Options are priced based on three elements of the underlying stock.
1. Time
2. Price
3. Volatility
Watch this video to fully understand each of these three elements that make up option prices.
Showing posts with label stock market. Show all posts
Showing posts with label stock market. Show all posts
Friday, February 28, 2020
Thursday, February 27, 2020
Tuesday, February 25, 2020
How To Choose The Best Investment Strategy
By Don Meyer
The income that we have all been receiving from our savings has been dwindling dramatically over recent years, so if we are to be able to make any sort of return on our money then choosing the best investment strategy is absolutely vital to achieving our financial goals. Inflation is one of the key drivers in needing to plan this strategy, as most savings accounts at the moment are paying interest below the rate of inflation, which leads to the capital effectively decreasing in value.
There are many reasons why you need to be considering your strategy to investing as a whole, because by looking at your investments individually could leave you vulnerable if you are over-committed to one sector or one type of investment. You also need to be certain of how long you are planning to keep your money in the investments, so that you can tailor the risks you take so as to remain able to achieve your goals. There really are very many things to be considered choosing the best investment strategy.
One of the common investment strategies if you are looking to earn a regular income from your investments is to stick mainly to those stocks which have a proven track record of paying out reasonable dividend payments from their profits year after year, and focus on that income, rather than in the temporary fluctuations of the market. If you think that this is the best investment strategy for you, but don’t require the regular income, then many funds will allow you to re-invest any dividends into the same shares to grow your capital invested.
If, however, you are looking to make swifter and more dramatic gains in the value of your investment, then you may need to look at taking more risk. The key with looking for these is that there is greater possibility of actually losing your capital. Investing in the stocks directly can be particularly risky, but there are also funds which you can use to invest and spread the risk for you. The fields most likely to achieve result if you think this is the best investment strategy are the smaller companies and emerging markets.
You can also consider looking at investing in the bond market, with many large companies having issued bonds in the aftermath of the credit crisis, but it is generally considered that most of these bonds are close to the top of their value at the moment, so now may not be the right time for this.
Ultimately, getting the best out of your investments will depend on what you are looking to achieve, and choosing an investment strategy to match.
Article Source: http://www.streetarticles.com/stocks/how-to-choose-the-best-investment-strategy
The income that we have all been receiving from our savings has been dwindling dramatically over recent years, so if we are to be able to make any sort of return on our money then choosing the best investment strategy is absolutely vital to achieving our financial goals. Inflation is one of the key drivers in needing to plan this strategy, as most savings accounts at the moment are paying interest below the rate of inflation, which leads to the capital effectively decreasing in value.
There are many reasons why you need to be considering your strategy to investing as a whole, because by looking at your investments individually could leave you vulnerable if you are over-committed to one sector or one type of investment. You also need to be certain of how long you are planning to keep your money in the investments, so that you can tailor the risks you take so as to remain able to achieve your goals. There really are very many things to be considered choosing the best investment strategy.
One of the common investment strategies if you are looking to earn a regular income from your investments is to stick mainly to those stocks which have a proven track record of paying out reasonable dividend payments from their profits year after year, and focus on that income, rather than in the temporary fluctuations of the market. If you think that this is the best investment strategy for you, but don’t require the regular income, then many funds will allow you to re-invest any dividends into the same shares to grow your capital invested.
If, however, you are looking to make swifter and more dramatic gains in the value of your investment, then you may need to look at taking more risk. The key with looking for these is that there is greater possibility of actually losing your capital. Investing in the stocks directly can be particularly risky, but there are also funds which you can use to invest and spread the risk for you. The fields most likely to achieve result if you think this is the best investment strategy are the smaller companies and emerging markets.
You can also consider looking at investing in the bond market, with many large companies having issued bonds in the aftermath of the credit crisis, but it is generally considered that most of these bonds are close to the top of their value at the moment, so now may not be the right time for this.
Ultimately, getting the best out of your investments will depend on what you are looking to achieve, and choosing an investment strategy to match.
Article Source: http://www.streetarticles.com/stocks/how-to-choose-the-best-investment-strategy
Sunday, February 23, 2020
Your Transition To Retirement
By John T Jones, Ph.D.
Have you thought about your transition to retirement? Young or old you need to think about it. Young people need to plan for retirement and old people need to preserve their assets during retirement. I am not a financial advisor or retirement planner. I do want to tell you what I've learned over the years and how it has affected my retirement.
When you are young you think about buying a home, raising children, and going to Disney World. When you are middle-age you think about getting your children through college and taking a trip to France. When you are near retirement age you think about planning for retirement. When you retire, you feel that you should have planned sooner.
When there was job stability in this country we could expect our employer to do our retirement planning with pension plans and RIAs. Now that has gone to the dogs there being little stability in business. Our retirement left for China last year.
At some time during our life we learn that we should be saving for retirement. Few do it. Some times you will read a sign on the back of an RV saying, I'm Spending My Children's Inheritance. That means that the driver doesn't realize that the "children's inheritance" will be spent during his retirement years just to survive.
Following are some things that can help you as you plan for retirement. The younger you are the better. Don't wait until you are sixty years old to start planning.
1. Save 10 Percent of Your Income: That means to "pay yourself first." This "nest egg" will help you in those times when economic situations would plunge you into debt. It also can be used to take advantage of opportunities that will better your retirement.
2. Carry life and medical insurance to protect your family and to reduce financial risk. You can learn about insurance on the Internet before you purchase insurance.
3. Keep your eye on your financial advisor. He is looking to earning a living and he may recommend funds, annuities, and other instruments which pay him a large commission but are not really in your interest.
4. Avoid risk in the stock and bond markets. You are gambling with your retirement money. You may want to put some percentage of your investments in stocks because the stock market is known to improve yield. However, it can also destroy your retirement in one swell swoop. Never buy and sell options from your retirement funds.
5. Think about investments that preserve your capital. Annuities may be of interest. I got out of the stock market and bought some annuities some years back. They have had a good return and the death benefit is guaranteed. Mine our in IRAs so I must remove a certain percentage every year to avoid excessive tax.
6. Think about investing in assets having intrinsic value. Land, art, diamonds, and other such instruments of investment can be profitable. But you must know what you are doing.
7. Learn to stay out of debt when you are young. Grow fruits and vegetables and preserve them for consumption later. Keep your home in good repair. It is one of your main assets. Be frugal and don't blow money on things you don't really need. You can always make do, repair, or go without.
8. Teach your children to be independent, to work hard, and to contribute to the welfare of the family.
9. Think about long-term care for the eventuality that you or your spouse will have to be placed in a care center. This will protect your assets and reduce your cost if that occurs. Check out your long-term company carefully. Mine is in trouble and I may have to go to the State of Arizona where I bought the policy to receive help (most states guarantee long-term policies).
I hope your have a secure and happy retirement. Plan for it.
Fly Old Glory!
Article Source: http://www.streetarticles.com/retirement-planning/your-transition-to-retirement
Have you thought about your transition to retirement? Young or old you need to think about it. Young people need to plan for retirement and old people need to preserve their assets during retirement. I am not a financial advisor or retirement planner. I do want to tell you what I've learned over the years and how it has affected my retirement.
When you are young you think about buying a home, raising children, and going to Disney World. When you are middle-age you think about getting your children through college and taking a trip to France. When you are near retirement age you think about planning for retirement. When you retire, you feel that you should have planned sooner.
When there was job stability in this country we could expect our employer to do our retirement planning with pension plans and RIAs. Now that has gone to the dogs there being little stability in business. Our retirement left for China last year.
At some time during our life we learn that we should be saving for retirement. Few do it. Some times you will read a sign on the back of an RV saying, I'm Spending My Children's Inheritance. That means that the driver doesn't realize that the "children's inheritance" will be spent during his retirement years just to survive.
Following are some things that can help you as you plan for retirement. The younger you are the better. Don't wait until you are sixty years old to start planning.
1. Save 10 Percent of Your Income: That means to "pay yourself first." This "nest egg" will help you in those times when economic situations would plunge you into debt. It also can be used to take advantage of opportunities that will better your retirement.
2. Carry life and medical insurance to protect your family and to reduce financial risk. You can learn about insurance on the Internet before you purchase insurance.
3. Keep your eye on your financial advisor. He is looking to earning a living and he may recommend funds, annuities, and other instruments which pay him a large commission but are not really in your interest.
4. Avoid risk in the stock and bond markets. You are gambling with your retirement money. You may want to put some percentage of your investments in stocks because the stock market is known to improve yield. However, it can also destroy your retirement in one swell swoop. Never buy and sell options from your retirement funds.
5. Think about investments that preserve your capital. Annuities may be of interest. I got out of the stock market and bought some annuities some years back. They have had a good return and the death benefit is guaranteed. Mine our in IRAs so I must remove a certain percentage every year to avoid excessive tax.
6. Think about investing in assets having intrinsic value. Land, art, diamonds, and other such instruments of investment can be profitable. But you must know what you are doing.
7. Learn to stay out of debt when you are young. Grow fruits and vegetables and preserve them for consumption later. Keep your home in good repair. It is one of your main assets. Be frugal and don't blow money on things you don't really need. You can always make do, repair, or go without.
8. Teach your children to be independent, to work hard, and to contribute to the welfare of the family.
9. Think about long-term care for the eventuality that you or your spouse will have to be placed in a care center. This will protect your assets and reduce your cost if that occurs. Check out your long-term company carefully. Mine is in trouble and I may have to go to the State of Arizona where I bought the policy to receive help (most states guarantee long-term policies).
I hope your have a secure and happy retirement. Plan for it.
Fly Old Glory!
Article Source: http://www.streetarticles.com/retirement-planning/your-transition-to-retirement
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