Stock Knowledge

Although this is mainly a blog for forex, I've decided to dedicate a post to stocks since that is what I am currently learning in my finance course. Let's begin by giving beginner stock traders a crash course lesson in stocks. First off, there are two types of stocks: preferred stocks and common stocks. Each of these types of stocks have their own advantages. I will first start off by discussing preferred stock.

Preferred Stock

Preferred stock is often referred to as a hybrid security because it has many characteristics of both common stock and bonds. These types of stocks have many features that include cumulative dividends, protective provisions, convertibility, and retirement features. Cumulative feature requires that all past, unpaid preferred stock dividends be paid before any common stock dividends are declared. Simply put, preferred stock holders have priority over common stock holders. Protective provisions generally allow for voting rights in the event of nonpayment of dividends. They restrict the payment of common stock dividends if sinking-fund payments are not met or if the firm is in financial difficulty. Convertible preferred stock can, at the discretion of the holder, be converted into a predetermined number of shares of common stock. One noteworthy statistic is that almost one-third of preferred issued today has a convertibility feature. Lastly, stock issuing firms generally provide for some method of retiring the stock such as a call provision or sinking-fund provision.

Common Stock

Common stocks is a certificate that indicates ownership in a corporation. When you buy a share, you buy a part of the company and attain ownership rights in proportion to the amount of shares you buy. Common stockholders are considered the true owners of the firm. On the other hand, bondholders and preferred stockholders are considered more as creditors. Like preferred stocks, common stocks also have some features. These features include claim on income, claim on assets, voting rights, and preemptive rights. Common shareholders have the right to residual income after bondholders and preferred stockholders have been paid. Common stock also has a residual claim on assets in the case of liquidation. Generally, if bankruptcy occurs, claims on the common shareholders are typically not satisfied.When it comes to voting rights, common stockholders are the only security holders with a vote. Lastly, the preemptive right entitles the common shareholder to maintain a proportionate share of ownership in the firm.

Today's Spotlight: New Zealand Dollars!

Happy Saturday everyone. So I just read some news about the New Zealand Dollar and the multiple trade opportunities that we can take advantage of and make a good profit. Currently, the New Zealand Dollar is trading at 1.3720 NZD to every 1 USD. This is a tremendous jump from yesterday when it went down to 1.3272 NZD to every 1 USD and I feel that this trend will still continue. In the past week, the NZD has hit past 1.3917 which is a noteworthy gain for in the foreign exchange market.

I truly believe that the NZD will not hit a new low until early summer during the week of June 10th. Therefore, if you do decide to invest in the New Zealand Dollar, be sure to monitor the daily exchange rates as they may fluctuate as summer draws near. Keep in mind that the foreign exchange market is dynamic, meaning it is always changing. In order to be a successful day trader in the foreign exchange market, you must be actively monitoring the progress of the exchange rates. This is exactly how some people make FX trading a profession. They are able to make good profit every day by forecasting and predicting the trends of all the rates.

Daily Currency Exchange News

Today, the dollar rose in value significantly. This was due to nuclear crisis occurring in Japan, the Middle East and Libyan violence, and convulsions of debt amongst several European nations. The specific event that spawned violence in the Middle East was the bomb explosion at a bus stop in Jersualem. According to news reports, about thirty five people suffered injuries as a result of the violence act. Because of this, the dollar gained strength.

Here are some of the updates for the various currency exchange rates today:
1 Canadian Dollar = $1.0197 US Dollar. (+0.0011)
1 Mexican Peso = $0.0833 US Dollar. (-0.0001)
1 British Pound = $1.6242 US Dollar. (-0.0111)
1 European Euro = $1.4099 US Dollar. (-0.0081)
1 Chinese Yuan = $0.1525 US Dollar. (+/- 0.0000)
1 US Dollar = 80.940 Japanese Yen. (+0.0800)
1 Australian Dollar = $1.0127 US Dollar. (+0.0039)

Back to Forex!

I know I've been swaying off the topic of Forex for the past couple of days so I've decided that it's a good idea to start blogging about it again. I was looking around for helpful tools for people to use when getting started in the foreign exchange market. I came across this nice website called forex forum. Basically, this forums gives you tips on different pairs of currencies and forecasts their high point, low point, and resistance. This can come in handy for anyone who is looking to see which currency is currently strong and which ones are weaker.

The current currency rates are:
1 Canadian Dollar = $1.0186 US Dollar.
1 Mexican Peso = $0.0834 US Dollar.
1 British Pound = $1.6364 US Dollar.
1 European Euro = $1.4171 US Dollar.
1 Chinese Yuan = $0.1525 US Dollar.
1 US Dollar = 80.8650 Japanese Yen.
1 Australian Dollar = $1.0092 US Dollar.

This is the currency rates of the various currencies as of March 22nd. Remember, currency rates are always changing and therefore the foreign exchange market appeals to active traders.

Marketing Tips

Today in my marketing class, I learned about net present value and the payback period. Now you may be asking me why I am blogging about this since my previous posts have been about forex trading. However, I feel that this is a very important concept that more people should be aware of.

First off, let me discuss what the payback period is. The meaning of the payback period is simply the number of years needed to recover the initial cash outlay of a capital budgeting project. The decision rule for the pay back period is that the project feasible or desirable if the payback period is less than or equal to the firm’s maximum desired payback period. In general, shorter payback period is preferred while comparing two projects.

Benefits of Payback Period
-Uses cash flows rather than accounting profits
-Easy to compute and understand
-Useful for firms that have capital constraints, because provides liquidity needs for the firm
-Emphasizes earlier returns which have less uncertainty than later cash flows

Drawbacks of Payback Period
-Ignores the time value of money
-Ignores CFs occurring after the payback period
-Firm cutoffs are subjective
-Does not consider any required rate of return
-Biased against long-term projects, such as research and development, and new projects

Net Present Value on the other hand is equal to the present value of all future free cash flows less the investment’s initial outlay. It measures the net value of a project in today’s dollars. Below are some benefits and drawbacks to this method.

Benefits
-Considers cash flows, not profits
-Considers all cash flows
-Recognizes time value of money
-By accepting only positive NPV projects, increases value of the firm

Drawbacks
-Requires detailed long-term forecast of cash flows

NPV is considered to be the most theoretically correct criterion for evaluating capital-budgeting projects.

Hopefully this blog has brought interest to some of you who are interested in marketing. By following these methods and theories, it will help you succeed in the future if you decide to invest in a business venture. Feel free to leave a comment if you have any questions!

ForexScamBuster.com Review

Before getting started with Forex, you should understand that there are people out there who try to scam others for cash in regards to Forex. ForexScamBuster.com is a great site for people to see whether the Forex program that they are in is actually a scam or not. By using this site, you will be able to avoid any possible scams or frauds relating to forex on the world wide web.

On the site, they have a Top 10 list which is a list of their top 10 recommended forex brokers. This is a great way to start if you are just looking to get into the Forex scene. You should check out each of the top 10 recommended and see which one suits your needs the best. There are some that are for people to just dip their feet in with smaller deposits while others are for the high rollers who are willing to invest in a lot more.

Check out the site and see for yourself!

The Yen

Amidst the tragedy that occurred in Japan due to the 8.9 earthquake and the tsunami aftermath, the yen rose against the dollar to the strongest level it has ever been in history. This was not good news for the already damaged country. The Nikkei (the Japanese stock market) declined tremendously right after the disaster, causing the yen to become extremely volatile. As a result, global trade is likely to be disrupted. As of now, the Japanese are trying to stabilize and reverse the trend of the yen. Therefore, in the next few weeks, people may see the yen move into the 80's against the US dollar.

I will keep you updated on the forex events that are occurring in relation to the natural disaster that occurred in Japan. Keep checking in!

Money Opportunities within Foreign Exchange Markets

Hi everyone! Recently in my business courses, I have come to learn about currency markets and exchange rates. As I was sitting in class listening to the lecture, I realized that trading currencies could potentially be very profitable. When I went home, I decided to pursue this idea and do a little research. Little did I know, some people make a living by trading currencies. This is called foreign exchange market trading, or forex for short. Basically, this system allows people to convert one currency to another currency depending on how strong or weak the currency is. On a given day, more than 3 trillion dollars are usually exchanged in the foreign exchange market. This is an immense amount of cash and part of that can be yours! Currently, the United States dollar is ranked 1 at 84.9% of daily shares amongst the most traded currencies. The Euro is ranked 2 at 39.1%, the Japanese yen is ranked 3rd at 19.0%, and the Pound sterling is ranked 4th at 12.9%. As you can see, there is quite a large margin between the Euro and the Dollar. Changes in exchange rates are usually due to monetary flows or expectations of changes in monetary flows by the changes in the GDP (gross domestic product) growth, interest rates, and also inflation. These factors cause the rates to either rise or drop. There is good opportunity to earn money in the foreign exchange market. You just have to have a good sense of how the various economies around the world are doing.