Spread betting or margined trading has emerged as a very popular trading instrument amongst retail players. Given below are some tips you will do well to follow when you are about to get into this form of trading.
a) The spread amount on a specific stock would always be more than the difference that exists between the bid and offer price on that stock.
b) If you wish to hold on to your portfolio from a long term perspective, then you should not be doing any margined trading. That is because, each time you roll over a spread betting trade, the cost increases and since there is no physical ownership of the stock, you would not get the normal benefits of dividends, bonuses or stock splits that are common with physical stocks. In today's circumstances however, due to the fall in interest rates, it may be useful to roll over stocks.
c) You need to be aware of the deposit margins being charged. If that is very high on a particular stock then you would have to look to spread bet in stocks where this margin is much lower. This will help you use your funds more effectively as the leverage is going to be similar.
d) Ensure you have enough back up by way of cash or property when you indulge in margined trading.
e) Make sure you always trade with strict stop losses and these have to be guaranteed so that you are not napping from any abrupt negative movement in stock prices.
f) Start out with liquid stocks so that the volatility is something you can manage at the beginning. Small cap stocks with less liquidity have a lot of volatility that you would have to contend with and that can lead to sharp losses should the trade not turn out as you anticipated.
g) Do not only look for the high visible companies for your margined trading. Some of the boring stocks can give you better returns and you only need to keep an eye for suitable opportunities.
h) Do your trading in the same currency you used to open the spread betting account. That will take care of exchange related risks.
i) Be aware that stock prices always drop faster than they go up since any fall results in panic selling.
The above tips though not exhaustive should help you in your spread betting activity.
Learn how important Guaranteed Stop Loss orders are when Financial spread betting by visiting independentinvestor.co.uk.
Fixed deposits are purely a debt category investment instrument. To open it, a person first has to open up a savings bank account with the respective bank. Most banks prefer it. Then a person can make a deposit with any amount starting from 1000 rupees although the lower limit may vary from bank to bank as per their guidelines. After opening it up it is essential to denote a particular tenure for it. The individual must mention a nominee to whom the maturity proceeds can be given in case of early demise of the investor.
In today's date most institutions offer interest in the range of 8 to 9 percent on it. Higher rate of interest is given to senior citizens. The interest can grow annually on a compounding basis or it can be taken out yearly or monthly by the investor if he wants a regular flow of income. In that case, the principal will remain the same.
It is also possible to take a loan against a deposit in order to meet immediate cash demands. Most banks offer loan up to 90 percent of the total amount in deposit. The rate of interest in case of such a loan is also extremely low.
Most modern institutions offer Auto Sweep facility in case of deposits of this nature. In this case an amount above a particular limit in a savings account automatically gets transferred into a fixed deposit and earns higher interest. Axis Bank offers Auto Sweep Facility.
As per RBI all fixed deposit to a limit of rupees one hundred thousand is entitled to an insurance cover. That means the deposit will remain safe even in case of a bank failure.
Thus Fixed Deposits are an essential tool needed to create wealth in a stable and safe manner.
Suddhadeb Chakraborti.
Please do not pay any attention to the elephant in the room. While you read this commentary, it won't help to focus on the elephant. So it is the end of 2010 and I would like to take this opportunity to make a few observations about the economy, the demographics of the United States and the future. And remember: don't think about the elephant as I will discuss the elephant towards the end.
In the beginning of 2010, most prognosticators were negative on the stock market and skeptical about the resilience of the recovery. For example, Fortune Magazine predicted a coming collapse in the market because stock prices were "startlingly expensive." During the first nine months of 2010, mutual fund investors pulled over $150 billion out of equity funds and poured it into bond funds. This occurred as the stock market rose. In fact, the Standard and Poor's 500 total return was around 15% for the year.
During the month of December, the yield on the ten year U.S. Treasury bond rose from 2.5% to 3.5%. Because bonds trade inversely with interest rates, the ten year Treasury lost about 8% in market value. Those who bailed out of the stock market in order to invest in these "safe" bonds will not be encouraged when they open their year end bond fund statements. They will have missed the recovery in stocks and experienced a loss in "secure" ten year U.S. Treasuries. The rise in ten year rates is an early indication of inevitable inflation because when the "Fed prints dollar bills, inflation, its value kills."
Demographics - Once our Friend!
The final 2010 U.S. Census data is not yet out, however, there are some disturbing estimates based on the previous census. Between 2010 and 2025, the number of the most productive people (age 50) will decline by over ten percent. The number of retirement age folks (people reaching age 65) will increase by almost eighty percent. I really don't like these numbers. In fact, I hate them. Because it makes me feel that no matter what stimulus the government provides, no matter what tax cuts are enacted, no matter how much more deficit spending the government creates, no matter how much we mortgage our children's future, there are going to be eighty percent more retirement age workers to care for and ten percent less workers to do the job.
So I will take the positive stock market returns from 2010 and I will be very happy. I will keep my eye on the short term swings. I, along with everyone else, will endeavor to keep my head in the sand and simply refuse to look at the demographics.
The Elephant
Maybe if we all ignore the elephant in the room, he will go away. The elephant grows bigger as the Federal debt grows larger. He is so big now that he can no longer exit through the door. I am worried that if he tries to force himself through the door, he may bring the house down. And we keep feeding him! A trillion dollars this year, two trillion last year, one and half trillion dollars next year - he is getting really big!
OK. We have an elephant in the room. At some point he is going to start smelling like inflation. He will reek of lower GDP. And he is going to require more than deficit spending to survive. He is going to need higher taxes.
How to Protect Yourself from the Elephant
You need to create (and live in) your own insulated protective biosphere. That is why most MLP experts are recommending Master Limited Partnerships. Income advisors, who really understand MLPs, recognize that MLPs have historically raised distributions during periods of inflation. They also have paid out tax deferred income. They also have a record of reliability. Tax deferral, tax deferred income, reliability, inflation protection, and a history of performance, make MLPs a great way to build you're your protective biosphere. Even though you may still see the elephant, you won't have to smell him. He is not leaving.
David T. DeWitt, CFP specializes in Creating Income for Life, Growth Stocks and IRAs. David is a member of Ed Slott's Elite IRA Advisor Group.
For our latest report, visit our website at http://www.incomingchecks.com
For 2011, 2012, 2013... yes, you CAN invest money and get good investment management quite cheap. Some rich folks pay over 2% a year plus 20% of profits to invest money with the likes of hedge funds, with no performance guarantees. On the other hand, average investors can invest and get good investment management at a yearly cost of less than 25 cents per $100 they invest while enjoying other advantages in 2011 and beyond.
Some of the rich and famous have paid handsomely for investment management and ended up broke. These are extreme cases where people trusted someone blindly, which is never a good idea when you invest money. If you invest in the right places you have government regulation and visibility on your side. Plus, there should be no surprises on the performance front; with downright inexpensive and good investment management working for you. Welcome to the world of mutual funds, specifically no-load INDEX funds.
Here's how not to invest for 2011 and beyond: give a money manager total freedom to invest your money wherever he sees opportunity. No investment management outfit is good enough to win consistently speculating in the stocks vs. bonds vs. currencies, commodities or whatever game. You're better off if you invest money in a variety of mutual funds and diversify both within and across the asset classes: stocks, bonds, money market securities and specialty areas like gold and real estate. But be careful here too, because in ACTVELY managed funds you could pay 2% a year and still not get good investment management.
Most actively managed funds fail to beat their benchmarks (which are indexes), at least in part due to the expenses that are taken from fund assets to pay for things like active management. Plus, fund performance can be full of surprises from year to year as management tries to beat their benchmark, an index. Index funds don't pay big bucks to money managers to play this game. They simply track or duplicate the index. Let's use stocks as an example, and say that you want to invest money in a diversified portfolio of the largest best-known stocks in America, with no surprises.
Invest in an S&P 500 index fund, and you automatically own a very small piece of 500 of America's biggest and best companies. The S&P 500 Index is in the news every business day, and the names of the 500 companies are public knowledge and can easily be found on the internet. This index is also the benchmark that most stock fund managers try, and usually fail, to beat on a consistent basis. Is this your idea of good investment management? I'd rather just invest money in the index fund for 2011 and beyond and know that I'll have no big surprises in good years or bad.
Don't overlook the cost when you invest money. Index funds are not an issue in money market funds, where the major fund companies have kept costs low just to compete for investor dollars. But for equity (stock) and bond funds, where they make their profits, you can pay 10 times as much when you invest in actively managed funds vs. index funds, and still not get good consistent investment management. Do you need to look far and wide to find a place where you can invest in stock and bond index funds at a cost of less than 25 cents per year for every $100 you have invested?
No, the two largest fund companies in America can easily be found on the internet: Vanguard and Fidelity. They both cater to average investors, and will more than likely continue to offer funds where you can invest money without paying sales charges (in addition to expenses) in 2011, 2012 and beyond. I suggest you check out their low-cost index funds. Or would you rather speculate and pay 10 times as much for yearly expenses elsewhere, hoping to get really good active investment management - with no unpleasant surprises?
A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.
Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.
As a financial blogger I am often asked about ways to get out of debt. There are several ways to reduce debt like consolidating or settlement. One way that I recommend that many financial advisors never mention is to actually invest. I know it may sound counter intuitive but the extra money that you make can be utilized to day down your debt. If you decide to go in this direction, here are some things to consider.
You must do a thorough evaluation of your current financial situation, understand the purpose of your investment and set clear goals. Once you have set your goals you now must uncover what your investment options are. At this stage of the process it is essential that you determine your level of risk. If your goal is to get out of debt quickly and you are not afraid of risk then you should choose an investment option that will yield the highest amount of earnings in a short time frame. Individual stocks and penny stocks will be a good fit for this type of investor. On the other hand, if you are a little more conservative and have a longer time frame in which you are looking to day of your debt then your best is probably a mutual fund. Either way, I would recommend you consult with a financial planner. I always tell people to not worry about the cost that a financial professional will cost because you will more than make up for it in the end.
Dan Keller is a blogger that helps teach people how to invest and he also owns a popular Career Blog.
Venture Capital Trusts or VCTs offer investors a means of investing in smaller UK companies, while enjoying tax relief of 30% paid up-front by government.
VCT investments must be between #3,000 - #200,000, and the shares must be held for 5 years, in order to retain the tax relief.
If for any reason Venture Capital Trust investments are terminated before the end of the 5-year period, the 30% in tax relief must be paid back to HMRC.
There are now very innovative VCT models available which have very effectively minimised risk. As the top tax bracket has now risen to 50%, VCTs are a more attractive investment than ever, particularly for high earners.
VCTs - the Tax Breaks
The 30% tax relief available on VCTs is based on the investor's income tax liability in the year of investment. In other words, investors can only claim against the income tax they have paid in the current year.
For example, the 30% tax relief on a VCT investment of #100,000 would be equal to #30,000. However, this would be available only if the individual had paid #30,000 in tax during the current tax year.
The relief can be used against all forms of income tax paid, not just earned income, and all dividends are tax free. Any capital gains on shares sold in the VCT are also tax free.
Market conditions are extremely favourable to VCT investments at present.
With bank lending to smaller companies relatively difficult to obtain at present (January 2011), many dynamic companies are looking around for alternative sources of finance - and see VCTs as an attractive option.
Consequently, VCT managers have never had such a range of high quality projects vying for funding, and the quality and standard of companies where they invest has never been so good.
VCTs are a valuable and highly tax-efficient strategic investment which can be used as part of a balanced financial plan, in conjunction with Individual Savings Accounts (ISAs) and a personal pension.
About Us
As one of the UK's leading independent financial advisers, Principle First offers in-depth knowledge of the whole market for investments, funds investments, mortgages, insurances, and pensions.
Contact us today for investment advice, visit the Principle First website, or ring 0800 678 5929 now.
Acquiring a good return on your money is actually not that easy for the majority of people these days. Not just is the population ageing, which means that these people will be attempting to supplement their pension from interest off their capital, but the younger population is also be looking for investment opportunities in order to make up a nest egg for their retirement.
One of the most popular investment vehicles is something known as mutual funds. Such funds have been around for more than a hundred years and have proved themselves over and over again as reliable investment alternatives.
However, there are hundreds, if not thousands of mutual funds, so deciding which one to invest in is fairly hard. However, it is vital to opt the right one(s) because the difference in performance between the best ones and the worst ones is quite frightening.
These funds operate on the principal of numerous investors who do not have the time, inclination or knowledge to invest for themselves, hand their money over to to a fund so that they get reduced dealing charges (economies to scale) and they also have the services of an expert stock picker to manage their nest egg for them.
The difficulty with these funds is that you still have to keep an eye on them. After all, managers move on to other firms, so if you have faith in one particular manager, you might like to sell up and follow him or her when they move on.
One of the most successful mutual funds for the very long term is the Fidelity Mutual Fund. In fact, Fidelity manages quite a number of mutual funds, so even if you choose to go with Fidelity, you still have to decide on which funds precisely.
You can rely on a manager or adviser to make or help you take these decisions or you can guess for yourself. For instance, you may think that Japan or the Pacific Basin is pretty cheap and should do well for the next ten years. Or you might think that commodities have to increase in price. You can choose Fidelity mutual funds for these more refined investment options.
The difficulty with Fidelity Mutual Investment Funds as with all mutual funds and indeed all investment vehicles is that nothing remains the same for ever, so you have to check your investments frequently (or have someone else do it for you, which is never as good).
Funds are a long term investment which means that you ought to expect to leave the money in there for at least ten years. In fact, there are penalties and early get-out clauses.This is because financial advisers are paid for introducing you to Fidelity and Fidelity has to recover that money from you.
Do not join any Fidelity Mutual Investment Fund (or any other such fund) without first checking out their website and reading their most recent terms and conditions. If you still feel that Fidelity could be OK for your investment needs, find a broker or your bank and ask for their advice. At least that way, if the fund does badly you will have someone to grumble to and you will not get the fund any cheaper whether you go through a broker or not.
If you are interested in the Fidelity Mutual Funds or investing in general? If so, please visit our website known as Investing in Mutual Funds
The global financial crisis is no longer an excuse for investors not to seek answers regarding how to invest as well as where to invest in 2011. Thinking about it logically, when the economy is down and hits the bottom, the only direction it can go is to go up. This is exactly why it is a good idea to really start thinking about different places as well as methods to invest your money. In order to help you with that, there are some relevant tips and tricks here.
Nowadays, you never know where is the safest place to stash your cash and at the same time watch it grow after a few years. Fortunately, there are still many ways you can grow your money through investments, as long as you are prepared for the possible risks too. Once again, there is no such thing as guarantee because there are always risks no matter how you invest.
Honestly, you can build an impressive portfolio from only a few dollars. Start by looking into DRP, which stands for Dividend Reinvestment Plans as well as DSP which stands for Direct Stock Purchase Plans. These two plans let the investor to purchase stock market shares directly from large firms or their agents. This saves you a certain amount of money as you do not need to pay any commissions to a broker.
Besides that, there are also thousands of companies that you can buy shares from through DRP and DSP scheme. Another huge advantage of investing your money in this way is that you can opt to get a small amount of money deducted from your salary on the installment basis with no additional fees to pay. Hence, you do not really have to make any huge changes to your monthly budget for expenses.
However, if you have more than a few dollars and you have big wish to make much bigger profits in a few years down the road, then there is no reason why you should not consider the index fund which will give you the same results as the stock market. The advantage of index fund is that you do not have to bother with having to choose individual stocks.
Just to be on the safe side anyway, you are recommended to choose from one of the three most reliable stock exchanges which are namely Dow Jones, NASDAQ as well as S&P 500. You will most likely earn a 10 percent return on your investment every year.
The author has been an active writer online for a few years already. Apart from publishing contents on various topics, he has recently put together a new website about patio umbrella parts. Besides that, it also has plenty of useful information about patio umbrella fan too.
One of the best and fastest ways to make your wealth grow is by investing money. Despite many people's efforts to save money by working on a monthly basis, that's the longer way to get rich. So if you want to get rich, you need the courage to make financial investments. In spite of the risks involved, investing is the shorter road to wealth and financial success.
Here are some tips on how to start investing money wisely.
1. Be open to change. Many of our usual attitudes and beliefs about money have been embedded in our minds since we were young. In the past, it was enough to work hard and save money. But now, the employment world is too competitive, and there are too may people in the workforce. Also, companies are not keen on spending too much on salaries. At the same time, prices are increasing. This is why people are finding it harder to achieve financial freedom even when they work their heads off. If you find yourself in a similar situation, it's time to change your mindset about money.
Now is not the time for waiting for your savings to grow. Now is the time to take risks and make investments. The first step towards financial freedom is realizing that you need to change as the economic environment also changes. So today, make the decision to invest.
To change ingrained mindsets, use subliminal messages. Subliminal messages are messages sent directly to the subconscious mind where those mindsets take root. If you are able to communicate with the subconscious, it is easier to change embedded thoughts and beliefs about money.
Use subliminal messages that make you feel like a more confident manager of your money. Some examples are:
I invest money wisely.
I make wise investments.
I handle my finances well.
I am open to change.
I am willing to take chances.
2. Change your attitude about investing. A lot of people are scared to invest because they think investing is a risky business. But if you want to get rich, you have to start thinking of investments in a more positive light. If you keep on thinking about the risks, the law of attraction says that that's exactly what you will magnetize into your life.
Use positive affirmations and set your focus on these positive beliefs so you will attract the good vibes into your life.
3. Do your research. There are many ways to invest your money. Research all the investing methods possible for you. There are a lot of methods that are more apt for risk-averse individuals like you. If you have a riskier side, then there are methods appropriate for you as well.
4. Start small. If it's your first time to invest, it's okay to start small until you get the hang of it. Don't invest all your money yet; keep your savings in a high-interest account at the bank, then set aside a certain percentage of it for your investing. Just stick with that amount and make it go around and around. Any earnings should not be added onto the set amount you initially invested. Separate all earnings so you already win some even if you sometimes lose some.
5. Be patient. Not all investments bring instant profits. For example, the stock market is not that instantaneously beneficial these days. You can't expect to see your money grow once and for all. So as an investor, patience is truly a virtue.
Nelson Berry is the Pioneer of Subliminal Video and Subliminal Audio Subliminal Messages. Click either link to get 4 Free Subliminal Video Downloads (valued at $160). Click now. :)
One Touch Binary options are a fantastic new way to trade stocks, currencies, indices, gold and oil and that is just a few of the over 50 plus items available.
Because they give returns of up to 550% on your options they are one of the best trading opportunities around. You can now purchase these options each and every day from Monday through Friday and the trading option will stop at approximately 5pm GMT on the same day. You can also purchase these trading instruments on Saturdays as well as Sundays also and those options will expiration on the next Friday.
One Touch options provide you with the opportunity for excellent economic trading due to the fact:
? they provide you with amazing returns: from 250% - 550% for every option you trade
? the trade ends each and every day/week, at 17.00 GMT or 19.30 GMT on Friday ? they are sold at a predetermined price which is not what the current market price was when bought
? if it is more than the market price it is called a "Call" option
? if it is beneath the market price it is called a "Put" option
? One Touch trading options have been also called "all or nothing options". If your one touch option trade ends "in the money" you'll receive the full amount of the payout, if it's "out of the money" you'll lose the total amount of the trades value
How and Where Can You Buy These One Touch Options?
One Touch Binary options are available on many different trading platforms. They are purchased in units and every unit costs between $50 - $100 but only between Monday through Friday. They are also sold in units between $100 - $200 on Saturday and Sundays. You can buy up to 10 units of any single One Touch option (depending on which company you are purchasing them from), and you will be able to order as many different One Touch options as you would prefer to.
Each specific option will show the going price at which you'll be "In The Money" in addition to the return on your investment which you will also make.
Let's recap on how One Touch Binary Options function?
Every trading day that the market is open (Monday to Friday) when the option is bought until it expires, the original price of the one touch option is verified one time per day at 17:00, precisely at that time is when the Reuters 17:00 sample rate will expire.
Should the price at that time on any given day be equal to - or above on a "Call" then the option will automatically be "in the money"..
If the price during those times on any day does not reach the predetermined dollar amount then the one touch option will end "out of the money".
These options are settled every week at 19:30 GMT on Friday. When this occurs your money for the successful trades will be deposited straight into your personal account but only on Friday not before even if you have already won.
Here is a One Touch Binary Options Trading Example:
Asset: Google. Spot rate 500. One touch rate 560. "In the money" payout 500%. Unit price $200. Units bought: 2.
In the above example, if Google rises to 560 or above at 17.00 GMT on Monday through Friday it will be "in the money" and a 500% take profit of $2,000 will have been made. But if it does not reach this goal at any such times then the trading option will end "out of the money" and you will lose all of your invested capital.
One Touch Binary options can be exciting, simple, and financially worthwhile. To learn more about this great opportunity and for more information on Binary Options Trading please Click Here.
There's a lot of information about investment trading. If this is one area that you would like to explore for yourself, one of the very first points you should settle from the start is what you will be trading. Tackling this is the only way you can take the right steps to isolate the best resources to help you get started.
There are a couple of popular markets that you can get into. You can trade stocks, currencies, options, commodities and contracts for differences. If you do your own research, you will notice that a lot of seasoned traders participate in more than one market. This may not be the best option for you if you are just starting out.
You might think that the best investments are those that are diversified. Most likely, you're thinking that the more diverse your portfolio, the lower your risks of losing. This might initially seem logical since different markets have different risk levels. One loophole to this reasoning however is that you will understandably be unable to gain mastery over any market.
Let's get things straight. Trading in any market isn't easy at all. Aside from various technical elements that you need to learn, you also need to develop a gut feel for making the right entries and exits. In other words, you need to pour your energies into learning the intricacies of your market and how you can navigate through these. If you go for diverse investment trading there is a possibility that you will lose your entire trading float because of your lack of mastery.
This brings up the question of which market is the best one to enter first. The most sensible answer is to go for the market that you are most comfortable with. Read resources about each of your options and then settle for the one that makes the most sense to you and is easiest for you to understand.
From an expert's point of view, it may be easiest to start with stocks. Of course, there is nothing simple about making stock trades. Of all the markets however, the stock market is the most straightforward. Moreover, there are so many pieces of information you can get your hands on. You will find a hundred and one helpful and legitimate resources to help you understand what the market is all about and identify top tools to facilitate the best investments.
The stock market is also the least risky to put your money in. Although no one is exempt from the possibility of huge losses in this market especially if you follow the wrong system, you gain some level of extra protection from the fact that stocks are not leveraged. Unlike currencies, you don't stand to gain as much in stock trades with a small capital. This is good though because lower leverage potential means lower risks of losing a lot quickly.
The true secret to earthly wealth really is in investment trading. You can only ensure great profits though if you make sure you make the right market choice. Don't trade everything. Settle on only one market and master it.
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There are automated forex trading vendors galore on the internet. Many of them give their promise will grow your fund significantly with the help of their products. The price for each product is ranged from $100 to $200, what an interesting fact we have here. With only $200, many vendors of automated forex programs intend to help traders and investors out to multiply their funds trading in the forex market. Stay calm and keep on being a rational one when you meet such offers.
I don't say that all automated forex programs are bad, however, when something sounds too good to be true then there might be a dead cat on the line. You need to invest your time to investigate and research these systems. Find the proof, have the truth on them. Don't waste your money buying anything that will jeopardize your fund in the end. You have to find reliable and acknowledged automated forex trading programs. I believe you're a level headed person who won't judge a book by its cover.
I am also sure there are some reliable and profitable automated forex programs out there despite I often hear downside stories on such trading programs. Some of my friends have developed their own program for private use only. Some succeeded and some other failed. Some of them and me also have tried out to use paid systems, unfortunately those programs didn't satisfy us.
In general, one thing that I often get from what people said on their experienced utilizing automated trading program is the rules often fail in a certain market condition. For instance, when a trading program is good in ranging market, it fails when market is trending. The worst is when the trading program fails; it can put your whole fund in danger. It usually happens because a trader gives full trust to the program to take care of his/her trading portfolio and the situation gets worse when a trader doesn't know what to do for recovery since the trader is not the program developer.
All right fellow trader, before you make up your mind to purchase automated forex trading program, first of all you have to determine your trading needs, trading style and your risk-profile. Afterwards, you run your own investigation and research on those trading programs which available on the internet or probably offline vendors as well. Visit trader forums and communities, ask experienced ones, and get their opinion and suggestion regarding the trading programs you want to have.
Next, for more details on forex trading systems and other tools you need to profit from forex trading visit http://VIP.MyForexTradingSuccess.com.
"A real decision is measured by the fact that you've taken a new action.
If there's no action, you haven't truly decided."
Tony Robbins.
Are YOU ready to fight for your future?
You?ve seen the banner ads on the Web. ?Make Millions In Penny Stocks!? ?Whiz Kid Trader Turns $4,000 Into Billions!? ?Make Money 24x7 Trading The Forex!? Take this course, or buy that program, then sit back and watch the cash roll in.
Before you send your credit card number check out what a real life independent trader has to say. Like Frank Guariglia. The Philadelphia resident has been trading stocks full time from home for more than three years. ?When I tell people what I do for a living they think it?s the coolest job in the world, the road to easy money,? Frank says. ?But, the reality is a lot different. This is hard, tedious, stressful work. I put a lot of time in. I?m up at 4:30 AM checking news and markets around the world, reading the Wall Street Journal, getting ready for the opening bell. Most nights I?m doing research. There?s nothing cool or glamorous about it. Some days it?s painfully boring. I sit, I watch, and I wait for setups that offer an above average potential for profit. Traders like to trade. Doing nothing for hours on end is extremely difficult.?
Anybody can be a trader. Open a brokerage account, set up a computer with a phone line, and you?re in business. Day traders, however, are a special category. The New York Stock Exchange( NYSE) and the Financial Industry Regulatory Authority (FINRA), require "pattern day traders" to maintain at least $25,000 in their accounts and they can only trade in margin accounts. Margin is a loan from a broker secured by the securities and cash in the account. A pattern day trading account offers tremendous leverage. With the $25,000 minimum a trader can buy $100,000 worth of stock during the day. Pick a winner and you can make a fortune quickly. If the stock tanks you can lose big, maybe even more than your original investment.
Frank worked as a service manager at Verizon Communications before he became a full time trader. During a round of downsizing his entire department was consolidated with another center in a different state. He was offered an attractive severance package in lieu of relocating, and he jumped at the opportunity to strike out on his own. ?I didn?t wake up one morning and decide that I wanted to be a day trader. I?ve been a serious investor for 30 years,? he says. ?I dreamed about trading the stock market full time, but lack of time and lack of capital held me back. With my severance, and some savings, I suddenly had both.?
Very few people succeed as traders. Most blow up their accounts in short order, some in just a matter of a few months. Insufficient capital is often the reason. A trader who hopes to trade full time and live off the profits of a $5,000 account probably has about the same odds of succeeding as a Powerball player. Losses are a big part of the game. Even the best traders lose more trades than they win. They last in the business by keeping their losses small and letting their winners ride.
How?s Frank doing? ?Well, it?s been over three years, and I?m still here,? he says. ?Fortunately, I was able to start with a comfortable capital position. I haven?t had a profitable year yet. I started right before the Dow hit its all-time high in October, 2007, then crashed to a generational low in March, 2009. But, this year has been good so far. You don?t get proficient at this overnight. It takes many years of study and experience. The mistakes I made early on cost me quite a bit of money. I consider it my tuition. Some traders fail for the same reason that many businesses fail. By the time they start to figure out what works they?re out of money!?
Rule Number One is PRESERVE YOUR CAPITAL. If you run out of chips you?re out of the game. Successful traders are masters at money management. They risk a small percentage of their account, 2% or less, on any single trade. ?I took some pretty big risks early on that resulted in sizable losses,? Frank says. ?I also made the same mistake that many traders make by holding on to losing trades in the hope that they would bounce back. Sometimes they did, and that only reinforced a bad habit. Eventually, a loss not taken quickly will turn into a huge, painful loss if you keep hanging on. Take the small losses, and move on. One good winner can make up for a string of losers.?
Day traders are looking for quick profits, and they close out their positions by the end of the day. Holding a trade overnight is risky. Adverse news like a bad earnings report, a lawsuit, or the departure of a key executive can drive the stock sharply lower the next morning. ?I generally don?t want to hold a stock too long,? Frank says. ?More time means more risk. A winner can turn into a loser real fast.?
Prospective day traders are strongly advised to read the Securities & Exchange Commission?s cautionary message, ?Day Trading: Your Dollars At Risk,? at http://www.sec.gov/investor/pubs/daytips.htm. Frank says, ?Trading is becoming increasingly difficult, and dangerous, for small independent traders like me. We compete with high frequency traders using rooms full of computers to make millions of trades a day with the goal of earning a fraction of a penny on each trade! A lot of days are extremely volatile, just wild and crazy. Then, there was the ?Flash Crash? of May 6. My jaw dropped as I watched the Dow plummet 1,000 points in a matter of minutes. It looked like it would never stop dropping. I had one trade going, and couldn?t get out fast enough. I panicked, like many other people did, and lost a sizable amount. I heard that some trading firms, entire companies, were wiped out by the event. Could it happen again? Who knows??
So, why would anyone want to work long, hard hours, and expose themselves to such high risk in a competition where the odds are decidedly stacked against them? Frank says, ?I always wanted to do this. It?s in my blood. I?m always thinking about the markets, even on holidays and weekends. I love the independence and flexibility it offers. If I only want to trade for an hour, or take the whole day off, I don?t have to get permission from anybody. Working from home is great. Long commutes, bad weather, difficult coworkers are not a problem.?
What does the future look like for Frank? ?This is a very risky business. I?d like some financial security. I have private health insurance, and it?s getting more expensive every year. A part time job with benefits would be nice. I would be happy to work nights or weekends, and trade during the day. I have a tremendous amount of energy and stamina.?
?2010 Frank C. Guariglia. All rights reserved.
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Frank C. Guariglia has diverse career experience as an entrepreneur, telecommunications manager, and day trader. He's always interested in potentially profitable opportunities. Send him email
We know that CFDs or contracts for difference trading can be done on stocks, currency, commodities and even bullion. It is also possible to trade CFDs on the index itself rather than any individual stock. This approach is a useful one considering that it is a diversified one as compared to concentrating on a single stock and since the index normally straddles a spectrum of industries, effects on any one particular stock is not a consideration.
To some extent, you are protected from the volatility that you might have to suffer when taking CFD positions on single stocks. So if you believe that the Dow Jones, NASDAQ or FTSE 100 is due for an up move, you can trade CFDs based on that belief and make profits should the market indeed move as per your belief. On the other hand, you can also do CFD trading for the index on the short side should you think the market is going to tank.
Index CFD trading can be done for all the major indices in the world and traders often take hedging positions by going long on one index and shorting the other so that they do not lose money. The indices that are normally considered for CFD trading are the UK, US, Australian, Far East and German markets. The Japanese Nikkei as well as the France CAC indices are also traded though on a lesser volume.
Many traders who wish to trade CFDs for the short term generally prefer to trade the FTSE, Dow Jones or the S&P because they are aware of the technical analysis and the effect on the price action due to these technical charts as compared to pure fundamentals.
The advantages of index CFD trading are that you can as mentioned trade the various global indices and not bother to track performance of any one company constituting those indices, since you may not get access or find the time to do so and trade their CFDs. There is also a cover of some safety against very sharp moves on the index since some of the stocks within the index is bound to do well and that will help cushion some of the negativity brought about by other stocks in the same index. Of course, this depends on the weight age allocated to the different stocks making up the index and the effects will be seen accordingly.
Learn more about index cfd trading as well as range of CFDs by visiting an authority website with discussions on many topics, one such being CityIndex.
Many novice investors seek information regarding online investment opportunities. Of course, we all want an expert at our disposal. However, most of us cannot afford an expert. A wealth of knowledge is available on the internet for those of us who need the basics to get started. For many novice investors, it may be difficult to discern which sites offer credible information regarding investing. Our guide will discuss the information available for online investors.
Insider Trade Tips
Investors will research and find numerous sources of information regarding online investment opportunities. Investors may receive insider trader tips on a daily basis. This will help them determine which stocks are expected to perform well. Novice investors appreciate this type of advice. Often novice investors are not aware of how to predict which stocks will perform well based only upon news information or information about the business. These tips are especially useful when trading online without the direct help of an experienced investor. Trading software is also available to assist novice investors in making sound business decisions.
Investment Strategy Tips
Many websites offer individuals investment strategy tips on their website. The tips may be regarding stocks, bonds, Exchange Traded Funds (ETFs), commodities or other types of investments. Investors are given advice on how to invest in both a bull market and a bear market. The strategies are remarkably different. In a bear market, investors may tend toward safe investments with moderate growth. In bull markets, volatile investments may yield the most return on investment (ROI).
Online websites will also teach investors how to select sound investment opportunities. Market trends will be revealed to help investors make sound decisions regarding investing. Search for companies that offer investors free seminars and online forums. These webinars will teach investors the basics of investing.
Portfolio Diversification
Portfolio diversification strategies are also discussed online. Investors will be informed of the percentages that they should invest in various investments. For instance, experts recommend that approximately 35% of an investor's portfolio be in precious metals. Precious metals are safe during a declining economy. The price of gold, for instance, rises when the economy is in decline. Investors should be aware of how to structure their portfolio to avoid catastrophic losses.
Investors will learn the difference between safe investments versus volatile investments. Mutual funds are an example of a safe investment. Stocks are a more volatile investment. The more volatile the stock, the more investors must watch the market to avoid losses. Recommended percentages of investments will be revealed through tips offered online. The information provided will be based on historical data, as well as, the current market state. Investors will learn how to identify opportunities, analyze investments, purchase investments and monitor investments.
Daily News and Streaming Quotes
Much of investing requires monitoring the daily news and predicting how political movements, business deals and the economy will affect a particular security. The financial status of a company and its leadership will also affect the stock prices. Acquisition of a new Chief Financial Officer, for instance, may signify growth and change within a company. This indicates that stock prices may increase. Therefore, investors could conclude to enter the market while the price is still low.
News sources that are offered real time are the best types of news sources. Investors will learn how various news releases will affect stocks. Investors should check new sources daily to determine how the news will affect their securities. Many websites offer DVDs to teach investors how to interpret news releases. Investors will find a wealth of knowledge that will move them forward in their investing career.
Market Analysis
Many online websites will analyze stocks and investments for investors. Websites are also available to select the top performers daily. These watch lists will help individuals make decisions with the help of experts who have knowledge of market trends. Other websites will offer daily stock picks to consumers. These individuals invest as a group, which seem to offer more security than investing alone.
These are just a few resources available to investors who are beginning their journey.
Gracie Hyde writes out of New York about different personal finance tips, including how to find the best online investment opportunities. Always looking for the most favorable investing options, she tends to end up planning her finances at http://www.firstrade.com/public/en_us/productservices/investmentchoices more often than not.
Investment strategies are many and varied, and with advocates for each one, it is sometimes difficult to find the right one. An investment strategy is a governing set of rules that guide a particular investor's portfolio so as to maximize gains or minimize risks. There is no perfect set of rules, and picking a strategy depends largely on personal choice and intuition.
More or less, there are two basic types of strategies. They are the Passive and Active investment strategies. The first of these; also called Passive investing, is most common in equity and mutual fund markets. It is based on the belief that over time, despite fluctuations, if you hold on to your shares; you will make a profit. Warren Buffet is probably the most famous advocate of the 'Buy and Hold' strategy, choosing to invest in small time businesses and gain money as they increase. The passive strategy is undoubtedly the safer of these two methods and is beginning to gain popularity in other markets such as commodities and bonds.
The second basic type is called Active investing; in which stock is bought low and sold when it has been thought to have peaked. The basic theory is 'buy low, sell high'. How well the 'day trader' theory works out depends a lot on how skilled the research staff and manager are; because an unsound theory or method followed may cause serious financial loss. Active investors are more prone to panic at market fluctuations and dump shares, which if widespread can cause recessions and economic crises.
It is worthwhile to note that these are only the two basic types; there are many different variations as well as different theories and formulae to predict market trends. None of these are 100% accurate, and some of them are a little better than coin tossing or superstitions. When investing, it is important to evaluate your own finances and assets, judge how much risk you are willing to take, find an experienced and capable manager and spread your investments to minimize serious financial loss. If you find a strategy that works for you; stick to it. Market analysts say that most investors face loss because they switch portfolios or investments too quickly to realize any gain. Even the best strategy is subject to considerable risk, and it is important to have all documents properly explained to you before you create an investment portfolio.
Knowing what lies ahead is a crucial strategy in the online trading game. Do this and more by reading some Forex News Online. You can also uncover top secrets that successful traders use by reading some Forex Reviews also available through the internet.
Everybody who is an investor or is considering of investing their funds will want to learn about the different types of investments there are. Many people are interested in high income investments but they are unsure if whether this investment path is the right one for them. This is a good approach to take when considering investments as investors should know about what they are investing in, the time period involved and the benefits and disadvantages of the particular investment before they get involved.
There are many investment strategies out there. Investors need to learn these so that they can simplify and evaluate them. This will help them decide if a particular investment is right for them or not. If an investor is considering a high income investment, they need to take into consideration factors such as income, safety, growth, tax benefits and liquidity. Every investment opportunity should be evaluated and rated based on the features that it has.
Two of the most popular high income investment options are stocks and bonds. Those that want to invest in these two options should be especially careful that they understand the risks involved. The stock market is generally for people that want to grow their investments and have a high degree of flexibility. However, this is a high-risk investment. Those that want something with lower risk levels should consider bonds.
Investors can spread their money on both liquid and safe investments if they choose to do so. Investments like these include bank money market accounts and money market securities. Every investment portfolio should have some bonds, liquid safe assets and stocks. Other investments many people like to have in their portfolios are oil, gas, real estate, products and commodities. Foreign securities are also considered to be high income investments.
Investors that are new to the game or need to reevaluate their investments may want to discuss their options with a professional. Generally, the best way to go about is for the investor to contact their bank and make a request to speak with somebody who deals with investments. Once this has been done, an appointment can be created to go in to the bank and look at the situation further. Investors should make sure that the person that they speak with about high income investments is qualified to give financial advice. In some cities, it is a requirement that they have some sort of certification.
Keep yourself tuned in to the current updates delivered by Currency Forex News. This place is replete with valuable information and resources when it comes to learning about the dynamic world of online trading. You might also want to check out the Forex Trading Review.
Are you someone who loves to collect things? From baseball cards to porcelain dolls and knick-knacks, you could easily make money at home selling this kind of stuff. You may be that person who has collected these things for a long time and now realize they have some serious value, or maybe you are just someone who wants to start running your own business through buying from a wholesaler and selling items online or at local bazaars and markets. How you decide to distribute the product is entirely up to you, and there are so many successful ways to sell products today.
To make money at home in the collectible market you have to make sure you have the knowledge to both understand the value of the items you have for sale, what the trends are in making sure you are purchasing the right wholesale items, and having the expertise to answer your customers questions. If you aren't well versed in your product you will lose your potential customers to more experienced sellers. While this may not be the case in many other retail sales, many collectors are looking for specific items or want to know very specific information about the products they are buying, and if you aren't able to answer their questions you will eventually lose a lot of potential sales.
When you start establishing yourself within a certain group of collectible customers you will begin to become their go to person for future sales. This is when you will really begin to make money at home with your business. You will then be able to expand your customer base by expanding your inventory to reach a broader scope of customer. The volume of customers will only grow after this point.
No matter what collectible market you are going to try and establish yourself in as you begin to make money at home, remember that you want to have great knowledge of your product and you will need to have a greater volume of customer questions and contact than most other retail products. If you like serving the public and feel like you can offer something those other retailers can't, you may be the perfect fit for just such a business venture. The biggest thing you will need to figure out is what product do you really wish to sell, and find the right distributor that can give you the best chance for success.
Christopher Mendetta is an experienced internet marketer who have built businesses and are now teaching others how to achieve the same success. For more information on how to make money at home visit: http://www.chrismendetta.com
You know, it takes a lot to work hard all your life, save your money, and to invest it properly. There are far too many investment schemes that just don't work, and far too many non-regulated securities. It's not really fair for someone who's worked hard and earned money to lose it in a bad investment, which was based on trickery and disreputable inducement. This is not to say they shouldn't participate in the free market economy, or that entrepreneurs and investors should not take risks.
What I'm trying to say is there are too many shysters, and as of late far too many alternative energy investment schemes which will never produce any return on investment. Now there are many people who are completely passionate about what they are doing, and they really believe in alternative energy sector, and most of them have just gotten out of college, and they have been brainwashed by academia, and overblown media reports of global warming.
Still, as an investor you must be prudent, and realize that the alternative energy sector is the next bubble, and far too many people are investing in things which just won't work, if you are an angel investor save your money. Not too long ago, I was contacted by someone who had a tubular wind generating contraption which blue like a kite.
The tether that held the object was its power cord. Although it was designed by an MIT graduate student who apparently knows what he's doing, and was supported by a Harvard MBA business manager, along with a Harvard lawyer to help with the patents, deal-making, and venture capital agreements, the reality is there invention will not work.
That is not to say that they won't eventually get it to work, after they burn through millions of dollars and prototypes figuring out the mistakes they've made. However when I was talking to them I asked them about 15 questions, and they could answer very few of them. In other words, they don't know what they are doing, and they're going to burn through capital, and even Department of Energy grants, which have been allotted by the taxpayer.
The reality is that we are throwing money in investments and nonsensical alternative energy projects which will never provide a return on investment, which will never work, and are ill thought out. And we're doing this because we want a pollution free society, because we've been told that carbon dioxide is bad, and that humans have too large of a carbon footprint, but that's nonsense.
If you want to go ahead and invest in one of these crazy new inventions or alternative energy schemes, go ahead. However, I am warning you that you should not expect your money back, or any return, rather you can watch your money ride off into the sunset and sing the tune; "one tin soldier rides away." Please consider all this.
Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes writing 21,600 articles was a lot of work - because all the letters on his keyboard are now worn off..
Many of the world's most successful investors consider themselves value investors. But what is value investing, exactly? For most of us, value investing means purchasing value stocks as part of our long-term approach to equity portfolio management. The key here is to purchase value stocks, but what defines a value stock? After all, there is a fine line between a value stock and a stock that is out of favor for a good reason. At one time, the "old" GM stock would have fallen under the traditional definition of a value stock; within months, the "old" company was bankrupt and its stock was worthless.
On the other hand, some of the best performing professional money managers overlook value investment pools. Data available at Morningstar points to a clear trend among domestic mutual funds that invest in equities: the value investments are the best performing among the three market capitalization classes. This is worthy of anyone's attention, so let's take a look at what a value stock is.
The traditional definition of a value stock is one that is trading at lower Price to Earnings (or PE) multiples than the market average. That is to say that if ABC Stock is trading at a PE multiple of 11 and the broader market's average PE is 19, ABC Stock is a value stock. The general belief among value investors is that these stocks have been over-sold by emotional investors. A missed quarterly earnings result, a bad management decision and a host of other touchy events can trigger mass selling of a stock, even though that single event may not reflect the future potential of a given company. This is the premise by which many value investors trade.
However, low PE multiples and a strong belief in a company's long-term prospects do not always guarantee success. As mentioned in the GM example, some value stocks are properly priced as a result of fundamentals (in fact, General Motors was bankrupt on paper long before its stock price reflected this). Still, General Motors survived thanks to a massive bailout and has re-listed its shares, leaving old shareholder's "burnt" by what might have seemed like a smart "value investment" at one time.
With this in mind, value investments typically require the investor to take on a little more risk than with straight "growth" investments. And this risk, while it has rewarded investors handsomely over the past several years, is not always worth the investment.
--> Consider Value Mutual Funds as an alternative to hand-selecting the value component of your portfolio.
Chris has more than 18 years of financial services experience. He currently manages as a website about GeForce video cards, including a page about the GeForce GTX 480 at EVGAGeForce.com.
We've all heard it over and over again - diversify! Although the idea behind diversifying your investment portfolio is a very important one, many novice investors simply haven't got the skill or the expertise to reap the real rewards that a diversified investment portfolio can have. There is a side to it that investors rarely speak about - maybe because its not as "sexy" as some of the more mainstream ideas like buying start-up companies.
In many ways, investing in something is the easy part. Its managing that is the real challenge. No real investment can be a "set and forget" affair. Investments are dynamic and you have to act and react according to so many different factors.
This is where investment management comes in. Keeping an eye on your investments is all about knowing the figures and having the facts in front of you. Novice investors tend to react based on emotion. Sophisticated investors have the tenacity to really look at a situation and see whats really going on. While most people are panicking and selling off, these guys go in and buy.
Anyone can get a trading account and buy shares. In some ways, anyone can buy good shares and make good investments. But, can they manage it well. Can they manage wealth and can they manage a diversified portfolio. If you diversify your investments across many investment vehicles like businesses, stocks and real estate it can become a full time job just keeping track of everything.
Investment management is a crucial aspect in following the fundamental investing principle that says "cut your losers short and let your winners run". Never invest blindly. You have to know at all times what your investments are doing.
Learn more about investment management software and see how it can help you with your investment portfolio management.
Here is a list of the main types of investment risk, along with a description of the risk. By using this information you can be better informed about some of the risks involved when you invest your hard earned money. Some of them may surprise you and you may never even have considered them a risk.
The types of investment risks are:
Inflation Risk
? This would expose you to the risk that the spending power of an asset will be eroded by inflation over time, with inflation being on everybody's mind at the minute its a very important factor not to omit from your planning.
Interest Rate Risk
? The risk that interest rates will fluctuate, its important to think beyond the current rates on offer and get a feel for how you expect rates to change over the period of your investment.
Shortfall Risk
? The risk that investments may not achieve their anticipated returns, remembering that investments can fall in value too. You could think about how you would manage if there was a shortfall.
Market/Systematic Risk
? The risk that the value of the stock market may fall, as mentioned above but here you might like to think of leaving the investment to overcome the shortfall and this can work well if you have time on your side.
Provider Risk
? The risk that the provider may not be able to pay back the money invested, something that was not really considered in too much detail a few years ago. But, with recent events this is very much on people's minds, so have a look out for financial strength and feel comfortable about the provider.
Taxation Risk
? The risk that the Government may alter taxation legislation thereby having a detrimental effect on your assets. Increased taxation or the loss of tax breaks could adversely affect your returns, most are out of your control but make the most of any tax breaks while you can to take advantage and improve your returns.
Diversification Risk
? The risk that too much is held in one asset or asset class. A very important part of investment planning, don't have all your eggs in the one basket, spread your risk.
Of course discussing these with a qualified adviser can help you understand them further, and then you can be in an informed position before you go ahead and consider taking risk.
Have you ever noticed billionaires like John Paulson, who reportedly made $7 billion from shorting the subprime mortgage market (betting it would go down), George Soros, or his former hedge fund partner Jim Rogers, are investing? Have you noticed they seem to have a knack for finding the fastest growth or most profitable areas to invest in?
It may look or sound that way, unless you had research on your side which would show you in advance where the future growth would come from. Of course, no one has a crystal ball, but what I found is their research method that they say has about an 80% accuracy of predicting market trends and turns. Research that allowed Paul Tudor Jones to know in advance of the 1987 stock market crash that it would decline significantly and make $100 million in one day! Or that allowed John Templeton to know internet stocks peaked in 2000 so he could short them and make a fortune as they declined. Or that the Rothschilds and JP Morgan followed for decades and made them some of the wealthiest people of their day.
It does exist and it involves market cycles being affected by of all things, sunspots!
This is something you've probably never heard before. I know I hadn't heard it during my 25 years in the investment industry. I stumbled upon it when I was researching what caused the 2008 stock market crash - research that billionaires were using that showed an 80% correlation between sunspot cycles and the stock market!
When sunspots are active, the economy and stock market are "irrationally exuberrant", like in the 1990's. When sunspots are quiet, (like they are now, the quietest in 100 years) we have a serious recession like we've experienced. So the Lifeforce energy is in the good economy and in the bad economy. It's affecting the stock market too!
If you think about it, cycles impact the weather, crops, seasons, time...in fact there are over 4,200 cycles that have been identified. Cycles repeat themselves on a regular basis. If a cycle occurs every 11 years, and you can trace it back in time, then you should also be able to see it repeat in 11 years from now. Sunspot cycles also repeat. That's the basis of the research the billionaires use.
I've been tracking different forms of the cycle research. Some of it is geared toward institutional investors too much for the average person. Some of it is too geared toward short-term trading. I finally created the perfect balance so the best sectors are identified for the long-term, and you can buy and hold without having to trade a lot. That's how I developed my wealth mentorship program, to show you the best areas to invest in and grow wealth for the long-term. I look forward to sharing with you where the great future growth opportunities are!
Linda P. Jones
Wealth Mentor
http://www.showmewealth.com
http://www.livewealthyandsmart.com
 | Trade stocks for cheap by searching the Internet for stock brokerage firms that offer cheap or free commission trades. Consider firms like Charles Schwab, White Pacific or TD Ameritrade for inexpensive investing with advice from a financial adviser in this free video on investing and money management. Expert: Roger Groh Bio: Roger Groh is the founder of Groh Asset Management. Filmmaker: Bing Hu | From: ehowfinance Views: 3179  1 ratings |
| Time: 01:33 | More in Howto & Style |
The online discount brokerage landscape is changing every year. Last year winner with $2.50 per trade may not be a winner for this year. Some other things to consider online brokerages are paper-based trade confirmation fee, monthly statement fee, wire transfer fee etc. Some investors or traders can avoid these fees by changing his or her account's settings; some may need to contact the brokerage customer service for help.
With the 2009 bull market, investors are trying to get back into the market by finding more reliable investment research and new full brokerage services. Online discount brokers are now trying to lure any investor or active traders for new business by reducing their pricing or commission fees. For example, Charles Schwab slashed commissions by more than 30%, to $8.95 a trade earlier this year. Its competitor, Fidelity, which just a year ago charged about $19.95 for a single trade, quickly undercut Schwab with $7.95 commission per trade.
The online discount industry has taken its price wars to other product lines as well. Schwab cut fees on certain stock and bond funds offering, and even offered free trades for 11 exchange-traded funds (ETFs). Fidelity has countered by offering free trades on 25 ishares ETFs.
Of course, commissions have been falling and falling, and a few firms have provided free trades, with certain restrictions such as Zecco, Wells Trade and Merrill Edge. Yet it's been several years since there was this much movement. It remains to be seen whether these new reduced pricing tactics will ultimately drive up business, the discount industry is already making some full-service firms nervous.
The following is the current top 5 online discount brokerages:
1. Lightspeed Trading
Lightspeed is one of the cheapest discount brokerage. With recently acquisition of Noble Trading, Lightspeed has offered a new Web Based Trading service also known as Lightspeed Web Trader. The minimum balance to open an account is only $1,000 for cash account and $2,000 for margin account. Lightspeed is well known by active trader or day trader with their fast execution through their Lightspeed Trader software platform. Investors or traders can buy or sell stock, etf, option, forex and future for trading. To trade stock, you only pay for $0.00395 per shares with $0.40 per 100 shares. The minimum is $0.40 per trade. For Option, there is no ticket fee to buy option; it only cost $0.50 per option contract. If you use Lightspeed Trader which is software based platform, the minimum balance requirement will be $10,000 per account.
2. Interactive Brokers
Interactive Brokers (IB) is another discount brokerage well known to active traders. Trader can buy and sell stocks, etfs, options, mutual funds, forex and future. IB also offers a low commission brokerage. To buy stock, it only cost $0.005 per share with $1.00 minimum per trade and a maximum of 0.5% of trade value. The fees structure is made to lower the commission fees for penny stock trader (i.e. less than $5.00 shares). Similar to Lightspeed, there is no ticket fee to buy option; it only cost $0.70 per option contract. The minimum balance to open an account is $10,000.
3. Just2trade
Just2trade offers a flat rate commission fee of $2.50 per trade. There is no limit on shares quantity. Trader or investor can trade stocks, etfs, options, and mutual funds. To trade option, it will cost $2.50 and $0.50 / contract. The minimum balance to open an account is only $2,500. You also can trade on pre market and after market hours for extra fees. Just2trade also offers a level 2 quoting for free using J2trader.
4. OptionsHouse
OptionsHouse is a brokerage with a flat rate commission fee of $2.95 per trade. It offers stock, etf, option, and mutual fund. There are 2 different commission structure of option trading, the first plan is for less active traders and the other is for active trader. The minimum balance to open an account is only $1,000. For less active trader, it will cost $5.00 for up to 5 contracts. Additional contract will cost $1.00 addition. While for active trader, it will cost $8.50 and $0.15 per contract.
5. eOption
eOption offers stocks, etfs, options, and mutual funds. eOption also offers a flat rate commission of $3.00 per trade. eOption is especially famous for complex option trader. EOption slogan is Exercise Your Option to Save. To trade stock, it only cost you $3.00 per trade. There is no limit of shares amount. To trade option, it will cost $3.00 and $0.10 per contract. There is no minimum balance to open an account.
Please check Hubpages: http://hubpages.com/profile/chan0512
Investing is a great way to save for the future, as long as you are responsible and disciplined. It doesn't require a huge up-front investment, and it doesn't require a lot of time or effort. All it requires is a small tolerance for risk, a dedicated time horizon, and an up-front time investment of an hour.
Getting Started
If you are new to investing, the first thing that you need is a brokerage account. When it comes to a brokerage account, you have several options:
- Cash Account: This is the most basic account. It allows you to purchase any type of security you want with your cash on hand. This option is suitable for most investors, especially ones starting out, and ones who don't want their money locked up until retirement.
- Margin Account: This account is similar to the cash account, except that you can borrow money to invest. This account enables some features a cash account doesn't, such as shorting investments, and selling uncovered options.
- Traditional IRA: This is the traditional retirement account vehicle. It is similar to the cash account in that you can purchase securities with the cash you have available. However, this account places a limitation that you cannot withdraw that money inside it until you are at least 59 1/2. However, you get a tax benefit for all money invested up to the limit (which is $5,000, or $6,000 if over 50). You will have to pay taxes on any money you withdrawal once you do retire.
- Roth IRA: This is similar to the Traditional IRA, except that you do not receive a tax benefit in the year you invest, but, at retirement, all of your withdrawals are tax-free.
The choice is yours, but if you are starting out, it is recommended that you choose either a cash account or IRA.
So I Opened My Account, Now What?
Once you have opened you account, the money is just sitting there not doing anything for you. This is where a little time is involved to educate yourself, and a little discipline is needed to decide your time horizon.
There is always risk in investing. You can lose money. But you can also make money. It is neer guaranteed.
So, taking that into consideration, it is highly recommended that if you are investing for the long term, you look at index funds. Index funds come as either mutual funds or ETFs, and they track an index, such as the S&P500 or Dow Jones Industrial Average. The most common and highly recommended Mutual Funds and ETFs out there are here:
- iShares S&P500 Index (IVV)
- Schwab S&P500 Index (SWPPX)
- Vanguard 500 Index (VFINX)
- Vanguard Total Stock ETF (VTI)
- Vanguard Total Stock Market (VTSMX)
When you go to purchase these funds, you will pay a commission to buy it. This is paid each time you make a trade. It is often said that traders don't beat the market because they pay so much in commissions, that is why an index fund is ideal for a beginning investor.
Also, you will most likely be asked if you want to reinvest your dividends or take them as cash. Most large companies in the U.S. pay dividends to their shareholders. As a small owner in each company in the fund you purchased, you get your dividends too. The fund will usually pay these out quarterly or annually. If you are investing for the long term, it is recommended that you reinvest your dividends, as it will boost you return.
I Did It! Now What?
So, now you have invested your $1,000 in a good index fund. Congratulations. Now, just give it time and watch your portfolio grow!
This article was written by Robert @ The College Investor. You can read more at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin!
What is Arbitrage Trading?
Equity Futures Arbitrage Trading is to exploit the differences between two financial markets. It is sometimes known as Margin or Hedge Trading or a another variation of Pairs Trading.
A common arbitrage trading strategy is to trade the S&P500 against the S&P500 futures but it can be used as a strategy in Forex and Commodities trades or stock equity futures as well as in indexes.
Using the S&P500 and the S&P500 Futures example, a long trade on one whilst shorting the other could guarantee a profit if done properly.
Fair Value
The key to this type of trade is understanding Fair Value and how Futures are priced. A common misconception is that if say the S&P500 Futures are currently 6 points below the current cash price, all you would have to do is enter along on the Futures contract whilst shorting the Cash......
.....In actual fact this type of trade may be locking in a loss rather than a guaranteed profit......you have no way of knowing whether the Futures are actually priced at a premium or are discount compared to the cash markets, without first calculating its Fair Value.
Arbitrage Trading
Arbitrage trading can be done profitably but the margins on the previous example are likely to only be fractions of a point and last for only a short time until the natural buying and selling forces in the market force prices into realignment.
Arbitrage trading related instruments can offer a guaranteed return on an investment but as a rule the margins involved in these trades are so tight that it is not a practical trading strategy for most traders as spreads are just too wide and do not have the means of trading fast enough to take advantage of the opportunities as they arise.
Pairs Trading
What most traders refer to as Pairs trading is a much more accessible Arbitrage trading strategy but does not offer the guaranteed returns offered in the previous example. Pairs trading is the same type of trade where one is matched against the other but involves trading related or different markets as opposed to two instruments related to the same market.
This type of arbitrage trading may not offer guaranteed returns but it can reduce risk to the traders portfolio. This can be done if the pairs are properly matched as one will do better at times when the other is doing less well, thereby producing an overall balanced portfolio.
Learn how to calculate Fair Value
Learn How to Calculate Fair Value at -TradersDayTrading.com
This article was written by Kenny M of http://www.tradersdaytrading.com - A traders guide to Learning about the stock markets and how to start day trading - successfully!
Copyright: you may freely republish this article, provided the text, author credit, the active links and this copyright notice remain intact.
There are exchange traded funds for all types of investments. One of the most popular today happens to be, you guessed it, GLD or other gold related ETFs. Based on the current gold cost rising and the discussion or controversy as to why ranges from inflation expectations to protection against a collapsing currency. The inflation reason make more sense because the collapsing currency story doesn't hold true for each and every country or currency around the world, yet gold is certainly sold or bought around the globe.
Even though inflation may not exist currently as measured by governments statistics such as CPI (Consumer Price Index). This is another controversial metric due to the fact that when reporting CPI, the Bureau of Labor Statistics chooses to ignore food and energy from the index. It has been long argued that these items represent a large component of household expenditures, and has been on the rise in recent years, but they chose to report what is called a core inflation number which is also adjusted for seasonality. Seems to be suspect at best.
Current gold cost does not rise and fall based on CPI or inflation. The price rises or falls on expectations of what people think is going to happen, and more importantly what people think other people will do as it relates to buying or selling. These are the dynamics that move markets, not the reported data that comes out after the fact.
As the worlds largest gold backed exchange traded fund, the SPDR Gold Trust (GLD) reports that It's holdings are over 1,297 tones on December 7 2010. As a side note, if all the gold bugs and bulls decide the uptrend was over, who would the owners of GLD sell all that gold to?
Some gold holders take the stance that they are protecting their money or investments by purchasing or maintaining a position in the yellow metal. It's not clear what protection they have other than an all out collapse of all currencies, asset prices and other holdings. If that type of Armageddon were to take place, then who would you sell you gold to in an effort to raise money? If there was a currency collapse, what money would you be raising? If there was a collapse of everything, why would gold not participate? These are the questions that never seem to get answered. The common and programmed response is that if the dollar were to collapse, then gold would skyrocket because it will be the only true currency. Again, nobody seems to be able to answer why. It seems that not enough people agree that if there were an asset deflationary spiral, then those with "dollars" would be the best positioned to purchase assets at bargain basement prices.
Notwithstanding the fact that deflation is primarily dismissed as the inevitable outcome in the US and the Euro Zone, and many still point to inflation resulting from the "money printing" that they believe the fed has been conducting. What is NOT being discussed is the twenty year deflation environment Japan has undergone, and the effects on the Yen and their in country assets. They tried to "liquefy" their economy in much the same manner we are today, their asset prices were depressed, the Nikkei has been in a bear market for almost 20 years and yet nobody want to realize the parallels between the US and Japan. In fact when looking at the outstanding national debt, we are very similar to each other.
Buying gold for protection may just be another media manipulated, fund manager created and band wagon excuse to drive prices into an inevitable and probable bubble.
Invest with vigilance.
David Frost is the founder and an analyst for Strategic Forecasting. They provide market forecasts for clients throughout the world. For more great information on Gold Investing or other financial related topics please visit http://www.MyStrategicForecast.com/
The Internet has no doubt revolutionized the very concept of communication. The convenience of communicating as well as conducting trade right from the comfort of one?s space is the key advantage associated; online stock trading is no exception. Getting involved in BSE or NSE trading via an online trading account happens through a mediator, i.e. the share broker who takes care of all the buying and selling process including monetary transactions. Getting exposed to identity theft and fraud and related security problems is a major menace. When you opt for online trading, taking the services of a SEBI authorized share broker is thus a must. Choose to become a member of only those online stock trading platforms that are reputed in the market as trusted brands. Here, you can at least be hundred percent assured of your security.
There are several advantages of online trading. No matter where you are, trading in a share is possible anytime during the trading hours. Placing orders, holding stocks, and investing happen instantly with no hassles. Having access to everything related to BSE or NSE trading also happens with a few clicks of the mouse. Monitoring of your investment portfolio anytime anywhere is possible with online stock trading. Planning and strategizing thus take place more effectively.
Volatility does always rule the roost; it all depends on how the investor proceeds forward with the trading of a share. The market also moves between positive and negative terrain during the day. Mornings may seem very positive and the vice versa can happen too. It may weaken and then turn positive for a brief period in mid-afternoon trade and further weaken before the closing time. Recovery does gather steam sooner or later; staying updated with the up-to-the-minute market conditions, especially for intra day trading in share is a must. Market in the uptrend does not mean that you will always gain with every share. Market in the downtrend also does not mean that you will always face losses. Losses and profits, i.e. risks again depend on the potentiality of the stock. There are stocks that often maintain an uptrend no matter whether the market is going low or high. Finding such stocks is no easy job. Yes, if you are a seasoned expert, always inquisitive to learn and conduct research besides also staying updated, there are great chances that your chosen stocks will turn out to be potential.
NSE trading refers to trading in a share listed in the National Stock Exchange. This leading bourse of the country caters to several segments in the Indian capital market; the major segments include retail debt market, equity, wholesale debt market, futures and options, stocks lending & borrowing, currency futures, and mutual fund. There are many firsts credited to the National Stock Exchange, always staying at the forefront of modernization of India's capital and financial markets ever since its inception. Invest smartly so that your NSE trading yields the maximum returns you expect!
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Nirmal Kumar is author of market analyst and is writing reviews articles on stocks and shares, national stock exchange and online trading.
With so many investors putting money into bonds as well as bond funds, it makes a bit of sense to understand a couple of straight facts about these types of investments. For starters, the value of a bond can fluctuate just as a stock price will, but with bonds the relationship is not necessarily with economic data but with interest rates (although many will argue that there is a direct relationship between economic data and interest rates). Since rates are at a particularly low point in history, the risk that many bonds and bond pools face specifically is that rates will increase. It seems reasonable to expect such a risk given that rates are so low that the only way they can go is up.
There are several things that income-minded investors can do to protect themselves against the upside risk to interest rates and many of the professional bond managers have already started taking such measures. The biggest and most obvious is that they have reducing the duration (length of bonds) on their portfolios. In the past, longer-term bonds might have been held in order to realize greater income, but given the higher sensitivity of these longer-dated bonds to changes in rates, it has made a lot more sense to hold shorter-term bonds.
Knowing what your portfolio's duration is allows you to determine what a corresponding interest rate change will mean to the market value of your portfolio. Again, the longer the duration, the more of a price change you can expect to experience, rewarding shorter durations with less volatility and potentially punishing longer-term durations with greater value fluctuations.
The easiest way to figure this out as an estimate is to determine what you expect will happen to rates. Many rate forecasts are available online at various financial websites, including your own' bank's site. With the estimated change to rates, investors simply multiply that by the average duration. So, if you expect to see a 2% increase to rates and your portfolio's duration is 5 years, then you could reasonably expect to see a 10% change to the value of your portfolio. This works both ways (up or down) but given that rates are expected to increase, it makes sense to expect a drop in value rather than an appreciation in value.
Using this tactic can help you measure the true risk associated with you bond holdings, allowing regular investors who have found this asset class so appealing to put dollar figure to the loss in value that they can reasonably expect to realize in a rising-interest rate environment.
--> Some Bond Funds have performed exceptionally well over the course of the year. However, there is much to be worried about. Find alternative investment options at the Mutual Fund Site.
Chris has more than 17 years of financial services experience. He is a frequent contributor to the Mutual Fund Site where more than 50 of the "best" Mutual Funds have been reviewed, complete with top holding analysis and commentary.