Investment Dark Pools

A dark pool is a trading platform that allows investors to trade in large blocks beyond the public quoting system. Dark pools of liquidity have been around for years but, have been increasing in presence in the U.S. equities markets and they are creating concerns that investors will retreat from the public quoting system that most people are familiar with and plunge into the dark pools causing a problem with efficiency and price transparency in the equity market, characteristics that drive a healthy market.
A keynote speech by Eric R Sirri Director for the Division of Trading and Markets of the Securities and Exchange Commission at the Dark Pool Symposium on February 1, 2008 details one of the most fascinating areas of investing--dark pools.
A dark pool makes it possible for an investor to trade with out displaying their full scale of trading interest.
The dark services offered--range from floor brokers to the undisplayed size and order of a trade in an automated electronic communication network(ECN) or an alternative trading system(ATS)
The key that makes it a dark trade is that it is undisplayed.
The main concern about dark pools is that they will become a threat to the public quoting system and cause the markets to be less transparent. Au contraire mon frere! Studies show that the volume of trades have not shifted out of the public quoting system and into the dark side.
Another concern is that dark pool investing platforms will create a problem with efficiency in the equities markets but over the past few years Director Sirri says that efficiency has improved.
http://www.sec.gov/news/speech/2008/spch020108ers.htm

How To Make It Through The Financial Crises

"In the long run, Americans have good reason to be confident in our economic strength. America has the most talented, productive, and entrepreneurial workers in the world. This country is the best country in the world to invest and do business in. Consumers around the world continue to seek out American products as evidenced by record-high exports. We have a flexible and resilient system that absorbs challenges and makes corrections and bounces back." President George W. Bush, September 19, 2008--White House Press release.

In the long run according to President Bush, we should be okay. So, what is happening now and where is the best place to invest right now to make it through the financial crises that we are in?
Do you remember back in January when there was a huge problem with sub prime mortgages and things seemed to be falling apart then? Well guess what? They have! To some extent, that is.

A sub prime mortgage loan is a loan made to a high risk individual. When this was going on investors were buying homes as speculative investments and getting these sub prime loans to finance the houses thinking that they would sell them later on. When housing prices fell in many locations around the country these high risk loan holders just walked away and these homes went into foreclosure. The majority of average home owners are paying their mortgages and paying back their debt however. The sub prime lending problem has shot through the veins of the financial system to the point where we are now in crises mode and it is difficult for individuals as well as business to obtain credit. What the government plans to do is to buy up all of the toxic mortgages and try to stabilize the financial markets.

Over the next few months and into the next year, the economy will continue to be weak and turbulent. There is talk about stagflation where you will see both high interest rates and high inflation--that's not a good thing.

The best place to invest your money is in non-cyclical. Think about things that people have to have in their lives like Grocery, Pharmaceutical, and Utility stocks. If you are not comfortable about investing in stocks or bonds right now, consider a short term Certificate of Deposit or a good Money Market account. Try to pay down your debt so that you have a credit cushion and try to build a cash emergency fund of three months worth of expenses in case you get laid off.

Dollar Cost Averaging---Is It A Good Idea?

The concept of dollar cost averaging is that you take an amount of money say $200 and invest it at the same time every month or every quarter, what ever! You just invest the same amount at the same interval. When the market is low you pick up more shares of a particular stock or mutual fund. Over a long period of time like several years this technique helps to reduce market risk and effectively helps you to save and invest. If you invest in a mutual fund this will also help you to reduce the risk of a particular company as well.

If you have a gigantic amount of money to invest like an inheritance, I would invest the whole enchilada at once rather than eek it out over time using the dollar cost method. I think that a sound portfolio over the same period of time would give you a better return. I mean, I would never let a large chunk sit in a savings account slacking off like a loser when it can be working for me! A good mix for a portfolio is to take 100 and subtract your age--put this percentage into stocks, take %10 and keep it in cash and put the rest in a bond fund or Treasury bonds, or corporate bonds.

If you are struggling to save and invest I would go with the dollar cost averaging technique. You can set up a good stock mutual fund for about $2500 and add the $200 at the same day of each month. You can have the amount automatically transferred into your investment account.

If investing is new to you, select a brokerage house that has a good reputation and that has been around for a long period of time. My favorite is Fidelity Investments. They have excellent customer service and management.