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The End Of QE2-Quantitative Easing

Today, marks the end of quantitative easing part two. Quantitative easing (QE) is an unconventional monetary policy tool used by the Federal Reserve to stimulate the national economy when conventional monetary policy has become ineffective. Of course that doesn’t mean the there won’t be a QE3 and QE4. The policies of the Obama Administration have damaged our economy and I’m not surprised at the Federal Reserve for having to step in to try to save it. We’re in dire straits with the current economic situation, it’s hard to believe that we can turn things around in the next few years.

Watching the stock market in this past week would have others believe that we’re out of the woods and on the road to recovery. Instead what we’ve seen in the last four trading days is the smart money getting back into buying equities since the recent healthy pull back on the DOW. I’ve spoken about this before in detail of how when the markets or even good solid stocks pull back 8% from their recent high, you must “back up the truck” and load up for a strong rally that will be happening soon. Eight percent is a benchmark that I use to make decisions on when to jump into a stock or the overall market. Time and time again it has been useful and profitable for traders to follow this method.

If you’re new to investing in the stock market or have been around awhile, this is something you need to keep in your trading playbook. something else to keep in mind is when stocks or the markets move up 8%-10% in a short period, it’s time to unload some of your shares to keep the gains you just made. So far in the last four trading days, the DOW has gain nearly 4% from it recent low. Remember, pigs get slaughtered, so don’t be a pig and try to ride out the wave a little longer. Be happy with the gains you’ve made. Since emotions are not welcomed when trading stocks, don’t be mad or angry if you miss out on some profits because you jumped out too early. Stocks will always have a pull back and with the gains you made, you’ll have capital to trade another day.

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Preventing Investment Fraud

If you are new to the investing world, there are people out there who will try and scam you. This is true with every aspect of life, and the world of investing is no exception. If there is money to be made or stolen you can rest assure there are crooks out there trying to find a way to steal yours.


There is no safer place than to keep your money in a savings account at the local bank. As long as the bank is FDIC insured your money will be protected by the government. A limit of $250,000 does apply to these types of accounts. So if you have over that amount you should not place all of it in the same account. A savings account is a type of investment because your money is earning interest as it sits there. The bank will use it to make loans and give you a specified percentage rate in return for letting them use it. At the moment rates are not that favorable and many are considering other investment options.


Placing your money with a stock broker is another alternative. There are many online brokers that will allow you to direct your funds into a variety of different asset classes. When looking at a broker make sure that they too offer insurance from SIPC. Brokers who will not insure your accounts can potentially be scams that will take your money and run. Using a broker based in your own country is also advised. If the broker asks for money to be transferred to an overseas account, red flags should go off in your head. There are many reputable brokers here in the U.S. that are available to the retail investor. Going online and researching the various brokers that are available is a good idea. Many will have both full service financial advisors, to help you out, or let you choose the stocks you would like to buy yourself. Your investment experience and knowledge will help you make the decision as to how much help you require form your stock broker.


Like stock brokers, currency brokers will offer you as an investor the opportunity to invest in the currency markets. There are many online foreign currency scams on the internet, mostly revolving around computer programs that will make you money. Please do not trust these money making systems, as they will not make you the money as promised. The same basic principles hold true when trying to find a good currency broker. Do your research online and read the many forex broker reviews that are available. These reviews will help you to see the pros and cons that other investors had with the brokers that are available to the retail investor. Make sure your broker, either stock or currency, has representative available for you to speak with by telephone. Making sure that there office has a building headquarters is one way of making sure that the broker is legitimate. As mentioned before many of the scams revolve around brokers that work from third world countries and offer no brokerage service at all.


Giving your money away to someone who claims to be an investment advisor can also lead you to lose money. Besides the various brokers that are available to the retail investor there are other types of investments, such as hedge funds. Hedge fund can promise to offer greater returns, however they do not always do this in reality. These funds are the riskiest types of investments when it comes to fraud. Make sure you know of other investors who have money with the fund before you invest any of your own. The fund manager can be gone the next day with your cash never to be seen again, it has happened before and will most likely happen again. If you take your time and do the appropriate research there should be no issue on how reputable your local bank, broker or fund manager is. If as an investor you do not feel confident or comfortable giving your money to a particular institution then do not do it. Ask as many questions as you need answered for them to earn your business

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