If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account.
There are two kinds of formal retirement plans that are set in place by employers. The least complicated is the Defined Contribution where you are allowed to make your own contribution and your employer may also make matching contributions of a percentage of what you put in. At retirement you get out what you put in plus all accruals. The more you contribute the more you have for retirement. A professional money manager who tries to get the most return for the amount in the pool manages the money. He is paid an amount usually a percentage of the assets in the pool, not on performance.
Sometimes a large mutual fund such as Fidelity or Janus is the manager and you are allowed to choose from 6 or 8 different mutual funds in which to place your cash. They do not encourage you to switch from fund to fund even if a fund you are in is under performing.
The Defined Benefit pension plan is much better for the employee. It states the amount you will receive monthly upon retirement. Your contribution amount is fixed and the company makes up the difference to be sure that there is enough money in your account so you will be paid the amount specified. The pension manager must use an actuarial table to figure how much money is necessary to be placed in the pool each year.
Recently it has been found that many companies have been using unreal rate-of-return figures for projection of profits. What the company is allowed to do under current law is to add any overage of calculation to their bottom line. Now it seems that those numbers have been far off so instead of your company showing a big profit last year they will be showing a loss. Suppose your manager had figured the plan would grow at 10% and now it has only grown at 5%. This could have disasterous affect on your company's bottom line and certainly on your company's stock prices.
You might want to ask your company Controller or Treasurer for a report on how your pension plan is doing including what assumption they are making for return on investment.
In a long-term bull market mutual funds do well, but in a long-term bear market mutual funds will lose money. No one talks about this, especially the mutual funds, but it is an obvious fact when you step back to look at the overall market performance for the past 75 years.
During a bear market there are only two types of accounts you can have within a 401K or other retirement account to protect yourself from loss ? either a money market account or a fixed income bond mutual fund. Better check it out.
Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.
What To Buy Now
I am sure that if you have a brokerage account with a "full service" broker you have been getting calls about what to buy and sell. If you have big losses in certain stocks you might be hit with that great Wall Street lie to buy more so you can 'Dollar Cost Average'. It doesn't work.
Who are the successful investors?
The Secret Method to Selecting a Winning Trading System
Every successful trader has a winning system. There are of course, as many systems out there, as there are traders. Some systems get you to buy on strength and sell on weakness others do the opposite.
Shorting Stocks ? The Basics, Part I of II
What does it mean to short a stock?
Even if you don't own any of their stock or any stock at all you will want to read this.
Stock Market Volatility
In my opinion, due to the volatility of stock market prices (the rise and fall of stock prices), an investment plan should incorporate both the traits of stick-to-itiveness and common sense, and must have an advantageous, predetermined approach for maximizing each investment in the stock market.
In 1960 an engineer working for a watch company in Switzerland discovered that a small crystal would vibrate at a constant rate. He found this was so accurate that it could be used to calibrate time so he took it to company management and said it would make an entirely new kind of watch that had no springs and no gears. They could not imagine who would want such a thing. Swiss watches dominated world commerce. "Why change?", they said. The bosses did not even bother to patent it.
Mutual Fund Ball and Chain
The broker told me not to sell because the mutual fund I owned had a 2% redemption fee and they would penalize me if I did.
Play another Day
Money management starts with protecting your capital, realizing profits and cutting losses. As I have stated in the past, without cash, you can't invest. Cash is king and learning to manage your money is the most important aspect to investing in stocks. The game is won by lowering your risk by properly turning the numbers in your favor. Cutting losses is the best insurance to keeping your cash.
So, What is This Stock Market Thing Anyway?
We've all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. But how does it really work and what is meant by "playing the stock market?"
Money, Insanity and Wall Street
Money: the most charged word in the planet. It means something to everyone. For some, money means a blessing, for others it means a disaster.
Hold Em and Fold Em
When most analysts, financial planners, fund specialists and investors try to decide whether to buy a particular stock they immediately go to the financial statements to determine the growth potential of the company. Numbers and more numbers. Then management analysis and industry speculation. Unless you are an experienced financial analyst (and there are not very many good ones) the numbers in the reported statements can be very misleading - just as the company Controller wants them to be.
Is Active Trading The Answer?
One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. While there are several strategies to invest, is active trading one of the ways to become a millionaire?
Understanding a Stocks PEG Ratio
A PEG ratio cannot be used alone but is a very powerful tool when integrated with the basics (price, volume and chart reading). You must enjoy crunching numbers and have a calculator handy to estimate your own PEG ratio. Access to quality statistical information from the web such as past earnings and future earning estimates is essential to calculate this fundamental indicator. A variety of websites produce a PEG ratio but I have not found one site that has a reliable PEG ratio that I can use for my own research, so I calculate it myself, ensuring accuracy with the final number.
The 401(K): How The Insider Has Stolen Your Retirement!
Mutual funds were moderately successful in creating a presence in the stock market until the advent of the investment retirement account and in particular the 401(k). Corporate insiders persuaded the federal government to allow for the 401(k) in lieu of offering employees the traditional pension. When this happened the employees lost the protection of a specialized financial manager who could manage both the return and the risk of the retirement money of the worker.
Today we are inundated with tons of information about the economy, stocks, government agencies and foreign governments. They show us charts and graphs of the increase/decrease in oil production over the last 5 years, the amount of maple syrup produced in Vermont for the past century, the time it takes to bounce a signal off the moon and all kinds of other nonsense that we can live without. The talking heads on the investment programs, both radio and TV, tell us how this is going to affect the price of certain stocks and the market in general. Well, maybe.
My Neighbor Got A New Car
I don't know what kind it is, but I saw iton TV running full speed along the shore (I don'tlive near the shore) throwing up spray or maybeit was that one climbing up the steep mountaintrail thru the mud, rocks and snow. Veryexciting. (I don't live near the mountainseither.) WOW! Just what I need.
Invest In The Stock Market For The RIGHT Reason, Using The RIGHT Choices
Invest in the stock market for the RIGHT reason, using the RIGHTchoices!
Option Spread Trading
Spread trading is a technique that can be used to profit in bullish, neutral or bearish conditions. It basically functions to limit risk at the cost of limiting profit as well.
Dont Buy Stocks based on P/E Ratio alone
I use the P/E ratio as a secondary indicator for buying and selling stocks but I don't use the ratio in the same a manner as many value investors teach. I will explain the difference in my methodology for using the P/E ratio to your advantage.
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