The Art of Cutting Your Losses in Capital Market

There are many investor who don’t know what to do to protect themselves in the stock market. When you trade in stocks you need to understand and undertake some important decision on daily basis and these decision are going to decide your outcome of trading. A investor can choose different segment according to his Risk Capacity. What I observe in market that a person should have to divide his investment in equal ratio and then he can trade in best suitable segment like Equity,Future, Option etc. People used to convert intraday position in positional work but that is not a great idea. Intraday market moments are highly influenced by fundamental & short term news but at other hand positional trade are more about technical analysis of any particular script and industry. Always be double sure about your trade pattern. Your decision should have proper consideration of your current financial situation and future plans too. There are many investor who don’t know what to do to protect themselves in the stock market. When you trade in stocks you need to understand and undertake some important decision on daily basis and these decision are going to decide your outcome of trading. A investor can choose different segment according to his Risk Capacity. What I observe in market that a person should have to divide his investment in equal ratio and then he can trade in best suitable segment like Equity,Future, Option etc. People used to convert intraday position in positional work but that is not a great idea. Intraday market moments are highly influenced by fundamental & short term news but at other hand positional trade are more about technical analysis of any particular script and industry. Always be double sure about your trade pattern. Your decision should have proper consideration of your current financial situation and future plans too. There are many investor who don’t know what to do to protect themselves in the stock market. When you trade in stocks you need to understand and undertake some important decision on daily basis and these decision are going to decide your outcome of trading. A investor can choose different segment according to his Risk Capacity. What I observe in market that a person should have to divide his investment in equal ratio and then he can trade in best suitable segment like Equity,Future, Option etc. People used to convert intraday position in positional work but that is not a great idea. Intraday market moments are highly influenced by fundamental & short term news but at other hand positional trade are more about technical analysis of any particular script and industry. Always be double sure about your trade pattern. Your decision should have proper consideration of your current financial situation and future plans too. Like a Forex Trading Tips or in cash, commodity, future and option tips an individual can also receive a recommendation in the currency market. According to his individual risk appetite ecause, in currency derivative a individual can trade with the minimum investment as compare to the equity, commodity and its derivative. Published at:

The Investment Behavior in the Capital Market

People like to handle in stock or currency markets in order to make easy profits. They face problems with targeting their cash and disappointed market’s reaction. We discuss here investor’s behavior, and the scenarios of handle in stock and even in currency market. Every time we hear about people were talking about their investments in the world markets like stock, currencies, and commodities markets. And how they did gains and then suffered from big loss for a while, and repeated it rotational in the near future. This behavior is so-called crowd action. They do what the others do or have done. This collateral action has pushed the market‘s participators to gather its volume to the peak. Furthermore, for a while saturated market let the people make some losses because it is going to release some ask pressure, and the peak got melt. Therefore, rational thinking is to put some investment tents in focus. Basically, these tenets are greed, fear, control, persuasion, and patience. Moreover, Greed and fear are killing feelings when someone buy or sell on stock market. To control this, he/she has to analyze his/her subject business base upon investment tools, like fundamental and technical terms. This could lead the individual to take persuasive and controlled decision. Furthermore, fluctuating in market’s movement pushes the investor to hesitate when he/she takes buy or sell decisions. Patience comes in charge to support the business decision depending on the real market situation, nor bubbles neither rumors. We are going to show up two examples to illustrate one situation in the stock market and the other in foreign exchange market. We’ll start with the last one, currencies market is the most active and biggest market in the world. For instance, buy position is opened under estimating that the market is going bullish. This market is very volatile compared with others capital markets and when someone uses to handle in the stock market, he/she will surprise with the character of the currency market. In this case, when the market went on contrary I mean went down, we should take a wide look on the technical tools like charts, indicators, support and resistant points rather than fundamentals to correct the position or stay on it. Because of sensitivity of currency market and high reaction on the media, the decisions based on the technical analysis take the priority against the decision which refers to fundamentals. On the other hand, stock market is more stable and reliable compared to the currencies market. For example, sell/buy position is taken, and when the market is going up/down the investor corrects his decision according to deep analysis of fundamentals like financial statements, management actions, production and marketing policy, discarding the daily tick movement that backs to spot news and rumors. Finally, investment in capital market is a matter of awareness of investors, market’s transparency and good controlled market. Published at:

Free up Capital Using the Independant Stock Market For Secondary Market Investment

You have built up your company over the years as a private enterprise. It has a solid bank balance and a reliable profit margin that has enabled you to get to a stage where you wish to retire. Now you are looking for a buyer. Well you know that pre tax profit over the last five years has amounted to $20mil, the assets in the factory in terms of machinery and instrument cost you $50 mil over the years, some is a bit antiquated but it all works, the you have other assets worth another $500,000 (Desks, computers, cars and the like) You have a debtor’s book of $3 million being mostly less than 90 days. A bank balance of $220,000. Staff who are hard working and honest. What is your business worth. If you were to set it up today with new equipment it would require $60 mill, Ok depreciate the equipment and cars…so maybe $45 million, Profit say half of the 20mil. The Bank Balance is yours so that doesn’t count, the debtor’s book you could sell for its face value or maybe discount it slightly for the trouble of collection. You would therefore expect to sell it for $45mill plus $10 mill plus $2.7mill = $57.7 mill. Sadly this is unlikely. Professional buyers of businesses won’t buy at that rate. They will discount it even further than you think and will probably start at $35 mill and may top out around $40 mill. This is because you are kind of trapped unable to sell your stock easily. When you do sell you will probably have to bite that loss as well as pay a business broker a commission. An Alternative is to sell it on the New York Stock Market. As you well know that is a very different ball game requiring no end of reports and filings and meetings. By the time you are listed you will have used up a million dollars in fees and costs and spent six months at least in interminable and boring and repetitive meetings. But there is now an alternative in Secondary Market Investment via the Independent Stock Market. It puts you, the seller in contact with genuine investors who will enable them to realize a market value for the company that is actually approaching the market value. This may be done by a public company actually purchasing your company with shares in its own….(it issues more shares to cover the cost of the purchase) and this allows purchased company to become a stock traded on the NYSE. Choosing this option will enable you to achieve a truer value for your company without having to sell off at a discount. If you wish to realize some of the equity you have put in over the years the ISM may be the way to go. They have genuine investors looking for a safe reliable home for their cash and are quite willing to give you the assistance you need to get yourself a realistic value for your business. Published at:

Secondary Market Investment Via the Independent Stock Market Helps You Raise Capital

In the current economic downturn the need for ready cash has never been greater. Even thriving businesses need cash to keep their doors open, the stock rotating and the business growing. Growth costs money as do stock buyouts or take over’s of other companies. So what does one need to raise cash easily? Well the conventional method involves a lot of paperwork. A healthy balance sheet, audited profit statements showing a consistent history for as long a period as you can (3 years is ideal as that is the minimum for listing on a stock exchange). Then you need to draw up comprehensive and workable plans, budgets and the like. Then of course your Bank manager will tell you that he will fund an overdraft, at huge interest but selling capital is not what they do. To get a permanent investment you need to find a venture capitalist. Now these guys are around, usually very well off because they are hard eyed businessmen who venture their capital only where they are absolutely certain of making a healthy return. As part of the deal you will find you have taken their money, given up shares and voting rights on your board plus you might have mortgaged your house and sold your children into slavery giving the ‘belt, braces and tie around the middle’ that they want to lend you the cash. There is no ways they are going to lose a cent. Now in many instances that is fine. If you secure capital from a Venture Capitalist you are probably a sound investment, so why bother with them and rather get yourself listed on the Stock Exchange. Well the requirements for listing on the exchange are very stringent. Very strict regulation controls entrance and, for a start you will need at least 3 to 4 years profit history, audited, budgets and plans and an awful lot of cash to put up to fund the establishment of the share register, the issuing, the publication of the prospectus and so on. Depending on your size you might find yourself forking out a million or two and losing 6 months to a year in the preparation. If you have the cash available and the time to spend then great, you may find yourself the president of a listed company. And then you will be fully involved is the hurly burly of corporate life, dealing with stockholders and the like. But that may not be what you signed up for. You own a successful company manufacturing and marketing widgets which are in huge demand, but you need cash now to put a new line into production, and anyway this is what you do, you dress casually and you are good at knowing the shop floor, the lines that are selling and your customers. This is where the Independent Stock Market gives you access to Secondary Market Investment and comes into its own. It can assist you find investors in your business without the long and tedious paper work and endless meetings with attorneys and accountants. If you are looking for easy capital the Independent Stock Market may suit you. Published at:

Investment Capital – Putting Brand Capital And Human Capital Above Working Capital Or Physical Capital

When you start your own business, you commit to investing your time, talent and resources in the business to make it succeed. You authorize a spending plan; you ask the bank, your credit card company, friends, family, employees, to endow the business to follow your business plan and implement your marketing plan. There’s more to it. You need to determine where you can differentiate your company from the competition, so where should you invest the most resources? To garner the most flexibility, I suggest your investment priorities should be: Brand Capital, then Human Capital, followed by Working Capital with Physical Capital at the bottom of the list. Brand Capital: Invest the most in your market and marketing to them. Up front this could simply be focusing on a small group of prospects. Do the economics to make them well satisfied customers. So much so, that they provide the testimonials or become the spokespersons for your future sales. Remember, the high value transfer of using relationships. Human Capital: This is your team and their track record coming on board. Only hire stars, no matter what. Only employ experts in the key roles of your company. For other positions, look for great talent you can mold to your vision, and move around to meet the company’s needs. In addition, build a stellar Board of Advisors or Board of Directors. A Board of Advisors usually will help you for free, whereas a Board of Directors is paid. The key is to engage thought leaders in your niche who become early adopters of your product or service and advocate for you to their significant networks. Working Capital: Invest minimally here because there’s no added value to the company or the product. Tying up cash instead of using credit may actually slow your time to market. This could be a critical timing mistake if your competition is racing you to market. Physical Capital: Invest minimally here because bricks and mortar don’t sell product. Yes, you need a roof and windows that don’t leak (I’ve worked with many startups in the old mills where workstation layout was based on the leaks and drips.). You don’t need to be a miser. And you need the equipment, technologies and conveniences that will make everyone highly productive. Cost- effectiveness should be weighed here too. Whenever you are investing in your business, recognize that you cannot manage everything, but you can manage the value equation of each investment. Be sure the value to your business is outstanding, so you can win business with every sale. Published at:

The Risky Business of an Equity Capital Market

Equity capital markets are markets that exist between companies and financial institutions, where the financial institutions are in charge of raising equity capital for these companies. The functions carried on by companies in share market where the allotment of new share issues, the distribution of new shares and the overall marketing of new issues. These include private placements, initial offerings to the public, special warrants and stocks. As far as stocks are concerned, deal with derivative tools like stock options, futures and swaps are available through the market.

The financial information available in it depends on the information provided by companies, pertaining to their current financial standings and future performances. Based on this information, people decide to invest in the shares and stocks of various companies. An equity capital markets team comprises of people from different investment banks. This team, or these teams, help companies by carrying out major market functions that include managing the marketing for these companies, and managing the distribution, formation and structure of these companies. Then there is the investment relations team that is responsible for scrutinize and predicting stock patterns. They are also liable for information related to fiduciary duty and other issues, like legal and organizational matters that can affect investors and shareholders.

Investments in it are perceived to be the most risky form of investments. They comprise of large cap, mid cap and small cap companies. Financial information, pertaining to these companies, is made available to the public. Based on the risk appetite of investors and information available people they invest accordingly. Wealth management forms an integral part of equity capital markets.

Wealth management services cater to providing advice on financial investments. The activities include financial management and planning, investment portfolio management or portfolio management, and an assortment of other financial activities. The functions offered by these management services are known as ‘private banking’ services. The investors in these markets are known as HNIs or High Net worth Investors. They are a group extremely wealthy people, who require these services to regulate and manage their wealth. Wealth managers are the ones who perform these services for their HNI clients. Wealth managers can be certified financial planners, MBAs who have specialized in the field of finance, or any certified and credible money manager.

There are also private wealth management services. They involve the function of controlling, managing and planning of funds for wealthy clients that are beyond the scope of an HNI. A private wealth manager is assigned to the wealthiest clients of an investment company. These managers are usually a group highly experienced money managers. The clients are assigned to these kinds of money managers to facilitate better services and better product offerings.

Risk Free Trading Strategies on Equity Market

While taking Equity Market in to consideration the main thing to be noted is the risk. This land will allow you to face both the risks and gain. Both risk and gain will go hand in hand. In case if investor thinks gain is a good thing and risk is a bad thing he is not a right person in staying in this field. It is clearly understood that investing money on Equity Market is a risky thing but in par with this building a stable portfolio will make you to minimize the risk. While investing in the Equity Market the various types of risk are involved in the trading but if you are getting the proper Equity Tips for trading the risk factor will be reduce to a great extent.

There are some risks involved in Equity Market Trading:
•Industry Risk
•Political Risk
•Company level risks
•Financial risks
•Interest rate
•Inflation risk
•Dependence on the economy

Methods of risk free Equity Market Trading:
The ultimate goal of making an investment is maximization of wealth. To achieve this, it is important that the investor gets a rate of return on his investment that exceeds the rate of inflation and is able to meet his long term objective. This is possible when the proper planning and time is given for the investment. Fixed income investments like bonds and fixed income funds offer returns that are no doubt certain and consistent, but their returns are not enough to meet the long term return requirements and sometimes the returns are even less than the rate of inflation. At these times to attain the long term goals of the investors and to beat inflation it is essential to invest in equities. And for this the proper Equity Tips are also very necessary. Equity as an asset class have constantly helped investors to grow their capital much faster than inflation over time and also attain their long term goals, even after factoring in periods of sharp falls.

It is also advisable to select a company with high sales and a long term growth rate and compare the profit of company with Net worth before buying shares. Stock markets tend to take wild decisions in the short run but behave rationally in the long term. Successful investors always base their investment decisions on a shares’ intrinsic value and hunt for bargain stocks. They will buy shares of a company with strong fundamentals when it’s beaten in the market and sell when prices surge.

Mistakes to avoid:
•Don’t be overconfident
•Don’t put your emotions
•Don’t set an amount you can afford to lose
•Changing plan during market hours and not following your strategies
•Trading Blindly on friends and relatives suggestions

Definition: Financial Market Structure

Financial Market Structure
In economics, a financial market is a mechanism that allows people to easily buy and sell financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect the efficient market hypothesis.

Financial markets have evolved significantly over several hundred years and are undergoing constant innovation to improve liquidity.

Both general markets and specialized markets exist. Markets work by placing many interested sellers in one “place”, thus making them easier to find for prospective buyers. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non-market economy that is based, such as a gift economy.

Financial markets facilitate:

* The raising of capital
* The transfer of risk
* International trade

They are used to match those who want capital to those who have it. Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends.

Financial markets could mean:

1. organizations that facilitate the trade in financial products. i.e. Stock exchanges facilitate the trade in stocks, bonds and warrants.

2. the coming together of buyers and sellers to trade financial products. i.e. stocks and shares are traded between buyers and sellers in a number of ways including: the use of stock exchanges; directly between buyers and sellers etc.

In academia, students of finance will use both meanings but students of economics will only use the second meaning. Financial markets can be domestic or they can be international.

Types of financial markets

The financial markets can be divided into different subtypes:

1.Capital markets which consist of:
* Stock markets, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof.
* Bond markets, which provide financing through the issuance of Bonds, and enable the subsequent trading thereof.
2.Commodity markets, which facilitate the trading of commodities.
3.Money markets, which provide short term debt financing and investment.
4. Derivatives markets, which provide instruments for the management of financial risk.
*Futures markets, which provide standardized forward contracts for trading products at some future date; see also forward market.
5.Insurance markets, which facilitate the redistribution of various risks.
6.Foreign exchange markets, which facilitate the trading of foreign exchange.

The capital markets consist of primary markets and secondary markets. Newly formed (issued) securities are bought or sold in primary markets. Secondary markets allow investors to sell securities that they hold or buy existing securities.

A managed Forex account is the best means of investing in the currency market

Movement and change in international financial markets is nothing to fear. Indeed, if properly understood and managed, it is possible to take advantage of such dynamics. Forays into financial investment should be done with care and circumspection. Managed Live Forex Trading, CFDs and Indices accounts tend to be secure and well-regulated. They provide investors with the kind of protection against gross fraud and abuse that one may find in some of the more speculative financial activities.

The foreign exchange market can be entered into in a way that minimizes risk and maximizes opportunities for investors. Dealing with a reputable trading firm such as RIDGE Capital Markets can lead to a great many benefits. Anyone who wants to invest in the foreign exchange market should not be taken in by elaborately tailored discount offers and the like. It is important to be clear-headed and realistic about the kinds of returns one can expect from this particular investment. However, many firms provide forex trading cashback offers as a matter of course.

To be sure, the foreign exchange market has become a boom industry within the past few decades. However, the immense amounts of money that have been made in this industry make it a target for unscrupulous speculators and other kinds of reckless individuals. One of the things you can do to protect yourself against such persons is to work with a firm that provides clear and exact descriptions of its methods and means of trading and investing. Simplicity and directness are vital to understanding how your money will be put to work. It will also give you the confidence in how your money is being invested.

Working with a recognized and qualified foreign exchange broker provides you the opportunity to diversify your overall investment portfolio within a managed forex account. In this way, you are able to manage how your money is used but the greater risk you expose yourself to while you stay invested. There are no guarantees when it comes to investments of any kind—especially foreign exchange investment. However, there is no need to compound the inherent risk with confusion, hastiness, and impertinence. Working with a professional forex firms helps you avoid the pitfalls of risky investments. Such a firm will provide you with the guidance and advice you need to make decisions that will lead to the kind of returns and profitability you want.

High quality forex firms can be located most easily on the worldwide web. Using the web will enable you to quickly scan through the various firms offering this service and select the one you believe most qualified to provide the kind of service you need to manage your investment in the foreign exchange market. The web is a useful and flexible tool. It can provide you with a most efficient and effective means of comparing and contrasting the various forex firms, so that you can make a final decision as to which one you ultimately want to work with. You should always go into the financial markets with your eyes open. A FOREX firm can provide you with such vision.

World Capital Market

Throughout the early modern period, as communications increased in speed and effectiveness, there were attempts to make larger capital markets, with the end goal being the creation of a global capital market where money can be raised internationally, allowing for greater access by all companies to the same pool of capital regardless of where the company is located, and also free of legislative and other restrictions that apply in some parts of the world. Historically, the raising of capital involved transactions conducted between governments and private individuals. These processes were fraught with problems for both sides, and by the late 17th century, in western Europe, there was an attempt to formalize the process.

This saw the creation of the Bank of England in 1691 (incorporated in 1694), and in the early 18th century the origins of other schemes in other countries, some for city corporations, others for governments. However with the Industrial Revolution many capitalists wanted to be able to raise capital to embark on their projects and there was no regular system of raising capital and sharing the risk. As a result with the building of the Bridgewater (or Worsley) Canal, Francis Egerton, the 2nd Duke of Bridgewater, had to take the entire risk for the venture himself, and although he did end up very wealthy, it was a move that nearly sent him bankrupt. Similarly some major capitalist ventures could come to create major crises in the countries where the vast majority of the investors lived. Two of the most extreme examples of these came from France-the attempt by the Mexican government of Benito Juarez to abrogate the debts incurred by previous Mexican governments leading to the French military intervention in the country to install Emperor Maximilian in the 1860s; and another being the Panama Canal Crisis in the 1880s when French investors lost fortunes in speculation in the shares of a company which hoped to build the Panama Canal.

20th Century

By the 20th century, there were numerous banks that were able to lend capital for industrial and other projects. This certainly helped with the needs of the vast majority of borrowers. However there were companies which invested in one country, financed by investment from another. Some of this was to do with the colonial empires, with the capital for the Malayan rubber industry in the 1900s raised in London; but there was also other examples, including the financing of the building of the Argentine railroad system, also financed in London. By the 1900s London had certainly emerged as the main capital market in the world but it was about to be challenged by New York, which started from 1919 to become the dominant center for global capital. With better communications through a regular telephone and telex service, and now with computer systems, it has been possible to link the capital markets around the world and provide, for the customer, wider options and more access to this capital, and for the lenders, a greater ability to spread the risk among capital investors, and also speculators, around the world.

As well as the global capital market which arose in the major financial centers in the world: New York, London and Paris, and later Frankfurt and Tokyo; the oil price rises of the 1970s created a new area of wealth with the availability of what came to be known as “petrodollars.” This led to a number of schemes by which people claimed to have access to a more secretive “global market” with “agents” approaching governments. The most infamous was Tirath Khemlani and his dealings with the Australian government in the early 1970s. The Bank of England warned against these schemes, which profited largely through large cancellation fees which would have to be paid if the government in question wished withdraw from these-there has been no evidence of this hidden “global capital market.” The need for the global capital market became essential with increasingly larger numbers of companies having cross-listings by which their stock was quoted on a number of stock markets around the world. With the global capital market, it was possible to raise far larger sums of money than had been possible earlier, and this allowed investors and speculators to spread their risks over a wide range of capital investments all over the world.

The End of the Bretton Woods System

One of the developments that arose from this global capital market was a convergence of real interest rates around the world. This coincided with the end of the Bretton Woods system and the floating of many currencies in the 1970s, coupled with the U.S. government’s suspension of the convertibility of the dollar into gold. This allowed the rates of exchange between most major currencies in the world to be set by the market, albeit with the government able to influence this through altering the exchange rates to increase or decrease demand for a currency. As a result, if the government of a specific country sought to use macroeconomic instruments such as interest rates, and they were raised, the demand for the currency would create a rise in the value of the currency, after which the real interest rates would be comparable to those in other countries. With open markets, full and audited accounting by governments, and with the free flow of capital into and out of countries, market forces would balance the currency market forming an equilibrium. Economists defined this as the purchasing power parity theory, although similar theories had been around since the Swedish economist Gustav Cassell (1866-1945) suggested that this could become the case as early as 1916.


If the global capital market could cope with balancing out the value of the various currencies, it was soon suggested that widespread speculation could affect the prices of the currencies allowing speculators to make (or lose) vast sums of money. This had led to the Bretton Woods system, which was a deliberate attempt by the United Kingdom, United States, and many other governments to constrain the global capital market in terms of the values of currencies, although it did not stop the two devaluations of the 764 Global Capital Market pound sterling to the U.S. dollar in September 1949 and November 1967. The floating era from 1971 saw a large rise in world interest rates, largely through the rise in the price of petroleum. With the doubling of oil prices in 1978-79 after the Iranian Revolution, the effect was that the economies of North America, Western Europe, and other parts of the world went into recession. George Soros and other operators of hedge funds used the global capital market to raise large sums of money and this in turn resulted in the “Battle for Sterling” in 1992 when Soros fought the Bank of England, and later in 1997 with the Asian Economic Crisis. Since the late 1990s there has also been the increasing role of China in global capital markets, helping create a boom that led to estimates made in 2006 that the global capital market would exceed $228 trillion by 2010, although with the current crisis, this figure now seems improbable.

2008 Crisis

Thus the result of the global capital market and the spreading of risks can lead to many countries seemingly unconnected to the area at economic risk becoming affected. In 2007 with the start of serious problems in the U.S. subprime home mortgage market, the effects were felt not just by the individual lenders, and especially by Fannie Mae and Freddie Mac, but by banks and financial institutions around the world that had invested their money in Fannie Mae and Freddie Mac and suddenly found themselves exposed to the collapse of the subprime market. The crisis was triggered to a certain extent by undue offering and securitization of low-quality subprime mortgages and other lows in the United States, which were abetted by a certain extent by deregulation in the 1990s and a laxity in enforcement of regulations that continued. Stunned American legislators initiated a bailout coupled with a stream of new regulations. Another dramatic effect in 2008 was following a crisis in the Icelandic banking system, it was revealed that vast numbers of individuals, companies, town corporations, and public organizations had invested their money in Icelandic banks because of the better returns offered, without realizing that this increased their level of risk. While there was confidence in the global capital market, there were no problems, but as soon as “panic” breaks out, there is a quick flight of capital, leaving those less able to quickly react to take potential or actual losses, and in extreme cases to lose their investments as well.

Francesco Zinzaro.

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