Over the past few years, growing economic turmoil across the world has compelled many individuals to reconsider their options when it comes to retirement planning. The earning class is constantly in search of options that not only enable us to secure our hard-earned money but also multiply the same for a good living, as not everyone is born with a silver spoon in their mouth.
Consider this. Do you make shopping lists before going to the supermarket? What about wish-lists for products you want but cannot afford at that exact moment? This is exactly the essence of financial planning – determining what you need and afford at a certain time and finding the most convenient way and time to purchase those items. Hence an efficient financial planning will allow you to find out the most convenient way and the right time to make acquisitions without ending with a big hole in your budget.
We can find different companies showing us ways to do so. Not that these companies are set up recently, but are present in the financial market for quite some time now.
Financial instruments come in all shapes and sizes and choosing the right place to entrust your money can be a mystifying task. However, with a little knowledge, anyone can become an investor and many individuals are turning towards fixed rate bonds as their preferred option when browsing high interest savings. Now the question is how and where can you invest this money? Well, there are many options/or safe havens one can find. There is an abundance of qualified financial planners/ firms in the market who can suggest you suitable ways to help you identify products which turn out to be a real cash cow for you in the long run.
There are ways of investment that may be risky (esp. stocks/shares/mutual funds) or non-risky stuffs- which is to safeguard oneself from huge financial sufferings.
As far as the risk factor is concerned (trading into stocks/shares), there are firms which promises to help manage the your(trader) portfolio while paying personal attention to the shares you buy, albeit suggest you the profitable shares to be bought by paying the required amount of commission for their services.
But the invention of internet has brought about many changes in the way we conduct our lives and our personal business. Since the invention of internet people have been able to do practically everything virtually. We can pay our bills online, shop online, bank online, and even date online!
Erstwhile era of trading involved cries across the floor of stock exchange to trade in paper shares. Thanks to modern advancements in mobile technology, Smartphone users can tap into a variety of mobile applications related to business news, industry information and financial market updates. Mobile trading applications have changed the way people think about trading and have empowered and encouraged more individuals to invest in the stock market.
Even the brokers have incorporated this technology to attract more clients and create more knowledge while trading. Most brokers and brokerage houses now offer online trading to their clients. Interestingly, online trading activity costs less, so that the client does not feel the pinch. Gone are the days when clients had to worry about the woes of losing the paper shares accidentally. Online trading, also known as direct access trading (DAT), has given anyone who has a computer, enough money to open an account and a reasonably good financial history, the ability to invest in the stock market. You don’t have to have a personal broker or a disposable fortune to do it, and most analysts agree that average people trading stock is no longer a sign of impending doom.
Now the trading in paper shares is replaced with Demat trading. Demat trading means the shares are held in electronic form with depositories. Demat trading is a prelude to online trading. Dematerialization of all shares has provided a platform for online trading and today online trading has spread its wings to futures /derivatives trading in stock market, investment in mutual funds, post office schemes, insurance applying for initial public offer (IPOs)and commodity trading.
Other advantages of Online trading includes:
- Fully automated trading process which is broker independent
- Informed decision making and access to advanced trading tools
- Traders/investors having direct control over their trading portfolio
- Traders’ ability to trade multiple markets and/or products
- Real time market data
- Faster trade execution
- Discount commission rates
- Low capital requirements
- High leverage offered by brokers for trading on margin
- Easy to open and manage account
- No geographical limits
But the question arises that “is online trading the safer alternative to regular paper-share trading?” Analysts seem to differ to this opinion. There are certain drawbacks to this mechanism as well.
- Need to activate speedy internet connection
- Online frauds by hackers.
- Non maintenance of secrecy for password by user leading to misuse.
- The requirement to fulfil specific activity and account minimum as demanded by the broker
- Greater risk if trades done extensively on margin
- Monthly software usage fees
- Chances of trading loss due to mechanical/platform failures
- Online traders are solely responsible for their trading decisions & cannot expect any personal assistance in the due course of online trading.
- The fee involved in trading varies considerably with broker, market, ECN and type of trading account and software.
- Some online brokers may also charge inactivity fees on traders.
For a newbie in stock trading, it is advisable to hire traditional brokers who can not only assist you with the right selection of stocks, but also listens to your requirements, answers your questions for a better understanding of the financial market.
Again, online trading is a beautiful thing which is easily accessible – but it isn’t for everyone. So, think carefully before you decide to do your trading online, and make sure that you really know what you are doing.
Dollar extends decline as risk appetite favors equities
By Stephen Culp
NEW YORK (Reuters) – The dollar lost ground on Friday, extending Thursday’s decline as improved risk appetite attracted buyers to equities and away from the safe-haven greenback.
The U.S. dollar has been weighed down by a string of soft labor market data, even as President Joe Biden’s proposed $1.9 trillion spending package takes shape.
“What the foreign exchange market is looking at in the short term, is the dollar is going to be weak despite progress in the economy because this country has a huge deficit problem,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “The dollar index could easily test the lows of last September.”
Also weighing on the dollar, the real yield gap between the United States and Germany is at its tightest since March, analysts said, despite the recent rise in U.S. Treasury yields.
Bitcoin continues to hover at record highs, and the world’s largest cryptocurrency was last up 2.6% at $52,931.46, nearing $1 trillion in market capitalization.
Its smaller rival, ethereum, was last down 1.0% at $1,920.13.
The digital currencies have gained about 82% and 1,400%, respectively, year to date, leading some analysts to warn of a speculative bubble.
“There may be a place for (cryptocurrencies) somewhere down the road, but the theories that cryptos will replace paper currency are far-fetched,” Cardillo added. “It’s total speculation at this point and people are going to pay the price.”
The Australian dollar, which is closely linked to commodity prices and the outlook for global growth, was last up 1.15% at $0.7858, touching its highest since March 2018.
The New Zealand dollar also gained, closing in on a more than two-year high, and the Canadian dollar advanced as well.
Sterling rose to an almost three-year high amid Britain’s aggressive vaccination programme. It had last gained 0.34% to $1.40.
The euro showed little reaction to a slowdown in factory activity indicated by purchasing manager index data, rising 0.29% to $1.2126.
The yen, gained ground against the dollar and was last at 105.495, creeping above its 200-day moving average for the first time in three days.
(Reporting by Stephen Culp, additonal reporting by Tommy Wilkes; editing by Emelia Sithole-Matarise)
Bitcoin hits $1 trillion market cap, soars to another record high
By Gertrude Chavez-Dreyfuss and Tom Wilson
NEW YORK/LONDON (Reuters) – Bitcoin touched a market capitalization of $1 trillion as it hit yet another record high on Friday, countering analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices.
The world’s most popular cryptocurrency jumped to an all-time high above $54,000, setting it on course for a weekly jump of more than 11%. It has surged roughly 64% so far this month and was last up 5.5% at $54,405.
Bitcoin’s gains have been fueled by signs it is gaining acceptance among mainstream investors and companies, from Tesla and Mastercard to BNY Mellon.
All digital coins combined have a market cap of around $1.7 trillion.
“If you really believe there’s a store of value in bitcoin, then there’s still a lot of upside,” said John Wu, president of AVA Labs, an open-source platform for creating financial applications using blockchain technology.
“If you look at gold, it has a market cap $9 or $10 trillion. Even if bitcoin gets to half of gold’s market cap, that still growth of 4X, or $200,000. So I don’t know when it stops rising,” he added.
Still, many analysts and investors remain skeptical of the patchily regulated and highly volatile digital asset, which is little used for commerce.
Analysts at JP Morgan said bitcoin’s current prices were well above estimates of fair value. Mainstream adoption increases bitcoin’s correlation with cyclical assets, which rise and fall with economic changes, in turn reducing benefits of diversifying into crypto, the investment bank said in a memo.
“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” JP Morgan said.
Bitcoin is an “economic side show,” it added, calling innovation in financial technology and the growth of digital platforms into credit and payments “the real financial transformational story of the COVID-19 era.”
Other investors this week said bitcoin’s volatility presents a hurdle for it to become a widespread means of payment.
On Thursday, Tesla boss Elon Musk – whose tweets have fueled bitcoin’s rally – said owning the digital coin was only a little better than holding cash. He also defended Tesla’s recent purchase of $1.5 billion of bitcoin, which ignited mainstream interest in the digital currency.
Bitcoin proponents argue the cryptocurrency is “digital gold” that can hedge against the risk of inflation sparked by massive central bank and government stimulus packages designed to counter COVID-19.
Yet bitcoin would need to rise to $146,000 in the long-term for its market cap to equal the total private-sector investment in gold via exchange-traded funds or bars and coins, according to JP Morgan.
Rival cryptocurrency ether traded down 0.3%, at $1,934.67, still near a record of $1,951 reached earlier on Friday. It has been lifted by growing institutional interest, after its futures were launched on the Chicago Mercantile Exchange.
(Reporting by Gertrude Chavez-Dreyfuss in New York and Tom Wilson in London; Editing by Dan Grebler)
UK retail sales drop, NatWest loss dampen FTSE 100 mood
By Shivani Kumaresan and Amal S
(Reuters) – The FTSE 100 was muted on Friday as a bigger-than-expected drop in January retail sales underscored the business damage from a prolonged nationwide lockdown, while NatWest group fell after swinging to an annual loss.
The commodity-heavy FTSE 100 was flat as gains in miners Anglo American, Rio Tinto and BHP Group capped losses.
Oil producers BP and Royal Dutch Shell fell 1.2% and 0.5%, respectively as crude prices slid.
Data on Friday showed British retail sales tumbled much more than expected in January as non-essential shops went back into coronavirus lockdowns. Flash readings of business activity data, due at 0930 GMT, are likely to show the services sector struggling to return to growth in February.
“The 8.2% fall was considerably higher than we’d expected (around 4%), and provides clear evidence the hit to consumer spending is noticeably larger than it was during the November restrictions,” said James Smith, market economist at ING.
He added focus will now be on UK’s COVID-19 vaccination program and easing of restrictions, to drive economic recovery.
The FTSE 100 has recovered nearly 35% from its March 2020 lows but has been largely range-bound since the beginning of this year as a nationwide lockdown hurt business activity, undermining hopes of economic growth in the second half of the year.
The domestically-focused mid-cap FTSE 250 index rose 0.2%, with consumer and industrials stocks leading gains.
NatWest fell 0.6% after the financial services provider swung to a full-year loss for 2020 after COVID-19 lockdowns crunched household spending.
Segro Plc rose 1.7% after the real estate investment trust reported a near 11% jump in annual profit for 2020.
Banking group TBC Bank fell 2.3% after a slump in annual underlying profit due to lower interest rates and limited lending growth in the fourth quarter from the COVID-19 pandemic.
(Reporting by Shivani Kumaresan and Amal S in Bengaluru; Editing by Vinay Dwivedi and Krishna Chandra Eluri)
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Dollar extends decline as risk appetite favors equities
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Bitcoin hits $1 trillion market cap, soars to another record high
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