Online Stock Trading Tips

If you want to know the best long term investment strategy for everyone (not just for financial geeks, banking pros or trading gurus), its cost averaging stock purchase for a long term. This is an easy yet affordable investment to all types of investors. The good thing with this type of investment is that you do not need to know the details of stock trading or money management. All you need to know is how cost averaging works, when you need the money and how much you are willing to invest.

How Cost Averaging in Stocks Works?

Cost averaging is a technique that reduces your risk in stock market. It is because you are always buying it cheap; so you buy more shares when the stock price is cheap and buy fewer shares when the stock price becomes expensive. Supposing you are willing to invest 5000 per month on a specific high cap stocks XYZ. The amount of purchased shares depends only on the price. So if the stock price per year varies from 10, 11.5, 8, 9, 15 then the amount of shares would be:
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You are reading this post because you want to protect your asset value from inflation. OK let’s suggest the best ways. The very first step is to closely examine the trend of your country inflation rate. For example, in the Philippines; the inflation rate is around 4%.

The next step is to examine the current rate in each of your investments. For example, your bank savings accounts, your money invested in government bonds, etc. are considered your investment vehicles. Each of these investment vehicles has its own rate of return. The rate of return for most investments is fixed. For example, bank has around 3% maximum return for its time deposit account and less than 1% for most ordinary savings account. Government bonds has around 5% to 6% rate of return while real estate rate of return changes.

The third step is to check what investments are affected severely by inflation. This is very simple to check, if the rate of return is equal or less than the inflation rate then the value of your investment will decrease over time. If the rate of return of your investment is just 0.5% to 1% over the current inflation rate, the value of your investment will not grow and will simply break even. The primary reasons why 0.5% to 1% above inflation is still not considered to be good rate of return are taxes imposed in your profits. You still need to pay taxes on the profit of your investments. After paying the taxes, there is no net return left that you can use.

The fourth step is to determine where you can transfer those investments affected severely by inflation so that you can profit substantially from your investments. Here are the best alternatives that worth trying:
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