In the United States, we pour billions of dollars in bonuses and severance packages on executives that leave their companies in shambles.  In China, they execute them.  This isn't a joke.  According to Reuters, China just executed Yang Yanming, a former securities trader who embezzled millions of yuan, most of which is still missing.

The reason, it seems, is that the Chinese government is aware of the country's massive leaps in wealth and that the journey is going to result in uneven economic disparity.  If the changes are too rapid, the poorer members of the country could result in discontentment, resentment, and uprising.  To help make the transition to a first-world empire easier, they have implemented the death penalty in economic cases where the defendant is guilty of serious, egregious conduct.  (Think Worldcom, Enron, and Madoff.)

According to a new story by the Associated Press, Vanguard, the nation's premier provider of mutual funds and 401(k) accounts, shows that the customers that did the following three things now have more money in their account than they did before the crash:

• Continued to maintain their regular contributions
• Took advantage of employer matching on 401(k) balances
• Reinvested all of their dividends

It all comes down to what I've told you hundreds, perhaps even thousands, of times: When you combine dollar cost averaging with reinvested dividends and employer matching, the results are far better than the stock charts appear.  You can always tell when someone doesn't know basic finance when they see a chart of the market that goes from 14,000 to 6,000 then back to 10,000 and assume people are still down 4,000 points.  Not when you factor in dividends, dollar cost averaging, and employer matching.  You are likely better off because of your lower cost basis. Almost everyone who falls into this camp has an ulterior motive, such as pushing gold or real estate as an investment (both are very good investments, as a matter of fact, under certain circumstances.  But only fools think they are always, in all circumstances, superior to retirement plans.)  In fact, I felt so passionately about this that a long time ago, I wrote an article called The #1 Secret for Recovering from Big Market Losses.

So: It's official.  Those who did the right things are now better off than before the crash.  I'm sure some corners of the population are going to complain about how the rich keep getting richer, but this is the same, boring advice that has been taught for time eternal.  Most people simply assume that something so boring, and so simple, can't be that powerful.  It's a huge mistake to make.  I hope you aren't one of those people.

Once you're ready to start buying and selling investments, you'll need to know how the process works.  This beginner's guide to online stock trading will walk you through choosing a broker to execute your online trades, the twelve types of stock trades you can make, how to short stock, how to trade on margin, the possible capital gains taxes you'll face, what market makers are and why they are important when trading stocks, and more.  Think of it as your ultimate reference guide to stock trading.

Continue reading The Beginner's Guide to Online Stock Trading ...

The broker and brokerage firm are the two primary relationships you will have when you begin your journey to investing, whether you use a traditional broker, a discount broker, a bank, or a trust company.  Given that this relationship is so important, I put together a collection of articles and resources that will help you:

• Know what to expect when dealing with your broker; you'll see actual copies of real brokerage account statements and trade confirmations
• Find out how to choose a broker and brokerage firm based on your own individual needs and financial resources
• Learn what full service brokers and full service brokerage firms offer their clients that the discount online stock brokers cannot
• Uncover the biggest rip-off fees to avoid from your stock broker
• Discover ways to invest in, buy, and sell shares of stock without a broker or brokerage firm
• Compare the difference between a brokerage account and the now-popular asset management accounts or portfolio management accounts
• Whether or not you may be able to sue your broker if you lose money
• The twelve types of trades that you can place at a brokerage firm to get your stock orders executed
• Find out whether or not you lose everything if your broker and / or brokerage firm declare bankruptcy
• Discover what it means if your assets, including stocks, are held in a street name rather than personally registered to you

If you are new to investing, or are considering making the change to a new financial institution or brokerage firm, you will definitely want to take the time to brush up on the knowledge in this collection.  Continue reading The New Investor's Complete Guide to Stock Brokers and Brokerage Firms.