Global Forex Invest

N-Viro International Corporation

2010-03-25T08:50:00.000-07:00

N-Viro International Corporation utilizes patented technologies to stabilize and disinfect municipal bio solids and other organic waste products! These technologies safely and efficiently transform waste streams into beneficial reuse products (we can call this process of waste to energy!).

N-Viro International Corporation develops and licenses its technology to municipalities and private companies. Their patented processes use lime and/or mineral-rich, combustion byproducts to treat, pasteurize, immobilize and convert wastewater sludge and other bio-organic wastes into biomineral agricultural and soil-enrichment products with real market value. The company has generated sales in excess of $40 million dollars, since its initial public offering in October of 1993, which was underwritten by Robertson Stephens, Raymond James, Oppenheimer & Co., and Paine Webber.

Well, we can say that the main idea of N-Viro International Corporation is work wiht alternative energy and renewable energy, considering that the company cares to use opportunity fuels, clean coal, among others.

Furthermore, it's a company that deserves all the credibility of the society because it's concerned about the waste of energy and with the environment.

Capital

2009-04-23T15:46:00.000-07:00

Well, like other businesses, forex need capital to grow and generate enough profit for you. Most broker minimum requirements may apply to anyone who wanted to open a real account through them. But of course you can start with the capital more than the minimum required by the broker.

Seen glance seems that this is stupid. Suppress a large amount of funds for investment, which may be a new you know.

Forex different with other investments that may be normal you know. In the forex, active investors behave, and determine their own investment decisions directly.

Interested in Forex?

2009-04-23T15:39:00.000-07:00

Global crisis currently has confusing the players in the forex market. They are a headache for the current situation. What if you are still interested to play in the forex world, then you should be more caution. Forex at the time this is still profitable, but also forex will be very detrimental. However, there was not when you want to continue forward, the indicators are in need of forex. But you should also prepare an appropriate indicator for you. Indicators of how the forex? Many Shoftwere Indicators, which traded at the sale. Depending on the indicator you want to select which of you is a fairly accurate indicator. Please hunting Forex Indicators that will provide easy way for you.

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2008-10-20T11:01:00.000-07:00

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Forex Education

2008-03-18T13:11:00.000-07:00

As you can see there are huge potentials to make profits on the Forex. But like any financial market, there are risks associated with Forex trading, and even the most experienced of traders makes a wrong decision every once in a while that ends with them losing a large sum of money. Because the Forex market is such a volatile and unreliable market, it is absolutely necessary that you have a thorough knowledge of trading techniques and plans, market indicators, as well a clear understanding of the Forex market itself.

Every good Forex trader knows that the secret to success comes from a well planned strategy or system that enables them to determine profitable trades. A system usually is used to find good trades, though you do need to analyze the market before you can create a good system. Even though you can find pre-developed strategies in various places on the web (however, they usually cost a great deal of money), it is always better to create your own system. A system developed by you can not only better focus on your goals, but it will also allow you to better understand to what extent economic events will affect the Forex market and what type of events cause market fluctuations. Though many sites on the web require you to pay a fee to use their resources to develop your system, there are still a few sites that are absolutely free. You can use this site or any other similar free Forex resource to get some help in your own system development.

Before you even think about buying or selling any currency on the Forex market, you will need to have a good understanding of what exactly the Foreign Exchange Market is, and how it works. You wouldn’t make an investment without thoroughly researching it, and knowing exactly what you are getting into. The Forex market is no different, and you wouldn’t want to do something with your hard earned money without knowing every single detail. Therefore, you should do some reading about the Forex market, its origins, general history and facts, as well as some of the more detailed information about how the market mechanism works to determine currency prices and exchange rate values.

Now that you have some general knowledge about the Forex market, it is time to do some real world research of the Forex market to better understand how price and exchange rate values are affected by real world events.

Right now you are probably feeling that doing research about the Forex market and reading articles about it won’t help you one bit when it comes to real life situations. However, by reading more about the Forex you are subconsciously learning about market indicators, devising plans and strategies, as well as touching on the practice of Forex news trading. From articles that you read or information that you have learned, you are taking in a lot of information that translates into practical knowledge that can be put to use when you start buying and selling on the Forex.

Forex Hedged Grid System

2008-03-14T08:09:00.000-07:00

The hedged grid system been used successfully (and highly unsuccessfully) over the last few years. Unfortunately the failures tend to discourage traders from taking advantage of this great system. The failures are mainly due to ignorance, impatience and greed (common reasons for trading failure).
In a nutshell the grid system uses the following methodology. You start by buying and selling a currency. When the price moves a predetermined distance (grid leg) you cash in the positive leg, leave the negative leg and buy and sell again. Sooner or later the system goes positive and you would then cash in when it is positive.
Money is made when the price retraces 100%, 50%, 33% at various levels. This starts looking like a strategy that supports the Fibonacci concept. The grid system is also based on the nature of the market to trade sideways 80% of the time and to trend 20% of the time.

Forex Profits

2008-03-04T12:28:00.000-08:00

Look the advantages and weaknesses of trading using the hedged, grid trading system to trade volatile markets.

Look at how money can be made by breaking a number of trading truths or principles; there is nothing to gained by entering into buy and sell deals at the same time.

The hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let's take some to look at this more closely.

Let's say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100.

The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let's assume that the price moves back to level 100.

The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200.

Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even.

The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some champagne.

Pivot Points

2008-03-01T06:45:00.000-08:00

Pivot Point defined: A technical indicator derived by calculating the numerical average of a particular stock’s high, low and closing prices. A technical indicator derived by calculating the numerical average of a particular stock’s high, low and closing prices.

In a nutshell, pivot points are exactly what they sound like â€“ the point at which the market is expected to turn â€“ if itâ€™s been going down, a pivot point is the value at which it will reverse the trend and begin to climb. If itâ€™s been rising, then the pivot point is where the sentiment of the traders will turn and begin a downward trend. Obviously, being able to predict major movements in the money market is a valuable skill, since it hints at the where the market is moving and whether or not this is the time to trade or stick.

Pivot point trading is an especially popular method of mapping out a trading strategy. It was originally used by floor traders in the stock market who liked it because it allowed them to gauge where the market was heading with just a few simple bits of information and calculations. By knowing the high, low, opening and closing points from the previous day, they could calculate a point at which the market had â€˜turnedâ€™ to head upward or downward. Pivot points can help predict where the market is going â€“ and coupled with the resistance and support points, give you an idea how far in that direction it will go.

There are a number of ways to calculate the pivot points for the day, but the most common â€“ and easiest â€“ is to average the opening, closing and high points for the last dayâ€™s trading. There are other pivot points that can be calculated from those numbers as well. Before we talk about how to calculate them and what they mean, letâ€™s define a few terms:

Resistance â€“ A high point in a market chart that recurs regularly. Generally, itâ€™s the point where the market (or currency) will begin a downturn

Support â€“ A low point in the market chart that recurs regularly. Generally, itâ€™s the point where the market (or currency) will begin to climb back up.

Traditionally, support and resistance points are difficult to break through. Most of the time as the numbers approach that level; there will be a slight rebound in the other direction. An interesting phenomenon is that once a resistance or support point is broken, it tends to switch sides â€“ a broken resistance will often become a support for prices on the other side of the line.

The most common calculation for arriving at a pivot point is:

Pivot: (High + Close + Low)/3

Resistance: 2 * Pivot â€“ Low

Support : 2 * Pivot â€“ High

USD/EUR Date:02/03/06 14:40 O=0.83174 H=0.83188 L=0.83167 C=0.83188

Given this data for Feb 3, 2006, the pivot points for Feb 4, 2006 would look like this:

Pivot: 0.83180

Resistance: 0.83193

Support: 0.83172

Those numbers give me some points on which to base my strategy for the day. If the market opens above the pivot point, itâ€™s a bull market, and most advisors would go for long trades, since the direction of the market is up. If it opens below pivot, itâ€™s time to favor short trades and quick sales.

There are two common sales strategies using pivot, resistance and support points.

Breakout Trade: When a currency pair breaks through a resistance or support point, thereâ€™s usually a surge of activity around it. Buy if the charts show a break through a resistance, sell if the rate drops below a support point.

Pullback Trade: When the exchange rate drops back from a high, most traders will buy, based on other information thatâ€™s available. Itâ€™s a tricky move, though, since the pullback could just be a temporary pause in the upward momentum, or the beginning of a downward rebound.

Forex Trading

2008-02-25T15:59:00.000-08:00

Foreign Exchange Market, or Forex as it is commonly called, is an international exchange market to buy and sell different currencies from around the world. An investor has the ability to buy and sell these currencies in order to create gains from small movements in the value of one currency over another. The forex market is open from Monday at 0:00 GMT until Friday at 10:00 GMT. For this reason Forex traders are not limited to the general time constraints of the New York Stock Exchange or NASDAQ.

This versatility attracts many investors to become Forex traders. The liquidity of the Foreign Exchange Market is also very attractive for the Forex investor as trades range from 1 to 1.5 trillion dollars on a daily basis. These massive amounts of trades make it extremely difficult for any one trader to affect the market.

Welcome to Forex

2008-02-21T04:55:00.000-08:00

Foreign Exchange (Forex) describes the purchase of a particular currency from an individual or institution and the simultaneous sell of another currency at the equivalent value or current exchange rate. Essentially, the process of exchanging one currency for another is a simple trade based on the current rates of the two currencies involved.

At the core level of the world’s need for money exchange is the international traveler. When traveling from the US to England, for example, you will of course need the local currency to pay for transportation, food, and so on. Upon arrival at the airport you will surrender (sell) your US Dollars in order to receive (buy) the equivalent in British Pounds. In this example, you sold the USD and bought the GBP, conversely the foreign exchange counter bought the USD and sold the GBP. The prices at which you buy and sell currencies at are known as exchange rates. This rate or price fluctuates based on demand, political, and economic events surrounding each country’s currency.

The example above illustrates foreign currency trading in basic terms as it relates to world travelers. However, the market is also utilized globally by each country's central bank (i.e., America's Federal Reserve), investment and commercial banks, fund management firms (mutual funds and hedge funds), major corporations, and individual investors or speculators. Depending on the timing of such transactions, purchasing a currency with the intent of later selling it at a better exchange rate (and vice versa) can potentially yield profits for investors, of course there is a strong potential for loss trading currencies as well.

Utilization by so many parties is why the Foreign Exchange market is the world's largest financial market, with a daily dollar volume exceeding $1.9 trillion. This mind boggling volume is probably what led you to research the topic.

It is important to note that retail traders, such as yourself, will most likely be accessing the off-exchange foreign currency market (or Forex market) via an FCM (Futures Commissions Merchant) or broker. You will not be trading in the actual Interbank market itself. Your access to the total market will be determined by your chosen broker’s limitations. FCMs or brokers act as a bridge between you and their liquidity partner (sometimes larger global banks) that you would otherwise not have sufficient capital to do business with. The large majority of off-exchange retail foreign currency brokers act as market makers, meaning that by keeping many trades in house they create their own liquidity. Some retail brokers clear trades directly through to the larger banks that provide their liquidity. If you are new to the Forex market it would wise to research and understand your broker’s particular business model and method of clearing trades.

Unlike other financial markets, the Forex market operates 24 hours a day, 5.5 days a week (6:00 PM EST on Sunday until 4:00 PM EST on Friday). Through an electronic network of banks, corporations and individual traders exchange currencies, though as the market is primarily used as a means for speculative investing, actual physical delivery of currencies is almost never intended. Forex trading begins every day in Sydney, moves to Tokyo, followed by Europe and finally the Americas.

Forex Profitably

2008-02-19T14:26:00.000-08:00

Start with candlesticks. Get the best literature you can afford on candlestick charting and just study that to the point when you can be intuitive when looking at them. At this stage you can then bring in other indicators. Also you will discover this way whether forex/any trading for that matter is for you before you lose your money in case it is not for you as either you will become quite passionate about reading into market psychology prevalent in charts or it will bore you to death.

You need to enjoy the process to be really successfull. And what a process it is, so many people think it is a get rich quick and that is why only about 3% prevail - it will take a few years to be consistent enough to say you can earn a living from trading. Along with your candlesticks learn learn learn proper money management techniques (never risk more than say 2% of your capital, always use stops etc.). And know your own weaknesses, don’t ignore them.

There are contrarian traders out there but don’t buck the trend. Ever! Use a longer term chart to establish the trend, then zone in onto a shorter term chart for good entry and exit. Quite often you will need to be patient to satisfy this requirement alone.

You need your own developed intuition and approach!

G7 x Currencies

2008-02-18T07:01:00.000-08:00

In its annual meeting, the G7 virtually ignored the situation in forex markets. In previous years, the G7 used the so-called "communique," which essentially functions as a summary of the meeting, to rebuke China for not allowing the Yuan to appreciate at a satisfactory pace. This year, the RMB has appreciated markedly- by 9% on a trade-weighted basis- and thus, the G7 opted not to apply further rhetorical pressure. In addition, several of the most prominent EU member states had hoped to work a discussion of the Dollar into the communique, but alas, any mention was notoriously absent. Analysts have speculated that this is due both to America's political indifference towards the valuation of the Dollar as well to a disagreement over what the correct valuation should be, if indeed it is undervalued.

Debt Induced Recession

2008-02-14T17:58:00.000-08:00

Debt is a way of life!

Corporations, individuals, and Governments finance some of their spendings through borrowing. This some times may not be very bad and can even be advantageous in many instances.

For Corporations, financing through debt keeps cash available for other uses.

For Governments, issuing debt allows them to run uninterrupted until taxes can be collected.

For Individuals, debt is the only way most can purchase items such as homes and cars.

But no matter who does the borrowing, too much debt can be a heavy burden that weakens financial health. When the interest on debt becomes too large an expense, other expenses and spending must suffer.

This reduction in spending by Corporations, Governments and individuals, can cause a significant slowdown in the economy and possibly a recession.

Although nowdays, a debt-induced recession is by no means a certain conclusion ...

The reality is that conditions do exist that may make it a rather distinct possibility!

Central Banks and Monetary Policy

2008-02-14T17:57:00.000-08:00

Central Banks attempt to achieve economic stability by varying:

A. The quantity of money in circulation.

B. The cost and availability of credit, and

C. The composition of a country's national debt.

Central Banks have three instruments in order to implement monetary policy:

A. Open Market Operations:

The buying or selling of Government bonds by the Central Bank in the open market. If the Central Bank were to buy bonds, the effect would be to expand the money supply and hence lower interest rates, the opposite is true if bonds are sold.

B. Reserve Requirements:

A percentage of commercial banks' deposits are kept on deposit in the Central Bank. This is affecting the money supply and credit conditions.

If the reserve requirement percentage is increased, this would reduce the money supply by requiring a larger percentage of the banks deposits to be held by the Central Bank, thus taking them out of supply.

As a result, an increase in reserve requirements would increase interest rates, as less currency is available to borrowers.

C. The Discount Window:

Is where the commercial banks are able to borrow reserves from the Central Bank at a discount rate. This rate is usually set below short term market rates. This enables the institutions to vary credit conditions, there by affecting the money supply.

By affecting the money supply, monetary policy can establish ranges for inflation, unemployment, interest rates, and economic growth. Without much debate, the effectiveness of monetary policy, its timing and its eventual impacts on the economy are very obvious.

Insights into monetary policy are very important to the investor since the availability of money and credit are key considerations in the pricing of an investment.

Of paramount importance is also the effect of the interest rates, because with higher interest rates people are less likely to apply for a loan.

High interest rates result in more people keeping their money in the bank rather than in the stock market. Why invest in the stock market when you can earn a good return in bonds and savings accounts with much less risk?

On the other hand, lower interest rates can spark the economy because people are encouraged to take out loans to buy goods and services.

Lowering the interest rates also means smaller returns from your bank, so you're more likely to put your money in the stock market instead.

In simple terms, if interest rates are high, stock prices generally go down and vice versa.

The Price/Earnings to Growth (PEG) Value Ratio

2008-02-14T17:56:00.001-08:00

The PEG (Price/Earnings to Growth) ratio is a tool that can help investors find undervalued stocks. It's not as well known as its "cousins," the P/E and P/B ratios, but is just as valuable.

When used in conjunction with other ratios, it provides investors a perspective of what the market thinks of a stock's growth potential relative to Earnings per Share (EPS) growth.

The PEG ratio compares a stock's Price/Earnings (P/E) ratio and its expected Earnings per Share (EPS) growth rate.

If the PEG ratio is equal to 1, it means that the market is pricing the stock to fully reflect the stock's EPS growth. Which is "normal," in theory, because the P/E is supposed to reflect a stock's future earnings growth in a rational and efficient market.

If the PEG ratio is great than 1 it could indicate that the stock is overvalued or that the market expects future EPS growth to be greater than what is currently the consensus number.

Growth stocks typically have a PEG ratio greater than 1 because the investors are willing to pay more for a stock that is expected to grow rapidly -otherwise known as "growth at any price." Or it could be that the earnings forecasts have been lowered but the stock price remains relatively stable for other reasons.

If the PEG ratio is less than 1 it could be a sign of an undervalued stock or that the market does not expect the company to achieve the earnings growth that is reflected in the estimates.

Value stocks usually have a PEG ratio less than 1 because the stock's earnings expectations have risen and the market has not yet recognized the growth potential. On the other hand, it could also indicate that earnings expectations have been reduced faster than the issue of new forecasts.

It is important to note that the PEG ratio cannot be used in isolation. Like all financial ratios; in order to properly use PEG ratios investors must use additional information in order to get a clear perspective of the investment potential of a company.

Investors must understand the company's operating trends, fundamentals, and what is reflected in the expected EPS growth rate.

Additionally, the P/E and PEG ratios must also be analyzed in relation to its peer group and the overall market in order to determine if the stock is overvalued or undervalued.

Money Markets

2008-02-14T17:54:00.000-08:00

Money Markets are the financial markets for short-term borrowing and lending.This contrasts with the capital markets for longer-term funds.

The need for money markets arises because receipts of economic units do not coincide with their expenditures. These units can hold money balances — that is, transactions balances in the form of currency, demand deposits, or NOW accounts — to insure that planned expenditures can be maintained independently of cash receipts.

Holding these balances, however, involves a cost in the form of foregone interest. To minimize this cost, economic units usually seek to hold the minimum money balances required for day-to-day transactions.

They supplement these balances with holdings of money market instruments that can be converted to cash quickly and at a relatively low cost and that have low price risk due to their short maturities.

Economic units can also meet their short-term cash demands by maintaining access to the money market and raising funds there when required.

In the money markets, banks lend to and borrow from each other, short-term financial instruments such as certificates of deposits (CDs) or enter into agreements such as repurchase agreements (repos).

Money markets provide short to medium term liquidity in the global financial system.

Trading takes place between banks in the "money centers" (New York and London primarily, also Chicago, Frankfurt, Paris, Singapore, Hong Kong, Tokyo, Toronto, Sydney, San Francisco).

Money market instruments are generally characterized by a high degree of safety of principal and are most commonly issued in units of $1 million or more.

Common Money Market Instruments:

Bankers' Acceptance:

A draft or bill of exchange accepted by a bank to guarantee payment of the bill.

Certificate of Deposit:

A time deposit with a specific maturity date shown on a certificate; large-denomination certificates of deposits can be sold before maturity.

Commercial Paper:

An unsecured promissory note with a fixed maturity of 1 to 270 days; usually it is sold at a discount from face value.

Eurodollar Deposit:

Deposits made in U.S. dollars at a bank or bank branch located outside the United States.

Federal Funds (in the US):

Interest-bearing deposits held by banks and other depository institutions at the Federal Reserve; these are immediately available funds that institutions borrow or lend, usually on an overnight basis. They are lent for the federal funds rate.

Municipal Notes (in the US):

Short-term notes issued by municipalities in anticipation of tax receipts or other revenues.

Repurchase Agreements:

Short-term loans -- normally for less than two weeks and frequently for one day -- arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.

Treasury Bills:

Short-term debt obligations of a national government that are issued to mature in 3 to 12 months.

Money

2008-02-14T17:53:00.000-08:00

"Money is like a sixth sense without which you cannot make a complete use of the other five."

William Somerset Maugham (1874 - 1965)

Money permeates every relationship in life, every interpersonal interaction:

Friendship and Courtship,

Partnerships,

Investments,

Living Together,

Marriage,

Divorce,

Death and etc!

Money is a commodity which takes on other meanings and emotions.

Money becomes the emotional football that everybody may use to throw back and forth at all others and never resolve their real issues.

Workers earn it,

Spendthrifts burn it,

Bankers lend it,

Women spend it,

Forgers fake it,

Taxes take it,

Dying leave it,

Heirs receive it,

Thrifty save it,

Misers crave it,

Robbers seize it,

Rich increase it,

Gamblers lose it,

Stock brokers sometimes (?) multiply it and ...

We will all always can use it!

Liquidity

2008-02-14T17:52:00.001-08:00

There are two aspects of liquidity:

A. How readily an asset can be turned into cash (the ease with which buyers and sellers can be brought together and can agree on a price) is called liquidity.

An important consideration in assessing risk is how liquid various financial assets are. Therefore, assets that are less liquid tend to have a wider spread between the "bid" (the price offered by a would-be buyer) and the "ask" (the seller's asking price).

Cash is King!

You need cash and liquidity for freedom and security. The cash in reserve provides money for not only emergencies but opportunities as well.

A cash reserve provides the foundation for your entire financial position. You should get your cash reserve in order before taking on any risky investments with money you can not afford to lose!

Boring but prudent!

Five to six months "salary or seven to eight months" expenses are guidelines generally considered reasonable for emergency reserve funds.

B. An important factor when choosing which stocks to buy is liquidity.

This type of liquidity is best measured with volume. Higher the average daily volume is, higher the liquidity is.

High liquidity ensures that at the moment when we want to buy or sell shares, there will be enough sellers/buyers on the other side of the fence!

The Real Estate Bubble!

2008-02-14T17:50:00.000-08:00

We live in a time when wish fulfillment matters above all.

Lately I'm seeing a prime time TV ad with several success-driven faces mouthing the phrase, "I will own a Jaguar."

Never mind that a Jag today goes for what a starter home in a Midwestern suburb used to cost about 10 - 15 years ago.

And speaking of wishes and homes, we know that ownership of the latter is, after all, the American dream. It's just that cost and income have always kept some folks from partaking.

Yet lenders have apparently discovered a way to create the illusion of owning a home when, arguably, there is no "ownership" at all.

For a lot of wannabe homeowners, lining the pockets of lenders is the price for playing along.

Trends in residential real estate over the past decade help explain how this illusion was conjured up.

Let's start with the recent past.

As the economy struggled over the past year, the media has repeatedly said that the real estate market remains prosperous. Interest rates fell to remarkably low levels and stayed there; a record percentage of families in the U.S. became homeowners.

In theory, low interest rates produce more affordable fixed-rate mortgages, a formula for long-term stability.

But in reality, the data suggests that low interest rates have invoked the law of unintended consequences: new homeowners are taking on far more debt than they can afford, via the riskiest mortgage loans on the market.

A few facts:

* First-time homebuyers made an average down payment of 3% in 1999, down from 10% a decade earlier.

* As a percentage of disposable personal income, mortgage payments have reached the highest level since the Federal Reserve began following the data -- a 45% increase since 1980.

* The percentage of people choosing adjustable-rate mortgages -- which increase the size of mortgage payments as interest rates rise -- has virtually doubled in the past year, to 30%.

So -- people didn't save much before buying their home, bought more home than they could really afford, and many of them will have to pay more each month if rates begin to rise.

Now, this all sounds less serious if home prices rise at the rate we've seen in the past few years.

Will that continue?

Not according to one real estate analyst recently quoted in The Christian Science Monitor. He follows property values in 120 markets around the country, and says that a record 45% of those markets are overpriced based on the relationship of income to housing prices.

"Bubble" is the word he used!

If the bubbles start to burst, home mortgages will resemble car loans: the owners can't build real equity because the value of the asset is falling.

Here we get to the scary part, namely the illusion of home ownership I mentioned above. The "mortgage as car loan" comparison becomes even stronger.

Forex

2008-02-14T17:49:00.000-08:00

While the value of a country's currency remains stable within its own borders, in the same time its value can widely fluctuate compared to that of other countries.

Exchanging rates keep on changing constantly and supply and demand for any given currency, and thus its value, are influenced by economic factors, political conditions and market psychology.

Betting on the spreads between countries" currencies by placing "buy" or "sell" orders is what Forex trading is all about.

Although, the value of the daily turnover in the forex markets substantially exceeds those of other markets, this is not the domain of the big players only. Small investors can also participate!

The market for foreign exchange is the world"s largest financial market.

Trading is conducted through an "over-the-counter" network of traders from major commercial and investment banks linked by computer terminals. Participants include importers and exporters, as well as traders, portfolio managers and foreign exchange brokers.

Major trading centers include London, New York and Tokyo, with total trading volume in excess of $1.5 trillion dollars of foreign currency per day.

More than half of all trading directly involves the exchange of U.S. dollars and other currencies are traded against U.S. dollars since currency dealers quote other currencies against the dollar when trading among themselves.

Investment Philosophy

2008-02-14T17:48:00.000-08:00

People choose to spend their money in many ways. The bulk of most people's income goes for day-to-day living expenses:

Food, shelter, and clothing.

But even if you live a no-frills lifestyle, it is important to make some investments for the future. A relatively small sum set aside each year can make an important contribution to your long-term financial security.

The theory behind investing is elementary:

Money not needed now can be invested to produce more money later, which will come in handy when needed.

We all need money, not just for our day-to-day lives, but for bigger plans -- buying a house, a car, a business, etc.

There is one major idea which comprises the philosophy of investing:

The Future Value of Money!

Future value is the sum to which an amount invested today will grow given some appreciation rate.

People invest on the hope or promise that they will receive more money later. Present value is the value in today's terms of a certain amount of money in the future. This is based on some estimated rate-of-return over a long period of time.

When you invest ...

Your money is working for you ...

Rather than the other way around!

Stock Market Crash. A Hypothetical Scenario?

2008-02-14T17:47:00.000-08:00

Twenty months ago you bought the XYZ stock for 100. You were right to follow your hunch with the XYZ's. Your 100 has skyrocketed into 275 in just twenty months!

Well, this Thursday you've been checking the stock prices and in the newspaper the headline reads "CRASH". You read on and discover that yesterday the stock market had dropped another 9%, not to mention the fact that XYZ's stock value had been deteriorated to 57. You can't believe it!

Twenty months of expectations and dreams, all gone, in just a few days!

What brought about this crash?

Why such a drop in such a little time?

One major reason for the crash was fear. Fear of a correction. Fear of a drop. Fear of being to late to get out ...

The past twenty months had brought large stock increases, people had been making fortunes on the huge surges in the stock market. People began to fear that the market wouldn't be able to go up forever, and eventually it would fall, and create what is called a correction.

The fear began to accumulate about twenty days ago, when The ABC Journal published an article entitled, "Stocks May Face a Great Correction." It voiced fear that a correction would bring on a landslide. People began to listen, and the big fund managers began to worry and started selling.

On Sunday news of a potential collapse was the straw that broke the camel's back.

The morning of last Monday, began with a quick loss of around 7%. Although, the market did rebound a little before closing, the landslide had begun.

On Tuesday the market opened and started losing too fast to hold back! Many of the big fund managers were selling off fast the rest of their holdings!

On Wednesday the market plunged, and after the closing bell rang, there was silence between the brokers.

People were speechless ...

And the majority of them were broke!

Investing and the Frustrated Speculators

2008-02-14T17:46:00.000-08:00

How come when I buy a stock it always goes down?

How come I almost always get the feeling that the market is out to get me?

Well the market is never out to get you ...

But ...

You must take the heat out of the market!

Therefore, you must always be ready to accept that the market will almost always go lower than you think.

There is an old trader's expression:

I'd rather be out of a market wishing I was in,

than in a market wishing I was out.

At some point you are going to notice that markets seem to go down faster than they seem to go up.

I think that this is because speculators are most of the times initiating long positions, hoping the market will rise.

Therefore, speculators are more easily panicked than investors, so when the market goes against them, they bail out in a flurry.

Herd Mentality: Are You a Lemming?

2008-02-14T17:44:00.000-08:00

Many investors react to market conditions like lemmings:

Stampeding up the high mountain when markets are rising and down into the cold deep sea when markets are falling!

This "herd" mentality can be extremely dangerous to your pocketbook.

Why?

Because investors often get into the market too late and get out too early!

You should never let emotions cloud your trading judgment. But you can turn the crowd's fear and greed to your advantage! To exploit market psychology, you must act in a contrarian fashion, taking the contrary course when the crowd falls prey to its emotions.

Extreme optimism can coincide with market tops. People think the sky's the limit and send stock prices flying. Savvier investors sell into this frenzy and run to cash. The market tanks soon afterward!

Extreme pessimism can be bullish. Toward the end of a big decline, the last bulls throw in the towel and sell with a vengeance. Cooler heads smell a fire sale. They dive into the market and buy equities with both hands to launch the next rally!

Studies by economists and psychologists have found that investors are most influenced by recent events --market news, political events, earnings, and so on-- and ignore long-term investment and economic fundamentals.

Furthermore, if a movement starts in one direction, it tends to pick up more and more investors with time and momentum.

The impact of this lemming-like behavior has been made worse in recent years because financial, economic, and other news affecting investor psychology travel faster than ever before.

Capital can also flow now between nations with surprising ease, so that international markets respond more quickly to sudden changes with a domino effect in the direction of investor buying and selling.