Things you need to Consider Before You Make Investing Decisions

Investment

Things you need to Consider Before You Make Investing Decisions

Published

1 year ago

December 11, 2022

Making investment decisions can be tricky. You want to make sure that you are investing your money in a way that will give you the best return on your investment. There are many factors to consider when making these decisions, and it can be tough to figure out which one is the most important. This blog post will discuss some key factors you should keep in mind when deciding where to invest your money!

Consider Working With A Stock Broker

Working with a stock broker is an important consideration when making investing decisions. A good stock broker will provide you with professional advice and guidance on the best investment options available to you. They can also give you detailed information about the performance of different stocks and how they may fare in various market conditions.

Additionally, having a stock broker can make it easier for you to execute trades, allowing you to make decisions faster and with more confidence. Czech experts recommend that when looking for a nejlepsi broker akcie or the best stock broker, you should consider their experience and track record, as well as the fees they charge. Working with a reliable stock broker can help ensure that you make the right investment decisions for your needs and goals.

Research The Market

Researching the market is an essential part of making smart investment decisions. Research can be both general and specific: Generally, you should look into broad economic trends, while specifically, you should consider individual companies or products that you may want to invest in. This research could include gathering information on a company’s past performance, its current and potential future value, and its competitive advantage.

Be sure to analyze both the upside potential and downside risk of any prospective investments before making a decision. Additionally, it is also important to be aware of legal and regulatory requirements for investing in certain markets or products. Doing your homework in advance can make all the difference when it comes to managing your investments wisely.

Consider Your Reason For Investment

When it comes to investing, one of the first things you should consider is your reason for investing. Are you looking to build long-term wealth over time, or are you hoping to make a quick profit? Knowing why you’re investing in the first place will help determine the types of investments and which strategies may best suit your goals. It’s also important to understand the risk associated with each type of investment and how much you can afford to lose.

Once you clearly understand your goals and risk tolerance, it will be easier for you to choose investments that align with them. Lastly, don’t forget to factor in taxes. It is wise to consider the tax implications of any investment before you commit to it and ensure that you are not missing out on potential tax benefits.

By taking the time to consider your reason for investing, the type of investments, and associated risk, as well as taxes, you will be better equipped to make sound decisions when it comes to growing your wealth.

Take Risk Levels Into Account

When making an investment decision, it is important to take risk levels into account. Different investments come with different levels of risk—ranging from low-risk investments like treasury bills and certificates of deposit (CDs) to high-risk investments like stocks and cryptocurrencies. It is important to be aware of the level of risk associated with each type of investment and to take that into consideration when making a decision.

Additionally, it can be helpful to think about how much risk you are comfortable taking on in order to develop an appropriate investment strategy. By doing so, you will have a better chance of successfully achieving your financial goals. Remember; never invest more than you are willing or able to lose. It is also important to know that no investment is ever completely risk-free. There are always risks associated with any form of investing, so it’s important to weigh the pros and cons of each option before making a decision.

Liquidity

When assessing potential investments, it is important to consider liquidity– the ability of an asset to be quickly converted into money. Liquid assets are generally easier to convert and therefore offer more flexibility in the event you need the funds for other purposes or if the market changes significantly.

You may want to prioritize these assets over less liquid ones when making your investment decisions. Liquidity is also important when it comes to stock investments, as having access to capital quickly can help you take advantage of opportunities or reduce losses in a volatile market. Overall, assessing liquidity can help ensure that your investment portfolio has the flexibility and resources needed for successful investing.

When evaluating liquidity, ask yourself questions such as: How quickly can I convert these assets into cash? Will there be any financial or legal restrictions if I need to liquidate them? How quickly can I access my funds once the asset is sold? Once you have answered these questions, you will have a better understanding of the liquidity of your investments and how they may affect your decision-making.

Consider The Rate Of Inflation

Investment decisions should always factor in the rate of inflation. The rate of inflation is a measure of how much prices rise or fall over time, and it can have a significant impact on investments. Inflation generally erodes purchasing power and value, so when investing for the long term, it’s important to think about how inflation might affect your investments.

To protect against inflation, savvy investors often opt for investments that are likely to keep up with the rate of inflation or even outperform it. This can include investing in stocks, bonds, real estate, or other assets that offer inflation protection.

Alternatively, some investors may want to look into hedging their portfolios with inflation-linked derivatives and inflation-linked investments, such as Treasury Inflation-Protected Securities (TIPS). Ultimately, it’s important to accurately assess the rate of inflation when making investment decisions. This will help ensure that your investments are able to keep up with and even outperform the rate of inflation.

In conclusion, there are a number of factors to consider when making investing decisions. It’s important to assess the risk level and liquidity associated with each potential investment, and factor in the rate of inflation as well. By doing so, you can ensure that your investments are able to meet or exceed your financial goals. Investing for the future doesn’t have to be a daunting task; with the proper research, planning, and consideration of these factors, you can make smart investing decisions.

The information contained in this article is for informational purposes only and is not in any way intended to substitute professional advice, medical care or advice from your doctor.

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Investment

Taxes should not wag the tail of the investment dog, but that’s what Trudeau wants

Published

14 hours ago

April 23, 2024

Anne Joseph

Kim Moody: Ottawa is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan

Prime Minister Justin Trudeau, Finance Minister Chrystia Freeland and cabinet ministers before the tabling of the federal budget on Parliament Hill in Ottawa. Photo by JUSTIN TANG/THE CANADIAN PRESS/FILE

The Canadian federal budget has been out for a week, which is plenty of time to absorb just how terrible it is.

The problems start with weak fiscal policy, excessive spending and growing public-debt charges estimated to be $54.1 billion for the upcoming year. That is more than $1 billion per week that Canadians are paying for things that have no societal benefit.

Next, the budget clearly illustrates this government’s continued weak taxation policies, two of which it apparently believes are good for entrepreneurs. But the proposed $2-million Canadian Entrepreneurs Incentive (CEI) and $10-million capital gains exemption for transfers to an employee ownership trust (EOT) are both laughable.

Why? Well, for the CEI, virtually every entrepreneurial industry (except technology) is not eligible. If you happen to be in an industry that qualifies, the $2-million exemption comes with a long, stringent list of criteria (which will be very difficult for most entrepreneurs to qualify for) and it is phased in over a 10-year period of $200,000 per year.

For transfers to EOTs, an entrepreneur must give up complete legal and factual control to be eligible for the $10-million exemption, even though the EOT will likely pay the entrepreneur out of future profits. The commercial risk associated with such a transfer is likely too great for most entrepreneurs to accept.

Capital gains tax hike

But the budget’s highlight proposal was the capital gains inclusion rate increase to 66.7 per cent from 50 per cent for dispositions effective after June 24, 2024. The proposal includes a 50 per cent inclusion rate on the first $250,000 of annual capital gains for individuals, but not for corporations and trusts. Oh, those evil corporations and trusts.

There is a lot wrong with this proposed policy. The first is that by not putting individuals, corporations and trusts on the same taxation footing for capital gains taxation, the foundational principle of integration (the idea that the corporate and individual tax systems should be indifferent to whether an investment is held in a corporation or directly by the taxpayer) is completely thrown out the window. This is wrong.

Some economists have come out in strong favour of the proposal, mainly because of equity arguments (a buck is a buck), but such arguments ignore the real world of investing where investors look at overall risk, liquidity and the time value of money.

If capital gains are taxed at a rate approaching wage taxation rates, why would entrepreneurs and investors want to risk their capital when such investments might be illiquid for a long period of time and be highly risky?

They will seek greener pastures for their investment dollars and they already are. I’ve been fielding a tremendous number of questions from investors over the past week and I’d invite those academics and economists who support the increased inclusion rate to come live in my shoes for a day to see how the theoretical world of equity and behaviour collide. It’s not good and it certainly does nothing to help Canada’s obvious productivity challenges.

Of course, there has been the usual chatter encouraging such people to leave (“don’t let the door hit you on the way out,” some say) from those who don’t understand basic economics and taxation policy, but these cheerleaders should be careful what they wish for. The loss of successful Canadians and their investment dollars affects all of us in a very negative way.

The government messaging around this tax proposal has many people upset, including me. Specifically, it is the following paragraph in the budget documents that many supporters are parroting that is upsetting:

“Next year, 28.5 million Canadians are not expected to have any capital gains income, and 3 million are expected to earn capital gains below the $250,000 annual threshold. Only 0.13 per cent of Canadians with an average income of $1.4 million are expected to pay more personal income tax on their capital gains in any given year. As a result of this, for 99.87 per cent of Canadians, personal income taxes on capital gains will not increase.” (This is supposedly about 40,000 taxpayers.)

Bluntly, this is garbage. It outright ignores several facts.

For one thing, there are hundreds of thousands of private corporations owned and controlled by Canadian resident individuals. Those corporations will be subject to the increased capital gains inclusion rate with no $250,000 annual phase-in. Because of the way passive income is taxed in these Canadian-controlled private corporations, the increased tax load on realized capital gains will be felt by individual shareholders on the dividend distribution required to recover certain refundable corporate taxes.

Furthermore, public corporations that have capital gains will pay tax at a higher inclusion rate and this results in higher corporate tax, which means decreased amounts are available to be paid out as dividends to individual shareholders (including those held by individuals’ pensions).

The budget documents simply measured the number of corporations that reported capital gains in recent years and said it is 12.6 per cent of all corporations. That measurement is shallow and not the whole story, as described above.

Tax hit for cottages

There are also millions of Canadians who hold a second real estate property, either a cottage-type and/or rental property. Those properties will eventually be sold, with the probability that the gain will exceed the $250,000 threshold.

Upon death, an individual will often have their largest capital gains realized as a result of deemed dispositions that occur immediately prior to death. This will have the distinct possibility of capital gains that exceed $250,000.

And people who become non-residents of Canada — and that is increasing rapidly — have deemed dispositions of their assets (with some exceptions). They will face the distinct possibility that such gains will be more than $250,000.

The politics around the capital gains inclusion rate increase are pretty obvious. The government is planning for Canadian taxpayers to crystallize their inherent gains prior to the implementation date, especially corporations that will not have a $250,000 annual lower inclusion rate. For the current year, the government is projecting a $4.9-billion tax take. But next year, it dramatically drops to an estimated $1.3 billion.

This is a ridiculous way to shield the government’s tremendous spending and try to make them look like they are holding the line on their out-of-control deficits. The government is encouraging people to crystallize their gains and pay tax. That’s a hell of a fiscal plan.

There’s an old saying that tax should not wag the tail of the investment dog, but that is exactly what the government is encouraging Canadians to do in the name of raising short-term taxation revenues. It is simply wrong.

I hope the government has some second sober thoughts about the capital gains proposal, but I’m not holding my breath.

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Investment

Everton search for investment to complete 777 deal – BBC.com

Published

21 hours ago

April 23, 2024

Getty Images

Shamoon Hafez

BBC Sport football news reporter

@ShamoonHafez

2 hours ago

Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.

The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.

On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.

BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.

Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.

It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.

The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.

777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.

Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance

Published

22 hours ago

April 23, 2024

NanoStockk / Getty Images

Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.

One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.

He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.

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Buffett’s Take on Bitcoin

Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.

“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.

“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.

Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.

For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon

Is Buffett Wrong About Bitcoin?

Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.

Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.

“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.

Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.

Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.

“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”

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This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?

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