New Beginning

Happy New Year!! Thank God for the new beginning.

As the year wound to an end in 2008. I wondered to myself what some of my friends would be doing. Busy consuming all their hands can touch or planning on how to start the year on a new note with whatever the slump in the market has left?

The Stock Market will commence e-transactions fully this year. How will this affect the way we used to do business on our stocks?

For this new year; our first assignment is: sort out all your shares certificates (if you still have them); sort out your cscs registration (if you have not done it before); prepare your cash position for the beginning of this year; mark out when you want to start investing and which area you would like to invest in.

When these assignments have been concluded, we will look into areas to dabble into without getting burnt in this year 2009.

Cheers to a wonderful new beginning!!!

We will certainly have a prosperous year!

Profitable Business in a period of Global Recession

There are many profitable businesses you can dabble into in this period of Global Economic Recession. These are just ten of such investment ideas:

1. Farming and agricultural production: The food crisis in the world can be explored for investment. Land

is available for agricultural purposes in extensive quantities in many parts of the world. This type of Investment

requires a lot of know how and is capital intensive and highly profitable.

2. Entertainment industry: film productions and other entertainment industry activities are also profitable

investment options.
3. Manufacturing: Physical production of goods especially textiles and clothing.
4. Airline operation: Purchase of aircraft for freight and haulage operations or passenger flight operations
5. Automobile operation: Automobile rental operation. Purchasing and running a fleet of automobiles for

rental purposes.
6. Football club administration: Investment in a Global sport like football is a goldmine.
7. Land and estates: Acquisition of land and development into an estate of buildings of various types is a

very popular and lucrative investment in some countries.

Light capital investment

8. Money market fund: Short term funds are easily investigated and less susceptible to fluctuations of interest

rates. Interest rate is usually negotiated before the commencement of the contract of investment. This type

of investment is still very safe.
9. Insurance and other life investment: Life Policy is a 'safe' investment. There are various types of life

policies to choose from. Always choose wisely and examine your investment needs before you pick up

a life policy. A tidy, low risk profit can be enjoyed from this type of investment.
10. Annuities are fixed payments agreed over a period of time. Annuities can be purchased from pension

fund administrators and life insurance companies worldwide with an agreed time for commencement of

benefits.

Other investment options you can try include:

1. export of crops and other produce: the country you are based in will determine your choice of activity. If you are based in Africa for instance, agricultural products like Cocoa, Rubber, Cassava etc can be exported.
2. Oil and Gas Exploration business.
   
3. internet marketing: information products can be packaged and sold on the internet.
   
4. book writing and the publishing industry.
   
5. rental service operation.
6. gas station operation.
7. personal service e.g plumbing, mechanical, furniture making.

10 ways the Global Recession will affect your investment decisions.

The Global Financial Crisis or Global Recession as it is popularly referred to will affect your investment decisions in the following ways:

1. Your cash will be able to purchase less in the market because of increased prices.

2. You will have less investment options. Meaning, you will have less choice in the type of investments you can make in the market place. Since stock prices are plummeting. You cannot be advised to invest in some types of stocks; you will lose out. This does not mean you cannot entirely invest in stocks, it only means you must watch carefully before you invest and when you do invest; do not expect to sell off immediately. You may have to 'buy and hold'.

3. You will have to hold more funds in liquid form. Since you cannot invest as much in high value stocks, many people (especially risk averse people) will prefer to hold their funds in liquid form, that is cash or easily convertible investments. Some people will hold funds in their dusty piggy banks or in low interest bearing savings accounts.

4. You have to reduce consumption! The best way to battle inflation is to reduce your consumption of expensive goods. Must you absolutely have that next dress, the next bottle of wine or the next burger?

5. Your investment will yield less! South Korea and Taiwan have already cut interest rates. Other countries will most likely follow. This means that you will earn less than usual on investments in the standard market e.g savings and fixed security deposits.

6. Taxes will increase in order to fund the necessary bailouts and shore up the economy.

7. Goods and services will increase in prices. You will pay more for your needs.

8. Losses will be more easily made in a panic attempt to sell off high priced stocks and investments before they crash completely.

9. Big government projects which would have had a lot of public service impact will have to wait.

10. Loss of value on existing investments. As the share prices are going down what you had as investment value also goes down.

Why should you Invest?

Why You Should Invest

Investing has become increasingly important to many people, as the future of social security benefits becomes unknown; in some countries social security is actually non-existent.

Everyone wishes to ensure a secure future, and they know that if they are depending on Social Security benefits, and pension or retirement plans, that they may be in for a rude awakening when they no longer have the ability to earn a steady income. Investing is the answer to the unknowns of the future.

Many people try to save money in a low interest savings account over the years. You may have sold an inherited property for good money or realized some other type of windfall, and you need a way to make that money grow. Investing is the answer to make your money grow faster.

Investing is also a way of attaining the things that you want, such as a new home,a new car, college education for your children, or expensive holidays abroad. They type of financial goal you have will determine what type of investing you do.

If you want or need to make a lot of money fast, you would be more interested in Short term investments which carry higher risks, which will give you a larger return in a shorter amount of time. If you are saving for something in the far off future, such as retirement, a college education for your new born baby, you would want to make a longer term investment which is safer and grows over a longer period of time.

The overall purpose in investing is to create wealth and security, over a period of time. It is important to remember that you will not always be able to earn an income… you will eventually want to retire.

You cannot count on the social security system to do what you expect it to do. You also cannot depend wholly on your company’s retirement plan either. So, investing is the key to insuring your own financial future, but you must make smart investments!

Long term Investment

Long-Term Investment

Treasury Bills

This comes in-block and is used by government to help the public and to

prevent too much money in circulation. The minimum depends on the government but

is mostly in multiples of 10,000.

Bonds: Bonds come in various forms.

They're known as "fixed-income" securities because the amount of income

the bond generates each year is "fixed," or set, when the bond is sold.

From an investor's point of view, bonds are very similar to Certificate of Deposits, except

that they are issued by the government or by corporations instead of

banks.

Stock: Stocks are a way for individuals to own parts of businesses. A

share or stock represents a proportional share of ownership in a

company. As the value of the company changes, the value of the share in

that company rises and falls.

They can be Ordinary Shares or Preference Shares. Debenture loan stocks

are also available in some companies.

Choosing long term investment means an Investor is comfortable enough to overlook

fluctuations to his investment i.e after a series of short term investments, resources

are now pooled together to obtain a longer term investment portfolio.

This investment option means that you cannot pull out your investment capital on

impulse (at least not as easily as going to the bank to withdraw your savings)!.

An Investor in the long term must be more versatile. Monitor your investment by watching

stock indices, obtaining an analysis of the various companies you have invested in.

Short Term Investments

Types of Investment

Short-Term Investment

Savings account:

This is the easiest and often the first banking product accessible to everybody. It doesn’t

require any huge deposit to open. Savings accounts earn a small amount in interest (anywhere

from 2.0% to 4.0%, often less), making them a little better than a piggy bank. The attractiveness

of this type of Investment is that it is within the Investors control. You determine how much to

put in your account and when to withdraw your money. There is usually no limit to your activity

in the account. Although in some financial institutions, interest will be withheld if withdrawal

from the account is too often within a stipulated period of time.

Money market funds(Fund Placement): Money market funds are a specialized

type of mutual fund that invests in extremely short-term bonds. Unlike most mutual

funds, shares in a money market fund are designed to be worth fixed amount of money
at all times. Money market funds usually pay better interest rates than a

conventional savings account. The rates of interest are sometimes negotiable and large
amount of money is involved.

Certificate of deposit (CD)(Fixed Deposit): This is a specialized deposit you

make at a bank or other financial institution. The interest rate on CDs is usually

about the same as that of short- or intermediate-term bonds, depending

on the duration of the CD. Interest is paid at regular intervals until

the CD matures, at which point you get the money you originally

deposited plus the accumulated interest payments. CDs offered by banks

are usually insured.

Making a choice of a short term investment depends on your income level. For a low

income level family, your investment can start with short term investments. The

advantages of starting with a short term investment include:

1. Ability to access funds as and when needed for immediate family needs

2. Ability to save or investment only what you can afford with impinging on the family's
standard of living

3. Opportunity to invest at your own level. Investment is very important!

Even if you start small!!

4. Making short term investment over a period of time ensures that you can have the

opportunity to make a long term or bigger volume of investment at a later period.

investment

Investment is any activity which can help to increase the future value of an asset which could be either liquid or fixed asset.

Investment is anything being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se.

The investment decision is a fundamental decision. The investor must determine the investment value of the assets that he has within his control or possesion. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial marketable securities such as company stocks (an equity investment) or bonds (a debt investment) or other short term instruments. Most times the goal of the investment is for producing future value. Assets are used to produce streams of revenue that often are associated with particular costs or outflows.

Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes and investment clubs.

Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary.

The decision of where to invest is individual and depends on personal dispensation to risk.