It is hard to imagine if anyone is living without money and it is equally hard to imagine if humans are living without investing in someway or the other. In plain language, investment means the act of investing or laying out money or capital in an enterprise with the expectation of profit. But at the same time the term investment also means money that is invested with an expectation of profit.
Investment is closely related with earning money and employing it to earn more by its virtue of its inherent multiplication factor. It is this character of money (read investment) which drives people invest in various asset types in which they are comfortable with. As a general rule, it is not quite natural for the novice investors to pursue high return investment categories as they perceive the high element of associated risk is beyond their control.
The Big Question: Could You Do Without Investment?The answer is rather simple as everyone from top down has wanted to invest in one asset or the other. The more conventional the asset type is more the investors and thus investment. Let me detail this out for you.
Traditional investments like investment on gold and land have never let down the investors although rate at which they appreciated was below par till recently. But come to think of it; the simplicity of prediction matrix and non volatile nature of their class made them the darlings of one and all.
Current Investment Scenario
The current investment arena is extremely wide and intricately interdependent. The simplest investment by far, the savings account, contributes to the pool which bank draws from, for advancing loans to a variety investors. Thus the return on your investment (savings) is connected to the return the bank expects. Floating rate of interest is one of the manifestations of this interdependence
Investment Options for You
It is impractical to attempt to list out all investment types. However the following are the representative types which apply to all economies.
1. Investment on stocks and securities
2. Investment in money market instruments
3. Investment in mutual funds
4. Investment in ventures
5. Investment in insurance
Speculative Investment
It is difficult to foretell how and why people make investment decisions. Also it is not true that investors play safe every time. Speculating a higher than usual and short term profit is none too unusual tendency with some. Such an investment type is classified as speculative investment. Although it beats logic, it goes by gut feeling of investors. Many stock investment and real estate speculators have made big time money taking tremendous risk.
By NamSing Then
Saturday, November 18, 2006
Thursday, November 16, 2006
Trading Without a Mentor is Like Flying Blind
Bill Gates, the richest man in the world, often talks about his mentor Warren Buffet, who just happens to be the world's most successful investor. It is well documented that Buffet was mentored by famed investor Benjamin Graham who is known as the father of value investing. Many businesses have formal mentor programs as its benefits have been proven over and over. Successful people often mention that a prime reason of their achievement was having a mentor. So, if the Gates and the Buffets of world have mentors, so shouldn't you have one? I would like to suggest that trading without a mentor is like flying blind.
I can imagine the reaction of many readers. They are saying, "That sounds good, but where in the h..... am I, an individual trader, going to find a mentor - smart a...." I can understand that response. If you worked on Wall Street, I imagine that it wouldn't be much of a problem. There you will find many like-minded traders that could be called upon to serve as your mentor, but how about on Main Street? How many successful traders do you know? I know a few who have tried, but I don't know of many that have been able to survive for more than a couple of years. The market is brutal and it takes no prisoners. Also I believe a successful mentorship requires a like-minded trading philosophy. There are some aspects that transcend trading styles, but how much can a day trader learn from a value investor? So, the probabilities of personally knowing a like-mind successful trader that could serve as your mentor are pretty slim.
So, what are your alternatives? If you know Warren Buffet well enough to ask him to be your mentor - you probably wouldn't be reading this article. However, he has written numerous books. So, by studying his works you could develop a rather one-sided mentorship. I am willing to bet that even if you purchased all of his books; he still wouldn't take your phone calls.
I have heard of trading coaches that you can hire. At least since you are paying them, they will take your phone calls - but probably not before 4:30 PM. I can't imagine a trader being distracted during market hours with your problems. Your distraction could cost them much more than they could charge you. I have never looked into such programs, but I would think that they could be valuable.
The ideal trading mentor is probably not practical for most. I have settled for a pseudo-mentor approach. So, what does that mean? I believe that there are three criteria for a trading mentor. He or she must be successful, must have a like trading philosophy and be "somewhat-available." The "somewhat-available" is why I call it a pseudo-mentor relationship.
Over the past 5 or 6 years I have tried to force-fit different trading services into this concept of a pseudo-mentor. It is quite easy to find newsletter writers that claim to be successful. Matter of fact, I have never heard one claim to not be. The beauty of the market is that it is measurable. If the newsletter is claiming to be the greatest thing since sliced bread, it won't take long to determine if they are only blowing smoke. Also like-minded services are easy to find. There are newsletters for day traders, trend traders, momentum traders, fundamental investors, contrarian investors, all styles are covered. The difficulty is availability. Most aren’t available. Most won’t return your emails. Most only want a one-way street. That’s almost like reading Buffet’s books. However, the newsletters are more frequent, weekly or monthly, thus having a higher impact on your daily trading.
To addresses the availability, you can try an online trading room. No, I am not talking about Yahoo message boards. Online trading rooms are legitimate trading services where the leaders exchange ideas and provide assistance to others. It is not like having a personal mentor that is available only for you, but you can bounce ideas off of someone before making the plunge.
For the past two years, I have been using Jack Chan’s trading service that fits between a newsletter and on-line trading room. He provides almost daily updates as well as email support. For me, this is perfect. I don’t need much hand holding, but I do have questions on occasion that he answers quite promptly. These questions are typically quite focused, so he is not going to help you develop a trading philosophy. He is also not a financial advisor so he won’t help with portfolio allocations and such. However, if you are thinking about shorting and his cycle indicators have just turned up – he will advise against doing that.
So, how does Jack stack up versus my three requirements? First, he is successful. I have used his service for two years and can attest to his success. Secondly his trading philosophy is consistent with mine. He is a trend trader and only trades Gold, Oil and Technology stocks. I trade those as well as Base Metals and Water stocks. Finally, he is "somewhat available." His email service serves me well. This is not the classic mentoring relationship, but it beats flying blind.
By Michael Dawson
I can imagine the reaction of many readers. They are saying, "That sounds good, but where in the h..... am I, an individual trader, going to find a mentor - smart a...." I can understand that response. If you worked on Wall Street, I imagine that it wouldn't be much of a problem. There you will find many like-minded traders that could be called upon to serve as your mentor, but how about on Main Street? How many successful traders do you know? I know a few who have tried, but I don't know of many that have been able to survive for more than a couple of years. The market is brutal and it takes no prisoners. Also I believe a successful mentorship requires a like-minded trading philosophy. There are some aspects that transcend trading styles, but how much can a day trader learn from a value investor? So, the probabilities of personally knowing a like-mind successful trader that could serve as your mentor are pretty slim.
So, what are your alternatives? If you know Warren Buffet well enough to ask him to be your mentor - you probably wouldn't be reading this article. However, he has written numerous books. So, by studying his works you could develop a rather one-sided mentorship. I am willing to bet that even if you purchased all of his books; he still wouldn't take your phone calls.
I have heard of trading coaches that you can hire. At least since you are paying them, they will take your phone calls - but probably not before 4:30 PM. I can't imagine a trader being distracted during market hours with your problems. Your distraction could cost them much more than they could charge you. I have never looked into such programs, but I would think that they could be valuable.
The ideal trading mentor is probably not practical for most. I have settled for a pseudo-mentor approach. So, what does that mean? I believe that there are three criteria for a trading mentor. He or she must be successful, must have a like trading philosophy and be "somewhat-available." The "somewhat-available" is why I call it a pseudo-mentor relationship.
Over the past 5 or 6 years I have tried to force-fit different trading services into this concept of a pseudo-mentor. It is quite easy to find newsletter writers that claim to be successful. Matter of fact, I have never heard one claim to not be. The beauty of the market is that it is measurable. If the newsletter is claiming to be the greatest thing since sliced bread, it won't take long to determine if they are only blowing smoke. Also like-minded services are easy to find. There are newsletters for day traders, trend traders, momentum traders, fundamental investors, contrarian investors, all styles are covered. The difficulty is availability. Most aren’t available. Most won’t return your emails. Most only want a one-way street. That’s almost like reading Buffet’s books. However, the newsletters are more frequent, weekly or monthly, thus having a higher impact on your daily trading.
To addresses the availability, you can try an online trading room. No, I am not talking about Yahoo message boards. Online trading rooms are legitimate trading services where the leaders exchange ideas and provide assistance to others. It is not like having a personal mentor that is available only for you, but you can bounce ideas off of someone before making the plunge.
For the past two years, I have been using Jack Chan’s trading service that fits between a newsletter and on-line trading room. He provides almost daily updates as well as email support. For me, this is perfect. I don’t need much hand holding, but I do have questions on occasion that he answers quite promptly. These questions are typically quite focused, so he is not going to help you develop a trading philosophy. He is also not a financial advisor so he won’t help with portfolio allocations and such. However, if you are thinking about shorting and his cycle indicators have just turned up – he will advise against doing that.
So, how does Jack stack up versus my three requirements? First, he is successful. I have used his service for two years and can attest to his success. Secondly his trading philosophy is consistent with mine. He is a trend trader and only trades Gold, Oil and Technology stocks. I trade those as well as Base Metals and Water stocks. Finally, he is "somewhat available." His email service serves me well. This is not the classic mentoring relationship, but it beats flying blind.
By Michael Dawson
Tuesday, November 14, 2006
Forex? What is it Anyway?
The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover.
Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.
How does one profit in Forex?
Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.
Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.
You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.
How do I start?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.
It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).
How do I trade Forex?
You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).
Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.
When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.
Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we'll be glad to guide you, every step of the way.
by Henry Carlow Jr
Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.
How does one profit in Forex?
Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.
Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.
You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.
How do I start?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.
It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).
How do I trade Forex?
You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).
Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.
When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.
Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we'll be glad to guide you, every step of the way.
by Henry Carlow Jr
Keys to Trading Success: Know Thyself
This past weekend, I spent several hours perusing some older trading texts and noticed that there were several chapters that applied more today than when they were written decades ago. Those were the chapters dealing with the psychology of trading and the traits make one successful.
Successful trading hinges on your psychology and the bottom line is that if you don't know who you are, nobody else does either. The chances of you becoming a successful trader are pretty remote.
Trading is an occupation where you must be a realist. Dreamers need not apply.
The list of traits that make up a successful trader isn't very long but it is complete. Think about the traders you know. Which ones are successful? Which ones aren't?
The traits that make up successful traders are:
1. They are rugged individualists. I'm not talking about Grizzly Adams here. What I'm talking about here the type of person who stands on their own 2 feet. They don't need a support group behind them giving their self-esteem a boost. 2. They are determined. Successful traders have a strong will. Trading is a difficult business and has a lot of ups and downs. People who lack the will to succeed won't. You must stick it out through the good and the inevitable bad times. 3. They are loners. What I mean by this is that the successful trader doesn't ask for a lot, especially favors. Quiet contemplation is a key to success. They have a job to do and they get it done. Not a lot of fanfare - that type of stuff. 4. Successful traders are avid readers (to a fault). They read everything that they can get their hands on related to trading, investing and current affairs. It doesn't stop there - they also read in a lot of unrelated fields as well. 5. Successful traders are adept analysts. Not in the fundamental or technical sense. They have the ability to step back and analyze their actions. What's going right and wrong? How can I improve? This kind of thinking allows a trader to be pro-active instead of re-active. 6. In the same vein, successful traders are meticulous record keepers. The keep daily trade sheets, daily journals and post trade books. The ability to study past trades (both good and bad) can't be overstated. 7. Successful traders aren't bashful about asking others for their opinions. Gathering information from other sources allows you see the other side of the coin. Perspective matters. In the end, the only opinion that matters is the one belonging to our trader. The decision to make the trade (or not) rests with them and only them. 8. When it comes to talking about trading, successful traders are pretty tight lipped. If they talk about it at all, it's to gain insight into what went wrong and how to fix the problem. I like to pick the brains of other traders. What's working for them? Have they ever encountered what I did wrong and if so, how did they fix it? 9. The final trait that all successful traders have is that the buck stops with them. They accept total responsibility for everything that they do and they never make excuses.
In my lifetime, I've never met a natural born trader. I have met natural born gamblers, but that's a topic for another day. All of the traits that a trader needs to be successful can be learned and acquired with a little effort.
In the end, successful trading is about knowing yourself, pursuing the truth and expecting the best.
by R.A. Christy
Successful trading hinges on your psychology and the bottom line is that if you don't know who you are, nobody else does either. The chances of you becoming a successful trader are pretty remote.
Trading is an occupation where you must be a realist. Dreamers need not apply.
The list of traits that make up a successful trader isn't very long but it is complete. Think about the traders you know. Which ones are successful? Which ones aren't?
The traits that make up successful traders are:
1. They are rugged individualists. I'm not talking about Grizzly Adams here. What I'm talking about here the type of person who stands on their own 2 feet. They don't need a support group behind them giving their self-esteem a boost. 2. They are determined. Successful traders have a strong will. Trading is a difficult business and has a lot of ups and downs. People who lack the will to succeed won't. You must stick it out through the good and the inevitable bad times. 3. They are loners. What I mean by this is that the successful trader doesn't ask for a lot, especially favors. Quiet contemplation is a key to success. They have a job to do and they get it done. Not a lot of fanfare - that type of stuff. 4. Successful traders are avid readers (to a fault). They read everything that they can get their hands on related to trading, investing and current affairs. It doesn't stop there - they also read in a lot of unrelated fields as well. 5. Successful traders are adept analysts. Not in the fundamental or technical sense. They have the ability to step back and analyze their actions. What's going right and wrong? How can I improve? This kind of thinking allows a trader to be pro-active instead of re-active. 6. In the same vein, successful traders are meticulous record keepers. The keep daily trade sheets, daily journals and post trade books. The ability to study past trades (both good and bad) can't be overstated. 7. Successful traders aren't bashful about asking others for their opinions. Gathering information from other sources allows you see the other side of the coin. Perspective matters. In the end, the only opinion that matters is the one belonging to our trader. The decision to make the trade (or not) rests with them and only them. 8. When it comes to talking about trading, successful traders are pretty tight lipped. If they talk about it at all, it's to gain insight into what went wrong and how to fix the problem. I like to pick the brains of other traders. What's working for them? Have they ever encountered what I did wrong and if so, how did they fix it? 9. The final trait that all successful traders have is that the buck stops with them. They accept total responsibility for everything that they do and they never make excuses.
In my lifetime, I've never met a natural born trader. I have met natural born gamblers, but that's a topic for another day. All of the traits that a trader needs to be successful can be learned and acquired with a little effort.
In the end, successful trading is about knowing yourself, pursuing the truth and expecting the best.
by R.A. Christy
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