Moneywise24 Personal Finance

After a period of recovery, stock markets fell sharply this Monday, as fears on Europe’s debt crisis keeps dominating. Whereas the problems around Greece have been postponed, new fears arise that Italy, Europe’s second largest economy, might might fall into a debt crisis.

According to Reuters, the IShares MSCI Italy Index Fund, dropped by 4.9% to a value of 15.63 USD (read the full article here). Additionally, the FTSE Italia All-Share fell by 4.33%. One hour after opening, the Dow Jones fell by 1.45%. The fear, that the debt crisis may expand into the entire European region, is clearly dominating.

Especially finance-related stocks have much to endure today. Banks and insurance companies, which are largely sensitive to the global economy, fell sharply. Again, fear seems to dominate the market, at least on the short-term, while all eyes are looking toward the beginning of the Q2 results announcements. Alcoa is traditionally starting the season later today.

Personally, I am putting a hold on taking on any new positions. I will sell any investments at my stop-loss immediately, and generally simply lay back and watch the show. The Q2 results will surely be very interesting, but it will be more interesting whether companies will make statements to their expected Q3 and Q4 results.

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Stock market sure have been on a roller coaster ride lately. First the terrible unfortunate events in Japan and the Middle East caused markets to rapidly decline, after which they recovered for the most part. At a later point, concerns over Greece took over, and stock market took a dive starting in April.

Earlier this week, the Greek parliament agreed on cost-cutting measurements, which was confirmed by a second agreement today. This decision frees the way for further financial support, such as today’s agreement between the German government and banks to support Greece with an additional 3.2 billion Euros.

One thing is certain: markets are emotionally loaded. Fear, relief, and euphoria seem to dominate the daily trends. As of yesterday, many markets are back on a rise due to relief regarding the situation in Greece.

But will this last? That is the question.

Although the economy has improved in many areas, many areas are still having a hard time, such as housing or unemployment. Markets have recovered greatly from the recession, many stocks having exceeded its pre-recession prices, but economic recovery is still in progress.

It is hard to really look at where the markets are going; they are extremely emotionally loaded at the moment, and they move according to what is “hot” and what is “not”. On the short term, markets may recover from the decline over the past weeks, and months. But will markets keep the positive trend and recover further? Read the rest of this entry →

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There are many different ways to invest; all offers available today make the world of investments one big jungle, and it is hard to keep up with developments. There are tens of thousands of stocks to choose from, countless derivate products (with new products being introduced regularly), bonds, mutual funds, hedge funds, speeders, sprinters, and the list goes on.

Although it might be fun to screen stocks and other market products, dig into their fundamentals and conducting extensive technical analyses, this is often not an option for people, who either have a limited understanding of investing, or who simply do not have the time. Additionally, investing in single stocks often requires some substantial amount of capital, which especially beginning investors do not have.

An alternative to picking individual stocks and investing several thousands of Dollars or Euros is to invest periodically and automatically. Automatic investing is usually applied with mutual funds. It simply means, that a specified amount is automatically taken from your account, and it is invested in a mutual fund of your choice. It happens automatic, without you having to do anything.

Although I am on top of the financial markets myself, and I like conducting analyses on stocks, I also do automatic investing. Automatic and periodical investing in mutual funds have a number of great benefits.

Small capital Read the rest of this entry →

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Sometimes I am wondering, what I do all this for. I mean, all the work, financial planning, breaking my head over my retirement planning. Often, a typical month would look like this:

• I work the hard, the entire month,
• I pay taxes on my salary, and receive about half of my salary on my bank account at month’s end,
• I pay for my loan from college times,
• I pay my rent, and all other bills,
• I cover for my expenses,
• And, with a bit of luck, I will have some money left and the end of the month.

Often, when I have something left at the end of the month, I am so proud of myself that I give myself a treat and spend the money anyway. Or I start traveling and go places… so in the end I have nothing left anyway.

I stumbled on this chapter in “The Cashflow Quadrant” by Robert T. Kiyosaki. Kiyosaki writes, that you should pay yourself first, before spending any of your hard earned money.

The basic principle is, that you should look at yourself as a running business. And the main purpose of a running business is to make profit, and to increase assets. What individuals do in stead is focussing on paying the bills first, i.e. other people’s profits and assets, before they focus on their own life.

So what does this mean? Read the rest of this entry →

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I have to be completely honest: I love watching the markets and investing parts of my capital actively, but the current turbulence is driving me crazy:

• Greece is in the news, stocks go down,
• According to analysts stocks are oversold, so they go up,
• Productivity over the last month has increased, nothing happens,
• Volcano erupts, stocks go down,
• And the list goes on …

Currently there is so much emotion and insecurity present on the stock exchanges, that it is really hard to predict what is going to happen next. Whereas optimists claim that this is only temporary, and markets are bound to go up when certain uncertainties have been settled, others claim that this is only the beginning of a double-dip recession, or perhaps worst.

So, I decided to stop taking any new positions for the moment, at least concerning individual stocks and derivatives, and I have implemented the following action plan for the upcoming weeks or months: Read the rest of this entry →

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