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Statistics |
| Unique Visitors: 159 |
| Total Unique Visitors: 543046 |
| Visitors Out: 2201 |
| Total Visitors Out: 2729 |
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| Hedging Stock Investments Using Low-Risk Options Strategies - Stock Option Collar |
| 2008-01-07 18:45:56 |
Please note that this example is for educational purposes and uses a historical trade from April 2007
Another strategy utilized by investors is the Stock Collar. This strategy involves owning or purchasing 100 shares of a particular stock, buying a put option and selling a call option. An investor sells a call option to finance the [...]...
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| Hedging Stock Investments Using Low-Risk Options Strategies - Protective Put |
| 2008-01-07 18:41:38 |
Please note that this example is for educational purposes and uses a historical trade from March 2007
A lesser-known strategy is the Protective Put strategy, which involves purchasing or holding a stock and buying a put option to protect against the downside. The strategy is the opposite of the Covered Call Strategy because the investor is [...]...
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| Hedging Stock Investments Using Low-Risk Options Strategies - Cash-Secured Put Selling |
| 2008-01-07 18:31:49 |
Please note that this example is for educational purposes and uses a historical trade from March 2007
Another way to play the income aspect of the Covered Call is through a strategy known as Cash-Secured Put Selling, which involves selling a put option, keeping the premium, and—if the option is exercised by the buyer—purchasing the 100 [...]...
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| Hedging Stock Investments Using Low-Risk Options Strategies - Introduction |
| 2008-01-02 20:03:17 |
One of the most exciting financial instruments available comes in the form of derivatives. The versatility of derivatives, allows for many different investment goals to be reached. Derivatives are growing in popularity and are quickly emerging as an essential financial investment tool. One of those derivatives is Futures, which are a financial contract obligating the [...]...
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| Chinese Yuan Carry Trade Basket - December 4, 2007 |
| 2007-12-03 23:19:39 |
This is an update on the performance of the Chinese Yuan Carry Trade Basket. The experiment was started with a base of $100,000 on March 20, 2007. I have included the performance figures for both of the experiments that I have been running, although they are the same in composition, I have leveraged them differently.
Since [...]...
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| Update on The Financial Whiz |
| 2007-09-30 22:54:35 |
The Financial Whiz would like to apologize for the lack of updates.
Recently, I have been asked to contribute to Value View newsletter’s Young Investor column and to work as an analyst for their Dynamic Insurgents portfolio (which is a portfolio of companies that are potential Blue Chips, but are relatively unproven and operate in fast-paced [...]...
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| Playing the Rate Cut Conundrum |
| 2007-09-17 19:31:55 |
With all the fear that exists in the markets today, it seems all the world is waiting on what Mr. Bernanke decides to do with the Fed Fund Rates on Tuesday.
Here are the possible outcomes:
1) No rate cut
2) 25 bps rate cut
3) 50 bps rate cut
After running each scenario through my mind a few times, [...]...
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| Follow TheFinancialWhiz: Navigating My Network |
| 2007-09-03 22:50:25 |
The first week of my final semester is complete, and the job search is now in full swing. For those of you following me in my journey to the job market, updates have definitely been lacking; however, that doesn’t mean I haven’t been busy.
Over the past few weeks, I have focused on talking with [...]...
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| The Death of the Yen Carry Trade? Think Again! |
| 2007-08-16 21:58:43 |
“When there is blood in the streets, it’s time to buy.” Obviously, this saying could not be any truer than the situation that investors all over the world are experiencing at the time of writing this post. Fear and risk grip the global marketplace in a way that hasn’t been seen [...]...
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| What Stock Should I Buy? Four New Winners for Your Portfolio |
| 2007-08-08 00:45:35 |
Just when you thought the list of society’s outcast stocks couldn’t get any longer, I’ve found four stocks in the bunch that are poised for a bounce back to more rational levels. The market correction over the past two weeks has brought these stocks to the front of the pack, and it is time [...]...
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| Getting Where You Want to Go: Advice from People Up the Ladder |
| 2007-08-04 20:46:20 |
These past two weeks have been hectic, but the job hunt is well underway. As of 5 p.m. Friday, my internship with Bank of New York Mellon has come to completion. For those of you who are entering into your junior and senior years of college, keep in mind that an internship provides [...]...
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| Follow TheFinancialWhiz: The Countdown Begins Going from College to Career |
| 2007-07-23 17:32:14 |
I decided that I would document my search for employment as I prepare for my graduation from the Indiana University of Pennsylvania with a Bachelor of Science in Business with a major in finance and a minor in economics.
I have a few goals in creating this series. The first goal is to gain more recognition [...]...
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| Carnival of Investment Strategies - July 20, 2007 |
| 2007-07-20 17:11:19 |
Welcome to the July 20, 2007 edition of Carnival of Investment Strategies.
ETFs
goldguru presents How to Invest in Alternative Energy posted at goldguru, saying, “Diversify your alternative energy investments with a clean energy ETF…”
Sam presents ETF Exchange Traded Funds Are a Great Investment Strategy. Buy and Sell easily. posted at Surfer Sam and Friends, saying, “ETFs [...]...
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| Carnival of Investment Strategies - July 8, 2007 |
| 2007-07-08 06:32:05 |
Welcome to the July 8, 2007 edition of Carnival of Investment Strategies.
Stocks
FitBuff presents FitBuff.com’s Total Mind and Body Fitness Blog » Blog Archive » How to Take Advantage of the Stock Market’s Summer Slump posted at FitBuff.com’s Total Mind and Body Fitness Blog, saying, “Interested in adding to your portfolio or starting a new one? The summer is usually one of the best times to get in the stock market game, and here’s how and why to do it.”
Wolf Stone presents 5 Ways to Gauge Market Sentiment posted at Canadian Economy, Commodities And Mining Stocks Through a Fundamental Lens - Wolf Stone.
Josh presents Why Invest in Stocks? posted at The Mad Money Analyst, saying, “Simply put, of all the possible types of investments, stocks will provide the best opportunity for growth over time and are a great solution for long-term investing. This idea is the core approach of many investors…”
Tyler presents Home Sweet Home De...
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| Chinese Yuan Carry Trade Basket Update - July 3, 2007 |
| 2007-07-03 23:39:15 |
This is an update on the performance of the Chinese Yuan Trade">Carry Trade Basket. The experiment was started with a base of $100,000 on March 20, 2007. I have included the performance figures for both of the experiments that I have been running, although they are the same in composition, I have leveraged them differently.
Since Inception (5 times leveraged basket):
Increase (decrease) in Account Balance: $9,569.53
Increase (decrease) in Unrealized Gains: $18,364.90
Increase (decrease) in Net Asset Value: $27,934.43
Total Portfolio Value: $127,934.43 +27.93%
Since Inception (10 times leveraged basket):
Increase (decrease) in Account Balance: $19,139.05
Increase (decrease) in Unrealized Gains: $36,729.80
Increase (decrease) in Net Asset Value: $55,868.85
Total Portfolio Value: $155,868.85 +55.87%
The Chinese Yuan Carry Trade Basket has been traded for over three months and has given an investor an annualized return of 97.09% and 194.20% respectively. While past performance i...
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| Trade Chesapeake Energy (CHK)? Check Out this Stock Option Collar Example |
| 2007-07-03 03:49:22 |
Marek over at Stokblogs.com wrote a post about a trade involving Chesapeake Energy (CHK). He looked into utilizing a stock option collar on the position, which from my previous post, “Option Collars - Low-Risk, Low-Cost, Market Perform Trading Strategy.” can be explained as holding a stock long, selling an out-of-the-money call option (covered call) and buying an at- or near-the-money put option (protective put). The idea is to use the call premium to finance the downside insurance (cost of the put premium). Below are some graphics with a more detailed breakdown of the CHK trade that Marek described in his post:
The graphic above illustrates the possible outcomes of the CHK trade. It shows that the investor is risking, at maximum, $100 to make up to $900. The total requirement of this trade is $3,600 (100 shares of CHK at $34.60 + Cost of Put Option $4.80 per share - Premium from Call Option $3.40 per share). Therefore, the investor stands to make 25% total profit from thi...
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| 2nd Tip on Becoming a Financial Whiz: How do I Find a Stock to Research? |
| 2007-07-03 03:22:25 |
When I initially first started looking into the stock market about 7 years ago, I didn’t know the first thing about what to look for when trying to find a company to research with due diligence. Most investment books at your local bookstore typically advise the reader to find a company that he is familiar with or one at which he actually shops and invest in that. Apparently this myth has been around long enough for people to believe it, but from my experience, it is the companies and the products that you don’t know about that will help make you wealthy.
One way to identify stocks is with an approach known as “Stock Screening,” which is a technique that finds stocks that match specific criterion. Initially, the investor starts with a pool of all stocks and begins to exclude portions of them by specifying different criteria, leaving only the stocks that match the set criteria for the investor to research further.
When it comes to a stock screener candidate for further researc...
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| TheFinancialWhiz.Com Reaches 5,000 Visitors |
| 2007-07-01 05:42:49 |
I wanted to thank everyone who has found this site and taken something away from it. The site has grown to over 5,000 visitors and is now receiving over 100 new visitors per day.
TheFinancialWhiz.Com launched on January 17, 2007 with the hope of providing a channel of investment strategy ideas to other investors. The site has since become so much more than that and has even sparked the creativity of the site’s viewers to develop variations of strategies that were presented. The site has grown in credibility and one article, Rydex’s CurrencyShares ETFs: The Expensive Truth, was published by Seeking Alpha on June 13, 2007 and featured on Yahoo! Finance.My plan for the future includes creating new innovative investment strategies along with expanding the new series on “Becoming a Financial Whiz” which is a systematic process for a new investor to become knowledgeable in the financial world. If you have any suggestions on topics, please feel free to email those ideas to me....
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| 1st Tip on Becoming a Financial Whiz: How Does the Stock Market Work? |
| 2007-06-21 02:06:57 |
What is the Stock Market? This is the first question that people usually ask when they find out that they can make money somewhere other than a bank. Instead of providing a textbook definition of the stock market, I felt it would be important to provide a graphical understanding of the general dynamics of the market and how it functions.
The above graphic displays how a stock goes first from being a part of a company to its final destination of the investor’s hands—or stock portfolio.
To better understand how a stock is formed, one must first understand how corporations raise capital. Corporations have two options from which they can obtain money to run their businesses; they can borrow (issue debt) or sell equity (issue stock). Each option has its own benefits and drawbacks for the corporation. For example, taking on debt means the company will have to pay the money back whereas issuing stock means giving away some ownership in the corporation; overall, it depends on what directi...
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| Carnival of Investment Strategies - June 20, 2007 |
| 2007-06-21 02:03:42 |
Welcome to the June 20, 2007 edition of Carnival of Investment Strategies. This edition brings a lot of new posters to the site that are looking to share excellent advice from their blogs.
Jason Elder presents What Is Bankruptcy Furniture posted at A Bankruptcy Lawyer’s Blog.
Aaron Wakling presents A Real Eye Opener - Learn The Facts About Your Credit Card! posted at The Credit & Credit Card Blog.
Eric Hudin presents Living Trust Confusion posted at My Estate Planning Career Blog.
Allen Taylor presents Steps to Financial Independence posted at Investing World Today.
Tim Ramsey presents How to Obtain Low Card Interest with Bad Credit posted at My Debt Relief Blog.
Maureen presents Value Mutual Funds :: Empty Nest posted at Empty Nest, saying, “Taking a look at why value funds have outperformed the so-called growth funds”
Eric Stanley presents Getting Money to Finance Your Purpose in Life posted at Personal Finance Blog Articles.
Bonds
Tushar Mathur presents Unders...
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| How to Create Synthetic FOREX Currency Pairs |
| 2007-06-14 02:05:17 |
When trading FOREX, investors usually have major currency pairs at their disposal, but if they wish to trade in some of the exotic currency pairs, their options are somewhat limited. The problem that traders face most often is that these exotic currencies are paired up against either the US Dollar or the Euro; therefore, if someone wishes to trade the Mexican Peso against the Japanese Yen, he would be out of luck. Nevertheless, this trade is possible—it just requires a little extra work on the trader’s behalf.
In the above example of using the Mexican Peso and the Japanese Yen, a trader could accomplish the desired trade by tying the USD/JPY and the USD/MXN together. The idea in doing this would be to have the zero USD exposure, giving the trader the synthetic MXN/JPY pair. For instance if a trader wanted to go long $5,000 worth of Mexican Pesos against the Japanese Yen, he would need to go short 5,000 units of the USD/MXN (short USD/long MXN), giving them a $5,000 short exposure t...
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| The “Expensive” Truth About Rydex CurrencyShares ETFs |
| 2007-06-12 13:39:23 |
Over the past couple years Exchange-Traded Funds have been popping up quickly; first they appeared in the general areas of the market, and now they are moving into the niche markets. In the past year, Rydex has introduced eight new ETFs, known as CurrencyShares, into the market. These ETFs focus purely on currency.
CurrencyShares Euro Trust (Ticker: FXE)
CurrencyShares Mexican Peso Trust (Ticker: FXM)
CurrencyShares Swedish Krona Trust (Ticker: FXS)
CurrencyShares Australian Dollar Trust (Ticker: FXA)
CurrencyShares British Pound Trust (Ticker: FXB)
CurrencyShares Canadian Dollar Trust (Ticker: FXC)
CurrencyShares Swiss Franc Trust (Ticker: FXF)
CurrencyShares Japanese Yen Trust (Ticker: FXY):
According to the Rydex Prospectuses, the ETFs allow investors to buy into a trust denominated in the particular currency that bears interest according to that currency’s particular interest rate.
These funds seem to hit the market at the perfect time—right at the turning point of further ...
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| The “Expensive” Truth About Rydex CurrencyShares ETFs |
| 2007-06-12 13:39:23 |
Over the past couple years Exchange-Traded Funds have been popping up quickly; first they appeared in the general areas of the market, and now they are moving into the niche markets. In the past year, Rydex has introduced eight new ETFs, known as CurrencyShares, into the market. These ETFs focus purely on currency.
CurrencyShares Euro Trust (Ticker: FXE)
CurrencyShares Mexican Peso Trust (Ticker: FXM)
CurrencyShares Swedish Krona Trust (Ticker: FXS)
CurrencyShares Australian Dollar Trust (Ticker: FXA)
CurrencyShares British Pound Trust (Ticker: FXB)
CurrencyShares Canadian Dollar Trust (Ticker: FXC)
CurrencyShares Swiss Franc Trust (Ticker: FXF)
According to the Rydex Prospectuses, the ETFs allow investors to buy into a trust denominated in the particular currency that bears interest according to that currency’s particular interest rate.
These funds seem to hit the market at the perfect time—right at the turning point of further US Dollar depreciation. In the year and a hal...
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| 3rd Tip on Becoming a Financial Whiz: How to Value a Stock - Comparable Ratio Valuation |
| 2007-06-10 05:41:12 |
One of the approaches that the Indiana University of Pennsylvania Student Managed Investment Portfolio utilizes to value companies is known as the Comparable Ratio Valuation. This method uses a spreadsheet that I developed last year in allowing a potential investment to be compared against its closet competitors to find a company’s “intrinsic value.” While this approach may ignore fundamental flaws in a company’s business model, it gives an investor a good base to start analyzing potential stocks to invest in.
To download a copy of the valuation spreadsheet model, please visit: http://www.iupsmip.com/component/
option,com_remository/Itemid,36/func,startdown/id,100/
In the above spreadsheet example, an analysis of Amgen (AMGN) was done and the spreadsheet ultimately found the company to be trading at a discount of about 19% to its peers.
This spreadsheet is not the only determining factor in an investment decision; the sheet is preliminary a tool to analyze and i...
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| One Method of Valuing Stocks: Comparable Ratio Valuation |
| 2007-06-10 05:41:12 |
One of the approaches that the Indiana University of Pennsylvania Student Managed Investment Portfolio utilizes to value companies is known as the Comparable Ratio Valuation. This method uses a spreadsheet that I developed last year in allowing a potential investment to be compared against its closet competitors to find a company’s “intrinsic value.” While this approach may ignore fundamental flaws in a company’s business model, it gives an investor a good base to start analyzing potential stocks to invest in.
To download a copy of the valuation spreadsheet model, please visit: http://www.iupsmip.com/component/
option,com_remository/Itemid,36/func,startdown/id,100/
In the above spreadsheet example, an analysis of Amgen (AMGN) was done and the spreadsheet ultimately found the company to be trading at a discount of about 19% to its peers.
This spreadsheet is not the only determining factor in an investment decision; the sheet is preliminary a tool to analyze and i...
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| The Early Years: Tips on Becoming a Financial Whiz Too |
| 2007-06-09 21:09:44 |
The world of investments is very complex—as are many of the strategies that I have presented on this site over the past six months. The next couple weeks are going to be devoted to introducing investing to someone who has had no prior knowledge. Throughout the next couple editions, I will present the basic premise behind the stock market all the way through your first stock purchase. The following topics will be covered in the following posts:
What is the Stock Market?
How to Screen for Stocks?
Analyzing Potential Positions
Technical Analysis
Buying a Stock
Monitoring Your Investments
The Future
I hope that the above topics will provide the readers with a jump start on becoming a Financial Whiz.
...
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| The Early Years: Tips on Becoming a Financial Whiz Too |
| 2007-06-09 21:09:44 |
The world of investments is very complex—as are many of the strategies that I have presented on this site over the past six months. The next couple weeks are going to be devoted to introducing investing to someone who has had no prior knowledge. Throughout the next couple editions, I will present the basic premise behind the stock market all the way through your first stock purchase. The following topics will be covered in the following posts:
What is the Stock Market?
How to Screen for Stocks?
Analyzing Potential Positions
Technical Analysis
Buying a Stock
Monitoring Your Investments
The Future
I hope that the above topics will provide the readers with a jump start on becoming a Financial Whiz....
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| Carnival of Investment Strategies - June 7, 2007 |
| 2007-06-08 03:23:34 |
Welcome to the June 7, 2007 edition of Carnival of Investment Strategies. The goal of this Carnival is to take submissions from other bloggers who have an interest in developing and presenting investment strategies.
Portfolio Planning
Christopher J. Brunner presents Retirement for the Sole-Proprietor posted at GreatFX Business Cards, saying, “Information on a new and improved way for the sole-proprietor business owner to save for retirement.”
Josh presents Build Your Portfolio Wisely posted at The Mad Money Analyst, saying, “When you first start building a portfolio many considerations are probably running through your mind. Even if you’ve had your portfolio for some time, you may be re-evaluating your past purchasing decisions. But have you covered all your bases? Your first consideration when evaluating your position is defining your objectives. Each individual has unique investment objectives based on your age, financial capacity, employment situation, e...
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| Chinese Yuan Carry Trade Basket Update - June 7, 2007 |
| 2007-06-08 02:10:38 |
Here is an update on the performance of the Chinese Yuan Trade">Carry Trade Basket. The experiment was started with a base of $100,000 on March 20, 2007.
Since Inception:
Increase (decrease) in Account Balance: $7,379.42
Increase (decrease) in Unrealized Gains: $12,751.94
Increase (decrease) in Net Asset Value: $20,131.36
Total Portfolio Value: $120,131.36 +20.13%
Although the Chinese Yuan has been gaining considerable strength over the past three months, declining about 1.31%, my belief is that the currency will tread water for now. The quick decline was due to political pressure placed on China to appreciate the Yuan. I have also been running the Chinese Yuan Carry Trade Basket at double the size of the positions as was presented in the original post. The performance of that fund is just two times the above performance figures. Please check back for further updates at a later time. I would appreciate any suggestions on improving the strategy.
...
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| Chinese Yuan Carry Trade Basket Update - June 7, 2007 |
| 2007-06-08 02:10:38 |
Here is an update on the performance of the Chinese Yuan Trade">Carry Trade Basket. The experiment was started with a base of $100,000 on March 20, 2007.
Since Inception:
Increase (decrease) in Account Balance: $7,379.42
Increase (decrease) in Unrealized Gains: $12,751.94
Increase (decrease) in Net Asset Value: $20,131.36
Total Portfolio Value: $120,131.36 +20.13%
Although the Chinese Yuan has been gaining considerable strength over the past three months, declining about 1.31%, my belief is that the currency will tread water for now. The quick decline was due to political pressure placed on China to appreciate the Yuan. I have also been running the Chinese Yuan Carry Trade Basket at double the size of the positions as was presented in the original post. The performance of that fund is just two times the above performance figures. Please check back for further updates at a later time. I would appreciate any suggestions on improving the strategy.
...
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| Utilizing “Hedge Fund” Mutual Funds to Generate Consistent Returns |
| 2007-05-30 20:45:40 |
The rules regarding hedge fund investing are very strict and they restrict investors with a small asset base from participating in the lucrative returns that come with the asset class. However, there are mutual funds currently employing strategies typically seen in hedge funds. The construction of this portfolio strategy is similar to that of a “fund of funds” hedge fund approach, which invests in different hedge funds that use various investment strategies. The approach of purchasing many “hedge-fund” mutual funds, gives the investor diversity which combats the potential risks that come with investing in individual management firms and potential fund-related risks.
The back-test of an approach utilizing the “hedge fund” mutual funds shows comparable returns to that of overall equity markets—with much less volatility. The portfolio appears to be a great hedge against market downturns because the strategies used in the majority of the funds are long-short, which involves g...
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