Rising Tensions, What Does It Mean for Investors?

Unfortunately, our forecast over the past couple of years for increased geopolitical tensions is coming true. We have stated a number of times that when ruling governments are in dire financial shape, the politicians realize that they have no solution to solve the financial problems, so they often look for diversions to take the focus away from them.
Certainly Russian President Putin has been a master of these diversions, first invading Ukraine & now with his move in Syria. We are also very suspicious of why Turkey shot down a lone Russian jet. Seriously, there is no way they would have thought that if Russia wanted to attack them, Russia would only send one jet.
Turkey is in horrible shape financially, so we have to wonder if they want to use this incident to unite the people against Russia & divert their attention away from their domestic problems. As more & more countries fall deeper in debt, watch for more of these provocations against other foreign countries.
These polit…

What Is an Investment?

One of the reasons many people fail, even very woefully, in the game of investing is that they play it without understanding the rules that regulate it. It is an obvious truth that you cannot win a game if you violate its rules. However, you must know the rules before you will be able to avoid violating them. Another reason people fail in investing is that they play the game without understanding what it is all about. This is why it is important to unmask the meaning of the term, 'investment'. What is an investment? An investment is an income-generating valuable. It is very important that you take note of every word in the definition because they are important in understanding the real meaning of investment.
From the definition above, there are two key features of an investment. Every possession, belonging or property (of yours) must satisfy both conditions before it can qualify to become (or be called) an investment. Otherwise, it will be something other than an investment. Th…

An Automated Investment Advisor Helps Maintain Investment Goals

The advent of the automated investment advisor has made establishing a long-term financial plan easier and more accessible to a growing number of investors who want to have the ability of setting a program and staying on track. These systems can offer the user tools and advice that can let both the experienced investor and the novice maximize the opportunities that exist both in the short term and for future goals.

Providing professional guidance, sophisticated trading tools, and projections, these computerized systems-often known as "robo-advisors"- can be fully programmable to conduct trades or changes in the portfolio. Some variations allow for the user to "self-execute" trades or to have a human advisor guide the transactions.

How These Systems Function

One question that potential customers ask is: How does an automated investment advisor work? To begin with, these programs utilize mathematical algorithms to help establish a portfolio tailored to meet certain levels of risk, established by the user. Two of the most popular formulas are Modern Portfolio Theory (MPT) and the Monte Carlo Simulation.

The Modern Portfolio Theory has become very popular with the do-it-yourself investor. This allows an individual to construct a portfolio based on asset allocation and diversification that is centered on the responses to questions concerning risk tolerance. Asset allocation can be broadly defined as a strategy that balances risk and reward by adjusting percentages of various assets to meet the goals and tolerance of the investor.

The Monte Carlo Simulation is a mathematical technique that can forecast the probabilities by running a number of simulations with different variables. By factoring in various scenarios based on types of investments, risk tolerance, etc. an individual can see the likelihood of how a particular strategy will work to achieving the long term goals.

The Advantages Of Automation

Using an automated investment advisor program can offer a number of attractive advantages that should be considered:

Lower Overall Fees - Computerization helps reduce the fees that traditional advisory firms would charge for the same kinds of services. Lower costs make utilizing these services more attractive to customers who are seeking to have guidance but want to reduce the expenditure of getting such advice.

Creating A Systematic Approach - Automation makes it easier for the investors-especially those who are inexperienced - to develop a long term strategy and adhere to it. Having investing tools and money management options make obtaining financial goals that much easier.

Offering Products That Mirror Traditional Financial Planning And Portfolio Management - Many of these programs offer a combination of automated tools and real personal advisory options. This combination of human and machine guidance may well replace the more traditional models of investment counseling in the future with a much more customizable and affordable options.

Like other computer-based programs, one size certainly does not fit all. Researching the options and measuring them against personal goals and experience is the best way to take advantage of these new tools for building a financial future.

writer and blogger, founder of investings .

جديد قسم : Investment

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