Investment Articles

Investment is essential in order to make your money grow. It is also necessary to reach once financial goal. Investment can be done with both high and little money. It is therefore necessary to have a good idea before investing. Many investors want to know as where to invest money so that they could earn highest rates of return. The reason for investment may differ and the fact remains that investment is like saving and all investment makes profit, so when you invest you are sure to get the return after certain duration. The great thing about investing in today’s world is that there are many avenues available for people to invest money. The most common known areas to invest money are stocks, bonds, mutual funds, real estates, and e-commerce.

Though, all investments have high and low risks but its said that – no risk no game and risk is there in everything we do and one to know details before investing in any of the area. Stock market is the most popular area for investment as it helps one in making high money but there is also a high risk factor for one never knows as when the market would crash, devaluing the cost of the company’s shares. Another area of investment is mutual funds. Mutual funds have many benefits and involve less risk as these are collections of stocks and bonds that proves to be beneficial in later years. Also, it is important to know that mutual funds offers wide range of stocks types like real estates, health care, or automobile manufactures. So people invest in real estates because it is safer way to invest money as the real estate market does not fluctuate as often or as extreme as the stock market and the real estates value are usually on the rise. Of all it is important to remember that one requires high value for a longer period to get high return.

There are still other areas of investment with little money. So, one can also think of investing through Dividend Reinvestment plans also known as drips and the Direct Stock Purchase Plans. These plans are safe and allow one to buy stocks directly from the company. One is sure to make money over time when invested in these plans.

Investment is vital for all for their future growth as only if you invest money that you could make money. Mutual fund offers best platform to invest. So just gather the knowledge about mutual funds investment and see your money grow. This is the age of investment and all one need to do is to go for a happy investment!

Harish Chandra Khulbe is a student finding his way into the online business world. He has a passion for online business and playing cricket.

Okay, so I know not everyone is made of money and we can’t all expect to have our option trading businesses funded with an unlimited potential. That elusive dollar can be a bit frustrating to come by in a bearish economy, so I went ahead and compiled some great trades you can place today on any asset you want with healthy profit potential, controlled risk and high probability of success. Sound too good to be true? Read on and I’ll give you some details.

1.Bull Put Spread. The SPY has been on a run for a couple of months now, so why not take advantage of it? But instead of buying a naked call which is more than likely going to expire worthless, try placing a put spread on the SPY by selling a put at 113 and buying a put at 112. This places your initial credit for the premium at 21 dollars and your total potential risk at 79 dollars, with a 70 percent chance of success.

The great thing about this strategy is that if the SPY continues to rise, you make money, and if the SPY stays where it is, you also make money. You come out on top of the trade 2 out of 3 possible price outcomes, so the probability is favorable and the risk is very well defined. If you really like this trade, you can even place 5 or 10 contracts down, multiplying your results and giving you a healthier profit.

2. Iron Condors. I love Iron Condors because they are a neutral spread with a clearly defined and controlled risk. You don’t have to deal with multiple expiration months and can profit from a lack of movement, which is the most common pattern to be observed in the markets. An iron condor is really like playing a double vertical, where you sell a vertical on both sides of an underlying.

If the underlying goes into the strike price for either vertical, you lose money. So in order to pick out a good Iron Condor, you need to find a stock that has been range bound for a while and isn’t trending or showing any signs of an imposing breakout. Look for a stock with a relatively middle of the road RSI and at least a month of range bound patterns.

I recently placed a promising Iron Condor on the SPY’s with my put spread at 112 and 111 and my call spread at 117 and 118. That means that if it goes above 117 or below 112 at expiration, I lose money. I sold 5 contracts so that leaves me with a $165 credit upfront with a maximum possible loss of $335 less commissions and a 56% chance of realizing a profit on the premium. Not a bad position for $335 worth of buying power.

3. Calendar Spreads. Calendar spreads are probably one of the most brilliantly simple trades you can put into your portfolio. The goal of a calendar spread is the same as an iron condor, but with a bit of a different approach. Instead of buying two separate verticals, you buy a LEAP and sell a front month call. Assuming the front month call expires worthless, which most options actually do, you are going to turn a profit when you go to sell your LEAP option since it has decayed in value less than the front month option, which is now worthless.

The risk is if the underlying moves in any extreme direction, whether it be up or down, because both of your options will lose intrinsic value, and you will not be able to sell your LEAP to close the position with any semblance of a profit.

You can place a call on the SPY with a strike price of 112 for 138 dollars with the LEAP reaching out to February. Remember, the goal is to hold onto your February call after the January call is expired, then turn around and sell it for a healthy profit and roll out another call.

For more options trading tips like this, be sure to check out http://www.tamingthemarkets.com

-Eric Conklin
Blogger and Trader
http://www.tamingthemarkets.com

Covered calls are a conservative option trade that typically outperforms standard stock trading strategies in the majority of markets. The reason is because covered calls draw out profits from speculators while collecting a premium on the trade and holding onto the stock for dividends. Since you have multiple sources of profit in the trade, you have the opportunity to make money when the stock goes up, down or sideways.

For those who don’t already know, writing a covered call involves buying 100 shares of stock and then selling the call option on those 100 shares 1 or 2 strikes out of the money in the front month. This lowers your initial investment in order to own the stock and gives you multiple sources of profit.

Covered calls are an options trade best played on equities that are mild to moderately bullish in nature. A covered call outperforms standard stock trading strategies only when the market is mildly bullish or neutral. When the market rallies, writing covered calls will dramatically cut into your profit margins because you will get exercised against and be forced to sell your shares at a smaller than possible profit.

Here are some of the things I look for in writing a covered call:

1. 3-5% ROI from the premium. Assuming the stock doesn’t change in price during the trade, you should have made 3-5% of the value of the stock on the money gathered in the premium. Aim too high and you risk a lot. Aim too low and you’re hardly making any money.

If your profit margin is too high, it’s a sign that there is a great deal of speculation and volatility associated with this particular stock. You do not want to be buying a covered call on a stock that has a 6-10% ROI from the premium each month. The reason is because you risk things like catastrophic gapping from sudden news announcements or dramatic bullish breakouts that cut into your profit margins upon being exercised. Avoid this and play it safe with a smaller monthly ROI.

2. A stock should be trading above its 200 day exponential moving average for at least a month. Typically the 200 day EMA is the benchmark of whether an asset for an options trade is in an uptrend or a downtrend. Look to this as your primary technical indicator when determining a stock to write covered calls on.

3. A stock should have a Price to Earnings Ratios between 15 and 25. The price to earnings ratio measures a company’s earnings versus the value of each share of stock in the company. It’s an indicator of how valuable a company is, the lower the number, the better the earnings per share and the more profitable and growth oriented a company is. The higher the number, worse the earnings are per share and the more overvalued a company is. Companies with P/E Ratios above 30 are usually the result of mass speculation without much earnings to show for it.

You should expect a company to be moderately to well valued to place a covered call on it, so don’t look for the undervalued companies ready to explode or the overvalued companies preparing to crash. Try to stick somewhere in between.

4. A stock should have a relative strength index between 45 and 70. Relative strength is the measurement of the overall amount of upswings in price action versus the overall amount of downswings averaged out over a period of time. When the average number rises above 70, the position is considered overbought and values below 30 are considered oversold.

I recommend staying in between 45 and 70 to make sure you are dealing with a stock that has a positive outlook, but isn’t going to explode off the chart any time soon. This will help make sure your options trade isn’t getting cut out of profits by being exercised and is still performing well without losing equity in the market.

For more tips and options trading strategies like this one, be sure to check out http://www.tamingthemarkets.com

-Eric Conklin
Blogger and Trader
http://www.tamingthemarkets.com

Investors, are you tired of running into dead ends when it comes to trying to get brokers and lawyers to give you real, honest hot tips on that next big IPO where you can double or triple your money quickly with minimal risk? Are you tired of having to be the last to know about opportunities that you could have made a killing with but no one gave you this insider information?

What if I told you there was a way to come out on top virtually every time you made an investment regardless of whether the stock market is up, down or sideways? How would you like to be a “seed” investor in a new fully reporting publicly traded company on the Over the Counter Bulletin Board (OTCBB) at a discount to the market? How would you like to have “liquidity” in your investment? How would you like to have a built in “exit strategy”? How would you like to have an opportunity to spread your risks among three or four promising opportunities rather than one?

Here is how this can be done. Skip the cliché route of getting investment tidbits from your broker; it’s rare that they actually have specific details about these hush, hush scenarios and most likely couldn’t put you in touch with the executives of the pre-public structure which is obviously a mandatory prerequisite for investing seed capital in these companies. Your best bet is to find a consultant or consulting firm who specializes in complete facilitation of going public. Chances are, at any given time they’ll have 5 to 10 different companies who are only a few weeks or months away from trading and are offering stock at a substantial discount to the public in exchange for that seed capital. Contacts in this business are crucial.

Many times they will allow you to invest for no other reason other than they are trying to meet the 40 investor minimum qualification by the SEC to go public.

Many times you can put as little as $5,000 to $10,000 into the company as seed capital and when the company is public your investment skyrockets. So the moral of this story is, team up with a good ‘go public’ consultant. Be serious when you’re talking to them and be ready to show some sort of proof of funds as these consultants get this type of inquire many times daily but if you are a serious investor and low maintenance, these consultants will most likely hand you a stack of some of the most valuable investment material you’ve ever held in your hands. Each page will have descriptions of the next big thing in the technology, biotech, alternative energy, natural fuels industries and each document offers an opportunity and each opportunity is usually worth its weight in gold, literally.

Do you want to be handed the golden keys to the kingdom? We constantly have companies that are going public and simply need to meet their 40 investor minimum by the SEC guideline for going public. They usually offer deeply discounted stock and we can introduce you directly to the CEO’s and CFO’s of these companies. Call Princeton Corporate Solutions today at 267-233-0183 or visit our website at http://www.princetoncorporatesolutions.com or fill out our investor form at: http://spreadsheets.google.com/viewform?formkey=dEtwZGVQemFoelJPUnVBWWZHQ3BTMlE6MA

The savings bonds issued by the federal government are probably the safest investments ever. After all, you will earn interest and recoup your principal investment no matter the state of the economy. Any US citizen with a social security number and Puerto Rican residents can invest in these bonds.

Definition

But first, a definition is in order. As previously said, savings bonds are debt securities issued by the US Department of the Treasury with the purpose of funding the federal government’s borrowing needs. Savings bonds come in several types:

* Series EE bonds will increase in value as long as the interest accrues on them for 30 years. When these securities become due and demandable, you will be paid the accrued interest plus the original investment.

* Series HH bonds are bought at their face value ranging from $500 to $10,000 in denominations with no limit on the amount of purchase. However, these securities do not increase in value and are limited to just 20 years.

* Series I bonds are also purchased at face value. It can increase in value depending on the inflation rate for the next 30 years. The limit on purchase is set at $5,000 per calendar year.

Benefits

Of course, the primary benefit of savings bonds is that these securities are truly secure in every sense of the word, finance-wise. Your original investment along with interest accrued will be paid, recession or no recession.

Another benefit is that the interest accrued on these bonds need not be reported to the Internal Revenue Service for taxation purposes until such time that these are cashed by the holder. However, take note that when you use the savings bonds for your education as well as the education of your spouse and child, you have to report it to the federal government.

Overall, savings bonds are great investments especially when you want to diversify your portfolio.

Calculate Worth

At some point, you will want to know the value of your savings bond especially when you want to cash it in. You have two choices in the matter – the manual way and the automated method.

If you choose to go the route of the manual method – because you are a math pro in that way – you start by jotting down the face value of the these bonds and the interest rate affixed to them. Then, you will determine the specific period of time when you want to redeem the bonds.

Now, multiply the interest rate with the face value with the time for encashment as the only consideration to arrive at the accrued interest. Add the accrued interest to the face value of the bonds and deduct the penalties and voila! You have the value of your stocks.

If you choose the automated method – because you are lazy but very precise that way – you can always access any of the numerous of the online savings bond calculators. Better yet, log on to the Savings Bonds Calculator of the Treasury Department to secure the accurate amount you will be receiving. No hassles, no pen and paper, and no mistakes.

To learn the 1 secret to profiting greatly from US savings bonds click here.

For free tips on stress-free retirement visit http://www.bond-trading.org/

Bonds and bond investing do not refer to SAVINGS BONDS, which are not really bonds at all. Bond investing refers to debt securities; and while a savings bond is guaranteed safe real bonds are not. Clear as mud? Let’s simplify.

Open your mind to bond investing because bonds, as well as stocks, are the building blocks of a balanced investment portfolio. You could be invested in these securities in a mutual fund you own without being aware of it. Before I explain the basics, let’s go to a source of confusion: the U.S. Treasury who issues both savings bonds and Treasury bonds. Both (like all bonds) are a form of borrowing money from the public.

Savings bonds are simply a savings vehicle, where our government pays you interest for the use of your money while guaranteeing that you will not take a loss. Treasury bonds are the real thing, long-term debt securities that mature 30 years from date of issue. Once these securities are issued (sold) to the public they trade in the open market. Although they are the safest long-term debt securities in the world, you can lose money here because the price or value of any bond fluctuates as it trades in the market day in and day out. I’ll explain shortly.

Bonds are called debt securities and are sold to investors by the federal government, by municipalities and corporations who want to borrow a lot of money for 20 years or so. They pay a FIXED interest rate to whoever owns them until they mature (say in 20 or 30 years). Then the bondholder is paid back the $1000 or whatever the issuer borrowed. From the time of issue, up to the time of maturity, bonds trade in the bond market. You can sell or buy any of them in the market on any business day. Thus, if you own them, you can sell them before maturity.

THE FIXED INTEREST RATE is the reason that even an ultra safe Treasury bond fluctuates in value, because interest rates in the economy change on an ongoing basis day after day. Let’s say that you hold a bond with a 5% coupon rate that pays you $50 in interest each year. If interest rates start going up, the value of your investment will fall because investors now can get a higher rate elsewhere. Would you pay $1000 to earn 5% when you could get 6% on a new issue? No, you’d buy the 5% issue only if you got a discount. The market functions to bring prices in line with reality as investors buy and sell.

Many mature folks love bond investing because these securities pay a higher fixed rate than most other investments, and they want this higher income. The problem is that some don’t understand the last paragraph above. If interest rates go up, bond investing is a loser.

You should not be clueless now, but you are probably not quite ready for prime time investing in bonds on your own, either. Get started in bond investing like most people do, through mutual funds. Here professionals do the selection and portfolio management for you. In this way you own a very small part of a large bond portfolio.

If you want to learn more, there are numerous articles available on the subject of bonds and bond funds. Good Luck.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

Securities arbitration results from the Financial Industry Regulatory Authority (”FINRA”) Office of Dispute Resolution reporting the outcomes of customer initiated investment related arbitrations against stockbrokers and investment firms have been released for 2009.

Not surprisingly, the number of FINRA customer initiated arbitration cases filed in 2009 increased 43% from 4,982 cases in 2008 to 7,137 cases in 2009. The number of these cases was initially expected to exceed 10,000 in 2009. Increases in securities prices in the 2009 have probably reduced the number of claims that would otherwise have been filed last year, given Wall Street’s more recent misconduct, as the high tide conceals that the swimmers are wearing no clothes.

Last years filings are still behind the number of presumably “tech-wreck” related annual filings in 2002, 2003 and 2004. Securities arbitration claims involving misrepresentations and omissions continue to outpace the filing of cases alleging the sale of unsuitable investments, as it is expected these cases particularly in 2008 and 2009 relate to the fraudulent sale of the preferred securities of financial institutions, structured products, bond funds, and the near cash instruments that have been manufactured by Wall Street within the last two years and sold to unsuspecting otherwise conservative investors.

Indeed, FINRA reports a 318% increase in the number of securities arbitration claims filed against brokers involving preferred securities and a 128% increase in the number of securities arbitration claims filed involving fraud in connection with the sale of corporate bonds.

Based upon the FINRA securities arbitration cases closed last year, at least 25%, or 1 in 4 of these cases were not settled or withdrawn, but were decided by arbitration panels. Of those cases decided by securities arbitration panels, investors prevailed only 43%, or less than half of the time, meaning that the chance or probability of not obtaining an monetary award or favorable outcome in an arbitration proceeding is greater than playing Russian Roulette, where only 1 in 6 times, the outcome does not favor the participant.

FINRA also reports that 7% or 310 of the cases closed last were cases “decided by arbitrators after a review of the documents,” but it is unclear if these cases were submitted to FINRA on the papers in simplified arbitration (i.e. claims for less than $25,000) or were cases dismissed by FINRA arbitration panels in advance of an evidentiary hearing. In 2009, the FINRA approved a proposal to limit significantly the number of dispositive motions filed in its arbitration forum and impose strict sanctions against parties who engage in abusive motions practices.

Although FINRA has again launched its “experimental” public arbitration pilot program allowing parties to be excused from the mandatory non-public, securities industry arbitrator required to render judgment on every arbitration panel deciding these claims involving more than $100,000, FINRA reports that of its qualified arbitrator pool, 43% or 2,696 of its qualified arbitrators are non-public arbitrators and are employed or have some significant tie to the securities industry.

If you have been the victim of investment fraud by your stockbroker or investment professional, contact us for a free evaluation at (877) SEC-ATTY. Many cases accepted on a contingency fee basis.

Nicholas J. Guiliano, Esquire
The Guiliano Law Firm
230 South Broad Street, Suite 601
Philadelphia, PA 19102
(215) 413-8223 (Telephone)
(215) 413-8225 (Telecopier)
(877) SEC-ATTY
http://www.securitiesarbitrations.com

In finance, hedging is used to minimize risks by taking position in one market to offset exposure to price fluctuations in some other market. There are many financial vehicles to do this like options, insurance policies, forward contracts etc.

Hedging is a day-to-day task and everybody is engaged in it. For example when you take out insurance to minimize the risk that an injury will reduce your income, or you buy life insurance to support your family in the case of your death then this is a hedge. Although hedging is defined as an investment taken out to limit the risk of another investment, insurance is an example of real world.

To understand hedging let us take example of two companies say company A and company B from the same industry producing product X. Now company A produces X that is twice as good as its nearest competitor, so you think that A’s share value will rise over the next month. But the industry is always susceptible to sudden changes in regulations and safety standards, meaning it is quite volatile. This is called industry risk. Despite this you want to find a way to reduce the industry risk. In this case, you are going to hedge by going long on company A while shorting company B. The value of the shares involved will be say Rs. 1, 00,000 for each company.

Now, how will this help you? If the industry as a whole goes up, you make profit on company A, but lose on B. But if the industry takes a hit you lose money on A and make on B.

This is also called pairs trading and it helps investors minimize risk in volatile industries.

There are certain Stock Advisory firms providing Equity Tips which can help you in hedging and minimize your risks.

Aditya Todawal
e-Marketing Executive
CapitalVia Global Research Ltd.
http://www.capitalvia.com

Gold is a metal that has only faced constant increase over the span of the past few years, and it is becoming a credibly safe investment for every nation even if it is compared with the business markets. It is growing at a consistent speed and has the prospect of continuing to do so in the same manner in future.

There came a phase in history when the worth of gold faced a complete collapse. It almost faded out, but now it is again surfacing with a lot of significance attached to its value.

There was a time when people used to buy currencies; like pounds and U.S. dollars as a safe investment for future relief, but nowadays gold has replaced them. People all around the world, even investors, have started showing their interest in purchasing gold as a risk free investment.

The purity of gold and its weight should never face any impurity or any reduction. Therefore, potential gold bullions retain their security of being stable because the rise of gold has never really had a collapse, and keeping in mind the ongoing scenarios of the economy of various countries, the worth of gold is likely to face further inflation. Hence, it is likely to benefit more in the long-run.

Out of the probable four categories; stocks, futures, bullion and exchange trading markets, it is the bullion that will preserve its assessment. Stocks can collapse, futures can alter and exchange traded funds can also face instability, therefore, loss can take place in any sort of investment except for gold.

Gold ingots have a record of being consistently secure, may it be gold bars or gold coins, as both have the strength and weight of being actual gold rather than a mere and probably vague demonstration of it. Both have a reputation of maintaining their value even for people who have no link with the business markets. For them, purchases of bullions are highly secure and retain their significant value even during economic decline or a financial slump. Moreover, gold coins and gold bars can be easily exchanged and collected making them the perfect means to invest money in.

Aristocratic families from Europe and Asia along with the people who boast a traditional wealthy background have preserved a strong percentage of assets and possessions in the form of gold. For them, buying gold in huge percentages is a secure factor. The same sort of appeal has started gaining more interest among common people and business related personnel. If you want to shield yourself from deflation, stock market limitations, exchange problems and evade financial uncertainties, there is only one investment that shall shelter you – gold bars and bullions.

Thus, the above mentioned indicators provide ample evidence as to why investors are increasingly showing interest in the purchases of gold, the pursuit is bound to gain on a rapid pace.

Learn how to buy gold in the times of recession for investment from experience of professionals.

As the name indicates, spot price is the fee of any item that is to be paid immediately on purchase. Similar is the case for gold spot price i.e. the amount that you pay in order to get a particular quantity of gold. It is also sometimes carried out one or two days before the actual trade takes place, but in normal cases this period never exceeds this limit. In simple words, gold spot price is the price at which the market is buying and selling gold.

Gold items are one of the most expensive articles; hey are precious gifts for a woman, and a man can give gold jewellery to his lady. Buying gold is nothing less than a technical task due to its high price which is also quite volatile. The price changes rapidly according to the situation of the market and a country’s economy.

Gold spot price is the twice a day setting of the value of gold against the British Pound as a commodity by the five members of the London gold pool. This rate is then converted into US dollars while Euros is used as a benchmark for the pricing of gold, its worldwide derivatives and products.

The spot price of gold is set in terms of British pounds, per ounce of the precious metal, by the London Gold Market Fixing Limited in a secure teleconference at 10:30 a.m. and 3:00 p.m. London time on each trading day. Physical gold can be purchased at the spot price from a variety of sellers that will deliver bullion to you or sell you gold that they possess in their vaults. Makers of gold coins and other similar products usually sell their wares above the spot price without verifying the purity of their items.

There are various tricks through which you can buy gold by paying not a penny more than the spot price. The first of these tricks is to make comparisons. Compare the gold prices that companies offer with the current gold spot price. Make a purchase over the phone or through a secure online order form. Find out the details of delivery if you are purchasing physical gold or request a written record of the transaction if you are buying a share of gold in a vault.

Another very useful trick is to use common sense and avoid sellers of gold coins along with other such items if you are looking to purchase this precious metal at the spot price. Coins are often not verified in terms of purity, so you may be paying far more for them than the actual gold content it contains.

Finally, find out how quickly you can execute an order to sell your gold if you are buying gold from a company that sells ownership of it in their vaults. You could lose a substantial amount of money on price movements if the dealer delays buying back the gold that you have purchased.

Learn how to buy gold in the times of recession for investment in the experience of professionals.