SHOULD I BUY OR RENT HOUSE?

One of the classic dilemmas haunting lot of people is the issue of buying versus renting the house for accommodation purposes. Some experts feel that buying a house is the better option as it helps you create an asset in the long run, while some believe that renting is better option considering the prohibitive rates realty commands these days. And by renting one can save money by paying rent which will be lower than the home loan EMI and these savings can be invested for long term wealth creation. So both arguments have their own merits and none can be dismissed easily. Both of them have their own benefits and shortcomings. So, before we decide on which way to go ,we need to fully understand the pros and cons of each of these options.
BUYING HOUSE
PROS OF BUYING

- It creates an asset for you in the long run.

- You don't have to pay for your accommodation after you pay off your loan, which is maximum of 20 years, unlike,in renting where you have to pay monthly rent for every month till you continue to stay in the rented premises.

- You also get income tax benefit. Upto Rs1.5 lakhs of your interest component paid in the year on your home loan is deducted from your taxable income and Rs 100000 principal repayment is also tax free. The same benefit is also available to your spouse in case you decide to go for joint loan for the house.So the total tax able income deduction benefit possible on your home loan could be a high as 5 lakhs for both the spouses.

- House may be used for generating income under reverse mortgage post retirement.

- No hassle of changing house every 11 months,unlike in rented accommodation.

- Fulfills the dream of having roti kapda and makaan.


CONS OF BUYING

- The monthly outgo in the form of home loan EMI is generally higher than the rent.

- Demands long commitment towards EMI payment. You have to commit a large portion of your income towards monthly payment of EMI for a relatively long period of time like 10-15 years or even 20 years. This limits your ability to meet exigencies and financial emergencies.

- Once you buy a house , you give up the flexibility of moving to another locality in the same city or to another city. You are stuck with that locality for ever,unless you decide to sell it off ,which is long and cumbersome process.

- Ownership of house also comes with high bills like society maintenance charges etc which have to be paid monthly/quarterly etc. This can feel like paying rent after buying a house and be very annoying for few.


RENTING HOUSE

PROS OF RENTING

- Lesser financial strain as monthly outflow is lesser.The rent paid for a house is generally much lesser than the home loan EMI paid to buy a similar house.

- Offers flexibility of choosing neighbourhood as and when desired,unlike with self owned house.

- No long term commitment of paying EMI.In case of any financial stress one can always stop paying rent ,if its higher, and move to a smaller place which has lesser rent. This is not possible with self owned house as the EMI is fixed and has to be paid every month .


CONS OF RENTING

- The money paid as rent is an expense unlike EMI which builds an asset.

- Lower IT benefit for money paid towards rent as against money paid towards home loan EMI.

- Forced to change house every 11 months and pay brokerage for new house on rent. This has both financial , emotional and practical difficulties. Changing house every now and then can throw off your social life out of gear. Your kids might have to shift to new school etc unless you manage to find another house in the same locality.

- No income possible post retirement, unlike with self owned house which does offer an option of income through reverse mortgage.

SO WHAT SHOULD YOU DO?Well you must decide for yourself depending upon your need . I would say you should go for buying a house as its pros far outweigh its cons. However, you may consider renting as well in case you cant afford to pay the EMI of the house that you want or are not sure of the certainty of future cash flow .for example if your job etc is not stable.

NOMINATION FACILITY - A MUST DO FOR ALL

Have you ever wondered what happens to all the money in savings account, mutual funds , shares, bonds etc in a person's account , after his demise , in absence of a will? You would assume that it goes to the legal heir. Well it does technically,but not in practical sense. That's because I read somewhere that most of the money in such cases is not passed on immediately to the deceased's wife,children etc due to the legal cases filed from other family members. Everyone wants to claim a piece of the money left behind by the deceased and hence it gets stuck in legal wrangle. In effect , the basic reason of providing for his dependents by the person after his demise is defeated.Certainly, you would not want this to happen to your dependents. So what should you do? Well the answer is simple:Nominate the person whom you want to inherit your investments and savings in all your investments and savings documents.

What is Nomination facility? Nomination facility is an option available to us where we can choose to nominate the person whom we want to inherit our savings and investments in case of our demise.The application forms for every investment or saving option has the column where we can provide the nominee details like his/her name,DOB ,relation with you etc.The bank or the financial institution concerned will refer to this at the time of passing on your money to your dependents comes.

How will it help? Nomination facility seeks to eliminate the chances of legal wrangle after the person's demise and facilitates the access of money by the nominee as stated by the investor/account holder.It helps the nominee to get the money faster.

Who will it help? It helps both the primary investor/account holder and the nominee since it facilitates the transfer of money as per the primary investor/account holder's wishes.

What if its not there? In India, we still find lot of people not using this option. Lack of nomination facility creates a situation of uncertainty and can lead to delays in transfer of money to the person you would have wanted to. This can happen due to the legal cases filed by other family members claiming a part of that money as their rightful part.When that happens the person/s who you would have wanted to inherit your money will be left out in the lurch at the time when they probably need your money the most.

Where all you need to have nomination? Savings account, mutual funds,FDs, PPF, EPF, NSC,shares , bonds . In short wherever you have money invested or saved you must have a nominee . The nominee details need to provided to the bank/financial institutions in writing.

Who to nominate? This is your choice. You may nominate your wife,children etc. whom you would want your money to go to.In some cases like jointly held accounts, you may nominate more than 1 person as your nominee . In case you are nominating more than 1 person as your nominee , you can also specify the ratio in which they will get the money. For example you may want 60% of your money to go to your wife and rest 40% between 2 of your daughters.

Can I change the nominee details ever? Yes , you can change the nominee details as and when you want. The same needs to be intimated to the respective bank/financial institutions in writing.

What's the latest on this ? Recently , RBI has made it mandatory for banks to ask for nomination details from all its customers having saving account with them. The same detail will have to be mentioned on the passbook. You can not leave the nominee details blank, unlike earlier. In case , the customer does not wishes to nominate anyone, he will have to tell the reason for doing so in writing to the bank.This is big change which will hopefully make the whole process of deciding on the legal heir to the money in saving and other accounts much easier.
What about you? Have you nominated your loved ones for your investment and other savings? If no, then you know what should you do first thing tomorrow.
Stay wise n stay wealthy.

Choose Your Investments Carefully for Long-Term Growth

Entrepreneurs and beginning investors must be aggressive, but you don't have to be careless or foolish. Concentrate your investments in markets where you know and accept the associated risks. For example, if you invest in the futures market, you must be prepared to lose your entire nest egg in a heartbeat. However, this can also be an area of fantastic returns on your investment.
Other investments, like savings accounts, may offer safety, but offer little in the way of appreciation. Your task is to find the investments and business opportunities which offer a level of risk you can live with, while rewarding you sufficiently to reach your wealth building goals. Some investments, which offer stability and growth, include real estate, numismatic coins, and antiques.



In my opinion, however, the best investment in the world is a small business that you own and operate. Read books on small business management, attend seminars sponsored by the Small Business Administration, and talk to other small business owners.

One source of information that people think is great is the college; however, I have a problem taking business advice from a teacher who teaches about business but has probably never operated his or her own profitable business. The classroom is a great place to learn about the theory of business and investing, but search for your mentors beyond the classroom.

Wealth builders must learn from the school of hard knocks, and without the valuable experience gained from your daily exposure to the marketplace, and observation of other successful people, you will never learn to succeed or control your investments. As a rule, you must always maintain absolute control of your investments.

A wealth builder assumes responsibility for his wealth program and does not abdicate control of his resources to anyone. Absentee ownership is fine for the wealthy, but the wealth builder needs to be on hand. Nobody in the world cares about your future as much as you do, and nobody cares about your assets as much as you do.

If you want to get ahead, maintain control of your budding empire. Watch your assets like a mother hen watches her chicks. However, with all this effort to build wealth, don't lose sight of the big picture. In all your getting, don't lose sight of who you are, and don't forsake the love of family and friends.

Entrepreneurs are driven to succeed by an uncontrollable urge to surpass those around them. They are willing to work atrocious hours, sacrifice leisure, forego vacations, and focus every waking minute of their attention to their baby venture.

This is fine for some people, but most of us need to take time to maintain relationships and rest the body and soul. Don't sweat the time spent with your family. And don't ignore your body's demands for rest.

3 FINANCIAL MISTAKES OF MY LIFE

After having completed almost over 6 years in corporate world earning paychecks and living off it, I decided to do a bit of introspection last week and found out that in last 6 years , I have made some grave financial mistakes.I thought of sharing these mistakes with all my readers so that they can learn from them and don't end up making these mistakes themselves.
MISTAKE 1 - Opting for "No PF Deduction"

After I joined my first company ,I was thrilled at the thought of earning a handsome amount of Rs 12000 p.m.(Struggled to get anything better than that in those days after dot com burst). But I was taken aback when the first pay check that I got was for Rs 9800. I was baffled . I wanted to know what happened to the rest. A quick call to the HR and I was told about the various deductions that had eaten up the rest of my money. Eaten up? Yes that's what I felt then, and hence wanted to reclaim my money. So, I found out that there is an option wherein one can choose not to have his Provident Fund deductions out of his salary. off course you have to give a declaration to that effect to your company. I did so, and started enjoying my full salary from next month onwards. It was good while it lasted because it gave instant gratification on every occasion I splurged that extra cash. But, later on I realised that it was a big mistake. Not for nothing, PF deduction is made mandatory, by the Govt Of India. This PF deduction is kind of forced saving for our retirement. And the fact that I did not opt for it meant that I was left with no saving whatsoever after I quit the job. The money which could have gone in the PF fund, would over a period of next 35 years become a huge amount due to compounding effect.I lost out on that opportunity of starting with my retirement fund really early in my life. But, now I can not go back in time and reclaim that money. So my advice to all of you is to never do this with your PF deductions. Infact, if you can , then increase the percentage of PF deductions from minimum 12% to a higher level which you can afford. The more you save in your initial years , the bigger will be your final retirement corpus.

MISTAKE 2 - Buying an insurance policy just to meet a target and then letting it lapse.

I was working with ICICI Prudential and was involved in insurance sales. ICICI Prudential is known as the most aggressive company in the insurance domain in India and as such being in sales meant that we were always under huge pressure to log in more policies than the others. But insurance being insurance, no one wanted to buy it.Now under pressure, sometimes,the sales people buy policies in their own name just to meet the targets. This was counted under their targets which helped them save their skin from the boss's ire and then later on they used to cancel the policy.Cancellation of the policy in the free look period meant getting back almost the whole money back. So it was tactic used by lot of sales people to manage a difficult month in sales. I was always dead against it and never thought of buying a policy on ones own name just to meet the target as the right option. I always believed that you should buy a policy from your own company only if you really need it. But one one such really tough months when sales were not happening , I too fell for this. I convinced myself that I am not buying this policy to meet the number but because I really need it. So I bought the policy for RS 25000 annual premium. And Since I had somehow convinced myself that its a policy that I need it , I didn't cancel it during free look period. Had I cancelled it during free look period of 15 days , I would have got my money back. I continued with the policy for 5 more months and then stopped paying. I stopped because I knew that it was not the policy I needed. It was not worth paying for a ULIP . Result was that I lost my hard earned money in that policy. Had I put the same money in stock markets then,today I would have been sitting with a neat profit of atleast 400% on that. That taught me that one should never buy own company's product just to meet the numbers for your boss.

MISTAKE 3- Not transferring my PF accumulated from my 2nd and 3rd job.

This mistake is the lesser of the earlier two. You all know that in my first job, I didn't have any PF deductions and hence no hassle of transferring my PF money. However, I had PF deductions in my 2nd and 3rd job . But after I quit those respective jobs, I didn't get the money transferred to my new PF account. I have no reason why I didn't do so. Maybe I didn't think it was important enough or maybe I was just too lazy. But the fact is today after so many years I have not yet got the money transferred to my new account.Worse is that I have forgotten details like My employee ID etc of my earlier jobs. I am really at loss to explain this lack of sense of urgency on my part to deal with something which is so very important.But, the good thing is that , I can still reclaim it and get the money transferred. Hopefully will do so now.
I hope you will stay away from these mistakes that I made. If any of you have some thing similar to say , please do share with the fraternity.

How to a Earn Residual Income

Residual income is also known as passive income. It is an income generated through indirect involvement in something. Residual income is extra cash that you have earned as a product of another action like for example, writing a book and later you are receiving royalties on the sale of each book. Residual income is very appealing and attractive. Some people would like to free up time so they can seek other ways to earn income and others don't want to work anymore but desire income.
Here are some things to consider to earn residual income.

• In order to achieve extra income, try to consider investing your money. Popular venues to earn an income that requires an initial investment include interest, rental properties and dividends.

• Know where you are good at. Once you know what your strengths are, you can explore your skills and abilities to earn residual income.

• Create a site based on your interest and knowledge. Chances are if you are interested to something, others are interested too, and if you have a huge knowledge base to back that up, that is the prime situation for creating a site for others to link up and use that knowledge.

• Internet revenues. This is another type of popular residual income. This is money earned on web site through promoting and advertising a certain product or services. While, the initial direct work in building the business marketing web site is needed, the monthly earnings from advertising keeps on generating and this creates a passive income.

Stock Market Trading: Here Are Some Little Lessons to Learn

Stock market trading is like buying a company. The shares are equal parts of the company and each shareholder owns a portion. Most people watch infomercials or hear people talking and they believe that the only way to make money in the stock market is to buy and sell frantically.
Think about it, would you buy a store one day, and sell it right away the next? Maybe if the price was right. However, you have to ask, why did you buy the store in the first place? To make money for years and years, not just for one day.

You earn money from the profits of the business when you trade in the stock market for long-term results. After the company you purchase pays their taxes and other bills, the money left over is their earnings.

These earnings go back to the shareholders as dividends. The best news is that sometimes, you can reinvest those dividends and get more shares that grow and pay even more dividends. There's a lot of money to make when you do stock market trading that's not just from the rise and fall of the stock price.

One of the top mutual fund managers said that he purchased stock after he sampled their customer service. If the stock was that of a restaurant chain, he ate at the restaurant. If it was an airline, he flew the airline. Often the consumer sees situations that create hazards or growth in the company.

All of these things affect the life and profitability of that company. You need to look at the company from a business angle. Are their computers junk, or do you love the new changes and models? Does the company have a good reputation for quality? These are simple questions that you need answering before you purchase a stock.

People that do stock market trading sometimes look for price fluctuations and have no concept what that company does. Trading on price movement alone puts your money at risk to the whims of the market. If you know that a company's financial situation is solid, then you don't panic and sell each time the price of the stock dips.

Remember, the stock price is not real. It's what people perceive to be real. When you buy stock without knowing any of the companies financials or even the type of industry they're in, you might as well put your money on the pass line at a Vegas craps table, because your odds of winning are just about the same.

Understand the company and the industry when you do stock market trading. During times of depression and recession, some companies do quite well. During bull markets when the economy has a sunnier picture painted, other companies do quite well.

You can grab up bargains in the period of time when your company stock, through no fault of it's own, drops in price. The company is still the same, but the idiots that buy willy-nilly drive the price down because they don't understand the real money made on long term investing. If you know the financial situation and the company and it's good, during that industry down time you get bargains on that stock so it's time the to buy more.

Knowledge is your best comrade when you do stock market trading. Just remember the staff at Microsoft. If they sold their shares at first, they would have made pennies. A few years later, a sale would have brought them thousands. Those staffers that knew the quality of their company and held the shares ended up making millions because they had knowledge.

Interesting Fibonacci Retracement

Is The Rally Over, or Just Starting? It's been a nice bounce off the "devil's bottom" (666 on SPX, March 6), if it was indeed a bottom. We've been there before, so caution is warranted. However, some signs are there that this 'could be different' this time around. New lows seemed to have peaked at the November lows and while price made a dash lower, there is a positive divergence. Perhaps the situation may not improve but it's may not get much worse, either. Fear is another factor, another positive divergence. A new high in the VIX was not seen at the recent lows in March. Many out there are non-believers in this rally, too...after being burned time and again. Finally, bond yields were lower on March than in November...another positive. While inflation is an issue to be reckoned with someday, the stimulation methods seem to be putting a stop to a deflationary cycle.
The following chart shows an interesting 50% retracement level we reached on Thursday's close, which is based on previous 1000 highs and the 666 low in the S&P 500 Index (SPX). 50% is a Fibonacci Number, but also is a logical retracement point on rallies.

Anecdotal Evidence The complexities still exist around our economy and cannot be solved with a few Fed plans, banking or credit. However, some small 'signs' are out there, I'll share with you what I am seeing. The house next door to us was a foreclosure last year and had been on the market for about eight months. It was recently sold, albeit for a big discount. In fact, I've seen more sold signs around the city than I've seen in years. In retail, stores are seeing traffic again, and it's not just window shopping. Restaurants are starting to get patrons back, too. Finally, my parents bought a new car recently, first one in six years. Did they need one? No, but they got such a great deal that it was tough to pass up. A couple of other family members also bought new cars lately. Small but notable signs...we'll see if they turn out to be meaningful. Sentiment - Improving, but... The economy and the stock market are all about sentiment. Good feelings tend to flow to positive action, and vice versa. Let's be honest, the economy was literally frozen for the last six months, and it wasn't just credit. They say borrowing is the lifeblood of the economy, yet the savings rate has been on the rise, its largest increase in decades. Could it be this rise is due to the lack of confidence by the public in investment? Recent sentiment figures show a modest improvement but like any trend momentum is key here. Jobs are still being lost at an alarming rate and confidence, while on the rise is still fragile. It won't take much bad news to get that turned back. Bonds, Gold and the Greenback I was completely stunned by the action of these three on March 18 following the Fed announcement. With Bernanke stating the Fed would be buying treasuries in a big hurry and in a big swoop, along with other programs...bonds rallied huge in about thirty minutes. Gold went higher by nearly $70 while the dollar plunged. Since then these markets have settled down somewhat. However, I can't recall such a large move simultaneously. This was clearly the nuclear option by the Fed, going 'all in' attempting to pull the economy up from the bottom. Will it work? History shows that printing your way out of a problem, inflating the economy has never worked for any nation. Why would it work for the US in this instance? There is a high risk in this approach and consequences will be severe if it fails. A market reaction such as that seen on March 18 tells us so.

DO YOU KNOW THESE 10 THINGS ABOUT STOCK MARKETS

Investing in stock attracts extreme reactions from people ranging from extreme enthusiasm and optimism to complete pessimism and apathy. None of this is right way of approaching stock markets. Stock markets like any other asset class do offer scope for capital appreciation within the boundary of its inherent risk reward equation.Fortunes have been made on stock markets, as Rakesh Jhunjhunwala or Warren Buffett would tell you. But for every Warren Buffett and Rakesh Khunkhunwala,we have quite a few who have lost money in the stock markets well. The key is to understand the dynamics of this market and play it well. So, for you and me , what are the things that we need to know before we trust equities with our hard earned money? I have outlined 10 such things which all equity investors should know. 1. Stock Market is a financial institution , not a casino - First thing to understand for everybody before we get any further is that stock market is a place where trading of stocks happens. It is not a casino where you make money by wagering. There is a method to even day trading that takes place on the indices and hence you must not approach stock markets just to try your luck. You might get lucky at times, but,certainly not always. If you approach stock markets like a casino then be prepared for an outcome like you get in casino.
2.Understand the risk reward ratio - Equities like all other investment class has its own risk reward ratio. Equities are supposed to be relatively riskier asset class as compared to debt based instruments like FD, bonds, Gilts etc. So people investing in equities should be aware of this fact that equity is riskier than other investment tools. And since there is more risk in equities, the chance of returns are also higher in it than other investment tools like Bonds, Gilts, FD etc. One must enter into stock markets only if he is ready to take the risk that is inherent in equity investment. 3.Past performance is not an indication of future performance - This might sound cliched but the fact is that this is very critical for all investors to understand.Past performance of a particular stock or broad markets is no indication or guarantee of future performance. In other words, if the market did well in last 12 month delivering over 30% returns, it does not mean that in next 12 months it will again deliver 30% returns. The markets can under perform or over perform over next 12 months and that may not have anything to do with the way markets behaved in last 12 months. So one must make his investment decisions based on the fundamentals of the company, its management quality, its growth potential etc and not on the basis of its historical returns. 4.Know about the company you want to invest- Great investment guru Warren Buffett says that he invests in equities based on his assessment of the quality of the management running the company, the company's inherent strength and its growth potential and whether the company enjoys a consumer monopoly or not in the market.He says even if the stock markets were to shut for next 20 years , he would still invest in the same companies. The essence of this is that while investing in a stock , one must do a thorough analysis of the company, its management quality , growth potential etc. One must never invest based on a "tip". Its your money and hence you must know the company before you give them your money. 5. Trust professionals if you don't have the time - For all those who don't have the time or expertise required to follow the stock markets, companies , its financial etc, there is way out. They must trust professionals to do this job for them. One can take help of noted stock brokers/financial planners etc to help them out with this. 6.Avoid joining the herd - Warren Buffett's prescription for making money in stock markets is to "be greedy when others are fearful and be fearful when others are greedy". Or in other words, one should try and buy when every one is selling and sell when others are buying. Rakesh Khunkhunwala, the other day said in an interview that he made his fortune by buying stocks much against what others were doing before Madhu Dandwate presented his budget in 70s. He took a contrarian view and that paid off handsomely. 7.Define your goals and stick to it -Another important thing is to enter the markets with a target in mind of how much returns you want from it. Make that a realistic target and then stick to it. So for instance if your target is to make 20% returns on a stock then sell it once it appreciates by 20%. Don't wait for it to go up to 25% or 30% .Doing so will expose you to the risk of loosing even 20% gain that you have now if you waited too long. 8.Buy stocks with stop loss -Almost any trader active in stock market will tell you the importance of buying stocks with strict stop loss on it. Stop Loss is a value below the market price of the stock which is assigned to that stock at which you sell it, cutting your lossses. This ensures that you looses are within manageable limits. For example, lets say you buy Reliance at Rs 1600 and keep a stop loss of Rs 1500, then this ensures that the maximum loss that you are willing to take on this stock is Rs 100 and not more, thereby limiting your downside risk in the stock. 9.Monitor the funds - It is not only important to invest in good stocks and build a good portfolio , its also imperative that you monitor the performance of the portfolio and each of the stocks regularly, to weed out the deadwood from the portfolio. 10.Stick to index funds - For all those who want to invest in mutual funds , index funds offer a great opportunity to invest in the markets at minimum charges. The relative performance of the index funds are same, if not better, than any actively managed fund. This coupled with the fact that the charges are lower ,makes it a better option than actively managed funds.

So, these are the top 10 things you must be aware of before trying your luck with stock markets.Please add up things which you feel I might have missed out.

Something Every Stock Trader Needs To Know

One of the known strategies in marketing today is the Contrarian trading. This is an act of buying stocks even though all indicators affirm that those products will eventually go down. As risky as it may sound, there are still some people who are not afraid to try something new for their business and when they have tried this, they will surely find how beneficial it is for them. Many businessmen hire advisors who give them some recommendations as to what they have to do in order for their business to thrive. However, did it ever cross your mind that they are merely following what they have read or heard from other people? Contrarian investing is not about getting ideas from other people but doing different things to be able to achieve top profits.
What the other investors say in their articles or other sources will only mislead you because you will think that it is right to follow their steps. There may be instances wherein you might think that they are doing okay today and so you copy what they are doing. However, what if the time comes when their sales declined and their customers are slowly decreasing? You should go against the flow in the very beginning of your venture. If you are able to do this, you will be counting your profits and increase them every single day.

However, in contrarian trading you may not always be right. There are certain instances when you have to make efforts and money but in the end, you will not gain any. You will be facing a lot of risks and committing mistakes as you make your contrarian investing. As a matter of fact, you will make more faults than making the right guesses so when you want to avoid them, you should make the selling quickly.

In addition, you will need to exert efforts in order to keep your losses in minimum instead of sitting in your office and waiting for the opportunity that will enable you to avoid the deficits. Those who are willing to be in the contrarian trading industry should permanently possess a view of the bear market, which refers to the steady plunge of certain products or services in the stock market.

It is not true that the contrarians are pessimistic. It is also incorrect to state that they believe that everything is hyped. In reality, both pessimism and optimism will result to the plunge of the business when they are used in an unjustified manner. What you can do about this is to observe the stock movements and the crowd behavior.

Be wise enough and differ from the business manner of conventional wisdom. This will give you good profits. In the end, you will be one of those individuals who thank the contrarian investing approach, which will enable you to seek opportunities that occur in periods when everybody is doing the opposite.

ETFs for Long Term Investments

ETFs can be a great way to profit in the long term. If you want to get into investing and do not know which stocks to buy and hold ETFs can be a great benefit to you. And here is why.
1. Already Diverse

ETFs are already diverse. If you buy an ETF you are buying something that tracks many different companies and possibly many different sectors. So instead of you trying to find 20-30 different companies to hold you can simply invest in a couple big ETFs.

That would give you the power to have a diverse portfolio which is great for the long term.

2. ETFs Pay Dividends

Many ETFs will pay a nice little dividend. That is a great added bonus to owning a diverse portfolio. There are even income ETFs that you can search for if your interest is mainly in the dividends.

3. Covered Calls

Many ETFs will also allow you to sell covered calls on it so you can make an even higher income off of it. When you sell a covered call you are selling someone else the right to buy your ETF from you at a given price on or before a given date, so you might end up getting called out.

But if you sell the call with a strike price that is higher than the price you paid for it you would stand to profit from exiting the position anyways. Covered calls are also a good way to pull out an income and make up some of the loss when the ETF is going through pullbacks.

4. Most Mutual Funds Don't Beat The Market

Most mutual funds do worse than the market average. Well there are ETFs out there that allow you to buy the market average. In other words these funds allow you to beat the majority of mutual funds.

How To Start An Investment Program

If you are just beginning an investment program, the first two things you want to do before you start are pay off your credit card debt and build up an emergency fund.
Most experts and common sense dictates that you set aside some money in case of emergencies. Investments are usually long term in nature. Because of that you don't want to make an investment, have an emergency crop up and then have to tap into your investment account, especially if the market has declined in value.

In addition, it makes sense to pay off credit card debt with high interest rates first. The likely that you'll earn a return of eighteen to twenty percent especially today is not likely to occur. Also do to the fact that you have to pay a commission to trade and pay taxes on any gains, your best investment is in reducing your debt. This will give you a higher return without commission or taxes most likely.

Regardless of your debt, you should start setting aside a fixed amount of money each paycheck into an emergency fund. Over time this amount will grow. Put it someplace you will not touch it. Everything else use to pay off your debt.

Once you have done that then take the money you were spending and start putting it in an invesment account. If you don't have enough to open an account at a brokerage, ask them if you can still open it and start putting money into it. Sometimes they will let you do it that way. If not, choose another brokerage or put the money in a savings account to at least earn some interest in the meantime. Check around for a good interest rate as most banks in your neighborhood do not pay any interest rates. However, you might find one online that will pay a much much higher rate.

Tips To Time The Stock Market

1) When doing stock pick, investors can take note of: Debt/equity ratio, return on equity ratio and price/earnings ratio. Generally, the higher the debt/equity ratio, the more costly the interest expense for the company. Investors should question whether the company is able to finance its debt. Return on equity ratio shows how much profit a company generates with the money shareholders have invested. Generally, the higher the return on equity ratio, the better it is. Consistently high return on equity over a long period of time - at least 15% for 10 consecutive years, show that the company has sustainable competitive advantages. The price/earnings ratio is a measure of the price paid for a share relative to the annual profit earned by the firm per share. A low P/E ratio could mean that a stock is undervalued by the market (making it a possible buy) or that it has lost value. These ratios should not be studied in isolation; they should be compared to the industry average.How to do your stock pick?
2) The cash flow statement report on operating activities, investing activities, and financing activities. Positive cash flow is a sign that the company is healthy. One should not study the company's cash flow in isolation. To get the full financial picture of the company, you also need to study the balance sheet, income statement, and statement of owner's equity and do a comparison with the financial health of its competitors. Positive cash flow is a good sign, but negative cash flow is not always bad news. Sometimes a company may have negative cash flow due to investments in new equipment which is beneficial in the long run. Hence, there is no simple rule of thumb to say whether or not a company with strong cash flow is attractive.

Gurus know all about technical analysis.It is possible to time the market,maybe not exactly.There is always some "noise trading" eg. by speculators and institutions that trade for reasons unrelated to fundamental value.

What Options And General Tips Do Investors Have

Investors today have a wide range of choices: stocks, bonds, mutual funds, Treasury securities (including savings bonds), options, commodities, commodity futures, real estate investment trusts (REITs), variable annuities and many more. You must investigate before you invest-and remember that every investment involves some degree of risk. These investments are not insured by the federal government if they lose money or fail, even if you purchase them through a bank or credit union that offers federally insured savings accounts.
Make sure you have answers to all of these questions before you invest.

How quickly can you get your money back? Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all the money you paid for them. Other investments, such as limited partnerships, often restrict your ability to cash out your holdings. What can you expect to earn on your money? While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes. Also, keep in mind that just because an investment has done well in the past, there is no guarantee it will do well in the future. What type of earnings can you expect? Will you get income in the form of interest, dividends or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time? How much risk is involved? With any investment, there is always the risk that you won't get your money back or the earnings promised. There is usually a trade-off between risk and reward: the higher the potential return, the greater the risk. The federal government insures bank savings accounts and backs up U.S. Treasury securities (including savings bonds). Other investment options are not protected. Are your investments diversified? Some investments perform better than others in certain situations. For example, when interest rates go up, bond prices tend to go down. One industry may struggle while another prospers. Putting your money in a variety of investment options can help to reduce your risk. Are there any tax advantages to a particular investment? U.S. Savings Bonds are exempt from state and local taxes. Municipal bonds are exempt from federal income tax and, sometimes, state income tax as well. For special goals, such as paying for college and retirement, tax-deferred investments are available that let you postpone or even eliminate payment of income taxes. The Securities and Exchange Commission (SEC) requires public companies to disclose financial and other information to help you make sound decisions. View the text of these files online. You can also call SEC's toll-free Investor Information Service at 1-800-732-0330 to obtain free publications and investor alerts or to learn how to file a complaint. The Financial Industry Regulatory Authority (FINRA) also provides up-to-date market data and information for a wide range of stocks, bonds, mutual funds, and other securities through its Market Data Center.

The following companies rate the financial condition of corporations and municipalities issuing bonds. Their ratings are available online and at many public libraries.

Financial Security Planning : Building Wealth and Freedom Principles of Wealthy Individuals

Have you ever felt once in a while how great would it be having all the good things in life, without having to worry where the next money will come from, retirement issues, etc?


But now, if your reading this and you are in a paycheck world, do you think it is still be possible for you to just enjoy a quiet morning, with a great coffee and a great sun? or maybe even enjoying trips from all the places you want to go so bad, without ever thinking about deadlines or what the boss might say?



The next best thing to do in order to do wealth building in a paycheck paycheck world, is to take a deep breath, know what is the difference between the poor and the rich, not is there anything wrong with being poor, you can be happy being poor or rich, being wildly wealthy is better. If we know the principles behind the ways to become wealthy, all we need to do is just duplicate it.



Some of the concepts below are some of the many principles the wealthy have used to create wealth. They have duplicated these principles to become what they are and have what they enjoy today.



1. Believe in the power of compound interest in investment

Compound Interest Investment is referred as to the investment in relation to time and interest. The higher the time, the larger the interest and therefore the compounding goes on and on.



Whether you are investing in Forex, Stocks and Commodities, compounding is the life force of your investment. You plant a seed, give it time to nurture and it will nurture you in the end, having your fruit bearing tree ( with money of course).



2. Real Estate and Financial Markets : accelerate your wealth



It is said in statistics that 98% of the millionaires have built wealth because of property.



This is not new, we all know that as population grows, so is that value of land, and is one of the most secure investments ever.



Financial markets is said to be risky, but most successful men and women will find that the financial markets is a river of money. You cannot fight the flow, you will only hurt yourself. Studying, understanding and going with the flow of the financial markets, combined with real estate makes a wealthy, wealthy man.



3. Leverage. The Wealthy repeats this principle to be wealthy in no time.



The financial markets has this one of a kind of specialty, the leverage. It uses a small portion of your money, borrows some more and use it as your investment. They say here is where it comes risky, but a proper education and understanding thinks otherwise, it can increase investment exponentially with a small amount.



Forex has one of this special privileges that is less more risky because in Forex you can start small, like $50-$100, and turn it into thousands. Do this process again and again carefully and that dream home is not a dream anymore.



This are some of the concepts that the wildly wealthy have used time and time again to have that nice car, vacations and houses that some might only dream about. Starting to shift your thinking into a prosperous one will open the doors to investments. The economy doesn't have to do with any of it. Let it start from you.

Big Funds Run to Gold

Big fund managers are beginning to Buy Gold, but it's still a tiny proportion of total investable wealth...

SO IT LOOKS AS THOUGH the big rush to Buy Gold is about to get started, reports the Mogambo Guru for The Daily Reckoning, as Julian D.W. Phillips of GoldForecaster.com writes that "The combined gold holdings of the major Gold Exchange Traded Funds and Barclays Gold Trust have grown to 1079.83 tonnes – growth of almost 70 tonnes in two weeks."

This is just part of the good news, too. Because "There are many other gold bullion-holding funds in the developed world from Canada to Switzerland that are not included in this total. If they were the total would be approaching 1,200+ tonnes. Clearly we are seeing a stampede of institutional fund management into gold at present!"

One such fund is the Central Fund of Canada, the top-performing trust in Canada (up 117% in 3 years; the Gold Price in Canadian Dollars is up 77%) and which holds only silver and Gold Bullion, is selling another giant swath of shares to get the money to, as I understand it, buy another big potload of precious metals, which is not that remarkable, I guess, except for where the underwriter, according to the press release, "Exercises Its Right To Purchase Additional Class A Shares", which made a big impression on me for some reason that I don't understand, but I sense that "somebody knows something."

To keep things in perspective, Mr. Philips reminds us to "Bear in mind that at $900 an ounce, one tonne of gold costs $29 million, so far." But even he admits that gold really hasn't gotten up a good head of steam yet. Because "With global pension fund assets estimated at $18.6 trillion by the end of 2005, only a tiny proportion of that amount has entered the Gold ETF market so far. So the 1,200 tonnes held in this manner, via a trust structure, represents only $34.8 billion or 0.19% of these pension funds assets (there are many other types of funds other than Pension Funds as well).

So "Quite a way to go before gold makes a dent on these portfolios."

And on the other side of the trade, "Gold Mine Production Down, But Costs Up 24% World-Wide" says a report at SilverMiners.com, which tells you everything you need to know about the future Gold Price, which assumes that you already know that the price of everything is determined by the intersection of supply and demand, and in the case of gold, supply was down by 88 tonnes last year and is still going down, while demand is going up, and under which there is a rising "floor" price since the costs of gold mining are mounting, and will continue to mount as long as the corrupt socialist morons running the world continue to increase deficit-spending by governments, and as long as the corrupt socialist morons running the central banks continue to create the money and credit to finance the damned deficit-spending, which causes higher prices!

And, of course, this is already old news to gold bugs around the world, as Nick Barisheff writes in his essay, "Making Money in Troubled Times with Gold" at SeekingAlpha.com that in the last year "Gold rose: 9% in Euros, 45% in British Pounds, 25% in Russian Rubles, and 38% in Brazilian Reals" which is not to mention that gold "increased by 31% in Canadian Dollars."

The reason for all of this is that, as he explains, "In 1971, when the US abandoned the gold standard, total M3 money supply stood at $800 billion. Since then, the Federal Reserve has increased the money supply well in excess of GDP growth. In 1987, Alan Greenspan took over as Federal Reserve chairman and opened the money supply floodgates. He expanded the US money supply by $6.5 trillion during his 19-year tenure to $10 trillion - more than all of the previous Fed chairmen combined. Ben Bernanke surpassed Alan Greenspan's record by adding another $4 trillion in just the last three years."

What does this have to do with Gold Investment and gold going up in value so high that I can quit my lousy job and get the hell away from my clinging family, all the time whining "Please stop Buying Gold and please just buy us some food, daddy!" and all the rest of their gimme gimme gimme?

Well, since you asked, the point is that "At the end of 2007, above-ground privately held gold bullion amounted to less than $650 billion, and the total amount of silver and platinum bullion was less than $5 billion. Put together, this is less than one-third of 1% of the estimated $187 trillion of global financial assets", which doesn't even start to address the implications that "China, Russia and the OPEC countries are considering substantial increases to their gold allocations in order to diversify their US Dollar risk", which means that "Any reallocation by these countries will drive prices much higher."

And it is already beginning, as "Last year investors experienced shortages of the smaller wafers and coins, with premiums running as high as 10-40% for gold and 30-100% for silver", which may have been what led Citibank to predict that gold could soar to "$2,000 an ounce sometime in 2009."

And in that regard, people keep asking me if the government is going to confiscate gold, and I tell them "Why don't you ask the government?" Hahaha! As if they would tell you the truth! Hahaha!

But not even mentioning that the Federal Reserve can print up all the money it wants, so they would not confiscate gold for the money, there's the fact that all the gold held at the Federal Reserve is chump change. Because if the Fed still has all of its reported 261 million ounces, then at even $1,000 an ounce, all the gold would only be worth a lousy $261 billion dollars. That's less than a quarter of the Federal budget deficit for this year alone! Hahaha!

And then the government has to store the gold someplace and start absorbing all of the expenses of guarding it, which doesn't even address that the "takings clause" of the Constitution which prevents the government from taking anything away from you, including gold, without paying full market value to you, the owner.

So will the government confiscate gold? Why in the hell would they want to do that? Hahaha!

And that means that YOU should be buying it! Or so I reckon. Ready to Buy Gold?

Trends In Foreign Currency Trading

the Congress passed H.R. 6124, the Food, Conservation, and Energy Act of 2008 (also known as "the Farm Bill") which contains several amendments to the Commodity Exchange Act ("CEA"). In particular, Title XIII of the Farm Bill (1) clarifies that the CFTC's anti-fraud authority applies to certain retail off-exchange foreign currency transactions, (2) creates a new registration category for retail foreign exchange dealers, (3) requires registration for those who solicit orders, exercise discretionary trading authority and operate pools with respect to retail off-exchange foreign currency transactions, and (4) imposes minimum capital requirements for futures commission merchants and retail foreign exchange dealers that act as counterparties to such transactions. Parts of the legislation, particularly those confirming the Commission's anti-fraud authority, were effective upon passage. Other parts of the legislation, such as those requiring the registration of parties engaged in these transactions and minimum capital requirements, will only be effective upon the Commission's issuance of final regulations. Any such changes to the information below will be accomplished through notice and comment rulemaking and will be made available in the Federal Register section of CFTC.gov.

A complete description of the amendments to the CEA effected by Title XIII of the Farm Bill can be found in the Joint Statement of Managers, pp. 291-299, which can be accessed through the House Agriculture Committee's Farm Bill Homepage. Interested parties should monitor the Commission's website as well as the National Futures Association's website, for developments.

The CFTC has witnessed increasing numbers, and a growing complexity, of financial investment opportunities in recent years, including a sharp rise in foreign currency (forex) trading scams.

The Commodity Futures Modernization Act of 2000 (CFMA) made clear that the CFTC has jurisdiction and authority to investigate and take legal action to close down a wide assortment of unregulated firms offering or selling foreign currency futures and options contracts to the general public. The CFTC also has jurisdiction to investigate and prosecute foreign currency fraud occuring in its registered firms and their affiliates. The CFTC issued an advisory in 2001 that discussed these CFMA amendments to the Commodity Exchange Act (CEA), 7 USC 1, et seq.

The Division of Trading and Markets (now Division of Clearing and Intermediary Oversight, or DCIO) issued an advisory in 2002 concerning foreign currency trading by retail customers (PDF). The advisory affirms that off-exchange trading of foreign currency futures and options contracts with retail customers by a counterparty that is not a regulated financial entity as set forth in the CFMA is unlawful. The advisory further states that, if there is a lawful counterparty to the transaction, such as a person registered as a futures commission merchant, the persons acting as intermediaries to such a transaction, that is, in the manner of an introducing broker, commodity trading advisor or commodity pool operator, would not need to register under the CEA if that is their only involvement in futures or option transactions.

DCIO issued an additional advisory in 2007 concerning foreign currency trading by retail customers (PDF). The DCIO Advisory addresses the following issues: (1) registration requirements for associated persons of firms registered as introducing brokers (IBs), commodity trading advisors, and commodity pool operators that are involved in forex transactions; (2) the permissibility of certain unregistered affiliates of a futures commission merchant (FCM) to act as proper counterparties in forex transactions; (3) claims that forex customer funds are segregated; (4) introducing entities acting as FCMs; (5) the applicability of the IB guarantee agreement to forex transactions and prohibiting guaranteed IBs from introducing forex transactions to an FCM that is not its guarantor FCM; (6) prohibiting forex account statements of an FCM's unregistered affiliate from being included in the FCM's account statements to its customers; and (7) prohibiting retail customers from acting as counterparties to each other in forex transactions.

The Forex Profit Accelerator Training : Real People Feedback

If you have not seen ,heard or read about the Forex Profit Accelerator yet, it is understandable. Because Forex Traders have seen too many untrue trading education programs, bad feedback there by people who claim to be gurus in the industry trading education. People have been encountering people who are just there for the money in selling cheap or too expensive courses on the web about how to succeed in Forex.


This article is not about to sell you about the Forex Profit Accelerator, instead of bragging about it, Bill Poulos shared in this some of the REAL comments,feedback and opinions of people who just bought the course. Traders and individuals who really took that step to become financially independent with Forex.



Note : This are unedited comments by real future independent traders



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"Hello guys. I´ve just received my package. I want to congratulate you all involved in this project because it's really impressive. The quality of the material is surprising and I am really excited to begin my studies. Thanks Bill for helping a Brazilian man building a more comfortable future for his family."



* Leo & Josana O., Brasilia, Brazil



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"So far I have made it through two CD-ROM modules, and I am about to start learning about the 1st trading method. I will probably be spending my entire weekend going over the course. Let's just say I think your course is of the highest quality, and is by far the best Forex course on the market. I think you and your company are of the highest integrity and really want to help traders succeed. I am so glad I did not hesitate on purchasing your course!"



* Ken S., Muncie, IN



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"I received the materials yesterday. I had previously been doing all of the recommended reading and videos online so I was up to speed when the box hit my doorstep. I spent a couple of hours reading through the book last night and I understand the material 100 % with ease. I will watch the videos as I get a chance and I am sure it will all stick to my brain the first time through. I have been trading Forex only 2 wks with a $500 account and demo account to see how everything works...



I like what you are doing for these reasons:



1. Your program is done so professionally and with complete "meat" included. I have spent $49 here and there for "systems" that do not detail exact setup conditions, exact entry and exit rules, exact money management rules, etc. This is what I am looking for.



2. Your online marketing and communication and followup is unsurpassed.



3. You limit the number of new students you take on so you can actually maintain enough bandwidth to service them.



4. Your price is not dirt cheap but it is not out of line either. I spent $7500 on {another program} and results have been less than impressive although the training was first rate... I think I'll do better with your approach.



5. You come across as a very straight shooting, no BS, no overplayed hype kind of guy which is unusual. You generate a sense of trust and credibility that I hope turns out to be as genuine as it seems.



It's been a huge dream of mine for the last 10 yrs to make enough money at trading to do it full time, even if "full time" amounts to only 20 minutes a day. The possibilities of this kind of lifestyle are almost too good to believe could ever come to pass for me but your systems gives me renewed hope."



* Steve H., Vestal, NY



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Truly, using "easy" is a scam or marketing strategy, but being "simple" is a technique of effective online learning. Bill Poulos proves it with the Forex Profit Accelerator.



The creator of the course, receives this kind of comments every single day since it launched. I personally believe it, because Forex Profit Accelerator is one of the top Forex Training Courses that has ever been made. It has been made with research and surveys among Forex Traders themselves, dealing with issues and problems directly, with combined technical and analytical approach.



Other than the issues of quality, I know for a fact that the full time staff that helps Bill Poulos care to questions and consultations by the students ( which is not outsourced by the way) is one of the things that makes the investment worth every penny of it.



The only way you can experience this kind of quality training is taking this seriously and stepping up.



Imagine trading 20 minutes a day, every day, and having an income greater than you have now. Ask yourself this first, if you want to trade Forex and it is not with Forex profit Accelerator, what is going to be like?



There is no such thing as "too good to be true". There will always be better ways to do things such as trading. I guess people who believe that there is such thing has not discovered the possibilities and is succumbed to the negative things happening around. As we evolve, ways of dealing with things will be better, more convenient than ever before.

Forex MegaDroid - The Revolutionary Forex Droid to Automate Profits

The development of forex expert advisors has brought a slew of new forex traders into the market and has also helped automate forex trading for the seasoned forex day traders. But just how exactly does an expert advisor work and how can it help you to automated your daily trading and monitoring tasks?
Here is exactly how an expert advisor works. It is a piece of software that has built in perameters that will monitor the forex markets and a forex pair to watch for when the market meets the criteria to open a trade. This expert advisor, or forex software, is installed into a forex trading platform, such as the metatrader 4 and set to active on a currency trading pair. Once activated, it will go to work, monitoring the market for you, waiting for the market to hit those certain conditions so that it can open and executed trades for you, even when your not at your computer. It is all done on autopilot.

The ease of using forex expert advisors and the promise of making fortunes with them is what has drawn so many new forex traders to the fx marketplace. Usually the creators of these advisors test these for a short time on live accounts to post the results to the sales page. While most of them post impressive numbers, sometimes you need to be aware of some of these advisors that need a little more manual tweeking to really get the effectiveness out of the software that many beginners will not know how to do. But in regards to a seasoned forex trader, these automated pieces of softare can be tweeked to a certain point that can automate exactly how you want to monitor the markets and open and close trades so you won't have to be at your computer at all. This is the true power of these robots.

However, this is not to say that some robots will not work for the beginner traders. Some forex expert advisors work very well "out of the box" without any configuration needed by the user and the Forex MegaDroid, one of the most recent EA's to be released is making it even easier for users to get up and running. In the members area, they not only provide the EA to be installed on a trading platform, but the provide the trading platform with the Mega Droid already installed on the trading platform, so all you need to do is download the platform and fire it up on your computer and its ready to start trading on a demo or live account, whichever you prefer.

Beware of Foreign Currency Trading Frauds

Beware of Foreign Currency Trading Frauds
The advertisements seem too good to pass up. They tout high returns coupled with low risks from investments in foreign currency (forex) contracts. Sometimes they even offer lucrative employment opportunities in forex trading.

Do these deals sound too good to be true? Unfortunately, they are, and investors need to be on guard against these scams. They may look like a new sophisticated form of investment opportunity, but in reality they are the same old trap--financial fraud in fancy garb.

Forex trading can be legitimate for governments and large institutional investors concerned about fluctuations in international exchange rates, and it can even be appropriate for some individual investors. But the average investor should be wary when it comes to forex offers.

The Commodity Futures Trading Commission (CFTC) and the North American Securities Administrators Association (NASAA) warn that off-exchange forex trading by retail investors is at best extremely risky, and at worst, outright fraud.

What are forex contracts?

Forex contracts involve the right to buy or sell a certain amount of a foreign currency at a fixed price in U.S. dollars. Profits or losses accrue as the exchange rate of that currency fluctuates on the open market. It is extremely rare that individual traders actually see the foreign currency. Instead, they typically close out their buy or sell commitments and calculate net gains or losses based on price changes in that currency relative to the dollar over time.

Forex markets are among the most active markets in the world in terms of dollar volume. The participants include large banks, multinational corporations, governments, and speculators. Individual traders comprise a very small part of this market. Because of the volatility in the price of foreign currency, losses can accrue very rapidly, wiping out an investor's down payment in short order.

How do the scams work?

Forex scams attract customers with sophisticated-sounding offers placed in newspaper advertisements, radio promotions, or on Internet sites. Promoters often lure investors with the concept of leverage: the right to "control" a large amount of foreign currency with an initial payment representing only a fraction of the total cost. Coupled with predictions about supposedly inevitable increases in currency prices, these contracts are said to offer huge returns over a short time, with little or no downside risk.

In a typical case, investors may be assured of reaping tens of thousands of dollars in just a few weeks or months, with an initial investment of only $5,000. Often, the investor's money is never actually placed in the market through a legitimate dealer, but simply diverted--stolen-- for the personal benefit of the con artists.

What are regulators doing?

The CFTC is the Federal agency with the primary responsibility for overseeing the commodities markets, including foreign currency trading. Many state securities regulators also have the right under their state laws to take action against illegal commodities investments. Sometimes the CFTC and the states work together on cases. Examples include:

In 2005, the CFTC and the Commissioner of Corporations of the State of California sued National Investment Consultants, Inc., and others in U.S. District Court for the Northern District of California for engaging in a forex scam involving approximately $2 million in customer funds. In 2006, the Court ordered restitution and fines amounting to $3.4 million. Also in 2005, the CFTC and the Texas State Securities Board (TSSB) engaged in a cooperative enforcement effort against Premium Income Corp. (PIC) and its principals. The CFTC and Securities and Exchange Commission (SEC) filed an action in U.S. District Court for the Northern District of Texas and the TSSB filed an administrative action charging PIC and its principals with engaging in an illegal $11 million forex operation. To date, the federal court has found three corporate defendants liable to pay restitution of $12 million and each was assessed a fine of $37 million. The State of Texas also has obtained cease and desist orders along with various criminal indictments and convictions. PIC's president is currently incarcerated on charges stemming from his forex scam. In 2004, Gregory Blake Baldwin of Utah pleaded guilty to fraud after his firm, Sunstar Funding, accepted $228,500 from 33 investors for placement into the foreign currency market. The investors' money was not placed in the foreign currency market but was used to pay some past investors and for personal expenses of Baldwin. In 2003, the CFTC and the State of Oregon Department of Consumer and Business Services sued Orion International, Inc., and its principals in U.S. District Court for the District of Oregon for fraudulently soliciting over $40 million to participate in a purported forex fund. Orion, and its president Russell Cline, misappropriated virtually all the customer funds. In 2006, the Court entered fines and restitution orders against the defendants totaling almost $150 million. Cline is currently incarcerated on charges stemming from his forex scam. In 2002, the CFTC, the SEC and the State of Utah filed an action against a company known as "4NExchange" for violations of state and Federal laws as the firm's principals illegally offered foreign currency contracts through an alleged Ponzi scheme that cost investors nearly $15 million. What are the warning signs of fraud?

If you are solicited by a company that claims to trade foreign currencies and asks you to invest funds, you should be very careful. Watch out for the following warning signs:

1. Be wary of promises that sound too good to be true: "You can make six figure profits within a year; forex investments are very low risk; You can double your money." Get-rich-quick schemes, including those involving foreign currency trading, tend to be frauds.

2. Be skeptical about unsolicited phone calls offering investments, especially those from out-of-state salespersons or companies that are unfamiliar.

3. Be especially cautious if you have acquired a large sum of cash recently and are looking for an investment vehicle. In particular, retirees with access to their retirement funds may be attractive targets for fraudulent operators. Getting your money back once it is gone can be difficult or impossible.

4. Be wary of high-pressure efforts to convince you to send or transfer cash immediately to the firm, via overnight delivery or the Internet.

5. Be smart about the money you do put at risk. Even when purchased through the most reputable dealer, forex investments are extremely risky. If you are tempted to invest, make sure you understand these products and above all, only invest what you can afford to lose. Don't invest your rent money in a forex contract.

Investigate before you invest

Investors should make sure that anyone offering a forex investment is properly licensed and has a reputable business history. The public can obtain information about any firm or individual registered with the CFTC, including any actions taken against a registrant, through the National Futures Association (NFA) Background Affiliation Status Information Center (BASIC), available on the NFA website at: http://www.nfa.futures.org/basicnet. You can also find out if someone is registered by calling the National Futures Association at 1-800-676-4632.

The CFTC's Division of Enforcement has established a toll-free telephone number to assist members of the public in reporting possible violations of the commodities laws. Call 866-FON-CFTC (866-366-2382). In addition, if you think that you have been a victim of a forex scam, you can report suspicious activities or information to the CFTC in the online form on the this website, or by mail addressed to the Office of Cooperative Enforcement, CFTC, 1155 21st Street, NW, Washington, D.C. 20581.

Views And Advice From a Currency Trader

Views And Advice From a Currency Trader.
I'd like to offer another view on the proposed SEC limit increase. As a currency trader you do not begin to REALLY progress until you learn how to recognize two critical things:

Balance and Relativity. In the unwashed masses' "rush" to get money in the markets via investments and trading, use of just about everything ELSE under the sun is the norm.

That's why 99% of new currency traders get their account vaporized when trading the ForEx.

Many, thinking to themselves that the use of numerous and more complex "indicators" is all that is required to come out a winner in more trades than they lose, tend to skip over the more critical principles.

Everything is relative. Well, the SEC's proposal, if passed into law, will also invoke relativity. There WILL be a great financial balance. For good. And, for not-so-good. Some will benefit. Some will not. But, that's market law. That the SEC did not write.

Until you learn to see that everything IS relative, you truly cannot begin to hit the higher(est) levels of achievement. Be they in currency trading, or in investing, even investing in hedge funds. Since balance is truly one of the greatest underlying principles of successful currency trading, I, for one, can be completely uneffected by whichever way the SEC decides to go BECAUSE I've learned to temper my currency trading (that is, what is effected in my life in the investable/tradable markets) by understanding and applying the market reality of balance.

To all who posted as I did, with a knee-jerk reaction at first, take it lightly if the SEC raises the limit instead of completely doing away with it.

Because everything is relative. And in perfect balance. In the big picture. In the great scheme of things. As a progressing student of the ForEx market, as one who has advanced, I can tell you, you can get much greater gains by learning to trade well in currencies (that, by the way, do not charge a commission fee, nor RT fee, only the spread is taken by the broker ONCE when a trade is placed - closing a trade is 100% free) yourself, and you can easily crush the average returns of hedge funds by learning how to apply the simplest principles.

In either investing via "sophistication" in hedge funds, or by learning sound currency exchanging techniques (that, in my book, certainly counts as "sophistication") the richer are in perfect balance with those not as rich.

Because both rich and poor have access to the greatest market of them all: The global currency market.

And, if you think hedge fund managers themselves are sophisticated enough to always get good returns, you need not look further than running a Google search on "Goldman Sachs Global Alpha (hedge) Fund" to see, according to some sources, that they earned about $700 million in management and performance fees from its $10 billion Global Alpha Fund in the year ended Nov. 24.

But, how much did they LOSE of "sophisticated" investors' money? Depending on the source, as much as 12% loss.

They, articles have said, were trying to trade currencies. The same currencies available to everyone for as little as $1.00 per trade. If you're not rich enough to hit the minimum financial entry levels into hedge funds, don't feel bad.

You can always trade money in the same market Goldman Sachs lost in, in 2006. The foreign exchange.

Maybe someday you'll even learn... how to wipe out the national debt

Forex Avenger Case Study: Profitable Trading System Improved To 789%

I recently took the very popular Forex Avenger trading system and put it though its paces using a Forex trading system software. I first wanted to prove to myself and my readers that Forex Avenger was a profitable trading system. Then I wanted to see if I could split test the system to make improvements for even more profit. And the results were nothing short of spectacular.
The Advantage Of Forex Testing Software

The problem with testing mechanical Forex trading systems, where you have to trade manually, is the time involved. Doing the testing on a DEMO account in real time takes forever... especially if you want to test for an entire year like I did! So, using a testing software was a great option.

Using the software, I was able to use real, historical Forex data to simulate trading for the entire year of 2008. And here is the great part... then I could test a variation of the trading system for the SAME time period to see which way was better. You just can't do this with demo trading.

83% Profitable Out Of The Box

The first Forex Avenger test I did was "out of the box". I traded the system exactly as David Curran taught it for the entire year of 2008. My account grew from $10,000 to over $18,300... for about 83% profit. So, the first test was successful... Forex Avenger made money during the test.

279% Profit In Second Test

In the second test of Forex Avenger I made some slight changes. This is the advantage of trading a system fast using the software... it exposes patterns or variations worth testing. And while the success rate when down from 60% to 49%, the profit went up from 83% to 279%. In dollars, the test account grew from $10,000 to over $27,900. Pretty substantial improvement I would say.

789% Profit In Third Test

I still felt I was leaving profit on the table, so I made some further changes. It actually took me various tests and tweaking of the system to get this to work. But the effort paid off, because the profit rose to an astounding 789%. In dollars, my test account went from $10,000 to over $78,900.

Basically, by split testing slight variations of the original Forex Avenger trading system, I was able to make about $60,000 MORE over the same year of trading (2008). This not only shows that Forex Avenger is profitable as is, a credit to David Curran, but that profits can actually be improved.

Let's keep some perspective here. Coming up with a profitable Forex trading system like David Curran teaches with an in-depth trading manual and 22 videos is no small feat. As a matter of fact, it took him YEARS of testing, tweaking and risking his own money to come up with this system. And he is nice enough to share it with us.

But now, with Forex system testing software that let's use use real data to manually test systems over and over again using the same time period, the possibilities for improvements exist. In this case, my Forex Avenger case study was a success. I not only tested the original version and found it profitable, but was able to make adjustments that raise the profits from 83% to 279% and then a staggering 789%. I'm looking forward to putting what I learned from the case study into practice while trading this system.

What you need to know about Forex trading

There's a truck-load of information on Forex trading available. So much so that it's bound to confuse newbies. Some people claim it's really easy to make profits from Forex trading…notably gurus who are selling something. Some experts would claim it's pretty darned hard. Well, it is neither…or both. Like most things in life, there's not one scale you can apply for all circumstances and people. It's not rocket science; any one with average intelligence can get into and acquit themselves properly. However, like any business, Forex trading requires a significant amount of preparation, planning and commitment.
There are Forex robots that can automatically trade for you or automated trading signals, which you simply have to pass on to your brokers. Even though the promoters of these services usually declare that you do not need to know anything about Forex trading to use them profitably, it is obviously makes sense to learn as much as you can before you plunge in. It is your money that is at stake here, however you have gotten it. Therefore, you need to do your research, due diligence, if you will. That said, you have to be careful to avoid analysis paralysis.

Obviously, the first thing you need is to understand the fundamentals of Forex trading. It is common knowledge that Forex trading is a based on playing currency exchange rates, for instance buying a currency at a lower rate and selling when the rate increases. While this is the core of it, there are many things to learn about how exactly the whole system works in order to make real profit.

Forex Terminology

You should make sure you check out definitions or explanations of common Forex terminology. You will encounter a number of terms such as trends, breakout, stop loss, pips, spreads and so on while researching on Forex strategies. Therefore, you need to learn what each term means. There are a lot of websites on the Internet that provide explanations of Forex terms for free.

Forex Quotes

Another very important thing you need to know is how to read Forex quotes. Remember, the Forex quotes are listed in pairs, such as USD/JPY 108.32. In a currency pair, the first currency is the base currency. The number indicates the rate of the second currency (counter currency) against 1 unit of the base currency. In case of USD/JPY 108.32, 1 USD is equivalent to 108.32 JPY. This simply means that you can buy 108.32 JPY with 1 USD.

There is another form of Forex quoting that consists of a bid and an ask price. An example of this would be USD/CAD 1.2000/1.2009. Here 1.2000 CAD is the Bid (Sell) price and 1.2009 CAD is the Ask (Buy) price. The quote means that you can buy 1 USD with 1.2009 CAD and if you sell 1 USD you will get 1.2000 CAD.

How Trading is Conducted

Once you are confident in your understanding of the basics of what Forex trading is, start researching on how trades are conducted. What happens when you buy a currency pair? What charges will you have to pay, if any? What other factors influence or are influenced by the trade? This will give you a theoretical knowledge of what you are going to try out practically once you set up your account and start trading in reality.

Forex Strategies

In order to be profitable at Forex Trading, you should have a Forex strategy that you follow. It obviously wouldn't work to stare at the Forex charts, try to determine the trends of the current price then buy a currency that you think is going up in price and hope that it does not reverse. Forex trading is based on speculation, but you have to make sure you speculate as correctly as possible. In order to do this, you should follow a tried and tested Forex strategy. There are long-term as well as short-term strategies. You can choose one based on your comfort level.

Covered Calls during volatile times

calls can be a great way to profit when the stock market is trending sideways. If you don't know which way stocks are going to go it isn't a bad idea to sell some calls on strong stocks. Some reasons Selling Covered Calls can be a good idea are.
1. Monthly Income

Selling calls is a nice way to make a monthly income from the stock market. If you are a dividend investor a 2-5% cash flow after a year might seem good enough. Forget about dividends covered calls can normally produce a profit of 2-5% a month if you do it right.

2. Non Trending

There is no need to look for a trending stock and attempt to ride it all the way up. Selling covered calls allows you to profit from the stock market even if it is not making new highs. The only thing you need is for the stock not to move down too much.

3. There are good long term investments

There are always good investments in the stock market that you can afford to buy and hold for a few years. Why not buy a strong ETF and sell few calls on the stock while it is going through a sideways trend.

4. If the markets recover you will be in a good position

If you buy some strong stocks to sell calls on and then the market starts making new highs, well you are going to be in a spot where you own a stock and the markets are going up. You can always stop selling calls on it and just enjoy the benefits of a rising market.

Of course if the markets start heading down you can stand to lose a lot so it might be wise to have some point where you are going to limit your losses if you are wrong.

Don't Confuse Stop Limits With Stops

One of the biggest mistakes I have made was confusing a stop limit order with a stop order. This could potentially be very harmful to your account.
A stop order is simple; when you use it you tell your broker "sell my stock once it gets to a certain point". This way you can effectively limit your potential loss on a stock which would make it easier for you to effectively manage your account.

A stop limit order on the other hand tells your broker to sell your stock if it reaches a certain point, but only if you can get a good price. So for instance if you use a stop limit order both the stop and the limit has to be triggered in order for you to exit the position.

This can work out ok most of the time, but when it works against your favor it can really be harmful.

I had a bad experience with a stop limit order before which is why I never use them to exit out of a trade. I had bought the stock at $93 expecting it to bounce off of support and head up.

I was new to the markets so I figured a stop and a stop limit where the same thing. I placed the stop limit at $90. If it fell to $90 I wanted to get out of the trade and cut my losses short.

That was the plan anyways, what happened was some bad news came out. The stock gapped down and opened at $88, which triggered my stop. If I had a simple stop order on the stock I would have exited here at $88 and would have cut my losses relatively short.

However I had a limit order on it, so I would not get filled unless I could get filled for $90 or higher. Of course the stock kept heading lower and I when I saw my account I was forced to exit the trade at $84, or triple what I wanted my max loss to be.

How to invest in the stock market

I have tried a few different criteria and I like to start my picking process with the below process. I start a stock screener where I can compare the current stock price to cash. If this is > 2, meaning that at least 50% of the share price is comprised of the amount of cash in the bank. I am even more apt to invest with the company if they have a long standing history of dividends, and even greater chance if they have a history of increasing that dividend. This shows that the company is dedicated to their shareholders and will act accordingly.
Also one should look at their price to earnings, (P/E), because this represents the premium that you are paying to gain access to their earning power. For example, Johnson and Johnson at the time of writing this has a P/E of 11.62, which means that for ever $11.62 that you invest with them they returned $1 in earnings. This doesn't take into account their dividend history just earnings. One must also realize that analysing the P/E of companies in different sectors is unadvisable.

Thirdly, Return on Equity, is a ratio that looks at how well the company uses its capital to make money. If two companies have near equal P/E and they are in the same sector, then this would be a good tiebreaker. Ideally this shows that company A, with a higher ROE is a more efficently managed company than company B. I like this because when you take the market as an aggregate you are abstracting to a high degree and whether your company makes gears, cogs or harvest heart valves from pigs, we are looking at getting paid regardless of what the company produces. And the ROE measures exactly that, how well the company uses its capital to make us money.

Financial Navigating in the Current Economy: Ten Things to Consider Before You Make Investing Decisions

Financial Navigating in the Current Economy: Ten Things to Consider Before You Make Investing Decisions
Given recent market events, you may be wondering whether you should make changes to your investment portfolio. The SEC's Office of Investor Education and Advocacy is concerned that some investors, including bargain hunters and mattress stuffers, are making rapid investment decisions without considering their long-term financial goals. While we can't tell you how to manage your investment portfolio during a volatile market, we are issuing this Investor Alert to give you the tools to make an informed decision. Before you make any decision, consider these areas of importance:

1. Draw a personal financial roadmap.

Before you make any investing decision, sit down and take an honest look at your entire financial situation -- especially if you've never made a financial plan before.

The first step to successful investing is figuring out your goals and risk tolerance - either on your own or with the help of a financial professional. There is no guarantee that you'll make money from your investments. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.

2. Evaluate your comfort zone in taking on risk.

All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds - it's important that you understand before you invest that you could lose some or all of your money. Unlike deposits at FDIC-insured banks and NCUA-insured credit unions, the money you invest in securities typically is not federally insured. You could lose your principal, which is the amount you've invested. That's true even if you purchase your investments through a bank.

Temporary Guarantee Program for Money Market Funds -- Recently, one money market fund "broke a buck" (its net asset value fell below $1 a share). This event caused investors to become concerned that their money market investments might lose value. To reassure investors in money market funds, the Treasury Department, working closely with the SEC, established a temporary guaranty program for U.S. money market funds.

The reward for taking on risk is the potential for a greater investment return. If you have a financial goal with a long time horizon, you are likely to make more money by carefully investing in asset categories with greater risk, like stocks or bonds, rather than restricting your investments to assets with less risk, like cash equivalents. On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. The principal concern for individuals investing in cash equivalents is inflation risk, which is the risk that inflation will outpace and erode returns over time.

Federally Insured Deposits at Banks and Credit Unions -- If you're not sure if your deposits are backed by the full faith and credit of the U.S. government, it's easy to find out. For bank accounts, go to www.myfdicinsurance.gov. For credit union accounts, go to http://webapps.ncua.gov/Ins/.

3. Consider an appropriate mix of investments.

By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses. Historically, the returns of the three major asset categories - stocks, bonds, and cash - have not moved up and down at the same time. Market conditions that cause one asset category to do well often cause another asset category to have average or poor returns. By investing in more than one asset category, you'll reduce the risk that you'll lose money and your portfolio's overall investment returns will have a smoother ride. If one asset category's investment return falls, you'll be in a position to counteract your losses in that asset category with better investment returns in another asset category.

In addition, asset allocation is important because it has major impact on whether you will meet your financial goal. If you don't include enough risk in your portfolio, your investments may not earn a large enough return to meet your goal. For example, if you are saving for a long-term goal, such as retirement or college, most financial experts agree that you will likely need to include at least some stock or stock mutual funds in your portfolio.

Lifecycle Funds -- To accommodate investors who prefer to use one investment to save for a particular investment goal, such as retirement, some mutual fund companies have begun offering a product known as a "lifecycle fund." A lifecycle fund is a diversified mutual fund that automatically shifts towards a more conservative mix of investments as it approaches a particular year in the future, known as its "target date." A lifecycle fund investor picks a fund with the right target date based on his or her particular investment goal. The managers of the fund then make all decisions about asset allocation, diversification, and rebalancing. It's easy to identify a lifecycle fund because its name will likely refer to its target date. For example, you might see lifecycle funds with names like "Portfolio 2015," "Retirement Fund 2030," or "Target 2045."

4. Be careful if investing heavily in shares of employer's stock or any individual stock.

One of the most important ways to lessen the risks of investing is to diversify your investments. It's common sense: don't put all your eggs in one basket. By picking the right group of investments within an asset category, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain. You'll be exposed to significant investment risk if you invest heavily in shares of your employer's stock or any individual stock. If that stock does poorly or the company goes bankrupt, you'll probably lose a lot of money (and perhaps your job).

5. Create and maintain an emergency fund.

Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment. Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.

6. Pay off high interest credit card debt.

There is no investment strategy anywhere that pays off as well as, or with less risk than, merely paying off all high interest debt you may have. If you owe money on high interest credit cards, the wisest thing you can do under any market conditions is to pay off the balance in full as quickly as possible.

7. Consider dollar cost averaging.

Through the investment strategy known as "dollar cost averaging," you can protect yourself from the risk of investing all of your money at the wrong time by following a consistent pattern of adding new money to your investment over a long period of time. By making regular investments with the same amount of money each time, you will buy more of an investment when its price is low and less of the investment when its price is high. Individuals that typically make a lump-sum contribution to an individual retirement account either at the end of the calendar year or in early April may want to consider "dollar cost averaging" as an investment strategy, especially in a volatile market.

8. Take advantage of "free money" from employer.

In many employer-sponsored retirement plans, the employer will match some or all of your contributions. If your employer offers a retirement plan and you do not contribute enough to get your employer's maximum match, you are passing up "free money" for your retirement savings.

Keep Your Money Working -- In most cases, a workplace plan is the most effective way to save for retirement. Consider your options carefully before borrowing from your retirement plan. In particular, avoid using a 401(k) debit card, except as a last resort. Money you borrow now will reduce the savings available to grow over the years and ultimately what you have when you retire. Also, if you don't repay the loan, you may pay federal income taxes and penalties.

9. Consider rebalancing portfolio occasionally.

Rebalancing is bringing your portfolio back to your original asset allocation mix. By rebalancing, you'll ensure that your portfolio does not overemphasize one or more asset categories, and you'll return your portfolio to a comfortable level of risk.

Stick with Your Plan: Buy Low, Sell High -- Shifting money away from an asset category when it is doing well in favor an asset category that is doing poorly may not be easy, but it can be a wise move. By cutting back on the current "winners" and adding more of the current so-called "losers," rebalancing forces you to buy low and sell high.

You can rebalance your portfolio based either on the calendar or on your investments. Many financial experts recommend that investors rebalance their portfolios on a regular time interval, such as every six or twelve months. The advantage of this method is that the calendar is a reminder of when you should consider rebalancing. Others recommend rebalancing only when the relative weight of an asset class increases or decreases more than a certain percentage that you've identified in advance. The advantage of this method is that your investments tell you when to rebalance. In either case, rebalancing tends to work best when done on a relatively infrequent basis.

10. Avoid circumstances that can lead to fraud.

Scam artists read the headlines, too. Often, they'll use a highly publicized news item to lure potential investors and make their "opportunity" sound more legitimate. The SEC recommends that you ask questions and check out the answers with an unbiased source before you invest. Always take your time and talk to trusted friends and family members before investing.

7 Step Process of Making Money on the Internet

Ever tried making money on the internet? If you do then you could be doing either or all of the following 7 steps you need to be successful making money in the internet. If not, then you can still do so by carrying the following 7 steps.
Step One: You need to have a good product. If you don't have a good one of your own, then go ahead and make a search on the internet for a good one.

Step two: You need to have a website in order to promote your product.

Step three: You need to have a good webhost to host your website.

Step four: You need to have a good auto responder.

Step five: You need to prepare at least 7, the more the better email letters promoting your product. These letters should be plugged into your auto responder.

Step six: You need to prepare a squeeze page in order to collect names and emails for your future clients.

Step seven: You need to promote your squeeze page all over the internet.

So those are your seven steps in making money on the internet. As for me, those are tall orders.

But there is a quick way of making money on the internet without going thorough all the hassles above and yet it covers almost all the steps mentioned.

You could be making money you want on the internet by joining a program that I've joined. The name of the program is MyInstant Biz. You could be earning money on the internet while at the same time learning making money by getting involved with the program.