Liquidity problem still prevails

Financial Markets are still facing liquidity problem. The U.S. Federal Reserve is trying it's best to maintain confidence among investors by cutting interest rates on the borrowing loans given to banks. Due to interest rate cuts government securities have risen giving a safe investment option compared to the volatile equity markets. Rising bonds have still not brought any respite to the weakening dollar, which has weakened against the euro, the yen and the pound. The fall in dollar price has effected the commodities too, at one time these were traded to hedge against equity risk but now the commodities cannot go any higher as a correction was going to happen and now it has. Oil and Gold are overvalued and they are bound to go down. Not a good time to buy gold. The Federal Reserve needs to come up with a very good plan to bring some confidence back into the markets. But one thing is sure that this credit loss crisis is far from getting over, it will continue in the next year too, unless there is a miracle.

Indices rise on Fed. cut news

Markets in the U.S., Europe and Asia rose yesterday,18th March 2008, after news was going round that the Federal Reserve will cut the interest rates further on direct loans offered to banks. The markets witnessed a very good trading day showing an increase between 3 percent to 4 percent in the markets overall, showing some amount of confidence generated among the investors. Apart from this there were still concerns among investors that the credit loss crisis faced by banks is going to widen even more, discouraging people from taking home loans. The Manufacturing also slowed down a lot, effecting the industry and it's earnings. At one end the Federal Reserve is figthing hard to retain investor confidence by cutting interest rates and on the other end investors are loosing hope of any recovery in the credit loss situation, creating more liquidity problems in the market, which is lowering the dollar rate against the Euro, the Pound and the Yen, putting the pressure back on the Federal Reserve to come up with a concrete, effective and a permanent solution to the economic slowdown. It is very likely that the Federal Reserve may not be able to bail out all the banks during this year, it is very likely that this situation is going to continue in the next year also.

Markets on a roller coaster ride

The markets yesterday saw both an upward and a downward turn. The european markets saw a very late rise in stocks after a rebound in the U.S. market shares.I feel that the markets are going to start at a higher rate and so a bullish ( market may rise) market is expected though if other experts are to be beleived the markets are going to take a bearish (market may fall) turn.The markets in the U.S. saw an upward trend with the commodities like gold and oil spurring into demand and overshadowing the losses in the techonology and financial shares.The U.S. and Europen success story was however not repeated on the Asian front. The mood all over the asian markets was that higher oil prices and expectations of them rising further will cause the rise in fuel costs eroding the profits. This was also evident in the indian market which lost aorund 900 points due to this piece of news even after a good budget 2008 given by the Finance Minister of India Mr. P. Chidambaram.I say markets will continue to be volatile, hold on to your stocks do not sell them, market may see some correction.

Top 10 Trading tips in Finance for Newbies:

1. First and foremost tip is to keep aside a portion of your extra money if you decide to start trading, do not take out the amount from your savings ,for the simple
reason that in case you loose you cannot retreive the lost amount.

2.Research and research on the best stocks if you are interested to trade in stocks of companies you could trade on, look at their Payout ratio, Past peformances by
looking at their Profit and Loss and Balance Sheet statements( this informaton can be gathered from Financial Times Company Statements service or request this information from the company website directly).Also it is safer to put money on Small-capital and
Mid-capital companies rather than on Large-capital companies.

3. Now the trend is to trade online , so look for good websites who teach newbies like you about what and how to trade. There are sites who are dedicated to only teach and some who not only allow users to try out their site for free but also teach them through their learning centre.

4. Become active on different forums and blogs where investors communicate with each daily, this will not only keep you updated with the latest financial news but also
you will make new and long lasting business contacts.

5. If you do not want to risk on stocks , then opt for a website which deals with indicies or commodities or currencies as a whole or intra-day trading or index or stock trading, for example if you comfortable to
trade on forex look for such sites.

6. Always keep in mind to look for new and innovative methods to trade online, do not miss an oportunity to try out something new (as long as they offer service that is).

7. Make sure you cash in any profits made while trading,just in case the website vanishes with your profits ( this happens rarely but it is better to be cautious from the start).

8. Follow your trades everyday since markets are unpredictable and you never know a when a winning trade is turning around into a horrifying one.

9. The other important aspect is to use your profits made in investing into other avenues of investment like real estate, this ensures that your money is put to use somewhere and not used to trade only. This way you will have a varied personal portfolio, distributing the risk and maximising the profits in an effeciant manner.

10. Lastly, keep in mind that income generated from trading is taxable income,check the income tax rules of your country to be able to understand the way your
income will be taxed.