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US Savings Bonds 101

United States Savings Bonds - Investing in United States Savings Bonds

US savings bonds come in several types, each with their own unique interest rates, purchase limits, and tax treatment. This guide to investing in US savings bonds will walk you through it all, giving you a solid foundation in the basics of bonds.

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Joshua's Beginner's Investing Blog

Why The Dow Jones Industrial Average 10 Year Record Is Deceptive

Sunday December 20, 2009

On December 1, 1998, the Diamonds Trust ETF, which mimics the Dow Jones Industrial Average, closed at $91.27.  If you had invested $100,000, you would have ended up with 1,095 shares.  Along the way, you would have collected $22.886 per share in cash dividends.  To make this easy to understand, think of it as a reduction in cost basis.  Your break even point would now be $68.384 per share ($91.27 cost basis - $22.886 dividends received = $68.384 is the point you lose money).

The ETF now trades at $103.14.  That means that your gain is $34.756 per share ($103.14 current market value - $68.384 adjusted cost basis to reflect dividend income).  Compared to your original cash outlay of $91.27 per share, this represents a gain of 38.08% over ten years.  Your investment portfolio would be worth $138,057.82.

What is the compounded rate that represents?  We have to perform a calculation that involves something known as the "X Root" to figure it.  You take the total years (10 in this case) and divide it into the number 1.  The answer, 0.10, is going to be used in the next step.  You then take the gain, expressed as 1.3808 and raise it to the 0.10th power.  The answer is 1.032792505601167.  In other words, your stock investment compounded at 3.279%, or almost exactly the rate of inflation.   Read more...

Stock Trading Guide for New Investors

Thursday December 17, 2009

Want to know the difference between a market order and a limit order?  How to trade on margin (or, if you do, how much risk there is for your portfolio)?  How shorting stock works?  If you are a new investor and you've always wondered about the simple stock trading techniques such as these, but were too embarrassed to ask, I put together this collection of articles and step-by-step guides to help explain it all to you.  Learn the basics of stock trading ...

Beginner's Guide to Investing in Stock

Monday December 14, 2009

investing in stockThis guide to investing in stocks was designed for new investors that have no background and want to find out what stock is, how it is issued, how preferred stock is different from plain vanilla common stock, the two ways you can actually earn a profit from investing in stock, and much more.  It's the best place to get started if you are serious about putting your money to work and joining the millions of men and women who own shares of companies throughout the United States and world.

Your Guide to Saving Money

Friday December 11, 2009

saving moneyAll investing has to begin with saving money.  In this collection of articles about saving money, you'll discover the difference between saving and investing, how to calculate how much money you should be saving, techniques you can use to help you save even more money, and how to save the first $100,000.  It's a wealth of information that you won't be able to get anywhere else so take advantage of the opportunity to start saving money right now ...

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