All about investment

by RJ Camposagrado

Formed in 1937 by Thomas Rowe Price Jr. T. Rowe Price is one of the world's primaryinvestment management companies. With more than $391 billion in assets under management, it serves individuals, financial intermediaries and institutions. Relying on fundamental research and a disciplined approach, the company strives to provide a full assortment of investment strategies. In 2005, T. Rowe Price's target-date retirement funds set new records for asset growth, reaching $8 billion within two years of their inception.

Below we will share with you 5 top rated T. Rowe Price funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all T. Rowe Price funds, then click here.

T. Rowe Price Capital Appreciation (PRWCX) seeks long term capital growth by investing in leading U.S companies that show significant potential for growth. At least 50% of its assets are used to purchase common stocks and the rest are invested in convertible and foreign securities, futures and options. The fund returned 33.05% in 2009 and has a ten year annualized return of 9.34%.

This T. Rowe Price fund has a minimum initial investment of $2,500 and an expense ratio of 0.74% compared to a category average of 1.02%.

T. Rowe Price Tax-Free High-Yield (PRFHX) invests a large share of its assets in high default risk or speculative bonds. It may also develop 10% of its assets to purchase bonds in default. In the last one year, the fund was up 28.12%...

James M. Murphy is the fund manager and has managed this T. Rowe Price fund since 2002.

T. Rowe Price Emerging European & Mediterranean (TREMX) seeks capital appreciation by investing at least 80% of its assets in emerging European markets such as the former Soviet Union, the Middle East and North Africa. It is non-diversified and focuses on large and medium-sized companies, but considers companies of any size for investment. The fund has a five year annualized return of 10.6%.

As of December 2009, this fund held 42 issues, with 5.97% of its total assets invested in Magnit JSC.

T. Rowe Price Global Stock (PRGSX) seeks capital appreciation by investing across several sectors in developed as well as emerging markets. The fund focuses on large and mid-cap stocks and invests in at least five countries, including the U.S. At least 80% of its assets are invested in domestic and foreign companies, with the proportion varying over time. It is a no load fund.

This T. Rowe Price fund returned 44.77% over the last one year period.

T. Rowe Price Inflation Protected Bond (PRIPX) invests the majority of its assets in inflation-protected bonds. It focuses on U.S Treasury bonds but may also acquire bonds issued by companies and government agencies. This T. Rowe Price fund has a three year annualized return of 5.71%.

The Fund Manager is Daniel O. Shackelford and he has managed this fund since 2002.

To view the Zacks Rank and past performance of all T. Rowe Price funds, then click here.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can obtain funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/.


About the Author

Top 5 T Rowe Price Funds

By: Brett Hill

"I only wait bundles of cash pile up in corner of wall, then I walk there and pick it up without efforts. Besides, I do nothing".,Trade mater James Regales said so, but what will the words of master to inspire investors?

As we know,currency market is consists of a series of trading days, and it's uncommon for complete irrelevant next trading days. But in some trading days, obvious characteristics board trend had clearly indicates the real intention of market, if we could grasp these trading opportunities of high profitable percentage,it'll be very helpful to make profit. In conclusion, easy" pick up money" opportunities are as follows:

Balanced market of close high/low: The trading day was balanced market of rise and fall but closing price is high ( or low), this shows one side obtained assumed victory. So the morning session trading on next trading day usually well be beneficial to closing side. Therefore, open a position on closing direction is a good move.

Strong trend trading day: market is controlled by unilateral force from opening to closing, exchange rate moves toward one direction. This is absolutely good chance to open a position by trend and bear very small risks. This is because the value range in next trading will commonly be continued, and it can ensure there's plenty of time make profit and leave the market without suffer losses.

Gaps: In market opening stage, gaps will be formed by the resistance entry of long-term strength, it has characteristic of support and resistance function. To open a position along gaps direction also has high profitable percentage. However because there are many types of gaps such as ordinary type, breakthrough type, relay type,exhaustion type,etc, so investors better to take action after clear analysis combined with overall environment.

Breakthrough consolidation area: When the maintained consolidation area is being breakthrough, the exchange rate change is usually rapid and fierce. This is because market participants have changed views of value and confident intervention of long-term strength. At this moment, investors should enter the market following breakthrough direction and enjoy the pleasure of "free ride"

Breakthrough failure trap: When exchange rate failed to impact resistance level( or support level), it will usually fall back to original value range. The longer of time cycle of reference point impact, the broader of return range, and this is a concept in basis of market balance. Therefor, investors should quick witted, "turn around strike".

The above trading opportunities are not absolutely not going to fail, but in compare to say are safe and reliable. If a trader could has patience to wait for emerging of opportunities and sensibility judge its fact, and combined with scientific assets management methods, and to decisive actions, he/she will must attain the good results.

To read more about this ,Click Here

Article Source: http://www.ArticleBiz.com

by Shaun

Selling Naked puts and naked calls are two strategies that are hardly used in the stock market. And there is a reason for that, they are considered to be the 2 riskiest strategies of all.

What is the difference between the strategies and what makes them so risky? Well when you sell an option you are giving someone else the right to either make you buy or sell a stock at a given price on or before a given date.

For instance when you sell a naked call you have the obligation to sell a stock at a given price on or before expiration. So if you sell the $30 call option the buyer of that option can make you sell the stock at anytime during the lifetime of that option.

So if the stock goes up to $40, $50, or even $100 you will be forced to sell it at $30. Of course this has the potential of giving you a very big loss. Your potential loss is actually unlimited. That is why I never ever even think about entering a naked call.

A Naked Put on the other had can be less risky. If you sell a $30 put you have the obligation to buy the stock at $30, which means that the most you can possibly lose is $30, not unlimited.

If the stock is a very strong company that you would not mind holding onto for a long time then there can actually be less risk in selling a put then there is in buying the stock, because you get paid to buy it.

So while naked calls are too risky to touch (at least for me) naked puts can definitely be a great strategy if you use it right.

For more on selling naked puts visit http://www.stocks-simplified.com/selling_puts.html

For more on stock trading visit http://www.stocks-simplified.com

About the Author

When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. Now I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.

by Sam Wilmore

Looking for Historical Stock Data for the Hong Kong Stock Exchange (HKEX)? Well you've come to the right place. You can download free HKEX Historical Stock Data in metastock format from 2000 - 2009. The data is updated every month, and downloadable every month in zipped .CSV (comma separated values). You can import this data into software programs such as Amibroker, and use it to back test your buy and sell strategies.

The historical data can be used for both technical and fundamental analysis, though it is more geared more towards technical analysis. What is Technical Analysis? It is a method for predicting future price movements in stocks based on previous stock movements. The many technical indicators traders use can include RSI (relative strength index), moving averages, regressions, MACD, just to name a few. All these indicators rely on stock prices, price changes, and volume changes. This information is available in the metastock data provided. Metastock data is of the form:
Symbol, Date, Open Price, High Price, Low Price, Closing Price and Volume

Once you've developed your trading model, you can back test it against the HKEX Historical Stock Data

The data can be downloaded in its raw form, or with adjusted closing prices for dividends and stock splits.

About the Author

Sam Wilmore

By: Juli Alee

All in all, share prices aren't just prices moving up and down, up and down. They are a reflection of a company.

If you were interested in buying your local corner shop, you'd look at things such as management, if profits were improving and if there were competitors taking away market share.

Shares are essentially a share in a business and while it may not be your local corner shop, the concepts are very similar.

Underlying drivers of the business are important

Here's what famous investor Peter Lynch has this to say to investors: "Well, they should think about what's happening. I'm talking about economics as forecasting the future. If you own auto stocks you ought to be very interested in used car prices. If you own aluminium companies you ought to be interested in what's happened to inventories of aluminium. If your stocks are hotels, you ought to be interest in how many people are building hotels. These are facts."

The point of the story is that investors should be aware of the underlying drivers which help or hinder a business.

Watch economic events closely

If an economic event shows a business environment that is favourable to companies making profits and growing, you'll usually see a positive reaction from share prices.

But if the economic event shows that company profits may fall, you will generally see share prices come under pressure.

If interest rates are low, employment high, consumer confidence high, then it will be relatively easy for businesses to make money.

But if interest rates are rising, employment is low. People then stop spending money and businesses make less profit. So share prices fall.

Market sentiment is important too

The share market is like any marketplace. If there are more buyers then sellers then prices will rise.

And if there are more sellers than buyers prices will fall.

Buyers drive up the price and sellers drive down the price. A perfect example of this is at the seafood markets. Normally prawns sell for around $25 a kilo. At Christmas time, prawns sell for about double. Why the big difference? At Christmas, the large number of buyers drive up the price of prawns. The seafood market, like the sharemarket, sees buyers drive up the price and sellers drive down the price.

In the end, the sharemarket is simply a market full of businesses. In the long-term, share prices are a reflection of the value of the underlying business. You'll find that businesses that increase their profits increase their business value and share prices should eventually follow suit.

Happy investing!

Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and stock market research for frequent traders and investors.

Article Source: http://www.ArticleBiz.com

By Peter McGahan

You may have read about an investment called the ARM assured income plan that produces an income return of 10% and is not subject to the vagaries of the stock market - you may have thought that surely after ten years you would get your money back? Here are my thoughts.

I will use the ARM assured income plan to present the difference between marketing and research! For those of you who are not technically orientated you can switch off now as it's a full on no entry sign for me and any investor we would advise.

Anyhow onto the technical data. With the ARM assured income plan you are effectively buying an investment into a range of life insurance policies by U.S. policyholders who no longer want them.

These policyholders are aged over 65 and have a life expectancy of less than 12 years. The customer no longer wants the plan and rather than encash it they sell it to a manager for slightly more than the surrender value the insurance company is offering.

Your money is invested into the ARM assured income plan which buys these plans and then continues to pay the premiums until death and the death benefit goes to the fund. A large part of the gain will come if the life expectancy is shorter than the assumed twelve years life expectancy of the people they are purchasing the life policies from.

Excellent you might think. Where could it go wrong!? From here onwards is the answer.

Firstly and most importantly the investment falls outside the scope of the financial services and markets act. If ARM is unable to meet its liabilities you will have no claim to the financial services compensation scheme. i.e. you will receive nothing back.

Further risks to consider: What if people live way beyond those 12 years? If they do the investment fund has to maintain premiums for much longer, and as such profits could disappear completely, and the 'income' you are referring to could go with it.

Whilst the marketing part of the brochure talks up the investment, the risk element does the reverse. In fact the disclaimer on the internet for the ARM assured income plan states clearly that this investment is only suitable for "investors who have the knowledge and experience in financial and business matters necessary to enable them to evaluate the risks, tax implications and merits of such an investment" (1)

The risks are further highlighted by the fact that the product you are effectively investing into is highly illiquid. I.e. in a difficult market if you have no buyers the price plummets, and worse still you may not have immediate access to cash.

The return of the ARM assured income plan is also down to each party involved meeting its obligations. There are lots of parties involved thereby catapulting the risk.

There is the chance that the insurance company who is providing the death benefit could be insolvent when the policyholder dies and cant pay the death benefit which would be an enormous challenge to the fund. Does a risk averse cash investor want this complexity?

The investment is also made in Dollars. If the dollar depreciates against the pound, most of your gain could be wiped out. Some investment provider's hedge against this but this plan does not.

Any borrowing or extra 'gearing' like this could substantially increase the risk an investor has and furthermore increases in interest rates will have a serious impact on the ARM assured income plan. If you consider the current interest rate environment and in turn the impact of quantitative easing, to consider anything other than increasing interest rates in the coming years is, well, a little mad.

Now you might see that the marketing brochure has a fine looking lady snorkelling, but if you are in anyway interested in time management just cut out the pictures.

Source:
(1) catalyst investment

About Peter McGahan and Worldwide Financial Planning:

Peter McGahan is the Managing Director of Worldwide Financial Planning - FT Award winning Independent Financial Advisers. Peter writes for many national and local press publications and is widely respected as an expert in personal finance.

Worldwide Financial Planning specialise in the provision of expert one-to-one advice in the areas of Mortgage, Business Finance, Investment, Pension and Retirement Planning and Inheritance Tax.

Peter McGahan is an Independent Financial Adviser and the Managing Director of Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.

The above represents the personal opinions of Peter McGahan.

All information is based on our understanding of current tax practices, which are subject to change.

The value of shares and investments can go down as well as up.

Article Source: http://EzineArticles.com/?expert=Peter_McGahan

Peter Leeds

Have you ever wondered why a penny stock falls sharply in price right after it achieves a major


There's an expression in the stock market that says, "buy the rumor, sell the fact." The idea is simple. When there's an outstanding rumor about an upcoming event for a company, investors buy in, thus pushing penny stock share prices higher. Once the event itself is actually realized, the share price loses that upward buying pressure, and the penny stock drops in value.

For example, ABC Inc. is likely to get FDA approval for their new drug. The upcoming ruling is widely expected, and many investors buy in, speculating that the announcement will send the shares skyward. This starts pushing the penny stocks' price up.

Once the actually FDA approval is officially granted, the shares don't spike much higher since the speculators had already run the share price up so much. Now that the announcement is out, many of those same speculators start cashing out, putting a great deal of selling pressure on the stock.

The following events are some examples of what might drive buying interest:
• impending patent award
• expected strong financial results
• new major customer or contract win that is widely anticipated
• upcoming release of a new version of their technology
• anticipated FDA clearance

Any such widely anticipated event would gradually push share prices higher. The penny stock would gradually increase, higher and higher, until the underlying event finally came to pass. Then speculative buying vaporizes, sellers come out of the woodwork, and shares start their descent.

For this effect to actually occur, the rumor or event needs to be:
• widely known
• growing in probability
• noteworthy (potential for a major impact)
• nearing the date it's expected to occur

"Buy the rumor, sell the fact," plays out again and again on the markets. It's certainly not the exception, but rather the rule. Keeping this in mind will help you identify penny stocks that may trend upward, allowing you to ride the shares up for profits. Just make sure to escape your position before they come crashing back down to earth, and more realistic valuations. In other words, buy the rumor, sell the fact.

By:Terry Mitchell

Here's an illustration of why attempting to the time the stock market is so perilous.
Let's say you are tired of all the recent losses and decide to exit the market when the DOW is at 7500, with plans to get back in when you think it is safe again. Then it goes up to 8000 and you start to believe that the worst is over, so you get back in at that point.

However, it turns out to be a "sucker's rally" and the DOW goes down to 7000. You panic and get out again. Then it goes up to 8500 and you think the market is surely out of the woods this time, so you get back in.

But you are wrong and ride the DOW back down to 7000 before getting out again. Then it shoots back up to 8500 and you swear you will not be fooled again, so you stay on the sidelines this time. Finally, being extra cautious, you let it go all the way up to 10,000 before finally being convinced that the worst is indeed over.
You are right – this time it is. But look at all the gains you missed out on and unnecessary losses you took by trying to time the market instead of staying the course.

Therefore, no matter how low it might go, I do not plan to remove my retirement funds from the market until I reach an age at which keeping them in would no longer be prudent, i.e., I wouldn't have enough time left prior to retirement to recoup any potential losses. And at that point, I would have no intention of re-investing in the market.


Terry Mitchell is a software engineer, freelance writer, amateur political analyst, and blogger from Virginia, USA. He posts a least one article a day to his blog - http://commenterry.blogs.com - on subjects such as current events, politics, technology, society and culture, religion, health and well-being, self improvement, personal finance, trivia, and sports.

You can now have any article and blog post he writes – in advance, if you would like – for use in your book, newspaper, magazine, ezine, newsletter, website, or whatever!! This includes the thousands of articles and blog posts he's previously written. Contact him via this website or his blog for details.

By David L Wells

Investing these days has become quite tricky, even treacherous!

There are bad investments all around us on a daily basis. The government seems to have a pretty good handle on bad investments as of late. They are spending $3.6 trillion dollars in the near future on programs we can only hope will help. Oh, by the way, that comes to about $25,573 dollars for each of our 139 million taxpayers. That's ok. Just put it on my bill, or better yet put it on my kids' bill.

Citigroup, for those who do not know, is the nation's largest banking institution. Chances are if you have a credit card or a mortgage, Citigroup is playing a part. Citigroup has been touted as the world's worst investment.

Former Treasury Secretary, Hank Paulson, made a terrible investment on behalf John Q Public. He purchased 7.8% stake in Citigroup for $25 billion dollars. Then he added guarantee's against 90% of future losses on $301 billion dollars in assets. Subsequently, we (taxpayer) injected another $20 billion dollars. So, for paying for about 100% of the market value for Citi, we got less than 1/10th of a company that was worth 1/5th of our investment.

Pretty good deal, eh?

That $45 billion dollar stake has a market value of just over ONE billion today. And, it's about to get worse. The Treasury Department has agreed to convert $25 billion of its preferred stock investment into common stock at Citi. This means the taxpayer's stake will rise to near 40% of Citigroup.

It's just another example of why these insolvent banks should be nationalized or FDIC Mandated, pre-packaged chapter 11, government funded reorganization.

David L. Wells
http://www.apg-llc.us
http://www.debt-negotiation-apg.com

Article Source: http://EzineArticles.com/?expert=David_L_Wells

By: kelly price

Currency trading education is all about getting the right information but most traders believe myths or base there trading strategies on logic which is not correct and lose. Here we look at some common mistakes, you must avoid to enjoy currency trading success...

One of more of these mistakes are made by the majority of novice traders so lets take a look at them, there in no particular order of importance to avoid - there all important!

1. Forex Robots and Expert Advisors make Money

You have seen them advertised, promising to double your money each month with no effort and all you do is pay a hundred dollars or so for an income for life.

They don't work and if you use one these systems you will lose very quickly. If making money was as easy as the robot vendors claim, no one would work and everyone would trade for a living.

2. Day trading and scalping Work

All short term volatility is random and there is no way you can get the odds on your side and win because of this. Trading short term moves is a loser's game - it looks low risk but you are guaranteed to be wiped out.

3. Markets can be Predicted

Prediction is hoping or guessing and you won't get far doing that in any venture in life and that includes Forex. The far out investment crowd love the theories of Elliot and Fibonacci which claim they can predict the future - but if they can do this, why do they ever get a trade wrong? Never predict, trade the reality of price change and you will have the odds on your side.

4. You can Trade breaking News Stories

News is discounted by the market instantly.

The news itself is not important it's the investor's view of the news which is and everyone may see the same facts but they all draw different conclusions from them. Markets always fall when the market is most bullish and rally when it's most bearish so never trade news stories.

5. Working Hard or Being Clever Guarantees Success

Forex trading suits a simple approach as it's an odds based market. Over complicate your trading and your Forex trading strategy will have to many elements to break. Don't work hard, work smart - effort may make you more money in a normal job but not in Forex.

6. Leverage is the Key to Big Gains

Yes it is but more novice traders wipe themselves out due to over leverage than any other reason. You can get 200:1 leverage with any broker now but novices should start with NO leverage at all, until they are comfortable with there trading and use no more than 10:1 after that.

Work Smart and Win

The above are all common and avoidable mistakes, so if you want to enjoy currency trading success, avoid them and get a good solid currency trading education which is based on sound logic and avoids the myths of Forex.

NEW! 2 X FREE ESSENTIAL TRADER PDFS
ESSENTIAL FOREX TRADING COURSE For free 2 x trading Pdf's, with 50 of pages of essential info on Successful Forex Trading Strategies visit our website at: http://www.learncurrencytradingonline.com

By Thomas Wheelwright

I'm constantly teaching and sharing the concept of building a business around your wealth. What does this mean? Let's start with a little background.

Historically, all great fortunes have been built in business. Whether it was Andrew Carnegie, John D. Rockefeller, Bill Gates or Warren Buffett, all great fortunes have business as their foundation.

You really don't hear about great fortunes being made by investors. Ever wonder why? It's because business done right provides the most leverage, greatest velocity, and least amount of risk of any money-making activity.

Why do some businesses grow and grow while others seem to hit a ceiling which they can't grow?

The answer to this question lies in the foundation of the business. Small businesses stay small when the owner spends his or her time running the business. Effectively, these people own their job. They have no time to work on the business because they are always working in the business.

The key is how to get the owner out of the business operations and focused on the business growth. The answer is for the business to create a strategy and a set of systems that implement that strategy. Then, and only then, will the business owner have time to grow the business.

When the strategy and systems are in place, the owner only has to manage the systems, not the people. The owner isn't doing the work, the employees and other team members are doing the work.

What does this have to do with investing?

I have discovered that the business principles of strategy and systems can be applied to investing. Investors who create a business of investing, by developing a strategy and implementing systems, can enjoy the same results enjoyed by a successful business owner, i.e., higher profits, more growth, less time spent on investing, total control over their investing and less risk.

Is your investing a business or just a hobby?

Think about your investing. Do you run it like a business? Or, do you run it like a hobby?

Investors who run their investing like a business have:

A clear written strategy

Mission, vision and values

Systems in place to make investing fast, efficient and in line with the strategy

A team of advisors

Reporting to tell them their net worth or cash flow at any given minute

Both informal and formal agreements with their customers and vendors

The list goes on and on. How does your investing activity stack up?

Are you ready to build a business around your wealth?

Historically, all great fortunes have been built in business. Whether it was Andrew Carnegie, John D. Rockefeller, Bill Gates or Warren Buffett, all great fortunes have business as their foundation. http://www.provisionwealth.com

Article Source: http://EzineArticles.com/?expert=Thomas_Wheelwright

BY:Jose Roncal

The current economic meltdown has changed the face of Wall Street, possibly forever. For decades the energy in the market had been fueled by high-rolling investment bankers, but look what's happened in the last eight months. Lehman Brothers went bankrupt. Bear Stearns was snapped up by JPMorgan Chase, Merrill Lynch got bought out by Bank of America, and Goldman Sachs and Morgan Stanley had to convert to bank holding companies just to stay in business. Five major investment banks . . .and then there were none.

At the beginning of this year, those five firms had a combined market value of around $250 billion with the top firm, Goldman Sachs, valued at nearly $90 billion. Now the top banks, which are comparatively small boutique firms—Raymond James, Jefferies & Co, Greenhill & Co, Keefe Bruyette & Woods and Piper Jaffray—have a combined market value of $12 billion, a number that has shrunk by a factor of 20.

Essentially, the global economic crisis has ushered in the era of universal banking where massive financial firms offer every conceivable kind of investment product and service. Even smaller brokerage firms face being herded under the umbrellas of big banks, or else risk becoming irrelevant.

Historic Realignment of the Industry

When Goldman Sachs and Morgan Stanley opted to become bank holding companies it marked an historic realignment of the financial services industry and the end of a securities firm model that had prevailed on Wall Street since the Great Depression. But why did they make the change? Partly because it's given both firms access to the Federal Reserve's discount window — the same line of credit that is open to other depository institutions at a lower interest rate.

As bank holding companies, they can also tap into deposits from retail customers. The two firms had already received a temporary financial lifeline from the Fed—the Primary Dealer Credit Facility—the special reserves established to bail out Wall Street broker-dealers like the Bear Stearns deal in March 2008.

Even though Goldman Sachs and Morgan Stanley are now classified as bank holding companies and are part of the universal banking model, they'll still be able to engage in investment banking activities. But after years of loose oversight by the Securities and Exchange Commission, they're now faced with tighter regulations imposed by the Federal Reserve and they are subjected to Federal Deposit Insurance Corporation oversight.

The Golden Years of Investment Banking

A quick historical review of investment banks will serve as a backdrop to the events that led to their downfall.

Independent investment banks have been around for a long time, but originally they were small private partnerships that earned most of their money from offering corporate finance and investment advice, as well as some broking and other services. If you had walked into one of their offices and looked around, you might have mistaken it for a large law firm.

The success of their business model depended on the trust built through long-term relationships. There wasn't much money at risk in the early days because the firms operated primarily with the partners' own money. That meant there weren't vast sums available to gamble on risky ventures with excessive leverage. But the lack of working capital and a desire to orchestrate splashier deals, motivated the firms to go public in the late 90s.

The Downfall Begins

With more capital in the coffers and a growing access to low cost, short-term debt, managers started to make larger, riskier capital bets—most recently those troubling and toxic mortgage-backed securities.

The regulations that had once separated investment banks from traditional banks were no longer in place. That opened the way for big global banks like Citigroup and JP Morgan to start competing with Wall Street for what had traditionally been the domain of the investment banking business. This forced Wall Street firms to expand their services, to use more leverage and to take even bigger risks.

When those risks led to profits, the dealmakers were rewarded with outlandish bonuses and the wheels were set in motion for bigger risk-taking. Throw patchy government regulation into the mix and you have, as the saying goes, a recipe for disaster.

Before long, major Wall Street firms were leveraged three or four times more than conventional banks, yet they still operated under far less stringent regulations than the banks.

It wasn't until the financial crisis reared its ugly head in mid-2008 that the U.S. Fed stepped in and for the first time, allowed investment banks access to their discounted funds. Then when the credit crisis hit, highly leveraged Wall Street firms like Bear Stearns and Goldman Sachs found themselves in even deeper trouble. They'd already suffered huge losses with their hedge funds and high-risk ventures, but their excessive leverage compounded their problems as the credit crisis stripped them of the ability to raise the additional capital they needed to survive.

The Outlook for Wall Street

What's the outlook for those working on Wall Street now? No doubt there will be less excitement and no more of the huge bonuses that dealmakers had grown accustomed to. But there are bigger concerns about whether the U.S. will lose its competitive edge and the ability to maintain its power status in the global financial system.

Some of the best and brightest might pull up stakes and head for better opportunities in the burgeoning Asian Markets, or they could flip over to the unregulated Hedge Fund market—at least for as long as those funds manage to survive. Thousands of Hedge Funds are going out of business, bringing serious grief to investors like the huge public pension funds, foundations and endowments that have poured billions of dollars into these private partnerships.

If there is any good news in this economic fiasco, it's this: Main Street stands to eventually benefit from a better regulated Wall Street. With a more transparent financial system, a firmer foundation and a stronger business model, there might be a promising outlook for more stable and consistent growth.

--------

Jose Roncal is co-author of "The Big Gamble: Are You Investing or Speculating" which Donald Trump endorsed as "a great read". Many of the author's articles related to finance and the global economic crisis can be found at http://www.financialspeculation.com

By Jamie Murray

We have not seen a financial storm like the present one for decades. For many, the sudden intensity of this financial cold snap, and the likely wintry recession ahead, has been a surprise. In days of yore, winter and snow forced a community to come together so that it would pull through and see off the cold, the wolves and other dangers.

The hedge fund industry is a community. It is rightfully proud of the many benefits that it has brought. It is not just making its clients wealthier. It has helped transform the investment industry to the good. It gives employment to many people and gives back through philanthropy and charitable works. It has given liquidity to some markets and kept them running. It is true that it is described as a Darwinian industry, and that it is about "survival of the fittest" as if hedge fund managers were a group of frontiersmen. However, in winter, even frontiersmen helped each other through the hard times and stood up for their community.

Deep winter has come to the industry. Performance is down sharply for many strategies. Clients are redeeming. A few politicians are calling for the abolition of hedge funds. Regulators are scrutinising the sector. Leverage is harder to access. Parts of the mainstream media demonize the sector, crowing in triumph at the difficulties it faces. The natural response is to hunker down and let the storm pass. However, if individual funds do that, when the blizzard is over and they emerge blinking into the sunlight, they will likely see a very changed financial landscape. You only need to see the recent statements out of Brussels to see where things may be heading. As EU Economics and Monetary Affairs Commissioner, Joaquin Almunia, recently told the EU Parliament "On hedge funds, we have used as our basis that they must be regulated."

The industry has a choice. It can stand up and be counted, and be part of the debate on how the financial landscape should change, or leave it to the politicians and regulators to sort things out. Clearly industry bodies work behind the scenes on hedge funds' behalf, but there is plenty to do in the public eye to change perceptions. This is where I must declare self interest. After twelve years of selling and structuring hedge funds, I have moved into media relations. I am doing it partly because it is a challenge, but mainly because I am passionate about the hedge fund industry, and am frustrated that it does not stand up for itself. It is a media punch bag.

There is plenty that a good media strategy can do to contribute to asset raising, client retention and attracting talented employees. However, the media strategy needed now is one engaging directly with the press and the broadcast media, and through them with the public and politicians. If the case is not made, and parts of the media paint hedge funds as causing market upheaval, public opinion may turn even more negative. Public opinion moulds political thought. Politicians drive policy responses and financial regulation worldwide.

There are other consequences if hedge funds do not engage. Institutional investors may shy away from investment. Pension fund trustees reading " hedge funds are high risk " stories may not invest. Local politicians may lean on local authority pension plans and force sale of hedge fund positions or forbid any exposure to hedge funds. Unions may question why their members' assets are invested in such "risky" investments. Some institutions may stop lending stocks. All this is not just possible in the context of one country, but applies across regions such as Europe, the Middle East and Asia.


The picture is not as bleak as it seems. There is plenty to be positive about if the industry starts to engage with the media. Both the hedge fund industry and the PR industry need to rethink things. For example:-

· Individual hedge funds need to work much harder on communications with the media. They also need to work more closely with industry bodies such as AIMA. AIMA works hard behind the scenes lobbying on the industry's behalf. It also works hard on the industry's behalf as shown by Chairman, Christopher Fawcett's recent defence of the industry in print media, and on BBC's Newsnight.

· PR firms representing hedge fund clients need to be more strategic in how they serve their clients. Being non-reactive, even if that is the main brief, is exacerbating media hostility. If PR agencies are to represent hedge fund clients better, they need to be much more proactive and to push back at a client's knee-jerk " no comment " reaction.

· The PR industry should also take the hedge fund opportunity more seriously and learn more about the industry and how it works. This means having accounts staffed by people who really understand how their clients' investment strategies work, and who are able to communicate this. This requires investment at a time when hedge fund assets are likely to halve from their $1.9 trillion peak. However, as 1998 and the early 1970s showed, the hedge fund industry has gone through periodic retrenchment. These were exciting times as they were when fresh stars of the hedge fund firmament were born. After each retrenchment the industry has come back stronger.

Many hedge funds are launched because their owners want to control their own destiny. Surrendering the media landscape, with the likely consequences, runs against that philosophy. There are grave dangers in ignoring the media. Equally, there are huge benefits to be gained from engaging with the media in an open and coordinated manner. If the hedge fund industry truly is a community, in this financial winter, it needs to come out of the cold and stand together in front of the media.

Jamie Murray is head of Broadgate Alternatives, a specialist division of Broadgate Media focused at developing communications and public relations strategies for hedge funds. He has twelve years experience selling and structuring hedge funds for large industry players. His move into public relations comes from a desire to see the hedge fund industry better represented in the media.

Article Source: http://EzineArticles.com/?expert=Jamie_Murray

By: Timothy Rudon

The season of cheer can make a procrastinator out of you as far as taking care of tax planning and finances is concerned.

As January 2008 dawns it will be time to take care of IRS files and run helter skelter to complete paperwork and investments.

So before you get ready to splurge on Christmas and New Year’s Eve celebrations take care of the year –end financial planning and housekeeping.

1. Run a glance through your accounting files and check if investments and the financial planning for tax have gone smoothly or need tweaking.

2. Think about making changes in the health-care coverage. Find out about open benefit enrollments. It is possible to secure savings of 25% on dependant care and out-of-pocket medical expenses through FSAs or flexible spending accounts. These have two options medical and dependant care. FSA accounts are through pre-tax dollars and this account will cover doctor’s visits, prescriptions, orthodontics, acupuncture, psychotherapy and more. So think about joining the FSA program and you will save USD 420 annually from taxes for contributing USD 1200 in medical/dependant care FSA.

3. Try and minimize tax and instead of spending during the festive season excessively work out ways in which you can minimize tax. Check the employer sponsored retirement fund and see whether you have set aside USD 15,500 (20500 if you are 50 years old and above). Consider increasing your retirement savings and reducing the tax burden. The deadline for work retirement funds is Dec 31, 2007.

4. Check out the company’s 401k roll over fund. Put dollars into the fund instead of paying tax. Weigh the pros and cons of the savings.

5. Rework the tax saving plans. And jot down simple ways of reducing tax. Think about deferring payments by a month. And avoid the alternative minimum tax or AMT.

6. Try not to over pay the IRS. Check the withholdings of Form W-4 . There are websites like the IRS site or paycheckcity.com where you can check. Think of investing in S&P or a high-yield savings scheme.

7. The IRS is helping those who have suffered at the swing of stocks. You can save on taxes owed on investments by offsetting with capital losses on stocks. So check out where you may be eligible for a tax break. So rework your portfolio to your benefit.

8. Sit down and think about saving tax by investing money that you will splurge in the festive season such that you will find relief come March. check out your finances and plan for taxes.

9. Take a few hours off from celebrations to get tax papers in order and do final tweaks to the investments and tax payments.

It pays to be ready for tax season. The World Wide Web is replete with advice and tips but always check out facts with reliable websites before actioning any adjustments. Usher in the New Year as an organized person.

Timothy Rudon is a writer for Online Discussion, the premier website to find discussion forum, online discussion, discuss, forum chat, latest discussion, SEO, domain, chat and more.

Article Source: http://www.ArticleBiz.com

By: David Jose

Online Stock Trading Tips-Those large screens in NYSE show the live data of the rise and fall of money. Don't you like to experience the overwhelming passion which is hovering in the online stock market? When you frankly say 'yes' on this, then do come up with an inspiration to make money in the online stock market. There are millions of people who are investing money day and night in the online stock market. People living in the modern world are freed from conservative thought and are showing positive attitude towards the online stock trading market.

In the past only business school graduates used to get into the world of stock market and were used to enjoy the world class facilities. But now a man having a regular source of income can actively participate in the stock market. Lots of appreciation go to various online stock trading communities which have been guiding the common people to invest money in the stock market. It seems that their online stock trading tips have been very effective in increasing the confidence of the common people to build up a strong trust for participating in the online stock trading market.

The online stock trading tips offered by competitive online stock trading communities are no doubt help you to be the knight who makes only profits in the stock market. Train yourself well with these tips. Besides, on a timely basis have a glimpse of various online stock trading message boards. These are very informative message boards which are continuously updated by online stock trading communities. Out of your busy schedule you should take out some time to focus on these message boards as well as tips which promise you for having massive growth of your money.

Although the online stock market is very volatile, you can play your role safely. Here you are not at all alone as you being with the company of a good online stock trading community can make uncountable money. People earn lots of money so that they can turn their dreams into reality. Why you should put your extra money in the banks who would just add up few bucks in the later part of your life? These few bucks would hardly meet your needs at that period of time. Just come up with a plan to invest a small amount of money in the online stock market. Seek complete advice as well as online stock trading tips from a potential online stock trading community. Finally, come out as the richest knight and enjoy your life without a complaint.

This article is written by David Jose on Online Stock Trading Tips. David Jose has been a avert writer on various online trading communities. His work has been published in several places across the web. At present David Jose is contributing towards making MTP a well known and popular online trading community.

Article Source: http://www.ArticleBiz.com

By: Ben Ang

We often hear people saying that trading or investing in options is very risky. Yes, it is certainly no mean feat to trade or invest, using options as your investment vehicle. But is it really that risky in the first place? If trading or investing in options is really risky, then why are there so many individual traders or investors who make money from it? The only possible explanation is that those people had spent a lot of time and effort to study, understand and learn all they can about options in addition to the basic technical knowledge of how the market functions. They would have learnt how to increase their probabilities in making a profit and also reduce their risk to the minimum.

So what actually are stock option greeks? Why is it important to understand how they can affect the profitability of your trade or investment? Stock option greeks are actually sensitivities of the stock option to risks characteristics. These risks are actually factors that affects the pricing of the option. By learning how the stock option greeks relate to risk characteristics in addition to other basic technical analysis skills such as identifying the market trend, knowing when to and not to trade or invest according to timing ( Eg. Not to trade during lunch hours ), interpreting technical indicators correctly, have a risk and money management system to assist in making decisions when trading or investing ( This helps to eliminate and not involve your emotions that affect your trading decisions ) ...etc We are able to have certain control over our risk exposures to leverage, time decay, volatility and interest rate risks. Each option risk characteristics, is represented by a greek word and they affect the option pricing differently. It is important to know whether you are purchasing a stock option at a under or over priced value as this can be another factor that will affect profitability of your trade or investment. You do not want to be in a disadvantage position at all times when trading or investing as the majority of the factors are against you and you have absolutely no control over them. ( Eg. Interest rates )

Mastering each risk characteristics will certainly help to reduce risk tremendously when trading or investing in stock options, what's more, there are lots of stock option strategies that can be utilized once you understand the mechanics of the stock option greeks and make them work for your trade or investment.

Ben was an average person whose life changed a lot after being inspired by a book which taught him to be financially free. He went into trading to achieve that goal and is now on the road to success. Besides that, he is also doing internet marketing and articles. To find out more, please visit Ben's investing blog at The Investor Portal

Article Source: http://www.ArticleBiz.com

By: Vikram Kuamr

In the stock market, there are stocks that can be sold at a very low price. This is what is called a penny stocks and this can be sold as low as 5 dollars per share. These stocks are traded over-the-counter in quotation services like the OTCBB and the Pink Sheet. Investors trade on this due to its very low price and possible fast growth in just several days. They can buy even millions of these. However when they trade, it is based on speculative conditions. Moreover, they can be at risk for such things as no sufficient financial information and limited liquidity. For this reason, there are only few traders for penny stocks.

The stocks that are normally priced are the common stocks or preferred stocks. Usually investors spend considerable amount of money to buy shares of stock. Prices that are high are considered most in demand therefore investors get interested in buying the shares. Before they buy these shares, they need to know more about the company first. Unlike penny stocks whose information is limited, the stock picks for regular stocks are detailed to stockholders, lowering the risks that penny stocks has.

Finding Penny Stocks

Penny stocks are hard to find because these are is little dollar volume at times. Besides, there are only few traders who buy such stocks because of high risk. Nevertheless, there are still those who prefer to buy these because of its low price and potential rapid growth.

If you want to start investing in penny stocks, you can start looking into Featured Profiles. Here, you will see penny stock picks where you can start out. Since the nature of penny stocks has limited financial reports and you’ll have to invest at your own risk, you will only see the companies that sell penny stocks. Generally though, Featured Profiles is a reliable resource of anything related to stock trade. You can see stock picks for the week where they describe the company in relevant details. You will see information for your fundamental or quantitative analysis in their stock picks. The stock picks usually have stock updates about how it was like in the trade the day before. Moreover, you can also get stocks newsletter upon subscription. The alerts can serve as your guide in the stock analysis and market analysis. But it will be at your own evaluation based on the information presented by the site.

Overall, if you want to start out with stock investment, whether it is with penny stocks or regular stocks, you can start out with the information provided by Featured Profiles. Instead of you doing a lot of research about a possible company where you can invest, you can start out with the stock picks in the said site.

What Featured Profiles Provides

The stock picks at Featured Profiles can be your guide on where to start investing. From there you may want to avail of other services of the site such as stock updates, newsletters, daily stock notes and other stock information in real time. You don’t necessarily have to decide solely from the information provided and expect real profit. However, it can be a good resource where you can conduct you stock analysis and market analysis.

Featured Profiles is a site that provides stocks picks including penny stocks . You can start your stock search here.

Article Source: http://www.ArticleBiz.com

By: Jose D. Roncal And Jose N. Abbo

Lost in all of the media frenzy surrounding Wall Street, the “meltdown” and the sub-prime lending debacle are certain lessons from history that can offer some useful perspective — and even have a calming effect. Economic “bubbles” are nothing new, and contrary to what the media might have you think, they don’t signal the end of Western Civilization, either.

In his book, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, Charles Mackay wrote, “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

That fact is as true today as it was when originally penned in 1841. Even then, speculative market bubbles had come and gone. One of the most curious spread through Holland some 200 years earlier, in the early 17th century. It was a financial epidemic that’s come to be known as “Tulipmania.”

When Carolus Clusius planted that first tulip bulb in the Botanical Garden in the Netherlands in 1593, no one could have predicted the absurd financial maelstrom that would eventually culminate in the “Great Commodity Crash of 1637.” By 1620, tulips had become a status symbol in the wealthiest of circles.

About that time word spread among high society that a mysterious plant virus had infected some of the bulbs. But rather than spelling the imminent demise of the tulip, the virus actually created unusual and beautiful streaks of vibrant color throughout the petals, making the new varieties even more coveted. The rich and famous always clamor for the rare and exclusive, so the prices for all tulip bulb varieties shot sky high. Greedy speculators came from far and wide looking to make a profit; the stage was set for a thundering herd approaching on the horizon.

There was so much excitement that tulip bulbs began trading on the local market exchanges, which operated much like modern-day commodity exchanges. Soon, the fever spread to the Dutch middle class, and everyone from noblemen to chimney sweeps was jumping on the tulip bulb bandwagon. They hadn’t suddenly developed green thumbs or a desire to take up floral arranging — far from it. They were swept up in the mass hysteria, hoping to strike it rich by buying low and selling high. A few did, but most did not.

A single bulb cost as much as a house

The bulb market rocketed out of control so fast it was not uncommon for the price to escalate 20-fold in a single month. In 1637, a single bulb of a particularly popular variety cost 10,000 florins. To put this in perspective, the same amount of money would have bought a nice little house along a canal in Amsterdam.

People who had worked their entire lives for the few possessions they owned began trading everything they owned — including that nice little house on the canal — just to purchase a single bulb. According to journals kept at the time, one person offered the fee-simple of twelve acres of building ground for a single Harlaem tulip. An Amsterdam variety fetched 4600 florins, a new carriage, two grey horses, and a complete suite of harness.

Munting, an author of that day, preserved the following “bill of lading” delivered in exchange for a single root of a rare species called the Viceroy:

Two lasts of wheat
Four lasts of rye
Four fat oxen
Eight fat swine
Twelve fat sheep
Two hogsheads of wine
Four tuns (barrels) of beer
Two tuns (barrels) of butter
One thousand lbs. of cheese
A complete bed
A suit of clothes
A silver drinking cup

As the mania spread, major local exchanges continued trading the bulbs without letup, and even expanded the market by offering option contracts to speculators. In essence, this gave those with less money to spend an opportunity to lose even more. Using leverage, one could purchase an option for a fraction of the cost of the actual bulb.

Leverage is risky business, especially if you’re putting your prize possessions on the line and hoping that the price will rise enough to not only make up for what you still owe but also to return a sizable profit when you sell.

But people swept up in herd mentality don’t stop to consider the risk/reward ratio — or, rather, the risk/ruination ratio. Otherwise, they might never have leveraged themselves so fully. They would have stopped to think that the slightest drop in price could mean not only losing their initial investment but going into debt — or even complete ruination. But of course, bolstered by lusty and mindless hope, people were mesmerized into believing that prices could go nowhere but up.

When a few of the more savvy speculators heard rumors that the Dutch government would soon attempt to set controls on the market, they started pulling out. Thus began the big unraveling. Buyers balked, sales slowed and prices faltered. But nothing can stop Mother Nature; there were still bulbs in the ground ready to be harvested.

Soon the bulb supply outweighed demand, and a slow downward price spiral began picking up speed. Panic set in. The once vibrant, if unrealistic, market for tulip bulbs quickly lost its luster. In less than six weeks, it ended in a resounding crash.

After sorting through all the bankruptcies and defaults, the supreme judges of Amsterdam simply declared tulip bulb speculation nothing more than gambling. All contracts negotiated during the frenzy were made null and void. In other words: worthless.

There were winners, of course — those who jumped in early, understood the psychology of the herd mentality, and got out in time, leaving fools in the rubble. When you compare Tulipmania to the recent “bubble” in real estate, you’d be hard pressed to find a more fitting aphorism: “Those who fail to learn from history are destined to repeat it.”

About the Author
Co-authors Jose D. Roncal and Jose N. Abbo share some 50 years of senior executive experience in international business, finance and economics. Both have authored numerous articles on business strategy, finance, accounting, capital markets and the global economy. For more on the authors and their book, The Big Gamble: Are You Investing or Speculating?, visit: Financial Speculation.

By: Contrarian Profits

– Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), the two last major investment banks left standing after the carnage Wall Street, have ended the era of investment banking by changing their status to bank holding companies. The change means the two firms can now create commercial banks that will be able to take deposits.

– The move marks a sea change on Wall Street 75 years since the Glass-Steagall Act that separated them from deposit-taking banks. The Federal Reserve will now take over from the Securities Exchange Commission as regulator of the two banks.

– "The decision marks the end of Wall Street as we have known it," said William Isaac, a former chairman of the FDIC. "It’s too bad."

– Concern is growing that Hank Paulson’s vast rescue plan for Wall Street may "crush" the dollar. According to Bloomberg: "The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market mutual funds will boost US borrowing as much as $1 trillion […] While the rescue may restore investor confidence to battered financial markets, traders will again focus on the twin budget and current-account deficits and negative real US interest rates."

– For investors who want to bet against the buck, on Friday Taipan Daily editor Justice Litle recommended four real assets set to profit from the death of the dollar.

– Worries are also mounting over the fate of hedge funds. "Hedge Funds Face Chaos," warned The New York Times on Sunday.

Hedge funds usually thrive when markets turn volatile. But Even these fast-money investors are struggling to cope with the wild swings in the markets, raising concerns that some may not survive.

Even before the Bush administration proposed its vast bailout for financial institutions, the hedge funds - those secretive, sometimes volatile investment vehicles for the rich - were on course for their worst year on record. The average fund is down nearly 5 percent so far this year.

– According to the fine print of the administration’s statement on its latest bailout, which will receive intense scrutiny this week, Uncle Sam will buy toxic debt from foreign-based banks with large US operations. Hank Paulson confirmed this on ABC’s This Week program, saying that coverage of foreign-based banks is "a distinction without a difference to the American people."

– The $700 billion figure Paulson has put out as the cost of his latest bailout measure is just $100 billion shy of the $800 billion price tag of the Iraq war so far.

– As the reality of the proposed bailout sets in US stock futures are pointing down. According to MarketWatch this morning: "S&P 500 futures fell 6.9 points to 1,239.10 and Nasdaq 100 futures dropped 10 points to 1,729.50. Dow industrial futures fell 78 points."

– Paulson also echoed John McCain’s much-derided view that the "fundamentals of the US economy are strong." Paulson told NBC’s Meet the Press: "I wouldn’t bet against the long-term fundamentals of this country." Although he didn’t specify whether he meant fundamentals such as inflation, jobless rate house prices or the hardworking American people, as John McCain later said he was referring to in his own statement.

– Paulson’s boss, President Bush, however struck a far more alarmist tone. After earlier calling the meltdown on Wall Street an "adjustment," the Commander in Chief said officials in his administration finally realized that "the house of cards was much bigger" than just the mortgage-finance system, or even Wall Street and that they worried about "the whole deck going down."

– The next card could well be the $62 trillion market for credit-default swaps, says Shah Gilani in Money Morning. The derivative instruments - which offer insurance against default - are neither transparent nor regulated. But they are all at risk. And they are already causing huge writedowns in the banking sector…

– Amid all the talk of bailouts, writedowns, credit-default swaps, subpime mortgages and the liquidity crisis, it’s easy to forget the reason for the current economic mess, says The Big Picture blogger, Barry Ritholz: the breakdown in the reason for ledning money in the first place…

Here is an oddly interesting observation: Over the entire history of human finance, the underlying premise of all credit transactions — loans, mortgages, and all debt instrument — has been the borrower’s ability to repay.

From 1 million B.C. up until the present, repayment ability was the dominant factor.

This goes as far back as when Og lent the guy in the next cave a few dozen clamshells in order to go and purchase that newfangled wheel. If Og didn’t think his neighbor would be able to repay him those clamshells, he never would’ve entered into what we can describe as the first commercial loan.

Since real estate loans are at the bottom of all of our current credit woes, let’s take mortgages as an example. The historical basis for making a loan for a home purchase was several simple factors: Employment history, Income, down payment, credit rating, assets, loan-to-value ratio of the property, and debt servicing ability. But for some crazy reason, those factors went away during the housing boom.

– Krugman in The New York Times points out the government’s latest bailout plan simply be to throw taxpayers’ money at distressed banks to convince Mr. Market that "everything’s OK" without ensuring that the taxpayer gets something of value in return…

The Treasury plan […] looks like an attempt to restore confidence in the financial system - that is, convince creditors of troubled institutions that everything’s OK - simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem - which seems doubtful - or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.

And there’s no quid pro quo here - nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.

Contrarian Profits is a contrarian investing news and opinion hub, providing market-beating ideas from the world’s top investment gurus.

Article Source: http://www.ArticleBiz.com

By:Shaun Rosenberg

Stock Orders and Stop limit orders are the two most common ways to exit a trade. They are both designed to help you exit a trade once it turns against you. But which one works better? Let's compare.

A Stop Order is an order that you can set at a given price to let you exit a trade when that price is reached. This is often used to protect profit and reduce risk.

For example say you own stock XYZ which is trading at $47. You set a stop order at $45 and that allows you to exit the trade if that stop order is reached. So as soon as the order is reached you will automatically sell the stock.

The disadvantage to this is if the market is moving very fast. If the markets are moving fast the stock could hit your $45 stop order, but fill you at $43. The stop limit order was designed to stop that from happening by combining it with a limit order.

If you placed a stop limit order on the same stock for a $45 stop and a $45 limit it would look differently. In this case the stop would trigger if the stock hits $45. However rather than filling automatically it simply triggers the limit order for $45.

Now the order will only get filled if you can sell it at $45 or higher. That way you do not get filled far below the original stop price you wanted.

Even thought this does seem to solve the problem it neglects the whole purpose for setting up a stop in the first place. When you place a stop it should be the most you are willing to lose on a trade. It should be the amount that you give up on the stock and look for profits elsewhere.

If you have a stop limit at $45 and the market is moving fast you will not get filled. That means the stock could crash to $38 and you would not have gotten out of the trade because you didn't want to get filled if the stock went under $45.

Stop limit orders attempt to save you a few cents but can end up costing you a few dollars. Because of this I prefer to lose strait stop orders when placing a trade.

For more information about stop orders visit http://www.stocks-simplified.com/ stop_order.html

For more information about the types of stock orders visit http://www.stocks-simplified.com/stock_orders.html