The Finance Factor

Over the last year, the financial sector has witnessed some extremely turbulent times, beginning with the credit crunch and moving into the recession. This has made us all more aware of our financial well-being, encouraging people to become more frugal with spending and consider their futures.

Last year, The Bank of England’s base rate peaked well above average, so it’s no surprise that people were benefiting from high interest rates on their savings accounts. But as inflation became almost unavoidable, the Bank of England lowered rates on a number of occasions, eventually marking the lowest rates ever recorded of 0.5% – the level it remains at today.

Although many have benefited from this on one side of the market – involving mortgages and loans, savers are suffering, as many banks are struggling to offer attractive interest rates. But the fact is that if you choose your account wisely, you can earn up to 10 times the current base rate for a guaranteed period of time.

Fixed rate bonds allow savers to lock in at a rate for a specified term, providing them with a guaranteed predictable income from their investment. Barnsley Building Society are currently offering savers 5% on investments between £100 and up to £500,000 on its three year fixed term bond.

Although the base rate is likely to increase over time, 5% is a very respectable rate and would even have been so before the financial crisis first surfaced.

Continue reading ‘Fixed rate bonds provide potential to earn 10x base rate’ »

Now that much of the world’s financial structure and stock markets have pretty well imploded, many investors are looking for what sector to invest in for the highest potential reward and the least amount of risk.

For a number of reasons, I think that the technology sector will again rise to the top of the selection list for investment opportunity. Technology newsletters were pretty much thrown aside after the technology bubble burst almost a decade ago.

If you think about the current economic situation in the United States, what sector of the economy is more important and more interwoven into the fabric of almost everything else than technology?

Significant amounts of manufacturing have been moved to lower cost countries like China, financial services have shot themselves in the foot and will only re-emerge with even more complex regulations, and even agriculture is highly dependent on technology to maintain profitability.

So doesn’t it make sense that people who specialize in investment newsletters and advisory services should seek to put together a team of specialists to offer a cutting edge offering for investors wanting to profit from the technology sector?

Continue reading ‘Can a Technology Newsletter Guide You to Investment Profits?’ »

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The Bombay Stock Exchange, popularly known as the BSE, is the oldest stock exchange in Asia. There are more than 4700 companies in the BSE companies list. The list provides details of all companies that have been included in the Sensex from its inception in 1986. BSE index is tracked worldwide- such height has it acquired in its stature. It is an index of 30 stocks representing 12 major sectors. A ‘free-float’ methodology is used in the construction of the BSE Sensitive Index (or SENSEX) and is sensitive to market sentiments and market realities.

The achievement of the Bombay Stock Exchange as a premier stock exchange in the country is indeed something to be proud of. And the rise in the number of BSE companies is an indicator of that. The BSE index is a value weighted index composed of 30 of the largest and most actively traded stocks, representatives of various sectors of the BSE SENSEX. The BSE sensitive index has increased to ten times from June 1990 to present.

Continue reading ‘Bombay Stock Exchange Story’ »

Economies move through a series of expansions and contractions known as the business cycle. This should not be news to anyone with even a modicum of financial acumen, yet it amazes me that those who are tasked with understanding this basic concept get it so wrong time after time.

What I am referring to is the need to “call a bottom”. When I started out in my trading career, the trading aphorism I heard most was to not try to “catch a falling knife”. Yet day after day, I see some politician, financial pundit, or media type who will tell you with all certainty that the “bottom may be in” and the recession may be over. What they’re NOT telling you is that just like everyone else, they really have no idea where the bottom may be and that all of their guessing is nothing more than a way to pat themselves on the back at cocktail parties 6 months from now in the random chance event that they were right!

Let’s debunk some of the myths about economic “bottoms” and tell you what you need to know.

Less contraction does not equal expansion! When economists say a recession is over, all they are saying is that economic output has stopped contracting. And while that may be true, the “logical” conclusion that they draw is that if the economy stops contracting, then it must be expanding, which means growth. This couldn’t be further from the truth. Economies can experience long periods of non-growth or stagnation, after having been stabilized. Don’t believe me? Ask the Japanese.

Continue reading ‘Where’s the Bottom?’ »

In spite of the jump in the industrial production number in June, the SENSEX continues to fall points. The BSE sensex in metal index plummeted while the Sensex Nifty shed 95 points. In The Sensex Index, TATA Steel and TCS were the biggest losers from Sensex India. The sensex news, Asian markets also felt sharply. When describing all these terms, it is natural for an amateur to understand what each term stands for, so sensex means an index, an indicator. It gives an idea if most of the stocks have gone up or gone down, the sensex is indicators of all major companies of BSE while the Sensex Nifty is the indicators of all the major companies of NSE.

After three days of slump, the BSE Sensex Index saw a rise in the auto and realty stocks as is clear from the Sensex India and blaring in every section of sensex news. The sensex, bse sensex market has been highly volatile though, the Sensex Nifty closed up 33.07points. The opinions of a few are that the recent omen regarding swine flu and drought are playing its tricks on the Sensex Index as is reflected by the Sensex India.

Continue reading ‘SENSEX Scenario at Present’ »

Diversification is a growth strategy that takes advantage of market opportunities aiming to reduce the portfolio risk by allocating investment interest over different classes of assets. Through the acquisition and efficient management of two or more different assets, diversification leverages investment risk by offsetting losses from one asset with the gains of another asset in the same portfolio. As a result, as the number of the multiple assets in the portfolio increases, the total portfolio risk decreases.

Diversification is essential for all investors. Constructing a diversified portfolio is important to the growth of the investment. Savvy investors have different investment classes in their portfolio such as stocks, mutual funds, bonds, cash, or commodities and they protect their portfolio from losing value if one asset category declines sharply. However, although asset allocation may seem a straightforward form of diversification, still it requires a good knowledge of investment fundamentals.

The first rule of diversification is to know the basics of each investment class.

Stocks are financial assets of equity investing that offer ownership or a share of the company to the investor. When a firm is viable and profitable, its market capitalization increases and so does the value of its stocks. Stocks are generally considered as riskier than all other financial assets because they are susceptible to more frequent and sharper fluctuations and market volatility. Yet, as investors have different investment profiles that differ in the level of risk that are willing to undertake, the investment goals are directly proportional to the fluctuations of the stocks. Risk-takers investors invest in aggressive stocks, which generate instant income. Risk-averse investors prefer stocks that generate average returns on a long-term horizon.

Continue reading ‘Financial planning: The significance of diversification’ »

The price of a futures contract is the result of a decision on the part of both a buyer and a seller. The buyer believes prices will go higher; the seller feels prices will decline. These decisions are represented by a trade at an exact price.

Once the buyer and seller make their trade, their influence in the market is spent — except for the opposite reaction they will ultimately have when they close the trade. Thus, there are two aspects to every trade: 1) each trade must ultimately have an opposite reaction on the market, and 2) the trade will influence other traders.

The price of a futures contract is the result of a decision on the part of both a buyer and a seller. The buyer believes prices will go higher; the seller feels prices will decline. These decisions are represented by a trade at an exact price.

Continue reading ‘The Psychology of Commodity Price Movement’ »

For any of those contemplating investing in the commodity markets, they need to be very aware that losses are part of the game. As Ed Seykota has taught so many commodity and forex traders… losses are like breathing. They can not be avoided. If you are not having losses..either you are not trading.. or you are risking way too little. There is no way around it!
The Fact of life is when you are trend following, you will have losses… If you think you are going to prevent them, don’t even think about trading the commodity markets.You can not make money if you are not prepared to lose.
What is most important to realize that even the percentage of winners does not even matter. Losses must be kept to a minimum and profits…lets say… let them run as much as they want without any limitation. This is the key…not percentages of winners. Let your profits run…

Many equivalent commodity trading to poker. What is ironic in Poker is that one who wins the most number of times is not the one who wins the most amount of money. One of the biggest single reasons beginning commodity traders have poor performance is they seek to be rewarded that they were right. They do not let their profits run. They take short profits. Professionals don’t care and know that eventually a big winner is coming. Their goal is to make themselves available for that trade. Lots of small losses do not matter.

Continue reading ‘Dealing with Losses in Commodity Trading’ »

Indian stock market has always shown a precise face of its economic levels. It authenticates the regular ups and downs in the corporate world. In fact, this marketplace is all about the oscillations that come in the prices of the products and shares of 30 listed companies. The shares are the easily available stock for trading in the market. They also reflect the market value of a particular company and enable the investor to take correct decisions.

In a stock market, the indices are considered as a crucial piece of data. Indices are the measurement of a large group of stocks used to envision the movement in the prices of security. On seeing the index of market prices, one can decide to invest in a particular company. It is essential as it will help the person to reap profits and use these investments in buying shares of other companies also. Since, the financial market keeps dwindling; it is important that a person should take proper decision after a careful research.

Continue reading ‘Stock market is the face of every economical structure’ »

There is a lot of money to be made in the stock market and especially because it is at a historic low. If you look throughout history you will see that the market always goes up over time. Knowing which stocks to pick is very important for you to make money over time. You need the knowledge it takes to choose stocks that will yield you a profit over time. Their many publications are available for you and it is highly recommended that you subscribe to some of them. They will help you to understand how the stock market works and what is the best method for picking great stocks.

Continue reading ‘You Can Now Pick the Best Stocks – Make Money Trading Stocks’ »