in them. Now you need to learn about mutual funds and how to invest in them. A mutual fund pools money from hundred or even thousands of investors to construct a portfolio of stocks, bonds, real estate, or perhaps another security.

Here are a few reasons why investing in mutual funds are a great way to save your money:

Mutual funds can be diversified. Usually investors will buy more than one kind of stock. They seek to buy a number to grow their portfolio. By diversifying, you reduce the risk without sacrificing your money.
You can manage mutual funds easier. When you buy mutual funds, you are actually using a professional manager to take care of your purchases. Mutual fund managers know how to handle and care for funds.

Mutual funds are easier to deal with. You only have one portfolio to deal with instead of hundreds of stocks.

Mutual funds are liquid. This means you can exchange them for cash quickly. Just put your order in during the time you need the money, and when the market closes a check will be issued to you.
Mutual funds cost less than stocks. You don’t have to invest a lot of money into them initially. Plus, when you do purchase more, you can buy small amounts with no trading costs.

Mutual funds are less risky than stocks. This is because of diversification. Instead of investing in one company, you may be investing in as many as 25-5000 companies.

Most mutual funds, you will find, require a small or moderate investment. This investment could be as little as a couple of hundred dollars to thousands of dollars. This method if investing is the best, because you don’t have to spend a lot to get started.

Mutual Fund Industry has a bright future – Cafemutual

October 5, 2014 Posted by admin

The mutual fund industry will never be the same again! Let’s face it – this is NOT an exaggeration. August 1, 2009, the date from which the SEBI ban on entry loads became effective, is a date that is going to be etched in the memories of the mutual fund professional for a long, long time.

But beyond the very loud and often cacophonous noises on the repercussions of the 01/08 event, there is a quiet revolution taking place that augurs well for the future of the industry. The revolution is so quiet that it has not been noticed; leave alone celebrated which it deserves to be.

In fact, I would not be making this claim about a revolution if we at Cafemutual [http://www.cafemutual.com] had not carried out this extensive survey of 622 Independent Financial Advisors (IFAs) across Mumbai and Delhi. Before I get into the key conclusions, it would be appropriate to share the context in which the survey was carried out.

The survey was carried out by Cafemutual to understand the professionalism and commitment levels of IFAs against the 01/08 backdrop of the ban on entry loads in mutual funds. While they are not resourceful as compared to banks and large distributors, IFAs provide depth and reach in distribution of financial products across the country today. Focusing on the retail investor, they represent the ground zero of the Indian retail financial services landscape. Their views and opinions matter because they, the ‘last mile’ in retail financial services can make or break a brand, a product category or even an industry.

Now, on to the major conclusions.

Conclusion 1. The Indian IFA is far more mature than what he/she is credited to be.

In spite of the pain of seeing an abrupt cut in their earnings, IFAs get the signal that the message was to convey. This is borne out by the research finding that the ban has prompted 31% IFAs to try charging fees to their clients. Significantly, 79% of those who tried were successful. So, one out of four IFAs has already made the transition from being ‘compensated-only-by-AMCs’ to being ‘compensated-by-clients’.

Conclusion 2. The IFAs recognize the need to become more process-oriented rather than transaction oriented.

In the survey questionnaire, we had deliberately given them a wide range of choices, camouflaging the language suitably in order to understand their values and approach towards their business. When asked, ‘what is required to be a successful distributor’, the top two responses were:

– Ability to identify client needs and match it with products
– Knowledge about investments and financial planning

Significantly, the last choice out of eleven choices was – Ability to push as many products as possible on clients!

IFAs have clearly realized that it is easier to acquire client assets and sell more products by using a process-oriented approach that looks at the client’s entire picture.

Conclusion 3. It is a big challenge for most IFAs today to maintain mutual fund business at the pre-ban level.

Only 6% said business has gone up. Another 23% of IFAs said business remains at the same level.

Conclusion 4. IFAs recognize the need to adopt more professional practices but need help on how to go about it.

One of the findings was that the IFAs felt the need to strengthen relationship with clients but have no clarity about how to do it. Most client interaction is unplanned and not systematic (Over 50% IFAs said we meet the client only when there is a need).

As a result, most IFAs are not able to harness the power of their existing relationships because they are not able to build deeper relationships. Following a systematic approach to relationship involving basics such as following a pre-set schedule for meeting clients on an ongoing basis or updating clients on their investments is not yet a part of their routine. The need for this is even more pressing as they have a large dependence on their existing clients.

Similarly, IFAs need to expand their ‘catchment areas’ and be aggressive marketers. Today, most don’t undertake ANY marketing activity. Very few have their own marketing material, newsletter or website.

Conclusion 5. IFAs remain optimistic about the future of the mf industry.

When asked about the impact of the ban on entry load on the future of the mutual fund industry, 57% believe that the SEBI ban on entry loads will have a positive (37%) or no (20%) impact on the future of mutual fund industry.

Doomsday prophecies about the imminent demise of the industry were a little overdone. Even though the impact of the ban had been adverse for the earnings of IFAs in the short term, IFAs continue to be optimistic about the future of the industry.

Summing up, distribution is often held to be the weak link in the chain of financial services. The ground reality is that they realize the mantra for success is ‘doing what’s best for the client’ in an ethical and professional manner. And that is worth a toast!