The Best Investment for 2015

Sometimes the best investment is safe investments and 2015 might be one of those times. First, let’s look at your investment options. Then, we’ll focus on finding the best safe investments for 2015 and beyond.

Since early 2009 stocks and stock funds have been the best investment options. The past six years have often been referred to as “the stock market that nobody loves”, yet with the approach of 2015 the stock market continued to reach new all-time highs. Stocks are not cheap, but there are two sectors that might be interesting: oil stocks and natural resources funds (if oil prices get even cheaper); and gold stocks and funds (if gold gets cheaper). Neither are safe investments, but there could be opportunity if oil or gold truly get cheap.

At this point in time any bad economic or political news could trigger a reversal in stocks in 2015 or 2016. The risk vs. potential rewards suggests that stocks and diversified stock funds are no longer the best investment options. Now, let’s look at the flip side of the coin: bonds and bond funds. Historically, when the stock market tanks investors flock to bonds, which sends bond prices higher. Many investors see bonds and bond funds as their best safe investment options.

The problem here is that bonds and bond fund prices are near record highs as interest rates remain historically and ridiculously low. The problem: when rates climb significantly bonds and bond funds fall in price and investors LOSE money. Higher interest rates make existing bond issues and portfolios (like bond funds) less attractive. Looking at 2015 and beyond, bonds and bond funds are not likely to be your best investment options or even your best safe investments when rates threaten to go up.

In fact they never were truly safe. They just looked safe because interest rates have basically been on a downward trend since 1981, which sent bond prices higher and gave investors good returns. Now, the question is: where do you find the best safe investments (that pay interest) when you’re lucky if you can get 1% at the bank and even less in the money market?

The best safe investments might be staring you right in the face. If you have a retirement plan where you work (like a 401k or 401a) one of your options might be a stable or “guaranteed” fund. You might be able to lock in 4% or more for a specified period of time. If you have an older “universal life” insurance contract you may be able to add money to it at a “guaranteed” minimum interest rate of 3%, 4% or more. The same could apply if you hold an older retirement annuity contract. Returns like this might not excite you, but compared to stocks and bonds they could be the best investment options on the horizon.

If interest rates increase significantly across the board (both long-term and short-term rates) and you need quick access to your cash, the good old money market mutual fund could be one of the best safe investments. As rates go up, their dividends automatically adjust upward as well. They are not “insured” by the federal government, but many hold short-term government securities (T-bills) which are considered to be one of the truly safe investments in the world.

In normal times the issue of finding your best investment options focuses on stocks vs. bonds. I’m not alone when I fear that these are not normal times. We (and much of the rest of the world) have lowered interest rates to stimulate our economy and support our markets. There’s not much room to lower rates further in the future. That’s why I suggest that the best safe investments could possibly be the best investment options available for 2015 and beyond. When the dust settles, the debate over whether stocks or bonds are the best investment will likely take center stage again.

Investing In Lombok, Indonesia. How, Why and What You Should Have

Property investment potentials in Indonesia have attracted not only local investors, but also foreign investors, whether individuals or companies. Lombok, especially, is one of the hottest islands to place property investment plan, especially holiday and hospitality properties. While the nearby Bali is always interesting for holiday property investors, Lombok has entered the spot where it should be considered more.

Why Should I or My Company Investing in Lombok?

There are many reasons why you or your companies should consider investing for property in Lombok, especially those who run hospitality, holiday accommodation, restaurant, and entertainment businesses. Here are some things to consider:

• Lombok has slowly become more recognized in the past decade, and has been promoted as ‘the new Bali,’ which offers many places that are still unexplored and pristine.

• Lombok has grown in popularity among beachgoers and surfers, especially since Lombok also has many unexplored or pristine beaches with really great waves.

• Lombok government is in efforts to increase local revenues by attracting tourist and investors, which means that the investment climate is quite positive for many years to come.

• Lombok has been more accessible with the newly built international airport; plus, the availability of cheap airlines has enabled more people to go to Lombok, opening even more investment opportunities.

With these amazing possibilities and potentials, Lombok has become favorite place to invest among individual and group investors. Also, many companies have started to build resorts, hotels, restaurants, bars, salons and other services in some areas, to attract more visitors and finally more revenues. This is a great opportunity if you have company and want to invest in Lombok.

But, there is some hassles that you must pass if you want to get property in Indonesia as individuals. If you have an experience before, you will see that there are several requirements of foreign investors to own full property title in Lombok and Bali, such have to be partner with nominee and lawyer. However, Indonesian government has Penanaman Modal Asing (Foreign Investment) or PMA, which is included a scheme governed by law that regulated foreign investment and investor acts to open business in Indonesia.

Lombok government expects more investors to come and provide more facilities as well as employment opportunities, and therefore, foreign companies can invest for Lombok property even without any partners, representatives, or nominees. The company just needs to hand business plan, proposal, and other required documents, and fulfill all formal requirements before being allowed by the state to get property.

This is definitely a great opportunity for foreign investors to get more profits from Lombok property and provide more contributions and job opportunities for the local. By opening business in Indonesia and buy property in the name of the company, investor can get their dream property in Lombok or Bali, and they can get it without have to deal with extra hassles of nominees and lawyers.

Basically, PMA is the official name of foreign investors that open business in Indonesia. If you are a big-scale investor with big capital and business plan, using PMA scheme is the best and most profitable way to get property in Indonesia, including in Lombok.

What to Prepare for PMA Scheme

If you are a foreign investor interested in buying Lombok property and you want to buy it under the PMA scheme regulated by Indonesian government, you must make sure that you provide:

• Good and concise business plan with profit projections, business goals, business schemes and other required information.

• Proof and documents about how you(your) business plan will help contributing to surrounding communities, such as in relation with employment, life quality, local investment scheme, and national revenues depend on how big your company is.

• Proof that you have deposited certain amount of money in the reputable bank.

• Other formal requirements as requested by local and national governments, depend on what kind of business you have.

You also have to provide other requirements such as formal documents that are essential in forming new foreign investment or business. Usually, a foreign business can be officially called PMA after 3 or 4 months of period after taking care of all requirements.

Why Following PMA Scheme for Lombok Property Investment?

If you follow PMA scheme, you will be able to own a property in Lombok or basically any other location in Indonesia, in which your company or business becomes the official holder or the property title. This is a great option if you plan to spread the business operation to Indonesia, or if you plan to work and stay in Indonesia, or if you do not want to have partnership and other hassles when owning property in Indonesia.

What if I want to Invest as Individual?

Owning a property in Indonesia, especially in potential holiday development area like Lombok, is a great investment if you plan to start a business here.

PMA is one of our suggestion if you want to invest as company. But, if you are one of the individual investors, leasehold transaction may be one of the best methods to gain full title of the property.

Leasehold transaction gives individual investors the right to own full property title, without having to follow Foreign Investment scheme stated by Indonesian realty law. In this case, the investor does not have to own a business in Indonesia or open a company in this country with proposed business plan. Also, this plan does not require individual investor to have nominee or representative that will give the property title through legal steps after the investor buying the property.

Leasehold transaction works like this: once the investor buys the property in Lombok or Bali (or basically any other areas in Indonesia), they can put their property in lease for up to 25 years. Of course, during that time, the owner cannot actually use the property personally, but the owner can have full title of the property without having to go through legal steps with lawyer and nominee (representative).

Benefits of Leasehold Transaction

In Indonesia, foreign investors who want to get any property (including in Lombok) must do it through nominee to get full property title, in which the nominee get the title first during the transaction, and later hands it to the owner rightfully and legally through lawyer as witness. This means extra time, cost and hassle for the owner to get full ownership of the property. Leasehold transaction helps to get the title without having to go through nominee and lawyer.

Also, since the property owner must put the property on leasehold, it is great for property buyers who aim for passive income. Investors can get steady income from people who rent or lease the property, and after certain amount of time, investors can finally gain their property titles back as individual owners.

If you are a foreign investor and wish to have property in Lombok or Bali, but want to keep the property title fully without using any representative, then you should consider this leasehold transaction.

So, are you interested in investing in Lombok and Bali areas right now? If you are, you need to consult with reputable realty service from Indonesia.

Why You Need Realty Company Service for Property Investment

If this is your first time buying property in Indonesia, you will need help from reputable institutions that can guide you through all legal and formal aspects of purchasing until you can get the property title in your hold. Or, if you are a business owner, you may want to avoid problems since the beginning by property conduct all formal steps and requirements necessary to obtain Lombok or Bali property. However, there are other aspects in which realty service in Indonesia will be necessary.

In Lombok and Bali, many land owners use traditional rules to manage their lands. In Lombok, for example, there is the term of ‘Pipil’ or unregistered land that has been passed from generations. Pipil land owner must converse the land first before being able to sell it; a process that takes about 1 year before the investor can get the full title of the land. These aspects have been understood by realty service, and they will help every investor getting the property in pleasing ways.

Asking for help from Indonesian realty service also means that you can get extra recommendations about Lombok or Bali property from it, especially if you never buy one before. Remember, Bali and Lombok are popular so you need to pick the right time and price to get a piece of land or property. Realty service with good knowledge about property trend in Indonesia will help investors earning future profits by choosing the right property or land. This is why that the cost for realty service is just like small investment for the big one.

What is Pipil Land

In Lombok, Pipil term refers to a piece of land that has been passed down from generations, which has happened in a long period that the current owner usually does not have the official registration certificate. Therefore, it can be a real slow process for the investors if they want to buy the land, even if the land owner agrees with the price. There are certain amounts of period both parties need to set everything up before the land can be sold.

First of all, the original land owner must apply for formal registration certificate at Indonesian Land Office, as this is a formal requirement needed to prove the identity and documentation of the land as well as converse the land status. This process can take up about 3 to 4 months long. However, as for the actual purchase, it can happen at least 12 months after the official conversion (which is, after the official certification is released). This means that any investors that want to buy a Pipil land must prepare extra time.

Pipil Conversion and Benefits of Getting Lombok Property

Many potential property investments in Lombok are in the shape of lands, not buildings. These lands are waiting to be converted into hotel, resort, surfer’s cabin, and many more. Buying only the land gives investors more freedom to build the dream property. However, since Lombok is still thick with tradition, investors must follow the tradition, including waiting in certain periods of time when buying any Pipil land.Despite having to wait for land conversion if you get Pipil land, the benefits of this investment are numerous.

Whether you want to hold property title as individual, leasing the property through leasehold transaction, or following PMA (Foreign Investment) scheme, realty service helps you going through all legal matters and documents.

Lombok is one of the hottest spots in Indonesia to own property, especially holiday season. However, foreign investors also need to remember that many people in Lombok have their lands according to traditional rules, which can be perplexing and confusing for people who is not local.

Fortunately, Indonesian realty law also covers everything all foreign investors must know about dealing with traditions related to land selling and purchasing, including Pipil land. If you need anymore information about Lombok, how to Invest, what it needs, don’t hesitate to ask us or visit our websites. We would be pleased to answer all your question.

Have a Good Day!

How to Make Money Investing in 401K Plans in 2015-2016 and Beyond

Torie, like millions of other people, knows that she needs to make money investing in 401k plans in 2015-2106 and beyond (she has a couple) in order to retire comfortably. What she also needs to know: 401k asset allocation, how to pick and manage her best 401k investment options, and the outlook for 2015 and 2016. Let’s take a look at how she and you can make money in 2015, 2016 and beyond (or at least make the best of it) if you’re in the same boat.

Although it’s been easy to make money investing in 401k plans in recent years, this is not always the case. The first thing Torie and you need to do is to set a goal (Torie’s is to retire in about the year 2040). Second, be honest about your personal risk tolerance. Torie’s is “moderate” – but definitely not aggressive! Third, review your present 401k asset allocation to determine whether the investment options you hold are in line with your risk tolerance. Are you in the best 401k investment options, and in the right proportion?

Finally, you need to understand that 2015 and 2016 could be a difficult time to make money investing in 401k plans. The reason: weak economic forecasts make yesteryear’s best 401k investment options vulnerable to losses. Stocks are pricey and so are bonds. Assuming your risk profile is similar to Torie’s (she would like to make money but wants to avoid heavy losses) what can you do now to stay on track, make money, and avoid heavy losses if 2015 and beyond turns ugly? We’ll use Torie as our example.

A number of years ago Torie decided that she wanted to make money investing in 401k plans, but wanted to keep things simple. She had changed jobs once and was planning on another change in the future. With both employers she had set her plan up with 50% going to a safe stable account and 50% to a Target 2040 fund. She was busy and pretty much ignored her statements over the years. After all, her goal was to make money investing, and she could see at a glance that her portfolio balance was growing. Now, she needs to take a closer look at her 401k asset allocation to see what percent is invested in each of her two 401k investment options.

In early 2015, a closer look revealed that both plans had a portfolio asset allocation far riskier than she had expected. The target fund represented almost 80% of her assets in her first plan and 75% in her current plan. What happened, and what action should she take to get back on track and still keep things simple? What happened was that her target 2040 funds turned out to be one of the best 401k investment options in her plans and they far outperformed her safe stable accounts.

The other best 401k investment options had been stock funds, but Torie considered them to be too risky. With the target fund most of her money was actually invested in stock funds, with the rest in bond funds; and both fund types had performed well heading into 2015. Her plan was to continue to make money investing in her 401k by holding her target fund and a safe investment. That way she was invested in stocks and some bonds as well to give here her portfolio some balance.

What she now needs to do is to REBALANCE her 401k asset allocation so that 50% of her portfolio assets are again equally invested in each of her two chosen investment options. That cuts her risk considerably and it fits her comfort level. Now, can you or Torie make money investing in 401k plans in 2015-2016 with a 401k asset allocation that is allocated half to safe investment options (money market funds or stable accounts) and half to stock funds or target funds? Yes, unless the stock market falls and bonds also take a hit.

How can you make money investing in 401k plans in 2015 and beyond if both stocks and bonds get hit hard? You would need to move the vast majority of your money to the safe havens available. In other words, your best 401k investment options would be the stable account that pays interest (if one is available) or the money market fund (which your plan should have, but currently pays very little in dividends). For the average investor who needs long term growth (like you and Torie) this is an extreme measure.

Remember, your real objective is to make money investing in 401k plans, so you can have a secure retirement. Moderate risk is part of the program. I use Torie as an example because her situation is typical. Her 401k asset allocation fits her (and likely your) risk tolerance and should produce growth over the long term. She has chosen the best 401k investment options to reach her goal of retirement in 2040 (if you plan to retire in 2030 go with the 2030 target fund, and so on). Half of her money is safe and the other half has growth potential.

Plus, she has a plan to manage her 401k investment options. If the markets get ugly in 2015 and 2016 she will not make money investing in 401k plans, she will lose money. But she has money going into her target fund every pay period buying shares at cheaper and cheaper prices, and money going into and accumulating in her safe investment. Anytime her 401k asset allocation shows that 60% or more is in the safe account she will REBALANCE back to 50%, which means taking money from the safe account and adding it to the target fund. Then, when the markets turn, she’s well positioned to make money investing in 401k plans for a secure future.

Finding the Best Investment Opportunities Now

I once read that NOW is always the toughest time to find the best investment opportunities, and that sometimes it is anything but easy to make money investing. Now is 2015, and once again investment opportunities are out there if we can only find them. Where might we make money investing in 2015, 2016 and beyond?

People tend to throw the words “opportunity” and “opportunities” around a lot, especially when they are trying to sell you something (like swamp land or desert properties). For example, “the opportunity of a lifetime” or “one of the best investment opportunities I’ve ever seen”. We all learn sooner or later that real opportunities are the exception; and not the normal occurrence. Let us keep this in mind as we try to find ways to make money investing in 2015, 2016 and beyond.

If you have a brokerage account with a discount broker the world of investment opportunities is available to you at a cost of about $10 a trade. In one account you can make money investing by making a bet on stocks, bonds, interest rates, commodities; and in a wide array of markets, both domestic and abroad. Your broker’s website should offer lots of information to sift through, but it won’t tell you where the best investment opportunities will be in 2015, 2016 and beyond.

Here’s a good way to look at things: now is always a good time to look for the best investment opportunities, but it may not be an easy time to make money investing. For example, natural gas might look cheap, but it has been going down in price for several years. Interest rates are near all-time lows, but this has also been the case for years. On the other hand, stock market volatility has fallen as stock prices continued to rise. Stocks in general are now quite expensive, and super-low interest rates have made bonds expensive by historical standards.

No matter what happens in the markets in the next couple of years, many of the best investment opportunities are available to average investors in the form of ETFs (exchange traded funds) which trade as stocks. If you don’t have a brokerage account go to a financial website like Yahoo Finance and sift through the ETF performance section… looking for the best and worst performers for various time periods. You’ll be surprised by the wide array of opportunities available. Now, you must decide how you want to try to make money investing in them.

Let’s look at a couple of extreme examples you could find in early 2015. The best performer over the past 3 years (up 94%) was a Leveraged Equity fund that invests in healthcare stocks with 3x leverage. It was also up 20% in the last 3-month period. The worst performer was a 2x leveraged volatility fund, which was down 90% over the past 3 years and also down 15% over the last 3-month period. Other big losers included: gold stock funds and leveraged inverse equity (stock) funds. The real question is: do you jump on the big winners to make money investing? Or, will the big losers be the best investment opportunities for 2015, 2016 and beyond?

Here’s a real extreme example from early 2015. The best investment over the last 3-month period was a 3x LEVERAGED INVERSE CRUDE OIL ETF. It went up 285% (in 3 months). What’s that? INVERSE means that as the price of oil FALLS, the share price of this fund goes UP; and 3x LEVERAGED means it is designed to go up 3 times as much (on a percentage basis) as the drop in oil price. This was one of the very best investment opportunities in the months leading up to 2015, because oil prices then started to fall like a rock. But after a gain like that, it’s probably no longer the best investment if you want to make money in 2015 and beyond. This was yesterday’s opportunity.

On the other hand, there’s always the possibility that oil prices will rebound strongly in 2015, 2016, or later. If and when this happens, some of the best investment opportunities will likely be found in oil and other energy stocks (or ETFs) that fell in line with the previous drop in oil prices. Timing and anticipation are the keys to finding the best investment opportunities. You can make money investing by jumping on current winners, but the best investment opportunities are often found when a change in price trend begins.