Max Neale | Sanford, FL | 407-555-5555
When it comes to the world of investing, three words come to mind: overwhelming, intimidating, and scary. For us "regular Joes," the questions seem never-ending. Here at Neale Investments we are here to help you
Our Strategy here at Neale Investments:
"Keep U.S. Stocks as your core holding, Spread Your Money Widely,
Hold Bonds for Safety, Not for Income"
Before we start there are several factors that should be considered before investing into companies or industries: How much are you willing to lose? How much growth are you looking for? How long is you'r timescale for investment? Are you prepared for minimum to major loss if your investment goes under?
Investing money into something is like gambling, there is a risk (risk is defined by a loss of capitol and/or under-performance relative to expectations), whether large or small. In turn, you expect a return, which compensates you for bearing this risk. In theory the higher the risk, the more can receive. Because of this we have categorized the amount of risk that is partaken in these investments by three levels: High, Medium, and Low.
High Level Risk (H)
If you'r looking to go big or go home high risk investments are the right choice for you. Big payouts or big losses come with investing in these stocks. A portfolio dominated by equities. Considerable exposure to emerging markets. Possible use of geared investments. Significant use of gearing. Heavy use of emerging markets equities and smaller company equities from Penny stocks and Junk Bonds.
Medium Level Risk (M)
For those that are looking to make money and are able to take some risk's the medium level is for you. Around 65% of the portfolio could be in equities, property and alternatives. The balance should be in lower risk asset classes like cash and fixed interest. When investing in medium you should be thinking I could cope with a loss of 20 to 30% in a really bad year. These things happen. Long term I should make a profit.
Low Level Risk (L)
Want to play it safe? Low risk investments save money and can give some in return. These investments will not likely give you a large sum of money in the future but it is a good start for the casual investor. Examples of low risk options: Capital Protected Funds, Cash deposits, State Savings Products
(M-H) 401k Plans:
Defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax, depending on the options offered in the plan. The contributions go into a 401(k) account, with the employee often choosing the investments based on options provided under the plan
(L-M) Investment Bonds:
single premium life insurance policy. They have a small element of life insurance that is paid out after your death. However, it is an investment rather than insurance in the general sense.
(L-M) Corporate Bonds:
debt security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations.
(L) Municipal Bonds:
security issued by or on behalf of a local authority.
(L) Mutual Funds:
investment program funded by shareholders that trades in diversified holdings and is professionally managed.
(L) Certificates of Deposit:
certificate issued by a bank to a person depositing money for a specified length of time.
(H) Junk Bonds:
fixed-income instruments that carry a rating of 'BB' or lower by Standard & Poor's, or 'Ba' or below by Moody's. Junk bonds are so called because of their higher default risk in relation to investment-grade bonds.
(L-M) Government savings bonds:
debt securities issued by the U.S. Department of the Treasury to help pay for the U.S. government's borrowing needs. U.S. savings bonds are considered one of the safest investments because they are backed by the full faith and credit of the U.S.government
(L) Treasury notes:
note issued by the US Treasury for use as currency.
stocks and shares that carry no fixed interest.
(M) Treasury Bills:
short-dated government security, yielding no interest but issued at a discount on its redemption price.
(for educational use only, not an actual company)