The Bull Hunters Guide

Welcome back. Today marks the end of our blog series on Asset Allocation. Hopefully, you’ve learned a number of vital skills that will help you in establishing a functional and profitable investment portfolio.

If nothing else, you should have realised the profundity of the principle that no investment exists solely in a vacuum. Rather, each one has to be considered in conjunction with the investments that support it or hinder it.

When a portfolio is assembled such that all of the investments support and advance one another, you have a strong portfolio that will see you into the future with great success.

If, however, your investments are not properly allocated, they will work against each other and bring one another down, resulting in a legacy of long term losses for your investment portfolio.

Asset Allocation Overview

Let’s briefly review on what we’ve covered so far during this Asset Allocation series. First of all we established the importance of analysing the risks versus the return for any type of investment that you intend to make. A proper assortment of high risk ventures next to stable investments will ensure that you always have a buffer of income protecting you.

Further, it pays to question the validity of the analysts at times. Never rely one a single method of analysis; they should be just as diverse as your investments.

Next up, you should invest with both your long term and your short term goals in mind. These goals should match up with your investment decisions accordingly.

Starting early is one of the best things you can do. The earlier in life you start assembling a portfolio, the more time you’ll have to develop a truly diverse assortment of investments that will serve you well in any situation.

Lastly, don’t just speculate. If you have a new idea for how to arrange your portfolio so that it will be better allocated, act upon it! You’ll never know how well something will work unless you experiment now and then.

That about covers it, I hope you have enjoyed the Asset Allocation series. Join us next week, when we start a new series on investing in gold.

Until then, happy trading!

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

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If you missed last weeks post, be sure to check out stock market investing mistakes part 6. This is our last entry in the series on the seven worst mistakes that people tend to commonly commit when investing in the stock market.

These are the kinds of mistakes that you should have seen coming, but most never do. You can avoid the embarrassment and regret that accompany these kinds of mistakes if you just take the time to learn about them and prepare yourself. That’s exactly what this series of entries was designed to do.

Don’t Forget Technical Analysis

The last mistake we’re going to talk about is the ignoring of technical analysis. When most amateurs “analyze” the stock market, they make use of qualitative or quantitative analysis.

They might be dimly aware of the school known as technical analysis, but usually they consider it far too… well, technical, to be of any use or interest to them. Chances are they just take a look at the charts and graphs that are normally associated with this method of prediction and their minds go blank.

In reality, as complex as technical analysis can be, there are some basic and fundamental techniques that are really quite simple to grasp and which can be quite helpful when the time comes to decide upon your next investment.

Technical Analysis Techniques

For example, buried amongst all those charts and graphs, you can find things like the “moving averages”, which show the overall performance and closing prices for stocks over a span of time, such as the last 100 days. With this information in hand, you can see at a glance whether the overall movement of a company has been up or down.

Furthermore, you can easily take in other important statistics like volume of purchase, which, when coupled with just a little common sense (and the type of knowledge you gain from this blog), are powerful tools for predicting the future movements of the market.

Well, that’s it for this series. Join us next time when we start looking at a new aspect of the market that’s sure to excite and educate. Until then, happy trading!

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

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Recently we’ve started a new series taking a look at some of the worst blunders you can commit when dealing with Stock Market Investing. Be sure to check out last weeks edition of stock market investing mistakes part 2.

These are issues that aren’t quite so obvious, and which a lot of otherwise intelligent investors seem to commit over and over again. Therefore, it pays to know about them so that you can be careful to avoid them in your own career.

The Importance Of Macroeconomics

This time around, we’re going to talk about the importance of macroeconomics. As most of you know by now, macroeconomics refers to the viewpoint which encompasses the entire scope of the country’s economy all at once, instead of focusing in on anything in great detail. In other words, it’s taking a very broad view of the market as a whole, with all of its many forces at play.

We mentioned earlier the importance of qualitative analysis of stocks that you planned on investing in, but that still isn’t quite enough. Indeed, a stock might look totally excellent from both a quantitative and a qualitative point of view.

Everything might be laid out and ready for you to come out making tons of profit on your investments. And still, you might lose money on what seemed like a sure thing.

What happened? You failed to take the macroeconomic viewpoint into perspective. If a company were about to release a ton of new products that seemed sure to be a hit, and if they had solid strategies to carry them into the next decade, normally you’d want to invest right away, right?

But what about if the market is such that there are about to be a lot of layoffs? Or trade issues that will begin to interfere with the manufacture of those products? In that case, the investment is as good as dead.

If you pay attention to the wide, macroeconomic view at all times, you’ll never be taken by surprise like this.

See you next week for part 4 of Stock Market Investing mistakes.

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

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Last time around, we talked about the usefulness of real estate as an alternative Investment opportunity. While the advantages of real estate are manifold, it’s certainly not for everybody. Why is that? Simply put, it’s expensive!

However, there is an option for those people who want to become involved in the real estate market but who don’t have the cash on hand or the credit needed to purchase a home or any other piece of property. The answer is Real Estate Investment Trusts, or REITs.

Types Of REIT To Consider

REITs are a commodity sold on the open market, much like stocks, except you’re Investment in real estate properties instead of in companies. The value of the REIT will usually vary and will depend upon the real market value of the property in question. There are three types of REITs to consider.

Equity REITS are associated directly with properties that are owned. There is, then, a responsibility for the upkeep and value of those properties. The revenue generated for the REIT in this case will come from the rents paid on the associated properties.

The second type of REIT is the mortgage REIT which should be thought of more as a loan instead of an outright purchase. In other words, this type of REIT loans out money to be used for mortgages for property owners. The revenue from them comes mostly from the interest that is owed on the payback of these loans.

Lastly, there’s the hybrid REIT, which as the name suggests, is a useful combination of the two. It invests in both properties and mortgages in an attempt to diversify where the revenue comes from.

REIT Investment Risks

The only real risk associated with a REIT lies with the state of the real estate market in general. If the market is performing well, a REIT will be a valuable Investment to hold. Otherwise, it will not experience much growth. In this sense, it operates very much like a trust fund, and is just as safe.

See you next week for part 16 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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