Buying Investment in Real Estate during a Recession

While most economists see that the U.S. economy no longer in free fall, I remain apprehensive about buying investment in real estate. You cannot blame a little skepticism on how the projected economic rebound is going, and me, if I remain unhurried.

I share, probably, the sentiments of many that as long as there are no clear and solid indications that this economy is gearing towards recovery, I will keep my money away from any form of investments, especially on property. Although, the current fall in selling prices is too tempting to ignore, for example, the buying and selling mood in Missouri real estate.

Investing always entails many risks. But seasoned and smart investors understand that making sound investment and financial decisions should not only be made based on the condition of the economy and how the market is behaving. There are still other important factors to be considered other than these obvious conditions. In addition, and in fact, we have seen and heard of stories of self-made millionaires who made more money when they invested regardless of the state of the economy.

So, where do these things lead us? The question I posed remains: Should buying investment in real estate during a recession a good financial decision?

In my mind, it is a ‘yes’ and a ‘no’. Yes, because the prevailing low prices in properties on sale and the all time high rates in property foreclosures signify a possible good yield when the economy gets better. Of course, this means taking an optimistic stance. On the other hand, it is a ‘no’ because it could mean having your money tied for an uncertain period of time, with which you could have placed them on other high-yield investment ventures.

In all these, I’d like to take the position of Tim Blixseth, one of America's richest:

I swore I was going to exclusively collect assets and not liabilities for the rest of my life. I swore never to take gambles I couldn’t back up, or that I couldn’t afford to lose. And, I’ve stuck with that ever since.

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Posted by Nor on 7/01/2009 2 comments

Save the Money, Save yourself | Saving Tips worth Trying

Money saved is money earned. How many of us believe that, or practice that consistently? I have always believed that when you save a portion of the money that you earned, you will eventually save yourself in times like these.

Alright, there are obviously many ways to save money and lead a frugal life without necessarily becoming a Mr. Scrooge.

Money problems will always torment if we do not learn how to save and practice frugality. It is important to know how to manage money efficiently to ensure bulky savings. We should make it a habit to ask ourselves whether to save a portion of what we have to spend now or whether to spend at all. Here are a few money saving tips worth trying:

1. First, in case of large investments, you might want to consider seriously the ROI or Return on Investment before you make the decision. The bigger the investment you make, the greater the risks you take. Between buying a brand new and used car, which do you think can provide a good ROI?
2. Buy in bulk and buy items on sale, but not at the expense of quality.
3. For financial investments, like stock or day trading, follow the golden rule of buying volatile stocks when the price of an item is down and sell it when it is high. The profit thus earned can be invested in the equity market for steady items.
4. The internet has provided the best opportunities to shop for the best price before you make a purchase. This means that you can conveniently compare products and prices.
5. Create a monthly budget to the essential items you need, and stick to it.
6. Plan what you eat on a daily basis ensuring you hey proper nourishment. You do not only save money from proper food planning, you stay healthy and thus eventually save money from medical expenses.
7. Pay your bills on time. This way, you save money from interest rates charges and penalties.
8. Last, but not the least, prioritize, prioritize, and prioritize. When the most important things are taken care of, you will notice you will have surpluses from your budget, which you can add to your savings.

Start saving today!

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Posted by Nor on 6/16/2009 2 comments

Recession and Satellite Internet

What is the connection between the two, you probably have asked.

To some degree, there may be a correlation between how fast the internet has encroached our way of living and doing business, and with how and where our economy is headed.

When Alexander Graham Bell made the first call on his new invention, a.k.a. the phone, it awaken the civilization into the possibility of communicating through the wires. With that, the industrial revolution was hastened, commerce grew exponentially, and connecting with other people has been made convenient and easier.

Then the mobile phone came in –you know the rest of the story.

Now, satellite internet. With a cellphone, you can call anyone, anywhere. With a GPS, you will never be lost. Now, with wild blue satellite internet, you can virtually access the wealth of information over the net that is actually perpetually growing every second. The likes of Wild Blue, have enabled internet access possible anywhere and even the in the remotest locations.

Ironically, with this technological breakthrough, we have driven our economy backwards. I am undecided whether this is a simple oversight or an utter neglect on our part. With the advancement of technology and the availability of information, these would have made us better stewards of our resources. But unfortunately, we were not.

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Posted by Nor on 6/16/2009

3 Important Elements on Day Trading Investing Basics

In my first two years working after college, I was also among many business graduates who got lured into pursuing a career in stock trading and finance portfolio management. In my case though, after a month of training, I lasted only a couple of months. I resigned and took a job on sales instead.

One of the reasons I quit too soon is because I do not have the guts to take the necessary risks in day trading.

The senior stockbroker assigned to train me and monitor my progress is successful to some degree, and he seem to enjoy both the euphoria and frustrations stemming from the results of the day's trading – I don’t.

But over the years, and as I steadily climb the corporate ladder, I began to fully appreciate what is going on the trading floor, although I am now a fence sitter of sort. I bought several stocks and bonds as part of my personal investment, and tried to monitor any changes in their values from time to time.

In my mind, there are at least 3 important elements in day trading investing basics, namely: money, knowledge, and a plan.

Money

In spite of the data and analytical tools available, stock trading is still unpredictable. It is so dynamic that you can be rich overnight, and broke the next day. Hence, you need to be prepared to use money that you can afford to lose. Otherwise, if you have places all your savings upfront, you might find yourself sleeping on the pavement when the trading day is over. The key here is prudence. That is, taking it slowly and building your portfolio from the profits you gained from successful trades, and rolling them out when you deemed favorable.

Knowledge

Never rely entirely on what your financial advisor or your friend tells you. Learn what is going on the floor and in the market. Buy and read good books on the subject, there are many to choose from out there. Read trends and analysis made by experts online or from newspapers.

If you are contemplating day trading as a career path, you might want to consider getting the right training from the experts like what they offer at TradingAcademy.com.

Considered today as the leading trading school in the world, Trading Academy.com offers extensive and effective training on the rudiments of day trading in any market conditions. Their courses, classroom and online courses were designed for the novice and the experts, traders and investors alike whose primary goal is to provide the right competencies in trading.

The bottom line here is getting all the information and skills you need to help you in your trading decisions. To hammer the importance of this point, Alan Greenspan spells this to us more accurately:

It has been my experience that competency in mathematics, both in numerical manipulations and in understanding its conceptual foundations, enhances a person's ability to handle the more ambiguous and qualitative relationships that dominate our day-to-day financial decision-making.

Plan

Presumably, you have now the money allocated, and have the basic competencies to start trading, then you need to draft an investment plan that you can refer from all the time. This investment plan will help you organize your investments and keep you on track.

Stock trading is stressful for both the investor and professional trader. As an investor, you need to be a step ahead always. Your plan should include not only how much you are going to invest, buy or sell, but also the rationale and timetable behind those investments. It should also include your exit point (the price that you will sell your investment at to take profits) and the time you want to allocate for your investments each day, which involves monitoring and studying their movements. This plan is your trading blueprint, and it will help you reduce unnecessary errors and run into unnecessary risks.

Again, I am speaking from a layman’s perspective here. There is still no substitute from an expert’s advice, which you should refer to more often.

Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. ~ Sir John Templeton

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Posted by Nor on 6/15/2009 0 comments