The Bull Hunters Guide

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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In last weeks edition, we were on the topic of Futures Contracts and recently, this blog has centered around the idea of introducing the reader to many different types of investing. The central idea here was that by doing so, we could begin to dispel the notions of investing being a “professional’s game” that all too often prevent people like you and I from doing wise things with our money. By looking at these topics, we can hopefully get a better idea of how to invest wisely, in any given scenario.

What Is Life Insurance Exactly?

Life insurance is a type of investment that differs wildly from every other type of investment we’ve covered so far. Namely, it’s the one type of investment where you’re guaranteed to never personally see the payoff. However, as every good investor knows, making money is only part of the point of investing. It’s also about preparing for the future and making a better life for our families. It’s in this area that life insurance is seen as a popular investment.

Life insurance is basically a type of income protection for your family that kicks in in the event of your untimely death. After you die, you’re obviously no longer drawing an income. However, the bills in your name, including mortgages aren’t just written off; you’re still accountable for them. If you’re not around, your family will shoulder the blame. Therefore, people buy life insurance policies so that their families will receive an amount of money upon their passing that will help them deal with these financial adversities.

Payout Decreases Over Time

The only real risk to purchasing life insurance is that if you’re fortunate enough to live a long life, the reward payout will decrease over time. Financially speaking, it’s a better investment if you die early, as morbid as that sounds.

Life insurance can be purchased from a variety of dedicated companies, all of which are carefully regulated and supported by the government, making for a very safe and secure investment.

See you next week for part 8 of Investments.

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

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For the past few weeks, this blog has been focusing on different methods of investment that you can engage in besides just the usual stocks and bonds, for instance our last post covered investing in Common Stock. The idea is that by doing so, we’ll be expanding your concept of investing and making you a better, more well rounded investor in the process.

What Is Convertible Security?

This time, we’re going to talk about something known as the convertible security. Simply put, this is a bond that can be converted into a stock. When you purchase a bond in a company, you’re buying the right to later on, at your discretion, concert the value of that bond into a number of shares of stock. Clearly, there are times when doing this would be advantageous and times when it would be better to simply keep the bond itself. This is the purpose of the convertible security: it allows you to make that decision for yourself.

Of course, this option doesn’t come without a cost. Typically speaking, convertible securities offer a lower initial yield than other types of investments, because of their modular nature. At the same time, however, if you’re holding a bond and a company goes bankrupt, you’re among the first in line to be repaid, ahead of those who simply are holding stock.

Buying And Selling Is Easy

One other major risk of convertible securities is that most companies withhold the right to “call” these bonds, which means that they can theoretically at any time convert them all into stock at their discretion. While this is rare, it’s something that everyone investing in convertible securities very much needs to be aware of.

Buying and selling convertible securities is fortunately a very easy matter. Most all brokers deal with them just as they would stocks and bonds, so you should be able to dabble in this type of investment fairly easily. Once you get a taste for it, you can decide whether or not it’s really for you.

See you next week for part 5 of Investments.

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

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Last week in the investment series, we covered investing in Collectibles. We’ve been talking quite a lot about types of investments other than the stock market in an attempt to expand your horizons about just what it is that investment means. In doing so, it is our hope that you’ll come away with an increased awareness of how to successfully invest to your full potential.

Common Stock

However, in this entry, it’s worthwhile to take a look at the topic that brought us here in the first place: common stock. As most of us already know, common stock is a great way to invest money, and is far and away one of the most popular choices for both amateur and professional investors alike.

When you buy common stock, you’re essentially buying a small piece of a publicly traded company. As such, you’re entitled to a portion of the profits that are generated by that company, which is where the real value of the stock lies.

Why Is Common Stock Popular

The reason why common stock is so popular to so many probably lies in its careful balance between risk and return. For example, investing in common stock typically yields very high returns in the area of 11 to 12% a year. There is always the possibility that a company could go bankrupt and you would lose most all of the money that you had invested, but this is rare. Furthermore, while the most common return is the very good 12%, there is always the possibility of a company skyrocketing and providing returns well above that. In a sense, this is what most investors hope for: to make that one good investment in a company that takes off and makes them rich.

Another reason for the popularity of common stock is that it is very easy to buy and sell. There are hundreds of brokers out there, and while their areas of specialty do differ, common stock is something that is handled by nearly all of them.

I hope you have enjoyed this weeks post on Common Stock, it’s now time for me to head back to the bar for a cool drink, as I am on holiday in Port Vila, Vanuatu with my family and some good friends…Life is tough!!

See you next week for part 4 of Investments.

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

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Investment scams aren’t limited to the fast paced interaction of bulletin boards, of course. Newsletters are another popular way to scam unsuspecting investors who are looking for a valuable tip on where to put their money next.

Newsletters Can Be A Scam

There are a lot of stock pick sites out there. Not surprisingly, each one claims to have the best strategy or formula when it comes to picking stocks. One of the most popular features of these sites is that they offer periodic newsletters, sometimes as often as one a day.

Some of these newsletters are legitimate, and actually offer the unbiased market advice that they claim to offer. However, just as many or even more of them are written by companies under the guise of a third party pseudonym to boost and promote their own stock!

Obviously, this can lead to all sorts of trouble. A legitimate company that was doing well in the marketplace through honest means would have very little reason to artificially inflate the value of their stock through disseminating disinformation in a newsletter. Any company with a future would also be wise enough to realize that this tactic is only setting themselves up for failure in the future.

In addition to the artificial inflation by paid companies, newsletters are also a popular place to run the pump and dump scam, offering what looks like a valuable tip, but is actually intended to ruin the investors who are duped into acting on it.

Newsletter Advice Things To Check

When you get an online newsletter that offers what looks like good advice, make sure of a few things. First, ensure that you actually subscribed to this newsletter. If it comes from an unknown source, you should delete it immediately, because it’s certain to be spam, and therefore certain to be a scam or at least a terrible waste of time.

Secondly, make sure that the newsletter you subscribed to accurately discloses who paid them to write it, how much they were paid, etc. Federal law requires this, so those newsletters who skirt around it are probably looking to hide something.

Lastly, proper grammar is critical. A professional newsletter might have a single typo, but it definitely won’t be full of misspelled words, use all capital letters, or endless streams of exclamation points.

See you next time when we talk about actual investment fraud.

See you next week for part 5 of Investment Scams.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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