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A Safe Approach To Doubling Your Money? More Than One Exists

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Double your money on an investment? The phrase represents a holy grail for many. The challenge sounds especially daunting today when most “safe” investments are returning historically low returns. Bankrate, which tracks U.S. certificates of deposit, currently lists a 2.0% 5-year return on a $25,000 deposit.

According to investment author Ken Clark, doubling your money is still a realistic goal, but also one that can lure people to act impulsively. Clark, writing in Investopedia, presented five realistic strategies an investor can follow to double their money.

The Classic Approach

The classic approach is to earn gains slowly. An example is investing in a secure, non-speculative portfolio including investment grade bonds and blue chip stocks. This approach works on account of the “rule of 72,” referencing calculating how long it takes to double value based on compounded interest. Dividing the expected annual rate of return by 72 yields the number of years it takes to double the value.

Since blue chip stocks have gained about 10% over the past 100 years while investment grade bonds have gained about 6%, a portfolio split evenly among them will return about 8%. This means the value will quadruple in 18 years.

Warren Buffet

According to Stansberry Research, Warren Buffet turned $105,000 into more than $50 billion through compounding. He researched the best companies to invest in, then waited for their stock values to drop due to a scandal or a market collapse, then he bought.

‘Blood In The Streets’

The “blood in the streets” approach refers to instances when an investor feels they have to buy because everyone else is selling. This is also known as the “contrarian” approach. Stock prices of normally strong companies suffer slumps on occasion when fickle investors want to bolt.

Sir John Templeton and Baron Rothschild said smart investors buy when there’s “blood in the streets.” They were referring to the fact that good investments get oversold, presenting a buying opportunity for investors who know what they are doing.

The book value and price-to-earnings ratio offer barometers for determining when a stock is oversold. These metrics have established good historic norms in specific industries and broad markets. When companies fall below these historic averages for systemic reasons or superficial ones, an opportunity exists for investors to double their money.

The Safe Approach

Investors wary of risk find bonds a safe approach to growth. Zero-coupon bonds such as U.S. savings bonds can accomplish this goal. Such bonds are easy to comprehend. Rather than buying a bond paying regular interest, purchase one at a discount to its ultimate maturity amount.

Rather than paying $1,000 for a $1,000 bond paying 5% annually, buy it for $500. When it approaches maturity, its value rises until the holder is fully repaid the face amount.

There is no reinvestment risk in this approach. Standard coupon bonds carry the regular need to reinvest interest payments as they are received. Zero-coupon bonds do not incur the challenge of investing smaller rate payments or risking declining interest rates.

The Speculative Approach

For investors craving excitement and having an appetite for bigger risks, options, margin and penny stocks offer some of the fastest ways to double value.

Puts and calls enable one to speculate on the stock of any company. Investors who pay attention to specific industries are in a position to improve their portfolio’s performance using these stock options. Each stock option can represent 100 shares of stock, meaning a stock price could only have to rise a small percentage to return a big gain. This approach requires research, since options can suck wealth as fast as they can give it.

Those who want to leverage their faith in a stock but don’t have the patience to research options can sell a stock short or buy on margin. These techniques involve borrowing money from a brokerage house and purchasing more shares to boost potential profits. This technique takes guts since margin calls can corner one’s available cash while short selling can deliver infinite losses.

Bargain hunting is another technique that can boost returns. Whether one gambles on former blue chip companies selling at under one dollar or investing thousands of dollars into the next “big thing,” penny stocks can double in value in one day. A company’s stock price, whatever the amount, reflects what value other investors don’t see paying beyond.

The Best Approach Of All

The best way to doubling one’s investment pile is taking advantage of their employer’s matching contribution to their retirement plan. Receiving 50 cents on every dollar deposited is a sure way to build wealth.

Another important consideration is the fact that the money going into a 401(k) is tax deductible. This means every dollar invested costs the investor only 65 to 75 cents. For every 75 cents, investors receive $1.50 or more in their retirement fund.

For those who don’t have an employer-sponsored 401(k) plan and earn less than a certain amount, the federal government matches a portion of contributions to retirement accounts. The Credit for Qualified Savings Contribution cuts the tax of the contribution by 10% to 50%.

Do Your Homework

Doubling one’s money is a realistic goal, but investors need to be frugal. There are more scams promising unrealistic returns than safe bets.

This article gives an overview of a subject that is very serious to most people and deserving of significant consideration. In a free market society, the individual bears responsibility for their own wealth creation. Those who are serious need to allocate time to research investment options.

Since most individuals do not have the time to devote to extensive investment research, financial advisers are important. Finding the right advisor, however, requires research in itself.

Kiplinger.com, a long-time investor research firm, recently released an article on selecting an investment advisor. Following are some tips.

1) Learn financial professional vocabulary. Know the difference between an SEC registered investment adviser, a registered representative and an insurance agent. Know if the adviser’s compensation is fee-based or commission-based.

2) Be aware of all fees associated with investments. The fee-based adviser arrangement is a preferred method since it incentivizes ongoing planning. But it is important to be aware of investments held in a fee-base account since these are fees on top of the fee paid to the adviser.

3) Be aware of an adviser firm’s revenue sharing arrangements with mutual funds and annuity products. These arrangements can cloud an adviser’s advice. Big financial companies often have revenue sharing documents disclosing their conflicts of interest.

4) Be aware of an adviser’s affiliations. Some companies that seem independent are actually franchises of larger companies and therefore have the same conflicts of interest as larger companies.

The relationship an investor establishes with an adviser has to be based on trust to be mutually beneficial. The client in this relationship should feel comfortable asking the advisor any question they wish.

While it is not unreasonable for the advisor to feel frustrated at times working with a client, a good advisor wants the client to feel confident in their investment decisions.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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MobileGo (MGO) Is Up More Than 40% Since Thanksgiving

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The last few weeks have been an extremely challenging time for crypto enthusiasts.  Major coins like Bitcoin (BTC) and Ethereum (ETH) have been demolished while many smaller alternative coins have done even worse.  Fortunately, there are still a few bright spots left in the market that traders may want to turn their attention toward.  One of those bright spots is MobileGo (MGO).

Price Surge

Although most cryptos have taken a severe beating in the past few weeks, MGO has done just the opposite.  As seen in the chart below, MGO has soared by more than 40% since Thanksgiving.

A few of the reasons for the surge include being in an industry with rising popularity, innovative methods of earning gaming currency, and key strategic partnerships.

Exploding Popularity of the Gaming Industry

Despite the volatility in the cryptocurrency markets, blockchain remains one of the most exciting technologies being developed.  Blockchain has the potential to disrupt global industries and take them to levels once thought impossible.  MobileGo is attempting to do just that in the gaming industry.

The Gaming market is an extremely exciting opportunity as the industry is growing by leaps and bounds.  According to Market Researcher, Newzoo, the global games market is expected to grow from $137.9 billion in 2018 to more than $180.1 billion in 2021.

GShare Development

One of the company’s main innovations is the development of GShare.  GShare is a special tool which allows its users to earn GShare Gold coins by harnessing the power of their computers.  In this way, it’s very similar to cryptocurrency mining.  These coins (not cryptocurrency) are a soft currency which will be earned as soon as the user runs the app and presses the “start” button.  Users can play their favorite games, work, or simply browse the internet.

Additionally, gamers can also earn GShare Gold Coins by entering tournaments.  There is a wide variety of tournament options so that players can choose tournaments that fit their interests and skill levels.  In this way, it’s really an open environment that caters to individuals of all backgrounds.

Once the coins are earned, users will have several different redemption options that include the following:

  • Tournament Entry Fees
  • Social Activity Platforms

The option to use the coins through social media avenues is extremely interesting.  This presents an opportunity for the coins to gain international recognition by uniting different groups of people for positive results.  These social activity opportunities should become clearer soon.

Xsolla Partnership

MGO coins can be earned through special promotions, exchange trading, or by winning tournaments.  The last one is especially important as it’s directly related to GShare.  Users can use their GShare Gold coins to enter tournaments that fit their skill level.  And, if successful, users will earn MGO coins by performing well.

Being able to earn MGO coins by winning tournaments is very exciting considering the recent partnership news with Xsolla.  Xsolla provides game developers with a comprehensive suite of flexible tools and service to help launch, monetize and scale their games globally.  In late October, Xsolla announced that it would start accepting made-for-gaming cryptocurrency, MobileGo, for its PC and mobile games partners.

The partnership means that developers will be able to receive royalty payouts in MGO cryptocurrency.  As stated earlier, the gaming industry is expected to grow significantly in the future which makes this a very compelling opportunity.  As blockchain technology and gaming continue to grow in the future, it’s safe to assume that more and more game developers will be interested in cashing out via cryptocurrency.  MGO being an option this early in the game is a massive advantage.

Conclusion

Although it’s still early for MobileGo, the company appears to be making all the right moves in an effort to attain blockchain gaming dominance.  Only the future will tell whether the company will prove successful, but things certainly appear promising at the moment.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Are Crypto News Sites Allowing Freedom Of Thought?

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As the interest in cryptocurrencies has exploded during the past couple years, crypto news sites have been on the rise.  These sites are quickly becoming an invaluable resource for traders who enjoy learning about new crypto projects and trade ideas.  The content distributed through these platforms is typically created by a combination of full-time staff and guest contributors/bloggers.  Many of these writers also have a lot of experience in crypto trading so the articles are extremely beneficial for readers.

One thing that readers should always keep in mind is that the content from these sites normally represents the independent thoughts of the writer.  This is important because writers/traders aren’t infallible.  They can make mistakes like all of us.  So, the best approach for readers is to try to attain a diversity of thought.  A diversity of thought means to gather as much information as possible, from a wide selection of sources.  This is absolutely necessary before reaching a conclusion on a certain topic.

But what happens when a website prevents writers from writing about specific topics?  A colleague of mine recently tried publishing an article at Coinnounce.  The writer wanted to publish an article about the buying opportunity that the Bitcoin crash was affording investors.  Normally an article is rejected for legitimate reasons such as poor grammar, plagiarism, or promotional work.  Unfortunately, Coinnounce cited that the website was bearish on Bitcoin and that they wouldn’t be publishing bullish articles.  Even more troubling is that when Bitcoin rebounded in price, Coinnounce reached out to my colleague and told him they would now be willing to publish the bullish article.

When I found out about the rejection and the reason given, I decided to browse the Coinnounce website (which I had never heard of) to find out what kinds of articles were being published.  And sure enough, the articles were nearly all bearish in some fashion.  The problem with this approach is that nobody knows where Bitcoin is going.  It’s 100% speculation.  What actually matters is the logic presented in the article that helps back up a prediction.  So, while Coinnounce is free to run its business as it sees fit, the website (or the articles published) should have a disclaimer that the information presented represents the thoughts of the website’s owners/editors.  Otherwise, readers may not have a clear understanding of what is being presented.

The point of this article is not to call out Coinnounce.  Rather, the point is to make sure readers are aware that some sites may have different motivations than others.  It’s important to read from a variety of sources to get as much information as possible.  This is true not just for cryptocurrency markets, but for everything in life.  I’m proud to write for Hacked which runs an open and honest platform.  The articles written do represent the thoughts and feelings of the writers.  So, while the editors may not always come to the same conclusions that the articles do, they will never suppress freedom of thought.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Are Cryptocurrency Exchanges Asking Low Volume Coins For Bribes?

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Over the last few years, as cryptocurrency trading volume has soared, there has been tremendous growth in the number of exchanges.  Crypto trading volume really took off in 2017 as retail traders and institutional money flooded into the market.  This presented an opportunity for savvy entrepreneurs to stake their claim and start an exchange.  Unfortunately, not all exchanges are created equal.  Crypto trading is still an industry in its infancy which means it’s not regulated nearly as tough as many other industries.

Big Exchanges Charge Expensive Listing Fees

During the crazy bull run that lasted through the very early part of 2018, crypto projects were desperately trying to get listed on the biggest and most active exchanges.  The most coveted exchanges include Binance, Bittrex, Poloniex, Kraken, and BitStamp.  And while these exchanges certainly offer an attractive landing spot, there is a major problem; the listing fee.  As these exchanges have grown and gained power, only projects that are willing to pay an expensive fee receive a listing.

In August, Bitcoinist.com ran a story about the reported listing fees that Binance was charging.  Christopher Franko, the co-founder of Expanse, submitted a listing request in early August.  According to Franko, Binance contacted him and requested a $2.6 million payment to list his coin.  This approach is problematic for small projects as they can’t afford to pay the fee. Only the biggest projects which are extremely well capitalized and have money to burn can get listed on the most popular exchanges.

In October, Binance issued a listing fee update.  The company now claims that the exchange “will make all listing fees transparent and donate 100% of them to charity.  Project teams will still propose the number they would like to provide for a “listing fee,” or now more appropriately called a ‘donation.’ Binance will not dictate a number, nor is there a minimum required listing fee.”

Small Exchanges Offer An Alternative

Crypto projects that aren’t as resource rich will have a very difficult time getting listed on the most popular exchanges.  The expensive initial listing requirement will consequently relegate many projects to listing on smaller exchanges such as KuCoin, OKEx, and Cryptopia.   While there is nothing wrong with these exchanges, volume isn’t as pronounced as it is on the largest exchanges.

Instead of generating revenue from expensive initial listing fees, these small exchanges rely on trading volume for the bulk of their revenue.  From 2017 through the early part of 2018, that wasn’t a problem.  Cryptocurrency trading volume exploded as retail and institutional money flooded into the market.  Both traders and exchanges were reaping the benefits.  But now that crypto has been in a prolonged bear market, volume has cooled off.  Some of the small exchanges now rely on other gimmicks to generate revenue.

Many of the gimmicks center around advertising/marketing expenses.  For example, on Cryptopia, companies can pay fees to have their coin advertised on the trading landing page.

Bribes To Maintain Listing

While there is nothing wrong with generating revenue from advertising, there have been some troubling reports lately about exchanges asking coins to engage in “liquidity management.”  Rahul Sood, the Chief Executive Officer of Unikrn, recently took to Twitter to let the world know that both OKEx and KuCoin had delisted his UKG token because he refused to engage in liquidity management.

Sood made it clear that he was entirely focused on building his business and not trying to “game” volume to appease the likes of OKEx and KuCoin.  And Sood certainly isn’t the only crypto executive who’s voicing his frustration.  David Koepsell, CEO of Encrypgen, also stated on Telegram that Encrypgen’s token, DNA, was delisted on KuCoin because he refused to pay a bribe.

It’s unclear what bribe KuCoin was asking for but most likely related to a fee for “market making.”  Unfortunately, given the current lack of trading volume in the crypto markets, these small exchanges have had to resort to questionable tactics to bring in additional revenue.

Conclusion

KuCoin and OKEx don’t appear to be playing the long game.  They are delisting solid coins like UKG and DNA that refuse to pay bribes.  While that may not be a problem now, it may become one in the future when the volume returns to the alt market.  Projects that were delisted for refusing to pay a bribe won’t return and, instead, will take their business elsewhere.

One bright spot in the story is that Cryptopia doesn’t appear to engage in the same questionable tactics.  While the company does charge a small fee for an exchange listing, there are no reports of demanding coins pay a market making fee to stay listed.  Since the OKEx and KuCoin delisting, Encrypgen’s volume has exploded on Cryptopia.  Only time will tell but Cryptopia may end up being the big winner in all of this.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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