Not only will this basic investment guide for the inexperienced investor list all of the popular investment choices out there, it puts them into perspective. For example, some investments are safe and can quickly and easily be bought or sold because they have high liquidity; while others offer high profit potential with significant risk and low liquidity. This investment guide divides the investment universe into just two general categories: FIXED and VARIABLE investments. Each of these can be further separated into two parts, for a total of just four basic investment options, which are often referred to as asset classes.

Fixed investments pay interest and are safer than their variable counterparts. They get their name from the fact that either the investor’s principal (amount invested) or the interest rate paid is fixed and does not change for the life of the investment. Cash equivalents like money market funds or savings accounts is the first subcategory here, where the principal is fixed and does not fluctuate in value, while the interest rate can vary over time. The other subcategory is bonds, where the interest rate is fixed but the principal is not, as bonds fluctuate in value.

Variable investments are growth oriented and their price or value fluctuates, or is variable. Both profit potential and risk are greater here as the primary objective is to profit from an increase in the price or value of the investment. Stocks are the first subcategory and they offer good growth potential with some dividend income, and can easily be bought or sold on any business day at market price. Alternative investments include real estate, oil, gold, other commodities, and all other investments not mentioned above as the fourth category; and they can offer investors growth opportunities and perhaps income with varying degrees of liquidity.

In a fixed investment the investor is simply lending money to an entity like a bank, corporation or the government to earn interest. With a variable investment you take on the risks associated with ownership in order to make a higher rate of return. In putting together and managing your personal investment portfolio include all four of the asset

classes to achieve balance. In this way you should be able to get long term growth plus income with only a moderate level of risk.

In any endeavor the devil can be in the details, and investing is no different. Even a complete investment guide can’t walk you through the details of every specific investment option available today. But now you should have the big picture in your mind and a foundation to build upon.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Earnings are an accounting construct. Investors don’t get paid with earnings — they get paid with cash. When you invest in a company, it will pay you back in the future via dividend payments or stock repurchases, both of which are paid in cash.

A Company as a Cash Processor

Before we get into formulas and financial statements, let’s step back and look at the basic functions of a business.

First, a company sells its product, generating revenues. After collecting cash from its customers, the firm pays the costs of doing business, sending cash out to pay salaries, rent, taxes, etc.

After expenses are paid, the remaining cash can be reinvested in the business. Short-term assets like inventory and receivables (called working capital) get used up and need to be replenished. Long-term assets like buildings, plants and equipment (capital expenditures, or capex) need to be expanded, repaired and replaced as they get older or as the business grows.

Now that the company has paid its bills and reinvested in itself, hopefully it has some money left over. This is the free cash flow to the firm (FCFF), called such because it’s available (free) to pay out to the firm’s investors, generally comprised of two groups, bondholders and stockholders. Bondholders get paid first, stockholders get paid last.

So, after collecting revenue, paying expenses (including taxes), investing in the business, making interest and principal payments to bondholders and maybe borrowing more money from bondholders, the amount left over is the free cash flow to equity (FCFE). It’s available to be paid out to the only people who haven’t gotten paid yet, the equity owners (stockholders).

Now, at this point the company’s board of directors may or may not decide to distribute the FCFE to shareholders. They might pay out some or all of the FCFE as dividends, or they might choose to keep some or all of it in the company for future projects. But the point is, the FCFE is the source of any payouts to stockholders, so these are the cash flows that are relevant to calculate the value of a stock.

Calculate FCFF

Not surprisingly, to calculate FCFF, you’ll need the company’s financial statements. FCFF can be calculated using a number of formulas, but this one is probably the most straightforward:

FCFF = CFO + Int * ( 1 - T ) - Inv LT
CFO = cash flow from operations (cash flow statement)
Int = net interest (income statement)
T = tax rate (notes to financial statements)
Inv LT = investment in long-term assets (cash flow statement, financing activities)

Don’t forget the Int * ( 1 - T ) term, which is probably the most confusing part of the equation. It accounts for the fact that interest on debt shelters a portion of income from taxes. The Int * (1-T) term reflects tax shield.

Calculate FCFE

Most of the hard work went into calculating FCFF, so if you want to go on to calculate FCFE, you can use the following formula:

FCFE = FCFF - Int * (1-Tax rate) + net borrowing

The price of a stock today is simply the sum of its future cash flows when those cash flows are put in today’s dollars. FCF can lead you to the value of the firm as a whole, or to the value of just one share of the company.

Read more here: http://investinganswers.com/term/free-cash-flow-1000

First off, a cardinal sin that many new buyers make is that they solely look at a mutual funds previous performance and not at the attainable future. Certain, a stock or mutual funds performance previously is a good sign of how its been managed and it all the time is an effective signal to encompass your self with individuals who know what their doing, but it’s a must to take the present state of the market into account. For example, funds which will have been heavy on dot .com’s did nice in 1998 and 1999, but if you happen to had a fund that was heavy in tech stocks in 2000, you in all probability lost your shirt. Past performance doesn’t imply as a lot as individuals think it does, and you would be clever to not put as much emphasis on it when you go to invest.

Whereas the odds listed in the prospectus might seem low, operating bills for mutual funds actually do matter. In the occasion you’re looking at a fund that might have a higher than common percent payment for working the fund, you might wish to have a glance at different funds, instead. Most market specialists think that the share of returns over the next few years will likely be down, and so that price for working the fund takes an even bigger and bigger chunk out of your profit. It may not look like much, but it may probably really add up over time, especially if profits are down.

A small however vital part of investing is checking out what your fund manager has on his plate. This can be achieved by checking the prospectus the fund company sent you. Bear in mind, in case your fund is doing bang up business, it’s seemingly that the fund manager who’s overseeing it’s going to get extra funds to handle or a promotion to look over an entire group of funds. This could likely take away from the time he has to look over YOUR fund, and while we wish fund managers all of the luck in the world in their career, you need somebody who’s going to be focused on making money for you.

So long as there are people investing in mutual funds, there will probably be mistakes made. While they’ll be avoided completely, a couple of common sense suggestions may additionally help you avoid the biggies and preserve your money working for you.

Rutchell Cobol is Electronics and Communication Engineering,Internet Marketer and Article Writer It’s only 3 days ago that I have stumbled upon a website that says that I can “build my OWN internet business” by Capturing Resell Rights Profits Fast! without having to research, and develop or create a product myself.

Before an investor can start a diamond portfolio, there are a few preparations to make. Learning about your investment is the first step. Learn about diamonds; about what makes them so valuable and how they come to be valuable. Then, as with any investment, figure out your budget and stick to it. You should also decide if you would like to purchase loose diamonds or diamonds in settings (jewelry.) Loose diamonds are easier to sell as not everyone likes the same settings, but jewelry can be worn and appreciated. Finally, research diamond dealers. In every industry, there are people willing to part you from your money with mediocre goods in return; the diamond industry is no different. Be sure to find a dealer you trust with good recommendations.

Here are some tips on finding the right diamonds for you:

• Always look to the 4 C’s (Cut, Colour, Clarity, Carat) before buying. Make sure you know what you are looking at.
• Choose diamonds that you can, at some point in the future, resell. Classic cuts are a much better choice than fashionable cuts; round and brilliant cut diamonds are usually the best investment stones.
• Don’t bother with anything under 0.5 carats - from a true investment standpoint these are most likely too small to be profitable.
• Try to find anything from medium quality and above as long as they have no imperfections or discolorations.
• Try to look at the stone in a natural versus fluorescent light so there is no chance of the diamond appearing whiter than it actually is.
• Look at your stones loose before you purchase them. Settings can hide flaws so make sure you can see the stone from every angle.
• Take your stones to independent appraisers (people that are not linked to any specific dealer or store).

Investing in diamonds is not a short-term gamble. It is something that takes time, patience and a love of the gem itself. The diamond has proven valuable and desirable for thousands of years and will always be “a girl’s best friend.” Above all, the key to this venture is being happy with your choice, and if you choose to purchase these lovely stones, then you can be sure that someone - whether it be you or a recipient - will be thrilled.

Lilly Gordon is a freelance web writer. She is interested in and has written about, a variety of topics. She is especially enthusiastic about investment options and diamond jewelry.

You wont have to worry about loosing certificates, putting them in the safe, or delaying transactions. All you have to do is open a brokerage account, just like you would a bank account. You can even have a live agent place trades for you if you like. Some accounts will charge more for a transaction if you choose to use a broker to place trades for you. The cost is very minimal today, so you don’t have to worry about shopping around to see who is cheaper. You can spend your time on investing and learning.

You can also take advantage of convenient record keeping online. All you have to do is go online and see your statements 24 hours, 7 days a week. You can even print them out when you need to. Most of the firms will have your account balance sheets, which show how much you own of what and when you bought it.

Most brokerage firms also have insurance that is backed up by the Securities Investor Protection Corporation, also known as SIPC. This usually covers up to $500,00 in securities and $100,000 in cash protection. You don’t have to worry about the firm going bankrupt, you are covered.

You can also have one account and have fewer things to worry about at night. You can hold a variety of investments in one account. You can hold stocks, bonds, options, and some mutual funds in the account. You will have to check with the broker for specifics on this, but most are no problem. Also, when it comes tax time, you can just go online and print out what ever your accountant will need. Some brokerage firms have a year end account statement that will have everything on it. If that doesn’t work you for, you can always request paper copies each month or just print out what you accountant needs. Doing business electronically is so easy and there’s nothing to worry about, all the records are stored in the brokerages database.

Darius has been writing online for a while now and has a lot of different interests. You can check out some of his sites at http://www.usedhockeyequipment.org and http://www.usedadjustablebeds.org

Some formulas are lower risk than others largely the goal with any type of investment whether it is the long or short term is to protect the capital and receive the largest gains with the least amount of risks.

It is just a simple truth to finance, making money requires risk, the more risk the more potential. Of course risk should always be peppered with a bit of common sense. If this is something you are setting to do on your own, than you should absolutely consider gathering as much information as possible. Review as many strategies as possible to get a broader view of the possibilities. Knowledge is certainly power especially when it comes to investment.

Investment Vehicles

There are some investment vehicles that are much safer than others when it comes to the short term. A lot of shorter term investment strategies revolve around bonds or other treasury notes. Short term bonds combined with other investment vehicles will give you opportunities to collect higher yields within a low risk environment.

Investing in government debt is a favored investment strategy because the risk is so low. In almost every instance of this kind of investment the returns will be decent and the risk is very close to zero. Now with this strategy it is important to understand that the yields are not going to be through the roof but they will be decent and your principal will be well protected.

Other investment strategies include diversifying in equities of course this will come with much greater risks. The capital investment will be at risk with any stocks, indexes or other equity vehicles. Of course with greater risks there will come higher yields. Some folks are much more ready to lose their principal if it means they may be on the winning side of things and gain higher yields.

Click here to learn more about short term investments such as a fixed rate bond.

What would you do if one million dollars suddenly landed on your lap tax free? I can list down all the things I can buy and spend it on but here’s another question you might not have thought of: How would you make One Million Dollars Grow?

I’ve read so many stories about successful people starting out with little more than a few dollars and had turned it into fortunes. What if you could start with a million? Would you have it easier? Could you turn it into five million, maybe ten or even a hundred? How would you do it?

I have been reading about Chinese culture lately and their method for investing struck me. The Chinese have a simple rule of what to do with a sudden windfall of cash that somewhat makes sense. If I had a million dollars today (tax free), I would follow these steps:

10% = Fun Money

Fun Money is simply spent on anything you want! $100,000 sounds like a lot of fun! I would buy the Mercedes Benz that my wife and I have always wanted. It’s an E Coupe. That would probably knock off half of my fun money right there. (sniff.sniff) The rest I would spend on paying debt (credit cards, car payments etc.), also making the necessary repairs, modifications and upgrades on my home and travel time with my family.

20% = Low Risk-Low (to medium) Return Investment

A low risk- low (to medium) return investment is an investment wherein there is a high capital needed but the ROI (Return of Investment) will be on a ’slowly but surely’ pace. Within these lines I may venture into a string of franchises (food with good brands) or buy some real estate (land, apartments, etc.) which provide monthly checks and keep the investment at an appreciating rate. The goal here is to make a safe investment. There are no guarantees on anything but these investments are considered less risky.

10% = High Risk to High Return Investment.

This investment is simply a high risk endeavor with a potentially high return. They can be joint ventures with partners to form a company that pushes a new and exciting high potential product into the market, put up a new restaurant, etc. This can also be used as funds for being a venture capitalist for entrepreneurs with great ideas but are low on capital. On the other hand, if a good opportunity has yet to come along, the money can be used to invest in the stock market, mutual funds or bonds but the case should be that it can be liquidated in a short period of time when the right opportunity presents itself.

60% = Savings / Sleeper

Finally, $600,000 would be put to work through bank time deposits, CD’s etc. The interest earned would be a nice pay off. It can be appropriated to more savings or to finish up mortgage payments. The important thing is to let this huge chunk of money work for you. Can you imagine having $600,000 working for you while you relax? =) I would hire a financial planner that can present to me a host of safe investment vehicles with good interest rates.

So out of a million dollars, 60% is intact and growing, while the other 30% is invested and already working for you. There are checks coming in month on month without you having to really work hard for it. This is called passive to semi passive income. For me it is the right way to not just live life but to actually enjoy it.

So what would you do with One Million Dollars?

http://www.daily-success-stories.com

* When will you know if we’ve reached the ‘mania’ stage.
* How do we know when to sell.
* And how do we know if there’s still time to buy.

When a market begins to sizzle the investing public will crowd in, but the contrarians will think it must be time to get out. Which stage are we at right now?

Here are some indicators to help you jump in the right direction

1. In April 5, 1933

President Roosevelt, signed Presidential Executive Order 6102 made it unlawful to own or hold gold coins, gold bullion, or gold certificates. The export of Gold for purposes of payment was also outlawed. Fear is growing right now that the same or similar restrictions could be imposed by the present administration if gold hoarding continues to grow. For this reason many buyers of gold are choosing to store their precious metals in the vaults of Europe, particularly London and Zurich.

2. Another indicator that the upward trend of gold is likely to continue

comes from the activities of central banks which are now becoming net buyers rather than sellers of gold. This change in buying activity is also confirmed by the level of official gold sales - used for many years to depress the level of the gold price - which have reduced considerably. The normal level of expectation for gold sales through official sources is around 500 tonnes per year. Last year it was only 150 tonnes, which could greatly effect the gold price level. Not only is gold more likely to rise, but at a faster rate if the level of price suppression has been reduced.

3. The economic woes of Europe are far from over.

With Spain, Portugal, and Italy still hanging on with massive debt levels, will Germany agree to bail them out in the same way they rescued Greece? The reaction of the German public would indicate not. If more bankruptcies are declared the likely outcome is for the healthy northern European countries to separate from the more profligate spenders in the South, signaling the demise of the Euro. This would be a signal for golds upward trajectory to accelerating.

4. When small mining stock takeover activity increases,indications are that gold/silver are expected to keep on rising. Right now there are a strong signs of increasing takeover activity.

5. Gold pundits are reporting that gold’s price rise, against major currencies is accelerating. Gold has achieved a record level against the Euro, Sterling, the US Dollar, and even the Swiss Franc.

So how far is the price of gold likely to rise? Estimates vary. But $2000 in the fairly near future is not an unreasonable expectation. After that who knows! It could be a long and profitable ride if the state of the world finances are anything to go by.

So should we buy? The sensible advice right now is if you don’t own any gold or silver, it is possibly safer to buy than to wait. Buy some bullion coins, or invest in a bullion ETF. Check our Gold Report on how to invest.

If you already own the precious metals, you may prefer to wait for a summer pull-back before increasing your holdings, though the way prices are rising, the summer doldrums may not be so obvious this year. Anna P. Best was based in Singapore for many years where she developed her interest in precious metals. Until recently Gold has not been an area the average investor would consider, but that has changed and suddenly there are so many opportunities out there to profit from gold and silver. Anna enjoys sharing her knowledge with other enthusiasts. She has prepared a complimentary report packed with facts which you can download at Link to Gold Report.

The investor that has bought the bond has a few choices. The investor can choose to keep the bond until it matures, or they can sell it to another investor if they choose. Bonds change hands a lot of times from investor to investor before the bond will mature. This is viewed as less risky by some investors.

Bonds are also used to protect portfolios. Generally when stocks may be going down, bonds historically have went up. This is an important factor that people need to consider for their portfolio. If your stocks are loosing value, then you can look to your bonds to outweigh the downside with the stocks.

You will want to look at the credit rating for the issuer of the bond. This will help you determine the amount of risk associated with the bond. If the company has credit problems or not enough capital, they may miss interests payments on the bond, or may not be able to pay it back. This leads to companies that have lower credit ratings to have to pay more in interest to get investors to invest in their bonds. Make sure you check their credit rating before you consider buying into them.

Depending on how much you have to invest and where you are in your investing career, you can choose more risky investments for a chance at a higher return. This is a great way to make some extra money. On the other hand, if you choose to invest in only steady bonds, you can expect a smaller return. You might be able to sleep at night better if you choose a less risky route.

Darius has been writing online for a while now and has a lot of different interests. You can check out some of his websites at http://www.trunkcoffeetable.org and http://www.computertabledesk.org

There is one company that I have used in the past that is very noteworthy of trying at least. Many different people offer services and they usually are called an oracle. In the definition from the dictionary, oracle in this sense of the meaning means a person who delivers authoritative, wise, or highly regarded and influential pronouncements. This is a service people offer advice to help you invest.

The service that I have used in the past and recommend for everyone to check out trades all of their trades live that you can see. They document these trades and have done so for a long time now. They walk their walk and talk their talk. They lose money correctly as they put it. You have to be prepared to lose money in this game. When you are wrong, you need to know when to get out. Even if the stock comes back up, there are rules at all successful investors follow.

You can check out this company for yourself in you life. If you Google the search term, the market guys, you will find their websites. Go check them out for yourself and see what you think. I am sure there are many other sources out there that offer an oracle, but I have personally met and used the two gentlemen that run this company. They are both in line with their integrity in the business.

They also offer educational software for you to use if you don’t want the oracle. Its all up to you. You will have to pay a monthly subscription for the oracle, but I believe you can try it free for 30 days. They used to offer that, I am not sure if they do now or not.

Darius has been writing online for a while now and has a lot of different interests. You can check out some of his websites at http://www.palmtreecomforter.org and http://www.baywindowcurtainpoles.org