| By Cindy permanent
Valerie Scruggs trade stock options, which from her job as an IT manager two years ago.
Scruggs, lives on Manhattan's Upper West Side, so at first it was a way to make ends meet. But then she started on it for a primary income. “It seemed like a good way to make money no matter which way the market went,” Scruggs says. - Financial Shorts Are Returning
Other investors like Scruggs are fed up with money in the markets and begin to regain control over their own finances. And with many portfolios by 50 percent over the past year, they feel they can not be worse than their broker or financial advisor. “There’s a broader trend of people feeling disenfranchised with the way the financial-services industry works,” says Kurt Oeler, a spokesman for optionMonster, a web site for investors to trade options. “They think: ‘I’ve got to be more active in managing my finances.' ” For some, that means do-it-yourself investing. Not just day traders-those who are short-term gains with rapid trading in these shares, investors feel confident enough of their own portfolios.
"I find that more so with men," says Stacy Francis a financial adviser and founder of Savvy Ladies, a finance group for women. " They say, 'I might as well do this myself.' "
The danger, of course, is that the amateur investors can not even more money by using them on their own. And a relative few are good enough to live by their trading partners.
Scruggs, for one, she says some money for a few good options, but their relationship is not enough to pay their living expenses. My plan is to return to work, save money at their base, and try again.
Still, that not more people from other try.
On the last option monster conference in New York City, attendance was up 20 percent from November conference in Chicago, the company says. The people were there to learn the basics of trading options contracts with financial implications, you have the right to purchase and sell securities at a specified price, allowing you to bet on the future of security without owning it.
The participants were very different - in geography, and employment status - from money managers, want to start branching into the options that retirees looking to supplement their income and the recently unemployed are looking to create income through options trading.
Charles Lamb, an independent asset manager from Boston, came to learn more about options as a potential investment for its customers. “I’m here to learn,” the 20-year industry veteran says. “Anybody can make money when the market goes up. I’m looking for alternatives, given the situation today. How can I help my clients preserve their capital?”
Kostiuck Bob, a retired IT consultant from Toronto, has been trading in options for the past year and a half. He uses as a commercial insurance option for shares he owns, and in some cases, the bet on a company-neutral Outlook. But he decided to participate in the Conference, because he's not doing as well as he thinks he should be.
“When I started trading options, the markets were somewhere else," he says. "I had income I could live nicely on. I’m not living as nicely now.”
Investors are often options, because the scope is much smaller than the owner of a share victory bet. Options give you a variety of ways to bet on a stock of the direction from which asks the basic bet stocks will move up and lays down a bet on the stock go down-to-straddles and strangles, where you can to a large momentum comes.
Options, more flexibility and more of the investors with a sense of control - this is just something in those days.
Francis said she can also see more interest from investors to increase their financial IQ, the estimate that the attendance at their seminars Savvy Ladies is up 20 percent from a year ago. “It makes them realize that they do need to be educated," she adds. "They do need to understand this information — whether they’re working with a financial advisor or not.” Slideshows on CNBC.com
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Barry Armstrong, a financial planner and the host of “Money Matters” on 1060 WBIX radio in Boston, says the demographic for his radio show is widening, too.
“It used to be a lot of older people,” he says. “Now, it’s a lot of 30 and 40 somethings that are listening.”
The job losses are what scares them the most, he says.
“Either they lost their job, or their friend lost their job and they’re worried about losing their job,” he says. “They’re paying more attention to their money. The savings rate is higher today than at any time since 1993.”
“ It’s not just senior citizens that are saving — everybody is socking money in the bank because they’re paranoid,” he adds. “And with good reason.”
Both Francis and Armstrong said they’re getting a lot of inquiries from investors about gold. Of course, the problem with that is that by the time most individual investors notice a trend, they’ve missed the trade.
Plus, there are lions in the grass who can smell the fear.
“There’s a lot of fear mongers out there that are trying to profit from people’s emotions right now,” Armstrong says. He cites ads that tempt investors with shiny gold coins and the prospect that gold could go to $2,000 an ounce.
The reality, he believes, is that gold could go to $500 an ounce.
Francis says what they’ve recently invested in is the Vanguard REIT exchange-traded fund and in high-yield bonds because both have been beaten down so much.
Armstrong says he likes corporate bonds, given that the spreads between Treasurys and corporate bonds are at record levels. He said he’s getting clients yields of anywhere from 6 to 9 percent but he’s not going out longer than 5 years.
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Armstrong said he’s OK with investors going it alone — as long as they know the risk.
Francis said the only thing she worries about with scorned investors taking matters into their own hands is that they’ll throw all their money in cash.
“They’ll miss the rebound — which happens quickly with very little prior notice,” she cautioned.
“It’s like training for a marathon,” Francis said. “The last couple miles are the hardest. But if you can stick with it, when you cross that finish line, it’s going to be incredibly sweet!” |
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