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When you buy an index fund from an AMC it adds to the AUM of the Fund and when you redeem your units the AUM reduces. The net effect each day will either increase or decrease the AUM. For an Index ETF, you can buy or sell only if there is a counterparty to the trade. So, liquidity is the key in index ETFs and their AUM will only increase when the value of the shares goes up. An index fund purchase or redemption will be executed at the end-of-day (EOD) NAV. The NAV is the net asset value based on the market value of all stocks adjusted for the total expense ratio (TER) daily. On the other hand index, ETF prices vary on a real-time basis and the price also keeps changing frequently. The big advantage in favor of an ETF is that the Expense ratio in an Index ETF is much lower than an index fund. In India generally, the index fund has an expense ratio of 1.25% while index ETFs have an expense ratio of about 0.35%. That is just the TER that is debited to the index ETF. In addition, when you buy and sell the index ETF you are also liable to pay the brokerage and other statutory costs like GST, STT, stamp duty, exchange fees, SEBI turnover tax, etc. Index funds score over-index ETFs in the sense that you can structure a systematic investment plan (SIP) in an index fund. SIP has emerged as the most popular method of investing for retail investors. This gives the added benefit of rupee-cost averaging which lowers the average cost of owning the units. Since index ETFs are closed-ended, the benefit of automated SIPs is not available to you. This is an area where index funds score. Since ETFs are like traded stocks, the dividends are directly credited to your registered bank account. This is a hassle from a financial planning point of view as the dividends have to be manually reinvested. In the case of index funds, you can opt for a growth plan where dividends are automatically reinvested. Read the full article

This fund has 94.03% investment in Debt of which 13.2% is in Government securities, 50.52% in funds invested in very low-risk securities... The type of investment (portfolio) a Mutual fund holds depends on the “professional expert” who handles it (started it). Some invest in Large-cap companies, some in small-cap, some in debt. Some invest in only a certain sector (e.g. - SBI Technology fund). You can check the allocation of any mutual fund by using any popular website like moneycontrol, value research online, crisil, Motilal Oswal, etc. These investments, made by the fund, in these instruments, get appreciated because of the interest earned through bonds, or appreciation in the price of stocks, or because of the dividends given by stock. And so does your investment appreciates. The performance of any mutual fund is gauged by something called “NAV” Every fund has a NAV, (Net Asset Value). When you make a SIP of say 2000, you don’t actually buy the shares of companies, but by the shares/units of the Mutual Fund at a price called NAV. As the fund performs well, its NAV grows, and so does the value of your investment. NAV = (assets - liabilities)/no of shares. Read the full article

Always behave distinctly from the market. If the market is at risk and you are facing losses take more risk by switching to mid-cap from large-cap equity mutual funds. And if the market is stabilized then play safe and switch back to large-cap equity mutual funds. This is one of the strategies used by Warren Buffett if you know who he is? Read the full article

Success… We all aspire to it, talk about it, envy those who achieve it, think about it, fight for it. It is really worth it. Success comes with reaching our aims and it brings us incomparable satisfaction and happiness. That gives us a unique opportunity to be happy every day, if we achieve small goals every day and step by step we will be approaching our GREAT dream. Recollect your studies at college, when you had to combine work and study; when you had a very tense schedule when your only solution was a custom term paper to get through the semester. But you stood it. By achieving mini-goals every term, at last, you reached the main aim – successful graduation. And that is why you are a successful person. But one of the qualities of a prosperous person is that he is always striving for perfection and will never rest on his laurels. So, let’s go further and develop ourselves…Close your eyes for a minute and imagine a successful person. Is he rich or poor? Surely, most of us associate success with rich people. So, success and wealth are inseparable from each other? Yes, it’s likely to be so. But wealth is not a target for a successful person. It is just one of the steps to reach a global aim. What do you think are there any objective reasons, hindering success? It is a fact that there some outer reasons, not depending on you, for example, war, flood and so on. And what about objective sound reasons? If you find one, we will debate it with you. But so far I dare say there is none!!!! All the reasons are subjective (inner) and thus – everyone can get rid of these reasons, changing something in himself. We create the greatest obstacle in achieving success with our fears, complexes and diffidence. And then, what are the keys to success? Read through the following features and think which of them you have and which you still have to acquire. 1)Clear objective. Without the aim, no achievement is possible. A thoroughly equipped ship with the wonderful crew will arrive nowhere if it hasn’t any course of direction. 2) Accurate strategy. Unplanned success is a planned defeat. The accurate and logical strategy helps to realize the grandest projects. A successful person fulfills a small portion of his great plan every day. If you stick to your plan, then you will be able to realize everything you want. And if you want, you have potential. 3)Positive attitude. Positive thinking, positive attitude to the world work wonders. You live in the world you create for yourself. You want to live in a wonderful world – think about something wonderful! Stop being afraid of failures and you will reach your success. 4) Faith in success. Faith strengthens your potential, and doubts destroy it. If you have some desire, leave all your doubts behind. Just believe in the possibility of its realization and you will have not so many obstacles in your way. 5)Education and training.Being aware of your desires without any action will lead to nothing. Only actions, supported by knowledge will result in great success. Constant training, constant improvement of your professional knowledge, – these are the features that distinguish a successful person. Our world is ever-changing, and only on condition of applying your new knowledge, you can keep pace with time. 6) Self-improvement. It helps us to change for the better, overcome our complexes and fears, get rid of diffidence. Remember, that everything depends only on you; you are the master of your fate, your success, and happiness. And if you don’t possess all the listed above qualities, then you will be able to develop these features to improve yourself. The only thing that does not depend on you is strong desire; it is given to us by Nature. 7) Self-confidence helps us to get top results where there is no premise for it. Fighting with your complexes, the person is approaching the ideal and makes the best of the work. This article is merely a presentation of the philosophy of success. These are only words, though wise and true. But you are able to turn this philosophy into a powerful tool for improving your life from now on. And then the philosophy will revive and you will benefit from it greatly. This simple philosophy will become your strategy, your guiding thread in achieving success. I am sure it will lead you to great success. Read the full article

So what are low-interest credit cards really all about? The following article includes some pertinent information about low-interest credit cards –info you can use to make wise financial decisions. Trying to save on interest expenses? Apply for a low-interest credit card and start saving money by paying less interest expense. Low-interest credit cards are considered cheap credit cards because they offer 0% Intro APR (annual percentage rate) for up to one year. These offers may only apply to the balance transfer and not to new purchases and cash advances. Therefore, making purchases and taking cash advance with your promotional offer credit card may result in paying multiple interest rates. Individuals who are planning to make purchases and carry a credit card balance each month may be better off with low fixed interest rate credit cards. Customers will need to decide if a 0% intro APR or a low fixed APR credit card is better suited for their personal needs. It’s not uncommon for the interest rate to shoot up dramatically after the introductory period expires. Therefore, customers should know what the interest rate will be after the promotional period ends. The promotional offer or interest-free period can save hundreds of dollars in interest expense. During this interest-free period, no interest is accrued if the account is in good standing. Customers utilize the interest-free period to transfer a balance from high-interest rate credit cards to low-interest credit rate credit cards to save money on interest expense. These cards are also very important for customers who are planning to consolidate credit card loans, make large purchases and carry a credit card balance from month to month. Credit card issuers charge a fee to do a balance transfer. This fee varies from bank to bank so it is a good idea to shop around for the best deal. Individuals with excellent credit scores can ask to have the fee waived. Banks and credit card companies competing for the low-interest credit card business offer impressive features similar to standard credit cards. Similar features may be cashback, rewards, bonus miles, no annual fee, and more. Therefore, comparing credit card features is very important because it allows you to find the card that meets your lifestyle and one that will save the most money on interest expenses. The best way to save interest is to pay the outstanding balance off each billing cycle. Credit card companies usually waived the interest charges if the entire outstanding balance is paid on time each month. If the outstanding balance is not paid in full each month then the credit card companies will charge interest on the entire outstanding balance from the date of each purchase. Many customers are not financially able to maximize their interest savings by paying off the entire balance each month. Therefore the next best way to save on interest expense is to use a low-interest credit card to make purchases and carry an outstanding balance. It’s a common situation for individuals with bad credit to pay credit card companies large fees and finance charges. This situation keeps them indebted to the credit card companies if no action is taken to improve their credit score. However, individuals with excellent credit can apply and get approval for a low-interest credit card and avoid the burdensome situation of high-interest rates and fees. Credit card companies have the option to change the interest rate on your credit card for various reasons such as making a late payment, applying for too much credit, making late payments on different accounts or they can change it without any reason at all. Therefore, understanding credit and how to use it wisely is very important. Low-interest credit cards are ideally suited to consolidate credit card debts because of the 0% intro APR or low-interest rate offered. It will make monthly payments more manageable and can alleviate the financial problems that come with having too much credit you can’t afford. This is an opportunity to get your finances in order and to start managing your credit more wisely. Having fewer credit card accounts will simplify your life and eventually improve your credit score. It’s much more convenient to write one check instead of writing several checks each month to various creditors. Debt consolidation is an excellent opportunity to keep you out of bankruptcy and get your finances back on track. Learning about the grace period as it relates to your specific credit card is very important. The grace period is between 20 to 25 days. You have this free period to pay no interest if your payment is credited to your account during that time frame and your account carries no balance. The customer’s monthly payment must be received by the creditor during this time frame. Learning about the grace period as it relates to your specific credit card is very important. Usually, credit cards without a grace period are charged finance charges immediately on new purchases even if your previous month’s bill was paid in full. The internet is the easiest place to find low-interest credit cards with online credit card applications. A website like www.icreditonline.com offers various types of credit cards. The cards are grouped into different categories. Clicking on low-interest credit cards will bring up a list of low-interest credit cards. Customers will then be able to compare offers and submit their online credit card applications for approval. The internet is a very convenient and fast way to apply and submit your credit card application. No more waiting weeks to receive your credit card in the mail. Once approved your should receive your credit card by mail within a few days. Read your credit card agreement to find out if there are separate interest rates for the balance transfer, new purchases, and cash advance. Cardholders may be charged a very high interest rate and fees for cash advance or making new purchases while getting the 0% intro offer for a balance transfer. Don’t let this happen to you. Take the time to read the credit card agreement. Reading and understanding the credit card agreement is of utmost importance because it gives you the knowledge needed to make the right decision. Read the full article

‘Credit card debt consolidation is a phrase that you must have come across many times. There are hundreds of sites with advice on credit card debt consolidation. Now and then your favorite newspaper will also contain an article or advice on credit card debt consolidation. TV channels host discussions on credit card debt consolidation. Moreover, numerous consultants and companies provide professional advice on credit card debt consolidation. So what is this “Credit card debt consolidation” that everyone is talking about? Why is it such an important topic? “Credit card debt consolidation” refers to the consolidation of the debt on various credit cards into a single credit card (or a couple of credit cards). Generally, you move from a higher APR credit card to a lower APR one. You might ask ‘why?’ If you look into how the vicious circle of credit card debt works, you will immediately understand the logic behind that. Credit card debt grows in 2 ways. One is due to the addition of new debt on account of fresh spends on your credit card and the second is due to the addition of interest charges to the existing credit card debt. The first one is due to your use of a credit card but the second one is due to interest charges which are calculated based on the interest rate or the APR applicable to your credit card. So a lower APR rate means that your credit card debt will grow at a slower pace and hence switching over to a card with a lower APR makes perfect sense. The process of credit card debt consolidation is also referred to as the balance transfer process (you transfer the balance or debt from one credit card to another). The credit card debt consolidation (or balance transfer) offers are made even more attractive by the credit card suppliers by associating various benefits with them. The simple logic behind offering these benefits is the fact that such a customer would be defecting from one of their competitors. The biggest benefit offered by these credit card suppliers is 0% interest on balance transfers (or credit card debt consolidation). This 0% APR is generally applicable for a short period of time i.e. 3-6 months, after which the standard APR is applicable. Other credit card debt consolidation offers to include things like interest-free purchases for a short period, reward points, etc. These credit card debt consolidation offers make the exercise of credit card debt consolidation even more logical and meaningful. Credit card debt consolidation seems to be a good way of tackling the problem of credit card debt and that is the reason why there is so much discussion on the topic of Credit card debt consolidation. Read the full article

Business credit cards play a great role in the success of many business organizations. At present, credit card companies offer business organizations a great assortment of credit cards that will help business owners in developing a successful business. Business credit cards can help you afford many of your business expenditures. At the same time, these credit cards provide countless benefits to cardholders including detailed statements, expense management, cashback, frequent flyer, and reward points. So, business credit cards are a great help for small business owners. The most important role of business credit cards is to help business proprietors to manage their business more easily and efficiently by simplifying the accounting and financial record-keeping tasks. This is a problem area in the management of the affairs of a business. More than that, keeping updated and precise records is a challenge for any business. As has been already mentioned, one of the benefits of business credit cards is detailed statements. These statements eliminate the burdensome need to get and carry receipts with you. Many credit cards from different credit card companies include secured credit cards, cash back credit cards, and rewards cards. It’s up to you what type of credit card to choose. But don’t forget that it will depend on your company’s mission. For instance, if you or your colleagues travel a lot, then a card that offers travel miles may be the best choice for you. These cards are very popular with business owners. Each time you use your card you will be supplied with frequent flyer miles. Moreover, with your accumulated miles, you can save money on expensive flights. If nobody in your company travels or does very little travel then a credit card that offers reward points may be suitable in this case. You will accumulate reward points with every dollar spent during business-related transactions. Then, you can use these points to acquire a lot of services offered by a credit card company. There is no doubt that business credit cards are helpful. The only problem is to choose the right credit card for your business. If you have a poor rating, it may be difficult for you to get a credit card. But many credit card companies offer business credit cards for bad credit. These cards are considered to be secured credit cards that require a deposit before being approved. This deposit serves as proof that your business will be responsible for your credit card spending habits. However, each credit card company has different policies concerning their secured business credit cards. We can’t but mention that secured business credit cards can help business owners to restore bad credit history and at the same time they help the business to grow. When you get business credit cards, you assume new responsibility for your business. You have got a new way to get the supplies your business needs, but you are to be sure that you make payments on time. And don’t let your credit card debt get out of control. Credit card companies offer several business credit cards. Each of them claims to be the best. When choosing a business credit card, the most important thing is to figure out which one is suitable for you. Read the full article

Most of us like to start a business and work from home without even knowing what is required to start a home-based job. A few of the tips discussed in this article will help bring forth certain factors to be considered before starting a home-based work. The first thing to be considered before starting a business is to actually set up a business. The person should have got the employer identification number or social security number in the first place. It is the first step towards starting a legal business venture as all businesses have to pay taxes. The next is to keep a record of all the income earned and expenses made. The report also needs to be submitted at the end of every financial year. It is wise to keep all the receipts and proof of expenses made, as any business venture needs to be audited. The next important thing is to run the business venture professionally and if not it may be the reason for losses. Getting a professional email account is very important to stay in the business for a long. Even though the person works from home, it is good to have a dedicated phone line for the business as no professional would like to get an answer from a kid or servant of the house. Also, backups are needed to avoid unforeseen circumstances like a hard drive crash or virus attack, etc. The information the person deals with may be very important and if any of them is lost it can cause huge damage to himself and the client. Being well prepared before starting a business is a proactive way of dealing with things. Tips for sourcing the best data entry job from the home program: It is better not to go for free data entry job programs as nothing is given free of cost in this world. Such free programs at the end may cost more due to hidden and undisclosed costs. It is good to select a program with lower application fees since they cover training support needed and help in setting up the accounts etc. in a proper way. Such kinds of programs are worth the money paid towards application fees. To get a good kind of work and that in good volume, it is good to update databases with the companies who need data entry workers who work from home. Constantly updating the databases will fetch more and more jobs. It is advised not to concentrate on incentive-based work options as many of the jobs pay incentives but less remuneration only. If the person is aiming to earn more it is good to get data entry jobs that pay high remuneration. Data entry jobs require hard work as it is not an easy job and also it is not for people who like to make money doing nothing. If a person has good typing skills, and a willingness to work data entry jobs, it can be really promising. Also, it is good to get work from reputed data entry job sites which can be known through people who are already into it, or from friends and relatives. There are a lot of forums where all the questions are answered. Read the full article

Is job-hopping and career success related to each other? What is the effect of one on the other? How long is too long for staying in a company? I must admit, the resumes that pass by my desk make me conclude that job-hopping is far too common. Job hoppers do it for various reasons. More often than not they may not know what they are getting into. Sometimes, it is because they do not know what they want and hence are not ready for the challenges that lay ahead of them. Job-hopping and career success is related to one another. In my opinion, job-hopping affects career success in a negative manner. Consider this, what signals are you sending to your potential employer if you job-hop too often? The Two-Year Rule I have a two-year rule that I tell my staff and potential employees. The two-year rule is this – you must be willing to commit mentally to spend at least two years in the company before you quit. The reason is this; you need to deal with the learning curve. If you job-hop too often, you learn nothing substantial. For me, it takes you at least a year to know the ins and outs of the company. Then another year before you can eventually be truly productive in adding value to the company. To see the true results of your contribution to the company, for me it takes at least two years. So, if you are prone to job-hopping and career success is on your mind, then it is time to rethink. Training You Many well-established companies have training programs. They are willing to invest in fresh graduates and newbies. However, for them to make that decision, they need to look at past track records. Ask yourself, if you are a manager -who are you more likely to invest training time and money on? Someone who is a job-hopper and shows a tendency to job-hop or someone stable? Companies are more likely to invest in stable people. The reason is simple. They can contribute back to the company. Everybody wins. If you are constantly job-hopping, you send a signal that you are not ready to commit. Companies like to invest in people who see their career goals align with their corporate goals. Job-hoppers usually cannot see their career path beyond the next year. Decreasing the Incidence of Job-Hopping One of the best ways to quit job-hopping is to truly know what you want. Once you know that, you will have a singular focus in the pursuit of your career goals. Of course, it is understandable that as a fresh graduate or newbie at work it is tough to know that. You may be interested in some other industries. If there are other fields that you are interested in then make a plan to find out about them. Start with the Internet, and then ask friends who may know people in those fields. Speak to them; ask them about the expectations of the company and the role of the position you are interested in. You may not have all the answers but at least you get some idea. That would decrease the chances of you job-hopping. Make Learning a Key Objective If you are new in the workforce and have been job-hopping quite a bit, my advice to you is this – truly find out what you want. Once you know that, find a company that is willing to train or how they are willing to commit to their employees’ careers in the long term. If they have structured training programs, join them. Make learning the relevant skills and knowledge in that industry your key objective. The skills and knowledge that you learn will contribute to your career success in the long term. It is something that you can bring with you for the rest of your life. Once you see the benefits of committing to a company that is willing to train you for more than two years, hopefully, you won’t be job-hopping often anymore. Read the full article

You’ve been in business very long, you’ve likely heard it all! You know, the irate customer who is going to sue you over the nineteen dollar product that they claim is bogus; the one that’s going to “shut your business down” because they conjure up in their minds that you might have breeched your privacy policy, or the one that takes complete advantage of your money-back guaranty. My favorite has to be the one that calls and screams vulgarities into the phone for apparently no reason. It doesn’t happen often, but you will run across some nut cases from time to time if you're going to be in business. Some can be diffused, some can’t. That’s just the way things go in business. There are some simple techniques for dealing with irate customers without burning yourself an ulcer over them and without telling them you hope they get cancer and die! Here are some tips you may find useful… 1. Don’t take it personally There is one thing that almost all nasty customers have in common. They try to attack you on a personal level. Name-calling is not unusual. When you take it personally, you are likely to get into a yelling match with the customer which resolves nothing and only stands to make things worse. Try to diffuse the situation – kill the anger with kindness so to speak. If that doesn’t work, ask them to contact you again once they have calmed down and are willing to speak reasonably. Refuse to speak with a customer in an irate state. You don’t have to put up with abuse ever. 2. Don’t overdo the “customer is always right” concept In customer service training you will always hear that the customer is always right. While that is true to some extent, sometimes they are just flat wrong. You should always try to accommodate a customer within reason, but do not allow that concept to go too far. 3. Realize it isn’t always your problem Sometimes people just have a bad day and are looking for someone to take it out on. A hateful, ugly customer is often one of these people. If you listen to their ranting and raving, then respond kindly telling them you understand their frustration and you want to work with them to come to a resolution, you will often diffuse the anger and uncover the rational human being beneath it. 4. Don’t fall for fear invoking bluffs In customer service, some business people tend to do anything to avoid the potential harm of a threat even if it means losing money or giving in to irrational demands. When you are threatened, consider the validity of the threat. Do you really think someone is going to pay thousands of dollars in attorney fees to sue you over a low-dollar transaction? Likely not. Again, do what you can to accommodate within reason but don’t give in to unsubstantiated threats. 5. Be prepared to decide whether or not a customer relationship is worth salvaging You’ve heard it said that one happy customer tells one person about your business while an unhappy customer will tell 10 or more. Undoubtedly, word of mouth can be the best or the worst exposure for your business. This is the very basis of the “the customer is always right” concept. Of course, it is best to salvage a customer relationship if you can, but again, do so within reason. Read the full article

Jeff Bezos completes a short trip to space in Blue Origin rocket, voyage lasts 11 minutes. Billionaire Gautam Adani's Companies Sink For the Second Day Amid SEBI Probe. Indian Stock Market Kept falling on Tuesday with a near drag of -120.30 points. While the Indian stock market is closed on Wednesday on the occasion of Bakri Id. Dow Jones Soars 580 Points, Led By American Express. Bitcoin Slumps Below $30,000. Glenmark Life Science's initial public offering (IPO) will open for bidding on July 27 and will close on July 29. The price band for the share sale has been fixed at ₹695-720 per share. $7 billion BPCL sale slows on Covid-19 pandemic, LIC IPO. Zomato raises $1.26 billion in IPO: Report Indian food delivery startup Swiggy raises $1.25 billion led by SoftBank and Prosus. Rakesh Jhunjhunwala Big Bull trims stake in another Tata group stock. Read the full article

Sometimes, a guardian needs to co-sign for a student credit card, which is not the case with traditional credit cards. In addition, student credit cards generally offer a lower credit limit than other cards. Often, these credit limits can be as low as just $500 or $1,00. Student credit cards also can have higher interest rates than traditional credit cards. But may not necessarily be higher than the APRs on other credit cards geared toward those with a limited credit history. Read the full article

Through technology, the world is literally at your children’s doorstep. Technology enhances the education of black children. Just imagine what could happen if black children spent time designing or improving games for the Xbox 360 and PS2, or used their ingenuity to create videos, films, music, and literary works. The possibilities and opportunities associated with technology are endless. According to Dr. Johnson, there are several programs available, including Black Family Technology Awareness Week, that provide technology access and training. “If America is to maintain its competitive advantage,” she says, “We must encourage our children to join the next generation of innovators, scientists and engineers, and our adults to build and improve their technology skills.” Read the full article

Investing can be a dangerous yet profitable endeavor. Many people have been burnt and decide not to ever invest again. This is the primary fear of investing in anything. They may give you excuse such as ‘I don’t have enough money or ‘I don’t know where to invest’. But the number one fear is always the fear of losing money. If a novice investor knows that he won’t lose money, he must have used all means necessary (such as a loan) to buy as much investment opportunity possible. Investing here can mean a lot of things from buying gold coins to real estate. However, common stock is the most popular form of investing since more than 50% of the US household invest in it. There are several ways of how to reduce your fear of investing in common stock. Get Educated. When you know more about something, you are more certain of your outcome. When you know how to calculate the fair value of the common stock, you will know your expected return on investment. Remember that the less uncertainty you have, the less risk you undertake. You will also know more about the downside risk of your investment. If a common stock has $ 3 per share of positive net cash, is profitable, and is currently trading at $ 5 per share, then you know that it won’t trade at below $ 3 per share for a long period of time. Your maximum possible risk here is 40% of your original investment. Start Small. When you begin your investing journey, you have a lot of unknowns. Less education means more unknown which means greater risk. How small should you start? As much money that you can afford to lose. If you still have no idea, then how about $ 1 a day? One dollar a day will give you $ 500,000 after fifty years of investing with a 10.5 % return. Even if you have $ 500,000 right now, you should start small if you are a novice investor. Pay Yourself First. By this, it does not mean that investors use their money to buy unnecessary stuff. Pay Yourself First means that you find an investment that can pay you first as investors. What investment can pay you first? One thing that comes to mind is buying a common stock that historically has steady or increasing dividends. There is one more way to pay yourself first by selling covered call options. However, for novice investors, we suggest we put this subject off until you get really really comfortable with investing in common stock. Learn From Your Mistake. Once you begin investing, the fear of losing money is always there. The best way to learn is from your own mistake. But to hasten your learning curve, we have compiled a list of 15 common investing pitfalls that is frequently committed by novice investors. Will you be fear-free after reading this column? The answer is no. Fear is always there because of uncertainty. Successful investing is about predicting the uncertain future. Even investing in your money-market account is uncertain. It involves some small risks. The risk might be inflation being higher than the interest rate offered. There is also uncertainty regarding the direction of the interest rate. The interest rate used to be in the high single digits during the 1980s. Look where it is now. We live in an uncertain world. Instead of hiding behind the wall, we need to embrace it and educate ourselves to reduce the uncertainty. Doing this will in effect increase our investment return beyond the rate of inflation. Read the full article

Be wary of credit repair services. Some claim to be able to “fix” bad credit. If you have inaccurate information on your credit report, you may contact the credit bureaus directly and correct it yourself. If you have had credit problems, any attempts to remove the relevant information from your credit report are illegal, fraudulent, and only temporary. Read the full article

Before investing your hard-earned cash into penny stocks, it is important to research the penny stocks you want to invest in before committing any cash. You want to find profitable penny stocks. To do this, you’ll need penny stock leads. Leads are just names of penny stocks that you are thinking of investing in. There are many ways to get penny stock leads. For example, searching the internet (blogs and forums), joining a penny stock mailing list, or keeping an eye out on the news. The main idea is to build a list of around 5 to 10 quality leads that are worthy of your money. After you have a list of leads, you’ll want to choose one or two of them. You’ll need to go through your list and discard stocks that do not meet your criteria. This process can be tedious but it will be well worth it in the end. The criteria that I look for include – company history, business plan, opinions of individuals and experts, financial information, competition, track record of the board of directors, company reports, and broker recommendations. Using the variables, I can quickly establish whether a particular stock is worth investing in. Once my list has been cut down to 1 or 2 stocks, I’ll ask for opinions from other people to confirm my selections. It is very important to listen to the views of other investors because, in most cases, they’ll have something valuable to contribute to your research. Perhaps, you missed out on a vital piece of information that other investors could highlight for you. Now that I have 1 or 2 stocks out of my original list of 10, I feel confident that I have done my due diligence and I am ready to invest. I use this process every time I’m investing in penny stocks and, so far, it has been simple but profitable. Read the full article

An options strategy called Covered Call Writing is a conservative strategy designed to reduce risk and increase income when investing in stocks. Briefly stated, stock options are contracts in which you buy or sell the right to buy or sell. Although there are eight types of options contracts, we’re interested here in low-risk “Covered Call Writing.” Here’s how it works: Say it’s August and you buy 300 shares of XYZ stock at the price of $48 per share. XYZ pays a quarterly dividend of 50 cents per share. Therefore, if the price never moves, you’ll earn 4.2% per year. At the same time, you would participate in Covered Call Writing. To do so, you would “write three January 50 Calls.” This means you are selling (“writing”) the right for someone else to buy the stock from you (they “call” it away) between now and the third Friday of January at the specified price of $50. (All contracts expire the third Friday of the month.) Each contract represents 100 shares, hence three contracts. The buyers pay you a fee (called a “premium”) of $3.5 per share, or $1,050. (The premium is based on the amount of time until expiration and the spread between the current price and the “strike price,” in this case $50. Therefore, the premium changes constantly.) Assuming you don’t cancel, only two things can happen next: The contract will get exercised or it will expire worthless in January. Either way, you keep the $1,050. Clearly, this strategy can yield big rewards. Among the advantages are: 1. You are establishing a profitable sell price the day you buy the stock. If exercised, you are guaranteed a profit; 2. You reduce risk because premium in effect reduces the price you paid for the stock; 3. Your annual yield is boosted far above that of the dividend alone. However, there are other considerations. For one, you are limiting your potential profits. No matter how high the stock rises, you won’t sell for more than $50. You can solve this problem by buying your option back, in effect canceling it out. You would do this if you later think the stock will dramatically rise and you don’t want to miss the gains to be made. Also, you have not reduced the risk that your stock may drop in price. The only certainty is, should XYZ drop $25, your option will not be exercised – a small consolation. To protect yourself, you may “buy a January 45 put” giving you the right to sell your stock for $45. This is the opposite of what we’ve reviewed here and is designed to minimize losses, rather than protect gains. Because of the potential for price drops, you should choose a high-quality, blue-chip stock that fits your budget, and which offers a stable trading range, solid fundamentals, high dividends, and good growth potential. Covered Call Writing is not a reason to own stocks, but the strategy might be of help if you already own them. Before opening an account, you must receive and be urged to read “Characteristics and Risk of Standardized Options,” which is published by The Options Clearing Corporation in cooperation with NASD and all major U.S. stock exchanges. The booklet is available from any broker or financial advisor. Read the full article