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Investing: Business Appraisal

Investing in a stock is like buying a business. Unfortunately, most investors either don’t understand this principal or are merely looking for quick and easy money. In appraising businesses, there are three main approaches; market, asset and income.

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Buying Platinum Jewelry As an Investment

Investing in a precious metal like platinum can be a good long-term hedge against the volatility of the stock market, and there are many ways to invest in it. One of the best ways is to buy jewelry made from pure platinum. This allows you to hold a valuable commodity as well as wear a beautiful piece of jewelry – sort of like having your cake and eating it too!

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Constant Value Investing

A recommended investment strategy is that of maintaining a constant value for the stock (or option) that you purchase. For example, you buy 1000 shares of ABC Corp. for 25 per share. That is an initial value (and constant value) of $25000. At the same time you will commit 10% ($2500) cash as a reserve to buy more later if needed. Your objective now is to keep your constant of $25000 in ABC Corp. You will monitor its price each day and adjust your position in ABC Corp. to keep it value at $25000. If it goes up enough that you can sell 100 shares and still have a value of $25000 in the stock, sell 100 shares. If it goes down enough that you need to buy 100 shares to get the value back up to $25000, buy 100 shares. You may do this in both directions several times while you hold the stock. The effect this produces is that you are always selling while the price is up and buying while the price is down. Always buy and sell stock in lots of 100 shares (and options in lots of 2). This will allow you to profit from a 10% move in prices. You will continue to monitor the value each day while you hold the stock and make an adjustment when necessary.

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