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Finance Articles
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What To Buy?
By Al Thomas
Article01.html Many people in the UK, in fact as many as one in three UK taxpayers have paid too much tax! The Taxation People, are a forward thinking online accountancy service that specialise in helping people who might be eligible for a tax refund. They offer a online service, with a simple and easy to follow process that will get you the refund you are entitled to. I would urge you to check out The Taxation People, where if you have been or are currently employed The Taxation People can help you get a Tax Refund. The Taxation People are a trading name of Greer & Taylor LLP a respected and trusted accountancy service provider who offers a number of online services. Initially they are only offeering the Tax Refund service that can be found at www.thetaxationpeople.com, but Greer & Taylor LLP are about to lauch a cost effective Self Assesment Service, keep an eye on www.greer-taylor.com for more information. Homeowner Loans Another bill has just landed through the letterbox and your still haven`t paid the monthly direct debt to the utility firm. You`ll have to sort out funds for your credit cards next week and then there are the catalogue payments to make. It`s the same story each and every month where you struggle to keep on top of your regular payments. Having taken out dribs and drabs of loads over the last few years you now have to pay a number of companies back. What if you could amalgamate all of your loans into one fixed monthly payment? Suppose you could reduce the amount that you pay each month by spreading the payments over a longer period of time. Look into the various Homeowner Loansthat are available at the moment and you could end up paying less in repayments each and every month. Price comparison sites are the places to look if you want one of the Homeowner Loans. They`ll scour the marketplace searching for Homeowner Loansthat will suit your individual needs. Combine all of your debts into one slightly larger loan amount and you should have more money each month that can be put away for a rainy day.
At this point you have three decisions to make besides which equity to buy: 1. How much to buy. Which of these is the most important decision? Let me tell you this as a professional trader. What to buy and when to buy are the two least important of these decisions. Maybe only 10%. I know that comes as a shock to you because everyone is trying to find that one perfect stock that will make him a millionaire almost immediately. It`s not going to happen. Trading is an occupation. Just like the business or profession you are in now it takes time to learn. There are certain basic rules that apply to every occupation. Most brokers and financial planners don`t know them, but as a former floor trader I had to learn them or I could not have survived. What to buy is the least important because there are always several good buying opportunities every day. When to buy is not anywhere as important and when to sell. Every professional trader I know will first determine the risk, his potential loss, before buying. At the same time he makes his buy he puts in a sell order called a stop-loss order to automatically exit the position should it go against him. He is not thinking about how much he will make on a trade. He is thinking about protecting his capital should he be wrong. Professional traders are right less than 50% of the time, but they never take big losses. The loser`s philosophy is always thinking about how much he will make and he refuses to face up to the very possible fact that he could lose money, a lot of money if he does not have a loss limit of some kind on his position. The loser is willing to be wiped out rather than admit he is wrong. Brokers tell you you have not lost money until you sell. Believe that and I will sell you my flying pig. The other very important concern for your investments is how much of this stock should I buy. A good rule of thumb is between 10% and not more than 20% of your portfolio. Most mutual fund managers limit a risk position to about 5%, but they have other considerations. Never put all your money in one trade because it looks so good. That is super dumb. Before you decide what to buy be sure you have in mind the amount you are willing to risk and the size of the position you wish to take (number of shares or dollars). When you have learned this you will be a successful stock market investor. 
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