PORTFOLIO INSURANCEWritten by Al Thomas
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There is what I call portfolio insurance that helps you identify how high is up. Really? Yes, really. Having been an exchange member and floor trader for 17 years I learned very quickly (or you go quickly broke) that I had better have my exit strategy planned before I buy. Did you know that when a general makes a battle plan he also has a retreat strategy for his troops? If battle does not go well he wishes to withdraw with as many of his troops in tact as possible. The same strategy should be employed for your investments. When you buy any stock or mutual fund you must have a plan to sell before you lose all your money. Any fool can buy. It is wise investor who knows when o sell. Your automobile may cost $15,000 and I will bet you have a policy that has a deductible amount to protect you from a total loss in event of an accident. This also way you should think about buying stocks or mutual funds. The deductible is your stop loss order for every position in your portfolio. No one is 100% right when buying so you must know how much you are risking before you buy and place open stop loss moment your order is executed. When you buy your portfolio insurance (and it is free) it is also prudent to raise that stop as your stock advances so you will not give back your profits. Every professional trader uses stops. You can too.
F*R*E*E investment letter www.mutualfundmagic.com Author of best seller "IF IT DOESN'T GO UP,DON'T BUY IT!" Never lose money in the market. Copyright 2004 Albert W. Thomas All rights reserved. Former 17-year exchange member, floor trader and brokerage company owner.
| | HOW LONG WILL MY MONEY LAST ?Written by Peter F. Baigent CFP, CLU, CHFC, RFP.
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You then need to factor in various pensions that you and your spouse may be eligible to receive. Many people now retire prior to age 65 and elect to receive a reduced Canada Pension in order to start collecting earlier. Old Age Security does not start until age 65 so you will have to factor in that extra cash flow requirement for a few years. If spouse is a few years younger and you both want to retire at same time you may have to plan for this additional income by drawing extra from your investments until spouse's pensions begins. The point being that there will be about five or six different income streams to factor into calculation because of different starting times. After many years of paying taxes some pensioners are now loosing their Old Age Security benefits. If you have net income greater than $50,850.00 you will lose some of your benefits. Sad as this is, it needs to be factored into your retirement plans. There are a few interesting financial planning activities that help to deal with this problem. Sometimes this claw back can be avoided for awhile by letting your RRSP's accumulate a little longer. Fortunately we have developed a computer program to accurately calculate all of various income streams, inflation, growth, etc. This programme will tell when you can retire, how much you will have each month in today's dollars and if it will run out. Using this key information has enabled many of our clients to make their retirement decisions easier. It has also helped some of our older clients who came through depression and are afraid to spend. Knowing that your money will last gives you freedom to enjoy yourself in retirement. But, you need to plan, calculate and save if you want to get there in comfort. Copyright 2004 – www.money-software.com
Peter F. Baigent CFP, CLU, CHFC, RFP. is a Past President of the Canadian Association of Financial Planners for British Columbia, a former Director of the Canadian Association of Financial Planners. He has spoken across Canada on financial planning matters and has taught courses for the Chartered Financial Consultants & Certified Financial Planners degrees. He is the founder of Money Minders Software which produces financial planning software.
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