Investment Losses

avi asked:


Why invest and why take out an investment loan?

People’s needs for investment are as varied as the investment vehicles themselves. Some want to own their home outright, pay the kids’ university fees, or take world trips; while others want to start their own business or retire on a comfortable income.

The reality for most of us is that we won’t be able to afford these things on our salary alone (unless you’re fortunate enough to be the CEO of a major corporation). The key to successful investment is to leverage, that is, to use an investment loan to improve your capacity and increase your return.

Why invest in property?

Investing in property is the safest way to invest, but we also believe in a diversified portfolio to minimise risk. Similarly, Australians have trusted investment property as their favoured investment vehicle for generations – and with good reason.

We recognise the cycles, the incredible advantage that appropriate leverage (making capital gains from borrowed funds) offers, the benefits of rent return and taxation relief in servicing those borrowings, and the significant growth achievable over time. It is not unusual for ordinary investors to accumulate four or more properties over 10 years – and the financial flexibility and cash flow outcomes can be exceptional, giving you piece of mind.

Property allows you to leverage. With only $20 000 cash invested (plus around $10 000 upfront costs) it is possible to invest in a $200,000 property, making your earning potential greater.

Can you afford to invest in property?

The question should really be, “can you afford NOT to invest”, whether it be in investment property or some other form of investment? While everyone should be investing to give them more options in life, property investment may not be suited to everyone. Most people on a standard wage can service an investment loan. After all, the investment loan interest is first met by any rental income you generate. As a general rule there will only be a small shortfall on the interest on your investment loan. Traditionally the investment loan shortfall, as well as other costs relating to your investment property would be met by your personal income. Many investors however include a capitalising line of credit in their investment loan package so that they can draw on this to meet any shortfall costs as opposed to paying same from their personal income. Instead, they use as much of their personal income as possible, not to pay any shortfall interest on the investment loan but to make additional repayments to their home loan. This way their home loan is paid off much more quickly.

With your investment loan you should also remember that negative gearing does deliver some relief to servicing your investment loan on the way through. While most investors will wait until the end of the financial year to claim their tax deductible shortfall you can in effect claim the investment loan shortfall on a monthly basis. Check out the ATO website on deductibility of interest on investment loans.

What history can tell you about property

History shows us that all property whether it be investment or owner occupied doubles in value every 7 to 12 years. Each property market is cyclic, that is, it goes through times of fast growth followed by little or no growth. When one market eg Sydney is in strong growth, other markets eg Brisbane will be in a little or no growth phase. The markets are referred to as being counter cyclic – when one is doing well, another is doing not so well.

This means for example that when the Sydney’s growth slows, Melbourne’s picks up followed by Brisbane. This is the reason we emphasise the importance of investment property as a mid to long term investment. The key however is to identify the markets with the highest probability of short to medium growth and lowest probability of downside risk. This enables you to build equity faster and therefore add to your investment property portfolio.

It also means that there are always new opportunities for investment property as there are always markets somewhere which are experiencing their growth phase. Choosing investment properties in growth markets assists in developing well-balanced, diversified portfolios.

Property in the future

In the past all property was good investment property, and a lot of people did very well out of it. While those days are gone, there are still exceptional opportunities for investors who understand the current market influences such how our population is changing, how family size is changing, how types of employment are changing, and how the economy is changing and what influences it.

So why wait? Research property – buy with your head not your heart – be an informed purchaser and most importantly make sure your investment loan is also working for you.



GEOFFREY

Naj Alizada asked:


Real estate investments are very popular these days. Whether you make commercial property investment or residential property investment, you can pave the way for impressive earnings. However, real estate investing is one option, which requires considerable amount of knowledge about all its aspects and this is where real estate investment firms enter the scene. These firms lend helping hands in making you financially independent and let you relax about your post-retirement years.

If it is your fist attempt to earn monetary benefits from investments in real estate, here are few reasons why you should approach one of the real estate investment firms.

Evaluation Of Various Investment Plans

The market of real estate investing is flooded with a number of plans like commercial real estate investments and equity real state investment plans. However, you should have the talent to choose most rewarding plan out of these. A real estate investment firm can help you to evaluate various investment plans in this category, so that you can witness your money growing at a dependable rate. These real estate investment firms have huge networks of real estate professionals and investment experts and thus, they can provide you with profit-bearing investment products.

Saving Your Time And Efforts

Real estate investing certainly requires an individual to spend time and efforts to achieve desirable success as an investor in this market. If you are in a regular job or an active social being, it might be difficult for you to reserve time in this direction. But, you can always take advantage of real estate investment firms to devote time and efforts on your behalf.

An Array of Beneficial Services

The real estate investment firms offer a wide spectrum of services to its clients. For instance, portfolio diversification, debt analysis, tax related issues and due diligence are some of the issues handled proficiently by these firms. You can seek advice from these firms on any aspect of real estate investing at any point of time.

Thus, you can begin your journey towards successful real estate investing with the help of these dedicated investment cradles.

While searching for a good investment firm, you might come across a number of options. However, a search under the lens can help you to figure out, which option is better for you. Concrete Equities is a good suggestion, as the firm is positively reviewed by its clients and market spectators.



SAMUEL

noaut0grafs asked:


2 questions!
1. From society’s point of view the economic function of profits and losses is to …??

2. Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, “At least I didn’t lose any money on my financial investment.” His economist friend points out that in effect he did lose money, because he could have received a 3 percent return on the $1000 if he had bought a bank certificate of deposit instead of the coins. The economist’s analysis in this case incorporates the idea of… what?

WADE

Norton Jacks asked:


American investments for foreign investors can be a lucrative and profitable financial venture. Even when global economies are suffering and not doing well, there still are many investment opportunities to make money in American investments within the USA. The United States is still a world economic power for investing and it’s smart for investors living outside the United States to consider investment projects within the American borders.

For many years, investors all over the world have invested in many other countries investment projects and the opportunities are still there. International Investments are still a good idea for many and allot of times, their may be tax benefits and other features of an investment that can be good for investors. 

International investing for investors living outside the USA can make lots of money and can be a great investment idea. For example, Real Estate projects are available for investors that can make them an excellent profit. Investors may not realize that Real Estate projects can bring in excellent monthly profits from 12-18% dividends.

In these type of American based investment projects, the international and global investor can invest their money in a large community or business project or residential development investments and then they can have their profit or monthly dividends automatically direct deposited into their savings account.

America is still a viable and worthy place to invest your money. Investing overseas is a term relative to which side of the ocean your on. If you live outside the United States and are interested in investing in the USA, you should look at all the options available.

There are other types of investment projects available such as Trust Deeds. These can be solid investments also and just as lucrative as Real Estate investing in America. Again, the advantages can be many and for those investors not living in the United States, it can be a smart place to put your money to make more money. International investments are something to consider now and in the future.

I did a search for “american investments for international investors” and one company that came up was EQlibrium Investments at http://www.eqlibrium.com/ &  http://www.eqlibrium.com/international-investments.asp



ANDRES

Matt C asked:


Is it a fact, or at least reasonable to assume, that if given a few decades risky investments(say perhaps around 35% chance to lose all value) will be more profitable than very secure investments? Does compounding on productive years erase the losses from previous years, or will small rate of return compounded have a higher probabilty of being more profitable?

LEE

skahhh asked:


To pay for their expenses. If they sell large quantities of their investments and you have money in the stock market in those securities that they have to sell, won’t your stocks lose value rather quickly? With all these companies claiming subprime losses, is it a wonder to you that people stay invested at all?

The uncertainty is terrible.

LAMAR

chai asked:


Invests

Wise Invests As Preparation for Retirement

Saving money is a wise move especially if you are really enthusiastic about preparing for your retiring years. however, there is another option that can bring about positive reaps for profit. This happens when an individual invests in a wise investment option enough to bring about positive monetary gains in the coming days of his life. This is because when a person invests there is a chance that the savings will be compounded and increases in life in greater amounts compared to just saving money kept at home or in a savings account.

A person who invests early in life will be able to gain more for his retirement years compared to some one who invests later. There are many investment options available like stocks and securities, mutual funds, and the foreign exchange market. All of these offer chances of gaining profits for your investments. However, it can’t promise that everything will turn out fruitful every time. It is a wise decision to do your homework and be peculiar in what route you are going to travel to in terms of your investment choices.

Take time to study thoroughly each option, acquire some investment knowledge, and be cautious in dealing with brokers and other individuals in the same trade. Times are not easy nowadays so you have to be wary in order to protect every action of invests that you are planning to push through.

Securities Investment

Which Type of Securities Investment is for You?

In the simplest explanation securities investment refer to the purchase of bonds, stocks or shares, treasury bills, and debentures. This route has been recognized as a result of a more revolutionary means of investment that were once only limited for those who have big amounts of money to invest such as corporations or wealthy individuals. At present, investing in securities has also become possible and available even to the middle income persons and employees completely creating a new phenomenon in terms of the securities market resulting to an entirely new perspective, definition, and representation of investments in the world with the same objective of gaining profits for money invested.

Investing in stock refer to the sale and purchase of stock in the share market. This option is not as simple as you may think it is. You need to have deep knowledge about the season changes in the market. Also choosing a dependable broker is also part of the game play. This is especially vital to those who are still starters in this field.

The practice of investing in mutual funds would mean dealing with a mutual fund company that collects investment money from small investors and invests the same money in a variety of bonds and other securities invest in the market. These companies act as the middleman between the two parties. The risk for loosing is rather low compared to stocks since the money you invested is not solely invested in one company alone.

When you invest in bonds, it means that you are giving debt to the issuer of the bond. Payment of the debt comes within a fixed rate; meaning that even before payment you are actually aware of how much you are about to gain from your invested money in that particular bond. This is a form of a fixed rate investment. Types of investment bonds include government, corporate, treasury bills and commercial papers.

While there are different types of securities investments that you can choose from; still it is advisable that you compare the risks associated with each of them so that you can very well decide which of these securities investments can bring you higher profit returns.



WILL

Hanna_420 asked:


I need to do a business presentation for a class, and I need to do it about a company that lost money for the year (I figure it is a net loss for 2007). I have a link to find out the annual report, but I am not sure of what companies lost money last year. I have to turn in the annual report and i am supposed to persuade the audience that my company is still a good investment. If anyone could give me some ideas, that would be greatly appreciated. Thanks a bunch!

ERROL