Protect Your Money: Conclusion

Conclusion

Once you've checked out the registration and record of your broker, adviser, or firm, there's more to do. For example, you should find out whether the brokerage firm and its clearing firm are members of the Securities Investor Protection Corporation (SIPC). SIPC provides limited customer protection if a brokerage firm becomes insolvent — although it does not insure against losses attributable to a decline in the market value of your securities. If you've placed your cash or securities in the hands of a non-SIPC member, you may not be eligible for SIPC coverage if the firm goes out of business.

Here are a few questions to get your started.

• What experience do you have, especially with people in my circumstances?
• Where did you go to school? What is your recent employment history?
• What licenses do you hold? Are you registered with the SEC, a state, or NASD?
• Are the firm, the clearing firm, and any other related companies that will do business with me members of SIPC?
• What products and services do you offer?
• Can you only recommend a limited number of products or services to me? If so, why?
• How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
• Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did?
• For registered investment advisers, will you send me a copy of both parts of your Form ADV?

For more questions and additional tips, be sure to read our publications, Ask Questions and Get the Facts on Saving and Investing. In addition, although the SEC cannot recommend or endorse any particular entity, there are a number of non-profit educational and consumer organizations that offer free tools to help investors check financial professionals. For example, AARP offers a Financial Adviser Questionnaire, and the Certified Financial Planner Board of Standards has a Checklist for Interviewing a Financial Planner.

http://www.sec.gov/investor/brokers.htm

Investment Advisers

Investment Advisers

People or firms that get paid to give advice about investing in securities generally must register with either the SEC or the state securities agency where they have their principal place of business. Investment advisers who manage $25 million or more in client assets generally must register with the SEC. If they manage less than $25 million, they generally must register with the state securities agency in the state where they have their principal place of business.

Some investment advisers employ investment adviser representatives, the people who actually work with clients. In most cases, these people must be licensed or registered with your state securities regulator to do business with you. So be sure to check them out with your state securities regulator.

To find out about advisers and whether they are properly registered, read their registration forms, called the "Form ADV." The Form ADV has two parts. Part 1 has information about the adviser's business and whether they've had problems with regulators or clients. Part 2 outlines the adviser's services, fees, and strategies. Before you hire an investment adviser, always ask for and carefully read both parts of the ADV.

You can view an adviser's most recent Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website. At present, the IAPD database contains Forms ADV only for investment adviser firms that register electronically using the Investment Adviser Registration Depository. In the future, the database will expand to encompass all registered investment advisers—individuals as well as firms—in every state.

You can also get copies of Form ADV for individual advisers and firms from the investment adviser, your state securities regulator, or the SEC, depending on the size of the adviser. You'll find contact information for your state securities regulator on the website of the North American Securities Administrators Association. If the SEC registers the investment adviser, you can get the Form ADV at a cost of 24 cents per page (plus postage) from the SEC.

Office of Public Reference
450 5th Street, NW, Room 1300
Washington, D.C. 20549-0102
phone: (202) 551-8090
fax: (202) 628-9001
e-mail: publicinfo@sec.gov

Because some investment advisers and their representatives are also brokers, you may want to check both the CRD and Form ADV.

Brokers and Brokerage Firms

Brokers and Brokerage Firms

The Central Registration Depository (or "CRD") is a computerized database that contains information about most brokers, their representatives, and the firms they work for. For instance, you can find out if brokers are properly licensed in your state and if they have had run-ins with regulators or received serious complaints from investors. You'll also find information about the brokers' educational backgrounds and where they've worked before their current jobs.

You can ask either your state securities regulator or NASD to provide you with information from the CRD. Your state securities regulator may provide more information from the CRD than NASD, especially when it comes to investor complaints, so you may want to check with them first. You'll find contact information for your state securities regulator on the website of the North American Securities Administrators Association. To contact NASD, either visit NASD's BrokerCheck website or call NASD's toll-free BrokerCheck hotline at (800) 289-9999.

Protect Your Money: Check Out Brokers and Advisers

Tips for Checking Out Brokers and Advisers

Federal or state securities laws require brokers, advisers, and their firms to be licensed or registered, and to make important information public. But it's up to you to find that information and use it to protect your investment dollars. The good news is that this information is easy to get, and one phone call or web search may save you from sending your money to a con artist, a bad broker, or disreputable firm.

Before you invest, make sure your brokers, investment advisers, and investment adviser representatives are licensed to sell securities. Always check and see if they or their firms have had run-ins with regulators or other investors.

This is very important, because if you do business with an unlicensed securities broker or a firm that later goes out of business, there may be no way for you to recover your money — even if an arbitrator or court rules in your favor.

Exchange Traded Funds

EXCHANGE TRADED FUNDS
They call ‘em ETFs.
There are hundreds of them.
The mutual funds don’t want you to find out about them.
Why?
Because they beat the socks off mutual funds in so many categories. The expense ratios of most mutual funds runs about 1.5% and many are much
higher. To buy a mutual fund you must wait until the end of the day to find out what price you paid. Many mutual funds have instituted redemption charges should you decide to sell out early. Early is whatever definition they want to apply and could be a year out, maybe more. The
fee at this time is about 2% for many funds.
Fund managers tell you it is to discourage overnight trading that adds to their expenses and therefore penalizes shareholders, but that
is not true.
The two most popular ETFs are SPY and QQQ. SPY is composed of the stocks in the SP500 Index with 500 stocks and it is priced every few minutes. It can be bought and sold any time during the day. The mutual funds who tell you it
is too expensive to price their funds more than once a day are either lying or stupid. ETFs prove that. And that same logic goes for short
term trading.
The investor buys and sells ETFs the same as any stock. The big brokerage companies charge
high commission whereas investors who place buy and sell orders with discount brokers will find commissions around $7.00 to $15.00 to buy or sell. That charge is for one ticket and not per
100 shares. The commission is the same for 100 shares or 1,000 or more shares. Big Wall Street firms charge many times this for the same
execution.
You can do research on ETFs just as you do on mutual funds. If you want to determine what stocks an ETF manger holds they will tell you in their prospectus. What you want to know is what Sector the ETF represents. The internal structure does not change often as does the stock ownership in a regular mutual fund.
At this time there is one drawback to buying and selling certain ETFs. Do not place Market Orders when buying and selling most ETFs unless
it trades more than 250,000 shares each day. As with stock there is a Bid and Offer Price. In thinly traded issues where the ETF has a volume
of less than 50,000 shares daily the Spread can be as high as 20 cents and many times more. In these issue it is suggested Limit Price Orders be entered. If the last trade was $20.50 the Bidcould be $20.40 and the Offer $20.60. A market buy order would be filled at $20.60 and a sell
order at $20.40. It is best to place a Limit Order at $20.50 and most of the time these will be executed at the Limit Order price. Stop Loss
Orders are also poorly executed in low volume ETFs.
Over the next few years as more and more investors discover these advantages they will be buying ETFs in preference to both load and no-load mutual funds.

Information about the author:

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step
method. Read the first chapter at
www.mutualfundmagic.com
and discover why he's the man that Wall Streetdoes not want you to know.

FOREX 101

For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.

FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.

Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.

How FOREX Works

Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.

Marginal Trading

Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.

EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)

When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

Investment Strategies: Technical Analysis and Fundamental Analysis

The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.

A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.

Make Money with Currency Trading on FOREX

FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.

Information about the Author:

Rich McIver is a contributing writer for The Forex Blog: Currency Trading News. Learn more at http://www.forexblog.org .

Exchange Trade Funds

EXCHANGE TRADED FUNDS

They call ‘em ETFs.
There are hundreds of them.
The mutual funds don’t want you to find out about them.
Why?
Because they beat the socks off mutual funds in so many categories. The expense ratios of most mutual funds runs about 1.5% and many are much
higher. To buy a mutual fund you must wait until the end of the day to find out what price you paid. Many mutual funds have instituted redemption charges should you decide to sell out early. Early is whatever definition they want to apply and could be a year out, maybe more. The
fee at this time is about 2% for many funds.
Fund managers tell you it is to discourage overnight trading that adds to their expenses and therefore penalizes shareholders, but that
is not true.
The two most popular ETFs are SPY and QQQ. SPY is composed of the stocks in the SP500 Index with 500 stocks and it is priced every few minutes. It can be bought and sold any time during the day. The mutual funds who tell you it
is too expensive to price their funds more than once a day are either lying or stupid. ETFs prove that. And that same logic goes for short
term trading.
The investor buys and sells ETFs the same as any stock. The big brokerage companies charge
high commission whereas investors who place buy and sell orders with discount brokers will find commissions around $7.00 to $15.00 to buy or sell. That charge is for one ticket and not per
100 shares. The commission is the same for 100 shares or 1,000 or more shares. Big Wall Street firms charge many times this for the same
execution.
You can do research on ETFs just as you do on mutual funds. If you want to determine what stocks an ETF manger holds they will tell you in their prospectus. What you want to know is what Sector the ETF represents. The internal structure does not change often as does the stock ownership in a regular mutual fund.
At this time there is one drawback to buying and selling certain ETFs. Do not place Market Orders when buying and selling most ETFs unless
it trades more than 250,000 shares each day. As with stock there is a Bid and Offer Price. In thinly traded issues where the ETF has a volume
of less than 50,000 shares daily the Spread can be as high as 20 cents and many times more. In these issue it is suggested Limit Price Orders be entered. If the last trade was $20.50 the Bidcould be $20.40 and the Offer $20.60. A market buy order would be filled at $20.60 and a sell
order at $20.40. It is best to place a Limit Order at $20.50 and most of the time these will be executed at the Limit Order price. Stop Loss
Orders are also poorly executed in low volume ETFs.
Over the next few years as more and more investors discover these advantages they will be buying ETFs in preference to both load and no-load mutual funds.

Information about the Author:

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step
method. Read the first chapter at
www.mutualfundmagic.com
and discover why he's the man that Wall Streetdoes not want you to know.

Investing in Stock Market

• Diversify , Diversify and Diversify.

• Follow the "Dollar Cost Averaging" technique.

• Do not follow the herd. Think for yourself.

• Never over pay for any asset you acquire.

• Invest in what you know.

How long it takes to double your money?

Let us say, you get an annual return of 6%. Well, you may be thinking that 6% is a nice return. But it takes 12 years to double your money at that rate.

The formula is this: Divide 72 with your rate of return. This gives the number of years to double your money. At a return of 8% it takes only 9 years (72 divided by 8) to double your money.

So a measly 2% difference makes a difference of 3 long years to double your money.

What is the Beta of a stock?

The Beta of a stock is the volatility or "risky ness" of that stock. It indicated how widely the share price is swinging. This value can be obtained from a source such as the Yahoo! Finance.

For mature and stable companies the beta would be close to 1. An example is the Wal-Mart stock with Beta less than 1 . On the other hand, It would be high for Internet and other high technology companies. The online book seller Amazon (AMZN) has a beta of 2.6

Higher the beta, higher the risk. To justify the extra risk, you should expect a higher return on that stock.

How much extra return would compensate the extra risk?

It is given by this formula:

Required Rate =

T-Bonds Rate + (S&P Returns - Treasury Bond Interest) * BETA

So the required rate of return for AMZN can be calculated as:

4.34 + (7 - 4.34) * 2.6 = 4.34 + 2.66 * 2.6 = 4.34 + 6.76

or around 12%

So, as of December 2003, you should buy AMZN stock only if you believe that the stock is going to return you 12% annually.

Also Check out these great information:

The ABC's of Stock Trading Success

The Fundamentals of Mutual Funds

Liquidity Investors in "open-end" mutual funds can cash in all, or some, of their shares at any time and receive the current value of their investments, which may be more or less than their original cost. Investors in such funds do not need to find buyers: the funds are always ready to buy back (redeem) their shares. Current per-share values are calculated daily, based on the market value of the fund’s underlying securities. These values change as the values of the underlying securities move up or down, and as the funds change their portfolios by buying new securities or selling others. Investors can find the per-share calculations (known as "net asset values") published each day in the financial sections of most major newspapers.

Investors in "closed-end" mutual funds, on the other hand, can cash in their shares only by finding buyers in the "open market." The term "open market" refers to stock exchanges and the over-the-counter stock market.

Diversification By purchasing many different securities with the pool of shareholders dollars, a mutual fund "diversifies" its holdings. A diversified portfolio reduces risk should some investments turn "sour," and increases the chance of choosing potential "winners." The average investor would find it difficult to amass a portfolio as diversified as those of most mutual funds.

Choice A mutual-fund investor has more options than ever before—stock, bond, and money-market funds—to fit investment strategies from the most conservative to the most speculative. In addition, specialized funds are available—for instance, those that invest only in certain geographic regions or in certain industries (such as health care, high-technology, or energy). There are also funds that have adopted certain social objectives or that follow specific investment philosophies. However, such specialization may offset some of the advantages of diversification found in other mutual-fund portfolios.

Professional Management The money accumulated in a mutual fund is managed by professionals who decide where and when to invest it. These money managers make decisions based on research into the financial performance of individual companies and specific securities issues, taking into account general economic and market trends. After analyzing such data, the managers try to choose investments that best match the fund’s objectives. As economic conditions change, the fund’s managers may adjust the mix of investments to adopt either a more aggressive or a more defensive posture corresponding to the investment objectives of the fund.

Flexibility While some investors pick a single mutual fund and stick with it, others choose a "family" of funds—several different funds which are available "under one roof." In a family of mutual funds, investors can transfer portions of their investment from one fund to another as their own needs or financial circumstances change. In some fund families, investors can do so without additional sales charges.

Growth The first U.S. mutual funds were organized during the 1920’s. By the early 1990’s, mutual funds were managing more than 54 million shareholder accounts valued at over $900 billion. Individual fund performance varies, but on average, and over the long run, the growth of stock funds has paralleled the growth of the U.S. economy. Similarly, the performances of other types of funds reflect the long-term movements of more specialized markets. For instance, money-market funds reflect activity in the short-term money-market; bond funds, the bond market; tax-exempt funds, the municipal bond market, etc.

Regulation & Disclosure Mutual funds are regulated under four federal laws, as well as the Wisconsin Uniform Securities Law, all of which are designed to protect investors who, nevertheless, assume the risks inherent in investing in securities. The Investment Company Act of 1940 requires all funds to register with the U.S. Securities and Exchange Commission and to meet certain operating standards; the Securities Act of 1933 mandates specific disclosures; the Securities and Exchange Act of 1934 sets out anti-fraud rules covering the purchase and sale of fund shares; and the Investment Advisors Act of 1940 regulates advisors to the funds. The Wisconsin law regulates the offer and sale of mutual fund shares to persons in Wisconsin.

These laws require all funds to provide closed-end" investment companies because it is now commonly used to include both. "Open-end" and "closed-end" funds are defined elsewhere in this brochure. a "prospectus" to every potential investor. This document, which should be read before making such an investment, describes in detail the fund, its shares, and its investment objectives. It also outlines all fees.

Investors may also request from a mutual fund a copy of its Statement of Additional Information, which discusses in even more detail the investment policy and the securities that make up the fund’s portfolio.

All mutual funds are also required to provide their shareholders with periodic reports on what the fund is doing and what is happening to its investments. In addition, investors must be sent a yearly statement detailing the federal tax status of their earnings from the fund.

Accessibility Mutual-fund shares are easy to buy. For those who prefer to make investment decisions themselves, mutual funds are as close as the telephone. Those who would like help in choosing a fund can draw upon a wide variety of sources. For instance, many funds sell their shares through stock brokerage firms and their registered representatives, and through those financial planners or insurance agents who are also licensed as securities agents. These representatives can help investors to analyze their financial needs and objectives, and they can recommend appropriate funds. Other funds maintain their own sales forces. They can be reached through toll-free telephone numbers. Investors can write or call these funds and a sales agent will contact them.

Sales Charges & Fees Investors may encounter three kinds of charges and fees when investing in mutual funds.

Many funds charge a sales commission, or "load," usually expressed as a percent of the total purchase price of the fund shares. Sometimes the load charged by open-end funds is deferred until the investor redeems (or "cashes in") his or her shares; this is referred to as a "back-end" or "rear-end" load or a "deferred sales charge."

Some funds, known as "no-loads," sell their shares directly to the public. No-loads advertise in magazines and newspapers, and potential investors can write or call for additional information. Because no sales agents are involved, these funds do not charge sales commissions.

Investors will also pay fees for the operation of the fund. For example, most funds contract with an investment adviser for investment advice and other management services. The company providing these services receives a fee based upon, and paid from, the fund’s total assets.

In addition, some funds charge what are known as 12b-1 fees, named after a section of the rules under the Investment Company Act of 1940. These fees, which range from ¾ of a percent to 1% or more of the total of net assets of the fund, cover promotional and distribution expenses. Such fees, as well as administrative expenses, brokerage commissions, and taxes, add to the expenses deducted from fund income before dividends are distributed to shareholders. Prospective investors should read all fee and expense information in a prospectus and compare it to that of similar funds.

Whether investing in load or no-load funds, it is up to individuals to do the "homework" necessary to determine what fees are being charged, as well as to select the best mutual fund for their needs.

Mutual Funds Reading Price Quotations

Reading Price Quotations The price of most mutual fund shares can be found in many newspapers, including The Wall Street Journal. The listings for closed-end funds are contained in the stock quotation section. The listings for open-end funds are separate, and are organized by the name of the fund family as illustrated in the accompanying chart of fictitious companies. An explanation of how to read the chart follows.

1 The first column is the abbreviated name of the fund. Several funds listed under a single heading indicate a family of funds.

2 The second column is the Net Asset Value (NAV) per share as of the close of the preceding business day. In some newspapers, the NAV is identified as the "bid price"—the amount (per share) you would receive if you had redeemed your shares that day (less any deferred sales charges). Each mutual fund determines its net asset value every business day by dividing the market value of its total assets, less liabilities, buy the number of shares owned by the investors. On any given day, you can determine the value of your holdings by multiplying the NAV by the number of shares you own.

3 The third column is the offering price or, in some papers, the "ask price"—the price you would have paid if you had purchased shares that day. The offering price is the NAV plus any sales charges. If there are no sales charges, and "NL" for "no-load" appears in this column, and the offering price is the same as the NAV. To figure the sales charge percentage, divide the difference between the NAV and the offering price by the offering price. Here, for instance, the sales charge is 7.2% ($14.52-$13.47=$1.05 divided by $14.52=0.072 or 7.2%).

4 The fourth column shows the change, if any, in net asset value from the preceding quotation—in other words, the change over the most recent one-day trading period. This fund, for example, gained eight cents per share.

Other abbreviations in these columns indicate important information about specific funds. The abbreviations are usually explained in a "key" at the beginning or end of the columns.

Mutual Funds

A mutual fund is an investment company that makes investments on behalf of investors sharing common financial goals. Traditionally, the term "mutual fund" has referred to "open-end" investment companies. In this brochure, however, the term will be used to refer to both "open-end" are defined elsewhere in this brochure.

A mutual fund pools the money of many people having similar investment objectives. Professional money managers employed by the fund use the pool of money to buy a wide range of stocks, bonds or money-market instruments which, in the mangers’ judgment, will help the investors to achieve their objectives. These securities form the underlying "portfolio" of the fund. The fund earns money on the securities and distributes the earnings to the investors as dividends or, if the securities are sold for a profit, as capital gains. Alternatively, investors may elect to have their dividends and capital gains automatically reinvested in additional fund shares.

An investor in a mutual fund is actually buying shares of the fund. Each share represents undivided, proportional ownership in all of the fund’s underlying securities. Dividends and capital gains produced by these securities are paid out in proportion to the number of fund shares the investor owns. Thus, shareholders who invest a few hundred dollars get the same investment return per dollar as do those who invest hundreds of thousands of dollars. For tax purposes, dividends and capital gains are treated substantially as if the investors had bought and sold the underlying securities themselves.

In today’s complex financial marketplace, mutual funds offer investors a simpler, more convenient, and less time-consuming method of investing in a portfolio of securities than if investors were to trade them individually. Through mutual funds, investors delegate investment decisions to the funds’ managers—decisions such as which securities to buy, when to buy them, and when to sell them. Also, investors in mutual funds participate in a broader diversity of securities than average investors could by investing on their own. This diversity can reduce their risk.

Mutual fund investors should select a fund which has an investment objective that closely matches their own. For example, they may want to maximize their current income, maximize the long-term growth of their capital, or achieve some combination of growth and income.

Cash Balance Pension Plans

What is a cash balance plan? There are two general types of pension plans-Defined Benefit Plans and Defined Contribution Plans. In general, defined benefit plans provide a specific benefit at retirement for each eligible employee, while defined contribution plans specify the amount of contributions to be made by the employer toward an employee’s retirement account. In a defined contribution plan, the actual amount of retirement benefits provided to an employee depends on the amount of the contributions as well as the gains or losses of the account. A cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance.

How do cash balance plans work? In a typical cash balance plan, a participant's account is credited each year with a pay credit (such as 5 percent of compensation from his or her employer) and an interest credit (either a fixed rate or a variable rate that is linked to an index such as the one-year Treasury bill rate). Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. Thus, the investment risks and rewards on plan assets are borne solely by the employer. When a participant becomes entitled to receive benefits under a cash balance plan, the benefits that are received are defined in terms of an account balance. For example, assume that a participant has an account balance of $100,000 when he or she reaches age 65. If the participant decides to retire at that time, he or she would have the right to an annuity. Such an annuity might be approximately $10,000 per year for life. In many cash balance plans, however, the participant could instead choose (with consent from his or her spouse) to take a lump sum benefit equal to the $100,000 account balance. In addition to generally permitting participants to take their benefits as lump sum benefits at retirement, cash balance plans often permit vested participants to choose (with consent from their spouses) to receive their accrued benefits in lump sums if they terminate employment prior to retirement age. Traditional defined benefit pension plans do not offer this feature as frequently. For more about vesting and distribution of benefits see What You Should Know About Your Pension Rights. If a participant receives a lump sum distribution, that distribution generally can be rolled over into an Individual Retirement Account (IRA) or to another employer's plan if that plan accepts rollovers. See IRS Publication 575 Pension and Annuity Income: Rollovers or Publication 590 Individual Retirement Arrangements (IRAs): Traditional IRAs - Can I Move Retirement Plan Assets? for more information. The benefits in most cash balance plans, as in most traditional defined benefit plans, are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation.

Investing 101

Every day, more people are investing their money. Some make millions, but many lose their life savings by making bad decisions. In today's volatile market, stock trading is especially risky.

TERMS TO KNOW

• Certificate of Deposit – A low-risk investment you make at a bank for a fixed period of time. Interest is much higher than a passbook savings account, but you will be penalized if you withdraw your money before the term of the deposit is completed.
• Stock – A share of ownership in a corporation.
• Dividend – A share of a company's profits paid to those who hold stock in that company.
• Bond – A loan made by an investor to the government or to a corporation, which is paid back with interest at a fixed time. Bonds are generally lower risk investments than stocks.
• Mutual funds – A portfolio of stocks, bonds, cash, and other investments. These investments are bought and sold by a professional manager, so the risk is generally lower than that of an individual stock. In addition, mutual funds are categorized according to how risky they are and how quickly they grow.
• Broker – A professional who buys and sells stocks for you.
• Commission – The amount of money you pay to a broker to carry out a transaction.
• Day-trading – The risky and difficult practice of buying and selling stock constantly on the basis of small, short-term gains and losses.

Here are some suggestions from the Investing Online Resource Center on how to be a smart consumer:

• Start small. There is no sense in throwing all your money in one stock early in life. Rather than looking for fast money, try to make small gains. When you get a little more experience, move up to higher profile stock or mutual funds.
• Diversify. That is, spread your money out. Try not to put all your money in one market. If, for example, the technology sector takes big losses, you will be protected by having some money in another sector, such as retail or manufacturing.
• Don't bail out on mutual funds. Most mutual funds are supposed to generate growth over time and thus are geared toward long-term investors, not day traders.
• Information is power. You can never have too much information about a company that you are interested in. If you invest in a company but don't know what they're doing, you could lose a major part of your investment. Some Internet sites and online brokers have research available for you; you can also check out the company's website.
• Don't forget about commissions. The fees that you pay to your broker can eat up a significant portion of your returns.

Offshore investing: spreading risk helps sleep

The world’s economies still dance to different tunes and have different boom and bust cycles that tend to offset each other, even though the differences are getting smaller. As a result, international stocks can provide diversification for a portfolio heavy in U.S. stocks.

Between June 1997 and October 1998, for example, Japan’s Nikkei index lost almost 40%, but European markets did well due to continental economic union. U.S.-style corporate restructurings also began to pay off. One region’s success balanced the other’s failure to get its financial house in order.

There has been less divergence between regions more recently. Even so, we suggest the prudent investor cannot afford to ignore overseas markets. They now represent some 44% of world market capitalization, up from 25% about 30 years ago. International stocks can provide solid diversification for a portfolio heavily invested in U.S. equities.

Exchange rates add an extra flavor to foreign investments. Fluctuations can add to or detract from profits or losses. Institutional investors and others pay significant attention to this factor. When the U.S. dollar was appreciating against the Japanese yen, billions of dollars flowed out of that country and into U.S. stocks and bonds, worsening the economic crisis in Japan. That money started to flow back out when the currency valuation began to reverse. Americans saw their investments in Japan appreciate then, even when the stocks remained in neutral.

Funds that invest overseas fall into four basic categories: world, international, emerging market and country specific. Diversification is the key to containing risk. And, yes, a good fund manager helps, too. Research is scarce and foreign companies, other than some in Canada, are difficult for individual investors to track on their own.

World funds are the most diverse of the four categories. They are, as the name suggests, able to invest anywhere in the world, including the U.S. As a result, they don’t offer as much diversification as a good international fund. Some have 60% or more of their holdings in the U.S.

World funds tend to be the safest foreign stock investments, but only because they typically lean on better-known U.S. stocks. Just examine the portfolio carefully to make sure they don’t mimic your U.S. holdings. Funds invested in small- to medium-sized companies are unlikely to duplicate the foreign investment component of domestic funds.

Foreign funds, on the other hand, invest mostly outside the U.S. Whether they are relatively safe or risky depends on the countries in which they invest.

Advice: choose a fund with the best balance between countries and regions, or be very sure the manager has a good record of moving in and out of regions profitably.

Country-specific funds invest in a single country or region. This type of concentration makes them particularly volatile – especially those that invest in emerging markets. If you pick the right country at the right time, the returns can be substantial. Get it wrong and look for your head to be handed to you on a plate. These funds are for the most sophisticate investors only.

Emerging-markets funds are the most volatile, invested as they are in undeveloped regions subject to political upheaval, currency risk and corruption. These economies, such as Argentina’s in 2002, can collapse; governments can fall or be overthrown. On the other hand, these regions have enormous growth potential. Adding a small sprinkling of emerging markets exposure to your portfolio could serve to lessen downturns in U.S. markets – but they are for long-term investors only, those who can wait for fallen markets to recover.

As always, of course, the biggest risks carry the greatest potential for outstanding rewards; you simply require nerves of steel. The best course is to diversify well and sleep soundly at night.

Information on the Author:

Written & published by Murray Priestley, Managing Partner of Portofino Asset Management, private investment managers and publishers of the Portofino Report. http://www.portofinoasset.com/

Top 10 Ways to Bear Market Proof Your Relationships

Do you want to keep your intimate relationships in a “Bull Market,” and out of a “Bear Market”?

We hear stories daily about individuals or organizations that thrive during the bull market, slip in the bear market when stocks drop, and end up bankrupt. Others suffer a loss, but plan for a turnaround and don’t experience devastation.

How do they weather the bear market? They manage their portfolio wisely.

Close, personal relationships can follow a similar path. Many start out
in a bull market, slide into a bear market, and then go bankrupt. Like investors, you can weather your relationship ups and downs if you manage your relationship portfolio wisely. Apply these ten rules of wise investing and avoid relationship bankruptcy.

1.LIST ASSETS AND LIABILITIES

If you want great relationships, first know who you are and what you want. What are your values, beliefs. If you do not know what you believe, you may get off track.

2.DETERMINE GOALS.

Where are you and where do you want to go? What are your personal and relational goals now, and in the future? If you do not know what you want over the long term, you may get off track.

3.READ THE PROSPECTUS.

4.DECIDE WHICH INVESTMENT BEST FITS YOUR GOALS.

With investments you consider whether you want short term, long term, high risk, or low risk investments. You decide whether you can reach your goals with stocks, mutual funds, or money market accounts.

What do you need, want, and require in a close relationship? What kind of relationships will support your life goals? Imagine you love the country and want a cabin in the woods some day. You invite loss of your dreams if you continue to invest emotionally in someone who loves the city lights and hates bugs!

Where will you find compatible relationships or life partner who shares your wishes, hopes and dreams? Probably not in the local bar, unless that is your life goal. Do what you love to do, and find friendships in those places.

5. DON’T THROW GOOD MONEY AFTER BAD.

If it drops 8% or more sell.

If you are single, don’t get hooked into a relationship that is not working. Don’t continue to invest emotional capital and stay for convenience. I often see individuals who complain about how unfulfilling their relationship feels. He has kids from a prior marriage. She can’t stand them. Or, she wants a child someday. He insists he will never have children. They fight over differences, but they insist on trying to make it work. Redo steps one and two. Diversify.

If you are married, especially if you have children, the relationship becomes more than one investment. It becomes a complete portfolio. Identify and appreciate the investments that bring in returns. Identify asset drains and find solutions. Don’t stick your head in the sand and hope your portfolio will fix itself. Don’t wait until you lose all your assets. If you need help, get it.

6.START EARLY.

To build a successful relationship portfolio, begin to invest emotional capital immediately.

7.INVEST OFTEN.

Continue daily. Invest in relationship skills education. Make frequent emotional investments including affection, support, fun and laughter. Don’t just invest when the market is up and things go well. Invest when the market slips a bit, when the relationship feels distant, or one of you experiences a bad day.

8. STICK WITH SOLID INVESTMENTS OVER THE LONG HAUL.

If you take the time to choose a life partner wisely, your relationship portfolio should bring in returns and prove solid over the long haul. You will choose a life partner who shares your values, hopes and dreams. You will not feel pressure to compromise your values or desires or spend hours fighting over deal-breakers.

9.WATCH YOUR PORTFOLIO AND MAKE ADJUSTMENTS WHEN NEEDED.

Keep an eye on your portfolio and make adjustments when needed.

10.DON’T GET DISTRACTED BY NEW OPTIONS THAT PROMIST SHORT-TERM REWARDS.

Learn to weather the ups and downs and stick with a good investment for the long-term.

You lose vast amounts of emotional and financial capital when you do not choose wisely in the first place.

You may not control the markets. But you can manage your personal and financial investments. Apply these five rules and create a strong relationship portfolio that pays dividends in a “Bull Market” and in a “Bear Market.”

Information about the Author:

©Pat Swan, M.S., Life and Relationship Coach, http://www.RelationshipSkillville.com . Pat is a speaker, coach, and author of “Watch Out! Your Relationships Can Be Hazardous to Your Health,” available at http:// www.StopRelationshipStress.com . Stop relationship stress and discover secret remedies for better health. Mailto:pat@patswan.com . PH: 262-642-5706.

No really stocks or investing, but I thought it was important!

We fell that this information is important if your wanting to be successful in whatever you do! Even if it's investing your money, career, jobs, stocks, whatever you want to put your time and money in. We felt this was important enough to share the good information!

5 WAYS TO FEEL SUPER-OPTIMISTIC: Tips for Your Health, Wealth, & Career

Optimism is the hidden key to your personal and business success. Optimists possess a clear vision of an exciting life, confidently work on goals to achieve their vision, and take self-responsibility. In contrast, pessimists have no clear vision of a fantastic life, and they love to complain, blame, and moan.

How can you become more optimistic?

I will divulge five little-known “secrets” to help you immediately feel upbeat, confident, and optimistic.

Research: Why Optimism Is Good for You
Tons of research prove that optimists do vastly better than pessimists in their
1. Health
2. Wealth
3. Career success

Health.
A growing body of "psychoneuroimmunology” medical research links how a person’s emotions affect his or her health. Some intriguing findings: Optimistic people are less likely to get sick than pessimistic or depressed people. This includes illnesses ranging from common colds to cancer. Optimistic people also get well faster than pessimists.

Wealth.
A fascinating study found that self-made millionaires worry much less than people who earn as much money but have not achieved millionaire status. What is the connection between being optimistic and making yourself into a millionaire? Optimists are much more likely than pessimists to make a goal of achieving millionaire status. They also keep plugging away at being frugal, investing wisely and working hard to turn financial dreams into reality. In contrast, pessimists are less likely to set net-worth goals or consistently take actions to become millionaires.

Career Success.

Many companies use our firm’s Abilities & Behavior Forecaster™ pre-employment tests when choosing applicants. To start, a company has high-achievers take the test. Also, underachievers may take the test. Then, we identify how the high-achievers score, so the company can prefer hiring applicants who score like its profitable, productive employees. Intriguing finding: One of the Forecaster™ test’s 18 scales is Optimism. Typically, high-achievers typically score high on the Optimism test scale, while underachievers score moderate or low on Optimism. This repeated finding verifies that optimists achieve greater career success than pessimists.

So, how can you boost your optimism to achieve greater health, wealth, and career success?

Here are five immediately useful techniques. Each takes only one minute to do, so you can start fast and get results today.

1st Technique: Straight Posture & Big Steps

Optimistic people use straight posture, walk fast, and take big steps. Pessimistic people slouch, walk slowly, and use small steps. Imagine seeing someone walking with his or her head held high, shoulders back, walking fairly fast with big steps. That person exudes confidence. In contrast, a person whose head and shoulders slouch and walks with slow, small steps reeks a gloomy mood.

Why is a straight posture crucial? Because before you can straighten out your head, you first need to straighten up your body!

2nd Technique: Cheerful Voice

A lightning quick way to feel upbeat is to use a cheerful voice. Think of a time when you felt annoyed. Then, your phone rang. You answered it, and your caller was someone you wanted to impress. I bet you spoke in a cheerful voice so you would impress your caller. Result: You immediately started feeling your mood lift.
Why is a cheerful voice an incredibly powerful optimism tool? Psychological research proved that a person emotionally feels the emotion he or she is acting at the moment. So, if you act cheerful, you feel cheerful. And a cheerful voice is the fastest way to act optimistic.

3rd Technique: Use Upbeat Words

You can use types of words: upsetting and upbeat. Pessimists relish using upsetting words, while optimists excel at using upbeat words. Examples:

Upsetting Words
Problem
Tired
Depressed

Upbeat Words
Opportunity
Recharging
Bumming

For example, a pessimist says, “I have a problem.” In contrast, an optimist would say, “I have an opportunity to do better next time!”

4th Technique: Use Upbeat Attitudes

I find the chief way to become an optimist simply is to focus on solutions – and not focus on problems. Every time a difficulty pops up, immediately create solutions and put them into action. Examples:

Upsetting Attitudes
Focus on problems
Dwelling on weaknesses
Thinking about financial woes

Upbeat Attitudes
Focus on solutions
Dwelling on strengths
Thinking about achieving prosperity

Why is a solution-focus ultra-important? Because you can only have one thought in your head at a time. So, if you focus on solutions, you cannot wallow in problems, complaining, blaming, or moaning.

5th Technique: Be a Magnificent Role Model

Remember a time you were a role model for someone. As you helped that person, you also helped yourself. As the proverb goes: “What goes around, comes around.” If you are a delightfully optimistic role model for employees, co-workers, family and friends, then you simultaneously make yourself optimistic.

How do you do this? Make sure people see you using straight posture, taking big steps, speaking in a cheerful voice, using upbeat words and focusing on solutions.

Anyone can become an optimist. When people use these five techniques, they invariably tell me they feel heavy burdens lift off their shoulders. They feel positive, upbeat, and confident. You only need a few minutes to put these tips into action. They can be your key to enhanced health, wealth, and career success.

© Copyright 2005 Maryann Troiani & Michael Mercer, Ph.D.

Information about the Author:

Maryann Troiani, Psy.D., is a speaker, media personality & consultant with The Mercer Group, Inc., in Barrington, Illinois. She delivers speeches atmeetings and conferences. She co-authored the book, “SPONTANEOUS OPTIMISM: Proven Strategies for Health, Prosperity & Happiness”. Dr. Troiani has tele-coached many people across the country. You can email her at drmary@mercersystems.com or phone her at (847) 382-0690.

The Steps To Financial Success

Even in the "rich" developed nations of the world (most Western countries)
99 per cent of the population do not achieve financial success;
because they lack the real commitment to achieve financial independence.
I believe the reason for this is that most people are too busy earning a living
to survive to really THINK about how to make "big money".

Really use the unlimited power of your creative imagination to think about
HOW you can create ultimate financial independance for yourself.
However, be aware it takes a great commitment in terms of time, money, energy
and patience to achieve wealth.
So make that effort and invest in yourself first..

THE THREE LEGS TO GROWING WEALTHY
Like the three legs of a stool. All are equally important in
ensuring financial independence.

N.B: The key:

MAKING MONEY + SAVING IT + INVESTING WISELY =

FINANCIAL SUCCESS

Have a plan, then put it into action.

"People don't plan to fail, but fail to plan."

Always remember,
* True prosperity is created from within. All prosperity is created in the mind.
You are only as wealthy, happy or as prosperous as what you feel.
and what you make up your mind to be. And money is not everything.
For me, health, family and happiness are far far more important considerations.

Aim high, dream high.

If you aim for the tree tops, you might not get off the ground...

so why not aim for the stars.

Good luck

Craig Lock*

* Craig Lock has been involved in the personal finance field for too many years.
Craig has studied and written extensively on money matters:
articles, brochures for financial institutions and books.
He is now an author of five published books...
with another twelve being published and marketed on the Internet.

For valuable money information to help you make and save your hard-earned money,
get out of debt, learn how to invest, retire early, and take control of your finances, see:

The Million Dollar Money Tree
http://www.nzenterprise.com/money/

THE EVERYPERSON'S GUIDE TO SIMPLE MONEY MANAGEMENT
Brochure available for $5
e-mail clock@xtra.co.nz

If you have knowledge, let others light their candle at it"
- Margaret Fuller

Best Wishes from the First City to see the Sun in "Godzone"
("little" New Zealand)

Craig Lock

Information about the Author:

Craig Lock
My various books* are available from:
http://www.nzenterprise.com/writer/books.html
http://www.novelty-gift.com/
and
http://www.nospine.net/
(just type in Craig Lock under search for 12 of my books)

When You Need Some Extra Cash--A Guide to Finding the Right Loan

Almost every day, you are involved in some type of financial transaction requiring an educated decision. And we all need extra cash from time to time. Maybe you need extra funds to purchase your "dream" home, or a more reliable vehicle. Perhaps you want to provide that "fairy book" wedding for your only daughter, or take that once-in-a lifetime paradise vacation.

Sometimes it is simply not practical to make a purchase by saving up the cash, and that's where a loan can help. Nearly everyone needs to borrow at some time in their life--to finance a house, buy a new automobile or send the kids to college. But with so many different types of loans from so many different financial institutions, how do you decide which is best for you?

When you set out to borrow money you are barraged with the jargon of the banking industry. Revolving loans, points, adjustable rates, bridge loans, beacon scores, amortization and on and on and on. It is important to understand these terms in order to get your best possible deal at the lowest interest rates that are currently available. Take some time, research the terminology and become a smart money shopper.

Not many years ago, banks were the only "boys on the block" when it came time to obtain a loan. You got dressed in your finest outfit, got a haircut, and shined your shoes in advance of your meeting with the bank manager. Today, loan providers are everywhere. Supermarkets, credit unions, television ads, daily credit card offers in the mail, finance companies, and the payday loan building on the corner. Where do you start? Obviously the first question--how much money do I need?--must be answered. If you are shopping for a home, for example, you will not be using a credit card. Here is where your neighborhood bank can help. And even Uncle Sam--if you get a Veteran's Administration (VA) or a Federal Housing Administration (FHA) loan.

Other types of loans available include: car loans, business loans, debt consolidation loans, home improvement loans, home equity loans, refinance loans, personal loans, payday loans, and bridging loans (used to "bridge" a short-term financial gap when cash is needed for a special project). There are nearly as many loan types available as there are reasons to borrow money. Approval for loans is based upon a number of factors, such as age, employment, income, and credit rating.

Even if you have a poor credit rating or bad credit history, you can still find a range of "bad credit" personal loans, although the interest rates are generally higher than on standard loans. Beware, however, of the "payday" loans. Sometimes called cash advance loans, check advance loans, deferred deposit check loans or post-dated check loans, however check cashers or finance companies refer to them--they are EXPENSIVE.

Usually, a borrower writes a personal check payable to the lender for the amount needed plus a fee. Let's say you need a quick $100 and write a check to the lender for $115. You receive $100 and the lender agrees not to deposit your check until your pay day arrives three days in the future. It cost you $15 to borrow $100 for three days! You don't even want to know the Annual Percentage Rate (APR)on that loan.

When you need credit, shop carefully. Compare offers and institutions. Look for loans with the lowest APR. Compare the total finance charges, which include fees, interest and of types of credit costs. By going online you can obtain a multitude of loan options including: interest rates, length of the loan and the actual total monthly payment cost.

Learn the lending terminology, understand the different types of loans that are readily available and then make a choice that is best for your unique situation. In the borrowing world, there is no "one-size-fits all" solution. Your credit history, ability to repay the loan in a timely fashion, and the purpose of the loan should all be thoroughly considered.


Information on the Author:

Larry Denton is a retired history teacher having taught 33 years at Hobson High in Hobson, Montana. He is currently Vice President of Elfin Enterprises, an Internet business providing useful information and valuable resources on a variety of timely topics. For a bank vault full of information, resources and suggestions about loans, visit http://www.LoanFolks.com

An Economical Retirement Investment Plan

An Economical Retirement Investment Plan

The practice of economy, directed toward a retirement investment plan in the stock market, is in itself a source of great revenue. It is the art of making the most out of every stock market investment, with the definite purpose or goal being to provide a life that is fully independent of monetary
concerns.

But the economy of making each investment in the stock market does come with a price. It will require self-denial (the money invested is not spent for goods or services). Economy and
self-denial, I’m afraid go hand-in-hand. To truly benefit from a stock market investment, a savings plan should be adopted and a systematic approach of dollar-cost-averaging (buying the same stock at different prices) should take place; and when
the purchase should take place, economically clearly defined.

How to use your investment dollars will require forethought, patience and wisdom, for they are the pillars of economy.

Before making any stock market investments know exactly what you expect from those investments. Have the patience for the investments to fulfill the expectation, and the wisdom to know
exactly how the investments will fulfill the expectation.

A forethought example:

I want every stock market investment to supply me with ever-increasing cash for the rest of my life. I want my
retirement investment portfolio income to grow until the income from my portfolio replaces the income from my job when I retire.

A patience example:

I will make quarterly investments into each security owned to raise the cash dividend supplied by each stock market
investment. I will start by owning three companies which will supply me with cash dividends every month of the year. I will also add the cash dividends to the quarterly investments. I will build this stock market retirement investment plan up until I own 500 shares of all three companies. Once 500 shares of each company are owned, I will begin investing in three
more companies. Owning six companies will provide ever-increasing cash dividends twice a month, until I retire. My patience will eventually acquire 12 companies, providing me
with income every week of the year.

A wisdom example:

I will only purchase those companies that have a historical record of raising their dividend each year. I know that a low 2% dividend paying stock is not necessarily bad. It means the company in question is a growth stock, using most of its profits to expand. A growth stock makes up for the lower dividend yield by faster stock appreciation in the marketplace
(however, the company will still show a historical record of raising their dividend each year). I will diversify into 3 stocks, right from the get-go, even if it means I start off with as little as 5 shares of each company. I will not pay commission-fees. I will place emphasis on increasing the cash
income paid to me from all my stock market retirement investments.

I will also: “Put less emphasis on increasing this week’s pay, more emphasis on increasing my earning power by the right reading.” - Donald Laird

For some right reading try the PREFACE from the book ‘The Stockopoly Plan - Investing for Retirement.’ Visit:
http://www.thestockopolyplan.com

Information about the Author:

Charles M. O’Melia is an individual investor with almost 40 years of experience and passion for the stock market. The author of the book The Stockopoly Plan – Investing for Retirement; publishedby American-Book Publishing. You can invest in the book at http://www.pdbookstore.com/comfiles/pages/CharlesMOMelia.shtml

8 Penny Stocks To Avoid

There are many good penny stock investments available, which could turn a small amount of capital into a small fortune very quickly. However, to discover these you need to know what to look for and what to avoid. When searching for that one big payoff, steer clear of the following examples.

The Phone Salesman - Anyone who is attempting to sell you investments over the phone should be considered an enemy. They have high-pressure sales tactics, and effective, believable arguments. However, they are not doing you any favors, no matter how good they make an investment sound.

They are operating in their best interest to dump over-the-counter stock on you, and the money you pay in will go into their own pockets, or the pockets of their company.

There has never been a need for good companies that are going places to resort to these type of tactics, but there has always been a need for poor, sinking, or shady companies to do so. If you choose to ignore this advice you deserve what happens to your investment.

You may also run into difficulty trying to find a buyer for your shares once you decide it is time to sell.

Very Low Volume Stocks - Without much trading activity it becomes increasingly difficult to buy or sell for the prices you want. As well, it becomes nearly impossible to get an understanding of where the stock price is heading, or to calculate fair valuations for the company’s stock price.

Not only that, but companies subject to low trading volume generally do not have a lot of positive interest.

The Hot Tip Stock - There are actually professional promoters who make a very good living generating and nurturing rumors about some penny stock that’s guaranteed to go through the roof. The entire concept hinges on the rumor being spread from person to person, at the office, over the phone, or at social venues.

The promotional ploys can be very costly for investors who get involved without special knowledge about the company or the actions of the promoter. In most cases if a stock really is going through the roof you won’t hear a word about it, because a select few individuals will be very intent on keeping the information to themselves.

Guaranteed Performance - If a stock is guaranteed to go up, it will almost always go down. Nothing is ever certain, especially on the stock market. When someone guarantees certain performance out of a stock, they may be a promoter, naive investor, self-serving broker, or have heard the guarantee from another source. In any case, don't believe them. Instead check into the company yourself and if you feel it is a good investment, you may want to proceed.

Sinking Ships - When a stock has dropped a lot you may think that, "it can’t go any lower," or that it is "a good bargain." Especially with penny stocks, you need to avoid this type of thinking because many sinking ships don’t ever rebound, and they can go lower, and they aren’t good bargains just because they cost less than before.

Commission Free - If you are interested in getting stock commission free you may think you are saving money, but it generally means that you are buying over the counter stock directly from a promoter or the company.

Either way, they take their own invisible ‘commission’ from you, either by selling to you for an arbitrary amount which is unfairly high, or selling to you for the asking price rather than the bid price based on their own current valuations.

International Penny Stock - We’re not talking about living in the U.S. and steering clear of Canadian stock, or vice versa. We are talking about penny stock issues from Africa, Australia, European, Russian, or South American penny stock markets. First of all, you won’t be too impressed with the level of investor protection and exchange honesty in some of these regions, and you most certainly won’t be too impressed with the broker fees you incur when trying to purchase internationally.

Besides, if you can’t find good penny stock investments in North America, you won’t be able to find them anywhere else either.

Warrants and Rights - These are not technically stocks, but instead are derivative investments based on an underlying company's shares. However, they often appear like penny stocks because they sometimes get listed in the stock pages, and often trade for pennies.

It is unlikely that you will accidentally purchase derivatives, but make sure you know what you are trying to buy by understanding the listing criteria of the paper you are reading, or verifying your purchase with your broker.

To get free information about investing in penny stocks visit http://www.pennystocks.com They offer information on the definition of penny stocks, getting started, benefits, risks and how to find a good penny stock.

Information about the Author:

Peter Leeds, one of North America's leading Investment Coaches, is a self-made millionaire who has created his fortunes on the stock markets. He has also empowered thousands of individuals to do the same. His personal success and incredible ability to consistently pick money-making stocks has earned him a loyal following of successful investors and has generated significant attention from the financial world.

Cash in by cashing out.

3 ways you win by not waiting for future payments.
A lawsuit winner, an annuity holder, and a lottery or jackpot winner may have one thing in common; they are likely receiving payments spread out over time. Whether they never had the option of taking all their money up front, or circumstances induced a long-term payout, there are currently safe and legal options to cash in future payments for a lump sum. Waiting out the long-term payout may or may not be the best choice. There are at least 3 ways to win by not waiting out the terms of the payout.

Time value of money
Inflation eats away at the value of the dollar. A simple example is the cost of a movie ticket, just a $1 in 1969 and today you could pay as much as $15. Just imagine what your movie ticket will cost in 10, 20,30 years. Your money today, invested today, could keep pace or even outpace inflation with careful planning and investing.

Emotional value of now vs. waiting
Receiving payments regularly over time can be convenient for some and inconvenient for others. Maybe the money is a reminder of some loss? Perhaps the amount is so insignificant that it is frustrating. Even more likely, the financial experienced right now is taking a destructive emotional toll. Turning future payments into the money you need today is a viable option for emotional reasons.

Opportunity knocking
A lump sum of money can mean taking advantage of time sensitive opportunities. A home, a business, schooling, investments, made possible by cashing in a schedule of smaller payments spread out over time. It’s not always the best choice, but sometimes it is the right choice. Unforeseen circumstances lead to unexpected opportunities that with the right resources could reap exceptional dividends.

After discussing 3 ways to win by cashing in future installment payments, it is proper to touch on a few ways you might lose by cashing out. No more regular payments, no more guaranteed payments, the burden of properly handling a large lump sum of cash, and the procedure for accelerating your payments are all considerable reasons to not cash out. When it comes to matters of money, what you do matters. You can cash in by cashing out, just take care that you don’t end up cashless.

Information about the Author:

Jason M. Rigler
Marketing Manager
MSN Messenger Name -MrktngGuru
www.ProsperityPartners.com

How to Make Trading Profitable?

If you have read: "10 Simple Rules to Make You Serious
Money in the Sharemarket and Keep it!" you will have
read about options.

Here is a free excerpt of the Trading Ebook:
(This is a short version)

http://www.southwest.com.au/~tutor/js1dload.html

You don't necessarily want to buy any stock, but you do
want to control, by outlaying a little money. Does this
sound like something you could get excited about?

Well, if so, welcome to trading options for quick returns
or quick losses!

The amount you outlay is only a small part of the purchase
price, but you could control a large pile of stock.

When the asset rises or falls your option will also rise
and fall in value. Generally you can expect that options
will show greater volatility and it's by trading these
ups and downs that you can make superior returns, which
make stock investing look foolish.

Some Key Points About Options
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Option traders use this volatility to make superior profits.

You see you can make money when the value falls by purchasing

a "PUT OPTION" and you can capture price rises
when you buy a "CALL OPTION".

Now there are many option strategies, but I believe in keeping
it simple - that way I understand what I'm doing and you should
too!

People who buy stocks, also protect
their holdings by using options.

You see the idea of using leverage to buy is a very old one. Let's
face it we may not want to spend the money, but we want to control
and options give us the opportunity to do so.

Options can do 2 simple things:

*they give you "the right to buy"

and

*they give you "the right to sell",

at a future time and at a future price.

You are not obligated to buy or sell, but the life of your option
is diminishing from the moment you enter the contract. Soon the
option will expire worthless. So you must trade it!

When we are ready, we either exercise our option, we sell the option
and make trading profits - or we cancel our obligation, if we are
option writers.

We can also cancel our obligation if we have written a "PUT" by buying
it back. Likewise if we write a "CALL" we can buy it back and cancel
our obligation to sell stock.

I've discovered a home study course you should take a look at if you
are interested in using the power of leverage.

Okay, so if I haven't scared you so far, talking about using leverage
via options - let's carry on.

When you read my ebook you will see % figures, that like the following
example demonstrate the difference in movement of stock prices versus
option prices.

If you have not invested in a trading package you can do so by going to
the link below:

http://www.tutorhelp.com.au/sharemarket.html

Now let's move on.

If you buy the stock XYZ at $37 and the price increases 12% to $41.50 you
are using lots more of your precious money to capture the move than if you
purchased say a $35(strike priced) option for $3.50 per option.

Now each contract in the U.S. represents 100 shares. So your total cost is
$350 per contract. In Australia one contract represents 1000 shares.

If your stock goes up it will influence the option price. Options can be
extremely volatile - so you need to monitor prices very closely.

So let's say your stock goes up to $41.50 and now the $35 option series is
selling for $6.50. This represents an 86% price increase.

So what has happened:

stock up 12%
option up 86%

Which trading situation do you think will make you the
biggest trading profits?

Would you rather hold the option or the stock?

If you answered "the stock", I'd be very worried about you!

Drawbacks of Options:

1. Volatility - needs close monitoring.
2. You can lose your option money if you don't sell it
before it expires.
3. Short life of options - usually months.
4. You need education in option trading.

Advantages of Options:

1. Leverage.
2. Volatility - can make more money per trade.
3. Less money needed than owning stocks.
4. Play the market UP or DOWN - flexibility.

If you increase your understanding you could do what every other trader is
doing - making money from time to time!!

You see losses are part of the game - not all your trades will succeed.

Playing the game with this fact in mind will help you to trade better and to
have a healthy respect for the market and controlling RISK.

We control risk firstly by being educated! I've chosen this link because I
think it will help you understand and trade options so much better.

http://options-university.com/go.php?3440_A72092_21175

Regards,
Joseph Sgro
THE 10 Simple Rules Ezine
http://www.tutorhelp.com.au/ezine.html

Information about Authro:

Joseph Sgro has spent 18 years as trader. He is
also a writer and educator. He has recorded his
trading experiences and offers "Learn to Trade"
information.
Visit the BLOG:
http://www.tutorhelp.com.au/BLOG.html

For more resources go to:
http://www.tutorhelp.com.au/resources.html

Copyright (C) 2005 Joseph Sgro

Debt Consolidation and How it Impacts Your Credit Rating

Debt is not a high commodity. Across the universe, people are not looking for a place to sign up for more debt. In America, over 30 million consumers’ credit scores teeter under the score of 620. Nonetheless, personal debt can be a debilitating situation. Although, getting a forty percent job raise job or winning the lottery are the ideal ways to solve a person’s financial woes, there are other immediate solutions.

Since credit scores represent purchasing power, improving one’s rating is critical. There is a direct correlation between the interest rate a homebuyer and car buyer will pay. In other words, a low credit rating represents a high interest rate financing. On the contrary, a high credit score symbolizes buying power. Particularly, for the person planning a significant purchase like a home or new automobile – beefing up one’s credit rating is a consumer smart strategy.

Over the years, debt consolidation loans have been the leading way Americans have been able to quell their personal financial challenges. Just as all financial institutions are not equal, the same is true of debt service organizations. Nevertheless, the right debt consolidation company can impact credit in a positive way.

Fact: Since bills are immediately paid, a credit scores can be raised via a debt consolidation loan.

Here are five steps to upgrade your credit rating and identify whether debt consolidation is right for you:

Request a Copy of Your Credit Report

Before you opt for a debt consolidation firm, it is a good idea to review your credit report. Since a credit score can be tarnished by false information, it makes the best sense to obtain a copy of your credit report. There are three reporting agencies that will provide a complimentary credit report (Experian, Equifax and Trans Union). Legally, Americans are entitled to one complimentary or free credit report per year.

Fact: Payment history accounts for 35 percent of all credit scores. A monthly late payment can reduce a credit score between 50 to 100 points.

Calculate the Total of Bills Owed to Your Monthly Income

Identifying how much you owe in your current monthly income is the second way to determine whether a monthly budget versus debt consolidation is necessary. If the total amounts of your bills exceed fifty percent of your monthly salary, debt consolidation offers a surefire way to rapidly raise your credit score.

Devise a Payment Plan

As financial institutions and credit card issuers report the outstanding balance of consumer’s bills to credit bureaus, the minimal amount paid does not help augment a credit rating. As a result, it is best to pay off bills entirely.

It’s a perfect example of how using a debt consolidation firm may immediately improve a consumer‘s rating.

Fact: Paying bills on a timely basis is the key way to raise a credit score and rebuild a credit rating.

Pay-Off Bills

When financial and lending institutions evaluate and approve credit, they prefer to see low debt balances on credit cards. The wider the gap, the better the chance for gaining approval of a low interest rate. (It is particularly important for the consumer in dire need of raising their credit rating over 620).

Debt consolidation offers a quick remedy. Since debt consolidation companies negotiate interest rates to be waived, a consumer has the ability to pay their bills faster. Consequently, a credit score can be augmented rapidly.

Credit score boosting strategy: Consumers can raise their credit rating by charging less and paying the entire balance each month.

Avoid Bankruptcy with a Debt Consolidation Loan

Bankruptcy is the antithesis of debt consolidation. As simple as bankruptcy may seem, it can devastate any credit score. Not to mention, the effects of bankruptcy last between ten to 13 years. In recent news, the United States federal government has revised legislation regarding bankruptcy. As a result, filing bankruptcy carries many stringent requirements.

Fact: Bankruptcy will drastically lower a credit rating by 200 points or more.

On the other side of the personal finance spectrum, debt consolidation loans feature a rapid means for getting out of debt. Since all bills can be paid off – entirely, a credit rating can be easily elevated. As buying power is impacted by credit worthiness, consolidating debts via a loan is a smart way to beef up your credit score.

© About-Personal-Loans.com. All rights reserved.

Information about Author:

Holly Bentz is a finance writer and a contributor to About Personal Loans.

The ABC's of Stock Trading Success

Stock trading success...why is it so elusive? With all the trading information, systems, trading advice and assistance available today, the fact that most people who attempt to profit from trading Stocks lose money seems quite bizarre.

Can you imagine the millions of dollars that must have been spent by countless traders on courses and Stock analysis software, that was wasted because the buyers didn't understand the key principle of trading success I am about to share with you now.

We aren't going to need any charts for this lesson...just your ability to comprehend the value of what I am about to share with you and your willingness to take action - right now I want to share with you the ABC's of trading success.

If trading was an easy business to master and profits were freely available to all, every punter with a computer and a free charting program would be a millionaire and the streets of our cities would be clogged with chauffer driven limousines.

The fact that the majority of the population have no idea how to make a buck from the Stock Market, often after spending large amounts of money on education and trading losses, made me wonder why this is so.

I searched for the answer to profitable trading for years, until I found it in an unexpected place, when I wasn't looking for it at all.

You may be able to relate to this story, or you might just be starting out and this will help you to reduce the time you spend in your initial learning stages and speed up your path to profits.

Let me tell you about Jim (not his real name…of course). Jim first started trading after answering an ad in the Brisbane Courier Mail for a popular trading education package that cost him around $1000.

Little did he know that the fateful investment in that course would lead him into the abyss of Gann analysis, and that it would eventually cost him thousands of dollars in courses and trading losses to pull himself out the other side.

He read the course, watched the videos, read the course, watched the videos...you get the picture.

Losses, losses, small profit, losses. He felt that because of his limited knowledge, he had to learn more and more in order to stop the losses and to start profiting from the market. So he spent more and more on courses - and his trading got worse and worse.

The more he learnt, the less he seemed to know and the worse his results became. Then, he finally learnt about the A, B, C triangle of success, in trading and in every other area of life, from one of his property mentors - John Fitzgerald.

The A, B, C's stand for -

A - Awareness

B - Belief

C - Conduct

Awareness - He realised that he already did in fact know enough to become a successful trader and investor. He had studied many books and courses on trading and had everything he needed in the way of practical trading information to make a profit.

He was aware of what it took to trade profitably. He could become a good, a great trader, if he could just develop the second factor...

Belief - If he could bring himself to believe that he was a good trader, he would become a good trader.

He didn't need more knowledge at that time, because he had a firm grasp of the basics. He simply had to believe in himself and his abilities and the profits would follow.

The third leg of the success triangle -

Conduct - Was were he was falling down. He would look at a chart of a Stock or market, and decide on a trading strategy using his understanding of trends – he was calm, detached and unemotional - just like his written trading plan told him to be.

His success rate was good at finding profitable trades - but his conduct was the problem...

He had no trouble placing the trade while the market was closed. He would simply call his Broker and give him the order.

Then, the market would open. His calm, detached, unemotional state would turn into panic.

He would feel physically sick at times, scared in case his analysis was wrong and he lost money on the trade.

He honestly believed that he couldn’t afford to lose any money (the poor mans mindset) so he focused on losing.

He got what he focused on... He watched his trades like a hawk, and at the first sign of a reversal against his position, he would either call his broker and exit the trade, or move his stop loss order to a place where he was virtually guaranteed of being knocked out by the normal fluctuations of the market.

He simply had too much leverage - he was over trading.

He was continually setting himself up to fail.

His conduct was the weak link in his trading success triangle.

Because he was continually losing money on his trades, albeit only small amounts, his belief system started to falter, and he saw himself as a losing trader even more - then he started to think he had two weak sides on the success triangle – conduct and belief.

He started to question the system he was using, which he had painstakingly back tested, over many markets on hand drawn charts and knew was solid, but his failure to have control of his conduct or belief made it look like it wasn't a good system at all.

So, how to fix it...

He sat down and looked at his recent trading results, and noticed that on most occasions, if he had stayed in the trade, he would have made a profit. His system was valid. His Awareness was enabling him to find and execute profitable trades.

His Belief system needed a gentle prod after several losing trades in a row, but because he had done so much study and work on back testing, he knew he deserved to be successful.

He started to visualise himself in his trading room, making profitable, long term trades and enjoying the benefits that this type of trading would bring to himself and his family.

Then, he worked on his conduct. He again wrote out his trading plan, and decided that he would treat his plan like a shipwrecked sailor treats a life raft.

He would cling to it until he was forced out of a trade by the actions of the market, not by his fearful, emotional response to the actions of the market.

He started placing his stop loss orders in a position so that the market had to change trend in order to take him out of a trade. In other words, a logically placed, technically correct stop loss position.

He then reduced his position size to allow for these stop loss orders being further away from the price action, so that his account was never at risk of being totally wiped out by one serious loss.

He did a pre-trade and post trade analysis sheet, so he could analyze his performance and try to consistently improve his results.

(This can be as simple as a sheet of paper where you write down your order, the position of the market and your thoughts and feelings before, during and after a trade.

Or it can be an elaborate system of checks and balances that guide you through each of your trades. Be careful though - keep it simple or you probably won't use it!)

Once he started to do this, he started to make money (with the exact system we have been teaching you on this Website).

(There are, of course, many other strategies and systems you can use in addition to the lessons we teach you to increase your profits, but to start with, these methods are all you really need to become a profitable trader.)

We are always learning and improving - every trader should strive to do this also.

When you are making consistent profits using the methods we have shared with you, investigate some of these additional entry and exit techniques, but not at the start. Keep it simple.

When he started to trade this way, he found it was far better to take a small position with a loose stop loss and be able to sleep at night, than his previous strategy of using maximum leverage and stressing out whenever he was in the market, to the point where he couldn't stand to walk away from his screen in case the position went against him.

This method sets up lots of profits and a few losses. Much better than the alternative he had previously used.

He then started looking for Stocks that trended strongly for long periods of time, and was drawn to the US Stock Market.

He used exactly the same entry and analysis techniques I have shown you on the Website, and - He bought Call options in Gen Probe Inc (GPRO) with the Stock at $27 and held on until the Stock price was $58 three months later. He bought Pacificare Health Systems Call options (PHS) when it was trading at $24 and held them to $51 four months later. And he bought Sandisc Corp Call options (SNDK) with the Stock at $24 and held them to $58 less than four months later. (Please Note - these are not Stock recommendations, they are merely mentioned here for illustration and educational purposes and the trades are hypothetical examples).

Can you imagine the change in the size of his trading account balance?

None of these Stocks had given him any reason to sell earlier, so he simply held on for the ride…Awareness, Belief, Conduct...the success triangle.

The Awareness will come when you study and really 'get' the lessons on the Website and in the Newsletter.

Study the lessons carefully, read books written by the masters. Teach others what you have learned - you will gain a better understanding yourself.

All human interaction is a chance to learn or to teach.

By teaching someone else and sharing your knowledge, you will learn any subject at a deeper level. You ultimately go from an intellectual understanding to an emotional understanding (as Robert Allen calls them, an aha!) of your chosen area of interest, in this case, profitable trading. Try it...

The Belief will come when you back test the Trading Plan I share with you on the Stocks that you want to trade and prove to yourself that it does indeed work.

Visualize yourself making a series of profitable trades. Feel how good it is to see the market moving in the direction you expected it to.

Imagine spending the profits you make trading Stocks with your family and friends, and the time you will have to do the things you want to do instead of the things you have to do. Successful trading gives you the 'time freedom' to do whatever it is that you want to do with your life. Do it first in your mind, and then do it in the market.

Your Conduct - well that's up to you. Will you 'decide' to look at your written trading plan as your life raft? Cling to it as your last defense against the emotions of fear and greed that live inside each one of us?

Will you trade with the trend, enter off 1 to 4 day reactions to the main trend, reduce your leverage or position size and put your stop loss orders out of the way, so the market has to change trend to get you?

If you do this, you should be confident that you can achieve trading success. That is our wish for you. Good luck.

Now, lets review today's lesson - The Trading Success Triangle has as it's three sides - Awareness, Belief and Conduct If any of these elements are weak or missing, the triangle has no strength The sides are all important and are dependent on each other, but Conduct is the most difficult for the average trader to master Fear and Greed act to change our conduct from what our rational thoughts tell us is the correct course of action, to actions that aren't always in our best interests By controlling Fear and Greed, we can make rational decisions that help us to become profitable traders

I hope this lesson has helped you in understanding the mindset of a successful trader a little better.

Understanding these three critical elements of trading psychology will put you well on the way to a profitable trading career.

Get this, and your trading success is practically assured. Miss the lesson, and your chances of making big money in the Stock Market are profoundly limited.


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Information about the Author:
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Stock Trading Review is dedicated to helping you succeed as a trader by sharing with you simple and easy to follow tips and techniques.

Discover more insider secrets and the exact proven strategies to trade stocks profitably:

http://www.stocktradingreview.com

Copyright(C)2005 Stock Trading Review