Annuity Investment

Working everyday to earn and live is not enough to survive. There would come a time that a person can no longer work because of physical incapability. These can happen because of old age, inevitable circumstances like accidents or similar events. Getting old is an expected event but accidents can happen anytime.


That’s the very reason why aside from working every day and spend the money for their everyday needs, people set aside some amount of money to purchase insurance premiums. It comes in all types but these four would be the most useful ones. They are life, health, long-term disability and auto. There is another that may have one of these four while being backed by the financial strength of the insurance company that structures the investment. It’s called annuity investment. It is often acquired by conservative investors because they are certain of an income stream over their life expectancy.

Usually, these insurance premiums can be availed at a certain time and there are instances wherein you will need the money immediately. There are companies who are willing to do annuity quote in exchange of a lump sum that you will need for the mean time.

Availing this offer also needs proper judgment and analysis. The lump sum should be spent wisely because your annuity investment is at stake. It should be spent in order to fulfill your wants like buying a sports car, having a vacation or other non earning expenditures. They are willing to purchase your annuity investment because they know for the fact that you have money to pay them when the future comes.

These offers are great but you see to it that you are dealing with a legit company and make sure you will gain instead of losing. Too good to be true offers are everywhere just waiting for their latest victim.

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Protecting Yields with Sound Investment Management

Getting huge amounts of money in your investment options will not be of much use if you do not have the right money management skills. As investments involve risks and opportunities, you need to practice sound investment management in order to protect your yields and increase your portfolio’s growth potential. Businesses would be wise to have their own finance or investment department overseeing their investments. This could be an internal team or an external group of consultants. For individuals, this could be a financial adviser or a personal investment manager. Either way, these finance experts can help maximize gains and minimize risks in any investment undertaking.

investment managementInvestment management involves balancing risks versus potential
yield and aligning these with the investor’s financial goals.

Not every investment that promises the highest yields is the best for every investor. Often, those that offer the highest yields also carry the highest risk. In this case, an investor who does not have much by way of available funds might not be wise to choose this type of an investment. Likewise, an investment instrument that gives the highest yield in 20 years might not augur well with an investor who would want to reap investment gains over the short term. It is the investment manager’s task to reconcile these factors to provide the best possible portfolio setup for the investor.

There are different investment instruments that you can include in your portfolio. It is always recommended to have a mix of products that offer you a range of yield potential. This allows you to manage your risks so that any loss in one particular instrument can be countered by another instrument in your portfolio. It is important for you to understand such risks right at the onset so that you can plan your asset allocation properly. It is also recommended to have a portfolio review periodically. This will allow the investor and his investment manager to make the necessary adjustments to take advantage of new opportunities or to address upcoming risks.

While it is understandable that you will have to pay your investment manager, your relationship with him should be that of a partnership. You have to find someone who can be trusted to look out for your interest as he takes care of your investment management needs. But, even if you find a competent professional to handle your investments for you, do not take a step back and leave everything to him. You still have to be in control of your portfolio. You should still be the one to make the investment decisions based on your advisor’s recommendations. This is the only way through which you can maximize your investment growth potential.

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Cash and Bonds: Understanding Low Risk Investment Options

Thinking of investing your hard earned money but don’t have any idea how? There are many investment options that you can consider, but for starters, consulting with a financial advisor is highly advised. There will be risks attached to different types of investment, among them, cash and bond are considered to be low risk investment options.


Cash Investments

Cash investments probably are the safest in the low risk investment options available. You will never see a fall in value all throughout the period of investment. However, it also has very low rates in exchange for the security it presents. Because of its low return rate, you will find that cash investments’ inflation rate can run higher than the deposit rate. And while the value of your cash will not fall, the real value of the money or your purchasing power actually decreases and you get negative returns.

The biggest advantage you get from cash investment is that it is very liquid and accessible. People utilize cash invests for easy access and to provide for emergency funds. Cash investments are predominantly synonymous with bank deposits and current accounts.

Bond Investments

Typically, bonds are also considered as low risk investment options but depending on the kind that you would invest in, they can also have medium to high risks involved. You have to be knowledgeable and able to carefully analyze the type of bond you are interested before you jump in.

Bonds are actually loans given to a corporate or government entity for a specific period of time where in the full amount is returned after due. Bond issuer may undertake interest rates on the principle and this is known as a coupon rate. The higher the coupon rate, means higher returns on bond investments. On the other hand, you should be wary of bond with very high coupon rates because they may also entail higher risks on defaulting on repayments of the principal.

The relatively low risk nature of most bonds make investment returns modest at best. You won’t see immediate nor huge returns on bond investments, yet you also won’t experience massive negative returns especially if you hold this until the maturity of the bonds. Still some bond investments can be volatile so you need to be careful in investing in this class.

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Investments in Natural Resources

When it comes to natural resources such as metals, oil, gas and so forth, what do they all have in common? They’re non-renewable. Certainly more deposits can be discovered, but in general for every piece of gold or silver we mine up, another piece like it is not going to be generated for thousands if not millions of years. This can be seen especially with zinc, where shortages are reportedly inevitable.

Then why hasn’t the price gone up to meet this shortage expectation? And if the prices haven’t gone up, why are companies like Xstra and Glencore International, or Canadian Zinc and Paragon Minerals putting in for mergers with zinc as the primary motivation?

As for why zinc hasn’t gone up in price just yet, we can only speculate. Perhaps some people don’t believe the shortage is inevitable, or there’s so much zinc on the market right now it’s flooded it enough to keep its prices stable rather than rise.

As for why companies are merging to gain access to as much zinc as possible, that should be self-explanatory. Do you think people like Charles Reed Cagle, CEO of HEI Resources made their fortune by buying high priced shares? No, a smart company buys shares while they’re low when they have a good chance of increasing in price.

In the case of zinc this price hike is inevitable. Eventually it will become scarce enough that companies will make a huge profit selling any amount of zinc that they invest in right now. In the case of Xstra and Glencore International this is going to be a huge boom. Between them, they would control 9.1% of the global refined zinc market, a large enough amount that the merger has been delayed by the European steel association.

It’s hard to say when this grabbing at zinc will stop, simply because it already should have. But until the price of zinc begins to reflect its increasing scarcity companies will be investing as much money into it as they can.

It’s a simple case of supply and demand when it comes to zinc, but economics complicates things. The less supply and more demand of something is the more its worth, but the prices of zinc have not yet caught up to this expectation. In the end, when you have a chance to buy into something cheap that is guaranteed to become valuable, you should.

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