Candlestick Trading Blog: February 2008

February 29, 2008

Commodity

This includes anything in which there is a demand for and the price is determined as a function of their market as a whole. Investors typically buy and sell commodities through futures contracts and the prices are subject to supply and demand. Examples include metals, soybeans, sugar, rice, wheat, gold, silver, crude oil, ethanol, pork-bellies, generic pharmaceuticals, silicon chips, currency, RAM chips, and many more. Additionally examples include any product which trades on the exchange, such as foreign currencies (foreign currency trading), financial instruments, and indexes. Commoditization occurs as a goods or services market loses differentiation across its supply base, often by its distribution of the intellectual capital necessary to acquire or produce it competently. What qualifies as successful tradable commodity? For starters, successful trading must be standardized and if it is industrial or agricultural it must be unprocessed. It must have a sufficient shelf-life, if agricultural, and there should be adequate fluctuation in the supply along with the price. Without this fluctuation, there is no risk factor making the profits insufficient and monotonous. How does a stock differ from a commodity? Commodities are held for a very short period of time unlike stocks that can be held for long periods of time. Futures contracts are used to hedge the price fluctuation risks or take advantage of price movements instead of trading the actual cash commodities. Foreign exchange trading and stock trading both are very different. The main difference is the earning potential. This can best be explained in that the currency exchange offers earning potential regardless of the ups and downs of a country’s currency. When playing the stock market, however it is highly unlikely that an investor will gain earnings with a down trend market. How do I do this type of trading successfully? It is important that every investor understand the true reality of this market. It is one that mathematicians have repeatedly shown to be “chaotic”. In fact, they have shown that this market is highly random containing a small trend component. Successful traders realize that there will be losses, and that even the best of trading plans will result in many losses. The difference between the winners and the losers is that bad traders take losing as a sign of failure while the good traders just shrug it off and keep on going! You must be able to handle the psychological aspects of trading commodity. This is not meant to discourage you, but rather to ease the pressure that you may feel when trading in this market. Remember that patience is a virtue! Conclusion Commodity trading requires the successful investor to demonstrate good judgment and to manage risk effectively. You must choose an investing strategy that you are confident in and strictly stick to the plan. As you practice your method for trading, you must make tweaks and updates your plan as needed. The balance between sticking strictly to your plan and tweaking it as needed is not as tricky as it sounds. Once you make a change, stick to that change, and don’t second guess yourself! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 26, 2008

Currency Exchange

Investors and speculators are allowed to trade currency from all around the world through forex trading. The forex market exists wherever one currency is traded for another and the large international banks are still the major traders in currency exchange. Foreign exchange trading generally works as an international currency exchange market and is a very unique type of trading where traders buy and sell money at the same time. Fx trading was only made available to the public in 1998 when big sized inter-bank units were sliced into smaller pieces and offered to individual traders. It is the job of the forex broker to complete this before offering smaller units to the individual investor. With the rapid growth of the internet trading forex has become one of the most popular types of trading for many successful forex traders who opt to work from home. This market yields an average turnover of $1.9 trillion daily and the trades are completed between two counterparts through electronic or telephone connections. The forex trade is done around the clock 24 hours per day and there is no central location like with trading stocks or trading futures. Foreign currency trading and the stock market work in a different manner. Neither the currency exchange nor the stock exchange are considered one better than the other, but the investing concepts behind both are very different. The currency exchange offers equal earning potential regardless of the rise and fall of the country currency while stock market trading depends a lot on stock market trends. You will find very few stock traders who gain in a down trend market, while the rise or fall of currency will only affect it value relative to other currency and will not affect chances for profit. The currency exchange also allows for forex day traders to take small daily profits while entering and exiting the market in the same day (forex day trading). While there are day-traders who trade stock, the majority of stock traders are more interested in long-term trading in which a particular trade may last for months or years. Fundamental Analysis in the Currency Exchange Market For those investors interested in practicing fundamental analysis when trading currency, there are a few factors to consider. Government policies, natural disasters, speculator moods, and bank policies are a few things to consider but basically these investors focus on the core underlying elements that influence the economy of a particular entity. The currency exchange calls for the review of a country’s economic situation and for specific methods required to accurately enter and exit the market. Technical Analysis in the Currency Exchange Market For those investors interested in practicing technical analysis, they know that they must find potential price reversal and pivotal points. They follow the result of the market trends as it relates to the use of technical indicators, and they don’t necessarily care why these market trends take place. Technical analysis tools are used not only in currency trading, but also with commodities, options trading, and with futures. The currency exchange market is growing more and more popular by the day. Whether you use fundamental and technical analysis separately or together, it is important to understand all aspects of the forex markets. Invest in yourself through education before attempting to practice this type of trading and your efforts should pay off. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 22, 2008

Trading Commodity

Trading Commodity as an Investment Channel Trading commodity, also known as futures trading, is the trading of contracts called futures contracts. These contracts provide the owner the power to trade the underlying commodities at somewhere in the future for a fixed rate. The rate is the price rate of the contract creation and like stock trading and options trading, trading commodity is done in precise centralized futures commodity trading markets. Commodity trading is not always complicated, unlike the stock market, where there are over ten thousand potential stocks and mutual funds. There are actually only about forty viable futures markets to trade and they cover an array of market sectors. Trading commodity is becoming more and more popular due do the simplicity of this type of trading, the liquidity of the market, the stability of the market, price stabilization, the low transfer rate, the ease of which to set up an account and trade from home, and for many more reasons. Futures contracts, mentioned previously, usually consist of two types of contracts including commodity futures contracts and financial futures contracts. Commodity futures contracts end with a physical delivery and may include agricultural commodity futures like wheat, oats, soybeans, rice, and sugar. Trading commodity through the use of financial futures contracts ends with cash settlement and includes futures for treasury notes, bonds, mutual funds, and the like. Methods for Trading Commodity There are two primary analytic methods used when trading commodity. These methods are fundamental analysis and technical analysis. Technical analysis involves the analysis of past price action of the market itself to forecast the likely future price action. Almost all successful traders emphasize the use of technical analysis when trading commodity. A couple of reasons for this include first, the difficulty in obtaining accurate fundamental data, and second the argument that the most knowledgeable commercial participants are actively trading the markets, so the current price trend is the most accurate assessment of future supply and demand. Trading commodity through the use of fundamental analysis involves the use of economic data relating to supply and demand to forecast future price action and there are many that practice this method. They believe that understanding the reasons for price movements is important, rather than just following the price action when commodity investing. Purpose of Trading Commodity The first and most obvious reason for trading commodities is to turn a profit. The other reason is to hedge, which means the trader must minimize risk by attempting to purchase some form of insurance. This is also known as hedging and one way to achieve this is known as the spread. (Examples of this include a bull call spread and bear call spread) Trading commodity means to either “go long” or “go short.” “Going long” means to buy a contract while anticipating that the price will rise before the contract expires. “Going short” means to sell the contract while anticipating that the price will drop before the contract expires. This method of selling short is one that is very difficult for many traders to understand. Basically, the concept when “going short” is that the contract is sold by the trader before the trader even owns it. That again, is a very hard concept for investors to wrap their heads around when trading commodity. Conclusion It is important to learn about both fundamental and technical analysis if you are interested in trading commodity. Before you know which method works best for you, you need to learn about both. Once you decide on the preferable method, learn as much as you can and invest in yourself through taking classes and reading books on trading commodity. Education is important to ensure successful trading! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 19, 2008

Gold Market

Gold Market History Gold has played a unique role in commodities markets throughout history and has been the basis for monetary systems or has been used for coins. It is sought after for its physical properties or for its beauty and is also used as a store of wealth. Gold is seen as an alternative to the U.S. dollar and like all commodities, its price is driven by supply and demand. Investors analyze the gold market by looking at the price history in order to gain insight into the market. They do this by comparing current and historical situations, and the factors that give rise to them, in order to determine future commodity prices for gold. Successful traders perform a wide range of analyses in order to understand how and why the gold market moves. For example, history shows how the price of gold rises and falls in line with the stock prices of gold-producing companies. The price of gold also typically rises on the U.S. dollar weakness. Gold investing requires the need for investors to keep abreast of price data and of key events affecting the market in order to invest in gold wisely. A Look Back at the History of the Gold Market The Sumerians of Mesopotamia first used gold as sacred, ornamental, and decorative instruments in the fifth millennium B.C. At the same time the Egyptians actually began gold refining. The Egyptians mostly used gold for the prime purpose of personal adornment and not for monetary or purposes. The very first significant private issuance of pure gold coins was under King Croesus who was the ruler of ancient Lydia in 560-546 B.C., now known as Turkey. Skipping forward centuries, the world’s first major Central Bank (Bank of England) was established as a joint stock company. The bank was actually formed for the purpose of making a loan in the amount of 1.2 million pounds to William III, who ran up huge bills in his continental wars. The Central Banks actually had two purposes in relation to the gold market. The first was to lend to Monarchs and the other reason central banks were established was to bail out private bankers when they were caught out in issuing more paper than they had backing in gold. The gold market initially was not necessarily seen as a mechanism for investing money, but rather as a mechanism for lending money. The UK adopted a gold standard after the Napoleonic war in the early 19th century. The U.S. adopted the gold standard in 1879 by making “greenbacks” that the government issued during the Civil War period. In 1914 it was apparent that the gold standard was widely accepted by many countries, although it was not yet universal. The gold market called for fixed exchange rates and provided that any paper currency could be exchanged for gold at the central bank that issued it. The underlying concept was that any deficit country would have to surrender gold to cover its deficit. In the gold market, foreign exchange trading, under the gold standard, allowed exchange rates to fluctuate within limits determined by the costs of shipping and insuring gold. Investing in gold became a concept tweaked a lot by the UK and U.S. with the result that the volume of money of the deficit country would be reduced, leading to lower prices, while the influx of gold into the surplus country would expand the volume of that country’s money and lead to higher prices. Interesting Fact about the Gold Market There is gold stored at the Federal Reserve Bank of New York that is secured in a vault that rests on the bedrock of Manhattan Island. It is one of the few foundations strong enough to support the weight of the vault, its door, and the fold inside the vault. It is 80 feet below street level and in 1997 it contained about 30% of the world’s official monetary gold reserves. At the time the gold value was eleven billion at the U.S. government price. The gold market and the principles underlying commodity trading are interesting concepts to learn about. The gold market has played a very unique role in the formation of commodity investing throughout history and the world. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 18, 2008

Portfolio

Portfolio – Optimal Asset Allocation So you think you’re either ready to create or reevaluate your portfolio? Think skittles. Yes, skittles that chewy candy that you either used to eat as a child, or those little bits of candy you find scattered around your house and in your car if you have children. In any event, when you build it, it should resemble a rainbow of colors, or in financial terms, it should contain an array of asset classes so that it is well diversified. Portfolio diversification is a widely universal concept that is accepted by most investors and a concept that earned Markowitz the Nobel Prize. He developed this theory which sought to prove that a diversified or “optimal” portfolio could be practical. The techniques for measuring the level of risk associated with various assets and his methods for mixing assets became routine investment procedures. His concept means to mix assets so as to maximize return and minimize investment risk. You must spread your risk by investing in a mixture of stocks, bonds, mutual funds, and other investment vehicles. Your portfolio should be well-balanced and it should contain investments with varying levels of risk in the event one of the investment holdings declines significantly. Asset allocation will assist you in getting where you need to be. This idea of asset allocation is literally that. You decide how your investment dollars should be allocated across classes such as stocks and bonds, mutual fund investing, options trading, gold investing, hedge fund investing, etc. The basic principle underlying asset allocation is that different classes of investments have shown different rates of return on investment and levels of price volatility over time. The last think you want to do is to “put all of your eggs in one basket” and lose everything. Some investors opt to perform portfolio management via the use of a portfolio manager. If this is the route you would like to go, keep in mind a few things. First of all, you must be sure that the manager you chose understands the level of risk that you are comfortable with. You must be on the same page when it comes to this. The investment professional should ask you questions in order to gauge this. Then it is their job to ensure that they tailor your risk level towards building a strong portfolio for you. This position manages groups ranging from small independent funds to large asset management institutions. It also includes the selection of what assets to actually purchase, how many to purchase, when to purchase them, and what assets to divest in. Performance measurement is crucial to this process and most typically includes the expected return and the risk associated with the return. Regarding diversification, it is important to note that it almost naturally occurs through investing in mutual funds. Most mutual funds invest in one dozen to hundreds of securities. When an investor purchases shares in a mutual fund it reduces the exposure to any one security and in addition you get the advantage of a money manager making investment decisions on your behalf. There are different types of mutual funds to choose from ranging from mid cap funds, small cap funds, blue chip funds and many more. They are categorized by the way they yield return to investors and can be fixed income, growth, global, core, mixed equity and sector. The investment options discussed above are important but will only get you halfway there. You can also look to invest in real estate, money market accounts, retirement accounts, and other investment vehicles. The possibilities are endless, but with the right amount of knowledge, research, and guidance you can build a collection of investments that will make you very financially comfortable. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 15, 2008

Stock Market Terminology

Utilizing common phrases found in our stock market glossary and options trading terminology, one of our members had a little fun composing the poem below. *Good-till-Cancelled* Since my love began to trade It seems my looks began to fade I’m valued less than a penny-stock It seems he can’t find time to talk His language has become no fun Exactly what is ‘all or none’? His thoughts have been consumed with stocks He stares at stock screens round-the-clock Before I reach my expiration I share my thoughts of desperation To put it in language you can understand I offer this; my price demand My dear your Options may run out Unless you’re looking to ‘cash out’ Your face value is risking recession Spare me from another bull session At the risk of sounding too cliché Your Intrinsic Value is approaching decay Your annual report is looking quite thin Don’t be expecting any dividends Naked Puts are out of the question My thoughts are turning toward aggression To share with you in full disclosure My implied volatility is nearing exposure Dreaming of hangmen as I nap Your only hope is a breakaway gap For unless this pattern trend reverses I see a row of long black hearses It’s not too late for an upside gap Unless, my dear, you remain a sap. Author; Pat Johnson, aka Stock Market Widow www.westmarkassociates.com *Copyright 2008 by Westmark Associates, LLC* Please respect our copyright. Feel free to post to your Website by including the entire article with Author, copyright and website address. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 12, 2008

Gold Investment

Gold Investment 101 Many investors are interested in investing in gold again as it has shown strong return over recent years. For thousands of years, gold has been valued as a commodity, a global currency, and as an object of admiration due to its beauty. During 1980 through the 1990’s the use of gold investment methods declined in popularity and were seen as an asset of last resort. Gold investing is now coming back into the picture as it offers enhanced portfolio diversification in comparison to other assets. Past performance for gold investment methods has shown that a small allocation to gold can significantly improve the consistency of portfolio performance while alternative asset allocation and the traditional diversifiers often fail during times of market instability. Many investors seek gold investment opportunities due to the consistency of performance during both stable and unstable financial periods. The usual point of reference for the price of gold is the London Gold Fixing. This is a meeting that takes place two times each day that includes representatives from five bullion-trading firms. There are numerous gold investment methods available to investors. These may include investment in gold bars, coins, certificates, accounts, exchange-traded funds, through spread betting and derivates, and lastly through becoming a shareholder in gold mining companies. Gold investment through buying bullion gold bars is the most traditional method for investing in gold. They are available in various sizes and in some countries you are able to buy them “over the counter” at major banks. Gold certificates allow investors to buy and sell the security without the hassle of transferring physical gold, and gold accounts typically include the ability for investors to instantly buy or sell gold in a way similar to foreign currency trading. Gold exchange-traded funds are traded like shares on the major stock exchanges including the London Stock Exchange, the New York Stock Exchange, and the Sydney Stock Exchange. This type of gold investment is fully backed by gold that is both deposited and insured. The inventory is managed by buying and selling gold on the open market. Some firms offer the ability to take a bet on the price of gold through what is known as a spread bet. Possible gains or losses are dependent upon when the seller closes the bet and no commission or taxes are levied. Another gold investment method is known as gold derivates. These include gold forwards, gold futures, and gold options and they are currently traded on various exchanges around the world and are traded over-the-counter directly in the private market. The last investment method to discuss is actually not an actual gold investment itself but is actually and investment in gold stocks in mining companies. If the gold price rises, the profits of the gold mining company could be expected to rise causing the share price to rise. However, this does not necessarily mean that the share price will rise when the gold prices increases due to the many factors that affect the share price. The practice of gold investment methods is more desirable during certain economic times. In times of war, or other national crisis, people fear that their assets could be seized and that currency may become worthless. Gold is seen as offering solid asset protection and as a commodity that will always have value. Bank failures of course, as witnessed during the Great Depression, are also seen as a time when gold is more desirable. Lastly, gold investment methods are popular when the economy is suffering from low or negative real interest rates. If the return on investment for other asset classes such as bonds, equities, and real estate are not compensating for risk and inflation then the demand for gold increases. Gold investment is unique in that it does not carry a credit risk and the value of gold cannot be affected by the economic policies of the issuing country or undermined by inflation in a country. It is for this reason and many others that successful traders chose to invest in gold. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 8, 2008

Investment Ideas

Out-of-the-Box Investment Ideas for 2008 With the economy in its sensitive state, many investors are looking for out-of-the-box investment ideas to discover new and better investing ideas. Others are looking to practice what is called “ethical investing” as a result of Enron’s fall and many are sitting tight and are staying the course with their initial 2008 investment ideas. Below we look deeper into these topics to discover how other investors are behaving and managing to their stock portfolios. Many investors are interested in buying common stocks to add to their strong portfolio but they are unsure of how to go about it. There are convenient places to discover possible profitable opportunities that are right under your nose. For instance, you can take a trip to a grocery store, mall or even a convenience store to discover potential stock investments. u; All you need to do is jot down a list of popular brands that you see and find out the name and address of the manufacturer. You can then search the internet or just call the company and ask the company if it is publicly traded. If they are, then request an annual report to see if you should become a shareholder. Other investment ideas are simply asking your spouse or children. They are interested in many different things that you may know nothing about, but that every teenage girl, boy or mother knows about. Your family will also probably appreciate that you are interested in learning more about them! You may also want to review the value line investing survey in addition to your other investment ideas. This can either be purchased or you can view it at your local library for free. This survey provides data and historical figures on hundreds of companies. This may assist you in finding what you consider hot stocks that you can add to your portfolio. You should also get your hands on the S&P’s Large Cap Stocks, Mid Cap Stocks, and Small Cap Stocks Guides that are released each year to find additional investment ideas. These are three separate guides containing historical data on selected companies. These reports include a number of items, such as the full company name, ticker symbol, industry, contact information, dividend records, officer listing, and the business summary. Look at the earnings, return on equity rates, and the debt levels for the past several years and jot down those companies that look interesting. Once you have selected the companies of interest, call them and request their annual report, or try and obtain it online. These investment ideas could serve you well as long as you do a lot of research on those companies that you decide you would like to buy stock in. Mentioned earlier in this article was ethical investing as one of the many investment ideas. It is pretty sad that we have to come up with a term for this as if all other investing is unethical. In any event, many successful traders are no longer satisfied with their personal finance arrangements that are built upon companies with questionable practices. This trend is actually one that is becoming increasingly popular in the area of Christian financial planning and investing, although it doesn’t necessarily have to be Christian ethical investing. There are a couple of ways that you can get involved in ethical investing. One is to find index funds and mutual funds that are committed to screening for ethical investing opportunities. You can also perform your own research based on your own principles. These could include things like environmentally responsible companies, or companies that encourage alternative energy. Just keep in mind that this is one of many investment ideas, and realize that ethical investment options are more volatile than the giants of the industry that have been around. It is important to continue researching the internet to find other new investment ideas. Research is the key to any type of investing that you are interested in so be sure and spend the time required to make wise investment decisions. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 5, 2008

Investment Funds

Types of Investment Funds There are many different ways to invest your hard-earned money. Today’s article includes a description of various types of investment funds including mutual funds, index funds, bond funds, stock funds, and hedge funds. Mutual Funds Mutual funds allow a group of investors to pool their money together with a predetermined investment objective. When investing in mutual funds, you are buying shares of the mutual fund and you become a shareholder of the fund. The advantage of a mutual fund is that investors can purchase stock and bonds with much lower trading costs than if they tried to purchase them individually. These investment funds typically have a fund manager who is responsible for investing the pooled money into specific securities. Mutual funds allow you to make money three different ways. Income is generated in the form of a distribution from dividends on stocks and interest on bonds. These investment funds also have capital gain if they sell securities that have increased in price, also distributed to investors. Lastly, if the funds holdings increase in price but are not sold by the fund manager, the fund’s shares increase in price allowing investors to then sell mutual funds shares for a profit. The most important advantage to mutual fund investing is that it leads to great portfolio diversification. Index Funds Index funds are mutual funds that attempt to copy the performance of a stock market index. These investment funds are perfect for the buy and hold investor with an expense ratio of about 0.18%. The reason for this is that index funds delay the capital gains because they hold onto stock much longer and trade stock less often. This means that the money that would have been paid out in taxes actually keeps producing investment returns. These investment funds also have lower fees because of the same reason in that they are less actively managed and can be managed by a much smaller staff. Bond Funds In order to understand these types of investment funds, you must first understand what bonds are. They are simply put, a loan in the form of a security. They are promises to buy back the original amount (principal) plus interest and are considered less risky than stocks. A bond fund is a mutual fund that invests primarily in bonds or other debt securities. The borrower is typically the government or corporations in order to raise money from the public. Types of bond funds for bond investing include U.S. government bonds funds, corporate bond funds, high-yield bonds funds (junk bonds funds), and municipal bonds funds. Stock Funds When investing in stock there are many different types of investment funds. There are value funds which are stocks that have a low price to earning ratio meaning they have earning power or that they have value in their underlying assets. They are basically cheap stocks that have great potential. Another type of stock fund is a growth fund. There are many different types of growth funds, but basically if you are seeking high long-term returns and can tolerate the normal ups and downs of the stock market then this is for you. When looking at long term investing, growth funds should be the core holding around which an investor’s strong portfolio is built. Other types of investment funds in this category include growth and income, equity-income and balanced funds. Hedge Funds These types of investment funds are often used when the stock market is doing poorly. They are often mistaken for mutual funds even though they are not. Hedge fund investing is private and is therefore not regulated. It is a private pool of investment capital organized into a limited partnership to invest in a portfolio made up of a variety of securities. There are limited partners (499) that can invest in any one hedge fund and there must be an accredited investor with a net worth of about one million. The liquidity varies from monthly to annually and most hedge fund investment strategies try to hedge against downturn in the markets. There are many ways that successful traders choose to practice money management and to participate in trading and investing. The above is only a quick snapshot of the many different investment funds available to investors. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

February 1, 2008

Investment Broker

Do You Know What Type of Investment Broker You Need? An investment broker is an individual who brings together buyers and sellers of stock and acts on behalf of them. He or she must have a license to operate and must also charge a commission on trades executed per the instruction of buyers and sellers. If you are looking for a broker, it is important to note that there are a few types to choose from depending on your investment needs. In this article we will discuss the discount broker, the deep discount broker, a prime brokerage firm, and online brokers. Online brokers pretty much encompass the other broker types, however, due to the increasing popularity of internet trading. Another name for an investment broker is also the most commonly used term stock broker. Stock brokers must pass two licensing exams in order to advise clients, execute transactions on their behalf, and to solicit business from potential investors. Online trading has taken off over recent years due to the rise in technically inclined investors and the popularity of the internet. Investors are able to access account information immediately and are allowed to trade stock 24 hours a day. For those investors who would like a little human interaction with an investment broker, they can opt to utilize the services of a broker however it will come with a higher fee. There is also the option of utilizing a deep discount broker. Deep discount brokers allow the investor to place trades over the phone without having to talk to a real live person when selling or buying stock. Discount brokers offer some of the same services as a full service broker. They execute trades on the investor’s behalf when told to buy, sell, short, etc. The main difference is that they do not offer investment advice like the full-services investment broker. The discount broker is for those successful traders who require less hand-holding and therefore don’t want to pay for full services. When discussing the investment broker, it is also important to note the prime brokerage firm that offers bundled packages of services offered by investment banks to hedge funds. Hedge fund investing through a prime broker provides a centralized securities clearing facility for the fund. The hedge fund’s collateral requirements are netted across the deals handled by the prime broker. The main services bundled by the investment broker and provided by the investment bank typically include the same services regardless of the actual investment bank. The package usually contains operation support provided by the prime broker in which he or she will engage with the other broker dealers. Also included in the package is securities lending and global custody. It includes financing to facilitate leverage of the investor’s assets and also includes customized technology for purposes of reporting the client’s (hopefully) strong portfolio. When shopping around for an investment broker you must ask many questions about its customer service department. Ask for customer references, research the firm on the internet, and if you are trading stock online, ask about their back-up policies if their site is down. If you are comfortable with a computer, and don’t need the comfort of a real-life person, look into trading stocks via an online discount broker. Ask your fellow investors for referrals if possible, but still conduct your own research to ensure that the investment broker that you decide to go with fits your trading style and personality. Now that you know a little bit more about the investment broker and the different levels of services provided, you can continue to research brokerage firms until you find the one you are comfortable with. Good luck and happy hunting! Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

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