Catering by Michael LLC » Finance

Financial future in gold!

admin — Tue, 02 Nov 2010 07:57:46 +0000

If you are thinking of making an investment that you’ll never regret, then the best investment you should make is in gold. Gold is considered to be the ultimate asset, it never depreciates, and when other investments, such as stocks, weaken, the price of gold rises! It is never affected by economical crisis, nor can the government devalue it.

When it comes to gold prices, there are websites that can help you answer your questions and inquiries, and provide you the information you need regarding gold price, gold spot or spot gold! Whether you are interested in selling or buying gold coins and bullions, you should be well aware of its gold price. Gold price is set and a recognized rate that is used as a benchmark that the world market uses for gold products. Just think about it, gold coins and bullions don’t come cheap, and you should be guaranteed that you are getting your money’s worth! And to avoid scams, you should only trust and make transactions with certified and safe gold companies. Secure your financial future in gold!

Tips to impress your lenders

admin — Fri, 13 Aug 2010 04:34:50 +0000

If you are looking for a credit card, then might be a tough job for you unless and until you try hard to impress your lender that you are a good risk. Finding a good credit card with low interest rate is too difficult. Here are some suggestions that will help you in getting your lenders impressed of you:

Pay your bills on time:

Paying off debt in time in small amount will hold a good payment record for you. If you make late payments, then it might lose chances of getting a credit card. If the lenders decide to issue you a credit card, then it will be of higher interest rate due to your late payment record.

Debt load control:

Lenders generally look for that fact that whether you can bear the credit card debt load to put you at risk. You non-mortgage credit payments should not exceed 10% – 15% of your take home pay. This will help you in getting info about how to get out of credit card debt in future.

Show sign of responsibility:

Lenders generally try to find out stability in your life. They want to stability in your job as well as home conditions. You need to present yourself as stable as possible. Your jobs past records must also indicate you to be stable.

Unused credit:

If you don’t use your credit card for long or you hold zero balance will surely hurt your credit. Always ask credit-reporting bureaus to remove the discarded cards from your report, noting that you not the creditor closing the card. Getting a good credit card will help you in the future to pay off debt. This needs to ensure that you get it at low interest rates without any problems. Impressing your lenders is very important these days!! May you have a safe crediting!!

TIPS ON TIPS AND OTHER INFLA NON-INDEXED OFFERINGS

admin — Wed, 21 Apr 2010 14:36:14 +0000

While many of you have been offered tips on investing, this may be the first time you’ve gotten tips on what’s commonly known as TIPS—Treasury inflation-protected securities. Introduced by the U.S. Treasury in 1997, TIPS are fixed-income securities, sold in multiples of $1,000, whose principal value is indexed to the Consumer Price Index (CPI). This helps you—the bondholder— offset the risk that inflation will decrease the value of your principal.
Why is this worthwhile? While Treasuries carry almost no risk of default, they are subject to the ups and downs of interest rates. Therefore, if you want to sell a Treasury bond before it matures, the value of your principal may be less than what you paid. The other concern is that although you are sure you’ll get the full value of your principal back when the bond matures in, say, ten years, your purchasing power will likely be reduced due to inflation.
If you buy a TIPS, however, the semiannual interest you receive is calculated as one-half of the interest rate (determined at auction) multiplied by the inflation-adjusted principal. This means that you will always receive a real rate of return above the inflation rate (but in the unlikely event of deflation, your interest payments will decrease). At maturity, the bond is redeemed at its inflation-adjusted principal amount or its par value, whichever is greater. Therefore, you will likely receive more at redemption than you paid at purchase. You can’t receive less.
Which is better for you to hold: regular Treasury bonds or TIPS? The answer isn’t absolute, but, as a rule, if you think inflation is rising, you’d do better with TIPS. But realize that you have to pay income tax each year on the inflation adjustments you receive from TIPS—even though you won’t get the actual cash until the bond matures. This makes TIPS most appropriate for tax-deferred accounts. In addition, you should probably only buy a TIPS if you plan to hold it until maturity. Unlike many traditional bonds, it can be difficult to sell a TIPS.
Note: Other variations of principal-protected notes are available in the marketplace. Inflation-indexed savings bonds (I-Bonds), a variation of the tried-and-true U.S. government savings bonds, are also indexed to provide a hedge against inflation and are sold at face value in increments as small as $50. These bonds offer a guaranteed annual rate that remains in effect for the life of the bond as well as an additional rate that is tied to the CPI and adjusted every six months.

MUNICIPAL BONDS

admin — Sat, 27 Mar 2010 14:26:17 +0000

A second type of bond investment that might make sense for you— especially if you’re in a high tax bracket—is tax-free municipal bonds. When you buy a muni, your interest is generally free of federal income tax, and if the bond was issued by your state of residence, you generally won’t have to pay state or local taxes eithet But there are a couple of potential bugaboos. First, some types of muni bonds could be subject to the alternative minimum tax (AMT), an additional tax system created to ensure that people who claim many deductions still pay their fair tax bill. In addition, tax-exempt interest can impact the taxable status of your Social Security benefits. Be sure to double-check your situation with your tax advisor.

LADDERING

admin — Mon, 08 Feb 2010 14:22:21 +0000

We don’t want to get too tricky (because we really do believe in keeping bonds as simple as possible), but there is one strategy, called laddering, that can help stabilize the bond portion of your portfolio—much as dollar-cost averaging helps even out the price fluctuations in your stock portfolio. Here’s how it works: Instead of buying bonds that are all scheduled to come due in the same year, when you ladder you buy bonds scheduled to mature at evenly spaced future dates. The idea is that if the rates go up, you can renew your maturing bonds at the better, higher rate. But if the rates go down, then you’ll still have your other bonds locked into higher rates.
For example, say you invest $60,000 equally among three bonds that mature in one to three years. Bond A yields 5%, bond B yields 5.25%, and bond C yields 5.5%. In the first year your portfolio will generate an average return of $3,150 (5.25%) from the three bonds.
In a year bond A matures, and you invest the proceeds in bond D, which matures in three years. If interest rates have gone up, let’s say to 6%, your new portfolio will generate a return of $3,350 (5.58%).
But if interest rates have fallen, you still buy the new bond at the lower rate. Although your yield will be lower for this bond, you will have the peace of mind of knowing that you locked in a higher rate for your other bonds. In other words, you’re in good shape regardless. If interest rates go down, you’ve locked in a higher rate. If interest rates go up, you can continue to buy bonds that pay higher yields.

Adding Balance with Bonds

admin — Wed, 27 Jan 2010 14:20:24 +0000

Intelligent investing is all about balance, If you look back at the various model portfolios on pages 79-SO, you’ll notice right away that more conservative the plan, the larger the percentage of bonds, This is because when done carefully, investing in bonds can provide a dependable stream of income and greater price stability, But you need to be careful. The world of bond investing is huge and complex, and it’s easy to get misled. You also have to keep in mind that bonds intrinsically don’t have the ability to grow like stocks do. That’s why my father and I suggest only a few ways to invest in bonds—that will provide you with the diversity you need to balance out the other investments in your portfolio, without taking on undue risk.
If you buy an investment-grade bond and hold it until it comes due, you’re almost guaranteed that you will get your original principal back (plus interest along the way). But trading (or buying and selling prior to maturity) carries other risks. Because the price you pay for a bond depends on the prevailing interest rates (bond prices go up when interest rates go down, and vice versa), you can certainly lose money by buying and selling at the wrong times.
You also have to consider time frames. Some government bonds don’t mature for up to thirty years. (Even though the government stopped issuing new thirty-year Treasury bonds in 2001, many will remain in circulation for years to come.) But even if you have the safety of the U.S. government backing up your investment, just think what the ravages of inflation could do to your investment in thirty yearsl
In my mind (and my father’s), five years may be the ideal time frame. Five-year Treasury notes are safe, provide a steady stream of income, and don’t tie up your money for an unreasonable length of time.

Concentrated Positions: The Antithesis of Diversification

admin — Wed, 18 Nov 2009 08:27:33 +0000

A concentrated equity position occurs when an individual stock makes up more than roughly 20% of your total portfolio. The danger is that the performance of your entire portfolio may be significantly affected by that stock, and as a result you may be exposed to more risk than you are comfortable with. This concept holds for sectors and industries as well as individual stocks. You don’t have to look back any further than the fall of Enron or the tech wreck of 2000 to see how concentration in any one company, industry, or sector can wreak havoc with your returns. How do you acquire a concentrated position? Often it results from receiving shares of your company’s stock in your 401(k) plan or from receiving shares in an inheritance. When you review your portfolio, you should be aware that in addition to individual equities, the concentration may be less visible but still lurking in your 401(k), IRA, or mutual funds. Do yourself a service and check them all. It may be time to rebalance.