The Bull Hunters Guide

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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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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Recently in this blog, we’ve been discussing the importance of diversifying your knowledge of investment opportunities beyond just the stock market, such as last weeks article on Convertible Securities. In doing so, you should be able to make more intelligent decisions about where to put your money, no matter what kind of turn the market takes. In today’s times, this is obviously a very useful skill to have.

Discussing Corporate Bonds

Today we’re going to discuss corporate bonds. Odds are, like most people, you’ve dealt with a bank before in the past. Whether it was to get a mortgage to buy a house, or a loan to purchase a car, you borrowed money from them and then had to pay it back over the course of time by a predetermined date, along with a premium called interest. When you purchase a corporate bond, you’re doing the exact same thing with a corporation, only you’re acting as the lender.

Whatever cash value you purchase the bond for, this cash is then distributed to the corporation so that they can put it to use just as you would a loan. In return, they must repay you on a pre-determined date called the date of “maturity”. But of course, you would need a greater incentive than that to loan your money. Just like you pay interest, the corporate you buy a bond from will then pay you interest at periodic intervals until the bond is paid in full.

Good Continuous Income

Corporate bonds aren’t the greatest way to earn a lot of money in a flash, because even when they offer a decent yield, it tends to be spread out over time. However, this very feature does make them a really good source of continuous investment income. Retirees might take note of this and use corporate bonds to their unique advantage.

If you’re interested in buying corporate bonds, this can easily be done at just about any broker in the game, as well as at many banks. Unlike taking out a loan, you’ll want to buy when the interest rates are at their highest, though.

See you next week for part 6 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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Last week was the first week in my new Investment Series, and we kicked it off with a post on Closed End Funds.

We’ve spent a lot of time in the Bullhunter blog talking about all the different types of Investment Strategies that every investor should at least know about. The idea behind this is to expand your concept of investing beyond just the stock market, and at the same time, gain a greater understanding of that market by analyzing its competitors and alternatives.

Investing In Collectibles

In this particular entry, we’re going to talk about something of significant interest to many people, which is investing in collectibles. This is something that’s not only potentially profitable, but also a lot of fun for many people because it entails the acquisition of physical objects rather than electronic shares.

Simply put, investing in collectibles is the process of putting your money into the acquisition of some physical goods that are predicted to increase in value over time. Then, at a later date, you’ll be able to sell them for more than you paid for them.

Whether you’re investing in fine art, stamps, or antiques, there is one clear advantage here, which is that the value of these objects will always be tied to inflation. Therefore, unless an object actually depreciates in value, you’ll always be getting, at the very least, a fair price.

Disadvantages Of Collectible Investment

That said, there are a number of disadvantages as well. The most obvious is that you don’t “earn interest” on collectible investments, and you can’t collect dividends on them either. There’s also the matter that you’ll need somewhere to store these physical objects which can be a big expenditure in and of itself. Furthermore, there is always the potential that these items could be damaged by various circumstances, and if this happens, your investments could be totally destroyed.

If you’re going to make an Investment in collectibles, be sure that you know all the risks and benefits that are present. It can be a very rewarding experience, if you know what you’re getting into.

See you next week for part 3 of Investments.

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

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