Intro to Order Types

by LaTisha on May 10, 2012

I’ve mentioned short selling and I’m sure you are familiar with buying or going long a stock but it never hurts to have a refresher and learn more about the markets. So with that in mind, let’s take a look at types of stock market orders.

Types of Stock Market Orders

Buy Order

This is one of the basics. When you want to buy a stock, you put some cash in your stock market account that is placed with a broker and you place an order to buy. If the price of the stock goes up, you will make money and if the price goes down, you will lose money. It’s pretty straightforward here.

Sell Order

Another one of the basics. After you have purchased a stock and you are ready to get rid of it, you would place a sell order with your broker and they would sell the stock on your behalf and deposit the cash from the sell back in your account.

Short Sell and Buy to Cover

One quick variation on the buy and sell is the short sell and the buy to cover. With these two trades you are selling a stock that you don’t own, shorting, and when you are ready to exit the trade, you would buy to cover the trade. The borrowing of the stock to short is handled by your broker as well as when it is time to buy to cover the short.

Timing of Trades

There are two time periods that you can trade, during market hours and after market hours. Pretty simple. But most of the time, orders that go in when the market is open are completed pretty quickly, while orders that are placed during after hours or when the market is closed are filled as needed. There is trading before the market opens and after the market closes but you will need to place a special type of order.

Limit Orders and Stop Orders

After hours trading requires special orders. A limit order is placed at a specific price and is an order to buy or sell a stock at a specific price or better. Limit orders are not guaranteed to execute. It depends on if the stock market’s price reaches the limit price. This type of order is good if you want to specify a price. Stop orders are instructions to buy or sell once a trigger price is hit. This order is also does not guarantee execution and the actual execution price could be far away from the stop price.

Good for the Day and Good Til Canceled

When you place an order with your broker, they will typically ask you to select if you want this order to be good for the day or good til canceled. Good for the day orders will stay live until the market closes, then they will be erased from the books. If you designate your order as good til canceled, it will stay live on the books until it is canceled by the market maker. Each brokerage firm has a different amount of time designated for GTC orders. One broker I am familiar with allows one month for good til canceled orders.

Congrats! Now you know a little more about the different trade types available to you. The SEC (Securities and Exchange Commission) has a great tutorial for investors that covers trade execution. Be sure you learn before you invest.

Do you use different types of orders when you are trading and investing?

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Yakezie Blog Swap #20 Round Up

by melissa on May 6, 2012

This month Fiscal Phoenix participated in the 20th Yakezie blog swap.  The topic selected for us all to write about was as follows relating to wedding spending. According to the Huffington Post, the average wedding cost in 2011 was $27,021. Looking at this statistic, why do you think people spend so much on weddings? Do you think it’s worth the money? How do people afford weddings that cost $27k if the national savings rate is so bad? What are the long-term financial ramifications of an expensive wedding? What tips do you have to help people save money on weddings?

There were 10 bloggers who participated in the swap this time around. The various posts written are described below:

My Post

eemusings from Musings of an Abstract Aucklander shares some thoughts about how she intends to save money on her upcoming wedding on this site.
I shared that our  250 person wedding cost only $6,000 on Musings of an Abstract Aucklander.

The Rest

Kathleen from Frugal Portland wrote about if a wedding is worth the down payment on a house on My Personal Finance Journey.

My Personal Finance Journey wrote about why people spend so much on weddings and possible ways to save some money on Frugal Portland.

Nick from Step Away from the Mall writes a fascinating article about his first-hand experiences with inviting 350-400 people to his wedding and how it can easily cost a ton of money on Daily Money Shot.

Jana from Daily Money Shot wrote about the various ways she saved money on her wedding on Step Away from the Mall.

Edward Antrobus wrote about why weddings cost so much these days and how he kept the cost of his wedding to $200 on Evolving Personal Finance.
Emily from Evolving Personal Finance shares first-hand experiences from her wedding planning about why weddings cost so much, how people finance weddings, and also money saving tips on Edward Antrobus. I really liked how she placed on emphasis on the importance of prioritizing what is important to the bride and groom in the wedding in order to maximize value.
Marissa from Thirty Six Months shares several tips to save money on a wedding on Call Me What You Want Even Cheap.
Call Me What You Want Even Cheap wrote about how weddings don’t need to cost an arm and a leg on Thirty Six Months.
How about you all? Why do you think people spend so much money on weddings these days? Is it worth it? What tips do you know of that people have used to save some money?

Share your experiences by commenting below!

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How I Plan to Reduce My Wedding Expense – A Guest Post

by melissa on May 4, 2012

This post is part of a Yakezie blog swap where all participating bloggers answer the question, “Why do you think so many people spend so much on weddings?  Do you think it’s worth the money?”   You can read my post at Musings of an Abstract Aucklander.

I’ve never been the kind of girl who wasted spent any spare time daydreaming about her wedding day. For most of my childhood I was dead set on being a spinster, actually.

But life happens and minds change. I have a ring on my finger (most days) and after a year of being engaged, right now I’m finally in the very nascent stages of wedding planning: it’s all theoretical (no date, no venue, etc).

What I do know is that I want an intimate wedding that reflects US. I’ve only been to one wedding in my entire life – an Indian extravaganza for one of my high school friends. The couple literally sit up on a stage in front of the crowd – and while the wedding was beautiful and epic in scale, it’s the exact opposite of how I imagine mine. I hate formality; I hate being the centre of attention; I hate fuss and fussiness.

Here’s what I DO want for my wedding that is going to help design the kind of day that suits us as a couple, and – BONUS – keep costs down.

A quirky venue

I haven’t yet pinned down a venue/s (but I think I’m close). This was a toughie. A church was never on the cards; I don’t personally have anything against them, and in fact, we have a ton of breathtaking ones around here that would be stunning for a ceremony and photos. But neither T or I are religious. We haven’t stepped inside a church for years. And doing so merely to get married seems incongruous and downright phony.

Vineyards or hotels (also very popular choices) aren’t really our kind of places, either. Instead, we’re looking at halls, community venues, sports/yacht clubs, galleries, cool restaurants or cafes, and public buildings/spaces. I got some great ideas from local wedding message boards and simply from talking to other people in person. Keep an open mind and your ear to the ground.

A simple dress

No froufrou, no veil, no tulle, no train, no lace, no frills, no CRAP. I intend to find a nontraditional dress – NOT a “gown” – and pay in the three digits for it (or possibly ask my MIL to make one for me). I’m thinking something long, sleek and simple, or a cocktail-style, knee-length flirty number. And if things get desperate, I’ll just recycle my white Grecian dress from my high school ball.

No live band

The first order of my engagement was to knock up a playlist – and that was literally the only thing I did, apart from putting some thought into the honeymoon, that I did all of last year. This runs the gamut from Elton John to Mudvayne to Kylie Minogue to U2. I do not believe any band could do my playlist justice.

No flowers

Flipping idly through a wedding magazine the other day, I saw the suggestion to set aside 10 percent of the budget for flowers. Luckily, I didn’t have food or drink in my mouth at the time, or I no doubt would have projectile spat it across the room. Flowers are up there just above jewellery in my books when it comes to useless frippery (yes, I have a ring, but it’s a family hand-me-down, and only worth just over a grand, and it’s the only accessory I wear). Flowers make me sneeze, before wilting and dying. I’d rather spend 10 percent on getting in a pro photographer.

No alcohol

This is probably going to be controversial, and we’ll have to work out the details. This is not a cost-driven decision. This comes down to the fact that some of the guests that have to be invited (immediate family) simply cannot be allowed to drink. They cannot do so in a civilised fashion. Their family get togethers are rare, thankfully, but always involve booze, and always end in fist fights, blood spills, holes punched in walls or car wrecks. I am deadly serious. I have seen more than a couple of these firsthand, tried to intervene even, and it is quite frightening. I will not risk any of that happening.

Thrifty favours

If we bother with favours, they’ll probably be along the lines of little chocolates or something edible. We’re all about food. That, or we might splash out on something fun like a photo booth.

Videographer

I do want to have professional shots of the day, but video is another beast entirely. Neither of us is all that comfortable with cameras; iPhone footage of key moments will more than suffice.

They say the average wedding costs $20-30k. Having done a little bit of research, the number that originally made my jaw drop now doesn’t seem so far-fetched. But I still plan to throw ours for a four-figure sum; I’m saving the big budget for the honeymoon – Europe, or possibly a spot of long-term travel, depending how things pan out for both of us work-wise.

Of course, the cheapest way to get married is just to do the registry thing. But I’d like to make an occasion of it – create some memories with our closest friends and celebrate our 7-years-and-counting relationship moving into the next phase.

eemusings is a 20-something New Zealander chasing that elusive trifecta of health, wealth and happiness, and blogs about personal finance, travel, career, relationships, food and more at Musings of an Abstract Aucklander

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5 Ways to Advance Your Skills At Work

by Jana on April 17, 2012

One of the dangers of working in a government job is previously accumulated and sharp skills languish. In many positions, the skills acquired prior to the job lapse as we become more acclimated to the systems, paperwork and language of our new job.  It’s easy to become complacent and forget that there’s a whole world out there that does not use the skills you’re learning.

But what if you’re someone who is averse to standing still? What if you like to learn and acquire new skills not only to improve your job performance but improve yourself? What if you don’t want to stay in the same position for your entire career and you know the only way to advance is to acquire or polish old (or new) skills? How do you do this in an environment that doesn’t promote those opportunities?

Fortunately, it’s easier than it seems. You have to dig deep and be proactive in order to acquire new skills, but it’s not a hopeless situation.  Here are some ways to build or advance skills:

  • Take a class at a community college or through an online program. This is probably the most expensive option since you’ll have to pay for it yourself. But if you can manage it, this is a way not only to advance your skill set but it’s a great way to network with others. You never know what kind of opportunities you’ll learn about by meeting people outside of your office.
  • Self-teach. Books from the library, blogs, YouTube videos…those are all cost effective ways of teaching yourself a skill. For instance, I know almost nothing about coding for websites but it’s a skill that I want to learn. When I’m playing around with my personal blog and I’m stuck on a particular issue, I’ll do a quick Google search and I can usually find the answer. Which not only makes me proud of myself but it also means that the knowledge will stick with me.  And the best part? It’s free!
  • Ask a co-worker. If you have a co-worker who has a particular skill that you want to learn, ask him or her if she wouldn’t mind teaching you. Don’t be afraid to ask. In my experience, most people are very willing to teach someone what they know. And, if you’re afraid of looking foolish, don’t. Because at one point, the expert you’re asking didn’t know anything either.  As someone who’s been on both the asking and the teaching end of this, I can tell you that is an extremely effective method for learning.
  • Join a professional network. Similar to taking a class at a community college, this could be a pricey option but the benefits are worth the price. Many professional networks offer continuing education options for members or even one day workshops. They often offer online resources for skill building, as well as host of members you can use as teachers or mentors.
  • Attend work sponsored conferences and workshops. While your workplace may not provide specific trainings, there are often conferences and workshops that provide a cursory overview of certain skills. Even a 3 hour workshop can provide you withbackground knowledge and, in some instances, it might be enough to give you an advantage over someone else. And, since they’re work sponsored, they’re typically free.

Readers, how do you develop your skills in an environment that doesn’t allow for those opportunities?

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Is Short Selling Bad?

by LaTisha on April 13, 2012

I have to admit, short selling gets a bad name. Mostly because people associate it with negativity. When you buy or go long a stock, you are expecting the price to rise and you will make money if it does. If the company does a great job running the business, there is a great chance that the stock price will go up and you as the long buyer will make a profit from this price appreciation. If you sell or short a stock, you only make money if the price of the stock goes down. If the company has a hard time making its estimates and projections and misses earnings expectations, the stock price will probably go down, then you as the short seller would make a profit from this price depreciation. Let’s look at short selling a bit further and see how it could actually be good for your portfolio.

What is Short Selling?

Like I mentioned earlier, short selling is taking the pessimistic side of the trade. As a short seller, you want the stock price to drop so that you will make a profit. Many short sellers look for weakness in the stock based on technicals or weakness in the overall company or industry based on fundamentals. When you decide to short a stock, your broker allows you to borrow shares and you sell them on the market. You are assuming that the price is high and you want to buy the shares when they are low. Remember that buying low and selling high is the only way to make money in the markets. But with short selling, you first sell high then buy low. The major difference between going long and selling short is that if you buy a stock the most you could lose is everything you put in. The stock could go to zero and you would be out immediately. But with short selling a high price hurts you. And there is no limit on how high the price could go. As the price rises you lose more and more money and there is no stopping it. Unless you get a margin call.

Ways to Short Sell without Short Selling

If you want to sell stocks short, most brokers will require you to have a margin account. That way if the price of the stock does continue to rise, you can cover any potential loses with what is in your margin account. However, if you run out of margin, you will get what is known as a margin call. Then you will have to deposit cash or securities to get back in the game. But there are ways to get in on the short side of the trade without risking as much.

Buy Puts

Probably one of the most efficient ways to take advantage of a weakness in a stock is to buy a put with a strike price that reflects your thoughts on where the stock price will be in a certain time frame. Buying a put gives you the right to sell the stock at a certain pre-determined price called the strike price. I haven’t written about options yet here but you can see the introductory post I did at my site if you are interested in learning more about options right now.

Buy the Reverse Trade

Another way to get in on the short side is to buy the opposite trade. Let’s say that you assume the stock price of a major computer manufacturer will drop in the next few weeks based on weak earnings. Who is the major competitor that would stand to gain? Perhaps you can make money by buying the competitor instead.

Exchange Traded Funds

Exchange traded funds are also a good way to get in on the short side especially when you are pessimistic an entire market or industry. If you think emerging markets are going the way of the dog, there are ETFs that ‘short’ emerging markets as a whole and you could buy that ETF and be in on the short side.

What are your thoughts on short selling? Is it as bad as it seems? Would you consider short selling in your portfolio?

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What Not to Wear to Work

by Jana on April 10, 2012

My workplace has a very lax dress code. It started a couple of winters ago when the weather was really bad. Our cabinet secretary relaxed the business casual dress to code to allow us to wear jeans every day (since no one really wanted to ruin their nice clothes in the snow and slush). She extended it indefinitely and here we are, over a year later and I get to wear jeans to work all the time. It’s not too bad considering wearing jeans saves me a ton of money on a work wardrobe.

There are some rules. No flip flops, low cut shirts, shorts or tank tops. If we are attending a meeting or have to be in court, we must wear business clothes (this is fine for me as business clothes are usually a pair of dress pants and a button down shirt). I don’t mind the rules because overall, I’m happy with the dress code and I’m not going to do anything to mess it up.

This is the only job I’ve had where the person in charge allows for such casual attire every day of the week. All of my other jobs required business casual Monday-Thursday, with dress down Fridays. It’s dress down Fridays that we’re going to talk about now.

You know that episode of The Office where Dunder Mifflin institutes casual Friday and what the workers show up in is…less than acceptable? I’ve seen similar around my various workplaces and it frustrates me to no end. Not so much because I’m conservative but because there are unspoken rules about what is and what is not acceptable attire in the workplace. For instance:

  • Pajamas. Are never, ever acceptable to wear to work. Unless you work from home, in which case pajamas are probably your uniform. But if you work in an office, around other people, have the courtesy to get dressed. Putting on a pair of jeans and a t-shirt is not hard work.  Coming to work in your pajamas shows a lack of respect for the workplace and is definitely a way to get yourself into some hot water.
  • Sweats. There are a good number of women I’ve worked who dress to the nines Monday-Thursday and then show up on Fridays in what I would wear to clean my house. Dirty, wrinkled sweats, stained shirts from various vacations spots they’ve been to, and grimy sneakers. Believe me, I don’t begrudge anyone her comfort. But if you’re going to wear sweats and t-shirts to work, make sure they’re clean and presentable.
  • Mismatched clothes. Remember Punky Brewster? How she never matched? Well, believe it or not, there are people—adults—that come to work dressed like that. I’ll never forget the woman who came to work in a tie-dyed shirt, olive colored sweats, athletic socks and opened toed sandals. It was a disaster and completely unprofessional. Dressing like this is not a good way to get people to take you seriously.
  • Jeans or shirts that are too tight. You know those people I’m talking about. The jeans that show a little too much or shirts that are way too revealing. Clothes that are fine if you’re in a bar or at home but show way too much for the office. Not only can this be deemed inappropriate by your co-workers and supervisors, you have to take note of the clients’ response as well. I worked with a woman who dressed like this daily and our clients were teenage boys. This had an…influence on their behavior when she was around. It got so bad our boss sent around a memo revising the dress code and she was reprimanded for her clothes. That’s not really a mark you want.

We don’t like to think that how we dress at work has an influence on how we’re perceived, but it definitely does. And how you dress on casual Friday is just as important as the rest of the week.

Photo courtesy of diaper via Flickr.

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Good meeting habits to practice now

April 3, 2012

As a government worker, I’ve attended my fair share of meetings (and I’ve probably attended your fair share of meetings). Where I work, people love to meet. In one of my previous positions, my unit would hold meetings to talk about when we would hold meetings. It was ridiculous how much time was wasting sitting [...]

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Getting Gazelle Intense to Pay Down Debt? Consider Selling Your Car

April 1, 2012

A two car family is part of the American Dream along with a house you own (complete with a white picket fence), two kids and maybe a dog.  The problem is that the pursuit of the American Dream and the desire to keep up with the Joneses’ has left many Americans deep in debt.  Once [...]

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Recovering From a Bad Job Interview

March 27, 2012

I recently wrote about what happens when a good job interview goes bad. It’s a terrible experience to know that you’ve blown an opportunity to get promoted or move laterally into a better position. But it’s not something that we can use as reason to never try again. Recovering from a bad job interview takes [...]

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Reinvesting with Dividend Paying Stocks

March 22, 2012

Dividend Reinvestment There is a distinct power that dividends have. If you are familiar with compounding interest, you know that when you deposit a small amount, it has the ability to grow into a larger amount just based on the interest that grows on top of interest. When you start investing in stocks, you will [...]

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