Discover How You Can Make Money Trading Forex Online

By Grant Dougan

Plenty of individuals have dabbled in forex trading as a way to earn some more cash. Absolutely anyone with an internet connection can engage in forex trading online which has caused a rush of people to play the markets with aspirations of making money.

Part of the hoopla forex trading has been a result of just how many people are using it as a money-making opportunity. Obviously as more individuals begin to trade forex, it's only natural that plenty of people want to find out the tips behind cashing in from currency trading. We're gonna look at how forex trading works.

The basic principle is the identical to stock trading.: You need to buy at low prices and sell high. For example, if you're purchasing some Canadian dollars with US dollars, each CDN dollar costs around 75 cents as of now. If you think that the Canadian currency will gain in value, it's wise to purchase CDN dollars at 75 cents and unload them them when the worth rises.

Forex traders will spend lots of time analyzing pairs of currencies (the British Pound and Hong Kong Dollar are one example of a currency pair), searching for key indicators or cyclical shifts in comparative value in order to spot buy and sell orders and turn a profit.

Traders also use forex trading programs that let them see profit oppotunities. Every professional will use this type of software as it will cause an increase in the money they can make.

Truth is that these programs can make all the difference between a profitable trader and one that fails to make money. Nobody wants to confess that a computer program is brighter than them, but many of the traders that are earning a big profit owe it to some sort of forex software.

Althought this may seem a touch perplexing or technical - especially for those who are new to forex trading. The basic idea is that these programs have been programmed - usually by a squad of pro traders and mathematicians - in order to spot signals and recognize juicy trades that you can use to make money.

Purchase a currency program if you're thinking of trading forex. This gives you a giant jumpstart. Forex programs can quickly produce profits for you on it's own. This allows you extra time to look into the currency markets and later on you can use combo of the trades the program points out and the trading ideas you generate yourself based on your analysis.

Pro traders all possess a certain characteristic - they are ok with taking risks and don't mind the the ups and downs. In fact, many pros love this part of forex trading! You need a certain type mentality, however if you are not afraid of risks and can take care a few swings, it can be a fun way to bring in extra money.

A big benefit of dealing in forex is that no matter how much a currency jumps or flops around, it's highly unlikely to fall to a value of zero. Obviously, this isn't the situation with day trading or the futures markets. - 31987

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Discover How To Make Extra Money By Trading Currencies Online

By Richard Busbridge

Usually we supply our readers information about the stock market, we thought to have a look at a different area of the investing arena. We get at least a couple of emails every day in regards to forex trading, so we thought we would produce a quick guide talking about how individuals earn income by trading forex.

Because you can trade currencies right on your computer, there is plenty more people attempting to make cash in the forex markets.

As I'm sure you know, currencies will shift in price constantly. A forex trader attempts to predict when these shifts will take place so that they are able to time when they purchase or offer for sale a specific currency.

What makes a currency change in price? There are several factors, but we want to look at two of the main ones.

One of the largest factors in setting currency prices is interest rates. If rates increase this will cause more foreigners to invest in the country. These new investments lead to an increased demand for the country's money and it rises in value. There is lots of money that can be generated if you are able to predict when rates will increase in a certain country.

Prices of commodities will also play a sizeable role on certain currencies. Canada is an producer of oil and other natural resources. If oil prices rise, this causes a greater demand for the Canadian dollar as more individuals require the currency to finance the purchase. If oil prices rise, it is extremely likely that the Canadian dollar will rise.

If you're interested in trying currency trading, please think about buying a forex trading computer program to give you a hand. There are now pieces of software that study the forex markets based on market information and then pick out strong trading opportunities. These programs alone can earn you a considerable amount of money and although they are used by pro traders, they are also the perfect way for novices to get started.

It's possible to make plenty of cash with currency trading. Once you get the proper trading tools, it is a fun way to earn additional cash.. - 31987

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Use These Day Trading Secrets To Make Money In The Markets

By Grant Dougan

One of the hottest and exciting methods to earn an income these days is day trading. There are people that get involved in day trading to supplement their standard income, while some people look at it as a full time profession. There's a lot of individuals making good cash with day trading which is why numerous people are trying it out.

Now obviously you can't merely start and make sizeable money without knowing anything about the markets! You need to have a certain level of education when you begin so you can make the most out of your cash.

The way to make money with stocks is to purchase low, and deal when the price is high. So how do you know when to invest in a certain stock?

Here are some essential tips for you to make money with day trading.

Know the news and stay on top of the stock market. You don't have to take hours with this, but have a couple of key financial sites you read and it's wise to observe a couple of companies closely. You want to gain a sound overview of the happenings in the stock market.

Don't waste time on shares with hardly any volatility. Change is the name of the game for day trading. As its name suggests, day trading means dealing financial instruments throughout the day. You don't have time to stick around and discover what happens while other profitable trades are passing you by.

Improve your mathematical analysis skills. Having the ability to understand financial information and reports is important to being a profitable day trader. There's no need to be a math wiz, but you do need to understand what the financial data mean in order to make quick, accurate judgments.

Learn how to have lots of nerves. The people who generate the most income have the ability to maintain their emotions even if they are experiencing a downturn. Whether someone is overly excited about a big win, or largely disappointed about a loss, either of these emotional responses can impede your capability to stay in the game, make smart decisions, and keep a clear head.

You might not become well off right away, but these hints are going to get you on the path to making great money with day trading. There's a lot of cash to be earned in the markets and with a small amount of work, you can be profiting from this stimulating job. - 31987

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Nasty Institutional Traders Run The Stops

By Mike Smith

Scores of traders feel you should set your stop based on how much money you are prepared to suffer the loss of. This is a huge mistake institutional traders hope you continue to make. Stop placement requires better competence than that. A stop must not be placed too close to the current market price or too far away.

Where You Must Never Place A Stop

Exactly above preceding highs or just below former lows is a risky place for stops. An equally treacherous place for stops is at the 50 and 200 day MAs. This is for the reason that lots of stops are repeatedly jammed together at these prices, welcoming institutional stop-runners to snipe the stops. Former intraday highs and lows are also areas where stops will build up.

The Major Blunder You Need To Avoid When Placing A Trailing Stop

When placing a trailing stop, you should reposition the stop in a explicit direction only. If the market is moving higher and you are long, your trailing sell stop must be moved higher. Conversely, if you are short and the market is moving lower, you must move your buy stop down-never higher-as the position gains profits.

How To Exploit Fibonacci Retracement Levels As Places To Situate Your Stops

The greatest percentage you want the market to retrace is .618 (61.8%) of the original move. You do not want the stop placed exactly at the .618 point, but slightly below or higher than that level, depending upon whether you are buying or selling. The wisdom is, institutional stop-runners will repeatedly target the stops at that level. As soon as the market has retraced more than .618, odds are the market is going to continue to trend in its current direction.

How You Can Discover If Institutional and Professional Traders Are Stop-Running

Stop-running is characterized by what is identified as price denial. The market quickly moves lower, only to do a swift recovery. This chart pattern usually appears as a 'v' bottom. At highs, the market will often surge up on short covering, go dead at the top, and swiftly move lower. This chart pattern usually appears as a 'v' top. Once the stops are run, the market generally moves in the opposite direction.

How Market Volatility Can Help You Establish Your Stops

As market volatility increases, the stops should be moved further away from the current market price. Keep an eyeball on the Volatility Index ($VIX). The higher the $VIX, the further away from the existing market price you should set your stops. This simply makes good judgment, as otherwise random moves will cause the stops to be hit. Try to avoid placing your stop where other traders have placed theirs. An abundance of stops at one price will generate panic buying or selling and you will receive a appalling fill as a consequence. - 31987

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Day Trading Tips From The Pros - Time To Cash In!

By Grant Dougan

Becoming a day trader is becoming an increasingly hot means for the average person to earn money. You will find individuals who treat it as a full time occupation while others treat it as a means to earn some extra cash. With its outstanding earnings potential and the charge it gives you, it's no surprise more people are diving into day trading opportunities.

But, day trading isn't an automatic entry to quick and easy money. You'll need to know how to go about it the right way. Day trading does carry risks, but knowing how to mitigate those risks and make wise choices will provide you with the greatest chance at increasing your gains, and minimizing any falls.

Obviously, buying stocks low and selling when the price is high is how you make cash in the markets. Of course, the big question is - how can a person know when to purchase and sell?

Below you will find some key tips for you to earn money with day trading.

Prepare ahead of time. You need to be alert and ready before making your first transaction. You won't need to spend lots of time doing this, but visit a couple of key news sites you read and it's a good choice to follow a few companies closely. Having an overall picture of the market, including a few well known shares, prepares you to make sound financial decisions.

Try not to focus on stocks that have little price movement. In day trading, cash is made by buying and dealing stocks that are frequently changing in price. When day trading you are dealing shares every day so you must be involved with stocks with daily price shifts in price each day.

Brush up on your quantitative analysis skills. Being able to interpret financial data and reports is important to being a profitable day trader. Dont be scared - you won't need to become a mathematics genius - but you will discover some basic computations that you will need to have a grasp of.

Always remain poised and steady. Those who make the most money have the ability to control their emotions at any point in time. Whether someone is overly pumped up about a big win, or largely disappointed about a loss, both of these responses can hinder your ability to stay in the game, take educated actions, and keep a clear head.

If you use the discussed trading tips, you could be on your way to excellent income by day trading.. When you use the right tools and resources, you can take advantage of the unbelievable earnings potential that day trading makes available to you. - 31987

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How to Make Best Use of Florida Retirement Communities

By John Lawole

Many American retirees choose Florida retirement communities as a good place to enjoy their life-accumulated savings. This state does indeed provide lots of opportunities but, in reality, things are not as bright as you may expect. The real estate market has greatly increased in this part of the US, although the financial crisis has slowed down the boom. Florida houses are a lot cheaper now, yet, too eager retirees should be careful in their selection of Florida retirement communities.

The truth is that Florida has more top retirement communities than any other state or country in the world. The proximity of the ocean and the warm climate make towns and villages in Florida a favorite destination for many retirees. The costs in different Florida retirement communities vary depending on the neighborhood. To count just a few popular towns for retirees, we ought to mention Gainesville, Tallahassee, Venice, Stuart, Abacao or Key West, but there are many more.

As compared to other states in the country, Florida has no income taxes, which makes Florida retirement communities all the more appealing. Property taxes are also kept at a decent level, which has determined many American retirees to relocate to this part of the country. Nevertheless, Florida retirement communities are not part of any certification program.

Residents of the states have more advantages in choosing Florida retirement communities as compared to people from other parts of the country. The elderly are not so eager to change their lifestyle, which is why many resent relocation and prefer to remain in their same home. Some retirees are also unhappy with the possible climate changes and the distance from the family, which makes relocation to Florida retirement communities a lot more difficult.

To sum up: Florida retirement communities have different peculiarities. You can check Internet reviews, read books and magazines, but the even better alternative is to actually visit the town or community before moving. Moreover, find out whether there are any criteria that you need to meet in order to make the move and become a Florida retiree. - 31987

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Make Money In The Stock Market - Pros Reveal Their Secrets!

By Grant Dougan

Becoming a day trader is becoming an increasingly popular way for people to make an income. There are people that use day trading to supplement their regular income stream, and others devote all their time to making money with day trading on its own. With its sizeable profit potential and the charge it provides, it's not surprising more and more individuals are trying out day trading.

Naturally you can't just dive in and earn giant cash without understanding what you're doing! Day trading has some risks, but learning the best way to manage those risks and make smart choices will give you the greatest chance at maximizing your gains, while minimizing any losses.

The way in which you earn cash with day trading is to purchase low, and sell high. Obviously, the big question is - how can a person know when it's time to buy stock and sell?

Employ these important day trading secrets to maximize your money-making potential.

Read the news and stay informed about the markets. You need to keep abreast of developments in the markets, like buyouts, takeovers, and financial reports for major organizations. You need to have a sound idea of what is going on in the markets.

Don't waste time on shares with little volatility. Changes in share prices are the key for day trading. When day trading you are dealing shares each day which means you must be invested in stocks with daily price changes in price every day.

Increase your math skills. You'll need to be able to analyze trending and financial data quickly. There's no need to be a master mathematician, but you need to understand what the financial data mean so that you can make fast, sound assessments.

Develop plenty of guts. You should keep your emotions level to not let them to alter your assessments. you must hold a clear mind at all points.

You might not become rich right away, but using these hints will get you on the path to earning some cash with day trading. There is a lot of cash to be gained with day trading and with a small amount of work, you can be benefiting from this exhilarating job. - 31987

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Best Retirement States - Facts You Should Know

By John Lawole

The quest for the best retirement states sounds like a good idea for people concerned with finding a great place to retire to at the end of the career. Lots of debates and controversies exist about tax-foul and tax-friendly conditions, but will anyone relocate just to save money? The location of your home greatly influences the share in the local taxes, which is why the entire retirement lifestyle may be about solving real estate problems.

The 'no tax heavens', this is one other name for the best retirement states, because people pay nothing or very little for their retirement income. There are other worries and problems that bother retirees besides income. Consider homeownership taxes and the sales taxes before deciding to relocate, because you may be treading on thin ice. Maybe some of the best retirement states have a friendly policy for the retiree's tax income, but the real estate taxes could be exorbitant.

People make the mistake of focusing too much on income taxes when searching for the best retirement states, but it can cost them dearly; a closer look at property taxes may be enlightening. There is plenty of information on the Internet and with central organization offices where you can inquire about the conditions not only in a certain state but in a specific neighborhood as well. Even books have been written on the topic of America's best retirement towns.

Some online web pages also allow people to compare the cost of living, the climate, the criminal rate, the access to leisure and cultural activities in parallel with the tax condition. In many cases the figures you see in charts are tax estimates serving as a model to prove what the situation would be like in a certain hypothetical condition. Plus, do not overlook the cost of utilities that is sometimes ignored. These being said, it becomes clear that the classification of the best retirement states is neither simple nor easy.

Statistically speaking there are parts of the United States that deserve the name of best retirement states, but in day-to-day life things may be less clear. There is a very small number of Americans who choose to relocate to some distant part of the country. Retirees find it difficult to leave family and friends behind, not to mention the effort of coping with new challenges brought by a possible re-accommodation to a new living environment. Whatever we may think, it's easier to say than do, and lots of people face high income tax rather than leave their home! - 31987

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New Method Uncovered On How To Make Money In The Stock Market On Thursdays

By Steve Wyzeck

There is something supernatural about two days of the week that can make you a good amount of cash day trading if you know about it.

The model is so grueling to compute that most traders need never heard about Mondays and Thursdays. In actuality, the only way I was able to spot this pattern was by going over 10 years worth of old numbers.

To measure a pattern like this, you have to analyze the standard deviation from the average to observe if any pattern or anomaly whatsoever emerges. You then need to do this in both bull and bear markets.

The end result of analyzing 10 years worth of numbers reveals a small pattern on Mondays and Thursdays that you can bring into play to make a huge amount of cash day trading.

Superb Monday Strategy For Making Enormous Profit

If you had to single out just one day to buy, Monday should be that day if you are in a bull market.

Not every Mondays present brilliant buying opportunities, so you should be vigilant when looking to buy on a Monday. To start with, it helps if you are already in a bull market. This is not challenging to establish. Next, you need the recent market action, as measured by the one- and five-day strength index, to be robust, with a percentage over 50. Third, you want the market to exhibit strength at the close of trading on the previous trading day, usually a Friday. If the prior day closes on or near the low, odds are the market will go on lower on Monday rather than going higher. The one-day strength index will provide you a nice reading on how bullish the market was on the preceding day. Finally, you want a steady-to-higher open to happen on the Monday buying day. A sharply higher or sharply lower open on Monday presents valid troubles. With a sharply higher open, the marketplace may possibly spend the rest of the day trading down to more levelheaded levels. With a sharply lower open, the market may go on to sell off the rest of the day. A higher open is always fine for buyers.

Tremendous Thursday Tactic For Making Big Profit

Thursdays have a tendency to be the weakest day of the week in bull markets. Throughout bear markets, Thursdays have a tendency to rally as the counter-trend day.

The ultimate pattern for selling on Thursday is subsequent two or three days of rising prices-the classic 3-day pattern. The ideal pattern for buying on Thursday is subsequent two or three days of declining prices. - 31987

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How 403b Retirement Plans Might Benefit You

By John Lawole

403b retirement plans create the savings alternative to 401k plans but for work categories such as self-employed ministers, public schools employees and the employees of tax-exempt organizations. There are several advantages in using 403b retirement plans and they apply to both employers and employees, despite the limitations that indeed accompany any retirement system in general.

First of all, some companies use the existence of 403b retirement plans as a means to hire valuable professionals. Then, the contributions to the plan can be written off the taxes both for the hiring company and the employee that contributes money. Tax deferment is thus possible for decades, while your account savings increase. It is only when you start withdrawing cash that taxes will be paid for the funds.

Another good part about 403b retirement plans is that you can get loans against this money when you are in a dire need of cash. However, if you make this kind of loan, your taxes could be seriously imbalanced. And this is where limitations of such retirement plans begin. In addition, you can only contribute a maximum amount of money as part of the 403b retirement plans per fiscal year. Plus, you can enjoy a total maximum contribution only if the company you work for has incredible profit.

People can start withdrawing money on the basis of their 403b retirement plans when they turn 59.5 years old. There are penalties charged before this age. Otherwise, all you pay is the tax for income according to the withdrawn sum. For younger users, there is a 10% penalty on top of the income tax. Another difference in the working of such plans applies to the employees that also own more than 5% stock. The government thus prevents very wealthy people to accumulate large amounts of capital for which they don't pay taxes.

Depending on the life expectancy, you will have all the savings in the 403b retirement plans distributed evenly. The IRS also charges penalties for excess accumulation if you do not start to take the required minimum distribution, then you will be charged with a very high tax. Read more on what tax savings you can make with the contribution to the 403b retirement plans and then see what dividends, capital gains and interests you can earn in the 403b account. - 31987

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Tips On How To Choose The Right Investing Options

By Eno Williams

A lot of individuals want to try their hand at investment, mostly as a means to create a nest egg for their relatives in the future and there are several ways to carry out this. One of the most clear ways for investment are the stocks and share markets, however there are several other practicable alternatives too, which would be of relevance to you. Any one of these may be promising for the future, provided you have the right mental make-up to deal with them. While this piece cannot provide sufficient space for covering every detail as regards to this huge topic, this can in the slightest, provide you some type of rule of thumb involving possibility.

Stocks and mutual fund investments have always been beneficial, but prior to doing this you ought to do a large amount of study on the corporations where you wish to invest in. If you are searching for short term gains (long term too), in that case the stock exchange is the place to do this but it is also where everyone can end up with egg on their face from time to time! Of course if you are investing in real estate, you are more likely to get good gains however they will take some time although it is a much safer alternative. Several people purposely buy a property that requires huge remodeling as they can buy them for a lesser amount of money but the earnings when they are sold can be massive although this does need a sizeable amount of work to be carried out first. In the event that you discover this option appealing, do some investigation given that there is more than what is mentioned here, which is not the case with the next option we will discuss.

The best way to get started is by doing it on the internet and it is also the fastest emerging division of investment as it can be carried out by just about anyone using their computer and internet connection. For online trading, you have to check the company's record, their growth and performance background before you putting your money with them, nevertheless the whole of this could be done really quickly. This type of investment requires some estimation and someone with a great deal of built-in discipline would be good at it, as several folks goes on blindly bidding till they discover that more money is lost than gained.

Whereas some folks go about their venture depending solely on Lady Luck to smile on them, whereas others who are very diligent, work late to analyze all they should to understand to make their investment ideas become a reality with dream returns. Do not turn dealing into a something like to the turn of a roulette wheel because if you do, you will without doubt lose while all that was necessary was some due diligence of the markets.

Employ the Internet to your benefit where there are abundance of forums and sites devoted to offer you tips on wise investments, learn from these as well as others' experiences. I personally know several folks who have trusted in this form of investing and have turn out to be prosperous, and there are some who have lost all they had. - 31987

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How To Secure Your Financial Future Through Investing

By Ejima Pitt

The last few years have seen many changes in the economic world where many 'so called' economically reliable areas have show to be risky however we all must guarantee our economic future is secure. It is as well impossible for people to be able to work for the rest of their lives either so investing is the way to offset future financial problems.

There is nothing wrong by having short term money in a low interest investments account but you cannot anticipating these to multiply at a rate that will provide for the future. This is the how several of us prepare for the shorter term to acquire things that require preparing for in the immediate to near future and this dictates where the money will be invested for the best financial gain.

Large amounts of cash could be earned fairly instantly if you are ready to invest in a higher risk area. If you are saving for the far off future, such as retirement, you may want to make safer investments that increase across a longer frame of time.

Long term economic independence and guarantee requires time and take into account that you will not at all times be able to work thus the earlier you begin this the better. You besides cannot rely on the Social Security system to do what you expect it to do and as we have seen with Enron, you cannot inevitably rely on your company's retirement plan also so investing is the key to guarantee your own economic future, nevertheless you should make prudent investments!

Investing for your future still has ups and downs which can be lessened just as in a match where the victor is not all the time a guaranteed thing. Provided you understand the regulations and have set up a course of action for your investment you should give yourself a better prospect of success. If you know precisely how much money you will require when you retire, it is just a matter of planning where to invest to meet that need.

Every type of fund has various areas that could be used to suit the needs of the investor and as such makes all fund very individual. The most prominent of these areas is the stock market with literally hundreds of thousands of companies available to speculate savings in. Wise people know that this is a complicated game where the rules must to be studied before play commences so much of study is required nevertheless that will make the difference of losing terribly or winning dramatically. This is where a plan comes into play but keep in mind your current circumstances must be stabilized ahead of you thinking of investing for your future. - 31987

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Here's How Anyone Can Learn Forex Trading To Make Money

By Grant Dougan

Plenty of individuals have started using currency trading as a way to bring in some more cash. Absolutely anyone that has a live internet connection can engage in forex trading online which has caused a rush of people to enter the markets with aspirations of earning an additional income.

A lot of the rage currency trading has been because of just how many people are using it as a self employment opportunity. As you can imagine, as more individuals enter the industry, it's only natural that plenty of people want to know the secrets about how to make money. So, hype aside, let's look at how forex trading works.

Cashing in with forex trading is similar to trading stocks: You need to buy at low prices and sell high. To illustrate, the dollar from Canada is worth about 75 cents US at this moment. If you think that the Canadian dollar is going to jump in value, then it's time to buy it now and then unload it in the future.

Currency traders take a lot of time studying currency pairs (the Japanse Yen and Canadian dollar is an example of a currency pair), searching for signals or cyclical shifts in comparative value to determine buy and sell orders and make some money.

Currency Traders will also utilize automated trading softwares that automatically them see profitable trades. Every professional will utilize this type of program as it will increase their profits by a huge amount.

Think of your softwares as an assistant; you'll see lots vendors touting their top secret software, most of these forex programs are utilizing similar data feeds - what differentiates them is the programmer behind them.

Althought this may sound a touch perplexing or technical - especially for anyone that is new to forex trading. You can be happy that these programs have been designed - usually by a squad of professional traders and mathematicians - so the programs can analyze the data and spot juicy trades that anyone with the program can make.

If you're someone thinking about getting into currency trading, it's you'll want to pick up a forex trading program like this so it can help you make profitable trades right away. Typically, these programs can produce some cash for the trader on it's own. This will give you extra time to look into the forex markets and later on you will use combo of the trades the program signals and the trading ideas you come up with on your own based on your info.

Currency traders all share a common characteristic - they can handle taking risks and can handle the some swings. You'll find that many embrace this part of the job! Obviously it calls for a specific type of midset, but if you have what it takes you can be rewarded with big profits.

Something that makes currency trading appealing to many traders is the fact that even if a currency drops in relative value, it's really never going to fall all the way to zero. This is a significant difference over options trading or the stock market. - 31987

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How To Trade Stocks Appropriately Throughout Repeatable Patterns

By Mike Smith

This time, the cyclic market trends were a kaput. Most simply did not pan out.

But, that really is nothing novel. If you do a 25 year graphic representation on the major indices, you will find out that a number of years simply don't happen as expected. But what you will also appreciate is that in most years, they generally do.

What does that indicate for us going into 2010?

It means that 2009 was one of those odd years where seasonality did not work meaning that in 2010, seasonality will most likely work again.

The opening seasonal trend will be upon us in just a couple of weeks, so let's do a fast review.

The stock market has quite consistent and dependable recurring trends. You should know the most prominent cyclic trends, given that this information can stop you from being overly bullish at a cyclic peak or extremely bearish at a seasonal low.

In a nutshell, the general trends favor a decline in early January (maybe profit-taking selling), followed by a mid-January rally. By late March or early April the market often reaches a peak, followed by a jerky market in mid-April, perhaps related to the April 15 tax deadline. The early summer months are regularly characterized by a midsummer rally, culminating in a market top in late July or early August. September and October are normally down months in the stock market (witness the 1929 Crash and the 1987 October decline), with the lows occurring sometime in late October (a good buying opportunity?). The trend into the end of the year is typically bullish, with the first two weeks in December characterized by a healthy market. The Christmas holidays are normally gentle, with uneven and thin markets. There are continually exceptions to these genuine trends, but the general pattern is extraordinarily consistent.

Print this article if you have to and stick it near your trading monitor. I reason that because 2009 was a unusual bust for the majority of the seasonal trends discussed above, 2010 will be an on year. One of the biggest errors amateur traders make is that they get sniped by more superior fighters who know the seasonality trends. - 31987

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Forex Trading Brokers

By Jan Baros

One of the key factors that affect a trader's experience while using currency market is choosing a trading broker that best adjusts to its needs, not only in practical terms, involving the actual trading procedures considering orders placement, platforms, spread and leverage, but also concerning the procedures needed to open and maintain a trading account, deposit and withdraw funds, and bureaucratic circumstances that may vary according to a trader's country of permanent residence.

Multiple reasons are crucial for a trader to choose his first Forex broker or to change its current one, and a good option for those involved in online trading is tracking the broker's reviews through Forex trading blogs, where not only actual brokers' specifications are available, in a way that the prospective trader can quickly choose among a few variants that eventually fit to his needs, but also acquire information regarding other traders' experiences with the mentioned brokers, an important tool that regulates abusive behavior adopted by a few number of fraudulent brokers.

As the online Forex market continues to grow exponentially every year, the number of Forex trading brokers has increased considerably, providing traders with a significant range of differences among the available brokers, especially regarding methods of deposit/withdraw, a key-factor to most of traders since different countries regulations and also personal preferences are likely to influence a trader's choice concerning funds transfers.

For newbies, in most of cases a Forex broker that requires a less significant sum of money to open an account plays an important role, as even if using a demo is the most recommended way to start up on Forex, once a trader goes live, opening a real trading account, an important number of them prefer to make a less substantial first deposit.

A broker's availability regarding the Forex trading platform and facts concerning the actual process of trading, such as leverage, spread, stop-loss/take-profit settings are likely to be taken into consideration by somewhat experienced traders, as they often operate using trading patterns that may be not possible in every currency trading broker available online.

Forex trading blog is an interesting resource to enhance a trader's process of choosing a Forex trading broker, and should be considered not only in the starting process of online trading, but also as a tool to keep a trader up to date to new trends in currency trading, a dynamic market where information counts strongly to a trader to achieve success in his online investments. - 31987

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Why It Is Important To Invest And Secure Your Financial Future

By Eno Williams

The last few years have seen many changes in the economic world where many 'perceived' economically safe areas have demonstrate to be unsafe but we all ought to guarantee our financial future is protected. It is as well not possible for people to be able to work for the rest of their lives either as a result investing is the way to offset future financial difficulty.

There is nothing wrong with having short term money in a low interest bank account however you cannot think these to multiply at a rate that will provide for the future. This is the how most of us prepare for the shorter term to acquire things that require preparing for in the immediate to near future and this dictates where the money will be invested for the best financial benefit.

Large amounts of cash could be earned relatively quickly if you are willing to invest in a higher risk area. If you are saving for the far off future, such as retirement, you would need to make safer investments that grow over a longer frame of time.

Long term financial independence and security requires time and remember that you will not every time be able to work consequently the sooner you start this the better. You also cannot rely on the Social Security system to do what you expect it to do and as we have seen with Enron, you cannot of necessity rely on your company's retirement plan either so investing is the key to insuring your own financial future, however you must make smart investments!

Investing for your future notwithstanding has danger which could be lessened precisely as in a game where the victor is not always a guaranteed thing. Provided you know the system and have set up a strategy for your investment you should give yourself a better prospect of success. If you know precisely how much funds you will require when you give up work, it is just a matter of planning where to invest to meet that need.

Each category of fund has separate areas that can be employed to suit the needs of the investor and as such makes each fund extremely individual. The most famous of these areas is the stock market with basically hundreds of thousands of companies available to speculate savings in. Shrewd individuals understand that this is a complicated game where the system need to be learned prior to play commences so a good deal of learning is essential however that will bring about the difference of losing terribly or winning dramatically. This is where a strategy comes into action however keep in mind your current circumstances should be stabilized before you thinking of investing for your future. - 31987

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Green Energy Stocks

By Ahmad Hassam

Are you aware of the fact that the peak of the global oil production (all liquids, including unconventional oil) will peak in the next few years. Do you know China is the largest producer of coal? Coal production n China would peak somewhere around 2010-2020.

You must be thinking what to do every available source of energy seems to be peaking in the near future? The global peak of uranium production lies somewhere around2025-2050. The global peak of natural gas production lies somewhere around 2025!

But there are many safe and environmentally friendly methods to generate the energy required. Uptill now these methods had been ignored maybe because they were a bit expensive. They were expensive in the sense that these methods factor in the external costs that were previously being ignored. Do you know this fact that the US Department of Energy has estimated that there is enough available offshore wind energy of the coasts of US that can nearly cover the current US electricity capacity? So what will fill this void in energy production in the coming decades?

If every bulb in the US was replaced with an energy efficient fluorescent lamp, enough energy could be saved to shut down around 100 power plants. If all the care in US were hybrids by 2025 that would roughly reduce 80% of the US oil import.

So the solution is already there but it requires investments which are right now not forth coming. This will soon change as the global supply of oil starts to dwindle. The solution is already there and as the end of fossil fuel nears which is only a decade away, more and more alternative energy solutions will be used to generate cheap energy. Enough power could be generated for the entire US by covering only 9% of Nevada desert with parabolic trough systems. This is something like a plot of land 100 by 100 miles.

This is something that is bound to happen. The supplies of fossil fuel are finite and will be exhausted in the near future. You might have seen only a glimpse of that last year in 2008 when crude oil prices jumped to around $150 per barrel.

This prediction is based on our insatiable energy consumption and the lack of conventional supplies to meet the growing energy demand. This is most probably the safest long term bet that you can make in the long term. There is little doubt that companies operating in the green energy sector will ultimately become the major players in the overall energy generation and transportation mix of tomorrow.

Exactly one hundred years back, the oil century started. It was with the advent of the modern automobile that oil became a global necessity. Imagine Henry Ford in 1909 asking you to invest in his Ford Motor Company that is about to mass produce a horseless carriage. Keeping in view the above facts, investing in green energy stocks in the best long term investment that you can make!

But many folks in that year of 1909 were skeptical about Model T success. This is now 2009, exactly a century has passed. Do you think investing in green energy stocks is a bad idea? He tells you that this invention could change the entire landscape of the country. Knowing everything that you know right now with the power of hind sight with you, you will definitely say yes. - 31987

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Developing Strategies in Forex Trade

By Bart Icles

Years ago, forex trade was only available to central banks, governments, commercial banks, investment banks, and other similar institutions like hedge funds. These days, the foreign exchange marketplace is now available to practically anyone who wants to participate in trading currencies. Even stay-at-home investors can now participate in foreign exchange trading. With the forex marketplace now open to both small and large investors, it is also presently offering a variety of venues for an investor to trade into. A forex trader can participate in the exchange of options for futures, currency futures, largely unregulated over the counter or OTC transactions, and many others.

With the rise in the popularity of foreign exchange trading, being able to participate in forex trade and ending up successful has become quite a challenge. As a forex trader, you must be able to determine which venue you would want to participate in and which instruments you would want to trade. Once you have done so, you will need to develop a well thought out trading strategy before you can even think about putting any of your trading capital at risk. You should also consider your exit strategies, as well as your other risk management tactics. You will be in great need for these once the trade has gone against you.

There are lots of strategies that you can potentially use and one way to organize them is through grouping them into directional and non-directional approaches. Directional strategies are those that take long and short positions in the market, while non-directional strategies are market-neutral strategies that you can use.

Most investors who participate in forex trade are familiar with directional or net long/net short approaches. Net long strategies are generally profitable in rising markets. On the other hand, net short strategies allow investors to realize profits in falling markets. There are lots of ways by which trading can be done using directional strategies, and they can be further summarized into trend-following strategies, moving average crossover systems, breakout systems, and pattern-recognition strategies.

There is not one strategy that will work for every investor. Forex trade is unpredictable in nature so it helps to learn how you can quickly adapt to changes. In this manner, you can minimize the risks that threaten your investments, and you will be able to increase your chances of ending up successful in trading currency pairs. At the end of the day, what is important is that you are able to learn how to understand the different signals going around the market so you can better develop the trading strategies you will use. - 31987

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Index Options Investing (Part II)

By Ahmad Hassam

The duller the market, the lower the index options premium. Well it depends on the expectations of the traders whether the market will move sufficiently in the near future for them to exercise their buy or sell rights. The more volatile the market, the higher then index option premium!

You can find many options types of options contracts. You will find futures options, currency options, stock options, ETF options and so on. Options offer investors far more trading strategies as compared to futures. Such strategies can range from highly speculative to highly conservative. Options are a far more basic instrument than the ETFs and futures. You can easily replicate any ETF or futures contract with an option but the reverse is not true.

Of course for anyone who buys an options contract there should be someone to sell the options contract to make a complete transaction. Now the seller of a call options believes that the market will not move sufficiently up in the near future so he/she can make money by writing a call options contract and selling it to someone who believes the maker will move up.

So in a way, buying and selling of options contracts make options trading a zero sum game. Either the market will move up or it will not. Either the option seller will win or the options buyer will win. The development of the stock index futures and the index options was a major development in'80s for investors and money managers. The buyers of the put options are in a way insuring their portfolio against possible market decline but who are the sellers of the put options. They are primarily those investors who are willing to buy those stocks but only at lower prices.

So in a way, buying and selling of options contracts make options trading a zero sum game. Either the market will move up or it will not. Either the option seller will win or the options buyer will win. The development of the stock index futures and the index options was a major development in'80s for investors and money managers. The buyers of the put options are in a way insuring their portfolio against possible market decline but who are the sellers of the put options. They are primarily those investors who are willing to buy those stocks but only at lower prices. Options are an important component of any money manager portfolio. Many hedging strategies now depend on options.

ETFs give you the familiarity of the stocks but like index futures much higher liquidity and superior tax efficiency. The Exchange Traded Funds (ETFs) gave the investor still more ways to diversify across all market with very low costs.

Index options give the investors the ability to insure the value of their portfolios at the lowest possible prices and save on the transaction costs and taxes. - 31987

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Investing In Stocks

By Ahmad Hassam

Every investor wants stock prices in his/her portfolio to go up. What would make a stock rise so much? The whole point of investing in stocks is to choose one that has the greatest chance of a rising share value. Don't we all look for a stock that we could buy for $10 and later on sell for $300 per share? Well, how can we proceed to accomplish such a feat?

So if the company does well, its stock will go up in price and if the company does poorly its stock will go down in price. Buying a stock is essentially buying a small piece of the company and its future potential for growth and profits.

The marketplace is in fact buyers and sellers, individuals and organizations that want to buy stocks or sell them. Now why does the stock goes up and down with the performance of the company. Actually the real force behind the stock rise and fall is the market place.

This buying and selling of stocks can only take place in exchanges like the New York Stock Exchange and over the counter markets like NASDAQ. If there are more buyers of the stock, its value will go up and if there are more sellers in the market, the stock price goes down.

Now it doesn't mean that if the company does well and is showing good profits and earnings, its stock price will go up. Sometimes you will find that the company does well and is posting good quarterly earnings but still its stock price goes down. What's the reason behind this?

Everything in the markets is based on the expectations. Stock price goes up and down because of what the buyers and sellers expect will happen with the company in the near future. In reality the price of stock depends on the investor's expectations. The price of a stock goes down because there are more sellers than buyers. So why is it so? The stock price does not go up or down just based on the company's present performance. What can be the reason behind this unexpected stock price plunge?

This was what can happen in the short term. In the short term no one can really predict the behavior of the market with a degree of accuracy. However, the performance of the stock and the performance of the company over the long term have a logical relationship. In the short term, the behavior of the stock price is irrational and it can behave in crazy and illogical ways.

Stock investing is all about doing good research before you make your final decision to invest in a particular stock. Focus on finding companies that are strong, well positioned in the right industries and have solid fundamentals like a good management, good product, good service, growing industry, rising sales, increasing profits and so on. The bottom line is don't worry about the short term gyrations of the stock price. Sometimes the industry and the economy matters more than the company. Picking a stock doesn't happen in a vacuum. Understanding the company's industry and the overall economic environment is critical to stock picking process. It would be interesting for you to know that Warren Buffet, the world's greatest stock investor has over the years been a value investor. His famous investments were in insurance and manufacturing. He buys companies that have fallen on bad times but inherently their business model is sound, just maybe need a good management. - 31987

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Index Options Trading (Part I)

By Ahmad Hassam

The options market has caught the fancy of many investors and this is not surprising. The beauty of options is embedded in its very name. You have the options but not the obligation to buy or sell stocks at a given price by a given time. Now for options buyers this option unlike futures limits their maximum liability to the option premium they had paid at the time of buying the options contract.

Everyone knows the terms S&P 500 Stock Index and the Dow Jones Industrial Average (DJIA). These are two world famous stock indexes. Infact every stock exchange around the world ahs got a stock index associated with it. You must have come across the term Index Options. So what are index options? In'78, Chicago Board Options Exchange (CBOE) began options trading on popular stock indexes such as the S&P 500 Stock Index. The CBOE options trades in multiples of $100 per index point. This is much cheaper than the $250 multiple per index point for the S&P futures contract.

An index option allows the investor to buy the stock index at a set point within the given time period. Let's take an example. Suppose the S&P 500 Index is at 1100 points. You have a bullish opinion of the market and are of the opinion that the S&P 500 Index will go further up.

Now what this means is that if any time for the next three months you decide to exercise your call option, you will get $100 for each point the index is above 1150. So you decide to purchase a call option at 1150 for three months for 50 points. In other words you paid an option premium of $5000.

So when an options contract loses value, you only lose the premium that you had paid while buying that contract. In that case you will only lose the premium of $5000 that you had paid to buy the call index option. Now, 1150 is the strike price of the index option. In case the S&P 500 Index does not rise above 1150, you can simply decide to not exercise your call option.

So for you to make a profit with this call option, the S&P 500 Index will have to rise above 1200 point within the next three months otherwise you will lose your premium. Contrast this with S&P futures. Call options are considered to be bullish.

In case the S&P Index had fallen to 1100 point, you would have recouped your options premium. Put options are considered to be bearish. A Put Index Option works in exactly the same way as a Call Index Option except that you make profit when the stock index goes down. If you had bought the put index options instead of the call index option in our example above, every point below the strike price of 1150 would have given you a profit of $100.

But the most important factor is the expected volatility of the market. Now the option premium that you pay is determined by the market and it depends on many factors like interest rates and dividend yield. - 31987

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Commodity Exchange Traded Funds

By Ahmad Hassam

Commodity investing may become the hottest investment in the first decades of the 21st century. Right now gold prices have broken the $1000 per ounce barrier for the first time in history. It is predicted that this upward trend in gold prices will continue for the foreseeable future. Oil prices have also started reaching $80 per barrel and it is expected that oil price will soon be above the $100 per barrel mark. It may eventually reach the $200 per barrel barrier. If you are interested in investing in commodities than you can invest in a commodity mutual fund! Many people are not aware that commodities as an asset class has a lot of potential especially in the 21st century. It is being predicted that the 21st century belongs to the commodities.

This is the simplest way for you to get involved in investing in commodities as the mutual fund portfolio management will be done by a professional manager and you have to do nothing. Just buy the shares of the commodity mutual fund and let its NAV appreciate before you can sell for a capital gain.

There is another investment vehicle that is really hot right now with the public. ETFs started off some three decades back but became highly popular as investment vehicles in such a short time. Now, you must have heard about the Exchange Traded Funds (ETFs). ETFs are really hot investments these days. There are a number of ETFs that invest in commodities.

Driven by the growing demand of commodities by the investors many financial institutions are now offering Commodity ETFs. Now the good thing about investing in ETFs is that they give you the diversification benefits of a mutual fund with very low fees something like 0.7% as compared to 2-4% of the mutual fund.

So unlike a mutual fund whose net asset value is calculated at the end of the day and the shares of mutual fund cannot be traded during the day, you can go both long or short on ETFs all the time. Something you cannot do with a mutual fund! ETFs have the added benefit of being able to trade like stocks giving you the powerful combination of diversification and liquidity.

ETFs are mostly constructed to mimic some market sector index. Sector ETFs are a hot investment right now. Now, you can find thousands of ETFs in the market on different market sectors, stock indexes, currencies, commodities and so on. This diversification plus liquidity benefit makes an ETF a better investment tool as compared to the mutual fund and the stocks.

The Deutsche Bank Commodity Index Tracking Fund is listed on AMEX and tracks the Deutsche Bank Liquid Commodity Index. This index is based on a basket of six commodities: light sweet crude oil, heating oil, gold, aluminum, corn and wheat. The first Commodity ETF in US was launched by Deutsche Bank in the start of 2006.

As always what you need is an ETF that tracks an individual commodity. Now, every month a new ETF gets launched. There are a number of Commodity ETFs that track individual commodities like crude oil, gold and silver. Do your research on Commodity ETFs, you may find a good investment. Now the ETF of our example invests directly in the commodity futures contract. If you have trade futures than you must know that futures are highly volatile. Now one of the downsides of investing in this Commodity ETFs is that it can be fairly volatile as it is based on commodity futures contracts that get rolled monthly. Another downside to this Commodity ETF is that it is based on a basket of six commodities only. - 31987

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Commodities Mutual Fund

By Ahmad Hassam

A mutual fund is a fund managed by an investment professional on behalf of the fund investors. Now, mutual funds by law are constrained to follow conservative trading methods. Mutual funds cannot engage themselves in such sophisticated and risky trading techniques like arbitrage trades, long short strategies and distressed asset investing.

If you want to have a low risk investment in commodities than you should think about buying shares of a commodity mutual fund. There are many different mutual funds like stock funds, bond funds, currency funds and even country specific mutual funds. But there are a number of mutual funds that specialize in investing in commodities or commodity related products.

Now some of these commodity mutual funds invest in derivates based on commodities such as futures contracts and options based on futures contracts traded on the major exchanges in New York, Chicago and so on.

So how can you invest in these commodity mutual funds? After doing your research on these commodity mutual funds, you can select one that you consider to fit your investment objectives, simply write a check and purchase the shares of that commodity mutual fund either through your broker or directly through the fund providers. There are commodity mutual funds that may invest in companies that process these raw commodities such as energy companies and mining companies. So you will have to do your research in find the right commodity mutual fund for your objectives.

Now I said, after doing your research. The first step in your research should be to compile a list of questions like what is the fund's investment objective, what securities does the fund invest in, who manages the fund, what kind of strategy does the fund uses, what type of people invest in this fund, what are the risks involved in investing in this fund, what is the funds track record, what is the funds fees and expenses and so on.

Once you have your list of questions, see if the fund prospectus answers these questions satisfactorily. The good thing is that most of the mutual funds send their fund prospectus free! Now the two main commodity mutual funds are the PIMCO Commodity Real Return Strategy Fund and the Oppenhiemer Real Asset Fund. Now PIMCO Commodity Real Return Strategy Fund (PCRAX) is the largest commodity mutual fund in the market with $12 Billion of assets under its management. PCRAX tries to mimic the performance of Dow Jones-AIG Commodity Index by investing directly in commodity linked instruments like futures contracts, forwards contracts and options on futures.

Now as always Morningstar website is a very good resource for doing your research on commodity mutual funds. It can give you a lot of information about these commodity mutual funds such as the latest news, updates, load charges, expense ratios and other useful key data. Morningstar also have got a five star rating system that can be really helpful to you in picking the best commodity mutual fund. - 31987

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The Forex Trading Community

By Jan Baros

Everyone that starts trading on Forex has been introduced to it by some means of communication, may it be friends that are trading, online networking, or plain advertising. Besides placing buy and sell orders, being a part of the Forex environment it's a much more complex system that involves how traders consolidate information to improve their skills, be up-do-date with market news and trends, relate to other traders in order to discuss technical and fundamental analysis patterns, etc.

From selecting a broker to sharing trading experiences it has always been essential for traders to be integrated in the Forex communities online to improve their skills and master new Forex strategies from multiple online Forex sources that are available.

A beginner who is allured to the universe of online currency trading often is eager to start trading but at the same time cautious to take the first step, as we all know, before injecting capital in any type of investment involving risk, reasonable individuals would rather get the biggest amount of information available before, in the Forex specific case, creating a live account.

Many sites offer relevant information for traders, especially for those willing to chose a broker that fits his needs, and terms like leverage and spread become then familiar for the initiated trader. For a number of traders, minimum deposit and deposit/withdrawal methods are also a key-factor while choosing a broker.

Once the trader is active, regardless if on a demo or live account, several blogs provide data regarding technical and fundamental analysis, while a number of news orientated sites inform and explain how economic events affect currencies markets throughout the world, being those sites of considerable relevance since the Forex dynamism often requires multiple sources to offer traders accurate data to achieve the biggest successful trades ratio possible.

Another tool of extreme relevance for traders, experienced or not, are Forex forums concerning currency and other sorts of online trading. These resources often provide information of different sorts, ranging from trading strategies to alerts regarding possible scams, and are likely to speed up traders' performance and synergy if used wisely.

As part from the previously mentioned resources, often contacts are exchanged among traders that use Forex community online tools, offering the possibility for traders to discuss on chats their trading patterns, news and events, and also information regarding brokers, promotions, and other topics regarding online trading.

The relevance of networking among Forex traders plays a main role not only for sharing knowledge and improve accuracy to place orders, but also to regulate the whole system regarding online trading, ranging from how brokers operate and provide supports to the user and how events move currencies' attractiveness and volatility. - 31987

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Commodity ETFs

By Ahmad Hassam

Many people are not aware that commodities as an asset class has a lot of potential especially in the 21st century. It is being predicted that the 21st century belongs to the commodities. If you are interested in investing in commodities than you can invest in a commodity mutual fund!

This is the simplest way for you to get involved in investing in commodities as the mutual fund portfolio management will be done by a professional manager and you have to do nothing. Just buy the shares of the commodity mutual fund and let its NAV appreciate before you can sell for a capital gain.

Now, you must have heard about the Exchange Traded Funds (ETFs). ETFs are really hot investments these days. ETFs started off some three decades back but became highly popular as investment vehicles in such a short time.

Now the good thing about investing in ETFs is that they give you the diversification benefits of a mutual fund with very low fees something like 0.7% as compared to 2-4% of the mutual fund. Driven by the growing demand of commodities by the investors many financial institutions are now offering Commodity ETFs.

So unlike a mutual fund whose net asset value is calculated at the end of the day and the shares of mutual fund cannot be traded during the day, you can go both long or short on ETFs all the time. Something you cannot do with a mutual fund! ETFs have the added benefit of being able to trade like stocks giving you the powerful combination of diversification and liquidity.

Now, you can find thousands of ETFs in the market on different market sectors, stock indexes, currencies, commodities and so on. This diversification plus liquidity benefit makes an ETF a better investment tool as compared to the mutual fund and the stocks.

Let's take an example of a commodity ETF. The Deutsche Bank Commodity Index Tracking Fund is listed on AMEX and tracks the Deutsche Bank Liquid Commodity Index. This index is based on a basket of six commodities: light sweet crude oil, heating oil, gold, aluminum, corn and wheat. The first Commodity ETF in US was launched by Deutsche Bank in the start of 2006. This ETF is based on the Deutsche Bank Commodity Index and as you can judge

Now, every month a new ETF gets launched. There are a number of Commodity ETFs that track individual commodities like crude oil, gold and silver. Do your research on Commodity ETFs, you may find a good investment. This ETF invests directly in the commodity futures contract. Now one of the downsides of investing in this Commodity ETFs is that it can be fairly volatile as it is based on commodity futures contracts that get rolled monthly. Another downside to this Commodity ETF is that it is based on a basket of six commodities only. - 31987

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Growth Stocks Investment

By Ahmad Hassam

Capitalization or cap refers to the combined value of all the share of a company's stocks. The division between large cap, mid cap and small cap are often blurry and not sharp. When you start looking for good stocks, you often come across these terms like large cap, mid cap, small cap, growth and value. Let's discuss these terms for a moment.

However the following divisions are generally accepted: Large caps are companies with over $5 Billion in capitalization. Mid caps are companies with $1 to $5 Billion in capitalization and small caps are companies with $250 million to $1 Billion in capitalization. Anything below $250 million can be considered as micro cap. Now the most important term that you come across is growth stocks and value stocks. How do you determine this is a growth stock or a value stock? Perhaps the most important ratio is the Price to Earnings Ratio (P/E).

What is the P/E ratio? The P/E ratio divides the price of the stock by the earnings per share. Suppose, company ABC stock is presently selling for $50. Now suppose that last year company ABC earned $5 for every share of the stock outstanding. This means stock ABC P/E ratio is 50/5=10. So the higher the P/E ratio, the more investors are willing to pay for the stock.

Now the higher the P/E ratio, the more growth the company is supposed to have. So it can be either the company is growing real fast of the investor have high hopes of its growth. Now these hopes can be realistic or foolish, you never know! Now, if you follow financial news than you must know that the large growth companies always grab the headlines. But do the growth stocks really make best investment? The lower the P/E ratio, the more value the company has. Low P/E ratio companies are not considered to be the movers and shakers in the market.

Growth companies are usually adolescent companies usually in sectors like computers, technology, telecom while value companies are mature companies usually in sectors like insurance, banking, manufacturing. Now, if you follow financial news than you must know that the large growth companies always grab the headlines. But do the growth stocks really make best investment? The lower the P/E ratio, the more value the company has. Low P/E ratio companies are not considered to be the movers and shakers in the market. Is there any statistical study that can guide us as to the performance of these different categories of stocks? Eugene Fama did seminal research on stocks and stock market s in'70s. Most of his results were startling and broke many myths. According to Fama and French, two famous researchers who did ground breaking research on stocks, over the last 77 years, large growth stocks have only seen 9.9% annualized rate of return as compared to 11.5% for the large value stocks.

The most probable cause seems to be their immense popularity. Since most of the headlines are captures by high growth companies, investors seem to think that they are the best investments. Now intuitively you might have thought that growth stocks are better. What can be the reason for their lower performance over the years?

So large growth stocks tend to get overpriced before you are able to buy them! Think about Google, how its stock price shot up within a matter of weeks after it hit the market. Weeks after that it began to cool off. - 31987

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MLPs (Part II)

By Ahmad Hassam

As said, this has to be done on a quarterly basis. The reason MLPs exist is to distribute all available cash back to the MLP unit holders. The following factors are considered before determining the amount of cash distributed to each individual investor:

1) The difference between the total cash flow and the cash flow ploughed back into the MLP for futures growth. 2) How many units you hold as an MLP investor. 3) The incentive distribution rights created for the GP. These are just a few factors. There might be more as well. You need to understand the reasons behind the factors that determine the distribution of cash among the individual investors.

Now there are many always to go about doing commodity investing. First you need to determine the hottest commodity in the market like crude oil or gold. Then you need to search for an investment vehicle that can give you the best return. You must do your due diligence while making your investment decisions. There are always pros and cons of each investment vehicle! So once you decide to invest in commodities, you have many investment options like mutual funds, stocks, ETFs as well as MLPs.

You can invest in commodity stocks, you can invest in commodity ETFs, you can invest in commodity mutual funds. The possibilities are many. So investing in an MLP is just like investing in stocks. Investing in MLPs is quite simple. Since an MLP is a publicly traded entity. You can simply invest in an MLP by calling your broker and telling him or her how many units of a particular MLP you are interested in buying.

Majority of MLPs trade on NYSE with a few trading on NASDAQ and AMEX! Something like 50 MLPs is being publicly traded in the United States. Out of these 50, 40 are energy MLPs meaning that they are involved in the storage terminals, pipelines, transportation, refining and distribution.

Most of these MLPs engage in infrastructure investment that can pay a steady stream of revenue overtime. Moreover, investing in pipelines and other energy infrastructure offers steady cash flow streams for an MLP. You only need to remember this 90% of the income that comes to an MLP should come from the production and distribution of commodities for these MLPs to have the tax exempt status.

So when you invest in an MLP, you should look for answers to the following questions: 1) What's the historical payout of the MLP? 2) How much is the cash flow? And so on. If your brokerage firm has published some research on the MLPs, you can reference that.

Don't forget there is always some risk involved in any investment. Now investing in MLPs do come with some risks like most of the infrastructure is like pipelines and drilling rigs that are vulnerable to natural disasters and earth quakes like the Hurricane Katrina, so any such event can have a negative impact on your investment.

There is another risk related with the management. You don't have much say in the management of the MLP. Running an MLP is basically a GP show. If you are not satisfied with the performance of the management or its policies only thing that you can do is to withdraw your investment from that MLP. Since the MLP is fairly small at this moment, there can be liquidity issues in withdrawing your investment from an MLP. These are some of the risk that you can face while investing in an MLP. - 31987

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