With the exception of a couple of rallies, why have the stocks been dropping since the election? Is it because investors have very little faith in Obama’s new policies? How low can the stocks go before they close the stock exchange?

Stock Market Investment Strategy

Because investing is not a sure thing in most cases, it is much like a game - you do not know the outcome until the game has been played and a winner has been declared. Anytime you play almost any type of game, you have a strategy. Investing isn’t any different - you need an investment strategy.

An investment strategy is basically a plan for investing your money in various types of investments that will help you meet your financial goals in a specific amount of time. Each type of investment contains individual investments that you must choose from. A clothing store sells clothes - but those clothes consist of shirts, pants, dresses, skirts, undergarments, etc. The stock market is a type of investment, but it contains different types of stocks, which all contain different companies that you can invest in.

If you haven’t done your research, it can quickly become very confusing - simply because there are so many different types of investments and individual investments to choose from. This is where your strategy, combined with your risk tolerance and investment style all come into play.

If you are new to investments, work closely with a financial planner before making any investments. They will help you develop an investment strategy that will not only fall within the bounds of your risk tolerance and your investment style, but will also help you achieve your financial goals.

Never invest money without having a goal and a strategy for reaching that goal! This is essential. Nobody hands their money over to anyone without knowing what that money is being used for and when they will get it back! If you don’t have a goal, a plan, or a strategy, that is essentially what you are doing! Always start with a goal and a strategy for reaching that goal!

The Importance of Portfolio Diversification

“Do not put all of your eggs in one basket!” You have probably heard that over and over again throughout your life and when it comes to investing, it is very true. Diversification is the key to successful investing. All successful investors build portfolios that are widely diversified, and you should too!

Diversifying your investments might include purchasing various stocks in many different industries. It may include purchasing bonds, investing in money market accounts, or even in some real property. The key is to invest in several different areas - not just one.

Over time, research has shown that investors who have diversified portfolios usually see more consistent and stable returns on their investments than those who just invest in one thing. By investing in several different markets, you will actually be at less risk also.

For instance, if you have invested all of your money in one stock, and that stock takes a significant plunge, you will most likely find that you have lost all of your money. On the other hand, if you have invested in ten different stocks, and nine are doing well while one plunges, you are still in reasonably good shape.

A good diversification will usually include stocks, bonds, real property, and cash. It may take time to diversify your portfolio. Depending on how much you have to initially invest, you may have to start with one type of investment, and invest in other areas as time goes by.

This is okay, but if you can divide your initial investment funds among various types of investments, you will find that you have a lower risk of losing your money, and over time, you will see better returns.

Experts also suggest that you spread your investment money evenly among your investments. In other words, if you start with Rs.100,000 to invest, invest 25,000 in stocks, 25,000 in Mutual Funds, 25,000 in bonds, and put 25,000 in an interest bearing Fixed Deposit account.

Pretend I want to put a building in a place and need to issue stocks and bonds can an investment bank help me do it? What kind of credit or credentials would I need to get it?

I’m looking for a link to such studies here, so hopefully I can save time from doing my own studies. Basically, I’m looking for edges in the market, and even if dividend stocks grow at the same rate as non-dividend stocks, and dividends are a percent, than I will have a percent plus compounding on that percent every year. May not be much, but every edge counts. Please note that only statistics and studies will help me here. Thanks!

People who are part of the stock market and investing are always talking about how they could really use a psychic to help them pick stocks. Picking stocks is one of the most time consuming and grueling parts of being an investor or stockbroker. Most of their days are spent trying to predict the outcome of future days with the market.

Many people do not believe that investing is just about guessing what a stock will do. To most people investing is about watching the market and paying attention to each and every move. By paying attention to all aspects of the market it is possible to reap the biggest rewards possible.

Usually the stock market and individual stocks will move together. When a stock is steadily growing it is usually during a time when the market is growing and this is called a bull market. When a stock is declining the market may also be declining and this is called a bear market. Of course the market will have its ups and downs but the average trend will flow either up or down.

In order to determine what direction the market is going it is necessary to have two pieces of information; price and volume. You will need to have the prices of the trend of prices of stocks. The volume is the number of stocks that are currently being traded.

How to Determine Price

In order to determine price stockbrokers and investors will look at three major indicators that include: The Dow, S&P 500 and NASDAQ. Investors are helped by looking at these indicators and will analyze them to try and determine if the market trend is going up or down.

How to Determine Volume

Volume is easy to figure you by simply looking at the daily sales from the markets. Most stock websites and financial companies will have the daily sales volume numbers easily available to anyone whom requests them.

A high volume day is when both the prices and volume are up. During these bull times many investors feel most comfortable purchasing a new stock. On the other hand, when the market has low prices but there is a high volume, it can signal a time of potential trouble, because larger investors are pulling their money out of the market.

When the market is experiencing many down days there could be a reversal of the market or at the very least a stall. Because large firms and institutions are buying and selling so often, they can actually control the market and its movement.

By watching for changes in the market you can be ready for any potential market changes that may effect your earnings.

One of the busiest markets nowadays is the stock market for the reason that most economic transactions are done here– big money flows in and out of the stock markets. In this arena, you are able to get oriented with many subjects like the penny stocks, the forex market, stock quotes– among others. But in this article, we discuss primarily on forex market basics.

The foreign exchange or forex market is relatively young having begun in the early 1970s after the United States of America dropped the gold standard and national currencies began to fluctuate in a wider scope. For about 30 years prior to that, most nations had an agreement to keep their currency values stable in connection to the U.S. dollar, making a forex market unnecessary. With that no longer the case, banks quickly figured that fact that a profit could be generated in “buying” currency when it was devalued and “selling” it after it strengthened, just like any other commodity.

At present the for-ex market handles about $1.9 trillion in transactions each day, and it runs 24 hours a day, five days a week. (With countries around the world involved, it is always daytime somewhere.) The most traded currencies are the U.S. Dollar, the Euro, Japanese Yen, British Pound, Swiss Franc and Australian Dollar. Some currencies are also getting popularity like the Chinese Yuan and Singaporean Dollar.

The foreign exchange market is overwhelmingly dominated by international banks, government banks, investment banks, corporations, and hedge funds. As a matter of fact, individual traders cover for only about 2 percent of the for-ex market. Nevertheless, many individuals do try their hand at it, with varying degrees of success.

In the foreign exchange business, transactions are always handled in pairs: You purchase one currency and sell another one. The idea is to make a trade when you believe the currency you are buying is going to go up in value against to the one you are selling– the bottom line is to make profit out of it.

The for-ex market is wide and daunting and mostly inhabited by huge organizations. But it can be a business hub for individuals who have studied the finer points and who want to take a risk on something potential source of profit. And since the whole world is making use money, the trading of that money is always going to be a major business in the financial world.

Sensible investment and wealth management requires a balance between your risk profile and investment portfolio volatility.

Both of these factors can be combined to make up your investment policy and investment philosophy.

It’s important to understand that your risk profile is really comprised of two aspects: your risk attitude and your risk capacity. Risk attitude is the true measure of your personal comfort with risk. Are you willing to risk a less favourable outcome whilst attempting to achieve a more favourable one? (risk vs return).

Risk capacity is your ability to sustain a less favourable outcome without jeopardising your original goals and objectives. Risk capacity is affected by factors such as time horizon (allowing you time to recover from an adverse return) and total wealth (allowing you to go through a decline in account value and still maintain your desired spending).

The two areas are as important as each other and it is vital that you take both into account when making important investment decisions. For example, if your risk attitude means that you could sustain a 25% market decline without any impact on your goals, the appropriate portfolio may contain 60-80% equities.

However, if your risk attitude measure indicates that any decline in excess of 10% would cause you cold sweats and sleepless nights, then the 60-80% equity portfolio is clearly not the right approach. Instead, you should be invested into a portfolio with a lower percentage of equities.

So, how can you address your full risk profile?

There are two keys:

First, you must obtain a true measure of your risk attitude.

This can be obtained by using a comprehensive risk profiling system. You won’t be able to achieve this by second guessing it yourself, as it’s highly unlikely you’ll know enough for the assessment to be successful. You should speak to your Financial Adviser/Planner and ask them what they’re using. One of the most comprehensive tools is provided by FinaMetrica. Their assessment contains 25 questions and your score (1-100) will be compared against the whole pool of those who have completed the questionnaire.

You should then make sure you interpret the score correctly and are able to act upon the information effectively.

Secondly, you should work through a process of financial planning to determine your true goals and objectives. This step is CRUCIAL as without it, how will you know what your tolerance is for risk capacity (i.e. how will you know how much loss you can absorb without it affecting the likelihood of you achieving your goals).

Once you know how much downside you can tolerate, you can then determine what the appropriate investment policy should be, using risk attitude as a constraint. This should lead you towards deciding what percentage of equities you want in your portfolio.

The alternative approach is that you remain invested in a higher percentage of equities, but prepare yourself that you may need to adjust your goals (retire later, spend less, spend more, etc) if the portfolio value falls too much. Of course, you may reach your goals sooner if the higher risk portfolio grows at a faster rate than the lower risk portfolio.

The Financial Tips Bottom Line

When you break it all down, it’s more than likely that you’re trying to achieve your goals and objectives in some form. And most people would rather try and reach their goals with the minimum amount of risk (yes, note I said some people - there’ll always be the risk takers amongst us).

ACTION POINT

The subject of investment risk should not be underestimated. If all you’ve done up to now is assess your risk on a scale of 1-10 (and believe me, this is VERY common), maybe it’s time to take a more comprehensive approach. After all, it’s only going to improve your understanding of your own risk tolerance and how much risk you can afford to take.

I have “some” money saved (not much) but I heard about stocks & investing money rather than just have sitting in my acct earning a couple of pennies interest a year… I have no idea whatsover about these things…Please explain like if I’m a 5 yr old.

Unlike oil, gas has not traditionally been a globally traded commodity. Most gas historically has moved by pipeline so it’s a regional market. So, for example, North America was one market connected by pipelines and Europe another. LNG is starting to change that because gas can be shipped anywhere in the world where prices are most favorable. So, for example, if gas prices are higher in the EU than the US, more LNG flows to Europe.

Is there a free web site with professional advices/information on how to build a good credit score and other personal finance advices ??