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Quicken provides powerful investment record-keeping tools for individual investors. Unfortunately, once you step beyond investments like stocks, bonds, and mutual funds, the mechanics can get a little tricky. Here are some tips for handling common investments in Quicken.

Certificate of deposits

If you purchase a certificate of deposit, you can treat it in the same way that you treat a bond purchase. Basically, certificates of deposits, or CDs, are just bonds issued by banks or financial institutions often for a shorter period of time. For example, you can think of a two-year CD as equivalent to a two-year bond.

Zero coupon bonds

If you invest in bonds, you may know that some bonds don’t actually pay periodic interest. Instead, these bonds, called zero coupon bonds, pay their interest when the bond matures. For zero coupon bonds, you need to annually accrue the interest on the bonds. The annual interest needs to be accrued because, by convention, you report the annual increase in the zero coupon bond’s value as interest earned.

To record accrued interest on a zero coupon bond, record bond interest that accrues in the normal way. In other words, whatever amount shows as being accrued–this should appear on the statement from your broker–record it as bond interest income.

After you record the bond interest that’s accrued, you need to record a return of capital transaction that adds this accrued interest back to the value of the bond. The amount of this capital transaction, obviously, needs to equal the accrued interest amount. But there is a twist here: You need to specify the return of capital amount as a negative value. For example, if you accrue $100 of interest on a zero coupon bond, you also need to record a return of capital transaction for the bond equal to -$100.

By recording the return of capital transaction, you in effect transfer the bond interest money from the associated cash account and add it back to the zero coupon bond’s value. In this way the associated cash account shows the correct cash balance and the zero-coupon bond shows the correct cost basis. The zero coupon bond’s cash basis equals the original purchase price plus all the accrued interest that’s been recorded to date.

Derivatives

Derivatives are securities that derive their value from some underlying security. For example, an option to sell a stock, called a put, is a derivative. It derives its value from the underlying security. Another derivative is an option to buy a stock, called a call. You can use Money to keep records of derivatives, such as puts and calls you buy.

In general, derivative record-keeping is quite straightforward. If you buy a derivative, say a put or a call, and later sell the derivative, you simply have a normal investment transaction. You treat the purchase and later the sale in the same way that you treat the purchase and sale of any stock. If you make money, you realize a gain. If you lose money, you realize a loss.

If you buy or sell a put or call and hold the option until it expires, things work almost the same way. However, in this special case, you do need to record a Final Sale transaction, and the sales price is zero. Obviously, if you hold a put or call until it expires, you don’t actually sell the derivative. But you need to record a sale transaction to reflect the fact that the option is no longer worth anything.

These are the basic techniques you need to know for put and call record keeping–and record keeping for similar derivatives–but there are two special circumstances in which more complicated record keeping is required.

Selling Puts and Calls

If you sell puts and calls–note that the earlier discussion involves you in investing puts and calls–you need to record the option as a regular buy or sell transaction. In other words, if you sell a put and the person to whom you sell it exercises the put, you record this transaction as a regular sales transaction. Similarly, if you sell a call, you record the transaction as a regular buy transaction.

If you sell a put or call option and the option never gets exercised, you record the amount of money the buyer pays you as Other Income.

Exercising Puts and Calls

Typically, individual investors don’t actually exercise puts and calls that they buy. Instead, they simply sell the option back to the broker. However, you might end up exercising a put or call, and in this case, you need to perform special record keeping.

To record the exercise of a put option, record the sale of the put option at a price equal to zero. This zero-value sale is how you record the expiration of the option. After you have recorded the expiration of the option, you record the sale of the stock in the same way that you record the sale of any stock. Remember that a put is an option to sell stock.

To record the exercise of a call option, record the sale of the call option at a price equal to zero. This zero-value price lets you record the expiration of the option. After you have recorded the expiration, you record a regular buy transaction. Remember that a call option is an option to buy a security.

Precious metals and commodities

You can treat investments in gold and other precious metals, gold coins, agricultural items, and other commodities in the same way that you treat shares of stock. Rather than entering a share price, you enter a price per ounce or a price per bushel. And rather than recording a specific number of shares, you enter a specific number of whatever unit of measure is used to describe the commodity. In the case of gold, for example, you might enter the number of ounces. In the case of an agricultural item, you might enter the number of bushels.

You can treat options to buy or sell commodities in the same way that you treat options to buy or sell securities. The earlier discussion on handling call and put options discusses the techniques you use for this record keeping.

By: Stephen Nelson

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In this harsh economic climatic, you may be thinking about making some serious investment with the money you have. The stock market is always an option to make lots of money; however, the market can be just as risky. Therefore, when you choose to invest in any financial investment scheme or program, you will need investment advice, especially if you are a novice to investment schemes. Broker investments are secured investments that can provide you with much needed help in your quest to understand and excel in profitability, through investing in stocks and other financial instruments.

Individuals or firms acting as investment brokers, can be used to perform an intermediate function of handling investment transactions for their clients. Whether they are individuals or firms, they will need proper certification to act on the behalf of the clients. In other words, an investment broker will need a license to practice buying and selling investments for a client. They will usually transact business for millions of people in different types of investment schemes and programs.

There are a wide array of broker investments, which are chosen by millions if not billions of potential investors globally. There are several types or categories of broker investments. This is because there are some brokers that concentrate on dealing with investment opportunities such as buying and selling a number of shares and stocks, while others brokers are focused on investment management autonomy over investments like bonds and other commodities.

If you are considering broker investments, a good idea, is to choose a diversified investment portfolio, as this will minimize your risks of making a financial loss on your investments. It can be an extremely risky business, to put all your money into one broker investment program, as you run the risk of losing all your money. Getting your investment portfolio diversified is a far better option in case there is a drastic fluctuation in a particular investment scheme. Moreover, with a diversified broker investment, you will be in an advantageous position if the investment markets spiral upwards or trends emerge.

There are many types of broker investment, as you can invest in stocks, treasury bills and bonds. In addition to this, you will have the opportunity to invest in financial institutions, technological and manufacturing industries, as your broker advises you to spread your risks across a wide variety of investment programs and schemes. Another broker investment to help diversify your portfolio further is international investment schemes.

Investing in mutual funds, which are a pool of funds contributed by several clients to facilitate the buying of other investments, is another great way to diversify your portfolio. This is a safe way to invest and diversify your investment portfolio which should yield favorable profit gains. You may also consider retirement funds as a lucrative broker investment. However, you may need to understand that weak investment decisions may cause a decrease in the retirement funds available, thus causing a serious problem in the market. A good understanding about broker investments schemes will help you to diversify your portfolio and make good returns on your portfolio.

By: David Patullo

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When you do your weekly shopping at the supermarket, do you keep your eye out for bargains to fill your pantry? If canned spaghetti is half price this week, do you buy a couple of extra tins? Shopping for investments is just the same as buying spaghetti. We store investments to create wealth which can be spent in the future just as we store spaghetti in our pantry to be eaten later.

When is the best time to buy investments? When they are cheap. So when the price of shares drops, the logical thing to do is to buy more – right? Well, logical it may be, but human beings are strange creatures. When it comes to buying investments we seem to apply a perverse logic. Instead of celebrating the fact that there are bargains to be had, we complain that the value of the “spaghetti” we have in the “pantry” has fallen. This would of course be a problem if we had intended to sell the spaghetti this week, but it is reasonable to assume that this is not the case. What is evident throughout the history of sharemarkets is that investors buy more as prices go up, then panic and sell when prices drop. Yet logic tells us we should do exactly the opposite. The secrets of creating wealth through investing in shares are to be able to resist the emotional effects of price changes, to make sound investments at the right price and to take a long term view.

By nature, shares are volatile. Those investors who have the emotional strength to stick with the market through its troughs are rewarded with higher returns over the long term than are achievable through investments in fixed interest or property. Declines in the sharemarket are always temporary and should be seen as opportunities to buy.

One of the realities of share investing is that it is never possible to get your timing exactly right. Spaghetti might be half price this week, but next week it could be discounted by 60%, or it might be back up to full price. However, the longer the shares are held, the less important the initial purchase price becomes. If spaghetti increases in price to $5.00 a can in 10 years time, does it really matter if you paid $1.50 for it last week when you could have bought it for $1.25 this week?

If you are retired, you might argue that you won’t be around in 10 years time and that shares are therefore not an appropriate investment. This is not true. The biggest investment risk retired investors face is that they will outlive their investment funds. If you need $5,000 a year to supplement your pension and you live for less than 10 years, then you will require a maximum of $50,000 to be invested in short term, stable investments. Any investment funds over this amount could be invested long term (i.e. for 10 years or more) in shares for a higher return, thus reducing the risk of outliving investment funds and increasing the value of your estate.

By: Liz Koh

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If you are getting serious about rental property investment, you will need to be able to determine if a property is likely or not to be profitable for you. The last thing you want to do is invest in a piece of property and find out that you are loosing money each month because your expenses on the property are more than your income from renting it! One of the best ways you can begin to evaluate your potential investment property is through the use of an investment property calculator. You can easily find investment calculators of all kinds on the Internet.

An investment calculator can assist you by showing you many of the probable outcomes you can expect of your investment. Investment property calculators use very complex mathematical equations to give you fair financial analysis of your potential investments. They look at all of your routine mortgage and upkeep costs, and they also can give you an idea of your income and tax considerations for the property, as well.

By simply looking on the Internet, with a good search engine such as Google, you can very effortlessly find a multitude of free investment property calculators which you can easily use to evaluate rental property. Into the property investment calculator, you will input all of your monthly rental income, the monthly loan repayment costs associated with any financing you have on the property, and the operating expenses which are necessary to maintain the property in question each month.

From all of the data you have entered the calculator will then give you rough estimates of your monthly cash flow you can expect from the investment, your annual building tax deduction which you can legally take, and any changes which might occur in the amount of taxes you will be paying on the property.

Mortgage investment calculators are complex enough to take both positive and negative values into consideration such as income, taxes, and payments. The calculator is a great way to determine if your potential investment property will earn you money, or conversely cost you money. It can also be helpful in determining the rent which you will want to charge your tenants for rental of the property.

Most mortgage calculators do have some limitations which you need to be aware of, however. Most of them assume that your expenses are the same each month over any given year. While it?s a nice basis, we all know that you can have a very costly repair and your numbers will no longer be anywhere near close to accurate. But, in this scenario you can run the calculator again and re-evaluate the numbers it gives you.

Many mortgage calculators also do not take into consideration many of the important tax issues you will be faced with. They do not see any rebates you might receive, or any tax deductions which you may be eligible to claim which would reduce your overall tax obligation

While investment property calculators can be very valuable tools for you to use, you will want to understand that they do have some limitations and as always you will want to consult with professional tax accountants when necessary.

By: Andrew Stratton

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In a moment, I will tell you a true story. It’s about a group of lovely grandmas who are infamous for making a classic investment mistake and lying to the public about their investment track record.

An expert’s image is created by packaging, and it counts for everything at seminars and workshops and on radio and television. Yes, show business trumps the facts, and the track record that many experts present to the public is not always what it seems.

You have heard it a thousand times: Things are not always what they seem. You will have a better chance of not shooting yourself in the foot if you stop wanting something badly enough (fear and greed) to rush into giving yourself reasons to make a bad decision. At the moment you make a decision, you will not know that you may have made a bad decision–that is why it is called a mistake.

The Beardstown Ladies investment club was packaged and they were naturals on stage. These Grandmas were so charming that no one questioned the lies they told us about how they crushed the experts on Wall Street with their stock picking skills.

Now, lying on TV and radio is not anything new. Many experts leave out material facts about their track record for the purpose of making themselves look like something they are not. But the bottom line is this. If you leave out material facts about your track record, you are deceiving the public.

Prior to this, did you know that leaving out material facts is a form of lying? It is lying, and that is why you need to ask the right questions before you invest your hard-earned money. The first question you should always ask an expert is this. Do you have at least a ten-year track record of beating the market? If so, show it to me, but do not try to fool me by cherry picking investments that you did not own back then. And don’t try to fool me by cherry picking time frames, either.

My point is this. The media and the public fell in love with the Beardstown Ladies, but it was the kind of hoax that not even these grandmas knew was a lie. They were happy with the growth of their investments, because they did not realize that most of the growth in their portfolio came from their own money that they invested each month, not from capital gains. And even their investment adviser, who became famous along with them, did not know how awful their real Return on Investment (ROI) was. The bottom line is this. The adviser did not know that he and the lovely grandmas were lying to the public about their track record.

Do not make the same mistake that these grandmas and their investment adviser made regarding their ROI, because if you make it with your own investments it may cost you a fortune–long term. How? You will be satisfied with your awful investments that underperform the market, and it will never occur to you to switch to investments that are designed to match the market.

Here is what I am talking about.

The Beardstown Ladies had to apologize for lying to the public after a reporter named Shane Tritschm looked at the facts. The facts showed that the growth in their portfolio came from their own money, which was the deposits that they made into their investment account, each month, and not from the huge capital gains they claimed they earned on their stocks.

The ladies and their investment adviser claimed that their highest annual return was 23.4 percent, which was amazing for that time-frame, but facts are stubborn things. A Price Waterhouse audit uncovered a yearly return of 9.1 percent. In other words, their stock picks underperformed the market for that same time-frame.

These lovely grandmas could have invested in no load, low cost, index funds and not paid their trusted investment adviser a bunch of money in commissions. Had they done that they would have matched the market less the cost of their funds, and they would have enjoyed the following benefits:

They would have had more money, because they would have at least matched the market’s performance–long term. Instead, they underperformed the market. They would have had more time, because it requires less time to research index funds than it takes to research stocks and managed mutual funds. They would have had less stress, because it is comforting to know that your investments will match the market’s performance less your cost and that your ROI will be good enough to beat the pants off most experts.

If you want more money; more time; and less stress, you can do it the easy way: invest in a mix of investments that will match the market’s performance. That way it does not require more than a few minutes of your time to invest, because you can pick up the telephone and tell the brokerage firm’s representative what you want him or her to do for you. Easy! Never ask an investment adviser what you should do about your investments because he or she has inherent conflicts of interest. Instead, give him or her instructions on what you want to invest in. See?

Summary: Your IRA account, 401(k) plan, or 403(b) plan may be growing because of your own money that you contribute each month, and not because of capital gains from your investments. A time-weighted return will show you the truth about your investment picks because it accounts for deposits, withdrawals, and gains or losses during a certain time frame. Or you can you can just match the market’s performance. That way you will not have to worry about if you are doing the right thing for yourself and your loved ones.

The bottom line is this. The worst thing you can do is to be happy and/or satisfied with your investments that underperform index funds; especially, if you do not see what is happening with your hard-earned money until you retire.

By: Frank Cirullo

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Investors look for portfolios and investment programs that provide them with high gains. For this purpose, they are ready to place their investments in high yield propositions, with the full understanding that the market is volatile and they can lose the money invested. These investments are risky, and although they promise a high gain, there is no guarantee that the promise will be fulfilled. Instead, the investors are advised to be ready to accept any loss incurred. Therefore, cautious investors prefer to choose low risk investments, which may not offer quick and high returns, but they provide security of the money invested.

Some of the popular low risk investments are bank deposits, money market, fixed income, savings accounts, mutual funds, and blue chip stocks. Mutual Funds offer returns of lesser than ten percent and it is advisable to get professionals asset managers. Blue chip stocks are typically bought with the intention of holding them for a long term. These investment funds guarantee maximum safety of the investment and therefore, the returns are accordingly on the lower side. There is one investment program that can truly be termed as low risk and high return and that is property investment. The real estate prices always appreciate making these investments extremely profitable.

Many people choose to take the services of brokers to manage their low risk investment portfolios. Brokers are either individuals or firms that act as intermediaries between buyers and sellers. Brokers offer a range of services such as creating an account, management of the account and executing the orders of the traders. Traders need to be very careful while choosing their brokers, as it can make all the difference with reference to successful trading. Many types of brokers can be found online as well. To select the best-suited broker, traders can do the research online and ask fellow traders about their experiences with different brokers. The commission charged by the broker must also be understood perfectly for the actual dollar cost per trade.

By: Seth Miller

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For those looking to invest, you should know that many investments can be categorized as being high risk, moderate risk and low risk. Investing is not difficult, but you should always put lots of thought and planning into it. It is also extremely important to educate yourself about the many different investments available to you so you can find those that fit best with your specific situation and lifestyle. Here are some tips regarding the three categories of investing.

Low Risk Investments

While low risk investments are usually very low key and rarely are extremely glitzy or publicized, they do offer conservative investors a way to save money for the short or long term without the risk involved that you find in other forms of investing. Low risk investments usually pay the lowest yields, but are far less volatile than many other types of investments. Low risk investments include money market funds, certificate of deposits and some types of bonds. Low risk investments are perfect for those that want to make sure there money remains safe and secure. While low risk investments don’t offer high returns, they do offer stability and security for those that can’t afford to lose money or would just like to avoid as much risk as possible. Expect low risk investments to pay out yields of 1% to 5% annually.

Moderate Risk Investments

Moderate risk investments are perfect for those that are interested in investing for the long term and would like to earn moderate yields. Moderate risk investments are usually certain kinds of stocks, bonds and mutual funds that pay handsomely over the long term. While generally riskier than saving money in a bank, for those that are looking to invest for the long term, historically speaking you will grow your money quite nicely. Moderate risk investments usually use the power of compound interest and time to create a nest egg from 10 to 40 years with regular savings. For instance, saving 1K per year at an interest rate of 10% for 30 years can return close to 200K. Moderate risk investments usually return yields of 5% to 12%.

High Risk Investments

High risk investments are those investments that if you are lucky can return huge yields, however the downturn is that they can be extremely volatile and in many cases instead of getting rich off your investment, you find yourself losing some or all of it. High risk investments include penny stocks, international stocks, some types of Forex trades, etc. The sky is the limit for returns, but many high risk investments- if considered a winner should return yields that range from 10% to 30%++.

By: Connie Barker

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It is unbelievable but very real that an entire new world is taking shape here in the cyberspace. Way back, there was a time when a seller has to go to a place where he could contact people in real to sell his products and same was the case for buyers to buy the products needed. But today, with the change in times and fast moving world, the long routes are cut short. These short routes are made on the base of high technology and developing sciences. It takes a whole lot of mastermind to invent something, which is worldwide accepted. One of the best examples is the cyber superhighway or internet.

Businesses and trading can be carried from a place of shade where shading of sweat is not so popular. Online investments are one such trend that has arrived as an outcome of internet popularity. One remembers the ancient times of being to stock market to trade where you see hundreds of people rushing and yelling and posturing sound gestures to others, talking on phones, watching, monitoring and entering data into terminals. It could not look anymore messed up and a place of chaos. And by the end of the day market wrapping itself into rags to get prepared for the next day. This was the scene that used to be before online market came into trade.

With the emergence of online investments, the environment has changed. Even a small investor is able reach the market that seems to be the invaded area of the bureaucrats, big fishes and the grand risk holders. Online trading has a unique distinction of being at home, investing in stocks sprawling speedy transaction. It suits the requirements of the modern metropolis for running over fast tracks. It entails with the feature of providing huge information to the investor along with the dual benefit of processing stocks from the office.

Well, trading in stocks has never been an easy task. It encompasses a sheer risk involved regarding the hard earned money. And where risks are a matter of concern, there is a need of an expert advice. In online investment category the advices are provided by online brokers who enlighten the path to profits in return of their brokerage. A brokerage is the amount paid to the brokers for the service provided by them. A broker is the one who handles the exchange network and the system software finding the buyers or sellers depending on your needs, as individual investors do not have access to electronic markets.

Anyhow, online trading does suffer from certain disadvantages regarding credibility and trust. Just few words of cautions before an investor start investing:

Go for an in-depth study about the company’s history and its financial status. Check the quality of the services offered. Analyze the past payment mode and promptness. Place your queries regarding the commission rates, services offered and the style of handling accounts.

Hence, it can be concluded that online investment has added a new dimension to the stock investment market where it merges all the investors and categories of stocks harmoniously. It will be perfectly ok if we say that it is a right time to experience a new world all together.

By: Vijay Kumar Sharma

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Many people are not aware that there are three different kinds of investments. These are stocks, bonds and cash. As simple as it may sound, it is not so as each investment has many other sub-investments under its realm.

The stock market with all its pitfalls can be scary place for those investors who do not know too much about how a stock market functions. This should not scare you as the Internet is a good resource for information and based on the type of investor you are, you can get information. Investors are primarily of three types — conservative, moderate and aggressive. Based on the kind of investor you are, you can invest either in high risk investments or low risk investments.

People who are conservative prefer to invest in cash form of investments. This means that they are the investors who will have interest bearing savings accounts, or they will invest their money into mutual funds, CDs or Treasury bills. These sorts of investments are safe and carry a low risk.

Moderate investors take chances with cash and bonds. Some might also try their luck in the stock market but they will usually opt for investments that have either low risk or moderate risk. It has been seen that many moderate investors prefer to invest in real estate that has low risk attached to it.

Aggressive investors will usually opt for high risk stock market. They will invest their money in business ventures and high risk real estate. A good example of high risk real estate would be investing your money in an old apartment building; renovating the property with the expectation that you will be able to rent out the apartments for more than what they are currently worth.

It is imperative that you learn the different types of investments before you start investment. You should also know what to expect from an investment and the risks involved.

By: Pauline Go

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Every insurance company advertises its life cover and the benefits they offer their clients. They tell you that their services, term life and whole life insurance have unique properties that you should buy into. I bet that everyone has heard something about life insurances, either whole or term insurances and many people are thinking about their future and their loved ones that may have bought one. However, there is another product on the market: universal life insurance, product that has many advantages over other investment options. This type of policy has witnessed an increased popularity in the last years and more and more people are beginning to think about their financial future. A universal insurance policy represents a personal portfolio that offers you a certain degree of financial security. It differs from other insurances as it offers clients a longer list of possibilities and facilities. Later in this article we will discuss the insurance company investment portfolio and what that involves.

A universal policy is based around a life insurance, and its core is a life insurance with everything it represents. According to what type of cover you choose, a universal life cover policy may contain whole , term or mortgage insurance insurance. It also contains an investment option (it includes a series of funds that you can use for emergencies or retirement). A universal life policy also contains a health insurance that covers both general health and critical illnesses. You can discuss with your broker to include other facilities as well, such as a disability and accidental death cover for you or other members of your family.

You can change the terms of your universal insurance scheme during its existence according to your financial situation at that time. Either you can expand its coverage on other aspects that you have left out when you had signed for it or you can resize its limits downward. A universal life insurance offers unique adaptability and flexibility to offer you the best insurance scheme for your requirements. If you want your family members to benefit from the advantages it offers, you can expand its coverage to them as well. You can choose a more expensive or a cheaper scheme whenever you want and you can even stop paying the fees for a certain amount of time if you have difficulties for a short while.

The investment company owning the universal insurance company investment portfolio will invest its funds in several financial instruments: bonds, stocks, real estate as well as other secure options. Managing the investment portfolio is complex and it is the job of the investment portfolio management to help reduce the risks and to maximize the profit. A long-term investment portfolio is managed differently from a short-term portfolio and these insurance company portfolios are usually managed through periods, having in mind a clear financial objective and the necessity to reduce risks. There are many cases in which commercial banks manage investment portfolios and they employ financial specialists and financial advisors to achieve their goals.

By: Dean Forster

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