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Successful Part Time Trading Strategies

Financial Security One of the challenges many investors face is time. How do you find the time to follow the market when you are already working 9-5? Short of winning a big jackpot at an iPhone casino or striking it lucky in the lottery and being able to retire, you will need to find a way to combine a full time job with a successful trading career.

Often traders make their trades during their work breaks or early in the morning or late evening but with such a fluid market, sporadic trading can mean frequent lost opportunities. Part time trading can be tricky but there are some strategies that can help you make the most out of the time you do have.

  • Choose your trading time If you can trade at a specific time each day or night, limit your trading to markets that are active at a time when you can participate. Trading specific currency pairs during a set time every day can be to your benefit and you can utilize your additional free time to research the market and implement trades that could lead to a successful strategy.
  • Place orders with a FOREX broker.If you are unable to participate in trading at a certain time you may place Stop, Limit or Market orders with a FOREX broker who will act on your behalf. Ensure you place your orders according to how you will enter and exit the market to ensure your orders are followed correctly.
  • Set your own trading orders with your FOREX platform and implement them in order to avoid missing enter and exit positions. This may incur additional fees but the overall results will be worthwhile.
  • Taking fewer positions and holding for longer are good part timer’s strategies if you are working in currency pairs. To do this you must really understand your market and ensure that stop-loss orders are in place with all your trades to minimize losses if the market moves against you.

Part time trading is better than no trading

Forex trading is one of the most desirable markets due to its 24 hour availability and its constant flux, providing adequate opportunities to make profits and allowing traders to be exceptionally flexible. It’s thanks to these characteristics that make it possible for part time traders to benefit.

 

Canadian and US REITS – Out of Favour or Added Flavour?

Real Estate Investment TrustsCanadian and U.S. Real Estate Investment Trusts (REITs) have performed exceptionally well in the past 3 years. A quick look at the S&P/TSX Capped REIT Index and you’ll see 3 year returns of 18% plus and 1 year returns of 16% plus. With a modest 0.55% return Year-to-Date, murmurs can be heard among institutional and individual investors alike, wondering if REITs have fallen out of favour.

 

 

Today, we’ll address this question specifically and then consider some reasons why we believe Canadian REITs still add necessary “flavour” to a diversified portfolio as well as offer some specific REITs you might want to consider to spice up your portfolio.

 

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Best Tips for Financial Security

Financial SecurityFinancial security is sought by both beginning and experienced investors but the road to get there can be longer and more difficult for some than others. To help you make it to your goals a little more quickly than you might on your own, we’re going to share some of the best tips for attaining financial security.

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Starbucks: A Star Stock for 2013

StarbucksIf you are looking for a star stock for you portfolio in 2013, consider Starbucks!

I think it’s only fair that you know my prejudice before reading this article. That’s right… I’ve never been one to consume Starbucks. With my general distaste of coffee, my aversion to sweats, and my squeaky tight wallet, you won’t typically find me inside a Starbucks. And I’m not one to order a “tall” drink only to discover it’s the smallest drink they offer. Confusing for simple folk like me!

Yet you’ll find me in Starbucks in 2013 more than ever before… and as a result, I thought I’d also share with you a few reasons why you might want to consider this stock star for your portfolio.

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High Risk Stock Trades

high riskSome people would have you believe that ALL stock trading is high risk investing or even gambling. Of course, such hyperbole is simply not true. More often than not, such broad pessimism comes from those who have lost money due to careless and high risk stock trading or simply have another agenda to help themselves by promoting a more passive approach.

 

But that’s not to say there is some truth underlying their concerns. After all, you don’t have to look to far to find those who lost money in the stock market, especially during crises such as the dot.com bubble of the early 2000′s or the crisis of 2007-2008. So, are there some stock trades that are consistently high risk and others that are lower risk? And, if so, which types of stock trades are best suited for your personal risk tolerance levels? Today, we’ll explore four high risk stock trades that cause many investors to lose money more often than not.

 

High Risk Stock Trades

High risk is self-defined. For some, high risk is any loss while for others, they’ll allow their investment portfolio to ebb and flow 25+%. But generally speaking, high risk trades are those trades which consistently cost the majority of intelligent investors a significant loss in their portfolios. To that end, here’s three to consider.

  • Penny Stocks – Some investors think that the best way to make money in stocks is to buy them when they’re barely starting out and long before any sustainable growth phase. Usually these investors are hoping that this stock will produce a product that will make them a market changer. Friends will tell you the company has had a break-thru that simply hasn’t been announced yet or they are sitting on a product that will cause even Apple to tremble. This type of stock trading is more akin to gambling than it is to  wise investing. Beware of the flashy emails, the glossy brochures, the 1-800 numbers with sales people on the other end and other forms of over-publicized promotions.
  • Junior Tech Stocks – There is a delicate balance between risk and reward when it comes to tech stocks. We can all think of market leading tech stocks who once traded as junior tech stocks. And our memories are often short, or completely oblivious, when it comes to those companies who had promising young entrepreneurs and a great idea.
  • Frequent Trading – Some investors are students of the market and they want to be actively involved in watching their investments. They are to be commended. But there’s a fine line for some between attentive trading and frequent trading that diminishes gains and increases costs. Between brokerage commissions, losses between the bid/ask spread and possible tax implications, frequent trading can create unnecessary losses.

 

Managing High Risk Trades

Knowing the high risk trades is part of the battle. Knowing how to manage the high risk trades to minimize the risk is an equally important lesson. May I quickly suggest a few steps you can take?

  • Psychological Commitment – If you were to sit down with a friend and explain to him or her why you’re making the trade and you find yourself using words like “hope,” ” feel,” “believe,” or “just know it,” you likely need a new perspective. What we are trying to do is avoid emotional trading. If you feel like you’re taking a gamble, don’t invest your money.
  • Trade in Slow Motion – Slow everything down… become a real investor of a company. Study their conference calls, look for increasing revenues, and avoid trading each and every day. Not only will a longer time frame help you avoid emotional trading, but it will also save you lots of money related to commissions. Personally, I think the best way to start is to place orders once a month. Then, when you’re alerted that you’ve purchased a stock, simply go in and set up your stop losses. Then, once a month, take a look at the company. If you’re relatively new to investing, find yourself too emotionally involved, or are paying too much in commissions, trade in slow motion.

 

Some people would have you believe that ALL stock trading is high risk investing or even gambling. Of course, such hyperbole is simply not true. If you avoid some of the high risk trades and take a couple of simple steps to adjust your trading style, you’ll find your losses minimized, your profits maximized, and your emotions stabilized as you invest in the markets.

 

 

A Worm in the Apple Core?

AppleApple’s recent stock price drop from $705.07 to the low $500′s has me wondering if there’s a worm eating away at its core. This once “can-do-nothing-wrong” company which seemed to transition smoothly during the succession of it’s superstar leader Steve Jobs to the equally plain named Tim Cook is now under scrutiny by more than just the nay-sayers. So what are the issues and should investors take advantage of Apple’s current stock price or anticipate further declines in 2013?

 

The Problem of Cash

Cash is usually considered as assets on a company’s balance sheet, not a liability!
It seems strange to even write those words… “problem of cash.” After all, cash and cash equivalents are considered as assets on a company’s balance sheet, not a liability. Yet many analysts and some investors seem to be concluding that Apple’s massive cash balance is negative for the stock. CNBC recently interviewed Leon Cooperman, hedge fund manager of Omega Advisors, who claimed Apple’s “financial policy” was putting it at a disadvantage to companies such as Qualcomm and Google. Personally, I think such a declaration is hyperbole but even as with a lie, there is usually some snippet of truth somewhere within.

 

Perhaps Cooperman’s assault is as a result of Apple’s resistance to offer a special dividend in December since so many other cash-rich companies did prior to the “fiscal cliff” resolution. I’m not really sure, but I do know that Apple has already committed to shareholders that they’ll return approximately $45 billion over the course of the next three years.

 

That doesn’t mean that investors are somehow discounting Apple’s cash…
Personally, I think those viewing Apple’s cash as a liability rather than an asset is suspicious. Since when do we re-write the basics of economics and take a company who is increasing revenues, carries no debt, and has a growing balance sheet is somehow a concern for investors? Of course, that doesn’t mean that investors are somehow discounting Apple’s cash. Why, I’m not sure, but certainly it seems like Cooperman is not alone. Apple could deploy its cash more aggressively but I’m willing to wait and see how Tim Cook and associates will propel the stock higher as they build the company. In fact, Apple’s wisdom of waiting to see how the U.S. government conducts its impending corporate tax reform, while frustrating to the impatient investor, may turn out to be a super-star move if corporate tax rates are lowered as a part of the debt ceiling/sequester debate.

 

The Problem of Competition

Michael Jordon Samsung and in a less direct fashion, Google, pose as the only real competitors for Apple. After all, finding real competitors for Apple is like trying to find someone who could stop Michael Jordon in his prime. But if there are two companies that are and may continue to eat into Apple they would be Samsung and Google.

 

Projections for 2013 have Samsung widening its lead over Apple in global smartphone sales. Perhaps the most notable reasons is Samsung’s widening product line. After all, Apple tends to focus on one all-star product with little supporting cast. Unlike the iPod with its broad product offerings, and as a result broad price points, the iPhone has typically been expensive and more expensive. The iPad has experienced a similar fate. Even with the release of the iPad Mini, uses are left questioning if the premium they’ll pay for the Apple product will be realized in tangible enjoyment. Apple lacks product diversification. Combine Samsung’s broad product offerings with Google’s Android choices and it’s no wonder Apple is losing market share in the smartphone industry, especially amongst the lower price points.

 

Yet, the “problem of competition” is also a story of opportunity for Apple. Clearly, Apple dominates the higher price point market with almost all of their products. In fact, even those who have purchased smartphones using the Android platform are cited in surveys as saying if they felt they had the money, they would prefer to purchase an Apple product. It makes me wonder… if Apple were willing to produce a competitive product in the lower price bracket if they’d be able to penetrate these lower priced markets now dominated by their competitors such as Samsung and Google. And don’t forget about Apple’s suspected development of TVs. Certainly, they can’t expect to compete with the SmartTVs of Samsung with a noticeably higher price point.

 

And Samsung isn’t without its own internal issues. One might be able to successfully argue that diversity of products can lead to dilution of focus. And Samsung is nothing if not diverse. With its prongs into display electronics, mobile technology, telecommunications, storage technology and other components for electrical devices and LED technology, Samsung is a supplier for nearly everything electronic in your home.

 

And not unlike Apple, Samsung keeps most of the profits it makes within the company
And not unlike Apple, Samsung keeps most of the profits it makes within the company. But there remain two risks unique to Samsung from which Apple is immune. First, there is the political risk. Like many overseas companies, Samsung’s numbers are somewhat of a mystery. The financial scrutiny of the West may allude the South Korean company. Furthermore, with South Korea still formally at war with North Korea, Samsung is somewhat vulnerable to political instability.

 

Second, and more importantly, Samsung is a family business. With family businesses can come controversy and Samsung has three children fighting over key roles within the company such as chairman, COO, and others. Unless they can settle their family affairs, Samsung may struggle to remain focused on its goal of being every household’s primary provider of all their electronics.

 

A Worm in the Core?

Is there a worm in the Apple core? No matter which way you slice it, Apple has some challenges. When I look inside, I see some bruising from the competition and some seeds of opportunity. I suppose we’ll have to wait and see what Cook does with Apple before we’ll be able to assess whether or not it’s a sweet taste in the mouth of most investors in 2013.

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