How to Plan Your Investments

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Whether you are an individual or a corporate body planning your investments ahead is of at most importance. As planning your investments means planning your future financial status and meeting unforeseen with ease and confidence it has become life blood that makes your path of hardships a bed of roses. Planning your finances involve planning your inflows and outflows i.e., In short managing the entire flow of funds during a certain course of time.

Thus, it is a must for anyone to plan your investments well in hand so; that your future will be safe and you can encounter any issue with ease and comfort. A proper investment planning would make your financial distress also a bliss as you always have a surplus reserve for different unforeseen of life. The reasons for financial distress could be multitudinous but the survival rate is higher and quicker for those who are financially planned when compared to those who are not. For having a proper investment planning you must follow few but regular steps which will save you at the eleventh hour. Let us look at few steps that you must follow to cushion yourself financially and to get a tag of well investment planner.

• The first and foremost step in investment planning is to assess your income. Asses all your inflows, which must include any sort of long term or annual cash inflows that you are expecting.

• Once you assessed your cash inflows, the next major step is to set a goal that could be any specific aspect that you would like to achieve with the money you are going to save from this year onwards.

• Once you set forth your goals and assess your inflows the next step is to plan your savings. The other way planning your investments. To plan your investments well you must know what your risk coefficient is and how much profits you want to make out of your little investments. To know this you must look at variety of financial and demographic and socio- economic factors that affect you and your family’s lifestyle.

• Once you are done with the assessment of your risk coefficients and return expectations the next big leap is to set an investment strategy. Under this, you will choose among different investment alternatives that are available to you based on your risk and profit margins.

• Once you choose a basket of investment options, go with the ones that are convenient for you in terms of time horizon, maturity period and return margins and so on. Having a clear investment strategy would not only make you a good investment planner but also a supersaver to your own self and to your family at times of emergencies.

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Bitcoin – A Secure Investment for the Future

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Bitcoin is an online digital currency, just like a dollar or a pound but with a few exceptions. Introduced by Satoshi Nakamoto in 2009, Bitcoin engages in a peer-to-peer payment system where no intermediaries exist and goods can be securely transferred between any two people on the planet. It is associated with a heavy network of computers and the unit of currency for the Bitcoin system (appropriately called Bitcoin) can be simply acquired by joining the vast network. Bitcoin provides a fast cheap and secure transaction alternative but few are willing to take the jump for it. So the one million dollar question still lingers, is Bitcoin a secure investment?

Bitcoin is only a few years old, an interesting creation that has awed many and for the record, has attained a name in the top financial charts. Its popularity has spanned and it has led some of the top businesses like Virgin Galactic to consider it as an acceptable source of payment. Bitcoin prices increase at rates of up to 10% and continue to dominate as the alpha of the market and this has made many interested in investing in it.

Another special feature of Bitcoin is that it does not have a central bank and neither does a central government control it. It’s a global currency and its creation and existence lies behind a complex and geeky mathematical algorithm that enables it to shadow government related mishaps. Cases of political instability and government absurdities that plunge the economy down to shame and lead years of investments in a currency down the drain do not occur in the crypto-currency system. This creates a secure and friendly investment opportunity with low inflation risks.

The Downside

With an ever-amazing upside, crypto-currency also has its downs. As mentioned, this thing is still taking baby steps; and with that comes great uncertainties. Bitcoin prices are volatile; currently increasing sharply and can fluctuate at 30% to 40% in a month. The world is still surprised at its emergence and there exists very few Bitcoin holders and Bitcoin. This leads to unanswered questions and cold fear among people as investing in a new unpredictable ‘gold mine’ can yield devastating effects. Its newness brings forth lack of regulations and scares off potential investors.

The enigma surrounding the Bitcoin system is a major factor to be considered. Anything can happen and everyone participating in the Bitcoin market is on a high alert. China in December 2013 eliminated the use of Bitcoin and this led to a drastic drop to its value from $1240 to $576 in just three weeks. Programmers also determine the functionality of this global currency and many question the thought of risking their finances for some group of geeks. This prevents many from venturing into the system and increases the risk of Bitcoin investment ever so highly.

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Mastering Short-Term Trading

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Short-term trading techniques involve a combination of skill, intuition, and experience by a trader. Traders make money by taking short-term positions in securities after identifying opportunities in both bull and bear markets.

Mastering short-term trading requires certain attributes in a trader.

The following factors are fundamental for a short-term trading strategy to ensure your losses are minimized while your gains are maximized.

  • Risk control

The risk involved in short-term trading is commensurable with the returns i.e. high risk, high reward. However, prudent risk management strategies should also be applied to short-term trading for a trader to control the risk involved and to realize the objective of the trade in the form of capital gains.

Some of the risk control measures that short-term traders have to master include the limit order or a stop order.

The limit order is an instruction given in advance about the price points where securities can be traded (buy/sell). It is used for maximization of the trader’s portfolio by ensuring that the trader takes advantage of the securities price points whether the price is falling or rising by triggering either the buy limit order or sell limit order respectively.

On the other hand, the stop order is an instruction given to a broker on the extent to which an investor can sustain losses on a given portfolio. The stop order, therefore, reduces the investor’s risk by cutting losses before or at a particular price point.

  • Technical skills

Markets are characterized by reoccurring conditions after certain periods or during specific events. A detailed analysis of the data gathered in a market extensively shows patterns in the market that become predictable. Mastering short-term trading requires the capacity to identify the accurate timing of occurrence and the conditions/events leading to the occurrence of the anticipated cycle for exploitation by the trader.

The technical analysis should also be meticulous enough to determine the trends in the performance of a tracked security over a very short period, including a day or weeks. Having such a capability places you in a better position to be a successful trader. The identified trends being relied on for decision making should have clear recurring bottoms and breakouts as a sign of proper technical analysis.

Another technical tool that a trader has to master is the ability to read different market data presented in various formats. For example, a short-term trader can use the moving average of a particular security to determine the best moment where the price is declining to executive a call.

  • Timing/experience/intuition

Short-term trading is characterized by holding a position for a very short period of time, sometimes seconds, and releasing the position to realize a capital gain. This requires mastery in the identification of opportunities in the market that are driven by the prevailing condition in the market, especially market sentiment. Exploiting the volatility of the markets is, however, a risky strategy because unforeseen events may disrupt the anticipated outcome of the identified market opportunity.

Essentially, trading is a strategy for realizing quick capital gains in the securities market.

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Here’s What Happened the Last Time the US Applied Steel Tariffs

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While Donal Trump says “Trade wars are good, and easy to win,” history suggests otherwise. In March 2002, George Bush gave into lobbyists and slapped on steel tariffs of between 8% and 30% on imported steel. At that time, Bush exempted Canada, and Mexico because of NAFTA, plus a few developing countries.

Immediately after those tariffs were applied, the S&P 500 dropped over 33% over the next seven months.

Trump is demonstrating that he is no more astute than Bush was, assuming that a trade war is a ‘good thing’. Every time a country applies protectionist policies, other countries do the same, and the losers are the consumers who end up paying more for the finished products.

Governments always react, never fully understanding the end result. Trying to protect an inefficient industry in your country by applying tariffs against a more productive country does not make the domestic industry more efficient, it just makes the finished products more expensive for your consumers. Tariffs are designed to raise the cost of imported goods. They are nothing more than a tax, and in this case, a tax to be paid by US consumers.

So sure, Trump may succumb to steel lobbyist in the US and apply these tariffs to save 143,000 jobs in the steel industry, but these tariffs will hurt over 6 million other workers in industries like the auto industry that use steel to manufacture their products. The end result is the finished products that use steel or aluminum are going to cost more for consumers. So how is this a ‘good thing?’

For US companies that use steel and aluminum, not only will their costs go up, they will be less competitive, and their exports will suffer. And then of course we will have the problem of reciprocal tariffs that have already been threatened by countries being hit by Trump’s steel and aluminum tariffs. The European Union and Canada have already stated that they will retaliate.

Currencies play a huge role in the cost of imported products. Canada is the biggest exporter of steel to the US. The $CAN is currently trading at 77.50 against the $US, meaning all other things being equal, steel priced in $CAN will be 22.5% cheaper than steel priced in the $US.

While these tariffs may help the bottom line for American steel companies, the real losers will be the US consumers. If this turns into a full- on trade war, there will be many more casualties globally, including investors.

Stay turned!

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How To Choose To Invest In A Company?

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In the beginning, every investor has the first question on their mind which is what will be his first step to invest in a company or how to choose a right company to invest and build a portfolio. There are lots of things to understand for an initial investment. You should have good knowledge about its profits and losses. You should also be aware of how long you can successfully stay in the stock market.

Although the stock market does not guarantee for long term profit, it’s a place of the type of risk, where you can ever be rich at any time or another time come back to the down. Therefore, to become a good investor, you must have full knowledge of stocks and its world. Here are some essential steps are given below that will help you to invest better in a right company.

Select place to start

There is a simple saying that the beginning is right then everything is right. Therefore, always invest in a company that is familiar with you. You should complete knowledge of its background, management and how those companies planned to make money in share market of India. If you are satisfied with all these things then this is your first step to start.

Do not go for cheap, choose the right one – whether it is expensive

There is the big misconception in people that cheaper is always good. They do not see the reasons for its cheapness. Sometimes it may happen that the stock is cheap because its business is growing is slow or very less. Sometimes it can happen that the stock is expensive because in the next few years it is expected to grow faster. That’s why, instead of cheap, you should buy those stocks, which are likely to have higher prices in future to gain more profit, whether it is expensive.

Find revenue growth

This one is your third step, where you need to see the company’s revenue growth. Sometimes, it can happen, when companies earn more money in the long run. Therefore, stock prices increase, which generally starts with rising revenues; you will see analyst’s revenues in the form of “top line”.

Look for profit margin or bottom line

The bottom line refers to company’s net income or earnings per share (EPS). In reference to “bottom”, describes the net income figure on company’s income statement. The company’s profits margin is the main difference between revenue and expenditure. A company that increases the revenue while controlling costs will probably extend the margin.

Find out how much debt the company has

One of the most important works before investment that is check the balance sheet of the company. As always has said that the company’s debt is more likely to be more volatile because the higher income of the company goes into interest and loan payments. By comparing the company with their peers, see if the company is borrowing an unusual amount for its figure and industry.

Discover a dividend

A dividend is not just a source of cash payment for a stock investor or this regular income; it is just a sign of a good financial health of the company. If a company is able to pays dividends, then here you need to see their all payments history and find out if the company is raising the dividend or not?

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5 Reasons To Invest In The Real Estate Market

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If you have always wanted to become a real estate investor, now is the perfect time to achieve your dream. Today’s economic conditions and housing market are suitable for long term and profitable investments, so get the most out of your savings by investing in the housing market.

If you are wondering about the benefits of housing investments based on the current market trends, here are five reasons why this is a good option.

  1. Good Long-Term Returns: For people who are willing to improve their investment and work on it to increase its value and sell it at a later date, real estate can be a good bargain. Buy an old property, refurbish it, and sell it again at a good price to gain a profit. You can also rent your property if you want a continuous flow of cash.
  2. The Economy is Improving: The economy is finally rising from its recessive state. As it improves, people who had to foreclose on their homes will once again be looking for prospective house and properties to buy. Thus, an investor will have plenty of prospective buyers to sell his home to, once the has renovations are completed.
  3. Endless Opportunities: Investors are provided with boundless opportunities, as there are always people who are willing to sell their homes. Whether it is due to foreclosure or other reasons, many people are quick to sell to an investor. On the other hands, many buyers are ready and willing to purchase homes for their families. Regardless of economic and market conditions, the housing market never comes to a complete standstill.
  4. Tax-Free Profits from Rental Properties: Many real estate investors use their savings to buy rental properties that they can rent to tenants at favorable rates. The rent money received from tenants is exempt from taxes; thus, it is a purely accounted as your profitable income.
  5. An Asset: If you do not have any existing monetary assets, then choosing real estate is a good idea. No matter how much the economy might fall, you will always be able to encash your property as an asset to get money in a time of need.

Considering the above reasons, the time is now for becoming a real estate investor.

However, when searching for investment property, always consider multiple options, make sure you have the money to fund your investment, and create a backup plan in case your investment faces any major issues over time.

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Will the US Economy Face Recession in 2011 Again?

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Where is the US economy headed?

No doubt, recovery expectations have risen over the past few months, mostly on the back of stimulus packages and proactive stance of the government. But this doesn’t seem to be a long term fix to the situation as debt is rising and soon it will build up as a mountain of worries. Everyone is aware of the situation but all efforts are being made to keep the economy running in the shorter term.

Is the Debt Problem Really Intense in US?

It’s really hard to say if the economy will collapse in 2011, but it’s almost certain that if the government continues to spend on temporary relief packages to stimulate the economy, the mountain of increasing debt will lead to the biggest financial disaster ever witnessed by mankind. At present US government, businesses nationwide and American consumers are all sailing on the same boat, which is headed for an iceberg. If you do not agree to what is being said here, then read on to know hard facts.

Will the Housing Market Recover in 2011?

Mortgage defaults are still appearing fresh in the market, keeping the housing prices near record lows. Defaults have been record high and still increasing since mid 2007. What if housing prices fail to show considerable recovery going into 2011? Well, many economists are of the view that housing market may not show any sign of improvement till the end of next year. Now, this could result in a second wave of foreclosures, which will make the cracks much wider and hopes of recovery will be shattered for long. Is Consumer Spend and Employment Situation still a Threat? Ideally, a recession is a temporary blip in economic activity, but this time around it has stayed much longer. This is evident from the employment situation, as the unemployment data is not improving despite so much quantitative and qualitative easing by the monetary authorities. Latest stimulus package has provided a support to the financial markets as investors believe that this money will help in creating jobs in the system, and as an end result consumer spend will once again pick up. But, so far things have not worked as they were expected by the Fed, and same could be the case yet again.

Are the Americans Broke?

There is no hiding from the fact that more and more American citizens are filing for personal bankruptcy. In such scenarios, how can authorities expect the demand to surface again, when people are high on debt?

America simply needs jobs, and it needs them at a much higher pace than anticipated. The recent recession, which is now officially over, may have been an indicator of an upcoming depression in the system, as it was much more than what a recession is. Now, if we again slip back to negative growth, which cannot be ruled out so early, then the economic chaos will spread its wings globally, and the world will spend a decade with a flat growth.

Investors and traders should remain prepared such financial turmoil anytime soon. Even saving up on brokerage costs, by opting for cheap online discount brokers, can help in maximizing returns in such uncertain times.

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Investing 101: Risk Terminology – BETA

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About thirty years ago, statisticians armed with all of their statistical theories began to confront the financial markets. A handful of useful tools emerged that the average investor should be familiar with when they look to purchase stocks.

One secret that people “in the know” use is “BETA”. “Beta” is a number which reflects how volatile a stock has been relative to the market. This number is also quoted on most quotation services so it is easy to get to, but I have often found that it is never defined. A BETA of 1.00 means that on average, a stock has traditionally matched the markets swings both on the upside and on the downside. A BETA greater than 1.00 reflects above average market volatility, and a BETA of less than 1.00 indicates below average market volatility. When a BETA is less than zero it indicates that the stock moves contrary to the general market, going down in bull markets and rising in bear markets.. It used to be the case that Gold mining stocks would have negative betas. Internet stocks for example have very high betas.

Many of the analysts that cross your TV screen and make recommendations use BETA as their primary screening device in searching for suitable investments. So the next time your broker calls with an investment recommendation, ask him what the BETA is and then relish the silence on the other end of the phone. Then send him a copy of this article!

Dowjonesfully,

-Harald Anderson

http://www.eOptionsTrader.com

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10 Ways the USD Affects World Markets

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The United States is the world’s strongest and largest economy. US currency remains dominant over other global currencies in the international markets. The behavior of the US Dollar impacts global markets significantly, culminating to both positive and adverse consequences in these markets.

Here are 10 ways that the USD affects world markets:

  1. A stronger USD slows down trade in the international markets. A stronger USD weakens the other currencies in global markets, making it more expensive to purchase dollar-denominated commodities.
  2. However, these markets also get excited if they are exporting to the United States. The stronger dollar causes depreciation of the local currencies in these markets, creating inflation of the domestic currencies.
  3. When the USD rallies against other currencies, demand shifts from the United States market to the global markets, hence increasing economic and financial activity in the global markets.
  4. A stronger USD also attracts capital inflows in foreign direct investment (FDI) and other investment from USD investors to these markets. This is mostly experienced in developing countries where the markets are emerging markets with high economic growth rates.
  5. Capital inflows in USD in these foreign markets spur economic activities such as lending, employment, and consumption, hence stimulating growth in these markets.
  6. Commodities such as precious metals and oil in the international market are quoted in USD. Therefore, the performance of the USD determines the cost of living in world markets. The consequences of a weaker USD to these markets include lower gas prices while a stronger USD makes the gas more expensive to purchase for the consumer.
  7. Global financial markets monitor the USD closely to ascertain the spot price for fast moving commodities. Any fluctuations in the USD trigger a series of sales and purchases of these commodities in speculation of either outcome based on the behavior of the dollar.
  8. A hike in the Federal Reserve rate causes the dollar to become more expensive for investors. This can trigger capital flight from these markets; slowing growth and reducing demand for USD-denominated products.
  9. Also, high-interest rates can reduce USD liquidity and subsequently reduce investment, resulting in job losses and a global recession as recently experienced in the 2007 global recession.
  10. As a reserve currency and standard international currency in most countries, the interest rate of the USD determines the cost of financing foreign debts for the global markets. The foreign exchange rate of the USD determines interest paid and the accessibility of credit in the world financial market while still having an impact on the balance of payment based on the USD reserves held by an entity.

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Invest $400 and Make a Fortune In 4 Easy Steps

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Have you ever heard of the phrase – give a man a fish and he eats for a day, but teach a man to fish and he eats for a lifetime? Well I would like to focus on that simple principle with an idea of how to invest $400 and make a fortune. I want to tell you that you already know how to do this. Below are 5 easy steps to make a fortune starting with just $400

If you have purchased anything from the store you already understand the concept of sales. The question is how can YOU take a small Investment and turn that into a large amount of money?

So here are some ideas.

Step 1: How can I make a $400 Investment turn into $4,000? Buy a small business that returns $80 dollars a week, that will give you a return of $4000 in a year and you can find such a business online easily for $400

Step 2: How can I make a $4,000 Investment turn into $40,000? Secure land that has development potential without actually buying it. Use a lease to buy for a short time then spend $4000 on advertising and a nice full color billboard on the land. Sell it for a $40,000 profit.

Step 3: How can I make a $40,000 Investment turn into $400,000? Put down a deposit on a luxury Yacht and have it re finished to raise the value. Do a double close so you never have to fund the purchase.

Step 4: How can I make a $400,000 Investment turn into $4,000,000? Buy 10 acres on the outskirts of your town making sure the land is zoned for building then subdivide the land into small residential lots and sell each one for 10 times what you paid in bulk.

These are some suggestions that came to mind. Nevertheless, do not limit yourself to these ideas. You can experiment with other thoughts and ideas too.

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