Frequently Asked Questions
Must I first register on the website or can I download the app from the app store and then register? And, what happens after I register?You can do it either way. Most people go to the website first to watch the videos and learn more about the app from the content there. But there is plenty of user friendly guidance in the app itself, and you shouldn't have any problems operating it, immediately.
Once you select your plan and register (submit your contact info and create a username and password), you are ready to use the app by either logging in from the browser on your PC or Mac, or by downloading the mobile app from the Apple or Google app stores onto your mobile device.
Why do I have to enter my credit card information if the trial is free anyway?In order for us to process your subscription, we require that all users of our premium plans submit their credit card information, even during the free trial period. That way, those who wish to continue beyond the trial period can do so without interruption.
Why do I have to link my brokerage account to WealthMAX?First of all, it is highly recommended that you link all of your financial accounts to the WealthMAX App so that the many wealth management tools and functions of the app can be made available to you. When you subscribe to one of our premium investment plans, it is necessary to link the brokerage account used for that plan in order for WealthALGO to properly find the appropriate trades for your account size (our models consider available capital as part of selection criteria so we must have accurate account size information to optimize your results) and to calculate/scale the position size for each trade. This also allows us to produce performance data for you that accurately reflects the real-time results of your trading.
Can I change plans if I want to?Yes. You may change your WealthGenerator subscription plan at any time. There are no restrictions in this regard. Simply go into your account settings and change to the plan of your choosing. You will be credited any prorated balance available from your existing plan.
Why do you recommend a $10,000 minimum initial investment amount?Of course, you are free to use our systems to trade with any amount of money you wish. However, we recommend $10K (or more) when you are trading the WealthALGO ATP or LTP investment systems through a separate brokerage account and are following all of our suggested trading rules.
We've found that amounts of $10K or more will give you the necessary investment capital to adequately fund a full portfolio, and keep your trading costs in balance as they relate to their overall percentage of your profits. Then, as your brokerage account balance (Equity Balance) grows, your costs of trading will become a smaller and smaller expense, especially for balances approaching the 6-figure range.
So, using investment capital amounts of $25K to $50K, or greater, serves to further diminish the impact these expenses have on your trading profits over time.
When am I charged for fees I incur?As stated on our website, WealthMAX is free to download and all modules of the app are accessible immediately (except WealthGenerator). There is a one-time $9 charge for the WealthGenerator activation key. The LTP System (Gold Plan) is free to use once WealthGenerator is activated.
The Platinum and Diamond premium plans (ATP and ISS Systems) have monthly subscription charges and Alpha fees that begin after a 30-day trial period. These fees are charged on the same day of each month once the free trial is completed and your billing cycle begins.
What is the Alpha Fee and how is it different from the subscription fee?WealthMAX users are charged a subscription fee when using our premium plans (Platinum and Diamond). These are "flat-rate" monthly charges of a fixed amount. The Alpha fee, however, is assessed on the ATP system which is used in the Platinum and Diamond Plans. This is a "variable" charge that is calculated as a percentage of the user's account balance. Larger trading accounts, therefore, incur higher fees just like a homebuyer taking out a mortgage and paying "points" at closing would incur higher closing costs for the larger the mortgage balance.
This is a form of "Differentiated Pricing" that is used across several industries: banking, airlines, vehicle rentals, movie theaters, hotel chains, etc. Our users recognize the value they receive from the investment information we provide and the inherent fairness of our billing policy, which only charges this fee when the user experiences positive performance gains that exceed that of the broad market (measured by the S&P 500).
Alpha fees, when applicable, are 50 basis points (bps) of the users previous 30-day average account balance. Therefore, a user with a 30-day average balance of $50K would be charged a $250 Alpha fee (50,000 x .005) on months that meet the threshold criteria.
The Alpha fee threshold is gauged through a measurement period (MP) beginning on the user's first 30-day billing period, and then going forward adding one month at a time until 12 months of trading have been recorded. From that point onward, the monthly Alpha fee MP is taken from a "look-back" period of the previous 12-months.
If the trading results (the gross dollar gain or loss from each trade) calculated from the beginning balance of the current MP have accrued a positive return percentage that exceeds the trading returns of the S&P 500 index during the same length of time, then an Alpha fee is assessed on the user's previous 30-day average account balance. Then at the end of another 30 days of trading, this threshold calculation is performed again, and so on, each 30 days.
Why do I pay an activation fee if the app is free?It is free to download the WealthMAX app and to use all of the wealth management tools and functions it contains. To access the investment systems in the WealthGenerator module, however, it requires the purchase of that module's activation key, which is a one-time cost of $9. Then, users can choose the free trading plan (Gold Plan) and never incur another charge, or select one of our premium plans (Platinum or Diamond Plan) that have monthly subscription fees.
What forms of payment are available to me?WealthMAX can accept payments in 63 different currencies. Users can simply link any of their bank accounts or register a debit card or credit card for use as the primary payment method for any of their WealthMAX service charges. (See the next question for best practices in this regard.)
Should I pay my subscription charges and any Alpha fees from the funds in my brokerage account?For maximum investment efficiency, you should not pay your subscription charges or any other bills from the funds in your trading account. Think about it. If you have income being received into a zero interest or 1% interest checking account, wouldn't it make more sense to pay your bills from that account rather than from an investment account that may be grossing 30% a year?
Of course, if your current sources of income cannot sustain such payments, then looking toward other accounts for these funds would be necessary. But, again, for maximum efficiency you would look toward your lower yielding accounts before drawing money from a high-yielding account like the account used for WealthMAX trading.
When am I paid for the referrals I make to WealthMAX?Our WealthReferrals program pays our users a $25 recurring monthly residual for each person they refer who subscribes to a premium plan. Every month that the user's referral pays their subscription fee, the referring user is credited the $25 residual (and the same for all of their referrals).
These residuals accrue to the user each month and are applied to their own monthly fees, if any. So, on their billing cycle date any credit amount (residual balance larger than the users charges that month) is paid directly to the user via the account of their choosing.
What does it mean to "link" my financial accounts to WealthMAX?When you link your financial accounts to the WealthMAX app you are simply connecting the data from these accounts to WealthMAX so it can display it to you in relevant context within the modules of the app. For instance, the data is used to calculate your income and expenses for the BudgetPlan feature in WealthManager, and for calculating your position sizes in the WealthALGO trading models.
WealthMAX is NEVER in possession of your account credentials (this is kept on your financial institution's servers, not ours) and we have no ability to perform transactions or trade executions in your accounts. Again, linking your accounts only creates a data linkage to WealthMAX. No account authority is granted or created by doing so.
Is WealthMAX a broker, advisor or financial planning company?WealthMAX is a service. We do not accept deposits or make investments of any kind on behalf of our users. We provide independent information to the public for free, or on a subscription basis. Information providers are not financial advisers or fiduciaries. As such, we are exempted by the Securities Exchange Act of 1933, the Investment Companies Act of 1940, the Investment Advisers Act of 1940, and Title 15 and 17 of U.S. Code.
The "Signals" from our investment systems are only recommendations that our users are free to act upon and utilize as they best see fit. Our recommended method of use, as described on our website, mobile app, and in our Terms of Service, DOES NOT represent personalized financial advice to the user. Our signal information merely serves as a guide and suggested approach, not final investment research; nor do we claim to provide a complete and full analysis of any stated security.
Furthermore, the use of our signals for trading purposes may not be suitable to all investors. Subscribing to our service, or utilizing our signals for investment, in no way constitutes a client / adviser relationship. All data and information we communicate to our users either through our website, mobile app, emails, text messages or any other form of communication, is purely:
- FOR INFORMATION PURPOSES ONLY
- NO ADVICE IS GIVEN OR IMPLIED
- USERS ASSUME SOLE LIABILITY FOR THEIR INVESTMENT DECISIONS
- THERE IS NO GUARANTEE OF PERFORMANCE
Do I need a U.S. brokerage account to trade your systems?Yes. WealthMAX is used to exclusively invest in publicly listed stocks and ETFs on the U.S. stock exchanges. You will need an account with a U.S. brokerage firm in order to use the WealthALGO investment systems. However, you do not need be a U.S. citizen or reside inside the U.S. (see the next question)
How can I open an account and use your system if I live outside the U.S.?Almost all the major American brokerage firms offer accounts to non-U.S. citizens, have multi-lingual websites, and can handle most of the world's currencies. Their websites often cater to international investors and their needs. Users outside of the U.S. should have no problem establishing an account with a U.S. firm that can exchange their local currency for dollars, and vice versa when funds are needed for withdrawal.
Can I use WealthALGO in my IRA or other tax-advantaged accounts?Absolutely. The free LTP system is ideal for a variety of retirement accounts: IRA, SEP, 401K, 403b, etc. However, due to the limitations of most retirement plans, their lack of margin availability, and their contribution restrictions, ATP system users who follow our trading rules and guidelines must invest through their standard taxable brokerage accounts.
But fortunately for U.S. users, most investment services such as WealthMAX are considered "miscellaneous investment expenses" by the IRS and their costs are therefore tax deductible (under "Schedule A" of your U.S. 1040 tax return). This deduction may not be applicable to all users. Consult a tax professional for more information.
How can I take regular monthly withdrawals from my trading account?Well, of course, you are free to make withdrawals from your brokerage account as you please. However, if you want to maintain a seamless trading experience, then you should plan your withdrawals accordingly (see the next FAQ).
If you are using WealthMAX to generate monthly income, there is no problem with transferring your trading profits to a bank or other financial account each month. Be aware that frequent withdrawals can alter your rate-of-return by impeding the necessary effects realized from compounding your retained profits throughout a full calendar year and, thus, lowering your annual return percentage.
So, if you must have funds on a regular basis, we recommend that you plan your withdrawals quarterly or semi-annually to minimize their impact on your overall trading returns.
Do deposits and withdrawals from my brokerage account effect your trading system?Periodically, you may want to deposit or withdraw funds from the brokerage account that you are using to execute the WealthALGO investment systems. Remember, it's your decision, your money, and your account – WealthMAX has no access.
When depositing funds, there is no real impact on your trading other than the fact that your post-deposit increased Equity Balance will result in larger future position sizes. Which, of course, is a good thing. Remember, however, that when you add money to your account it will take some time for these additional funds to be invested among new positions.
For withdrawals, you are limited to the available cash in your account that is not currently invested in any trade positions. You will not be able to withdraw beyond that amount without prematurely exiting current positions and possibly negating the critical effects of compounding your investment returns throughout a full calendar year.
For this reason, it is recommended that you not use money that will be required for frequent financial demands for the funds to capitalize the brokerage account used for the WealthALGO systems. You should rather deposit funds that can be utilized for investment (trading) during longer periods of time with planned, periodic withdrawals only when needed.
What is the difference between WealthMAX, WealthGenerator and WealthALGO?Good Question. WealthMAX, of course, is the overall app itself. It consists of 3 internal modules, one of which is WealthGenerator. Inside the WealthGenerator module are 3 investment systems which are each run by the WealthALGO trading models.
How long do you think the WealthMAX app and WealthALGO will be available to use?For us, WealthMAX is truly a labor of love. We thoroughly enjoy both engaging the markets daily and seeing our users thrive and prosper from the market in ways they never thought possible. We certainly expect WealthMAX to be around for a long time. Of course, you can contribute to that longevity by referring as many friends, family members, and colleagues as you can to keep our user base healthy and growing for years to come.
Can I use WealthMAX if I've never traded stocks before?Absolutely. In fact, if you have never traded a stock before you are the exact person that WealthMAX was designed to serve. Our WealthALGO investment system will provide you with every detail you need to easily execute trades directly into your own online brokerage account.
And you are never rushed or stressed to do so. All trades are entered while the market is closed, so you'll have over 16 hours to input this information after it is posted in the app,which takes less than 3 minutes to perform (accessing your brokerage account, enter the trade, and logging out).
Can I invest in commodities or foreign currencies using WealthMAX?WealthMAX and our WealthALGO trading models are for use with investments in U.S. stocks and exchange traded funds (ETFs), only. WealthAlgo does, however, sometimes select commodity-based ETFs when they are in favor. So you may get commodities exposure in your account from time to time this way.
How can I enter trades when the market is closed?Well, of course, the trades cannot be "executed" when the market is closed. But, they can be entered anytime during the "off-market" hours of 4pm to 9:30am eastern (a 17.5-hour period of time). WealthALGO transmits its daily trade information through the app within 1 hour after the market closes each day.
Therefore, users have upwards of 16.5 hours to conveniently enter this trade information into their own personal brokerage accounts. Then, when the next market session begins, the trades are live and ready to be executed when the market opens (in the case of Market Orders used in the LTP system) or when the prices trigger them during the trading day (for Limit Orders used in the ATP system).
Do I have to take every trade that WealthALGO sends to me?No, you do not "have to" perform every trade. The WealthMAX service generates independent trade signal recommendations delivered through a paid-subscription business model. Users are not obligated to react to them in any way. But you are paying for this information and should consider our guidelines to maximize the value of our service.
Some users may, however, utilize our signals to enhance their own trading strategies. Others will follow them trade-for-trade and incorporate our suggested investment rules as outlined in this website, which are necessary to achieve our projected performance results.
Either way, WealthMAX creates value for each user through the individual manner in which they best see fit to use the trading / investing information we provide.
What happens when I receive a trade signal from WealthALGO-ATP?Let's assume you're currently logged into WealthMAX and your brokerage account. From there:
- You receive a trade signal on your mobile device or desktop browser within 60 minutes after the market closes (4pm eastern).
- If a SELL signal, you first locate the indicated security in your online portfolio of open positions in your brokerage account.
- Then simply submit a "Limit" order for that one day (known as a "Day Order") to exit the position using the trade info contained in the signal: Stock Symbol, Limit Price, and Number of Shares. That's it. You're all done for that SELL signal.
- If a BUY signal, then submit a "Limit" order for that one day (known as a "Day Order") to enter the position using the trade info contained in the signal: Stock Symbol, Limit Price, and Number of Shares. That's it. You're all done for that BUY signal.
- Your trades will be filled by your broker during the next market day if stock prices reach the limit price of your orders. If not, then the orders expire and nothing happens until you receive the next signal from the app.
- All brokerage apps and web portals use the same trading information supplied in our signals to execute their client's trades. It will be plainly indicated where to enter this information. You cannot mess this up. It is amazingly simple.
What is the average period of time that an individual stock will be held in your system?Once a new position is triggered for entry, it will remain open in your account for 4 to 6 weeks, on average. However, some will close in a matter of days, and others could stay open for a few months. But, again, on average expect to hold each position for a month to 6-weeks.
Do the positions selected by WealthALGO go up in value right away?Not necessarily. Some will, in fact, begin to profit shortly after they are signaled to BUY. Others, however, may drift along flatly or even decrease in value temporarily as the security finds support in the market.
WealthALGO attempts to identify "low-risk entry points" for each new position. The entry price may have been reached as the security settled back towards an area of support within the low-risk entry zone. Further price settling along that area may occur for several days, or sometimes weeks, until the position finds its footing and begins to perform as expected.
How does WealthALGO know how many shares I need to buy?You link WealthALGO to the brokerage account used for the ATP investment system inside the app. So, WealthALGO is aware of you balance, positions, and valuations for use in its trading models. With this information, the WealthALGO algorithm can easily calculate the number of shares needed for each trade.
How can you produce winning trades of 30% on a consistent basis? I didn't think that was possible.You're absolutely right! It is not possible, in our experience, to consistently execute individual stock or ETF trades that produce anywhere near those figures. Our 30% performance figure reflects the average gross ANNUAL returns of the WealthALGO investment system.
We do not attempt to achieve 30% gains on every trade, although we do have some individual trades come close to that magnitude on occasion. Rather, our investment system benefits from the constant buying and selling of stocks, which produces profits for reinvestment into larger and larger position sizes. Over time, this compounding effect creates convexity (acceleration) in your account's equity curve which significantly contributes towards our remarkable annual return rates. (see next question)
Please explain how you arrive at a 30% annual rate of return?Good question. Let's go over just how this number is achieved. First, consider the fact that we are "realizing" profits by entering and exiting trades rather than buying and holding in perpetuity. Then, factor in the enhanced monetary performance of these trades when using the 2-to-1 margin provided through your leveraged (margin) brokerage account.
Next, let's consider the effects of compounding these "leveraged gains", trade over trade, through 12 consecutive monthly periods. That internal compounding throughout each period multiplies the performance of your portfolio and increases its equity balance significantly as we approach the end of a 12-month calendar year. The net result typically produces 30% annual gains, or more, depending on market conditions and the frequency of trading opportunities.
This time accelerated return is known as "non-linear" performance, because the account grows exponentially in time. In other words, the internal compounding of your leveraged profits creates an upwardly curved performance line, known as the account's equity curve, that increases its angle of ascent (convexity) as you move forward in time.
The accumulated ending balance from all of this is, of course, rolled into the next year as trading goes forward and your profits and brokerage account's equity balance continue to compound and grow at this rate. Please note that these returns are gross figures that do not factor in your trading costs or applicable taxes.
Why is there only a maximum of 3 positions opened at a time in the ATP system?We use this number of positions to keep your portfolio concentrated, while simultaneously taking maximum advantage of the twin forces of leverage and compounding. Concentrated portfolios have the ability to significantly outperform the market indices versus the 10 to 40 position portfolios, which are more the investment norm.
Furthermore, your account's "buying power" is a function of its available cash PLUS an equal amount of margin from your broker. So, half of the position is made up of actual cash (available cash in your account) and the other half is margin that your broker automatically matches with your cash portion (dollar for dollar) every time you execute a trade from the margin account at your brokerage firm.
This "leverages" the position sizes (effectively doubling them) for more impact on your trading results. And as your account balance grows, the trade sizes grow larger, as well, because of the percentage sizing we use for each position, rather than using static / fixed-dollar amounts.
And we are compounding our trading profits each time the system opens a new, and larger, position size. This, combined with a concentrated portfolio and leveraged positions, creates a powerful combination that can result in explosive returns for your account.
We've found that having 3 open positions, while using these impactful money management techniques, provides the best approach for investment when seeking high rates of return.
What if for some reason I don't receive one of the trade signals?Well, let's think about this. Once WealthALGO generates a trade signal it is transmitted directly to you through the WealthMAX App, immediately. Simultaneously to that, a text message "Alert" is sent to your smartphone notifying you of the new trade signal.
The new signal will remain pending inside your WealthMAX account and its -ALERT- is the first thing you see when viewing your account through our mobile App or on your desktop browser. So, there are really no "missed" signals ― just missed trades if a Subscriber fails to act before the market opens for trading the next day.
Is your trading system an all-mechanical "black-box"?WealthALGO is an adaptive model. Although it relies heavily on non-judgmental data and a rules-based methodology, there are significant variable inputs that are factored in along the detailed process of security selection to trade execution.
The bottom line is that unlike conventional trading models or algorithms, WealthALGO is not a rigid or fixed calculation. Rather, it contains a robust set of formulas and calculations that adjust and recalibrate to the current market conditions. Thus, WealthALGO is perfectly suited to find trading opportunities in both Bull and Bear markets, and high or low volatility environments.
Why does WealthALGO sometimes buy the same security again just a few days or weeks after it had sold it?This does happen with some frequency. WealthALGO identifies securities that come from areas of the market experiencing the most Sector Rotation inflows or, in the case of bear markets, outflows. It then selects only the best opportunities from these areas using statistical models.
Some securities that are selected for trading may have previously been in our portfolios because their industry group continues to react to Sector Rotation capital flows, and they may still score high on our quantitative evaluation metrics. Therefore, the securities that maintain those factors and criteria can be signaled in (BUY) and out (SELL) of the portfolio (taking profits as we go) several times as their prices and valuations continue to meet our risk / reward standards.
Does your system ever short sell stocks or ETFs?No. There is no shorting in our system. However, WealthALGO does select "inverse" ETFs during Bear market periods to take advantage of the quick downward moves that are associated with these negative markets. So, in effect, you get the exposure to short-selling in Bear markets but you don't actually short the shares because the inverse ETFs are calibrated to increase in value as the markets they represent go down in price.
What if I have problems trading or I just can't follow your system the way I thought I could?Our objective is to have 100% user satisfaction, but of course our trade signals are simply an information service, and as outlined in our "Disclaimer", we do not guarantee the success of any particular investment or investment style. We have designed WealthMAX to be the most comprehensive wealth management and investment application available, while maintaining an extraordinary level of convenience, transparency, user control, ease of operation, and customer support.
However, we know that investing in securities is not for everyone. With this in mind, we have very fair and open subscription policies that require essentially no upfront charges, a free 30-day trial period, and no long-term contract commitments. Our users are also always in possession and control of their investment funds and are free to use our trade signal information in any way they deem appropriate.
And we have enough confidence in the true value of a WealthMAX subscription to offer it on an open ended month-to-month basis so, as a result, you have the option to cancel your subscription at any time should our service not work out for you for any reason, whatsoever. NO STRINGS ATTACHED!
Can I really do all of this from my cellphone?Yes. It sounds simple, and it is! You execute each trade on your mobile device by using your broker's trading app and the information provided by the WealthMAX app. So, all you need is a smartphone with these apps, and you'll have no problem conveniently managing your entire WealthMAX portfolio from almost anywhere!
What if I go on vacation and can't keep up with the trade signals?Well, first of all it's not a lot to keep up with. Each trade takes only 60 seconds (max.) to perform on a smartphone. And generally, there are only 2 or 3 trade signals per day (and some days none at all), so it isn't something that requires constant attention. Just 2 or 3 minutes a day.
If for whatever reason you are unable to respond to the signals for a significant period of time, then we recommend that your spouse, relative or other trusted party trade the signals for you while you're away. Or you can temporarily de-activate your WealthMAX account and then resume by re-activating it again later.
However, we think you will discover that even while "vacationing" you'll be able to find a way to keep up with WealthMAX and your profits!
Do your individual trades ever lose money?Yes. And anyone who tells you they have an investment approach to the markets that produces 100% winning trades (or anything near that) is, at best, being less than honest with you. Even the famed British trading developer, Martin Pring, who's designed sophisticated systems for several international banks and investment houses, once said that his most successful investment programs typically yielded a 40% win rate.
Only 40%? You may wonder how this can be? Well, to put it simply, his winning trades were significantly greater in size (not quantity) than his losing trades. More important is the fact that a high win-percentage is not absolutely critical to produce substantial returns in the market. We "win" far more times than we "lose", but we do, of course, experience losing trades in our system.
The key is that we manage those losing positions effectively, so they do not distort our overall performance. You can rest assured that our risk management techniques are time tested and statistically sound. Capital preservation is always the top priority in the WealthMAX system.
Can I just call my broker if I don't want to go online or use my broker's app?Certainly. Utilizing the Internet and executing your trades online or through a mobile app is simply a matter of convenience. You may, of course, choose to execute some or all of your trades by just contacting your broker via the telephone.
Also, if you're like most of our users who access their broker online or by mobile app, it's important to note that should you ever find yourself without Internet or cellular access you, too, can just as easily phone in your trades directly to your brokerage firm.
How does WealthALGO hold up in years when the market has a negative return?Bear markets are not much fun for most market participants. However, our sector rotation methodology manages to overcome many of the difficulties faced when dealing with a declining market.
Billions of investment dollars that are actively managed by large and diverse groups of institutional investors must settle somewhere in the market even during declines. Following this "Smart Money", as it's known, while it rotates its way through the market as certain sectors come in and out of favor is key to surviving and potentially thriving during bear market periods.
Additionally, we can take advantage of declining markets through the use of inverse ETFs without having to "short sell" stocks. This can further mitigate the damaging toll that bear markets can take on "Long-Only" investors.
What is the difference between a "Market" order and a "Limit" order?To buy or sell a stock, you must send an "order" to your broker to do so. This was exclusively done over the telephone for years until the advent of the internet and its mass adoption in the mid-1990s when the first web browsers appeared.
Today, this is almost all done through computers and mobile apps. When you submit an electronic "Market" order, it tells your broker's computer to execute your trade (either to buy or to sell) at the then current market price for the stock. A "limit" order, however, tells your broker to execute the trade ONLY if the specified price in the order is reached by the stock you are trading. Thus, the word "limit."
What is an ETF?An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets similar to an index fund. For example, there are ETFs for stock groupings such as large-cap stocks and small-cap stocks, or for stocks of sector groups in the Financial, Utility, or Health Care sectors of the economy, etc.
ETFs can also represent a market index like the Dow Jones Industrial Average ("the Dow"), the S&P 500, NASDAQ Composite, or the entire countries of Germany or Japan, and even geographic regions such as South America or the Middle East. And, importantly, they can also represent the world's many tradable commodities and currencies: crude oil, natural gas, gold, silver, Euro, Yen, etc.
Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.
Can't I just trade on my own or find a high performing mutual fund and get similar results as WealthALGO?Well for starters, 80% of professional investment managers fail to beat the market averages each year. And for individuals who want to manage their money themselves – using the financial media, newsletters, the Internet / software, or with the advice of their stock broker – the numbers are even worse.
88% of individual investor's annual performance results come in below the broad market indexes such as the Dow and the S&P 500. And 90% of the remaining 12% who do beat the market in any given year, do so by only 2 percentage points or less. Not exactly Hedge Fund-like performance. That only leaves less than 2% of individual investors who outperform the market averages by any appreciable degree.
How can I improve my basic Investment knowledge to feel more comfortable using WealthALGO?This is where a good online broker can make a difference. Most of the large online brokerage firms like Schwab, E*Trade and TradeKing have a tremendous amount of educational support available on their websites and at their local offices for the benefit of their customers. These include useful trading tutorials and financial terms directories with detailed definitions.
For instance, Fidelity Investments, one of the largest and oldest of these brokers, has an excellent reference and market information tool called "Knowledge Center" at www.fidelity.com. Brokerage firms make their money from the commissions they charge for trading. So, it is in their interest to educate their customers fully to provide them with the necessary confidence to trade and invest uninhibitedly.
Beginner and novice traders will find their online educational resources and practical investment information extremely useful.
Isn't it risky to invest using margin?Yes, the use of margin does bring on additional risks to your trading. However, leverage (such as margin trading) when used properly, is an effective tool regularly utilized in the marketplace by individual and institutional investors, alike.
Leverage, for example, is also used in a more conventional sense during real estate transactions involving investment properties. One might put down 5%, 10% or 20% on such real estate and mortgage (leverage) the rest in the anticipation of the property appreciating in value. If that gain were to occur by say 25%, you would stand to receive a significant return (triple-digit) on the "cash" portion (your actual out-of-pocket down payment) of the original price. This would represent far more return on your investment dollars than had you only used cash for the entire transaction.
WealthALGO-ATP uses margin to achieve a similar effect. Just as any business person would responsibly utilize their available credit to realize additional profits. By only "putting down" approximately 50% of the value (the normal margin requirement when purchasing securities) of each position in cash, and then margining (leveraging) the rest with a "margin loan" from your broker, you boost your potential return by a factor of 2-to-1.
There are, of course, obvious downside risks to using margin in this way, as well. You could, for instance, also lose money by this same 2-to-1 factor. However, the risks of margin trading are significantly negated through the portfolio/money management techniques used by WealthALGO.
"Margin Calls" (requests by your broker for you to liquidate positions or deposit additional funds into your account) can occur when you trade with margin, and are usually generated when the equity in your account falls below certain thresholds due to holding declining positions, which have caused your overall portfolio to lose value.
With WealthMAX, your account's equity is constantly enhanced by the realized gains (cash gains) which accumulate after the completion of each profitable trade. Also, if certain positions were to fall substantially, our stop-loss triggers would activate a SELL signal on those securities which then limits the deterioration of your account equity, reduces your margin utilization, and thereby helps to prevent the need for a margin call. Furthermore, your investment capital is typically diversified through multiple open positions at a time, strategically spreading "individual security exposure" and controlling overall risk.
It is also important to understand exactly how margin is employed when trading. Where margin's impact is felt is in the "buying power" of your trading account. Buying power is the total $Dollar amount (combining available cash and matching margin) extended to you for purchasing securities through your leveraged (margin) brokerage account. For example, in a "cash-only" account (not leveraged) a $100,000 starting deposit would equal $100,000 of "buying power" and a $100,000 initial Equity Balance. However, with a "margin" account and just a $50,000 starting deposit, you would also have $100,000 of buying power (2-to-1 leverage), but of course, still a $50,000 initial Equity Balance (equal to your cash deposit). Then, as positions are opened (each with 50% cash and 50% margin) the buying power of the margin account would be reduced accordingly, but it will always maintain its 2-to-1 leverage of available cash.
Be aware that WealthALGO-ATP's performance projections are based on the fact that leverage is a tool which it employs in every trade. You should consider the benefits and risks of margin before you commit to investing with the WealthALGO-ATP system.
How are stocks bought and sold on the stock exchange?During an initial public offering (IPO), new issues of stock are sold on the basis of a prospectus (a document that gives details about a company's operation) that is distributed to interested parties. Investment bankers or brokerage houses buy large quantities of the stock from the company and sell them to investors. After the IPO, the stock will then trade on a stock exchange or over the counter.
Normally, stock is purchased through a brokerage account. The buy order you place will be directed to the appropriate stock exchange. When someone who owns the stock is willing to sell at the price you are willing to pay, the sale takes place and a "trade" occurs. A brokerage commission or fee is typically charged for these transactions.
What is a stock's "Market-Cap"?You often hear of individual companies or mutual funds being categorized as small-cap, mid-cap or large-cap. The "cap" part of these terms is short for capitalization, which is a measure by which the market classifies a company's size. Although the criteria for the different classifications are not strictly bound, it is important for investors to understand these terms, which are not only ubiquitous but also useful for gauging a company's size and riskiness.
Market capitalization is just a fancy name for a straightforward concept: it is the market value of a company's outstanding shares. This figure is found by taking the stock price and multiplying it by the total number of shares outstanding. For example, if Cory's Tequila Corporation (CTC) was trading at $20 per share and had a million shares outstanding, then the market capitalization would be $20 million ($20 x 1 million shares). It's that simple.
The classification of companies into different caps also allows investors to gauge the growth versus risk potential. Historically, large-caps have experienced slower growth with lower risk. Meanwhile, small-caps have experienced higher growth potential, but with higher risk.
While there isn't one set framework for defining the different market caps, here are the widely published standards for each capitalization level:
- Mega cap - This group includes companies that have a market cap of $200 billion and greater. They are the largest publicly traded companies such as Exxon (NYSE:XOM). Not many companies will fit in this category, and those that do are typically the leaders of their industries.
- Big/large cap - These companies have a market cap between $10 billion to $200 billion. Many well-known companies fall into this category, including companies like Microsoft, Wal-Mart, General Electric, and IBM. Typically, large-cap stocks are considered to be relatively stable and secure. Both mega and large-cap stocks are often referred to as blue chips.
- Mid cap - Ranging from $2 billion to $10 billion, this group of companies is considered to be more volatile than the large- and mega-cap companies. Growth stocks represent a significant portion of the mid-caps. Some of the companies might not be industry leaders, but they are well on their way to becoming one.
- Small cap - Typically new or relatively young companies, small-caps have a market cap between $300 million to $2 billion. Although their track records won't be as lengthy as those of the mid to mega-caps, small-caps do present the possibility of greater capital appreciation - but at the cost of greater risk.
- Micro cap - Mainly consisting of penny stocks, this category denotes market capitalizations between $50 million to $300 million. The upward potential of these companies is similar to the downside potential, so they do not offer the safest investment, and a great deal of research should be done before entering into such a position.
- Nano cap - Companies having market caps below $50 million are nano-caps. These companies are the most risky, and the potential for gain is often relatively small. These stocks typically trade on the pink sheets or OTCBB.
How do I know when I should start saving money for retirement?It is clear that many Americans have not accumulated nearly enough wealth to be able to retire at age 65 and maintain anything like the lifestyle that they currently have. How much money will you need to retire? Probably more than you think! Extended life spans, reduced employer benefits, lower market returns and increased costs of living have forced us to have to save more.
Unfortunately, most Americans are doing a poor job of securing their future. The Employee Benefits Research Institute reports that if current trends continue, by 2030, the annual shortfall between the amount retired Americans need and the amount they actually have will be at least $45 billion. If you want to avoid having to flip burgers at age 75, one of the best things you can do for yourself is to calculate now how much you'll need in the future.
Two generations ago, corporate pensions and social security ensured a secure retirement for our grandparents. Today, pension plans have become virtually extinct, shifting the burden of retirement savings away from corporations and onto the employees. Our retirement depends largely not only on our own ability to save and invest wisely, but also on our ability to plan.
According to a survey from Allianz Life, 38% of workers between ages 55 to 65, are concerned they won't be able to cover basic living expenses in retirement. Most of these people will be forced to extend their work years or accept living in poverty. How can this disastrous scenario be avoided?
Hopefully, you are holding the answer to that question in your hands as you read this. WealthMAX not only provides you with the tools and calculations to help you devise a viable retirement plan, it also gives you the means to get there. WealthALGO-ATP has over a 30% average return per year. By compounding those gains over 5, 10 or 20 years, the resulting amounts can be staggering.
More than ever, individual investors and savers need a tool like WealthMAX to ensure that their lifestyles, and those of their loved ones, can be sustained far into the future. Planning for retirement is not something that you do shortly before you stop working. It should actually begin the day you START working.
The sooner you accept the reality that retirement planning (and saving) is an ongoing and lifelong process, the sooner you will be on track to conquer it. With high rates of return and the power of compounding, WealthALGO-ATP can greatly enhance and empower every dollar you save. So, take advantage it, and the many other tools available in WealthMAX, to ensure your long-term retirement success.