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Hot Money Tips
Written by admin   
Oct 25, 2006 at 08:04 AM
Hot Money Tips Surprisingly, the best money and wealth accumulation strategies are simple and seems not very challenging. However your committment and disciple to follow them consistently with make your wealthly. Below are the hot money tips, I recommend.

  • Always save minimum 5% to 50% of what your income is.
  • Automate and make saving money effortless by authorizing your bank or investment company to direct debit your salary or income account for minimum 5% upto maximum 50% weekly, fortnightly, or monthly and invest them periodically in your preferred area of investment like stocks, managed funds, or properties.
  • When the economy is strong and the price of gold is moderate or low, buy some gold bullions, as they will fetch higher value in times of economic and political turmoil and have the capacity to return many time your investment. Remember that the real currency of the world in both good and bad times will continue to be gold. Avoid keeping gold in jewel (Bullion is most desirable) form if investing.
  • Think twice before buying any thing even on sales, as money gone is definitely gone.
  • Try to postpone buying anything you are mad about for a week or two. If you are still crazy about buying it after 2 week, go for it, if your budget allows.
  • Park your temporary cash into high interest bearing account of good banks until you can find suitable investment.
  • Develop a habit of keep loose money change in your shoebox, and when it is full, bank it and invest it.
  • Pay your mortgage fornightly rather than monthly, and you will save thousands of dollars over the life of the mortgage.
  • Buy groceries/cloth in bulk when shopping and always ask for discounts. This could save you real big dollars over period of 10-15 years.
  • Have only 1 credit card, and cancel the rest. this will save you in yearly credit card fees, and will give you fewer choice of spending the bank's money and paying them interest. Remember the "personal credit" brings in maximum revenue.
Keep Checking this section, as many more tips would be added occassionally.

With Best Wishes

Keshav Jha
Last Updated ( Nov 01, 2006 at 04:40 AM )
Stock Market Investment
Written by admin   
Oct 25, 2006 at 08:06 AM

Introduction to Investing in Stocks and Shares

What are Stocks or Shares?

Investing in stocks and share can be extremely rewarding, if invested in a good company with able management. Have said that, the definition of good company with able management can vary largely depending on type of investor.

Stock is simply a unit of ownership in a publicly listed company on stock exchange. Generally when we say that Peter owns some stocks, it means Peter owns some stocks in a particular company. When we say Peter owns some shares, it means that Peter owns stocks of more than one company. In other words shares represents collection of stocks of more than one company.

Types of Stock Analysis

Fundamental Analysis : This type of analysis relies on analyzing the financial statements of the company you want to invest into. This involves quantitative analysis of the company's data on revenue, expenses, assets, liabilities and all the other financial aspects of the company. The historical performance of the company in all areas that can be quantified is carried to decide, if investing in this company has a promising future value. Investor's like Warren Buffett relies on the fundamental analysis in order to determine the future value of the company, and discount it to the present value, in order to determine it current price that should be paid for the stock in order to invest in the company. Annual reports of a company for last 10years can provide a good source of fundamental analysis.

Technical Analysis : Technical analysis takes in consideration solely the price of the stock in consideration when making a purchasing decision. many different charts are created based on the price and the volume of the trading to identify a pattern in the rise and fall of the stock and to by in when the trend is considered favorable.

Best of Both World Analysis : Some investors or traders use both fundamental and technical analysis in order to make the investment decision.

Who are You – Investor or Trader?

Investor : Investor simply would be someone who will buy quality stocks, and hold them for years reaping the growth in the stock price, and dividend income. Basically, the investors would buy good stocks with sound historical growth and would rely more on fundamental analysis of the companies for making the investment decision.

Trader : Trader on the other hand would be someone who buys and holds the stocks for generally less than a year and for day trader it could be few hours or even few seconds. Trader would heavily rely on the technical analysis for making their investment decisions.

You may find that whenever, we are talking about investing, we generally call the person investor, but it may sound more logical to call them investor only if intend to hold their stocks for more than one year, & sometime as long as 20-40 years. An excellent example of an investor would be Warren Buffett, who is the 2nd richest person as of 2006. Warren Buffett follows value investing principles based on fundamental analysis outlined by Benjamin Graham's teaching of value investing. Any serious investor should read the bestselling books by Benjamin Graham which are

The Intelligent Investor -- By Benjamin Graham

Security Analaysis – By Benjamin Graham

An example of a world known billionaire who predominently is a trader is George Soros. George Soros operates Quantum fund that also invests for long term, however he would be categorized as a trader based on most of this investments till date. George Soros also is famously known as the man who broke the Bank of England. In 1992, George Soros, made nearly $1bn by betting on the devaluation of the pound sterling.

Short Selling of Stocks

Short selling is simply selling the stocks that you don't own will an intention of buying them back at a lower price than it was sold initially, and keeping the difference as profit. Short selling may appear to be cool strategy to make some quick money, but comes with a high risk, and is should only be done by professional who really know what they are doing. Short selling is not offered by every stock broker and in country like Australia, very large broker like comsec (also called commsec) can offer it to clients. However, in US short selling is a very old concept, and is widely practiced by stock traders, and stock traders like any other investment vehicle.

Question You Must Answer Before Buying Stocks

  • It is very important to identify your preferred way of making money from for the stock market, before you actually start investing.
  • How much you want to invest?
  • How long you plan to stay invested?
  • What is the purpose of your investment?
  • What type of investment personality you have?
  • What you believe will make you money, trading, short selling or investing for long term?
  • Do you intent to support your current or future life style by using the dividend income that your investment will generate?
  • Do you want to solely retire on the dividend income that your investment will generate?

Answering above questions will make your investment decisions more informed one reaping your greater reward.

Happy Investing,

Keshav Jha

Last Updated ( Nov 01, 2006 at 04:36 AM )
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