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Apparently no company is exempt, not even ING, which remained relatively quiet over the past year as the mortgage crisis ravaged hundreds of other seemingly unbreakable financial institutions.

The Dutch Bank said today it expects to lose 3.3 billion euros in the fourth quarter as a result of bad mortgage bets, pushing the company to a 1 billion euro loss for all of 2008.

“In the fourth quarter market conditions deteriorated sharply, making it the worst quarter for equity and credit markets in over half a century,” the company said in a release.

ING also announced that it would cut 7,000 full-time positions in 2009, among other cost-cutting efforts, which should save the company more than one billion euros annually from 2010 onwards.

At the same time, the banking giant will receive government support for its souring home loan portfolio here in the United States (sorry Holland).

The bank has struck a deal with the Dutch government to provide a back-up facility for illiquid assets, namely a 27.7 billion euro portfolio of Alt-A mortgage securities held at ING Direct USA and ING Insurance Americas.

ING will remain the sole owner of the securities, but will only be exposed to 20 percent of the results on the portfolio, with the Dutch State entitled to the remainder, whether profits or losses.

“With this agreement, we take a firm stride to reduce the risks on our balance sheet,” said Jan Hommen, Chairman and CEO-designate of ING.  “We much appreciate the measures the Dutch government is taking in this phase to restore confidence in the financial sector and stimulate the economy and thank them for reaching this agreement.”

In late November, ING Direct said it would suspend foreclosure sales on owner-occupied properties through the end of March.

The American unit of the Dutch bank provides hybrid adjustable-rate mortgages and online savings accounts.

(photo: birdeyes)

Source: thetruthaboutmortgage.com

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From the artsy enclave of Santa Fe to the majestic desert landscapes of multi-colored rock canyons or rolling sand dunes, New Mexico has always held a special allure for those looking to escape to the American Southwest. Nicknamed the Land of Enchantment, New Mexico is home to vibrant cities and towns, as well as nearby mountains, deserts, forests and rivers ripe for outdoor recreation.

These beautiful landscapes have long served as an inspiration for artists like Georgia O’Keeffe. With blended multicultural influences from local Indigenous groups like the Puebloans and the Spanish, the state boasts a rich history. Its small towns and cities are hubs for art and culture, as well as dining and shopping. Locals even jokingly call it the Land of Entrapment because once you live there, you fall in love and don’t want to leave.

But, in recent years, more people have been moving to the American Southwest in search of wide, open spaces and more affordable cost of living. If you’re considering moving to New Mexico, you’re probably wondering if this trend has driven up prices. For the most part, no. The overall cost of living in New Mexico falls below the national average. But some things like housing or transportation are more expensive than others. Let’s take a closer look at New Mexico‘s cost of living and what you’ll be paying for essentials in different cities around the state.

New Mexico housing prices

If you’re looking for affordable housing in the Southwest, you’ll be happy in New Mexico. The cost of living in New Mexico for housing fall well below the national average for some of the bigger cities.

Albuquerque

Located in central New Mexico, Albuquerque is the biggest city in the state. It’s also growing, drawing new residents with its historic Old Town, great dining, excellent shopping, eclectic arts scene and access to outdoor recreation in the nearby Sandia Mountains. Fun cultural events like the annual International Balloon Fiesta are another plus of living here. Pop culture and the film industry have also helped draw more attention to the city. It was the setting of “Breaking Bad” and many films and TV shows film here.

As if all the above wasn’t enough reason to call ABQ home, its housing costs are also very affordable. It’s one of the cheapest big cities in America. The cost of housing here is 12.6 percent below the national average. Renting a one-bedroom apartment here will cost you an average of $1,141 per month. If you want more space, two-bedroom apartments are a big price jump to $1,457. These rates are up 15 and 23 percent, respectively, from last year. This shows that Albuquerque’s growing popularity is raising prices.

The Albuquerque housing market has also grown, rising 20.7 percent from last year. If you want to purchase a home around Albuquerque, the median sales price is $326,000. This is cheaper than the national average of $430,695.

Las Cruces

Located at the far southern end of the state, Las Cruces is also growing quickly. This scenic city is best known for nearby attractions like the ivory dunes of White Sands National Park. From summertime hiking to wintertime skiing in nearby Cloudcroft, it’s a great place for outdoorsy types. El Paso is also a hop and a skip away for lively city activities.

Las Cruces is 18.3 percent below the national average, making it the most affordable city on our list. One-bedroom apartments cost an average of $875 per month. For just $100 more, you can size up to a two-bedroom unit for $975. These rates are up 25 and 14 percent, respectively, from last year.

The cost of buying a house in Las Cruces is also the cheapest of our three highlighted cities. Up 18.6 percent from last year, the median sales price is $255,000.

Rio Rancho

Rio Rancho is part of the Albuquerque metro area. With its quiet, family-friendly neighborhoods, great schools and low crime, it’s considered one of the best places to live in New Mexico. Lots of people move here seeking affordable cost of living close to Albuquerque, driving up rent prices and home prices over the past year. At only 2.8 percent below the national average, Rio Rancho is the most expensive city for housing costs of our highlighted New Mexico cities.

One-bedroom and two-bedroom apartments are cheaper than in Albuquerque. The average rent for a one-bedroom is $1,077, up 27 percent from last year. Two-bedroom apartments are up 20 percent to $1,210. While these rates are affordable, they’re clearly climbing fast.

Rio Rancho home prices are also up 17.6 percent from last year. The median sales price for a home around Rio Rancho is $340,000. Since both rental rates and the housing market have grown significantly over the past year, the trend will continue.

Santa Fe

The capital city of Santa Fe is the main area you want to avoid if you’re looking for lower rents and cheaper home prices. People flock to Santa Fe for its vibrant arts scene, cozy small-town feel, unique architecture and laid-back atmosphere. It’s also a fantastic place to live if you’re a foodie or chef thanks to its incredible dining scene.

It’s also a popular market for luxury second homes. This is driving up housing costs and diminishing available units and homes. A one-bedroom apartment here costs $1,717. Luckily, two of New Mexico’s most affordable cities are within an hour’s drive of Santa Fe, so you can visit quite frequently. Home prices are also above the national median of $430,695, coming in at $547,450, a 10.6 percent increase over 2021.

Now that you’ve seen how high rent can get in Santa Fe, let’s see what rent and housing costs are like in other New Mexican cities.

New Mexico food prices

From spicy green chile stew to fluffy sopaipillas, New Mexican cuisine is one of the best parts of living here. Luckily, the overall cost of living in New Mexico for food is 5.4 percent below the national average. New Mexicans spend between $2,400 and $2,800 per person annually. This breaks down to between $200 and $233 per month. That leaves more money for stocking up on green chiles come roasting season in the fall.

However, even though the statewide average is below the national average, the cost of groceries in some cities is higher than the national average:

  • Albuquerque is 0.2 percent above the national average
  • Rio Rancho is 2.2 percent below the national average
  • Las Cruces is 4.8 percent above the national average

Overall, Rio Rancho has the cheapest food prices. Due to its remote location, food costs are highest in Las Cruces. For example, a dozen eggs will cost you $2.09 in Las Cruces compared to $1.95 in Rio Rancho. But their cheapest price is in Albuquerque at $1.86. Some food items are more expensive in cheaper cities. A half-gallon of milk will set you back $3.30 in Rio Rancho, but only $2.19 in Albuquerque. A loaf of bread is the most expensive in Rio Rancho, with a price tag of $3.84. You’ll pay the least for bread in Albuquerque at $3.44.

New Mexico is great for dining out, whether you want some huevos rancheros for breakfast or an upscale dinner. Albuquerque, in particular, is well-known for its restaurants, so you can expect to pay more for dining out here. A three-course meal for two at a nice restaurant will set you back $65 in Albuquerque compared to $45 in Las Cruces. That’s a big difference of 44.44 percent.

New Mexico utility prices

New Mexicans pay significantly below the national average for their utilities like electricity, water and internet. Some areas are cheaper than others, though. Here’s how the cost of living for utilities in these New Mexico cities stacks up to the national average:

  • Albuquerque is 7.8 percent below the national average
  • Rio Rancho is 7.8 percent below the national average
  • Las Cruces is 13 percent below the national average

As you can see, overall, you’ll be paying the least for utilities in Las Cruces. Albuquerque and Rio Rancho are neck-and-neck average-wise. You’ll be paying $150.79 per month for total energy costs in both these cities. But in Las Cruces, you’ll only pay $134.

One important thing know about living in New Mexico is water usage. Like much of the Southwest, New Mexico is in the middle of a historic drought. However, lots of residents know about water scarcity and save water on a daily basis, either through practices like not leaving the faucet running while brushing teeth, taking short showers and not watering your lawn are other methods.

Because of all these water-saving techniques, the average water bill is only $28. The national average is $68. All those water-saving practices pay off not only for the environment but for your wallet also. Here are some other ways you can save water and save money on your water bill if you move to New Mexico.

New Mexico transportation prices

From buses to trains, there are many different ways to get around New Mexican cities and cities. In the center part of the state, the Rail Runner commuter rail connects Santa Fe to Rio Rancho and Albuquerque. Most cities and towns offer some form of mass transit, primarily by bus. Especially in growing areas like the Albuquerque metro area, using public transportation can save you time and money.

The cost of living in New Mexico to for public transit does vary around the state. For the most part, transportation costs are below the national average. But there are some exceptions:

  • Albuquerque is 9.3 percent below the national average
  • Rio Rancho is 2.1 percent below the national average
  • Las Cruces is 2.2 percent above the national average

Albuquerque tops our list with the most affordable transportation of our three highlighted cities. Part of this could be due to the range of different services and routes, as well as its extensive spread throughout the metro area. Las Cruces ranks above the national average for its transportation costs.

Let’s break down what types of public transit you’ll find in each city and what you’ll be paying in fares.

ABQ RIDE and Rio Metro in Albuquerque and Rio Rancho

Consisting of a fleet of buses operating 40 different routes, Albuquerque metro locals use ABQ RIDE to get around the city, Rio Rancho and the metro area. For 2022, the city is implementing a Zero Fare program, making it completely free to ride.

ABQ RIDE also offers other great incentives for locals to ride like the Guaranteed Ride Home program. If you miss your bus for some reason, you can call a number for a safe, free ride home. Another example is ART. The ART (Albuquerque Rapid Transit) route provides fast and easy access along a central corridor through the heart of town. This option is great for students and visitors who want to explore some of ABQ’s coolest neighborhoods.

Rio Metro is the other option, offering bus and commuter rail services. One-way bus fares are $1 per zone. A full month pass costs $30.

Opened in 2006, the New Mexico Rail Runner Express was a splashy new addition to central New Mexico’s mass transit option. This sleek commuter train connects Santa Fe to the Albuquerque metro area. With 15 different stops, it aims to give commuters a faster, more affordable way to get around. It also makes it easier for visitors to explore both Santa Fe and Albuquerque without cars. Zones determine the fares on the Rail Runner. Starting fares are 50 cents for Zone 1, with a top one-way fare for all six zones of $2.50. The top price for a monthly pass is $30.25, with discounts available if purchased online.

Since its transit score is currently 28, Albuquerque has been working hard to shore up support and use of its mass transit. Due to sprawl, it’s also not the most walk-friendly city, either. Its walk score is 53. But many areas are easy to navigate by bike, giving it a higher bike score of 68. Some of the most walkable areas include the Nob Hill university area, downtown and Old Town. Rio Rancho doesn’t fare much better for pedestrians and cyclists. Its walk score is an extremely low 15 and its bike score is 33.

RoadRUNNER Transit in Las Cruces

RoadRUNNER Transit provides bus-based public transit service to residents of Las Cruces and surrounding Mesilla and Doña Ana County. A one-way fare for adults costs $1. Daily passes are $2 and a monthly pass will set you back $30. Reduced fare options are available.

Having a car or using mass transit is essential for getting around Las Cruces. It’s not the most walk or bike-friendly city, with scores of 38 and 48, respectively.

New Mexico healthcare prices

The cost of living in New Mexico for healthcare is a bit of a mixed bag. In some areas, it’s higher than the national average. But in others, it falls far below. But it’s important to not take these figures fully at face value. It’s very difficult to find average healthcare costs for cities or states. Since healthcare costs can fluctuate widely from person to person, costs are very different even within the same area.

If someone has more expensive prescription drugs or a pre-existing condition, naturally their healthcare costs are higher. Someone with fewer health issues will usually pay less for their care. That being said, New Mexico has been pushing hard to bring quality, affordable healthcare to its residents.

Here’s how some New Mexico cities compare to the national average for healthcare costs:

  • Albuquerque is 11.7 percent below the national average
  • Rio Rancho is 2.1 percent above the national average
  • Las Cruces is 5.5 percent above the national average

Healthcare costs are highest in Las Cruces, with Albuquerque being the lowest. Albuquerque is the home of the University of New Mexico, which has a well-regarded school of medicine. As such, hospitals around the city have qualified medical professionals. But in a great example of how variable healthcare costs are, it costs more to go to the doctor in Rio Rancho. Here’s what you can expect to pay for a doctor’s visit in these different cities:

  • Albuquerque: $106.97
  • Rio Rancho: $134.50
  • Las Cruces: $113.39

Going to the dentist will also cost the least in Albuquerque at $99.14 compared to $112.80 in Las Cruces. In general, the most affordable healthcare will be found in the heart of Albuquerque.

New Mexico goods and services prices

Miscellaneous goods and services is a blanket term covering non-essential but regular monthly spending, but still a part of the cost of living in New Mexico.

Say that you spill some delicious green chile stew all over your shirt and need to take it to the dry cleaners. Or, maybe you want to go see a movie, perhaps filmed locally in Albuquerque? Both these activities and services fall under the banner of miscellaneous goods and services.

Since all these costs can add up, it’s important to note if you’re paying more than the national average. Luckily, the cost of goods and services in these New Mexico cities falls below the national average:

  • Albuquerque is 5.8 percent below the national average
  • Rio Rancho is 5.2 percent below the national average
  • Las Cruces is 4.4 percent below the national average

But these costs can still vary widely from city to city. Getting a haircut in Albuquerque costs $35. But in Rio Rancho, it’s $19.35. You’re better off driving or taking the bus over to Rio Rancho to get your hair cut at that price difference. If you want to catch a movie, you’ll pay the least in Las Cruces where tickets are $11.50. In Rio Rancho, it’s a pricier outing at $13.42.

In family-friendly cities like Rio Rancho, it’s especially important to consider childcare costs. The least expensive childcare in the state is found in Las Cruces. There, a month of private preschool or kindergarten costs $550 compared to $640 in Albuquerque. Childcare costs are highest in Rio Rancho at $750 per month for the same kind of care.

Taxes in New Mexico

New Mexico doesn’t have a sales tax. Instead, it levies a gross receipts tax for business owners. However, this cost of living in New Mexico is still passed to the customer. It can either be built into the price of a good or is separately stated to the customer. So, it still impacts prices, and it also varies around the state.

New Mexico’s statewide gross receipts tax is 5 percent. To put that into perspective, if you spend $1,000 stocking up on green chiles in the fall, you’ll pay $50 on top of that. Some New Mexico cities and towns also add their own tax on top of the statewide rate:

  • Albuquerque has a combined tax rate of 7.75 percent
  • Rio Rancho has a combined tax rate of 7.56 percent
  • Las Cruces has a combined tax rate of 8.19 percent

Las Cruces has the highest markup, meaning you’ll be paying the most in tax there. You’ll spend an additional $81.90 on top of every $1,000 you spend there.

How much do you need to earn to live in New Mexico?

When figuring out if you can afford to live somewhere, you need to start with your housing budget. Housing costs usually take the biggest chunk out of a monthly budget. The general rule of thumb is that you shouldn’t spend more than 30 percent of your gross monthly income on housing. That way, you have plenty left over for other essentials, as well as fun activities and savings.

The average rent in New Mexico is $1,333 per month. That means you need to make $4,443 per month or $53,316 annually to follow the 30 percent role. This is pretty close to New Mexico’s median household income of $51,243.

Use our rent calculator to figure out what part of New Mexico fits your rental budget.

Living in New Mexico

Compared to the rising cost of living in other Southwestern states, the cost of living in New Mexico is a refreshing change of pace. For the most part, it’s below the national average. Not only will you be paying less for your quality of life, but you get to take advantage of New Mexico’s many benefits, like scenic landscapes and great dining.

You also have your choice of living in a vibrant big city or a smaller desert town. Overall, living in New Mexico can fit a wide range of budgets and lifestyles.

The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of June 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com

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The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Some people collect luxury goods such as investment pieces. Think of a Birkin bag, art by the legendary Jean-Michel Basquiat or a Rolex. Anything considered timeless or high-quality and that appreciates in value can be called an investment piece.

The luxury market tends to be more resilient than other sectors during economic instability because of high demand, among other factors. That said, is this inflationary period a good time to invest in luxury goods?

Buying luxury goods amid inflation

The U.S. Federal Reserve has raised interest rates 11 times since March 2022 in an attempt to cool inflation. Interest rates are the highest they’ve been in 22 years, and consequently, we’ve seen the cost of borrowing increase and spending on nonessential goods decrease.

While Americans have cut back on spending, the demand for luxury goods is still strong. Research by J.P. Morgan shows a 7% year-over-year increase in the luxury goods market in the fourth quarter of 2022, despite significant price hikes.

Luxury brands raised the prices of their products by almost 17% in 2020 and early 2021 in response to lower sales during COVID-19, according to a 2022 study by KPMG International. This change is significant considering typical price increases are 5% to 10%. These price increases didn’t only benefit luxury brands; people who invested in these goods in prior years may have also seen gains.

Gloria H. Gill, a retiree who we spoke to on Facebook Messenger, said the value of her large classic Chanel bag has more than doubled in about seven years. Gill purchased the bag for $4,800 in Paris in 2016. It now has a market value of around $10,000.

“I have sold bags before, but I doubt I’ll sell this one,” Gill said. “It’s listed in my will, and my sons are aware of its high value.”

Luxury goods can sometimes hedge against inflation when they appreciate in value, says William Huston, founder of Bay Street Capital Holdings, which has offices in Los Angeles, New York and Fremont, California.

“These luxury goods, they do protect against inflation, but they don’t outperform the general stock market,” he says.

As with any investment, there are risks. As Huston points out, your money could potentially earn a higher rate of return elsewhere. Also, your item could get lost or destroyed, or it may be difficult to resell.

Assess your financial foundation first

Before investing in anything, assess your financial situation. For instance, is your emergency fund well stocked? Keep in mind that possessions are considered “illiquid assets” — not quickly convertible to cash if you need it in a pinch.

Also, saving for retirement comes before investing in luxury goods, says Dora Meyer, a certified financial planner at WellAcre Global Wealth Advisors in Santa Monica, California.

“Make sure you are taking advantage of any tax-advantaged accounts, so your 401(k), your Roth IRAs, before you look at investing in something like this. [And] your HSA,” she says.

Meyer also advises, “Be careful [with] buying on credit, especially in this environment when interest rates are a little bit higher.” And she recommends buying from a reputable source to avoid knockoffs.

Investing in timeless pieces

Valerie Schwank owns the Fashionista Consignment Boutique in Coconut Grove, Florida, where she buys and sells luxury goods. Schwank has seen a significant boom in her business since the pandemic began and is an advocate for investing in luxury pieces. She recommends buying timeless and high-quality pieces, as they tend to hold their value.

“I always recommend that you buy a staple,” she says. And by staple, Schwank means “the Chanel classic double flap, no-nonsense handbag, which has been around forever.”

Think about factors like the color and materials of items, too. That often differentiates timeless luxury goods from ones that won’t hold as much value over time. Keeping your items in good shape, especially if you plan to resell, is also important, Schwank says.

Calculating your potential returns

Research how an item has historically performed before purchasing to ensure it’s a worthwhile investment. You can go to luxury resale sites such as Vestiaire Collective, The RealReal and Rebag and check how pieces have appreciated over time.

Huston advises having a financial plan before making a luxury investment. “With the financial plan, you’d be able to see, ‘I’m 30 years old, I’m gonna save $300 a month,’” he says, as an example. That plan can give you context to decide, “’That’s a meaningful amount of money to me and I can afford that $300, and it’s better for me to save $300 in my 401(k) than to buy a watch,’” he says.

You can also improve your investment returns by negotiating when it comes to items like art, he adds.

“A lot of this luxury stuff is negotiable because again, it’s illiquid” and not easily converted to cash, he says. “So if you find the right person selling the right thing at the right time, you can get it for a really good value because they just want to get some of their money back.”

This article was written by NerdWallet and was originally published by The Associated Press.

Source: nerdwallet.com

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Find out how to get started trading cryptocurrency in this step-by-step guide.

This article originally appeared on Finder.com and has been republished here with permission. 

The views and opinions expressed in this article are those of the author only and are not endorsed by Credit.com.

There are lots of different ways of making a profit–or losing money–from cryptocurrency. Trading is one of the most popular.

This guide explains where to begin, including how to choose a trading style, how to devise a trading plan, what to look for in a trading platform and things to consider.

Cryptocurrency Trading

Disclaimer: Information on this page is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk, and past performance is no guarantee of future results. Crypto products and providers come and go as regulations change. Make sure the one you’re interested in is available, and talk with a financial professional before making a decision.

How to Trade Cryptocurrency

There are five steps to getting started:

  1. Do your research and work out whether cryptocurrency trading is right for you.
  2. Decide whether you want to do long term or short term trading.
  3. Choose the trading method that’s right for you.
  4. Learn how to place trades and read charts.
  5. Choose an exchange and start trading.

This guide walks you through each of these steps.

The Different Types of Cryptocurrency Trading

The first step is to decide between long-term or short-term cryptocurrency trading. Both are very different.

Long-Term Trading

Long-term traders buy and hold cryptocurrencies over a long period of weeks, months or even years, with the intention of selling at a profit or using it later.

If you believe the value of a cryptocurrency will grow in the long run, and don’t want the stress of actively trading, then this might be your style, and a good first step may be learning how to safely buy and hold cryptocurrency.

Short-Term Trading

Short-term trading is about taking advantage of short term cryptocurrency price swings by creating and executing a trading strategy.

It’s more active, stressful and risky than long-term trading, but it also offers faster and larger potential returns for those who do it right, and lets you profit from cryptocurrency prices dropping as well as rising.

If this is what you’re looking for, you can either read on for a beginner’s guide or compare cryptocurrency trading platforms to get started.

Choose a Trading Method

The second step is choosing a trading method. This is important, because all of them are quite different and require different techniques. In some cases, the same cryptocurrency exchange will offer several different types of trading.

There are two different ways of making short-term cryptocurrency trades.

1. Trade cryptocurrencies directly against each other

Trade a range of cryptocurrencies against each other, or against fiat currency, aka “real money,” to accumulate more crypto or fiat currency through repeatedly buying low and selling high.

If you do it right, your funds grow.

If you do it wrong, your funds shrink over time, as bad trades and changing markets eat away at your holdings.

The value of your cryptocurrency will rise and fall, but there’s no risk of immediately losing all your money to a bad trade.

✅ Good for: Beginners, accumulating cryptocurrency, avoiding excessive risks, keeping things simple.

❌ Not so good for: High-risk high-reward strategies, profiting from markets dropping.

2. Trade cryptocurrency derivatives

Trade cryptocurrency derivatives, such as Bitcoin futures or Ethereum options. You don’t necessarily have to own any cryptocurrency at all to trade crypto derivatives and can simply bet on the markets if you want.

Derivatives trading offers much more flexibility than simply buying and selling cryptocurrencies, but it’s also more complex and better suited to advanced traders. There are several different types of derivatives, such as futures, options and perpetual swaps, all of which have their own nuances and may be used simultaneously.

Trading crypto derivatives lets you use leverage–magnifying gains and losses–open short positions to directly profit from cryptocurrency price drops, mitigate risks by hedging and make big trades even if the markets are relatively quiet. They can also be a very fast way of losing money.

✅ Good for: Leverage, large profits–or losses–even in flat markets, fast gains or losses, high-risk high-reward strategies, flexibility in any market conditions.

❌ Not so good for: First-time cryptocurrency traders

Cryptocurrency Trading for Beginners

Before you can start trading, you need to be sure cryptocurrency trading is right for your circumstances and that you understand the risks associated with it. You’ll also need to know what all the buttons do.

Fortunately, most cryptocurrency exchanges have similar-looking market pages, and you can safely ignore a lot of the information on the page.

Here’s an example from the Binance cryptocurrency trading platform, showing the Bitcoin/USDT market with the important parts annotated.

The red and green box at the top is the price chart. At the bottom is where you place your buy and sell orders. Sandwiched between the two, in this particular case, is a place where you can click through to derivatives. It’s a completely separate market, where people trade futures contracts rather than Bitcoin itself.

Let’s zoom in on the bottom part, where you place buy and sell orders. There are two things to pay attention to here: your order type and the amount you want to buy or sell.

In this case, Binance offers three basic order types: market, stop-limit and OCO.

  • Market. Place a buy or sell order at the current market price, to execute immediately.
  • Stop-limit. Once you select this, you will be prompted to choose a separate stop price, and limit price. Once the asset (Bitcoin in this case) reaches the stop price, it will sell for at least the limit price, if possible.
  • OCO. “One cancels the other.” This is two stop-limit orders combined, where one cancels the other if it’s triggered.

Market and stop-limit are the basic order types you’ll find on almost all exchanges, while OCO is a bit less common. Different exchanges will sometimes have different order types, and slightly different rules about how they can be placed.

How to Make a Trading Plan

The difference between gambling and trading is having a plan. Creating a plan is a three step process:

1. Look for patterns

The basic principle of reading charts and creating trading plans is to look for patterns in previous price movements, and then use those to try to predict future movements.

Some patterns emerge frequently enough across multiple markets that they’re given their own names, such as resistance and support. But others are much more obscure, and are never given names of their own.

For example, if you think Bitcoin goes up when Ethereum goes down, or that Bitcoin rises when the US dollar falls relative to the Chinese renminbi, or anything else you can think of, that could be a pattern you can trade on.

2. Make a plan and stick to it

The two basic components of a trading plan are:

  • A place where you take profits
  • A place where you cut your losses

For example, someone’s basic plan might be to sell 33% of their Bitcoin for every $1,000 the price goes up (taking profits), or to immediately sell all their Bitcoin if prices drop below the current support line (cutting losses). To lay out this plan, they could set up a series of stop-limit orders.

This is not necessarily a good plan, but it would ensure that the amount they gain or lose is within sensible boundaries no matter what the market does.

As traders get more experienced, they can create increasingly sophisticated trading plans that tie together more market indicators, and allow for much more nuanced trading strategies.

Experienced traders typically use cryptocurrency trading bots to execute their strategies, because they tirelessly follow complex trading plans faster and more reliably than a human ever could.

3. Experiment

It’s good to test trading theories before throwing real money at them. Paper trading or backtesting can be useful here. Both features are often found on trading platforms.

Paper trading is a way of using fake money on the real markets, so you can test a trading strategy in real, current conditions. Backtesting is when you put a trading strategy through historical market movements to see how it would have performed.

If you’re a beginner trying to get your head around the basics of reading charts and spotting patterns, you may want to read the step-by-step guide to cryptocurrency technical analysis for a sense of how to start spotting patterns.

Related read: How to Invest in Stocks: A Guide to Getting Started

What to Watch Out For

Cryptocurrency trading incurs many of the risks of trading on any other market, as well as some unique challenges.

  • Volatility. Cryptocurrency is volatile. This is one of the things that makes it attractive to traders, but it also makes it very risky. Double-digit intraday price swings are common, and drastic shifts can happen in just minutes.
  • Unregulated, manipulated markets. The cryptocurrency markets are largely unregulated compared to more traditional markets. It’s an open secret that wash trading and market manipulation are common. They’re also a lot less liquid than many other markets, which can contribute to the volatility and make it easier for well-moneyed “whales” to manipulate prices, force liquidations and similar. Exchanges themselves are sometimes accused of manipulating their own markets against their own customers.
  • Inaccurate patterns. Markets will often follow patterns, but often they won’t. This is a risk when trading anything, but the unique characteristics of the cryptocurrency market means it’s a particular challenge there.
  • Being over-exposed. Don’t bet more than you can afford to lose. Limit your exposure and consider setting up take profit and stop loss orders to limit your exposure in the event of drastic swings.
  • Using excessive leverage. Many cryptocurrency exchanges will offer up to 100x leverage, dramatically magnifying the potential risks. The volatility of cryptocurrency, combined with high leverage trading, can see positions be liquidated extremely quickly.
  • Not knowing when to fold. Whether you’re up or down, it’s important to know when to close a position and either take profits, or cut your losses.

Related read: 7 Habits of Successful Savers & Investors

Compare Cryptocurrency Trading Platforms

When choosing a cryptocurrency trading platform, consider factors such as whether it offers derivatives or leverage, what kind of order types it allows and how easily it can integrate with cryptocurrency trading bots.

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Source: credit.com

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Simple moving averages are one of the indicators that investors use in technical analysis to help them choose stocks. They’re the average of a range of the prices of a stock over a given time period.

Here’s how to calculate simple moving averages, what they represent, and how to use the information they provide.

What Is Simple Moving Average (SMA)?

A simple moving average is the average price of a stock, often its closing price, over a specific period of time. It’s called “moving” because stock prices always change. As a result, charts that track SMA move forward as each new data point is plotted. Investors use simple moving averages and other technical indicators to help them get an idea of the direction a stock price is moving based on previous prices.

While simple moving averages can give investors a sense of what could happen in the future, they have limitations. That’s because simple moving averages reflect past data, so they only represent past trends.
💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Formula for Simple Moving Average

To calculate a simple moving average, Investors take the average closing price of a financial security and divide it by a set number of periods.

The formulas is as follows:

SMA = (P1 + P2 + P3…+ Pn)/n

P is price and n is the number of periods.

Let’s take a look at an example of stock price over a period of 10 days.

Day (n) Closing price (P)
1 $40
2 $42
3 $47
4 $51
5 $46
6 $44
7 $40
8 $38
9 $37
10 $36

To arrive at the simple moving average, first total the closing prices and divide by the number of periods.

SMA = (40 + 42 + 47 + 51 + 46 + 44 + 40 + 38 + 37 + 36)/10 = 421/10 = $42.10

On day 11, if an investor wants to continue looking at a 10-day average, they would drop the first data point in the list above and add the closing price from the eleventh day, shifting the moving average forward by one data point. They would continue to do this for each subsequent day, and in this way, the average continues to move.

What Does SMA Show You?

Analysts often plot simple moving averages as a line on a chart of individual data points. The line helps smooth out movement, making it easier to identify trends. If the line representing the SMA is moving up, then the price of the stock is trending up. Conversely, if the SMA is moving down, prices are also trending downward.

For long-term trends investors typically look at SMA over 200 days, while intermediate trends may focus on a 50-day period. Short-term trends typically use fewer than 50 data points.

Longer-term SMAs can help smooth out stock volatility, but they also have the biggest lag when compared to current prices.

What Are Crossover Signals?

Investors may chart two SMAs — one relatively short and the other long — to generate crossover signals, points when the lines cross, which can help identify moments to buy or sell a stock.

When the shorter moving average crosses above the longer moving average, it is known as a “golden cross.” This is a bullish signal that tells investors that stock prices are trending in the upward direction. On the other hand, a bearish “death cross” occurs when the shorter moving average crosses below the longer moving average. This is a signal that prices are trending down.

What Are Price Crossovers?

Price crossovers are another signal investors may generate to help them identify moments to buy and sell. When a stock’s prices crosses over the moving average, it generates a bullish signal, and it generates a bearish signal when stock prices crosses under the moving average.

One Step Behind

Though analysts use SMAs to identify trends, they are still lagging indicators. SMAs reflect events that have already taken place, making it a “trend following” metric. In other words, they’ll always be a step behind what is happening in real time. As a result, SMAs do not predict future prices, but they can provide investors with some insight into where prices may be going.
💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

SMA vs Other Moving Averages

There are other moving averages investors may use when performing technical analysis on a stock. These help investors flesh out recent trends in stock price movement, but they also tend to be a bit more complicated to calculate.

SMA vs Weighted Moving Average

Like SMAs, weighted moving averages (WMAs) help establish the direction in which a stock price is likely moving. However, they put more emphasis on recent prices than SMAs.

Investors calculate a WMA by multiplying each data point by a weighting factor. That gives more weight to recent data and less weight to data farther in the past. The sum of the weighting must add up to 1, or 100%. Simple moving averages, on the other hand, assign an equal weight to each data point.

The formula for WMAs is:

WMA = Price1 x n + Price2 x (n-1) +…Pricen/[n x (n+1)]/2

Where n is the time period.

SMA vs Exponential Moving Average

An exponential moving average (EMA) also gives more weight to more recent prices. However, unlike WMAs, the rate increase between one price and the next is not consistent — it is exponential. Analysts typically use EMAs over a shorter period of time, making them more sensitive to price movements than SMAs are.

The formula for EMA is:

EMA = K x (Current Price – Previous EMA) + Previous EMA

K = 2/(n+1)

n = The selected time period.

For first-time EMA calculations, previous EMA is equal to SMA, an average of all prices over a number of periods, “n”.

Which Moving Average Is Better?

Each moving average has its own place in an investor’s tool belt. Investors may use WMAs and EMAs — which emphasize recent data — if they are worried that lags in data will reduce responsiveness. Some investors believe that the exponential weight given by EMAs makes them a better indicator of price trends than WMAs and SMAs.

Some more complicated indicators require a simple moving average as one input for calculations.

The Takeaway

If you’re just starting out as an investor, it can be hard to know which stocks to buy and when to buy them. Technical analysis strategies, such as moving averages, can help narrow your search and clue you in to potentially advantageous times to buy or sell.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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Everyone Thinks Rates Should Go Lower. Is That Why They’re Rising

The GFC (great financial crisis) shaped and reshaped the worldview of any market-watcher that lived through it.  The 70s/80s were increasingly seen as a one-off aberration against a baseline of generally low, flat long-term rates in the 1-3% range.  Due to that paradigm, the post-covid volatility in inflation and rates has been accepted only slowly and painfully.  The paradigm continues informing the belief that 4.3% in 10yr yields is too damn high and buyers surely have to be lining up.  Unfortunately, when too many investors are on one side of the trade, the market often moves in the opposite direction.

At least that’s one of the old sayings.  Other variations include things like “the market will do what it must in order to prove the maximum number of traders wrong.”  But a closer look at

It’s true that their net long position is the highest it’s been in a long time, but not much longer than it was at the end of 2018.  It was also the longest in years in the middle of 2015 and the market did nothing to punish the imbalance.  In fact, bonds rallied to all-time low territory by the following summer.  

There are plenty of other traders who are short bonds.  Interestingly enough, leveraged accounts are net short 1,287m contracts.  That goes a long way toward offsetting the net long among money managers of 1.303m contracts.  

Long story short (no pun intended), glib witticisms about what the market “always does” are never as simple as they sound.  Bonds are adjusting to a new normal with shorter-term yields more anchored by Fed Funds Rate expectations (thus putting pressure on longer-term yields to un-invert the curve).  Additional pressure comes courtesy of a particularly heavy imbalance of Treasury issuance versus revenues as well as foreign governments selling Treasuries to prop up their devalued currencies. 

As has been and continues to be the case, short term yields need to fall significantly before long term yields get significant relief.  That won’t happen until the Fed signals a willingness to cut and that won’t happen until inflation and econ data do a lot more than they have to show the impact of the Fed’s policy tightening.  For inflation, that could merely mean repeating the recent 0.2% m/m core performance, but for econ data, things are going to have to start looking a lot more contractionary.

Source: mortgagenewsdaily.com

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The 10-year yield closed today above my key level of 4.25%: Does that mean mortgage rates will hit 8%? To understand what’s happening, here’s how I look at the bond market and mortgage rates in my forecast for 2023.

In my 2023 forecast, the range on the 10-year yield was between 3.21%-4.25%, emphasizing that the bond yields can go lower than 3.21% only if the labor market breaks — which would require jobless claims to go over 323,000 on a four-week moving average.

That 10-year yield channel equates to 5.75%- 7.25% mortgage rates. And since the labor market isn’t breaking and the economy is doing well, mortgage rates are at the higher end of my range for this year. In fact, mortgage rates today were as high as they have been since December of 2000.

The big surprise in 2023 has been that the spreads with mortgage rates got worse, not better — all due to the banking crisis.

As you can see in the chart below, spreads were getting better, then the banking crisis hit and they got worse. This new variable is our 2023 reality until the Federal Reserve cries uncle.

Now let’s look at the 10-year yield: We closed today at 4.28%. For intraday action, I wanted to see if we could reach the highest level of last year at 4.34%. We didn’t, and in fact, yields headed lower toward the end of the day from the high peaks. For now, keep an eye out for that 4.34% level because breaking above that could cause more short-term bond selling.

As we can see below with a longer timeline chart, the 10-year yield has stayed in my range this year for 99.9% of the time. Considering where the economic data has been recently, it makes sense that we are at the higher end of the range because there is no recession in the data lines currently. 

The critical time was early this year when it looked like the bond market wanted to go lower due to the banking crisis, but my Gandalf line (the red line below) held. I believe as long as the economy isn’t breaking, the 10-year yield shouldn’t go under 3.37% — and the chart below shows that line has held up eight times.

I started forecasting 10-year yield ranges and mortgage rates in the previous expansion: It was a very boring channel. Every year starting from 2015, it was the same forecast; the 10-year yield would be between 1.60%-3% which meant mortgage rates between 3.50%-4.75%, roughly.

As the chart below shows, before the COVID-19 recession, bond yields mostly stayed in that range, although there were times between 2015-2020 when they broke below 1.60% and over 3%. Currently, we are slightly above 4.25%.

 When COVID-19 hit, I had a 10-year yield range for the recession at -0.21%-0.62. My COVID-19 recovery model began on April 7, 2020, as the 10-year yield was above 0.62% on that day.

In  2021, even though I was calling for higher mortgage rates because home prices could explode higher, the 10-year yield forecast was 0.62%-1.94% with an emphasis on creating a range between 1.33%-1.60%. That happened and we spent a good amount of time there in 2021.

In 2022, my 10-year yield call peaked at 1.94%, but I said that if global bond yields rose, we could hit 2.42%. March of 2022 brought a Fed pivot and the Russian invasion of Ukraine and we were off to the races with bond yields getting as high as 4.33% intraday in 2022.

So will mortgage rates go to 8%?

The inflation growth rate has been falling, but my bond yields range for 2023 was based on the economic data staying firm, meaning if economic data gets better, yields should be at the higher end. This week’s economics data, retail sales, and industrial production data beat estimates and the Atlanta GDP data is at 5.8%. The economic data hasn’t just stayed firm — it’s gotten better so bond yields are now above the range.

We also have to consider the Federal Reserve. The Fed now believes its policy is restrictive, which wasn’t case last year, so this is a reason why they’re not talking about more aggressive rate hikes.

How much higher can bond yields and mortgage rates go before the Fed starts talking about it? Hopefully, this chart below gives you an idea, because if the inflation growth rate cools even more, the Fed might step in to cut rates or stop their balance sheet reduction, which is another form of tightening policy.

So, can mortgage rates hit 8%?

Yes, they can, but it would require the economic data to stay firm. Short-term, as long as the economy outperforms, 8% is in the works. However, you can see the limits of mortgage rates now because the Federal Reserve has told us they believe their policy stance is restrictive. They don’t want to push the lever too much because one of their goals is to keep the Fed funds rate higher for longer.

The one thing that can change the Fed’s mindset is the labor market breaking, but for now they don’t have to worry about that.

Source: housingwire.com