Can you afford to invest in the Forex?
Wednesday, 23 July 2008
An important issue for all investors is: Can I afford to invest?
America has always been a land of promise. Whatever the course of our economy in the years immediately ahead, it is likely that investment opportunities will be both numerous and attractive. Energetic new companies will emerge, seeking venture capital. Solid old companies come forth with new products. An industry or another, will enjoy a boom period compared to the rest. And, of course, there will be victims, too. There are inevitable.
For the investor carefully this activity, properly evaluated and well programmed, will bring rewards. There will be opportunities to buy stocks before they drew attention to themselves and started to increase, or buy a Blue Chip, temporarily out of favor, at a price depressed. There will be stock splits, dividend increases, new issues, mergers, spin-offs, and the tide rise and fall of stock prices all of this characteristic of the turbulent life of the market as a reflection of U.S. companies.
If you've never invested before, you must be tempted.
Whether or not you return will depend on your response to the first difficult question on investment: Can you afford it?
It is a question of loneliness and only you can answer, because it implies not only how much money you feel able to invest, but what kind of person you are. In fact, it is wrapped several questions in one. You ask, first, if your financial situation allows you to invest, on the other hand, if you can bear the risk implicit in stock investment and, thirdly, if the market is a safe place for you.
Let's take them one at a time.
Your financial situation: One point should be clear from the outset: you do not need to be rich to invest. Among the foreigners, you can hear that stock ownership is a rich man in the game This can mean one or several things: that the market is too complicated for the little man, that brokers are not interested in small orders , The only person who can lose a package without feeling should invest. However, these arguments persuasive, they are all false.
The fact is-according to a recent New York Stock Exchange survey that nearly half of all shareholders are $ 5000 - $ 10000 per year income bracket. The median income of 3860000 people who have become shareholders since 1956 is $ 6900.
This seems to suggest that the understanding of market operations is not too difficult to acquire, and that an attentive, interested broker is not too difficult to find. It can also be assumed that they are shareholders with a fair appreciation of the dollar and unable to laugh losses.
The objectives of a small investor can hope to achieve and model of the possible investment in the confines of a modest income will be exposed further. The conclusion reached here is that investment is not a question of enlargement a chance you already possess, but to make a little money, however small it may be the amount, to begin.
Regardless of your salary or income level, investment is possible only if three conditions are met:
1. If you are assured of a steady income.
2. If you meet your current expenses and obligations.
3. If you have a cash reserve to meet unforeseen emergencies.
These conditions are, firstly, the guarantees made necessary by the inescapable fact that stock prices fluctuate. Your judgement of when to buy, sell when and how long to hold should never be dictated by circumstances. Investments should be undertaken only with funds you can honestly and legitimately provide that extra. With a steady income and your monthly bill paid, you know where you
stand and what can be put aside in reserve, any investment opportunity that arises. Or, of course, in case of emergency. A sudden demand for ready cash to pay a hospital bill, an insurance premium, or your income tax should come, if possible, from your reserve, not cashing in your investments. Whether your stocks are up or down, you may take a loss on the decline because you May the sale unless you paid, on the resumption because you May the sale unless the potential.
A reserve also allows you to choose. The fact that you have a few hundred dollars located slowed does not automatically mean it is time to buy stocks. There is no hurry. As professionals say, "The market is still there." If the market trend is not to your liking, or the price of a stock is higher than you're willing to pay a reservation allows the luxury of waiting for a more favourable situation.
Finally, a reservation permit investment over a period of time rather than all at once. As you learn more about the market, you will hear both sides of this argument. Some experts believe you should back up what appears to be a good situation with all investment funds to your order. Others warn against greed, and partial investment adviser here and there, at different times, to spread the risk. This is not the place to debate the merits of these techniques. It is to give you the flexibility to go both ways dictates your judgement.
Remember that your income need not be large, so long as it is in order and allows you to set aside a surplus after taking care of your bills and the possibility of unrest. The surplus need not be large, whatsoever. The savings, as has been said many times, is a question of fairness. No one considers $ 5 a too small amount to a savings bank, do not worry if that's all you can save each week for your investment accumulation of reserves. In most markets, brokers can usually offer a number of sound, solid stocks, offering liberal yields, which sell for less than $ 20 per share.
There are no rules as to the number of shares an investor must buy. If you can afford an action (and commissions), a broker to get you. In fact, through the monthly investment plan you can purchase a fractional share, though the plan requires a minimum investment every month.
To invest in the Forex, you'll probably need a float of about $ 400 and invest $ 1 to $ 10 per seeds to start with, then reinvest profits.
There is therefore a much weaker effort to invest in the Forex, but it is more speculative.
Good Forex software will help reduce the risks involved.
Labels: forex
posted by Master @ 02:32,