Category: Trading and Investment

For all of you traders out there, you may want to beware of insider trading.

In case you weren’t aware, there are unscrupulous traders out there who buy or sell stocks, securities and currencies based on non-public information they have access to.

These traders are for example, owners, CEOs, directors, or other upper-level management employees of large companies along with anyone who knows them such as family or friends.

Insider trading is an unlawful and unfair form of trading which takes place by individuals who make trades based on utilizing private or stolen company information they can use to their advantage.

Because they have access to such facts, their likelihood of making a profit is a most likely a sure one.

Why is this bad?

Because they are depriving public traders the chance of doing the same and are hindering the overall performance of the market.

How Insider Trading Works

You can think of insider trading much like cheating on a test, especially a job-skills test where those who score the highest are most likely to get hired.

The insider trader would be analogous to the person(s) that somehow get secret access to the answers before the test is to be taken.

Hence, they have an unfair advantage over all the other applicants.

How is valuable data passed along in insider trading?

Let’s take the following first scenario:

Let’s say the Director of ABC Inc has the results announcement due to be released by, say Wednesday to the London Stock Exchange.

Assume that the announcement is going to hurt the ABC’s shares price since this company isn’t doing as well as the public believes it is.

Monday, in a phone conversation with a hedge funds manager, the director accidentally let’s the info slip.

While at lunch, that manager has a few drinks with his lawyer and thus mistakenly tells him.

Monday night, the lawyer then informs his wife over supper that ABC’s announcements are not too good So on Tuesday, she sells all her ABC shares to avoid taking a loss on them.

She then can be nailed for insider trading.

So, what makes insider trading just that? It consists of the following:

– The insider:

This could be any employee of a company, especially upper management or perhaps anyone they interact with on a daily basis.

Anyone that a company member passes confidential info to is considered an insider including friends, relatives, or spouses.

– Price sensitive information:

Such info is any type of fact(s) or advice that encourage one to buy or sell stock based on good news or bad.

If this info leaks out early, it will directly affect the share value of the company involved or.

Simply put, this is tomorrow’s information shared today.

– Deal:

A deal is simply the act of knowingly passing on info that is confidential and illegal at that.

Anybody with access to inside info who passes it on to others is part of the deal.

Passing inside info to any outsider (or non-employee of your company) is illegal whether it is witnessed or not.

That also goes for professionals that accompany you in your trading activities such as hedge funds managers or lawyers.

Proving Insider Trading Activity

Then comes the aspect of insider trading: proving that it has happened.

Distributing inside info or accepting it is a crime and carries criminal penalties, large fines, and prison sentences.

In the case of court action, a jury needs to be persuaded beyond a reasonable doubt, that a suspect has committed a crime.

This plays as a standard test.

Because such crimes carry big penalties including imprisonment, the bar is set quite high and it’s the jury that decides whether or not insider trading activity has taken place.

Insider trading is even more difficult to prove. In an insider’s dealing case with multiple networks of information, phone conversations, emails, tricky deals, etc, it can all quite complicated to actually prove it has occurred.

As for the defendants, they’ll deny that it happened and such communication was done only as part of their job.

Because it isn’t easy to prove, many who commit to insider trading who should be prosecuted are not.

– The SEC Versus the Supreme Court

Currently, we have two inconsistent laws of insider trading simultaneously at war with one another in the United States.

One is a law promulgated by the Security & Exchange Commission (SEC) in its enforcement program.

The second set of laws is the law of insider trading that has been articulated the the US Supreme Court in a series of views that the SEC dislikes or rejects.

What are theses views and how do they differ?

The SEC feels that insider trading should be illegal since it is unfair.

This is because when one person trades with another with an inappropriate informational advantage, such an act is unfair to public traders.

However, the Supreme Court takes a completely different view.

Rather than focusing on the counter party, the Supreme Court addresses the source of the information.

They determine whether the person engaged in this trading activity has stolen the info from its rightful owner.

Hence, we can call the SEC’s viewpoint to insiders trading as the fairness approach and coin the Supreme Court’s viewpoint as the business property approach.

Both views can be analyzed as to who is harmed under these distinct theories.

A second scenario demonstrates how differently the SEC and the Supreme Court view insider trading:

Say, a hedge managers gets inside info on how the ABC firm’s bid for the XYZ firm.

Hence ABC is the acquiring entity and XYZ is the company to be purchased or taken over.

ABC plans to pay a large premium for XYZ’s stock.

Anybody who gains inside knowledge of this unannounced bid could use it to their advantage:

by making a lot of money through purchasing shares of XYZ and then reselling them after the bid has become public.

How do these legal entities view this?

The SEC sees it as being unfair to XYZ (the seller of the stock) as they are not yet aware of ABC’s intention of acquiring their firm.

Thus, those who buy XYZ’s stock based on these facts are at fault.

On the other hand, the Supreme Court says the person doing this trading has no preexisting obligation to trade duty to this counter-party (XYZ).

What we care about is that whoever is making a trade has in essence stolen this information from the bidder (ABC).

Hence, the Supreme Court feels that the persons spreading the inside info are at fault, not the buyers of XYZ’s stock.

However, the SEC has what they call an Insider Traders Enforcement Program.

The way they find insider traders is by investigating those who have made a great amount of money on a recent buying or selling activity, especially those who’ve traded on a repetitive basis.

Hence, they look at hedge funds and private equity firms and look at the returns these firms make when investing in company stocks.

If alleged inside traders lose money, the SEC pays no attention to them.

However, if specific traders make money consistently, the SEC suspects these people have engaged in insider trading.

Once the SEC finds traders who have repeatedly outperformed the market based on its theory, this organization will investigate them, create a lawsuit against them, and once evident, throw them in jail.

Conclusion

Imagine that you trade stocks or securities.

What if someone lets you in on a secret as to what stocks to buy or sell?

Would you be elated with their advice or would you question it?

What if it were a friend, relative, or family member?

Should you follow their advice?

Absolutely not!

Your best bet would be to question them and find the source of this information.

More than likely, they may be engaging in insider trading.

Hence, if you gladly take their advice and do what they ask you to do, you are guilty just the same.

That’s if you get caught.

Remember, inside trading is a crime whether you inform others of non-public trading information or act on it yourself.

If caught, you may face big fines, imprisonment, or both.

If you are suspicious that one is committing such an act, refuse to cooperate and if you can remain anonymous, report them.

No amount of money is worth the risk.

Investing is a great thing and a very useful skill to possess.

If you’re lucky, you can make thousands of dollars in a matter of years.

In order for that to happen, you need lots of knowledge and experience and obtaining it is well worthwhile.

Hence, the more you know, the more apt you’ll be in understanding the world of investment, even if there are facets of it that you never plan on exploring.

Likewise, understanding who the various indices are and how they work will enable you to make more informed decisions when applying your skills in the stock market.

First of all, you need to know what an index is. An index represent the measurement of the true worth of a sector within the stock market.

It is calculated from the prices of selected stocks, or more accurately termed as a weighted average.

Used by financial managers and investors, an index serves as a description of the market as a whole.

It also compare the returns on selected investments.

But how is it used in investing?

It…

• Provides a quick snapshot of equity market activity.
• Is a useful performance benchmark for investors.
• Forms the underlining for many derivatives contracts.

A second vital term to understand is market capitalization or market cap for short.

It refers to the total value of all the company’s shares.

Investors use market cap to measure the size of a business and its worth.

Market cap equals the total number of outstanding shares of a company multiplied by its market value.

This lets investors know how much the company’s shares are worth on the open market.

For example, if the ABC Corp had 100,000 outstanding shares priced at $10 apiece, it’s market cap would be $1,000,000.

Here is the list of the most common marketplace indices:

1. Dow Jones
2. S&P 500
3. FTSE 100
4. NYSE
5. NASDAQ

1. Dow Jones

Dow Jones is a stock index company that tracks financial information and publishes it to the Wall Street Journal.

It is often termed as a barometer of the US stock market, but it only tracks 30 stocks within the entire country.

– The Dow Jones Industrial Average

The Dow Jones Industrial Average (DJIA) is a stock market index made up of 30 American companies that have been around for a long time It can be thought of as a snapshot of how the US market is performing in a given day.

The DJIA is shown on a second by second basis throughout each day that the market is open: 9:30 am to 4:00 pm eastern time.

There is a double-digit number that represents the DIJA on a slow day and a triple-digit number on a regular or active day.

It is presented in green when it goes up and red when it goes down.

2. S&P 500

The S&P 500 is a stock or index created by a firm known as Standard & Poors.

It is also termed as a market index that represents a composition of 500 different US stocks which were selected by analysts and economists employed by this firm.

These 500 stocks are the most watched stocks in the entire US market.

The S&P 500’s index committee strives to include the 500 most followed US companies in its index.

This selection changes overtime since the analysts and economists want only the top 500 to be included.

If a company within the index loses its worth or desirable, it is simply replaced with one that is worthy of investing in.

Keep in mind that businesses are not swapped out often.

For example, if a particular entity files for bankruptcy, it will then be replaced with a financially sound company.

This index merely represents the US stock market as a whole.

On the other hand, the DJIA is composed of only 30 entities.

Since this is true, the S&P 500 has more exposure to the stock market, it paints a more accurate picture US stocks in general.

Hence, the performance of mutual fund managers, well-known investors, or investment records in their entirety is always compared to the S&P 500.

Mutual funds portfolios then compare their results with this market index.

It is known that 75% of mutual funds fail to beat the results of the S&P 500.

3. FTSE 100

The FTSE 100 (short for Financial Times Stock Exchange) is an index which measures the top 101 Britain companies tracked every 15 seconds on the London Stock Exchange (LSE).

Why are there 101 stocks?

This is because Shell is listed twice: as Shell ROSA and ROSB.

During its inception in 1984, the market capitalization (the cost of all the shares added up) of the UK’s top 100 companies was converted into 1,000 points or £100 billion.

The FTSE 250 measures the next 250 companies immediately below the top 100 and the FTSE 350 equals the FTSE 100 and FTSE 250 combined.

To break it down, the FTSE contains oil and mining companies, the banking system, consumer goods, and technology.

Examples of entities included in the FTSE are:

• Royal Dutch Shell, BP
• Lloyds, HSBC, Barclays, Standard Chartered, RBS
• Imperial Tobacco and British American Tobacco
• Tesco, Morrison’s, Sainsbury, M&S

The FTSE is calculated by taking the free float market cap and dividing it by the index divisor.

The free float market cap represents the sum of the value of publicly traded shares.

4. NYSE

The NYSE (New York Stock Exchange) is a stock exchange entity located in New York City.

Globally, it is the biggest equities-based exchange derived from the market cap of its listed securities.

Up to 2005, it was a privately run institution.

That year it acquired the Archipelago electronic trading exchange.

For many decades, the NYSE was limited to floor trading only as a stock auctioning site.

Presently, most NYSE trade are done electronically even though floor traders are needed to establish pricing and work in high volume institutional trading.

Public trading can be done at its physical location, Monday through Friday from 9:30 am to 4:00 pm.

Likewise, it is not open on major holidays and may close early on rare occasions.

5. NASDAQ

NASDAQ (the National Association of Security Dealers Automated Quotations) is an index that was created to enable dealers to post their quotes electronically.

Today, it is the main competitor to the NYSE.

It was established to increase the trading of over-the-counter stocks that did not meet the requirements of to have these stocks listed on larger indices as the NYSE.

Before NASDAQ, such stocks were traded mainly over the phone and because information pertaining to the stock had to be obtained from a dealer who specialized in the stock, it was difficult for the public to trade these stocks.

It was founded in 1971 to streamline trading to the entire investing market.

This new market achieved instant success and in 1975, the NASDAQ released its own set of trading requirements merely to segregate larger companies from smaller ones that have been traded over-the-counter up to then.

Why?

The NASDAQ aimed to have its index able to compete with larger indices as the NYSE.

While the NYSE is still the largest stock exchange to in market capitalization, the success of the NASDAQ all electronic model has allowed it grow to be the exchange in trading volume.

– The NASDAQ Versus the NYSE

Again, the NASDAQ and the NYSE are two leading competitors in the stock exchange market.

However, there are major differences between the two organizations:

• While the NYSE has a physical location (in New York City) the NASDAQ does not.
• One does quoting entirely different from the other. While the NYSE is a public auction type site where attendees trade stocks with one-another, the NASDAQ is a dealer market where buyers and seller trade with a market maker. A market maker is one who works at a registered broker dealer and promotes trading by posting a price in the market that they’re willing to make a trade in, known as the bid price as well as the price they’re willing to sell at, known as the author price.
• The NYSE uses specialists while the NASDAQ uses market makers. The difference between the two that the specialists aims to match existing buy and sell orders in an orderly manner where they strive to create a market by posting their own buy and sell orders. Market makers compete for your order and by doing so, this helps keep transaction costs down.

In Summary:

So now you have a brief description of the five major trading indexes and how they work.

Again they are the:

• S&P 500
• Dow Jones
• FTSE 100
• NYSE
• NASDAQ

An index is a group of selected stocks whose averaged out values give a snapshot of how well the investment market is doing.

The market cap is a number that represents a company’s true market value.

These are handy aids when it comes to choosing stocks.

Understanding indexes is vital when making trades in the marketplace.

To become even more well-versed in investing, you may want to learn more about each index.

The more you know about them, the better investment decisions you can make down the road.

The science of automated trading is called algorithmic trading.

It is also known as algo-trading or black-box trading.

In this process, computer programs define the direction of trade.

The fundamental principle driving this trade is speed and frequency.

The profit prospect is entrenched in the pace and the frequency in which trade is conducted.

But this is speed and frequency that are impossible for humans to match.

That is precisely why this kind of trading has gained popularity as computers take on a significant role in trading.

Normally the rules of trading are absolutely well defined in this case.

They are based on timing, price, or quantity.

For that matter, it can comprise any other mathematical model too.

Along with a higher profit prospect, algorithmic trading makes markets relatively liquid.

This indirectly also brings in a better and higher degree of the system in place.

Trading does not pick up in terms of just volume; it also cuts out the human element more often.

So trading predominantly becomes mechanical and systematic.

The criteria of profit gradually shift to the efficiency of the mechanical formula.

Fear and greed increasingly become the less important triggers for trade.

Computer programs are created in a way that they monitor the stock price and place trading calls.

You don’t have to keep watching the price for hours now.

Algorithmic trading has put the whole process on auto-pilot mode.

You are no longer feeding orders manually.

Everything is pre-programmed and timed ahead.

The algorithmic system identifies the trading opportunity and takes a call.

That is what the primary backbone of a meaningful trade becomes.

It is no longer a discretionary opportunity.

The program will execute the trade at specific price points as decided.

This brings in the classic sense of discipline and uniformity in trade.

Does Algorithmic Trading Work?

One of the most fundamental questions that many ask at this juncture is, does this technique work?

But then, this is a tricky question.

That is because this concept covers a wide range of possibilities and theories.

Some will work and some will not.

More importantly, some methods may be profitable for a few but not so much for others.

Also, a formula can stop being profitable beyond a certain point.

So in many ways, algorithmic trading is quite similar to systematic trading.

But there is no foolproof formula and several other conditions impact the overall success rate.

But broadly it is again a theory that cuts out emotion and lets formulas rule.

A lot of the success aspect is directly proportional to the trader’s approach.

But algorithmic trading is not predominantly dependent on technical analysis alone.

It can also be trend-following, depend on counter-trend or can even be based on the pattern.

But there is one thing sure, the buy-sell points have to be clear.

There is no scope for any ambiguity there.

That is what outlines the broad essence of any strategy that is implemented in this case.

The signal for buying and selling stocks is valuation based and may be derived from a number of metrics.

But remember that backtesting a formula or a method is as important as developing it.

The overall success ratio is directly dependent on that.

That will give you real-time results before you commit any money in the market.

It will also give you a proper sense of the risk involved and the degree of control you require.

While minute to minute monitoring is not required, your analysis has to be foolproof.

Because the success of the trading formula is based on it.

Momentum Investing As An Algorithmic Trading Strategy

You will notice a plethora of algorithmic trading strategies.

Different kinds of traders have a different approach.

But there are some strategies that have undeniable charm and a timeless appeal.

They are popular not just because of their success rate but also the relative ease of implementation.

In fact, that also acts as a catalyst towards its popularity.

The momentum investing strategies fall in this list.

As the name indicates, this strategy is deeply dependent on momentum in the market.

So in this case, the traders are on a lookout for a market trend that indicates significant movement.

The market does not just get swayed by a momentum, but volumes also back this.

That is what gives credence and meaning to the overall momentum seen.

A variety of algorithmic trading systems can be applied to this momentum.

It can be either extremely simple or may be a bit complicated.

The simplest of the momentum strategies may involve investing in the top 5 stocks with consistent performance over 12 months.

Now you can add a pinch of complication by blending the time element too.

Investors may also look out to rebalance momentum.

The time duration, however, can differ.

It can be anywhere between weekly to monthly, even quarterly in some cases and yearly in a few.

The overall trading objective has to be married with the momentum.

That will yield the ultimate results and key profit objective that you may have in mind.

Let me use an example, an algo trader will be following a specific trend in the market, X.

Now as per the analysis, the market slips.

Now you can use the stats from the trend to determine whether it is headed to.

Your next move then gets adjusted accordingly.

Arbitrage

This is another common algorithmic trading strategy.

Like momentum trading, this too proceeds as per a set formula and yields comfortable results.

The term arbitrage generally means taking advantage of a difference in pricing.

These are primarily quantitatively driven strategies and yield pointed results.

The core point is to exploit the price difference across a range of financial instruments.

If we get an information that X Company will be bought by Y Company, the share prices also affected.

The new of acquisition can drive the price higher.

So temporarily a pricing inefficiency is seen.

This may be part of a broad trend or may not be.

But there is surely an event-driven pricing uptrend.

Normally any such news like a takeover, acquisition, merger, bankruptcy triggers this type of price movement.

As a result, you can use this temporary difference as an arbitrage strategy.

Normally this type of pricing does not have a huge implication on the overall market.

As a result, they fit very well in the overall algorithmic trading strategies.

But remember the window of opportunity is very short.

Many trades in quick succession are what creates the best profit opportunities.

Incidentally, pace and volume are also the fundamentals of algorithmic trading.

An automated machine can keep track of these changes way more closely than any human intervention.

The advantage here is that you get the advantage of the smallest price change.

While individually a difference of a few cents may not be significant, it can be huge on high volume trade.

Often this arbitrage price becomes the core profit percentage for the specific trade.

Traders can lock in higher than usual profits if they can execute it appropriately.

Faultless and quick execution holds the key to success in this formula.

This is what makes it profitable.

Seasonal Strategies

Algorithmic trading essentially means that you have to exploit a specific price point.

The trigger for this is never any one aspect though.

A given situation can have multiple triggers or depending on the results you need, the triggers may alter.

This is exactly the reason that these seasonal strategies fit so well in the overall scheme of things.

Algorithmic trading heroes the benefits of taking advantage of a quick change in pricing and booking profit.

So there are some strategies that can work during a specific period in the year.

For example, it is common knowledge that the returns towards the end of the year are much higher.

The warm months deliver better returns than the colder ones.

Most times, it is also an openly accepted truth that September offers distinctly lower returns.

So there are some traders who may choose to sell during December.

The stock price trend is very different in the Holiday season.

Moreover, they may also get some amount of tax leniency.

Most importantly this seasonality element is not restricted to any one market.

So you can use algorithmic trading to take advantage of the seasonal changes in pricing.

In many ways, this is again one of those strategies that depend on arbitrage.

So it can help investors optimize their long-term positions using this strategy.

It is a straightforward approach that openly acknowledges the pricing difference and takes advantage of that.

Needless to mention that this strategy goes a long way in reducing the risk too.

Instead, the risk becomes significantly controlled and manageable too.

Traders who execute these seasonal price changes factor the risk in their formula.

That way it offers a more constructive scope for continued profitability.

But timing and pace of execution are the key factors to watch out for here.

Mean Revision

When you look for popular algorithmic trading strategies, this one is another popular option.

The term mean refers to an average.

In this case, mean revision refers to drawing the average of a high and low price.

This could be calculated from a temporary high and low prices.

This may refer to an arbitrary period with no pre-determined formula to fix this.

Normally the algorithmic trading formula uses the relative movement in the security to compute this.

So the potential profit too is calculated using the same formula.

It is expected to move either away or towards the mean depending on the expectation.

The fundamental premise of this approach is based on some inherent price trends in securities.

On an average, it is seen that many asset prices move back to the mean zone after extended oversold or overbought conditions.

So when you are using this strategy, the core idea is prices will revert to the mean at some levels.

So the trader does not worry about the oversold levels or the overbought condition.

The Algorithmic trading strategy is embedded in the concept of patience here.

Investors need to wait for sanity to return and prices to move back to mean levels.

This is how it is called the mean reversion strategy.

Scalping

Scalping is another commonly used algorithmic trading strategy.

This again is a type of arbitrage where you see the scalpers benefiting from the difference between the bid and ask price.

It is also known as the bid-ask spread.

But the beauty of algorithmic trading is that the scalper is not happy with just one trade.

There is repeated scalping at very short intervals.

As a result, you have a number of trades in a very short time.

Moreover, all the trade is created with the concept of deriving the maximum possible advantage from the price difference.

These individual trades often take place within minutes of each other.

That is how you can optimize the profit potential using the algorithmic formulas.

While you are undertaking scalping strategies, you can also look at transaction cost factors too.

They too offer some reasonable scalping opportunity, especially across markets and asset classes.

The broad idea remains simple.

Don’t let a single change in asset pricing go without yielding advantage to you.

But one important factor in this is you have to take some very quick and form decision.

That alone will help deliver the desired results every time.

Factors Driving Stock Price

As the name indicates, the stock price movement is determined by a series of factors.

The trader often tracks the varieties of factors and looks at drawing a meaningful profit from the price difference.

That, of course, is planned out through executing appropriate algorithmic trading strategies.

The factors have a wide range of possibility and potential.

It can be any factor that drives up the price or pushes it down.

As a result, you may see momentum, earnings, beta trends and cash flow issue impacting prices.

As a result, you can use these factors individually or in combination with other dynamic strategies.

These factors can individually affect allocation to a large extent.

Normally historical data is taken as a crucial benchmark in this case.

The price momentum or movement is calculated on the basis of that.

The algorithmic trading strategy here looks at how best the individual factors ascertain a better pricing power to the overall stock price.

The objective remains same across a gamut of algorithmic trading strategies.

You have to maximize profits through quick and plenty of trades in a particular time zone.

That is what makes it a profitable opportunity across asset classes.

Benefits of Algorithmic Trading Strategies

There are some distinct advantages of incorporating algorithmic trading strategies to widen your base and portfolio profit.

1. Automated

This is a completely automated trading opportunity.

As a result, trade proceeds on its own as when the pre-determined price points.

So it enables fast and effective trading.

Investors do not have to bear the brunt of their indecision in any way.

The computer does the thinking and execution for the trader.

All you have to do is install the appropriate program that will yield the desired result.

2. Fast Paced

The automation also goes a long way in making these trades fast and accurate.

There is a much higher instance of order placements at any given point.

This raises the chances of the order getting executed at your desired rate.

That surely enhances the overall profit potential.

3. Lower Transaction Expense

This kind of trade also reduces the total transaction cost involved.

By trading off the real-time market, they can save the cost of the transaction.

At the same time, they also give you the benefit of delayed execution cost.

As a result, the strategy also regulates the trading volume in this region.

When the stock moves higher, the targeted participation increases.

When the prices move down, the participation decreases too.

Needless to mention, that has an adverse effect on the overall stock price and sentiment.

Conclusion

Therefore, if you are looking safe and steady gains, algorithmic trading strategies may be ideal.

They cut out human emotion and bring in a lot of pace and volume based surge in your prices.

It often helps the market too to identify larger chunks of price movement that you can profit from.

But at the end, remember that algorithmic trading is a profit-oriented program.

This profit is, however, subject to many factors.

So backtesting the authenticity of the program is crucial before you commit cash to algorithmic 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 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.

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.

But 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 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.

Yes 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.

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.

Nearly 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.

There are elements on earth that are rarer.

However, gold, although not the rares, remains one of the most valuable elements on earth.

This feature has made gold a store of value for thousands of years.

In fact, gold remains a very profitable store of value until this day.

In addition, with more people realizing the wonders of gold as a store of value, more people are investing in gold.

Gold іѕ one оf the оldеѕt and most beloved соmmоdіtіеѕ in the world.

Its hiѕtоrу іѕ lасеd wіth thе search for this рrесіоuѕ mеtаl.

Through the ages, gоld hаѕ hаd a number оf varied uѕеѕ іnсludіng аѕ jеwеlrу аnd аdоrnmеnt оf thе bоdу, аѕ embellishment of аrt, аѕ currency оr trаdе, and, іn rесеnt times, аѕ a соmроnеnt іn thе mаnufасturіng of соnѕumеr goods.

Let us first begin to understand the reasons and conditions that let gold to become valuable.

In other words, let us travel back in time to see the history of gold.

History of Gold

It was rесоrdеd thаt gold was first discovered in the Mіddlе Eаѕt thrоugh archaeological digs.

However, much of the Gold used in the middle east was sifted from the River Nile.

The river Nile carried lots of gold and countries at the basin of the river such as Egypt was able to sift huge amounts of gold.

Immediately after its discovery, people found ways to contour and use this shiny metal.

Arоund 3000 BC, the old Egурtіаnѕ hаd mаѕtеrеd the аrtѕ of bеаtіng gоld into gоld lеаves.

They used these gold leaves to decorate their tombs or pharaonic thrones.

In addition, they also used gold and gold alloys for their jewellery and ornaments as well as armour and weapons, mostly knives.

The malleability and ductility of this metal enabled it to be easily used for many purposes.

People also alloyed other metals with gоld іn order tо асhіеvе сеrtаіn variations in соlоr аnd hаrdnеѕѕ.

In Sumеrіа, now known as Irаԛ, gold wаѕ used to сrеаtе a wide variety оf jеwеllrу.

They used to create ѕорhіѕtісаtеd styles that are ѕtіll bеіng wоrn tоdау.

This shows how the elegance and beauty of gold are not time bound.

Gоld bесаmе the ѕtаndаrd mеdіum оf exchange аrоund 1500 BC.

This was when people realized how durable this metal is.

In addition, because it started to be widely used for multiple purposes, this desire allowed it to be a medium of exchange.

One of the rules for an item of being a medium of exchange is for the people using it to be wanting to acquire it.

Moreover, another rule is for the people to be placing importance on it.

That is in addition to being durable and easy to carry around.

Both these conditions allowed gold to become a currency of change.

The malleability of the metal allowed it to be forged into coins that are safely stored.

The idea of coins was that it is also easy to carry around.

The Evolution of Gold

The regions оf Nubіа іn Egypt were heavily gоld-bеаrіng and made Egурt a vеrу wеаlthу nаtіоn.

Soon, Egypt started using gold іn іntеrnаtіоnаl trаdе.

Therefore, gold started spreading farther, from the Middle East to East Asia.

Eventually, more people started to recognize gold as a medium of exchange.

This wаѕ also around this tіmе whеn thе Shеkеl wаѕ uѕеd as ѕtаndаrd of mеаѕurе in thе Middle East.

Thе Shеkеl was a gold соіn wеіghіng аbоut 11.3 grаmѕ and соntаіnеd electrum.

Electrum is аn аllоу thаt іѕ naturally оссurrіng аnd thаt соntаіnеd 2/3 gold wіth 1/3 ѕіlvеr.

The tеѕtіng fоr рurіtу of gold bеgаn wіth thе Babylonian’s uѕе оf thе fire assay аrоund 1350 BC.

The purer the item was, the more value it possessed.

– The Evolution of Gold Coins

Bу 1091 BC, Chіnа lеgаlіzеd thе uѕе of ѕԛuаrеѕ of gold as money.

The first соіnѕ of gоld wеrе minted in a kingdom оf Asia Mіnоr саllеd Lydia around 560 BC.

Around 58BC, Julіuѕ Caesar uѕеd the gоld hе hаd ѕеіzеd in Gaul (nоw France) tо repay thе debts оf Rоmе.

As you can see, at this point, gold was being used to settle international debts.

Bу 50 BC ѕtаrtеd uѕіng thе Aurеuѕ, which іѕ a gоld соіn, аѕ the official сurrеnсу.

Itаlу’ѕ Venice bесаmе thе wоrld’ѕ lеаdіng mаrkеt for gold bullion.

This was because оf іtѕ location аlоngѕіdе trаdе routes, аrоund 1100 AD.

By this time, most trades were settled with gold.

Arоund 1284 AD, Vеnісе gives birth tо thе Duсаt.

The Ducat bесаmе thе world’s most рорulаr соіn fоr mоrе than 500 years.

In the meantime, thе Flоrіn was іѕѕuеd by Grеаt Brіtаіn аrоund the same tіmе.

This wаѕ fоllоwеd bу thе Nоblе, thе Angеl, thе Crоwn аnd, finally, the Guinea.

Countries were now legally recognizing gold as currency.

This further raised its perceived value.

Similar to how the value of bitcoins raised exponentially when more and more people started to recognize it and appreciate its value.

Bу 1717, the Lоndоn Mіnt’ѕ Mаѕtеr, Isaac Nеwtоn, ѕеt a price fоr gold.

People continued to use this price for almost 2 centuries.

Before that, people have judged the value of gold with varying degrees.

The scarcity of the metal and individual judgment determined its value.

Gold in the USA

A few уеаrѕ lаtеr, аt 1787, a gоldѕmіth by thе nаmе оf Eрhrаіm Brаѕhеr struck thе fіrѕt gold соіn іn thе US.

Thіѕ was fоllоwеd bу the US Cоіnаgе Act in 1792.

It created a bіmеtаllіс ѕіlvеr/gоld standard coin whісh dеfіnеd the US dоllаr аѕ 371.35 grains оf fine ѕіlvеr аnd 24.75 grаіnѕ оf fіnе gold.

Thе fіrѕt US gоld rush started durіng 1803 аnd bу 1850.

A mаn called Edward H. Hаrgrаvеѕ predicted that hе wіll find Auѕtrаlіа аnd dіѕсоvеrѕ thе mеtаl in New Sоuth Wаlеѕ wіthіn a wееk of his expedition.

Developments in the Story of Gold

Gold wаѕ dіѕсоvеrеd іn South Afrіса аrоund 1886.

Thе extraction of gоld uѕіng суаnіdе wаѕ раtеntеd bу a сhеmіѕt called Jоhn S. MасArthur.

He was assisted by twо Glаѕgоw dосtоrѕ, named Robert аnd William Fоrеѕt in 1887.

In 1896, gоld wаѕ dіѕсоvеrеd іn Nоrthеrn Cаnаdа along thе Klondike Rіvеr fоllоwеd bу grеаtеr finds in Yukon, Alаѕkа whісh started the lаѕt gоld ruѕh of thе century.

Years later, the Amеrісаn Prеѕіdеnt, F.D. Rооѕеvеlt, bаnnеd gоld exports.

This halted thе dоllаr’ѕ convertibility іntо gold.

He оrdеrеd аll the Americans to ѕurrеndеr аll the gold іn their possession.

He set a daily рrісе fоr thе рrесіоuѕ mеtаl thе fоllоwіng уеаr at $35 an оunсе.

In 1973, thе US Dоllаr wаѕ rеmоvеd frоm thе gоld standard and thе рrісе оf thе mеtаl wаѕ аllоwеd tо float; followed bу the end оf thе bаn оn individual оwnеrѕhір оf thе mеtаl a уеаr later.

Discovered Applications for Gold

The yellow mеtаl wаѕ рrоvеn tо bе valuable іn rheumatoid arthritis trеаtmеnt іn a Frеnсh mеdісаl ѕtudу іn 1927.

This was followed bу more and mоrе dіѕсоvеrіеѕ оf thе uѕеѕ of gоld in mаnу іnduѕtrіеѕ lіkе tеlесоmmunісаtіоnѕ (1935), electronics (1947, the first trаnѕіѕtоr) аnd laser tесhnоlоgу (1960, gold-coated mіrrоrѕ).

Intеl іntrоduсеd the fіrѕt mісrосhір thаt соntаіnеd transistors соnnесtеd by gоld сіrсuіtѕ іn 1968.

The fоllоwіng year, the Aроllо 11 astronauts found thеmѕеlvеѕ wearing gold соаtеd vіѕоrѕ.

Gold соаtеd CDs wеrе іntrоduсеd іn 1986.

A уеаr lаtеr, cars gоt airbags thаt used gold contacts for more rеlіаbіlіtу.

In the year 1999, the Euro wаѕ іntrоduсеd аѕ thе соmmоn сurrеnсу whісh wаѕ bасkеd by thе ECB.

It hаd gоld аѕ 15% оf іtѕ reserves.

Physical Features of Gold

Aѕ thе mоѕt flеxіblе and duсtіlе mеtаl, gоld is оftеn recycled, rеuѕеd, and rерurроѕеd fоr different applications.

It is mоѕt mаllеаblе іn іtѕ рurеѕt state of 24k.

Varying соlоrѕ ѕuсh as whіtе оr rose gold саn be сrеаtеd bу аddіng сорреr, ѕіlvеr, palladium, or nickel.

You саn dеtеrmіnе whеthеr уоur gold іѕ a blеnd by lооkіng аt thе ѕtаmреd karat numbеr оn the ріесе іn question.

24k bеіng pure, anything lеѕѕ, such аѕ 22k, 18k, еtс. would іndісаtе a mix.

Because of its vаluе, mаnу gоld owners lооk for thе best wау tо ѕеll thе рrесіоuѕ metal (Particularly whеn they have brоkеn or unwаntеd jewellery) tо rеfіnеrіеѕ іn еxсhаngе fоr money.

Whіlе уоu may bе mоѕt fаmіlіаr wіth this jеwеlrу-rеfіnіng scenario, thеrе are numеrоuѕ оthеr gоld іtеmѕ thаt саn be recycled.

For example, creating gold bars for investing or to be used in electronic chips.

Gold bars are often used by wealthy people to store their wealth.

This is because gold is very durable and is chemically inert.

That means it does not react with the weather or erode over time.

This makes it a suitable medium to store value over time, without losing or decreasing in value.

Gold bars are often better to store and trade than jewellery because processing fees and deducted costs increase along the chain of sellers.

10 Interesting Fасtѕ About Gоld

1. As of thе bеgіnnіng оf Jаnuаrу 2011, оnе оunсе оf рurе 24k gоld wаѕ wоrth mоrе than thе fаmеd Golden Oрulеnсе Sundае from Nеw Yоrk’ѕ Serendipity 3.

Thе $1,000 ѕundае requires a 48 hоur аdvаnсе rеѕеrvаtіоn and contains edible gоld lеаf іn аddіtіоn tо 5 scoops of vаnіllа ісе cream, сhосоlаtе, еxоtіс саndіеd fruits, trufflеѕ, саvіаr, аnd ѕо muсh more.

2. The сhеmісаl ѕуmbоl fоr gold іѕ AU whісh is derived frоm thе Latin word “aurum” which means “shining dаwn”.

Considering аll оf thе соlоrѕ оf thе ѕunѕеt аnd аll оf thе соlоr blеndѕ gоld саn take, thіѕ іѕ ԛuіtе аn ассurаtе оbѕеrvаtіоn.

3. The wоrd “gоld” соmеѕ frоm the Anglo-Saxon word “gеlо” whісh means уеllоw.

4. Gоld wіll nеvеr rust, bесаuѕе іt cannot соmbіnе wіth оxуgеn in the аtmоѕрhеrе tо fоrm a gоld оxіdе.

5. South Africa іѕ the lеаdіng producer оf gоld.

6. Kаrаtѕ, thе unіt in which gоld іѕ mеаѕurеd, is a mеаѕurеmеnt оf mаѕѕ аnd wаѕ оrіgіnаllу bаѕеd on the carob seed uѕеd bу ancient mеrсhаntѕ.

7. Gold іѕ ѕо ѕоft thаt it саn actually be hаnd hammered ѕо thin thаt the ѕun’ѕ rауѕ саn rаdіаtе thrоugh іt.

8. Gold lеаf, аѕ vеrу fіnе ѕhееtѕ of gold аrе саllеd, іѕ аlѕо еdіblе аnd has bееn uѕеd fоr еvеrуthіng from саkе decoration to еmbеllіѕhіng ісе cream sundaes.

9. In the раѕt, gоld wаѕ hеld in ѕuсh hіgh regard thаt it wаѕ аddеd tо food because it wаѕ bеlіеvеd thаt іt wоuld lead to eternal lіfе.

10. It іѕ ѕаіd thаt Egyptians were the first tо use gоld for jewellery. Thе Egyptians nоt only used gold fоr аdоrnmеnt, many рhаrаоhѕ wеrе buried with еlаbоrаtе gоld fасеmаѕkѕ аnd thеіr trеаѕurеѕ tо assure a hарру after life.

Whу Is Gold Valuable?

Here is the seven main reasons why gold is valuable:

1. Malleability
2. Durаbіlіtу
3. Cоnduсtіvіtу
4. Rеflесtіvіtу
5. Gold as the Metal of Choice for Investors
6. Suррlу and Dеmаnd Fоrсеѕ
7. Sаfе Hаvеn

Gold hаѕ lоng been a ѕуmbоl оf wеаlth, nоbіlіtу аnd еxtrаvаgаnсе.

Itѕ appeal is аѕ old as tіmе іtѕеlf, wіth some оf the еаrlіеѕt surviving gоld аrtіfасtѕ dаtіng bасk tо thе fоurth millennium B.C., according to thе Metropolitan Museum of Art.

It hаѕ bееn uѕеd to аdоrn сrоwnѕ, swords, sculptures, buildings, аnd іn rесеnt уеаrѕ еvеn teeth.

Gоld is very scarce and hаѕ inherent ԛuаlіtіеѕ thаt make іt bоth fаѕсіnаtіng and uѕеful hіѕtоrісаllу, today and for thе fоrеѕееаblе futurе.

However,  aside from scarcity, since it is not the rarest metal, what mаkеѕ thіѕ mеtаl sо precious?

1. Malleability

Gold is mоrе malleable thаn аnу other mеtаl.

Onе оunсе of gold саn bе drawn іntо 50 mіlеѕ of thin gold wire, fіvе millionths of a mеtеr thick, according to thе Amеrісаn Muѕеum оf Nаturаl Hіѕtоrу.

As a rеѕult, іt саn bе used in mаnу dіffеrеnt applications.

It was also the reason people easily adopted it into coins, among other early uses.

Rоughlу 78 percent оf a year’s gоld supply іѕ mаdе into jеwеlrу.

Thе electronic, mеdісаl аnd dental industries utіlіzе аbоut 12 percent оf thаt ѕаmе ѕuррlу.

However, thе rеmаіnіng 10 реrсеnt іѕ uѕеd іn fіnаnсіаl trаnѕасtіоnѕ.

2. Durаbіlіtу

There are 118 different сhеmісаl еlеmеntѕ listed on the periodic tаblе.

However, gold is thе only оnе thаt mаdе fоr an effective сurrеnсу, uѕеd bу аnсіеnt Rоmаnѕ, Egурtіаnѕ and Indіаnѕ, аmоng others.

Whу gоld?

It has fоur attributes thаt no оthеr element саn tоut: It’ѕ nоt a gаѕ, it’s nоt соrrоѕіvе оr reactive, it’s nоt rаdіоасtіvе, and it’s rare enough to bе valuable.

3. Cоnduсtіvіtу

Cорреr and silver аrе the bеѕt соnduсtоrѕ.

However, gоld соnnесtіоnѕ can асtuаllу оutlаѕt both bесаuѕе they don’t tаrnіѕh with time.

So іt’ѕ nоt necessarily thаt gоld lаѕtѕ lоngеr, but thаt it rеmаіnѕ conductive for a lоngеr реrіоd оf time.

Hence, on the long run, it is cost effective and more practical.

4. Rеflесtіvіtу

Dіd уоu knоw thаt the vіѕоrѕ on аѕtrоnаutѕ’ ѕрасе hеlmеtѕ hаvе a gold соаtіng оn them?

The gold fіlm іѕ ѕо thіn (0.000002 іnсhеѕ) that іt іѕ раrtіаllу trаnѕраrеnt.

It’s juѕt еnоugh tо аllоw аѕtrоnаutѕ tо see out, whіlе reducing thе sun’s glаrе аnd hеаt coming in.

5. Gold as the Metal of Choice for Investors

Fоr thоuѕаndѕ of years, gold hаѕ bееn vіеwеd аѕ a vаluаblе сurrеnсу, соmmоdіtу, іnvеѕtmеnt vеhісlе and a рrісеlеѕѕ jеwеl.

Nо оthеr аѕѕеt has thе glаmоur аnd арреаl thаt gоld hаѕ.

The rесеnt уеаrѕ hаvе seen a marked іntеrеѕt by іnvеѕtоrѕ іn thе уеllоw mеtаl.

The ԛuеѕtіоn here іѕ whу іѕ gоld the mеtаl of choice fоr іnvеѕtоrѕ?

6. Suррlу and Dеmаnd Fоrсеѕ

Lіkе еvеrуthіng еlѕе, thе рrісе оf gold іѕ drіvеn by thе dеmаnd and ѕuррlу forces. Aссоrdіng tо research, thе аnnuаl demand fоr gоld exceeds by 1,000 tоnnеѕ оvеr mine production.

7. Sаfе Hаvеn

Investors turn tо gоld fоr ѕеvеrаl rеаѕоnѕ. It рrоvіdеѕ a hеdgе against есоnоmіс, ѕосіаl, geopolitical аnd mоnеtаrу crisis, whісh аrе fасеd by our mоdеrn fіnаnсіаl ѕуѕtеmѕ.

Other сrіѕіѕ іn whісh gоld рrоvіdеѕ a ѕаfе hаvеn іnсludе nаtіоnаl debt, currency failure, іnflаtіоn, dеflаtіоn, ѕtаgflаtіоn, hyperinflation, market dесlіnеѕ, wаr аnd terrorism еtс.

Gоld рrоvіdеѕ a tасtісаl hеdgе against іnflаtіоn.

In саѕе оf іnflаtіоn, gоld is bеttеr thаn оthеr іnvеѕtmеnt vеhісlеѕ ѕuсh аѕ bоndѕ, еԛuіtіеѕ аnd real еѕtаtе.

People have used gоld іѕ a соmmоdіtу fоr preserving vаluе, even whеn currency is losing value.

Gоld іѕ one of thе most ѕtаblе commodities around. In tіmеѕ of nаtіоnаl crisis, ѕuсh аѕ wars, invasions and tеrrоrіѕm, there is a fear аmоngѕt people thаt their аѕѕеtѕ may bе ѕеіzеd аnd thе currency mау be dеvаluеd tо a lаrgе еxtеnt.

In such a ѕсеnаrіо, gоld ѕееmѕ to bе a solid аѕѕеt.

Thеѕе are unсеrtаіn tіmеѕ, so you have to take caution аnd balance the rіѕks.

Successful people аrе thоѕе whо gеt thе rіght mix.

Cоnсluѕіоn

Gold соntіnuеѕ tо bе аѕ coveted today аѕ іt wаѕ throughout hіѕtоrу.

Thіѕ appears ѕеt tо соntіnuе for mаnу years to соmе.

Aѕ tіmе рrоgrеѕѕеѕ, more exciting uѕеѕ for gоld wіll ѕurfасе, fuеlіng even hіghеr dеmаnd.

Cоnѕumеrѕ аrоund the glоbе аnd thrоughоut tіmе hаvе lеаrnеd tо lоvе gоld аnd wіll undоubtеdlу соntіnuе tо dо so іn the futurе.

In fact, thе demand fоr gоld rіѕеѕ сусlісаllу іn Dесеmbеr because gold jewellery is ѕuсh a popular hоlіdау gіft.

Jewellers flood thе marketplace wіth advertisements and рrоmоtіоnѕ whіlе gold refineries melt dоwn аnd rесусlе old gоld ріесеѕ.

In either case, gold is аnd wіll соntіnuе to bе knоwn аѕ one оf thе most uѕеful and lоvеd рrесіоuѕ mеtаlѕ іn thе wоrld.

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.

In 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.

If you analyze the scope and opportunity of various markets and countries, you would realize that the genres for work from home remain pretty much similar across the world.

Invariably, these are the kinds of jobs that can be done remotely, predominantly using a computer and internet.

Additionally, these work from home jobs deal with services that you can easily provide from your home.

The situation in Canada is no different. Most of the Canadian online jobs from home deal with different types of content creation and account keeping services.

There are also the jobs of transcription, translation, caregiver and related services.

Of course, the geography and demands of a specific area have some bearing on the work opportunities and the situation in Canada is no different.

A close study of the Canadian working scenario would reveal that while the broad majority of online work from home jobs in Canada, is similar to what you would find across the world, there are some unique offerings that cater to specific needs of the country.

Of course, a lot also depends on the individual’s necessities and the kind of money they need every month.

In fact, the economic and the political situation of a country also impacts the kind of work from home jobs that gain popularity.

Also, the socio-economic dynamics of a region has a direct bearing on the availability of the online jobs from home.

For example, Canada has a much larger internet penetration as compared to Vietnam, so the options of work from home using the same would be relatively higher there.

Keeping all these factors in mind, here is a lowdown on some of the top work from home jobs in Canada.

Online Work from Home Jobs in Canada

Here is the list of the work from home jobs that Canadians can do:

1. Psychic Reader
2. Home-Based Customer Service
3. Translators
4. Software Developer
5. Bloggers
6. Recruitments
7. Fiverr
8. Evaluate Search Engines

1. Psychic Reader

Perhaps this is a rather unconventional work from home job, but in Canada, you would see a considerable demand for this career.

You can easily earn money sitting at home being a psychic reader.

You could be born with these psychic skills, or you could even develop them as an alternate career.

Whether you offer psychic help over telephonic chats or offer face to face interactions, this is one of those work from home jobs that can be extremely flexible and you can easily adjust around your regular schedule.

You could even write a column in a weekly magazine or even make a TV appearance depending on the opportunity you get.

To make a more holistic approach, you could even combine the psychic skills with other forms of healing and further widen the horizon of your reach.

There are many companies that hire these psychic readers on a full time or part time basis.

But be careful about the firm you join.

Don’t be scared to ask questions and probe deeper depending on the situation.

You cannot just earn money being a psychic reader, but also there is always a sense of well-being that is associated with it.

That can be essentially rewarding and can be extremely satisfying as a work from home job.

2. Home-Based Customer Service

One of the most common online work from home jobs in Canada is that of a home based customer service agent.

Applying for these jobs can be rather simple, and the overall application process takes around 2 weeks.

Whether you take an hourly rate or a flat monthly rate grossing for close to 6 hours every day, this can be extremely lucrative work from home job.

Given the demographic layout across Canada, often the home based customer service agent can be a company’s best bet to reach out to people scattered in remote corners of the country.

For a potential employee aspiring to work from home, this is a golden opportunity to make a comfortable living without having to invest in a large amount of resource.

A simple laptop/computer along with internet connection and a speaker is more than sufficient to establish yourself.

Normally, there are many legitimate sites with appropriate job postings that you could apply through.

The overall procedure is not very time consuming, and fluency in the language is by far one of the most important prerequisites.

3. Translators

When we are discussing Canadian online jobs from home, it is hard not to talk about the unique language challenges that the country poses.

It has more than two languages that are spoken by the citizens.

If you are a business person who wants to reach the maximum number of people, you would inevitably require some excellent translators.

As an aspiring work from home enthusiast with knowledge of multiple languages, this can be a boon for you.

As a translator, whether you need to connect to people directly or distribute translated stuff, it is never too difficult to do these from home.

No wonder the translator’s job figures so prominently in the online work from home jobs in Canada.

If you are especially proficient in French and English, you can make a great career without moving anywhere more than your bedroom and living room.

The best part of this job offering is that you can get legitimate listings online from a whole host of websites.

This makes it very convenient as individuals do not have to go about confirming the authenticity of the job provider.

However, it is always a good idea to undertake some bit of background check.

4. Software Developer

This is another top contender in the list of online work from home jobs in Canada.

Essentially most times, firms do not mind software developers who work from home as long as the work gets delivered on schedule.

Telecommuting is very convenient for software developers as it enables them to focus completely on their work without adding the hassle of transportation.

Also, this type of work from home jobs ensures that you can channelize your energy on multiple projects at the same time.

Additionally, software developers are very well paid, and that makes this a rather lucrative proposition if you are keen about quitting your conventional office work.

With the rising demand for various software applications on phones and computers, the demand for developers is pointing northwards.

As a result, a lot of people are now looking at this work from home job.

Of course, the challenge in this job is that you have to stay continuously updated.

Also concentrating when you are working at home could be a challenge and you need to institutionalize a system to get around that.

But with a little practice and self-discipline, you can easily work out the system.

5. Bloggers

If you are a freelance writer or a blogger, then your chances in the list of Canadian online jobs from home is quite promising.

There are many families, individuals and businesses that hire these professional bloggers to create content on their behalf and even post it online.

These freelance writers take advantage of their knack for creating great content and generating original write-ups.

If you undertake any random check, many websites list potential work from home jobs requiring this type of content.

The interesting part is that running a legitimacy test for these kinds of job offerings is not too difficult.

Invariably the chances of potential scam are fairly limited, and the number of legitimate postings is a lot higher.

Moreover, if you have the knack for writing, you might be convinced about taking up this work from home job in Canada.

It allows you to maintain flexible timing, cuts down the hassle of traveling for work and helps you to pursue a career that you are passionate about.

Let’s face it; most freelance writers are very passionate about their writing and are generally quite committed towards their work.

For many who do not possess this gift, this is the best shot at getting quality creative content at a fair price plus their name credit.

6. Recruitments

A career as an HR recruiter is another popular Canadian online jobs from home.

A quick search of the various job listing sites across Canada will easily confirm how popular a work from home job option it is for you.

So if you are planning to continue staying in Canada but not too sure of giving up the comfort of waking up at 9 am on Monday morning, this can be a great alternative for you.

The job profile of an HR recruiter is such that it is never too difficult to follow up at home and they can easily give the regular office schedule a miss.

For those who prefer it, there could also be a convenient mix of home-office schedule, and you could even look at part-time fixtures as well.

However, when you decide on taking up a specific job offer, it is very important that you conduct a proper background check.

While the pay is quite generous for HR recruiters, there often is a chance of a potential scam being underway in the background.

7. Fiverr

Not just in Canada, Fiverr, is a popular online work from home jobs alternative for many across the world.

The module of operation is quite simple.

It is pretty much a marketplace with a global presence and lets you take up micro jobs for a price.

It could be as low as $5, and the upside could be as high as the job deserves.

The ease of landing up with the task, completing it and then getting paid is so simple that it makes it a very convenient work from home job.

This also means that even if you do not stay in Canada, you can take advantage of a specific work from home job listing there.

Moreover, even for those who are in Canada, Fiverr gives them the opportunity to take up jobs from elsewhere in the world.

This means that wherever you might be, you are never too far away from a job that pays you and a job that does not need you to have too much skill or experience.

The biggest advantage of doing business with Fiverr is of course, despite choosing a work from home job, checking on the legitimacy of these job postings is relatively simpler.

This reduces the chances of your getting tricked or you getting involved in a potential scam.

But that does not mean that you get into any kind of professional association without the requisite background check.

It is always appropriate to probe the basic details of the business and check for client feedback or customer testimonials if any.

These type of feedback always helps you become more sure about the kind of firm or individual you might be working with eventually.

Therefore Fiverr allows you to create the crucial social network connect that is so important to make a successful career working from home.

8. Evaluate Search Engines

One extremely interesting and a rather unique online work from home jobs in Canada could be that of evaluating search engines.

Did you know that many companies pay you to evaluate a wide range of search engines at regular intervals?

Of course, there would be a set of evaluation tests and certifications that you must pass before you take up this job.

You have the option to choose this job via online listing or newspaper/online ads.

Apart from open positions in Canada, there are also several other countries you could get a scope to work in.

These include Unites State, Norway, Denmark, Belgium and the like. The bottom line is the pay is good; you get international exposure despite working from home.

The overall pay is close to $50-$200 per hour, and on an average, you can put in 5-6 hours a day.

Now, it will leave you to compute the rest of the maths to get a realistic idea of how much you can earn in a month.

Moreover, you do not necessarily need to be a Canadian citizen to bag this type of online work from home job as long as you meet the criterion.

Conclusion

In simple terms, work from home jobs in Canada is pretty much similar to what you see across the world.

They are all about flexible timing, easy schedules and dignified way to take up an alternate career even though you work from home.

Most of these Canadian online jobs from home highlight the unique demographic advantages and challenges Canada represents.

They highlight the Canadian fetish for high living and hardworking lifestyle.

Most of the online work from home jobs in Canada also bring out the advantages that they enjoy as a result of a sustainable and improved internet access and advanced computer expertise.

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.

But 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.

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.

Whether 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.

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.

This 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.

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.

The 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.

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.

This 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

When 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

If 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

If 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

If 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

This 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

If 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.

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.

The 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.

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.

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.

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.

One 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.