Investment Advisors
Investment Advisors – Get the Best Advice and Return on Your InvestmentsInvestment advisors are professional firms or individuals that advise clients on investment matters. They typically receive compensation for providing advice on investing in stocks, bonds, mutual funds, and they may manage portfolios of securities. They can fall into two categories including those investment advisors who offer direct financial advice to individuals or businesses, or those advisors that offer asset management and asset protection typically for corporate clients, hedge funds, and mutual funds. Investment advisors are also know as “financial advisors” and also include pension fund managers, mutual fund managers, trust fund managers, partnerships, individuals, and corporations. Stock brokers do not fall under this same title since they are normally not registered advisors. Advisors who have sufficient assets to be registered with the SEC are known as a Registered Investment Advisors (RIA). They are prohibited from distributing advice known to be deceitful or fraudulent.
Why utilize investment advisors?
Many investors are intelligent individuals who are well-versed in the market, educated, and have achieved success in their professional lives. Unfortunately, many have a hard time with their investment timing and do not know the best way to achieve a successful return on investment. In addition, a lot of investors allow factors such as the media and greed and fear, to determine how they are investing money. Investment advisors can assist with those investors who want to learn how to invest wisely and get the best returns on their investments. Many investors also hire investment advisors because there are very limited conflicts of interest between the advisor and their clients. This is due to the fact that the advisor will only earn more if the client’s asset base grown as a result of recommendations and securities made by the advisor.
How are investment advisors compensated?
They are generally paid in any of the following ways:
1) Fixed fee
2) Hourly fee for time spent working with client
3) Commission on the securities they sell
4) Percentage of the value of the assets they manage for their client
5) Combination of any of the above
What services do investment advisors provide?
Before you decide to hire a financial advisor to assist you in investing your money, it is very important that you are clear on the kinds of services available to you. You also must know of possible restrictions for what your advisor can recommend, exactly what services you will pay for, the cost of those services, and of course how the firm’s investment advisors are compensated for those services. The majority of their time is spent researching, deliberating, and analyzing the open market. It makes sense that investment advisors would have a better notion for the market as well as market movements, since they spend so much time doing this. Investment advisors do mostly all of the legal work required including the research and analysis mentioned above. Their primary focus is again kept on the market, and in the area that they specialize in, whether it is mutual fund investing, stocks and bonds, hedge fund investing, etc.
Investment advisors come from many different educational and professional backgrounds. Before you decide to hire an advisor, please be sure that you ask about their background and credentials. Then take it a step further and find out what organization issued the credential, what it means, and call the organization to confirm. You can find out through calling the organization whether or not the advisor remains in good standing with the organization. Doing these things will lead to better investing and will allow you sleep better at night knowing your potential retirement investment is in good hands.
Market Direction: This is obviously where market conditions make a statement by the Japanese Rice traders "Let the market tell you what the market is doing". How are market patterns formed? With reoccurring conditions of investor sentiment! This can be witnessed in the Dow chart right now. The volatility of the market has been experienced now for the past four weeks. Ever since the dramatic Hammers of mid-January, any price move has experienced extremely conflicting sentiment; big up days followed by a down days. The most recent trading has seen dramatic changes of investor sentiment on a daily basis. One day a Hammer signal followed the next day by an Inverted Hammer signal. Strong selling in the morning followed by strong buying in the afternoon. The next day, the reverse happens.
One factor becomes very obvious. The market has no direction. This trading volatility is forming a well-known pattern, a Pennant formation. As Rick has so well described, the Bulls and the Bears are squeezing their decision making down to a very compressed range of trading. What is the result of this formation? A breakout when it comes to a point. Being prepared for that breakout allows the Candlestick investor to scan for the most appropriate bullish and bearish candidates.
DOW
Are there opportunities during these types of market conditions? Certainly! Knowing what constitutes a strong buy or sell signal allows an investor to still make profitable trades even when general market conditions do not show a bias one way or the other. Finding chart patterns that include 'gaps' provides relevant information. As illustrated in the MTH chart, a gap up after an Inverted Hammer signal shows inordinate strength. Adding the fact that the Inverted Hammer formed right on the 50 day moving average, 20 day moving average, and T-Line as they were crossing, creates additional relevancy. Add the analysis of a possible Jay-hook type pattern setting up; this makes for a viable trade in spite of market conditions.
MTH
The gap is an investor's best friend. Using gaps in conjunction with candlestick analysis creates a huge advantage. What does a candlestick reversal signal indicate? There has been a change of investor sentiment. When a gap occurs after a candlestick buy signal, what does that reveal? It reveals that not only has there been a change of investor sentiment in a trend but the new sentiment incorporates very strong buying. The best and most powerful trade setups are the combination of a candlestick signal followed by a gap in price.
IPCR
Many investors are very leery about buying a stock that is already up 5%, 10%, 30%, or even higher. However, if a gap-up in price can be identified to be occurring in conjunction with a candlestick reversal signal, that becomes a very promising scenario. Utilize the information that a chart provides. Keep in mind, the candlestick charts are the cumulative knowledge of everybody buying and selling during a specific timeframe. There will be many buy signal or sell signal candidates during any time frame. For the investor that wants to maximize the use of their funds, identifying where the strongest price moves will occur is a high priority. If you understand the logic behind the candlestick reversal signal, followed by a gap, you will always have a source of high potential profitable trades.
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Good investing,
The Candlestick Forum Team
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