Tuesday, December 30, 2008

5 stock experts foresee 2009 rebound

By Adam Shell, USA TODAY
NEW YORK — With the stock market on track for its worst year since 1931, Wall Street strategists are predicting a rebound in 2009.

A review of year-end '09 targets for the Standard & Poor's 500 index by five top market strategists found that nearly all expect double-digit percentage gains, despite another year of sharp swings. The most bullish projections call for a 24% gain from current levels.

Wall Street's gurus, however, were also bullish heading into 2008. While most predicted a stormy first half, none forecast the financial hurricane that engulfed investors. The S&P 500 is down 39.3% in 2008, the worst since a 47.1% drop in 1931, S&P says.

But predicting a rebound may be based on more than hope. Stocks have snapped back sharply after past historic declines. After stocks bottomed out after an 89.2% drop in July 1932, for example, the Dow Jones industrials rallied 93.9% the next two months, Dow Jones Indexes says.

Similarly, the S&P 500 rebounded 25.2% in 1938 after falling 38.6% in 1937, S&P says. After the 2000-02 bear market bottomed, the S&P 500 rebounded 26.4% in 2003.

One caveat: The S&P 500 fell 15.2% in 1932 after its record 1931 decline.

The strategists are betting on:

•An economic recovery. At some point after mid-2009, a rebound should occur, says Thomas Lee, U.S. equity strategist at JPMorgan Chase. But Lee says investors shouldn't rush back into stocks immediately.

He expects a rally early in the year on initial optimism about the bailout plans. Then he expects a pullback because of headwinds such as weak earnings. He says tailwinds such as lower gasoline prices, fiscal stimulus and a stabilization of the housing market will help stocks by year's end.

•Government stimulus plans. "The size of the global policy response to stabilize both the financial system and the growth outlook is virtually unprecedented," writes Abhijit Chakrabortti, strategist at Morgan Stanley.

•A repeat of history. "When this bear market ends, be prepared for a fast and furious partial recovery," S&P's chief investment strategist Sam Stovall writes in his 2009 outlook. Historically, the S&P 500 has recouped, on average, 33% of its bear market losses 40 days after a bottom.

Saturday, December 27, 2008

Stick to your plan in a volatile market

Posted: Dec. 27, 2008 7:33 p.m.

Fourth quarter 401(k) statements will be arriving soon like a lump of coal in everyone's stocking.

Falling home prices have kept investors nervous since the fourth quarter of 2007. But when Lehman Brothers filed for bankruptcy protection in September, things went from bad to worse.

What made this stock market drop so painful is that, this time, there's been almost no safe place to put your money. Everything dropped simultaneously. Diversification, meant to lower portfolio volatility, was rendered completely ineffective by panic selling in all asset classes.

In terms of magnitude, it's the third-worst drop in stock market history (-51.9%), if we use Nov. 20 as the bottom. The other two drops that were bigger: Sept. 7, 1929, to June 1, 1932 (-86.2%), and March 6, 1937, to March 31, 1938 (-54.5%). This has driven many 401(k) portfolios down 30% to 40% for the year.

So what's a 401(k) investor to do?

Don't let emotions dictate your investment decisions. Fear is a powerful motivator, but bailing out of the market now is not the answer. Today, stocks and corporate bonds are 30% cheaper, on average, than they were six months ago. Foreign stocks and bonds are even more depressed. While prices may still go lower, it's hard to see how selling long-term assets at some of the most depressed prices in the past 120 years will turn out to be a good idea.

Don't try to time this market. Sure, there's a chance that the market will drop more in 2009, but there's no way of knowing if that will happen or how far it might drop. What we do know is that historically, after a bear market bottom is reached, the bounce back is usually swift and significant. In fact, after 20 bear market bottoms that date back to 1903, the market rebounded an average of 46% over the next twelve months.

Develop a plan. 2008 will be, from this point on, the year financial planners use to illustrate the importance of having a proper saving and investing strategy for retirement. Those who started too late, saved too little or invested too aggressively as they neared retirement now face the reality of having to work longer or accept a lower standard of living.

Stick to your plan. Keep investing during lousy market periods, even if it feels unnatural. While your current asset-allocation strategy was probably no help avoiding a collapse in the value of your 401(k) account, that's not a good reason to abandon it now. It's impossible to know which fund category will bounce back first, so a diversified strategy is still your best approach to recover from this bear market.

Rebalance your portfolio back to your original target allocation between stock and bond funds. Say you had adopted an investment strategy that allocated 80% of your savings to a diversified portfolio of stock funds, and 20% to bond and stable value funds. Because of the beating stock funds have taken this year, your portfolio is probably now closer to 60% stock funds and 40% bond and stable value funds.

Because I believe we're close to the bottom, consider selling some of your bond and stable value funds now and purchasing more shares of stock funds to reallocate your holdings back toward your original target allocation of 80/20. Rebalancing gradually over the next six months will lessen the importance of the timing.

How you respond to this sharp drop in the markets could have a profound effect on how financially secure you are in retirement. History suggests that we are now looking at one of the most opportune times to invest that we've seen in a long time.

Michael J. Francis is president and senior investment consultant of Francis Investment Counsel LLC, a registered investment adviser based in Pewaukee. He can be reached at michael.francis@francisinvco.com.
The information in this article is for informational purposes only. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Francis Investment Counsel does not offer personal tax or legal advice.

Thursday, December 25, 2008

Rebuild retirement savings with 401(k) and smart use of stocks

The bear market and the economic slump have caused most 401(k) retirement savings to have a major meltdown this year.

Not only has the financial mess caused retirement investments to plummet in value, it also has caused a growing number of employers to suspend their 401(k) company match.

But as gloomy as it all seems, you shouldn't spend the winter hiding under your blankets. After you put away your holiday decorations, it's a good time to regroup and learn from this year's pitfalls and mistakes.

Here are some tips for rebuilding your retirement savings in 2009:

Make sure you can sleep at night
FIND MORE STORIES IN: CDs | Enron | Vanguard | Hewitt Associates | Employee Benefit Research Institute | Pamela Hess | Center for Retirement Research | Jack VanDerhei | Christopher Jones | Financial Engines

As difficult as the year was, you may have learned some important things about yourself. You may be far less willing to take risks than you think.

"We've been through one of the most rapid and extreme bear markets in history," says Stephen Utkus, principal at Vanguard's Center for Retirement Research. "And if that wasn't a test of your risk tolerance, I don't know what would be."

If you're still comfortable with your asset allocation, then your risk and return are in a good balance. But if you've lost much sleep this year, you know it's time to reduce your risk and adjust your investment priorities.

Don't panic

After the worst financial crisis since the 1930s, you need to start 2009 by making a candid assessment of your retirement plan, Utkus says. If that means investing less in stocks, fine. Just be aware that you may have to increase your savings over the long term to compensate for the lower returns you'll get from bank CDs and money market funds.

If you shifted money in a panic, however, you might want to reconsider. So far this year, 401(k) trading activity has risen to 6%.

"It's only 6%, but it's very high, relative to other years," says Pamela Hess, director of retirement research for Hewitt Associates. "And there has been a lot of emotional selling."

Not surprisingly, most have moved their money into stable value funds and money market mutual funds. That may seem safe. But if you're planning to get back into stocks, don't think you'll be able to time the market. Most people simply sell low and buy higher.

"They really risk missing the upside," Hess says. "Then they are locking in an inferior return."

Start the year by making sure you have a smart financial strategy — and don't rely on the past when you plan for your future.

"Everyone says, 'The market is going down, therefore I shouldn't invest in equities,' " Utkus says. "You should think about how to be best positioned going forward, as opposed to spending too much time looking out the rearview mirror."

And most planners say that if you have a long-term investment horizon — 20 years or so — you should have most of your assets in stocks.


Some plan participants were too aggressive in their investments by investing only in one kind of stock — small-company stocks, for example. When the market collapsed, their retirement savings did, too.

It's even more risky to be too concentrated in company stock, says Christopher Jones, chief investment officer for Financial Engines, which provides advice to 401(k) plan participants.

Even though the Enron debacle should have provided a cautionary tale about investing in company stock, that's still a major problem, Jones says. Many plan participants continue to invest 100% of their 401(k) money in company stock.

"They look at the stock market and say that they've done better in their company stock," he says. "The fallacy, of course, is that it doesn't guarantee anything about the future."

Make sure that you have a well-diversified portfolio that includes broad-based stock funds, such as those that track the S&P 500-stock index.

"Don't confuse bad investment results in the past with a good financial incentive going forward," says Jack VanDerhei, research director of the Employee Benefit Research Institute.

Be mindful of your age

When you're 30, you can put all your money in stocks because you'll have plenty of time to make up for losses. When you're 55, it's much harder to make up those losses. Many employees who are close to retirement are now suffering because they had overly invested in stocks.

But if they'd invested in a target-date fund, they would be in better shape. These funds invest in a mix of stocks, bonds and money funds based on when you plan to retire, and they're managed by professionals who make disciplined investment plans.

Nearly half of 401(k) plan participants who are ages 56 to 65 had portfolios that had at least 20% more in stocks than target funds designed for that age group did, says VanDerhei.

Many companies now use target-date funds as the default option for 401(k) automatic enrollment — but that generally involves younger employees, who are newly enrolled. Older plan participants should consider moving their 401(k) money into target-date funds, especially if they don't believe they have the financial acumen to accomplish their asset allocation on their own, VanDerhei says.

Keep saving

Even if the stock market calamity has made you feel frightened and demoralized, you should try to stay in the game, Hess says.

Then you can take advantage of the pretax savings that you have in a 401(k) plan. And if your company offers a matching contribution, you also can take advantage of that.

"You should make sure that you are saving enough to get every last penny of your company matching contribution," Jones says.

Unfortunately, more than 20% of the workers who participate in their plan don't contribute enough to get the full company match, according to Hewitt Associates.

Keep the big picture in mind

A growing number of employers are suspending their company match. That creates worries and resentment among workers, And some are considering dropping their 401(k) plan entirely.

But keep in mind that most companies, unless they go into bankruptcy, will eventually reinstate their matching contribution. And the responsibility for retirement savings was yours, anyway, says Sheryl Garrett, a financial planner in Kansas City, Mo.

"Companies have to cut where they think it inflicts the least amount of pain on their employees and their business," she says. "Cutting into your retirement nest egg temporarily is their way of trying to stay viable and continue giving you a paycheck."

Don't cash out

Younger employers tend to cash out their 401(k) plan when they switch jobs. Big mistake.

For most, if they have $10,000 or less in their plan, it looks like free money, and retirement seems far away, Hess says.

But if a 25-year-old has just $5,000 in a retirement account that earns a 7% average rate of return, it will be worth $74,872 when the worker reaches 65 — even without adding any more money, according to Hewitt.

Take charge

Most people are passive investors, Hess says. It would be great if they took a more active role in their savings.

By Christine Dugas, USA TODAY

In the past, many workers had a pension plan, so 401(k) plans were a supplemental benefit.

"Now, they are our main savings vehicle, and so it's important to have a plan and stick with it," Hess says.

If you need help, you should check out the tools and advice that your employer offers, or talk to a financial planner. But start out the year with a good retirement plan.

"Keep in mind that for most Americans, a 401(k) plan is the bedrock of their retirement saving," Jones says.

"You are responsible for making the investments and for bearing the consequences of the investment risk."

Wednesday, December 24, 2008

You Can Make Money in Any Market

By John Rosevear
December 23, 2008

Do you know what gets me about the recent stock market blowup?

Somebody out there made a bundle off it.

I know, it's hard to believe. Most folks' retirement account balances are way down. Every single stock mutual fund (all 11,579 of them) is down this year, and highfliers from Akamai (Nasdaq: AKAM) to Apple (Nasdaq: AAPL) -- and that's just the beginning of the alphabet -- are way off their recent highs.

But somewhere out there are investors who made money this year. Lots of money, in some cases.

Many are professionals, of course -- hedge fund managers and others with access to sophisticated tools and strategies -- but others are just ordinary individual investors like you and me. Like you and me ... except that they've learned to use tools and strategies we haven't.

Like going short.

The long and short of it
Most mutual funds aren't allowed to short stocks -- to borrow and sell them, in other words, betting that they'll be able to buy the stock back at a lower price and make money on the difference. Many individual investors avoid the practice as well. The risks are high, the upside is limited, and shorting can't be done at all without a margin account, which excludes most retirement accounts.

But sometimes shorting a stock -- or a sector, or an index -- is a prudent investment. Markets go down as well as up, as we've seen recently. Sectors fall out of favor. Companies sometimes appear headed for disaster long before the wider market catches on, as was the case with Lehman Brothers for a while. Bubbles appear, become evident to some, and then pop.

Shorting banks, oil, or other commodities earlier this year would have been an excellent move, and the weaknesses in all three of those areas were visible to some folks at the time. But how many profited? A lot fewer, because shorting is dicey, and, as I mentioned previously, it's a strategy unavailable to most who do their investing via IRA accounts.

But that's changing. New tools allow investors to take short positions without the need for a margin account. These offer great opportunities for the informed -- along with some new risks.

Enter the short ETF
Most investors are familiar with ETFs. Exchange-traded funds track a wide variety of indexes and are traded throughout the day, like stocks. In recent years, companies like ProShares have created families of short ETFs -- investments that go up when the indices they track go down. (And -- this is important -- vice versa.)

The selection has grown rapidly. ProShares alone offers an extensive selection covering all the major U.S. and international indices, sectors from financials to industrials to health care, commodities including gold and crude oil, major currencies, and more.

Be careful of that lever
Many of these are leveraged, or what ProShares calls "UltraShort," so for every 1% move down in the underlying index, the fund is supposed to go up about 2%. They don't track precisely in practice, but close enough to work out well if you're right, and to cost you a bundle if you're wrong (although unlike a true short position you can't lose more than your original investment). Still, tread very carefully with these products.

The lack of precision has been an issue for some short ETFs. While a fund like UltraShort Oil & Gas (NYSE: DUG) is designed to inversely track an index that includes obvious sector heavyweights like Chevron (NYSE: CVX), Schlumberger (NYSE: SLB), and ExxonMobil (NYSE: XOM), the fund's actual holdings are complex derivatives, not short positions in those stocks. The "black box" aspect can be a turnoff for some.

Nonetheless, these ETFs remain useful tools -- not the one fund to carry you to retirement, but a way to take a well-thought-out position on the market, in a sector, or on a currency or commodity. But for once, I'll advise you to think in the short term on these investments. Long is the way to bet long term, as this bear market won't last forever.

Putting it all to work
I've used short ETFs in a small way in the past few months. Most significantly, in the midst of the market crash in early October, I threw a portion of my portfolio's cash position into UltraShort S&P 500 ProShares (NYSE: SDS), which acted as a sort of brake on my portfolio as the declines continued. In that case, the double leverage was exactly what I wanted -- to have a big effect with a relatively small investment.

More recently, I've explored using both long and short ETFs to take longish-term positions on currency movements and sector strengths. The Fool's new $1 million real-money portfolio, Motley Fool Pro, is employing similar strategies using ETFs and short positions together with a core stock portfolio, and I've learned a lot by following its investments.

If you're interested in learning more about Motley Fool Pro and long and short strategies using ETFs, the service will be reopening soon, but for 10 days only. To learn more, and to get your private invitation to join, simply enter your email address in the box below.
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Fool contributor John Rosevear owns shares of Apple. Akamai Technologies is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. The Motley Fool has a disclosure policy.

Sunday, December 21, 2008

Forex Training is a Must For Anyone Serious About Turning a Profit in The Market

Investments & Trading

No matter how well you did in school or what kind of IQ you have, we all need specialized training in certain areas. The forex market is no exception to this. Forex training should be a prerequisite for anyone considering getting serious about trading world currencies for profit.

Is formal training truly necessary? After all, there are plenty of books and online articles on the subject. Wouldn’t it be enough to read them on your own and getting into the market without going through the hassle of official training?

Well, look at it this way. You could read manuals on how to fly a plane, but you probably wouldn’t want to try it for real without getting some hands-on training first in a simulator. By the same token, you shouldn’t jump into buying and selling currencies without getting some training first. You might be able to manage successfully without it, but you’ll be so much better prepared with it.

Forex is a complicated, highly nuanced financial area, and the people who are experts in it are aware that the average person knows almost nothing about it. To help share the wealth of information, the experts have devised a number of training systems on the Internet and elsewhere.

Many forex training systems offer simulators or practice accounts. In these, no real money is involved. It’s pure simulation, giving new traders an up-close-and-personal look at the market without any financial risk. In these demos, you get all the charts, figures and other data you’d get if you were doing it for real. It’s excellent practice for the real thing.

Forex training is seldom free, however. Depending on the type and depth of training, it can be anywhere from $50 to several hundred dollars. How much training you need depends on how serious you are about joining the marketplace. If you truly want to make money buying and selling currencies, it might be wise to get as much training as possible. On the other hand, if you intend to do it as a hobbyist, and if you limit your investments up front to adjust for the learning curve, you might do well enough with just the basic training.

Either way, you owe it to yourself to follow the training lessons carefully. Learn as much as you can from the resources available to you. It will help you turn a profit when you get into trading and help you minimize your financial losses.

Article Writt4en By J. Foley

Thursday, December 18, 2008

Wall Street dips on Morgan woes

Stocks churn - and briefly pull into positive territory - but an afternoon rally doesn't hold, and all three major indexes end the day lower.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: December 17, 2008: 6:06 PM ET

NEW YORK (CNNMoney.com) -- Stocks ended lower Wednesday as investors tried to shrug off a bigger-than-expected loss from investment bank Morgan Stanley, but an afternoon rally failed to hold traction.

Wall Street took a hit Wednesday in the wake of the severe losses from the nation's second-largest investment bank, but sentiment was still buoyed by the Federal Reserve's rate-cutting announcement Tuesday. At this point in the recession, investors are not easily flustered by yet another loss booked by a financial giant.

The Dow Jones industrial average (INDU) lost 99.8 points, or 1.1%. The broader Standard & Poor's 500 (SPX) index ended down 9 points, or nearly 1%, and the Nasdaq composite (COMP) shed almost 11 points, or 0.7%.

Stocks started the session sharply lower and battled back to positive territory briefly, but in the final hour of the session, stocks gave back all of their earlier gains.

One analyst said that Wednesday's volatility was in line with the market's recent turmoil. "One thing you have to keep in mind is the volatility that we have seen over the past couple months," said Ed Clissold, senior global analyst at Ned Davis Research.

Wall Street's sharp drop at the open was anticipated, given the big gains on Tuesday, when the Dow jumped 360 points, or 4.2%. Even if investors had not been dealing with the news of the massive Morgan losses, stocks would have snapped lower in reaction to the sharp gains on Tuesday, a market observer said.

Harry Clark, chief executive and founder of the Clark Capital Management Group, said the market "is taking bad news in stride these days." While massive financial-sector losses weigh on investor sentiment, Clark said that the market is looking for a recovery.

Clissold echoed the sentiment that the market has been braced for negative news. "When a large financial company reports bad earnings, investors for the most part treat that as what would be expected," Clissold said.

Investors were also still digesting the decision from the Federal Reserve Tuesday to cut the key lending rate to record low levels as it pledged to consider further ways to spur economic activity.

Meanwhile, market breadth was positive. Advancers beat out decliners 3-to-2 on the New York Stock Exchange on volume of 1.34 billion shares. And advancers just beat decliners on the Nasdaq, with a volume of 2.16 billion shares.

Company news: Before markets opened on Wednesday morning, Morgan Stanley (MS, Fortune 500) posted a staggering $2.3 billion loss for the fourth quarter, which was far greater than the $298 million loss that analysts were expecting, according to Thomson Reuters.

The loss was even worse than what analysts were bracing for and was yet another indication that every part of the financial sector has been battered by stock-market volatility and credit-market weakness.

The announcement from Morgan Stanley comes the day after rival Goldman Sachs (GS, Fortune 500) posted a $2.1 billion loss - the company's first since it went public in 1999.

Fed rate cut: Wall Street's pullback Wednesday came on the heels of a rally on Tuesday precipitated by the Federal Reserve cutting its key lending rate to the lowest level on record.

The U.S. central bank lowered its key interest rate to a range of between 0% and 0.25%. The rate cut was the 10th time the central bank has slashed rates in the past 15 months.

The central bank has attempted to juice the economy, which officially fell into recession at the end of 2007, with an aggressive rate-cutting campaign.

However, now that the key lending rate is near zero, the central bank may have to find other ways to spur the slumping economy. In fact, in the Fed's rate-cut statement released on Tuesday, the agency indicated that it would consider purchasing its own long-term Treasurys.

"The Fed has really stepped up," Clark said.

He added that investors have taken comfort in the central bank's moves, as evidenced by Tuesday's rally on Wall Street and improvements in the credit markets.

Another analyst echoed the sentiment. "The Fed has clearly signaled it is going to do whatever is necessary to get the debt markets functioning properly again, which is going to be key for the equity markets," Clissold said. In the long run, Clissold said that a return to health in the credit markets is essential to a broader recovery.

Government debt, currencies: Long-term Treasury prices soared Wednesday, continuing Tuesday's rally that happened in the wake of the Fed's announcement that it would consider buying its own long-term debt.

The goal of the government in stepping in and buying its own debt would be to help the troubled housing market find some footing. Thirty-year mortgages typically move in lockstep with the yield on the benchmark 10-year Treasury note.

Lending rates continued to decline. The overnight Libor rate declined to 0.13% from 0.16% on Tuesday, while the 3-month Libor rate dropped to 1.58% from 1.85%, according to Bloomberg.com. Libor, or the London Interbank Offered Rate, is a daily average of what 16 different banks charge other banks to lend money in London.

The improvements in Libor rates are one indicator of credit-market pressures easing. "They have been coming down for the last two months and they are finally down where they should be," Clark said.

Auto bailout: U.S. automakers are still awaiting news from the Bush administration as to the status of their plea for a $14 billion bridge loan.

General Motors (GM, Fortune 500) and Chrysler LLC have warned that they are within weeks of running out of cash. After the Senate failed to approve a bailout package for the automakers, the Bush administration said it would consider tapping the $700 billion bailout fund Congress approved for the banks and Wall Street.

Meanwhile, the auto finance firm GMAC doubled the amount of capital it has raised, moving it closer to qualifying for much-needed federal funds. If GMAC can obtain enough funds to qualify as a bank, then it could obtain funds as a part of the $700 billion bailout bill.

Oil: Oil settled for the day down $3.54 to $40.06 a barrel, a 4 1/2-year low, after OPEC announced it will cut oil production by 2.2 million barrels a day as of Jan. 1 to boost oil prices. Crude oil prices have slid from record highs as the global economic recession has chipped away at demand for energy.

Oil prices have fallen nearly $100 a barrel since the record highs reached over the summer, and the cartel hopes that the production limit will stabilize oil prices.

The new production cut comes on top of a 2 million-barrels-a-day cut that was previously announced, bringing production levels down by 4.2 million barrels per day from September levels.

Other markets: In currency markets, the dollar fell to a 13-year low versus the yen and also weakened against the euro. The greenback rose slightly against the British pound.

COMEX gold for February was up $25.80 to $868.50 an ounce.

Gas prices rose Wednesday after breaking an 86-day streak of declines over the weekend, according to a daily survey of gas station credit-card swipes. The price of regular unleaded rose $0.6 cents to a national average of $1.667 a gallon from $1.661 on Tuesday, according to motorist group AAA. To top of page
First Published: December 17, 2008: 10:35 AM ET

Tuesday, December 16, 2008

Advantages of Using Online Forex Trading

Investments & Trading

If you want to invest in Forex then you need to know the advantages of using online Forex trading.
Earlier people had difficulty in investing Forex trading because during these days only large financial institutions were allowed to invest in Forex. There was no space for the small traders.
But due to invention of computers the doors for small investors opened and they were given a chance to invest in forex market. This type of trading is called online trading.

There are many sites that offer the facility for online trade. You can also take the benefit of stock trading. These websites are operated by forex trading companies. These companies have experts that would proper guidelines for forex trading. If you are a beginner then these experts would provide you necessary guidelines about the investment. It would assist you about the ways that are used for forex trading.

There are some sites that provide the facility for trading starter kits. But this facility would be provided only if you open an account with this site. They would provide you an opportunity to learn the different types of trading courses that would help you to earn huge profits in short duration of time. Some sites would provide simulators that help to simulate the procedure of trading in forex. They would treat you as new born babies and they would try to teach you the basic steps of forex trading.

Forex trading is open for 24hours a day. The professional forex brokers would take care of your account. They would help you to keep keen watch on the market. They would provide you assurance about the investment that you have made, also give you assurance that you have invested at the right place at the right time. Thus you can say that they would provide you necessary security.

You would not have any difficulty in operating the forex market. You would not face any problem in accessing the data and to analysis the online forex sites. They would keep on updating the data and the price of the stocks. If you want to contact your brokers then the sites have forums or online chat that can be used for contacting the authorized person. It is considered to be the fastest and the easiest method to contact the forex broker that can provide their guidelines whenever you are in need.

These sites would help you to analyze the current data. You can examine this data from your house. You don’t need to visit your broker to collect the information about the data.
If you want to collect the information about the forex then you can explore yourself. There are many websites that would provide you the necessary details about the forex market. Thus you would not have any difficulty in collecting the necessary information about forex trading. These sites would help you to select the best trader. You can select these traders by making comparison between different traders.

Article Written By J. Foley

Fed cuts rates to record low range of zero to 0.25%

Fed cuts rates to record low range of zero to 0.25%
Senior Federal Reserve official outlines scope of new programs
By Greg Robb, MarketWatch
Last update: 5:02 p.m. EST Dec. 16, 2008
Comments: 1380
WASHINGTON (MarketWatch) -- The Federal Reserve pulled out all the stops in its campaign to save the U.S. economy Tuesday, slashing interest rates to just above zero and promising to try an array of new economic measures to stimulate spending.
The central bank's Federal Open Market Committee established a target range for the federal funds rate of zero to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%.
Rates would need to be kept low "for some time," the central bank said.

'The Fed will employ all available tools to promote the resumption of sustainable economic growth.'

— Federal Reserve

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the funds rate has "hit rock bottom."
U.S. stocks leaped after the decision, with the Dow Jones Industrial Average closing up 359 points. Read Market Snapshot.
A senior Fed official told reporters that the Fed has switched tactics and will now focus on aiding credit.
The Fed has already targeted a few debt classes for assistance. The senior officials said that other classes, including below triple-AAA quality debt, may be purchased.
The official said the program was not quantitative easing as practiced by Japan in the 1990s.
While Japan simply wanted to increase the quantity of money, the Fed wants to focus on the asset side of the balance sheet.
The moves are just about as aggressive as the central bank could be on monetary policy.
The Fed gave clear signals that it has moved on to other measures beyond setting interest rates in its fight to keep the economy rolling.
Josh Shapiro, chief economist at MFR Inc., said the Fed is "petrified" about the economic outlook.
But the senior Fed official said that economists at the central bank generally are in agreement with Wall Street economists about the duration and depth of the recession.
After two quarters of very weak growth, the economy should start a slow recovery after mid-year, the official said.
The Fed statement said that inflation should continue to moderate in coming months.
The senior Fed official said that deflation, or a general price decline, was not a major risk at the moment, but that price data would be watched carefully.
"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth," the central bank pledged in its policy statement.
Going into next year, the focus of the Fed's policy will be to support financial markets and stimulate the economy "through open market operations and other measures that sustain the size of the Fed's balance sheet at a high level."
So the key will be the quantity of money in the system, not the price.

The Fed's balance sheet has risen to $2.25 trillion over the past two months from $850 billion and has made promises to spend about a $1 trillion more.
The Fed is using the money to ease strains in the market for the debt of Fannie Mae and Freddie Mac and mortgage-backed securities issued by these GSEs.
These purchases may be expanded, the Fed said.
"The FOMC is also evaluating the potential benefits of purchasing longer-term Treasury securities," the Fed said.
Some economists have questioned the necessity of buying longer-term Treasury securities, with the prices already low.
By February, the Fed is also going to begin buying credit card debt and student loans. This template could be expanded. Under this plan, the Treasury is assuming the risk of loss while the Fed is making the purchases.
Economists applauded this laser-beam approach.
Adding "$100 billion here and $100 there strategically injected into the right places" can have a big impact, said Steve Stanley, chief economist at RBS Greenwich Capital.
Other markets are clearly on the Fed's radar screen.
"The Fed will continue to consider ways of using its balance sheet to further support credit markets and economic activity," the statement said.
The senior official said that lower quality assets could be purchased.
The Fed's moves followed some of the worst economic data in decades reported in the past few days, including monthly consumer sales numbers that fell the most since 1932.
The vote to lower the fed funds rate was unanimous. End of Story
Greg Robb is a senior reporter for MarketWatch in Washington.