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If you do not know a lot about currency trading, allow me to introduce it to you. It is what I trade and I believe that it is one of the best markets to trade because of its efficiency. The transaction costs to execute a trade are minimal and most brokers provide you with the tools and data you need to make your trading decisions, they usually provide them for free. The market is open 24 hours a day which allows you to design your trading hours around your daily commitments. It is very volatile, which is great for those people who are looking for day-trading opportunities.

The foreign exchange market is the market in which currencies are bought and sold against one another. People may loosely refer to this market under different labels, including foreign exchange market, forex market, fx market or the currency market.

The foreign exchange market is the largest market in the world, with daily trading volumes in excess of $1.5 trillion US dollars. All transactions involving international trade and investment must go through this market because these transactions involve the exchange of currencies.

It is the most perfect market that exists because it has a large number of buyers and sellers all selling the same products. There is a free flow of information and there are little barriers to participate.

The currency exchange market is an over-the-counter (OTC) market which means that there is not one specific location where buyers and sellers can actually meet to exchange currencies. Instead, transactions are conducted by phone, fax, e-mail or through the websites of brokers who specialize in currency trading.

The major dealing centres at the time of writing are: London , with about 30% of the market, New York , with 20%, Tokyo , with 12%, Zurich , Frankfurt, Hong Kong and Singapore , with about 7% each, followed by Paris and Sydney with 3% each. Because of the fact that these centres are all over the world, foreign exchange traders can execute transactions 24 hours a day. The market only closes on the weekends.

THE MAIN ‘PLAYERS’ IN THE FOREX MARKET

The five broad categories of participants are: consumers, businesses, investors, speculators, commercial banks, investment banks and central banks.

Consumers, including visitors of countries, tourists and immigrants, do need to exchange currencies when they travel so that they can buy local goods and services. These participants do not have the power to set prices. They just buy and sell according to the prevailing exchange rate. They make up a significant proportion of the volume being traded in the market.

Businesses that import and export goods and services need to exchange currencies to receive or make payments for goods they may have bought or services they may have rendered.

Investors and speculators require currencies to buy and sell investment instruments such as shares, bonds, bank deposits or real estate.

Large commercial and investment banks are the ‘price makers’. They are the ones who buy and sell currencies at the bid-and-offer exchange rates that they declare through their foreign exchange dealers.

Commercial banks deal with customers on one hand, and with the Interbank or other banks, on the other hand. They profit by utilizing the bid-and-offer spread. The bid price is the exchange rate that the buyer is willing to buy and the offer price is the exchange rate at which the seller is willing to sell. The difference is called the bid-offer spread. They also make profits from speculating about whether the exchange rate will rise or fall.

Central banks participate in the foreign exchange market in their effective duty as banks for their particular government. They trade currencies not for the intention of making profits but rather to facilitate government monetary policies and to help smoothen out the fluctuation of the value of their economy’s currency.

WHAT CURRENCIES TO TRADE IN THE FOREX MARKET

You can trade any country’s currency by exchanging it to another country’s currency, however the list below are the ones that are the most popular and are usually made available by most online brokers for you to trade.

AUD (A$): Australian Dollar a.k.a. ‘Aussie’ or ‘Oz’

CAD (Can$): Canadian Dollar

CHF (SwF):Switzerland Franc a.k.a ‘Swissi’

DKK (Dkr): Denmark Krone

EUR (€): European Dollar a.k.a ‘Euro’

GBP (£) : Great Britain Pound a.k.a ‘ Sterling ‘ or ‘Cable’

HKD (HK$ ): Hong Kong Dollar

JPY (¥): Japanese Yen

MXN (Mex$): Mexican Peso

NOK (NKr): Norway Krone

NZD (NZ$): New Zealand Dollar a.k.a ‘Kiwi’

PLN (z dashed l): Poland Zloty

SAR (SRls): Saudi Arabia Riyal

SEK (kr or Sk): Sweden Krona

SGD (S$): Singapore Dollar

THB (Bht or Bt): Thailand Bhat

USD ($): United States Dollar

ZAR (R): South Africa Rand

CURRENCY PAIRS

To trade the currencies above, you need to trade currency pairs. Think of these currency pairs as your trading instruments – instruments that you can buy or sell. Listed below are the most popular currency pairs that people trade:

1. AUD/JPY: Australian Dollar – Japanese Yen

2. AUD/USD: Australian Dollar – US Dollar

3. EUR/CHF: European Dollar – Switzerland Frank

4. EUR/GBP: European Dollar – Great Britain Pound

5. EUR/USD: European Dollar – US Dollar

6. EUR/JPY: European Dollar – Japanese Yen

7. GBP/CHF: Great Britain Pound – Switzerland Frank

8. GBP/USD: Great Britain Pound – US Dollar

9. USD/CAD: US Dollar – Canadian Dollar

10. USD/CHF: US Dollar – Switzerland Frank

The currencies on the left can be exchanged for the currencies on the right.

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This is an excerpt, modified from the book: The Part-Time Currency Trader, featuring examples of how to trade these currency pairs.

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The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don’t measure their progress too frequently with irrelevant measuring devices. The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices! Just not going to happen…

This is mythology, not investing. Investors who grasp the realities of these wonderful marketplaces recognize the opportunities and embrace them with an understanding that goes beyond the media hype and side show performance enhancement barkers. Simply put, when investment grade securities rise in price [As they are now, with the DJIA finally putting together a successful attack on the 11,000 barrier], Take Your Profits, because that’s the purpose of investing in the stock market! On the flip side (and there has always been a flip side, more commonly dreaded as a “correction”), replenish your portfolio inventory with investment grade securities. Yes, even some that you may have just sold days or weeks ago during the rally. This is much more than an oversimplification; it is a long-term (a year or two is not long term.) strategy that succeeds… cycle, after cycle, after cycle. Sounds an awful lot like Buy Low/Sell High doesn’t it? Obviously, Wall Street can’t let you know that it is quite so simple!

[Note that Dow Jones 11,000 was last breached during the infancy of this century, and that the last All Time High in this much too widely followed average occurred late in 1999. When the DJIA banner is repositioned on that historical peak of 11,700 or so, it will represent no less than six years of zero growth in this, the most respected, of all Market Indicators! Would the media strip the gold medal from this Stock Market Icon if it knew that during these same years: (1) There have been significantly more stocks rising in price on a daily basis than moving lower. In fact, more than two-thirds of the last 68 months have been positive. (2) Since April 2000, there have been 120 more positive days in NYSE issue breadth than negative days. (3) 250% more NYSE stocks established new high price levels than new lows. (4) We are working on our sixth consecutive year of positive issue breadth!]

So understand that your portfolio statement values will rise and fall throughout time, and rather than rejoice or cry, you should be taking actions that will enhance your “Working Capital” and the ability of your portfolio to accomplish your long term goals and objectives. Through the simple application of a few easy to memorize rules, you can plot a course to an investment portfolio that regularly achieves higher highs and (much more importantly), higher lows! Left to its own devices, like the DJIA for example, an unmanaged portfolio is likely to have long periods of unproductive sideways motion. You can ill afford to travel six years at a break even pace, and it is foolish, even irresponsible, to expect any unmanaged or passively directed approach to be in sync with your personal financial needs.

Five simple concepts of Asset Allocation, Investment Strategy, and Psychology are summed up quite nicely in what I call “The Investor’s Creed”:

(1) My intention is to be fully invested in accordance with my planned equity/fixed income asset allocation. (2) On the other hand, every security I own is for sale, and every security I own generates some form of cash flow that cannot be reinvested immediately. (3) I am happy when my cash position is nearly 0% because all of my money is then working as hard as it possibly can to meet my objectives. (4) But, I am ecstatic when my cash position approaches 100% because that means I’ve sold everything at a profit, and that I am in a position to (5) take advantage of any new investment opportunities (that fit my guidelines) as soon as I become aware of them.

If you are managing your portfolio properly, your cash position has been rising lately, as you take profits on the securities you purchased when prices were falling just a few months ago… and (this is a big and) you could well be chock full of cash well before the market blows the whistle on its advance! Yes, if you are going about the investment process properly, you will be swimming in cash at about the same time Wall Street discovers the rally and starts encouraging people to weight their portfolios more heavily into stocks; the number of IPOs coming to market starts to rise exponentially; morning drive radio DJ’s start to laugh about their stock market successes; and all of your friends start to talk about their new investment guru or the 30% gains in their growth Mutual Funds. What are you doing in cash!

This is what I call “smart” cash, because it represents realized profits, interest, and dividends that are just catching a breather on the bench after a scoring drive. As the gains compound at money market rates, the disciplined coach looks for sure signs of investor greed in the market place: fixed income prices fall as speculators abandon their long term goals and reach for the new investment stars that are sure to propel equity prices ever higher, boring investment grade equities fall in price as well because it now clear [for the scadieighth (sic) time] that the market will never fall again… particularly NASDAQ, which could double and still not be where it was six years ago. And the beat goes on, cycle after cycle, generation after generation. What do you think; will today’s coaches be any smarter than those of the late nineties? Have they learned that it is the very strength of a rising market that proves to be its greatest weakness!]]>

One of the great mysteries of personal finance is: How are social security retirement benefits calculated? The computation itself is something of a mystery. It’s so complex that I’m not sure who could have dreamed it up. I am sure that most in Congress don’t understand it. In this article we’ll take an abbreviated look at what goes into the computation.

We will be concentrating on the method of computing retirement benefits in place since 1979. Before then a different, but equally bizarre, method was used. The changes were instituted in 1979 to help keep benefits more or less inflation-proof. The computation begins by determining a worker’s Average Indexed Monthly Earnings (AIME). The AIME is based on the worker’s social security wages or earnings from self-employment after 1950, but only up to the social security maximum for each year.

The worker’s earnings are then “indexed” by adjusting them for the average national wage increases. The purpose of the indexing is to state the wages in terms of the level of wages in the second year prior to social security eligibility. Generally you are eligible for social security at age 62, so we index to the year in which you turn 60.

Now that you have “adjusted” the earnings, you must next determine the average. Begin this process by determining the number of years after 1950 (or turning 21 if later) and before when you turn 62. Got that number? Great, now subtract five. (Why five? Beats me.) Social security calls this figure the “number of computation base years.” Now, go back to your indexed annual earnings and select the highest earning years until you have enough to equal the “number of computation base years.” For example, you began work at 22 and worked to 62. Your benefits will be computed based on the highest 35 (40 - 5) years of indexed earnings. Finally, total all the indexed years and divide by the number of months in those years. Congratulations, you have just computed the AIME. Have a drink…..or six.

If you thought you’re done, guess again. The amount of the social security benefit is equal to the Primary Insurance Amount (PIA). Fortunately, you don’t have to do these computations yourself. The Social Security Administration is happy to do it for you. Just get a Form SSA-7004-PC from your local Social Security Office, fill it out and send it in. In a few weeks the good folks at Social Security will send you an estimate of your benefit.

They will also send you a print out of your “earnings record.” Your earnings record is the amount Social Security thinks you made each year. It pays to check this periodically, say every three years. Mistakes are possible and those mistakes can cost you in social security benefits later on.]]>

Enter into the picture a man by the name of Coulson. Cromwell Coulson bought the stock quotation service, Pink Sheets in the late nineties and since then, he has been quoted a few times as referring to the Pink Sheets as the “Las Vegas of Wall Street.” And here’s why. Companies which are relatively small with little trading action being realized have virtually no appeal to the New York Stock Exchange.

The Pink Sheets lists not only the smaller companies but also the foreign stocks. The stocks aren’t listed on the exchange and are certainly considered very volatile stocks.

Day trading quickly became known as the investor’s way to gamble years ago. Now, with the growing popularity of the Pink Sheets, investors can really go double or nothing with stocks which are more than just a little risky to the investor who needs some excitement when they are building their investment portfolios.

What investors need to realize when choosing to jump on board with Cromwell Coulson, CEO of Pink Sheets LLC, is that not only are the stocks listed on the Pink Sheets listed there for a reason but there is a very real and legitimate reason that these stocks aren’t on the more notable exchanges. Either they couldn’t make it while on the big exchanges or they weren’t there to begin with.

As one might expect, Pink Sheet stocks offer investors, for the most part, mediocre financial information on the company. Further, bleak financials of the companies listed on the Pink Sheets are often camouflaged or extremely difficult to find.

What’s more, day traders who love to jump in and out of their chosen stocks and tend to love volatile stocks will be less likely to trade on the Pink Sheets with much success if they “play the market” on these stocks as they would the stocks on the NYSE, for example.

Day traders will find the pendulum swinging both ways on stocks found on the Pink Sheets. They’ll be drawn to them because huge profits can be earned. They will definitely need to do their homework and recognize the fact that if a stock is listed on the Pink Sheets—that fact alone shows a warning will be ever-present. And traders will be very aware of the fact that because of the difference in bid and ask prices of these over-the-counter stocks, dumping the stock on short notice may be a problem, if even possible.

Still, Coulson seems to have a growing over the counter business in these stocks which no one else wants. Companies such as Delta Air Lines and Volkswagen found their homes in the OTC neighborhood. And with Coulson’s determination to see more stocks on his sheets of pink, his stocks, no matter how volatile, may begin to be considered a pretty good gamble.]]>

For Starters
When asked to name an effective way of obtaining wealth, a common answer is: “Invest”. What is the problem with this answer? Well, the majority of respondents have very little or no money in their savings account. I see the beginning of wealth building in a different light. A saying that almost everyone knows but nearly no one applies is: “A penny saved is a penny earned”. In today’s culture it is definitely much easier to spend money than it is to save it. The average American is exposed to 247 advertisements in one day! Less than 5% of Americans have at least $3000 in savings and no debt. It is no wonder that most consumers struggle with saving money or grasping the concept of building wealth. We are mentally flogged with television and radio commercials, newspaper and magazine ads, billboards, signs, posters and even conversations. Whatever the method, it all serves one main purpose - to take your money and make it theirs.

Unveiling the Mystery
So with all those statistics and all that advertising, how in the world is it possible to build wealth? Well consider yourself ahead of the game already. By reading this article you are opening your mind to ideas and concepts which could help you to begin the process which is more than can be said for most people out there. A house starts with a single brick and the same is true with wealth building. You have to start with what you can and keep adding to it.
Why not jump in to stocks, mutual funds or other investments right off the bat? Life will continue to happen whether you plan for it or not. So plan for it. You must start with a lump sum of money in your savings account which has been referred to as an “emergency savings”. A good figure for this is $1000. You MUST pay your savings first, before anything else. If you do not, your savings will not grow (or it may not happen at all). This extra money will act as a soft landing for any financial falls that can and will occur while you pay down other debts that are road blocking your way to building wealth. You must realize though; this money is first priority but can not be touched - ONLY for emergencies. By following these 2 steps:
1) Stocking up your savings with $1,000 and then 2) Eliminating extra debts (with great fervor), you will prepare yourself for a much easier road to building wealth.

Making it Happen
You have to take action now or this whole savings thing will not happen. First, get a savings account. If you have one, find out what the interest rate is. Many have something like 0.25% to 1% (WHOOPEE!). Remember that you are not trying to make all your money in interest right now but since the money is going to sit you may as well look around. It is possible to land up to a 3-5% interest rate. Another option is a money market account to get a good rate although restrictions sometimes apply for things like early withdrawal fees and keeping a minimum amount in the account at all times. Secondly, as I stated earlier, take your savings off the top on payday. You have to make a painful change as well though. You may have to sacrifice some things to get that initial $1,000. This could mean no eating out or temporarily cutting out an expensive hobby. You also might want to try changing your phone company or downgrading your cable package. I hate this next idea but it is for a good cause: Drop your credit card payments below the minimum (JUST FOR NOW). Anyway, you get the idea. Cut some here - cut some there. Now, take all the figures you cut and add them together. This is what you will put in to your savings account until you reach $1,000. See, when the average person feels like they are getting ahead or even staying even, a setback occurs and sends everything spiraling downward. This is the hard part of building wealth and it is just the beginning (the first brick). However, without this extra money in savings you will tread water until you eventually drown, so stop thinking about it and start acting on it today.

The next step is paying off your debts quickly. An article which discusses this in detail is “Beating Debt with a Stick” and can be found at http://www.cleancreditonline.com/beating_debt.html.]]>

All of us aspire to some degree of economic security and none of us would be so critical of the wealthy if we had a shot at joining their ranks. One side of the legislative mouth encourages savings and investment while the other treats it with totally “unearned” disrespect. One wealthy political party wants us to hate anyone with indoor plumbing while the other (wealthier) one spends most of its time trying to protect its diminishing turf and powerful cronies. All levels of government view businesses small and large as their all-purpose Reserve Accounts and, as a result, both prices and taxes suffer from a terminal case of “downward stickiness”. Not surprisingly, in a DC crowded with 10,000 combative fiefdoms, nowhere can a PhD in dot connecting be found. We can change this!

It is likely that most of you are more familiar with the controversial Fair Tax Legislation than I am, but what I have found most shocking is just how thoroughly The Act’s refreshingly new ideas have been swept under the congressional carpet. Neither political party really wants to change the sacred IRC, and why are our media heroes keeping their heads in the sand on this one? Let’s squeeze some meaningful change out of the next administration. From an Investor’s point of view, implementation of just three elements of the Fair Tax would be an outstanding starting point, even without the more sweeping changes that the Bill addresses.

[The Fair Tax Act of 2003 was authored by Representative John Lindner and co-sponsored by 54 others. Its purpose is: To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.]

Now this is pretty heady stuff, for sure, but every bit as easy to implement as real Social Security reform would be. The three changes reviewed briefly below would be an excellent Phase One.

1)Eliminate the Corporate Income Tax, and all other nuisance fees and taxes that businesses must pay just for existing. Whatever any business is charged in fees, taxes, and mandatory assessments is translated into higher prices for goods and services… and at more than a 1/1 ratio. Governments need to look at businesses as employers and wealth generators, not as rateables. Lower expenses should result in lower prices and higher profits, and this would be comparatively easy to monitor for compliance.

Corporations would have more incentive to control their general expenses if such savings would actually make it to a bottom line that could be used to grow the business, compensate owners, and reward employees. More, higher paid, employees and more spendable (untaxed) corporate dividends are good for the economy. How many billions in lobbyist fees would be removed from corporate pricing formulae? With no income taxes or mandated charges to fork over, corporations could focus on growth and innovation. Investors would own more viable companies, selling more competitive products, to a more affluent population. Additionally, fewer jobs would be exported, more foreign companies would invest in the US of A, and GNP would rise at a faster pace. Rising profits would increase dividend payouts, stock repurchases, debt retirement, and employment opportunities.

2)Eliminate the Capital Gains Tax: I’ve often referred to taxes (or tax avoidance decisions) as one of two “Tails” that “Wag the Investment Dog”. Every year, millions of people go out of their way (with professional encouragement) to lose money on perfectly good securities. Those who take profits too soon are punished severely and those whose behavior is tax-wise may severely damage their investment portfolios’ future. Although it is clear that the Capital Gains Tax was originally designed to pick the pockets of those terrible folk wealthy enough to play the stock market for profit, it now inflicts considerable pain on all of us… particularly those who foolishly subscribe to the archaic Buy ‘n Hold investment (mismanagement) strategy. Times have changed, and the average investor is now a pretty average guy indeed, willing to build a future if Uncle will let him.

A Government that bemoans the population’s low savings and investment rates has only itself to blame, and Wall Street Institutions are happy to exacerbate the problem with their own financial pandemic of products, strategies, and tax deferral/avoidance schemes. Fair Tax advocates estimate that Billions of Dollars, Hours, and Antacids could be allocated more productively every year, just from eliminating this portion of the tax form preparation process… not to mention the trees.

3)Eliminate taxation on all forms of investment and Retirement income: Dividends, Interest, Rents, Royalties, Social Security, Pension, IRA, 401(k), etc. It just makes abundant sense, doesn’t it? Without taxation, interest rates, rents, and professional’s fees, just to name a few, could fall. Personal disposable income would rise and a much larger number of retirees would be able to live comfortably. Isn’t this what periodic IRC tinkering is all about? Wouldn’t it be cool if all of those different IRAs and self directed plans could be combined and relabeled: “My Untouchable Retirement Plan”? We would all save more and spend more if we had more to deal with.

No one expects a hundred million taxpayers to agree 100% on the final plan. I have problems with taxing education and health care spending, for example, and there is no doubt that displaced IRS bureaucrats will populate new compliance entities that monitor corporate operations. And most would agree that three separate sales taxes would be unacceptable. But real win/win/win change is in sight. We just need a positive leader with some…

Here’s my proposed 2006 (and beyond) Voting Resolution for anyone with even the smallest start-up IRA account: “I promise to never, ever, cast my vote for any incumbent, at any level of government and from any political party, that has not clearly demonstrated that the repeal and replacement of the existing IRC is at the very top of his or her political agenda.” It’s time to reinvent this wheel!]]>

“Don’t be lured by the recent gains, you will eventually face misfortune and lose everything!”

The entire town knew him as the inconsiderate contrarian and avoided him at all costs. It was his place in the community to doubt and his viewpoints proved unpopular to everyone. He disrupted their jubilant ways of life and distracted them from their daily routines. But, it was his explosive display of antagonism one particular morning that encouraged the town people to rethink their complacency.

On the morning in question, he paid a visit to the neighborhood health diner. The diner advertised itself as an alternative to fast food restaurants. As he sat patiently to place his breakfast order, he became disgruntled with the consistency of orders requesting “egg whites.” It seemed every patron ordered the same. Egg whites … egg whites … egg whites.

“Stop with the egg whites!” he told himself.

The contrarian, however, was an educated man and he knew the benefits of egg whites. The yolk contained a lot of unhealthy fat and cholesterol, but not egg whites. The high protein from egg whites provided the benefits of muscle building and weight loss. Remember though, he was the town contrarian and it was his obligation to propose a second opinion. As he contemplated the best way to introduce salmonella to the diner’s most popular topic of conversation, he had a revelation.

“Give me egg yellows!” he shouted rebelliously to the waitress. Every fork, spoon, coffee cup, and orange juice glass dropped. Silence breached the busy diner and the contrarian smiled with satisfaction. As the contrarian, he rejected the healthier egg white option.

With one statement of defiance, he disregarded all medical advice to limit egg yolks, he argued popular opinion, and he glorified the alternative. His personal entertainment relied solely on the responses of those he confronted and he laughed at the shocked expressions. Although the diner spoke about the ridiculous incident for years to come, some patrons began to deviate from the diet and ate the entire egg from time to time.

Most people find embracing the contrarian a difficult proposition because it goes against the tide of popular belief. Yet, there are times when one must consider alternatives.

Contrarianism has its benefits and disadvantages in the areas of investing and saving. It takes a delicate mixture of confidence, education, and control to make the theory successful. The contrarian investor often sells when the herd is fervently buying and buys when the herd is frantically selling. The contrarian recognizes the extremes of hysterical selling and overly optimistic buying. And to the contrarian, the genesis of a great investment opportunity occurs during intolerant and erratic market episodes.

Capitulation is an important concept for the contrarian to understand. It refers to sellers theoretically selling all positions as the market abandons its belief of an upward bias. In an effort to reduce further losses, investors sell positions at unreasonable prices and the market reaches oversold extremes. Some signs of a market capitulation include above average volume, negative mornings resulting in positive closures, and dramatic increases in mutual fund cash positions. For the market contrarian, exorbitant pessimism is an ally.

Arguably, the most popular capitulation event occurred in October of 1987, also known as Black Monday. In one day, the Dow Jones Industrial Average lost nearly 23% of its market price and devastated investment accounts worldwide. What a nice way to begin the work week. And although the United States avoided a recession and depression, the plunge resulted in widespread emotional commentaries. Potential reasons for the crash included programmed computer selling, unreasonably bullish investor sentiment, high stock valuations, and the weakened U.S. dollar.

Just as the town contrarian disrupted the diner, in October of 1987 the stock market temporarily swayed investor confidence. Yet, the next day, the Dow Jones Industrial Average rose almost 6% from its prior day close. By the end of 1987, the index posted an increase of about 11.5% from its October 19th lows, and on the one year anniversary, a gain of approximately 23% from the lows. Today, the Dow Jones Industrial Average price is nearly six times Black Monday’s closing amount.

To be a contrarian investor does not mean acting foolishly and blindly. It is important to realize every person has unique investment policies. A thorough review of your risk tolerances, time horizons, and financial goals must be factored into your overall plan. Consult your financial advisor for appropriate direction.

Contrarian investing takes into consideration crisis driven market moves. A contrarian watches for overabundant emotions of greed and fear. Yet, acting on the irrational theories of others is not enough. Review current market conditions and the reasons behind such moves. Fundamental analysis of your positions is another key component to a well diversified portfolio. A contrarian must understand the market place in full.

The market has a curious way of introducing doubt into the minds of its investors when many seem content with the current direction. It is important to stay alert of changes and consider alternatives. Setting realistic goals, adapting to changes, and remaining focused will also aid you in developing an appropriate strategy.

And when the market menu reads just one meal, remember you may have other choices to fill your investment plate. Choices that may assist you in understanding market volatility and thus create a healthier outlook for the future. Contrarianism is not a rule to enforce at all times, however it is an approach that deserves some skeptical attention.

As an investor, you should be aware of all your options and make logical choices. Then, one day you may order “egg yellows for my portfolio, please.”]]>