Actually, young people SHOULD invest in their 401(k) plans

Business Insider recently posted a video in which author James Altucher argued that young people should avoid 401(k) plans, and instead focus on "investing in themselves."

This might not, in fact, be the best advice for people in their twenties and thirties who want to eventually retire.

Jack Otter wrote a rebuttal in Barron's against Altucher's comments that points out several problems with the advice for young people to not invest in a retirement plan.

One of Otter's observations stands out as by far the most important issue with Altucher's argument, and as the biggest reason why you should start saving early: compound interest.

The earlier you begin saving for retirement, the more you can take advantage of compounding. The money that you start saving in your twenties will start accruing interest, and then that interest will accrue interest of its own, leading to an exponential growth in the size of your account.

To see why it's a good idea to start saving in your 20s, consider the following thought experiment.

We have three investors who take different approaches to retirement saving:
Our first investor starts saving $300 per month at the age of 25
The second follows Altucher's advice, waits ten years, and starts saving $300 per month at 35
The third investor waits even longer and starts saving at 40, but in order to try to catch up, puts $600 into her account each month

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Practical Ways of Doing Day Trading

Analyze, Wait, Watch and then Trade

This sentence looks time consuming like analyze, wait, watch and then trade when to do all this and they to get profit?
Answer is - For newcomers it may take an hour and for experienced trades it may takes seconds or minutes.

- First analyze the market and then particular share - It is very important to know how the entire market is going to be today before start trading.
- Check out whether the market is going to be Bullish, Bearish or going to trade in very narrow range.
- Check out how American markets have closed at yesterday night, how Asian markets are trading in the morning (they open before Indian markets)

Once you get the knowledge how the market is going to move (it is totally acceptable that it is not possible to judge it 100% accurate but you should have at least 50 to 70% knowledge) then act accordingly.

Always trade in the market direction.
In bullish trend - buy and then sell bullish shares
In bearish trend - Short sell and then buy bearish shares
In very narrow range trading - Wait for right opportunity and then enter into trade. “Every day is not trading day”.

It is important to know the status of American markets because mostly it has been observed that based on American markets Asian markets open in the morning at 8.30 am and finally Indian markets open at 9:00 am.

Mostly (80 to 90%) it has been observed that Indian markets follow global markets.
American indices are NASDAQ and DOW.
Important Asian markets are Nikkei, HangSeng, Taiwan etc

At afternoon 1.30 pm European markets open and mostly it has been observed that our Indian markets reacts to European markets.

For example - If European markets open in negative then there are chances that our Indian market may also move some downside (if already Red then further downtrend will continue and if in Green then may some pressure on upper side)
If European markets open in Green then it is expected that Indian markets will recover (if in Red) and if already in green then continue their upward journey.

Getting Started in Share Market Trading. Things you should know

It is very interesting to invest in shares, though most of the people would like to start with small money.

First of all, you need to know a little bit in detail about the stock market, then about the shares and the mode of their trading. What are the risks involved and how to be smart in dealing with shares?

Stock Market – It is the place where the shares of listed companies are bought and sold. In India, you have BSE and NSE as two big stock exchanges.

Shares are bought and sold by you and me only through approved brokers.

Approved brokers are mostly banks like the ICICI, HDFC, IDBI, UTI Bank, SHCI, are to name a few.

Mutual Funds VS Stock Market

There are many people who have got the misconception that mutual fund and stock market are the same. So there is a big confusion between the two. So, we will discuss mutual fund vs stock market. But before discussing the two terms, you should know that the risk involved in the Indian stock market is much higher than the risk that is involved in the mutual fund.

What are mutual funds?
Mutual funds are not guaranteed by any government agency. The investor invests in the mutual fund and the money is then invested in stocks, securities, bonds…etc. There are people who invest in the mutual fund rather than stock market as they think that mutual funds are less risky. There are many mutual funds that are available which can give you good returns in a short span of time. So it is you who need to choose which mutual funds you wish to go for.

How does RBI's credit policy impact you?

A few days ago, the Reserve Bank of India (RBI) announced the credit policy.

The RBI uses the credit policy to signal what it wants banks to do.

In the recent policy, repo rate — the rate at which RBI lends overnight to banks — was raised 0.25% or by 25 basis points to 5.75% p.a., and the reverse repo rate — the rate at which RBI absorbs the surplus overnight funds from banks — was hiked by 50 basis points to 4.50% p.a.

Overnight funds with banks
So, as you freely deposit and withdraw money on a daily basis, your bank needs to ensure that it earns money on your deposits , especially as they now pay you interest too on a daily basis.

If no other bank wants to borrow money in the inter-bank call money market, your bank will invest these funds with the RBI and earn 4.5% p.a. Obviously they will lend to another bank at a higher rate than that as, for the other bank, that would be cheaper than borrowing from the RBI at 5.75% p.a. (repo rate).

GOLDEN RULES FOR TRADING

Divide your Risk Capital in 10 Equal Parts.

As part of the Successful money management, it is always advised to divide your Risk Capital (which you can afford to lose) into 10 equal Parts and at any given time none of your Single Trade should have more than 3 parts of your capital in it even if you are in a winning position. At the same time always keep some spare money for any Buying Opportunity, which may come any time.

Trade ONLY in active & high Volume Stocks/ Futures.

Many Traders get stuck with stocks for want of liquidity. Always rely upon Stocks which have reasonably high volume over a period of time. High Volume are always advised for easy Entry, Exit and Stop Loss. In low volume stocks the spread is too high and chance of Stop Loss limit getting failed is too high as there would be no Buyer or seller at your Stop Loss Level.