investment principles




	Basic Investment Principles Before you invest, you should know and understand as much as possible about investing. Everything in this site is critical. Although this site covers many of the basic principles that will help keep you out of trouble, it is not complete. Attend one of our seminars. There is always more to learn. Saving and investment program. Saving a portion of your income. We suggest 20% or more. Emergency fund. 1. Liquidity – how easy is it to convert your investment to cash? A savings account is highly liquid. The stock market is also a liquid investment. Limited partnerships, however, are generally very unliquid. 2. Risk – what is the risk of loss to the money you invest? Treasury bills are extremely safe because they are backed by the US Governement. You will not lose the principle. Saving accounts in banks are also very safe because they are by the FDIC. If the bank fails your money is insured. Stocks carry more risk because the return of the principle is not quaranteed. You can lose money in the stock market. Inflation risk, market risk etc. 3. Return – what's the expected return on you investment. A savings account will be easy to determine. A stock will vary. Greed had lead many an investor astray. Over the long run the return on an investment tends to level out. For example the stock market may be up 20% in one year and down the next. Over the long-run the stock market may average about 10 to 11% return. 4. Age – age truly matters. The older you get the less time you have for you money to work and to grow. As you get older you also have less time to replace any money you lose by investing in risky ventures. Older individuals need to be less aggressive and cautious. Young individuals investing for retirement can afford to take more risk and they should. Go to page 3 - Investment Strategies Investment Vehicles Investment Strategies Cautions Investment Principles Be a Wise Investor! Common Investor Mistakes Institute for Financial Integrity, Inc. PO Box 2543 Palm Beach, FL 33480 (561) 627-2345 Back to: Previous Page Financial Planning Home Copyright 2005 – All rights reserved. This site may not be copied or reproduced in any manner without written permission. Pages may be printed for personal use only.	Major investment mistakes 1. Placing all your eggs in one basket 2. Relying on sales solicitations or hot tips 3. Paying high fees and commissions 4. Jumping in and out of the market 5. Not understanding what you are investing in 6. Getting into the wrong type of investment Take a long-term approach when able. Get rich slowly can be ignorant unless... A fool and his money are quickly parted. Many investment authorities etc. have never lived through a down market. It's easy to look good in todays's m;arket. Will it change? The market is overvalued.Caution: before you invest please read! Click here Free Email Newsletter Stay abreast of the market and investing with our free email newsletter. IFI Investment Seminar Before investing it may be wise to attend one of our investment seminars and learn the basic steps and principles as well as some of the pitfalls involved in the investment decision process. Economic Outlook The economy is a major factor to conscider before investing. Our newsletters will keep you informed. Mutual Funds A great place to investment money for both beginning and experienced investores. Professional management and diversification take the guess work and fear out of investing. There are several cautions. Real Estate Investing More millionaires made their money in realestate than the stock market. Real estate is a faster way to obtain wealth and offers more profit potential. Owning a Business Owing your own business is a way to reach unlimited potential. A quick way to accumulate wealth.