Hond Financial

Posts Tagged ‘invest’

At the age of twenty-three, on one particular day, I was having a conversation with a friend called Tim. He was a person on the same grade as me at work; he was paid the same amount and lived a similar sort of life. Tim told me that he was thinking of buying a flat and that he was going to cash in his investment bond to help fund the move. I was very shocked that he even had a bond and asked him how long he had had the bond, and how he had managed to get the money to put into it. I expected Tim to tell me that his parents had given him the money, but they hadn’t, he had saved up the money himself.

Tim told me that he tries to save as much money as he can per month and normally manages to save at least £100. When he has a £1000 saved in the bank, he then invests the money into a bond.

I was very impressed with Tim and I have to admit a little bit jealous of his money. I then thought to myself, if Tim can save, then so can I. I set myself a goal of saving up a £1000 and planned to do this within ten months. I had to be less wreckless with my money and it would be a good test for me.

It did not prove to be that difficult and it was a good feeling seeing a healthy bank balance for once. After only eight months I had saved my target of £1000. Instead of putting it into a bond, I decided to take an even bigger risk and to buy some shares. I am happy to say that two years later the share price of the company I had chosen to invest in, had risen by sixty percent. This I have to admit was pure luck as I had simply guessed at who to invest in. I chose a company whose share price had reached a new year low after it had reported a bad set of results. I did not just make some sort of crazy punt or gamble. I had looked into the company and had read some interesting reports about how it had changed the management structure etc. I had a good feeling about it and thought what the heck – let’s speculate to accumilate.

This taught me a valuable lesson in life and I have now managed to set up my own stuttering treatment center where I teach people the art of how to stop stuttering. In business and in a personal life it is essential that we save enough money into a rainy day fund in case of emergencies. I am also a partner in an affordable front doors UK business – this is something I really enjoy as it is basically the profits from all of my successful investments.

To his beloved city of Boston, Benjamin Franklin left a fund of ,000 when he died.  His will stated that interest from this fund be allowed to collect for 300 years.The initial investment of ,000 grew to more than ,000 in the 1800s; the balance was invested again for the next century.Benjamin Franklin’s Boston Trust fund in 1959 reached the mark of .5 million!  The Massachusetts Supreme Judicial Court has reaffirmed that the fund should continue until 1991.  In 1990, his gift had grown to over million.  The Pennsylvania legislature used a portion of this $2 million to create Ben Franklin Funds at community foundations throughout the Commonwealth.  Evidently, Benjamin Franklin knew what he was talking about when he said: “Money begets money and its offspring begets more.”

Sometimes, when people have extra cash in their pockets like sales bonuses or payday advances, they have no clue what to do with it.  Most of the time, they end of spending the hard earned money on things they do not really need.Putting money in investments is one of the better ways to spend it.Sad to say, most people are scared of doing investments.  They reason that they know little about investing or get confused with stock exchange numbers and rate charts.  Strip away the intimidating jargon, investing is simple and easy enough to understand even by ordinary people.

For starters, an investment is something people can buy or acquire which has the potential of bringing back more money than the amount they spent purchasing it.  Investment takes many forms: certificate of ownership in a company, a piece of property, a valuable art work, even a debt a friend owes.  All these can generate more money which is called a return on investment or ROI.  What people should learn is how to look for and choose the best kind of investments that would give them, based on the initial resources, the biggest possible ROI.  For instance, if a person takes out a cash loan of $1000, what is the best investment that amount of money could get?  A good, well planned investment would do wonders with this kind of money.

Despite financially hard times, investing is a good way to increase one’s wealth.  Investment companies help a lot in building a good investment portfolio, but nothing beats the advice of people who invest and who have made money from their investments. However, like in all things, people should be cautious so as not to get burned and make disastrous mistakes.

#1 Trading options in only one direction and that’s usually up.

A very common mistake that traders make is options omission. They forget or fail to realize that options trading allows one to make money on falling prices as well as rising prices. By not trading in both directions they leave a lot of money on the table. In effect, by sitting on the sidelines during market downturns, they are leaving half the available action on the table.

Additionally, security prices tend to fall faster than they rise, so some of the biggest, quickest gainers are executed via falling share prices. So if an options traders is not considering short trades for their investment portfolio, they are missing out on some really solid trades.

#2 Not having money-management rules in place.

Another common fault is not following proven money management tactics. Critical metrics arise from guiding principles such as how much should you trade and how much should you risk? Where should you set your stops or in what manner should you hedge?

Solid money management rules control help you to control your trades. And the most important thing is they are helpful in preventing big losses and many sleepless nights.

#3 Letting your emotions dictate your trade entry and exit points.

Too often irrational behavior drives investors into trades that lack appropriate fundamental or technical support. Instead of letting sterile indicator guide their decision making, they operate on emotion or impulse. The fear of price ups and downs makes traders bail too soon and the fear of losing money makes them stay with the trade too long.

Since there is no way to completely eliminate your emotions you must control them. The most realistic and effective way to do so is to develop a set of trading rules to constrict your trading activities and to conduct the majority of your research and trading decisions outside of open trading hours.

Before you start currency trading it is always better to learn the basic from forex books. It is suggested that you either join mentor program like Pip Mavens Inner Circle or read a good book to learn the basics before start currency trading manually or through software like IVYBOT. There are a few printed books that have almost turn out to be classics in the 3 decades that foreign exchange trading has been  an accepted form of speculative investment. Nevertheless, a lot of of these may possibly seem dated now that we have internet fx trading that anyone can perform from home. A book that was written during the days when forex trading was all carried out by the big banks might still be helpful, but it takes some work for the small home based forex trader to employ it to our modern situation.

Lots of books are also available now online in the form of digital file. Sometimes these are standard printed books that the author has changed into an online format, and at times they are ebooks only. For example, the famous Forex Trading Made Ez book is available only in pdf format. You can usually download these straight away onto your PC the instant that you purchase them with no waiting for delivery or spending any transport charge. The advantage of the digital books is that, you can either read them on your notebook or take a print out and read like a regular book.. This can be very convenient.

So how do you ensure that the fx trading book you are planning to purchase is not a rip-off?
As a matter of fact you need not worry too much because it is uncommon for a book or an even an ebook to be a total scam. Usually you will be sent what you paid for. Whether you like what you are sent is another matter, just as with anything that you get from mail order or online. In nearly all cases you can get a refund anyway so it should not be a problem.

There certainly are fx trading scams but they generally consist of individuals trying to get a hold of your investment money. So do not hurry by investing your money with the first forex broker or organization that you see. Check them out through forex forums and reviews for customer feedback, and make sure that they are controlled by authorities in whichever nation they are based in. It is normally best to invest your capital through a corporation in your own country or one that has sufficient laws preventing fraud and scams.

Although your foreign exchange trading book is not likely to be an outright fraud, there are still some books that are a lot more advisable than others. Because of this reason it is worth taking a moment to confirm on the author’s own foreign exchange trading experience before you buy.

Another way to spot scam is to check if the author is  clearly stating about the risks involved in foreign exchange trading. Search for opinion from other folks like you who are utilizing the approach into practice and take a look at their outcome if you can. All of this will help you pick  the best fx trading book to suit your needs from the numerous books that are available.

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These indexes generally only contain major blue chip  stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to quickly buy and sell at the price you want without having a delay. You will also get a lower spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to avoid stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock below $5 at anytime.

Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 A675645879

Did you know that there are 4 mains types of trader and depending on what sort you are will determine many parts of your trading strategy and trading plan. The 4 types are: scalping, day trading, swing trading and position trading. When you determine the type of trader that you are it will also determine the time period in which you will be making your trade. This will be a very important decision that you need to make when deciding how you want to learn to day trade.

1. Scalping Trader, if you scalp the market this means that you are only looking for a few ticks profit per trade and you may only be in the trade for a few seconds or a minute at most. trading. Some people will also call this day trading but it’s really micro day trading, buying the bid and selling the offer, it’s fast trading and you might end up doing 10-50 trades a day. This can be quite a stressful way of trading.

2. Day Trader, the true day trader opens and closes their trade within the same trading session, usually this mean the same day, but unlike a scalper the trade may be held for a few minutes up to several hours. Usually day traders make about 2-5 trades a day and most of them will be in the 5-30 minutes range. This is a less stressful way of trading than scalping but it still requires a lot of attention and quick decision making.

3. Swing Traders, swing trading usually means that a position is held for between 1 to 5-10 days, although some swing traders may keep a trade on for a longer time most are within this time period. For many this is the idea way to trade because it allows you to review your trade overnight, at the very least you have several hours to make your trading decisions.

4. Position Traders, this just means that you are going to hold onto your trade for longer than 5-10 days, maybe even as long as a few months.

If you are still working out how to day trade then it may be better to go with the longer time frames as it gives you more time to think.

A1528561

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a lower spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered very liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to avoid stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock that is below $5 at anytime.

Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option inorder to protect your stock.

Be very cautious about buying a stock just before it’s earnings are released, stocks often drop significantly if they come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 A675645879

Did you know that there are 4 mains types of trader and depending on what sort you are will determine many parts of your trading strategy and trading plan. The 4 types are: scalping, day trading, swing trading and position trading. When you determine the type of trader that you are it will also determine the time period in which you will be making your trade. This will be a very important decision that you need to make when deciding how you want to learn to day trade.

1. Scalping Trader, if you scalp the markets this means that you are only looking for a few ticks profit per trade and you may only be in the trade for a few seconds or a minute at most. trading. Some people will also call this day trading but it’s really micro day trading, buying the bid and selling the offer, it’s fast trading and you might end up doing 10-50 trades a day. This can be quite a stressful way of trading.

2. Day Trader, the true day trader opens and closes their trade within the same trading session, usually this mean the same day, but unlike a scalper the trade may be held for a few minutes up to several hours. Usually day traders make about 2-6 trades a day and most of them will be in the 5-30 minutes range. This is a less stressful way of trading than scalping but it still requires a lot of attention and quick decision making.

3. Swing Traders, swing trading usually means that a position is held for between 1 to 5-10 days, although some swing traders may keep a trade on for a longer time most are within this time period. For many this is the idea way to trade because it allows you to review your trade in the evening, at the very least you have several hours to make your trading decisions.

4. Position Traders, this just means that you are going to hold onto your trade for longer than 5-10 days, maybe even as long as a few months.

If you are still working out how to day trade then it may be better to go with the longer time frames as it gives you more time to think.

A1528561

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These indexes generally only contain major blue chip  stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to quickly buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered very liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to aviod stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock that is below $5 at anytime.

Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option inorder to protect your stock.

Be very cautious about buying a stock just before it’s earnings are released, stocks often drop significantly if they come out with a poor report. Earnings are released 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 A675645879

Bonds are one of the main stream types of investment along with stocks and real estate, and if you want to learn how to trade bonds make sure that you get a good education in the subject 1st. There are certain things you must understand about bonds before you start investing in them. Not understanding these things may cause you to purchase the wrong bonds, at the wrong maturity date.

Like all investments it is important to learn about what you are investing in, and certainly don’t just take the advice given to you by a bond seller without checking it out first yourself. The three most important points that must be considered when purchasing a bond include the par value, the maturity date, and the coupon rate.

The par value of a bond refers to the amount of money you will receive when the bond reaches its maturity date. In other words, you will receive your initial investment cash back when the bond reaches maturity.

The maturity date is of course the date that the bond will reach its full value. On this date, you will receive your initial investment, plus the interest that your money has earned.

Corporate and State and Local Government bonds can be ‘called’ before they reach their maturity, at which time the corporation or issuing Government will return your initial investment, along with the interest that it has earned thus far. Federal bonds can not be “called”.

The coupon rate is the interest that you will receive when the bond reaches maturity. This number is written as a percentage, and you must use other information to find out what the interest will be. A bond that has a par value of $2000, with a coupon rate of 5% would earn $100 per year until it reaches maturity.

Because bonds are not issued by banks, many people don’t fully understand how to go about buying one. There are 2 ways this can be done.

You can use a broker or brokerage firm to buy them for you or you can go directly to the Government. If you use a brokerage, you will more than likely be charged a commission fee. If you want to use a broker, shop around for the lowest commissions!

Purchasing directly through the Government isn’t nearly as hard as it once was. There is a program called Treasury Direct which will allow you to purchase bonds and all of your bonds will be held in one account, that you will have easy access to. This will allow you to avoid paying a broker or brokerage firm.

More advanced traders may try to buy and sell bonds to take advantage of the price movements, you can even swing trade them. But this is a very risky business if you don’t know what you are doing, you will need to take a swing trading course if this was something that wanted to, but again most people just buy and hold.

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