Wednesday, November 25, 2015

How MetaTrader 4 Can Help You Trade Successfully

MetaTrader 4 is the world’s most widely used forex trading platform, with thousands of individuals and corporations all over the world using it to speculate on foreign currencies. If you’re in the market for a new platform, then you’ll probably want to know what all of the fuss is about. After all, if everyone else is using it, then shouldn’t you be using it too?

One of the major reasons for such widespread use is language and communication. MT4 is available in all of the most widely spoken languages, so it’s the go-to platform for people everywhere, rather than being tied down to just one or two locations. There are also built-in communications tools so that traders can talk to others without ever leaving the application. Many other platforms have copied this approach in an attempt to offer social trading, because increasingly there’s a community element to forex, mainly because the market is so liquid. There’s no point being competitive with your best trader friend, because the market is too large to make a difference.

Security is clearly going to be a major concern for anyone transacting money through applications, which is why the developers at MetaQuotes, the company behind MT4, have ensured that their platform is one of the most secure there is, incorporating all manner of encryption techniques and IP masking. If this is one of your biggest concerns, then MT4 should certainly be near the top of your list.

Technical analysis is one of the major schools of forex trading, and because it looks for patterns and signals, it can theoretically be done with computer algorithms. As a result, expert advisors (also knowns as forex robots) are scripts that can be run to trade automatically. Not all platforms allow this, but MT4 is the world’s biggest provider of this functionality. There’s a huge community of both EA developers and day traders surrounding it, and if you think you’d like to get involved, then it really isn’t worth looking past MT4.

There are all manner of other little reasons that make MT4 the choice for most traders, and the only way you’re going to be able to find out if it will make you a better trader is by trying it out for yourself. Oanda offer a free demo, so that’s a good place to start out if you’re not sure.
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Tuesday, November 24, 2015

Is gold a good investment these days?

Despite the current low price of gold, long-term investors are piling into the commodity in the belief that the market has bottomed and the only way for the precious metal is up.

Indeed, investors bought $10 billion worth of gold coins and bars in the last quarter, says the World Gold Council (WGC), with individuals accounting for 26% of that demand - higher than any other institution or central bank.

The price of gold is currently trading at its lowest since February 2010 as traders prepare for a rise in interest rates from the US Federal Reserve.

That's because when interest rates rise, the cost of borrowing hits the price of gold since it makes other investments appear more attractive. A rise in interest rates will also increase the value of the US dollar and push down enthusiasm and prices for gold.

Factors that are driving the demand for gold

However, there are also a number of other factors that are driving the demand for gold.

The WGC says that Austrian and German investors are particularly investing in large amounts of gold because of continuing fears over the Greek economy. Investors in Eastern Europe are also putting their faith in the historical safety of gold as a valuable commodity.

 Figure 1* chart (supplied by AnyOption)
Demand for the commodity rose by 8% in the last quarter though the price per ounce is down around 12% on this time last year.

The director of market intelligence at WGC, Alastair Hewitt says that investors are thinking long-term when buying gold - generally between five and 10 years’ time for their investment to realise their potential profit.

In addition, there are more ways for people to buy gold, for example in the UK the Royal Mint has a range of gold products that make it easier for investors to buy the commodity.

This has helped demand for gold in Britain rise by 67%, or £60 million, however this is only a small market when looked at globally.

Demand for gold is muted

Around the world, demand for gold is muted - especially from India where a heavy monsoon season has dampened enthusiasm from farmers who tend to invest heavily in gold at this time of year.

That's not all, increasingly investors in gold are becoming wary and last quarter exchange traded funds saw an outflow of 66 tonnes of gold.

For most investors, gold is still a crucial way of diversifying their investment portfolio but they need to be aware that its value very often does not move in line with other investment classes such as property or equities.

For those looking to invest and cash in on potential gold price rises, a lot is dependent on whether the Fed decides to increase interest rates and many analysts are pointing to this occurring in early December which means that in the short term gold prices will be pushed further downwards.

As the price hovers around $1,080 per ounce it appears that many investors are sitting out of the market waiting for an interest rate decision and the price could, in all reality, reach as low as $1,000 per ounce before bouncing back. Compare this to the $1,900 peak in 2011.

Gold is a good investment these days

However, investors who are wondering whether gold is a good investment these days, need to bear in mind two potential issues that will affect prices.

Leaving aside the question of a US interest rates rise, there are some gold analysts who believe that the price of gold has actually bottomed and will not fall any further.

Secondly, gold is seen as a safe haven for investors and with the growing political turmoil around the world, particularly after the Paris attacks recently, the potential for gold to rise quickly in the short-term grows every day.
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Thursday, November 19, 2015

Preparing Financial Retirement Plan

The simple truth is that it’s never too early to start planning for your retirement, because there’s a very good chance that it will constitute a significant portion of your life, and you want to be able to live comfortably through it. Only through the proper planning and consideration will you be able to retire with the money you want so you can continue to live a great life. With this in mind, let’s take a look at how you go about planning for the day you no longer have to work.

Step 1: Set Goals
You can’t be successful in your journey if you don’t actually know what you are aiming for. Consider exactly where you want to be financially when you retire, and indeed, when you want to retire, because this will be impacted by finances too. If you’ve only just started out in the world of work, then this might just be a rough plan to retire at state retirement age, and have a good monthly income, but later in life you might have a specific monthly income you want to achieve, or perhaps a lump sum that you’d like to amass.

Step 2: Consider Your Strategy
Most people will do exactly the same thing when it comes to retirement planning, and that is that they’ll simply pay into their company pension plans, and take whatever it is that the government gives them too (this will vary from place to place). This is not always the most effective or lucrative thing to do however. Sometimes you’ll also need to pay extra into your pension, save money in a bank, and perhaps also consider an investment portfolio. Set all of this out with a defined plan, which leads us onto the final step.

Step 3: Putting the Plan into Action
You now know what you want to achieve, and roughly how you’re going to do it. It’s now time to put the plan into action by actually doing things like setting up a savings account and establishing an investment portfolio. You may well find that it’s better if you get help with this part, especially if you’re considering investment, a wealth management company will be able to do most of the legwork for you.

There you have it – retirement finances can seem daunting at first, but it’s all about setting goals, defining a plan, and getting help if you need it.
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Saturday, November 14, 2015

8 Roth IRA Mistakes to Avoid

Roth IRA Mistakes to Avoid
When saving for retirement, a Roth IRA offers the distinct advantage of simplicity. Although contributions to a Roth IRA is not tax-deductible, you can compound your investments and withdraw your money free of taxes, and you are not required to withdraw a minimum amount when you retire. Annual contribution limit is $5,500 ($6,500 if you are over 50). However, despite these benefits, investors can also encounter potential pitfalls and incur unintended tax liabilities. 

Here are the eight common Roth IRA mistakes to avoid. 

1. Not maximizing (or not contributing at all) your Roth IRA contributions per year. If you contribute the maximum of $5,500 a year for 30 years assuming an annual investment return of 5%, you can make $1.1 million in 30 years. Let us say, you hold back and contribute only $5,000 per year, the difference of the $500 per year at a 5% return for 30 years due to compounding amounts to almost $100,000! Also, if you earn enough money to cover the Roth IRA contributions for you and your non-earning spouse, you can max out the contributions each year for both of you.

2. Avoid contributing because you exceed the earnings limit. The IRS prevents high earners to contribute directly to a Roth IRA – in 2014, the earnings limit is $191,000 for a married couple filed jointly and $129,000 for single people or the head of household. One way to circumvent this problem is to contribute to a Traditional non-deductible IRA and then promptly convert to a Roth IRA before the cash earns any returns or else you will be subject to mandatory minimum distributions and ordinary income taxes upon withdrawals.
3. Contributing too much. If you contribute more than your allowed amount, you can incur a penalty of 6% per year on the excess contribution. For example, you forget that you have already contributed earlier in the year, or you continue to contribute even after age 70 ½ or for a diseased individual. You can resolve this by taking out the excess money before filing your taxes or carrying forward the contribution to the next year with proper documentation to the IRS.

4. Breaking the rule for rollover. You can move from one IRA account to another or take distributions from a 401K account after you leave a job without incurring taxes as long as you do this within 60 days. Starting 2015, you can do this rollover once during a 365-day period, not a calendar year. More importantly, you can only use this 60-day rollover once per year even if you have five IRA accounts. If you break the rule, you can lose your entire IRA benefits. 

5. Messing up the rollover. Avoid taking the money out from one IRA account to yourself before you roll over to another. It is best to do a custodian-to-custodian transfer. However, you have to be meticulous about the transfer to make sure the money is actually rolled over into the correct IRA account and not a regular investment account. Otherwise you will lose the entire IRA tax shelter.

6. Not knowing the order of Roth IRA withdrawals. Normally, you can withdraw your original contributions and conversion amounts from your Roth IRA tax-free and penalty-free when you reach age 59 ½ and provided you wait for five years. However, each IRA conversion you make is treated separately and is subject to its own five-year waiting period, or you will incur a 10% early withdrawal penalty. 

7. Not paying attention to fees and investments in the IRA account. Discount brokers typically charge no fees when hosting your Roth IRA account and so make sure you do not pay any annual hosting fee. Also when choosing your investments in the IRA account, think about the expenses you are paying in mutual funds. Go for no-load mutual funds or low-cost exchange-traded funds. Also make sure you track regularly how your investments have done over time (at least once a year) and rebalance among cash, stocks, and bonds periodically. Also check whether you have the right mix between value and growth stocks, domestic versus international investments, to make sure you reach your financial goals upon retirement. 

8. Forgetting to take required minimum distributions (RMD) from an inherited Roth. If you are lucky enough to inherit a Roth IRA from someone who is not your spouse but forget to take the RMD as per the IRS rules, you can still incur a penalty of 50% of the money not distributed. Seeking advice on an inherited Roth IRA will save you headaches down the road.

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Wednesday, November 11, 2015

Real Estate Investing for Beginners

The housing crash has made it possible for you to invest in really attractive homes without having to spend a small fortune and many investors are making the best of the situation. If you want to get a share of the real estate pie but lack the knowledge and experience to go about it with confidence, we are here to help. Here are a few points you should know about the two ways in which you can make this investment.

Direct purchase of property

The most evident way is to buy a house or other kind of property directly from a seller. If you can make a substantial investment, you may even be interested in owning a small apartment complex. If the home or apartment complex is in a good location, finding tenants for the property is easy and you can demand good rentals from them too. Make sure that you comply with fair housing rental regulations, building code requirements and other legalities. Also factor in repair and maintenance costs that you will have to bear before you invest in property.

Investing in REITs

Another way to own real estate is to invest in a Real Estate Investment Trust or REIT. With these you buy shares in a portfolio of properties. REITs give you an opportunity to invest in real estate that may be unaffordable to you otherwise. For example, buying a sky scraper office complex in Manhattan is impossible for you but buying into an REIT that includes this property may be a viable option. In addition, REITs eliminate the hassles of managing maintenance and tackling tenants that you cannot avoid when you own a home or apartment complex that you have let out.

Points to keep in mind with real estate investment

Remember that real estate is a huge asset and a substantial portion of your savings is going to be locked up in it for a fairly long term if you want to make good returns on investment. It is not advisable to do your investing without taking adequate care and giving enough attention to the task. These are some points to keep in mind before investing:

·         Do some research: Whether it is identifying a good property or the right location to buy your home in or a reasonable price to agree upon, doing your homework before making your purchase is a must. After all, you do not want to end up pouring your hard earned money into a property that cannot yield the returns your expect.

·         Be patient: Real estate is typically a medium to long term investment so expecting your property value to soar overnight is simply not a good idea. You may get pressured into selling the property too soon, before it has had time to increase in value. Make a plan beforehand about the time period that you are looking at for your investment to give you returns and once you make the purchase, remain patient until you are sure to get the best returns possible. 

·         Don’t make emotional decisions: It is easy to get emotionally attached to property that you are looking to buy but allowing the emotion to sway your judgment can be a fatal mistake in real estate investing. No matter how appealing a home may be, it is definitely critical to look beyond the appearances and check if the house really makes a good buy considering its age, its condition, location, features, price and other aspects.  If you cannot make an objective decision, call in a  friend or relative who can tell you whether the property makes a worthwhile investment for you.

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Saturday, November 7, 2015

Is It Possible to Clear off Credit Card Debt Faster?

Of all debts, credit card debt is cancerous. With high interest attached, it seems to have no end. When you start paying it off, you will feel that it will take you a rebirth before you can manage to get out of the hole. I was in the trap once and know how much difficult it is to jump out of the quagmire.

Still it is possible! It may sound like a ray of hope for some while many will struggle to believe in the seemingly unbelievable talks. It’s not rambling talks as I have faced the problem and conquered the same. Even if you have mountain of debts, you can clear them all if only you dare to stick with a workable plan come hell or high water.

I racked up $2000 on my credit card and now I am a debt-free person. If I can, you can too!

Here are few simple ways by following which, you can pay off your credit card debts faster and guide yourself back to your lost financial freedom. But before applying them, do first thing first.

Open talks with Credit Card Company
You approached them while applying for credit card and this time, you have to do that but for a different reason – to get interest rate lowered. Many debtors are in fear of hearing a resounding ‘NO’ and so don’t request for interest rate negotiation. It is the worst case that you will hear ‘NO’ but what if they say ‘YES?  

Remember the company is also willing to get their debts cleared faster and most of them agree to accept a lower interest rate. And if your credit score has improved since your first taking the card, you have a greater chance to enjoy a lower interest rate.  

Now let us turn attention to the strategies

Pay more than minimum
Suppose you owe a lot on credit card but find a larger chunk of your money evaporating even before you can set aside the sum for payment. Repayment period will be dragged, slapping you with more interest to bear. Set aside a figure more than the minimum payable amount. Promise to yourself that you will not touch it and manage with the rest.

That will save you from impulsive purchase and skew a considerable amount towards credit card payment. If your payment exceeds the lowest bar, it will go towards lowering balance on credit card and small balance implies that debts will be cleared faster.

Consolidate & Conquer
Consolidation is also possible for credit card debts. If you have balance on more than one credit card and payable amount has taken a monstrous figure, get them compacted into a single one. It will facilitate payment and could also lower interest rate.

Start with lowest balance
It is famously known as snowball method as put by Dave Ramsey. First enlist your existing credit card debts in ascending order i.e. lowest balance first. Now clear the lowest balance first while maintaining minimum payment on others. The objective is to instill kind of confidence in you by getting smaller balances wiped out.

Clear card with highest interest rate
It is the most used method to pay off credit card balances. Focus on wiping out balances on high-interest credit card while paying off minimum figure on other existing ones.

There are multiple effective ways of eliminating debts on your credit card but most important is to choose one that you feel comfortable with and cling to it.
So, what strategy appeals to you most?

Editor’s Note: This article is contributed by Tina Roth: a personal finance blogger at PROFinanceBlog. She is commerce graduate and loves to write about money and finance management.
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