Tag: Dr. Clemen Chiang

*CTO’s Notes: Building on our previous experiences, this article discusses our evolved strategy for deploying a PostgreSQL database on IBM Hyper Protect Virtual Servers. We transitioned to a more sophisticated approach, utilizing Docker for database deployment – a method that not only streamlined the process but also enhanced security and scalability. Here, we share the intricate details of this deployment method and the significant advantages it offers.

Today, we would like to walk you through the journey of building your PostgreSQL DB docker container image in an IBM Z Virtual server instance(zVSI) on IBM Cloud and then deploying the image in a contract as an IBM Hyper Protect Virtual Server instance.

There are 6 steps in this journey:

Step 1: Launch an IBM Z Virtual server instance(zVSI) on IBM Cloud

Step 2: SSH into your zVSI and create your docker-compose and Dockerfile for your PostgreSQL DB

Step 3: Test your docker container image by running docker-compose up in your zVSI to ensure it runs well in s390x architecture

Step 4: Build your container image for s390x architecture and push it into IBM Container Registry

Step 5: Create the contract using Terraform

Step 6: Initialize your IBM Hyper Protect Virtual Server instance with the contract from Step 5

You need to meet the following prerequisites:

1. Create an IBM Cloud account.
2. Create an API key for your user identity.
3. Install IBM Cloud CLI and the container registry CLI plug-in.
4. Install Git, Terraform, OpenSSL, PostgreSQL, Docker and Docker buildx
5. Create a VPC and a subnet with a public gateway and a security group with rules that allow at least inbound IP connections on port 5432 and all outbound IP connections.
6. Create a Log Analysis instance on IBM Cloud. Make a note of the ingestion host and the ingestion key.

Go to the IBM Cloud catalog and select “Virtual Server for VPC”

Choose your preferred location. For example, if you are in Singapore, select “Asia Pacific,” and then choose the “Tokyo” region.

Give your instance a name.

Select your preferred image. Under the Architecture section, ensure that you select the s390x architecture “IBM Z, LinuxONE”.

Next, select your profile.

Choose an SSH key to use for accessing the instance. If you don’t have an SSH key, you can follow the instructions to generate one.

Optionally, add data volumes on top of the boot volume.

Configure your VPC (Virtual Private Cloud) and request a floating IP address for your instance.

Click the “Create virtual server” button. Your new virtual server will be provisioned and available for use shortly.

After your virtual server has been provisioned, assign a floating IP address to the new virtual server instance and click Save because you will need to SSH in the next step.

Once your instance is provisioned, you can access it by SSH using the floating IP address and the SSH key you selected during the setup earlier.

ssh -i your-ssh-key.pem root@floating-ip-address

Create a new working directory

COPYCOPY

mkdir postgres-db

Cd to the new working directory

COPYCOPY

cd postgres-db

Create your Dockerfile

COPYCOPY

# Use the official PostgreSQL image from Docker Hub
FROM postgres:latest

# Environment variables
ENV POSTGRES_DB=<postgres_db>
ENV POSTGRES_USER=<postgres_user>
ENV POSTGRES_PASSWORD=<postgres_user_password>

# Expose the default PostgreSQL port
EXPOSE 5432

where

<postgres_db> is the name of your database

<postgres_user> is the username which you will be using to access the database

<postgres_user_password> is the password of the username which you will be using to access the database

Create your docker-compose.file

COPYCOPY

version: '3'

services:
  postgres:
    image: postgres:14-alpine
    ports:
      - 5432:5432
    volumes:
      - ~/apps/postgres:/var/lib/postgresql/data
    environment:
      - POSTGRES_PASSWORD=<postgres_user_password>
      - POSTGRES_USER=<postgres_user>
      - POSTGRES_DB=<postgres_db>

In the same working directory which contains your Dockerfile and docker-compose.yml, run the command:

COPYCOPY

docker-compose up

Verify that the docker-compose up command is run successfully by running the docker ps -a command:

COPYCOPY

$ docker ps -a
CONTAINER ID   IMAGE                        COMMAND                  CREATED          STATUS                    PORTS                                       NAMES
94d146cce7bb   postgres:14-alpine           "docker-entrypoint.s…"   37 minutes ago   Up 36 minutes             0.0.0.0:5432->5432/tcp, :::5432->5432/tcp   postgres-db_postgres_1

It is important to ensure that your docker container is running well in your zVSI on s390x architecture. Similarly, you may try to connect to your Postgres DB using the command:

COPYCOPY

$ psql -h localhost -U <postgres_user> -d <postgres_db> -p 5432
Password for user spiking_user: <postgres_user_password>

where

<postgres_db> is the name of your database

<postgres_user> is the username

<postgres_user_password> is the password of the username

which you have created in the Dockerfile and docker-compose.yml previously

Now that we have ensured that our docker container is working well in zVSI on s390x architecture, we are ready to push the container image into the IBM Container Registry.

In the same working directory which contains your Dockerfile and docker-compose.yml, build the container image for the s390x architecture and tag the container image with the following command:

COPYCOPY

docker buildx build --platform linux/s390x -t jp.icr.io/hpvs-spiking/postgres-db .

where

jp.icr.io is the region of your IBM container registry

hpvs-spiking is a namespace in your IBM container registry

postgres-db is your application name

Log in to the IBM Cloud Container Registry with the following commands:

COPYCOPY

$ ibmcloud login -u iamapikey --apikey <your API Key>
API endpoint: https://cloud.ibm.com
Region: jp-tok
Authenticating...
OK

where

<your API Key> is the API Key of the IAM user you have created in your IBM cloud account

I have selected Japan-Tokyo as the region of my IBM container registry

You may use the command below to switch to another region e.g. us-south:

COPYCOPY

ibmcloud target -r us-south

Lastly, run the command:

COPYCOPY

ibmcloud cr login --client docker

Create a namespace and push the container image by running the following commands:

COPYCOPY

ibmcloud cr namespace-add hpvs-spiking

where

hpvs-spiking is a namespace in your IBM container registry

Push the container image you created earlier by using the command:

COPYCOPY

docker push jp.icr.io/hpvs-spiking/postgres-db

Display the container image digest. You can view and note the container image digest in your container registry, or alternatively use the following command:

COPYCOPY

docker inspect jp.icr.io/hpvs-spiking/postgres-db | grep -A 1 RepoDigests

To provision the IBM Hyper Protect Virtual Server instance in the next step, you would need to first create a contract. You may create a contract manually or use Terraform which aids in reducing the time needed for contract creation.

Follow the steps below to use Terraform to create a contract:

Use Git to clone the repo

Move to the following directory with the command:

COPYCOPY

cd linuxone-vsi-automation-samplesterraform-hpvscreate-contract-dynamic-registry

Update the docker-compose.yml file in the compose folder. You need to specify your container image digest and the exposed ports. See the following example of a docker-compose.yml file:

COPYCOPY

version: "3"
services:
  tradegpt:
    image: ${REGISTRY}/hpvs-spiking/postgres-db@sha256:<sha256>
    ports:
      - "5432:5432"

where

<sha256> is the image digest in your container registry

Set the required Terraform variables. To do so, you need to copy the file my-settings.auto.tfvars-template to my-settings.auto.tfvars, edit the copied file, and adapt the variable values. See the following example:

COPYCOPY

registry="jp.icr.io"
pull_username="iamapikey"
pull_password="<your API key>"
logdna_ingestion_key="<the ingestion key of your log instance>"
logdna_ingestion_hostname="syslog-a.jp-tok.logging.cloud.ibm.com"

where

jp.icr.io is the region of your IBM container registry

jp-tok is the region of your logging instance

<your API Key> is the API Key of the IAM user you have created in your IBM cloud account

<the ingestion key of your log instance> which you can retrieve on IBM cloud for your respective logging instance

To initialize Terraform, run the following command:

COPYCOPY

terraform init

Create the contract by using Terraform:

COPYCOPY

terraform apply

Display the contract that is created with the Terraform script by running the following command:

COPYCOPY

cat build/contract.yml

💡Copy the displayed contract. You need to paste the copied contract into the User Data text field in the next step.

1. Log in to IBM Cloud.
2. Go to the provisioning page for IBM Hyper Protect Virtual Server for VPC on the IBM Cloud catalog.

3. Name the virtual server instance

4. Ensure that the image is an IBM Hyper Protect image running on s390x Architecture

5. Paste the created contract information into User data.

6. Under the Networking, select your VPC and subnet.

7. Click Create Virtual Server.

8. Assign a floating IP address to the IBM Hyper Protect Virtual Server Instance and click Save.

9. Under your security group, ensure that you allow at least inbound IP connections on port 5432 and all outbound IP connections so that in the very last step, you will be able to connect to your PostgreSQL DB via <floating-ip-address> and the default PostgreSQL port of 5432

10. View the logs in the Log Analysis instance dashboard.

11. Ensure that there’s no error in the logs and that the IBM Hyper Protect Virtual Server is started successfully

12. Copy and paste the <floating-ip-address> and you may connect to your Postgres DB on the IBM Hyper Protect Virtual Server instance using the command:

$ psql -h <floating-ip-address> -U <postgres_user> -d <postgres_db> -p 5432
Password for user spiking_user: <postgres_user_password>

Continue to our subsequent article to explore how we applied these improved deployment strategies to launch a React Web Application on IBM Hyper Protect Virtual Servers.

*CTO’s Notes: In our final piece of this series, we apply our refined deployment strategies to a different yet critical aspect – launching a React Web Application on IBM Hyper Protect Virtual Servers. This article illustrates our journey, highlighting how the lessons learned from our PostgreSQL deployment greatly influenced our approach, resulting in a more efficient, secure, and scalable web application deployment.

Today, we would like to walk you through the journey of building your React Web application docker container image in an IBM Z Virtual server instance(zVSI) on IBM Cloud and then deploying the image in a contract as an IBM Hyper Protect Virtual Server instance.

There are 6 steps in this journey:

Step 1: Launch an IBM Z Virtual server instance(zVSI) on IBM Cloud

Step 2: SSH into your zVSI and create your docker-compose and Dockerfile for your React Web Application

Step 3: Test your docker container image by running docker-compose up in your zVSI to ensure it runs well in s390x architecture

Step 4: Build your container image for s390x architecture and push it into IBM Container Registry

Step 5: Create the contract using Terraform

Step 6: Initialize your IBM Hyper Protect Virtual Server instance with the contract from Step 5

You need to meet the following prerequisites:

1. Create an IBM Cloud account.
2. Create an API key for your user identity.
3. Install IBM Cloud CLI and the container registry CLI plug-in.
4. Install Git, Terraform, OpenSSL, Docker and Docker buildx
5. Create a VPC and a subnet with a public gateway and a security group with rules that allow at least inbound IP connections on port 3000 and all outbound IP connections.
6. Create a Log Analysis instance on IBM Cloud. Make a note of the ingestion host and the ingestion key.

Go to the IBM Cloud catalog and select “Virtual Server for VPC”

Choose your preferred location. For example, if you are in Singapore, select “Asia Pacific,” and then choose the “Tokyo” region.

Give your instance a name.

Select your preferred image. Under the Architecture section, ensure that you select the s390x architecture “IBM Z, LinuxONE”.

Next, select your profile.

Choose an SSH key to use for accessing the instance. If you don’t have an SSH key, you can follow the instructions to generate one.

Optionally, add data volumes on top of the boot volume.

Configure your VPC (Virtual Private Cloud) and request a floating IP address for your instance.

Click the “Create virtual server” button. Your new virtual server will be provisioned and available for use shortly.

After your virtual server has been provisioned, assign a floating IP address to the new virtual server instance and click Save because you will need to SSH in the next step.

Step 2: SSH into your zVSI and create your docker-compose and Dockerfile for your React Web Application

Once your instance is provisioned, you can access it by SSH using the floating IP address and the SSH key you selected during the setup earlier.

ssh -i your-ssh-key.pem root@floating-ip-address

Git clone your React Web application repo

Cd to the working directory of your React Web application

Create your Dockerfile

FROM node:alpine

RUN apk update && apk upgrade --no-cache libcrypto3 libssl3

# Declaring env
ENV NODE_ENV production

# Setting up the work directory
WORKDIR /react-app

# Installing dependencies
COPY ./package.json /react-app
RUN npm install

# Copying all the files in our project
COPY . .

# Starting our application
CMD npm start

Create your docker-compose.file

version: '3'

services:
  react-app:
    build:
      context: .
      dockerfile: Dockerfile
    environment:
      NODE_ENV: production
    ports:
      - "3000:3000"

In the same working directory of your React Web application which contains your Dockerfile and docker-compose.yml, run the command:

docker-compose up

Verify that the docker-compose up command is run successfully by running the docker ps -a command:

$ docker ps -a
CONTAINER ID   IMAGE                        COMMAND                  CREATED              STATUS                    PORTS                                       NAMES
4dd086fd5b20   aispikingcom-106_react-app   "docker-entrypoint.s…"   About a minute ago   Up About a minute         0.0.0.0:3000->3000/tcp, :::3000->3000/tcp   aispikingcom-106_react-app_1

It is important to ensure that your docker container is running well in your zVSI on s390x architecture. Similarly, you may use your browser to view the URL of your application e.g. http://localhost:3000 to ensure that your application running well as well.

Now that we have ensured that our docker container is working well in zVSI on s390x architecture, we are ready to push the container image into the IBM Container Registry.

In the same working directory of your React Web application which contains your Dockerfile and docker-compose.yml, build the container image for the s390x architecture and tag the container image with the following command:

docker buildx build --platform linux/s390x -t jp.icr.io/hpvs-spiking/react-web .

where

jp.icr.io is the region of your IBM container registry

hpvs-spiking is a namespace in your IBM container registry

react-web is your application name

Log in to the IBM Cloud Container Registry with the following commands:

$ ibmcloud login -u iamapikey --apikey <your API Key>
API endpoint: https://cloud.ibm.com
Region: jp-tok
Authenticating...
OK

where

<your API Key> is the API Key of the IAM user you have created in your IBM cloud account

I have selected Japan-Tokyo as the region of my IBM container registry

You may use the command below to switch to another region e.g. us-south:

ibmcloud target -r us-south

Lastly, run the command:

ibmcloud cr login --client docker

Create a namespace and push the container image by running the following commands:

ibmcloud cr namespace-add hpvs-spiking

where

hpvs-spiking is a namespace in your IBM container registry

Push the container image you created earlier by using the command:

docker push jp.icr.io/hpvs-spiking/react-web

Display the container image digest. You can view and note the container image digest in your container registry, or alternatively use the following command:

docker inspect jp.icr.io/hpvs-spiking/react-web | grep -A 1 RepoDigests

To provision the IBM Hyper Protect Virtual Server instance in the next step, you would need to first create a contract. You may create a contract manually or use Terraform which aids in reducing the time needed for contract creation.

Follow the steps below to use Terraform to create a contract:

Use Git to clone the repo

Move to the following directory with the command:

cd linuxone-vsi-automation-samplesterraform-hpvscreate-contract-dynamic-registry

Update the docker-compose.yml file in the compose folder. You need to specify your container image digest and the exposed ports. See the following example of a docker-compose.yml file:

version: "3"
services:
  paynow:
    image: ${REGISTRY}/hpvs-spiking/react-web@sha256:<sha256>
    ports:
      - "3000:3000"

where

<sha256> is the image digest in your container registry

Set the required Terraform variables. To do so, you need to copy the file my-settings.auto.tfvars-template to my-settings.auto.tfvars, edit the copied file, and adapt the variable values. See the following example:

registry="jp.icr.io"
pull_username="iamapikey"
pull_password="<your API key>"
logdna_ingestion_key="<the ingestion key of your log instance>"
logdna_ingestion_hostname="syslog-a.jp-tok.logging.cloud.ibm.com"

where

jp.icr.io is the region of your IBM container registry

jp-tok is the region of your logging instance

<your API Key> is the API Key of the IAM user you have created in your IBM cloud account

<the ingestion key of your log instance> which you can retrieve on IBM cloud for your respective logging instance

To initialize Terraform, run the following command:

terraform init

Create the contract by using Terraform:

terraform apply

Display the contract that is created with the Terraform script by running the following command:

cat build/contract.yml

💡Copy the displayed contract. You need to paste the copied contract into the User Data text field in the next step.

1. Log in to IBM Cloud.
2. Go to the provisioning page for IBM Hyper Protect Virtual Server for VPC on the IBM Cloud catalog.

3. Name the virtual server instance

4. Ensure that the image is an IBM Hyper Protect image running on s390x architecture

5. Paste the created contract information into User data.

6. Under the Networking, select your VPC and subnet.

7. Click Create Virtual Server.

8. Assign a floating IP address to the IBM Hyper Protect Virtual Server Instance and click Save.

9. Under your security group, ensure that you allow at least inbound IP connections on port 3000 and all outbound IP connections so that in the very last step, you will be able to access your application via http://<floating-ip-address>:3000

10. View the logs in the Log Analysis instance dashboard.

11. Ensure that there’s no error in the logs and that the IBM Hyper Protect Virtual Server instance is started successfully

12. To open your React web application, copy and paste the <floating-ip-address> and use your browser to open the website under the URL

http://<floating-ip-address>:3000

*CTO’s Notes: In our inaugural blog, we ventured into deploying a PostgreSQL database on an IBM Z Virtual Server Instance, aiming to leverage its robust capabilities. This journey, albeit insightful, led us to a crucial realization – our approach of running PostgreSQL directly on the zVSI without Docker was not the most effective path. This article unfolds our initial steps, the challenges we faced, and the valuable lessons we learned about database deployment in a virtualized environment.

Datasets are crucial for fine-tuning and training AI models. Storing the dataset in a secure environment is equally important. Today, I will show you how to host a PostgreSQL database on an IBM Z Virtual server instance(zVSI), before eventually hosting the same on a IBM Hyper Protect Virtual Server.

LinuxONE zVSI and Hyper Protect Virtual Server for VPC are two different service offerings available in IBM Cloud. The former provides a simple virtual server as a service capability of zSystems, that is easy and quick to try out while the latter provides container support on a Confidential Computing capable virtual server (on zSystems), using IBM Secure Execution (hardware level security), thus providing pervasive encryption and security for data in use along with data at rest and in motion.

This blog demonstrates how you can get started with bringing up workloads on IBM LinuxONE zVSI instance, before exploring using Hyper Protect Virtual Server for VPC (in another blog post).

Step 1: Launch an IBM Z Virtual server instance(zVSI) on IBM Cloud

Go to the IBM Cloud catalog and select “Virtual Server for VPC”

Under the Architecture section, select “IBM Z, LinuxONE.”

Choose your preferred location. For example, if you are in Singapore, select “Asia Pacific,” and then choose the “Tokyo” region.

Give your instance a name.

Select your preferred OS and instance profile.

Choose an SSH key to use for accessing the instance. If you don’t have an SSH key, you can follow the instructions to generate one.

Optionally, add data volumes on top of the boot volume.

Configure your VPC (Virtual Private Cloud).

Click the “Create virtual server” button. Your new virtual server will be provisioned and available for use shortly.

Step 2: Access Your Virtual Server Instance

Once your instance is provisioned, you can access it by SSH using the public IP address and the SSH key you selected during the setup.

ssh -i your-ssh-key.pem root@your-public-ip-address

Step 3: Set Up a PostgreSQL Database on Your Virtual Server

After accessing your virtual server, you can proceed to set up the PostgreSQL database. Here are the commands to install and start PostgreSQL on a Linux server:

sudo apt-get update sudo apt-get install postgresql postgresql-contrib sudo systemctl start postgresql sudo systemctl enable postgresql

Step 4: Secure Your PostgreSQL Database

Next, you should secure your PostgreSQL database by setting a password for the default PostgreSQL user and creating a new database user with limited privileges.

sudo -u postgres psql password 
Enter new password: your-password 
q createuser --interactive --pwprompt 
Enter name of role to add: your-database-user 
Enter password for new role: your-database-password 
Shall the new role be a superuser? (y/n) n 
Shall the new role be allowed to create databases? (y/n) n 
Shall the new role be allowed to create more new roles? (y/n) n

Step 5: Create a New Database

Now, create a new database and grant privileges to your new database user.

createdb your-database-name psql GRANT ALL PRIVILEGES ON DATABASE your-database-name TO your-database-user;

Step 6: Connect to Your PostgreSQL Database

Now, you can connect to your PostgreSQL database using the following command:

psql -U your-database-user -d your-database-name -h localhost -W

Currently, we’ve successfully set up a Postgres instance running on a zVSI. This environment serves as a testing ground for our product development before the actual deployment. Our next step is to convert this into a Contract for deploying as an IBM Hyper Protect Virtual Server. Stay tuned for detailed coverage in our next post.

Why IBM Hyper Protect Ensures Enhanced Security

IBM Hyper Protect is renowned for its advanced security measures, providing a robust shield for data and applications. With its unique hardware-level security features, IBM Hyper Protect ensures the utmost privacy and protection against both internal and external threats. It provides comprehensive protection for data at rest, in transit, and in use. Let’s delve deeper into why IBM Hyper Protect Virtual Servers is an ideal choice for hosting a PostgreSQL database:

Encryption at Rest, in Transit and in Use

IBM Hyper Protect offers protection for data at Rest, in Transit and in Use. Data at rest is encrypted using industry-standard algorithms, ensuring that even if an attacker gains physical access to the storage media, they cannot decipher the data. Data in transit is encrypted using secure protocols like TLS, protecting data from eavesdropping and man-in-the-middle attacks. Data in use is achieved by deploying the service as a contract that is immutable (not changeable), preventing alterations to the production execution code by restricting SSH access and data modifications. It’s essential to avoid developing using contracts to minimize extensive teardowns and reinstallation.

Isolation Techniques

One of the key features of IBM Hyper Protect Virtual Server is its isolation techniques. Each virtual server instance runs in an isolated environment, preventing one instance from affecting another. This isolation is achieved through the use of secure containers and microservices architecture. This ensures that even if one instance is compromised, the attacker cannot access other instances or the underlying infrastructure.

Hardware-Level Security

IBM Hyper Protect Virtual Server leverages the security features of IBM Z and LinuxONE, which are designed with security as a core principle. These systems provide hardware-level security features such as secure boot, cryptographic acceleration, and tamper-resistant hardware. These features ensure that the integrity of the system is maintained, and any attempts to tamper with the hardware are detected and prevented.

Compliance and Regulatory Requirements

IBM Hyper Protect helps organizations meet their compliance and regulatory requirements by providing a secure and auditable environment. The hardware-level security features, combined with the encryption and isolation techniques, ensure that data is protected from unauthorized access and tampering.

Resources on IBM Hyper Protect and PostgreSQL

IBM provides a wealth of resources to help organizations understand how IBM Hyper Protect Virtual Server complements and strengthens the security measures for PostgreSQL. Some of the resources include:

These resources provide detailed information on the security features of IBM Hyper Protect Virtual Server, how it integrates with PostgreSQL, and how organizations can leverage these features to meet their security and compliance requirements.

In conclusion, IBM Hyper Protect Virtual Server offers a comprehensive suite of security features that make it an ideal choice for hosting a PostgreSQL database. With its hardware-level security, encryption, and isolation techniques, IBM Hyper Protect Virtual Server ensures the privacy and protection of data, making it a trusted choice for organizations looking to secure their datasets in the cloud.

Discover how we refined our approach in the next article, where we delve into deploying PostgreSQL on IBM Hyper Protect Virtual Servers using Docker.

The most important difficulty facing multinational firms today, according to their CEOs and top management groups, is globalization. This is especially true in North America, Europe, and Japan. They are also well aware of how difficult it has gotten in the last ten years to determine internationalization strategy and which nations to do business with. However, the majority of businesses have continued to use the tactics they have always used, which emphasize standardized approaches to new markets while occasionally experimenting with a few local tweaks. Because of this, many multinational firms are having trouble creating winning strategies for emerging regions.

We think that a portion of the issue is that the application of globalization techniques is hampered by the lack of specialized intermediaries, regulatory frameworks, and contract-enforcing mechanisms in emerging markets, or “institutional voids,” as we called them in a 1997 HBR paper. The crucial role that “soft” infrastructure plays in the implementation of businesses’ business models in their domestic markets is typically taken for granted by companies in industrialized nations. However, in emerging markets, that infrastructure is frequently lacking or inadequate. There are plenty of instances. In order to personalize items to individual demands and raise people’s willingness to pay, businesses are unable to locate competent market research organizations that can provide them with accurate information about client preferences. There aren’t many end-to-end logistics companies that can carry raw materials and completed goods, allowing businesses to cut expenses. Companies must screen a significant number of applicants themselves before hiring because there aren’t many search services that can handle this task for them.

Numerous multinational corporations have performed poorly in developing countries as a result of all those institutional gaps. Since the 1990s, American firms have reportedly performed better at home than abroad, particularly in emerging economies, according to all the anecdotal data we have obtained. Unsurprisingly, many CEOs avoid investing in emerging economies and rather do so in industrialized countries. According to the Bureau of Economic Analysis, a division of the U.S. Department of Commerce, American corporations and their affiliate companies had assets totaling $173 billion in Brazil, $514 billion in Canada, and $1.6 trillion in the United Kingdom by the end of 2002.

Just 2.5% of the $6.9 trillion in investments that American corporations had at the conclusion of that year were represented by that amount. In spite of the fact that between 1992 and 2002, U.S. firms’ investments in China increased almost double, they still represented less than 1% of all of their foreign assets.

Many businesses avoided entering new markets when they ought to have done so. The majority of goods and services have had the fastest global market growth in developing nations since the early 1990s. By locating manufacturing and service operations there, where skilled labor and qualified managers are comparatively affordable, businesses can cut expenses. Additionally, a number of multinational firms from developing nations have expanded into North America and Europe using creative business models and low-cost techniques, such as China’s Haier Group in the home appliance industry. Western businesses must expand farther into emerging markets in order to create counterstrategies since these markets support different types of innovations than mature markets.

Western businesses won’t likely last very long if they don’t create strategies for interacting with developing nations along their value chains. CEOs cannot assume they can conduct business in emerging markets in the same manner that they do in developed countries, despite the fact that tariff barriers are falling, cable television and the Internet are becoming more widely used, and these countries’ physical infrastructure is fast improving. This is due to the fact that each country has a different level of market infrastructure. In contrast to less developed nations, which typically have inexperienced intermediaries and ineffective legal systems, industrialized economies typically have vast pools of seasoned market intermediates and efficient contract enforcement procedures.

Corporations are unable to easily adapt the tactics they utilize in their home nations to those new markets since the services offered by intermediaries either aren’t available there or aren’t very sophisticated.

We have conducted research and advised major corporations all around the world over the past ten years. We all took part in the McKinsey & Company Global Champions research project, and one of us oversaw a Harvard Business School comparative study of China and India. We know that successful businesses find ways to fill institutional gaps. They create unique business strategies for operating in developing markets in addition to creative ways to put those plans into practice. Additionally, they adapt their strategies to the institutional framework of each country.

We’ll demonstrate how businesses that take the time to comprehend the institutional variations among nations are more likely to pick the greatest markets to enter, pick the best tactics, and get the most out of doing business in developing nations.

Product Markets:

Over the past ten years, developing nations have opened up their markets and experienced fast growth, but businesses still find it difficult to gather accurate data about consumers, particularly those with low incomes. For instance, it’s challenging to build a consumer finance company in emerging nations since there aren’t the same data sources and credit histories that Western companies can use. In developing nations, market research and advertising are still in their infancy, and it can be challenging to locate the extensive datasets on consumption patterns that enable businesses to segment people in more developed markets.

Capital Markets:

The lack of sophistication of the capital and financial markets in emerging nations is noteworthy. There aren’t many trustworthy middlemen like credit-rating agencies, investment analysts, merchant bankers, or venture capital firms, except a few stock exchanges and government-appointed regulators. In order to finance their activities, multinationals cannot rely on raising debt or equity money domestically. Similar to investors, debtors lack access to up-to-date information on businesses. Businesses find it difficult to evaluate the creditworthiness of other companies or collect receivables after extending credit to clients. Additionally, emerging markets have notoriously bad corporate governance. Therefore, multinational corporations cannot rely on their partners to uphold local regulations and joint venture agreements. In fact, multinationals cannot assume that local enterprises are driven solely by the profit motive because crony capitalism is rife in emerging nations.

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Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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Losses are reduced with the aid of risk management. Additionally, it can prevent traders’ accounts from losing all of their funds. When traders lose money, there is a risk. Traders have the potential to profit in the market if they can manage their risk.

It is a crucial but frequently disregarded requirement for effective active trading. After all, without a sound risk management plan, a trader who has made substantial profits could lose it all in just one or two disastrous trades. So how do you create the ideal methods to reduce market risks?

This post will go over a few easy methods you can employ to safeguard your trading winnings.

Planning Your Trades

To begin with, confirm that your broker is suitable for frequent trading. Customers who trade occasionally are catered to by some brokers. They don’t provide the appropriate analytical tools for active traders and charge excessive commissions.

Take-profit (T/P) and stop-loss (S/L) points are two important ways that traders can plan ahead while trading. Successful traders are aware of the prices they are willing to buy and sell items for. They can then compare the resulting returns to the likelihood that the stock will achieve its objectives. They close the trade if the adjusted return is high enough.

On the other hand, failed traders frequently start a transaction with no concept of the points at which they would sell for a profit or a loss.

As Chinese military general Sun Tzu’s famously said: “Every battle is won before it is fought.” This phrase implies that planning and strategy—not the battles—win wars. Similarly, successful traders commonly quote the phrase: “Plan the trade and trade the plan.”

Consider the One-Percent Rule

Many day traders adhere to what is known as the 1% rule. In essence, this rule of thumb advises against investing more than 1% of your capital or trading account in a single transaction. Therefore, if you have $10,000 in your trading account, you shouldn’t have more than $100 invested in any one instrument.

For traders with accounts under $100,000, this tactic is typical; some even increase it to 2% if they can. Many traders may decide to use a smaller proportion if their accounts have bigger balances. That’s because the position grows in proportion to the amount of your account.

How to More Effectively Set Stop-Loss Points

Technical analysis is frequently used to determine stop-loss and take-profit levels, but fundamental analysis can also be very important for timing. For instance, if anticipation is high for a stock that a trader is holding ahead of earnings, the trader could wish to sell the stock before the news is announced if expectations have risen too much, regardless of whether the take-profit price has been reached.

Because they are simple to compute and closely monitored by the market, moving averages are the most generally used method of determining these points. The 5-, 9-, 20-, 50-, 100-, and 200-day averages are important moving averages.

These are best set by applying them to a stock’s chart and analyzing whether the stock price has reacted to them in the past as either a support or resistance level.

Another effective technique to establish stop-loss or take-profit levels is on support or resistance trend lines. These can be formed by joining prior highs or lows that happened on a considerable amount of volume above the norm. The trick, just like with moving averages, is figuring out at what points the price responds to trend lines and, of course, on heavy volume.

Setting Stop-Loss and Take-Profit Points

The price at which a trader will sell a stock and accept a loss on the transaction is known as a stop-loss point. This frequently occurs when a trade does not turn out as a trader had hoped. The points are intended to stop the belief that “it will come back” and to stop losses before they get out of control. For instance, traders frequently sell a stock as soon as they can if it breaks below a crucial support level.

A take-profit point, on the other hand, is the cost at which a trader will sell a stock and benefit from the transaction. At this point, the potential upside is constrained by the inherent dangers.

Calculating Expected Return

To determine the predicted return, stop-loss and take-profit points must also be established. It is impossible to exaggerate the significance of this calculation since it compels traders to carefully consider and justify their trades. Additionally, it provides them with a methodical manner to evaluate several deals and pick only the most successful ones.

This can be calculated using the following formula:

[(Probability of Gain) x (Take Profit % Gain)] + [(Probability of Loss) x (Stop-Loss % Loss)]

For the active trader, the outcome of this computation is an expected return, which they will compare to other possibilities to decide which stocks to trade. The past breakouts and breakdowns from the support or resistance levels can be used to assess the chance of gain or loss; for seasoned traders, an informed guess can also be used.

Diversify and Hedge

Never put all of your trading eggs in one basket to ensure that you get the most out of it. You’re putting yourself up for a significant loss if you invest all of your funds in a single stock or financial instrument. Therefore, keep in mind to diversify your holdings across industry sectors, market capitalization, and geographic regions. This increases your opportunities while also assisting you in managing your risk.

Additionally, you might come upon a situation where you need to hedge your position. When the findings are due, think about taking a stock position. Through choices, you may think about adopting the opposing stance to help defend your argument. You can unwind the hedge after trade activity slows down.

Before executing a deal, traders should always know when they intend to enter or quit it. A trader can reduce losses and the number of times a trade is prematurely exited by using stop losses efficiently. Make your battle strategy in advance so that you can already know when the conflict is over.

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Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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Any legal professional may find AI appealing if the instrument makes time savings claims for jobs with high value. Although there are numerous options available, it’s crucial to understand what to think about before making a purchase.

Let’s talk about the most crucial factors you should consider before making your choice. These are the top 6 crucial elements.

Onboarding

The most crucial thing to keep in mind is that your investment in AI technology should enable you to save time, not the other way around. Avoid solutions that need your personnel to undergo extensive training. You should consider how this technology will help you save time. Is it intended to educate a computer to extract data, or can I read contracts with it more quickly? When will the platform setup be completed? Is the dashboard simple to use and intuitive? Does it provide pre-made checklist templates that I can edit to meet my needs or use right away? It will be easier to ensure a seamless onboarding process if you keep all of these questions in mind.

Research

Warren Buffet, a renowned investor, suggested that you only invest in things you are familiar with. This holds a great deal of truth. You cannot grasp what a good investment is or its prognosis for the future if you know nothing about AI or the business. That implies that you must enter the industry, which can be accomplished through extensive research.

Getting someone to invest for you is the greatest option if you already have too many time restrictions. Numerous financial service providers can assist with this. Hargreaves Lansdown is one of the several instances found online. They are an FTSE 100 firm that provides guidance and a reliable investment platform so you can have as much independence or help as you require.

Once you are aware of the market and have narrowed down your alternatives, investigate the potential business. Examine its procedures, long-term goals, and past performance.

Even if the sector seems promising, investing in AI is a high-risk move that will probably also reap large profits. Start by evaluating a company’s stock’s volatility in comparison to the market at large. It might not be a safe investment if it fluctuates. By calculating a company’s beta, you can accomplish this. The next step is for you to decide if this level of risk is appropriate for your investing style.

You can invest in well-known businesses that make significant AI investments if you choose a less hazardous option. For instance, Amazon is a reliable stock that constantly invests in the industry’s R&D.

Keep Watching the Market

Following your initial investment, it is up to you to monitor its development and performance. To track changes in pricing, make frequent checks. Additionally, you must pay attention to the sector itself. A stock’s performance is susceptible to everything from labor shortages to natural calamities and political changes. Keep an eye out and consider the risk. Don’t be frightened to let it go if you decide that the moment is right to sell.

Always be conscious of the possibility that you could lose money when investing. However, using these tactics, you ought to be able to establish the conditions and standards necessary to recognize and maintain a sound AI investment.

You should not feel as though you will miss out if you decide to invest elsewhere if it does not seem like the correct industry for you.

Versatility

It’s crucial that your equipment can be modified if your company conducts business internationally. The question, “Can the system be used on different kinds of projects?” should be asked at this point. Today’s legal technologies frequently use publicly accessible contracts to train their artificial intelligence (AI) in English. Users of this method can ask simple inquiries and receive some respectable answers, but only in English. Although the pre-trained model may save you time in the beginning, it is unlikely to accomplish your end goal of purchasing an AI product. This is due to the fact that pre-trained models cannot produce results of the same caliber in languages other than their own. As a result, users who work with material in various languages would need to train the AI in their mother tongue from scratch, which would take too much time and money to even begin.

You should be able to transfer information between languages in addition to between various question, and contract forms thanks to the technology you invest in. In various languages, it ought to be able to give a higher level of accuracy than anticipated. As a result, it is more economical when quick adaptation and the best outcomes are needed.

Compatibility and Integration

The AI technology you select should work with your existing systems and procedures. To provide a seamless billing and invoice-generating process, your AI tool can interface with your invoice tool. For instance, simple capabilities like the ability to attach subject and customer numbers to your various projects can help.

View how AI fits into your company’s legal technology roadmap and how you can integrate AI technology into your legal department’s procedures to save time, increase productivity, and cut costs by downloading our most recent whitepaper, “A Pragmatic Approach to AI in the Legal Department.”

Reporting

Can your AI technology perform tasks other than data extraction and analysis? Your contract review process might be sped up depending on the AI solution you use. You might not save as much time as you thought you would if you then have to spend time pulling the data from the system and altering it to make it presentable to your clients. The AI tool you use should assist you by not only extracting the material for you but also checking the outcomes of the AI analysis and modifying the comments and replies in a manner that is client-ready. You should be able to discover solutions and visualize the data in previously unthinkable ways that have a substantial influence on the choices you make on a daily basis.

Spiking Race to 100

We are extremely excited to announce we have a new product called Race to 100. You can track the best investors who have made more than 100% profit in a year and replicate their portfolios in just a few clicks. Be the first to learn these top investors’ new trades and trade alongside the shoulders of the giants. Try Race to hundred now at spiking.com/race!

Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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Some signs of life are emerging for growth stocks. Growth stocks are off to a much better start in 2023 after a miserable 2022. The main causes of that are macroeconomic variables. The inflation rate is dropping, according to recent economic data. Additionally, long-term government bond yields have dramatically decreased.

These are advantages for growth stocks, which are businesses where investors look to determine the long-term worth of a quickly growing company. Nevertheless, as the Federal Reserve works to steer the economy towards a soft landing, economic volatility is expected to remain high. These 10 picks could profit from the shifting economic winds, even though it’s unclear whether this is a new bull market for growth stocks:

Autodesk Inc.

A well-known provider of software as a service with a concentration on imaging and graphic design tools is Autodesk. Autodesk is more interested in developing applications for the industrial sector than in serving industries like media or advertising. Customers can design product models, factories, building designs, and other similar things with Autodesk software. By using modeling software, businesses may experiment and test out new concepts without using up physical resources or facilities.

Unity Software Inc.

The leading graphics engine is Unity. This kind of software acts as the video games’ operating system. To create the graphics, interactions, characters, and other components that make up a video game, game developers use Unity or its rival, Unreal Engine.

Approximately 70% of the highest-grossing games currently use Unity as their graphics engine, giving this platform its best market position. However, it is also well-known in the augmented reality industry.

Albemarle Corp.

One of the top producers of lithium in the world, Albemarle is situated in the United States and also produces other specialty chemicals including bromine. It has sizeable holdings that produce lithium in the US, Chile, and Australia, and it has more purchases in mind for the Australian market.

Over the next ten or more years, the market for lithium should experience rapid expansion. And Albemarle increased revenues from $3.1 billion in 2017 to $7.3 billion in 2018 despite a recent rise in lithium prices and demand.

However, the lithium industry has been shaken by a slowdown in the Chinese market this year, with the ALB stock plunging 30% since February.

Visa Inc.

The ideal growth stock for these peculiar times is Visa. That’s because it gains from the present substitution of safer alternatives for traditional banking stocks. As far as payment companies go, Visa’s business model is particularly secure because it is compensated based on transaction volume. On the other hand, the pandemic caused a slowdown in international travel, which decreased the volume of profitable cross-border trade. Visa should resume its customary double-digit annualized top-line growth as the global economy returns to normal, and the stock currently trades for 27 times projected earnings.

Microsoft Corp.

The technology industry’s newest hot trend is artificial intelligence. Many smaller-capitalization businesses are vying for the AI market, but they haven’t established their business strategies yet.

Microsoft is a great option for investors looking for a sizable, prosperous company with a dominant position in the AI industry. By implementing OpenAI’s GPT-4 into its Bing search engine, the company has risen to the top of the field. It should eventually be able to integrate AI more deeply into Office and other key products, modernizing the Windows working environment.

Danaher Corp.

One of the most prosperous roll-ups listed in America is Danaher. The corporation, an industrial one, is today mostly concerned with healthcare. Shares have increased 20-fold over the previous 20 years because of the company’s ongoing M&A program and tried-and-true Danaher Business System. Simply put, Danaher buys underperforming assets from other parties, improves them to increase their profitability, and then utilizes the extra income to buy new assets. Repeat after me. Danaher now has a significant presence in key, high-margin components of the healthcare ecosystem, such as lab instruments and equipment. Recent years have seen significant growth in the company’s earnings as a result of COVID-19 testing and vaccine development. The shares have decreased as the tailwind has diminished, but the long-term outlook is still favourable.

Charles River Laboratories International Inc.

Health care diagnostics and research company Charles River Laboratories are dedicated to medication discovery. Particularly, Charles River has long been a pioneer in the supply of rodents like rats and mice used in pharmacological trials. In 2021, Charles River contributed to the clinical trials of more than 85% of the medications that finally won FDA clearance. Charles River has diversified its business operations in recent years to include areas like outsourced research and safety evaluation services for biotech companies.

Clearfield Inc.

The broadband internet industry is the focus of the smaller, growing corporation Clearfield. In particular, Clearfield provides fibre management, protection, and distribution services. As they scale up the deployment of new fibre capacity, they are crucial for telecom firms.

In recent years, Clearfield has grown significantly. From $93 million in 2020 to $271 million in 2022, its revenue increased. Naturally, some of this had to do with the current work-from-home craze. Clearfield’s growth doesn’t seem to be able to keep up with investor expectations, as CLFD stock has dropped by almost 55% over the last six months.

Sprinklr Inc.

A software-as-a-service business centred on the client experience is called Sprinklr. It provides tools and apps specifically to assist businesses in managing their internet brands and reputations. It helps big businesses maintain track of how consumers interact with their brands and marketing initiatives by assisting firms in monitoring a variety of channels, ad campaigns, keywords, and other factors. There is excitement right now since Sprinklr is introducing new products meant to steal market share from its main competition Sprout Social Inc. (SPT). While Sprinklr trades for only 5.5 times revenue, Sprout shares fetch a premium of 11 times revenue.

Grupo Aeroportuario del Pacifico SAB de CV

Pacific Airports, a subsidiary of Grupo Aeroportuario del Pacifico, is authorized to manage 14 airports in Jamaica and Mexico. The major concessions, which last until 2048, cover tourist hotspots like Los Cabos and Puerto Vallarta, as well as the big towns of Guadalajara and Tijuana.

Since the company’s IPO in 2006, Pacifico shares have generated a cumulative return of more than 600%. What explains this extraordinary success? Over the years, Mexico has seen a burgeoning tourist industry, and in 2021, those gains increased as the Mexican government eliminated COVID-19 limitations much earlier than other nearby tourist hotspots.

Spiking Race to 100

We are extremely excited to announce we have a new product called Race to 100. You can track the best investors who have made more than 100% profit in a year and replicate their portfolios in just a few clicks. Be the first to learn these top investors’ new trades and trade alongside the shoulders of the giants. Try Race to hundred now at spiking.com/race!

Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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The act of buying and selling a financial instrument on the same day, or perhaps several times throughout the day, is known as day trading. If done properly, taking advantage of slight price changes can be a profitable game. However, it can be risky for novices and anyone else who doesn’t follow a well-thought-out plan.

For the enormous volume of trades that day trading creates, not all brokers are suitable. However, some work fantastically with day traders.

Day Trading Strategies

Knowledge Is Power

Day traders need to be up to date on the most recent stock market news and events that have an impact on stocks, in addition to being familiar with day trading methods. This can include announcements about leading indicators, interest rate plans from the Federal Reserve System, and other economic, commercial, and financial news.

Do your homework, then. Create a list of the stocks you want to trade. Maintain knowledge of the chosen businesses, their stocks, and general markets. Examine business news, and bookmark reputable websites for news.

Set Aside Funds

Determine the capital you’re willing to risk on each deal and make a commitment to it. Many prosperous day traders place trades with a risk of 1% to 2% or less of their account balance. Your maximum loss per trade will be $200 (0.5% x $40,000) if you have a trading account worth $40,000 and are ready to risk 0.5% of your capital on each transaction.

Set aside an excess of money that you can trade with and are willing to lose.

Set Aside Time

Your time and attention are needed for day trading. Actually, you’ll have to sacrifice the majority of your day. If you only have a short amount of time, don’t think about it.

A trader who engages in day trading must monitor the markets and look for chances that might present themselves at any time throughout trading hours. The goal is to move fast and with awareness.

Start Small

As a newbie, limit your attention to no more than one or two stocks at a time. With fewer stocks, it is simpler to track and identify opportunities. Trading fractional shares has become increasingly popular recently. This gives you the option to invest smaller sums of money.

As a result, several brokers now allow you to buy a fractional share for as little as $25, or less than 1% of a whole Amazon share, if Amazon shares are currently trading at $3,400.

Ignore Penny Stocks

You’re undoubtedly searching for bargains and inexpensive costs but avoid penny stocks. These equities are frequently illiquid, and your prospects of striking it rich with them are frequently slim.

Many equities that trade for less than $5 per share are taken off the major stock exchange lists and can only be traded over the counter (OTC). Avoid these unless there is a genuine chance and you have done your homework.

Limit Orders Can Reduce Losses

Choose the orders you’ll use to place and execute trades. Are you going to utilise limit orders or market orders? With no price guarantee, a market order is filled at the current best price. When you don’t care about getting filled at a particular price and simply want to enter or exit the market, it can be helpful.

While the price of a limit order is guaranteed, execution is not. Because you determine the price at which your order should be filled, limit orders can help you trade more precisely and confidently. Limit orders allow you to reduce your loss on reverses. However, your order won’t be filled, and you’ll keep your position if the market doesn’t reach your price.

Time Those Trades

Price volatility is a result of the large number of orders made by traders and investors that start to execute as soon as the markets open in the morning. At the open, an experienced player might be able to spot trends and time orders to benefit. But for newcomers, it could be preferable to observe the market for the first 15 to 20 minutes before acting.

Typically, the middle of the day is less volatile. Then, as the closing bell approaches, activity starts to build back up. Although possibilities can be found during rush hours, it’s safer for newbies to steer clear of them at first.

Stick to the Plan

Although they must move quickly, successful traders do not need to think quickly. Why? Because they have the discipline to stick to their trading plan and a predetermined trading strategy. Instead of attempting to chase earnings, it’s crucial to firmly adhere to your strategy. Don’t let your feelings overpower you and cause you to change your tactics. Recall the day trader’s credo: “Plan your trade, trade your plan.”

Be Realistic About Profits

To be profitable, a strategy does not need to be successful every time. Only 50% to 60% of the trades that successful traders win are likely to be profitable. They gain more from their winners than they do from their losers, though. Make certain that the financial risk associated with each trade is restricted to a predetermined portion of your account and that the entry and exit strategies are well-defined.

What Makes Day Trading Difficult?

Day trading requires a lot of experience and knowledge, and there are a number of things that might make it difficult.

First of all, be aware that you’re dealing with traders who are pros. These people have access to the most cutting-edge equipment and contacts in the business. They are, therefore, in a position to succeed in the end. Jumping on the bandwagon usually results in higher income for them.

Next, recognise that Uncle Sam will demand a portion of your revenues, regardless of how small. Keep in mind that you will be required to pay taxes at the marginal rate on any short-term gains—investments you keep for one year or less. The fact that your losses will equal your earnings is a benefit. Additionally, as a novice day trader, you can be more susceptible to emotional and psychological biases that have an impact on your trading, such as when your own money is at stake, and you’re experiencing a loss on a transaction. Professional traders with extensive experience and resources can typically overcome these obstacles.

Spiking Race to 100

We are extremely excited to announce we have a new product called Race to 100. You can track the best investors who have made more than 100% profit in a year and replicate their portfolios in just a few clicks. Be the first to learn these top investors’ new trades and trade alongside the shoulders of the giants. Try Race to hundred now at spiking.com/race!

Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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You may have read in the news about high-dividend companies and upcoming dividend stocks and pondered whether you should buy any of these high-dividend-producing companies. Investment in these companies has disadvantages; let’s explore this further by starting with the basics.

How Do Dividends Work?

The total return on investment for a shareholder comes in the form of capital growth due to an increase in share value and dividend payments. Dividends are regular sums of money that businesses pay their shareholders out of their profits. In addition to cash, they can also take the shape of securities or other financial assets.

What Are Dividend Stocks, And Why Should You Buy Them?

A company that regularly distributes sizable dividends from its profits to its owners is said to have dividend stocks. Large dividend payouts could be considered by large, successful firms, in particular, if they believe that their stock prices would remain stable. This would satisfy current shareholders while also luring new ones, raising the stock price. Several times a year, some firms pay dividends in the form of total dividends and interim dividends.

Therefore, if a company that regularly distributes big dividends announces an impending dividend release, you should buy it because you will receive the dividend (by merely investing the share price at the time of purchase) and will probably benefit from capital growth in the near future. Last but not least, a company’s capacity to declare dividends is a sign that it is both financially stable and growing.

It is imperative that you comprehend a few financial concepts linked to dividends before continuing to read about the top dividend-paying stocks in 2023:

To calculate dividend growth, divide the annual cash dividend paid by the corporation per share by the current stock price.

Dividend Yield is determined by multiplying the share price by the dividend per share.

The final dividend paid to shareholders is divided by the company’s year-total profits to determine the payout ratio for dividends.

Avoid investing in stocks from companies that have an abnormally high dividend payment ratio (let’s say 50%), as they may not have enough capital for growth and reinvestment. Top dividend-paying stocks in 2023 aren’t always in your best interests, as a result.

Best Dividend Stocks to Watch Out for in 2023

AbbVie

Since its 2013 separation from Abbott Labs (ABT 0.36%), the pharmaceutical company AbbVie has a stellar dividend track record. AbbVie has grown its payout by an astounding 270% since its inception through early 2023. By increasing its distribution each year, Abbott’s history of dividend growth has been continued by AbbVie.

Brookfield Infrastructure

Operating a diverse portfolio of infrastructure companies with an emphasis on utilities, transportation, energy midstream, and data is Brookfield Infrastructure. To fund their expanding dividend, the firms provide a comparatively steady cash flow. Early in 2023, the corporation announced that it had increased its payment for the 14th year in a row.

Over the long run, Brookfield plans to increase its dividend at a rate of 5% to 9% annually, driven by the organic development of its current companies and acquisitions. In 2022, it secured $2.9 billion in funding across five investments, which ought to support expansion over the ensuing few years.

Consolidated Edison

Consolidated Edison, also known as ConEd, is a gas and electric provider that serves the greater New York City area. ConEd has a strong history of paying dividends. For the previous 49 years straight, the firm has grown its payment, the longest stretch of any utility in the S&P 500 index. Most likely, the trend won’t end soon. ConEd is constantly investing in growing its business, including more money spent on environmentally friendly endeavours as the American economy quickens its transition to cleaner energy sources.

Crown Castle International

A REIT with a particular focus on owning fibre optic cable, tiny cells, and cell towers in the United States is called Crown Castle. The next-generation 5G network for the mobile industry depends on this infrastructure. In order to fund 7% to 8% annual dividend growth, Crown Castle sees a long-term opportunity to invest in new 5G-related infrastructure. Since 2016, it has increased its dividend payment at a compound annual rate of 9%.

Digital Realty

Data Centre management is the primary emphasis of Digital Realty, a REIT. The business has a strong dividend track record. In 2022, it increased its dividend payment for the 17th year in a row. Given the requirement for new infrastructure to accommodate the rapid expansion of data globally, the rising trend should continue.

Enbridge

Enbridge, a major Canadian oil pipeline company, has consistently been a top dividend stock. It has increased its payout every year for the past 28 years while continuing to pay dividends for more than 68 years.

Enbridge is adjusting by investing in infrastructure to enable offshore wind farms and natural gas projects as the world switches its fuel supply from oil to cleaner substitutes. The firm is on track to expand its cash flow per share at a mid-single-digit annual rate for the foreseeable future as a result of the investments, which should support further dividend growth.

Gilead Sciences

One of the biotechnology industry’s most alluring dividends is paid by Gilead Sciences. Since it began paying dividends in 2015, the company has a strong track record of doing so, increasing its distribution each year. The biotech is anchored by its potent HIV brand.

But Gilead has also been able to profit from Remdesivir, one of the few COVID-19 medicines that has received FDA approval. Other promising medications in the company’s pipeline should support ongoing revenue growth in the future.

Spiking Race to 100

We are extremely excited to announce we have a new product called Race to 100. You can track the best investors who have made more than 100% profit in a year and replicate their portfolios in just a few clicks. Be the first to learn these top investors’ new trades and trade alongside the shoulders of the giants. Try Race to hundred now at spiking.com/race!

Want to learn more about the various trading strategies and see which one suits you the best? Led by Dr. Clemen Chiang, the Spiking Wealth Community is an online community network. Together we are catching the Spikes so that you have faith, hope, and love in everything you do. Spiking Wealth Community helps you to accomplish time squeeze by connecting the dots through online courses, live trading, winning trades, and more. Join us for Free and start your Spiking Wealth Journey today!

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As you work to earn more money, investing is a tried-and-true way to make your money work for you. You can be able to raise your money several times over time if you constantly invest your money. Because of this, it’s crucial to start investing as soon as you have any money set aside for the purpose. Furthermore, a good place to start is the stock market.

Legendary investor Warren Buffett defined investing as “forgoing consumption now in order to have the ability to consume more at a later date.”

Define Your Tolerance for Risk

What is your risk tolerance, or how willing are you to take the potential of losing money if you invest? Stocks can be divided into a number of categories, including value stocks, aggressive growth stocks, high capitalization stocks, and small-cap stocks. There are varying degrees of risk with each. You can focus your investment efforts on the stocks that complement your risk tolerance once you’ve established it.

Decide on Your Investment Goals

An investment objective can be to raise the amount of money in your account if you’re just starting out in your profession. If you’re older, you might desire to make money in addition to building and safeguarding your wealth.

Your investment objectives can be to save for college, buy a house, or support your retirement. Objectives might evolve over time. Just be careful to identify them and revisit them from time to time so you can stay focused on accomplishing them.

Determine Your Investing Style

While some investors prefer to set it and forget it, others want to actively manage their investments. Though your preference might change, choose a strategy to get going.

You could manage your investments and portfolio on your own if you are confident in your knowledge and abilities in the field. You are able to invest in stocks, bonds, exchange-traded funds (ETFs), index funds, and mutual funds using traditional Internet brokers like the two described above.

You can get assistance from a seasoned broker or financial advisor with your investment choices, portfolio management, and portfolio adjustments. This is a wonderful choice for novices who recognize the value of investing yet may desire the assistance of a professional.

An automated, hands-off alternative to working with a broker or financial advisor, robo-advisors are frequently less expensive. Your goals, level of risk tolerance, and other information are collected by a robo-advisor program, which then automatically invests for you.

Choose Your Investment Account

If your workplace has a retirement plan, such as a 401(k), you can invest via it in a variety of stock and bond mutual funds as well as target-date funds. It might also provide the chance to purchase employer stock.

After enrolling in a plan, automatic contributions are made at the level you specify. On your behalf, employers could make matching donations. Your account balance grows tax-deferred, and your donations are tax-deductible. This is an excellent approach to increasing your investment returns with little work. Additionally, it can teach investors the discipline of consistent investing.

In addition to having a workplace plan, you can start investing in stocks by creating an individual retirement account. Alternatively, you could choose a standard, taxable brokerage account. You typically have a wide range of stock investment possibilities. Individual stocks, stock mutual funds, exchange-traded funds (ETFs), and stock options may be among them.

Learn to Diversify and Reduce Risk

Understanding diversification in investments is crucial. Simply said, investing in a variety of assets, or diversification, lowers the danger that the performance of one investment will materially impede the return on your entire investment portfolio. It could be interpreted as slang for not putting all of your financial eggs in one basket.

When investing in individual equities, diversification might be challenging if your budget is tight. For instance, you might only be able to invest in one or two businesses with just $1,000. There is a higher risk as a result.

Mutual funds and ETFs can be useful in this situation. The majority of stocks and other investments are often held by both types of funds. As a result, they offer greater diversification than a single stock.

Minimums to Open an Account

There are minimum deposit amounts required by several banking institutions. In other words, until you make a particular number of deposits, they won’t accept your account application.

It benefits from comparison shopping and not just learning the minimum deposits. View the reviews of our brokers below. Certain businesses don’t demand minimum deposits. If you have a balance above a specific amount, other costs, like trading fees and account administration fees, might be waived. Others might give you a set number of commission-free trades in exchange for creating an account.

Stock Market Simulators

A stock market simulator can be a useful tool for people who are new to trading and want to practice without jeopardizing any of their own money. There is a huge selection of trading simulators accessible, both paid and free. The use of Investopedia’s simulator is totally free.

Users of stock market simulators can invest fictitious, virtual funds in a portfolio of stocks, options, exchange-traded funds, or other securities. These simulators often monitor changes in investment price along with, depending on the simulator, additional noteworthy factors like trading costs or dividend payouts.

Investors carry out virtual transactions as though they were carrying out actual transactions.

Users of the simulator can learn about investing through this approach and experience the effects of their hypothetical investment selections without risking any of their own money. A further motivation to make wise investments is the ability to compete against other users in some simulators.

Conclusion

You can invest in stocks with a fair amount of cash if you’re just getting started as an investor. To ascertain your investment objectives, risk tolerance, and the expenses related to stock and mutual fund investing, you will need to perform some research. Additionally, you should research different brokers to determine which may best meet your needs and to understand their unique requirements.

Once you do, you’ll be in a good position to benefit from the significant financial upside that stocks can offer you over time.

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