The Bull Hunters Guide

Hello, and welcome back to this next chapter on the subject of Investing In Gold. After having covered the basic nature of the substance and what it has meant in the history of economics, we’re going to address how and why it matters to your investments, and even explore some options regarding investment options and advantages.

The Consistent Value Of Gold

Since gold has a value that stays consistent, it’s a tremendous player in wealth creation and also for preserving that wealth. Even if it no longer determines the value of money, it still has a value all on its own that keeps money safe when money can no longer be counted on to stay the same.

If you take your money and personally choose to use it for Investing In Gold, you’re making the decision to preserve the value it represents when the money can’t represent it anymore.

Furthermore, gold is priced globally by U.S. dollars. If the dollar weakens, it only makes gold cheaper in terms of competing currencies. Also, when someone gets out of the American dollar and invests in gold, it makes the dollar weaker.

This only further strengths the first point, and creates stronger demand by investors who work with currencies that appreciate in value relative to the American dollar.

Gold Protects Wealth

In order to really get an idea of how gold protects wealth, you have to look at the world at large. There are numerous currencies and countries out there, all of which contribute to a situation of political and economic uncertainty.

Warring factions in the Middle East and Africa, competing European countries, the industrialization of third world countries - all of these things and more make the global economy a volatile landscape fraught with danger and risk. But if there is one thing that remains the same, then it is the value of gold.

Well, that’s all for now. We’ll come back shortly to discuss how you should approach Investing In Gold and how it can protect wealth through diversification. Stick around and tune in for the next chapter of gold as an investment.

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

Social Bookmarks:

Welcome back to our series on Asset Allocation. In the next few entries, we’re going to discuss the major techniques that you should keep in mind to ensure that you have a properly diverse set of investments to see you into the future.

Remember, if you put all of your investments in the same category, you are prone to sudden losses if that category should face some setbacks. Diversification is key!

Risk And Return

Our first tip concerns the constant parity between risk and return. Each investment you make carries with it a certain attribute that we call the “risk / return tradeoff”. This concept is the very essence of Asset Allocation because it represents the fine balance of diversity that you wish to strike in your portfolio.

For example, most people would say that their goal with investing is to make a lot of money. However, if we only considered those investments that had the highest potential for making money, we might put everything we had into high end stocks. If we did so, we might very well get rich overnight. On the other hand, as history has shown us, we might end up totally penniless.

Balance Your Portfolio

Therefore, it pays to balance out your portfolio with a nice mixture of low risk / low potential and high risk / high potential investments. For example, having a good assortment of bonds, mutual funds and the like would provide a continual, safe stream of income that would act as the core of your investment portfolio and prepare you for the future.

With that in place, you would be much better suited to invest some extra income into the high risk stocks, because in the event that they failed, you would still be left with the safety net of your low risk investments.

By spreading out your assets in this way across the spectrum of risk and potential return, you are getting the most out of your investments.

See you next week for part 3 of Asset Allocation.

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

Social Bookmarks:

This week, we’re going to cover another one of those “common sense” strategies that nevertheless always seem to be so helpful. The real problem with common sense is simply that: it’s common. It’s always right there, out in the open, so as time passes, people tend to overlook it. A pretty ironic situation, really. In light of that, let’s take a look at one of the bits of conventional stock market wisdom that really needs to be driven home, especially for young investors.

Compounding growth

Like with any other type of savings, compounding growth is more or less the end all and be all of investment. What starts as a 1000 dollar investment that gains 10 percent becomes a 1100 dollar investment. If it hits that same growth again, it becomes a 1210 dollar investment, and then a 1331 dollar one. Simply put, the longer you have your money working for you in some type of investment, the more growth it can achieve.

As such, it is critically important to start investing in the market as early as you can. Young investors need to take a look at the idea of diversification and find some way to balance that virtue with the virtue of having a few core stocks that you tend to keep with you over the life of your portfolio (always keeping an eye on them, of course).

Early means more time to profit

Investing early has another meaning as well: if you invest your funds early in the life of company, they will have more time to spend with that company as it matures and develops. If it goes on to be a successful company, you will have maximized your earnings by investing in them as early as you possibly could.

Remember, the real name of the game here is compounding. Receiving a gain on money that you invest is exactly equivalent to investing that new larger amount. As your initial investment grows, so to does the potential for future growth on that investment. Developing a long term strategy can help you go a long way.

See you next week for part 8 of Basic Investment Strategies.

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

Social Bookmarks:

I have been promising a part 2 to The Bullhunters Guide eBook. My ideas haven’t come to fruition so far. Instead, I have put together a 12 Part Basic Investment Strategies blog series. It will be posted weekly here in The Bullhunters Guide.

This blog entry is the first in the series. The series has been designed from the ground up to help you get more actively involved in the world of investing, so that you can get the most out of your investments. Our approach is to take the amateur investor and slowly introduce him or her to the more sophisticated and advanced concepts that are practiced to great profit by the professional traders in the industry. In other words, this is a tutorial in how to become wealthy! The series will be rather long, and each blog entry will concern itself with one particular technique that you can add to your repertoire of investment knowledge and strategies in order to become a stronger player in the stock market. So, just sit back and relax, and try to take this all in. Ready to start maximizing your earning potential? Then, let’s go!

This time, we’re going to get off to a really basic start and discuss the virtues of diversification. Chances are good that you’ve heard the jargon thrown around on a few television dramas from time to time about how so and so was in dire need of “diversifying his portfolio“. Well, that trope had to come from somewhere.

Diversify Or All Your Eggs In One Basket

Diversification is a rather simple concept that simply refers to the idea of “not putting all your eggs in one basket“. Many beginning investors are often tempted to buy a huge number of shares in a single stock, because the initial cost of sales commissions will usually be quite a bit lower than if they had taken that same amount of money and bought just a few shares in a wide number of stocks. Furthermore, they tend to think that without a substantial number of shares in a stock, their payout will never “amount to anything”.

Try and overcome this way of thinking. The upfront costs might be higher, but what will you do if that one stock you put everything in collapses? It’s happened to many people and it can easily happen to you. Avoid this potential by spreading your funds around in a variety of interests, preferably across a number of different industries. This should help to protect you somewhat against market forces that can sometimes capsize a whole industry worth of stocks and leave you with losses in every single stock in your portfolio.

See you next week for part 2 of Basic Investment Strategies.

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

Social Bookmarks: