Introduction to currency exchange and trade | AP Macroeconomics | Khan Academy

Introduction to currency exchange and trade | AP Macroeconomics | Khan Academy

- What I wanna do in this video is think about how exchange rates can affect trade, and actually we can even think a little bit about how they might be able to affect each other, although we'll go into a lot more depth in that in future videos. So let's just imagine a situation where the Chinese Yuan, the Chinese Yuan depreciates versus the dollar, depreciates versus the US dollar to be clear, US dollar. To visualize what we're talking about, let's draw the supply and demand, or the exchange market for the Chinese Yuan.

So our horizontal axis would be quantity, quantity of Yuan, and then our vertical axis would be the price of a Yuan in terms of dollars, so dollars per Yuan. And we've seen this before. This right here would be the supply of Yuan, so these would be the people who are holding Yuan but might be willing to exchange them into dollars, and then this would be the demand for Yuan, these are the people who are holding dollars who might be interested in exchanging them for Yuan. There will be some equilibrium exchange rate, let's call that E sub 1, and let's call this, it's an equilibrium quantity per time period, let's say call that Q sub 1. And just to be clear, this is our supply curve for the Yuan, and this is our demand curve for the Yuan.

So a situation where the Chinese Yuan depreciates versus the dollar. There is two ways really that that could happen. One, you could have the demand for the Yuan shift to the left, or you could have the supply of Yuan shift to the right. The demand shifting to the left would mean for some reason people who hold dollars are less interested in getting Yuan, and supply shifting to the right would mean people who hold Yuan are all of a sudden more interested in getting dollars. So let's just do the latter one. So let's say the supply shifts to the right. I just want a scenario where we have the Chinese Yuan depreciating against the US dollar. And so you see very clearly in this world, if our demand does not shift, we get to this next equilibrium exchange rate, E sub 2, and there's also a different equilibrium quantity.

But you can see the Chinese Yuan has depreciated versus the dollar. If E sub 1, maybe E sub 1 is 15 cents per Chinese Yuan, and maybe E sub 2 is 10 cents per Chinese Yuan. But now that we understand and we can visualize what we're talking about, what would be the impact on trade. I'm gonna think about it in two ways. What is going to happen in China, let's think about China first. So in China, or we're gonna be thinking about the Chinese consumers. Well Chinese consumers, they hold Yuan, and they might buy some American goods. What would happen to the cost of those American goods? Well assuming that the American suppliers offer their products in a fixed dollar price, so let's say you are General Motors, an American car company, and there's a car that's manufactured in the United States and it costs $20,000. Well in a world where the Chinese Yuan depreciates versus the dollar, the amount of Yuan to equal 20,000 US dollars has now increased.

You need more Yuan per dollar, because you're in a world where there is fewer dollars per Yuan. So American goods, American goods, more expensive in China, expensive in China. And so what might that do to the behavior, how might people decide to trade off between American and Chinese, let's say in this example, cars. Well if American goods, and in this example, cars become relatively more expensive, then they're likely to buy fewer American cars. So if we're talking about all American products, we could say American, American imports into China, into China, will go down, because they're going to be relatively more expensive. Now what about in the United States, in the United States, what is going to happen.

Well, assuming the Chinese goods are offered by the supplier at a fixed Yuan price, well now you need fewer dollars per Yuan. So Chinese goods, Chinese goods, are going to be less expensive, less expensive, to American buyers, so less expensive in the US, 'cause each dollar is gonna buy more Yuan and assuming that the goods all have a fixed price in Yuan, and so you could say Chinese imports into, imports into the US are going to go up.

And what's interesting is that you might have a little bit of a negative self-correcting feedback loop, because what's likely to happen if American imports into China go down. Well that means that fewer Chinese folks are going to be interested in converting their Yuan into US dollars in order to buy goods, because they're not buying as many American goods, and so that might have the effect of shifting the supply curve back to the left. Similarly, in a world where Chinese imports to the United States go up, well now all of a sudden more Americans will be interested in converting their dollars into Yuan, and so that might shift the demand curve to the right. So that might, either of these could have the effect of maybe helping the Chinese Yuan appreciate a bit. Now in previous videos, we've talked about many factors that could shift the supply or demand curve for a currency to the right or left, but it would be interesting to think about what would be the effects of interest rate changes in each country.

Now we can link it not just to what would happen to the supply and demand curve, but we could think about how that might affect trade. Let's imagine a situation where the US government, government, increases borrowing, and we've talked about this in previous videos. That will likely lead to increased interest rates, 'cause you have a big borrower here, you could even have a crowding out effect because of the increased interest rates, fewer private borrowers in the US might borrow, but this would increase likely, doesn't always, increase interest rates, interest rates, in the US. Now if you have increased rates in the US, what might happen for folks in China. Well they might say hey, we are more interested in holding dollars 'cause we could, in a dollar bank account, all of a sudden we get more interest.

So that could have the effect that we saw earlier, where it could say, hey more Yuan holders are interested in converting into the US dollars, so it would shift the supply of Yuan to the right, which would have the impact of depreciating the Chinese Yuan, which is where we started this video. So you could see something like the US government borrowing, which increases interest rates, could actually have an impact on trade. It could actually make American goods less competitive in China, and Chinese goods more competitive in the United States.

And I just did a scenario where the supply curve shifts to the right, but you could also imagine a situation where government borrowing increasing the interest rate in the United States could even change the demand curve. Remember, the demand curve's gonna be determined by the sentiment from dollar holders, and how much they wanna convert to the Yuan. But if interest rates in the United States go up, well now they might say hey, I might wanna save in the United States as opposed to investing in China or converting my money to Yuan, and saving in Chinese bank accounts.

So I'll leave you there. The big thing to appreciate here is that exchange rates and trade are very linked, and that things like government borrowing can affect interest rates, which can affect exchange rates, which can affect trade. .

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Bond Retirement

Bond Retirement


All right, let's talk about bond retirement. So, we've talked about issuing a bond. And, remember issuing a bond. Credit bonds payable, accrued interest, cash, boom, boom. This is BIC, this is discount or premium. Now, early retirement of bonds. So what this says is, the bond may be called, it may be retired prior to once it matures. In other words, it's a five year bond, but two years in, they call it back. Basically, it's the opposite of the entry we just did. So, as we look through this, it's the opposite of the journal entry. So, in doing this, what are we going to do? When we set it up, we credited bonds payable. So, what do we do? Debit bonds payable. So, we're going to debit out the bonds payable, and that's going to be for the bond payable. So, we're going to debit that out.

Now, if there's any unamortized discount or premium, get rid of it. So, remember, when we had debit discount, credit premium, and boom. Debit premium, credit discount. If there's any unamortized bond issue costs, get rid of those. So, we're going to credit out the BIC. Then, we're going to pay some cash. And they're going to tell us how much cash we pay. They're going to say the bonds were retired at 94. The bonds were retired at 101. Whatever amount of cash you paid, that's what you paid? The difference will either be a debit, or a credit, and that debit or credit will either be a loss or a gain. Now, this is a gain or a loss. Now, the gain or loss years ago used to be extraordinary, extraordinary. Remember, "On The Tide in OC". I like to go surfing where? O-N-T-I-D-E N OC. So, it use to be extraordinary. Because, and I'll define this down the road, if it's unusual, infrequent, material, it's extraordinary. Well, what happened is, companies would buy back their bonds at huge gains when interest rates were fluctuating quite a bit, and they would bury it in the income statements, so they said, let's separate it out and make it extraordinary.

Then, as times changed, it said, well, rates aren't that high. It's not that much. Let's make it as ordinary. Now, they said it could be ordinary from continuing operations. It could be extraordinary. If it's unusual in nature and in frequency of occurrence, they've never done this before, it could be extraordinary. Otherwise, it would be ordinary. So, it's either a part of ON, up at the top, right? And other non-operating. Or it's down there extraordinary net of tax. You'll see here it says, �Its classified part of continuing operations unless it is determined to be both unusual and infrequent, in which case it would be considered an extraordinary item, net of tax.� Now, we haven't learned this yet. You'll see this down the road, but as we are learning, for example, about extraordinary items, we'll learn all those details. So, again, it could be ordinary or extraordinary, as far as the bond retirement.

All right, but again, just remember do the opposite journal entry of when you issued the bonds. Another thing here mentioned, bond syncing fund. Now, what's a bond syncing fund? This is a non-current asset. It's cash that's set aside to pay off the bonds. But it is considered a non-current asset. And it's a non-current asset until the bonds mature, and then we're going to pay off the bonds using that money. It says, �Any interest or dividends earned or added to the syncing fund balance and reported as income.� So, any of those interest or dividends would also go to income as well, as far as the bond syncing fund, okay? In a minute, we'll do some questions.

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Why Countries Dumping US Debt Should Worry You

Why Countries Dumping US Debt Should Worry You

Good morning and thank you for watching U.S. Money Reserve's Market Insights Today we're going to continue to talk about some of the things that we talked about last week and that's going to be US Treasury bonds and an overvalued stock market last week many of experienced in Watts Facebook continue to fall and plummet taking one of the largest stock losses in US history this is exactly what we're talking about is that we have four companies or four corporations that are currently carrying the majority of the value in the US stock market and today on CNBC news it has been identified so that since March Russia has dumped more than 80 percent of the US Treasury bonds they've gone from about 91 billion down to 14 billion in about two and a half to three months remember several months ago China was doing the same thing now China has gone back in and purchased more US Treasury bonds leaving China and Japan being two of the largest holder of US Treasury bonds in the entire world the remaining balance of Treasury bonds which is about 21 trillion which is right at the national debt of the country is sitting at about 21 join the United States and about 6 trillion accumulative sit outside of the United States remember last week as we talked about the four things that could be critical to the US economy and as we've talked for over a year now three key indicators that the Treasury Department issued in 2013 that they felt that could be a catalyst to the recession of the United States or lead into a depression in the United States and I hate using that word but that is the word that they used is is that Treasury bonds would be one of the key elements and catalyst to the US economy number two was interest rates and number three was a decline in the US dollar those three compartments that we've been talking about have continued to be a topic for the last year-and-a-half in these videos and as we continue to do these videos each one of those elements continue to be a piece of the puzzle that continue to be keep coming up and they're becoming more volatile and they're becoming more fluid inside the markets we typically don't see countries like tying to go out and dump about 43 trillion or billion in US Treasury bonds we don't see Russia in a period of time since March till now go out and dump 81% of their entire holdings of US Treasury bonds now some individuals will say this is a financial move or a form of asset management in regards to the economy because Treasury notes are at a high since 2011 or it could because the United States is placing sanctions against Russia or has placing Seng against Russia as they invaded Crimea it could be there's a possibility of that but at the end of the day the trade war the tariffs that are being placed these are fundamental issues that normally would not be in place if the United States economy was not suffering or in a position of being extremely fragile at this moment here in a few weeks the most important and most critical thing that we have to think about is the stock market will be at a point on the longest run in US history never been done in US history if we make it I think since our past August 10th think about that for just a second your money is sitting in an area whether it's a 401k or an IRA or in the stock market and a run that has never lasted this long in US history after about August 10th so think about that for just a moment is that once it reaches past that moment how much more room how much murim is still eligible for your money to continue to grow without some type of major recession or a major correction taking place after that moment the upside is extremely minimal the downside is extremely large and that's what you have to be thinking about if countries around the world have been moving up maneuvering away from the US economy since 2014 and we start seeing a massive sell-off in US Treasury bonds Treasury bonds by major countries it is a telltale sign of some of the things we've talked about you also can't go back several months ago and know that the US economy was running out of money when we met the debt ceiling crisis but we have in an economy that's supposed to be one of the most robust that we've seen in years and we have a stock markets at a record high how can we have a stock market at a record high but on the flip side the US economy is running out of money think about the things we've talked about in these videos or go back to some of the videos that we've talked about in the past we've got tax cuts that were taking place in the beginning of the year we have the repeal of the dodd-frank act or portions of the dodd-frank being rolled back and then you start seeing the terrorists being placed on foreign countries and then you have an accumulation or a combination of countries selling off US Treasury I think this is more about fear and asset management of that fear than it is of them just making general maneuvers in the financial world think about what we talked about as always thank you for watching us money we reserve market insights as always we've got the new flyer which is US economy a house of cards this is the new topic and subject they clear on through your free copy make sure you click on the link or call the phone number below and that'll get you your copy of this and as always thank you for watching us money reserves market insights you


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Recession Concerns I Jonathan Rose I Active Day Trader I Trading Interest Rates

 Recession Concerns I Jonathan Rose I Active Day Trader I Trading Interest Rates

- Hey members, good morning, it's Jonathan. I didn't put out the futures week ahead last night. I got caught up doing kids stuff, did some baseball game, so I wanted to get something out for you early in the morning. I want to start with the video I put out 10 days ago. Listen to the video. Go back and see what you would have done differently. The reason I'm replaying this video is because nothing has changed. We are right. We got this market. We have good feel right now so let's trust it going forward. So watch the video, here's that recording from June 15th. I think there's a darn easy opportunity yesterday if you look at the S&Ps. And again, this market is going to get hurt okay. When I start having an opinion like this and I'll be a little arrogant right now, I'm pretty darn good, okay.

Yesterday's high of the S&P, 2794. The day before, 2796. The day before, 2794. The day before, 2794. The exact same high, maybe not to the tip but with a point or within two points. That is really telling. And now the high of today is going to be 2779, the low of yesterday, 2781, the low of the previous day, 2778 or 79 so it makes sense. Get out of the way right now. We want to take our entire portfolio and make sure that the overall deltas in that portfolio are short. So that mean if we break it down to this simple common denominator, if your long a hundred shares of Microsoft, and your long 10 ten puts in Apple that's in the money, your portfolio is probably going to be short deltas because those 10 puts are going to be equivalent to a thousand shares short Apple and your only long a hundred shares of Microsoft. It doesn't mean cover the Microsoft, that means, if you look at your portfolio as one position in that example, your short deltas. Okay, now that you've had a chance to watch that, notice the confidence, notice the belief, that's having an opinion sticking with that opinion. S&Ps in front of you, I have the nightly session.

We're down to 2695. Let me put it on a daily. Again, the reason for this bearishness is because of the yield curve. The yield curve is flattening, very very concerning. When it's flattened in the past, we got into a recession. (clicking) Now again, just to avoid the emails, it doesn't mean we're going into recession, but as traders what that means is the likelihood of going into recession when the yield curve's flattening is a higher probability than the likelihood of going into recession when the yield curve is steepening, simple as that.

So use that information and protect your darn portfolio. S&Ps, we nailed this right? Now we get down to the 100-period moving average. We're going to gap under there, because even though we're trading here now, the market's low yesterday was 2702 and it looks like we're going to open at 2696, that's going to give us a gap in the daily under the 100-period moving average. Okay, technicians you might look at this as a little head and shoulders, fine, I'd like it a little bit steeper but nevertheless, the new line in the sand, the only number that matters. Trust me on this, we nailed it 10 days ago, let's continue. The only number that matters right now is 2700. That's our line in the sand. Below 2700 we are obnoxiously bearish. We will go and test this 2667, that'll become the new line in the sand.

What's this low? 2675. So this might go up higher, this stays the same, so maybe that'll be like 2772, that we'll get to, but right now the only number that matters is 2700. Above, we'll rally a little bit, below, use that number as resistance. Very, very bearish, continually bearish. Let the market guide you. No reason to speculate on the long side right now. Don't sit there and wait to find bottoms. The market is heavy, we are selling off protector portfolio. As we sell off, the bond market's very, very challenging, right? That's why we want to trade balance.

Here's the ZB, I'm long TLT puts, I'm short ZB futures, they stink. But I'm also short Nasdaq futures, I'm long Intel from the week ahead just like we discussed. The reason we're in that Intel trade. Close to an inverted yield curve, okay. These for a dollar, yesterday they were closing, they were trading at 3.50, today I bet they trade up to $5. Hold on to those trades, don't give up your short exposure. Ask yourself what happens if the market's down 10% today. Well the ZB's going to rally right? The ZB's going to go way up here. If I look at bond futures, it's actually steepening a little bit this week.

So this is crazy, it's steepening, these are too fricking cheap. The BUB right now is wrong, the BUB is too cheap. I know the advanced bottom room, you got your longs and BUBs, I would strongly consider cost averaging and adding some BUBs because these are wrong. The yield curve, the back end of the yield curve is strengthening. This is the difference between 10s and ultrabond. Within this trade, these are the sum, the two parts, right? So the sum of the NAB, plus the BUB equals the NULL.

Bond Bootcamp members, you guys know what I'm talking about. If we really look what this is, it's going to be the difference between seven-year and 30-year rates. So you can just look at the 30-year rate, look at the seven-year rate, 30 minus seven, that's what this is. This is seven-year to 18-year and this 18-year to 30-year. So seven to 18-year, 18-year, 30-year equals seven to 30-year. Look how strong this has gotten. Look how strong seven to 18 is. You're telling me the 18 to 30 is just going to trade in a complete opposite direction because it's Thursday in the summer? No fricking way, not going to happen.

If you buy the BUB right here, your risk is this, turn to, goes down. But that's not what's happening now. If you trade the market for what's happening now, these are wrong. I like getting on the BUB, guys. I like staying long. Volatility, staying long those puts in Intel. Find ways to hedge your portfolio, in case the market continues to go down. Which I suspect it does. We're right here. If you didn't believe me the first time around, and now you're sitting there looking for support, you're going to get yourself into some trouble. Give me the benefit of the doubt guys. We are dead right on this, okay? Any question, support at Active Day Trader.

Trading is about having an opinion and then being able to confidently express that opinion in the market. Once you're in that trade, you got to believe. It's like playing sports. You don't step out on the field until you're ready to play. If you step out on any ball field, not ready to play, or scared, you're going to get hurt. Trading is no different.

Be confident, we have a thesis, stick to the thesis. I'm here for any questions, guys. Jonathan, Active Day Trader. .

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Schwab’s Trading Tools and Platforms

Schwab’s Trading Tools and Platforms

There are trading opportunities just waiting to be found. Schwab’s intuitive technology can help you make sense of the market so you can turn inspiration into action whether you’re trading on our website, platform, or mobile app. Stay up to date with live data and breaking news. Monitor the securities important to you with streaming watch lists and real-time charts. Research opportunities with market insight and analysis from Schwab and independent sources. Know where you stand with account and balance information… And quickly place stock, ETF, and option orders with easy-to-use order tools.

When using our premier trading platform—StreetSmart Edge— you can trade via desktop software or over the web using cloud technology. Its intuitive design allows you to add or modify tools to look the way you want and work the way you think. Create separate layouts for stocks or options. Link tools together, so changing the stock symbol in one linked tool updates the others. Find stocks that meet your criteria with powerful screeners and get strategy ideas and decision support using chart pattern recognition… And act on trading ideas wherever you are with Schwab Mobile apps. Along with powerful trading tools, Schwab Trading Services provides you with the extensive insight, robust educational resources, and personalized service that can help you become a better trader. Make the most of your trading when you open a Schwab Trading Services account today. .


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Top 3 Resources I Use to Find the Absolute BEST Penny Stocks to Trade

Top 3 Resources I Use to Find the Absolute BEST Penny Stocks to Trade

- So, a lot of people ask me how do you find the stocks to trade? What are the best stocks to trade? The stock market is huge, I don't know what to trade. First of all use Stocks to Trade software. This is software that my team and I have spent nearly two million dollars on building. It is the best software in the world for finding the best stocks to trade. Go look at the link just below this video. Utilize it, okay. It is so going to change your life, because that is a tool that basically just aggregates all the different websites that I used to use. If you've seen some of my older DVDs. I used to use like 20 different websites to research, and I pick and choose news and different scans. Stockstotrade.com. Use it, it puts it all into one spot. Now understanding why does all this stuff matter? Guess what? The stock market is not as simple as you want it to be. Just because a company has news, does not mean the stock is gonna go up. Just because a company has no news, does not mean the stock is gonna do nothing.

There's a whole bunch of moving pieces in the stock market, and for me you have to kinda think of it as like a sliding scale. If you've seen my trader checklist guide. This is another great resource. It is over 10 hours talking about how I choose the stock side trade. Click the link below. I'm gonna include two links. Stockstotrade.com and traderchecklist.com. This is a free guide that I made for you. Specifically to show kind of like how everything is a sliding scale. You need to think about what is the price. What is the news? What's the catalyst? What's the pattern? What time of day is it? What's your own schedule? Its not as simple as you want it to be. We're like, oh a company issues good news buy the stock. This is not an exact science. This is more of an art. So you have to kinda put together all these moving pieces. That's why I started out and say, "Use stocks and trade, because it puts "all the moving pieces together." There's actually a feature called Oracle that accumulates all of my different indicators into one signal, and it tells you the best stock to trade.

That would be my pick if you wanted to see what is the absolute best stock to trade right now. Long or short. On top of that we're all different people. I wish that I could tell somebody who's, you know, 50 years old and wants to retire and is very conservative with money because their frankly trying to save up. I wish I could tell that person the same thing as I would tell a 20 year old asshole kid who, you know, has 10 thousand dollars through his name that his parents just gave him. And he has no perspective in money or anything. And he's just some dumb kid. Those are two very different people. They have two very different personalities. So you have to think about what stock is best for you and your personality. If your some young kid who wants to be aggressive with your money, that's cool.

Very different than a 50 year old person who's counting every single last dollar. You have to also think about what is your risk tolerance? How much are you willing to loose on any trade? Sometimes there's a fast moving stock and I don't trade it just because it moves so fast I might not be able to cut loses quick enough. And for me I kinda trade like a coward. I'm kinda like that 50 year old guy. Even though I'm only in my 30s. I'm very scared. I know a lot of gun slingers who are like that hypothetical young dumb kid, and they love gun slinging and it's very exciting.

They buy stocks that are up 200% in the day. You won't see me buy a stock that's up 200% in the day. That's too much. The risk is too great for me. So for me, I like to trade cowardly. That's how I teach. You can choose your own aggression. If its a fast moving stock, that's beautiful. Again, stocks to trade not only has all the different indicators, it also shows the biggest percent gainers. No matter who you are, no matter what you want. I would advise you to always, always, always look at the big percent gainers every single day. Ignore just what companies are saying about some new big technology. If the stock is not moving, I don't care. I wanna trade stocks that are in play. These are the most predictable for stocks that are going up, and for stocks that are coming down. You know, if a stock is up five, six, seven days in a row, and it's a big percent winner every single day. Guess what, it's probably bound to come down too.

So I'm gonna watch it because sometimes I like to short sell stocks. I know some of you guys don't like short selling. You just wanna buy stocks. Well, guess what if a company reports good earnings, and it's like a two year breakout. Again, this is like a technical scan on stocks to trade. Then you might want to buy it on day one or day two of its earnings breakout, and then try to sell it on day three or day four or day five.

Maybe you don't have that much patience. Maybe you just wanna buy that one breakout point when it breaks the morning high in the afternoon, and then sell it 10 or 15 minutes later. You have to choose what you wanna do, and you have to practice. You have to think of yourself as a scientist, and you're basically trying to find the formula that works best for you. Just because a formula works one year, might not work the next year.

So you're gonna have to learn to adapt. The stock market is one giant moving target. Be ready to adapt. Be ready to experiment. Be ready to study your ass off. If you follow these directions you could always be adapting. You could always kinda be ready for a moving target. You don't need to trade everyday. You don't always need to have some investment on the table. Guess what? Cash is the position. Sometimes the best trade is no trade at all.

So I'd like to teach you patience. If you want more millionaire guidance, and how I create my millionaires from scratch. Click the link below. I'm gonna include a third link. You've got Trader Checklist to learn the indicators. You've got Stocks to Trade to use the data, and have software that's gonna change your life. And the third link is gonna be if you wanna apply for my millionaire challenge and actually become my next millionaire student. This is going to be a grind. Its gonna be hard, but the journey is worth while. In the end its fuckin fun.

Hey, Tim Sykes millionaire, mentor and traitor. Thank you for watching my videos. I hope that they help you. I wanna share everything that I've learned over the years. You can check out more videos right over there. Also click subscribe so that you can watch all of these videos, get that knowledge, and become my next millionaire student. .

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Should I follow stock market analyst predictions?

Should I follow stock market analyst predictions? // Stock trading strategies Options basics 101


 welcome to looking at the markets with David Moadel today I'd like to discuss analysts stock analysts should we follow their recommendations and predictions well just a quick observation have you ever noticed how after a earnings miss a really bad earnings miss stock will just stock for a particular company will go down 57 sometimes ten percent and then after that all the analysts or most of the analysts will downgrade the stock or the company they will lower their price targets they'll say that their recommendations are underweight meaning that you know they don't recommend buying that stock they suddenly don't like the company anymore they downgraded and and also have you noticed that after a particularly good earnings report after an earnings beat all all of a sudden the analysts most of them are all of them love the company and they love the stock and they're all bullish and they raised their price targets and they're overweight on that stock meaning they really like it and they recommend buying it or they you know that they say that it'sit's upgrade the upgrade the stock or the company well to me it seems like that's not forward thinking that's just chasing the price action ok the big move has already been made and they're just following there just yet you know if the price goes down five eight ten percent suddenly they're there bearish on it but that's after the fact it doesn't take a lot of predictive ability to be able to say that a stock is trending downward after an earnings Miss or it doesn't take much predictive prowess to be able to say that a stock is your company's doing well after earning speed and the stock already went up ten percent or eight percent 5% whatever so if you're following analysts predictions then you're going to be following people who are chasing the price around and I think you know how that oftentimes ends up when you chase after the price move a lot of times that doesn't end up too well and so I really don't i do not recommend just following analysts predictions because they usually make their predictions after the fact alright and their track record at least according to these sources is not very good and it was not difficult at all for me to find articles discussing how bad analysts predictions are here's a wall street journal article entitled why market forecasts are so bad analysts predictions are frequently less accurate than random guesses that's pretty bad alright and if you want to you know go back and read these articles the web address is right here at the top here's another one barons analysts poor predictions Baron takes the wall street analyst community to task for its poor aggregate performance here's the economist the accuracy of equity research consistently wrong what does that tell you alright here's Bloomberg China's stock analysts were among the world's worst amid surprise route and this is after the this was during a time recently when when the shanghai composite index went down alright and they have a nice graphic here that says not even close forecasts for China's stocks were way off alright so those are just a few examples so do i think that analysts no more than everybody else well read these articles you know you can either you know type in the web address yourself or just google the the title of these articles and a lot of times you can find the article articles that way and I think it's pretty clear that at least to me that if your trading plan is based on following analyst recommendations you know that that's not much of a trading plan personally I i almost think that these analyst recommendations upgrades downgrades and so on are there almost contrarian indicators yeah you can almost go the opposite way and and do pretty well because of their poor performance overall alright so hopefully that's not your trading plan to to just follow what these analysts are doing all right or what they're recommending and if you want to put together a real trading plan one that is geared toward thinking for yourself okay feel free to contact me my name is David Modell and you can contact me at David Modell @ gmail.com whether you've lost money in the markets consistently in your sick and tired of that and you want to do better you want to be more consistent you want to have a plan that that you know is based on what you think makes sense and what the data and the information that's presented to you is telling you to do rather than just following somebody's recommendations to buy this or sell that you contact me please and if you like this video by all means give it a thumbs up on YouTube leave a comment i like i like the comments a lot and you can subscribe to my channel that would be great because then you can get the latest videos that I'm putting out alright so again feel free to contact me anytime and thank you so much



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ROBINHOOD REVIEW 2018 📈 100% Free Stock Trading, Worth It?

ROBINHOOD REVIEW 2018 📈 100% Free Stock Trading, Worth It?


- How's it going today, guys? I hope you're having a fantastic day. So in this video here we're going to be doing an in-depth review of the Robinhood app, and if you guys are curious about different investing platforms out there and you're doing your research, I've linked up down in the description below all the different review videos I have done so far on this channel. So I do encourage you to shop around, look at the different options out there, and really consider the features and benefits of each investing platform and then figuring out which one really best suits your needs. Now Robinhood captures a lot of attention because it is completely free. $0 commission, $0 minimum account balance, so you could literally open up an account, fund it with $10 and start investing in stocks. So there's a lot of appeal to this but what I really want to make sure you guys understand is that it is a very limited platform and that's kind of what we're gonna get into here is the pros and the cons of this platform, why I like this platform, and also why I'm not such a fan of this platform at the same time.

Now like I do with all of my reviews, I do have a pinned comment down below with a timestamp for the different sections so if you guys are looking to skip ahead in this review, that is a pinned comment down below where you can jump ahead to a separate section. First of all let's talk about what Robinhood actually is. Robinhood is a free trading app out there that has really ballooned in popularity.

It allows you to invest in stocks, ETFs, as well as cryptocurrencies and options. Now the cryptocurrency piece is still limited to certain states in the United States, so if you are looking to invest in cryptocurrency through Robinhood, you're going to want to make sure it is currently available in your state. Beyond that, Robinhood is a very basic investment platform. It is a 100% online platform, meaning there are no physical storefront locations. So I'm sure you guys have seen the Charles Schwab or Fidelity locations around where you can go to a branch office or you can call someone up on the phone. With Robinhood it is completely electronic and online and so this right here might be a con for some people, the fact that you can't call someone up on the phone or you can't stop into a branch location to talk to someone but really, the difference here is the fact that you're not paying anything. With the traditional online discount brokers you're paying a fee for commission and they have a minimum account balance that is more or less what Robinhood eliminated but by eliminating that fee structure they are not able to offer the personal attention that you might get through your other brokerage account where you can call someone on the phone or stop into a branch location.

So what can you invest in using the Robinhood app? First of all you can invest in publicly traded stocks or ETFs on the New York Stock Exchange or the Nasdaq so right off the bat that tells you that you cannot invest in penny stocks, you can't invest in foreign stocks unless they trade through ADRs, and you can't invest in stocks on the over-the-counter exchanges. You can also invest in cryptocurrency through the Robinhood app if it's available in your state and currently this includes Bitcoin, Bitcoin Cash, Dogecoin, Ethereum, Ethereum Classic, and Litecoin. Robinhood also now allows you to buy and sell options free of charge. So what this means is that there are no mutual funds available on Robinhood and there are no penny stocks or over-the-counter stocks. Moving on now, what are the fees associated with a Robinhood account, and what are the requirements? Well the only requirements is that you do have to be a US investor, 18 and up, but beyond that, there are no fees associated with Robinhood.

It is completely free, no minimum account balance, and no commission cost for trading. You might be asking yourself, well how does Robinhood make money? What they do is they offer a feature called Robinhood Gold, where you are offered margin, you can buy stocks on margin, and you can also have after hours or extended hours trading and you also have the availability to have instant settlement with your funds rather than waiting for funds settlement when you are selling your position.

Typically you would have to wait for those funds to settle to withdraw them or to reinvest them but Robinhood can offer that instant settlement with their Gold Package. So that is how Robinhood is actually making money. Okay, so what are the pros of this platform? There are pretty much two of them that I see. First of all it's 100% free, which really lowers the barriers to entry to get started with investing. Traditionally if you wanted to open an investing account, it might be a $500 or $1000 minimum balance but with Robinhood, it is $0, you can get started with pretty much nothing. The second pro for them is the fact that it has a very simple interface pretty much anybody can jump on there, get started, and understand what it is they are doing but that in and of itself is also a con because the platform is extremely basic. And for any investor out there that's really doing a lot of research you're gonna be extremely limited by this platform.

So that right there is the first con I see for Robinhood. That platform is extremely basic and I have used Robinhood before. I still have some investments with Robinhood but what I would find is I was doing all of my investment research on other platforms or other websites and I was only using Robinhood to buy and sell my shares and I really, would rather have the ability to do that all in one place where I'm on an app that allows me to do research and learn about investments and then do my transactions as well. Another con for some is the fact that Robinhood does not offer mutual funds so if you are looking to invest in mutual funds you are not going to be able to do that through Robinhood. Now a big con is the fact that they do not offer retirement accounts and this right here is a huge problem in my opinion because you cannot open any type of retirement accounts.

You can't do the self-directed Roth IRA or a traditional IRA through Robinhood and I think a lot of people don't understand the difference here between investing through a retirement account where you can be tax sheltered or investing through a traditional brokerage account where you're paying taxes and you're paying at the maximum rate in some cases. So really educate yourself on investing through retirement accounts if you are a long-term investor especially as a young person and understand the advantage of investing and being able to do so through a retirement account.

Another con is that Robinhood does not offer a DRIP or dividend reinvestment plan. A lot of other brokerage accounts out there allow you to reinvest your dividends automatically and Robinhood does not do this. Another con is also the fact that you can only purchase whole shares of stock on Amazon, so there are no fractional or partial shares available. And one platform that does offer both of these things, they offer a DRIP and they also offer fractional shares is M1 Finance, this is also a completely free platform and I'm gonna link up the review to this as well.

If you guys are on the fence between Robinhood and maybe something else, I would highly recommend taking a look at M1 Finance because in my opinion that is a superior platform and M1 Finance is my favorite investing platform out there for beginners who are not looking to pay for commissions when they are trading. So that review is linked up down in the description below. Another con is that there are no pre-built portfolios with Robinhood, so you can't really go on there and start investing in a portfolio that was built by somebody else. They're putting all of that power in your hands to decide what you're going to be investing in and you also really can't build a portfolio or automate that process at all. You can't automate deposits into your account, you can't automate investments. Really, it's as basic as it gets here with this Robinhood platform, and that is the advantages that some of these other platforms offer out there, it's the fact that you can automate your contributions or automate your investments, or automatically reinvest those dividends that are paid out by the stocks you're investing in.

And then the fourth con is that Robinhood only offers the very basic order types. If you are somebody who's looking for the more complex order types, you're gonna wanna look somewhere else but for the most part these order types are all you would need as a beginner. So moving on who is Robinhood for and who is it not for? Robinhood is a good platform for beginners who are looking for a very basic investment platform but like I said, I would recommend doing your due diligence looking around at a couple of different platforms, particularly M1 finance.

Who is Robinhood not for? It is really not good for the research-oriented investor. If you're looking for candlestick charts, if you're looking for more information about companies, if you're looking to do fundamental analysis, you really can't do any of that here with the Robinhood app. You're going to have to do that on different platforms and you're probably going to be disappointed with that very basic platform. But understand that is what Robinhood was built for, it was meant to be the most basic and simple investing platform out there.

So I'm really not saying it's a bad platform, it was just built to be very basic for beginners and if you're a little bit more advanced as far as investing goes, then you're probably not going to be happy with Robinhood. But anyways guys, that's gonna wrap up this video, that is my opinion of Robinhood app. Let me know what you think down in the comment section below. But thank you so much for watching this video and I will see you in the next one. If you are interested in learning more about investing in the stock market, I've created a free course just for you. The link is in the description below. Here are a few other videos you might enjoy as well. (groovy music) .

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Top 3 Investing Accounts For 2018! 💸 (STOCK BROKERS FOR BEGINNERS)

Top 3 Investing Accounts For 2018! 💸 (STOCK BROKERS FOR BEGINNERS)

- How's it going today, guys? I hope you're having a fantastic day. In this video here, we're gonna be talking about the best investing accounts to open in 2018. If you're somebody who's looking to start investing, but you don't really know where to start and you're looking at the different options out there, this video should give you a good idea as far as what investing account is going to make the most sense for you. I'm gonna be listing out my top three picks for investing accounts available out there right now for a complete beginner to get started with. Now, the one thing I do want to stress is this. If you are thinking about investing and you're on the fence, start taking action. With a lot of these accounts, you can open an account with as little as zero dollars in some cases.

It's not gonna be a lot of money to get started, but if you put this off for another six months or a year, you're gonna look back and wish you started today. If you are thinking about investing, I highly encourage you to take action and get started today. Maybe one of these accounts will make sense for you. If not, continue to do your research and find an investing account that's gonna offer to you what it is that you are looking for. Now, first of all, I am doing my weekly stock radar giveaway. Again, that is my weekly stock analysis membership site.

It's gonna be closed up until August 1st and then it will be back open for enrollment. This week's winner is Zach E. Pointer. He sent me a message on my Facebook page that said hashtag, stock radar, and so I selected you as the winner for my stock radar weekly giveaway. You get a lifetime membership to my private investing membership site. Congratulations, Zach E. we'll see you over there.

Now, I do have a link to all these investing accounts down in the description below. Some of these are affiliate links, but you do not have to use them, however, if you do, understand it's helping support my channel and my work, and allows me to make videos like this that help people when it comes to investing. The first account I want to recommend is for somebody who's looking for a very passive approach to investing.

You don't want to think about it, you don't wanna worry about it, you wanna automate the entire process and just know that every single month or maybe every single week you have money going into some kind of investing account. My recommendation is going to be betterment. First of all, let's go ahead and talk about the requirements for opening a betterment account. The account minimum is absolutely nothing. You can open an account with zero dollars and they charge a 0.25% expense ratio for betterment digital or if you're looking for more guidance and you have at least $100,000. If you have a $100,000 balance with betterment and you are paying a 0.4% expense ratio, you'll get access to betterment premium which will give you unlimited phone access to a financial advisor. If you're somebody out there who's looking for guidance when it comes to your investments or you just want somebody that you would be able to call and ask questions to, betterment premium might be a good option for you.

However, I'm assuming most people watching this video, especially young people, do not have $100,000 to invest. If that is the case, you will fall under betterment digital and just pay that 0.25% expense ratio. What exactly is betterment? Betterment is what you call a Robo-advisor. When you create an account with betterment, you're going to be doing a risk tolerance assessment where they're gonna ask you questions about whether you are comfortable with risk or if risk is scary to you. Based on that, they're going to determine an asset allocation. They're also gonna look at your goals and your objectives. Betterment is really good for people who are goal-oriented or objective-oriented. Let's say, for example, you're 25 years old and you want to be investing for your retirement by age 65.

You open a retirement account with betterment and you say I wanna have $500,000 in my retirement account by the time I'm 65. Well, you can put those goals and objectives in there and betterment will tailor a portfolio for you. The main thing that I like about betterment is the fact that they do automated rebalancing and that is something that a lot of people forget about, especially passive investors. What that means is at least once a year, and if not twice a year, you should be going into your investing account and making sure that all these assets are carrying the correct weight in your portfolio, because they are going to be moving in different directions at different times. At some point, you may be up on a particular asset, but down in another. Let's say, for example, you wanted to have 25% of your portfolio in international stocks and 75% in domestic. Well, you could check back a year later and find that you're 30, 70 or 35, 65 and you'd want to rebalance and get those levels back to normal, but a lot of people fail to do this and they miss out on having a balanced portfolio.

They end up being overweight in certain areas because they're forgetful. If you are somebody who's going to likely be forgetful, you're gonna want to take advantage of a service that's going to offer rebalancing for you, and betterment is going to automate that rebalancing and keep your portfolio at the correct weight based on your risk tolerance and your investment objectives. Now, if you are somebody who's looking to invest in individual stocks, betterment is not gonna be for you because you cannot buy individual stocks through betterment. You're gonna be investing in low-fee ETFs or exchange-traded funds and betterment is going to build an asset pool for you based on your goals and based on your risk tolerance.

It is for the most passive investors out there and you can automate contributions every single week or every single month so you know that your money is going into your investing account and you have to do absolutely nothing. Betterment is for the most passive investors out there. Now, the second account I would recommend is for people who want to be picking some individual stocks. Maybe you do want to be investing in some ETFs to form a foundation of your portfolio, but you also want to be more active with your investments and invest in some individual stocks. Now, traditionally I would have recommended Robinhood here, but I've recently learned about a new investing account out there called M1 Finance. Having looked into this investing account myself, I feel this is a much more superior product than what Robinhood has to offer. The only difference between these two accounts is that Robinhood has a zero dollar minimum account balance while M1 Finance has a $100 minimum account balance or $500 for retirement accounts. Most of us have at least $100 to get started with investing, otherwise I would just wait and save up some more money.

The general rule of thumb that I have is about $500 to $1,000 is a good amount to fund your account with and get started just so you have enough to have some skin in the game here. M1 Finance has some very interesting perks or features that they offer that go above and beyond what Robinhood has to offer. I think we are all familiar with Robinhood at this point. They offer commission-free trading with no minimum account balance, and so it's completely free investing, completely free trading for people in the United States.

The one thing I will mention is all of these brokerage accounts are U.S. only. I do apologize, I know a lot of people are interested in European brokerages. That's an area that I do not know a single thing about, but if I get enough requests for that, maybe I can do some research and do a video like this for non-U.S. investors. The main thing here that they're offering is automated investing. What you can do with M1 Finance is build out your portfolio and design your portfolio and say, okay, I wanna put 20% of my money into Alibaba stock and I wanna put 50% into VOO, the Vanguard 500 fund, and then maybe you wanna put some more money into some kind of international fund or you have another individual stock you want to own. Well, with M1 Finance you can design your portfolio, setup your portfolio how you want it, and setup those pieces of that pie. Then, it's going to automatically be investing in what is underweight in your portfolio.

What M1 Finance does is automate that whole process of rebalancing your portfolio so all you're gonna be doing is adding money to M1 Finance and when you do that, they're going to be buying what is underweight and what you need to load up on. If you are redeeming or pulling money out of your M1 Finance account, they're gonna start by pulling money out of what you're overweight in. They're automatically going to be buying low and selling high for you on your behalf, and that's gonna take care of that whole rebalancing aspect that, like I said, a lot of investors fail to do. If that's not good enough, there is still one big feature that M1 Finance offers that we haven't talked about yet and that is fractional shares. There are a lot of shares out there or stocks that trade at massively high prices per share. For example, Amazon stock is over $1,700 per share and we know Berkshire Hathaway is over $280,000 per share. I don't know about you guys, but I don't have a quarter of a million dollars to put into one share of Berkshire Hathaway stock.

If you're trying to invest in these stocks through an account like Robinhood, you have to buy a single share of that stock and you'd have to have $1,700 or so to buy a share of Amazon, but with M1 Finance you can buy fractional shares of a stock and you can buy a $10 position in Amazon stock or a small position in Berkshire Hathaway. You don't have to have all this money to buy a whole share of these stocks that are trading at such a high price. With M1 Finance, you can buy fractional shares of some of the these very high-priced stocks that have not split up into smaller pieces. That is another key advantage I see to M1 Finance and for those two reasons, that is why I prefer M1 Finance to Robinhood for a beginner.

It's going to allow you to set up your portfolio the way you want it, automate your contributions, and the other thing I like about M1 Finance is it takes the human error out of the equation, whereas you're going to be automatically re-buying shares of what is low. While most people would be afraid to do that, it's going to do that automatically on your behalf. That is another big plus I have for M1 Finance is it takes that human error out of the equation, because you set up your ideal portfolio and then you just automate the entire process. For people looking to have a more active approach to investing, you're looking to invest in some ETFs and also individual stocks, and you're not looking to pay commission to a broker, M1 Finance is going to be my number one pick.

Then, my third favorite investing account for 2018 has nothing to do with the stock market and the reason that I included this is because a lot of people should consider diversifying their assets. A lot of people out there are only invested in stocks and they don't have any bonds, and they don't own any real estate, and you really have to be investing in different assets because they're going to move in different ways at different times. I'm looking at investing in real estate. I'm actually looking at investing in some physical real estate, but I've also started investing in a platform called Fundrise that allows you to be investing in real estate and kind of take advantage of those private real estate investment opportunities that are not traditionally available to the general public.

The only way that people can invest in real estate in a stock market-like form is by investing in a real estate investment trust and that's gonna be a pool or collection of different commercial real estate. It's gonna be managed and you're gonna be earning dividends on that REIT, but the main problem with that is because it trades on the major stock exchanges, it's going to correlate very closely with the stock market. What you would look to do is invest in real estate that has nothing to do with the stock market. It's not trading on a stock exchange. Now, traditionally this was reserved for the very high-ticket investors who had hundreds of thousands if not millions of dollars to invest in real estate projects, but basically what Fundrise has done is allowed investors to pool their money together and invest in real estate projects with as little as $500.

I just got started with Fundrise. I put $1,000 in the account. I'm gonna see how it goes and I'm gonna plan on building up a good chunk of money in my Fundrise account just because it's an asset that is completely different than stocks and it's not going to be as correlated to the stock market because it doesn't trade on the stock exchange. Fundrise offers you what is called an eREIT. It's a little bit different than a real estate investment trust and I'm gonna do a whole video talking about Fundrise and going into more detail about this, but understand that with an eREIT they're basically cutting out the middle man entirely and they're able to offer this product with less fees and expenses.

Like I said, I'm gonna go into more depth about this in a different video, but let's go ahead and take a look at the returns from Fundrise so far. The one thing I do have to say is that while these numbers are very high and they are very exciting, we only have four years of operating history here. We can't go by that and assume that all the future returns for the years going forward are going to be like this. We certainly hope they are, but with only four years of operating history, they don't have a seriously long track record to go off of. Do understand that these returns, of course, are never guaranteed and they certainly do not have as long of an operating history as some of these real estate investment trusts out there. The returns from Fundrise so far have been excellent. In 2014, the average annualized return was a 12.25%, 12.42% in 2015, 8.76% in 2016, and 11.44% in 2017.

These are very good returns. Typically we see an eight to 10% return from the stock market, so based on these four years, they're a little bit higher than the returns you typically see from the stock market. Now, again, that's not why I'm investing in Fundrise. I'm investing in Fundrise to diversify assets and to have more exposure to real estate in a way that is not directly correlated with the stock market. But anyways, guys, that's gonna wrap up this video. I hope you enjoyed it. If you want me to do a more in-depth review or overview of some of these investment accounts, drop me a comment down below and like I said, all of these investment accounts are linked up down in the description below. Thank you guys so much for watching this video and I will see you in the next one. If you are interested in learning more about investing in the stock market, I've created a free course just for you.

The link is in the description below. Here are a few of the videos you might enjoy as well. (upbeat music) .

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