Tag Archives: Term

General Investing

Calculating Profit of Term Deposit

Investing money in term deposit is a safe and guaranteed way to get higher interest for your excess money. Time deposit or certificate of deposit is a bank product nearly similar to savings account but money on time deposit is on lock-in period before you can get it.

One disadvantage of putting money in time deposit is that you will be burdened a penalty if you get your money before the finish date. So you should not put all your savings in time deposit, you should put aside a particular amount of cash in your bank account.

The valuable thing in putting money in time deposit is knowing how to compute the interest you can get in inveting a particular amount of money in a term deposit. Once you know the interest you will receive, you can have a clue how much money you will invest in time deposit.

Term deposit is one of the guaranteed investments you can do for your money. In the Philippines, term deposit is insured up to P500,000, meaning you will not lose your capital invested in term deposit.

To calculate the total profit in time deposit, you may use the equation underneath:

Net Interest = [(principal x rate x days) / 365]*0.8

0.8 comes from 1 minus 20% withholding tax

For example: P2,630 = [(P1 million x 0.04 x 30) / 365 ]* 0.8.

From the formula above, you may observe that to increase your net gain in investing in time deposit, you must increase the days of time deposit and the principal money you will invest. The interest rate of time deposit rest on the withholding period. Obviously, the better the period, the higher the interest rate for term deposit will be.

These days you can choose where to invest your money depending on the risk level and the percentage of profit. Several investments are very risky, others are normal or without risk at all. Investing in term deposit is one of the investments with no risk at all since it is insured by the government.

Forex Trading Articles

Forex Trading For Long Term Gains

Success while trading depends majorly on the understanding the trader has of the working and driving of the trading market and not on the method of technical analysis that is employed, as is commonly believed.

The idea behind forex trading is the appreciation in the value of one currency with respect to another, this type of trading lends itself in an apt way to technical analysis. Producers and consumers, as they engage in the exchange of goods and services influence the changing global economy, which in turn is reflected by the foreign exchange market.

Taking decisions based on price action before buying and selling requires that the technical trader have knowledge about the basic fundamentals of trading. For the trader who wants to go beyond buy on green, sell on red, here is a look at the fundamental factors that affect the value of currencies and drive the forex market.

The most important factor is growth data. The total value of the goods and services that the producers of a country produce is a part of the gross domestic product or GDP of that country and this gives a lot of information about the country’s economic growth. Keeping inflation checked while promoting growth is the main challenge in front of the Federal Reserve Bank, the European Central Bank and the Bank of England, among other central banks.

Moving on, it is important to understand inflation. The effect of inflation on production and consumption tells a lot about inflation itself. Foreign Exchange investors find it useful to monitor the producer price index or PPI, which shows the change in selling prices given to domestic traders over time, the consumer price index or the CPI which is a collection of prices products most commonly consumed and the personal consumption expenditures, which give a clear picture of the changes in prices of durables and non-durables.

Thirdly, the monetary policy should be taken up. The Central Banks have to mainly manage the monetary policies. The minutes from meetings, press bulletins and the official statements released by the central bank are closely monitored by expert forex dealers. Most of these official statements happen to be highly important because they regularly incorporate the bank’s official inflation targets and also explanations of how the banks propose to hit all those objectives, typically with raising or lowering interest rates, which usually have always been the motive force of currency forex market variances.

The next factor is Trading. Trade flows, usually expressed as surpluses and deficits, measure whether there is foreign demand for a country’s currency, treasuries and goods.

Emotions and industry psychology are genuine aspects. Any data that comes out suggesting that the economy is expanding or something good is happening is discounted and disregarded. The novice trader will feel abandoned after predicting a favorable increase in the value of the doctor which ultimately ends up declining in the forex market. Emulate the central bank’s predictions and the market commentary over time and go directly to the sources of the information and after that you are able to clearly understand just what exactly is changing the economy you will not make such mistakes.

Forex Trading Articles

For Long Term Success- The Best Forex Trading Strategies

Long term Forex trading strategy is preferred by most of the trader as it provides extra freedom to trade. In long term trading you don’t to spend more time in trading and you can enjoy most of the time. This strategy essentially has long term time frames, it is less volatile, it has stronger resistance line, and analysis of accurate price action.

The long term forex strategy is not the only solution. There are several other strategies that should be incorporated to give you the whole benefit of becoming a gainful forex trader.

If you use various time frames in your strategy then it will be more profitable for you. Most of the successful trader uses this strategy because it gives the most accurate price action and it increases the chance of having a correct signal. If you are dealing with the major trends then it is advisable to you use higher time frames.

It is really easier for you to make your long term strategies in forex trading if you want to become more profitable by making use of numerous time-frames. If you are done with that so now you can move toward with most accurate signal previous to executing a trade. By using several time-frames, you can create your own trading strategy even more professional. One such good strategy is to make use of 2-3 time frames in your every trading. It is also the best idea to illustrate the resistance lines and you can do some price action study on a particular currency that you are trading.

This is done so that you can come up with more accurate signal before executing a trade. For example, if you are trading daily candlesticks, it is wise to look at the 4 hour and 1 hour charts. Using multiple time-frames, can make your trading strategy even more efficient. By looking back at the other charts, it gives a wider picture of where the currency maybe heading and what resistance lines need to be broken in order to give you the signal to enter the trade.

A good forex strategy is to make use of two to three time-frames for every trade you are planning to take. Direction of the trend is very important and it has been proven to give you 30%+ correct signal. It is also a good idea to draw the resistance lines and do some price action analysis on the particular currency you are trading.

General Investing

Where to Invest Your Short term Cash

Where to Invest Your Short term Cash

By Larry Lane for Investorzoo.com

You have 6 months saved for your emergency fund earning a robust 1% interest. You think there’s got to be a better way to earn more interest. You turn to Cd rates, but the prospects of tying your emergency money up for 2 years for an extra 1% return aren’t an option. Desperate times call for desperate measures. It’s time to go shopping (for better returns on your money that is!)

Credit unions and community banks

Contrary to popular belief, in most cases you don’t have to belong to a union to take advantage of their specials and rates. In some instances, you can earn up to 5.5% on balances on amounts up to $35,000 by banking with small credit unions and community banks. Credit unions and small banks are in stiff competition with the national chains for deposits. On average, they currently offer higher yields than large banks on deposits and lower rates on loans and credit cards. You may also received reduced fees on bounced checks and overdraft protection.

Finding a high yielding savings or checking account

High yielding checking and savings accounts are available at some banks. Yes, there can be restrictions and residency eligibility. Rates can vary, and are subject to change as well. In most cases, you will have to make direct deposits, use their debit card 10 to 15 times per month, receive E-statements as well as use their online bill pay system. Failure to meet these minimums and your rate may drop to 0. You will have to do some research online to find a deal which is appropriate for your situation.

When I first joined Malvern Federal malvernfederal.com, they had a fantastic rate of 5.5%. However, the rate dropped to a still respectable 1.98% 3 months later. Here are their restrictions:

1) Use of their debit card a minimum of 10 times per month. To make sure I reach this requirement, I make sure I purchase gas in $5.00 increments during the month. Add in some purchases at the grocery store and getting to 10 transactions usually isn’t a problem by the middle of the month.

2) Direct deposit/Direct bill pay-Simply have your paycheck directly deposited or use Malvern Federal’s direct bill pay system.

Create a CD Ladder

For sums above $50,000, CDS and money markets accounts still offer the best combination of safety and yield. A good way to invest in a CD is to create a ladder of CDs with maturities that range from 1 and go up to up five years. This will enable you to take advantage of higher rates when you reinvest your shorter-maturity CDs, while still earning higher yields on longer-term CDs.

A little more Risk, a little More Reward

No uninsured financial instrument is bulletproof. Some short-term bond funds lost more than 20% last year. For the most part, the types of funds are designed to yield a few percentage points more than certificates of deposit and money-market funds. However, they do tend to experience great swings in net asset value (or NAV, a fund’s share price). As credit conditions improve, these funds have done very well this year.

Ginnie Mae funds

Technically, you can’t call Ginnie Mae funds cash substitutes, but they are very close to it. Ginnie Mae funds own packages of home mortgages. These funds kept their value through the financial crisis. That shouldn’t come as a surprise because Ginnie Maes are backed by the full faith and credit of the U.S. Government, making them much sounder than other mortgage-related investments. Check out the Vanguard GNMA fund. This fund did very well last year in 2008, returning a little more than 7%.

If you’re not out to find the next Google, or gamble to reach out for double digit returns, check out some of the above options. They will keep your emergency fund safer than the roller coaster stock market.

The article above is information of a general nature and the information provided may not apply to your personal situation. Please consult your financial planner or licensed professional for investment advice.

Market Analysis

Winning Investment Strategy For The Long Term

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It is important to understand that good investment strategy is ownership of a stock which represents ownership in a business, not just a ticker symbol and a price. It is the same as owning a stake in any business and you must act like an owner.

Your stock buying and selling decisions should be based on the fundamentals of the company and not how you think the market will perform in the future. If you focus on the companies strengths and weaknesses, you can remove all other unimportant information and simplify the investing process.

One of the keys to making money and good investments is in understanding the businesses and industries in which you invest. You should be sticking with your investments long term. Many studies have shown that if you had been out of the market for just a few of the highest returning days of the year, your overall return would be significantly smaller. This shows why it is important to stay invested for the long term and not attempt to time the market.

If you glance down the Forbes list of richest people, you will find that not one of them has made their very large fortunes from frequent trading and trying to time the market. The best investors use the stock market to buy attractively priced companies and hold them while the business expands and prospers.

Any investor who buys stock in a good company based on solid research should do nothing more than monitor the company and develop a dollar cost averaging plan. This will over time allow his investment to grow. In time, his intelligent investing decisions will pay off well as the value of his shares appreciate.

One of the costliest mistakes made by investors is based on fear. This is also one of the easiest mistakes to make. One of the he worst things an investor can do is research a company, make a sound decision based on that research, and when the market hits a bad downturn, sell in fear of losing money. This is one of the reasons that panic and fear play a roll in the market.

In a down market, if the fundamentals of the company remain the same, then a stock will have become more attractively priced if it has gone down. Logic dictates that you should be buying more of the stock rather than selling. It is this principle and inner discipline that is needed to be able to become a successful stock market investor.