Archive for category Investing
IRA CD Account / Savings Account Blog and a Whole Lot More
Note the Gap Between the End of the Efficient Portfolio Curve and the CD/Risky Mix Line(s)
I’m taking a moment to announce a series of blogs on IRA CD account usage and online savings accounts in combination with a regular IRA or 401K portfolio (or mutual funds). In today’s high risk investing environment and atmosphere I am very concerned with the high level of risk many boomers and younger 40 somethings are willing to take with their nest eggs.
IRA CD Combined with a Risky Asset Portfolio – The Whole Is Greater Than the Sum of the Individual Parts
A portfolio is capable of a great return on investment without necessarily taking on undue amounts of risk. This is done typically by matching an essentially no risk asset such as an IRA CD or online savings account or money market account (paying low fixed interest rate income) with a set risky portfolio such as a group of stocks or mutual funds. When done correctly matching a risk balance optimized (or efficient) portfolio with a fixed asset security essentially creates a two-asset portfolio with a linear relationship between risk and return.
Efficient Portfolio Frontier as Standalone Investment - Click for Larger Image
A Standalone IRA CD or Standalone Mutual Fund or Stock Portfolio Leaves a HUGE Hole in the Risk Return Profile/Frontier
Contrast the mixed risk-free / risky asset portfolio combination with a standalone risky asset portfolio. Note how the return on investment prospects are non-existant from a zero level of risk essentially out to some mathematical limit of the effectiveness of the portfolio. The magic of combining the IRA CD or high interest savings account (or online money market account for that matter) is that the portion of the risky portfolio which is least efficient (providing the least return for each additional unit of risk) gets ignored and is supplanted by the combined portfolio of the risky and risk-free asset. Not having a risk free asset in combination with the portfolio of risky assets leaves a barren gap of highly desirable risk/return possibilities where the investor has no options between no risk at all (a simple IRA CD or savings account / money market account) and the highly risky portfolio with wildly variable expected returns.
For Further Reading on Fixed Income Assets (CDs, Savings Accounts, and Money Market Accounts) See:
IRA CDs and Improving Risk/Return Frontiers in Retirement Accounts
Savings Account Information for Parents Who Want to Raise Financially Prepared Children
Keeping Tabs on Best Savings Account Rates Online
Highest Return CD Column / Blog
Understanding How to Use a High Rate CD in an Investment Portfolio
Posted by Martin Sage in Investing on November 24th, 2009
Given the question came from my friends at kidssavingsaccount.info I offered to write a guest post on the topic and explain how a high interest savings account or high rate CD could function to improve the risk/return profile of a risky asset portfolio.
What I discuss is what the risk/return profile looks like when you take a risky asset portfolio and allocate some portion of the investment in a ‘risk-free’ asset such as a CD and the remainder in your efficient portfolio of risky assets. KidsSavingsAccount.info probably isn’t the right venue for such a high level discussion true, but we aren’t really getting into the mechanics of how these portfolios are created – we only discuss what the expected performance of said portfolios looks like, and how a fixed income asset can enhance that picture. Clear as mud, right?
Think of it another way. You don’t have to know how an engine works to use a car to get from point a to point b – but you do have to be able to recognize that a car needs an engine to move. Likewise an efficient portfolio needs to be paired with a risk-free asset or fixed income asset to acheive an optimal profile picture.
Online Saving Account Tips – KidSavingsAccount.Info Review
Posted by Barry Livingstone in Investing on August 24th, 2009
Young Families Lacking Basic Financial Skills Suffer
It’s very hard for young families to get started these days, and those without the advantage of a basic financial education really find themselves hurting after just a short while on their own. Getting a grasp on the basics of managing home finances is a great topic for an information blog and I just want to applaud James at www.KidsSavingsAccount.info for making the effort to teach basic home finance.
KidsSavingsAccount.Info Gives Easy to Read Simple Tips and Basic Financial Education
Among the saving account tips are his thoughts on how he sets up and manages his checking and savings account, how he uses them to fund his online savings account, and recommended products to keep track of it all for you. The modern family unit really shouldn’t be without each of the tools he recommends, from the home accounting software to the tax preparation software, to the recommended reading on saving, investing, and wealth building.
I would recommend anyone looking for guidance on how to setup and run home finances give his blog a read. There is a lot of good information on the site itself, and he has also taken the time to post thoughts elsewhere – worth reading as well.
You can also read more of James’ work on Squidoo:
Savings Accounts Kids Manage Themselves Teach About Making Their Own Choices
High Yield Savings Account – Not Always What They’re Cracked Up to Be
Open a Bank Account Online – Stupid Questions You Just Don’t Feel Like Asking Someone Else
Kids Saving Accounts – The Hidden Benefits to Savings Accounts for Children
Savings Account for Kids – Topics to Discuss with Your Child to Make Concepts More Real
Fast Times in Forex Trading and Binary Markets
Posted by Barry Livingstone in Day Trading Options on July 27th, 2009
So we’ve had a lot of movement in forex trading and binary option trading in the last week. The Dow Industrials Index settled over 9000 for the first time in months and the dollar remains relatively weak against the euro and Yen but holds fairly steady against the pound.
It looks like the 2009 recovery is well along the way as the markets reacted favorably to positive earnings results from a number of companies (although Microsoft took a pretty big hit on theirs). For my own part I continue to day trade. I know the long-term investors out there think it’s best to buy and hold but for heaven’s sake! We live in a short term world where short term results are vastly more preferably to long term results. I very much doubt anything will change until someone decides to radically alter the tax code against day trading again.
I mean even with the substantial tax penalty for day trading there still is a huge incentive to cash out your short term gains because the long-term downside risk is too large (mainly due to mismanagament and corporate malfeasance). Why Boards of Directors haven’t caught on to this is beyond me but frankly they’ve shown themselves to be in cahoots with executives who steal from shareholders so there isn’t any incentive for them to crack down on bad executives is there?
At any rate – the message is clear – keep day trading: don’t buy and hold.
Day Trade Binary Options Here
Day Trade Forex Here (with Software)
Other Articles on Day Trading Forex and Binary Options:
Easy Forex Option Trading
High Turnover Options Trading System Makes Money Fast for the Bold Trader
Forex Trading Software – Java Based Program Works for Mac or PC
Binary Option Trade with Call and Put – Straddle Your Way to a Double Up in Binary Options Trading
The Basics of Foreign Currency Lingo
Posted by Be Wise in Day Trading Options on July 18th, 2009
Editorial Comment: I frequently write about topics about which I assume the reader has a reasonable amount of knowledge however I do tend to leap ahead from time to time. My recent forex trading articles definitely fall into that category. I went looking for an article that I thought would cover the basics for me and found this one which covers at least some of the basic terminology of forex trading similar to what I talk about in my forex trading tutorial. You’ll note that when Harold starts talking about the spread and what you pay in terms of commissions to your broker you’ll see why I typically opt to trade binary options (which at my binary options broker are commission free).
Currency Trading Tutorial – Forex For Beginners
By Harold Hsu
What Is A Currency Pair?
A currency pair refers to the two currencies that are involved in a foreign exchange trade. For example, if you want to buy the Japanese Yen using U.S. Dollars, you would look at the quoted price for the USD/JPY currency pair (USD = U.S. Dollar; JPY = Japanese Yen).
Basically, the currency pair you should be looking at depends on the currencies you wish to trade in.
What Is A Base Currency?
A base currency is the currency that is first mentioned in a currency pair. In the USD/JPY currency pair for example, the base currency is the USD. In the EUR/USD currency pair (EUR = Euros), the base currency is EUR.
The base currency is the currency with which the quoted price refers to. For example, the quote USD/JPY 110.00 means that one unit of the base currency (i.e. USD) is worth 110.00 JPY.
To clarify, here’s another example: EUR/USD 1.4600.
This means that 1 unit of EUR is worth 1.4600 units of USD. To buy 1 EUR, you’ll need to trade in 1.4600 USD (i.e. sell 1.4600 USD).
What Are Bid And Ask Prices?
The base currency is traded at 2 different prices at any one time, depending on whether you want to buy or sell it. For example, if you want to sell the USD/JPY currency pair (i.e. sell the USD and buy JPY), you’ll receive 110.00 JPY. However, if you want to buy the USD/JPY pair, you may need to pay 110.03 JPY.
Notice how the buying price is higher than the selling price. This difference between the buy and sell price is known as the ’spread’. If you first buy a currency pair and then immediately sell it, you’ll incur a loss equal to the spread.
The spread is what you pay to your broker as transaction fees.
To learn more, Click Here to download my free 26-page guide, Forex Trading Traps!
Harold Hsu is the owner of ForexSystemProfits.com where he provides premium Forex trading tips and resources.
Article Source: http://EzineArticles.com/?expert=Harold_Hsu http://EzineArticles.com/?Currency-Trading-Tutorial—Forex-For-Beginners&id=1067111
Ed (con’t): After reading this article by Harold I hope you have a better understanding of what I’ve been trying to teach you about making money trading foreign currency. There is plenty of opportunity with the right software and broker.
Previous Post: Learning to Trade Foreign Currency Made All the Difference
Learning to Trade Foreign Currency Made All The Difference
Posted by Barry Livingstone in Day Trading Options on July 16th, 2009
When I was learning to trade foreign currency I was being trained not just to understand the movements of the currencies back and forth between countries but also learning about the human condition and psyche. I have long enjoyed the benefits of a superior financial education than most of the people around me, and having this knowledge has always allowed me to have a deeper understanding of how individual human decision making impacts economics and global finance.
Forex Trading Plays on Inequities in the Market
It wasn’t until I learned to trade foreign currency that I began to understand how people with real money take advantage of the basic needs and desires of individuals and use forex trading to take advantage of the opportunities in the market. It used to take large amounts of capital and small teams of traders to take advantage of the movement of money around the world but now many automated trading programs have sprung up allowing individuals with smaller amounts of capital to play and succeed in the market where only the big fish once played.
Now I Trade Forex Too
Now instead of watching all the highly capitalized players in the market play – I get to play and make my money too. With the cool robot programs I use (linked to my broker), I don’t have the stress of constantly monitoring results either.
More on Foreign Currency Trading:
Learn to Trade Foreign Currency – Examples of Forex Trading Opportunities to Exploit
Learn to Trade Options – The Basic Put and Call Options Explained
Learn to Trade Binary Options – The Fastest Way to Make Big Money in the Market
Prior Post: Forex Trading Systems That Work 24/7 Good Times and Bad Times
Forex Trading Systems That Work – 24/7 Good Times and Bad Times
Posted by Barry Livingstone in Day Trading Options on July 9th, 2009
I’ve really been hooked into forex trading and I had been looking for forex trading systems that work and I have to tell you there are a couple of pretty cool systems on the market. Automated forex trading is making some smart people some big bucks with very little to start out with.
The problem most people have with investing is that it usually takes a significant amount of capital to overcome the transaction costs associated with high frequency trading. The way for a small player to get around this initial capital hurdle is to use the power of leverage to amp up gains. Margin accounts are more risky, but when paired with an automated trading software platform the software combined with the margin leverage can level the playing field for the small investor. An investor who sets up forex trading systems that work for him while he’s away doing other things can reap considerable extra monthly income from those trades.
One thing that is required of this type of automated forex trading system is the connection between your brokerage account and your software. If you have your software stored on your local computer then you’ll need to have you computer hooked up to the web 24/7 to make money all the time. A Java, or web based software system is hosted remotely on a server. Users access their accounts via the web. The advantage of this type of link up is that users can shut down their computer or web connection whenever they want but the software continues to run because it is hosted on a web server (this software is available either as web-based or local based and works with most brokers… what? no broker? Find one here and get the bonus cash for new deposits).
See Other Day Trading Articles:
Good Stock Options to Buy: Learning Strategies That Work
Binary Option Payoff: Breaking the Bank When Your Hand is Best
Binary Option Strategies: Staying Active While Waiting for Your Set
Prior Post: Forex Binary Options Broker Cheap to Start and Commission Free
Check Applicant Work History – Lying Is a Sign of the Need for Greed
Posted by William Franks in Real Estate on June 29th, 2009
I’ve found it a must to check applicant work history when reviewing my top candidates for an open position within the company. The bottom line is that the need for greed amongst some applicants is so high that inevitably they’ll fabricate entire sections of resumes in order to try to dupe you into hiring them. They figure (and rightly so honestly) that they don’t have to know everything about the job they’re going for – they just need to know more than you.
So don’t let them know more than you!
When I’m filling a maintenance position I do not go down to the department and study every wrench in the toolbox. I’m not a mechanic and I’m not all that big on grease. On the other hand what I DO know is that if someone was hired to do a mechanic’s job at a manufacturing plant his job title probably would not include the title “Janitor” or “Custodial Engineer”. So I check applicant work history. Many times just the threat of such a background check will make (bad or suspect) applicants simply evaporate.
Some try me anyway but I always catch them. I figure my job is to give the department manager a selection of candidates to choose from that meet the minimum qualifications he or she provided. If that slate of candidates doesn’t fill the position I drop down a rung and see who is left. I NEVER send the fraudulent resumes to the hiring manager. Those get returned with a copy of the results of my check applicant work history search and a canned (but polite) rejection letter. In truth they really don’t deserve it but I’m still representing my company when I write to applicants, so I play nice.
This is especially true in the case of doing executive background checks. I still dislike the liars, but sometimes these same frauds end up in executive positions elsewhere – and believe me once in a position of power those folks willing to lie to get a job can be equally ruthless in keeping it. So I make sure to play nice, even when they don’t.
Read more about checking applicant work history and employment background checks in general:
Executive Background Checks and the Employment History Background Check – Do It, Do It, Do It!
Pre-Employment Criminal Background Check Companies – They’ll Save Your Bacon
Landlords Who Tenant Screen Always Come Out Ahead
Posted by Andreas Schultz in Real Estate on June 28th, 2009
Why it’s a big secret that landlords who tenant screen are more successful with their properties than landlords who don’t is beyond me. A quick but thorough review and verification of facts provided on rental applications makes everyone (both landlords and tenants) rest easier at night. It’s always been my experience that people who wish to live peacefully with their neighbors are usually willing to give up a small amount of their privacy to do so – and don’t mind if I tenant screen – so long as they know everyone else goes through the same process.
I usually present my background check consent form prior to giving out any applications. If the prospect hands me back a completed and signed consent form, they get to fill out a renter application form. If they don’t fill out the consent form, no rental application, no exceptions. There is nothing more disruptive to your peaceful investment property than trying to evict a stubborn, deadbeat tenant – so don’t let them in the door in the first place. Get the signed consent form, tenant screen them with your renter credit check service, and if they’re no good – don’t rent to them…. even if the bank is screaming at you for money. Believe me – it’s easier to find a new applicant than to evict a non-payer AND find a new applicant.
When times are hard and units are empty you have to hold your nerve and keep advertising until a good tenant comes along. How do you know when you’ve got a decent applicant? Simple. Clean credit history (but at least some history), good prior landlord relations (if any), and verified source of stable employment. Remember… you’re not just checking out the renter at this point. If he works for a seasonal employer – like construction – you need to ask what he or she does during the off season.
Have some faith, and do your homework. Tenant screen. Investigate people who turn in renter applications. Do not let your guard down, and keep your rates low. You’ll attract good, stable tenants and keep them a long time. That… is the secret to running a successful investment property.
Read More on the Tenant Screening Process:
Renter Credit Check – Sample Search Documents from Landlord Tenant Credit Checks
Using A Credit Report Background Check Service – How to Keep It Cheap But Legal
The Tenant Credit and Background Check – What to Ask Your Applicants
Forex Binary Options Broker – Cheap to Start and Commission Free
Posted by Be Wise in Day Trading Options on June 19th, 2009
Forex Binary Options Zero Commission Broker
I had trouble finding a forex binary options broker online, but now I can trade binary options on most of the major forex cross rates I want, whether it’s Dollar/Euro, or Yen/Dollar, or Dollar/Pound. I am very pleased with the informative articles at the trading binary optionsblog as well. (See a comparison of the two leading retail binary options broker platforms)
Trade Binary Options on Any of the Following Forex Cross Rates
Here are the currently trading forex binary options at my broker:
- US Dollar/Canadian Dollar
- Euro/US Dollar
- US Dollar/Pound
- US Dollar/Swiss Franc
- Yen/Pound
- Yen/US Dollar
- Yen/Euro
- Australian Dollar/US Dollar
Any of the above forex option cross rates can be currently traded commission free.
Other Binary Options Trading – Stocks, Indices, and Foreign Stocks
Other securities on which binary options are presently trading include securities and indices such as:
- General Electric
- Microsoft
- Nasdaq Index
- BMW
- DAX Index
- Volkswagon
- Siemens
These stocks plus several other well known, highly liquid securities are trading on the binary options exchange every day. Nearly all the binary options have both an hourly expiry binary option or an end of day expiry binary option.
Binary Options Trading is Cheap!
It’s cheap and easy to open a binary options trading account. My broker charges no commissions on trades and it only takes a hundred bucks to open an account. Last I looked they were even offering a bonus of $100 on a $500 initial deposit. How cool is that when they give you a hundred bucks just for trading with them?
Find a Forex Binary Option Broker Today
Other Information Available About Binary Options Brokers:
Broker Binary Options: Trade Options with Just $100 to Start
Binary Options Trading: The Puts and Calls of Binary Options
Binary Options Trading Tips: The Hedge and Double Strategy
Free Options Trading for Beginners
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