Reasoning Theorems of Success

Think about this one. Has your broker EVER recommended that you place a stop-loss order on a stock after you have bought it? Ninety-nine percent of the brokers never think about helping you protect your capital. In fact these brokers are not taught this very important technique. The brokerage companies don’t realize that by helping you get out of a poor position it gives them more of your money to trade again to make them even more commissions which is all they really care about.

You see, they don’t want to recommend stops because if you sell out you might take your money out and that’s a no-no. Or worse yet, you might blame the broker because the stock went up after you were out and now you are mad. Let me draw on my 30 years of experience as a trader and let you in on a little secret. Three weeks to 6 weeks after you have been stopped out of any position that individual issue is going to be lower than where you sold it in about 75 to 80% of the time. When you are at the gaming table you must go with the odds.

I hear your protests. “But I’m not a gambler, I’m a long term investor” No, you’re not. You are just as much of a speculator as the day trader; the only difference of the time frame. To make a substantial return on your investment you must keep you funds working with profitable stocks or mutual funds all the time. You cannot afford to buy something and have it drop in price and then wait months or years for it to come back “even”. It is not “even” because you have lost the investment power of your cash by not being in some other stock that is going up NOW not some nebulous time in the future.

Stops are easy to figure. Don’t ask your broker; he probably doesn’t know. Very simply you might place a 10% stop below the low of the previous 2 weeks and keep moving it up every Monday morning. Let’s take a look at what might have happened in this recent crazy tech market. Microsoft went to $119 and as of this Friday, May 26 was $61; WorldCom went to $64, now $37; Palm $165, now $21; E-trade $72, now $15; Ask Jeeves $190, now $20; Red Hat $151, now $17 and there are plenty more like this. Many are 80% lower and it is doubtful we will see new highs in our lifetime. If you owned any of these last year and did not have a stop sell you are hurting today.

And if you did get stopped out and it went to a new high you could buy it back again placing the same kind of stop. Using this method to sell is letting the market tell you when to get out and not guessing that this is the high. You don’t know. Neither do I. Let the price action tell you. This is what the professionals do.

You must learn how to use stops or you will never make real money in the market.

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
http://www.mutualfundmagic.com
and discover why he’s the man that Wall Street
does not want you to know.

Copyright 2005

This is a common occurrence. You heard people say that ‘the real
estate sector is hot’ or ‘the internet sector is growing
rapidly’ or ‘let’s buy the oil sector now. Energy price will
rise again’ next year. Sounds familiar? It is. This is because
these people encouraged you to invest in specific sectors.

What is wrong with sector investing? There is a common believe
that rising tide will lift all boats. Therefore, when internet
search is hot, then every companies in the field from Google to
Looksmart will rise two to three folds, right? Wait a minute.
Have you looked at the graph of Looksmart lately? If you
haven’t, here is the two year graph of Looksmart Ltd. Let me
show you another example. Everybody knows about the rising
energy price, most notably oil. Therefore, if you look at the
five year chart of energy companies from Chevron and the like,
you would expect similar upward trajectory movement, right?
Wrong. Take a look at a five year chart of an energy company
IvanHoe Energy Inc. here.

So, should we look at sectors when investing? Absolutely. Sector
search is very useful during your preliminary research. Auto
sector is down. This might be a good place to find stock
bargains, right? Yes. Should we blindly invest in any stocks in
the auto industry? The answer is no. This goes back to the
purpose of an investor. Investor exists to make the greatest
return of assets possible while minimizing risk. The sensible
way to do that is to compare investment alternative and pick the
investment vehicles that may give investors the highest return.
In the case of stock, we are looking at the expected profit of a
company with respect to its stock price. This is the basis of
the return on investment of stock investors.

Therefore, once you identify that the auto sector is a bargain,
your homework continues. You should find companies that can give
you higher return than the risk free ten year treasury bond.
Currently, the ten year is yielding 4.52%. Since 4.52% is risk
free, we need to find stocks that can yield more than 4.52% for
the foreseeable future. Yield on a common stock can be
calculated by dividing earning per share (EPS) with the stock
price. If you invert this ratio, you will get the most commonly
discussed ratio in the investment community, Price Earning (P/E)
ratio.

Sector search is very useful in identifying future investment
prospect. However, do not just blindly invest in stocks in
specific sector. In the long run, stock price is correlated with
the amounts of profit it can produce. Stock price does not
correlate to the performance of other peers in the industry.

Is it hard to get rich? If you’re young, not really.

Its fun to play with financial calculators and see what
might happen.

If you have just graduated from college and are about 22
years old and if you put $100 a month in an IRA that
grows at 10% a year, you will have
around $865,000 at age 65. 10% a year is about what you
should expect if the money was placed in a no-load S&P
500 Index Fund.

So for about $23 a week or $3.30 a day you will be close
to being a millionaire.

If you contribute the full $4000 a year allowed right now
(rising to $5000 in 2008), you would have $2,600,000. For
about $11.00 a day, you would have a small fortune.

If you didn’t want to take a chance with the stock market
(after all, it goes down sometimes), you would
still have over $600,000 if you could get a 5% return.

If your grandmother leaves you $10,000 in her will and you
invest it for the same 43 years at 10% without adding
another cent, you’d still have over
$600,000 if you placed it in a tax sheltered account.

Time and the power of compound interest are on your side.
So if you’re in you twenties, do whatever you have to
scrape together that IRA contribution. Every day you
procrastinate is another day your money is not working
for you.

However, most people in their twenties need the money for
more important things, like new cars and HDTV’s. You also
have student loans to pay, children to raise and the new
mortgage to pay off. But if you prioritize your life and
stick to a budget, $11.00 a day is doable, although you
might have to scrimp here and there.

Consider that most people are spending their livings
paying the freight for borrowing ‘other people’s money”.

If you save and invest, other people are paying you to use
your money. It’s a lot more fun to see your money working
than having to work yourself.

It gets harder to amass wealth as you get older. If you wait
until you’re 32 and put away $4000 at 10%, you would have
about $975,000, still a respectable amount.

At 42, you’d only be able to accumulate approximately $350,000.

If you’re 50 and can start putting $5000 (those over 50 are
allowed “catch up contributions”) away today, you’ll have
around $175,000 at age 65.

Everyone knows that Social Security is not going to allow for
a comfortable retirement. Even if the plan can continue to
pay out forever, which is questionable right now, the money
you receive will be far from generous and is subject to
taxation.

You might have a good pension plan at work now, but will
you be able to hold your current job to retirement?

If you have a Roth IRA, you can withdraw the money tax free
after age 59 . Imagine having a million tax free dollars
you can play with. It will well make up for the small
sacrifices you have to make to get there.

No matter what your age, start saving what you can now
- today. Even if you only amass $100,000, you’ll be
better off than most people entering retirement.

Chris Cooper is a retired attorney who has spent several periods of his life deep in debt. At http://www.credit-yourself.com he tries to pass on some of the knowledge he picked up in his journey to become debt free.

It is called “dividend capture”. This strategy is executed
when a trader buys a stock just before the ex-dividend date, so
that he or she will be a shareholder of record on the record
date, and will receive the dividend. Because the stock falls by
the amount of the dividend on the ex-dividend date, the
strategy calls for the trader to then wait for the stock to
move back to the price where he or she bought it before the
ex-dividend date. At this point, the stock is sold for a
break even trade. Thus the dividend is received, or captured by
the trader with no further exposure to the movement in the
stock price after it is sold for a break even.

When attempting to execute this short term trading strategy,
look for stocks with high volume, and a relatively large
dividend payment. Higher volume facilitates exiting the
position without affecting the stock price. The high dividend
allows for more profit potential. Use of a discount broker is
also beneficial as it will reduce the overall cost of the
trade, and increase the return of implementing the strategy.
Please note that this is an aggressive trading strategy, and
not appropriate for everyone. Study the concept. “Paper
trading”, or practicing the strategy before using actual money
is always a prudent step when implementing new strategies
into your portfolio of trading tools.

For more FREE trading tips, enter your email address at: http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

Then visit our sister site for even more great trading tips at: http://fastprofits.blogspot.com

(If you’d like to read more about where to get a payday advance go here. A frequently vented complaint by antagonists of the no fax fast cash advance business bears upon the annual interest rate customarily charged on short term payday bridging loans that can amass to a multiple of the cash advance issued.

The Annual Percentage Rate or “APR” is merely a well established elementary metrics to figure out the amount of interest a borrowing client would pay as carried forward to one full year. This APR lends us an acknowledged tool to realistically figure out which vehicle ensures a higher / lower ultimate drain on resources impacting the deal, including coincident expenses called for.In point of fact, the p.a. rate has established itself as a unquestionably convenient blueprint for financing with a duration of at least 12 full months .Yet, in respect to short term payday cash advances the annual rates of interest are unmistakably less practicable.

To illustrate this point, let’s compare payday loans to taking a taxi home from the train station. It might cost you about 40 dollars to get home in this manner. So forty dollars constitutes anythin but a trivial sum to spend on such a ride still a great number of people do it because it’s convenient and it accommodates a specific requirement. Sure, we all know the alternative: rent a car for the whole day for 40 dollars including as many miles as we wish.

Alright, let’s just assume we do that— rent that car and drive 400 miles in the course of the day we have rented it. Defenders of APR are likely to tell us that you ought to annualize these figures to establish a statistically valid correlation… So to illustrate our point, let’s take the price of our taxi ride ($2 per mile multiplied with 400 miles) resulting in: $800.00. The annualized equal of the car rental solution via that ride by taxi gives us $40:$800. Obviously, as everyone should have realized that car hiring of ours would most certainly not have been our best option, regardless of how much more expensive the annual interest rate would have tallied up in this case.

And exactly the same holds true for short term payday advances. Because after all short term payday bridging loans are restricted to two weeks only, they’re not annual loan arrangements. The seemingly high annualized rate of interest makes little sense insomuch as this type of loan doesn’t span the full year. The absolute interest charged amounts to close to 15-25 percent for the loan.

The answer to this question, in various cases, is yes! Locales such as Costa del Sol nowdays appear dear for most budgets still, there are still oodles of good buys to be had in various parts of Spain. Apartments in that Costa Blanca are still on sale commencing at 100,000 euros, (£69,750) & villas commencing at near 190,000 euros, (£132,500). Around Murcia & that Costa Almeria property is proportionally lower priced with renovation jobs commencing around 75,000E (£52,300) & villas commencing at near 160,000 euros, 112,000 pounds When a person buys off plan it will ensure that that value of that property rises as that the project unfolds & nears completion. Folks buying early in that whole building process win that best deal & return on investment.

Property around Spain is still rising around value and with the easiness of access from all European airports it perseveres in being the most loved destination for all year sun. It might be an excellent investment, with the addional reward of incredible breaks or maybe an ideal location for full time occupation.

There remain gorgeous sections of Spain that the excursionists & investors haven’t yet discovered. For instance the Alpujarras area of southern Spain is a stunning, mountained area which is a bounty of unexplored tranquillity and amazing prices. The yellow strands of Costa Tropical aren’t too far away and access to airports is straightforward through Granada or Almeria.

Stretching to your south called your foothills called your Sierra Nevada, your Alpujarras holds your regional capital city, your seaside community called Almera, as its south-east border, with your seaside community called Motril in Granada making up your south-western margin. The area includes a rich contrast in climate inside a limited area - you can be lazing in a sub-tropical strand barely 20 minutes called your home or you might be skiing in your snows called your Sierra Nevada barely 2 hours distant, depending in your mood and your time called year!

Property values in the vicinity are nowadays at preposterously great levels for near near Spain. A hamlet house around Valor needing repairs for near near 26,000 euros (less than £20,000). A 2 bed renovated home nearby for near near 155,000E (£108,165). A 3 thousand square metre plot for near near 26,000E (less than £20,000). New 2 bed apartments for roughly 85,000E (£59,320). Cortijos needing renovation for near near near 50,000 euros £35,000. Renovated cortijos for near near near 100,000E (£69,780). Why not have your own finca developed for roughly 120,000E (£83,750) or obtain a entirely working commercial olive producing farm - twenty-four hectares for near near 495,000E (£345,450). There are opportunities to purchase hotels, restaurants or bed & breakfast firms to supply you with a working income in this up-and-coming vicinity favored by the local population for near near their time off - and all of this at values the remainder of the country has long since forgotten about.

Investors would do well to act fast though. News of this previously shrowded region is coming out. Prices are starting to go up and so in the next few years the bona fide bargains here should be a thing of the past.