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Investing in rental properties can be made less risky if the income potential of the building or structure is thoroughly analysed before any concrete steps towards purchase is taken. The analysis should cover the following points:

• The investor’s financing strategies should be manageable – i.e. check whether he or she can afford it!
• Discuss with local rental property owners about their experiences in the market and also consult accountants, legal functionaries, real estate brokers, people handling land registry, insurance, taxation, etc. to get as much information and details as possible.
• Find out what the market values are for different properties in a particular area and what kind of discounted rates are possible on these.
• Remember that there will be vacancies which may linger for months, leading to lower income than envisaged. Also consider that some tenants will be unable to pay the rent at times or for months together – which may even require eviction. Collect and set aside all the security money you take from tenants – investing the amount to get additional income from the interest is a good idea. Base your estimation of the total income from the property on realistic rather than ideal situations.
• Consider the total expenses – mortgage payments, insurance, hiring staff to maintain the building(s), utilities, maintenance and repair – both regular and emergency, advertisements to get new tenants, improvements, misuse of free facilities provided to the tenants, etc. This will give you a fair idea of what the total costs of purchasing and holding on to the property is going to be.

About the Author:
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This is a matter of timing and now is the time to make money with gold. You should only invest when enough of the essential factors are lined up as they are right now. When not enough of the essential factors are there, gold is a lousy investment, as it was 22 years ago. Now that all the factors are lined up,  they will remain that way for years.

In all probability, during the first few years of this golden bull market, you will eventually make money in the metals, no matter when you bought them or how much you paid for them. Any investment in gold at almost any price will eventually pay off. Although the long-term prospects are terrific, the metals can be silent for years at a time like those nearly two decades between the end of the last bull market in 1980 and the beginning of the current one.

After finally giving up on the metals in the 1980’s, we have watched gold go sideways and down for many years. As it was not the right time for the metals, we made our money in carefully selected stocks, bonds and real estate for more than two decades while keeping an eye out for today’s conditions.

So what conditions are favorable to gold investment?

Money-creation that is monetary inflation must be in an uptrend. That is the case right now, and has been for years, even during the 22-year metals bear market. So far, so bad, but alone, it is not enough to cause a gold bull market.

The dollar is losing exchange value against foreign currencies. This is so essential that when the dollar entered its last decline it finally prompted me to turn more bullish as I was doing my investments in gold. Without a weakening dollar on the exchange markets, any moves in the metals will be temporary. Now we not only have that, but we have moved beyond it, into the next currency phase which is: the metals are rising against all currencies, which is immensely bullish.

War or the prospect of war. The war on terror and the war in Iraq are beginning to meet this condition to quite an extent, although the battles have been contained mostly to the Middle East. War breaking out elsewhere in the world : a terrorist, biological or bacteriological attack, or Iranian fanaticism triggering a nuclear war – would meet this requirement. War is a wild card because it triggers inflation due to wartime spending and national and international fear. It is basically unpredictable.

Not all of the conditions have to be met at the same time, but the first two conditions listed are essential.

Fortunately, the timing is right, and even if the bull is not on his four legs, the decision when to invest in the metals is now evident and will be for some years. Just do it, and you’ll benefit from gold’s safety and security.

Conventional wisdom usually does not work well trading the markets. You might hear something like “Now is the time to buy that stock, it’s been going down, it’s cheap and a great deal now”. Then back in early 2000, some of the so-called stock market experts said something like this, “The current bull market in stocks is different this time, it may never end”. Well, so much for listening to some of the so-called experts. There are many reasons why most people lose trading the markets.

Legendary traders, past and present, believe for the most part that diversification is a crutch for ignorance when it comes to trading or investing. One of the greatest traders who ever lived, Gerald Loeb, stated the following. “Over-diversification acts as a poor protection against lack of knowledge”.  There is no good reason to diversify your investments if you truly know what you are doing. If you possess sound trading knowledge that has been proven successful decade after decade, you would only trade the very best opportunities which put the odds strongly in your favor.

The most successful traders in the stock market will focus on the general market direction, the top sectors and the leading industry groups. Then using expert timing, they will only buy a leading stock from these top groups. The general market must be in an uptrend at this time. Solid money management must also be implemented. The diversification crowd will tell you to buy a stock from each sector and this will protect you. If you want to have really good trading results, that is nonsense.

There’s a reason why great traders such as William J O’Neil, Jesse Livermore, Gerald Loeb, Bernard Baruch and Richard Dennis are among the most successful traders and investors of all time. They implemented strategies, methods, techniques and principles that have been proven successful decade after decade. These legendary traders put as many factors as possible in their favor before taking a position in the market. They also used strict money management, cutting all their losses short.

If you want to become a successful trader, learn all you can from these legends. Read their books, study and learn how they trade. You will be surprised at what really works and what don’t work in the marketplace. With diversification, you’re only hedging against ignorance. It takes proper trading knowledge to achieve superior results.

About the Author:
Gary E Kerkow is Chief Investment Strategist for Tradingmarkets4u.com. Over 20 years of trading experience including stocks, futures, exchange traded funds and options. He implements the strategies, methods, techniques, principles and psychology of the world\’s best traders and investors. This includes Jesse Livermore, William J O\’Neil and others. Visit my website at http://www.tradingmarkets4u.com

Knowledge and Training Lead to Confidence

Having an online broker account can afford you a total sense of power. All of them offer the traditional personal help for a price. Some online brokerages will give out free advice, however, as always, the decision whether or not to trade is left totally at your discretion. For the novice, the easiest ways to get involved  with on line trading is with stocks. As a beginner you must be made aware of the stock  market vernacular. Day trading is trading that from the moment you take a position to the second the transaction is complete, only one trading day has elapsed. This may seem very obvious to most of us, however, there are so-called experts who lump all online traders into the bag of day trading. For the sophisticated observer it is plain to see the obvious differences. A day trader rides the rush of the asset, while a swing trader diagnosis the trends and holds onto it as long as the momentum  last.

Anyone who is just getting their feet wet with online trading should begin as a swing trader. With the proper software you can swing trade while keeping your job or enjoying your retirement. Swing trading is traditionally considered a low risk venture, especially for those who trade the large cap stocks. But is there really such a thing as low risk in these volatile times? Some experts will tell you that swing trading only works in a stable market, where the prices don’t fluctuate, but I feel that if you are properly trained you can make money no matter what the market is doing. So how much investment capital should you have? To quote the investment companies disclosure, and I’m paraphrasing; “never invest more than you have to lose.”

It is important to set a limit on how much you plan on trading with, and the amount you are comfortable with losing. It is like gambling, make no mistake about it. However instead of just rolling the dice, putting your chips all on lucky 7, or hopelessly watching the little pea spin around, you can learn what is the equivalent of counting cards. For example, the term stop loss is one that you should know and understand its meaning before placing  any position. It is the amount of money you are willing to bet that you are right about your decision to get in when you did. If you are long, than the stop loss is placed just under lows it has already reached. That way if the stock goes south your losses are kept at a minimum. There are three basis fundamentals, I believe that every foundation for sound trading should be built upon.   Knowledge    Training    Software

Knowledge is Gained by Experience

Proper Training Will Lead to a Successful Experience
The only thing that separates an intelligent person from an expert is knowledge.  Let us assume that you have some knowledge or you wouldn’t be researching the market. Any training you receive should be for technical analysis, or you are just wasting time and money. They are many facets to technical analysis, but the one I’d like to touch on briefly is candlestick charting. When I first started trading, it was the one part of training that is the easiest to comprehend. Don’t get me wrong.  It takes a keen eye and  patience to master it. For those of you not yet familiar with candlestick charting, I will try to give a brief but accurate explanation.  The Chinese invented the market concept, and the Japanese perfected charting techniques with the use of the candlesticks. It is easy to understand this complex system, if we simply break it down to the ticks on the chart you follow every day. We know that the lower tick is where the stock opened and the higher is where it closed. Now if we made the two lines parallel and connected them, what would we have? A candle. However, during that movement, the stock might have gone lower or higher then where it opened or closed, so our candle has formed a tail and a wick. Is it starting to make a little sense to you? Can you see the advantage of knowing this information, for getting in and out, and setting a stop loss?

Your Software Platform Should Be Technically Sound

Four Ways to Ensure Profits
As far as software platforms, the following suggestions I strongly feel are necessary for any software to be useful.

1. It must be able to offer live streaming technical data.    (Otherwise the program is merely educational)
2. The platform should defiantly include candlestick charting.
3. Visually it has to be large enough for all the data to be seen easily. (Many of the online brokerage’s technical data are too small to be useful)
4. It must be cost effective. (Most good systems can be purchased for between one and two hundred dollars)

I don’t profess to being an expert, but I do know of some. I obviously don’t have the time to go into all the details now, but at my site  Market Mentalist you will find all you need to know about investing online. There is access to some of the top trading systems available including software, books, newsletters, and Forums. Whether you are an inquisitive novice or a seasoned pro Market Mentalist offers the online investment resource you just might be seeking.

About the Author:
At 57, I consider myself to be a Jack Of All Trades And Master Of Nothing. I was a struggling actor for 25 years. During that time I learned a little about a lot of things, and would like to pass along some of that knowledge. I live in California with my beautiful wife and a menagerie of pets.

Being Street Smart

Sy Harding

SO WHERE IS THE CORRECTION?  August 28, 2009.

There’s been a significant change in the mood on Wall Street and therefore in the financial media, in recent weeks. After perpetual bullishness for months, it seems that independent analysts, and even Wall Street spokesmen, pretty much now agree the market is overbought and overdue for a correction.

The only debate seems to be that those bullish on the market say it will be only a minor five or ten percent pullback, while bears expect something worse.

At first glance, it does make me wonder to see so many expecting a correction, the only debate being its severity, given the market’s history of doing whatever it takes to fool the majority.

But then when I look around, I realize that it’s Wall Street professionals and insiders, for instance Mohamed El-Erian, CEO of bond-trading giant PIMCO, Jeremy Grantham, chairman of giant money-management firm GMO, etc., long-term very astute and successful, so-called ‘smart money’, previously bullish, who have now turned bearish. It’s Sam Stovall, chief investment strategist for Standard & Poor’s, and Art Cashin, director of NYSE floor operations for UBS.

When we look at the so-called ‘not so smart’ money, the groups that are so often wrong at market turning points that they are known as a ‘contrary’ indicator, we don’t see expectations of a correction, but the excessive bullishness and confidence usually seen at rally and market tops.

For instance, the Investors Intelligence Sentiment Index is at 51% bullish this week, its highest level since December, 2007. Its bearish percentage is just 19.8%, its lowest level since the market top in October, 2007.

At last look a couple of weeks ago, traders at Rydex had two and a half times as much money in leveraged bullish funds as in leveraged bearish funds, a higher ratio of bullishness than when the market topped out into the four straight down weeks in June.

Then there is the VIX index, also known as the Fear Index, which is based on the sentiment of options traders. It has plunged from a record level of fear and bearishness, 81 on the index, at the market’s November low, to a benign and unworried 25.

So there we are, with the smart money warning of a correction, while the usually wrong groups are at high levels of bullish sentiment usually seen at market tops.

But it’s been that way for several weeks.

So where is the correction?

And indeed, why does the smart money expect a correction?

Well, not only does the market have a history of doing whatever it must to make the majority of not so smart money wrong at the turning points, but it also has just as clear a history of correcting its excesses. And it’s difficult to claim that there are not substantial excesses currently in the market.

The most obvious and frequent observation is the overbought condition technically, with the major indexes over-extended above their 20-week moving averages to an extreme degree. Historically that has usually resulted in a correction back down to at least retest the potential support at the m.a. But more often than not it overshoots on the downside as it did on the upside, and breaks below the m.a.

A decline just to their 20-week moving averages would be a 10% correction in the S&P 500 and Nasdaq, about the worst of what bulls expect. A break below the moving average would be something more, bears calling for a retracement of half the rally off the March low, or worse.

Seasonality is also often mentioned in the ‘smart money’ warnings, references to the historically most negative three-month period of August, September and October.

Then there are concerns that in its huge rally off the March low the market has factored in better economic conditions ahead than are likely to be seen.

So, a very overbought market, extreme investor bullishness, unfavorable seasonality, a market that’s ahead of reality, selling by insiders, and warnings from ‘smart money’.

So where is the correction?

Those expecting it are shaking their heads, wondering the same thing.

PIMCO’s El-Erian refers to the market as being on a ‘sugar high’, and says we know the letdown when we come off the energy created by a sugar high, but we can’t pinpoint the hour when it will begin.

Each week it has been said the market decline will begin the next week. Art Cashin’s favorite phrase each week for the last month has been “It should all become clear by next Friday.”

A few weeks ago the newly bearish (as well as the already bearish) were pointing to August as frequently being a reversal month into September, which in turn is historically the worst month of the year. Three weeks ago, after four straight up-weeks, the market was down for the week, and that was probably the beginning. Two weeks ago, it was the old adage of sell on the beginning of Ramadan (August 22 in North America this year). Last week, it was that once the positive activity associated with last Friday’s options expirations are history, the correction would begin this week.

But it hasn’t happened.

This week it is that typical positive action around the end of the month, and the lack of participants, is holding the market up. But when September, historically the worst month of the year, arrives next week, and big investors and institutional traders get back from their summer vacations, and volume picks up, watch out.

Well, maybe. Meantime, no wonder investors remain bullish and confident. Nothing is coming of the warnings, no matter their source.

Sy Harding is president of Asset Management Research Corp, publishers of the financial website www.StreetSmartReport.com, the Street Smart Long/Short Stock Advisor, and a free daily market blog, www.syhardingblog.com.

About the Author:
Sy Harding is CEO of Asset Management Research Corp., author of 1999’s Riding the Bear and 2007’s Beat the Market the Easy Way, editor of www.StreetSmartReport.com, and www.SyHardingblog.com.