Money Vs. Stock: Which Is Best To Invest?

Investment has always been a troubling area. It’s incredibly hard to make sure that you’re putting your money into the right places to make sure that it grows enough. There are loads of options out there, which just makes it all even more confusing. So, to simplify things, this post is going to focus on two types of trading for investment; stocks and forex. These two trades are very similar. And, currency can even be looked at as a type of stock. But, they have some very different qualities that are worth considering.

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A lot of people think stocks are the only way to properly invest your money. And, it’s easy to see why. When you buy materials and goods in bulk to sell, you can make some real money. But, these sorts of transactions are also risky. It can be very hard to evaluate market trends; and that’s exactly what you have to do. With this sort of investment, you’ll make the most money if you predict the market well. You need to be buying stocks are their lowest possible price. And, then selling them when they’re at their most expensive. This will give you a good return on any stock. But, most people can’t do this on their own for the first few times. Instead, it’s better to get help from a professional. Failing that, you can also look into using a mobile app to help you.

Forex stands for foreign exchange and is the trade of currencies from around the globe. You can make money with forex trading much in the same way that you make money through stocks. You buy a currency using another currency. And, when the prices of the currency that you bought go up, you sell them back to get your own currency. With this sort of method, you have a couple of backdoors. Even if the currency you want doesn’t change in the way that you want it to; there are still loads of other currencies out there. You also have the chance to predict swings in currency values. For example, when the UK decided to leave the EU, the British Pound lost a significant amount of value.

When it comes to investment, there are no easy answers. So, it’s hard to say whether or not one of these methods is better than the other. Forex offers more security. But, it won’t give you the same potential return as stocks. And, stocks can make you a lot of money. But, you could lose it all if you don’t make the right choices. Ideally, when you first start with something like this, you’ll have a professional investor by your side to help you. This will make it easier for you to focus on learning, while they make most of the decisions for you.

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Hopefully, this will inspire you to start looking at different ways to invest. Some methods can be incredibly fun. And, some can be very stressful. With any investment, though, you’ll only get out of it what you put in. So, it’s important to do plenty of research before you start out with something like this.

8 Millionaires That Made Their Money In The Stock Market

We all love the story of the dirt-poor person overcoming past adversity and rising up to make the big bucks, triumphing over society and all its ills. While today’s millionaires and billionaires do not all share such a romantic background, many have preserved and worked hard to get to where they are today.

So whether you’re just trying to save a few extra dollars or looking to make a sizeable investment in the stock market, take a look at the lives of these eight millionaires who’ve made their money in the stock market:

Benjamin Graham (1894-1976)

He’s been cited as the influencer of Warren Buffet, Irving Kahn, and David Dodd, among others. British-born American professional investor Benjamin Graham is considered as the father of value investing, an investment approach where, in simplistic terms, one buys securities that appear underpriced. Graham taught this approach at Columbia Business School and in his book with Dodd, Security Analysis (1934). His legacy is profound, to say the least.

Philip Fisher (1907-2004)

Philip Fisher is for many considered the father of investing in growth stocks. In 1931 at the age of 24, he started his own investment firm, Fisher & Company. Fisher managed this firm for nearly seven decades, retiring in 1999 at the ripe old age of 91. Most famously, Fisher bought Motorola stock in 1955 and held it until his death in 2004. His legacy also continues through his book Common Stocks and Uncommon Profits (1958).

Muriel “Mickie” Siebert (1928-2013)

Mickie Siebert holds a number of incredible records. The ‘First Woman of Finance’ was the first woman to own a seat on the New York Stock Exchange (NYSE) and the first woman to head one of its member firms. When she began working, investment firms did not hire women beyond the role of secretaries. Despite this, Siebert obtained entry-level positions and eventually founded brokerage firm Muriel Siebert & Co, getting it registered on the NYSE after numerous rejections.

John “Jack” Bogle (1929-present)

Most well known for his bestselling book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (1999), businessman Jack Bogle began his mutual fund company The Vanguard Group after being fired from his job at the Wellington Management Company. Today, Vanguard Group manages approximately $2.0 trillion in assets and much of its success can be attributed to Bogle’s leadership.

Warren Buffet (1930-present)

American business magnate, investor, and CEO of Berkshire Hathaway Warren Buffet began investing in 1954 with just over $100. Today, he is worth over $20 billion and consistently named one of the wealthiest and most influential people in the world. Called the “Wizard of Omaha”, Buffet has accumulated his wealth primarily from investments in media, insurance, and consumer companies.

George Soros (1930-present)

It seems that 1930 was a good year to be born in. Known as “The Man Who Broke the Bank of England”, Hungarian-American business magnate George Soros has made a profound mark on the investment world, risking $10 billion on a single trade when he shorted the British Pound in 1992. Unlike many other top investors, he does not possess a clearly defined strategy, instead choosing to go with his gut feeling. If it works for him, then great!

Peter Lynch (1944-present)

American businessman and stock investor Peter Lynch has a reputation as being one of the world’s best fund managers, thanks to his management of the Fidelity Magellan Fund for over 13 years. Under his guidance and leadership, assets under management have grown from $20 million to over $14 billion along with an average annual return of 29%. Impressive, to say the least!

Mary Meeker (1959-present)

Mary Meeker is an American venture capitalist and former Wall Street securities analyst who specialises in the Internet and new technologies. A partner at Kleiner Perkin Caufield & Byer, Meeker has been called an internet oracle thanks in part to her piece “The Internet Report” that she wrote for Morgan Stanley in 1995. Since then, Meeker has been involved in many of the big investments and acquisitions of recent times, as well as investing in new investments such as Spotify and Groupon.

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Amelia Harris is a university student and freelance writer who is interested in personal finance and smart choices. She’s recently been learning about stock analysis in her free time – it’s fun, honestly!

Things You Should Know About Forex Trading

Forex account Both veteran and novice traders of the stock market find that trading in foreign currency exchange, commonly referred to as Forex, is really attractive. The basic difference between stock market and Forex market is that one can trade in the latter market at any time of the day as it remains open 24×7. And this is what allures new traders; they can maintain their regular job while practicing trading.

If you’re interested in Forex trading, you should know basic things related to it before you kick in and here they are.

  • Capital – This is perhaps the most important and imperative requirement for trading in the Forex market. Unless you have adequate amount of capital to invest and make the trades, you can’t expect significant profit. You should have enough money to trade currencies, i.e., to buy and sell currencies. The amount, however, depends on your personal ability and your chosen type of Forex account. In the U.S., the traders are allowed to make purchase of up to 50 times of the amount of money they have cash in their trading account. And this is what referred to as leverage in the trading industry. For example, if you want to make a purchase of 100,000 dollar worth of your currency, you just need to keep 2,000 dollar in your account. Some brokerage firms offer the facility of ‘micro’ accounts in which you can keep as little as only 50 dollar and buy 2,500 dollar of currency.
  • Trading platform – You can’t place a trade or a bid without electronic access to your broker. So you must have a PC or laptop with Internet connection. The entire industry is operated electronically and almost all brokerage firms are specialized in creating their own software to execute trading orders placed by the customers. You may try different programs offered by different brokerage company for free of cost by simply opening an online demo account. They would help you know the major features of their trading software and help you find an interface which suits you the best.
  • Trading price charts – Like other traders, you can also rely on the price charts while making any trading decision. The Forex industry is highly chart-driven as the fundamental and economic data are not so easy to access and to understand especially when it comes to trading currencies. However, it doesn’t happen with stock trading. Companies issue quarterly income reports on the health of the business and this has major impact on stock prices. A similar means of updated information on any particular currency is not available and thus the Forex traders depend on the charts to find clues on potential value of the currency. Therefore, accessing the charts is the fundamental requirement of Forex trading.
  • Considerations – Many individuals who have opened a Forex account recently have a notion that if they have the right instruments and money in pocket, then they can easily trade in Forex market and make significant profit. However, in reality, the market is extremely volatile and because of high leverage facility, it is considered as one of the riskiest trading platform. So, being a new trader, you must spend some time on practicing the strategies with very little to no money involved. Major brokerage firms of the country provide the new customers with the facility of simulation accounts so that they can trade with virtual money. You should take advantage of it to practice and enhance your trading skill beforehand, and start trading just like an efficient Forex trader.

Discussed above are some of the very important factors that you must take care of while trading in the Forex.

Plan for Losses: The Key to Sound Trading

Plan for Losses: The Key to Sound Trading

Risk lies at the very core of trading. Without risk profit would not be possible. On the flip side of the coin, because of that risk there is the danger of big losses befalling you. However, as necessary as taking risks is if you’re to turn a profit, by using stop losses intelligently, you can protect yourself from the nasty surprises that compromise an unavoidable part of trading.

Indeed, employing stop loss orders properly is a function of having the right mental attitude to be a successful trader; knowing that you cannot and will not win every time. Putting on a seatbelt when you step into a car isn’t something you do because you are expecting to crash, or because you doubt your own abilities as a driver. You do it (aside from the fact that it’s illegal not to) because you are acknowledging that out there on the roads there are forces which are simply beyond your control.

Give Yourself a Safety Net

By using stop loss orders cautiously and tightening them when things look uncertain you can make sure your losses are minimised. Furthermore by using a stop loss order, ahead of time you reduce the chances that you will succumb to the trader’s great enemy; hope. Whilst hope could cause you to keep a losing position open longer than necessary, a stop loss order can act as a signpost definitively telling you when to get out.

This has a double benefit, in that big losses hurt you not just financially but psychologically, which can lead to more problems further down the line. Making money trading is about consistency, not making one off miracle trades. However, if you have big losses to make up you are much more likely to be drawn into bigger gambles or “revenge trades” where you try and get your own back on your misfortune.

The core of a good trade plan is to pick your exit point at the same time as you decide on an entry point that you’re happy with. Stop loss orders help you stick to such a plan. This may sound limiting given how fast markets can move, but using a trailing stop loss order, you can automatically have your exit point move up behind the price as it rises (assuming that it does!).

Exceptions Prove the Rule

Of course, there are some trades where you may have a decent reason to leave a stop loss out your strategy. If for example you’d picked up an extremely volatile stock due to a conviction that it would, overall, go up in price over a period of years, you’re going to be ignoring month by month fluctuations in price, even if they do take a considerable tumble. In this scenario, given the risk you’ve taken on, a stop loss is unlikely to be much use to you.

However, unless this is your mindset from the very outset, before you even by the stock, you shouldn’t adopt such a tactic. Don’t babysit a bad trade out of pride or frustration at the way prices are going in the vain hope that the situation will soon be reversed.

One of the most important mental attributes a good trader needs is the ability to take a (preferably minimal) loss, learn from it and move on. Stop losses can help you do just this, by alerting you early on to a trade that just isn’t working out.

The Power Of Compounded Interest

The Power Of Compounded Interest

Someone once said that the greatest power in the world is the power of compounded interest. This is the interest that is put on top of the principal so that the interest then starts earning interest. Through compounding your money is able to grow much faster. If you want to become financially free then this is your greatest weapon.

Young people often put off starting a retirement account. They think that they won’t need to start until they are 30 or 40. But this may be the biggest mistake you can make. Why? Because the best time to start investing for your retirement is NOW.

Now the question is how can you make use of the power of compounded interest? You can do this by putting your money in vehicles that can give you good interest rates. One such vehicle is the stock market. You do not have to invest huge sums of money. To start investing in the stock market you only need a minimal amount. Then you can slowly add to your investment each month. If you think stock is too risky then you can play it safe and buy mutual funds instead. It has a lower interest rate but it is “safer” since there’s a fund manager who will be managing your investments. Then there are also bonds and T-bills.

There are actually many investment vehicles that you can use. It all depends on your preference and expertise. The most important thing is that you know what you are doing. Or if you don’t – find someone who does.

To maximize the power of compounded interest it is best to start early. When it comes to compounding time is your friend. The earlier you start the better. Investing at a young age gives your money more time to grow. Next, invest regularly. Make it a habit. Allot a portion of your income for your retirement fund and be disciplined enough to follow through. And of course, be patient. The power of compounding is only effective when you give it enough time to grow.

If you are not accustomed to saving and investing then this may seem difficult at first. But as long as you discipline yourself enough to follow through and make it a habit then it will get easier with time.

Amy C. is an interior decoration aficionado and online marketer.  She also likes testing and trying new home and office decorating themes.  In addition to being an interior decoration hobbyist, she enjoys designing calming solar fountains and glass art.  Amy invites you to browse her delightful collection of glass vases

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