Money Bulldog http://moneybulldog.co.uk Personal Finance One Bite at a Time Sat, 22 Jul 2017 21:40:39 +0000 en-US hourly 1 The risk resistance of Stocks and Shares ISAs http://moneybulldog.co.uk/the-risk-resistance-of-stocks-and-shares-isas/ http://moneybulldog.co.uk/the-risk-resistance-of-stocks-and-shares-isas/#comments Fri, 21 Jul 2017 16:11:02 +0000 http://moneybulldog.co.uk/?p=17088 Why is it that more people don’t decide to put their money into stocks and shares ISAs? The fact of the matter is that most people tend to opt for cash ISAs, despite that fact that the interest rates they offer are woefully low. Balancing interest rates against inflation A lot of potential investors are

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Why is it that more people don’t decide to put their money into stocks and shares ISAs? The fact of the matter is that most people tend to opt for cash ISAs, despite that fact that the interest rates they offer are woefully low.

Balancing interest rates against inflation

A lot of potential investors are afraid to invest their money in stocks and shares ISAs because they fear they will make a loss. What they usually forget about though, is inflation; especially now, post-Brexit. The figures just published for June show that inflation has fallen back from 2.9% in May, to 2.6%. It is believed to be only a temporary respite that comes about on the back of a drop in fuel prices.

However, 2.6% (a figure which is almost certainly bound to begin climbing again) is still significantly higher than the best interest rates you can expect on Cash ISAs. Easy-access Cash ISAs offer around 1% interest, while fixed-term ISAs offer around 1.95%. In real money terms, money languishing in Cash ISAs is losing value by 1.6%, or 0.65%; and as inflation goes back on the rise (the 2.9% is the highest rate for 4-years), the loss will get larger.

The truth about the volatility of stocks and shares

Is the stock and shares marketplace really volatile? The answer to this question is yes, but it is only volatile sometimes. Looked at in the short-term, the prices of stocks and shares fluctuate (sometimes wildly) on a daily basis. However, when you look at movements over a longer period, this volatility evens out. What this means for people who are prepared to invest their money over a longer period of time, is that the volatility decreases and good growth rates usually prevail.

If you take a look at what happened in the crash of 2008, although a lot of people lost a lot of sleep over their losses, by the end of 2009, share prices began recovering.  Now, some eight years later, the USA’s SP-500 is up 200% and the UK’s FTSE-100 has grown in a similar way.

There is always a risk in investing. Share prices fall as well as rise which is why IFAs usually recommend a minimum investment period of 5-years – to allow any volatility to smooth out.

The advantages of diversification

You can make investing in stocks and shares less risky through diversification. Stocks and shares cover all sorts of different industries and commodities. Some rise in value while others fall. By “hedging your best” and having an investment portfolio that covers a variety of industries and/or commodities, you can build in stability and growth potential. Then there are stable products such as ETFs (Exchange Traded Funds).

ETFs are not stocks and shares, but they are a product that is linked to the performance of an index or a bank or pool of investments, so they have in-built diversity. Like stocks and shares they are listed on the stock exchange. Unlike stocks and shares, whose prices are updated daily, ETF prices are updated every 10 minutes, which means you or your IFA can change your trading position almost immediately.

EFTs offer in-built diversity

ETFs are relatively new, but they are catching on fast. Not only do they offer in-built diversity, which can be tailored to meet individual requirements; they also have low investment levels and are cheaper to manage. Last but not least, because they are quoted on the stock exchange, you can have full transparency of your portfolio.

As far as a “stocks and shares” ISA goes (using the title loosely), If your portfolio consists of ETFs, many consider it to be a more secure platform.

Stocks and shares ISAs have performed above expectations

Stocks and shares ISAs have performed above expectations in recent years; in fact in the last 12 months, the average AER is 15.8% – way above Cash ISA AERs, or the interest from ordinary savings accounts. If like most people, you know little or nothing about investing, your best bet is to find an FCA approved independent financial advisor who can set something up for you based on your appetite for risk and your personal situation.

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Best practice for tracking spending for efficient budgeting http://moneybulldog.co.uk/best-practice-for-tracking-spending-for-efficient-budgeting/ http://moneybulldog.co.uk/best-practice-for-tracking-spending-for-efficient-budgeting/#comments Thu, 13 Jul 2017 11:32:47 +0000 http://moneybulldog.co.uk/?p=17048 Good budgeting is crucially important, whether you are creating a budget for your own personal finances or managing the financial affairs of a whole business. Recent statistics from the UK government demonstrate that average weekly spending in households is £528.90. Whether you have more or less money to play with than this, good budgeting skills will enable

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Good budgeting is crucially important, whether you are creating a budget for your own personal finances or managing the financial affairs of a whole business. Recent statistics from the UK government demonstrate that average weekly spending in households is £528.90. Whether you have more or less money to play with than this, good budgeting skills will enable you to pay all of your bills and to make the most of the cash that you have spare.

Store all of your budgeting information in a safe place                                    

There is nothing worse than deciding to fill out your tax return and realising that you have left most of these items scattered around the house, with many of them irrevocably lost. Ring binders are perfect for keeping receipts, invoices, tax forms and other financial information safe and sound. Get into the habit of popping receipts and tax statements into your ring binder as soon as they arrive.

The best way to structure budgeting files

Files can be structured by date (for instance, you might have a separate ring binder for each month of the year) or by their contents (for instance, there might be one file for receipts for items that you have bought, one for invoices that have been paid and another for invoices that are awaiting payment). Colour coding your files and labelling them clearly will make finding the right file as quickly as can be.

Why is it so important to keep an archive of your financial materials?      

Accurate accounting is so much easier when you have kept copies of all of the relevant documentation. In addition, receipts and other copies of documents may be requested by the tax authorities if they decide to audit your accounts.

The importance of keeping both digital and physical forms of your documentation                                                                                                           

It is always sensible to keep both a digital copy and a physical copy of all your financial documentation. A recent study in the US found that 140, 000 hard drives crash every year in that country. And, the same study indicated, the results of losing data through a digital disaster like this can spell doom for companies with 93% of companies that lost their digital data filing for bankruptcy in the subsequent 12 month period. Physical documentation can be lost or stolen, too, but it provides essential backup in the case of the loss of your digital copies. Thus, it makes sense to keep both a digital and physical copy of all of you budgeting information. Keep them in separate places (for instance, one at home on a shelf full of files, and one in the office). For good measure, back up your digital information on a cloud based storage system so that even if you hard drive fails, you will be able to recover it. A top tip for online documents is to use an online storage system as this eliminates the risk of losing documentation due to computer failure.

Keep track with your budgeting as you go for an easy life                                

Use a good filing system and sensible storage and cataloguing practices to ensure that you are always on track with your budgeting. That way, whenever you need financial information you will know exactly where to find it.

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How to Negotiate Your Next Salary http://moneybulldog.co.uk/how-to-negotiate-your-next-salary/ http://moneybulldog.co.uk/how-to-negotiate-your-next-salary/#comments Wed, 12 Jul 2017 08:00:00 +0000 http://moneybulldog.co.uk/?p=17042 Wondering how to negotiate your next salary? Well, we’ve put together some advice to help you, read on to discover more. Bide your time First and foremost, don’t start talking about benefits or salary until after you’ve been offered the job. Use your interview to ask about the role and the organisation, rather than salary.

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Wondering how to negotiate your next salary? Well, we’ve put together some advice to help you, read on to discover more.

Bide your time

First and foremost, don’t start talking about benefits or salary until after you’ve been offered the job. Use your interview to ask about the role and the organisation, rather than salary. If you want a few questions to hand to ask at interview there’s lots of advice available online, just take a look.

Do your research

Also, ensure you’ve done your research beforehand, so you know the going rate for similar roles. Look for jobs with a similar specification, with similar employers, and see what they are offering, including any additional benefits. If you are new to the role, be realistic and bear in mind that candidates with more experience, will earn more for the same role.

Once you’ve had a job and salary offer, ask if there is any flexibility in that offer. If the offer is below what you were expecting, then say so. Make your case as to why you should be offered a higher salary by referring to your experience, knowledge, awards or accolades, additional qualifications or the transferable skills you’d bring to the job.

Know your market

As we’ve mentioned, the most important thing when negotiating a salary is to have done your research beforehand and know the going market rate. In your negotiations cite the standard salaries in the industry and any additional benefits you know to be the norm. For instance, if the firm from which you’ve had the job offer doesn’t give you the benefits of their competitors, it may help you argue the case for a higher salary in recompense.

Do ask for slightly more than you hope to achieve, so there is room for negotiation, but not so much more, that it’s out of step with the industry norm.

Don’t get personal

Also, don’t give away too much information too soon; and don’t tell your prospective employer the minimum wage you’d expect – or that’s all they are ever likely to offer you. Also, don’t share personal information about your various financial commitments, obligations or difficulties, it won’t help.

Your quality of life

Remember too, that there are other important considerations such as working hours, on-call commitments, location, ease of journey and workplace culture. It’s also mentioned on the CV-Library site that there are some factors that money can’t buy, and if you find a role you’d love, in an organisation with a culture you’d feel happy in, then that’s worth its weight in gold, no salary can make up for it.

So, there you have an overview of how to negotiate your salary, we hope you’ll soon have your dream job offer and be receiving your ideal salary too!

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How Life’s Little Luxuries Can Add Up http://moneybulldog.co.uk/how-lifes-little-luxuries-can-add-up/ http://moneybulldog.co.uk/how-lifes-little-luxuries-can-add-up/#comments Mon, 10 Jul 2017 16:18:17 +0000 http://moneybulldog.co.uk/?p=17037 While I’m all for being frugal in life, I do still like to enjoy a few little luxuries. I’m talking about going for a meal out with the family, having a takeaway night at home with friends and I have to admit that I probably still pick up too many coffees on the go. This

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While I’m all for being frugal in life, I do still like to enjoy a few little luxuries. I’m talking about going for a meal out with the family, having a takeaway night at home with friends and I have to admit that I probably still pick up too many coffees on the go. This is why I find it useful to remind myself from time to time just how much these little luxuries can add up when they start to become more like daily or weekly occurrences. So, let’s just take a moment to ponder over how much we could spend in a month on life’s little luxuries if we’re not careful.

Eating out

Eating out is something I seem to do less of these days, now that the kids seem to suck up so much of our spare cash! Still, we do go out for a meal now and then and when we do the cost can usually range anywhere from £30 to £60 depending on where we go. I should say here that we don’t live in a city, so I can imagine this might sound quite cheap to some. So, let’s say that if we were to do this more often, say once a week, we could easily be spending £120 – £240 a month on eating out. That’s quite a substantial spend on food which we could make at home for a fraction of the cost!

One Meal Out a Week – Let’s say £180 a month

Takeaways

Many people try to save money on eating out by ordering in a takeaway instead. Recently, though, I’ve really noticed that the cost of our takeaway bill has been going up. In the past when my wife and I ordered a curry, we could pretty much guarantee that we’d have change out of £15. Nowadays, though, we sometimes have to hand over a £20 with nothing coming back in the other direction. I came across a news article today which showed that I may not be imagining this and that the whole takeaway industry might even be under threat due to rising costs. So, if you’re having a takeaway once a week, then that’s £80 a month you’re spending and I think that this will probably be a conservative estimate as I know the takeaway places where I live aren’t expensive and I would guess that there are a lot of people out there who would order in 2 or even three times a week. If this sounds familiar then maybe now is the time to rethink how often you’re ordering in and start relying more on your own culinary skills, as it could be very beneficial to your wallet and bank balance. Or, maybe you can think about looking for a cheaper alternative such as buying in a curry that you can just cook in the oven. I know Lidl do some good ones and they’re really cheap too.

One Takeaway a week – Let’s say £80 a month

Coffees

There was once a time when I used to spend a lot of money each week on takeaway coffees. I’d often pick one up on my way to work each day and at around £2 a day that really started to add up. In the end, I decided to buy a Nespresso machine as I still wanted to enjoy a nice proper coffee without having to deal with the hassle of filtering it myself. This saved me a fortune as I then spent around 30p a day instead. I know some people will say that this is still a bit of a luxury but it’s one that I’m willing to live with for now, especially as it has cut my coffee bill down considerably. Maybe this could work for you too, or perhaps you’ll be happy to just stick with the instant coffee instead going forward when you realise how much you could save.

One Takeout Coffee a day – Let’s say £60 a month

Keep an eye on how these costs add up!

Here we’ve looked at just 3 of life’s little luxuries and we can really see how much they can add up. If we were to eat out once a week, get a takeaway once a week and then buy a coffee each day, then the monthly cost could come in at around £320 a month. If we could manage even just to cut that bill in half then we could have around £160 extra on a monthly basis to put into savings, pay down debt or you might have something else in mind where this money could come in useful. These aren’t the only luxuries people tend to spend on either and you can see how much you could save on other little luxuries using this handy tool.

So, while we all like to enjoy a little treat now and then, let’s make sure that we aren’t missing out on achieving other more important financial goals simply because we’re allowing our treats to become more of a normality.

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A short guide to stock-based loans http://moneybulldog.co.uk/a-short-guide-to-stock-based-loans/ http://moneybulldog.co.uk/a-short-guide-to-stock-based-loans/#comments Fri, 07 Jul 2017 17:59:02 +0000 http://moneybulldog.co.uk/?p=17025 Stock trading can sap the resources of even some of the best traders. There is always a desire to go for more and more stocks, so the trader can amass a large portfolio, and that may not leave the trader much money for other things they would like to do. While their trading may pay

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Stock trading can sap the resources of even some of the best traders. There is always a desire to go for more and more stocks, so the trader can amass a large portfolio, and that may not leave the trader much money for other things they would like to do. While their trading may pay off in the end, it can take a while for the stock to mature and become worthwhile. As traders wait for profits, they may want to see the world, buy a car, remodel a house or do other things that they were hoping to do with the profits they earned through trading.

Unfortunately, stock trading is often a long-term game, and it is common for someone’s money to be tied up in stocks for years before they start to get a decent return on their investment. They may not be able to do much while they wait on their stocks to grow in value. That is why some investors turn to loans to finance their expenses. If they want to take a trip or make an expensive purchase, they may apply for a loan to be able to afford to do so, not knowing if they will be able to pay the money back on time.

What they may not realise is that there are loans out there that are specially geared toward investors, executives and founders that use the assets they already have to finance themselves. A stock-based loan is a loan where the asset is the publicly traded stock. The stock is the borrower’s collateral, and they do not need to put up their car, house or other valuable assets to secure the loan.

Hong Kong based Qilin World Capital, for example, offers investors a stock loan option that lets them keep publicly traded securities while having the benefits of having some money to work with. This kind of loan is not widely available, nor is it available to anyone but those who have publicly traded stocks. The amount of the value of the stock holdings can determine the amount of the loan that is offered. In other words, the more value their stocks have, the greater their loan can be. The stocks will be assessed by the veteran team before the loan amount is approved.

Most stock loans are roughly three years in length. The repayment terms come with interest, of course, and that interest will need to be paid back along with the principal before the borrower can regain ownership of the stocks.

Stock loans have both potential advantages and disadvantages for borrowers. Some lenders offer what’s called a non-recourse loan, which means that if the stocks depreciate in value while the borrower is repaying the loan, then the borrower is able to walk away from it all. This saves the borrower from risk and allows them to use their stock in ways they would not be otherwise able to. It gives them an opportunity to let their stocks sit and appreciate in value while they enjoy the money their loan. With a stock loan, they can avoid the mistake of selling too soon and missing out on some great stock maturity over time.

This type of loan is available in European, Middle East, South American, and Asian exchanges. It is a unique loan that has already helped a number of traders achieve their goals. Many of them have used the loans to pay for necessities that they might not otherwise be able to afford without selling their securities. While the stock market can be a cold mistress, it is good to see options like stock loans made available for those who are having difficulty with liquidity in the market.

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3 Simple Tips to Help You Travel on a Budget http://moneybulldog.co.uk/3-simple-tips-to-help-you-travel-on-a-budget/ http://moneybulldog.co.uk/3-simple-tips-to-help-you-travel-on-a-budget/#comments Thu, 22 Jun 2017 22:20:00 +0000 http://moneybulldog.co.uk/?p=17003 If there’s one thing I wish I’d have done more of when I was younger it is travelling. If I’d known how quickly the years would pass and how many more responsibilities life would bring with it along the way, I’d have recognised just how free and easy I had it and jumped on the

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If there’s one thing I wish I’d have done more of when I was younger it is travelling. If I’d known how quickly the years would pass and how many more responsibilities life would bring with it along the way, I’d have recognised just how free and easy I had it and jumped on the first plane to South America in a jiffy.

The problem back then was that, even though I was earning money, I still felt that the cost of travelling was going to put it out of reach, especially as I lived on my own from a fairly young age. These days, however, while you may not be Superman and be able to travel the world for free, it’s possible to do it for a lot less than you might think. Here are 4 simple tips to help you see the world for less and make your dreams of travelling on a budget come true.

Work while you travel

The first thing to remember is that you don’t have to give up work completely and have no income while you’re travelling, as there are many temporary – or even long term – job opportunities for globe trotters if you are willing to travel and work at the same time. From fruit picking to online language teaching or freelancing to blogging, there are many ways to make money in a world that is now much more set up for flexible working.

Make the most of credit card rewards

Another tip is to use credit card rewards like Air Miles to help fund some of your flights. If you’re planning a trip then you can start doing most of your spending on these kind of cards in the months – or even years – before you travel to build up your miles, and you can even keep on building them up while you’re on your trip. You can then use them to book free flights to your chosen destinations. Just be sure to pay any credit cards off in full each month so that you don’t end up racking up a load of interest, defeating the object.

Be a part of the sharing economy

Our final tip for traveling on a budget is to make the most of the sharing economy. Whether you manage to get yourself a free couch for the night (Couchsurfing) or perhaps grab yourself a free ride somewhere while you’re on your travels, these days it’s easy to use the internet to find someone who might be willing to help you out. Just be sure to keep your wits about you to make sure you don’t land yourself in any dodgy situations.

Spend less, travel for longer

We can see then that travelling the world doesn’t have to be as expensive or as daunting as you might at first think. With a little planning ahead, a wise use of a credit card and a willingness to work while you travel, you can cut the cost of travelling drastically and perhaps even extend the amount of time you are able to travel for.

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What would you be willing to sacrifice to buy your own home? http://moneybulldog.co.uk/what-would-you-be-willing-to-sacrifice-to-buy-your-own-home/ http://moneybulldog.co.uk/what-would-you-be-willing-to-sacrifice-to-buy-your-own-home/#comments Tue, 20 Jun 2017 13:03:56 +0000 http://moneybulldog.co.uk/?p=16981 Millenials face many challenges these days but one major challenge is that of getting on the property ladder. With inflation on the up and wages remaining stagnant, house prices still rising and rents seeming to edge higher every year, saving for a deposit is just one of the major hurdles young would-be home buyers face,

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Millenials face many challenges these days but one major challenge is that of getting on the property ladder. With inflation on the up and wages remaining stagnant, house prices still rising and rents seeming to edge higher every year, saving for a deposit is just one of the major hurdles young would-be home buyers face, let alone passing today’s more stringent affordability checks.

It’s clear, then, that if young adults today are going to achieve their goal of home ownership, then it is likely that that it will require a great deal of sacrifice on their part in order to be able to save for that much-needed deposit. The big question is, do millenials feel that it is worth making a few sacrifices to be able to buy their own home and if so, what sacrifices would they be willing to make?

To help offer some suggestions to young adults as to what areas they might be able to sacrifice in and also how much they might be able to save, the team at MyVoucherCodes recently launched a helpful tool called ‘My First Home Calculator’.

Using the tool, you can input how much money you tend to spend in certain areas such as buying takeaways, eating out at restaurants, forking out for gym memberships and other more neccesary expenditures like utility bills and more. You can then find out how much money you might potentially be able to save towards a deposit for your first home if you were willing to cut back in some of these areas. While the individual savings might only appear to be small at first glance, when you add them all up together and then also multiply them over the course of a year, these small savings really do turn into big savings and you may just feel by the end of it that home ownership is a dream which is more achievable than you might think.

We’ve tried to embed the tool below for you to give it a try (hopefully it’s all working ok) but if you can’t seem to get it working here then you can head on over to www.myfirsthomecalculator.co.uk and try it out there instead.

So, if you still harbour the dream of one day owning your very own home then maybe the tool below can give you some much needed inspiration to make a few changes in your spending habits, in order to turn that dream into a reality.

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Saving Money while Job Hunting http://moneybulldog.co.uk/saving-money-while-job-hunting/ http://moneybulldog.co.uk/saving-money-while-job-hunting/#comments Fri, 16 Jun 2017 10:07:27 +0000 http://moneybulldog.co.uk/?p=16972 It is a position many of us have found ourselves in before – unemployed and worrying about how exactly we’re going to be able to get by until the next pay check (whenever that might be). It is important to remind yourself that the situation is temporary, and to not be too hard on yourself

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It is a position many of us have found ourselves in before – unemployed and worrying about how exactly we’re going to be able to get by until the next pay check (whenever that might be). It is important to remind yourself that the situation is temporary, and to not be too hard on yourself in the meantime. However, of course, it is important to be frugal when you are yet to have a regular income again. Here are some tips on saving money during your job search.

Tip 1: Cut unnecessary expenses. Unnecessary expenses should be the first to go while you are searching for a job. The mandatory expenses including housing, food and health, can add up and without a steady income coming in, it is safer to shift your focus to saving money. After all, your job hunt could last longer or your start date presented when you land a job could be later than expected. It is better to have a cushion instead of spending the money that you do have on clothes, personal spa days or a costly holiday.

Tip 2: Find jobs online or using your mobile phone. Many jobs are posted online these days, meaning you can save on printing hundreds of CVs and cover letters that may very well never be read anyway. You can use local amenities like the library to get internet access if that is an issue, or if you have a smart phone you could use that to search for vacancies on sites like Jobrapido meaning you can carry out your job search anywhere and everywhere and apply with the click of a button.

Tip 3: Think and then think again about your accommodation. Rent payments are a good chunk of income even when you do have a job. While you are on the hunt for a job, be very aware about what you can afford for rent and make sure you ask the right questions before choosing a place to rent. Having roommates can help make rent a bit less expensive, or if you have family in the area, moving home until you land a job could be a practical decision, you will thank yourself for later.

Tip 4: Become a master at food preparation. Dining out here and there adds up, no doubt. Learn how to food prep so that you can save money on groceries and use only the ingredients that you need. Then, you can take food with you on the go and avoid buying food out just because you need something quick. Remember to always have a water bottle with you, too!

Tip 5: Don’t jumpstart adding to your work wardrobe.

During your job-hunt, be sure to have a few different professional pieces that you can mix and match depending on the workplace environment of your potential employers. But hold off on purchasing any additional items. It is best to do so after you land the job so you understand how dressed up your colleagues get. After all, you don’t want to add to your suit or dress collection and then learn two days after your start date that everyone dresses up jeans in the office.

Tip 6: Save your receipts. The money that you spend on your job search can be extremely helpful during tax season. Fees do add up throughout a job search, and many of them could be tax-deductible. Record your mileage for trips, too!

Of course, there is financial help available in the UK for those who are searching for work. It is important to know what you are entitled to in terms of payments until you find the job that is right for you. Other than that, keep an eye on your expenses and stay focused on your job hunt.

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Five Essential Ways to Gauge the Performance of your Forex Account http://moneybulldog.co.uk/five-essential-ways-to-gauge-the-performance-of-your-forex-account/ http://moneybulldog.co.uk/five-essential-ways-to-gauge-the-performance-of-your-forex-account/#comments Tue, 06 Jun 2017 09:43:30 +0000 http://moneybulldog.co.uk/?p=16965 Good and bad forex traders cannot just be spotted from their gains and losses. The figures can be deceptive. Gauging the performance of your account is important in order to understand how your investment is progressing, and also to help you gain financial support from other investors. To improve the performance of your account, you

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Good and bad forex traders cannot just be spotted from their gains and losses. The figures can be deceptive. Gauging the performance of your account is important in order to understand how your investment is progressing, and also to help you gain financial support from other investors.

To improve the performance of your account, you should create a trading strategy. The Commodity Channel Index is one of the most popular tools used to determine the level of risk involved in the buying or selling of currency. It helps investors know when a market is overbought or oversold; and therefore, likely to take a turn in the opposite direction.

Once this is done, you need to know whether you are making or losing money. The five methods highlighted next can help you gauge the performance of your forex account.

Standard Deviation

The arithmetic mean of your profits is just as deceptive as the statement of profits made. This is because the mean can be pulled up by a single major profit.

A clearer method of determining the performance of your account is the use of the standard deviation. This method shows the average deviation from the mean profit stated.

To calculate the standard deviation of your profits, follow these steps:

  • Find the variation of each individual profit or loss from the mean.
  • Square the figures you get.
  • Add up the squared figures.
  • Divide by one less the total number of figures in step 1. The figure you get now is the variance.
  • To get the standard deviation, find the square root of the variance.

With regard to this trading type trading, a good account should have a lower standard deviation.

The Number R

The number R is an important value that reflects the profit factor of an investment. It is used to show the average reward to risk ratio of an investment.

Simply put, it is the ratio of profits to losses over a long period. For example, if you have made average profits of 200,000 USD and average losses of 2,000 USD, your R figure will be 100 R. It is calculated by dividing profits by losses.

With a risk to reward ratio of 100 R, you can expect to make 100 USD for every dollar you lose. Of course, a higher R figure shows a good investment performance.

Sharpe Ratio

Developed in 1966, the Sharpe ratio has become a common standard of gauging the performance of money market accounts. The ratio gives a risk-adjusted return on your investment. It is, especially important in these investments since the market does not have a normal distribution of the expected returns.

To calculate the Sharpe ratio of your investment, you only need to replace the figures in this formula: (rp-rf)/ sd, where:

  • Rp is the return on investment.
  • Rf is the risk-free return.
  • Sd is the standard deviation of (rp-rf) over a period.

A high Sharpe ratio indicates that an investor has been getting good returns compared to the level of risk taken. Using a Sharp chart with a CCI indicator is also a good idea. A trader with a very high standard deviation will need to make more profits in order to increase the Sharpe ratio. Those with low standard deviations can have a high Sharpe ratio while making average returns.

Sortino Ratio

This ratio is similar to the Sharpe ratio, except for the fact that it uses the standard deviation of negative returns. Here, the risk is described as the failure to meet the expectations or to hit the mean profit level.

It is calculated using this formula: (Rp-Rf)/dsd, where dsd is the downside standard deviation. The rest of the symbols are just the same as those in the Sharpe ratio formula.

The downside standard deviation is calculated by setting the profits to 0 and finding the variance of the losses from the mean. These values are then used to determine the standard deviation.

Again, a high Sortino ratio indicates a good investment portfolio.

K-Ratio

The K-ratio is quite different from the above methods of gauging account performance. However, it still involves a comparison of risk and reward.

For the K-ratio, the numerator is the slope of a best-fit line of regression over a cumulative return series. A steep line of best fit indicates higher returns on investments. The denominator is the standard error of the line of best fit.

A K-ratio of 0 indicates that the investor is neither making a profit nor a loss. A positive K-ratio indicates the creation of profit, while a negative K-ratio indicates the creation of losses.

Conclusion

Gauging the performance of your forex account is just as important as forecasting the market. The methods described here are all suitable for the market and can help you determine the moves to make regarding your investments.

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7 Common mistakes made by amateur property developers & how to avoid them http://moneybulldog.co.uk/7-common-mistakes-made-by-amateur-property-developers-how-to-avoid-them/ http://moneybulldog.co.uk/7-common-mistakes-made-by-amateur-property-developers-how-to-avoid-them/#comments Mon, 05 Jun 2017 11:18:29 +0000 http://moneybulldog.co.uk/?p=16958 As an amateur property developer, you will discover along the way that mistakes are common, however, there are some to look out for immediately to avoid any costly issues – here are some examples and how to avoid them: Buying in the wrong location The biggest mistake that any amateur property developer could make is

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As an amateur property developer, you will discover along the way that mistakes are common, however, there are some to look out for immediately to avoid any costly issues – here are some examples and how to avoid them:

Buying in the wrong location

The biggest mistake that any amateur property developer could make is buying in the wrong area. They tend to get excited by the prospect of cheap property in need of renovation and buy without giving it enough thought.

Trouble is, houses are usually cheap for a reason and that’s because not many people want to live there. If you aren’t sure where the up and coming locations actually are then consider taking inspiration from a seasoned professional in the business, such as Jason Harris at First Urban to get some advice. You can look into First Urban’s business on Duedil.

Overstretching funds

When it comes to obtaining a mortgage, buy within your means instead of going for the more expensive option that may end up giving you sleepless nights and extra stress in the future. The mortgage rates in the UK are still relatively low so it’s a good time to buy. Just ensure you do your research and price things up before you get into trouble.

Going too fast

If you’re too keen to make your money, then you’ll probably end up making mistakes that will cost you in the long run. You need to set yourself a realistic timescale that includes everything from planning permission to the final sale going through and document all of this important paperwork all the way through.

Timing is everything

You’ll see houses on the market for months over the winter without selling, purely because people aren’t usually looking to buy during the winter months. Make sure you plan for your properties to be finished and on the market inside the optimal selling seasons of spring and autumn. This way, you’re more likely to get the asking price and the photography will look much better than in the gloomy winter months.

Not having a network

Even if you’re working on your own as a property developer you need to build a network of trustworthy contacts around you to ensure success. This includes builders, plumbers, electricians, decorators and mortgage advisors at the bank. If you think that you can do it alone you may end up facing overpriced work, getting overcharged by the builder or ending up with a property that has a lot of problems in the long run.

Going over the top

You want your houses to sell but if you try too hard when it comes to interiors, chances are that people won’t feel comfortable in the home. You need to keep up with the times when it comes to style and design and make houses feel like homes rather than show homes.

Not considering the market

Finally, as a property developer, you need to decide who your target market is. This will depend a lot of your prior research into the area you want to work in and looking at who the biggest spenders are. Once you’ve done your research you can tailor your property to suit that particular market therefore having a higher chance of a quick sell.

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