There are many do’s and don’ts with investing. Most are pretty straight forward. But some can quickly get you into trouble. Here are five bad investing habits all worth avoiding and a few that can quickly lose your money.
Buying on Margin
Margin trading is a great way to boost profits, it’s also the only way to lose more than 100% of your investment. Buying on margin is using credit to buy securities with the hopes of increasing your profits. The downside is the potential to lose everything and still owe your broker for interest and other fees.
When it comes time to pay, it’s not like a credit card where you send in a minimum payment. With a margin account, if you’re too far in the red, the broker doesn’t need your approval to sell your securities to cover the difference. Your just out of luck and money, wishing you never opened a margin account. Continue Reading…
The recent Fed hints at ending QE means rising interest rates. It also means big changes in the markets. Here are several ETFs to protect yourself and invest in as interest rates rise.
Whether a stock pays dividends may play a big role in your investment strategy. A dividend provides a source of income. It offsets losses. When reinvested, it compounds growth. But this isn’t an argument that dividend paying stocks are better. It’s an introduction to dividends, giving you an idea of what to expect and what to watch out for when owning dividend stocks.
A common way for companies to return money to shareholders is through stock buybacks. When done right, it’s the easiest way a company can increase shareholder value outside of growing the company’s earnings.