Since this new investment system does not yet have much diversity, I was looking for different investments. One of the most interesting that I found was the Euro Pacific International Value Fund. A mutual fund? Yes, I am a bit surprised myself.
After writing many posts about how bad mutual funds are, why am I considering this one? Because it makes sense. It follow’s Peter Schiff’s investment approach. I read a few of his books and I agree with his investment philosophy. You can read about it here.
Why is this mutual fund a good idea?
Read more…
Investing, Money, Success
currencies, dollar, investment system, mutual funds, risk, stop loss
Here is the second installment about my new investment system. So far, I explained some trades in silver and gold. This post is about trades in the currency markets.
Unlike many currency trading system, this system is not an intraday system. I expect the trades to last for several months, at least. They are based on global economic policy, and the massive printing of U.S. dollars. These trades are based on the belief that the Indian and Chinese economies will perform better than the U.S. economy in the near future. Read more…
Investing, Money, Success, US Economy
currencies, dollar, forex, Money, risk, rupee, stop loss, Success, US, Yuan
As Social Security begins to collapse and the millions of baby boomers begin to retire, many will wonder where all the money went. It was only last year when would-be retirees lamented,
“My portfolio is down 50%, so I can’t retire. I don’t even open up those statements anymore”
Dow 2006 - 2010
Did you see these people on the news? I remember them clearly. But now that the market has recovered, they are long forgotten. And the lesson was not learned. Most people have their entire retirement account invested in mutual funds. As soon as the market goes down again they will be in the same unenviable position.
Read more…
Investing, Money, Success
Investing, Money, mutual funds, retire, risk, social security, stop loss, Success, train wreck
Finding a path is easier than making your own sometimes.
You can lose direction. You can run into unforeseen obstacles. You can lose interest. Or, you can just get tired.
Investors and traders are lucky because there have been trailblazers in the investment world for more than a hundred years. Some of them are less well known than others. Their success has also been well-documented.
Some of the stories are actually reverse-lessons. You should do the opposite of what these legends of stock market success did. Especially after they earned their money.
Here are a few famous investors listed at My SMP–and how they arrived at their fortunes.
Read more…
Accelerating Technology, Investing, Money, Online Investing AI, Success
great investors, investors, Money, risk, traders, trading, wealth, wealth management
pic by dizznbonn via Flickr Creative Commons
The trader’s Catch 22 is that high risk can lead to high returns. Oh, and high risk can also lead to devastating losses.
But the great trading dilemma is to figure out how much return you’ll receive for the risks you take. One way to estimate this risk-reward ratio is by using the Sharpe ratio.
The Sharpe ratio is named after Nobel-prize winning economist William Sharpe.
The ratio is calculated by subtracting the risk-free rate – such as that of the 10-year U.S. Treasury bond - from the rate of return for a portfolio and dividing the result by the standard deviation of the returns.
This may sound a little complicated, but compared to other ways of determining risk, the Sharpe Ratio is a snap.
Read more…
Automated Trading, Investing, Money, Online Investing AI
Automated Trading, invest, money management, risk, sharpe ratio, smart investing, strategy, trading, wealth
Picture courtesy banspy @ Flickr
Trading and gambling have been metaphorically tied together forever.
Traders talk about making a bet. They say they hit the jackpot, or they left their money on the table.
Trading and gambling, after all, do share commonalities–risk, returns, a certain element of randomness, and position sizing–to name a few.
But the comparisons, or lessons, don’t stop there.
According to a new study from Cornell University, investors and traders can all learn from a slightly contrarian gambling strategy. The study makes the case that online poker players who win more hands, end up losing more money.
Read more…
Accelerating Technology, Automated Trading, Business Strategy, Dreams Come True, Internet, Investing, Money, Online Investing AI, Success, US Economy
discipline, gambling, Investing, Money, money management, poker, risk, wealth
creativedc@Flickr
Looking over some of the new financial regulation proposals and listening to politicians–which I never advise doing–there’s a new vibe about money and greed in the Beltway.
Gone are the trust in markets and the notion that people can self-regulate. Now, our officials are saying our trust free enterprise has been misplaced and has been squandered into greedy financiers who pushed hard for quick bucks, at the risk of long-term growth. For proof, all you have to do is look at the economic collapse, they say.
The new theory is that people should limit their reward-seeking. Turn their attention to long-term growth. Anything else is just greed.
The question that remains is: will this new outlook be any more successful than its ideological predecessor?
Read more…
Automated Trading, Investing, Money, Online Investing AI, Success, US Economy
fat cats, politicians, regulation, rewards, risk, risk management, washington d.c., wealth
We’re pretty impressed with Automated Trading. As a concept, it makes sense, especially for the busy, self-directed investor.
- You have the return power of active trading.
- You don’t have the greed and fear of active traders (if programmed correctly).
- You don’t have the fees and other payment hijinx of mutual funds.
- And you don’t have all the time spent researching the market and waiting to make trades.
So, throw all your money into Automated Trading. Forget about the index funds and long-term investments.
I’m not sure that’s the best idea.
Read more…
Accelerating Technology, Automated Trading, Investing, Money, Online Investing AI
algorithmic trading, Automated Trading, index fund, Investing, ira, mutual fund, risk, the wealth singularity, trading, wealth
batmoo@Flickr
The most common misconception about wealthy entrepreneurs is that they’re risk takers.
As an example, people who believe this will tell you that Bill Gates dropped out of Harvard–talk about a sure-fire way to land a primo gig–to start Microsoft. Dropping a sure thing to pursue a whispy dream is the stuff of entrepreneurial legend.
But it’s not exactly how it happened. Gates took a leave of absence from the school, so he could re-enter if things at his fledgling company didn’t turn out as planned.
Gates’s story proves that successful entrepreneurs rarely take risks; rather, they take calculated risks. Here are six ways entrepreneurs approach and master risk-taking–and how investors can use them to manage their own risk.
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Accelerating Technology, Automated Trading, Business Strategy, Dreams Come True, Internet, Investing, Money, Online Investing AI, Success, US Economy
business, entrepreneur, Investing, risk, startup
Many people equate investing with a buy and hold strategy. They put money into their 401K or IRA account, and then buy mutual funds. They get their investing advice from the people who sell the mutual funds. They say, “No matter how far it goes down, don’t sell. Just wait until it comes back up.” And, they forget about their investment until their quarterly statement arrives.
On the other hand, the richest and most successful investors don’t buy mutual funds at all. One of their more popular investment choices are hedge funds. Hedge funds are similar to mutual funds in that the manager chooses which assets to buy and sell. Most people think that hedge funds are riskier because they are not limited in the investment strategies that they can use.
While nearly all mutual funds buy and and sell stocks, hedge funds can profit from a wide variety of strategies. For example, they can sell stocks short. They can participate in options, futures and currency markets. These markets offer higher leverage than stocks, so the government has labeled hedge funds as “risky”. Only accredited investors are allowed to invest in hedge funds.
Read more…
Investing, Money
buy-and-hold, currencies, hedge funds, leverage, mutual funds, options, performance, risk
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
