After a stock has had a wonderful run, it is natural to suspect that there might be a period of consolidation. You would like to lock in your profits but also allow the stock to keep following its current trend if that is what is going to happen. You can accomplish both by purchasing a put option. Simply select a put option that will guarantee that you will receive a profit. You will probably want to select a put option that expires in 2-3 months giving the stock an opportunity to consolidate and then begin its rise or to decide that it is done and decline again. To purchase such a put option will likely cost about 10% of the current stock price meaning that your 30% gain would be locked in at about 20%. A 20% gain is nothing to be ashamed of.

But, if the stock decides that it wants to continue the uptrend and gain another 50%, you still own the stock and can participate in the major profits. You don’t have to worry that you sold too early. Nor do you have to worry about giving up the gains you already had while continuing to roll the dice. It is truly the best of both worlds and a strategy that every serious investor should consider.

See my other articles on put options: http://hubpages.com/hub/Use-Puts-to-Lock-in-Profits and http://hubpages.com/hub/Generate-Monthly-Income-by-Selling-Puts. I also have many other articles on stock and option and gold investing.

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During the last few years, investors in the U.S. have been actively investing and making significant returns in reverse-takeover stocks. Although reverse mergers have been in existence for decades, it has become increasingly common for a foreign private company to use this route to become a domestic issuer. It’s easier and cheaper. In the case of Chinese reverse mergers, this often results in Chinese stocks with almost all of their operations in China, while their securities trade in the U.S. This year is turning out to be a disappointing year for investors in reverse-merger stocks, as events like the cautious stance of the U.S. Security and Exchange Commission (SEC) for such investors, the NASDAQ’s proposal of new listing requirements for reverse-takeover stocks, and Moody’s Red-Flags report on China-based companies has dampened this speculative area. According to the Public Company Accounting Oversight Board (PCAOB), about 159 companies from the China region listed on U.S. stock exchanges by engaging in reverse mergers between January 2007 and March 31, 2010.

But, as a result of the announcements on Chinese companies being involved in fraud, the activity in reverse mergers has been negatively impacted. Only 37 reverse mergers were completed during the second quarter of 2011 (down 50% over the same quarter last year), according to the Reverse Merger Report. To be clear, the decline is not only due to the decline in the activity in Chinese deals, but also the non-China deals. During the first half of this year, only three Chinese Alternative Public Offerings (APOs) were completed, each raising about $4.0 million. The weakness of the reverse-takeover stocks is also evident from the poor performance of the Bloomberg Chinese Reverse Mergers Index (CHINARTO Index), which is a market capitalization weighted index that tracks China-based companies that trade on U.S. exchanges following reverse mergers. As of August 12, the index is down 50% since December 2010, compared to an S&P Index decline of 6.3% during the same period. Other indices like the TCM and TCO are down roughly 47% and 73%, respectively. In terms of valuations, CHINARTO is trading at a Price to Earnings (P/E) ratio of 4.9X and a Price-to-Book (PB) ratio of 0.6X, which is cheaper than the S&P’s PE of 12.3X and PB of 1.8X. But the risk is extremely high in Chinese reverse mergers. At this juncture, investors are bearish towards equities, especially reverse-takeover stocks, due to the enormous volatility in the share prices. The last few months have been a harvest season for the short sellers in the Chinese reverse-takeover stocks and this didn’t required one to be a “guru” in selecting which ones to short.

The majority of reverse-takeover stocks have taken a hit following the SEC announcement irrespective of the strength and growth prospects of the business, solid financial performance and clean reputation of the management. This gives an opportunity to investors to be selective and invest in such firms, earning higher returns. The Chinese economy continues to show strong gross domestic product (GDP) growth at near 10%, so it may be an opportune time to accumulate some Chinese stocks selectively. Retire on This One Hot Stock! This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today. Get your FREE report on our top stock pick immediately here.

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We have worked with hundreds of investors over the past few years.Many of them have not received the results they wanted – either on their own or with other Real Estate Programs.When we sit down and review their Investment History,we frequently see that their overall approach to Real Estate Investing needs to be adjusted.

All too often,we determine these individuals view Real Estate Investing as a gamble or a game of chance.In reality,Real Estate Investing can be as stable and predictable as opening up a world class franchise.The key is to focus on the right things.

Outlined below are a few questions you should ask yourself to help determine if you’re looking at Real Estate as a gambling venture or an investment business.

Do you focus on appreciation over cash flow?

Real estate has four distinct benefits illustrated by the CATP acronym:

Cash Flow

Appreciation

Tax Benefits and

Principal Paydown.

(If you like,go back to another Wealth Tactic for a more in depth explanation of CATP.)

The most secure returns come from Cash Flow and Tax Benefits.Principal Paydown is less secure,but offers some stability to an Investor.

Appreciation is least secure and the most risky (i.e. volatile) component. You can make some great money with Appreciation, but if you time the market incorrectly it can ruin you.Looking to make money in Real Estate Investing through Appreciation alone can be risky.Too much risk equals gambling!

Do you talk and think like a gambler?

Gamblers use phrases and terms like “bet”, “house money,” and “chance.” Have you ever thought, “I’ll bet a little on the really cheap house and see what happens?” Or used leverage in a way where you’re thinking about “house money” when you refinance and cash out? If so, then you may be taking the wrong mindset – the gamblers mindset – into real estate investing.

Do you focus on probability vs. research?

The best place to find a gambler is in a Casino. And you have probably noticed that Casino owners live a lot better than gamblers!

Why?

Most casino games are in fixed rule environments – there are set inputs and outputs.And the rules themselves are skewed to the Casino.Because there are only so many results that occur from blackjack or craps for example, you can only win by devising a strategy based on probability and betting theory.Without the strategy,it’s just expensive entertainment.Even with the strategy,you will be lucky to break even.

There are parts of Real Estate Investing that are even riskier than a night in Vegas.After all,you can lose more than you bet.If you have to foreclose on a house or pay back taxes,or several other unforeseen events, you’ll be out more than you invest.This is because Real Estate is not a fixed input/output system.There are a tremendous number of different things that can occur in a Real Estate Investment.

But unlike those casinos, you can use the “rules” to actually help you win more than you lose.

Remember,you have a very strong level of control over the performance of your investment,especially if you focus on the Cash Flow benefits of a property.While you can’t change the market and you can’t change (or very rarely) the available team,you can change the rehab level,tenant selection criteria,rents,marketing,tenant management, etc, etc.This control creates a level of safety and wealth if applied correctly.

If you research the right metro areas with the right fundamentals and if you research and find the best teams (acquisition,rehab,management,legal), you will have significantly decreased your risk.Research trumps probability mainly because a good property in a bad area is still doomed,but a bad property in a good area can do pretty well.

An investor who remembers and applies this concept will take gambling and all of its risks out of the picture.While gamblers will look to score on an investment with little or no research about the market or CATP, an investor will focus on cash flow, and sound market research – only working in the best markets to get the best results.

Real estate is historically and will continue to be the greatest wealth builder available as long as you approach it with the right mindset – as an investor.Once you stop thinking like a gambler and start thinking like an investor you will be making better decisions and getting better results!

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The stock market is usually portrayed as where someone smart can make a good amount of money. So why not have a financial wizard manage your investments? This is the sales pitch of mutual fund companies. Unfortunately, things are not so simple. Many funds will be able to brag about their investment returns over the past few years. But these numbers are often due to luck. It is very important to note that very few managers outperform the market in the long run (over ten years).

Lets not forge about fees. All mutual funds charge an annual fee percentage. This is often referred to as the expense ratio. Some also charge fees to compensate brokers for marketing them (front-end load funds). These fees might seem small in the big picture. But remember that very few funds outperform the market in the long run. And the effects of compound interest makes these small fees add up to a large number over time.

This is why retail investors are increasingly favoring no-load index funds. Instead of focusing on beating the average these funds try to make the average while keeping fees extremely low. And since the vast majority of funds underperform the average in the long run, the retail investor that invests in these funds will outperform is less informed peers.

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Investing in penny stocks is not for everyone. From among those who read this, there are some who’ll make it. There are those to whom we recommend something else.

This is not being snobbish or arrogant. In fact, to say that up front is the fairest statement that Equity Trading Alert can ever make. It’s fair to you, most especially. Of course, it’s also fair to us.

Why? There are ups and downs in penny stocks. That’s a given. Call it a roller coaster ride if you will. Some will ride on it. Some simply won’t, even for a thousand dollars.

It isn’t about genes. It is about preference. There are people who are risk lovers. There are those who are risk averse. Then there are those who are risk tolerant.

Which one are you?

Lovers of risk are like those who go to a casino. They pick their cards, numbers or slots from some form of inspiration. Then they place their bet and pray.

The problem with risk lovers in stock trading is that they may lose (as most certainly everyone will at some point) and also lose the lesson. They could easily end up doing the same things over and over again and expecting different results. That, by the way, is the definition of insanity, according to Albert Einstein.

Equity Trading Alerts has gathered the parameters of choosing a good stock, when to buy and when to sell. These parameters have been programmed into its penny stock trading robot. The Robot doesn’t gamble. It wisely votes.

People who are risk averse simply shy away from risk. They’re not wimpy people. They simply want to make sure that they preserve their estate. A retired person for instance would want the bulk of his money to be in a secure placement. This person is risk averse as far as this portion of his estate is concerned.

Equity Trading Alerts endeavors to give its subscribers the closest there is to a “safe” and “secure” investment. It does this by carefully studying each stock. It then recommends the most profitable stock that not only preserves your money, but also makes it grow fast.

People who are risk tolerant do not love risks. In fact they want to minimize it. Neither are they afraid of risk. In fact, they study every aspect of it. The overriding goal of a risk tolerant person is to make money, thrill or no thrill, period.

This is precisely why the Equity Trading Alert Newsletter is perfect for risk tolerant people. The Newsletter publishes top picks of the Penny Stock Trading Robot every week. We save the risk tolerant person from the agony of going through the overwhelming process of analyzing and comparing various stocks.

Check it out here: www.equitytradingalert.com

With Equity Trading Alert Newsletter, all that the risk tolerant person has to do is verify the recommendation, place his investment and know — not pray — that his investment will grow.

Hundreds of start up stock investors have already profited from the Newsletter. It can be yours for free for a limited period or until we decide to close it.

Grab it while it’s open and be the next to profit, big time.

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However, there is more to an investment than just speculating where to put your money and waiting. There is the journey and lots of people tend to ignore the fact that to make wealth you have to experience a journey. You need to go on a trip and that trip is full of many surprises and lots of ups and downs.

The Cool, Calm, Controlled Investor

If you are a calm, cool and collected investor you are prepared for your journey. You know and understand that you will have good days, weeks, months and years and you also know and understand that you will have bad days, weeks, months and years. But you will be prepared for this and accept this. You are focused on the end result. During turbulent times you stay calm. When the boat is rocking and you don’t jump overboard. You hang on to the side and appreciate it when you come back into calm waters.

You hang on to your investments. Any short term gains and losses that are experienced throughout this journey are less relevant to you. You don’t sell when you have made a few dollars to quickly reap a short term profit and you don’t sell when you see your value dropping in bad times. You expect this to occur and you remain strongly focused on the benefits you will see when you achieve your end result and the wealth you will have one day down the track.

The Stressed, Anxious, Panicked Investor

If you are like a lot of people though, you find it very hard to remain cool, calm and controlled when you invest. Despite your best intentions, the slightest movement in the price of your investment sees you anxious to sell and to take the profits from any short term gains or to take flight and pull out after experiencing some short term losses. You are now focusing purely on today and have forgotten about your longer term plan and the journey you are taking to build up your wealth for the future.

Unfortunately there are dangers to these sorts of knee jerk reactions. People who have been through an unpleasant investment experience and lost money, generally retreat away from wealth creation all together. Doing this means they miss out on future opportunities as they won’t have their money invested today ready to build wealth in the future to meet their long term goals. They also carry around a lot of negativity telling everyone they meet that investing is all too hard and too dangerous.

People who have made quick money are also in danger. Their expectation of investing is all sweet and rosy. They are likely then to make irrational decisions and take greater chances with their money in the expectation that their previous experience will be repeated. The danger with this is investment journeys aren’t all uphill and these investors won’t be prepared for the falls when they come along. They are too focused on today and making money overnight rather than remembering they were on a journey today to make wealth for tomorrow.

What sort of investor are you?

Are you able to ignore your journey to making wealth and ride out the good and bad times? Do you tend to focus on the short term or the long term? Do you count your losses / gains regularly? Do you forget your end goals and what it is you set off to achieve or do you remain focused on these? You can see it makes a huge difference if you are prepared for your journey and can understand the sort of experiences you will have as a long term investor.

Detective Heather Wood is Managing Director and writer for Money Detective Pty Ltd. – http://www.moneydetective.com.au/about-us/meet-the-detective-team

Money Detective can help you with all of your money troubles. From our website full of factual information and articles, to our one on one personal money coaching, Money Detective can help you with all aspects of money management. Sign up for our Newsletter today and get yourself 6 free Money Clues http://www.moneydetective.com.au.

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However, there is a relatively substantial and growing contingent of market participants and economists who believe that the economy has entered a “new normal”, which involves considerably less debt and leverage in the system. That goes for both corporations and consumers. These people cite low interest rates and encouragement of homeownership for all by our government as some of the main causes for the blowup of the debt bubble in 2007 and 2008. And they go on to say that this type of debt fueled economy is not coming back for a long time because of the destruction caused in 2008 with the threat of the financial system unraveling. Instead, a new normal has arrived, consisting of more government intervention in and regulation of the financial markets, coupled with a scared and cautious consumer. They say this because the psychology of the average person on Main Street has changed, after seeing his/her investment portfolio cut in half for the second time in less than a decade, the value of his/her home decline dramatically, and perhaps even his/her job disappear.

Against this dichotomy, financial markets (and the stock market in particular) play a large role in validating or falsifying the claims of these competing groups because the markets have a large influence on the collective psyche of the nation. Currently the stock market is making new highs for 2009, several pieces of economic data have improved, and consumer confidence is back to levels last seen just prior to the start of the recession. Obama also just reappointed Bernanke as Fed Chairman, a few days after a recent financial headline stated “Bernanke Saved the World”, and the President claimed that Bernanke’s “creativity” helped him to prevent another Great Depression.

But the American people have seen this movie before. Back in 2006 and 2007 Bernanke claimed that the problems in the housing and subprime markets were “contained.” Everyone saw how that claim turned out. Then in the summer of 2008, Henry Paulson claimed the financial system was “sound.” The American people again saw how accurate that statement was. So it appears that those officials responsible for overseeing the largest economy in the world were either not able to properly assess the dangers in the system, or they were not telling the American public the truth. Whatever the case may be, given these missteps, people should turn to history before merely taking the government at its word. One only need look back to the famous 1930 quote by Herbert Hoover in which he assured everyone that things would return to normal, only to see the country subsequently suffer an entire decade of economic depression. It therefore seems that, less than a year after the most recent crisis, a bit more time must pass before announcing that everything is back to normal.

What does this all mean for the average investor? It means that the potential exists for more pain ahead, especially after a 55% rise off the March 2009 lows (which at the time was a 58% decline from the October 2007 high). It also means that investors should seek out asset classes that will benefit from the government’s ever-increasing role in the financial markets and economy. Accordingly, based on the most recent Federal Reserve meeting, the Fed provided little indication that it was ready to withdraw the easy monetary policies it has used to combat deflation. This type of language suggests that the Fed will continue to keep interest rates low and expand the money supply whenever it feels necessary to improve liquidity. These types of measures will continue to put pressure on the US dollar and benefit the dollar denominated gold price the ultimate benefactor of money printing. In fact, gold and mining companies leveraged to the gold price stand to perform particularly well in this type of environment, as investors seek out a safe haven from the fiat currencies created out of thin air. So the next time one hears the government claim that the coast is clear, he/she should remain skeptical and consider those areas that will benefit from a rising gold price.

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As knowledge and competence about forex trading and the global foreign exchange market in general becomes easily accessible through the advancement of Internet technologies, it begs the question – should the average investor get into foreign exchange investment opportunities?

Undoubtedly, forex funds are high yield investment instruments. Compared to traditional investments, foreign exchange trading tends to provide considerably greater returns. This holds true for all forms of forex market instruments including Spot Forex, Currency Futures, FX Option, Forex Swaps and currency-based Exchange-Traded Funds.

The average citizen however are less exposed to high return investment products and are largely able to access only common conservative investments such as bank deposits and bonds. For most people high yield investments like mutual funds and hedge funds are by and large too strange, too costly in terms of required capital and much too risky. Indeed high yield equates to high risks in the world of investments.

Nevertheless, more often than not, high yield investment opportunities create the wealth for investors rather than the average bank deposits and bond instruments. Commercial low yield investment products usually return anywhere from 1% up to 8% only. In contrast, it is not uncommon for high return investment instruments to yield double digit percentages of returns. High performing forex funds for example may average at 15% and may reach up to more than 30%.

This greater rate of return is enough to motivate novice and small-time investors all over the world to include foreign exchange funds as part of their investment portfolio. Apart from its global accessibility, these funds present a unique advantage over other high return financial instruments. Usually, these forex investments require minimal capital investment.

There are forex funds that can get an investor started at US$200. There are even a few funds that welcome amounts as small as US$50 for beginning accounts. Of course the high yields are more obvious with higher account levels which may require capital of about US$2,000 or more.

While the performance of these foreign exchange investments can be truly encouraging even during these tough economic times, still the risks associated with big investments remain. As such, only surplus or risk capital should be placed into high yield investments.

That said, forex funds are ideal stepping stones for the average investor to diversify and include high yield investments to their financial portfolios. Many people around the world are doing just that. Whereas twenty years ago the global forex market volume was only about US$500 billion, in recent years the daily turnover volume has been estimated to be over US$3 trillion.

One factor that can be attributed to this enormous growth in the foreign exchange market is the increased participation of a huge number of new and small investors as well as seasoned investors through forex funds and other similar forex investments powered by technologies on the World Wide Web. This also shows that getting into foreign exchange investments, while carrying high risks, are also highly profitable and should be considered with care by long time and aspiring investors.

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