What are the Pros and Cons of Home Ownership.

Home is where the heart is. So went the adage. It has always been drilled into our brain that growing up and buying a home was the smartest financial move ever. In fact, buying a home was and is considered as a very good investment opportunity. Sounds too good to be true, right?  Or is it?

Let us look at the pros and cons of home ownership.

  1. Yale economist and Nobel Prize winner Robert Shiller debates about the feasibility of accepting home buying as an investment. He says, that the returns are just too small and that the premise of real estate appreciation does not always stand true. Calculated over the past 100 years, home prices have grown at a measly rate of 0.3%, after adjusted for inflation. Stocks and bonds have given, over the same period, an annual return of 6.5%. This difference is just big to ignore.
  2. Home buying should be kept as just that. An asset to protect you and your family against the vagaries of nature. As an investment vehicle, it simply does not stand up to the other instruments available in the market. What blunder most do is to make up more than 75% of their investment based on the price of their home. There is an inherent risk because of the lack of diversification.
  3. Owning a home is an absolute matter of pride. And beyond that, a recognition of all the hard work you have put in to buy that property. It is also a sign of prosperity.
  4. Owning a home is an excellent tax saver.
  5. The question of equity comes into play. Rent paid is gone forever. It never builds up your financial equity. However, with a mortgage payment, equity is built over a period in time.
  6. Owning home lets you beat inflation, even though by a very small percentage. According to Prof. Karl Case, long-term housing did have its moment when it went a wee bit ahead of inflation. Now, if you are young and thinking 30 to 40 years ahead, it is a very valuable insurance against inflation. Not a mean task at all.
  7. Contradicting to what I had said in point 1, the house is a risk capital. Again, as mentioned earlier, a home should never be viewed as a way to get rich, because it simply does not work that way. However, equity in a home can always be linked to your portfolio.

Home owning does have its fair share of pros and cons.  It totally depends on the individual and his or hers financial situations. But as the line goes, “Home sweet home”.

Saving Now Saves You Tomorrow

At 22 you are the king of the world. Nothing seems to bother you. You are invincible, raring to go and virtually unstoppable. Now pause and take a few steps back. This age, rage, and energy will not last forever. A few years down the line, when you slow down a bit, wisdom will suggest that the future holds no surprises, except old age and financial insecurity.

At 22, your effort to financial security begins.

At first, this might seem to be a scary proposition with too much information floating around, but there is enough reason

  1. Don’t get flustered with all that has been told to you in the form advice. Take an informed decision based on research. All those numbers around mean nothing if looked into properly.
  2. Start saving a little and more often. Start putting that in 401(k) and see it slowly rise.
  3. If you think the social security net will be good enough for you, think again. It is estimated that by 2037, social security benefit requirements will outstrip contributions. As a result of which, it would get difficult for you to sustain after retirement.
  4. The 401(k) is a reliable ally at this age. Start using it wisely. The money that is invested here is absolutely tax-free. The tax will only be deducted when you take it out. So this instrument is quite handy for a 22-year-old and needs to be made use to its fullest.
  5. The IRAs too have loads of benefits to make use of. It is an Individual Retirement Arrangement and is virtually tax-free, both on federal taxes, state and local ones. Of course, there are riders involved, but at this age, that should be bothersome.
  6. Now is the time to be aggressive. At 22, worrying about your retirement, investment becomes an art. Remember, you still have another 20 years or 30 years to go before you hang your boots up. You can take a risk now. Look out for stocks and bonds. With age, you can slowly change tracks and become conservative. Now is not the time.
  7. There are nontraditional ways to invest too. Heard about ETF (Exchange Traded Funds). They can be bought and sold at any time and is just a regular stock in disguise.
  8. Last but not the least. Stop worrying, start saving. That is the only way forward.

Graphic: Changing Face of America by Pew Research Center


The chart shows the present and future fluctuations in racial populations in the United States of America from 1960 to 2060. Much of the information presented in this chart is hypothetical, or projections, because some of the time periods listed, example the year 2020 or 2030 have not happened yet.

The chart shows that Caucasians are experiencing a decline in numbers at an average rate of twenty percent every forty years. Despite the decline, they are still the most populous race of the five listed.

Negroids are the second largest race, however their growth is almost level, with blacks making about ten percent of the population in 1960s and about 13 percent of the population in the year 2060.

On the other hand, the population of Hispanics is surging and is expected to double in the next fifteen years.

Asians and ‘Other’ make up a marginal part of the population, and although both sectors are experiencing growth, it is minuscule.

Grpahic: Number of IPO’s With 100%+ First Day Returns by Year

This chart shows you the first day returns years at a time starting with the year 1999 through 2014.

Number of IPO's With 100%+ First Day Returns by Year

You can see that in 1999 and the year 2000 IPO’s did very well, compared to the year 2006 and 2014. The year 2014 which compared to the previous years results were not as good and showing after the year 2000 IPO’s have never really been the same.

The percent rating is a lot lower now and companies are struggling to compete in this new market and succeeded but showing that some companies do succeeded but its much lower percentage then in the latter years.

Best Free Technical Analysis Charting Software for Investing

The old saying goes “technical analysis is a great way to part traders from their money.” However to some it is still a helpful trend to see market trends and to hopefully buy and invest while it’s still on it’s way up and not when a stock is about to drop in price. Technical analysis has also been called a great tool to see historically where you should have bought and sold. As a predictor though it is often faulty at best and of course if it worked will then everyone would be rich by now.

With that said technical analysis increases your probability of seeing where the market is headed. It provides you some background into how an asset is doing and what might come next and is far better than going into an investment blind.

When you using technical analysis software “uptrends” are marked by seeing at least three successive rising troughs and peaks. While “downtrends” occur when you have at least three successive troughs and peaks.

The four best free technical analysis charting software for investing are below.

EclipseTrader: (http://www.eclipsetrader.org)

eclipse trader
EclipseTrader is an ​Eclipse Rich Client Platform (RCP) application focused on the building of an online stock trading system. featuring shares pricing watch, intraday and history charts with technical analysis indicators, level II/market depth view, news watching, and integrated trading.

Main features of EclipseTrader include:

  • Realtime Quotes
  • Trading Accounts Management
  • Integrated Trading/li>
  • Intraday Charts
  • History Charts
  • Technical Analisys Indicators
  • Price Patterns Detection
  • Financial News
  • Level II (Book) Market Data

 

Qtstalker: (http://qtstalker.sourceforge.net/)

Qtstalker

Qtstalker is a user friendly Technical Analysis package for GNU/Linux (and hence other Unix-like systems). Similar to commercial wares such as Metastock, Supercharts and Tradestation. Keeps to a lean, simple design for speed, portability, and low resource usage. Because it uses a plugin model, Qtstalker can easily be extended.

Main features of Qtstalker include:

  • A point-and-click object-oriented graphical user interface.
  • Chart types include line, bar and candlestick.
  • Customizable colors. Logarithmic and linear arithmetic scaling. Scale to screen.
  • Indicators plugins include MACD, MAs, Bollinger Bands, RSI, and dozens more. Provides access to the TA-Lib library of common functions.
  • A simple scripting facility to create custom indicators. This powerfully enables combination of different plots in one indicator and combining of other indicators and calculations.
  • A special indicator “ExScript” enables external scripts to pass indicator data in.
  • An “Indicator Summary” tool shows a table of all indicator parameters from all active indicators. It also writes the data to XML output for use by external programs.
  • Chart drawing objects: trendlines, buy/sell arrows, horizontal and vertical lines, Fibonacci retracement lines, text and cycles.
  • Quote plugins download data from online sources such as Yahoo, CME, NYBOT.
  • Data import plugins for plain-text CSV files.
  • The “Plugin” architecture for quotes and indicators enables easy future extensibility.
  • Minute, daily, weekly and monthly chart compression options.
  • Various data classes to support for investment types such as stocks, futures, indices, ratios and spreads.
  • A back testing function allowing indicator performance tests using actual trading data.
  • A very basic portfolio manager. Good for tracking open positions. (Suggestions welcome.)
  • A Scanner that can scan the qtstalker database for charts that meet a user defined criteria.
  • A paper trading mode enabling users to practice trading without risking capital.

Free Chart Geany: (http://freechartgeany.sourceforge.net/)

Chart Geany Logo

Free Chart Geany is the free and open source edition of Chart Geany, a commercial solution for market technical analysis and charting.

Main features of Free Chart Geany include:

  • Support for major technical analysis indicators like: Simple Moving Average, Exponential Moving Average, MACD, Relative Strength Index,  Bollinger Bands and Parabolic SAR.
  • Support for various Comma Separated Values  (CSV) formats like Metastock 7, Metastock 8, AMI Broker, Yahoo Finance, Google Finance and Standard CSV.
  • Support for various drawing and text objects like Labels, Trailing Text, Horizontal Lines, Vertical Lines, Trend Lines and Fibonacci Retracements.
  • Line, Bar, Candle and Trend Candle (Heikin-Ashi) charts.
  • Linear or semi-logarithmic price scaling.
  • Zoom In and Zoom out.
  • Time-frames: Day, Week, Month and Year.
  • One click screen shots for charts.
  • Spreadsheet-like data manager.
  • Single file local storage.  You can work offline if needed.
  • Self-contained software, independent from other software back-ends like Java Virtual Machine or .NET Framework.
  • Easy download of quotes from Yahoo Finance or Google Finance.
  • Free Chart Geany is a tab based application. You can manage the charts the same way you manage the pages of your web browser.

AIOTrade: (http://aiotrade.com/)

AIOTrade

AIOTrade (former Humai Trader) is a free, open source (under the terms of BSD license) stock technical analysis platform with a pluggable architecture that is ideal for extensions such as indicators and charts. It’s built on pure java.

Main features of AIOTrade include:

  • Pull stock price from Yahoo
  • Runs on your PC
  • Is built on Java

Let us know if you have any other suggestions for free technical analysis charting software for investing in the comments section below.