Employee stock ownership plans (ESOPs) provide many tax advantages. An ESOP is a retirement plan under which a trust acquires the employers stock in trust for the employees. The ESOP trust will purchase the employer’s stock from the employer or the employer’s shareholder. The ESOP will acquire this stock by obtaining a bank loan. The bank loan is guaranteed by the employer. The employer will make yearly tax deductible cash contributions to the ESOP. The ESOP will use this cash to make payments on the loan. The ESOP will distribute shares of the employer’s stock to employees in accordance with the plans distribution requirements.

The ESOP is tax advantageous over other stock purchase mechanisms because the employee’s tax obligation is deferred until the employee sells the employer’s stock. The employee does not pay tax at the time of the employer’s cash contribution or when the stock is distribution from the ESOP plan. Yet the employer receives current deductions for the cash contributions to the plan or for stock contributed to the plan.

The main disadvantage of an ESOP is that an employer must comply with numerous ERISA requirements that are imposed upon retirement plans. These requirements relate to who must be covered, when are participants vested, how much is funded, reporting, disclosure, etc. Creation and maintenance of the plan can be expensive.

Also, adoption of an ESOP would mean that you must share ownership of your corporation. This raises the potential problems discussed above.

An ESOP does provide a market for your stock, however. If your goal is to sell your corporation, rather than to share ownership, utilizing an ESOP could be revisited. You could possibly obtain a significant cash payment for all of your stock. Of course, the payment (minus your basis in the stock) would be taxed at capital gains rate.

Before adopting an ESOP to purchase your entire interest, you should be consider a sale of the business to a third party. The after tax cash flow of both alternatives should be compared.

Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Kent Everett area on various tax issues. His firm, Huddleston tax accountants, also provides tax preparation service, quickbooks consulting and general accounting and bookkeeping service. Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.

So you’d like to earn your living DayTrading?

You have all heard the stories of losing DayTraders running down the streets shooting people?

During the heady .com days prior to 2001, (when Bush became president,) there were stocks, 3 or 4 times a week that went up from 30 to 200% a day.

It was possible, if you knew what you were doing, to check before the market opened to see which stocks were running in real time and why.

And, if you then had a fast electronic brokerage system you could dive into the market, buy a bunch and sell them the same day.

About 1% of people doing this consistently made money.

You could see one private individual make a million in one day shorting Corel. And then there was somebody who lost a bunch hanging on too long to the WWWF IPO.

As a matter of fact the bottom line is that if you take inflation into account you’d have been better off putting your money in an old sock since 2001.

So what to do?

Give up on the Stock Market let alone give up on DayTrading?

Don’t give up on the Stock Market, if you use the right system which is a simple set of formulas you can still make 30% or more on your money annually.

Using this simple system $11,000 left in the market for 17 years would be worth more than one million dollars today.

But it is not DayTrading and you still would need a strong stomach to sit out these 17 years, because some of those years would give you negative returns.

The bottom line is this; if you want to DayTrade there is only one way to do this today.

And that is with MINDBLOWING News.

MINDBLOWING News along the lines of:

XYZ corporation finds cure for cancer. ABC Inc invents Eternal Life Pill DreamCar Corp invents car that runs on water.

You get the idea.

And then you should use another qualifier:

You should get this news BEFORE most other people get it.

How to do this:

For about $10 a month you can get a subscription to real-time market news.

Get your Real Time Market News at about 6 AM Eastern Standard Time.

Say you find the real time news that a company has invented a car that runs on water.

Check the time the news was first released, making sure that news item was not available yesterday.

Buy the stock now with money that you can afford to burn ALWAYS USING A STOP LOSS.

Most electronic brokerage firms today allow you to buy stocks on NASDAQ only as early as 6 AM EST.

Sell the stock at 9.28 AM EST to all the traders that are waking up.

You could conceivably double your money.

So would you then trade again in this stock after the market opens officially?

No,you should not.

Too many mindgames will be played by market makers during the first day with the stock that produced the mindblowing news.

Remember the statement above:

"There have been very few days since 2001 that any stocks actually went up more than 30% in one day, the oomph has disappeared from both the Nasdaq and the Dow."

Never hold the mind blowing news stock overnight, because people in most cases will dump it on the second day.

One more tip:

Never buy IPO’s on the first day.

The most touted IPO(meaning almost all large brokerage houses were praising this IPO to the sky) cost people the most in decreased value on the second day after the IPO came out.

Who were the winners? The brokerage houses.

So, if you have money to burn, have a cast iron stomach and want to watch market news from 6 AM to 9.28 AM EST, DayTrading may be for you.

J Shipper likes DayTrading. Check out these Sites: http://www.lazytrader.com http://www.stock-trading-now.info

Incentive Mechanisms that do not Transfer Stock Ownership.

Sharing ownership of a small company with the employees can create numerous conflicts. It is often wise to look to other incentive mechanisms that reward employees for increasing company profit without sharing ownership. Two such alternatives are profit sharing plans and phantom stock plans.

Profit Sharing Plan.

A profit sharing plan is one that provides annual employer contributions (which may be zero), and allocation to employee’s accounts according to a formula. The amount of the employer’s contribution may be specified by a formula or left to the employer’s discretion (possibly within specified limits).

A profit sharing plan can be a “qualified plan.” A qualified plan offers tax advantage in that contributions to the plan are currently deductible by the employer. The employee’s tax obligation is deferred, however, until funds are distributed from the plan to the employee. To qualify, the plan must meet numerous requirements. There can be no discrimination in coverage or vesting. There are also disclosure and reporting requirements.

Contributions to a non-qualified plan are currently deductible by the employer and currently included in the employee’s income. The employee, however, can have immediate access to the funds.

Phantom Stock Plan.

Phantom stock plans are designed to give the employee the same economic result as ownership of company stock. The employee, however, does not actually have an ownership interest or the non-economic rights that come with an ownership interest.

Under a phantom stock plan, an employee’s bonus is immediately converted to phantom shares of stock. The phantom shares track the value of the underlying stock. The value of the phantom shares will increase each time there is an increase in the value of the underlying stock. At the time of distribution, the employee will receive cash equal to the liquidated value of the shares in his account. If the underlying stock is not traded on an established market, the value can be determined through a pre-arranged formula.

For example, assume GM’s employee would receive a bonus of $10,000 in year one. The value of GM shares is $100 per share. Under a phantom stock plan, employee would receive 100 phantom shares in year one (i.e. $10,000 bonus / $100 per share). The plan would require distribution to the employee in a later year (e.g. year five). If the value of the shares was $200 in year five at the time of distribution, employee would receive $20,000.

Generally, a phantom stock plan will be a deferred compensation plan. This means that the employee would not be taxed until he actually receives a cash distribution. Assuming this is an “unqualified” plan, the employer does not receive a deduction until there is an actual distribution to the employee.

Employers can receive a current deduction even though the employee’s tax obligation is deferred if the plan is qualified. To be qualified, the plan must comply with numerous requirements. These requirements relate to who must be covered, when are benefits vested, funding, reporting and disclosure obligations.

Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Kent Everett area on various tax issues. His firm, Huddleston tax accountants, also provides tax preparation service, quickbooks consulting and general accounting and bookkeeping service. Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.

Want to trade successfully? Just choose the good positions and avoid the bad ones. Poor trade selection takes a heavy toll as it bleeds your confidence and wallet. You face many crossroads during each market day. Without a system of discipline for your decision-making, impulse and emotion will undermine skills as you chase the wrong stocks at the worst times.

Many short-term players view trading as a form of gambling. Without planning or discipline, they throw money at the market. The occasional big score reinforces this easy money attitude but sets them up for ultimate failure. Without defensive rules, insiders easily feed off these losers and send them off to other hobbies.

Technical Analysis teaches traders to execute positions based on numbers, time and volume.This discipline forces traders to distance themselves from reckless gambling behavior. Through detached execution and solid risk management, short-term trading finally "works".

Markets echo similar patterns over and over again. The science of trend allows you to build systematic rules to play these repeating formations and avoid the chase:

1. Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.

2. Buy the first pullback from a new high. Sell the first pullback from a new low. There’s always a crowd that missed the first boat.

3. Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.

4. Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover.

5. Don’t buy up into a major moving average or sell down into one. See #3.

6. Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.

7. Exhaustion gaps get filled. Breakaway and continuation gaps don’t. The old traders’ wisdom is a lie. Trade in the direction of gap support whenever you can.

8. Trends test the point of last support/resistance. Enter here even if it hurts.

9. Trade with the TICK not against it. Don’t be a hero. Go with the money flow.

10. If you have to look, it isn’t there. Forget your college degree and trust your instincts.

11. Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.

12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don’t expect anyone to change the channel.

13. Avoid the open. They see YOU coming sucker

14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.

15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.

16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.

17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.

18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.

19. Bottoms take longer to form than tops. Fear acts more quickly than greed and causes stocks to drop from their own weight.

20. Beat the crowd in and out the door. You have to take their money before they take yours, period.

The Stocks2Watch® newsletter has been published since 1998.

For a FREE report on HOW TO TRADE FAST, enter your email address at:

http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

If you’ve ever owned stocks or held certain other types of investments, you might already be familiar with the concept of dividends. Even those people who have made investments that paid dividends may still be a little confused as to exactly what dividends are, however… after all, just because a person has received a dividend payment doesn’t mean that they fully appreciate where the payment is coming from and what its purpose is.

If you have ever found yourself wondering exactly what dividends are and why they’re issued, then the information below might just be what you’ve been looking for.

Defining the Dividend

Dividends are payments made by companies to their stockholders in order to share a portion of the profits from a particular quarter or year. The amount that any particular stockholder receives is dependent upon how many shares of stock they own and how much the total amount being divided up among the stockholders amounts to. This means that after a particularly profitable quarter a company might set aside a lump sum to be divided up amongst all of their stockholders, though each individual share might be worth only a very small amount potentially fractions of a cent, depending upon the total number of shares issued and the total amount being divided. Individuals who own large amounts of stock receive much more from the dividends than those who own only a little, but the total per-share amount is usually the same.

When Dividends Are Paid

How often dividends are paid can vary from one company to the next, but in general they are paid whenever the company reports a profit. Since most companies are required to report their profits or losses quarterly, this means that most of them have the potential to pay dividends up to four times each year. Some companies pay dividends more often than this, however, and others may pay only once per year. The more time there is between dividend payments can indicate financial and profit problems within a company, but if the company simply chooses to pay all of their dividends at once it may also lead to higher per-share payments on those dividends.

Why Dividends Are Paid

Dividends are paid by companies as a method of sharing their profitable times with the stockholders that have faith in the company, as well as a way of luring other investors into purchasing stock in the company that is paying the dividends. The more a particular company pays in dividend payments, the more likely it is to sell additional common stock… after all, if the company is well-known for high dividend payments then more people will want to get in on the action. This can actually lead to increases in stock price and additional profit for the company which can result in even more dividend payments.

Getting the Most Out of Your Dividends

In order to get the most out of the dividends that you receive on your investments, it is generally recommended that you reinvest the dividends into the companies that pay them. While this may seem as though you’re simply giving them their money back, you’re receiving additional shares of the company’s stock in exchange for the dividend. This will increase future dividend payments (since they’re based upon how much stock that you own), and can set you up to make a lot more money than the actual dividend payment was for since increases in stock prices will affect the newly-purchased stock as well.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

What is the first step (and often last) for the new daytrader? Turn on CNBC and wait for the news, of course (don’t deny it, you have been there). Then when you hear the late breaking ‘real time’ news, you buy good news (or sell short bad news) in an attempt to beat the other 8 million listeners. Sound like a winning plan?

After realizing that is kind of hit or miss, you decide to fire up the ‘real’ real time news service. Of course, at this point, it hasn’t dawned on you. It is not just the fact that you are not really ‘beating’ anyone to the news. You begin to realize, even if I do have the news first, what do I do with it?

Have you ever heard of a stock gapping up big on fantastic earnings; then selling off for 2 weeks? We have all seen it. Good news reacted to in a negative way; bad new reacted to in a positive way. Or, good news reacted to in such a positive way, that the stock gaps so far you are not sure what to do. How do you make sense of all this?

First of all, you may want to just turn off the news. Yes, that is correct. You can keep a list of the stocks that are ‘in the news’ for your watch list if you like. However, you can skip the part about researching the news. This does not sit well with many traders. They feel it is ‘their job’ to research these things. The truth is, you cannot. We play people’s reactions to the news, not our personal view of what the news is. We do this by looking at charts.

Below are some examples. Two of them resulted in plays. Take a look at what happened, compared to the news. These three were picked because they all solicited a strong view from many traders, even by email. “Did you know that xyz had bad news today and are playing it?

Take McDonalds on Dec 24, 2003. You may remember the mad cow scare that day. All ‘hamburger places’ gapped down, and the overwhelming consensus was (even CNBC told us this) that this scare is the end of the American Hamburger. It would be a ‘no brainer’ to short these stocks, as they are certain to fall more.

Well, if they are certain to fall more, why didn’t they open at that lower price? You see; there are no gifts. The news was out and was digested by the public. What the stock does after that is not a function of ‘good or bad’ news. It opens at equilibrium; and then the move can be in either direction. The chart pattern (without any concern for the news) was bearish, but it did not form a ‘pattern’ that we recognize as a trade. No play was made, though there were possibilities for intraday plays once the trend was set. Notice how long the ‘bad news’ continued to ‘hurt’ the stock. Why did it go up? Who knows. Well, there were many commentators and analysts that told us the answer after the close. One of the stories was that the shock sent beef prices tumbling, which would reduce the operating costs of fast food restaurants. Now why didn’t we think of that?

Next is Marathon Oil. Here there was little chance for failure. The company was doing a ‘secondary offering’ or something similar. On the morning in question, they actually came out and priced the stock below the current price (below where it opened even). Certainly this stock had to go down further. Well, this time, the chart showed a pattern we know well; a tactic known as a Gap play. How could a stock go up in this situation? Read the McDonalds paragraph above. All the answers are the same. We don’t understand enough about secondary stock offerings to try to explain it. Or, if we do understand, it is not worth explaining. That is the point. The best way to play this was to have no knowledge of the actual news; just to know the stock was gapping so you can find the play.

Last was a past play on Delta Airlines. This is a favorite because we had the analysts, coming in to help us determine when to buy and sell stocks.

The big news posted was that Delta may have to file for bankruptcy. Well, we guess that means the stock is worth ‘zero’? Or is it worth ‘asset value’? That day the stock did not go below $4.53. On the next day, we have a revision of Delta Airlines’ outlook to ‘negative’. The day after that, Moody’s decides it may cut Delta’s ratings. The stock talks bankruptcy, and then analysts downgrade it? Do we need to pay analysts for this keen information and insight? Note, the stock had never traded under the low set on May 10th, the day the news of bankruptcy was released. Notice the volume that came in on that day. Notice that this volume came in after the stock already dropped 66% in four months. Mr. Analyst, you are now down grading the stock? Where were you during this huge fall? Waiting for the company to tell us they are in trouble? This stock was played long on May 12th at $4.67.

News will move stocks. It can be a means of finding stocks to watch and see if any technical patterns form. Do not get caught up in the game of trying to make trades based on your ‘analysis’ of the news. Everyone is different in how they handle thing. If you have a difficult time with news, we hope this was helpful to you.

The Stocks2Watch® newsletter has been published since 1998.

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With all of the investment opportunities that exist in the world today, it can sometimes be difficult to choose which specific ones you want to invest your money into. It seems like all too often that the “hot stocks” of the day end up becoming little more than a flash in the pan, and the stocks that no one really wants to invest in end up growing suddenly in value while people lament that they should have invested in it while they had the chance. If you’ve ever found yourself wondering how you can sort through these seemingly random fluctuations in order to find the best stocks for your investments, then this article is for you.

Below you’ll find ideas on how you can do a little research and hopefully turn that little bit of research into a large profit from the stock investments that you find.

Find Investments that You Trust

One of the best ways to choose the right stock is to do your research and find out as much as you can about the brands that you trust. Many trusted companies that have been in business for years tend to have fairly secure stock shares, and investments in these companies usually provide added security and stability to a well-maintained and diversified investment portfolio.

While it’s important to keep periodic watch over your investments so that some of your more trusted stocks don’t suddenly drop in value, many trusted companies and international retailers find their stock to have a much lower maintenance level than up-and-coming companies who may be affected by unexpected scandals or financial problems.

Search for Recent News

Another good way to find investments that are timely and likely to be profitable is to take the time to read over news stories that might influence the value of the stocks of the company involved. By staying up-to-date on the news and how it relates to major companies that you might be considering investing your money into, you can learn to anticipate increases and decreases in the value of the shares of those companies’ stocks. This can become especially useful if you learn about major scandals early on and are able to sell off shares before their price drops, or if you hear about new advancements that certain companies are making and are able to purchase shares before the price begins to skyrocket.

Keep an Eye Out for New Technologies

Just as you should watch the news for major events that can influence stock prices, you should also keep an eye on news from the technology sector and fields such as biochemistry and health care. New advancements in any of these fields can cause stock prices for the companies that made the advancements to start to climb quickly. By learning about new technologies before they become well known you can potentially get the jump on some rather important investment opportunities. Not every new technology will mean a major increase in stock value, but for every one that does there is a good chance on making serious profits from your initial investments.

Invest for the Long Term

In most cases, it’s also important to try and learn from your research whether or not an investment will do well as a long-term investment. While some short-term investments can be fine (and can net large profits if you choose the right times to buy and sell), long-term investments can add security and stability to your financial plans that short-term investments can’t.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

I outperformed every investment advisor last year (287% return on all combined investments) and every year for the past five years (over 800% return over 5 years). Here are my top picks for this week.

LightPath Technologies, Inc. (LPTH)
Industry: Semiconductor Equipment & Materials
Results/returns: up 43% this week.

Adolor Corporation (ADLR)
Industry: Drug manufacturer
Results/returns: up 37.6% this week and up 9.56% today alone!

Rediff.com India Limited (REDF)
Industry: Internet information provider
Results/returns: up 34% this week.

Piedmont Natural Gas (PNY)
Industry: Natural gas/energy
Results/returns: up 25% in the last 3 months, a hefty dividend, and a very safe bet - over 25 years of great history!

Cross Timbers Oil Co. (XTO)
Industry: Oil/energy
Results returns: up 1000% in the past 5 years. Better returns then Exxon Mobil (XOM) and a great performer with a great track record. Get in while its still cheap.

Choice Hotels Intl Inc(CHH)
Industry: Hotel/restaurant
Results/earnings: up 45% in the past 3 months. Up 3% today. Solid performer and recession resilient - people will always need hotels and take vacations. Pays a solid dividend and is a great addition to any portfolio.

American Home Mtg Invt Corp(AHM)
Industry: Mortgages
Results/earnings: up 1.5% today and cheap to buy right now - it is at a year low right now and is a very solid company, solid performer and will do very well in the weeks and even year to come. Big dividend makes this a good stock to just hold onto for many years.

Popular Inc. (BPOP)
Industry: banking
Results/earnings: This one is down today a little, but is the largest latino bank and is prime for a takeover. It pays steady dividends and will do you right in the longhaul.

iShares:S&P SC 600 Idx (IJR)
Industry: diverse index fund
Results/earnings: Up 20% since December. Even pays a dividend and very solid performance.

There you have it. A well diversified group of sttocks that no investor will beat. Best thing is I didn’t charge you a penny - just do me one favor and help me promote my websites below. Pass this article along so it will help others. The more people that benefit for this, the more money they will have and the better our economy will get. It all starts with you - I took the time to help you, now please pass this around so others can benefit too.

David Maillie is a highly regarded and much sought after internet marketing guru. He is an alumni of Cornell University and holds numerous patents including his recently awarded patent for headlight repair, cleaner and restorer. He is also a highly regarded expert on press releases and getting publicity both nationally and internationally. He can be reached at M.D.

Wholesale: http://www.mdwholesale.com and at http://www.bestskinpeel.com.

It’s been said that nothing is certain except for death and taxes, but there are likely many people who feel that the fluctuations of the stock market should be added to the list. It is nearly impossible to find a stock or other investment that doesn’t fall in value at one point or another while you own it… some even make a regular habit of it.

In order to get the most out of your investment experience, it’s important to recognize patterns in the performance of certain stocks so that you can get a better feel for how long their occasional fluctuations might last and help you to decide whether or not you should sell the stock or see it through until prices rise again.

Defining Cyclical Stocks

Cyclical stocks, as the name might imply, are stocks that periodically fall in value and then rise again soon after. The apparent cycle of gain and loss can be caused by several different situations, from economic trends and seasonal products to the stocks being issued by companies that do the majority of their business during certain parts of the year such as holidays or tax preparation season. In most cases these stocks don’t suffer a major loss over the course of the cycle, due largely to the recovery that occurs later in the cycle.

Some cyclical stocks perform these actions in reverse, as well… instead of falling in value, they increase the value of their shares for a time and then the prices return to their normal state.

The Fluctuations of Cyclical Stocks

Of course, the fluctuations of cyclical stocks tend to make some investors shy away from making a major commitment to what tend to be at best a form of seasonal investment. Individuals who are looking for good short-term investments often consider these fluctuations to be more of a godsend, however, and are much more willing to invest larger sums during the low point of the cycle in hopes of reaping greater rewards when the value of the stock shares peaks. Of course, this plan isn’t foolproof… changes in the market or the economy can either stimulate or delay the cycle, making the cycle start later or last longer.

Additionally, some cyclical stocks are only temporarily in a cycle so investing in them with the hopes of their repeating of past performance can cause problems with cycle planning when they begin either rising or dropping in value and then fail to recover or if they fail to do either.

Deciding Whether to Keep or Sell Cyclical Stocks

Of course, cyclical stocks can cause undue stress when their value begins to fall… the decision must be made to either hold onto the stocks until the value recovers or sell off at least some of the shares of stock in order to avoid a potentially large loss of investment revenue.

The decision remains up to the investor, but a well-diversified portfolio that contains investments in cyclical stocks should be able to bear temporary losses in stock value without a great degree of difficulty since if the stock is truly cyclical it will recover within a reasonable amount of time anyway.

Cyclical Stocks and Long-Term Investments

Of course, cyclical stocks can be used effectively for long-term investments. The growth end of the cycle is usually increased slightly with each revolution of the cycle, so investors who choose to purchase cyclical stocks and hold onto them for a number of years may find that when they finally sell them the value is much higher than it would have been for short-term investments.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

If you want to be stock market player you need to learn some fundamentals. There are different types of stock market players. You could be a day trader and jump in and out of stocks every day trying to pick up enough small gains on big share holdings. I think of this like betting huge amounts on the favorite in a horse race to show or come in third. This is gambling to me. We would call these types of players “jumpers” because if they lost a huge bet they might just jump out the window of a tall building. Most day traders get broke in short order. Leave that to the professionals who don’t do so well at it either.

There are the speculative traders who will hold a stock for short time periods of a few days to a few months. If done properly this can be the best type of trader to be. Then there are the buy and hold investors. Warren Buffet was the most successful buy and hold investor in history. He was and still is a “buy and die” investor. In the past when commission fees were sky high and it was costly to trade stocks in this manner this was an excellent strategy. Now the fees are very reasonable so the strategy has changed to be more speculative.

These types of traders can be broken down farther into two main groups, the technicians and the fundamentalists. A pure technician will rely on his charts exclusively and look for patterns over history and use the patterns of many stocks to form his strategy. The pure fundamentalist is going to rely on the income statement, balance sheet and other financial documents of a company to decide if the business is strong enough for him to put his money into its shares. Most traders use a hybrid of both types, the technician and the fundamentalist. I am a hybrid type of trader and look at the macro view of the economy as well. I like to look into the future of the economy about six months ahead of the present day as much as the past data that was recently released.

With three startup businesses before he was 21 years old, Matt Fox has the experience to help you create your own businesses for your financial future. He is a wealth building and investment specialist. See his blog at http://www.bizmaker.blogspot.com