tag:blogger.com,1999:blog-57890275929600780992024-03-05T08:25:23.411-08:00sowndaryaJ. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.comBlogger492125tag:blogger.com,1999:blog-5789027592960078099.post-70049829938497968302008-07-24T02:40:00.000-07:002008-07-24T02:42:10.466-07:00lakky505<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">So, you are looking into ways of making money on the Internet? Aren't we all, and it seems very hard to find the winning strategy. I have a recipe for you.<br /><br />Everyone trying to make money online is trying to make something, with nothing. This will never work for obvious reasons if you can look at things objectively. You have to have something to be able to make something. Simple as that. If you invented the Ipod, great, you are a millionaire 100 times over (they just sold their 100 millionth copy).<br /><br />If Ipod was created by a new company as their first product, who would make the most money on the short term scale (less than 12 months)?<br /><br />The venture capital companies or business angels that put up the core investment in the company to realize the product. Every company with a strong product must capitalize their company to get the first product on the market, and the VC companies makes a ridicules amount of money on seed funding and startups because they are the source of funds for the entrepreneurs with the product, the next cool product. The next 100 million dollar product.<br /><br />So, am I saying that you have to figure out the next super cool product or service? No. I am saying you should try to get in on the VC level with your investments, since they have the largest leverage on the capital. If you buy a stock today, for $10 a share, and if it went up to $12, it would be great, but what if you bought the same stock for 30 cents and sold it for $12?<br /><br />Well, it is not easy to be a VC, since it requires access to a lot of money, money we first must earn. But what if you got a chance to add a small investment to a pool that would do seed and startup funding, and take the gigantic percentage increase from the stock on your money directly?<br /><br />Let's assume there is a company trying to get a funding of $3,000,000 for getting the product out there, and selling 49 percent of the company's equity for 30 cents a share, would you take the risk of a 3000 dollar investment to own shares in that company if the product and idea is good?<br /><br />I would. And I did. On one particular investment I went from an investment of $4000 and made the exit at the IPO (when everyone else was getting in) I sold my shares for $2,5 each, and I bought them for 10 cents. Please count the percentage on that.<br /><br />Yes, it is astronomical.<br /><br />But how did I dare risk $4000 for a product that was only on the drawing table? It was easy for me, knowing the power of Internet and the marketing waves on the Internet, I saw an opportunity that was so good it had problems to fail. Well, you see, if the product is good, it will sell, and by understanding the product everyone that can think for a minute can take the right decision. Risk is higher but the reward ratio is much higher if it works.<br /><br />Did you know that over 30 different VC companies turned Skype down, they didn't believe in the product. Skype had a very tough time getting the funds to develop the first versions. Skype was sold to Ebay for an astonishing $5 BILLION. What do you think the down turning VC's said afterwards?<br /><br />Skype is a hype, it will blow over. It is crazy how much power the VC's do have since they are controlling the funds, and they do know each other so they talk to each other. The VC behind the Skype funding, paid about $1M for 30 % of the Skype Corp, and guess if they where happy when Ebay bought it.<br />But isn't there a significant amount of risk involved in early investments in companies? Sure, risk is much higher than if you left the money on the bank, or on the stock exchange. But you are looking into a way of making money, and to be able to make money you have to risk certain money to be able to succeed. Risk is somewhat similar to any business; will they make it? Will the product sell? Will it boom? What happens if it just sells and not booms?<br /><br />The ground rule is, how many ways is it possible for me to make money in this particular investment? Is it all depending on one thing or do they have multiple income streams?<br /><br />What about track record? They have none, the company is new, remember. It is all down to the product and its market. Why is everyone talking about track record anyway? It is of course risk reducing to get in at a later stage, but reward ratio is then lower. I like the risk, makes it fun, and sure, I would not bet my house, only small money, less then $10 000 for me. If you cant afford to loose the investment, do not do it.<br /><br />Think of the product, is the product a good idea? Is the market good? If so, then it is just a matter of your own financial capacity. You have to have SOME money in order to make an investment. A few thousand dollars should do it. And yes, if you only make one investment the first time, you have an exciting period ahead, when the progress reports are coming in, since you are a shareholder you will get information updates regular.<br /><br />If it pays off good, if you can sell the shares for $3-5 each and bought them for less than 50 cents, please save at least 50 percent of the profit before entering new deals. This is how you get rich over time. There is no getting rich quick thing, it all takes a lot of time and a lot of sense. Do the math and do not get in heavy (with all your got), save the profit and get a less risky investment with some of the profit and let some of the profit go to new equity deals in new companies with exciting products, on the right market.<br /><br />I cannot recommend anything to you, but I can tell you the truth, it is impossible to make something out of nothing. And when it pays off, it is fun, you feel very light, very energetic and the sunshine around you makes your day beautiful.<br /><br />If it doesn't pay off as planned, well you tried, and you do have the shares, most companies will come around so at least you get something back. And there are always new deals to consider. Do you remember the sum Mr Donald Trump was owning 99 banks when he crashed? It was billions of dollars. Where is he now? Oh yeah, he has a few billions in net worth again, and boy that man is a genius, or is he? What did he do? He took risks, thats all what it comes down to, take the right amount of risks and capital at stake, to do the deals that pays off the highest.<br /><br />There is no secret here, it is common sense, risk and some money at hand.<br /><br />Are you up for it?<br /><br />There is even an opportunity for you to get shares, no money down, shares for free. Does that sound interesting? But you have instead of money down, work to do as a reseller instead. Your time for free shares.<br /><br />Astonishing.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-23098714275164182532008-07-24T02:39:00.002-07:002008-07-24T02:40:30.828-07:00lakky503<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">If you ask anyone in the finance world what they think about investing or trading penny stocks, the answer that you will probably get will be: "Don't do it. You will lose your money since 90% of penny stock companies are scams. penny stock companies just want to sell shares and are not interested in developing their businesses." The truth is that investing or trading penny stocks is a very risky business. So here is the most important tip about penny stocks: Invest only money that you can afford to lose.<br /><br />If penny stocks are so risky then, why do people invest in or trade them?<br />The answer is because you can make a lot of money in a short time if you know what you are doing.<br /><br />If you are still reading and have decided that you want to trade penny stocks, you need the right tools and good advice to help you survive and even win some money.<br /><br /><b>Step # 1 - Finding the Right Penny Stock to Buy</b><br /><br />To discover the right one stock, you will have to do some investigation, or Due Diligence. There are a lot of websites that will help you with your DD and you can find a list of useful ones at www.stocks-reporter.com.<br /><br />The following points will guide you in learning important information about a company in which you are interested in investing:<br /><br />1. Share structure: AS (Shares Authorized) and OS (Outstanding Stock and Float)<br />2. Transfer agent transparency<br />3. SEC filing<br />4. Financial track record<br />5. Competitive position in its industry<br />6. Business model<br />7. Earnings power<br />8. Valuation or the potential value of the company.<br /><br />For example, when looking into share structure what you want to see is that there is no dilution. A good sign is when the company has maximized the OS and is close to AS. Watching Level 2 will also give you good indication if there is any dilution from the company. A good strategy is to follow insiders who know the company better than anyone else.<br /><br /><b>Step # 2 - Deciding When to Buy</b><br /><br />After finding the penny stock that you plan to buy, you have to find your entry point and how to execute it the right way. Following the trading in that particular stock for a few days together with chart analyzing will give you a lot of valuable information. At this point it is highly recommended for anyone to learn some basic chart reading or at least let others analyze the chart for you. You can ask for help on many of the popular message boards that discuss stock trading and chart analyzing. An important tip about how to execute the trade in a penny stock is: Be very patient and always try to buy at the BID price.<br /><br /><b>Step # 3 - When to Sell or The Exit Strategy</b><br /><br />The exit strategy is something very personal to different traders or investors.<br />It is very important to implement your strategy immediately after executing the buy order. In most cases, a good idea would be to set a sell order of 50% of your position at around 20%-30% PPS spike. Another 10%-20% rise of PPS and then sell another 50% of your current position and let the rest ride for a while. In general, your exit strategy should be very flexible and change with news, momentum, and volume. 90% of the time, though, you should sell at the ASK so it won't affect the run.<br /><br />TIP: Remember always to take profits.<br /><br />Happy Trading</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-3670830575860043552008-07-24T02:39:00.001-07:002008-07-24T02:39:56.710-07:00lakky502<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Given the fact that most seniors are interested in a secure income, reducing risk and lowering taxes, here is a planning technique to consider if you are trying to increase your income.<br /><br />Maybe you have a CD that is coming up for renewal and you discover the rate is going to be lower. You could have some stocks or mutual funds that were invested for growth and are thinking about selling some off and re-investing in something that would pay you an income. The only reason you haven't sold them is that you don't want to pay the capital gain.<br /><br />I would suggest including a charitable gift annuity in your list of options.<br /><br />A charitable gift annuity is a combination of a gift to charity and an annuity. For older people, annuity rates may be 8%, 9% or even higher. Since part of the annuity payment is a tax free return of principal, the gift annuity may provide you with a substantial income. The combination of partially tax free income and the initial charitable deduction makes this planning device attractive.<br /><br />While this arrangement has its own unique benefits, the rate of return is less than if you had bought a commercial immediate annuity. Therefore, your decision to use a gift annuity should include a desire to eventually leave money to a qualified charitable organization that you have an interest in, such as a church, school, hospital, etc.<br /><br />Gift annuities are easy to set up. You simply transfer property to the charity and the charity promises to pay a given amount monthly, quarterly, semi-annually or annually to you for as long as you live. Alternatively, you could elect to have the payments paid to you and another person for as long as you both live. Or you could elect to have the payments made to you for the rest of your life and then to the second person for the rest of their life. But the maximum number of people per gift annuity is two.<br /><br />Gift annuity rates are set by the American Council on Gift Annuities. Charities don't have to use these rates, but most do. So you don't have to out shopping for the best rate. Make your choice based on the charity that you would like to support.<br /><br />There are two tax issues that you should take into consideration when comparing a gift annuity to your other alternatives.<br /><br />The first is that if you fund the gift annuity with cash, part of the payment you receive is taxed (as ordinary income) and part of it is not taxed as it is treated as a return of principal. If you fund it with appreciated property, and are the recipient of the income, part will be taxed as capital gain, part as ordinary income and part could be treated as a return of principal and not taxed. However, if you live past your life expectancy, all later annuity payments will be ordinary income.<br /><br />The second tax issue is that when you give the charity your asset in exchange for a life income, you get a large income tax deduction. For most people, this income tax deduction is so big it cannot be taken in one year. So there are provisions to spread the deduction out over the year of your donation and five more. Your accountant can tell you if this will eliminate income taxes for the next 6 years or not. Chances are good that it will.<br /><br />Please note that I am only giving general guidelines about taxation. Before you set up a gift annuity, you should sit down with your tax advisor to determine the exact tax ramifications for your situation.<br /><br />There are a number of charitable gift annuity options and applications. This brief overview has given you some of the basics. If this seems like it may fit, contact the charitable organization of your choice and get a proposal. Then sit down with your accountant and financial planner and have them help you compare a gift annuity with your other options.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-6141801836476185642008-07-24T02:38:00.002-07:002008-07-24T02:39:18.994-07:00lakky501<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Over the past few years the stock market has made substantial declines. Some short term investors have lost a good bit of money. Many new stock market investors look at this and become very skeptical about getting in now.<br /><br />If you are considering investing in the stock market it is very important that you understand how the markets work. All of the financial and market data that the newcomer is bombarded with can leave them confused and overwhelmed.<br /><br />The stock market is an everyday term used to describe a place where stock in companies is bought and sold. Companies issues stock to finance new equipment, buy other companies, expand their business, introduce new products and services, etc. The investors who buy this stock now own a share of the company. If the company does well the price of their stock increases. If the company does not do well the stock price decreases. If the price that you sell your stock for is more than you paid for it, you have made money.<br /><br />When you buy stock in a company you share in the profits and losses of the company until you sell your stock or the company goes out of business. Studies have shown that long term stock ownership has been one of the best investment strategies for most people.<br /><br />People buy stocks on a tip from a friend, a phone call from a broker, or a recommendation from a TV analyst. They buy during a strong market. When the market later begins to decline they panic and sell for a loss. This is the typical horror story we hear from people who have no investment strategy.<br /><br />Before committing your hard earned money to the stock market it will behoove you to consider the risks and benefits of doing so. You must have an investment strategy. This strategy will define what and when to buy and when you will sell it.<br />History of the Stock Market<br /><br />Over two hundred years ago private banks began to sell stock to raise money to expand. This was a new way to invest and a way for the rich to get richer. In 1792 twenty four large merchants agreed to form a market known as the New York Stock Exchange (NYSE). They agreed to meet daily on Wall Street and buy and sell stocks.<br /><br />By the mid-1800s the United States was experiencing rapid growth. Companies began to sell stock to raise money for the expansion necessary to meet the growing demand for their products and services. The people who bought this stock became part owners of the company and shared in the profits or loss of the company.<br /><br />A new form of investing began to emerge when investors realized that they could sell their stock to others. This is where speculation began to influence an investor's decision to buy or sell and led the way to large fluctuations in stock prices.<br /><br />Originally investing in the stock market was confined to the very wealthy. Now stock ownership has found it's way to all sectors of our society.<br />What is a Stock?<br /><br />A stock certificate is a piece of paper declaring that you own a piece of the company. Companies sell stock to finance expansion, hire people, advertise, etc. In general, the sale of stock help companies grow. The people who buy the stock share in the profits or losses of the company.<br /><br />Trading of stock is generally driven by short term speculation about the company operations, products, services, etc. It is this speculation that influences an investor's decision to buy or sell and what prices are attractive.<br /><br />The company raises money through the primary market. This is the Initial Public Offering (IPO). Thereafter the stock is traded in the secondary market (what we call the stock market) when individual investors or traders buy and sell the shares to each other. The company is not involved in any profit or loss from this secondary market.<br /><br />Technology and the Internet have made the stock market available to the mainstream public. Computers have made investing in the stock market very easy. Market and company news is available almost anywhere in the world. The Internet has brought a vast new group of investors into the stock market and this group continues to grow each year.<br />Bull Market - Bear Market<br /><br />Anyone who has been following the stock market or watching TV news is probably familiar with the terms Bull Market and Bear Market. What do they mean?<br /><br />A bull market is defined by steadily rising prices. The economy is thriving and companies are generally making a profit. Most investors feel that this trend will continue for some time. By contrast a bear market is one where prices are dropping. The economy is probably in a decline and many companies are experiencing difficulties. Now the investors are pessimistic about the future profitability of the stock market. Since investors' attitudes tend to drive their willingness to buy or sell these trends normally perpetuate themselves until significant outside events intervene to cause a reversal of opinion.<br /><br />In a bull market the investor hopes to buy early and hold the stock until it has reached it's high. Obviously predicting the low and high is impossible. Since most investors are "bullish" they make more money in the rising bull market. They are willing to invest more money as the stock is rising and realize more profit.<br /><br />Investing in a bear market incurs the greatest possibility of losses because the trend in downward and there is no end in sight. An investment strategy in this case might be short selling. Short selling is selling a stock that you don't own. You can make arrangements with your broker to do this. You will in effect be borrowing shares from your broker to sell in the hope of buying them back later when the price has dropped. You will profit from the difference in the two prices. Another strategy for a bear market would be buying defensive stocks. These are stocks like utility companies that are not affected by the market downturn or companies that sell their products during all economic conditions.<br />Brokers<br /><br />Traditionally investors bought and sold stock through large brokerage houses. They made a phone call to their broker who relayed their order to the exchange floor. These brokers also offered their services as stock advisors to people who knew very little about the market. These people relied on their broker to guide them and paid a hefty price in commissions and fees as a result. The advent of the Internet has led to a new class of brokerage houses. These firms provide on-line accounts where you may log in and buy and sell stocks from anywhere you can get an Internet connection. They usually don't offer any market advice and only provide order execution. The Internet investor can find some good deals as the members of this new breed of electronic brokerage houses compete for your business!<br />Blue Chip Stocks<br /><br />Large well established firms who have demonstrated good profitability and growth, dividend payout, and quality products and services are called blue chip stocks. They are usually the leaders of their industry, have been around for a long time, and are considered to be among the safest investments. Blue chip stocks are included in the Dow Jones Industrial Average, an index composed of thirty companies who are leaders in their industry groups. They are very popular among individual and institutional investors. Blue chip stocks attract investors who are interested in consistent dividends and growth as well as stability. They are rarely subject to the price volatility of other stocks and their share prices will normally be higher than other categories of stock. The downside of blue chips is that due to their stability they won't appreciate as rapidly as compared to smaller up-and-coming stocks.<br />Penny Stocks<br /><br />Penny Stocks are very low priced stocks and are very risky. They are usually issued by companies without a long term record of stability or profitability.<br /><br />The appeal of penny stock is their low price. Though the odds are against it, if the company can get into a growth trend the share price can jump very rapidly. They are usually favored by the speculative investor.<br />Income Stocks<br /><br />Income Stocks are stock that normally pay higher than average dividends. They are well established companies like utilities or telephone companies. Income stocks are popular with the investor who wants to own the stock for a long time and collect the dividends and who is not so interested in a gain in share price.<br />Value Stocks<br /><br />Sometimes a company's earnings and growth potential indicate that it's share price should be higher than it is currently trading at. These stock are said to be Value Stocks. For the most part, the market and investors have ignored them. The investor who buys a value stock hopes that the market will soon realize what a bargain it is and begin to buy. This would drive up the share price.<br />Defensive Stocks<br /><br />Defensive Stocks are issued by companies in industries that have demonstrated good performance in bad markets. Food and utility companies are defensive stocks.<br />Market Timing<br /><br />One of the most well known market quotes is: "Buy Low - Sell High". To be consistently successful in the stock market one needs strategy, discipline, knowledge, and tools. We need to understand our strategy and stick with it. This will prevent us from being distracted by emotion, panic, or greed.<br /><br />One of the most prominent investing strategies used by "investment pros" is Market Timing. This is the attempt to predict future prices from past market performance. Forecasting stock prices has been a problem for as long as people have been trading stocks. The time to buy or sell a stock is based on a number of economic indicators derived from company analysis, stock charts, and various complex mathematical and computer based algorithms.<br /><br />One example of market timing signals are those available from www.stock4today.com.<br />Risks<br /><br />There are numerous risks involved in investing in the stock market. Knowing that these risks exist should be one of the things an investor is constantly aware of. The money you invest in the stock market is not guaranteed. For instance, you might buy a stock expecting a certain dividend or rate of share price increase. If the company experiences financial problems it may not live up to your dividend or price growth expectations. If the company goes out of business you will probably lose everything you invested in it. Due to the uncertainty of the outcome, you bear a certain amount of risk when you purchase a stock.<br /><br />Stocks differ in the amount of risks they present. For instance, Internet stocks have demonstrated themselves to be much more risky than utility stocks.<br /><br />One risk is the stocks reaction to news items about the company. Depending on how the investors interpret the new item, they may be influenced to buy or sell the stock. If enough of these investors begin to buy or sell at the same time it will cause the price to rise or fall.<br /><br />One effective strategy to cope with risk is diversification. This means spreading out your investments over several stocks in different market sectors. Remember the saying: "Don't put all your eggs in the same basket".<br /><br />As investors we need to find our "Risk Tolerance". Risk tolerance is our emotional and financial ability to ride out a decline in the market without panicking and selling at a loss. When we define that point we make sure not to extend our investments beyond it.<br />Benefits<br /><br />The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It's true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!<br /><br />The Internet has make investing in the stock market a possibility for almost everybody. The wealth of online information, articles, and stock quotes gives the average person the same abilities that were once available to only stock brokers. No longer does the investor need to contact a broker for this information or to place orders to buy or sell. We now have almost instant access to our accounts and the ability to place on-line orders in seconds. This new freedom has ushered in new masses of hopeful investors. Still this in not a random process of buying and selling stock. We need a strategy for selecting a suitable stock as well as timing to buy and sell in order to make a profit.<br />Day Trading<br /><br />Day Trading is the attempt to buy and sell stock over a very short period of time. The day trader hopes to cash in on the short term fluctuations in a stock's price. It would not be unusual for the day trader to buy and sell the same stock in a matter of a few minutes or to buy and sell the same stock several times a day.<br /><br />Day traders sit in front of computer monitors all day looking for short term movement in a stock. They then attempt to get in on the movement before it reverses. The real day trader does not hold a stock overnight due to the risk of some event or news item triggering the stock to reverse direction. It takes intense concentration to monitor the minute by minute movement of several stocks.<br /><br />Day trading involves a great deal of risk because of the uncertainty of the market behavior over the short term. The slightest economic or political news can cause a stock to fluctuate wildly and result in unexpected losses.<br /><br />There are a few people who make respectable gains day trading. The people who probably make the most are the self proclaimed "experts" who sell the books or operate the web sites that cater to the day trader. Because of the profits to be made from sales to people who want to get rich quick, they make it seem as attractive as possible. The truth is that in the long run more people lose than gain by day trading. This does not translate into a very good investment.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-44791994762741708042008-07-24T02:38:00.001-07:002008-07-24T02:38:37.207-07:00lakky500<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Many Investment Gurus, with a straight face and a gleam in their eye, will insist that successful investing is a function of expansive research, skillful market timing, and detailed technical analysis. Others emphasize fundamental information about companies, industries, and markets. But trends and numbers are secondary to a thorough understanding of the basic principles of Investing and Management, and their interrelationships. The ingredients for a successful investment portfolio are these: stubborn belief in the Quality, Diversification, and Income trinity from Investments 101, and operations that employ the Planning, Leading, Organizing, and Controlling skills introduced in Freshman Management. Here are some things to keep in mind while you season your experience with patience and marinate your investment process with discipline:<br /><br />* A viable Investment Program begins with the private development of an Investment Plan. The first step is the identification of personal goals and objectives and a time frame for goal achievement. The end result should be a near autopilot, long-term and increasing, retirement income. Asset Allocation is used to structure the portfolio so that it operates in a goal directed manner. The finished Plan must be flexible in design, based upon reasonable expectations, simple in structure and operation, and easy to supervise.<br /><br />* Use a "cost based" Asset Allocation Model. Although most of the Investment World operates on a Market Value basis for everything from performance analysis to Asset Allocation and Diversification decision modeling, you will improve your long-term results and stay within your allocation and diversification guidelines better by using a system based upon Working Capital. This widely unknown Asset Allocation "model" takes the hype out of daily stock market reporting and keeps the income investor's focus on appropriate statistics.<br /><br />* Control your emotions, among other things. Clearly, fear and greed are the two that require the most control in the investment environment... particularly in these days of a reckless media, Internet empowered scam merchants, high-speed information gathering/processing, and cheap personalized trading capabilities. Love and hate need to be dealt with as well, but there are fewer out-of-body influences on these. Only strictly disciplined decision makers need apply for your Investment Management position... and you may not be the ideal candidate. Investment Management is a continual responsibility, not a weekend and occasional evenings avocation.<br /><br />* Avoid hindsightful analysis, and uninformed (or salesperson) criticism. It is painfully comical how hindsight has taken over in our society... in sports, finance, politics, and the professions, everywhere... everyone you hear is second-guessing and finger pointing. No one is willing to take responsibility for their own actions and everyone is willing to sue whoever coulda', woulda' or shoulda' prevented whatever happened. Investors cannot afford to be Little League crybabies. Make one of the three basic decisions (which are?) and don't look back. No person or program can predict the future, and your portfolio requires management today. The playing field for the investment game is uncertainty.<br /><br />* Establish a profit-taking target for every security you purchase. The purpose of investing is to make more money than you could in a guaranteed, non-negotiable instrument. This larger money making expectation comes with an assumption of some form of risk... there are several, and its "in there" in all investments. In Equities, set a reasonable profit target and take less if you can get it quickly. With income investments, never say no to a profit equal to a year's income, or 10% if you like round numbers. There are always new investment opportunities, and there is no such thing as a bad profit... or a good loss.<br /><br />* Examine Market Value numbers at intelligent intervals. Frequent examination is stressful and non-productive. There are no averages or indices that compare with a properly diversified Investment Portfolio, particularly if your Equity selections are screened for Quality and Income. Investing is a long-term endeavor, and neither Shock(sic) Market symbols nor current yields operate on a calendar year schedule. Look at market peaks and troughs over significant time periods that include "cycles"... and do separate your analysis by class.<br /><br />* Avoid what the crowd is doing and shun investment products. Consumers buy products; Investors buy securities. The crowd is driven by the very emotions that you must learn to control. Stay focused on your plan; analyze your annual income and trading statistics. Buy and hold creates more real tax problems than real millionaires, and gimmicks and fads last just slightly longer than spring fashions. Always buy good stuff on bad news and sell into good news announcements.<br /><br />* Don't try to save the world with your investment decisions. Never limit your investment opportunities artificially. Votes work better when it comes to changing your world, and corporations should not be the targets of your political hates... get rid of incumbents, state and local, until there are changes in the tax code, social security, tort law, environmental issues, etc. In the meantime, invest with your head, not your heart. The business of a capitalist society is...<br /><br />* Keep in mind that you need Income to pay the bills, and that your cost of living in retirement will be higher than you think. If you insist on some income from every Equity security you ever own, and beat-the-bank income from income securities, you will obtain two important things: An annually increasing cash flow that will rise at a rate greater than most normal inflation rates, and a higher quality investment portfolio for better long-term investment performance. (If you use a cost based Asset Allocation model with at least 30% invested in income securities and no open end Mutual Funds or Index ETFs.) Never settle for tiny short-term yields or get hooked on those that are unsustainably high.<br /><br />* Investing is not a competitive event, ever. You don't need to beat the market. You need to accomplish a set of personalized goals. Not even your twin's portfolio should be the same as yours. The faster you run, the less likely it is that you will succeed over time. Big risks, foolproof gimmicks, and exotic computer programs occasion more failures than success stories. Remember the Investment gods? They created Stocks and Bonds... only Stocks and Bonds!<br /><br />* Avoid Unrealized Gains, Embrace Volatility, Increase Annual Income, and remember that all key investment moments are only visible in rear view mirrors. Most unrealized gains become Schedule D realized losses. As of today there has never been a correction (rally) that has not succumbed to the next rally (correction). Only an increasing income level can beat back inflation... a bigger market value number just doesn't do it.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-26890009941913773682008-07-24T02:37:00.000-07:002008-07-24T02:38:03.226-07:00lakky499<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;"> I'll give you the short answer first!<br /><br />Stocks go up because more people want to buy than sell. When this happens they begin to bid higher prices than the stock has been currently trading. On the other side of the same coin, stocks go down because more people want to sell than buy. In order to quickly sell their shares, they are willing to accept a lower price.<br /><br />Having said this, we'll take a look at the various reasons that cause traders to want to buy or sell a stock.<br /><br />It is possible to look at the financial statements of a company and determine what the company is worth. Investors who take this approach are said to examine the company's "fundamentals". They attempt to find an undervalued stock - one that is trading below it's "book value". They feel that sooner or later other traders will realize that the company is worth more than the current price and begin bidding it up.<br /><br />Another investment psychology it called the "technical approach". This is when traders closely examine charts of the stock's past performance looking for trends that they feel will be repeated in the near future. These traders also look at what is happening in the market as a whole trying to anticipate the effect it will have on an individual stock.<br /><br />Sometimes companies trade at half their "book value" while at other times they may trade at double, triple, or even higher. When this happens it can create some sudden and large price swings. This volatility is what makes it possible to make large profits in the market. It is also responsible for huge losses.<br /><br />The stock market is essentially a giant auction where ownership of large companies is for sale. If some investors think that a particular company will be a good investment, they are willing to bid the price up. By the same token, when many investors want to sell a stock at the same time the supply will exceed the demand and the price will drop.<br /><br />Watching the stock market can be likened to watching a ball bounce. It goes up and comes down and then goes right back up. This can be extremely frustrating for many investors who want it to go up in a steady pattern. It is this volatility in the market as a whole and in the individual stocks that the experienced trader profits from. In the absence of a lot of experience, the individual investor needs a proven source of information and direction. The daily stock market recommendations from www.stock4today.com can supply this need.<br /><br />Many investors (as opposed to traders) have a "buy and hold" philosophy. This would work well in a constantly rising market. Unfortunately, the stock market does not go up in a straight line. There are ups and downs that frustrate this type of investor. Today many investors have become "traders" who buy and sell on the fluctuations of the market and the individual stocks. These traders make money in any market - up or down!<br /><br />Another well known investment site www.fool.com lists the following reasons for stocks going up and down:<br /><strong>Why Stocks Go Up</strong><br /><br /> * growing sales and profits<br /> * a great new president hired to run the company<br /> * an exciting new product or service is introduced<br /> * more exciting new products or services are expected<br /> * the company lands a big new contract<br /> * a great review of a new product in the press or on TV<br /> * the company is going to split its stock<br /> * scientists discover the product is good for something else<br /> * some famous investor is buying shares<br /> * lots of people are buying shares<br /> * an analyst upgrades the company, changing her recommendation from, for instance, "buy" to "strong buy"<br /> * other stocks in the same industry go up<br /> * a competitor's factory burns down<br /> * the company wins a lawsuit<br /> * more people are buying the product or service<br /> * the company expands globally and starts selling in other countries<br /> * the industry is "hot" -- people expect big things for good reasons<br /> * the industry is "hot" -- people don't understand much about it, but they're buying anyway<br /> * the company is bought by another company<br /> * the company might be bought by another company<br /> * the company is going to spin-off part of itself as a new company<br /> * rumors<br /> * for no reason at all<br /><br /><strong>Why Stocks Go Down</strong><br /><br /> * profits slipping, sales slipping<br /> * top executives leave the company<br /> * a famous investor sells shares of the company<br /> * an analyst downgrades his recommendation of the stock, maybe from "buy" to "hold"<br /> * the company loses a major customer<br /> * lots of people are selling shares<br /> * a factory burns down<br /> * other stocks in the same industry go down<br /> * another company introduces a better product<br /> * there's a supply shortage, so not enough of the product can be made<br /> * a big lawsuit is filed against the company<br /> * scientists discover the product is not safe<br /> * fewer people are buying the product<br /> * the industry used to be "hot," but now another industry is more popular<br /> * some new law might hurt sales or profits<br /> * a powerful company enters the business<br /> * rumors<br /> * no reason at all</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-1787378851976502132008-07-24T02:36:00.002-07:002008-07-24T02:37:29.781-07:00lakky498<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">NTL clarifies the method of Gulf of Mexico OCS Region (GOMR) regarding the implementation of requirements for general lease surety bonds that are present in 30 CFR 256, Subpart I. However, these securities are obligatory to make sure that you act in accordance with regulatory and lease requirements for including rents, royalties, environmental damage and clean-up activities fully that are not linked to oil spills, abandonment and site-clearance, and other lease obligations.<br /><br />Before the Minerals Management Service (MMS) issues a new lease or approving a lease assignment previously with operational activity plan, you must be able to afford a general lease surety bond. And specifically, the GOMR will begin a review of your bonding coverages when you are presenting a request for a change of designated operator of a lease; an initial Exploration Plan (EP), an initial Development and Production Plan (DPP), an initial Development Operations Coordination Document (DOCD), or a significant revision to an approved EP, DPP, or DOCD; or a request for assignment of a lease with an approved EP, DPP, or DOCD.<br /><br />The authorized MMS officer may consent you to provide the required general lease surety bond after we have decided for approving an assignment only if it is for a good cause. But it should be before beginning an operational activity under the pertinent plan. The submittal of a general lease surety bond by the designated operator, 30 CFR 256.52(c), does not relieve any of the lessees of their obligations to comply with the terms and conditions of the lease. The level of activity on your lease specifies the amount of general lease surety bond coverage.<br /><br />The GOMR will designate each lease as No Operations, Exploration, or Development as follows:<br /><br />1.No Operations - A $50,000 lease-specific or $300,000 area-wide general lease surety bond for leases with non-approval operational activity plan of MMS or for leases under an MMS-approved operational activity plan but with no submittal to MMS of assignment or operational activity plans. If you have provided an applicable lease-specific or area-wide lease surety bond, you do not need to offer this bond according to one of the following higher requirements.<br /><br />2.Exploration - A $200,000 lease-specific or $1,000,000 area-wide general lease surety bond for leases in a proposed EP or a significant revision to an approved EP, or for a proposed assignment of a lease with an approved EP. You do not need to provide this bond if you have provided an applicable lease-specific or area-wide general lease surety bond as per one of the following higher requirements.<br /><br />3.Development - A $500,000 lease-specific or $3,000,000 area-wide general lease surety bond for leases in a proposed DPP or DOCD to an approved DPP or DOCD, or for a proposed assignment of a lease with an approved DPP or DOCD.<br /><br />To gratify the requirement for giving the general lease surety bonds, you may have to provide bonds that are issued by a surety certified by the U.S. Department of the Treasury or from U.S. Treasury securities and are negotiable at the time of submission for an amount of cash that is equal to the value of the required bond. The authorized MMS officer may endorse several options to U.S. Treasury-certified bonds and to the U.S. Treasury securities if the interests of the U.S. Government are protected to the same extent as such historically accepted financial instruments.<br /><br />At present, GOMR accepts a bond from U.S. Treasury-certified sureties and U.S. Treasury securities that have a cash value at the time of purchase equal to the required amount. And at present, the GOMR will consider optional instruments that provide the same degree of security as these are accepted. The GOMR has considered unacceptable such alternatives as letters of credit or production escrow accounts historically as well as for informational perspectives.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-16847534268032815542008-07-24T02:36:00.001-07:002008-07-24T02:36:49.571-07:00lakky497<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">A stock split occurs when a corporation decides to issue new stock and distribute it to it's current stockholders. This is a decision made by the company's board of directors.<br /><br />The most common stock split is a 2 for 1 split. When this happens the stockholder will now own twice as many shares as before the split but at half the price. The total value of your stock does not change. For instance, if you owned 100 shares before the split and the price was $50 a share, after the split you would own 200 shares at $25 a share. After the split the shareholder owns exactly the same percentage of the company as before the split, only the number or shares and share price has changed.<br /><br />While a 2 for 1 split is the most common, companies also distribute 3 for 1 splits, 3 for 2 splits, 5 for 1 splits, etc.<br /><br /><strong>Why does a Company Split their Stock?</strong><br /><br />Companies will split their stock when they feel that the share price has grown to the point that it will no longer be considered affordable by many investors. Since most stock transactions are in round lots (lots of 100 shares), the total cost for 100 shares might be out of reach for some investors. Once a stock price hits $100 a share, for instance, evidence shows that many investors consider it to be too expensive. If the price per share were reduced it would be more affordable. The effect of more people buying the shares will hopefully lead to a price gain.<br />What effect does a Stock Split have on the Share Price?<br /><br />When a company splits it stock it sends the message that the company has been profitable and it will probably continue to prosper. Companies normally announce their upcoming stock split some time in advance. Many investors and traders search for these companies and consider them prime candidates for a further price increase.<br /><br />In theory a stock split should have no impact on the value of the stock, it should be a neutral event. The only thing that has changed is the share price and number of shares. When you do the math you still have the same value and the same percentage of ownership in the company. In practice however, companies who split their stock most often see price increase when the split is announced or after the split actually occurs. The company knows this and is eager to see it's stock price increase.<br /><br /><strong>Reverse Split</strong><br /><br />Sometimes a company will issue a reverse split. When this happens the shareholder will have less shares at a greater price. For example, a typical reverse split is a 1 for 10 split. For example, if a company has been trading at $1 a share and you have 100 shares, after a 1 for 10 split you will have 10 shares at $10 a share. A company might perform a reverse split when their share price has dropped to a very low level and they want to increase the share price to appear more respectable to potential investors. In addition, some exchanges will de-list a stock when the price drops below a certain level for 30 days.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-24905780121383568712008-07-24T02:35:00.002-07:002008-07-24T02:36:12.449-07:00lakky497<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">To gain an understanding of annuities, we need to start at the beginning. In the year 1740, the Presbyterian Church began to use annuities in order to aid widows and the priestly order. The simple purpose of an annuity is to ensure that you have a sound financial back up during retirement. Today, there are different kinds of products sold by Insurance companies and agents. Before you take out an annuity ensure that the Insurance Company has a license to practice in your state. The State Insurance Commission is a legal body that regulates Insurance companies to make sure they have adequate funds so that investments are not jeopardized.<br /><br />Different companies have annuities with different rates and returns. There could be several reasons why you would want an annuity. For example, an annuity helps you pay reduced tax, avoid probate and save for the future. You can look out for your future and that of your heirs. By putting money away for an inheritance, you are making a wise decision for your family. When choosing an annuity quote it is important to remember your financial status and goal for the future. Annuity quotes differ according to the annuity you choose. There are several companies that offer quotes for Immediate Annuities, Fixed Annuities, Equity-indexed Annuities and Variable Annuities.<br /><br />If you choose an Immediate Annuity, then you can expect to receive a fixed or variable sum of money every month or quarter or according to your specification. The amount of money you receive is based on your initial deposit and the time duration of your annuity. If you choose a variable plan then make sure that your investments do very well. A Fixed Annuity is a low risk annuity because you receive a minimum interest whether or not your investments do well. These are more stable in nature and you will always know what to expect. There is no gamble in investing in such an annuity. Some companies that offer this are National Western Life, Jefferson Pilot Life, Great American Life Insurance Company, Allianz Life, American National Insurance Company etc.<br /><br />Equity Indexed Annuities, as the name suggests is based on the stock market index. If your chosen index rises then you gain and vice versa. There is a certain amount of risk in this product; however, the bright side is that you gain if your investments do well. Variable annuities give you the freedom to decide where you want to invest, but it also does not protect you in case of loss. The benefit is that you get to keep all the profit. These annuities are good for those who are completely aware of the market dynamics. Therefore, before choosing an annuity quote you must first know what kind of annuity you really require. There are several online insurance portals that offer to give you an annuity quote instantly. All you have to do is fill out an online form and your quote will find its way to you.<br /><br />In conclusion, choose an annuity quote that comes from the right source. Ensure that your agent is licensed, knowledgeable, reputable and experienced. It is always best to go for an agent that comes as a recommended source. Further, you can opt to receive multiple annuity quotes so you have a choice in front of you.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-82623455770397462772008-07-24T02:35:00.001-07:002008-07-24T02:35:41.453-07:00lakky496<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Equity mutual funds perform differently in different time periods as investment styles and sectors come in and go out of favor. While screening tools readily provide performance data and make the task of identifying top mutual funds relatively easy, there is more to constructing an all-weather portfolio than screening for the top funds.<br /><br />This article describes methods of constructing an all-weather portfolio. Before getting into the nitty-gritty of constructing an all-weather portfolio, it helps to know how equity mutual funds are classified and how their performance is impacted by market conditions.<br /><br /><b>Classification by Market Capitalization & Style</b><br /><br />Equity funds are commonly classified based on market capitalization of the companies in which they invest their assets and investment style.<br /><br />Market capitalization is divided into three categories: large, medium, and small. Investment style likewise is divided into three categories: value, growth, and blend.<br /><br />Combining both types of classifications, equity mutual funds typically fall into one of nine boxes on a 3 x 3 matrix. This classification system works well in analyzing diversified funds.<br /><br /><b>Classification by Sector & Industry Group</b><br /><br />Instead of dividing the equity market by market capitalization and investment characteristics such as value or growth, an alternative way is to slice it by sectors. The Global Industry Classification System jointly developed by Standard & Poor's and Morgan Stanley Capital International, for example, classifies the equity market into ten sectors, such as financials and information technology. Each sector in turn is divided into several industry groups. This classification system is particularly useful for analyzing sector funds that invest their assets in a given sector like information technology or industry group like computer hardware.<br /><br /><b>Impact of Business Cycle</b><br /><br />The net asset value per share of a fund changes in response to the prices of stocks held in its portfolio. Generally speaking, stock prices are impacted by business conditions. The business cycle has various phases to it: Recovery, Boom, Slowdown, and Recession. Different parts of the stock market as seen from market capitalization, style, or sector perspectives perform differently in different phases of the business cycle.<br /><br /><b>Impact on Diversified Funds</b><br /><br />Growth style funds, in general, fare well during expansion phases such as recovery and boom, and value style funds during contraction phases such as slowdown and recession. Likewise, from a capitalization perspective, small cap funds tend to perform better during expansion and large cap funds during contraction.<br /><br />Looking at the most recent boom-bust cycle, Spectra Fund, a large cap-growth fund, was among the star performers during the 1997-1999 boom. Spectra gained 141% during the three-year period ending October 31, 1999. However, Spectra fared poorly during the 2000-2002 slowdown and lost 52% during the two-year period ending October 31, 2002.<br /><br />In complete contrast, Hotchkis & Wiley Small Cap Value Fund, which failed to participate in the 1997-1999 boom, was among the top funds during the 2000-2002 slowdown. Following the 30% loss for the two-year period ending June 30, 2000, Hotchkis gained 88% during the two-year period ending June 30, 2002.<br /><br /><b>Impact on Sector Funds</b><br /><br />Like diversified funds, certain sector funds tend to perform better during some phases of the business cycle. Sector funds that invest in economically sensitive sectors such as technology typically tend to perform better during expansion phases. Sector funds that invest in economically less sensitive sectors like consumer staples typically tend to perform better during contraction phases. As a result, a sector fund that performs best in one time-period may not perform as well in another time-period.<br /><br />Among the 41 Fidelity sector funds, Fidelity Select Energy Services was the top fund in 2005 with a 54% gain. However in 2003, the same fund gained just 8% to be the worst performer.<br /><br /><b>Constructing an All-Weather Portfolio</b><br /><br />Can one select the top fund by knowing what stage the business cycle is in? Unfortunately, things do not get that easy.<br /><br />Getting the turning points of the business cycle right is less than a science. Although certain styles and sectors are expected to do better during particular stages of the business cycle, there is no certainty they will do so each time. Additionally, stock prices tend to anticipate and lead the business cycle. The performance of a fund therefore usually varies from one economic cycle to another.<br /><br />So, rather than chase the top funds, a prudent course is to construct a robust, all-weather portfolio.<br /><br /><b>A) Constructing with Diversified Funds</b><br /><br />One way to construct an all-weather portfolio is to use diversified funds that emphasize different types of market capitalizations and investment styles. To simplify the task, one may construct a portfolio using a large cap-growth fund, a large cap-value fund, a small cap-growth fund, and a small cap-value fund.<br /><br />In evaluating funds in each category, focus on the long-term track record and see how the funds have fared in different market environments. Complement this by evaluating each fund on non-performance-based metrics such as manager tenure, price volatility or risk, <b>mutual fund fees</b>, and <b>mutual fund fiduciary grade</b>. Choose the best available fund in each category and build your portfolio with managers of a 'dream team' caliber.<br /><br />Alternatively, if you want to restrict yourself to only one fund to start with, you may consider a total market index fund which spans all capitalizations and styles.<br /><br /><b>B) Constructing with Sector Funds</b><br /><br />Sector funds can also be used to construct an all-weather portfolio. This approach offers the advantage of creating customized diversified portfolios by including sectors and industry groups which are likely to outperform the market indexes and excluding those which are likely to under-perform.<br /><br />The reward potential can be enhanced by concentrating in a few sectors or industry groups. Diversification across several sectors and industry groups serves to mitigate risk. By optimizing the balance between concentration and diversification, one can achieve superior nominal and risk-adjusted returns.<br /><br />The <b>AlphaProfit Core model portfolio</b> exemplifies this approach. Over the 33 month period from September 30, 2003 to June 30, 2006, the AlphaProfit Core model portfolio gained 57% compared to 39% for Dow Jones Wilshire 5000 Total Market Index.<br /><br /><b>Key Points</b><br /><br />1. There are no top mutual funds for all times and climes.<br />2. A prudent course is to build a robust, all-weather portfolio.<br />3. Diversified funds as well as sector funds can be used to construct an all-weather portfolio.<br /><br />Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2006 <b>AlphaProfit Investments, LLC</b>. All rights reserved.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-1399931833336694642008-07-24T02:34:00.004-07:002008-07-24T02:35:19.214-07:00lakky495<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Equity mutual funds perform differently in different time periods as investment styles and sectors come in and go out of favor. While screening tools readily provide performance data and make the task of identifying top mutual funds relatively easy, there is more to constructing an all-weather portfolio than screening for the top funds.<br /><br />This article describes methods of constructing an all-weather portfolio. Before getting into the nitty-gritty of constructing an all-weather portfolio, it helps to know how equity mutual funds are classified and how their performance is impacted by market conditions.<br /><br /><b>Classification by Market Capitalization & Style</b><br /><br />Equity funds are commonly classified based on market capitalization of the companies in which they invest their assets and investment style.<br /><br />Market capitalization is divided into three categories: large, medium, and small. Investment style likewise is divided into three categories: value, growth, and blend.<br /><br />Combining both types of classifications, equity mutual funds typically fall into one of nine boxes on a 3 x 3 matrix. This classification system works well in analyzing diversified funds.<br /><br /><b>Classification by Sector & Industry Group</b><br /><br />Instead of dividing the equity market by market capitalization and investment characteristics such as value or growth, an alternative way is to slice it by sectors. The Global Industry Classification System jointly developed by Standard & Poor's and Morgan Stanley Capital International, for example, classifies the equity market into ten sectors, such as financials and information technology. Each sector in turn is divided into several industry groups. This classification system is particularly useful for analyzing sector funds that invest their assets in a given sector like information technology or industry group like computer hardware.<br /><br /><b>Impact of Business Cycle</b><br /><br />The net asset value per share of a fund changes in response to the prices of stocks held in its portfolio. Generally speaking, stock prices are impacted by business conditions. The business cycle has various phases to it: Recovery, Boom, Slowdown, and Recession. Different parts of the stock market as seen from market capitalization, style, or sector perspectives perform differently in different phases of the business cycle.<br /><br /><b>Impact on Diversified Funds</b><br /><br />Growth style funds, in general, fare well during expansion phases such as recovery and boom, and value style funds during contraction phases such as slowdown and recession. Likewise, from a capitalization perspective, small cap funds tend to perform better during expansion and large cap funds during contraction.<br /><br />Looking at the most recent boom-bust cycle, Spectra Fund, a large cap-growth fund, was among the star performers during the 1997-1999 boom. Spectra gained 141% during the three-year period ending October 31, 1999. However, Spectra fared poorly during the 2000-2002 slowdown and lost 52% during the two-year period ending October 31, 2002.<br /><br />In complete contrast, Hotchkis & Wiley Small Cap Value Fund, which failed to participate in the 1997-1999 boom, was among the top funds during the 2000-2002 slowdown. Following the 30% loss for the two-year period ending June 30, 2000, Hotchkis gained 88% during the two-year period ending June 30, 2002.<br /><br /><b>Impact on Sector Funds</b><br /><br />Like diversified funds, certain sector funds tend to perform better during some phases of the business cycle. Sector funds that invest in economically sensitive sectors such as technology typically tend to perform better during expansion phases. Sector funds that invest in economically less sensitive sectors like consumer staples typically tend to perform better during contraction phases. As a result, a sector fund that performs best in one time-period may not perform as well in another time-period.<br /><br />Among the 41 Fidelity sector funds, Fidelity Select Energy Services was the top fund in 2005 with a 54% gain. However in 2003, the same fund gained just 8% to be the worst performer.<br /><br /><b>Constructing an All-Weather Portfolio</b><br /><br />Can one select the top fund by knowing what stage the business cycle is in? Unfortunately, things do not get that easy.<br /><br />Getting the turning points of the business cycle right is less than a science. Although certain styles and sectors are expected to do better during particular stages of the business cycle, there is no certainty they will do so each time. Additionally, stock prices tend to anticipate and lead the business cycle. The performance of a fund therefore usually varies from one economic cycle to another.<br /><br />So, rather than chase the top funds, a prudent course is to construct a robust, all-weather portfolio.<br /><br /><b>A) Constructing with Diversified Funds</b><br /><br />One way to construct an all-weather portfolio is to use diversified funds that emphasize different types of market capitalizations and investment styles. To simplify the task, one may construct a portfolio using a large cap-growth fund, a large cap-value fund, a small cap-growth fund, and a small cap-value fund.<br /><br />In evaluating funds in each category, focus on the long-term track record and see how the funds have fared in different market environments. Complement this by evaluating each fund on non-performance-based metrics such as manager tenure, price volatility or risk, <b>mutual fund fees</b>, and <b>mutual fund fiduciary grade</b>. Choose the best available fund in each category and build your portfolio with managers of a 'dream team' caliber.<br /><br />Alternatively, if you want to restrict yourself to only one fund to start with, you may consider a total market index fund which spans all capitalizations and styles.<br /><br /><b>B) Constructing with Sector Funds</b><br /><br />Sector funds can also be used to construct an all-weather portfolio. This approach offers the advantage of creating customized diversified portfolios by including sectors and industry groups which are likely to outperform the market indexes and excluding those which are likely to under-perform.<br /><br />The reward potential can be enhanced by concentrating in a few sectors or industry groups. Diversification across several sectors and industry groups serves to mitigate risk. By optimizing the balance between concentration and diversification, one can achieve superior nominal and risk-adjusted returns.<br /><br />The <b>AlphaProfit Core model portfolio</b> exemplifies this approach. Over the 33 month period from September 30, 2003 to June 30, 2006, the AlphaProfit Core model portfolio gained 57% compared to 39% for Dow Jones Wilshire 5000 Total Market Index.<br /><br /><b>Key Points</b><br /><br />1. There are no top mutual funds for all times and climes.<br />2. A prudent course is to build a robust, all-weather portfolio.<br />3. Diversified funds as well as sector funds can be used to construct an all-weather portfolio.<br /><br />Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2006 <b>AlphaProfit Investments, LLC</b>. All rights reserved.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-30692380250524909592008-07-24T02:34:00.003-07:002008-07-24T02:34:43.320-07:00lakky494<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><p style="text-align: justify;"> Before we talk about futures commodities trading, please keep in mind that trading in these contracts has:<br />1) High degree of risk for financial losses<br />2) High leverage<br />3) High volatility and fluctuations<br />So please use only risk capital, funds that will not adversely affect your life style.<br /><br />1) Get familiarized with are the contact sizes (and point value) for each commodity traded. While there are hundred of contacts around the world, maybe you should try and focus on the ones that are trading in the US, specifically in NY and Chicago. </p><p style="text-align: justify;">2) Ask for the margin requirement on the different commodities. Each commodity has its requirements and that should help you determine what commodities you should have in your portfolio </p><p style="text-align: justify;">3) Decide how you are going to trade: Are you going to use a mechanical trading system, technical trading system or on fundamentals. What ever you use, make sure you trade with some kind of methodology; just don't use hunches and "tips" on late night TV. </p><p style="text-align: justify;">4) Determine whether you should use a full service commodities broker or a discount online broker. This depends whether you have experience in other financial instruments like stock or stock options. Typically full service brokers will charge more, but could prove to be very valuable when it comes to stopping you from making a mistake. </p><p style="text-align: justify;">5) Paper Trade- Make sure that you practice either by a manual log or a simulated online trading platform. It does not cost a dime and it will give you an idea about the day to day volatility that occurs in the futures market. The period that you are trading might not give you a clear indication about a specific commodity, so you should look at past periods and see how certain commodities could fluctuate. </p><p style="text-align: justify;">6) Shop around! Whether you use a full service broker or an online trading platform, you will need help. Make sure that who ever you work with is a brokerage that time, staff and patience to guide you through when you need their help.<br /><br />Past performance is not indicative of future results. There is a substantial risk of loss in futures trading. </p><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-46321536010726947232008-07-24T02:34:00.001-07:002008-07-24T02:34:20.662-07:00lakky493<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><p style="text-align: justify;"> Before we talk about futures commodities trading, please keep in mind that trading in these contracts has:<br />1) High degree of risk for financial losses<br />2) High leverage<br />3) High volatility and fluctuations<br />So please use only risk capital, funds that will not adversely affect your life style.<br /><br />1) Get familiarized with are the contact sizes (and point value) for each commodity traded. While there are hundred of contacts around the world, maybe you should try and focus on the ones that are trading in the US, specifically in NY and Chicago. </p><p style="text-align: justify;">2) Ask for the margin requirement on the different commodities. Each commodity has its requirements and that should help you determine what commodities you should have in your portfolio </p><p style="text-align: justify;">3) Decide how you are going to trade: Are you going to use a mechanical trading system, technical trading system or on fundamentals. What ever you use, make sure you trade with some kind of methodology; just don't use hunches and "tips" on late night TV. </p><p style="text-align: justify;">4) Determine whether you should use a full service commodities broker or a discount online broker. This depends whether you have experience in other financial instruments like stock or stock options. Typically full service brokers will charge more, but could prove to be very valuable when it comes to stopping you from making a mistake. </p><p style="text-align: justify;">5) Paper Trade- Make sure that you practice either by a manual log or a simulated online trading platform. It does not cost a dime and it will give you an idea about the day to day volatility that occurs in the futures market. The period that you are trading might not give you a clear indication about a specific commodity, so you should look at past periods and see how certain commodities could fluctuate. </p><p style="text-align: justify;">6) Shop around! Whether you use a full service broker or an online trading platform, you will need help. Make sure that who ever you work with is a brokerage that time, staff and patience to guide you through when you need their help.<br /><br />Past performance is not indicative of future results. There is a substantial risk of loss in futures trading. </p><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-43872844108413421842008-07-24T02:33:00.003-07:002008-07-24T02:33:58.743-07:00lakky492<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><p style="text-align: justify;"> Before we talk about futures commodities trading, please keep in mind that trading in these contracts has:<br />1) High degree of risk for financial losses<br />2) High leverage<br />3) High volatility and fluctuations<br />So please use only risk capital, funds that will not adversely affect your life style.<br /><br />1) Get familiarized with are the contact sizes (and point value) for each commodity traded. While there are hundred of contacts around the world, maybe you should try and focus on the ones that are trading in the US, specifically in NY and Chicago. </p><p style="text-align: justify;">2) Ask for the margin requirement on the different commodities. Each commodity has its requirements and that should help you determine what commodities you should have in your portfolio </p><p style="text-align: justify;">3) Decide how you are going to trade: Are you going to use a mechanical trading system, technical trading system or on fundamentals. What ever you use, make sure you trade with some kind of methodology; just don't use hunches and "tips" on late night TV. </p><p style="text-align: justify;">4) Determine whether you should use a full service commodities broker or a discount online broker. This depends whether you have experience in other financial instruments like stock or stock options. Typically full service brokers will charge more, but could prove to be very valuable when it comes to stopping you from making a mistake. </p><p style="text-align: justify;">5) Paper Trade- Make sure that you practice either by a manual log or a simulated online trading platform. It does not cost a dime and it will give you an idea about the day to day volatility that occurs in the futures market. The period that you are trading might not give you a clear indication about a specific commodity, so you should look at past periods and see how certain commodities could fluctuate. </p><p style="text-align: justify;">6) Shop around! Whether you use a full service broker or an online trading platform, you will need help. Make sure that who ever you work with is a brokerage that time, staff and patience to guide you through when you need their help.<br /><br />Past performance is not indicative of future results. There is a substantial risk of loss in futures trading. </p><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-34260431511370492242008-07-24T02:33:00.001-07:002008-07-24T02:33:28.981-07:00lakky491<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Had you invested in real estate (or property as it is known in the UK) over the past 30 years or so you would have done very well.However, prices have now reached such a level that it may not be such a good investment especially in the short-term. Over the long-term,prices are sure to appreciate once again. Outside of bricks and mortar, the stock market still provides the skilled individual with one of the best opportunities at capital appreciation.<br /><br />With the globalization of markets now having been accomplished enabling an individual to trade in almost any market across the globe from anywhere, we will concentrate on the American market which is still the biggest and most liquid market. Having decided to concentrate on the American market, you now must decide on what sort of companies offer the best opportunities for making a profit.Small technology or biotechnology companies can sometimes offer spectacular gains in the short-term. However, your chance of picking them out of the bunch in advance of the significant move in their share price, unless you are equipped with insider knowledge, is pretty slim. Therefore concentrating on large established companies is a much safer route to profits.Concentrating on the constituent members of the S&P 500 index provides the investor with ample scope for investment in established companies. I will therefore solely turn my attention to the latter to provide the necessary fodder.<br /><br />When viewing companies in an index such as the S&P 500, you have got to be aware of the different sectors within it. In order to reduce your risk, it is inadvisable to invest in more than one company in any one sector at a given time. Picking on a sector that is currently advancing, or about to advance, and then looking for the most eligible company within that sector likely to profit from the favorable tide can be very rewarding. The company chosen needn't be the market leader in that particular sector. If Xxon Mobil, for instance, dominates the Oil and Gas sector, a second or third line company in that sector such as Occidental Petroleum may give you a much better opportunity to profit from rising oil prices for example.<br /><br />Ideally you are looking for an established company in a sector that is advancing, or likely to advance, that is paying increasing dividends from rising profits, and with a p/e ratio ( that is payment/earnings) less onerous than its peers.P/e ratios are only relevant when comparing companies within the same sector. Another approach to picking a company whose share price is likely to advance is to pick a large company with good prospects when it is temporarily out of favor with the market. Both AIG Group and Pfizer have been in the doghouse over the last couple of years enabling astute investors to profit from their short-term unpopularity.With the latter strategy timing is of crucial importance.<br /><br />If you segregate, say, $20,000 as starting capital for investment purposes from other funds required to live from month to month, the best place to initially put it is into a high-interest bank account until such time as you are ready to invest. This account should pay 4% or better interest per year.You would then limit your investment in any one share to 15% of the total, or $3,000 including dealing expenses per investment. It is inadvisable,especially in jittery markets, to have more than 70% of the total invested at any one time.The market has moods and when everything looks black on the horizon good shares will fall back with the mediocre and bad ones giving you a chance to buy a good share at cheap prices for recovery.<br /><br />If you do your own research, it is best to use and execution- only broker who are cheaper than those offering investment advice. Pick a large broker with many years service in the market. If you want a broker offering investment advice, go for one who has a proven record of offering impartial advice in the market as recommended by a friend or acquaintance.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-9682698195751984892008-07-24T02:32:00.000-07:002008-07-24T02:33:06.343-07:00lakky490<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Had you invested in real estate (or property as it is known in the UK) over the past 30 years or so you would have done very well.However, prices have now reached such a level that it may not be such a good investment especially in the short-term. Over the long-term,prices are sure to appreciate once again. Outside of bricks and mortar, the stock market still provides the skilled individual with one of the best opportunities at capital appreciation.<br /><br />With the globalization of markets now having been accomplished enabling an individual to trade in almost any market across the globe from anywhere, we will concentrate on the American market which is still the biggest and most liquid market. Having decided to concentrate on the American market, you now must decide on what sort of companies offer the best opportunities for making a profit.Small technology or biotechnology companies can sometimes offer spectacular gains in the short-term. However, your chance of picking them out of the bunch in advance of the significant move in their share price, unless you are equipped with insider knowledge, is pretty slim. Therefore concentrating on large established companies is a much safer route to profits.Concentrating on the constituent members of the S&P 500 index provides the investor with ample scope for investment in established companies. I will therefore solely turn my attention to the latter to provide the necessary fodder.<br /><br />When viewing companies in an index such as the S&P 500, you have got to be aware of the different sectors within it. In order to reduce your risk, it is inadvisable to invest in more than one company in any one sector at a given time. Picking on a sector that is currently advancing, or about to advance, and then looking for the most eligible company within that sector likely to profit from the favorable tide can be very rewarding. The company chosen needn't be the market leader in that particular sector. If Xxon Mobil, for instance, dominates the Oil and Gas sector, a second or third line company in that sector such as Occidental Petroleum may give you a much better opportunity to profit from rising oil prices for example.<br /><br />Ideally you are looking for an established company in a sector that is advancing, or likely to advance, that is paying increasing dividends from rising profits, and with a p/e ratio ( that is payment/earnings) less onerous than its peers.P/e ratios are only relevant when comparing companies within the same sector. Another approach to picking a company whose share price is likely to advance is to pick a large company with good prospects when it is temporarily out of favor with the market. Both AIG Group and Pfizer have been in the doghouse over the last couple of years enabling astute investors to profit from their short-term unpopularity.With the latter strategy timing is of crucial importance.<br /><br />If you segregate, say, $20,000 as starting capital for investment purposes from other funds required to live from month to month, the best place to initially put it is into a high-interest bank account until such time as you are ready to invest. This account should pay 4% or better interest per year.You would then limit your investment in any one share to 15% of the total, or $3,000 including dealing expenses per investment. It is inadvisable,especially in jittery markets, to have more than 70% of the total invested at any one time.The market has moods and when everything looks black on the horizon good shares will fall back with the mediocre and bad ones giving you a chance to buy a good share at cheap prices for recovery.<br /><br />If you do your own research, it is best to use and execution- only broker who are cheaper than those offering investment advice. Pick a large broker with many years service in the market. If you want a broker offering investment advice, go for one who has a proven record of offering impartial advice in the market as recommended by a friend or acquaintance.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-4200507309870966272008-07-24T02:31:00.002-07:002008-07-24T02:32:32.632-07:00lakky489<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Wall Street Institutions pay billions of dollars annually to convince the investing public that their Economists, Investment Managers, and Analysts can predict future price movements in specific company shares and trends in the overall Stock Market. Such predictions (often presented as "Wethinkisms" or Model Asset Allocation adjustments) make self-deprecating investors everywhere scurry about transacting with each new revelation. "Thou must heed the oracle of Wall Street"... not to be confused with the one from Omaha, who really does know something about investing. "These guys know this stuff so much better than we do" is the rationale of the fools in the street, and on the hill (sic).<br /><br />What if its true, and these pinstriped super humans can actually predict the future, why do you transact the way you do in response? Why would financial professionals of every shape and size holler "sell" when prices move lower, and vice versa? Would this pitch work at the mall? Of course not. Now lets bring this phenomenon into focus. Hmmm, not one of these Institutional Gurus ever doubts the basic truth that both the Market Indices and individual issue prices will continue to move up and down, forever. So, if we were to slowly construct a diversified portfolio of value stocks (My definition: profitable, dividend paying, NYSE companies.) as they fall in price, we would be able to take profits during the following upward cycle... also forever. Hmmm.<br /><br />Let's pretend for a (foolish) moment that broad market movements are somewhat predictable. Regardless of the direction, professional advice will always fuel the operative emotion: greed or fear! Wall Street's retail representatives (stock brokers), and the new, internet expert, self-directors, rarely go against the grain of the consensus opinion... particularly the one projected to them by their immediate superior (or spouse). You cannot obtain independent thinking from a Wall Street salesperson; it just doesn't fill up the Beemer. Sorry, you have to be able to think for yourself to stay in balance while pedaling on the Market Cycle. Here's some global advice that you will not hear on the street of dreams (and don't get all huffy until you understand what to buy or to sell as well as when to do so): Sell into rallies. Buy on bad news. Buy slowly; sell quickly. Always sell too soon. Always buy too soon, incrementally. Always have a plan. A plan without buying guidelines and selling targets is not a plan.<br /><br />Predicting the performance of individual issues is a totally different ball game that requires an even more powerful crystal ball and a whole array of semi- legal and completely illegal relationships that are mostly self serving and useless to average investors. But, again, let's pretend that a mega million-dollar salary and industry recognition as a superstar creates Master of the Universe quality prediction capabilities... I'm sorry. I just can't even pretend that it's true! The evidence against it is just too great, and the dangers of relying on analytical opinions too real. No one can predict individual issue price movements legally, consistently, or in a timely manner.<br /><br />Investing in individual issues has to be done differently, with rules, guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation tools that are portfolio specific and without calendar time restrictions. This is not nearly as difficult as it sounds, and if you are a "shopper" looking for bargains elsewhere, you should have no trouble understanding how it works. Not a rocket scientist? Good, and if you are at all familiar with the retailing business, even better. You don't need any special education evidentiary acronyms or software programs for stock market success... just common sense and emotion control.<br /><br />Wall Street sells products, and spins reality in whatever manner they feel will produce the best results for those products. The direction of the market doesn't matter to them and it wouldn't to you either if you had a properly constructed portfolio. If you learn how to deal unemotionally with Wall Street events, and shun the herd mentality, you will find yourself in the proper cyclical mode much more often: buying at lower prices and, as a result, taking profits instead of losses. Just what if...<br /><br />Coming next: Developing a Value Stock Watch List and Profit Taking Targets.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-91257493380214614172008-07-24T02:31:00.001-07:002008-07-24T02:31:48.998-07:00lakky487<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Wall Street Institutions pay billions of dollars annually to convince the investing public that their Economists, Investment Managers, and Analysts can predict future price movements in specific company shares and trends in the overall Stock Market. Such predictions (often presented as "Wethinkisms" or Model Asset Allocation adjustments) make self-deprecating investors everywhere scurry about transacting with each new revelation. "Thou must heed the oracle of Wall Street"... not to be confused with the one from Omaha, who really does know something about investing. "These guys know this stuff so much better than we do" is the rationale of the fools in the street, and on the hill (sic).<br /><br />What if its true, and these pinstriped super humans can actually predict the future, why do you transact the way you do in response? Why would financial professionals of every shape and size holler "sell" when prices move lower, and vice versa? Would this pitch work at the mall? Of course not. Now lets bring this phenomenon into focus. Hmmm, not one of these Institutional Gurus ever doubts the basic truth that both the Market Indices and individual issue prices will continue to move up and down, forever. So, if we were to slowly construct a diversified portfolio of value stocks (My definition: profitable, dividend paying, NYSE companies.) as they fall in price, we would be able to take profits during the following upward cycle... also forever. Hmmm.<br /><br />Let's pretend for a (foolish) moment that broad market movements are somewhat predictable. Regardless of the direction, professional advice will always fuel the operative emotion: greed or fear! Wall Street's retail representatives (stock brokers), and the new, internet expert, self-directors, rarely go against the grain of the consensus opinion... particularly the one projected to them by their immediate superior (or spouse). You cannot obtain independent thinking from a Wall Street salesperson; it just doesn't fill up the Beemer. Sorry, you have to be able to think for yourself to stay in balance while pedaling on the Market Cycle. Here's some global advice that you will not hear on the street of dreams (and don't get all huffy until you understand what to buy or to sell as well as when to do so): Sell into rallies. Buy on bad news. Buy slowly; sell quickly. Always sell too soon. Always buy too soon, incrementally. Always have a plan. A plan without buying guidelines and selling targets is not a plan.<br /><br />Predicting the performance of individual issues is a totally different ball game that requires an even more powerful crystal ball and a whole array of semi- legal and completely illegal relationships that are mostly self serving and useless to average investors. But, again, let's pretend that a mega million-dollar salary and industry recognition as a superstar creates Master of the Universe quality prediction capabilities... I'm sorry. I just can't even pretend that it's true! The evidence against it is just too great, and the dangers of relying on analytical opinions too real. No one can predict individual issue price movements legally, consistently, or in a timely manner.<br /><br />Investing in individual issues has to be done differently, with rules, guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation tools that are portfolio specific and without calendar time restrictions. This is not nearly as difficult as it sounds, and if you are a "shopper" looking for bargains elsewhere, you should have no trouble understanding how it works. Not a rocket scientist? Good, and if you are at all familiar with the retailing business, even better. You don't need any special education evidentiary acronyms or software programs for stock market success... just common sense and emotion control.<br /><br />Wall Street sells products, and spins reality in whatever manner they feel will produce the best results for those products. The direction of the market doesn't matter to them and it wouldn't to you either if you had a properly constructed portfolio. If you learn how to deal unemotionally with Wall Street events, and shun the herd mentality, you will find yourself in the proper cyclical mode much more often: buying at lower prices and, as a result, taking profits instead of losses. Just what if...<br /><br />Coming next: Developing a Value Stock Watch List and Profit Taking Targets.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-70014229328093576192008-07-24T02:28:00.002-07:002008-07-24T02:31:07.673-07:00lakky483<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">Wall Street Institutions pay billions of dollars annually to convince the investing public that their Economists, Investment Managers, and Analysts can predict future price movements in specific company shares and trends in the overall Stock Market. Such predictions (often presented as "Wethinkisms" or Model Asset Allocation adjustments) make self-deprecating investors everywhere scurry about transacting with each new revelation. "Thou must heed the oracle of Wall Street"... not to be confused with the one from Omaha, who really does know something about investing. "These guys know this stuff so much better than we do" is the rationale of the fools in the street, and on the hill (sic).<br /><br />What if its true, and these pinstriped super humans can actually predict the future, why do you transact the way you do in response? Why would financial professionals of every shape and size holler "sell" when prices move lower, and vice versa? Would this pitch work at the mall? Of course not. Now lets bring this phenomenon into focus. Hmmm, not one of these Institutional Gurus ever doubts the basic truth that both the Market Indices and individual issue prices will continue to move up and down, forever. So, if we were to slowly construct a diversified portfolio of value stocks (My definition: profitable, dividend paying, NYSE companies.) as they fall in price, we would be able to take profits during the following upward cycle... also forever. Hmmm.<br /><br />Let's pretend for a (foolish) moment that broad market movements are somewhat predictable. Regardless of the direction, professional advice will always fuel the operative emotion: greed or fear! Wall Street's retail representatives (stock brokers), and the new, internet expert, self-directors, rarely go against the grain of the consensus opinion... particularly the one projected to them by their immediate superior (or spouse). You cannot obtain independent thinking from a Wall Street salesperson; it just doesn't fill up the Beemer. Sorry, you have to be able to think for yourself to stay in balance while pedaling on the Market Cycle. Here's some global advice that you will not hear on the street of dreams (and don't get all huffy until you understand what to buy or to sell as well as when to do so): Sell into rallies. Buy on bad news. Buy slowly; sell quickly. Always sell too soon. Always buy too soon, incrementally. Always have a plan. A plan without buying guidelines and selling targets is not a plan.<br /><br />Predicting the performance of individual issues is a totally different ball game that requires an even more powerful crystal ball and a whole array of semi- legal and completely illegal relationships that are mostly self serving and useless to average investors. But, again, let's pretend that a mega million-dollar salary and industry recognition as a superstar creates Master of the Universe quality prediction capabilities... I'm sorry. I just can't even pretend that it's true! The evidence against it is just too great, and the dangers of relying on analytical opinions too real. No one can predict individual issue price movements legally, consistently, or in a timely manner.<br /><br />Investing in individual issues has to be done differently, with rules, guidelines, and judgment. It has to be done unemotionally and rationally, monitored regularly, and analyzed with performance evaluation tools that are portfolio specific and without calendar time restrictions. This is not nearly as difficult as it sounds, and if you are a "shopper" looking for bargains elsewhere, you should have no trouble understanding how it works. Not a rocket scientist? Good, and if you are at all familiar with the retailing business, even better. You don't need any special education evidentiary acronyms or software programs for stock market success... just common sense and emotion control.<br /><br />Wall Street sells products, and spins reality in whatever manner they feel will produce the best results for those products. The direction of the market doesn't matter to them and it wouldn't to you either if you had a properly constructed portfolio. If you learn how to deal unemotionally with Wall Street events, and shun the herd mentality, you will find yourself in the proper cyclical mode much more often: buying at lower prices and, as a result, taking profits instead of losses. Just what if...<br /><br />Coming next: Developing a Value Stock Watch List and Profit Taking Targets.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-3765735015309671032008-07-24T02:28:00.001-07:002008-07-24T02:28:41.273-07:00lakky482<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">1. You can't take more risk than you are comfortable with - emotion is the enemy of the trader. Most of us are slaves to our emotion, which is why most traders fail despite the apparent simplicity of trading. To be successful, you have to manage emotion, and the first step toward emotional mastery is to not take more risk than you are comfortable with. If you can't sleep at night over the potential of losing more than $500 on a stock trade, then you should not risk more than $500 on a stock trade. The less you care about the outcome of a trade, the smarter you will execute it.<br /><br />2. Stops loss orders must be used - one big loss can wipe out the gains of five winning trades. Success requires that you don't take big losses, so utilize stop loss orders. Once you are entered in a trade, enter a stop loss order and stick to it. If your brokerage does not provide the ability to execute stop loss orders, then change brokers.<br /><br />3. No one cares more about your money than you - only you really care whether you make money or not. Therefore, do not depend on others to make you money; you have to take control and know what is going on. You can use the skills of others to help you make decisions, but ultimately, your success in the market will come down to what you do.<br /><br />4. Losers react, winners predict - the market does not care about what happened in the past. If you are using publicly available information to make trading decisions, then you are using old information. The stock market moves on what it expects to happen in the future, and not on what has already happened. Use what has happened in the past to provide clues to what may happen in the future, but don't make decisions on information that is widely known.<br /><br />5. The stock market is not fair - Within every stock, there are a small group of investors who know more than the general public. They have an advantage, because they can better predict what a company will do in the future. To be successful, we have to figure out what the investors with better information are doing, and then do the same.<br /><br />6. Information is biased - the financial industry wants you to buy stocks. The brokerages that finance the companies, the newsletters that get paid to advertise company stories, the promoters that get paid to promote stocks, the media that sell more advertising in an up market and of course, the companies themselves all benefit when stock prices go higher. The more buyers, the higher prices go. Trust no one when making investment decisions, because everyone can have a bias. Only the market can not lie (although it can seem pretty stupid sometimes), therefore, trust what the market tells you.<br /><br />7. Hard work does not make money in the market - you need to work hard to learn how the stock market works. You need to work hard to learn how to manage your emotions. You need to work hard to learn discipline. However, the most money is made in a market that is trending, one where there are lots of opportunities and it seems easy to make money. When the market is not trending, it is harder to find opportunities. Working harder when the going gets tough will cause you to take marginal trades. Take the obvious trades, they are more likely to work.<br /><br />8. Black boxes don't work - there are a lot of companies selling trading systems that magically spit out buy and sell recommendations. The stock market is like a flu virus; just when you think you have it figured out, it changes in to something else. Therefore, systems too must evolve with the market. A system that worked in the past may not work in the future. However, what seems to always work is understanding how humans and crowds behave. Learn that, and you can begin to pick stocks in any market condition. More importantly, learn the art of trading well, knowing that you can not always be right, that you have to limit losses and let profits run and that you have to understand what motivates people to buy and sell. Systems, indicators, and computer programs are simply tools to help you make better decisions.<br /><br />9. The stock market is usually efficient - actually, stock, futures, currencies and any other market that has enough people trading them are usually efficient. That means, most of the time you can not beat the markets. To do better than the masses, you have to identify situations where market efficiency is breaking down. That occurs when the crowd is emotional or when small groups of investors are trading on private information. Usually, that is most easily found when stocks are trading abnormally in terms of price and volume. Focus your attention on abnormal behavior when looking for trading opportunities.<br /><br />10. Discipline is essential - you have to manage risk effectively, you have to use stops loss orders, you have to always be looking for high probability trading opportunities, you have to avoid taking too much risk and you have to let winning positions run. The laws of trading are nothing if you don't have the discipline to follow them.<br /><br />The very first sentence:<br /><br />"Successful trading of the stock market requires a lot more than knowing what to buy or sell. "<br /><br />In other words....<br /><br />IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-50710294553198760012008-07-24T02:27:00.000-07:002008-07-24T02:28:02.180-07:00lakky481<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><p style="text-align: justify;"> On January 1, 2006, a leading financial daily reported the trailing 1-year and 5-year returns of <b>Fidelity Contrafund</b> (Nasdaq: FCNTX), a no-load mutual fund, as 16.23% and 6.21% respectively. While the financial daily's return information is useful, there is more to mutual fund returns. </p><div style="text-align: justify;" class="indent20"> <ul><li>Is the performance of the fund superior or inferior?</li><li>How tax-efficient is the fund in delivering these returns?</li><li>Are the returns of the fund commensurate with the risk the fund manager has taken to achieve them? </li></ul> </div><div style="text-align: justify;">Savvy investors will seek answers to such questions when evaluating mutual fund returns. Before getting into the nitty-gritty of mutual fund returns, it is good to understand what the data reported in the financial daily really mean.<br /><br /><strong>Total Return</strong><br />Fidelity Contra's reported 16.23% 1-year return is the fund's <b>total return</b> for the December 31, 2004 to December 31, 2005 period. In practical terms, $10,000 invested in the fund on December 31, 2004 is worth $11,623 on December 31, 2005. The total return includes more than the increase (or decrease) in the fund's share price. It also assumes reinvestment of all dividends as well as short- and long-term capital gain distributions into the fund at the price at which each distribution is made.<br /><br /><strong>Compound Annual Return</strong><br />The reported 6.21% 5-year return is the fund's <b>compound annual return</b> (also called the average annual return). The compound annual return is a calculated number that describes the rate at which the investment has grown assuming uniform year-over-year growth during the 5-year period.<br /><br />A $10,000 investment in the Contrafund on December 31, 2000 has grown to $13,515.34 on December 31, 2005. The ending value of $13,515.34 = $10,000[(1 + 0.0621)^5] where 6.21% is the compound annual return. The investment in the fund grew at an implied annual growth rate of 6.21% over the 5-year period.<br /><br />While total return and compound annual return are useful, they do not tell how a particular mutual fund has performed compared to its peers. They also do not provide information on the return actually earned by investors after accounting for taxes. Finally, they do not offer insight on how well the fund manager has managed risk while achieving the returns.<br /><br /><strong>Relative Return</strong><br /><b>Relative return</b> compares the performance of a mutual fund against its peers. It is the difference between the total return of the fund and the total return of an appropriate benchmark over the same period.<br /><br />Fidelity Contra is a large-cap growth fund that primarily invests in U.S.-based companies. It is therefore appropriate to compare its performance with that of an average large-cap growth fund. It is also relevant to benchmark the fund against the Standard & Poor's (S&P) 500 index, comprising of large U.S.-based companies.<br /><br />While Fidelity Contra has a compound annual return of 6.21% for the 5-year period ending December 31, 2005, Morningstar reports the average large-cap growth fund has an average annual loss of 8.48% over the same period. The S&P 500 index has an average annual return of 0.54% over the same period. Fidelity Contra has outperformed with a relative return of 14.69% over the average large-cap growth fund and with a relative return of 5.67% over an S&P 500 index fund.<br /><br /><strong>After-Tax Return</strong><br />Unlike assets held in qualified accounts such as 401k plans or individual retirement accounts (IRA), assets held in regular individual or joint accounts are not tax-deferred. For such non-qualified accounts, <b>after-tax return</b> is the return realized after accounting for taxes.<br /><br />Short-term capital gains and short-term capital gain distributions from a mutual fund are currently taxed at the same rate as earned income. Dividends, long-term capital gain distributions and long-term capital gains realized from the sale of fund shares are currently taxed at a lower rate.<br /><br />Fidelity states the compound annual return for Fidelity Contra before taxes is 6.21% for the 5-year period ending on December 31, 2005. When all distributions are taxed at the respective maximum possible federal income-tax rate, the after-tax return dips to 6.10%. The after-tax return drops further to 5.33% after accounting for the long-term capital gain tax due on sale of the fund shares.<br /><br /><strong>Risk-Adjusted Return</strong><br />Some fund managers take more risk than others. It is important to assess a fund's return in light of the amount of risk the fund manager takes to deliver that return.<br /><br /><b>Risk-Adjusted Return</b> is commonly measured using the Sharpe Ratio. The ratio is calculated using the formula (mutual fund return - risk free return)/standard deviation of mutual fund return. The higher the Sharpe ratio, the better is the fund's return per unit risk.<br /><br />Based on returns for the 3-year period ending on November 30, 2005, Morningstar reports Fidelity Contra's Sharpe ratio as 1.74. The fund's Sharpe Ratio may be compared with those of similar funds to determine how the fund's risk-adjusted return compares with those of its peers.<br /><br /><strong>Beyond Mutual Funds</strong><br />Return concepts such as relative return, after-tax return, and risk-adjusted return may also be used for evaluating separately-managed accounts, hedge funds and investment newsletter model portfolios.<br /><br />The AlphaProfit Sector Investors' Newsletter, for example, tracks the total return and compounded annual return of its Core and Focus model portfolios. To provide Subscribers with a more complete picture of model portfolio returns, this newsletter also tracks the relative and risk-adjusted returns of the model portfolios. The newsletter's model portfolios are constructed and repositioned with a view to maximizing after-tax returns.<br /><br /><strong>Summary</strong><br />While total return and compound annual return are useful, they do not provide a complete picture of a mutual fund's performance. Metrics such as relative return and after-tax return offer insights on the fund's relative performance and tax-efficiency. Risk-adjusted returns enable investors to assess how a fund's returns stack up when risk is factored in.<br /><br />Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-54588492931798760042008-07-24T02:26:00.001-07:002008-07-24T02:26:57.615-07:00lakky480<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><p style="text-align: justify;"> On January 1, 2006, a leading financial daily reported the trailing 1-year and 5-year returns of <b>Fidelity Contrafund</b> (Nasdaq: FCNTX), a no-load mutual fund, as 16.23% and 6.21% respectively. While the financial daily's return information is useful, there is more to mutual fund returns. </p><div style="text-align: justify;" class="indent20"> <ul><li>Is the performance of the fund superior or inferior?</li><li>How tax-efficient is the fund in delivering these returns?</li><li>Are the returns of the fund commensurate with the risk the fund manager has taken to achieve them? </li></ul> </div><div style="text-align: justify;">Savvy investors will seek answers to such questions when evaluating mutual fund returns. Before getting into the nitty-gritty of mutual fund returns, it is good to understand what the data reported in the financial daily really mean.<br /><br /><strong>Total Return</strong><br />Fidelity Contra's reported 16.23% 1-year return is the fund's <b>total return</b> for the December 31, 2004 to December 31, 2005 period. In practical terms, $10,000 invested in the fund on December 31, 2004 is worth $11,623 on December 31, 2005. The total return includes more than the increase (or decrease) in the fund's share price. It also assumes reinvestment of all dividends as well as short- and long-term capital gain distributions into the fund at the price at which each distribution is made.<br /><br /><strong>Compound Annual Return</strong><br />The reported 6.21% 5-year return is the fund's <b>compound annual return</b> (also called the average annual return). The compound annual return is a calculated number that describes the rate at which the investment has grown assuming uniform year-over-year growth during the 5-year period.<br /><br />A $10,000 investment in the Contrafund on December 31, 2000 has grown to $13,515.34 on December 31, 2005. The ending value of $13,515.34 = $10,000[(1 + 0.0621)^5] where 6.21% is the compound annual return. The investment in the fund grew at an implied annual growth rate of 6.21% over the 5-year period.<br /><br />While total return and compound annual return are useful, they do not tell how a particular mutual fund has performed compared to its peers. They also do not provide information on the return actually earned by investors after accounting for taxes. Finally, they do not offer insight on how well the fund manager has managed risk while achieving the returns.<br /><br /><strong>Relative Return</strong><br /><b>Relative return</b> compares the performance of a mutual fund against its peers. It is the difference between the total return of the fund and the total return of an appropriate benchmark over the same period.<br /><br />Fidelity Contra is a large-cap growth fund that primarily invests in U.S.-based companies. It is therefore appropriate to compare its performance with that of an average large-cap growth fund. It is also relevant to benchmark the fund against the Standard & Poor's (S&P) 500 index, comprising of large U.S.-based companies.<br /><br />While Fidelity Contra has a compound annual return of 6.21% for the 5-year period ending December 31, 2005, Morningstar reports the average large-cap growth fund has an average annual loss of 8.48% over the same period. The S&P 500 index has an average annual return of 0.54% over the same period. Fidelity Contra has outperformed with a relative return of 14.69% over the average large-cap growth fund and with a relative return of 5.67% over an S&P 500 index fund.<br /><br /><strong>After-Tax Return</strong><br />Unlike assets held in qualified accounts such as 401k plans or individual retirement accounts (IRA), assets held in regular individual or joint accounts are not tax-deferred. For such non-qualified accounts, <b>after-tax return</b> is the return realized after accounting for taxes.<br /><br />Short-term capital gains and short-term capital gain distributions from a mutual fund are currently taxed at the same rate as earned income. Dividends, long-term capital gain distributions and long-term capital gains realized from the sale of fund shares are currently taxed at a lower rate.<br /><br />Fidelity states the compound annual return for Fidelity Contra before taxes is 6.21% for the 5-year period ending on December 31, 2005. When all distributions are taxed at the respective maximum possible federal income-tax rate, the after-tax return dips to 6.10%. The after-tax return drops further to 5.33% after accounting for the long-term capital gain tax due on sale of the fund shares.<br /><br /><strong>Risk-Adjusted Return</strong><br />Some fund managers take more risk than others. It is important to assess a fund's return in light of the amount of risk the fund manager takes to deliver that return.<br /><br /><b>Risk-Adjusted Return</b> is commonly measured using the Sharpe Ratio. The ratio is calculated using the formula (mutual fund return - risk free return)/standard deviation of mutual fund return. The higher the Sharpe ratio, the better is the fund's return per unit risk.<br /><br />Based on returns for the 3-year period ending on November 30, 2005, Morningstar reports Fidelity Contra's Sharpe ratio as 1.74. The fund's Sharpe Ratio may be compared with those of similar funds to determine how the fund's risk-adjusted return compares with those of its peers.<br /><br /><strong>Beyond Mutual Funds</strong><br />Return concepts such as relative return, after-tax return, and risk-adjusted return may also be used for evaluating separately-managed accounts, hedge funds and investment newsletter model portfolios.<br /><br />The AlphaProfit Sector Investors' Newsletter, for example, tracks the total return and compounded annual return of its Core and Focus model portfolios. To provide Subscribers with a more complete picture of model portfolio returns, this newsletter also tracks the relative and risk-adjusted returns of the model portfolios. The newsletter's model portfolios are constructed and repositioned with a view to maximizing after-tax returns.<br /><br /><strong>Summary</strong><br />While total return and compound annual return are useful, they do not provide a complete picture of a mutual fund's performance. Metrics such as relative return and after-tax return offer insights on the fund's relative performance and tax-efficiency. Risk-adjusted returns enable investors to assess how a fund's returns stack up when risk is factored in.<br /><br />Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-34658159177471008752008-07-24T02:25:00.002-07:002008-07-24T02:26:22.841-07:00lakky479<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">The Retirement savings plan, Roth 401(k) introduced by the Economic Growth and Tax Relief Reconciliation Act, 2001 will come into force from January 2006. Unlike a traditional 401(k) Retirement Plan, a Roth 401k plan applies to all employees but the latter requires the contributions to the plan account with after-tax dollars while a 401k plan allows for contributions with pre-tax dollars.<br /><br />You may not be allowed to contribute to a Roth IRA if your income level is higher but you can certainly qualify for a Roth 401(k) plan, as there are no income specifications here. In addition, you can contribute up to $15,000 for 2006, as in a 401(k) plan and the limit reaches $20,000 for individuals turning 50 years of age or older by the end of the year. The increase in the limit is termed as the catch-up contribution which was a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001.<br /><br />As far as the employers' contributions are concerned, these amounts will be matching the contributions of employees but with pre-tax dollars. The employer contribution will be rolled up in a separate account and funds withdrawn from that account will be subjected to taxes on withdrawal.<br /><br />The Roth 401(k) plan may not allow you to get the benefit of the contribution from pre-tax dollars but it allows you to withdraw tax-free money after retirement. You can avoid paying income tax on the cash you withdraw from your plan account after retirement. But your age should be 59 and 1/2 years and you should have held the plan account for more than 5 years or more. In case you withdraw money before retirement, you will have to pay taxes (almost 35% of the contribution) and a 10% penalty.<br /><br />A Roth 401(k) plan can be helpful as it prevents you from tax payments on withdrawal after retirement. But this will help you only if your tax bracket after retirement is same or higher than what it is now. If your current tax bracket is low, then you can contribute more towards the Roth 401(k) plan account. Your savings thus increase and you get to withdraw a higher amount at retirement. You can also roll over your Roth 401(k) balance into a Roth IRA whenever you leave your employment.<br /><br />You can contribute a part of the allowed limit, which is $15,000 to a Roth 401(k) plan account and the rest to a 401(k) account, and thereby reduce the tax payments. This is because a Roth 401(k) allows you to contribute after-tax dollars whereas a 401(k) plan account allows for pre-tax contributions.<br /><br />With a Roth 401(k) plan contribution, you don't take home several dollars since you are allowed to accumulate after-tax dollars into the plan account. But then you don't have to pay taxes on the amounts taken out after retirement and this helps you especially if the tax bracket is higher at that time.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-66570929649640925502008-07-24T02:25:00.001-07:002008-07-24T02:25:43.795-07:00lakky478<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">The Retirement savings plan, Roth 401(k) introduced by the Economic Growth and Tax Relief Reconciliation Act, 2001 will come into force from January 2006. Unlike a traditional 401(k) Retirement Plan, a Roth 401k plan applies to all employees but the latter requires the contributions to the plan account with after-tax dollars while a 401k plan allows for contributions with pre-tax dollars.<br /><br />You may not be allowed to contribute to a Roth IRA if your income level is higher but you can certainly qualify for a Roth 401(k) plan, as there are no income specifications here. In addition, you can contribute up to $15,000 for 2006, as in a 401(k) plan and the limit reaches $20,000 for individuals turning 50 years of age or older by the end of the year. The increase in the limit is termed as the catch-up contribution which was a provision of the Economic Growth and Tax Relief Reconciliation Act of 2001.<br /><br />As far as the employers' contributions are concerned, these amounts will be matching the contributions of employees but with pre-tax dollars. The employer contribution will be rolled up in a separate account and funds withdrawn from that account will be subjected to taxes on withdrawal.<br /><br />The Roth 401(k) plan may not allow you to get the benefit of the contribution from pre-tax dollars but it allows you to withdraw tax-free money after retirement. You can avoid paying income tax on the cash you withdraw from your plan account after retirement. But your age should be 59 and 1/2 years and you should have held the plan account for more than 5 years or more. In case you withdraw money before retirement, you will have to pay taxes (almost 35% of the contribution) and a 10% penalty.<br /><br />A Roth 401(k) plan can be helpful as it prevents you from tax payments on withdrawal after retirement. But this will help you only if your tax bracket after retirement is same or higher than what it is now. If your current tax bracket is low, then you can contribute more towards the Roth 401(k) plan account. Your savings thus increase and you get to withdraw a higher amount at retirement. You can also roll over your Roth 401(k) balance into a Roth IRA whenever you leave your employment.<br /><br />You can contribute a part of the allowed limit, which is $15,000 to a Roth 401(k) plan account and the rest to a 401(k) account, and thereby reduce the tax payments. This is because a Roth 401(k) allows you to contribute after-tax dollars whereas a 401(k) plan account allows for pre-tax contributions.<br /><br />With a Roth 401(k) plan contribution, you don't take home several dollars since you are allowed to accumulate after-tax dollars into the plan account. But then you don't have to pay taxes on the amounts taken out after retirement and this helps you especially if the tax bracket is higher at that time.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0tag:blogger.com,1999:blog-5789027592960078099.post-79692691937716073442008-07-24T02:24:00.002-07:002008-07-24T02:25:10.243-07:00lakky477<marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee><div style="text-align: justify;">nvestment Advisors (IAs) come in all different intellectual, professional, and alphabetical varieties. They range in educational qualifications from High School dropout to PhD, and can be professional Accountants, Insurance Salesmen, Stock Brokers, Investment Managers, Dentists, Lawyers, TV personalities, and Gourmet Chefs. Anyone can be an Investment Advisor! It seems reasonable that your trust should gravitate toward those who have educational credentials, hands on experience with their own money, and no direct financial benefit from the advice provided. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.<br /><br />Why do people become Investment Advisors? Call me skeptical, but I don't think it's the ethereal glow they feel after implementing your new Financial Plan. Actually (once you appreciate that IAs are the primary delivery system for Wall Street's huge collection of one-size-fits-all products), you'll realize that it's the money. No conspiracy here, just a subtle brainwashing that has convinced you that the Advisor's primary objective is to protect your family. In reality, the primary goal of commissioned advisors is to protect their own families, and they accomplish this by selling Investment Products. The Investment Advisor label has become a euphemism for product salesperson just as Financial Planner nearly always means Insurance salesperson. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.<br /><br />Serious IAs can be identified by acronyms following their names (also by dark three piece suits and facial hair), RIA and CFP being the most common. As professional as this seems, designations do not create trustworthiness, for several reasons: IAs must become RIAs to be licensed to sell investment products. Most practitioners affiliate themselves with major Wall Street Institutions to defray their start up costs and many are subsidized in return for pushing their sponsor's products. Finally, most advisors will remain in bed with one company at a time throughout their careers, constantly touting the present firm's products as "best". Hmmm. Hundreds of companies, thousands of IAs, convincing millions of shoppers (investors) that they have just purchased the one very best product to achieve their financial goals. From cradle to grave, most IAs dance to a tune that's not being played by their clients.<br /><br />Over the past several years, Wall Street has managed to invade the once respected Insurance Industry by attaching Mutual Funds to life insurance and annuity products, making them far too speculative to achieve their once guaranteed objectives. But the "variable products" scam dwarfs in potential long-term impact to the more recent high crime against investors. This is the one that ignores the (in-your-face-obvious) Conflict of Interest when Accountants sell investment products! Many professionals have multiple degrees; few have multiple practices. You deserve a specialist. If your CPA/Lawyer/Doctor (who's next) can make a living in his primary practice, why sell investment products? Greed? Hubris? And why does Wall Street allow these non-professionals to push investment products? Don't be naive, the more people out there pushing Investment Products, the bigger the bonus for the Captains of the Universe. Stay safer by finding a fee only advisor who has just one profession... and the ability to say NO.<br /><br />In spite of the fact that the "burn out" rate among IAs compares with that of restaurants and Mutual Fund Managers, and that the advisory business itself is a cut-throat, competitive battlefield, the Financial Institutions that employ the majority of IAs prosper, multiply, and produce more product for your "eyes wide shut" consumption... because you, your products, and the management fees remain! A caring and successful Investment Advisor makes an excellent income and should; a successful financial institution buys other financial institutions!<br /><br />The hierarchy of commissions paid to IAs can exceed 10% on "private deals", limited partnerships, and a litany of speculative products and services. On the more controlled substances (sic), Annuity commissions can run above 8% with 10-year lock up provisions common and Mutual Funds provide a generous 4% to 6% whether you see them or not. New issues, odd lot Bonds, and other securities that don't show a commission, include marketing fees and mark ups that can be substantial. What ever happened to individual Equity portfolios? It's a combination of in-greed-ients... products are less work and produce more money. Stay safer by finding a fee only advisor who has just one profession, the ability to say NO, and who knows something about individual securities.<br /><br />Most people need Investment Advisors. Life Insurance protection is vital; fixed annuities are helpful for people of limited means; Mutual Funds are the only option (pity) in most self-directed retirement plans. The vast majority of employed Americans are Investors, actively or passively, with little time or expertise to select securities and manage portfolios. (If the Democrats would accept this, they just might win an election.) But recent experience confirms that we all have a responsibility to our own money, a responsibility that we should only delegate to a professional if we know what the professional is supposed to know. The fact that he or she is an XYZ Fund representative just isn't enough. You need an independent advisor that has ideas rather than products and an understanding of markets, not marketing. If you are willing to ask the right questions, you can find an IA who might just be able to help you (and herself) at the same time. Try these for starters: Do you sell any products? Do you have a personal portfolio that I can review? Do you provide a "fee only" advisory service? How long have you been in the financial services business, and is it your only business? (It's not your job to educate "newbies"!) Are you affiliated with any other financial services companies? Do you have at least five non-family clients who you have been advising for at least five years... that I can contact directly? Will you be compensated for referring me to someone? Stay safer by finding a fee only advisor who has just one profession and the ability to say NO.<br /><br />The ability to say NO? An advisor will tell you not to do something that he feels is inappropriate... a salesman will do what you tell him to do.</div><marquee><a href="http://almp3s.blogspot.com">Just Click here for Telugu, Hindi, Malayalam, Tamil, Articles, Animations,Live TV Shows</a></marquee>J. Nagadhanalakshmihttp://www.blogger.com/profile/13989031191509789307noreply@blogger.com0