Fortune Watch

Human’s are rational beings. We have the most developed brain among all species. However, in spite of all this, we are foremost governed by his emotions. It is said, man is ruled more by the heart than his mind. And these emotions, more often than not, play a huge role in man’s investments too. This is the sole reason, say, why the same person at one time might want to invest in the stock market, while at another time might find the same too much of a risk.

Investors may also feel attached towards a specific company and continue owning the stock without regards to its fundamental. For example, you might like Google’s search engine so much that you decide to buy the stock at $ 350 without doing any research. You figure that Google’s search engine is so much better that buying the stock will give you profit, right? Wrong. Now, I am not here to bash Google as an investment, but analyzing an investment goes beyond the products and companies. Most investors can identify good companies and products. It is quite easy. You know that a BMW is a better car than a Ford.

Emotions often also control the company one is investing in. Generally brand loyalties come into the picture here too. Example, if someone prefers purchasing his sportswear from Nike, he may want to invest in its stocks too, although the Reebok stocks may be doing far better. It is always better to conduct a proper research and check the latest trends rather than blindly following your heart. Keep in mind that you are currently dealing with the stock market and not the super market.

Google is a good search engine, probably the best that is ever produced so far. Sure, you probably pay more for Google than other generic search engines. But, please don’t over pay. You invest in Google to profit from it not because you like its products.

So, how do we eliminate emotion from our investing decision? We can’t eliminate it completely but there are certainly tools that might help. One is to calculate the fair value of a common stock that you are investing in. I covered this plenty of times but basically, the fair value of an investment is dependent upon the streams of profit generated by it. In the long run, if company A earns more than company B, then company A will be valued more than company B..

I know I don’t exactly give you the best solution to the problem. Emotion is hard to ignore. I am not immune to that. But following your emotion will cost you a lot of money. Don’t follow the herd and keep your focus on the fair value of your stock and you will do really well.

You need to realize that no matter how hard we try we cannot completely eliminate our emotions from playing a role while investing. But what we can do is apply equal amounts of common sense and logic. Always be aware that it is your finances that are going to be affected in this venture. Calculate the fair value of a common stock that you are investing in. The fair value of an investment is based upon the profit generated by it.

If, for a considerable period, organization A does far better than organization B, A will surely be far more valued than B. While investing, avoid the herd mentality, stay calm and always go in for the firm with the better fair value. This will ensure that you are a happy investor, earning high profits on your investments.

Penny Stocks are usually priced below a dollar and trading with them is fickle and risky game. While Penny stocks look like they follow the “more bang for your buck” principle, having a lot of penny stocks is very risky. Penny stocks are also referred to as small caps and micro caps. As with all trading, penny stock trading has its ups and downs. Penny stocks can give your large profits over a short time; they can also give you huge losses in the same short time.

Because of the high risks and alluring prices of penny stocks traders should be mindful of a few things. If you see that there are stocks for less than a cent, you shouldn’t invest. In the penny stock market, any thing less than a penny isn’t worth investing. You will never gain anything from a stock under a penny. In fact, it is just like the regular stock market except you buy stocks for much less, that’s why you should treat the penny stock market like any other investment.

You need to know every thing and I repeat EVERYTHING about the company and the stock that you are purchasing. With proper investing, you should be able to benefit from quick gains from the penny stock market. So be careful when buying stocks that have uneven ownership distribution.

The only way to be successful with the penny stock market is to know what companies to invest in through research.
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Why Acting on Price can be a Mistake.

Buy low and sell high is the ultimate guide to successful stock investing. It is also the reverse of what many investors do. It’s not that investors start out to do that, but too often, they use price, and in particular price movement, as their only signal to buy or sell.

Stocks that have gone up recently, especially those with a lot of press, often attract even more buyers. This obviously drives the price up even higher.

People get excited about what they read and see and want a part of the action. They jump into a stock that is already trading at a premium – they buy high.

Experienced traders can make money jumping in and out of a stock that’s caught the public’s attention, but it’s not a game for the inexperienced and it’s not investing.

There’s risk involved and tax consequences along with other issues that mean most investors should leave this activity to short-term traders.

For most investors, trying to grab a piece of the latest flashy stock, usually means paying too much (buying high).Bad Decision: The other side of the market is when a stock has fallen; most investors may want to sell along with the rest of the market. If you go by price alone, this can be a bad decision (sell low).

There are many reasons a stock’s price drops and some of them have nothing to do with the soundness of the investment. That’s why if you only follow price you may miss an opportunity.

After a stock’s price has fallen can be a great time to buy (buy low) if you have done your research on the company.

If all you know about a stock is the price, you may (and likely will) make investing mistakes. Remember, if a stock has had a good run up it may be time to sell, not buy (sell high). Similarly, if a stock has dropped like a rock, it may be a good time to buy rather than sell (buy low). You won’t know what to do unless you understand a lot more about the company than its stock price.

Very few investors make money in the stock market.

Look at where your account is today compared with what you had at the beginning. Don’t count what you have added during that time or interest income. Most folks are still running a loss.

Your broker, if you are unlucky enough to have one, will assure you that the market always comes back and you are in for the long haul. So don’t worry, be happy.

If you were one of the few (about 1%) who had a broker or financial planner that actually knew how to protect your money you would not have lost a huge portion of your portfolio from 2000 to 2003.

So, you have to learn to protect yourself! It is a lot easier than you think and most brokers are not even aware of it.

It was time to buy. Divide the portfolio into 10 equal parts. Select 10 mutual funds that have quit going down and are now going up and buy these. This doesn’t have to be done all in one day. Spread it out over the next 2 or 3 months as good equities present themselves.

Here is the key. Don’t lose money. Laugh out loud, thats what you do. Place a 10% stop loss order on each fund that was purchased and as each fund advances raise the stop every month. The investor has 10 separate positions with a 10% risk on each one. If the selection of the fund was poor and it goes down instead of up the loss is one percent (1%) of the total portfolio.

The investor has been smart enough to diversify into several sectors so the chance of losing in all 10 positions is very small. Do not buy individual stocks. Few investors are capable of choosing company stocks. Let the mutual fund manager do that. As stops are hit, find other good equities that are going up. When the market turns down you will be in cash as you will have been stopped out of all positions with nice profits.

Brokers don’t know much more that you do (and I’m not kidding). This simple strategy will spread risk, prevent large initial losses and prevent giving back profits as they are made.

If you’ve never invested in stocks before and are about to buy some for the first time, you should understand what to look for and what factors to consider when selecting a stockbroker. It can be a good idea to use a stockbroker for an active management of your stocks or mutual fund portfolio. Most investors will use a stockbroker at one time or another.

First of all, what is a stockbroker? Well, I’m not really sure… 😉 …just kidding. A stockbroker is an intermediary between you and the stock market, which is an exchange where shares of stock in public companies are openly traded. When you buy or sell a stock, also known as a “security,” you must place the order through a broker, who then transacts your business by placing the order on the market.

I personally use a discount broker only to carry out my order, I am willing to listen to a full-service broker’s story but in the end invariably the decision is mine. If you have done your homework, trust me a broker doesn’t know much more than you.

A discount broker is someone who gives you zero advice, and just executes your market orders for you, but does nothing else. Therefore, a discount broker usually doesn’t collect commissions. Instead, they usually charge a flat annual fee and are paid a salary. Internet brokers such as Etrade or Ameritrade are discount brokers that work on commission. They allow you to place your market orders online, and the website itself is the broker. Internet brokers usually charge a much smaller commission than anyone else.

If you use the services of your bank there are some facts to consider. When you talk about the options you have to invest your money, they will certainly recommend the funds they control themselves. Do they recommend other banks portfolios? I don’t think so. If you go to a car dealer that sell Ford, do they recommend you to buy a Lexus?

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I was tagged by Shane (zoomstart) to join in on a meme, who in turn was tagged by Rob (yack yack). This is not the first time I have participated in a meme, the first one was Blog Apocalypse. This one as the heading says is the challenge to write a post about why I blog. You know how these things work. You write whatever the meme calls for and then you tag 5 more people to do the same thing to keep it going.

We all have our own special ways how we relax, and that includes me.

This photo here depicts one of the two ways how I relax — throw caution to the winds and be totally carefree!

My other way of relaxing is — you guessed it — blogging.

I was stuck in Bahrain’s notorious traffic once again the other evening, and I found my thoughts wandering to blogging, and why I do it. Several explanations popped into my head, including money-making, impressing my new boss, or my neighbour’s teenage daughter, killing time, a reason to learn PHP and CSS, what not.

All my expertise in lying to myself wouldn’t help me accept any of these explanations. There was something else. And just as the traffic started moving again, the answer came to me.

You see, an artist likes to see his signature on his painting. A writer is passionate about his name in print. A copywriter will stare at his creative ad for ages. All of them have something in common — they are expressing themselves.

I see a kind of quiet satisfaction when something I have to share is made public for others to read — whether they accept it or reject it, that’s none of my business. My concern is for the serene happiness it gives me when I hit the bed every night.

I asked myself, if my goal was to make $15,000 per month from blogging, and if someone offered to pay me the same amount every month for doing nothing, would I stop blogging?

No, I wouldn’t. Certainly not. It’s not about money. It’s something money can’t satisfy. In my case, it’s simply called passion. A passion for expression.

Now I am Tagging Zakman, Jag , Boston Brat , Christy’s Coffee Break , Adam

Until next time, Cheers 😀

A woman proudly told her friend, “I’m responsible for making my husband a millionaire.” “Well what was he before he married you?” the friend asked. “A billionaire.”

A dollar per point
A professor was giving a big test one day to his students. He handed out all of the tests and went back to his desk to wait. Once the test was over the students all handed the tests back in. The professor noticed that one of the students had attached a $100 bill to his test with a note saying “A dollar per point.” The next class the professor handed the graded tests back out. This student got back his test, his test grade, and $64 change.

A man being mugged by two thugs put up a tremendous fight! Finally, the thugs subdued him and took his wallet. Upon finding only two dollars in the wallet, the surprised thug said “Why did you put up such a fight?” To which the man promptly replied “I was afraid that you would find the $200 hidden in my shoe!”

“When people ask me if I have any spare change, I tell them I have it at home in my spare wallet.” – Nick Arnette.

“Ever wonder about those people who spend $2 apiece on those little bottles of Evian water? Try spelling Evian backward” – George Carlin.

“There were times my pants were so thin I could sit on a dime and tell if it was heads or tails.” – Spencer Tracy.

“Any man who has $10,000 left when he dies is a failure.” – Errol Flynn.

“It is pretty hard to tell what does bring happiness; poverty and wealth have both failed.” – Ken Hubbard.

Electronic Funds Transfer (EFT) offers a host of benefits to both your business and your customers. Accepting payments electronically allows your customers to avoid using credit cards by having the funds directly debited from their bank accounts. In addition to the convenience this provides your customers, electronic funds transfer also saves your company money by eliminating the high fees associated with credit card transactions and replacing them with a much lower per-transaction fee.

Electronic funds transfer also has several advantages over accepting paper checks. You’ll receive the funds much more quickly and save time and money over processing paper checks.

Electronic billing is also a great tool for recurring payments. If you charge your customers on a regular basis, electronic funds transfer deducts the funds from their accounts automatically. This will save your business the time and costs associated with sending and processing bills.

You can set your business up with easy-to-use software and services for electronic transfers. You can accept electronic payments online, by phone, or by fax. You simply need to get the customer’s bank routing number, account number, and authorization for each transaction. You then submit this information each day through the network, and the funds appear in your account within 48 hours.

Banks can provide your company with a customized package that allows you to integrate electronic payment services into your existing payment processes. In addition to accepting electronic payments from customers, electronic funds transfer also allows you to pay employees and suppliers electronically with direct deposit.

Here’s a simple question-what is trading? To answer, perhaps not so simply, we first need to understand what trading is NOT. Trading isn’t about buying the fanciest chart, hanging on to something because it is a good buy, or feeling good about yourself because you can go to a cocktail party and relate to what everyone else is saying. Trading is about making money.

There are software systems that create pretty colors and tell you which stocks are safe to buy because they have moved a certain way in the past. If one particular stock has been going up and up and up, a trend follower concludes that the stock should continue moving UP! However, in order to follow a stock’s true potential progress, would you rather wait for a computer program, or be actively and directly involved in its ascent?

Picture an apple in the center of a room, surrounded by 10 traders. Consider for a moment, each trader buying the apple until everyone has owned it. What is that apple worth? It is worth ONLY what someone will pay for it. Person #1 buys the apple for $1 and takes a bite. Person #2 then pays $2 for the same apple and takes another bite. Person #3 pays $3, and so on until finally, the last person takes that final bite. Yes, the apple is STILL worth only what the next person will pay for it-no more, and certainly no less. The only person left to sell it to is the one who walked into the room an hour late, looks at the apple’s past price history, consults his software that says the smelly apple has had a great price performance, and determines that it’s a worthwhile buy. That is precisely the definition of trend trading.

Make no mistake, successful trading is about you versus the guy sitting next to you with the pretty software. Don’t waste your time trading with charts, spend your time leaning how the stock markets really work.

If you are like most people, you do not feel that you “deserve money”. The simple fact is that most people are broke. Most people are broke because they do not feel that they deserve money.

To be financially successful you must: save prodigiously, invest wisely, and act like an entrepreneur. If you don’t believe you are capable of financial success, figure out why.

OK, maybe now you are thinking, “I deserve money…right?” Well, here is the thing, if you have the thought that “It takes money to make money”, or “The rich get richer and the poor get poorer”, or “Money is the root to all evil”, then you do not deserve money…well, maybe not yet, but there is hope for you.

There are two sides to every coin, people can look at money as good or bad and often at times people look at money as bad to justify why they do not have any. I dont know, maybe someone with money or someone that was thinking of making money was with someone that did not have any and did not have any plans to make any. What they thought about having lots of money and they gave off one of the lame excuses as suggested in the previous paragraph.

Why do you deserve money? The answer is simple…because you deserve money! Look, making money is simply the result of exchanging your efforts or ideas for money.

There are a many ways to make a million dollars and most of them are quite fun ways to make money and thats the key! If you are willing to learn how to have fun, make money and teach others to do the same, then it should end up being easy to make the money for you.

Start with this; how much money would you like to have, then ask yourself how much money do I currently deserve doing what I am doing now? If the answer is not 10-20 times more, then you are not doing the right thing to attain the amount that you would like to have. Time to change…

Change…is the word “change” scary to you? If it is, then you do not deserve money! Broke people are afraid of change. Change is natural and should be embraced by everyone. If we do not embrace change in our life then we are accepting where we are and probably will stay where we are. If you are happy with what you are making and like where you work, then go out and buy your boss a gift basket, sit down, be quiet and stop complaining about your finances.