Best investments this year

The stock market should present us with a wide variety of NEW hot stocks in 2009. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That's why it's very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way tomake money in the stock market, especially on uncertain times like these.

You don't necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

Money Market Funds vs Accounts

Money market accounts are bank alternatives to money market mutual funds. What’s the difference? The main factors are risk and choices. Let’s do a comparison of money market funds vs. money market accounts so you can make the best choice.

Money Market Accounts

Money market accounts are your plain-vanilla option. They’re what you’ll find at a bank. Money market accounts should pay you a nice annual percentage yield (APY) while keeping your money safe.

Money Market Funds

Money market funds are more complex – you’ll find more options and you’ll likely earn a slightly higher yield than you’d get from a money market account. Some examples of money market fund options are:

• US Treasury backed money market funds
• US government and agency backed money market funds
• Municipal money market funds
• Local municipal money market funds
• Socially responsible money market funds

The options listed above allow an investor to choose the money market instruments used in the fund. Some people are only comfortable with securities backed by the US government. Likewise, some people use municipal money market funds in order to earn tax-free income.

Safety First

For some investors, safety is more important than high returns. If you agree, you should stick with money market accounts. Money market accounts offered by banks are typically FDIC insured (although you should check with your bank and the FDIC for details).

If money market accounts are FDIC insured, it’s only fair that they would offer a slightly lower rate than a money market fund.

Money Market Account or Money Market Fund?

Which should you use? It depends on what you want. Money market accounts have their place, as do funds.

The main thing is to consider your needs. If you don’t need the options available from funds, just use a money market account. You should get a competitive return from a money market account, and you can sleep at night knowing that you’re taking less risk.

In addition, you should consider how much time and energy you’re willing to invest. Money market accounts will be easier to find at standard banks. For a money market fund, you may have to open an account with a brokerage firm or mutual fund company.

Money Market Funds udercover!

Money market funds are a popular cash management tool. Before you use money market funds, make sure you know what they are, how they work, and what risks you might be taking.

What are Money Market Funds

Money market funds are mutual funds that invest in the “money markets”. If you imagine that people buy and sell stocks in the stock market, then you can see how people buy and sell money in the money markets. What does it mean to buy or sell money? It means that you borrow or loan money, respectively.

Similar to your deposit accounts at the bank, money market funds take your money and invest it. Then, they pay a portion of their earnings to you in the form of dividends. Money market funds usually pay a monthly dividend, but there are some alternatives out there.

What do Money Market Funds Invest In?

These funds invest in short term instruments that mature in less than 13 months – at a maximum. By keeping a short time-frame, these funds attempt to reduce risk. In fact, the SEC says that the average maturity of all the investments in a money market fund must be less than 90 days. The longer you loan money to somebody, the greater the chance that something will happen and they won’t be able to pay you back.

Typical investments inside a money market fund might be US Treasury issues, short-term corporate paper, and CD’s.

What Risks am I Taking in Money Market Funds?

There are at least three risks that we should highlight.

First, a money market fund is technically a security. The fund managers attempt to keep the share price constant at $1/share. However, there is no guarantee that the share price will stay at $1/share. If the share price goes down, you can lose some or all of your principal. The US Securities and Exchange Commission notes that “While investor losses in money market funds have been rare, they are possible”. In return for this risk, you should earn a greater return on your cash than you’d expect from an FDIC insured savings account (money market funds are not FDIC insured).

Next, money market fund rates are variable. In other words, you don’t know how much you’ll earn on your investment next month. The rate could go up or down. If it goes up, that may be a good thing. However, if it goes down and you earn less than you expected, you can end up needing more cash.

A final risk you’re taking with money market funds has to do with inflation. Because money market funds are considered to be safer than other investments like stocks, long term average returns on money market funds tends to be less than long term average returns on riskier investments. Over long periods of time, inflation can eat away at your returns.

Why Would I Use Money Market Funds?

Investors who want a decent return from a relatively safe investment use money market funds. The investments are typically liquid, meaning you can usually get your money out within a few business days. You can also take advantage of rising interest rates by keeping your money in an investment that will adjust to the markets.

A lot of institutions allow you to write checks that draw from a money market fund. Therefore, you get the advantages of dividend earnings as well as easy access to your cash. Make sure you ask what restrictions or fees your institution has.

Where Can I Get a Money Market Fund?

When it comes to money market funds, you have choices. They are easy to find at brokerage houses and mutual fund companies – your free cash is sometimes swept into a money market fund automatically. More recently, banks are offering money market funds to their customers.

Where Can I Learn More About Money Market Funds?

The best place to find out about a money market fund is the fund's prospectus. You should always read one of these before buying any fund, and you can really learn a lot by reading the prospectus from several different funds.