Investment Education

Lots of investors just getting started with swing trading often look toward candlestick analysis as an attractive technical tool.  The great part about this is that there are many great resources to help grease the wheels while you are still learning the ins-and-outs of candlesticks.  The resources below are not tutorials or explanations, but are free tools that help you employ the technique.

Few student investors spend a lot of time on options. I wanted to take a moment to write about a time when investing options is not only relatively safe, but also quite smart. We have to make a pretty big assumption that you have the purchasing power to own 100 shares of a stock. I figure since there are optionable stocks around $10, this isn't all that implausible.

(Fortune Magazine) -- Municipal bonds, used to fund everything from
bridges to hospitals, are sold as stodgy investments for moms and pops.
But in a speech last July, SEC chairman Christopher Cox delivered a
stark warning: Muni bond investors might think they "can rest assured
that their interests are fully protected by the same high standards
that operate everywhere else in the U.S. capital markets," Cox said.
"Not even close."

Investors often wonder how many stocks they should own and despite the fact that, we think, most people understand that just owning 1 or 2 stocks can be quite risky, we think that most investors would be surprised by the small number of holdings that are needed to provide significant diversification.

Before going any further, we would just like to make a fairly obvious statement on how many stocks to own:

* it pretty much depends on how much time you are willing to dedicate to keeping up with your portfolio

With so many students graduating with significant debt, the question of paying off student loans or investing often comes up. In any financial matter, it is important to get all of the facts straight. For this exercise, you will want to know the rates (or rate if consolidated)of interest for your loans. You will also want to go to Bankrate and find out what the current interest rates for US Treasuries, savings, and money market accounts.

There is a lot of debate on whether or not ETFs are a good investment. I am not sure that I want to open that can of worms, but for student investors, I think that ETFs are quite useful in accessing markets not offered by your broker. That is to say, most students use online discount brokers that often only offer equity trading on the three major exchanges. With this restriction, I see a few great opportunities to use ETFs.

1) Bonds (e.g. Blackrock Municipal Bond Trust)

Zecco is a new online broker that offers its users 10 free trades per month (with $2,500 balanace) and only $4.50 past that and for all other balances. Unlike many discount brokers, they offer OTCBB trading (notice: SEC info on microcaps).

I've been using Zecco for a while now and have been happy for the most part. You don't get any frills and I don't recommend trying to get customer service through email (calling works well), but the price can't be beat and is perfect for young investors.

Every one is free to manage their money however they see fit. Individual investors need to keep in mind that portfolio management need not be exciting. It need only be effective and grounded in reality. Portfolio simplicity and “lazy portfolios” satisfy these requirements for the vast majority of individual investors.

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In finance, options are securities that convey the right, but not the obligation, to engage in a future transaction on some underlying security. For example, a call option provides the right to buy some amount of a security at a set strike price at some time on or before expiration, while a put option provides the right to sell. Upon the option holder's choice to exercise the option, the party that sold, or wrote, the option must fulfill the terms of the contract.[1]