What Is Technical Analysis: Statistics or Voodoo?

When you take your finances in your own hands and begin managing your own stock investments, you have two main ways you can analyze the stock market: fundamental analysis or technical analysis. These two types of analysis can be applied not only to stocks but also trading options, futures, Forex, and bonds. Nowadays, some combination of fundamental analysis and technical analysis are usually used and there are a ton of stock market software and websites that makes such analysis much simpler. What's the basic difference between the two types of market analysis?

    * Fundamental analysis is what most people are familiar with and probably had exposure to in school. Fundamental analysis looks at the companies, their business, and economic factors that may affect the stock's future price. This is more common among investors, who look to price earnings growth and stock valuation for long term growth.
    * Technical analysis, while often unknown to the public, has been around about as long as the markets have. It's not a secret, so why not learn to use it's advantages? This method assumes that non-random patterns and trends exist in the financial markets, though not necessarily all the time. Technical analysis is more common among traders, who are often more active and don't have the time to wait for the business to affect the stock price, so they look for patterns in the stock price itself.

Unlike fundamental analysis, technical analysis focuses on analyzing the price of the stock (or whatever asset you're investing in), time, volume, patterns, and trends. So, said simply, technical analysts study the statistics of the stock itself, not the company behind it. The goal of using technical analysis is to anticipate instead of predicting the outcome by looking for clues in the stock's statistics, much like sports fans look at star player's stats.

Why Use Technical Analysis?

   1. Allows to prepare for buying and selling opportunities and dangers in advance. This takes a proactive approach rather than having to wait for company financial reports, compiled only at the end of the quarter and end of the year.
   2. Spend more time looking for opportunities with various price and volume patterns, which usually takes less time than studying a company's financial data and business prospects.
   3. Better timing for buy and sell entries and exits, based on the statistics of patterns other data
   4. Better knowledge of what prices to buy and sell, again based on statistics and past records of the stock's data.
   5. Choose better trade opportunities quickly by looking at a chart or even using stock market software that identifies specific patterns you know gives you a statistical advantage

Basic Technical Analysis Concepts for Buying & Selling (Trading)

   1. Trading with the Trend: simply following the current direction of what you want to buy or sell
   2. Support and Resistance: identifying supporting prices (where the stock have stopped going down and turned up) and resistance prices (where the stock stopped going up and turned down), traders assume this pattern to continue and buy at support and sell at resistance.
   3. Breakouts: stocks may stay in a range for a long time, even for years, but eventually they breakout, either higher or lower. Traders can take advantage of this breakout.
   4. There are many more math formulas, statistics, patterns, and strategies that investors and traders have been able to use to decipher stock data. Some examples you can research include: Fibonacci, Elliott Wave, market timing, and volume profiles.

How to Use Technical Analysis as an Investor or Trader?

   1. Position trading (medium to long term) - Whenever you buy or sell, you're "trading." Both investors and traders "trade," the difference is just how long you hold an investment and how active you are. Both investors and longer-term traders do what's called "position trading.
   2. Swing Trading (short to medium term) - Traders who buy and sell anywhere from a couple of hours to a couple of days.
   3. Day trading (aka scalping) - Trading that happens during the day between the market open and the market close only. Day traders don't hold a position overnight, usually to bypass the potential risk of what could happen between today and tomorrow.

Jeffrey lin is an individual futures, options, and stocks trader. His stock market experience helped him launch MarketHEIST.com, a magazine comparing and reviewing investment services and stock trading tools so consumers know what may work for their individual situations. Through MarketHEIST, Jeffrey also produces various stock market video series.

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Live Stock Market Report: The Stock Market Is Unpredictable

If one tries to detach himself temporarily from the fast-paced and ever-shifting world of the stock market, and the study of how one could predict the possible behavior of each stock, he could gain more advantages though observation. He can take a better look on how speculators in the stock market are so obsessed in their search for a one-shot miraculous formula that would bring them instantaneous overly high profits just by following that miraculous formula every single time. They have always been looking for secret techniques that can tell them whether they buy long or sell short a certain stock just by looking at the figures, numbers, and charts that are being stuck into their faces.

Yet, almost everyone - if not absolutely everyone - who so religiously followed the whatsoever formula they have found has ended up losing their money and gaining the lesson that the stock market is just as predictable as the world - it is not. The stock market is unpredictable.

Take it from the expert, even the Oracle of Omaha, the great value investor Warren Buffett has lost his bets on several companies for several times as well. Just try to make a little consideration out of it for once. If an investor who is so reputable and so successful has even had his predictions turning out to fail, how could someone who has even had less experience in speculating in the stock market (when compared to such a man) expect himself to be able to predict the next position of a certain stock in the future with 100% certainty?

This is not to discourage you or anyone from being an investor despite saying that the stock market is unpredictable. This is just to warn you and to tell you that whether how thorough you have made your analysis, you must still have to accept and prepare your self that there are still chances that your predictions could still be wrong. Preparing your self for the worst, and remaining still is the best favor you can do for your self if the worst ever happens.

But then let us segue; you could still make predictions that have less uncertainty than others. Much like many things on the physical world, the behavior of a certain stock can be more predictable if you're prediction a shorter scope of time span. Think of this analogy: the landing spot of a dart that has been thrown from a meter apart is less predictable than that of a dart that has been thrown from half a meter.

This is where live stock market reports could become useful. Because in live stock market reports, you can see the immediate motion of the price of a corporation's stocks, thus, you can make a prediction that could span for a few hours or so. You will know that the moment seems to tell that a certain stock is going to have higher prices later if the number of buyers of that stock keeps on increasing since the past few minutes or hours. You can then immediately tell your brokers to buy that stock as soon as possible, so that you can sell those at a higher price while the number of buyers is still increasing.

Live Stock Market Report For more information visit our website: www.livestockmarketreport.net

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How to Find the Value of Old Stock Certificates

Have old stock certificates and want to know what they are worth? There are a few steps you can take to find out the value of you stock certificates that will most probably take you the better part of one afternoon immersed in corporate change databases if you know where to look. You will need a decent business knowledge, the name of the corporation and transfer agent of your shares (both found on stock certificate) and access to corporate changes directories (check your local library). There are reasonably priced databases although local libraries often have these resource available. Resources you're looking for; Directory of Obsolete Securities, Robert D. Fisher Manual of Valuable and Worthless Securities, Survey of Predecessor and Defunct Companies by The Financial Post or the Capital Changes Reporter.

Any one of these books will be sufficient. In most cases these books are held in the reference section. To find the value of our certificates, simply follow the corporation name found on your stock certificate through one these directories. Let's make our example Kaufmann Department Stores Securities Corporation let's say we hold 1000 shares. Kaufmann Department Stores Securities Corp. is found on page 1045 of the Directory of Obsolete Securities. The book states that Kaufmann Department Stores Securities Corp. merged to form Kauffmann Department Stores, Inc. Each common share was exchanged for 0.3069438 preferred share and 3.069438 common shares in Kauffman Department Store, which then merged into May Department Stores in 1946. The book then shows that in on August 30, 2005 May Department Stores merged into Federated Department Stores, Inc.. Now let's follow the last entity, Federated Department Stores, Inc. on it's own page.

Federated Department Stores, Inc. is found on page 674 of the Directory of Obsolete Securities. The book states that the company reorganized in 1994, which is irrelevant since our shares were acquired in the exchange by the company in 2005, it is followed with information that the company changed name to Macy's in 2007. Notice besides the company name there is in brackets a state abbreviation, the state abbreviation refers to the state that the company was incorporated in and will be valuable to hold on to. In this case (DE) is found beside the name, as such we can assemble that Delaware is the state of incorporation.

Now we have established the current status of the shares, current corporation is Macy's. If your shares were lost or you have any other issues with certificate logistics. Best to look into this would be to contact the company's transfer agent. Our next step will look into how to do so. Let's continue with Macy's from previous steps. The company was (as we assembled from the Directory of Obsolete Securities) incorporated in Delaware (DE). From the state of Delaware we can receive the date of termination of the company and the company's last transfer agent, which will be critical later on.

The site below offers links to all business entity searches in all states including Delaware.

http://www.secstates.com/

If the company you are researching is incorporated in Canada the site below offers links to all Provincial Resources

http://goldsheetlinks.com/obsolete.htm

Most states have online search options although a few still deal only over the phone. This changes state to state although the state used in our example, Delaware, does have an online business search that will allow for us to retrieve all records. The Delaware Business Entity Search retrieves for us the corporate contact information, the transfer agent contact information and in some cases extensive company details. The contact information that will help you retrieve information on your certificates will always be available here.

To review our research, we started at the local library where we able to track down the various corporate changes that the company had participated in. Then from the Delaware Secretary of State's site we found a Business Entity Search, where we were able to locate the Transfer Agent information.

The transfer agent will be able to confirm with you all of the corporate changes the stock ownership that your company has undergone and the result for you. In some cases stocks split and are acquired and so your initial ownership could at present be of a different number of shares in a different company is a case like that the transfer agent can send you a correct certificate.

At this point you have pieced together the entire corporate history for the shares that you own! If the transfer agent requires for you to get proof-of-purchase for your shares or any other legal matters arise it is at this point where professional help can be a very valuable resource. There are a few stock research firms that are out there for the more complex corporate histories with restructurings and the like that we have not covered. ( Stock Cert Expert ) is if you choose the route of having professional stock research service guide you, the Gold Sheet Links references above also shows many professional research firms.

In all best of luck in establishing you share's current monetary value and corporate status!

Simon Burns
Old Stock Certificates Research

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Investing in the Hot Penny Stock Market

Is investing in the stock market reliable? The stock market is one of the most important sources for companies to raise money. The dynamics of economic activity is in the price of shares and other assets. It allows businesses to publicly trade or raise additional financial capital by selling its shares in a public market. There is also a stock that trades at a relatively low price under $5, but is capable of huge profits and is called penny stock. It is also known as small cap stocks or can be defined as the price per share. They are the share offerings of companies that are relatively new, or too small to have a stock exchange listing on the large stock exchange. These stocks are considered to be hypothetical and high risk because of their lack of liquidity, small capitalization and disclosure.

Penny stocks are considered as "hot penny stocks" when the value of stocks rises fast. In investing in hot penny stocks you should consider the monetary 'fundamentals' of the company. When you say fundamentals, it means the stability of the assets, liability and cash flow of the organization. You need to know the financial statement and have extricating evaluation of its worthiness. If you are investing in a company that does not have stable fundamentals, more likely the money you invest in will be forfeited. There are also benefits if you invest in hot penny stocks, some small cap investments end up being extremely worthy. You can get better returns with penny stocks than from a combination of big cap stocks.

The undervalued stocks are highly inclined towards growth and the potential of improved financial gains. In order to refrain from losses, it is best to buy stocks at a lower price and wait for the stocks to rise abruptly and then sell. You should also keep track on how much every stock goes up or down and makes decisions on when to sell or buy the stocks.

Penny Stocks can be confusing to work with for most people, however if you know how to navigate the data and formulate a plan great profit can be realized. Systems can streamline the data and put into place a day-to-day strategy that you can use to limit the downside losses and put into place a winning buy and sale process. Many of these formulas are highly guarded secret strategies tested and proven and are used by thousands of people worldwide. You should have a winning system on your side helping you to make money. If you would like to use a proven system you can click below to learn more about penny stock systems.

In my opinion it is the perfect place to start out. Some people never leave penny stock, why would you if you are making good money and you have a system down. Because you can start with such low entry cost and limit your investment and use some techniques to reduce the down side you can profit without the big investment.

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What Are Penny Stocks and How to Choose Profitable Ones?

In order to understand what a Penny Stock is, one must understand the stock market indexes. The best known indexes in the United States are the Dow Jones Industrial Average, the S&P 500 Index, the Nasdaq Composite Index and the Russell 2000 Index. These Indexes are very important as they are used to measure not just the performance of the stock markets in general, but also the state of the overall economy as well.

Each of these Indexes is formed in a slightly different way. For example, the Dow Jones Industrial Average Index contains 30 different stocks that represent various different industries. On the other hand, the S&P 500 Index will contain stock of the 500 largest US companies, the Nasdaq is the largest electronic screen-based equity securities trading market in the US, the Russell 2000 Index contains the bottom "small-cap" 2,000 stocks in the Russell 3,000 Index. Small-cap refers to the market capitalization of a business and describes the size of that business corporation. Thus the Russell 2000 is formed with the stock of the smaller corporations. These indexes are mainly used by institutional investors, such as mutual funds. Quite often, the mutual funds are required to own the stocks that are part of the index, they become their index portfolios. For example, a S&P Index mutual fund will have to own the 500 stocks that form the S&P 500.

The Penny Stocks are more easily found in S&P main US indexes: the S&P 500, which covers the highest range of stocks, the S&P Midcap 400 Index which covers, as its name indicates, the mid-cap range of stocks, and the S&P SmallCap 600 Index, which covers the lowest range of stocks.

The way these different indexes are maintained also differs. The Dow Jones Industrial Average does not change very often, that means that its stock base does not move about, changes in the stocks that are traded happen every so many years. The S&P Index, on the other hand, move stock around several times a year. This has a direct importance when talking about Penny Stocks as we will see in a moment.

S&P maintain their indexes through a committee which keep an eye on the state of the companies that are already part of the Indexes and on those companies which are being considered to join any of the Indexes. The committee is in charge of adding stocks or indeed, if a company is not performing well, removing the stock from the Indexes. Once these stocks have been removed from the S&P Indexes, they will also be rejected by institutional investors such as fund managers. These stocks are called Wall Street castaways or Penny stocks!

Not all the stocks that are removed from the Indexes will turn out to be profitable. There are different reasons for a stock to be removed from the Indexes. The more straight forward delistings can be due to a merger or an acquisition within the company, or a spin-off, corporate restructuring or bankruptcy. The stocks that are removed through those reasons will not be good stock for making a profit. There are a different set of reasons a stock will be removed for, these are generally due to the stock no longer meeting S&P's guidelines. These can include low market capitalization, lack of representation, that is has traded below $2.00, or that it ranks in the last place in their list of stock. It all means the same, the stock is not performing how S&P would like it to, so it is removed from the Indexes. These are the Penny Stocks that can be bought for profit.

Follow my blog for more tips and up-to-date information on trading: http://www.train-to-trade.com/blog

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Top 10 Reasons Why You Should Self-Direct Your Retirement Instead Of Investing In Mutual Funds

There are thousands of so called financial advisors that tell you that you should invest in mutual funds, money market accounts, stocks, bonds and life insurance policies and diversify your retirement portfolio. This is some of the worst financial advice you can get and the general public has been duped by the large investment companies like Fidelity, Charles Schwab, and the large banks for years. These so called financial advisors that work for these big companies have very limited to no training and are not incentivized in the right ways. They make so much money off of trading fees and annual fees that you can never get ahead even if they could outpace inflation in the first place with their investments. Well you do not have to put up with this theft anymore. There are retirement vehicles and custodians out there just like the Fidelities and Charles Schwab's that enable you to self direct your retirement into almost any investment options you want and control your own financial future instead of handing it off to one of these so called financial advisors. What is a self-directed retirement account? It's an account just like what you would have in Fidelity or a similar company but you can invest it in pretty much whatever you want instead of being limited to what the Fidelities of the world allow you to invest in, that they make the most fees on. So you can open an IRA, 401k, Roth IRA and HSA (Health Savings Account) that you can actually make decisions with and invest with. Here are the top 10 reasons you should self direct your own retirement instead of giving it to one of these large companies that basically steal your money in fees.

(1) Self-directing your retirement account is the only way to protect your own retirement. If you do not take control of your own retirement investing and educate yourself on alternative investment options you will lose purchasing power and your retirement accounts will probably lose another 30% - 40% like we just saw with some of the major economic problems we are seeing. Massive inflation is looming so you have to invest in assets that produce a higher return.

(2) Self-directed custodians typically have fee structures that do not completely deplete your returns like the traditional IRA and retirement companies. Typically you have much smaller transaction fees, much smaller annual fees and you can find ways to cut down on fees even more as a percentage of your retirement account. You want to keep the interest and returns you make, not pay them back in fees which can significantly hinder your retirement's growth.

(3) You can build your retirement a 1000% faster by self directing your retirement than not. If you are investing in traditional investments like mutual funds and stocks you are only going to make the long term historical average of those investments at best depending upon the economic stability of the market. The long term historical averages are close to 8% - 10%. With inflation historically at 3% - 3.5% and even higher inflation expected that is not a high enough return. By investing in alternative investment options like real estate you can make 15%+ returns on your money without even using leverage. You can even leverage real estate (get a loan for real estate) inside your own retirement account increasing your returns to 20% plus. Now that is power especially when you can do it safely with the right risk mitigation techniques in place.

(4) By self directing your own retirement account you can actually actively control your investments. When investing the traditional way you have absolutely no control and have a significant amount of risk when investing in mutual funds and stocks. You are at the mercy of what the market does. When you self direct your own retirement you can control the assets inside your account. You can structure the investments so that no matter what the market does you are making residual cash flow inside your account so you do not have to worry about market fluctuations. You also have the power to increase the value of the assets inside our account. Also, if you buy discounted real estate inside your IRA not only can you then go sell for a huge profit but you are building your retirement account tax free.

(5) Tax free investing is one of the largest benefits of investing in a self directed IRA. Can you imagine buying a rental property worth $100,000 for $75,000, renting it out for $1,000 per month, having all of the income going back to your retirement account tax free and then when you go to sell the property for $100,000 the $25,000 in profit is tax free also. No capital gains taxes and no taxation on the rental income. This can compound the growth of your retirement accounts at an amazing pace.

(6) Building an annuity inside your retirement account is crucial to your retirement plan. For example, if you need $5,000 a month to live on during retirement and are able to make a conservative 10% on your money inside your account you need $600,000 in your retirement account in order to retire and NEVER deplete your principal. If you leverage your investments and make 15% on your money inside your retirement account you only need $400,000 in your retirement accounts. So unlike what most financial planners will tell you, you don't need $10,000,000 dollars inside your retirement account to retire. Now keep in mind if your expenses are $5,000 per month, you want to be making $7,500 per month passively so that you can continue to build your income and protect yourself from the loss of purchasing power due to inflation.

(7) Current tax planning and saving on current taxes is a huge advantage for self directed investments. If you invest in an IRA your current contribution limit is $5,000 and $16,000 for a 401k. This can bring a big tax advantage because the contribution directly decreases your taxable income dollar for dollar. If you setup a solo (k) plan or pension plan you can contribute close to $100,000 per year and reduce your taxable income by $100,000! This is unreal. You are saving $35,000 per year by doing this if you are in a 35% tax bracket. Tax rates are rising because the government and states are broke so it's even more crucial to plan for taxes. You can then go take that $100,000, invest in passive cash flow investment property right and have the income making you 15% plus on your money. With both combined you just made $50,000 ($35,000 tax savings + $15,000 interest) on your $100,000 that year. Now if that is not going to get you to your goals I don't know what will.

(8) Self directed investing increases your education and ability to protect yourself instead of relying on someone else for your retirement. By self directing your retirement you are now taking control of your own retirement. With that comes the need for you to educate yourself on additional investment options and the risks and rewards of those options. This education is going to be key to your future financial success and stability. The more you educate yourself the more stable you will be because as economic changes happened you will be in a better position to protect yourself and adjust your retirement portfolio according to those changes.

(9) Additional investment options are needed in order to secure your future. There are so many investments that produce additional returns. You can still invest in stocks, bonds, mutual funds like traditional companies allow you to invest in but you can also invest in real estate, promissory notes secured by real estate, tax liens, businesses, syndicated and structured investments and much, much more. Your options are limitless.

(10) Your piece of mind knowing that you have been able to structure yourself to protect against economic fluctuations is HUGE. Now you can rest easy knowing that you have educated yourself correctly, have invested in vehicles that can give you higher returns, and have the power to control your own financial destiny is the best benefit you can ask for. Most people have little to no financial knowledge and that is why most people are broke. The more you educate yourself the more successful you will be.

There are many companies out there that can help you self direct your retirement account and many companies out there that can help you structure your self-directed IRA into multiple cash flow streams. Learn from those companies and push yourself to take action on your own financial future instead of relying on so called financial advisors to do it for you, but are failing at an alarming pace.

Owens Consulting Group founder Mathew Owens is a California licensed CPA and a full time real estate investor. Mathew has 8 years of experience working as a CPA, auditor and business advisor, and he has completed over 100 transactions in the past three years, representing approximately $10 million in real estate, most of which has been sold to cash flow investors. Read more of his blogs at http://ocgproperties.com.

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Is Lotto Really A Viable Retirement Solution?

According to a Canadian survey of baby boomers conducted for TD Waterhouse in 2010, 32% of those polled said they were counting on winning a lottery to fund their retirement. "While this statement may be tongue-in-cheek, according to the survey results, this group is less likely to have a financial plan and more likely to be anxious about retirement and feel behind in their savings," according to a TD Waterhouse statement. Whether the responses about winning lotto were serious or not, the data clearly indicated that a lack of retirement security is a source of distress for those who responded.

A separate poll released early in 2011 by the Canadian Imperial Bank of Commerce (CIBC) indicated that you are more likely to be more successful in your financial planning if you have a goal in mind and a roadmap to get there. In a survey for Standard Life, 41% of those respondents were unsure if their rate of saving would provide enough for them at retirement.

Typically, financial advisors advocate "save more, save more, save more" as the answer to how to increase the amount available for retirement and other needs. But for many, saving more is simply not an option, because they are not earning enough to have additional funds to save and invest. Others may be able to save more, but are unwilling to do so because they do not want to live a diminished quality of life while saving for a time that they may not live to see.

Some baby boomers are waking up to the fact that there is another retirement solution - create new sources of income that will provide them with monthly cash flow and a residual payment in the future. They are no longer working for a paycheck; they are building a millionaire business for cash flow and financial security.

If you are interested in creating a new source of income with a millionaire business, start with what you know best, what I call your 3 "S" Factors: your skills, your strengths, and your successes. Create a product or service around these factors that other people want or need and have already demonstrated a willingness to buy. Then identify a small segment of that market to focus on, called a niche market.

You will have the best chance for success if you give your niche market what it wants to buy. Not sure what that is? Then ask the people who are in your niche market. Do a simple survey, either online or offline. Here are a couple of ways you can do it. First, if you are near a college, ask if your survey can be part of a market research class. Need faster results? Find out where the members of the market go and have to wait, and survey or interview them while they are waiting. For example, if you need to survey moms, ask them to fill out a short survey while waiting in line to pick up the kids from school. The key is always to think like your potential buyer, but you have to know how they think first.

Do you have a friend who knows you so well that she can practically finish your sentences for you? That's how well you want to know your niche market. You want to know exactly what the members of that niche market are thinking so you can offer them exactly what they want.

You will want to customize your product or service for your niche market, so consider how you can modify the elements of the marketing mix: the characteristics of your product or service, your promotional strategy, how you will deliver the product or service to the customer, and the price you will charge. (Here's a hint: never compete only on price. When you compete only on price, the market sees your product as a commodity, with no distinct market advantage, and you can easily get locked in a downward price spiral.)

Start today to build a millionaire business so that you don't have to rely on winning lotto to be able to have the retirement of your dreams.

Are you afraid that you won't have sufficient income for retirement, which seems to be approaching faster than a speeding bullet? Maybe you want to be able to assure your kids a college education at the school of their choice, or have debt that you want to eliminate as fast as possible because you haven't had a good night's sleep in months.

Join other entrepreneurial women and aspiring millionaire business builders who want to grow a Millionaire Business that will provide cash flow now and financial security for a lifetime. Jan Sandhouse Hurst has taught hundreds how to grow and improve their businesses. Get her free tips and training at Millionaire Business Blog.

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Will You Have Enough Money in Retirement?

Articles abound with the claim that - if you save $100 a month, earning 10 percent per year, you will have a given sum of money in 30 years. These simplistic future-value exercises (also known as deterministic calculations) are helpful in explaining the potent effect of compound interest and encouraging investors to start saving early; after all, it was Einstein who once said, "the most powerful force in the universe is compound interest." The problem with such deterministic calculations is that they assume the average annual earnings will remain constant throughout the investment period - in other words, investments will always have positive returns.

If we have learned anything these past few years, it is that stock markets do not always earn positive returns each year, and that returns can be volatile. Until recently, most financial advisors used deterministic calculations to forecast future portfolio values; however, such calculations fail to answer the most crucial questions on an investor's mind: Will I have enough money to retire? What if I run out of money? Am I saving enough to reach my goals? -- Each of these questions are valid and should not be discounted when developing an investment portfolio. After all, you hire a financial advisor to help you answer these exact questions. Therefore, in recent years, financial advisors have shifted away from using deterministic calculations and toward Monte Carlo simulations to be able to answer the aforementioned questions with a greater level of confidence.

Monte Carlo simulation is a robust algorithm used by financial advisors to estimate an investor's probability of meeting his/her financial goals. Instead of using a single future value based on deterministic calculations, Monte Carlo simulation calculates your portfolio value under thousands of random scenarios that may affect portfolio value, and then takes the average of those scenarios to determine a probability of success. It provides information about the range of possible outcomes and the likelihood that each outcome will occur. For many years, financial advisors were limited to deterministic calculations mainly because the computing power was not available in most commercial investment software. Now with more advanced planning software available, more advisors are using Monte Carlo simulation methods to make better informed investment decisions.

Monte Carlo simulations are widely used and relied upon across many industries beyond finance. In fact, it was used to develop the hydrogen bomb; it was used by NASA to determine how the Ares I rocket launch vehicle would behave in flight; and is used in nearly every analysis involving risk management. Because of its reasonably reliable outcomes, financial advisors who accurately use and interpret Monte Carlo results can add tremendous value to their clients.

To illustrate how Monte Carlo simulation models work, assume that the far left column in the chart below is your current age, and the first row is how much money you plan to save each year until retirement. Assume further that your current portfolio is worth $25,000, you plan to retire at 65, and your estimated total expenses will be approximately $50,000 a year for 30 years of retirement. What is the probability that you have enough money during retirement and reach your financial goals?

Additions to Savings Each Year (current portfolio value is $25,000)
Age $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $25,000+
25 <40% 84% 99% 99% 99% 99% 99% 99%
30 <40% 53% 90% 99% 99% 99% 99% 99%
35 <40% <40% 62% 91% 99% 99% 99% 99%
40 <40% <40% <40% 56% 86% 99% 99% 99%
45 <40% <40% <40% <40% <40% 65% 88% 99%

If you are curious to know whether your current savings will last during retirement, use the chart above to find your approximate age and annual savings. For example, if you are currently 45 years old and save $15,000 a year to your $25,000 portfolio, you have a less than 40 percent chance of being able to retire at 65 and live off $50,000 a year. To increase your chance to 88 percent, you would need to save $20,000 each year to meet your goals. Keep in mind that if your current portfolio value is greater than $25,000, then your probability of success will be higher or vice versa.

All financial models, no matter how robust, are subject to limitations, including Monte Carlo simulation. The biggest limitation of Monte Carlo models is the use of historical data to predict future portfolio values. While we can never accurately and consistently predict future investment returns, using historical returns and patterns allow us to gain some understanding of investment returns.

Users of Monte Carlo simulation models must fully understand its application, know how to accurately enter data, and most importantly, appropriately interpret results. Despite its limitations, we cannot underestimate the powerful capabilities of using Monte Carlo simulation. Do not rely on simple future value calculations to predict your financial success; seek a trusted financial advisor who uses and understands Monte Carlo simulation techniques to prepare your comprehensive financial plan to increase your chances of reaching your financial goals. You should never have to wonder, "Will I run out of money?"

ACap Asset Management is an independent, Fee-Only Investment Advisory Firm. At ACap, we believe in investing, not speculating. Our goal is not to speculate on the direction of the market, but rather to achieve a healthy rate of return that allows our clients to reach their financial dreams without exposing them to unreasonable risk.

Our clients rely on ACap as their trusted and independent financial expert because we are committed to upholding the highest measures of financial knowledge, objectivity, and ethical practices. Whatever your financial goals may be, ACap can help you reach them.

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Ara can be reached at aoghoorian@acapam.com, on the web at http://www.acapam.com, or on Facebook by searching ACap Asset Management.

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Investing By Age

Simple advice can create problems that are not always simple to fix. One example is the advice that an investor's age plays a central part of their investment strategy and asset allocation (for example standardised high risk strategies for young investors and conservative strategies because you are already, or close to being, retired). This advice is too generic and the individual's circumstances and appetite for risk must be taken into account. If you follow this type of generic advice you may find yourself having sleepless nights and worrying needlessly about either investments considered too risky or of running out of money.

Today's 65 Is Not Yesterday's 65

A lot of investment advice is predicated on what might be called a life-cycle theory of investing. This is an idea that people go through predictable stages of their financial lives, accumulating more assets than savings in the early years, saving more in the high-earning years of middle age, and then very little, if any, saving throughout retirement.

Things have changed, though. Long careers at a single employer are less common, people are tending to have children at an older age, be responsible for older dependents as well; and with people living longer than ever before, reaching 80 years is no longer unusual. However, much of the retirement advice presently published is predicated on old data. So with today's 65-year olds lifespan significantly higher than yesterday's 65-year old, even with superannuation guarantee legislation most Australian workers are significantly under-saving for what it is likely to be their lifespan.

Your Age Is Not Your Number

There are several published investment suggestions which can be considered dangerous, especially without seeking specialist investment advice for your particular circumstances. One such example often touted around the weekend BBQ is that a person's age should correlate to the percentage of their portfolio that should be invested in bonds or a similar conservative asset class. The suggestion being that a 30-year old should have a 30% allocation to bonds, whilst a 65-year old should be 65% allocated to bonds. Rather, this suggestion should perhaps be, in the extreme, where a newborn should have a zero allocation to bonds, and a centenarian a 100% allocation to bonds. Humans differ and individual circumstances differ, so seeking advice from a professional expert is important, nay critical.

Shares Are For The Long Term (and may not be as risky as you think)

People who are a little sceptical about shares should know that the risks accompanying equity investments may not be as great as they think. Whilst putting all of your money into a single share (or even similar group of shares in one industry) is risky, a diversified portfolio of shares covering varying industries, offers a different and less risky option.

Multi-year losses in the stock markets are rare, and that is a powerful advantage for investors. As long as an investor holds a diversified portfolio and invests for the long-term, the odds of losing money is actually quite low and the odds of achieving positive real returns are good.

What Is The Real Risk?

As much as we can focus on the risk of loss, that is not the only risk that matters. A person can consistently save a little each week for 40 years and invest that money very conservatively and never see a down year in their portfolio. However, that same person could find themselves 10 or less than 20 years into retirement with no money, then requiring total dependence on the Aged Pension, even though this investor was completely risk averse.

Investors should be aware that this risk of failing to accumulate enough assets to last through retirement is a real risk and a real problem to be addressed.

So, What To Do?

Firstly, plan for a healthy, happy retirement. Be very suspicious of any simple rule-of-thumb about how much to save or how to allocate and invest your hard-earned savings. Think carefully and seriously about what your actual retirement needs are and speak with a qualified investment advisor. Be informed, consider what your retirement goals are and how you will be able to achieve them. Be honest with your advisor. If you can not speak openly and honestly with the advisor you have chosen, find another to whom you can speak openly and honestly. Remember the advice may cover such issues and recommendations that you don't like - such as your need to lower your spending expectations in retirement, save more today, seek higher investment returns, or perhaps all three plus others for you to consider. Be informed and carefully consider your appetite for risk - you may consider that the risk of running out of money in retirement is worse than losing some money today, and that the long-term benefits of diversification outweigh the risks.

For further information speak with a financial advisor or self managed super fund specialist.

Disclaimer

The information contained in this document is based on information believed to be accurate and reliable at the time of publication. Any illustrations of past performance do not imply similar performance in the future.

To the extent permissible by law, neither we nor any of our related entities, employees, or directors gives any representation or warranty as to the reliability, accuracy or completeness of the information, or accepts any responsibility for any person acting, or refraining from acting, on the basis of information contained in this communication.

This information is of a general nature only. It is not intended as personal advice or as investment recommendation, and does not take into account the particular investment objectives, financial situation and needs of a particular investor. Before making an investment decision you should read the product disclosure statement of any financial product referred to in this newsletter and speak with your financial planner to assess whether the advice is appropriate to your particular investment objectives. financial situation and needs.

Notice

Except as required at law, Leenane Templeton The Self Managed Super Specialists Pty Ltd does not represent, warrant and/or guarantee that the integrity of this communication has been maintained nor that the communication is free of errors, virus, interception or interference. It is the responsibility of the recipient to virus check this web site and any attachments.

Leenane Templeton are Chartered Accountants, Financial Advisors and The Self Managed Super Specialists. Our team of experts help with a variety of financial planning and superannuation advice. For full details about our financial advisory, self managed super fund and accounting services please visit http://www.self-managedsuperfund.com.au web site.

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The Power of Tax Deferral

Annuities have two functions: the first is the accumulation stage where the account holder deposits money, sometimes called purchase payments, in an on-going basis and sometimes in one lump sum. The next stage of an annuity is the payout stage, where you simply began to withdraw your money out of the annuity.

The accumulation of your money within the annuity is depends on what type of annuity you own. The value of your money will grow either by the interest rate that is set by the insurance company called a fixed annuity or you can take advantage of the stock market without the risk of the stock market with an indexed annuity. What I mean by that is your money has the potential for growth during prosperous economic times, but should the stock market crash your guaranteed not to lose a dime of your initial premium and credited interest. Both types of annuities allow your money to grow tax-deferred.

Something important that I want to note is that tax-deferred is not tax-free. An example of a tax-free investment is a municipal bond which doesn't incur any income taxes on gains whatsoever. Annuities are tax-free during their growth period allowing your money to double quicker, but when you choose to withdraw your money, you will be taxed on the gains from your annuity.

Now I'm going to talk about two rules worth knowing; the rule of 72 and the rule of 108. You often hear about those rules but I've found that a lot of people don't quite understand these principles. The rule of 72 estimates how long it takes tax-deferred money to double at an anticipated growth rate. What does that mean? Well, let me give you an example. Let's say you earn 6% per year, so you take 72 divide that by 6 and you get 12 years. So that means with a tax deferred investment, like an annuity, in 12 years your money will double at 6%. The rule of 108 is the time it would take for a taxable investment to double. Let's say you have your money in a CD, mutual funds, or stocks and you're paying taxes on that money every year; using the same example of the growth rate being 6% per year. So 108 divided by 6 is 18 years. It would take 6 years longer for a taxable investment to double, showing the clear difference of the compounding, tax-deferred interest you only get with an annuity in a nutshell.

The power of tax-deferral is clear, but there is something else I want you to keep in mind. With higher interest rates, higher tax brackets, and longer maturities, the power of tax-deferral becomes even more apparent.

We represent over a dozen of the nation's top rated life insurance and annuity providers. We'll provide you with information and pricing on every service available at your location and let you choose. No more high-pressure, heavily biased sales pitches from pushy insurance salespeople.

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Mutual Funds Performance - Watch 'Em Close!

Your mutual fund investment will be steered by a financial advisor - a mutual fund is a bundle of stocks, or shares, that are chosen for their performance and potential. A pool of investors supports the fund through their financial contributions, and an expert oversees the day-to-day business of setup, share selection, and administration. When you invest in a mutual fund, you are basically entrusting your money to someone else that looks after it for you. Great performance is dependent on knowing the ins and outs of every included company's financial data, projections, and research & development.

When you decide to invest in mutual funds, do it correctly - you must perform two levels of due diligence...one should be performed on the managers themselves...the other should be performed on the shares selected for inclusion in the mutual fund. Skipping either of these crucial steps can be a big mistake you will come to regret.

While it always takes time to perform proper due diligence, it is easier in the digital age. Google your prospective fund company and look for client reviews and other topical information. Check the BBB and see if these financial advisors are on the up and up. Once you're confident that the administrators of your fund are honest and aboveboard, you must also make sure the stocks they choose have a proven track record, or (at the very least) some strong indicators of future growth.

Due diligence is simpler when you learn how to compare publicly traded companies that offer stocks. Look for companies that belong in the same sector (such as healthcare, energy, or communications), then compare their stock market share prices over the short and long terms. Learning how to compare competitors is a valuable skill that will always help you as you begin to trade in mutual funds or other investment vehicles. Once you've completed a comparison of companies in the same sector, match your potential investment stock with stocks in other sectors - how does it compare overall? When you've completed these steps, you'll have the in-depth understanding you need to make a firm decision about mutual funds investment.

Remember, past performance is not always an indicator of future success...many industry sectors are cyclical, and therefore very prone to changes brought about by a series of variables. For example, a fantastic high-tech company may be brought to its knees if an earthquake or flood strikes its main headquarters, wiping out tons of inventory. This is an extreme example, meant to illustrate the changeability of stock market investments. This is why playing the stock market or buying mutual funds will always have a risk element. The best way to cope with uncertainty is through thorough research, and through controlled investments that don't risk too much of your savings or disposable income. Be smart and use every tool at your disposal to analyze a mutual fund before you decide to buy in. Then, monitor your investment closely - once a year updates from your investment firm may not be enough.

Visit David Starling's website to learn how you can make $10K per month in the stock market. See David's article about how trading directly in the USA stock market can make or break your fortune.

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Money Market Investment Information

Those persons who are curious to invest in money market have the chance to do it easily by means of money market communal funds. These instruments for investment help new investors in getting basic knowledge and understanding about commercial paper, repurchase agreements, Treasury bills, banker acceptances, and also certificates of deposits or CD that make up majority of collection for common funds.

Money market is a simple branch of investment market. It refers to markets where trading of interim securities occurs. It is fundamentally is a temporary selling and securities and debit instrument that matures in a year and sold in the money markets. Thus, securities such as Treasury bills, banker acceptances, commercial papers, certificates of deposits and other short-range instruments are being traded within the markets.

They are characterized by elevated liquidity, not like the principal markets. The maximum term for all securities is only one year. Therefore, when investors venture in securities such as Treasury bills, commercial papers and some other securities, it is called money market investing.

The following are some features of money market investments:

- Have an utmost maturity of eighteen months.
- Investors may obtain fairly good incomes on their venture within an extremely short period of time. More significantly they can be traded easily and can be turn into cash in nature. Hence, financiers may get their money instantly even without prior notice.
- Investors can buy money market securities by means of various groups such as big business corporations, financial institutions, banks, and the government.
- These instruments can be obtained usually in the owner format. Thus, the amount of the funds can be paid to the person holding or possessing the securities.
- These are totally marketable securities.
- Investors may follow-up their securities by means of the internet, ATM or telephone.

Here are some tips to help greatly the investors while putting their capital in the money markets.

1. You have to diversify your investment. It is important that you must not invest over five percent of your assets in whatever kind of short-range investments. If you invest your money in one venture only, then you will have the danger of losing big amount of your assets if the company or bank becomes bankrupt.

2. As investor, you should refrain from putting your money in hyped-up schemes that pledges high returns.

3. Make sure that you understand the disparity between the diverse interest rates given by the company or bank. The banks impose a small interest rate while granting loans; however, they give bigger effective interest on the investment. Insignificant interest rate is the plain interest whereas effective rate takes into consideration compound interest.

4. The investors need to check about the way the interest will be credited.

You can visit us at: http://money-market-investment.com/ for further information.

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Are Mutual Funds Best For Me?

Investing in mutual funds can be a great way to augment your income, improve your current lifestyle, and save for a more comfortable retirement. You may have wondered, "Are mutual funds best for me?" The easiest way to answer this question is by explaining exactly what a mutual fund is, and exploring the pros of cons of this unique investment type. They are managed by industry experts - these funds are financed by pooled money from a wide variety of investors. This money is then used to buy into appealing stocks, bonds, and securities.

If you want to minimize risk while investing in this kind of product, you may want to consider a special type known as a sector mutual fund. These are created to invest in companies belonging to a specific segment of industry - the profits derived from initial investment are then used to buy up shares of many other companies. They are designed to lower the financial risk of its investors by diversifying through a score of companies.

Since stocks rise and fall, it can be difficult to know which shares will "hit the target". With successful sector funds, there will be hundreds of targets, and this can result in a greater profit level for investors. Careful research and due diligence on sector companies can be your best line of defense when deciding where to place your money - the more you know about a specific segment of industry, the better...

Like every other type of stock market investment, they come with their own set of benefits and drawbacks. Let's look at the positive side: when you purchase mutual funds, you will instantly gain access to a diversified portfolio - without having to pay fees to set up a bunch of single portfolios. However, you may need to buy more than one fund to get the best diversification result.

Buying any investment product is a gamble of sorts, and there are drawbacks. Knowing whether you're buying sector or regular mutual funds is important. For example, if you're investing in energy, you need to be aware that downturns in the industry (triggered by decreasing energy prices, changes to government regulations, or other variables), can all negatively impact your fund. Be smart and decide how to spread out risk when choosing your investment target, just as you would with a single stock.

Buying mutual funds during a recession can actually be smart if you choose the right money manager, as a financial expert will have the know-how to guide a fund through rough economic waters. You should also consider which industries, or sectors, are basically recession-proof - look for companies that produce everyday basics that everyone needs - these will be ideal sector mutual fund investments during stormy economic weather. However, there are really no guarantees - there will always be the risk of under-performing funds during a recession.

When times are good and the economy is robust, seeking out aggressive-growth products that offer earnings-momentum can be a smart decision. These funds are generally much pricier than average growth products, but they can pay for themselves by performing very well when supported by a strong economy.

Visit David Starling's website to learn how you can make $10K per month on the stock market. If you are thinking of mutual funds, see David's article on Mutual Funds Performance - keep a close eye on your funds.

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Can A First Time Investor Buy Mutual Funds?

Most prospective investors seeking investment opportunities for the first time often scan the market very keenly to find out where they can invest. A good number are tempted to rush for investments whose returns seem high in the short run without seeking more information on the volatility of the investment. A mutual fund is an organization which invests money in many different kinds of business and which offers units for sale to the public as a pooled investment, it is most definitely an option for first time investors.

There are several types of mutual funds. They are classified according to the volatility, risk and return involved. There are also several factors that the investor needs to consider before investing in funds for the first time. It is important to consider the level of risk to capital and the potential reward if both the market and fund perform according to the remit. In most cases, new investors commence with low risk. Once this strategy provides the return expected it builds up investor confidence to take on other classes of mutual funds.

A first time investor has the option to invest not only in traditional funds, but also offshore funds. It is advisable that first time investors seek advice from a broker before deciding which type of fund to purchase paying particular attention to the rating of the fund, the volatility and the past performance. The broker or online fund manager will identify the best type of investment that suits the investor according to their risk profile and investment criteria.

There are several benefits of investing in mutual funds compared to purchasing stocks and shares. A single mutual fund normally holds securities in a large number of companies. They therefore offer a diversified risk if markets changes. In the case of an investment in an individual stock or share any market condition could see huge losses on the investment whereas a mutual fund would need to experience losses in all its holdings to lose money at the same rate, it is this diluted exposure to one stock that ensures mutual funds remain a better option than share purchase.

Mutual funds can be purchased online at very affordable rates, minimum holdings vary according to the fund managers with some available for as low as a few hundred US dollars or its equivalent. They are managed by professional fund managers, although there is a cost here it is their talent that builds success opportunities and provides the investor with the opportunity to make a profit too. Mutual funds can be traded quite frequently, some on a daily basis, others weekly or monthly, allowing investors to gain access to their money and maybe switch to another fund with growth potential.

The process for beginning fund investment is very simple. A new investor just needs to sign up for an online account. Information will be private and confidential and used for anti money laundering purposes as required by regulators. The investor will then link a savings account to the fund platform and the client can then start to trade from the comfort of home. In summary mutual funds are both affordable and practical investment options for the first time investor.

First time mutual fund investors can open a free demo account via the fund platform at http://www.oysterbayfundplatform.com experienced investors can review the exceptional research and tracking tools offered http://www.oysterbayfundplatform.com

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What to Know Before You Start Investing in Mutual Funds

An offshore mutual fund is simply a collective investment scheme situated in an offshore financial centre. It has been created to attract investments from both individual investors and corporate investors globally; it is not seeking investment from people or companies residing in the native country where the investment scheme is domiciled. The most popular location for these financial centre's include Jersey, Guernsey Isle of Man, Luxembourg, British Virgin Islands and the Cayman Islands.

Investors should seek information full details on any offshore fund prior to purchase, the power of the internet brings key features and performance history in just a few clicks of the mouse. Look at the cost to buy the fund, the management fee and if any exit fees apply. I good option is to use fund platforms, they will offer discount rates and incorporate added features like email tracking so you can enter the market when prices are most favourable or exit is you have realized a gain.

There are three general investor classes for mutual funds, in most cases the fund managers and the fund research websites will grade each offshore into one of the categories that follow.

Conservative growth offshore funds are suitable for investors who are not money hungry. These investments yield low but stable returns. They are often purchased by older clients to secure retirement benefits for them, and by investors not wishing to incur portfolio losses.

Moderate growth offshore funds have a balanced pattern of growth and risk level in the investment. They are suitable for investors who are neither risk adverse nor risk takers. Almost all investors will have a proportion of their holdings in this sector.

Aggressive growth funds usually show a high potential for growth and involve high volatility as well as risk. Such offshore funds are often coupled with high uncertainty and are not good for risk adverse investors. However, if investors purchase as a long-term hold then when they do perform as expected the upside is often quite spectacular and deemed to be worth the risk taken.

Fund research should also review the market conditions in terms of inflation and interest rates, political stability, international relations and any other global problem that could affect fund profitability. The greatest benefit of mutual funds is that the investor has an easy route to add funds from different markets, different regions, and different risk categories to diminish risk.

Here are a few types of mutual funds: Money market mutual funds involve debt instruments like treasury bills. They gain most of the time but offer very low yield rates. Fixed income mutual securities involve investment in preferred shares, bonds, mortgages and other income securities that by their nature preserve the investor's capital, returns are better than treasury bills since it is a private company not a government that offers these funds for investors.. Equity mutual funds normally trade on investments in the stock market. They often pursue an aggressive growth strategy with high gains expected at the risk of volatility along the way.

The overall performance of mutual funds depends not only on the sector it is invested in, it also depends on how much the management fees are for running that specific fund and at what price you entered that specific fund. By researching market sectors, looking at best performers with sensible management fees and then buying via a discount platform you can make a difference to your overall returns.

For more information contact http://www.oysterbayfundplatform.com they offer over 5000 offshore mutual funds at discounted rates. http://www.oysterbayfundplatform.com

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Silver: The Hunt Brother's Story

The Hunt brothers were two American investors who, wary of US governmental inflationary policies, bought large amounts of physical silver and silver futures as a hedge against inflation.

The economic climate was just right for their investments moves. From about 1965, with President Johnson's Great Society programs, the health of the US dollar had been slowly worsening. Then, Pres. Nixon removed the United States from anything akin to a gold standard. The results of this were a devaluation of the US dollar, which were correlated with inflation.

By buying silver, the Hunt brothers did the best thing that they could do at the time. They began purchasing silver when it was only two dollars an ounce in continued to purchase both physical silver and silver futures. However, they purchased much more silver than was held in reserves by the major commodity exchanges. This caused many familiar with market and silver dynamics to fear that the commodity exchanges, especially COMEX, would be unable to meet their silver obligations and would default. In reality, they were probably right; the Hunt brothers held at least 550 million ounces in silver futures, whereas the two major US exchanges only held 120 million ounces of actual silver. When enough investors realized this, a panic began in the silver markets which caused the price of silver to rapidly increase.

Now, how were the Hunt brothers, who had invested so deftly and intelligently, rewarded? At this point silver was trading far above what they purchased it at, and they had made a very worthwhile investment. Unfortunately for them, the government stepped in and change the rules of how the silver markets work. First, they put limits on how many silver futures people could hold. This forced the Hunt Brothers to sell much of their silver futures.

They took a huge loss. All of this because of an entirely rational investment move that was based off of the fact that the US dollar was inflating heavily. This, after all, was the very reason why the Hunt brothers got into silver. They looked at the long-term trends in the US dollar and realized that inflation was here to stay; furthermore, they realized that there was the very real risk of hyperinflation, much like what was seen in Germany during the 1920s.

To add insult and more injury to injury, the Hunt brothers became the scapegoat of the silver price hike and had to pay millions of dollars in fees. Not only were they labeled as market manipulators, but Bunker Hunt was driven into declaring personal bankruptcy. It just goes to show you that no good deed goes unpunished!

J R TRADING PARTNERS LTD http://WWW.BULLIONUK.COM

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Buying Palladium Made Easy

Palladium is a precious metal that was discovered in 1803. It is found in nature mixed with platinum deposits. However, it took nearly 170 years for Palladium to become an important industrial product and precious metal. Even now, palladium is still not quite as popular as other precious metals such as gold, silver, and platinum. However, palladium has a high value per ounce and remains a viable metal for investors, especially in the current global economic climate.

Palladium has industrial uses in the electronics, jewelry, chemicals, fuel cell, oil refining, polyester, photography, water treatment, hydrogen purification, and medical industries. It is used in everything from catalytic converters to dental crowns to electronic conductors to treating prostate cancer; there are, furthermore, many newer, proprietary uses of palladium currently in development that are likely to increase industrial demand for, and thus increase the price of, palladium. It is these qualities that make Palladium a wise choice for the discerning investor who wishes to protect their wealth and capitalize on economic turbidity.

Because of the inflationary policies taken by central banks and governments around the world, commodities remain the best way to preserve your wealth. Palladium is one such commodity. Since there are so many industrial uses of palladium, is in fact slightly better than gold and silver; this is because gold and silver are two of the most popular bullion and coins metals, whereas both gold and silver have far fewer industrial uses, and thus far less industrial demand, then palladium.

Ever since the 2008 financial crisis, precious metals and almost every other commodity has increased in price. This is because many currencies, and especially the major currencies, have devalued because of inflationary quantitative easing and stimulus packages; in short, inflationary measures have been the prime means for governments and central banks to prevent a global economic meltdown. However, the side effects of these measures have have devalued all the major currencies from the US dollar to UK pound sterling to the Euro to the Japanese Yen. As a result of this, the price of precious metals such as palladium have increased and looks set to continue its meteoric rise over the last two years.

However, because palladium has so many industrial uses, damage to the global economy can endanger the price of palladium. Unlike gold and silver, which are primarily precious metals and are used as hedges against inflation, palladium has this downside.

Nonetheless, palladium coins and bars remain a viable option for savvy investors who seek to create a diversified portfolio that can capitalize on the current inflationary trends in almost every major currency. For these many reasons, it is a good idea to buy palladium. Prices and purchase options can be found at BullionUK.com.

J R TRADING PARTNERS LTD http://WWW.BULLIONUK.COM

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How Inflation Affects the Value of Gold

Gold bullion increases in price per ounce whenever the price of the currency in which it is denominated decreases in value. As such, there is an inverse relationship between the price of any currency and the price of gold coins and gold bullion in that currency.

The currencies of all the major economies are set to inflate for the short to at least the medium term. This is because of the 2008 financial crisis. When this occurred, the governments of the United States, the United Kingdom, and much of the European Union had their central banks engage in a type of quantitative easing. What quantitative easing is is when the central banks basically increase the money supply in order to provide more money and to counter the effects of the credit crunch.

One of the most important effects of the 2008 financial crisis was the credit crunch, which meant that many banks stopped loaning money; this made it so that it was much more difficult for businesses, entrepreneurs, and individual consumers to get the loans they need to order supplies, pay staff, construct new facilities, and invest in a wide manner of products and services.

Since the global economy is very dependent on a large amount of consumption being done, the inability of everyone from individuals to large corporations to borrow money in order to fund new purchases and new consumption threatened the lifeblood of the global economy. To counter this, the central banks stepped in with programmes known as quantitative easing. While this has to an extent limited the amount of damage that the credit crunch could have caused, it is have the unfortunate side effect of causing inflation. This is because of the extra currency that is in circulation.

Other economies such as China and India have also engaged in inflationary monetary policies; China for instance produced a large economic stimulus package similar to that of the United States. However the stimulus package cost a lot of money.

What this means specifically for the gold price is that it will go up. The price of gold will go up because the price of gold is always related to a currency. When the value of the currency goes down like it does in inflation, the price of gold will go up; to capitalize on this, savvy investors purchase gold coins and bars. Popular gold coins include the 1oz Krugerrand, which is recognised and traded world-wide.

J R TRADING PARTNERS LTD http://WWW.BULLIONUK.COM

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How The Economy Can Directly Affect the Price of Gold

How high can the price of gold go? Spot Gold has hit $1500 USD per ounce and it appears that there is still plenty of room for it to move quite a bit higher.

The price of gold is determined by a number of different factors. Like any other commodity, supply and demand plays a key role in the price of gold. When the supply is tight and the demand is great, the price of gold will rise. Conversely, when the supply is more abundant and the demand not as great, the price of gold will tend to drop. In today's world wide economy, gold is in high demand. Countries like China and India have been accumulating large amounts of the precious metal and have helped to drive the price higher.

Looking at the economy as a whole, gold represents stability in what is a very unstable economic environment. The troubled U.S. Dollar along with the recently declining British Pound have made owning gold an attractive alternative to holding cash money that loses purchasing power as it gets devalued due to certain market conditions.

The imbalance of imports and exports contributes to the value of the world's currencies, but, does not change the value of gold. Gold in one country is valued at the same amount in any other country.

Inflation in individual countries as well as worldwide is a major factor that causes the demand for gold to rise and drives the price higher and higher. Because gold is a physical asset and has a limited amount of supply, it is not subject to the same fluctuations as paper money which can be printed at will by any country. The more money that is printed the less each unit is actually worth. Therefore, holding an ounce of gold will still allow one to buy the same amount of goods or services in today's economy as it would have bought 10 or 20 years ago. That can not be said of paper currency.

The worldwide economy is still struggling. Countries like Ireland, Greece and Spain have all been experiencing serious financial problems and their debt ratings have declined. Gold is psychologically comforting in tough economic times and it looks like there will be plenty of more difficult days ahead. It is not too late to invest in gold.

Preserve your wealth, invest in gold bullion coins. Popular coins include Krugerrands, American Eagles, Canadian Maples & Austrian Philharmonics.

J R TRADING PARTNERS LTD http://WWW.BULLIONUK.COM

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A Short History of the British Sovereign

The first gold sovereign was designed and minted under King Henry VII in 1489. Since then, it has risen in prominence to become one of the premier gold coins currently minted by any nation. However, it had a long and convoluted road in those centuries to make it to where it is today.

The gold sovereign began weighing half a troy ounce and was made from 23 carat gold, which was approximately 95.83% fine gold. At first, the reverse side of the coin represented a shield that held the royal arms. All this was located on a large double Tudor rose. The obverse had the king and a throne; the emblems radiated majesty.

This extravagance is in line with what historians thought: that the main purpose of the gold sovereign was to impress Britain's continental neighbors, who, at the time, had been making their own impressive looking gold coins. These old coins are very rare and, as a result, very expensive.

After this, Henry VIII created the first half sovereign. Double and even quintuple sovereigns were also coined through the sovereign's long history. Edward VI, Queen Mary, and Elizabeth I made only minor alterations to the original sovereign until the last sovereign, at least for a while, was minted in 1604.

Instead, Britain minted gold coins called the Unite, the Laurel, and the Guinea intermittently for a bit over 200 years. It wasn't until the advent of the Industrial Revolution and the availability of new, then-advanced, steam powered machinery that the sovereign returned. In 1817, the revamped sovereigns featured a famous engraving by renowned Italian engraver Benedetto Pistrucci; it contained an image of St. George slaying the dragon on the reverse side. The classic shield design was, however, still used.

Since then, the reverse of sovereigns have featured an engraving of a monarch up to the present day. Once Britain came off the gold standard, the mintage of sovereigns slowed considerably. Still, some are minted. With the recent turmoil in world markets, the price of commodities, and with central banks printing more money and devaluing fiat currencies, gold sovereigns remain a worthwhile investment for the diversified, medium to long-term investor.

You can compare prices of many of these at http://www.bullionuk.com and browse the range of other coins they have for sale. Consider protecting your wealth from the erosive effects of inflation with a gorgeous collectors coin at an affordable investor's price.

J R TRADING PARTNERS LTD http://www.BullionUK.com

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Trading Sugar

Sugar is traded on the Intercontinental Exchange with the ticker symbol SB. The contract size is 112,000 pounds. Contract expiration months are March, May, July, and October. Sugar is considered a soft commodity in the same category as cocoa, coffee, and orange juice. Sugar is produced from sugarcane which accounts for about 75% of sugar production and sugar beets that make up the rest. Brazil is the world's largest sugarcane producer and Europe is the world's largest beet producer.

Weather should be watched in Brazil, India and the United States. Heavy rains, especially around harvest time, can cause crop losses to sugarcane, which may cause the price of sugar futures to move higher. Weather, political issues, the value of Brazil's currency, the real, ethanol production and other factors all need to be monitored for their impact on world sugar prices and trade. Hurricanes in the Caribbean, which can devastate sugarcane crops in the United States, Cuba and elsewhere around the rim of the Gulf of Mexico if they strike at harvest time, can also send sugar futures prices higher. The bulk of Brazil's sugarcane crop is harvested between March and December in the south, which accounts for about 90 percent of the country's output. Around 70 percent of worldwide sugar production is consumed in the country that produced it. Sugar futures tend to move higher at harvest time from September to December.

The increased production of ethanol from sugar in Brazil is a positive factor for prices to move higher over the long-term. Ethanol is generally available as a byproduct of sugar production. It can be used as a bio-fuel alternative to gasoline, and is widely used in cars in Brazil. As an alternative to gasoline, it may become the primary product of sugarcane processing, rather than raw sugar. If the price of crude oil moves higher, that should also support sugar futures prices giving ethanol product more incentive to produce bio-fuels. On the other hand, sugar has been subject to increasing competition from alternative sweeteners such as high-fructose corn syrup used in soft drinks and elsewhere.

A recent inflationary environment has caused nearly all commodity prices to rise to either record or near record highs. Sugar though seemed to hit it high early around January and has been on a slight downward trend since then. It seems though that it may be under priced at this time based on rising oil prices. If crude does hit its' projected price of $140 to $170 a barrel we will see sugar climb as well probably even to new highs. My long term prediction for sugar is to hit 50 cents a pound before the end of the year.

If you're interested in learning more about futures and options trading check out http://www.ctfutures.com

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Futures Trading Technical Analysis - Using Momentum Oscillators

The William %R

The William %R indicator was developed by a famous trader and author Larry Williams. This indicator attempts to measure market conditions and prices which are overbought or oversold.

The William %R line always falls between a value of 100 and 0. In a chart where the William %R is shown, there are two horizontal lines that represent 20% and 80% - an indication of overbought and oversold levels.

The William %R is a leading indicator. This means the William %R line either touches the top of 20% or the bottom at 80% before the price moves. At anytime the William %R line crosses the 20% or 80% levels, it is an indicator to either enter into a long or short position.

On the other hand, at anytime the line crosses the 80% bottom level, it is an indicator to enter into a long position.

The seemingly simple indicator is one of the most used indicators by traders due to it being consistent indicator in forecasting the market price movements.

The Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a technical indicator classified as a momentum oscillator that measures the speed of price movements.

The RSI is typically used on a 14-day time frame and measured on a scale of 0 to 100. Within that scale there will a high level marked at 70 and a low level marked at 30. The RSI is one of the most simple and straightforward technical indicator to read.

When the RSI rises above 70, it is considered overbought and the trend will likely to be bearish. When the RSI dips below 30 it is considered oversold and the trend of the market will likely to be bullish.

Some traders use different time periods for the RSI. For example, shorter term traders will use the 9-day period RSI instead of the 14-day period and longer term traders may use the 12-day or 28-day RSI.

The Commodity Channel Index (CCI)

The Commodity Channel Index (CCI) is developed by Donald Lambert in 1980, which is an indicator used to identify a new trend, price extremes and trend strength in trading commodities. Presently, the CCI has grown to be used and applied to indices, ETFs, stocks as well as other securities such as currencies.

Similar to the Relative Strength Index (RSI), the CCI is also a momentum oscillator, which is used to identify overbought or oversold levels.

There are two levels in which the CCI uses:
• The +100 Level
• The -100 Level

The majority of CCI movement occurs between the +100 and the -100 level. Readings above the +100 level indicates an overbought condition and if the CCI crosses below the -100 level, it indicates an oversold condition.

A move that exceeds any of these levels shows an unusual strength or weakness of the market prices, thus being able to forecast the direction of a trend.

Once the CCI rises above the +100 level, it is a signal that the market will tend to be bullish; therefore traders will enter in a long position.

If the CCI dips below the -100 level, it is a signal that the market will tend to be bearish, thus, traders will enter into a short position.

Because CCI is a leading indicator, it is a preferred indicator by traders to identify bullish or bearish runs as well as key trend reversals.

Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence or known as MACD in short, is one of the most popular indicators used by technical traders today. It is developed by Gerald Appel in the 1960s and is deemed as a one of the simplest yet reliable indicators for traders today.

This indicator is used to identify changes and movements of the asset price direction, momentum and strength within certain duration.

Because the MACD is based on moving averages, it is known as a lagging indicator.

There are two lines which represent the MACD. The first line is called the MACD line and the second is known as the MACD signal line.

The MACD line is calculated by taking the 26-day period Exponential Moving Average and then subtracting the 12-day period Exponential Moving Average, for example, 26 EMA - 12 EMA.

The MACD signal line is a 9-day period Exponential Moving Average (9 EMA). When the MACD line crosses above the MACD signal line, it is often assumed that the trend will have a bullish tendency. When the MACD line crosses below the MACD signal line, it is assumed that the trend will tend to be bearish.

Sheim Quah writes for Oriental Pacific Futures, a Malaysia-based brokerage authorized to provide futures broking services to institution and private clients since 2007. OPF specializes in futures broking, particularly Crude Palm Oil Futures (FCPO) traded on Bursa Malaysia Derivatives. Head on to this futures broker website for more information.

Oriental Pacific Futures articles written and published by Sheim Quah may be reprinted, reposted or distributed free for educational purposes only on the condition that Oriental Pacific Futures, Sheim Quah and the Corporate Website link information ( http://www.opf.com.my ) are included. However, other organizations are invited to link to articles that are available in the public area of the Oriental Pacific Futures' Learning Resources website. No additional permission is needed for such a link.

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Using Volatility Indicators in Technical Analysis

The moving averages are lagging indicators (MA) that most traders both professional and novice, will have probably used at one time or another.

Although there are a number of MA indicators, the most common used are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA).

In this article, we will focus on these two indicators which traders use as technical indicators to forecast market trend movements to make their decision in trading.

These moving averages will help identify:

1. Direction of a trend

2. Potential support and resistance levels.

The Simple Moving Average (SMA)

The SMA is an indicator used as a common indicator for trading. It is calculated by taking the closing price of the asset and adding it with a number of time periods, and then dividing it by the total of number of the time periods.

For example, let's say the last 5 days closing prices for Kuala Lumpur Index Futures (FKLI) are 1300, 1450, 1250, 1500 and 1550.

Thus, the 5-day SMA for FKLI is calculated as follows:

1300 + 1450 + 1250 + 1500 + 1550 / 5 = 1410

The way of looking at SMA is straight forward. If the simple moving average line is on an upward trend, it indicates a strong momentum of an upward trend.

If the SMA line is on a downward trend, it indicates a strong momentum downwards.

If the SMA line is neither up nor down, it indicates a weak momentum where the market is stagnant.

The momentum also builds if the shorter term SMA crosses over the longer term SMA.

The SMA can also be used as a support on an upward trend and also a resistance on a downward trend.

The con of using the SMA is that some regard it as a lagging indicator since it does not weight recent price movements. Thus some traders prefer to use the exponential moving average (EMA) which will be discussed below.

Exponential Moving Average (EMA)

The EMA is similar to the SMA just that more weight is given to the data. In this manner, the average is weighted to place emphasis on the most recent price action.

This is the reason why many traders prefer to use this indicator because of its ability to reduce lag between EMA crosses.

The EMA is read exactly like the SMA price movement where the upward trend of the EMA line indicates a strong upward trend momentum and vice versa.

Simple Moving Average (SMA) versus Exponential Moving Average (EMA)

There are distinct differences between these two indicators as discussed above and both of them have different functions as indicators.

Because the EMA has less lag, traders prefer to use this as a trend indicator.

However for SMA, it represents the true average for the entire time period. Thus, the SMA may be more suited to identify support and resistance levels.

Sheim Quah writes for Oriental Pacific Futures, a Malaysia-based brokerage authorized to provide futures broking services to institution and private clients since 2007. OPF specializes in futures broking, particularly Crude Palm Oil Futures (FCPO) traded on Bursa Malaysia Derivatives. Head on to this futures broker website for more information.

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Oriental Pacific Futures articles written and published by Sheim Quah may be reprinted, reposted or distributed free for educational purposes only on the condition that Oriental Pacific Futures, Sheim Quah and the Corporate Website link information ( http://www.opf.com.my ) are included. However, other organizations are invited to link to articles that are available in the public area of the Oriental Pacific Futures' Learning Resources website. No additional permission is needed for such a link.

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Forget My Refund Check - Give Me a Few Bushels of Corn Instead!

What in the world is going on with the global hunger for corn these days? It seems our need to grow corn for ethanol has other nations challenged, as they need that corn for food. Indeed, I guess we do here at home as well, and we probably need that water that is growing that corn for other crops as well. Who knows what's going to happen, maybe the price of food will inflate to a point all the people get skinny as they can no longer afford it here?

Yesterday, I was sitting in Starbucks talking with one of the usual suspects, or should I say fast-talking acquaintances who sits at home all day buying and selling stocks and commodities online, and we were discussing the commodities markets as of late; copper, gold, silver, wheat, pork bellies?, and of course corn, which appears to have taken flight on an bio-fuel powered jet aircraft. He is quite the joker and he said to me; "forget my refund check from the IRS, who cares if the government shuts down, just buy me a dozen bushels of corn and keep my refund check, I can make hay with that!"

Indeed, I was laughing my butt off until I stopped to think about the $750 per bushel price and realized he was talking about $9,100 based on today's price. Interestingly enough, there was an article in the Wall Street Journal the other day titled "High Corn Prices Appear to Be Here to Stay" published on April 9, 2011 and written by Andrew Peaple - and I must say in looking at the chart over the last 18 months in that article had me convinced that my acquaintance might actually be better off with corn rather than a refund, especially if he is wholly invested and the government shuts down due to budget debates and no refund checks go out?

Speaking of budget cuts and commodities the day before that in the WSJ there was another article titled; "Farm Subsidies: Sacred Cows No More" by Bill Tomson, Siobhan Hughes, and Tom Polansek which was making an interesting statement that the farmers were doing so well, they hardly needed subsidies to produce corn for ethanol, or their crops this year. Of course the South MidWest shows that the droughts continue, so agricultural commodities will rise, and the rest of the world is challenged with these supply and demand issues.

Indeed, I hope you will consider all this. Don't invest in commodities unless you understand the volatile game, and seek out a financial advisor to help you understand all the risks.

Lance Winslow is the Founder of the Online Think Tank, a diverse group of achievers, experts, innovators, entrepreneurs, thinkers, futurists, academics, dreamers, leaders, and general all around brilliant minds. Lance Winslow hopes you've enjoyed today's discussion and topic. http://www.WorldThinkTank.net - Have an important subject to discuss, contact Lance Winslow.

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