Investment Portfolio Defined

Investment Portfolio Defined

Investment Portfolio

Investment Portfolio- Diversified Portfolio

Starting an investment?  What is an investment portfolio anyway? By definition, an investment portfolio is “a collection of financial assets such as stocks, bonds, property and cash”. An Investment Portfolio may be held by individual investors and/or managed by financial experts, hedge funds, banks and other financial institutions”.
Having a good diversified investment portfolio is something that everyone, who does any kind of investing, needs. Diversifying your investments is a good idea, especially in the event that one area of your investments takes a loss. By focusing your investments in only one area of the market, you are more prone to run into a larger loss if that part of the market does poorly during a given time period. By diversifying your investments, the profitable investments can make up for the poor ones. This allows you to weather out tough times as they say.

Investment Portfolio- How to have a Diversified Portfolio

Diversified Investment Portfolio

One of the most important principles followed by most investors is Diversification.  Diversification is a method used by investors to combine a number of investments together to reduce investment risk. Listed below are several types of investment diversification.
Asset diversification- this type of diversification is where investment is grouped in asset classes. These asset classes vary but they typically consist of the following

• Cash or money market
• Bonds or fixed interest
• Equities i.e. company shares or stocks
• Alternative funds e.g. real estate, commodities, and hedge funds.

Geographical diversification- Assets differ greatly depending on their current location. This is due to the fact that every country has different factors affecting their current state such as currency, economy or industrial development.
Sector diversification and number of holdings-Market trends and conditions often favor one sector over the other.  Market trends affects and differ from country to country, it is a good idea to watch which sector is doing well on the particular country.
Time diversification- A simple way to reduce risk is to invest for the long term. Taking a long term view allows your investment more time to grow and possibly make up for any short term fluctuations.
Alternative investments- Alternative investments have become more readily available. Typically these funds try to provide positive returns regardless of market direction; these include

• Real estate
• Commodities
• Absolute returns funds – including hedge funds
• Long/short funds

Investment Portfolio- Benefits of Having a Diversified Portfolio

It is difficult to predict which asset classes, sectors or geographies will perform well. Diversification is a key tool in managing investment risk. Choosing the right spread of investments to create a diversified portfolio will help to reduce risk yet also increase the chance of exposure to investment gains.  Wise investors spread their investments to lessen the effects of any poor performance of one part of their investment portfolio.

Term Insurance in Dubai

Term Insurance in Dubai

Understanding your insurance needs

Every individual is distinct. Even identical twins have their own distinct characteristic that tells them apart. The same goes with every person. Our profile, money-wise, is different. Choosing the right life insurance policy is an individual choice based on personalized individual factors.
The right insurance policy for me may not be the right terms for you. This is why choosing the right insurance policy will involve evaluating the different types of life insurance policy available and seeing which one fits your requirements. The majority of us have to think in terms of acquiring the life insurance policy that matches our financial capabilities.

Differentiating Your Insurance Policy

If you are planning to buy an insurance policy for yourself, there are several things you need to consider. Insurance providers charge you premiums based on your health and age.
There are several types of life insurance policies where we can take advantage of. They are the whole term life insurance policy, the mortgage insurance policy, the health insurance policy, the universal life insurance policy and many more.
Term insurance is a life insurance policy that pays out a specific amount when the insurance policy owner dies or becomes terminally ill. It provides ease of mind to the insurance policyholder knowing that their loved ones, after their death, will be financially secure.
Mortgage insurance is an insurance policy protecting lenders from the potential default of borrowers. This is an insurance policy which compensates lenders or investors for losses due to the failure of payment.
Health insurance policy is insurance against the risk of incurring medical expenses among individuals
Universal life insurance policy is a type of permanent life insurance based on a cash value.
Choosing the right policy involves evaluating the diverse types of life insurance policy available and seeing which one fits your requirements. Understanding these types of Life Insurance Policy can help you decide which one corresponds to your financial status and needs.

Is It the Right Insurance Policy for Me?

Term Insurance Plan

Term insurance also known as short-term insurance coverage, are insurance policy you renew after expiry. Term Insurance covers a specific period of time – normally the policy will run for periods of 5, 10, and 20 years.
Most term insurance policy providers offer insurance protection that covers up to the age of 100. Insurance policy providers charge you based on your health and age. Term insurance is basically a security measure that you provide to your loved ones whom you leave behind.
When you buy a life insurance policy to cover you for only a certain number of years, the insurance policy provider offer you different types of payment options to pay your coverage. So how long should your term insurance policy be? Your health status and age needs to be taken into account when choosing the right term insurance policy.
If you are near retirement and is expecting to have a huge retirement fund, then short term insurance policy is more appropriate for you. When you are evaluating a term life insurance policy, you have to take into consideration who you will be helping with the plan itself and their needs. Looking into different options for term life insurance can help to ensure that you are receiving the best term insurance policy for your money.

Financial Advisors in Dubai - Do you really need them?

Financial Advisors in Dubai - Do you really need them?

Financial Advisors in Dubai

Many expats in Dubai arrive here with great plans for a better lifestyle and higher standard of living. In fact many of

Financial Advisors Dubai

them get the lifestyle they are after, and enjoy it so much that they forget that need to plan their finances and goals for the long term.
There are a number of financial advisors in Dubai who can be consulted to help you plan your finances.
Good financial advisors are the ones who are not affiliated with any particular provider. They should not have a vested interest in pushing a particular provider’s products to you. On the contrary they should act on your behalf and choose products that best suits your needs.
Obviously this can only happen if the independent financial advisors are affiliated with a broker and not providers directly.
So it is in your interest to confirm this fact prior to meeting with them. The other advantage of dealing with independent financial advisors as opposed to bank representatives who offer the same products is – independent financial advisors almost always do a comprehensive analysis of your personal financial situation as compared to a bank representatives who just ask you if you need their insurance and/or savings products.

What can Independent Financial Advisors do for you?

Generally independent financial advisors don’t charge for their services in Dubai. Also there is absolutely no obligation on your part to make any kind of buying decision at any time if you don’t want to.
Good independent financial advisors will meet you twice -

1. In the first meeting, they will explain the concept of financial planning which revolves around the four quadrants i.e. Family Welfare and Protection, Retirement Planning, Children’s Education and Lifetime Goals and Aspirations.
2. They also help you identify your goals, commitments and priorities during this meeting and highlight any problems with your current financial situation.
3. If you agree that you need help with any particular area in your current financial situation, they will aim to provide you a solution in the second meeting.
4. Prior to the second meeting, the independent financial advisors search the market on your behalf for a financial solution, customized around your personal financial situation and budget.
5. During the second meeting they presents to you the solution which according to their experience is best for you.
6. It is only at this time that you make a decision whether to take action or not without any obligations whatsoever.

Review Meetings with Independent Financial Advisors

Good independent financial advisors will regularly meet you at least twice a year to review the performance of the financial solution they provided you. If you have purchased a protection plan through them, the independent financial advisors will meet you probably every six months to ensure that your protection needs haven’t changed.
If you have purchased a savings or investment plan, the independent financial advisors will meet you every six months to ensure that your investment plan is performing at the rate you want. If not he will suggest appropriate actions such as fund switching to keep you in line with your targets.

Organizational support and Customer Service

Organizational support and after-sales customer service is very important when choosing independent financial advisors for your financial needs. Good independent financial advisors will have a solid brokerage organization supporting them in the background to ensure you get the best service even if they leave the organization.

Pension Retirement Plans Dubai

Pension Retirement Plans Dubai

Pension Retirement Plans

One of the realities of life is that, at some point, everyone has to stop working and retire. For some, this is a golden opportunity to enjoy their golden age and do things they couldn’t do while they were busy working and raising a family.
For others, however, having no pension retirement plan prepared can be a very scary prospect, with no more work and expenses continuing to increase. Even though work stops, the truth is that life doesn’t.

Factors to consider – Pension Retirement Plans

The most important factor in planning out your retirement income is to plan ahead- the sooner you start to plan, the better. When you are in the prime of your career where you are receiving a steady income, you should begin to put money aside to have a source of income when you retire.
This can be done by diversifying your sources of income – small investments that yields income will eventually add up when you retire to provide you with a comfortable living.  If you are frugal you may find that your retirement income is actually more than enough to live by.

Choosing Pension Retirement Plans

Pension retirement plans are very important in the retirement planing process and are viewed, wrongly by many, to be the sole means to achieve an appropriate sustainable income in retirement.
There are several ways to back-up your pension retirement plans and in doing so, it is feasible to have a more financial security.

1. Begin Saving Now! The earlier a Pension retirement plans is looked into the better. It is much better to start one at twenty than it is at forty. The longer you save, the more you will receive when you retire.
2. How much must I put in? The simple answer is as much as you can afford. However, it is worth bearing in mind additional forms of savings for retirement, such as investing in stocks and shares.

Managing our funds and having personal stability is definitely an essential matter for a number of us. When we spend so much time trying to earn money, its good to know that our income is working hard for us too.
Probably the most vital factor in our wealth management that requires necessary consideration is our Pension Retirement Plans. After a lifetime of non-stop work to earn income, we want to have the assurance that we can relax in our retirement with enough funds to take full advantage of it.
There are a number of pension schemes available to help us to do this. It is good idea to seek financial advice on  Pension Retirement Plans that are suited to our financial needs.

What is Life Insurance

What is Life Insurance?

Life insurance is a contract between the policy holder and the insurer, where the insurer promises to pay a designated beneficiary a sum of money (the “benefits”) upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. In return, the policy holder agrees to pay a stipulated amount (the “premium”) at regular intervals or in lump sums. In some countries, death expenses such as funerals are included in the premium.

Buying life insurance may be one of the most important decisions you’ll ever make. In the event of a tragedy, the assured payout can help pay the bills, continue a family business, finance future needs like your children’s education, protect your spouse’s retirement plans, and much more.

What is life insurance anyway?

‘Life Insurance is like a parachute. You buy it when you don’t need it, because when you need it, you can’t get it !!!’

There are a few variations of life insurance policy. In this article, we will try to further understand what is life insurance all about.

• Term Life insurance-The most popular type of life insurance policy is called Term Life Insurance. The term life insurance provides coverage for a specific and stated period of time. This type of life insurance is a very popular choice for a policy because it can be purchased for an inexpensive premium. The way this insurance works is that you are covered by the policy for the time period specified.

• Whole life insurance polices, on the other hand,  are attached to a cash value system where part of the regular contributions are invested in funds of your choice and grow with time. If the cash value is high enough to sustain the policy, it can be used to pay the premiums.

Education Plan - Dos and Don't s

Education Plan – Dos and Don’t s

When doing finan­cial plan­ning, one of the most impor­tant top­ics of dis­cus­sion is how to create the right education plan for your child..

Education plan - Dos and Don'ts

The cost of edu­ca­tion is on the rise, advanc­ing far in excess of the infla­tion rate. There­fore, it is essen­tial to plan for the future by starting an education plan for your children as soon as possible.
As a par­ent of a naughty 4-year old, the first thing I did when he was born was to start an education plan to help me save for the higher education fees that I would have to bear around 18-20 years later.
I started the education plan with the pur­pose of having a dis­ci­plined monthly com­mit­ment – an assur­ance, that by the time my son is of ter­tiary edu­ca­tion age, there will be a sum ready for him to pur­sue fur­ther stud­ies, whether locally or overseas.

When to start your child’s education plan

Some may ask how soon they should start the plan­ning process. The sim­ple answer is as soon as pos­si­ble.
Starting an edu­ca­tion plan­ involves an invest­ment strat­egy that specif­i­cally addresses the edu­ca­tional needs of your chil­dren. It’s impor­tant to start sav­ing early to reduce the funds required by tak­ing advan­tage of the power of com­pound­ing over time.

Important Factors to consider when starting your child’s education plan

Plan ahead when starting an education plan
Designing the right edu­ca­tion plan­ is a long-drawn process; the time period could range from 15 to 20 years. Start to pri­ori­tise your finances early to give your­self a head-­start. This allows you to ben­e­fit from the com­pound­ing effect of money and the flex­i­bil­ity to change course accord­ing to your lifestyle changes.
Your invest­ments will also ride out the volatil­ity of dif­fer­ent mar­ket cycles over a longer period.For exam­ple, my wife and I started our son’s edu­ca­tion plan even before the birth of our son, and we worked out the finances and the amount that would be needed to fund his future edu­ca­tion. We took into con­sid­er­a­tion whether we wanted a local or over­seas education. We had to rework our pri­or­i­ties and expenses to cater for this change.
Invest­ment options for your education plan.
One of the most pop­u­lar choices among young parents is to buy an endow­ment education plan. This is a prod­uct that cov­ers two objec­tives – sav­ings and pro­tec­tion.
For exam­ple, a 30-year-old par­ent plans to buy a 20-year edu­ca­tion plan for his new­born baby boy. His monthly pre­mium of about $450 (for sum assured of $100,000) would poten­tially bring him an approx­i­mate pol­icy matu­rity value of $200,000. Even if this par­ent is to just set aside $100 each month towards such a plan for 20 years, it is likely to gen­er­ate a pol­icy matu­rity value of approx­i­mately $40,000 – enough to cover tuition fees in a local university.
On the other hand, par­ents who are savvy with finances will con­sider starting an education plan that par­tic­i­pat­es in the equity mar­ket for a poten­tially higher upside. Some will go for high div­i­dend stock while oth­ers look to cap­i­tal growth. Regular savings plans with offshore funds can cater to those who wish to par­tic­i­pate in the mar­ket with­out hav­ing to actively man­age the port­fo­lio.
Cou­pled with a protection/savings and invest­ment strat­egy, this can be an ideal choice for par­ents to achieve their goals. There­fore, early plan­ning pro­vides flex­i­bil­ity and the oppor­tu­nity to opti­mise risk return on the strat­egy cho­sen. We chose a savings/protection education plan while putting aside funds to invest reg­u­larly in the mar­ket in a few hand-picked high-dividend stocks.
Protect your education plan.
Many couples overlook the protection aspect when starting their child’s education plan. Life is about eventualities and risk. The risk of dying to soon and leaving your family to fend for themselves and the risk of living too long and having to save for your expenses. While the savings education plan takes care of the ‘living too long problem’, parents should take out a separate term insurance that ensures that their children can have the best education even if they are not around or die too soon for any reason.
Being dis­ci­plined with the education plan.
Not every fam­ily can afford to invest a lump sum to finance a child’s edu­ca­tion years down the road. There­fore, hav­ing the dis­ci­pline to save on a monthly basis, often through a reg­u­lar savings/investment plan, is a good strat­egy to begin with. Stay focused as it is often easy to find excuses to dip into the sav­ings if you do not have a ded­i­cated account or strategy.
There is a sense of com­fort and peace of mind know­ing that children can secure their pre­ferred edu­ca­tion choices down the road. All it takes is early plan­ning, a com­fort­able and real­is­tic sav­ings and invest­ment strat­egy, and more impor­tantly, dis­ci­pline in keep­ing to the finan­cial com­mit­ments set aside for the edu­ca­tion plan.

Pension Retirement Plans Dubai

Pension Retirement Plans Dubai

Pension Retirement Plans

One of the realities of life is that, at some point, everyone has to stop working and retire. For some, this is a golden opportunity to enjoy their golden age and do things they couldn’t do while they were busy working and raising a family.
For others, however, having no pension retirement plan prepared can be a very scary prospect, with no more work and expenses continuing to increase. Even though work stops, the truth is that life doesn’t.

Factors to consider – Pension Retirement Plans

The most important factor in planning out your retirement income is to plan ahead- the sooner you start to plan, the better. When you are in the prime of your career where you are receiving a steady income, you should begin to put money aside to have a source of income when you retire.
This can be done by diversifying your sources of income – small investments that yields income will eventually add up when you retire to provide you with a comfortable living.  If you are frugal you may find that your retirement income is actually more than enough to live by.

Choosing Pension Retirement Plans

Pension retirement plans are very important in the retirement planing process and are viewed, wrongly by many, to be the sole means to achieve an appropriate sustainable income in retirement.
There are several ways to back-up your pension retirement plans and in doing so, it is feasible to have a more financial security.

1. Begin Saving Now! The earlier a Pension retirement plans is looked into the better. It is much better to start one at twenty than it is at forty. The longer you save, the more you will receive when you retire.
2. How much must I put in? The simple answer is as much as you can afford. However, it is worth bearing in mind additional forms of savings for retirement, such as investing in stocks and shares.

Managing our funds and having personal stability is definitely an essential matter for a number of us. When we spend so much time trying to earn money, its good to know that our income is working hard for us too.
Probably the most vital factor in our wealth management that requires necessary consideration is our Pension Retirement Plans. After a lifetime of non-stop work to earn income, we want to have the assurance that we can relax in our retirement with enough funds to take full advantage of it.
There are a number of pension schemes available to help us to do this. It is good idea to seek financial advice on  Pension Retirement Plans that are suited to our financial needs.