As a stock mentor, it is my job to educate people on the tricks of the trade. I make a living teaching people how and where to invest their money. I am an expert in all things stock market. With that said, I can offer some tips and advice that can help you with your investments. I can impart some insider info that will differ from the other tips you may find floating around out there on the Internet. While stock trading is not as complicated as it may sound, there are some ins-and-outs of the business that any trader should know about.

First we will talk about fear. Fear is an emotion that can take over when it comes to trading in the stock market. Though it may be a very difficult thing to do, suppressing that fear is very important. Fear has the great power of crippling certain individuals. For others, fear has a driving power. Instead of letting fear hold you down, let it motivate you. If you’re too intimidated by the stock market, it can’t possibly bring you any financial success.

Next we’ll talk about the easiest way to trade: swing trading. Swing trading is what occurs when you hold a stock for a short amount of time, anywhere between one night and a few weeks. This tactic is used for making money quickly. As an independent trader, swing trading is easy to do. Swing traders can also be referred to as day traders. Swing trading offers the ability to enter and exit a trade in the same day.

A smart tactic, which is just as applicable in life as it is in the stock market: learn from mistakes. And as a beginner in the volatile world of stocks, you are bound to make mistakes. Losing in the stock market is a natural occurrence in the stock market, and you must accept this fact. When you lose, figure out what triggered it. If you can figure out what caused a loss, you can adjust accordingly, and make different moves next time. You can learn a lesson from every trade you will make.

Create a plan that works for you. What you feel works for you will be different than for anyone else. You will start to learn when to stay in the market and when to get out. You will eventually find a set of rules and strategies that fit the way you trade. Either way, stick to what works for you. This set of rules will be different for everyone involved in the market.

In time, you will start to know what it takes to become a successful trader. You will learn to harness and channel your fear into making money. You will begin to learn from your mistakes. You will start to get a hang of what works and what doesn’t work.

It is important you do not forget that the market is not just profit, profit, profit. You will experience loss. This is just the nature of the game. Once you accept this fact, you will become more prepared to start trading with confidence. Success will not come flowing in all at once. This is a process, and it is one in which you must proceed with caution. However, once you start to understand the ins and outs of the stock market, success will come.

A favorite directionless investment method with option sellers is called the vertical spread or the Weekly Options. One reason it’s so well-liked is because it’s one of the easiest option strategies to understand. Another explanation for it’s attractiveness is that once the trade is placed there can be very little attention needed to supervise it - allowing the credit spread trader to go out and spend their time doing other things rather than sitting in a dark room staring at a trading screen all day long.

The credit spread is a fundamental element to numerous other option spread strategies including the iron condor, the butterfly spread, the double diagonal and others. It if fairly common for beginning option traders to gravitate to this strategy soon after discovering options and once they have gotten their feet wet with the purchase of straight calls and puts, then covered calls, and debit spreads.

Option traders love to trade this strategy because the way these trades are constructed can allow the trader to be wrong and still make money. If the trader creates a particular credit spread position, he or she can win if the stock or index being traded winds up doing three out of four possible scenarios. If the stock goes down, the trader makes money. If the stock goes nowhere the trader makes money. If the stock goes up a little, the trader makes money. The only way the trader can lose money if the stock goes up far enough to threaten the credit spread that has been sold. And even then, there are management and adjustment techniques that can be utilized to hedge against losses.

For example let’s say our trader is bearish on the stock XYZ. XYZ is trading at a recent high and our trader believes that the stock will not move any higher over the next 30 days. So, he sells a bear call spread - a call option credit spread that benefits in a neutral to bearish scenario.

The only way this spread trade can lose money is if the stock winds up doing 1 out of 4 possible scenarios - giving our trader a three out of four likelihood of winning. If the stock moves down as our trader predicts he wins. If the stock stays stagnant and goes nowhere, he wins. In fact, even if the stock moves against our trader and heads upward he wins just so long as the underlying doesn’t move so far as to breach the spread sold. The only our trader loses is if the underlying moves far enough upwards passing the option strike price that was sold - which if it does, our trader could still salvage the position through appropriate management and adjustment methods - adding up to yet another reason why option sellers love this strategy so much which is also called the Iron Condor .

Our discourse so far on bank conversions has targeted on banks that do a full conversion and sell 100% of the available shares to depositors. There is a second sort of conversion commonly known as a ‘partial conversion’. Some mutual banks form what is sometimes known as a ‘Mutual Holding Company’. Banks with a mutual holding company structure own the bulk of shares (greater than 50%) of stock in the subsidiary bank. When a Mutual Holding Company switches to stock ownership it sells a minority (less than 50%) of the available shares to its depositors in a partial conversion. Minority shares that are sold to depositors are publicly traded on the NYSE or Naz stock exchanges.

As an example, TFS Financial Company operates as the holding company for Third Fed. Savings Bank. The TFS Money holding company retains 74% of the major shares of Financiers Savings Bank. 3rd Fed Savings Bank conducted a partial conversion and sold 26% of the exceptional shares to depositors of Third Fed Savings Bank. The shares are traded on the NDX under the symbol TFSL. I had a high-interest account at 3rd Fed. Savings Bank and was able to purchase shares in the partial conversion.

The latest trend in conversions suggests that the Mutual Holding Company structure is beginning to become more popular and now accounts for the majority of conversions.

The Net Worth of the Bank Can Double Overnight

Backers Bancorp is still a Mutual Holding Company (”MHC”). Many MHCs decide at later on to sell the shares held within the holding company in what is known as a ’second stage offering’. In a second stage offering the bulk of the shares held in the MHC are sold to depositors in a ’second step ‘ IPO.

When this occurs the present minority investors always receive a serious price appreciation in the price of the minority stock. This price appreciation occurs as a result of the rise in the net worth of the bank that will double or perhaps triple on the day a second stage offering is finished. The net worth increases as the money received from the sale of the majority shares is added to the bank’s treasury.

MHC 2nd stage offerings are not the same kind of offerings that result when a public company sanctions a rise in the amount of its exceptional shares and then completes a secondary offering during which extra shares of stock are sold. This ends in a dilution of shareholder’s equity. The MHC 2nd stage offerings are accretive to stockholder equity as money is received for the sale of the majority shares in the second step IPO but the total number of major shares is not increased.

In a MHC second stage offering minority stockholders typically receive two to four shares of the new stock issue for each minority share owned in order to maintain their original share of ownership. ‘Second stage ‘ offerings increase the capital base of the bank which permits the bank to extend its loan portfolio which in turn can increase the earnings potential of the bank

90% Return with Low Risk

For example, in my son Ryan’s education account, I purchased 500 shares of Bank Mutual Establishment the Mutual Holding Company for Mutual Savings Bank at $23.50 per share for a total investment of $11,750 (see brokerage confirmation that follows).

Bank Mutual MHC subsequently conducted a second stage offering and sold the majority shares held by the holding company to depositors at the bank. As minority shareholders, we were given 3.668 shares of the new Bank Mutual stock for each minority share we owned so now we own 1,834 shares of Bank Mutual. The present cost of Bank Mutual is 12.20. Our 1,834 shares are now worth $22,374 which interprets to a $10,624 profit and a 90% return.

The 90% return demonstrates the potent profitability of making an investment in the minority stock of Mutual Holding Company and the proceeds from selling this stock may even cover one year of university costs for Ryan!

I started off tiny in the 1990s with bank stock conversions by routinely purchasing a few hundred stocks in an IPO. My success with the bank conversions at last helped me to buy thousands of shares in more recent IPOs. The account outline below shows some of the mutual bank stocks I purchased in an IPO in the 1990s. The cost of the 2,589 shares was $25,890 (2,589 x $10 per share = $25,890). The market worth was $52,103 leading to a $26,213 profit and a 101% return.

Market Value of $52,103 Minus Value of $25,890 = Profit of $26,213

Buying Conversion Stock in a Community Offering

Depositors at mutual banks have concern subscription rights in the event the bank comes to a decision to convert to stock ownership. It is possible to purchase IPO stock even if you do not have a deposit account at the converting bank. Infrequently depositors with concern rights do not purchase all the available stock making it available to the general public in what is referred to as a Community Offering. Examples of Community Offerings would include the Port Financial, Hudson Town Bancorp and Connecticut Bancshares conversions.

In order to purchase stock in the Neighborhood Offering you need to call the bank and acquire a stock order form and prospectus. The stock order form must be completed and returned to the bank before the Subscription Offering Deadline. A check to cover the number of shares acquired must be included with the stock order form. It usually takes several weeks after the Subscription Offering Deadline for the stock to be allocated and for stock certificates to be mailed to shoppers.

Examples of MHC 2nd Stage Offerings

Enclosed on the subsequent a few pages are stock price charts of Mutual Holding Firms that conducted 2nd Stage Offerings. This subset of price charts reflects the price movement of the minority stock prior to the completion of a MHC 2nd Stage Offering. Notice the price appreciation realized by minority shareholders prior to the second stage conversion.

MHC Technique Current Profit Results

I make trade suggestions for MHC stocks which can on occasion be acquired in a trade account thru my advisory service. The table below lists the present open trade profit results for the MHC Methodology. The portfolio has $59,323.30 in open trade profits with a standard return of 34.8% before commissions.

Many MHC stocks are regarded as worth stocks as they usually have a good Price to Order values and significant money on their balance sheets re stock cost. As an example, I listed the money per share as a proportion of the prevailing stock price for a sample of MHC stocks below.

For all the investors out there who can’t pick market direction to save their lives, here is a good trading strategy worth considering: it’s called the option greeks Iron Condor Option Strategy. This trade is ideally suited for non trending markets, however it can also product great results in a moving market just as long as the investor who is trading this strategy understands it thouroughly and has been properly educated on how to work the trade and most importantly how to correctly adjust.

This is a spread that takes advantage of theta decay in options - the fact that options are a decaying asset and lose value over time. Once an iron condor trade is placed, and expiration day approaches - as long as the ’sold’ strikes of the position are placed far enough outside of ‘harms way’, these trades can normally expire worthless giving the iron condor trader a substantial return in a very short period of time.

When we look at how the iron condor is put together, we can see that in fact this trade is just two separate credit spread positions placed above and below where the vehicle being traded is currently trading at. Below the underlying we find a bull put spread while above we find a bear call spread. Some iron condor traders prefer to place their iron condors as one complete trade - all four legs together - while other traders prefer to leg into the position, placing each particular credit spread one at a time.

Ideally, the stock or index that is being traded will remain within the range created by the two separate credit spreads. These are usually placed far enough away from where the underlying is currently trading where as to give the underlying room to move around on the chart without breaching either one of the spread positions on both sides. If the underlying does move so far as to threaten either credit spread, the iron condor trader will need to have a plan in place to protect the position by managing and making adjustments to the position.

Most of the time, iron condors can be profitable as they offer a high probability of success. That being said, it is extremely important for the newer iron condor trader to understand the potential danger of these trades as the reward/risk ratio is very poor. One losing trade can completely destroy a trading account and eliminate many months worth of gains. This is why it is so important to have a solid iron condor management and adjustment plan in place before getting started trading this strategy. These can absolutely be profitable over the long run IF one knows how to correctly place, manage and adjust.

Many iron condor traders grow over confident because they win for a number of consecutive months using this trade. Then they are woken up as the inevitable problem month comes along and destroys a significant portion of the their trading account. This could have been averted if they had only properly prepared before hand and learned how to correctly place, exit, manage and adjust these trades.

This is exactly what happened to me when I first started trading the option greeks iron condor strategy - and I had to learn this lesson the hard way through taking a large painful loss to my own account. Had I just taken the time to learn the risk management and hedging techniques taught at this iron condor training website, I could have avoided much of this trading pain.

Now that we all know why stocks provide superior returns compared to other investments, let's take a look at a technique of finding stocks with the best profit potential. My research of stock performance information shows that the size of a company is the most trustworthy forecaster of future investment returns . On average , tiny corporations have higher investment returns than substantial companies. The relationship between company size and future investment returns covers the whole size range and isn't restricted to the smallest stocks.

Historical return data shows that average investment returns increase as one moves from the biggest firms to the littlest. This relationship suggests that past yearly returns are of value in envisioning future yearly returns. Tiny and micro cap stocks have continually provided higher investment returns than mid and enormous cap stocks over the past 70-Years and based on historic correlations should keep doing so in the future.

The table that follows pictures investment returns relative to the size of a company over the last 70-Years. This table obviously demonstrates the inverse relationship between the size of a company and investment return. The largest companies produced the lowest returns and the littlest corporations produced the highest returns. A $1,000 investment in mega cap stocks grew to $1.5 million; big caps $3.5 million, mid caps 4.7 million, tiny caps $5.8 million and micro caps $11.4 million.

The Best Profit Opportunity of Your Lifetime!

My experience investing in micro cap stocks during the last 17 years and my info research has led straight to the discovery of the gigantic profit opportunity available from investing in micro cap stocks. My research exposes micro cap stocks provide the best investment returns matched against all other sorts of investments.

The table below compares the growth of a $1,000 investment for numerous investments over the past 70 years. This table seriously explains micro cap stocks out perform all other investments by a wide margin. A $1,000 investment in micro cap stocks grew to an awesome 11.4 million bucks.

Over the same period the expansion of a $1,000 investment in Treasury Bills, gold, Treasury Notes, company bonds and home prices ranged between $16,817 to $63,131 and was trivial compared to the returns for stocks. A $1,000 investment in the S&P 500 Index grew to $1,287,957 demonstrating that stocks and in particular micro cap stocks provide the best profit openings to be had today.

The graph that follows shows the growth of a $1,000 investment over the past 70 years for micro cap stocks, S&P 500 Index, home costs, corporate bonds, Treasury Notes, gold and Treasury Bills.

Prudent Savings Bank was founded in 1839. Prudent is a lucrative bank and has amassed over $300 million bucks in retained earnings since its founding. Prudent is a mutual savings bank. Mutual savings banks are owned collectively by their depositors. Provident’s revenues have been accumulating for several years but can't be accessed by the depositors. Provident Bank decided to convert to stock ownership and sell shares of stock in the bank to its depositors. The stockholders of the stock own all the equity or net worth of the bank including the kept earnings that've been building up for a few years.

Provident sold stock to its depositors at roughly 65% of book worth. Book value is calculated by subtracting the debt of the bank from the assets of the bank (including the retained revenues). Book worth for many banks is typically cash (retained earnings and the money received from the IPO). So that the depositors purchasing the Prudent stock in the IPO are essentially purchasing the net worth of the bank for 65 cents on the greenback.

The IPO stock price was $10 per share. If the stock is coming out at 65% of book price then the book value is about 15.38 per share (15.38 x .65 = 10.00). If the stock trades up to book worth at 15.38 then there'll be a 53.8% return for depositors who acquired the stock at $10 (15.38 minus 10.00 cost = 5.38 gain divided by 10.00 cost = 53.8% return).

Prudent Bank converted from a mutual bank to stock possession and offered depositors of the bank to get shares in the conversion IPO at $10 per share. As a depositor at Provident Bank, I received notice by mail of the imminent conversion and a stock order form which permitted me to purchase shares in the conversion at the favorable IPO price of $10. I completed the stock order form and returned it to the bank along with a check to purchase the stock.

As a depositor at Prudent Bank, I was ready to purchase 52,000 shares of Provident Bank at $10 per share. I received a stock certificate from the bank (see copy of stock certificate that follows). I deposited the 52,000 shares of Prudent Bank in my brokerage account.

On the IPO date shares of Prudent Bank started trading on the stock exchange. On the 1st day of trading, shares of Provident Bank closed at 15.85. Buying the shares at $10 produced a $5.85 profit per share on the IPO date (current price of $15.85 “price of $10 = profit of $5.85). I had 52,000 shares of Prudent Bank which produced a total open trade profit of $304,200 on the IPO date. Not bad for a day’s work!

Tiny company stocks are typically overlooked as a doable investment asset group. But with this absence of attention comes opportunity. You are about to find out that small company and in particular micro cap stocks are the best performing asset class compared to virtually any other sort of investment.

Simply owning small and micro cap stocks significantly out performs each other sort of stock investing method. I have been investing in tiny and micro cap stocks over the last 17 years and I am a firm follower that micro cap stocks should be a part of every investor’s portfolio.

OBA Financial Has a Market Cap of $61.4 Million

I currently own shares of OBA Financial stock. The market valuation or capitalization (cap) of a stock is calculated by multiplying the price of the stock by the quantity of shares major. As an example, OBA Monetary stock is presently trading at $14.36 per share and has 4.28 million shares outstanding. To calculate the market cap we multiply the price per share times the amount of shares notable. OBA Monetary has a market capital structure of 61.4 million dollars.

4,280,000 Shares x $14.36 Per Share = Market Cap of $61,460,800

My research using market funding as an investment method explains th e size of a company is the most trustworthy indicator of future investment returns. Normally small corporations have higher investment returns than large companies. My historic research shows that the littlest companies supply the highest investment returns.

The smaller a company is. The more likely it'll produce a higher investment return. Historic return info shows that average investment returns increase as one moves down the size range from the biggest companies to the smallest companies.

Size Spectrum

Commonly used terms to describe capitalization size from largest to smallest:

Mega Cap (biggest)

Huge Cap

Mid Cap

Tiny Cap

Micro Cap* (littlest)

*Micro Cap is stocks in the 10th Decile (smallest 10%) in terms of market funding of stocks traded on NYSE/AMEX/NDX.

70 Years of Historical Investment Returns

Size vs Return

Micro Cap stocks produce greater returns than Tiny Cap stocks

Small Cap stocks produce bigger returns than Mid Cap stocks

Mid Cap stocks produce bigger returns than Huge Cap stocks

Large Cap stocks produce greater returns than Mega Cap stocks.

Investors who have accounts with major banking firms, and have experienced a down turn in their stock investments, should consider the options available with some of the Top Canadian Discount Brokerages. As the stock market steadies its feet in the financial world once again, stock traders can now benefit from the investor controlled accounts of an online discount brokerage.

Discount brokers provide an online environment for clients to visit at their own convenience. They act as an agent for people to distribute their funds according to their own person needs. As the term discount brokers suggests, trading this way is a cheaper alternative to using a major banking institution.

Based in Canada, Scotia i-trade, allows their clients to trade investment stocks on an international level. They provide great value to the client and have a user friendly interface, with many different financial products available. Clients of this brokerage have experienced top of the line customer service, both online and in person.

The international group of Interactive Brokers has a popular branch available to Canadians. This company provides a classic trading system for both Canadian and US money. They have accounts to suit experienced clients and research tools that allow clients fast and up to date access to stock market figures. Clients can also experience 24 hour access to advice and advanced online training tools.

The Canadian owned Questrade is the perfect environment for the modern day investor. They give their clients access to their systems via interactive resources such as ipods and ipads, while also allowing people to be updated instantly via social media like facebook and twitter. With live, online support staff available 24/7 each account holder has access to immediate customer service.

There are many aspects that an individual must consider before signing up with any online discount brokerage company. Firstly the cost and fees involved in setting up an investment account is important. Be aware of any hidden fees and special requirements, such as minimum trading amounts, that might be involved with a specific product. An investor should carefully consider all the terms and conditions that are associated with each of these companies before committing any hard earned money.

In the age of instant access to world wide information about financial markets, it is not difficult for the average consumer to learn how to best invest their money. These days it is easy to set up an account that will grow in equity and allow a person to build a healthy saving for the future.

Shall we now have a look at why stocks have given the best investment returns over a period of time. When you buy a stock you become a partial owner of the company and own a share of the company. The value of your share of possession is often known as ’stockholder’s equity’. Stockholder’s equity is basically the net worth of a company and is figured out by subtracting the debt of a company from its assets.

Stockholder’s Equity = Assets Minus Debt

If a company is liquidated then stockholder’s equity or net worth would equate to the break up or liquidated price of a company after all debt is paid. When a company produces takings and is able to keep those earnings it increases its net worth. Kept takings are normally the largest part of net worth. When a company can grow its stockholder’s equity or net worthwhile creates industrial price for its investors and makes a company's stock more valuable.

As the net worth of a company grows the company can increase its production or services. Banks can increase their loans. Insurance companies can write more policies. This increase in production or services can in turn create more revenue for the company. A company that is growing its net worth is creating real wealth. Owning equity or stock in such a company is regarded as a ‘real ‘ investment.

This is dissimilar than purchasing property or rare metals or collectibles with the hope that somebody will pay you more than what you paid for it. This is price supposition as there's no expansion of net worth or equity with these types of investments.

Corporations that produce and retain revenues enable stocks to supply the best returns compared to all other types of investments.

The increase in stock holder’s equity or net worth of a company has always allowed stock speculators to enjoy the highest investment returns. As long as companies continue to provide and retain revenues, stock investing will always provide superior returns matched against all other kinds of investing.

My tangible trading experience and historic research demonstrates that there is a strong correlation between the growth of a corporation's net worth and the price appreciation of its stock. Historically the market price of a stock usually follows the growth of a corporation's net worth. If a company's net worth increases then usually the fair price of its stock also increases. If a company's net worth decreases then normally the open market price of its stock also decreases.

Ultimate Objective of Stock Investing

As a corporation's net worth grows the true price of your stock investment grows. Eventually this is the reason we invest in stocks and what separates stock investing from all other types of investments. Growth in company net worth has made trillions of greenbacks of business value to shareholders and is the bedrock of a capitalist economy. Stockholder’s equity supplies the capital that creates firms and lets them grow.

The going rate of a rewarding stock barely ever trades below its stockholder’s equity even during bear markets. This stands to reason as natural price creates a ‘floor ‘ under the market price of a stock. If the stock of a profitable company trades below its intrinsic appraise it could be liquidated at a bigger price than it stock price or it may be purchased by another company at little or no cost by creating debt secured by the assets of the purchased company.

Let's take a look at examples of corporations with a high stockholder’s equity rate of growth so we will compare the growth of stockholder’s equity to other investments. Our first example is Canadian Resources (CNQ) which is an energy exploration and production company. Over the past 15 years Canadian Resources had an expansion in stockholder’s equity of 2,573%.

The return graph that follows shows that a $1,000 investment in CNQ stockholder’s equity over the past 15 years grew to $26,731. Over the same period a $1,000 investment in gold grew to $2,832 producing a 183% return, 5-Year Central authority bonds produced a 154% return, home prices appreciated 91% and Treasury Bills produced a 69% return.

The 2,573% growth in stockholder’s equity for Canadian Natural Resources demonstrates the ability of the company to grow its earnings and to keep these earnings. Retained earnings account for 75% of CNQ’s stockholder’s equity.

The growth in CNQ stockholder’s equity created true wealth for shareholders. Over the same period of time Canadian Naturally Occuring Resources stock price appreciated 2,576% which a touch surpassed the 2,573% growth in stockholder’s equity.