The Bull Hunters Guide

Hoping you enjoyed last weeks post in the investing series, where we looked into investing in stock options. We are nearing the end of our segment on alternative methods of investment. After just a few more segments, you should have an intimate and thorough knowledge of all kinds of investment opportunities that simply elude most casual investors. And why?

It’s all because they think this kind of thing is too advanced for them, and so they never bother to learn how easy it really is. They keep doing the same old thing with their money, time after time. That might work some of the time, but you’ll never that you’re doing the absolute best thing at any given moment. That’s why it pays to be educated.

Investing In Preferred Stock

This time, we’re going to talk about preferred stock. Preferred Stock is very much like typical stock investments in that you’re buying a “share” (or multiple shares) in a publicly traded company. The real difference is that with a preferred stock, you’re given a fixed dividend that will be paid out at specific times, rather than the performance dependent variable dividend that is given to holders of common stock.

In addition to making this a more stable form of investment, it’s also the case that if a company does have to liquidate, then you’ll be paid off before common stock holders. Debt holders, however, still come first.

The Benefits

Another thing to note about Preferred Stock is that it’s callable. This means that at any given time, the company can choose to buy it back from you. However, this can be seen as a benefit, because to do so, they usually have to pay you a premium.

For those looking for a less volatile investment than common stock, but one that works roughly the same way, preferred stock trading is an excellent avenue to look down.

You can buy and sell Preferred Stock the same way you would your common stock investments – just ask your broker. Be warned, however, that depending on which broker you use, you might need to maintain a minimum balance in stock in order to hold a preferred account.

See you next week for part 14 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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Last week in the Bullhunter blog, we discussed the topic of mutual funds, but investing isn’t just about making money. Every good investor knows that it’s about preparing for the future and about having a safety net in place in case things don’t go our way. In order to make the most of this safety net, it pays to know about many different types of investment opportunities that are available.

While most are usually overlooked as being too complex or dangerous, we’re here to dispel those notions and inform the amateur investing community about opportunities that they might be missing out on.

Defining Stock Options

This time, we’re actually going to be discussing something directly related to the stock market: Stock Options. Previously in this blog, we discussed quite a bit about all the various options that are available to investors. Nonetheless, the topic is still worth mentioning in this context. Simply put, stock options are when you buy or sell the right to buy or sell a stock at a specified future date.

Types of Options

Why would anyone do this? It’s usually the result of differing predictions about future market behavior. When you purchase a call option, you then have the right to buy a stock from the seller at a certain price at a certain time. If the value of the stock rises above that price, then you come off well, because you can then buy that commodity for significantly less than market price.

When you purchase a put option, it gives you the right to sell an asset for a certain price at a certain time. If the price of the stock in question falls lower than your put price, you profit because you’re able to sell for more than market value.

As you can see, stock options are kind of risky. However, for those who enjoy the predictive aspects of stock market investing, they are a great way to maximize your profits while at the same time reducing some of the risk of raw investing.

See you next week for part 13 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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There are many ways to invest your money beyond simply buying and selling stocks, and we touched on one of these strategies in our last post on municipal bonds. In this series of blog entries, it’s been our mission to bring those opportunities to your attention and make you aware of how to make the best decisions for your money in any given situation. The more you know, the better you can take care of your investments, and prepare for your future.

The Mutual Fund

This time out, we’re discussing one of the most popular of all investment opportunities, the Mutual Fund. The mutual fund is essentially just like investing in the stock market, only it’s less volatile, and gives the investor in question much less of a headache.

Okay, so maybe that’s not the most accurate description. Let us just say that the value of a mutual fund depends largely upon your personality and intelligence.

If you’re an adventurous sort of investor, and someone for whom the main draw of the stock market is the risk and gamble, then mutual funds aren’t for you. But if you’re just someone who wants to invest for the sake of getting a better return than from a savings account, but would rather not bother with all the fuss of researching individual companies before buying and selling their securities, then you should definitely look into them.

Long Term Investment

When you invest in a Mutual Fund, you’re pooling your money with many other people so that a manager can invest in stocks on your behalf. The idea is that you then just sit back and let the account accrue value, making it ideal for long term investments.

While long term is typically the best strategy for mutual funds, you should be well aware that there are other variations available, such as mutual funds that offer more aggressive growth possibilities in exchange for a lesser “security”. Take your pick, as any type of Mutual Fund is an excellent opportunity for your money to grow.

See you next week for part 12 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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I trust you enjoyed our post last week on mortgage backed securities. At the moment we’re a little over halfway through our series on the wide world of investing. So far, we’ve focused on covering those types of investment opportunities that are too often overlooked by those who deal in stocks, or are concerned too complex or risky for the amateur to get involved with. Hopefully, we’ve been able to demonstrate that that’s not always the case.

Municipal Institutions And Bonds

This time we’ll discuss the ever popular municipal bond. Municipal bonds are essentially an investment that involves you loaning money to a municipal institution, from one of the many levels of government. In order to draw in money to engage in their necessary ventures, many municipal organizations sell municipal bonds, with the intent to pay them back later, after having received profit from the venture in question.

Municipal bonds are very popular among investors because they allow for a unique opportunity to make investments that are very often free from taxation. Most are free from federal taxes, and as if that wasn’t draw enough in and of itself, the majority have no liability towards state taxes either. Essentially, any income you make off of a municipal bond is tax free.

Low Risk Investing

Municipal bonds are another form of investment where the main purpose is to establish a continuous income of sorts rather than to accrue a lot of money all at once in a lump sum burst.

There is a very minimal risk involved with buying and profiting from municipal bonds. Basically the only way to lose your investment is if the municipal organization in question goes belly up. This happens very, very rarely. However, it pays to learn a little bit about the organizations you’re dealing with. Whereas big city municipal organizations might sell more expensive bonds, they’re also much more likely to stick around for the long term, allowing you to profit with greater confidence.

See you next week for part 11 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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In last weeks post, we discussed investing in the Money Market and hopefully you’ve been learning a lot from our recent series intended to introduce you to all the other types of investment opportunities out there besides just investing in stocks.

The more options you’re aware of when it comes to investing your money, the wiser the decisions that you can make, and that leads to a happier, more secure future.

Talking Mortgage Backed Securities

Today we’re going to be talking about Mortgage Backed Securities. To put it simply, a mortgage backed security refers to an investment plan whereby you loan money to a homeowner or more frequently, to a corporation, with the promise that you are then entitled to a percentage of the interest that they are obligated to pay on their mortgage.

This is a type of investment that many banks are keen on making, because it allows them to act as a middle man, so to speak, without the responsibility of handling funds directly themselves.

Mortgage Backed Securities are usually secured by government institutions, so there is a minimal risk involved in their buying and selling. They are considered to be a very safe investment for the most part, with a payoff that is actually slightly better than that of treasuries, another popular option.

Monthly Income

Mortgage backed securities are a popular form of investment for those who want to be able to draw a monthly income from their investments, rather than selling for a lump sum of value. The amount of the monthly payment received is usually directly in line with the present interest rates driving the market.

The only drawback to Mortgage Backed Securities is simple: mortgages are expensive. That means that these securities are usually traded in large denominations, sometimes only going as low as 25,000 dollars a share. However, much like money market funds, there are some collaborative efforts available to allow amateur investors to get into mortgage backed securities. If you’re interested, it’s best to start out with these.

See you next week for part 10 of Investments.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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