Friday, February 22, 2008

Make Money The Best Way In Markets

Simple is good and easy is good too. If there is a way to make money in the stock market that is easy and a way that is hard, which is better? The easy way. Right? So what is the easiest way to make money in the stock market?

Well, I have my personal opinion, and I'd be happy to share that with you.

The easiest way to make money is to sell calls against solid stable companies. Covered calls are the easiest way to make money in the stock market. Now that said, there is a lot of misinformation about covered calls trading out there. I've heard people like Wade Cook saying that you can make 20% per month trading covered calls. Well, good luck at that. It's really hard to do that. You have to only trade really dangerous stocks to do that.

Also there is misinformation that that they only work in a bull market. Again not true. At least not if you do covered calls right.

So, let me tell you about the right way to trade covered calls. Here's how. First ignore the stocks that give you the high premium. The premium is high for a reason. The stock is very volatile. You don't want that. You want the stock to be quiet.

So stick with companies that are large and are profitable themselves.

That's the key to make money. Sure with those kinds of companies, the option premium will be much smaller. You won't be able to make 20% per month. You might only make 3%, but annualized that's still 36%. That's good.

Do you want to learn more about how I do it? I have just recorded a 25 minute CD called "How To Pick Winning Stocks - The Secret Formula"

Risks In The Financial Market

The money market is one of the safest financial markets available. It is commonly used by large corporations, financial institutions and governments to secure their money resources for a short period of time. They are often compared to the bond. They are secure investments that are specialized. The main difference, though, in a bond and a money market is that the money market is usually for a very short period of time, usually under a year. You may hear them referred to as cash investments because of this short turn around.

In the most basic of form, the money market is a borrowing of money by a government institution or other large corporation. They are very liquid and are very safe. In fact, when your next bull market falls off, this may be where you plan to put your money. But, with this safety also comes a lower return, as it rightly should.

You can also compare the money market to the stock market. Because the process if virtually the same, you can see how these two elements can be compared. But, the largest difference in them is that the money market is dealing with much larger funds. While in the stock market the individual investor is able to get into the game rather easily, the money market is dealing with such a large amount of money that it is much too high for most. Also, it is a dealer marketing in which companies and governments buy and sell within their own accounts and at their own risk.

If this all sounds too good to not get into, the best way for the individual to get into the money market is to look into money market mutual funds. These funds pool together money from several sources so that they can compete for the money market shares. You can also look into treasury bills as a way of getting into it. The money market is a complex place and you can learn quite a bit more about it, how it works and why it works and see how well you can get into it!