Having A Goal In Investing

Having a goal is critical to your investing career. Goal gives you directions. It will also set your mind to reach that goal. So, before putting any money into stocks, the first question you should ask is what do you want to achieve with stock investing?

For most investors, the goal is not to be charitable. Let's assume that we all want to retire by the time we are 65. How many more years before retirement age? Twenty? Twenty five? How much savings do you have right now? All these factors will change your investment strategy.

Let's consider several scenarios. The first scenario is a 40 year old investor. He has nothing in his portfolio and his goal is to have $ 1 Million by the time he retires. As of right now, he can invest about $ 300 per month. That is a good goal but is it achievable? Well, let's see. If he can match the stock index return of 10.5% annually, his nest egg would have grown to $ 381,787 by the time he is 65. Obviously, he fall short of his goal. If he can't save more than $ 300 a month, the only way he is going to get $ 1 Million is to have his investment grow by 17% year in and year out.

Charitable has its place and time. They want to earn return on their investment. So, how much money do you want to have at retirement age?

For this gentleman, his goal is to achieve 17% return on investment. Obviously, investing in index fund will not suffice because historically, index fund will only give you a return of 10.5%. Having this goal makes him more focused in his investing career. Instead of thinking that he can reach $ 1 Million by investing in index fund, he now has to find other ways to boost his investment return to 17% annually.

The second scenario is a 40 year old investor who had amassed $ 100,000 in savings that he had accumulated since his working days. His goal is to have a $ 1 Million by the time he retires too. He would have an easier time than a second gentleman. Our calculation shows that he can reach that goal without even having to add a penny more to his savings. Furthermore, his investment does not have to earn 17% annually. He can still reach his goal by investing in index fund which historically has returned 10.5%.

There is nothing wrong with having an investment goal. Goal helps you to focus. While having a goal will not automatically boost your investment return, investors with a goal will find a way to boost their investment return. Finally, investors should set a realistic goal too. Expecting a 50 % annual return on your investment might not be achievable if you just start investing or if your past return had been less than 10%

Investing Idea Is Free! You can get it now by visiting our commentary section at http://www.noviceinvesting.com

Investing in the Czech Republic - Outside of Prague - Part 2: Olomouc Property

Olomouc is an excellent choice for real estate investors and following is a profile of the city. Those of you who have read my newsletter before know my dispassionate style of presenting things so here are the facts on Olomouc as they may affect investors...

Area: 103.36 km2
Population (latest data December 31, 2003): 101,268

Distance from important European and Czech cities:

City / kms
Brno /   76
Ostrava /   100
Prague /   277
Vienna /   198
Bratislava /   197
Warsaw /   474
Budapest /   389
Berlin /   500
Paris /   1 302

Average monthly salary for Olomouc region (2003): 15 491 CZK
Average monthly salary for Czech Republic (2003): 17 445 CZK
Average monthly salary for Czech Republic (2005 2nd Q): 18 763 CZK

Education: 16% of residents in Olomouc have University level education

Average temperature in January: - 2°C to -4°C
Average temperature in July: 15°C to 19°C


Foreign Investors in Olomouc
(by no means comprehensive, only a sampling)

Investor (Country) / Business Activity / Year / Employees (2004)
Nestle Cesko, s.r.o. (Switzerland) /   Production of chocolate and chocolate candies /   1992 /   800
Foundeik, s.r.o. (Spain) /   Foundry /   2000 /   215
M.L.S. Holice, spol. s.r.o. Group Leroy (France) /   Production of alternators; sale, maintenance and repairs of rotating electric motors /   1922 /   770
Mora Aerospace, a.s. (USA) /   Development, designing, production, testing, maintenance, repairs, modifications and construction changes of the aviation technique /   1999 /   640
Mora Moravia a.s. (Slovakia, Hungary) /   Manufacture and sale of cooking technology appliances /   1996 /   640
Senior Automotive Czech, s.r.o. (UK) /   Production of shaped aluminum and steel pipes for the automotive industry /   2001 /   260
SIWE, a.s. (Austria) /   Production of forming, cutting and bending tools /   1992 /   143
TIMKEN Ceska Republika, s.r.o. (USA) /   Production of needle and roller bearings for automotive and engineering industry /   2001 /   523
Skanska DS, a.s. (Sweden) /   Construction of motorways, city roads, parking areas; construction and reconstruction of bridges, sewage systems /   1954 /   185
Exerion Precision Technology Olomouc, s.r.o. (Netherlands) /   Metalworking and assembly of metal-frame structures and functional modules /   1998 /   110

Other Investment News

Schneider Logistics, a leading global logistics company, opened new shared services centre in Olomouc. Thanks to this million euro investment more than 300 new highly qualified jobs will be created here.

"We chose Olomouc mainly for its sufficient supply of qualified people. The new centre will serve customers of Schneider Logistics from all over Europe, which is why our demands, for example on employees' language skills, are high," commented Willem Jan van Vorstenbos, Managing Director of Schneider Logistics in Europe, and added: "Of course we intend to offer employees the most varied training relating to languages, accounting and working with our special software applications developed for processing invoices."

Kappa Packaging opened a new plant for the production of packaging from backed corrugated board in the industrial zone Olomouc - Holice today. The new plant into which Kappa invested over 11 million euro will create more than 50 new jobs.

"The main factors behind the decision-making on the establishment of the new plant were the following: location in the heart of central Europe, know-how and skills of the original employees of the local plant Kappa Empack and - last but not lest - support of governmental organizations and representatives of local government," says Zden?k Suchitra, director of the Kappa Packaging plant in Olomouc.

The multinational company Head has decided to start the manufacture of skiing shoes in Litovel, Olomouc region. Head has acquired a factory in Litovel by reason of quick production start. Head plans to invest 2 million euros and create 120 jobs in the first phase.

Gerald Skrobanek, CEO Head Sport s.r.o. explained the reasons for this decision: "The advantage of the Czech Republic is mainly better logistics, but also higher labor productivity. Litovel offers an advantageous location and mainly experienced workers for our production technology. Mainly thanks to the very successful operations in the Czech Republic, the top management at Head decided not to move to the cheaper labor markets further to the East of Europe, but utilize the better infrastructure and eruditeness in the Czech Republic." Olomouc Property Figures

Apartment Rentals in CZK per month (2004 3rd Q):
(average range - exceptions can be found either way)

Size /   CZK/month
1 + 1 (studio or bachelor) /   4 000 - 5 500
2 + 1 (1 bedroom) /   5 000 - 7 000
3 + 1 (2 bedroom) /   6 000 - 9 000
4 + 1 (3 bedroom) /   6 000 - 10 000

House Sales in thousands of CZK per flat (2004 3rd Q):
(average range - exceptions can be found either way)

Size /   New Build /   Heritage Building
1 + 1 (studio or bachelor) /   650 - 950 /   500 - 700
2 + 1 (1 bedroom) /   800 - 1 200 /   700 - 900
3 + 1 (2 bedroom) /   1 300 - 2 500 /   900 - 1 700
4 + 1 (3 bedroom) /   1 800 - 3 000 /   1 200 - 2 100

Property Examples
(common closing prices are commonly 5 - 10% less than the asking price)

1 ½ bedroom (2.5 + 1) flat right in the middle of the old town section. Beautiful heritage building with view to the square. New kitchen and kitchen cupboards. Hardwood flooring and tall ceilings. Asking price: 2 050 000 CZK

1 bedroom (2 + 1) completely reconstructed close to the center section of town. Completely reconstructed. 52 m2. Balcony. Asking price: 1 350 000 CZK

2 bedroom (3 + 1) newly built flat on the top floor of a heritage building in the historic center of Olomouc. 88 m2. Balcony. Asking price: 2 266 000 CZK

As we've emphasized before, at Czech Point 101 we are not going to over-inflate figures or try to sell you on hyped up facts. Our goal is to inform you to make the best investment decisions possible.


Recommended Reference Websites


Olomouc tourism website
Olomouc city website

The sources for this newsletter include the Olomouc city and CzechInvest.

Nathan Brown is the owner of Czech Point 101, a business which helps buyers find their perfect home in the Czech Republic and complete the purchase. Current projects in which Mr. Brown is directly involved include commercial and residential property investments and a portfolio of individual and corporate business interests in Czech Republic and North America

The Latest Investment Stocks Online Articles

Mutual Funds

A mutual fund is perhaps one of the most popular means of long term investing and is the vehicle of choice in IRAs and 401k accounts. A mutual fund is basically a way of investing in a pool of different companies in order to minimize risk.

More articles coming soon!

Investing Stock Online Resources

Yahoo Finance

Google Investing News

Stocks Advice

Internet TV