by Kyle Marino

Earlier we wrote an introduction into trading digital currency and Bitcoin (BTC). One of the most important parts of trading and investing, in general, is knowing the risks involved. When trading virtual currency, it is especially crucial to choose the right exchange, follow relevant world events and understanding where and how to appropriately store your digital money.

Trading Digital Currency and Government Regulation

As was mentioned before, virtual currencies are not recognized or regulated directly by governments. This had led to some recent clashes; the most notable with the US government.

Just last week a major digital currency exchange system, Liberty Reserve, was shut down. Its owners were charged with money laundering for failing to comply with the Know Your Customer (KYC) and other Anti-Money Laundering (AML) regulations regarding the nature of the transactions into their currency. Investigators claimed that they were able to create and utilize accounts with bogus names. Prosecutors claimed the service was mainly being used anonymously to conduct criminal activities.

Liberty Reserve was a different type of digital currency trading system than Bitcoin in that it’s ledgers were centralized. The trading between US dollars or Euros were performed by external exchanges and not by the reserve itself. These exchangers charged a high level fee to exchange in and out of the Liberty Reserve system. Being that these internal transactions could be sent completely anonymous, those looking to conceal and launder the proceeds of illegal activities would be willing to pay the excessive internal and external exchanger charges.

Bitcoin has recently suffered dissimilar setbacks in the regulation of its largest exchanges. In the past month, the largest Bitcoin exchange MtGox had its US accounts seized because the owner failed to declare that he was operating a Money Services Business (MSB). The exchange continues to operate, but it is difficult for Americans to retrieve their deposits in dollars instead of Bitcoin.

Bitcoin and newer cryptocurrencies don’t suffer from many of the same problems as Liberty Reserve because the currency itself is decentralized much like modern P2P (Peer to Peer) filesharing clients. It is also much easier to exchange between these coin and fiat currencies as the fees are much lower than bank wires or paypal. Finally, all transaction records are public and can be traced back, giving the so there is more of an argument to use Bitcoin for legitimate purchases.

Staying Secure While Trading Digital Currency

One of the consistent ongoing threats to using a digital currency is the threat of losing an investment to hackers. Bitcoin has proven itself very resilient to all hacking attempts on the currency. Since 2008 there has been no way to counterfeit Bitcoin and no one has managed to spend the same coin twice. This is a major reason the value has been so resilient to other negative news.

While the currency itself is secure, the exchanges have proven to be anything but secure. Nearly every major exchange has experienced theft of some amount of Bitcoin either through an internal security breach by a disgruntled ex-employee or through outright hacking attempts by various groups. As Bitcoin can’t be charged back, there is no way to “freeze” this money. The best attempts out there are to trace its public record of transactions and try to block stolen Bitcoin from trading on large exchanges, much like the US government can flag serial number ranges on paper money.

Another attack on the exchanges has been via a Distributed Denial of Service (DDOS) attack, where a hacker controls a large number of compromised computers and floods the exchange with various commands and requests. The exchange becomes bogged down and trades begin to lag significantly. This makes it difficult for the order book to fill up and the spreads increase. In the most recent significant price drop hackers were able to manipulate the perceived value of Bitcoin by stalling the major exchanges and causing a price drop, then ceasing the attacks and letting the value rise again.

For end-users of virtual currency it is advised to keep a “cold copy” of their digital wallet encrypted in a USB drive or burned to a CD. Virtual currency is most vulnerable when stored at a third-party or kept accessible by a internet connection. Loss of personal funds usually happens in one of two ways:

• A local copy of a Bitcoin wallet gets destroyed by a failing computer or deleted by user error, the coins are not recoverable.
• Coins are stolen through a trojan and/or phishing attack on the system. This usually happens on Windows but can happen on other OS by using outdated Java. Once the coins are stolen, again it may be possible to trace, but unlikely to ever recover.

There have indeed been cases in the past year where some users lost BTC wallets worth over $100,000 USD due to poor security practices. Phishing attacks can also rob users of funds stored in third-party wallets or exchanges by tricking them into entering their login details to a fake page.

Moving Forward

Despite the above risks, trading digital currency like Bitcoin can be an exciting way to diversify your investment portfolio especially if you already engage in forex trade. Many of the above risks can happen with traditional brokerage accounts if the investor has poor security practices and fails to keep an updated system. Contrary to the above setbacks, the market for virtual currency continues to grow and is expected to continue to do so.

Are digital currencies like Bitcoin too vulnerable to theft? Would you invest in Bitcoin or are the risks of being hacked too high?

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by Kyle Marino

When you usually hear about movie production companies names like MGM, 20th Century Fox, or Paramount come to mind. The Hollywood blockbuster factories that are merely one area of a larger conglomerate like Newscorp, usually flood the airwaves weekly. Except for this time. On May 31st an unexpected occurrence threw a wrench in the many moving gears of usual predicted outcomes. Instead, the studio Lions Gate Films stock (LGF) took the upper hand flooding headlines as they hit an all time high ending the month of May on top.

(Photo Credit to HollywoodReporter.com)

The studio who began their cinematic conquest with movies like “Dogma,” “The Rules of Attraction,” “American Psycho,” among many other indie favorites have been slowly gaining momentum with each new release. Now, less than fifteen years later Lions Gate Films have found a perfect niche in film adaptations which has helped them soar to new heights. On May 31st, Lions Gate Films stock hit an all time high ($30.18/share), confirming they made the right moves. All of their hard work was finally paying off, and why shouldn’t it? As Lions Gate started gaining momentum their most admirable characteristic was their independence. There was no conglomerate pulling the strings. They made the choices that they felt were the best ones for their company. With their success in the film adaptation industry, the main question is what does the future hold for Lions Gate Films? Have they peaked?

(Photo Credit to Buzz.Money.CNN.com)

How Did Lions Gate Films Reach an All Time High?

Looking back over the last ten years Lions Gate Films were known for their independent movie selections gaining traction as the go-to indie distributor. As time passed they saw an opportunity to add film adaptations to their heavily notched belt taking a chance on the “Twilight” series. After the success of the series’ five films Lions Gate decided to continue the adaptations theme with the dystopian set “Hunger Games.”

(Photo Credit to: Buzz.Money.CNN.com)

After the 400 million dollar box office success of the book’s first installment Lions Gate Films now aim to release “Catching Fire” this upcoming Fall. Lions Gate has also signed on to release the entire series with parts two and three of the “Hunger Games” set to be released in the next two years. Combining the popularity of the series with trending Oscar-winning actress Jennifer Lawrence sets the bar for top box office numbers.

Even traders on StockTwits have been giving the production company accolades this entire week, reporting a collected revenue of $2.71 billion for fiscal 2013. That is over 70% of an increase from 2012’s fiscal year ($1.59 billion.) Though the sparkling, brooding, pigmently challenged vampires never appealed to me, Lions Gate Films hit the jackpot with the “Twilight” series. The series alone collected a total of $2 billion dollars worldwide. Now as the company moves onto the second Hunger Games installment Catching Fire, Lions Gate are keeping their fingers crossed hoping they still have the Midas touch.

What’s Next For Lions Gate Films Stock?

At this point Lions Gate Films already have over thirty films set for distribution within the next two years. Looking at the list its apparent that Lions Gate is looking for success in the Hunger Games series. Even though a lot of focus is on that series, Lions Gate are also trying their luck in a variety of other titles including “I, Frankenstein,” “Pompeii,” and many more. One thing is definitely for certain, as Lions Gate Films has proven they are no longer the small production company flying under the radar. Combining their niched success with their huge list of upcoming movies, its apparent that there are no signs of quitting or coming to an end for this independent production company.

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by Kyle Marino

Recent trends and announcements have found that investors using social media to stay connected to instant updates were able to make smarter decisions with their recent investments. As an investor, annual reports, quarterly statements, and earnings releases are all you read to find pertinent information. After the SEC’s latest announcement, many investors can add the likes of Facebook and the rest of the social media family into their daily reading material. If you think about it, this decision was inevitable, just look at the evolution of social media within the last decade. In addition to the explosive social media growth, the birth of smartphones has given you the perfect combination to stay connected wherever you are. With so many eyes constantly using social media, it was only a matter of time before companies and investors alike found a valuable way to communicate and make smarter, faster decisions.

How Can I Use Social Media With Investments?

While this dramatic change is still in it’s early stages, investors are already feeling the pressure. Consider the fact that investors are already scouring the web for competitive data and financial projections. On top of everything else, these hardworking investors now have to hold a vigilant watch on targeted social media profiles to hopefully gain some leverage against others.

The details of using social media for company announcements are still being worked out. It seems that the two biggest social media titans Facebook and Twitter will be the outlets to flock to for important news and announcements. For now, investors will have to begin developing their strategies and selecting the companies they will be following. What is apparent is SEC’s stipulation that companies must let investors know how they specifically plan on using social media.

Tip: Investors, take a look at the bottom of quarterly reports, earnings releases and annual reports. Companies will most likely mention what social media platforms they will be using!

How Companies May Use Social Media

Though using social media is still in early adoption stages, companies like Garmin, eBay and Netflix are already fine-tuning their social media strategies. On April 2nd, they released information describing their social media sources and where they plan on posting pertinent information. These outlets include two of the company’s blogs, the company Facebook and Twitter, as well as the CEO’s public Facebook profile. GPS giants Garmin have been using Twitter’s feed to keep investors updated on their quarterly earnings, annual reports and more. The benefits of companies using social media are abundant, as each investor closely monitoring statuses, tweets, etc will have an edge against the rest of the competition. With that being said, investors still in the “old school” mindset utilizing traditional resources will fall off if they cannot adapt to the available resources. Just look below to see examples of how Tesla and it’s CEO have recently been pushing investors to use social media to stay connected.

(photo credits to: ‘The Buzz on’ CNNMoney.com)

Not All Companies Will Use Social Media

For many investors, the inclusions of social media outlets are more of a gimmick than valuable information. When you look at this trend logically you find yourself wondering how you will be able to keep up with hundred of different companies that you are following on Twitter or Facebook. Just thinking of it can be dizzying. Many companies do not want to hassle their shareholders and investors by making them chase down their latest status updates or Tweets. What is more likely to happen are companies using social media to direct their investors and shareholders to their official website or SEC’s site to find their latest releases.

Be Wary Using Social Media…

Before reaping any benefits of using social media, investors must make sure all the information they are gathering are credible sources. Last month the entire market was affected by a tweet that was posted on Alternative Press’ official Twitter. The problem though was that the report was false. As you follow the official pages of each company be sure to look out for a distinguishing mark acknowledging a credible source. There are even rumors flying around mentioning a special badge to mark important posts like annual or quarterly reports, earnings, and press releases. It is also good practice to confirm whatever information you gather with what is found on the company’s official website.

For more information on Twitter’s hazardous effect on Wall Street take a look at this infographic SocialMediaToday.com posted late this last April.

In Closing: Using Social Media, Is it A Good Investment?

As of right now using social media for smarter selections and strategies are still in early stages. While many investors will not recommend using social media to their companies, it is only because of the demanding amount of time that would be needed for due diligence. Investors already work with an abundant plate of information, so for now social media should be seen as the cherry on top. The garnish if you will. If anything, using social media will at least confirm the information and strategies you are implementing rather than being your number one source. If social media does become a valuable asset in the eyes of shareholders, companies, and investors alike you can bet your bottom bitcoin that software engineers and other services will find a way to create a program consolidating all of this information easily. When that does happen, the combination of using social media’s instant updates and traditional resources will be worth every penny.

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Saving Money On Broker Commissions Is Easy

Saving money on broker commissions is not difficult; you just need to know where to find discount online brokers.  Entering stock orders and orders for other financial products, such as exchange traded funds (ETFs), mutual funds, and options, was at one time carried out exclusively by licensed full-service stock brokers.  Traders and investors paid hefty fees for the services provided by these brokers.  In the Internet age, there is no reason to pay the expensive broker commissions charged by traditional full-service Wall Street brokerage firms.  Entering orders yourself online via discount online brokers is a great way of saving money on broker commissions, especially if you are a frequent trader, as full service brokerage commissions can quickly add up to significant sums of money.

Saving Money On Broker Commissions | Discount Online Brokers

The nice thing about saving money on broker commissions is that you do not have to sacrifice service and sign up with an unknown online broker to save significant amounts of money.  Many mainstream full-service brokerage firms, such as Fidelity Investments and Scottrade, are also discount online brokers.  Other discount online brokers, such as TDAmeritrade and E-Trade have established themselves as reliable low cost brokers that offer many support services that traders and investors need, without charging excessive brokerage fees.

Whereas full-service brokerage firms charge commissions in the $50 to $150 range per transaction, discount online brokers can provide the same services in many cases for just $5 to $10 per transaction.  The difference is that when using discount online brokers, a trader or investor is for the most part on their own.  Trading and investing decisions are made by a trader or investor, without the assistance or advice of a stock broker.  To aid in these self-made decisions, many discount online brokers offer plentiful research tools and general guidance.

Saving money on broker commissions is geared towards active traders and investors that are comfortable doing their own research, making their own trading and investing decisions, and entering their own orders.  If an investor is only interested in making long term investments that will grow over time that make sense in the context of their investment portfolio and goals, the investment advice provided by full-service stock brokers may be well worth the cost of their higher commissions.

For active traders and investors, saving money on broker commissions by using discount online brokers makes a lot of financial sense.  The difference between executing trades and investments at $10 per transaction versus $100 per transaction can add up to a significant amount of money over the course of a trading year.  For example, if an active trader or investor executes 100 trades or investment changes per year, the $90 difference between discount online versus full-service broker commissions adds up to a whopping $9,000 per year.  For more active traders, the commission savings can be even greater, as many discount online brokers offer lower preferred commission schedules to active traders.

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Taking Options Trading 101

Options trading 101 should be a required class for any investor. Options represent a unique buying and selling opportunity, but one that seems a bit too complex for your uneducated investor. If you want to stay ahead of the curve, you should make sure that you know exactly how options work and whether or not they will benefit your investment plan.

Options Trading 101: The Basics

Options trading 101 always starts with a bit of theory. When you trade in options, you are not trading in a stock or a commodity. Instead, you are trading in the ability to buy a stock or commodity at a set price at a later date. For those new to options trading 101, this means that you can lock in a price today to buy tomorrow, so long as you can pay a basic fee. This might allow you to buy significant amounts of a particular commodity, for example, for only a fraction of what that price might be after the stock goes up. Not only are you gambling on the performance of a stock, but options make you gamble on whether or not the gamble will be worthwhile in the future.

Are options a good way to make money? Of course. Just think about being able to buy a particular stock for five dollars a share after it has risen to ten dollars a share. Options are also very difficult to use, though. While you will not want to buy a stock if the price has gone down, you can still lose a great deal of money paying the associated fees. Taking the time to sit through options trading 101 is a good way to make sure that you keep your money safe, but you still need to look for help when you first begin trading options.

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The Benefits of Financial Planning

Although financial planning services can benefit almost everyone, some people believe that they possess the skills and expertise to plan their own financial futures. While some individuals are certainly capable of ensuring that they will remain economically sound in the days and years to come, others simply lack the special skills and expertise offered by professional financial planners. Economics is a challenging subject, and personal finance is no less difficult to understand than any other aspect of money. There is no shame in using professional financial planning services. A financial planner should be seen as an ally and a partner who can use his or her skills to ensure that the future looks bright.

Selecting the Right Financial Planner

Choosing a professional for financial planning services can be difficult because there are so many planners from which to choose. Thankfully, there are some tips that can help individuals locate planners who can maximize their finances. Most important is finding a planner who has been certified. Certified planners are regulated and licensed, plus they are required to take a number of continuing education courses. It is also wise to choose a planner who earns his or her money based on a flat or hourly rate as opposed to commission. Those who earn commissions can often find ways to direct clients to more expensive financial products and services. A financial planning expert should also come highly recommended from peers and professional agencies.

Financial Planning Is a Wise Investment

Many people breathe sighs of relief once a financial planner has been chosen because they know they will no longer be alone when dealing with the burdens of planning the future. Financial planning is not something that should be left to novices. Experts in this field can help individuals maximize their money so that their futures are comfortable and pleasant. Although financial planning services are not free, they can be seen as intelligent investments.

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