If you‘re just learning about the stock market things can seem daunting. Stock market education for the beginner is saturated with a wealth of products and information that you have to digest even before you start trading. For most day traders it takes years of studying to become a better than average day trader.

How about if you want to bypass this, is there a way of doing it?

Yes.

Of course it means you need to have enough money to afford a brokerage firm that will be able to fully manage your investments. This is great because you can leave everything up to them. On the downside trust can come at a price. You see what people are not taught in stock market education for a beginner is that brokerage firms are paid by the amount of trades they make. Like an agent with multiple clients it’s no good to them if you’re stock portfolio is stagnant.

Of course there is no guarantee even the best brokerage firm will make you a profit about the basic rate of bank interest.

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Intended Audience

Investors
looking to speculate on the price of silver through ETFs or publicly traded silver companies as well as those looking for a store in value against inflation.

Summary Points to Take Away

* Inherent supply constraints will restrict the ability of silver to react to changes in demand; thus, overall supply is inelastic – which would put upward pressure on the price of silver should demand increase.
* Silver is one of the most industrious items in the world – highest reflectivity, thermal and electrical conductivity of all the metals; thus, difficult to substitute all its industrial uses should the price of silver spike.

* Store of value during inflationary periods

* Future growth in Solar Energy could propel demand for silver, resulting in higher future prices

* Cyclical good; thus, short term price will trend downward during the low point of the business cycle
* Demand for silver over the past decade from the photography industry has declined – which still represents a sizeable portion of total demand that is likely to deteriate over time.

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The enormous rise in prices which ended in year 2000 was a Mania, a Stocks Mania. The first move down after the end of the Stocks Mania marked the beginning of a new major trend, a downtrend this time, which has many months – perhaps extending into years - yet to run. That first move down ended with the 2002 lows. The subsequent high which ended in October 2007 was the first bounce in the new major downtrend. It was exhilarating, wasn’t it? “Happy days are here again.” “It’s the New Economy.” “The old rules don’t apply anymore.” “This is a New Era.” “This is a new paradigm.” It’s hard to understand or believe; but the reality is that the rally from the 2002 lows to the October 2007 high was a bull rally in an underlying bear market. It was fake from the word Go.

The thing to bear in mind about Manias is that they are always fully retraced. In other words, prices eventually collapse to a point at, or below, their level before the Mania began. We remember reading about the Tulip Bulb Mania and the South Seas Mania. That’s exactly what happened to prices after those Manias ended: they collapsed. By definition, Manias are irrational. When one is living inside a Mania, nothing seems irrational at all; everything seems normal, “just as it should be.” It’s a mass delusion. Leading up to year 2000, most people were thinking along the same lines, a crowd in full cry, reinforcing each other’s beliefs in circular fashion. Round and round the wheel went, and with every turn it received another jolt of artificial methamphetamine which kept the party going. Lonely contrary voices were few and far between, and were ridiculed as crackpots. Even the smartest and the soberest were taken in.

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Different persons have different portfolio management needs, some want to maximize the return, some want to minimize risks with steady investment growth, some want constant earnings, and some others want to earn more spending least time. Dynamic asset allocation is one such portfolio management strategy which aims at maximizing the portfolio return by active management of portfolio components.

Dynamic asset allocation is one of the most active portfolio management strategies which involve frequent/constant and quick adjustments of investments inline with the performance of investments over time and with the market trends. Because of this active management dynamic asset allocation is considered as a risky strategy and is not at all advocated for persons with less investment knowledge, low capital and who have not time to monitor their investments.

Unlike two other popular portfolio management strategies, strategic and tactical asset allocations strategies, dynamic asset allocation does not involve keeping a fixed investment ratio. Dynamic investors diversify their investments by investing in equities, mutual funds, index funds, currencies, derivatives and fixed income securities. They buy instruments which are rising (or are predicted to rise) and they sell instruments which are falling (or are predicted to fall). Although not common, many dynamic investors keep a reasonable proportion between high-return/high-risk instruments such as stocks and low-return/low-risk instruments such as treasury bonds.

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Optimism regarding stability around current levels encouraged buyers to come back into the market last week, bottom fishing various beaten down stocks. The major U.S indices closed up by over 10%, forming weekly bullish engulfing candlestick formations on various charts. Even though economic stress is still weighing on the economy, affecting different sectors, expectations of a brighter future in the distance are now sending investors back into stocks, trying to grab opportunities at discount prices. To date, analysts are still expecting to see more of a sluggish economy, an economy that will continue to contract until the end of this year and throughout the beginning of next. In addition, unemployment is expected to continue to rise from its current level of 6.1% during the next couple of months, making the current economic slowdown one of the longest and harshest ones since the 70’s.
A lot of important economic data came out last week, among them a GDP result showing that the U.S economy had contracted in the third quarter by 0.3% and a rate cut in the U.S, which brought its fund rate down to 2002’s levels of only 1%. To date the U.S is yielding investors one of the lowest interests among financial investments and according to the Fed, additional rate cuts might not be so far off. With interest differentials of over 4% between the U.S and other economies, traders have become puzzled why the U.S Dollar is gaining strength.

Can the Dollar be rising while stock markets are gaining strength?
When learning basic economics, every novice learns apart from the basics of supply & demand and the Keynes theory, that interest rates affect the different financial securities in various ways. Rising interest rates are good for a currency as it attracts investments due to high yielding interest, but it is bad for the stock market as a rising central rate affects rates within the economy, offering better alternative’s for investors than a risky stock market, while depressing demand as borrowers end up paying higher returns.
Under normal market conditions we would expect to see that as the Fed plays with its rates to control healthy economic growth, dollar and stocks trade in opposite directions. As one goes up for a period of time the other goes down (within their major trends).
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Personally, I think it is crucial to anybody’s stock market success that they are informed of any changes in the stock market, no matter how big or small those changes may be. While it isn’t necessary to keep track of the changes in every single stock out there, it is extremely important to closely monitor the stocks which you have invested in, or the ones that you are considering investing in. There are many reasons for this, some of which are more obvious than others.

First of all, when buying stocks everybody has one ultimate goal on their mind. That goal is to try and buy the stock at the lowest possible price, with the hopes that the price will increase in the near future and we will make money in the long run. Likewise, when anybody is selling their stock market shares, they all share one goal too. That is trying to sell the stock at the highest possible price, as they are convinced that the price may drop in the near future; holding out too long means that they will be forced to take the loss. And nobody who is in the stock market industry wants to take a loss.

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