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Save Big Money with Free Investment Help
In today's wild business climate of corporate downsizing, hostile takeovers, rising and falling interest rates, and a stock market ever on an
inexplicable spiral, you really need the help of an expensive brokerage house to help you make sense of it all, right? Not so fast! Here are
some things you should consider before handing over your money to the hands of strangers.
Most brokerage houses are honest businesses, but many are not above playing fast and loose with your funds. Do a lot of people lose money when they hire a brokerage firm that handles their money? Yes, and a lot more often than you think.
Furthermore, think about this: that piece of paper full of fine print you sign when you give your money into their care basically ties your hands.
Once you sign, they have the power to control your money. If you don't like what they do, you may have to accept the decision of an arbitrator, unless you take your complaint to a federal district court, or insert language into the original contract which protects your rights. Either way, the hassle can be enormous, and costly.
Brokerage firms offer advice on how to invest your money, but sometimes you can run into serious trouble with a stockbroker if you are not paying
attention. Stockbrokers have many ways of getting extra money from you. The most common problem is negligence, whereby the stockbroker fails to
comply with an order. Another problem arises from a situation called "churning." When a stockbroker churns your account, he advises you to make
a transaction which creates commissions for him instead of profits for you. Finally, and in conjunction with churning, a stockbroker can misrepresent
an investment, with his own interests in mind instead of yours.
Despite the big bucks spent by brokerage firms designed to convince you that you need them, the truth is that you don't. All it takes is a bit of homework, and an ability to take advantage of free or cheap information available to you in any library or on any bookshelf.
There is nothing wrong with using a reputable brokerage firm to handle your market transactions, but don't be dazzled by the puported "knowledge" of
your assigned stockbroker. They're not much smarter than you, and they'll charge you a hefty price for their services.
Several ways exist for you to cash in on markets and funds, and a number of free or reasonably-priced information sources are available to help you
along the way.
Since no one wants your money to increase faster than you do, why not take responsibility of your own future and educate yourself on investing?
Small Stockholders Can Profit
Even if you don't own a great deal of stock in a company, you can occasionally make a 10 percent profit from them. Once in a while, a company
offers to buy the stock of its small investors at a 10 percent profit just to save money on having to serve small stockholders. If you are offered
such a deal, study the market, see where the stock is going, and then perhaps take the premium and roll it over into another kind of stock.
The nice thing about this kind of transaction is you can deal directly with the company, instead of paying an extra fee to your stockbroker for
transacting the business.
Become Your Own Securities Analyst
You don't have to be a big-time investor to do the same kind of investigating top security analysts do. A security analyst gleans information from the financial statements of major companies around the world. As a smaller, individual stockholder, there is nothing to keep you from taking advantage of this source of public information.
Some of the important information located on financial statements include:
Deviations and inconsistencies
Inventory figures
Accounts receivable
Accounts payable
Investment Newsletters
No investment newsletter is going to be 100 percent, or even 75 percent accurate on its choices. You need to view a newsletter as a springboard for
your own investment ideas and research. Avoid newsletters full of hype and adjectives like "stupendous" or "once in a lifetime chance." Try to locate
a newsletter that is full of restraint, and explains its choices in a logical manner. It also helps if the newsletter you choose has a consistent
record of picking the good stocks.
Before taking any investment newsletter, decide if you are a long term investor-willing to take a loss at times and in the investment for the long
haul-or short term investor in need of immediate information for today's stock market. There are newsletters available for both kinds of investors.
On the surface, newsletters can seem expensive, with a $45 to a whopping $7,000 per year subscription price, but compared to what you would pay for
a money manager, you can end up saving in the long run. Whether you use a broker or not, remember that the information in these newsletters is
up-to-the-minute in many cases. If you act on it too late, it can cost you.
Here are some of the best investing newsletters:
Astro Geometrics Journal
Astro Investor
Crawford Perspectives
Cash in on Chaos
Market Systems
Be Your Own Broker
Simply write a letter to the Bank or one of its branches, stating the securities to be bought, and the name under which any notes or bonds will
be registered. Enclose a check for the face value of the securities ($10,000 minimum for bills, $5,000 for short-term notes, and $1,000 for bonds). Make sure your letter is postmarked by midnight the day before the next securities auction. The government will send you a receipt along with
a refund for the discount determined at the auction.
Do Your Own Forecasting Through Technical Analysis
The technical analysis of price patterns can show you how big of a move to expect from a particular stock, but it can also get you into trouble if you
become too impatient and buy or sell before the signal for it actually happens. The result can be disastrous for you.
One way to tell when the market is ripe for a breakthrough is to watch the Dow. If you see, interest rates peaking and heading down, a large number of
stocks hitting the new high list, volumes in excess of 60 million shares a day, and strong moves in the transportation and utility averages. This is
the time to put your knowledge to work for you.
Watch Other Indicators Besides the Dow
The Quotron Change
The Over-the-Counter Composite Index
The Dow Jones Transportation Average
The Dow Jones Utilities Average
TRIN (Trading Index)
Ask the Investor Relations Officer
It is the company's right to not answer any of your questions. In fact, the IRS is limited to information like the company's future plans, media
announcements, or figures which have already been made public. But the IRS can discuss pertinent information, such as labor relations and competitors,
which may influence the actions of your stock.
As you can see, you are not limited to information given to you by your stock broker. The more you learn about corporations and the stock market,
the more wise you will be with your money. If possible, take a couple of investment courses at your local college. If not, read all the information
you can find on the subject. It's your money. You are the one who can take care of it like no one else.
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