Your Stop Loss Is Critical When Day Trading Futures
Stop loss orders are great insurance policies that cost you nothing and can save you a fortune. They are used to sell or buy at a specified price and greatly reduce the risk you take when you buy or sell a futures contract. Stop loss orders will automatically execute when the price specified is hit, and can take the emotion out of a buy or sell decision by setting a cap on the amount you are willing to lose in a trade that has gone against you. Stop loss orders don't guarantee against losses but they drastically reduce risk by limiting potential losses.
With my system the only stop I use is what I call an emergency stop. My stop loss is automatically made when I make my initial trade at two points. It is only for emergencies, like news I wasn't expecting, or anything that will make the market gyrate drastically and I never enter a trade without it. However I never expect to use this stop loss to exit my trade. I simply will not let the market move against my trade entry more than a tick or two. If I find that I exited the trade too soon I just reenter the trade but if the trade continues to move against me I have saved the loss of one or two points per. contract. Usually I will only have to exit and reenter a trade one time if I have entered a trade to early. This means I only lose a small commission per contract instead of fifty dollars per point- per contract, when trading the e-mini, and taking what many consider
a normal loss.
Trading the futures markets is a challenging but profitable opportunity for educated and experienced traders. However it is not easy, without a great trading system, and even traders with years of experience still incur losses. Finding a good trading system and trading in small increments with an emergency stop loss in place will allow those relatively new to futures trading to be successful. Once you have learned the skills you need to trade with consistent profits it will not be a problem but until that time it is absolutely critical that you do not take unnecessary losses. If you are new to trading futures you should never trade until you have a mentor with a trading system that gives you consistent profits.
A great way to protect profits if you have not established an exit strategy is the trailing stop. The trailing stop loss is an order that is entered once you enter your trade. Your stop price moves at a specified distance behind the market price. Trailing stops are raised when a price rises, in a long trade, but will remain stationary when it falls. Trailing will only occur when the market price moves in favor of the trade to which the order is attached. The trailing stop order is similar to the stop loss order, but you use it to protect a profit, as opposed to protect against losses. Trailing stops are designed to lock in profit levels and they literally trail along your increasing profit and adjust your stop loss levels accordingly. Often traders will find tailing stops confusing because they change them while in an open position. This is not a wise practice, and should be avoided. It is an indication that you are not sure of your trade and if one is not sure of a trade it would be wise to exit immediately. Trailing stops are ideal because they allow for further profit potential to enter due to momentum, while limiting risk. Trailing stops are an important component to a trader's risk management unless they have an exit strategy in their system that might serve them better.
The market order is the simplest and quickest way to get your order filled to enter a trade or to use as a stop loss. A market order is a trade executed at the current market price and they are often used to exit trades to ensure that the order has the best possible chance of execution. A market order to exit is simply an order used to exit the trade immediately. Be aware that in a fast-changing market sometimes there is a disparity between the price when the market order is given and the actual price when it is filled.
Stop loss orders are used to exit trades, and are always used to limit the amount of loss, but some day traders use them as their only exit, while other traders use them as a backup exit only. If one uses them as their exit they will risk more than is necessary and might want to find a better system to trade. Stop loss orders allow you to define your risks before you open a position and in my opinion that risk should be minimal. Stop loss orders are one of the easiest ways to increase your chances of survival when trading commodities and futures and they are a powerful risk-management tool.
Original pictures take http://www.netotrade.com/learn/trading-basics/infographics/tips-for-traders/?A=677 site
Any investor wishes to make money in HYIP. Finding a successful high yield investment program is not enough to maximize your high yield investments. Certainly it is not easy to maximize your return on investment from best HYIP. The main point of this article is the strategies how to find fruitful and prosperous HYIP and to maximize your interests from this HYIP.
Before we start to discuss the strategies, we should find an answer to the question what is best HYIP. Well, it is difficult to answer because there are various possibilities. For some investors the fruitful HYIP is HYIP with huge daily interest, for other HYIPers the fruitful HYIP is HYIP with instantly withdraw. Undoubtedly, all these investors are right.
I guess than each investor wishes the fruitful HYIP which is online for a long time, not just several weeks or a few months. Moreover, each investor wishes that fruitful HYIPs must have fast support. Some HYIPs reply to your questions within 1-2 days and, of course, it is too long! I am a potential investor and I need to get an answer immediately!
Certainly, you can find many answers in FAQ section of a great number of HYIP web sites but sometimes you need information which you can not find there. If HYIP has phone support so it is very good, you can always phone them and get answers to your questions.
According to many experienced online investors, one of the most important things for the fruitful HYIP is fast withdraws. No one wants to wait 1 or 2 days till they receive payment. Certainly, everyone wants to get money within few hours. Fruitful HYIPs have to pay fast.
All investors agree with me that HYIP security is significant in online investments. Of course, the fruitful and prosperous HYIP must have the server protection to guarantee that users' accounts are safe and secure. Real fruitful HYIPs spend a lot of money for hosting and advertising as well as Ddos protection and security.
If HYIP has Prolexic Ddos protection it is a really good sign of seriousness of this high yield investment program because according to online security data, Prolexic Ddos protection costs more than $2000 per month.
Daily interests are the subject of many hot discussions on online HYIP forums because investors have very different opinions. Some people prefer 10-20% daily and other like 1-2% daily. Undoubtedly, the prosperous HYIP invests money into Forex trading and to other contemporary industries. So if HYIP earn money in Forex they can not offer 10-20%. It is impossible and each investor knows that.
Now the time is to discuss ways how to maximize your HYIP. After having found the fruitful and prosperous HYIP, the key to having successful investments is to build a safe, diversified portfolio and to extract your own money as quickly as possible. This will limit risk to your capital because if one programme closes, you will still have the others to fall back on.
Before investing in any programme, you should do a little research on it. I mean you should remember the main features of prosperous HYIP, namely daily interests of no more than 2-3%, excellent support, high qualified web site design of the HYIP company and best users' account protection.
Besides, HYIP scripts are easily to get a hold of and this makes it easier for fraudsters and scammers to operate. One of the things to look for is the programmer's reputation if they are paying consistently.
When the investor makes any online investment, his aim is to extract his money as quickly as possible. This is because the investor wants to be able to invest using the profit he made from the high yield investment programme to protect his own capital. For example, a typical investment could be $100 then, after 30 days, the investor would extract his own money and re-invest the profits so that he is making risk that he uses other people's money.
Another meaningful thing is that the investor will need to make use of referral systems to explode his profits from his investments. This is when the investor recommends someone to the programme and receives commission for it. This usually creates residual income for the investor which means him the opportunity to invest more of other people's money to make even more cash.
This article will help you find fruitful and prosperous HYIP and maximize your high yield investments. To grab my collection of golden rules successful HYIP investing visit
Original pictures take https://www.btcethereum.com/blog/2017/11/22/wealth-managers-being-bombarded-with-investor-requests-to-buy-bitcoin/ site
With Property Investment You can Retire Young And Live Off Your Profits.
In the fast-paced, exemplary world today, money matters more than most other things. This is the era of LPG (Liberalization, Privatization, and Globalization.) People are interested in exponential growth of money rather than slow growth. So, instead of saving all your income and using it for your post-retirement life, you can invest your income in a judicious manner to multiply it and earn much more from it. Investment properties are a hot option for that kind of a plan. Investment property is a property that is not occupied by the owner, usually purchased specifically to generate profit through rental income or capital gains. There are lots of convincing reasons for you to realize the benefits of investment properties.
Property investment is where you make a small investment into a property, typically one still being built, which is known as an off plan property and then go on to rent it out to get good dividends, and then once raised in price, you can sell it to gain a profit or to purchase more property.
No investment today offers the stability and simplicity along with the excellent returns offered by investing in property. The stock market can offer high returns, but it is a very volatile and unsteady place. This is especially true for non-professionals and there are so many external factors that can effect your financial investment. Not to mention the fact that the major stock markets have generally been underperforming and property investment stands head and shoulders above other forms of investments. There are a lot of options when it comes to investing in property, as you can choose the option of investing in Commercial property such as industrial/offices, hotels, apartments, retail shops and the list goes on. It can be a residential property; you can buy it and sell it at a higher rate for capital gain or rent it for regular dividends.
Property is now the wise investors weapon of choice. No other investment allows you to purchase with other people's money (Equity partners) and then pay this back with other people's money (the rental income from tenants). If you own a property, you can release equity against that property. Although there is no law that states that your property will increase in value year on year, it is accepted that a well maintained property in a reasonable area will appreciate in value.
Here are some points which are sure to make you flabbergasted about the profits of property investment.
50% of individuals mentioned on The Times Rich List made their money through investing in Property.
A property worth just 4000 30 years ago would be today worth around 225,000
Equities or Stocks can be volatile, as with the .com crash, whereas a property is historically stable.
It is well documented that on average the value of a property doubles every 7 years.
Property investments provide equity growth and they maintain good cash flow and not to mention, the capital appreciation is higher than any other type of investment. According to figures from FPD Savills Research, the total net return including capital appreciation on a prime central London property was 18.6% last year. In the UK, the total net return was 16.3% and in Spain it was even a stronger performance during last year.
The benefit of investing in a property is that you can remove the emotion from the purchase and look at the property as an investment vehicle. This opens a lot of options for you. You can utilize your re-assignable contract option and sell at a substantial profit prior to completion, carrying no redemption penalty or you can take the "buy to let" situation and generate a good reliable rental income, including substantial capital appreciation.
Original pictures take http://infographicjournal.com/how-to-buy-investment-property/ site
The Royal Swedish Academy of Sciences has decided to award the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel 1997, to Professor Robert C. Merton, Harvard University, and to Professor Myron S. Scholes, Stanford University, jointly. The prize was awarded for a new method to determine the value of derivatives.
This sounds like a trifle achievement - but it is not. It touches upon the very heart of the science of Economics: the concept of Risk. Risk reflects the effect on the value of an asset where there is an option to change it (the value) in the future.
We could be talking about a physical assets or a non-tangible asset, such as a contract between two parties. An asset is also an investment, an insurance policy, a bank guarantee and any other form of contingent liability, corporate or not.
Scholes himself said that his formula is good for any situation involving a contract whose value depends on the (uncertain) future value of an asset.
The discipline of risk management is relatively old. As early as 200 years ago households and firms were able to defray their risk and to maintain a level of risk acceptable to them by redistributing risks towards other agents who were willing and able to assume them. In the financial markets this is done by using derivative securities options, futures and others. Futures and forwards hedge against future (potential - all risks are potentials) risks. These are contracts which promise a future delivery of a certain item at a certain price no later than a given date. Firms can thus sell their future production (agricultural produce, minerals) in advance at the futures market specific to their goods. The risk of future price movements is re-allocated, this way, from the producer or manufacturer to the buyer of the contract. Options are designed to hedge against one-sided risks; they represent the right, but not the obligation, to buy or sell something at a pre-determined price in the future. An importer that has to make a large payment in a foreign currency can suffer large losses due to a future depreciation of his domestic currency. He can avoid these losses by buying call options for the foreign currency on the market for foreign currency options (and, obviously, pay the correct price for them).
Fischer Black, Robert Merton and Myron Scholes developed a method of correctly pricing derivatives. Their work in the early 1970s proposed a solution to a crucial problem in financing theory: what is the best (=correctly or minimally priced) way of dealing with financial risk. It was this solution which brought about the rapid growth of markets for derivatives in the last two decades. Fischer Black died in August 1995, in his early fifties. Had he lived longer, he most definitely would have shared the Nobel Prize.
Black, Merton and Scholes can be applied to a number of economic contracts and decisions which can be construed as options. Any investment may provide opportunities (options) to expand into new markets in the future. Their methodology can be used to value things as diverse as investments, insurance policies and guarantees.
Valuing Financial Options
One of the earliest efforts to determine the value of stock options was made by Louis Bachelier in his Ph.D. thesis at the Sorbonne in 1900. His formula was based on unrealistic assumptions such as a zero interest rate and negative share prices.
Still, scholars like Case Sprenkle, James Boness and Paul Samuelson used his formula. They introduced several now universally accepted assumptions: that stock prices are normally distributed (which guarantees that share prices are positive), a non-zero (negative or positive) interest rate, the risk aversion of investors, the existence of a risk premium (on top of the risk-free interest rate). In 1964, Boness came up with a formula which was very similar to the Black-Scholes formula. Yet, it still incorporated compensation for the risk associated with a stock through an unknown interest rate.
Prior to 1973, people discounted (capitalized) the expected value of a stock option at expiration. They used arbitrary risk premiums in the discounting process. The risk premium represented the volatility of the underlying stock.
In other words, it represented the chances to find the price of the stock within a given range of prices on expiration. It did not represent the investors' risk aversion, something which is impossible to observe in reality.
The Black and Scholes Formula
The revolution brought about by Merton, Black and Scholes was recognizing that it is not necessary to use any risk premium when valuing an option because it is already included in the price of the stock. In 1973 Fischer Black and Myron S. Scholes published the famous option pricing Black and Scholes formula. Merton extended it in 1973.
The idea was simple: a formula for option valuation should determine exactly how the value of the option depends on the current share price (professionally called the "delta" of the option). A delta of 1 means that a $1 increase or decrease in the price of the share is translated to a $1 identical movement in the price of the option.
An investor that holds the share and wants to protect himself against the changes in its price can eliminate the risk by selling (writing) options as the number of shares he owns. If the share price increases, the investor will make a profit on the shares which will be identical to the losses on the options. The seller of an option incurs losses when the share price goes up, because he has to pay money to the people who bought it or give to them the shares at a price that is lower than the market price - the strike price of the option. The reverse is true for decreases in the share price. Yet, the money received by the investor from the buyers of the options that he sold is invested. Altogether, the investor should receive a yield equivalent to the yield on risk free investments (for instance, treasury bills).
Changes in the share price and drawing nearer to the maturity (expiration) date of the option changes the delta of the option. The investor has to change the portfolio of his investments (shares, sold options and the money received from the option buyers) to account for this changing delta.
This is the first unrealistic assumption of Black, Merton and Scholes: that the investor can trade continuously without any transaction costs (though others amended the formula later).
According to their formula, the value of a call option is given by the difference between the expected share price and the expected cost if the option is exercised. The value of the option is higher, the higher the current share price, the higher the volatility of the share price (as measured by its standard deviation), the higher the risk-free interest rate, the longer the time to maturity, the lower the strike price, and the higher the probability that the option will be exercised.
All the parameters in the equation are observable except the volatility , which has to be estimated from market data. If the price of the call option is known, the formula can be used to solve for the market's estimate of the share volatility.
Merton contributed to this revolutionary thinking by saying that to evaluate stock options, the market does not need to be in equilibrium. It is sufficient that no arbitrage opportunities will arise (namely, that the market will price the share and the option correctly). So, Merton was not afraid to include a fluctuating (stochastic) interest rate in HIS treatment of the Black and Scholes formula.
His much more flexible approach also fitted more complex types of options (known as synthetic options - created by buying or selling two unrelated securities).
Theory and Practice
The Nobel laureates succeeded to solve a problem more than 70 years old.
But their contribution had both theoretical and practical importance. It assisted in solving many economic problems, to price derivatives and to valuation in other areas. Their method has been used to determine the value of currency options, interest rate options, options on futures, and so on.
Today, we no longer use the original formula. The interest rate in modern theories is stochastic, the volatility of the share price varies stochastically over time, prices develop in jumps, transaction costs are taken into account and prices can be controlled (e.g. currencies are restricted to move inside bands in many countries).
Specific Applications of the Formula: Corporate Liabilities
A share can be thought of as an option on the firm. If the value of the firm is lower than the value of its maturing debt, the shareholders have the right, but not the obligation, to repay the loans. We can, therefore, use the Black and Scholes to value shares, even when are not traded. Shares are liabilities of the firm and all other liabilities can be treated the same way.
In financial contract theory the methodology has been used to design optimal financial contracts, taking into account various aspects of bankruptcy law.
Investment evaluation Flexibility is a key factor in a successful choice between investments. Let us take a surprising example: equipment differs in its flexibility - some equipment can be deactivated and reactivated at will (as the market price of the product fluctuates), uses different sources of energy with varying relative prices (example: the relative prices of oil versus electricity), etc. This kind of equipment is really an option: to operate or to shut down, to use oil or electricity).
The Black and Scholes formula could help make the right decision.
Guarantees and Insurance Contracts
Insurance policies and financial (and non financial) guarantees can be evaluated using option-pricing theory. Insurance against the non-payment of a debt security is equivalent to a put option on the debt security with a strike price that is equal to the nominal value of the security. A real put option would provide its holder with the right to sell the debt security if its value declines below the strike price.
Put differently, the put option owner has the possibility to limit his losses.
Option contracts are, indeed, a kind of insurance contracts and the two markets are competing.
Complete Markets
Merton (1977) extend the dynamic theory of financial markets. In the 1950s, Kenneth Arrow and Gerard Debreu (both Nobel Prize winners) demonstrated that individuals, households and firms can abolish their risk: if there exist as many independent securities as there are future states of the world (a quite large number). Merton proved that far fewer financial instruments are sufficient to eliminate risk, even when the number of future states is very large.
Practical Importance
Option contracts began to be traded on the Chicago Board Options Exchange (CBOE) in April 1973, one month before the formula was published.
It was only in 1975 that traders had begun applying it - using programmed calculators. Thousands of traders and investors use the formula daily in markets throughout the world. In many countries, it is mandatory by law to use the formula to price stock warrants and options. In Israel, the formula must be included and explained in every public offering prospectus.
Today, we cannot conceive of the financial world without the formula.
Investment portfolio managers use put options to hedge against a decline in share prices. Companies use derivative instruments to fight currency, interest rates and other financial risks. Banks and other financial institutions use it to price (even to characterize) new products, offer customized financial solutions and instruments to their clients and to minimize their own risks.
Some Other Scientific Contributions
The work of Merton and Scholes was not confined to inventing the formula.
Merton analysed individual consumption and investment decisions in continuous time. He generalized an important asset pricing model called the CAPM and gave it a dynamic form. He applied option pricing formulas in different fields.
He is most known for deriving a formula which allows stock price movements to be discontinuous.
Scholes studied the effect of dividends on share prices and estimated the risks associated with the share which are not specific to it. He is a great guru of the efficient marketplace ("The Invisible Hand of the Market").
Original pictures take http://doomcycle.com/tag/frazetta-friday/page/2/ site
Gold. Rare, beautiful, and unique. Treasured as a store of value for thousands of years, it is an important and secure asset. It has maintained its long term value, is not directly affected by the economic policies of individual countries and doesn't depend on a 'promise to pay'.
Completely free of credit risk, although it bears a market risk gold has always been a secure refuge in unsettled times. Its safe haven attributes attract wise investors. Gold has proved itself to be an effective way to manage wealth.
For at least 200 years the price of gold has kept pace with inflation. Another important reason to invest in gold is its consistent delivery within a portfolio of assets. Its performance tends to move independently of other investments and of key economic indicators. Even a small weighting of gold in an investment portfolio can help reduce overall risk.
Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset class.
Portfolios that contain gold are generally more robust and better able to cope with market ncertainties than those that don't. Adding gold to a portfolio introduces an entirely different class of asset.
Gold is unusual because it is both a commodity and a monetary asset. It is an 'effective diversifier' because its performance tends to move independently of other investments and key economic indicators.
Studies have shown that traditional diversifiers (such as bonds and alternative assets) often fail during times of market stress or instability. Even a small allocation of gold has been proven to significantly improve the consistency of portfolio performance during both stable and unstable financial periods.
Gold improves the stability and predictability of returns. It is not correlated with other assets because the gold price is not driven by the same factors that drive the performance of other assets. Gold is also significantly less volatile than practically all equity indices.
The value of gold, in terms of real goods and services that it can buy,has remained remarkably stable. In contrast, the purchasing power of many currencies has generally declined.
Traditionally, access to the gold market has been through: investment in physical gold, usually as gold coins or small bars,or, for larger quantities, by way of the over the counter market; gold futures and options; gold mining equities, often packaged in gold-oriented mutual funds.
Original pictures take http://www.netotrade.com/learn/trading-basics/infographics/tips-for-traders/?A=677 site
The communication innovations we have around us today like the internet, financial newspapers, and special interest television channels focused on investing like CNBC are a high speed pipeline of nonsensical chatter. All these sources of information mean that there is no shortage of media people trying to answer our questions about the stock market and specific stocks. You have to remember that the news media are constantly competing to survive against other stuff you can watch. If they dont always sound like they know exactly what is going on then you wont watch their presentations. If you dont tune into their show then their ratings go down. If their ratings go down they get fired and their show gets cancelled.
This means that financial journalists are in the business of finding great stories and sounding like authorities no matter what. The stock market is a great place for them to dig up news scoops to feed to the public. They dont really check their facts very well and sometimes not at all. This means that if some insider wants to feed you a line of bull manure then all they have to do is maintain good connections with financial journalists, sponsor an investment show, or outright buy an investing TV channel like Jack Welch the CEO of GE did when he set up CNBC. What a great way for inside executives to control the flow of news information to the public then to actually own one of the only financial news channelsbut not so great for you!
These journalists also kick up the fire by bringing in so-called experts to talk about each side of some topic that real experts would not consider important.
This just makes it all the more confusing for the public to understand what is important when buying or selling a stock. Shows on CNBC like Closing Bell, Kudlow & Company, and Mad Money do nothing but confuse and misdirect the attention of most individual investors in the public. Even worse this means that the financial news media allows overpriced stocks to be recommended through analysts in the inside web that inside executives are dumping on the public because they are trying to get out. This actually happened at the top of the bull market in 1999. For a great historical description of what happened read Maggie Mahars book entitled Bull.
The famous Yale University Economist, Prof. Bob Shiller, Ph.D. is particularly harsh on the media in his book Irrational Exuberance. Dr. Shiller is one the economists that Alan Greenspan respects most and where he got the term Irrational Exuberance. He portrays the media as sound-bite-driven where superficial opinions are preferred over in-depth analyses. I agree whole heartedly with him and contend that it is also done just because the industry would rather have the retail investor confused and emotionally pliable to get you to buy and sell when they want with total disregard for your best interests!
People who had invested their life savings in the stock market were ripped off in the stock market because the financial news media and analysts were hyping up what a great buy stocks were at the very top of the market in 1999 and 2000. At the same time inside corporate executives were selling out everything they had. What is amazing is that our federal government in the form of the Security Exchange Commission never did a thing about it. There was never a blanket case taken or an outcry that almost all of the inside executives had somehow magically sold out of the market six months before the market crashed.
Here is the valuable tip I want you to consider: when you are a beginner investor it is important that you DO NOT WATCH THE FINANCIAL NEWS OR READ THE FINANCIAL NEWSPAPERS! Dont let the stock market industry lead you around by the nose like livestock to the slaughter house. Dont listen to what they want you to listen to. You should focus on learning what is important in the stock market and the mass media will only confuse you until you have educated yourself.
Recommended reading:
1. Mahar, M. Bull! A History of the Boom, 1929-1999 (New York, HarperBusiness , 2003)
2. Shiller, R., Irrational Exhuberance, (New York, Broadway Books, 2000)
Original pictures take http://doomcycle.com/tag/frazetta-friday/page/2/ site
Cyprus as an investment is good news these days for capital appreciation. Since joining the European Union in May 2004 the island has opened up to investors and seen prices go up by 30% with high demand for apartments in the Southern part of the island. There is a company to help people to invest in Cyprus using either a UK SIPPS with assistance from the UK government. Advice is required from a financial advisor before this route is used. Use the services of a professional organisation like Living Cyprus.com find them at http://www.living-cyprus.com for free advice and property for sale in Cyprus. Take a look and enjoy.
Andrew Walters is an acknowledged expert on pensions and in particular can provide advice on the suitability of using a Self Invested Personal Pension Plan (SIPP) to fund the purchase of a property in Cyprus.This is an area that we have had a lot of interest in, but reliable advice and information is hard to come by and so a talk with Andrew is definitely to be recommended, if this is something that you have heard about and would like to find out more.
For starters, if this is a type of transaction that you have not heard of or had not previously considered, here is a brief guide provided to us by Andrew on this topic.
We would like to stress that in providing this information, we are not providing an opinion on this funding option nor should this guide be considered as an alternative to independent financial advice which may be sought in the UK via Andrew at EYFS Ltd or any other authorised firm in the UK.
SIPPS another funding option for you?
As I write this in November 2005, we are in one regime with the expectation of a new regime beginning in April 2006. This article is written from the current perspective but makes reference, where relevant, to the new regime which will be effective from April 2006.
This article is based upon my understanding of current and proposed legislation. It is not exhaustive nor should it be assumed that any particular funding option is going to be suitable for you based only on the reading of this article. No liability is accepted for any actual or consequential loss arising from the use of this article as the basis of making a financial commitment without also seeking independent financial advice as an individual.
What is a SIPP?
A SIPP is a Personal Pension Plan with a self investment option. Which means that in addition to the usual choice of insurance company funds you may be offered via your personal pension plan you may also invest in a wide range of assets of your own choosing such as : individual shares or probably of more interest in this context property.
Who can have one?
To some degree anyone who has pension monies in the UK, albeit if future funding is a requirement the definition changes to anyone who is eligible to take out a personal pension in the UK which is just about everybody who is resident in the UK!
What is often overlooked is that two or more individuals can, in the right circumstances team up to use their SIPP plans to buy a property or other asset together.
This does of course have implications, but could in the right circumstances increase your funding potential and enable you to spread the inherent investment risk across a number of people.
Why havent I heard about them before?
SIPPs have been around for more than ten years but have traditionally been the province of serious investors or advisers managing large funds on a discretionary basis.
They have previously had limited appeal to smaller investors as the additional charges can tend to dilute any potential gains for smaller investors provided by the increased investment horizon. This is not to conclude that they are terribly expensive just that the charging structure is more complex. Its a horse with a course!
The reason that most people will not have come across them is that whilst previously, property purchase has always been possible via a SIPP, it has always been limited to commercial property within strict guidelines (and in the UK) a property with any aspect of residentiality was specifically excluded.
Another tricky limitation was the exclusion of any purchases from yourself, anyone in your family or a connected 3rd party this was always a bind because most of the best investment opportunities that arose in my experience fell into this category!
The Government intends, according to its indications, to lift these significant barriers from April 2006 and from then on residential properties for occupation or let in the UK or abroad will be potential investments for a SIPP and the rules on purchases from connected persons is to be relaxed - hence the considerable interest!
How do they work?
Usually a SIPP is established on a deferred basis as an add on to a personal pension plan that is the personal pension plan is established with a view to self investment in the near or more distant future and as such starts out like any other personal pension plan.
[Stakeholder pensions have not embraced SIPP functions and so if your pension fund is currently in one of these plans and you wish to self invest, a transfer may be necessary. This should not be contemplated without taking independent financial advice.]
Self investment via a SIPP is made through a trustee (usually an employee of the insurance company or a scheme administrator).
In brief, you complete a form detailing the proposed investment and the trustee has to approve it. Normally, when buying authorised unit trusts, investment trusts or securities this just amounts to a rubber stamping procedure.
However, when something more individual is proposed like a property the trustee needs to satisfy himself that the proposed investment is allowable (within Inland Revenue rules) is permissible (within the scheme rules) and is suitable (satisfies the basic needs of an investment). In practice, this is usually quite straightforward since it only makes sense to propose investments that work at all of these levels.
Once the trustee is satisfied then the investment/purchase may proceed subject to all of the usual hurdles such as a valuation, conveyance of legal title, stamp duty etc.
If a scheme is already established, then a property transaction through a SIPP should not take significantly longer to complete. Where there is no SIPP established or the transaction is reliant on funds being transferred in from other schemes it is likely that the transaction may be significantly protracted and you would be well advised not to promise your vendor any completion dates that are too optimistic.
If the purchase is being made completely from existing funds the trustee will ensure that payment is made under your guidance. If the scheme needs to borrow money to fund part of the purchase which it may do then the trustee will need to apply for funds, this can usually be from a lender of your choosing. The point to note is that it is the SIPP that is borrowing the money and not you so the transaction must satisfy the lenders criteria in its own right.
SIPPs can currently borrow up to 3 times the scheme assets. For example, if the scheme has 100 000 in assets it may borrow (subject to approval) potentially another 300 000, which means that you could go shopping with 400 000!
Unfortunately, under current rules you cannot buy residential property and by April 2006 (when you can) the scheme borrowing facility is to be capped at a more realistic 50% of scheme assets. In the same scenario as above this would reduce your shopping capacity to 150 000.
Once completed the property becomes a scheme asset administered by the trustee. It is very important that you understand the implication of this. The property is not yours it belongs to the scheme. It can be sold but the proceeds return to the scheme for re-investment. You cannot sell the property and personally pocket any of the proceeds.
With all significant financial commitments you are well advised to take independent financial advice prior to commitment funds and this is definitely the case with this type of transaction.
Advantages
In the UK, these schemes are fantastically tax efficient.
Tax relief on new contributions to eligible investors at at least the basic rate and at their highest UK rate of tax if this 40%.
Virtually tax free growth on investments whilst within the scheme.
No capital gains tax upon disposal of assets and rents on leases / lets are paid into the plan tax free.
Any interest on scheme borrowings will usually be relieved too.
Normally no inheritance tax is payable on scheme assets either
But, perhaps the biggest advantage is that it introduces a source of funds your existing pension plans - to potentially enable you to buy your property (from April 2006) which have not previously been available to you.
Whats more, new substantially increased contribution limits mean that money can be accumulated faster in schemes than at present.
and Disadvantages?
The property is not your asset it cannot therefore be considered as collateral for any other borrowings, nor can you sell it and pocket the proceeds.
Future capital gains and rental income will be potentially taxable in Cyprus (but not the UK) exposure will vary depending on how you choose to hold the property and the figures involved. IHT doesnt exist in Cyprus though fortunately. It is not therefore likely to be the most tax efficient investment that you could hold in a UK pension but still could be worthwhile.
Your choice of property may prove to be a poor investment as a result of any of the following: low capital growth or even a slump in property values, Poor rental income
If you stay in the property or reside in the property you will be expected to pay the going rate but at least you are paying it back to your own pension!
At some point, unless any property subsequently becomes a relatively insignificant part of your pension fund, you will have to sell the property to derive an income as this is, it should be remembered, the primary purpose of any pension plan! It may not, therefore, be advisable that you purchase a property late in life that you intend to live in until your death via a SIPP.
How do I find out More?
Any IFA in the UK should know what a SIPP is, but few will know the intricacies of the plan and in particular how it can be suitably harnessed for the potential purchase of a property abroad. Using my links in Cyprus, I am making it my business to put together robust and reliable means to make this possible via developers and lawyers and so I believe that I may be well worthy of consideration for assisting you with this type of transaction back in the UK.
Original pictures take http://cyprusprop.com/advanced-search/p_id/16367 site
Current scams that are in vogue in UK include companies that are:
Persuading the investors to invest in fraudulent schemes;
advertising "buy to let" properties in poor condition and make claims about unrealistic rental returns;
offering the chance to make a profit from buying up debts;
Targeting the low salaried people about to retire.
Apart from the above there are quite a few practices that are wrongly termed as scams. One such business is the land investment business. These companies persuade the investors to buy greenbelt land in anticipation of the huge profit they are expected to rake in the future. UK has already heard of Kent Land Scams, Sussex Land Scams & primarily London Land Scams but can this be termed as a scam?
Who are the scamsters?
Land banking companies? Definitely not as they are using the statistics and facts published by the Government and the other research organizations such as the RICS as a basis of the promise that they give to the investors. So then who are the scamsters? It is the rumor spreaders who are the actual scamsters. There has never been an instance in the history that an investor is victimized by a land banking firm. The Government never considers the business as fraudulent one. Then why is it that a small group of people, with half baked knowledge on the demographic conditions of UK, being allowed to spread wrong information to the customers. This actually leads to a question as who are the victims. The victims actually are not the investors but the companies which are into the business of selling land and property to the prospective investors. The investors should be aware of the fact and should take very calculated and informed step before believing the people who are the actual scamsters and they should take a prudent decision as to what should be done with their hard earned money.
Original pictures take http://www.thelawtog.stfi.re/5-tips-to-successful-portfolio-building/?sf=rgekdva site
The mechanism of buying and selling is quite easy. It is as easy as pressing a button in front of your computer screen. The question of when investors should buy and sell warrant a more detailed analysis.
When to sell: Ideally, we should sell when a stock reaches its fair value. There are 9 other reasons to sell but I won't cover it here. So, what is a stock's fair value? I have covered this plenty of time. But, in general, a stock reaches its fair value when it is yielding 3% above the current free risk interest rate. I am using 10 year treasury bond as a proxy for free risk interest rate. Currently, the 10 year bond is yielding 4.46%. Fair value of a stock is therefore when it is yielding 7.46%. Inverting yield, we then got the widely used Price Earning Ratio. Yield of 7.46% corresponds to P/E ratio of 13.4
When to buy: This is an easier question to answer. We, of course, should buy stock lower than we sell. If we sell the stock at a P/E ratio of 13.4, then we should buy it when the P/E ratio is less than 13.4. How much lower ? It depends on how much return you aim for. If, say, you are aiming for 50% return, then your buying price is when the stock is trading at a P/E of 8.93. If you are aiming for a 34% return, then your buying price is at a P/E of 10.
In short, we should buy at a P/E of 8.93 and then sell at a P/E of 13.4, correct? Yes, but with a lot of caveats. I've covered those caveats in 5 common misuse of P/E ratio. To emphasize, the P/E ratio used here is not trailing P/E ratio, does not ignore the value of cash in the balance sheet, does not ignore one-time event and does not ignore the change in interest rate. At this point, I am ignoring earning growth simply because the fair value calculation is for a company with 0% growth.
You might be wondering where you might find stocks that are trading at a P/E of 13, let alone 8.93. Here is a few candidates to help you getting started. Seagate Technology (STX) has a forward P/E of 7.5 and $ 2.30 per share of net cash in the balance sheet. Western Digital Corporation (WDC) has a forward P/E of 9.75 with $ 2.65 per share of net cash. OmniVision Technologies Inc. (OVTI) is trading at a forward P/E of 10.3 with $ 5.30 per share of net cash. Magna International (MGA) is trading at a forward P/E of 9.72 with $ 4.58 per share of net cash.
Please note that this is not a buy/sell recommendation. You would do very well if you do your own homework.
Original pictures take http://www.laxmicraneservice.com/aboutus.php site
When IRAs, ks, and Other Tax-sheltered Investments Dont Make Sense
Every year about this time, people start talking about and considering things like IRA contributions. Most of the time, tax-sheltered investments make great sense. The federal and state governments have designed their tax laws to encourage such savings. However, that said, there are three situations in which it may be a poor idea to use tax-sheltered investments:
You know youll need the money early
In this case, it may not be a good idea to lock away money you may need before retirement because there is usually a 10 percent early-withdrawal penalty paid on money retrieved from a retirement account before age 59 1/2. But you will also need money after you retire, so the What if I need the money? argument is more than a little weak. Yes, you may need the money before you retire, but you will absolutely need money after you retire.
You dont need to save any more for retirement
Using retirement planning vehicles, such as IRAs, may be a reasonable way to accumulate wealth. And the deferred taxes on your investment income do make your savings grow much more quickly. Nevertheless, if youve already saved enough money for retirement, its possible that you should consider other investment options as well as estate planning issues. This special case is beyond the scope of this book, but if it applies to you, I encourage you to consult a good personal financial plannerpreferably one who charges you an hourly fee, not one who earns a commission by selling you financial products you may not need.
Your tax rate will rise in retirement
The calculations get tricky, but if youre only a few years away from retirement and you believe income tax rates will be going up (perhaps to deal with the huge federal-budget deficit or because youll be paying a new state income tax), it may not make sense for you to save, say, 15 percent now but pay 45 percent later.
Original pictures take http://www.moneycrashers.com/how-much-save-retirement-ready/ site
What You Need To Know When Trading Derivatives And Futures
Hello Fellow-Investor.
The Derivatives and Futures Market is the most potentially profitable market in the world. But it can be the most distructive one too!
Derivatives
A derivative is a financial term for a specific type of investment from which the price over a certain time is derived from the performance of the underlying asset such as commodities, shares or bonds, interest rates, exchange rates or indices like stock market index or consumer price index.
This performance can determine both the amount and the timing of the payoffs. The diverse range of potential underlying assets and payoff alternatives leads to a huge range of derivatives contracts available to be traded in the market. The main types of derivatives are Futures, Forwards, Options and Swaps.
Futures
A futures contract is a standardized contract, traded on a futures exchange
to buy or sell a certain underlying asset. at a certain date in the future, at a pre-set price.
The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price. The futures price, normally, converges towards the settlement price on the delivery date.
A futures contract gives the holder the right and the obligation to buy or sell, which differs from an options contract, which gives the buyer the right, but not the obligation, and the option writer (seller) the obligation, but not the right.
In other words, the owner of an options contract can exercise (to buy or sell) on or prior to the pre-determined settlement/expiration date. Both parties of a "futures contract" must exercise the contract (buy or sell) on the settlement date.
To exit the commitment, the holder of a futures position has to sell his long position or buy back his short position
effectively closing out the futures position and its contract obligations.
Futures contracts, or simply futures, are exchange traded derivatives. The exchange acts as the counterparty on all contracts and sets margin requirement etc.
Forwards
A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. Therefore, the trade date and delivery date are separated. It is used to control and hedge risk.
One party agrees to buy, the other to sell, for a forward price agreed in advance. In a forward transaction, no actual cash changes hands. If the transaction is collaterised, exchange of margin will take place according to a pre-agreed rule. Otherwise no asset of any kind actually changes hands, until the contract has matured.
The forward price of such a contract is commonly contrasted with the spot price which is the price at which the asset changes hands ( on the spot date, usually the next business day ). The difference between the spot and the forward price is the forward premium or forward discount.
A standardized forward contract that is traded on an exchange is called a futures contract.
Futures vs. Forwards
While futures and forward contracts are both a contract to trade on a future date, key differences include:
- Futures are always traded on an exchange, whereas forwards always trade over-the-counter.
- Futures are highly standardized, whereas each forward is unique
- The price at which the contract is finally settled is different:
Futures are settled at the settlement price fixed on the last trading date of the contract (i.e. at the end)
Forwards are settled at the forward price agreed on the trade date (i.e. at the start)
- The credit risk of futures is much lower than that of forwards:
Traders are not subject to credit risk due to the role played by the clearing house. The profit or loss on a futures position is exchanged in cash every day. After this the credit exposure is again zero.
The profit or loss on a forward contract is only realised at the time of settlement, so the credit exposure can keep increasing
- In case of physical delivery, the forward contract specifies to whom to make the delivery. The counterparty on a futures contract is chosen randomly by the exchange.
- In a forward there are no cash flows until delivery, whereas in futures there are margin requirements and periodic margin calls.
Options
An option is a contract whereby one party (the holder or buyer) has the right but not the obligation to exercise a feature of the option contract ( e.g. stocks ) on or before a future date called the exercise or expiry date.
Since the option gives the buyer a right and the seller an obligation, the buyer has received something of value. The amount the buyer pays the seller for the option is called the option premium.
Most often the term "option" refers to a type of derivative which gives the holder of the option the right but not the obligation to purchase (a "call option") or sell (a "put option") a specified amount of a security within a specified time span. (Specific features of options on securities differ by the type of the underlying financial instrument involved.)
Swaps
A swap is a derivative where two counterparties exchange one stream of cash flows against another stream. These streams are called the legs of the swap. The cash flows are calculated over a notional principal amount. Swaps are often used to hedge certain risks, for instance interest rate risk. Another use is speculation.
Swaps are over-the-counter (OTC) derivatives. This means that they are negotiated outside exchanges. They cannot be bought and sold like securities or future contracts, but are all unique. As each swap is a unique contract, the only way to get out of it is by either mutually agreeing to tear it up, or by reassigning the swap to a third party. This latter option is only possible with the consent of the counterparty.
Original pictures take http://bitcoinlove.xyz/news/cme-group-aims-to-launch-a-bitcoin-derivatives-platform-this-quarter/ site
What You Need To Know In Furnishing Residential Rental Investment Property
For first time real estate investors who purchase residential property, there is always a dilemma over whether to furnish their residential rental investment property and if so what types of basic amenities to provide. This article therefore will cover the two basic types of rental arrangements that will come up if you should want to rent out your residential investment property.
The first type of rental available is an unfurnished investment property. These tenants are the type that will come with their existing furniture and want to move all of it into your property. The problem therefore is what to do with your existing furniture. Sometimes this can result in the owner of the investment property have extra sets of furniture, like I have seen personally myself due to their tenants not liking their choice of furniture. Note that however most landlords do provide the basic amenities like washing machine, dryer and a television. If you are providing those movables, remember to list them clearly with the brand and type in the rental agreement that you sign with your tenant.
The Second type of property is fully furnished property. The thing to note here is that people will always differ from you in terms of furnishing and type of drapes used in the property. Thus one of the best ways to save money in case the existing tenant does not like the furniture that you provide is to get the furniture from IKEA which is relatively cheap to get and also easy to move to your investment property. Not only that, but remember that as long as you spend a certain sum in IKEA, you can get them to do interior designing for your property which is a real time saver, since when you are investing in your property you will be busy looking at the legal work, the mortgage and other things associated with the investment property.
There are also property management companies that have a certain way by which they furnish their apartments and might even furnish the property for you in exchange for a fee. It is submitted that this might be better as it might allow them to market your property with a higher rental. The reason for this is that these property management companies group their rental properties in terms of furnishing and size to determine their rentals so you might want to take a look at their brochures.
In conclusion, at the end of the day, if your investment property is already furnished nicely, you might want to hold out until a tenant that likes your style of furnishing appears so that you can save on the trouble of moving your furniture. Otherwise unless you like furnishing property and are blessed with a good sense of fashion sense, it will be best to leave the furnishing to the professionals.
Original pictures take http://infographicjournal.com/how-to-buy-investment-property/ site
We all know when there is a panic on the financial market, everything that can be seen as an investment will rise in price. Besides traditional commodities such as gold and antiques, you can also consider some products of the modern art as in investment for your money. Let's consider paintings. A properly chosen painting can essentially increase the wealth of an owner in just a few years. And it is not hard to choose such a piece of art, as it might seem at first.
There a lot of questions and problems you will need to solve before making a decision. Why is there a great difference in price for different paintings? How to buy artwork that will eventually rise in price? How not to overpay for it? What factors influence the cost of a painting? These and other questions are what you will have to answer if you want to change the interior of your house with a stylish modern painting and make a wise investment for your hard earned money.
The difference in price of artworks can be astonishing. For two almost identical paintings (the canvas, oil) in different places you will be asked to pay from $500 to $5000. How do you make the right choice in a situation like that? Often buyers simply don't recognize the factors that price consist of. In the best-case scenario when you know an artist personally and you are buying a painting directly from him or her - the price practically equals the expenses of the painting. But this case is not very typical.
If you buy a painting from an art gallery, what are the factors that influence the price? First of all - rent of the gallery space. The majority of galleries are located in places where low rent is usually not the case. Salary of employees of a gallery who carry out the exhibitions. Cost of advertising such as publications in press. Expenses for posters, catalogues, invitations to opening of exhibitions, etc. Financing different "noncommercial" art projects, and many other things. You will overpay at least twice as much than if you buy a painting from a gallery. But if you want to invest your money smart, buying from an exhibition or through an art gallery makes sense. They will offer you the works of art that have already gone through preliminary selection and tough competition. You know for sure it is a good investment.
If you are buying a painting directly from an artist, all you can do is basically rely on your own taste and on some attributes of professionalism and success that the artist portrays/of the artist. What kind of attributes are they? While you consider buying a painting from an artist, it is relevant to take an interest in his or her art education. Certainly there are some talented self-educated artists, but they are very rare.
There are some questions you may want to ask your artist. Does he or she have any works in large museums? Is he or she a winner of any art competitions? Where was his or her recent exhibition? A list of exhibitions will tell you a lot about him or her. Ask him/her to show you a catalog of exhibitions, posters, booklets and other advertising material that he/she has. A good website is also a sign of professionalism. Certainly not all talented artists have their own websites but most of them do. And if you wish to get artwork, which in the near future will rise in price, you should choose among the artists who have already reached certain level of success. If an artist cooperates with large poster companies, it is a very good sign. For instance if a gallery offers you a painting for $2000, the artist will most likely give it to you for $1000.
If you have problems with going to galleries and attending the opening days you can do everything online. Search in Google or in any other catalogue under the category "art" and look at the personal websites of the artists. You most definitely will be able to see a lot of interesting things. This way of research has one disadvantage - good artwork may not look as interesting on the screen of your monitor as in real life. On the other hand, if you become interested in some paintings, even in digital format, the original will definitely make a much stronger impression on you.
Original pictures take http://amzn.to/2gpBLeL site
What If You Only Have Left But Still Somehow Manage To Generate Over , This Year
Yes that's right armed with nothing but still generated over $100,000 in the end of this year. Is this rocket science? No it is not. Everybody even 12 years old boy can do it, all you need is proven formula that will show you what to do and when to do.
By following 3 formulas below having $100,000 income per year is no more dream. However first off I must warn you what I'll show you below is not get-rich-quick scheme. During my last 2 years online I'd searched to every possible place in order to formula that could bring me $100,000 in a night, unfortunately there's no such a thing.
So you need to give a time in order to make this formula work, your perseverance will pay off when the time has come.
Formula #1 - find your passion
Except you're very cold blooded person you need to do business not just solely from profits but also from doing something you love also. Because like or not there'll always be some problems during your business but if you doing something you love you'll face it as a fun hobby.
Don't worry about competition, there're always some competitions in every field in life. Beside that's what marketing all about how to make a killing out of your competition.
Your passion can be anything no matter how ridiculous they are, just write all of your passion.
Formula#2 - how to find profitable merchant that eager to give you more money than you boss
If you have no product to sell and only have $100 left you need to gain advantage of other people's product. It can be as simple as joining affiliate program. Affiliate program is the act of promoting other people's product and get paid whenever someone buy through your link.
You can do some research about which merchant in your field that offering affiliate program. All of them free to join and will cost you nothing. If you find affiliate program that require you to pay, don't even take a glance at it, it's simply common sense why you need to pay just for giving somebody money?
You can do research through search engine with go to affiliate directory. For example www.affiliateguide.com
Formula#3 - set up your online presence
Now you need to select merchant you want to represent as an affiliate. Don't take more than 10 programs to represent. Take more than 10 programs will get you overwhelmed, and will confuse your visitors which eventually doing nothing.
And it is best if the 10 products is complement product with each others.
Now after choose the products there's a few ways to start promote your product. You can create website and put product review that lead to specific product you represent or you can set up google adwords campaign and bid directly to merchant's website or you can put solo ads in ezine that cater your industry telling them about your affiliate's product with your link embedded in.
If you decide to use google adwords you need to be careful about the sums of money you spend. You need to be sure that the sums of money you spend less that the sums of money you get. And so the same if you decide to use solo ads.
I've seen few people make lot money with this, they have hundreds of ads on google. They pay copywriter to create the ads, set it up in 15 minutes and just sit back collect the money. Some of them have made up to $30,000 per month.
However I must warn you what works for someone is not guarantee will work to other. So you need to find out yourself, if the method is suit for you or not.
Original pictures take http://madlemmings.com/2016/05/17/online-business-ideas-internet/ site
Wealth management is a difficult concept to grasp for many people, especially in terms of investment and savings for the future. With options like stocks, bonds, 401Ks, 529s, and more, choosing the right wealth management option can be tough at best and impossibly confusing in many circumstances. Thats why there are wealth management firms who are experts in these services and exist soley to help guide high net worth individuals through the aches and pains of wealth management and private banking, as well as educating people on where to put their money and how each investment will help their finances grow.
Private Banking
If you are interested in learning more about the various ways to invest your money or plan for retirement, you should perhaps look into private banking options. In private banking, you have a direct account manager that you can contact any time with any questions regarding your account and how your assets are being handled. There are many options for investment through private banking, and most are fairly simple to understand, making this a preferred option for many individuals who are unfamiliar with wealth management.
Wealth Management Services
For those who dont quite understand the concept behind wealth management services are available from a number of avenues to assist in the determination of how to handle finances. Wealth management means more than sticking to a budget; it also means planning for the future, and various institutions can assist in teaching individuals how to manage their money, as well as in providing complete wealth management services.
Wealth Management Firms
Have you considered a wealth management firm? Youve spoken to private bankers and dont like the options they provide for wealth management. You arent a fan of computers, so you dont want to invest in wealth management software. However, you need a customized solution for your assets to build at a greater rate, and you have no idea where to invest. Wealth management firms are built on the basis of helping you to follow the right avenue. With a personal advisor, youll be able to configure your investment options to achieve your specific goals with as much or as little input as you feel is necessary.
Wealth Management Software
You may also consider the benefits of wealth management software. Many people have a hard time managing their finances enough to plan from paycheck to paycheck, much less to have a goal for the future. When it comes to wealth management, most people are completely flustered by the thought of having a budget that considers not only the groceries to buy tomorrow, but also the ones youll need to buy after retirement in 40 years. Wealth management software is a helpful tool in building your financial plans so that you can feel comfortable with your current lifestyle, be assured that youll have the assets you need in the future, and can fulfill some of your dreams in the interim.
Original pictures take https://www.der-bank-blog.de/anzahl-millionaere-infografik/studien/private-banking-studien/30506/ site
When selecting a wealth management seminar, you should look for smaller size classes containing 25 people or less. Topics should include estate planning, financial planning, retirement plans for small businesses and the self-employed, savings and investing for retirement, understanding your 401(k) and employer fiduciary responsibility. Investing in times of trouble and economic market outlook are among other topics that should be covered.
One strategy recently discussed in a wealth management seminar I attended was using the equity in your primary residence as an investment vehicle and asset protection play, however, it is a risky proposition.
Here are the details, you take out a low interest mortgage on your home, you then you invest the proceeds in investments that are protected from creditors. This achieves a few things, first, this keeps creditors from viewing the house as an easy target for legal judgments personally as the home has very little equity due to the mortgage.
And secondly, lets assume you were able to acquire a mortgage at 6% interest. If your investments return 9%, you are ahead 3%. But dont make the mistake of taking out an adjustable rate mortgage because you may find yourself losing equity and investment dollars at the same time.
The largest risk you face cashing out all of the equity in your home is what happens if you lose money in all or most of your investments? What if your investment return doesnt cover the payment on the mortgage and with your creditors decide to take your investments rather than your house?
While the cash out mortgage programs are a good deal, you should consider talking to an attorney about the state laws protecting your home and a certified financial planner about ways to boost investments to cover the mortgage payments.
Original pictures take https://www.behance.net/gallery/28794903/Terkaya-wealth-management-branding site
We at SSI buy annuity payments, helping annuitants through all the stages. You get lump sum cash for your annuity entitlements, providing immediate liquidity instead of being bound to an inflexible schedule of future payments.
Cash For Annuity - When Would You Need It?
Your situation could change from when you executed an annuity agreement. These agreements are often made with the best of intentions and after careful planning. However, nobody can predict the future with any reasonable degree of accuracy. Particularly when that future extends to 20 years or so into the future.
A new opportunity might appear suddenly. A house could come on the market at a bargain price or at your ideal location. Or you could get admitted to a college program that would enhance your career prospects. You feel that it would be an unwise decision to forego the opportunity.
You would need immediate cash to utilize such unforeseen opportunities. Selling your annuity is one way to raise that cash. Most states have passed laws that allow access to your annuity payments. A judicial review process would examine whether the transaction is in the annuitant's best interest. If the review confirms this to be the case, judicial approval to the transaction would follow.
We all fall sick at times and could find it necessary to exchange our annuity entitlements for lump sum cash to meet heavy medical expenses.
The above are just a few examples of the occasions you might need lump sum cash for annuity payments. We at SSI would help you through the process by assessing your needs and developing a plan that would be in your best interests.
We would buy annuity payments due to you in part or full, depending on a review of your needs, and help you get through the legal formalities.
How Do We Buy Annuity Payments?
It is not necessary to sell your entire annuity payments. In fact, it is not advisable in many cases. It is better to cash out only a certain number, or percentage, of the remaining annuities. That way, you would get immediate cash for meeting urgent needs and also would get the unsold annuities when these become due.
SSI would help you determine the best options that would ensure meeting your needs while safeguarding your interests. The fact that a judicial process is involved would ensure that your interests are always kept in the picture.
The typical process involves determining the Present Value of the annuities that you are selling. Present Value is the value of the annuities discounted for the time delays in receiving the moneys. A dollar received after one year is of lesser value than a dollar received now. For example, at 6% interest, 1000 dollars become 1060 dollars at the end of one year. So the Present Value of 1060 dollars received at the end of one year is only 1000 dollars now.
Having determined the Present Value of the annuities, we would give you a quote at which we would buy your annuity payments. When you accept our offer, the process of getting judicial approval would be set in motion.
The judicial process would typically take a few weeks and we would pay you at the end of that process.
Contact Us Today for a Free Report
Call or email SSI today for a FREE Present Value report for cashing out your annuity payment entitlements.
Way to put aside money for your retirement - Topinvest.bg
In many cases, individuals who haven't made plans for their retirement end up having to live off of government funds that are very limited; instead of simply accepting this as inevitable, though, you can take the initiative now and begin saving for your golden years so that you'll be able to do as you wish.
Below are several ideas to get you started on the road to retirement savings, so that the best years of your life can really be the best years of your life.
One of the easiest ways to start saving money for your retirement is to make use of common savings accounts. The accounts pay interest on the balance contained within, and as you add money to the account over the years the amount of interest paid will continue to increase. Some banks even offer specialized savings accounts to assist with retirement planning, which pay higher interest rates so long as certain deposit conditions are met.
Another way to put aside money for your retirement is to purchase certificates of deposit. These certificates pay interest over time until the certificate matures, at which time the entire amount built up within the certificate can be collected. Some certificates of deposit have a very short term, but others can last for years... these should be utilized as part of your retirement plans because relatively small investments can yield large returns when left to collect interest for several years.
A variety of investment plans, both private and employer-sponsored, can be a great way to help put money aside for your retirement. Common investment plans such as 401(k) plans and IRA's can be used to invest money in the stock market for collection upon retirement... though the stocks chosen for investment should be carefully considered so as to avoid losing money in the process. Some companies offer investment plans and stock options where the investments are chosen by the employee themself, though others require that the money for the plan is invested in stocks chosen by the company.
Though they are becoming less common in favor of investment plans, pension plans are another way that money can be set aside for retirement. With a pension plan the employee pays into the plan over the course of their employment, during which time the employer pays an additional amount (usually matching) into the plan. The money may be placed in a savings-type account, or held in escrow or as part of a money market account. Upon retirement, the employee is paid their pension either as a lump sum or as regular payments for years after they have retired from the company.
A variety of other savings and investment options exist, all of which should be explored and considered in order to help you to find the best option that meets your retirement funding needs. By taking the time to explore your retirement savings options, you can stay a step ahead and make sure that when the time comes for you to retire you're not empty handed and relying on loved ones or the government just to get by.
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We know that greed and fear rule the markets. But did you know that when investors gets too greedy, markets usually fall, and when investors are overcome with fear, markets usually rise. So how can when we monitor investors emotions and take advantage of investors emotional extremes?
Welcome to the world of investor sentiment analysis.
Investor psychology has been analysed for at least 250 years. Charles MacKay wrote his book, Extraordinary Popular Delusions And The Madness Of Crowds, in 1841, describing, among other manias, the herd mentality that caused the South Sea Bubble. Since then, many academics have published financial theories based on the concept that individuals act rationally and consider all available information in the decision-making process. But real life frequently demonstrates that the behavior of equity markets is irrational and unpredictable. A field known as behavioural finance has evolved over the years attempting to explain how emotions influence investors and their decision-making process. Studying human psychology helps predict the general direction of financial markets as well as many stock market bubbles and crashes. At the height of a period of optimism, greed moves stocks higher, ignoring business fundamentals and therefore creating an overpriced market. At the other extreme, fear moves prices lower, ignoring obvious opportunities and creates an undervalued market.
One important study, (Aspects of Investor Psychology, The Journal of Portfolio Management, Summer 1998) found that investors are much more distressed by prospective losses than they are made happy by equivalent gains. Some researchers theorize that investors follow the crowd and conventional wisdom to avoid any regret in the event their decisions prove to be incorrect.
QUANTIFYING INVESTOR EMOTIONS OR INVESTOR SENTIMENT
When a stock or market index rises, we know that it means investors are more eager to buy than to sell. But how can we accurately gauge just how investors feel?
Most often, investors are somewhere between mildly positive and mildly negative, and only occasionally do they demonstrate the extremes of greed or fear. It is easier to detect emotion when it is close to either irrational exuberance or outright fear. When markets act this way, it becomes "news" and moves from the business section, to being featured at the start of the evening news, and on the front page of the daily newspaper.
The success of charting as a tool, depends on investors repeating their behaviour patterns. There is always a comfort factor in doing the same as others and generally an aversion to behaving differently. Investors display herding instincts in their behaviour and this has become particularly noticeable among institutional investors. In the early stages of a rising trend in a market, positive sentiment can act as a positive driving force as everyone rushes in to join the party. However, there comes a time after the trend has been in place, when this positive sentiment acts as a warning that the trend is nearing its climax. Thats when smart investors will start switching to alternative investments.
The most sophisticated and active players in the market use derivative products to effect their transactions. These players tend to display earlier changes in emotion than most investors and normally their emotions run to greater extremes. So, derivative markets are a good source of data on investor sentiment. There are various options available on stocks, ETF's and indexes. By using an option pricing formula, we can extract a measure of how much investors are prepared to pay for the possibility of making a profit, or hedging against a loss. This is known as implied volatility, and it provides a mathematical valuation of investor emotion. Implied volatility tends to be high (the scale is inverted) when the market has had a sharp fall and this is associated with investor fear. At the other extreme, low implied volatility often occurs after a rise in the market and when investors are becoming complacent.
VIX is the symbol for the Chicago Board Options Exchange's volatility index for the S&P 500 (SPX). It is a measure of the level of implied volatility and not historical or statistical volatility. A numerical value for the VIX has been published by the CBOE since 1993. The method of calculating VIX was changed in early 2003. Instead of using the S&P 100 (OEX) Index options, it is now calculated using the options on the S&P 500 (SPX). Also note that the VXN is the symbol for the implied volatility index of the NASDAQ 100 index.
The implied volatilities are weighted to give the VIX a value that in effect acts as the implied volatility of an at-the-money SPX option at 22-trading days to expiration. The VIX represents the implied volatility of a hypothetical at-the-money SPX option. If implied volatility is high, the premium on options will be high and vice versa. Generally speaking, rising option premiums reflect rising expectation of future volatility of the underlying stock index, which represents higher implied volatility levels. The higher the VIX, the more panic in the markets and the greater the chance that investors have given up hope, taken their money, and gone home.
Comparing the movement of the VIX with that of the market can quite often provide clues as to the future direction the market might move. The more the VIX increases in value, the more "panic" is an issue in the market place. On the flip side, the more the VIX decreases in value, the more complacency there is amongst investors. The psychological impact measured by a relatively high VIX is a clear indicator that tells traders markets are oversold. A historic example was displayed on July 23rd 2002 when the VIX shot over 55. That big move coincided with a significant low in the Dow Jones Industrial Average that was followed by a 1,034-point, six-day rally. That rally didn't stick and the market again re-tested its July low in October of 2002. But throughout this double bottom in 2002 the VIX accurately identified a major directional shift in the market. At its core, the VIX is a statistical measure of emotions, and emotions are a major factor signalling capitulation in the market.
Extremely high readings of VIX indicate market bottoms, while low readings indicate market tops.
The VIX actually has an inverse relationship to the stock market. This is one of the first things you'll notice when viewing the VIX on a bar chart. When the VIX goes down the stock market moves higher. When the VIX advances, the stock market is headed lower. Generally speaking, a rising stock market is considered less risky by investors. On the other hand, a declining stock market is considered more risky. Therefore, the higher the perceived risk by investors the higher the implied volatility. This will make options, especially put options, more expensive.
When the phrase "implied volatility" is mentioned, keep in mind that it is not about the size of price swings. Rather it's the implied risk that is associated with taking a position in the stock market. When the stock market declines, the demand for put options usually increases. Increased demand means higher put option prices.
USING VIX to TIME the MARKET
One early study identified a VIX value of 25 as normal, and a value above 35 as high. Between October 1997 and May 2001 the VIX indicator went above 35 eleven times. In this study, the S&P 500 index as represented by SPY ETF. was purchased each time and held until the VIX retreated below 25. There were 9 profitable trades for an average gain of 3.1% and an average holding period of about one month. By using this VIX timing scheme you could capture 80% of total gains in the market, but your money is only at risk one third of the time.
An extended and/or extremely low VIX suggests a high degree of complacency and is commonly considered bearish. From the contrarian view point ,many traders are of the opinion that if the VIX becomes low, they'll begin looking for a reason to begin selling stock. On the flip-side of the coin, a very high VIX can indicate a high degree of anxiety which often leads to panic among options traders. This action is often considered bullish by the contrarian, and they'll look for reasons to begin buying stock. High VIX readings usually occur after an extended or sharp market decline with investor sentiment still very bearish. Some contrarians view readings above 35 as bullish. Hence, they'll begin looking for a major market turn to the upside.
The VIX should be used in conjunction with "regular" analysis of price action on price charts. The wise trader will never make a purchase or sale based solely on the price level of the VIX. The wise trader will use the VIX (and its support and resistance levels) in conjunction with the price action of charts of the S&P 500, the Dow, and the NASDAQ.
Using the VIX with charts of these indices will help you get a good grasp of the current market psychology. Since market movements are based entirely on human emotions, it is important for traders to understand psychological indicators. When the VIX is used correctly it helps you stay on the right side of the market and make profitable trades.
SUMMARY
Understanding Investor Sentiment (or Investor Psychology) is by far the most powerful tool an investor can use to understand exactly where the stock market is, and where it is going. But it is often hard to digest, as it is counter intuitive to our human nature.
Here is a recent example that will help illustrate this point.
In September 2005, the TSX was making multi year highs. While the VIX Indexes was down near multi year lows. Standing back and looking at these two pieces of information, you might question the wisdom of adding long-term money to this market at this time.
You might, but human nature would not.
From GARY NORRIS
Canadian Press
Mon Oct 17, 3:58 PM ET
Canadians are shovelling money into mutual funds almost like it's 2001 again, with September purchases of $1.8 billion - up from net redemptions of $545 million a year ago.
The Investment Funds Institute of Canada said Monday that investments in long-term funds - equity, bond and other funds excluding short-term money market funds - topped half a trillion dollars for the first time. "This underlines the fact that investors are making long-term commitments to funds, and not simply parking their investments temporarily in money market funds," commented Tom Hockin, president of the fund industry association.
Sales in the first nine months of the year, net of redemptions and excluding reinvested distributions, totaled $18.4 billion, "the highest net sales figure since the same period in 2001," Hockin observed.
Yes, you read that correctly, Canadian have not been this enthusiastic since the last time the market was peaking.
Now we don't have enough data yet, but since Canadian Mutual Fund investors did their "extreme" mutual fund shopping last month, the market has already dropped 800 points.
Now ask yourself, if you were going to put money into this market, was September the best, low risk time to do so in the past 5 years? Were these investors thinking analytically, or did the emotion of greed cloud their judgments?
My guess is that this is what I like to call "Panic Buying", of Canadian Mutual Funds last month, will signal the very top of this market, and be the catalyst for a major sell off.
Only time will tell if I am right.
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