Systematic Trading Strategies

The term, systematic trading refers to a unique trading approach.

Essentially, it is a mechanical kind of trading sans emotions.

Perhaps that is the reason why it is also known as mechanical trading.

It is a form of trading that has pre-determined risk controls and also well-defined trading goals.

So with the objectives and risks well charted out, trading becomes automated to a certain extent too.

In this case, the rules of investment progress as per pre-determined norms.

Moreover, investments and trading decisions also follow a pre-decided method.

As a result, trading, in this case, is neither dynamic nor does it require constant monitoring.

In many ways, you can call it a zero hassle trading, but at the same time, it is blindly following a trading system.

Systematic TradingSystematic trading strategies are devised for a wide number of asset classes like stocks, forex and the like.

The trading systems that they are made to follow are often coded as computer language and proceed as per computer algorithms.

So, then the trading can easily happen at the broker’s trading platform.

This is quite different from the discretionary trading where the trader can keep a dynamic approach.

Depending on the specific trend in the market, discretionary traders can also look at altering their trades.

They can make changes daily, hourly and whenever required.

But systematic trading strategies remain unmoved by all these movements.

Their job is simple; they have to only follow the system.

The trading systems can be manual as well as automated ones using computers.

Essentially these trading systems are based on technical data, but in some cases, they are also backed by fundamental ones.

Strategies like high-frequency trading, quantitative trading are variations of systematic trading.

Systematic trend following is another variation of this same strategy.

The Approach in Systematic Trading Strategies

Discretionary trading is a way more dynamic trading module.

It helps you make alterations in your trading positions as per the market movements.

But the only problem with this approach is that you have your emotions involved.

So whether it is fear or greed, it is surely going to make a difference to your whole project.

It may either lead to a lot of gains or huge losses, depending on the market.

Perhaps that is the reason that systematic trading strategies are a better option.

It benefits you in two distinct ways.

There are no huge spikes and gaps in the overall return ratio.

At the same time, the degree of uncertainty is lesser in this type of trading.

The risk controls too are much better enforceable in case of the systematic strategies.

You have a system of fairly automated trades that operate at relatively high and even low frequencies.

They use a gamut of mathematical formulas and algorithms to work out the systems.

These models of trades are generally proprietary in nature and involve some strong risk controls too.

The premise for most is cutting down the relative risk involved while maintaining the reward element.

But as the entire program is created on the basis of rules, most of the action too is pre-decided.

But before you go ahead with this strategy, you always have the option to work out the alternatives.

You can undertake a certain amount of research based on rules with your older investments.

The consistency of the results is what matters the most.

That in many ways forms the basis of the core strategy and how your portfolio progresses.

So back testing a strategy is crucial before you put in real money.

This works even for these systematic trading strategies.

Strategies Using Price Pattern

So, the price pattern gets a clear prominence in this case.

The price pattern can convey just about any trend.

It can be as simple as the closing high or the intra-day highs.

It is also capable of indicating complex elements like reversal patterns or continuations.

The price pattern in trading is often the first acknowledgment of any potential pattern.

It identifies the why, how and when of price movements.

Often the price pattern becomes the instrument of change in sentiment.

For example, if there is a head and shoulder price pattern, it signals two smaller patterns around a big one.

Double tops refer to short-term swings and failed attempt to breach earlier highs.

Double bottoms too refer to a short-term swing but towards the lower levels.

As a result, here the second swing often refers to a failed attempt to break below earlier lows.

So, in many ways, they become the primary indicator of not just a specific trend but overall sentiment too.

In many ways that is where systematic trading strategies can trace their beginning and also the continuation.

It is the creation of a constructive trend identification system.

 The Moving Averages Crossover Strategy

When you look for the top systematic trading strategies, the moving averages crossover is one of the most popular ones.

You already know how to determine the trend by plotting the key moving averages.

You can already determine when a trend is likely to continue or end.

Now supposing you add a few more moving averages and wait for the crossover.

That is the moot point of your strategy.

When the moving averages cross over one another, it signals a potential change in trend.

So this may be your opportunity for a better or more profitable entry point.

Normally a crossover happens when a moving average for a shorter period moves above or below a moving average for a longer period.

Of it crosses above, it is considered a bullish trend.

However crossing below is normally a bearish trend.

There is a slightly more conservative take on it too.

In this case, you don’t take extremely fast moving averages into consideration.

Instead, you go for middle-level ones like 20-day average and wait for crossovers if any with even slower ones like 50-day averages.

Primarily this trading system is based on analyzing the time period of the two moving averages that are crossing over.

This system also includes the moving average convergence divergence indicator.

Even the triple moving average crossovers are part of this same systematic trading system

In many ways, it takes into consideration the difference between two primary moving averages.

That is how you can get a clearer idea of the points where the trend is set to close.

As a result, it keeps the basic tenets of systematic trading in place and returns too.

Be it in terms of the mechanical nature of undertaking the trade or exercising control on risk.

Identifying Support & Resistance

Forget about systematic trading, any type of technical trading is primarily based on the fundamentals of support and resistance.

They form the backbone of all types of technical analysis.

This is because they are a representation of the floor or ceiling for any type of stock or forex price.

The support refers to the lower end of the price band while the resistance is the higher end.

The concept of trade here is based on the fact that any stock price will have difficulty in crossing either of the price bands.

It may be breaching above a specific level or falling below a particular floor price.

As a result, trade is normally limited between a certain range.

But when the stock does break above a resistance level, it becomes the floor or the point of support.

Similarly, if the slump in so deep that the stock slips below the support zone, it creates the new resistance for the stock.

There can be a variety of factors that determine the support and resistance zone.

The primary trigger, in this case, can be anything from economic factors to stock-specific issues.

Essentially these support and resistance zones become the foundation for identifying the trend.

They help create a trading system.

As a result, they are the most important aspects of systematic trading strategies.

They help in finalizing the broad trend and how the technicalities linked with it operate.

Another interesting aspect of this trading strategy is the ease of creating an automated trading system.

Once the resistance and support prices are established, you do not need anything else to create a trading system.

Profit booking and stop loss levels can be set up as per these.

As a result, trading then goes on the auto-pilot mode.

Channel/Volatility Breakout

Whether you are looking at channel breakout or volatility breakout, they are both based on the concept of looking for a specific trend.

As the term, systematic trading strategies indicate, it is all about creating an order or looking for a system.

The market is uncertain for sure, but prices, in general, follow a specific trend.

The volatility breakout and the channel breakout are all price dependent.

So the pricing becomes the primary basis for creating a trend.

In the case of channel breakouts, a price channel is identified.

This basically takes into consideration the highest high and the lowest low.

You get a trade signal if the market breaks below lowest low or above highest high.

Now just the highest high and the lowest low may stretch over an indefinite period.

But that cannot put a system in place.

That is why these price channels consider specific time periods.

Normally this channel is calculated over a 20-day period.

The systematic trading system takes these channel breakouts as their trend identifiers.

This is how a holistic trend comes into being and becomes an essential part of a system.

Volatility breakout is similar to channel breakout in some aspects.

But in this case, the trend is based on the volatility breakout.

Therefore, the average true range of an entity helps determine the volatility.

Normally this ATR is an average of the range seen in multiple price bars.

It is then added or subtracted from the current bar price.

That is what gives the exact volatility breakout.

The advantage in both these cases is that the price range under consideration is changeable.

The time period depends on the duration that the trading system determines.

So, this again works on identifying the pattern.

Strategies Using Volume

So far we concentrated on price pattern and systematic trading systems created by identifying pricing trends.

But the prices are not just the single source of identifying long-standing patterns or systems in the market.

There is another factor that works in tandem with the overall pricing.

Yes, I am referring to the overall volume movement in the market.

The volumes too form a crucial part of the market moving fundamentals and triggers for price movement.

Volume essentially refers to the total quantity of a stock or currency that is traded at a specific time.

That is why you have intra-day volumes, closing volumes, total turnover, 10-day volume and the like.

Just like pricing, here the volume becomes the indicator of sentiment around the particular entity.

Often the volume becomes the instrument to validate a certain phenomenon in the market.

It becomes the standard option to identify value pockets and general sentiment.

This is exactly why you will see blue-chips and popular midcap winners showcasing strong volume performance.

The volume is often the market’s way of authenticating a trading call.

Therefore, when you are talking of reliable systematic trading strategies, the volume becomes a crucial factor.

It underlines the value elements all around.

Fundamentals of Forecasting

Now so far when we were discussing systematic trading strategies, we primarily dealt with technical indicators.

Given the nature of these mechanical strategies, technical indicators do play a key role in enabling hassle-free automation.

After all, technical indicators are not emotion-driven, or they do not have any emotional bias.

It is a straightforward price movement that is taken into consideration.

But that is not the only way to put a trading system in place.

There are many other mathematic alternatives to this too.

These are broadly bunched together as market forecasts.

Mathematical formulas are often used to predict certain market trends in future.

This is more of a qualitative analysis of the market sentiment.

These are primarily meant to identify future possibilities and potential.

So if the forecast is that the markets are set to move higher in the next two weeks, a systematic trading strategy will be to buy it now.

The crux of the forecast is essentially devising ways to use it for creating a trading system.

That alone is what holds the overall trend in place in a constructive way.

So forecasting too is an important element in devising systematic trading strategies.

Why Do Systematic Trading Strategies Work so Well?

So, there are some distinctive and pointed reasons why systematic trading strategies work well.

1. Cuts out Emotion

First and foremost, your trade is dictated by a system or a formula.

There is neither fear nor greed that plays any role in your market call.

You are not even influenced by your peers or any friend or family.

Your trading system moves forward blind-folded oblivious of any specific phenomenon.

All it identifies are numbers, levels, stop losses and margins.

So trade continues in an uninterrupted fashion for the most part of the trading tenure.

2. Better Trading Discipline

This immediately introduces a significantly higher degree of trading discipline.

Once you get a signal from your trading system, it is clear; you cannot ignore it or miss it.

Trading is as much passion as it is discipline.

There is no room for distraction or detractors.

With systematic trading strategies, it is rather simple to institute.

3. Limit Your Position

Often the key reason for huge losses is overleveraging more than a bad strategy.

The systematic trading strategies work exactly on this factor.

They help you in maintaining your financial prudence and taking logical and rational position calls.

When you already know that by choosing 1% risk, your net risk potential can be capped at 10%, why will you take any more risk?

A discretionary trader will not have prior information of a total number of consecutive losing trades.

But you don’t have to end up being too conservative or aggressive; you can take a balanced view.

Conclusion

Therefore, it is not wrong to conclude that you can improve your successful trading trait with systematic trading strategies.

It gives you a means to filter trades and put a cap on the risk potential.

It gives you a psychological edge in terms of dealing with emotions and maintaining trading discipline.

So if executed properly, you can lock in definitive profit with systematic trading strategies.

What Is Microfinancing?

Thanks to Muhammad Yunus and his Grameen Bank, microfinancing is a household term.

In many developing nations, microfinance has opened up brand new channels of funding.

It is, in fact, a lifeline for low income and many unemployed people across the world.

It works on the basic premise that low income should not be a criterion to stop anyone from starting a business.

A successful and well-provided life is a relative term.

MicrofinancingBut often many people are not even able to aspire for it because of the fund constraints.

In this context, microfinance is almost a bonanza for many in the low income group category.

No more of unscrupulous lenders and steep interest rate, microfinancing opens up a brand new avenue of opportunity.

The core idea is to facilitate a better life for the customers availing this loan.

The main objective is to empower them in a way that the customers can eventually shift to conventional bank loans.

So you can also look at it as a form of microcredit at the customer’s convenience.

One interesting explanation about microfinance was, ‘it is the appropriate option for impoverished dreamers.’

It is about bringing money forward where the need is most.

Definition of Microfinance

That is what brings us to the need to define microfinance a lot more succinctly.

In simple terms, it is a kind of banking service for low-income individuals.

This is specifically for this group who do not have easy access to conventional banking services for a variety of reasons.

As the name micro indicates, the loan amount is never too large.

Compared to conventional bank loans, it is quite minuscule.

The loans in microfinance may range from $100 to even as much as $20,000.

Lending is the primary service provided by these microfinance firm.

But certain organizations may also offer a range of additional facilities.

These may include a checking account and savings account for those interested.

So, the main aim is to empower people and help them become self-sufficient.

So typically you can look at this kind of financing as a method to avoid falling into the trap of loan sharks.

This financing is primarily for those below the poverty line and with very limited financial options.

Needless to mention that this services the unemployed and low income groups on priority.

In fact, the whole concept is deeply embedded in the thought to bring these people at par in society.

Traditional financial institutions do not support them.

Often their financial needs may be really limited.

But in the absence of common alternatives, they are forced to pay steep interest and often mortgage their belongings.

So, in many ways, it provides a safe loan option for people with limited financial means.

It follows conventional lending norms and does not resort to unethical practices.

As a result, the borrowers can be a little bit more relaxed.

All they need to be is consistent with their payment plans.

You have a variety of such organizations world over.

Historical Insight

It’s time to delve a bit into the history of microfinancing firms.

The idea was recently popularized after Bangladesh’s Muhammad Yunus bagged the Nobel Prize for his initiatives.

But the core idea has been there for centuries now.

Globally, different countries and cultures have been using some or other format of it for a long now.

However, it is true that Yunus and his Grameen Bank pioneered the modern format.

It is essentially formalizing a crowdfunding initiative for microlending purpose.

Yunus’ Grameen Bank was the first modern variant of this initiative.

There are many others who were actively engaged in developing module.

One of the most important names in this context is Joseph Blatchford.

He is a UC Berkeley law student and former Peace Corps chief.

He created a volunteer non-profit project, Accion in 1960s.

By 1973, they started offering small loans to interested entrepreneurs across Brazil.

Over the next 10 years, they expanded their operation across 14 Latin American countries.

Close to 900 loans were created and 1000+ stable job opportunities generated.

It is needless to mention that Accion brought about a significant change in the socio-economic construct in these countries.

It is interesting to see how microfinance firms have typically thrived in developing nations.

A very important reason for this is the economic challenges that abound in this region.

The huge rift between the haves and have-nots also played a pretty significant role.

Moreover, in terms of sheer number, the need for financing is much larger amongst the low income groups in these countries.

Whether you look at South Asia, Africa or Latin America, they have a huge population of low income workforce without access to proper resources.

As a result, microfinancing is like a glimmer of hope amidst complete darkness for them.

How Do Microfinance Firms Work?

That brings us to the crucial question about how do these firms work?

How are they able to provide loans to the low income group and recover the loans in time too.

Yes, indeed the default rates in microfinancing are much lower than conventional banking.

But that raises even more question about how they work.

Usually, you have many variants of microfinance facilities.

These may deal with only women and children.

Some may provide exclusively for certain types of SMEs.

Basically, this keeps changing from region to region and the unique needs there.

However, the basic functioning remains more or less similar.

It offers a variety of loans from startup funds to last mile funding.

They even organize awareness programs to educate people about investing with them

Often these programs focus on key skills like managing cash, bookkeeping and other associated aspects of investing.

Accounting and professional management of funds is as important as getting funds.

So these organizations do not just arrange funds but also make the customers capable of using them.

So, this is quite different from a typical loan firm.

There the lender is only bothered about the loan collateral and repayment terms.

But microfinancing goes a step beyond this.

They also arm the investor with the necessary know-how to help them succeed.

They make them aware of conventional financial lessons and basic money management classes.

Investors and entrepreneurs also learn how to manage their funds and run the business.

Once they are confident about their dealings, these people perform a lot better and experience relative success.

Though the loan amount may not be huge, this can be life-changing for many families.

In that context, microfinancing is also a type of philanthropic initiative towards a better tomorrow.

Modus Operandi

Most times, you will observe that these microfinance firms are based locally.

Instead of roping in big names, they bet on expertise.

The local flavor ensures that there is a much better understanding of the existing problems.

Moreover, these firms then go about strengthening their on-ground presence.

They form partnerships and enlist experts in their team.

They help create a conducive environment for robust business growth.

Moreover, they are able to organize businesses in a way more convincing format.

The investment in the case of these firms cannot be only measured in money terms.

For example, almost 70-80% of loans are taken by women entrepreneurs across developing nations.

They do not just look at the creating physical forms of revenue generation.

Often you see these women reinvesting the amount in the health and education of their children.

They are able to afford nutritious food and not forced to discontinue their education.

As a result, this offers an opportunity for these women to move up the scale in years to come.

Most microfinance groups also have an accountability team in some form.

They support entrepreneurs closely but also demand accountability at a personal level.

This helps in maintaining a disciplined and financially prudent approach.

Once an entrepreneur repays the loan, it is available to the next person.

That way, this money keeps circulating from one person to another in a comfortable circle of convenience.

The amount of money in circulation also increases.

The money gradually increases from $1 to $10 in a steady manner.

So, in essence, it is never just about the loan for these firms.

Often it transcends beyond the complexity of conventional loans.

It is a personal and rather unique experience for many.

The microfinance firm becomes a pillar of support for a wide network of needy individuals.

How Different Are the Microfinance Loan Terms?

Many people may wonder that these firms are dealing with really low income group individuals.

So does it mean that they have more relaxed terms of payment?

Or do they have to be stricter for better recovery and the lower rate of defaults?

Well, most microfinance organizations operate like conventional banks.

They charge a pre-decided interest rate on their loans and also institute a well lined out repayment plan.

The payment for the loan will be due at regular intervals and individuals will have to stick to these deadlines.

There are some lenders who make it mandatory for the beneficiaries to deposit some amount in the savings account.

This sum often acts as an insurance against potential default.

On the plus side, if they are able to repay the loan on time, they have additional savings.

Many times, these borrowers in a microfinance firm are not able to offer collateral like a conventional bank.

That is why these firms sometimes pool the borrowers in a team.

That acts as a buffer and reduces chances of potential default.

These borrowers repay their loans together.

As they operate as a team, there is also a certain degree of peer pressure in this format.

Everyone’s interest is interlinked in this case.

Therefore, the repayment also becomes a team effort and everyone helps everyone to achieve success.

Once the borrowers are able to develop a definitive credit history, it plays to their advantage.

They are able to apply for bigger loans in the future if required.

It also builds a certain degree of credibility in their operation module.

Probably this is why these loans have a generally higher percentage of repayment history.

This is true across the globe and transcends boundaries like culture, country and socio-economic challenges.

Advantages of Microfinancing

Therefore, you can understand that there are many advantages of this kind of loan plans.

Apart from the fact that it helps the lower strata of the society come at par, there are many other benefits too.

1. Better Access To Credit

Often the biggest problem that low income individuals face is the lack of credible resources.

Given their poor track-record and insufficient means, they are not able to approach conventional banks.

Traditional means of loans are nearly out of bounds for them.

So, microfinancing helps these individuals get access to credit in a respectable way.

They do not have to bend down to unscrupulous practices or unethical means to secure funding.

As a result, this helps them to break the vicious cycle of poverty in a slow and steady manner.

2. Customer Friendly Terms and Rates

Most microfinance firms have the option to customize their interest rates and the repayment terms.

It is typically based on the investor profile and strategic positioning.

In this way, both the financial institutions and individuals are able to achieve a higher rate of success.

3. Better Quality Of Life

It will be wrong to judge just the financial returns that these loans yield.

The actual benefit goes beyond the mere monetary advantages.

Microfinance helps many families to gradually work their way out of the poverty-stricken conditions.

Be it healthcare, education or a nutritious diet, microfinance becomes the single biggest catalyst for a sustained change.

It helps entrepreneurs and their families to develop a degree of resilience.

More households can afford a better living condition for their families.

The fact they do not have to run pillar to post looking for funding means they can utilize their resources constructively.

All of these guarantee a distinct improvement in their overall lifestyle.

Disadvantages of Microfinance

However, that does not mean that microfinance is without its share of controversy.

This also does not mean that this loan system is without its demerits.

As the popular saying goes, every coin has two sides.

Though the microfinance industry now services close to 200 million customers globally, their rate of interest is never at par with conventional banks.

It is distinctly higher compared to traditional financial institutions.

But the only positive there is this amount will be less than what the loan sharks demand.

Moreover, the repayment options are invariably a lot more rational.

But that is only the tip of the iceberg.

Many experts believe that the loan amount that these firms offer is never adequate to start a business.

A successful business is rather cash intensive in initial years.

These microfinance firms do not have the wherewithal to support such large operations.

The money they are able to offer only addresses daily needs like food, shelter and accommodation.

On the contrary, they believe that these loans can push these individuals further into a deadly loan cycle.

Extracting them from that zone may be difficult eventually.

For customers who already lack adequate resources and funding, this is a challenging situation.

There is one group that believes that compared to loan sharks, the rate of interest is lot less.

So it can help them save some additional interest payment.

But how successfully they can launch a business is more of an individual effort than the role of any microfinance firm.

Grouping borrowers together for repayment may address the situation to some extent.

But there are also reports of some scam and forceful fund recovery by some players.

That sure is a sore point that needs to be addressed in a constructive manner by the authorities over a point of time.

Conclusion

The financial world is full of various instruments of convenience and caution.

There are some that work to your interest while others may not.

You have to analyze the microfinancing concept in the same vein.

The final degree of success will depend on the way this financial instrument is operated.

But for the low income individuals, these microfinance firms surely hold out a ray of hope.

As you have seen in the case of Grameen Bank, the microfinance concept can work towards alleviating many poverty-related ills.

It is never just about providing adequate funding for the people.

The concept of creating an alternative source of funding led to the rise in microfinancing.

But easy access to credit at all times at convenient terms is the biggest advantage of microfinance.

Multibagger Stocks and Whether You Should Invest in Them

Multibagger stocks come across as the new buzzword in investment parlance.

You may be looking at creating long-term portfolios or concentrating on short-term gains, this works both ways.

Often for those who want to make a lot of profit in a hurry, the multibaggers offer huge options.

But the multibagger stocks often create confusion too.

It is very important to identify what’s hot and what’s not.

It is never wise to go by just one element of the definition.

There are many aspects of investing in stocks.

Multibagger StocksYes like any other entity, these are also very dynamic counters.

While it makes a sense to include them in your portfolio, making an informed choice is important.

Ultimately, that is what will ensure that you get superlative returns as expected.

Also, remember that a multibagger does not have to be a penny stock or a midcap always.

Going by hearsay is perhaps not the best way to deal with market investment.

Remember sometimes, people may also pass on their own fear and apprehension.

So, it becomes very important to make an informed choice in the market.

That is how you will be able to gain from multibagger stocks.

Definition of Multibagger Stocks

But before we move any further, it is important to understand what you mean by multibagger stocks.

The definition of multibaggers is how you can successfully distinguish these from other high return stocks.

You see the market is full of possibilities and potential.

The idea is to identify the most appropriate opportunity and cash in on it.

Most investment books will tell you that multibagger stocks deliver huge returns, sometimes even 100%.

But that is not all.

Most times, these are fundamentally very sound.

They have a strong business model and have been delivering great quality products consistently.

As a result, they become very dependable and attractive business to invest in.

Most importantly, these companies have strong corporate governance.

As a result, it is only a matter of time before the business starts yielding returns.

In most cases, the businesses can scale up really fast.

So, the investor needs to be sharp in terms of entering the stock at the right time and waiting for the appropriate levels for the prices to scale up.

The word multibagger is more of a derivation of existing market terminology.

Normally two-bagger is used for stocks that offer double the return.

When a stock price grows 10 times, it is called a 10 bagger.

So, a multibagger is a stock whose prices have increased several times the original investment.

In other words, these stocks have yielded returns multiple times, hence the term multibagger.

So primarily, this refers to any stock that holds the promise to yield phenomenal returns.

Therefore, a multibagger stock is any counter that yields a strong return on the basis of business fundamentals.

Remember the price rise is not due to any type of market volatility.

What Must You Know About Multibagger Stocks?

So now we are getting closer to identifying them, you have to take into account the key elements about multibagger stocks.

This will not just enhance your research but also add weight.

In many ways, if you knew these, identifying them also become simpler.

It creates depth in your overall stock study and makes your portfolio richer.

You already know some key elements like these have a dependable business model.

That means, it is relatively uncomplicated to research their business fundamentals.

In terms of growth possibilities, these are undeniable leaders.

But here are some features that help them stand out.

1. Sustainable Growth

The concept of continuous growth is never simple.

It is almost like a promise of non-stop growth irrespective of the growth factor.

So how they are able to transcend the time factor this easily is interesting.

The business model of the company is such that it is capable of delivering growth over a sustainable period.

Often it is this continuous growth that helps it become a multibagger.

2. Don’t Be in a Rush

If you are in a hurry to make money, this may not be the best option.

In fact, you need a lot of patience for investing in these type of stocks.

They do deliver multiple times return but it is inevitably over an extended period.

Often it may even take 4-8 years, in some cases, it is 10 years by the time they are multibaggers.

So if you lose patience in a year or so and book profit when they are up 60-70%, you can never get the 100% returns.

3. Don’t Limit to Midcaps

Typically the midcaps yields a much larger number of multibaggers.

But don’t end up ignoring the large-cap space either while looking for them.

Debt Level Is Crucial in Multibagger Stocks

Now the question then is how do you identify these multibagger stocks?

The pricing alone cannot be your tool to gauge these stocks.

The question then is how do you assess business fundamentals?

Debt is by far one of the best ways to gauge a business and its future prospects.

Think about how we analyze companies and their businesses?

Debt is by far the most important component of the business.

It tells you the kind of funds available and also indicates the extent of leverage.

Most importantly investors can also gauge the extent of risk that the company is exposed to.

So if you are assessing the health of a business, the debt level needs to be manageable.

Moreover, the source of repaying the debt is very important as well.

It will indicate if the business is able to generate the fund it requires.

In case it is borrowing from outside, it is important to know that source too.

The extent of scalability can be instantly gauged from the source of funding.

This will also help you analyze the quality of business and the level of commitment by the founders.

Often this is the most important distinguishing factor between a volatile penny stock and a multibagger stocks.

Debt level differs from business to business.

But, on an average, the debt should not be more than 30% of the net equity.

On an average, it may range between 15-20% of the equity depending on the industry.

Remember the cardinal factor for a multibagger is that it is undervalued.

So, in analyzing the debt of the company, it is important to ascertain that this does not increase the leverage disproportionately.

The key requirement for a good business is that the debt or liability is manageable.

Keep an Eye on Earnings Projection

Business fundamentals is the buzzword when you are considering multibagger stocks.

In this context, the next most important factor is that of earnings.

It is very important to assess the quarterly performance.

Remember we are currently operating in a rather uncertain economic situation.

Global economies are connected more than ever.

As the proverbial saying goes, you can catch a cold in New York even if someone sneezes in Japan.

Slowdown is a living reality in many economies the world over.

While there are some other economies that are moving ahead in leaps and bounds.

To add to that you have political unrest and other trade-related turmoil.

The idea is to choose stocks that are least impacted by all these uncertainties.

So it becomes important to gauge the earnings performance of the stocks you choose.

Depending on market condition, it is important to analyze how the earnings are impacted every quarter.

The quarterly analysis will help investors make a fair assessment of the degree of risk.

Moreover, it will help them understand if the stock in question is really undervalued or under-priced.

These have been mostly ignored by the market or may be mis-priced.

So a close study of the earnings will highlight if there is indeed need for any worry.

The basic premise, in this case, is that the business model is dependable.

The discrepancy in pricing is merely a matter of time.

So when you are choosing a stock, the one factor that can help you take a firm call is the earnings performance.

Well, that also does not mean that a stock will be performing very well continuously.

There can be occasional blips and phases of low returns.

Then again it becomes very important to gauge the time for turnaround too.

Don’t Forget a Qualitative Analysis of These Stocks

After you are done with analyzing the fundamentals and valuation of these, it is time for some qualitative analysis.

In fact, this is the test that often determines whether investing in a specific stock is justified.

More importantly, the qualitative analysis highlights the investment mettle of a counter.

In other words, it helps you decide how competent a specific stock is.

So you have to get down to check the quality of the company or the business.

This includes a close study of the management and the competition around it.

Often these factors contribute to its sustenance to a large extent.

It helps you decide how easily scalable is the business model.

The earnings estimate may project x% growth.

But the qualitative analysis will help you decide how quickly or how effectively can you experience it.

The competitive advantage that a stock has is a very important factor.

Often that is the key element that most investors miss out on.

But when you are considering multibaggers, this is the factor that is abetting continuous growth.

Moreover, you have to gauge this competitive advantage over the longer term as well as the short-term.

That is how you can decide how long-lasting will be the benefits that you are anticipating.

It will also rationalize the debt exposure in certain cases.

Especially, if a company has undertaken debt for expansion, the competitive advantage can help justify the higher leverage.

It is often the core element that contributes towards profitability and revenue generation.

That you will agree leads to ultimate profitability.

The core concern is to identify a stock that is undervalued but promises value.

An in-depth qualitative analysis will help you identify exactly this factor.

It is often the backbone of a meaningful research.

What Are You Opting for When You Invest in Multibagger Stocks?

So, that brings us to some of the known traits about multibagger stocks.

You are surely using some well-established parameters to gauge them.

But here is a closer look at how effectively you need to redirect these parameters.

1. Bargain Hunting in Stock Market

Most times when investors are choosing these, they are getting growth at a discounted level.

Most times, they are buying these multibagger stocks at a discounted rate.

You are selecting a reasonably priced stock.

But what you are getting in return is a phenomenal profit margin.

So you are paying a reasonable cost for a growth that is unreasonably high.

It, therefore, becomes like one of the most touted clearance sales.

A great dress is lying under a heap of mediocre options.

Quite needless to mention, you are exhilarated by the prospects.

But you have to keep your patience and wait for the ultimate gains.

2. Turn-Around Stories

By choosing these bargain entities, you are also betting on some badly beaten counters on the street.

So you are in many ways going for resilient companies.

That means, these companies have a far better scope and opportunity in terms of sustainable growth.

They are able to create a meaningful growth trajectory.

It means that these companies have the strength and strategy to recoup losses.

That, in many ways, puts you in the winning league instantly.

The experience that these companies have instantly puts you on the hot seat in terms of dependable growth options.

3. Competitive Advantage

You also end up getting a huge competitive advantage in terms of sectoral allocation.

The multibagger stocks are inevitably the ones that have successfully dealt with competition.

Both in terms of positioning and also strategy for future, they come across as industry leaders.

Advantages of Investing in Multibagger Stocks

So, there are some distinct advantages of buying multibagger stocks.

You are easily able to crank up the average portfolio value significantly.

But that apart, there are many other advantages as well.

1. Significant Return on Equity

Normally the return on equity is in many ways your percentage of profit from an investment.

Inevitably, the multibagger stocks are associated with superlative returns.

It rewards its investors with an above average profitability margin.

So by investing in these type of stocks, you are easily catching up on the growth bandwagon rather easily.

2. Getting an Opportunity Advantage

Many in the street term multibagger stocks as taking advantage of missed opportunities.

As a result, you get the benefit of buying these at a discount.

You are able to bet on a superlative growth by taking advantage of something that the market ignored.

The stock may be underpriced just because the sector is out of favor

By getting an opportunity to buy at a lower price, you peg your bets on a dependable growth engine.

3. Change Makers

Multibagger stocks are turnaround stories only because they are able to successfully wade through failures.

Normally the higher growth is purely a function of some structural change in business.

Either the way the company conducted its business or the management that created trouble is tackled effectively.

As a result, you are able to get a superior growth story without really compromising on the price levels.

The price of the stock languished as the street underestimated the company’s sustainability.

By making some bold changes, the company did not just guarantee superior growth.

Also, it brought forth a dependable portfolio buzzer.

It made it possible for investors to get one unique growth story that instantly changed the construct of their portfolio.

It is about embracing change.

Conclusion

Therefore, it goes without saying that if you want a strong portfolio you must bet on multibagger stocks.

However, don’t be in a rush to invest in these types of stocks.

The market is full of low priced stocks.

But not all of them are multibaggers.

The trick is to make an informed choice at every juncture.

Often the idea is to grab a great growth story at a distinct discount.

This is primarily the essence of multibagger stocks.

It holds out the promise of a phenomenal return without investing too much.

But you have to choose wisely from a whole list of potential multibagger stocks.

That is how you can book maximum profit.

Millennial Investing Trends, True or False?

Whether you like it or not, you cannot deny millennial investing trends.

Especially the severe slump in the markets post 2008 crisis literally remolded the millennial investing format.

Investing parameters changed and a new normal replaced the old order.

It is common knowledge that all investments carry a certain amount of risk.

But suddenly optimizing the value of money is also equally important.

A sudden new element of excitement and apprehension has taken center-stage.

The constant effort is to create a model that limits capital erosion.

Somehow the images of the overnight bloodbath on the street will not leave the Millennial generation in a huff.

Millennial Investing TrendsNearly 1 in every 3 American is a millennial now.

Today the Millennial workforce make up close to 35% of the workforce.

This is what makes it important to analyze and take into consideration the millennial investing trends.

The concept is veering closer to the fact that you have to make your money work for you.

The idea is to grow your financial portfolio in a way that your retirement kitty is not wiped out overnight.

That you must remember is one of the most important millennial investing trends.

After all, this is the generation that had to bear the brunt of one of the most brutal market falls in the recent times.

They had barely hit adulthood and an active employment opportunity when disaster struck.

Needless to mention their priorities are very different from the baby boomers before them.

That is why millennial investing trends is one of the most striking realities of modern times.

Good ties, bad times, small investment or long-term ones, you cannot avoid the definitive investing trends.

It is distinctly different, even bold in many ways and spells out the trend in broad terms.

Who Are the Millennial Investors?

But before we delve any further into the millennial investing trends, let us understand who these millennial investors are?

The term refers to the generation born between 1982 and 2004.

After the Generation X, they are the biggest in terms of numbers and have long edged past the baby boomers.

They got the name Millennial primarily because they are born close to the new millennium and most touched adulthood then.

They are in fact, the first generation digital natives.

Technology, unlike the previous generations, played a very important role in their lives.

Mobile phones, tablets, phablets, this generation is a decidedly device savvy one.

In fact, the recent growth in the technology sector is also courtesy of them.

In fact, this is also the most ethnically diverse and radical generation.

As a result, the millennial investing trends are distinctly unique and different.

Stagnant wages, sudden and deep recession, they have practically seen it all.

In fact, the most 20 something have also known what it means to be out of work quite early in their career.

Stagnant job markets, loss of mobility here are realities that they had to face right at the beginning of their careers.

Therefore given their experiences, their financial perceptions and aspirations can’t be equaled to the baby boomers for sure.

People are able to save lesser because earnings and subsequent pay hikes are lower.

Now add the debt burden to that as well.

All of these together were the perfect recipe for a rather difficult dilemma in economic terms.

You may call them spoilt, saddled with convenience or born with a sense of entitlement.

But at the same time, you cannot deny they will have to work longer and still not save as much as their predecessors.

Financial Challenges of Millennial Investors

Therefore, when we are discussing the financial realities facing this generation, it is imperative that their challenges are unique.

In terms of the average income, they lag behind the baby boomers severely.

So they start off with a significant wealth gap in their day to day expenses compared to the previous generation.

So their cardinal priority is making sure that they have enough to meet their daily expenses.

That does not even mean that they can directly get on to the job market.

The sluggish labor market also meant that they have postponed their job plans in favor of higher education.

Part-time jobs no doubt have been in the limelight.

The priority is more about dealing with the present than the future.

As a result, their challenges and goals are distinctly about achieving financial independence.

Creating that kind of wealth needs serious long-term strategic planning and focused thinking.

1. How to Achieve Financial Independence

Most millennial live from paycheck to paycheck.

So it has become important for them to generate that additional income.

Frugal living cannot guarantee that for them.

After all, a few coffees less at Starbucks or a couple of burgers less in McDonalds cannot help them fashion a comfortable retirement.

The effort is constantly about enhancing avenues of employment.

2. Dealing with Debt

Cash is king for this generation.

They also have to prioritize their purchases, so debt is also priority based.

The idea is to pay off debt as quickly as possible.

Along with that, a good credit card score is crucial.

3. Prioritizing Purchases

But this is not a generation that spends frivolously.

Lenders are implementing stricter rules for loans.

As a result, the millennial has to learn to balance cash with loans.

They are also formulating a strategy to line-up purchases.

Retirement Concerns

When you are discussing millennial investing trends, the future is a paramount concern.

This is because one of the biggest areas of worry is whether the millennial generation will be able to retire.

You may consider that for this age group which has seen it all from recession to economic hara-kiri, retirement planning is natural.

But close to 30% of the millennial are hoping for a big inheritance or lottery win to fund their retirement.

Therefore, it will not be wrong to assume that a relatively good percentage of them are going to struggle through their retirement days.

Moreover, studies indicate a whopping 70% of them live with the thinking that they will be able to sustain with an annual allowance of less than $40,000.

Let alone the lower purchasing power of $40,000 in about 30 years from now.

Future planning, therefore, you can understand, does not come to them naturally.

They have seen massive real estate busts and boom and have understood that pension plans may not be all that reliable.

But despite all of these, they are lagging severely in the savings department.

In fact, the retirement plans too play a crucial role in this.

They are structured in a manner that makes saving rather difficult.

Most times, even if the employer matches 10% of an employee’s contribution, it is considered huge.

To make it even worse, the social safety nets are also waning in terms of support cover.

Moreover, the pointed avoidance of any type of stock market exposure is another worry.

Remember if this generation wants to create lump sum savings, it has to be done in a hurry.

Key Millennial Investing Arena

A very few asset classes can meet the percentages in terms of returns when you compare with stock markets.

But a paltry 25% or even less have stock market exposure.

The aftermath of the 2008 crisis has left many scarred for life.

So the question now is if you follow millennial investing trends, where do they put their money?

You must remember that they are approaching investment in a completely different manner.

It is distinctly different from how their predecessors did.

For millennial who can invest, the percentages are much higher than baby boomers, sometimes close to double.

They are leveraging social networking and information vehicles a lot more than the earlier generations.

Quite needless to mention, they are depending a lot more on technology.

They are turning to apps for practically everything from stick tips to accessing financial planners.

When the Millennial actually gets on to investing in stocks, they don’t wait for tips gathered at a golf course.

Rather they just click on an app to review a specific trade.

Brand loyalty too plays a crucial role in their investment decision.

Moreover, their social and environmental responsibilities also play a cardinal role.

Therefore, you can imagine, sheer monetary gain does not cut the ice for this genre of investors.

So they are keen on using a variety of online apps to power their savings ahead.

They want to be in control.

They do not want to simply call the broker place the trade and be done with it.

Furthermore, they want to stay updated about their portfolio and use technology to the hilt.

The millennial investor is also making informed choices increasingly using technology continuously.

Therefore, it is not unnatural that close to $1 billion has been used to fund technology in the financial space.

Increasing Use of Investing Tools

The increased use of investing tools is the other major millennial investing trend.

This is the generation that has learned to rely more on technology than actual human intervention.

You may wonder if there is any connection between this and the increased demand for mobile-enabled, computer-friendly employees.

Suddenly degrees have to share their space of glory with these technological interventions.

There is a complete platter of devices wooing the millennial investor with its charm.

Therefore, millennial investing is a lot more tech-enabled than it was ever before.

You are a whole gamut of apps creating a conducive and safe investment environment for you.

From robo advisors to mobile-enabled investors, there is no dearth of opportunities now.

From automated trade to portfolio rebalancing as per existing algorithms, nothing is impossible.

Even investment advice is given via apps absolutely free.

The idea is to make understanding of the markets as clear as possible with these apps.

You can also plan to use personal automated planners and get customized services.

These provide you assistance in creating a financial plan customized for your needs.

You can also manage all your savings under one web-based platform.

Needless to mention the thrust here is capital preservation at every point.

From free trading to low service charges, the realm of possibilities is huge.

You can use technology to synchronize your investments and maximize profit.

Moreover, the purchasing power of the millennial investor may reduce significantly.

The effort is to constantly help them optimize savings and even create convenient and small nuggets of investment.

Affordability is the buzzword in most modern investing trends.

Therefore you have to understand that millennial investing trend is a lot about creating value for money.

Need to Invest with Care

The core idea is to work out a promising plan that offers maximum returns.

Therefore the millennial investing is often about how much care you take of your investment.

Having burnt quite early on, they do not rely on second-hand information entirely.

The idea is to stay in touch and invest your care.

There is a greater value for money and appreciation for cash.

The idea is to make sure that every penny that you deal with offers you the maximum possible value by the end of it.

Time is not in favor of them.

Most of the millennial investing are about saving a lot of money in a hurry.

So they will not trade any petty stock blindly.

They carefully assess the return ratio in a meaningful manner.

So instead of a high paying small cap trading, they will find more value in an interest paying savings account.

After all, they have seen portfolios wash out in a matter of minutes.

They will put their money only when they are sure of the risk and returns.

Often, capital preservation is as big a theme as higher returns is.

Most investing is done on the basis of this cardinal rule.

The effort is in identifying the right channels to realize these ends and create considerable savings.

The whole effort is in making sure the money is in safe hands.

They do not take chances.

Need for Alternatives in Your Investment

If you are analyzing the millennial investing trend, this one is as clear as the use of technology.

In fact, you can also say that the extensive use of technology has also facilitated this move.

Yes, I am talking about diversification, expanding investment horizon and recognizing the need for alternatives.

In many ways, it is also about going back to traditional wisdom and remembering not to put all your eggs in one basket.

Millennial investing is not just smart and savvy, but it is also wise and diversified.

Millennial investing is in favor of alternative investing at every stage.

As a result, you will see that they are also investing extensively in traditional safe havens.

Almost 11% of their assets are in gold.

The thinking is that stocks may offer huge returns, but they also need options with safe returns.

They do not want to peg all their earnings in one avenue and then be left with nothing.

There is a much greater and more thorough study of a variety of investment channels.

The core idea is to stay prepared for the worst but invest in the best.

But they are not being irrational either in the name of diversification.

While they are increasing exposure to precious metals and forex, Bitcoin has not seen that big interest.

It is technology based, promises higher returns, but it is also uncertain.

They are looking for more stable alternatives.

Millennial investing is primarily about creating meaningful investing models that help you spread out but not too far.

However you may invest, your alternatives have to be stable and reliable.

The percentage of returns and the consistency in performance are all extremely important.

Money is carefully allocated across a plethora of funds.

But at the same time, it is with precision.

Conclusion

Therefore, it will not be wrong to say that millennial investing trends are all about investing in yourself.

From expanding knowledge base to technological empowerment, millennial investing goes overboard in terms of personal safety.

Individuals are spending more time in knowledge gain.

The stress is more on accumulating as many skills as possible.

At the same time, there is stress on precision, pointed and pre-planned strategies.

They have also recognized the need to cut down expenses, be it health or unrealistic trades.

They have limited resources so they are keen on maximizing the potential.

A better quality of life with a greater scope of future spending is the basis of millennial investing trends.

10 Ways of Investing for Teens

Investing for teens is a pretty modern concept, but it is catching up soon.

Increasingly you see more financially prudent teenagers today.

Gone are the days when they were only earning in summer vacations.

There are many ways that teenagers can now make money online.

Both in terms of options and extent, they are earning a lot more than their peers 10-20 years ago.

As a result, investing your earnings is no longer an adult topic.

Investing for TeensIn fact, if you start early, investing can become your primary way to earn money.

Investing for teens is not just a viable proposition, it can, in fact, enhance your adult savings.

But by this, I am not suggesting quitting your studies and concentrating on investing or earning.

The best part of investing for teens is your savings can be as low as $500.

One of my most favorite examples is the weekly pocket money you get.

Let us assume your parents pay you $10 a week.

That makes your early pocket money allowance a little more than $500.

Even if you keep aside $3-4 every week, you get approximately $200.

What if you invested the money you saved?

Do you feel this is too little an amount to invest?

Can you imagine the kind of savings this paltry amount can yield?

Even this amount is quite sufficient to set off your investment journey.

The good news is now you have a plethora of options for generating robust investment.

After all, investing for teens is more about change in thinking rather than the amount of change.

You don’t need too much money; you only need the will to invest in.

Here is a quick lowdown on how to proceed when investing for teens.

This is simple and effective.

Set Your Investment Targets

But wait, the principal for investing for teens is same as adults.

First and foremost, you have to set your objectives and targets.

What are you expecting from your investments and how much money are you expecting in n years?

These are the key questions that set the tone and tenor for any great investment.

In many ways, that is the stepping stone which lays the foundation of all great investments.

The first step is to identify the instrument that you will like to invest in.

That necessitates another condition, the level of risk.

Broadly most available investment options can be divided into

  • No Risk
  • Low Risk
  • Medium Risk
  • High Risk

Almost inevitably the no risk and low-risk options yield much lesser returns compared to the other two.

The money that you deposit in the savings account and the certificates of deposit falls under this category.

Mutual Funds, stocks and the like fall under the medium risk category.

There is a distinctly reasonable return prospect but at the same time,

Sector-specific mutual funds are among the high-risk investment alternatives.

These include certain sectors like technology or energy and segments like midcaps or penny stocks.

These sectors typically have wild price swings and can be extremely volatile at times.

The downward spikes are often as sharp as the upward ones.

However, the relatively high returns may often convince investors to put their money in these.

This is dependent totally on the investor’s discretion.

They can choose the instrument based on the degree of risk they are comfortable with.

You have to balance the rate of relative returns with that of the rate of risk.

That is how you can decide on relatively dependable investment instruments.

Ways of Investing for Teens

You need to choose instruments that deliver satisfactory returns.

Here is the list of the 10 ways that teens can invest:

  1. 529 Plan
  2. Education Savings Account
  3. Certificates of Deposit
  4. Mutual Funds
  5. ETFs
  6. Retirement Plans
  7. Stocks
  8. Robo Advisors
  9. Savings Bank Account
  10. US Savings Bond

1. 529 Plan

This is perhaps one of the most appropriate plans when you are investing for teens.

This helps you grow funds for your expensive college education and makes you self-reliant early on.

It is a relatively moderate risk opportunity.

The stable returns and a large sum of money you can use later is a major incentive.

This uses tax-free investing options to power your college funds in a meaningful way.

Remember you can never be too late to start saving, and teenage is sometimes a lot better than adulthood.

The 529 plan is primarily aimed at college funding.

So the basics of return reward ratio stay constant.

The nitty gritty and savings methodology may, however, change from state to state.

Every state has its own signature college saving plan to ensure operational ease.

This is primarily targeted to help you with your college savings.

You can allocate these funds across a wide gamut of investment options.

These do not carry a tax liability till they are withdrawn to pay for your college.

The limits for contribution to these plans can be varied.

The upper limit is often very high.

You can also take advantage of the gift and estate tax benefits using this plan.

Opening a 529 account or an ESA is not too difficult either.

You can start putting in money bit by bit in a meaningful way.

If you use these funds only for educational expenses, the interest is tax-free.

You can start by investing as low as $25 every month.

Remember most savings instrument grow in compounded form so by the time you will start using it; you can have quite a lump sum.

As the entry limit is so small, it will never hurt to start this type of investment at any time.

2. Education Savings Account

This is another interesting academic plan that you can start investing for teens.

This is also a variation of the traditional college savings plan.

If you are looking for some savings instrument that will yield more self-directed results, this is a great one.

However, the upper limit for contributions to this plan is capped at $2000 every year.

But that does not mean it is not a viable plan.

Especially, if you are looking for an investment instrument that is not covered by 529 Plan, this is an alternative.

Moreover, when you are investing for teens, even if the quantum of your investment small, it can still generate great returns.

This is primarily another means to create additional savings for a rainy day.

3. Certificates of Deposit

Whether you are investing for teens or adults, this is by far one of the most popular options.

A certificate of deposit is undeniably a low-risk opportunity but at the same time yields reasonable returns.

You can redeem it at any time you need in return of some pre-payment charges.

These are also insured by the Government, this brings down the risk even more.

They also have a relatively higher rate of return amongst other Government products.

So it becomes a very convenient option for passive income.

You have the option to decide on the amount and the duration that you want the investment for.

It can start as little as $100, and the outer limit can be any amount.

You can get these for a variety of duration starting from 1 year to even five years.

Normally the one with the longest duration yields the highest rate.

In case, you need to liquidate the money earlier; you can still do so after a penalty payment.

4. Mutual Funds

When you are investing for teens, the relative risk-return ratio is crucial.

This is why Index Mutual Funds can be an effective option when you are planning to invest in Mutual Funds for teenagers.

Traditionally, the Index will inevitably yield much higher returns over any time period.

The relative risk in these is also much lesser.

Moreover, you can choose Mutual Funds for any duration that you like.

Normally they have a pre-decided lock-in period.

You can also reinvest the interest into further funds.

The minimum amount can be quite small.

You can also invest in systematic investment plans for Mutual Funds.

These need you to invest regularly, but at the same time, it does not have to be too large.

So that way it works out to be a convenient option for teenagers and adults to invest some cash regularly.

5. ETFs

It is for the same reason that I will suggest even ETFs when you are investing for teens.

ETFs are exchange traded funds that derive their value from the underlying Index or commodity.

Though the underlying value is derived from the Index, there is no direct exposure to these assets.

The advantage over Mutual Funds is that it requires a lower amount to start off your investments.

While you can redeem Mutual Funds only at the end of a trading day, this is a pretty flexible plan.

You can redeem these pretty much like stocks at any time you want.

Though these are medium risk options as they deal with market products, there is a low risk of your assets depreciating below the principal.

The Index or commodities are the most popular ETF opportunities.

These are also among the very resilient asset classes

6. Retirement Plans

Whether you are investing for teens or young adults, it is never too early to start your retirement plans.

Saving for retirement is a necessity, and the earlier you start, the better.

The law of compounding will only ensure that you go smiling to the bank.

The IRA or the individual retirement account is one of the most common propositions.

When you start saving for your retirement early, it also means that you can retire earlier.

There are many types of IRA that you may look at.

However, the traditional IRA or the Roth IRA is amongst the most popular.

These will offer maximum benefit to individuals in the lower tax bracket.

Needless to mention that teenagers do fall into this category.

So it comes across as a viable option when investing for teens.

You are not just helping them invest their money but also securing their future.

The fund that gets accumulated can form the basis of bigger and better investments going forward.

7. Stocks

When you are planning investing for teens, you can also look at stocks.

But this is mainly for teenagers bordering on adulthood.

Financial literacy is relatively higher in the current scenario.

As a result, more and more investors are open to investing in stocks.

But as I mentioned earlier, the risk and return balance is crucial when you are investing for teens.

You have to carefully curate the investment opportunities.

The idea will always be about maximizing returns and reducing risk as much as possible.

So you can look at investing in the Index or stable blue chips.

But remember these are specifically investments for the longer term.

Short-term or intra-day trades are only market veterans.

It is never worthwhile to drag teenage investments into that kind of a volatile situation.

Look for stable and sound businesses that can offer relatively better value going forward.

8. Robo Advisors

The reason why I suggested stocks as an option for investing for teens is also because of the technological advances.

The Robo Advisors have completely changed the entire game plan in the world of financial investment.

They use a whole gamut of technological advances to ensure that the investor’s money is in safe hands.

Moreover, these automated investment platforms like Betterment are also programmed for capital preservation.

These are also low-cost investment avenues.

Most robo advisors have 0 or a nominal trading charge.

The accounts see auto-rebalancing depending on the way the markets are moving.

For your teenage investor, this is a double benefit.

The money is invested and at the same time, it does not face any undue risk.

When you are planning to make yearly savings of less than $500, this is also a very convenient opportunity.

It provides a brilliant opportunity to diversify your savings.

But at the same time, the investor can play a fairly passive role in it.

You just have to fund your account at regular intervals.

Most times, the robo advisors are fairly competent in tackling most of the other related programs.

9. Savings Bank Account

Suppose you are unsure about all the above options.

You can still look at investing for teens in a conventional savings bank account.

While the rate of return may not be as high as most of the other instruments we suggested, this is a 0 risk opportunity.

It is ultimately one such savings instruments that just do not have a pre-condition attached.

Whatever little amount of money you earn as an interest, it is unconditionally yours.

It is not going to go anywhere.

So when you are investing for teens, this is undeniably the first step.

Instead of stacking up the money in the corner cupboard or envelopes, it is always a great idea to make it work.

A savings bank account is perhaps the first step in the right direction for it.

Most times, parents use the savings bank as the first step towards more meaningful savings going forward.

It can also help teenagers to get into the savings habit.

They become conversant with the financial process when they start banking regularly.

This awareness about the money thus created can also help in them becoming financially competent later in life.

This will also make sure that the cash is not spent before you can create other investment channels using it.

10. US Savings Bond

Last but not the least, the US Savings bond is a convenient opportunity while investing for teens.

This is also known as safe haven investment for the relative security that they offer.

In fact, this is amongst the safest investment bets available at the moment.

Your money can’t be safer in any other medium.

But at the same time, you have to make do with really small returns.

But given the kind of protection they offer, you have to be prepared to accept the lower rate of return.

Conclusion

Therefore investing for teens is primarily about recalibration of investment objectives.

It is never important to calculate how much you are investing.

Rather the focus is more on how well you are doing so.

Remember most times the amount you are investing is very little when you are investing for teens.

So I have shortlisted opportunities with lower processing fees.

Otherwise, most of the profit will get eroded in paying for processing charges and taxes.

Typically the tax liability of teenagers is also much limited.

Therefore the primary focus is to go for high return options.

But at the same time, one has to be mindful of the risk involved.

Only when the balance between the two is effective, you can narrow down suitable options for investing for teens.

Genesis Investing System in Details

The Genesis Investing System has taken the investment world by storm.

It has undeniably taken crowdfunding initiatives to an absolute new high.

Genesis Investing is essentially a training and academic platform.

It teaches interested players how they can invest in crowdfunded companies with the help of recent regulation.

HR 3603 is a landmark regulation in securities law sector in US.

It primarily eases the extent and effort involved in investing in this sector.

Equity crowdfunding has thrived in some format or the other.

Genesis Investing SystemBut the recent regulations ease the entire process considerably.

The Genesis Investing System takes this whole experience a notch higher.

It is primarily based on the technological advances now.

Given the widespread reach of the internet and the pace at which technology is developing, entrepreneurship is scaling new highs.

Today it is not just about the will to be an entrepreneur or ability to fund projects.

Technology is facilitating investors to practically breach every conceivable boundary.

Be it geographical, historical, political or what you have.

Platforms like Genesis Investing are surely adding more power to such drives.

The idea is about creating meaningful channels of quality entrepreneurship opportunities extensively.

One of the most striking pegs that Genesis Investment is using is the versatility of this platform.

It says individuals who are not business minded can also use this to multiply their money.

Investment experience in business is also not required to get an edge in this case.

Needless to mention, these offers have many takers globally.

After all, who does not want to earn money without too much effort?

To top it, this also seems like a reasonable prospect to garner some cool amount.

This further necessitates an in-depth review of Genesis Investing System and the success story.

What Is Genesis Investing System?

Genesis Investing is a product launched by Crowdability in 2013.

Crowdability specializes in information on equity crowdfunding.

Operating across the United States, it is co-founded by Matthew Millner.

A technology and media investor himself, he has a long track record of successful entrepreneurship initiative.

He is the main force behind the creation and application of Genesis Investing System.

Headquartered in New York City, Genesis Investing is often considered synonymous with the concept of equal opportunity.

The website claims that you do not need a lot of money to join this program.

That in my book will be quite a departure from standard programs.

Most other available investment programs are very cost-intensive.

Unless you are sitting on pots of money, it is no point trying them.

But then that raises some questions about the Genesis Investing operation model.

How can you even book profit with $100 when others are demanding thousands of dollars in one go.

For starters, this is a very well-structured formula.

Those interested will have to follow the procedure step by step for maximum gains.

For best results, candidates have to follow the procedure very closely.

The claim is if you follow every step carefully, you can surely earn 3x profit every month.

But that’s not all yet.

The deal clincher with regards to Genesis Investing is its accessibility.

You do not have to be an entrepreneur to capitalize on it.

Even if you do not have any entrepreneurial skills, you can still take advantage of it.

Genesis Investing System claims to sort out the issue for you in some simple steps.

According to them, the divide between success and failure is just one investment.

They make sure that you experience entrepreneurial success with them.

They claim to make 100% profit a reality.

What Is the Jobs Act & Its Impact on Entrepreneurship

Often when you read about Genesis Investing, you also find reference to the Jobs Act.

The association is that Jobs Act undeniably eased entrepreneurship processes to an extent.

It is said to be the key triggers for the success of investment programs like Genesis.

The JOBS Act was Obama’s initiative to pull US economy from the throes of the economic slowdown.

This bill enables startups to expand, hire and grow their business with relative ease.

It refers to start-ups as emerging growth companies.

It facilitates easy online funding for these companies that are keen to chart new ground.

Genesis uses the provisions to create a funding model like Kickstarter to address capital raising initiatives.

The best part of the deal is that the law enables the sale of shares worth $50 million before needing SEC registration.

That essentially implies a relatively faster and more effective funding module.

Even the upper limit for a total number of shareholders has been doubled to 1000.

That further enhances the prospect of more effective crowdfunding and attracting a greater milieu of people.

So, for those, who are willing to think big and take the risk, this Act facilitates a relatively easier passage for them.

It is about giving wings to your fantasy and creating successful models with it.

The core idea is about establishing successful business models that do not compromise growth.

It is about enabling a solid foundation and strong funding proposition for many interested players.

Most celebrated and famous entrepreneurs welcomed the Act to revive the economy.

It undeniably puts entrepreneurship on the fast track and creates better growth prospects.

The role of this Act in capital formation has been lauded by all and sundry.

As a result, Genesis Investing got a positive response.

The Genesis Investing Course Structure

So now we come to the juncture where we need to study the course structure thoroughly.

The Genesis Investing System insists on a step by step procedure.

That necessitates a close study of the overall Genesis Investing model.

Let us clarify some basics first.

There is no connection between Genesis Investing and stock market investment.

So then you can easily subtract the uncertainty element from your investment.

As it is not connected with the market forces in any form whatsoever.

The system as per experts is relatively simple and easy to follow.

That is what makes it very lucrative for most who opt for this service.

The new JOBS Act has further facilitated easier and worthwhile opportunities in this segment.

The entire exercise is divided into capsules helping you learn how to invest in startups and earn the profit.

The main idea is you can realize these exorbitant gains only if you get in really early.

The key component of this course includes

1. The Early Stage

It is primarily an online interactive course.

It is practically the made easy for everything about how to invest in markets.

You get a first-hand knowledge of risk reduction techniques and how to look for revolutionary ideas.

2. The Investment Approach

Genesis Investing System empowers you with the right knowledge base and approach.

Tiny little startups aren’t your only hope.

You can also offer later stage investments in companies.

That surely reduces the risk involved.

3. The Bond Market

It also helps you in exploring investment destinations like bond market.

You can take advantage of the superior returns in this market with Genesis Investing System

4. The Checklist

It also offers information about potential companies you may want to invest in.

5. Real Examples

The capsules also comprise of real examples to help investors.

How Genesis Investing System Works

The core issue still remains unanswered.

We do understand that the Genesis Investing System is an interactive online course.

It trains you how to be an early stage or later stage investor.

But the point is how they undertake the entire operation.

That is key in deciding the extent of long-standing gains you can derive.

As per the Genesis Investing System website and user reviews, they work in a simple 3-step plan.

This 3-step plan is also known as the ASE plan.

1. A stands for Allocate

You get information about the fund allocation you must undertake in the initial stages

Learn the basics of allocating money and looking for fund allocation targets.

2. S stands for Screen

You get expert guidance on how to look for risky bets.

You can pick out the riskiest bets among them and terminate these if necessary.

By the end of this stage, you also achieve a certain mastery on target selection.

You are able to identify companies that can offer you a decent chance for success.

3. E stands for evaluate

E is the last stage of this 3-step process.

Needless to mention, it is one of the most important steps too.

You cannot overlook this step at any cost.

You learn to evaluate the companies and identify the potential winners.

This is that step which helps you get an edge to earn rich rewards.

Therefore if you notice, these steps per se are not problematic.

They imply that making money is a slow and steady process.

Investors need to have patience and gradually collate their gains.

There is no promise of huge returns overnight anywhere.

Most times it is a well-calibrated game plan.

In a systematic and step by step process, you learn to earn money.

The Pros involved In Associating with Genesis Investing System

Like all investment targets, there are two sides of the same coin.

This is true about Genesis Investing System too.

Most user reviews indicate that there are some distinct pros and cons of this investment.

I cannot believe that it is an absolute miracle plan like some suggest.

At the same time, this plan does not come across as a villainous scam some others believe it to be.

Instead of aligning with any specific group, we decided to undertake our own unbiased study of all the feature.

Here is a quick lowdown on the primary positives of Genesis Investing System:

1. Uncomplicated Course

This is a rather simple and straightforward interactive online course.

The instruction methodology is fairly self-sufficient and focuses primarily on investor interest.

It is easy and interesting in the way it is structured.

That also makes it a rather fun course to follow.

2. Comprehensive

The course structure is fairly broad-based and comprehensive.

In true Genesis Investing style, it meticulously covers every single element associated with effective investing.

3. Low Budget

This is a fairly low budget training course.

In fact, despite the smaller pricing rate, it offers a comprehensive structure.

Moreover, it promises you earnings in millions once the course is done.

4. Well Researched

One of the primary reasons for this is the years of research that has gone into making it.

Genesis Investing System is not your typical fly by night operator.

Decades of studies have gone in finalizing the content.

That gives it a definitive edge over peers.

5. Enhanced Accessibility

One of the biggest advantages is that you get immediate access to key target investments.

So you can straight away make some investments and check.

That will help you give a real-time perspective on the product.

The Cons involved In Associating with Genesis Investing System

So, on the whole, when you look at Genesis Investing System, it comes across a fair and constructive program.

Yet not all reviews are positive.

There are many which have raised the red flag on the concept.

Before we form an opinion, it is important to weigh this aspect as well.

This will help broaden the prospects and clarify the basics.

Most importantly it will help give a proper direction to your investment outlook.

It will help sharpen your instincts as an investor too.

1. Why So Many Negative Reviews

A quick search with just the words Genesis Investing System offers scary results.

Almost 90% of the screen comprises of negative reviews.

Some of the reviewers also address it as a potential scam.

While there is no reason to call it so, it is difficult to ignore all the negative reviews.

Something is surely wrong with the system to attract this type of continuous and alarming reviews.

2. Nature Of Investing Risky

Let us face the basic truth about Genesis Investing.

This is not all that simple as it sounds.

After all, your money is at stake.

This is, after all, a risky proposition.

Investing in start-ups can never be simple.

It is an extremely dynamic sector, and you can never foretell the future with certainty.

3. Why Not Follow A Regular Academic Course

If academic education can provide you with such precise knowledge, won’t all MBAs be successful businesspersons?

Per se, this is after all only a well-designed and meticulously structure online course.

Does that justify this kind of spending?

4. No Benefit Of Regular Returns

Though the extent of return may be higher, there is no guarantee.

Comparatively, it is always better to go for the certainty of lower returns from conventional investment sources.

Conclusion

Therefore, the question now is do we vote for Genesis Investing System or we don’t?

Well, the answer cannot be a straightforward yes or no in this case.

The world of investment is quite complicated and why not try something that offers this types of straightforward gains.

But the first question that comes to my mind is why the website is so bereft of testimonials.

The Crowdability website has many instances of quotes from experts but no actual testimonial.

A training capsule where real examples are such an important part of the training methodology, why isn’t their more ways to connect with the actual beneficiaries?

That strikes me as really odd.

So we tracked down individual user testimonials.

The Genesis Investing System is certainly unique in many possible ways.

It gives you well-structured and properly researched information base to get an edge.

But then are you prepared to leave the comfort of steady regular returns?

You cannot undermine the impact this can have in the current regulatory climate.

With the JOBS Act in place, the investment regulation has certainly eased for start-ups.

But investments here is still in unchartered territory.

I am not entirely convinced that Genesis Investing System will be your best guide to navigate through this uncertainty.

If you pay closer attention to the marketing peg and promotional, the bias is clear.

There is a clear targeting of newcomers in the market.

Crowdability seems keen on attracting people who have no experience in investing.

The question is will it actually help?

Well, it is at least low priced.

If you are that keen about trying it out, the relative risk is much lower.

But at the same time, Genesis Investing System does not get a clean chit.

I will still consider Genesis Investing a high-risk proposition.

Basics of Investing in Stocks

If you are keen to know on investing in stocks, it is imperative to know the basics.

If you are not aware of the basics of investing in stocks, it can rather be a challenging task.

All the live market commentary on business channels or the business pages may appear like gibberish to you.

The market is a complicated animal.

The stocks, their journey, the price swings all form a confusing labyrinth.

For effective investing in stocks, you have to learn how to break it best.

This is where an active understanding of the basics help.

Investing in StocksWhether you switch on the TV or read the newspaper, they talk about markets with the ease of reciting rhymes.

Terms like earnings momentum, support, and resistance are thrown around like it is common knowledge.

This is what confuses the average investor the most.

The problem is that most of us know that investing in stocks yield high returns, but we have never bothered with basics.

As they say, the devil is always in the details.

If you do not pay enough attention, the stock market can actually overwhelm you with its intricacies.

So here is a quick lowdown on the overall basics of investing in stocks.

From the important terminology that you must pay attention to the kind of trades you undertake, there are many details.

This is also aimed at helping you grasp the basic concepts of investing.

The idea is to empower investors with knowledge and create an appropriate channel of communication.

The effort is to help you undertake smart trades with assured returns over an extended period.

You are exposed to the stocks in every possible way even if you are not trading directly.

So this quick guide will help you book profit like professionals with your investments.

What Are Stocks and a Stock Market?

Before we delve any further into the basics of investing in stocks, it is essential to understand what stocks are?

That will also help us in the next step of investing in them.

Stocks are also known as equities and are issued by companies.

The primary aim is to raise capital by selling these shares.

These stocks offer a certain amount of ownership in a company.

But this does not mean you have any control of the assets of the company.

You get a right to attend shareholder’s meet, get dividends and sell it if you want capital.

So in many ways, the shares help you channelize your savings in the stock market.

The value of these shares or stocks keeps rising or falling as per market dynamics.

Individuals can gain or lose money on the basis of the position they have in the stock market.

So what is the stock market?

Well, this is a marketplace where many stocks are traded.

The stock market is mostly driven by the complex demand-supply matrix.

You have a group of interested buyers and sellers who huddle together.

There is one party who is interested to sell and other wants to buy.

There is no limit to how much an individual can buy or sell.

However, they will have to make do with whatever is available in the market.

Some pre-determined amount of stocks is available in the market.

All the trading happens with this amount.

If supply is more and the demand less, the prices will fall.

The opposite happens when demand for these rise above supply.

The price is, therefore, constantly moving.

That is exactly how the trading proceeds in the stock market.

This is undeniably the basic premise of most stock investment.

How Does Trading Happen?

If you are interested in investing in stocks, you have to understand the trading.

Though the broad principle is interplay of demand and supply, it is not all.

The actual trading process is slightly more complicated.

You have to understand that the stock market is actually the secondary markets.

Individual stock owners and interested buyers get together to transact in stocks.

You have to remember the actual company to which the stock belongs is not undertaking any buying.

The buyers and sellers invest in it independently in the hope of higher return.

The first stock markets can be traced back to 16-17th centuries in Europe.

But at that time you did not have so many listed companies.

These exchanges at that time thrived primarily in key cities and hubs like London, Antwerp and Amsterdam.

Though the stock exchanges in US are in prominence today, they came into being only towards late 18th century.

The most famous one, NYSE was established in 1792.

That can also be considered as the start of the modern stock trading traditions.

That also meant the introduction of rules and regulation to monitor the trade.

Regulations became a necessity to undertake modern stock trading.

This is what made investing in stocks a fairly reliable affair.

It brought in relative transparency in the whole deal and created a conducive condition for active exchange.

It created a fair pricing atmosphere and encouraged investors to put their money in stocks.

The Dow Jones and S&P 500 are among the most well-known Indices in the stock market.

Most times, when we are talking of markets hitting a key level, it is actually these indices breaching those levels.

They are a collection of some key stocks.

They act as an important benchmark for the market.

Difference Between Investment & Speculation

Now when you get down to actual trade, there are two types of positions.

You can either be investing in stocks or speculating in it.

On an average, speculators are seasoned market players.

They also, at times, have access to inside information.

As the term indicates, speculation is generally taking a guess about where prices may head next.

They then place bets on the basis of that guesswork.

Here the ultimate idea is not to seek intrinsic value, but take advantage of quick price appreciation.

The intent and the objective, in this case, is primarily the quick appreciation.

Investing in stocks is a different ball game.

In this case, investors undertake proper analysis, fundamental or technical.

On the basis of that, the price trend is decided then.

So if the expectation is that the stock will rise further, investors will take a position and wait for the gains.

If the stock price is expected to slip, investors may short it or even wait for the better entry point.

So the fundamental difference between the two approaches is the objective behind it.

The first one tries to cash in on the price differential on the basis of some inside information.

But in case you are investing in stocks, it is a well calculated and gradual process.

There is a gradual and well-calculated decision making at play.

The core idea is to make sure that you do not lose money and choose stocks wisely.

The investors want to optimize the value of every penny they are investing in the market.

The primary intention is to take advantage of the higher returns that the stock promises.

This is how they want to increase the money they are investing in the market.

So it helps generate higher returns on investment.

How to Value Stocks

So when you plan on investing in stocks, you must know how to value stocks.

This is one of the basics that you have to be aware of.

Otherwise, it may be difficult to ascertain whether a stock is fair priced or expensively priced.

Even in terms of deciding on entry points in the market, it is difficult without adequate knowledge about stock valuation.

But the question now is how you ascertain this value?

What will be the basis on which you determine a stock’s worth?

Well, primarily this is a function of the supply-demand matrix.

So the market helps determine the stock price.

For example, if the stock is trading at $50 right now and the fair value is $100, it may be worth buying.

But conversely, if the fair value is seen around $30, investors may avoid it.

But the question here is who decided the fair value of the stock?

Did the company decide it or the investors?

Was it a corporate call or a speculative stance?

Well, if you ask analysts, there are many ways to calculate this value.

One simple method is to take into the overall business in consideration.

You combine the value of assets and deduct the depreciation and loans.

The other is, of course, taking into consideration the projected earnings estimates.

You can determine the value on the basis of both of these factors or devise your unique way to.

But remember, a stock’s value does not fall or rise overnight.

Both the upward movement and the down move are gradual and steady.

So, an alert investor will look for the warning signs and act appropriately.

This is what will help them stay ahead of the curve.

This will also help you realize better value.

How to Read Stock Quote?

This is another important basics of investing in stocks.

Valuing the stocks is worthwhile only when you are able to read the quotes appropriately.

Reading stock quotes appropriately is more of practice and effective application.

Apart from the stock name and symbol on the exchanges, there are several other elements too.

1. Name

This is fairly straightforward.

The name of the company to which the stock belongs is spelled out completely or abbreviated.

2. Symbol

Every stock trades with a specific symbol on the exchanges.

It is its unique identity on the bourses and referred to by that only.

For example, the symbol for Amazon on NYSE is AMZN

3. 52W High & Low

The 52-week high and low prices are key indicators of the trend in the stock.

4. Intra-day High & Low

This lists out the highest & the lowest points the prices touched during any trading session.

5. Dividend

If the share issues dividend, this gives you the annual dividend you can expect.

In case this area is empty, it means that the company does not issue the dividend to its shareholders.

6. Price-Earnings Ratio

This is a key valuation metrics.

It gives investors an idea about the stock’s worth going forward.

7. Current Market Price

This is, of course, the simplest of the lot.

It gives you an idea of the current price at which the stock is trading.

8. Closing Price

This mentions the closing price for any given session.

What Is a Bull & Bear Market?

When you plan to invest in stocks, there are few more basics that you must get clarity on.

It is with regards to the trend in the market.

When you assign the value to a stock, this is also a very important consideration.

This is ultimately what goes on to decide the bull and bear market.

The final value of the stock is closely linked to this key element.

Imagine a bull charge, it is fierce focused and keeps moving forward.

Now when the same thing happens in the stock market, it is referred to as the bull market.

This is generally a phase of upward movement in the stocks.

The prices are rising, the investor sentiment is buoyant, and almost everyone is awaiting the next level.

The bull phase is generally accompanied by strong economic growth too.

That also, in many ways, helps maintain the positive momentum on the street.

In case of a bear market, the stock prices are seen falling.

Typically the bear analogy is more with respect to the fear that it generates in the market.

There is that blood-chilling fear of more losses coming your way.

The good news for investors though is that the bull phase typically last longer than the bear markets.

Recent investors may have all heard about the bear market, but they have not really experienced it.

On the other hand, we are already in the grip of 2 consecutive bull charge in a matter of 20 years.

Even if you see the Index value, they have yielded significantly higher returns over the longer term.

There is hardly an example of Index declining in value over a 15-20 year period.

But both the bull and bear phases are cyclical in nature.

One follows the other over the longer term.

Crash vs Correction

Even though you may not have frequent bear phases, a correction in the market is not unheard of.

In case the stock prices have seen a huge run-up, there can be short phases of correction.

The term correction means a phase where valuations calibrate.

This is more like an adjustment.

Often the Indices undergo several rounds of correction before they rise to the next level.

This is how the terms like support and resistance came into existence.

They are the levels where an Index or a stock may experience support or resistance.

Once the particular security has tested these levels, it prepares for the next level of upward r downward movement.

As a result, correction can be applied to both price appreciation and depreciation.

Supposing the stock is overvalued, it corrects and slips to lower fair value levels.

But if the stock is undervalued, it will rise to fair value levels.

That means it is about any small or significant change in stock prices to maintain a balance.

The market establishes order with the help of the market forces.

That action is referred to as correction of stock valuation.

But the crash is something quite different.

It is dramatic, deep set and often leaves investors scarred for generations.

Imagine two cars crashing!

Well, that is pretty much how the emotions pan out in a market crash.

The market devalues sharply and suddenly.

The extent of a crash can be anywhere between 10-20%.

At times, it can be even higher like 1987, the markets crashed 23%.

I am sure you remember the most recent crash in 2008.

The Dow slumped a whopping 500 point in a single trading session

Sometimes these severe crash in market levels starts off bear phases.

The triggers for the crash can be varied.

Conclusion

Therefore, the basics of investing in stocks are primarily about creating awareness about the various market elements.

You may have heard that investing in stocks can be very rewarding.

But that is only possible when you get the market basics right.

These stocks basics create the foundation for a meaningful investment opportunity.

This is exactly why mastering the basics of investing in stocks is the first step towards a financially enriching career.

Is Investing in Utilities Profitable?

Investing in utilities is always a debatable matter.

There are some who believe that investing in these can yield best long-term results.

But many others feel there are many reasons for not investing in utilities.

In fact, the utility sector has many dimensions associated with it.

Some see it as pure dividend plays.

Others don’t want to risk the Government role in this.

For some, the Government’s association is a major reason why they want to invest in it.

As the name indicates, the utilities sector provides some or other form of utility products like electricity, water or gas.

Investing in UtilitiesThis essentially means that demand for these products will remain a constant.

But then, there is also the prospect of renewable energies replacing traditional utility products.

Well, all that is in the realm of possibilities.

That said, you cannot deny the fact the utilities do come across as an attractive investment zone.

There are many who look at this sector as an attractive defensive play for the long-term.

However, some groups of investors are still confused.

They are unable to assess if investing in utilities will be profitable.

Well, it totally depends on your investment objective.

Different types of investors have different kinds of expectations from the market.

The idea is how best they can apply the market forces to realize their objective.

After all, the utilities firms have some unique challenges too.

Most of them have a heavy debt component also.

This is because they involve large projects with mega investments.

So when you are investing in these, you will have to pay attention to all these factors.

We decided to unlock the intrinsic value in the utilities sector and the associated risk.

This will help you take a conclusive call.

Understanding the Utilities

The first step in analyzing investing in utilities is knowing the sector in details.

As we mentioned, utilities are primarily infrastructure plays.

They comprise of a variety of useful services that are indispensable for our day to day lives.

They involve the likes of gas, power and water.

More often than not the utilities are integrated plays.

By this, I mean that they do not just cater to one isolated aspect of a sector.

They are by far the most impactful infrastructure plays with massive investment.

As a result, these sectors are also the ones that involve a high degree of debt.

Typically most of these stocks have a high debt-equity ratio as well as well spread out capex plans.

Along with the capital expenditure involved, you will have to account for the cashflow levels here.

While normal business fundamentals can be applied, the readings are distinctly different for utilities.

For example, a high debt-equity ratio is a major red flag for most businesses.

But when you compare the utilities, it is almost the norm in most cases.

Given the extent of capital expenditure that they have, they generally have major debt too.

As a result of these huge debts, they are also susceptible to changes in the interest rate scenario.

So, many factors may impact the overall growth and investment in this sector.

Rising interest rates and declining rates have different types of impacts on these stocks.

If you are investing in utilities, you will have to take a constructive view on rate outlook as well.

The rate of interest also impacts the overall cost of capital.

So it becomes necessary to condition and moderate your investments accordingly.

Government policies also have a major impact on utilities.

Assessing Debt in Utilities

Therefore, the debt level is a key element to track while investing in utilities.

The continuous fund flow is a cardinal necessity for most utilities companies.

Upgrades and maintenance are an inevitable part of their growth structure.

All of these are incredibly capital intensive and need sufficient amount of funding.

The funds generated from revenue earned can fulfill only part of the deal.

Most of these basic amenities provider are heavy dividend payers too.

While some experts may scoff at the idea, for investors this is a key reason why they buy into these stocks.

So it goes without saying that they have to depend heavily on external sources for capex.

The debt, as a result, is an inevitability that you cannot deny.

Now if the loans are borrowed at higher rates, the interest outgo is also higher.

So, this directly affects the fund flows of the company.

The ratio of cash inflow and outflow is crucial.

The moreover higher rate of interest also results in the higher extent of debt.

If the debt-equity ratio is too steep, this will also affect the overall credit ratings of the company.

The extent of leverage also increases to an undue extent.

This is why monitoring the debt levels in utilities is crucial for investing in these.

It also affects the overall cost of operation in a significant manner.

The cost of operation is a crucial factor in determining the profitability too.

Ultimately, this is a stock and a thriving business.

If profits decline in, the relative reason for investment decreases.

This can then affect the demand for the stocks.

It can also affect the extent of dividend payout.

If there is severe cash crunch, there won’t be an adequate amount to pay the dividend.

That can again be a matter of concern.

Gauging Consumer Response to Utilities

When you are analyzing utilities, it is also important to assess the relative demand.

As you already understand, utilities have a cash-intensive business.

This means, whatever loans they may apply for, their intrinsic revenue generation has to be sizeable.

Without proper revenues, they cannot get loans for an extended period either.

The problem here is getting brand loyalty is difficult in this case.

That makes projections also difficult.

Most states allow consumers to switch from one provider to another.

Consumers tend to choose utilizes providers who charge the least.

As a result of it, if a utilities provider prices their product too high, they may end up losing market share.

Often high-priced utilities have to bite the dust.

Even if the cost of operation rises, they will have to follow the pre-determined contract terms.

That means they will have to sell their product at a lower rate.

This hurts profitability directly.

Now when you are investing in utilities, you will have to pay attention to these details.

In this context, utilities have benefited significantly from the current low-interest rate regime.

After the 2008 bloodbath, interest rates have been low globally.

This has impacted the utilities favorably.

The cost of loans have been much cheaper, and this ensured that dividend payment remained on track.

This means many conservative investors started betting on these utilities stocks more than safe haven like bonds.

The result, they got higher returns and additional savings.

The growth in housing sector also impacts the growth of utilities.

More houses will mean more demand for electricity and water.

That will surely enhance demand for these utilities and investors will start investing.

This will in turn spur profitability and better growth.

That will also create more demand for utilities stock in the market.

Advantages of Investing in Utilities

That brings us to a crucial point of discussion on the issue.

Is investing in utilities profitable?

What are the advantages of investing in utilities?

Somehow, that is the most important factor that decides the merit of any investment.

One thing that comes upfront is, of course, the regular dose of dividends.

Almost 50% of the investors I have asked or discussed have highlighted their bias towards the dividend.

The dividend flow is a big incentive for most market investors.

This is, at any point of time, a scope for double payment.

But apart from the hefty dividend in question, there are some other distinct advantages too.

Utilities are also considered crucial defensive bets too.

They help provide slow and steady returns over an extended period.

So for many, they are the crucial stabilizing factors in their portfolio.

They invest in these stocks and just keep enjoying the perks year after year.

Most times, the price appreciation in these stocks is a lengthy affair.

It does not happen overnight.

Most times, the process is gradual, and the increase is incremental.

So when you buy utilities, do not expect striking returns in 2 months.

But over 5-6 years, you can expect sterling growth that adds to your bottom line considerably.

They are therefore also the income generating investments in your portfolio.

They do not just promise growth but steady income source too.

Their stability also makes them safe bets in times of economic turmoil.

They represent fundamental growth.

So even if there is a slowdown, people will continue needing utilities.

As a result, the demand cycle remains robust.

This factor also makes them popular safe haven bets.

Investors turn to these stocks when the market situation may be slippery or tricky.

The dividends compensate for the lower stock price.

Problems with Utilities Investment

That brings us to the other end of the spectrum.

What are the downsides of investing in utilities?

This is also a very relevant consideration.

Remember, it is never a good idea to invest in any stock without assessing the risk.

Government policies and regulations are by far one of the biggest risks involved.

A Sudden change in regulations may result in the massive recalibration of details.

Or the introduction of new norms will involve a large amount of fresh investment.

For example, the government may pass a new green regulation.

So projects that are established before it will have to recalibrate their business model now.

They will have to make fresh provisions for these new rules.

Economic growth and changing interest rate situation is the other key risk.

It dictates everything from commissioning of new projects to the availability of loans.

Even the cost of loans, operational expenses, and all other related expenses are the function of economic situation.

Higher cost or loans can erode growth momentum to a large extent.

In many ways, it puts a brake on the overall growth perspective.

Pricing is another key risk for utilities.

So when you are investing in this sector, you need to be mindful of the prices.

Whether you like it or not, the dividend is the single most important reason why investors put their money in utilities.

Historical reports indicate that there are many utilities world over that have reduced their dividend.

The rising interest and the work with regards to renewable energy is another key risk.

Estimates peg that renewable energy may address demand for as much as 80% of the market by 2050.

Therefore that may be a risk for conventional sources.

That means the growth project for current conventional opportunities may be fairly muted.

This may also eat into their business going forward.

Top Strategies for Investing in Utilities

If you want to understand if investing in utilities is profitable, the strategies that you are employing are important.

The strategies that you may use often dictate the kind of profit that you may earn.

So the question is what types of strategies should you go for?

Let us first get one aspect very clear.

Investing in utilities is primarily about betting on the defensive sector.

By defensives, I am referring to the relative calm and peace that reigns here.

Unlike many other stocks, this sector is never too volatile.

If economic conditions are good, people will splurge on comfort and luxury items.

They will buy appliances like a brand new AC, heating system and the like.

This will result in great utilization of utilities.

But let us say that economy may take a turn for the worse.

The economy starts deteriorating, but you are still going to need heat and electricity.

So, their revenues will remain more or less similar.

That way, the economic upheavals do not have a huge impact on the price outlook.

The revenue and the earning both remain stable to a large extent.

This stability often helps these utilities to clock in sharp returns.

Whether you are trading in bullish conditions or bearish markets, the utilities are a good bet.

One of the best strategies is to bet on the longer term.

You can look at putting money here when rest of the market is struggling.

Moreover, the dividends add to the overall income from the stock.

So that, by all means, becomes one of the most pointed and focused strategies.

It helps you preserve capital, limit losses and weather volatility all at once.

Despite that, you can be confident about maintaining the core profit margin.

The Growth Rate in the Utilities Sector

Now we must also assess the relative growth rate in the utilities sector.

That will help you to decide whether you can churn out profits and how much you must invest in these.

The EPS and the revenue rate are the key factors to watch out for.

As these are largely controlled by the government, the regulations play a crucial role in their growth.

Utilities cannot raise the price of their products on their own.

They need the Government’s nod on it first.

So investors typically assess the growth in utilities on the basis of the historical EPS growth and future projections.

The annual growth over the past 5 years has been hovering around the 13% number.

The average earnings per share in the same period is closer to 4%.

While you are assessing growth in utilities you have to also consider their monopoly status.

These utilities incur a large amount of cash expenses upfront.

But the relatively stable price movement and scope for margins come to its rescue.

That enables the companies to offset the higher initial prices.

That said you must also track the 10-year and 20-year growth outlook

This will give you a realistic picture of the basic growth outlook.

Conclusion

Therefore, if you are interested in analyzing if investing in utilities is profitable, you have to set your objectives.

What is the kind of stock you are investing in and how much returns you are expecting?

The time duration of your investment is very important.

There are many types of utilities you can choose from.

Remember to choose the option that best suits your requirements.

Last but not the least, the dividend outlook utilities is also very important.

All in all, you must choose options that best satisfy all these points in a comprehensive manner.

That will help you realize profits when you are investing in utilities.

Is Robinhood Investing App for You?

The Robinhood investing app is undeniably one of the most talked about investment platforms.

Whether you are a beginner or veteran, it has something to offer for everyone.

Perhaps the most talked about feature is the zero commission per trade.

Unlike a lot of other options, it is not just a promise to woo customers.

There are no hidden charges or pre-condition.

You don’t even need a minimum balance to take advantage of the trading discount.

This is a specialized and discounted online brokerage platform developed specially for those not so confident to take on the market.

Somehow the mention of the name Robinhood stirs up images of one of the best known Samaritans of the modern world.

Robinhood Investing AppThe iconic Robinhood, who stole from the rich and gave away to the poor.

Well, don’t be alarmed now!

This app will not teach you how to steal from the markets.

But it surely does empower you with knowledge and understanding to make your mark in the market.

If you are new to the market, there is nothing to worry.

Robinhood will guide you through the nooks and crannies of the market and ensure profitability.

This is all about empowering average investors to make it big in the stock markets.

Whether you are looking at stocks, ETFs or what have you, Robinhood is there to serve all your needs.

But it is still a largely mobile based brokerage firm.

That is how they manage to keep a tab on the relative cost factor.

They do not have overhead expenses for managing expensive offices.

That leads to a huge saving, and that directly translates into lower expenses for customers who use the service.

But is the Robinhood investing app appropriate for you?

Here is a quick review.

Tracking the Robinhood Investing App Story

A quick search on the internet will tell you all about how Robinhood helps you trade for free.

The company does not charge any trading fee for stock trading, we all know about it.

This is essentially a venture-backed brokerage with an online presence.

Founded in 2013, they have raised more than $175 million so far.

It is as best described as a 0 commission trade no frills investing app.

The whole trading experience is streamlined to support the 0 commission promise.

The founders, Vlad Tenev & Baiju Bhatt focused primarily on a low-cost trading module.

But that has often raised concerns about efficiency and safety.

Like all other investing apps, Robinhood too is a SEC regulated option.

But the reality is starting an investment business from the scratch can be an expensive affair.

The reason why Robinhood manages is through a system of effective omission of many features.

It offers buying opportunity for listed securities like Apple and Amazon.

It also has a stop loss and limit order options, but in comparison to a full-service broker, there are many elements missing.

The core structure is intact, but it’s overall advanced order offerings are limited.

The idea is that these are expensive and used by limited investors.

A majority of their customers still comprise of those who undertake only basic trading.

It does not offer IRAs, DRIPS or other related banking services.

So in many ways, it is not a full-service brokerage.

Imagine it to a no-frill bank account.

You can open an account and withdraw money, but you do not have access to credit cards, debit cards or other amenities.

The same can be said about the Robinhood platform.

The main focus is providing a cheap and convenient trading experience to investors.

The Value for Money Perspective

The Robinhood investing app champions the cause of low priced value-based investment.

They keep the investing app as lean as possible.

That means that you get the maximum monetary advantage while you are investing in them.

It brings about a clearly well-structured margin based concept that is also easy on the pocket.

The final objective is offering the cheapest possible trading service to investors.

Though the range of options is narrow, you get a set of focused securities to invest in.

The app is mainly based on stock and ETF investment.

They do not charge commission on in-application trades.

Moreover, they have also tweaked the conventional margin framework.

This has helped users in clocking better profit and spending less for investments.

So users don’t have to pay any kind of annual interest rate.

This is, in fact, the most confusing element for new investors.

It is at time so overwhelming that it impacts their trading decisions too.

Instead, the Robinhood investing app has broken down the annual rate to monthly fees.

That too the monthly fees is a flat rate determined on the basis of the total equity in the account and money borrowed.

So this is one of the key factors that encourage small investors to take loans at times.

The loans are also offered in a tiered structure.

So the margins on the loans are much smaller than the conventional one.

As a result, their margin rates are amongst the most competitive ones in the market.

The ultimate objective is to keep the cost as minimum as possible.

This gives confidence to a lot small and new investors to take the plunge in the market.

They are filled with a sense of confidence in terms of approaching the market and locking gains.

Analyzing the Robinhood Fee Structure

The first aspect that deserves attention is, therefore, the Robinhood Fee Structure.

You have to give it to the company for keeping its promise of stock trading at 0 cost.

Traders also do not have to maintain a minimum account balance.

Instead, it is looking at a series of other conventional and not so conventional methods to realize revenue.

The Robinhood Gold is one such initiative to cover the cost.

It primarily is a high-end margin service.

The pricing depends on how much margin the customer is looking to garner.

At the lower end of the spectrum, investors have to shell out $6 every month.

This enables them to use as much as $1,000 margin.

This, therefore, gives them a far greater buying power than relying on sheer cash balance.

But the fees charged for the margin trading facilities is little different from how other brokers operate.

This is what makes this margin trade a profitable and revenue generating venture for them.

This online investing app also enables immediate fund transfer facilities.

Normally the funds are processed in three days in conventional Robinhood accounts.

But in case of Robinhood gold, you can take advantage of it almost immediately.

You can start using it almost as soon it is deposited.

But you must remember Robinhood operates in an eco-system that has Merrill Edge, Fidelity and Charles Schwab.

Not only are these more established names but they are also full-service brokers.

Therefore Robinhood may not be their first choice in any case.

The target audience for this investing app is predominantly beginners and those new to investing.

They are afraid to commit a lot of cash.

The gamut of trading options may also overwhelm them.

So Robinhood offers them a straightforward and rather inexpensive trading option.

Championing Straightforward Investing

Robinhood may be a no frill investing app.

It charges 0 fees for trading and as a result has to make do with some facilities of a full-service broker.

But that does not mean that the users are left high and dry in terms of efficiency.

It is all about keeping your trade simple and effective.

That ensures that appeal and demand for this continue despite some obvious misses.

These features play an important role in keeping the broad demand cycle for Robinhood investing app intact.

So if you rely heavily on market data or want all your trading tools in one place, this is not for you.

This is not the ideal platform for those looking to day trade or data seekers.

Your research and backtesting facilities too are nearly absent in this.

There are some special cases in which day trading is allowed.

If you have about $25000 in your account, you can go ahead and day trade.

The list of features in this investing app is directed entirely to new users.

It is about how you can start trading without investing a whole lot of money and resources.

Research is one aspect that is severely lacking in this investing app.

Beginners also need a significant research at times to get started.

They have to understand the sectors they can start with.

But all of this information has to be sourced from other research apps or websites.

But this app has a unique built-in consumer protection system.

This enables new and inexperienced investors to avoid risky investments.

But this same protection system may be a bad idea for those who want to trade the volatility and price swing.

So the investment objective plays a crucial role in deciding for or against this app.

 Mobile Trading App No Desktop Presence

The Robinhood investing app is a primarily mobile app.

They do not have any desktop presence.

The app works equally effectively on Android and iOS systems.

So whatever phone you may have, this app will run efficiently on it.

The mobile app has a simple and easy to use interface.

That means it is extremely intuitive and enhances the overall trading abilities.

It is convenient and user-friendly.

But if you want to catch up on any news based triggers or stock tips, you have to look for other avenues.

But then again the fact that it is simple to use means a great percentage of new users can access it easily.

They will not face any problem in learning to navigate through this.

The process of logging in, opening a new account and new trading is spelt out.

That means even if this is the first time that you are setting up an app, it should not pose any problem for you.

There are step by step instructions that simplify the complex trading processes.

All kind of help matter and customer convenience matters are just a click away.

That means if you get stuck mid-way, help is just a few clicks away.

You even have the option of transferring stocks from a separate brokerage account to Robinhood.

To maintain a regular flow of funds in your account, you can also link it to a recurring deposit.

You can log on to the app quite simply using your fingerprint after setting up the initial account.

Though this is a minor feature, it can often be a great advantage in enabling faster trades.

Speed is primary for executing effective and profitable trade at times.

This also ensures a higher degree of security for the users.

What’s not so great about Robinhood Investing App?

The simplicity of the Robinhood investing app is considered to be its biggest advantage.

This is what has made the investing app extremely approachable and opens up many opportunities.

But the same simplicity is often a hindrance for many looking to take advantage of zero trading fees.

The complete lack of any research tool is a limiting factor for advanced traders.

They normally trade stocks on the go as soon as there is news trigger.

If they used Robinhood investing app, they have to rely on other sources for getting the same news.

Compared to a host of investing apps that offer a one-stop destination for all services, this becomes a limiting factor.

Traders who use this investing app are therefore unable to capitalize on advanced strategies.

This app is still very basin in terms of its service offerings.

Though the Robinhood Gold seeks to offer some redressal on this issue, the question is this sufficient?

The premium segment that the Robinhood Gold is targeting has a host of full-service brokers with equally effective online and mobile apps.

The point is how wise it will be to compromise the comfort of all information in one go compared to cheap trading.

The incremental costs involved in using the Robinhood investing app also need to be considered.

It is never about just one factor affecting the cost.

The amount of expenses involved in opting for this and many other supporting apps has to be calculated.

You cannot look at the Robinhood investing app in isolation.

You have to look at the entire ecosystem in totality and that is where there are some serious pockets of concern.

Customer Support System

But one area that is not a major concern is undeniably the customer support system.

Users can get in touch with the company in multiple ways.

You can call them, email them or even tweet to them.

But remember none of them is a 24×7 service.

The customer services are only available during the market hours.

If you are ready to pay an additional fee, the Robinhood team also connects you with a broker for guided trading.

You can also seek assistance from Robinhood on the social media.

They have a Facebook and Google+ page that is updated regularly.

They also have a Linkedin presence.

That means all and all the Robinhood Investing App has a satisfactory customer support system.

It will enable the traders to seek help as and when they deem necessary.

That means if you are stuck in the middle of a trade, help is merely a click away.

That is often an extremely reassuring factor for many beginners.

The markets can be very overwhelming to a newcomer.

In that event, this type of assistance enhances the trading experience significantly.

Moreover, if you can spare some money, you can also take advantage of assisted trading.

That becomes a crucial factor in determining the exact level of satisfaction.

Of course, there is also the additional cost that you have to factor in.

Conclusion

So we can conclude that it is simple, uncomplicated with a user-friendly investment interface.

If you compare it with other peers, the 0 trading fee shines through as the most significant advantage of this Robinhood investing app.

But at the same time, it does not have any promotional features or advanced trading facilities.

If at all, those are all chargeable.

So the final cost factor comes to the same.

Som at best, this will be the ideal alternative for beginners who are starting to trade in the market.

If you are looking for the ideal alternative for straightforward and cost-effective trading app, you can choose the Robinhood investing app.

7 Top Investing Apps

The market today is full of investing apps promising you the moon.

There are some that waive off investment fees and many that help you invest on the go.

The list of opportunities is unlimited.

Almost every app is in the race to provide something new and unique to the customer.

The idea is to offer a special feature-packed product that the customer will pounce on it.

Today they have become synonymous with stock market investment.

It is almost like if you have stock market investments, you also have apps to enable it.

Investing AppsThis is not just for beginners; veterans have started depending on a range of investing apps.

They consider this a crucial catalyst to boost their portfolio and broaden gains.

The idea is to target better profits and create meaningful savings.

These apps often facilitate precisely this and in a far-reaching manner.

Moreover, given the steep commission and time lag involved, investing apps often become the most convenient platforms.

They help you execute trades faster and enable you to trade on the go.

Most importantly, these investing apps prevent jumbo holes in your pocket.

You can safely rely on them for delivering a reasonable profit at minimum cost.

But the final success of any such app is also dependent on your relative investment objective.

These apps may offer the same type of service or could be drastically different from each other.

This is why assessing your objective in terms of investment target is extremely important.

It will ultimately help you narrow down on the most appropriate app.

We decided to make the task a little easier for you.

Top Investing Apps

Here is a quick list of the top investing apps that are available now.

We have assessed their compatibility on the basis of many factors.

  1. ETrade
  2. Robinhood
  3. Acorn
  4. Stash
  5. Personal Capital
  6. Vault
  7. Yahoo! Finance

1. ETrade

ETrade AppWhen you consider pocket-friendly and efficient investing apps, this is one of the top-rated ones.

It is not just considered to be one of the best by investment veterans but beginners too.

This is by far one of the most talked about online broker with a user-friendly mobile app.

Their commission structure is one of the most talked aspects of this trading app.

They have a tiered commission structure.

It is particularly effective for frequent traders.

If you undertake trade at very long intervals, this may not be the best option.

It may actually work out to be more expensive than many others.

Some of the most striking Pros are:

  • Efficient and convenient for users
  • Gives a wide range of investment option for users
  • Helps users with a huge database of research.
  • Extends all the available benefit on the mobile app
  • Cheaper commission rate for frequent traders
  • Higher trade volume yields the better profit.

But that said, this investing app also has some pockets of concerns:

  • It is not very profitable for low volume traders
  • If you do not undertake a certain minimum number of trades, it turns out expensive
  • Need to maintain a minimum $500 account balance for active trading

The best part of the app is that mimics the desktop to the finest details.

The amount of data that users can access undeniably adds an edge to the user’s investment prowess.

Moreover, this entire research matter is free for users.

The investment options include

  • Stocks
  • Bonds
  • Mutual Funds
  • ETFs
  • Derivatives

So the users can choose from a diverse range of asset class.

It will help them create a constructive and profitable portfolio.

The relative risk involved is also a function of the portfolio selection.

All in all, it delivers reasonable value for money.

2. Robinhood

Robinhood AppIf you are solely focused on investing apps for the stock market, the Robinhood offers a unique opportunity.

When you review this investing app, it is hard not to draw a corollary with the name it represents.

Sir Robin of Locksley was famous for stealing from the rich and helping the poor.

It was about empowering the underprivileged.

While this app does not encourage stealing in any way, it is about empowering those who may be unsure about the markets.

This offers, what is referred to as, absolutely free trades.

It is never free with pre-conditions.

Here free means totally free.

There is zero commission levied on the trades executed through Robinhood.

All you have to do is simply download this investing app and connect it to your bank account.

You then transfer the required amount to your Robinhood account and start trading.

For those who are interested, there is also an option for margin trades and trading in after hours.

Your investment objective is the sole criterion in this context.

In very simple terms, this is a no-frills online brokerage.

Managing overhead expenses and saving the cost of offices across the country has undeniably helped this trading app to a large extent.

However, you will not be able to access huge research database or fancy trading tools.

That is pretty much the price for zero commission.

So here is a quick look at the merits and demerits of this investing app.

Pros

  • Zero trading commission
  • Interface integrated to enable hassle free and fast trade
  • No need to maintain the minimum balance in a trading account.

The pockets of concern or cons include

  • No access to relevant research material
  • No separate platform for web trading

But if you are only concerned about trading at the minimum cost, this is amongst the best options.

3. Acorn

Acorn Investing AppIf you are looking for investing apps that can yield maximum value for money, this is among the most popular ones.

Especially for first-time investors, this can be a great option.

This is a particularly effective one for those who are not so well versed with investments and finances.

This is definitely a master of turning small savings into huge assets.

It is designed in a way that just about any type of investor can take advantage of this system.

The most striking part is that the entire investment approach is hassle-free.

All it is doing is investing the change generated in multiple transactions.

So your overall process of investment becomes quite simple and uncomplicated.

You can get started in a matter of minutes and do not really have to stretch your means.

The amount is then invested against a hugely diversified portfolio.

This primarily comprises of Index Funds.

The fee structure, however, is clearly targeted to encourage frequent trades.

A small percentage of the total account balance is deducted as a monthly fee for its services.

So, it is never really wise to leave a lot of money in your account.

It always makes sense to invest as much money as possible.

That said, the Acorn has a distinct set of pros and cons.

Pros of this investing app

  • Easy and hassle-free management of money
  • Cashback facilities and ability to optimize dollar value
  • Potential for well-diversified high return investment
  • Automated investment process aids investors

However, there are some cons of the arrangement too

  • Fee structure encourages frequent trades
  • Investment portfolio fairly small
  • Relative fees on small account balance quite large

A network of Acorn’s retail partners also offers cashback facility.

This is what makes the Accord deal rather tempting for beginners and veterans.

4. Stash

Stash Investing AppIf you are a beginner and staring off your trading career, this may be one of the most relevant apps.

It is a simple way to look for suitable ETFs and individual stocks.

Uncomplicated and straightforward, this app gives ample of opportunities to beginners.

It divides the array of stocks and ETFs on the basis of themes.

This theme-based division is again based on the relative risk involved and the independent appetite of an individual.

It clearly spells out the goals, the relative interest rates and values and relevant parameters.

It also outlines the value of the individual stocks on offer.

So if you are looking for someone to assist or guide you with your selection of stocks, this is the best bet.

The theme-based division of counters also makes it a more organized way to invest in stocks.

But remember Stash does not manage any investor account directly.

It actively guides investors with relevant choice of funds and stocks.

It also offers educational content to polish your investment skills.

But if you are well versed with the market basics there isn’t much that Stash can offer.

So primarily, this investing app is directed towards all those who are just starting off in the market.

But this is not typically a zero balance account.

While the service account is a zero balance account, you need a minimum $5 balance to be able to invest in it.

Here is a look at the Pros

  • Supports beginners to trade effectively.
  • Minimum account balance relatively low
  • Optimizes value for money

Cons

  • No active management of funds
  • Higher fees for smaller accounts.

It empowers and enlightens new investors with a strong sense of right and wrong in the market.

It makes them confident about trading independently.

5. Personal Capital

Personal Capital Investing AppThis is essentially a finance tracking tool.

So if you have multiple investment accounts, this is an interesting way to track them all in one go.

It not just tracks your investment across the board and also compares with the Dow and S&P 500.

As a result, investors get a fair idea of their relative weight and relevance.

It also offers a broad perspective of the existing market conditions.

They also have financial advisors who may help you with your investments.

But there is no obligation to do so.

You can hire them for a reasonable fee if you need any type of active management.

Users can also have a free consultation session with their managers soon after joining.

Normally these managers are very experienced and have previous work record with established financial names.

This means that when you deal with them, your money is in safe hands.

This, therefore, offers a meaningful range of options for the users.

It ensures that their savings are invested through a proper channel.

That also helps in generating a reasonable extent of savings for an extended period.

But that said like all other investing apps; these also have a distinct set of pros and cons.

Pros

  • Enables simple and hassle-free savings
  • Makes sure that investors can invest on the go
  • Offers expert help for investors for a certain amount of annual fees
  • Creates a simple platform to keep track of multiple savings

Cons

  • Not a great budgeting tool
  • Does not give investors the big picture

Therefore, this investing app is geared more for investors looking for an app to manage their savings.

The expert help they offer can often be considered as a way of generating meaningful assistance.

This helps in enabling long-term savings for the customers looking for assistance.

6. Vault

Investing apps typically service a specific group of people.

There are some that are appropriate for beginners, some for veterans.

Now the vault is an investing app directed for creating the retirement kitty.

This is particularly useful for those who are self-employed and do not have employer 401(k) cover.

This app is all about generating adequate savings for freelancers even if they are not very well versed with the market.

It helps you put together a strong and impactful retirement savings plan.

Though there are many others too, the Stash is by far one of the most effective.

The Vault will allow you to open the following account types for retirement.

  • IRA
  • Roth IRA
  • SEP IRA

This enables you to put a certain percentage of your income into any of these IRA accounts.

Since you do not have the option of savings deducted at source by employers, this ensures regular savings.

The moment an amount gets deposited in the account, the Vault notifies the user for IRA deposit.

This ensures that you do not forget or push your savings for a later date.

The pricing model of the Vault app is similar to that of Stash and Acorn.

Here is a quick look at the pros and cons of this investing app

Pros

  • It is extremely easy to use and has prompt service.
  • Strong customer care facilities for long-term uninterrupted service
  • Relatively simple to invest and involves the minimum hassle
  • The entry limit reasonably low enabling fast and effective investment

Cons

  • Not a zero balance account
  • Does not offer the big picture for investors
  • Gives investors a relatively fractured view of their future prospects.

So, all in all, this investing app has an okay set of features. This helps you maintain regularity in savings.

7. Yahoo! Finance

Yahoo! Finance Investing AppIf you are looking for investing apps that empower you with knowledge and information, Yahoo! Finance is still one of the best.

They offer a huge treasure trove of information on a variety of investment tool.

The best part is whether you are looking for views and news, you will get it all under one roof.

Along with news, investors can also access real-time data through the entire day.

This helps them stay updated on a wide range of financial market parameters.

Be it charts, information or various news related videos; you can browse them quite simply on this app.

In many ways, this is one of those key features that make this app stand out.

They also have a new additional feature linking the account to your broker account.

That undeniably enhances the functionality of this app.

It becomes an important means of not just gathering information but using the same for active trading too.

That means there is an additional level of functionality that is added to it.

This particularly enhances the overall appeal of the Yahoo! Finance app.

The pricing for it is at par with many other investing apps that are available now.

Conclusion

Therefore, we can conclude that there are many types of investing apps that are available now.

Most times these apps are targeted to a definitive audience base.

Some may be well suited for students while others are targeted for retirees.

There are some that are better for veterans while others may be for beginners in the market.

More or less most of these investing apps are targeted towards investor convenience.

It helps them to invest in a hassle free manner and enhance their overall savings.

The mobile app also makes it much simpler to invest on the go.

Therefore if you want to look at active and effective investment, these investing apps are an absolute necessity.

Is Merrill Edge Guided Investing (MEGI) the Right Choice for You?

The Merrill Edge Guided Investing is one of the newest robo-advisors on the bloc.

Better known as MEGI, this robo-advisor is launched by the Merrill Group in 2017.

What’s really special about this robo-advisor is both the rate and the pace of performance.

Along with the automated investing, this robo-advisor also enables active account management.

It can, therefore, go ahead and invest in instruments like Index ETF and also monitor portfolio allocation.

So, this combination enables maximizing profit along with cutting down losses.

Therefore, the core concept is boosting investor confidence a notch higher with this phenomenal innovation.

A broad review of the host of customer feedback on this robo-advisor highlights many aspects.

There are undeniably some distinct advantages.

Merrill Edge Guided InvestingThe MEGI undeniably increases the profit potential several degrees higher.

But there is another side of the coin too.

This is also a robo-advisor with a higher degree of management fees.

For the enhanced services, it goes without saying that you need to shell out extra.

But, it is not so easy to review an offering from one of the best known financial institutions globally.

The Merrill Edge Guided Investing has been carefully crafted by the Merrill Group for a superior client experience.

It specializes in providing customized information with reference to an improved user experience.

But the question is does that justify the higher management fees.

Especially in a scenario where you have a host of robo-advisors willing to charge nothing, does this justify?

The question is whether MEGI is worth the additional expenses involved.

The answer can’t be that simple.

You need to explore every element of the product comprehensively.

That alone will help you understand the pros and cons properly.

A Deep Insight into the World of MEGI

Before forming an opinion, it is important to understand the product properly.

What exactly is the Merrill Edge Guided Investing?

How is it any different from the rest of the offerings?

What justifies higher pricing?

What Is MEGI?

The Merrill Edge is one of the world’s oldest brokerages.

Launched in 2010, you can trace its history back to 1914.

Needless to mention, this makes the Merrill Edge one of the most respected names in the world of investment.

On the face of it, the MEGI is just like any regular robo-advisor.

Your portfolio is managed by professionals and in sync with investment software.

Once you sign up with the MEGI, all you have to do is provide funds at regular intervals.

The rest of the responsibility is taken care of by Merrill Edge.

It tackles everything from your initial portfolio allocation to regular rebalancing.

Your profit, in many ways, becomes MEGI’s worry.

Investors can practically sit back and relax while the MEGI manages their investment account.

This is a very versatile robo-advisor with multiple uses.

You can look at using the Merrill Edge Guided Investing for your retirement savings or even general investment.

On an average, commonly used robo-advisor strategies are employed.

These are time-tested strategies that are being employed by robo-advisors across the world.

The approach is to make sure that the investor can relax about his investments.

The question is how this guided investment is better than an average robo-advisor.

The Merrill Lynch legacy is surely a great source of solace but just that alone can it justify the higher fees?

That needs a careful comparison and assessment of all the available features.

That alone will help you take a call on the exact extent of its utility compared to others.

How Does the MEGI Work?

Well, we know that the Merrill Edge Guided Investing does not use the conventional algorithm.

There are some proprietary computer software with a definitive Merrill Lynch edge that adds to its success.

But the point is how can you assess the true potential till you know how this robo-advisor works?

So, here is a quick rundown of the operational matrix of this robo-advisor.

When you compare it with its peers, on the face of it, there are some similarities in the basics.

You sign up for it and fill in your investment objectives.

You give details of the duration of time you want to invest and your relative risk tolerance.

There is also a special questionnaire to customize your risk appetite.

The broad investment style is also similar.

Most of your funds are put in index ETFs which are low-cost.

Primarily these ETFs belong to Vanguard and iShares.

In-house Merrill Lynch funds are hardly used.

So the risk of so-called promotional investments is much limited.

As I already mentioned, the Merrill Edge Guided Investing use a combination of software-enabled trading strategies with human interference.

That ensures that they can account for machine-related misses with human intervention.

This makes their investment strategies all the more worthwhile.

So broadly this is not a passive portfolio.

On the contrary, it is an actively managed portfolio.

The Merrill Edge management team keeps an active tab on various policies and functionalities.

This is what makes them very sensitive to even the minor changes in the market.

Moreover, MEGI is perceptive about potential tactical changes in strategy.

The portfolio management team keeps making adjustments as per changing conditions.

Unlike conventional robo-advisors, investors get an opportunity to outperform the market.

The Merrill Edge therefore really gives you a meaningful edge.

Satisfactory Investment Approach

When I am comparing robo-advisors, the investment approach is a key consideration.

It is one of the key considerations while you are looking for an investment advisor.

As a result, this is a primary consideration even for robo-advisors.

Your ultimate extent of losses or profitability, and the true potential of the investment depends entirely on it.

The kind of guidance that you get, the degree of assistance and the quality of trade are closely linked to the investment approach.

It goes on to decide the kind of portfolio that you may end up with finally.

The Merrill Edge Guided Investing clearly scores an edge here.

It provides a definitive investment quality with an eye on details.

The Guided Investing aims at offering clear understanding to the clients.

So, there is no scope for any type of discrepancy in the core understanding.

It is a transparent and practical market assessment.

Once clients have a clear understanding, they can be reasonably confident about the quality of the portfolio.

Though just like any other robo-advisor, most of the portfolio is based on computer programs; the Merrill Edge often makes a difference.

Even for clients, it offers them considerable peace and satisfaction in terms of what they can expect or can’t.

The fact that the Merrill Lynch brand has a legacy of effective money management adds to the goodwill.

It further reinstates the quality of the service and investment advice that they can expect.

Clients have to fill a questionnaire about the relative risk appetite.

This can often make a huge difference.

The robo-advisor then rebalances the portfolio as per this new risk tolerance requirement.

This will differ from person to person.

Therefore, despite the computer programmed investment approach, there is a reasonable degree of customization.

This helps in creating a better portfolio.

Key Features of the Merrill Edge Guided Investing

The minimum account balance for MEGI accounts is fixed at $5000.

You can choose from a range of accounts that offer you different types of advantage.

These include

  • Taxable
  • Joint
  • 401(k)
  • Solo 401(k)
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • SEP IRA
  • SIMPLE IRA
  • 529

Some of the most important features include

Rebalancing Portfolio

There is not pre-decided period for the portfolio rebalancing.

The MEGI decides on rebalancing on the basis of the portfolio requirement and existing market conditions.

It reads the existing market conditions in an effective fashion and then proceeds with the rebalancing process.

Mobile App

The MEGI is in sync with the growing needs of the time.

They have a dedicated mobile app that enables a smooth access to their account.

Users can track their balance and portfolio allocation with the help of this app.

If you have accounts with the Bank of America, you can use the same app to track that too.

This is available for both Android and iOS.

Therefore, the interface is compatible with most available phones and helps in reaching a larger number of users.

That helps in improving the overall acceptance of the app and the MEGI service.

Use of Uninvested Cash

MEGI also tries to offer maximum value for the uninvested cash.

They put it in a Merrill Lynch Direct deposit account and you can earn interest on it.

In this way, you get better value for this cash too.

However, the MEGI does not have any provision for Tax-Loss Harvesting.

When you compare it with other robo-advisors, this is one factor that surely makes the sheen less bright than its closest competitors.

In terms of efficiency, this is perhaps one factor that impacts its overall success rate to an extent.

The MEGI Fee Structure

Now let us discuss the most talked about irritant about the Merrill Edge Guided Investing.

This is undeniably the fee structure.

On a minimum account balance of $5000, they charge 0.45% a year.

This is a blanket limit on any type of account balance and kind.

Normally this fee is charged monthly and has to be deposited in bulk.

But that is not all, investors have to pay a transaction fee as well

This ranges between $0.01 -0.03 on every $1,000 principal.

The ETFs that they invest in also have some intrinsic charges.

That said, they do not levy any type of trading fees.

However, in the hope of attracting more customers, they now have a bonus scheme.

On every new account, they are now offering a special bonus payment.

So

  • $20,000 account gets $100 bonus
  • $50,000 account gets $150 bonus
  • $100,000 account gets $250 bonus
  • $200,000 account gets $600 bonus

This bonus is paid to brokerage account as well as selected IRA accounts like Roth IRA, traditional IRA, Roth and rollover IRA.

Sole proprietor SEP IRA accounts also qualify for this bonus payment.

You have to make sure you need to maintain the account balance at these levels for at least 90days.

Now if you compare it with some of the peers, this is decidedly higher.

You have Options that have no minimum account balance provision and then there are somewhere there is no investment fee either.

Moreover, there are no promotional offers like free 1-year membership and the like.

It is, therefore, surely a concern that the MEGI fee structure is comparatively more expensive.

But the question is does it justify paying this additional amount for the advantage of human intervention in trading?

Does the human touch to this pre-programmed rob-advisor deserve the premium?

Seamless Integration for Investors

When you associate with the Merrill Edge Guided Investing, you will be able to integrate a lot easier with the overall banking group.

The fact that BankAm is a full-service bank often helps customers in a wide range of banking opportunities.

Moreover, there are no multiple formalities for this.

Signing for a membership for one automatically helps in getting access to the rest.

That means investors don’t have to undertake multiple transactions.

If you consider time is money, this helps to a large extent.

In short, the interface is so well integrated with the rest of the service, that it becomes a seamless operating module.

That always gives investors an edge.

They don’t have to constantly jump from one window to another.

Moreover, Merrill’s long experience in managing finances also adds a glint of perfection to this integration.

Banking On the Merrill Edge

The Merrill Edge Guided Investing is a lot about unabashed reliance on the Merrill name.

With the MEGI account, investors have widespread access to a plethora of BankAm and ML services.

These undeniably make the membership very special.

The Merrill Edge is one of the better known full-service brokerages.

It gives investors access to self-directed investment opportunities.

This is in addition to the automated robo-advisor service that they have applied to.

At $6.95 per trade, you can get access to the extensive Merrill Lynch library.

Needless to mention this gives you a brilliant to not just invest but also enhance your investment knowledge.

As BankAm is a full-service bank, you also get the option of a savings or checking bank account and other associated services.

Accessibility is also a huge advantage.

Being one of the biggest banks in US, they have a presence in most small and big cities across the country.

They have about 2000 financial centers across United States that are ready to offer assistance.

You will easily spot a Merrill Edge consultant in most of these.

That means wherever you may be, you are never too far away from Merrill Edge Consultants.

The superior customer service is a decided advantage for both beginners and newcomers.

Moreover, with easy access to a full banking service, you can easily move money with relative ease.

You don’t have to log onto any of the accounts separately or wait for customer representatives to get back to you.

There is someone ready to help 24×7.

This superior customer care also makes this a profitable opportunity to invest in.

By creating a simple MEGI account, you literally get access to a Pandora’s box of opportunities and convenience.

That is not the case with many less expensive robo-advisors.

Conclusion

Therefore, when you are reviewing the Merrill Edge Guided Investing, you have to pay attention to several factors.

First the pros of the deal, of course

It is a seamless and an extremely well integrated robo-advisor platform

The human interference adds a touch of excellence to the overall efficiency levels

It does not follow convention investment algorithms for undertaking trade.

The automated portfolio rebalancing enables you to optimize your profit margins

This service also ensures that you have more opportunity to outperform the markets.

Users also get relatively easy access to the traditional banking and other financial facilities of the Bank Of America Merrill Lynch Group.

But there are some cons associated with this arrangement too.

The management fee at 0.45% per year is quite high.

Users have to pay this upfront as advance.

They do not have any type of tax loss harvesting facilities.

The minimum account balance required is also much higher at $5000.

But though the fees structure looks high on the face, there are many associated clauses.

Don’t forget that you get active portfolio management with MEGI.

The lack of tax loss harvesting provision too is a common concern for most robo advisors including MEGI.

In fact, if you already have an account with Bank Of America, the Merrill Edge Guided Investing may be one of the best options.

What Is Trend Investing?

Make the trend your friend is perhaps one of the most common investment advice.

The trend, in fact, plays a very important role in financial investment.

You can either follow the trend or buck the trend.

No wonder trend investing is one of the most common types of investing strategy.

The simple explanation of trend in the financial world is the direction of the market.

The market goes up, down, sideways, range bound.

Surprisingly each of these is a specific trend in the market.

What Is Trend Investing?They indicate a specific period in the market when the direction determines the profit percentage.

Often the entire growth is trend-oriented.

No wonder you have a host of techniques and analysts looking for the right trend.

Trend investing, as a result, emerges as the most popular way to profit from trend analysis.

These trends can be long-term, short-term or even medium term.

It totally depends on the type of market that you may be trading in.

There are many factors impacting the trend.

From economic decisions to corporate earnings, there are many catalysts affecting the trend.

It is important to maneuver your investing plans as per these trends for the best results.

Often trend investing is a strategy that’s used to cut losses or even exit markets.

This strategy predominantly aims to fashion trend as per the broad market directions.

Analysts don’t predict any specific price levels.

They simply identify the direction and investors ride in that direction.

Normally the trend also dictates your market entry.

Most will wait for a trend to settle down before entering the market.

Contrarians, on the other hand, will use the trend to determine how and when they can go against it.

So broadly any type of market movement is deeply rooted in the broad trend.

Defining Trend Investing

The simplest definition of trend investing is, therefore, looking at the trend for deciding trade.

You are in a safe investing zone and also making money.

That makes you confident about the market, and you feel that you are ahead of the curve.

This particular way of investing is heavily based on gauging the momentum appropriately.

So based on the trend, an investor will go long when the momentum is pointing north.

The reverse happens, and shorts trades are created when the momentum goes down.

The assumption is often like Newton’s law of inertia in this case.

Traders feel that the market will continue to move in a specific direction and offer stop losses before a reversal happens.

This is possible without taking into consideration any specific time period.

Trend investing is possible for long-term as well as short-term.

Though the reversal will happen at a different time for the different duration.

It totally depends on the overall duration and extent of momentum that you want to harness.

This entire trading format is a pretty modern concept in comparison to the history of trading.

You can trace its origin to 1980s after the success of Richard Dennis and Bill Eckhardt’s unique trading strategy.

They taught this strategy to a small group of traders that they created, the Turtle Traders.

This particular trend investing strategy amassed more than $100 million in profit.

Though earlier history indicates a strong correlation between trend investing and commodity trading, it is common across financial tools.

The profitability element is the cardinal decider for this specific investing strategy.

If you ask a trend trader, there is nothing as sacrosanct as the trend.

For many, this is the most decisive trigger for the markets.

In many ways trend investing stands out as the key growth catalyst.

Strategies for Trend Investing

Now if you have a specific kind of investing, a strategy has to follow it.

Trend investing is all about price discovery.

Whether the price will go up or down, that is the final aim.

There are many different strategies that are employed to identify just this basic fact.

Whether you are long on it or short, if you are investing, you need to take this basic factor into consideration.

The different strategies are also important in helping to time the market more accurately.

Are you there too early or are you already late?

The time along with the price plays a crucial role when you want to invest in the trend.

The trend waits for none.

The idea is to anticipate the trend and stay ahead of the crowd.

That is perhaps the most effective way for booking profit in the financial world.

It is not just a strategy to help your investment grow, but at the same time, this also gives direction.

Often the biggest challenge is not deciding where to invest but more importantly when.

Trend investing strategies guide you to find out exactly this when.

So, in many ways, identifying the trend empowers an investor in terms of taking meaningful market decisions too.

But there is no one way of deciding the strategies.

Every market analyst and trader rely on what they are most comfortable with.

Frankly, your strategy may be as effective as mine.

Your unique way of investing also plays a crucial role in it.

But that said, there are some basic strategies that almost all market players employ.

Here is a quick look at the top trending strategies to identify the trend.

Sometimes traders may also use a combination of some of these.

Remember the ultimate target is profitability.

Moving Averages to Identify the Market Trend

Whether you rely on technical analysis or fundamental views, it is hard to ignore moving averages.

There is a reference to them if the stock is rising, there is a reference if it is falling.

They are undeniably the most tracked market data.

But the question is what exactly is the moving average and why do you have to track it?

The moving average is essentially a technical tool that smoothens out price action.

This constantly updates the average price number over a specific period.

The moving average can span over 30 days, 50 days, 200 days.

Basically, it can be any period that you deem is important to understand a trend.

At any given point, there are myriad of signals in a price chart.

But the moving average is the single most effective tool that helps to clean out the unnecessary stuff.

These are essentially price points where the specific stock or currency has either experienced resistance or support.

That means crossing the moving average often starts off a brand new trend.

For example, a certain moving average may be a resistance level for a stock.

Once the stock breaches this specific resistance, you can be confident about a new trend starting.

Further upmove is expected beyond that point.

The reverse happens if it slips below the support zone.

It means there is a risk of further downturn in the specific price action.

The moving averages can be determined for the short-term as well as long-term.

As a result, this can impact the overall momentum in the trade and also help you identify the trend.

For a trend investor, these levels, therefore, become important indicators to understand the broad trend.

It often triggers long-term trading strategies that impact markets.

What Are Trend Lines?

This type of trend investing is closely linked to the support and resistance levels we discussed earlier.

In this case, you go long when a stock is trending higher, i.e. follow the trend.

But you also create a stop loss just below the support zone.

So in case, there is a trend reversal, you can contain your losses.

The key consideration here is using the trend to limit losses.

Capital preservation or preserving profit is the ultimate objective of this trend strategy.

The moment a stock reverses the trend, you can easily exit and safeguard your profit.

Often a breakout from the trend line or a breach of the trend line kicks off a fresh trend.

This can be with regards to a specific security or the market as a whole.

So identifying the appropriate stop loss point is one f the most important aspect of this strategy.

But you have to keep in mind that this strategy is never used in isolation.

It is always used in conjunction with another strategy.

This is more of a means to determine the broad trend.

It never predicts the trend on its own in a conclusive manner.

It can be used with both moving averages and momentum indicators.

Trend lines, in fact, are some of the most important tools to clock meaningful market gains.

Momentum Indicators

The other key tool for determining the trend for investing is momentum indicators.

As the name indicates, this identifies the broad momentum in the market.

Normally these strategies are used to identify the entry and exit points in a trend.

If the specific stock is trending with strong momentum, you can create long positions.

If the stock suddenly loses momentum, it may be the right time to short the stock.

Needless to mention the RSI or the relative strength index plays a crucial role in determining the momentum.

It also helps you to determine if a particular security is in overbought or oversold zone.

You can either use it to go long or short on a particular counter.

For example, based on the momentum indicators, a specific stock may be oversold and a bounce is likely.

Now what you need to do is go long on it now and wait for future gains.

The other option is if the stock is overbought, you place a short position and wait for a further downturn.

If you notice in both cases, you are anticipating the potential trend that may ensure.

Therefore one fact is simple and clear, a trend is never definite till it actually plays out.

The trend is an assumption based on the rice action.

There is always a risk of it not panning out exactly as anticipated.

It totally depends on several other factors.

Remember at any given point a trend is never determined in isolation.

Though these strategies are some of the most common, many other factors are affecting the broad trend in the market.

The strategies and their success are directly linked to them.

Key Considerations for Trend Investing

If you are contemplating trend investing, understanding what affects the trend is crucial too.

Several considerations go on to determine the success of this trading approach.

You have to remember that there is a fine line between assumption and reality.

The question is to determine how to decide where to stop.

If trend alone could help the markets, then there would never be any mayhem or bloodbath on the exchanges.

The problem is sometimes investors may go overboard in trying to identify the trend in a precise manner.

1. Pricing Is Most Important

Remember the current price is undeniably the most critical consideration.

There may be several indicators for the trend or where the price is headed.

But that is broadly in the realms of assumption.

Only the current price is what holds value and importance.

Remember if you are investing in the market, your primary worry is what the market is doing now.

What the market may do is only secondary consideration.

2. How Much Is Not Too Much

When you are investing on the basis of the trend, there is another key consideration.

You may think you are using the trend to determine when to enter or exit the market.

But most importantly you are deciding how much money you can invest in a specific trend.

That will help in effective money management through the course of your investing graph.

3. Risk Management

Don’t ever think that trend puts you at risk.

Risk is the cardinal concern for all those who are keen on investing.

Remember that more than growing profit, cutting losses is the key to effective investing.

Whether you cut down position during volatile sessions or exit in a downturn are ways to assess risk.

The trend can empower you with knowledge.

Trend Investing Has to Be Systematic

Therefore, the extent of risk you are willing to stomach is solely your prerogative.

That is exactly why rules are so crucial for trend investing.

Rules help maintain order and logic in your overall trading position.

Remember the price and time are crucial constituents of this type of investing.

It makes sense only when these two factors juxtapose in a trend trade.

That again is also dependent on the overall supply-demand matrix.

As a result, trend investing is very closely linked to creating a sense of order and calm in the marketplace.

Far from the maddening crowd, it seeks to create a systematic pattern tracking stock pricing.

The system is what makes the trend trading a sustainable and strategic wonder.

If you want to make money using trend, your pattern of investing has to follow the rules correctly.

That alone will guarantee a long-term profit scenario for the markets.

It will help you in identifying the most important growth triggers.

In many ways, it even helps you in interpreting a trend accurately.

That is again the key factor that will help you in taking advantage of a trend and furthering your investments.

How Can Trend Investing Help?

So the question is how will trend investing help you and why must you incorporate this?

One cardinal factor is that trend investing may be a safe and time-tested way to trade the market

But don’t over leverage yourself from the word go.

Always check the trend with small capital allocation and then increase in tranches.

Don’t look for a trend in every security.

The best approach is to identify just a few counters and analyzing their trend in depth.

Maybe you can choose just 3-5 top performing stocks.

But analyze the trend in depth for each of these counters.

Cover every possible aspect of trading and trend like valuation, timing and price action

That will help you in identifying selected profitable ideas and taking advantage of the trend.

Most importantly trend investing helps you cut out the noise and concentrate on some key stocks/securities.

Conclusion

One of the safest and most profitable approaches to trading is following the trend.

It is true that you may end up making millions of dollars by charting the trend and investing.

But remember you cannot anticipate the trend in the first instance.

You will have to undertake in-depth research for mastering trend investing properly.

Investing in Stocks with Little Money in 7 Steps

Often people yield low benefits by investing in stocks with little money.

It is true that stock trading always delivers higher margin on a larger portfolio.

But it is not exactly impossible to invest in a lower scale.

Of course, investing in stocks with low budget means that you will have to apply sharp strategies.

When you are investing in stocks on a shoe-string budget, the idea is to optimize the value of every dollar spent.

You have to undertake thorough research and carefully choose the stocks.

This will make sure that you can profit from investing in stocks is possible on any budget.

Investing in Stocks with Little MoneyOne important factor to remember is managing expenses.

When you are investing in stocks on a low budget, you have to look at cutting down expenses.

Stock investment invariably involves a lot of overhead costs.

You have to pay brokerages for every transaction, commission to the broker and also tax on the transaction.

So when you are trading with a minimal amount, you have to plug these expenses upfront.

The idea is to cut down on these costs and preserve as much of the profit as possible.

That will help you get a bigger chunk of the actual profit.

Moreover, investing in stocks with a small budget or little money is also about creating a comprehensive game plan.

You have to create a careful plan for every dollar that you spend.

Not a penny is spare, and you have to make every dollar count.

So the selection of stocks become crucial at this juncture.

It is all about appropriate application and execution of your investment plan.

But we decided to make the task a lot simpler for you.

Here is a step by step guide to investing in stocks with low budget and profiting.

How to Investing in Stocks with Little Money

Here is how you can start investing with a small budget:

  1. Research Is Important for Investing in Stocks with Little Money
  2. Go for Long-Term Investments
  3. Look for Investing in DRIPS
  4. ETFs and Mutual Funds
  5. Use Robo-advisors
  6. Don’t Spare the Change
  7. Don’t Forget the Retirement Plans

Step 1) Research Is Important for Investing in Stocks with Little Money

The moment you consider investing in stocks with little money, it has to be a smart investment.

The idea is to look for stocks that can help you realize higher profits despite the lower quantity.

Now, this is not an impossible task.

The market is full of a variety of options.

There are stocks that deliver steady returns over a point of time.

Some very volatile counters are cheap but have wild price swings.

Then there are some which have cyclical movements.

They go up at a certain time in the year or day and then again go down.

But just one look at the Dow or S&P 500 will not reveal all these.

For that, you will need to undertake in-depth research of the talks.

Read analyst views and follow the market like a hawk.

Only then you will be able to identify these hidden gems in the market.

Investing in these stocks is a possibility only when you are ready to devote a certain amount of time in these.

You need to identify and then track these counters for some time at least.

Commit cash in these stocks only when you are very sure about the stocks.

Devoting time in research also has its benefits.

It helps you to read the market with much higher efficiency and precision.

You can anticipate ups and downs with a lot more confidence.

Most importantly you learn to identify the trend.

As they say, when you are investing in stocks, make the trend your friend.

This will make sure that you can cut down your losses and maximize profit.

That is undeniably one of the most sustainable strategies to gradually build assets in the market.

Step 2) Go for Long-Term Investments

When you want to invest in stocks with a low budget, it is always better to invest for a longer term.

There are two distinct advantages of following this strategy.

It helps you create meaningful investments in two distinct fashion.

Benefits Of Compounding: When you invest for the longer term, you don’t withdraw your money in a hurry.

Whatever profits you amass, you tend to reinvest the money again.

This means that you may have started with a net investment of X but in 2-5 years, it will be 2X.

The 2X then increases to 4X and thereon.

Basically, the initial capital that you are investing in stocks does not have to be huge.

Every time you earn a profit, you simply need to reinvest in more stocks.

Of course, one element for that is you have to look for quality stocks.

You cannot invest in a random small cap for the longer term.

For that, you will have to look for quality counters which will justify the prolonged investment.

Only then, you will get the opportunity to reinvest profits for the longer term.

Cut Down Overall Expenses: The other option for enhancing savings with little money is to cut down expenses.

Normally investing in stocks have many related expenses like brokerage charges, commission and taxes.

The idea is to reduce all these associated expenses in a meaningful manner.

That will make sure that you will manage to keep control on a greater chunk of the profit.

This will then inevitably enhance the total investment value for you.

You can also incorporate cost saving initiatives from trading on your own to using the latest technology.

All of these may only result in small savings, but on the whole, they will add.

The net investment, as a result, will rise.

Step 3) Look for Investing in DRIPS

The abbreviation DRIPS stands for dividend reinvestment plans.

Essentially this is all about investing in stocks that pay the dividend.

When you are looking for investing in stocks with a low budget, this is an interesting example.

These stocks offer a dividend at a steady interval.

So you can invest a small amount in these stocks and take advantage of the double benefit.

The most interesting aspect of this investment is low overhead cost.

You do not have to pay any investment fee for these.

The best part about DRIPS is that it allows you to build your savings over a point of time.

You only have to make a contribution at regular intervals.

So your investment is never created in one day.

Whether you contribute some money every month or it gets deducted at a certain time, you stand to gain.

In this way, you are easily able to take a position in large blue chips.

But you are not buying all at once.

Your portfolio is increasing bit by bit.

What is most interesting is that often your investment is funding additional investment.

So you do not have to spend a large amount in it either.

I am sure you have heard the old saying that slow and steady wins the race.

DRIPS is a perfect example of this slow and steady journey towards a huge portfolio.

The complete absence of investment fees makes the deal even sweeter for you.

You are building a major investment base, but the expenses are within control.

But the steady pace of contribution guarantees that you are able to take advantage of every possible upmove in the market.

Even in terms of risk, you have a limited exposure at any given time.

It is, therefore, a relatively profitable proposition for investors.

Step 4) ETFs and Mutual Funds

The mention of risk often brings to light the alternative investment options.

A lot of investors with access to little money choose safe bets in the hope of preserving capital.

Most times, the tradeoff is that they compromise with lower returns.

But what if you chose safe stocks to get the same type of return at a reasonable safety.

This is where Exchange Trade Funds come to play.

In this case, they derive the underlying value from the Index itself.

So these Exchange Traded funds work exactly like the index, but at the same time, they offer you better security.

Here you are trading the underlying value, and at the same time, you can liquidate positions anytime.

So in terms of convenience of operation, this one is at par with stocks.

You can buy ETFs in small batches as per your convenience and fund availability.

For example, if the S&P 500 is set to go higher but don’t have adequate cash to buy large position.

You can buy a small amount of the S&P ETF every month.

So by year-end, you have a reasonable amount of S&P 500 position.

This will enable you to surely take advantage of a higher profit margin.

Mutual Funds are also very popular options to invest in stocks.

Just like ETFs, these also derive value from the underlying stocks.

So this gives you superior returns like stocks without the associated risk.

But at the same time, you cannot liquidate Mutual Funds at your convenience.

There is a distinct lock-in period.

But when you are investing in stocks over the long-term, it is not such a huge consideration.

Rather this gives you the advantage of steady investment.

Therefore it is one of the most convenient options for investing in stocks with little money.

Step 5) Use Robo-Advisors

When you are looking to investing in stocks with a low budget, robo-advisors can help solve many problems.

They are easy, accessible and convenient platforms to address investor issues on a budget.

The budget here is a buzzword.

This is because we are looking to invest in stocks with little money.

Sometimes individuals may not be very market savvy and have to seek help from professionals.

But the worry here is that most advisors will charge a heavy fee for their advice.

Now supposing if I end up paying a sizeable chunk of y money in getting advice, what will I invest?

This is exactly where the low fees robo-advisors can seek to make a difference.

The fees are sometimes as low as 0-0.25% of the entire portfolio.

Different groups of robo-advisor platforms have differing rates.

But affordability is a key consideration for most of these service providers.

Often the first year of operation is also free.

So a significant amount of your stock investment happens without any fees.

Moreover, you are also saving time for researching possible options.

The Robo-advisor makes the searching, shortlisting and investment.

But for all this service, the charges are minimum and the advantage you get to steadily enhance your bottom line.

But the question is can you rely on their investment algorithms?

Well, you have many forms of validation including the Nobel Prize for Eugene Fama and Robert Shiller for their insights and research in this field.

The fact that platforms like Charles Schwab and Betterment are making steady progress also bears testimony to their accuracy.

When you are investing small amounts, the relative risk is also a lot limited.

So even if you feel at any point that it isn’t as profitable, you can cancel your membership and take a call accordingly.

Step 6) Don’t Spare the Change

I mentioned earlier also, investing in stocks with little money is about optimizing the value of money.

The good news is that you now have options that do not even spare the spare change.

Are you confused about what I am hinting at?

Acorn is a great platform for low budget stock investment.

You do not need any minimum account balance and transact easily using the debit or credit cards.

What Acorn really does is keep a track off your purchases and helps you invest the spare change.

Let me explain to you using an example.

Let’s say, you go to a coffee shop and buy stuff worth $4.50.

Now what Acorn does is, it rounds this off to $5.

There is then effectively 50 additional cents in your account.

Acorn goes ahead and invests this amount.

You have a wide range of options in terms of the account type you want.

It can be a monthly investment one or a daily one.

Investors even have the option of weekly investments.

In case the balance is less than $5000, they levy a monthly fee of $1.

For accounts with balance over $5,000, they charge 0.25% management fees.

The amount accrued is invested in a wide range of diverse and relatively low-cost ETFs.

What makes the deal sweeter is that Acorn manages your investments even when you are not paying attention.

It will take tough decisions on your behalf.

It ensures that every penny that you have invested realizes its true potential.

That is what makes it such a winning combination.

It works well for those who actively follow their savings and also for those who are a bit complacent.

At the end, it helps you in investing in stocks on budget.

Step 7) Don’t Forget the Retirement Plans

Most employers offer the 401(k) or other retirement plans by default.

If you are looking to investing in stocks on a low budget, this is a worthwhile option.

The monthly share of these investments is minuscule.

As a result, you will not even feel the difference.

Moreover, it is mostly deducted from your salary, so there is no chance of missing it.

Every month the amount gets deducted and invested by default.

The advantage is by the time you retire; you have a lumpsum amount of money ready for use.

You can start by investing as little as 1% of your salary in these employer-sponsored plans.

You can also check the tax liability on these investments.

That way you can go for ones that have the tax deducted at source.

So this will make sure that when you get the final amount, you don’t lose anymore due to additional taxes.

As your salary increases, you can keep raising the contribution to these retirement plans.

Most times these retirement or pension plans choose relatively safe options.

But the rate of interest is reasonably good.

So the investors can take advantage of steady savings without any huge risk.

This is a major advantage of the entire investment policy.

Conclusion

Financial prudence is important when you are investing in stocks with little money.

You have to concentrate on investing in stocks that can offer maximum growth potential.

The good news is that there are plenty of ways to start investing even with small amount of money.

Technology too has advanced significantly in this area.

From offering options with low investment fees to cutting down transaction costs, the challenge is to choose the most fruitful option.

You have to constantly update your knowledge base and be on the lookout for convenient options.

That is the best way to gain from investing in stocks with a low budget.

How to Start Investing in 7 Steps

Investing is a significant step in furthering your money.

We all understand that it is important to start investing almost as soon as we can.

But the problem is often how to start investing?

As you move forward, you start to understand that this is more of a habit.

But the challenge is often about getting started.

Irrespective of how much you earn, it can never be enough.

So, there is that constant tug of war about how to spare this additional fund.

You keep shifting your plans every month.

But prudence will tell you that it is best to start before it is too late.

This is one of the essential steps that can help you amass wealth.

Start InvestingWhether you are working towards a hassle-free retirement or financial independence, investing is necessary.

It helps you give confidence as well as security for most eventualities in life.

But remember an investment does not grow overnight.

It needs a gradual and systematic approach as you start investing.

Investing is essentially about managing your money in a profitable manner.

That also involves developing some key area expertise and building on existing resources.

As a result, you have to follow a step by step method to start investing.

This will make sure that you are not overstretching or going beyond your means.

At the same time, it is the best way to ensure that you are optimizing the value of every dollar you earn.

That is perhaps the most important step in the whole calculation.

Creating a value for money proposition will help you decide on more sustainable investment options.

That makes sure that you are able to set aside some amount of money at regular interval.

This planning is always the first step towards effective investing.

Start Investing in 7 Steps

So… here is how to start investing in 7 steps:

  1. Decide on How Much You Can Invest
  2. Set Your Targets
  3. Decide on Risk Appetite
  4. Get a Handle on Basics
  5. Contact a Financial Planner
  6. Choose Your Investment Style
  7. Analyze the Cost of Investment

Step 1) Decide on How Much You Can Invest

Invest SmallThis is perhaps the most important step in your manual about how to start investing.

Getting your finances in order can be a tough ask.

Accounting for all your debt, liabilities, payments is very important for this.

You have to make an accurate assumption of how much spare cash you will have in hand.

But before that, you have to take stock of your debt and monthly expenses.

That alone will help you decide on the exact amount of investment you can undertake on a monthly basis.

This will also be directly proportional to the time and the extent of interest you hope to earn.

Different means of investment will yield different degrees of interest.

Now you have to calculate the time period and the amount of money that you want at the end of a given period.

When you consider all these factors, you can make a realistic assessment.

The basic thumb rule is you must be able to invest at least 30% of your earnings.

But that may not be possible for everyone or everybody.

So when you are deciding on the amount of money, you have to take everything into consideration.

The amount that you eventually decide has to be something that you can invest regularly.

At the same time, this amount has to be invested in a steady fashion.

So you must decide on your ultimate investment goals accordingly.

That will help you create a proper debt repayment plan as well.

Striking the fine balance between the maximum you can invest and the minimum you need to spend is crucial.

That ultimately goes to formulate a holistic long-term investment plan.

It is often the first step to start investing.

Step 2) Set Your Targets

Investment GoalsTherefore, when you start investing, deciding on your investment targets is absolutely crucial.

Once you have a clear idea about the amount of money you can set aside, you need to build your target.

This is a cardinal rule of how to start investing.

It is almost inevitable that you may lose your motivation to save at any point of time.

This kind of target based investment will help you remain on track.

It will make sure that you work towards achieving your target irrespective of all odds.

Of course, I do understand that different types of investors will have different goals.

The degree and frequency of investment will also differ.

But despite that, there are some constants at work.

All of us need a certain amount of health insurance, retirement kitty and money to meet educational expenses for kids.

Once you set a target for each of these, it becomes that much simpler to work towards that objective.

Moreover, it also helps you in choosing the vehicles of investment.

For example, if you target saving X amount for retirement, it is always better to choose traditional options like IRA.

Also once you have the target in mind, certain related facts also come to light.

Different types of investments need different degrees of security.

The means to preserve capital is quite different for different types of investment.

All of these are closely linked to the overall objective involved.

Creating targets also help in self-assessment.

You don’t have to depend on anyone to identify how much money you have saved.

Also, you would not have to constantly keep worrying if it is enough.

You have made your calculations and started investing accordingly.

Now you only have to start waiting for the rewards.

Step 3) Decide on Risk Appetite

Investment RisksDeciding on your risk appetite is another important element when you start investing.

Just like the targets you decided help you to choose the investment instrument, the risk appetite also helps.

For example, you are looking at fast returns so stocks may be a good option.

But if your risk appetite is not high, you may have to make do with stock Mutual Funds.

Effectively then you are gradually calibrating your objective as per the risk you are ready to take.

Those with higher risk appetite will look for higher reward products for investing.

But you may also start to invest in moderate reward instruments if you don’t want to take a huge risk.

Remember, in the world of investment, you never have a definitive yes or no.

All types of investment instrument are worth the try provided they help you generate the target returns.

At the end of the day, it is a relative game.

Your age and financial condition will also dictate your risk appetite.

If the total invested amount is only a minuscule portion of your net cash levels, you will not be too worried.

You may even be ready to gamble with it a lot easily.

Conversely, if the amount of money in consideration is all your life savings, you will be more cautious.

You cannot just gamble with it that easily.

Higher risk surely yields better returns, but it is always important to assess the collateral damage.

You can never assess your risk appetite in isolation.

It is always dependent on several factors.

But the most important aspect is the extent of losses that you may be able to digest.

That is what will go on to shape the long-term investment construct.

Step 4) Get a Handle on Basics

Investment BasicsWhen you start investing, you have a plethora of alternatives in front of you.

The challenge is what do you choose and what you don’t.

Of course, most experts will tell you that this will be decided completely by your targets.

Yes, your investment objective surely plays an important role.

But even then, it is essential to make an informed choice.

While you don’t really have to be a financial expert, it is important to know where or what you are investing in.

Often the relative rate of return is closely determined by this fact.

You have to be comfortable with the market lingo and know how much to invest where.

Even the basic concept of diversification is a function of this very factor.

Remember appropriate knowledge will equip you to make profitable choices.

It also helps you assess the required risk in an appropriate fashion

Without required knowledge, you may end up making wrong investment choices.

They not only jeopardize the rate of return but you can lose a significant amount of money.

You can decide to take up a plethora of short-term courses about the market and investment.

You can also enhance your knowledge by listening to the market and investment-oriented shows.

The most effective one is, of course, increasing the ambit of your reading.

From biographies to special investment bulletins, the market is flooded with a variety of books.

You can choose to read on just about any investment related topic that you like.

This will ensure that you are able to update your knowledge base at regular intervals as well.

This is also an important part of your knowledge gathering initiative.

It will help you to further your understanding and boost your investment.

Step 5) Contact a Financial Planner

Investment Financial PlannerI know investing is fun and can be even addiction.

But when you start, it is very important to be cautious.

That alone will help you stay on track with your investment goals.

It is for this reason that when you are learning how to start investing, contact a financial planner.

You may or may not employ a full-time financial planner.

But at least in the initial stage, a financial planner will be able to offer a better direction.

They can handhold you in a more effective manner.

You will also get a more definitive direction to your trade.

Most times, investors take refuge in the comfort of mutual funds.

But a financial planner helps you provide information about many other types of investment.

They may be able to offer you a few more options that conform to your risk appetite without compromising returns.

Basically a financial planner offers you the insight the options with best possible growth.

They can also help you formulate a plan that can effectively meet your long-term investment targets.

The best part is you don’t have to go too far looking for them.

Most banks employ financial planners or you can even visit independent financial houses.

These planners may not invest on your behalf but they will definitely tell you how to go about it.

They will also give you ideas on ways to spread your risk constructively.

Moreover how to determine the fund allocation is a key concern for most who start investing.

The financial planner can easily provide a broad investment plan.

It is common knowledge that online investing is the best way to start in the current scenario.

Here again, the financial planner can help you input on how to start investing online.

Step 6) Choose Your Investment Style

What Is Your Investment Style?I love investing and over a point of time have developed my own style.

But trust me when you are grappling with how to start investing, this is a major challenge.

Different types of investors have different styles and they may all be effective.

Investing, you see, is a subjective matter.

Unlike a mathematics formula, there is never only one right way to do it.

You can handle it in many ways and still get adequate returns from it.

For example, my granddad only invested in fixed deposits and post office savings instruments.

A chunk of his retirement fund was stacked away in pension.

But he did not provide adequately for children’s education.

As a result, my dad had to work towards paying off his educational loan in the initial years of his service.

But he did not want to miss out on the advantages of saving early and the savings all those years of debt paying may have yielded.

So he chose to invest in gold and mutual fund along with Fixed deposits and post office savings.

But after their retirement, both my grand-dad and my dad were able to meet their investment target.

That meant that they were financially secure and independent after retirement.

None of them had to depend on their children to provide for their needs.

Therefore, it is important to work out your own investment style.

You may be a conservative or unorthodox investor.

You may be keen to take the risk or shun risk at all cost.

Whatever the pre-condition may be, your individual investment style is always the best option.

It helps you to invest comfortably without compromising on the rate of returns.

Moreover, it is always a more secure way of investing.

Step 7) Analyze the Cost of Investment

Cost of InvestmentNow another factor is to properly analyze the cost of investment.

When you start investing, this is one of the most common challenges.

You can enjoy a projected rate of return only if you don’t end up paying too much in transactional charges.

Let us say, you have learned that investing in X stock can generate Y returns.

Maybe the X stock actually generates that much return.

But your profit will be Y-T, where T stands for transaction cost.

This transaction cost can be brokerage, load factors, taxes and any other liability.

Basically this is the expense that you have to incur for investing in a specific product.

If this expense is higher than your rate of return then your entire profit gets eroded.

So you have to be very careful when you are assessing your cost.

Without proper cost calculation, you may end up with deep losses.

For investors who are just learning how to start investing, this is a crucial factor.

The chances are they will have higher overhead costs.

Be it hiring financial planners or stock brokers.

So the onus is on them how they can manage the expense- profit balance effectively.

Most times, this is also a key consideration where financial planners can help you significantly.

Conclusion

Therefore, when you start investing, making an informed choice is a primary necessity.

From deciding the target to choosing the instrument for investment, area expertise is crucial.

But learning about investing is not really rocket science.

With a bit of patience and application, you can easily master on the issue.

Thorough research will also help you stay on track, in terms of meeting your investment goals.

Thankfully today a lot of reading material is available to guide you through the entire process.

But if you do not have time to read many books or attend TV shows, simply read this guide on how to start investing.

We promise to offer the most needed edge to your investing techniques.

This will also help you in start investing like experts.

The Best Health Savings Accounts (HSA) for Investing

Health savings account investing can often be the best way to get tax advantage with health cover.

It allows you to use the same instrument to cover your medical expenses as well as generate savings.

But proper HSA investing is all about choosing the right schemes.

But the fact is that not each one of these can help you generate appropriate returns.

Not every health savings is created to service your requirements.

The market is full of various investment options.

Some will suit you while others may appeal better.

Most importantly, you have to look at how to address your individual requirements best.

Moreover, the right type of HAS investing will also enhance your retirement savings to a large extent.

It will help you create the right balance between positive and negative return ratio.

Health Savings AccountThe best investing schemes are the ones that offer you the maximum advantage with minimum expenses.

It includes almost everything from fees, access to creating meaningful returns.

The tenure and reliability are also key considerations.

It goes on to impact the overall return prospect in a significant manner.

The good news is you have several new HAS investing offerings with the appropriate balance.

These Health savings account investing options will not just enhance your medical savings but net returns too.

But often the whole task of short listing the requisite ones can be an ordeal.

We decided to make the task a lot simpler for Health savings account investing.

We have shortlisted some of the most popular HSA schemes.

They are not just the cheapest options but also ones with most consistent returns.

This makes them rather steady winners over a given point of time.

But before that, you must understand how to rate the available HSA investment options.

What to Look for in Health Savings Account Investing

Deciding on an appropriate Health savings account is somewhat tricky.

Increasingly, you find a higher number of schemes that are geared towards better investment returns.

So choosing for these is now similar to deciding on your IRA or 401(k).

It is essentially looking for a long-term investment with reasonable return ratio.

You have to create a strategy to harness maximum advantage.

Be it monthly medical expenses or the investment returns, your scheme has to address both.

Many times, investors are stuck between choosing an individual plan or opting for the popular office option.

The good news here is you are not duty bound to choose what your employer offers.

If required, you can also choose a scheme that is not part of your employer’s offer.

Basically, you have to choose a scheme that best addresses your needs.

Even when you opt for a separate HSA scheme, your employer may continue to deposit pre-tax money into your HSA.

You can also choose to opt out of the employer-employee collaboration and look for a tax write-off at the end of the year.

That is also a unique way to enhance savings and cut down taxes.

You must focus on Health savings account investing with better return prospects.

So, in many ways, it is similar to choosing an IRA scheme.

Also, the price of the investment option that you choose holds a lot of importance.

HSAs, on an average, have a different kind of fee structure.

Look for the ones that help you optimize your returns the most.

Also, analyze the historic performance of the scheme that you are investing in.

Though historic performance is not the most accurate indicator of future, it gives you an idea.

Moreover, it highlights the degree of consistency.

– Health Equity

This is one of the best known and most popular options for health savings account investing.

From the quality of investment to the ease of access, there are many positives about this plan.

It has one of the most favorable interest rates in the current scenario.

This is an important consideration for keeping your investment objective on track.

The kind of savings that you generate is closely linked to the rate of interest that you get.

This is the principal rule for all investment opportunity.

Always go for options that promise the best interest rate.

That means it gives a better value to your savings and helps you optimize the relative value.

This also enhances the overall scope of return if you are investing in this option.

The investment options include a wide array of 23 mutual funds and it is a FDIC insured opportunity.

There are over 3.4 million users, and that surely speaks a lot about its consistency.

When so many people are investing in the same policy, it is surely doing a few things right.

The fee structure is also conditioned towards maximizing user interest.

  • The monthly fees is about $3.95
  • The closing fee is approximately $25
  • The investment fee is $0.33 per $1000 invested.
  • For self-directed investments there is no service fee
  • For web-based assisted investments, the service fee is roughly 0.08%

But for all of these, investors are not under any obligation to maintain any specific account balance.

The minimum account balance required is an absolute zero.

The ease of access is another key advantage of this HSA investing scheme.

It has a debit card and checking account facility.

Most importantly users also have online banking facilities.

That means they can access these health savings account from just about anywhere and anytime.

– Further Health Savings Account

This is one of the most versatile health savings accounts for users.

This has a constructive mix of spending and investment needs.

It offers flexible and well-rounded health financing and savings options to its users.

Most importantly whether you are looking for a savings based HSA investing scheme of spending-oriented, this helps.

It is one of the unique solutions that fit all requirements.

This particular investing opportunity offers triple savings option.

Moreover, the premiums are much lower than any other existing opportunities.

This makes these a viable savings option that maximizes the returns.

The benefits package is also significantly enhanced in this case.

This means that it is able to attract relatively more users to avail the benefits.

Even for employers, it works out to be an attractive means to retain employees.

After all, everyone is looking for options to realize maximum output.

In terms of the payment involved, it works out to be a cheaper option for employers too.

When more employees start HSA investing, this also increases their overall savings and tax liability.

The disbursement and average administrative services are also much better.

User convenience is the keyword in most of their function.

That is what ensures that their processes are way more simplified.

This means both in terms of accessibility and usage, they have an upper hand.

This is the crucial factor helping their overall performance record.

Most importantly, they have a range of savings options.

You can choose to opt for accounts with higher maintenance fees; these will also guarantee better interest rates.

Also, you can easily transfer an existing savings account to an investment one.

The charges for this transition are very minimal.

But it makes sure that users can optimize the value of an investment.

– Optum Bank

This is another popular health savings account investing destination.

With a total user base of close to 3 million users, they also represent quality investment at a reasonable rate.

The rate of interest is decidedly one of the most important deciding factors.

It gives you up to 0.40%rate based on a balanced tier system.

The investment options are spread out over 31 options.

The threshold for investment is about $2000.

It ensures that the medical expenses do not drastically jeopardize your savings.

This is a type of Health savings account that helps you maintain the crucial balance between spending and profitability.

Yet again, this is a zero minimum balance savings account.

This ensures that you do not have to be under any obligation to maintain the minimum balance.

User convenience continues to be a buzzword in our choice of opportunities.

This too has basic facilities like checking account, debit cards and online banking facilities.

This, no doubt, improves account accessibility too.

It creates meaningful opportunity to access and deal with the savings in a convenient way.

That means users do not have to stretch their limits or means for accessing this health savings account.

That is a big positive for many who opt for this facility.

The fee structure is extremely favorable.

The monthly fee is waived off if you have a balance exceeding $3000.

For other investors with lower minimum balance, the monthly fee is around $2.75.

The investment fee is about 0.03% on a monthly basis.

But the maximum amount of investment fee does not exceed $10.

The reason why these numbers are crucial is that it shows how much of your savings are eroded.

When the monthly fee or the investment fee is higher, it reduces the total yearly savings.

– HSA Bank

You may choose this health savings account investment option for the relatively higher interest rate.

Investors in select cases can get as much as 0.50% on a balanced tier basis.

With no basic investment threshold and no minimum balance account, this offers a brilliant option.

It helps investors maximize savings without any additional burden.

This is what makes it one of the best available value buys in the market.

The total user base of this scheme exceeds 2 million and this is a FDIC insured option.

The investment options in this scheme are the biggest game changer.

Apart from mutual fund options, there are many other alternatives too.

It also allows investment in stocks and bonds via TD Ameritrade.

It also enables a self-directed mutual fund program.

That means this offers better option to realize the value of an investment.

The fact that they can invest across a cross-section of investment destination maximizes the profit potential.

In many ways, that also adds to the overall appeal of this investment opportunity.

The investment threshold for this is close to $5000.

This one too has all the basic convenience facilities like online banking, debit card option and checking facilities.

The fee structure is dependent on the extent of your savings here.

They have $2.50/month and $3/month investment plans.

It varies with the extent of money you have in your account.

If the checking balance is over $5000 a month, these fees will not be levied.

The investment fees have a tiered structure in terms of how much payment is required.

For equity, it is $6.95/trade and the self-directed MF program fee is $24 for a year.

The closing fee for this type of health savings account is $25.

But user reviews for this HSA investment has been very unfavorable.

– UMB Healthcare Services

This is another health savings account investment with 0.50% interest rate.

With features like 0 minimum balance, checking account facilities and debit card, it charts high on the popularity list.

The online banking facility adds to investor convenience as well as creates a potential for enhanced savings.

It also improves the overall accessibility of the HSA investment destination.

When you are choosing from a range of options, all these minor factors play a crucial role.

It goes on to determine, why you may choose one option over another.

The accessibility also enhances the ease of saving greater amount.

However, the investment option, in this case, is limited to mutual funds only.

But here the investors are spoilt for choices with investments ranging across 33 mutual funds.

This is also an FDIC insured account with the investment threshold around $1000.

This has a user base exceeding 1.25 million people.

That is an important consideration when you are trying to determine the consistency of a product.

You must understand that when people are consistently choosing the same instrument they are getting a distinctive amount of value from it.

After all, anybody who opts for an investment based health savings account is looking for definitive value.

The monthly fee is around $2.50, but it is waived off if you maintain a checking balance exceeding $3000.

The investment fee is relatively higher compared to some of its peers at $3 a month.

The account closing fee is much lower though at $15.

So overall, this is a mixed bag with some positives and some negatives.

The average rate of return is at par with most of the health savings account in this category.

This is what makes sure that there is a steady inflow of interested customers for this.

Opting for Multiple Health Savings Account Investing Alternatives

However what if none of the health savings account investments you look at don’t service your requirements completely?

There is something good in one and something in another.

Wouldn’t it be wonderful if you could combine the benefits of one with another?

Or, what if you managed to offset the problems of one with another?

This is exactly where you may want to invest in multiple health savings account in one go.

You can even divide your total contribution between an investing account and a spending account.

This will help you maximize the overall returns.

Let’s say that your annual health expenses for the entire family are close to $2000.

But as a family, you have decided to contribute around $6000.

So you can put the $2000 in a spending health savings account and invest the rest.

But you have to make sure that the total investment does not exceed the annual limit.

You can save on the transaction fees considerably through this.

Also, it keeps the money you need on an urgent basis handy.

That means you can take advantage of higher savings rate and at the same time cut down transaction cost.

This goes on to amplify your savings potential and cut down incremental cost.

The bottom line, therefore, is better value for money.

Conclusion

Therefore, we can conclude that deciding on the right investment opportunity can enhance savings.

Often people ignore the potential of the health savings account investment.

The idea is to look at them just like a regular retirement account.

That will make sure to keep a steadfast focus on HSA investment.

After all, it is never just about meeting your health-related expenses.

It is also an important vehicle to save taxes and enhance savings.

You can always look to maximize your dollar value by choosing appropriate HSA investments.

Moreover, your spending power also increases with proper health savings account investment.

Earnings Calendar and Stock Price Estimates

The earnings calendar is decidedly one of the most searched documents during earnings season.

It gives you both long-term and short-term cues for the market.

It helps you take a call on the markets.

Earnings calendar is like a ready reckoner for the top market cues at any point of time.

You get a perspective on the business fundamentals and technical triggers in one go.

For the uninitiated, the earnings calendar is that one cue that can pretty much seal their profit margins.

However, for many new investors, terms like earnings and earnings calendar can be rather intimidating.

In very simple terms, earnings refer to the quarterly performance results that all public listed companies announce.

Earnings CalendarThe earnings calendar is essentially a document that keeps a record of all dates when the various companies will announce their results.

It also gives time for the management speak post earnings and even earnings call.

But then are you wondering, it is the earnings that matter, why the earnings calendar?

Well, I am sure you know about the economic calendar.

It records data of all the important economic events.

Have you wondered why it is as important as the economic data that it documents?

The reason is quite simple.

It prepares the market for a variety of the events that are going to unfold.

Many investors may tweak their investments according.

Well, the earnings calendar plays a similar role in the markets.

The economic calendar offers broad market cues, but earnings calendar makes the cues lot more stock specific.

It is about how well you can prepare for every individual stock in your portfolio.

In fact, the earnings calendar offers one of the fundamentally most important cues.

They go on to impact individual stocks and market mood too.

Who Makes the Earnings Calendar?

The primary question is who makes the earnings calendar.

Most times corporates declare a specific timeline for their earnings.

They even mention a set time for declaring the results and conducting earnings call.

All this information is generally available on stock exchanges.

One way of getting the information is by browsing the individual company pages on stock exchanges.

By doing this, you can get information about individual companies.

There is also another way of getting the same information.

Most brokerages have analysts who research a variety of sectors.

Every brokerage covers a certain number of sectors and specific stocks.

Now the analysts often collate all the data together and put it out as one complete calendar.

You often see investment commentary sites like Bloomberg or CNBC also providing you with this collated data.

They have the in-house research division that collects all the data and lists them on one site.

The idea is to continue with the investor convenience objective that the earnings calendar is all about.

This collating the information from individual companies and jotting all together is a step in that direction.

It creates a one-stop shop for all the information and empowers investors a tad more.

Alerts Analysts About Urgency of Earnings Estimates

The moment a company declares its results, we tend to compare with the earnings estimates.

Analysts dish out instant estimates, put out tentative outlook and then compare with the actual numbers.

But have you wondered how they can calculate these numbers so fast?

It is not that easy to compute such complicated numbers at such a short notice.

You have to account for several scenarios, take into account different developments and then compile them.

Moreover, you will have to take the economic situation in consideration too.

Now with all these factors, it is essential to have time in your hand.

This is where the earnings calendar comes handy.

It keeps the market and the analysts on their toes always.

You can get information about the key earnings dates well in advance.

Analysts can then use this information to their advantage.

They can use the additional information to create a meaningful database of information that can help their analysis.

Additionally, this information helps them to tweak the information and estimates too.

For example, there is a distinct increase in retail sales during the holiday season.

So when analysts are computing estimates for January quarter numbers, they have to consider it.

But the April sales may not be comparable with November-December sales.

But the analysts are able to factor in all these differences only with the help of earnings calendar.

They can account for the changes in customer trends with the help of this calendar.

This is their most important vehicle to stay ahead of the curve and the trend.

Often the earnings estimate are calculated on the basis of when the earnings will be announced.

So the earnings calendar sets the tempo, tone and tenor of market movement.

Investor Convenience Is Primary

But more than analysts, it is the investor convenience that the earnings calendar focuses on.

Remember that the earnings calendar helps organize a whole gamut of data.

The earnings season is normally very hectic.

You have a truckload of companies announcing their numbers.

Now some market heavyweight companies impact the sectoral movement too.

Often their earnings impact how the rest of the sector reacts.

Moreover, when you have just one investor keeping track of a large number of data points, it can be overwhelming.

But with the earnings calendar, it is streamlined to a large extent.

Earnings of various companies are neatly stacked on a monthly, weekly and daily format

Most earnings calendars are very meticulous, so they also include a specific time for earnings too.

That means the investor is not just prepared for specific company earnings on a given day but also the time.

Often the earnings are arranged in an alphabetical fashion.

They may sometimes be arranged as per date.

So as a result, however, the earnings calendar may be organized, there is hardly any way to miss any result.

That means investors do not have to sweat about missing any information.

The earnings calendar is all out to help you with key details.

It keeps investors on their toes with all relevant information.

So if on any given day, you want to know what stocks to bet on, the earnings calendar provides necessary cues.

For example, if the street is estimating better than expected results by Apple, it sure means tech sector will be in focus.

Apple traditionally has a record of delivering better than expected results.

So it will make sense to bet on Apple or tech sector in the morning.

The prices will decidedly shoot up post earnings announcement.

Timing Entry and Exit in the Market

Normally an earnings calendar has some crucial data inputs about the market.

From the date of results declaration to the precise time when results will be announced, it provides crucial triggers for the market.

So on any given trading day, it provides investors the most important stock cues.

For example, if results are being announced today, I will avoid taking fresh positions right today morning.

This is if the estimates suggest that the results may not meet expectation.

Moreover, there is often volatility in the specific counter or sector ahead of results.

So the earnings calendar offers investors key inputs about when to enter and exit the markets.

Timing the markets is one of the trickiest aspects of trading.

The markets are uncertain in nature.

You can never predict the market entirely.

What most investors rely on is the overall trend and direction of trade.

The earnings calendar is that unique key that helps investors get an edge.

It often gives you a hint of cue that you must follow.

Let me give you one real-life example.

One morning soon after trading began I noticed that a small cap counter was racing forward.

I checked, but there were no real cues that can justify.

Very intrigued, I kept looking for a trigger that may drive up prices.

In that search, I looked into the earnings calendar too.

It had announced results, but there was nothing extraordinary in the numbers either.

That is when I noticed that the earnings calendar also listed an earnings call same day evening.

The management was very positive about the future outlook.

The stock jumped as the company expected sales to double next year.

There you see how the earnings calendar helped me navigating my trade.

Earnings Calendar Influence Stock Picks

This is particularly an important trigger when it comes to stock picks.

An earnings calendar is rather useful in this context.

Let us say I have a specific number of bluechips in my portfolio.

But I am now keen on incorporating a few midcaps too.

The question is how I look for value buys in the midcap segment.

The earnings calendar offers important clues in this aspect.

One simple approach is analyzing the earnings and looking for the best bets.

Basically, the fundamentally strong companies will deliver strong results.

They may exceed estimates or may be in line with the analysts.

Most importantly, it is important to analyze the management view.

The earnings call timings are also listed in this category.

The management often gives out key projections about their future in these earnings calls.

Many companies undertake conference calls with analysts too.

Even that is listed on the earnings calendar.

That also offers key stock cues for the investors.

Investors who are tracking a specific company for a certain number of years know them lot better than most investors.

So when they ask management pointed questions about their growth, you know the triggers that you must look for.

So you get a treasure trove of information about a specific stock.

All of this is powered by the information from a single earnings calendar.

It is, therefore, a powerhouse in terms of providing market cues.

It is practically a one-stop shop that offers you every possible clue about the stock.

Using that one earnings calendar, you can estimate the business fundamentals.

It also offers future growth triggers and other growth catalysts.

It tells you the exact timeline when you can expect certain development.

That decidedly plays a key role in creating a convincing investment plan.

Cues For Futures Trade Tool

The Earnings calendar is a necessary tool for day to day trading.

Even if you see the way futures trade pan out, the earnings calendar offers crucial information.

Let us understand how a futures trade pans out.

Invariably, you have a host of speculative stock positions.

Futures is all about assuming that a particular development will happen in future.

The pricing is effectively based on these assumptions.

Let us say that the investors expect the price to go up or down on the basis of key factors.

The earnings is one such unique factor impacting stocks significantly.

I know that the earnings will be announced by a company in a specific month.

So if the estimates are already doing the rounds, then I can take a futures position based on that.

This will help me get an edge over other investors who may not track the earnings calendar.

Moreover, the information about earnings call is also available in the same calendar.

Investors can easily log on to these earnings call and tweak their futures positions accordingly.

They provide important outlook about the future that can easily help you to book meaningful profit.

Another reason why earnings can offer meaningful futures trade is that of the pre and post-market trade.

Many markets want to avoid the volatility in the regular trading hours.

So they go ahead and announce their earnings in post-market or pre-market trading hours.

Now if you already know the time when the earnings will be announced, you can easily position your trade accordingly.

It will help you get an edge over other investors who may not have access to either of the factors.

This is, therefore, one of the most important advantages of keeping a regular tab on earnings calendar.

Take Advantage of Historical Price Movements around Earnings

This is another way of gathering stock cues using the earnings calendar.

The earnings calendar is never about just future earnings date.

It practically records all the earnings date, previously and in future.

In that context, investors can also track the stock movement historically.

It will help you get a firsthand idea of how the stock is set to move.

This is useful as it becomes the key insurance against potential miss by analysts.

Let’s face it; analysts are human after all.

It is possible that they may not always be successful in anticipating the earnings.

There can be one-off triggers that can significantly impact the overall study.

More importantly, different analysts will employ different parameters to base their analysis.

But if you take a note of the previous earnings date from the results calendar, you can easily gauge the mood and the stock reaction.

Of course, this may change based on negative and positive results.

But tracing the historical charts will give you a basic insight on the trend and direction.

Analysis at that juncture becomes fairly easy.

It helps you important conclusion about the price trends in a specific stock.

The only way you are getting all the data and analysis is the earnings calendar.

It offers you a host of historic data and empowers investors with useful trading know-how.

Often this is the basis of many technical analysis.

So even experts refer to this historical data for better know how.

The whole idea is to take a peek into history and look for clues for future.

This will help in getting a much deeper and better understanding of specific stock behavior.

Needless to mention, it adds more power and depth to their market understanding and stock position.

Conclusion

Therefore, if you are looking for the single most power stock market tools, the earnings calendar is one such alternative.

What is striking is, it is inconsequential in itself but helps you get a truckload of information all at once.

You may not be able to track corporates one by one individually.

But the earnings calendar helps you get all the information under one title.

So in many ways, if you are looking for a ready reckoner in the market, the earnings calendar is the best option.

If you are looking for fundamental cues, technical assistance and want to dig into historical data, the earnings calendar is the best option.

How to Read Stock Charts Properly

Learning how to read stock charts is an art in itself.

The stock charts are practically everywhere.

You switch on the television or open a stock magazine; these charts are practically everywhere.

You want to read the stock charts, but the problem is way too much data.

Often the sheer inflow of raw data can be overwhelming for new users.

Without understanding how to read stock charts, we often rely on experts to guide us.

But the fact is they rely on these stock charts to guide you.

So, all the information that you need is stored right here.

The good news is you can actually be on top of the charts.

Investment in stock markets is all about application and practice.

It is essentially about how you can use the market forces to seal your profit.

But the problem is most of us start investing with no real understanding as such.

How to Read Stock ChartsOur motivation is often the kind of profit our neighbor clocked.

This is the reason that there is a severe need for skill up gradation as we progress in trading.

How to read stock charts properly is more about experience and diligence in trade.

This is the key factor that differentiates a novice from a professional.

It empowers you to make informed choices in terms of boosting your investment.

That will then help boost the profit margin to a large extent.

Tracking the stocks and the charts closely ensure that no one can mislead you regarding markets.

You can analyze the stock movement and take a call on the risk involved.

This is one concept that can provide better value to the investor.

They are able to identify trends and long-term call based on a meaningful evaluation.

What Is a Stock Chart?

Before you learn how to read a stock chart, it is important to understand what is a stock chart?

Very simply put, it is a graph that etches out the stock’s movement.

It is plotted using price points at which the stock is trading at a certain level.

A typical stock chart has an X-axis, Y-axis, time duration.

So technically, this is a regular chart that you learned plotting at the high school.

What is interesting is the time period that is used for charting this.

It can be charted on daily basis or a weekly basis.

You can even have charts spanning over months, years and sometimes even from the time the stock started trading.

Candlestick ChartDifferent time periods help you understand different aspects of price trend in the same stock.

You get to know key elements about the highest price the stock ever traded.

This may also vary depending on the time period you chose.

Similarly, even for the lows that the stock hit, these charts are very easy reference points.

This is perhaps the basics when you set out to read stock charts in a comprehensive way.

Apart from tracking the regular opening and closing rates, you also get an idea about the tentative range that a stock operates in.

The stock chart may be plotted differently for different purposes.

On an average, you have

1. Line Chart

Gives a clear picture of the overall stock price movement and how the stock is panning out.

2. Bar Chart

This helps you to identify the prevailing trend and also time your entry and exit.

3. Candlestick

Candlesticks are visually appealing and invariably very convenient to interpret.

Your final analysis is generally a sum of these elements in harmony.

The idea is to master them individually and together.

How to Read Stock Charts

But there is a huge sea of information, and the question is what should you read and how?

The most critical information in your stock chart is undeniably the state of the stock.

What do the prices indicate, how are they poised and what is the trend direction?

This is undeniably one of the most important information that you can get from the charts.

It is most important to understand whether the price you are buying the stock is appropriate?

You can get it higher or lower going forward.

But as long as you can identify a broad trend, you can also create standard risk assumption.

It will tell you whether the stock is in between, middle or end of trend.

That is an important premise to base your judgment upon.

The next important factor to read is how strong is the trend?

As an investor, you must probe if this is a momentary blip or a long-term trend.

That alone will help you make a convincing call about the future.

The trend lines are crucial indicators for a fair assessment.

It gives you an idea about the wave that the specific stock is in.

Based on these charts, you can also calculate moving averages.

The support and the resistance levels are also very clearly etched out on the stock chart.

All of these numbers are again important indicators.

They tell you if a rally is in the offing and if the chart will break out any time soon?

The charts will also show the general market sentiment on the stock at this point.

All of these are important factors in learning how to read stock charts properly.

They help you proceed in step by step format to understand the nuances of trade comprehensively.

1. Analyzing Price & Volume in Stock Chart

When you learn how to read stock charts, price and volume are some of the basic parameters that you master.

You must remember that different types of charts display different information.

But one basic factor is constant about all charts.

They all highlight price and volume movement.

So whether you have a bar chart or a line chart or Candlestick, it is hard to miss this one.

Every stock chart will demonstrate the price and volume movement at a given instance.

The price history is perhaps one of the biggest constants across the stock chart.

Depending on the period the chart is plotted, you have a fair idea of the price movement and volumes involved in the trade.

Let us take the example of a daily chart first.

So here you will have the price points the stock hit on a given day, from the start of trade till the end.

But when you see the weekly chart of the same stock, it is computed on a weekly basis.

Perhaps that is why this one will have the closing rates of each day.

In other words, it highlights the weekly assessment of prices.

So if you have sharp ups and downs in price movement, you have pronounced peaks.

At the same time, if the price movement is range-bound, you will see the stock price plateauing at that point.

The next is the volume of stocks that are traded.

For every time period that the chart is computed, you will see this bit highlighted.

You will see the kind of volume that has been traded for a specific period.

This will often give you hints about the distinctive interest and trend.

Therefore, both these factors offer crucial information about the broad trend in the market.

2. Dealing with Moving Averages

Moving AverageThe next most important element that these stock charts reveal is the moving averages.

These are primarily plotted to ease out volatility and provide a definitive trend for the stocks.

They offer a direction in which the stock is moving.

They also provide an appropriate context for the overall price and stock movement.

Any potential divergences then become more straightforward to spot.

You can easily identify any possible aberration from the normal trend.

One of the most common and talked after moving average is the 50-day Moving average.

This is undeniably one that is followed most extensively.

It offers the price movement of a stock over a 50-day period.

So you easily get the average price over the 50 trading sessions.

Another widely followed benchmark is the 200-day moving average.

In this, the stock’s movement is traced over 200 days and then the average price is calculated.

Well, I am sure; you understand that this is the average price over 200 days or 50 days.

But the question is how this information helps me to read stock charts?

More importantly, how do I interpret this information to my advantage?

Well, you see that most financial investors prefer to see the moving averages trend up.

Another factor is that they prefer the stock price closer to the trailing average.

They consider that these two are vital signals indicating that the stock is trading in the right direction.

In case you are looking for value buys, experts will tell you that you must look for stocks that are trading below the moving average.

They hope that they are picking the stock at a discount and it will soon catch up with the key averages.

The volume during this period too plays a crucial role in determining stock value.

3. Interpreting Support and Resistance Levels

Apart from the volume and averages, there are some other key levels too.

It is important to analyze these levels in the stock chart as well.

Normally these levels are crucial in determining the entry and exit points in a stock.

You have understood fairly well that charting stock price is all about creating price points.

Certain prices offer reasonably good entry points.

On the other hand, the price may offer good levels to book profit.

Again I am sure you have heard about the psychologically important levels.

Often when the stocks breach these points, they are said to embark on a new trend.

These levels are often referred to as the support and resistance levels.

On the stock charts, you can see them as troughs or peaks.

You will notice that the stocks tend to drop around certain levels and then they rebound.

Support refers to the lower price from which they rebound.

In many ways, these become a floor of sorts for the stock price.

Similarly, there are points till which a stock rises, but they are not able to go beyond that.

They repeatedly face resistance at the price zone.

As a result, that level is popularly referred to as the resistance zone.

As a result, the support and resistance levels are key price points to watch.

When the stock breaks through any of the two levels, it is indicative of a new trend.

You see stocks embarking on a renewed uptrend when they break a resistance zone.

Similarly dropping below support levels may be worrying and this may lead to renewed selling.

Therefore, both these price points help determine your stance on a given investment.

Depending on what level it has cracked, you can take a call on future action.

4. Identifying Dividend & Stock Split Trends

When you are learning how to read stock charts, remember they don’t just point to price moves.

The charts almost invariably also point to every small and big development in the stock.

Therefore, they also highlight significant movement in the stock price around this development.

Normally a stock split and dividend issue is a fairly important event for the stock.

Most stock charts record this event towards the bottom of the graph.

A dividend is a small share of the profit that the company decided to share with you.

This will also depend on the exact amount of stocks that you own.

So when you read the stock charts carefully, you will be able to note down all these development thus far

Often this historical record will also offer you key inputs about future movement.

So, in a way, this chart helps you understand the individual stock movement at certain specific points.

This may also offer an interesting insight into future stock movement.

The stock split is another such development.

This is essentially a board decision that allows more share offering to the public.

But at the same time, it is important to take note of the share value at these points.

Remember the core value of the company may not change but the share price will.

Often a share split encourages more investors to buy the stock.

So, the charts will showcase a definitive uptick.

So, at certain times, the stock split leads to increased demand.

That always has a bearing on the overall stock price.

It will, no doubt, be impacted by any change in demand.

The core idea is to carefully observe the stock movement at all such points and tally the critical price points.

This will help in identifying important price points.

Why Is It Important to Analyze Stock Charts?

Now we do understand that a stock chart reveals crucial data.

But do we need all that data in our day to day trading?

More importantly, how can that data help us in getting an edge in our investment?

Well, to understand this element, you need a broad understanding of how the market works.

The average retail investor like you and me form a minuscule part of the entire trading shenanigans.

Fund managers and big institutions actually undertake almost 80% of the net trading activity.

Most of the stock movement that you see is the outcome of the variety of stock calls that they take.

Most of the price movement is the outcome of the buying and selling that they undertake.

So as a retail individual investor, you have to merely be part of the trend.

You have to watch out for your long-term goals and ensure that you can realize a relative amount of profitability.

This is where the stock charts will help you achieve this goal.

Learning how to read the stock charts properly will ensure that you are able to identify the trend quickly.

You can then use this information effectively to preserve your profit.

Remember your relative stake in the market is much lower than these fund managers.

Your trading call will not impact the market.

But these charts will help you safeguard your investments from becoming prey to aggressive selling or euphoric buying.

Conclusion

Therefore, retail investors like you and me need the stock charts to make informed choices.

Buying stocks and tracking charts is not just about identifying key price points.

You have to apprehend the trend appropriately and create meaningful investment positions.

In this regard, learning how to read the stock charts properly can help you to a large extent.

Knowledge is power and knowing how to read stock charts will help you wield that power.

Retirement Savings by Age and Why

Retirement savings by age is invariably tricky business.

Whether you like it or not, age plays a crucial factor.

It is essential to know whether you are ahead or behind the retirement savings curve.

This is the reason why retirement savings by age is considered an important element.

Often this is that crucial factor that helps you assess the extent of your retirement savings appropriately.

In fact, often the trick and tips for retirement savings are closely linked to this factor.

After all, this is not just any savings but one of the most important financial goals for anybody.

Ideally this is your nest egg that will sustain you through ups and downs in your older days.

Retirement Savings by AgeThis is that kitty that will give you financial independence when you are no longer in a state to work.

It offers you that necessary confidence and means to live life your way after you retire.

But the trick is how you can tip the retirement savings scale in your favour.

Let’s face it; few start thinking about retirement in the late 20s or early 30s.

Mostly by the time, you start considering savings, you have passed your prime already.

That is why retirement savings by age becomes so crucial.

It gives you the confidence that it is never too late.

If you do a proper assessment, you can achieve your financial goals to a certain extent.

By the time you retire, the age by which you start the savings does not matter.

All that matters is the right amount of money is there at your disposal.

So we created this quick and convenient guide to help you glide through retirement with ease.

This is a handy retirement saving by age ready reckoner useful for all ages.

How Much Should You Save By Retirement?

The moment we discuss retirement savings by age, the critical concern is how much do you need.

The retirement savings amount will keep changing with age and your financial situation.

The 80% rule is perhaps the most pertinent.

Most financial experts believe that you must have at least 80% of your pre-retirement salary every year.

That means if you are earning around $100,000 just before retiring, you must be able to generate at least 80% of it.

That means your retirement income has to be around $80,000 annually.

That will make sure that you have a comfortable and well-provided life even after you retire.

Depending on the source of income and regularity of income, you may adjust this figure up and down.

It will also depend on the kind of lifestyle that you may choose to live after retirement.

Remember this is a ballpark figure.

It will change marginally depending on individual circumstances and situation.

The basic idea is to provide adequately for future necessities.

Most importantly, this savings has to be inflation adjusted.

That is exactly where retirement savings by age becomes very crucial.

But the question is how you make sure that you have $80,000 annually after retirement.

This is where the 4% savings rule comes to play.

This will give you a fair idea of the retirement savings you must have to generate the type of income you want.

Let us take the previous example of $80,000 annually.

Divide this amount by 4%.

So your nest egg has to be close to $2 million.

This, of course, assumes about 5% return on your investment and no scope of additional income.

But remember this is just a broad assumption.

The real needs may differ slightly depending on the variety of circumstances.

Average Retirement Savings Seen Thus Far

Now let us move from the realms of assumption into the reality.

It is a good idea to assess the average retirement savings by Americans.

That will give you a basic idea of how much you must have

We know that there is always one ideal savings limit.

But most times, this may be an uphill task for many.

The US Economic Policy Institute claims that the average retirement saving is well above $95,000.

But you must remember that almost half of US families do not have retirement savings.

The retirement super savers often boost the average number in this regard.

Perhaps the median retirement savings is a more realistic representation.

The median savings, in this case, is often as low as $5000.

Now that is a whopping $90,000 gap between the two numbers.

Probably it highlights the variations and differences in retirement savings trend in a conclusive fashion.

Different age groups have different savings habits.

But the good news here is whatever your age may be, there is always scope to save more.

We have broken down the average savings in an age-wise format.

This will help our readers how much they need to save and when.

The age wise formatting often helps to serve as a clarion call.

This will make sure that whatever age you may be, you can boost your retirement savings.

This, in many ways, will also help you estimate the tentative figures you have to keep in mind.

After all, retirement savings by age is creating a target based financial plan.

It makes sure you can fill up the savings gap in creating the appropriate nest egg at every level.

It is often the most realistic retirement savings plan for both professionals and business owners.

What Is the Ideal Retirement Savings by Age?

1. Ideal Limits for Those in the 20s

Most of us begin our careers in our mid to late twenties.

Most times savings is perhaps the last of the prerogatives.

There is that euphoria of income coming in.

Along with that individuals are struggling to balance low wages and huge student loan burden.

This is, after all, the millennium generation.

If you take a realistic retirement savings assumption, most estimates peg it around $30,000.

Most financial experts peg that at 25, they must save enough to make sure they have at least a year’s salary by 30 years.

According to the US Labor Bureau, the average salary of the 20 something is $40,000 plus annually.

This means that they may have to save close to 60-65% of their salaries as retirement savings.

That will make sure that they are definitely on track to save adequately for a decent nest egg by the end of their professional career.

Remember your savings will last you for at least 30 years after you retire.

So it is very important that you provide for your savings accordingly.

The average growth rate of your nest egg is around 5-6%.

This is taking into consideration only basic interest rate on savings.

It does not account for additional salary or heightened interest rates.

Those are always additional factors that can surely boost your savings to a large degree.

But the $30,000-31,000 is the key figure to take into consideration.

That amount will make sure that you provide for the nest egg appropriately at this stage.

2. Ideal Limits for Those in the 30s

This is a crucial phase in anyone’s life.

By the time you reach 30, you have been able to pay off most of the student loan.

Most importantly you learn how to negotiate salaries.

On an average, individuals start earning a lot more at this stage.

So they have a relatively higher amount of money that they can allocate to savings.

However, this is invariably also the age when they begin to consider settling down.

They get married and many have kids too.

Again, retirement savings is hardly on the priority list.

Marriage, house, children and their education is the predominant consideration.

But at the same time, remember even the smallest of savings can enhance the overall nest egg.

The stress should be creating effective savings habit.

Remember we spoke about the retirement supersavers skewing the balance, this is the age to get started.

Learn to create a budget and then stick to it in a holistic manner.

Create spending records to keep a careful track of every penny that you have spent.

The least that you can do is begin to match the 401(k) contributions.

That can go a long way in boosting the overall kitty.

Between the age of 32 and 37, the average savings hovers close to $32,000.

This amount increases dramatically as individuals move to their late 30s and approach early 40s.

Between 37 and 45 years of age, the salary and savings number sees a sudden jump.

The annual average salary spikes up closer to $68,000 as they approach closer to 40.

Now, this also has a relative bearing on the amount of desirable salary and what they can save.

So most experts say that by 35 individuals must have twice their annual salaries saved.

This is on the basis of various factors impacting savings

3. Ideal Limits for Those in the 40s

Now, 40s are one of the most crucial phases in an individual’s career.

The chances are your salary negotiation skills are at its zenith.

This also means you are earning a lot more than you ever did.

But the problem is that this is also a phase where your salary may be close to peaking.

You may be carrying a lot less debt and your salary is at the peak.

Therefore by the early forties, you must target at least 3 times your salary saved.

By the time you are forty-five, this amount needs to rise to 3.5x your annual salary.

But remember there are some crucial pressure points at this juncture.

Chances are your kids are graduating from school.

If you have not already provided for it, there is urgent need to address it.

The average salary at this juncture is around $67,000.

By late 40s, around 48-49 years the salary increases to over $80,000.

This is a crucial phase for individuals.

There is more money available and at the same time, you have time running out of hand.

On a monthly basis, if you apply the 80% or the 4% rule, you will still need to save 25-30% of your monthly salary.

That will hold you in good stead to work out a reasonable nest egg.

The actual savings rate of most Americans is much lower, barely 5%.

There is potential to save at least 20%.

So that is where the gap between average and median savings springs up.

Moreover, individual salaries and liabilities will also have to be accounted for.

On the whole, you can deduce that it will be a good bet to save anywhere between 20-25% of your salary.

This is often the make or break period in creating comfortable retirement savings.

4. Ideal Limits for Those in the 50s

The normal back of the hand calculation signals that by the time you are 50, you must have five times your annual salary.

You have already past the prime in terms of career and salary opportunities at that stage.

The only positive is at this stage, most of the liabilities are behind you.

The children are already pursuing their chosen career.

You may have already repaid your house loan, provided for children’s academic needs.

But this is also the stage where medical needs start taking precedence.

This is a phase where individuals begin to provide for their future medicare needs.

While you are in your early 50s, you may target 27% of your salary as retirement savings.

If you follow the retirement savings by age policy, this percentage reduces somewhat post 55.

Between 55-60years, individuals will have to target saving about 20-22% of their salary.

This is in many ways a phase when you can begin to take things a little easy.

If you have followed a decent savings graph thus far, you have a reasonable cushion to fall back on.

Another advantage is that post 50, you get an opportunity to supercharge your savings at this juncture.

You can even start making catch-up contribution in your 401(k) account.

As per targets set by financial experts, you need average $1 million retirement savings by the end of your 50s.

However, the real numbers are much lower.

On an average statistics indicate that the retirement savings at this age are closer to $164,000.

That is significantly lesser than what the experts suggest.

So 50s is practically your last chance to play catch-up on your savings.

This is the time you take stock and undertake whatever possible course correction.

Beyond this point, you may not get an opportunity to fill the gap.

5. Ideal Limits for Those in the 60s

When you are considering retirement savings by age, this is pretty much end of the road.

While you are in your early 60s, the average calculation points to 6 times your salary.

If you consider the median retirement age as 65, your savings have to continue at the same rate as your late 50s.

So target anywhere between 18-22% of your salary.

But remember the retirement savings amount that we have outlined thus far is the pre-tax amount.

It is also the time to take stock of the basic return on the savings you have done so far.

That will also have a bearing on the final nest egg.

Your late 60s is also the time that you have to start undertaking lifestyle changes.

The idea is to get used to a fixed income amount.

That means you do not sit back and relax with whatever you already have.

This is the time to explore every other opportunity to boost the retirement savings.

That is how you can make sure that you have a comfortable amount saved for your retirement days.

Taking a realistic perspective is very important at this juncture.

If at all there are options to boost your salary, this is perhaps the only opportunity left.

Conclusion

The numbers and percentages that I have offered here for creating retirement savings by age is an average.

Remember when it comes to savings and retirement nest egg, there is never a formula that fits all.

You have to take into account changing expense scenarios and differing lifestyle.

Moreover, no two people may be earning at the same rate.

You have to also account for social security money that will be added to your retirement savings.

But at the same time remember retirement savings by age is largely the pre-tax amount.

So you have to take steps to gradually add to your retirement savings.

Moreover, a systematic approach like retirement savings by age will ensure a comfortable nest egg.

Will DJIA Futures Go up or Not?

DJIA Futures play a distinctive role in the markets.

The DJIA Futures is the abbreviated version of Dow Jones Futures.

DJIA is the symbol with which this Future trades on the exchanges.

On an average, most market men consider it as one of the most definitive market indicators.

Often beginners in the market may be confused about the role played by the Dow Futures.

They are unable to comprehend why the Dow Futures signal the market pace in such a significant manner.

DJIA FuturesFor that, it is very important to understand what’s the DJIA Futures?

That alone will help them in understanding the role it plays.

This is one of the most important indicators for the market.

The question is then why does it play such a pivotal role.

Most importantly, there are fundamental concerns like is it different from the main Dow Index?

So that goes on to establish the need for understanding the basics of DJIA Futures.

Moreover, a better understanding of the core component also helps you identify the triggers.

So let us first get a detailed understanding what comprises the DJIA Futures and how you can trade it?

Knowing What Is DJIA Futures

In simple terms, these refer to future contracts of the Dow Jones.

A futures contract is generally a legal agreement between two parties.

It can be between two individuals or even an institution.

They agree on a certain payment arrangement on a specific asset class based on price movement.

They are legally bound to transfer the asset or the money as per the terms of the contract.

So it is like going to a shop and buying a dress.

Both the parties strike a deal.

Let us say they expect the Dow to hit a certain level by a certain date.

Now X agrees to pay Y the difference between the actual closing price and the expected rate on this specific date.

But in this context, the futures are slightly different from Options.

In case of Options, the holder has the right but not the obligation to exercise it.

But a Futures contract has to be exercised on the appropriate date of settlement.

These DJIA Futures trade on the exchanges.

So indirectly the exchange becomes the counter party for the position taken.

That undeniably adds a certain degree of reliability and credibility to the whole deal.

Trade on these counters starts about an hour before markets open.

They become a crucial element of the pre-market trade.

As a result, they become a major indicator of the overall market sentiment.

They signal the broad market trend and shape the sentiment largely.

So it is extremely relevant to analyze if the DJIA Futures are set to go up or not.

The broad consensus is if they shoot up, it will keep the market buoyant.

For example, if a company declares earnings and the DJIA Futures shoot up, there is a good chance the broader markets will rise too.

Why Is It Important to Know If the DJIA Futures Will Move Up?

We have seen a dream run in the markets through 2017.

Though the first half of 2018 saw a bit dampening of the euphoric element, the markets are on the rise.

DJIA Futures Price Chart AnalysisTherefore, it is but obvious that there is a certain element of fear about a potential crash.

Many experts say that the markets are on the last leg of the recent 9-year bull run.

Now that is an ominous aspect to consider.

Many investors are still recovering from the scathing impact of the last market crash.

The current Bull Run stands on the solid foundation of economic revival and earnings growth.

But the fear factor in the market is almost like the Oxygen we breathe.

You cannot do without it.

Often, it is the fear that acts as a moderating element in the market.

It brings down speculative positions and creates a ground for long-lasting fundamental trades.

But all of these is in the realms of imagination and expectation.

The only element that can provide any real-time insight is the DJIA Futures.

There is a two-pronged advantage in following the Futures contract.

On the one hand, these are Futures contracts.

The prices of a subsequent month contract can offer some clues about the future trend.

Moreover, the DJIA Futures indicate the Index movement and trends.

It goes without saying that the Index will always precede the markets in terms of any movement.

So just following the Dow Futures can often provide investors with key inputs about the future trends.

This is a particularly important element to consider for long-term as well as short-term investments.

As a result, the DJIA Futures offer important clues about the market.

It is, therefore, necessary to track its movement very closely.

DJIA Futures Outlook till 2020

One of the biggest determinants of Future price trend is the rate at which the forward month contracts are trading.

They offer a realistic view of the extent of price movement that you may see going forward.

In many ways, this is also an indicator of the sentiment and the market discretion.

Most forecasts peg that the DJIA Futures may end 2018 closer to 26000 levels.

That would mean that there is going to be at least 8% price appreciation from current levels.

But that is not all.

Most indicators and analyst reports present a favorable picture for the next two years at least.

While it may be true that we are in the last leg of the current bull run, but this bull run is not getting over in a hurry.

Even the most conservative estimates project a 35% gain by the end of 2020.

Forecasts indicate that the DJIA Futures is well on track to cross the 30,000 mark by the end of 2020 May.

That, in very simple terms, indicates just one thing, the DJIA is set to go up going forward.

While incrementally, the month on month change may not be huge.

But the fact is that the Index is well on its way up.

A close study of the projected forward month contract prices indicates that the change is gradual.

It does not have the heady speculative euphoria of 2017.

But between 2018-2020, there is a decided uptrend.

Perhaps the slow and steady pace of the uptrend is the most heartening part of the upmove.

There is no crazy race to 30,000.

On the contrary, the DJIA Futures indicate that the markets are set to climb in a gradual fashion.

That means there might be some consolidation too on the way.

Technical Indicators

When you are analyzing the Future price movement, technical indicators do play an important role.

You may say that Technical indicators are presumptions based on chart patterns.

But for that matter, the entire forecast game is about assumptions.

Whether you assume an economic development or a price barrier, none of us really have the crystal ball.

All forecasts are based on certain assumptions and price patterns.

In this context, the technical indicators do have a crucial role.

Whether you are looking at the support levels or the resistance zones, it gives you a sneak peek at the key levels to watch out for.

The 25000 level in this context is a very crucial one.

It is a psychologically important level for the markets.

What is particularly interesting is that it has seen some pullback at that level.

This is an indicator that there is no mindless rush to breach the level.

The market is taking its time and devoting sufficient attention before finalizing a pronounced breach.

As US and Chinese trade worries are ebbing, the timing also seems to be appropriate.

We must not forget that the 25000 level is also a structurally important point.

It is that one level that all types of charts are converging at and pointing towards a decided upmove.

It is a point where both the analysis and the moving averages are on the same page.

All the key moving averages along with the technical indicators imply a distinct room for growth.

They align at a definitive level and indicate a clear opportunity to rise further.

The 25001.80 is the pivot point.

A clear uptrend is in the offing as the markets have managed to cross this point with conviction.

It, therefore, implies that the DJIA Future is set to go up further.

Market Sentiment a Strong Buy

When you are analyzing whether the DJIA Futures will go up, the analyst call is a crucial factor.

It does not just give you a fundamental call on the counter.

The analyst calls are most times supported by a series of anecdotal and circumstantial evidence.

This is why an average investor like us rely so heavily on the analyst call.

If you undertake a quick search on the overall outlook for DJIA Futures, you will realize it is a Strong Buy across geographies.

This unanimous call for growth is in itself is a big indicator in itself.

It tells you that most serious market participants are convinced about a definitive upmove.

The target levels may differ from analyst to analyst, but the uptrend is a decided given.

The US-China trade talks is one of the most important catalysts for this uptrend.

Most analysts say that these talks settling down may provide the next growth trigger.

Moreover, it is very important to understand that any sustained uptrend will have to be supported by strong growth signals.

China and US together command a sizeable chunk of the world economy, trade and markets.

Significant progress in trade between the two countries can only reinstate future growth catalysts.

High tariff on the automobile has been one of the most significant US complaints.

This may well be on the road to reconciliation in times to come.

China has announced it will cut import tariff on automobiles and select car parts too starting from July 1.

The expectation is that the tariff will be lowered to 15% from current 20-25%.

Tariff on automobile parts may also be cut to 6%.

This is what is set to trigger growth in individual companies.

That is what is likely to sustain the DJIA Futures’ uptrend.

Earnings Outlook till 2020

Now, what is the growth outlook based upon?

When you are analyzing the DJIA Future’s uptrend and the growth that is supporting it, this is an important consideration.

The overall growth outlook is, after all, a function of earnings.

All around businesses are on the growth trajectory.

The DJIA Futures derive its value from the Dow Jones Industrial average.

If you carefully study the outlook for the future of these companies that comprise the Dow, there is good news in the offing.

Earnings for most companies is seen growing in a steady fashion.

Though the extent of the individual growth may not be huge, it is likely to be steady and stable.

This is primarily on the back of sustained GDP growth in Europe and China.

ECB’s Mario Draghi is likely to continue with its stimulus measures.

This is seen as a key catalyst to revive reasonable growth prospects across Europe.

This, in turn, will impact markets in the United States in a sustainable manner.

The US Economy on its own also is on a definitive positive trajectory.

Both these factors together are likely to push growth forward in a convincing manner.

So most investment analysts and strategists expect a slow but reasonable growth going forward.

That is likely to support the Dow Jones Industrial Average and the DJIA Futures too.

This is one of the biggest factors that will help earnings growth for corporates in general.

Earnings growth means that the fundamental business development is not compromised.

That also means that the true import of the growth will unravel in 18-24 months.

Just in case of a slowdown, even growth impact is seen in a gradual fashion.

So going forward, the DJIA Futures is likely to maintain its upward trajectory on the basis of this catalyst.

US Dollar Index & the Cues for DJIA Futures

Last but not the least, the cues from the Dollar movement is very important.

As you may know, the Dollar acts as both a haven for investments and a possible hedge against market uncertainties.

The Dollar movement also has a distinct impact on the interest rate outlook.

In this context, it is important to mention that 2018 so far has been a dollar positive year.

The Dollar Index hit important resistance levels, but the upmove in the greenback has halted after briefly hitting highs.

That could well be good news for investors.

It only means that the Fed may not raise rates despite this in the near future.

This is because the Dollar may not be able to sustain its gains in a convincing fashion.

The assumption is that though the Dollar Index has hit fresh 2018 highs, this is more due to external triggers.

That means there isn’t too much strength in a fundamental uptrend.

It goes on to highlight that the Fed will not be in a position to take any conclusive decision on the basis of this rally.

That means interest rates may continue to remain in the current levels for an extended period.

Low interest rates will always be positive for businesses.

So it is but obvious that any kind of business growth will always help the DJIA Futures to grow.

Another key trigger for the dollar’s inability to reach higher ground may be the Euro.

The Euro has been muted due to the political conditions across Europe.

This will be seen as a major dampener in any sustainable rise in Euro levels,

That, therefore, becomes another reason why the DJIA Future may go up going forward.

Conclusion

The DJIA Futures is representative of the fundamental trend in Dow and the broader markets.

Most forecasts and analysis indicate that the DJIA Future is on its way up.

30,000+ plus levels for the DJIA Futures by 2020 is one of the most popular expectations.

In many ways that also sets the tone of the market movement.

The Dow is definitively one of the biggest representatives of the global market trend.

Any uptrend is almost always punctuated by strong business growth and fundamental factors.

Though the fear of a pullback is gaining momentum, the DJIA Futures indicate that all’s well.

At least for the immediate term, the DJIA Futures will continue to go up.

30000 plus level is the next definitive resistance zone for the DJIA Futures.

The expectation is that the gains in DJIA Futures will continue till that level.

Inflation in Simple Words

Inflation in simple words is one of the most commonly talked about elements of the economy.

Whether you are planning your retirement or you are discussing markets, inflation finds mention in every single discussion.

It will not be wrong to say that this is decidedly one of the most talked elements about the economy.

It is in many ways one of the most tracked economic indicators as well.

Almost every discussion about economic growth, slowdown, revival and worries are punctuated with a mention about inflation.

So no one it is one of the economy’s biggest obsession and necessitates a detailed discussion on it.

One of the most explanations is that of the rising process all around.

What Is Inflation?If you ask, most people will refer to articles becoming expensive as the most obvious reference to inflation.

The price rise, though a function of inflation, is only one of the elements associated with it.

There are several other factors too that impact inflation.

Inflation is also one of the earliest indicators of the changing economic scenario.

In many ways, the inflation can often be the best gauge of economic progress or slowdown.

It highlights the core problem areas and the pockets of advantage.

In short, it is your ready measure of both economic and market imbalances.

Be it currency fluctuation or commodity prices, inflation often explains most of these elements and the changes therein.

Therefore, inflation is no doubt a crucial trigger to follow.

It often gives you important clues about the state of the economy and how you need to go about it.

It is also an important factor to consider when you are deciding future investments.

In many ways, it gives you a realistic picture of your future savings and liabilities as well.

But first, it is important to understand what inflation is?

What Is Inflation in Simple Words?

The definition of inflation in simple terms is the increase in the price of goods.

It can also refer to the use of more money to buy the same product.

So you can see the inflation as the rise in prices of goods or decrease in purchasing power.

On an average when the price of goods and services increase, the term inflation starts recurring in the daily lingo.

Therefore inflation is often defined as per the cause that triggers it.

It usually exists when the money supply exceeds the available goods and the services.

Also, it may be a function of the budget deficit that necessitates money creation in the system.

It is measured as an annual percentage change.

So as the inflation rises, every dollar gets you less of the same product compared to earlier instances.

As prices rise and inflation rises, the value of money decreases.

This is because the value of money defines the purchasing power of an individual.

Once you start needing more money to buy the same goods, it is called inflation.

This is the actual worth of a good or service at the current rate.

So when inflation rises, purchasing power declines.

When inflation falls, it increases.

You may often have heard your grandfather or father talk about the ‘good old days’ when they could buy a packet of gum for just $0.05.

But at the current rate, you need more than $1 for the same packet.

You can read this in two ways, prices have risen or the value of money has fallen.

The percentage by which this inflation increases or decreases is often the crucial factor.

Governments and economies, in general, account for a specific percentage change.

The problem starts when the rise or fall is more than this.

What Causes Inflation?

Before we proceed any further, it is essential to understand what causes inflation?

That is often the key determinant in how the inflation situation is handled.

It also gives cues to the Government and economies about how they can work towards limiting it.

Most importantly, the question is does it really need to be limited.

However, the world over, economists haven’t been able to pinpoint that one single cause which triggers inflation.

Though it is a universal truth, there are many factors that lead to inflation.

As a result, it is very important to carefully study the cause of inflation.

1. Monetary Inflation in Simple Words

Monetary inflation in simple terms is the oversupply of money in the economy.

This is primarily a function of demand-supply mismatch.

When supply increases, prices go down.

So if you have an oversupply of money, the valuation decreases.

As a result, the price of everything rises in dollar terms.

In other words, you need a higher amount of money for same value.

2. Increase in Demand

This is also known as Demand-Pull inflation.

In this case, the inflation is triggered by higher demand for a good.

As the demand for a specific product increases, the prices rise as well.

So, it is technically a case of a lot of money chasing a limited or handful number of objects.

So, in this case, you see demand growing at a faster rate than the supply.

This is normally seen in economies that are growing very fast.

3. Higher Cost of production

This is another popular cause of rising inflation rate.

This is, therefore, often described as cost-push inflation as well.

The increase in cost can be due to higher raw material cost or increased labor charges.

Certain times, increase in taxes too can result in this kind of inflation.

Price Inflation vs. Monetary Inflation

So that brings into light another fundamental question about inflation.

It is all about paying additional money for the same service or the good.

It is about the value of money decreasing or the price of a good increasing.

Either way, the same thing is happening.

So the question that springs up is why we differentiate this phenomenon between price inflation and monetary inflation.

If you notice, the fundamental change in both cases is same.

So price inflation is a situation when the prices rise, or you need more money to buy the same product.

But monetary inflation is a technical issue where the money supply increases.

Often that is what triggers lowering the value of money.

Rather monetary inflation results in price inflation.

Or monetary inflation causes price inflation in a holistic fashion.

So monetary inflation results when the Government increases the money supply.

More money is printed by the Government for a variety of reason.

But one of the side effects is the monetary inflation that you see.

But this phenomenon happens gradually.

As the market is flush with money, it slowly eats away the value of money.

This process may continue for good 18 months to 2 years to completely unfold.

Therefore neither monetary inflation nor price inflation happens overnight.

It takes time and unfolds gradually.

Of course, the economy will offer some indicators, but these are not radical changes.

So when the final unraveling happens, consumers realize that they may have more money, but it will buy less than earlier.

This spurs demand as well.

The situation results in inflationary trends across the economy.

The demand-supply matrix is what triggers the final price differentiation and fundamental changes.

That is why it is important to understand how inflation is calculated comprehensively.

How to Calculate Inflation?

The inflation rate is a function of the inflation index.

In most economies, this inflation index is often divided into two primary forms of Index.

The Consumer Price Index or the CPI is the most dependable source for calculating inflation.

This is a basket of consumer products like food, clothing and the like.

Now the individual cost determines the average cost of this basket of products.

The cost of this Index is then compared over a point of time.

That creates the price index and gives you the percentage change in prices.

This forms a vital component of the final inflation measure.

There is another element that is considered for calculating the Inflation rate.

This is known as the Product Price Index or PPI.

The PPI records the percentage change in the selling price of the domestic good.

The final inflation rate is a combination of the PPI and the CPI.

Together they bring about the final pricing quotient.

That will give you a realistic assumption of the inflation rate.

You will notice every month you have a host of economic data that is released.

From monthly car sales to weekly retail sales, there are many data points.

All of these together go on to give you the actual inflation number

If you notice, over an extended period the PPI and CPI converge to similar levels.

But in the immediate future or as per current studies, there can be a huge difference between the CPI and the PPI

These subtle changes make them such an accurate measure of changes of the current economic condition.

For example, if vegetable prices are rising every week, that signals a definitive trend in the economy.

Experts often deduce long-term term inference about the state of the economy based on these factors.

Understanding the Cost of Inflation

The reason why inflation is an essential economic measure is the long-term implications.

Depending on the kind of industry or product you deal with, inflation impacts differently.

It is not just a measure of rising prices; it is also an indicator of the state of the economy.

So changing economic situation affects different stakeholders differently.

This is because the cost of inflation is different for different players.

Some may benefit from the higher cost associated with inflation.

At the same time, there are others who may benefit from the declining cost.

The interest rates, lending rates, deposit rates are in many ways a function of all these factors.

For example, if you are a lender, you will lose if inflation increases.

This is because the cost of the money decreases as inflation rises.

So if you offered a loan for a fixed rate of interest, the value of the same amount of money would continue decreasing as inflation rises.

But if you are a borrower who took the loan, this will mean a positive development for you.

As the inflation rises, the value of money decreases.

That means every dollar that they owe continues to be devalued in absolute terms.

That will be good news for the borrowers.

They will have to now pay less for the same loan.

For those who are saving money, rising inflation is never good news.

The money that they are saving will be worth lot less than its current value.

Also, the money that they are saving will have a lot less purchasing power on the whole.

This is of course if the interest rate is not adjusted as per the inflation rate.

This is also known as cash drag.

Why Is Uncontrolled Inflation Not Good News for Economy?

Understanding the cost of inflation is a crucial factor.

This is what makes it such an outright devil for the middle class and any person with reasonable savings.

The rising inflation is not good news for those who salaries do not adjust to the changing rate of inflation.

They may end up in a situation where their money will be worth a lot less and their purchasing power also decreases as a result.

Even for retirees and annuitants, who depend on a fixed income, inflation often erodes their purchasing power.

The rate of increase in the money available is not at par with the rise in inflation.

As a result, their purchasing power decreases at a much faster rate.

Consequently, their standard of living suffers to a large extent.

Consumers, as a result, start spending less than what they would have.

That means the demand for products reduces.

This, then, has a domino effect on the businesses.

That  often leads to a slowdown in the economy over the long run.

There is cost repricing at every level.

The slowdown in the economy then goes on to affect the international markets too.

This is why the rising inflation scenario does not augur well for the economy.

At the same time, don’t think a deflationary situation is good either.

Deflation signals prices moving in the reverse direction.

If goods start selling at a lower price, it will no doubt affect the profit margins and the economy in general.

Therefore an uncontrolled pace of inflation is not good in either direction.

A sudden or fast slowdown is as severe as a steep rise in inflation.

This is why you have Central Banks across the world tackling inflation in a big way.

Inflation & Interest Rates

So the question is how Central Banks and Governments tackle the inflation data?

The interest rate is one of the most popular vehicles to control the interest rates.

This is why you will see the interest rates is a big monitorable element in most monetary policies across the world.

The interest rates is used as a speed breaker or accelerator depending on the state of the economy.

The idea is to use it as a means to spur growth or contract growth.

This then works indirectly to rein in the existing inflation situation.

Often interest rate is used to cut down money supply in the system.

Once the money supply reduces, the price of the goods and services adjust on its own.

World over, you will see Monetary experts and Governments raising interest rates to achieve this end.

The exact opposite happens in case there is a deflationary trend or slowdown in the economy.

As you would have noticed in the US policies post-Lehman, there was an all-around easing of policies.

The result of this was that it gradually kickstarted growth and helped in the revival of the economy in a gradual fashion over a point of time.

Just like the entire economy bears the brunt of the cost of inflation, it works in tandem to restore the balance in the economy too.

Conclusion

The rate of inflation impacts your financial affairs in many ways.

From deciding the valuation of savings to determining your purchasing power, it is one of the most critical factors to watch out for.

This is exactly why there is a massive rise in inflation-adjusted opportunities.

The idea is to work towards maintaining the gradual economic balance constantly.

It is this balance that ultimately seeks to maintain the overall economic poise in the market.

So if you want to identify one major catalyst for economic growth, it is decidedly inflation.

It is the one factor that affects all your savings, retirement funds and wage outlook.

So watch out for the trend and direction of inflation data for long-term gains.