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November 13, 2015

Why You Should Reevaluate Your Mutual Funds Each Year

mutual investment fundsOverview

Mutual funds are one of the best ways for people to enjoy a high rate of return over the long term. A mutual fund is generally a collection of stocks that are chosen by the fund manager. There are some fees associated with investing in a mutual fund, but generally the rate of return that is offered will offset the higher fees. One of the most important things for any investors to do is to reevaluate the mutual funds that are owned every year. Over the long term, this can be a great way to take a look at the overall strategy that is in place with your investments. Here are several reasons why this is so important.

Diversification

Having a diversified portfolio is one of the most important aspects of earning a solid return over time. There are many people who have too much of their portfolio invested in one type of mutual fund. Spreading out the capital that is invested in various mutual funds is a great way to diversify the funds that a person owns. Over the long term, a diversified portfolio generally has lower rates of risk than portfolios that are not diversified.

Better Selection

Over time, an investor can have a better selection of funds by looking at them every year. Although the past is the best way to gauge the future, there are some funds that have performed well in the past that are not performing well now. This would only be noticed by taking a hard look at the funds that are owned by a person. By taking an unbiased look, an investor can decide to reallocate his or her funds into different sectors of the market. This can make a huge difference over time in the rate of return that is offered by the investments.

Rate of Return

The rate of return that an investor earns on his or her portfolio is one of the most important metrics to follow. There are many different ways in which the rate of return can be increased. Always make sure that a portfolio is diversified over the long term. In addition, there is a correlation between risk and return. Younger investors can afford to take on a higher level of risk because they have more time to recover from the risk. This is important to keep in mind for those who are just starting out investing. By looking at all of your funds every year, this is a great opportunity to invest in those funds that will go up more in the future. Over the long term, this will help to boost the rate of return that is earned.

Final Thoughts

Mutual funds are a great way to have a diversified portfolio that has a proven track record of success. However, it is important to choose the correct mutual funds to invest in. There are many different sectors and funds for investors to choose from. One of the best ways to keep a portfolio working over time is to constantly reevaluate the investments that are made. This is one of the best things that any investor can do in order to have a high rate of return over the long term.

Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks.

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October 29, 2015

Temporarily Strapped For Cash? A Direct Online Lender Can Help

Temporary cash flowThink short term loans are for financially irresponsible people? Not quite. When circumstances outside of your control drain your savings and leave you wondering how you’ll cover all of your expenses when pay day is another week away, short term loans can be the only way you keep your household budget out of the red.

There are plenty of reasons why you might need a short term loan. A sudden medical expense, vehicle repair, or utility bill could come at a time when a leaking bathroom pipe needs immediate repair. Bills and repairs compound until you owe more than you can afford. The reasons why aren’t important when you’re the one on the hook for these expenses. The anxiety caused by bills can be devastating, but the stress can be alleviated with the help of a direct online lender.

Part of this stress is finding a loan that will fit your time line. When your bills are due immediately, you can’t afford to wait for a lender to take days (or even weeks) to approve your loan. A direct online lender can provide quick and convenient loans when you need it most. By virtue of being an online lender, they can approve and facilitate your loan through their secure website. Everything is done virtually, and you can receive an electronic transfer into your account in as little as one business day. Imagine having the luxury of getting the loan you need in that short time frame. You don’t have to rely on a financial advisor’s schedule to speak about your loan options and or wait weeks to see the money you need.

Beyond expediency, you’ll find that direct online lenders differ in the types of loans they offer. Go online and read up on the terms, rates, and conditions that each state-licensed direct lender can offer you. Your research will no doubt bring you to discover how MoneyKey can help when the going gets tough. They don’t believe in providing the same loan to every one of their clients, regardless of financial standing or needs. They can issue lines of credit, installment loans with flexible payment options, and single-pay loans depending on your unique financial situation. Each loan is has its own advantages, so you should explore which one better fits your needs. Having the luxury of flexibility means you can shop for a loan with rates that you can reasonably manage, never having to settle for something beyond your means.

When you find a loan and lender that meets your standards, you’ve gotten to the easy part. All you have to do is fill out a convenient application form and wait to see if you qualify. Once you do, you’ll have the money you need to face the unexpected expenses that put a strain on your budget.

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November 19, 2014

Managing your finances as a self-employed worker

Finance for freelancerSelf-employed workers may be extremely focused and have an entrepreneurial spirit that will lead to business success but they are also notorious for being disorganized when it comes to paperwork. It really is not possible to be an excellent businessperson and an office administrator. Unfortunately, administration is the backbone of every business and it absolutely must be carried out on time and accurately for a business to maximize its profits.

Many self-employed workers or contractors actually find the financial side of their business intimidating and confusing. There are so many ways to set up a company and manage its finances, and many rules concerning the filing of company accounts and record-keeping.

A small business whose financial side is not managed correctly may find that it loses money and this can hit profit margins hard. Sometimes money is lost simply because a business forgets to invoice for work carried out, or because it undercharges. Suppliers and subcontractors will rarely chase up a late invoice.

Ask any accountant and they will tell stories about entrepreneurs who have months of receipts and invoices piled on their desk, check payments with no details of what the payment was for and receipts of funds into their bank accounts with no note of why they were paid. Couple this with the need to file tax returns correctly and on time and the result is an extremely chaotic office that acts as an anchor weighing down the whole business.

Taxation is one of the most complex areas for any size of business and keeping accurate records of all set-up and ongoing costs is vital to allow you to submit an accurate tax return after your first year of trading. Poorly-managed accounts often result in paying more tax than you should – you cannot claim expenses if you lose your paperwork.

Many employee benefits are tax-deductible such as life insurance and pensions. In fact, all HSA contributions are tax-deductible. Self-employed workers can also deduct from their tax bill the cost of disability and dental insurance premiums along with legal and liability cover. Few self-employed workers manage to claim all these expenses correctly.

Efficient business finance management requires both time and excellent organizational skills. There are several areas of financial administration where self-employed workers repeatedly fail, such as chasing invoices, pricing services and keeping up with tax matters.

Fortunately, there are many accountants that offer specific tax advice for contractors and some provide business administration as well as accountancy services. These are called umbrella companies and they provide a way for contractors and self-employed workers to receive help from qualified accountants with the financial and tax aspects of running their business.

An umbrella company essentially acts as an operating company for an entrepreneur, contractor or small business. The umbrella company manages all business finances from daily accounting and administration tasks through to the filing of annual accounts and management reports. The umbrella company manages all the accounts and pays you a salary so that you can focus on what you do best – running a great business.

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November 15, 2014

Do you look after your money?

All about moneyYou should think about this. Meanwhile I tell you a story.

One weekend my daughter was invited to the swimming pool with a friend’s family. The day was not so good for swimming because of the weather, however my daughter was enjoying it much.

But then she discovered that her money disappeared from her purse.

And she was not alone who did not find her money. A mother of her friend also had no money left. It might be done during the group was swimming and their bags were left unattended. But my daughter was quite lucky, because her iPhone was not touched.

When she returned home, we had a discussion that valuable things must not be left unattended. We reminded her that we always leave someone to look after our stuff, or lock it to secure, when we go somewhere. If you leave your things they can be easily stolen.

This was a simple example when a person did not look after her things very carefully.

So this returns us to my question. Do you always take care of your money? Or can you just allow someone take your things away?

Do you feel that using coupons is a shame or just not worth your attention? So in this way you let retailers take more of your money that it is necessary.

Do you forget to turn off your thermostat in order to save costs when you do not stay at home for weekends? Does it take much time or is it too difficult? In the same manner you can just throw away some dollars every week.

Do not you shop on sales just because you can afford buying things at their full price? It also means that you do not think how pricey your work is.

Do you take long-term credits if you know you can not pay them back? I was always a supporter of Direct Payday Loan Lenders UK at VitaLoans. It is much easier to return and they do not put you in the debt hole. So you should better think what to choose.

Do you watch all channels with your cable package or just pay for them? Nobody except you must monitor this.

Do you prefer only brand items and can not permit yourself to buy clothes and shoes in ordinary shops? I hope you feel cool about it, because it does not matter to anybody else.

Do you remember what plan package you have on your cell phone? But you should pay attention to this, because mobile phone providers often change the pricing system without notifying you.

Does it sound familiar to you to leave your money unattended? If you can catch yourself on any situations from the above, you must think about your money better. You should not forget how hard you work to earn them, and always respect your labour and money.

Please do not just give it away so easily. If you have too much, I can help you to respect it. (A joke)

So I ask you for the last time. Do you take enough care of your money? You should just begin doing this, and it will become a habit. It is not so difficult as you can imagine.

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October 28, 2014

Enhancing Your Portfolio With Commodity Trading

commodity tradingPersonal investments can take many forms. Depending on the income of the investor, his appetite for risk, the expenses that he is responsible for and the rate of return that he expects, his investment portfolio will contain different instruments of financial saving. In general some common investment opportunities include real estate, shares and bonds, gold in physical form or tradable bonds, and mutual funds with a systematic investment plan or SIP. Of late people have begun venturing in to the field of commodity trading as a retail investment as well.

What does Commodity Trading involve?

Commodities in the field of Commodity Trading refer to food, energy or metal products which are an important aspect of industrial production. These key commodities are important for development and thus people invest in them using different options. The first is a Futures Contract wherein an investor agrees to buy or sell a specific commodity at a given price in the future at an agreed date. Futures contracts can be drawn up for commodities such as crude oil, natural gas, gold, silver, and even agricultural produce such as wheat, corn and rice.

The trouble with a Futures Contract is that it is very high risk and also rather expensive for a single retail investor. This is where commodity trading companies can help. As a retail investor you open up an account with a commodity pool operator and this person or partnership invests the money collected from individual investors in futures contracts and options. They keep you updated with account statements and annual reports. You ride out the contract with the partnership and split the profits or losses as generated.

Other Instruments to Invest in Commodities

While some investors are happy allowing an expert to handle their daily buying and selling, others wish for a more hands on approach. In this case stock options are a good investment plan. Commodity stocks are easier to buy than futures contracts. They also employ the broker pattern, so if you are already using a broker for company stocks, you will find it easier to add on a broker for commodity stocks. You can also hold on to them or sell them at will based on what changes you see in the market as you track them. Needless to say this option offers you greater control over your investment.

If monitoring commodity stocks on a daily basis is an activity that you would rather not do, you can consider investing in Commodity Exchange Traded Funds. These track the price of a single commodity and use an index of futures contracts. So while you are not directly investing in a futures contract you can still get the benefits associated with investing in one. Not all commodities have Exchange Traded Funds associated with them, so your investment options in commodities via this instrument will be somewhat limited.

You can also invest in mutual funds as an indirect means of commodity trading by investing in a mutual fund that invests in the stocks of companies that are involved in commodity trading. This will allow you to be recipient of the trickledown effect in the profits generated and will also guard you against sharp losses. All in all commodity trading is an investment worth considering in your portfolio.

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