Stock Margins Can Make or Lose You A Lot of Money

By Richard Moran

Some people who invest into the stock market use other peoples money to purchase those stocks. It is called buying on margin and is equivalent to purchasing a home on credit. The main difference between the two is you can improve your homes value by updating and remodeling and you rely solely on the stock market in order to pay off your loan on marginal stock purchases. The recent stock market problems were caused in part by marginal stock holders whose investors became nervous and demanded their money before the stocks could make a profit. This drove the price of these stocks to all time lows.

Just Pay For the Stock You Buy

When you buy stocks outright you pay for your stocks at the time you purchase them. For example, you may purchase one hundred shares of stock at fifty dollars per share costing you five thousand dollars. It is over and done, you own the stocks, and they are free to earn you the money instead of earning someone else money. Since most brokerage firms require you to have a minimum equity of two thousand dollars to begin with before buying on margin, it simply makes sense to drop the number of shares you purchase and own them outright.

You Know It's a Sure Thing and Want 10,000 shares rather than 1,000

When you buy stocks on margin, you are requesting a loan for the money to purchase those stocks. In return for the loan from the brokerage firm, you will pay interest on that loan. The brokerage firm is virtually making money on your loan and will hold your stocks as collateral against the loan. If you do not pay the firm back, they sell the stocks. In short they have little risk involved in loaning you the money for the stocks. On the other hand, you have to see to it that the stocks you select make enough in profits to not only put money in your pocket but to pay the loan back to the brokerage firm.

Regardless of How You Pay You Still Must Know What Stocks To Buy

One way of ensuring you can pay back the loan on your investments is to know your stocks. You should study your stocks before making a purchase. It is important to know how they have been effected by other aspects of the market, how often they drop, how long they remain on a rise and what the average rise for them is. By studying the stocks you want to invest in, you may find that you dont need to borrow money in order to invest.

On Margin or Outright

It comes down to your mindset when it comes to risk. If you will get ulcers worrying about the money you owe on margin it might be a good idea to stay out of the market all together, or buy mutual funds and let someone else worry about the return. Paying cash leaves you in a more flexible position while the margin gives you greater potential. The most important thing is to do your research and invest with your head not your heart. - 23305

About the Author:

Richard Moran is a Business Consultant and writer for Money Helpers. The Blog contains hundreds of articles, charts, and calculators to assist you in your Business health. All the aspects of the Blog are free and it is updated on an almost daily basis. If you are looking for any Business aids or products they can be found on Money Helpers.

Tips For Land Owners

By Layla Vanderbilt

You are a landlord. You've already paid up to buy the property that you now are trying to profit from. This might have run you a pretty penny and it's unlikely that you'll want to have to spend more anytime soon. However, while you may have heard people speak of having to spend money to make money, being a landlord is a career in which that adage holds true. There are some aspects of your property and the management thereof that, if you spend some money now, will help you to bring in the big bucks later on.

The first area worthy of investment is landscaping. Think about it. The very first thing any prospective tenant sees is the property's front yard. You definitely want to make a good first impression, so take the time and money to hire a good landscaper...and front the property's water bill. Your future tenants will enjoy all a good, well-kept yard has to offer, with the added luxury of not having to do any of the upkeep themselves. Get an inexpensive sprinkler system installed to keep everything watered, and hire a good gardener to take care of it all. A big part of the appeal of renting is the lack of yard work on the tenants' part- don't let your lawn reflect that fact!

2. Advertising: In order to lease your property to someone a prerequisite is that they should be aware that the property is to be had on rent. You must certainly put an mark in your yard indicating that your property is available for the purpose of leasing, it may be that this place is not very busy and hence a very few people would come across this information, in this scenario you need to put in some extra efforts, you can effectively utilize the power of Internet which is widespread and cheaper than Newspapers when it comes to publishing advertisements. Explore the web to find some suitable places where you can put up the details of you property.

When those prospective tenants finally find you, they're going to want to deal with a company; something that looks professional and trustworthy rather than just a single person who may or may not be competent! A small investment can net you an 800 number and a P.O. box, giving yourself both a separate place for tenants to contact you and professional looking contact info. This carries the added benefit of privacy, preventing your tenants from knowing where you live, or getting their calls on your cell phone at all hours! You must be sure to keep boundaries set. Your tenants can tend to feel entitled, and if they do develop such attitudes, let it all go to your alternate contacts. In this manner you can keep your life separate and not be enslaved.

The start of the paperwork trail is often where incompetent landlords finish themselves. Don't be them. Spend a little extra to have an absolutely flawless, state-specific lease that takes every last bit of legality and every potential dispute into account. A generic form will do you more harm than good if you wind up in court with your tenant.

Don't be too sympathetic or slow with tenants who try to get away with making their payments off schedule. The very first time he's late, hit him with a certified 3-Day Notice. He'll sit up and pay attention and start giving you the money he owes on time.

Be firm and give the tenant the notice the EXACT day that you find it necessary to do so. This is where that alternate contact info will help you again- having it come from Management rather than from you lets Management be the "bad guys" instead of you. With good investments made in landscaping, contacts and a lease, your place well-advertised and you being quick with notices, you'll save yourself literally thousands and your career as a landlord will become as profitable as you've hoped. - 23305

About the Author:

Layla Vanderbilt is the webmaster for a leading property management software review website which connects people with the leading property management tools.

Watch Your Stock Portfolio

By Michael Swanson

A successful player in stock market investing will watch his stock picks like a hawk. Monitoring the rise and fall of stock prices is an essential part of the money-making formula.

Watch your stock prices every day, noting whether prices are heading up, down or even fluctuating. You can find stock listings in your local newspaper or on many Internet websites.

It's a good idea to track the performance of your stocks by reading the monthly statements sent by your broker. Use the Internet to keep abreast of stock prices in the interim.

In addition to watching your own stock prices, monitor the price of stocks you are interested in with an eye to buying them down the road. If you track the ups and downs of potential stocks, watching the pattern will help you make an immediate decision on whether to buy, sell or hold.

Stocks that are growing nicely should be added to when you have some extra cash to invest. Remember to diversify your investments. Like the old adage says, don't put all your eggs in one basket, because if that basket falls, everything is broken.

Keep your broker's phone number handy for when it's time to buy or sell stock. Tell him what to do and at what price. Your broker will handle the transaction and give you a transaction number when your order is placed.

Read the Wall Street Journal or Barrons and keep on top of daily news about your stocks and current events that affect the stock market.

Be warned that like a bomb, the stock market can "go off" at any moment. It is very volatile which is why sometimes cooler heads must prevail. Look three years down the road when investing in the stock market and don't dump your stocks impulsively if they start to take a nose dive. Take a look at your stocks over time.

Congratulations! Day trading can be profitable for those who are vigilant, but remember it still takes a lot of hard work and sophistication. - 23305

About the Author:

For more articles from Mike Swanson sign up to his stock trading weekly newsletter.

Margin Accounts For Online Forex Trading Have Risks And Rewards

By John Eather

The benefits of online forex trading with a margin are that it allows the broker to leverage lots of currency which are as much as 100:1 the size of his deposit. This makes for very good profit potential. However with every high profit venture, comes the high risk aspect which is the other side of the coin. If a trader is not careful and does not know what he is doing he could lose his margin deposit.

If your margin account stands at a leverage ratio of 100:1 or 1% on a lot unit of $100 000, even a one cent move of a currency in the wrong direction will see this deposit completely wiped out. Essentially this means you lose $1 000!There are methods and safeguards in place that will limit these losses, for instance "stop loss orders". These will automatically close your position if the currency drops below a certain point. They will allow traders to limit losses, while still allowing potential profit to be earned.

Stop loss order can be put in place to prevent this from happening by they are not fool-proof. However they do still allow for a certain amount of profitable trading, as well as limiting of losses.

While there are both risks and rewards when trading online in forex margin accounts, this is the case with any type of investment process if you hope to make big profits. Professionals are trading places with their jobs as doctors, accountants, lawyers and other enterprises, in the inherent belief that they can make far more money by online foreign exchange trading. They also need to take the necessary precautions to protect their investment.

So you see there are both risks and the potential for great rewards when using a margin account. The beauty of this kind of account however is that virtually anyone who can get their hands on $1 000 can become a forex trader. Professionals are making dramatic career changes to get into this industry, but everyone needs to know that knowledge is vital. Rather invest that first $1000 in getting yourself an education in currency trading, to obviate any costly mistakes. - 23305

About the Author:

Learn more about online forex trading. Stop by John Eather's site where you can find out all about forex trading systems and what it can do for you.

Forex Leverage Explained

By Ahmad Hassam

One of the features of forex markets that differentiate it from other financial markets is the astronomical level of leverage that is commonplace in the forex world. Whats so special about Forex Leverage?

Some Forex brokers can offer up to 400:1 leverage on the average retail trading account. The usual level of leverage is 100:1. The implications of this are mind boggling. This means that $1 in a traders forex account can control up to $400 in a currency trade. No other financial market offers even close to this level of leverage.

Forex leverage is a double edged sword. Forex leverage can both be a very positive feature as well as a very negative one. By definition, leverage is type of financial magnification. While it is true that high leverage magnifies profits, it also magnifies losses equally.

High leverage of the magnitude found in forex trading can offer tremendous possibilities to the upside as well as the downside. However, you need to use it with a great deal of caution. This high level of leverage summarily wipes out otherwise healthy trading accounts often.

Common leverage ratios offered by forex brokers range from 50:1 on the low side all the way up to 400:1 on the high side. The sheer magnitude of this leverage, even on the lows side, far eclipses, the amount of leverage available in other financial markets.

Suppose that 400:1 leverage is utilized. In practical terms, what this means to you as a forex trader is that a standard lot of $100,000 for example can be traded in EUR/USD currency pair with only $250 in trading account margin.

You must have seen many ads by forex brokers that say that you can start trading with as little as $250. You will be surprise that you only need $250 in your account to start trading. $250 in your forex trading account can control a trade of $100,000 using 400:1 leverage in this particular example. For every $1, you as a forex trader are in fact controlling a whopping $400 in other words.

Some brokers even advertise that you can open a trading account with $50. With $50 you can trade a mini lot of $10,000 using a 200:1 leverage ratio. The fact that a small amount of money can control a large amount of money in forex trading can certainly serve to magnify potential profits. Can you handle this much leverage while trading? The amount of risk involved in using this high level of leverage is also equally magnified, however on the flip side of the coin.

Therefore, it is advisable to use caution when trading with the substantial leverage common in forex trading. High leverage trading is aggressive trading that is both characterized by high risk and high reward potential.

Dont get hoodwinked by the forex broker advertisements. Too much leverage is dangerous. Even a small movement in the market can be magnified many times by using leverage making large profits for you when the market moves in your favor. Now this is the positive side. You need leverage in forex markets because the size of the currency pair movements is too small. So you need to magnify it with leverage. However, when the market moves even a small amount against your position, your whole trading account can get wiped out. This is the dark side of using too high a leverage.

You need to know the safe level of leverage you can use in your trading. In the beginning, dont use more than 5:1 leverage in your trading. You can increase that level to 10:1 or 20:1 with experience, but this much leverage would be sufficient for you. Once you really start trading like a professional trader than you can use 100:1 ratio to trade a standard lot. - 23305

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try 1500 Pips a day Forex Signals. Discover a revolutionary Forex Robot Trading System!