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Casual Articles - Reduce Risk to Supercharge Your Investment Returns Through the Power of Compounding
If you have been marketing on the internet for any length of time you have surely heard that reciprocal linking is a great way to boost your google page rank as well as your search engine ranking. But what does reciprocal linking actually mean?Reciprocal linking is a joint venture of sorts between you and another website owner to exchange links on each others websites. The benefits of reciprocal linking is getting targeted traffic directed to your website and vice-a-versa. Don’t be afraid to put your competitors website on your links page, especially if they have a high Google page rank. Linking to your competitors will actually help you. For example do a search on Google for your keyword(s) and find your competitor with the number 1 ranking position, n
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balan
I don't know how many books there are by now that propose to tell you how to succeed on eBay, how to make lots of money on eBay, or how to become a millionaire through eBay. Here are a few of my tips on how not to make money with an eBay auction:1. Use irrelevant titles. I have actually seen eBay auctions with titles such as "This is nice". I am sure that many people are going to look for such a title! It is inconceivable that something like "Vintage garden sundial, copper, 1930s" might lead more potential buyers to your auction.2. Use ALL CAPS, ALL THE TIME. Everyone likes the equivalent of being shouted at, and long texts in ALL CAPS are so easy to read, aren't they?3. Show your educashion. Nothing att
Your financial advisor may be telling you that to be a “growth investor”, you need to increase your tolerance for risk and be willing to live with portfolio losses on the order of 30% or more when the market goes down.
But to really super-charge your long term investment returns, your tolerance for risk should probably be less than you think …
The point of this article is to understand how risk and losses affect the rate of growth in your portfolio… and what that means for the risk tolerance you should have. If you are a “growth investor”, then you need to understand this basic principal.
Doesn’t Growth Investing Mean Taking More Risk? Our ideas may conflict with what you think you already know about “growth” investing. You probably know that “growth” type investments are riskier, so how can you keep your risk tolerance at a low level and also invest in these riskier growth investments?
We are here to tell you that too much risk will hurt your long-term growth prospects. By using new, more advanced forms of active investment management based upon market timing, a growth investor can reap the benefits of investing in growth-type investments and also keep their risk tolerance at a low level.
This new approach allows you to harness the power of compounding, capture the superior gains of growth investments and multiply profits on top of profits – accelerating the growth of your nest egg with relative safety.
If you don’t think you could learn how to apply a more advanced approach to your investing, don’t worry. There are various investment newsletters and advisory services that will simply tell you what to do. Alternatively, there are money managers you can hire that use the new, advanced techniques.
Compounding Earnings Creates the Magic
You can read entire books on how to use the “magic of compounding” to get rich. You can become a millionaire by putting away a moderate amount of savings for 30, 40 or 50 years, investing the money at some moderate level of interest rate, and reinvesting the earnings in each period.
The books always point out that the key to the “magic” is reinvestment. Rather than spend the interest you earn, reinvest the earnings back into the same investment. In each period, your earning investment balance goes up by the amount of earnings in the previous period. Because the earning balance goes up each period, you earn more interest in each successive period.
• This power of multiplication will start to accelerate your portfolio growth from period to period and lead to a much larger investment balance than if you hadn’t been reinvesting.
To make the connection between your risk tolerance and the power of compounding, we need to look inside the mathematics of compounding just a bit. There we will find out what really makes compounding work and it will help us understand why managing risk is so important.
Losses Reduce the “Earning Balance”
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balanc
The art of storytelling dates back tens of thousands of years. It is an essential element of the advancement of our species – the telling of fables, parables, myths and legends was the vehicle of choice for passing on advice and guidance from one generation to the next.The first written form of storytelling dates back some 6000 years - the early cave drawings soon evolving into complex hieroglyphs. Around 2500 years ago, Aristotle codified the art of storytelling by introducing ideas of plot, character and a three act structure. And only 2000 years ago Marcus Tullius Cicero demonstrated why the Roman Senate nearly always said ‘yes’ to his proposals by providing a structure for persuasive argument.It is not surprising then that we are still ver
Doesn’t Growth Investing Mean Taking More Risk? Our ideas may conflict with what you think you already know about “growth” investing. You probably know that “growth” type investments are riskier, so how can you keep your risk tolerance at a low level and also invest in these riskier growth investments?
We are here to tell you that too much risk will hurt your long-term growth prospects. By using new, more advanced forms of active investment management based upon market timing, a growth investor can reap the benefits of investing in growth-type investments and also keep their risk tolerance at a low level.
This new approach allows you to harness the power of compounding, capture the superior gains of growth investments and multiply profits on top of profits – accelerating the growth of your nest egg with relative safety.
If you don’t think you could learn how to apply a more advanced approach to your investing, don’t worry. There are various investment newsletters and advisory services that will simply tell you what to do. Alternatively, there are money managers you can hire that use the new, advanced techniques.
Compounding Earnings Creates the Magic
You can read entire books on how to use the “magic of compounding” to get rich. You can become a millionaire by putting away a moderate amount of savings for 30, 40 or 50 years, investing the money at some moderate level of interest rate, and reinvesting the earnings in each period.
The books always point out that the key to the “magic” is reinvestment. Rather than spend the interest you earn, reinvest the earnings back into the same investment. In each period, your earning investment balance goes up by the amount of earnings in the previous period. Because the earning balance goes up each period, you earn more interest in each successive period.
• This power of multiplication will start to accelerate your portfolio growth from period to period and lead to a much larger investment balance than if you hadn’t been reinvesting.
To make the connection between your risk tolerance and the power of compounding, we need to look inside the mathematics of compounding just a bit. There we will find out what really makes compounding work and it will help us understand why managing risk is so important.
Losses Reduce the “Earning Balance”
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balan
Okay, so you've figured out what kind of meeting is needed, you've planned well and you have all the right materials. How about the meeting itself? How can you be sure the meeting you've so carefully planned and prepared actually comes off as expected?The checklist below can help you through the process.- Begin on time, clearly stating the meeting objective and your intentions to stick to type, time, topic, agenda- Obtain agreement on the agenda items and times for each item- Agenda changes must be consistent with meeting objective, type, time limits- Consider having a time keeper, rather than letting topics exceed time limits- Use action language to assign responsibilities -- What will be accomplished, who will accomp
If you don’t think you could learn how to apply a more advanced approach to your investing, don’t worry. There are various investment newsletters and advisory services that will simply tell you what to do. Alternatively, there are money managers you can hire that use the new, advanced techniques.
Compounding Earnings Creates the Magic
You can read entire books on how to use the “magic of compounding” to get rich. You can become a millionaire by putting away a moderate amount of savings for 30, 40 or 50 years, investing the money at some moderate level of interest rate, and reinvesting the earnings in each period.
The books always point out that the key to the “magic” is reinvestment. Rather than spend the interest you earn, reinvest the earnings back into the same investment. In each period, your earning investment balance goes up by the amount of earnings in the previous period. Because the earning balance goes up each period, you earn more interest in each successive period.
• This power of multiplication will start to accelerate your portfolio growth from period to period and lead to a much larger investment balance than if you hadn’t been reinvesting.
To make the connection between your risk tolerance and the power of compounding, we need to look inside the mathematics of compounding just a bit. There we will find out what really makes compounding work and it will help us understand why managing risk is so important.
Losses Reduce the “Earning Balance”
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balan
The title of your web page is an important element, not only to your human visitors but to the automated ones sent by search engines. Learn how to craft a title that will satisfy them both.Titles are difficult. As I'm writing this article I haven't yet decided what its title will be. The challenge of picking a title varies according to what, exactly, one is attempting to bestow the title upon. The title of a non-fiction work should be clear and descriptive. Opinion pieces can be a little more flamboyant in order to catch the reader's attention. Fiction has its own set of quirks as well. One thing remains constant, the title can be a key component in the success or failure of a piece. Nowhere is this more evident than when choosing a title for your web p
• This power of multiplication will start to accelerate your portfolio growth from period to period and lead to a much larger investment balance than if you hadn’t been reinvesting.
To make the connection between your risk tolerance and the power of compounding, we need to look inside the mathematics of compounding just a bit. There we will find out what really makes compounding work and it will help us understand why managing risk is so important.
Losses Reduce the “Earning Balance”
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balan
Selling a .co.uk Domain Name via SedoThis is a recent example of our experience selling a .co.uk domain name via Sedo. If you are new to domains or Sedo this will give you a guide on the process and the time scales involved.NegotiationsThis is the hardest part of selling a domain – how much to ask? Ask too much and the buyer may lose interest. Ask too little and you may not get the best price possible for your domain.You can use www.domainprices.co.uk to get an idea of recent .co.uk domain sales prices or ask to an appraisal on the www.acorndomains.co.uk appraisal forum.Come up with a price that allows you some room to haggle but don’t get so greedy you scare off the bidder. This can be an anxious time, waiting
What is the connection between losses and compounding? It’s simple really. When you lose money in your investment account, you reduce the earning balance.
• It’s the opposite of what happens when you reinvest your earnings.
The mathematical power behind compounding is … the steady growth of your earning balance. When you reinvest earnings, you provide a larger investment balance upon which to earn a return. And here is the key mathematically:
Your returns are more sensitive to the SIZE of your earning balance than the size of the investment return in any given year.
Size Matters: If you start with $100 and lose 10%, you are left with $90. If you earn 15% in the next year, you will make back $13.50 and have an ending balance of $103.50. Alternatively, if you started with $100 and lost 50% instead, you would have reduced your earning balance to only $50. If you then made the same 15% during the next year, you would make only $7.50, rather than $13.50 and end up with a balance of only $57.50.
Losses Destroy Principal Which Must Then Be Replaced. But here is the key “math” thing to understand: the reduced principal, or earning balance, makes it harder to earn the money back and replace what you lost.
You can look at the problem this way: If you lose 10%, it will take a gain of 11.1% to get back to “break-even”. However, if you lose 50%, it will take a gain of 100% to get back to even. It is much easier to earn an 11% return than 100%.
• When you lose a large percent of your portfolio … you have lost the power of compounding for multiple years and significantly reduced the long-term result you can achieve.
So the point of effective risk management is to avoid the big losses.
Increase Your Upside With a Lower Risk Tolerance
So what are these advanced investment methods that can allow you to invest in riskier “growth” type investments while avoiding very much risk to your portfolio?
They are active portfolio management strategies that use various market timing techniques to get you in and out of different investments. Many of these methods use computerized statistical models that identify longer-term market trends. They don’t try to “crystal gaze” the future. They simply statistically identify market trends and tell you when to get in or out.
By knowing when to get out before your investment gets slammed, the active portfolio management techniques significantly reduce risk.
In effect, they allow you to include riskier “growth” type investments without having to suffer the inevitable penalty of high volatility and steep losses during “bear markets”. To learn more about our growth investment strategies for stock market and mutual fund investing subscribe to our free strategic investment newsletter at http://www.confidentstrategies.com.
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