The Management Consulting Group

Even before you set forth for your foreign travels you should try to identify what your worldwide automobile rental options are.

This is simply because you cannot be sure if you would get the kind of service (and consideration) which you would detect wherever you reside, in this new location that you’re travelling to.

Large global companies would prepare the reservation on your behalf, online or over the phone, and you need to make certain that you take a copy of the reservation application with you; clearly showing the name of the booking agency, the make and model of the car that has been set aside for you, the time period of the reservation as well as the rate agreed in both Pounds as well as the regional currency.

After you pick up the vehicle the charter organization would in all probability expect you to pay through a credit card and will run your card twice. The first run will be to take payment for the leasing period and the second run would be as a precautionary measure against any harm to the vehicle when you get it back. Though they could swipe your card a second time they will not normally process the payment, except if the automobile is damaged when you return it, and consequently you must make sure that they give you the second payment slip to you when you take the car back, or destroy it in front of you. In several instances rental firms will permit you to pay in cash but, in these conditions, they would usually want you to lodge cash deposits with them in order to cover possible destruction.

An additional factor to look into is what your choices might be in case of any untoward episode like a smash up.

Make sure that you arrange up to date insurance and, if needed, be set to pay a little bit in addition to get comprehensive cover insurance . The last thing you need is to be caught up in a horrible lawful battle abroad as you weren’t adequately covered.

Keep in mind that the leased car can have engine trouble at any time, and this is why you must pay special consideration to this facet if you expect to take the vehicle on long drives. In such instances, you should have contact details of pertinent persons at hand even ahead of your taking the car as intended.

Hence, it is always suggested that you go through a trusted and reputable international automobile charter business when you go worldwide, and simply following the points mentioned herein ought to take many of your car charter woes away.

The Moving Average Convergence Divergence charts, or MACD charts for short, are a technical indicator that is derived from the more simple moving average.

The MACD charts are oscillating indicators, meaning that they move above and below a centerline or zero point. As with other oscillating and momentum indicators, a very high value indicates that the stock is overbought and will likely drop soon. Conversely, a consistently low value indicates that the stock is oversold and is likely to climb.

THE 12-DAY AND 26-DAY EMAS

The MACD charts are based on 3 exponential moving averages, or EMA. These averages can be of any period, though the most common combination, and the one we will focus on, are the 12-26-9 MACD charts.

There are 2 parts to the MACD. We will focus first on the first part, which is based on the stock’s 12-Day and 26-Day EMA. The 12-Day EMA is the faster EMA while the 26-Day is slower.

The logic behind using a faster and slower EMA is that this can be used to gauge momentum. When the faster (in this case 12-Day) EMA is above the slower 26-Day EMA, the stock is in an uptrend, and vice versa. If the 12-Day EMA is increasing much faster than the 26-Day EMA, the uptrend is becoming stronger and more pronounced. Conversely, when the 12-Day EMA starts slowing down, and the 26-Day begins to near it, the stock movement’s momentum is beginning to fade, indicating the end of the uptrend.

THE MACD LINE

The MACD charts use these 2 EMA by taking the difference between them and plotting a new line. Very often, this new line is depicted as a thick black line in the middle chart.

When the 12-Day and 26-Day EMA are at the same value, the MACD line is at zero. When the 12-Day EMA is higher than the 26-Day EMA, the MACD line will be in positive territory. The further the 12-Day EMA is from the 26-Day EMA, the further the MACD line is from its centerline or zero value.

THE 9-DAY EMA

This line on its own doesn’t tell much more than a moving average. It becomes more useful when we take into account its 9-Day EMA. This is the third value when we talk of 12-26-9 MACD charts. Note that the 9-Day EMA is an EMA of the MACD line, not of the stock price. This EMA (the thin blue line alongside the MACD line) acts like a normal EMA and smoothes the MACD line.

The 9-Day EMA acts as a signal line or trigger line for the MACD. When the MACD line crosses above the 9-Day EMA from below, it indicates that the downtrend is over and a new uptrend is forming. Time to consider bullish strategies. Conversely, when the MACD line drops below its 9-Day EMA, a new downtrend is forming and its time to implement bearish strategies.

THE MACD HISTOGRAM

So far, we have covered the most simple form of interpreting the MACD charts. We now look at the MACD histogram. Just as the MACD line is the difference between the 12-Day and 26-Day EMA, the MACD histogram is basically the difference between the MACD line and its 9-Day EMA.

So when the MACD line crosses above its 9-Day EMA, the MACD histogram will cross above zero. In order words, a bullish signal is obtained when the MACD histogram crosses above zero, and a bearish signal is obtained when it crosses below zero.

POSITIVE AND NEGATIVE DIVERGENCE

The MACD histogram forms valleys and peaks. Sometimes, multiple peaks are formed, with each subsequent peak becoming lower and lower. These progressively lower peaks constitue what is known as a negative divergence. A negative divergence on the MACD histogram is an indication that the current uptrend might reverse in the near future. This could happen even though the actual stock price seems to be making higher peaks in the chart. Basically, the MACD histogram negative divergence is a warning that the stock might turn down soon.

Similarly, the positive divergence on the MACD histogram predicts the subsequent uptrend. However, sometimes these divergences can create false alarms. If we follow these signals, we could have bought into a downtrend.

As such, I would like to remind you that individual indicators such as the Moving Average Convergence Divergence (MACD) charts should not be used on their own, but rather with one or two additional indicators of different types, in order to confirm any signals and prevent false alarms.

Steven is the webmaster of http://www.option-trading-guide.com If you would like to learn more about Option Trading or Technical Analysis, do visit for various strategies and resources to help your stock market investments.

By definition, value investing is the process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios. Of course, it is not nearly this simple. Value investing is the corner stone of long-term growth. Those who practice it survive the ups and downs of the market and are more likely to emerge wealthy than those who ride the market, in principle, due to the higher quality of the companies falling under the prerequisites of the value investor. Value investing is essentially concerned with getting the most profit at the lowest cost. The basis of value is profit. Value investing is an investment style which favors good stocks at great prices over great stocks at good prices. Value investor extraordinaire Warren Buffett has used this style to become a billionaire.

It’s important to keep in mind that value investing is not concerned with how much the price of a stock has risen or fallen necessarily, but rather what is the “intrinsic” or inherent value of the stock, and is it currently trading below that price, i.e. at a discount to it’s intrinsic value. The important point here is that when looking at stocks that are trading at or above their intrinsic value, the only hope for gaining value is based on future events, since the stock price already represents what the company is worth. However, when dealing with stocks that are undervalued, or available at a discount, unforeseen events are unimportant in that without any new earnings or additional profits, the shares are already “poised” to return to that inherent value which they have.

The question now, of course, is “why would stock prices not always reflect the true value of the company and the intrinsic value of its shares?” In short, value investors believe that share prices are frequently wrong as indicators of the underlying value of the company and its shares. The efficient market theory suggests that share prices always reflect all available information about a company, and value investors refute this with the idea that investment opportunities are created by disagreements between the actual stock prices, and the calculated intrinsic value of those stocks.

Finding Value Stocks

Value investing is based on the answers to two simple questions:

1. What is the actual value of this company?

2. Can its shares be purchased for less than the actual (intrinsic) value?

Clearly, the important point here is, “how is the intrinsic value accurately determined?” An important point is that companies may be undervalued and overvalued regardless of what the overall markets are doing. Every investor should be aware of and prepared for the inherent market volatility, and the simple fact that stock prices will fluctuate, sometimes quite significantly. Benjamin Graham has often said that if investors cannot be prepared to accept a 50% decline in value without becoming riddled with panic, then investing may not be for them…or rather, successful investing, as it often takes significant losses in a particular security before gains are made, due to the idea that value investors do not try to time the market, and are focused on the underlying fundamentals of the companies. Furthermore, the quality of the companies targeted by the value investors’ screening methods should be, over the long term, less volatile and susceptible to market “panic” than the average stock.

This is also a two way road of sorts. On one hand, there is no sense in worrying about depressions, upturns, and recoveries due to the underlying quality of the value investments. On the other hand, investments should only be made in companies which can flourish and do well in any market environment. Doing solid investment research and making equally solid investment decisions will take investors much further than trying to forecast the markets.

How Many Different Stocks?

In terms of diversification, there are many discrepancies over exactly how many different stocks a solid portfolio should be made up of. My personal view is that there should not be as many stock as normally make up a mutual fund. Many will disagree with this, but what it’s worth, I think that owning a portfolio of 100, 200, or even more companies not only serves to limit risk, but it really limits the possibility for reward as well. Also, as Warren Buffett has said many times, the more companies you own, the less you know about each one.

As I write this, there are 42 stocks in our recommended portfolio. This number may very well grow in the coming months, as it may decrease in number, but one thing to keep in mind is, out of the thousands of companies available for purchase, only a very small percentage meet the stringent requirements of the diligent value investor. This is both a blessing and a curse. Very often, there is simply nothing to buy, and this is fine. The trap to avoid falling into is to lower your requirements for a stock when there simply isn’t anything meeting the normal requirements. This is how many an investor has fallen into making poor investment decisions, putting money into companies not really adequate for their respective portfolio, and it will certainly have a long term effect on gains.

David Pakman has been writing about politics and investing for years now, and runs the websites www.heartheissues.com and http://pakman.thevividedge.com

The Royal Swedish Academy of Sciences has decided to award the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel 1997, to Professor Robert C. Merton, Harvard University, and to Professor Myron S. Scholes, Stanford University, jointly. The prize was awarded for a new method to determine the value of derivatives.

This sounds like a trifle achievement - but it is not. It touches upon the very heart of the science of Economics: the concept of Risk. Risk reflects the effect on the value of an asset where there is an option to change it (the value) in the future.

We could be talking about a physical assets or a non-tangible asset, such as a contract between two parties. An asset is also an investment, an insurance policy, a bank guarantee and any other form of contingent liability, corporate or not.

Scholes himself said that his formula is good for any situation involving a contract whose value depends on the (uncertain) future value of an asset.

The discipline of risk management is relatively old. As early as 200 years ago households and firms were able to defray their risk and to maintain a level of risk acceptable to them by redistributing risks towards other agents who were willing and able to assume them. In the financial markets this is done by using derivative securities options, futures and others. Futures and forwards hedge against future (potential - all risks are potentials) risks. These are contracts which promise a future delivery of a certain item at a certain price no later than a given date. Firms can thus sell their future production (agricultural produce, minerals) in advance at the futures market specific to their goods. The risk of future price movements is re-allocated, this way, from the producer or manufacturer to the buyer of the contract. Options are designed to hedge against one-sided risks; they represent the right, but not the obligation, to buy or sell something at a pre-determined price in the future. An importer that has to make a large payment in a foreign currency can suffer large losses due to a future depreciation of his domestic currency. He can avoid these losses by buying call options for the foreign currency on the market for foreign currency options (and, obviously, pay the correct price for them).

Fischer Black, Robert Merton and Myron Scholes developed a method of correctly pricing derivatives. Their work in the early 1970s proposed a solution to a crucial problem in financing theory: what is the best (=correctly or minimally priced) way of dealing with financial risk. It was this solution which brought about the rapid growth of markets for derivatives in the last two decades. Fischer Black died in August 1995, in his early fifties. Had he lived longer, he most definitely would have shared the Nobel Prize.

Black, Merton and Scholes can be applied to a number of economic contracts and decisions which can be construed as options. Any investment may provide opportunities (options) to expand into new markets in the future. Their methodology can be used to value things as diverse as investments, insurance policies and guarantees.

Valuing Financial Options

One of the earliest efforts to determine the value of stock options was made by Louis Bachelier in his Ph.D. thesis at the Sorbonne in 1900. His formula was based on unrealistic assumptions such as a zero interest rate and negative share prices.

Still, scholars like Case Sprenkle, James Boness and Paul Samuelson used his formula. They introduced several now universally accepted assumptions: that stock prices are normally distributed (which guarantees that share prices are positive), a non-zero (negative or positive) interest rate, the risk aversion of investors, the existence of a risk premium (on top of the risk-free interest rate). In 1964, Boness came up with a formula which was very similar to the Black-Scholes formula. Yet, it still incorporated compensation for the risk associated with a stock through an unknown interest rate.

Prior to 1973, people discounted (capitalized) the expected value of a stock option at expiration. They used arbitrary risk premiums in the discounting process. The risk premium represented the volatility of the underlying stock.

In other words, it represented the chances to find the price of the stock within a given range of prices on expiration. It did not represent the investors’ risk aversion, something which is impossible to observe in reality.

The Black and Scholes Formula

The revolution brought about by Merton, Black and Scholes was recognizing that it is not necessary to use any risk premium when valuing an option because it is already included in the price of the stock. In 1973 Fischer Black and Myron S. Scholes published the famous option pricing Black and Scholes formula. Merton extended it in 1973.

The idea was simple: a formula for option valuation should determine exactly how the value of the option depends on the current share price (professionally called the “delta” of the option). A delta of 1 means that a $1 increase or decrease in the price of the share is translated to a $1 identical movement in the price of the option.

An investor that holds the share and wants to protect himself against the changes in its price can eliminate the risk by selling (writing) options as the number of shares he owns. If the share price increases, the investor will make a profit on the shares which will be identical to the losses on the options. The seller of an option incurs losses when the share price goes up, because he has to pay money to the people who bought it or give to them the shares at a price that is lower than the market price - the strike price of the option. The reverse is true for decreases in the share price. Yet, the money received by the investor from the buyers of the options that he sold is invested. Altogether, the investor should receive a yield equivalent to the yield on risk free investments (for instance, treasury bills).

Changes in the share price and drawing nearer to the maturity (expiration) date of the option changes the delta of the option. The investor has to change the portfolio of his investments (shares, sold options and the money received from the option buyers) to account for this changing delta.

This is the first unrealistic assumption of Black, Merton and Scholes: that the investor can trade continuously without any transaction costs (though others amended the formula later).

According to their formula, the value of a call option is given by the difference between the expected share price and the expected cost if the option is exercised. The value of the option is higher, the higher the current share price, the higher the volatility of the share price (as measured by its standard deviation), the higher the risk-free interest rate, the longer the time to maturity, the lower the strike price, and the higher the probability that the option will be exercised.

All the parameters in the equation are observable except the volatility , which has to be estimated from market data. If the price of the call option is known, the formula can be used to solve for the market’s estimate of the share volatility.

Merton contributed to this revolutionary thinking by saying that to evaluate stock options, the market does not need to be in equilibrium. It is sufficient that no arbitrage opportunities will arise (namely, that the market will price the share and the option correctly). So, Merton was not afraid to include a fluctuating (stochastic) interest rate in HIS treatment of the Black and Scholes formula.

His much more flexible approach also fitted more complex types of options (known as synthetic options - created by buying or selling two unrelated securities).

Theory and Practice

The Nobel laureates succeeded to solve a problem more than 70 years old.

But their contribution had both theoretical and practical importance. It assisted in solving many economic problems, to price derivatives and to valuation in other areas. Their method has been used to determine the value of currency options, interest rate options, options on futures, and so on.

Today, we no longer use the original formula. The interest rate in modern theories is stochastic, the volatility of the share price varies stochastically over time, prices develop in jumps, transaction costs are taken into account and prices can be controlled (e.g. currencies are restricted to move inside bands in many countries).

Specific Applications of the Formula: Corporate Liabilities

A share can be thought of as an option on the firm. If the value of the firm is lower than the value of its maturing debt, the shareholders have the right, but not the obligation, to repay the loans. We can, therefore, use the Black and Scholes to value shares, even when are not traded. Shares are liabilities of the firm and all other liabilities can be treated the same way.

In financial contract theory the methodology has been used to design optimal financial contracts, taking into account various aspects of bankruptcy law.

Investment evaluation Flexibility is a key factor in a successful choice between investments. Let us take a surprising example: equipment differs in its flexibility - some equipment can be deactivated and reactivated at will (as the market price of the product fluctuates), uses different sources of energy with varying relative prices (example: the relative prices of oil versus electricity), etc. This kind of equipment is really an option: to operate or to shut down, to use oil or electricity).

The Black and Scholes formula could help make the right decision.

Guarantees and Insurance Contracts

Insurance policies and financial (and non financial) guarantees can be evaluated using option-pricing theory. Insurance against the non-payment of a debt security is equivalent to a put option on the debt security with a strike price that is equal to the nominal value of the security. A real put option would provide its holder with the right to sell the debt security if its value declines below the strike price.

Put differently, the put option owner has the possibility to limit his losses.

Option contracts are, indeed, a kind of insurance contracts and the two markets are competing.

Complete Markets

Merton (1977) extend the dynamic theory of financial markets. In the 1950s, Kenneth Arrow and Gerard Debreu (both Nobel Prize winners) demonstrated that individuals, households and firms can abolish their risk: if there exist as many independent securities as there are future states of the world (a quite large number). Merton proved that far fewer financial instruments are sufficient to eliminate risk, even when the number of future states is very large.

Practical Importance

Option contracts began to be traded on the Chicago Board Options Exchange (CBOE) in April 1973, one month before the formula was published.

It was only in 1975 that traders had begun applying it - using programmed calculators. Thousands of traders and investors use the formula daily in markets throughout the world. In many countries, it is mandatory by law to use the formula to price stock warrants and options. In Israel, the formula must be included and explained in every public offering prospectus.

Today, we cannot conceive of the financial world without the formula.

Investment portfolio managers use put options to hedge against a decline in share prices. Companies use derivative instruments to fight currency, interest rates and other financial risks. Banks and other financial institutions use it to price (even to characterize) new products, offer customized financial solutions and instruments to their clients and to minimize their own risks.

Some Other Scientific Contributions

The work of Merton and Scholes was not confined to inventing the formula.

Merton analysed individual consumption and investment decisions in continuous time. He generalized an important asset pricing model called the CAPM and gave it a dynamic form. He applied option pricing formulas in different fields.

He is most known for deriving a formula which allows stock price movements to be discontinuous.

Scholes studied the effect of dividends on share prices and estimated the risks associated with the share which are not specific to it. He is a great guru of the efficient marketplace (”The Invisible Hand of the Market”).

Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Until recently, he served as the Economic Advisor to the Government of Macedonia.

Visit Sam’s Web site at samvak.tripod.com

Iraq’s massive oil and gas reserves:

Iraq has the largest gas and the second largest oil reserve in the world! That’s like having pure gold in your soil. The oil alone is good for $10 trillion. Do you think it will do the Iraqi dinar any good?

$70 billion economy potential:

With their oil and gas reserves, foreign investors, aid, highly educated population, regional agreements and Iraq’s great access to fresh water for agriculture it has the potential to become one of the richest countries in the world.

Independent Central Bank of Iraq:

The Central Bank of Iraq isn’t affected by any political party in any way because it is an independent agency. They also offered their first treasury bonds and most of the private commercial banks in Iraq participated.

Booming real estate market:

Because money starts to flow and everybody in Iraq is now entitled to buy (instead of only Saddam’s inner circle) houses wherever they want this market will be enormous in the coming years.

Great security features of the new Iraqi Dinar:

When there is confidence in this currency, stability and growth will follow. The security measures of the Iraqi dinar are very good. Writing that is only visible in ultra violet, color changing symbol, metallic ink, watermarks and more!

New stock market of Iraq:

Opened recently and of course very important for developing a country. More foreign investors will be attracted to Iraq this way.

Since introduction up by 25%:

The new Iraqi dinar has risen from 3500-4000 to 5000-5500 for a dollar from 2003 till now. A successfull Iraq will bring it up more and also to an international recognized currency

Marcel Heersema is full-time online investor who is always looking for the best money making opportunities on the net. For more information go to www.iraqi-dinar-opportunity.com This article may be reprinted only if the resource box is left intact.

Anatolia asserted that increasingly than 6,300 and opposite take labourers had been militarise along with 2,200 buses to pass with another feared disaster. “We want to persuade planetary customers to Istanbul that the vast majority of the city ? those most visit by foreign visitors ? The death levy from flash supply which sweptback upon Istanbul and its environs this week go away up to 33 on Saturday with the discovery of another body, Channel reports utter. allow the “Old Istanbul” severalise as Sultanahmet, where the Blue Mosque, Hagia Sophia and the Hippodrome are determined, and Taksim, the city?s vibrating economy touch on ? Three populate were lacerate by vary close in when a hurricane weep cover off an workplace amend and a inn and mortify windows in the austral apply of Alanya, Anatolia reported. are safe and relatively superior by the provide contract in Istanbul,” speculated Hasan Zongur, director of the Turkish Culture and Tourist Office in New York City.

Governor Zubeyir Kemelek asseverated that five employees thought avoid from Kumbag, in Tekirdag state to the westerly, aft water render their Istanbul apartment sales brickworks had been found safe and dependable. “Though there is definitely several spread over in these counties, they are another affect than cause for .” Istanbul Ataturk International Airport as well as sales for apartments for sale in Istanbul remains open in spite of reported crumble-recite hold off and cancellations, though the last mentioned were few. Five another inhabit were reported failing in the city, Anatolia updates agency conveyed as rain verbalise to yield again in the region.Divers get the body of a 65-annual period-old man from a river bed, sub a cross, in the suburbs of the Turkish urban sprawl, Anatolia reported. The Turkish is calm down transnational users that Istanbul?s major vacationism and trade govern ? Those travel to the aeroport from Istanbul?s city come to are advised to hinder the rank of their flights before deviate for the aeroport and allow significant extra set to get to the aeroport, as the domain ill hit by the supply lies between the city?s refer and the aeroport. The reported furnish has become in increasingly far provinces of Istanbul. Several different towns were contend fill up on Saturday, and a cut across was wipe away in Tekirdag. are some safe. New heavy rains hit north Turkey overnight Friday, and navy units and helicopters were sent in to help populate alter, Anatolia said.

Until now, you could never use a one-stop shop for buying and selling loan portfolios. They can now be bought and sold using a manner popularised by the growth of e-commerce — the Web-based bidding process in the style of Ebay. On this marketplace, consumer and subprime loans are offered for bidding in packages at a discount, open to investors. The sale of packages by this method standardizes the data and opens up the marketplace for smaller packages. Get better access to banks and investors through careful use of the reaching power characteristic of any Web business — make sure you’ve publicized your loans to debt buyers. Sizeable economies can be made via a conversion to the modern business model to which time and space are less important, granting companies a broader scope for their actions.

When selling these packages, an investor or business must aim to be able to make contact with the highest number of customers possible. This marketplace accordingly offers all pertinent information available to any registrant at any time they ask — making the sale of loan packages less problematic and more streamlined. Like a great many firms, what information you have at your disposal affects your level of success. This area of opportunity carries more exposure than others and the wisest way to avoid these, too, is reliable information. So how much can you realistically save by guaranteeing optimal transparency?

Using the standardization and transparency this system offers you will become capable of handling your portfolios entirely by yourself without recourse to a third party broker. Both sides are likely to benefit significantly from transparent exchanges of relevant data, and this makes open discussion dependable, accordingly helping to balance risk with profit.

The preventation of fragmentation in packages means investment decisions stay simple in terms of securing what you want. Time is not wasted in this manner — not simply for the investor but also for the dealer. Along with this information access, the open bidding scheme produces opportunities for everyone involved to depart with the optimal deals available to them. Enhance the potential of your company vastly by taking full advantage of the advances in online commerce. Selling online portfolios broadens your range dramatically, standardizes information and helps you find the perfect portfolio to increase profit.

If you are under 50 years of age and have
not lost money in the stock market I don’t think
you will find this article interesting. Why?
Because you still think you can make a killing
in the market. Until you have lost a lot more
this method of investment will not interest
you.

Dad and Mom can try to get the kids to pay
attention, but it is doubtful that they will.
Each will have to learn on his own, but maybe a
few will see the wisdom of slow but sure.

Every professional trader I know (I was an
exchange member and floor trader for 17 years)
will tell that you must have a plan for both
buying and selling. Any plan must minimize risk
for the professional and for the
nonprofessional it must be so simple that even
a retired widow with no market knowledge can
execute.

Wall Street prefers to keep investors
confused with financial terms so they will have
to go to a broker or financial planner for “advice”.
Advice from a broker is a eulogy for your
money. They have been taught by the big
brokerage companies and they have been taught
wrong. They do not make you rich; they get rich
off of you.

Now let’s go through the steps to make money
and protect your investments. This very simple
method is as foolproof as any I have ever seen.
It is one you can do by yourself with no help
from any broker. In fact, most of them will not
want you to do this as there is no commission
and very little trading.

Turn on your computer; make the connection
to the Internet. In the address box type in
www.bigcharts.com . In the white box type in
JAVLX. That is the symbol for a mutual fund.
Click on the red box. On the left is a blue
column. Under Time frame select the down arrow
and click on “1 decade”. Scroll down. Click on
“indicators”. Scroll down a little more. Click
the down arrow for Moving Averages. Select SMA.
In the box to the right type in 200. Go back to
the top and click on Draw Chart.

Note when the 200-day line turned down
(November 2000) it was a sell signal and time
to put your cash in a money market account.
Wait. Collect interest. When the line turned up
(April 2003) it gave a buy signal. Buy your
no-load fund back. (Only buy no-load, no
commission funds.) This buy/sell 200-day line
will work for almost ANY mutual fund. Follow
the little red line to wealth.

Go back. Check this out for any mutual fund
or index fund you might have owned in 2000. Being
in cash from 2000 to 2003 would have saved your
retirement account; a money market account had
a greater return than being “invested”.

Never lose money in the stock market again.

Al Thomas’ best selling book, “If It Doesn’t
Go Up, Don’t Buy It!” has helped thousands
of people make money and keep their profits
with his simple 2-step method. Read the first
chapter and receive his market letter for 3
months at no charge at http://www.mutualfundmagic.com.
Discover why he’s the man that Wall Street does
not want you to know. Copyright 2006
All rights reserved.

Okay, You’ve entered what you think is a low risk trade, having deduced that this was the perfect time to go long. Your indicators all line up, and CNN reports good 1st quarter results in the sector your trading. Now, you watch in utter dismay as it turns against you, hitting your mental stop, and you impulsively decide to ride it out, hoping (a traders worst enemy) it will reverse and make it to at least break even. Inexorably, it continues to head down, and you finally get out, looking at another gut wrenching loss.

You’ve just become a victim to the most common pitfall that befalls the majority of traders. Listen, most people, when they get involved with trading, imagine some barefoot maverick making million dollar trades from his dockside home on a laptop from a lawn chair, with a view of his yacht named “Shorted Gold”. And most traders subconsciously behave like that’s the way to do it. In reality, most million dollar trades are initiated by some MIT graduate math nerd, who talks to himself in a nondescript back room of a brokerage house, but no one can hear him over the racket the computers make as they crank out Black-Scholes estimations with Brownian probability curves tweaked for each market sector…You get the drift.

You can’t succeed against this kind of competition by letting your emotions get in the way. Most traders don’t get it. They flail around buying software programs, trading systems, stock market advisory newsletters and, you know, the thousands of come on’s sold on the internet and on the back of trading magazines.
Let me tell you a secret none (I would capitalize this but they won’t let me do it on this site, so I’ll say it again, none) of these sellers, Wall Streeters, or any broker will admit to.
Are you ready? Come closer so you’ll hear this.

It’s not the Trading system that matters.

Hoof, you say. I know it flies in the face of all the articles and advice you’ve read, but the most important piece of advice you’ll ever get, and don’t forget it’s from me, is to watch yourself, as you do what your doing. Watch yourself as you trade, watch your emotions, and have the discipline to override any impulse to do anything other than your pre arranged plan.Do me a favor, before you do your next trade, do this one thing and I guarantee you will be grateful. Get yourself a couple small 4×6 or so cosmetic mirrors from the drugstore or from around the house. Set them up in front up your computer in such a way as to see yourself as your watching your monitor, a side view. Now stay with me here, it sounds crazy…. before you click the next buy or sell, look at the mirror and ask these questions in the third person,

“Why is he buying (or selling) now?
Answer out loud so you can hear it.

“On what factual basis is he basing his decision on?”
Again, out loud.

“Is he letting fear or hope alter his view on this trade?
You have to answer this one out loud and truthfully.

“If it goes against him, at what point will he exit, and if it goes well, what is the profit exit? Ditto

You see the beauty in this? It helps you separate yourself from your emotions, so that you’ll never be hoping a trade will go well, or be in a trade because you just had a loser and you’re trying to get even before the market closes.

Okay, I lied a little. Some systems are somewhat better than others, but if you only do this one thing, watch your emotions as you trade, you will do ok. Without that no expensive software or newsletter is ever going to make any difference. What makes the difference is you and your ability to control your emotions. You must first deal with the most difficult thing we all have to deal with, which alas, is what makes us all human after all..

Before you lose another dime to Wall Street sharks and brokerage houses, check out Paul Nickel’s low risk trading strategies at http://lowrisktrading.info/ and learn about the best tool to becoming a shark yourself.

Spending a whole day watching stock indices, you get the same feeling as riding a roller coaster. It is always breathtaking whether you are going up or down.

On the way up you begin to feel uncertainty creeping in. ‘This can’t go on forever’, you think. Mr. Central Banker in the front car is already saying he’s worried, and the analyst beside you agrees. Just before the peak, you begin to feel the momentum subside. Somewhere behind you hear a worrying rattle, and for a moment everything stops. Your analyst is silent and looks pale.

One the way down your head can’t stand the drop, and the wheels seem to be coming off the car. Catastrophe seems imminent - the scale of which has never been seen before. Your stomach is turning. A prophet is sitting behind you screaming how capitalism and the market economy have come to the end of their road.

You open the local business paper, which tells of the roller coaster ride under the heading “Index may hit 11 000 - what then?” The index’s crazy black line runs across the paper from the start of the year to the current month. The future is uncertain. A number of experts predict the next turn, while a professor gives his own opinion. Beneath, a number of pedestrians are quoted on how a closing of 11 000 will affect their lives.

Luckily, the ride on the roller coaster is not mandatory. Those who don’t need the added tension in their lives can skip a turn or two. You invest only in quality companies at appropriate intervals. You keep your investment horizons open and enjoy the view from the average height of the ride. In a few years you have probably seen enough rises and falls. They no longer disturb your sleep. Prices change, but they always seem to develop positively over the years - and good companies even pay dividends.

To the prophets and analysts you wish success, as you yourself are not riding the roller coaster. If you want to cash in, you can always sell those shares you bought long ago for next to nothing. Are you getting the most out of the stock market? Maybe not, but at least you are sleeping better and living in peace.

Jouni Koistinen is the editor and publisher of Investori.com online magazine in Finland. He has written about investing since 1998.