| Bonds are a core element of any financial plan to invest and grow wealth. If you are just beginning to consider investing in bonds, use this section as a resource to educate yourself on all the bond basics. In this section you will learn: |
- what a bond is
- why financial professionals recommend that you have bonds in your diversified investment portfolio
- key factors to consider when evaluating a potential bond investment
- fundamental strategies for investing in bonds
- about tools and aids that will help you understand bonds
Beginning Investors
- Start out by learning about Bond Basics—what bonds are and what role they can play in your portfolio.
- Then take the next step with the What You Should Know section, which builds on what you’ve learned in Bond Basics. Here you will learn more about the debt markets and how external factors can affect your bond investments. This segment also offers a helpful Investor’s Checklist which can equip you to begin investing in bonds.
- Next learn about what Types of Bonds you can invest in.
- If you are prepared to invest in debt securities visit our Buying and Selling Bonds. Gain market and investment insights in our Bond Investment Strategies section
- The Bonds at Your Stage of Life section answers questions about how much of your portfolio should be invested in bonds at each stage of life.
Experienced Equity Investors
- Would you like to boost your bond knowledge? Are you looking for more information on the key bond markets sectors? Learn more about individual bond types and markets at:
- Do you want to look up a municipal or corporate bond price or check the latest government bond market commentary? Get news, commentary and a real-time picture of what the individual bond markets are doing on the Market at a Glance sections for each type of bond offering. Click on the navigation selections at the top or left to choose your next step.
- If you are prepared to invest in debt securities visit the Buying and Selling Bonds segment which includes a helpful Investor’s Checklist. Gain market and investment insights through the Bond Investment Strategies section.
- The Bonds at Your Stage of Life section answers questions about how much of your portfolio should be invested in bonds at each stage of life.
A helpful hint: if you visit the Market at a Glance pages, any chart, table or graph representing information on the particular bond market sector, has a ? symbol in the upper right hand corner. Click on the ? symbol to learn what the graph, table or chart represents (What is it?) and why it is relevant to you the investor (Why Do I Care?)
Seasoned Bond Investors
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Five Steps to Become A Forex investor :
- Step 1: Learn how to read a forex quote.
This is a ratio of one currency to another. USD/EUR is the price of a US dollar as expressed in Euros. The currency listed first is the base currency (usually the stronger currency at the time of the quote) and is given a value of 1. The second currency is the counter currency and derives its value in relation to the base. If the USD/EUR quote is 1.21, that means 1 US Dollar has the same value as 1.21 Euros.
- Step 2 : Understand the definitions of pip and spread
. Prices in foreign exchange are expressed in pips--percentage in points. The pip is the number in the fourth place from the decimal point, or 1/100th of 1 percent. If USD/EUR is 1.1300/1.1304, there is a 4-pip spread between the two currencies.
- Step 3: Learn about bid and ask.
The "bid" is the selling price for the base currency and the "ask" is the price to buy the base currency. Both transactions are done simultaneously.
- Step 4: Learn about leverage and margin.
Leverage is the ability to trade without having to put up the entire amount of the transaction. Margin is the minimum amount required in order to participate in a trade, usually 1 to 2 percent. The forex market allows higher leverage because major currencies are less volatile than stocks; higher leverage also allows amplification of both profit and loss. Because of this, the forex market is more volatile than the stock market .
- Step 5 : Select a mutual fund.
Unlike the stock market , the forex market has tiers of access. An individual investor would find it difficult to gain significant access. Furthermore, in a 24-hour market, it is difficult for individuals to keep track of investments with any degree of vigilance. Most retail investors work through specialized mutual funds. Search online for managed funds to choose from. Your choice will depend on your desired level of risk, the fund's past performance, the fee structure, and restrictions on deposits and withdrawals.
More Forex Tips :
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HOW TO BUY A STOCK
| The Three Steps: |
1. CHOOSE AN INVESTMENT BROKER:
Different brokers offer different levels of service, different commission schedules and different methods of stock trading. Go to the Yellow Pages- it will be stuffed with possibilities- then make some calls. Select your investment brokerage on the basis of the service you need:
- On-Line Stock Brokers: On-line stock trading offers the lowest commission. In most cases, there is no "broker" to talk to. Stock traders simply log on and enter their transaction from the key board. There will be a customer service department to answer questions about stocks and trading in general. This type of account is used mostly by experienced stock traders!
- Discount Stock Brokers: The discount stock broker executes stock trades, at the customers direction, at a commission rate that is lower than the full service stock broker. On-line stock brokers are discount brokers- but many now offer "full service". The trader is responsible for his/ her own transactions. Sometimes called a "silent" broker service, this service will answer questions about transactions, and advise on the actual order, but not on which stock to buy or when. Discount brokers also provide telephone and on-line trading.
- Full Service Investment Brokers: This type brokerage will actually give you advise as to what type of stocks, bonds, commodities to buy, when to buy and when to sell. A full service broker may offer financial planning, tax shelters or advise of new stock issues or special situations. They can even buy and sell on your behalf. Commission will be higher than a discount broker.
Popular Brokers: Links |
2. SET UP AN ACCOUNT:
Most brokerage account require a minimum amount of cash to open an account. Minimums range from $1000 to $2500! Once the account is opened, a minimum balance is not required. In other words, you can take part of your money out. NOTE: You will be required to make a trade at least one a year or incure a "non-trading" fee.
- Request An Application: Call the broker you decided on and request an account application (or fill it out on-line). The brokerage will ask you about options, mutual funds, margin and perhaps a few other things you don't know about. Simply say you want an application only for stock trades (also include that you don't have a clue about the other items).
- Read the Application: If you can't get past reading the application, seek the help of a qualified financial planner, or a CPA. If you can't get past understanding the terms and conditions of the application/ agreement then maybe stock trading is not for you (of course many people never read a loan agreement either!).
- Select a "Sweep" Account: A sweep account is an interest bearing account where your un-invested money goes, including your initial amount used to open the account. The options are many and vary from brokerage to brokerage. An example: Dreyfus Fixed Income; this sweep account will yield a fixed daily interest rate while your money is waiting to be invested.
- Fund Your Account: Send a check or "wire" the funds to your account. Expect this to take at least a week. Even if you have your bank wire the funds, it may take up to 24 hours before it funded.
- Receive Your Password: Your account is funded- you still have to wait for your password to mailed to you. As aggravating as it is, most brokerages mail your password to you via US Mail. You know already know, based on your own past experience how long this will take.
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3. MAKE YOUR FIRST TRADE:
Hopefully you have done some research, read some books, know your risk tolerance and your investment goals. Make your trades. There are several ways to specify your trade. Know them before you make a trade! Your brokerage will help you.
- Specify the Type and Amount of Trade: If you've gotten this far on the page, congratulations!
There are many types of trades; fill or kill; day order; market order; limit order etc. Your broker will help- call before you trade (or use the on-line help function). Also, the brokerage will usually send an information packet explaining these types of trades.
- Specify the Registration: Registration is how your stock will be registered, or "named". Street Name Registration is common and easiest. STREET NAME means the stock will be registered in the name of the brokerage and credit will be issued to your account. ACCOUNT NAME means the stock will be registered in your name and a certificate issued to you. ACCOUNT NAME or JOINT NAME registration is used when the stock purchase will be used to start a dividend re-investment plan. There are different reasons, advantages and disadvantages to registering in a certain way..again, e-mail me, or ask your broker.
- Save Your Account Statements: Store every account statement you receive from your broker! You will need these for tax purposes when you sell! Failure to save your account statements for future record, will cause you great grief when you try to show how much you originally paid for your stock.
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