investments blog

Brand new CANON Powershot G10 selling at S$750

2009-04-23T01:12:00.001-07:00

What is the difference between a good Forex Trader and the Bad Forex trader

So what kind of trader are you? Are you making huge profits in Forex or are you going bankrupt?

The good trader

Good traders have firm control over their emotions.
Good traders never think of prices as too high or two low – they are interested in only one direction or the market
Good traders make evolutionary adjustments to their trade plans, rarely revolutionary ones
Good traders do not pyramid. Pyramiding profits is risky; pyramiding losses is suicide
Good traders – even part time ones – consider trading a business, not a hobby
Good traders can tell when they are on and when they are off and never trade if and when the latter is the case
Good traders are prepared in advance for all possible market action during a session. They may be wrong but are rarely surprised
Good traders never trade just to trade but follow their trade plan and trading heuristic consistently
Good traders understand the importance of good money management and attitude
Good traders trade only with money they can afford to lose
Good traders take small losses and let profits run
Good traders use stops and rarely pull them or change them after a trade is entered
Good traders give the market time to work. Once they take a position, they sit and wait for developments with a stop loss level and a take profit objective established in advance
Good traders know when to hold them, when to fold them, know when to walk away, and know when to run

As you will see, the bad trader is very close to the opposite of the good trader

The Bad trader

Bad traders trade without a plan
Bad traders think all they need is a trading method and ignore money management
Bad traders trade without a stop and change it frequently
Bad traders trade too large a position for their capital
Bad traders trade too many market at once
Bad traders jump from market to market and do not specialize in three, four or five pairs and crosses
Bad traders do not control their emotions – they get giddy and over cpnfident after a profitable trade and despondent after a losing trade
Bad traders has unrealistic expectations
Bad traders add to losing positions
Bad traders overtrade
Bad traders make frequent and major changes to their trade plan and trading method
Bad traders don’t keep good records of their trades and seldom review any recordsthey do keep for learning purposes
Bad traders don’t give the markets time to tell the tale and often made ad hoc decisiona after taking a position for no substantial reason
Bad traders hold for too long, fold too soon, walk when they should run, and sun when they should walk

How to Make Lots of Money in Online Stock Trading?

2009-04-13T21:36:00.000-07:00

Trading is not a risk-free activity. Although all traders know that losses are inevitable, they want to minimize those losses and still be around to trade another day. Having the right tools, techniques and skills can help you enter the world of trading and enable you to continue to trade for a long time to come.

Before you buy that first share of stock, you need to be certain that you have the right trading software or tools to be successful. You need the right tools to identify trading candidates; display the interpret charts; research trading opportunities; screen stocks for fundamental constraints; and monitor and analyze your portfolio, open positions, market indexes, sectors and trading statistics. In summary, the proper tools are critical to finding the right trades and then monitoring those positions after you've found and entered them. If you don't have the right tools, you may not be able to enter and exit positions efficiently, control or track your orders, track your profits and losses, analyze your trading history and monitor economic reports, earnings and other business news.

The proper tools help you evaluate your trading system and test your trading ideas. They enable you to keep trading logs to review your trading performance. You also can use tools to stay in touch with other traders and exchange ideas that ultimately may help you improve your trading skills and discover trading opportunities. Tools are the core of any good trader's business. Without the right ones, your chances of success drop dramatically. Don't scrimp on the tools you select for you trading activities and choose and use your favourite tools wisely. As you begin choosing your stock trading software you'll probably find out about the hundred of tools and charts that are out there on the market. You don't need to learn and use them all. You'll find that you get mixed signals and will probably end up in a state of analysis paralysis trying to figure out which tool is giving you the right signal. To avoid driving yourself crazy, pick the one makes sense to you and fit your trading style. Take your time getting to know how they work and how best to interpret the information they generate use them to build the types of charts that match your trading style and don't worry about learning all the new gadgets. If your tools are working and you're making good profit, don't rush to add the newest tool innovation. Keep your eyes open for new tools that can improve your trading profits, but use caution before making changes to your winning trading systems.

If you're serious about making lots of money through trading stocks, please check out this superb stock trading tool will guide you and help you make great profits and prevent losses from trading stocks. Please click the link below and learn about this hottest trading tool in the world right now.

http://www.richfromstocks.com

Hope you become a successful trader one day. Happy trading!!

Learning to Trade the Forex Market

2008-06-14T09:57:00.000-07:00

The forex market has become one of the fastest growing industries on the internet today. The secret's out and many people are making money on forex currency trading as retail traders and these are people like you and me. Average people with computers, internet connections and a forex trading account can start trading immediately. This opens up a whole new opportunity for the average Joe investor and the advent of the internet into all our homes has given us a currency trading platform. For small investors, forex currency trading has become a lucrative source of income and everybody is trying to get in on the action.

Before you get started, you need to learn and understand what foreign currency trading is and how it works. There's lots of information out there to help you learn this business, but remember that much of this supposed information and free forex trading strategy advise can be misleading. But don't let this keep you from seeking real, quality forex education, because this will be critical to your success as a forex trader. The second piece of advice that you should keep in mind is to start small. You can always start out by trading a demo account from your broker that allows you to use fake money with real charts and tools. That way you risk none of your money while you're learning how to trade. If you do well as a forex trader, you can move on to trading a real money account. As you get better at trading, increase your budget slowly, and make certain you don't over leverage your account and blow your money. Money management is very important in this business so make sure you have a good balance between your risk/reward.

Also, find good forex training courses and resources in foreign currency trading. There are plenty of these resources online or find out where you can attend workshops in your local area. There are also online workshops where you can trade along live with professional traders to see how they analyze the market and execute trades. You not only can make profit while trading with professional traders, but you will be learning a life long skill you can use to trade on your own one day without having to rely on services like these. You can ask questions, which will be answered by experts on live chat, message boards and forums. There are courses on forex currency trading that give you instant access to their library where you can see historical trends and all types of useful literature. Professional forex traders run these forex training courses and offer videos with their own forex trading systems explained in detail.

Many of these experts have also written a number of books on the subject, so try to look for one that is authored by a well-known trader, or someone with reliable credentials instead of a self proclaimed guru with no background on the subject. Anyone can claim to have made a fortune but trust only someone who has traded professionally for a number of years with a large financial company or someone newspapers and magazines cite in their articles. The more you research this business, you'll start to see the same names. Write these down and research them further. You'll quickly come up with a list of forex trading gurus and find the services they run so you can trade along with them.

There are a number of forex brokers, both smaller firms and large companies, who offer basic forex training when you register with their service. If you're new to forex currency trading, this can be quite useful. Most forex broking firm have their own charting platform and tools that will teach you to trade and allow you to trade directly from their trading platform. As we mentioned earlier, you can practice your forex currency trading without using real money by demo trading. When you're ready, you can use your real cash and start generating an income from your trading. It's very advisable to combine some of your own reading and forex training with some amount of experience of forex trading platform.

Finally, if you're extremely risk averse and would rather not trade yourself, many forex brokerages offer managed accounts. You simply sign the appropriate paperwork and add money to your trading account. The brokers professional forex traders will manage your trades for you while you watch your account balance grow. You will pay a fee for this service and it can be as high as 25%, but if they're making you money, it doesn't matter. They're in this business to make money too, so it's a win-win for you and the forex account manager.

Forex Trading Software With Real Time Price Feeds

2008-06-14T09:56:00.001-07:00

There are various forms of Forex trading software available on the Net today, and most of them involve some sort of installation into your computer. In this article, I will specifically discuss the implications of getting a good piece of Forex trading software with real time price feeds.

Platform Trading Software

Forex trading platforms are one of the most common type of software that people use. As opposed to viewing live market charts in a web browser, platform software allows you to place your trades directly through it.

Benefits Of A Trading Platform

Trading Platforms allow the trader to view accurate market price fluctuations in real time. This is one of the biggest benefits of having a dedicated program to trade with. Generally speaking, the price fluctuations you see in a web browser chart are mostly lagging prices.

If you are the type of trading who prefers to make numerous small trades in a day (known as scalping), you might want to avoid trading based on the charts you see in your web browser. A good piece of trading platform software will instead provide you with highly precise price movements that allow you to make better trading decisions.

Should You Get Your Own Trading Platform?

Although trading platforms are indeed very useful for traders, I must say that not everyone is comfortable with using one.

The first and most obvious limitation of trading platforms is that you’ll have to install them on your computer. Not everyone may like this idea, but it is in my opinion that if you are serious in becoming a consistently profitable trader, you’ll definitely have to trade using a dedicated trading platform. Most web browser charts are simply too inadequate for you to analyze the Forex market properly and accurately.

Funny Jamaican Video Dating

2008-06-14T09:47:00.000-07:00

Would you want to marry this man?

Everyone knows that the Forex market holds tremendous potential for profits. With more than $3 trillion dollars being traded every single day in the market, capturing even a miniscule percentage of these profits would turn one into an instant millionaire.

But it is obvious enough that becoming a millionaire in Forex trading is not an easy task. After all, if it was to easy to become rich in currency trading, then why doesn’t everyone manage to do it?

The Best Kept Forex Trading Secret

I may become extremely unpopular with what I’m about to reveal next, but it’s the truth you’ll need to understand this if you want to become a consistently profitable trader.

The best kept secret in profitable Forex trading is denial.

Like most other things in life, people always wish for there to be some magical short-cut to becoming successful. We will always wish for there to be an easy way to accomplish our dreams and desires.

For example, when we want to lose weight, instead of exercising regularly and eating healthy meals, we try to ‘cheat’ by ingesting expensive diet pills and paying for premium gym memberships in the hope that we will lose the extra pounds. As you know, in the end, the only winners of this deal are the pill sellers and gym owners.

And this is exactly what’s happening in the Forex market. The lazy traders who think they can make easy money are promptly ‘swallowed up’ by the traders who put in the hard work and extra effort.

So stop being in denial. Stop telling yourself that there’s some magical way to suddenly become rich. You can certainly become wealthy by trading currencies, but I can assure you that this won’t happen if you keep spending money on magical ‘automatic trading systems’ that claim to make you lots of money without any work on your part.

The people who really make money in the Forex market are those that rely on the natural human tendency of denial.

Don’t fall into this manner of thinking!

You Don't Mess With The Zohan

2008-06-05T07:36:00.000-07:00

Funniest clips and the the trailer from the latest Adam Sandler's movie "You Don't Mess With The Zohan"

I have been investing with success in the stock and forex market since 2006. Both of this markets are different ways of investing money that -if done right- can leave you with great returns.

However, provided that you are successful, you need a lot of money to see some tangible results. With these two different ways of investing money, I usually get monthly returns of about 6%. This is a great performance, however, if you invest only $1,000 you would be making only $60/month which is a good percentage but not so much money.

By the end of 2007, always looking for different ways of investing money, I stumbled upon an alternative that offered some remarkable returns for small investments. I did some research on it finding only some scarce comments and publicity about different ways of investing money, but no actual information.

Therefore, I decided to test them with a little investment of only $150 in order get my own perspective about who they were (sometimes, finding different ways of investing money demands you give it a shot).

To keep it short, I'll tell you that I've made over $30,000 in less than 7 months starting with only a $1,000 investment (and I could have been over $50,000 but I used some of my profits along the way). Without a question, of all the different ways of investing money, this is by far the one you don't want to miss.

Indeed, I have not come across any other investment opportunity which delivers such a remarkable performance for the average joe. If you are on the look for different ways of investing money with a small startup capital, you should consider learning more about this place.

FOREX 101: Make Money with Currency Trading

2008-05-22T09:53:00.000-07:00

For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.

FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.

Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.

How FOREX Works

Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.

Marginal Trading

Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.

EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)

When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

Investment Strategies: Technical Analysis and Fundamental Analysis

The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.

A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.

Make Money with Currency Trading on FOREX

FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.

Why Forex Trading is a good option for Working from Home

2008-05-19T05:54:00.000-07:00

Question: 1.Why should I work from home?

2. If I work from home what should I do?

3. How do I research the subject?

All these questions are commonly asked by people every day. If you are fed up with the grind of going work, commuting daily, the weather and the family constraints that going out to work creates then consider working from home but the three questions still arise.

Firstly, the reason for working from home is, a better standard of living for you and your family and more time in the home and less time and money spent on travelling to and from work and the stress that that creates.

However, what should I do and how do I set it up is the next question. Well you need to find a subject that does not require you to find outside space, that does not incur you in buying expensive equipment that you will not otherwise use, and something that will fit into your family home quite easily and then it is more likely to be acceptable to the rest of the family.

Next question is how do I find the right business. Well I researched the internet and found that Forex Trading was a subject that I would find challenging, would provide a good profit and would require a minimum of space in my home and also the only equipment I needed was my PC which I already had so there was no additional outlay for equipment.

Following swiftly on, there are a number of websites on Forex Trading and I researched all of them and found FX Professional which was well written, easy to understand, provided mentoring, technical and backup support which many of the others did not.

Working from home has been fun with Forex Trading and FX Professional it has been rewarding, profitable and an all round winner. Forex Trading from home is an ideal business opportunity for men and women alike and with support always available at a small cost per month.

How To Know Which Are The Best Mutual Funds To Invest With

2008-05-19T05:53:00.001-07:00

There are different ways that you can use the money that you have earned. Investing in a mutual fund is one such way. The many different mutual funds you will find have many excellent options for you to try out. You will however need to look at the best mutual funds in order to find out which one or ones are more suited for you.

At the moment you will discover that Janus, Fidelity funds, Vanguard Group and others are among the best mutual funds that are available. In each of these mutual funds you will need to see how the funds compare with each other. There are many reviews that will provide you with information for choosing the best mutual funds

Before you invest with a mutual fund you will need to understand what a mutual fund is and how it will be of help to you. Basically a mutual fund is an investment company. This corporation pools the money of its investors together. With this money the investment company is able to buy diverse types of stocks and bonds.

The investors then share out the various stock and bonds that are in the pool. By investing these stocks the professional managers of the corporation is able to keep the clients’ portfolio in good shape. While this is a simple way to put the functions of mutual funds it helps to understand how a mutual funds group works. You can find out more information from the internet or from a trusted financial advisor.

The best way to look for the right mutual fund is to take your time. With the numerous mutual funds out there it is a bit difficult to know which ones are the best mutual funds to invest with. You can look at the Morningstar reviews to see which of the mutual funds are performing well. This preliminary research will help you to see the direction in which mutual funds are heading.

Once you have selected a few of the best mutual funds to investigate you should see what types of funds are being offered. As some of these funds have hidden charges it pays to understand what these funds are really. You will find this information in the internet or you can ask someone to clarify the details for you.

Even though all of these mutual funds are great investment possibilities there are always risks that potential clients face. For this matter you should give the matter of investing your money in a mutual funds group some serious thought. The bottom line is that no matter how good these many best mutual funds are performing right now tomorrow is another story, so take your time and invest wisely.

Online Forex Trading: How To Get Rich And Happy From Online Forex Trading

2008-05-18T00:33:00.000-07:00

This article is about online forex trading secrets of millionaires and billionaires which enable the average person to create fantastic wealth and success from safe online investments in foreign currencies.

What is online forex trading?

How can you get rich and powerful from online forex trading?

Who can do online forex trading?

Can you do online forex trading from any country of the world?

If you search on the internet you'll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs.

Perhaps you know about only stock trading or bond trading which are common, but not online forex trading.

Online forex trading is the best kept "Secret" of the rich and powerful, international bankers, the money elite, who own and control all the banks, companies, corporations and foundations in the world.

Until six years ago, when the United States Congress passed a law and made it possible for the small investors and average citizen to participate in this online forex trading, only large banks, financial institutions, millionaires and billionaires were doing forex trading.

Online Forex trading is when you buy and sell the foreign currencies of different countries online.

Through online forex trading, you can put your money to work for you like millionaires and billionaires do, instead of you working for your money.

There is no large investment, hard work, technical training or big "risk".

Online forex trading investment enables you to use $1 to control an investment worth $200, and $500 to control $100,000 and $1000 to control $200,000 and $5000 to control $1,000,000 worth of investment.

Online forex trading is the most profitable and attractive internet investing opportunity because you can do it from home or office and from any country in the world.

In online forex trading, you don't need to do any marketing or selling or internet promotion to succeed.

In online forex trading, you don't need to spend thousands of dollars to do any internet promotion.

In online forex trading, you don't need any stocks or warehousing.

In online forex trading, all that you've to do is open an account with one of the brokers with as little as $300 or $2000.

Then follow simple instructions to buy and sell the currencies.

When the price of the currency is low, you buy.

In a few seconds or minutes, the price may go up, and you may sell it and make a profit.

By doing so, in a day, you can easily make $500-$1000 by just buying, selling and trading these foreign currencies for about 3 or 4 hrs!

And get this:

You don't even have to be stuck sitting behind your computer buying and selling these foreign currencies.

You can enter all your buy trades and specify the sell prices you desire and then log off.

Whenever the values of these foreign currencies rise and your selling prices reach, the currencies will be automatically sold for you and you make money!

You can put it into an auto-pilot and forget it, and it will keep generating fast easy cash for you daily, 365 days in the year like an "ATM" machine.

You can do online forex trading and at the same time keep your day job, because in online forex trading, there is no work to do.

In the future when you have made hundreds of thousands of dollars, you may then quit your job and just keep doing online forex trading forever and go on permanent vacation!

To understand the beauty of online forex trading, picture this:

In the morning, you get up from sleep at 6 am.

You go to your bathroom and have your shower.

At 7am, you hurry and eat your breakfast.

At 7.20 am, you login into your online forex trading account on the internet and spend 10 minutes to buy about 3 or 4 different currencies, [for example British Pound, Euro, CHF (Swiss Currency) and Yen (Japanese currency).]

You can specify the price that you wish to sell each currency.

Then you can log off.

By 9 am, you're at work in your office or business place.

You do your job as usual and by 5 pm, you're finished and heading home.

When you get back home around 6.30 pm, you login into your online forex trading account to see how much money you've made.

Holy Molly, there in your account it says you have made $750!

"Is this for real?", you wonder�

Yes, it is. (Your eyes are not deceiving you�) $750 in a day for just clicking your mouse twice and doing no work?

(Whereas at your job, you work 8 hrs, but make only probably $150)

This is how easy it is to make money from online forex trading.

But before you use real money to open a live online forex trading account, you have to open a free trial (demo) account (forex simulating trading) and practice first, to understand how it works and to acquire the right skills.

This free demo (trial) online forex trading account (forex simulation trading) will help you to reduce a lot of risks that can lead to a loss.

In online forex trading, you can choose how much money to invest, how much money to make and when to make it.

You may make money daily, 365 days all year from online forex trading.

Your computer can be transformed into an "ATM" machine that cranks out cash for you daily (without large investment or hassles) from online forex trading.

In online forex trading, you can choose what type of risk you can manage, when to invest and when not to invest.

In online forex trading, you're the boss. You may do as you please.

When online forex trading is compared to other investment programs such as stock trading, bond trading, mutual funds, real estate and regular business, it is evident that online forex trading is the fastest and greatest way to make money in the world.

Online Forex trading is a 2.5 trillion dollars daily business and it is larger than all the stock trading in the world combined.

These are some of the reasons why I believe that online forex trading is the best online investing opportunity.

Perhaps from reading this article you'll now come to know why online forex trading is the secret behind the greatest wealth on earth and why it has been kept hidden from the average people of the world and therefore little known to the masses.

No matter who you are, be it a salesmen, doctors, office clerks, accountants, carpenters, actors, stockbrokers, small business owners, policemen, firemen, musicians, soldiers, housewives, technicians, attorneys, nurses, students, traders, cab drivers, engineers, you can get rich from online forex trading.

No matter which country that you come from, such as USA, Canada, Belgium, Denmark, Sweden, Finland, Germany, France, United Kingdom, Switzerland, Norway, Italy, Greece, Spain, Mexico, Peru, Venezuela, Ghana, South Africa, Kenya, Egypt, Israel, Turkey, China, India, Japan, Australia, New Zealand... you can create true personal wealth and success from doing online forex trading.

Stocks vs. Bonds: Differences and Risks

2008-05-02T07:52:00.000-07:00

In the world of investments, you’ll often hear about stocks and bonds. They are both feasible forms of investment. They allow you the opportunity to invest your money with a specific company or corporation with the possibility of future profits. But how exactly do they work? And what are the differences between the two?

Bonds

Let’s start with bonds. The easiest way to define a bond is through the concept of a loan. When you invest in bonds, you are essentially loaning your money to a company, corporation, or government of your choosing. That institution, in turn, will give you a receipt for your loan, along with a promise of interest, in the form of a bond.

Bonds are bought and sold in the open market. Fluctuation in their values occurs depending on the interest rate of the general economy. Basically, the interest rate directly affects the worth of your investment. For instance, if you have a thousand dollar bond which pays the interest of 5% yearly, you can sell it at a higher face value provided the general interest rate is below 5%. And if the rate of interest rises above 5%, the bond, though it can still be sold, is usually sold at less than its face value.

The logic behind this system is that the investors deal with a higher rate of interest then the actual bond pays. Thus, the bond is sold at lower value in order to offset the gap. The OTC market, which is comprised of banks and security firms, is the favourite trading place for bonds, because corporate bonds can be listed on the stock exchange, and can be purchased through stock brokers.

With bonds, unlike stocks, you, as the investor, will not directly benefit from the success of the company or the amount of its profits. Instead, you will receive a fixed rate of return on your bond. Basically, this means that whether the company is wildly successful OR has an abysmal year of business, it will not affect your investment. Your bond return rate will be the same. Your return rate is the percentage of the original offer of the bond. This percentage is called the coupon rate.

It is also important to remember that bonds have maturity dates. Once a bond hits its maturity date, the principal amount paid for that bond is returned to the investor. Different bonds are issued different maturity dates. Some bonds can have up to 30 years of maturity period.

When dealing in bonds, the greatest investment risk that you face is the possibility of the principal investment amount NOT being paid back to you. Obviously, this risk can be somewhat controlled through the careful assessment of the companies or institutions that you choose to invest in.

Those companies that possess more credit worthiness are generally safer investments when it comes to bonds. The best example of a “safe” bond is the government bond. Another is the blue chip company bond. Blue chip companies are well-established companies that have proven and successful track records over a long span of time. Of course, such companies will have lower coupon rates.

If you’re willing to take a greater risk for better coupon rates, then you would probably end up choosing the companies with low credit ratings, companies that are unproven or unstable. Keep in mind, there is a great risk of default on the bonds from smaller corporations; however, the other side of the coin is that bond holders of such companies are preferential creditors. They get compensated before the stock holders in the event of a business going bankrupt.

So, for less risk, choose to invest in bonds from established companies. You will be likely to cash in on your returns, but they will probably not be very large. Or, you can choose to invest in smaller, unproven companies. The risk is greater, but if it pays off, your bank account will be greater, too. As in any investment venture, there is a trade-off between the risks and the possible rewards of bonds.

Stocks

Stocks represent shares of a company. These shares give part of the ownership of the company to you, the share-holder. Your stake in that company is defined by the amount of shares that you, the investor, own. Stock comes in mid-caps, small caps, and large caps.

As with bonds, you can decrease the risk of stock trading by choosing your stocks carefully, assessing your investments and weighing the risk of different companies. Obviously, an entrenched and well-known corporation is much more likely to be stable then a new and unproven one. And the stock will reflect the stability of the companies.

Stocks, unlike bonds, fluctuate in value and are traded in the stock market. Their worth is based directly on the performance of the company. If the company is doing well, growing, and attaining profits, then so does the value of the stock. If the company is weakening or failing, the stock of that company decreases in value.

There are various ways in which stocks are traded. In addition to being traded as shares of a company, stock can also be traded in the form of options, which is a type of Futures trading. Stock can also be sold and brought in the stock market on a daily basis. The value of a certain stock can increase and decrease according to the rise and fall in the stock market. Because of this, investing in stocks is much riskier than investing in bonds.

The Wrap-Up

Both stocks and bonds can become profitable investments. But it is important to remember that both options also carry a certain amount of risk. Being aware of that risk and taking steps to minimize it and control it, not the other way around, will help you to make the right choices when it comes to your financial decisions. The key to wise investing is always good research, a solid strategy, and guidance you can trust

Trading Stocks Online--Top 5 Secrets to Making Money

2008-05-02T07:48:00.000-07:00

Want to make money trading stocks online? If you follow these five simple tips, you'll be way ahead of the pack.

1) Listen to the charts

You may have found a great stock, and it could have the best fundamentals in the world, but here's the truth-- that's not enough! Even if a stock has a million fundamental reasons to go up, it's not going anywhere unless people are buying it. People don't always act rationally, so you can't assume that a stock will behave as it should. That's where technical analysis (chart reading) comes in. By learning to read charts, you can spot stocks that are poised to move up, or conversely, stocks hopelessly headed down. Reading stock charts will allow you to find stocks which actually will move up, not just stocks you think should move up.

2) Use stop losses

No one is ever right 100% of the time. That's just the nature of the game. Even the best stock pickers sometimes pick lemons, but that's not necessarily a problem. Picking losers, which is inevitable, is only a problem if you let them kill your account. You absolutely must set stop loss orders every time you make a trade, otherwise you may wake up and find your entire account decimated. Remember, to make money trading stocks online, you don't always have to pick winners-- your winners just have to be bigger than your losers. You accomplish this by always cutting your losers early, and then letting your winners run.

3) Don't step in front of a speeding train

One of the biggest myths about making money by trading stocks online is that you have to buy low and sell high. That's a very dangerous way of thinking. Why? Because people, searching for stocks to buy low, eagerly buy stocks which are spiraling downward. They hope, often falsely, that soon after they buy the stock, it will turn around, go higher, and then they can sell for a profit. But ask any experienced trader and he'll tell you that stocks which drop precipitously tend to keep dropping. Don't step in front of a speeding train. Instead, find stocks which are healthily moving up and will keep moving up. Think of it not as "buy low and sell high," but "buy high and sell higher."

4) Ignore the people on TV

There is no shortage of media personalities who love to recommend stocks. Follow their advice and you'll become rich, right? Wrong. If you could make millions by following the guy on TV, everyone would be rich. You've got to do your own homework. You see, it's not necessarily that the people in the media don't know what they're talking about. They often do. It's that by the time that information reaches you, it's too late! Think about it...there are professionals who spend all day looking for the next great stock to buy. Do you really think that by the time a stock pick reaches the general public on TV, the smart money hasn't already bought it? Of course it has, and by the time the little guy buys himself, he's left holding the bag. If you want to make money trading online, you've got to think independently. Otherwise, you'll be behind the curve.

5) Don't overpay on commissions

Let's say you start trading stocks online with one thousand dollars. Now let's say you're paying ten dollars per trade. And finally, let's assume you make thirty trades per month. If you do the math, you'll see that you're doomed regardless of how good your stock picks are! People often get so excited about trading stocks online, they forget about all the money wasted on commissions. If you want to be successful over the long term, you have to find a broker with low enough commissions for your trading style. With some brokers charging as low as one penny per share, there's no reason to waste all of your money in fees. In this way, researching online brokers is just as important as researching stocks.

Keep in mind these five tips and you've already set yourself up for success in trading stocks online. Good luck!

Earn $346.77 Per Week Trading From Home With a Stock Trading Software

Investing in stocks

2008-05-01T11:14:00.000-07:00

There have been a lot of books written on how to be a smart investor and how to time the market. In fact, many people make a living on developing a "system" to time the market and then sell that system to other people. While there are a lot of indicators that can tell you when to invest and when to get out, one excellent way to invest is to be a "contrarian investor."

A contrarian investor means that you are doing the opposite of what other people are doing. It takes a certain amount of finesse and "chutzpah" to be a contrarian investor but it can help you make money, and it can keep you from losing money.

Contrarian investing means that you need to buy when other people are selling and sell when other people are buying. For example, during the tech boom in 2000, the person who made money was the person who sold their tech stocks when everyone else was feverishly buying. Likewise, the person who bought Asian stocks during the Asian flu is seeing -- and will see -- an appreciation in that investment because they've bought what other people are selling.

People buy and sell every day, so how do you know what to buy and what to sell? The answer to this question is to go and look at the cover of investing and stock market magazines at your local magazine store. On the cover, you will see the popular industries that people are snapping up like crazy or dumping as quickly as possible. If you own the popular ones, get out. If you don't own the unpopular ones, get in. The popular ones may go up some more, but it will go down because that's what stocks do: they go up and they go down.

By selling when others are buying you are taking profits easily. By buying when others are selling you are snapping up opportunities at a discount. The concept seems crazy, but it works. Why? Because of the herd mentality. Many investors are undereducated when it comes to investing so they simply follow the crowd. Willingly, they buy and buy stocks that go up in price and are shocked when it comes crashing down because they followed the herd and didn't realize that stocks fluctuate.

Is contrarian investing foolproof? No. And no investing philosophy is foolproof. Contrarian investing is not meant to replace quality research and carefully considered transactions. What contrarian investing is meant to do is to help you take profits when they're available and buy cheap stocks when they're available. It's true that some stocks plummet for a reason but if you combine contrarian investing with some research, you'll be able to buy stocks when they are unpopular and ride them back to the top!

5 Steps to start investing in stocks

2008-05-01T11:13:00.001-07:00

STEP 1: LEARN AS MUCH AS YOU CAN ABOUT INVESTING
Read as many books about investing as you can. Make your own decisions on what you are going to use. Learn about discounted cash flow analysis. Learn how to make inferences about management and industries from public information.

Suggested reading:
> Security Analysis by Benjamin Graham and David Dodd
> Contrarian Investing: the Next Generation by David Dreman
> The Aggressive Conservative Investor by Marty Whitman
> Buffettology by Mary Buffett

STEP 2: DETERMINE WHAT YOUR INVESTMENT STRATEGY AND TIME HORIZON ARE
Determine what type of strategy or strategies you think you will do well with and are comfortable with. The shorter your time the less aggressive your strategy should be. You might want to start off with multiple strategies. Common strategy themes are ‘Safe and Cheap’, ‘Growth at a reasonable price and ‘High dividend yield’, ‘Cash Cows’, ‘Profitable, but unloved’, ‘Blue Chips’, ‘Low priced growth stock, “Insider interest’ etc. Themes like ‘hot stocks’, ‘explosive penny stocks’ etc. are very hit and miss.

You should set your portfolio’s parameters:
> How large your portfolio will be
> What type of stocks you will buy (market, industry, market cap, etc.)
> How many stocks will you own
> What will make you buy a stock
> What will make you sell a stock

STEP 3; BECOME FAMILIAR WITH A SET OF INVESTING WEBSITES
There are a number of fantastic online resources where you can research individual stock. Yahoo finance (finance.yahoo.com) and Google finance (finance.google.com) are two excellent free resources. Morningstar is another good online resource, though you’ll have to pay for premium access.

Sometimes very useful information is hidden or not easily accessible. Mutual fund holders and insider transactions could provide interesting information.

STEP 4: LEARN FROM YOUR MISTAKES
Every time you pick a stock make notes about why you chose that stock. Go back and review your picks and notes periodically. Do you do better with industries or companies you know well? Do you sell too early when the market is volatile? Questions like these make you understand how you react to certain conditions and can help you recognize biases that hurt your profit.

Creating a mock portfolio, on sites like xearn.com will help you learn without risking actual money.

STEP 5: CHOOSE A STOCKBROKER
Research stock broking companies. Check out commissions, execution service levels, access to research, interest rates as well as other features. Popular brokerages are Schwab, E-trade, Ameritrade, Scotts Trade and Fidelity.

Now you’re all set to being a better investor than most!

Investing in Stocks and Shares

2008-05-01T11:08:00.000-07:00

Stocks and shares, unit trusts and investment trusts.

Shares give you part ownership of a company, so the value of your investment is linked to how the company � and the overall economy - performs. You can also invest in funds which buy shares in a wide range of different companies.

Over the last 25 years it has become quite common for people to own shares directly through a number of different ways:
� In the UK for example, many people bought shares when the government sold nationalized companies
� some people were given shares when their building society or insurance company changed from a 'mutual' (where its members were the owners) into a company with its shares being bought and sold
� as an employee you might also be awarded shares in your company as an incentive - this may be through a share option scheme, when you're offered the right to buy shares in your company in the future at a price agreed now

You can also buy shares directly in companies trading on the stock exchange through a stockbroker.
An alternative to owning shares directly is to invest your money in a fund or a company which, in turn, invests its money in shares. Your investments will be taken care of by a professional manager who uses skill and experience to decide which companies to invest in, buying and selling shares to grow your investment. This is called a 'managed scheme'. Your investment is spread over a larger portion of the market that you could do yourself, so reducing the risk.
Unit trusts can have any number of investors, so are known as 'open-ended' funds. You invest in these funds by buying one or more 'units'. The price of units varies depending on how well the fund performs.
Investment trust companies invest in other companies. Because of this these shares are limited in number, unlike unit trusts, so they're called 'closed-ended'. The value of your shares still depends on the performance of the investments but also on the demand for the investment trust company's shares themselves.
You make money from your shares by the companies that you invest in declaring 'dividends' or an amount payable per share. The more shares you own, the more money you make. But of course, business trends go down as well as up, so be aware that it just as possible to loose your investments as it is to make a profit!