The World Money Show - 3rd to 5th October, Sheraton Chicago

Three Days in Chicago Makes You a Better Investor and Trader

This October 3-5, 2012, at the Sheraton Chicago Hotel, you'll have the chance to join over two thousand of your fellow investors and traders in Chicago for a three-day event that will have a substantial impact on your success in today's volatile markets. We're bringing together investors and traders, like you, from around the world with one goal in mind—to help you make better investing and trading decisions to help you profit in the coming months.

Summary of Events
A plethora of quality investing education to choose from with over 100 workshops, panel presentations, and special events available all under one roof! A variety of topics offer something for all investors and traders. Hotel Experience deluxe accommodations and amenities at the Sheraton Chicago, as well as award-winning restaurants, all within easy walking distance to the best shopping and entertainment that the Windy City has to offer. Who Should Attend The MoneyShow provides a unique opportunity for attendees to become informed about trading and investment choices, to hear respected market specialists, to question speakers and exhibitors, and to observe, evaluate, and compare. I would advice any (prospecting) investor to register here for free and sweeten your journey to success.

Investment Tips: How to Gauge Your Risk and Rewards

Many people dream of making it big in the investment world today. What you must always do before you make any decision regarding an investment is to weigh the risks and the rewards expected. Understanding the relationship between risk and reward is your first step, with that knowledge you can now start your investment.

People are always concerned about the amount of money they stand to gain, forgetting that investment is a risk taking endeavor. You should, at all times, gauge whether your investment is going to lose your hard earned money or grow it substantially. Therefore, before making any investment decision, understand your risk tolerance. What is more important to you? It is the safety of your investment or the growth of your money.

Determining the risks and rewards of a particular investment opportunity is mandatory and in order to do that, you will need to ask yourself the following two questions questions.

*What are your investment goals?

Consider if your investment project will meet your target. A good example is you don't want to have less retirement funds just to reach your investment ambitions.
The elements that determine whether you will achieve your investment goals are:

1. The amount you have invested. In most cases the bigger the amount you invest the greater the reward expected.
2. The duration invested. You need to know how long the investment will take to give its rewards.
3. Rate of growth or return.
4. Taxes, inflation, deduction fees etc

Some investment take years to yield profits while others are short term. If you want to increase your reward, you must increase the money you have invested and the length of time invested.
Most investors find a good amount of risk in their portfolio is a good way of increasing their potential of achieving their financial goals. They diversify their portfolios with their investments in various degrees of risk, With the hope of taking advantage of the rising market and protect themselves from great losses in a down market.

* How much risk are you willing to accept for your investment?

The thought of losing money can be the biggest nightmare to anyone. So before you start investing your money think of how much trouble you will go through if the worst happen. If you are going to spend sleepless nights worrying about your money, then that's not an advisable idea. But keep in mind the lesser the risk the lower the reward.

Conclusion

There is no laid down degree of risk an investor should take. This is a very personal decision that you have to make. However a young person can afford a higher risk compared to an older person, this is because a young investor has a lot of time to recover if a disaster strikes. For example if you have five years to retirement, you don't have much time left to recover if you suffer a loss.
But remember a very conservative approach to an investment may mean you will not meet your target.

Investors can have control over some risk in their portfolios by a proper mix of bonds and stocks. Experts think portfolio more heavily weighted towards stocks is much riskier than a portfolio that favors bonds
However risk is a part of investing - you cannot avoid it. As an investor you need to find your level of comfort and then build your portfolio and goals.

Understanding Investment and its Risk

Most of us can earn money, but saving and investments is what counts the most. In today's modern world investing has become an important thing. In this post, I will share some of the things to consider before you invest your hard earned  money.

You should always make investments in a sane and safe manner. Before you decide to invest your hard earned money, remember to set aside your daily and monthly expenditure. You should also set aside all the necessary amount of money to cater for your bills, at the end of every month. Only a certain percentage should go to investments. Your short term and long term investments should not negatively affect your daily lifestyle or even liquidity. But remember you will have to cut down your spending, if you really want to meet your investment goals every month.

Investments methods can be classified according to the time duration over which the yield may be expected and according to the degree of risk involved.
This means you have an option to either choose between high risk and low risk or between short term and long term investment risk.
The different types of investments and their risk
Generally, investment can be categorized under financial and non-financial instruments.
*Financial instruments:Equities. They are traded in the stock market. When you buy your stocks you become a partial owner of that business. This is a good long term investment option.Bonds. When you buy a bond, it's like you are lending money to government or a private company. You will receive your interest on money. Bonds are safe, with a stable income and a low risk.Deposits. A common way of getting surplus funds is by investing in government schemes, recurring deposits ,banks etc. however the return is low since the risk is low

*Non-financial instruments
Real Estate. It's a profitable investment option since markets have been predicted to go up in the near future.Gold. Despite the market's going down gold prices have risen making it a good investment option.

Note: All investments should always be done keeping in mind the age of the investor. A younger person can take a bigger risk compared to an older person. However, "never risk more than you can afford to loose."
You must always do a comprehensive research and study on the options available before you invest in them. As I always say, invest your time before you invest your money. Investment is a risky undertaking, but again, you can't get anything if you don't risk. This applies to money and life in general.

Why you Should Consider Buying Index Funds Instead of Stocks

Index funds investment is often referred to as a passive investment. Funds invested do not need an active management like other funds. There are many reasons as to why an investor may opt for one particular form of investment as opposed to another. However, if you are considering investing and is torn between investing in Stocks and buying Index funds, below are a few reasons why you should  consider buying index funds instead of stocks.
Lower costs of investment
Analysis of historical data is just enough to make you as an investor realize that to get the best out of an investment, you should minimize costs. Buying an Index fund is a convenient way to lower these costs. A good choice in this case is a passive index fund investment; the active stock investment is quite costly.
Buying stocks require a great deal of research, this results in a a higher turnover. Indexed funds have low turnover which means reduced brokerage and trading fees unlike in stocks. The limited research costs and lower trading fee associated with indexed funds is one good reason you should buy an index fund. In the long run, this lowers the cost of investment translating to a higher ROI.
Lower risks involved
Buying index funds sounds a safer investment, because your portfolio can be invested in different companies. This will translate into translation a well-diversified portfolio of your stocks. You can invest in ten companies or have your stock portfolio investment spread in several in thousands of other companies from the ten companies. This provides an investor a chance to diversify risks associated with single stocks by constructing your investment from index funds. In overall, buying index funds lower the overall risks of your investment portfolio.
Lower tax base
Index funds have lower turnover compared to stocks and other mutual funds. This passive investment buys and sells within the portfolio than actively managed stock funds. Because of the lower turnover, index funds attract lower tax rates. This is accrued to the long term distribution of capital gains and minimized distribution of capital.
Additional bonuses
With index funds, you will understand what you own; you will know exactly what your investing manager is investing in unlike an active stock. This will earn you a lot of bonuses

Are You Saving or Investing?

There are usually two kinds of people – those who have something extra after paying all their monthly expenses and those who don’t.

Let me assume that you belong to the former; otherwise the discussion which follows may be a bit advanced. Now, what do with the left over cash?

1. Do you stash it in your bank account and spend it whenever you need to buy something big like an iPod, a camera, an LCD TV?
2.  Do you make a fixed deposit once you get that lump sum payment?
3.  Do you buy houses, shares, mutual funds or other investments?

3.  is an Investment, 1. is a Saving 2. is, according to me, a Saving  but others will think that it is a form of investment. There are some differences.

The difference between saving and investment is quite clear to comprehend but with citation of relevant examples to support the aspect of each case. It could be simpler than ever imagined even though some people still equate savings to investments. However, given their intrinsic value makes them very distinct financial disciplines.

First, when you invest you create a greater chance of losing what you have invested in case of a calamity unlike when you save, your money remains in banks and federal securities. Money in an investment receives no compensation as a result of a calamity that may lead to loss of your principal. However, saved money must be fully compensated for inclusive of interests if a loss occurs.

In an investment, your money become unavailable to you for use in an emergency unlike in a saving plan where the cash saved is readily accessible. If you are not going to need money in the nearest future, invest in stock markets etc. But if you are going to need the money, don't invest. Instead save it.

Investments generally yield high rate of returns depending on the nature of the activity you have invested in. On the other hand, savings have low rate returns as it relies on bank interest rates or returns on deposit securities.

What you are doing with that extra cash will only be considered as an investment if, and only if, it can significantly grow your money above inflation, after taxation. Remember, when inflation is quoted at around 5%, it’s actually around 6.5% per annum. Therefore, to realize any real returns on your investment, your money will need to grow above that.

I know someone is ready to present evidence that some financial institutions pay around 8% interest on fixed deposit. Reduce that interest by 30% (tax) and you will notice you are only having 5.6%. This still falls below benchmark (6.5% inflation rates).

The focus of every investment is increasing your net worth and achieving financial goals in the long term basis. It offers an opportunity for a greater ROI. However, as the amount of ROI increases and so is the risk of potential loss of the principal invested. This is quite the opposite to your savings i.e. the risks involved with the amount saved are minimal. Majority of savings are insured with the federal deposit security insurance companies.

Value appreciation is quite evident with investments like purchase of market bonds and securities. These investments earn some intrinsic value with time depending on how much you invest. (Note iPods, cars, computers etc, are not investments, they depreciate rather than grow in value.)

Equity/balanced mutual fund units and shares are investments. Their risks are high, but have the potential to grow far beyond inflation. Gold and other commodities are investments too, and so is paintings (art), real estate etc.

Investment can also give returns in terms of cash flows, which are earned on a regular basis. Cash flows are often described as “passive investments” as you do not have to work for it. Dividends (from shares), royalties from books, rent (from real estate) etc are some sources of regular income.

Savings, however, depend on currency value which in reality depreciates with time.

In a nutshell, savings are all that money you have stashed in your bank account, under your pillow and in fixed deposit accounts. The money is often easy to access, are less risky, earn little or no interest and gradually eaten away by inflation.

Savings are your present. Investments are your future. Bestride the two – invest around 40 – 60% of your earning and save the rest. You will always need your savings for your heavy purchases and to help you pay those extraordinary bills (like hospitalization, wedding, pregnancy etc), but do not do without investment either.

For a stable future, invest more. So how do you know that what you are doing is investment no saving? Checks:

1. It should be able to grow above inflation
2. It should have some element of risk
3. It should appreciate in value – through value appreciation or cash flows
4. It should have limited access

More on investment and savings: Differences Between Saving and Investing:

'via Blog this'

How to go Through an Interview Process?

 Following our graduation and the immediate introduction into the "Job-search Market", many questions crossed our minds, which is the best way to apply for a job? How do you write that killer CV? Who is employing inexperienced graduates e.t.c And when all these are said and done, the one major challenge we faced was "how to go through an interview process?", in case you get called for one (which was very rare).

The interview process is a new one to many of us but we are at that stage that they shall start coming in fast and furious. So what should you expect in an interview? I have attended only one interview after sending out a blanket application. But before I went I spoke to some of the people I know who have attended interviews before (including my attachment boss who was seeking a promotion in the company) and this is what they told me to expect:

1. Aptitude tests:
These are general-knowledge questions that are used to ‘gauge your IQ.’ These may cover a broad range of areas such as numerical prowess, word tests, reasoning tests and current affairs. Aptitude tests are common with firms such as PwC, Unilever, EABL, Bamburi and Deloitte who have an elaborate recruitment program. There are some online resources which offer practice on common aptitude tests.

2. Technical questions.
If you are called for an interview to a road construction company, best go fishing for Dr. Ndegwa’s (or whoever your lecturer was) Road Notes and read them! In an interview several questions will be thrown at you in regards to engineering. You may be asked for example, to “describe the several layers in constructing a road.” You may also be asked more technical things like what is the difference between a laterite and murram, but often it is the basics.

3. Your academics:
Remember the Chief Justice interviews? During interviews you will be placed on the hot seat. They will ask you why you got a D in structural dynamics. They will ask you why you had a straight A in high school and downgraded to Ds in campus and you expect to land the job. Kaa radar! You may also be asked how your training suits the company and answering this relates to No. 5 below. You may also be asked if you have undergone other training (computers, CPA, EIA etc). Another common question is “what new ideas/thing will you bring to the company if given the position?”

4. Trick questions:
These are usually just intended to knock you off balance and to see how you respond under pressure. I spoke to someone who went to an interview and was asked; “You have a 3 litre water bottle and a 5 litre water bottle, you want to fetch only 4 litres. How do you measure exactly five litres without pouring any water?” There is a right answer, yet depending on how sharp you are, you really do not have to give them the right answer. But DO NOT give a wrong answer, go round the bush and explain that you are nervous but if they gave you five minutes with a pen and paper you will answer it. Other common trick questions are the famous Google Interview Questions (Google this up for more).

5. What you know about the company:
Before you go for an interview go to the About Us page of the company if they have a website. Look up all the activities they do and how they do them. If they do water sewers, Google the process of water sewer design and be ready to explain it. Find out the directors, organization structure, date of formation of the fir, client profile etc. These questions will show you have an interest in working at the firm and it was not just a blanket application.

6. Salary expectations:
I still do not know how to answer this one! I mean, how much money do I want? Like ten million a month dammit! But my attachment boss advised me that you should first state “within your salary scale for entry level engineers”. If they insist you give them a figure, you say that you need to be comfortable at night; to cover your lunch and to pay for fare to work every morning so based on the current economy, X amount would be fine.

Watch out, you may get a call or email inviting you for a “small discussion” as it happened to me, but do not forget your papers (originals). Good luck in your interviews (they always end by saying we will contact you!)

==Courtesy of Bjey