It’s easy to lose sight after months or indeed years of trading the basic ground rules that separate sustainable and long term benefits out from potential short term catastrophes. But there is fit one often forgotten principle that we may well implicitly think of, but more explicit thought needs to be

This ‘investing fundamental’ is the theory of opportunity cost. It’s central to the field of economics, and essentially it’s the cost of not doing Y when you do X. In other words, the opportunity cost of an action is the cost of not doing a range of other actions, all of which might potentially offer more rewards.

Say you only have $10,000 to invest, and you choose to invest it all in a relatively secure bank savings account that gives a guaranteed 4% interest rate a year. On the surface, this seems like a great deal; you’re going to be earning $400 a year on it (not including inflation here). But there’s the hidden opportunity cost of not investing this $10,000 elsewhere.

For example, you might have the opportunity to invest through a means that offers a higher ROI (return on investment) denied because you have opted for the safe bank. By simply failing to acknowledge that every action you take has an opportunity cost attached to it, you could miss out on better investment opportunities.

One way to acknowledge whether an investment decision is the best decision you can make is to recognize the plethora of alternatives to your choice. By coming to terms with the wide choice you have, you should be able to assign advantages and disadvantages with all, and this will most usually concern the level of risk involved and whether or not you are want to take that risk.

While most countries on earth were experiencing melt down in 2008, our friends down under never really went into the recession cycle. Yes, during unprecedented global and economic strife, Australia stayed largely unaffected.

Sure, they had a slow down, but it did not qualify as a recession. The good news now for investors and traders is that, unlike many countries, the economy down under is growing!

The housing market in Australia was also largely untouched during the downturn. While the American housing market is trying to find its footing, Australian home prices are making new highs! This is causing consumers there to feel confident as their net worth is growing. Also, the population of Australia is growing at a record pace. This means the housing market looks good for possibly years to come!

The Australian government, like many around the world, provided a stimulus plan to help improve the economy. The big difference is that the government there could afford to do so.

Probably the most attractive aspect for investors is the trade that Australia has with Asia. The resource rich nation has long been a favorite supplier to nearby China. This and many other factors has investors strongly eyeing down under plays.

Here are a few simple ways for you to invest in Australia.

First a couple ETF plays:

Here is an ETF that invests in Australian currency:

CurrencyShares Australian Dollar Trust (FXA)

The Australian dollar has been one of the world’s strongest currencies lately.

Then we have this ETF that invests in many things Australian.

iShares MSCI Australia Index (EWA)

For more up-to-date information on this Fund see:

http://seekingalpha.com/symbol/ewa

You could also get a look at their holdings if you wanted to invest in individual companies.

Here is a possible over the counter play (at the time of this writing it is not very liquid, but that could soon change) on the Asciano Group. The company owns the largest railroad freight carrier in Australia. They transport commodities like iron and coal, as well as grain and construction material. While they had a tough year in 2008, there are good signs of strong growth for the firm.

ASCIANO GROUP (AANOF.PK)

I like AANOF up to $2 per share. I could see you fairly quickly doubling your money on this one. You can also buy the stock in Australia (ASX: AIO), but that could be more of a hassle.

Do you like energy? If so, one of the largest suppliers down under is actually and American company based in St. Louis, Missouri. Peabody Energy is also active in China and India.

Peabody Energy Corp. (BTU)

There you have it. My Top 4 plays from Down Under.

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Many people hold off on investing in anything because they feel like they need more current income, and they don’t want to have to wait years for an investment to pay off.

What is the solution if you are in that category? Income Investing. What exactly is income investing? You may have heard the term and wondered. After all, isn’t it the goal of any investor on any investment to turn a profit? Yes, it is. However, an income investor is looking for recurring income right now, and growth in the future too.

After the 2008-2009 housing bubble and market meltdown, many analysts were raving about the benefits of dividend paying stocks. Stocks that pay dividends are only one type of income investment. If your stock is providing you income (in the form of dividend payments), and the value of the stock is rising, you really have the best of both worlds. Long term capital gains and current income too!

This is exactly the type of thing investors are looking for when they invest in real estate. Property that is cash flowing now, and property value that is rising. Some tend to think you can only find that in real estate. However, there are a few safe ways to do that in the market too, without becoming a landlord!

We mentioned dividend paying stocks. My favorite play for current income is by investing in Master Limited Partnerships(MLPs). You can buy MLPs inside of your stock account with your favorite online discount broker. Although you buy them like a stock, they behave much differently. The main thing you should want to know is that they can provide Rock Solid income for you now, and future growth as well. In fact, many MLP values grew during the melt down, and increased the income payments too!

There are also a few Exchange Traded Funds that pay dividends. If I had to list the options mentioned here in order I would rate them as:

1) MLPs

2) ETFs that pay dividends

3) Dividend paying stocks

I’ve always felt that income paying investments are a better play than those that only provide future profit. After the horrible meltdown, many analysts suddenly agree!

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Will Rogers is quoted as saying “More important than the Return on your Investment is the Return of your Investment.”

To me that means you should diligently safeguard all your online investing account details and ensure you have a robust plan to achieve this.

The Bad Guys are Clever

The longer you’ve been on the internet the more it becomes an integral part of your life. It provides services that save you time, effort and hassle. It becomes your shopping plaza, your bank, your social calendar and many other useful things.

Of course to do this you have to ensure that the services you use are protected so that your details are known only to you. As you encounter more and more sites that require you to create an account with a user name and password the more you’re inclined to grow weary and end up by using the same details for each site you visit.

You convince yourself that life is easier that way. Unfortunately you are playing right into the hands of online crooks who use a myriad of ways to entice you to give up your information. You may even be caught out without realising it until its too late and the damage is done.

And of course there’s always the chance that hackers find there way into a database where your details are stored. Without you even knowing it your details are compromised.

Trust Nobody

So what should you do to make sure that you keep your account details secure? Firstly always be suspicious especially when visiting a new site on the internet.

If you have accounts at several online investing programmes make sure that the details you use for username and password are always unique. This way if your information is somehow compromised on one site then it won’t be able to be used against you on others.

Don’t forget that we humans are creatures of habit so if a crook finds your details on one online investment programme they are likely to test other similar programmes as there is a good chance you might have invested there as well.

Simple Strategies to adopt

It should go without saying that whatever method you choose to create user names and passwords you need to keep a record.

SIDEBAR: If your memory is anything like mine you can’t remember where you parked the car half an hour ago let alone what user name and password you are using on a site you visited three months ago.

If you are just a little creative with user names you’ll not only create new ones but they can also be used to remember when you joined. Let’s assume your name is Mike and you join a new online investment programme on 01 December. To help you protect your details and at the same time remember when the account was created you could use a user name like mi01ke12 (I’m using the UK date format).

For passwords something more sophisticated is needed. This is where it pays to do some online research and find a software tool that does all the hard work for you. You must create strong unique passwords for any online investment programme you belong to.

Free programmes that have received great reviews are:

1. Roboform
2. Keepass (the one I use)
3. Access Manager

I’d recommend you take each one for a test drive to see which one you feel most comfortable using.SIDEBAR: Don’t forget to change passwords regularly to provide an added degree of protection

Adopting these simple strategies will ensure that you can protect your valuable information easily and keep the bad guys at bay

Source:ezinearticles.com

People who invest their capital in a wide range of assets that together form a diversified portfolio do so for one reason, and its not to ‘beat the bank’.

The goal is to protect themselves against uncertainty and risk. Nobody knows when or where the next financial crisis or dramatic shift in markets or economic fortunes will happen. The vast weight of research to date shows that investing a portfolio across a diversified range of assets is the best way to mitigate risk, generate an income and to protect and grow capital over the longer term.

One stark lesson I have seen over the 20 years I have been in the investment sector is that uncertainty and risk can come from anywhere. Even investments that ‘look safe’ can get caught out.

The dramatic impact that the sharp decline in interest rates this year has had on short-term deposits is a classic example. Deposits are a low risk investment for sure, but for anyone that had all their capital invested in short-term deposits when interest rates fell from over 8% to just over 2% suffered a 75% decline in income, in a matter of months.If that’s not disastrous enough, over the past six months they have seen consumer price inflation rise 2% (goodbye interest return!) and house and shares prices inflate by 25% or more. In other words, this cash just lost 25% of its spending power in the housing and equity market.

Certainly, when you have money invested in shares and bonds there will be times when your portfolio underperforms bank deposits, market volatility is part of investing. If you don’t want volatility that’s fine, buy bank deposits, but you need to recognise this is not as safe as it seems – see the previous two paragraphs.

Certainly, investing involves risk. As soon as you invest into financial and asset markets such as bonds, shares and property, you are exposed to risk.For example, from October 2007 to March 2009 the New Zealand equity market fell 41% in the wake of the recession and global financial crisis.

If you held a portfolio of New Zealand shares it probably fell by a similar margin, perhaps a bit less if it was made up of blue chips, or a bit more if it was mainly smaller or riskier stocks. The point is; if the market falls, your portfolio will fall with it. Over this period, 94% of NZ stocks fell in value. That’s a very strong tide to swim against.

Being diversified into other markets didn’t help either with over 90% of global share markets fell in value over this period. The very few exceptions included ‘heavy-weight’ markets like Ghana, Tunisia, Jordan and Bangladesh.

It is clear then that during this tumultuous 17-month period, if you were invested in shares, there simply was nowhere to hide.

But since March 2009 the reverse has happened. Our market has rebounded by 30% and most other markets around the world have risen by a similar, or larger, amount. Almost every investor in shares should have seen their portfolios rise by 15% to 20% or more over this period as they hitched a ride with the market. In the bad times we can blame the market, in the good times it’s hats off to the market.

As the past couple of years have shown, investing is challenging. This is precisely why most people take a balanced approach to their portfolios; combining some low risk investments with some higher risk shares and property.

When it comes to investing it is very important to keep up with the Joneses, and the Joneses are not bank deposits, but the real world of ood, wine, travel, education, healthcare, housing, movies and power bills. The cost of living is a far better benchmark than ‘beating the bank’.

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When you first start actively investing online you probably don’t think that considering tax implications is that important. This would be a wrong assumption to make even at this early stage.

The whole idea of online investing is to earn a return that is significantly higher than you are able to achieve in standard investment offers. Add to this the potential to compound your earnings and it won’t take long to realise that your potential income could have tax implications in a relatively short period of time.

Couple this thinking with the recommendation to diversify your investments and the need for tax planning should become a no-brainer.

Now, I’m not suggesting here that you need to rush out and engage an expensive tax lawyer or the like, although a tax expert is probably a good idea when you have laid out your business strategy with a degree of thoroughness.

Your personal tax planning may be very simple in that you decide to declare any and all income on your investments and be happy to pay the necessary tax. For some people this solution will work as it removes any need to learn about other ways for efficient tax planning.

However, for others the thought that you’ve taken a risk to gain higher returns only for a large portion of it to be swallowed up by the taxman is not a situation that would be happy with. Let me make it clear that I am not advocating tax evasion here, that is illegal and should not be contemplated. Rather I’m recommending efficient tax planning that ensures you pay as little tax on your earnings as the law allow. If set up correctly you will pay very little tax and hence enjoy a greater portion of the rewards.

If you do decide to arrange a tax efficient way to invest online you should create the necessary legal structure sooner rather than later. It is not possible in an article like this to recommend any particular approach as each individual has different needs and tax regimes vary from country to country.

The first thing you should do is get advice from someone you trust who can recommend places to learn more. The internet provides a whole host of organisations that offer services for creating the right tax regime but you need to make sure that they are legitimate and can address your needs.

There is no reason why you as an individual should not enjoy the same tax privileges as the worlds wealthiest people, you just have to set things up correctly at the beginning and with the right advice this is more than possible.

Source:ezinearticles.com