June 15, 2008
Current Stock Prices
Copyright 2006 Steve Hoven
Did you know that $1000 Invested one time, if it returns 100% a year would be worth over $1,000,000 in 10 years? Here is how it breaks down
Start $1,000
End of Year 1 $2,000
End of Year 2 $4,000
End of Year 3 $8,000
End of Year 4 $16,000
End of Year 5 $32,000
End of Year 6 $64,000
End of Year 7 $128,000
End of Year 8 $256,000
End of Year 9 $512,000
End of Year 10 $1,024,000
That is doubling your money every year.
Of course that scenario doesn’t include taxes etc.. However if you had a 401K you wouldn’t get taxed on it.
Maybe you have seen that before but that shows that the person with a Long term strategy can make a great deal of money from not a big investment. 100% a year isn’t a lot when we are talking about HYIP investments but how many of those are going to last 10 years as well? NONE
Did you know a good percentage of Stocks double each year? I just did some quick research on this with the newspaper. I opened up the Stock Market section for the Nasdaq/AMEX. I decided to check the 52 week high and 52 week low for some stocks. What I was searching for is how many stocks under a certain letter were at least double from its 52 week low. In other words for a stock like “Hansen” (I have NO IDEA WHAT THEY DO OR ANY INFO ON THEM THIS IS JUST AN EXAMPLE) This company (Hansen) had a 52 week HIGH of $44.25 and 52 week Low of $8.51 and was trading above $44. So from the low of $8.51 to the high that is over 5x increase. Point being their are a LOT of stocks that move up 100% in a year, Hansen moved up 400%+!
I did research on a few different letters. (I only looked at letters that had a small # of companies just to show you the research. I didn’t want to do like the letter “S” which would have hundreds of companies)
I did the letters “H”, “J”, “O”, and “XYZ”. In my paper the letter “H” had 33 companies listed for the Nasdaq/Amex of those 33 companies 16 of them had a 52 week hi/low difference of at least 90%. 17 of the companies did not.
The letter “J” had 9 companies that had a 52 week hi/low of 90% or better, and 5 companies that did not. The letter “O” had 27 companies that had a 52 week hi/low of 90% or better and only 15 companies that didn’t. The letters “XYZ” had 17 companies with a 52 week hi/low of better than 90% and 6 that did not.
So of those 6 letters listed above companies under those letters had companies with a 52 week hi/low of 90% or better 69 times and not 43 times.
My point of this is MANY stocks each year double in value no matter what the overall stock market does. All you need is to find 1 a year that can double. That could go from .50 cents to $1. Or $5 to $10 or $20 to $40. You ONLY need 1 stock!
One stock I mentioned on our Alley Cat Trading Newsletter went from .26 cents back in late November to almost $1 in early January. That more than doubled in less than 2 months!The stock was CYGX. I am sure there are many stock trading newsletters online and off. Do some research on them and the companies they recommend. Remember you only need 1 good stock a year. You could very well have a situation like with CYGX where it doubled in a very short time You take your profits and go hunting for the next stock. You don’t always have to be in a trade. If that trade took you 2 months you are 10 months ahead of schedule take your time to find the next stock that could turn. Maybe that stock ends up taking 14 months to double.
About the Author
Steve Hoven has had years of experience trading. check out his free newsletter at http://www.alleycatnews.net
While Forex trading is becoming more popular in the United States, the vast majority of investors still do not understand the massive advantages offered in the foreign currency market when compared to equities or fixed income trading. When you fully grasp the following concepts, you’ll understand why you might want to reconsider your current investment strategies.
1. Currency prices are not heavily influenced by institutional investors. In stock trading, there is a limited amount of volume on a daily basis. Each stock has a specific number of shares on the open market and trade prices are governed by the number of people attempting to buy or sell shares at a specific point in time. This makes the market vulnerable to price swings when a large investor is attempting to buy up or unload large amounts of shares. For example, if some pension fund owns 10% of a company and suddenly decides to liquidate their position, the market is now flooded with sell orders. Since the amount of shares attempting to be sold will outnumber the amount of buy orders, the price of the stock will start to drop as the number of buyers days up. This creates losses for the remaining shareholders. On the other hand, the forex market is so massive and has so many investors that no single investor can possibly have a major impact on pricing. There are too many units of Euros, Dollars, Yen, etc for any single institution to hold even close to a controlling interest in any currency.
2. Margin requirements are significantly lower in forex trading than equity trading. While the exact amount of margin allowed is determined by each broker, the restrictions are usually much less stringent when trading forex. Margin allows the investor to “play with house money.” In essence, you’re borrowing money from the broker to invest in your own account. While this can be risky, it can also be insanely profitable. For example, let’s say you have $10,000 of your own money to invest. If you open up a margin account at an equity broker, you can usually margin up to 50% of the value of stock. So if you buy $10,000 in Microsoft stock, you can borrow another $5,000 to own a total of $15,000 in value. With your forex account, the margin requirement is often as low as 1%. Which means that if you buy $10,000 in Euros, you can use your broker’s money to buy another $1,000,000. So you now own over $1 million in Euros. Now lets say that the value of each investment increases 10%. Your $15,000 in Microsoft stock is now worth $16,500. You sell it, pay back the $5,000 you borrowed, and you pocket $1,500 in profit (minus any fees or interest). Your return on investment is 15%. If your Euros went up 10%, your $1 million is now worth $1.1 million. After selling and repaying your broker, you profit $100,000 before any interest. That’s a return on investment of over 1,000%. Of course, you need to be extra careful when trading on margin. Imagine if the transaction went the other way. You’d be in a much bigger hole in the forex scenario. But the potential for enormous gain is there and is one of the major reasons why forex trading is so attractive to serious investors.
3. Forex trading is open 24 hours a day. Unlike the U.S. stock markets, you can trade forex any time of day from Monday through Friday. If a major news story breaks when you’re holding stock, and it’s after hours, you’re stuck holding onto your position until the market opens the next day. By the time this happens, everyone else knows the news and there’s thousands of buy/sell orders waiting when the opening bell rings. This will dramatically influence your trade price and negate any advantage you might have had by being one of the first to react. Keep in mind that many corporations withhold major news such as earnings reports and personnel moves until after the market closes. They do this to minimize emotional trading, which is smart for them to do but also hurts savvy investors. Since Forex trading is open 24 hours, you can place your trade order whenever major events occur.
4. The foreign exchange market is more liquid than the equity market. Forex is the largest market in the world. Every day, an average of $1.4 trillion dollars is traded, and the amount of securities (foreign currencies) is minuscule when compared to the number of companies traded in the equities market. This means that there are always buyers to be matched with sellers, which means that you’ll have a much better chance to get a fair and accurate price on your trade than if you were trading a low volume stock where the bid and ask spreads can be very large.
5. Forex trading offers the advantage of limited risk. This is one of the large advantages over the futures market. When you buy a futures contract, you are obligated to buy or sell a specific amount of a specific commodity at a specific time for a specific price. Which means that if disaster hits, you’re out of luck. For example, lets say you buy a futures contract to sell corn. If news breaks that reports an outbreak of deaths caused by a pesticide used in corn crops, the price on your contracts will drop through the floor, limits will drop, and you could be stuck in your position and end up taking massive losses. This would not happen in the forex market since you can leave your position at any time.
About the Author
This article is just a small piece of the free Forex Trading Course at forexgameplan.com. Go learn about this incredible market and sign up today while the 30 day course is still free.
