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Mutual funds are a traditional part of most investors’ portfolios, but exchange traded funds, or ETFs, have gained in popularity over the last ten years as well. Recent years, more investors, brokers and financial advisors have been using ETFs, and they have been included in many pension plans of the company. The safety and appearance of traditional mutual funds, and permanent reputation, however, still bear a great attraction for many investor. This article can help you determine what type of fund is best for you and your investment options. Like traditional mutual funds, ETFs contains many stocks, or stocks and bonds. The difference between them and mutual funds lies in how investors can buy and sell shares, since when investors wish to redeem their ETF shares of funds they are required to negotiate with investors from other markets, This requires the use of a broker who can help you choose the option that is a better fit. ETFs are both prices and exchange-traded or, on the American Stock Exchange, the New York Stock Exchange or the NASDAQ, throughout the business day in the same way as shares. Traditional price of mutual funds are set once a day, and investors must place their orders for some time to get the price of the day. With ETFs, unlike mutual funds, you can use these funds in the same manner as a share of stock, including market and limit orders, buying on margin, and a short circuit. Since ETFs will be traded with other market participants, ETFs generally have two awards from the net, or NAV, is calculated on a daily basis based on the ending value of its portfolio and accrued liabilities, and its price action, which is determined by the supply of ETF and profile of the market demand. Although ETFs are not immune from taxes, the good news is that they are structured to allow investors to protect themselves against capital gains more than they would with traditional funds. Since ETFs are index funds, they tend to trade at a price lower than most actively managed funds and in most cases, should generate fewer capital gains. And since most investors often buy and sell shares of ETFs with other investors, the ETF manager does not have to worry about the sale of investments, which can generate capital gains to to meet redemptions of investors.

As an investor after the estate, it is imperative that you start with a solid strategy and understand the basics. In this article, it is my intention to offer some ideas in real estate investing for beginners. A few basic rules. . . Let us first that unlike stocks or bonds investment, property investment is not considered a “liquid” investments. This means you can not sell a property faster than you can sell shares or bonds. Stocks and bonds can generally be exchanged very quickly through a brokerage firm stocks. Real estate, however, requires skill, patience, a marketable product and technology to liquidate. Even when using a professional, it may take some time to sell investment properties. The realization of this beginning of your investment strategy will save you money and pain over the life of your investment. Knowing you can not simply “flip” (the process by which you can buy and sell properties very quickly) all real estate investment opportunities that accompanies help you make informed investment decisions. Commercial Real Estate Investing Because of the complexity of commercial real estate investment and calculations used in strategies, this article will focus primarily on residential strategies real estate investment. At times, we can discuss issues relating to business investments, but only when needed for clarification. Investment Financing Before you start looking for a real estate investment, it is advisable to research how much you can afford. One way to do this is to find and work with a trained real estate professional who knows the region in which you are interested in purchasing. Agents often work with and can offer a mortgage company or professional. In addition, you can work directly with a lender or mortgage professional. Working with a real estate agent offers several advantages, not the least of which is, they are generally well informed about new and growing markets in the area you are interested in investing. Investment Strategy Long term or short-term investment: Let’s describe long-term investment as the purchase of real property that are maintained for over 5 years. Short-term we will consider purchases remained below 5 years. The length of one of these strategies canvary considerably depending on market conditions and income, expense ratios / investment and other factors. In addition to your investment strategy, long or short term investments, an examination is desirable what you expect a return on investment (ROI) perspective. Return on investment can be described as how much money you expect to do on your property purchase and how soon. Summary Smart investment is the balance between risk and return. Real estate investment through education, and for new investors, it is advisable to work with an experienced real estate professional. Do not forget lots and lots of homework and research. If you take your time, working with a real estate professional knowledegable, there is no reason why you would not be able to realize other financial benefits earned in real estate investment. End of Part 1 © Copyright 2008 Jennifer MacKay. All rights reserved.

It is very important not to package together the placing of stops with money management, as the two represent different strands of Stock trading. Simply put, stops are there to protect profits and limit the potential downside at any time once a trade has been opened, and are part of an exit strategy for trades that are already open. Money management covers position sizing or amounts to be risked within each trade of a portfolio. Within this potentially complex subject, there are many different types of stops, and it should be added that stops are never guaranteed unless that facility is offered by the broker for an additional charge. Nevertheless, their use is an essential part of any trading strategy. For the examples below share prices are used, but stop losses should also be used when trading CFDs in commodities, forex or indices. The uses and abuses of stops: Much has been written about the placing of stops and how to avoid them being triggered without too much risk. This of course is the $64m question for most CFD traders and very often causes more consternation than any other aspect of the trading process. The basic idea behind where to place a stop is by reference to the overall trend or trading range within which the share is moving. As to the actual level of the stop, it depends on several factors including the trader’s overall money management rules, the amount of leverage, the time frame, and crucially the underlying volatility of the share chosen. The stop should aim to be placed at a level which if triggered would confirm the trade was incorrect. There is no point in trading a highly leveraged CFD account with routine 5% stops as eight losses in a row, which statistically can be expected every few hundred trades, would lead to a minimum 40% drawdown on the account. Having said that, there is equally no point in attempting to reduce the risk too far by setting 1. 5% or 2% stops in highly volatile stocks or takeover situations as each trade needs room to breathe, and stops this tight are likely to be triggered within the normal daily ebb and flow of price movements. A good rule of thumb is that if you cannot see at least double the potential profit in a trade compared to where you expect to place your stop loss, that trade should be passed over. Indeed some CFD traders look for three times profits achieved against losses as a starting ratio. Consequently an approach like this can be very successful by winning just three or four times out of ten, and is the hallmark of many of the world’s leading traders. Many losing stock traders look for an entry point or strategy that wins six or seven times out of ten, but this is very hard to achieve consistently. Although the feeling of winning regularly is certainly warm, the win/loss ratio here very often tends to be very poor as too many winners are taken quickly, so the correct use of initial and running stops placement is crucial. Types of stops: The basic maximum loss stop The maximum loss stop is the starting point for most traders and is triggered when the share price hits a level below or above the opening price of the trade, depending on whether it is a long or short position. It can be measured in percentage points or actual money terms, but for these examples percentages are used. So if a CFD trader Buys Shares in British Telecom at 330p with a 2% stop loss, then the allowed loss is 6. 6p and the position is closed if the bid or selling price falls to 323. 4p or lower. Note that no mention is made of how many shares are purchased or how much is being risked, as this is part of the client’s overall money management. If the shares gap down below the stop either intra-day or at the open of trading the next day, the closing trade is triggered at the first price available in the market for that size, which is why stops are not guaranteed.