Stock market software is a good part of any investing plan. In fact, for any serious trader it is a mandatory tool in the investing tool-kit. Using software is no different than a carpenter having a hammer. You need it. Information is the name of the game in investing. Educated investors are profitable investors. A quality program can help you pin-point hot stocks for day trading or long-term stock market investing.

There are different types of software, the most basic helps you spot trends. It can graph a stock’s performance over a range of time and provide graphical charting patterns. It can show a stock’s momentum whether that be down trending or upwards trending. The various programs often come with stock alerts. The alerts can be heavy volume trading or stock price change. If you’re tracking the performance of a stock over time the software can send you e-mail alerts to when there is major action, stock falling or rising. This will help you make quick acting decisions that can make or save you a fortune. If you’re trading across a spectrum of stocks it’s nearly impossible to keep abreast of all stock movement. Let automated software do the work for you. Put the stock alerts to work, the is especially important to day traders. Quickness is key.

There are other types of software available. There are some proprietary systems that scan huge chunks of analysis data for investment opportunity. They hunt OTC and pink sheet exchanges for companies forming bullish trading patterns (stock about to increase). This type of software can give you a risk/reward factor. The better the index number, the less the risk, the higher the reward. Software scans through bullish investing companies and spits out pattern charting with risk/reward index numbers. This type of stock market analysis software can help you pin-point investment opportunities.

Whatever type of software suits you, make sure you have one or both. Don’t be a blind investor. Knowledge is power.

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Many people believe that investing is only for the rich. That couldn’t be more wrong. It’s because people invest, that they become rich. So people with very little financial assets have to start somewhere if they want to create more wealth for themselves and their family.

If you maintain that your business or your job will make you rich over your lifetime, you couldn’t be more wrong. People who retire usually have some sort of investment product working for them during their working life. It’s the money that your employer or you place into superannuation or retirement benefit schemes that will let you retire comfortably. This is the investing side of the equation that will pay for your retirement. The other investment class that most people have is their mortgage. The value of their house will increase overtime to the stage where they can sell it and use the proceeds to retire on.

So why is it that most people find that even though they have these two investment vehicles, they still have very little to live on in retirement? It’s called inflation and the cost of living. Because of the effect of prices increasing over a long period of time the money needed to retire will no longer be an amount to keep them in the lifestyle they had dreamt about.

So what can you do about it? The answer is to invest now. Invest in shares and property. Use excess cash flow from your business or your job to buy property or shares. This creates passive income. Passive income is income that you earn when you have not used your time to create it. It comes from those things you own and is created regardless of your input or not. If you were to go on holidays, your passive income would be there for you when you came home.

Passive income is the secret of the wealthy. It starts with a simple formula of taking some of your cash flow and buying the items that give you passive income.

Property gives you passive income through rent. Shares give you passive income through dividends. Depending on your financial situation you may be able to jump straight into property investment. Shares are an easier way of starting out.

With online share trading accounts through some of the major brokers it can be as easy as dedication a proportion of your weekly wage to a share trading bank account each week. There are easier ways than this that are made available through brokers. You can buy an installment warrant. This is similar to a down payment on the full cost of your shares. So if you want to take advantage of the immediate benefits of owning shares, you can buy the installment warrant and make installments on it or if the shares go up enough, you can sell your installment warrant for a profit and reinvest it in more shares.

The choices you have are many and varied and it is not a really hard thing to do. The best thing you can do is to educate yourself about the share market and talk to professionals about your options for investing. The sooner you get started, the sooner you will have passive income so that you will be able to maintain your income.

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A vehicle is a device that takes you from one place to another. Just like a car will get you to where you’re going an investment can do the same as long as you know where you’re going. A financial plan is like a map with a starting point and an ending point. The vehicles are the investments you make to get you there.

Cash

It’s not really an investment but it’s the most liquid of all assets. Liquidity is measured by how quickly something can be converted into cash. All investments start with cash. You have to have money to invest.

Savings Accounts

Very safe. Very secure. Very boring. Should be used to save for a short term (less than one year) investment. Ie savings for the down payment of a house. There is risk in that the interest you’ll earn will barely keep ahead of inflation and is fully taxed. Combine the two and your money in real dollars may actually be worth less in the long run.

GICs

Not much better than savings accounts but slightly higher rates. Same purpose – for short term investing. Can also be used as a hedge if you are investing large sums of money in risky ventures.

Money Markets

Similar to GICs in their rate of return. Mostly made up of government TBills and asset backed commercial paper. Recently ran into some short term instability but only affected a small portion of the market.

Bonds

Basically an IOU. A little more risky in that the prevailing interest rate affects it’s worth. Most provide steady reliable income, which offsets the interest rate risk. Good investment when rates are falling, not as good when rates are rising. Can be government or corporate issued. The largest of all markets is the bond market. Most of the money in the world is tied up in bonds.

Stocks

A stock is technically a share of ownership of a company. More risky than a bond, however that risk varies greatly depending upon the industry, age and size of the company. Some stocks have voting rights, some don’t. Some pay guaranteed dividends (like an allowance for ownership of the stock, it’s dependent upon the performance of the company) some don’t – usually smaller companies in the growth phase who need as much money as possible to stay in business and expand.

Derivatives

Called as such as they derive their value from the value of the underlying investment. These include warrants and options. Can be extremely risky and require advanced knowledge to become adept at trading them.

Mutual Funds

They are a pool of funds that usually includes either stock, bonds, cash or a combination of the three. They are all professionally managed and have a hidden fee as a result. For the average investor these can be a good choice as they don’t require a lot of “hands on” investing.

It’s important to keep in mind the risk/reward ratio. The greater the risk the greater the reward. If you’re looking for guarantees you’ll have to sacrifice investment returns. As with all things if it sounds too good to be true it probably is.

No matter what vehicle you choose you need to have an idea of where you want to go and the kind of investor you are. There is no “perfect” investment; they all have their good and bad points.

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The Federal Reserve cut interest rates again yesterday and will be likely to do so again in six weeks. Yields on 5-year Certificates of Deposit are down to around 4.25% and falling. On top of that, the mortgage meltdown has hindered the performance of the entire stock market. If you are retired and need your investments to generate income you don’t have to settle for these paltry rates and dismal returns. Read on to learn how you can get rates that are double that!

I have written several articles on various types of investments that can generate a dependable income stream that is far higher than that paid by certificates of deposit. I’ve talked about income deposit securities, closed-end funds, regional telephone companies and Canadian income trusts in previous articles. Keep in mind that these types of investments aren’t guaranteed by the government and their share value will fluctuate from day to day.

Closed-end funds make attractive income-oriented investments. Think of a closed-end fund as a pool of underlying investments. Those underlying investments can be U.S. corporate bonds, foreign bonds or even stocks. Something unique to closed-end funds is that they don’t always trade at the same price as the underlying value of what they own.

For instance, a closed-end bond fund may own a pool of bonds that, if sold that day, would be worth $10 per share. Those shares don’t always trade at $10. They can trade above or below that price at a premium or a discount to the fair market value of what it owns. Currently, high-quality closed-end funds that previously were trading at a premium are now trading at a discount. Some have discounts of 10% or more.

One reason why I particularly find select closed-end funds attractive is because the share price has been declining much faster than the value of the underlying securities. To me, this is an indication that the decline is a result of investor panic, not the underlying fundamentals of the fund. The yields on attractive closed-end funds have increased 2-3% with many yielding in the 9-10% range.

I also like the stocks of select regional telephone companies. Studies have been done that show how stocks paying dividends tend to out-perform those that don’t over longer periods of time. That’s because companies that pay dividends tend to be older and are in industries where their cash flow is more dependable.

These telephone companies have a steady, stable and growing cash flow. Think about it. Every month you pay your phone and cable bill. Things would have to get pretty bad before people allow their phone and cable to be shut off. Recent market fears have even caused the price of these stalwarts to decline. That means you can now get yields close to 10%–or even higher.

Canadian Trusts are popular among those seeking higher dividend yields. These investments are out of favor due to changes in Canadian tax laws. Those laws don’t take effect until 2011 though, and even then will only have a limited impact on certain trusts. Yet the share prices of all of the trusts have declined as much as those trusts that are adversely affected. That means that high quality trusts with healthy and growing underlying businesses are paying unbelievable yields.

A company that prints telephone directories is now yielding over 7.5% and has already increased their dividend this year. There are trusts in the oil and gas sector that have shown they can weather the stress of low natural gas prices. Some are paying over 10%–some even 15%—and still they are only paying out 70-80% of the money they have available for dividends.

The key with all investments like these is to own several of them to reduce your risk. The prices will fluctuate. The prospects of individual companies can change. That’s why I use groups of these in my clients, portfolios. For instance, my growth stock portfolio may utilize 10-15 different positions like those mentioned here.

So while everyone else is in a panic and rushing for the exits, I am using this opportunity to pick up investments that will give my clients a steady and growing source of income for years to come.

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Think you’re ready for a Visa student credit card? Most students assume they are without giving the matter very much thought. If this describes you, then you might be biting off more than you can chew. Before you jump into the world of credit cards with both feet blind, make sure you ask yourself these three important questions…

1. Who’s Tab Is It?

First and foremost, before you decide whether or not you’re ready for any Visa student credit card you’d better make sure you have a way to pay the statement when it comes in each month. If you don’t have a job you won’t be able to pay your bill. Remember, this is your credit card — not your parents’. It’s your responsibility to pay it.

2. How Disciplined Are you?

Okay, so you have a job and you can pay the bill when it comes in. The other question you have to ask yourself is how disciplined are you? Will you have the willpower to use your Visa student credit card wisely, or is it just going to put you under a pile of debt?

If you can barely resist the temptation to spend when you have cash in your pocket or a checkbook in your purse, how are you going to resist it when you have plastic in your wallet?

Remember, a Visa student credit card is not a license to spend. It’s supposed to be a tool to build your financial future and help you out in case of emergencies.

3. Do You Realize This Will Go On Your Permanent Record?

Another thing you need to consider when applying for a Visa student credit card is that everything you do with it is going to go on your “permanent record”. No, not your academic record, but a record that is just as important.

If you make a late payment or max your card out it’s going to show up on your credit report. And it’s not just going to be there for the world to see — it’s also going to lower your credit score. You might not know it yet, but your credit score can make or break your financial future. This can interfere with your plans to get an apartment or buy a car when you graduate.

The above questions raise some valid points. If they’re making you second guess yourself, it’s best to stick with debit cards and leave the Visa student credit card for later. If, however, you are more confident than ever that you can manage a Visa student credit card with ease, you just may be ready for the credit card world.

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