Category Archives: Investing

Forex 101 – Currency Pairs

Forex 101 - Currency Pairs

Foreign Exchange trading (Forex, hereafter) is a market that’s opened up to private investors since the 1990s, and it currently has over two trillion dollars worth of trading transactions every single day, making it the single largest market in the world.  The key to forex trading is that everything has a relative value; you want to buy a currency low and sell it for more than you paid for it. 

Currencies are listed with an exchange rate; for example, right now, one British Pound is worth $1.9248, meaning that it’s worth about a dollar ninety two.  This is the Dollar/Pound Currency Pair.  The relative value of a currency pair will shift over time; sometimes, it’ll shift fast – within minutes or seconds, usually just after a bank opens or just before a major bank closes; this is why most Forex traders live or die on the London close.

Now, a position for a forex trade would be to buy pounds at $1.9248 and expect to sell them when they hit a certain price, say you expect them to break $2.00 for whatever reason.  (There are lots of reasons to expect this; big bailouts are inflationary on the currency being used, and the US government is doing a lot of bailouts right now.)

The amount that a currency pair’s relative valuation can change is called its swing.  In day trading, swings can be in 10ths and hundredths of a cent, and the money is made by using leverage to buy (and sell) large blocks of currency.  Swings have a period (how rapidly they change), and fast swings (both up and down) are good for doing day trading style strategies.

Currency pairs also have other swing patterns; there are seasonal patterns in currency trading (like the fact that the dollar always rises in the summer time, due to Americans spending time on vacation, or the fact that the Euro rises in August for the same reason – most of Europe takes their vacation at the same time). 

If you’re just getting into forex trading, focus on long term swings and position trading.  These won’t make you as much money, as quickly, but their risk is lower.  More importantly, you don’t need to get into leveraging agreements to make a decent profit at it, and they don’t require that you spend all of your life watching numbers on a screen to push a trade through when the right numbers come up.

If you’re looking at the various online forex courses, be aware that most of them want you to get into a day trading strategy.  This can make you a lot of money quickly – it can also lose you a lot of money quickly.  It also requires constant vigilance;

Regardless of which strategy you use, forex trading can be a reasonable way to earn a living.  It’s still a job, it just happens to be one that’s well suited to certain types of people.  If you’re the sort of person who agonizes over when you’ve lost money on a bad trade, this may not be the right job for you.

Mutual Funds, Guaranteed Investment Certificate Or Savings Account?

Mutual Funds, Guaranteed Investment Certificate Or Savings Account?

If you are lucky enough to have a bit of disposable income, you are doing the right thing by researching ways of saving or investing your money. By reading about the different options available to you, you’ll be able to make an informed decision and make the best possible choice for you and your money. How you decide to save and/or invest your money will depend on many variables. Some of these include how much money you’ve got to work with, how much time you’ve got to work with and your all-important tolerance to risk. After reading the brief overview of mutual funds, Guaranteed Investment Certificates (GIC) and savings accounts below, it is advisable to discuss all your options with a personal finance advisor who can assess your situation on an individual basis.

Mutual Funds

A mutual fund is an investment where the money invested by many investors is pooled and then invested in a wide range of investments. The investments typically included in mutual funds include stocks, bonds, securities, short-term money instruments and others. Mutual funds are generally considered to be pretty safe as they are highly diversified. Each mutual fund will have a manger that is charged with trading the fund’s assets regularly. This person’s job is to maximize the rate of return for all the investor’s whose money is invested in the fund. The benefit of investing your money in mutual funds is that you can start with as little as $25 dollars and contribute to your fund on a regular basis. This is a great way to get started in investments and to grow your money even when you do not have access to a lump sum.

Guaranteed Investment Certificates (GIC)

A Guaranteed Investment Certificate, or GIC is a type of Canadian investment in which the rate of return is guaranteed over a fixed period of time. Guaranteed Investment Certificates are relatively low-risk investments, and thus yield smaller returns than that of stocks, bonds and mutual funds. Within the category of GIC’s, there are lower-risk options and higher-risk options; however, GIC’s in general are considered low risk because even if you earn less interest or jeapordize your access to interest earned by withdrawing early your initial investment is guaranteed. These safe and secure Canadian investments earn interest at a fixed rate, variable rate, or based on a market-based index.

Savings Accounts

Savings accounts are very safe and flexible places in which to basically store your money. You can open a savings account at any bank and with as little as $25. You will have access to your money at all times, and depending on how much you keep in your savings account at any given time, may not even have to pay any bank fees. The downside of keeping money in a savings account is that your cash will earn little to no interest. Interest-bearing savings accounts earn very little interest compared to Guaranteed Investment Certificates or mutual funds. However, if you feel that you will (or may) need access to your cash during the short term, this is a great and safe place in which to keep your savings. Many people start saving with this type of account then transfer lump sums to other investments such as GIC’s or mutual funds.

The Verdict

Now that you know a bit more about GIC’s, mutual funds and savings accounts, you are better prepared to talk to your financial advisor about what’s best for you. If you don’t currently work with a financial advisor, speak with a customer service representative at your bank.

How Can Stay at Home Moms Make Money From Day Trading Stock Picks

How Can Stay at Home Moms Make Money From Day Trading Stock Picks

Any stay at home mom who wants to make money online can avail themselves of the lucrative business opportunity of day trading stock picks which can easily help them to earn at least $500 a day without any need for advertising, warehousing and selling any physical goods or services. I know you desire to figure out how can stay at home moms make money online? Here is an easy-to-follow method you can use to make enough money to pay for your dream car or fund your children college education without sweat.

If you seriously want to make a regular and consistent income daily then day trading stock pick is what you should be doing now. Do not waste your time on those get rich quick schemes you see around. This is how you are going to be making money online from today. Imagine yourself sitting in front of your home PC or laptop on a cool Monday morning with your glass of orange juice beside you. The stock market opens in 25 minutes and you put on your PC or laptop. You instruct your stock trading robot to scan the database of penny stocks and after some minutes, the robot beeps and alerts you of potential profit-pulling stocks you should trade.

This is the type of business recommended for every stay at home mom to make huge money online. On this typical Monday morning, your robot has given you an order to buy Stock A for $0.13 and you quickly buy 10,000 shares of Stock A for $1,300 and you log out within a period of 10 minutes and go about your daily household chores. The next morning, you log on again and the robot instructs you to sell Stock A for $0.46 and you quickly contact your online brokerage firm and you sell all 10,000 shares. Can you imagine the amount of money you have made? Get out your calculator out now! You have made $3,300 within a period of 24 hours.

This is the kind of situation you will be faced with from today if you decide to throw away all those difficult and time-wasting chores you call business. Join the number of successful British and American stay at home moms that have discovered this easy-to-do home based business.

Truth is, on the penny stock market, stocks swing in price very fast. You will observe that stocks trading at $0.12 today may skyrocket to $0.54 the next day. This kind of price movement is not unusual at all. It happens just like that every single day.

This is the best and easiest way every stay at home mom can make money online today. Day trading stock picks is one business you cannot afford to allow to pass you by. In a very short time, with $500 flowing into your account every day, you will say good bye to all your money worries. Your dream car or dream home will be within your reach in less than 60 days!

The Rise and Fall of 401k – Blame it on the Little Guy!

The Rise and Fall of 401k - Blame it on the Little Guy!

The long term profit track record of 401k plans is unimpressive.  How did the 401k get so popular?  A large factor was the joy ride of profits Wall Street was enjoying throughout the 1990’s.  Hard working people saw their 401k balance rising with the ever higher numbers posted on the big boards and believed the investment options they were offered were good funds.

Employers loved the plans because their own contributions were much smaller than in their previous (and often now unfunded) pension plans. Workers liked the idea of tax deferred savings and being a “Wall Street investor” and also felt they were getting a bit more for their work due to the employer match of contributions.

For years, attempts to provide transparency, disclosure and regulation of fees by financial institutions managing the Plans have been blocked by the mutual fund industry and employer groups.   The downfall of 401k plans is being blamed by financial gurus on the public (unsophisticated investors playing in the stock market) – an insult to those who saved and trusted the investment options they were given were good ones (they weren’t).

Most of the experts seem reluctant to mention the pressure some corporations put on employees to invest their tax deferred savings into the company.  Enron was one of those who promoted this idea and the result was catastrophic for its employees.  Also seldom mentioned is that 401k plans were designed to provide an additional retirement income that would supplement employer pension funds and Social Security.  In the past 10 years especially, companies have increasingly eliminated their pension plans and encouraged the view of the 401k as THE pension plan.  CEO’s loved it as company contributions were much smaller than previously.

Only now in the current crisis are economic gurus pointing out that the investment options offered by financial institutions managing millions of 401k accounts were often “dogs”.  They were not the best mutual funds, the best stock portfolios – in fact, they were often some of the worst or created only for investment by those in 401k’s.  

Top management companies made spectacular profits selling mediocre investments and charging hidden fees to an unsuspecting working public.  At the same time, these same management institutions were indulging in highly risky sales of derivatives and making huge profits funding bad mortgage loans.  It is hard to understand how the financial institutions responsible for so much harm to the American public is now bailed out as “too big to fail” while those who lost their retirement savings are blamed for their loss.

The problem with 401k’s is not the plan itself but the failure to regulate employers and fund management companies.  They are the reason this supplemental savings plan has become a disaster in the current marketplace yet the current talking points are to blame the worker for making “bad” investments.

That message is only now being spread through the media.  Until the manipulation and abuses of some 401k management companies is fully exposed, many workers are putting themselves at further risk by increasing their plan contributions in the hope the stock market will recover.  Recovery of Wall Street does not guarantee the fund options in those 401k plans will also recover.

Investing? Have More Money to Invest!

Investing? Have More Money to Invest!

After such a catastrophic loss in the stock market, it might seem irrational to even consider jumping back in, while on the other hand, with stocks priced at fire sale prices and even just a glimmer of hope that this economic downturn will end, it might be the perfect time to be an investor. “That”, I leave to you to decide. “If” you are going to invest in the stock market you need to be prudent. A prudent investor should look for stocks with long term growth potential as well as those stocks with a solid history of dividend payments to the shareholders.

This article will explore the tax implications and possible strategies of stock market investing.   In addition to tax free municipals, etc., how does a person maximize their capital and income so as to take additional advantage of the current bull market? There are a couple of methods, some of which are available to the average investor, but some of which, of course, are limited only to the high government policy makers. For example, are you aware that when a person such as Robert Reich (the Secretary of Labor in the first Clinton administration) left the private sector for government service he was permitted to rollover all his investments into a blind fund without having to pay capital gains taxes at the time of the rollover? This little anomaly in the law is not available to the rest of us. Whenever we sell our stocks, bonds, mutual funds, etc., we are hit with capital gains taxes even if we merely rollover the proceeds and make new investments in the market. (Now here’s a tax cut that we all should support! But, that’s another article, or crusade, if you wish).  

So, how else can we maximize our dollars for investment? Those of you who are the designated traders of a foreign stock trading account know that there is no capital gains tax imposed upon the sale of stocks from such an account. The broker is, however, required by the IRS to withhold 30% of all dividends paid on stocks held by a foreign stock trading accounts to insure the proper payment of income taxes. Notwithstanding this requirement, the elimination of the capital gains tax on the sale of stocks held through a foreign trading account will have two important results. First, because no capital gains tax is imposed, the investor will purchase and sell stocks more frequently than a domestic investor. And second, the investor will have more capital available after each sale for future investments, for no capital gains taxes have been deducted.   

Unfortunately, the majority of us are not the designated traders of a foreign stock trading account, so we cannot take advantage of this tax loophole. But, there is another tax break that is available to all of us. Section 243 of the IRS Code (26 USC 243) states a corporation “shall be allowed a deduction equal to” SEVENTY percent (70%) “of the amount received as dividends from a domestic corporation…” unless the corporation, in specific instances, may deduct ONE HUNDRED percent (100%) of the dividends received. (See 26 USC 243(a)). Although the “dividend deduction rate” is currently as listed above, there is a rumor that this deduction rate may be reduced to fifty percent (50%) during the current Congressional session.  

Thus, under today’s law, an individual who receives $10,000 in dividends during his/her tax year must pay taxes on the entire amount received. However, pursuant to Section 243 of the IRS Code, a corporation receiving the same $10,000 in dividends is taxed on no more than $3,000. These tax savings can then be utilized to make additional purchases in the market. And, that is your whole purpose: To have more money available from your investments for future acquisitions.  

Additionally, a corporation’s tax rate is generally lower than an individual’s tax rate. Of course, if the individual is a resident of a state with state income taxes (a situation which occurs in the vast majority of the United States) those taxes must also be factored in and the individual tax rate is even higher. A Nevada corporation, on the other hand, pays no state income taxes, so it pays taxes at only the federal tax rate (15% on the 1st $50,000 and 22 ¼ % average on the 1st $100,000 of taxable income).  

Remember, corporations are “persons” under the law, and can do everything an individual can do. It can own property. It can enter into contracts. It can buy, hold and sell stocks in its own name. And, as mentioned above, it (particularly a Nevada corporation) pays less taxes than an individual does on identical taxable income. As long as care is taken during its organization to make certain the corporation is not classified as a “personal holding corporation” by the IRS, it makes good sense to conduct all your stock market transactions through a stock trading account in the name of the corporation and not as an individual. 

The Best Stocking Trading Programs

The Best Stocking Trading Programs

If you’ve been struggling with making a real profit in the stock or fast paced day trading market, you should consider using the highest rated and best stock trading programs available today for these reasons.

First, the market is going increasingly the route of electronic stock picking software in recent years and will continue in that direction because of the fact that it bases its picks solely on current cold hard market data as well as successful trends of the past. This is of course in contrast to the campaign sabotaging guesswork or emotions which even the more experienced traders let influence and ruin their trades each and every day without even realizing it.

Currently Day Trading Robot would likely be the leader of the best stock trading programs. It finds cheap and safe stocks which are typically going for something like 15 cents a share so that you can scoop up thousands of shares for practically nothing, then watch them turn and sometimes double or triple in value over the course of a day or two.

It does this by using algorithms based on 23 winning trading techniques from James Holt, an expert trader. These algorithms sift through market data and look at past successful stocks/trends and look at the factors which led to that trend and apply them to contemporary market conditions. When they find similar patterns, Day Trading Robot further investigates the stock and once it deems it a sound trading opportunity, it emails you the corresponding information so that you can trade accordingly. Because all of the real work is already done for you, all you’ve got to be able to do to succeed with this system in the day trading or basic stock market is be able to enact a simple trade using an online trading website.