Cash in Hand - Stay Liquid and Grow Your Money As Stocks Fall
Cash is king now that the stock market has taken a bad fall.
Investors are liquidating stocks and bonds so that they have plenty of the green stuff.
Good idea to stay flush.
Better idea to grow money as the value of the U.
S.
buck declines and inflation fears mount.
What's the solution? Simple: Master short-term trading strategies in markets that easily convert to cash.
Choose the right markets and you won't be penalized with high tax rates.
Commodity markets are taxed at a lower rate than stocks.
Especially if you day-trade stocks: the tax rate is higher for stock investments that are liquidated within a one-year period.
The solution is futures markets.
Day-traders and position traders are not penalized for getting in and out of markets and ending the trading day by settling in cash.
I know what you're thinking.
Futures?! Isn't that a great way to lose money? I have an uncle who lost his shirt trading soybeans.
Yes, we've all heard the horror stories.
But they usually come from stock traders who insist their choice of market is safe.
Since when? Legendary investor Jim Rogers has made it clear since the beginning of the 21st Century that the best opportunities are now in commodities.
When he began putting his money where his mouth is, commodities such as sugar and corn were near 10- and 15-year lows.
Those prices have since climbed dramatically.
But it is difficult to master many different markets.
Seasonal tendencies (an illegal choice of words for brokers trying to convince novices to buy, buy, buy) differ in each market.
That's why I suggest keeping it simple: Master one market only.
One of the best markets to choose is the mini-sized Dow Jones electronic futures market.
This market settles in cash every day.
(There is no need to worry about delivery of beans or sugar canes.
) It is also a global market that trades throughout the day and night, with a two-hour pause late in each business day.
You can trade this market at home and thanks to cable networks, you'll have plenty of feedback about market direction and breaking news.
In May 2008 the mini-Dow Jones was near 12,600.
In October 2008 the market dipped below 8,000 before rebounding.
In this market it is as easy to trade down as it is to trade up.
When you know what you're doing, there is no need to pray for a Bull or Bear - either way is an opportunity.
Each tick in the mini-Dow futures market equals $5.
That means the drop from May to October equals about $4,600 - per contract.
My point is not that you and other traders would have caught every tick of this recent trend down.
But even 25% of such a move with five contracts would net $5,750.
Maybe you were in for a few days, then out.
Then in again and out again.
Are there risks? Yes.
You must learn before you earn.
And past performance is not necessarily indicative of future results.
But what isn't a risk today? The best chance you and other investors have is to learn new skills so that you are in control of at least a portion of your money.
And in the mini-Dow futures market converting to cash when you need to will be as quick and simple as a click or two on your keyboard.
Copyright 2008
Investors are liquidating stocks and bonds so that they have plenty of the green stuff.
Good idea to stay flush.
Better idea to grow money as the value of the U.
S.
buck declines and inflation fears mount.
What's the solution? Simple: Master short-term trading strategies in markets that easily convert to cash.
Choose the right markets and you won't be penalized with high tax rates.
Commodity markets are taxed at a lower rate than stocks.
Especially if you day-trade stocks: the tax rate is higher for stock investments that are liquidated within a one-year period.
The solution is futures markets.
Day-traders and position traders are not penalized for getting in and out of markets and ending the trading day by settling in cash.
I know what you're thinking.
Futures?! Isn't that a great way to lose money? I have an uncle who lost his shirt trading soybeans.
Yes, we've all heard the horror stories.
But they usually come from stock traders who insist their choice of market is safe.
Since when? Legendary investor Jim Rogers has made it clear since the beginning of the 21st Century that the best opportunities are now in commodities.
When he began putting his money where his mouth is, commodities such as sugar and corn were near 10- and 15-year lows.
Those prices have since climbed dramatically.
But it is difficult to master many different markets.
Seasonal tendencies (an illegal choice of words for brokers trying to convince novices to buy, buy, buy) differ in each market.
That's why I suggest keeping it simple: Master one market only.
One of the best markets to choose is the mini-sized Dow Jones electronic futures market.
This market settles in cash every day.
(There is no need to worry about delivery of beans or sugar canes.
) It is also a global market that trades throughout the day and night, with a two-hour pause late in each business day.
You can trade this market at home and thanks to cable networks, you'll have plenty of feedback about market direction and breaking news.
In May 2008 the mini-Dow Jones was near 12,600.
In October 2008 the market dipped below 8,000 before rebounding.
In this market it is as easy to trade down as it is to trade up.
When you know what you're doing, there is no need to pray for a Bull or Bear - either way is an opportunity.
Each tick in the mini-Dow futures market equals $5.
That means the drop from May to October equals about $4,600 - per contract.
My point is not that you and other traders would have caught every tick of this recent trend down.
But even 25% of such a move with five contracts would net $5,750.
Maybe you were in for a few days, then out.
Then in again and out again.
Are there risks? Yes.
You must learn before you earn.
And past performance is not necessarily indicative of future results.
But what isn't a risk today? The best chance you and other investors have is to learn new skills so that you are in control of at least a portion of your money.
And in the mini-Dow futures market converting to cash when you need to will be as quick and simple as a click or two on your keyboard.
Copyright 2008