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Financial Freedom Evaluating Your Investments
 

Financial Freedom Evaluating Your Investments

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Now learn how to evaluate risks in any investment you are considering. This is module eight for the Financial Freedom Seminars. Also look for the book that goes with this presentation in paperback and ...

Now learn how to evaluate risks in any investment you are considering. This is module eight for the Financial Freedom Seminars. Also look for the book that goes with this presentation in paperback and e-Reader formats - "Family Financial Freedom". You can now view the presentation here, order the Family Financial Freedom book from any of the ebook sites for iPhone, iPad, Kindle, Nook, Kobo reader etc. contact me at floyd.saunders@yahoo.com for a copy of the presentation or more information on how to get seminar materials.

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  • None of can plan for every event that might happen in our lives, but we can take charge of owning our financial future and developing a common sense plan to more financially secure.

Financial Freedom Evaluating Your Investments Financial Freedom Evaluating Your Investments Presentation Transcript

  • Family Financial FreedomSeminars Evaluating Your I n v e s t m e n t s Saunders Learning Group, LLC
  • Training from Saunders Learning Group Saunders Learning Group provides a variety of training programs, workshops and seminars targeted to the financial services industry. Programs are available in a wide range of topics, and we are specialists in developing custom programs that are targeted to your needs. Contact the founder, Floyd Saunders at 316-680-6482 or at floyd.saunders@yahoo.com for more information. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments2
  • Agenda Evaluating Risks Financial Risk Market Risk Interest Rate Risk Management Risk Successful InvestingEight Rules for Successful InvestingSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • “In this world nothing can be said to be certain, except death and taxes.” Benjamin FranklinSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments 4
  • WHY SHOULD YOU INVEST? Investments Sound and profitable investment product - No need for a “boss” nor to have “customers” Time to let your money grow-No need to “go to work” nor “manage people” PASSIVE INCOMESaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • 3 THINGS YOU NEED TO START INVESTING Money To Invest Stable Finances Knowledge on InvestmentsSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • MONEY TO INVEST A regular savings plan Reduce expenses Generate more cash flowSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • STABLE FINANCES A consistent budget plan Absence of bad debts An emergency fundSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • KNOWLEDGE ON INVESTMENTS Attend “money” seminars Self-study on investments Learn from experience Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Evaluating Risk Investors have important reasons for understanding the risks involved with each type of investment. Risk evaluation determines if an investment is likely to rise or fall in value, and how large its change is likely to be. Volatility is the word use to describe investment risk. Volatility actually refers to an investments tendency to fluctuate, or change its value, over time. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Risk – Reward Tradeoff  Another approach to thinking about portfolio risk involves the reward side of the risk-reward tradeoff.  You can compare a portfolios return to that of a relatively risk-free investment, such as the inflation- adjusted return on a short-term (3 months or less) U.S. Treasury bill.  you should receive greater compensation for taking more risk (though theres no guarantee it will work out that way, of course).  Another way to evaluate risk is to estimate the chances of your portfolio achieving a desired financial goal. In this case, "risk" means the odds that your portfolio will succeed in meeting a specific financial goal. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Risk Reward MatrixSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Financial Risk The possibility that you will lose money when you invest in a company that has debt, if the companys cash flow proves inadequate to meet its financial obligations. When a company uses debt financing, its creditors will be repaid before its shareholders if the company becomes insolvent. Financial risk also refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Market Risk The risk that there will be no market or that the market for that investment will be so poor, that you are forced to sell at a loss. Liquidity, which is how quickly into cash without price concessions is closely related to market risk. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Interest Rate Risk  Interest rate risk is the uncertainty of future changes in the rates of interest.Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Management Risk Management risk refers to the chance that company managers will put their own interests ahead of the interest of the company and shareholders. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Measuring Volatility One of the most critical factors to anyone investing in the stock market is their own personal level of risk aversion. An investors amount of reward is determined by their risk tolerance. When it comes to trading stocks, high reward comes with high risk, and low reward comes with low risk. One helpful tool in assessing the risk associated with a given stock is its beta level. A stocks beta is a measure of its variability or volatility as compared to the stock market itself. Conservative investors would maintain a lower portfolio beta between 0.0 and 1.0 Investors seeking bigger returns might target a beta of between 1.5 and 2.0. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Successful Investing – Eight Rules1. Determine your objectives2. Evaluate the risks3. Diversify across several investments4. Don’t make an investment until you understand it5. Measure risk carefully6. Invest for the long haul7. Protect your losses - Develop a timing policy to know when to sell8. Consider tax consequencesSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule One - Determine your Objectives Tax Safety Benefits Growth IncomeSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Two - Evaluate the risks The lower the risk, the lower the return The higher the risk, the higher the return. R R e i t s u k r n Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Three - Diversify Diversification across types of investments deduces risks Asset allocation is strategy to diversify across types of investments based on your desire to balance growth and income with safely. It’s essentially not putting all your eggs in one basketSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Four – Don’t Invest in What you Don’t Understand  Take time to study financial markets — Read books - Figuring Out Wall Street — Take a few classes — Learn to keep up with financial news  Talk with other successful investors  Interview several investment advisors  If it seems like it too good to be true . . . It most likely is.Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Five – Measure Risk Carefully Consider: 1. Need for growth 2. Need for current income 3. Safety of Principal 4. Availability of funds (Liquidity) 5. Effect of taxesSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Six – Invest for the Long HaulSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Seven – Protect Your Loses  Set limits, at 8 to 10 % below your purchase price, with stop lost limit orders Option trading is often used to create a sort of “insurance” on trades Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Rule Eight – Consider Tax Consequences  A Roth IRA vs. a regular IRA = Allows for tax free growth and tax free withdrawals  After tax returns on government bonds may be less than the tax free returns from municipal bonds  Contributions to a 401k are made with pre-tax dollars, reducing your taxable income in the years contributions are made  Real Estate investing allows for deductions for expenses and depreciation. Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • QuestionsSaunders Learning Group, LLC, Andover, KS Evaluating Your Investments
  • Post Workshop Action Plan  Complete the Post Workshop Action Plan Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments28
  • Reference Material Family Financial Freedom 140 pages ISBN 978-1-60-746269-9 Available Formats: 6"x9" paperback, PDF download or eBook Link to order: http://www.fastpencil.com/publications/4498-Family-Financial- Freedom?tid=bookbuy#read_book Can be ordered from Amazon or Barnes and Noble in paperback. Available on Kindle, Nook, iPad and other popular e-readers. For iPad and iPhone: https://itunes.apple.com/us/book/family-financial- freedom/id556704978?mt=11&ls=1 Available on the nook at: http://search.barnesandnoble.com/booksearch/isbninquiry.asp?EAN=294001514 9609 Book summary: You might be struggling to make ends meet, but achieving true financial freedom is still possible. The good news is virtually anyone with a desire to learn and the willingness to plan can achieve a considerable degree of financial security. This book is a road map to the personal financial freedom you want and deserve. There are no quick-rich schemes here, just common sense advice on how to manage your money, protect your family from risks and start making the moves to being more financial secure.Saunders Learning Group, LLC, Andover, KS Evaluating Your Investments