Cuban on Investing: Diversification Is for Idiots

Diversification is for dummies! Agree or disagree? 

Double Your Nest Egg With Gold Miners

Diversify or perish. I think that's an H.G. Wells quote.

OK, OK, I know it's actually "adapt or perish." But if H.G. Wells managed investments rather than words, I bet he would have tweaked that quote to my version.

In fact, you've probably heard that golden nugget of investment wisdom before. It's something every investor should be well-acquainted with because it's the key to successful investing.

Plain and simple: Never put all of your investment eggs in one basket. If the market falls out from under that basket, your nest egg is going to crack and spill your savings all over the floor.

It's an easy bit of advice, I know. You can say that diversifying is the smart route, but what exactly should you diversify with?

For that question, I have one answer today: metal mining companies.

Every investor should have a bit of exposure to miners - especially small-cap miners, if you like capturing the quick pops that most of Wall Street tends to miss out on.

It simply gives you access to above-average share price volatility. Particularly today.

Now, many of you might be saying: "But isn't that a little risky?"

It can be, absolutely. Any sector that sees consistent volatility (like crypto assets) can be a bit risky - but much of that risk is managed by having a plan in place. That protects you from making knee-jerk moves or holding onto investments longer than you should.

You just need the right strategy. And if you don't have one in place, I'd say you should start looking for one now, because the spotlight is starting to shine on the mining industry as the commodity market recovers.

According to a report by PwC released last year, the mining industry saw a turning point in 2016. The top 40 mining companies aggregated a net profit of $20 billion - which handily tops the $28 billion loss of 2015. Meanwhile, their valuation climbed into 2017.

In fact, the market capitalization of those 40 companies rose 45% in 2016 to $714 billion.

And the good news is continuing for miners.

Take gold for instance. Miners are particularly sensitive to rising gold prices right now. As gold continues to climb (and it will), gold mining stocks will soar.

It's time to go long in this area.

In fact, since early December, the VanEck Vectors Junior Gold Miners ETF (NYSE: GDXJ) has been climbing away from its support line around $30. It's now up about 14.8%, a nice rally that could prosper further if it breaks through current levels.

All of this is to say that if you're looking to diversify more, miners are a great bet.

Jessica Cohn-Kleinberg is the managing editor of premium services at Banyan Hill Publishing. She also contributes to The Sovereign Investor Daily. To read more, click here.

Article Source: https://EzineArticles.com/expert/Jessica_Cohn-Kleinberg/2380788

Article Source: http://EzineArticles.com/9871126

How to Handle the Effects of Inflation During Pre-Retirement and Post Retirement

We often hear from our parents and grandparents that they used to buy movie tickets for Rs. 5. Milk that we used to buy for Rs. 13 few years back has doubled now. Have you ever thought why such change in price happens?

The answer is inflation.

You can't AVOID inflation:

For the price increases to qualify as inflation, the rise in price has to be a sustained one. With time, for every rupee you own, you'd be able to buy a smaller percentage of good or service.

When inflation begins to march north, there tends to be a decline in the purchasing power of money. Let us consider the inflation stands at 5% annually. Theoretically, bottle of water costing Rs.20 today, would cost Rs. 21 in a year.

It is possible to control inflation and it is not possible to stop or avoid inflation.

How can you handle Inflation?

Inflation affects each person differently. As we progress in profitable positions in work, typically the amount we spend also begins to soar. While certain lifestyle changes with time are unavoidable, remember that every spending decision taken today can affect your finances of tomorrow. Read on to understand how we can combat the detrimental effects on inflation.

Handling Inflation During pre-retirement:

Inflation can be best handled with the right investments.

· Avoid excess spending and invest a percentage from your increased salary. Evaluate your budget and earmark specific areas of expense. Try to forecast your expenditure and work towards minimum deviation from your planned income to expense ratio.

· Design a lifestyle that suits your requirement. Decide how much you want to spend on luxuries. As you inch closer to the retirement finish line, ensure that your luxury needs are at the minimum.

· Try and work towards an annual growth in income generation. Explore new opportunities and ventures to augment your income.

Pre-retirement investments and inflation:

Remember that it is not enough if your investment makes sense; it also needs to make cents!

· Don't keep money stagnant in your safe. In fact, with time its value depreciates. What you can buy with Rs. 100 today will cost you Rs. 150 after a 6 or 7 years.

· When you make an investment, ensure that the rate of return is higher than the inflation rate. The difference in inflation rate and investment return rate is your actual return on the sum invested.

· Inflation trends have a profound effect how each portfolio needs to be structured. Allocate your assets based on your risk return expectations. Higher the risk, higher the returns. Embrace equities for long term.

· Proven Diversified Equity Funds: This investment option can churn good returns if you have a good appetite for risk, as the returns range an average 12-15%, which can suffice to beat inflationary trends.

Focus on what return your investment will yield post tax and invest wisely.

Inflation during Post-retirement:

"Inflation is the crabgrass in your savings." -Robert Orben. Failing to anticipate the effects of inflation on retirement finances can be a costly mistake. While it is important to keep investing after retirement too, the tolerance to risk also needs to be phased down.

· Plan for a fund that will sustain in your sunset years

· The inflation rate needs to be factored while deciding on the corpus fund.

· You need regular income after retirement. This regular income need to increase year after year to take care of the inflation.

· Creating a corpus that can provide regular income year after year.

· Creating another corpus, that can help in providing additional regular income that can take care of inflation.

What we need to understand is that the investment strategy after retirement is not to beat the inflation with investments; but to meet the inflation with investments.

Inflation is what every economy suffers from. It creeps on us with time. If not planned, it can sting us very hard. But as economists say, inflation is nothing to dread. Healthy rate of inflation has a positive impact of increasing consumption and keeps the capital in the economy flowing.

An important Mantra:

Invest your money and don't lock it up only with safe investments. The money safe in your 'safe' will not yield returns that can save you from inflation. For becoming a well disciplined investor and achieve your financial goals, you need to focus of creating a financial plan.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners http://www.holisticinvestment.in a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

Article Source: https://EzineArticles.com/expert/Ramalingam_K/2430606

Article Source: http://EzineArticles.com/9790353

Gold Bullion: 11 Foolproof Strategic Investment Reasons

Obviously, you may be asking why is gold so important or precious and what is all these noises really about? Well, the brain behind my write-up is that l doesn't want you to be ignorant of your financial/investment/retirement future and planning. You must not continue to leave in the dark-age in matters concerning gold and precious metals, thus I present before you infallible reasons why gold must be part of your investment combo.

1. Assets diversification. When pondering on investment vehicles, usually an old adage comes to mind "don't put all your eggs in one basket". Although some critics say put all your eggs in one basket and watch over it, good luck to them. The reasonable and savvy investors must ensure that at least 5% of their investment portfolio is gold and precious metals.

2. Continual existence of gold. The fact is that gold out-leaved human age and as long as the world remains, gold will be in perpetuity. Gold is superior to other property, products or investments (buildings, vehicles, stocks, bonds etc.) because the value of these properties can erode with passage of time and prevailing economic phenomenon. Take for instance, the global stock market saga of year 2008; also you need to incur maintenance cost in order to keep them in good shape.

Gold on the other hand, the value is not eroded neither does it oxidized irrespective of the number of years we are considering.

3. Scarcity of gold. Gold is finite in supply. Statistics revealed that annual global production of gold is about 2,500tons and the worth of gold in the entire world is estimated at 9trillion US dollars. You better buy into gold now rather than regretting in later years.

4. Status symbol. Without mincing words, gold is highly eyes appealing and have powerful impact on human nature/race. In fact, China and India are well known for the high value they placed on gold as their store of wealth, so their wealth is expressed by the quantity and quality of gold you possessed.

It is inbuilt in human nature to want to belong to the highest investors/social/political class, so the worth of the gold you possessed in some society will dictate whether you belong to this ostentatious class of elites.

5. Counterparty risks. Gold is absolutely excluded from counterparty risk. The said term means you are putting your faith on the ability of the other party to a deal/contract to perform at the due date. The examples of buying stocks, employers and employees will explain better.

You buy stocks from the capital market in anticipation of dividend, price appreciation and cash at later year. It is possible that the stock market may collapse before your target date or the case of employee working for an employer, it is expected that at retirement the employer will pay gratuity and pension but the employer may go under before retirement. All these scenarios cannot happen to gold because it is tangible, in your possession and you can easily convert it to cash to better your lots.

6. Substitutionary insurance policy. The purpose of insurance policy is to put you in the exact financial position you enjoy prior to the loss. Gold can also play the same role if you have same. At the time of national crises (war) like that experienced in Africa - Liberia and Ruwanda, 1Kg of gold can restore a person to life of conveniences again.

7. Bull market (gold). When you read any guide or advisory on commodity or security, disclaimer is usually the beginning of such and the summary is that "past performance is not a guarantee of future result". Therefore, gold is exempted from that pattern and since the beginning of the new millennium; gold has been on bull-run with double digit gains.

8. Anchor against deflation. Of course, an open secret that economic recession is now a global phenomenon, the ever increasing debts of nations (USA and UK for example) could potentially result to deflation with catastrophic economic impacts. The aftermath is that value of assets will be eroded but gold has resilience and perform better in holding its value irrespective of economic challenges.

9. Geopolitical risks. Wars, terrorism (USA - unforgettable 911), natural disasters and other allied perils characterized the global society today. At the time of war for instance, safety and individual's survivor is the major concern, assuredly there will be economic paralysis and downturns. The major assets; real estate, financial instruments, other properties and cash currency will be next to useless in value. During such time, gold provides peace of mind and the value remains constant.

10. Store of value. Historically, gold has thousands of years with backup track records as the best store of value. Irrespective of economic and global situations (technological changes, trends, development etc.) gold possessed the feature of acceptability and constancy of value. Therefore, for the safety of your investment, retirement and to pass your assets to next generation, gold is your best bet.

11. Gold is money backer. History tells us that first gold coins were minted and put into circulation by 550BC; gold has been longest and lasting form of money. Intrinsically, till tomorrow sun shall rise, gold remain a form of money-backers.

In view of these green lights, a stitch in time saves nine. Kindly click on the link below to start your gold investment or 401K.

Adewale Olofinnika is a multi-disciplinary professional, internet marketer and expert writer who has made a landmark in various niches on the internet. He is also a major player in some freelancer sites. Of paramount importance in all deals are professionalism, ethics, attention to details, integrity, uprightness etc. http://goldbullionstrongroom.network

Article Source: https://EzineArticles.com/expert/Adewale_Olofinnika/623561

Article Source: http://EzineArticles.com/9746655