Balanced Investment Strategy for Portfolio Management

Balanced investment strategy is perhaps the most followed and successful investment strategy for portfolio management. Its primary aim is to keep a balance between investment risk and return. A balanced investment strategy combines the merit of aggressive and defensive investing strategies.

Aggressive investment strategy involves investing in high return high risk investments with the sole purpose of maximizing return from investments. It involves allocating major portion of portfolio capital to invest in equities, equity based funds and highly volatile markets. Investors following aggressive investment strategy often look for comparatively short-term profiting and wish to invest more in growth stocks, and small caps and mid cap stocks. Advantages of aggressive investing include quick profit, high return over investment and no need of large portfolio capital. It can work really well for experienced investors and investors who are very strict in their money management. Disadvantages include high risk, high volatility in total portfolio value and no surety of profit. It less supports novice investors and investor looking for monthly earnings or living costs.

Defensive investment strategy is just opposite of aggressive investment; it’s purpose is to preserve the capital and ensure some return from investments. It involves investing in low profit low risk investments like bonds, money market funds, treasury notes, and equities with minimum price volatility and good dividends. Defensive investors look for long-term profits and/or monthly earnings. Advantages of defensive investment strategy include reduced risk, predictable income, better investment planning and diversification of portfolio. This strategy mainly suits beginners. Disadvantages include low return from investments and requirement of high capital investments.

In balanced investment strategy, the investor tries to keep a balance between his aggressive and defensive behaviors. It involves balancing of both return and risk by diversifying investments in both high return high risk and low return low risk investments. Balanced investors often follow a portfolio capital allocation rule telling how much to invest in equities and bonds and how much to invest in treasury notes, precious metals and funds. Usually one portion of portfolio is actively managed and other portion is left to grow automatically. Balanced investment strategy can be slightly aggressive or slightly defensive with respect to investments made.

The greatest advantage of balanced investment strategy is the diversification of portfolio and hedging against high total portfolio value volatility. It is good for investors looking for medium-term (3 to 5 years) profits. Other advantages include flexibility in portfolio management, better results with better capital investments, (almost) predictable income and manageable portfolio risk. Balanced investment strategy support both beginners and experienced investors and can be an option for monthly earnings for living.

Three Common Questions About Fixed Rate Bonds

By John T Hughes

Fixed rate bonds are arguably one of the most effective saving methods for those looking for high returns to help them get the most from their money. As their name suggests, fixed rate bonds give consumers the opportunity to lock away a sum of their money for a set amount of time whilst receiving a fixed rate of interest. This means that in exchange for an amount of capital, you receive the assurance that it will grow at a predetermined pace over the agreed timeframe.

Bonds are not necessarily the best suited option for all savers - it completely depends on what you are hoping to get from your savings account. However they do tend to offer higher rates of interest than other options as you are saving for a set period of time. In this article we will look to solve some of the most common queries regarding fixed rate bonds.



1. How long do I have to save my money for to in order get a good return?
Because 'locking' your money away is a key factor of the fixed rate bond, many people assume that you will have to wave goodbye to your money for decades on end. This is not the case. Some bonds accounts may give you the option to save for ten or more years but usually you choose a period between 6 months and 5 years. Typically the longer the timeframe that you decide to save for, the higher your rate of returns are likely to be you are rewarded accordingly for your commitment.

With some fixed rate bonds accounts, your savings are not completely inaccessible however you could find that you are charged penalties for making withdrawals inside of the agreed timeframe so this may not be advisable. Some people worry about the notion of stowing money away however in the midst of a volatile economic climate, it could offer you some security and peace of mind knowing that the interest rate you receive will remain the same throughout.



2. Do I need tens of thousands to invest in this way?
As bonds are a type of investment, many people assume that you need five figure sums just to open an account but the truth is most can be opened with around £1,000. Obviously the more you invest the higher your returns are likely to be but whether you are tucking some money away for a mortgage deposit or simply saving up for next year's holiday, savings bonds could work for you.

For those of you looking to save higher amounts, fixed rate bonds accounts can usually store a maximum of sums in the six figure region and the fixed rate of interest means that you will be able to estimate just how much your nest-egg will grow over time.



3. There's so many savings options on the market. How do I know a bond is right for me?
Obviously you do not want to store away your money for a period of time if you are not a hundred percent sure about what you are committing yourself to. As with all financial products, the key to making the right choices is to ensure that the decisions you make are as informed as possible.Review the market and compare fixed rate bonds against other savings options, consider the level of interests on offer and remember that with a bond, you are offered that rate for the chosen period of time whereas interest rates with traditional savings accounts may fluctuate.

In the first instance, it is important to consider what you are looking to get from your savings and exactly how much growth you would like. If you are worried about not having access to your savings then you could consider only saving a certain amount in a bonds account and storing the rest in a savings account that you can access without penalisation.

For more information on the different savings accounts and the best fixed rate bonds on the market, an obligation-free conversation with a savings advisor could help you to work out the options best suited to your personal circumstances.

John T Hughes writes for Best Bonds, a site dedicated to helping you to find leading savings or investment bonds options that may be suited to your needs.

Article Source: http://EzineArticles.com/?expert=John_T_Hughes

Online Stock Trading Some Important Attributes To Have Initially

By: Mich lewis

During the learning of how to perform online stock trading, you might have faced plenty of diverse websites and hypes of making sizable wealth. This is all rubbish. Similar to any other small-scale business, trading calls for sincere effort. However, there are a number of things you can keep in mind to have a competitive advantage in your trade. The techniques employed by triumphant traders are different from one another. No two financially successful traders deal with the market exactly in the same manner.

The most excellent means to develop your own stock trading style is to take careful note of how other professional traders have been victorious in the days gone by and acquire some cues from each of them to formulate your own trading techniques. There are several necessary attributes every winning trader must have:

The foremost attribute is patience. The majority of traders, when they start buying and selling regularly, manage it like their former occupation where simply working or performing anything is the actual goal. But, the situation is different in trade. You will occasionally have to wait for several hours for the proper deal to shape up. Excessive buying and selling is a widespread drawback for novel traders and one that should be averted. You should never trade out of tediousness or just because you feel that other individuals are earning big bucks while you have been thrown into oblivion. Note down your rules and get into a transaction only if the market meets your predetermined plans.

Do online stock trading only with your degree of comfort. For numerous people, hundred shares are excessively large to commence dealing. There are many instances of quite a lot of flourishing traders who set out with just 5 shares at one time. Only if you have begun earning steady (even though small) profits with 5 shares of stock, should you embark on increasing your trade volume.

Make use of stop-losses at all times. Stop-losses are identified as orders you enter into with your broker to get rid of your stock position if it comes down to a particular price. At the beginning, you would like to place your stop loss comparatively close to your purchase price with the intention that if the stock price doesnt go in favor of you, you merely incur a trifle amount of loss. Managing risks and restricting your losses near the beginning will prevent you from throwing away all of the deposits in your account very fast. Keep in mind that the intention of taking off small is to gain knowledge of how the markets perform in a variety of circumstances. Only then, you will be capable of employing broader stop-loss orders and ensuring your trade period to be moneymaking.

The majority of traders resort to fundamental analysis and technical analysis for stock trading online. Fundamental analysis involves keeping an eye on the news, profit-and-loss statements, and other types of information devoid of charts. On the other hand, technical analysis is all about keeping tabs on price charts and trending stocks. These two methods offer the finest means to trade online.

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About the Author:
Mich lewis is an experienced stock broker and works for YouTradeFX that offers the best stock trading charts, platforms and tools for successful online stock trading. Create a demo or live account here to learn all the tricks and execute a profitable deal. Visit today!

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All There Is To Penny Stock Trading

By Jamie P. Johnson

Penny stocks are defined as shares with a market price of less than $1. These shares are usually of small companies and are highly volatile. However, penny stock trading can be highly profitable due to the volatility of the shares. There is a large amount of speculation and guessing involved in this practice. Stocks are also illiquid, that is, they can not be used as currency, or be readily converted into currency.

It involves a lot of speculation, and thus is a very risky business. However, as in regular trading, high risks lead to high profits. This type of trading is one of the most lucrative methods to quickly earn big returns on a small amount of money. However, this also applies to losses. A trader can suffer great losses as well as reap great profits. Thus, caution and ingenuity are required. The profit earned by shareholders can be up to 300%. The stocks change hands within hours, so a trader has to monitor the market all day long. Thus, it is an investment that requires attention and time, as well as research.

A penny stock trader must know about the company whose stocks he buys. Constant research and shrewdness is required to make a profit. Experience is also a helping point as expertise leads traders to detect market changes more easily.

An ordinary person who wants to invest in penny stocks has to hire a broker. A broker is a middleman who fulfills a person's demand for stocks in exchange for a small commission. A person should be very careful when hiring a broker. Low commissions might be compensated by 'overhead costs' by the broker. It is necessary to look for a reliable and reputed brokerage company when trading in penny stocks. When buying, people should never buy too many of them. Monitoring them all can be a very arduous task and increase the risks from the volatility of stock trading. More stocks can be bought as a trader gains more experience and market familiarity. Penny stocks trade over the counter, and are unlisted at exchanges, so finding information about them is very difficult.

The actions of the company issuing the stocks should be monitored. The company should not have too many stocks in the market as this will lead to dilution of profits and ultimately, losses. A company may also reduce its supply of stocks and increase the price of the shares. Companies who have a history of such actions should be avoided. A good sign of progress by issuers is 'buybacks', which is, buying their own shares from the open market.

There is also a big chance of being a victim of fraud in this. To avoid scams, traders should invest in real, reliable companies. Forums should be followed and there are also stock picking services, which help in this process.

In conclusion, penny stock trading is a risky but profitable venture that requires monitoring, know-how, and willingness to take risks. Like gambling, it is an exciting business and luck also plays a factor. Therefore, it is imperative to follow these regulations in order to successfully trade in penny stocks.

Visit the official website of Jackpot Penny Stocks if you wish to know more about penny stock trading.

Article Source: http://EzineArticles.com/?expert=Jamie_P._Johnson

Managing the Dreaded Trading Slow Down - Eminis and Stock Trading

By Chris Trinidad

 

One could argue that trading unusually well could be a bad thing sometimes. Every trade you make including those outside of your normal trade plan adds to the size of your account! How can you go wrong right? You might take trades you probably wouldn't have before, but they're working for you so why stop? You've mastered the market! Many traders will go through spats in their trading where they simply can't lose. So what's happening during these series of trades?

Your building what are called "ghost habits" that are destroying your future ability to make profits. Every time you place a trade good or bad you've lost a little bit more discipline and gained a lot more future pain. Your trading is becoming that of gambling and luck. This luck is leading to those "ghost habits" that are tough to try to over come. These are hidden agendas buried deep within your internal Central Processing Unit(CPU or Brain) that will flash in and out during the good and during the bad trading days. Of course when it hurts is normally during the bad trading days. Your magical market calls begin to not workout as planned and you have a draw-down in your trading account that begins to change the whole dynamics of your trading style. You've lost the very discipline that got you there and I'm sure you've lost the "physical" trade plan you once spoke so highly of.

So what do you do now once you've let your trading get to this point? You simply start over in all aspects of your trading. Bring your contract( E-Minis ) amounts back down to reality and limit your trades to only the best trades throughout the day. Sounds easy doesn't it? Try it for a day and see if you can hold out. Establish a set amount of trades for which you will extract your profits. Re-read your trading rules as well as trade plan and begin to place trades again. Of course your learning curve is dramatically cut short due to your previous sills and knowledge so you don't need to wait months to begin implementing size back into your trading.

Understand that size comes with discipline and without that you will do nothing more than cause more damage to your own trading mindset. Trading a lower amount of contracts allows you the ability to regain good habits that may take time to re-develop without damaging your account beyond repair. If you start tweaking and adjusting to get your trading back to normal with size you are unnecessarily damaging your account. The stock markets only helping hand is its ability to truly be a reliable learning center which you can perfect and practice with growth coming at the click of the mouse. It's important to realize these times in trading where you could be developing bad habits and regroup even if things are going well. Always understand what is going on and when you feel yourself starting to slip;pull it back a bit and bring yourself back to reality. You don't want your trading to snowball out of control so put yourself into damage control immediately, bring your contract sizes down, regroup, and trade with confidence.

Chris has been a part of the trading arena for more than 7 years and has seen his fair share of ups and downs. If someone would have depicted these simple ideas to the community from the beginning his ride would have been a lot smoother. Never feel afraid to attack your dreams even if it is as challenging as riding the stock markets waves.

http://www.stocksandstocks.com

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How to Buy Stocks: Buy Low, Sell High, and Net Big Profits

In the world of investing and trading in stocks, there are always highs and lows. You can make sums of money just by investing in stocks which are strong in the market, but you can also lose lots of money as trends in prices and currencies change for the worse. In such a dynamic environment, the only way to go on how to buy stocks would be to stay current and keep informed.

Have a bite of technology
Technology allows you access to so much information through all kinds of media and on the internet. When you have these tools, there’s no excuse for you not to know what’s going on in the world. Have an appetite for it! Stock trading happens in an international scale, and you have entered into a gourmet world of money-making ventures.

Take a cue from experts and events
If you take the advice of conservative financial experts, they would tell you to hold on to a stock until it’s time to sell it. That’s when you’ve made some extra money or when you urgently need the funds. If you are just an average investor, you don’t have to trade daily. You only have to buy or sell on cue. Take a hint from events you should closely watch in the stock market such as lay-offs due to the recession or filings for bankruptcy. They could cause your stock prices to drop dramatically.

Know how to buy and sell stocks
Before you buy shares of stocks, give yourself enough lead time to study your options and find out more about your prospects. Surf those many websites which act as reliable stock market watchers and whistle blowers. Check that a website or broker is registered with the SEC and stock exchanges like the NASDAQ or NYSE. This legitimizes your deals early on, and it distances you from the highs and lows of stock trading that come with scamming. When you sign up, most stock trading websites don’t ask a deposit from you. However, there are brokers who require an initial deposit to process the purchase of your stocks. In selecting your stocks, do start off by buying a winning stock low and at a decent price. That’s how you net big profits compared to buying at an already-high price and then planning to sell it at a much higher rate.

The highs and lows of investing
When you buy stocks in a company, remember that you already own an actual part of the company through your shares. Since both your personal money and your best interest have been invested in it, you somehow have to learn how to read stock charts. They will prepare you to take action on both the highs and lows of investing. Admittedly, there are certain risks involved in the business of money-making via stock trading. If there is anything you would like to stay the furthest away from, it would be a state of panic. You not only subject yourself to stress and lose your composure, but you also subject your life to frustrations and you lose control of your finances. Unless you can afford too, don’t buy too much of one investment and put all your hopes in it. It would be smarter to distribute your shares among a good choice of profitable stocks in your portfolio.

 

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Shane D. Engle - About the Author:

For more tips and information about How to Buy Stocks, please check out: www.tradestocksamerica.com

 

The Best Online Stock Trading Tips to Ensure Smooth Sailing

By Alan S Cummins

The internet has made the trading of stocks even easier for everyone across the world. Almost anyone can now buy and sell shares thanks to this wonderful advent. Mergers present a good opportunity for those who are interested in trading online. Stock brokers that once served as the middle man can now almost be entirely eliminated from the trading equation, making it the best online stock trading scenario for the lone broker.

No longer have to hire a broker
One thing that makes this situation very advantageous is that it saves the cost of having to hire a stock broker. Online stock trading has become more mainstream and also a true source of income for more people. Thanks to the internet there are a lot more people working from home, which makes it the best online stock trading option for many.

One trick to truly benefit from trading online is to choose the right stock trading company to begin with. There are a vast number of companies that investors are able to choose from. This makes it easier for them to find the best online stock trading option for them. Most of these companies look the same from a distance, but when you dig a little bit deeper you will find that they aren't. They are actually very different from one another.

Company reputation
The first thing that you should look into is the company's reputation online. You want to make sure that there wasn't a bunch of negative things said about them. You also want to check to make sure that they are trustworthy enough to handle your money and your confidential information. This is something that should not be taken lightly. One way to go about this is to ask other traders who they use and if they can recommend a reputable company. If you don't know anyone personally then you can go into forums and ask. People will be the first to tell you who not to use. I'm sure that you will also be able to find some good ones too.

When you find a company that you are considering dealing with, be sure to check into what they are charging for commission. You want to make sure that you are not cheating yourself out of money unnecessarily, by using a company that takes a huge commission. One thing to keep in mind is that the larger companies may have larger commissions then some of the less established ones.
The best online stock trading tip is to arm yourself with as much knowledge as possible going into a deal.

SureTrader offers the best online stock trading software to investors and active traders in Canada.

Article Source: http://EzineArticles.com/?expert=Alan_S_Cummins