Category Archives: Finance Tips

Learn to Invest from Ray Dalio

Investing is a skill that can be learned with time and that is the exact reason why we are writing about it. We know that some of you are eager to learn how to invest online and that is why we have decided to write a few articles about what you should learn from famous investors, people that have a long proven track record and that have achieved great success in this field.

Today we will start with Ray Dalio, founde, and CEO of Bridgewater Associates, one of the most successful hedge funds in the world. We will try to see what lessons can we take from him about how ordinary people should invest their money.

What can we learn from Ray Dalio?

Ray Dalio started his investment company out of a two-bedroom apartment in New York and at the present time, Bridgewater manages over $160 billion. He managed to reach that milestone by establishing a culture inside his company based on radical truth and radical transparency, things that he described in his latest book called Principles.

Not only his principles made him so successful, but also the way he approaches investors. His main focus is on diversification and he had constantly emphasized that having a balanced portfolio and risk spread are important aspects for any investor, especially during these unpredictable periods we are facing right now.

Even though he had never disclosed entirely his investment strategy, he gave some tips and information that could be valuable for each one interested in online investing. His strategy called “All weather”, specially designed to perform well in any type of economic conditions had been described in Anthony Robbins’ book Money-Master the game. For those of you wanting to learn more about the strategy, reading the book would be the best things to do.

His unconventional approach to investing, integrating transcendental meditation in his regime, had made him famous and widely considered as one of the most successful investors in history.

For those of you wanting to start their journey with online investing, learning as much as you can from Ray Dalio would be a good foundation. Although he does not have too many public appearances, you could find plenty of interviews on YouTube + articles written by him especially on LinkedIn. Make sure to study his work and see what other lessons you can learn from him. There’s no doubt his experiences can be productive for yourself and your investing journey.

Cryptocurrency Investing in 2018

With the growing popularity of cryptocurrencies, one could ask what kind of investment strategy works in this new market. In our previous article we have talked about how to invest in commodities and now we want to focus on some of the aspects related to cryptocurrency investing.

Is there any difference to other markets?

The answer to this question is no. Cryptocurrency investing should be treated like any other investment, with one particular mention: One must take into account that the cryptocurrency market is still in its early phases, volatility is higher than in other markets, and a lot of sudden and important changes could appear any time and completely change the rules of the game.

How can someone invest successfully in cryptocurrencies?

Given these complicated conditions, you might ask how you could invest in cryptocurrencies in an efficient way. That is why we want to give you some pieces of advice about how you should treat crypto investments.

We assume you already know how to invest online, so we will skip all the very basic concepts. Firstly, when it comes to cryptocurrency investing, the best way to do it is by focusing on those tokens that have a few years in the market and have established a good reputation. You probably know them already: Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple, and Dash, all of them have been performing well in the past and all are part of a mature market, as compared to the other recently-launched coins.

A market in its early phases is very easy to manipulate, given the small liquidity and reduced number of participants. A developed market is where professionals are putting their money in, so there’s where you need to be as well.

Buy low and sell very high

As with other investment, timing and pricing are two of the most crucial aspects. You need to buy at a cheap price and sell them as high as it is possible. At the time of writing, in July 2018, the cryptocurrency market as a whole is in an oversold condition. That means the valuations are low compared to the end of 2017, so investors across the globe might have already started to see where some cryptocurrencies will bottom out, in order to anticipate a new bull run.

Last, but not least, you need to take regulation into account. Make sure to invest in cryptocurrencies that comply with the regulation, as it could save you from unwanted situations in the future.

What should you know about retirement stocks?

The phase of our lives when we are old should be free financial pressure and that is why a question that arises among people is how someone should invest in the long run in order to keep its savings safe and also generating returns. How ordinary people invest should be put into question since most of the time they do not manage to achieve the desired results.

With that being the case, in this material, we will give some hints on how someone should determine whether a particular stock should be a good investment for retirement.

Long-term investments

When it comes to long-term investment it cannot be treated like online trading. You are not constantly buying and selling things, so a different approach is required.

One of the first things to consider when picking up retirement stocks is to look after those companies that have the following characteristics:

  • They are the biggest in the sector of activity (the so-called“blue chips”);
  • They have a measurable performance in the past (you can notice that the way stock performance, in the long run, has a certain repetitive structure);
  • The culture of the company is focused on growth and constant improvement.

You must understand that when it comes to retirement stocks you are trying to aim a return of a few percentage points per year.

Diversification

In order to spread the risk across a handful of assets, you should not focus on just a single stock. Try to find at least five and if you have a bigger budget, you can expand your holdings to other asset classes, as well.

Monitor on a constant basis

Simply buying those stocks without constantly monitoring them won’t be enough. You should be updated with all the news related to those companies you have invested in. We know that some of you have jobs and might find it difficult to allocate time for this activity.

Do it at least on a quarterly basis, if you can’t once a month. Your portfolio should not be fixed and any time you notice something is wrong with one of your holding, shifting to other stocks could be the best decision.

Although you might work in other areas, keep in mind that a little economical background (which can be acquired without going to college) is necessary, so make sure to dedicate yourself as much as you can so you will learn all you need about stocks.

 

How to Invest in Commodities

Commodities represent another interest type of assets and with the advancement of technology one could invest in them without even owning it. You don’t need to order a hundred barrels of oil and keep them in our home anymore. With online trading, you have instruments that are based on commodities and you are simply buying contracts of value for relatively short period of time.

In this material we will tell you how someone could invest in commodities from the comfort of its home. We will also discuss briefly about what trading strategies could be used and when.

Where can you buy commodities?

At a global scale there are two important places where someone could buy an invest money into commodities. One is the CME Group – operating in Chicago, New York City and London, and offers derivatives like futures and options based on interest rates, equity indexes, foreign exchange, commodities and many others.

The second important place is the CBOE or Chicago Board Options Exchange, where options based on commodities are also available.

Last, but not least, any online broker had included CFDs based on the price of commodities, so anyone is able to trade them with leverage from anywhere in the world.

What strategies are suitable for commodities?

There is no specific type of strategy that had been designed solely for commodities. The traditional ones used for forex or stock trading could be integrated in this market, as well.

However, we have to make a specific remark here. Although you can integrate technical analysis and sentiment analysis + risk management in commodity trading, when it comes to fundamental analysis you will need to pay attention to other indicators.

For example, let’s take oil. Each week, the United States publishes its Oil Inventories. Also, there is the OPEC cartel which had been very active in the last few years due to the drop in prices. It had been changing the daily output and that is another factor which influences the price.

In terms of industrial commodities, one aspect that needs to be highlighted here is that China is the largest consumer in the world, so the economic development in China can influence prices, as well.

There are many other important aspects related to commodity investing and that is why we recommend a thorough study and education before jumping in and invest with real money.