The most important factor that prevents to be financially secure is the trust in the age old beliefs and deceptive thoughts about money. The advice and guidance financial experts give may work well for many people, but at the same time may not fit in your personal situation. Tips about money sometimes can be life saving and sometimes life destroying. Before deciding on any plan about money spending or saving, you must keep in mind few very common myths about money.
A budget can no doubt help you save money, but it should be given a space as an item in your budget. It's important to set apart some money as savings.
While budgeting you are likely to set apart a fixed amount for an item. For eg., you might set apart 8000 for a refrigerator, chances are you're going to buy the product just by checking the money and not the item. You might get what you need at a much lesser price.
Generally, as you start earning more, you tend to shop a lot. You tend to buy things that you've always dreamt of. You actually ignore to think about savings imagining you've a lot of money. This is one of the reasons lottery winners declare bankruptcy soon. It's important to ensure that higher earnings equals to higher savings too.
The relationship between people, money and joy is not clearly captured in the phrase "Money doesn't buy happiness". The reality is money can buy happiness, specially for lower and middle class people. You can buy things that you actually need, this will of course give you contentment and happiness. If you want to spend quality time with your family, you need to go on vacation. A vacation is only possible if you have money to earn it. Quality time with family gives you happiness, which is the result of vacation that you buy from money.
There are many government aided programs that provide financial aid to people who are actually needy. However, most student based programs are merit based rather than need based. Even high income families can qualify for financial aid programs. This kind of programs makes rich people richer and needy people more needy.
Keeping in mind today's financial scenario, it's better to keep your lifestyle flexible. Change in job or city isn't a rare thing. In a condition like this, buying a home can give extra mental pressure. You need to sell the house before flipping jobs or city. In a rented house, you have no hassle of managing anything. Also, you never know the estate prices might just go down when you need to sell the house. You might suffer loss also.
The truth is the insurance companies are color blind. It doesn't bother them if your car is blue, black, striped or red. The insurance rate for a particular model, make and age of the vehicle will be the same irrespective of the color.
Your credit rating largely depends on your credit history wherein your borrowing history and balances on your credit card are shown. It's a good idea to keep unused credit cards also open. Credit card companies keep a track of old accounts, especially those with good credit history.
The ideal decision should be saving money while paying off your debts. Instead, when you keep saving money without paying debt, you are actually stocking up more debt. The high interest rates are racking up in your account. Your credit ratings are also getting affected.
Nothing like this is actually going to happen. Retirement, generally, means old age and aging people cost more than babies. People theses days don't have their house completely paid off and prices of all products are getting higher not lower. Hence, retirement doesn't by any chance means lower spendings.
There is no guarantee that your income is going to increase or the time when it's going to happen. It's important to save some percentage of money with whatever you earn. You must start saving with small amounts.
A thought may be age old but it's not necessary that it'll work for you. So, whenever you hear something about finances, analyze your situation then take any action.
Commandment #1: "Thou Shall Not Trade Against the Trend." If the market is going up then it is okay to have money exposed to the market – if it isn't, don't.
• Portfolios heavy with underperforming stocks rarely outperform the stock market!
• There is nothing new on Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again, mostly due to human nature.
• Sell when you can, not when you have to.
• Bulls make money, bears make money, and "pigs" get slaughtered.
• We can't control the stock market. The very best we can do is to try to understand what the stock market is trying to tell us.
• Understanding mass psychology is just as important as understanding fundamentals and economics.
• Learn to take losses quickly, don't expect to be right all the time, and learn from your mistakes.
• Don't think you can consistently buy at the bottom or sell at the top. This can rarely be consistently done.
• When trading, remain objective. Don't have a preconceived idea or prejudice. Said another way, "the great names in Trading all have the same trait: An ability to shift on a dime when the shifting time comes."
• Any dead fish can go with the flow. Yet, it takes a strong fish to swim against the flow. In other words, what seems "hard" at the time is usually, over time, right.
• Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.
• When trading, if a stock doesn't perform as expected within a short time period, either close it out or tighten your stop-loss point.
• As long as a stock is acting right and the market is "in-gear," don't be in a hurry to take a profit on the whole positions. Scale out instead.
• Never let a profitable trade turn into a loss, and never let an initial trading position turn into a long-term one because it is at a loss.
• Don't buy a stock simply because it has had a big decline from its high and is now a "better value;" wait for the market to recognize "value" first.
• Don't average trading losses, meaning don't put "good" money after "bad." Adding to a losing position will lead to ruin. Ask the Nobel Laureates of Long-Term Capital Management.
• Human emotion is a big enemy of the average investor and trader. Be patient and unemotional. There are periods where traders don't need to trade.
• Wishful thinking can be detrimental to your financial wealth.
• Don't make investment or trading decisions based on tips. Tips are something you leave for good service.
• Where there is smoke, there is fire, or there is never just one cockroach: In other words, bad news is usually not a one-time event, more usually follows.
• Realize that a loss in the stock market is part of the investment process. The key is not letting it turn into a big one as this could devastate a portfolio.
• Said another way, "It's not the ones that you sell that keep going up that matter. It's the one that you don't sell that keeps going down that does."
The table below depicts the percentage gain necessary to get back even, after a certain percentage loss.
• Your odds of success improve when you buy stocks when the technical pattern confirms the fundamental opinion.
• You can lose money even in the "best companies" if your timing is wrong. Yet, if the technical pattern dictates, you can make money on a short-term basis even in stocks that have a "mixed" fundamental opinion.
• To the best of your ability, try to keep your priorities in line. Don't let the "greed factor" that Street can generate outweigh other just as important areas of your life. Balance the physical, mental, spiritual, relational, and financial needs of life.
• Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study.
Always be a student, there is always someone smarter than you!
I hope this helps clarify the some of the issues that you wrestle with when it comes to managing your money.
Beta is also referred to as financial elasticity or correlated relative volatility, and can be referred to as a measure of the sensitivity of the asset's returns to market returns, its non-diversifiable risk, its systematic risk, or market risk. On an individual asset level, measuring beta can give clues to volatility and liquidity in the marketplace. In fund management, measuring beta is thought to separate a manager's skill from his or her willingness to take risk.
The beta coefficient was born out of linear regression analysis. It is linked to a regression analysis of the returns of a portfolio (such as a stock index) (x-axis) in a specific period versus the returns of an individual asset (y-axis) in a specific year. The regression line is then called the Security characteristic Line (SCL).
Beta depends on two factors, multiplied together:
