By Dale Gillham
Investing in the stock market is one of the most powerful strategies you can use to accelerate your wealth. Although, in my experience, a common theme among those who do invest is a firmly held belief that all they need to be successful is a superb set of trading rules.
If fact, ask anyone who trades the stock market if they know how to buy a stock and, chances are, 100 percent will say yes. Ask those same people if they know the right time to sell a stock, and 90 percent will say either no or that they get it wrong most of the time. Unfortunately, the reality is that most are focused on achieving quick returns rather than developing the strategies that will enable them to build long-term wealth.
In my book, one of the key criteria of astute investing is to consider when and how you will take your profits—in other words, you need to consider your exit strategy before you invest. Because trading is not about how much money you can make; it is about how much you do not lose over time.
Given the recent speculation of late that the stock market is likely to crash, there is no better time to learn how to protect your capital. Although, let me say while I believe the market is due for a correction, I do not believe it will crash. That said, irrespective of the direction of the market, it is important to always use sound money management strategies, so in this article I will share with you some simple but powerful strategies you can start using straight away.
Don’t buy stocks that are falling in value
In my experience, I find that when a market is falling, most investor’s make errors in judgement that result in costly mistakes.
As the price of a stock falls, its dividend yield rises and, therefore, becomes more attractive to investors seeking dividends for income or for those who may be seeking a bargain. Some would have you believe that a high dividend yield means the stock is inexpensive and, therefore, an opportunity for investors to achieve good capital gains. But what this really means is that the stock has fallen to such an extent that the dividend yield is now much more attractive.
Investors, in general, don’t want high-risk investments, yet, this is exactly what they get when they buy a stock that is falling in price just to receive a high dividend yield or because they perceive the stock price as being cheap.
To be considered a solid investment, the stock must represent good value, first and foremost, in terms of capital gains. In other words, you should look for undervalued stocks that are likely to achieve solid growth in terms of capital gains and a good income in the future.
Have an exit strategy
As I mentioned earlier, one of the most important aspects when trading the stock market is to have an exit strategy in the event you are wrong and the stock price moves against you or to protect profits. The fact is, if you want to be consistently profitable, you need to know not only how and why you are entering a trade, but more importantly, when and where you will exit.
Most investors never give this any consideration because when they invest, they expect the asset to rise. And while the asset may indeed rise, the value of the asset is not realized until you sell. Consequently, this equates to unrealized profits, as the asset could fall in value, which has the potential to impact your overall returns.
Apply your exit rules
In my book, Accelerate Your Wealth, I outline a number of strategies you can use to protect your capital. The simplest and safest is to apply a stop loss before you enter a trade. Astop loss is simply a price point to exit a trade in order to protect your capital. Depending on the volatility of the stock, I always recommend setting a stop loss of between 10 and 15 percent below your buy price or from its most recent high.
In reality, when it comes to trading and protecting your capital, a stop loss is your best course of action, as it will minimize your losses and has the potential to maximize your profits. Indeed, the better you get at selling, the more money you will make.
“Trading for profit is about using sound money management rules and good exit strategies”.
Another strategy you can use is to apply trend lines. Trend lines are one of the oldest and most effective methods for deciding which stocks to buy and sell, yet, they are one of the most underutilized tools. Why? The answer is simply lack of knowledge—many investors do not understand how a trend forms or how it unfolds over time.
There is an old saying that you should always trade with the trend. Indeed, if you can correctly ascertain the direction of the longer-term trend, either bull or bear, you can pinpoint, with great certainty, the right time to buy and sell, which means you will be far more profitable. That said, while it is important to always trade with the trend, if you were to always wait for the long-term trend to confirm, many low risk trades would be missed. And that is why trend lines are so effective.
In theory, applying trend lines is very simple—buy when a stock crosses above a downtrend line and sell when it crosses below an uptrend line, which can be done, quite simply, by applying a pencil and ruler to a bar chart. The major advantage of using trend lines is that they indicate when a trend may be changing before confirmation of the actual change in trend is evident.
The advantage of applying trend lines is that you will enter a stock in the early stage of an impending uptrend, but more importantly exit a stock at the early stage of a downtrend starting and in so doing protect your wealth.
Don’t exit too early
Another common theme that is prevalent among traders and investors, particularly those new to the stock market, is that they exit profitable trades too early for fear of losing their profit.In fact, you may be surprised to learn that a lot of investors tend to sell winning stocks only to buy losers, even though the winning investments they sell subsequently outperform the losers they continue to buy.
The investor rationale for such action is driven by the fear of taking additional risks with stocks in which they have already made money. Unwitting investors believe that their winners, having already risen, are now more likely to fall.
But trading the stock market for profit is about cutting your losses and letting your profits run.
Therefore, unless a stock tells you to sell by triggering one of your exit signals, do not sell.
I promise you, if you follow your rules, you won’t fall into the trap of becoming an average investor, which means you will be far more profitable and successful in the long run.
Don’t exit too late or worse not at all
When a market is perceived as bearish, this does not mean that you can’t make money, because even in bear markets you will find stocks that are rising. The inverse is also true in a bull market, as some stocks will be falling in price. That said, when a market correction occurs, many investors let market sentiment influence their decision making and,as such,exit stocks far too late as they perceive that the bull run will go on forever. In reality, investors hang onto their shares that are falling in value in the hope that the stock will return to its previous highs.
However, you need to be aware that if a stock falls by 10 percent, your remaining capital needs to rise by 11 percent to break even. And if you continue to hold and suffer a 50 percent loss, then your remaining capital needs to rise by 100 percent just to break even. The longer you continue to hold onto stocks that are falling in value not only increases the overall risk to your portfolio but the harder it is to get back on top again.
But if you apply the exit strategies discussed earlier and wait for the dust to settle, you will not only be protecting your capital, you will have the added benefit of being able to compound more ofit. In reality, taking small losses is far better for generating good portfolio returns and protecting your wealth, and more importantly, sleeping well at night.
Be proactive in managing your portfolio
If you take a more proactive approach in managing your portfolio, you will be more profitable and endure less stress. In my book, an active investor is someone who dedicates a few hours a month to managing their portfolio and they typically, turn over, on average, twenty to thirty per cent of the stocks within their portfolio in a year, although this will depend on market conditions. They also implement some simple well-defined rules that eliminate the uncertainty and fear that the majority tend to operate under when buying and selling stocks.
If you decide to become more active, I recommend developing a portfolio of between 8 and 12 stocks from the top 20 by market capitalisation, although, depending on your level of knowledge, you may want to consider stocks out to the top 50. What you will come to discover, as I outline in my book, is that smaller portfolios with holdings concentrated in solid blue chip stocks represent lower risks, as you will have less stocks to manage and it will deliver more profitable results.
So, if I were to ask if you want to accelerate your wealth with less risk and less stress, would you choose this option over making less money and having more stress. I know which option I would choose. Remember, it’s your money, your choice.
Good luck and good trading!
Dale Gillham is Chief Analyst at Wealth Within and international best-selling author of How to Beat the Managed Funds by 20%. He is also author of Accelerate Your Wealth: It’s Your Money, Your Choice, which is available in book stores and online at www.wealthwithin.us.
How You Can Make Money From Home
There is no secret to making money online, the only secret is your persistence. Hidden away between the tips on starting a wine club, taking up a photography club or joining the wine revolution, there are smart tips that anyone could use to earn money online without having to quit their day job. We have written lots about the many ways people abroad to help finance their lives.
A good place to start with online jobs is with paid surveys. Surveys pay for your time and allow you to earn a bit of extra cash. The reason you will be able to earn more than what you are actually worth is that a survey company will pay to send you their questionnaire so that you can answer it. The more accurate and detailed your answers the more likely you are to get paid.
There are many survey companies available, you need to choose wisely and carefully as some surveys are paid better than others. For example, you may get paid well if you give an opinion on the health of wine or food. You may get paid just as well if you offer an opinion on which type of music you like.
Another great way to make money online is to write articles. You could write an article and then sell it to an affiliate. If someone likes what they read you will get a commission.
If you are unable to write or if you do not have the time, you could hire someone to write for you. This could be someone who has experience in web content writing or a freelance writer. You could also sell your own articles on an affiliate website such as Clickbank or Commission Junction.
It is easy to make money, it can take some time but it is definitely possible. All you need is determination and discipline to keep at it.
Many people overseas have chosen to live off the grid lifestyle. There are many benefits to living this way and one of them is being able to make money from home.
There are also a lot of opportunities to make money doing research online, there is a constant increase in the amount of knowledge that is available to the public. It is much easier to research and discover new ways of earning money. and you can get started in a short space of time. So, I encourage you to give it a go.
One of the easiest ways to make money online is by becoming a blogger. It really is very easy to become a blogger. Just type ‘blogging’ into Google and then fill in all the details. It is easy and it can even start to look lucrative.
Blogging is a good way to earn money if you have an understanding of the basics. You need to write about something that interests you. This could be about your family life, your interests or even a hobby that you like.
Once you have set up a good website for your blog, the next step is to get visitors to it. One way of doing this is by putting up advertisements. This is just the same as writing articles for other websites.
Some people choose to make money by selling products. You can do this in two ways, through a site such as eBay or through affiliate marketing. You could sell e-books or products related to the niche you are blogging about. The great thing about eBay is that there is always a steady flow of visitors.
These two ways are only two of the many ways to make money online. I recommend you look at all the options and find the ones that work best for you. Once you have found them, you will never stop learning about ways to make money online.
How To Avoid the Risks of Poor Credit
Security Finance is an unsecured debt collecting agency that, via a network of affiliated companies, provides “secure” personal loans to consumers who may otherwise struggle to meet their existing debts. Their loans are generally short-term, and their conditions often vary dramatically from those of traditional short term personal loans. The services they provide can be invaluable to both the consumer and the lender.
Security finance offers a wide variety of loans. These include: home equity loans, revolving credit lines, commercial and business loans, car and motorcycle loans, and other types of unsecured loans. These loans can be used for almost any purpose, and they will be more beneficial to the consumer than those offered by banks and other unsecured lenders.
Secured personal loans offer an excellent alternative to the high rate of interest paid by unsecured loans. The interest rates are often less, the terms are easier to meet, and they are often better suited to meeting a consumer’s unique financial situation. The collateral provided with the loan usually allows security that the loan will be repaid in a reasonable amount of time, with little or no difficulty.
Secured loans require the debtor to place collateral, such as his or her car, home, or other valuable asset, in order to receive the money they have been borrowing, and are therefore considered by the debt collector as an attempt to recover something that has been taken. Debt collectors will not hesitate to call a borrower who does not follow the terms of his or her loan agreement and in some cases will go as far as harassing them, calling and/or sending letters in an attempt to collect on a debt.
When applying for a secured personal loan, many borrowers are worried that the debt will affect their credit score. The fact is that there is virtually no correlation between the amount of credit available and the credit score. However, secured loans will typically have a much lower credit score than unsecured loans. This is because the borrower is putting his or her assets in a bank account where they are likely to be liquidated for payment.
It is important to remember that the loan does not negatively affect the credit history. The only time it can result in damage to a credit report is if it is reported incorrectly. If a borrower were to try to pay off a loan on a credit card that was reported as being “lost”, he or she would then be making the error a second time.
Security finance offers consumers an exceptional opportunity for personal development through the use of online applications, and the ability to make several payments on the same day to avoid late fees and penalties. This service also makes it easy to avoid late fees when paying loans off at the end of the month.
The ability to apply for secured loans online provides a tremendous opportunity for the consumer to improve his or her credit score. Security loans can provide a large number of benefits to people who are in financial difficulty, including: low cost, low rate loans, low credit, and the flexibility of being able to make multiple payments.
If you are considering applying for a secured loan but have never applied online, you should take advantage of the opportunity to make several purchases in a short period of time, rather than waiting until the last minute to apply for an unsecured loan. By using the secured finance website, you can save yourself the time and stress associated with filling out an application and can ensure that your credit report shows your financial progress accurately.
Once you have applied for a secured loan, you should also make sure that you understand the terms and conditions of your loan, including any interest rate that may apply to the loan. Be sure that you understand the term of the loan in full and fully. Do not hesitate to ask any questions that may arise. You should always contact the company directly when you feel that you are not fully clear on a matter regarding a loan.
Secured finance loans are a great way to increase your credit score while avoiding the hassle and expense of filling out and paying off an application by mail. Because the borrower is making a direct deposit of money into an account, the credit report that shows up on credit reports is often inaccurate.
How To Find Free Rates On Money Exchange
Money is a common item that can be bought, traded, exchanged or sold. This usually includes the value of the currency as well as gold and silver. Money is commonly accepted as payment of certain obligations, including taxes, and payment of certain goods and services in a specific country or socioeconomic context.
There are three money systems in the world. The first is the use of coins or other units of currency, which are available in fixed denominations. The second is barter. It involves exchanging items of utility with other items of utility. In the third system, known as fiat money, there is no central authority that decides what the money supply is, and the monetary base is determined by political will.
The most common monetary system is the gold standard, which was used as far back as ancient Greece and Rome. In this system, coins were designed to be redeemable for gold bars. Gold, however, had a relatively high price at the time, and most individuals had no access to it. Barter is much more popular today, and most people live their lives in barter, trading items with one another.
In some nations, the second money system is called paper money. Most countries have national currencies, and each government issues money in the name of their country. This type of money is not backed by anything of physical value. It is not held by the government or bank. It is simply made from paper. Since most countries use this kind of money, it is known as the official “money” of the country.
Electronic cash was introduced in 1970. This system is very similar to barter. Instead of bartering for items, electronic money is created electronically. It is created electronically to represent actual objects that can be used as payment, and then is transferred to the buyer. The process is very similar to barter, except that there are no actual goods to be bartered for. It is considered a virtual currency.
There are many different types of money, and each one has its own characteristics. Money in the U.S. has a backing and is created by the federal reserve. Money in England is backed by the pound sterling, while the European Central Bank in Germany uses the euro. has a currency known as the Deutschmark.
Each form of money has its own advantages and disadvantages. People who use different forms of money have their own reasons for doing so. Many people choose to exchange one form of money for the other, to get the best rate on an item they need or want. Some choose the same form of money for more than one transaction.
Money exchange services offer different services to help people get the best rates on money exchange. They include a variety of methods that can help someone get a better rate. Rates vary depending on the length of time you wish to get money, the size of your order, and the current value of the item you are exchanging. Some of these services can also provide you with a credit card or other form of online payment to transfer your money through.
These services are available almost everywhere. You may call around to various companies for rates, or you can check out the Internet. There are several places on the Web that will give you free quotes, and compare rates among companies. It is important that you understand the rules and regulations that govern the rates you receive from these companies before you agree to any deal.
There are several different online providers. You will often find them listed under the names of a variety of different names, such as Money Exchange, Moneygram and eCash. If you are interested in getting quotes from multiple companies, make sure to ask around for quotes from at least three. so that you have a clear picture of how much the rates will vary and from which company to go with.
Many places will offer you a variety of free quotes if you fill out a form. Others will charge a fee for this service. To get an estimate, you should send out several free quotes. and then make sure to follow up with the companies.
To be able to get the best rates, it is very important that you get as many quotes as possible from different companies on the Internet. There are many sites that you can go to. Some will charge a fee to get these quotes.
The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform
By Nigel Bridges, founding CEO of Beaconsoft Limited What were you doing prior to setting up Beaconsoft? Before setting up...
Top 8 Tax Scams to Watch Out For
It is tax time and that means finding the best way to file your taxes and to get a refund...
Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®
Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the...
Euro zone business activity shrank in January as lockdowns hit services
By Jonathan Cable LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to...
Volkswagen’s profit halves, but deliveries recovering
BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car...
Global chip shortage hits China’s bitcoin mining sector
By Samuel Shen and Alun John SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines...
Iran’s oil exports rise ‘significantly’ despite sanctions, minister says
DUBAI/LONDON (Reuters) – Iran’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers...
Nissan to source more UK batteries as part of Brexit deal ‘opportunity’
By Costas Pitas LONDON (Reuters) – Nissan will source more batteries from Britain to avoid tariffs on electric cars after...
Muted recovery for UK retailers in December ends worst year on record
By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...
Chinese phone maker Honor partners with key chip suppliers after Huawei split
By David Kirton SHENZHEN, China (Reuters) – Chinese budget phone maker Honor said on Friday it had signed partnerships with...