Regular Savings - Essential Investors Guide

How to open a regular saving account

A regular savings account is just like any other type of investment account, in that all a person needs to do is approach any of the banks, building societies or other financial organisations that offer them.

The best possible way to decide on which type of account to open is to look at not only the interest rate paid, but to also examine the amount of bonuses the specific institution will pay to its regular investors. Nearly all of the accounts will have a tax free allowance of £25 per month, with anything over being taxed by the Government depending on your tax bracket - meaning that this issue does not need considering by the consumer.

There are no real restrictions regarding who can open a regular savings plan, although many places often have a minimum and maximum age limit, with 16-55 being the most popular. Although it is partially tax free, it also will not affect the standing of any Individual Savings Accounts or ISAs that the customer already has.

Paying money in to a regular saving account

With most regular saving plans there is a minimum amount to be invested per month, although this is usually only around £15. Although this is only a small amount, failure to pay it will have significant impacts on the amount of bonuses the account may receive. While there is a minimum, there is no maximum amount that can be paid in per month, although only the first £25 will be tax free.

The advantages of a regular saving account

The main advantage of this type of savings and investments is that there is a guaranteed lump sum payable at the time at which the account matures, which is set when the account is created. This provides the insurance that should the institution invest the money poorly, it will not be lost - meaning that there is virtually no risk associated with this type of account.

Another advantage is when saving for children, child savings accounts can provide an excellent kick start to their adult life. If a parent starts saving just £40 per month for ten years, they can expect a minimum return of £5,220, with most actually coming in at more than that. Aside from Government sponsored schemes, there is no more effective way that a parent can save for their child.

If you are interested in reading more information about regular savings and investment plans then please visit the following links:

Scottish Friendly - mutual societies such as Scottish Friendly supply financial services products. Mutual societies are owned by customers, or members. As a result they have no shareholders to pay dividends to, or to account to, so they can concentrate on delivering products and services that meet the needs of their customers.

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Child Trust Funds - Essential Investors Guide

There are some situations in which it is used to generate a better future for a loved one. That is certainly the case when one is investing in a child trust fund. A child trust account can be used for investing money that will later be used to pay for some expense in the future. Typically, the money in the trust fund is used to pay for a higher education or for a first home. Regardless of what exactly the money is being used for, it is apparent that it is being used by a loved one for something that is important.

The primary reason to set up a children trust fund is to give the money you put in it time to grow to much larger sum. It is for this reason that you set up children trust funds when the person is still a child. You might have a couple of decades or so to allow that money to grow before they are going to use it. When doing this, you are giving them a much better gift than just saving the amount that you would have invested. If you are interested in how to set up child trust funds at this point, it is vital that you know some of the basics. The primary thing to know is that you are going to need to speak to an investment broker to set this up. For this kind of an account, it is important to speak to an actual investment broker.

Trying to use an online broker will not be able to get you the results that you are looking for. A child trust fund account is a special type of investment. It is not something that you are likely going to go into and mess with that much. What this means is that you are not likely to change the types of investments that are contained within the child trust fund account that much. As such, it is important that you have the right investment company handling this account.

Start searching for the right company and the right type of account for your child. This research can easily be done on the internet. You just need to look up any number of different comparison websites. They will lay out the options that each and every broker has to offer. From there, you just need to select the plan that you believe will be the best for your child in the future.

If you are interested in reading more information about child trust funds and investment plans then please visit the following links:

Financial Services Authority [http://www.moneymadeclear.fsa.gov.uk/] - this is a useful site that provides unbiased money advice to help you manage your money better.

Scottish Friendly - mutual societies such as Scottish Friendly supply financial services products. Mutual societies are owned by customers, or members.

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Dividend Investing - Pros and Cons of Dividend Investing

Investing for dividends is an excellent way to participate in the stock market. Dividends represent the sharing of a company's profits with those who hold stock.

There are two kinds of stock: common and preferred. Common stock pays no or low dividends; preferred stock customarily pays a dividend on a regular basis. The investment return on common stock is from a hoped-for increase in the company's share price over time. The investment return on preferred stock is a combination of current payment of dividends as well possible long-term increase in share price.

An investor may purchase individually owned shares of companies which pay dividends. Or, an investor may purchase shares of a mutual fund which has the objective of owning dividend-paying stocks. The latter is generally considered a more conservative approach since your investment risk is spread out among the larger number of companies in the portfolio.

Pros of Dividend Investing:

1. Dividends create a source of cash for re-investment. There is a continuing stream of cash created by dividends. Re-investment of the cash in the purchase of additional shares is a great way to grow your portfolio.

2. Dividends create a source of cash for monthly income needs. At some point in your life, you will need income from something other than work. Having a flow of dividend income is a wonderful way of planning for your economic freedom.

3 Dividend investing benefits from dollar-cost-averaging. Constant re-investment of dividends over time creates an average cost basis. The theory is, that through continuous purchasing of shares, the average cost will be lower than the current price.

4. Dividends offer a source of earnings in a down market. Investor frustration and fears rise during a market decline. Dividend investors can take solace from the fact that there will be profits from their portfolio during the downturns.

5. Dividends pay you profit now. For many people, receiving money right now as profit on their investment is more comforting than waiting for the share price to rise. "A bird in the hand is worth two in the bush," is an adage you can apply to dividend investing.

Cons of Dividend Investing:

1. Dividend income is subject to ordinary income tax. Every year investors must pay income tax on dividends from stocks held less than one year. For stocks held longer than one year, the capital gains rate applies, fifteen percent for those people in the upper tax brackets.

2. Dividends are not a guaranteed payment. Dividend payments are subject to change. If the business of a company is not as profitable as it once was, the company may choose to lower or suspend dividend payments. The risk that any one company may have poor results may be lessened by diversification.

3. Dividend investors may not make as much profit on share price increases as common stock investors. Since dividends are a recognition and payment of profits, dividends are part of the company share value. With a common stock, most--if not all--of the share value comes from a rise in market price. Some investors believe that there is a greater potential return from common stocks. However, there may also be a greater market risk.

4. Dividend-paying stock prices may go down when yields rise in the market place. Companies that pay dividends compete with other investment choices. The dividend yield can be an attraction. However, when yields generally rise and investors can get higher yields elsewhere, the yield of a lower-than-market dividend may be offset by a lowering of share price to make up the difference.

As with any investment, you would do well to remain vigilant in assessing factors which affect the value of your portfolio. Take an interest in how your investments work. You will be more at ease in knowing what to expect.

Howard Feigenbaum is Registered Principal and Owner of Sharemaster, a Broker-Dealer firm that specializes in monthly dividend income funds.

"Do you know the only thing that gives me pleasure? It's to see my dividends coming in." - John D. Rockefeller

This article is a general discussion of the subject and is not intended as a solicitation or specific investment advice.

Copyright 2011

http://www.monthlydividendcheck.com/

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We Need an ETF for Private Space Flight to Promote Capitalization and Investment in Future

It's not that often that someone can get in on a new company, buy exactly the right stock, and perhaps foresee the future of a great new company rising. Wouldn't it be great if you would have bought original shares of Microsoft, Starbucks, Apple, Google, or some other major Fortune 500 company? You know, in the very beginning before the company stock doubled and split, doubled and split again, and then tripled and split, and then four more times did the same.

Interestingly enough, I know people who have bought shares in one of all of those companies in the very beginning, now they are all millionaires, if they had held on long enough, perhaps that's how they got rich. Of course, you could also invest in a startup company that went bust, went bankrupt, or just ran out of cash flow and disbanded itself. Not long ago, I was having a conversation about this at the local Starbucks, and I ended up in an ad hoc brainstorming session with the gentleman. We were trying to consider what new industries in the future that we should be targeting to get in on the ground floor.

We talked about new carbon nanotube and Graphene materials, we talked a little bit about various alternative energy strategies, we talked about flying cars, we discussed Rare Earth Elements (REEs) and mining, and we even talked about private space travel. Now then, let's say you wanted to get in on a new private space venture, one that you thought had a decent future, and was on the leading edge of private space technologies. Which one would you choose?

Remember, even though the industry may do incredibly well, there will be winners and losers in the free market. You could have easily invested in Silicon Valley dotcom stocks and lost all your money, or you might have invested in the correct ones, and retired a multimillionaire. Here are a few of the names of some of the up-and-coming private industry space companies;

XCOR
Space X
Virgin Galactic
US Aerospace Inc
Space Adventures
Bigelow Aerospace
Armadillo Aerospace
Whittinghill Aerospace
Masten Space Systems
Space Exploration Technologies

Now then, rather than trying to choose which one of these will be the grand winner of the game, and which ones won't be around in 10 years, wouldn't it be nice to have an ETF which diversified the risk? One fund so to speak, or some way to track this industry into the future, and make money investing in it - yes, that makes sense doesn't it?

If you think that this industry is in going places, and space is a place, then I suggest you read a very interesting article which was in the Wall Street Journal on August 17, 2001 titled; "Private Space Taxis Race to the Launchpad," by Andy Pasztor. You see, NASA has already awarded contracts to private space companies to take people back and forth to the international space station. As they become better adapted, these entrepreneurs will take people to move colonies, space hotels, and offer trips in orbit.

What we need is a good ETF to invest in and Americans will capitalize our private space flight future, and they will enjoy investing in that future in hopes of a good return. Indeed I hope you will please consider all this and think on it.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes writing 24,500 articles by August 24th or 25th will be difficult because all the letters on his keyboard are now worn off now..

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Cutting Back

The Hotline of Wednesday, October 12th recommended a change to the allocations for Venturesome and Conservative investors. The allocation for Moderate investors was left unchanged. The new allocations were prompted mainly by our view of the outlook for the domestic economy looking out over the next six months or so. The timing of our recommendation was influenced by the tremendous rally the U.S. market has undergone since October 3. We had already been contemplating cutting back; we felt the rally offered a unique opportunity to do so.

Specifically, here are the exact changes we recommend. For Venturesome investors we recommend a cut in the domestic stock fund allocation from 55% to 45%. We also recommend a cut in the international stock fund allocation from 35% to 25%. For Conservative investors, we are reducing the domestic stock fund allocation from 35% to 25%. A further recommendation is that the funds being raised by the sales be invested in money funds at the moment. This applies to both types of investors.

Why are we cutting back at the very time when the domestic economic news has improved and the Europeans are apparently serious about tackling the festering sovereign debt issue? We are cutting back because we are wary about the outlook for the U.S. economy over the next half-year. As we read the economic outlook, after absorbing the views of economists we respect, we have concluded that the economy will be facing extremely strong headwinds as we end this year and move onto 2012.

We are not looking for a recession, though the risk of one has risen, but for very slow growth. We expect growth to be slow enough that we might well say the economy is approaching stall speed. That is the danger as we see it as we move forward into next year.

The basic cause of the stall outlook is federal policy as set by the debt-ceiling agreement. We are already facing a substantial cut-back in Federal spending coming by the end of this year. There is another cut-back coming later, either from the recommendations of the Congressional "supercommittee" charged with cutting spending or, failing that, by automatic spending cuts extending throughout the Budget. Estimates of the impact of the budget cuts on the economy run from 1.5-2.0%. When this is subtracted from the economy's expected growth without the spending cuts, there is not much growth left.

Considering our outlook for the economy, it is legitimate to ask why we are sticking with equities at all. The answer is twofold. First-and very important-we are not looking for anything we can call a recession. A recession is not just two quarters of negative growth. It is something deeper happening to the economy, and that is not our outlook. We see no reason why profits cannot continue to grow under our outlook, though at lower rates than recently.

Second, the vast pool of investment money has to go somewhere. So long as there is some growth, cash, yielding zero, is unacceptable. At the same time, stocks remain cheap, though not quite as cheap as they were. This is a recipe for further flow of funds into equities. It is why we continue to favor stocks for risk-taking investors.

At the same time we recognize that risks have increased. Our new allocations are our recognition of that development.

Walter S. Frank has been the Chief Economist and Chief Investment Officer for Moneyletter for the past 25 years. He has had a long and distinguished career as an economist, financial advisor, and money manager. Mr. Frank is a regular contributor to Barron's and The Economist magazine.

For more information on the Moneyletter, visit our website http://www.moneyletter.com

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Gold Funds - The Smart Way to Ride Through Turbulent Times

The financial markets are having a tough time, inflation is on an all-time high, the credit crunch is hurting the business prospects, the stimulus has failed to put the economy on track, the job scenario of the is bleak, and the economy is shedding jobs every quarter- in all this conundrum and doldrums the only thing that has risen like a phoenix is Gold.

After the economies are hit by each wave of recession, the world has witnessed an era of super-inflation or hyper-inflation. Gold which has earned a reputation of acting as a hedge against inflation has been a solace for those who were wise enough to invest a part of their fortune in this precious metal during the heydays.

It is prudent to have 5% to 10% of the total investment in the form of gold. This will not only diversify the investment portfolio of an investor but also act as a hedge against inflation in the long term.

During times of inflation, the money/ cash that an individual hold become less valuable and thus reduces the purchasing power of the individual. But, at the same time if an individual has invested in gold or gold funds, he/she can be sure of the fact that the value they have invested will not come down in the long-term.

Even before the advent of the fiat currency, gold standard was dominant across the economies of the world. Hence, one can safely assert that gold is an international currency. Thus, any investor investing in gold funds or funds that invest in precious metals would be well-off than an investor who invests in the new-age financial instruments. In the face of terrorism and perpetual war, people are inclined towards buying gold as a safety reason.

Consider a scenario, if the currency of country an individual lives in falls drastically, gold will still be linked to international market prices. The demand for gold would always be there even if there are no takers for a particular currency in the international market.

There are three ways in which an individual can invest in gold.

1.By investing in a gold fund

2.By buying gold coins or bars

3.By buying the equity in mining companies.

The third option is actually very far-fetched as rarely a mining company goes public with stock offers.

The other two options are practical and hence can be undertaken. The only difference between buying physical gold and investing in a gold fund (mutual fund) is the convenience. Gold bars and coins in their physical form need to be safeguarded while the units of a gold fund are relatively easier to manage. It is similar to holding units of mutual funds such as DSP BlackRock India T.I.G.E.R. Fund.

As rising prices of gold has boomed the world, investing in Gold Funds was & is always a best deal. Be a part of award winning mutual fund company in India - DSP BlackRock.It offers you variety of mutual funds where you get the opportunity to explore & choose the best one.

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Invest in Fixed Income Fund for Long Term

Fixed income connotes a type of investment that does not deal with equity. Investments that are classified as such income, obligates the issuer/borrower to make regular payments at a pre-determined schedule.

Another meaning that can be derived from the term 'fixed income' is that it relates to a person's incoming cash flow that does not change with each given period. This may include incomes that are derived from investment instruments such as preferred stocks, bonds or even pensions that assure a fixed income. When retirees and pensioners are dependent on their post-retirement benefits as their only source of income, the term also carry a connotation that these retired people have limited discretionary income.

They are a good way by which one can diversify their investment portfolio. But, much clarity is required to understand what fixed income funds are?

Fixed income funds are a type of mutual funds that invest in municipal bonds, corporate bonds, treasury bills, etc. Fixed income funds come in many styles and shapes. In India, these funds are also referred to as income funds and debt funds.

Funds that are classified as fixed income typically make investments in debt securities which are issued by companies, banks, government or financial institutions. The various types of debt-securities in which a mutual fund invest are known as treasury bills and commercial papers of deposit. The instrument is categorized based on its maturity period. For instance, the debt securities are known as debentures and bonds, if their maturity period is more than one year; subsequently, if the maturity period is less than a year than they are referred to as commercial papers or treasury bills.

The borrower/issuer of these debt securities is obliged to pay the principal along with interest at the time period agreed upon.

These funds have a face value on which the rate of interest is calculated. Usually an investor who wants to invest in this fund is chiefly concerned with the face value, rate of interest, rate of interest payment, maturity value and time period. On an average, these funds are held till maturity unlike other mutual funds that see a lot of attrition.

In order to have long-term financial stability investing in gold funds is also the right thing to do. It is always advisable to have some amount of your liquidity to be invested in this precious metal. Gold has gained a reputation of acting as a hedge against inflation. As the rate of inflation rises, the money that you have will be less valuable. But on the other hand, gold being a rare and precious metal, its value will continue to ascend. That means the investment done in gold funds will never lose its value.

Nisha is an expert writer of finance sector, provides information about various kinds of mutual funds in India. She writes this article for Fixed Income Fund & Gold Fund investors. Explaining its advantages/disadvantages & attributes.

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