Friday, January 11, 2019

We create a portfolio - experience of the stock market

As a rule, the stock market is very different from the forex market in terms of the nature of the work and the instruments, strategies and indicators used. But sometimes the strategies that are widely used by capitalists to work in their market + are also salutary for the currency markets. One of these mutually beneficial strategies is the formation of a portfolio of currencies.

The portfolio of currencies is formed approximately according to the same principles as the securities portfolio. Currency pairs are selected in such a way that in the aggregate in the “basket” of acquired currencies there remains approximately an equal number of currencies with which operations are being conducted at the moment (there are open orders). Why such a strategy? It leads to the fact that in any movement of the market for a currency pair involved in the “currency portfolio”, there will not be any noticeable bias or a large floating loss - if a larger loss is incurred for one currency, a corresponding income will be generated for counterbalancing pairs. Thus, the overall structure of the portfolio remains unchanged, those transactions that turn out to be profitable are closed, those that accumulate unprofitableness are repaid by profitable pairs of correspondents.

Some awkwardness of such trade lies in the fact that it is quite difficult for a trader himself to implement such an algorithm. To do this, as a rule, they use trading robots, which they are charged with forming the portfolio and keeping track of its content, while the trader leaves the flow control over the trade. It is also very important that the portfolio type of trading is more reliable in terms of risk control, but at the same time it is quite problematic if the task is to obtain a maximized return. It is almost impossible to get the highest return with the help of this portfolio: the lower the risks, the lower the profit is the general rule of the market.

In addition, there are special tools and additional mathematical settings that allow you to sufficiently increase the profitability of algorithms that are based on the portfolio. There is a lot of open research into the mathematical analysis of this algorithm and its variants and improvements — so a good programmer will always find something to add to the standard scheme. The trader himself can also trade in such an algorithm without relying on a trading robot, but for this it is necessary both to use the built-in balance control tools in the trading terminal, and to actively maintain its own trading records.

Investment coins: make a profit from the money.

You can write a whole book about how to invest money to save them and get a stable income. However, we have only a small article at our disposal, and therefore we will focus on one of the quite promising types of investment - investing in investment coins.

Investment coin is a topical means of investing capital for almost 20 years: during this time it has been included in the turnover of most large banks. This investment instrument is a coin of a certain nominal value issued by the Central Bank (1,5,10,50 or 100 rubles). However, its real price and value are related to the content of precious metals in it: gold and silver. The cost of such a coin on the market changes according to the exchange rate of these metals, which, importantly, continues to grow even in times of crisis. Another advantage is the possibility of sale !! without intermediation of financial institutions, except for the bank. It is worth noting the availability of this type of investment: for example, as of February-March 2015, the cost of the silver coin "George the Victorious" is 1,200 rubles, which is quite affordable for the majority of Russian citizens.

One of the varieties of investment coins are collectible coins. Their purchase and sale began to be viewed as an investment instrument relatively recently: until 2011, operations with them were subject to VAT, which minimized possible profits. However, now the same rules apply to them as to investment coins, and it is impossible not to note certain advantages of this type of investment: first, the value of such a coin is not tied to the precious metals rate, but is determined by the circulation, composition, subject, preservation and prevalence that brings it closer to antiques, so stock prices do not affect its value. Moreover, interest in these coins can be caused not only from a financial point of view: some collectors are ready to pay an inflated price to complete their collections with the missing copy.

But it is also worth understanding that only experienced coin collectors will be able to extract real profit from collectible coins, and asking for professional help for one of them can cost a considerable amount and negate even the profit from a successful transaction.

There are pitfalls in the turnover of ordinary investment coins: first of all, the difference in the buying / selling rate. Therefore, it is not profitable to play on the difference in rates, selling and buying investment coins. This makes the coin a long-term investment. But in this case it is necessary to resolve the issue of storing coins: if the money can be deposited in the bank as a deposit, the coins are a physically expressed object and the bank will charge a certain fee for storing them in a dedicated bank cell, while storing them in an apartment may be risky, especially if it becomes known to your friends, and from them - to third parties. Moreover, freedom from paying VAT does not mean that the proceeds from a competent investment of funds are not subject to taxation.

In conclusion, we would like to note that any kind of investment is inevitably associated with risk, and investment coins are no exception. However, in the long run, they have been showing growth for more than a year than people who are prone to long-term planning. And if in a crisis period you do not wish to stop the movement of your capital, then investing in investment coins is a completely relevant way.

Tuesday, January 8, 2019

Investments aimed at acquiring large companies

What is absorption?
Absorption implies an economic process, as a result of which, an increase in business occurs, that is, one large company appears instead of several less significant ones. The main goal of any takeover is to reduce costs and increase profits. As a result of this process, productivity increases, efficiency increases, which in turn gives the company a huge advantage over its competitors. As a rule, during absorption, one stronger and large company absorbs the weaker one. As a result, a weak company ceases to exist, and all its property and assets pass into the possession of the scavenger company, which becomes even larger.
There are only two types of absorption: friendly and aggressive. With an aggressive one, the company buys back the main stake in the other and simply leaves her no choice to be absorbed. An example of such a takeover is the company GOOGLE, which absorbed more than 100 (hundreds) of companies, including YouTube, AOL, Begun, etc.

If the companies themselves make an informed takeover decision on the basis of mutual (and eligible, as well) agreement, this is called a friendly takeover. But there are situations when it is difficult to find out whether the absorption was reciprocal or aggressive, because the absorbers themselves often pretend that everything happened on a friendly note.

Benefits of absorption
The main goal of any takeover is to get a significant advantage from the joint venture. These benefits include reducing the number (it may be partial) of the entire staff (management cuts, marketing cuts, financiers). The company begins to save on wholesale conditions, due to the increase in purchases. The company increases its market share by increasing brand awareness, providing loans on the best terms, as a large company trusts more.

Classification of investments aimed at acquiring companies
Depending on the degree of risk, investments aimed at acquiring companies can be classified into several types. This is a low-risk, medium-risk investment. Accordingly, the degree of risk will also determine the profit, the lowest for investments with a low (or medium) level of risk, and the greatest for investments with an increased risk. But investments with an average degree of risk can bring a stable long-term income.

Also, investments aimed at acquiring companies can be classified depending on the degree of liquidity. These are highly liquid when investments quickly turn into revenues. For example, the purchase of shares of large companies (securities), which are listed on the world famous exchanges.

Medium-liquid investments, such investments do not require a long time to generate income, but they will not be able to sell them quickly. As an example (fairly simple), we can cite the assignment of claims for reimbursable receivables (DZ) to a company and its resale. And low-liquid investments, such investments will require a lot of time for their implementation and profit. An example is an investment in a company's fixed assets.

Another investment is classified by the time of their placement. These are short-term, medium-term and long-term investments. But it is worth emphasizing that investments that are aimed at acquisitions cannot be short-term. In the market one can still meet foreign and domestic investments. Domestic means investments in those companies that are located on the territory of one country, but, outside, on the territory of several states.

Monday, January 7, 2019

The path to passive income is investing!

Most people work day by day at work and at the end of the month they give out the money they earn or transfer it to a card. Others have several types of income or several part-time jobs. Their income depends on the ability to work and the amount of work done. The smartest earn money without doing anything physically. This type of income is called passive income.

Interest from such income may accrue from deposits, dividends from stocks, deductions for business partnerships or fees from books and other products. For all people, the chances are almost equal to only some of them love security in the form of a monthly payment, while others have a freedom in which they can do whatever they want, and the money will still be credited to their account.

The first steps to passive income are investing. At the initial stage, it will be difficult because, not knowing all the basics of investing, you can make a mistake and lose your money. This often happens with newbies who trust emotions and trust their money to scammers, who in turn are looking for naive and inexperienced investors.

You can start investing from a small amount and invest at least 10% of your income every month. After a few months, you will have developed a habit and it will not be so difficult for you to invest money as at the beginning. It is also important to learn and learn about new ways of investing. Over time, you will learn to invest in assets such as stocks, business, commodities, or gold.

After a few years of intensive investment, your passive income will only grow, and you will work less and less or you may stop working at all. While others were spending money in bars and watching television, you invested and trained. Now the other person works further, and you get income, and spend your free time as you wish.

Several investment rules

Before you start investing your money, read through a few rules. Such investments as in trust management companies and Forex in PAMM accounts, of course, bring much more than a deposit in a bank, but if you make a wrong choice, you can not only win, but also lose a large amount, get upset and forget about this venture. and forever. To avoid this, you need to follow the rules of investing.

Before you invest your money. You must be clear about where exactly your capital is invested and what risk you might expect. Do not make a decision under pressure, thoughtlessly. Examine all the information, read the reviews, delve into the subtleties of work, selected projects.

Never invest your last cash or take a loan to invest. Imagine a picture of what will happen if you lose all investments, what kind of life you will have then, and you have to pay the loan or interest will start to grow. Start investing only on deferred free funds, without prejudice to yourself and your family. Only when you become a professional investor, you can count on credit funds for a more rapid increase in investments.

Do not believe the screaming slogans about maximum profit. It is better to have a small but stable profit than to lose everything. Forex profits can be up to 10 percent per month. In certain trust management companies, in some cases, it reaches up to 20 percent. Now on the Internet a huge number of scammers who promise higher incomes. Treats them with need. Trust your investments only to trusted exchanges and companies.

It is better to make investments in several directions. Because even the most professional traders make mistakes and suffer heavy losses. Such a distribution of investments, in case of failure in one project, is compensated by the profit of another. We recommend at least 10 investment tools, proven and reliable, and not random.

By following these rules of investing, almost everyone will be able to have passive income with minor risks. For this you need to try how this mechanism works. Try to spend less than you get. Monthly save at least a tenth of all your income on investments. Look for monthly and invest in reliable companies. And you yourself will notice how your capital will increase.

Equity investment


Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.


Table of contents
1 Direct holdings and Pooled funds
1.1 The Pros and Cons of holding shares directly or via pooled vehicles

2 Fundamental Analysis and Technical Analysis
3 How share prices are determined
4 Related Material
5 Further Reading

Direct holdings and Pooled funds
The equities held by private individuals are often held via mutual funds or other forms of pooled investment vehicle, many of which have quoted prices that are listed in financial newpapers or magazines; the mutual funds are typically managed by prominent fund management firms (e.g. Fidelity or Vanguard). Such holdings allow individual investors to obtain the diversification of the fund(s) and to obtain the skill of the professional fund managers in charge of the fund(s). An alternative usually employed by large private investors and institutions (e.g. large pension funds) is to hold shares directly;in the institutional environment many clients that own portfolios have what are called segregated funds as opposed to, or in addition to, the pooled e.g. mutual fund alternative.


The Pros and Cons of holding shares directly or via pooled vehicles
The major advantages of investing in pooled funds are access to professional investor skills and obtaining the diversification of the holdings within the fund. The investor also receives the services associated with the fund e.g. regular written reports and dividend payments (where applicable). The major disadvantages of investing in pooled funds are the fees payable to the managers of the fund (usually payable on entry and annually and sometimes on exit) and the diversification of the fund that may or may not be appropriate given the investors circumstances.

It is possible to over-diversify. If an investor holds several funds, then the risks and structure of his overall position is an amalgam of the holdings in all the different funds and arguably the investors holdings successively approximate to an index or market risk.

The costs or fees paid to the professional fund management organisation need to be monitored carefully. In the worst cases the costs (e.g. fees and other costs that may be less obvious hidden fees within the workings of the investing organisation) are large relative to the dividend income payable on the stock market and to the total post-tax return that the investor can anticipate in an average year.


Fundamental Analysis and Technical Analysis
To try to identify good shares to invest in, two main schools of thought exist: technical analysis and fundamental analysis. The former involves the study of the price history of a share(s) and the price history of the stock market as a whole; technical analysts have developed an array of indicators, some very complex, that seek to tease useful information from the price and volume series. Fundamental analysis involves study of all pertinent information relevant to the share and market in question in an attempt to forecast future business and financial developments including the likely trajectory of the share price(s) itself. The fundamental information studied will include the annual report and accounts, industry data (such as sales and order trends) and study of the financial and economic environment (e.g. the trend of interest rates).


How share prices are determined
One theory about equity price determination in professional investment circles continues is the Efficient Markets Hypothesis (EFM), although this theory is being widely discredited in the academic and professional markets. Briefly, this theory suggests that the share prices of equities are priced efficiently and will tend to follow a random walk determined by the emergence of news (randomly) over time. Professional equity investors therefore tend to spend their time immersed in the flow of fundamental information seeking to gain an advantage over their competitors (mainly other professional investors) by more intelligently interpreting the emerging flow of information (news).

The EFM theory does not seem to give a complete description of the process of equity price determination, for example because share markets are more volatile than a theory that assumes that prices are the result of discounting expected future cash flows would imply. In recent years it has come to be accepted that the share markets are not perfectly efficient, perhaps especially in emerging markets or other markets where the degree of professional (very well informed) activity is lacking.

Another theory of share price determination comes from the field of Behavioral Finance. In Behavioral Finance, it is believed that humans often make irrational decisions, particularly related to the buying and selling of securities based upon fears and misperceptions of outcomes. The irrational trading of securities can often create securities prices which vary from rational, fundamental prices valuations. For instance, during the technology bubble of the late 90's and subsequent 'burst' in 2000-2002, technology companies were often bid beyond any rational fundamental value because of what is commonly known as the 'greater fool theory'. The Greater Fool Theory holds that because the predominant method of realizing returns in equity is from the sale to another investor, one should select securities that they believe that someone else will value at a higher level at some point in the future.