Archive for May, 2010
It is a well known fact that serious investors seeking long term growth of capital have as their main objectives the two most basic goals in investing:
• to find an investment vehicle that would effectively preserve capital and minimize risk in the face of a fluctuating and constantly flexing economy
• the investment vehicle must provide better than decent yields in all economic conditions to promote constant growth of capital value.
With the stock market as the premiere choice due to its historical record of outperforming all other investments over time, people are increasingly turning to the stock market as their main investment vehicle for future capital growth. It is here where much higher rates of return can be made with a relatively small increase in risk to capital.
With thousands of books, manuals, internet sites, seminars and courses offering investment strategies and trading systems in the stock market and its derivatives, there are few, if any, that deliver the ideal investment vehicle sought by the long term investor in search of safety and high returns. Not only is there a near total absence of an ideal investment system but there are many that promise eye popping, mind boggling returns and, they are exactly that; mere promises.
Most of the trading systems offered are structured on strategies or activities that work when conditions are ideally suited to the program being peddled. Most of their successes are highly dependent on picking the right stocks at the right time. In other words you must be a good stock picker or use a stock picking service (for a high monthly fee) to select the right ones for you. Market timing is also an important factor in their systems. Again, you must be a good market timer or depend on a service that provides market timing signals (also for a high monthly fee). These supposedly high yield investment programs don’t say anything about how bad things can be when conditions go against their predictions. These programs do exactly as promised: great when the going is good but disastrous when the going is bad. Without doubt many have been taken by these so-called services and while an investor/trader may be successful for a while, the end result over a long period of time is always the same – no better than if you had done the selections yourself.
While there is no one investment system or vehicle that can be an answer-all to the various goals of various investors, there are some investment alternatives that can come close to satisfying the two basic needs of safety and decent returns. Diversified mutual funds have been touted as the answer to these basic needs. But over the years these funds have shown that during downturns in the economy they perform just as badly as the whole investment market in general. And, over the long term, many of these diversified funds have failed to even match market performance in general, much less outperform it.
Enter market derivatives with emphasis options.
Trading in stock options has become very popular with institutional investors as well as private individuals as a sound money management system supplementing their investment portfolios. The ability of stock options to give the investor a wide range of choices is what has made the options market grow considerably over the last two decades. To quote one options expert: “Stock options are the greatest wealth producing tool ever invented on this planet. . . . if you know how to use them”.
The key element of this statement is: . . . if you know how to use them.
For many people the mere mention of stock options, sends shivers up their spine. They look at options as synonymous with great risk. But isn’t driving a car very dangerous for one who doesn’t know how to drive? The ability of stock options to give the investor a wide range of choices in stock market investments is what has made the options market grow by leaps and bounds over the last twenty years. Statistics compiled by the Options Industry Council, a group that educates investors about options, show that volume in options trading has risen tremendously in recent years. Further, studies show that individual investors make up 60% of the market.
For the individual who has sufficient funds and is looking for more than a decent return on his capital and with controllable risk, stock options may be the answer.
There are dozens of option trading systems being employed by individual investors and institutions. Each system is designed to accomplish a specific investment goal. A financial institution may use long put options to hedge its winnings in stocks that have appreciated in value. Another investor may buy call options instead of stocks to enter a position in a security that has caught his fancy. Still another may sell calls against his stock holdings to generate income from his stock position, or what is popularly known as covered call writing.
Of the dozens of option trading systems there is one that can be carried out as a long term investment program offering a fair degree of safety and consistent high returns over time, thus satisfying the investor’s two basic needs of safety and return.
This is the selling of uncovered or naked options.
But wait! Is it not said that selling naked options carries the risk of unlimited losses? Isn’t this a contradiction?
Indeed selling naked options when done carelessly and without a disciplined strategic program is extremely risky!
But by using a carefully planned and disciplined system of trading, the so-called “unlimited risk” factor in selling options can easily be conquered. There is a three-pronged trading strategy being used by one successful options trader that is proving to be a consistent winner in all market conditions. It is a trading technique that couples naked option selling with a modified ratio credit spread and the use of the roll over feature. While naked option selling has acquired a bad rap of being highly risky, this three-pronged trading strategy allows the trader to defeat the risk. Not only is the system able to substantially reduce the risk, it also offers one the ability to become a savvy investor/trader without having to depend on picking the right stocks or timing the market.
It involves utilizing the system in any market condition using only one or a few stocks, ETFs or indexes (the latter two are more effective). One need not worry about finding the right stocks or timing the trades. The fact remains that stocks behave, more often than not, in crazy and irrational ways so that one can almost say that consistently choosing winning stocks is as good as a random walk down Wall Street. Rather than be proactive and try to predict and time the market, as many try to do, this three-pronged investment system is reactive. The prescribed trades are done in reaction to how the market has moved, not in anticipation of its future behavior.
This three-pronged trading system does not promise quick profits or mind boggling yields but steady annual returns in excess of 30%. Many are averaging returns of 50% to 60%. It would be prudent to say that in times of deep downturns the system may not deliver the promised returns but it will hold its own and will definitely outperform the market.
One options trader that has mastered this three-pronged trading technique has decided to share his knowledge of the system by writing an e-book on its methodology. Borrowing from that quote about options being a great wealth producing tool he has aptly titled his work: STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED. In it he details the step by step methodology of this trading technique and gives an exhaustive series of sample trades covering several months of transactions. It shows the effectiveness of the system in an up market, down market and horizontal market using only one ETF stock. To this day the writer continues to use only one or two ETFs in all his options trades and he includes a
web page that shows his current and actual trading results month by month on an ongoing frequency.
CYA! The Savings Highway Family Legal Plan Does Just That.
Never be afraid again! The Savings Highway Family Legal Plan gives you the power you need to handle your legal matters with FREE CONSULTATIONS!
North America today is a highly regulated, lawsuit-crazy world, it’s not enough to simply use Common Sense. So here are 4 legal tips designed to help you plan and avoid legal nightmares
1. In lawsuit-happy America, anyone can sue you at any time and for any reason. And even if you win, the suit may cost you tens of thousands – perhaps hundreds of thousands – of dollars.
Here are just a couple ridiculous legal examples
January 2000: Austin, Texas: Kathleen Robertson was awarded $780,000 after she tripped over a toddler who was running wild inside a furniture store.
The kid who was running amok was Ms. Robertson’s own son!
October 1998: Bristol,Pennsylvania: Terrence Dickson was awarded more than $500,000 when a faulty door opener trapped him inside a garage and forced him to survive on diet soda and dog food for 8 days.
Mr. Dickson had been robbing the house before he got trapped in the garage!
Are you kidding me???
2. Carefully study the regulations governed by the regulatory agency that has jurisdiction over your clients or products.
While the FTC watches marketers in nearly every industry, some types of small work from home businesses are also controlled by their own sets of guidelines.
If, for example, you (or your client) are selling stocks, mutual funds, and other kinds of securities investments, you’ll need to understand the regulations set by the Securities & Exchange Commission as well as the National Association of Securities Dealers.
If you participate in the selling of commodity futures or futures options, you need to study the Commodity Futures Trading Commission site.
And if you sell neutreseutical products, you should study FDA.gov regulations for guidance in planning your advertising and marketing materials.
3. Memorize everything you see on the U.S. Federal Trade Commission website at http://www.ftc.gov/.
The FTC is the arm of the government that sets policy for all advertising, marketing, and sales conducted in America. The Commission’s primary purpose is to protect consumers from scammers and scoundrels.
For the most part, the FTC wants to ensure you follow the Golden Rule. If you do, you’ll be signifigantly ahead of the game – but NOT entirely home free. There are other little curves you need to be aware of … like the “reasonable person” rule.
In a nutshell, it goes like this: As a small home based business owner, marketing exec, or copywriter, you are not only required to tell the objective truth. You must also avoid giving your prospect a false impression about your product by omitting or failing to mention a key fact about it.
To learn more, I strongly recommend you spend a few hours at: http://www.ftc.gov/bcp/guides/guides.htm That’s where the FTC keeps its “Plain English” guides for advertisers and marketers. To avoid potential legal hot water, I suggest you visit them often.
4. Keep your legal antennae tuned.
Unfortunately, the America(n)laws and regulations governing the advertising and marketing of products and services are not carved in stone. So, to keep on top of shifts in the legal landscape, it’s absolutely necessary to have an attorney review your sales copy before you plan to mail it.
Many years ago, for example, the SEC hauled in a guy named Chris Lowe. He wasn’t selling regulated securities – just publishing a monthly investment advisory newsletter offering his opinions and recommendations.
The way Chris saw it, sharing his opinions and recommendations was free speech – protected under the First Amendment. And so he ignored the SEC’s sanctions against using testimonials, his track record, and other credibility devices when promoting his newsletter.
The SEC did not take kindly to being ignored. They shut down his operation and seized his bank account.
Chris fought back all the way to the America(n)Supreme Court, where they determined that he was indeed operating under his First Amendment rights. A major victory was won for financial publishers!
Ever since the famous “Lowe Decision,” marketers of investment and financial information products have been free to operate under the entirely more liberal FTC guidelines. Nevertheless, the SEC or CFTC still takes a run at a financial publisher every few years. (And something similar happened with the FDA not too long ago.)
So always keep your ear to the ground. The rules for marketing regulated products are constantly changing – and when they do, you do NOT want to be the last one to know.
Small work from home business owners should buy an insurance plan to protect themselves against this kind of legal nonsense and if you’re a copywriter or a marketing consultant, you might want to consider adding the following to your contracts:
A. A clause that says your client takes full responsibility for determining the accuracy, legality, and regulatory compliance of all statements in the copy before it is used.
B. A “Hold Harmless” clause that says if your client is sued for any reason, he can’t turn around and sue YOU.
C. An “Indemnification” clause that says if YOU are named as a party in any regulatory or legal action against your client, he will reimburse you for any legal fees or awards assessed against you.
Pretty scary stuff … but absolutely CRUCIAL to your success.
As you can see, it’s one thing to make big money as a business owner or copywriter or marketer. HOLDING ON to the money you make is another matter entirely.
So follow the Golden Rule … follow your industry’s regulatory guidelines … get a lawyer’s help when appropriate … CYA with contract provisions that protect you when the worst happens … and you have a good shot at both getting rich and staying that way.
Legal Disclaimer: I felt it was important to tell you that I am NOT an attorney. My advice: Disregard anything in the above article that smacks of legal advice – except, of course, that you should hire a lawyer. FAMILY LEGAL PLAN… INCLUDED!
When you or a family member have a legal concern, wouldn’t it be great to just pick up the phone, receive legal advice and not have to worry about the cost? Well, as a member, you can do just that!
COVERS YOUR ENTIRE FAMILY – Use as often as you like!
Our members have access to over 20,000 Plan attorneys that they can call any time during normal business hours (8:30 AM to 7:30 PM EST) or visit a plan attorney to get unlimited legal advice about any new legal matter and they don’t have to worry about the cost. The Plan Attorney will discuss legal questions with the member and assist them in reaching a solution to their problem. The Plan attorney can review important legal documents, draft a simple will or write letters on the member’s behalf, all at no charge.
Save $200 Now – Get a FREE Will or FREE Annual Will Update!
If you do not have a will, you need one… especially if you have children. Now you can get your Free Simple Will done for FREE with your Savings Highway Membership! Save an immediate $200 with your Free Will today!
SEVEN FREE SERVICES… Each attorney will provide members with:
1. Unlimited phone consultations for each new legal matter
2. Face to face consultations for each new legal matter
3. Review of important legal documents (6 page max.)
4. A free simple will with free annual update
5. Help representing you in small claims court
6. Write letters on the members behalf
7. Make phone calls on the members behalf
How many times have you wanted to speak to a lawyer, but were afraid of the cost?
Plus, You’ll enjoy a Capped Hourly Rate
!
Family Legal Plan attorneys contract to never charge more than $125.00 per hour for legal care that goes beyond the free and discounted services. No competitor in the nation can make this claim or match Savings Highway. This is where the real savings begin.
After the free letters, calls and consultations take place, members and their attorneys will have to decide what course of action to take next. In some cases, members may not have a choice and litigation may ensue. This is the point in time at which the attorneys begin to charge the $125.00 hourly rate for legal care.
Get a great Discount on Contingency Based Cases!
Contingency fee will be a 10% reduction of the state maximum rate or the attorney’s usual rate, whichever is lower.
Free and Easy To Use!
Our members simply pick up the phone, speak to our customer services representatives and then are put in touch with a participating attorney in their area. It’s that simple. Now you don’t have to be afraid to pick up the phone and get your legal questions answered!
And if you need to go to court, you’ll have great legal counsel and potentially save hundreds or even thousands of dollars… with the Savings Highway!
As you can see the Savings Highways Legal Plan can protect you against any number of Legal encounters you may find yourself up against as a work at home small business operator. Contact me right away to get all the details of the Savings Highway provides to its many satisified members.