Finance Blog

There have been a number of investigations and allegations made on how the millions of people in this country who have their money invested in insurance policies, mutual funds, and pension plans, are being fleeced. Brokers and investments must, by law, give their clients the most favorable terms, looking at 12 different exchanges and choosing the best one. Unfortunately, however, it seems that brokers are not sticking to these rules. This is something Jonah Engler has recently uncovered and is now trying to change.

The Business of Brokerage According to Jonah Engler

It is a known fact that brokers often take rebates for choosing certain exchanges over others. What this means is that investors do not get the best outcome possible, but brokers gain more. In a sense, the system is rigger. On the grand scheme of things, the harm done is minuscule on a trade by trade basis, but it is much greater on non-professional investors who have placed their financial future into these trades.

If a broker is to find the best financial option out there, then they should look at incentives to buy and sell with a queue that is as short as possible. The longer the queue, the worse the outcome. However, it seems brokers still choose the longer queues and that these queues are also the ones that offer the greatest rebates.

There are exchanges that don’t engage in these tactics. For instance, the IEX does not pay any rebates at all. They also have a type of speed bump in place, so that ordinary investors have a fighting chance against the high frequency trading. They opened on August 19, 2016 with a simple promise: to execute trades better.

Another option to consider is BATS, which was founded by a high frequency trader and is now a significant rival stock exchanges. Their website shows what the execution quality is of all the different exchanges. This website, which uses data from FINRA and other debt knowledge sources, has shown that Nasdaq, which has always led the spread rankings in the S&P500, is losing ground to IEX.

Yet, the overall market share that IEX currently enjoys is just 2% of the total market, despite having much more effective spreads. According to Jonah Engler, this is because IEX is a principled exchange that does not pay kickbacks – or rebates. Both the New York Exchange and BATS are following suit in this, reverting some of their exchanges back to a model that does not use kickbacks.

If more would follow suit, then the securities market in this country would have far greater quality and integrity. It makes the whole system fair and would increase people’s faith and trust in the industry as well. With kickbacks in place, it becomes impossible for a broker to truly follow their best execution duty, even if they are legally obliged to do so.

Jonah Engler belies that the Securities and Exchange Commission (SEC) should also be involved in this, as they are the ones who can enforce brokers working with the best options for their clients, not themselves.

If you’re interested in finding a profitable company to invest in like Marc Leder does, simply continue reading to discover a variety of ways of finding the right company to invest in.

1. Consider asking a reputable financial advisor for advice

If you’re relatively new to investing and are unsure of how to best invest your disposable income, you may want to consider talking to a financial advisor, who’ll be able to provide you with a variety of possible businesses to invest in. All of which are likely to bring in a decent return on investment.

If you book an appointment with a financial advisor they may ask you what your financial goals are. As an example, if you’d prefer to invest in a low-risk investment opportunity or a high-risk investment opportunity. The latter of which will be more likely to bring in a much higher return on investment.

2. Opt for a well-established company, which has already achieved a high level of success

If you’re unsure of how to choose a company to invest in, you may want to invest in a well-known company which features prominently on the stock exchange. Examples of such companies include Alibaba, Apple, Microsoft, and Amazon. If you plan on investing a sizeable amount of cash into a company, it’s well worth chosen a reputable company, which is unlikely to lose its value in a few weeks or to go bankrupt!

3. Consider investing in a relatively new company in order to make a sizeable profit

One of the best ways to make a small fortune as an investor is to become an early supporter of a company, which is likely to take the world by storm. Just be sure not to invest any money, which you can’t afford to lose in a relatively new company, which has the potential to either achieve great success or go bankrupt.

4. Get into the habit of following financial blogs

One way to keep apprised of the latest stock exchange developments is to follow a variety of financial blogs. Just ensure to follow financial bloggers which are written by financial experts, instead of by relatively new investors, who may lack the experience to give sound financial advice.

Remember that the best way to achieve financial success is to follow the example of those who have already achieved the success which you strive for.

5. Find out as many statistics as you can, about each company you’re interested in investing in

Examples of some of the key statistics which you should look up include each company’s yearly revenue, net profit, and profit margin. All of which should be available online.

If you’re interested in investing some of your savings or disposable income into a business, which has a high chance of earning you a high return on your initial investment. After all, the primary aim of investing is to earn a high return on your chosen investment. Simply refer to this handy step by step guide, when it comes time to find the right company to invest in!

If you’re curious as to how a financial consultant from an investment company can help you, Gregory Lindae will tell you they can help you wisely invest your savings and disposable income, simply continue reading to find out how an investment company may be able to help you.

How can investment companies help you?

1. Investment companies can help you diversify your investment portfolio

One of the riskiest moves which you can make as an investor is to choose to invest the bulk of your allocated investment money into a couple of businesses. As if one or more of these businesses experience a severe drop in market price, you could stand to lose tens of thousands of dollars, in a single day.

One of the tasks which an investment company can help you with is safely diversifying your investment portfolio, so that if one of the businesses which you invest in crashes, you won’t lose all of the capital which you invested.

As an example, an investment company may advise you to invest in index funds which are funds which purchase shares in dozens or even hundreds of different businesses, which will significantly decrease your chances of making a huge loss. Even if you choose to invest in index funds, you can still choose to invest in purchasing shares from individual businesses such as Apple and Amazon too.

2. Investment companies will advise you when the best time to purchase and sell shares is

The key to succeeding as an investor is to know when the best time is to purchase shares and when the best time is to sell your shares, for the greatest possible profit. Contrary to popular belief just because a business experiences a dip in share price, doesn’t mean that it’s the right time to sell your shares as you may very well take a loss for prematurely your shares, right before they recover in price.

As knowing when to purchase and sell shares is an extremely difficult task, which some people struggle to master after investing in the stock market for a decade, it’s well worth getting a financial expert from an investment company to help you purchase and sell shares at the optimal time.

After all, there’s no point watching share prices 24/7, when your investment advisor can invest money on your behalf for you. Just be sure that you define a clear budget in advance so that your financial advisor doesn’t accidentally purchase more shares than you’re comfortable purchasing!

3. Investment companies may be able to recommend shares which may offer a high ROI

If you had invested $100 in Bitcoin in 2010, you’d now be a multi-millionaire, which proves that in order to make the highest possible return on your investment, it pays to be an early adopter of new companies and technologies.

If you’re looking for the next big opportunity to invest in a start-up company, which may become the next Amazon or Google, it’s well worth asking a financial advisor for their insight. As they might have the right company for you to invest in.

So if you’re looking to wisely invest your hard earned money, it’s well worth talking to a financial expert at a reputable investment company!

When it comes to real estate investing, it would be fair to say that every mistake you make is costly. It’s at this point that some investors really struggle to keep the faith, even when the best proposition might pop up on their doorstep.

Someone who has a proven track record of investments of this ilk, particularly in the Houston area, is Allen R Hartman. He has seen investors come and go in this region of Texas, and seen all of the mistakes from the outside. This is the reason today’s article has been put together, as we take a look at some of the prime mistakes that are made for first time real estate investors.

Location, location, location

It’s something of a cliche, but the term location, location, location really couldn’t be more accurate when it comes to investing. Unfortunately, many first-time investors get this completely wrong.

Some of them simply look at a photo of their favorite area and go from there, while others might choose the place in which they grew up. Suffice to say, both are major errors, and you should instead be following the money. When we talk about following the money, it’s all about analyzing what other rental properties are in the vicinity, and also of any laws which might impact your return.

Of course, if you have any familiarity with the area it’s going to be an aid, but don’t let this be the top thing which is driving you.

You overestimate how much income you will make

This is another exceptionally common mistake, particularly if you are dealing with a potentially lucractive area like Houston. Even though it might seem completely profitable on paper, it’s not until the money starts coming in that you can really be sure of your income.

This doesn’t just relate to how much rent you can charge tenants either. It also relates to the amount of time you have between tenancies, which so many new investors don’t account for and therefore lose money in. Just because a property is ready to be rented, it doesn’t mean to say that a tenant is going to move in on the exact same day. It could in fact take months, which obviously impacts your bottom line significantly.

The opposite problem: you underestimate costs

Following on from the above, let’s now turn to the opposite problem. We’re referring to the issue where you completely underestimate the amount of money that you’re going to spend on real estate.

In truth, this could be due to a whole host of reasons. For some people, it might be because they have not budgeted for as much money as they need on property repairs, before the building hits the market. For others, it might be because they’ve completely forgotten to include the likes of agent fees and insurance in their calculations. While this might seem a simple mistake, it’s unfortunately a very common one.