Every investor has had to go through the phase of first time investment. The most successful people in the investment market has been through this tricky junction at some point of their life. So, how does one avoid the goosebumps when he/she is investing for the first time? In this article, we will look delve deeper into the subject of first time trading and how one can prepare himself/herself for the best possible outcome.
1.Determine the mode of investment: When you are investing for the first time, the best is to choose a solid way of investment. One of the oldest ways is to invest in a savings account of a bank, which would hand you good returns which is generally not much compared to other means of investment. There are other ways to ensure higher returns, but this could be actually risky for the first time investor. So, only after having complete knowledge of all the investment options available, one must opt to the option that suits his/her needs the best.
2.Proper understanding about the best investment options: One cannot make profits consistently if he/she lacks knowledge about the investment market. If one is investing in a bank, he/she must have a clear idea about the rules and policies associated with the investments options, and must make plans according to it. If investing in the stock market or Forex, it is extremely important to know the market properly. One should be totally sure about the basics of the market, and its functioning before making an investment in the extremely volatile marketplace.
3.Choosing the best broker or financial advisor: If you are investing in stock market, one needs to find the proper broking firm that would offer the best online trading facilities at a moderate price. There are some broking firms that have special orientation programs for people who are in the market for the first time to invest. One must consider these factors while choosing a broker. In case of other forms of investments, it is better to consult a financial advisor. Nevertheless, one must be careful to select a solid and loyal financial consultant, which would provide the proper guidance through the initial phase.
4.Being positive and dedicated about the investment: The fear of making losses ideally should not stops one from taking investment decisions. There are people who are over cautious and the fear of losing money creates a position where they fail to act. Particularly in stock market, in the most likely case, everyone is bound to experience loss in their initial trading days, but once the basics are grasped, the profits that follow make more than enough to cover the initial losses. Therefore, one should always be confident about their decisions, and the fear of losing money should never dent their confidence. Moreover, an investor should commit his energy and time along with money while making an investment. This is because of the simple fact that money cannot make money, unless it is being worked upon and that can only happen when our complete efforts are committed to the cause.
After all it is possible to make Big Money Investing even when starting.
Undestand candlestick patterns. Based only on the market activity of the previous few days, most candlestick patterns are valid. Using one of these without knowing about the previous trends wouldn’t be very useful. For instance, some of the candlestick patterns indicate a change in trend.Learn forex trading and develop your own forex trading system.
What you should do based on that candlestick pattern depends on the context. Usually the context in which you find the candlestick pattern tells you a great deal about them. Let’s consider simple candlestick patterns first.
The Bullish White Marubozu: The longest white candle is the most bullish of the candlestick patterns. It represents the day when bulls control the market and push prices higher from the opening to the closing. With the long white candle closing near the high, chances are the bulls will be back for more buying the following day.
One common feature of the long white candle is an open near the low of the day and a close near the high of the day. This means that buying has been taking place all the day. With the long white candle, the low price on the candlestick is a good support level.
The Bullish Dragonfly Doji: For a Doji to be created, a day must begin and end with the same price. A Doji is formed when the opening and the closing prices are the same. So essentially there is no stick in the candlestick.
A Doji may not look very exciting to you. But don’t be fooled. Doji patterns are usually associated with a market turn. Doji depicts a day where the battle between the bulls and the bears has been fairly equal.
A Dragonfly Doji is unique in that three of the four candlestick patterns- the open, high and the close are all equal. The price action depicted by the Dragonfly Doji bodes very well for those hoping that prices go higher. The low of the Dragonfly Doji day is considered a near term support level. You can make smart trades based on the Dragonfly Dojis.
The Bearish Long Black Candle: A long black candle means that sellers take over at the beginning of the day and push prices lower and lower until the end of the day. The long black candle is the direct counterpart of the long white candle discussed earlier. The long black candle is as bearish as it gets.
These sellers are selling just to get out of their trades. Price sensitivity is very low for these sellers. Seeing this type of enthusiastic selling must give you the confidence that the bears will be in control for a few more days after the appearance of the long black candle. You can capitalize on this fact. The long black candlestick pattern is a good bearish signal.
Everybody says it. “Get a personal introduction and you’ll fare much better.”
So, what? I walk up to this guy when he’s at lunch and introduce myself, noting that I’d like $850,000 for my new business?” No, I don’t think so.
There are, actually, much better ways of getting that personal introduction, such as:
1.Via Rejections
Yes, rejections do have a rosy side. Every time a lender or investor rejects your business plan, call and ask who they recommend as a good prospect.
Then, contact the person/company that is recommended, noting, “Jan Snicker at Big Oldie Bank suggested I contact you.”
Voila! There’s your personal introduction.
2.Via Research
Use your research to identify something common between you and the lender/investor. Perhaps your neighbor went to the same college he did. Perhaps your kids are both into ice hockey.
Use that commonality to get your personal approach.
For example, you discover that he is a Scout leader, just as you were. So start out, “Being a Scout leader taught me the importance of teaching leadership skills to my team.”
Before you know it, you and he are good buddies.
3.Via a Common Contact
Somewhere within seven degrees of separation there are people common to both of you, either in your professional lives, or your personal circles.
This may take some legwork. You need to hook up with the person who knows the person who knows him. But it’s well worth it. The gold mine of information you discover along the way, as well as that ever valuable personal introduction, make every moment worth while.
Is this imposing on people? Not at all. People like to be asked. They like feeling important. So give them both.
Don’t be surprised if a journey like this turns up other investors/lenders that you hadn’t even thought of.
4.Via a Chance Encounter
You suspect that Mr. Gingle will be at the investor forum next week? Well, what the dickens is stopping you? Line up that intro now.
If you can manage to be at his table at lunch, you’ve hit a home run. But any “chance” encounter will do just fine. All you need is a few minutes to give your investor introduction pitch.
Your goal is to have him say that it’s OK for you to send a business plan to his attention. That, realistically, is all the time he will have at a brief encounter like this.
5.Via the Back Door
Your lender/investor has clients. Some have been very successful and earned him a lot of money.
If you cannot get to your person, try getting to that particular client. Industry conferences are always a good bet. Local business conferences often work well too.
I know one industrious entrepreneur who moved to Menlo Park, California, and hung out in the local pubs known to be frequented by venture capitalists. While that was a bit radical, the approach is right on target.
I cannot over-emphasize the importance of conducting research on your potential investment partner. It doesn’t matter whether it’s the bank around the corner or the venture capital firm on the other side of the country. Find out everything you can – names, biographies, hobbies, speeches, education, career path.
Then, when you do get that personal introduction (and it’s invariably at a time when you least expect it!), you will have the “info glue” to make the introduction stick.
Good luck on your adventure!
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There was a sneak preview of the Dept of Labor’s preliminary guidance on setting up 401k default investment options. These situations occur when 401k participants fail to select an investment option for their 401k contributions or a 401k default fund is used in 401k plans with automatic enrollment features.
Currently, 401k plan sponsors are rethinking their default fund decisions because they are concerned about the risk associated with their fiduciary responsibility and about the risk of the earnings performance of the default investments of those participants who failed to choose any.
When a participant fails to make a choice, the default fund is the choice made for them by the plan’s fiduciaries. And because the participant is NOT making the decision when a default investment is used, the plan fiduciaries are responsible to prudently invest their funds.
Many plan sponsors feel that their decision on the default investment is protected by the safe harbor exemption of Internal Revenue Code Section 404c. Section 404c provides an exemption to plan sponsors from liability for investment decisions when participants are given the choice to choose their own investments. Section 404c transfers liability to plan participants for their choices of investment options. Here, sponsors believe that by not making an active choice, the participant has decided to take the default investment.
And if the default investment is a Stable Value or Money Market Fund, the participant does not loose any of his principal. Plan sponsors feel that the participant’s funds are not at risk and so neither are they.
Because the participant is not making the decision when a default investment is used, there is no 404c defense for plan fiduciaries. Also, sponsors are required by ERISA to invest with a reasoned, thoughtful process for evaluating risk and returns and for providing investment options that are diversified and prudent.
Under the forthcoming guidance — which, said a Dept of Labor law specialist in the Office of Regulations and Interpretations, is subject to change – 401k fiduciaries are given a safe harbor on 401k investment management decisions and any breach that is “the direct and necessary result of investing a participant or beneficiary’s account” in a default investment. Investment managers and advisers, on the other hand, are solely responsible for any decisions they make with regard to the 401k investments or any resulting losses and do not get that kind of relief.
In order to qualify for that 401k safe harbor, however, 401k fiduciaries must allow participants:
- the opportunity to move their investments into an alternate account
- provide advance notice of the default investment and
- invest the assets in a certain kind of qualified default investment.
Moreover, that choice, which can be a lifecycle fund or a managed account, among others, must limit the presence of employer stock in the portfolio, as well as allow funds to be transferred out of the default.
The 401k fiduciary responsibility associated with selecting funds for the default investment options in a 401k plan has now been tempered with this new preliminary safe harbor.
One less furrowed brow for 401k plan sponsors.
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Oil bounced off its highs last week and started trading in a clear downtrend. Brent crude oil lost more than 3 percent to finish around 66.65 per barrel last week. This was below the 34 day moving average which is a key level for technical analysts. The 34 day moving average is integral in the Fibonacci sequence created by Italian mathematician Leonardo Fibonacci. The sequence deals with the ratio between prices and is used by technicians to identify support and resistance levels. The commodity was hitting new eight months highs of around 73.50 per barrel near the end of June. It has since lost $7 a barrel and is expected to go lower over the next week. However continuing attacks on oil interests in Nigeria could push crude higher despite the technical signals. Either way we are still a far cry from the almost $150 a barrel we were seeing at this time last summer.
The economic data set to be released this week which oil investors will be looking at is mid week with the EIA Petroleum Status Report. The report is released weekly and contains data on petroleum inventories in the United States. Released a day later on Thursday is the EIA Natural Gas Report. Essentially the same report but for natural gas, detailing the inventory of natural gas stored underground in the US, also released weekly. Both reports are released by the Energy Information Administration and contain information for the week ending on the previous Friday.
Metals commodity prices also fell from the top end of their recent trading levels. Even though on Friday the precious metal jumped more than two dollars a troy ounce it closed out the week at 932.80, over $9 lower than its high the previous week. Silver prices also followed suit dropping off of late June highs of more than $14, to end the trading week at around $13.40. While gold prices are expected by many to go significantly higher (some analysts say above $1000 per ounce in the near term and over $1200 an ounce by the end of the year), they seem to have paused and are trading in tandem with both falling oil prices and dropping equity prices.
Over the past few weeks oil and precious metals have been trading in concert with stock markets and for next week it is believed stock market traders will be focused on earnings to drive any momentum. One company reporting earnings next week that both equity and futures traders will be watching is Chevron. The consensus estimates on Wall Street for the energy drilling, refining, and generation company are for $1.18 profit per share versus $2.90 per share in the same period a year ago. They report on Thursday, July 9th after the bell. The stock (CVX) has been trading in the $65 to $70 dollar a share range over the past couple months, down from around $100 per share a year ago.
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