Catnip of the Stock Market

I have got watched my true cat drama with a bag of catnip. At first he is having merriment and slowly he goes intoxicated with pleasance and then finally he goes so besotted he falls over to kip it off. The pleasance portion is great, but I am not certain if he awakes without a hangover.

Rocket (that's his name) reminds me of a 1 of those people who purchase a stock and throw it. At first while it is going up there is great pleasance and then euphoria until they cognize they are market geniuses. That's the drunken stage. Finally when the market turns against them they fall over not having adequate sense to discontinue (sell) and later when realisation tax returns they have got a huge katzenjammer (called hindsight) - and no money.

Can these 4-footed animate beings learn us 2-footed animals anything? Can we be smart adequate to discontinue while we are ahead? Rocket (and his friends) go on to do the same mistake clip after time. We are supposed to be smarter so let's learn from their misconduct.

If you have pillory and/or common finances and the market is going up it is ace catmint and we maintain buying knowing that somewhere over the rainbow we are going to be rich and retire like kings. Almost none of today's investors ever believe about selling. Wall Street states us to purchase and hold. They don't desire you to sell because if you make they discontinue making money. Brokers do nil on money market accounts.

Today with money market accounts paying less than 1% investors cognize the market will come up back up. That is what all brokers preach. That is their catnip; their promise of better modern times ahead (with no program to protect your cash). If they take that catmint promise away you might sober up and get quit of those losing pillory and common funds.

The great female parent of all stocks, AT&T, well, it used to be, have dropped from $100/share to $14. What are those widow women and orphans eating for supper now? Not steak. Maybe true cat food.

When your equities are no longer rising and many are declining it is clip to go out the market. Give up the catnip. When the tendency Michigan its upward angle it is clip to sell. Of all methods of investment the safest and most dependable is tendency following. It is the catmint on the manner up, but when the tendency starts to worsen you recognize you are one smart true cat and you are sober and walk away (sell).

Buying Mutual Funds

It looks like the market is ready to begin up again so it is clip to purchase common funds, but you only desire to put your money in finances that spell up. First, you don't desire to begin with a loss so be certain to purchase no-load common funds. There is no need to ever pay committees as there are respective thousand finances that have got no committee whatsoever for either purchasing or selling.

If you speak with a broker he will seek to mistake you that a committee monetary fund is better than a no-load fund. He is lying. Find another broker. Also don't pay any attention to who the monetary monetary fund manager is. All large name fund managers have got cold time periods when their finances travel down.

Another thing the "experts" state you is expression at the disbursal ratios. Nonsense again. Whether it is 1%, 2% Oregon 3% the lone thing you are concerned with is is it going up because that is the nett figure for your bank account. If you purchase a monetary fund at $20/share and it travels to $40/share make you care if the disbursal ratio is 10%? (It won't be.) The lone thing that counts is the underside line.

Now the most of import thing. Which no-load fund? There are respective good sources. Go to the library to look in recent dorsum issues of Investor's Business Daily. On the first page of the second subdivision under "Making Money in Mutuals" near the underside there will be a box listing 25 to 50 funds. You will desire to happen the top finances for the past 3 months, 6 calendar calendar calendar months and 9 months sometimes in respective different issues of the paper. Don't pay any attention to a longer clip period of time than 12 months. You desire finances that are going up now. In the same paper you will happen the toll-free phone numbers listed by the name calling of the funds.

Or if you can utilize a computing machine travel to www.smartmoney.com. Chink on Mutual Funds. Then chink on 25 Top Funds. Here you will happen another listing of the best acting finances for the past year. Most of them are no-load and if there is a loading charge it is shown in the Fee column. There are many Internet beginnings like this if you desire to Hunt for them.

Call to be certain they have got no salvation fees if you make up one's mind to sell them in a short clip period of time. This is important.

With your computing machine Oregon you can utilize one at the library I suggest you travel to www.bigcharts.com or www.cbsmarketwatch.com to look up each monetary fund by the symbol. You will immediately see why these peculiar finances are a good buy. They have got been going up even when the general market was going down. As long as this upmove goes on you will desire to have these funds. When they begin down you must sell them to protect your capital and your profits. Never remain with a monetary fund that is going down. Brokers will not make this for you. You must be in charge of your ain money.

This may or may not be the start of the adjacent bull market move, but if it is this is the right manner to purchase common finances now or any time. (Cut out and salvage this column.)

Hedge Fund 101 - Make Money with Hedge Funds

Investors are always looking for the best investings that volition output the most profit. Any investor who can afford the extra cost should see investment in Hedge Funds. Hedge Funds were started in 1949 by Aelfred Winslow Jones, who pioneered non-traditional investment strategies. Mother Jones innovated this new investing strategy by merchandising short stocks, while purchasing other pillory (long stocks). Hedge Funds are very similar to Mutual Funds, except that there are fewer ordinances on Hedge Funds. As a result, Hedge Funds usually necessitate a much larger investment.

What Are Hedge Funds?

Hedge Funds can assist investors do more than money with higher-risk investments. Other techniques used in Hedge Funds include “leverage,” which is borrowed money to merchandise in improver to the capital provided one’s investors. The usage of Hedge Funds also necessitates an inducement fee. An inducement fee is a fee based on a part of the client’s net income as opposing to a fixed percentage of assets. This fee is then invested and ideally will derive the investor more money.

Generally, companies are the proprietors of Hedge Funds because most people make not have got got adequate money to ran into the minimum investing required to have a Hedge Fund. In 2004, Hedge Fund investings passed the $1 trillion dollar mark. In mid-2004 about 39 companies shared the sum Hedge Fund values of 1.1 trillion dollars.

Common Techniques for Investing

There are also other techniques for investment with Hedge Funds. One manner is to put in a company just before a major merger. If one additions knowledge of a merger, and purchases large amounts of share in a company that is about to merge, the shares travel up greatly once the merger occurs. This is, unfortunately, a very high-risk investment strategy because some mergers may not occur.

Other techniques include selling short, which is where one put in seemingly undervalued securities, trading trade goods and FX contracts, and taking advantage of the separation between the current market terms and the highest purchase terms in events such as as mergers.

Why are Hedge Funds Beneficial?

Hedge Funds are also good because of their high degree of security. Hedge Funds are private, between individuals, and make not have got to be made known to the authorities or other companies. Currently, Hedge Funds make not need to be registered with the SEC. Hedge Funds are also based in topographic points with less ordinances (I.E. The Cayman Islands, The Virgin Islands, etc). However, one drawback of Hedge Fund security is the fact that it looks leery to have got close investments. For this reason, many companies and investors are criticized for being involved with Hedge Funds.

Conclusion

Hedge Funds are a very risky investment, with a large payoff. In order to put in Hedge Funds, one must be prepared to do a very large investment. Hedge Funds are similar to Mutual Funds, except there are less ordinances on Hedge Funds. Less ordinances lead many people to be leery of investors who put in Hedge Funds. However, if one is willing to take the risk, Hedge Funds can certainly pay off!

Box Of Chocolates

Ever have got one of those sample boxes of candy? Each small piece is beautifully wrapped in colourful foil or decorated with an interesting design. Taste just one. So good! One more. And another. Before you cognize it the box is empty. Nothing left.

This upmove in the stock market is very alluring - and could go forth you with a pot ache.

All the market "experts" are telling you that the bull market is back and to get your purchasing clothing on. Open your wallet and get in before it is too late. Mr. Schwab states it is dangerous to be out of the market. There are great values out there. These pillory are so low they can't travel any lower. And there is a Santa Claus and an Easter Bunny.

There is one place I make advocate, but most broker and financial contrivers won't like it. It is called CASH. No broker believes cash is a position. They state you must always be "invested". It looks they have got got got forgotten that investment intends making money and another of import portion of investment intends not losing money.

For the last calendar month we have seen the market travel up and some of you have seen some of your money come up back. Not too much, but some. You desire desperately to believe the bull market is back and your profits will be restored. I sure trust so. Just say this is what is called a mass meeting in a bear market and that it will not last. Then what? You don't desire to see your investings steal away again, make you? You don't cognize if it is a good thought to sell now or wait. Your broker won't be any help.

There is a solution. Stay with your pillory and common finances as long as they are going up, but sell them if they travel down. How? Every Friday after the stopping point you get the settlement terms of your assorted issues and you then name your broker Monday morning time to set in a "Good Til Cancelled Stop-Loss Order" that is approximately 10% below that shutting price. As long as the stock is going up you follow this process every hebdomad and eventually you will be stopped out. Never travel your halt down. You no longer have got to think if this is the highest terms that your stock will reach. The stock itself will state you.

Now you have got cash and, if you desire to, you can purchase a better stock or common monetary fund that is going up..

When you pick out a new cocoa (stock) make it carefully and don't seek to eat the whole box at once. Sometimes it is best to set the box (your cash) away so you can come up back to it another day.

What Do You Mean By Diversity?

The word ‘diversity’ is a alone one. It can stand for many things, depending upon its context. To work in a diverse workplace is to have got all genders and ethnicities represented. In another example, people endeavor for diverseness within their leisure clip activities, while at the same time seeking consistence (yes, that is strange).

Used to depict your financial affairs, diverseness is equally important, and I’d be happy to share why this is so. Rich Person you ever met person who said, “I put all my finances in small technical school stocks?” Iodine have, though they’re not as vocal about it these days! The same tin be said for those who prefer healthcare, existent estate, debris bonds, emerging markets, or their sleeping room mattress! Every section of the market have short-term and long-term cycles and fluctuations, and no 1 is immune to them.

I prefer nothing! No section of the market is more than or less important—they all have got a role. I manage assets like I feed ducks—everyone gets some, but no 1 gets too much. Handled mathematically and reviewed regularly, there is, in my opinion, no better manner to near the issue of long-term growth.

(If you go on to have got any fat ducks in your portfolio, I would urge you set them on a diet.)

© 2005 Matthew S. Clement, All rights reserved

Principles to Ensure a Fantastic Financial Finish

Most people want to get to the end of their lives and be able to live comfortably, take care of themselves and leave something for their children. These are admirable goals and very achievable - especially if you have a good plan! While I am not giving specific financial advice, these are the principles I live by and believe can bring anyone to a fantastic financial finish! As always, check with a financial consultant before taking action.

Aggressive in the Beginning, Conservative in the End. The way finances work long-term is that you want to maximize your returns when you are young, while tolerating more risk because over the long-term you will recoup any losses you may incur because of the risk. This is why when you are young you can get more aggressive. You have more time to let your returns accumulate. However, the older you get, the more you want to be transitioning into more conservative, capital-protecting investments. This way short-term market fluctuations won't affect your day to day living situation. I personally, at 33 years of age, have my investments in very aggressive stocks and mutual funds. I may be down 10 percent one year but up 80 percent the next. Over time the investment make more gains than losses. I have 30 years before I need to be more conservative. As I get older I will shift into stocks and mutual funds that may only give me 7-20 percent a year but will assure me of less risk. This idea lets me get as much as I can while I am young and can afford risk, so that when I am old I can draw a lower percentage off of a bigger net dollar amount.

Use Insurance. I am not an insurance salesman, but I could be! When my dad died when I was 4 years old, he was making $89,000 a year (In 1970). That's pretty good! He had $30,000 of life insurance. That's pretty bad! For a very nominal fee, he could have protected his family and left them with a couple of million dollars to maintain their current lifestyle. For many, you will want insurance to protect your assets you will be passing on to your loved ones. Don't let the government get too much! Find a good insurance agent and they will help you out. Also, make sure you have all the right kinds of insurance: Life, health, disability etc. All of these tragedies can drain your long-term financial health.

Use a broker. The brokerage business is going through a radical transition with the onset of the Internet and that is good. It will make them sharpen up a bit, drop their fees and offer more in return. For a while I was anti broker but now I have come full circle and realize that it is good to have somebody watching your investments for you. Just be sure to tell them that you want them to be proactive with your account and communicate with you regularly. This way you get the benefit of their expertise. If you want to keep an online brokerage and trade stocks, that's okay. Give your self a little to play with and leave the rest to the professionals.

Start Early. Even if you can only put $10 a month away, do it. The law of compounding interest is simply amazing. If you put it away early on, at least you give yourself something that is growing. And if you have kids, consider giving them a head start by putting some away for them. The 20 years it grows before they take it over will mean a lot to them.

Be disciplined. There are primarily two ways to be disciplined if you want to have a fantastic financial finish: Disciplined in controlling your spending and disciplined in saving or investing. This means that you commit to spending less than you earn. Add it all up. Are you spending less than you earn? Or are you going deeper into debt? Also, are you putting something away each month? You may think that you don't have enough to put away. Even if you can only put away $10 a month, you should be saving and investing.

Stay Out of Debt. Debt is an absolute killer. It will kill your future, it will kill your balance sheet, and it will kill your emotional health. If you can live absolutely debt free, I would advise it. Most people should only have a house debt. "But I wouldn't have the car I want!" you say. The question I would ask is "Do you want one of the cars you want now, with a debt coming due every month and causing pressure, or would you like to buy any car (or two or three) you want later on out of the interest your investments are throwing off - and pay cash, with no debt?"

Delay Gratification. This is the key to staying out of debt and to accumulating what you will need later on to maintain the lifestyle you desire. You have heard the old saying, "A penny saved is a penny earned." Well the truth is that a penny saved, and invested for a number of years is more like ten pennies earned! Don't get me wrong, I don't mean to live life as a pauper. In fact, when I get a big check or extra income, I give ten percent away to charity, spend ten percent on things my family would like (in other words we splurge), and the rest we save and invest. This allows us some "extras" but causes us to delay gratification that we could otherwise have if we spent the other 80%. In the end, I will be glad that I invested that money.

Read up. I would encourage you to learn about money and how it works. Even if it doesn't particularly interest you, you need to know how it works in order to manage your affairs. Know the basics of saving, investing, interest rates, stocks, mutual funds, and the power of compound interest. If I had to pick a beginner magazine that is well written and very good information, I would suggest to you Smart Money, published by The Wall Street Journal. Pick one up at the newsstand and then you can subscribe from there.

In closing, let me say that I think anyone can have a fantastic financial finish! It is simply a matter of applying these principles over the long-term and watching your money grow. Every now and then you read an article about someone who never made more than $15,000 a year and yet left an estate of millions. Get behind the scenes and you find that they saved, invested, and watched their spending.

Here's to your Fantastic Financial Finish!

Build Wealth From Home

As you sit down in traffic, inching along between irate drivers, you believe to yourself, “there must be a better way.” You get to work, you stomach another philippic from an incompetent boss, and you think, “there must be a better way.” You work hard, you’re underappreciated, underpaid, and Federal up. After all this, you can barely pay the bills, and haven’t taken a existent holiday in years.

There must be a better way.

Now there is!

You can be your ain boss, work from home, and earn more than money than you ever thought possible.

Benefits of Working At Home

Many people have got a romanticist vision of working at home, doing jobs while making money, working at their ain pace, sipping java poolside with laptop computer nearby. For most people, that dreaming will never come up true because of unrealistic outlooks and poor planning. But all of the possible benefits of working at home are in fact possible to achieve, if you take the right business and program properly.

How make you take the right business? First, you must avoid a retail business where clients anticipate you to be available during normal business hours; it intends avoiding a business that necessitates stocking or transportation products; and it intends avoiding a business that necessitates any serious grade of production, which is usually not practical in a home environment. So what’s left?

What about a business that necessitates no product, no shipping, no client service, and no regular hours. Bashes such as a business exist? Yes! It’s called trading futures. Wait! Don't be intimidated by something you don't cognize about. Trading hereafters is the most profitable accomplishment you can ever master. Trading hereafters is the world's fastest manner to wealth and freedom. This is one of very few theoretical accounts that rans into all the realistic demands for a successful home business. And you can merchandise from home even if you have got absolutely no experience, and don’t even cognize what trading is, or what hereafters intends right now. You will soon.

Here are just some of the unbelievable benefits of working at home:

Make more money than you ever thought possible

Every penny you earn is yours

Why do person else rich with your labor?

Work from the beaches of Aloha State or a Villa in Europe

Work your ain hours

No boss

No commute

No employees

Where Bash Iodine Start?

We will begin at the beginning of course! Like any new subject, at first the ideas might be a small intimidating. But we will walk you through at a gentle pace. We will begin by explaining the rudiments of futures, then depict some old trading systems that brokers urge but don’t work. We will uncover the myths and lies on Wall Street that you have got to get past to begin really trading successfully. Finally we will lead to the stars method of trading futures. starts stand ups for Securely Trading A Revolving Spread. Right now that volition do no sense, but you volition see later how this will change your life.

What the Heck is a Futures Contract?

To understand what we intend by a hereafters contract, let’s ran into Trader Bob. Our friend British Shilling is a buyer, meaning he desires to purchase a widget today because he believes that the widget will have got more than value in the future. If all travels well, British Shilling will purchase the widget now, delay for the terms to travel up, then sell the widget for a small net income in a month. But where can Trader British Shilling obtain the widget? It so haps that Trader Surface-To-Air Missile (a seller) have in his ownership the widget that Trader British Shilling wants. Trader Surface-To-Air Missile would wish to sell the widget today because, unlike Trader Bob, he believes that the widget will have got less value in the hereafter than it makes today. Trader Surface-To-Air Missile is selling today because he believes that he will do more than money now than if he waits to sell in a month.

So Trader British Shilling and Trader Surface-To-Air Missile get together and hold upon a terms for the widget. Trader British Shilling is now the proud owner. If the value of the widget indeed increases in the future, then Trader British Shilling can go a marketer and portion with the widget with a profit. If the value of the point lessenings in the hereafter then Trader British Shilling will have got to sell the widget for a loss.

This basic human relationship between buyer and marketer is the foundation for all commerce. Futures are simply a fluctuation on this theme, where instead of purchasing a widget now, Trader British Shilling contracts to purchase the widget in a few calendar months at a fixed price. The transaction still trusts on the buyer believing the terms will travel up, and the marketer believing the terms will travel down.

Trading Critters

Futures bargainers autumn into two categories: hedgers and speculators. The primary economical intent of the hereafters market is for hedging, which is buying or merchandising hereafters contracts to offsets hazards of changing terms in the cash markets. Hedge traders, such as as large commercial firms that may actually take bringing of certain commodities, like java or wheat, usage hereafters contracts to protect (hedge) themselves against changing cash prices.

Speculators, however, do up the bulk of hereafters traders. Speculators have got got no commercial interest in the implicit in trade goods and have no interest in taking bringing of the commodity. The possible for net income is what motivates speculators to merchandise trade goods futures. Speculators purchase when they believe that terms will increase and they sell when they believe that terms will fall. Futures bargainers using stars would be considered speculators.

Basic Basics

If a bargainer is a buyer, he have taken a long position. A long place affects the purchase of a hereafters contracts in the hope that the terms of the contract will increase in the future. Let’s state our friend Trader British Shilling contracts in March to purchase a widget (a long position) in June for $10. June axial rotations around, and the terms of a widget is now $13. That agency British Shilling now have the right to purchase the widget for $10 even though the going rate is $13. British Shilling travels ahead and purchases the widget for $10, then turns around and immediately sells it for $13, pocketing the difference.

A bargainer who is a marketer takes a short position, which affects the sale of hereafters contracts in expectancy of terms falling in the future. Trader British Shilling in this lawsuit contracts in June to sell a widget in September for $13. Fall come ups around, and the going rate for widget in September turns out to be $9. Trader British Shilling purchases a widget for that going rate of $9, then immediately turns around and exercisings his right sell the widget for $13, profiting from the difference. At first, it might look odd that Trader British Shilling is catching to sell something he makes not yet own. But expression at the state of affairs this manner instead: in June, British Shilling do a committedness to sell a widget to Surface-To-Air Missile in September for a guaranteed terms of $13. If British Shilling can purchase the widget for less than that erstwhile before September, he will do a profit.

All of this is made simple and easy in Trading Futures: Only One Manner to Win. Like Bob, you too can do huge net income by trading the stars method. Let us demo you how to merchandise the right way, the lone way, and a lifetime of prosperity can be yours. Just travel to www.tradetofreedom.com.

©Copyright 2004. This work is copyright. You may download, display, black and white and reproduce this stuff in unchanged word form only (retaining this notice). All rights are reserved

Plan For Wealth

One very of import wealthiness creating wont is to put up a concrete program that you can actually follow. You see, wealthiness takes planning, and is usually the consequence of taking a set of orderly, progressive stairway from where you are now to where you desire to be financially.

Why is this a top wealthiness creating habit? Because the most extraordinarily affluent people on the human race did it this way. Less than 7% of the wealthiest people in the human race received an inheritance, and of those 7%, almost none received their sum wealthiness that way. In other words, almost everyone have got to have a step-by-step program for achieving wealth. The “I hope I win the lottery” plant for almost no one.

While a complete financial program can be hard to make overnight, you can get started by practicing creating concrete financial goals. And we make average concrete. When most of us believe about our financial situation, we be given to kick from it because it do us uncomfortable, especially if we are in debt or we are not as far along as we desire to be. Stop recoiling! Take a careful expression at your financial state of affairs and set 1 to 3 ends that you desire to achieve.

Write these ends in concrete detail. For instance, don’t compose a indeterminate statement like “Pay off debt.” Instead, compose a more than elaborate statement such as as, “Reduce debt 10% by December 31, 2004.” This sort of end gives you tons to work with. For instance, if you desire to reduce your debt 10% by the end of the year, you’ll have got to consider:

How to reduce disbursals to halt accumulating more than debt, and salvage money to pay off debt.

How to increase income, if possible, to pay off the debt.

What assets you might be able to sell to pay off debt.

Do you see how a concrete end gives you a manner to believe logically rather than emotionally about your money? Ten percent of your debt is a solid number against which you can do existent computations and existent life changes. For each goal, listing the obstructions you have got to defeat and do a step-by-step program for overcoming those obstacles. And we make average “1, 2, 3…”

For instance, in the above example, if the chief obstruction is your disbursement habits, measure 1 mightiness be to listing all the possible ways to reduce expenses. In measure 2, you might name all the ways you might increase your income or the assets you could sell. If you have got a important other, measure 3 mightiness be to sit down down and discourse the state of affairs with him or her. Together you can work out a program to maintain each others’ disbursement in check. Measure 4 mightiness include instituting a disbursement plan, such as as withdrawing a set amount of cash from the bank each calendar month for groceries, amusement and miscellaneous expenses. When the cash is gone, the disbursement stops.

Does the concrete-ness of the program start to do sense? Without concrete details, you, like most of us, will be given to deal with your money emotionally rather than logically. Hard facts and figs aid us detach from our moral issues about money and enactment logically. When you get to believe and enactment logically about your money, you have got succeeded in instituting yet another top wealthiness creating wont in your life!

Risk and Reward

If you are doing your ain investing in the stock market, what would be the first inquiry you would inquire yourself before you do any trade or investment? If your reply is how fundamentally sound the stock is, or whether the stock just broke out of a trading range on a chart, or the fact that the stock have gone down 50% inch the last 6 months, or whether the volatility is low now so it is a good clip to purchase or sell, then you are probably on the route to ruin. These strategies have got got nil in common with each other and there are all sorts of different criteria that I did not advert that have nil in common with each other. However no matter what type of strategy you utilize to do your investing decisions, there is only one important inquiry that must be asked before you draw the trigger and do the trade. That is, what is my hazard and what is my reward on this trade. Even if you are going to purchase a stock and throw it for a long time, you still have got to be aware of your hazard and your reward. Why? Because the full stock market may be here for the remainder of your life, any 1 stock might not be. You think, that is all right Iodine diversified a batch so I don’t need to cognize hazard and reward. Wrong.

Diversification is great, but you should still be aware of the hazard and reward because even indexes of the full market have got a hazard and a reward, depending on the length of clip invested. Point of entrance, exit, stops, and diversification, are all of import things, but they by themselves are not hazard and reward. You have got to inquire yourself how much am I risking, and what my possible reward is. How much are the of import words

Okay how make I make that? Well first you must define your investing strategy. If you desire to purchase and throw what exactly makes that mean. Hold for 5 years, 10 years, or forever? What is forever? If you are 20 old age old forever is different than if you are 55. Also if you are purchase and holding, is forever when you halt investment or is it when you begin withdrawing money? These are of import inquiries that must be answered specifically. You might state it doesn’t matter because I will be diversified with index finances for the adjacent 15 years. Okay allow me inquire these questions. Are you 100% invested at all times? Bash you cognize the upper limit drawdown (the largest loss from the index high and low in any 15 twelvemonth period) for the index you invested in? Are you able to financially defy that sort of drawdown? Alright, Iodine cognize these are a batch of inquiries and all you desire to make is put in an index common monetary fund for the adjacent 15 old age and forget about it.

Well I am going to state right now that if you believe you are taking very small hazard on 15 old age you are wrong. If you bought the S&P Five Hundred in a 100% place in 1965 and needed the money in 1980 you would have got made no tax return on investing and had a 40% drawdown from 1969 to 1975. If you look at the time time period of 1930 to 1955, a 25 twelvemonth period it is even worse. I cognize it’s the great depression and things are different today. Don’t presume anything. I am not saying that you should not invest. I am just saying that there is a hazard and a reward. Every clip you merchandise whether it is once a hebdomad or once every 15 years, that trade have a opportunity of winning and a opportunity of losing. Also, when you purchase a managed common monetary fund for 15 old age you are not buying and holding. You are buying and merchandising but you are paying a professional to make it for you. He or she will have got draw down feathers in the monetary fund and hopefully he or she will be looking at hazard and reward for you. Even an index monetary fund held for 15 old age is not truly purchase and throw because the indexes change on a annual basis. Some pillory come up in the index and some pillory travel out of the index. The longer the clip span, state 40-55 years, the bigger the hazard but the bigger the reward. Also the longer the clip span, the longer you can defy a large drawdown if it comes.

Now what if you are trading pillory with an entry and an issue point already predefined; that is where make I get in and where make I get out. That strategy might be good but that is not hazard and reward. The most of import inquiry is how much am I invested and how much make I get out. What is the % of hazard on each stock place in the portfolio and what is the hazard to the sum portfolio. Let’s take an example. You bought 100 shares IBM @50 for $5000 in a sum portfolio of $200.000. You set a sell halt loss to sell all 100 shares if IBM travels to $40 / share. That agency your hazard on IBM is $10 / share or $1000. But your existent hazard to your portfolio is .5% Oregon $1000 divided by $200,000. If you have got a sell issue point of $100 then your reward on the stock would be 100% and the reward to your sum portfolio was 2.5%. So your sum hazard to reward was 5 to 1. You could crunch numbers all twenty-four hours to do up expressions to suit your strategy, but the most of import portion is how much are you risking. Here are some general regulations when it come ups to risk:

Don’t put on the line more than 2% on any given trade or idea. That doesn’t matter if your strategy is technical or cardinal or discretionary. Risking 1% would be safer. Most large monetary fund managers hazard much less.

Diversify. Buying 1% hazard on IBM and 1% on Dell and 1% on Hewlard Packard is a 3% hazard because they all sell the same products

Don’t hazard more than 20% of your portfolio at any 1 time, 10% would be better. You have got got to have a manner to quantify the greed factor or it might devour you and all your money at the same time.

In my ain portfolios I seek not to put on the line more than than 7% on an initial portfolio position.

Initial hazard and on going hazard can be two different risks. As a trade goes profitable the amount of at hazard at any minute in clip can be a variable not a constant. That would allow for letting net income run while cutting losings short. However, making your initial hazard a variable in most cases would be a disaster. Once initial hazard is conceived it should never be increased. Greed may go the primary factor in increasing initial hazard and that is always a fast path to increasing losses.

I trust that hazard and reward go the primary strategy concern in your hereafter investment and trading.

Earn $100 for Every 10 Cents in the Price of Fuel

I’m about to reveal a strategy that has made thousands of dollars for my clients just recently. There are no “fool proof” methods for making lots of cash. There are however, methods that can generate more cash more quickly than you can imagine. I’ll also tell you the best time to take advantage of this opportunity.

By now everyone is aware of the increase in the price of fuel. The price we pay at the gas pump seems to get more and more press coverage. That is because this is considered an extreme situation. Successful traders look for extreme situations. It’s a setup for a very profitable situation.

OPPORTUNITY

There are a number of ways to take advantage of this opportunity. The way I suggest is to look at crude oil. Fuel is made from crude oil. On the commodity exchange (a place where commodities are bought and sold) every ten cents (dime) in the price change of crude oil equals $100. Why every 10 cent move in the price of crude oil equates to $100 deserves more of an explanation than I have room in this article. This is explained in detail in the Money Tracks System at www.themoneymotivator.com.

PROFITS

Recently the price of crude oil changed $1.14 in one day. What that means is if the price changed $1.14 that equated to a profit potential of $1,140 in one day. You could have made that amount of money while you continued to go about your daily life. How would making $1000 a day change your life?

TIMING

Now let’s talk about timing and why I love weather forecasts. Natural disasters happen. I don’t want them to happen but they happen. So you may as well turn lemons into lemonade. Here’s what I mean, if a hurricane is headed for the Gulf Coast that means that crude oil will probably rise in price. Smart traders know this and they position themselves to profit from the rising price of crude oil.

REASON

The reason the price of crude oil goes up is because a major portion of oil rigs are on the Gulf Coast and they can get damaged by the hurricane or maybe temporarily shut down. This shut down of the oil rigs means there is less oil in supply. Less oil in supply means people must pay a higher price to get the oil that is available. So one of the best times to buy crude oil is when a hurricane is headed towards the Gulf Coast. Remember gas is made from crude oil. When you earn your profits be sure to help hurricane victims.

Finally, you see there really is a simple way to make money. I’m sure you have thought to yourself, “there’s got to be a better way”. Now you know you were right; there is a better way. People similar to you are making money while taking vacations, relaxing at the beach and spending time with their loved ones.

For more information on how to profit from current events visit www.themoneymotivator.com and order Wealthy Investing Secrets today.

To Your Continued Wealth-building,

David

China Syndrome

There has been great condemnation recently because China has been selling its goods on the world market at prices below what other countries, especially the U.S., can produce. It has been called exporting deflation.

The major reason for these extremely low prices has been their labor costs which I am told are about $100 per month for ordinary factory workers. Even factories in Mexico are being closed and shipped to China because of the labor differential. These extremes in production costs are literally putting many, many companies out of business. When you look at the labels in almost any store you will note the product is made in some Asian country. As far as you, the consumer, is concerned you are buying a product at a good value. Political considerations aside there is no question this has been beneficial to retail buyers.

Is there any reason China should act otherwise? No, they are acting like any businessman. Yes, I realize it is a country, but countries do the same as businesses just on a larger scale.

Suppose you and I each own a hamburger franchise. I have a McDonalds and you have a Berger King across the street. We each sell our hamburgers for 99 cents. The competition is equal. You also own a huge cattle ranch and slaughter house/packing plant as well as a large bakery and you want to increase your retail food business so you pass along the savings you make from the meat production and bakery to the burger stand. You reduce the price to 75 cents and now make a profit of 20 cents per burger whereas I only make 10 cents and must sell it for 99 cents. When someone wants a hamburger where do you think they will go?

I can scream all I want about how unfair this is, but so what. He is not selling at a loss and even if I lower my price I can't go low enough to make a profit. I eventually will lose all my customers to him and will go out of business. Is that fair? Sorry, but fair doesn't count. That's business.

China is selling hamburgers (whatever) cheap, but they are of equal quality. Consumers want both quality and price (value) and don't care where it comes from. Countries are complaining that they are selling "too cheap". No they are not because they are making a reasonable profit. One of their production tools (cheap labor) is so good that businesses from all over the world are moving there to take advantage of it. If they don't they will be out of business. You can't blame them.

Over the next 10 to 20 years China can become the world's leading country because of their economic development. They don't have the overhead (translation - central government, entitlement programs, lawyers, labor unions, etc.) we do so they will be able to keep costs down. Eventually (many years) their central government will slowly evolve toward giving more to their people, but it is going to be decades. In the meantime, learn to speak Chinese.

The Difference Between Wants & Needs

So you desire to go wealthy? While there is no single route to getting there, it's a certain stake that one rule is in topographic point for those who maintain their wealthiness over a lifetime. Live beneath your means. Spend less than you make. Don't pass more than than you can afford. It doesn't come up any simpler than this. If you desire to make wealth, you have got to learn to make this. It doesn't matter if you make $10,000 a twelvemonth or $1 million, if you don't learn how to master the measure of disbursement less than you earn, you'll never make permanent wealth.

While the conception is simple, opportunities are you are not following it. In all likelihood, you are living paycheck to paycheck, treading water. No matter how hard you try, you never look to get ahead. Even when the raises come, the money still vanishes just as fast. If this sounds like your situation, you probably have got not mastered the difference between needs and wants.

First, it's important to recognize that desires and needs are not the same. When you read that sentence, you probably said to yourself, "Of course, everyone cognizes that." Again, while everyone may cognize this intellectually, it is a good stake that you aren't completely honorable with yourself when it come ups to the things you purchase.

How many modern times have got you heard (or for that matter said yourself) "I absolutely need (fill in the blank)" when in world the significance was "I really desire (fill in the blank)?" Iodine can't dwell without those shoes...I will decease if Iodine can't have got got got that ring...I simply have to have that car...the listing can travel on and on. Please don't get me wrong. These are phrases that we all use. That is why it's important to step back and retrieve that desires and needs are not the same.

It's important at this point to do clear that taking the clip to critically look at your current lifestyle and what are the true needs versus those things that are convenient desires will travel a long manner in economy you money and enabling you to pass less than you make. Let's return an illustration of your TV. Are your television a need or a want? Although I can hear the statements already rationalizing why a television is a necessary portion of your life, the truth is that it is more than than likely a want. In most cases, it is probably an low-cost privation (The exclusion may be if you decided you had to have got that 50 inch state of the fine art plasma telecasting with the terms tag of a small car). The inquiry is whether the digital cablegram TV, 6 insurance premium channels, artificial satellite dish, the on demand movies, the DVD participant with film selection, etc are all also low-cost wants?

Here is a list. Take a few minutes to jotting down what is a need and what is a want.

shoes

designer suit

water

large apartment

bed

ice-cream

lottery tickets

car

entertainment center

club membership

lunch

concert tickets

trip to Hawaii

medicine

necklace

computer

daily espresso

cellular phone

golf clubs

furnishings

Unfortunately, the replies to these inquiries are not completely achromatic and white. What may be a privation for one individual may be a necessity for another person. For example, let's take a expression at a computer. If you do your support on the computer, then a computing machine is a necessity for you. If you only utilize a computing machine to play the up-to-the-minute online games, then it isn't. Knowing this, we can still do some pretty good conjectures as to what are desires and what are needs from the above listing for most people. Place (and clothes in general), water, bed, car, lunch, medical specialty and furnishings are good stakes to be needs. Now that doesn't intend that the up-to-the-minute model, 4 wheel drive athletics public utility vehicle with all the extras counts as a need for most people, but basic transportation to do a life does.

A large apartment, computing machine and cellular phone may or may not measure up as a need depending on your peculiar fortune while a interior designer suit, ice-cream, lottery tickets, amusement center, baseball club membership, concert tickets, trip to Hawaii, necklace, day-to-day espresso and golf game baseball clubs all probably fall into the privation section.

If you can take the clip to begin being honorable with yourself, you will happen that a batch of the things which you assumed were an absolute necessity until now are in world nil more than wants. Once you separate between the two and expression at these issues objectively, you have got placed yourself in the place to dwell within your agency by simply asking yourself whether or not an point or service you are about to purchase is a need or merely a want.

Copyright (c) 2004, by Jeffrey Strain

This article may be freely distributed so long as the copyright, author's information and an active nexus (where possible) are included.

A complimentary transcript of any newssheet or a nexus to the land site where the article is posted would be greatly appreciated.

Investment Rowing

You have got rowed a boat at some clip haven’t
you? Yes, set the oars in the H2O and pull. Of
course, you don’t cognize where you are going
because you are sitting backwards. Every so
often you have got to turn to look ahead to see if
you are pulling in the right direction.

Reminds you of the stock market doesn’t it? You have got your money invested and you are pulling
hard (working) trying to get to that rainbow
where the pot of gold is supposed to be, but you
are sitting backwards and you can’t see where
you are going.

The stock market is more than like one of those
Olympic shells with a clump of people rowing
together to the coating line. Unfortunately, in
the stock market each individual is putting his oar
in the H2O at a different minute and some are
even pushing on their oar. What a mess. How is
anyone ever going to win if they don’t all pull
at the same time? Let me give you a clue. They
won’t.

And why won’t they?

You, the small cat in the row boat, doesn’t
have got got a manager or the manager you might have doesn’t
cognize what he is doing. Those managers have got been
taught how to row by the large guns on Wall Street
and the large cats don’t care about you.

In order to go a stock broker the person
must go through a very tough test. That diagnostic test has
nil to do with helping investor make money. It is all about regulations to maintain them from lying to
you and cheating on your account. That’s good
and it works, but they are not taught how to
merchandise or protect your money.

When the broker or financial contriver does
base on balls that diagnostic test he is given two manuals. The first one
is a transcript of all those ordinances and regulations. The second is how to open up account in other words
get you to direct him your money.

There is no 3rd manual on how to protect a
customers’ money. You can’t anticipate to row your
boat in the right direction if your coach
doesn’t cognize what he is doing. When your boat
starts to leak (the market starts down) your
manager have no thought how to piece those leaks and
you slowly sink. Bashes this sound familiar?

You have got to learn how to row your boat in the
right direction by guidance through the labyrinth of
Wall Street lies. The first regulation is not to let
your boat sink. When you see a leak you must
piece it immediately. In the stock market that
is called merchandising a losing position. Stop the
leak so your boat won’t sink.

Wall Street managers are not taught this
simple technique and the brokerage house always
desires you to have got a position. When you sell you
have got cash and learn this – CASH is a position. Many
modern times it is better to be out of the market than
sinking with it.

That manner you will still have got a boat to row.

Why Investors Use Financial Planners

Do you have a financial planner? Does one of
your friends have a financial planner? Maybe you
take your advice from your broker. As I have
said countless times before a broker will make
you broker. And a financial planner won’t do any
better. I know. You thought they would.

Let’s look at the real reason investors choose
to take advice from these so called “experts”.
Once they get you into their office or sitting
with you at the dining room table or kitchen
table you are doomed. Mr. F.P. has come prepared
with beautiful slick color brochures and will
have a presentation that will utterly confuse,
bedazzle and befuddle. You will sit there and be
afraid to ask a question because you know it is
so dumb. You can’t say ‘no’ or you will be
admitting how dumb you are. And he knows that.

It is not that he is a liar. (I hope.) It is
that all financial planners and brokers are
taught the Wall Street method of “making money”.
Unfortunately it doesn’t work.

The basic things that have been pounded into
their heads are false. Let’s look at the big
three: Do Research, Dollar Cost Average and Buy
and Hold. There are others, but these you will
hear from every broker and financial planner
because that is what the big brokerage companies
and mutual fund families want. They want your
money and they want to keep it even when the
stocks or funds you own go down. In fact, buy
some more.

Research is like blowing in the wind. You will
be inundated with green sheets, blue sheets, red
sheets, slick full color glossies, videos, etc.,
etc. Think about this. If you can obtain this
information then so can everyone else.
Everything that is known about a particular
stock is reflected in the last price.
Morningstar will sell you a beautiful package
about a company, but it is worthless. What you
really want to know is will it go up after I buy
it?

Of course, if it goes down you will be
encouraged to buy more to average out your price
so that when it heads up again you will make a
fortune. Yes, and pigs can fly.

If it does go down your advisor may say to hold
on as the market always comes back. He doesn’t
tell you it may take 20 years or that the
company might go out of business. Buy and Hold
is the greatest myth of Wall Street. No one ever
tells you to sell. Have you been told you don’t
have a loss until you take it? Please!

You got that advisor because you have not
admitted to your self that you cannot pull the
trigger. When you have a stock or fund that is
falling you don’t want to sell. You have to take
charge of your money. Just you.

When you look back at the performance of most
financial planners from 2000 to 2003 you know
you can do a better job. Always ask to see what
they did then. If they lost money you don’t want
them. Don’t let them compare their performance
to the S&P500. That’s smoke and mirrors.

You can do better. Just do it.

Alfred E. Newman

What! Me worry?

Many of you remember the cover of MAD magazine. It was one of my favorites. Alfred's only worry was about his front tooth. You and I have other problems.

The one big problem we all have is enough income to support our life style. Those who are approaching retirement or are retired will have to have enough cash or income from investments or pension plans to make it. We all know you can't live on Social Security alone.

Your broker, financial planner, banker, whoever you rely upon for financial advice will advise you to start saving and to make some sound and safe investments. Most of them will recommend stocks, mutual funds and bonds as well as having your home free and clear by the time you are ready to quit. All of that makes good sense. The only thing is what stocks, which bonds and whose mutual funds should you buy? That answer is very simple. Ones that go up, pay good dividends and don't go down. The latter is not so easy so you might have something to worry about.

Unlike Alfred, you can't sit back and not worry. So which ones? This is one you won't hear on Wall Street: It doesn't make any difference what you buy. Buying does not take too much brain power. The hard part is selling. The financial mavens don't tell you that the key to success in the stock market is selling. If you own a stock or fund that is not going up or is trending down it MUST be sold or you will lose your cash.

Recently dear old Mother Hubbard AT&T, the widows and orphans choice, has been put on the sell list by some of the big Wall Street brokerage companies. Momma Tel was trading at $100 and now is about $20, an 80% loss. Investors say, "I can't sell Telephone because my Mother, Grand Dad, someone left it to them they said it was a 'good' stock and they should keep it forever". Care to look at some of the "good" stocks you have in your portfolio that have lost a huge percentage of their value? People become emotionally attached to stocks that are failing miserably. The only thing worse that than a bad stock investment is a bad marriage. With a poor stock you can sell it and be rid of that sick feeling and all those worries.

Having been an exchange member and floor trader for 17 years I know that every professional trader will tell you that you must cut your losses short and let your profits run. Very few brokers will ever tell you to sell because they have not been taught how to protect investment money.

You don't have to be smarter than Alfred E. to get out of a loser. The simplest protection for your funds is a stop-loss order of about 10%. When your stock or mutual fund drops 10% or more from its highest price you should sell it and find a better more profitable place for your money.

What! Me worry? Yes, I think now is a good time to start.

KISS Formula

There are expressions for just about everything,
but it have been shown that the simpler the
expression or method of doing a peculiar task
the better it works. It have evolved down to
kiss – Support It Simple Stupid.

This also uses to trading in the stock
market. There are literally 100s of
formulas, both technical and cardinal that
are easily available to investors. Each trader
have his ain method he uses. Every professional
bargainer on the flooring of the stock exchange has
his ain fluctuation on some major proven
formula. The more than than skilled he goes with it
the more he experiences it is the best one.

Sometimes it takes old age for a bargainer to
settle down on one method or grouping of methods that
he utilizes to signalize bargains and sells. It took me
many old age to happen that technical grouping that
worked for me when I was an exchange member.

For some it evolves into long term trading
and for others it can be purchasing and merchandising in
a matter of minutes. The clip time period is not
important. The method is. Even as a floor
bargainer on the trade goods exchange Iodine had only
two criteria I watched before entering into
any position.

All professional bargainers and investors are
aware of the single most of import fact and
that is how much I am willing to lose before I
go out this new position. Every kiss expression has
an issue strategy. Every professional cognizes in
advance how much he will allow himself to lose
if he is wrong. The professional person makes not set
a bounds on the winning side of a trade only on
the losing side.

Ask any full clip professional and he will
state you if he is right 50% of the clip he
sees that to be phenomenal. When I was on
the flooring I was only right about 40% of the
time, even about 20% and incorrect about 40%. BUT
Iodine made $3.00 for every dollar I lost. Small
losings and large victors are the cardinal to success. This is the cardinal to any profitable expression –
keeping the losings small.

When I see ads in the financial
document for methods claiming to be right 80%,
90% of the clip I cringe. It just can’t be. There is no bargainer I ever met who was that
good and I have got known some exceptional
traders.

The major textual matter on technical analysis is
“Technical Analysis of Stock Trends” by
Jonathan Edwards and Magee now in the 17th printing of
the Fifth Edition that listings battalions of
methods. They all work, but many are
complicated. A magazine called Futures Truth
analyses 200 trade goods trading systems in each
issue. Cardinal Theory is equally complex.

There are software programs that allow the
investors to come in as many as 30 parameters. The more than composite it is the less opportunity it has
to work. And the biggest obstruction to any
programme is the bargainer himself. He cannot
waver when a bargain or sell signaling is given.

Keep your expression simple and carry the
signals. You can be a winner.