Hedge funds are the quintessential “rich person” investment. Hedge funds can take investments from accredited investors and seek to deliver very high returns to investors.
Hedge funds are actively-managed by a portfolio manager who is compensated based on performance. The hedge fund typically accepts only a few investors – often less than 100 – which is significantly less than one might find in the smallest of mutual funds.
How Hedge Funds Work
Individual investors can increase their returns by building their own stock portfolio, ideally one that is diversified into several businesses and industries.
The thing about diversification is that there isn’t much need for extreme diversification. A portfolio of 8-15 stocks is often just as good, and even better, than a portfolio of 500 stocks. Having fewer stocks make up a larger part of your portfolio allows you to invest only in the best 8-20 opportunities, giving you the best possible returns.
So, you want to make money in real estate?
Real estate investors generally make their money from a few different sources.
Let’s break down how an investor can make money in real estate, and the sources for income with real estate investments.
How to Make Money in Real Estate
Real estate has a common theme: there is only so much of it, and there is not much more real estate made every day. Naturally, land has become an investment because it can be used to produce a profit in farming or other agriculture, or generate rents from people who lease the land from you.
Investing in land is very tricky, and has some very concerning implications for investors.
Investing in Land: What You Need to Know
The economy seems to be recovering. More jobs will likely be added in 2012 than in 2011, if not both 2010 and 2011. Now that new openings are available, and job seekers are thinking about a new job, let’s talk about why you should keep your job.
I know many people who have asked me directly, “why should I keep my job?” after having a bad week or even a bad day. There’s a perfectly logical reason to keep your job: cash flow.
Valuing Your Work
Foreclosure investing is big business. Everyone from individual investors to hedge fund managers find that the real estate market looks to be a very good place to put capital for the long haul. Given that real estate prices are falling and rents are rising, investors getting in the market now are getting great long-term deals.
So what do investors need to know about foreclosure investing? We’ll cover it all below!
Foreclosure Investing 101
Stock options are a derivative that have become very popular with traders. Traders and investors can use options to place a trade on a specific security without actually owning that security. Instead of purchasing 100 shares of Walmart, for example, an investor could simply purchase 100 options, which allows the investor to make money just as he would if he were to buy Walmart stock shares.
Options Investing 101
One of the hardest parts of investing is valuing a company. Valuing a company requires that you know a lot about the business – you have to know enough to know the future income potential, risks, and the expected return you want from your investments.
This is only made more complicated when it comes time to value a dot com company – an online company. Recently, Yelp.com had an IPO and was valued at $1.3 billion, even though the company has never made money itself.
Valuing Unprofitable Companies