Investment Strategies

For those unfamiliar with the term, Forex (Foreign Exchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced.

In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.

Forex is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day.

With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.

Another somewhat unique characteristic of the Forex money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.

The two fundamental strategies in investing in Forex are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price.

Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself.

Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.

A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation.

An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants.

For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.

You Must Know This!

Of course, the hate mail is always from a few people that happen to own these "certain types" of businesses I discussed and those businesses of course are Credit Counseling or Debt Consolidation companies; of which many "claim" to be non-profit organizations.

You'd almost have to be an ostrich with your head stuck in the sand to not see or hear at least one advertisement a day from a Credit Counseling or Debt Consolidation Company. However, you can expect this to change and change soon. Since this is a topic which tends to "stir up" the owners of these businesses, I am going to take a different approach by NOT sharing my opinion, but rather, the opinion of others. I will start with the news media and the Internal Revenue Service:

"(NPR News, May 15, 2006). The Internal Revenue Service is revoking the tax exempt status of some of the largest credit counseling agencies in the country. An IRS investigation disclosed that the firms solicited business from people seriously in debt and that they didn't provide counseling or consumer education, as required.

Prodded in part by a congressional oversight committee and consumer advocates, the IRS began investigating dozens of credit counseling agencies -- most holding non-profit status -- two years ago. IRS Commissioner Mark Everson says the companies "poisoned an entire sector of the charitable community."

Everson says in many instances, companies were organized merely to funnel business to loosely affiliated for-profit companies. Many of the firms spend millions of dollars on commercials that urge anyone with debt to call them to solve their financial woes. And because tax-exempt organizations are not bound by the federal do-not call list, the firms were able to randomly call consumers, pitching their services under the guise of a non-profit counseling service.

The IRS investigations are also likely to affect consumers, thanks to a new bankruptcy law that requires consumers considering bankruptcy to get counseling before they are allowed to file. The IRS wants to ensure that only legitimate non-profit agencies are doing the counseling. In addition to the actions announced Monday, the IRS is sending more than 700 compliance letters to the rest of the credit counseling industry (END)."

Since almost all Credit Counseling and Debt Consolidation companies claim a non-profit status, I feel most consumers are easily sucked in with their skepticism and defenses at bay. After all, when most of us hear the word "non-profit" the first thing we usually think of is a church or homeless shelter.

From the NPR article and the actions of the IRS, I think it's fair to assume that many of these "non-profit" organizations have been operating under a scenario similar to that of a wolf guarding a hen house. However, this doesn't mean all credit counseling and debt consolidation companies are bad but... you do need to know the truth about how they operate and their limitations.

The first thing you want to understand is these companies are ALL more interested in making money off you than they are in preserving your credit rating. The bottom line with either credit counseling or debt consolidation is that it absolutely ruins your credit. I can just hear the companies arguing this with a consumer right now, telling them nonsense like "It helps your credit since it tells creditors that you're working on your situation and not just running away from it." Listen... if one these places tells you that than watch out. Why? Because they will lie to you about other things as well!

One of the first actions these programs usually requires you to do is for you to CLOSE all your revolving credit accounts. You then make payments to the organization and they take care of everything for you. What this says to all your creditors (as well as anyone considering giving you credit) is that you are so out of control with your finances that you can't even manage paying everyone back on your own. Therefore, you're hiring someone else to do it for you!

99% of the time these companies will claim they can negotiate with your creditors and get interest rates reduced thereby saving you money. While this is true, what's also true is you can easily negotiate these same rates as well as they can by just calling your creditors yourself. You'd be amazed at how many of your creditors would love to hear from you (especially when the chips are down!). Not too mention, any money the counseling company was to save you would more than likely be sucked back up by their monthly fees (usually around $500 to $1,000 per year).

This brings us into a whole other dynamic of their business model. Because these companies always make their money off of monthly fees paid by the consumer, the longer they can keep those monthly fees coming in the more profitable their business will be. It's for this reason that most consumers who sign up with these companies usually find themselves on payment plans with the lowest monthly payment possible (which turns out to also be the LONGEST payment plan as well). Not surprising is it?

Am I against Credit Counseling and Debt Consolidation companies? Absolutely not. After all, there are millions of people in America who will never be able to manage their finances. Credit to them is a destructive addiction much like alcohol or drugs and they will never be able to control it. Instead, it will always control them. We've all seen these people. Every time they are extended credit shortly thereafter they are in financial trouble (usually blaming it on some external factor). For these people I think these credit and debt counseling programs can be a good thing (as a ruined credit report is not a hindrance to them but actually an asset). It keeps them out of future financial trouble by forcing them to live their lives on a "cash and carry" basis; which is ultimately conducive to a better standard of living down the road.

On the other hand. If you're good with your finances and have control with credit but went through some type of hardship beyond your control in the past (i.e. divorce, job loss etc); then the services of these companies will never be for you. You will do far better and preserve your credit rating by taking matters into your own hands. Reason being is that you understand your credit rating is a powerful tool that can help you move ahead faster, help others and help yourself as well as create the life you want. It all comes down to self management. We all know that those who cannot manage themselves will ultimately be managed by others. Credit is no different. When you learn to manage it well, you are the master and it is the servant.

If you care about your credit and want to benefit from it in the future, then you will never rely on a credit or debt counseling service to help you get out of any trouble you find yourself in. Instead, you'll look inward and get yourself out while preserving your credit rating the best you can. Credit and debt counseling is for people who are "ok" with throwing their credit rating in the trash so they can have "someone else" manage their payments for them (since they are unable to manage them themselves). And again, as far as negotiating interest rates, you can do just as good as them or better. If you don't believe me just call any of your creditors and straight out tell them your situation. You will quickly find you don't need to be afraid of them. They just want to get paid like the rest of us.

The Right Credit Card

We all know that there are more credit card companies out there than we can possibly count, it also seems any more that there are just as many different types of credit cards. Of course all companies claim that all of their cards offer the very best deal available. The truth of the matter is that every person has his or her own unique needs from a credit card so no card is perfect for everyone.

One of the newest cards available these days is the "low interest" credit card. It is highly likely that you have already received at least one offer for one of these cards if not several. These cards offer a much loser interest rate than most of your traditional cards, in some cases the interest rate may even be drastically lower. Most cards of this type will also offer a "balance transfer" option that allows you to transfer the balance from your existing high interest rate credit card to your new lower interest rate card. In most cases you will have a fixed period of time that the interest on this balance will either be 0% or at least very low. Of course after that introductory period the interest rate will rise to the normal rate for the card. This can still offer you some significant savings especially if you are able to pay off the balance during that time.

Credit cards are a highly profitable business, in fact they are so lucrative that many companies have started to offer their own cards to get a piece of the action. Airlines commonly offer credit cards that will allow you to earn free miles based on your spending and balance. If you travel frequently one of these cards could be very advantageous to you. Another common type of card you will see anymore are reward cards, these are cards that will reward you for using them. Based on the amount of spending you use the card for you will accumulate points that can be redeemed for everything from travel and hotel stays to appliances. There are some cards that simplify it and just refund a percentage of what you spend back to you. If you use a credit card frequently it might be in your best interest to use a card with a reward system.

Instant approval cards are another card that is gaining rapid popularity you may even receive offers for these cards by email as well as the more standard postal mail. Just as the name implies these cards offer you the chance to apply and get instant approval instead of waiting on a lengthy approval process. With traditional cards it can take two weeks or sometimes longer to be approved. Even with these cards instant approval does not always mean instant credit. There are still some companies that will provide you with a temporary number that you can start using immediately, many companies have done away with that practice due to high rates of credit card fraud.

With so many companies and cards available it will certainly be in your best interest to do some research before selecting the card you want. Keep in mind that you do not want to apply for a lot different cards as this can have a negative impact on your credit rating.

Credit Card Debt

Today's consumer society is driven by easy short term unsecured debts. Most of these are related to credit cards. You may find yourself in a dissatisfactory financial situation if you fail to maintain a balance between your income, and your expenditure. If you have credit cards, you need to know how to manage your transactions, as well as the credit limit. Otherwise you may end up in a credit card mess.

Credit card companies, including banks, try to lure customers with enticing offers. The idea of buying now and paying later is usually irresistible for most people, which make them collect credit cards from different companies. They make a lot of purchases using these cards, and pay the minimum amount due each month. This leads to the accumulation of debt, which keeps climbing with each passing month, until the severity of the problem gets so acute, that they are unable to pay even the minimum amount. In these circumstances, the only way out is to opt for debt consolidation.

Consolidation is the perfect solution for credit cardholders to better their future credit. There are several reasons for debt consolidation. Many people opt for debt consolidation to extend the loan term from 5 to 15 years. Another reason is to lower the interest rate. Consolidation can get you a better interest rate than the one you currently have. Furthermore, consolidation will ease the burden, as it gives you the option to pay just one bill, instead of making separate payments to different creditors.

If you wish to consolidate your credit card debts, a thorough research will help you decide if it is the right decision for you. Several credit card companies and banks offer debt consolidation services to their customers. The first step is to make a detailed inspection of your debt. Make a list of the interest rates you're your credit cards offer. If you feel that the new interest rate is lower than the average of the old one, then consolidation will be profitable for you. Once you have all the details, get in touch with a professional, who can help you both with your consolidation, and to get the best deal.

Debt consolidation can also be done through credit-counseling firms. These firms will add up all your monthly dues, and have you make a single payment to them. The firm uses this amount to pay off creditors until all the debt is wiped out. However, you need to be cautious about choosing a credit-counseling firm, because some of them charge money for their services. People who have gone through debt counseling can help you in selecting the right firm. Alternatively, you can also apply for a debt consolidation loan, which has a considerably low interest rate.

Getting trapped in debt is like going down a spiral without knowing how you to ever regain your footing. Credit card debt consolidation will help you in starting afresh on the road to a healthy financial situation. It is the most popular solution to get rid of the burden of debt, providing you make sure that consolidation is the right choice for you before you opt for it.

Ipad Touch

The iPad has finally landed in the UK and we've bagged one for a test. The launch was put back until the 28th of May while Apple scrambled to manufacture enough units to satisfy US orders, and even now there are still supply problems - orders taken after 13 May have been delayed until the 7 June, for example.

So, what is the fuss all about? The iPad essentially revolutionises the concept of a tablet computer. Previously tablet devices addressed a legitimate consumer need (casual, lazy, couch-bound computing), but left most people frustrated with a stylus-driven handwriting recognition system and an operating system that was really designed to be used on a desktop PC.

As good as the iPad is, it is not perfect. Here's a short list of things that iPad critics usually complain about:

* No camera
* No USB ports
o We're stuck with that iPhone port for everything
* No background execution (multi-tasking) for third party applications
o No always-on IM
o No app-based music in the background
o No data crunching in the background
*This should be addressed by the iPhone OS 4.0, due to be released for the iPad in the Fall.
* Virtual keyboard is not as productive as a real one
* No Flash (see our Web Browsing section)
* AT&T-only (in practice)
* No widescreen
* Closed application market (iPad has been jailbroken)
* Can't create a list of apps/files to buy/download
* And more...

Get Tax Help!

Nowadays we have to pay taxes on most things. We pay tax on the money we earn at work and this is called income tax. Income tax is applicable to business income, capitol gains, wages and salaries. There are two specific rates of income taxes and these are known as flat or progressive tax rates.

Flat tax rates are defined as the same flat rate of taxes on all income regardless of earnings. Progressive tax rates on the other hand are based on the amount of money earned by an individual or business. The progressive rate goes up as the level of earnings rise.

We all have to pay sales taxes. This is the way that businesses charge consumers for a product or service sold. Because of the many forms that taxes take it is advisable to get some tax help if you want to know exactly where you stand.

Some other forms of taxes include personal property tax, inheritance tax, transfer tax, property tax, use tax, toll tax, excise tax, corporation tax, and others. These could all become confusing when it comes to determining which applies to you, therefore, you need tax help.

Where To Get Tax Advice

When income tax time comes around each year, businesses and individuals seek tax help. Many people simply do not understand all aspects of filing their tax and so it makes sense to seek help from tax professionals in this matter. Income tax professionals can help you when it comes to preparing and filing your tax forms.

Accountants and lawyers are both able to advice on income tax matters. Your particular tax problems will determine which one you would be the most suited to your needs. The IRS and other financial websites can also be excellent resources for tax help if you need it.

Resources On The Net

The internet is a good place to start when you are looking for tax help. The first place you should visit for tax information is irs.gov. This is the website of the Internal Revenue Service, where most of your tax dollars are dealt with. The IRS website can provide you with plenty of information when it comes to different areas of tax, as well as information on which areas may apply to you. It will also tell you where you can find help for specific problems.

Try H R Block at hrblock.com. They can help you with filing your income taxes, and if you require it, they can provide you with software to help you prepare your taxes yourself. They also offer advice on other financial matter.

Summary:

It has been said that there are two certainties in life, death and taxes. While you can do nothing about the first there is all kinds of help available when it comes to paying taxes. Getting the right kind of advice is crucial if you are to save at least some of your dollars.

Forex Trading

The rollover is the arrangement of artificially postponing the actual delivery settlement of a currency in position by normally a day. In actual practice, ideally all traders are required to take or give delivery of the currency they bought or sold (settlement) on the second business day after the deal was closed. But the actual practice differs by way of artificially extending the settlement day. But this rollover differs in the forex trading parlance fom that of stock trading.

It can be fairly well assumed that most of the forex trading accounts are leveraged with the broker having extended the trader a loan for the day which is the exposure limit. At the closing every day theoretical closing; though- at 21:59 London time, traders need to close their position unless they actually want to take or give delivery of their positional currency. But due to the loan leverage the traders account will not be having that kind of capital that enables him to take delivery of the currency.

Brokers have a stated policy of closing all accounts at that precise time and almost instantaneously open a new account for the quantity of that currency pair at the corresponding rate. This means although the account has been closed theoretically, the positions are still open from the traders' perspective. This effectively means hat he traders do not have to take or give delivery nor do they have to payback the loan extended to them.

Broker, on the other hand charges an overnight interest for the amount rolled over. How is the differential interest calculated by the broker? Assume that you have a 1 lot position of euro/dollar with euro being your long position. If during the trading day the dollar appreciates by 25 pips and the broker rolled over your position to the next trading day at the close with dollar having further appreciated by another pip overnight, this 1 pip is the difference in interest between the two currencies. So you pay this 1 pip premium to the broker.

On the other hand if you were short on euro and long on dollars you would gain that differential interest amount. To put things in perspective, if you bought a currency and it gained overnight you are to benefit by that incremental differential and if the reverse were to happen, you have to pay this to the broker.

In actual practice, all rollovers and overnight interests are automatically calculated and credited or debited to your account by the broker. For tax purposes, IRS treats the interest gained or paid separately.


Jason Uvios writes about "Rollover in Forex Trading" to visit:forex, online forex trading and forex broker.