Monthly Archives: June 2017

Here are the Things that the Market Does Not Care About

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Periods of either bull or bear market can happen on any occasion. But did you know that the market does not really care about labels or the things that might transpire in any given moment? In this article, you will be presented with a list of what does not the market care about.

  1. The cost basis you made about a certain investment

In reality, the market does not care about how much you have paid for a certain stock. You can pay a stock for a particular price and the market would not even care about it. What matters is that you know how to manage your stock and recover from any losses, especially if you have paid for a stock the wrong price compared to its potential and performance.

  1. The moment you begin investing or your retirement timetable

Unfortunate as it may seem, but the market is not bothered about your investing life cycle. Hence, the period you started to invest your funds in the market as well as your target retirement, or the time you need to withdraw your money. Such timetable solely depends on you and not on the market.

  1. The target amount of returns you are eyeing for

The market does not care about your target returns. If you are looking forward to hitting your financial goals, it will all rely on your investing skills and not on the market itself.

  1. The feelings you feel at the moment

This might be somewhat harsh but the market does not really care about your emotions. It has no sympathy about your feelings – whether you feel scared, nervous, excited or greedy.

What you need to consider in the market is that you do not have to take everything too personal as it can hinder you in making good decisions for your positions. Remember that money is at stake every time you make your move in the market.

  1. The strategy you employ

It does not mean that you have a more complex strategy than the others it makes you better than the others. Strategy is important but what matters the most is that the strategy you have is applicable to the market. The market does not give any sort of bonus award or points for the level of difficulty or sophistication of the strategy you are using.

  1. The quotes you believe and apply in your life

There are a number of great investors out there who can both inspire and motivate you as you are into the field of investing. But you have to remember that these quotes do not matter in the market.

Yes, it might be a good thing that you know such stuff; but the market is reliant on an investor’s performance and not with the number of quotations he or she believes in.

  1. The amount of experience you have in the market

Whether you are a newbie or an experienced investor, the market does not really care about it. Experience may help you with your decisions, but it does not guarantee 100% success rate. It also does not mean that you are a newbie, that you would be a failure in the field of investing.

Conclusion

The above-mentioned items are the things that the market does not really care about. What matters is that you continue to increase your learning about the market and apply it to your trading activity.

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What Must a Pre-Retirement Financial Checklist Contain?

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Do you only have a few years left before retirement? Are you dreading about retirement even at an early age? Can you say that you will be able to live through retirement by just relying on your present source of income?

This post contains a detailed checklist that you may consider as you near retirement, for you to confidently say that you are ready to leave the labor force. Work your way around this checklist and have an abundant and prosperous retirement.

  • Emergency Fund Savings Account

This fund will serve as a buffer account should your pensions or Social Security gets delayed. It is important to have a savings fund that you can depend on should something unexpected happens during the course of your retirement.

  • Retirement Budget

This is a major consideration for retirement. You have to know and analyze what type of expenses you are going to make after retirement. An accurate estimate is needed so you can budget your money accordingly.

If you were not able to make a proper estimate of your expenses, you might experience adverse problems in the future. 

  • Health Insurance Options

 Medical and health fees are one of the biggest considerations during retirement. Health insurance coverage is an expensive one that is why a number of people are neglecting their health because of the costs involved.

You have to know the best way that can help you cover your medical expenses and health insurance, since moving towards your golden years really entails checking on your health all the time.

  • Retirement Income Outline

 The advantage of making a retirement income outline is you can know the exact periods where your sources of income will commence. This can help you manage your cash allocation and flow appropriately. It is also a way to both discipline and control yourself in making unnecessary expenses that could ruin your retirement budget.

  • Investment Plans

Planning for the right kind of investments can mean growing your money and letting it do the work for you. You have to know the detailed pros and cons of each investment vehicle that you want to pursue.

Remember that you need to expand the value of your money so you can use it for a long time. You can opt to read books about finances or talk to a financial advisor so you can be sure that you are doing the right thing to your money.

Conclusion

Planning is a must when talking about your retirement. You should be able to identify sources of finances for you to have the best retirement and a great life after working hard throughout life. Financial success would only be justified once you were able to traverse retirement contentedly and comfortably.

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What Should You Do During A Stock Market Correction?

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The market can undergo tough days as it can go through good days. Such instance is not surprising, since a correction is just around the corner. It would be alarming if the market would not have a period of correction and crash.

If a stock market correction happens, what are the advisable actions that an investor must do?

  1. Do Nothing

A wise investor is someone with a financial plan and an investment strategy at the same time. If a stock market correction happens, it does not necessarily mean that you need to do something immediately. Making a certain move in reaction to the correction is not really an advisable move. The least you can do is to wait until the volatility settles somehow. The sound advice for investors is to – “relax.” Hold, as it will work itself out.

  1. Do Calm Down

Do not panic. Panic will just cost you a lot of money. Crashes happen once in a blue moon. To be able to think appropriately, you first have to calm yourself before making any move.

Market corrections are a normal part of a stock market cycle. No investor can control or counteract such events. What you can do is to set up your portfolio so that it can withstand unforeseen and untoward events such as a market correction.

  1. Do Ignore the Media

 News deliver good information and it is highly essential that you know what is happening with market trends. However, during periods of market correction, news can highlight fear which may in turn cause the investor to panic. The media is not the proper venue for you to be during such times. It is advisable that you go back to your financial plan and investment strategy to aid you during such phase.

  1. Do Review Your Portfolio

As the saying goes, there is always a positive to every negative. This means that during a market correction, you can take advantage of such incident to assess the performance of your portfolio. If you find yourself fearing the effect of the correction to your portfolio, then maybe it is high time that you review your asset allocation. If you think that you cannot do it alone, you can always ask for the help of a professional financial advisor to review your portfolio and employ the necessary strategy.

Conclusion

Admit it, stock market corrections are frightening. In this era of fast information dissemination and a wide range of media when it comes to updates, investors are advised to remain calm before reacting. Investors might find themselves at a loss during such periods; however, it is a part of reality that markets tend to correct at some time. As a wise and smart investor, you have to factor such unfortunate event to your plans.

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Find out What Stage of Wealth Are You

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In assessing others’ level of wealth, as well as your own level, it is important to have a sound measurement on your financial situation. Merely assessing someone by just their lifestyle and the kind of car they drive are just one of the many myths people believe to be true in order to say that someone is doing well in life. Certainly, there must be a sensible way in determining the financial position of a person.

Find out in this post the definite stage of wealth you are into at the moment. There will be different stages that will be discussed, and here they are:

STAGE 1 – FINANCIAL SOLVENCY

 

You are in wealth stage 1 if you can pay your bills on time and be able to save even a small chunk from your income. Generally, the standard when it comes to saving is a minimum of 10%. Yes, saving can help you be financially independent; however, you will need three decades at a minimum for you to be able to enjoy your money.

STAGE 2 – FINANCIAL STABILITY

Stage 2 requires you to have an emergency fund that you can use anytime an unwanted financial situation happens, i.e. hospitalization. If the emergency fund is lacking, there is a higher chance that you will be inclined to spending a portion or even the whole of your savings.

You cannot say that you are in the financial stability stage if you have not surpassed the solvency stage. You must be financially solvent first before becoming financially stable.

STAGE 3 – DEBT FREEDOM

As the name says it, a person is considered to be on this stage if he or she had finished paying all of his or her debts. A lot of people usually reach this stage a few years before retirement, between 40-60 years old. This stage is hard to achieve, as there are mortgage and vehicle offers wherein the pay period range from 25 years and above.

A person is said to achieve this stage if the first two stages have been attained.

STAGE 4 – FINANCIAL SECURITY

You are said to reach this stage when you already have a positive cash flow which you can use to build wealth further. The person, then, is able to make his or her money work for him or her, allowing you to have a bigger amount of money than your annual gross.

When a person is at this stage, he or she can take deal with more risks (such as getting into the investing field and diversifying his or her portfolio) without worrying about the consequences in order to grow more his or her wealth.

STAGE 5 – FINANCIAL FREEDOM

Financial freedom entails that as you let your money work for you, you are not only getting more financial sources aside from your gross income, but you are also given the opportunity to spend on extravagant things that you were not able to give yourself or your loved ones.

There are people that may think they are already in this stage since they can afford the extravagant things in life, but remember you must have confidently and truly surpassed the first four stages before considering yourself belonging in this stage. The word “afford” then might not really apply to you – you might just be spending on extravagant things without really becoming financially able to buy them.

Conclusion

The measurement of wealth mentioned in this post can be considered to be the concrete gauge for assessing in what particular stage of wealth you are into. Remember that, wealth cannot just be inferred from the accumulation of material goods.

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What is Trader’s Block?

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It might be new to your ears but there is an existing condition, especially in the field of writing where writers are having a hard time to think of what topic to write or even while writing, they find it difficult to proceed with their words. This condition is known as “Writer’s Block.” The author loses the capability to complete his or her work or even produce another one. Moreover, there is also an almost similar condition that happens to traders.

In this article, you will be able to learn a slowdown condition that happens to traders of all ages and skills. This condition is termed as “Trader’s Block” – since the description is somewhat similar to that of writers, wherein a trader finds it difficult to come up with a new trade setup and it might be frustrating.

What does it mean by Trader’s Block?

This condition usually happens after a huge win or loss. Traders affected by this condition may find themselves having a hard time realizing a new trade due to fear that he or she might not be able to repeat success. On the other note, there are also traders who experience the opposite – they fear that loss may be replicated at once should they decide to make a move.

What are the symptoms when a trader has been struck by Trader’s Block?

Generally, the main symptom is that traders are always looking for the perfect trade (perfect entry, perfect timing, and perfect pricing). However, a perfect trade does not really happen in real life. Therefore, traders experiencing this condition feel somewhat incapacitated to make a move and unable to make progress from your last circumstance. They might come to a point where charts and a bunch of information presented to them does not really make sense.

A trader can also feel like he is processing too much information and that leads him to the inability of putting things in order and formulate a good strategy. This results to traders literally freezing on the decision-making process since there is an excess of emotions coming into play and then crowding one’s reasoning and judgment.

What can you do to cope with Trader’s Block?

More often than not, it is hard for traders to realize or accept on their own that they are experiencing trader’s block. Once they do, they tend to make an effort to get themselves out of such condition. However, the more they insist, the more it harms them. It then can result to forcing of trades and then finding themselves getting buried in the quicksand.

Experts advise that instead of forcing your way out of the condition, what they advise is that the trader must stay calm and cool. Once you feel that you are already relaxed, you have to review the fundamentals of trading and how to better apply it with the kind of trading system you have. Refreshing yourself with the basics and the philosophy behind the art of trading, you will then be reminded of the important signs to consider for your entry and exit strategies, including the risk management and tolerance you have set for yourself.

Look at concrete and solid data and stop listening to your emotions. Disregard your personal feelings and fears as it can worsen the situation and your condition even more.

 Conclusion

It can be hard going back to your usual self. However, it is better to try renewing your focus for you to be able to overcome trader’s block. Once you finally succeeded in getting a hold for yourself, you can go back to your usual trading persona or even become better at it.

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The Reasons Behind Mergers and Acquisitions

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You probably have heard of companies announcing acquisitions of other companies or merging with other businesses and you might be wondering why other business owners agree with such offer. It is important to note that the primary motive lie in these simple phrases – and that is to make the most of shareholder wealth.

This post will unearth the other underlying legitimate reasons why mergers and acquisitions happen.

  1. Diversification

There are business firms that aim for diversification or a broader line of business and / or products. Sometimes a company merges with another company (of another industry) to diversify its line of business and / or business. The reason for this is to reduce the impact of that company to its own profitability.

It is like scattering its eggs, instead of putting all in one basket.

  1. Refining Business Focus

Also, there are cases when a company merges with other companies having a deeper and wider market penetration which is essential for business operations. 

  1. Amplify Supply-Chain

When a company decides to buy one of its suppliers, it is able to both eliminate a percentage of costs (margins that the supplier adds to its costs). In addition, a company may also choose to buy one of its distributors for it to cut to a lower cost the shipment of its products. 

  1. Collaboration

This is also considered as synergy. As the Merriam-Webster online dictionary defines the word synergy, it means a combined action or operation which is considered as a mutually advantageous conjunction of elements. When synergy is given emphasis in mergers and acquisitions, the idea is that when businesses combine with one another, the opportunity to increase performance is boosted. It is also a way to decrease costs of a certain company.

Generally, a company will merge with another one if its strengths complement its weaknesses.

  1. Growth

Mergers provide the acquiring company the chance to grow its market share even without putting much effort in doing the work themselves. A company may choose to buy a smaller competing company and authorizing it to produce more products and sell more to its loyal customers.

It can also mean a move to improve the financial stance of a certain company, especially if a company is in a deep financial problem, it may opt to look for another company that is willing to acquire it – just to go out of bankruptcy. 

  1. Eradicate Competition

A lot of mergers and acquisitions activities permit the acquirer to eliminate competition and increase market share of its products’ market. However, in order to convince the target company’s management to accept the offer, a large amount of money is needed.

Conclusion

Mergers and acquisitions happen since companies are after following key reasons: to protect their own business, to improve the strength of their business and to boost business profits. Nevertheless, just like any complex decision mergers and acquisitions can be either successful or disastrous – yet this depends on the strategies put in place by the collaborating companies.

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