EI84mzk2E8AmuBYt0y5NY8kJU3M
nav-left cat-right
cat-right

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

Related posts

Joel Greenblatt Knows How to Invest In the Future

Joel Greenblatt’s most recent book, “Magic Formula Investing” deals with the basic philosophy of buying stocks from high earning companies cheaply that will then yield high returns on your investment. There exist only one Magic Formula Fund which is reporting recording stocks as of this day .


This idea follows  the launch of his online money management company, Formula Investing, last  October, in which he offers clients “a unique stock screening system, and a disciplined approach to managing portfolios of high value stock” for them. He is also the author of “The Little Book That Beats The Market”, which was on the NY Times bestseller list, as well as “You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits”, published back in 1997.


Born in Great Neck on the north shore of Long Island on December 13, 1957, Greenblatt, served as the former chairman of Alliant Techsystems, and is the founder of  the New York Securities Auction Corp. He also began Gotham Captial, a hedge fund backed by Michael Milken (the infamous “junk bond king”) in 1985.
In addition to his devotion to investing on Wall Street, Joel Greenblatt firmly believes in investing his own money in New York City’s educational system, particularly those schools catering to minority students.


Not only did he gift $2.5 million to the Ozone Park, NY elementary school PS 65Q, whose student body is primarily made up of kids from South Asian and South American immigrant families, but he also held found a charter school in Manhattan known as the “Harlem Success Academy” in 2006. Both schools continue to receive his support and have merited high marks for their growing academic achievements. In addition, Greenblatt serves on the board for the Institute for Student Achievement, which works to develop small senior high schools out of  larger ones in order to raise the standard of education in communities across the country.

Related posts

All About Global Macro Trading

The global macro trading system can work effectively for every trader. If you have an already established system that works for you, why not expand it to participate in global macro trading?


If you have already been an established day trader, have you considered gravitating into a market that has more options such as the entire planet? Similar to a doctor attempting to diagnose an ailment, you have to search and then search once again to reach the end result. At times, the doctor will prescribe medications that just don’t seem to work, and you go back to the doctor to try something different. Well, it is no different in the stock market. You may think you are on track and it fails, so you attempt something different up until you find something that works.

If you are a stock trader, you understand this methodology. You have your system tweaked to the point where you know how to check your price to earnings and then price to book. You also look at the return you will receive on your equity, right? The better the system you have built, the better protection you have in the market thus improving your risk to rewards. The stock market is not an easy business. Sometimes it becomes a matter of trial and error. Eventually, we are fortunate and then other times, we tend to lose. The more educated you are the better a risk to reward you will have.


The global macro trading market provides an edge as it is worldwide, which means you can trade any instrument using the strategy you have developed globally. That means your chances of locating the best investment are greater. This market has really made a tremendous comeback compared to the last couple of years of trading. This is because a lot of people were trading long and leveraged. The macro traders however were shorting housing and financials then going long and doing some real interesting trading in short treasuries and dabbling in the commodities market.


What this really means is the global macro trading market provides a lot of options to test a variety of strategies. So if you set up your strategies to build on a model that you wish to invest, in you could be a real winner. This is a specialized market and the person who is new to stock trading might want to educate themselves before becoming active. If you are an active day trader that utilizes the same stocks day in and day out, you might not have an interest in global macro trading. However, anyone else that wants a variety and has a need to venture into a new market with a high variety, then global macro trading might be for you.

Related posts

What Are Bull Markets And Bear Markets?

Just in case you are new to stock market investing, there will be two terms that you will hear thrown around quite regularly.   These are “bull market’ and “bear market”. These two terms will remain in your thoughts once you have survived a day in the stock market world. These two terms are important, that is why you need to familiarize yourself with them.


Here is a brief overview of the two terms, the “bull market” and the “bear market”. Let’s start with the bull market. The bull market is when most traders feel that they have felt something positive about a certain stock market and they want to buy stocks. This will usually happen during a long bull markets period that the stock market would keep going up and up.


As for the bear market, the bear market is actually the opposite of the bull market and it is when the stock market is constantly going down no matter what a trader would do. This will usually happen during the times that a trader loses sleep and if they continually wonder whether they should be selling their stocks.


However, most of the time the market is placed somewhere in between the bull and the bear market. Normally, the better stocks would go up over time and then the stocks of the companies doing poorly would go down. It is always considered wise to always try to pick a stock of company that is doing well or will do well when the time comes.


Now that you know the difference between a bull and a bear market, what does it mean for you.  Many times an investor has no control over what is happening in the world that affects the stock market.  If the market is experience a downward turn, it is a good idea to invest in defensive stocks.  Find those stocks that experience little volatility.  Another idea, is to go the sidelines and wait it out.  The problem with this trading technique is, you may miss the rally.

Related posts

High Yields: How to Invest in a High-Yield ETF

If you are like most people, then you like the idea of having your money work for you. One way in which it does this is when it is invested. When your money is invested, it grows as the companies you are invested in grow. Thus, you make money off of the work of others.


However, all too often people are afraid to put their money to work in the stock market because it seems like a confusing place. Many worry that their money might evaporate away if a stock goes under. For example, if you invest in a gold ETF fund, and the price of gold collapses, then you’re busted — you lose your investment. The same goes for Oil ETFs, the natural gas ETF and others. While this fear is legitimate if you are invested in only one stock, there are ways to diversify your money and to grow it without having to learn the complexities of the market. This way is by investing in a high yield ETF.


A high yield ETF (Exchange Traded Fund) is an investment vehicle in which your money is given to a professional who manages the money for you by placing it into a number of high yielding stocks. A high yield stock means a stock that pays a high dividend relative to it’s share price. By investing in this kind of ETF you are allowing compound interest to work in your favor in order to significantly grow your money over time.


Conservative style investors might be particularly drawn to high yield ETF’s because of the glamor of the high dividend. Investors have the option of receiving their dividend (share of the company’s earnings) in the form of a check every three months, or in the form of reinvestment in the stock. Reinvestment in the stock gives you a bigger share each time and is generally thought of as the smarter move financially, unless you are using the money as income.


While ETF’s are a relatively new product of Wall Street, they are in many ways similar to mutual funds. They allow you to not have to worry about studying the stock market before investing. You may simply place your money into these funds on a set schedule (i.e. monthly, weekly, etc.) and allow it to grow over time for you. This makes your investing automatic, rather than focusing on random ETF news and sound bites. Naturally you should never jump into an investment halfheartedly. If you want your money to work for you and compound over time, then you are going to need to stick to your investment plan.

Related posts

Investing In The Financial Sector

There’s no doubt about it, the stock market can be a fantastic way to make money. Historical analysis shows that the rate of return on money invested in the stock market is, on average, better than that of money invested in government bonds, certificates of deposit, and most other investment options. However, it can also be a fantastic way to lose money if you are not careful, so that’s why it is absolutely vital that you know what you are doing before you go out and drop down some money for what is, in fact, nothing more than a few bits of information stored in a computer somewhere on Wall Street.


The stock market can be broken down into sectors based on the types of stocks for sale, such as blue chip stocks, industrial stocks, technology stocks, or financial stocks. The financial sector is a popular area for investment, but as with all stock market investments, and indeed all of life, it is important to know what your are buying before you buy it. What that means for you is that you need to research the companies that you are interested in.


All companies in the United States are required to send financial information to the Securities and Exchange Commission (SEC), which posts this information on its web site. By looking through the financial filings of companies, you find out a lot about them. Some things to look at are: how much the company owes, how much it makes per year, and how much it has paid out to investors in the past in the form of dividends. You can find out more about what to look for in these financial filings by going to your local library and checking out any book on the stock market.


There’s more to the stock market than just this, however. One thing that is hammered into the heads of all business school graduates is this: diversify, diversify, diversify. Think about it: if all of your money is tied up in one company, and that company goes belly-up, you have no hope. But if you have spread out your investments over many different companies, then you will take only a small loss. Something else to watch out for is becoming too attached to your stocks. We all have our favorite companies, but if your pet stock is showing losses quarter after quarter, it may be time to bail. It’s better to take a small loss now than to wait until that favorite company is selling for pennies per share.


There is much more to playing the stock market than just this, of course, but if you follow these few simple tricks, you’ll be well on your way to success.

Related posts

Investing In The Energy Sector

Broadly speaking, the energy sector refers to that sector of the economy that is comprised of a wide variety of stocks (public shares in companies) that have energy production as their essential business. Examples, of these energy stocks include oil companies like Conoco Phillips or Exxon, coal companies, and even “green” energy companies like First Solar which attempts to capitalize on solar energy. As these examples show, some of these stocks may be foreign (for example, Conoco Phillips is Canadian), or U.S. companies (for example, First Solar).


Of course, some U.S. companies do business overseas (for example, Exxon). Thus, an investment in the energy sector may involve the purchase of these different kinds of stocks and many others that fit this description, and it sometimes wise for an investor to consider what element(s) of the business sector is most appealing, given that investor’s beliefs about what types of energy are apt to be particularly fast growing enterprises or what areas of the world are most apt to need and have the ability to expand energy production. An investor can purchase individual energy stocks or a stock fund in which the fund manager has assembled a group of stocks that all share in common a primary involvement in energy production.


This too becomes a consideration, since an investor may have more confidence that a single company will do well in the future than a group of related but different companies or may dislike the idea of investing entirely in a single company and prefer a wider bet that the energy sector will do well, whether a given company does or not. If the intent is to invest in the energy sector, it is generally best to purchase a mutual fund run by a good fund manager with low overhead costs in order to place a wide bet on this sector of the economy generally.


With this decision made, the next step is to research various mutual funds, perhaps through a fund rating company like Morning Star,in order to determine which mutual fund might be purchasing those energy stocks the investor most likes, in the region of the world that the investor believes to be most ripe for fast growth, managed by a fund manager with a good track record, and set up to minimize the overhead costs (for example, the management fees and the commission costs at purchase and sale of the mutual fund). In my judgment, the new investor should always look first at the Vanguard mutual funds.

Related posts

Trading Solutions That Can Help

The three indicies lost just over 1% each on Tuesday. The DOW slipped 96.50 points to close at 9241.45, the S&P 500 shed 12.75 dropping below 1000, and the NASDAQ finished the day at 1969.73 after losing 22.51 points. There were some great gains in some stocks even with the down day.
.
The financial sector was the worst of the bunch today. I’m glad that I’ve pulled out of that sector a couple of days ago. I’ll wait for a healthy pull-back and jump in again.
.
When I sit on the sidelines waiting to jump back in, I sometimes use the time to try some investing programs I’ve come across.
.
One that I recently checked out is the free analysis trading software package from Trading Solutions. It can learn patterns from historical data and allows you to create trading systems that suggest when to buy and sell. The software works with stocks, futures, currencies (FOREX) and many other financial instruments.
.
Download Trading Solutions and try it for free. Let me know what you think. As I continue playing around with it, I’ll report back on how I like it.


TradingSolutions

Related posts