My Account Store Store
Clubs
Webinars
Investing
SSG Tutorial
Blog

July 19, 2006 -
Don't let the ICLUB Insider get caught in your bulk mail filter! Please add our "From" address (marketing@iclub.com) to your address book or spam filter to allow our email to reach you.

ICLUB Insider July 19, 2006
THE LATEST NEWS ON INVESTING SOFTWARE BUILT BY ICLUBCENTRAL INC.

Summary


ICLUBcentral Releases 3.1 Update for Club Accounting

A new update is now available for Club Accounting 3, the most powerful investment club accounting software on the market today. Version 3.1 is a major revision, addressing both outstanding software issues and feature requests from customers like you.

What's new in Club Accounting 3.1:

  • New Capital Gains & Losses report (like Schedule-D) helps you track year-to-date capital gains and losses

  • New Security Dividends Report gives you quick access to dividend information for all securities

  • Improved display for charts and graphs

  • Faster reports, including a progress bar while they run

  • Fixed an error preventing payments for withdrawal in excess of two steps from being deleted

  • Remarks are now viewable when editing merger and spinoff transactions

  • Spinoff transactions now display cash-in-lieu amounts when edited

If you're a current user of Club Accounting 3, you should be receiving your complimentary 3.1 upgrade CD in the mail shortly. Due to changes in the underlying Microsoft .NET technology incorporated in Club Accounting version 3.1, this update cannot be delivered to users via the auto-updater functionality in the program. Please follow the instructions included with the CD to install the updated program.

There is no charge for this update to version 3.1, but you must be using version 3 of Club Accounting in order to install it. Those users still running versions 1 and 2 of Club Accounting are encouraged to take this opportunity to upgrade to the latest version of the software, as earlier versions do not recognize the recent changes in Federal tax law, and will be unable to use the Tax Printer software. Remember, support for Club Accounting 2 will end on October 16, 2006 (less than four months from now), so upgrade now to the most powerful club accounting software on the market today -- Club Accounting 3.1!

If you have any problems installing the version 3.1 update or questions about upgrading from Club Accounting 1 and 2, please contact ICLUBcentral Technical Support.


Investment Wisdom: Understanding Risk
by Ralph Seger, CFA

Ralph Seger co-founded Seger-Elvekrog Inc. in 1981 and is now Chairman Emeritus of the firm. He was also a founder of the Investor Advisory Service, now published by ICLUBcentral Inc. In this issue of ICLUB Insider, we are pleased to offer the second of a multi-part series called "Investment Wisdom" that will offer our readers access to Ralph's wealth of financial knowledge. Be sure to watch for this space for future tips from Ralph.

No matter how you decide to invest your money, risk is a constant. Thus, the road to financial stability lies not in eliminating risk in your investment portfolio, but instead in managing it.

There are four basic types of risk, as it relates to portfolio management.

  1. If you hide your money under the mattress, you risk a Loss of Purchasing Power. This is of course due to inflation, meaning that it will cost more to purchase the same product at some later point in time than it does today. Think back - a loaf of bread has gone up in price 400 percent since the end of World War II. The prices of houses and cars have increased even more so.

    Consequently, a fixed-income U.S. government security (the equivalent of stuffing your savings in your mattress) contains real risk of loss of purchasing power. Buying a bond as a long-term investment is like using an umbrella in a monsoon.

  2. Business Risk involves all the trials and tribulations of running a business. As a shareholder, you are a part owner of the business. The profits and prices are affected by all the forces that impinge on a business, including the economic cycle, competition, changes in the prices of raw materials, the cost of energy, labor costs, interest rates, and research & development. However, favorable parts of the economic cycle can and do have a positive effect on profits.

  3. Market Risks are the up and down price fluctuations of securities. Such changes are not always logical or foreseeable. An overvalued market can go into a decline as investors realize that prices are discounting not only the immediate future, but also the long-term projections.

  4. Interest Rate Risk affects market valuations. Prices of stocks and bonds tend to move inversely with regard to interest rates. Long-term interest rates reflect investors' perception of future rates of inflation. If investors perceive a future potential rising rate of inflation, they will demand higher interest rates to offset the problem of purchasing power risk. Higher interest rates also result in a decline in bond prices. Corporations are going to pay more for borrowing, which will cut into profits. If interest rates move up sharply, investors may look into fixed-income investments, especially when balanced against the adverse fluctuations in stock prices. There may be a so-called "flight to safety" meaning many investors will panic and switch switching to a U.S. Treasury security, the safest security in the world.

The Federal Reserve Board uses its power to influence short-term interest rates to move the economy in the direction it perceives as appropriate. When inflation rears its ugly head, the Fed's recipe is to slow down the rate of growth of the economy by raising interest rates. When the economy slows to an unacceptable rate or dips into a recession, the Fed responds by trying to stimulate the economy, generally by reducing the Federal Funds rate.

Changes in short-term rates usually have an affect on other interest rates such as the prime bank loan rate, commercial paper rates and even long-term rates such as mortgages. Both stocks and bond prices are sensitive to interest rates.

Once you fully understand these risks, you can then move on to design a portfolio that strives to lessen the impact that these risks might have on your investments.

In our next installment, Ralph will address tactics and strategies - both effective and ineffective - that are commonly used by investors to address these risks.


(Non)Trashy Beach Reading

It's that time of year again. The sun is high, the sand and surf are waiting, and millions of Americans like you are heading for our beautiful coastlines. At the same time, many of you beach-goers are indulging in the guilty pleasure of supermarket romance novels. (Hey, we're not here to judge.)

But this year, instead of spending the prime tanning hours pouring over ribald tales of jealously, treachery, and deceit, why not take some time to improve your investment portfolio? Move over Danielle Steele -- here comes the Investor Advisory Service (IAS).

No, there aren't any graphic love scenes, but the IAS does provide nearly 35 years of investment knowledge and success. Developed independently by the Seger-Elvekrog money management firm (founded by ICLUB Insider contributor Ralph Seger) and published by ICLUBcentral, the IAS has a sterling history of guiding individual investors like you toward financial success with straight-forward investment information. Each year since 2000, the IAS has outpaced the overall market as represented by the Wilshire 5000, and the cumulative returns it has generated have been substantial. For example, an investor following the newsletter's picks since January 31, 2000 could have earned a return of 79.8% on his or her investment (a 12.4% annual return) by January 31, 2005, compared to a loss of 5.5% of the Wilshire 5000 Index (a -1.1% annual return) during the same period (as tracked by the Hulbert Financial Digest).

The IAS's shorter and longer-term performance has also been exemplary. In the twelve-month period ending on October 31, 2005, the IAS racked up a 14.9% return, compared to the Wilshire 5000's 10.7%. From December 1995 to October 2005, the IAS earned a 13.7% annual return, compared to just 8.9% for the Wilshire 5000. Even when adjusted for risk, the IAS still beats the total market index.

Each issue is packed full of comprehensive and unbiased information, including:

  • Complete Stock Selection Guides (SSGs) on three companies per month introduce you to stocks hand-picked by our staff of Chartered Financial Analysts

  • In-depth analyses of these three companies and explanations of the SSGs help you improve your understanding of conservative, long-term investing methodology

  • Notes on stocks in the IAS portfolio, with comparisons of current and buy prices, enable you to stay on top of your portfolio

  • Sell recommendations and e-mail updates give you the information you need to make the right decisions

  • Rankings of more than 80 previously recommended stocks and the latest market news to keep you in the loop

That's more satisfaction than you'll get out of a paperback, no matter how many dramatic cliffhangers there are. Plus, as a special summer offer, new subscribers to the IAS will receive a 28% discount off the online subscription price, or 35% off a print subscription. Simply visit our online store, select either an online or paper mail subscription, and enter the promotional code "UR2X" in the space provided. Or, call us at 1-617-661-2582 to set up your account over the phone.

Not convinced? Downl oad the May 2006 issue to see for yourself all the robust investing tools the IAS has to offer, including focused stock studies on Fastenal (FAST), SkyWest (SKWY), and T. Rowe Price (TROW).

So, put down those trashy novels and grab the latest issue of the Investor Advisory Service. It's everything you and your portfolio want from summer reading. (You know, minus the love-triangles.)

Sign up today!


Read past newsletters, subscribe, or unsubscribe at:
http://www.iclub.com/newsletters/

Copyright 2006 ICLUBcentral Inc. All rights reserved.

Some ICLUBcentral products use the investing methodologies of BetterInvesting, a national nonprofit organization dedicated to investor education. BetterInvesting assumes no liability or obligations with respect to the investment education information or other content presented in the ICLUB Insider. For more information on BetterInvesting, please visit http://www.betterinvesting .org.

Newsletter Archive

Subscribe to newsletter

Unsubscribe from newsletter


 
  
About    Press    Management    Privacy Policy    Terms of Service    Contact

copyright © 1989 - ICLUBcentral Inc. or its affiliates