Investing can be a daunting task for anyone, especially for those who are new to the game. With a plethora of options available, it can be challenging to know where to start and what investment vehicles to choose.
One option that has gained popularity in recent years is listed investment companies (LICs). In this beginner’s guide, we’ll take a closer look at what LICs are and how they can be a valuable addition to your investment portfolio.
What are LICs?
LICs are publicly traded companies that invest in a diversified portfolio of assets, such as stocks, bonds, and real estate. They are similar to mutual funds, but instead of investing in the fund directly, you buy shares of the company that owns the assets.
This allows you to gain exposure to a variety of investments through a single stock, making it an easy and convenient option for those who want a simple and diversified investment portfolio.
Benefits of Investing in LICs
Diversification: As mentioned earlier, LICs offer a diversified portfolio of assets, which helps to spread risk and minimize the impact of any single investment.
Professional Management: LICs are managed by professional fund managers who have the expertise and experience to select and manage investments on your behalf.
Liquidity: LICs are listed on stock exchanges, making it easy to buy and sell shares, and providing you with the flexibility to make changes to your portfolio as needed.
Potential for Higher Returns: By investing in a diversified portfolio of assets, LICs have the potential to deliver higher returns than investing in individual stocks.
Lower Costs: Compared to other investment vehicles, LICs often have lower fees and expenses, which can result in higher returns for investors.
Risks of Investing in LICs
Market Risk: As with any investment, LICs are subject to market risk, which means that the value of your investment can go up or down depending on market conditions.
Credit Risk: LICs may invest in bonds, which are subject to credit risk. This means that if the issuer of the bond defaults on their debt, the value of your investment may decrease.
Management Risk: The success of a LIC depends on the ability of the fund manager to make good investment decisions. If the fund manager fails to perform, the value of your investment may be negatively impacted.
How to Invest in LICs
Research: Before investing in a LIC, it’s important to research the company and its portfolio of assets to ensure that it aligns with your investment goals and risk tolerance.
Consider the Fund Manager’s Track Record: Look at the fund manager’s track record to see how they have performed in the past and whether they have a history of delivering good returns.
Diversify Your Portfolio: As with any investment, it’s important to diversify your portfolio to minimize risk. Consider investing in multiple LICs to achieve a well-rounded and diversified investment portfolio.
Monitor Your Investments: Regularly monitor your investments and make changes as needed to ensure that your portfolio remains aligned with your investment goals.
In conclusion, LICs can be a valuable addition to your investment portfolio, offering the benefits of diversification, professional management, liquidity, and the potential for higher returns. However, it’s important to understand the risks involved and to do your research before investing. By following these tips, you can ensure that you make informed investment decisions and achieve your financial goals.
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It can be difficult to find your dream home, even when the downturn in house prices is the largest on record. If you’re considering finance for your home build then you need to understand how construction loans work. The simple reason is that houses are still incredibly expensive, and, even if you have the funds to buy, you’re getting someone else’s idea of a dream home. It doesn’t matter how much you spend, you’re going to need to modify it to suit your own tastes.
That’s why so many people are building their own homes. It’s actually cheaper than buying and you get to design the layout yourself.
Of course, you still need enough funds to complete the build, that’s where a corporate finance specialist comes in handy!
The Lending Criteria for construction loans:
The first thing to understand is that the loan company does not have a physical asset to secure the loan against. This makes this type of lending riskier.
As such, the criteria tend to be tighter, you’ll need a good credit history, and the percentage they will lend you is going to be less than with a pre-built home.
It’s likely that they will expect you to put 20-30% of the funds upfront yourself. This shows your commitment and reduces your risk.
The Lending Stages:
Once you’ve agreed on the number of funds that you’ll need the loan company will not just give them o you. Instead, there are released in three distinct phases:
1. Foundation:
The first step is to purchase the land, clear it and build the foundations. Along the way, you’ll need to get planning permission and the designs approved.
This is the stage where little appears to happen but it creates the base for everything else.
Once the finance company is happy this is completed they’ll release the second installment:
2. Construction:
The main construction phase involves getting the walls and roof up. In short, your building project will start to look like a home. This will be a frame.
You’ll need to verify with the lending company exactly what is included in this stage, they may want to see doors, windows, and internal wall ups.
3. Finishing:
Finally, the third stage of funds will be released and this will cover the most labor-intensive stage, where the electrics are fitted, plumbing completed, and the interior finishing is done.
This doesn’t mean your home is ready to move in, this will depend on the contract you’ve agreed with the builders. It’s possible you’ll still have to finish the decorating.
Construction loans can be used if you’re undertaking the building work yourself, or if you’re using a company. But, you’ll need to have each stage checked and signed off before the next lot of funds are released, it reduces the risk to the lender.
Once the house is completed the lender will expect the loan to be repaid very quickly. At this stage, you can obtain a standard mortgage for your home.
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There is no other global industry that is experiencing the AI revolution as much as the banking and financial industry. These two sectors are projected to benefit the most out of Artificial Intelligence and machine learning algorithms, platforms, and software. The use of Artificial Intelligence in the banking and financial industry is a rising trend and it is creating a huge impact.
Also, this impact can be seen in the Artificial Intelligence job market. So, for grabbing the upcoming job opportunities you must enroll for an Artificial Intelligence Course, Online Training and Certification Course.
This technology has completely transformed the traditional methods of handling our money deposited in the bank. At the same time, artificial intelligence in the banking and financial sector has changed the way industries are solving traditional banking problems. The solutions are already widely deployed by several top banks and it has enhanced the banking experience by leaps and bounds.
The use of Artificial Intelligence in banking and related industries is more than chatbots. It is a fast-evolving technology that is becoming better and smarter day by day. Due to its numerous benefits, the banking sector remains one of the first adopters of technological innovation. Here is why and how artificial intelligence is contributing to the development of the two industries. But first, let’s understand what is Artificial Intelligence?
Artificial Intelligence - All You Need To Know
Artificial intelligence is one of the greatest technological innovations by mankind. It is a rapidly developing technology that has emerged as the trend to fulfill the needs and desires of humans to create machinery that could mimic human abilities and perform tasks to reduce human efforts. AI, also known as machine learning, is an offshoot of the field of computer science that uses several other branches of the scientific field to develop AI platforms. Some of the commonly used processes in the development of AI software are learning, reasoning and self-correction. And some of the commonly used applications are knowledge engineering, machine learning, natural language processing, machine vision, expert system, deep learning, robotics, automatic programming, virtual personal assistants, internet of things, translation, simulation modeling and more. The list is huge to list it out here.
So far, the technology has successfully able to demonstrate impressive human capabilities such as speech recognition, language recognition, decision making, problem-solving, Q&A, manipulation, and recording of data and objects, learning, planning, reasoning, and mathematical calculations. All of this and more helps in accomplishing redundant, complicated and repetitive human tasks without human intervention and a greater level of accuracy.
With the advent of AI in banking and finance, financial institutions are able to serve their customers at a reduced operational cost due to the automated processes. At the same time, the banking procedures that were once considered time-consuming and laborious have become far more convenient and efficient.
The automated processes have opened up new avenues that allow banking and financial leaders to explore new management styles. With the help of AI, industry experts are able to analyze a huge amount of data and gather insight that is imperative for the improvement of the business. Data-driven management decisions were once considered a tedious task has now become an effective tool for management-level problems.
Banks and financial institutions are most vulnerable to cybercrime and fraudulent behavior. With the adoption of AI, using a predictive approach, they provide a safe and secure environment to financial services and banking institutions. With a large amount of information and a detailed understanding of human psychology, such scenarios can be prevented. Also, AI in finance and banking ensures better and stricter compliance of regulatory policies and standards.
Meanwhile, technology ensures convenient banking methods for clients. It empowers customers to use voice assistants or chatbots to perform complex banking procedures efficiently. With the help of natural language processing, this technology can provide answers to the questions of the clients and help them make better decisions with customized solutions. Improved customer service is one of its many great benefits experienced by both employees and customers.
Application of Artificial Intelligence in Financial Services:
The application of artificial intelligence in financial services have benefited the industry massively. This has led to the rise of bionic advisory the latest trend that used machine calculations and human insight to provide much more efficient advice.
Risk assessment in financial sectors is another key segment of banking and financial services experiencing many benefits of the use of Artificial Intelligence in banking. Risk management is one of the most complex fields in financial services which is simplified by machine learning and its intelligence.
AI can combine knowledge of market trends, consumer patterns, and potential risks to develop an intelligent solution and perform a risk assessment of various financial services and products. The predictive and proactive analysis can help in the smooth processing of the entire procedure.
It is apart from the above-mentioned contributions of AI technology in the banking and financial sector, the technology largely contributed to the most recent revolution, the digitization of bank. With the help of Artificial Intelligence platforms and machine learning software, banks were able to move through the elaborate and complicated process quickly and easily. It allowed the massive shift without disrupting the existing structure and records.
Future of Artificial Intelligence in Banking and Finance:
Implementations ofAI in banking and finance have benefitted in many ways and it has brought a revolutionary change in the industry. All in all, it offers efficient and customized solutions to the problems related to individuals’ personal fortune. Technology is evolving every day. Scientists and experts have made some devoted efforts to explore the potential and learn and relearn the patterns of AI that can contribute to the banking and financial sector.
Due to which, AI has led to the massive development of these two sectors and made some valuable addition to the industries. There is a progressive evolution that is expected to take the experience of banking and financial services several notches higher. Studies suggest that AI can contribute nearly $1 trillion to the Indian economy by 2035. Therefore, many industries including banking and finance are investing in technology in a big way.
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Most people understand that bankruptcy can help you discharge the debt if you're in a bad financial situation.
They also understand that bankruptcy can hurt your credit score. But can bankruptcy ruin your credit entirely?
The Importance of Talking With an Expert
First, if you’re considering filing for bankruptcy protection, make sure you talk to a bankruptcy lawyer. A bankruptcy lawyer will have the knowledge and expertise necessary to help you determine whether filing is appropriate for you and which type of bankruptcy you should pursue.
They'll also help you understand the core process of filing for bankruptcy and setting your expectations for timelines, costs, and consequences. Lawyers are an indispensable resource here, so don't neglect to hire one.
Different Types of Bankruptcy
You should also understand that there are different types of bankruptcy. Different types of bankruptcy manage debts in different fashions and have a different impact on your credit score.
For example, Chapter 7 bankruptcies tend to stay on your credit report longer than Chapter 13 bankruptcies, due to the fact that Chapter 13 bankruptcies frequently allow consumers to pay back a portion of their debts.
A chapter 13 case could benefit a person for numerous reasons. Typically, a person would file a chapter 13 case to save a house from a mortgage foreclosure action and a car from repossession, due to payment arrears.
A person may also file for chapter 13 protection to pay back only a portion of unsecured debt because they do not meet the chapter 7 criteria. Chapter 13 requires a person to make monthly trustee payments for 36 to 60 months. A chapter 13 case is completed after all monthly plan payments have been paid in full.
Chapter 7 bankruptcies allow an individual to eliminate all unsecured debt, such as credit card debt and personal loans. Therefore, a person who is only interested in eliminating unsecured debt would file a chapter 7 case, if one meets the criteria.
The chapter 7 case takes about four months to complete after the filing. No payments are required in a chapter 7 case.
The Impact of Bankruptcy on Your Credit
A chapter 13 bankruptcy filing stays on a credit report for 7 years from the date of the filing. A chapter 7 bankruptcy case, stays on a credit report for 10 years from the bankruptcy case filing date.
Typically, filing for bankruptcy has a negative impact on a credit score, although the filing may increase a person’s credit score, based on their financial circumstances.
The most important criteria impacting the credit score are as follows:
The shorter the credit history the less advantageous it;
Missing payments reflect a derogatory mark;
The amount of one’s revolving credit limit compared to the amount of the debt incurred.
The optimum debt to credit limit ratio is a debt balance of 30% of someone’s credit limit. The additional debt incurred over 30%, the more the credit score is negatively affected. For example, a person that used $3k of their total $10k credit limit has used 30% of their total credit limit. However, if the same person charges a total of $6k of the $10k credit limit, the ratio is increased to 60%, which reduces the credit score.
A person’s credit report lists their creditors and other facts regarding each creditor. This includes the status of payments; type of loan; length of the loan, and the loan balance. Typically, a credit report also reflects a bankruptcy filing, foreclosure action, repossessions, charge-offs, and debt settlements. The credit report also reflects a total score, indicating the general state of a person’s credit.
A prospective lender must analyze a person’s financial circumstances to determine: if they will issue the loan; what type of loan will be issued; the loan amount; the loan interest rate; and, the length of the loan.
Based on each creditor’s internal lending requirements, the determination of extending credit is based on a balancing act between the loan applicant’s credit report, income, expenses, the debt amount, debt payments, assets, and other information.
Typically, a person considering filing for bankruptcy protection is experiencing difficulty paying their monthly credit card payments and/or mortgage or auto finance payments. Consequently, such a person usually has a low credit score. The lower the credit score at the time of the bankruptcy filing, the less the impact the bankruptcy filing has on a credit score. Conversely, a bankruptcy filing will have a substantial impact on a person with a high credit score.
In general, a high credit score does not always guarantee that a person will obtain the loan they want with the best terms. A prospective debtor with an excellent credit score and substantial monthly credit card payments may experience difficulties, without filing for bankruptcy. What if a person with an excellent credit score has a very low income?
Let’s assume that a person with a high credit score, with substantial monthly debt payments, eliminates all credit card debt, in addition to other types of debt in a chapter 7 case. Initially, the person’s credit score will sustain a substantial hit, resulting in difficulty obtaining any loan.
However, within a reasonable time period, together with the proper credit repair, the person’s credit score will substantially increase. In the future, the person will apply for credit without their enormous monthly debt payment load.
Now, let’s assume that a person with a low credit score and substantial monthly debt payments eliminates all credit card debt, in addition to other types of debt in a chapter 7 case. Initially, the person’s credit score may sustain a minimal hit.
However, most likely this same person was experiencing great difficulty obtaining credit prior to the filing. If this person implements the proper credit restoration process, the person’s credit score will substantially increase, as well. Ultimately, within a short period, the bankruptcy filing will likely increase this person’s ability to obtain credit
Typically a bankruptcy mark on a credit report has a negative impact on prospective creditors to review. Generally, within one year after the completion of a chapter 7 case, the debtor (the person that filed) will experience great difficulty obtaining a loan.
Although obtaining a loan depends on the totality of the person’s financial circumstances, the rule of thumb for receiving automobile financing with a reasonable to low-interest rate is about one year after the completion of a chapter 7 case. The rule of thumb regarding the receipt of a reasonable to low mortgage rate is about two years after the completion of chapter 7.
Based on a debtor’s financial circumstances, she may be able to obtain automobile financing and/or a mortgage during the chapter 13 case. Otherwise, the same rule of thumb applies to a chapter 13 debtor as a chapter 7 debtor regarding obtaining a reasonable and low-interest rate after the case is complete.
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