Saturday 2 November 2013
Invest Like a Rebel
If you want to build wealth by investing in stocks it pays to know something that others do not know. Accomplishing this is deeply related to investing in an unconventional way, or investing like a rebel.
First there is the basic principal. The majority of people are not interested in stocks yet most of those people would agree that they could use a few extra bucks. The basic principal of knowing what others do not relates to your interest in stocks and the recognition that investing in them can be financially beneficial. That realization is important because a lot of people don't make that connection and will never buy a stock. Simply knowing this and acting on it puts you ahead of the wealth building curve and solidifies your unconventional nature.
The basic principal of knowing what others do not refers to an advantage in knowledge versus the general populous. However, to be a successful investor you must evolve to know something that most other investors do not know. This proves to be more difficult. In my experience, you can gain a considerable investing advantage when you get to know something that most other investors do not know. To me, if you can't find an advantage in stocks it's best to just buy an index fund.
Gaining an edge in stocks is deeply rooted in being unconventional and investing like a rebel - and most investors do not know this. Generally, investors are comfortable staying with large well known blue chip stocks, and sticking to conventional wisdoms like 'you must diversify' and 'no more than 5% of the portfolio in one holding'. It makes sense that if you invest like everyone else, you'll probably end up underperforming the index, just like most professional mutual fund managers. So the goal is to avoid the common methods of the masses of underperforming mutual funds. As a do it yourself investor you can enjoy freedoms that fund managers do not have. There is no need to worry about a director or manager criticising your every move. It's easier to invest outside the box and adopt a rebel mentality.
In my opinion, rebel investing means exclusively sticking to small and medium sized stocks as opposed to the big dinosaurs the funds own. It means not diversifying in sectors you don't understand - personally I avoid mining and oil and gas stocks all together. It means not benchmarking or following any allocation rules - feel free to have 25% or more of your portfolio in one stock. It means sticking to underfollowed, simple, easy, growing businesses at a fair price and avoiding the widely known stocks that are constantly covered in the media. It means having the temperament and conviction to let your winners run.
Whatever rebel investing means to you, it always helps to have a solid foundation. Learning from the past great investors is the best way to develop the basics. I recommend Peter Lynch, Warren Buffet, Ben Graham and Ken Fisher. Also a must read is Reminiscences of a Stock Operator. In my experience, a basic investment foundation paired with an unconventional investment method is a framework for outperforming in stocks.
John Laframboise is founder and author of, a personal finance Blog that follows his progress to become a millionaire. John has held positions within the Canadian banking industry and has a Bachelor of Commerce from the University of Windsor in Canada.
Saturday 28 September 2013
Investing in Silver: Why, How and Tips
Silver is definitely a hot commodity today. There is an increasing trend in its intrinsic value making it a great investment. If you are looking for another way to invest your money, consider this precious metal. By adding this into your portfolio of bonds, stock, and mutual funds, you are introducing a tangible asset making your portfolio more diverse and helps protect it against fluctuations in value of just one asset. Here are other reasons why investing in silver are a great idea:
- Economics of precious metals - the economic forces that increase or decrease the value of silver is very different from those that affect other financial assets. Therefore, a decline in value of one of your assets will not affect the value of your silver because it works in a different economy. The independent movement of value of such precious metals over your other financial assets decreases the overall volatility of your portfolio helping promote balance.
- Declining value of dollar - the value of US dollar has consistently declined over the past years and is foreseen by some to continue to do so in the coming years. But even if this occurs, silver is said to have "hedge over inflation" ability. To state as an example, in the years 1971-1981, the value of US dollar declined more than half but at the same time the value of silver increased by over 5 times. This means that while economies fluctuate, recess, and expand, precious metals are not affected and can therefore help lower the risks of your investment portfolio.
- Importance in allocation of assets - no matter what type of investor you are, precious metals like this should have an important part in the allocation of your assets. Experts even suggest that 10-15% of your portfolio be dedicated to precious metals to have a secure foundation no matter how great or poor the economy is.
- Ownership with ease - there is convenience and ease with investing in silver bullions. There is always that sense of security when you actually have that physical and tangible silver bullion within your hands. You know you are secured no matter what because you can easily buy and sell your bullions and earn a good amount of money any time.
- Inexpensive investment - unlike many other investments, silver investing is definitely more affordable. It is more affordable than gold and it is often more affordable than buying stocks or bonds. But the great thing about this is that according to spot silver chart, silver's value is continuously increasing. Therefore, you may buy silver today at an affordable price and be able to sell it in the future for double, triple, quadruple the price.
- High demand in industries - silver among all the other precious metals is more in demand for industrial purposes which affects its value. It is used in imaging, jewelry, electronics, water purification, conductivity, and even in making coins. Hence, silver today is not only known as a precious metal or a piece of artwork. It is already all of these making it highly valuable in the market today.
How to Invest in Silver
Now that you know various reasons why you would want to invest in silver, listed below is how you do the investment properly.
Now that you know various reasons why you would want to invest in silver, listed below is how you do the investment properly.
- Education - it is very important that you educate yourself about the spot price of silver. Check out the silver spot chart regularly to check the trends and value of silver. You can easily find this online so you know that daily value of pure silver per troy ounce on a daily basis. The spot price fluctuates by the minute so checking it every now and then can be a good idea.
- Start shopping - online retailers and local shops usually have great silver items selections. Here you can find bullions or bars which are a great investment piece as they are pure silver - no alloys were mixed yet. Look for the.999 stamp on the silver item you are thinking of purchasing to guarantee its authenticity. The.999 stamp signifies that it is made of 99.9% pure silver.
- Look for rare items - the rarer your silver items are the more precious they become. This is why educating you about silver beforehand is considered necessary. This allows you to know what rare silver items there are, so when you start shopping you know what to look for. There are many rare silver coins out there which have the best value. For US coins, look for ones that were produced in 1964 and in earlier years. For Canada coins, look for ones that were produced in 1967 and earlier. For UK coins, look for ones that were produced in 1946 and earlier.
- Invest in stocks - if you do not want the hassle of buying and owning silver items, investing in silver stocks is an option you can take. This is called exchange-traded funds that allow you to own stocks of silver without ever owning the physical silver items.
Tips for Investing
Here are a few helpful tips to invest in silver:
Here are a few helpful tips to invest in silver:
- Always read the great silver spot chart so you are constantly updated to trends and current values of silver. Remember, the spot price of silver changes every minute so if you are serious about making an investment in silver, doing this can definitely help you.
- It may also be helpful to look on the history of the silver market and previous prices. This will help you create generalizations about the trend and forecast where the market is headed.
- When buying coins, make sure the price given to you is close to the spot price. It can be more than or less than but make sure they stay close to it.
- If you want to invest in exchange-traded funds instead, use the help of an online stock brokerage to minimize costs.
Silver is truly a great investment piece and helps create balance in your investment portfolio. So consider investing in this and you will certainly see a growth in your assets in the future.
The author has put together information for the novice to the knowledgeable silver investor.
Information is constantly being updated due to silver's volatility to keep you informed. Visit and bookmark.
Information is constantly being updated due to silver's volatility to keep you informed. Visit and bookmark.
Monday 12 August 2013
Why You Should Buy Silver Now Before the Price Goes Crazy High
"What's that you say? You're going to buy silver?" my friend of over 20 years replied, looking at me as if I were about to club her over the head and throw her in the back of my van. Actually, the verbal exchange wasn't exactly like that, but she did give me an odd look (and just for the record, we own a minivan with lots of windows and very comfortable seating). Think about it for a second, dear reader... if I were standing in front of you right now telling you that I was going to buy silver, how would you respond? First of all, you would certainly wonder who this stranger is and why is he talking to me about silver. Granted, but let's try to focus on the silver part, friend...
Do you know what the price of silver has done over the last 15 years or so? It went from around $4 an ounce in the very late '90s to almost $50 an ounce in 2011. That's quite a hefty return, no? And I can tell you that was only the beginning. "So what has silver done for you lately?" You ask. Well, it's kind of gone down a little. How "little?" Well, it's gone from about $50 to its current price of $19 or so. Alright, close your mouth. You can stop giggling too. I know it might sound crazy when I tell you that now is the perfect time to buy silver. Why? Simple - because the price has fallen from $50 to $19! Here's a little tip for ya' - Buy low; sell high? Heard that one already? Well, price is low, so it's time to buy. Could price go lower? Sure it could, possibly a buck or two, but odds are that the bottom is in for this correction and soon prices are going to start going up again. How high will they go? Well, there is plenty of talk these days of silver going to $60, $100, even $200 per ounce; and if our government and the Federal Reserve keep printing $118,000,000 an hour (that's right, per hour - they are creating $85 billion a month!) we might even might even see silver hit four figures before its all over.
Why is silver going to go up?
I am not a fortune teller, friends, nor I am not a financial advisor (who is basically a fortune teller in a suit, no?) I am not a silver salesman either. I am merely a husband and a father looking around at this world of ours; at the shaky governments and economies; at the bail outs and imminent bail ins; at the real inflation around us (not the inflation rate that the government tells us); at the incessant printing of dollars and euros and most all currencies world-wide, and I know that we cannot continue like this. There are some rough times a' comin' and when there is instability, people seek stability and security. In financial-speak, that means precious metals - silver and gold. The time is now to purchase your security in the form of silver and ride the wave of higher and higher prices to come.
This is obviously a light-hearted look at a serious topic, and there is much, much more to the story. Though what I am saying here is not to be construed as investment advice and should not be followed as such, I strongly encourage everyone to do some research, and learn more about the silver story.
Your author, Joe (Silverheels) Paulson, has been following and investing in the precious metals market for over 30 years (!) now.
Monday 22 July 2013
6 Tips On How To Choose The Best Binary Options Platform
Binary Options is one of the easiest ways to make money on the financial market. Its popularity lies in the fact that is accessible online, and an investor doesn't need to be highly skilled or experienced. At the same time, the investor does need to follow some basic strategies to make a profit. There are several online binary options trading platforms, or brokers, which can help traders do just that, but sometimes the sheer number can overwhelm the trader. When choosing one, the trader should ensure that it is financially stable, reliable and reputable. Here are some tips on how to choose the binary options platform that best suits the trader:
1. The trader should make sure the binary options platform they choose offers returns of at least 65-70 percent. The advantage of trading in binary options is that the payments are fixed so the trader knows what they will gain or lose even before the time frame expires. To earn a profit the investor needs to be "in the money" by at least 0.001. Being 'in the money' means the difference in the value of the asset and the strike price of the call option is in favor of the trader.
2. Look for a platform that offers a return even for 'out of the money' results. It is disappointing to lose money, so a trader should look for a platform that offers some sort of payment even for negative outcomes. There not many that do so but some of the platforms that do, offer up to 15 percent return on "out of the money" results.
3. Traders and investors should make sure that the platform they choose offers a variety of assets. Traders can now easily keep up with the movement of assets via the internet, business news channels and the papers. So a platform that offers a great selection of assets gives the trader better opportunities to make a profit.
4. Binary options platforms will charge some sort of a 'joining' fee, but the trader needs to careful of sites with hidden costs on other services which may pop up after they have started using the platform. So investors should make sure to inquire about all fees and additional costs before joining. Reputed platforms will have a page dedicated to this on their website.
5. It is very important that the binary options platform has good security measures in place. With such a lot of money being moved, traders should make sure to check out what kind of security measures and encryption the site uses to guard against online theft.
6. Traders also need look for platforms that have good customer support in place. Whether new or experienced at online trading, an investor might sometimes need technical or other assistance, so there should be a good customer support service to advise and help clients when required.
The binary options platform used by traders will be the difference between how successful they are or not. The above tips can help traders and investors choose the platform best suited for their needs.
Tuesday 25 June 2013
Monday 24 June 2013
5 Steps to Being a Happy Goldbug
1. Ignore the mainstream media
As gold fell this appeared on Reuters courtesy of Felix Salmon: "It's important that goldbugs are seen to not only have silly beliefs, but also to have lost a substantial amount of money. Gold is a fear trade rather than a greed trade - it's defensive, and defensive investors are always particularly loss-averse. If you lose money betting on high-flying tech stocks, that's much more likely to be money you can afford to lose than if you lose money after putting your life savings into precious metals."
The mainstream media mob have a three-pronged pitch fork especially for attacks on gold, which they regularly like to wield about.
The first prong is the intelligence insult prong, which was recently used by Paul Krugman who wrote back in April that he hopes 'the gold price crash will finally bring intellectual capitulation.' Implying that those of you who have invested in gold went into the process completely blind and misinformed.
The second prong is that gold is in a bubble and the bubble has now burst. much to their delight. Gold was clearly never in a bubble. A bubbles requires mass participation and enthusiasm for an asset, combined with the use of lots of leverage. Gold does not fit this bill - only representing 1% of global financial assets and seldom held with leverage.
The third prong claims gold is only a fear trade and that the recent fall in the gold price shows investors are now feeling more confident about the economy and feel more wary about gold. Iza Kaminska recently wrote in the FT that it is becoming 'ever harder to justify a role for gold' given that the commodity landscape has now been reset.
2. Don't listen to predictions
Speaking of the media, no-one loves a price prediction like they do. But the gold price is rarely what gold investment is all about.
Those who invest in gold, rarely do it because they see the price hitting $10,000 an ounce, but rather because they see central banks and governments making poor economic decisions which will drive the value of sovereign currencies down and therefore the gold price to new highs.
Full-time gold commentators, who have a fully vested interest in gold rarely review or amend their predictions. Few place timescales on what will happen to the gold price. Jim Sinclair who recently predicted prices of $3,500 gave no timescale of when this would happen, instead looking at debt levels and ensuing currency wars which will make way for the gold price to fly.
But of course we don't hear about legends', such as Mr Sinclair, predictions instead we hear about those from the likes of Goldman Sachs who right before the recent gold crash told clients to short gold.
Similar institutions continue to adjust, amend and scrap their gold price predictions according to short-medium term developments in the market such as stock market performances and employment numbers. They rarely regard the impact of long-term monetary easing on the confidence of those with cash in the bank. Hence why gold price predictions from high-finance are so often wrong.
3. Watch the fundamentals
What are the fundamentals? They're the same ones that the mainstream media ignore. So when financial journalists are decrying the end of gold because of strong performance in the stock market or the dollar's strength, a happy goldbug checks behind the curtain to make sure the banks are still printing money, negative interest rates haven't been amended, central banks continue to buy gold etc.
To help you keep an eye on the fundamentals, ask yourself the following questions:
Has confidence returned to the financial and monetary systems?
Are there more or less EU countries heading for financial difficulties?
Is the Fed still pumping money and do they have a solution on repaying their debt?
Are central banks still printing money and devaluing currencies?
Is easy monetary policy likely to continue?
Are real interest rates positive?
Are central banks still buying gold?
Are individuals across the world still buying gold?
Are there more or less EU countries heading for financial difficulties?
Is the Fed still pumping money and do they have a solution on repaying their debt?
Are central banks still printing money and devaluing currencies?
Is easy monetary policy likely to continue?
Are real interest rates positive?
Are central banks still buying gold?
Are individuals across the world still buying gold?
4. Don't speculate but instead preserve wealth
Gold bugs do not invest in gold if they're looking to play the market, make a quick profit and take a bit of a gamble. Those looking to own gold do so as it is money which will holds its value in the future.
The unique properties of physical gold mean that it will never be completely valueless. Those who have been speculating are those who have felt the pain of the gold price drop (and are the cause of it) but those who have hung onto their physical gold have felt neither pain nor jubilation. The amount of gold in their possession has not diminished, it is only those who speculate on paper gold who would question its price.
The drive in gold prices in the last decade will be supported by the physical gold buying and hoarding which has taken place. Speculating with gold suggests that investors buy gold in the hope of being able to sell it for much more paper currency than the amount that originally bought it. Those who preserve their wealth in gold do not hope to buy more paper, they have opted for a different (superior?) currency.
5. Ignore the price
This is something we talk about a lot on the Research Desk. When we discuss the gold price this is not the same as the value of gold. This, as we said above, remains the same.
However when we talk about the price of gold, we should instead be thinking about currencies priced in gold. You don't even need to work it out to know that when priced in gold, currencies have plummeted in price. This week the Bank of England advisor, Charlie Bean reported that the value of the British Pound, against other currencies has fallen by 25% in the last five years. Against gold the British pound has fallen by over 90%, other major currencies have had a similar experience.
So whilst the price of gold in US dollars, British Pounds and the Indian Rupee, to name a few, has fallen slightly in the last month this is nothing in comparison to the fall of the sovereign currencies' value against gold.
5 simple steps...
So rather than fretting about the gold price as bemoaned by the mainstream media, don't look at short-term predictions, they're short-sighted and rarely look at the fundamentals. The same fundamentals which affect the value of currencies, and not the value of gold.
Gold bullion is a unique savings vehicle and possibly the most divisive asset in finance. As such, there is a never ending media circus around the gold market which can be distracting and stop people buying gold for the wrong reasons.
We hope these 5 key points help you find clarity amidst the talking heads' sound bites, Western central bank propaganda and general misinformation.
Sunday 23 June 2013
Basic Investing 101: The Strategy Every Investor Should Know
I'd say the first thing to learn if you want to start investing is dollar cost averaging. This means investing the same amount for a certain period of time, such as a month, several months, or a year. As an example, pretend you invested $100 a month. By investing the same amount every month, you are not jumping in and out of investments at the worst time.
In effect you are preventing your investing plan from trying to time the market, thus saving yourself from the losses associated with trying to time the market. Dollar cost averaging forces you to buy more when a stock is low and buy less when it is high.
The truth is that the market is unpredictable and no one can truly determine when it's at a peak of or is about to shoot back up. This is the same with any stock. Because of this, we can deduce that the market is volatile and constantly moving upwards or downward. The only way to profit from such an environment is to be invested long term, ready to ride out the rough patches in order to reap benefits later.
A strategy constantly jumping in and out of the market will not be profitable, and can't be relied on consistently. By implementing Dollar Cost Averaging, you are always adding to your investing plan and letting your investments compound instead of pulling them out prematurely. However, you are resisting paying too much because you have set a consistent number for every month. So if the market is near the top, you are buying less shares. But as the market drops and nears the bottom, that same dollar amount is able to get you more shares for the money.
For example, let's say you are investing $100 a month. When a stock is at $10 a share you are buying 10 shares. Now if the stock is up to $50 after a month, you are only buying 2 shares because you are forcing yourself to invest the same amount. If the price is down to $5, you can buy 20 shares. See how we are buying low and selling high, instead of trying to buy all at once and regretting selling too early or buying too late.
Dollar cost averaging is a great place to start, for ANY investing plan. I hope you can see just some of the benefits of such a strategy, as I've laid out here. I wish you the best in your path to investment education.
Saturday 8 June 2013
Investing in Stock Options
Most investors would buy stocks that they think will give have a higher price in the future especially for those who are into long-term investment plans. However, there are some investors who look into making profit within shorter time duration. They can invest in stock options which will allow them to make use of the capital that in a better way. Option investing involves some key features namely leverage, protection and also volatility trading. Traders who understand these elements may be able to succeed in their stock option trading activities.
Through leverage, traders are able to control a bigger volume of equity as they only need to have a certain percentage of the entire capital that is needed. They are able to speculate on the prices of the stocks on a given period of time. Traders can make use of the long call option strategy if they project that the future price of the underlying security will increase above the strike price before the expiration date. There may be no limit when it comes to the price of the stocks at expiration date. Hence, traders can attain good profits if they choose to make use of this strategy.
Stock options may also provide protection to traders through the insurance that they can include in their trading plans. They can make use of protective put options to serve as a hedging strategy in case the market turns against them. Traders can use this strategy to protect their investments from uncertainties before the expiration date and while they are still trading in a bullish market. They may also be able to protect their potential profits on the shares that they have previously purchased as well. Traders who employ this strategy may also be able to realize unlimited profit just like the long call option strategy.
Traders can also take advantage of the market whichever way the trend is moving. They can make profit through volatility trading. Traders for example can buy a put and a call option simultaneously on a certain underlying stock that has the same strike price and the same expiration date. This strategy is known as the long straddle and it reduces the amount of risk that the traders are getting into. Traders can gain profit through the volatility of the underlying stocks or securities over the time frame specified. These are some of the strategies that traders can make use of if they would like to limit their risks while they increase their chances of gaining profit from their investments in stock options.
There are many ways to trade futures options. Commodity option trading can use different techniques that combine commodity options together to trade with little risk. Professional traders always think about limiting their risk. Whether you trade options or not, you should always set loss limits.
Sunday 19 May 2013
Effects of a Yen Free Fall
The Japanese economy has been on life support since their stock market peaked in late 1989. This is also when they began to lose their productivity gains in manufacturing and technology against their neighbors. Their immigration policy and small family sizes have shrunken the labor pool to a point that even with consistent per capita GDP growth, they continue to fall behind fiscally. Their new Prime Minister, Shinzo Abe is attacking deflation in Japan in a way that makes Ben Bernanke look like a spendthrift. The obvious objective of deflating the currency is to make Japanese exports cheaper on the open market. This will grow GDP and spur new hiring thus, improving the domestic Japanese economy. The big questions are, how long can currency depreciation boost their economy, what are the side effects and lastly, will it work?
Japan is an interesting country in that they are a manufacturing country with very little in the way of raw materials or commodities to use in the production process. Therefore, Japan must import virtually, all of the raw materials they use. They're becoming a high tech assembly country as opposed to their classic vertical production model. Their days of making the steel that goes into the car is over and so are many of the old jobs. It has become cheaper to import Chinese steel than to make it their selves. Currency depreciation will provide an initial rise in Japanese exports, as the inventory that has already been produced will be cheaper on the open market. However, these gains will be offset by newly purchased production inputs paid for in depreciated Yen.
The export market has been the key to Japan's post WW2 growth. In fact, Japan's balance of trade (exports-imports) had been mostly positive for 25 years before the tsunami hit in March of 2011. Prior to the Tsunami, Japan generated about 30% of its energy from nuclear power. They are currently running only 3 nuclear reactors out of 54. Manufacturing countries require large energy inputs and Japan uses more than 25% of their gross revenues to import energy and they are third in global crude oil consumption and imports. Depreciating the Yen will severely impact their energy costs. For example, the Yen has declined by 30% since November. That would be the equivalent of paying around $5.00 per gallon of gasoline, right now. This is what Japan will be paying to fuel their manufacturing centers.
This leads us to the effects of a depreciating currency on the local population. The Japanese private citizens are the ones bearing the brunt of this policy in two ways. First of all, Japanese citizens will be forced to pay more for everything that isn't locally sourced and produced. This will trim their discretionary spending and put a crimp in local small businesses and service providers. Getting less for your money is never enjoyable. Secondly, the individual Japanese citizens are paying for the currency depreciation because the there is no international market for Japanese bonds selling at artificially low rates. The Japanese government is forcing their citizens with historically high savings to use it to buy underpriced Japanese Government Bonds. This transfers the debt from the government to the taxpayer.
I have no idea why the Japanese people haven't revolted. I'm sure much of it has to do with culture. We tend to speak out in protest while they tend to tow the party line. It will be very interesting to see how this turns out as pensions go unfunded and taxes rise to pay for the massive social programs Prime Minister Abe has in store. Japan's total debt (public + private) is now more than 500% of GDP according to The Economist (9/19/2012). The U.S. total debt to GDP ratio ranks 7th in the world at just under 300%.
The massive devaluation that is taking place will allow Japan to gain market share in the short term, especially against high quality German manufacturers. Continuation of this policy will put the European Union in a very uncomfortable spot. Germany is their economic leader and the country that would be hurt most in a competitive devaluation campaign. This may finally force the European Union to ease further in an attempt to remain competitive outside the Euro Zone. Easing euro Zone monetary policy may be the next link in the chain as the race to the currency bottom heats up. Finally, the pundits have coined a new phrase to help the guy on the street differentiate currency wars from fiscal policy. Welcome to, "coordinated global easing."
Andy Waldock
Saturday 11 May 2013
10 Market Estimates For 2013
In our last article we evaluated market estimates and predictions from 2012. As discussed in that article, attempting to forecast the direction of shares, currencies and interest rates is very difficult to do, especially with any accuracy or consistency. However, foretelling the future is a useful exercise for investment advisers and strategists, to create discussion and encourage some debate and thought.
On that note, how will the market perform in 2013 and what sort of themes should investors be thinking about? Here are ten predictions for the year ahead:
1. Returns from shares again beat fixed income and residential property
Shares were the best place to invest in 2012, and we think they will take first place again in 2013. Dividend yields remain much higher than interest rates, companies are in good financial shape, earnings are growing and investor sentiment is likely to move further in favour of shares.
2. Australian shares
For the last three years the NZ market has been a much stronger performer than Australia, although this could turn around over the coming year. Australia has cut interest rates aggressively, China is stabilising, so watch this space for Australian shares.
3. The Official Cash Rate (OCR) is unmoved all year
We can't see any reason for the Reserve Bank of New Zealand to increase interest rates until sometime in 2014. We might get a bit of a growth boost from the Christchurch rebuild, but it won't justify any movement in rates and investors looking for income won't get any reprieve from the current low interest rate environment. While many high-dividend companies have already performed well in the wake of low interest rates, others still look reasonable value and should continue to attract attention in 2013.
4. At least five new companies list on the NZX
With or without SOEs, activity (in terms of new listings and opportunities) should continue to build. The market is strong, sentiment is high and there is a lot of cash still sitting in low-return bank deposits. In 2013 we might have the best year for some time when it comes to new investment opportunities. A key beneficiary of this trend would be the NZ stock exchange.
5. China recovers
Chinese economic growth for the September quarter was 7.4%, having consistently slowed since the first quarter of 2010. This could well be a turning point and we might see growth in China start to reaccelerate over 2013.
6. Growth shares do better than high income shares
Over recent years the safe, defensive, high-yielding shares have been outstanding performers. They still look attractive and will hold up well, but next year we might see a continuing rebound for some of the more cyclical companies, such as those in the building sector, those exposed to equity markets or the retailers. Under such a scenario the midcaps and smaller companies may also continue to outperform their larger peers.
7. The Christchurch rebuild gets properly underway
After many delays, we are finally seeing signs of the rebuild process gathering some decent momentum. This should help economic growth as a whole, as well as benefit the construction sector and stocks.
8. A Good Year for top IT Companies
There is potential for large international IT companies to grow this year.
9. American house prices outpace Auckland house prices
Auckland house prices were great for property investors in 2012, rising over 10%. The Auckland market still has strong fundamentals, but even the most one-eyed property investor will concede that valuations are beginning to look pricey relative to rents and incomes. American houses are just starting to show some strength after many poor years, and the wealth effect this will have on sentiment and the US economy is significant.
10. The New Zealand dollar falls
If ever there was a contrarian call at the moment it would be for the NZ dollar to weaken (or the US dollar to strengthen). Like most economists, our view is that the currency remains around where it is over 2013, but it's worth raising as a scenario because if it does fall, many investors are very poorly positioned. Following the outstanding performance from the local market in 2012, investors have been driven even further into domestic assets.
New Zealand's currency is strong because the economy is strong, so we shouldn't be too eager to see it collapse. But a bit of weakness would help our exporters out and a better-than-expected US economic rebound would see the languishing US dollar recover. If nothing else, we should give some consideration to the possibility of international markets outpacing the local market over the coming year and use our strong currency to add some good quality global companies.
We have a positive view on local companies with offshore earnings, should we see some currency weakness, these companies would benefit even further.
We will report on market conditions over the coming months, and evaluate these 10 predictions this time next year.
Mark Lister is the Head of Private Wealth Research for Craigs Investment Partners, which is one of New Zealand's largest independent investment firms.
He joined Craigs Investment Partners in early 2004 as an equity analyst specialising in property and small cap research. In 2007, Mark was appointed Head of Private Wealth Research.
Investing 101: A Beginners' Guide to Investing Safely
What is an investment? Why do some people find investing easy while you find it a bit complicated? How do investors come up with money to invest? These are just some of the common questions people ask when they start venturing into investments. How easy or difficult is investing anyway? Let's find out.
Your savings are the most basic form of investment. If you can't save money, then you cannot invest. Investing is complicated. Many people are hesitant to get started because there is so much (often conflicting) information about investments, so many choices and so many risks. But it doesn't have to be that way.
Here is a crash course to get you started.
A typical investor
A typical investor has credit card debt under control. It makes no sense investing in stocks, bonds, or mutual funds if you have a lot of credit card debt and an interest rate of more than 10%. You don't have to be debt free to invest but make sure to pay each debt each month. You also should be paying low interest rates on that debt. A typical investor also has an emergency fund of at least three months' worth of basic living expenses. And finally, a typical investor has a 401(k) plan so he can maximize his contributions and diversify his investments.
Where to find the money to invest?
Plenty of stock mutual funds allow you to invest with $500 or less. Take advantage of your next bonus, your income tax refund, or your extra cash in your investments. If you can't come up with at least $500, there are funds which let you skip your initial sum of investment if you sign up for automatic monthly withdrawals of $25 to $50 from your checking account.
How to choose an investment?
The first step is knowing your investment goals. Are you saving for a college fund? Are you saving for a house? Retirement? The type of investment you choose will depend upon the amount of time available before you need the money. Stocks, for example, are long-term investments. It is best to hold stocks or stock mutual funds for more than five years. If you need the money sooner, then reduce your return by cashing in when the value is down.
What is risk tolerance?
If you hide your money in your room because you don't trust the bank, you probably will not feel comfortable when investing in stocks.
Where do I put my investments?
Most experts recommend spreading your money over different types of investments to reduce risk. This is because investments can go down or up depending on numerous factors. For example, when stock mutual funds or returns on stock are high, chances are returns on bonds will be low. If you have your money in both types of funds, you are likely to get a decent combined return even if one fund takes a downturn.
As a beginner, choose stock mutual funds over stocks in individual companies. This is because stock mutual funds have less risk than an individual stock. If a company does poorly, you will still have a good return but if a stock in one company goes poorly, you'll lose money.
3 Keys to Setting Up Relative Strength Investing
Configuring a relative strength investment strategy to produce profitable investment results requires more than simply picking a method and plugging in typical, common settings. Results that produce safe investing with regular profits, regular gains, requires settings that meet the needs of the group and your objectives.
Three keys to establishing and using relative strength investing include:
- Type of Relative Strength analysis
- Objectives of the Investments
- Testing and Setting
Type of Relative Strength
There are different types of relative strength momentum analysis (RSM) and these are often more suited to one type of investment or objective. For example, are your objectives aggressive or conservative or somewhere in-between; short-term or long-term; and are you investing from a group of stocks, ETFs or mutual funds.
Aggressiveness
Generally speaking an analysis based upon Alpha (a type of RSM) is more aggressive than one based upon the normal relative strength momentum, return or price oscillation. Yet, if you add Standard Deviation (SD) to Alpha so you have an Alpha/SD analysis the result is a conservative to moderate analysis strategy.
Aggressiveness, however, doesn't always produce the best results.
My testing has shown the best results are usually based on the type of the group from which you choose to invest:
for Mutual Funds:
alpha
alpha-C
rsm
alpha/sd
for ETFs:
rsm/sd
rsm
alpha
alpha-c
for stocks:
rsm
rsm/sd
alpha
alpha-C
Objectives
If your objective is conservative or moderate growth with minimal risk to your money, then an investment strategy method of analysis that also uses standard deviation coupled with a market exit signal will give you adequate growth while protecting you when the market declines.
Testing and Settings
How you test or back-test your groups of ticker symbols and different types of analysis is critical.
If you are more aggressive and willing to trade frequently, almost daily versus weekly or occasionally then you will want to test with shorter time periods. Shorter time periods will give you signals for every twist and turn of the markets and your holdings but result in frequent trading that may or may not produce greater gains than more moderate trading based on weekly or monthly analysis.
Using your investment software and back testing you can find strategies based upon gains coupled with drawdown (losses) that meet your goals.
For example:
An Alpha 10 strategy is based on analysis of 10 trading days on a continual basis will pick up every up and down as compared to an Alpha 60 based on analysis of 60 trading days (on a continual basis) which averages out the ups and down and so results in less frequent trading.
A relative strength momentum analysis set with a fast 10 and slow 30 will act like the Alpha 10 whereas settings of a fast 40 and slow 90 would be somewhat similar to the Alpha 60. (note that results between Alpha and RSM will be different because of how the different analysis themselves are computed).
Other factors in your strategy settings than also effect the results besides just the type of analysis. These include:
- Desired frequency of analysis - daily, weekly or monthly
- Desired minimum hold periods indicating your preference for how long you want to keep a position as a minimum
- Stops - are you going to set stops to force selling a position should it drop too much
The point is, just saying you are going to use relative strength investing is good, but only the beginning. Just as the same size shoe doesn't fit everyone, nor does the same shoe style work for everyone, there is not one-size fits all RSM setting. Only after knowing what your objectives are and what type of investments you want to make, can you then test to find the settings that will work best for your group, your 401k or any other group of funds, Etfs or stocks.
Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.
Key Points to Consider Before Making Investment Decisions
Earning maximum returns on his investment is all an investor wants. Given a chance, who wouldn't like to become another Warren Buffett? But Stock Investing has its own share of risks; rather we should say that risk is an inherent element of every investment decision. Though, there are risks but there are remedies too. Knowledge of some crucial and important points about Stock Investing can avoid mishaps and make your investment fruitful.
By now, you must be wondering as to what are those points, knowing which you can make your investment successful?
The three essential points about Stock Investing are described below:
1. Realistic Expectation
Stock Investing is no miracle. If you are expecting your money to be doubled in one month, then either you are being too ambitious or you live in an imaginary world. Being a successful investor needs you to be patient, a rational thinker and a continuous learner. In the beginning, 10 to 15% return is enough for paving your path to be a successful investor. The only thing, you need to ensure, is that the return should be continuous, year after year.
"It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for." - Robert Kiyosaki
2. It's not just a stock that you are investing in; but the business
Before investing in any stock, most important thing to do is to analyze the business. When you buy a stock, it becomes your share in the ownership of that company. Your future depends on the company's future and company's future depends on its fundamentals, past performances and future projects. So, it becomes a must for every investor to evaluate and analyze the stock before putting his hard earned money into it. In other words, you must carry out Stock Analysis before investing. Two prominent methods of stock analysis are:
a) Fundamental Analysis
It is carried out by using actual data to evaluate a stock. This method involves measuring the intrinsic value of the stock by investigating relevant financial & economic factors. It is the method to study each and every factor, which can affect the business such as the overall economy, industry's conditions, financial conditions and the management of the company. For long term investors, carrying out fundamental analysis is beneficial.
b) Technical Analysis
This method works on the belief that the clue to the future performance of the stock relies into the past performance of the stock and the market. This method involves analyzing data & figures produced by market activities. In this method, charts and other tools are used to identify the patterns to predict the future activities. This method of stock analysis is beneficial for short term investors.
"When buying shares, ask yourself, would you buy the whole company?" - Rene Rivkin
3. Stick to the Margin of Safety
Even if you pick your stocks with great care; surprises happen sometimes. Using Margin of Safety, then, helps in lowering the losses significantly. It is actually the difference between the intrinsic value and the market price of a specific stock and helps protect the investment from downturns in the market.
"It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. " - Warren Buffett
The money is yours. Only you know how much pain, you have gone through, to earn it & it's totally your responsibility to make your money pay for your pain.
To wrap up, I would like to mention this famous quote of Warren Buffett, that is:
"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage."
Kevin is among other things.. a fan of old school fundamental analysis of stocks and is madly obsessed with finding the best stocks to invest. A keen giver of free advice, Kevin evangelizes long term investing and on occasion can be disparaging of pure technical analysis and its proponents.
Article Source: http://EzineArticles.com/7609591
Considering A High Value Investment In Diamonds
Considering investment in diamonds? Welcome to the exclusive club of diamond investors. It is a very high value investment as these are the most precious stones on earth. There are several reasons why you should considering putting your money in these.
Diamonds are universally acknowledged as precious stones. Their value does not diminish from one country to another. They are forever precious and you can always invest great returns when you are reselling your diamond. The prices of these precious stones do not fluctuate much according to inflation and deflation. They don't possess any shelf life and their value is retained for hundreds of years. These are the most precious possessions that you can pass on as an heirloom to the next generation.
These precious stones also do not require any maintenance and they remain unaffected by the vagaries of nature. Factors like environmental changes or pollution do not affect the diamonds. These precious stones have a global acceptance. You can sell diamonds in any country of the world, which is not possible in case of stocks, mutual funds, and bonds. The prices of these super precious stones do not fluctuate according to the market. The pricing of diamonds is set by a universal pricing report and the pricing is more or less in any country across the globe.
Diamonds are precious because they are very scarce. These are considered precious heirlooms and often people buy them to never sell it again, thus contributing to their scarcity. However, the demand for diamonds never ceases as people all over the world want diamonds for weddings and other special occasions. According to an estimate, the world's diamond stock is set to run out in the next forty years or so. Therefore, this high demand complemented by scarcity always causes the prices of diamonds to rise, making them a super valuable commodity for investment.
They are great sources of security in times of hyperinflation when the value of paper currency drastically falls. Although, hyperinflation is an extremely rare financial phenomenon, yet you should be prepared for it. You never know, when it may strike. Diamonds will give you the peace of mind that you have secured your future against hyperinflation.
The great portability of these precious stones and the fact that investors are not required to pay capital gains tax or possession tax on diamonds has contributed to its popularity as a favorable investment item for many high value investors.
In case you are worried about a hyperinflation hitting the economy, you should consider converting your cash to diamond investment. It protects you from any type of financial emergencies.
3 Cashflow Concepts For Doing Well Financially At the Times of Rapid Change
Aren't you tired of economic recessions, a never-ending inflation and double digit unemployment? Let's face it, the world's economic climate is constantly changing, and each new recession seems to last longer than the one before it. To survive and prosper, you need to be financially educated. That's why, in this article, I will look at certain concepts related to the US economic climate and provide a detailed description of how you can take advantage of constant economic recessions and continually rising prices. Let's get down to it.
Concept # 1: You should always improve and grow.
It is essential to stay frequently updated with the newest ideas and concepts in the area of investing rather than clinging to the old ways of doing things. Let's say you are about to get a job interview. You have no doubts about the positive result of the interview. You don't worry about the fact that the most recent computer class you had taken was almost twenty four years ago. How much do you think the things have changed since then? You probably know everything about floppy discs, dial-up modems, etc. You are confident in your knowledge! However, to your surprise, the company needs to know your skills in the field of things you've never heard before, such as social media, cloud technology and SEO. Uh-oh what???
Now, I want you to think in the same way about the field of investing and finance. The financial concepts that could be applied yesterday, last year, last month, are completely inadequate in today's economy. Never ending changes is the only thing you may be sure of in the modern financial climate. You need to keep your economic expertise current or the repercussions to your cashflow could be unpleasant at best or totally wrecking at worst! I hope you get the point. Keeping up to date could mean the difference between your economic life or death.
Concept # 2: Savings are absolutely crucial, but hoarding cash will bankrupt you in the long run.
Let's compare cash to milk. You always need to have some milk in the refrigerator, but it has a relatively short expiration date. Unfortunately, your money has an expiration date too! The US government is doing every little thing it can to slowly and steadily devalue the worth of the US dollar. Why slowly and steadily? Eroding the US dollar too quickly would lead to public unrest. However, as the value is gradually diminished, two great things happen: the US exports become cheaper in the global market and the U.S. debt becomes a lot more manageable. The US government could only pay the debt by devaluing (inflating) the US dollar.
What does this information give you? You should understand that while it's true that money savings may give you a certain level of monetary safety, you need to remember that cash is being constantly devalued due to an endlessly rising inflation. You have to put aside adequate amount of cash to help you get through the difficult times in case you lose your employment. However, as soon as you have your cash safety blanket in place, excess cash and non-inflation adjusted cashflow turn into LIABILITY because it is constantly going down in value.
While the US government is attempting to keep the rising cost of living at a certain level (typically 2-3 %), they need to increase the volume of cash in the economy during tough financial times when the companies are struggling to stay afloat and require added supply of cash to keep going. The next round of cash printing could be coming in the near future as the government will certainly try to shore up the value of real estate which may lead to increased prices and you will be required to pay more for food and other goods and services.
Without an adequate quantity of money in your savings account, it will be tough for you to survive in the times of emergency. However, if your major financial investment focuses on accumulating cash reserves in your savings accounts and CDs only, you will get financially destroyed by the upcoming inflation in the long run. I hope you get the point. Savings are good in moderation. You need some for emergencies but that's about all you need. The rest must be invested in other assets, preferably Real Estate and businesses.
Concept # 3: Create numerous sources of inflation adjusted cashflow.
Creating an inflation-resistant cashflow stream can offers you freedom, simplicity, and control over your financial resources. Investments that generate inflation-resistant cashflow can easily avoid the ups and downs that give heartburn to investors who are solely concentrated on building a high level of equity. If you own a functional lemonade making machine but it is not turned on, you might as well not even own it. You need to convert idle equity into a cashflow producing asset. You should turn the heaps of unproductive cash into the cash flow stream. There are a great deal of "affluent" individuals going bankrupt because they planned on liquidating assets to cover their cash flow needs. But your grocer will not accept a part of your equity as a form of payment; the grocer will only accept cash. You don't want to wind up in a scenario when you need to liquidate your asset just so that you can buy groceries. You only want to liquidate your equity at the top of the market when you are confident the price is good.
So, are you ready to take action and start acquiring positive cashflow generating assets? Many financial experts will agree that real estate investing is the best way to build wealth.
Why People Are Getting Apps Developed, And Why You Probably Should Too
There seems to be two mindsets when it comes to people who want to develop apps:
Person A Just wants to develop a bunch of apps to create an extra income of $500-$1,000 per week.
Person B Is willing to splash out $30,000-$50,000 and 6 months development time to develop an insane iOS game with the intentions of making $5,000,000+ in 6 months.
And let me start off by saying, both are very possible. People do it ALL THE TIME! But here's the thing: You have to decide who you want to be? A... or B?
Some people don't have the $30,000-$50,000 that it takes to develop a really awesome app and so they have to think like person A... and that's okay.
Others believe that 'the-days-of-yore' where you could develop an app and make millions are over. And so they settle for the next best thing, which is a $500-$1,000 a week income.
Truth be told, there are still people out there making squillions from mobile apps, especially games. And they are living the dream!
And as soon as an app takes off, it takes an entire team of professional mobile app developers just to ensure the app keeps doing well in terms of downloads and in app purchases, etc.
It requires listening to feedback, marketing (heavily), innovating and fleshing out and talking about ideas for future apps...
Your right, that does sound like fun, and it is!... for the most of it. And the best thing is: You can do it from almost ANYWHERE IN THE WORLD!
I have a client who's on an arbitrary holiday in Vietnam at the moment. He communicates with me via Skype on the irregular basis. And another client who is about to go to Europe for 3 months, just because... I think that's a pretty great reason, don't you?
There is a mixture of reasons why people employ us as their mobile app developer. Mainly, because it gives them so much more time, money and flexibility to live the lives that they always wanted to live. And I think also partly because they know we just love doing it!
So, "why are people getting mobile apps developed?" Take a deep breath, and quietly ask yourself, what would you do with all that extra time and money at your disposal? Where would you be and how would you feel?
Now do you understand? It's not just the lifestyle, the money, the adventures.
It's more than that. It's the feeling of being right at the head of something huge.
For the first time ever, this opportunity exists, but only to a brave few.
Who will it be? Will it be you?
3 Profitable Investing Tools
Fear of losing your money to such an extent that you don't invest in the stock market or manage your retirement account can actually be worse than investing. Just watching or hoping your retirement account will grow is like watching the weather or predicting who is going to win the World Series in two years.
The right tools are required for safe investing. It's natural to be afraid of losing; no one wants to lose anything, much less money or even a life's savings. But money under the mattress will be worth half if that much after 20 or 40 years. The answer is to invest safely and profitably. And no this is not easier said than done, but neither is it extremely difficult.
The first key to successful, safe and profitable investing is to know that anyone can do it. Anyone. You.
The second key is getting and using the right tools. Thanksgiving dinner requires the right tools, ingredients and recipes. Remodeling a home requires tools, materials and know-how. The same is required for successful investing.
The tools for safe profitable investing are:
- A computer
- An online broker account
- Investment software
Computer - just about any computer connected to the internet will enable you to manage your investments. Most investment software, however, works on PC's although they can run on Mac's.
Online Broker Account - there are many easy to use online brokers like Fidelity, Schwab, TD Ameritrade that let you open an account easily and with almost any amount of money. And you can easily move accounts from one broker to another.
Investment Software - you have many choices, I recommend software that is comprehensive, yet easy to learn and that doesn't require hours of time. By comprehensive I mean:
- Let's you work with all types - stocks, ETFs, mutual funds, bonds
- Gives precise buy-sell recommendations
- Provides charts to show individual analysis or progress
- Provides charts to show how a strategy is performing
- Provides a Market Exit signal that says is now the time to exit or enter the markets.
- Gives you the option of examining individual ticker symbol data and comparing the data with other tickers.
- Let's you set buy-sell rules that work best for you
- Gives you an easy to read screen or report of all your investment positions
- Provides the opportunity to back test different investment models or strategies to find what works best for your or the ticker symbols available to you in your retirement account.
Investment software that lets you analyze based on different types of relative strength investing is critical. Many books have been published and studies conducted that have proved relative strength momentum investing to provide successful profitable investing results for all types of investors.
Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.
How Forex Brokers Trick You - Playing the Spread
When it comes to making smart investments in these modern times, you'll find that one of the best options is Forex. This marketplace relies heavily on trading currency and matching up pairs that either rise or fall in value. This option differs from the traditional stock trading because it is open longer, can return greater yields on money put into the trades, and doesn't require a great deal of money to start moving forward. With a small amount of money, anyone can start to trade with this marketplace. There are a lot of different tips that you can get online for this type of investment, but you'll want to learn how Forex brokers can trick you by playing the spread, without you even knowing it, so that you are able to truly take advantage of the options that are available to you.
In order to understand how the spread works, you'll need to look into how the market works and is used to make money by people just like you. The process involves coupling two currencies together and wagering on whether or not it will shift up, down, or stay the same. This can be done in short term trading scenarios, or longer term options that are relatively safe. For those that are trying to turn a profit with relative ease, hiring a broker to spread money across several currencies and wait for the sales and value to shift ever so slightly can be beneficial.
A broker in the industry can easily slip under the radar if not monitored correctly. This is done by playing the various spreads, and then moving to posting losing funds while pocketing fees. This can be a difficult matter to understand, as the bid/ask rates for online investors change from time to time. Because there are so many changes within the system, a person could miss out on huge payouts due in large part to simple issues such as ping speed, slippage and more.
What makes matters somewhat difficult for the average trader to understand is the fact that there are several different factors that go into the spread. Not only that, there are several different types of spreads utilized in Forex Trading. Fixed, fixed with extension, and variable spreads can all be utilized to invest. This means that if there is a fluctuation in the numbers, and it reaches the bare minimum of fees for the broker, you will not get any money. In some instances a loss will be posted, even though the fee will get paid for the process of trading. This can definitely be infuriating, especially when dealing with a variety of issues that may be beyond control of the trader. It's with this in mind that it's important to understand each component of trades made.
There are a lot of different issues that can cause alarm when dealing with currencies, which is why it's important to watch out for broker tricks and instead try to invest with a platform that gives you more control.
Different Order Types Offered by Stock and Forex Brokers
Trading of financial instruments like stocks, bonds, currencies, commodities and futures have become more complex than just buying and selling. As the needs of traders diversified over the period and new financial instruments and execution procedures introduced, the need of different kinds of order executions and transactions become a necessity. So brokers and trading firms started to introduce different kinds of order types.
What are Orders?
Orders are instructions from the trader to the broker to do a transaction. It can be a buy order or sell order. They can be placed on phone or online through the trading platform. These are of different types enabling the trader to place restrictions for execution depending on price and time. The order execution involves a fee; which is charged by the brokerage firm. The fee can be flat or percentage or can be spread differences of ask and bid prices. The types available for a trader depends upon the brokerage firm, his/her account type and financial instrument. Below are some of the most popular types of trading orders offered by stock and forex brokers.
Market Orders: These are the simplest types of orders which tell the brokerage firm to enter or exit a trade at the available market price. The basic purpose is to carryout a trade. These are offered by all brokers and are the default order type on most of the trading platforms. While they offer fast trade executions they do not offer any additional benefits or tools to the trader.
Limit Orders: These are intrustions to buy or sell a stock, currency or commodity at a specified price or better price. Limit sell orders tell the broker to sell the instrument owned at a specified price or higher price. Similarly limit buy orders tell the broker to buy an instrument at a specified price or lower price. Thus the trader can get better trade executions, but many times the orders simply expire without any execution because the price may not touch the specified level at all.
Day Orders: These are time-bound orders which should be executed within the trading day or are cancelled automatically at the end of trading day. Many brokerage firms consider all trading orders as day orders unless the time-period is specified. Many trading systems also support short-life day orders with lifespan of a few minutes to hours.
Short Selling Orders: They are basically sell intrucions of financial instruments which the trader not actually own. The selling is effected through borrowing the instrument from the broker. Not all brokers and financial instrument have short-selling facility. And, short-selling require a margin account with the broker.
Stop Orders: These are one of the most popular order types which are used as stop-losses for limiting the trading risks. These tell the broker to execute the trade when the price reaches a specified level. On reaching the level they executed either as market or limit order. A sell intrucion for a long position is executed when the price drops to a specified level. Similarly a buy order for short position is executed when the price rises to a specified level. Many brokers also offer trailing stop orders which dynamically follow price trends, but are executed on reversal of trend by locking the profit.
Fill or Kill (FOK) Orders: These are placed for full execution or no execution. These orders do not allow any partial executions. If the execution is not done; the they are automatically cancelled.
Good Till Cancelled (GTC) Orders: These remain active until they are executed. But most brokers have a specified date period after which the they are cancelled automatically. There are also Good Till Date orders available which remain active until a specified date.
One Cancels the Other Order: These are intrucions for more than one number of trades placed simultaneously. When one of the orders is executed on meeting of specifications others are cancelled automatically.
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