Fund managers & the investing public tend to be very short-term performance focused. They tend to buy a stock when there is lots of good news (i.e. economy is strong, company’s earnings beats forecast, launch of a new product etc…) that pushes the stock price higher and higher. Consequently, they tend to jump out of a stock when bad news sends the stock price falling. Actually, there is nothing really wrong with this approach.

By doing so, you are investing along with the trend. This strategy is known as ‘momentum investing’ and we are going to be looking at it in the next chapter. However, the danger with ‘momentum investing’ is that it is all about timing and the ability to read into investor psychology.

The trouble is that most average investors who lack these skills jump in too late (after all the professional funds have entered), when the stock price has already risen near its peak! Sure enough, they fi nd that the stock prices start falling the day after. Out of fear and panic, they sell the stock and end up with a loss. This is why the typical investor always experiences their stock price falling soon after they have entered the market.

High Risk, High Return Versus Low Risk, Low Return

While many fi nancial experts preach the concept of having to take high risks in order to make high returns, master investors like Warren Buffett believe that it does not take high risks to make high returns. Instead, it takes a high level of fi nancial and business competence to make high returns!

In fact, he will only make an investment when there is a very low risk of loss and a very high probability of gain. He does this by only investing in companies that are selling way below their true value. In this way, he gives himself a wide margin of error. Which means even if his calculations are off, he will still be making money.

Invest Only when there Is a High Probability of Success

The trouble with professional managers of mutual funds is that they are pressured to invest 80% of their cash into the market, even when there is nothing attractive to buy. This happens after a prolonged bull-run when stock prices are so high that companies are way overvalued.

Fund managers & the investing public tend to be very short-term performance focused. They tend to buy a stock when there is lots of good news (i.e. economy is strong, company’s earnings beats forecast, launch of a new product etc…) that pushes the stock price higher and higher. Consequently, they tend to jump out of a stock when bad news sends the stock price falling. Actually, there is nothing really wrong with this approach.

By doing so, you are investing along with the trend. This strategy is known as ‘momentum investing’ and we are going to be looking at it in the next chapter. However, the danger with ‘momentum investing’ is that it is all about timing and the ability to read into investor psychology.

The trouble is that most average investors who lack these skills jump in too late (after all the professional funds have entered), when the stock price has already risen near its peak! Sure enough, they fi nd that the stock prices start falling the day after. Out of fear and panic, they sell the stock and end up with a loss. This is why the typical investor always experiences their stock price falling soon after they have entered the market.

High Risk, High Return Versus Low Risk, Low Return

While many fi nancial experts preach the concept of having to take high risks in order to make high returns, master investors like Warren Buffett believe that it does not take high risks to make high returns. Instead, it takes a high level of fi nancial and business competence to make high returns!

In fact, he will only make an investment when there is a very low risk of loss and a very high probability of gain. He does this by only investing in companies that are selling way below their true value. In this way, he gives himself a wide margin of error. Which means even if his calculations are off, he will still be making money.

Invest Only when there Is a High Probability of Success

The trouble with professional managers of mutual funds is that they are pressured to invest 80% of their cash into the market, even when there is nothing attractive to buy. This happens after a prolonged bull-run when stock prices are so high that companies are way overvalued.

Selengkapnya...

For people who get banned or dislike with credit card, here is alternative to credit cards, just sharing for you.

Pre-Paid Credit Cards.

These are cards that work just like credit cards, except that you can’t have a negative balance - you have to put money on the card before you can spend it. That means that you ‘top-up’ the card, like you would a mobile phone. This is good if you want to know how much you’re spending, not to mention that you can even give the cards to children. They’re also safer than debit cards, since someone who stole the card could only spend whatever money was on it at the time.

For people who get banned or dislike with credit card, here is alternative to credit cards, just sharing for you.

Pre-Paid Credit Cards.

These are cards that work just like credit cards, except that you can’t have a negative balance - you have to put money on the card before you can spend it. That means that you ‘top-up’ the card, like you would a mobile phone. This is good if you want to know how much you’re spending, not to mention that you can even give the cards to children. They’re also safer than debit cards, since someone who stole the card could only spend whatever money was on it at the time.

Selengkapnya...

So your business has expanded to reach the point where you need to find an effective Internet payment solution? The first option to consider is applying for a merchant account. If your business enjoys a solid credit history, pays its bills on time, and avoids controversial dealings, your application should be approved without a hitch. Then you can set up a company Website where you can sell more products and services and let customers pay with a credit card online.

This Internet payment solution is one of the fastest growing e-commerce innovations today. No matter how large or small your company, it is always a good idea to put up a Website to establish a cyberspace presence. At their leisure, your current and potential new customers can visit your site and browse all kinds of information, such as hours of operation, product lines and price lists, testimonials, FAQs, and other useful details. When you install a credit card processor, guests can shop on the Website and pay with plastic by inserting the cardholder’s name, account number, and date of expiration. There is no need to wait around for a check in the mail or a hand-delivered money order.

So your business has expanded to reach the point where you need to find an effective Internet payment solution? The first option to consider is applying for a merchant account. If your business enjoys a solid credit history, pays its bills on time, and avoids controversial dealings, your application should be approved without a hitch. Then you can set up a company Website where you can sell more products and services and let customers pay with a credit card online.

This Internet payment solution is one of the fastest growing e-commerce innovations today. No matter how large or small your company, it is always a good idea to put up a Website to establish a cyberspace presence. At their leisure, your current and potential new customers can visit your site and browse all kinds of information, such as hours of operation, product lines and price lists, testimonials, FAQs, and other useful details. When you install a credit card processor, guests can shop on the Website and pay with plastic by inserting the cardholder’s name, account number, and date of expiration. There is no need to wait around for a check in the mail or a hand-delivered money order.

Selengkapnya...