Offshore Investments

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Earn Up To 24% In Costa Rican Real Estate

In today’s world the value of assets is not always obvious. It is often latent, and has to be unlocked through financial and human capital. We recommend Gap Investors, who focus on unlocking this latent value in Costa Rican property development.

Gap Investors specializes in brokering syndicated loans, which are loans offered by a group of lenders, to provide funds for a borrower to start a real estate development project on properties with high potential (known as latent value) in Costa Rica.

The goal of this form of lending is to get development plans off the ground. These loans will not be given by risk-averse banks without a significant amount of collateral and a high income, so we come in by bringing in a group of enterprising lenders to provide enough short-term funding to get the development to the point where banks will be open to financing.

Because of the nature of the loan the interest rates are typically higher than regular bank interest rates. Collateral is provided in the form of a mortgage lien on the borrower’s property, which is shared by all lenders in proportion to the funds invested by each, through shares in a corporation holding the mortgage.

Bridge loans are usually short in duration and effectively create a financing bridge from the start to the point where banks are interested in the project.

The loans use multiple lenders to allow maximum flexibility. At Gap Investors, a single investor can finance multiple syndicated loans at one time, therefore diversifying their total investment portfolio.

Contact us for more information on offshore investments, or feel free to visit the Gap Investors web site.

The Stock Market System

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The stock market system is an avenue for the trading of shares of stock of listed corporations. As a corporation is formed, its initial shareholders are able to acquire shares of stock from the point of subscription when a company is created. When a company starts to be traded to the public, the primary market comes in where those who subscribe to the initial public offering (IPO) takes on the shares of stock sold from point of IPO. When those who bought into a company at IPO point of view decides to sell their shares of stock to other people, they can do so by going to the stock market.

The stock market is a secondary market for securities trading wherein original or secondary holders of a companys shares of stock can sell their stocks to other individuals within the frame work of the stock market system.

The stock market has buyers of stocks or those who wants to own a part of the company but wasnt able to do so during the initial public offerings made by the company to the public when it has decided to list itself as a publicly listed company. The secondary market or the stock market allows other individuals to sell shares of the company when the initial shareholders may have realized that they want to sell their shares after gaining either significant profit or realized significant loss from point of acquiring a company from its IPO price.

As the stock market has developed and progressed over the years, the way shares of stock are transferred from one individual to another has become more complicated and more challenging to be regulated. Technology has aided in providing more efficient ways of transactions. Front and backend solutions are put into place that helps direct the exchange of shares of stock in timely and secure manner.

Public education over how the stock market works is one of the primary concerns of the investing public in order to promote the trading activities of the stock market to other individuals who may also benefit from doing transactions over this secondary type of equities market.

With the abundance of relevant company information on performance of publicly listed companies, this information will help the investors to become more aware of the directions of the companies where they have share of stocks on and this will also aid them in directing their investment strategies.

Giant Payoffs on Costa Rica Real Estate Attract Investors from Across the Globe

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Today investors from all across the globe are flocking to Costa Rica to invest in the real estate market. With the giant payoffs available, it is easy to see why so many investors are choosing this country to invest their money in.

With giant payoffs available for investors, the time is definitely right to invest in Costa Rican real estate. Although North American real estate seems to be shaky these days, investors can still find excellent returns on investments if they look to Costa Rica. Property prices are affordable, and investors from across the globe are thrilled with the bargain prices and amazing profits available in the real estate market in Costa Rica today.

In the past five years, the real estate market in Costa Rica has taken off and is now in the middle of a boom. With the excellent prices that are affordable and the investment incentives being offered to foreign investors by the Costa Rican government, this is a paradise to investors looking for a new place to invest their cash.

All throughout Costa Rica there are many excellent investment opportunities, and one excellent company that caters to high end investors interested in this market is Gap Investors. Gap Investors Ltda is a Costa Rican company specializing in brokering syndicated loans, which are loans offered by a group of lenders, to provide funds for a borrower for real estate development in Costa Rica.

There are many reasons that Costa Rica has become such a prime spot for real estate investors. Of course first of all is the low price of real estate, which even though it is rising, is still cheaper than places such as the United Kingdom and the United States. The cost of living in Costa Rica also is a drawing point, with the average cost of fine living costing between $900-1200 a month. Property taxes are quite low as well and many times investors are able to cash in on predevelopment prices, both of which make investing in Costa Rica even more attractive to real estate investors.

To learn more about investing in Costa Rica real estate, visit www.gapinvestors.com

Smart Stock Investing

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There are an infinite number of smart stock investing tips out there. An hour spent on the internet would find you thousands. However it does not take much to figure out that they can not all be the successes they claim to be.

Below is a rough set of tips or guidelines to help you figure out your own stock picking system.

Do not believe every stock tip you see

One great tip is not to go into Google, search for hot stock tips and buy a load of stocks that show up in the results. Such a strategy could be compared to gambling. Every such stock tip that you read about should be treated exactly as any other potential investment. In other words research it like you would any other company. Also do not be scared of missing the boat or being rushed into any investment. All of the best investments tend to appreciate in price over a long period of time. Do not be rushed into investing your money.

Never stop learning about the markets

Research is your friend. Ask friends about the companies they work for, read the papers, take some financial books out of the library, research on the internet. Familiarity breeds knowledge so the more you can read about the stocks you want to invest in, the more of an informed decision you can make.

Take your time before buying

Often if a stock suddenly becomes attractive, maybe due to some recent news released it does not always pay to buy straight away. Often the price will spike for a few days before falling back a little as some investors take some profits.

Do not be stubborn

If you have made a bad investment and lost money do no be afraid to sell the stock and take a loss. It is better to lose 10% than 50%. Always set a stop loss to minimise your risks and re-evaluate the stock if the limit is reached.

If you are unsure seek advice

If you are unsure then do not be afraid to seek advice from a professional financial advisor or broker. Be aware that they will likely be seeking commission so take any advice with a pinch of salt, however do not always ignore it.

Basics of Stock Trading

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To “trade” is to buy and sell, according to the terminology of the financial markets. Stock trading involves buying and selling of millions of shares all over the world. It is a mystery how this large a volume and value of trade is accommodated in the system of trading. These financial markets are marvels of technological capacity.

If you’re looking to invest in stocks, it is necessary that you have at least a basic understanding of how the market works. You don’t have to know all of the technicalities of buying and selling stocks. Explaining the technical aspects of the markets is possible by tracing the appropriate links available in the web. The first and foremost necessity is to know how the exchange floor works, no matter whether you trade through the floor or electronically.

On the exchange floor, when the market opens, hundreds of people are seen rushing about shouting and signaling to one another, watching monitors, and entering data into terminals, talking on cell-phones. It looks like a complete fiasco.

However as the day draws to its end, the markets have successfully worked out all trade and are prepared for the next day. Here is a step-by-step presentation of the execution of a simple trade on the exchange floor of any major stock exchange.

You ask your broker to buy certain number of shares of a company at market.
The broker’s order department passes the order on to their floor clerk on the exchange.
The floor clerk transfers it to one of the firm’s floor traders who finds another floor trader wanting to sell this many shares of the company you wanted. The floor trader knows which floor traders transact in particular stocks.
The two converge on a price and complete the deal. The notification process travels backward along the line and your broker gets back to you with the final price. A few days later, you will receive the confirmation notice in the mail.

In electronic markets vast computer networks often reduce the work of human brokers in matching buyers and sellers. It lacks the charged up scenes of the bustling floors of busy stock exchanges, but it is efficient and fast. Quite a few institutional traders, mutual funds, pension funds, and the likes, prefer this method of trading.

As an individual investor, you can get almost instant confirmations on your trades at very low costs. It also helps you keep a tab on online investing by taking you closer to the market by one step.

Yet, a broker is still needed to handle your trades individuals don’t have access to the electronic markets. Your broker accesses the exchange network and the system finds a buyer or seller depending on your order.

You then will need to infer the price behavior of stocks. Price is the immediate cost of a share. And this behavior is so uncertain that it keeps everybody in the game quite excited. This is what generates the profits or losses that are made by investing in this market.
Don’t worry if you find it very difficult to infer the price, because it really is difficult. They frequently fluctuate all along the day. And there is no guarantee that in the morning a price will start at the point where it was at the end of the previous day, though it usually starts in the neighborhood.

Yet there are patterns to be figured out, and expectations often work. Depend on your intelligence and on a professional broker, and never stop short of understanding fully what caused a bad result when it occurs. Learn the practical lessons from your experience, record them in writing, and consult them whenever necessary.

Basics of Hedge Funds

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Alfred Winslow Jones first coined the term “hedge fund” in 1949.

Jones’ innovation was a simultaneously selling and purchase of stocks, thereby hedging some of the market risk.

Even today hedge funds are presumed to undertake a similar hedging, and most of today’s hedge funds still trade stocks both long and short. But some do not trade stocks at all.

The term ‘hedge fund’ now quite often means a partnership dealing a relatively unregulated investment fund, characterized by unusual stock strategies other than investing long only in equity shares, bonds, or money markets. A modern hedge fund basically takes a wide range of P/E ratios and adopts a mixed strategy generating maximum expected and often high actual profits from investing in asset classes such as equity shares, currencies or distressed securities.

Hedge funds have been estimated to be a $875 billion industry, and are growing at about 20% per year, with approximately 8350 active hedge funds in 2004.

The general partner is normally appointed as the hedge fund manager. The vast majority of hedge funds make consistency of return, rather than magnitude, their primary goal. Some strategies which are not correlated to equity markets are able to deliver consistent returns with extremely low risk of loss, while others may be as volatile, or even more so, than mutual funds.

It makes a pooled stock of funds in the partnership, and the general partner a.k.a hedge fund manager takes all the decisions on investment, based on the strategy s/he has outlined in the offering documents. In return, the hedge fund manager will receive a management fee and an incentive fee.

Typically, the management fee ranges from 1-2% of the assets under management. The incentive fee is usually 20% of the profits of the fund and can include “hurdles” or other items.

Among generally followed strategies, there is the use of leverages and derivatives in a venture for high profit arbitrage. The strategies take the forms of aggressive growth, market neutral securities hedging, market timing, multi strategy, distressed securities etc.

Aggressive Growth consists of investing in stocks expected to experience an accelerating growth of earnings per share, generally in stocks with high P/E ratios and low or no dividends.

In Market-Neutral Securities Hedging, a hedge fund invests generally in the same sectors of the market equally in long and short equity portfolios. This greatly decreases market risk. But this needs effective stock analysis and stock picking for meaningful results. Here leverages may be used to enhance returns. Performances are not usually correlated to the equity market. Sometimes they use market index futures to hedge out systematic (market) risks.

Distressed Securities approach means buying equity, debt, or trade claims of companies in or facing bankruptcy or reorganization at deep discounts. Hedge funds with this strategy often profit from the market’s misreading of the true value of the deeply discounted securities. Also as the majority of authorized institutional investors cannot own below-investment-grade securities, there arises a selling pressure resulting in the deep discount. Results generally are not correlated with the markets.

Likewise, in the Multi Strategy approach, investment is diversified by employing various strategies simultaneously to appropriate short- and long-term gains.

Other strategies may include systems trading such as trend following and various diversified technical strategies. This enables the manager to underweight or overweight different strategies in order to earn maximum by capitalizing on current investment opportunities.

Hedge fund managers are extremely able professional people who know their business inside out. Hedge funds heavily interlink managers’ remuneration with performance incentives, and thus attract the best brains in the investment business.

Getting Rich Quickly

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Welcome to Your Money. Today we’re going to talk about how to get really rich really quickly through wise investing.

I think we can all agree that the best way to get really rich really quickly is to buy a sure thing. As the famous baseball player Yogi Berra once said, “Buy a stock, if it goes up, sell it, if it goes down, don’t buy it.”

But that is easier to say than to do. Just how do buy only winning investments? And do some people actually have the inside story on what to buy?

I’ve got a neighbor who loves to talk about his investments. I’m sure you’ve heard people like him talk as well. Every stock he has ever bought has gone up in price, he says. Some have doubled, right after he bought. I always kind of wonder, after an evening in his company – what am I doing wrong? How come everyone else is getting huge returns, and I’m not?

But then I re-enter reality. In fact, I can just about guarantee that my neighbor has bought stocks that tanked – he just doesn’t talk about his losing investments. Why? Simple. You just can’t get really high returns without a really high risk of losing your money. There is a very close relationship between risk and reward. The higher the possible returns, the higher the risk of losing your money.

If you want your money to be really safe, you can stick it in a bank account, or buy a certificate of deposit. Both are guaranteed by the government and both pay a small amount of interest. To go after really high returns, you have to risk losing your money. Some investments are less risky than others. When you buy a bond, you’re making a loan to a company, and you get interest payments in return. The only risk is whether the company stays in business long enough to make the bond payments. When you buy stock in a company, you take on more risk. There’s no guarantee that you’ll get your money back. In fact, if the stock price goes down, you could lose money. But if the stock price goes up, or if the company pays dividends, you could end up with more money than the interest payments on a bond. All investments have some risk. The higher the potential gain from an investment, the higher the risk. It’s that simple.

We’ve all gotten spam e-mails about these companies we’ve never heard of, promising that the company is poised to take off and earn triple digit returns. The sad fact is that they are mostly scams – stock frauds.

They work like this. First, some bad guys buy stock in a small company that doesn’t have a lot of stock trading activity. Then they send out spam e-mails touting the company. They often make up web postings that claim to have inside information. Everything urges you to buy the company really quickly to benefit from a fast price rise. Investors purchase the stock in droves, creating high demand and pumping up the price. The fraudsters behind the scheme sell their shares at the peak price and then stop hyping the stock. The price falls quickly, and investors lose their money. This kind of scheme works best with small, thinly traded companies because it’s easier to manipulate a stock when there’s little or no information available about the company.

Fraudsters lie a lot to get you to buy their stock. I’ve gotten faxes too – saying I have to act quickly to buy a company because it has a huge contract, or just discovered a new drug. You can protect yourself by deleting any unsolicited e-mails you get about hot stock tips. And by ignoring the spam faxes. If you’re curious about the company, don’t rely solely on information from Internet chat rooms or bulletin boards, even if they say they are from company insiders. Instead, look up and read the company financial statements. You can find financial statements from most publicly traded companies on the website sec.gov. Those filings will tell you more about the company, and whether it really does have the contracts it claims. If you can’t find financial statements for a company, you’re really flying blind.

So we started out asking how to get really rich really fast, with guaranteed high returns. I think what we’ve said is that you don’t get really rich really fast through investing. Successful investing takes a lot of time. That’s why the sooner you get started socking money away into your retirement plan, the better off you are. Guaranteed high returns through investing aren’t real – because the reality is, in order to have a chance at really high returns, you’ve got to risk losing your money.

The best way to get rich through investing is to carefully select your investments, and give them years to grow. So the next e-mail or fax you get, promising huge returns for little or no effort – invest in your own future by deleting the e-mail and throwing away the fax.

Thanks for joining us. Your Money is brought to you by the U.S. Securities and Exchange Commission. Write us at podcast@sec.gov .

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How to Invest Smart

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If you can’t rely on your own research, or if you don’t have time to do the research, you might as well make your investment decisions based on tips from that smart guy at work. No, no, I’m just kidding. Tips are for restaurants.

Important Rules to Follow When Buying a Stock These suggestions are presented with the assumption that you intend to remain a casual investor. I strongly recommend mastering the art of technical analysis (reading charts, analyzing price and volume moves) if you intend to become more serious about the timing of your purchases.

With this said, you should still be able to buy good stocks if you follow these rules:

• Don’t ever buy a stock without first examining its financial health. You are going to learn how to do this.
• Don’t ever buy a stock without first learning about its business and who its competition is. You want to focus on the leaders in an industry.
• Buy when market indexes are in an up-trend. Don’t try to bottom-guess, wait until the stock or the market has clearly turned around, with several days of price increases on larger than usual volume.
• Buy the top companies of industries or market sectors with many stocks hitting new highs.
• Buy companies with new products or services that are expanding (profitably), especially young companies.
• Determine if large or small-cap stocks are favored in the current market.
• Pick companies with high management ownership. With their personal stake, there will be a tendency to make moves that will stimulate investor’s interest.
• Quarterly earnings should be up at least 25% in each of the past three quarters.
• Earnings should be up at least 25% in each of the last three years, or at least 40% for the past two years. If it is a young company, sales should be up over 50% for each of the past four quarters.
• If sales are not increasing by at least 10% in each of the past three quarters over the same quarters in the prior year, pass on it.
• Always average up with your winners – let your winners run.
• Never average down – get out of the stock if it goes against you. Buying more because it’s cheaper and a “bargain” is one of the biggest temptations, and very hard to resist. But dollar-cost-averaging individual stocks that are falling in price, is a really bad strategy.

3 Tips to Get You Started

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Exchange rates

The movements of exchange rates can have a dramatic affect on the gains or losses of your stock investments if you pick stocks in a different country. For example if I am a US investor and I invest in a UK company I am exposed to the exchange rates between the US dollar and the UK pound. If the value of my shares rises by 5% but the exchange rate moves against me in the same period of time by 6% then if I sell I will have made a net loss, despite the value of my shares increasing.

A simple way to avoid this is to simply invest in stock registered in the country in which you are based. Alternatively instruments such as ADRs and EDRs (American and European Depository receipts) allow investors to be exposed to overseas stock movements, using their own currency.

Brokers

The first step to smart stock investing is to select the correct broker. There are two main things you should look for; price and range of products.

Obviously price is self explanatory. Base you price selection on the expected volume of trades you think you will place as some offer a large discount the more you trade. Secondly the broker you choose should offer all of the products you would like to trade. Online brokers are often the cheapest. If not the admin of having multiple brokerage accounts may take your focus off your trading.

Loss and Profit Limits

Before making a trade a great idea is to think about what you want to achieve with a particular trade. Obviously making money is the first answer. However you should go further and write down at what price level you will see and take a profit or re-assess the stocks prospects. Similarly make a loss limit where if the stock falls to a certain value you will sell and accept your loss before it gets any worse.

Getting rich is simpler than you think

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Here is the single most important thing you will ever hear about investing: Getting rich is simple.

Not easy, but simple.

And here is the second most important thing you will ever hear about investing: You have no excuse not to do it.

Only three ingredients are needed: income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline. And armed with the following knowledge, that key third ingredient may be a lot easier to find.

Here’s how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

Here’s a similar scenario: If you start with a nut of $50,000 and add only $250 per month, you’d have $180,000, $516.000 and $1.4 million after 10, 20, and 30 years, respectively. All this happens through the power of regular investing and a simple-but-powerful concept called compounding.

Compounding

What is compounding?Compounding is the reinvestment of the interest you receive from the money you set aside. For example, if you invest $1,000 and earn 10% interest on your principal at the end of each year, you’ll get in $100 interest at the end of the first year. If you reinvest that interest, the second year you would start with $1,100, and thus would earn $110 interest. If you stay with it, you’d more than double your money every eight years.

“Compounding,” Albert Einstein said, “is mankind’s greatest invention because it allows for the reliable, systematic accumulation of wealth.” Einstein was a smart man. But you hardly have to be a genius to make this concept work for you.

The real magic of investing comes when you combine the surprising power of compounding with continuous and regular investments — in other words, discipline.

The best way to make these continuous investments happen is by setting up an account with a broker or mutual fund that automatically deducts a fixed amount from your bank account every month. “Automatic” is the operative word here. Trust me, if you don’t set it up that way, it won’t happen. Instead, you’ll end up pouring money in when the market is soaring and skipping payments when it’s heading down. Eventually you’ll get discouraged and give up.

Dollar-cost averaging

The process of continuously investing a fixed dollar amount is called dollar-cost averaging — a term that sounds much more technical than it is. Through dollar-cost averaging, you’ll end up buying more shares when a stock or fund is down, and fewer when it’s up. For instance, say you’re investing $500 monthly in a stock trading initially at $50 per share; so the first time, you buy 10 shares. If the next month the stock moves up to $62.50 your regular purchase will net you only eight shares. However, if the stock drops to $41.67, you’ll get 12 shares (not including any transaction fees).It’s easy to set up regular-investment mechanisms, thus harnessing the power of dollar-cost averaging. Mutual funds are the traditional way. But there are other outlets, as well, that allow you to apply the strategy with individual stocks or exchange-traded funds, which are baskets of stocks that identically track standard market indexes, such as the Dow Jones Industrial Average ($INDU).

Risk

Sure, investing in the stock market has risk. There’s always the chance the market will go nowhere for the next 20 or 30 years and you’ll end up no better than where you started. But there’s risk in everything, even CDs.With CDs, your original investment isn’t in danger. Most CDs are insured, and the federal government will step in and make you whole, even if your bank goes belly up.

But a problem crops up when something more sinister surfaces: inflation. At this writing, inflation, running at around 2%, is considered relatively benign. But is it?

Let’s do some math. Your real return is the interest you receive less the inflation rate. If your CD is paying 3% and the inflation rate is 2%, you’re only making 1% in real terms. If inflation takes off, say to 5%, your CD will probably be paying around 4%. In inflation-adjusted terms, you’ve lost 1%.

But it can get worse. Inflation hit 14% in the early 1980s. In such times, CDs and similar fixed-income investments don’t even come close to the inflation rate, meaning you’re losing serious money, in real terms.

By contrast, assets such as real estate and stocks tend to move with prices, and, over time, the stock market has outpaced inflation. For instance, in the 20-year period ending Dec. 31, 2001, the cumulative return of the market, as measured by the S&P 500 Index ($INX), was 1,606%, compared to 88% cumulative inflation over the same period.

What’s the point? Yes, there’s risk in investing in the market, but the odds are that continuous, regular investing combined with the power of compounding will make you rich.

The odds

If you count yourself a member of the “I want it now” generation, the idea of waiting 20 or 30 years to get rich probably sounds like a dumb idea.Sure, there are faster ways to get rich. You could win the lottery, or pick the next Intel (INTC, news, msgs) or Wal-Mart Stores (WMT, news, msgs). But don’t quit your day job just yet. Your chances of winning big in the lottery run around 15 million to 1, at best.

Meantime, naturally, you would be sitting pretty if you had had the foresight to plunk significant cash into Intel or Wal-Mart 20 years ago. But consider this: You would have lost money if you’d picked Advanced Micro Devices (AMD, news, msgs) instead of Intel, and you’d be broke if you’d picked Kmart (SHLD, news, msgs) (which ended up merging with Sears Roebuck) instead of Wal-Mart. In both instances, your retirement plans would be history.

Here’s the bottom line, like it or not: The fate of your retirement, your comfort in older age, probably lies in your commitment to the concepts laid out in the paragraphs above. For the vast majority of us, wealth creation is a slow and steady — and powerful — process. The tortoise almost always beats the hare.

It’s not easy. But it’s very, very simple.