Stock Investing: Getting Started

By Rob Rens

When starting to invest in online trading there are many different aspects you must look into. I am here to explain different aspects along with a few tips I have learned over the years.

Investing: An investment is defined as an item of value purchased for income or capital appreciation. In reference to stocks, traders who label themselves "investors" usually play stocks from the Big Boards (which we will discuss later) and choose their investments based upon cold hard facts, fundamentals, and the overall quality of the company behind the stock.

Daytrading or Swingtrading: Especially online, people will throw around the terms daytrading, swingtrading, and flipping a stock. In essence, they are all similar and overlapping styles of trading. Daytrading is when you buy an sell a stock within the same day once, twice, or many times (intra-day trading). Swingtrading is usually looking for a movement within the month of purchase. Flipping a stock is a style of trading built by targets set by looking at past performance. Flipping a stock is done by buying any given stock at its bottom support levels and selling at its resistance. All of these methods are short-term trading styles. They are influenced by what is going on right now; not what/where this company is going in the future. These indicators of market movement ATM (at the moment) include Technical Analysis, Press Releases, Stock Momentum (public sentiment) and general trends in different sectors.

Trading on Margin: Many investors are timid when opening a margin account. However, opening a margin account is the only way to avoid the "3-day" rule. When you open a margin account, you no longer have to wait 3 days for you funds to settle after a stock purchase/sale. Most online brokers require a $2,000 balance to open a margin account. If you are able to open one then you have the ability to purchase more stock than a normal cash account would actually allow. With $2000 in cash, you would have the ability to purchase $4,000 in stock. However, use caution, because if your purchase goes into the red, you loss also doubles

Shorting a Stock: Shorting a stock is another perk of opening a margin account. When you short a stock, you are actually selling something that you do not have. Usually this is done with the intention that a stock will decrease in price (for a various number of reasons). When it decreases in price enough to make you a profit, then you purchase that stock back (called covering your short position). Basically it is trading, only backwards. This ability gives you a method of making money by catching stocks in a downward (bearish) movement as opposed to looking for stocks on the rise (bullish stocks).

FYI...You cannot short OTCBB, Pinksheet, or any other stocks under $5.00.

Risk Tolerance: If you were to hire a "big-shot" broker or financial analyst than they would discuss your risk tolerance, and probably do it very extensively. I will address it shortly however, becasue I believe it is an essential question you must answer before you begin trading, however the answer is very simple.

First, figure out how much you can start to trade with. $500 will open you an account to help you learn, but will not offer much return. Others may recommend different amounts, but I believe that $1500 - $2500 is a decent amount to begin with if possible. This way, you can play approximately 3 stocks at once and erase a red play with two green ones.

Second, never invest (especially in pennies) what you cant afford to lose. When you begin, it is a learning experience. Don't think of getting rich quick. The more you know, the safer your money will be. Protecting you initial capital comes first. It is better to not take a loss than to not take a gain. Pennies are not your kid's college fund. Trusts and Mutual Funds handle that type of low risk, slow growth.

Finally, when it comes to risk (sorry for the cliche) Knowledge is Power. The more you know, the safer your money is. Play safe, play smart. Make the You need to know smart trade.

$$$ Practice, Predict, Profit $$$

Opening an Account: The next step is opening an account. By addressing all of the above issues, it will make your decision about a broker much easier. Knowing how often you plan to trade, what your average trade size will be, and various other aspects of your trading style/interests will determine the broker which best suits you. The next post will layout the key points/attributes, pros/cons, and customer service experiences with the most popular, affordable, and reliable online brokers.

Rob Rens is the owner of Penny Stocks, Stock Picks - Stockhideout.com

Article Source: http://EzineArticles.com/?expert=Rob_Rens

Saving for College With a 529 Plan

By David Grimaldi

It's never been more important for the children in your life to receive a college education. Studies show that over a lifetime, the earnings gap between a person who has a high school education and one who has a college degree may exceed $1 million.*

According to the college board, a not-for-profit, education association, for 2004-2005 average costs for one year at a state university totaled $5,132 +10.5%, and $27,516 +5.6% for a private university.** Should you also be thinking of graduate or professional school, the costs will really skyrocket.

A 529 Plan Can Help

Although funding a childs way through college will never be easy, some help is available through 529 College Savings Plans- also called Qualified Tuition Programs. These plans were created under section 529 of the Internal Revenue code to help U.S citizens and permanent residents meet higher education expenses and offer considerable financial benefits, such as:

Tax Advantages

Your plan can grow federal income tax deferred. Withdrawals are also free from federal income taxes when used for qualified educational expenses. There may also be state income tax advantages such as tax-free withdrawals and deductions for contributions for qualified purposes. Be sure to understand these important state tax benefits, because many states only offer tax incentives for 529 Plans investing to residents who enroll in their own or the beneficiaries own State's plan. This means that state tax advantages are generally not available to the persons who enroll in the 529 Plan of a state where neither they nor the beneficiary are residents. If withdrawals are used for non-qualified purposes, it may be subject to taxes and a 10% federal penalty.***

Gift and Estate Tax Benefits

Your plan allows you certain gift tax exclusions and offers special estate planning advantages, without triggering federal gift taxes, to encourage donors to contribute for higher education expenses for a loved one.

Flexibility

You can use your plans funds at any accredited institution of higher education.

Additional Contributors

Parents are not the only one who can contribute to a 529 Plan. Grandparents, other relatives, or even friends can establish accounts and contribute.

Investment choices

You can choose from a variety of investment strategies best suited to your individual circumstances and risk tolerance. You'll also benefit from the professional investment management skills.

Types of Plans

Prepaid tuition plans allow you to purchase tomorrows college tuition at todays prices. This may be an attractive advantage since you are assured your tuition is prepaid, but this type of plan generally requires your child to attend a school in your state or a particular school. Under a 529 Savings Plan you may create an account in your name and choose a beneficiary - your child, a grandchild, or the child of a friend. Your regular contributions to the plan can grow tax deferred until withdrawn and, if spent on qualified education expenses, will be tax free when withdrawn. **** In most cases, this can result in considerable savings. Best of all, the money can be spent at any college or post secondary educational institution.

Nearly 529 Reasons to Save

But the reasons to consider 529 Plans don't stop there. They also feature generous contribution limits, often above $200,000 per beneficiary-which can be used for another member of the family in case the original beneficiary doesn't attend college. Check the program guidelines for eligible family members.

For More Information

Although section 529 Plans make saving for college considerably easier, they may not be appropriate for everyone. There are other ways for saving for higher education like Coverdell Savings Accounts, Uniform Gift/Transfer to Minors Act Accounts, savings bonds, and regular mutual funds. But whatever route you take, be sure to begin early. To learn more how you can better invest for your childs education, you may call (866) 651-8625 0r (212) 883-8533 or send emails to david.grimaldi@morganstanley.com.

*Source: Trends in College Pricing 2004: Published by the College Board.

**Figures shown include tuition, fees, room, board, books, supplies, transportation and other expenses for residential students.

***Some states will impose a state tax penalty on non qualified and this penalty may vary by state but not exceed 10% under current laws.

****Under current federal tax law, the tax-free nature of section 529 Plans will be automatically appealed by the end of 2010. Thereafter, unless congress renews or extends the law, earnings withdrawn from a 529 Plan will be taxable income of the beneficiary if used for qualified educational expenses and taxable income of the contributor if used for non qualified.

This material was written to support the promotion or marketing of the transactions or matters addressed herein. It was not intended or written to be used, and can not be used by any tax payer for the purpose of avoiding penalties that may be imposed on the tax payer under U.S. Federal Tax Laws. Morgan Stanley does not render advise on tax and law accounting matters to its clients. Each tax payer should seek advise based on the taxpayers particular circumstances from an independent tax advisor. This article does not constitute tax or legal advise. Consult your tax or legal advisor before making any tax or legally related investment decisions. This article is published for general informational purposes only and is not an offer or solicitation to sell or buy any securities or commodities. Any particular investment should be analyzed based on its terms and risks as they relate to your individual circumstances and objectives. Investments and services are offered through Morgan Stanley DW Inc., member SIPC.

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How Much Is That Baby In The Window?

By: Thomas Martucci

How Much is That Baby in the Window? When you are looking at your newborn baby through the glass in the hospital nursery, we hope that you had put some thought into how much a baby costs each year. Have you adjusted the family budget to include the additional expenses of a child? The unfortunate fact is that the majority of people have not really thought about the cost or attempted to budget accordingly. The US department of Agriculture reported that the yearly cost of raising a child varies depending on the child’s age and the household income. The report states that the yearly cost through age 17 (not including college education) will range from $6,490 to $7,560 for low-income families, $9,030 to $10,140 for middle-income families and $13,410 to $14, 670 for high-income families. For most of us, having a child will cost anywhere from $500 to $950 per month. This sudden increase in expenses can put a tremendous strain on anyone’s personal finances. You should take the initiative to prepare ahead of time. Even an unplanned pregnancy gives approximately 9 months for a family to prepare before the baby comes. That should be plenty of time to develop a budget and work out any problems related to that budget. It is surprising how many people have no idea of the additional month in and month out costs associated with a child. This is one of the major reasons why both parents in a two-income household will continue to work after the baby is born. If you do not have a workable budget pre-pregnancy, then it is imperative that you take the nine months to do so. Followings is a list of the first couple steps to take: · Audit your expenses · Determine where you can save money · Decide on what you need to cut back on Doing this before the baby is born will allow you the flexibility to determine if you need to go back to work and time to enjoy your new baby without the financial pressure. Prior planning and budgeting will go a long way in giving you “Financial Peace of Mind”.

Article Source: http://www.articles4free.com

Thomas Martucci started developing the BUDGETkeeper SYSTEM in 1999. As a business owner for 20+ yrs, he understood the need for a budget in business. At home however, it was never a necessity until a financial firestorm hit and made home budgeting a task that had to be done, like it or not. Thomas labored for several years to perfect a home budgeting system that worked for anyone. Visit our website at www.budgetkeepersystem.com for more information about the BUDGETkeeper SYSTEM.

5 Ways to Fund Your Child's College Education

By edmondj

A degree level education is probably the most expensive single cost in bringing up children today. Unless parents take action early the chances of their children graduating without substantial debt are minimal - that's if they can afford to go to college at all.

Did you know that the cost of a 4 year degree program is around $20,000 dollars per year.

The cost of a college education is probably the most expensive item in bringing up children today. When you take into account tuition fees, exam fees, living expenses, accommodation, books and computers it's not surprising that the average cost of college education is over $20,000 per year and that's before the social side of college life.

Today we live in a world where only the best educated and most prepared can succeed. The Job market is probably the most crucial and competitive element of our society and having a college education and degree goes a long way towards succeeding in it.

When our children are ready to enter the world of work it will be even more difficult and a college education will be essential to succeed. Here are 5 ways to fund your child's college education.

1. The usual method of parental funding of college education is out of current income, that is out of your weekly or monthly salary.

Whilst this is the most common method of funding college education it is one that only the very rich or highly paid can afford to do with ease. Even if there are 2 salaries most families find it difficult and will require sacrifices, even more so if you have more than 1 child. At best most parents can only afford to contribute part of the costs of college education out of current income. Additional sources of income will be required.

2. Your child can work his or her way through college.

Many students have to work whilst studying but many find the experience of juggling a job, lectures and a social life very difficult. Often the result is that students drop out of college education, fail their exams or don't do as well as they could.

3. Your child may have the opportunity to take out student loans to fund their college education.

Today the vast majority of students are forced to take out student loans to fund all or part of their college education. Usually to subsidize parental contributions, student loans are the most common way of students funding their own college education. Many students however, leave college with substantial debt and even with interest rates at historically low levels today's students can expect to have to pay substantial monthly repayments for many years.

4. Your child may obtain a scholarship or be entitled to grants from either federal or local funds towards the cost of their college education.

There are many sources of student scholarships or grants and with a bit of research most students today can find some grant funding. These sources however cannot be guaranteed for the future. Whilst scholarships and grants do not have to be repaid and as such are preferable to loans they are not guaranteed or predictable and therefore relying on them for our children is a risk.

5. Take out an education savings plan to fund college education.

An education savings plan is a regular saving plan into which you and your children can contribute. The plans are administered by colleges or state authorities and can be taken out for any child including a newborn babies. Because of the effects of long term compound interest the earlier you take out your plan the easier it will be and the lower your contributions will be. Because the funds are built up prior to going to college students do not have to rely on scholarships, grants or loans and they can concentrate on their studies.

There are a number of options to fund your child's college education but the only way funds can be guaranteed is by you taking out an education savings plan. With the education savings plan you decide what you can invest and your child can also contribute to his or her college education. With luck scholarships and grants will still be available as will loans to top up if necessary. If your child does not go to college the fund can be cashed in.

Taking out an education savings plan early will give your child the real opportunity of a college education and the best prospects for a job when they leave college.

About The Author:
John worked for many years in insurance and finance and recently completed a degree in Creative Writing. He now writes on a number of topics including education. For more information on college financing go to Grants and Scholarships or go to In Education for a selection of articles on education for all ages.
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