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This is part 2 of the four part series on the discussion of principles of investment in the stock market. In the first part, the first principle involved realizing that the stock market is just another investment vehicles and that before you start investing in the stock market, you must realize that there are other vehicles of investments. We continue by discussing the next two principles. If you wish to view the entire article, please visit my blog.

2.) A roller coaster ride – It could be said that the biggest advantage in investing in the stock market is the huge profits that are made when the market goes up. However this is also conversely true because huge losses can also be made when the market goes down.

The general strategy is to sell when the market is up and to buy when the market goes down. About two years ago when I started investing, the Philippine Stock exchange index was only about 2000 + points. I’ve seen it go up to 2500 points and slide back to the 2000 level in the middle of 2006. It slowly and steadily climbed up to the 3200 level in the 1st quarter of 2007 and dropped in a very short period of time during the last days of the 1st quarter of 2007. It climbed steadily to a high of 3700+ points in July 2007 but slid back below 3000 points a month after. By October 2007 it climbed steadily to its highest at 3800+ points. A month after it dropped to 3600+ points.

The point here is that it is really a roller coaster ride. Profits and losses are made during those up and down moments of the market.

3.) You should determine what type of investor you are – Are you a long term investor or a short term investor? This is a very important question that each serious new investor should consider. This affects whether you should buy or sell a certain stock.

Long term investors hold their stocks for 5 to 10 years. This means that that they believe in the company that you are investing in. This also means that and that they have extra money for other things because they can afford to put in their money for a long period of time.

Long term investors also do not have to worry about the gruesome day to day technical analysis that has to be monitored. For as long as they believe in the fundamentals of the company there is no problem if the stock is held for a long period of time. But if you are a short term investor, that means you decide to cash in within a months time to 6 months time, then you should consider several things. You have to monitor the day to day activities of the market.

Like the long term investor, you have to make sure that you can afford to put in your money for a long period of time but not as long as the long term investor. The reason for such is because during the short period wherein you plan to invest and pull out your stocks, you may incur losses during that time so you may decide to wait a little longer.

Most of the stocks I hold are considered as medium and long term investments. This is because when I started out I determined to be more of a long term investor. There are stocks that I hold that I consider as short term investments. However majority of the stocks that I hold are considered as medium to long term investments.

Would you like to know more about investment strategies ? Visit the blog of Zigfred Diaz where he writes about several interesting topics such as investments, financial management, business, making financial online and Stock market investing

Once young people make the transition to college, they want to be able to get around so that they can explore and enjoy their new found freedom. During an economy crisis, parents may be weary and concerned about how they can help their college student with their transportation needs without it costing the family an exorbitant amount of money. Here are three great and cheap ways that everyone can get what they want…students can get around and parents can keep some of their hard earned cash in their wallets:

Bus it! Using public transportation is one way that many people are able to get around without the expense of maintaining a vehicle. This economy crisis and the high gas costs have made it more feasible for people to use buses, subways, and trains more often. Students usually qualify for low price tickets or special pricing for monthly passes for unlimited riding. Students can buy for cheap a bus or transit pass as they learn the different routes to meet their own personal travel needs.

Always encourage them to use school provided transportation when available. Many colleges and universities will offer students free transportation to popular local venues. The cost is often incorporated into their university fees. This can be a great benefit for students that need to go to places within walking distance of the various university bus stops. Not only is this a chance for frugal students to get around and save, but it is also a safe alternative that parents can appreciate.

Encourage your frugal student to create a carpool or ride share program at their school. It’s fairly easy to set up and would allow for everyone involved to save money and still do their local travel around town. These types of ride share programs work great for students that don’t have any other transportation access and for students that work at common places like malls or city centers.

The way that a ride share program would work is that those who have a vehicle would charge a small fee for others to ride along to these places. The fee could cover the cost of gas and possibly insurance for the students. Students without vehicles benefit because they can buy for cheap rides all over the place, and their parents don’t have to worry about paying high insurance bills or keeping their gas tanks full.

Set a gas budget for students with vehicles. If your college student just has to have his or her own wheels, then, it is best to set a budget for their gas expense. This will help them to learn to manage their time and resources. When students understand that they can only spend a certain amount of money, which parents can regulate by providing students with a gas card or prepaid credit card, they will limit unnecessary travel.

One of the best things that you can ever teach your college student is how to practice money saving, cost-consciousness, and careful spending. Tell him or her to buy for cheap their gas so that they can stretch their budget and still have gas to get to all of the places that they want to go. College is about learning to be a responsible adult. Finding ways to save and still enjoy life are a big part of that. When it comes to your college student, help them to become the frugal fashionista that they need to be to take care of their transportation needs by researching and spending wisely during the economy crisis, and for the rest of their lives!

We’re all trying to get more out of life, but there’s often a disconnect between the actions we take and the goals we’re aiming for. The reason for this is that we treat ourselves like workers instead of treating ourselves like the boss. When you’re an employee you basically do what you’re told without asking many questions simply because that’s your job. You may screw around and you may take your time because, generally, you have little personal interest in the job before you.

When you are a manager, you have much more to gain, or lose, if you don’t do a good job. To act more like a boss you simply have to treat yourself like a factory instead of a person. If you want to turn your life around in some key areas, you have to manage your life, not just try to work harder.

Manage Your Wealth: Sure, you know you have control over how you spend your money, but you also have control over how you make your money. Sure, you know you have control over how you spend your money, but you also have control over how you make your money. Starting your own business, no matter how small, is a great way to begin controlling your money and gaining more confidence in controlling your ultimate financial destiny.

Managing Your Health: You can control how much you exercise and how much you eat, so you can largely control your own health. By managing your thoughts you can often improve or harm your health. Experts are now understanding the connection between mind and body and many believe that your thoughts play an important role in your bodily health.

Managing Time: Finding the time to get things done during the day is one of the most important skills you can learn. You need to treat your schedule as a manager would: prioritize the things that have to get done and the things that need to get done. Once your gain control over your time everything else will fall into place.

Becoming a manager of your finances, your health and your time will pay you back a million fold as you improve your management skills. Stop being an employee and give yourself a promotion – right to the manager’s office!

Do you want to know the difference between the Foreign Exchange Market and the Stock Market? Find out here on my Forex trading software reviews blog article report.

Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market was established in the early 1970’s. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.

The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries.

What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country.

The forex market is global. The stock market is something that takes place only within a country. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country. This is another main differnce between the two.

The stock market has set business hours. Generally, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open generally twenty four hours a day because the vast number of countries that are involved in forex trading, buying and selling are located in so many different times zones.

The stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved with many types of countries, and many currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the forex market.

It should not come as a surprise why financial advisors will tell you to start investing now, even though they all agree behind closed doors that eliminating debt should be a financial priority. The reason they do this? They have families to feed, too; if they don’t sell their product (investments) they don’t eat.

Okay, the power of compounding is certainly a valid argument that advisors will make. However, this argument is invalidated if you carry $22,100 in debt like the average American and your income hovers around the median. In other words, a few bucks in credit payments is different than struggling with payments and investing at the same time.

One way to see whether it makes more sense to invest now or start later (after all of your debt has been repaid) is to measure your Cash Dilution Rate. What this rate tells us is how much we lose to our creditors for every $100 we earn. The higher your Cash Dilution Rate, the more it makes sense to repay your debt before committing to a true investment program.

Consider the following scenario. Where an individual earns $2,000 in after-tax income but just $22,100 in debt at an average rate of 14.5%, her cash dilution rate is a startling 13.35%. What this means is that the debtor keeps only $1,732.86.

One way to understand the severity of this situation is to weigh the $267.14 in monthly credit costs against how much can be invested on a monthly basis. For example, investing an additional $250 per month reduced the amount this individual keeps every month even further to less than $1,500 ($2,000 – ($267.14 + 250.00)).

However, if this individual could eliminate all of her debt, the $267.14 in monthly savings could be earmarked for her investments. What damage does this cause to her long-term savings? That depends because there are two ways to tackle this scenario.

The first thing to consider is whether this individual can indeed afford to invest $250 per month. Assuming she can, then she should really refocus this money toward debt repayment (assuming there is absolutely no guaranteed financial incentive to invest such as an employer-matching program). By using this extra $250 to repay debt, she will reduce her repayment schedule from 57 months to a little less than 25 months. That means that in 3 years, she invest both the $250 that the advisor recommends and the $267.14 that she is already paying toward debt, for a total of $517.14 per month.

Assuming the investor has 15 years left to invest and can still afford it after the debt is fully repaid, to invest $250 + $267.14 (or $517.14) monthly, then she will be farther ahead by $38,283… and this takes into account that she starts investing 3 years later than she would have if she had started with $250/month! Not only will this investor have no debt left to repay three years later, but she will be farther ahead and better prepared to weather unplanned financial hardship.

Another way to look at this is to assume that after nearly three years of paying $517.14, she wants to start enjoying more of her life and decides that instead of investing $267.14 (what she saves in credit payments) plus the full $250, she invests only one half of the $250 and spends the other $125 on something frivolous (like shoes). Spending $125 on shoes allows just $392.14 to be invested. Taking into account that she starts investing three years later, she would still come out farther ahead than if she invested $250 per month today (she would be ahead to the tune of $7,167, it turns out).

Either way, repaying debt should take priority in nearly every sound financial plan, even though repaying debt is much less glamorous and nowhere near as exciting. Of course, there are some instances and arguments where debt repayment might not always be the wisest decision, but those situations are quite rate.