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Posts Tagged money management

How to Get Debt Free With Bad Debt Consolidation

Dec 28

Posted by admin in Debt Consolidation

Times have become extremely difficult. As many families face trying financial times from illness, losing their jobs, and having less money coming into the household, it is hard to make ends meet. Some of the luxuries we enjoyed have gone away and it is hard to meet financial obligations. This can cause added stress, worry, and grief. You do not have to let all of the weight lay on your shoulders. Thinking of bad debt consolidation options may be beneficial.

If you cannot pay bills on time if you pay something, it can help. Disregarding letters and mail that you get, will not help improve your situation. A bad debt consolidation can assist you. By keeping a list of who you owe, how much you owe, any APRs, balance and contacts is a way to stay on top of your financial situation regardless to how bad it looks.

A listing presents a clear picture of your financial situation to a bad debt consolidation counselor who can help you. If you have not worked with a professional credit counselor before, do a little research on the internet to see the variety of companies out there and read how they can assist you and how they have helped other people get out of a financial crunch.

The first step a bad debt consolidation company makes is contacting the creditors on the list. This is their area of specialty and they will work hard at negotiating new terms to fit within your current budget.

Many credit counselors working on your behalf are knowledgeable and know how to work with creditors on your behalf. Most creditors are willing to make a settlement in an effort to get payments started again.

Once this process is done, the bad debt consolidation program will compile all of the balances giving you one total amount owed with one monthly payment. The monthly payments are directed to the debt consolidation company until the balance is paid in full. They will disperse the funds to the creditors on your behalf to get you debt free.

There are different types of credit counseling agencies. Many include a monthly handling fee in the payment you make. This is to cover the work they are doing for you and the maintenance. There are a few non-profit agencies that have counselors that provide advice and free consultation but the legwork will have to be done by you.

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Understanding Loan Consolidation for Business Owners

Dec 15

Posted by admin in Personal Finance

Owning a business is never easy especially if you’ve just started your business. Many business owners have to take a loan or get a credit card to start their business. Many businesses owners find out that it’s very easy to get in debt. There is a solution to help business owners get their business’s finances back on track. If you have loans and credit cards then you should consider getting a consolidation loan. A consolidation loan can help by combining all of your business’s debts into one monthly payment with one interest rate rather than having to try to pay them all at the same time.

Before you ask for loan consolidation, you should make sure all of your finances are organized. Sometimes this can be very difficult, especially if you have no experience in a business setting. To help you get a good deal on a loan, and the one that’s best for you, make sure you have a statement that verifies your businesses income, its expenses, and all of your debt. Your debt statement should also include the interest rates that you are paying. By looking at these your lender will be able to figure out the best course of action for you.

Many banks offer business consolidation loans for small businesses. You should go to the local branch of your bank and speak with a loan officer there. Many times a loan officer will be able to help you find a consolidation loan. Each financial company has certain criteria that you will need to meet to be able to get your loan. Although the loan officer may not be able to tell you what that criteria is, he may be able to give you some general rules of thumb that the bank goes by. If you’re considering getting a consolidation loan with the bank then you’ll need to fill out an application while you’re there. Before you fill out the application you should ask what the interest rate ranges are for the loan and the term length ranges.

Sometimes nonprofit organizations provide ways for small business owners to obtain consolidation loans. The Small Business Administration is one such organization, and they are able to help you with many aspects of running your business. By searching online you may be able to find other organizations and companies that can offer you help.

After checking through your various options you will need to pick a financial institution or organization that you will want to get the loan through. Start by filling out an application and including the documents that were mentioned above. You may want to even create a document with the time frame in which you plan to pay the lender back.

Sometimes it is better to just get a second credit card. Some business credit cards have great interest rates, allowing you to avoid interest for a few months. If you think you can pay off your debt before the credit card starts getting interest, this could be a great option for you. This particular method works very well if you have a small amount of debt, and it can help bypass the higher interest rates you would have had to pay.

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Using Stock Research And Stock Analysis Services

Sep 29

Posted by admin in Investing, Stocks Mutual Funds

I consider my community a stock market research and education service that is offered to anyone interested in learning how to invest in the market for themselves. I do not manage money and I do not make specific stock picks for anyone in my community. I like to believe that this service is different from most of the stock market services offered on the internet because I aim to teach you how to invest in the market so you do not have to depend on my research for the rest of you trading life. I teach a method, a philosophy that I have developed so you can build a foundation for success; but you the investor must personalize your own system and perform your own due diligence and test what works for you and your trading characteristics and emotions.

It is easy to lead an individual to water but I can?t force this same individual to drink the water if they are thirsty. The same logic holds true for the stock market because I can show you how to invest successfully but you and ONLY YOU can make the proper decisions to show a profit at the end of the year.

I always wonder how many of my members take the opportunity to make money from our MSW Index stocks. This past weekend (12/3/05), I asked them to look in the mirror and be honest about their results over the past year (and their decisions since the rally was confirmed weekly on MSW on 10/22/05). Since we confirmed the rally on October 22, 2005 (on the weekly screen) our MSW Index stocks have been up over 17% as a group (this groups contains 18 stocks that were listed on the weekly screen on 10/22/05 ? very impressive results for so many stocks).

The Index has provided us with many buying opportunities at moving average support, consolidations and pivot point breakouts. Since the last weekly screen (November 19, 2005), the MSW Index has advanced by 6.25% with only two stocks falling for a loss (CRDN and FORD). Forward Industries was the largest loser, falling 6.13%. Our best gainer over the past couple of weeks was LMS which was up 23.25% on big time volume. Of the 26 stocks on the MSW Index, eight of them were up more than 10% while another three stocks were up at least 5% or more. Things move so fast in the market, it is tough to sit back and realize how successful our MSW Index stocks have performed in 2005 versus the rest of the market. A new page will be added as the year closes that will update the performance of the MSW Index versus the major market indices (NASDAQ, DOW, S

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The Money Management Question: How Much Can I Lose?

Sep 26

Posted by admin in Investing, Stocks Mutual Funds

Disciplined money management makes the difference between success and failure in investing. When considering an investment, too many people ask, \”How much can I make?\” That\’s the wrong question. The right question is \”How much can I lose?\”

Let\’s take the stock market for example (although proper money management applies to all investments). If you buy a stock at, say, $20 a share you typically do so with the hope and expectation that the stock will go up to $30, $40, $50, or more. But what if that doesn\’t happen? What if the stock goes down to $15 or $10.

Since a decline in the stock price wasn\’t expected, you may start rationalizing. \”Well, if I liked it at $20, I must love it at $15.\” Or, \”I\’m a long-term buy and hold investor, so I\’ll just wait until it goes up.\” Or, \”I can\’t sell now because I would have to take a loss. I\’ll just wait until I break even and then sell.\” The problem with that kind of thinking is that the stock may never be profitable. It may never allow you to break even. And you end up selling for a big loss or tying up capital in a losing investment.

No matter how much research you do and no matter how refined your analytical abilities may be, the truth of the matter is that some stock positions are going to be losers. So your best bet is to practice sound money management by taking the decision making process out of the question, \”How much can I lose?\”

The 3% Solution

Here\’s how you can answer the question of how much you can lose before you buy a stock. Determine the number of shares you will purchase based on the amount of money you have to invest, the difference between the price at which you purchased the stock and the price you want to exit the position in case it goes against you, and the percentage of your money you want to risk.

For example, let\’s say you have a $25,000 account. Let\’s also say that you want to buy a $20 stock and that you want to get out if it trades to $18 (10% lower). Make up your mind that you will not risk more than 3% (or less) of your account on any one position.

Here\’s your formula?

Number of shares = (3% times the account value) / (entry price – exit price)

So if you have a $25,000 account and if you buy a stock with an entry price of $20, and if you want to get out of the position if it trades to $18, then the difference between the entry price and exit price is $2. Therefore, you can buy 375 shares (3% of $25,000 divided by 2).

That\’s it. You now have a powerful money management system that will allow you to know how much you can lose before you invest. It will keep you in the game by keeping you from losing a significant percentage of your capital on any one position. And as long as you can stay in the game, the better chance you have to realize big profits.

(C) Larry Holmes

Larry Holmes invites you to visit http://www.smart-money-report.com/
Your common sense guide for financial and investment success.

Writen By : Larry Holmes

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The

Sep 20

Posted by admin in Investing, Stocks Mutual Funds

What does the ?M? in CANSLIM stand for?

According to William O?Neil, it represents the market and direction it is heading in. Over the past several months, you have listened to me write about the ?M? in CANSLIM almost every single week. Some of you have wondered why I put so much emphasis on this one letter in the CANSLIM acronym. It is very important to understand and recognize what type of market you are in before you ever make a stock purchase or place a large position. If you don?t know if the current market is a bear, a bull or if it is trading sideways, how can you realistically make money and set goals based on a blind strategy. Markets trade in trends and 75% of all listed stocks will follow the general direction of the major indices which include the NASDAQ, the DOW and the S

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How Do I Determine My Stock Sell Points?

Sep 18

Posted by admin in Investing, Stocks Mutual Funds

This is an excellent question, if fact, it?s the toughest question that I face with every stock that I own.

If I own a stock and it immediately goes down, this is the easiest decision I must make ? SELL and sell fast. I know how to cut my losses and have been doing it for years. Yes, it?s a blow to my self esteem but I always feel better when I see that particular stock several dollars lower a few weeks later. This is when I feel good about the insurance policy I have (sell rules) to protect my capital.

Take Accuride (ACW) for example: I recently purchased the stock on a ?three weeks tight pattern?, a pattern that is familiar with O?Neil and CANSLIM. I placed a market order as the stock started to move towards the breakout level of $15.00 and was filled at $14.99.

For a lower priced stock such as ACW, I give it about 8% breathing room which brings my sell point to $13.79. I will not place a physical sell stop because I don?t want to be taken out of the position on false market maker moves. I reevaluate my position every night and decide if I need to sell ?at the market? the next morning if it is below $13.79 or nearing the sell point that I established. Last week, the stock fell to $14.11 intraday giving most investors a scare but managed to close up at $15.18. This is the exact reason why I keep mental stops instead of physical stops. I only place physical stops when I will be away from a computer for an extended period of time or if my gains are sufficient and I want to protect them at a specific number, then I don?t care if the stop is triggered intraday.

I will not change my mental sell stop of $13.79 until ACW gains at least 20% from my buy point. If that time arrives, I will move my sell stop about 12% below the current levels. In this case, the numbers would read like this: ACW would be up 20% near $18 and my trailing mental stop would be $15.84. If the stock approaches this area or violates the number, I will sell ?at the market? the following morning. Remember, circumstances play a big role in each decision. If outside events are influencing the stock, I must take that into consideration and base my decision on the additional information.

If ACW starts to use a moving average as support, my mental sell stop will always be slightly below the moving average, again giving it room to breathe. If any of my stocks gain 50%, I start to place a physical stop about 10%-12% below the current levels to protect the gains.

Finally, if I have not been sold out of a stock but I start to see the stock act in different ways than it was while up-trending, I will sell immediately (examples can be a climax run, slicing a major moving average, breaking a strong trend-line or possibly a string of weaker earnings reports). Use discretion and develop a feel for what works best for you.

If Accuride (ACW) tanks today and I am forced to sell even though I only purchased the stock in the past week, I will not allow it to hurt my emotional balance and I will move on to the next opportunity because I know investing is about percentages and NOT about being right on every trade.

Below are some basic sell rules that I follow:

Sell all stocks that fall 7-10% below your purchase price. Don?t ever allow a 10% loss double into a 20% loss because of stubbornness or the emotion of hope (hoping the stock will rebound). It is perfectly fine if the stock is sold out for a 7% loss and then it rebounds and you feel you would like to take another position in this stock.

If you feel something is wrong with your stock and the action looks odd but you are only down a few percent, sell anyway, why take a chance, especially in a bad market environment. This is the only form of insurance in the stock market.

When a stock has been is a solid up-trend and then it starts to move sideways, this is referred to as churning. This can be the first signal to the end of the run. This may serve as the perfect time to lock in your profits and watch from the sideline, remember, you can always get back in.

Learn to sell into strength; you can never go wrong by selling into strength before the stock peaks. No one and I mean NO ONE gets out at the top and if they do, they were lucky. No one and I mean NO ONE goes broke by taking a profit after an extended run or up-trend! Don?t allow the emotion of GREED to steer your ship, take profits when necessary, don?t get greedy.

Stop Loss, Trailing Stops and Market Makers:

Many investors try to lock in gains or prevent losses with a predetermined stop loss or trailing stop loss. This is an excellent tool but has become an easy target for market makers and program traders to manipulate.

For example: You buy XYZ stock at $50 and enter an automatic stop loss at $45 to protect your portfolio from extensive losses.

Market makers can see this entered stop loss and play the market in order to wipe out your shares and pick them up at cheaper prices. They can bid down the price to $44.50 or so and grab your shares and then bid up the price back to the $50 range ? all in one day. I have personally seen intraday manipulation of stocks being bid down, only to close for minor losses or slight gains. Accuride is a great example from last Thursday as it was down over 6% intraday and then closed up over 1%.

A trailing stop is a feature that allows the investor to determine a % point at which their stock is sold.

Example: If you buy 100 shares of a stock at $50, you can select a percentage at which your stock is sold, this percentage follows the stock up in price. So if you bought 100 shares of XYZ at $50 and put your percentage at 8%, your stock will be sold at $46…BUT, if your stock advances to $60, then you will have a new sell point at $55.20 (8% below the high of $60). In other words, your sell stop trails or follows your stock without you having to cancel out and resetting a new sell stop each time your stock goes up in price.

How do you protect your portfolio without letting market makers trip your stop loss for a premature exit?

I use a predetermined mental stop loss that is only implemented after the market is closed for the day. I take a look at each holding and determine if it should be sold at the market or intraday the next trading day. I predetermined my sell level when I bought the stock, so most emotions are already taken out of the equation.

If you invest in quality stocks with solid fundamentals and technicals, there is no need to constantly worry about huge losses in the matter of one or two days, barring a tragic event within that particular company.

Finally, Post Trade Analysis:

Post trade analysis could possibly be the most important key to unlocking your investment potential. Every investor must analyze their past trades. By analyzing your past trades, you can focus in on your mistakes and pinpoint the downfalls in your methods.

Ask yourself:

How many stocks have you bought in the past 12 months?
How many went up?
How many went down?
How long did you hold these stocks?
Why did the stock work?
Where did it go wrong?
Did the fundamentals breakdown?
Did the stock send key technical red flags before a major collapse?

Most investors skip post analysis and consider it a waste of time to look at the past. Many investors are scared to look at past trades; they don?t want to see the extent of the damage. An investor will never be able to take a step forward without looking over the past success and failures in their portfolio. In order to focus on weak areas in your investing methods, post analysis is the place to start. Post analysis with the aid of charts will show you if you bought too soon, sold too late, sold too early or bought the wrong stock all together. Print out a chart of all stocks that you sold and plot your key entry and exit points. Look for base building, accumulation, distribution or any other components that help shape your final decisions. Compare your stocks to sister stocks and see if similar patterns occurred. Did any sister stocks start to rise or fall before your stock? Post analysis is like looking in the mirror; you have no where to hide and only the truth to seek.

After several post analysis sessions, you will notice similarities in your buying and selling patterns. Similar mistakes or successes will become apparent. Focus on both the good and the bad. This post analysis allows the educated investor to suck in their pride and take responsibility for their own actions.

This is the starting point to correcting mistakes and growing your strengths!

Chris Perruna – http://www.marketstockwatch.com

Chris is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We offer an extended no obligation monthly trial period starting immediately with two free weeks. We don\’t stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

Writen By : Chris Perruna

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Trade Stocks For Real

Sep 16

Posted by admin in Finance, Investing, Stocks Mutual Funds

I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Back testing and paper trading seem to be the most over emphasized techniques offered by market theorists, educational elite, market novices and/or market fakes. While learning the pure basics, I can see why a novice investor may want to paper trade; to see the results of the developing system but I will warn that these results are completely false. The results will not contain the emotional decisions that go along with risking your own cash. Anyone and I mean anyone can paper trade successfully. It?s simple, place a trade and hope it goes up and if it doesn?t, you have no worries because you can?t lose. The emotional imbalance that occurs when you really start to lose money is not present. Don?t fool yourself by believing the results of your paper trading or virtual simulation portfolio. These things may give you some confidence in your system but they don?t prove a damn thing in the real world. The real world, specifically the stock market, is run by emotional human beings. People make decisions that are irrational and base their trading decisions on fear and greed. Paper trading lacks fear and greed because there is no gain and no loss; therefore there is no consequence to deal with.

Don?t worry about back testing for 20 years because historical back testing is never very accurate. The most accurate testing is real time. If you can back test real trades (actual trades that you have made in the past), then this would be just as good as real time testing (or forward testing). Back testing can get you somewhat of an idea of how your system will perform but there is no emotional attachments to this type of testing so it is not realistically accurate. We all know emotions are tied to our decisions in the markets so we can only get accurate results through real testing. Learn to ignore the talking heads and the people on TV and that internet chat room that claim they are up over 1000% trading a fake account. What really makes me laugh is the person that sets up a virtual trading scenario and then allows each participant to trade $500,000 or more in their account. If you are going to trade a fake account, at least keep it real so you try to learn something, maybe money management.

I setup one virtual trading competition a few years back and I only allowed each participant to start with $10,000, a reasonable amount, an amount that most people start trading with. The competition was fun but it was not real for me or the others. I didn?t care what risks I took and I never had a problem pulling the trigger which does happen in real life. I did try to keep my trades in line with my real life account but it varied slightly. I witnessed other traders making 20 trades per day or 20-50 trades per week. This is not real because the commissions alone, even with a discount broker will wipe you out. I did allow margin because I use margin in my account but I saw other investors abusing the fake power of margin in their virtual account, again, playing the game for fun instead of learning something valuable. As a fellow investor, keep testing your system in real time and you will know what works and what doesn?t based on real trades, not simulations. Professors and the like teach theories while investors actually do the trading! Back testing may convince some people but I am only convinced with what works now, in real time. Besides, why would I waste my time playing for fake money when I can learn and do for real? Back testing may be good for some people but I have been testing my systems in real time since the day I started investing seriously. Currently, I am testing the $60-$100 theory using options in my newest account. I will not have concrete data on this system for another year or two, most likely two years down the road. I could back test the system but how will that help me realistically going forward? It won?t, it may show me some probabilities and the possible expectancy of the system but it won?t guarantee anything until I place a position for real.

If you want to test a system, open an account with real money, even a minimal amount and give it a try. Make sure you use enough money to allow emotions to be attached to your decisions. Without the emotional attachment, you are cheating yourself and your potential system.

Chris Perruna – http://www.marketstockwatch.com

Chris is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don\’t stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

Writen By : Chris Perruna

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