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Financial PlaningInvestingSavings

Learning About Investing and Saving


The term “Investment” is defined as the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income, or appreciation of the value of the instrument. No matter your financial situation, investing and saving is essential.

There are several reasons why you should invest and save some of your money if you are not already doing so. For starters, it’s always good to have some money set aside for a rainy day-you never know when your car might break down, for example.

Having that money set aside in case of an emergency can save you from a lot of hardship and stress. So whether that’s a few hundred dollars tucked under your mattress, or an amount of money you put away in a savings account each month, make sure you have some money set aside.

While saving money in this fashion is more a short-term goal, investing is generally considered a long-term goal and plan. Typically, you do not want to put money in an investment plan that you’ll be needing next month, or even next year.

So just what are some good investing strategies? There are numerous ways to go about investing your hard-earned money.

One way people invest is by way of an IRA, or Individual Retirement Account. There are various ways of going about this, which is beyond the scope of this article, but it is important to consider for the sake of your retirement.

Personally, when it comes to my retirement, I don’t want to be left without any money when I’m 65 and be stuck looking for a job. The earlier you can start investing for retirement the better.

Even if your “golden years” have passed don’t set it aside. Start setting money aside for retirement immediately-you won’t regret it.

But again, the earlier you can start the better. If you’re young and all you can afford is $50 dollars a month, then it’s worth every penny.

Another method is to invest in a managed futures account. Managed futures are considered a type of alternative investment and can take the form of both short-term and long-term investments.

Managed futures invest in areas such as metals (gold, silver), grains (soybeans, corn, and wheat), equity indexes (S&P futures, Dow futures, and NASDAQ 100 futures), soft commodities (cotton, cocoa, coffee, sugar) as well as foreign currency and U.S government bond futures.

If you open such an account you will be guided by the help of a licensed Commodity Trading Advisor. Don’t worry; CTAs are monitored by the United States Commodity Futures Trading Commission and the National Futures Association and are required to go through an FBI deep background check, and provide rigorous disclosure documents which are reviewed by the NFA.

Still, before beginning any strategy it is advised that you evaluate your Commodity Trading Advisor. Request to see his or her disclosure document (which must be provided to you upon request) which contains important information about the proposed trading plan and fees.

Though there are many strategies used when it comes to managed futures accounts, the most common is trend following. Trend following involves buying markets that are making new highs and shorting markets that are making new lows.

For the past 30 years managed futures, as measured by the CASAM CISDM CTA Equal Weighted Index, had a compound average annual return of 14.52%. For U.S. stocks (based on the S&P 500 total return index) the return was lower but still favorable at 7.04%.

So why invest in this manner? One compelling reason is the buzz-word: Diversify.

Diversifying your portfolio is a smart way to manage risk. It is argued that managed futures helps in diversifying your portfolio.

It’s certainly important not to spread yourself too thin but having all your eggs in one basket-so to speak-can be a risky venture.

But I suppose that’s why they call it risk. The higher the risk the bigger the return could likely be, but also the bigger the loss could be.

As you can see, there are many things to keep in mind when it comes to investing. It really comes down to your budget and your personal needs.

But the point I hope you walk away with is that investing and saving your money is essential-vital-to your personal financial safety and well-being. Start today.

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