Business blog for you

The Pitfalls of Borrowing Money to Buy Shares.

Over the past few weeks the volatility and downward trend of the share market has caused traders and investors alike to lose very large amounts of money not to mention sleep.

For those traders who were prepared for such an eventuality, they lost very little of either. They would have lost around 5-10% whilst the average trader lost in the vicinity of around 20% if not more.

The average investor was drawn to the last “Bull Run” like moths to a flame. Having unrealistic expectations of easy money plus they are also being influenced by the media hype which is prevalent in a high flying share market.

The “Flavour of the Month” for quite a while has been Margin Loans. They are easy to set up. The paperwork is minimal as is the setting up costs. So you can be up and running in less than a . fortnight.

The average amount borrowed is usually around the $100. 000 mark for which the potential trader has to put forward a fifth. In this case $20,000. But you can buy up to the full amount of the loan i. e. $100, 000 worth of stock. This is called leverage.

Now leveraging is a two edged sword, you can make good profits but you can have big losses as well.

The average investor who decides on a margin loan as a “Sure Fire” guaranteed quick way to make money invariably has neither the experience nor the knowledge necessary to cope with a sudden downturn in the stock market when it occurs.

Using the latest downturn in the markets as an example where share prices dropped downwards drastically in the region of at least 20%. Investors who had margin loans of around $100,000 suddenly had a paper loss of $20,000

When this occurred they were placed in the dilemma of either putting in more money (This is called a Margin Call. ) or to buy more shares. In a lot of cases being borrowed to the hilt they were unable to do neither.

So their stock had to be sold at a loss which only exacerbates the problem as other traders are in the same boat having to sell their stock also. With a flood of shares hitting the markets all at once this forces share prices down even further. Causing more panic selling.

In some extreme cases investors were left with no share portfolio at all and still owed money on their margin loans. Not a nice position to be in.

So what precautions can the investor or trader employ to make sure that in the case of a downturn in the market, losses can be kept to a minimum?

The first thing to remember that the only security you have is the shares themselves. You have to maintain a margin between the amount you borrowed and the current value of the shares

This is called your” Loan to Valuation Rate” or LVR

If the market falls below your LVR you then have the choice of putting more money in or buying more shares. To bring up your LVR back again. Of course if you cannot do either then your lender will force you to sell all or part of share portfolio.

Having a diversified portfolio which covers several areas is a good idea as it is invariably one area that is hit the worst.

I personally know several traders who had only BHP/RIO in their portfolio who suffered disastrous consequences for not diversifying.

Another option is to start off with a conservative LVR in place.

A worthwhile valuable idea is to have an unused “Line of Credit” option in position. This will give you cash quickly if the need ever arises.

Lastly is of course to have “Stop Losses” (Conditional Orders. ) in place to so that you can minimise any losses to 5-10% depending on the percentage you choose. This also has the effect of locking in any profits that you may have made prior to the market downturn.

Also remember the lender also charges interest on average in the 10% area per annum. That plus brokerage has to be taken into consideration as well as capital gains tax. All of which eats into your profit margin.

So if you decide that a Margin Call is the way to go then make sure you are aware of the pitfalls that can trap the unwary investor.

Good trading!

The speed at which we are communicating is moving faster and faster, largely due to the Internet. Email, instant messaging, video conferences on laptops . . . you can send a message to someone faster now than ever before. Photo sharing is an excellent example of an activity that’s been greatly impacted by this speed of light communication. In days gone by, sharing a photo could mean anything from giving a friend a copy of a print to spending $150 on a high school yearbook. It meant both face-to-face contact – for example, sitting down with a family member and viewing a photo album – and long-distance contact, such as sending a faraway friend a handful of prints in via regular mail. Fast & easy doesn’t mean it’s less complicated Now, because of the recent rise in the number of photo sharing sites on the web sharing a photo has taken on new meaning. A lot of people still attempt to simply email photos. That can be a problem, since file sizes can clog up email inboxes and outboxes. Others send links to photo sharing sites and invite friends to view the photos. That works very well, but many sites require registration, which can be a barrier for some. Still others open their photos up for the whole world to see. These open, public viewing sites can pose real security risks for the person exposing their personal life to the world. One wrong picture or piece of information could open your life to people you don’t want to know. The paradox is that even though photo sharing has become faster and easier, it has, in some ways become more complex. The difficulty comes in choosing the way you share your photos. In the old days, your choices were limited. Today, there’s a multitude of choices. Remember, you are always in control This paradox can be seen in a variety of other ways we communicate. Remember when a house had one phone? If you do, you’ve probably got a little gray in your hair, because that was quite a while ago. But compare that thought with today, where most homes have at a minimum two phones, possibly two or three separate phone lines, and each member of the household has his or her own cell phone. Which number do you call to get a hold of whom? And if a telemarketer were to get a hold of all your numbers – look out! If you’re not careful, the improved technology can end up complicating your life. You have to really keep in mind which phone number you’re handing out, and to whom. The same thing goes for photo sharing. While it’s great that you can send photos anywhere and to anyone, it’s always best to exercise caution when sending out any kind of personal information. When you register on open social networking sites, which encourage broad sharing, be sure to change your options to private. (Unless, of course, you really want the world to see your photos. ) At sites geared more towards just sharing photos with people you really know, the options are a bit simpler. You control who sees your photos from the very start. Regardless of the photo sharing site you use, just keep in mind that technology is changing so rapidly that there will be new, better and even more exciting ways to share photos in the coming years.

I never really considered myself to be a creative type. I’m not a great writer and my sense of design leaves a lot to be desired. All it took was an important upcoming anniversary celebration, a little inspiration, and a lot of help from an online photo sharing service to get my creative juices really flowing. Let me explain. A few weeks ago, I was planning for my father’s 75th birthday bash. I got the idea to make a beautiful scrapbook, filled with a lifetime of precious memories. I even found a few photos of him when he was about two years old that would make a perfect collage. I knew that Dad would really get a big kick out of it, but I was just a bit intimidated. And to make matters worse, the photos were frayed and yellow. No amount of creative spark could brighten up these photos. A great idea was about to go sour. But then a friend of mine suggested I try one of the easy photo sharing services. And it made all the difference in the world! Right off the bat, I realized there was no better or easier way to share your photos. After uploading all my old family favorites to the site, I realized they were safe and secure forever. And I was able to get other family members, some of who lived in hundreds of miles away, to include their special photo memories in my budding scrapbook too. And it was done instantly. So I saved an enormous amount of time! But here’s the really good part. The online photo sharing site had all sorts of quick tips and suggestions on how to make my presentation come alive. In no time, I added a border here, a banner there, and –voila — I created a fantastic slide show! And here’s one more thing. I was able to add my own voice recording along with a few poignant words to add a whole new dimension to my trip down memory lane. Just search “easy photo sharing” and you’ll find a site that does audio. As for the slide show, it was big hit! Everyone shared some laughs and some tears. And Dad, tough on the outside but always the big softie, well, he cried like a baby. It was beautiful! So here’s my advice: The best way to share fun memories is online. Don’t be scared away form online photo sharing just because you’ve never used a computer or because you’re intimidated by new technology. The fact is, they do all the work for you. Just upload your photos you want to share, then use their automated sharing feature to send the link to our family or friends. And a little imagination goes a long way. Easy photo printing also makes for a thoughtful gift. You’ll be surprised how easy and how much fun it is to create a photo album or a photo story book you’ll be proud of. So throw away that old shoe box. Take down your favorite photos from the fridge. Start saving and start sharing your precious memories online. You’ll love it!

Selling common stock shares is not a difficult process, but can be expensive for someone that has no understanding of how common stock is bought or sold. Common stock shares are shares in an individual company that is sometimes called voting stock. For each share that is owned, the shareholder is entitled to one vote.
Common shares are different from preferred stock in one important way: preferred shares do not give the shareholder voting rights but all dividends issued by the company will be paid out to preferred shareholders before common shareholders.
Selling common stock shares happens everyday that the stock market is open, in fact almost all trading taking place during the trading day are common shares. For the inexperienced, selling common stock shares may sound difficult, but is usually a rather simple process.
For example, say someone received a stock certificate that gave him or her ownership of one thousand shares in a public company. If the person decided they wanted to convert the stock into cash by selling the stock, they would first need to take the stock certificate to someone licensed to sell securities.
For someone that does not plan on buying or selling in stock in the near future, his or her local bank is probably the best option. Since almost everyone has a bank account and most banks, not all, have an employee that handles investments for clients, this person is usually licensed to sell securities, another name for stocks.
All the person would need to do is take the stock certificate to their bank in which they have a bank account, ask for the investment officer and have them place the trade to sell the common stock at the current price on the open market. Once the stock clears and is delivered three days later, the money is available to the person that sold the stock.
Another option for someone that has common stock to sell is to open a brokerage account. Brokerage houses come in many shapes and sizes with boutique type houses available catering to the different needs of the many types of investors.
Unless future investments are planned, a full service, living and breathing broker is not recommended. A full service broker is very expensive and commissions for one executed trade to sell common stock can range anywhere form a percentage of the total sell or hundreds of dollars.
Some brokerage houses charge by the total amount of shares sold or may charge for each five hundred 500-share increment, or lot of common stock sold. In either case, a full service brokerage account is not recommended for a one time stock sell.
The best option for someone that wants to sell common stock is an online brokerage account. Anyone with access to a computer can open a brokerage account. Once the account is opened online, the stock certificate is then mailed or sent over night by FedEx or UPS to the online brokerage house. Commercial carriers such as FedEx or UPS are preferred since they have a better reputation for guaranteed delivery.
Once the stock certificate reaches the brokerage house, the stock certificate is then checked against the transfer agents records that issued the certificate to confirm ownership and then the stock is placed into the shareholders online trading account. Once in the account, the shareholder is free to sell the stock at anytime during market hours.
Selling common stock shares is not difficult and with easy access to online brokerage firms, it is also inexpensive.

If you have the money and if you have a choice, on which would be a better choice: a time share or a vacation home?Buying a real estate is a good investment for more and more people these days. Two popular choices are time shares and vacation homes, both in out of town and overseas locations. For each choice there are advantages and disadvantages over the other. The question is: What are they?Owning a Time ShareWe can say owning a time share is a complex form of ownership in real estate. When you own a time share you have the right to use a property at an assigned time and for a specific duration. For example you own a time share to a condominium unit in Bodrum, Turkey and your assigned time is the entire month of July. For the whole month of July, that condominium unit is yours to use, to rent out or to lend usage of. We can define simply a time share like that. There are layers of layers of complexities to it that can be somewhat confusing. But the important point is this: if you own a time share, you own only the right to use it for the time and duration assigned to you. What are the advantages of owning a time share for you? If you want to own a form of real estate without the hassle associated with it – the taxation, the maintenance costs, amongst other things – your choice may be a time share. You can just go to the place where you have your time share and have a nice holiday. You do not have to worry about the property after that. Owning a Vacation HomeOwning a vacation home isn’t different from owning a second home. If you want you can stay there during your holiday, or you can stay there for good if you want to. Just like with owning any type of home, there are some disadvantages of responsibilities such as maintaining it, paying for its taxation, and others. Your responsibilities do not start or end with your stay there. But of course there are some advantages of owning a vacation home, one of them is in the fact that you actually own the property, not just the right to use it. The vacation home is yours to do with as you wish. Your vacation home may be a source of finance for you. If you buy a vacation home which is located in a popular tourist destination, you can easily rent it to tourists whenever you are not using it. You can hire a real estate firm to manage the property for you. Of course when you want to use it, you can simply make reservations for yourself. What is the right choice for you, a time share or a vacation home? Eventually, it depends on you.

Quite surprising that till now a lot of people still do not know the basic meaning and the difference between the ”Stock Market And Shares” while some people believe that this above forms of transactions belongs to the eminent/aristocratic class of people in the society. Even till this modern times yet some people are still lacking behind of multiple opportunities in the Stocks market, Shares, Equity, Bonds, Futures, and other financial/security form of transactions.
Security transactions has proven it self as a unique kind of transaction, it is the only transaction that does not require any professionalism or pro-active to engage in the business. Here are the true meaning and differences between ”Stock Market And Shares”
There is no need of going back into the early days of the formation of stock market and how the knowledge of stock transactions came about, since that will delude the prompt detail of the misconceptions in the minds of almost every individual, the point here is to fully detail the differences between the stock market and that of the shares.

Shares: Shares is just quite simple as fusing into combined business with some one, you contribute money to some one in order to be part of his business, by doing so, you are indirectly buying part of the business, it is usually in the form of Initial Public Offer {IPO}. The company will then use your money for more purchase or for more productions. Then the more purchase or the more productions the company made the more profit the company makes. Then at the end of the agreed business period, the profits that is realised in the business will be shared according to every individuals financial access point of contribution towards the company. The profits will be shared accordingly in the form of ”Shares” and the company might decide to compensate its members who contributed for the money that was used in the companys business transactions as a way of saying thank you to the members in the form ”Dividends” while there might be other benefits as well. Then, after the shares/profits and the dividend from the company, if you are satisfied with the profits you made from the company as well as their business management, you can still invest your money back again as a way of going long for more better shares/profits and dividends at the end of the company business transactions. Personally, i like this form of transaction quite alot because it will give you time and access to do many other things while you still make money or percentage in the business you do not suffer or stress your self about, the only sweat you contributed is just your capital invented.

The Stock Market: The Sock market is mostly where you will be needing the full services of brokerage in order to profit from the stock market with out losing your capital investment. Stock market is all about combinations of differents markets, companies, products, services, as well as organisations. This is inform of all aspects of different organisations coming together to use ones products or services to harness on the others. Stock market is almost the largest trading market in the world today with many trillions and trillions of dollars traded every single day.
Comodities and services are listed in the stock trading floor in the form of stocks, and when you purchase the stock and hold it into your portfolio it becomes
”Equity” you can hold it for as long as you want, as much as sell it back into stock as short as you want.
This form or transaction is significantly risky, because the market itself is very volatile, it fluctuates ups and downs. It doesnt have a perminent steady quote, it can go up as well as going down at any point of time. To profit from this form of transactions you need a strong broker who will be a spy to the ups and downs in the stocks directions.

In this high-tech age, where the communication pattern keeps on changing rapidly, online video sharing tend to become the latest obsession among all age groups. With the introduction of watching videos on the web, it has become an amazing activity for the people, who can watch videos without any hassles and that too at crystal clear video and sound quality. In this regard, there are uncountable websites available on the Internet which have boast of amazing collection and they also help you to share your own videos without any charge. One of the main reasons behind the success of online videos is that the emergence of high-end technologies such as Internet, high speed computers and wireless broadband connections. The easy-to-use features of this high-end activity further makes it very simple for the people to share online videos and files at ease. The new tend of online video sharing has also become a common activity among the all age groups with the support of user-friendly interfaces. This advanced and completely Internet based facility allows the users to upload video files and share still pictures with other online members and that too absolutely free of cost. This new technique further makes the activity of downloading and uploading video files very easy. There are many categories available on the sites, such as funny clips, fashion, enjoyment, sports etc. , among which people can choose the suitable category for share their videos. These video categories help the users to find best and watchable videos without any hassles. Now, we are living in a technologically advanced world where most of the things depend on the Internet. There are many websites on the Internet that let the users share videos online quite easily and the users can also play them on their iPods, mobile phones, computers and other portable media players. The Internet is flooded with various Websites which permit the users to upload and share their own video files with the help of Internet. The several social networking websites enable the users to upload video without any hassles. Nowadays, the online video sharing websites are in huge demand. These websites permit you to upload and share your own video files with your friends and beloved ones.

Here’s the top ten list of online tools and resources beginning from online photo editing to powerful photo search engines. I found some site list when access http://www. softwarefreedown. com,and share summary for you Flickrhttp://www. flickr. com/certainly one the best online photo management and sharing application in the world. It helps people make their photos available to the people who matter to them. Flickr gets photos into and out of the system in as many ways as possible: from the web, from mobile devices, from the users’ home computers and from whatever software they are using to manage their photos. It enables new ways of organizing photos. In Flickr, you can give your friends, family, and other contacts permission to organize your photos – not just to add comments, but also notes and tags. With Flickr you can create prints, calling cards, photo-books, slideshow-DVDs, postage stamps, and much more. Picasahttp://picasa. google. com/ a free software download from Google that helps you locate and organize all the photos on your computer, edit and add effects to your photos, share your photos with others through email, prints and on the web. It is fast, easy and free. Slidesharehttp://www. slideshare. net/Some of the things you can do on SlideShare – Embed slideshows into your own blog or website. – Share slideshows publicly or privately. There are several ways to share privately. – Synch audio to your slides. – Market your own event on slideshare. – Join groups to connect with SlideShare members who share your interests – Download the original fileZooomrhttp://www. zooomr. com/you can share, search, store, sort and sell your photos onlineSnappageshttp://www. snappages. com/create really easy to use online applications. The online world can be a frustrating one for those who want to use the web for a lot of things but are scared away by how complicated it all seems. It’s our belief that most people don’t want to spend a lot of time or effort trying to figure out how to use an application just to perform what should be a simple task. A good application should handle all the things you don’t want to think about, so you only have to worry about the stuff you do care about. Zoom and Gohttp://www. zoomandgo. com/inspiring travelers about where to go, what to see, what to do and where to stay based on the experiences of other travelers or on the recommendations from locals around the world. Sharing your travel experiencesClickfriends http://www. clickfriends. com/makes it easy to upload, organize and share your photos online. Create your free account and join the photo-sharing fun. It offers to create unlimited albums, upload you photos to each album, add titles, caption and description to your photos. DPhoto http://www. dphoto. com/share your photos with family and friends in your own online gallery, while also creating a secure backup of all your photos. A free account allows you to store 100 photos. For $7 per month you can store an unlimited number of photos. Photobuckethttp://photobucket. com/Photobucket is the premier site on the Internet for uploading, sharing, linking and finding photos, videos and graphics. Your free Photobucket account can store thousands of photos and hours of video. Imageshackhttp://imageshack. us/It is designed for you to share digital pictures with friends, post images on message and bulletin boards and blogs. You can also hot link images from your personal website or eBay auctions.

Most internet marketing websites nowadays are hosted on a shared hosting server account. A dedicated server is the best form of hosting on the market but it is still expensive for the average internet marketer -price starts around $40/month. A much cheaper alternative to dedicated server is a virtual private server -VPS. A dedicated server is dearer because all the costs of the hardware is only shared by one person compared with VPS where there can be 10 or more customers sharing the resources.
VPS is in fact a mix between a dedicated server and a shared hosting account. With a Virtual Private Server you still share system resources like the CPU and memory with other users. VPS acts like a dedicated server because the file system is set up in such a way that users cannot tell that the system is being shared. Each VPS can be rebooted independently and executes exactly like a dedicated server for its users and applications. It has it’s own root access, users, IP addresses, memory, processes, files, applications, system libraries and configuration files.
Virtual private server is much more powerful than the traditional shared system. VPS is more secure unlike shared server where one can actually figure whose site is hosted on the server. The major drawback of shared hosting is that, if one of the website goes down because of a bug in the system, there is a high probability that all other websites on shared hosting account will also go down. This will not happen on a Virtual Private Server since each websites are independent of each other.
There are limitations to having shared hosting services and the biggest one is you cannot usually compile or install any script or software. Many shared hosting company nowadays put limitations on number and frequency of cron jobs running. Some hosting companies have even banned popular script like RSS2Blog because shared hosting cannot cope with server resources needed for the software. Such limitations do not exist with VPS and dedicated servers – the users are in total control of the server.
Virtuozzo control panel, allows easy management of the virtual private server. You can reboot your server at one click.
A few years ago, Virtual private server used to be much more expensive than shared hosting. Nowadays you can even find VPS hosting cheaper than shared hosting. VPS hosting now starts as low as $12 per month.

When you are looking at a company or business purchase, for a buyer the answer will usually be that it will be simpler quicker and more cost effective to buy the assets of a business rather than the shares itself. For the seller it will usually be more tax effective to sell the shares in the business. The reasons for this view are outlined below. In our opinion, selling the business assets rather than the shares (i. e. a business sale) will usually result in quicker more cost-effective deals because the rules on financial assistance do not apply to asset sales (see below) and the buyer can be more selective about which assets (and liabilities) the buyer takes on.

Legal Effect

Where a buyer acquires shares in the Target, the accrued liabilities of the Target remain in those shares, hence extensive warranties and disclosures are sought by the buyer to ensure as far as possible the legal position of the buyer. With asset purchases, the liability of the Target remains in the hands of the seller and the buyer has greater scope to cherry pick which assets she or he wishes to acquire. In practice, a “clean break” from the business is never generally available for the seller, as the buyer will very often want some post completion warranties from the seller, regardless of which structure is used to acquire the business.

Consideration

With company sales (share sales), the purchase monies go into the hands of the individual shareholders. Where an asset sale takes place the sale proceeds go into the hands of the Target. Clearly different tax considerations apply depending on which scenario is adopted.

Title

Where a share sale takes place then all the assets owned by the company remain with the company, and transfer of ownership in the assets is not an issue. Where the deal is structured as an asset sale, the transfer of assets can be more complicated, particularly where third party consents are required (typically for transfers of leases) and where there are employees (due to the complex rules (Transfer of Undertaking Protection of Employment Regulations – “the TUPE rules”) where there is a sale of a going concern. Where delays arise, solutions can be put in place to ensure the ownership of the asset is ultimately transferred to the buyer. The extent to which this is a workable solution will depend on how fundamental the relevant asset is to the business and the extent to which buyer and seller are willing to work together to develop a workable solution.

Employees

If the buyer wishes to carry on the business in succession to the seller, then as a matter of practicality it makes little difference whether a share sale or asset sale takes place. In both cases, the buyer “inherits” the employees and their accrued rights (under the TUPE rules).

If an asset sale is taking place with no intention to carry on the business then this situation would need to be covered by warranties to protect both buyer and seller from potential employee claims.

Tax

Stamp duty

Duty payable on share transfers is currently 0. 5%. Duty payable on the transfer of certain assets including freehold or leasehold property can currently go up to 4%.

Capital Gains Tax – Share Sale By Individual Shareholders

The issue to bear in mind here is that the seller receives the consideration directly for her or his shares.

For sellers the biggest tax benefit they have is likely to be the dramatic effect of taper relief. This can reduce capital gains tax liability to under 25% after two years ownership of a “qualifying asset”, the most important of these being certain shareholdings in unquoted companies, and assets owned by an individual and used in the individuals company (provided the shares in that company meet certain restricted ownership requirements).

Corporation Tax – Asset Sale By Company

There are two tax points where the company sells its assets. Firstly the company may suffer a capital gains tax charge when disposing of the relevant asset to the buyer. Secondly the remaining consideration held the company needs to get to the shareholders. If the net proceeds are distributed by winding up the company the shareholders are treated as disposing of their shares for capital gains tax purposes. If the proceeds are distributed as a dividend involves further tax liability both for the company and the individual receiving the dividend.

Financial Assistance

A company may not give direct or indirect financial assistance to a person acquiring the shares in that company. Typically this arises where a buyer wants to acquire the shares in a company and the buyer finances the acquisition by arranging for the company to charge its assets to a bank fund the share purchase. There is a mechanism for allowing a company to give this assistance but it can be costly and time consuming.

The rules on financial assistance do not apply to asset sales.

http://www. kaltons. co. uk