Monday, March 23, 2015

Financial Spread Betting as Good for Bears as It Is for Bulls

The standard logic is that rising bull markets are where money is made. It’s easy to see why. They tend to be more even paced, and thus more predictable day to day than bear markets. But increasingly the attraction of falling markets is also being recognised. In a derivative-based investment culture, the direction of travel becomes of secondary importance to the fact of travel per se. And there is growing talk of a serious downturn in 2015.

In other words, as long as there is volatility in the market, there is scope to exploit that movement. Traditionally this has been an expensive - perhaps prohibitively expensive - way to invest in a bear market. For all but the best resourced investors, selling in a falling market, only to buy back in at a lower price, is fraught with risk. At the same time, for those of more limited means, it can quickly pile up fees and commissions. It’s much easier - and safer - to just hunker down, let the storm blow over and let someone else deal with the risk.

Taking a step back
But once you start to take a step back from the market and deal in derivatives, things get a whole lot more exciting. By simply riding on the back of market moves and using a specialist financial spread betting firm such as Tradefair it is possible to:

  1. Capture value from a falling market and
  2. Avoid costly commissions, fees and taxes to maximise that return.

This is not to say that Tradefair betting is risk free - it most certainly is not. But having made the calculation as to the direction of market travel, it is a sure fire-way to capitalise on a correct assessment of a downturn. Risk is the corollary to an investment return, after all.

A further advantage of such a derivative-based investment vehicle is that a potential loss can be mitigated extremely quickly. Investors are connected directly to the market by a sophisticated highly user-friendly range of software applications. It means they have live control over their exposure. There is no delay in enacting a trade.

More reassuringly, the software offered by all the major providers allows the pre-selection of a range of stop options - positive and negative - that effectively automate an exit at a predetermined point.

Simple enactment
The mechanics of a Financial Spread bet are strikingly simple. They have been known in the City as ‘contracts for difference’ for a long time. How it works is that an investor, once he has selected a market, an index or a stock that he wants to take a position on, then determines which direction he thinks that market price is likely to move - either up or down.

Once he has made that decision, the investor then places a bet to the value of his choosing. But this is not an ordinary bet in the sense of the word. Rather than a simple win-draw-lose equation, the investor’s stake is now tied to the level of the market. For every point the market moves, the winning investor will win a multiple of his stake.

There is what amounts to a bid/offer spread built into the calculation, so the stock will have to move by a predetermined amount before it starts to accumulate those multiples. But this is only ever a couple of points either way. It is on this basis that no commissions or fees are levied. The ‘spread’ thus balances the market makers’ own exposure to winning bets.

The standard logic is that falling markets are bad news. That may be true for those who invest directly in such mechanisms, but for those who are brave enough to operate on the sidelines the derivative-based nature of financial spread betting means that a falling market can be every bit as profitable as one on the up. All it takes is the right insight and the courage of your convictions.

Friday, March 13, 2015

Hot Industries in a Volatile Market

The stock market can be really troublesome sometimes. There is a general notion that, when everyone is winning, you should be wining as well. This is a really simple rule when the market is good. All you need to do is find a country with a high growth and make a solid portfolio with stocks which are representing different industries. However you put it, you will have solid returns during next few years. The issue arises when the market is bad. In this situation we usually ask ourselves, is it even worth investing? The answer is resounding yes. Where others see danger, you should see an opportunity. But, in these cases the strategy changes. You shouldn't bet on the market itself, simply because you don’t know what to expect. You should bet on companies and industries which are potentially profitable. Here is some of our advice.

The global population is slowly getting older. In most cases, the service provided by local hospital or online drugstore is on such a high level, that the people are completely taken care of. This means that the older we get, the more support we will need. Entire private, medical sector is on enormous rise. It will probably be this way in future unless something changes drastically. Big part of that sector is your favourite online pharmacy. Like all the other businesses, this one also strives to become connected to internet and provide best supply in least time possible.

Businesses that can relate to previous paragraph are healthy life and healthy food. It is a simple fact; we want to live longer and better. This is why everyone is trying to eat healthy, unprocessed food. There are many restaurants with raw menu being opened all over the world. As if that wasn't enough, many gyms are providing yoga and pilates classes instead of your usual body building or karate. This trend can be even seen in the movies, where slender men get advantage in comparison to muscular ones. This is why, everything related to healthy life and better living will bring in big profits in future.

As the global market changes, we become more intertwined. The transit and trade between the countries have become enormous. We, as a planet, strive to eliminate all the national borders. European Union is a good example. Many nations are a part of it, and with each new member, the need for translators and other linguist services increases. This is the same practice with multinational companies. Although English is the dominant language in most of these companies, the management still needs to sell products and services to local people. So, different linguist services within the company are a must.

Similarly to your online pharmacy, your local farmer has decided to take its business online. This means that there is much more IT programs which are designed for this industry. Modernization and automation are future of this business. Given the predicted deficit of the food in the world, agriculture will play a big part in future economy. Similarly to that, all the other companies are doing their best to improve their systems and take their business online. Another good example are government institutions.

Stock market is all about prediction. If we realize on time what will be profitable in future, we can make major profit and ensure that our investment will be safe and sound.

Friday, February 13, 2015

IRS e-file – When Will I Get My IRS Tax Refund (2015)?

Are you using TurboTax this year to prepare your taxes? It seems that Intuit's flagship TurboTax Deluxe product has garnered particularly bad reviews this year.

Anyway, if you are wondering when you can expect to receive your tax refund from the IRS, you are not alone. In past years, the IRS published a table where you could look up when your federal tax refund would be deposited in your bank account (by direct deposit), or when your check would be mailed. It seems that this document, Publication 2043, either doesn't exist or doesn't provide a table anymore. From previous years, the IRS reported that most refunds were issued 7-15 days after the IRS tax return was accepted. Also, they stated that 90% refunds were issued in less than 21 days last year. The same results are expected in 2015.

You can also check the status of your income tax refund using this link. (And of course, en Español: ¿Dónde está mi reembolso?) You will need to enter your social security number, filing status, and refund amount to see your refund status.

I've heard some anecdotal stories about the IRS a long time to process refunds in 2014. So I will be curious how the IRS does this time around.

If you haven't prepared your tax return yet, I encourage you to use either TurboTax or H&R Block Software. But, based on the negativity surrounding TurboTax, TT users may want to reconsider switching to H&R Block.


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Friday, January 9, 2015

Citi Dividend Card 2015 Categories

I had written before that I have a Citibank Dividend MasterCard. One of the benefits of this card is that it offers 5% cash back on rotating categories of merchants. The main problem I have with this arrangement is that I always forget which categories are currently offering 5% cash back when I am at the store. As a result, I often miss out on the bonus dividend dollars. In order to help me remember, I have decided to post the categories which change every three months here.

Q1 2015 (New Beginnings): Macy's, Home Furnishing Stores
Q2 2015 (Celebrate Spring): The Home Depot, Home & Garden Stores
Q3 2015 (Summer Fun): Hilton, Airlines
Q4 2015 (Holiday Shopping): Best Buy, Department Stores

Note that "Q1 2015" means from January 1 - March 1, 2015. Also note that even if you have a Citi Dividend Card, the enrollment is not automatic. You have to login and sign up for this offer at the Citibank website.

See also Discover Card 2015 Cashback Bonus Categories

PF Stock

Friday, December 19, 2014

Discover Card 2015 Cashback Bonus Categories

Discover Card offers a 5% cashback bonus on a "seasonally rotating" list of spending categories. For the Q1 2015, these bonus categories are as follows:

Q1 2015: Gas & Ground Transportation: Gas Stations, Trains, Buses, Taxis, Rental Cars

Discover has not yet announced what the specific categories will be for the rest of 2015. But based on the information currently on the Discover website, these are my guesses as to what the cash back bonus categories will be:
Q2 2015 (Food and Fun): Restaurants, Theme Parks, and Movies
Q3 2015 (Summer Spruce Up & More): Home Improvement Stores
Q4 2015 (Holiday Shopping): Online Shopping & Department Stores purchases

PF Stock

Wednesday, December 10, 2014

Cheap Thrills: Financial Spread Betting

Traditionally, trading in foreign exchange or in stocks and shares comes with a high bar to entry. Dealing with fees, commissions and taxes have historically put such markets out of reach of the average man or woman in the street. It is refreshing, therefore, to see Financial Spread Betting (FSB) opening these close markets up to low-budget, cost-conscious individuals.

In an ideal world, our financial portfolio will entail a budget for entertainment. If it also has something set aside for high-risk investment, FSB provides the means to hybridize the two. If you have a pocket of cash set aside for a recreational purpose, FSB is worth investigating.

FSB delivers precisely what it sounds like. Nothing is bought and sold; instead we are invited to bet on the movement of stocks and shares or currency movements. If they move in the direction we have predicted, the bet pays out; the more the stock moves, the more the bet pays. The downside to this is that the provider stakes a range that the stock has to move before we start to win and, potentially more seriously, losses are worked out on the same basis as wins. In other words, if we've called it wrong and the market goes against our bet, the more wrong we are, the more we lose.

Naturally, this equation calls for some insight into the stock or currency being bet on. It also points to the logic in treating FSB as a form of paying play, rather than an out-and-out investment vehicle. Some people do use FSB as a full-time trading vehicle, but these are very much the exception rather than the rule.

Accessed via either a browser of a desktop app, FSB has the great merit of being available 24/7 as thousands of different worldwide markets exist to trade on. There is a danger that one might be tempted to playing in an area about which we know very little. Once again, the rational approach is to deal solely in areas about which we have some actual knowledge.

There are free demonstration applications available on sites such as Tradefair which offer a perfect way to acquaint oneself with what is an undeniably fascinating medium. The desktop delivers a highly sophisticated dealing screen, complete with a range of charting and analytical tools. Watching prices shift moment by moment and seeing your account balance move correspondingly is a thrill in itself.

 by AndreasPoike

Even without actual cash at stake, making decisions based on the trending of a particular stock or commodity is an intense, nerve-wrenching business. FSB is undeniably the closest that any of us are likely to get to trading on Wall Street, but if there is an area in which you enjoy some measure of insight, FSB offers the means to capitalize on that.

More involved and more scientific than sports betting, but too short term in nature to be considered anything other than a speculative investment vehicle, FSB occupies a middle ground on the financial map; part fun, part investment. It is, admittedly, an unusual hybrid. But for all that, it is something well worth taking a look at. If only because it offers a taste of what being a high roller might be like.

Monday, November 17, 2014

Use It or Lose It: Flex Spending Accounts

It is that time of year again when companies hold their annual open enrollment. This is when employees have the opportunity to change medical or dental plans, and to opt into making contributions to a flexible spending account (FSA). In general, a flexible spending account allows one to deposit pre-tax dollars into the account to pay for medical expenses, or to pay for dependent care. (Note that these are two different types of accounts.) The ability to use pre-tax money to pay for expenses is a good benefit that can save you money.

One thing to keep in mind when contributing to an FSA is that most flex spending accounts operate on a "use it or lose it" basis. This means that any balance you have in the account at the end of the calendar year is forfeited to your employer. This is something that I would rather not do, since I never want to leave any money on the table.

In the current economy, I also want to warn my readers of one more potential hazard with FSAs. Having been downsized before, I can tell you that the "use it or lose it" provision also applies if you are terminated without cause (i.e., laid off). Any money that you have left in your FSA plan when you are terminated will be kept by your former employer. This may seem totally unfair, but that has been my real life experience.