Finance – Aspiring Nirvana

Help – Stock market is falling off the sky!!

When will the stock market hit the bottom?

Stock market corrections have been happening for ages. Trying to predict market bottom is a useless exercise. Historical scenarios and models can be deceiving. Keep an eye on the bigger picture. Are we going in a recession where market may enter bear market or is it a mid correction for an overheated market?

Bear market is defined as stock market going down by 20% or higher. Corrections is defined as stock market going down by 5% to 10%.

Recessionary corrections are usually steeper and last longer. Whereas corrections that occur in healthy market are usually shallower and shorter. Of course, the tricky part is predicting are we heading into recession or not.

We wish we would have a magic lamp to predict market top and bottom, but we don’t. Though stock market has gone up over a long time period, some people panic during market downturn and sells at the wrong time. We have no control over the market direction. The only thing we can control is our response to such events.

Have a proper stock and bond allocation based on your risk tolerance. The rule of thumb is to put 60% in stocks and 40% in bonds and perform annual rebalancing. Talk to your financial advisor to have appropriate allocation and stay the course.

How to enjoy the benefits of passive real estate investing – Syndication

A real estate syndication is a type of investment in which group of people pool their money to purchase and manage a property.

What is a Syndication

A real estate syndication is a type of investment in which group of people pool their money to purchase and manage a property. By pooling the money, the group is able to buy a much bigger property than they would as an individual.

Benefits of Syndication

Investing via syndication allows an individual to generate passive income as day-to-day management is handled by professionals.

One gets steady rental income as well as chance to make further profit from property appreciation at the time of selling.

By investing with a group, one can diversify the risk of investing as an individual. Additionally, one can get a chance to purchase multiple properties or a bigger property.

One gets all the tax benefits of property investment without the hassle of managing it.

Generally real estate returns are more steadier than stock market returns.

Challenges of RE Syndication

Syndication company must manage the physical property and the investment pool
Money invested in syndication is tied to the length of investment which can be multiple years
Though passive, it is preferable to have basic understanding of real estate finance
Finding trusted partners is easier said than done

RE Syndication difference with REITS

RE syndication is not same as investing in REITs.

In syndication, a group of people invest in a physical property, manage it, and may sell it in the future. In REITs, one buys shares of a public company that manages real estate portfolio.

Final Verdict

Though RE Syndication allows an individual to reap benefits of passive RE investing, there are chances of losing money in it. Make sure you discuss your financial situation with a registered financial advisor before making any investment decision.

We hope the information in this post will be helpful in your journey of aspiring nirvana!

Beginners guide to investing in Index Funds

An Index fund is a group of individual stocks that is designed to mimic the composition and thus performance of a sector within a stock market.

Index Funds

Individual stock picking can be overwhelming to many folks for varies reasons including number of choices, time commitment, volatility, financial acumen and so on. For such individuals picking an index fund for investment is the best and easiest choice.

What is an Index Fund?

An Index fund is a group of individual stocks that is designed to mimic the composition and thus performance of a sector within a stock market. The most famous index funds are based on companies that makes up S&P 500. By investing is an index fund that mimics S&P 500, you get access to 500 stocks, thereby reducing volatility of returns.

Index funds also enables an investor to compare how their specific investments are doing compared to an index.

There are many index funds that mimics different sectors of the stock market. One can choose index funds that are focused on specific group like country, international, bonds, or a sector. One can also choose an index funds that is either a mutual fund or Exchange Traded Fund (ETF).

Advantages of Index Funds

Investing in index fund is considered one of the best way of passive investing. Investing is an index fund reduces volatility of returns. Index funds usually have one of the lowest fees. You can be assured that your returns will be similar to the overall market.

Disadvantages of Index Funds

With index funds you will get returns similar to the market but will not beat the market. To get above average returns you may have to invest in high-risk individual stocks. Although index funds usually have low fess but some may have higher fees that will hinder your returns.

Final Verdict

Investing in an index funds allows an individual to get easy access to the overall market.

We hope the information in this post will be helpful in your journey of aspiring nirvana!