1. You must first learn how the stock market works. Whatever you are using to trade the stock market, fundamentals, technical analysis or something else, you should first learn about it. Learn how you can decide if a stock is a good buy. To do this you should read websites and books that are written by people who are already making money in the stock market. See what they think is important and try using their systems yourself.

2. After you have a firm understanding of how the stock market works it is time to develop your own system. Make a set of rules for you to follow when trading. Buy when a stock does this, sell when a stock does that. These rules need to be precise so you will not have any trouble down the road.

3. After you have developed a set of rules for yourself the next step is to open a paper trading account. Practice trading with your rules in your paper trading account. Follow your rules strictly. If you make money in your paper trading account, great, it’s time to move on to step 4. If you haven’t been able to make money with your rules go back to step 2 and develop a new system. Keep doing this until you are making money.

4. If you have a system that is making money in your paper trading account it is time to trade real money. Be careful when trading real money. Most traders will let their emotions control them when they are trading with real money. If you want to make money you have to get in and out when your system tells you to. It might be good to start trading with just a small amount of your portfolio until you can trade your system without letting emotions get in the way.

What is benchmarking? The performance of a mutual fund scheme can be gauged in comparison to a benchmark index or indices. For such purposes, a benchmark index is one which contains broadly similar instruments to those that a scheme sets out to invest in. So, for instance, an equity fund may be benchmarked against the BSE 100 if its objective is to invest in a portfolio of stocks that are similar to those comprised in the index, in terms of diversity, market capitalization, etc. Similarly, a sector specific fund may choose to compare its performance to an appropriate sector specific index.

If the fund offers returns that are better than those presented by the index, it can be said to have outperformed its benchmark. Conversely, if it has given returns that are lower than the index, it has underperformed.

Benchmarking of diversified equity based funds can be done against the Sensex, Nifty, BSE100, BSE 500, CNX S&P 100, etc., depending on the stated objective of the scheme itself. Similarly, the performance of a sector specific fund can be compared to that of the CNX IT, Bank Nifty, BSE Pharma index, to name a few, according to the sector which it invests in. There are also a number of debt fund indices designed by CRISIL and other neutral agencies. These can be used to benchmark the performance of debt funds.

Importance of benchmarking Over the past four years, benchmarking has gained prominence due to the spectacular growth in the AUM of mutual funds and the importance attached to the rate of return generated by schemes in the context of the category to which they belong.

For example, let’s say you have invested in ABC mutual fund and have been rewarded with a CAGR of 25 per cent in the NAV of your fund. In isolation, an appreciation of 25 per cent per year would make any investor more than happy. However, when the performance of the fund is compared with the benchmark index as well as the performance of other funds following the same benchmark, it may create a completely different impact. You may realize that the index as a whole has displayed a CAGR of 40 per cent and other similar funds have also delivered returns in that range. Suddenly, your 25 per cent growth may not look so good any more. What you can draw from the comparison is the fact that good market conditions and not efficient fund management has been responsible for your return.

Caveat While benchmarking can give you some good insights about the performance of your mutual fund, it cannot be your only yardstick for measuring performance, especially if the composition of the benchmark index varies substantially from that of the portfolio holdings of your fund. When a diversified equity fund, which is temporarily overweight in the mid cap segment, is being compared with the Sensex it is bound to result in an inaccurate conclusion. This is because the Sensex is mainly comprised of large cap stocks. Accordingly, be sure to do a benchmark comparison alongside other performance indicators to get a truer picture of where your fund stands.

This plan is all about using a small stake and building it quickly – for this we need to leverage our money.

In this instance put down $500 and you will be able to leverage at least 200:1 and that means you can invest $100,000. No credit checks are required to get this leverage its yours as soon as you deposit the money – so what’s the method?

The method is becoming a forex trader from home – before you say, that’s to complicated, let me give you some points to consider that will change your mind:

- Forex trading can be learned by anyone – it’s a specifically learned skill

- You can learn to trade in a few weeks

- You only need a small stake to get started

- The only tools you need are an internet connection and a computer

- You can trade in 30 minutes a day

- As one currency rises another must fall so there is never a recession

- Currencies are volatile and create profit opportunities all the time

Ask yourself this question – Can you spot repetitive patterns on a graph?

If you can you can become a forex trader by simply following and locking into trends on a forex chart.

This is the best way to trade you need to know nothing about the background to how and why currencies move you simply want to make profits when they do, by following market action.

Of course, leverage is the key to building wealth fast – but it’s a double edged sword, it can create big gains but also create losses.

By using forex charts, your aim is to run the big profitable trends and liquidate losers quickly.

Trends occur that last for months or years and you can see this by looking at ANY forex chart.

You must lose, to make long term gains, so you need to be totally disciplined in your approach to trading.

Is it really that easy?

Yes and no.

The fact is 95% of traders lose all their money – but this is not because they can’t learn to trade correctly they can.

The problem is they make basic errors. In most instances they come from laziness or believing some guru or expert can make them rich.

Avoid the above trap!

Forex trading success is down to you and you alone.

You need to learn the knowledge so that you have the discipline and confidence to trade correctly – keeping losses small and running profits.

If you have a desire to succeed, a willingness to learn and some seed capital, you can trade successfully.

But where do you start? Which retirement plans should you focus on? What are the differences between the various retirement plans out there?

Many Advisors would agree; that if the company you work for offers a 401(k) plan, a pension plan or a 403(b), you should take advantage of the opportunity to enroll. Typically, employers make monetary contributions towards these plans and the internal fees associated with these types of accounts are usually lower than with individual retirement plans. Because of these features, over time, it benefits you two-fold to put your money into them.

Though investing in an employer-sponsored plan has its advantages, it has some disadvantages as well. The investment options you have are usually very limited. And more often than not, you are required to name a spouse or child as your beneficiary. This being said, it is still an excellent way to save and acquire for retirement, it just shouldn’t be your only investment vehicle.

With the current trends of changing careers every 5 to 10 years, many of us will need to roll our 401(k)’s long before we actually plan to retire. Transferring or “rolling” your employer-sponsored retirement plan to a self-managed IRA may be the best option for you. Keep in mind that some companies will automatically cash out your retirement plan if the balance is under a certain amount. If this happens, they will be required to hold back 20% for taxes, and you may get hit with a 10% penalty for withdrawing the cash before 59 ½ years old. Though generally, your former employer would simply perform a direct transfer (called trustee-to-trustee exchange) to your IRA, incurring no penalties or tax ramifications.

A major benefit to IRA’s (individual retirement account) is the tax break. Contributions to an IRA reduce the income you need to pay taxes on at the end of the year. At the same time you receive this tax break, your money is also growing tax-deferred. (Meaning you do not have to pay taxes on the growth as long as the money is not being withdrawn.)

There are technically five (5) types of IRA’s: Traditional IRA, Educational IRA, SEP IRA (simplified employee pension), Simple IRA and Roth IRA.

SEP IRA’s and Simple IRA’s are employer sponsored, and Educational IRA’s are designed for college planning. So for the sake of this article, we will only discuss Traditional IRA’s and Roth IRA’s as they relate to an individually managed retirement account.

A Traditional IRA grows tax-deferred, meaning you do not pay taxes on any of the money growing within your account. Because you are funding your IRA with money that has already been taxed, you will only pay taxes on your investment gains as you take withdrawals. Some, who qualify, may even be able to deduct their IRA contributions.

A ROTH IRA is different from a Traditional IRA in that your contributions grow tax-free. Meaning, you do not have to pay tax on your investment gains even when taking them in the form of withdrawals. Your contributions are also not deductible. If you choose a ROTH IRA, you must first open a traditional IRA, and then roll those monies into the ROTH account.

College professors and teachers have a special retirement plan or pension called a 403(b). This plan is not tied to their specific employer and can move with them as they transfer from school to school. If you’re vested (meaning you have the right to keep all the money in the account) and change schools or even careers, the amount in your 403(b) plan continues to grow tax-deferred.

If your retirement plan/pension includes stock options (ability to purchase shares of company stock), or if your employer gives shares of stock to your plan, you can keep them as the shares will be in your name. You can also sell the shares of stock for the going market rate. You have two choices should you decide to keep your shares of stock: you can continue to use your former employer as your housing agent, or you can roll the stocks into an IRA that you have opened with a brokerage firm.

There are many choices and options for your retirement investing. In addition to the research and articles you will read on your own, it is still always prudent to sit with a Financial Planner or Accountant to thoroughly review and assess your current financial situation, to determine where you are now, and how to achieve your financial goals in the future.

If you make $100 from $500 that is a 20% increase. That may be a little hard to pull off in 1 month. But if you make $100 from $1000 that is only a 10% increase in a month. Now I’m sure you all realize that the more money you have in the market the more you can pull out. So let me give you an example on how margin does just that.

Tom wants to buy stock ABC. It is a good stock that he believes will go up. The stock is currently trading at $85. He buys 100 shares of ABC. 2 years go by and ABC is trading at $170. Tom is excited and sells his stock. This gives him a 100% increase in 2 years.

In this example Tom made a good profit of his investment. But there is a way in which Tom could have made even more money. What is it?

It involves borrowing money. If Tom not only bought 100 shares of ABC, for $8500, but also borrowed an additional $8500 what would have happened. Well when the stock went up to $170 because he owned 200 shares he would have had $34,000. After he paid the money back Tom would have had $25,500. This would have given Tom a 200% return on his money.

How can Tom do this? Well Tom’s broker has a lot of money. The broker doesn’t mind loaning Tom some money to make a few trades. In fact Tom’s broker will loan him 100% of his account value.

Now there are a few bad things that can happen. Because when you buy on margin it is a loan you will have to pay some interest on it. Tom borrowed $8500 and maybe paid back $9000. Tom paid back so much because he held the stock for so long. If he had only held the stock for a few month he might have paid back only $8600. Every broker has a different interest rate they charge. To find out what your broker charges you can always call them up and ask.

Worst than the fee’s you might pay for buying on margin are margin calls. If Tom’s stock had gone from $85 to $50 his broker would worry and for a good reason. If Tom doesn’t have any money than he can’t possibly afford to pay them back. At this point your broker may call you up and tell you to sell your stock within a couple days. Tom would have had to sell his stock for $40, took a loss, and most of what he had would have had left would have gone to the broker, Owe.

There are a few things you can do to prevent margin calls.

1 You can watch your stock. Don’t let your stock go from $85 to $50 in the first place. If it starts to head down it would be better to get out at a small loss than to accumulate a bigger one, especially if you bought the stock with margin.

2 Put more money into your account. If your stock starts to fall and you still like it in the long term. You can always put more money into your account to pay your broker if he starts to get nervous.

3 Don’t buy on margin. If you want to invest in the long term and don’t want to take the chance that you might get a margin call, don’t borrow money. It is as simple as that. You can still make money without it.

Buying on margin can be a very effective way to leverage your money. I still borrow money every time I make a trade. It can help small profits become big profits. If you don’t know if it is right for you maybe paper trade with it. Just to get used to it. You never know if it works well for you until you try.