Types of Investing Risks

Investing in stocks is a risky business. There are some risks you have some control over and others that you can only guard against. Thoughtful investment selections that meet your goals and risk profile keep individual stock and bond risks at an acceptable level.

However, other risks are inherent to investing you have no control over. Most of these risks affect the market or the economy and require investors to adjust portfolios or ride out the storm.

Here are four major types of risks that investors face and some strategies, where appropriate for dealing with the problems caused by these market and economic shifts.

Economic Risks One of the most obvious risks of investing is that the economy can go bad. Following the market bust in 2000 and the terrorists' attacks in 2001, the economy settled into a sour spell. A combination of factors saw the market indexes lose significant percentages.

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Winning Stock Pick Remember CKXE .10 to $30.00 30,000% Gain RRGI next ? futuresuperstock.net It has taken years to return to levels close to pre-9/11 marks. For young investors, the best strategy is often to just hunker down and ride out these downturns. If you can increase your position in good solid companies, these troughs are often good times to do so.

Foreign stocks can be a bright spot when the domestic market is in the dumps if you do your homework. Thanks to globalization, some U.S. companies earn a majority of their profits overseas.

Older investors are in a tighter bind. If you are in or near retirement, a major downturn in stocks can be devastating if you haven't shifted significant assets to bonds or fixed income securities.

Inflation Inflation is the tax on everyone. It destroys value and creates recessions. Although we believe inflation is under our control, the cure of higher interest rates may at some point be as bad as the problem.

Investors historically have retreated to "hard assets" such as real estate and precious metals, especially gold, in times of inflation.

Inflation hurts investors on fixed incomes the most, since it erodes the value of their income stream. Stocks are the best protection against inflation since companies have the ability to adjust prices to the rate of inflation.

It is not a perfect solution, but that is why even retired investors should maintain some of their assets in stocks.

Market Value Risk Market value risk refers to what happens when the market turns against or ignores your investment. This happens when the market goes off chasing the "next hot thing" and leaves many good, but unexciting companies behind.

You may have to finance 15 to 20 years of retirement with your nest egg. Keeping it all in savings instruments may not get the job done.

Some investors find this a good thing and view it as an opportunity to load up on great stocks at a time when the market isn't bidding up the price.

On the other hand, it doesn't advance your cause to watch your investment flat-line month after month while other parts of the market are going up.

The lesson is don't get caught with all you investments in one sector of the economy. By spreading your investments across several sectors, you have a better chance of participating in growth of some of your stocks at any one time.

Too Conservative There is nothing wrong with being a conservative or careful investor. However, if you never take any risk it may be difficult to reach your financial goals.

Conclusion I believe if you learn about the risks of investing and do your homework on individual investments, you can make decisions that will help you meet your financial goals and still let you sleep at night.

From Ken Little,

How Does Investing Differ from Saving?

How Does Investing Differ from Saving? Investing is the proactive use of your money to make more money or, to say it another way, it is your money working for you. Investing is different from saving. Saving is a passive activity, even though it uses the same principle of compounding. Saving is more focused on safety of principal (the amount you start out with) and less concerned with return .

Your focus in investing is on return and can run the spectrum from conservative to very aggressive in terms of risk. One way you measure results is by the expected return weighed against the anticipated risks.

It is easy to slip into an unnecessarily complex discussion about whether a particular financial transaction was an investment or a savings deposit. However, it is important to understand that investing has some distinctive characteristics, which separate it from pure savings.

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Make the most of your limited funds! Turn a few $100 into something more. peterleeds.com Since we are discussing stocks, I'll limit the characteristics to that type of investment: Ownership Upside Potential Risk Each of these characteristics sets investing in stocks apart from savings in several different ways. Ownership When you buy stock, you are buying a piece of a company - you become a part owner. This ownership gives you certain rights, including voting on important matters before the company and participating in the profits if the company distributes dividends. Virtually no savings instruments give you ownership. You may own a bank CD, but you don't own part of the bank. You may own a U.S. Treasury bond, but you don't own the government.

Upside Potential When you own stock, you participate in the growth of the company. As the value of the company increases, so does you investment. If profits increase, you may receive bigger dividend checks. The stock price may continue to rise for a long period. Many of the early employees of Microsoft are millionaires because their stock has gone up dramatically. If you have a bank CD that pays 3%, it is unlikely the bank's president is going to call you one day and say, 'we've had a great year, so I'm raising your interest rate to 6%.'

Risk Along with the potential for extraordinary gain is the potential for loss. These two go hand in hand. You can lose money investing in stocks. If the thought of losing money makes your stomach knot up, stick to savings instruments. However, you should know that even the safest savings instrument carries unseen risks. Most savings instruments trade security for return, meaning they pay very little. When you factor in inflation and taxes, many so-called safe savings instruments return almost nothing and some can actually lose ground.

Ken Little,

SEO ELITE - Before you buy it KNOW WHAT YOUR ARE INVESTING FOR!

SEO Elite can be quite an interesting tool for anyone who wishes to optimise their website as high as possible on the search engines.

Users will apparently realise that the best of this software is not its claims of being listed in google in a day, but is actually more of its automated analyser that gain much links as possible.

Quickly find, email, and get 1000's of hidden, high page rank websites with jus a few clicks of the button, that's what this program is waving about.

The program is great at analysing competitors ranking tricks. I personally use this feature a couple times to really outrank websites.

Getting backlinks fast is the second feature that is in command for this program. With an automated e-mail to all the high ranking sites, It gives you at least 5 dozen or so return mails with backlinks.

However, back to getting listed in google in 24 hours, If you actually manage to do that, you sure have luck by your site because the program gives you 2 options, get a PR7 link to link back to your site (and that's almost impossible) or BUY LINKS!

Overall, the best SEO optimising software. Optilink and many per-feature programs like backlink analyser and tattler do not come clase to its all-in-one program.

It does gives you plenty of ability to fully jump your page rankings. 8 out of 10 times my websites went to the top 10 at least of google's index.

Here are my ratings:

Newbie learning curve: 9/10 (The manual is a no-brainer)

Analysing feature: 9/10 (1 goes to co-citation data, they do not have it)

Backlinks Optimizer: 7/10 (3 goes to the time it takes to gain ranks)

Overall: 8/10 (worth the money spent on buying it)

Yours truly, Rahl

Editor of theHonestReviews and theRichDojo

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Editor of theHonestReviews and theRichDojo (both sites under re-construction. Coming Soon!)

3 Good Reasons Why You Should use an Attorney for Your Real Estate Investing

Skimping on attorney fees could cost you more than you bargained for when investing in real estate. New real estate investors often save money on their rehabs by cutting corners, doing work themselves and trying not to spend any money to make money. When it comes to having a good real estate attorney though be prepared to spend away.

You have to ask yourselves what you are willing to pay for a piece of mind especially if you deal with tenants. A few good contracts written up by your attorney will easily be worth it after your first eviction or foreclosure.

You can find hundreds of template contracts and real estate forms on the Internet, but just how legal are they? Ask yourselves why they almost always recommend you have your own attorney look them over anyway.

There are hundreds of reasons to use a real estate attorney in your wealth building, but here are my three favorites:

Title opinions. In some states you are required to buy title insurance to guarantee the marketability of your property. In others it is recommended to get a title opinion. A title opinion is the opinion of an Attorney regarding the merchantability of title based upon the title examination and commonly is written to a lending institution who will rely on this title opinion for the validity and ranking of its mortgage. This process could get pretty complex especially when dealing with vacant, bank owned and estate property.

Tenant Forms. If you have rental units it is imperative that you have a real estate attorney look over your documents to make sure that the language is specific to your situation and state. Tenant law in Iowa may not be the same as tenant law in Nevada. Trust me, if any wording is wrong in your 3-day notice or eviction paper work the magistrate or judge will spout out some state statute, your tenant will get to stay and you will have to start all over.

Leads. Attorneys can be a great source for leads. Motivated sellers often come from extenuating circumstances like divorces, bankruptcies and estates. If you have a good relationship with a real estate attorney perhaps you can help his clients out when they find themselves in situations like any of the above.

If you are new to real estate investing a real estate attorney should be on your team anyway, if you don't have one yet be sure to find one fast. Your realtor or banker should be able to recommend a good one for you.

Robb Beltran is an active real estate investor and publisher of the Real Estate Info Network. The Real Estate Info Network promotes real estate education through real estate seminars, e-books and real estate investing courses. www.realestateinfonetwork.com www.belstarproperties.com

Stock Investing - Are traditional media stocks a bargain compared to new era Google mania?

The heating battle between Google, Yahoo, and Microsoft, for search engine supremacy has created a lot of investor attention. While Internet advertising is the flavor of the day, the Contrarian Investing Association thinks that traditional media outlets - like TV, radio, and newspapers may be under appreciated.

Toronto, Ontario, September 22, 2006 - The heating battle between Google, Yahoo, and Microsoft, for search engine supremacy has created a lot of investor attention. While internet advertising is the flavor of the day, the Contrarian Investing Association (http://www.contrarian-investing.com) thinks that traditional media outlets - like TV, radio, and newspapers may be under appreciated. The fact is that Google gets the vast majority of its revenue from advertising - the same revenue engine of TV, radio, and newspaper media outlets.

Will all advertising dollars go to the internet? No - people still like to listen to the radio, watch television, and read the newspaper. While the internet is an important medium for advertising, traditional media outlets will not be replaced anytime soon. For example, the radio did not make the newspaper obsolete. The television did not make the radio obsolete. The Internet certainly will not make all three traditional media outlets obsolete.

Is the stock market over-valuing Google and ignoring traditional media? The current market capitalization of Google is over $110 billon. To put this number in perspective, the market values Google more than twice the combined value of the following media giants: Gannett, Tribune, Washington Post, EW Scripps, Knight Ridder, NY Times, Dow Jones, Belo Corp, and Lee Enterprises.

Is Google's brand dominance of Internet advertising sustainable? Currently, Google is the leading search engine. But for users, it is easy to switch to another search engine if better options are available. There are no shortages of search engine companies trying to get a piece of Google's market share.

Another competitive advantage that Google has is its Adsense service and their large network of content Publishers. Categorizing every content page for every website at the performance speed that Google delivers is not an easy thing to do. But there are holes in their Adsense content program like non-disclosure of key information like click payout ratios, which results in inconsistent revenue performance for Publishers.

Google code is also very easy to implement but even easier for webmasters to remove from their sites resulting in low switching costs. If a real alternative steps in and offers higher pay-per-click, webmasters will most likely follow the money.

Investors would be wise to take a look at the stocks of the forgotten media giants and avoid the maddening crowd who are buying Google at any price.

Disclosure: The Contrarian Investing Association currently advises its members to study Gannett and Tribune.

About Contrarian Investing Association:

The Contrarian Investing Association looks for companies that are undervalued by the market for the wrong reasons, believing that the market will come to appreciate their true value over time.

We are on the web at http://www.contrarian-investing.com

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