All About Financial Matters

Archive for June, 2006

Many people have this wrong perception… that short term trading strategy is risky and long term trading strategy is safe.

Now, let me put this in an analogy. The capital markets is like a huge ocean and
your trading strategy is like a boat on this ocean. Some think that the slow and steady ship is safer
than the fast and furious speed boat, right? Now, if the speed boat runs a 20% chance of capsizing but takes
only 1 day to reach your destination, wouldn’t it be safer than to stay on the ship that takes 1 year to
reach your destination, 90% safe from capsize but runs the unpredictable nature of the sea and its weather?

The stock markets is as unpredictable as the weather today. Long term trading strategy for a 10% to 20% gain a year might really be something thought of in the industrial era where people love steady, long term growth. The world today can potentially be thrown into complete chaos at an instance. Who says 911 cannot happen again? A long term trading portfolio can be wiped out overnight suddenly and all you wanted was to make 20% a year out of it. No long term trading strategy today is completely hedged to downside. A long term trading strategy would really glue you to the news.

Short term trading strategy runs extremely low market exposure for as high as a 75% winning rate for profits per win of as high as 100% these days! The amazing results of short term trading strategy have been made possible by the creation of more and more sophisticated financial instruments like options and futures. It may be riskier per trade than long term trading but who needs a 100% chance at a 2% profit per month when we can get a 75% chance at a 100% profit in a just few days?

So how do we manage the 25% chance of losing in short term trading? That’s where a smart portfolio management strategy comes in. It has
been said that even if you know nothing about picking stocks, a smart portfolio management strategy will be able
to help you win money on an overall basis picking stocks at random.

So, what form of trading has the lowest mathematical risk? In my opinion, it is a Short Term trading strategy backed by a sound portfolio management policy. Such a short term trading strategy gives you predictable, high returns in short periods of time at minimum market exposure.

Jason Ng is the Founder of Masters ‘O’ Equity international. He is a fund manager specialising in options trading and his Star Trading System has helped thousands. Please visit mastersoequity.com/OptionUni.htm MastersoEquity.com.

The Federal student loan program has benefited thousands of college students in the forty years since it was introduced. Interest rates for the program have historically been quite competitive, and the program has allowed many people to acquire a college education who otherwise might not have been able to afford one.

At the moment, interest rates on Federal student loans are the lowest in history, but that is about to change. On July 1, 2005, the interest rates on Federal student loans will rise, due to an increase in the price of Treasury, bills, to which the interest rates on student loans are tied.

While an increase in interest rates is seldom viewed as a good thing, knowing about it ahead of can be helpful. Between now and June 30, new graduates or those who have been repaying existing loans can consolidate their student loans at current rates. The rates currently vary, with fixed rates being slightly higher than adjustable rates. Those considering consolidation might wish to convert their loan to a fixed rate. Depending on the amount of the loan, borrowers may extend their loan terms to as long as 30 years.

There is also legislation pending in Congress that would change the Federal loan system so that all future loans are adjustable rate, with no fixed rate option. This will save the government money by not allowing students to lock in long-term loans at low rates during times of increasing interest rates. Students who wish to obtain a fixed rate loan may not have much longer to do so.

Rates will vary slightly from lender to lender, and the market for loan consolidation is quite competitive. Those wishing to consolidate their loans should consider shopping around for the best deal while time permits.

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to end-your-debt.com/ debt consolidation and credit counseling, and HomeEquityHelp.net, a site devoted to information regarding homeequityhelp.net/ home equity loans.