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The stock market crash of 2008 lost many investors a lot of money, and had many other investors bailing out of stocks for the safety of savings and checking accounts, treasury bills and gold. However, it is still possible to invest - and yes, even make money - during the current rocky economy.
The broad decline across financial markets in the past year has persuaded a small but growing number of financial experts and advisers to ditch the traditional buy-and-hold strategy - which promotes long-term investing in a mix of assets - for a new approach that aims to sidestep future market plunges and ease instability.
What does this mean to the common everyday investor? Read on for some investment advice that everyone can use.
Be Informed
First and foremost, the best investment advice you'll ever receive is to take control of your own future. You are the only one who will have your best interests at heart. Even if you do not understand exactly how to invest your money or don't feel comfortable doing it yourself, an investment advice site such as MySMP.com can get you on the right path to getting the right advice and asking the right questions.
Take an Active Approach - Buy and Hold is Out
A common misconception about the stock market is to just "ride it out." Don't sell and eventually your stocks will go back up, right? Wrong! If a financial advisor suggests that you need to take a long term buy and hold approach, you should run. They probably don't understand how to invest the right way and figure that the market will go higher over time. You want to hear answers suggesting that the investment advice you will be receiving is based on a sound understanding of the financial markets; including concepts such as technical analysis and options hedging.
As we learned in 2008, established stocks such as Lehman Brothers and Bear Stearns can go at anytime, so do your research and find out which sectors have the most potential 2-3 years out. These are sure to be your best investment.
Diversify Within Different Assets
Don't put all of your money into stocks, true diversification is asset class diversification; including stocks, bonds, commodities, and currencies to name a few.
401k Plan Investment
Here are a few pieces of investment advice when considering a 401k plan. First, contribute the full $15,500, or deduct 15% of your gross pay, to your 401k plan if you can. This is tax free money, and it's a no brainer. If you cannot make the full contribution, be sure to at least contribute in an amount equal to your companies match. If your company matches 6% and you only contribute 3%, they will only match 3%. If you are coming near the age of retirement and can't afford to lose any more money in your 401k, get out of stocks funds and move your money to money market. If you are not comfortable investing money into stocks, put it into a money market fund within your 401k; the key is not to stop investing.
If you are going to manage your 401k assets, make sure you diversify between different asset classes, if possible. Unfortunately, you are typically limited to stocks and bonds. If you don't have options such as commodities available to you, go talk to your plan sponsor and push to get some more selection. When you leave your company, be sure to transfer your funds to a rollover IRA; you will be able to trade any asset class here.
In Summary
There is no one size fits all answer to investing and you're probably not interested in becoming a full time money manager. Investment advice is always easy to come by but good advice is very hard to come by. The key is to put people around you who have a good track record and know how to invest with capital preservation in mind at all times. Never get involved with people who promise you the world. Odds are they will do well for a while but their ego will eventually blow up in their face.
Some say that "Money is the root of all evil" but still, you can't deny the fact that you need money in order to survive in this world. Without money, you can't buy food, shelter, clothing, and the other necessities of life. If you want to live comfortably, you must have a stable source of income. Aside from your job, you can also earn additional income through stocks trading.
If you want to be successful in stocks trading, you must be involved in day trading because that's one way of earning huge profits. For those people who don't like long term investments, day trading might work for you. By investing in day trading, you can expect the profits to be reflected in your account the soonest possible time. This is also the reason why day trading is very much popular these days.
Like other trades, day trading also involves risks. If it is possible to earn huge profits in one day, the chances of losing huge investments are enormous as well. As a trader, you're not expected to remain active at all times. Did you know that with a very good negotiation strategy, you can earn huge money in seconds, minutes, and hours? That is indeed possible but it will take time. You should not rush things when you're studying the market. Take your time because after careful and thorough market analysis, you can make a good deal. It's up to you whether you will only make one transaction per day or several transactions.
Studying market trends is also very important. Some value of stocks tends to rise continuously and if this is the case, a trader may buy the stock with the hope of selling it at a much higher price later on.
Before making any transaction, there are things to consider like:
1.Stocks can be very unpredictable. If you want to buy a stock and hope to sell it at a higher price, you need to monitor or check the computer often. Frequent observation is needed so that you can make an informed decision. Your internet connection should be reliable so that you won't lose in any of your transactions.
2.Beware of day trading because even if you earn huge profits today, there is still a possibility of losing even a larger amount in the days to come. If you've committed mistakes in the past, you need to learn from them. Risking your investments is not a good idea so try to be very careful with all your transactions, online or offline.
3.You must be patient. Again, you must always take your time and don't be hasty with your buying or selling decisions. If you're unsure of a certain transaction, get out immediately.
Indeed, day stocks promises a lot of profit to those who are willing to take risks but this doesn't mean that they can simply make uneducated decisions. Investing in day stocks requires careful thought and analysis of the market trends, along with other factors.
Try to consider the things mentioned earlier especially of you're into day trading. Beginners need all the help they can get because day trading is not very easy. Gather as much information as you can about day trading. You can find a lot of information about stocks trading online. Start your research now so that you will know how to conduct day trading and understand the processes involved.
Many forex traders like to incorporate forex breakouts into their overall trading strategy because they can be extremely profitable. When a price finally breaks out of a tight trading range, many traders tend to jump on board and carry the price further away from this trading range, which is why this strategy is so effective.
One of the most popular ways of trading these breakouts is by focusing specifically on overnight / opening range breakouts. By that I mean the opening hours of the new trading day. I myself tend to focus on the hours between 00.00 and 06.00 GMT and predominantly concentrate on the British and European-based pairs such as the GBP/USD and EUR/USD pairs, for instance.
These hours are notoriously quiet and yet these few hours before the busy opening session set the tone for the rest of the day. You will often find that the price will stay confined in a fairly tight range during these six hours or so and when the UK and European markets open, the price will trend significantly in one direction and will often break strongly out of this initial trading range.
Therefore a profitable strategy is to open a long position when the high point of this opening range is breached and open a short position when the low point is breached. There are various ways you can put this system into practice. You can either open a position as soon as the price crosses the line or as soon as the breakout candle closes, or you can wait for a pull-back and then jump on board if the price continues to move in the direction of the initial breakout.
All of these methods tend to work quite well and there is a logical reason why this is the case. The fact is that every currency pair has an average daily range, ie the average number of points between the high and low points for a given trading day. So on those days where the opening range is very narrow, this initial range will be a mere fraction of the overall average, so therefore you can expect some big price moves to occur during the rest of the day either above or below the overnight range.
So if you are looking for a simple forex trading system (that doesn't use any complicated technical indicators), then I can definitely recommend you consider trading breakouts from overnight trading ranges because this can be a very profitable strategy.
Mini forex trading is perfect for newbies in forex and with those who have a little amount of capital available at present. What the mini-account does is that it allows them to trade with real money, as it also limits their risk in trading. With a mini-account, the lot size of trades is only one-tenth of the actual lot size for a standard account, and with the same broker too.
Now, newbies to forex has three options:
(1) they can start out immediately with live trading in a standard broker account, wherein they can invest ranging from $1,000 to $5,000 (gives a great deal of risk for a novice and therefore not recommended);
(2) they can start with live/actual trading in a mini-account (In general, they'll need around $250 for this, but there are always brokers who'll let them start with a lower cost); and
(3) begin with a demo account as they pick up their trading skills without investing any real kind of money, then as they go on and continue in making good profits, they have the option to switch between a mini-account or a full brokerage account (depending on the capital that they have and their strategies, of course).
As for the advantages of the mini-account, most users will choose the third option, which is the demo account. Why? It's because it's really much safer to use toy money rather than real ones online for days, weeks or even months! With a demo account, they will be given an opportunity to try out different kinds of strategies in trading. But, on the other hand, running a demo account for too long can impose a false sense of security to the user, as they may be practicing with the strategies that may not be really effective when it comes to the trading in real life.
So what this kind of account does is that it teaches the trader to make profits out of medium to high risk strategies, but when the time comes that they get to face a real money situation, possibility is that they may lose their confidence, which results to poor decision-making and strategy-hopping, wherein they continually go from one plan to another. Loss of profits can't be avoided in this scenario.
In lieu to this, what some experts advise is to start using a mini-account and use real money almost from the very beginning (they can use the demo account when dealing with a few trades so as to get familiar with the technical stuff of operating their own account and making different trades). Through this, they will be able to learn the techniques and the skills necessary that will work for them on a long-term basis.
The mini-account has also its disadvantages. As the newbies trade small amounts, they are to pay more percentage terms to their chosen broker. Now, this will truly affect their profits negatively, which can have a great impact on their side. With this, those who use this kind of account will switch over to higher value trades whenever they have the capital to enable them to do so.
Beginners should always keep in mind that forex trading is by nature a very risky kind of business, as it gives them the possibility to have large gains in a short-term basis. So, they should invest the amount of money that they are, in a way, ready to lose when the time comes that things will go against their favor. The mini forex trading account is truly great for beginners and is the best way to find out whether or not forex trading really is the thing for them.
What is it?
Online stock trading allows you to buy and sell stocks from the comfort of your home or office without having the hassle of having to call your broker every time you want to trade. For doing online stock trading you need to have a computer with a sufficiently good internet connection and an online broker, through whom you would make all such trades. It allows you to trade stocks at your discretion and also saves you a lot of commissions.
Choosing an online broker
There are a huge number of online stock brokers available, who would be only too happy to let you set up a trading account with them. What you need to look for in a broker to help you with your online stock trading is information that most of them would readily give you so that you become one of their clients for online stock trading.
You need to know the minimum investment necessary to make for starting in online trading. Make sure that there are no fees if there is no activity on their site for whatever reasons. Get their full list of commissions/fees which you would need to factor in every time you make a trade. Some online brokers also help you out with your online stock trading by offering you tips and suggestions, and their own outlook on the market and its prospects.
Opening an account
Opening an account with an online broker is generally a simple affair and can even be done online. You would however have to provide all the necessary paperwork and open an account with the stock exchanges, which will allow you to get all your stock price quotes electronically. The online broker may even have his own enrollment or other fees, for you to gain access to his online network so that you can trade in shares. You would also have to provide a wire transfer link to your bank account so that funds can be transferred both in and out of your account, in order to allow you to carry on the activity of online stock trading.
Most online brokers require that you deposit funds with them to start the trading activity. Initially, it's possible that you may only be allowed to trade in the underlying stocks. Trading options on futures, forex, may require additional registration documents and procedures as this is considered to be very high-risk trading. Also, if you intend to trade on margin, there may be separate documentation and funding requirements for this. Check all this with your broker.
Be cautious while trading
Online trading involves that you exercise the same amount of care and caution that you would in other trading activities. It may require even more caution, as you are on your own and the action of buying and selling is instantaneous. You need to constantly monitor your portfolio. Fortunately, the online broker you have opened an account with will make this easy for you. They have plenty of powerful analytical software tools which keep your portfolio updated on a minute to minute basis, and give you all the risk parameters you need. They also have tools to enable you to analyze and study any particular stock in depth to ensure that you are in the best position to make the right trading and investment decisions.
When the \"average Joe\" decides that he wants to purchase some stock, it is usually beyond him what stock to purchase. There are so many out there, and they do not look like sound investments because buy one share you have to pay such a ridiculous price. There is a way though. The Securities and Exchange Commission (SEC) offers a whole category of stocks from companies that sell below $5 a share. They are called Penny Stocks.
Penny Stocks trade for such a low price because they are from companies that are new, have small value, or have lost a lot of value. Most of these companies are under the radar and so they have not gotten a lot of buzz from the regular news shows that promote certain stocks. They also do not have the same hype because they have not been around as long as some other companies. However, when deciding to purchase a stock these may be the way to go.
Some features of these stocks may not be as attractive as the more established \"blue-chips”. Blue chip stocks come from companies that are well established and have to follow certain guidelines to be a member of one of the more recognized exchanges. This does not mean that the companies that sell their stocks at below $5 per share are trying to pull a fast one; they may be as solid as any of the larger companies. However, they are not as recognized. Small companies have to start somewhere and so they usually peddle their wares on the Over the Counter Bulletin Board (OTCBB) or on Pink Sheets. These two exchanges deal exclusively with Penny Stocks. They do not have some of the oversight that the other exchanges do, but they do offer stock at prices anyone can afford.
Like any other investment, you need to do your research. Yes, there are fraudulent practices perpetrated with these low price stocks, but there are with the big boys too. The companies usually are not involved in any fraud, but the low price of the stocks makes them an attractive target for unscrupulous types. Many of the stocks that sell at these low prices are from sound companies that have a high amount of money invested by the workers. This is important because if they are making the product and investing in the company’s future, since they have the most knowledge of the company, it is easier to trust that company. Outsider who sees a possible patsy in a small company that is trading at a small price and tries different ways to manipulate the price does the fraud. Just do not jump into something without proper research.
Penny Stocks can be a great investment for someone with out a lot of money to spend. In addition, in these times they may actually be a better investment that some of the big companies. Make sure you research the company, follow seasoned advice, and have some fun with it.
Many investments may seem out of reach. Unfortunately, land is priced out of the range of small investors many times, blue chip stocks sell for hundreds of dollars, and you don't have any gold jewelry to turn into ready cash. Small investors do not seem to have very many options. Just stay in your 401k and save until retirement. However, this is not entirely true. There are Penny Stocks.
Penny Stocks are those that sell for less than $5. They are particularly attractive because not only do they sell small, but also they are volatile enough that you may end up with a boatload of money with a single day of trading. This volatility can also cause one to lose his or her shirt also. There are some precautions that need to be taken and tips that can make the whole process easier.
First, how can I find them? Penny stocks can be sold on any of the exchanges, but they are mostly listed at either the Over the Counter Bulletin Board (OTCBB) or the Pink Sheets. These tow exchanges are specifically designed to handle Penny Stocks List. They can be accessed via the internet (like any other exchange) and are traded in the same way. These two companies do not require the same level of oversight that the NYSE and NASDAQ do, but they still have some good stocks.
Is it safe? Well there is risk associated with any investment. I mean, your house could burn down today. Your 401k might tank because the blue chip stocks that it has in its portfolio are hemorrhaging money. No investment is completely safe. However, there is a lot of volatility associated with these stocks. The reason for that is that they trade at such a small value. If you buy, for example, IBM and that company makes a 1% gain you have had a good day. For the micro caps, if they gain a $1 you could have just recognized a 100% gain. See the attractiveness. Unfortunately, there are also sharks in the water. It is easy to manipulate the stock because it sells small. Do some research about the company, and do not trust to Internet ads.
Can I make money? That is the most attractive feature of Penny Stocks List. You can make a lot of money. Because they sell so low and are so volatile, it is possible to make a large amount of money on a very small investment. All you have to do is watch the trends of the particular company that you wish to invest in. A lot of the smaller these days are involved in Biotech or some other sort of technical endeavor. These companies may be relying on one product to put them over the top. They ask for investors so that they can fund the research. After the product is launched, you could realize a large return on investment.
Therefore, it is possible to make money and be safe with Penny Stocks. However, the only person who is going to protect your money is you
