Investing

Balanced Investment Strategy for Portfolio Management

2009-11-02T14:54:00.000-08:00

Balanced investment strategy is perhaps the most followed and successful investment strategy for portfolio management. Its primary aim is to keep a balance between investment risk and return. A balanced investment strategy combines the merit of aggressive and defensive investing strategies.

Aggressive investment strategy involves investing in high return high risk investments with the sole purpose of maximizing return from investments. It involves allocating major portion of portfolio capital to invest in equities, equity based funds and highly volatile markets. Investors following aggressive investment strategy often look for comparatively short-term profiting and wish to invest more in growth stocks, and small caps and mid cap stocks. Advantages of aggressive investing include quick profit, high return over investment and no need of large portfolio capital. It can work really well for experienced investors and investors who are very strict in their money management. Disadvantages include high risk, high volatility in total portfolio value and no surety of profit. It less supports novice investors and investor looking for monthly earnings or living costs.

Defensive investment strategy is just opposite of aggressive investment; it’s purpose is to preserve the capital and ensure some return from investments. It involves investing in low profit low risk investments like bonds, money market funds, treasury notes, and equities with minimum price volatility and good dividends. Defensive investors look for long-term profits and/or monthly earnings. Advantages of defensive investment strategy include reduced risk, predictable income, better investment planning and diversification of portfolio. This strategy mainly suits beginners. Disadvantages include low return from investments and requirement of high capital investments.

In balanced investment strategy, the investor tries to keep a balance between his aggressive and defensive behaviors. It involves balancing of both return and risk by diversifying investments in both high return high risk and low return low risk investments. Balanced investors often follow a portfolio capital allocation rule telling how much to invest in equities and bonds and how much to invest in treasury notes, precious metals and funds. Usually one portion of portfolio is actively managed and other portion is left to grow automatically. Balanced investment strategy can be slightly aggressive or slightly defensive with respect to investments made.

The greatest advantage of balanced investment strategy is the diversification of portfolio and hedging against high total portfolio value volatility. It is good for investors looking for medium-term (3 to 5 years) profits. Other advantages include flexibility in portfolio management, better results with better capital investments, (almost) predictable income and manageable portfolio risk. Balanced investment strategy support both beginners and experienced investors and can be an option for monthly earnings for living.

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Is Buying a House a Good Investment?

2009-10-31T15:50:00.000-07:00

Intended Audience

Individuals looking to purchase a home for personal use or as an investment. As well, looking into conventional wisdom’s statement that buying a house is one of the best investments someone can make.

Summary Points to Take Away

Why a House is good investment: (1) Forced Savings Plan (2) Leverage (3) Inflation Resistant (4) Tax Free Capital Gain (5) Control over Asset.
Points against a House as an investment: (1) Lack of Diversification (2) Maintenance Costs (3) Historically lower returns than equities (4) Unavailable to take advantage of other opportunities (5) Limited Scope.
Additional points to consider if planning on purchasing property for personal use: (1) Doesn’t provide any cash flow (2) No tax shelter from interest expense (3) Can get personal joy out of investment.
Analysis

Conventional wisdom states that buying a house is one of the smartest and best investments an individual can make. This article is geared towards challenging this conclusion to see whether this statement rears any truth to it.

Why a House is a Good Investment?

Forced Savings Plan

Most individuals claim that the purchase of their personal home was the best investment they’ve ever made, which is true in most cases because it is the only investment they’ve ever made. The general public struggles with saving for retirement; thus, purchasing a house assists in that problem as it forces individuals to continuously pay down the mortgage (or lose the house in a foreclosure to the bank); therefore, allows the storing of equity for the owners. This built up equity (i.e. market value of home minus remaining mortgage) can be borrowed against during their retirement years or they can downgrad into a less expensive house in order to provide some retirement funds to the owner. If individuals take a disciplined approach to saving, then the benefit of being forced to save in order to pay for a house diminishes

Leverage

Typical real estate purchase require only a 5% deposit, while the remaining amount can be borrowed through bank debt. Few alternative investments outside of real estate can the acquirer obtain such significant leverage, which can enhance investment returns.

Example, suppose that you purchased a home for $200k, for which you made a 5% deposit down ($10k). During the next few years the house appreciates in value and you sell it for $220k (10% higher than the level you purchased it). Though the return on the house is only 10%, the return to the investor based on invested funds sunk into the home ($10k) is 200% ($20k earned over $10k investment) - that is the power of leverage. On the negative side, more debt means higher fixed monthly mortgage payments; thus, higher risk of being able to make the monthly mortgage payments. As long as cash flow is not a concern and the mortgage payments can be met – investments should be leveraged to maximize returns to the investor. Could you imagine walking into a bank and asking for $100k to invest in equities while only putting 5% down – likely to never happen, this is a major benefit of real estate ownership.

Inflation Resistant

Real estate holds its value during inflationary periods; thus, acts as a hedge against the investors other assets that aren’t protective against inflation (ex. Currency). The asset will continue to hold its buying power (store of value), which is difficult to get outside of investing in precious metals. The reason real estate holds its value is there is the same number of houses that the increased monetary supply of dollars are chasing; thus, it’ll take more dollars to purchase the houses as the supply of houses stays stagnate while the demand rises (due to the increase in the number of dollars in everyone’s hands). This can become critical given the current economic times and numerous expansions of monetary supply across many nations, which will have the aftermath affect of higher inflation.

Capital Gain is Tax Free

In Canada, every home owner is provided with a capital gain exemption on amounts earned in excess of cost for their principal residence. Only one piece of real estate can be claimed as the principal residence per individual. For example, if you owned a home and a cottage, only one of those houses upon selling could take advantage of the principal residence exemption. No other asset class has such advantageous tax reduction characteristics. Unfortunately this is a onetime event; thus, those holding numerous pieces of real estate can only apply it to one property.

Allows for Control over the Asset

Real estate is typically an investment an individual has control over (assuming you’re the majority owner – which is typically the case) by the means of the owner has the ability to increase the value of the asset, which may not be the case in most other investment opportunities. When purchasing real estate, owners can make capital improvements to the home (ex. Finished basement, new porch, etc.), which will increase the value of the property (capital appreciation) as compared to purchasing stocks or mutual funds as assets where the owner can’t take action to increase the value of those assets (unless they’re a significant owner, greater than 20% - which is typically unlikely). The ability to control an asset adds value to the owner through what is known as a control premium, as a real estate asset may be more valuable in the hands of some individuals over others.

Why a House is a Bad Investment

Lack of Diversification

Average individual thinks the stock market is very risky while investing in real estate is more of a certainty. Purchasing equities allows the owner to conveniently hedge their risk amongst various companies in numerous industries, countries, etc. The purchase of real estate doesn’t provide the ability to diversify risk away as easily unless an investor plans on owning numerous pieces of different types of properties (ex. residential, commercial, resorts, etc) across various markets (North America, Europe, etc) – which is probably very unlikely for the average investor. Purchasing real estate prevents the diversification of risk because it’s dependent on the economic, migration, and regulation trends of the local area.

For example, assume you purchased a home in Oshawa, Ontario – which is a town extremely reliant on the large manufacturing facility of General Motors (GM). Should GM cut back on production or move their facility housing prices would fall sharply as it is the biggest employer in the area; thus, demand from individuals will decline as unemployment rises and real incomes fall. With a decline in demand and supply staying stagnate (as you typically can’t “un-build” a house once it’s constructed) the price will have to shift towards in order to align demand with supply.

Real estate doesn’t allow the investor to diversify away the specific risks in the local area as compared to purchasing equities, which allows the investor to spread risk amongst investments that perform differently during different points along the business cycle. Most individuals when purchasing real estate have all their eggs in one basket.

Maintenance Costs

Transaction and maintenance costs are significantly higher for real estate investments than stocks, mutual funds, etc. When purchasing stocks costs are typically broker commissions ($20 per transaction if using an online discount broker), while when purchasing a home it is typically 2% commission on the transaction value, significantly higher than purchasing equities.

Once you purchase shares, no further cash is required from the investor unlike real estate, which requires constant annual expenditures that continue to increase the investors cash committed towards the property, such as property taxes, insurance, utilities, maintenance and repairs of the asset, etc. These are costs that real estate investors or home purchasers don’t factor into their expected return, but play a significant role as the payment of property taxes (etc.) doesn’t contribute to the value of the property for eventual sale in the hopes of capital appreciation.

Historical Lower Returns Compared to Equities

During any 20 year period throughout history, no other asset class has outperformed equities, which includes real estate. This is from the perspective of asset vs. asset without consideration of leverage and how that may enhance returns (as discussed earlier). While it is true that over the long run real estate prices go up in value, this is typically due to inflation incurred. Recent spikes in housing prices seen in the past 10 to 15 years has been due to changing demographics, specifically the baby boomer generation (who makes up largest segment of the population in North America) go through life stages at the same time (same goes for starting a family and purchasing a home and real estate investment property). The result was a large influx in demand without a corresponding increase in supply as construction requires lead time; thus, leading to rising real estate prices.

Will this high demand continue? That’s where the argument lies. Likely there will be softness felt in overall real estate demand as baby boomers already have their homes and they’re likely to either stay put, move to retirement homes or downgrade into a smaller place in order to obtain some retirement income. Immigration will continue into North America that will prop up demand, but likely not the extent to fulfill the whole in demand left by the baby boomer generation; therefore, the future appreciation in real estate properties is likely to flatten out.

Can’t Take Advantage of Available Opportunities

The purchase of a home or real estate property requires the individual to tie up a significant portion of their net worth into the property (in a lot of cases, all of it). Having all your net worth in real estate is a risky strategy as you’ll be severely impacted by movements in real estate prices as compared to having your cash tied up into several asset classes; thus, less vulnerable to swings in any one asset class. Similar to the discussion had under the “diversification” section of this article.

With the majority of an investors net worth tied up in a real estate property, there isn’t available cash to take advantage of other opportunities that come along; thus, significant opportunity costs are involved in venturing into real estate. This should be considered before purchasing an expensive personal home or making a real estate investment.

Limited Scope

Real estate is a local good, unlike gold for example – which can be bought and sold throughout the year for the same market price. An individual looking to buy a personal home or make a real estate investment doesn’t have access to all available properties as there are physical limitations to contend with. It comes down to wanting to live where you grew up or currently work or not wanting to buy a rental property far from your home in order to reduce logistical issues. For example, if you live in Toronto, Ontario and are looking to make an investment in a rental property, you’re unlikely to consider properties in Paris, France though the opportunities may be better than those surrounding Toronto due to language and logistic issues. Equities (and etc.) are globally traded and available; thus, users can take advantage of opportunities around the world; thus, their scope is not limited to the local area of their current surroundings like real estate is.

Additional Points to consider if you’re purchasing a Home for Personal Use.

Doesn’t Provide Any Cash Flow

An asset typically provides you with cash flow, i.e. puts cash in your pocket. When purchasing a home, cash only flows out (property taxes, repairs, etc.); some would argue that if it appreciates in value then it is an asset. In this instance it is only an asset when converted into cash and if that is the case, where will you live? Likely end up buying a new house, which has also gone up in value similar to your house. This makes it difficult to realize the value of your personal home appreciation, which acts more like a liability than an asset since it takes cash out of your pocket instead of putting some in there.

Tax Deductibility of Interest

Interest expense paid due to bank loans taken to finance investment properties is deductable against income because the investor is pursuing income and tax legislation allows deduction of any expenses incurred in the pursuit of income. This is not the case for a mortgage taken out to purchase a house for personal use as the individual is not in the pursuit of income; thus, interest expense is paid with after tax dollars, with no tax shelter provided. If those funds had been borrowed to invest in equities or mutual funds, the interest would be deductable because again that would count towards the theme of pursuing income.

Can Get Personal Joy Out of It

Unlike equities and other alternative investments, the investor can’t personally use or get joy out of it as compared to purchasing a home, which the individual can live in and enjoy during the investment process. An investor who purchases shares in General Motors (GM) can’t exactly borrow and test drive cars whenever they please simply because they’re a part owner. This is a qualitative benefit that is difficult to quantify, but should be considered.

Where to go from here?

The main reason to purchase a house is to have somewhere to live and enjoy their life, don’t think of it as an investment. Buying a home isn’t a bad decision; it is the investor’s perception that may be tainted because it is important to realize that there are many arguments against a home as an investment to be considered. Don’t buy real estate property with the mindset that an individual can’t lose and that there is no better investment opportunity than to purchase a home, etc. Beware of conventional wisdom that states there is no better investment than purchasing a house.

THANKS,

SIMON GIANNAKIS
Simon Giannakis is the founder and creator of www.THATSTOCKGUY.NET. He currently is a Senior Accountant within the Assurance and Advisory group at Deloitte & Touche LLP in Toronto, Ontario. He has a BBA degree from Wilfrid Laurier University and is currently pursuing both CA and CFA designations. Simon can be contacted through thatstockguy.net@gmail.com. IF YOU WOULD LIKE TO CONTRIBUTE AN ARTICLE TO THATSTOCKGUY.NET, PLEASE CONTACT US.

Investment Aspects Of Art

2009-10-29T16:45:00.000-07:00

Most people, at least, in the West, know that art can have value. After all, they have been reading about Van Gogh, Picasso, or Klimt paintings selling for millions of dollars for decades. However, most people do not know that you do not have to be a millionaire to invest in and make money from art. Art is simply another investment asset class that savvy investors include in their arsenal. Therein lays the key to understanding.

The sad truth is, also, that most people who invest in the more common investment assets, like stocks and bonds, do not understand investment in those more common investments. I always hear people talking about "playing the market", yet, as any professional investor will tell you (it just so happens that there are so few that odds are that you never met one), although it is a game, it is not a game for novices.

The first person to formalize a mathematical framework for economics and finance was John VonNeumann, a mathematical physicist, who invented game theory as the basis for studying those fields, in the early part of the twentieth century. Indeed, until the 1980's, most of economics and finance sprang from this basis, and the focus was to assume, just like in playing dice with perfectly symmetrical cubes or flipping a so-called fair coin, that investment was a fair game: there was equal probability of gain or loss and the distribution of outcomes was the bell-shaped curve.

Since the 1980's the behavioral school has gained ground, in the theoretical realm, by assuming that since people are not perfectly rational, we should examine the actual behavior of people in business and investment situations. Of course, that is something that investment professionals have been doing for centuries. Dow and Jones, in the 1880's, said, for example, that at market tops the professionals are already well out of the market. After a crash, which will always happen because emotional human beings are markets, professionals quietly begin to buy. Their buying, eventually excites technical market analysts' technical market indicators, which are somewhat based on supply and demand analysis, in real markets, and technicians begin to buy and recommend buying. Eventually, the general public catches onto this news, which is really very old news, and they jump onto the band wagon. Everyone tells everyone how smart they are and how much money they made yester day trading on-line. Meanwhile the professionals have begun to quietly exit the market. A peak comes; a crash comes. Then, all of those self-proclaimed investment mavens console each other and support each other in their ecstasy turned agony. Some run to the authorities and claim that they were duped because they did not understand the complex nature of the mini-bonds that they bought: translation - they were so greedy when they were told that they could make unbelievable returns, and they did not want to hear about the risks. Another lesson that the theoreticians finally came to admit after the stock market crash of 1987, which, statistically, should not have happened in the whole history of the solar system, was that the distribution of returns is skewed with a longer tail on the down side.

It will be beneficial to understand the basic framework of a market, investing, and basic economics. Economics assumes that people are self-interested. Its only fault is that it assumes that people follow enlightened self-interest: no greed, lying, or cheating. Finance says that there is a difference between price and value: value is what someone thinks that something is worth, while price is the amount that someone actually paid for something. People make markets. A market is not, necessarily a place, like the New York Stock Exchange. Indeed, many people do not even realize that the NASDAQ market is not like the NYSE, it is simply a network of dealers, connected by computers, who maintain bid and ask prices for NASDAQ stocks. This is referred to as a dealer market or an over-the-counter market (OTC), as opposed to the NYSE, which is one physical exchange through which all orders to buy and sell are funneled. In fact, many people do not even know that the NYSE is a very special exchange, in that all of the stocks on the exchange are assigned to specialists who are the only one that you can buy a particular stock from. The specialist maintains an order book of bids and offers, and he has the ultimate in information about supply and demand for his stocks at any moment in time. As part of his job as a specialist, he can invest his own capital, in his stocks. All the other layers of the business that deal with the investing public, after that, are in marketing. A stock broker, for example, is just trying to make commissions when he calls you with a hot tip. Even at the level of institutional sales, salesmen, analysts and block traders are just trying to get commission dollars. None of them risk their own capital. There are also investment bankers who help companies raise capital by issuing new stocks and bonds, and there is a large market effort accompanying that. An underwriter might risk his capital by agreeing to underwrite the deal at a price for leftovers and may support the stock, in the secondary markets, by buying for a month or so.

So, let's look at the art market. A market is where supply and demand sort out price and volume. Art buyers, collectors and investors make up the demand side. Retail investors are smaller buyers of art, while high-net-worth individuals, trusts, corporations and museums fulfill the role of institutional investor. Art dealers act as brokers, dealers, and investment bankers for art. They act as brokers by taking consignments for sale or request to buy from customers. They buy and sell art for their own account as dealers. By taking on new, undiscovered artists, by having shows for artists at galleries (much like the road show investment bankers do for IPO's of stock), and by acting as agent or dealer for an artist, they fulfill a role, much like investment banker. Ultimately, supply is limited, depending on the artist. Once an artist is dead, supply is fixed.

Value begins, as in all of economics, with scarcity. It is the same principle that drives the precious metals market, the crude oil market, and the art markets. As with anything else, quality also plays a role in determining an appropriate price. However, also, like with many other things, including any type of investment, marketing plays a major role. Galleries, dealers, and art critics try to tell people what is good and what is bad art. Sometimes, I wonder about their opinions. Other times I have benefited, as in the sale of a table made of roots onto which birds were carved, and as one of only two found examples by this unknown folk artist from the 1800's. Sale of the table brought over $4,000, back in the mid-1990's. These art market analysts play the same role as securities analysts, in the stock and bond markets. They might even make buy and sell recommendations, and they might estimate values of artworks. Since art is supposed to make you feel good, your basic starting point should be to look to buy things that you, personally, like, then, check out the price.

In the securities markets, smart investors value things on a comparative basis. Instead of trying to figure out what prices or returns should be, stock analysts use comparative P/E ratio analysis, comparing one company to other companies, in the same industry, and comparing P/E's of stocks and industries to those of the general market. In bonds, the yield-to-maturity (YTM) of a bond is compared to current market YTM's of bonds of the same company and to general bonds with similar maturity, coupon rate, and risk. In the same manner, the value of works by an artist can be compared to one another and to those of other artists. Normalization, in the context of paintings, involves an artifice: converting prices to price per square meter or per square inch. One might make similar size normalizations for, e.g., teapot art and sculpture. However, price per unit of size might vary over an artist's work with larger ones, perhaps, trading for lower price per unit of size, and their more famous works trading at higher price per unit of size.

Having built a comparative pricing system for art, one can compare the prices of one artist to another and the average prices of one artist over, a school, a movement or a period by construction single artist or composite price indexes and looking at their evolution over time. That also allows you to calculate returns since return is defined as the percentage change in price over time. You can compare prices from galleries, which is the retail market. The next layer of the market, much like in other investment markets, is an inter-dealer market. The final layer is the auction market, which in some respects is like the exchanges, in the securities markets, but it is a stop-out market: a market of last resort for sellers. The auction markets are more fragmented than the auction markets, in securities; they are not open every day, either, unlike their counterparts in securities. Price information of one sort can also be garnered from the auction markets for artists for whom there are auction records. There are also research and information services, in the art markets, mirroring similar services in securities and commodities markets.

I bought my first piece by a famous artist, Joan Miro, in the mid-1980's. I was surprised to find that the price was only several thousand dollars. By the time that I bought my third Miro, I had learned about and used information from the auction record to pay the proper price. In succeeding years I bought art by many famous artists. Although the art that makes the headlines makes it seem that all art is out of reach of the man on the street, you will be surprised to find out that art by many known artists, past and present, is not that expensive. Another little known fact is the good returns that can be made in art, especially when one approaches the market with the tools and techniques as one would in any other investment asset market. During my decades of trading art, in the U.S., I cannot recall a time when I lost money, and returns have always been exceptionally good, especially when compared to returns of other investment assets. I can even recall times that I have continued to earn a profit, in art, even during downturns in securities and real estate markets.

Now, we are investing in and have set up a dealer in Chinese art. I moved to China four years ago to teach finance and economics at South China Normal University. I have been immersed in the Chinese social and economic scene, and I have concluded that the best current market in China, today, is the not the export market or the stock market or real estate, but, instead, the art market. Returns, in art, in China, have been above twenty percent per year over the last decade, in local currency, and the continued undervaluation of the Yuan versus foreign currencies, coupled with other socio-economic factors, make investment, in this market, appear to offer good opportunities over the next several years, especially for foreign investors.

Up through the 1970's and early-1980's, investment in stocks and bonds seemed outside the reach of the man on the street. By the 1990's everyone and their brother was trading stocks on-line through discount brokers. Now that we are in the twenty-first century, the next time you think about art, remember that it is just like any other investment asset, like stocks, bonds, and commodities, it is not outside the realm of investment possibilities for the average investor. Think of the analogies that we have laid out between art and securities investing and markets. You can also find out more information about investment, art, China, and investment in art in China on various parts of our website.

February 24, 2009 Craig Mattoli, CEO, Red Hill Capital, owner of Leona Craig Art, Guangzhou, China
An artist, liguist, physicist, arbitrageur who specializes in investment in inefficient, undiscovered, and misunderstood markets.

Get Reviews On Property Investment And Wealth Management

2009-10-27T18:48:00.000-07:00

Property investment has always been one of the most common methods of investing capital & can be a lucrative business option and hence many investors consider it an integral part of their diversified portfolio. It is a long term investment for individuals or families to obtain financial security for their present as well as future. However, you should consider some important points while doing property investment. If you are a beginner, you must look for a profitable property investment. The bottom line of property investment is to find an affordable property that can prove to be highly lucrative for the future. As time moves on, for example with newer media options of television and internet, new trends in property investment are appearing. So, always keep yourself informed about upcoming trends in property market with the help of these informative mediums. Prepare your property for resale and then sell the house quickly.

Residential property investment is the investment that can carry low risk and is not like investing in commercial property where investors have to worry about the conditions of businesses. Property investment loans are not as difficult to get as other types of loans and investing in residential properties can give investors a substantial financial boost. Also check out the history of capital growth rate in the area in last at least 15 years. Make sure that property investment is worth the capital benefit. You must also consider the population growth rate of the locality. If you are planning to invest in property, you need to take advice from experts or you can conduct research on the internet, attend seminars, interact with social groups and then read as much as possible regarding this matter to clear up all your investment doubts. Though the whole scenario of investments is always changing, property investment is still a viable means to enhance your financial portfolio. Because, the more you know about market, the better you will become at finding good property investments.

Wealth Management is classified as an advanced type of financial planning that provides High net worth individuals and families with private banking, estate planning, asset management, legal resources, and investment management, with the goal of sustaining and growing long-term wealth. The main objectives of wealth management are providing families dealing with services in retail banking, legal resources, investment management, and taxation advice goals to sustain and grow long-term wealth. Wealth management often includes further diversifying investments by adding real estate, precious metals, business and other untraditional investments.

Products dealt with in wealth management include stock trading and stocks, investments linked with equity, derivatives and products relating to structured investment, foreign exchange, unit trusts and mutual funds, investments and management of property, etc. Alternative investments with respect to wealth management include art, wine, precious metals, etc. Due to its prime importance, it is advisable to take the help of wealth management company while running a big enterprise. Because a wealth management company helps in growing long-term wealth for achieving long-term profit as It analyzes your wealth management plans including investments, insurance plans etc, calculates the related risks and then it proposes a wealth plan. It may provide many services like portfolio management, investment management, portfolio rebalancing, trust and estate management, private management, tax advice and financing solutions etc.

A wealth management company sometimes also implements some useful financial tools like stocks and stock trading, structure savings products, structured investment products and derivatives, equity linked investments, property management and investment solutions, mutual funds and alternate investment options. These tools provide assistance in making your money grow and provide you long-term investment benefits. Thus, proper wealth management with the help of financial planning can make you gain very fruitful returns on your investments which will have increasing volume each time.

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10 Reasons Why The Evolving Information World Has Changed The Best Ways To Invest Money

2009-10-25T13:39:00.000-07:00

Defined within the realm of the statistical Bell Curve, the long tail would reside in the skinny tail at the borders. The long tail, in regards to goods and services, refers to the evolution away from mainstream offerings towards more niche products and services. With the internet drastically reducing the costs of establishing distribution channels, the ability of entrepreneurs to focus more on the longtail sector to fit their customized needs is gaining increasing appeal.

However, almost no one speaks of the longtail of investing. To me, longtail investment strategies are the strategies that do not heavily rely on fundamental or technical analysis, but exploit other strongly predictive factors to produce not only superior returns to traditional investment strategies but also investment opportunities with far better risk-reward paradigms than those produced by traditional investment strategies. Here are 10 reasons why the longtail of investing is the only way to build wealth.

(1)You will never achieve the level of wealth you desire by handing your money over to a large investment firm.

The vast majority of private investors hand their money to large institutions and allow them to invest their money for them. If this were truly the best way to achieve financial freedom, then almost every one you know would be ecstatic with their financial consultant. Think of how many people you know that absolutely rave about their financial consultant.

The fact that 90% of people you know do not rave about their financial consultant should tell you that niche investment strategies, or longtail investment strategies, are far superior. The ones that are happy with the large investment houses already were independently wealthy before they sought out their help. Think about how many people you know that have ever told you, "I wasn't wealthy before, but thanks to my investment firm, I am wealthy beyond my dreams now."

(2)Thanks to evolving information technology, there are many better and more highly predictive means of making investment decisions than just utilizing fundamental and technical analysis.

Though people have been really slow to grasp this, once they do, longtail investment strategies, like those invented by SmartKnowledgeU, will boom. There is no doubt that the level of top-notch financial, political and corporate information available to the average investor has increased by leaps and bounds within the past decade.

There is a virtual treasure map that was created by the flattening of the world over the past decade to selecting stocks that are poised to explode. However, because the largest, most powerful investment institutions in the world have kept the masses of investors fixated on traditional investment techniques such as value and fundamental analysis, the longtail of investment strategies is currently much further behind in its developmental phases than it should be.

The best analogy I can use when explaining why people have ignored the long tail of investment strategies is to compare it to the incredibly slow adoption of Internet Protocol Version 6 (Ipv6) by the United States. When China started preparing its country for Ipv6 a decade ago, the benefits in increased security and its added value properties in e-commerce were evident even back then. However, people in the U.S. were comfortable with the lesser Ipv4 so did not take any action until the progress and superior internet and business capabilities of China, Korea, Taiwan, and Hong Kong finally embarrassed the U.S. enough to move forward and catch up with Asia.

I see the same thing happening in the educational realm of investing. Everyone is comfortable with the traditional investment strategies that have been propagated for the last several decades so nobody sees a need to move forward even though much better strategies exist today. Just as with Ipv6, the world will eventually realize that the safest and best means of investing money reside in the longtail, and they will eventually adopt these strategies.

(3)With so much investor skepticism of corporate integrity sparked by past accounting scandals at Enron, WorldCom, General Motors and the like, and the current, ongoing backdating option scandals, investors will increasingly seek alternate means of making investment decisions other than crunching numbers that they feel are untrustworthy.

Furthermore, technical analysis often yields false positives as well. A chart will show indexes that appear bullish having just broken through a ceiling of resistance only to have the index turn back downward for a prolonged period of time, or a chart will appear bearish having just broken through a floor of resistance only to turn around and begin another bullish ascent.

In fact, you have seen some of these turnaround trends with some of the technical posts that I've placed on my blog in previous months. In fact, that is why I always state that I never rely solely on technical indicators to make my decisions. I rely only on technical indicators to confirm or dispel what my long tail investment strategies tell me. Of the three types of analysis, fundamental, technical and long tail, long tail investment strategies yield by far the least amount of false negatives and false positives. That's why I rely on them so heavily.

This sentiment will lead to an evolution of longtail investment strategies, and the discovery of more efficient and better predictive means of making investment decisions than even those that already exist. Even current longtail investment strategies, such as those utilized at SmartKnowledgeU are constantly evolving as access to reliable information increases every year. Making decisions as if you were a fly on the wall of boardrooms is no longer a fantasy. It is possible, thanks to the evolution of the information landscape.

(4)With the growth of blogs and pure information sites on the web, the stranglehold of global investment myths, including the Modern Portfolio Theory of diversification, will soon be exposed for what they are - cleverly disguised sales strategies posing as investment strategies.

Once people realize this, longtail investment strategies will gain wider acceptance, much like acupuncture and herbal medicine eventually gained credibility as healing regimens in the schools of Western medicine.

The new information age has stripped many accepted investment strategies such as diversification of much utility when attempting to build wealth. Furthermore, it has also rendered such beliefs as an inability to time the market and the efficient market model as mere myths. This has been proven time and time again by investment sites such as SmartKnowledgeU that have called for steep market corrections in certain global markets and in asset classes like gold with consistent accuracy.

(5)Wider acceptance of alternative, longtail investment strategies that far outperform those utilized by global investment firms will happen as word of successes via these strategies spread throughout the world via the internet.

The internet distribution channel can and will be used to change the mindset of investors.

(6)The Do-It-Yourselfers are Growing - With the success of books such as Stephen Covey's "The Eight Habit" that emphasize personal accountability to achieve excellence versus handing control over to someone else, cultural shifts will happen whereby people will seek to seize control over their own financial future versus just handing their money to a firm to manage.

As this cultural shift happens, multitudes of people will realize that they are shorting their returns significantly every single year by handing their money to global investment houses.

(7)The flattening of the world and accessibility to previously inaccessible investment information will undoubtedly yield an increasing amount of investment strategies that reside in the longtail.

People will realize the foolishness of believing in the one investment strategy thrust upon them by global investment houses for the past half of century as "the only viable and safe way to invest." If the younger generation takes an interest in investing, adding their creativity to the investment arena will result in explosive growth in the longtail of investment strategies. However, since the odds of this occurrence are quite low, a more gradual shift towards niche investment strategies is much more likely.

(8)The explosion of social networking sites like YouTube, MySpace, Friendster, Squidoo, Digg, and so forth, will amplify the viral marketing of longtail investment concepts.

Again, ignorance of longtail investment strategies causes fear and hesitancy to use them. Viral marketing of longtail investment concepts will increase millions of investors' comfort level with these different and unique concepts.

(9)People are ultimately interested in returns, no matter how much global investment firms try to separate themselves from their competitors with smoke and mirror service claims.

All the gratitude for luxury box suites at Los Angeles Lakers games, suites at the Four Seasons Hotel, conferences at world-class golf courses and resorts will quickly wither once people realize how much more money they are earning with longtail investment strategies.

(10)Again, because people will readily abandon all the perks they get as a preferred client at a large investment firm for far superior returns on their portfolios, longtail investing will eventually reach a critical mass.

Eventually the longtail of investing will migrate towards the center and become the mainstream methods of investing, though this may take several decades to occur.

J.S. Kim is the founder and managing director of SmartKnowledgeU, LLC. Please visit the SmartKnowledgeU website to learn the safest places to invest money and how to achieve financial freedom

Get Personal: Are Your Investments Working For You?

2009-10-23T17:42:00.000-07:00

Captain Jack Sparrow in the movie "Pirates of the Caribbean" has been forced ashore by a mutinous crew. We see him stranded on an island drinking rum with his lovely companion beside a fire. They are discussing his ship. "It's not just a keel, a hull, and a deck and sails. That's what a ship needs. But what a ship is, what the Black Pearl really is . . . is freedom."

As an idealistic young investor in the '80s I felt the same way about the investment of my retirement savings. Those investments represented financial freedom. With the passage of time life gets more complicated; deciphering financial statements and reviewing all the investment options available can leave us bewildered. We may have a sense the ship has run aground. We feel disconnected from the original meaning or purpose of our investments. We aren't sure if our money is working for us and if it is working in a way that matters to us. How can we get back to basics and recover our sense of direction? What does investing really mean to us personally?

When we invest in stocks or bonds we are essentially investing in business. Let us consider an example of investment in a small local business. A sausage maker is trying to raise half a million dollars to start his business. You may know the chef personally or know of his reputation. You've enjoyed his product and respect his passion for and commitment to making a wonderful sausage using the best organic ingredients. A number of people come together to invest in this business. They might lend to the business (becoming bond holders) or provide equity (becoming stockholders.) The investors provide the capital that allows the business to be born.

Think about the importance of these collective investments and the value they bring. Providing all the capital himself could be a huge personal risk for the sausage maker. So the risk is shared among the investors, none of whom assumes a risk that he or she cannot afford. In fact each investor may benefit financially while serving the needs of the community in a delicious way. The act of investing serves an important and critical function in our economy.

On a personal level, you the investor have put your hard-earned money into this project for a variety of reasons, some of which may be pride in being involved with such a high quality product, a belief that people will love the sausage and the expectation that you will receive a good return on your investment. You appreciate the man's commitment to sustainable practices. You believe in his ability to be a good manager and careful steward of the capital you have placed in his hands.

As with any investment there are risks, but you feel you can understand them. The business may fail after a few years or you might not get the return you had hoped for. You have invested with the sausage maker based on your priorities and values, some of which you share with him. You care about his success not only because you want a good return on your money but also because you love his products. Your life seems richer for having experienced them. The relationship between the business and you as an investor is very tangible and personal.

Investing for our retirement years now seems so far removed from this paradigm. How can investing in a 401k, an IRA or a mutual fund have that kind of meaning? Making choices here is not like investing with the sausage maker. You own stocks and mutual funds. Are the managers of these companies or funds people whom you know and trust? Do you have the same faith in them as you do in the sausage maker? Do you believe that they are making decisions that reflect your priorities and values?

Certainly we care about our investments and realize they are important. They may mean the difference between subsistence and being able to afford to do some of those things we've always dreamt about. However, this type of investing is not the same as putting our money with the local guy, whose success we are rooting for.

Investing can start to become more personal by checking in with yourself. Remind yourself why you are investing. What do your investments really mean to you? They may represent financial freedom. Perhaps they are your security or the potential to live your dreams. They may give your children the head start that you never had. Just as you would expect the sausage maker to be a careful steward of the investment you've entrusted to him, your first responsibility in investing is to yourself. Your investments are important assets in your life. By making investments more personal you will derive greater satisfaction from them and increase your chances of feeling successful in the process.

How do you create a sense of purpose and meaning in relation to your investments? The very act of investing demonstrates a belief in our country and in our way of life. Your capital is precious and important. How you invest it matters. Investing in promising medical research or a daycare center in a blighted urban area allows you to get a financial return on your money while reinforcing your belief in businesses you feel deserve support. Naturally, you need to balance these two objectives in order to protect and grow your nest egg. Examine each investment by asking, "Is this working for me, and in a way that supports my priorities and vision for the future?"

Investing can be as personal and meaningful as you choose to make it. You are the captain of your ship.

Jeff Stoffer CFA, CFP® is a principal at Stoffer Wealth Advisors, a financial planning and investment advisory firm in Marin County. His website is http://www.stofferwealthadvisors.com

How To Invest Successfully

2009-10-21T15:34:00.000-07:00

There are several different types of investments, and there are many factors in determining the success of your investment.Before you get there,remember that all success story began with researching the various available types of investments, determining your risk tolerance, and determining your investment style along with your financial goals.

Do Your Homework - If you were going to purchase a new car, you would do quite a bit of research before making a final decision and a purchase. You would never consider purchasing a car that you had not fully looked over and taken for a test drive. Investing works much the same way.You will of course learn as much about the investment as possible, and you would want to see how past investors have done as well. It's common sense!

As a potential investor, you should read anything you can get your hands on about investing but start with the beginning investment books and websites first. Otherwise, you will quickly find that you are lost.

Learn From The Experts - Learning about the stock market and investments takes a lot of time but it is time well spent. There are numerous books and websites on the topic, and you can even take college level courses on the topic which is what stockbrokers do.

Test Run - While the person who sold you your brand new car or ipod will provide you with a 30 day money back warranty, there is no such thing as money back warranty in stock investment.
Once the money's gone,its gone forever and that could be your life savings!

With access to the Internet, you can actually play the stock market with fake money to get a feel for how it works.Do a search with any search engine for "Stock Market Games" or "Stock Market Simulations." This is a great way to start learning about investing in the stock market.

Speak with a Financial Planner - Finally, speak with a financial planner. Tell them your goals, and ask them for their suggestions, this is what they do.A good financial planner can easily help you determine where to invest your funds, and help you set up a plan to reach all of your financial goals. Many will even teach you about investing along the way,make sure you pay attention to what they are telling you!

Different Types of Investments - Overall, there are three different kinds of investments. These include stocks, bonds, and cash. Sounds simple, right? Well, unfortunately, it gets very complicated from there. You see, each type of investment has numerous types of investments that fall under it.

There is quite a bit to learn about each different investment type. The stock market can be a big scary place for those who know little or nothing about investing. Fortunately, the amount of information that you need to learn has a direct relation to the type of investor that you are. There are also three types of investors: conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance: high risk and low risk.

1.Conservative Investors - Conservative investors often invest in cash. This means that they put their money in interest bearing savings accounts, money market accounts, mutual funds, US Treasury bills, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments.

2.Moderate Investors - Moderate investors often invest in cash and bonds, and may dabble in the stock market. Moderate investing may be low or moderate risks. Moderate investors often also invest in real estate, providing that it is low risk real estate.

3.Aggressive Investors - Aggressive investors commonly do most of their investing in the stock market, which is higher risk. They also tend to invest in business ventures as well as higher risk real estate. For instance, if an aggressive investor puts his or her money into an older apartment building, then invests more money renovating the property, they are running a risk. They expect to be able to rent the apartments out for more money than the apartments are currently worth or to sell the entire property for a profit on their initial investments. In some cases, this works out just fine, and in other cases, it doesn't. It's a risk.

Before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you. Understand the risks involved, and pay attention to past trends as well. History does indeed repeat itself, and investors know this first hand!

The Importance of Diversification - "Don't put all of your eggs in one basket." We have all probably heard of this advice and when it comes to investing, it is very true. Diversification is the key to successful investing. All successful investors build portfolios that are widely diversified, and you should too!

Diversifying your investments might include purchasing various stocks in many different industries. It may include purchasing bonds, investing in money market accounts, or even in some real property. The key is to invest in several different areas not just one.

Diversification May Bring Better Returns - Over time, research has shown that investors who have diversified portfolios usually see more consistent and stable returns on their investments than those who just invest in one thing. By investing in several different markets, you will actually be at less risk also.

For instance, if you have invested all of your money in one stock, and that stock takes a significant plunge, you will most likely find that you have lost all of your money. On the other hand, if you have invested in ten different stocks, and nine are doing well while one plunges, you are still in reasonably good shape.

Diversification Plans - A good diversification will usually include stocks, bonds, real property, and cash. It may take time to diversify your portfolio. Depending on how much you have to initially invest, you may have to start with one type of investment, and invest in other areas as time goes by.

Lower Your Risk - If you can divide your initial investment funds among various types of investments, you will find that you have a lower risk of losing your money, and over time, you will see better returns. Experts also suggest that you spread your investment money evenly among your investments. In other words, if you start with $100,000 to invest, invest $25,000 in stocks, $25,000 in real property, $25,000 in bonds, and put $25,000 in an interest bearing savings account.

Paul Hata is active in various social and community programs aimed at providing equal access to education,health and jobs to all.Paul has over 10 years experience in managing a multi-million dollar advertising company.Paul can be reached at - TradePlanets.com

Rules for Investing- How To Build a Portfolio of Safe, Secure Investments

2009-10-19T16:31:00.000-07:00

In order to invest wisely, you need to have a suitable investment plan that will ensure the appropriate amount of growth for you. Your investments will also need to be safe and easy to manage.

Developing an Investment Plan:

The first step in developing an investment plan is to identify what type of an investor you are. Investor types are often determined by their stages in life. Here is a guide:

- Single person under 40 years old. Focus: Long-term investments, medium to high risk. Emphasis: capital gain, compound growth.

- Two-income married couple, no children, aged 20 to 40 years. Focus: Long-term investments, medium to high risk. Emphasis: capital gain, compound growth.

- One-income family, young children, aged 20 to 40 years. Focus: Long-term investments, low to medium risk. Emphasis: compound growth.

- Single person, aged 40 to 60 years. Focus: Medium-term investments, medium risk. Emphasis: capital gain, compound growth.

- Married couple with adolescent or independent children, aged 40 to 60 years. Focus: Medium-term investments, medium risk. Emphasis: capital gain, compound growth.

- All investors, aged 60 and over. Focus: Short to medium-term investments, low risk. Emphasis: Income.
The following are examples of investment portfolio mixes for the various types of investors.

Low Risk Investments:

Low risk investments are predominately cash, fixed interest and superannuation. This has the lowest risk of all investments but has also the lowest return - in today's market, approximately 3% to 6% per annum. Fixed interest includes cash, cash management trusts and bonds. They return approximately 5% to 10% per annum, sometimes as high as 15% if you invest in global bonds in good markets.

Superannuation returns and risk profiles vary from institution to institution, however the best and safest usually return on average 10% per annum.

Medium Risk Investments:

Medium risk investments include property and non-speculative shares. Diversified funds, which invest in a range of asset groups, are also considered to have medium risk profiles. Average returns from these types of investments will range from 8% to 15% per annum.
I also like to include the broad spectrum of mutual funds, to be discussed later, in the range of medium risk investments. Some can return up to 25% and more depending on the fund type and managers.

High Risk Investments:

High risk investments include all speculative shares, futures and any other type of investment that is purely speculative by nature. Because with these types of investments we are betting on whether the price will go up, or sometimes down, I often classify this as a form of gambling. Accordingly, the returns are unlimited but so is the ability to lose the total money invested.

The basic rule for investing in highly speculative stock is to build in 'sell-out' thresholds, three up and three down. For example, if you buy a stock at $20.00 per share, your sell-out thresholds might be:

Sell out threshold 3 $30.00

Sell out threshold 2 $25.00

Sell out threshold 1 $22.50

Buy $20.00

Sell out threshold 1 $17.50

Sell-out threshold 2 $15.00

Sell-out threshold 3 $10.00

Each time your stock reaches one of the threshold levels, you sell a third of your stock.

If the stock starts to rise, you sell a third at $22.50 and then another third at $25.00 and so forth. If the stock starts to fall, you also sell a third at $17.50, then another third at $15.00 and the final third at $10.00. In this way, you will never lose all your money, however you have also put a cap on the total profit you will make on the investment. This I have found to be the best and safest method for investing in speculative shares. In 1987, my husband and I were saved from the severe losses of the Wall Street crash because we were well and truly out of the market by taking our profits beforehand. Like all systems, this strategy will only work as long as you obey the rules and do not get too greedy.

Mutual Funds:

Mutual Funds are a selection of investments that are professionally managed by a financial institution or organization. These institutions have a wide range of specialists, researchers and advisor's who devote their time to ensuring that the fund invests in the best companies and assets.

As well as the advantage of having experts manage your investments, managed funds also give you the ability to invest in a wide range of shares, property or fixed interest markets, either locally or internationally, for as small an outlay as $1,000. In the latter case, they also require a savings plan where you agree to deposit additional capital of a minimum $100.00 per month.

Because managed funds cover the whole spectrum of investment risk profiles, you can easily cover your preferred investment portfolio, as described above, by investing in several different funds.

Putting Together Your Investment Program:

After you have identified your investment type, you need to either seek a good financial advisor or devote your own time in researching investment options.

Shares have traditionally outperformed other asset groups over time. However, share markets can widely fluctuate in the short term, so any entry into the market should always be done with a long-term view of up to 10 years. Even the best managed share funds can fall if the stock market crashes or enters a severe downward cycle. As long as you ensure that you are with a reputable fund with good managers and are willing to ride the waves, your investment will do well in the long-term. If you are in the short-term, low risk category then your investments should be in the safer, more stable areas with lower returns.

Rules for Investing:

Investing may seem daunting for a lot of people. Maybe you have tried it once and failed, or maybe you are simply frightened of losing your money.

To avoid losing any capital, you simply need to be aware of the main pitfalls and always avoid them. The simple, reliable rules for investing are:

1. Have a plan. Always ensure that you or your financial advisor draws up an appropriate investment strategy for you that incorporates your risk profile, timeframes and financial goals. As foolish as it seems, many people plunge headfirst into investing without thoroughly working through these fundamental issues.

2. Don't put all your eggs in one basket. Obvious advice, but many people fail to follow it. Many people think that they are on the right financial track by paying off the mortgage on their family home and then buying another property for investment purposes. Think about it! You have put all of your financial eggs in one asset basket - property. What happens if the property market collapses? Despite common thinking that this is a safe way to invest, the outcome is very risky. You have invested all of your well-earned money into only one area.

3. Build in appropriate timeframes. There is an old saying, "When the tea lady starts to invest in the stock market, it's time to get out." What this means is, when the share market is so high that everyone starts to clamber on board, it has probably reached its peak. There are two ways of successful investment timing. The first is to always pick the low-end of the market to buy and the high-end of the market to sell. This is extremely hard to do. Even the best-informed experts have trouble. The second way is to choose good investments and stay with them over the long-term (say 10 years or more) and ride the waves of the market. For safe, easy investing, choose the second method. Do not buy into the top-end of the market and sell once it starts to fall. You will definitely lose money this way.

4. Avoid high-risk investments. These include risky business ventures, highly speculative stock, tax avoidance schemes or too-good-to-be-true propositions that promise unusually high returns.

5. Avoid borrowing for your investments. Although some financial advisors advocate 'gearing your investments', this can be fraught with danger. Gearing means to borrow. If borrowing for investments takes you over your 40% fixed costs margin, you will be cutting it too fine, particularly if you lose your current income level.

6. Stay with the traditional and known. The best and surest investments are fixed interest, property and shares. Although all asset classes will fluctuate over time.

Work out the optimum mix for your investment profile, have a safe plan to work with and you can't go wrong.

Ann Marosy is an accountant, consultant, and former university lecturer. She was formally a Financial Controller of a Fortune 500 Company, and Finalist of SA Executive Woman of the Year. Ann is the author of the 'The Money Program' book series. Visit: The Home of The Money Program

Hot Stocks to Invest in > Best Stocks to Buy for 2009 - Investing Tips

2009-10-17T21:23:00.000-07:00

The stock market should present you with a wide variety of NEW hot stocks in 2009. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That's why it's very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market, especially on uncertain times like these.

You don't necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

Momentum Stock Trading helps stock traders and investors take advantage of practical stock trading opportunities every day at http://www.MomentumStockTrading.com

Socially Responsible Investing 101: Invest in Social Good and Your Portfolio

2009-10-12T23:37:00.000-07:00

By understanding the performance of socially responsible stocks, individual socially responsible stock, the socially responsible investor can gain the profits of socially mindful investing, either through individually socially responsible investments, or by engaging with socially responsible investment funds and socially responsible funds. In addition, the article also confers the sustainable investing approach in investing with ethics, green investing, values investing, and socially responsible investments.

Although socially responsible investing has expanded dominance in the last numerous decades, countless socially responsible investors are still under the feeling that to invest in social good, they must decline certain levels of portfolio performance. However, with the confirmation escalating that socially responsible investment funds strictly match, if not surpass, their market counterparts, many socially responsible investors are capitalizing their earnings – and their involvement to social good.

Long-term vs. short-term corporate focus

Socially responsible investing (SRI) takes the long term vs. short term investment discussion to a socially alert investing level. In comparison to countless corporations who take advantage of natural assets and human labor for short-term profits, a socially responsible stock drives under long-term natural sustainability, lending itself well to green investing. For example, the oil magnates such as Exxon-Mobile and Chevron have experienced exponential expansion in the last numerous years. However, where will these corporations be in 10 or 20 years – when the oil rigs are pumped dry and clients have switched over to hydrogen-fuel cars? In stark contrast, green investing stress the long-term sustainability of corporate social responsibility on the environment, society, and monetary well-being.

Overarching SRI principles

The extensive investment ideology of socially responsible investing are conceptualized based upon unstable techniques of social investing analysis. The execution of social investing in Europe is usually diverse than in the United States, but the underlying essentials are based upon using a set of foundation values. Depending upon the socially responsible investments portfolio or socially responsible funds, the SRI analysis may be based on one or several of the following criteria:

1. Sustainability Practices : This socially conscious investing perspective analyzes whether a company’s business practices are sustainable in the long term. If the business operations negatively impact the environment, economy, communities, or human welfare, then it is not considered sustainable investing for long term profitability.

2. Corporate Governance : This socially responsible investing component analyzes the company’s policies on employee, community, investors, stakeholder, and environment relations. Social investment’s mutual authority analysis is a separate process from the company’s financial outlook.

3. Religious Beliefs : Considered the original father of socially conscious investing, religious beliefs have screened many portfolios. For example, a Catholic screened socially responsible investing portfolio may divest companies that produce contraceptives. Both Christian and Muslim screened socially liable funds are prevalent, imparting strong religious beliefs onto the social investing analysis of opportunities.

4. Public Policy : Geared for socially responsible stock portfolios that include international holdings, the public policy filter analyzes foreign governments’ actions, either on an individual country case-by-case basis, or based upon an international mandate, such as a ban by the UN or NATO.

Socially responsible investment funds’ performance

Beyond the desire to contribute to social good, socially responsible investors are seeking SRI investment performance. Values investing demonstrate that socially conscious investing can be done quite profitably. In fact, in some market conditions, socially responsible funds outperform their market counterparts.

The Domini 400 Social Index (DS 400), the socially responsible investing industry benchmark, has outperformed the S&P 500 since its inception in 1990. According to KLD Indexes, as of November 30, 2007, the DS 400 has enjoyed 11.75% annualized returns, leading ahead of the S&P 500’s 11.21%. The DS 400 screens its index for socially responsible stocks based upon environmental, governance, and social filters, and within its index, there are 250 S&P 500 represented companies, 100 companies not on the S&P 500, and another 50 socially responsible stocks that have demonstrated significant strength in social investing filters.

With the sustained long-term SRI investment returns in the socially responsible investment funds, such as the DS 400, socially conscious investing can match or outperform its market counterparts – dispelling the myth that a socially responsible investor must sacrifice performance for social consciousness.

The risk exposure of socially responsible stocks

However, when comparing SRI indexes against market benchmarks, the question begets: does the performance of socially responsible investment funds come at a higher portfolio risk than its market counterparts?

Considering the rigorous screens of socially responsible investing portfolios, the socially responsible stocks are naturally geared towards companies with smaller market caps. Theoretically, the lower market caps contribute to a higher volatility and beta for the overall socially conscious investing portfolio. For example, the Domini 400 has a weighted average market cap of 83% of the S&P 500.

Beta Coefficient: measurement of an investment’s volatility against the market

However, instead of reducing the overall beta, the socially responsible investments screens minimize the individualized corporate risk. By evaluating a socially responsible stock based upon its governance, sustainability and relationship with stakeholders, social screens reduce the economic risk of the individual corporate holding. For example, by not choosing to invest in tobacco, socially responsible investors shield their portfolios from the negative performance factors of lawsuits. Or, by selecting companies that have good relations with their employees, the negative financial reprimands of strikes are curtailed from the socially responsible investment portfolio.

Risk and volatility are not necessarily synonymous in the world of financial portfolios. Whereas beta may be a good indicator to evaluate the short-term probability that a negative event may occur, this does not specifically analyze the individualized corporate risks. Though socially conscious investing portfolios may have higher betas, the risk of the socially responsible stocks in the portfolios experiencing financial degradation is more limited than the market benchmarks.

Alpha: risk-adjusted measurement of an investment’s excess return over “risk-free” instruments

One of the most compelling factors of socially conscious investing is that despite its demonstrated increased returns, the risk does not necessarily increase. Social investing may be one of the few exceptions to the risk-to-reward ratio. In fact, the performance of the socially responsible funds may not be fully indicative of its true earnings, once the lowered individualized corporate risk is weighted. After adjusting for both short-term and long-term risk, social investing’s alpha may be stronger than the numbers indicate.

For more information visit our website http://www.sristocks.com
SRI Stocks is a website dedicated to social investing strategy and offers information,

Futures Trading - The Eight Key Steps You Need to Know to Get Started Trading the Futures Markets

2009-10-05T05:51:00.000-07:00

If you are attracted to the action and profit potential of futures trading, how should you get started? Here is a multi-step plan of attack that will get you off to a strong start:

1.) Learn the mechanics of the futures markets and futures trading. Everyone wants to skip this step!! You can begin separating yourself from the competition by taking this step seriously. I suggest buying a used study manual for the series three licensing exam (Futures broker exam) and working through it. If you are serious about making money it is a good idea to get the market mechanics down cold. What percent of new futures traders are this thorough? I would guess close to zero. The sooner you separate yourself from the pack, the better.

2.) Observation: This can begin at any time and should be ongoing. If you do not enjoy tracking market action and making observations, trading might not be the right opportunity for you! Start a market notebook and record your daily observations. If you think you see a pattern, write it down. (Step four will give you some ideas on what to be observing) An advanced form of observation that I recommend is to obtain backtesting software to test your observations. How to backtest a strategy so that the results will be useful is a huge topic in and of itself. Remember: There is no harm and much to gain from proceeding slowly as you build your knowledge (...Something very hard or impossible to do for most new traders, who are eager to jump into ring!) If you choose to backtest your ideas, the exact platform that will be right for you will depend on your level of technical sophistication and the type of ideas you are interested in testing.

3.) Education: One good route to getting started in your search for profitable ideas is through books, trade services, and perhaps some seminars. Don't spend a fortune though. Some books and perhaps a few well chosen courses is more than enough. You will have to use your common sense to determine which products and educators are most likely to have merit, and which ones will not. I will tell you this: Apply the same criteria to how you evaluate these products as you would any other product. Is the instruction clear and unambiguous? Is there a rationale for why the concepts work or might make money? Are the ideas clear enough so that you will be able to track them and validate them on your own? One tip here: The best strategies are usually fairly simple and easy to explain. Your strategy should include buy and sell rules, and the methods you will use to manage risk.

4.) Funding your venture: Spend some time deciding how much risk capital will be appropriate to commit to this new venture. It needs to be risk capital. In other words, it needs to be money you are willing to risk in order to achieve the possibility of greater gains.

5.) Choose your markets, then study up on them: This choice is tied in with how large an account you will be trading and the style of trading you will be doing. For example, a large and volatile contract is unlikely to be the right choice for a new futures trader with a smaller account size.
Futures contracts can seem foreign to us retail traders, and there is a good reason for this: Contract specifications are established to appeal to and be useful to "the big guys," or the commercial interests that find the products useful in the course of managing their business. Make sure to take the time to understand the products you will be trading. I recommend purchasing a CRB yearbook to learn more details about the markets you will be focusing on. Commodity Research Bureau (CRB) is a good source of basic information on commodity markets. Lastly, make sure to study up on the events, seasons, and reports that are likely to effect your markets. This is all just part of building a context of knowledge that will be useful when you are a trader. I believe it is good to know these things even if you are a purely a technical trader.

6.) Choosing a broker: Shop around and find a brokerage that offers the level of service you need, has quality platforms, and a good reputation. If you can, sign up for a few demo accounts and try them out.

7.) Paper trading to trading one lot (one contract): Spend as long as it takes practicing with the platform you will be using to make sure you have the interface and its features down cold.

8.) When you have a clear idea of your strategy, the resources you will be using to make your decisions, and are familiar with your brokerage system, you are ready to begin trading when YOU think you are ready.

Know this: Successful trading is the domain of those who are hungry for success. It does not happen in a half-hazard fashion. I hear many traders talk of planning to "paying a tuition to the market" while learning to trade. Personally, I don't buy this notion one bit. If you are doing this to win, then play to win or step aside until you are in a position to win. Now, you may start with setbacks, or a losing period. Fair enough. Overcoming and rising up from a loss is just part of trading! The sooner you learn this, the better. Tenacity is what separates people who "have good ideas" from those who "have good ideas and can make money trading." Always, always play to win. Focus on what you are after and what you want, and execute your strategies with alacrity.

NATHAN STEWART

I am an active futures trader and investor residing in Chicago, IL.

Please visit my Blog at: http://tacticalfuturestrading.blogspot.com/.

The Buffalo Gold Coins

2009-10-04T04:11:00.000-07:00

Buffalo Gold Coins were minted for the first time in June 2006 after Congress authorized them in 2005. Both the bullion and proof Buffalo Gold coins are the first coins the United States government has minted using 24-karat gold. The gold that is used in these coins comes only from mining sources in the United States. Coin collectors were given this nice alternative to the Maple Leaf or Vienna Philharmonic gold coin. Although many collectors love the look and value of the American Eagle gold coin, it is only 22k gold as opposed to the 24k used in the Buffalo gold coin. The Buffalo coins are a reeded edge $50 coin that are made with 1 troy ounce of 24k gold and have a weight of 31.08 grams, are 0.116 inches thick with a diameter of 1.287 inches.

Design of the Buffalo Gold Coin

The design of the Buffalo Gold coin came from the talent and inspiration put forth by James Earle Fraser when he designed the Indian Head Nickel. The Indian Head Nickel is also referred to as the buffalo nickel because of the large buffalo that's on the reverse side of the coin. The design of this coin has been well-known and loved and is the most popular design to ever be designed on a coin. The front of the Buffalo gold coin has a profile of a Native American facing right with a headdress on and the words LIBERTY to the upper right of his face. Legend has it that Fraser had three different Native Americans posing for the design and he got ideas from each of them.

The reverse of the coin has a buffalo standing on a mound of dirt. It's believed that the buffalo, Black Diamond, was a member of the Zoological Garden in New York. The words UNITED STATES OF AMERICA are on the top of the coin with E PLURIBUS UNUM right below the word "AMERICA". Right below the buffalo's mouth can be seen the words IN GOD WE TRUST. The bottom of the fifty dollar buffalo piece has 1 OZ. .9999 FIND GOLD inscribed with $50 centered right above it. The design originally created by Fraser was later changed by Charles Barber and called type 2 buffalo nickel. This change has the buffalo standing on a level ground instead of on a mound of dirt. Although this change was made on the nickel, all the buffalo gold coins have kept with the type I design.

Different Editions and Mintage of the Buffalo Gold Coin

The Buffalo Gold Coins consist of two different editions: a bullion and a proof edition. Both of the coins were minted at West Point but the proof edition has a more detailed and lightly frosted image that almost seems to 'float'. This proof was designed to be a collector's coin rather than for distribution and use. Because the proof has to be struck many times and put in a special die manually, it sells as a much higher price than the bullion edition. The bullion version of the Buffalo gold coin is used for investment purposes and, although available from coin dealers, has a price that changes along with the price of gold.

How to Melt Scrap Gold

2009-10-03T06:09:00.000-07:00

Gold is one of the world's precious metals. It is used in numerous countries as currency - which is why some still covet. In various places it is melted and turned into gold ingots - also recognized as gold bars - which can be traded and bought for a definite price.

There are numerous individuals who are able to make their own gold ingots using spare gold jewelry and some other items that they may have. There are two types of gold ingots; minted and cast. Cast is the procedure that most individuals will utilize when attempting to melt down scrap into bars.

To begin with you need to collect all of the spare gold items that you own and put them in a pot. You have to remove any other precious stones like diamonds before you are able to do anything else. Once you have completed this you will be able to place the pot within a furnace. Ensure that you are utilizing the required safety gear and equipment when doing this.

Be patient and wait for the gold to become liquid and then pour it within a bar mold. Wait for the bar to cool down entirely. This can be done by letting it sit by itself and allowing the fresh air to cool it off. Or you will have the ability to speed up the procedure by placing it inside of a bucket of water.

When it is done cooling down you will be able to place the bar on top of a table and clean it off with a soft towel. Be careful during this process because the bar will not be solid yet. Before it has become solid you need to stamp it with the amount it weighs and the date you produced the gold ingot. This will give you the chance to sell or trade it.

Many people will Produce Gold Ingots so that they can buy and sell them. Investing In Gold can be difficult without the right help.

What is a Good Gold Investment?

2009-10-02T07:29:00.000-07:00

According to a recent report from Trinity College's economics department, investors that have a small percentage of their overall portfolio dedicated to gold and other precious metals are weathering the economic gut shot much better than their other investments have taken over the last 5 years. In a nutshell Trinity's report basically confirmed what speculators have been assuming for several years. Gold is great insurance against a volatile market. One of the biggest reasons for this is that gold prices skyrocketed after the "crash" of the other public trading markets due to increased demand, more gold being taken out of circulating and increased competition from eastern countries and independent, large scale brokers.

The research also showed that from 2003 until just recently, the stock market has been tanking in nearly every industry because of the correlating problems with the US economy. The gold trade however has been revitalized by speculative dollar value decreases and other serious investment competition from countries like China and Korea . When the stock market stated to show signs of taking, savvy gold trade investors switched a good chunk of their investments into precious metals and were able to doge the bullet so to speak that killed a lot of investors portfolios. The main reason for this is that investors bought gold as a hedge investment against the falling value of the American dollar while other investors faced the repercussions of trading aggressively while staying blind to the failing market indicators.

Gold bullion on its own shouldn't be relied on as a static investment or for any substantial amount of your portfolio. The market is just too volatile on a day to day basis and there are other, more conservative and relatively safer ways to invest your money for larger scale ventures. Gold should only be used instead as an insurance policy against other volatile markets and investments.

Learn more about investing in gold and take control of your assets right away! We offer guidance on gold trade basics in simple terms so that everybody can invest for success during this recession. Take action today, and invest in and trade gold bullion!

Future Oil Trading is Much Easier and Profitable Than Stocks Or Forex

2009-10-01T03:02:00.000-07:00

If you truly want an exciting, easy and profitable market to trade, then future oil trading is your answer. Oil is the most traded commodity in the world today. And like Forex, it trades almost around the clock. You can trade oil on the NYMEX or through a lot of forex brokers as a CFD (contract for difference).

Future oil trading is easy and profitable because it is so active and trends well. You can trade oil from anywhere in the world and you can make a lot of money trading it because of the large price moves.

But if you want to make a lot of money trading oil instead of having to learn the ropes on your own, it would be a good idea to use a ready-made oil trading system. Wouldn't it be great to have a future oil system that is already proven to be profitable? The oil system that I use myself is the Oil Trading Business. It was developed by an actual trader that uses it to make a very comfortable living on an island in the Mediterranean. The system includes a strategy that uses custom indicators on the Metatrader 4 platform. In fact, a trading robot or expert advisor (EA) has just been developed to do the trading for you. Talk about easy!!

The Oil Trading Business is very affordable and even comes with a no-questions asked eight week money back guarantee. In fact, the great guarantee was one of the reasons that I went ahead and bought the system myself.

To find out more about how to fight the economic downturn and start your own oil business go to http://futureoiltrading.blogspot.com

Learn to trade oil from any where in the world with Oil Trading Business.

Trading the Emini VS Trading Penny Stocks

2009-09-30T08:37:00.000-07:00

Author's warning: This is a controversial topic

I am a fairly opinionated person and thus far on this EzineArticles site I have intentionally strayed away from controversial topics and written some fairly vanilla "how to" articles on investing topics. But I just read an article that made my blood boil: the article concerned Penny Stocks.

As a 25 year veteran of trading on both Wall Street and the CME there are very few areas of investing that are infested with more vice, scammers and downright cheating than the penny stock market.

I know, that is a very bold statement to make....but I will back up my statement with hard facts and experience, and not all Penny Stocks are scams...but the vast majority of Penny Stocks are simply fronts for companies that may/or may not exist.

Here is how the life of a Penny Stock transpires. As you may have noticed, most penny stocks are promoted through newsletters and advertising. There is a very good reason for this, as the penny stock companies usually promise the newsletter advertisers a block of stock in exchange for getting the stock price to rise. The newsletter usually touts the "potential" for the stock to rise based upon certain factors occurring and usually elaborates on the unbelievable potential the stock has should these "certain" factors occur.

I usually recommend that potential investors in penny stocks contact the stock itself and ask about capitalization and and revenues. Without exception, these stocks usually are severely undercapitalized and have to revenue to speak of. More often than not, an investor questioning the company will be sent to an answering machine or the newsletter promoting the penny stock. The SEC has estimated that the majority of penny stocks fall into the "pump and dump" category. And with good reason.

A normal stock, traded on an exchange, usually has a firm designated as a market maker in that stock, along with a floor specialist who facilitates the trading of that stock. This system allows transparency in the trading of any stock and allows an investor to see the exact and verifiable volume and price movement of the security.

This transparent system is absent in the Penny Stock market, and the penny stock issues are usually without a true market maker. All to often, the market maker in a penny stock scheme is the very company itself. The fox is in the hen house, so to speak. What this means is that the Penny Stock company is setting both the bid and ask prices on its own stock. Further, most Penny stocks are traded on the 'Pink Sheets" which puts it into the category of trading in the wild west.

Many experts have estimated that 9 out 10 Penny Stocks fail within the first year of their offering. I have heard numbers as low as 7 out of 10 bandied about, but the point is simple. When you are trading Penny Stocks you are playing in a non-transparent, non-exchanged oriented market, and this is the recipe for disaster. It is usually just a matter of time.

For the record, I am not saying that all penny stocks are bad or dangerous, just the majority of them, and odds do not favor long term success. Heed my warning and prosper, there are simply too many exchange traded stocks that will earn you ample money than risking sums of your hard earned money in the Penny Stock Market.

I write mainly about financial topics, specifically daytrading the emini contract, and many of my more technical techniques can be found at my blog, The Fractal Futures Trader

I also write an ongoing commentary, which is a bit more opinionated, at The Fractal Traders Commentary

I encourage all to read the blogs and learn how to trade, as you can add $500-1000 dollars a day to your pocket book. Best of trading to all.

Guide to Become an Online Day Trader

2009-09-29T21:36:00.000-07:00

Online trading can become a serious prospect of making money. However, it is not for everyone and hence, you have to be fully prepared to deal in online trading otherwise you can suffer from huge losses. Online trading is also called day trading, hyperactive trading or sophisticated trading.

The first step in becoming an online trader is to have discipline. You should be optimistic and you should have the ability to make sound decisions. Remember that it is your money online and you should make maximum use of the resources and tools that you have. You should also remember that in online trading, the rewards can be substantial but so can be the losses. A serious trader should have all the specialized tools at his disposal through which he can make rational and sound investment decisions. He should also seek advice from experts if he is stuck somewhere. Your ability to make trades at a spilt of a second counts as this can help you gain thousands of dollars. Making the right moves at the right time is the name of the game.

Also, see to it that you are using the right kind of software and have a good internet connection that does not have any problems. In fact, many online traders have their own customized automated trading platforms while others use NASDAQ workstations. A successful trader also should have the ability to select orders and where they should be routed. If you are using software like Javatrader, you should also have access to instant support such as technical support for getting quick and accurate answers.

About Author:
Pauline Go is an online leading expert in traveling industry. She also offers top quality articles like :
Spouse And IRA Contribute, Tax on Roth IRA

Best Day Trading Advice

2009-09-26T23:56:00.000-07:00

Truth be told. Anybody can be a day trader, but not everybody can be a successful day trader. Just like everything in life, to be successful you have to put in the time to learn the process, encounter problems, find ways to solve them and hone the skills you have developed so that the task becomes second nature to you. Any type of activity in which to learn it, you have to risk real money, not monopoly money, it is in your best interest to do all you need to, to practice and learn without risking any funds.

As you making live trades, learning and making mistakes so is your stack of money going down. If you are lucky, by the time the money is gone you would have learned one or two things. But, it's a vicious cycle; you are out of money to horn the skills you have developed, so you have to start all over. You start to save money, by the time you have enough money to get back and start trading and learning from where you left off, you have forgotten the skills you have already acquired and the cycle repeats itself again.

However, there is a solution to this. It still will involve you doing some work; there are no easy roads to success. You will still have to learn the process of trading, all the terms, how to place trades, how to study market trends and use them to your advantage.

Basically it is the real deal, but you are not playing with your own money. This system will allow you to make mistakes, develop a strategy, learn from your mistakes, learn how to control your emotions, study stock trends to at least understand the effects on the price of shares in the market and be able to make a calculated guesses on which way the price of the stock you are monitoring might go.

There are certain rules you must follow to be a successful trader and they include:-

- Learning the process first before participating
- knowing when to quit
- Not borrowing money to trade with. It sucks when you lose money and it's really a pain when you have to pay it back
- Never risk it all to make up for earlier losses
- Do not act on wims and gut feelings
- Have a strategy and stick to it no matter what the market is doing

Becoming good in any activity golf, swimming, basketball, surgery, stock trading, being a ladies man too, involves practice practice practice. You will be amazed at how much time professional athletes at the top of their game practice daily to be able to remain where they are. That should give you an idea of how much work you need to put in to safe guard your money first and then make a profit and a living out of day trading. Practice makes perfect.

To learn more on how to horn your skills in day trading for FREE without risking your money and preparing yourself for huge profits visit us at http://www.daytradingspy.com/daytradingsimulator.html

3 Steps to Online Trading

2009-09-25T06:41:00.000-07:00

The first step you should take to make your way to online trading simply knows which market and which commodity you want to be trading in and this is all down to how much research you are willing to do. The key to success is knowledge and this is more so true for trading. When you are playing with the prospects and the future of a commodity and its price, you should know what kind of market you are getting yourself into. If your market is one that tends to stagnate and the price has very little vibrations over the financial year, then you know you are becoming more investor than trader.

These sorts of goods survive quite well in any economic situation and have a trading portfolio which has zero or very little risk involved. This is where traders and companies with large amounts of money will be happy to trade in, because if they buy a few hundred million dollars worth of this good and the price goes up by a few cents in a single year, they would earn quite a bit. So this is the typical method that can be used to make money with online trading. The dependencies of this formula are you, your access to capital, and just what kind of trades you are interested in. The second step to online trading is to get a broker or a dealer that will act as your middleman to the market.

This is quite critical for you to find the right kind of broker that you can both trust as your passageway to the market as well as with your money. Always interview the guy first and make sure you check against his background and his or her trading achievements. But also remember that you will always get what you pay for, just as you would when you are in the hospital. If you fork out money for a consultant, that is what you get. If you pay money for a senior consultant, that is also what you are going to get. Nothing more, nothing less. Everything else is up to you to consider and re evaluate.

The last step that you should be taking is to make sure that the three elements of successful trading are at your disposal, and they include the elements of time, equipment and passion. You need time to trade, so if you are working 6 jobs and taking care of a household, then forget it. You need the right combination of computing and telephony power, so make sure you have these as well. You must also have the passion to trade, and this is the most important part of it. There is no use trading if your frown gets bigger and bigger on a daily basis and all you perceive of trading is something that is tedious and not worth the risk. In the end of the day, these are the things that will get you to where you want to go, and online trading will be your key to fortunes.

Click Here to grab your FREE "Forex Millions - Insider Secrets To Amassing A Fortune With Forex" Report. Check out the latest and best performing reviews on forex products here today.

3 Common Trading Mistakes

2009-09-24T19:21:00.000-07:00

There are a number of common trading mistakes that new investors make. Learning these mistakes and avoiding them can help save you from taking unimaginable losses.

The three common trading mistakes that new traders will make are.

1. Exiting too early

Targets are great, they give you an idea on how much you think you will make if you are right. But sometimes no target is the best target. Exiting too early can make you miss the big profit. You might make a small 10% gain, which is always nice.

But that doesn't mean the stock will not go up another 50%. I prefer the idea of trading with the trend, and exiting out early is a way of anticipating that the position has topped before it gives you any conclusive signs.

2. Switching Strategies

I have been guilty of this before. You buy something with a game plan, but suddenly that game plan doesn't work. Instead of carrying out your trade like you intended it is easy to completely change your plan.

Every time I justified changing my original plan when I was in a trade it turned out against me.

3. Not learning from the past

Perhaps the most important thing you can do is to learn from your mistakes. We are all human, we all do stupid things. But unless we can learn from our mistakes we are destined to just keep repeating them, over and over and over again.

Traders are like scientist, constantly trying to figure out the world they observe.

For more on learning trading visit http://www.stocks-simplified.com

For more stock tips visit http://www.stocks-simplified.com/stock_tips.html

Article Source: http://EzineArticles.com/?expert=Shaun_Rosenberg

5 Day Trading Tips for Success

2009-09-23T14:36:00.000-07:00

1. How to Treat Gap Openings

A gap up or gap down open is an emotional move, and it often will reverse course and turn in to "trap open". Gaps that are less than 4 points on the SP Future tend to get filled in the same day, especially Tuesday through Thursday. Turns will occur within 20 to 40 minutes after the open. A trader must be on the lookout for a reversal as soon as early momentum is lost.

A gap into a good support /resistance zone is almost always a good "fade" - with stops no more than 1 point on other side of the support /resistance zone.

(A "fade" is simply entering a position opposite of the direction of the gap. If the market gapped down, a "fade" would be entering
a long position (buying) in to the selloff.)

2. When the Market Moves Against You, When Do You Exit a Trade?

The way I trade, I exit as quickly as possible. There's no sense in waiting around for your "stop-loss" to get triggered when the perceived edge is gone. I like to stay in control of my trades, and if the market doesn’t do as anticipated, I don't wait for my stop to get hit.

When there is no longer a high probability situation, exit and take a second look.

3. When Are The Best Times of the Day to be Trading?

For me, the best times of the day for trading are the first hour and the last 2 hours.

Here's an old rule of thumb (and this used to work like clockwork in the "old days", and although it has diminished a bit, it still
happens):

"The Minor Time of Day"-
If the Market opens higher, then there tends to be a pullback within the first 20 to 40 minutes. If the pullback is weak, there will probably be a continuation of rally into the early afternoon. But, if the pullback is sharp, then
you've likely seen the high for the day and you'll want to be selling the bounces.

"Major Time of Day"-
Around the 2:20pm to 2:40pm time frame, we'll often see moves reverse or gather steam in that timeframe.
People that have been holding positions all day long become a bit "antsy" - they have to do something with them before the Market
closes for the day. When people holding losing positions into late into the day see the time until the close is near, that can
cause the market to make some sharp turns in the last 90 minutes. The program gang also likes to get active that time of day.

4. How Can Anyone Trade a Choppy Market?

I take a number of scalps in choppy markets. I time entries with Tick extremes, especially when price pops into previous high
areas of congestion, or other intraday support and resistance. Moving averages are not good during choppy days.(Scalps : small profit, "hit and run" type of trades)

5. How Do You Measure Pullbacks

In a trend move, I like to see shallow pullbacks to a steeply sloped moving average on one of the 3 time frames I follow. (more time frames, the better) Pullbacks to symmetry in a persistent trend are useful when present.

Example: Rally, dip 2.00 points – Another run up, then a dip of 2.25 points – A another push higher, then a dip 1.75 points. Note
continued dips of 1.75-2.25 points repeatedly hold. A pattern has developed, and you want to be buying those shallow pullbacks. This works great used in conjunction with a steep slope of the 20 ema on the 5 minutes charts, or slightly bigger picture, the 60 ema on the 5 minute chart.

Mike Reed author of TradeStalker's RBI Trader's Updates. Mike has been trading the Market for 23 years. When he got his start as a trader, Mike was plotting prices on paper tape as the internet had not yet been "born" as we know it today. Years of experience have really given him a feel for the Market action. Mike's support and resistance numbers have been published on the internet since 1996. He has a wide readership that includes day traders, floor traders, locals and hedge fund managers. Mike's nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com

Using Stock Market Tips to Your Advantage

2009-09-22T04:47:00.000-07:00

The advantage to using stock market tips is you will always have an advantage. Using data that has been gathered from previous month, you will be able make decisions based on fact and not on gut instinct. Also right now stock trading is very risky. People want to be 100% they will be getting a return on their investments.

Gathering data in the marketplace is becoming more of a trend rather than buying stocks based on gut instincts. The stock market has come to a place where it's tough to get a gain and people need to start turning to data to buy stocks. Stock market software has started to automate day trading to turn the tides.

Home based businesses are on the rise due to the large amount of layoffs in the previous months. The stock market is a place where people can invest any amount of money. From the smallest of amount to the largest amounts, but the goal is essentially the same. To make a gain over the amount you invested.

Individuals and home based businesses needed a way to grab data based on any market condition to make educated decisions for their portfolio. People are increasingly using stock market software to retrieve quality stock market tips on stocks they normally wouldn't find. The quality of the programs out there vary so you definitely need to find a quality vendor. There are a lot of people out there trying to make a quick buck. Take your time and investigate. In the end you will earn greater returns than ever before.

About the Author
Go to stock market tips to read more

Investing Mistakes to Avoid - Beginner's Primer

2009-09-21T18:46:00.000-07:00

Investing in the stock market can be a scary proposition for most beginners. Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor. For instance, the biggest investing mistake that you could ever make is to not invest at all, or to put off investing until later.
If you want to get rich, you must learn how to make your money work for you instead of working for money. So get started making your money work for you â€" even if all you can spare is $20 a week to invest!

While not investing at all or putting off investing until later are big mistakes, investing before you are in the financial position to do so is another big mistake. Get your current financial situation in order first, and then start investing.

Get your credit cleaned up, pay off high interest loans and credit cards, and put at least three months of living expenses in savings. Once this is done, you are ready to start letting your money work for you. If nothing else, consolidate high interest credit cards for one with lower interest rates.

If possible, you should also refinance high interest loans with loans that are lower interest. You may have to use some of your investment funds to take care of these matters, but in the long run, you will see that this is the wisest course of action. While you are in the process of clearing up your present financial situation, make it a point to educate yourself about the various types of investments.

This way, when you are in a financially sound situation, you will be armed with the knowledge that you need to make winning investments in your future.

Donâ€™t invest to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it! Too often, people invest money with dreams of becoming rich overnight. This is possible â€" but it is also rare. It is usually a very bad idea to start investing with hopes of becoming rich overnight. Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. It is safer to invest your money in such a way that it will grow slowly over time.

However, if your investment goal is to get rich quick, you should learn as much about high-yield, high-risk, short term investing as you possibly can before you invest. Only invest for the short term when you know you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.

Another mistake to avoid is putting all of your money into one stock or security. Diversify your investment portfolio for the best returns and donâ€™t move your money around too often. Let it ride. Perform due diligence and pick your investments carefully, invest your money, and allow it to grow â€" donâ€™t panic if a stock's value drops a few points. If the stock is a stable security, it will correct itself and go back up.

Remember that successful investing requires more than simply calling your broker and telling them that you want to buy or sell stocks or bonds, or letting stock picking software make your investment decisions for you. It takes a certain amount of research and knowledge about the market and the company you invest in if you hope to invest successfully.

About the Author
Michael Budd is webmaster and chief financial officer for Stock Market Bot. Articles, tips, free ebooks and free software for investing can be found at http://www.stockmarketbot.com

How to Make Money with Real Estate Investing

2009-09-20T12:42:00.000-07:00

Real estate is an area where you can make enough money to last you a lifetime -- or lose as much, if you are not careful.
The recent collapse of the real estate market has been a big surprise to people riding the high wave of skyrocketing prices and unceasing demand. Due to the mismatch between the buying frenzy and timely repayments, prices have crashed and many houses are left owner-less with banks evicting homeowners resulting in high number of foreclosures.

If you are interested in buying real estate as an investment, this is your best opportunity. It's a buyer's market and your chances of landing an amazing deal at affordable rates are very high.

Private real estate investors, who earn high profits by investing in properties, know the market is continually changing. This one factor is what motivates them to always stay ahead of the information curve. While the pessimists are concentrating only on the down side of the market, these investors search for and find new opportunities and foreclosed properties is just one of these.

There are always certain niche markets which do not fall within the realm of traditional demographics. In other words a niche real estate market is driven by unusual circumstances. The informed investor searches for areas which might be experiencing unusual growth caused by economic or political changes. Demand for housing in an area might be high but not nationally recognized. This can hold true in small towns or certain subdivisions within a larger city.

After one and half years of declining housing sales, the trend is changing and sales are bottoming in most regions. The latest US Housing Numbers reported that the rate of declining home sales is decreasing at a lower rate and is on a path of actual overall growth by year's end. At this time foreclosed properties become an investment opportunity.

Before deciding to jump in, it would be wise to do some investigation in real estate investing so you are sure that you know what you are doing and why.

If you decide to get involved with real estate investing, you will very soon discover that there is an unending quantity and variety of investing opportunities. Along with that, there can be a queue of people offering you some "amazing" investment choices that will provide you with a very high return on investment.

Real Estate is one of the safest investments to take on. The reason is because although the market goes through its ups and downs the fact that your money is in bricks and mortar means that you can never lose your entire capital and if you do your homework, you can flip the property for a fast killing.

If you are looking to build a strong financial future, you would probably need all the tips, strategies, secrets and techniques that apply to current market conditions and that will allow you to finally live the life you've always dreamed of...

About the Author
Alex Gates is an active real estate investor, mentor and trainer focusing on developing innovative real estate investing strategies that apply to current market conditions.

Visit http://www.RealEstate4Profit.net/ or click on the link to receive a FREE Report that reveals How to Make Money with Real Estate Investing! http://www.realestate4profit.net/freereport.html

Why Investors like Singapore, is it because of GIP (Singapore Investor Programme)

2009-09-19T22:38:00.000-07:00

Singapore is evolving into an entrepreneurs Mecca, proximately located to the emerging Asia, ever expanding free trade area, converging ASEAN, efficient infrastructure are not the only reasons but the governmental policies that favor the entrepreneurs and investors alike. Global Investors Programme administered by the Singapore Economic Development Board (SEDB) is one such one which attempts to ease the entry and of relocation investors, to enable them to setup and develop their business. After its launch this programme has attracted thousands of investors into Singapore.
The success of the Global Investor Programme can be attributed to great teamwork. What started out as an internal EDB objective to review its entrepreneurship programme, became an interagency collaborative effort to develop a holistic programme that caters to global investors in terms of our entry policy for foreigners interested in doing business here. The GIP eases the way for foreign investors, entrepreneurs and business executives to set up and conduct businesses in Singapore. EDB will provide assistance in linking up foreign entrepreneurs and investors with local business networks, thus opening up more opportunities for business collaborations. This Programme comprises of four key schemes offering a range of immigration options for the investors, entrepreneurs, and business executives.

1. Permanent Residence for Investors 2. Multiple Journey visa 3. Social Visit Pass for Entrepreneurs 4. Entrepass

Permanent Residence for Investors: Under this scheme investors can seek permanent Residence status in Singapore and will be qualified if he/ she

* Invest at least S$1 million in a new business startup or expansion of an existing business operation or * Invest at least S$1.5 million in a new business startup, expansion of an existing operation, approved Singapore-incorporated venture capital fund or Singapore-incorporated foundation or trust that focuses on economic development or * Invest at least S$2 million in a new business startup, expansion of an existing operation, approved Singapore-incorporated venture capital fund or Singapore-incorporated foundation or trust that focuses on economic development. Residential property can be purchased with not more than 50% of the investment amount.

Other investment vehicles such as venture capital funds, foundations or trusts, and/or private residential properties will be considered for application for Permanent Resident applications. Up to 50% of the investment can be in private residential properties, subject to foreign ownership restrictions under the Residential Property Act (RPA).

Multiple Journey visa facilitates the frequent entry of business executives from visa-requiring countries into Singapore. Multiple visits, each lasting up to 30 days, are allowed during the validity period of the visa which may be for 1,2 or 5 year depending on the prevailing ICA's guidelines. The application has to be submitted along with a Letter of Introduction from a Singapore Registered company. This eliminates the Visa application for each visit. This will be of immense relief to investors who have to travel frequently to Singapore to attend to their business and investments.

Social Visit Pass for Entrepreneurs enables an applicant to stay in Singapore for 6 months, to explore business opportunities, conduct feasibility studies or complete negotiations. During the validity period the holder can leave and reenter Singapore without any hassle. The application for the SVP has to be furnished along with a support letter from the EDB. To obtain a Letter of Support from the EDB the applicant has to provide an overview of the business indicating Objective of your stay, area of business interest, Preliminary business idea, Target market , Development strategy & proposed timeline, Track record of previous business ventures ,if any, Relevant skills & work experiences. It normally takes 5 days for the letter of support to be issued by the EDB while the SVP will be issued by the ICA quite immediately on the day of submitting the application or on the following day.

EntrePass is designed to facilitate the entry and stay of entrepreneurs in Singapore to directly manage the business operations, and comes with an initial validity period of up to 2 years. It is renewable as long as the business remains viable and lucrative. The EntrePass also allows the applicant's immediate family to live in Singapore while the successful applicants start and grow their business here. With the EntrePass a person can leave and re-enter Singapore frequently with ease. The lucrative nature of business and efficacy of the business plan are the primary criteria for the Entrepass. Normally it takes around six weeks to know the outcome of the application.

Ms. Ragini Dhanvantray CEO of Rikvin consultancy offering a comprehensive Business Migration service for investors and entrepreneurs says "Singapore is emerging as the hub of Asia for almost all industry, offers the best quality of life and a safe option for investing. With assured return on investment investors and business men are keen to enter and explore the opportunity that this city state has to offer, and government facilitates such aspirants with focused programmes like the GIP. The overwhelming enquiries from the overseas investors ever since the launch of the programme has been growing in leaps and bounds and we are offering a full suit of service to such clients".

Please visit http://www.rikvin.com for more information on setting up your Company in Singapore.

contact us at info@rikvin.com

About the Author
Rikvin is an expert in fast online service for company incorporation, private limited company formation, business registration and full corporate secretarial services in Singapore

Jim Rogers and his Principles of Trading

2009-09-18T01:28:00.000-07:00

Jim Rogers is a leader in the field of business since he was able to understand and set the pace that would dictate a better business process. Basically, the principle behind success can be simplified through a complete and meticulous standard of conducting business. First thing that people should understand is that the field of business is simple if the correct factors are assessed many of the situations in the economy could be an indication of what would happen. The good thing about the guide and tips coming from the Jim Rogers resource management is that the use of resources is explicitly and meticulously guided in order to increase revenue without the risk of putting it in significant danger. Basically, the direction in the economy would be the main determinant of how things would work out. That is why the crucial process of investing starts with the process of information gathering. Many large companies were able to find success by merely planning out their strategies carefully. Business involves a lot of factors which can be changed in a moment's notice. That is why many problems arise through the last minute disruption of the trading process. This can easily lead to great losses and even bankruptcy. In order to prevent this, planning should be done in a way that would allow flexible changes to occur in cases that there would be immediate changes. This problem has been addressed in the current revisions in the economy done to reverse the effects of the recession. The possibility of the occurrence of the recession has been mishandled by the government because of the lack of planning. Jim Rogers significantly addressed the use of contingency plan in case the initial objective did not match the situation presently established. Many of the people involved in business should always plan out in case there is a falling out of their strategy. The best thing to do is to have the maximal profit from their initial investment. If this would only be possible in selling a percentage of their company, then it would be more viable and applicable.
Jim Rogers also addressed the proper mind seta person should have in case one would like to engage in business. Objectivity is very important since it would render the perception of the businessman clear at all times. Lack of the correct vision due to emotional and internal conflict of the person in business could easily mislead him in making the right decision. Being objective can be achieved by simply setting in place the company's future prior to anything else. This would require sacrifice and cut backs with regards to the different monetary rewards one should receive. Basically, growth can only be achieved through the use of the correct resources in dealing with the investments. Expansion should be done regularly through the injection of the resources required. This would allow expansion of operations. Jim Rogers was able to gain success by thinking on how to enhance the process of business and not to merely on the objective of money and income.

About the Author
Alex Garcia is a finance student at CSULA. He writes about Jim Rogers at All Things Jim Rogers, the number one unauthorized Jim Rogers blog.

An Explanation of Child Trust Funds

2009-09-17T21:04:00.000-07:00

Every parent wants to give their little one the best start in life, which is why the Government created The Child Trust Fund (CTF). Believe it or not the Government even gives you money - for free - for you to open and invest in an account for them. This makes it even easier to start saving money for the future.

A Child Trust Fund is an easy and effective way to begin saving for your child and help to give them a great financial start to their adult life. And what's more, if you start adding to their account now and continue to do so regularly, at 18 your child could have a lump sum to go towards further education, a car or a gap year trip travelling the world.

Every eligible child born since 1 September 2002 is sent a £250 voucher by the Government (and will receive a further £250 if your family receives full Child Tax Credit). You get the voucher soon after you register for Child Benefit and must use it to open a Child Trust Fund account with a Government-approved provider.

There are three types of Child Trust Fund to choose from:

Stakeholder - investment is linked to shares (to take advantage of their greater potential for growth) until the child is 13, then money is gradually moved to less risky investments. Charges are limited to 1.5% of the account's value each year. This type of account is the Government's preferred option. However, as the account is shares-based, the child could get back less than is paid in.
Shares-based - similar to stakeholder (with investment usually in or linked to shares), but there is no requirement to move money to less risky investments from 13, and no limit on providers' charges. Like stakeholder accounts, the child could get back less than is paid in.
Cash account - like a bank or building society savings account. The child is sure to get back the amount paid in, but interest rates can fall, and the account may not keep pace with inflation.
With all three types, nobody can access the money except the child, and then not until they reach 18.

When your child turns seven, she gets another £250 (again with an extra £250 if you're still getting full Child Tax Credit).

You, your family and friends can keep adding to the account on your child's behalf. Between you, you can pay up to £1,200 into the Child Trust Fund each year, from one birthday to the next. This means you can adapt the amount you pay in to suit other financial commitments you have.

All the money, including investment growth (which is free from income and capital gains taxes), belongs to your tot but they can't touch it until they're 18. But by then there could be a lump sum waiting for them - and there'll be no personal tax for your child to pay on the amount paid out.

About the Author
Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

Best Stock Market Investments > How to Invest in Hot Stocks

2009-09-16T16:24:00.000-07:00

The stock market is presenting us with a wide variety of NEW hot stocks in 2009 & 2010. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That's why it's very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market, especially on uncertain times like these.

You don't necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

About the Author
Momentum Stock Pick helps stock traders and investors take advantage of practical stock trading opportunities every day at http://www.MomentumStockPick.com

How to Get The Best Savings on Investments

2009-09-15T13:30:00.000-07:00

Preparing taxes seems complicated but this article on reducing your tax rate will go a long way in removing lots of mystery and put taxes in perspective. It may also mean creating assets so that they earn cash. Investing is an individual choice which allows an individual to put his capital in property, stocks, or bonds so that they generate returns over time. A savings account is also safer and more secure against theft, loss and damage if you were to keep the liquid assets under your bed.
It is likely that they will review the authenticity of your tax history to make sure that you really have a sufficient source of income. But that will be just about it. People need to evaluate their current fiscal resources to determine if they will have adequate cash flow during retirement years. It is essential that Americans be educated regarding the necessity of investing to share for their retirement years. Based on the type of account, deposits can be made for any amount all the time. Your liquid assets can be accessible for when you need it, depending what account type you have. This is the most difficult part but this is where you can usually save in taxes when you are in the center of an investment (livret epargne populaire) program. Do not worry if you have bad credit because even if you have to provide some information which will be checked by the bank, they will not venture out into your credit past.

Be wary of terms that select lending companies use that may mean the same thing. Some other banks might waive some fees and then add more, which might cost you more. And while this may convert a very minute amount of capital into a significant capital flow stream, it's not without danger. One of the main reasons is because the cash market funds solely invest in secure securities such as commercial paper, reliable government investments and other related investments which will ensure you that such funds are a safe investment you could invest you money in.

Your cash should be accessible for when you need it, depending what account type you have. With some accounts, you can access your liquid assets via an ATM while others might mandate you to go to the bank itself. The most crucial thing is your future and what investment vehicle works best for you. So, once you get hold of that cash, spend it only for its intended purpose. If it was meant to pay for expenses in a family investment then it should be about that. If your savings withdraw is greater than the value you actually need then save it. You must make sure you have cash saved up for your everyday costs such as transportation. Similar to bank savings accounts that make available the customers with a bank interest,these cash market funds even make available higher return on investments to the customers that will certainly share them with a improved return.

But, a note of danger is added here. Both investing and real estate are driven by speculative tendencies and there is always a chance that your tax liability can be subject to very big decreases in their value. Job changers need to preserve their retirement accounts as they move from one career to another.These small sacrifices could result in missing the newest trends or waking up a little bit earlier than usual once in a while. It could mean spending your weekends off just right in front of your television or perhaps just cleaning your room. Regardless, once your investment has paid off, you will know that it was all worth every single penny saved in the end.

About the Author
Created by Thomas Linacre of the French site mesplacementsfinanciers.com which contains a large amount of educational facts to assist you find out more on the subject of financial establishments (placement financier assurance vie) and financial establishments.

Stock Market For Beginners

2009-09-15T13:10:00.000-07:00

A wealthy man advised his college-age son: “Our incomes should be like our shoes: if too small, they will pinch us, but if too large, they will cause us to stumble and to trip.” In anything, people need to know how to balance, especially their checkbooks. In economic hard times, ordinary employees and workers are afraid to let go of their money. Even business people are terrified to put their hard-earned funds in stocks because they think it is still unstable. But as the Chinese proverb says, there is an opportunity in every crisis. Investing in the stock market now has considerable risk but, when done right, it could give good returns for the beginning investor. It is like having a fast payday loan: applicants can get their cash quickly but they have to factor in a higher interest and they must repay the loan within the terms or else they would have a bad credit rating.

According to financial experts, those who plan to invest in stocks should look for investments that have minimal risks and maximum earning potential. Stocks have traditionally generated the best returns among all investment types. They encourage beginners to invest a fixed amount of money at regular increases over an extended period of time. It is best to purchase more shares when prices are low and buy less when prices are high. Blue chips are the purchase of choice—these are shares in a companies that are seen as stable and with a good performance record, meaning its earnings and growth rate has a steady rise.

However, most people from employees to business owners to professionals, such as lawyers and doctors, are generally worried or paranoid about investing. This is due mainly to lack of awareness and information on the workings of the stock market. It does not help that since worldwide economic slowdown, that stock market encountered negative publicity. Still, ordinary salaried person or business owner could still acquire gains in the stock market. For instance, young investors can see it as a personal wealth-building tool and a good way to build a retirement nest egg. One could also picture it like this: anyone can get an online payday loan, as long as the proper procedures and requirements are followed and submitted.

Of course, for beginners, understanding the workings and the ins-and-outs of the stock market takes hard work, serious study, and independent thinking. The best thing for them to remember is to make informed choices and decisions—not just from hearsay or “insider tips”. Lastly, ordinary investors should come up with a simple plan to focus on their goals for investing.

About the Author

Sean Teahan co-founder of Cash Doctors,Australia's preferred short term lender, shares his insights on money matters. Founded in 2005 Cash Doctors has helped thousands of Australians with their fast cash loans but that's just the short term solution. The aim is to assist people in achieving instant and long term financial freedom.

What Types of ETFs Are There?

2009-09-10T13:43:00.000-07:00

There are many types of ETFs or "Exchange Traded Funds". Let's start with the three basics. These are exchange traded:

1. open end index mutual fund (passively managed)
2. unit investment trust, abbreviated UIT (actively managed)
3. guarantor trust

The term "exchange-traded" means that the funds are traded on the stock market. By contrast, shares of standard mutual funds are bought and sold through the company that manages the fund.

Shares of ETFs are bought and sold on the market floor, just like an individual stock. But, the items in the ETF portfolio will include a number of different assets. In the open ended ETF, daily profits are automatically reinvested. Share holders receive cash dividends on a quarterly basis.

UITs might be diversified, but they might not. Nothing is done automatically. A management team makes the decisions. The payment of dividends varies. In other words, there are fewer rules.

A grantor trust ETF is more like a standard stock holding. You have a shareholder's vote and all dividends are paid to you, rather than reinvested.

Most investors are accustomed to making money by buying low and selling high or holding a position for many years and expecting to earn an average of 10% per year. Of course, that didn't happen in recent years. Many investors lost money. But, historically, that's what long-term investors have expected.

There is one kind of ETF that does not depend on the value of the stock increasing over time. It is referred to as an "Inverse ETF". Investing in an inverse ETF means that you profit from a decline in the value of an underlying benchmark, such as the NASDAQ. Two of the inverse ETFs are the NASDAQ 100 and the Russell 2000.

The term "smart" or "intelligent" ETF is sometimes used to refer to funds that are actively managed. The holdings within the fund may be based on a broad index fund, such as the S&P 500, but the management team has the freedom to change the amounts of certain stocks held within the fund or exclude some all together.

Other terms that may be seen alongside the ETF refer to the type of security held within the fund. For example, there are silver, commodity, oil, bond, China, energy, EURO and many other types of ETFs.

Analysts have different ideas about how to pick a truly intelligent ETF, one that earns over the short and long term. The best advice is to be sure that the fund is not too heavily invested in any one area. Diversification is always the smartest choice.

Ian Wright can help you with your ETF investing concerns on his site free ETF trend trading located at http://trend-trading-review.com.

Article Source: http://EzineArticles.com/?expert=Ian_E._Wright

Stocks, Bonds, and CDs - Ways to Invest

2009-09-09T05:38:00.000-07:00

It's natural to be wary of the stock market in today's era of recession. However, if you have the money to spare, right now is a great time to invest your extra cash, whether in the stock market or in other modes of investment. The stock prices are lower, and generally investment prices are less as well. To help you feel more confident in navigating the investing world, this article will take a look at the various options you have for investing your money.

Perhaps the most obvious place to infuse your cash is the stock market. Basically, publicly traded companies offer their stock for sale on the stock exchange. This means that they are giving out shares in the company, and those who own shares in the company go along with the ups and downs of that specific business. For instance, if you buy shares in a start-up computer company, if the company does extremely well, your stock value can rise considerably. However, the same goes for downturns. If the start-up loses its momentum and begins to suffer in the amount of profit they bring in, your stock values will decrease.

The stock market is good place to invest because it can offer a quick turnaround on your investment. On the other hand, people have also lost millions of dollars if the stock exchange plummets into a recession.

Another place to put your money is in bonds. Bonds are like debt I.O.U.s. With bonds, the issuer needs capital in hand to complete a project. For example, let's say that the state government needs money to finance a highway building project. It can sell bonds to the public which pays back a certain amount of interest during the term of the bond, as well as the face value of the bond whenever it expires, or becomes due. Bonds tend to be much less risky than stocks, especially when government-issued. They pay back a fairly predictable amount in interest.

Lastly, another money-raiser is a CD. No, not a listening CD or compact disc, but a Certificate of Deposit. CDs are another fairly low-risk way to invest your money and earn interest. Basically, a person can go to a bank and deposit a certain amount of money. They agree to a specific time span of the deposit, as well as the interest rate. The interest rates for CDs are normally higher than the regular savings account interest rates. After the life span of the CD is up, a person can go to the bank and claim the original deposit, plus all of the interest that it accrued.

Luckily, the FDIC insures CDs up to $250,000, which is very helpful in the investment world because things like stocks aren't really insured, and you can suffer huge losses. However, a downside is that if you need the deposited money before the life span of the CD expires, you will probably have to pay a fee-kind of like paying a buyout fee in contracts.

Navigating the many places to invest your money can be confusing.

For more information regarding your investment options as well as other business-related topics, check out the helpful Business Directory today.

Joseph Devine

Article Source: http://EzineArticles.com/?expert=Joseph_Devine

What Sort of Innvestor Are You?

2009-09-08T23:48:00.000-07:00

Investing your money is certainly a game. We are all taking a gamble with our money when we speculate on where we are going to invest and we do so in the hope that we are going to make some decent money at some point in the future. Let's face it, if this wasn't our end objective why would we bother to invest.

However, there is more to an investment than just speculating where to put your money and waiting. There is the journey and lots of people tend to ignore the fact that to make wealth you have to experience a journey. You need to go on a trip and that trip is full of many surprises and lots of ups and downs.

The Cool, Calm, Controlled Investor

If you are a calm, cool and collected investor you are prepared for your journey. You know and understand that you will have good days, weeks, months and years and you also know and understand that you will have bad days, weeks, months and years. But you will be prepared for this and accept this. You are focused on the end result. During turbulent times you stay calm. When the boat is rocking and you don't jump overboard. You hang on to the side and appreciate it when you come back into calm waters.

You hang on to your investments. Any short term gains and losses that are experienced throughout this journey are less relevant to you. You don't sell when you have made a few dollars to quickly reap a short term profit and you don't sell when you see your value dropping in bad times. You expect this to occur and you remain strongly focused on the benefits you will see when you achieve your end result and the wealth you will have one day down the track.

The Stressed, Anxious, Panicked Investor

If you are like a lot of people though, you find it very hard to remain cool, calm and controlled when you invest. Despite your best intentions, the slightest movement in the price of your investment sees you anxious to sell and to take the profits from any short term gains or to take flight and pull out after experiencing some short term losses. You are now focusing purely on today and have forgotten about your longer term plan and the journey you are taking to build up your wealth for the future.

Unfortunately there are dangers to these sorts of knee jerk reactions. People who have been through an unpleasant investment experience and lost money, generally retreat away from wealth creation all together. Doing this means they miss out on future opportunities as they won't have their money invested today ready to build wealth in the future to meet their long term goals. They also carry around a lot of negativity telling everyone they meet that investing is all too hard and too dangerous.

People who have made quick money are also in danger. Their expectation of investing is all sweet and rosy. They are likely then to make irrational decisions and take greater chances with their money in the expectation that their previous experience will be repeated. The danger with this is investment journeys aren't all uphill and these investors won't be prepared for the falls when they come along. They are too focused on today and making money overnight rather than remembering they were on a journey today to make wealth for tomorrow.

What sort of investor are you?

Are you able to ignore your journey to making wealth and ride out the good and bad times? Do you tend to focus on the short term or the long term? Do you count your losses / gains regularly? Do you forget your end goals and what it is you set off to achieve or do you remain focused on these? You can see it makes a huge difference if you are prepared for your journey and can understand the sort of experiences you will have as a long term investor.

Detective Heather Wood is Managing Director and writer for Money Detective Pty Ltd. - http://www.moneydetective.com.au/about-us/meet-the-detective-team

Money Detective can help you with all of your money troubles. From our website full of factual information and articles, to our one on one personal money coaching, Money Detective can help you with all aspects of money management. Sign up for our Newsletter today and get yourself 6 free Money Clues http://www.moneydetective.com.au.

© Money Detective Pty Ltd 2009

Article Source: http://EzineArticles.com/?expert=Heather_A_Wood

Investing

2009-09-06T19:17:00.000-07:00

Welcome to this Investing website. We provide traders with trading information on markets worldwide. We strive to inform our readers of the newest tips and advice on investing success. This will include insights on investing in options, commodities, stocks, bonds and real estate.

Privacy Policy

2009-08-08T10:11:00.000-07:00

Privacy

We have created this privacy statement in order to demonstrate our firm and continuing commitment to the privacy of personal information provided by those visiting and interacting with this web site. We hold the privacy of your personal information in the highest regard. The following discloses our information gathering and dissemination practices for this website.
We recognize the importance of protecting your privacy and our policy is designed to assist you in understanding how we collect, use and safeguard the personal information you provide to us and to assist you in making informed decisions when using our site. This policy will be continuously assessed against new technologies, business practices and our customers' needs.

What Information Do We Collect?

When you visit this web site you may provide us with two types of information: personal information you knowingly choose to disclose that is collected on an individual basis and Web site use information collected on an aggregate basis as you and others browse our Web site.

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You may request access to all your personally identifiable information that we collect online and maintain in our database by emailing us at the usual address.

What About Legally Compelled Disclosure of Information?

We may disclose information when legally compelled to do so, in other words, when we, in good faith, believe that the law requires it or for the protection of our legal rights. We may also disclose account information when we have reason to believe that disclosing this information is necessary to identify, contact or bring legal action against someone who may be violating our Terms of Service or to protect the safety of our users and the Public.

What About Other Web Sites Linked to Our Web Site?

We are not responsible for the practices employed by Web sites linked to or from our Web site or the information or content contained therein. Often links to other Web sites are provided solely as pointers to information on topics that may be useful to the users of our Web site.

Please remember that when you use a link to go from our Website to another web site, our Privacy Policy is no longer in effect. Your browsing and interaction on any other web site, including web sites, which have a link on our Website, is subject to that Web site's own rules and policies. Please read over those rules and policies before proceeding.

Your Consent

By using our Web site you consent to our collection and use of your personal information as described in this Privacy Policy. We reserve the right to amend this privacy policy at any time with or without notice.

Our Commitment To Data Security:

Please note that your information will be stored and processed on our computers in the United States. The laws on holding personal data in the United States may be less stringent than the laws of your Country of residence or citizenship. To prevent unauthorized access, maintain data accuracy, and ensure the correct use of information, we have put in place appropriate physical, electronic, and managerial procedures to safeguard and secure the information we collect online.

Choice/Opt-In/Opt-Out

This site allows visitors to unsubscribe so that they will not receive future messages. After unsubscribing we will discontinue sending the particular messages as soon as technically feasible.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose this information. Information requested may include contact information (such as name and shipping address), and demographic information (such as zip code, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the use and satisfaction of this site.

A Special Note About Children

Children are not eligible to use our services unsupervised and we ask that children (under the age of 14) do not submit any personal information to us. If you are a minor, you can use this service only in conjunction with permission and guidance from your parents or guardians.

Acquisition or Changes in Ownership

In the event that the web site (or a substantial portion of its assets) is acquired, your information would be considered part of those assets, and may be part of those assets that are transferred.

Policy Modifications
We may change this Privacy Policy from time to time. If/when changes are made to this privacy policy, we will email users who have given us permission to do so. We will post any changes here, so be sure to check back periodically. However, please be assured that if the Privacy Policy changes in the future, we will not use the personal information you have submitted to us under this Privacy Policy in a manner that is materially inconsistent with this Privacy Policy, without your prior consent