With the technology boom that has changed the way business is done across the globe, one unintended result has been the rise of day trading. Day trading is a risky and stressful form of trading that involved buying stock and selling it within one days time. It’s thought that if this is done enough time, with the right foresight and financial advice, that a person can make quite a lot of money each day. Day trading wasn’t even an option before the 1990’s. Here’s why.
Monday, December 1, 2008
Day Trading
Back before the computer age allowed instant stock buying and selling, the financial settlement period use to take much, much longer. It was possible to buy a stock, and not have to pay for it for another 10 business days. It was common practice in those days to try to sell the stock for more than it was worth before you had to pay for it in an attempt to make a profit. Many traders who had no actual money of their own would make their livings this way, and it’s obvious how dangerous this was.
A day trader has many different strategic options that he or she can follow to try to make a profit. The first is trend following. This is a tool that is used by all investors and its simply the idea that stocks that have been going up will continue to go up and stocks that have been going down will continue to go down. Obviously, this isn’t always the case, which makes trend following a dangerous method to base all of your day trading investments on.
Range trading is another tool used by day traders. This is the practice of buying and selling stocks once they reach their respective highs and lows. The trader figures that a stock that is headed up will continue to go up, but only until it reaches a new high, and then it’s due to go back down. The same is thought for stocks headed the other way. Once they reach a brand new low, they tend to rebound and head back up.
Playing news is another common tool of the day trader. The technique is exactly what it sounds like, buying stock that has just released good news and selling stock that has just released bad news.
While none of these techniques are guaranteed, day trading is increasing in popularity every year, and while the potential for significant loss is very real, many continue to walk the tightrope that is day trading.
Tuesday, November 25, 2008
Investing For Your Retirement
Most people have a retirement paranoia in them the general opinion is that this is the time when they stop earning actively, will be probably depending on someone else and will probably have medical problems that they will not be able to pay for. There are so many such apprehensions about retirement that it is no wonder people dread the time. But then, if you are dreading your retirement, then you do not know of the various ways in which you can save for your retirement. Here's a list.
1. Retirement Annuities - Several retirees are getting the rich benefits of annuities nowadays. Annuities are investments that are made before a person retires and which begins paying out after the retirement for a fixed pre-decided term, or for the whole remainder of the person's life. The interest accrued during the timeframe between the investment and the payout is also given out to the retiree. In this way, the retiree gets not just the principal amount back, but also the interest that is collected over the years of the investment. There are two types of payout methods the fixed annuity and the variable annuity. The fixed rate annuities are better because there the interest rate is fixed, but in the variable rate annuities, the interest rate will change according to market trends.
2. Fixed Deposits in Banks - This is another very popular method of investing for retirement. Every bank pays out a healthy interest rate on the invested principal, due to which after some years the invested amount multiplies. If kept for a significant number of years, the little amount invested in fixed deposits could multiply and be a good source for spending the life comfortably after retirement.
3. Term Insurance Policies - Term insurance policies are set for a fixed period of years, which can be either a short or a long period of time. The investment is done in the form of premiums after regular intervals of time. The premiums are collected by the insurance company and the interests are accrued on them. When the stipulated term is over, the insurance company pays out this amount to the person. Many people buy term insurance policies to tide them over after their retirement.
4. Real Estate Investing - Most people buy some property when they are working. They might buy the property on installments, but in most cases, the installments are over long before the retirement time approaches. In the meantime the property has built up significant equity. This can be a good option for investment. Many retirees sell their homes after retirement and buy smaller homes in a more peaceful area. The money they save is good enough to look after their needs in their post-retirement years.
There are several more ways for the discerning person who wants to do some investing for life after retirement. The above are just some of the most common ones.
1. Retirement Annuities - Several retirees are getting the rich benefits of annuities nowadays. Annuities are investments that are made before a person retires and which begins paying out after the retirement for a fixed pre-decided term, or for the whole remainder of the person's life. The interest accrued during the timeframe between the investment and the payout is also given out to the retiree. In this way, the retiree gets not just the principal amount back, but also the interest that is collected over the years of the investment. There are two types of payout methods the fixed annuity and the variable annuity. The fixed rate annuities are better because there the interest rate is fixed, but in the variable rate annuities, the interest rate will change according to market trends.
2. Fixed Deposits in Banks - This is another very popular method of investing for retirement. Every bank pays out a healthy interest rate on the invested principal, due to which after some years the invested amount multiplies. If kept for a significant number of years, the little amount invested in fixed deposits could multiply and be a good source for spending the life comfortably after retirement.
3. Term Insurance Policies - Term insurance policies are set for a fixed period of years, which can be either a short or a long period of time. The investment is done in the form of premiums after regular intervals of time. The premiums are collected by the insurance company and the interests are accrued on them. When the stipulated term is over, the insurance company pays out this amount to the person. Many people buy term insurance policies to tide them over after their retirement.
4. Real Estate Investing - Most people buy some property when they are working. They might buy the property on installments, but in most cases, the installments are over long before the retirement time approaches. In the meantime the property has built up significant equity. This can be a good option for investment. Many retirees sell their homes after retirement and buy smaller homes in a more peaceful area. The money they save is good enough to look after their needs in their post-retirement years.
There are several more ways for the discerning person who wants to do some investing for life after retirement. The above are just some of the most common ones.
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