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Finance Articles
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Gurgle Gurgle
By Al Thomas
Debt Solutions It feels like your debts are spiraling out of control. With each passing month you are robbing Peter to pay Paul and the heavy cloud of debt is always hovering above your head. When you sit down to work out your money the simple truth is you have more going out than you have coming in. If this carries on there`s a real chance that you won`t be able to make the mortgage payments a few months down the line and then goodness knows what you are going to do. It`d be wonderful if you could pay a fixed monthly fee that would be affordable and keep your creditors off your back. There`s a good chance this can happen if you have a chat with a company that can provide a number of Debt Solutions. A debt management plan is just one of the options that the Debt Solutionscompany can provide. The scheme calculates what you can afford to pay each month and this sum is paid to the Debt Solutionsfirm. All it could take is one phone call to a trained advisor and you could be offered suitable solutions that will lift the burden of heavy debt from your shoulders.
This last couple of weeks in the stock market kinda feels like that whirlpool when you look at your financial statements. Of course, your broker will tell you this is a "normal correction and it gives you a chance to buy more so you can dollar cost average. He could be right about this being a correction, but dollar cost averaging down is 100% wrong. The proper way to average into a financial holding is buy more as it goes up in value, never down. There is a basic law of physics that applies equally well to many things including the stock market. An object in motion will remain in motion in the same direction until interrupted by another force. Keeping that in mind before you buy any stock or mutual fund is very important. Just because something looks cheap does not mean it will increase in value because you bought it. Usually there is a compelling story to go with it, but that doesn`t mean anything. How can you know if what you are going to purchase has a chance of going up so you can profit from it? Let`s go back to the basic law of physics. Is it going up now? Many professional traders will want to see an equity that has been moving steadily higher for at least 3 or 4 months and rising at the rate of at least 3% per month. They also don`t like sky rockets that are going almost vertically as these are too dangerous and many times will fall as fast as they climbed. You must also protect your capital at all times. Anyone who purchases stock or mutual funds without an exit strategy is doomed to lose his money over time. How? Very simple. You may very easily put a stop-loss order in place that will not allow you to lose more than 10% of your investment. Brokers discourage these as they have to watch them - and you should too. Your stops orders should be placed immediately after your purchase and before you hang up the phone. At the end of each month if your equity has gone up you should move up your open stop loss to lock in any profit that is accumulating. If you will go back to study the price action of stocks and funds you will see that once an equity starts in a certain direction - either up or down - that course will be maintained for many months and sometimes years. People hate to lose money, but one of the important rules is never to lose a lot of money. Small losses will not kill you, but big losses can make that gurgle, gurgle sound. 
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