Buying Municipal Bonds: Do You Understand the Risk?

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One of the more popular investment strategies during tough economic times is to turn to bonds.

Bonds are considered relatively safe, when you invest in entities that are highly rated and stable.  Since you are supposed to get your principal back (barring a default), plus a small amount of interest, many people like the idea of bonds.

A type of bond that has seen an increase in popularity recently is the municipal bond.

Municipal bonds are issued by localities.  They often come with higher yields than Treasury securities and even many corporate bonds.  On top of that, there are tax advantages to investing in municipal bonds.

But before you decide to take the plunge with municipal bonds, make sure that you understand how they work, and the types of risks involved.

How Do Municipal Bonds Work?

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How to Invest in Real Estate Without Speculating

Let’s get one thing straight: the kind of real estate investing you often see on the television flipping shows is not true real estate investing.

Sure, it involves putting money into a deal and expecting to make something back.  And yes – sometimes these individuals make incredible profits.

However, the kind of real estate seen on the flipping shows is more closely related to the buy-wholesale, sell-retail model of a clothing store at your local mall than it does to real estate investing.

As Glen mentioned in his popular article, Seven Ways to Get Rich Quick, many people have tried to “get rich quick” by buying real estate only to lose it all when the market dropped out.

Flipping houses, as well as most development, raw land purchases, and betting all your chips on “black” is not investing but rather “speculation.”

Speculation involves taking a high risk with the potential of earning a high reward, often in a short period of time.  Investing involves taking calculated but dependable risks with the assumption of earning solid returns.

It’s important that for you, as someone looking to grow their financial position in life, to make that distinction in your mind now, rather than later.

Now, don’t get me wrong: house flipping can be fun, profitable, and entertaining.

However, flipping houses involves heavy risk with a smaller hope of return.  It’s a business, at best, and while it can be exciting and profitable if done correctly, it’s not what I want to talk about today.  Millionaires are generally not made through speculation (at least not for the long haul.)

Let’s talk a bit about what true real estate investing looks like, without the speculation added.

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What You Must Consider Before Opening a Brokerage Account

Picking stocks

Shopping for a brokerage account is very unlike choosing a bank.

People often choose a bank based primarily on a convenient location.  Since banks are tightly regulated, and all provide essentially the same services, convenience can be the deciding factor.

There’s a lot more to consider when opening a brokerage account however, since the transactions you enter into with investments will be both more complicated and more diverse.

Consider the Following When Opening a Brokerage Account

Investment choices

How important investment choice is to you will depend on what you intend to do with the account.

For the most part, you’ll want a brokerage account that has the widest investment choices available.  That will include stocks – both foreign and domestic – mutual funds, ETF’s, options, REITs, bonds and other debt securities, and even commodities.  You’ll also want the investment choices within each asset class to also be as wide as possible.

But if you plan to maintain the account for a very specific purpose, you may be more interested in a specialized account.
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What Are Dividend Aristocrats and What You Need to Know About Them

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If you have been looking at dividend investing as an income generating option you have probably run across the term “dividend aristocrat“.

The stocks carry a unique title, but often it is not explained as to what exactly a dividend aristocrat is.

Should this be a type of stock that a dividend investor should target? Or do you want to avoid Dividend Aristocrats?

What is a Dividend Aristocrat Stock?

What are dividend aristocrat stocks?

A dividend aristocrat stock is a stock that has raised its dividend to shareholders for a minimum of 25 years straight.  There are a limited number of stocks that make this achievement over a long period of time.

To consistently raise your dividend to investors every year for decades is a solid commitment to returning value to your shareholders.

Why Invest in Dividend Aristocrats?

It is great to get higher dividends as an investor, but is that the only reason to invest in these special stocks?
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Why You Should Avoid Penny Stocks

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Have you ever received a random email touting the benefits of a company or its recent business success?

How many times have you been on a financial forum and seen some random posts about a stock that is “poised to see explosive growth” or some other crazy claim?

Or have you ever used a stock screener to find an attractive stock, but were shocked to see the share price was only 10 cents?

Whether you knew it or not you were being prospected for penny stocks.  These dangerous stocks are deployed by scammers to steal money from you, but can be confusing to understand.

Avoid Penny Stock Scams

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Investment Strategies During a Bear Market

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As an investor, you might have heard of a bear market.

This is actually a market condition wherein the prices of securities are falling.  There is widespread pessimism within investors about the market.  Because of this negative feeling, investors would continue to sell due to the anticipation of losses.

This only leads to growing pessimism.

Despite this fact, there are still ways to make money from a bear market; or at the very least not to lose money from investments.

Before going into that, you have to completely understand what a bear market really is.

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5 Tips for Increasing Your Investment Returns

We all want to see better returns on our investments.

Whether you are building an income portfolio and want to, eventually, make it work for you in terms of viable revenue, or whether you are just hoping for decent returns for the long-term, what you do now can make a difference later.

If you want to see better investment returns, here are some things to keep in mind to boost returns over time:

1. Don’t Give in to Knee Jerk Reactions

One of the worst things you can do for your investment portfolio is to give in to knee jerk reactions.

It’s easy to let panic drive you into abandoning some part of your investment strategy.  However, this can be a terrible idea.
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