Dollar cost averaging is an investment strategy that can help lower investment risk by spreading out investment over time. While dollar cost averaging can be beneficial at times, it does not guarantee investment success because the value of the investment can continue to decline despite averaging down. Nevertheless, dollar cost averaging is a commonly used investment technique that is used both knowingly and unknowingly by participants in retirement plans, and is also used by financial management companies.

HOW TO DOLLAR COST AVERAGE:

To dollar cost average one essentially spreads out one’s investment in a particular financial instrument over time with a number of fixed or variable payments. For example, if one participates in a managed retirement plan such as an IRA or a 401K, monthly contributions may be made into various investment products as per agreement with one’s financial planner.
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Investing for income is NOT what your typical stockbroker knows how to do! Investing for income is a way to take your future into your own hands, not depend on the whims of the market and the possibilities of government or pension failure. Do you have friends or family who lost everything in the tech crash? To Enron? To similar stock market fakery-failures? To get-rich-quick schemes? To buying a bad house in a boom market, only to lose everything when the market ticked south?
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One of many ways to profit in the buying and selling of financial instruments is trading in foreign currencies. Also called “foreign exchange” (or “forex” for short), currency trading can be as lucrative for the experienced day trader as trading in ordinary stocks.

To understand the foreign exchange market, consider this simple example. If I wanted to acquire 100 British pounds, it may cost me $200 to buy them. Later in the day, I might be able to sell those same 100 British pounds for $204 because the market for that currency rose during the day for obscure reasons.

Deducting my commission costs, perhaps I make a $2 profit that day. It doesn’t seem that much, but if I can repeat that 200 times during the year, I’ve used $200 to generate $400 in profits, or a 200% return on investment.
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The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.
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The forex market is a necessity for the businesses who trade around the globe. It is an opportunity for individuals to protect their finances against currency fluctuations & earn an extra income using their skills. Forex Trading has the chrismatic appeal for small investors, small businesses, as it offers better returns from investments in forex, compared to investments in stocks or bank instruments. But your ride through the forex markets is risky and you need to train yourself with skills to avoid losses, minimize your risks & maximize gains.

With more than $1.6 trillion dollars being traded every day, forex market is bigger than all the stock exchanges of USA & Europe combined. As in every business, you have to confirm the reliability of any broker, software before you invest your time & money on them Read the rest of this entry »

The currency market trading started in the 1970’s. Currencies that were historically tied to the price of gold, were allowed to float. Now the value of a currency is decided in the open free marketplace where banks, traders, corporates & governments buy & sell the currencies resulting in the ever changing currency exchange rates.

So instead of a dollar having a gold based value, it’s value is now determined by state of economy & the other currencies in the world. FOREX marketplace is a near perfect free trading market that free market ebthusiasts can think of. But over speculative trading is not good for the growth of forex marketplace. Almost anyone can invest in FOREX because it’s simply the exchanging one currency for another currency.
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