In part three of this four part series we will be discussing the next four principles of stock market investment. Previously, we discussed about the first three principles of investment. Number one principle is that the stock market is just another vehicle of investment. Secondly, you must realize that investing in the stock market is a like roller coaster ride. The third principle involved answering the question on what type of investor you are. If you wish to view the entire article in its entirety, visit my blog.

4.) More cash more profits, but you don’t need a lot to start investing. - Investing in the stock market does not require you to have millions or hudreds of thousand of pesos. My personal estimate is that you need P 20,000.00 to start trading.This is what I started with. But even if you only have P 10,000.00, you can already start trading. However that amount may be too small in my opinion. To drive the point of the above principle lets say you bought shares of Jollibee (JFC). Jollibee shares cost only 51.50 today. The board lot (the minimum amount of stocks that you could invest in) is only 100. If you calculate, you only need P 5,150 (51.50 x 100) to be “part owner” of the Philippines’ number fast food chain company. Lets pretend that after 1 year the per share value of the Jollibee stocks you bought already cost P 100.00 per share, you have gained P 5,000.00 more. Imagine the profits you are making ! How much more could you have made if you invested in 200 shares ?

5.) The key to growing your investment is consistency - Don’t be contented to stay small. Aim high ! Aim to play with the big players. You must have the discipline to slowly but consistently invest a part of your income to the stock market. By doing this your portfolio will grow since you have more capital to invest. I did not just stop at P 20,000.00, I slowly added to my investment. Consistent investment is a good habit to develop.

6.) You must learn to minimize your losses and maximize your profits - If your stock goes down, remember that the loss is only on paper. There is no actual loss until you sell your stock at the “losing” price. Hence the best way is to never ever sell at a loss. That is why it is important that the money that you invest in the stock market is considered as really “extra money” and not your emergency fund. If you invest your emergency fund or your savings you will be forced to withdraw sell your stock at a loss. Similarly if you sell your stocks and you profited from the sales, or you received dividends, utilize the profit or the dividend to buy more shares of stocks.

7.) The stock market is not a get rich quick scheme - In all investments always take note of the principle that money takes time to grow. Those Investments that give you very high rate of return in a very short period of time are most likely investments that make other people rich, not you. Most likely it will take several months or even years in order for you to really profit in the stock market, especially in the Philippine stock market. There are times that it will just take weeks or days to really make a killing. However these are rare occasions. This usually occurs in cases like when there is a consistent bull run or that there is an unusual drop or climb of prices in a short length of time for various reasons.

Many people believe trading the markets is akin to gambling. This comparison is certainly true a lot of the time, especially when a person throws all caution to the wind.

But to say trading is like gambling in all cases is too broad of a generalization. With the proper training, an option trading practice can be run like a business.

For example, as a business owner, you would want to limit your risks, maximize your profits, and cut your losses. And the same is true in option trading.

Reducing Risk

Naturally, if there is no demand for a product or service, a business owner is not going to try to sell it. That involves a high degree of risk. He will only sell products for which there is already healthy demand.

Similarly, if a stock is not “trade-able,” an option trader will avoid it. That’s because it’s extremely risky to trade a stock that has no clear trend or pattern.

Maximizing Profit

Some promotions work better than others. If a business owner finds one that really cranks, he’ll run it again and again to milk as much possible profit as he can out of it.

A smart trader will do the same thing. If a trade moves in his favor, he’ll ride it for all it’s worth, tightening his stops along the way to lock in profits should the price turn around.

Minimizing Losses

Whenever a business owner finds he’s got a product that won’t sell, he’ll try to unload it quickly, even if that means slashing the price and taking a loss. That’s because it’s better to liquidate the inventory and use the cash to invest in a better product.

The same is true for the savvy option trader. If a trade moves against him, he will quickly admit his mistake, sell his position for a small loss, and move on to the next trade.

Clearly, recklessness is dangerous in both business and trading. But with preparation and the right attitude, option trading can be run just like a business.

A bad economy spurs more people to invest in series EE bonds. Series EE bonds are US savings bonds that are sold to individual investors in small denominations. Investors seeking safe investments often consider investing in series EE bonds, since they are free from risk of default.

The interest rate that series EE bonds pay is very low. For example, they pay 1.40% interest fixed rate in 2008. Series EE bonds that were bought in May of 2005 and afterwards will earn a fixed rate of return whereas series EE bonds bought between May of 1997 and April 30, 2005 will earn interests based on the current market rates.

There are many ways to buy series EE bonds. The Treasury Department has made it easy for small investors to invest in them online. Most people buy series EE bonds at local financial institutions or through payroll deductions. However, not all employers offer the option of investing in series EE bonds.

While in the past, you could only purchase paper series EE bonds, nowadays there are electronic series EE bonds available. The smallest denomination of series EE bonds you can invest in when buying them online electronically is $25. However, if you were to buy paper series EE bonds, you will need to start at $50 denomination. But, since paper series EE bonds are sold at discount, you only pay $25.

The pricing of series EE bonds differs when buying paper series EE bonds or electronic series EE bonds. Paper series EE bonds are sold at discount. You only pay 50% of the face value of the series EE bonds you buy if you don’t buy electronically. For electronic series EE bonds, you pay full price.

Series EE bonds, like other bonds, should be held long term. The shortest time you must hold series EE bonds is one year. After that you can redeem them. Interests on series EE bonds, however, accumulate for 30 years but early redemption is possible.

There is a penalty to redeeming series EE bonds early. The penalty is that you forfeit the latest three months of interest payments if you redeem series EE bonds within the first five years. After five years, you will not pay any penalties.

Since series EE bonds are guaranteed by the US government, they are considered one of the safest investments around. People buy series EE bonds for many reasons, not just for investments but also for education funding as well as retirement funding. Best of all, Series EE bonds come in many different denominations and are extremely flexible for your budget.

Becoming a successful forex trader is not a matter of luck. It may seem like trading in the forex market is like rolling the dice and hoping that lady luck shines upon you, but there is much more to it than that.

If you look into the success of anyone doing well in the forex trading market, you will undoubtedly find a background rich in quality training and relationship building. Anyone who has built their skills on a foundation such as this can’t help but be riddled with success.

You have heard all the hype about training and education. Maybe you have already taken an online training course from a seasoned forex trader. You may already be familiar with all the basic terms and the different strategies. You have found a quality forex broker and visited all the popular sites like fxstreet. They make it seem so simple. There has to be another secret, right?

Successful trading begins with training, but that is just the beginning. You must be able to strike a balance between your technique, managing your finances and your attitude. Your attitude plays a huge role in your potential success as a forex trader.

If you are not confident enough to believe that you can be successful, you have already sealed your fate. Luckily, this can be reversed with some minor tweaks in your self confidence. Ever heard of the little engine that could? You must say to yourself that you know that you can do this. You can be successful.

Furthermore, you must stay away from second-guessing yourself. By doing this, you lead with your emotions, not with your skills. A few bad decisions can cause you to dwell in self-doubt, and everyone knows that this self degradation is not conducive buying and selling successfully.

However, you must understand that you may not always get exactly what you want from a trade. Any forex trader will tell you that there is no perfect trade. There are some traders sit too long without making a move.

Your success in the forex market will only come when you have a handle on all the right ingredients: a dedication to the job you do, the risks you take, and the market you serve. You also must develop an understanding and respect for the right information, and having a well-seasoned forex broker can never hurt. In the end, if you are disciplined and passionate, you are well on your way!

If you are interested in getting started wholesaling properties, you may not be sure what state laws are concerning this kind of real estate transactions and you certainly don’t want to break any laws unknowingly.

Although every state is different, I assure you that wholesaling is legal everywhere. This is just business like any other and the free market system - buying low and selling high - nothing illegal about that.

If you are not a realtor, you don’t have to worry about it also because you are not considered a professional. Even though some realtors don’t know Jack - I know some people who have taken Realtor test - in several different sates - and passed without studying. In most states you only have to score a 70 to pass the bloody exam and get your license. That was a D grade when I was in school. So much for them being professional.

Here is my philosophy about the legal aspect: do what is right and be brutally honest in everything you do - and you will have nothing to worry about. If you are still concerned about the legal aspects, a real estate closing attorney or a real estate specific attorney can point you in a right direction.

In my opinion, the only people that should be worried about legalities are people who are trying to cheat others. When you purchase and sell a house “As Is”, a buyer will not be able to come back on you. Be honest about everything and don’t try to trick anybody in any way. Do right, tell the truth, and you should have nothing to worry about.

With the demand for natural gas being higher than ever as well as tax breaks for those who invest in drilling for natural gas, there are more people than ever who are choosing this type of investment. Like other investments, an investment speculating on finding natural gas when drilling is risky, but can yield high returns. As a matter of fact, the returns that you can get for such an investment can be higher than any stock investment.

There are elements of risk when it comes to investing in the exploration of natural gas or oil. Two of the major risks are the idea of meeting up with shady investment firm who might try to bilk you out of your hard earned money and running into a dry well. While you cannot avoid the second scenario, as a dry well can often come up with any type of drilling expedition, you can do your best to avoid hooking up with shady companies that are more interested in parting you from your money than drilling for natural gas.

One of the first things that you should do when you are considering an investment that involves drilling for natural gas is to check out the company that will be doing the work. They should be a reliable company with a stellar reputation in the field. Most companies that drill for natural gas also drill for oil. In some cases, both oil and natural gas may be found in the same location. Some wells will only contain natural gas. Others only oil. Your job is to do your homework and check out the company to make sure that they are legitimate.

A good investment with a reputable company will net you an ongoing cash stream on your investment. This is what most investors are looking for when they decide to invest in the exploration for natural gas. If the company has been in the business a long time, they will most likely look to recently explored wells as well as areas that have the potential for oil and gas before they start drilling. You will want to avoid wildcat drilling, which is when the company just decides to drill in places where there is no sign of oil or gas. While a wildcat well might turn into a goldmine, in more cases than not, it turns into a loser for the investor.

Although you can write off a good portion of your losses if the company runs into a dry well, if you are investing in the exploration of natural gas, you most likely are looking to make some sort of profit. By sticking with companies that have a proven track record in the field and understanding how much you own of the investment as well as how much you stand to gain, you are better equipped for this investment.

If you run into a dry well, do not get discouraged. The tax advantages for this type of loss are considerable. You can write off 65 percent of the loss when you file your income taxes, making the investment not exactly a total loss.

One way that you can make your money work for you is to invest it. There are many ways to invest money today, all of which have some element of risk. When you think about investing, you may think about investing in stocks, which are shares of a company, or commodities, which are investments of tangible products such as crude oil, gold and even corn. When the price of the stock or commodity goes up, you make money on your investment. The money that you make is called capital gains and you are taxed on these earnings.

When you invest in natural gas exploration, however, you are taking a risk, but with the safety net of a significant tax write off if the well turns out to be dry. Many people, when they imagine drilling, think only about drilling for oil. Not all drilling produces oil, however. In some cases, it can produce natural gas. In other cases, it can produce both oil and natural gas. In the worst case scenario, it can produce nothing, which is called a dry well.

The government is very eager to make it attractive for individual investors to put their money into trying to find new sources of energy, especially natural gas. The United States has more natural gas deposits than any other country in the world, many of which are untapped. This is why the government gives tax advantages to those who invest in the exploration of natural gas.

Investing in natural gas is not buying the commodity. When you invest in the exploration of natural gas, you are actually going into a somewhat of a partnership with a company that is drilling for this commodity. If they find the gas, you can write off the profits over a period of years, often for the life time of the well. If they do not find gas and end up with a dry well, you can write off the loss up to 65 percent. Some investors, who have much money to invest and are looking for tax write offs, actually invest in natural gas exploration as a loss, anticipating the write off that can actually put them in a lower tax bracket.

Other investors who put their money into a project that is successful, find that they can not only reap the benefits from the investment, which add up high yield returns, but also can stretch out the capital gains over a period of seven years as well as write off the cost of the drilling. Investing in natural gas exploration is not without risk, but there are tax incentives as well as the potential for huge profits to be made in this type of investment vehicle.

Investing in domestic oil exploration is not the same as investing in oil commodities. When you invest in oil commodities, you are betting on the price of the oil going up. This pertains to oil that has already been discovered and refined. When you invest in domestic oil exploration, you are investing in a potential well for oil. There is a risk for both types of investment, but investing in exploration of oil or natural gas has the potential for better returns, includes tax benefits and can not only help you, but the entire nation as a whole.

When you are considering investing in the exploration of oil, such as the drilling of a new well, you should consider companies that are close to home and have a proven track record in the field of domestic oil exploration. You will be buying a share of the well when you invest in such a venture. The cost of the drilling, including labor and equipment, can be written off on your income taxes, prorated to the portion of the well that you own.

Before you decide to embark on investing in a domestic oil drilling project, get to know the company that you will be dealing with. Make sure that they have been in the business for a while and have provided returns for their investors. You should also know about where the well is located and why they feel that drilling will yield oil or natural gas. Make sure that you understand just how much of the well you will own.

When you deal directly with the company rather than a series of brokers, you have a better understanding of what is going on with your investment. Many people get turned off by investing in this type of venture because they have heard about people getting cheated in scams. This usually happens when someone deals with someone other than the company. They might buy a share of a well from someone who owns one twelfth of the investment from someone else who also has a share from the company. This is usually too many hands in the proverbial pot. If you deal directly with the company as solid investor, you are privy to what is really going on and not hearing it second hand. You are avoiding the potential for a scam.

You also have more of a chance of obtaining not only a profit, but a steady cash flow, if the drilling is successful. While some people hope to strike it rich by hitting pay dirt in a wildcat well where there are few other investors, others play it safe and invest with companies that have been successful in drilling and will provide them a steady cash flow on their return. The returns on the investment can be 10 to 1 in many cases, making them more lucrative than any other type of investment.

Learn about the company and deal with trusted individuals before you embark on investing in domestic oil exploration. This can be an investment that provides you income for many years and offers you tax benefits as well.

Investing in domestic oil drilling can be one of the most rewarding types of investments available today. Not only are there tax benefits associated with this type of investing, but the returns on investment of a successful well are more than you can get anywhere else. Still, you have to be careful of the scams that are running in this industry. Just like any other type of investment, con artists often prey upon the naivety and greed of the investors. Here are three ways to avoid getting scammed when you are investing in the exploration for oil:

Stick close to home

Investing in an oil well halfway across the world not only will not offer you any tax benefits, but can end up parting you with your money sooner than you think. Not every country has the same laws as the United States when it comes to fraudulent investment activity. You are better off to stick close to home and with a domestic company when you are investing in oil exploration. Not only that, but investing in domestic oil drilling nets you tax benefits that you will not get if you invest in foreign oil expeditions.

Deal with the company

Dealing directly with the company instead of a series of middle men will help you avoid getting scammed. The company has more invested in the project, in most cases, than you. They have a desire to hit a good well and produce oil. You are giving them some money towards this venture, just as you would be giving money to a company when you buy their stock. When you deal directly with the company instead of someone who wants to sell you their shares in a well, you avoid the potential for being cheated. You should also get to know the company and make sure that they have a track record in this field.

Avoid get rich quick propositions

The get rich quick proposition is something to be avoided at all costs. Con artists prey on greed from the investor and hope that the desire to get rich will overcome their common sense. Avoid any get rich quick propositions that come your way. There is no such thing as a sure thing when it comes to investing in oil exploration. Why would anyone sell you something that has the potential to earn them millions?

If you follow this advice, you can avoid getting scammed when you are investing in domestic oil exploration. There are many benefits, including tax breaks, as well as the potential for good returns on your investment if you take the time to invest wisely.

When you think of investing in natural gas, you will most likely imagine investing in drilling for oil. Not all wells produce both oil and gas. Some wells produce natural gas alone. Natural gas investing is something that can be a very profitable investment if your well turns up with this valuable commodity.

With the ever increasing cost of energy, exploration for natural gas has become more necessary than ever. And with so many people losing money in the stock market, investors are looking for ways to recoup some of their lost investments. The stock market has always been a very risky form of investment. This is why so many people are seeking alternate forms of investing that can not only have the potential for a very lucrative long term investment, but is also tax deductible.

Unlike investing in the stock market, investing for natural gas exploration and in the prospect of finding natural gas is a tax deductible investment. This means that even if you do not hit pay dirt with your investment, you get the benefits of a tax deduction for your investment. When you invest in a company that is seeking natural gas exploration, it is crucial that you know as much about the company as you can. You are better off going with a company that has been in this business for a while and has a proven track record of some success.

Because of the tax benefits coupled with the need for natural gas, an increasing number of investors are changing to investing in the exploration for natural gas. This is not like investing in oil or gas commodities, that rise and fall due to increased or decreased supply and demand. This is actually purchasing shares in an exploration project.

The demand for clean, natural gas has increased ten fold over the past few years. The United States has more natural gas than any other nation in the world. The science is to find this gas. It makes for a cleaner energy that is much in demand by environmental groups. This is one of the reasons why there are tax incentives for investing in natural gas exploration and investing in natural gas.

Even if your investment does not hit a natural gas supply, you will still get the tax write off for making this investment. This can actually net you more money than if you put your money in more traditional investments. Find a company that has been participating in natural gas exploration for a significant amount of time and understand how much of the project you will be financing before you embark on such an investment. If you investment does hit natural gas, you will not only be privy to a huge tax incentive, but you may reap in enormous profits over a short term or period of years, depending upon the well.