Should I Be Buying Stocks On Margin ?

By Richard Moran

You can use someone else's money to leverage your capital for stock purchases. That is buying on margin and is the same as buying other things on credit. The difference comes to the control you have over your investment - with the stock market you are at the whims of the day-to-day market fluctuations. Many of the recent financial problems drove the market down and therefore lost money for those who held their stock on margin. These circumstances left many stocks at all time slows.

Just Pay For the Stock You Buy

When you initially open a brokerage account most stock firms will make you pay for your initial purchase. Most require a minimum equity of $2000 before they will even discuss any margin purchases. Remember unless you are paying cash there will be interest charges due on any stock you buy on margin. Therefore, in order to make a profit not only does the stock have to go up in value enough to cover your investment and the firms charges, but you will also have to cover the interest you have paid over the time you have owned the shares. Most times unless you are a market maven you will come out way ahead using cash to purchase your stock.

Buying on Margin

When you buy stocks on margin, you are requesting a loan for the money to purchase those stocks. In return for the loan from the brokerage firm, you will pay interest on that loan. The brokerage firm is virtually making money on your loan and will hold your stocks as collateral against the loan. If you do not pay the firm back, they sell the stocks. In short they have little risk involved in loaning you the money for the stocks. On the other hand, you have to see to it that the stocks you select make enough in profits to not only put money in your pocket but to pay the loan back to the brokerage firm.

Knowing the Stocks you Buy

One way of ensuring you can pay back the loan on your investments is to know your stocks. You should study your stocks before making a purchase. It is important to know how they have been effected by other aspects of the market, how often they drop, how long they remain on a rise and what the average rise for them is. By studying the stocks you want to invest in, you may find that you dont need to borrow money in order to invest.

Margin/Cash - so which is the best way?

It comes down to your mindset when it comes to risk. If you will get ulcers worrying about the money you owe on margin it might be a good idea to stay out of the market all together, or buy mutual funds and let someone else worry about the return. Paying cash leaves you in a more flexible position while the margin gives you greater potential. The most important thing is to do your research and invest with your head not your heart. - 23167

About the Author:

Richard Moran is a Financial Consultant and maven for Money Helpers. The Blog contains hundreds of articles, charts, and calculators to assist you in your financial health. All the aspects of the Blog are free and it is updated on an almost daily basis. If you are searching for any financial information or products they can be found on Money Helpers.

Foreign Exchange Trading Made Easy

By John Eather

What is foreign exchange trading exactly?- The foreign exchange market is employed for foreign exchange trading, where one currency is traded in for another. The forex market is the biggest, most liquid and lucrative market in the world with trades reaching US1.5 trillion dollar being conducted on the market every day. The market is open through the day, night and year. Not a single day or minute goes without trades being conducted. Large corporations, financial institutions, individuals and speculators are the major players in the market. Daily volumes consist of government and commercial currency conversion as well as speculations and trading.

Pro's- The pro's to foreign exchange trading are incredible including immense liquidity, non-stop trading due to overlapping trade sessions, traders can take advantage of market, economical and political events by imminently trading in accordance, very low transaction cost and margin trade opportunities.

Risk- As with anything in life, great reward comes with great risk and it's no different with foreign exchange trading. It is important for you to understand that there is a very real risk of losing both your initial investment and any profits made. It's imperative to learn as much as you possible can on market tricks, tips and pitfalls before attempting trade. Avoid trading and the market as a whole if you feel unsure or uneasy. Great online course on foreign exchange investments are available.

Different forex rates- Foreign exchange is usually traded on the spot rate. This means that trades are completed on the spot rate and settled within 2 working days. However in rare instances the positions can remain open, rolls over and expires on the closest settlement day. The rate at which trade occurs is known as next rate.

Quoting- Quoting refers to the bid and asking price for the currency pair. The bid price is usually on left hand side and asking price on the right hand when indicated. - 23167

About the Author:

Looking to find the best deal on foreign exchange trading, then visit www.MoneyMakingFxTrader.com to find the best advice on automated forex trading for you.

Forex & Other Markets (Part II)

By Ahmad Hassam

Take oil as an inflation input and a limiting factor on the overall economic growth. The higher the price of oil, the higher the inflation would be and the slower the economic growth is going to become. The lower the prices of oil, the lower the inflationary pressures are going to become but this is not always true.

We would like to factor changes in the prices of oil into our inflation and growth expectations and then draw conclusions about the course of US Dollar from them. Above all, oil is just one input among many.

Stocks: You must have invested in stocks sometimes back. Many people invest in stocks. Buy and hold is the best strategy that has been followed over the years by the stock investor. Almost everyone is familiar with stocks and the stock markets. You can take stocks as microeconomic securities rising and falling in response to individual corporate results and prospects. Stocks are units of ownership rights that get traded on the stock exchanges.

On the other hand, currencies are essentially macroeconomic securities fluctuating in response to wider ranging economic and political developments. As such there is no intuitive reason that stock market should be related to the forex market.

Long term correlation studies bear this out. Major USD currency pairs and the US equity markets over the last five years have almost zero correlation coefficients. However, the two markets occasionally intersect.

The response of the two markets to different economic news may be different and some cases exactly opposite. The US stock market may drop on an unexpected hike in the US interest rates while USD may rally on the surprise move. For example, when equity market volatility reaches extraordinary levels lie when S&P 500 Index loses 2% in a single day, USD may experience more pressure than it otherwise would have. But there is no guarantee of that.

Bonds: When interest rates are on the rise, at some point, doing business becomes difficult, and when interest rates fall, eventually economic growth is energized. The bond market rules the world. Everything that anyone does in the financial markets anymore is built upon interest-rate analysis.

That relationship between rising and falling interest rates makes the markets in interest rate futures, Eurodollars, and Treasuries (bills, notes, and bonds) important for all consumers, speculators, economists, bureaucrats, and politicians.

How can you anticipate the interest rate changes in the market? By following the bonds market! Ten-year T-note yields are the key for setting long-term mortgage rates. By watching this interest rate, you can pinpoint the best entry times for re-mortgaging, relocating, or buying rental property, and you can keep tabs on whether your broker is quoting you a good rate. Both the bond market as well as the forex market reacts to interest rate changes and inflation. Bond or fixed income markets have a more intuitive relationship with the forex markets as both are heavily influenced by the interest rate expectations. However, the short term supply and demand fluctuations interrupt most attempts to establish a viable link between the two markets on a short term basis.

Just about every country in the world with a convertible currency has some kind of bond or bond futures contract that trades on an exchange somewhere around the world. Sometimes, the bond markets more accurately reflect the changes in interest rate expectations with the forex market doing the catch up. At other times, the forex markets react first and fastest to the shifts in the interest rate expectations.

Changes in the relative interest rates exert a major influence on forex markets. As a forex trader, you definitely need to keep an eye on the yields of the benchmark government bonds of the major currency countries to better monitor the expectations of the interest rate market. - 23167

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Develop Your Own Forex Trading System!

Currency Trading Sessions

By Ahmad Hassam

The financial centers active during the Asia Pacific session are Wellington, Sydney, Tokyo, Hong Kong and Singapore. The currency pairs traded are USD/JPY, EUR/JPY and AUD/JPY. Currency trading volumes in the Asia Pacific session account for about 21% of the total daily global volume.

News and data reports from Australia, New Zealand and Japan are going to be hitting the market during the session. In terms of the move actively traded currency pairs during the Asia Pacific trading session this news and data affects their price action.

Because of the size of the Japanese market and the importance of Japanese data to the market much of the action during this session is focused on the Japanese Yen currency pairs. The Japanese financial centers are most active during this session so you can get a sense of what the Japanese market is doing based on price movements.

About midway through the Asian trading day, European financial centers begin to open up and the market gets to its full swing. European financial centers and London represent over 50% of the total global trading volume.

The European session overlaps with half of the Asian trading day and half of the North American trading day which means that the market interest and liquidity is at its peak during the European session.

London is the global forex center with the highest volume of foreign exchange transactions. As a result some of the biggest moves and the most active trading takes place in the European currencies (EUR, GBP and CHF) and the euro cross currency pairs (EUR/CHF and EUR/GBP).

The trading volumes are much bigger in the European Session because of the overlap between the North American and European trading sessions. Some of the biggest and most meaningful directional price movements take place during this crossover period.

The most important financial markets in North America and US are located at New York and Chicago. The North American Session basically comprises New York and Chicago as financial centers. The North American trading session accounts for roughly the same share of the global trading volume as the Asia Pacific market, or about 22% of the daily global trading volume.

The North American morning is when US key economic data are released and the forex market makes many of its significant decisions on the value of USD. Most US data reports are released around 8:30 AM EST with others coming out later at around 9 AM and 10:00 AM EST.

Canadian economic data reports are also released between 7 and 9 AM EST. There are some US economic reports that come out at noon or at 2:00 PM EST livening up the New York afternoon market.

The London or European close can bring volatile flurries of activity. London and European financial centers begin to wind down their daily trading operations around noon eastern time each day.

On most trading days, market liquidity and interest falls off significantly in the New York afternoon this can make for challenging trading conditions. On quiet days, the generally lower market interest typically leads to stagnating price action. - 23167

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Know Forex Rebellion!

Reduce Foreclosure Risk ? Hire a Structural Engineer

By Mary Smith

Structural engineers are an important resource for those who wish to buy foreclosed property with confidence. Homes in foreclosure often have maintenance and repair problems that have been neglected for years. In some cases the problems have become severe and threaten the entire structure. These problems may be visible and obvious or they may be hidden and show very few clues.

Sellers in Florida are obligated to disclose problems that are not obvious, especially if they could affect the value of the property. Foreclosed homes however, are usually owned by a bank. Banks don?t usually visit these homes, so they have no knowledge of such problems. As a result they sell the properties ?as is.? In such cases home inspectors and structural engineers can help.

Structural engineers have a thorough understanding of what makes a structure stable and what problems could undermine that stability. They will perform a thorough examination of the walls, beams, floors, foundation and other components of the structure to find any evidence of deterioration or deformation that might affect the structure.

What?s the difference between a structural engineer and a professional home inspector? A home inspector is qualified to carefully examine a home and the systems it contains, such as electrical, plumbing, etc. Their job is to describe what is visible. Only a structural engineer is qualified to diagnose a structural problem, and recommend solutions.

Home inspectors reduce the risks associated with buying a home. Foreclosed homes can be an even greater risk, and most savvy buyers would not consider such a purchase without a professional inspection. Inspections can detect potentially expensive problems that might have gone undetected. Knowledge of these issues will allow the negotiation needed to cover the extra costs.

Always inspect any potential purchase carefully. Inspect both the property and structure. Look for defects such as walls that lean, floors that slope, doors and windows that bind, cracks in the foundation or walls or a porch that slopes toward the house. These may be symptoms of deeper problems. You will need the opinion of a structural engineer to understand the scope and severity involved.

The purchase of a foreclosed home should not be a high risk venture. Many of the risks involved can be understood and averted with the help of a professional home inspector and a structural engineer. These experts are highly trained and independent and can offer you the peace of mind you need to purchase a home or to make a safe investment, - 23167

About the Author:

From light commercial building design to large construction projects, Florida Engineering Solutions can design and support your project from beginning to end. Our professional structural engineers understand the high cost of construction and offer quick turnaround to meet tight deadlines. Contact FES when you need a structural engineering firm for your next project. Mary Smith is a freelance writer.