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.

1930s Volatility is Here

If you are a long premium options trader, volatility is a necessary element to be successful. If volatility is lacking, time decay (Theta) will make this financial instrument a challenging (or even more challenging) one. These days, volatility is not lacking. In fact, volatility is thriving. For a long premium options trader, there is nothing like having market tailwinds to benefit your options strategy.
With a market that has gained 20% since March 9th bottoms and is down over 3% intra-day today (as of time of publish), 2009 has obviously been an extremely volatile year thus far. This year seems to be even more volatile than 2008, which by our calculations, was the highest level of consistent daily volatility in decades. In 2009, there have been a multitude of sessions that have seen stocks rally or fall by a significant percentage. It seems almost commonplace that the Dow Jones Industrial Average is up or down at least one percent.

Volatility can be defined in many ways (i.e. implied volatility, statistical volatility, etc.) -- in this analysis we look at volatility by the number of occurrences the Dow Jones Industrial Average rallied or declined by one percent or more on a closing basis in a trading day. More specifically, we looked at the absolute return for the Dow Jones Industrial Average for each day going back to 1928. We then calculated the number of occurrences (and the percentage) that the Dow Jones Industrial Average finished up or down more than one percent in a given year.

In 2008, there were 134 occurrences out of 253 trading dates (52.96% of days) that saw the Dow Jones Industrial Average finish up or down by one percent. This compares to the 2004 to 2007 period, which had a four-year average of 15.61%. This translates to only about 40 days per year in that four-year stretch that saw the Dow Jones Industrial Average fall or rise by one percent or more.

2009 has picked up where 2008 has left off. Our analysis was through March 9th 2009 -- as of that date we were on pace for an astonishing rate of 64% of the time the DJIA moves 1% of more on a daily closing basis. If the volatility continues through the last nine months of the year, this would be the most consistently volatile market since 1932, when the Dow Jones Industrial Average was up or down by one percent 74% of the time. Since March 9th, there has been no letup in this trend as roughly 10 of the 14 days (or 71%) are moving at this rate (as of the March 27th close). So the % pace for 2009 is actually a bit higher than the 64% utilized in the above chart.

For long premium options players, this kind volatility can be a blessing. Buying calls, puts, straddles, and strangles can be advantageous in this environment. For the "buy and hold" stock and mutual fund investor, this volatility can only be digested with a six-pack of Dramamine and Pepto Bismol.

Another takeaway for long premium option players is that the level of volatility that we have seen will likely not last forever. Periods of high volatility will generally result in a lower one, as these periods tend to cycle in and out. This trend will likely go into a dormant stage with declining volatility and less price fluctuations (although the explosion in growth of ETFs, Options, Ultra-ETFs, etc, may lessen the decline in volatility somewhat).

Thus, having an arsenal of options strategies beyond long option premium (which is always useful) will be even more important when the volatility wanes. Learning how to trade vertical credit spreads, iron condors, shorting straddles, shorting strangles, writing puts and covered calls will be important to add to one's repertoire.

Retiring For Fun And Profit

If you're a Baby Boomer or older, your retirement will likely be different from the way your parents retired. In the old days, late last century, most people expected to be in a job--and in a career--for a very long time. And then, after working hard and loyally for the same company for that entire time period, the company would pay a "pension." The most unique thing about a pension is that it rhymes with tension, which is what most retirees felt--or are now feeling--as their pensions either trickle away, or just get flushed away altogether.
There were many reasons for this but one of the most common was that the company from which the retiree retired had difficulties being responsible with all of that pension money. Sometimes the money was used for "business purposes" which could be anything from lunches to Lear Jets. Sometimes it was because the company "went out of business," and as the senior execs landed safely elsewhere under the protection of their "golden parachutes," the people depending on their pension for retirement were left with nothing. There are probably retirees somewhere living their life happily ever after and who are receiving every single penny that they deserve from the pension that they worked so hard for--they're hard to find, though. And even those folks who still actually have a pension may not be all that comfortable anyway, because a pension that looked good back in the sixties today looks more like a child's allowance--a meager one at that.

Many people facing retirement today are looking at it in a whole new light, from an entirely different perspective. They have come to two realizations, in some cases startling ones. First, the reality is that it is expensive to live today, and trying to make a go of it on a fixed income--when costs keep going up--may not be all that realistic, and certainly not all that fun. Second, these people, for many reasons, seem to have a lot more energy as they approach retirement age than our forefathers did. This is perhaps due to a better diet, maybe because of a heightened focus on personal health and wellness. For whatever reason though, today's new retirees don't seem to be all that excited about the prospects of an endless amount of idle time.

The solution seems to be retiring comfortably into a second career. A growing number of career professionals, as they move into middle age, are hanging up their corporate suits and ties, and hanging out entirely new shingles. Many are finding opportunities on the internet to make money--sometimes lots of money--and which keep them industriously occupied and mentally focused. Most importantly though, they're having fun.

With Retirement Comes a Financial "Risk Zone"

Tough day in the markets? You have choices: buy or hold or sell. If you've spent any time on a Canadian highway on a Friday afternoon, then you've seen the "traffic timers". They're the drivers who pull in and out of lanes - depending on which lane appears to be moving more quickly - in an effort to gain a few minutes on their travel time. They may even change routes to avoid perceived delays, only to find themselves on dead end streets or unmarked gravel roads, heading east instead of west. Remind you of any investors you know?

Making investment decisions by trying to "time" the market can involve the same degree of chaos and confusion. Researchers have confirmed, over and over again, that investors who try to switch lanes - anticipating market ups and downs - rarely beat the "buy and hold" investor.

In the past several months, the volatility of the markets has tested the patience and the will of even the most steadfast investor. Investors feel they should be doing something: the value of their equity investment is sliding with the downturns in the markets. The truth is that the answer is the same today as it was last year, or even 10 years ago. You should build a long-term plan based on asset allocation, you should understand that equity markets can be volatile, and then you should buy and hold.

Market ups and downs are extremely unpredictable, and the cost of being out of the market - waiting for the right buy opportunity - is very, very high. Let's use the Toronto Stock Exchange (TSE) as an example. The TSE 300 posted an average annual compound return of 10.6 per cent in the fifteen years between 1985 and 2000. That's more than 3900 trading days. If an investor missed the top ten trading days in that period, the total return drops to 8%. Leave out the top twenty trading days, and the return plummets to 3.66 per cent.

With the best and worst days clustered together, a few missteps in your timing could mean doubling your market losses - not doubling your gains. It's human nature to react to bad news in the markets by selling your investments. But - as a good look at market history will confirm - the best time to buy is when it feels like the right time to sell.

Pensions- what can you expect at retirement

Enjoying the spoils of a comfortable retirement after years of working requires planning. Whether you end up living in the lap of luxury, or have to count the pennies, can be determined by the decisions you make for your pensions saving.
Many factors can have an impact on the pension you receive - the age at which you start saving, the amount you save, your investment choices and market fluctuations. Investment decisions are usually out of your hands as, once you choose your pension plan, the trustees or fund managers take over. However, the time you start setting money aside and the amount you save is entirely in your hands.

Market fluctuations are also notionally out of your hands - but you can plan for the effects by consolidating your gains over the five or ten years leading up to retirement. Moving them from riskier investments into more secure areas - such as cash or bonds - can help guard against downturns in equity markets which could lose you money at the last minute.

When you actually reach retirement, your pension savings will normally be used to buy a lifetime annuity which provides you with an income for the rest of your life. However, the rate at which you buy this annuity is also dependent on market conditions, which fluctuate with interest rates and inflation. Hence, the income you can buy this year with your fund may be higher or lower than that available last year - or next year. In a time of low rates, the effects might be mitigated to an extent by using deferred or phased retirement plans.

Finally, some employees will be in defined benefit or final salary schemes, which promise to provide a fixed amount in retirement, based on salary and years of service - irrespective of stock market movements, interest rates or inflation. Generally, this could be up to two-thirds of your final salary at the company, or an average over a specified period in the job. However, the stock market slump of 2000-03 reinforced the problem of increasing costs associated with these schemes and many have since been closed. For those still in them, the contributions are increasing.

Essentially, you will get back from your pension plan what you put in. It is therefore most important to start early and to save as much as you sensibly can.

4 Easy Ways to Reduce College Costs and Supercharge Your Retirement

If you're the parent of a high school student you may soon be faced with a very tough decision: Should you continue funding your retirement plan or apply these contributions to help pay for your child's college education?

Many parents require additional resources to assist with college expenses and turn to the financial aid system for help. While you may be uncertain about prioritizing retirement contributions versus college expenses, the financial aid system is quite clear about how they view your retirement contributions. They feel that these contributions can be used to help pay for your child's education and assume that you can play "catch up" with your retirement at a later point.

But before you throw your hands up in frustration and buy into their plan, let's take a look at four ways to shave your out-of-pocket college expenses and keep your retirement contributions flowing.

How Parents Can Cut Their Child's College Costs Now

1. Make Colleges Compete

In order to cut your child's college costs, make colleges compete against each other during the application process. For example, if your child is applying to a private college, send your information to the big public university in the same state too - even if your child has no intention of attending.

Why?

You can create competition amongst universities by applying to:

- Colleges within the same conferences
- Public and private schools in the same state
- Institutions within the same region

This can ultimately mean big savings for you.

2. Make Sure You Have a Plan to "Unzip" Your 529 Savings Plan

Most people think, and were probably told by their advisors, that distributions from their 529 savings plans are tax free if used to pay for Qualified Educational Expenses. But what appears to be a clear-cut case isn't always so when you're dealing with the tax-happy trifecta of the Federal government, state governments and the IRS. So be sure to determine your Adjusted Qualified Educational Expenses prior to pulling any money out of your 529 savings plan account to prevent the ever-present taxman's hand from reaching into your wallet.

3. Apply Early

Colleges are often under pressure to meet early deadlines for enrollment goals. To help meet these goals, some institutions will award merit scholarships to students who apply early in their senior year. This is one of the easiest ways to reduce the cost your family pays out of pocket for college. So get busy filling out college applications as soon as your child starts his or her senior year.

4. Understand the Hazards of Cash Gifts

Avoid having cash gifts made directly to the college or the student during the financial aid "base year" or any year your child applies for financial aid. Cash gifts given during this time period can result in your child losing scholarships and other forms of gift aid (which is financial aid that does not need to be repaid). In addition, it may raise the amount of money your family is expected to pay for college. Knowing how and when to receive such gifts is key to minimizing your college expenses.

Funding your retirement and paying for your child's college expenses impacts your wallet now and into the future. So it requires extensive planning and discussion. Saving as little as $350 dollars a month in college expenses and applying those funds to your retirement could mean as much as $136,000 available to you when you retire. And, that's with a minimal rate of return.

Different Types of Investments

Overall, there are three different kinds of investments. These include stocks, bonds, and cash. Sounds simple, right? Well, unfortunately, it gets very complicated from there. You see, each type of investment has numerous types of investments that fall under it.
There is quite a bit to learn about each different investment type. The stock market can be a big scary place for those who know little or nothing about investing. Fortunately, the amount of information that you need to learn has a direct relation to the type of investor that you are. There are also three types of investors: conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance: high risk and low risk.

Conservative investors often invest in cash. This means that they put their money in interest bearing savings accounts, money market accounts, mutual funds, US Treasury bills, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments.

Moderate investors often invest in cash and bonds, and may dabble in the stock market. Moderate investing may be low or moderate risks. Moderate investors often also invest in real estate, providing that it is low risk real estate.

Aggressive investors commonly do most of their investing in the stock market, which is higher risk. They also tend to invest in business ventures as well as higher risk real estate. For instance, if an aggressive investor puts his or her money into an older apartment building, then invests more money renovating the property, they are running a risk. They expect to be able to rent the apartments out for more money than the apartments are currently worth - or to sell the entire property for a profit on their initial investments. In some cases, this works out just fine, and in other cases, it doesn't. It's a risk.

Before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you. Understand the risks involved, and pay attention to past trends as well. History does indeed repeat itself, and investors know this first hand!

Invest In Your Retirement With A Internet Home Business

With the current recession many people are concerned about their retirement nest eggs. Regardless of the economic conditions having all of your eggs in one basket is never a wise decision.
Robert Allen wrote about multiple streams of income in a book a few years ago and the concept is more important today. Having a good pension from your employer and a monthly check from social security in all likelihood will not be enough.

In today's economy it is vital to have multiple streams of income for both now and in the future to provide you with extra retirement income. Contributing to an employer sponsored 401k and investing in stocks or real estate are vital to your path towards financial independence.

Another option that should be considered is starting a Internet home business. Affiliate marketing continues to grow on the Internet and people are making serious money from home. The key to success is to consider your business as another income stream opportunity.

Over the past year millions have lost there jobs and there livelihood as once financially strong companies have struggled. With multiple streams of income if one is lost or decreases you are not immediately impacted. With a Internet home business you slowly grow your business while your other income streams continue. If you are unfortunate enough to lose your job you already have another income stream to fall back on.

As your Internet home business grows you will be able to contribute additional funds to your primary retirement funds, 401k, Roth etc.. Using this method of multiple streams of income will eventually allow to enjoy extra income for retirement.

A wise Internet marketer once said they would rather make $100 a month from 200 different programs, then they would to make $20,000 a month from one. This could never been more true than it is today in a faltering worldwide economy.

Internet marketers have more opportunities to create multiple streams of income than anyone ever had in the past. You do this by representing different products in different niches. Or by joining different programs in the same niche, but make money selling products in getting checks from multiple companies.

While the example of making $20,000 a month is a bit far fetched. With a simple website and a blog or two $500 in a few months is real possibility. As the monthly income grows invest half in the business and the other half in your retirement funds. In a matter of a few years you have secured the goal of extra retirement income.

Remember it is your responsibility to protect your retirement nest egg. By creating multiple streams of income now you can ensure extra retirement income for the future.

A look at Elliott Wave Theory

The Elliott Wave Principle focuses on the behavior of humans and how that behavior impacts the stock market. Rather than acting in an unpredictable manner, Ralph Nelson Elliott (in the late 1920s) noticed that the market actually ran in repetitive cycles - which were a result of investors' reactionary behavior to outside influences. The principle was published in Elliott's books The Wave Principle and Nature's Laws - The Secret of the Universe. Elliott believed that humans are rhythmical beings, so all human decisions and actions could be predicted in rhythms. So basically, we have a stock principle based on human behavior.
While Elliott's Wave Principle is based partially on the Dow Theory, it expands on the belief thanks to individual wave aspects that Elliott uncovered. According to Elliott, an impulsive wave follows the main trend - and it is comprised of five other waves, a pattern that runs infinitely (these are wave degrees). Each impulse wave is followed by a corrective wave, which occurs in threes - creating a five/three pattern.

Robert Prechter et al are among the biggest proponents of Elliott Wave theory. The long-term record of such analysis is a bit spotty though -- they have called some big market moves very well, yet also been on the wrong side of some gigantic long-term moves.

There are waves inside the waves - you can notice that in each of the uptrends (1, 3, and 5). Waves 2 and 4 are the corrective waves, completing the cycle. Each of those impulsive waves is made of other five/three patterns, as this pattern occurs infinitely. An Elliott Wave is fractal - meaning that each wave can be broken into parts in an infinite manner.

For those who utilize these techniques, they break down waves into degrees of the pattern, each with its own name. These degrees are not classified by their form; not by their size or duration. Therefore, waves of the same degree may have different sizes or durations. The waves are named:

o Grand Supercycle (the longest) o Supercycle o Cycle o Primary o Intermediate o Minor o Minute o Minuette o Subminuette (the shortest)

The Grand Supercycle can take years to complete while the subminuette can take mere minutes to run its course. Bottom Line: Elliott Wave (and Wave Theory in general) is fairly hard to quantify and utilize as a practical trading technique. Certainly there is a logical basis to the fact that "waves" occur both in nature and the stock market -- and the psychological implications of various waves/trends from investor behavior are important, as well. Wave Theory technical analysis practitioners tend to be "true believers", but testing and measuring indicators for short-term active investing based on these theories/methods can be difficult.

Learn the Best Solution for Retiring Wealthy

Who would not want to retire wealthy and just enjoy their golden days with their family and loved ones. Unless you've been born rich enjoying all your family's wealth until you retire to live somewhere peacefully, you have to work hard to enjoy the comforts of a wealthy retirement. One usual mistake for people is that they think retirement is something that only 60 year old people can do and can no longer work as before. Little do they know that a person can have an early retirement, and the basis that one should put in for this is the financial resources that the retiree presently have. Even you can retire as early as your thirties so long as you have a well planned retirement financial system which will support you and make you wealthy. The most practical ways probably are: having a solid retirement plan, a good financial system and having a home based business. When saving up for your retirement, let yourself recognize the things you are supposed to be saving for. Highlight the aspects that you would need funding so that you can comfortably live during retirement. Have a healthy balance on essentials and those for personal pleasure. Having an effective financial plan will also help you work your retirement plan. Ask your company for this or your personal banking account to set up a retirement plan for you. And if you are considering a home based business once you retire, you must start thinking of how you want to run your business even before your retirement. Start preparing and learning and soon you'd be enjoying all the pleasure of having to retire wealthy at any stage in your life.

Your Financial Future Is In Your Hands

Your Financial Future Is In Your Hands
All of us have one big transition facing us not that far down the road. Of course life is all about transitions. We make a transition from childhood to adolescence. We transition from being a child of a house to adulthood and independence. And we make big transitions through marriage, parenthood and even becoming a grandparent. But of all of these, maybe the one we need to focus on in terms of preparation is the big transition to retirement.

Moving from the world of work and the active life that all that entails to retirement and your golden years is a huge adjustment for people. There are lifestyle changes, changes to your goals and priorities and even in how people view you. But the changes to your finances are perhaps the ones you will notice the most. When you move from getting a steady paycheck to living on your Social Security and retirement, that is a major shift in your expectations and how you plan your life.

The saddest thing we see when it comes to people in late middle age are those who are depending on Social Security to be the sole means of their support in retirement. While Social Security is a fine program, it has created a false illusion of "security" that somehow the government will take care of you in your old age. The "brass tacks" truth is that if you are depending on any outside agency to be your means of support in your retirement years, your assurance that you will be conformable in your retirement years is not assured.

Even if you are currently working at a job that has a retirement program or a 401K that you put some into, you may still be allowing yourself to "depend" on your job to be there for you when you get to retirement age. And the horror stories of the elderly who finally arrive at retirement age to discover that what they thought they could depend on was not reliable are tragic.

This is why starting now to prepare for you financial future will be the best way you can be absolutely sure you will have what you need as you enter that time when you should be able to relax and enjoy the fruit of your labors. This is a major attitude shift and if you can accomplish it and take charge of your financial future, you will approach retirement with much greater confidence.

The outcome of your decision to take charge of your retirement will be that you won't just let money get put away for you without any oversight on your part. You cannot always trust that the managers of your retirement account at work are handling the money correctly. By staying on top of how those funds are being invested and doing all you can to direct where those funds go, you are making sure that you get maximum return on your investment all along the way. And when its time for you to need those funds, you will be ready to use them because you are acutely aware of their value.

We cannot control Social Security and there is a chance it will be there for you when its time for you to retire. But instead of depending on Social Security, build a financial future that is secure whether it is there or not. Then when you retire and your retirement packages begin to kick and give you that lifestyle of leisure and financial safety that you want, if you do see Social Security add a few dollars to your monthly funds, so much the better.

By taking control over your financial future, you are putting the security of your funds and the planning that you will have what you need when those wonderful years come along. You are depending on the one person you know is in turn with what you will need and has always been abler to plan and provide for yourself and your family and that is you. It's a good feeling to put the management of your financial future in your own hands in preparation for retirement. But it's a wonderful feeling you worked hard to enjoy so you deserve it.

Preparing For One's Retirement

In a recent interview with Dr. Chuck Chakrapani, Gordon Pape, an investment writer, shared his thoughts on how to retire wealthy.
For many, to retire wealthy is nothing more than opening a time deposit account, depending on company and government pension plans, and simply enjoy these benefits by travelling around the world. But the reality is that (a) government plans are down; (b) pension plans do not dole out much cash upon your retirement; and (c) a time deposit does not earn much.

If you are a late bloomer, you need to take a higher degree of risk with your investments to achieve this level of retirement income and lifestyle. Take note, low rates will lower your chances of retiring wealthy. Therefore, if possible, allow your insurance plans, pension plans to mature after retirement and find new sources of income.

Pay for these monetary investments with the highest value you can.

(1) Use asset allocation -- use different types of investments; (2) Be careful in selecting your investments; (3) Don't self-speculate. Ask a professional, like a bank officer, financial planner or investment consultant on what are the best products to invest your money in; (4) Keep your costs within your limit; (5) Monitor your plan; (6) Borrowing against your investments isn't advisable.

You can retire wealthy if you have an insurance plan and by not relying on government and company pension plans.

Maximize government contributions, like Social Security and re-invest according to a solid plan. Additionally, be aware of tax obligations. Finally, become familiar with strategies to make your retirement funds last as long as you live.

Enjoy and Make Money at the Same Time

The primary strategy for making money consciously is social value, but on it's own, it's still not adequate enough to support this. The problem with social value is that your personal values won't perfectly align with the social consensus. If a janitor has more social value than an astronaut, then more janitors would make millions than astronauts.
Personal value is a lot different than social value. If social value means how you are perceived by other people, personal value is how you perceive yourself. If you value yourself as a musician, then chances are, a career in the music industry will be a money making venture for you. If you value yourself as an educator, then a career in education will be a money making venture for you. You have to know your personal value to make money making more viable. This is a common mistake by some people who jump into blogging on issues they think will make them a lot of money, only to discover they cannot do it any longer. This should be a no-no.

Alternatively, when you do something that satisfies your personal value but doesn't give you social value, and then you get the starving artist syndrome. That means it's not a good money making venture for you. This also means, you do what you want, but you also end up worrying about how to put food on the table. This is a no-no as well.

The answer? Choose both! A symbiotic balance between these will lead to better money making thoughts and ideas. But be warned that as time goes by, these values change. When that happens, then you have to find something that both your personal value, and at the same time give you social value.

Cash Earning Strategies

Making money is when a person converts value into money. Given that money is a social resource, then making money means converting more value to that social resource, meaning more money. On the contrary, when you spend money, you convert money to value.
There are numerous ways in to how to make money. One is to sell items like manufactured products, unwanted furniture, trash, used clothes. Whenever you sell something in exchange for money, then you are making money. Other options are; to buy goods from a supplier and sell them for a profit, as what convenience store owners do. Companies dig up resources all over the planet and sell them for a profit. Goods can be anything under the sun like objects, stocks, or bonds. To make these goods more attractive to buyers, some sellers attach a value or service to the goods being sold.

Getting a job is probably the most common way of making money. You get a job; you get paid for the hours and effort you put in for your employer. The greater your ability to personally deliver a high social value, the greater your earning potential becomes. This means that if a Corporate President earns 500000 pesos, a company driver makes only 8000pesos because the corporate president has more social value. This difference is not anyone's "fault" - the discrepancy is due to the social value of certain jobs. Note the difference between absolute value and social value. Top athletes may not perform useful work in an absolute sense, but their compensation is based on the social value of their service, which is

Profit From Dividends

It can be tempting to get into stocks that are offering high dividends. In fact for an investor the dividends can make up a huge amount of your total profit from that investment.
But there are a few things you are going to want to consider looking at if you are investing for the dividends.

1. Find out how much you are willing to take.

You should have a minimum amount you are willing to accept from your dividends. For example, if you only want to look for returns with a dividend of 7% annually or higher don't look at companies that are only offering a dividend of 3% annually. Remember the higher you ask for the harder it will be for you to find it.

2. Find stocks with dividends

After you find out how much you are willing to take you should go find stocks with a good dividend yield. Only invest in stocks or ETFs with a strong return.

3. Find stable companies

Obviously getting a 10% annual dividend isn't going to help you if the stock's price falls 80%. You are going to want to search out for strong companies with strong growth before you ever invest in it. When you buy for the dividends you buy for the long term so buy something that will be around for a while.

Stocks that are hot right now normally do not make a good return for an income investor because they can fall and fall hard.

4. Preferably growth

There is more ways to profit from a stock then its dividend. It would be nice to buy a strong undervalued company with a strong future and strong dividends. I believe it is very important to look for strength; dividends are not enough to make you profitable on a trade. The company has to be worth investing in even if it didn't pay dividends.

For more on finding good dividends visit http://www.stocks-simplified.com/Gordon_growth_Model.html

For other fundamental indicators visit http://www.stocks-simplified.com/fundamental_analysis.html

Picking the Right Wealth Consultant

Choosing any personal services consultant is extremely important. For example, if you choose the wrong lawyer you could end up in a lot of trouble, if you choose the wrong accountant you could also end up in a lot of trouble. The same thing goes for a wealth consultant. If you choose the wrong person for this job you could end up with at best underprepared for your later years, and a worst broke. This is especially important with what we have seen recently with the stock market collapse and scandals such as Bernie Madoff.
Asking around for referrals from friends and family is a great place to start your search for a wealth consultant. Hopefully you can get a list of well recommended advisors that either someone you know knows or is currently working with. Using this method to find some contacts will help you start with respected individuals that you know have experience.

Since a wealth consultant is such an important person to your financial well being you may want to consult other professionals you work with such as lawyers or anyone else who may be able to offer some sound advice. You should be able to get some good information out of others who work with you and be able to come to a conclusion as to what to look for in a wealth consultant and possibly some recommended names to look at.

Before you actually begin the interviewing process you need to first sit down and go over your own financial status with your family. Make sure you understand what all of your assets and liabilities are. Have a firm grasp of what kind of financial condition you are in, and some goals in mind as to what you plan to achieve financially. This allows you to have a starting place when beginning to work with a wealth consultant.

Now that you have gone over your financial standing and have a list of potential wealth consultants you should begin interviewing advisors. This is a time to really get to know and understand each candidate. Get their background information, how long they have been an advisor and any other important information you fell you need to know. There should be nothing that you question at the end and make sure you understand what he or she is telling you.

For accreditation, make sure you see what their track records are and what certifications they have. This is important to make sure you are getting a qualified individual who can handle your most import financial assets.

Once you feel comfortable with a few individuals whom you have interviewed it is going to be necessary to take your time deciding on the final person. Toss around thoughts and ideas with family members who have your best interest in mind. There is not need to rush on this decision.

Picking a wealth consultant is no different than choosing a doctor or any other professional to look after your well being. Money is a fragile thing and you need to keep every penny of it.

Be Wary of "Blue Chip" Penny Stocks

Beware the "Blue Chip" Penny Stocks
Let's play that good old-fashioned psychologist game, word association. We will throw out a company name, you make note of the first thing that pops into your head. Level 3 Communications (LVLT), American International Group (AIG), Sirius XM Radio (SIRI), Tenet Healthcare (THC), Fannie Mae (FNM), Infineon Technologies (IXF), Genworth Financial (GNW), E*Trade Financial (ETFC), and Coeur D'Alene Mines (CDE).

Done with that group? Okay, let's add some others to the mix: Unisys (UIS), Rite Aid (RAD), Ballard Power Systems (BLDP), Citigroup (C), and Blockbuster (BBI). Think about the first word that popped into your head for each of these - was it penny stock? Odds are it wasn't, because not many people think that companies with market caps as large as these could be penny stocks. However, all of these companies are trading under $1 currently.

Penny stocks have long been enticing to investors as potentially holding a major potential reward - and that is the problem here, the word potential. There is an old country adage that potential is another word for failure - but we'll take a look at that in a minute.

What is alluring to many novice investors is that you could own a share of Level 3 for less than a dollar - same with a share of Coeur D'Alene or Citigroup. However, does the potential loss outweigh the reward? There are 1000s of trading accounts in America filled with stocks bought under $2.00 that are now worthless.

Many different definitions exist for penny stocks, but the one constant is that the stock is low-priced and often holds a small market cap. Interesting, by following this definition, Citigroup would likely not be a penny stock, nor would any of the other names mentioned earlier. But yet they are trading below $1, so they inherently are very risky.

That said, you can own shares of former market powerhouses for less than a buck - is it worth a shot? Let's take a look at a chart of Citigroup. This is a daily chart spanning back to early July 2008. The stock's near-term high of $23.50 was hit in October 2008, but then the stock was hit - hard. With the stock wallowing under a dollar, is this penny stock a buy?

In general, the answer would be no. Stocks under $5.00 are generally high risk, under $2.00 are very high risk, and under $1.00 are usually going to 0. Many micro-cap companies with shares under $1.00 (the kind you get random "hot tips" about) are in fact actually scam/sham/shell companies, whose shares are being manipulated by a group. Many mutual funds cannot even buy shares of companies trading under $10.

In the unusual case of gigantic companies trading under $1.00 that we are seeing today, the answer of whether to buy these is also basically no. These companies are not in general going out of business -- but what will likely happen (what the market is pricing as an extremely high likelihood of happening) is that the equity (common stock) will go worthless, the company will re-organize, pay off debtors (to some degree), then either re-issue new shares eventually, go private, or merge. But the common stock holders get nothing in most all cases.

Could some of these former blue-chips trading under $1 come back? Certainly. But the odds are very strong that they will not. So beware the bottom-fishing on these types of names, unless you are prepared to deal with the stock going worthless.

Many traders fall for the allure of the penny stock, especially when they first begin investing. They figure they can buy 1000 or more shares of one stock vs 10 of another. However, if that penny stock goes to zero, you still lose all the $ you put in. So tread very lightly and do all the research you can before dipping a toe into the penny stock pool, even for the big names.

There is a reason penny stocks are penny stocks, perhaps it is poor management, poor business plans, poor execution of said plan, a violent economic turn, too much debt, or just an avalanche of short selling and negative sentiment. Whatever the reason, make sure to perform your due diligence when it comes to speculating in extremely low priced shares.

Creating a Life After Retirement

Retirement can introduce a great dilemma to elderly people. While they welcome the change with excitement, they could also have feelings of fear as they move to the next stage in their lives. The excitement comes from being able to stay home and relax, to have time for their family, and to do whatever it is that they have always thought of doing. The fear, on the other hand, comes from feelings of uncertainty about their future, because it's already knocking at their door.

If your parents have come to this point in their lives, do not think that they have it better than you. They may have lost the stress and anxiety associated with their jobs, but they now face another hurdle, getting old, weak, and being alone. This is probably the time that they would need you most, although sometimes they might deny it. Take time to visit your folks regularly, they would always welcome the company. Make sure that they are getting what they need and help if you must around the house. Some parents are afraid to look weak in the eyes of their children and would not ask for help directly. So just be there and tell them that you are just a phone call away of they ever need anything.

Be sensitive to your parents' well-being; it is not unusual for your mom and dad to need a stay in helper or a stay in nurse if they are ailing from a sickness. Additionally, make sure that they are handling their finances well, there are certain changes that they have to deal with once they retire and as they grow older.

Retirement and Business Opportunities

Once retirement sets in, you begin to itch for the feel of getting something done. Sometimes, you can lengthen the time that you do not look for a real job by keeping yourself busy tending to the house, the garden or vacationing somewhere exotic.


However, you can only accomplish so much until you start repeating everything you have already done. And, because your mind is still very active, you now begin to look for remnants of the old life you used to have - as part of the labor force. It's a good thing that there are so many home business opportunities for you that you can run while still being able to enjoy a more slow-paced lifestyle.



A home business is an advantage to have; not only can you keep your mind and body stimulated, you also get to earn a bit of extra cash. Although you do have your retirement bonus and other means of financial support, a little more money could not hurt anyone.



If you are looking for a business to start, look at the possibilities, first, in the field that you once worked in. Consultancy for instance, can be a lucrative post-retirement career for you. Consultants make a lot of money because the younger executives know that you would have the professional or technical knowledge that they have yet to possess.

You could also try something away from the industry you once were part of; like maybe turning a hobby into a money maker. If for example, you have been into cooking for the longest time and people really appreciate the dishes you prepare, you can go into catering for small events.

Home Business for Retirees

It is not unusual for retirees to feel the need to have something significant to do, even if they are retired and are expected to rest and maybe tend to their grandchildren for the rest of their lives. Although it is an enjoyable task, most retirees know that relaxing everyday can make their minds and bodies grow feebler if not stimulated enough. Additionally, they know that they cannot always have their families by their side everyday as the kids and the grandkids do have lives of their own.

If your parents have already retired and you would like for them to be more active, ask them what they have planned. They may be looking for a home business that they can get into, they just do not know whether it would be feasible or not. They may even be starting on an endeavor, you just do not know yet. For their sake and yours, it could also be a big help if you start becoming more involved in their lives. You can be a valuable partner, especially if your parents are not to keen on technologies that can help them run their businesses from home.


For example, your parents may want to get into retailing but they have chosen to retire in a very quiet neighborhood. However, they do have an internet connection which can help them set up an online home business. You can help them set up a website that can be very beneficial to how they can market their merchandise. You could also advice them on how to make their sites known to more number of people.