Archive for November, 2008
November 6th, 2008 at 08:44pm
Under Guest+ Option Trading+ Stock Market
Have you ever wondered why the result of your stock market trading efforts have been miniscule, and far below set target in spite of all positive signals generated from our stock analysis indices? The tip revealed below will no doubt impact on our stock trading efforts if well understood and practiced.
The reason why most investors make poor harvest in their stock trading efforts is because of the failure to investigate or visit the companies they intend buying into for “inside information”. The fundamental and technical analysis gives information about the past and projected future performance of an organization. The missing link is the failure to realize that the published report of the company performance is the result of her yesterday’s effort. The result of her actions today will reflect in her future performance result. Inside information gives us first hand information regarding the present health of a growing concern. It tells us what the company is up to now, what they are doing, and what they will do in the future. It’s what a company is doing presently that reflects in her quarterly and audited end of year result.
There are basically two ways to get inside information about a firm. First, do Search engine research for all current news about the firm we intend adding to our Portfolio in the press, look out for issues pertaining to new contract signed or revoked, creditors rating of the firm, litigation and etc. The second approach is to visit the firm, listen to conversation at the reception, pick the brain of the workers. Ask questions. Is the company retrenching? Watch out for new renovation works in progress, new fleet of cars and equipment purchased. Is the firm introducing new products? Are the Employees happy and motivated? Answers to these questions can give us a clue as to the direction the company is going. The result of such visit could be quite revealing and it will help to confirm our decision to invest in that organization or not.
But, before you ask me why all these? My simple answer to that question is a big “YES”. The additional effort you put for such investigation can not be compared to the attendant Consequences of a failed investment. To buttress my argument, hear this: There was a firm that was once listed in the exchange and was doing well in the market. Every day people bought and sold this shares. But a day came, an intelligent investor visited the company and discovered to his chagrin, that the company’s gate was under lock with over grown weeds for the past few months. Before the regulators got to know about it, many of the investors have suffered various degree of losses. It’s what a firm does now that finds expression in her end of year financial report. Be a smart investor and do your stock investing wisely.
By admin
November 6th, 2008 at 08:40pm
Under Guest+ Option Trading+ Stock Market
For any stock market player to have good success in his or her stock trading efforts, such
one must as a necessity have a clearly defined objective. Just like every traveler. All
traveler must have a destination, and when he arrives at the predetermined destination(goal), he
disembarks. But every bus stop is the destination of any traveler without a destination.
It’s therefore imperative that for an investor to optimize his investment trading in the
Stock market, such a one must have a deep understanding of what type of investor he or she is.
Having this understanding helps to articulate our Investment goals and plans toward realizing our overall financial objectives.
There are basically four classes of investors. These are:
Passive Investors: These classes of investors employ their hard earned money to acquire shares, stocks, or any other investment and expect excessive returns in terms of dividends and bonuses without doing anything thereafter. Perhaps, this group of investor does not have time to nurture and monitor their investments or lack the basic information required of a stock market player. These types of investors are more at home with mutual funds investments. They should also look at private placements, initial public offers, and normal public offers with good fundamentals. If possible engage a good stock broker and pay him well.
Portfolio Builders: This group of investors builds their portfolio gradually for the sake
of the future. They believe in the aged long saying that “What You Save, Will Save you”. They tie their investment plans to their retirement program. They are always on the watch out for growth stocks (i.e, rapid growing companies with good share’s future prospects), and blue clips for investment opportunities. If well done, they can take up positions in the board of such companies depending on the volume of their holdings. Call them pensioners but their generation never lacks.
Active Investors: This class of investors trade with their investments. They look out for undervalued situations. They buy bargains-buying companies when they are under priced. They buy equities at low price and resell at a higher price. The difference between the sell and buy price then becomes their margin (profit). This group of investors can make obscene profit from their investments. These are the millionaire group and only a few have been able to enter into this wealth realm via stock market trading. Since it is an established fact that the stock market investment is information driven, it therefore behoves that for this group of investors to do well, they must be in the forefront seeking relevant stock investment information
Poverty Victims: These are the people who engage their money in investments that yield little or no profit. They are risk averse. They are characterized by fear of loss, feeling of i don’t earn enough to invest, slothfulness, and wickedness. They blame every body and government for their lack luster predicament. Just like the story of the unprofitable servant, the best that would happen to these group of investors is that even the small that they have will taken from them and given to the rich.
By admin
November 5th, 2008 at 11:18pm
Under Guest+ Option Trading+ Stock Market
While there are literally hundreds of books and classes out there that promise they can teach you how to triple your money in under a year in the stock market, it is well-known that these are scams. How, then, can you find an honest and accurate way to learn about the stock market? Again, there are many options to sift through. This article will give you the three easiest, cheapest, and fastest ways to learn about the stock market. Be sure to broaden your horizon by learning about the stock market from all three perspectives, and finding your own ways once you have exhausted these resources.
Step 1:
One of the fastest and easiest ways to learn about the stock market is to visit legitimate educational websites on finance and investing. There are many sites that are devoted to teaching people about the stock market. These sites offer articles and tutorials that explain how the stock market works, how to invest, and how to master financial lingo. By visiting many different sites, you can gain an appreciation of the market from multiple aspects. Some of these sites include The Motley Fool, Investopedia, and my website, TheFinancialHandbook.
Step 2:
Another way to learn about the stock market is to read books, magazines, and newspapers about the market. There are many respectable periodicals including the Wall Street Journal, Barron’s, BusinessWeek, Forbes, Fortune, and Bloomberg Markets. In addition to publications on what is happening currently in the market, there are many classic books that hold a great deal of wisdom and theory on the market. Some of these classics include A Random Walk Down Wall Street, by Burton Malkiel; The Intelligent Investor, by Ben Graham; Understanding Wall Street, by Jeffrey Little and Lucian Rhodes; and One Up on Wall Street, by Peter Lynch.
Another source for some wit and wisdom on the market comes straight from Warren Buffett himself at http://www.berkshirehathaway.com/letters/letters.html. This is a page on Berkshire Hathaway’s website that hosts all of Buffett’s annual shareholder letters dating back to 1977. Reading these letters will allow you to peer inside the mind of one of the greatest investors in the world.
Step 3:
The safest way to learn about the stock market is to contact a professional financial advisor. Any quality financial advisor will take time to sit down with you and explain how the stock market works. However, make sure that your advisor is credible; ask for their credentials and any designations they hold. You can also check their background through FINRA’s AdvisorCheck to see if they have anything on their record. Once you have found a qualified financial advisor, ask for an explanation of the stock market. Also, this is the best time to ask questions. It is often hard to find the answers to certain questions in books, but it is much easier if you can have a dynamic conversation with a financial professional.
Learning about the stock market is really quite simple. Start off by doing your own research and reading financial websites, books, newspapers, and magazines. Also, start searching for a financial advisor. When you have found an advisor that you are comfortable with, ask them to explain to you how the stock market works. Combining these three things should allow you to see the market from different perspectives and gain an appreciation of how the market really works.
Useful Links:
Investopedia
The Financial Handbook
About this Author:
By Travis Engebretsen
View more information and all guides by Travis Engebretsen
By admin
November 5th, 2008 at 10:49pm
Under Guest+ Option Trading+ Stock Market
Some economists regard the 1929 stock market crash as major contributing factor to the great depression. The speculative boom of the 1920’s caused the crash because of the build up of the economic bubble. The bubble was formed because in the 1920s, as the stock prices were increasing, many people invested in the market. As the prices kept increasing they continued to invest hoping the prices would go up forever. Most people borrowed money to invest in the market.
This continued till about 1929. Then the market started trading down. Most people panicked and this resulted in heavy selling of stocks. By the year 1933, the stock prices were down 80% from the highs in 1929.
This led to people feeling poor. This led to decrease in the demand for various products in the market. Companies that tried to raise money in the market failed miserably. This led to shortage of money for manufacturing products or providing services. Companies started firing their employees because they wanted to scale down production. As you can guess, this led to the great depression. This period lasted about 4-5 years till 1934. All this was caused due to lack in confidence. This was preceded by confidence in the stock market. This turn of confidence was caused by a small negative sentiment in the market.
The speculative boom of the 1920’s was one of the factors that contributed towards the great depression. The speculative boom was caused due to the heavy investing in the market. The heavy investing was taking place due to most people trading on margin. Some traders were trading on 90% margin. The banks were also invested in the stock market. When the stock prices went down, people lost faith in the entire financial system and this lead to banks failing by the hundreds. This could have been avoided if there were proper regulatory procedures for the banks and the stock market in place. There should have been a limit on the margin you can use to trade. There should have been some restrictions on the banks from investing the depositors’ money in the stock market.
Needless to say, the regulators learnt a lot from this cash. It required some time before the trust in the financial system came back. The federal government then set up the federal deposit insurance corporation. Due to the presence of FDIC the banks could run out of money to pay back but still escape as the government reimbursed the depositors. The regulatory rules and procedures in place now are stricter and prevent the economy from crashing like it did in 1929.
You as an investor or a trader can learn a lot from this crash. In the late 1920’s people began to invest without doing any research about the stocks they were buying. In those times, the trader who was in the floor had more information than the common people trading. This led to lack of information among investors. Now, due to internet and disclosure policies, the common investor can have all the information about a company before investing in it. Good research will give you confidence about your investment and you will not panic when your stock price goes down or the general market conditions are bad.
Arkaitz Arteaga – Market Stock
Visit our website if you are interested in stock market quotes, forex market, day trading…
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