I Could Spoil You

Heard about the Child Trust Fund? remarkably few seem to be aware of the fact that all newborn children are given a free £250 voucher from the State to place in a Child Trust Fund. Your son or daughter’s voucher can be invested in any one of three sorts of CTF account, Stakeholder - a shares-based account thatswitches into cash, a savings account or a shares account. It is an excellent way to prepare for the future needs of a child

Scottish Friendly is a licensed provider of the Child Trust Fund The Government is eager for people to have access to Stakeholder accounts and this is the sort of account that we are offering. This means that:

Investments are saved into Scottish Friendly’s Managed Growth Fund, which intends to provide strong growth potential

It invests in part in shares to make the most of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
decrease as well as go up whereas capital would be protected in a deposit account)

It is available with a low ‘Stakeholder’ funds charge of only 1.5 percent every year

At age 18 the young person will get a lump sum, totally free of Capital Gains and Income Tax under prevailing law

It is affordable - extra payments can be put in the account from as little as £10

An attractive feature of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - may add to the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money cannot be withdrawn).

Put succinctly our Stakeholder account offers a good balance between possible high returns and a reduced level of risk. There’s also the additional assurance that our account meets with the Government’s stakeholder criteria. Nonetheless this does not mean that returns are assured or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is invested) can decrease as well as rise and would not be guaranteed.

Only infants born on or after 1st September 2002 are permitted to start up a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not qualified you could contemplate saving for them with a Child Bond - it’s a tax-free savings plan intended for long-term growth.

It is undoubtedly the case that investing for your son is a sound means of preparing for tomorrow.

The greatest stock market myth is the idea that investing in stocks is a form of gambling!

The financial markets are often compared to a casino. Put some money on X stock and you might as well be playing craps!

If that’s your impression, and it’s keeping you out of the markets, consider this:
If investing is organized gambling, it’s one of the rare kinds where the odds are stacked in your favor!

Why is that?

Corporate profits are the key to understanding the investor’s edge. By buying a share of stock gives its holder an ownership claim on that company’s earnings. If those earnings go up, then the stock price will usually rise as well. Makes sense, doesn’t it? Ownership of a company that has higher earnings should be worth more than ownership of a company that earns less.

An investment in the stock market comes down to this: It’s a “bet” that corporate profits will rise! Based on the historical evidence, it’s a pretty good wager! Not a guarantee by any means, but one where you hold house odds.

Still not convinced?

Maybe you’re saying to yourself that just because corporate earnings rise in most years doesn’t mean there aren’t years in which they fall. True enough. But over the last 200 years, business profits have increased in far more years than they have decreased. And that’s because the economies in the developed countries have expanded at a fairly steady pace with only several occasional setbacks from recessions.

And that means stockholders with a good mix of companies are more likely than not to make money!

Gambling just transfers money from a loser to a winner because it produces nothing … excluding the severe doses of adrenaline!

On the other hand, investing increases overall wealth because the capital invested in stocks provides the initial funding for firms, which exist for the purpose to producing goods and services.

Copyright © 2005 I.E.C. Haramis

haramis@greekshares.com

http://www.greekshares.com

Ioannis - Evangelos C. Haramis was born in Greece and he studied in Greece, USA and in Belgium. He has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank.

When you invest, it simply means that you are putting your funds in products, in this case short-term savings vehicles, which will allow you to reap high financial rewards.

Here is a list of the more common short term savings products you should consider investing in.

Savings account: If you are getting your feet wet for the first time in investing, you should consider this, as it is the most popular banking product people use. The interest rates of a traditional savings account vary between 2.0% to 4.0. This is better than keeping them at home. Investing in a savings account is relatively risk free, as these products are protected by the federal deposit insurance. Generally, the government protects the money you have on deposit to a limit of $100,000. Some questions you’ll need to ask: What is the interest rate on your savings? Can the bank change the rate after you’ve opened the account? Will you pay a flat monthly fee? What if the balance drops? Is the ATM service free? Are the fees reduced or waived if you directly deposit your paycheck or government payments?

Money market funds: Money market funds are a specialized type of mutual fund that invests in extremely short-term bonds. Its shares are designed to be worth $1 at all times. It’s a better product for investing in than the traditional savings account, with regards to the interest rate it will give you. But has a lower rate than certificates of deposit. However, the virtue of investing in the money market fund is that, while the interest rates may be lower, you can withdraw your funds when you see fit.

Certificate of deposit (CD): When you purchase a certificate of deposit, you are lending the bank use of your money, for a specific amount of time. In investing your funds, you’re guaranteed annual interest payments. Investing in CD is relatively low risk, for it is FDIC insured for up to $100,000. If you are investing $200,000.00 buy two CDs. Before investing your money, shop around for the best bank interest rates. Consider the fact that by purchasing CDs, you are investing funds that will stay locked up for a specific period of time. Can you afford to have these funds locked up? For if you withdraw the funds before this matures, you’ll pay steep penalties. If you are conservative about investing, this is a good place to start.

Financial experts recommend investing your funds into these short term savings vehicles, if you are looking to earn some interest in minimal risk products.

Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, consolidation and financial planning advice that you can research in your pajamas on his website.

At some time in your life you have been on a river in a canoe and hopefully you had a paddle. You know about being up the creek without one.

You quickly learned that paddling up stream is much harder than paddling down stream. The lesson of going with the flow can be applied to many aspects of life and especially to the stock market. In the creek it is easy to know which way the current is flowing, but in the market it is much more difficult. At least that is what Wall Street wants you to think.

On the river there are markers and navigations buoys to help you with your passage, but in the money world there are few such true indicators. Actually it is very easy to determine the flow of funds in the market. Standing on the shore are people (brokers) shouting to go to the right and another next to him screaming to go to the left. “Buy, buy, buy”. Very few of them know which way the current is headed. You have to figure this out yourself.

Fundamental analysis is excellent, but it is very poor to let you know when and where to paddle (put you money). There are many technical tools available, but these can be difficult to master for many people and few brokers know or care to learn them. However, there is one very simple method that does work.

That method is too simple for brokers who want you to think that you need their “expertise”. They sure don’t want you to find out as you won’t have to pay them commissions any more. The paddle you need to have to propel in the right direction is called the 200-day Moving Average Paddle and you can get it free if you know where to look. You can make this yourself, but if you have a computer just go to the web site www.bigcharts.com and click on their Interactive chart box and they will do all the work for you. You can do this at the library of you don’t have a computer at home.

Using an index such as the SP500 you easily see that when the price (your canoe) is above the 200 line (the current of the river) you should be a buyer of stocks and mutual funds and when the SP500 price is below the 200 line you should be in a money market (even if it only pays 1%). You don’t want to be under water. This is a simple way to see the direction the market is flowing and will keep you from losing money when the market starts down.

No one knows when the current will change. And don’t try to guess. Let the river (market) tell you the direction of flow.

Get yourself one of those good paddles and learn to steer your own canoe.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy
It!” has helped thousands of people make money
and keep their profits with his simple 2-step
method. Read the first chapter at
http://www.mutualfundmagic.com
and discover why he’s the man that Wall Street
does not want you to know.

Copyright 2005