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Types of Investment Trusts – Splits

The previous part of this article summarised what actually constitutes an investment trust, including how they are run, and provided an introduction into one particular type of investment trust, the REIT. In this second part, Split Capital Investment Trusts are introduced with a quick summary of how they may be used by investors.

Split Capital Investment Trusts

Also known as Splits, this variation of an investment trust strays from the more simple template in that it can offer a number of different share types within the one trust, each with a certain profile of risk vs potential yield.

Splits tend to be run across a fixed term and therefore have a stated closing date, known as a wind-up date. At this date the assets accumulated through the fund are distributed to the investors in a predefined order depending on what class of share they have purchased, with the low risk shares paying out first, but with limited gains, and the high risk shares paying out last, but with the highest potential gains if the fund were to perform well enough.

The share classes that pay out first usually have protection on the original capital investment which is then countered by the fact that they dont receive any income and during the life of the fund and the fact that the final redemption prices is predefined (so that the potential yield, if the fund were to grow sufficiently, has a ceiling). The series of share classes to pay out next will have diminishing protection on the original capital investment, but greater shares of the income payments and of the remaining asset growth if the investments were to perform very well. Therefore, with the last share class to pay out there is a high risk that there will be very low returns after the higher priority shares have been paid if the investment trust performs below expectations, but there is no limit on the potential gains if it does indeed perform well.

This choice allows investors with differing aims to invest into the trust in accordance with their own investment strategy. For example, pension fund managers running annuity funds may find that they can take up shares with higher risk (little capital protection as they will be redeemed after the lower risk share classes) but that have the potential to pay out more income if the underlying investments perform well. Contrastingly, private small scale investors who are after long term investment returns may be better suited to zero dividend preference shares (the first to pay out) which have the security of a fixed return/capital protection but miss out on the income payments along the way.

Even within these investment trust groups there will be a significant variety in the risk and potential reward profiles from one trust to the next depending on the stated strategy of the fund manager and the company sectors (geographical, industrial etc) in which they specialise. There should therefore be investment companies offering the right shares to meet any investors needs. If the price is right of course!

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What You Need To Know About Investment Property~How Investment Property Works

An investment property refers to that property which is purchased in order to gain returns.~Classified as an investment property is any property that is obtained with the purpose of gaining and expecting returns. Apartment building, single-family dwelling, a vacant lot or a commercial property are the forms of investment property.~A vacant lot or a commercial property is a sample of an investment property form. Real estate is one of an essential type.~This is an essential real state type. Pertaining to the property that the owner does not occupy is termed investment property.~Not occupying the property by the owner even though in certain instances the owner may occupy a portion of it pertains to an investment property.

The following are examples of investment property.~These are samples of an investment property.

For undetermined future use the land was held.~Holding a land for undetermined future use.

Under an operating lease or a vacant building that is to be rented.~Rented vacant building or under an operating lease.

Any currently constructed property.~Any currently constructed or developed property for future use.

For a long term appreciation the land was held.~Holding a land for long term appreciation.

Whether bought as a home or as a business venture, buying a property is a lucrative venture.~A lucrative venture is buying a property whether bought as a business venture or a home. Purchasing a multiple unit is a beginners approach.~Purchasing a multiple unit dwelling as an investment property is a beginners approach. While renting out the remaining units, one can live on the other unit.~The remaining units can be rented out while living only in one unit. This way you can use the rent money for mortgage payments that you earn from your renters.~In this way, you can use the rent money you earn from renters for mortgage payments. Owners can enjoy the collected rent and at the same time they can fully pay their property in the long run.~In the long run you can fully pay the property while enjoying the profit you made from the collected rent at the same.

To finance further the property you purchase you can use any equity you have in your property.~Any equity you have as a property owner can be used to further finance property purchases. Pertaining to the fair market value of the property is equity.~Fair market value of the property less the existing liabilities inclusive of any liens refers to equity. To borrow against the equity in a property is a common practice.~Borrowing against the property equity is a common practice. Because of the property that will serve as collateral in securing your loan, rates are then somewhat competitive.~Rates of the property that will serve as collateral in securing loans are then somewhat competitive. The lesser risk there in the better rate you are going to be offered in lending.~Better rates are offered for those less risk in lending.

Investment property is bought at a tax sale sometimes.~Sometimes those bought at a tax sale is an investment property. The property will be auctioned when the original owner fails to honor the property tax payment for certain period of time.~Property will be auctioned if there is a failure of the owner to honor the property tax payment for certain period of time. A minimum bid as a starter which will be high enough to cover the back taxes and other related expenses incurred during the sale.~Minimum bid will be a starter then it goes higher, enough to cover the back taxes and other related expenses incurred. At a relatively minimal cost the investor can still buy the property.~But at the relatively minimal cost the investors are still allowed to buy the property. When an owner has the opportunity to resell the property at the market value or upgrade it and sell in a premium price is an example of an investment property.~This is an example when the new owner is given an opportunity to resell the property at the market value, or renovate or upgrade the property and sell at a premium price or to hold and have it rented to bring a regular income in a hope to have a capital gain.

Aligning Investment Banking Fees with Client Interests

As a boutique investment bank, we expend a lot of effort providing high quality advice and service to our middle-market investment bank clients. We understand the need to align our investment banking services and fees with our clients’ interests, because ultimately, we act as our clients’ advocate. Completing transactions is difficult; we need to be working together. The following is a brief primer related to investment banking fees.

Retainer A credible middle market investment bank will charge a non-refundable retainer. There are two primary reasons for the retainer: (1) it covers the time and expense incurred in preparing the client to go to market and (2) it serves as a screening mechanism to ensure that the client is committed to the transaction. This retainer may be paid as a lump sum, over time or based on achievement of certain activities associated with the transaction process. This retainer should represent a minor portion of the overall fee. Sometimes retainers or portions of retainers are credited toward the success fee.

Success Fee The success fee, representing the majority of compensation, is tied to successful completion of a transaction and is structured as a percentage of the deal size. For capital raises, a fee percentage is applied to the amount of capital raised. The fee percentage increases as one moves from raising senior debt (perceived as less risky and ranges from 1%-2%) to junior debt (more risky) to equity (perceived as most risky and ranges from 5%-10%). Some fee arrangements include an “equity kicker” in the form of warrants. The size of the deal may also influence the fee percentage; the larger the deal the smaller the percentage. For merger and acquisition services, the fee percentage is applied to the overall size of the transaction. Although many business brokers refer to the Lehman formula, few mid-market investment banks use this structure. Instead, they may quote a straight fee percentage or a performance based progressive fee, which increases based on achieving a certain valuation target. The higher the companys valuation (the more dollars the seller puts in his pocket), the higher the investment bankers fee percentage. Progressive fee arrangements provide a strong incentive for the investment banker while aligning the parties’ interests in maximizing the value of the transaction to the client’s owners.

Final Comments. As with most things in life, keep the fee arrangement simple. Haggling over unique, low probability circumstances or creating complex fee structures generally backfires. Complex arrangements tend to cause uncertainty and can result in lack of motivation and focus from the investment banker, not what the client desires. You get what you pay for. Expect to pay a reasonable, market fee. Receiving an engagement letter containing a low fee (potentially with no retainer), indicates a low level of sophistication. Conversely, an engagement letter quoting an out-of-market high fee indicates someone wanting to take advantage of a client. These are not investment bankers you want handling your important deal.

About Wilcox | Swartzwelder & Co. Wilcox Swartzwelder and Co. based in Dallas, Texas, is a boutique investment bank providing merger and acquisition services and corporate finance advisory services to middle market companies in the energy, industrial and infrastructure sector. The Firm delivers a high level of personal service, in-depth industry knowledge, rigorous transaction execution and superior results. Principals have successfully completed almost 100 transactions with aggregate value in excess of $3.6 billion.

Mr. Jason Wilcox 433 E. Las Colinas Blvd. Waterway Tower, Suite 1200 Irving, TX 75039 972-831-1300 www.ws-ibank.com

Securities offered through Petro Growth Energy Advisors, LLC., member FINRA/SIPC.

Singapore Real Estate Investment

Real estate investment is about finding good deals; the crux is that money is made when you purchase.

Real estate investments are often treated as one the best ways of investing money. However, what you are looking for is not just any real estate investment, but real estate investment that can give you good returns. By real estate investment we mean investing money into property i.e. buying property at a low price and selling it at a higher price so as to make a profit out of it. So the most important part of good real estate investment is to get hold of such properties which can give you good returns.

Now, how can you get these potential profit-making deals?

1. Your first avenue for finding good deals is the local newspaper (the property newspaper). Just search for properties that are listed directly by the owners who want to avoid paying commission to the real estate brokers. Since the owner is saving on the commission that they would otherwise have to pay to the broker, they would probably be able to offer a lower price to you and be more open to negotiations.

2. You could also place your own wanted ad in the local newspapers. On the same lines, you could use internet to search for the real estate investment avenues. In fact, you would be astonished by the number of real estate investment opportunities you are able to locate on the internet. Not only that, searching for real estate investment opportunities (i.e. property for sale) is much easier on internet than anywhere else.

3. Another good way to hunt for real estate investment opportunities is by using the services of real estate brokers. Some people use real estate agents as their first (and maybe the only) touch point for getting real estate investment opportunities. The real estate agents act as information hub for people looking to buy property. In fact, a lot of sellers find it much more convenient to sell their properties by listing it with real estate agents.

4. Multiple listings service (MLS as known in the real estate industry) is another good way to find real estate investment opportunities. Since the multiple listing book is provided only to the real estate agents and not to the general public (unless you are very lucky), all the cream (good real estate investment opportunities) would have already been taken before you get to see the book. The key here is to look for expired listings that didnt get converted to a deal.

5. Another good way to get a property, that is a good real estate investment, is to look for foreclosures by banks or to visit public auctions. You can generally get a good deal here. Divorce settlements are another good real estate investment opportunity.

To sum up, real estate investment is really about knowing where to look. And finding good deals does require some effort.

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Emerging Market Investment Advice Tips

The emerging market describes a broad range of markets from second and third world countries. It encompasses economies such as China and Brazil, together with countries in Africa and Asia. Generally, the term emerging markets represents economies which are as yet not fully developed, and subsequently an investment in an emerging market can often be high risk but has the potential to yield great returns as their economies are still developing.

If you are considering investing in emerging markets, these advice tips are worth considering.
Do not put all your eggs in the one basket: No financial portfolio should be tied up with just one investment, and any investment in the emerging market should not comprise a dominant percentage of a portfolio.

Long term view: The emerging market has been likened to investing in America in the 1920s as over forty years an investor would have gained a substantial return on any investment. In that time he would have seen prices drop through the floor. This is similar to emerging market investment today, so be prepared to take a long term view to good returns.

Advice: Obtaining general advice on the emerging market is essential, especially if you are new to financial investment. Financial advisors, banks, and other institutions seem like good places to gain valuable advice on the surface. More often than not however, the investor who seeks guidance from these places often pays for advice they do not need, as many of the best decisions can and should be handled by the investor.

A few financial investment companies have realised this and take a hands off approach and only step in with general advice if needed. These are the companies to turn to when guidance is needed.
Commissions: It goes without saying that any financial investment company is going to charge commissions, and subsequently it makes sense to look for a company that charges low rates. Some offer 0% commission initially, and this is a good place to start.

Risk vs. Return: Any investment into the emerging market is high risk. The returns however, have the potential to be considerable and subsequently an emerging market investment becomes a viable option. It is possible to invest in a country or into a fund which in turn is managed by a fund manager.

The latter becomes a question of faith and trust in that manager to do the right thing with your money, so the decision to choose a financial investment company with a view to fund management should not be taken lightly.

Currently, China and Brazil are often seen as good choices for emerging market investment.

Ultimately it is important to realise that as an investor you need to be in control of the fund, even if it is supervised by a fund manager. Some financial companies give you that control, and it is worth spending sometime to find a financial investment company like this.

Boost Your Financial Services with Investment Management Training

You can easily make money by investment, but at the same time you can lose as well. A proper investment will help you guarantee a better future. But the first and foremost thing before getting indulged in an investment is to identify the risks and requirements that you may face in a particular investment. You should decide your goal that has to be aimed, and also the investment that is possible at your end to help the goal get achieved.

A certified financial planner or financial advisor is always available for the investors to have their doubts cleared if they have any issues regarding investments that they are set to make. You could also go for investment management training or investment training that could help you increase your knowledge and skills in the field of investment thus helping you avoid getting to a certified financial planner all the time rather you could do the task on your own. The investment management training can include various topics like finance, human resource and marketing. There are various investment fiduciary available that could provide you investment training. Most of the investment fiduciary do not carry fiduciary responsibilities. They are just like insurance agents or stock brokers. They may hold licenses, but as they are not investment fiduciary they are more interested in selling their investment products or insurances.

While choosing an investment fiduciary, the background of the fiduciary plays an important role. You should ask following questions to the advisor you are hiring:

1) Do they have licenses and certification?

2) What degree do they have?

3) What is the experience level that they carry?

Your investment fiduciary should have good academic background and should carry a good level of experience. An investment fiduciary should have high ethical standards and should be able to provide a sophisticated advice and services to it’s costumers.

However, you can become an investment manager for your own self through proper investment management training. With investment training you could be able to take better financial decisions more efficiently and effectively. Investment management training could help you in a number of ways:

Investment training helps you manage your time more effectively so that you can focus better on the more important factors.

It helps you delegate the workload depending upon the situation.

It helps you manage your resources such as financial goods or other equipment properly.

The investment manager who has done investment training is in charge of determining the total amount of short-term and long-term capital. This is done with proper planning of finance and investment. Investment fiduciary allows you to invest your money in assets and projects and make profit from it.

Investment training is concerned with the management of assets, valuation of firms, allocation of capital, etc. Besides this investment management training allows you to evaluate the financial performance, financial institutions, supply of funds to other companies, negotiate with bankers, behavior of stock price, interact with bankers, and keep track of quotations of stock market.

Thoughts on Painless Commercial Real Estate Investment Advice

Real estate investment is the practice of buying real estate property and making a profit out of it by selling it. There are many people that make a living utilizing this type of investment as it can be rather lucrative. Nonetheless, not everyone advantages from it. There are people who make the wrong choices when purchasing property and wind up making drops.

Wondering how to get a great start in the sales of commercial real estate? As of today commercial real estate market is considered as one of the vast market regardless of where you are. You could easily find a booming career in the real estate industry if you are aware of on the right techniques of the market. You can always take good real estate investment advice for getting a great initiate in a fruitful venture.

Commercial real estate investment can be considered as very good career choice. There is always a market for business when you consider commercial real estate investment. Always remember when you get involved with commercial real estate investment, keep the deal in your mind. You always have to be alert when deciding any type of deal. Dont only go for just a good location or good appearance, but there should be lot more things you have to keep in mind like the bottom line earning you expect to make, the following terms and conditions of the agreement and moreover the approximate rate of return from it. Simply focus on the expected profit and good real estate investment advice rather than getting emotional on one property.

Always keep in mind that the whole real estate process is a long process even if you have already gone for a commercial real estate property. Now a days people or owners get so impatient with all the processes and simply give up on the deals. Basically you need to have the track for all the things like all the official documents has to be made properly, the documents need to be signed properly and moreover repairs need to be made.

Well you have to think before doing anything like for example why the previous owner is selling its commercial property and more questions like this. Sometimes, they are selling it because of a problem with the property itself. It can be any scenario like it could be prone to more bizarre scenario be the target of repeat break ins due to a vendetta or perhaps due to insect infestation and lot more things like this.

There are always new things happening in the commercial real estate as there are always new questions coming up that you cant even answer. So that is why it is said to take real estate investment advice from some experienced person that probably helps your success rate. This makes a wealth of resources available to you.

For more information related to real estate investment advice , Please visit : americanrealestateinvestments.com

Why Investment Properties Melbourne Best

Even in todays less than stable economy, many investors in the Melbourne area are finding that they are able to achieve financial success by looking into investment properties Melbourne . This can be a fun process that requires less knowledge of hard financial procedures than other investments, such as investing in the stock market. Instead, a basic ability to research housing trends, and a good source of information could point you in the right direction. However, before you sign any contracts, be sure that you have a firm idea of how to evaluate the real estate. You will need to know if this property has a good chance of succeeding. With a few simple evaluation techniques, you should be able to narrow down the options. The first step towards purchasing any investment properties Melbourne is of course to locate them. To do this, you will have to conduct a fair bit of research. Checking local real estate sites or getting in touch with brokers will give you access to the latest listings. However, its important to remember that older or more obscure properties, which might be a good investment, arent always on the internet for you to locate from your couch. You might have to go out in the field with a qualified broker to see these types of properties. Newspapers often have these listings, so its worth browsing through the real estate section on Sundays.

Those that are thinking about getting involved with off the plan Melbourne investment opportunities for the first time should know that it can be a complicated and overwhelming process. It helps to work with a real estate investment firm that specializes in these types of concept and design driven situations so that you can make the best decisions for your financial future. The firm that you work with should have a good reputation in the Melbourne market and should have experience with all types of properties, from apartments to terraces.

You might be keen to find your investment properties Melbourne on your own, but a real estate broker can help out in several different ways. They can not only help you visit properties, but they will also be able to tell you what comparable properties have sold for, which will help you make a sound financial decision. Something may look good on paper to the untrained eye, but be virtually unsellable to the real estate professional. Once you have narrowed down your initial search to a few promising properties, you will then need to further evaluate them.

That rate of return is something to keep in the back of your head before you purchase the investment properties Melbourne. Although purchasing a piece of older property with the intention to renovate it could yield a high return, it will most likely take a great deal of time to do so. Making repairs takes time and effort. Therefore, those who are looking for fast cash may wish to search elsewhere.

The term “House & Land” package is often used loosely. In an ideal world every Home & Land Package promoted would include fixed price site costs completely checked against developer guidelines and council requirements, etc. In reality this is very difficult with so many homes that could potentially be packaged onto so many blocks of land.

Emotions and How They Affect Investment Behavior

Normal human emotions may overtake the rational part of the brain, and cause investors to make poor investment decisions. Some behaviorists theorize that modern humans are not hard-wired to be good investors. What can investors do to neutralize the effects of emotion and make smarter investment decisions?

Recent times have been difficult for investors. Some have made the situation worse by buying and selling at the wrong times. For most people, the normal emotional response to rising markets is to feel confident and positive. This can lead to the desire to increase risk tolerance and purchase risky assets at potentially high prices. The opposite is true after big market declines. Our emotions may tell us to pull in and avoid risk when, perhaps, the opportunities for higher returns are greatest.

Because of this and other reasons, individual investors are notoriously bad market timers, as evidenced by mutual fund cash flows. For example, The Wall Street Journal recently reported that mutual fund research firm, Morningstar, determined that investors contributed more than $300 billion of new money to equity mutual funds during the six-year period from 2002 to 2007, much of it near market highs. When prices declined, investors redeemed more than $150 billion. According to the Hulbert Financial Digest, the total cost of this poor timing for stock fund investors was more than $42 billion for the 12 months ending May 31, 2009.

As a possible explanation of this behavior, we might consider the interesting work that is being done if the field of neuroscience, where researchers study the brain’s response to stimuli in an attempt to better understand human decision-making. Results are scientifically confirming what behavioral finance economists have suggested for some time: people are not hard-wired to be good investors because their emotions and other “normal” reactions can overtake their ability to reason rationally and make smart decisions under certain circumstances.

Brain scans show that there are two parts of the human brain operating in radically different ways. The prefrontal cortex is the rational, unemotional part of the brain that is used in long-term, logical thinking. The limbic system, on the other hand, is the brain’s short-term, emotional side that often causes trouble for investors. Under certain conditions, our emotional brains can take over and cause us to make poor, irrational decisions.

In a study published in 2005, researchers from Carnegie Mellon, the Stanford, and the University of Iowa, found that people with an impaired ability to experience emotions made better investment decisions in a simple investment game. The game involved a series of rounds in which players could choose whether or not to invest hypothetical money. Each round was structured to have a positive expected return on investment so that a rational player should choose to invest in every round, regardless of what happened in previous ones. Not surprisingly, the normal, unimpaired players were frequently affected by recent outcomes and were reluctant to invest after a series of losses. The players with impaired emotional function invested more regularly and performed better because they were less affected by fear and were more willing to take risk.

Hypo Venture Capital Asset Allocation A Sound Investment Strategy Part 2

Here at Hypo Venture Capital we are committed to offering our clients access to the latest and broadest range of financial services and products on the market. We know that choosing the right strategy, the right investment and the right product is no easy task in this day and age! Whether its advice, investments or financial planning we are here to answer all your questions and facilitate all your financial needs.

In today’s complex financial markets, you have an impressive array of investment vehicles from which to select. Each investment also carries some risks, making it important to choose wisely if you are selecting just one.

The good news is that there’s no rule that says you must stick with only one type of investment. In fact, you can potentially lower your investment risk and increase your chances of meeting your investment goals by practicing “asset allocation.”

Asset Allocation Can Work

For instance, at age 25 you may decide to invest with the goal of retiring in comfort within 40 years. Most likely, your investment goal is to achieve as much growth as possible growth that will outpace inflation substantially. In aiming to reach this goal, you may allocate 70% of your assets into aggressive growth stocks, 20% into bonds, and 10% into money market instruments. You have years to ride out the wide fluctuations that come with stocks, but at the same time, you potentially lower your risk with your bond and money market holdings.

Because your goals and circumstances are unique, you may want to talk with an investment advisor who can help you tailor an allocation strategy for your needs. Generally, your asset allocation will change as you reach different stages in your life, as your investment goals also change along with these shifts in lifestyle.

If you have been investing aggressively for retirement for more than 20 years and are now less than 10 years from retiring, protecting what your investment may have earned from market ups and downs may become more important. In this case you may want to gradually shift some of your stock allocation into your bond and money market holdings. Keep in mind, however, that many financial experts recommend that stocks be considered for every portfolio to maintain growth potential.

A Simple Process, Some Dramatic Potential Results

Asset allocation is a simple concept, yet vital to long-term investment success. In fact, a landmark study cited in Financial Analysts Journal shows that about 90% of the variability of average total returns earned by balanced mutual funds and pension plans over time was the result of asset allocation policy.3 For many individual investors, the asset allocation decision amounts to choosing what types of mutual funds to invest in and the amount to invest in each type of fund. Others may want to add individual securities to this mix after exploring their investment options.

Regardless of the asset allocation strategy you choose and the investments you select, keep in mind that a well-crafted plan of action over the long term can help you weather all sorts of changing market conditions as you aim to meet your investment goal(s).

Points to Remember

1.Asset allocation is the way in which you spread your investment portfolio among different asset classes, such as stocks and stock mutual funds, bonds, and bond mutual funds.

2.When prices of different types of assets do not move in tandem, combining these investments in a portfolio can help reduce the variability of returns, commonly referred to as “market risk.”

3.Mutual funds are pools of securities, usually offering diversification within a single asset class. Some mutual funds may include several asset classes.

4.The asset allocation that is right for you depends on your investment time frame, goals, and tolerance for risk.

5.As your investment time frame and goals change, so might your asset allocation. Many financial experts suggest reevaluating your asset allocation periodically or whenever you experience a milestone event in your life such as marriage, the birth of a child, or retirement.

Want to know more?

Hypo Venture Capital is an independent investment advisory firm which focuses on global equities and options markets. Our analytical tools, screening techniques, rigorous research methods and committed staff provide solid information to help our clients make the best possible investment decisions. All views, comments, statements and opinions are of the authors. For more information go to www.hypovc.com