Understanding The Most Important Investment Concepts

It’s always good to have at least a basic foundation of fundamental investment knowledge whether you’re a beginner to investing or working with a professional financial advisor. The reason is simple: You are likely to be more comfortable in investing your money if you understand the lingo and basic principles of investing. Combining the basics with what you want to get out of your investment strategy, you will be empowered to make financial decisions yourself more confidently and also be more engaged and interactive with your financial advisor.Below are a few basic principles that you should be able to understand and apply when you are looking to potentially invest your money or evaluate an investment opportunity. You’ll find that the most important points pertaining to investing are quite logical and require just good common sense. The first step is to make the decision to start investing. If you’ve never invested your money, you’re probably not comfortable with make any investment decisions or moves in the market because you have little or no experience. It’s always difficult to find somewhere to begin. Even if you find a trusted financial advisor, it is still worth your time to educate yourself, so you can participate in the process of investing your money and so that you may be able to ask good questions. The more you understand the reasons behind the advice you’re getting, the more comfortable you will be with the direction you’ve chosen.Don’t Be Intimidated by the Financial Lingo If you turn on the TV to some financial network, don’t worry that you can’t understand the financial professionals right away. A lot of what they say can actually boil down to simple financial concepts. Make sure you ask your financial advisor the questions that concern you so you become more comfortable when investing.IRAs Are Containers to Hold Investments-They Aren’t Investments Themselves The first area of confusions that most new investors get confused about is around their retirement vehicles and plans that they may have. If an investor has an individual retirement accounts (IRA), a 401(k) plan from work, or any other retirement-type plan at work, you should understand the differences between all the accounts you have and the actual investments you have within those accounts. Your IRA or 401(k) is just a container that houses your investments that brings with it some tax-advantages.Understand Stocks and Bonds Almost every portfolio contains these kinds of asset classes. If you buy a stock in a company, you are buying a share of the company’s earnings. You become a shareholder and an owner at the same time of the company. This simply means that you have equity in the company and the company’s future – ready to go up and down with the company’s ups and downs. If the company is doing well, then your shares will be doing well and increase in value. If the company is not doing well or fails, then you can lose value in your investment.If you buy bonds, you become a creditor of the company. You are simply lending money to the company. So you don’t become a shareholder or owner of the company/bond-issuer. If the company fails, then you will lose the amount of your loan to the company. However, the risk of losing your investment to bondholder is less then the risk to owners/shareholders. The reasoning behind this is that to stay in business and have access to funds to finance future expansion or growth, the company must have a good credit rating. Furthermore, the law protects a company’s bondholders over its shareholders if the company goes bankrupt.Stocks are considered to be equity investments, because they give the investor an equity stake in the company, while bonds are referred to as fixed-income investments or debt instruments. A mutual fund, for instance, can invest in any number or combination of stocks and bonds.Don’t Put All Your Eggs in One Basket An important investment principle of all is not to invest all or most of your money into one investment.Include multiple and varying types of investments in your portfolio. There are many asset classes such as stocks, bonds, precious metals, commodities, art, real estate, and so on. Cash, in fact, is also an asset class. It includes currency, cash alternatives, and money-market instruments. Individual asset classes are also broken down into more precise investments such as small company stocks, large company stocks, or bonds issued by municipalities, or bonds issued by the U.S. Treasury.The various asset classes go up and down at different times and at different speeds. The purpose of a diversified portfolio is to mitigate the ups and downs by smoothing out the volatility in a portfolio. If some investments are losing value at some particular period, others will be increasing in value at the same time. So the overarching objective is to make sure that the gainers offset the losers, which may minimize the impact of overall losses in your portfolio from any single investment. The goal that you will have with your financial advisor is to help find the right balance between the asset classes in your portfolio given your investment objectives, risk tolerance, and investment time horizon. This process is commonly referred to as asset allocation.As mentioned earlier, each asset class can be internally diversified further with investment options within that class. For example, if you decide to invest in a financial company, but are worried that you may lose your money by putting everything into one single company, consider making investments into other companies ( Company A, Company B, and Company C) rather than putting all your eggs in one basket. Even though diversification alone doesn’t guarantee that you will make a profit or ensure that you won’t lose value in your portfolio, it can still help you manage the amount of risk you are taking or are willing to take. Recognize the Tradeoff Between an Investment’s Risk and Return Risk is generally looked at as the possibility of losing money from your investments. Return is looked at as the reward you receive for making the investment. Returns can be found by measuring the increase in value of your investment from your original investment principal.There is a relationship between risk and reward in finance. If you have a low risk-tolerance, then you will take on less risk when investing, which will result in a lower possible return at any given time, relatively. The highest risk investment will offer the chance to make high returns.Between taking on the highest risk and the lowest risk, most investors seek to find the right balance of risk and returns that he/she feels comfortable with. So, if someone advises you to get in on an investment that has a high return and it is risk-free, then it may be too good to be true.Understand the Difference Between Investing for Growth and Investing for Income Once you make the decision to invest, you may want to consider whether the objective of your portfolio is have it increase in value by growing overtime, or is it to produce a fixed income stream for you to supplement your current income, or is it maybe a combination of the two?Based on your decision, you will either target growth oriented investments or income oriented ones. U.S. Treasury bills, for instance, provide a regular income stream for investors through regular interest payments, and the value of your initial principal tends to be more stable and secure as opposed to a bond issued by a new software company. Likewise, an equity investment in a larger company such as an IBM is generally less risky than a new company. Furthermore, IBM may provide dividends every quarter to their investors which can be used as an income stream as well. Typically, newer companies reinvest any income back into the business to make it grow. However, if a new company becomes successful, then the value of your equities in that company may grow at a much higher rate than an established company. This increase is typically referred to as capital appreciation.Whether you are looking for growth, income, or both, your decision will fully depend on your individual financial and investment objectives and needs. And, each type may play its own part in your portfolio.Understand the Power of Compounding on Your Investment Returns Compounding is an important investment principle. When you reinvest any dividends or other investment returns, you begin to earn returns on your past returns.Consider a simple example of a plain bank certificate of deposit (CD) that is rolled over to a new CD including its past returns each time it matures. Interest that is earned over the lifetime of the CD becomes part of the next period’s sum on which interest is assessed on. At the beginning, when you initially invest your money compounding may seem like only a little snowball; however, as time goes by, that little snowball gets larger because of interest compounding upon interest. This helps your portfolio grow much faster. You Don’t Have to Go at It Alone Your Financial Advisor can give you the investment guidance that you need so that you don’t have to stop yourself from investing in the market because you feel like you don’t know enough yet. Knowing the basic financial principles, having good common sense, and having your Financial Advisor guide you along the way can help you start evaluating investment opportunities for your portfolio and help get you closer toward achieving your financial goals.

Battle Between Affiliate Marketing and Network Marketing

The confusion between affiliate marketing and network marketing or multi-level marketing is quite interesting. Some people even think affiliate marketing business and network marketing businesses are scams. While others think they are one and the same with different names. In this article, we will discuss and look at the definitions, distinctions and some misconceptions. At the end of this article, we should have been able to provide some clarity.What is Affiliate Marketing?Affiliate marketing is a performance-based marketing system in which a business rewards a person(s) or affiliate(s) for each visitor or customer brought by the person’s own marketing efforts.What is Network Marketing?Network Marketing is totally different. Here the marketer becomes associated with a certain product that they like or believe in, which they then buy from their supplier and resell to the public at a profit. Before the marketer starts selling products of a larger company, he/she signs some paper work which gives him/her a small franchise of the large business.Differences between Affiliate Marketing and Network Marketing.In affiliate marketing, affiliates are not selling any product directly. They are simply the mouthpiece, or the advertising board that tells people where to go and buy products. You will not have to purchase anything, but you will still make money just for telling people where to go get a product. Affiliates get a commission when the person that they refer to a website buys something, so in this way the company is paying for a good lead and they will be paid generously.In network marketing, the foundation is in growing a team. You can start with one person (also known as a down-line) who then introduces the next person and that person introduces another and the chain goes on and on. The beauty of network marketing is that it is a game of numbers. The more individual down lines you have under you, the bigger your team, the more money you make.Another difference is that in affiliate marketing, commissions are paid usually on single level depending on business laws in different countries.In network marketing, commissions are paid on infinite levels of down lines. The “deeper” you build the closer you are to residual income.Which brings in More Money?Depending on your business goals, affiliate marketing can make you a decent fortune in a few years if can get a good number of customers to buy your affiliate company’s products.While Network marketing can generate an income more than you can comprehend if you consistently work hard at it. If you happen to belong to the top 10 network marketing business that are structured, a good one should have a rare provision in their company policy like making the business will-able. So you work the business and after you stop working it, you can hand it over to the next person. And that person does not start from scratch but continues from where you stopped. A recommendation of one of such companies can be found at the end of this article.What Affiliate Marketing and Network Marketing Are Not.Whether you decide to do affiliate marketing or network marketing, once you have a good understanding of each, you will be sure that:1. It is not a pyramid scheme.2. It is not a “get rich quick” business.3. It is not for non business minded people.4. It’s not for those that want a “nice-play-thing” kind of business.5. It is not a one man’s show. It needs people with common business goals to thrive.

An Anti Aging Skin Care Review Guide – 5 Highly Proven Ingredients and 3 Toxic Substances to Avoid

It is easier for people to gauge the effectiveness of any anti aging skin care review by simply reading the recommendations that evaluate products.  Like me, many of these people (and perhaps you) have struggled with lines and wrinkles, especially on the face and want a simple, yet effective system to remove these flaws.Many products, however, require frequent reapplication to make our skin look better and unfortunately, they do nothing to improve the state of our skin.  The “improvement” simply lasts until the skin lotion or cream fades or washes away.In this anti aging skin care review, we will look ways to use products that actually benefit and improve your skin, while avoiding those with chemical additives that irritate skin and could make you sick.Anti Aging Skin Care Review Tip #1 – Toxic SubstancesFirst in this anti aging skin care review, let’s consider the chemical additives.  Anything you apply to skin is literally ingested by it, which means that it is absorbed through the layers of the skin and makes its way to the blood stream. Parabens are preservatives designed to make skin products last longer.  Unfortunately, they are also linked to many cancers and are artificial substances you would never find naturally in the body.  Instead, look for natural preservatives such as natural Vitamin E, which also has some great health benefits.Mineral Oils are also known as petrolatum, liquid paraffin, and paraffin wax on the label.  These oils clog up the skin’s pores and disrupt the body’s ability to get rid of toxins, and can lead to serious acne problems.  It also leads to a faster aging and irritation of skin if used for a prolonged period of time.Fragrances are also another chemical added to most skin products to make them more appealable to consumers.  The problem is, these added chemicals irritate skin and detract from the benefits that the product provides.  When you really think about it, there is no reason you absolutely have to smell good on every square inch of your body.  And if you need to smell good, use a perfume or cologne, preferably on clothing.Anti Aging Skin Care Review Tip #2 – 5 Great Ingredients to Look ForWhen it comes to an anti aging skin care system, natural ingredients are what is most important.  Use ingredients such as Nano-lipobelle H-EQ10, which deeply penetrates all layers of skin, helping to replace the Coenzyme Q10 (an energy provider for cells) in skin as we age.  It also mentioned in an anti aging skin care review to be highly effective at preventing UV damage.Jojoba Oil is a highly effective oil that is extremely similar to human sebum, which is the oil produced by the skin.  With Jojoba Oil, your skin gets the right amount of oil regardless whether you have dry or oily skin.  It helps to moisturize and soften skin, while also helping to significantly reduce wrinkles and stretch marks.Natural Vitamin E is in this anti aging skin care review because it’s a well known antioxidant that helps protect skin from damaging free radicals which come from sun exposure and aging. As mentioned before, it is a natural preservative and reduces the appearance of fine lines and wrinkles.Active Manuka Honey is a great skin healer and makes the elastin fibers within cells stronger.  It actively supports cell regrowth and regeneration.  Additionally, Active Manuka Honey nourishes and rejuvenates skin, making it look softer and younger, and is very effective at penetrating through all of the skin’s layers.Another key ingredient to look for in an anti aging skin care system is Cynergy TK.  It is highly effective at stimulating the body to naturally produce collagen and elastin, two crucial proteins when it comes to caring for your skin.  Cynergy TK promotes firmness and elasticity in skin while also stimulating new cell growth.  It is known for significantly reducing fine lines and wrinkles and making skin smoother and younger looking.That sums up this anti aging skin care review.  Keep these ingredients in mind when looking for your next skin care product.  Knowing what ingredients to look for and what to stay away from are equally important when it comes to caring for your skin.  Take care of your skin and your body, and you will see great results over time.