Should I Invest in Bitcoin?

Over the past few months I have watched bitcoin’s value rise exponentially. I had no idea what bitcoin was and never even heard of crypto currency a few months ago. But with the recent government and media attention crypto currencies have received, they have gotten everyone’s attention.

Crypto currency or more simply digital money is gaining acceptance quickly all over the world as it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has its own signature or private key. With its rise in value and popularity everyone wants a piece of the action. There are two main ways to make money with bitcoin. The first is a pretty straightforward method of purchasing the coin as an investment and hope that its value increases. The second is the process of “mining” bitcoins. Once a transaction has occurred they are then verified over the network by “miners” using complicated algorithms. As a reward for their work they receive transaction fees and/or freshly minted bitcoins!

From an investing standpoint there is a big risk/reward factor as this currency is relatively new and has no intrinsic value causing volatility and big price changes. A positive fact is that there is a huge amount of money invested in this and companies are signing on to use this currency so we have no idea when its value will go back to zero!

“Mining” also has a big risk/reward factor. In the beginning of bitcoin, you used to be able to “mine” with an ordinary laptop or home computer. But now as more people are doing it the difficulty and power needed to “mine” increases. Bitcoins have a maximum amount that can be minted (21 million). And as we get closer and closer to 21 million the amount of bitcoin rewarded for each successful “mine” gets smaller and smaller. Now “miners” looking to be profitable have to invest in complicated high tech mining rigs and there is still no guarantee they will be profitable or even make their costs back.

There is a third and safer option, though. In any sudden happening that promises riches the most lucrative venture is selling the tool that helps produce these riches. For example, in a gold rush it would be the shovel and in “mining” for bitcoin it would be mining rigs or powerful graphic cards. If you can produce these or even get your hands on some cheap you would make a considerable profit flipping them. Unfortunately, only a select few have the luxury of choosing this option.

With people flocking towards the riches dangling in front of them the scam artists are having a field day as well. Read articles, browse the forums, watch the bitcoin market, and research your costs and ROI before even considering investing anything. In my opinion, you should do this for a few weeks before putting any money into play. This is an extremely volatile market and an even riskier investment.

But in the end, I think it all boils down to if you are willing to take the risk of losing it all, to perhaps make it big.

Are you?

Finding The Correct Person To Help You Invest Your Earnings

For most of the folks who struggle to earn a decent living, saving money is important, and investing it in a systematic manner is even more important. People have to work for an entire lifetime before they can save enough to invest it for their retirements. Saving and multiplying their earnings, needless to say, is of paramount importance, and people often seek advises of more “experienced” people or financial advisors to guide them how to go ahead with their investment activities. That is where the basic problem lies – how do you find that perfect advisor who can help you earn a good interest over your investments.

The right kind of financial advisor

Financial gurus and experts are not that difficult to find. In fact, if you have the inclination, you can find them by the dozens. However, finding the “right” advisor may prove to be difficult. If you look at the entire issue in an objective manner, the basic question you face with is if a person is supposed to be a good advisor, how come he or she is “working” to make a living out of investing other people’s money? If a person is supposed to be brilliant in investment activities, why should that person make efforts to earn? Most people often misinterpret being an epitome of a good advisor. The fact is what we believe to be “brilliant” should be actually interpreted as being “experienced”. Advisors typically use their experiences and the knowledge they have gained over the years in investing other people’s funds in a lucrative manner. The truth is if you tend to think in a logical manner, you are familiar with the financial world, and you can differentiate between an asset and a liability, you in fact don’t need an advisor. You can be your best advisor. But everything said and done, if you really need a financial advisor, here’s how you can go about it.

How to find your advisor

Contrary to the belief, you don’t actually need huge sums of money to avail the services of a professional advisor. You could always try professional firms and companies which deal with investment activities, but it is not guaranteed you will receive any customized or special services from them. A possible way is to check the financial ratings of investment businesses before hiring them with your investment work. You could also check professional advisors over the internet as an option. Here’s what you should keep in mind.

• Verify the person’s track record. Try to find genuine success stories. Find how many families or individuals have actually benefited through the individual’s efforts. Check the past performance.

• What kind of investment policies do the advisors follow? It’s your money, and it always pays to be prudent before entrusting your investment into unknown hands. Have the person explain how he or she plans to invest your money in the correct venture, what kind of risk factors are associated with the policy, and how much surety is there of earning your profits.

• Check if they are registered professionals. Individuals who have a reputation and a certificate to protect will be more careful when dealing on a professional basis. Many counties and states require professionals to be registered with appropriate authorities before they can officially practice.

Factors to Consider When Choosing a Stockholder

Choosing a stockbroker is not different from choosing a stock. To get the best out of trading in the stock market, it is important to consider using the services of a professional stockbroker.

Many of the stockbrokers have been in business for many years and have all the relevant information that is required for making intelligent investment decisions. They understand and can predict the market trends better.

Therefore, they are better placed to recommend when to buy or buy stocks and which stocks to buy and which ones to avoid. If you are a beginner in the stock market, it is advisable to hire the services of a broker. The following are some of the things to consider when choosing a broker, including:

· Type of stockbroker

Stockbrokers are often categorized into 4 main groups: regular brokers, resellers, discount brokers and full-service brokers. Regular brokers often deal with clients directly, while resellers act as the main intermediaries between a larger broker and the client.

The full-service brokers play an important role in providing more services to investors, but for an additional fee. They do much of the work by providing investors with information and individualized suggestions.

· Reputation/reliability of stockbroker

If you are planning to trust some of your money to someone, it is advisable to first find out how reliable they are. Bank brokering divisions or larger security companies are often considered reliable options.

To know how reliable a broker is, you can find out from an established or experienced share trader about his/her experiences with a particular broker.

Alternatively, by reading online reviews you will be able to gather important information that can help you determine how reputable a broker is.

· Stock brokerage fee

If you are a beginner with limited funds, you want as much as possible to save on money. Therefore, you should consider a stockbroker who charges lower fees as opposed to one who charges a premium for services you do not need.

Although most of the brokers have somewhat similar fee schedules, it is not uncommon to find stockbrokers with a complex fee structure that makes it challenging to find out any hidden fees. Some of the brokers use the fee as the main item for enticing clients.

Therefore, if you find a broker with a fee structure that appears unusual it is important to verify the legitimacy of the broker. Make sure the fee structure complements your style of investment. If the rates seem too good, make sure to read the fine print for any extra fees.

The Risks Involved With Options Trading

Option trading can be a wonderful way to get more bang for your investing buck. But with those benefits comes some risks that are not found in other types of trading vehicles.

Buying options instead of owning an equity outright allows the investor or active trader the opportunity to control more of the underlying asset for a fraction of the cost.

For example, if you were to buy 100 shares of stock XYZ at say $30 a share, you would have to pay $3000 (plus commissions) to control that amount of stock.

On the other hand, if options are available for that stock, where each option being for 100 shares of stock (the standard for regular options), you would be able to purchase that option for just a fraction of owning the stock outright, and control the same number of shares.

The risk with buying options as opposed to buying the asset outright is that ownership does not expire, options do. Options are very time sensitive, and each day that goes by causes the option to lose some of its ‘time value’, which is a part of the premium you pay for the option.

Therefore, you could hold onto a stock indefinitely, but you cannot do the same with options as they will expire come expiration day. With buying options, you are in essence ‘buying time’ for that stock to make enough of a move in your desired direction to not only overcome the time loss but to also make a profit.

Why would anyone want to take a risk of having their investment become worthless in a matter of weeks or months?

Using our current example, suppose the premium to purchase an option of stock XYZ with 60 days left costs $3.00. At 100 shares represented, that would be $300 to purchase. Let’s also say that the option purchased is a 30 strike (at-the-money since that’s the current stock price).

If XYZ moves up to $40 a share, the owner of 100 shares of XYZ has made $1000, as that is $10 a share times 100 shares. That is a return of 33.3%. Not bad.

The owner of a 30 strike Call option (call options appreciate when price of underlying asset goes up) also makes $10 times 100 shares or $1000, but does so for only a $300 investment. That’s a return of 233%. That’s leverage!

However, if price does not move up enough before expiration, the buyer of the option can lose 100% of his investment (in this example $300) and have nothing to show for it, while the stock owner still owns the stock (although that isn’t risk free either, since the value of the stock may be lower than when purchased).

Options can be used to minimize risk in other investments based on strategies used to buy or sell them against other assets. They can be quite complicated to set up and not for the inexperienced. Failing to understand the risks of option buying and selling can result in devastating losses overall. But applied correctly, options can be one of the lowest risk trading vehicles for traders of all account sizes.

How to Become Wealthy – What the Rich Know About Trading That Gives Them the Upper Hand

“I don’t have much money now but someday I will have my picture in the paper”

– Warren Buffet –

Warren Buffet is a self-made billionaire; he is the 3rd wealthiest man in the world and he has been for many years now. In my opinion this proves that trading is a great alternative to create huge wealth. Of course when you do it in the right way.

In this article I am going to reveal what in my experience is the single biggest reason some people can’t make money in the market, and what the rich know that gives them the upper hand.

Markets move when they want to move

“Good profits simply are not inconsistent with good behavior”

– Warren Buffet –

Yes, you can trade to become a millionaire, but you need to have financial freedom before you even consider starting a career as a trader.

Having financial freedom means you have a reserve of money that will allow you to pay your bills no matter what. It also means that you don’t carry any debt.

The single biggest reason people lose money in the market is because they don’t trade with a clear mind. They have bills to pay, and the money they use to pay those bills depend on the profits they make through their trading. This forces them to take excessive risks, and to trade with bad timing.

Let’s follow the lead of the greatest investor of all times. Even though Warren Buffet is a billionaire he lives in the same house he bought for $31,500 dollars in 1958. He drives the same car he bought ten years ago, and his annual paycheck is 100,000 dollars.

This means that even if he loses billions his lifestyle will not be in jeopardy. This gives him a clear mind to trade. And this mindset allows him to find opportunities that those traders who have their emotions tied to the market will never see.

Markets move when they want to move, and you need patience to make money in this business. Good profits are not inconsistent with good behavior. So, as long as you have a system with positive expectancy, in other words a system that makes more money than the money it loses, and you trade it consistently, you will succeed in this business.

One final piece of advice…

If you want to become a full time trader, first you need to learn to spend your money wisely. This will allow you to reach financial freedom very fast, and give you a solid ground to amass a huge fortune.