Investing Archives — Page 2 of 20

3 Mistakes To Avoid When Investing In Cryptocurrency

May 4, 2022 By Susan Paige Leave a Comment

Cryptocurrency trading is steadily growing and attracting many investors as of late. This is largely because of some people’s massive profits from the venture. In truth, a person who invested in crypto in its early stages may now be enjoying good returns.

The price of various cryptocurrencies, especially those considered valuable like Bitcoin (BTC), Ethereum (ETH), and others, keeps increasing over time. Hence, many people are putting their money into such virtual currencies out of fear of missing out on huge returns. Before doing so as well, it’s good first to understand that this is an investment that needs one to be quite careful. Many people might have gained significant profits from this venture, but some have also lost a lot of money.

In this article, you’ll learn about three mistakes some investors make that cost them dearly. They’re errors you should avoid for you to succeed in cryptocurrency trading. These are: [Read more…]

Understanding AMC: Practical Solutions To Help You Get Ready for Investing

March 22, 2021 By Justin Weinger Leave a Comment

If the madness with Gamestop and AMC stocks has you interested in investing your money in the stock market, you’re not alone. But the movement Redditors were able to garner isn’t the status quo for the average investor, so it’s not something you’ll find on a regular basis.

However, just because you missed the AMC movement doesn’t mean you shouldn’t dabble in the stock market. It just means you’ll have to grow your earnings over a more extended period. But before you decide to grow your money by investing, you should first understand what happened with the AMC Entertainment stock.

What Happened With AMC?

A large number of investors bet that the AMC stock would decrease in value, but a group of day traders collaborated to buy large amounts of the stock, which caused the price to increase. If the day traders didn’t sell the stock and bring down the price, the investors who bet the AMC stock price would decrease were going to lose large amounts of money on the deal.

The day traders who shorted their shares, or bet on a decrease, then had to buy their shares back at some point. And because the stock price was high, it forced them to pay a premium on the stock, which was good news for the other investors but bad news for them. Hedge funds lost a lot of money when it happened.

How It Changes Investing

Although large investors frequently manipulate the market in this way, keeping smaller investor gains to a minimum, this move by the day traders may have leveled the playing field to an extent. If everyone can coordinate, choose a target, and manipulate the market, significant leaps in stock values can occur at any time. The impact on the stock market’s future is unknown because these particular moves by this level of investors aren’t a usual occurrence.

For now, since the little guy can make big impacts in the stock market, it might be time to dip your toe in the pool to see what you can do. But before you can invest your money, you have to find the extra cash to grow.

Get Your Finances Ready to Jump In

With the coronavirus still bearing down on the United States and unemployment at all-time highs, finding extra money in your budget to invest in the stock market might seem impossible. And while it’s true that increasing your income at this point might be a challenge, you can at least go through your expenses to see if you can reduce or eliminate some of them to free up cash.

If you hold credit card debt, that’s the perfect place to start cutting, and you can do so by using debt consolidation. The right financial agency can look at your eligible debt and roll those balances into a single loan with one monthly payment. Having only one bill instead of many for your debts can give you the flexibility to use the extra money for investing.

Take Out A Loan

The stock market is constantly changing. One minute a stock is worth pennies and the next its value increases exponentially. If there’s an investment you can’t afford to pass up on, you could use bad credit loans to get started. These are short-term loans for borrowers with poor credit histories. You can receive a deposit of up to $2,000 to invest in stocks. Just ensure that you borrow responsibly and repay the loan in a timely fashion to avoid financial consequences down the road.

Beware of the Risks

Once you decide to invest in stocks, keep in mind that doing so doesn’t come without risk. It’s essential to do your research before jumping into a stock, and if you don’t know what you’re doing, you should seek out a professional. The last thing you want to do is lose the money you invest, so a financial advisor can help you diversify your portfolio and tailor your choices to your goals.

Grow Your Holdings

Taking the free cash in your budget and putting it to work in the stock market is exciting, but don’t get caught up in the AMC hype because that’s not always going to happen. Instead, invest in companies you believe in, take advice from the pros, and minimize your risk as much as possible when you are starting out. That way, you can have fun and grow without adding unnecessary risk to your bottom line.

Are Insurance Companies Just Big Ponzi Schemes?

October 12, 2020 By MelissaB 14 Comments

It struck me the other night, as I was reading a book and came upon a section on Ponzi schemes, that insurance companies are borderline Ponzi’s themselves.

What Is a Ponzi Scheme?

The definition of a Ponzi scheme is when the broker/banker/agent takes money and promises an unusually high return and then pays said return from the incoming money from other investors. Eventually, when the incoming investors dry up, the agent can no longer pay the returns and the scheme comes crashing down.

Ponzi schemes are named after Charles Ponzi, an Italian immigrant who was the original Ponzi schemer. In recent years, the most famous (and longest lasting) Ponzi scheme is attributed to Bernie Madoff. Madoff’s Ponzi scheme is thought to have begun in the late 1980s or early 1990s and didn’t end until 2008 when he was arrested. This Ponzi scheme cheated nearly 5,000 customers out of $60+ billion dollars.

Insurance Companies Are Set Up Like Ponzi Schemes

Now, let’s look at insurance companies. We, as the insured, pay the insurance company our premiums in return for insurance against some sort of event.

With health insurance it’s against some sort of health event. With car insurance, it’s against some sort of accident.

In any case, it’s a payment. Or a return on the premium. Very seldom will you actually come out with your entire investment. And, unfortunately, you often have to fight for the payment. Health care coverage may be denied if the health insurance company doesn’t find the treatment worthy of the expense or if they deem it experimental. Likewise, if you file a home insurance claim too many times, the insurance company can choose to drop you as a customer.

For the most part, insurance companies are in charge and decide when to cut customers. But what would happen if the premium payers dried up? It would certainly get more difficult for the insurance companies to pay any claims.

How Insurance Companies Are Different from Ponzi Schemes

Where the key difference lies is that if you stop paying your premiums, the insurance company stops paying any claims for you. Also, as a premium payer, you never really expect your money back unless you have a claim. You’re paying for the “in case”–if it were to happen.

In a Ponzi, you’re investing your money specifically for the return. You’re not going to stop investing as long as the returns are stable. And a Ponzi only really dies when the new investors stop coming. If new insured stopped coming to the insurance company, they would still have their current insured to collect premiums from. However, as the years go on with no new insured clients and the current clients age, the insurance company could have difficulty paying claims.

Final Thoughts

Even though insurance companies seem to fit many of the criteria for a Ponzi scheme, no. insurance companies are not Ponzi Schemes. But, it sure feels that way sometimes.

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MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.