Win Big With Momentum Stocks!

One such venture is via momentum stocks. But there are some ventures, however, that can still prove to be very safe in terms on return on investment. When you see past disasters (such as the Great Depression), you may hesitate before putting your faith and money into the economy. The stock market is generally seen as a very risky investment.

The basic idea is to buy stocks that have had high returns over three to twelve months, and sell those that don't perform so well. Theory of Momentum Stocks: Momentum stocks are generally regarded as safe investments- since trading is based on past performances of a certain stock or security.

Some of these investments can be explained via seasonal activity. If a stock plummets at the end of the year, investors like to sell them for tax reasons. This means that buyers will enjoy a deflated cost, which is sure to rise again in the coming months under normal circumstances.

Some critics say that the risk to momentum stocks is actually high compared to some other more docile forms of investment. In some respects, critics may be right. But under a watchful eye, momentum stocks are generally fairly stable if proper research has been done. One thing critics do note is that returns on momentum stocks are higher than other investment options- making even high risk situations possibly worth a gamble.

Rewriting the Norms in Stock Market Trading: The most common theoretical practice in stock market trading is to buy low and sell high. This will ensure that costs are minimal, while profits are at their maximum. This is true, but there is still reason to believe that this commonly held belief isn't as widely renown as previously thought.

Momentum investors believe that buying high and selling higher is a better idea. Although this takes more resources, generally the payoff is almost guaranteed. There are lesser short term payouts to be had in this instance, so beginning investors usually shy away from this practice.

One key ingredient to exploiting the buy high and sell higher theory deals with psychology and sociology. Since most investors stick to the buy low sell high principle, there are far more investors that pool their resources into smaller companies. This makes the powerful conglomerates and corporations much more stable as a result, since there is less trading being conducted. Where there are lesser trades, there is more stability in general.

Lastly, understanding how conglomerates work will empower many buy high, sell higher enthusiasts to make a nice chunk of money. Since conglomerates commonly take other companies over as time progresses, their stocks increase exponentially as this occurs. Investing in a conglomerate, therefore, is generally accepted as a stable investment- albeit there are exceptions. While there is less return on investment in some cases, those who can afford to purchase a large number of stocks will enjoy momentum trading.

Final Thoughts on Momentum Trading

Be sure to give the poorly performing companies the cold shoulder- they won't conform to the momentum trading policy that present day momentum traders hold. Track a few companies to see how they perform over a few months time, and invest in the ones that show promising results. On the contrary- it is a very stable stock trading practice if the proper research is done.

Momentum trading isn't always as risky as the critics will tell you.

Where Does Money Come From?

Get ready for a shock if you don???t already know.

What if they add too much or too little to the economy? And how do they know how much to ???print???? Who is it?

If not, why not? Is it the government? And on what basis? Who creates money?

Who puts it there? How does it get into ???circulation???? Why do we need money? Every day countless millions of transactions are facilitated with money.

Three chapters of my book How to Profit from the Coming Great Depression are devoted to these questions. Most people are shocked when they first learn about our ???fractional reserve??? money system, which has sewn within it the seeds of its own destruction.

First of all, we need money because the barter system is too unwieldy. If you are a building contractor and I am a potato farmer, and I want you to build me a house, how am I going to pay you? How many potatoes can you and your family eat before they go rotten?

Clearly we need something that represents both houses and potatoes. But note that that does not make money a resource in itself. It is merely a vehicle for transferring the value of resources from one person to another. There are natural resources, both under the ground and above it, and there are human resources ??? labor and intellect. Put these together and man can produce. But although money may be used to value and transfer these resources, money is not a resource itself. Those who control money really want the resources that money represents.

Centuries ago things like gold and silver were used as money, before we had notes and coins like today. Remember the old western movies where highwaymen would hold up the stage coach and people would have to hand over all their valuables? Why, on earth, would people carry their gold and silver with them? Because they had nowhere else to put it.

This created an opening for the goldsmiths, who were the forerunners to our modern day bankers. They built large, secure vaults and allowed people to deposit their precious metals in these safes. In return they gave people ???receipts??? confirming the amount of gold held on their behalf. In time people began trading with the receipts rather than the gold. Today these receipts are called banknotes.

But that???s not all the goldsmiths did. They even paid interest to those who had deposited gold in their vaults (e.g. 3%), but then lent the gold out to others (in the form of more receipts) at say 6%. That???s how they covered their costs.

In time the goldsmiths noticed that nobody ever came back to collect their gold, and not all being honest, began to lend out more in new ???receipts??? than was represented by the gold in their vaults. In time there was ten times as much ???money??? in circulation as there was gold in the vaults.

That???s exactly how our money system operates today. For every dollar you deposit in a bank, the bank lends out about ten dollars. Money is created by banks ??? out of thin air! All money comes into existence by way of a bank loan. Less than 5% of it is ever converted to notes and coins. Most of it is never anything but a balance on a computer at the bank.

A hundred questions come to your mind. Right? They are all answered in my book.

Why do I say the system has sewn within it the seeds of its own destruction? It has a use-by date. That is why we have an economic depression at least once each century. It is not a question of if the system implodes. Only when it implodes.

Let???s say you borrow $100,000 from the bank (which takes security over your real estate worth $150,000). But you have to pay back $110,000 with interest added.

Where does that other $10,000 come from? You will have to get it from someone else. Where will they get it? What???s the only way money comes into existence? They will have to borrow it from a bank.

Can you see now why we have a debt bubble and why there is no solution to it other than a massive purging, with all of So debt must rise exponentially. The only way it can be replaced is with more borrowed money. And as money is sucked out of the system in interest by the banks, money supply is reduced. Some have to go bankrupt.

Can you see how in our debt money system it is not possible for everyone to pay their debts? So debt must rise exponentially. The only way it can be replaced is with more borrowed money. And as money is sucked out of the system in interest by the banks, money supply is reduced. Some have to go bankrupt.

Can you see how in our debt money system it is not possible for everyone to pay their debts? So debt must rise exponentially. The only way it can be replaced is with more borrowed money. And as money is sucked out of the system in interest by the banks, money supply is reduced. Some have to go bankrupt.

Can you see how in our debt money system it is not possible for everyone to pay their debts?

How can you protect yourself from these consequences?