Stock Market

How To Invest In These Financial Times?

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When you think about it, these are indeed challenging times to live in – many have though the current economic downturn in line with the Great Depressions that happened all the way back in 1929. However, even despite a lot of the depressing job industry numbers we hear about every day, as well as the recent riots, the stock market had continued its march upward with the hopes that the economy will recover its confidence that it had before the COVID-19 outbreak came along and began to effect things earlier this year.

Naturally, there are some lingering questions revolving around how long everything will continue to climb if the virus returns stronger again later this fall and winter. Many also point to the disconnect between Wall Street and Main Street. The stock market still continues to be a massive moneymaker over the last several weeks. People who bought in during the exchange lows made many times the amount of money they actually placed during the all-time lows in the industry.

Should I Spend in The Stock Industry? Is it Safe?

Source:technative.io

At the time this article is being written, we are feeling confident that the stock market is still a safe and a very good place to spend in. If you are new to the entire concept of the stock exchanges, we would advise you to speak with a financial adviser before actually making any significant purchases. However, with the right strategy, we feel that there is still plenty of money to be made n this business.

What Should I Choose? Long-Term or Short-Term Options?

If you are planning on being in the industry for the next 20 years, you should know that there is no better time to jump into the industry than right now. That said, there will be both ups and downs that will occur in the market. Of course, it would help if you were ready to make a lot of money and lose a lot of it when spending on long-term deals.

But, if you do choose to one that is 20 years long, your long-term objective is probably to make a lot of money in that time and be able to pair it with other, short-term losses that come with the long-term option. But, what about short-term investments? Should I choose them?

You might be thinking about making short-term purchases, you should know that is much riskier. For some people, it can work out quite well, and they do make a lot of profits. We would not recommend that you choose short-term ones unless you are prepared to lose it at some point.

If you are looking for a financial adviser in the Tulsa, Oklahoma, you should click here. Although this type is much riskier, it can help you with gaining the wealth of knowledge that you’ll need to prepare yourself for making decisions for those long-term plans that you have.

What About Other Types? Ones Besides The Stock Market?

Source:yanierahman.com

The most common investment types outside the world of the stock market are spending on real estate, as well as purchasing assets such as silver and gold. With real estate, you can have several options. For instance, you can choose to purchase a property, remodel everything, and then sell it. Or you can purchase a property and rent it out.

The same goes for precious materials such as gold and silver. The prices will vary and change from week to week, hence, people who are looking at purchasing these two things often find themselves acquiring these materials when the prices are lowest, which allows them to save some resources.

How, When, And What Should I Choose?

Now, this is something that will depend on you, but, it is still worth mentioning. When and how you should invest will depend on a wide range of things, including your age, how much wealth have you built up over the years, as well as your general life situation. However, there are some tips that you can remember, ones that will surely make everything easier for you:

  1. Choosing a Reliable Company is Important

One of the first things you should know is that you’ll want to choose a reliable and trustworthy company. You’ll be spending real money on something, which means that you do not want anyone unprofessional to take care of it. Hence, before you choose a company, ensure that you do some digging to check if it is good.

  1. Always Have Objectives

You should always set both short- and long-term objectives if you are thinking about working in the stock market. Why is this important? Well, it will help you understand the purpose of your purchases, and then you might also understand what the future you will need those funds. You’ll want to know what you’ll use the funds for, as well as for what you are investing in. This will not only ensure success but, it can also ensure that you stay motivated.

Source:time.com

  1. Never Chase Your Losses

One of the biggest hindrances that you can come across is chasing your own losses. This is why you’ll need to learn how to control your emotions, as well as make decisions that are logical and based on facts. By doing so, you can ensure that you do not make quick decisions that might cause you to lose everything you have.

  1. Always Learn The Basics

Before you actually choose to place your money for buying something, you should learn and comprehend the basic things first. This means that you’ll want to learn the terminology, how a particular platform works, as well as everything there is about the different departments that make the market. This will allow you to make better choices when it comes to the entire process.

Source:moneycrashers.com

Conclusion

As you can see, there is a wide range of things to know about investing in the stock market. Of course, the decision of when, how, and into what you’ll place your funds will depend entirely up to you, however, you should not spend money on anything until you understand the risks it carries.

So, now that you know everything there is about your investing options, you should not lose any more of your time. Instead, think about all of the options you have, determine which one might be best for you, and then start your journey in the stock market!

Facebook Stocks: How to Predict and Invest in Facebook Stocks in 2020

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Despite some controversies in 2018, Facebook recently posted a 30% jump in profits. 

For people that have money in Facebook, this is fabulous news. But if you don’t own any Facebook stock, you may feel left out, as you sit on the sidelines and watch other’s make money. 

Fortunately, it’s not too late, and if you know how to predict changes in the price of Facebook stocks, you can still make money. 

Read on to learn how you can make a tidy profit from Facebook stock. Whether you’re a fan of the platform or not, these tips will show you how to win whenever Facebook does.  

Let’s begin! 

1. Pay Attention to Key Dates

If you want to make money as a result of trading Facebook stock, it’s vital you pay attention to key dates associated with Facebook.

For instance, you’ll want to find out when the company is going to issue its earnings report.

The sentiment surrounding the earnings reports can have a large impact on whether the price goes up or down.

Img source: fool.com

You’ll also want to pay attention to specific dates associated with Facebook and its interactions with the government. This is because government interference can affect the stock price.

This happened recently when executives attended a Senate hearing. During this event, Facebook stock experienced a severe decline.

Predicting how these events will impact the price of Facebook stock is difficult. That said, some websites will offer a Facebook stock prediction service, making it easy for you to figure out if you should buy or sell. 

2. How to Buy Facebook Stock

If you want to buy Facebook stock, you can use the services of a broker, or you can set up an online trading account.

When choosing a broker, you’ll find that there’s the option of using a ‘full-service’ broker or a ‘discount’ broker.

A full-service broker will provide you with advice on your trades and will guide you towards making profitable decisions.

A discount broker will not provide you with this advice, and all they will do is execute trades for you. 

An online trading account provides you with a lot of freedom as you’re the one that’s executing your trades. Of course, this freedom can be dangerous, as you have no one to double check your trading decisions. 

Img source: time.com

3. Be Wary of Other Tech Companies

If a tech company posts poor results, it can lead to other tech companies experiencing a decline in stock price. This phenomenon was apparent in 2018 when tech stock prices all experienced a severe drop. 

Because of this, it’s vital you pay close attention to what is going on with the other large tech companies.

The main companies you’ll want to focus on are Amazon, Netflix, Google, and Apple. Think about setting up some alerts, so that you’re notified of any significant news related to these companies.

Img source: gannett.com

Time to Buy Some Facebook Stocks? 

If you want to make money as a result of trading Facebook stocks, the tips in this post should help set you on the right path. 

Though it can be helpful to focus on just one stock, you should eventually think about trading more than just Facebook. In doing so, you should be able to maintain a positive trading account, even if Facebook is having a lousy quarter. 

Making money as a trader isn’t going to be easy. But if you focus on making rational decisions, rather than emotional ones, you should end up with more wins than losses. 

Think you might make a mistake when trading stocks? Read this post to get some helpful stock purchasing tips. 

How is the Stock Market Connected to Economic Performance?

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The price of a stock is seen as a reflection of the health and success of a company. Yet the state of the stock market as a whole is not as directly correlated to the success of the local economy. For example, prices affect consumer and business confidence, and the confidence of investors and company owners influence the overall market. How is the stock market connected to economic performance?

The Stock Market as a Barometer of Mood

Source:kryptographe.com

The stock market and the economy influence each other, but the terms should not be used interchangeably. Prices typically follow a trend, and that doesn’t necessarily match other economic trends.

Yet the stock market’s trend line can influence the psychology of investors and the public in general. If the prices are going up, they may go up higher than the business fundamentals say it should be priced because people expect it to keep going. That can lead to a bubble, but it tends to lead to a correction. If people are afraid a market sector is going to suffer, they’ll sell off stocks and devalue them, though an individual company may be stable and profitable.

The overall stock market can be a barometer of collective mood as well. As the market trends upward, people tend to buy stocks that are appreciating. More importantly, others join the market hoping to profit from the upward trend. They may buy them in the mere hope that it will go up. And the inverse is true in a bear market, when the stock market is going down.

When people are pessimistic about the economy or about a particular industry, they’ll sell, and others will flee the market to sit on the sidelines. When the news media creates a climate of fear, people will move funds from the stock market to lower risk assets. That will depress stock prices further and make their predictions of doom and gloom come true. Sheer fear can cause a stock selloff and collapsing market though the businesses themselves are doing fine.

Volatility in the stock market is itself a sign of general uncertainty. In general, that hurts consumer and business confidence. It can be offset by other positive metrics like improving employment rates and gross domestic product growth. Trading price movements of shares up or down is possible via contracts for difference. This means you could profit from downward stock market trends in addition to the traditional method of buying them in the hope it can be sold for a profit later. For more information visit easymarkets.com.

The Stock Market as a Reflection of Consumer Spending

Source:fortune.com

We’ve discussed how the stock market can be a reflection of general sentiment, accurate or not. The stock market can also be a reflection of consumer spending habits. When people increase their spending in a given area, stock prices in that industry will generally rise. When reports come out that people are losing interest in a company’s products or a class of products, the stock price for related companies will fall.

Stock markets can also drive consumer spending, since they’re a measure of consumer sentiment. For example, a rapidly appreciating stock portfolio makes many people feel wealthy. They’re now more likely to spend on consumer goods and big-ticket items.

When portfolio values are falling, they’re more likely to put off purchases or downshift their purchasing to cheaper products. This even affects the general economy. A falling stock market can cause people who don’t hold stock to cut back on nonessential spending as they beef up savings, just in case the economy slows down and they lose their jobs. In this regard, a falling stock market can cause slower economic growth.

The Stock Market and Business Investment

Source:123rf.com

Issuing stock is one way in which companies can raise money to expand the business. Stock prices can also affect business investments. Businesses are more likely to invest in new capital improvements when there is strong, positive sentiment.

If people think things are going well and will spend more, this is the time to invest in new production and storefronts. And when the stock market is going down, companies tend to push pause on their expansion plans. They’re afraid a slowdown in consumer spending will hurt their business. Furthermore, the lower price of their stocks prevents them from issuing new stock to fund growth.

On the other hand, optimism explains why merger and acquisition activity speeds up during bull markets. When stock prices are high, the stock can be swapped as part of a merger because of its high value. This allows firms to essentially buy other firms without having to use as much or even any cash. And when business and consumer confidence is high, you see more initial public offerings, because firms expect to get the most money for their shares. This is why it’s important that you know everything you can about mergers and acquisitions. A perfect place to start would be this Wall Street Prep guide.

The Interest Rate and Stock Markets

Interest rates affect the economy, and this in turn has an effect on the stock market. When interest rates rise, borrowing costs go up. This will slow down consumer spending and business investment. When interest rates go down, this can stimulate economic growth because borrowing is cheaper.

However, interest rates may be a response to economic conditions that have their own impact on the stock market. For example, higher interest rates required to issue new debt to cover a major government spending deficit will slow down an economy and reflect trends that will hurt it long-term. Currency fluctuations that cause interest rates and currency values to go up will increase the cost of exports. This will hurt export-driven firms and countries with export driven economies.

The stock market can go down when interest rates go up, too. When the national economy is overheating, raising interest rates is a way to cool things down. This is a sign that inflation is a problem, since it was necessary to take action to adjust it.

Raising interest rates faster than expected demonstrates that there is a serious issue, and it can cause the stock market to drop. A national bank dropping interest rates repeatedly is also a warning sign. It demonstrates that the economy isn’t picking up as fast as the economic leaders think it should.

The stock market is affected by both business fundamentals and general sentiment. These two forces can be at odds with each other, but they can influence each other as well.

Tim Sykes Review: The Advantages of a Trade Teacher and What to Look for

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If you are looking into getting a start in day trading on the penny stock market unless you are someone who has had previous experience or education in it already. The likelihood is that you will need someone to at very least give you a few pointers so that you aren’t finding yourself making elementary mistakes that could be easily avoided if you’d had just had some coaching. In the very likely scenario that you don’t have this prior experience or education, you will be looking for this person to give you the advice you need to start off, but you might not be sure where to look for or what makes one person more qualified than another, one review provides a fantastic insight into what makes the service provided by Timothy Sykes such an effective one.

It can seem strange for someone to be handing out such praise to a service such as this, and this is not something that is lost in the review. As to make sure that the claims are not baseless, it displays the facts to give some background to what makes this coaching service for trading so worthwhile. It is explained very early on in the explanation that it can be found that the person who founded the program and provides the advice has a background in trading as well as showing the success he has had during his career in finance. It goes on to provide that his success hasn’t just been limited to himself, but since deciding to go into education he has just as much success in imparting his knowledge onto those who have undertaken the course so that they can be taught how to find success themselves in the penny stock market. That there can be so many real-life examples that can be used to illustrate the effectiveness of the course is as good evidence as there can be, that if you enroll in the course and do the work. You will be able to take the skills and knowledge that you have gained and put it to use in the market in pursuit of a profit and success story of your own.

Source:londonreal.tv

The advantages of finding a trade teacher to show you the ropes are something too many people are an obvious answer, that they will help you make more money. This is indeed true and is certainly what the course offered on Timothy Syke’s website is geared towards achieving, and most certainly teaches you the lesson and gives you the means to make more money by trading. Plenty of us will be satisfied that helping you make money is the only advantage of getting a trade teacher that you need to know about. But it is more nuanced than this and knowing that there are those of you who want a more in-depth answer this review takes notice of this and accordingly makes sure that it doesn’t skip over what makes this program beneficial to someone who wants to make the most out of the penny stock market. It explains the way that it helps you identify the best means of trading, how you should be buying and selling, how long you should commit to a position in the market, all of these things.

It explains the benefit of undertaking the course with Timothy Sykes as not simply just telling you what to trade and when to do so, but showing that you yourself are going to be able to identify when you should be buying and selling, and what you should be buying and selling so that, as mentioned make the best out of the market. This is what the program is excellent for, it teaches you how to look at the market in the most informed manner. So that when you make a good movie, you know exactly why you traded as you did, and why it was a good move. It makes it so that you are able to trade well without leaving you dependent on anyone else. You are yourself by the end a well-versed trader, rather than someone who has just had their handheld.

Before reading on, check out the following site for a real-life review: https://tradeoptionswithme.com/reviews/trading-course-reviews/tim-sykes-review

The most important thing that you should be taking into consideration when you are deciding to look for a trading teacher, aside from the obvious matter of whether it works or not, is whether the lessons can be taught to you in a way that works. This is something that is well taken care of if you choose to go with Timothy Sykes as is noted in the breakdown that can be found that there are a few different ways in which you are able to access the material that is made available by becoming a member to Timothy Sykes’ website. That there is more than one way you can access everything is undoubtedly a massive positive of the website. As depending on what works best for you, the course is able to accommodate you to allow for the most successful and efficient rate of learning the lessons that are on offer.

The obvious advantage of finding yourself a trading teacher is that it can help you make more money, this is obviously true of Timothy Sykes’ teachings as that is the end goal of any course. But where this course is better is that it teaches you how to do this, it allows for you to be successful in your own right and find the success that is well and truly your own. When looking for a trading teacher this is something you should always look for, and in addition to this, you are also able to learn in a number of ways that are made available to you on the website. Making it easier than ever to learn what there is an offer on the website to make you the most successful trader that you can be.

The Relationship Between the US Stock Market and the Economy

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The US stock market is enormous. At over $30 trillion, it is a massive one. Many global companies are active on it and they affect the economy as a whole. Pundits have always based their economic forecasts on the performance of the stock market. 

The general mood of investors in the market can indicate how the economy will perform in the coming months. The stock market and the economy are thus tied in a special relationship where occurrences on one end affect the end. The following is a breakdown of the key ways in which it affects the economy.

The Working Mechanism of the US Stock Market

Before delving into the key details, it is important to note the mechanisms that characterize the US stock market. To start with, it is among the most liberal ones in the world. It is also huge and it constantly attracts investors from all over the world. The easy processes involved in doing business are the key drivers of investment in the market. Over 46% of households in the US own some form of stocks. US companies are thus enticed by the market and they often get listed when they want to achieve growth.

Img source: pexels.com

How the Market Affects the Economy

In terms of its characteristics and contribution to the economy, the stock market is influential in the following main ways. First, it allows the participation of all individuals. Individual investors and private equity investors can all find their space in it. This is one of the best destinations for individual investors since they can bet on their stocks to give them returns. Representing 40% of the global stock market cap, in the US, it is irresistible. Information is also not a challenge as investors can see the best shares to buy from market data. According to traders working with AdmiralMarkets, investment in this market is also a great way to avoid inflation. When cash is exchanged for shares, the value is retained regardless of the prevailing inflation.

Second, the economy is kept vibrant because of the stock market. When companies are looking for capital, they turn to individual investors. They do this by floating an IPO where anyone can buy shares in the company. This means of raising capital is effective because it gives investors the confidence to buy shares knowing that the firm is valuable enough to go public. Shareholders who buy stocks maintain percentage ownership of the company and thus become invested in its success. Most IPOs end up raising a large capital and this has a lot of bearing on the company.

Lastly, the behavior of investors in the stock market indicates how they generally feel about a particular company. When the stock prices of a particular company go up, the indication is that investors feel confident about the future of the company. When the prices are falling, it means that investors are not confident in the company’s ability to generate profit. These occurrences have an effect on the economy as a whole. In recent times, the technology sector has become the largest in the stock market, accounting for 26% of the total value.

The Effect of the Economy on the Stock Market

Img source: pexels.com

As noted earlier, the economy also affects the stock market. It is a major source of insights for various entities in the economy. When the economy is fairing well, more consumers are likely to increase their spending. One of the areas where consumers end up spending their extra cash is on investments in the stock market. The demand for goods and personal consumption are thus crucial factors that affect the performance of stocks in the market. The various indices show how it performs throughout a business cycle. In a given period where the GDP is faring well, a good performance will be recorded on the stock market and vice versa.

Effects of the Stock Market are Limited

To conclude, it is important to note that the stock market is not the same as the economy. Even in the US economy where the exchange is huge, the economy is big and independent enough to function under its forces. Investors in the stock market might sometimes fail to read the signals of the economy and end up overinvesting, leading to a crash.

How To Choose Forex Trader

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The forex market is very competitive, but more so in recent years than ever. The competitiveness in this field can give an ordinary person a headache from the selection of all the brokers available.

The task of choosing the best forex broker to trade can put an ordinary person into disarray, especially if the person willing to trade knows nothing about the market or how things are done.

So because of that, we are going to talk about how to choose the best forex broker.

1. Security

It would seem that security is an important characteristic in any field of expertise. Luckily for you, there are regulatory agencies that can vouch for the trustworthiness of your forex broker. As a person who is willing to spend money on the forex market, you can’t simply hand over thousands of dollars to a person who simply claims he’s legit. This is why each country has its own corresponded regulatory bodies that monitor forex brokers.

Img source: admiralmarkets.com

We are going to mention some of them:

Before you think about giving your hard earned money to a broker, make sure he is a member of your countries regulatory bodies.

2. Transaction Costs

Transaction costs are always present no matter in which currency you are trading. According to data at Fx-List, every time you conduct a trade, you will have to pay for eighter the spread, or a commission. So a great rule of thumb in this industry is to find the brokers with the cheapest and most affordable rates available to you.

3. Deposit and Withdrawal

Any good and professional broker will allow you an easy deposit and even easier withdrawals. Since a broker holds your funds to facilitate trading, there is no real reason as to why your broker would hold your money and make it hard for you to withdraw your earnings. Your broker should make it his job to make the withdrawal process go as smoothly as possible, with minimum waiting time.

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4. Easy Trading Platforms

Since trading in online forex happens on the broker’s trading platform, the platform in question should be more than user-friendly and stable at best. Forex trading can be quite confusing for people, so the platform must be easy to navigate and understand. There are many trading platforms where many brokers operate. Choosing the best one can be quite tricky, but the better ones have features such as news feeds, easy to use technical and charting tools, information needed for trading properly and more.

5. Execution

A good and reliable forex broker will give you the best possible price of your order. This is a mandatory task that all reliable brokers should do. Furthermore, a good internet connection is needed so that real-time trading can occur. In the case of normal market conditions, your forex brokers should fill you in on the exact market prices you see when you see at the buy or sell buttons.

Bitcoin and the Stock Market: A Simple Investing Strategy

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“Should I buy bitcoin?”

This is the question everyone is asking. Is it a good price? Will the bitcoin price go up in the future? If so, by how much?

No one can predict the answers to these questions, because blockchain-based investments like bitcoin are a new asset class. We simply don’t know the rules.

Source:bitcoincryptocurrency.org

But we do know the rules for investing. They were laid out in 1949 by the Columbia economics professor Benjamin Graham in his classic book The Intelligent Investor. Graham’s strategy is called “value investing,” and it built the fortunes of great investors like Warren Buffett and Sir John Templeton.

Though there are many types of value investors, what they have in common is investing in great companies at a discounted price, companies whose stock price is a great “value.” While many investors look to “buy low and sell high,” value investors use disciplined analysis to find the “lows” and “highs.” This involves betting against the crowd.

The classic value investor also keeps a portfolio of both stocks and bonds to hedge against risk. Since bond prices generally go up when stocks go down, and vice versa, holding a mix of both — and periodically rebalancing that mix — provides safety against wild market swings in either direction.

But which stocks? Which bonds? In the modern update to The Intelligent Investor, the Wall Street Journal financial columnist Jason Zweig suggests holding the majority of stocks in a total stock market index fund, to diversify across the entire stock market. For bonds, he suggests a total bond index fund.

Source:investors.com

He does allow, though, that a portion of one’s stock holdings can be used for “mad money,” i.e., picking individual stocks, or precious metals, or even alternative investments. Thus, The Intelligent Investor portfolio today might fall somewhere between these two bounds:

It is in the slice of the pie called “alternative investments” where we can enjoy a taste of bitcoin. Bitcoin is the alternative investment that has seen magnificent returns over the past several years when most financial advisors did not even know what it was.

The approach here is to consider bitcoin (and cryptocurrency) as a slice of the investment pie. Of course, investors should not put more into bitcoin than they are willing to lose completely — and if they do, they see it as “tuition paid.” On the other hand, most can afford to lose a small slice of the pie. Visiting the-bitcoin-profit.com. you can learn how to earn money on bitcoin.

Including a bit of bitcoin within an investment portfolio allows the investor to learn about this new asset class, and potentially enjoy enormous gains that bitcoin has seen since starting at just a few pennies in 2010 and growing to over $5,000 today.

Source:smartasset.com

Another advantage to this investment strategy is that bitcoin is not correlated with other investible assets like stocks, bonds, precious metals, and the like. In other words, while bitcoin does experience wild price fluctuations, they are largely independent of other markets, making it a diversification tool.

The biggest drawback is that bitcoin cannot be purchased through traditional online brokerages; you can’t buy bitcoin at E*Trade yet. The investor needs to purchase bitcoin through online blockchain exchanges like Coinbase or bitcoin lending platforms like xCoins.io. The intelligent investor, then, might hold in his or her portfolio:

  • 45% total stock market index fund (like Vanguard Total Stock Market Index, VTSMX)
  • 45% total bond market index fund (like Vanguard Total Bond Market Index, VBMFX)
  • 10% bitcoin
  • One who puts his money in stocks only;
  • One who puts her money in stocks, bonds, and 2% bitcoin (the “conservative” portfolio above);
  • One who puts his money in stocks, bonds, and 10% bitcoin (the “aggressive portfolio above).

Here is a chart showing their three-year returns from September 1, 2015, through September 1, 2018.

The “aggressive” portfolio nearly tripled the value of the stock-only portfolio. Even the “conservative” portfolio outshines the stock market over the past three years. It also hedges risk by holding half stocks and half bonds.

Beyond Bitcoin: Diversifying Blockchain Holdings

Source:techcrunch.com

The easy way to invest in cryptocurrency, as we’ve shown above, is to simply buy and hold bitcoin. However, the intelligent investor may want to further diversify his or her alternative investments into other cryptocurrencies.

Let’s take the 10% “alternatives” of the Aggressive Portfolio and now further diversify it into the top three cryptocurrencies: Bitcoin (5%), Ethereum (2.5%), and Ripple (2.5%). The new allocation looks like this:

After just three years, the portfolio has multiplied an astonishing 9x. That $10,000 has grown to over $90,000—while still being protected against risk!

This assumes a one-time investment in 2015, then patiently allowing the gains to accumulate. This demands that investors wait out the huge roller coaster swings of the crypto market, avoiding the temptation to buy at every new high and sell at every new low. It requires patience and confidence.

To hedge against this psychological risk, there is another approach that is proven to deliver even bigger returns: investing the same amount every month, or dollar-cost averaging.

Dollar-Cost Averaging: The Easiest Way to Invest

Source:nohoartsdistrict.com

Let’s use a simple stock market example (no bitcoin). Instead of a one-time investment of $10,000, imagine the investor splits that $10,000 over 36 months, investing a fixed amount of $833 per month in the S&P 500. This is invested like clockwork, regardless of what the market is doing; it’s on autopilot.

After three years, that $10,000 one-time payment has grown to a little less than $15,000—but nearly $30,000 if split into monthly installments.

This technique is known as “dollar-cost averaging,” and it is the best approach for most investors for a few reasons:

  • You put the same amount in each month, sometimes buying more (if prices are low) and sometimes buying less (if prices are high). In this way, you end up buying the “average.”
  • This avoids you making a one-time investment when the market is high (and you never know if the market is high until later). You don’t have to worry about “timing the market.”
  • It also easier psychologically. When prices are low, you have the satisfaction of buying more—and when prices are high, you have the satisfaction of prices being high. It’s a win/win.

Combining the Dollar-Cost Averaging strategy with the Aggressive Portfolio above, then, you might take $500 per month and invest it like so:

  • 65% ($325) into a total stock market fund (like Vanguard VTSMX);
  • 25% ($125) into a total bond market fund (like Vanguard VBMFX);
  • 10% ($50) into bitcoin (or a basket of cryptocurrencies).

The intelligent investor would have these investments set on autopilot, transferring to an investment account and crypto wallet at the same time each month (say, on the 1st or 15th) via automatic withdrawal, if possible.

Today’s “intelligent investor” looks similar to the intelligent investor of the past. He or she is still focused on long-term reward while hedging against risk.

But isn’t it a bigger risk to sit out the crypto investing revolution entirely? This approach allows investors to balance risks with the rewards of bitcoin.

 

 

 

What Experts Are Saying About the 2019 Stock Market

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The stock market is performing well under President Donald Trump, primarily thanks to the massive tax breaks that were given to corporations. But as we started seeing at the end of 2018, these tax cuts were offset by tariffs for a lot of companies.

Statistically, stocks will fall and rise 10% the next year on average.

Swings in the stock market are not the only indicator that needs to be examined when predicting how the market will perform. Stock markets rise and fall year after year, and a dip at the end of 2018 may be more of a correction than a major concern for investors.

Instead, a few considerations for the coming year are:

GDP is Expected to Slow

Img source: gannett.com

GDP performed well in 2018, hitting inflation lows and a near 50-year unemployment rate. Analysts expect the tax cut benefits for businesses to fade this year, and mortgage rates are rising, which will impact the housing industry.

China’s tariffs remain a concern, and a lack of workers may start to impact businesses that can’t find ample employees to fill their ranks.

All of this points to timid GDP growth, and this may keep stock market gains subdued.

Sky-high Earnings Growth to Slow

US stocks have enjoyed rapid growth for years, but as we’re seeing with Amazon, growth is starting to slow somewhat. This doesn’t mean that the growth will stall, but when a company has been able to achieve growth of 30% or more in revenue quarter-over-quarter.

But the company is under increased competition and has such a high market share that these growth figures may be hard to achieve.

Revenue growth is now slowing to the 20% mark, and while not bad by any means, the days are giant growth stocks are starting to fade away. Walmart and others are slowly taking some of Amazon’s market share, but for large-scale companies, especially in the tech field, we’re seeing revenue growth levels that are lower than we’ve experienced in recent years.

This slower growth will lead to higher stock fluctuations, with steeper losses when quarterly releases are made.

Cheap Capital May Impact Lenders

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Higher interest rates will cause consumers and businesses to cut back on borrowing. Interest rate hikes will make borrowing more expensive, and this will be just the start of the issues. A tighter labor market will also lead to many employers not being able to retain talent.

Higher wages will dictate the job market, and this is likely to cause job growth to slow this year.

Global Bear Markets are Possible

It’s very possible that the world may see a global bear market, and this is primarily due to economic peaks. There may not be a drastic bear market, and we may even see a bull market in 2019, but a bear market is still a possibility.

Brexit and international markets slowing may lead to higher investment fears.

Central banks will play a major role here, and if rate hikes continue, consumers will be left either unable to afford mortgages and loans, or lenders may find themselves with higher revenues.

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