Growth Investing Defined

When we talk about growth, we are not just talking about any positive % return.  The reason why 2-3% return doesn’t work, even though it is a positive number and technically your money is growing, is because of inflation.  If there is 2-3% inflation every year, than you aren’t making much money.  So even for nominal growth in your investment portfolio, you need more than a 4% growth to make it ‘grow’.

Growth is often paired agains value investing on the other side.  This investing style looks for fundamentally good companies with good business models and financials.  It looks for growth, but in solid companies that are undervalued by the market.

Small Cap Stocks

One of the best ways to get good growth is investing in small cap stocks.  Small caps have room to grow unlike large cap companies like GE or Wal-mart.  Think of small caps as getting in on the ground floor of an investment opportunity.

Small cap stocks are companies that have a market cap of between $300 million and $2 billion.  The market cap is calculated by taking the number of outstanding shares and the share price and multiplying them together.

Small Cap Funds

If you don’t want to go out and look for these individual stocks, you can invest in small cap funds that use this strategy.  If you go the ETF route like investing in the iShares Russell 2000 index fund ETF, it will be relatively cheap compared to a mutual fund and you won’t have to do the stock picking yourself.

If you want to go even further, there are mutual funds and ETFs that have an explicitly aggressive growth investment strategy.  These funds will be very volatile so you need to be willing to stay for the long haul to smooth out it’s dips.

Emerging Markets

If you want to go even further than that, you can invest in small caps in the emerging markets.  This sector of the global economy is growing at a faster rate than the developing world’s economies.  That makes it a tide that is raising all ships.  Likewise, small caps will have more potential for faster and more growth than large cap stocks in this sector.

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The value of coins is determined by the condition; coins the same age and size will have different values based on eye appeal, condition of the rim, scratches, luster, tone and level of detail. The American Numismatic Association has established a numeric system of rating points numbered from 1 to 70. A 70 rating is perfect. Two prominent companies qualified to assess these are Numismatic Guaranty Corporation and Professional Coin Grading Services. These companies guarantee the authenticity of the coin and place each evaluated coin in a sonically sealed, hard plastic tamper-proof holder with the grading information. This is the only way to purchase coins and know their true worth.

People in all lines of work living anywhere are investing in gold. For the last 6000 years aristocrats and countries have kept part of their wealth in this valued commodity to protect themselves in times of economic distress. With the current problems facing nations today, citizens are turning to a safe known commodity. Investing gold coins is a hedge against financial uncertainty in the near future, a way to make money and to diversify an investment portfolio with the hopes of potential profits in the future.

Many people buy gold coins online. Choosing an experienced gold coin dealer to guide this exciting purchase requires caution and research. The dealer should offer education to novice investors, a variety of products in different price ranges and offer to buy back the certified gold coins in the future when the investor is ready to sell. Quality businesses have been in existence for a long time, are licensed and insured in the area they are doing business and have a rating with the Better Business Bureau.

Investing in certified gold coins is a wonderful way to protect oneself in times of financial or economic uncertainty. Using a qualified, certified gold coin dealer protects this investment, by gold online from the Christian based precious metal dealer: gold coins wholesale.

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What Is a Commodity Mutual Fund?

Commodities are generally things that would be classified as raw materials, natural resources or agricultural resources, such as crops, livestock, and minerals. The supply and demand of these commodities directly affect the value of the investment. It would be wise to study various commodities and their performance over time before choosing which ones you want to invest in. By their nature, commodities are more stable goods that have fewer fluctuations, and fluctuations do not always coincide with those of the overall market, so they perform better in the long run. A committed investor would invest in commodity mutual funds; a person looking to suddenly strike it rich would not be interested in them.

That being said, steady performance by a mutual fund is no guarantee that it will continue to perform strongly in the future. Any investment, be it a standard stock trade, Forex investment, or commodity mutual fund, does carry some element of risk. Commodity mutual funds can be quite volatile at times. However, a mutual fund is generally considered less risky than a traditional stock, but more risky than a bond.

How to Pick a Commodity Mutual Fund

The best way to make a decision regarding commodity mutual funds is to request a prospectus from each company that you are considering investing in. A prospectus will tell you all about the company, including their financial performance, and whether or not investments carry fees or other charges. The Securities and Exchange Commission (SEC) requires that mutual funds publish a new, updated prospectus annually in order to provide accurate information to investors. After reviewing a prospectus, you should discuss your options with a financial adviser or broker to be sure you’re choosing the investment that is right for you. You can also use the Internet to research various commodity mutual funds. Prices are listed as net asset values (NAVs).

Remember that while commodity mutual funds may sound like a good investment, you still should be diversifying your investment portfolio, not investing all of it in commodity mutual funds, or you will be defeating the purpose. Take your time before deciding, and remove emotions and judgment from the equation. For example, when deciding between gold and hogs, don’t pick gold because gold is shiny and pretty and hogs are “dirty” animals. You should only be basing your investment decisions on the performance of the commodity, not what it represents.

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What is a Penny Stock?
A Penny Stock is a stock whose shares trade for less than $5. These stocks are a bit risky to invest in, but also have the potential to generate huge gains.

What are some of the Dangers?
One of the greatest dangers of penny stocks is their lack of visibility. Because most of these companies are newly established or small, there is less information about them. This fact requires you to make decisions based on limited information compared to what is available for larger, more established companies in major stock markets. Another great risk is that these stocks can sometimes trade slowly from low liquidity, making it difficult to cash out on your investment.

What are the positives?
By its nature, a penny stock has a lot of potential. That is to say, it has a lot of potential to move either up, down or disappear completely. That being said, there is much more potential for growth than there is for loss. As a result, a good penny stock pick can reap huge returns and give a nice boost to your investment portfolio.

What else should I keep in mind?
Even some of the top penny stocks to buy are not quick, easy money. Despite what anybody tells you, these stocks require great care and educated investment. You should take into account that these shares trade slower than larger shares. Many of the companies selling these penny stocks have high debt loads and are selling stocks to reinvest into the growth of their companies.

Some of this may sound scary. However, with the correct knowledge and prudence, penny stocks can not only be profitable but enjoyable to trade. There is a certain rush that you get from trading in a volatile environment. You also have the opportunity to be part of a someday great company. Many of our largest technology firms were funded in this way. With the correct penny stock guide, you could be well on your way to taking part in the next big venture.

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1. Stock or Equities

Stocks and equities are basically the same thing. They’re securities that represent owning a piece of a company. There are also equity mutual funds, which are also in the same class. There are several ways to acquire stocks and/or equities. You can purchase shares of a company through Initial Public Offers (IPO’s). You can buy from a broker and/or brokerage house (i.e. TD Ameritrade). Also, if your company offers a 410K plan, you can buy stocks through their program. What good about owning equities is that they are easily liquidated if you need to raise capitol right away. Their performance is quite volatile and generally give the best returns over the long haul. With the way equities move in value over the short term, in most cases they’re not ideal for short term investing unless you are very active on a daily basis.

2. Fixed Income Securities or Debt Instruments

Securities that will generate return within a period of time fall in this class. Bonds are the most common of them all. Returns are in the form of dividend income and/or interest. Bonds are issued by either the government, a company that want to raise capital to increase their business or a bank fixed deposit. It’s basically a loan to them from you. They can be purchased through corporate bonds, bank fixed deposits or debt mutual funds. They are considered a safer mode of investing since they aren’t as volatile as equities. It is also used by investors to protect their stock portfolio. The yield varies depending on the economic conditions at the time of issuance.

3. Real Estate

I don’t think I really need to explain what real estate is, but to cover all bases, ownership of land, homes, or commercial property are considered real estate. Real estate is sold in the open market by buying land, houses or commercial property, as well as taking ownership through inheritance.
Another way to invest in real estate is through funds that only involve real estate properties. They are known as REIT (Real Estate Investment Trusts). Investing in real estate can bring great rewards. Look at any wealthy person and you will see that they’re investing in real estate. To own rental properties will bring high yield over the long term while the tenant’s rent will (in most cases) cover the mortgage and other monthly expenses.

4. Gold

Again I don’t think there’s any need to explain what gold is other than it is the most sought after precious metal in the world. There was a time that the American dollar was related to gold, referred to as the gold standard. Gold can be purchased through jewelers as well as banks. Once can also invest in gold through gold ETF’s (Exchange Traded Funds) and mutual funds. The benefit of investing in gold is that it has always held it’s value against inflation. It’s not effected by the fluctuations in either the stock market or any currency. Many of the smart investors hold a position in gold to help hedge against the volatility in the markets. Gold will bring high returns over the long period of time.

5. Commodities

Commodities consist of of any type of tangible item that can be bought or sold. Precious metals, base metals, ferrous metals, agricultural products are just some of the many things that are considered a commodity. To invest in these you would need to go through a commodity exchange, such as NYMEX (New York Mercantile Exchange) and the CME (Chicago Mercantile Exchange) to name a few. I don’t recommend a beginner investing in commodities. The risks are very high and unless you have advanced knowledge in this area, I say stick with the equities (stocks) that handle these products.

To properly make it in the stock market, you should have a well balanced portfolio. I suggest that you learn more about each one before investing any of your hard earned cash in the markets. It will help you to seek the advice of a professional before doing any of the things that were discussed here in this post. General questions are always welcomed and I will do my best to answer and help.

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