March 5th, 2009 by Laura Macavoy

Companies, to raise capital, will sell small portions of their company to the public. These are called stocks. Someone who owns a stock is considered a shareholder. A shareholder has the right to voice his opinion about the companies management and share in the profits.

The reason a company sells stock is because they need. A company may want to purchase property, for example, selling stock will give them the capital to do this. The value at which the stock is sold depends on the growth and success of the company.

When a company is successful in the market, the stocks value will. The purchase of stock of a new company is a high risk because there is no assurance that new company will be successful. An investment in a well reputable company will have lower hazard, but great potential for a gain in value. As for example those who purchased the Reliance stock and held it in the beginning had a great return of their investment.

NASDAQ (the National Association of Securities Dealers Automated Quotation System) and NYSE (the New York Stock Exchange) are where companies sell their shares to the open market. You may buy stocks that are not listed through the exchange but this is a topic for another article.

Investors will have a stock broker that will make all the transactions for them. Brokers will be instructed by their clients to sell or buy stocks. Investors can instruct their brokers to buy or sell a stock when it reaches a determined value. The broker will then find a buyer or seller of the stock. A commission is granted to the broker for these services.

Business, economy, investing, Investments, investor, mutual funds, recession, Stock Exchange, stock market

March 4th, 2009 by Doc Schmyz

If you have not already heard the term reverse mortgage, it sounds like a strange thing. Reverse mortgages are becoming more and more popular these days, but are they scams or are they legitimate?Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay YOU the mortgage payments? Let’s review what a reverse mortgage is so these questions can be answered.

The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. These backwards mortgages are usually performed through a bank or broker. The homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

Why would retired persons want to have a reverse mortgage? It provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

One very common misconception about the reverse mortgage is that the bank eventually takes ownership of your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due only when the homeowner moves out, such as moving into a nursing home, or becomes deceased. At those times, the survivors can repay the loan themselves if they want to keep the house. They can also sell the home and repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.

These mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, as well as unforseen costs can creep up. Use a reverse mortgage to help yourself or your aging relatives to gain the financial security in retirement that they worked so hard to achieve.

Business, Finance, finances personal finance, investing, investment, Investments, investor, investors, real estate, real estate investing, retirement, small business