Some More Money Insights

Key Financial Aspects that you should know

Mortgage Education is key and understanding money is just as important.  The more you know the better you going to be.  My biggest hurdle when talking about money are these below.  A good Calgary Mortgage Broker will tell you, that you are losing your money if you leave it in your mattress, and what happens if your house burns down.  Or if you put all your money in one investment and that investment tanks like  BRE-X stock where does that leave you?

 

Investment theory

Investment returns can be traced to four possible sources. The choice of asset mix, market timing, securities selection, and chance. The most predictable of these is asset allocation or asset mix. By the appropriate mix of investments you will be more likely to reach your goals.

Risk and Return

There is risk in anything, and the only way to have no risk is to spend your money right this instant. There is market risk, exchange rate risk, political risk, and inflation rate risk. There is risk at putting your month in the mattress, not just for fire but inflation will eat away at these funds. The trick to investing is finding how what your time horizon is and what you are comfortable with in respect to fluctuations in your portfolio. The most risk you are able to take the better the potential payoff should be long term.

Diversification

Modern portfolio theory suggests you have a mix of not just securities and shares of companies but bonds as well. There are many managers out there that for a small percentage will manage your funds. Some mutual funds can hold a basket of over 2,500 different securities. If you wanted to invest in each and every one of those securities you will need far more capital. Some try to do it alone online, and if you don’t have the knowledge, interest, and time you are at risk of getting farther behind than you started.

Inflation

With the cost of good going up all the time, if your savings do not match this rate you are not going to be able to put as much gas in the car, of groceries in the shopping cart when you decided to pull the money out of your simple saving accounts or from your mattress.

 Even after a Calgary mortgage broker finds you the perfect mortgage, knowing these things will get you well on your way to actually retiring one day.