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Whitewater Stock Market

Feb 20

Posted by admin in Stocks Mutual Funds

Ever done any whitewater rafting or canoeing? Long periods of tranquil river followed by short periods of terror. Suddenly the water grips your vessel and you are pushed and shoved by massive currents over which you have no control. Missing boulders you paddle as hard as you can. You almost lose everything and think to yourself, “Why didn’t I portage that last rapid”

Remind you of the stock market lately? Nice steady up moves of equity growth in your portfolio followed by gut-wrenching waterfalls when the market takes back most of your gains.

You got into that canoe because you wanted to. Did you have any lessons on how to control the ride or when it might be a good idea to portage? Maybe you didn’t or maybe you got the wrong lesson. You didn’t want to crash or drown.

The same goes for the stock market. You might have read a book on how to invest your money or worse yet you might have received information from a broker or financial planner whose reason for helping you is based on commission. If you are a small account don’t plan on getting much ?help?.

Brokers are not taught how to make money. They are taught to make recommendations that will not get them sued if you lose your money. The basic Wall Street tenet of Buy and Hold is totally wrong. Unfortunately, even the brokers believe it. When you have a stock or mutual fund that is going down they never tell you to sell ? ?you are in for the long haul?. WRONG. Of 33,000 stock recommendations last year only 127 were ‘sells?. After stocks have declined 50% they tell you to “hold”. You know where. Brokerage companies do not want to offend the corporate executives and mutual fund managers; they seem to have forgotten who is paying them.

When you are whitewater rafting you had better know how to guide yourself through or around the rapids to the calm water. When you invest in the market you must learn the first basic rule ? protect your capital ? so you won’t crash and lose all you have worked for. In canoeing it means learning when to paddle or portage. With investing it means learning when to sell, be in cash and out of the market. Know when to hold em, know when to fold em.

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Take Charge of Your Investment

Feb 13

Posted by admin in Investing

Never before has trading been so interesting until this time. The reason for that is the internet. The internet enables us, ordinary people, to take part in this activity that some time ago was only done by professionals. Before, we have to hire someone to do the trading for us?now, we can do that for ourselves. The internet made that possible. And the fees are lower than before. Because of competition, we don’t have to have a lot of money to get started. We can open a brokerage account online just like opening a checking account. What’s more, most online brokerage companies do not set an account minimum, inactivity fee, and other tabs most conventional brokerage companies charge. By conventional I meant the bricks and mortar brokerage firms.

Having worked in a conventional brokerage company gave me the insights of how the brokerage works. I’m going to tell you in a nutshell:

If you are working with a broker, who may also be called a financial adviser, planner, or rep (short for representative), that broker is licensed to do transactions with you but she does not manage your money. She passes your money to money managers.

Some financial reps work for a particular money manager, some are independent. If your financial rep is independent, then she is the kind of rep money managers compete for. Now, the financial rep has to choose among the money managers, supposedly for who will have the highest yield for your money depending on what you want for it ? whether it’s income, capital preservation, growth, etc. Here, there’s a gray area because of this thing I call the YTB factor ? the yield to broker. Because of the financial reps? freedom to choose among the money managers, she can choose whether to wok for you or for herself. Money managers don’t pay the same commissions. Your financial rep may pass the business to the one who pays the highest commission. Your money may not be working hard for you but working hard for your rep.

Brokerage firms don’t care for small money. They care for big accounts. Why? Because only in big accounts do they reap profits. High performing managers have high account minimum and they pay high commissions. Small accounts have no place in the deluxe sophistication of conventional investing.

But even if they are the big guys of investing, these money managers cannot guarantee the return of your investment. In every paperwork you sign, in any advertisement you see, you will notice that there’s always the clause your investments are not FDIC (Federal Deposit Insurance Corporation) insured or guaranteed. Gain or lose, the money manager is off the hook.

No money manager has had a phenomenal performance even how good they are. It’s the economy that calls the shot. If the times call for a recession, then there will be a slump in the market no matter what. Because money managers are big, their actions are easily detected by today’s market indicators. We, individual investors, can dodge the bullet because we are small.

There are many resources now that we can access to be educated in the matter of investing. The internet is giving us the option to take charge of our finances. With the information and tools that abound us, we can now actively trade and not pay someone to do it for us. Be it stocks, futures, or forex, if we would teach ourselves, we can be trading on our own in no time. This is an opportunity that technology is handing us and there is no excuse to be left out.

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A Guide to Mutual Funds

Jan 23

Posted by admin in Stocks Mutual Funds

If you’ve been thinking about getting into investment but aren’t sure what you should invest in, you might want to consider looking into investments in mutual funds. These funds are designed to provide a diverse investment opportunity for the shareholders who have purchased shares in the fund. They can be used as an easy way to create a diverse investment portfolio, or they can be used to accent your own portfolio with securities that have been chosen by the creator of the mutual fund.

The information below is designed to help you decide whether mutual funds are right for you, and includes more details of what mutual funds are, what sets them apart from other types of investments, and how to find the mutual funds that will best accent your investment style.

Defining Mutual Funds

Before you can decide whether or not to invest in mutual funds, you need to know exactly what mutual funds are. These funds are a type of security that is traded on the stock market, enabling shareholders to purchase and sell shares in the funds as they choose. The money that is raised by the purchasing of shares by shareholders is utilized by the investment company that created the firm to purchase more shares of certain stocks, bonds, and other market securities and money market instruments.

As the value of the stocks, bonds, and other securities contained within the mutual fund rise and fall, the value of the fund itself fluctuates? the average value of each share of the mutual fund is determined each day as an average of the total value of all of the securities that are contained within the fund.

Because of this, shareholders who own part of a mutual fund are more directly involved with their investment than those who simply own individual securities and watch as they rise and fall.

Important Attributes of Mutual Funds

As was mentioned above, mutual funds are created by investment companies to purchase shares in various stocks and other securities. What this means for the mutual fund investor is that in addition to their ownership of shares of the mutual fund, they also have a limited claim of ownership of some of the securities contained within the mutual fund. In addition to this, mutual funds also benefit from having a built in system of diversification, as well as professional money management services that handle all of the money that is invested into the fund.

Shareholders are free to purchase additional shares or sell the shares that they already possess at any time, though the value of the shares fluctuates daily and therefore must be bought or sold with care so as to get the best value for the money.

Finding the Best Mutual Funds

Since the value of mutual funds varies from day to day, it can be difficult to find the funds that are best for your investment. Instead of tracking the funds as you would traditional stocks and securities, it’s often better to investigate the fund to determine which investment company is managing the fund and what specific securities are currently being held by the fund itself.

Finding a mutual fund that is managed by an investment company that has a strong record of choosing lucrative investments is a good sign that the fund might be a smart buy, and securities held within a fund that are consistent performers can help add stability and security to an investment that may seem otherwise unstable.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

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Lies, Damn Lies and Mutual Fund Returns

Jan 12

Posted by admin in Stocks Mutual Funds

How many times has this happened to you? You’re at a social function and the conversation turns to investing. Pretty soon, people are comparing how well their investments are doing. As you might imagine, being an investment advisor this happens to me a lot. However, I recently had an experience with it that startled me.

Bob, one of the guys I was chatting with at a party, asked what kind of returns I had made for my clients with my methodical no load mutual fund strategy during the past year. I replied that they had unrealized gains of slightly over 29%, after management fees, for the 8 months that we were invested.

Bob countered with a smirk that he had made a 40% return. I raised my eyebrows and told him that was darn good?and suggested that maybe he ought to be managing my money. At that point we were interrupted and, as the evening went on, I began to wonder exactly how Bob had gotten his great return.

I cornered him a little later on and, upon digging a little deeper, the story looked somewhat different. Yes, he had made a 40% return on a mutual fund he had some money invested in, however, we were comparing apples and bananas.

He had a total portfolio of $100k. Being cautious, he had invested only $10k into a mutual fund, from which he profited $4k after he sold it. The balance of his portfolio ($90k) was sitting in a money market fund earning some 0.35% per year.

So, while he had made 40% on 10% of his investment, he had only made 4.35% on his whole portfolio. My methodology was also focused on protecting my clients’ investments and it had increased their entire portfolio 29% (unrealized). That would be an apple to apple comparison when measuring my returns against his. Bob’s one fund realized 40% return. However, had I approached it the same way Bob had, I could have described one of the funds I used that had realized over 49% for the same period.

Actually, Bob’s not-so-good-news story didn’t stop there. Bob admitted to having followed the losing Buy and Hope strategy through the bear market of 2000 and had finally sold out at a 50% loss a year ago, before committing $10k to a mutual fund investment.

I was pleased to be able to tell him that my methodology had gotten my clients out of the market before the bear took his big bite, and they suffered only minimal losses before finding safety in money markets accounts. And when my trend tracking figures directed us to move back into the market, they still had most of their money poised to start earning for them again?which it did and very nicely, thank you.

The moral of the story is to look past the surface and don’t take any numbers thrown at you at face value. Remember, most people returning from a weekend in Las Vegas will shout about their winnings and mumble about their losses.

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Stress Free Forex Trading with Forex VPS

Dec 18

Posted by admin in Currency Trading

Have you ever wondered how it was possible to trade forex and make money in your sleep? Well, with Forex VPS, this is now a reality. For the increasing number of traders who trade automated systems with Metatrader EAs, they can now set up a forex hosting account, such as with Forex VPS, and have that server running 24/7, with the EA system always switched on, and always making money for the trader.

By using Forex VPS, or a virtual private server, as they are known, many of the problems associated with a shared hosting account are eliminated. When many people are using one server sometimes the account is very slow. VPS is a server being used by only one person. The main server will be divided into several servers and distributed on a shared basis, and forex hosting is usually limited to 15 or 20 virtual servers on a single main server.

VPS is a crossbreed between full – fledged dedicated hosting and shared hosting. It is full- fledged because it is just like an individual server. You can install applications, reboot the server and access the server root without worrying about affecting other users. There is also shared hosting because you will have to share hardware with other users. When it comes to forex trading there are traders who don’t want to run MetaTrader platforms on their computers. By accessing the services of Forex VPS you can have your own server.

A forex VPS is like a dedicated server in a number of ways – you can install applications, reboot the server and access the server root without worrying about affecting other users. There is also a shared element to the forex hosting because you will have to share hardware with other account holders. When it comes to forex trading there are traders who don’t want to run MetaTrader platforms on their computers.

For those traders who run their expert advisers without interruptions, forex VPS is the ideal service for you. It is always on-line, and does not reboot when trading. Power outages do not affect it and the best part is that the computer can be off. With all its benefits, you can also use this kind of server to test WebPages right before you make them available to the public. It lets you test applications and different software’s without having to reboot the whole server.

You need the automatic restart feature incase the server is rebooted and you need to automatically restart. The 24/7 access feature is needed because you should be able to access your forex VPS anytime and trade.

In terms of selecting your forex hosting company, there are a large number of providers who are in the market, and this number is growing daily. Some of the leading forex VPS providers are; EzforexHost, MetaTrader Hosting and Forex Hoster.

All in all, the forex VPS hosting companies have broadly the same product offering, with similar specs within their hosting accounts. The features that you should look out for especially are a pre-installed MetaTrader MT4. Also check that the hosting service is compatible with all forex brokers, or at least with the broker you trade with, as there are some brokers which only use certain operating systems. This will allow you to download and install trading platforms from brokers to your forex VPS. Finally, double check that the EA you plan to trade with is compatible with the VPS host. Most forex hosting providers can support all EAs, but some are still limited in this capacity.

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Expense Ratios Are Nonsense

Oct 1

Posted by admin in Finance, Stocks Mutual Funds

One of those investment counselors says, ?I will take your money and make you a profit every year, but I have a very hefty fee. For every
dollar I make you I will charge you a dollar?.

?How much will you make for me??

He replies, ?Because I invest in the stock
market I am not sure what each year will be, but
I have a real time track record that I have
doubled my clients money every three years. If
you start with $10,000 you should have $20,000
three years from now.?

?In other words out of the $20,000 you make
with my money you get half? That seems like an
awful lot.?

Mr. Money Manager asks, ?Does it make any
difference how much I make if I can double your
money??

Here we are computing a 50% expense ratio.
Who cares as long as he doubles the money? When you
talk to brokers when buying mutual funds one of their
pet talking points is that a particular fund has
a very low expense ratio. Who cares? The only
thing that is important is the final return.

Does it make any difference if a fund has a
3.5% expense ratio or a 1% expense ratio if the
3% fund makes more money? Of course not.

This is part of the Wall Street mystique
designed to confuse clients. Whatever mutual
fund you choose it should be one that has the
highest return. When it is no longer going up it
should be switched to a better performing fund
that is why you should only buy no-load funds.
Full service brokerage companies do not want to
sell no-load funds.

Commissions are expenses, but brokers don?t
talk about that. Do NOT pay commission. Brokers
will tell you that load (commission) funds are
better than no-load funds. Not true. Get up and
walk away from that broker. He is lying. Be
careful of certain types of mutual funds that
will have several classes of the same fund some
of which have hidden commissions. Don?t be
afraid to ask. To be absolutely sure call the
mutual fund company. They all have toll free
numbers.

There is only one way to make sense out of
expenses and expense ratios and that is the
performance of the fund in relation to all other
funds. First eliminate commissions. All other
expenses are apportioned over the year. One
other nasty charge funds have started adding is
redemption fees. Most are 2% and run out for
long periods of time. These are added to
discourage selling; no other reason.

There is only one thing that distinguishes
a ?good? fund from any other. It is going up while
the investor owns it. If it doesn?t you should
not have it. When it starts down it should be
sold and this has nothing to do with expense
ratios.

There is only one reason to own any equity
and it has nothing to do with expenses. It must go
up.

Copyright 2006

Al Thomas\’ best selling book, \”If It Doesn\’t
Go Up, Don\’t Buy It!\” has helped thousands
of people make money and keep their profits
with his simple 2-step method. Read the first
chapter and receive his market letter for 3
months at no charge at
http://www.mutualfundmagic.com and discover why
he\’s the man that Wall Street does not want
you to know.

Writen By : Al Thomas

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Advantages Of Low-Cost Mutual Funds

Oct 1

Posted by admin in Investing, Personal Finance, Stocks Mutual Funds

A common misconception about mutual funds is that pretty much any reputable fund will do. Of course, any investment that produces a solid return for you is better than nothing, but not all funds are created equal. When you buy a mutual fund, you?ll pay a management fee. It?s what you pay for someone to handle your accounts. A low-cost fund will charge you one-fifth of one percent per year. A typical high-cost fund will charge about eight times more than that.

Research was recently published analyzing a 25 year old investing 10 percent of their $30,000 income each year until retirement into mutual funds. Comparing money put high-cost funds with that put into low-cost funds produced quite dramatic results. The good news is that the person investing in the high-cost funds ended up with around $1.7 million at retirement. Not too bad! But here?s the real kicker ? the person investing in a low-cost fund ended up with $2.9 million!

The S

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