REPOST: The best ways to invest money

There is no single formula to achieve the best results from any investment endeavor. However, according to Bankrate, the following are the key aspects that can potentially lead you to a sound investing life:

You won’t have to look far when seeking advice on ways to invest money.

There’s the cancer cure stock your cousin loves, the wind farm in Kazakhstan that’ll double your money in a month, the Kickstarter genius who’s definitely the next Steve Jobs. Getting rich is so exciting!

Sorry to say, but in truth the best ways to invest money are usually the most boring.

Investment strategies: An overview

Investing is earning money without going in to work every day; your money does the work for you. But you do pay a price for being able to kick back and watch your bank account grow—and that price is risk.

All but the most conservative forms of investing involve taking some risk, since you could actually lose your money. In fact the riskier the investment the more you stand to gain, which is only fair.

Fortunately, the best ways to invest money include ways to mitigate your risk, mainly by considering two important variables: horizon and diversification.

Understanding your investment horizon

How you invest depends on what you’re saving for. Most people have multiple investment goals, such as buying a home, paying for kids’ college and funding retirement. Each goal has its own horizon.

  • For long-term goals like retirement (or a college fund for a newborn), the best investment will be in stocks, which have the most potential to grow. Of course stock values can also fall, sometimes at heart-stopping rates—but time is on your side because you can “ride out” the inevitable downturns. There is almost no chance that a 40-year investment in the stock market will lose money.
  • By contrast, short-term goals (like a house down payment in four years) should be parked in safe havens like money market accounts. That’s because if the stock market tanks, you won’t have enough time to make your money back.
  • For intermediate goals of a decade or so, a mix of stocks and U.S. government bonds, which are safer than stocks but return more than simple savings accounts, are best. How you arrange that mix will depend on your tolerance for risk.

Of course, as time passes your horizons move closer. As you near retirement you will want to move money out of stocks and into safer investments. Some investment target funds do this for you automatically.

Embracing diversity

It’s one thing to understand how much of your investment should be allocated to stocks. You also need to spread your stock investments among a lot of companies. That way, a downturn in one company or sector won’t wipe you out. If you’re just starting out, you should be investing in mutual funds that put your money into a diverse spectrum of companies.

Keep it simple

If you’re investing for retirement through your employer’s 401(k), you’ll likely be presented with several plans tailored to different risk tolerances. In some cases they do the work for you—including re-balancing your portfolio every year to keep it on track, and adjusting your mix of stocks and bonds as you get older. Likewise, 529 plans for college savings will consider your investment horizon and risk tolerance when allocating funds.

Pay attention to fees charged by investment plans. One percent might seem small but will add up over the years. Your best bet for low fees (0.5 percent or less) and good performance is index funds, which track a particular group of companies like the S&P 500. And when you hear about that hot stock tip, plug your ears and remember that when it comes to investing, boring is best.

Continue reading HERE.

REPOST: Euro zone growth revised up to highest rate in a year in first quarter

The Eurozone economic growth in the first quarter of 2017 reached its highest rate in more than a year, according to a revised reading by the EU statistics agency, Eurostat. Reuters has the full story:

Workers are seen in silhouette as they construct scaffolding in the port of Cannes, France, April 4, 2016. REUTERS/Eric Gaillard


The euro zone economy grew by more than previously estimated in the first quarter and at its fastest rate in a year, EU statistics agency Eurostat said on Thursday, ahead of a European Central Bank meeting likely to keep policy unchanged.

Eurostat said the 19-country euro zone expanded by 0.6 percent quarter-on-quarter and by 1.9 percent year-on-year. That compared with earlier estimates of 0.5 and 1.7 percent respectively.

On an annualized basis, the euro zone economy was expanding at a rate of 2.3 percent in the Jan-March period, far outstripping the 1.2 percent rate of the United States.

Solid economy growth but subdued inflation has left the ECB in a quandary. ECB President Mario Draghi is yet to be convinced that a recent rebound of inflation is durable because wage growth remains sluggish.

The ECB is widely expected to keep policy unchanged on Thursday, including its 2.3 trillion euro ($2.6 trillion) bond-buying program and sub-zero interest rates, despite resistance from cash-rich Germany.

However, the robust growth could lead the ECB to remove a reference to “downside risks” in its statement.

Eurostat said household consumption contributed 0.2 percentage points and gross fixed capital formation 0.3 points and government consumption 0.1 points to the first-quarter growth figure. The contributions of external trade and inventories was neutral.

Miss Universe and Why Owning Up to Your Mistakes Can Make You a Better Investor


Beauty pageants don’t usually teach us some really heavy life lessons. But this year, at the 2015 Miss Universe Pageant, the audience witnessed something extraordinary that kept people talking about the event long after it was over.

Miss Universe has been running since 1952 as one of the most popular beauty pageants held internationally each year. Donald Trump used to co-own the Miss Universe Organization with NBC. However early this year, NBC boycotted the pageant after Donald Trump made some inflammatory statements about illegal aliens from Mexico. Trump bought the entire stock of Miss Universe Organization and later on sold it to WWE/IMG. Although not as popular in most western countries, the Miss Universe Pageant is a big affair for third world countries like Colombia and the Philippines.

So what was so special about this year’s Miss Universe? Well after the contestants were finally whittled down to two – Miss Colombia and Miss Philippines – the host, Steve Harvey, was supposed to finally announce the winner. But of all the horrible mistakes one can make, Steve Hervey, announced the wrong winner. So here was Miss Colombia, the Miss Universe sash and crown upon her, tears of joy streaming down her eyes, taking her first walk as Miss Universe 2015, waving to the crowd and the crowd going wild. In South America, the Colombians are already shouting on the rooftops, lighting fireworks and cheering for joy over their national victory.

Then, three minutes into all that, Steve Harvey goes back on the stage in Las Vegas and says to the entire audience that he made a terrible, terrible mistake. Miss Colombia was only the first runner up. Miss Philippines was actually the winner. The most awkward, unbelievable situation then befalls Miss Colombia. The crown had to be taken from her and transferred to Miss Philippines’ head. It was a live telecast via satellite so everything that went wrong was witnessed by the entire world, or should we say “universe.”

This is where the lesson comes in. Steve Harvey, as stupid as his mistake may have been, was a big man that night. It takes a big man to admit you’re wrong. And Steve Harvey did that in front of an arena, and the whole world for that, humiliating himself. When he admitted his mistake, he faced the possibility of ending his career, earning the ire of the world (particularly the Colombians), and hurting the feelings and embarrassing such a beautiful girl as Miss Colombia. He still did it though.

Are you like that when your investments go wrong? Different investors react in different ways when a stock they buy, for example, fails to perform as they expected. Some find it easier than others to admit that they made a mistake. The wise investors cut their losses ruthlessly, regardless of the initial pain. It hurts a lot when a paper loss becomes a realized loss. But after that, there’s also a feeling of relief and release. Release from worrying about your investment and wondering whether your loss will get even bigger. These investor types know how to accept the truth and move on.

Some investor types, however, can’t seem to sell their losing stocks. Some seem to be “in love” with their investment, thinking that they made the right analysis and chose the best – regardless of actual performance. They continue hoping that the price will rise in the end. Days turn into years and the investment stays stuck in their portfolio. These investors continue to deceive themselves and refuse to face the truth.

When Steve Harvey was going back up on stage to rectify his mistake, he seemed to walk around in a circle at first. He looked awfully nervous and hesitant, like he was trying to force himself to do something he found humiliating. But he still did it, however painful it was for him and everyone else. After he made the truth clear, and righted what he did wrong, there seemed to be an expression of relief that washed over his face. He got it over with. He did what he had to do.

Sensing that the audience was still confused and in shock, especially Miss Colombia and Miss Philippines, Steve Harvey even went further to tell the crowd that he was taking full responsibility for the awful thing that took place. That’s a brave man.

As investors, we also need to take full responsibility for our investment decisions. Don’t blame the underwriter or the research analyst or Vladimir Putin. Own up to your investment mistakes and learn from them. That’s the only way you can move on and shift to a better investment that might even help offset your losses. Win some, lose some. Cutting a loss means admitting you were wrong and owning up to your mistake.