Title:
Why The Best Credit Cards Sometimes Aren’t The Most Obvious
Word Count:
311
Summary:
If you are just applying for your first credit card or are simply looking for a new credit card to add to the fold, one thing is for sure... you most likely want to find the best credit card possible.
So, what is the best credit card available today?
Unfortunately, I can’t answer that question for you. There are many different types of credit cards and like the shoes and clothes you wear, this isn’t a case of “one size fits all”.
What you really need to determine be...
Keywords:
Best Credit Cards
Article Body:
If you are just applying for your first credit card or are simply looking for a new credit card to add to the fold, one thing is for sure... you most likely want to find the best credit card possible.
So, what is the best credit card available today?
Unfortunately, I can’t answer that question for you. There are many different types of credit cards and like the shoes and clothes you wear, this isn’t a case of “one size fits all”.
What you really need to determine before trying to find the best credit card, is what things are important to you? Do you plan on carrying a high balance month to month? Will you be paying off your credit card balance in full at the end of each billing period? Would you like to earn travel rewards or shopping credits? How about gas points?
As you can see, there are many different reasons to get a credit card and knowing what you want out of your credit card is very important.
Some other factors that you should really take into consideration when applying for a credit card are things like annual fees, minimum payment requirements, and grace periods offered. Take all of these things into account when you’re making a decision on which credit card to apply for.
Hopefully this short article has given you some helpful food for thought on how to find the best credit card for your individual situation and needs. Remember, there isn’t one particular card that is best for everyone so it’s vital that you really narrow down what is important to you in a credit card and find the cards that offer the most benefits in that category. Best of luck in your search for the perfect credit card, and remember to be responsible with that new plastic!
Monday, September 14, 2009
Saturday, September 12, 2009
Why The Best Person To Manage Your Money Is You
Title:
Why The Best Person To Manage Your Money Is You
Word Count:
1315
Summary:
Self-Reliance is the Quickest Path to Financial Freedom
When I tell people that self-reliance is the quickest path to achieve financial freedom when it comes to investing, many people look at me like I'm crazy. In fact, I know a lot of people that told me they handed their money over to a firm after trying to manage their own portfolio and sustaining significant losses. But every person that had unsatisfactory results took the plunge without adequate preparation. They list...
Keywords:
safest place to invest money, advanced wealth planning techniques, achieve financial freedom
Article Body:
Self-Reliance is the Quickest Path to Financial Freedom
When I tell people that self-reliance is the quickest path to achieve financial freedom when it comes to investing, many people look at me like I'm crazy. In fact, I know a lot of people that told me they handed their money over to a firm after trying to manage their own portfolio and sustaining significant losses. But every person that had unsatisfactory results took the plunge without adequate preparation. They listened to the pundits on MSNBC, watched the Bloomberg Report, and read the Wall Street Journal and thought that they were sufficiently knowledgeable then to be great stock pickers.
They failed to seek out and truly learn how to invest properly and then failed to develop any type of investment system. Of course they were going to fail. Yet learning how to invest and make significant returns upward of 20% to 25% a year is not difficult at all.
It's either wrong choices about learning the wrong investment systems or laziness that causes the overwhelming majority of do-it-yourselfers to fail. But it doesn't need to be that way at all. There was an article in last month’s Economist that stated that the belief that more leisure time leads to increased happiness was a myth. Instead, the article revealed that people predominantly used excess leisure time to watch more TV rather than engage in any activity that really improved their outlook on life.
There was an article in the January, 2007 Economist that claimed the belief that more leisure time leads to increased happiness was a myth. Instead, the article revealed that people predominantly used excess leisure time to watch more TV rather than engage in any activity that really improved their quality of life.
However, I don’t agree with the conclusion of the Economist study. All it would take is a simple re-adjustment of perspective, I believe, to change that conclusion. For example, if it was mandated that people could not use their extra leisure time to watch TV but must engage in activities that require human interaction, then more people would have dinner with their friends, go to a play, concert or sporting event, enjoy a pick-up basketball game with their kids, and so on. I guarantee you that the study would conclude something different if this were the case. It’s just a matter of taking personal responsibility for one’s happiness.
In investing, the same rules apply. I’ve read and heard way too many stories where people’s retirements were ruined because they handed their money over to another person at an investment firm. As the financial consultant proceeded to lose all of the client's money, he or she continuously told the client not to worry because “stock markets go down but always come back” while never once admitting that the loses were due to poor decisions. By the time these clients finally decided to pull their accounts, many times they had already lost USD $500,000 or more. I’m not really sure why people are willing to work so hard to save so much money but yet so cavalierly give their money to someone else to invest for them. But they do.
If you take charge of your own investment life, I guarantee you that your results will be better than you ever could have imagined.
They might not improve right away, but over time, they will. Remember, this is a lifelong investment you will be making so you must give yourself a couple of years to judge the returns of your efforts. In order to achieve exceptional results, there are no shortcuts. In investing, however, people seek shortcuts all the time.
They pay thousands of dollars to newsletters to tell them exactly what stocks to buy and curse them when they lose money. They pay tens of thousands of dollars to their financial consultants every year and curse them when they lose them money. It is quite odd to me that the most controlling of people that will pour their hearts and souls into their careers and work extra hours because they do not trust their co-workers to do the job “right”, will turn around and so easily concede control of the management of the wealth that they worked so hard to create.
Many times I hear people claim, “I don’t know anything about investing, so I’m going to let the experts handle it”, and consequently hand their money to Merrill Lynch, UBS, or Goldman Sachs to manage. This notion is just plain silly for two reasons. Consider that most people have undergone at least 12 years of schooling. The most important class you could have ever taken during those 12 years would have been one about creating wealth and investing, but since no traditional institutions of education offer such a class, you must be willing to take one additional class to secure the rest of your financial life.
If we consider the fact that a the hours of a 16 week college class that met four days a week for 1.5 hours a class, or 96 hours of learning, is probably sufficient to set one on the path to significantly greater financial returns, it’s just plain silly that the overwhelming number of people make excuses that they just don’t have this kind of time.
The second reason this notion is so silly is that most likely, your financial consultant and the money manager he or she utilizes barely know more about investing than you do. 98% of money managers peg their portfolio to the major domestic index in their country, so this is something you could do in your sleep. Next time you meet with your financial consultant, take several hours before the meeting to study the global economy and use your knowledge to seize control of the conversation.
Ask what are the best asset classes for 2007 and why. Ask what emerging nations in the Middle East and Russia are likely to do with their massive petrodollar surpluses and how their actions are likely to move global markets. Ask them about the dynamics of the dollar, Euro, and pound sterling currency markets and how this influences how your portfolio is allocated. Most people don’t realize how little their financial consultants really know because they don’t know the right questions to ask.
Consider this. How many clients does your financial consultant have? 50? 100? 300? If you still think that you don’t have the time to learn, consider that your consultant most likely doesn’t have much time for you either. If you really want to make progress with your financial future, it is up to you to find the time. Several thousand or even several hundred dollars invested in courses and education that will teach you how to invest is money much better spent than paying tens of thousands of dollars in fees year after year after year to someone merely to achieve mediocre returns.
And what’s my advice for the type of courses/ books you should seek? With the increasing accessibility to information that is highly correlated to significant returns, I would most definitely concentrate on the longtail of investment strategies – those strategies that have evolved with the evolving information landscape and technology to leverage information to identify stocks best poised to explode higher versus outdated traditional fundamental and value investing strategies. That would be a good place to start.
Most people who try to do it themselves invest on a hot stock tip from their friend or from an unqualified financial consultant. Then when they lose money, they tell themselves it's much better to allow someone else to handle their money. However,that's because they never took the time to learn a proper investment system before making the plunge into the global stock markets. Learn a proper system first and you'll be well on your way to establishing financial freedom.
Why The Best Person To Manage Your Money Is You
Word Count:
1315
Summary:
Self-Reliance is the Quickest Path to Financial Freedom
When I tell people that self-reliance is the quickest path to achieve financial freedom when it comes to investing, many people look at me like I'm crazy. In fact, I know a lot of people that told me they handed their money over to a firm after trying to manage their own portfolio and sustaining significant losses. But every person that had unsatisfactory results took the plunge without adequate preparation. They list...
Keywords:
safest place to invest money, advanced wealth planning techniques, achieve financial freedom
Article Body:
Self-Reliance is the Quickest Path to Financial Freedom
When I tell people that self-reliance is the quickest path to achieve financial freedom when it comes to investing, many people look at me like I'm crazy. In fact, I know a lot of people that told me they handed their money over to a firm after trying to manage their own portfolio and sustaining significant losses. But every person that had unsatisfactory results took the plunge without adequate preparation. They listened to the pundits on MSNBC, watched the Bloomberg Report, and read the Wall Street Journal and thought that they were sufficiently knowledgeable then to be great stock pickers.
They failed to seek out and truly learn how to invest properly and then failed to develop any type of investment system. Of course they were going to fail. Yet learning how to invest and make significant returns upward of 20% to 25% a year is not difficult at all.
It's either wrong choices about learning the wrong investment systems or laziness that causes the overwhelming majority of do-it-yourselfers to fail. But it doesn't need to be that way at all. There was an article in last month’s Economist that stated that the belief that more leisure time leads to increased happiness was a myth. Instead, the article revealed that people predominantly used excess leisure time to watch more TV rather than engage in any activity that really improved their outlook on life.
There was an article in the January, 2007 Economist that claimed the belief that more leisure time leads to increased happiness was a myth. Instead, the article revealed that people predominantly used excess leisure time to watch more TV rather than engage in any activity that really improved their quality of life.
However, I don’t agree with the conclusion of the Economist study. All it would take is a simple re-adjustment of perspective, I believe, to change that conclusion. For example, if it was mandated that people could not use their extra leisure time to watch TV but must engage in activities that require human interaction, then more people would have dinner with their friends, go to a play, concert or sporting event, enjoy a pick-up basketball game with their kids, and so on. I guarantee you that the study would conclude something different if this were the case. It’s just a matter of taking personal responsibility for one’s happiness.
In investing, the same rules apply. I’ve read and heard way too many stories where people’s retirements were ruined because they handed their money over to another person at an investment firm. As the financial consultant proceeded to lose all of the client's money, he or she continuously told the client not to worry because “stock markets go down but always come back” while never once admitting that the loses were due to poor decisions. By the time these clients finally decided to pull their accounts, many times they had already lost USD $500,000 or more. I’m not really sure why people are willing to work so hard to save so much money but yet so cavalierly give their money to someone else to invest for them. But they do.
If you take charge of your own investment life, I guarantee you that your results will be better than you ever could have imagined.
They might not improve right away, but over time, they will. Remember, this is a lifelong investment you will be making so you must give yourself a couple of years to judge the returns of your efforts. In order to achieve exceptional results, there are no shortcuts. In investing, however, people seek shortcuts all the time.
They pay thousands of dollars to newsletters to tell them exactly what stocks to buy and curse them when they lose money. They pay tens of thousands of dollars to their financial consultants every year and curse them when they lose them money. It is quite odd to me that the most controlling of people that will pour their hearts and souls into their careers and work extra hours because they do not trust their co-workers to do the job “right”, will turn around and so easily concede control of the management of the wealth that they worked so hard to create.
Many times I hear people claim, “I don’t know anything about investing, so I’m going to let the experts handle it”, and consequently hand their money to Merrill Lynch, UBS, or Goldman Sachs to manage. This notion is just plain silly for two reasons. Consider that most people have undergone at least 12 years of schooling. The most important class you could have ever taken during those 12 years would have been one about creating wealth and investing, but since no traditional institutions of education offer such a class, you must be willing to take one additional class to secure the rest of your financial life.
If we consider the fact that a the hours of a 16 week college class that met four days a week for 1.5 hours a class, or 96 hours of learning, is probably sufficient to set one on the path to significantly greater financial returns, it’s just plain silly that the overwhelming number of people make excuses that they just don’t have this kind of time.
The second reason this notion is so silly is that most likely, your financial consultant and the money manager he or she utilizes barely know more about investing than you do. 98% of money managers peg their portfolio to the major domestic index in their country, so this is something you could do in your sleep. Next time you meet with your financial consultant, take several hours before the meeting to study the global economy and use your knowledge to seize control of the conversation.
Ask what are the best asset classes for 2007 and why. Ask what emerging nations in the Middle East and Russia are likely to do with their massive petrodollar surpluses and how their actions are likely to move global markets. Ask them about the dynamics of the dollar, Euro, and pound sterling currency markets and how this influences how your portfolio is allocated. Most people don’t realize how little their financial consultants really know because they don’t know the right questions to ask.
Consider this. How many clients does your financial consultant have? 50? 100? 300? If you still think that you don’t have the time to learn, consider that your consultant most likely doesn’t have much time for you either. If you really want to make progress with your financial future, it is up to you to find the time. Several thousand or even several hundred dollars invested in courses and education that will teach you how to invest is money much better spent than paying tens of thousands of dollars in fees year after year after year to someone merely to achieve mediocre returns.
And what’s my advice for the type of courses/ books you should seek? With the increasing accessibility to information that is highly correlated to significant returns, I would most definitely concentrate on the longtail of investment strategies – those strategies that have evolved with the evolving information landscape and technology to leverage information to identify stocks best poised to explode higher versus outdated traditional fundamental and value investing strategies. That would be a good place to start.
Most people who try to do it themselves invest on a hot stock tip from their friend or from an unqualified financial consultant. Then when they lose money, they tell themselves it's much better to allow someone else to handle their money. However,that's because they never took the time to learn a proper investment system before making the plunge into the global stock markets. Learn a proper system first and you'll be well on your way to establishing financial freedom.
Why The U.S. Fed's 0.50% Rate Cut Won't Save The U.S. Markets
Title:
Why The U.S. Fed's 0.50% Rate Cut Won't Save The U.S. Markets
Word Count:
1032
Summary:
“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights” - Alan Greenspan, 1966, more than 20 years before he served as Chairman of the U.S. Federal Reserve from 1987-2006. Obviously, Alan Greenspan’s feelings regarding deficit spending experienced a 180º reversal once he became the U.S. Federal Reserve Chairman. However, one only need to understand the truth in that com...
Keywords:
wealth building techniques, u.s. dollar crisis, interest rate crisis,stocks, contrarian investing
Article Body:
“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights” - Alan Greenspan, 1966, more than 20 years before he served as Chairman of the U.S. Federal Reserve from 1987-2006. Obviously, Alan Greenspan’s feelings regarding deficit spending experienced a 180º reversal once he became the U.S. Federal Reserve Chairman. However, one only need to understand the truth in that comment to understand where your money should be invested and why this mini-rally in global markets spurred by the Fed’s decision to cut the Federal Funds rate by 0.50%, even if it should extend into a larger rally, should cause you to be scared, and very scared at that.
Overshadowed by the Fed’s decision to cut interest rates and the subsequent rally in global stock markets was a much more critical story. U.S. Secretary of Treasury Hank Paulson recently urged Congress to raise the national debt ceiling, stating that the U.S. would reach the current national debt ceiling by October 1st. More... Such a decision to raise the ceiling from $8.965 trillion to $9.82 trillion, besides preventing the U.S. Government from defaulting on U.S. Treasury bonds, is necessary to retain international confidence in the “full faith and credit” of the U.S. government. So far the U.S House of Representatives has approved the increase in the debt ceiling, but the U.S. Senate has yet to climb on board. A simple way to keep the U.S. national debt down would be to simply manipulate the inputs that contribute to national debt figures as is already done, but that is another story for a different day. Most Americans, not to mention foreigners, are oblivious to the fact that this increase in the national debt ceiling is the fifth such raise since President Bush took office in 2001.
Obviously, the U.S. government has engaged in massive deficit spending over the past several years. Remember how I started this blog today. What is deficit spending? In case you’ve forgotten already, I’ll re-state the opening quote of this blog. According to none other than our former Federal Reserve Chairman, deficit spending “is simply a scheme for the confiscation of wealth.” Certainly, confiscation of wealth happens through the destruction of purchasing power parity of fiat currency, namely the U.S. dollar, but the greatest confiscation of wealth has yet to happen. That will occur when the Peak Investment Crisis hits. But it’s coming. I can assure you of that.
As far as Alan Greenspan’s recent sharp criticism of President Bushs’s fiscal irresponsibility and ineptitude in managing the national deficit, I had to laugh at the duplicity of those criticisms. Alan Greenspan created, by and large, all the problems that current U.S. Federal Reserve Chairman Ben Bernanke has inherited. Sure, the President and U.S. Congress, not Greenspan, set the national budget every year, but Greenspan’s actions as Federal Reserve Chairman to establish international confidence in the U.S. dollar as the “de facto” global currency even when the dollar continued to be backed by nothing were largely responsible for the dire situation the dollar faces today. The U.S. dollar has gone from being backed by gold, then oil, then the U.S. military. Gold is probably the most misunderstood investment asset class due to great short-term volatility in the price of the underlying commodity and gold stocks. However, if you understand the root causes of the volatility, you can use the volatility to help, instead of hurt, your returns. Some short-term volatility most likely is caused by Central Bank manipulation of prices, a theory that used to be generally relegated to conspiracy theorists, but now even advanced by U.S. Senators such as Ron Paul. However, there are many other factors that cause wild fluctuations in the price of gold in the short term yet never influence its long-term luster and shine.
Furthermore, although Bush has been widely criticized for allowing the national debt grow from 57% of GDP to 70% of GDP, if I recall correctly, under Reagan, national debt as a percent of GDP grew from 32% to 52%. The point is this. I am no fan of President Bush, but Bush didn’t create this whole national debt and currency fiasco that exists today all by himself. All the interest rate cuts in the world can’t solve the problems created by decades of poor risk management, loose credit, irresponsible money supply expansion and a stock market that has risen over the past year on the churning engines of debt expansion.
That’s why when housing stocks continued to rise last week and were beneficiaries of the “a rising tide lifts all boats” theory, I established puts on some housing stocks. Any continuing rise in the share price of financial institutions with heavy exposure to subprime mortgages also offer fine opportunities to establish puts as well. The general investing public may be fooled by the interest rate cuts, but not me. I know that in the end, the house of cards will all come tumbling down.
Finally, back on March 3, 2007, the following was reported: "The states would only change the dollar peg simultaneously, U.A.E. Central Bank Governor Sultan Bin Nasser al-Suwaidi told reporters today. The six countries form the Gulf Cooperation Council and their central bank officials meet next in April. The other countries are Bahrain, Qatar, Oman and Kuwait. "'We will not act unilaterally,' al-Suwaidi said in Dubai, U.A.E."
Not even three weeks later after this coalition of Middle Eastern countries announced their commitment to the dollar, as we reported on our blog, "The Underground Investor", Kuwait defied this pledge and unpegged its currency from the dollar. Kuwait inferred that pegging its currency to the weak dollar was causing unnecessary inflation. Now, this week, speculation runs rampant that Saudi Arabia is to follow in Kuwait's footsteps as it failed to take action on the U.S. Fed's interest rate cut this past September 18th. The cracks keep coming. If you want to avoid disaster in the stock markets, the time to start planning is now.
Why The U.S. Fed's 0.50% Rate Cut Won't Save The U.S. Markets
Word Count:
1032
Summary:
“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights” - Alan Greenspan, 1966, more than 20 years before he served as Chairman of the U.S. Federal Reserve from 1987-2006. Obviously, Alan Greenspan’s feelings regarding deficit spending experienced a 180º reversal once he became the U.S. Federal Reserve Chairman. However, one only need to understand the truth in that com...
Keywords:
wealth building techniques, u.s. dollar crisis, interest rate crisis,stocks, contrarian investing
Article Body:
“Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights” - Alan Greenspan, 1966, more than 20 years before he served as Chairman of the U.S. Federal Reserve from 1987-2006. Obviously, Alan Greenspan’s feelings regarding deficit spending experienced a 180º reversal once he became the U.S. Federal Reserve Chairman. However, one only need to understand the truth in that comment to understand where your money should be invested and why this mini-rally in global markets spurred by the Fed’s decision to cut the Federal Funds rate by 0.50%, even if it should extend into a larger rally, should cause you to be scared, and very scared at that.
Overshadowed by the Fed’s decision to cut interest rates and the subsequent rally in global stock markets was a much more critical story. U.S. Secretary of Treasury Hank Paulson recently urged Congress to raise the national debt ceiling, stating that the U.S. would reach the current national debt ceiling by October 1st. More... Such a decision to raise the ceiling from $8.965 trillion to $9.82 trillion, besides preventing the U.S. Government from defaulting on U.S. Treasury bonds, is necessary to retain international confidence in the “full faith and credit” of the U.S. government. So far the U.S House of Representatives has approved the increase in the debt ceiling, but the U.S. Senate has yet to climb on board. A simple way to keep the U.S. national debt down would be to simply manipulate the inputs that contribute to national debt figures as is already done, but that is another story for a different day. Most Americans, not to mention foreigners, are oblivious to the fact that this increase in the national debt ceiling is the fifth such raise since President Bush took office in 2001.
Obviously, the U.S. government has engaged in massive deficit spending over the past several years. Remember how I started this blog today. What is deficit spending? In case you’ve forgotten already, I’ll re-state the opening quote of this blog. According to none other than our former Federal Reserve Chairman, deficit spending “is simply a scheme for the confiscation of wealth.” Certainly, confiscation of wealth happens through the destruction of purchasing power parity of fiat currency, namely the U.S. dollar, but the greatest confiscation of wealth has yet to happen. That will occur when the Peak Investment Crisis hits. But it’s coming. I can assure you of that.
As far as Alan Greenspan’s recent sharp criticism of President Bushs’s fiscal irresponsibility and ineptitude in managing the national deficit, I had to laugh at the duplicity of those criticisms. Alan Greenspan created, by and large, all the problems that current U.S. Federal Reserve Chairman Ben Bernanke has inherited. Sure, the President and U.S. Congress, not Greenspan, set the national budget every year, but Greenspan’s actions as Federal Reserve Chairman to establish international confidence in the U.S. dollar as the “de facto” global currency even when the dollar continued to be backed by nothing were largely responsible for the dire situation the dollar faces today. The U.S. dollar has gone from being backed by gold, then oil, then the U.S. military. Gold is probably the most misunderstood investment asset class due to great short-term volatility in the price of the underlying commodity and gold stocks. However, if you understand the root causes of the volatility, you can use the volatility to help, instead of hurt, your returns. Some short-term volatility most likely is caused by Central Bank manipulation of prices, a theory that used to be generally relegated to conspiracy theorists, but now even advanced by U.S. Senators such as Ron Paul. However, there are many other factors that cause wild fluctuations in the price of gold in the short term yet never influence its long-term luster and shine.
Furthermore, although Bush has been widely criticized for allowing the national debt grow from 57% of GDP to 70% of GDP, if I recall correctly, under Reagan, national debt as a percent of GDP grew from 32% to 52%. The point is this. I am no fan of President Bush, but Bush didn’t create this whole national debt and currency fiasco that exists today all by himself. All the interest rate cuts in the world can’t solve the problems created by decades of poor risk management, loose credit, irresponsible money supply expansion and a stock market that has risen over the past year on the churning engines of debt expansion.
That’s why when housing stocks continued to rise last week and were beneficiaries of the “a rising tide lifts all boats” theory, I established puts on some housing stocks. Any continuing rise in the share price of financial institutions with heavy exposure to subprime mortgages also offer fine opportunities to establish puts as well. The general investing public may be fooled by the interest rate cuts, but not me. I know that in the end, the house of cards will all come tumbling down.
Finally, back on March 3, 2007, the following was reported: "The states would only change the dollar peg simultaneously, U.A.E. Central Bank Governor Sultan Bin Nasser al-Suwaidi told reporters today. The six countries form the Gulf Cooperation Council and their central bank officials meet next in April. The other countries are Bahrain, Qatar, Oman and Kuwait. "'We will not act unilaterally,' al-Suwaidi said in Dubai, U.A.E."
Not even three weeks later after this coalition of Middle Eastern countries announced their commitment to the dollar, as we reported on our blog, "The Underground Investor", Kuwait defied this pledge and unpegged its currency from the dollar. Kuwait inferred that pegging its currency to the weak dollar was causing unnecessary inflation. Now, this week, speculation runs rampant that Saudi Arabia is to follow in Kuwait's footsteps as it failed to take action on the U.S. Fed's interest rate cut this past September 18th. The cracks keep coming. If you want to avoid disaster in the stock markets, the time to start planning is now.
Why The Vast Majority Of Investment Professionals Are Not Trustworthy
Title:
Why The Vast Majority Of Investment Professionals Are Not Trustworthy
Word Count:
1442
Summary:
A big story that made the rounds in the financial media last month was Jim Cramer’s (of the Street.com) statement that some hedge fund managers spread false rumors about a company to large trading desks and the media to drive a stock price lower. He said this practice is illegal, but easy to do "because the SEC [Securities Exchange Commission, the U.S. regulatory body] doesn't understand it." Furthermore, the extremely wealthy former hedge fund manager boasted, “What’s impor...
Keywords:
investment industry fraud, safest places to invest money, learn how to invest, best ways to invest
Article Body:
A big story that made the rounds in the financial media last month was Jim Cramer’s (of the Street.com) statement that some hedge fund managers spread false rumors about a company to large trading desks and the media to drive a stock price lower. He said this practice is illegal, but easy to do "because the SEC [Securities Exchange Commission, the U.S. regulatory body] doesn't understand it." Furthermore, the extremely wealthy former hedge fund manager boasted, “What’s important when you are in hedge fund mode,” says Cramer, “is to not do anything remotely truthful, because the truth is so against your view.”
For those of you that remain skeptical about the deceitful practices of investment professionals and firms, perhaps an insider’s admission will finally convince you. Why these stories even make big headlines is beyond me. As a former industry insider myself, I’ve been saying for years that the investment industry is full of investment professionals, everyone from financial consultants to private wealth managers to professional money managers, hard at work weaving the emperor’s new clothes. However, only when a big mouth like Cramer speaks of the dishonesty that netted him great wealth does it attract attention.
For those of you not familiar with the fable “The Emperor’s New Clothes” let me summarize it for you. Long ago in a fabled kingdom, there lived an emperor whose vanity was legendary. Two swindlers, Guido and Luigi Farabutto, knew that they could capitalize on this emperor’s character flaw to make a huge profit. They approached the emperor and told him that they would sew him the finest suits of a very expensive special cloth that would be invisible to anyone that was stupid or of low character. The emperor, fearing that he would not be able to see the clothes, sent two of his men to go see the suits. The men returned, and afraid to tell the emperor they could not see the clothes, told the emperor that the suits were the most beautiful suits they had ever seen.
When the emperor went to see the Farabutto’s, knowing that his servants had been able to see the clothes, he did not want to admit that he could not see the clothes for fear of being considered stupid and of low character. So he proceeded to allow himself to be dressed in non-existent clothes for a parade through town and proceeded to walk through town in his underwear. When he came upon a young boy that pointed at him and said, “But he has no clothes”, only then did the emperor realized that he had been swindled.
It is amazing to me that many investors, even those with millions at investment firms, actually believe that their advisor or their firm has their best interests at heart. In fact, in my list of “101 Reasons Why Managing Your Own Money is the Only Way to Build Wealth” at http://www.smartknowledgeu.com, I’ve given readers 101 reasons why this is very, very rarely the case. Of course, everyone thinks that their advisor or financial consultant is the one guy or gal at their firm that actually cares about their financial security. If only they could spend just one day in the trenches with their advisor, they would 999 times out of 1000, witness a completely different story. I’ll relay another strategy I heard about a top financial consultant at a top Wall Street firm that should get your attention.
This top financial consultant managed many million dollar accounts. The way he would get wealthy investors to trust him was to demonstrate to them his ability to pick stocks that performed phenomenally well. To accomplish this, he would find a very thinly traded stock that historically had been very volatile. He would pay for a list of high net worth clients, call ten people on that list and tell them he was a top financial consultant at his firm. Of course, this would not get the attention of these wealthy individuals because they did not know him from Adam. Knowing they would be hesitant to hand their money to him and begin a relationship with him, he would acknowledge their reservations. He would then proceed to ask them to write the name of this volatile stock that he had researched on a piece of paper. He would then tell these 10 individuals that his stock picking methodology was so good that he was 100% sure that if they invested in this stock, they would make a healthy profit in a short period of time.
Then he would take the next 10 people on the list, repeat this scam, but instead, tell these 10 people that he was 100% sure that they would make lots of money from this stock if they purchased put options on this stock. Then he would wait several weeks until the stock moved 25% or so. If the stock gained, he would call the 10 people that he told he was 100% sure they would make lots of money from buying the stock. If the stock lost 25% or so, he would forget about the 10 wealthy individuals he promised would make lots of money by buying this stock and call the 10 people he told to short the stock. When he called these individuals they were amazed that he was right regarding a stock that they had never heard of, and many agreed to give lots of money to him.
I tell you this story because schemes like this, designed to make it appear as though these investment “professionals”, and I use this term very lightly, really know what they are doing, when in fact, they are selling nothing more than emperor’s clothes to you. In fact if you have been reading my blogs for a while now, you know that the strategies of diversification, asset allocation, and low volatility are all just emperor’s clothes as well. Though they may sound great to you, that’s exactly what the very best of all sales strategies accomplish. They are designed so well that they make you feel comfortable and in charge. The very best emperor’s clothes “sell” customers without the customers even realizing that they had been highly selected targets. Just search our “Down the Rabbit Hole” and “Educational resources” articles at http://www.theundergroundinvestor.com to discover why all of the best known investment strategies today are nothing more than emperor’s clothes.
My estimate of the percent of professionals that weave emperor clothes every day to hand to investors is 99%. They weave schemes, marketing strategies, and sales strategies in complex ways so that upon presentation to you, they seem like the finest financial strategies designed especially for you, their finest clients. Only in the end, these strategies leave you financially naked, so much so, that even children with no financial level of sophistication, would comment upon seeing these investors that so willingly let themselves be taken for a ride, “But he has no wealth.”
In fact, just last week, I read this article with statements from the CEO of a firm that handles the accounts of some of the wealthiest people in America about what it takes to truly build wealth. Many of his statements, though emperor’s clothes arguments that most people accept as truth, were so ludicrous that I laughed out loud, knowing that he had been able to weave emperor’s clothes for the top tier of wealthiest clients in America. Don't get me wrong, it's not that I believe that everyone in the business is out to scam you out of your hard earned money. There are some truly good, honest people in the business.
However, due to how firms compensate their financial consultants, this much is inevitable. There will come a time, and most likely several times, when a consultant will have to make a choice between you and himself/herself. This means that the consultant will have to choose between doing the absolute best thing for you and doing something not as good for you but better for his or her paycheck. And having been in the business, I know plenty of consultants that chose the latter many times and rarely any at all that chose the latter infrequently.
Always remember Jim Cramer, someone that built an estimated fortune of $100 million by manipulating wealthy clients, stated, “What’s important when you are in hedge fund mode, is to not do anything remotely truthful, because the truth is so against your view.” And when you read Cramer’s statement again, know that this mentality predominates among almost all investment industry professionals, not just Jim Cramer.
Why The Vast Majority Of Investment Professionals Are Not Trustworthy
Word Count:
1442
Summary:
A big story that made the rounds in the financial media last month was Jim Cramer’s (of the Street.com) statement that some hedge fund managers spread false rumors about a company to large trading desks and the media to drive a stock price lower. He said this practice is illegal, but easy to do "because the SEC [Securities Exchange Commission, the U.S. regulatory body] doesn't understand it." Furthermore, the extremely wealthy former hedge fund manager boasted, “What’s impor...
Keywords:
investment industry fraud, safest places to invest money, learn how to invest, best ways to invest
Article Body:
A big story that made the rounds in the financial media last month was Jim Cramer’s (of the Street.com) statement that some hedge fund managers spread false rumors about a company to large trading desks and the media to drive a stock price lower. He said this practice is illegal, but easy to do "because the SEC [Securities Exchange Commission, the U.S. regulatory body] doesn't understand it." Furthermore, the extremely wealthy former hedge fund manager boasted, “What’s important when you are in hedge fund mode,” says Cramer, “is to not do anything remotely truthful, because the truth is so against your view.”
For those of you that remain skeptical about the deceitful practices of investment professionals and firms, perhaps an insider’s admission will finally convince you. Why these stories even make big headlines is beyond me. As a former industry insider myself, I’ve been saying for years that the investment industry is full of investment professionals, everyone from financial consultants to private wealth managers to professional money managers, hard at work weaving the emperor’s new clothes. However, only when a big mouth like Cramer speaks of the dishonesty that netted him great wealth does it attract attention.
For those of you not familiar with the fable “The Emperor’s New Clothes” let me summarize it for you. Long ago in a fabled kingdom, there lived an emperor whose vanity was legendary. Two swindlers, Guido and Luigi Farabutto, knew that they could capitalize on this emperor’s character flaw to make a huge profit. They approached the emperor and told him that they would sew him the finest suits of a very expensive special cloth that would be invisible to anyone that was stupid or of low character. The emperor, fearing that he would not be able to see the clothes, sent two of his men to go see the suits. The men returned, and afraid to tell the emperor they could not see the clothes, told the emperor that the suits were the most beautiful suits they had ever seen.
When the emperor went to see the Farabutto’s, knowing that his servants had been able to see the clothes, he did not want to admit that he could not see the clothes for fear of being considered stupid and of low character. So he proceeded to allow himself to be dressed in non-existent clothes for a parade through town and proceeded to walk through town in his underwear. When he came upon a young boy that pointed at him and said, “But he has no clothes”, only then did the emperor realized that he had been swindled.
It is amazing to me that many investors, even those with millions at investment firms, actually believe that their advisor or their firm has their best interests at heart. In fact, in my list of “101 Reasons Why Managing Your Own Money is the Only Way to Build Wealth” at http://www.smartknowledgeu.com, I’ve given readers 101 reasons why this is very, very rarely the case. Of course, everyone thinks that their advisor or financial consultant is the one guy or gal at their firm that actually cares about their financial security. If only they could spend just one day in the trenches with their advisor, they would 999 times out of 1000, witness a completely different story. I’ll relay another strategy I heard about a top financial consultant at a top Wall Street firm that should get your attention.
This top financial consultant managed many million dollar accounts. The way he would get wealthy investors to trust him was to demonstrate to them his ability to pick stocks that performed phenomenally well. To accomplish this, he would find a very thinly traded stock that historically had been very volatile. He would pay for a list of high net worth clients, call ten people on that list and tell them he was a top financial consultant at his firm. Of course, this would not get the attention of these wealthy individuals because they did not know him from Adam. Knowing they would be hesitant to hand their money to him and begin a relationship with him, he would acknowledge their reservations. He would then proceed to ask them to write the name of this volatile stock that he had researched on a piece of paper. He would then tell these 10 individuals that his stock picking methodology was so good that he was 100% sure that if they invested in this stock, they would make a healthy profit in a short period of time.
Then he would take the next 10 people on the list, repeat this scam, but instead, tell these 10 people that he was 100% sure that they would make lots of money from this stock if they purchased put options on this stock. Then he would wait several weeks until the stock moved 25% or so. If the stock gained, he would call the 10 people that he told he was 100% sure they would make lots of money from buying the stock. If the stock lost 25% or so, he would forget about the 10 wealthy individuals he promised would make lots of money by buying this stock and call the 10 people he told to short the stock. When he called these individuals they were amazed that he was right regarding a stock that they had never heard of, and many agreed to give lots of money to him.
I tell you this story because schemes like this, designed to make it appear as though these investment “professionals”, and I use this term very lightly, really know what they are doing, when in fact, they are selling nothing more than emperor’s clothes to you. In fact if you have been reading my blogs for a while now, you know that the strategies of diversification, asset allocation, and low volatility are all just emperor’s clothes as well. Though they may sound great to you, that’s exactly what the very best of all sales strategies accomplish. They are designed so well that they make you feel comfortable and in charge. The very best emperor’s clothes “sell” customers without the customers even realizing that they had been highly selected targets. Just search our “Down the Rabbit Hole” and “Educational resources” articles at http://www.theundergroundinvestor.com to discover why all of the best known investment strategies today are nothing more than emperor’s clothes.
My estimate of the percent of professionals that weave emperor clothes every day to hand to investors is 99%. They weave schemes, marketing strategies, and sales strategies in complex ways so that upon presentation to you, they seem like the finest financial strategies designed especially for you, their finest clients. Only in the end, these strategies leave you financially naked, so much so, that even children with no financial level of sophistication, would comment upon seeing these investors that so willingly let themselves be taken for a ride, “But he has no wealth.”
In fact, just last week, I read this article with statements from the CEO of a firm that handles the accounts of some of the wealthiest people in America about what it takes to truly build wealth. Many of his statements, though emperor’s clothes arguments that most people accept as truth, were so ludicrous that I laughed out loud, knowing that he had been able to weave emperor’s clothes for the top tier of wealthiest clients in America. Don't get me wrong, it's not that I believe that everyone in the business is out to scam you out of your hard earned money. There are some truly good, honest people in the business.
However, due to how firms compensate their financial consultants, this much is inevitable. There will come a time, and most likely several times, when a consultant will have to make a choice between you and himself/herself. This means that the consultant will have to choose between doing the absolute best thing for you and doing something not as good for you but better for his or her paycheck. And having been in the business, I know plenty of consultants that chose the latter many times and rarely any at all that chose the latter infrequently.
Always remember Jim Cramer, someone that built an estimated fortune of $100 million by manipulating wealthy clients, stated, “What’s important when you are in hedge fund mode, is to not do anything remotely truthful, because the truth is so against your view.” And when you read Cramer’s statement again, know that this mentality predominates among almost all investment industry professionals, not just Jim Cramer.
Why To Avoid Debt Consolidation
Title:
Why To Avoid Debt Consolidation
Word Count:
504
Summary:
With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from...
Keywords:
Article Body:
With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from helping people to consolidate debt. But beware! Often opting for debt consolidation is not actually the best route to escaping debt or rebuilding your credit. In fact, there are many ways in which consolidating debt can hurt your credit record and put you further in debt.
Here are the risks that are involved in debt consolidation:
In many cases opting for debt consolidation is only slightly better than declaring bankruptcy (which, as we all know, is credit score suicide). In fact often the credit agencies will view consolidating debt as a chapter thirteen bankruptcy. This is because a chapter thirteen bankruptcy is classified as “realigning debt.” This is a huge black mark on your credit record and could affect future credit applications (like applying for a home loan).
Finding an honest debt consolidation company can be a long hard haul. Most debt consolidation companies that you will find on the internet are interested in only one thing: profit. Sure, they say that they care about consumers and repairing your credit rating, but then they turn around and smack a bunch of extra fees and a high interest rate on your account. The fees and high interest rate often mean that you will end up paying more to the debt consolidation company than you would by just paying off your debts individually.
Often consolidating debt involves doing something like taking out a second mortgage on your home or a home equity line of credit. Run away if this gets suggested to you. This won’t cure the debt problem. You still have to pay off the second mortgage of the credit line. And if you can’t, then that puts your home in danger of being repossessed. Losing your home is much more disastrous than taking a long time to pay off your debts.
Look, debt needs to be repaid. That is just the sad fact. There is no magical quick fix to get rid of it. The thing to keep in mind is that, as long as you are paying on your debt, then your credit should steadily improve over time. Also, a steady repayment history of debt looks far better on your credit report than a lot of “settled for less than amounts owed” showing up. That is what will happen if you go with a debt consolidation. Even though it is not fun, the best thing to do is get some credit counseling, talk to your debtors and work out a repayment plan.
Why To Avoid Debt Consolidation
Word Count:
504
Summary:
With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from...
Keywords:
Article Body:
With all of the ways to pile up debt is it any wonder that so many people are obsessed with credit and debt consolidation? After all, it doesn’t take very much time (or really even very much effort) to go from in the black to drowning in the red. There are student loans, credit card debt, medical bills, store accounts, utility bills, etc. It can be very overwhelming. This is where the debt consolidation comes in. There are all sorts of companies that are making a fortune from helping people to consolidate debt. But beware! Often opting for debt consolidation is not actually the best route to escaping debt or rebuilding your credit. In fact, there are many ways in which consolidating debt can hurt your credit record and put you further in debt.
Here are the risks that are involved in debt consolidation:
In many cases opting for debt consolidation is only slightly better than declaring bankruptcy (which, as we all know, is credit score suicide). In fact often the credit agencies will view consolidating debt as a chapter thirteen bankruptcy. This is because a chapter thirteen bankruptcy is classified as “realigning debt.” This is a huge black mark on your credit record and could affect future credit applications (like applying for a home loan).
Finding an honest debt consolidation company can be a long hard haul. Most debt consolidation companies that you will find on the internet are interested in only one thing: profit. Sure, they say that they care about consumers and repairing your credit rating, but then they turn around and smack a bunch of extra fees and a high interest rate on your account. The fees and high interest rate often mean that you will end up paying more to the debt consolidation company than you would by just paying off your debts individually.
Often consolidating debt involves doing something like taking out a second mortgage on your home or a home equity line of credit. Run away if this gets suggested to you. This won’t cure the debt problem. You still have to pay off the second mortgage of the credit line. And if you can’t, then that puts your home in danger of being repossessed. Losing your home is much more disastrous than taking a long time to pay off your debts.
Look, debt needs to be repaid. That is just the sad fact. There is no magical quick fix to get rid of it. The thing to keep in mind is that, as long as you are paying on your debt, then your credit should steadily improve over time. Also, a steady repayment history of debt looks far better on your credit report than a lot of “settled for less than amounts owed” showing up. That is what will happen if you go with a debt consolidation. Even though it is not fun, the best thing to do is get some credit counseling, talk to your debtors and work out a repayment plan.
Why To Consolidate Debt
Title:
Why To Consolidate Debt
Word Count:
526
Summary:
I know you’re looking at that plasma TV and thinking of buying yourself a nice early birthday present. You can just imagine it on that wall in your living room. In fact you’ve been saving a spot for it for a year now. But there’s really no way that you could afford such a thing. Unless…you do have that little piece of plastic in your pocket just screaming to be used.
Besides, this is the reason you have a card, in case of an emergency. And, that big empty space is an emerg...
Keywords:
debt, management,
Article Body:
I know you’re looking at that plasma TV and thinking of buying yourself a nice early birthday present. You can just imagine it on that wall in your living room. In fact you’ve been saving a spot for it for a year now. But there’s really no way that you could afford such a thing. Unless…you do have that little piece of plastic in your pocket just screaming to be used.
Besides, this is the reason you have a card, in case of an emergency. And, that big empty space is an emergency, it must be filled. Of course you’ll have a big fat balance on your statement that there’s no way you can pay, but what the heck. Only live once right?
Now Stop and Listen Carefully!
How silly do you sound when you begin thinking thoughts like these? This is what happens in millions of heads around the world daily, and this lack of debt management is hurting way too many people, so don’t get sucked into it too.
It’s crazy that we think that we can just buy something that we can never afford just because we can charge it. Tell me, what kind of debt management is that?
Well, if you need help with your credit cards and debt, don’t feel bad because you’re definitely not alone in this. In fact, I remember getting my first card, I got myself in the same situation, and this is after I told myself that I would never use the silly thing.
Well, except for emergencies that is.
Then came college, and everything seemed to be an emergency. I was on my own for the first time, and not wanting to bother my parents, and wanting to appear “responsible” I just kept on racking up the balance on the darn thing. Oh but that was okay I would convince myself, because soon enough I would graduate with my bachelors and laugh at
this debt I was racking up.
This may be how it ends up for some people, but for most, myself included the exact opposite is true. I actually come out the other end with a good career, but I didn’t consider how much actually living in the real world costs, and very soon my budget had met it’s match.
Now I had to find help with my debt.
The one thing I did that was quite smart was to transfer the debt to a lower interest card. It helped me a little, but it really was still hard keeping up.
I then began my search for a reliable company to help me consolidate debt even more. I searched online and found quite a few companies to help me. The one that I went with, actually helped cut some of my balances by up to 40%, and then got me on a plan with on low monthly payment that was easy to afford.
So, don’t be like me and get yourself into a mess. Start managing debt wisely early on, and you’ll avoid a rough ride that you don’t need.
Why To Consolidate Debt
Word Count:
526
Summary:
I know you’re looking at that plasma TV and thinking of buying yourself a nice early birthday present. You can just imagine it on that wall in your living room. In fact you’ve been saving a spot for it for a year now. But there’s really no way that you could afford such a thing. Unless…you do have that little piece of plastic in your pocket just screaming to be used.
Besides, this is the reason you have a card, in case of an emergency. And, that big empty space is an emerg...
Keywords:
debt, management,
Article Body:
I know you’re looking at that plasma TV and thinking of buying yourself a nice early birthday present. You can just imagine it on that wall in your living room. In fact you’ve been saving a spot for it for a year now. But there’s really no way that you could afford such a thing. Unless…you do have that little piece of plastic in your pocket just screaming to be used.
Besides, this is the reason you have a card, in case of an emergency. And, that big empty space is an emergency, it must be filled. Of course you’ll have a big fat balance on your statement that there’s no way you can pay, but what the heck. Only live once right?
Now Stop and Listen Carefully!
How silly do you sound when you begin thinking thoughts like these? This is what happens in millions of heads around the world daily, and this lack of debt management is hurting way too many people, so don’t get sucked into it too.
It’s crazy that we think that we can just buy something that we can never afford just because we can charge it. Tell me, what kind of debt management is that?
Well, if you need help with your credit cards and debt, don’t feel bad because you’re definitely not alone in this. In fact, I remember getting my first card, I got myself in the same situation, and this is after I told myself that I would never use the silly thing.
Well, except for emergencies that is.
Then came college, and everything seemed to be an emergency. I was on my own for the first time, and not wanting to bother my parents, and wanting to appear “responsible” I just kept on racking up the balance on the darn thing. Oh but that was okay I would convince myself, because soon enough I would graduate with my bachelors and laugh at
this debt I was racking up.
This may be how it ends up for some people, but for most, myself included the exact opposite is true. I actually come out the other end with a good career, but I didn’t consider how much actually living in the real world costs, and very soon my budget had met it’s match.
Now I had to find help with my debt.
The one thing I did that was quite smart was to transfer the debt to a lower interest card. It helped me a little, but it really was still hard keeping up.
I then began my search for a reliable company to help me consolidate debt even more. I searched online and found quite a few companies to help me. The one that I went with, actually helped cut some of my balances by up to 40%, and then got me on a plan with on low monthly payment that was easy to afford.
So, don’t be like me and get yourself into a mess. Start managing debt wisely early on, and you’ll avoid a rough ride that you don’t need.
Why Trade The U.S. Dollar?
Title:
Why Trade The U.S. Dollar?
Word Count:
451
Summary:
The Forex is an informal marketplace where investors from around the world come to exchange one currency for another. In truth, the investor is buying one currency while simultaneously selling another. Dozens of currencies are exchanged and all at varying rates that fluctuate constantly. There is the potential for unlimited profits for investors that can accurately predict which way the rates will fluctuate for a given period of time. Before an investor can realize any gains,...
Keywords:
forex, forex trading, forex market, stock trading, forex chart, forex options, forex rates
Article Body:
The Forex is an informal marketplace where investors from around the world come to exchange one currency for another. In truth, the investor is buying one currency while simultaneously selling another. Dozens of currencies are exchanged and all at varying rates that fluctuate constantly. There is the potential for unlimited profits for investors that can accurately predict which way the rates will fluctuate for a given period of time. Before an investor can realize any gains, they must first decide which currency pairs to invest their money.
To begin with, an investor does not necessarily lose money when the exchange rates are falling. Just as with equities, investors can profit on the Forex whether prices go up or down—so long as they predict correctly. In fact, the greater the fluctuation (regardless of direction), the greater the potential for profit. Now the Forex market as a whole is considered to be very volatile and very fluid meaning that prices fluctuate substantially but investors can buy and sell positions easily.
While the Forex market as a whole may be both volatile and liquid, this does not mean that all currency pairs are equal. Some currency pairs, for instance, are traded in such low volumes and are so consistent in their exchange rates that they are both unprofitable and hard to liquidate should problems arise.
The U.S. dollar backs or finances almost 90% of all transactions on the Forex. The daily volume alone creates the large moves investors like to see because they can capitalize and make large profits if they play the game correctly. Plus, the liquidity of the U.S. dollar allows investors to unload positions easily when they become unprofitable. For these reasons, investors are advised to stick with only currencies that trade with the dollar when investing in the Forex.
There are dozens of currencies that are exchanged with dollars but not all are as profitable as others. There are actually 7 other currencies that trade with the U.S. which account for the bulk of the transactions on the Forex and they include:
1. Euro (EUR)
2. British Pound (GBP)
3. Swiss Franc (CHF)
4. Canadian Dollar (CAN)
5. Australian Dollar (AUD)
6. New Zealand Dollar (NZD)
7. Japanese Yen (JPY)
The best currency pair will include the USD and the currency that produces the greatest price movement with least volatility. To determine this currency pair, an investor will need to use analysis (fundamental or technical) to identify the best opportunities along with entry and exit points. However, because of its volume and liquidity, it is best for investors to find currency pairs that include the USD as they have the greatest potential for profit and it is easy to enter and exit positions at will.
Why Trade The U.S. Dollar?
Word Count:
451
Summary:
The Forex is an informal marketplace where investors from around the world come to exchange one currency for another. In truth, the investor is buying one currency while simultaneously selling another. Dozens of currencies are exchanged and all at varying rates that fluctuate constantly. There is the potential for unlimited profits for investors that can accurately predict which way the rates will fluctuate for a given period of time. Before an investor can realize any gains,...
Keywords:
forex, forex trading, forex market, stock trading, forex chart, forex options, forex rates
Article Body:
The Forex is an informal marketplace where investors from around the world come to exchange one currency for another. In truth, the investor is buying one currency while simultaneously selling another. Dozens of currencies are exchanged and all at varying rates that fluctuate constantly. There is the potential for unlimited profits for investors that can accurately predict which way the rates will fluctuate for a given period of time. Before an investor can realize any gains, they must first decide which currency pairs to invest their money.
To begin with, an investor does not necessarily lose money when the exchange rates are falling. Just as with equities, investors can profit on the Forex whether prices go up or down—so long as they predict correctly. In fact, the greater the fluctuation (regardless of direction), the greater the potential for profit. Now the Forex market as a whole is considered to be very volatile and very fluid meaning that prices fluctuate substantially but investors can buy and sell positions easily.
While the Forex market as a whole may be both volatile and liquid, this does not mean that all currency pairs are equal. Some currency pairs, for instance, are traded in such low volumes and are so consistent in their exchange rates that they are both unprofitable and hard to liquidate should problems arise.
The U.S. dollar backs or finances almost 90% of all transactions on the Forex. The daily volume alone creates the large moves investors like to see because they can capitalize and make large profits if they play the game correctly. Plus, the liquidity of the U.S. dollar allows investors to unload positions easily when they become unprofitable. For these reasons, investors are advised to stick with only currencies that trade with the dollar when investing in the Forex.
There are dozens of currencies that are exchanged with dollars but not all are as profitable as others. There are actually 7 other currencies that trade with the U.S. which account for the bulk of the transactions on the Forex and they include:
1. Euro (EUR)
2. British Pound (GBP)
3. Swiss Franc (CHF)
4. Canadian Dollar (CAN)
5. Australian Dollar (AUD)
6. New Zealand Dollar (NZD)
7. Japanese Yen (JPY)
The best currency pair will include the USD and the currency that produces the greatest price movement with least volatility. To determine this currency pair, an investor will need to use analysis (fundamental or technical) to identify the best opportunities along with entry and exit points. However, because of its volume and liquidity, it is best for investors to find currency pairs that include the USD as they have the greatest potential for profit and it is easy to enter and exit positions at will.
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