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Successful Investing For Income In Shares Or Forex

Successful Investing For Income In Shares Or Forex

Investment for income is generally a long-term proposition. It implies stability and it makes particularly good sense for people who do not expect to become market experts or security analysts.

In fact, there are respected authorities who state flatly that the investor who seeks anything more than income from securities must be classed as a speculator, a risky role to play for any but the most sure-footed professional.

Long term, it should be noted, does not mean forever. It does not mean buy-and-forget. Whatever your holdings, you should review them several times a year and stay alert for news indicating whether the prospects are good that your companies will continue to maintain their present level of earnings.

Unless you have strong reasons for dissatisfaction with an income stock, however, there is little to be gained by switching. Generally speaking, there is not enough difference in the yield, say, from two good-quality utility company stocks to justify the expense of selling one and buying the other. (Although 100 shares of a stock paying would produce more income annually than one paying .50, it would take more than a year to rationalize the commissions and taxes paid to sell the latter and buy the former).

Dividends have their own way of accumulating. Given the steady upward trend of stocks in this century, a well-chosen security will reward the investor who holds it patiently. In even five years there can be a dramatic increase in yield. Take, for instance, Central Illinois Public Service CIP on the ticker tape—a moderately well-rated small utility company serving agricultural, mining, and manufacturing areas of central and southern Illinois. In 1953 it hit a low of 17⅛ which meant a 6.7 per cent return in a .20 dividend. In 1955 the dividend was upped to .35; in 1956 it went to .60; in 1958 to .68; and in 1959 to .76. It is now .92.

Meanwhile, its price, reflecting the increased dividend, has more than doubled. At a recent quotation of 44, the yield was a respectable, but not unusual 4.3 per cent. The investor who bought at the 1953 low, however, is now receiving a quite spectacular 10.7 per cent return.

At this point, day-to-day dips and rises in Central Illinois Public Service mean little to the investor of seven years’ standing. By now the dividend would have to be cut more than a third before he found himself where he started, and 64 per cent—to 70 cents—before he reached the 4 per cent return of the man who bought at 40. These drastic cuts are not inconceivable. But the cushion for the investor who bought in 1953 is considerable. There would have to be some quite violent reversals in the price and prospects of CIP before he would be moved to sell out.

The problem of stability is a beguiling one. For many investors it represents the compromise between safety and risk. Safety, as we will see, offers a discouragingly low return. Risk is the privilege of those who can afford it exhilarating when one has dared and won, but painfully, most truly felt by the loser. Somewhere in between, most investors decide, there must be a sensible course, commensurately rewarding and so there seems to be. Stability is the touchstone. The gauges of stability are many.

The one hazard is that they are inevitably based on past performance. No one can say for sure when the downhill slide will begin, when the earnings will diminish, when the seemingly unshakable dividend will be cut or passed.

One gauge, nonetheless, is the consistency and longevity of a company’s dividend payments. A company that has rewarded its shareholders through fair weather and foul must not only be considered strong, but reasonably proud of its performance and eager to maintain public confidence in it.

These records are easy to check. Any broker, for instance, can supply you with a list of the 50 companies with the longest records for consecutive annual dividend payments. It is an impressive group, headed by the Pennsylvania Railroad, which has managed to pay a dividend every year since 1848.

There are no dividends from investing in currencies but you can make more money from a good movement in your currency pairs.

Using Forex software will help you to predict when and which ways different currencies are likely to move.

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Managed Forex Accounts EUR/USD Outlook 2008 1/3

Managed Forex Accounts EUR/USD Outlook 2008 1/3

The US dollar was the big story in 2007 — if you were selling it. Compared to 2001, the value of the dollar has gone down by 40 percent against the euro. And values at the beginning compared to the ending of 2007 were significantly down: the dollar was down about 13 percent versus the euro, 10 percent versus the yen, and 8.5 percent versus the pound sterling. Its value was at such a record low that supermodels and popular rappers made public their preference for getting paid in Euro, no dollars, please. The US dollar did stop skidding towards the end of 2007, but the question now becomes: has the dollar bottomed out or will the slide continue in 2008?

Why the Dollar Weakened in 2007

The dollar seemed so weak in 2007 because the rest of the global economy continued to grow even as US growth stalled, due in part to steady demand from the Middle East, China and India markets. Countries acted more independently, as illustrated by the Australian central bank’s decision to increase rates to stave off inflation at precisely the time the US Federal Reserve was cutting interest rates. Before December in fact, interest rate cuts happened only in the US. In short, some sort of decoupling occurred in the global economy, and this was a key factor to the strengthening of the other currencies and the weakening of the US dollar.

There are signs, as we begin 2008, that the phenomenon will no longer obtain this year and the global economy will again move more closely in step. In the latter half of 2007, economic growth in the UK and Canada slowed down indicating that the two countries were being weighed down by the weak US economy. In addition, the shock waves of the US subprime mortgage crisis have also shaken the financial markets of many countries, particularly the UK, where growth in the past years has depended on housing, mortgages, and the public sector. There are also signs of strain in the Eurozone, notwithstanding the ECB’s hawkish position on monetary policy. The pressure to reduce rates will increase if growth continues to weaken further in the US or in other countries. The pressure already forced the UK Bank of England to cut rates in December and more cuts are forecast for 2008.

Interest rate cuts will be the thing to watch in the currency market. The US Fed has already lowered interest rates 100bp in 2006 and another reduction will be more in line with expectations; but if the Eurozone begins to lower rates, this would be a significant departure from current policy, which could signal a major change in the outlook for the euro.

Where US Economy Is Going

The big question is whether or not the US economy is going into a recession, which would seriously impact global growth. Majority of the American public thinks the economy is already in recession, according to polls released in December. Public perceptions notwithstanding, economists think otherwise. A Business Week survey on 54 economists in December showed that the group believes the country will reflect a 2.1 percent growth by the end of 2008 (it registered 2.6 percent growth in 2007). They believe that although the first half of 2008 will be difficult, consumer spending will not stop, albeit more restrained. Fundamentally, the forecast of no recession rests on the assumption that the Federal Reserve will continue its round of rate cuts. Although financial losses in the subprime sector will continue, consumer confidence will depend largely on the Federal Reserves actions to support economic recovery.

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How A Forex Or Stock Broker Can Help You Succeed

How A Forex Or Stock Broker Can Help You Succeed

A Forex broker or Stock broker will be of great importance to you In every investor’s life the “broker” is a figure of prime importance. It is through him that all securities transactions are handled; there is no way you can buy or sell stocks listed on any national exchange except through his services.

In the trade, he is known as a registered representative, a title that has now supplanted the old designation, “customer’s man.” He is a registered employee of a brokerage firm, preferably one which is a member of the New York Stock Exchange. He is not a broker as such, but is the liaison between you, the customer, and the firm’s commission broker who executes orders on the exchange floor.

What He Does

The representative’s job is to extend to investors all the services of his firm. He will, first of all, transmit your orders to buy or sell securities stocks or bonds, listed or unlisted (over-the-counter), domestic or foreign, in round lots, odd lots, or piecemeal through the Monthly Investment Plan. He will also buy or sell rights or warrants which, in simplest terms, are options to purchase a certain number of shares of a stock issue. He will arrange the purchase or sale of commodity futures grains, coffee, cotton, soybeans, whatever you are interested in.

He will place any type of order you specify: at the market, limit, stop. He will buy on margin or arrange a short sale.

He will be available for consultation on the merits of particular stocks or industrial groups, or for analysis of your entire portfolio. He will supply stock studies, newsletters, market analyses, and whatever other literature his firm issues. He will hold your securities for you in the firm’s vault, collect your stock dividends or bond interest, and send you a periodic statement on any shares held for your ac¬count.

His fee: the standard commission you pay on the purchase or sale of securities. There are no other charges for his services (although you will pay interest, naturally, on money you borrow from him for a margin purchase).

What He Doesn’t

Your representative will not and should not serve as a stock market tout or tipster. Unless you request him to, he will not volunteer advice on buying or selling. He will not choose for you between two stocks that seem equally attractive. He will not hustle you into the market and then sell you out; the fast turn-around is not his way of doing business.

What a Brokerage House Is Like

Brokerage houses are pretty much like offices everywhere, except for the presence of the fascinating paraphernalia of the market. The customers’ room in the usual large brokerage house has a quotation board on one wall. The arrangement of items may vary, but basically they all offer the same data.

For each stock listed—and it is a pretty large board that shows much more than the leaders in any particular group— the quote board will indicate the present and past year’s high and low, the previous day’s opening, high, low, and closing prices, and the successive prices of the current day’s sales.

There may also be a panel of commodity prices. Very likely there will be either a ticker machine or a projection of its tape on a screen which enlarges the figures sufficiently for them to be read across the room. There may also be a Dow-Jones ticker which taps out news, statistics, and whatever economic and financial information the extensive D-J organization may dig up.

Generally, chairs or benches are ranged in front of the quote board so that customers may take their ease while learning what the new day brings.

This is all for your convenience. Of course, you can get the same information simply by phoning your broker, but his office welcomes your visit.

What you do not see is your firm’s research department, accounting department, and vault—though you can if you wish. The research department consists of a staff of securities analysts who study and report on the performance and prospects of various stocks. Many analysts hit the road frequently to examine companies firsthand.

Some specialize in oils, others in railroads or utilities. Much of their work is continuing study of one company after another, but they are also available for specific analyzes at a customer’s request. (No one will do a special run-down on duPont to see whether you should buy 10 shares, however!)

The accounting department is, of course, responsible for keeping track of the thousands of transactions completed, and for maintaining records of each customer’s position.

Many brokerage houses are also investment banking firms, prepared to share in underwriting new securities issued by companies seeking more capital. As will be explained in more detail further on, a company issuing stock does not sell directly to the public. It sells the entire issue to a syndicate of underwriters, which resells it at a small mark-up, or “spread,” to the public.

In this case, no commission is charged because the broker’s expenses and profit on the distribution are included in the premium you pay. (When 10.2 million common shares of Ford Motor Company were issued in 1956, the largest distribution in financial history, they were sold to a syndicate of more than 700 underwriters at per share.

The price to the public was .50 per share or a spread of .50. As spreads go, this was very small—even though it meant a total of ,300,000 to the syndicate.)

Brokerage houses may also “take a position” in a stock. This simply means that partners or officers, or the brokerage company itself, may follow their own advice and buy one stock or another. Since the subsequent performance of these stocks may depend on how many other people become interested in them, brokerage houses scrupulously report their holdings to the public.

As a customer, you can then decide whether Blank stock is a good buy because your smart broker has a piece, or whether his report on Blank is tinged with undue enthusiasm because he holds it.

If you are using a Forex broker he will be doing a similar job for you, but he will sell you the currency pairs you are interested in.

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Managed Forex Accounts EUR/USD Outlook 2008 3/3

Managed Forex Accounts EUR/USD Outlook 2008 3/3

What the Eurozone Outlook May Be

The performance of the EUR/USD is heavily influenced by economic prospects in the Eurozone. Part of the reason the EUR/USD rose to its all-time high of 1.4968 was while the US Federal Reserve lowered rates by 100bp, the ECB raised its rates by 50bp. It was feared throughout 2007 that the strong euro would adversely impact the Eurozone economy. On the contrary, growth was buoyant, as Germany’s exports increased and boosted its trade surplus. Demand within the Eurozone was resilient and emerging markets spurred growth. Taking a cue from the lessons of 2004, when EUR/USD reached 1.36, Eurozone corporations were able to manage their foreign exchange risk much better in 2007 by increasing local production to minimise the effects of a weak US dollar.

Going forward into 2008, growth is finally starting to slow down. Business confidence in Germany slid to its lowest level in two years amid fears that higher interest, tightening credit, and rising inflation could adversely impact the economy. Both the European Commission and the ECB believe that 2008 growth will be less than initial estimates. The ECB has stopped making public statements about the Eurozone being immune to infection from the US business cycle; recent injections of liquidity into the financial system now prove otherwise. The last statistics on consumer spending and other indices for 2007 all showed lower numbers than the previous month. If the ECB does not lower interest rates in the following months, there could be a serious economic slowdown for the year.

What the Chances of an ECB Rate Hike Are

The year ended with the ECB President reminding financial markets that the ECB will be unrelenting in its program to control inflation and its effects, and they will not be pressured into following the US and UK interest rate cuts. Because of the ECB’s heavy focus on price stability, the market was alarmed when the bank’s 2 percent inflation target was breached in the second semester of 2007. But since the last ECB rate increase in June, they have not made good on their repeated threats to hike rates further. On the contrary, their actions seem to favour a more liberal monetary policy. When LIBOR (for 3-month Euro and 1-month sterling) rates hit record highs in December and did not come down, the ECB infused 0 billion in liquidity into the banking system. It helped to bring down LIBOR rates, but questions remain as to how long they will stay low. Given these considerations, while a rate increase is possible, it is not really that probable. The prognosis is that rates may be cut first before they are raised again, subject to inflation pressure (such as oil at 0 a barrel). But if inflation remains steady or slows, the ECB is more likely to cut rates.

Summing Up

As in the past year, interest rates will be the main driver of movements in the currency markets. There is the chance of the US economy and the dollar recovering in the second semester, but that will depend on further interest rate cuts by the US Federal Reserve and the European Central Bank. A mere shift in ECB monetary pronouncements from hawkish to more neutral tones may be enough to stimulate US dollar recovery in the second half. There are signs of re-coupling in the global economy but it may take until the second/third quarter before this becomes more manifest. For the short term, traders might want to consider that January is usually a good month for the dollar.

The currency markets will really begin to shift (as everyone involved in it is hoping) when the dismal news stops and the cheerful news starts coming. Former US Federal Reserve Chairman Alan Greenspan said in an interview banks should not prolong the agony: it is better to take all their losses now and let the market bottom out so that the economy can start to recover.

Short-Term Technical Outlook: Top Up before Downturn

The expectation in the last quarter was there would be a rally to 1.4580 followed by a top and a subsequent reversal. Looking at the technical data, there may be good reason to look at 1.4309 as the most likely terminus on the wave iv (part of the 5-wave rally that began at 1.3261) of the larger sequence of 3 waves. The wave v of 3 may just burst through 1.4967 over the next four to six weeks. It is reasonable to target the 1.5364 level — the 61.8 percent follow-through extension from i to iii. There is enough data to support the bullish bias over the short term, as extremes in a bearish sentiment for Euro and a bullish sentiment for USD have been detected. It is possible this rally could continue through towards 1.6000 in keeping with the tendency of currencies to exhibit extensions on the 5th wave and to follow through with a blow-off top. The formation of the pattern is the key aspect in determining when a turn is about to occur (in a rally or a decline). It is important to follow the current pattern.

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Managed Forex Accounts EUR/USD Outlook 2008 2/3

Managed Forex Accounts EUR/USD Outlook 2008 2/3

What Rate Cuts Can Be Expected

The US Fed has not exactly been forthcoming in its rate cuts; rather, it lowered rates very reluctantly in 2007. It has given only what the currency markets have already priced in. The basic reason for their hesitation is the desire to contain inflation ? the very same concern that weighs heavily on all other central banks in the world. The Fed wants to make certain inflation remains under control. Doing that has been more difficult because of the high energy prices coupled with the weaker dollar. Thankfully, indications of energy prices reaching 0 per barrel are no longer in circulation.

The market expects the Fed to further ease interest rates another 25 to 50bp lower; however, this is not the only option. They may want to further explore their other options, including the Term Auction Facility they introduced in December. But these options, including a cut in the discount rate, are limited especially since LIBOR rates have remained at high levels. Even as late as December, Treasuries posted one-day increases that were the highest seen in the last three years.

Who Else Might Make A Play

In the final two months of 2007, the crumbling markets were shored up by massive investments from sovereign funds. Temasek Holdings, owned by Singapore, invested .4 billion in Merrill Lynch; state-owned Abu Dhabi Investment Authority plowed .5 billion into Citigroup; and, China Investment Corporation invested billion in Morgan Stanley. Sovereign wealth funds have been in existence since the mid-twentieth century. From an estimated 0 billion total size in 1990, these funds are now thought to be worth trillion. The states of Norway, Singapore, the U.A.E., Saudi Arabia, Kuwait and China have between them an estimated trillion available for immediate spending. Given eight more years, these funds may have total capital of trillion, continuously built up from their natural resources and foreign exchange reserves. Investments from sovereign wealth funds have ? and probably will continue ? to be significant factors in helping the US financial markets recover.

How the 2008 US Presidential Elections May Affect Financial Markets

The historical trend shows more bullishness for the US dollar when Republicans gain leadership than Democrats. Whether this trend will hold depends on how close the 2008 elections will turn out. The Stock Traders Almanac makes the general observation that election years show modestly positive growth in the US stock market. In the last five decades, election years have shown a 9.2% average gain in the Dow Jones index.

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How Cyclical Patterns Can Help You Make Great Profits From Shares And The Forex

How Cyclical Patterns Can Help You Make Great Profits From Shares And The Forex

A stock or currency that is at its own yearly high must be judged for the possibility of going higher. It would quite possibly be a risky buy unless the upward momentum were pronounced and the indications of further progress were clear.

The width of the range also has a bearing. A stock near the high of a 10-point spread between high and low is likely to be less volatile than one near the high of a 50- or 60-point range.

The implication is that if a stock can cruise upward through a range of 50 points, it can with equal ease slide that far downward. Obviously, stocks do not operate forever within predictable ranges. But an issue that has caught investors’ eyes, and has started to run ahead of itself, its group, and the market can be considered to have a future. Its high-low levels of the past can be viewed as less significant, and the investor’s effort can be bent toward determining how far the run will go.

A stock at mid-range presumably has a demonstrated potential for achieving a higher level, but the course of its action should be plotted to see whether it is at mid-range through a series of small ups and downs, or whether mid-range is simply the current point of a downward slide—or, for that matter, the current point of a gradual climb.

A stock or currency at its low should also be examined for hints as to the reasons for this state of affairs. It might best be shunned—but not too quickly.

For if it seems inherently sound, although low in relation to its group or the market as a whole, it may be a sleeper, the kind of depressed, overlooked, out-of-favor stock that offers a fine opportunity for the investor who is not afraid to run against the tide.

Theoretically, at least, this is the kind of bargain that diligent investors are supposed to dig up for themselves. Be clearheaded; most depressed stocks are hovering at low levels for a reason. But the market is capricious enough to low-rate many issues for reasons having nothing to do with fundamental values.

The depressed issue usually offers a better possibility for improvement than the generally depressed group. If oils or chemicals or rails are unfashionable as a whole, there is, in most cases, a large reason for it. Customers are over inventoried, sales are down, a competing industry has cut into a market something has occurred which requires a fundamental correction before the industry will again seem attractive.

The depressed market, like the depressed stock, often has great possibilities—if the investor can satisfy himself that he is getting in at an appropriately low level. The low of 1953 was a lovely opportunity. DuPont was under 100, General Dynamics was in the 30′s, Union Carbide in the 60′s, Central & Southwest was at 19 everything that is solid, glamorous, and soaring today was at bargain basement prices.

The alternatives are many. The combination of factors that bear on any one issue at any one time is almost incalculable.

One final point is personal. Some rigor must also enter into the investor’s calculations. Caution is necessary and praiseworthy. But once an investor has decided he is operating as soundly as he knows how, he must be prepared to act. It is a human failing to want to be right.

There are few feelings more discomfiting than knowing one has figured wrong. In investment, however, this can be an extremely hampering element. The unhappiest kind of wrongness of all is to be unable to take the bold step, and then find that one has missed the boat.

Decisions infected or paralyzed by doubt and fear are no decisions at all. The point comes in all investment decisions when there is no more figuring to do, when no more answers can be squeezed from the facts, when results can only be revealed in an unknowable-future. At that point, the investor must take his courage in his own two hands and act.

Selling is not necessarily the opposite of buying. While there are the usual factors about the stock, the industry, and the market to weigh, one crucial fact is known: the price you paid. The amount of profit or loss, therefore, is always settled for the investor approaching a decision to sell. If the profit is satisfactory, or the loss insupportable, sell.

There may be further profit to be gleaned; the loser may turn around and cut the loss a few points. But if you believe you have an ample return on your investment and are ready to realize on it, don’t delay. Sell. Or, if you are thoroughly convinced that there is no advantage in waiting for the sour performer to improve, sell. Take the loss as a tax deduction, and use the funds you have salvaged to get into something better.

Beyond these fairly clear-cut situations, the confusions mount.

Many investors these days avoid them by taking no action at all, arguing that any considerable profit they have realized will be so heavily reduced by taxes that it’s just as well to ride along and see what happens and in a rising market, what happens is often very pleasant.

You should also make use of software in shares and Forex to help you plan your sales. This is becuase modern software has years of information in its database and can help you to predict the best time to sell for a good profit.

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Limiting Your Losses When Investing In Shares Or The Forex

Limiting Your Losses When Investing In Shares Or The Forex

When you buy shares, do not buy just one stock. Buy four or five at least. The most sophisticated professional can often do no better than pick seven winners out of ten selected. Suppose he had bought only the wrong three that he thought were right at the time he bought them!

When you invest in currencies on the Forex be just as cautious.

This is good way to limit our losses and help us stand a better chance of making a good return on our money in the long run.

The exception to the rule concerns cyclical stocks. These are stocks of companies whose well being depends on the ups and downs of business. Cyclicals are well known and are generally the heavy industries, both producers’ goods like machine tools and consumers’ goods like automobiles.

They feel the effects of recession and depression more than any other industries. In a recession they fall the most and in a comeback they rise the most. In order to play cyclicals you must watch the trend of business like a hawk the New York Times Index, the Federal Reserve Index and other measures and read the business section of the Times, the Wall Street Journal and Business Week, among other periodicals. You cannot hope to get the turning points either at the bottom or at the top, but you can recognize the early stages of a trend when you see them. It takes little examination of stock price charts to see that cyclicals move with general business conditions, and if we go back to the recessions of 1957 and 1960 we can see this. These are sample cyclical stocks.

Bethlehem Steel
U. S. Steel
General Motors
Black and Decker
Clark Equipment
Bucyrus Erie
Aluminum Company
Kennecott Copper

Now look at the price charts on the noncyclicals, and we can take just a few examples of these:

New York State Electric and Gas
Potomac Electric Power Company
Standard Oil of New Jersey

Obviously if things in the business world are getting poor, it is best to be in a noncyclical; and if things are starting to improve, it is best to get out of these and into a cyclical which fell during the recession. In the recession of 1960 I bought no stocks whatever. In July, 1958 I bought like mad and in the spring of 19611 spent about half of my time picking out buys in the market. I did not see the trend late in the fall of 1960. I was too conservative; but when I did invest I was very sure that the recession was over and that consequently my chances of success were good.

The quicker you get used to the sources of information on stocks, the better. If you are not willing to use these constantly, then do not buy stocks. The stock market is a most popular investment. Everyone is in it and everyone thinks he is an expert on it, that he knows the last word. To get in and try to make a decent return requires constant work and constant attention.

We should also be careful not to place too large a proportion of our money in currencies when we invest in the Forex. We may be certain that we know which way a currency is going, but if we have, say ,000 to invest in the Forex, it is best to not invest more than 5%, some Forex professionals will even say, no more than 1% of our pot should go into any one currency at a time.

My own system of investing is a simple one and is not based on any rule of purchase. Unless I know a company thoroughly and how much of its stock is out and how much overhanging the market in the form of options or founders’ stock, I do not usually invest. I have found that without securing as much inside information about a company as I can, I run a great risk. Inside information comes directly from the management or one step removed from the management. Hearsay information is of little use, particularly that which comes from brokers, unless the broker knows the management and gets his information directly from it.

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When To Buy Shares Or Trade The Forex For Maximum Profits

When To Buy Shares Or Trade The Forex For Maximum Profits

Ideally, you buy stock or currencies at its lowest price and sell at its highest.

Practically speaking, you do the best you can between these unpredictable extremes.

For, as you will see, the low does not become apparent until your stock begins to rise above it, the high is not established until your stock begins to drop away.

Although all of us could wish it otherwise, no bells, no flashing lights, no 21-gun salutes ever mark the bottom or the top.

Timing your stock transactions, therefore, is perhaps the most delicate element of investment, the decision requiring the keenest judgment and the surest touch. Experience helps, although success is not necessarily proportional to it. Veterans of the market, men who have been buying and selling for 30 or 40 years, sometimes seem to have a sixth sense about turning points, up or down, for individual stocks, or industrial groups, or the market as a whole.

On what seems to be no discernible evidence, they will mutter, “Well, I think the market’s going to fall out of bed,” and, sure enough, within a week there is a 9 or 10 point reaction. Yet newcomers may also acquire this skill with surprising speed.

Since judgment is a subjective quality, there are no firm rules for applying it. But there are generalities that can begin to define objectives and delimit areas of choice. And there are a number of techniques which attempt, more or less successfully, to better the average results obtained from trying to calculate timing arbitrarily.

Most professionals will tell you, right off, not to try for the extremes. The surest way to miss tops or bottoms is to wait for that last extra point of gain, that one more point of drop. Usually, an investor is considered to have done very well if he buys or sells within 5 points of the limit on a moderate-to-wide swing, within a point or two over a narrow range.

Another way of looking at the ideal objective is to reverse it: try to avoid selling at the low or buying at the top. This may seem to be superfluous advice, but both have happened many times when emotion entered heavily into judgment. Buying near or at the top is a temptation when a stock has been rising swiftly and steadily and the investor is eager to get aboard. The top, after all, is only relative.

New tops may be within reach which will make the current one seem a reasonable buying level. Selling near or at a low is tempting when a stock has slid downward and the holder has become disenchanted with it. The impulse is to sell out, take the loss, avoid further trouble, and be well rid of the dog.

The correctness of these decisions cannot be judged in the abstract. They depend, first, on your objectives (See Chapter 3) and on how closely or satisfactorily you have realized them. And they depend on your analysis of the several dimensions of highness and lowness involved.

Buying for income is relatively easy. The indicated dividend divided by the current price will give the yield in percentage terms. If the yield suits you, and investigation suggests that it is likely to be maintained, the price is right, whether it is in the high, middle, or low range for the year.

The problem of the buyer-for-income in recent years, of course, has been the fact that a rising market has reduced yields to some very uninspiring levels. The average yield of 10 big oils in the first quarter of 1959 was 3 per cent. For five chemicals it was 2.24 per cent. For seven steels it was 3.85 per cent. Only the better railroads were around 5 per cent, as a group.

Strictly on an income basis, the investor would do better at the savings bank than in oils and chemicals, and might be considered to have missed his market in these categories. The choice then is whether to argue himself into accepting 3 or 3.5 per cent (or 2.2 if he wants G.E., 1.5 if he wants Dow) in a sought-after category, whether to switch categories, or whether to ignore the market until conditions are more to his liking. There may also be a temptation to jump into a stock that for some reason is still yielding 5 or 6 per cent, although it would be foolish to do so without determining why it has maintained a high price/dividend relationship when everything else is low.

If the objective is capital gain, timing becomes more crucial. Somehow you must determine how many more points above the current price your stock is likely to go, and whether this will be a satisfactory profit, considering that possibly 25 per cent of it will go for taxes.

All rises must be predicated on earnings, or the expectation of earnings. Take, for instance, a stock selling at 50 and paying . This is a 4 per cent yield, which, we’ll say, is about average for this market this year.

Now, news gets out that it is possible that the company will earn per share by year’s end. Since a 50-per cent payout is the general practice, a dividend rise to is indicated.

Naturally, there will be a small rush toward the stock and a rise in the market price, probably to 75, or the new equivalent of 4 per cent.

This is the simplest sort of cause-and-effect relationship, so simple, in fact, that it practically never happens just this way. If prices reacted exclusively on good or bad dividend news or expectations, the market would be far more static than it is. Still, earnings and the benefits there from that shower down on the stockholder are the basic premise of stock activity.

The biggest complicating factor is the general absence of hard information. It’s rare that a jump in earnings can be positively pin-pointed, or pin-pointed before a market rise has taken effect. As a result, most investors have to contend with a vast range of other investors’ hopes, guesses, anticipations, and facts.

Furthermore, the stocks believed to have the greatest potential for growth usually vary the general pattern. The Dows, Minneapolis Honeywells, Owens-Cornings, and Minnesota Minings have long since been pushed to levels where their dividend returns are virtually meaningless, and where perhaps even their growth potential has been completely discounted.

Still, these extremities were more marked when stocks generally were yielding 5 and 6 per cent. Now that so many yield 3 and under, the growth specials do not seem so unreasonable at less than 2.

If you are trading shares or Forex you can also benefit from software that can help you time your purchases and sales for maximum profit.

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Recommended Tips To Make Your Forex Trading Take Off

Recommended Tips To Make Your Forex Trading Take Off

If you’re on the hunt for a profitable business opportunity, you might just be interested in affiliate marketing. It’s simple enough to understand, but you would be surprised at just how many people get things wrong when marketing. Pay attention to the information in this article. It just might help choose your next business opportunity.

Create a mini-site. A typical mini-site has just one page which is essentially a sales pitch culminating in an order. This page concentrates exclusively on getting your customer to make the purchase. There are no other distractions, no external links to other resources, and no unnecessary graphics. It’s quick to set up, and you get good conversion rates.

A great affiliate marketing tip is to have at least 30 pages of content on your web site. It’s a good idea to have many pages of content on your web site because it makes your site look more professional. An ideal amount of pages is 250.

You will find a lot of affiliate marketing material online available for free, so always remember to sign up for multiple newsletters and e-zines. You are not necessarily looking to copy the moves other people are making or to follow someone else’s path verbatim, but you can find some great inspiration.

Avoid posting affiliate promotions on or near the holidays! If your promotion is holiday-specific, try to post it at least a month ahead of time so people will be able to read your review and make the decision to purchase, and have the item delivered in time for the big day.

In any affiliate marketing campaign you need to keep track of what is producing money and what is not. You do not want the primer space on your blogs and websites being devoted to affiliate products that are not making you money and are not selling. So keep track of what is good and what is bad and reserve that prime space for the money makers and get rid of the dead weight.

In order to use affiliate marketing, you should know what keywords are being searched for. If someone is searching for you, they will be using keywords that could help you see if you have successful marketing campaigns. This will also show you which marketing strategies are not working for you.

Increasing your productivity in affiliate marketing is about mindset just as much as it is about action. So in order to make sure you have the proper mindset, you should always wait until you experience results before increasing your campaign. Results will give you the confidence to grow and the drive to follow through.

If you’re going to post something about a sale your affiliate is having on their products, do some research into which keywords including “discount” or “sale” are the best to optimize your content for. Include those keywords in the title, URL, and file names of any graphics that you’re using on the page.

Now, no amount of solid information can save your affiliate business on its own. It also takes the right actions by you, the business owner. Just remember that affiliate marketing is a legitimate business, and that you need to approach it as such. Failing to take it seriously and treating it as a gimmick will result in ultimate failure.

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Forex Can Be Amazingly Profitable Over The Short Term

Forex Can Be Amazingly Profitable Over The Short Term

Forex can be amazingly profitable in the short term and if profits are reinvested over The long term as well.

Shares can be a great long term investment there is the case of the Long Beach, California, couple, who received ,000 each as a gift at their wedding in 1896. Some of it was invested in 10 shares of William Seward Burroughs’ American Arithmometer Company, starting point of the Burroughs Corporation, now one of the leading manufacturers of business machines. Over the years, the couple diversified their holdings, but the essential element of their portfolio was Burroughs. At the death of the wife, the surviving partner, in 1958, the estate was valued at between and .5 million.

Likewise, ,000 invested in General Motors fifty years ago would now be worth about million.

There is the doctor who never looked at the stock tables from one end of the year to the other, but who faithfully invested ,000 in duPont every December 1. He bought high, he bought low, always following the dictates of the calendar alone. A more haphazard system of investment except for its regularity—would be hard to find. But because the stock was duPont, he made a fortune.

Something like this seems to be in the minds of many investors today. The New York Stock Exchange’s periodic tabulations of the “Favorite Fifty” stocks of Monthly Investment Plan buyers must delight the hearts of even the most conservative investment advisors. All by themselves, people are choosing the finest grade of security to rest their future hopes on. No wildcatting here.

A glance at current trading values does not seem to bear this out. Action is at a high peak. Three-million-share days are not at all unusual. It would seem that short-term trading is the rule. Part of this, however, is due to the fact that there is a vastly increased number of shares outstanding, and part due to the fact that most trading is being done with about 12 per cent of the lot. Some 88 per cent, in effect, have been withdrawn from circulation and sit in someone’s safe-deposit box, as an anchor to windward.

Backstopping this trend are the institutional investors—the insurance companies, mutual funds, personal trust and pension funds, mutual savings banks, college endowments, and non-profit foundations, all the great agglomerations of money which control about 16 per cent of all listed common-stock values. Such funds are never static. They switch their portfolios constantly. But since, as professionals, their scale of values is much like that of other professionals, they have all invested heavily in Blue Chips and do not trade capriciously in the hopes of finding something better. They are not rocking the boat, either.

What would happen if today’s sunny optimism were blighted by black fears is hard to say. The vision of several dozen institutions dumping stock in a panic—and of any significant number of the individual investors following suit—is quite dismaying. The market’s plunge on the news of President Eisenhower’s heart attack was one indication of what can happen. Other events obviously could trigger off a similar response, or a worse one.

On the other hand, the market has also shown tremendous resilience. It has come back strongly after each upset. As long as investors retain a fundamental faith in America’s economic prospects, disaster can very likely be averted.

This article is a guide to common-stock investment for newcomers to the market. It will go fairly deeply into theory and practice, and into the technical workings of the market, primarily because a grounding in fundamentals is essential to any degree of success. It cannot be stressed strongly enough that the operation of the capitalistic system, as reflected in the stock market, is a subtle and sophisticated thing.

Economists are still puzzled by the invisible forces to which it is subject.. For investors the problem is compounded by the necessity, not to explain the past or evaluate the present, but to probe the future in an effort to determine the possibility of profit. The interaction of the system and the human beings seeking to understand its pattern and dimension takes place in a market which acts and reacts with bewildering swiftness and paralyzing confusion. Only the investor who learns to take his bearings, and to reduce the array of alternatives confronting him by knowing beforehand what he is trying to achieve, will come out ahead.

For it is historically true that new investors appear after a trend has been established. Yet 48 per cent of our 12,500,000 investors have entered the market only since 1952. The vast majority have never known anything but a bull market and the happy accumulation of profit. The savage, dollar-destroying reversal, the bitter despair of a prolonged slump, the cruel retribution of overstaying a market—all these, for these people, are no more than theoretical.

Yet they are normal occurrences of the stock market, and will be again. When the break comes, it will be the inexperienced investor who will react too slowly, react in confusion, and thereby lose—and suffer—most.

This is not Old Testament prophecy. It is simply an emphatic statement of the necessity of learning the ground rules. For these apply every minute of every trading day, whether the market is behaving well or poorly.

This is a fascinating and fabulous period in which to be entering the market and acquiring your share of American business. The projections of America’s growth in the years ahead are staggering. Our needs and requirements will, in all probability, be enormously in excess of anything we have been used to in the past. If business and industry respond appropriately, the holder of soundly selected common stocks should do extremely well.

When we think of Forex, the main advantage is that considerable sums can be made in a much shorter period of time and reinvested to make more money. We do not need to have money invested over a long period as we do for best results with the stock market.

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Forex Strategies

Trade:Forex, Oil and Gold

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