Tag Archives: investment

Here Are the Five Commandments of Investing

600x400

The Ten Commandments you have heard since childhood are laws used as standards that deal with man’s relationship to God and man’s relationship to his fellow human beings. These act like a manual for people on how to live a better life. Hence, these are like guidelines which help people to keep themselves out of trouble.

This article will teach you the counterpart of the Ten Commandments compressed into Five Commandments, to guide you in the world of investing and to keep your money in safe hands.

Is investing hard?

For the less knowledgeable, yes, investment is a hard concept and field to grasp; but for those who continue to enrich their knowledge, investing will come easy as it seems. Knowing the right principles and being able to adhere to these religiously can lead you to the path of investment success.

 

The Five Commandments of Investing

  1. Thou shalt be clear with your goals and avoid gambling.

 What separates investors from gamblers is that investors follow a mathematical formula and concrete strategies to be able to profit from their move. Gamblers are not fond of such. They bet their money on unknown and uncertain outcomes.

Do not just invest for the thrill or fun, rather invest for profit. In order to do this, having the discipline is essential to reach financial security and consistent profits. Growing wealth has a science behind it. As a perfect analogy for this one, you should have a particular destination in mind so you would not be lost when you are already at the sea.

 

  1. Thou shalt ensure that thy financial house is in regulation.

 One of the top responsibilities of an investor is to keep his or her personal finances in order first before jumping in the investing activity. Investing when you have debts scattered all around such as drowning in credit card bills and overdue fees can get you into serious problems sooner or later. Take care of your debts first before taking the plunge in the investing world.

 

  1. Thou shalt need to exercise due diligence.

 Exercising due diligence in investing means that you invest within the scope of your understanding. If you do not understand something, it is not advisable to take the risk and invest. When exercising due diligence, it also means that you avoid rushing into making an investment decision. You need to study all positions first before putting in your money.

You need to increase your understanding to be able to come up to an informed decision. Exercising due diligence also means that you know what risk management strategies you need to apply to protect your capital from permanent loss.

 

  1. Thou shalt avoid jumping on the bandwagon.

 This can be considered as having herd mentality (a well-known descriptor of human behavior since people learned to socialize) or the way people are being influenced by their peers to adopt some behaviors. This one applies greatly to the stock market. There is a difference between passive investing and passive investor. When you are a passive investor, you tend to digest all information presented to you and failing to thinking about it critically.

In the field of investing, you have to see things on your own in order to realize the true value of a stock.

 

  1. Thou shalt continue to invest in thyself.

As your portfolio and money grows, so your financial intelligence must increase as well. The level of your investment skills and knowledge reflects your investment results. If you want to improve your profits, you have to improve your financial intelligence.

Moreover, the best investment you can have is YOURSELF. As the good old saying goes, nobody can take away your learning and it can double, triple or even multiply your dividends a number of times for the rest of your life.

 

Conclusion

The above-mentioned guidelines can greatly help you with your investing career. Keep yourselves out of difficulties by observing these proven guiding principles.

 

Alright! If you want to be updated with the latest news about the latest market news and updates, subscribe now! Trade12 is here to answer any question regarding online trading, commodities, stocks, technology, and economy. Sign up for an account at Trade12.com or you can even download the Trade12 app. Available for both iOS and Android devices.

Earnings Release Week

profits.jpg

This week will be a busy week up ahead for the market community, a lot will be put in the spotlight but the one thing that will stand out is the geopolitical turmoil the US created after the strikes it made in Syria last week.

Financial Institutions and Banks

This will be the first of the big weeks in the financial market, and for this week, all the highlights are focused on the top financial institutions and banks. The scheduled reports for this week, this Thursday, are from prominent banks and financial institutions JPMorgan Chase & Co, Wells Fargo & Co, and Citigroup Inc.

The banks have been on a rollercoaster of a ride from the past months under the new Trump administration. Some other factors that may have triggered the fiscal stimulus hopes for the financial institutions are; deregulations talks and the Fed’s decision to be sterner and hiking the interest rate for a couple of times this week.

platinum-premium-credit-card.jpg

Inflation off The Bat

There will also a big debacle for Friday because of the exclusive inflation data that will be unveiled; the data include whole March’s progress. With the Fed’s recent hikes and its latest meeting last Wednesday hinted that if the inflation data continue to roll, the central bank may and will increase another three or four interest hikes this year.

V-Lyubeke-startovala-vstrecha-G7.jpg

G-7 Meets in Italy

The G-7 is a group of countries that consists of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These countries have started a 2-day summit meeting today in Italy after the alarming attack the US made against Syria, investors and the market community continues to keep track on what would happen in the growing geopolitical crisis.

Then entirety of the 2-day meeting is expected to be disclosed at a press conference dated this coming Tuesday Eastern Time.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you!

Investing Dictionary #3: Expense Ratio

e8406488349d50362f3674027bdd6d5e_Family-Expenses-814-363-c.png

Expense Ratio is a rare word to stumble upon, it is a word prevalent in-between companies and it varies on more private talks the market community has seen. So going back to Expense Ratio, it is actually a measure of what it costs an investment company to operate a mutual fund.

You may ask how expense ratio is determined; well according to the Investopedia: An expense ratio is determined through an annual calculation, where a fund’s operating expenses are divided by the average dollar value of its assets under management (AUM). Operating expenses are taken out of a fund’s assets and lower the return to a fund’s investors. It is also known as the management expense ratio (MER).

Expenses-iStock_000019265699Small11.jpg

All You Need To Know About Expense Ratio

Expense ratio varies very differently on each type of fund, operating expenses vary widely. One of the biggest parts or the crucial component of operating expenses lies on the fee paid to a fund’s investment manager or advisor.

Further costs include recordkeeping, custodial services, taxes, legal expenses, and accounting and auditing fees. Investopedia makes a clear distinction between funds, “expenses that are charged by the fund as reflected in the fund’s daily net asset value (NAV) and do not appear as a distinct charge to shareholders.”

expense-claims.jpg

Funds to Keep In Mind

There are two different expense ratio fund; Index Funds and Actively Managed Funds are both type of funds to keep a list on. Index Funds usually carry very low expense ratios; the managers who oversee these funds are plainly repeating a given index, so the need to have a full management team on staff is deliberately discarded.

Actively managed funds, on the other hand, employs teams of research analysts examining companies as potential investments. By coming up with a team, creating and managing this team adds more costs that are then get passed on to shareholders in the form of higher and bigger expense ratios.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you!

What is the FCA?

1FF0FC5500000578-0-image-a-49_1452041457522.jpg

If you’ve been around the Forex trading market, you’ve probably heard or saw FCA somewhere on those trading websites and what have you. First of all, FCA stands for Financial Conduct Authority; they are the regulator for over 56,000 financial services and firms and financial markets in the UK and the prudential regulator for over 24,000 of those firms.

PX5187370_Bloomberg_News_UK__FINANCIAL_CONDUCT__The_Financial_Conduct_Authority-xlarge_trans_NvBQzQNjv4Bq-aBdAF1KcJZBra1vShPrjj0kDm3vfrRFMfhr6AQmOGI.jpg

What Does FCA Do?

FCA is the pioneer for the safer and more honesty financial market, they promote fairness and effectiveness for all consumers all over the world. FCA said, “It is our aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole.”

The FCA started on April 1, 2013. They then started to grow and grow each year, regulating over 56,000 financial and the prudential regulator for over 24,000 of these firms. FCA governs 2.2 million people that are employed in the UK financial service who contributes 65.6 billion pounds in tax to the UK economy.

FCA.jpg

How Does FCA Do All The Regulating?

According to FCA’s website, this is how;

Our strategic objective is to ensure that the relevant markets function well and our operational objectives are to:

Protect consumers – we secure an appropriate degree of protection for consumers.

Protect financial markets – we protect and enhance the integrity of the UK financial system.

Promote competition – we promote effective competition in the interests of consumers.

The Financial Conduct Authority continues as a public body that is funded completely by the firms and financial service providers they regulate by charging those fees. They are also accountable to the Treasury, which is responsible for the UK’s financial system, and to the parliament.

Finally, they also work with several consumer groups, trade associations, and professional bodies domestic regulators, EU legislators, and a wide range of other stakeholders.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you!

The Types of Dollars in the World

1.jpg

We all know that the dollar is the native currency in the United States, but there are actually more countries that call their currency the dollar. These are some countries that share the same currency name with the land of the brave!

shutterstock_526071916.jpg
Canadian Dollar

Canadian Dollar or CAD for its ISC code is the currency people in Canada use! It is mostly represented as C$ to remove any confusion among other dollars, but often times it is also represented as $. Just like any other dollar CAD is also subdivided into 100 cents, CAD is one of the major Forex currencies and is currently the 7th most traded currency in the world.

The CAD, as of today, produces and circulates 5 cents, 10 cents, 25 cents, 50 cents, 1 dollar and 2 dollars. Unfortunately, the production for the 1 cent was discontinued somewhere around the year 2012, banknotes that the CAD produces and circulates are in the form of 5, 10, 20, 50, and of course 100 Canadian dollar. One more thing about the current Canadian bills is, they are made of polymer as of 2011, as opposed to paper for the previous years of production.

shutterstock_491676856.jpg

Belize Dollar

Belize Dollar or BZD for its ISC code is the major currency of Belize, it is represented as BZ$ for further distinguishing from other dollar currencies. This currency dates as far as 1976; it then replaced the current currency of the country which was the British Honduras Dollar. Like any other dollar, the BZD is also subdivided to 100 cents.

Along with the transforming of British Honduras on late 1976, it also replaced its currency to Belize dollar. It was freed from the British colony in late 1981, now it trades in the rate of BZ$2 to US$1.

shutterstock_442393996.jpg

Australian Dollar

One of the most popular dollar currency, the Australian dollar or AUD for its ISC code; like most of the dollar currency, AUD is also subdivided to 100 cents. It is commonly represented as A$ to disperse any further confusions.

The AUD was once known as the Australian pound in 1966. But after several years, 1983 to be exactly, the pound was then transfigured from pound to dollar. As of late, the AUD is one of the major currencies exchanged on the world’s Forex markets. It ranks as the 5th most traded currency just behind the USD, EUR, JPY, and GBP.

The AUD circulates coins at 5 cents, 10 cents, 20, cents, 50 cents, 1 dollar, and 2 dollars. While the current banknotes circulation it has is as follows; 5, 10, 20, 50, and 100. The banknotes circulated are all made from polymer instead of papers.

shutterstock_369927296.jpg

New Zealand Dollar

The New Zealand Dollar or NZD for its ISO code, the most common symbol the New Zealand dollar is recognized as NZ$. Like any other dollar currency, it is also subdivided to 100 cents. A common slang the NZD has is Kiwi, because of the kiwi bird that is present on their NZ$1 coin.

The NZD replaced the New Zealand pound at 1967, it has been pegged for a quite bit through a series of different currency pegs but has been allowed to float freely since 1985. The NZD is one of the major currencies exchanged on the world’s Forex markets. NZD currently circulates coins in 10 cents, 20 cents, 50 cents, 1 dollar, and 2 dollars. It also currently circulates banknotes are 5, 10, 20, 50, and 100 dollars.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you!

Trading Commodities

shutterstock_462487693.jpg

The commodity as the Merriam-Webster would define it;   an economic good: such as a:  a product of agriculture or mining agricultural commodities like grain and corn b:  an article of commerce especially when delivered for shipment reported the damaged commodities to officials c:  a mass-produced unspecialized product commodity chemicals commodity memory chips.

This simply puts the milk and orange juice we leisurely drink, from the means of energy to power up our homes and vehicles, commodities are a big chunk of our daily lives. In the world of investing, commodities are part of a diversified investment portfolio and they can also be traded in the global marketplace. Commodities are literally anywhere and everywhere in the world, they also garner billions and billions of dollars from investment every day.

Spot versus Future Commodities Trading

The spot price is defined as the current price of a particular market portfolio, in this case, a certain commodity, and can also be bought or sold for the most immediate delivery. One major thing to remember for spot price is that they are very susceptible and subject to extreme volatility. The main difference it has with future prices is that; future prices are increasingly higher over time and higher futures prices reflect carrying costs such as storage.

Commodities are very flexible as it is tradable both in a spot and in future markets. An increasing trend in the commodities community is trading individuals in the form of futures; this happenstance means that you won’t be buying or selling the commodity itself but rather a contract of a certain price by a stated date in the future.

shutterstock_441099742.jpg

Commodity Trading Round Up

Just like any other investment goal, we would want to buy low and sell high! The only caveats with trading commodity are; 1) Commodities are highly leveraged and 2) Instead of share, commodities traded in contract sizes instead. One more thing to remember when you start trading commodities is that investors can buy and sell positions whenever the markets are open.

The bottom line is, commodities open a wide variety for your investment portfolio. It expands every portfolio from the usual stocks, bonds, and mutual funds. Every investment carries risks, but what set trading with commodity apart is the alluring high leverage it brings on the table.

Trade12Basics is a daily updated blog about the happenings in the stock market, financial realms, and the world economy. It is also a place to find basics in trading and other sorts of tutorials that you can add to your knowledge. Subscribe to further educate yourself about the field that you are to partake in. Trade12Basics  is here for you

Why do you need an investment plan?

You can easily get discouraged with investing if you don’t know where you are heading to, thus, it is necessary to  have a concrete plan. An investment plan serves as your stairs in attaining your financial goals. But the most basic thing for you to recognize is your current financial state and what you want to do with your coming investments.

In creating your investment plan, you have to set your specific goals, however, they have to be realistic. You can’t aim for $100,000 return of  investment if you haven’t invested at all. You have to decide where does the money you acquired from your investment go. In some cases, you may want to buy a house, a luxurious car, spend it on travel or you just want to retire early. Take note that the bigger the goal is, the larger the investment must be.

investment

Before you invest or make an investment plan, one of your concerns should be the amount of money or funds you can honestly invest. It is necessary to estimate how much of your money you can save and you can spend. You have to picture in your mind the amount of money you can allow yourself to spend and you must obey the figures you have set as much as possible. You may check the available money that you have, your expenses and your emergency funds perhaps.

After you have set your goals, proceed on choosing your investment strategy. Investment expert suggests that if you want long-term goals, you should choose more aggressive and higher investments. On the other hand, if you are only after short term goals, then you might as well pick the conservative investments with lower risks.

As the theory says, you can deal with more risks if you are young due to the fact that you can handle any loss since you have more time to recover. Therefore, younger investors are advised to take the aggressive investments rather than the less aggressive ones. Remember, when you take less, you make less, so you become cautious about the risks which are significant or not.

Following your investment strategy is your investment policy statement. This will help you in your investment decisions and will serve as an outline for your investment adviser. The investment policy statement must include your specific goals and the strategies you may use to meet your plan. You can also indicate your expected return of  investment in a certain time together with the risks you are willing to take.

goal.jpg

If you can’t meet your projected savings, then you may modify your goals. Figure out the investment plan that suits your needs and if you have to learn from the basics, do it. It is also wise to check your goals from time to time so you can make the necessary adjustments.

In some instances, a financial plan and an investment plan are used interchangeably. However, a financial plan deals more on your personal plan in areas including college and risk management. A financial plan is an evaluation of your present and future financial state which is used to perceive your feasible income, asset values and withdrawal plans in the futures.

When you have an investment plan, you are prepared for the possible scenarios in the future. It gives you an overview about market possibilities and it helps you reach your goals accordingly. So what are you waiting for? Start your investment plan as soon as possible.