There is strong evidence that 

you will not become rich by 

listening to the advice of others. 

As an investor you need raw 

information, not recommendations 

you get from some newsletter

that may actually be getting 

paid to recommend the company. 

You would not buy a car just by 

looking at it...so why you buy a 

company's stock without doing 

significant 

research.

There is no point trying to take 

control of your finances 

if you are going to rely solely 

on a "tip" from a newspaper 

or a broker or an internet chat room. 

It might be true that someone may know 

more about a particular company or stock 

than you, but they could easily be wrong 

- so do your own homework! 

In the Annual Report, the financial statements, the balance sheet, the profit & loss statement and the cash flow statements are very important. They will help you assess whether or not the company is providing value for your money and is worth investing in.

You are going to be buying stocks at a certain price and you will want to make sure that you are not paying an excessive amount or the chances to profit will be slim.

The financial numbers give you a snapshot of the financial structure, strength and growth rate of the company. This type of analysis is often called fundamental analysis, and also includes analysis of the economy and industries related to the company.

Don't rush your investing. Take time to learn about the companies you are putting your hard earned money into.

Yes. We all dream of investing in penny stocks in small companies we have never heard of and making a huge profit. But in at $0.003 and sell at 10 bux?

It's happened however - the chances are it won't happen to you or I. It takes a lot of luck to hit such a profit and more than not, you are going to lose money or not see any gains.

I admit I put some of these in my portfolio. I only use money I can afford to lose and try to pick companies I feel good about. Well - as of yet - that big payday has not happened. Here is what has happened.

I invested in EWRL, an online Hollywood type company. They had once shown $50 a share. So - I bought 500,000 shares at .... ready for this? .......... about $150. Yep. Well, I learned about reverse shares the hard way.

They put out a reverse split after my stock was already down to $50 in worth. The reverse was ridiculous! In other words, instead of a 2 for 1 split where they give you 2 shares for every 1 you own, they give you something like 1 share for every 10,000+ you own. I ended up with 46 shares. Seriously! 500,000 shares down to 46 shares.

I still play with penny stocks but after 3 different reverse splits, I play a little more cautiously. Some are making me money and showing hope, but my dreams of becoming an instant millionaire are no more.

Financial security is important to all of us. Not just in the present but well into the future. The time to start saving for retirement is now.

You need a plan to stabilize your finances. Things change rapidly so I have put up a special Finance Security Blog that you will want to visit often.

Whether you secure your future through investing in stocks, bonds, real estate; it doesn't matter. Just make sure you develop a plan and follow it.

Foreclosures are popping up in the news everywhere. Unfortunately at the moment the real estate market is in somewhat of a nose dive. Many people who purchased their homes in the past few years are suddenly being over-whelmed trying to keep up with the mortgage and are also finding their home may be worth less than they paid for it.

Well, the real estate market has always flourished and you have to believe now will be no different. However, that is not going to be any consolidation to those who face foreclosure on their home right now.

I have a free report you can pick up that will tell you how to stop foreclosure and this might be of immense value to you. Head over to ForeClosure-Digest.com and scroll down to grab your free report.

Now, when you are there, read all the seperate digests I have put up as you can find out more about foreclosures - including how to profit from them.

It's pretty much like the stock market right now. If you know what you are doing, you can pick up some solid stocks that will make you money in the future and you can pick up some homes in the foreclosure market that can become a great investment for your financial portfolio.

I've been asked many times why I don't make recommendations as to which stocks I think might be profitable.

I study the stock market and the companies I feel I would like to invest in but the bottom line is it's all speculative. No one knows for sure what a stock is going to do. There are plenty of newsletters out there touting the next best stock but many of them are being paid to do so.

If I invest in a stock, I have done my homework and am ready to risk money on it. However, I am not willing to make a stock recommendation and you risk money on it, only to see it drop. I'd feel terrible. I feel bad enough when I see my stock drop but if others were putting their hard earned money on the line based on my advice - not going to happen.

The purpose of this hub is to try to bring you a lot of information on investments, whether it be the stock market or real estate or getting the best loans. You take the information and learn from it and, maybe follow it or become interested enough to learn more.

I have a number of websites I recommend you visit - mine and others - that I hope will help you. But it's your money and you need to take the time to decide how to best invest it. I've said it before and will say it again.

However, to even discuss my views on a stock seems inappropriate here. I hope you can understand my views on this.

The Beacon Equity Research newlsetter touted a stock a week or 2 ago. The stock started to climb but then did a nosedive to about 1/3 of what it was when they recommended it. To make matters worse, they came out the same day after the drop and said, in effect "Whoops. There is an overseas person liquidating his stock and we are pulling it from our recommended stock list." Whoa!

OK - the next newsletter awhile after that talks about another stock to buy which promptly doubles, then drops back but still gave a nice return. Now, without mentioning the stock they blew big time, they are sending out newsletters patting themselves on the back and saying - "SEE!". Unbelieveable. Telling you how good a move you made if you got in on it.

My point is this. Yes - Anyone of these newslwtters can pitch a tock to you and, in most cases, the fine print lets you know they are receiving compensation. But they are going to let you know about any good stocks they recommended to their readers and totally ignore the ones that tanked.

Do your homework. Don't believe everything you read. Don't invest because a newsletter tells you that you should. Sure - you might get lucky and buy in on the one that goes up. You also might be unlucky and buy in on the ones that plunge!

A good rule of thumb is to figure that your entire house payment, which includes the principal, interest, taxes, and insurance, should run between 28% to 30% of your actual net income. That way, you should have plenty of money left to spend on your other needs-including home maintenance costs and utility bills.

Beware, the ancillary costs associated with home ownership will probably run you double your monthly mortgage payment. This is a cost that renters often fail to consider when they make the decision to buy a home. However, before you make an offer, you should carefully consider whether you can afford all the costs that a home of your own entails.

Another way to calculate the costs is to figure that you should not buy a house greater than 2 ½ times your current income. Do not, under any circumstances, borrow money based upon income that you hope to make. Reality may not meet your expectation, and you could suffer painful financial consequences as a result.

In fact, buying a house when you're not ready is considered the top financial stressor in many marriages.

When comparing various home equity loans, make sure you take into account the following factors:

Monthly payment costs. Determine whether you can actually afford the payment that’s being proposed. 

The annual percentage rate, also known as the APR. This figure represents the cost of credit in terms of an annual rate. By comparing APRs, you can quickly determine which company is offering the better deal.

Is the interest rate variable, or will it remain fixed? If it will change, how much will it change, and will you face more than one change?

Other Key Considerations:

 What is the length of the repayment period? Is it too short, too long, or just right?

Make sure you determine whether you’re being offered a loan or a line of credit, since there is a difference between the two. A loan represents a fixed amount of money for a certain time period, while a line of credit is money you can access if you require it. 

Beware of balloon payment loans. With a balloon payment, you’ll have to accept a large payment at the end of the term. In exchange, you’ll make smaller payments leading up to the balloon payment. With balloon payment loans, you’re betting that your financial future will be better than your past—significantly better. It’s a risk many home owners simply cannot handle. 

Determine what will be required of you in terms of points and fees. Keep in mind that a single point equals one percent of the loan amount. Usually, when your points are higher, your interest rate is lower. Usually, companies charge somewhere between one and three percent of the loan in points and fees.

Overall, there are three different kinds of investments. These include stocks, bonds, and cash. Sounds simple, right? Well, unfortunately, it gets very complicated from there. You see, each type of investment has numerous types of investments that fall under it.   

There is quite a bit to learn about each different investment type. The stock market can be a big scary place for those who know little or nothing about investing. Fortunately, the amount of information that you need to learn has a direct relation to the type of investor that you are.

There are also three types of investors: conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance: high risk and low risk.   

Conservative investors often invest in cash. This means that they put their money in interest bearing savings accounts, money market accounts, mutual funds, US Treasury bills, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments.  

Moderate investors often invest in cash and bonds, and may dabble in the stock market. Moderate investing may be low or moderate risks. Moderate investors often also invest in real estate, providing that it is low risk real estate.  

Aggressive investors commonly do most of their investing in the stock market, which is higher risk. They also tend to invest in business ventures as well as higher risk real estate. For instance, if an aggressive investor puts his or her money into an older apartment building, then invests more money renovating the property, they are running a risk. They expect to be able to rent the apartments out for more money than the apartments are currently worth – or to sell the entire property for a profit on their initial investments. In some cases, this works out just fine, and in other cases, it doesn’t. It’s a risk.  

Before you start investing, it is very important that you learn about the different types of investments, and what those investments can do for you. Understand the risks involved, and pay attention to past trends as well. History does indeed repeat itself, and investors know this first hand!  

No matter how much you investigate a company, you can still get burned, particularly with penny stocks.

Everyone wants to catch the next Walmart or the next penny stock that will make you rich. Beware.

I thoroughly investigated Material Technologies - current symbol MTCH. They have the only technique to find small stresses in bridges. I bought 300 shares at 45 cents a share. This company was featured on a t.v. stock newsprogram.

It dropped - big time. I contacted the ir department and they said big things were in the makes and they appreciate me being a share holder. Yeah - right!

These people, out of the blue, did the old reverse split at 1000 to 1. Which meant - yes - I had 0 shares left!

Now what if you had bought 1000 shares at their high. I'm not sure what that was but I'm thinking it was a buck. That is $1000. OK - You now have 1 share which currently is worth $3.75. Will that ever pay you back? NO!

The problem is these companies don't care about the small shareholder. To me and you, owning 300 shares or 1000 shares isn't small. To them? You are a speck of dirt.

So we investors buy into these companies and help them get started or stay afloat. Then they drop you like a sack of potatoes. Real nice.

This is only an example but I think one of the ruinations of stock investing is these reverse splits. They are not fair. They simply are not. I could live with my stock being low and hope someday it recovered. But reverse splits make me very, very wary of penny stocks.

I would be interested in hearing your thoughts in the comment section.

Identity theft is a constant threat for almost everyone and if you're not careful, your investments can be wiped out. If someone gains your personal information, they can use it to do all sorts of malicious things that will completely destroy your credit and your finances.

Victims of identity theft frequently end up spending months upon months settling all of the problems that arise from having their identity stolen. Sometimes you can even end up owing a great deal of money. 

First, you need to take preemptive measure to prevent your information from getting in the hands of thieves. Never throw away sensitive documents that contain things like social security numbers, bank account numbers, or anything else related to your finances. Run them through the shredder, or dispose of them in some other way that renders them unreadable.

Be careful when doing anything on the computer. Phishing is when a hacker simulates a web site that you trust, for the purpose of getting you to enter your personal data. You could also fall victim to a keylogger, which transmits everything you enter to the hacker.You need to equip your computer with the latest anti-virus software in order to protect yourself from these threats. Investigate identity theft insurance in the event that your data is stolen.

Identity theft insurance costs around $20-30 per month. If you do have your identity stolen, it will cover many of the costs involved in recovering, such as phone charges, mailing charges, attorney costs, and fees incurred from the companies that you deal with during your attempt to recover your identity.

The Identity Theft Resource Center is a non-profit organization with a web site located at http://www.idtheftcenter.org/. You will find countless tips on how to deal with all steps of identity theft: how to prevent it from happening, how to initiate the recovery process, and how to safeguard yourself against future attacks on your identity.

This is something that you at least need to be educated on. We don't want to become paranoid but we all need to protect our identity and, in return, our investments.

Investing in bonds is very safe, and the returns are usually very good.

There are four basic types of bonds available and they are sold through the Government, through corporations, state and local governments, and foreign governments. The greatest thing about bonds is that you will get your initial investment back. This makes bonds the perfect investment vehicle for those who are new to investing, or for those who have a low risk tolerance.

The United States Government sells Treasury Bonds through the Treasury Department.

You can purchase Treasury Bonds with maturity dates ranging from three months to thirty years. Treasury bonds include Treasury Notes (T-Notes), Treasury Bills (T-Bills), and Treasury Bonds. All Treasury bonds are backed by the United States Government, and tax is only charged on the interest that the bonds earn.

Corporate bonds are sold through public securities markets. A corporate bond is essentially a company selling its debt. Corporate bonds usually have high interest rates, but they are a bit risky. If the company goes belly-up, the bond is worthless.

State and local Governments also sell bonds. Unlike bonds issued by the federal government, these bonds usually have higher interest rates. This is because State and Local Governments can indeed go bankrupt – unlike the federal government.

State and Local Government bonds are free from income taxes – even on the interest. State and local taxes may also be waived. Tax-free Municipal Bonds are common State and Local Government Bonds.

Purchasing foreign bonds is actually very difficult, and is often done as part of a mutual fund. It is often very risky to invest in foreign countries. The safest type of bond to buy is one that is issued by the US Government. The interest may be a bit lower, but again, there is little or no risk involved. For best results, when a bond reaches maturity, reinvest it into another bond.

OK - I just started entering this field and am using a demo account. That is my first recommendation - use a demo account until you know exactly what you are doing.

Following a trading system, I made my first trade, then could not figure out how to put in a stop loss or a profit point so ended up with 3 or 4 buys and sells going on at one time. :-) What a mess.

So I went back and tried to figure things out and the next day went in and, after finding out how, closed all my open positions. The funny thing was I added $1400 to my $50,000 demo account.

So I wne tback in and now it's not a problem except that, just this morning, a trade I made was going good and I decided to try a trade in the opposite direction so that I would make a profit no matter what, but could not lose anything. Turns out it closed my position. Still made $140 but not what I wanted.

Hence - practice, practice, practice. Do it with pretend money before you try the real thing.

But I'm finding that, although Forex trading can be a quick way to lose all your money - money management is important and makes it less likely.

I'd be interested in hearing comments from those in this market. 

The stock market has plunged. It is unreal how much it has dropped in the last couple months. How low can it go?

The problem we are now facting as stock market investors is what to do next. Stocks have dropped too low to sell. For most stocks, a huge loss would be incurred. So generally you figure this is a good time to buy so you can recoup your losses as the market rises.

Maybe not. There are a lot of very unstable stocks out there right now and they may not be even close to reaching bottom. Any thoughts from anyone? Personally I am in a holding pattern at this time.