Binary Options Trading Tutorial - Forex Signals | Make Money Day Trading » highest return investments

High Yield Investing in a World of Default

Options Trading — Tue, 09 Nov 2010 15:26:33 +0000

High yield investing exists principally because of default risk. That isn’t any great surprise to people who have been around long enough to know what a bond is. The credit rating of the average joe or company is based on a number of factors, not the least of which is total amount of debt outstanding and debt load relative to income. None of this should come as news to you if you are reading my column. I only say it to lay the foundation of where the rest of this economic commentary is coming from. Duh Moment: High Yield Investments Have High Risk of Loss While high yield investors continually scan the financial pages for the next good bond deal or CD to buy, how many of them really just think about the number to the left of the percent sign and don’t take serious time to evaluate the possibility of the company or individual of going belly up and defaulting on payments. Seriously, didn’t we just go through this with regard to the mortgage crisis? Didn’t an entire industry participate willingly (due to commissions/bonus/production incentives) in the creation of debt securities (whether knowingly or not) that were certain to [...]

Highest Return Investments Always Require Leverage

Options Trading — Tue, 08 Sep 2009 10:31:15 +0000

You will come to find the highest yield investments inevitably come in the form of small gains either massively amplified by leverage, or repeated hyper-rapidly by automatic trading programs. If you’re fortunate enough to own one of those programs, great. If not, you need to learn about leverage. I am always looking for the highest return investments – whether I am looking to invest my money, my time, or anything else. I always want to know where to get the most bang for my buck – and when it comes to investments… I usually find it. The More Purchasing Power You Wield, the Bigger Your Gains The highest return investments in the financial world always involve leverage. Whether an investor chooses to go with options, stocks, bonds, treasuries, or forex – the biggest winner in any trade will always have the biggest lever. The reason this is true is because investing is a percentage game – the larger your purchasing power, the more income you will produce from the same percentage gain. Multiply your purchasing power, and you multiply the gains (and losses). Consider: Person A with $10000 invests in company A, which gains 10%, producing $1000 profit. Person B [...]