Are Fixed Maturity Plans Finally a Sound Investment?

Lack of viable deposit insurance and the absence of any premature withdrawal options have rendered fixed maturity plans an unpopular investment option for quite a while now, but the recent turbulence in the equity and debt markets, has substantially increased the desirability of short-term, fixed maturity plans that invest in debt or money market instruments.

As a result, several large fund houses, including IDBI, Prudential and L&T have begun to file documents for a number of brand-new fixed maturity plans with a duration of one or two years each.

For the most part, this is because it’s now possible to at least estimate the return that such schemes will yield and the predicted yields often significantly outweigh the perceived risks of investing in close-ended debt schemes that actively prohibit premature withdrawal. In fact, according to the Financial Observer, some of the new fixed maturity plans are even expected to yield an annual return of up to 10.88%.

Are Fixed Maturity Plans Finally a Sound Investment?

The rising popularity of fixed maturity plans can also, in some respects, be attributed to rising awareness of their tax efficiency. Where more traditionally sound fixed rate investment options like FDs are taxed according to the standard rates of income tax, fixed maturity plans with a tenure of over one year are taxed at a fixed rate of 10% without indexation or 20% with indexation, and financial papers are beginning to pick up on all the benefits that such promising tax figures entail; leading to a sudden surge of interest in such potentially lucrative holdings.

Just because there’s a lot of hype surrounding fixed maturity plans doesn’t necessarily mean that they’re a particularly good investment though. While it’s true that their promising tax efficiency and their connection to a steadily inflating market could yield potentially lucrative returns, the fact remains that investing in them means locking your finances in an investment that you can’t withdraw from, blocking you from making other, potentially more lucrative investments for the promise of financial security that doesn’t quite match up to that offered by standard fixed deposits.

More to the point, there are plenty of other tax efficient investment options that don’t require such broad speculation on the continued rise of interest rates, or investment in debt or money market instruments, so before you bank on a fixed maturity plan, make sure you explore your options carefully – they’re sudden surge in popularity doesn’t necessarily make them a sound investment.

How to Clean Up Your Budget

As opposed to your finances, it is easy to see when you home or work area is messy. It quickly becomes obvious when you live among the muddle every day. Your money can become disorderly without you even realising it and unfortunately it can lead to much more serious problems than a messy room. However, with some tidying up you can make sure you are not wasting or losing money.

Trim

Take a good look at your financial situation. Look at your income and your expenses. Put everything together into a budget and balance it. Take all current credit card balances, bank statements, and investments into account. This should give you an accurate picture of the money that you have coming and going. As you clean, up look at any unnecessary expenses and eliminate what you don’t need.

Cut
How to Clean Up Your Budget

One cause for messiness or confusion in personal finances is having too many credit cards. An excess in the amount of cards you have can lead to some serious financial issues if you lose track of even just one of them. Credit card debt can be an incredibly dangerous thing to your money. If you miss payments and let balances roll over from month to month the interest alone can become overwhelming. If something like this has happened to you, you should work to remove the debt as quickly as possible. If you can’t see a way out or if multiple debts or cards are weighing you down there are organisations that offer free debt consolidation and advice that may be able to help. You really need only one card. So if you have more than that cut them up and pay them off.

Shred

Look around your home or office. Are there piles of sensitive paper work lying around? If so, this will be a case when your budget cleanup will also be a literal clean up. Make sure that none of your financial papers fall into unscrupulous hands. Shred any bank statements, or documents that you don’t need anymore.

Organise

Like credit cards, bank accounts are something that you shouldn’t have in excess. Having too many bank accounts leads to similar problems that having too many credit cards would; it is hard to keep track of them. Plus more bank accounts mean more bank account fees. It’s probably a good idea to have no more than two, especially if you are using several for the same purpose. Closing any accounts that are unnecessary will really streamline your personal finances.

Inventory

When people look at their financial situation they often overlook their physical assets. That is, furniture, coin collections, jewelry or anything that could have value. It is good to take these things into account because they can play an essential role in bailing you out of tough financial times if it were to become necessary. Also, you should take stock of your stocks. What investments have you made? Make sure you know where you money is invested and whether or not it should be there. You may as well liquidate anything you don’t need.

So before you begin your budget cleanup take some of these tips into consideration and see how much money some simple organisation can save you.

How to Choose the Right Investment Strategy for your Future

With the huge amount of different investment ideas it might be challenging to know which one will be the best one for you. Choosing the right one to suit your needs is important as you will want your precious nest egg to be as fruitful as it can be for your future. Looking at your investment from a whole perspective will assist you in making the right decisions about where you want your money to go and how it can work best for you and for your future. Here are 4 things to think about when planning your investment strategy.

What are your objectives

How to Choose the Right Investment Strategy for your Future
One important thing to do is look at your objectives and see how the future is looking for you. Ask yourself what are your short, medium and long term goals. If you feel like you will want access to some of your money in the short term then you will not want to put it into a long term investment. Use your common sense to ascertain how much money you will be needed over the course of the future.

Investment time frame

How do you want your money to grow and what is the time frame that you are working towards. Planning out how long you want to work, and what age you would like to retire will give you a good idea about the length of your investment time frame. It is very important to research into your plans and work out exactly how your money can best work for you.

Attitude to risk and return

Sometimes when investing your money you will need to be open to putting it at risk. Working out what will work best for you in terms of your attitude to risk and return will ensure that you can still sleep at night and aren’t worrying about your investments. Diversification of your portfolio involves spreading your money around in different investments so there is often less risk involved because you are not banking on one investment to do all the work. If you make an investment into one place and that place collapses then you will have lost all of your money but diversifying your portfolio means that your money has more chance of growing in lots of different ways.

Current circumstances

When deciding how to invest your money for the future you will need to look at your current circumstances so you can make the best decisions about how to make it work for you. Are there any limitations in the investment that you are thinking about moving with, and what are the future prospects for growth within that investment? There are lots of different questions to ask yourself when looking at the bigger picture, but you don’t need to do it alone. 

Binary Options Trading

Binary options have changed the face of the trading world. In the not so distant past investing and profiting from the stock markets was reserved for professional traders and the very rich. However, this is not so anymore! Nowadays, thanks to binary options anyone can invest and profit from stock market trading.

Binary Options Explained:

Binary options’ trading is a fast paced, high return form of investing, where you predict the future prices of assets – indices, commodities, currency and stocks. Trades usually last about ten minutes but they can be longer (if you choose so).

The basic concept is easy – You choose an asset, let us say a commodity such as Oil, you then make a prediction as to whether the price will rise or fall over a certain amount of time. If your prediction is correct you make considerable profits, however, if incorrect you stand to lose most, if not all of your initial investment. 

How it works:

Every trading platform is different in regards to what you can trade, and the tools and resources that you are provided. However, the trading process itself will be roughly the same across all platforms – you select the asset(s) that you want to trade, once selected you will see a real time trading graph that will depict the movement of that asset in the market. From this movement you predict the future price of the asset – be it up or down from the price at which you commence trading to the time when the trade ends.

Binary Options Trading

The beauty of binary options trading is that profits are predetermined before trading starts, so that you know exactly what you stand to make before you invest, the same is true on the flip side, and you can only lose what you invest – no more! E.G – If you invest, $25 on a “Call” option the most can lose is $25; however, if you are correct you stand to make a profit of 71% or more.

Some basic jargon:

“Call” option – When you think an asset will finish above a certain price you select a “Call” option.

“Put” option – When you think an asset will finish below a certain price you select a “Put” option

“Strike Price” – This is the price / position of the asset at the time that you commence trading. It is this entry point that determines the outcome of your Call and Put options. E.G – If my “Strike Price” is, 4.47 and I take a “Call” option - if the trade ends above this price, I make a profit, but if the trade finishes below this price, I make a loss.

“In the money” – Over the course of a trade if your prediction is correct the trade is referred to as been “in the money”, this is also the same if the trade finished in profit. 

Who can trade binary options?

In theory anyone can trade binary options, however, it is not advisable that you start trading off the cuff without educating yourself a little. Many of the binary options platforms will sell the idea that no prior knowledge or expertise is needed to trade, and to a certain extent, this is true but it can also be a recipe for disaster, the real key to successful binary options trading is knowledge, and you can never have enough.

If you are interested in trading and investing in binary options there are some basic steps that you can take that will help you achieve success.
  • Pick an underlying asset that interests you be it a stock, a commodity, Index or currency pair and find out as much about it as possible – you are looking to learn the factors that affect and have an influence on its price.  These can be many and vary depending on the underlying asset you are trading.
  • Stay updated - Once you know what affects the price of your underlying asset, ensure that you stay updated on the news that relates to it.
  • Learn some simple strategies – there are many but for beginners the “Trend Following Strategy” is probably the easiest to master.
Where can you trade binary options?

Binary options’ trading is conducted through brokers / trading platforms, of which there are many, but be aware not all of them are reputable, so caution must be exercised when choosing a trading partner. 

I would always recommend going with a major broker such as anyoption.com, the deposits can be a little more expensive to begin trading but the peace of mind and security you have is priceless.

Regulation should also be key to your decision making process. Major brokers will be (or should be) regulated by a financial regulator - regulation details will be clearly stated on their websites, if you cannot find it then move on. Never, trade with an unlicensed broker!

Finally yet importantly, before you decide to trade with a broker you should ensure that they offer the types of underlying assets that you want to trade, not all brokers offer the same selection of assets, and again the major brokers will offer you an extensive range of options.

That’s it! I hope you enjoyed the article – binary options trading can be fun and very profitable just ensure that you do your homework first before you start trading.

How to Manage Your Financial Portfolio

If your portfolio isn't doing as well as you hoped, it's time to improve it. Add profitable stocks, build safe-guards, and diversify. Here are five ways to wisely manage your portfolio.

1. Decide to Invest: Large vs. Small U.S. Companies

Large companies attract most investor's attention, but it isn't necessarily the most profitable type of company. Smaller companies have earned a higher rate of return than larger companies over a 35 year period. In the short-term, however, smaller companies do have more risk. Large companies' stability is an important asset to have in any portfolio. Just add a few small companies that have a lot of potential. Consider adding a few start-ups as well. It's worth the gamble.

2. Add One or Two International Stocks

International small-cap stocks show even more promise. Between 1970 and 2004 small international companies out-performed large international companies by 6.1% in terms of compound annual return. International companies in general out-performed U.S. companies over a 35 year period. Although the margin is small (international companies - 13.5% vs U.S companies - 12.1%), it's an area of investing that isn't taken advantage of. Adding one or two international companies to your portfolio will give you more opportunity to increase your profit.

3. Decide Value vs. Growth Companies

Most investors select growth companies over value companies. Growth companies grow at a much faster rate than the rest of the economy, and they generally avoid paying dividends to stockholders. Instead, the company typically re-invests their earnings back into the company. Value companies trade at a lower price than expected and are undervalued.

How to Manage Your Financial Portfolio

Typically, a value company has a higher book-to-market price ratio than growth companies. This characteristic provides some insight into which type of stock has been more profitable over the years. Stocks from large value U.S. companies out-performed stocks from large growth companies since 1964.

These value companies had a compound rate of return of 13.7%, while these growth companies only had a compound rate of return of 9.6%.  For small US companies, the profit difference is even greater, with small value companies having a compound rate of return of 17.1%. Add more value companies to your portfolio.

For more information about value and growth stocks, turn to professionals like financial professional Peter Briger.

4. Know the Best No-Load Funds to Own

Index funds and asset class funds are the best no-load funds to own. These mutual funds don't charge you anything to put money in or take money out. They also don't have the restrictions of managed funds.

5. Protect Your Portfolio from Volatility with Short Term Bonds

To make up for potential losses from stocks, invest in short-term bonds. Over one to five years, these bonds will have a positive rate of return.  

By following this advice, you can turn around your poorly performing portfolio and start earning a profit again. It may take some time, but investing in the stock market is worth it.

How can ANZ help you with your investment and trading?

When we speak of e-trade broking, investment and trading, we will have to think of ANZ – The Australia and New Zealand Banking Group Limited. It is considered to be the third largest bank in terms of market capitalization in Australia. You can contact ANZ for commercial and retail banking as ANZ dominates the market in these two sectors. In New Zealand, ANZ is the largest bank. It should also be noted that ANZ is not confined to Australia and New Zealand. Rather it has its branches in 30 other nations.

ANZ offers e-trading facilities to its clients. If you take help of their e-trading services, then you will be able to reduce the expenses of your business. This is mainly because of the fact that it will help you in removing the fixed overhead costs. This will help you in concentrating more on the simple variable cost. Thus, you will only be liable for paying for the actual usage.

Things on offer by ANZ

If you are interested in investment and trading, then you can contact ANZ as they have various things on offer for such clients. They will help you with latest technology that will help you in managing your investment and trading better. With the help of the latest technology, you will be able to lower the cost of support, maintenance and upgrades. Thus, you will be able to save money and use it for further investment.

How can ANZ help you with your investment and trading?

ANZ also offers its clients with superior trading tools which are helpful for individuals as well as group of clients. With these tools, you will be able to place single as well as multiple orders for yourself or your clients. Also, there are different levels of brokerage rates charged to the clients.

Apart from that, ANZ also offers the clients with a dynamic trading platform. This will help you in managing your own trading desktop. Apart from this, you will get constant updates regarding the share market from them. They will also provide you with all other required information from a time to time basis helping you in gaining profit in your business. It will also help you in getting advantage by helping you place orders quickly.

You can even contact ANZ if you wish to know what kinds of products are on offer for you. Some of them include cash and margin lending products which will offer pay trails. Moreover, they will help you in getting the best price on exchange that they are dealing with at the time of trade. Thus, they have one of the best execution policies on offer for their clients.

In order to serve clients worldwide, they have opened their offices offshore. This has helped the bank as well as the clients. The level of dedicated service that they offer helps their clients in a great way. The Account Service Managers are just a phone call or e-mail away.  Thus, a large number of people contact ANZ for their excellent services.