Fund Managers Need to Be Accessible and Personally Invested
We hear it all the time. “Put your money where your mouth is,” “Skin in the game,” and, “Eat your own dog food.” All phrases that talk about the one thing in the investing world that many fund managers try to avoid. Accountability. When you hear the word accountability these days it usually refers to CEO’s that are on their way to jail, or Club Fed as the locals like to call it. Accountability is, however, now starting to creep into the vernacular of investors who wonder whether or not the person that is supposed to be managing their investment believes in it enough to put his own money into it. A recent Morningstar study of approximately 6,000 fund issues showed that 46% of the stock funds reviewed were managed by fund managers with none of their personal money invested in their own funds.
Think about that in realistic terms. You have about a 50/50 shot that the person you are trusting to protect and grow your investment doesn’t trust himself to protect and grow his own investment. That is not only a serious problem of accountability, but what about performance? During my formidable years at USC, I took a Business Development class that was being taught by a former Controller of General Motors (I don’t remember his name and it was during the cheap gas good times at GM). He devoted an entire semester to what he felt was the one thing that made people perform at their best. Motivation. Motivation derived from doing well in the eyes of others is a pretty good source, but it’s nothing compared to the personal motivation derived from something like the well being of your own investment account. Some of the arguments we may hear from fund managers are that the types of investments that they manage don’t fit well in their portfolio because of variables like age, risk tolerance, etc. This argument could be made for fund managers in their 30’s and 40’s (more…)
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Candlestick Charting the Forex Market
While on a Forex website the other day I read an article where the author told his readers that “candlestick charting can’t be used in Forex trading”. This is a common misconception among the currency trading community that needs to be corrected. Candlestick charting the markets is different from most other markets and exchanges but in my opinion candlestick charting is the most simple and powerful method to trade Forex there is! Is there a difference between Forex and other markets when using candlestick charts? Yes! But that doesn’t mean you can’t use candlesticks effectively in your trading!
The reason the mistaken belief about candlestick trading the Forex market has flourished is the fact that Forex markets are traded 24 hours a day, while other financial markets have a daily open and close. Most of the traditional candlestick patterns rely on gaps, both up and down, to complete the pattern properly. Since there is no break in trading in Forex, these gaps rarely occur and the patterns form differently…but they still form. Once a trader understands just how these patterns form, a whole new world of simplicity and profit will be the result.
Understanding reversals is one of the most important things that you can know, and Forex candlestick chart patterns can help calculate bullish and bearish reversals. Once the basics of the Forex candlestick charts have been mastered, the trader will find out that there is a great deal that can be learned from a candlestick chart that has been well put together. Where a simple bar chart will only show you vertical lines that display the highs and lows of each time period, a Forex candlestick chart will provide more information. Once you have learned to read a Forex candlestick chart, you will begin to parse universal patterns that will help you take in a situation at a glance.
Can candlestick (more…)
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Forex Currency Trading - How to Harness Today’s Trading Technology
Self control and discipline can be nurtured and strengthened over time and are extremely valuable qualities to develop. In this article we’ll talk about how these qualities relate to current and projected future developments in the Forex industry.
Manual trading is a time-tested and market proven method for trading Forex. There is no doubt that manual trading is here to stay. Many of the most skilled full-time traders prefer this method. The key words here are skilled full-time traders.
You see, manual trading can be very time consuming. While the process of technical analysis gets a bit easier and more efficient with practice in manual trading it can never be completely eliminated. Manual traders will always need to complete their technical and perhaps even fundamental analysis prior to executing their trades.
As you know, fundamental analysis has to do with looking at economic indicators within and between nations. Fundamental indicators such as Consumer Price Index, Non-Farm Payroll, Gross National Product, Industrial Production, Producer Price Index, Retail Sales, Balance of Payments and Interest Rates are many of the most common fundamental indicators traders seek to incorporate in their analysis.
Needless to say using both fundamental and technical analysis is quite complex and can be a very time consuming challenge. Except for “news” traders many Forex traders default to primarily using technical analysis.
A prime example of “news” is the Non Farm Payroll announcement. This announcement normally takes place on the first Friday of each month at 8:30am Eastern Time. Traders who trade the news position themselves in the market to capture as many PIP’s as possible during the market corrections that take place just after a “news” release. Traders who trade the news rely quite a bit on fundamental indicators in making t (more…)
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How to Be Your Own Investor
Do you enjoy taking high-risk investment decisions and getting them right? Don’t trust your investment advisor? There are many reasons why people decide to become their own investors, taking their own decisions. For a start, it means a lot more responsibility, which also makes for more satisfaction when you do succeed.
While this may be alluring, one must always remember that investing is not an easy affair, where you can make money at the click of a button. It requires you to make educated decisions, and to be willing to take calculated risks.
So, the most important thing before you take on your investment portfolio is to educate yourself. First up, you will need to gauge the kind of financial risk you are capable of taking. There are a number of asset and risk calculators available online which can be of great help. They will help you decide your net worth, risk tolerance and investment capability.
The next thing to do is fix your financial goals for which you are investing. This will help you figure out your time horizon as well as asset allocation to achieve the kind of returns you need. Various investment options are available on the market, from stocks to real estate to precious metals, each with their own risk factor and other advantages like tax breaks, etc. All of these factors must be accounted for when you are investing. You will also have to find out details regarding the kind of paperwork and other legalities you may need to take care of before you start investing yourself.
While you may have decided to be your own investor, it is always advisable to talk to experts in the field and what they think about your investment plans. There is always someone who will know more than you, and it never hurts to ask.
Also, since finance is a fast-moving market, there is always something new to know, and as your own inve (more…)