Just in case you’ve been curled up under a rock and don’t know what mutual funds are in the first place, here’s a quick recap. Mutual funds are a collection of investments clubbed under one head. The mutual fund manager chooses what to invest in and when you invest in it you invest in everything the mutual fund holds. For beginners this is excellent since you won’t have to pick out stocks and end up losing a lot of money. In addition, it will let you diversify your holdings and spread the risk around. So you can choose between money market mutual funds, bonds, or commodities, pretty much anything when picking out mutual funds. And dividend mutual funds are obviously also an option since they choose dividend paying investments and help you recover your initial investment faster.

The little bit extra that these dividend mutual funds offer makes them a very safe bet. After a pre-set period, some companies will pay out money from its profits to its shareholders. This can be quarterly, monthly, annually or even bi-annually. This is money you get simply for holding the stock of the company. You can do whatever you want with it and only have to remember that there are taxes to be paid on it. Some companies even allow these dividends to automatically be ploughed back into buying some stock. That means you get shares for nothing and your holdings and earnings are boosted steadily just for participating in these dividend mutual funds.

If you want an overview at large, check out the Quantum Online website. It is a terrific tool for investors of any type, and of course that would include those looking at investing in preferred stocks. You are required to register with the site in order to gain access to their tables and list of securities, but it is well worth it since it is free. If you look around, you’ll find information about preferred stocks detailing its ratings from credit agencies, share prices, retraction information, dividend amounts, etc. You can look at several good options, such as the Malachite Aggressive Preferred Fund. It is a fund that is actively-managed and made available only for accredited investors.

If you are an individual investor, you can also be accredited. You need to be able to hold financial assets worth a net realizable value of over $1 million (either in an individual capacity or in a household). Failing that, you must have income before taxes of more than $200K in each of the two preceding years or $300K if you are married. But the simplest option is that to be recognized as an accredited investor, you need to invest at least $150K in the fund. Who says money can’t buy you everything?

But there are several options for you as an investor, such as the JOV Leon Frazer Preferred Equity Fund (also an actively managed fund) that manages to create dividend income by investing in preferred stocks. ETF’s too can be an option, given how they are all the rage at the moment. The management fee on these ETF’s are obviously lower than it is with mutual funds and that is one of the key benefits of ETF’s. For example, the Claymore S&P/TSX CDN Preferred Share ETF tracks the preferred share index and does so for you at a management fee of 0.45% per annum.

There are some key differences between stocks, bonds and preferred stocks and if you are looking to invest further in preferred stocks, hopefully you would have gained a better idea of how to do so. The key is to take a look at the company’s prospectus, since it will be available online and easily accessible.

The Treasury now holds some 500 million shares and will have to hope to sell each of those shares at an average price of $53 each in the coming months in order to break even on its investment. But keeping investors as enthusiastic as they have been in the last few days might not be such an easy task. The Obama administration holds a great degree of influence over GM, but that might not be enough to break even. The big thing though is that GM is showing that it can be profitable and a full exit by the government is now a distinct possibility within the next two years. Thanks to this offering, the government is recouping its investment faster than was expected, with the Treasury’s ownership stake slashed to 26% from very nearly 61%. The biggest winner in all of this are the US taxpayers.

When it injected the cash into GM, the administration argued that keeping GM alive was not just about GM alone. It was about keeping alive the network of businesses that were connected to GM. Indeed, reports released by the Center for Automotive Research (a nonprofit organization) revealed that government intervention in GM and Chrysler saved 1.1 million jobs in 2009 and 314,000 jobs this year. That, in a time of unemployment, is a very large number indeed. GM’s upswing in fortunes can be put down to the revival of the American car industry. That is very remarkable given that as recently as last year American companies were said to be incapable of competing with foreign competitors that were more capable and more nimble than themselves.

By lowering costs and increasing efficiency, GM and Ford have improved their competitiveness and investor demand of their stock is a measure of this. In fact, so strong was the vote of confidence in these companies that more shares were sold than was initially planned. G.M. has gone on to raise $18.1 billion from selling common shares and $5 billion from selling off preferred shares. While GM is laughing all the way to the bank, US taxpayers will be relieved to see that their investment in the motor giants is not entirely a waste. It was critical that GM cast off the unwanted tag of “Government Motors” that they had acquired, and they will be relieved to finally be doing so.

Think of the luminaries that keep them company, and the names will roll off like a who’s who of the corporate world; Google, Mastercard, Goldman Sachs are just a few of the names that can be mentioned, and it has Berkshire-Hathaway for good company in this A-grade listing, but it’s safe to say that Apple’s share price will not match Berkshire-Hathaway’s $125,000 per share any time soon. But what is undeniable is that Apple has enjoyed an era of such unprecedented success under Steve Jobs that their position as one of the, if not the, preeminent tech company of our time is indisputable. In his second innings now since taking over from Gil Amelio, Jobs has powered Apple to widespread commercial success and acclaim, and a lot of that has to come down to the restructuring Jobs initiated more than a decade ago. But where does Apple go from here in a financial sense?

Higher priced stocks are subject to a different dynamic when compared to lower-priced stocks. For one, the average shareholder is now no longer able to hold any meaningful stake in the company. Yes, mutual funds and exchange traded funds might give the average Joe the chance to hold a small stake, but it will be very small, almost negligible in fact. Take Google, 80% of whose shares are held by institutions while that figure stands at 70% for Apple. Even a monolith such as Citigroup has only 38% of their shares owned by institutions, but their market cap is barely 50% that of Apple and their shares trade at $4, so that lends even more credence to our argument.

Indeed, it is a matter of pride for Apple to be soaring so high, but is there sense in keeping the value so high as to price out the average retail investor? Perhaps there isn’t, because these stockholders might bring a lot of volatility to the table with things such as day trading and short-term investing, something institutional investors are loathe towards doing. Warren Buffett, for one, has stated how he prefers investors who are in it for the long haul and there is on the face of it no merit in the argument for splitting the stock and allowing day traders in. Stability is a blessing in these volatile economic times as opposed to letting speculators into the mix.

However, that is not to preclude the possibility of a stock split at all. It is highly likely that the powers that be at Apple are mulling over the possibility of a stock split since the value of intrinsically solid companies, such as Apple and Google, will always keep on rising as opposed to dropping over time. Google too has not engineered a stock split of late, but there is no compelling reason for these two tech titans to avoid doing so. These two companies have the collective imagination of the public captured, and it would be hard to believe that if Apple were to split their stock there wouldn’t be a frenzied interest in it. There is a recent precedent for a split too, Baidu having done so on the NASDAQ earlier this year in May. Whichever way you look at it, Apple is no longer the forbidden fruit of the tech world. Everyone wants a bit of it.

There were so many questions raised over this “flash crash”. Had trading rules failed to be in step with markets that now process and execute orders all in the blink of an eye? The report tips the scale at a 100 pages and is an exhaustive account of what transpired on that day and its basis is a mountain of data culled from trading firms and exchanges. In the hours preceding the nosedive volatility was the norm and liquidity was almost nowhere to be found, all of this compounded by a large number of political and economic views that had unsettled the markets. What triggered the fall, as the report indicates, was an exceptionally large sell order on the S&P500 index by an as yet unnamed mutual fund group.

And because this trade was algorithmic and automated, the program was trained to take into account trading volume and not any other factor such as price or time. And so it was executed swiftly, like an executioner would wield a guillotine. An order that would have played out over hours took minutes and so chaos was born. Adding further volatility were High-Frequency Trading firms (popularly known as HFT’s). For log maligned as undermining market stability, these firms hold shares for a matter of seconds, sometimes only a fraction of a second. They are fickle indeed and for a time they helped absorb the pressure, but only for all of 10 minutes, after which they started selling. And the sell algorithm mentioned earlier responded by increasing its orders into the market and the market was soon stuck into freefall.

HFT’s were soon selling and buying from each other as if they were trading hot potatoes and not stocks and contracts. There was a lot of volume but not enough buying. As for individual stocks, many of them were frozen since prices had moved beyond certain thresholds. Many of them wondered about the fall of prices across diverse types of securities and upon fears that their strategies and holdings were sub-optimal, many withdrew completely. And so, ladies and gents, we had a liquidity crunch on our hands and a flash crash. Some will dub HFT’s a major concern, and perhaps rightly so but they were selling just as everyone else was. And so the blame game goes on with everyone wondering whether measures have been put in place to avoid a repeat occurrence. That is really the need of the hour.

It’s almost as if everything has gone a bit mental of late as corporate bonds have started to fly high and everyone is cashing in. Of late, tech giant IBM has sold off $1.5 billion worth of three years bonds that had a yield as low as 1%; and it flew off the shelves (so to speak) like hotcakes! It is almost a bemused sense of fascination with which onlookers are taking in this flight of money to and fro. An outpouring of cash (no matter which asset class it is surging into) happens to run a very predictable course as prices first start to inflate before luring new buyers that want to hop onto the bandwagon. It is a long drawn out process that goes on and on until the bubble bursts and prices tail off, sending investors scurrying for the exits while screaming in horror.

This can be seen in the way the tech bubble and the real estate bubble burst over the last decade and the latter was so bad as to send shockwaves throughout the world. If historical performance is any indicator of future performance, the bond markets might just be in for a very nasty shock sooner or later. Chasing lower yields is a bit of a wild goose chase at times that can end badly, although it won’t quite be the bloodbath the financial crisis was. If an economic compass did exist, its needle would be spinning wildly right now, trying to make sense of all the chaos that exists. A high flying bond market is the government’s determined response to the weak economic situation and if you do believe there’s a sucker born every minute, you might well be right if the bond market is taken to the cleaners.

It is, however, unlikely that this will happen in the short run. If the American example is taken, there is a strong commitment from Bernanke and the Federal Reserve to prop up the economy and rebuild a failed institution and for this reason low bond yields could be the permanent thing rather than something more ephemeral.

Or, you could look at it as an optimist and say that this is a half-full glass and not one that is half-empty. There’s a big chance that you will hit the big time and that you’ll be able to make a giant chunk of change for yourself. The odds are favoring an improvement in our lot if we play our cards right and yet a whole truckload of us are being pessimistic about our outlook, believing that the inevitable slide will be never-ending. Yes, we are in the midst of a depression but that does not mean that we will never rebound from it. So why does everyone believe that we’re headed for economic ruination?

Think for a moment that your worst fears were to come true and Starbucks were indeed to shut down or, worse still, that the fears we all had prior to the 2009 rebound are still valid. This is to say that

• Government’s piled on the debt to delay the inevitable
• This debt then papered over the cracks and saw markets strengthen
• These measures proved that flaws in the recovery theory held true.

We are not for a minute saying that we believe this to be true in the slightest. But it is possible that it could be true, to bring back the example of Russian Roulette. There are those that feel a lot of those chambers have a shot to the mind that is more than they can take and this breeds an excessive fear that the bottom is going to fall out of the market. It is this sentiment more than anything that is pushing the world economy down even if those fears prove eventually to be completely unfounded. Keep your finger on the pulse and an eye open, because its very possible that an upswing in the economy might be here sooner than you know it and you should be there to capitalize on it when it arrives.

No, I ain’t deviating from the topic. We all do know much about investment and various instruments available in the market. However, one of the least known investment products is an Exchange-Traded Fund. When I talk to people about it, after listening for a while, they ask me, ‘What’s an ETF?’ But I know my readers are not ignorant. So, I would directly start with how you can earn money buying this investment product.

1.    Avoid Commissions

Since ETF”s are traded on major stock exchanges, you have to pay brokerage for your purchases. However, if you intend to have them in your portfolio for long term, it’s not really advisable to pay commissions. There are some funds available in the market that do not ask for any commissions. You broker can probably help you out with this. If no, start reading the fine print.

2.    Avoid Expense Fees

Many ETF’s requires you to pay extra amount as ‘expense fee’, which you must, at any cost, avoid paying. If a fund charges you too much, simply don’t purchase them. It can save you a lot over time.

3.    Don’t Bother about the News

Similar to a stock price, you ETF price would go up and down. However, you must not respond to such movements in any way except for ignoring it. If you are a long term investor, you must not bother about the changes taking place every hour. Checking it once a day is enough.

4.    Diversification

make sure you don’t have more than couple of EFT’s in each sector.

5.    Don’t Become a Short Term Trader

If you want to, don’t do it with your long term investment. Set aside some amount to play small games every day until you become perfect at it (which no one has ever become). If possible, let the trading to the traders.

As long as you invest correctly, ETF’s too are one of the best investment available today. Putting a part of your investment money would help you generate greater returns, along with diversifying your portfolio.

Though sometimes it seems the world is having an overdose of precious metal promotion, they are promoting the right instrument. Stocks all over the world were plunging at 52-week low (some 7 to 8-year low), gold produced a ravishing 300% return on investment. What else can you expect from an investment?

Is there any risk in owing gold?

Since past couple of decades, gold and silver are known to be excellent hedges against inflation. They provide high returns especially when stocks and other investments are striving to gain handful of benefits. It is, however, quite crucial to realize that the gold market is very volatile, if you intend to trade on daily basis.

Due to the volatility in daily market, most investors prefer to preserve their holdings for a period of 10-20 years, which will definitely provide good returns and hedge them against any economical risk. It is one the best retirement investment. Generally, the precious metal market varies inversely with stock market. When stock market rises, gold price will witness a plunge and vice versa. But over a very long period of time, these variations don’t matter much.

Buying gold isn’t difficult. And unlike stock, you can possess tangible asset (bullion, gold, coins, etc). If, however, it seems quite risky to stock gold at home, you can invest money in exchange traded funds or mutual funds.

Both these forms of possession have their set of advantages. People who intent to invest huge amount in gold usually opts to possess it physically as it would save him money charged as annual fees by mutual fund companies. On the other hand, small investors have to bear the expenses paid to securely stash gold. So, they go for funds instead.

Though the debate of ‘how much gold should be purchased’ is quite enduring and will reap varied answers, I would suggest 15-30% of your overall investment.

As if, in any sector and field of life, to have the scientific knowledge is must. You can never go further without gathering detailed information about the particular field. Especially, if it the market trend, it’s impossible to deal successfully without any knowledge.

Especially investing n the invest funds is too difficult process and it is required to have the upto date knowledge of the share company in which we are dealing, the future trend and also the growth expectation of the company. Also people say that the easiest way to invest in Stocks is to invest in mutual funds as you don’t need to study the companies and also you can never beat the trend of market and Mutual Funds are just the safest games to play with your desired money.

But there are hundreds of people who have the solution of the problem of beating the market trend and to get aware of the bullishness of the market. But for even them, there are some simplified rules ad basics which they follow religiously.

Invest Alternatively

The safest mantra of investing in the stocks is that to invest in the alternative funds, not to focus on just one. This will reduce the risk of destroying the entire investment with the downfall of one company. So, invest diversely to earn widely!!

Invest in innovative funds

People generally follow the trend and invest in those funds that are invested by everyone, so if one person is losing the amount, every one is doing so!! Rather invest in some of the different assured shares that are not known much by everyone and are emerging shares. So, you’ll get the benefit of beating the heat as the emerging funds tend to grow. For example, the Catastrophe is the company that deal with the insurance companies and help them to provide safety from the natural calamities and accidents.
They are the stocks that can pay you well. Also there are some of the hedge funds that are dealing with the mortgage funds of Banks that are fully or partially unpaid and they buy them in bulk and at the lowest and unbelievable prices. Even they can give you a good return on your investment. So, also they are the better investing options. Read more on stock market.

Take simpler risk

Risk is always a part of business and it must be the part of financial life. The thumb rule says that without taking risk, you can’t make the calculative profits. So, start taking risk, but just make sure that those risks shouldn’t be too riskier.

Try out these simpler tips and see the change. You’ll not only feel the heat of the market, you’ll beat the market!!