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Savings: Where to earn the best interest on your money right now

Savings Where to earn the best interest on your money right now

If one of your New Year's resolutions is to grow your savings, one smart strategy is to keep your money in an account earning the most interest.

The Federal Reserve has been slow to raise interest rates, and even recent hikes haven't trickled down to consumers in the form of better savings yields. The average savings account offers a paltry 0.19% annual return, only slightly better than a year ago, according to Deposit Accounts.

Some experts say that money could grow faster at online banks. Some CDs, or certificates of deposit, are also more generous than others.

"If you're not seeking out the best returns on savings accounts and CDs, you're leaving money on the table," said Greg McBride, chief financial analyst at Bankrate.com. "It's the only place in the investment universe where you can get extra returns without extra risks."

These accounts are protected by the Federal Deposit Insurance Corporation, a government agency that provides deposit insurance, for up to $250,000.

Savings accounts

Online banks, McBride said, are currently in an "arms race" to lure people with the best rates.

Although current "best" rates of around 1.5% still seem low — one could find savings accounts with a 4% annual percentage yield in 2006 — experts say they make sense in the current environment.

"We had record low interest rates for nearly a decade, and inflation is still 1.6%," McBride said. "When banks are giving car loans for 3% and mortgages for 4%, no one is getting 10% on savings."

People are also less likely to look to the past than they are to compare today's rates against each other, said Patricia Seaman, senior director of marketing and communications at the National Endowment for Financial Education.

"People feel good about saving 5 cents a gallon on gas, so they feel better about getting another half a percentage [on their savings]," she said. "We may not be talking about very much, but psychologically, that looks amazing."

Here are some of the banks with the best savings yields:

1) Dollar Savings Direct, a division of Emigrant Bank, claims to have "America's highest rate." Saving accounts come with an annual interest rate of 1.60%.

"It's a smaller Internet bank, but it's still a legitimate, FDIC [Federal Deposit Insurance Corporation] insured bank," said Ken Tumin, founder of the website DepositAccounts.com.

2) Marcus by Goldman Sachs offers online savings accounts with an annual interest rate of 1.40%. "Goldman Sachs seems to be a little hungrier for deposits," McBride said. First National Bank of Omaha also offers an annual interest rate of 1.40% on a savers' online account. Neither requires a minimum deposit.

3) American Express's savings accounts accrue at 1.35% a year.

4) Discover online savings accounts come with a 1.30% annual interest rate. In this account, $15,000 would produce a return of $194.74 in a year. To compare, that same amount in a Chase savings account would earn just $1.50. Barclays, too, offers an online savings account with an interest rate of 1.30%.

5) Synchrony Bank offers a savings account with a 1.30% annual return — and its accounts come with an optional ATM card, although like with most online savings accounts, there is a limit of six withdrawals or transfers in a month. Although this restriction might feel like a nuisance, it's actually helpful to people, McBride said.

"Too easy access can defeat the purpose of saving," he said.

Certificates of deposit

For savers who won't need their money for an extended period of time, interest rates on CDs can be worth a look. The average 1-year CD returns 0.28%. Rates from online banks, however, are also higher.

People generally can withdraw their CD interest at any time throughout the term. There are penalties for withdrawing the original deposit.

"If it helps you to think, 'I can't get that money', it's worth it," said Seaman.

Here are some CDs with the best rates:

1) Online bank Ally has one-year CDs that range from 1.35% to 1.70%, depending on how much is deposited. Savers should look for CDs with the lowest penalties, said Allan Roth, founder of Wealth Logic. That way they can gain the benefit of a high interest savings account without the restrictions of a CD. "If you need the money, you break the CD," he said.

2) Marcus by Goldman Sachs also offers certificates of deposits with higher-than-average returns, although there is a $500 minimum deposit. A one-year CD comes with a 1.65% interest rate, and a six-year CD has a 2.55 percent annual rate.

3) Barclays offers a 1.65% return for one-year CDs; five-year CDs will deliver 2.40 percent and there is no minimum opening deposit.

Savers can also "ladder" their CDs, in which a person deposits money into, say, a one-, two- and three-year CD, so that they're not tying up too much of their money at once and can reinvest their savings should rates rise.

It can be hard for people to spend the time and energy to change their saving ways, Roth said. People need to "fight that inertia."

"I know so many people that will complain about a sandwich being $12 when it should be $10," he said. "And yet they lose thousands of dollars each year by having their money in a big-name checking account."

Keep in mind you'll pay ordinary income tax rates on earnings from savings accounts.


Akaho Kitamura jan 30, 11:51
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Knowing When To Invest — It's Not When You Think

Startup investing is a funny thing. Sometimes it feels like you are on fire. You see exciting companies and founders coming one right after another. Other times, nothing coming through the pipeline feels quite right, no matter how many you are seeing. After experiencing several of these hot and cold cycles, I was curious how normal this is. I decided to take a look.

Let’s begin with an idea that many investors strive for: investing at a steady pace. Simple, right? Investing at a steady pace sounds intuitive enough. The only problem is that it's a bad idea.

The reality is that the best opportunities are not evenly distributed over time. Randomness is clumpy. If you invest in only the best opportunities, whenever they arise, you will have busy and slow periods. Smart investing plans for the clustering.

Consider the math. I randomized 10,000 scenarios to understand how the ten best investments I see every year will be distributed over that time. The results are interesting for any investor. If you want to run your own scenarios, feel free to use the basic model I built here.

I target ten investments a year. You might think that I would aim for 2-3 investments per quarter. But actually, the randomized scenarios make it clear that a “normal” quarter only happens half of the time. I am just as likely to have a sleeper quarter (0-1 deals) or a slammed quarter (4-6 deals).

A few other highlights from my analysis:

* In 3 out of 4 years, there will be one sleeper and one slammed quarter—big ebbs and flows are the norms. You should plan on this, not on steady investing over a year or a fund's life

* In 1 out of 3 years, half or more of the best opportunities will come in a single quarter

* In 1 out of 4 years, you will have a quarter with zero opportunities

The lesson is clear: investors who try to invest at a steady pace will not be investing in the best opportunities. To only invest in the best companies, you need a flexible investing calendar.

This math assumes that the best deals are randomly distributed throughout the year. If you believe that there is seasonality driven by accelerators, school graduations, or founders quitting jobs at the end-of-year, then the opportunities will be even more clustered.

I struggle with this myself sometimes. Recently, I had made two back-to-back investments when a third exciting startup also caught my attention. At the time, I questioned whether I was being too eager, perhaps having too optimistic an outlook that month. The reality, though, is that opportunities very often cluster, and I did make that third bet—a clear win in hindsight.

There are of course some advantages to investing at a steady pace. Remaining active in the market keeps your networks active, your brand fresh, and your knowledge relevant. It simplifies planning for a fund's manager and limited partners. And it prevents you from letting good opportunities pass you by, waiting for a perfect deal that doesn't exist. Venture will always be about taking risks and putting your neck out there.

So, how do you know when to bet? The key is to find balance.

The wrong approach is to hold yourself and your team to strict investment quotas per quarter or year. A better approach is to set a range that incorporates the natural ebbs and flows of randomness, and to discuss expectations with your team and limited partners. Running scenarios against your portfolio size and investment period will help you understand the clumpiness expected in your own model.

Understanding the randomness of opportunities will help you plan smarter. Steady investing, rather than pursuing the best companies when they actually are ready for investments, will ensure sub-par investing and returns. It will cause you to miss out on excellent deals—don't make that mistake.


Akaho Kitamura oct 19 17, 06:17
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Bellmore Group Management Services, Tokyo Japan on Company Overview

Professional Expert Advisors

Bellmore Group is an autonomous brokerage and investment banking company that offers an assortment of financial services and products. Consultative and investment strategizing services are also offered. Whether you are investing for your retirement, saving up for your child's education or looking for other financial opportunities, our workers will furnish the information, insight and capability you need to attain your objectives. Numerous investors depend on the know-how, skills and reliability of Bellmore Group. Discover what being number one feels like; at Bellmore Group our top priority is you.

After more than ten years since the founding of Bellmore Group, so much has improved. Our firm has transformed from being a conventional brokerage company to a complete-service financial banking, consultancy services and brokerage company. The company maintains our vision to instill our family-first values through each member of the Bellmore Group team. Bellmore Group remains centered on its most valuable resource - its people, because every member of our executive group has managed portfolios, and the firm is ever committed to focus on improving the support and capability accessible to our independent representatives.

When to consider investing stocks?

Stock investing can enhance your financial portfolio by allowing you to attain growth, profit from dividends or achieve both.


Akaho Kitamura dec 8 16, 04:08
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10 Habits to Develop for Financial Stability and Success

10 Habits to Develop for Financial Stability and Success

Just like any goal, getting your finances stable and becoming financially successful requires the development of good financial habits.

I’ve been researching this topic extensively in the last few years in my quest to eliminate debt, increase my savings and increase financial security for my family.

I’ll talk more about these habits individually, but wanted to list them in a summary (I know, but I’m a compulsive list-maker).

Here they are, in no particular order:

1. Make savings automagical

This should be your top priority, especially if you don’t have a solid emergency fund yet. Make it the first bill you pay each payday, by having a set amount automatically transferred from your checking account to your savings (try an online savings account). Don’t even think about this transaction — just make sure it happens, each and every payday.

2. Control your impulse spending

The biggest problem for many of us. Impulse spending, on eating out and shopping and online purchases, is a big drain on our finances, the biggest budget breaker for many, and a sure way to be in dire financial straits. See Monitor Your Impulse Spending for more tips.

3. Evaluate your expenses, and live frugally

If you’ve never tracked your expenses, try the One Month Challenge. Then evaluate how you’re spending your money, and see what you can cut out or reduce. Decide if each expense is absolutely necessary, and then eliminate the unnecessary. See How I Save Money for more. Also read 30 ways to save $1 a day.

4. Invest in your future

If you’re young, you probably don’t think about retirement much. But it’s important. Even if you think you can always plan for retirement later, do it now. The growth of your investments over time will be amazing if you start in your 20s. Start by increasing your 401(k) to the maximum of your company’s match, if that’s available to you. After that, the best bet is probably a Roth IRA. Do a little research, but whatever you do, start now!

5. Keep your family secure

The first step is to save for an emergency fund, so that if anything happens, you’ve got the money. If you have a spouse and/or dependents, you should definitely get life insurance and make a will — as soon as possible! Also research other insurance, such as homeowner’s or renter’s insurance.

6. Eliminate and avoid debt

If you’ve got credit cards, personal loans, or other such debt, you need to start a debt elimination plan. List out your debts and arrange them in order from smallest balance at the top two largest at the bottom. Then focus on the debt at the top, putting as much as you can into it, even if it’s just $40-50 extra (more would be better). When that amount is paid off, celebrate! Then take the total amount you were paying (say $70 minimum payment plus the $50 extra for a total of $120) and add that to the minimum payment of the next largest debt. Continue this process, with your extra amount snowballing as you go along, until you pay off all your debts. This could take several years, but it’s a very rewarding process, and very necessary.

7. Use the envelope system

This is a simple system to keep track of how much money you have for spending. Let’s say you set aside three amounts in your budget each payday — one for gas, one for groceries, one for eating out. Withdraw those amounts on payday, and put them in three separate envelopes. That way, you can easily track how much you have left for each of these expenses, and when you run out of money, you know it immediately. You don’t overspend in these categories. If you regularly run out too fast, you may need to rethink your budget.

8. Pay bills immediately, or automagical

One good habit is to pay bills as soon as they come in. Also, as much as possible, try to get your bills to be paid through automatic deduction. For those that can’t, use your banks online check system to make regular automatic payments. This way, all of your regular expenses in your budget are taken care of.

9. Read about personal finances

The more you educate yourself, the better your finances will be.

10. Look to grow your net worth

Do whatever you can to improve your net worth, either by reducing your debt, increasing your savings, or increasing your income, or all of the above. Look for new ways to make money, or to get paid more for what you do. Over the course of months, if you calculate your net worth each month, you’ll see it grow. And that feels great.


Akaho Kitamura nov 28 17, 03:53
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Investment TIPS to Care About

Back in 1997, the U.S. government issued Treasury Inflation-Protected Securities (TIPS), which are backed by the credit and full faith of the government and guarantees that their value will not be eroded by inflation; thus, providing risk-free asset for investors in the U.S.

Both TIPS face value and coupon payments are indexed to keep up with inflation and to protect buying power, while their returns are set in real inflation-adjusted terms.

Under positive inflation (versus deflation) conditions, actual returns are below the nominal gains quoted on traditional (without inflation adjustment) bonds. Estimating for the real interest rate, we get:

real interest rate = nominal interest rate - expected inflation rate

Or, to be more exact, the actual formula using these variables will be:

(1 + nominal interest rate) = (1+ real interest rate) * (1 + expected inflation rate)

We determine nominal interest rates by adding the compensation expected to keep up with inflation and a real interest rate of return for the investment. Surely, bond prices and interest rates can be impacted by supply and demand. And real interest rates may take a negative value, as mentioned above.

Of course, investors hope for a positive nominal return on investment (the very reason for investing, obviously); however, the gain might not catch up with the inflation rate. TIPS, compared to conventional bonds, provide returns which are quoted as real interest rates.

TIPS nominal returns cannot be predicted in advance since they are determined by the actual inflation experienced. It also follows that nominal returns can be determined for conventional bonds; however, their real returns can only be determined after monitoring the realized inflation track until the maturity date.

Adjustments of inflation for TIPS are set to the Consumer Price Index for All Urban Consumers (CPI-U). Such adjustments are observed according to the “accrued principal,” a dedicated term used for TIPS.

Accrued principal is the value after due adjustment for inflation of the original face value at the time the TIPS was issued. Inflation adjustments for TIPS are achieved through the coupon rate being paid on the accrued principal value, not on the value of the nominal initial face.

Likewise, during maturity, the investor gets back the accrued principal, not the nominal face amount. An inflation-adjusted value is paid at a real coupon rate and an inflation-adjusted value is paid at maturity.

During deflation, the accrued principal can go down; however, it is protected against dipping below its original par value. What this signifies is that TIPS on the secondary markets having lower accumulated principal can provide higher protection during deflation, considering all other factors unchanged.

On the other hand, deflation that is not substantial enough to make the accrued principal to drop below its original par value will adversely affect TIPS in relation to conventional bonds. As a general rule, the goal of TIPS is to protect investments from unpredictably high inflation; thus, acquiring TIPS with a lower relative accrued principal is a supplementary factor in selecting certain TIPS to buy.

TIPS are available in nominal dollars. The ask price for TIPS on the secondary market is set in real terms, quoted as a percentage value of the accrued principal after adjustment for inflation. The actual price paid is computed as the ask price multiplied by the accrued principal, then divided by 100.

Since 1997, TIPS bonds and notes have been issued. From that time until the middle of 2002, every TIPS auction covering different maturities yielded an initial real return over 3%.

Fortunate investors in 1998 and 1999 could have acquired 30-year TIPS giving almost 4%, while 10- and 20-year TIPS gains were more than 4% in 1999 and 2000. TIPS yields have dropped since then.

A TIPS auction for a five–year note conducted in October 2010 made news as the real yield dropped below zero (at negative 0.55%) only for the first time. Buyers of such issues have resigned themselves to returns not protected from inflation.

Although unusual then, negative returns for TIPS have recently become a more common occurrence nowadays.


Akaho Kitamura mar 30 17, 12:21
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Terms & Condition of Use for Bellmore Group Management Services, Tokyo Japan

1. Terms

By accessing this web site, you are agreeing to be bound by these web site Terms & Conditions of Use, all applicable laws and regulations, and agree that you are responsible for compliance with any applicable local laws. If you do not agree with any of these terms, you are prohibited from using or accessing this site. The materials contained in this web site are protected by applicable copyright and trade mark law.

2. Use License

a. Permission is granted to temporarily download one copy of the materials (information or software) on Bellmore Group's web site for personal, non-commercial transitory viewing only. This is the grant of a license, not a transfer of title, and under this license you may not:

· modify or copy the materials;

· use the materials for any commercial purpose, or for any public display (commercial or non-commercial);

· Attempt to decompile or reverse engineer any software contained on Bellmore Group's web site;

· remove any copyright or other proprietary notations from the materials; or

· transfer the materials to another person or "mirror" the materials on any other server.

b. This license shall automatically terminate if you violate any of these restrictions and may be terminated by 

 at any time. Upon terminating your viewing of these materials or upon the termination of this license, you must destroy any downloaded materials in your possession whether in electronic or printed format.

3. Disclaimer

a. The materials on Bellmore Group's web site are provided "as is". Bellmore Group makes no warranties, expressed or implied, and hereby disclaims and negates all other warranties, including without limitation, implied warranties or conditions of merchantability, fitness for a particular purpose, or non-infringement of intellectual property or other violation of rights. Further, Bellmore Group does not warrant or make any representations concerning the accuracy, likely results, or reliability of the use of the materials on its Internet web site or otherwise relating to such materials or on any sites linked to this site.

4. Limitations

In no event shall Bellmore Group or its suppliers be liable for any damages (including, without limitation, damages for loss of data or profit, or due to business interruption,) arising out of the use or inability to use the materials on Bellmore Group's Internet site, even if Bellmore Group or a Bellmore Group authorized representative has been notified orally or in writing of the possibility of such damage. Because some jurisdictions do not allow limitations on implied warranties, or limitations of liability for consequential or incidental damages, these limitations may not apply to you.

5. Revision & Errata

The materials appearing on Bellmore Group's web site could include technical, typographical, or photographic errors. Bellmore Group does not warrant that any of the materials on its web site are accurate, complete, or current. Bellmore Group may make changes to the materials contained on its web site at any time without notice. Bellmore Group does not, however, make any commitment to update the materials.

6. Links

Bellmore Group has not reviewed all of the sites linked to its Internet web site and is not responsible for the contents of any such linked site. The inclusion of any link does not imply endorsement by Bellmore Group of the site. Use of any such linked web site is at the user's own risk.

7. Site Terms of Use Modifications

Bellmore Group may revise these terms of use for its web site at any time without notice. By using this web site you are agreeing to be bound by the then current version of these Terms and Conditions of Use.

8. Governing Law

Any claim relating to Bellmore Group's web site shall be governed by the laws without regard to its conflict of law provisions.

General Terms and Conditions applicable to Use of a Web Site.


Akaho Kitamura dec 21 16, 04:15
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Making Thousands through IRA Investing Tips

For beginners as well as veterans in IRA investing, here are a few important things to consider. Newbie investors obviously need education in fundamental matters while long-time investors can always benefit from

.

So, how do you maximize returns from your IRA?

Choose what fits your goals: Traditional or. Roth

Should you go for traditional or for Roth IRA? While your traditional IRA contributions can be classified as tax-deductible, Roths use after-tax money; however, they provide tax-free withdrawals when you reach retirement age. To know more about either type of IRA, visit informative investment websites. Here are a few valuable tips on which to choose:

When you should choose a traditional IRA:

* If you are within a higher tax bracket now, in contrast to your expected level when you reach retirement

* If a tax break now is more preferable to you than tax savings when you retire

* If you have no retirement plan sponsored by your employer because your income is too large to qualify you to directly contribute to a Roth IRA

When you should choose a Roth IRA:

* If you want to stay in your present tax rate

* If you want to diversify your retirement assets, aside from your pre-tax account such as a 401(k)

* If you expect to use the money when you retire and would choose rather to keep it in that account to allow it to grow as long as you want (A Roth IRA will not demand a minimum distribution from a specific age.)

* If you want all your money safely parked somewhere (You can withdraw your original contribution amounts in a Roth IRA at any time.)

Take full advantage of the tax benefits

To maximize returns from your IRA, choose the most appropriate types of stocks. Whateverstock whose value grows in time will provide higher gains for you in an IRA compared to a taxable brokerage account. Nevertheless, dividend-growth stocks will optimize the entire compounding capacity of investing in IRA; hence, you must utilize your IRA through buying individual stocks.

As an example, with two stocks often favored in many portfolios, such as Berkshire Hathaway and Apple, one can assign one in a traditional IRA and hold the other in a taxable brokerage account. Invest $5,000 in each one of these two accounts.

As of today, Apple pays a 1.9% yield in dividends, generating $95 from your $5,000 investment for a year. You will be charged a 15% tax in a taxable brokerage account, effectively giving you about $81 return. However, in a traditional IRA, you get a tax-free deal. Remember: You can now reinvest the entire $95 in more shares, whereas you have less to put back in a taxable account to work with. Although $14 is not that much, the compounding power of money works more in the former than in the latter, especially in the long-term.

To illustrate more clearly, under a 1.9% dividend yield for Apple and a stock gain of 8% annually, you will observe the difference in the gains of an initial investment of $5,000 over time:

Time Period

Taxable Account

Traditional IRA

1 Year

$5,481

$5,495

5 Years

$8,673

$8,810

10 Years

$13,726

$14,124

20 Years

$34,348

$36,301

30 Years

$78,536

$84,899

Your returns are more obviously higher over a longer period of time than otherwise, as seen in the difference above after 30 years. A $6,400 advantage, more or less, in a traditional IRA is definitely more preferable.

A $5,000 investment in Berkshire Hathaway, in comparison, would only take advantage from an initial tax deduction on your IRA contribution. As Berkshire has no dividend-yield payments, your investment in both kinds of accounts will grow by a fixed amount over time.

The young should invest aggressively now

Allocating too little money or not investing at all could be the worst mistake anyone can make in IRA investing, especially among young investors.

It is natural for millennials to be wary of investing in stocks, considering the early-2000s’ tech crash and the more recent Great Recession, and since many of these millennial investors had parents who lost their investments in the market.

You can use an accepted rule of thumb to determine the percentage of stocks to be included in your portfolio by deducting your age from 110. For instance, if you are 40, around 70% of your money invested must be in stocks. Using this principle will allow your portfolio to become more conservative as you near the retirement age. It is likewise worthwhile to note that ETFs and stock-based mutual funds can serve as good alternative investments if individual stocks do not appeal that much to you.

Just remember that stock investments will always involve volatility. Hence, in any particular year, a 10% drop in the stock market should be expected. Nevertheless, on the long-term, stocks will provide better gains compared to any other types of assets.

Lastly, most of all your investment money will never acquire greater growth opportunity in the long-term than they do in the present, no matter what happens to the market this week or this year. At 25, according to a conservative average of 7% annual growth rate over many years, one only has to invest $5,000 each year ($417 every month) to become a millionaire-retiree at 65. However, at 35, you need to set aside $15,800 each year, or $1,318 monthly, to reach the same level of wealth at 65.

In short, invest as much as you can and as early as you can since time is your most valuable asset, aside from your dollars.


Akaho Kitamura apr 24 17, 03:14
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How and When to be Average Joe or Average Jane

Most people fall in the so-called “average” or “median” range. After all things are counted and considered, the statistical middle-ground is where all things tend to gravitate – the world of the, sorry for the term: mediocre.

To be honest, no one wants to be mediocre, run-of-the-mill or commonplace. People in the city park may take selfies that are quite ordinary compared to people who challenge the heights of the Nepalese mountains or the Alaskan wilderness. People do not just want a few likes but viral likes, so it seems. We want to be among those who make an impression for being extraordinary. And that takes a lot of effort to achieve and sustain.

But as investors, the average can provide a lot of benefits.

The idea of being average is the very foundation of the biggest changes to investing in recent years – the surge of the passive index fund.

In the past, you (or a broker) selected a portfolio of stocks that has the potential to bring you wealth. The more adventurous investors opted for a chance to benchmark themselves (while the newspapers aimed for a chance to "score" the stock market). That gave birth to the index.

One possible choice is the ASX 200, which tracks the overall market performance, giving investors a view on how the total market value shifts in a day, a week, a month or a year. It is expected to rise by about 10% yearly, within a long-term period.

And, obviously, we are talking of averages -- the average firm and the average year. Choosing to buy an index-tracking fund, as investors usually do as a rule, is quite alright. You can expect to gain average return (minus some fees) over a long duration, enough to produce a sizeable profit in the end.

However, do not expect to get 10% yearly. Moreover, not all firms will gain a value growth by such an amount. Some can go broke. Others come up with the latest “hot product”. Some may exploit the advantages of their product and market, to offer years of market-crunching returns (for instance, Domino's share price). And there are also those that remain stagnant for ten years (check out Westfield).

The market can spiral downward sometimes. We all know how the last global financial meltdown brought the market down by over half its value from late 2007 to early 2009. That occurred after it had doubled in value from 2003 to 2007.

The idea of "average" provides a restful, promising relief for investors, which may not be absolutely true. Nevertheless, that is no reason to avoid it; for a 10% annual return across 30 years will convert an investment of $100,000 into $1.74 million.

So it is with real estate properties -- the quoted prices are national averages, which include stellar Sydney and lagging Perth and Darwin. At the very least, they are city-level average prices, such as those of inner- city apartments, harbourside mansions and suburban residential projects, everything that is traded in the market in a year.

Furthermore, for both assets and real property, the quoted prices reflect only those that actually moved from one hand to another and not the bulk of assets that were kept in a private safe or properties still in use by their happy owners.

Although it is not wise to be foolhardy, the average point (where half of the data is either above or below) presents a totally different picture. You need more than luck to get over the average-trap. Hence, if you can succeed in "buying" the average – that is, by using an index fund – you made the right initial step. Just remember that it will require big challenges along the way, whether you do buy or not.


Akaho Kitamura may 22 17, 04:09
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3 ways to invest like Warren Buffett

A cottage industry of asset managers, financial advisors and investment can give you their takes on how to be just like Warren Buffett.

You can skip the circus of wannabes and hear from the Oracle of Omaha directly in his annual letter to Berkshire Hathaway a shareholder, which was published Saturday.

In his most recent letter, Buffett praised the virtues of index funds, railed against the steep fees hedge fund managers charge and said "investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well."

You don't have to be a stock-picking whiz to benefit from his success. Buffett has already detailed three ways to emulate him in your retirement portfolio.

The two-fund portfolio

Buffett outlined an investing strategy for ordinary investors in his 2013 annual shareholder letter:

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.

You can buy U.S. Treasurys directly or invest in a low-cost government bond fund. (Vanguard's short-term government bond index fund charges 0.16 percent annually with a $3,000 minimum investment, or 0.07 percent for the exchange-traded fund version.)

Vanguard offers several S&P funds: a traditional mutual fund that charges 0.16 percent annually with a $3,000 minimum investment or one with a $10,000 minimum and a 0.05 percent annual fee.

You can also buy a Vanguard 500 ETF that has an expense ratio of 0.05 percent. If you want a rock-bottom price, iShares Core S&P 500 ETF charges 0.04 percent. With ETFs, and unlike with mutual funds, you may have to pay commissions when you trade them.

"Warren Buffett's investment strategy is a good one for investors and signals that he doesn't believe that most people, including professionals, can beat the market long-term, so just be the market and buy low-cost index funds," said Stephanie Genkin, a certified financial planner in Brooklyn.

Buffett put his money where his mouth is when it comes to indexing. He bet $1 million for charity that the Vanguard 500 Index Fund Admiral Shares would beat a basket of five hedge funds selected by Protégé Partners, a New York City asset management firm over 10 years starting in 2008.

The index fund has tripled the performance of the combined returns of five unnamed hedge funds as of the end of 2015. A likely Buffett victory will benefit Girls Inc. of Omaha while Protégé is playing for Ark, an international youth education charity based in the U.K.

Berkshire Hathaway stock

You can share in gains of one of the world's greatest capital allocators by owning stock in Berkshire Hathaway directly.

Buffett's holding company has beaten the total return of the S&P 500 over the past 10 years with an annualized return of 9.1 percent, compared to 7.3 percent for the index.

Berkshire stock has two share classes. The primary difference between the share classes is the price. Class A stock recently cost more than $255,000 per share while Class B is 1/1,500 of that sum, recently at $170 per share.

You can convert Class A stock into Baby Berkshire shares, but not the other way around. Class B shares, launched in 1996, also have slightly less voting rights.

Beyond the lower price, the big advantage of the Class B shares for investors is that they can give them to people without triggering the gift tax, which kicks in for gifts above $14,000 each year.

With any investment pool, the larger you get, the harder it is to produce outstanding results. Berkshire Hathaway is no different and Buffett addressed this issue in his shareholder letter:

As for Berkshire, our size precludes a brilliant result: Prospective returns fall as assets increase. Nonetheless, Berkshire's collection of good businesses, along with the company's impregnable financial strength and owner-oriented culture, should deliver decent results. We won't be satisfied with less.

The Warren Buffett way

For the adventurous (or foolish), you can try your hand at investing in stocks like the master of value investing himself.

You don't have to go it alone. Plenty of stock screeners, such as those from the American Association of Individual Investors, Morningstar and ValueWalk, strive to identify stocks of companies with positive free cash flows, good returns on capital and strong competitive advantages (what Buffett calls "moats" as in a castle with a moat). Automated investing service Motif lets you buy a basket of Buffett-like stocks for less than $10 per trade.

To be sure, it is extremely difficult to generate a record anything close to what Buffett has done just by stock-picking. Public companies represent only a part of Berkshire Hathaway's portfolio holdings, while the rest come from private deals ordinary investors can't access.

Where most investors lose their way in following in Buffett's legendary footsteps is consistency. Even Buffett stumbles from time to time.

"The problem that most people would have investing like Buffett is the time frame. Many of his investments can take years to pan out, and the average investor doesn't have that sort of patience," said George Gagliardi, a CFP and founder of Coromandel Wealth Management in Lexington, Massachusetts.

"Remember the derogatory comments about Buffett during the Internet stock boom years? He went from a pariah in 1998 to a genius in 2003," Gagliardi said.

The key to Buffett's stock-picking success has been his ability to buy when others are fearful.

"Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie [Munger], not economists, not the media," Buffett writes in his 2016 letter.

"During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy."


Akaho Kitamura aug 9 17, 04:41
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Saving and Spending Hacks

Were you a victim of the holiday spending spree this past season or a winner? Many of us lost; and the New Year gives us pause to evaluate our personal financial habits once more and, hopefully, initiate some positive and lasting changes for the future.

Consider these valuable saving and spending hacks you can implement.

Go long-term

Think ahead into the future. Whatever your age is, save now for your retirement. The earlier you do, the better. Apply for an employer-sponsored plan, if possible. Or if you can, opt for IRAs which help you build wealth in bounds.

Build categorized funds

Think of this as a challenge: Do the 52-week savings procedure. Set aside $1 on the first week, then $2 the second week, until you finish the 52nd week, when you are supposed to add $52 to your pot. Hacking this process gives you $1,378 in savings in the next year, plus interests earned.

As long as you set for yourself a specific goal, starting a savings account can bring great benefits. Go for banks that offer fee-friendly services, such as Ally Bank Member FDIC, ally.com, which enables you to open an Online Savings or Money Market account without minimum savings requirement or monthly service charges. It is quite convenient to deposit money through an e-check deposit, direct deposit and you gain compounded-daily interests on your savings. Moreover, keeping this money in a separate account lets you monitor your spending habit versus the remaining balance.

Utilize shopping apps

It has become quite easy to save money using online apps. Do some research and find discount codes, loyalty plans or cash-back providers that allow you to monitor your expenses and reward you for the use of their shopping portal instead of going directly to the big name retailers’ homepage.

Gain rewards

Although it is downright risky and even foolhardy to run up credit-card bills one cannot pay back, many expert consumers have the ability to exploit credit card reward plans for airline mileage, hotel points or hard cash on-hand.

“Utilize credit cards that offer reward for things you often purchase,” says Diane Morais, chief executive officer and president of Ally Bank, subsidiary of Ally Financial Inc.

Open a new credit card which provides a minimum buying limit, such as the Ally CashBack Credit Card, which offers a $100 bonus when you spend $500 in eligible purchases within the first three billing cycles, and gives 2% cash-back at gas stations and grocery stores, as well as a 1% cash-back on all other purchases – including 10% bonus on rewards which you deposit into a qualified Ally Bank account.

It is not necessary to open a new account if your present credit cards to avoid fraud and also offer promos or cash-back schemes, allowing you to earn substantially on daily purchases.

Consider the above tips and aim to become a strategic consumer – one who spends wisely and saves productively.


Akaho Kitamura feb 28 17, 03:42
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