Stocks & Mutual Fund Information
What the Hell is a Stock option?
A 'stock option' is a contract between two parties giving the buyer (also known as the 'taker') the right, but not the obligation, to either buy or sell a specific quantity of shares at a pre-agreed price (known as the 'strike price' or 'exercise price') by a certain future 'expiry' date. There are two different types of options that can be traded, known as 'call options' and 'put options'.
Are You A Stockaholic?
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics, chocaholics and other "-aholics". What about stockaholics? Stockaholics are people who are overly obsessive about their stock market investments.
Is the Stock Market for You?
Many people would like to diversify their portfolios to expand their holdings. Making it big in the stock market has been a dream for many people who want to strike it rich. Many movies and books have been made portraying the ins and outs of the stock market, for some, dealing with the stock market can be very complex and complicated. There are many things needed to be understood and learned. In this article, a short overview will be provided to better understand the stock market and see the stock market is an option you would like to try.
Trade Stocks for Real
I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Back testing and paper trading seem to be the most over emphasized techniques offered by market theorists, educational elite, market novices and/or market fakes. While learning the pure basics, I can see why a novice investor may want to paper trade; to see the results of the developing system but I will warn that these results are completely false. The results will not contain the emotional decisions that go along with risking your own cash. Anyone and I mean anyone can paper trade successfully. It?s simple, place a trade and hope it goes up and if it doesn?t, you have no worries because you can?t lose. The emotional imbalance that occurs when you really start to lose money is not present. Don?t fool yourself by believing the results of your paper trading or virtual simulation portfolio. These things may give you some confidence in your system but they don?t prove a damn thing in the real world. The real world, specifically the stock market, is run by emotional human beings. People make decisions that are irrational and base their trading decisions on fear and greed. Paper trading lacks fear and greed because there is no gain and no loss; therefore there is no consequence to deal with.
The Problem With Hedge Funds
Are hedge funds a suitable investment for you? Hedge funds are an appropriate investment for qualified purchasers with a net worth above one million dollars and an annual income exceeding two hundred and fifty thousand dollars. Purchasers are often required to sign an acknowledgement confirming their qualifications to invest in hedge funds. However, just because one is qualified to invest in a hedge fund doesn?t necessarily mean they should do so. There is a major problem with this type of investment. Oftentimes, the risk associated with the fund is misrepresented, leading to investors being misguided into skewing their qualifications.
A Funny Thing Happened on the Way to the Stock Market
On the 40 year journey through the turmoil of a volatile stock
market I?ve noticed ?P/E Ratios,? ?Consensus Estimates,? ?
Bull and Bear Markets,? stock ratings of 1, 2, 3, 4, 5, star
ratings of 1, 2, 3, 4, 5. Also, stock ratings of ?buy,?
?strong buy,? ?sell,? ?hold;? stock rankings of ?market
perform,? ?market outperform,? ?market underperform,? ?market
underweight,? ?market overweight,? ?market equalweight,? and
Oil Stocks As A Long Term Investment
The demand for world oil is increasing while world reserves are decreasing. This is a known fact. The current price of oil can certainly confirm this statement. Consensus also agrees that we will never see $25.00 oil again. The logical conclusion to our above statement is oil stocks should be a good long term investment. However, the location of the oil companies? reserves can affect their bottom line and valuation.
Selling Strategies - Setting a Stop Loss
Sometimes the best way of lowering exposure to risk is not to invest at all! However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case.
Small-Cap Stocks: The Beginning of the Journey
When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector.
Mid-Cap Stocks: Asset Class with an Identity Crisis
Much like the middle child, mid-cap stocks have long struggled to find their identity. Carved out from the upper echelons of the small caps and the lower end of the large caps, the mid-cap sector has a rough definition of stock with a market capitalization of greater than $2 billion, but less than $10 billion. Taking components from both worlds, some analysts argue that mid-cap stocks can offer growth opportunities found in the small caps and the relative stability found in the large caps.
The Exclusive Club of Large Caps
Picture one of those clubs where only the real heavyweights need apply. In the library the old aristocrats, General Motors and JP Morgan, are dozing in their leather chairs. On the terrace, a late luncheon is underway for those who have only improved their standing through marriage. ExxonMobil and Citigroup are part of the party. At the bar, a number of the"nouveau riche" have gathered - Microsoft seems to be buying for Intel and Hewlett Packard. Welcome to the world of the Large Cap Stock Club, the biggest of the worlds publicly traded companies.
Living Trust Investing: Income Considerations when the Grantor Dies
A common problem I often see when working with living trust beneficiaries and trustees is the lack of attention in rethinking income strategies in the event of the grantor's death.
Dividend Reinvestment Plans: Investing on Automatic Pilot
If you're like many investors who squander those small dividend checks from your stock portfolio, a Dividend Reinvestment Plan (DRP) might be just what you need. Just as its name implies, a Dividend Reinvestment Plan allows you to reinvest some or all of those dividends into more stock of the issuing company. Unlike purchases made through traditional means, partial or fractional shares, as well as whole shares, are available.
Is Active Trading The Answer?
One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. While there are several strategies to invest, is active trading one of the ways to become a millionaire?
A Stock Market Investment Plan that Never Lets You Down
The bulls and bears of the stock market are both tempting and scary to the investors. Speculators are enchanted by the stock market?s potential to help them in making quick money with a big M. While those who tread with care and caution, often shy away for fear of losing. However, the stock market is not all about speculative gains or black Tuesdays. It is a place where committed companies look for raising money to fund their activities. Serious investors can actually create wealth not only for themselves, but also for the companies and the nation. A wise way to invest in the stock market is to empower your self with information. You have to know and learn about the company you invest in, from past records and future plans.
More Articles from Stocks & Mutual Fund Information:
What To Buy?
Now that you have some money burning a hole in your pocket and the stock market is going up you have decided to buy some stock or maybe a mutual fund, but you have the momentous decisions to what to buy.
Where Is The Rabbit?
We need a rabbit!
Can?t Stand The Heat
It seems that every day I turn on the TV and find a Poker game. Texas No Limit seems to be all the rage these days. I love watching it. When I discuss this with others, their response is always the same, "You should play." Ah, but what they don't know is I stay out of the kitchen. As far as risk to reward ratio. That's a gamble I'm not willing to take. I prefer to invest my money. Sometimes I gamble in the stock market, but as long as I stay within my comfort zone (long term), I don't mind.
To become a successful trader you must have some kind of method or system to follow that will keep you on track. You may be buying and selling on tips, the weather or phases of the moon (there is a system like that).
Buy and Hold Investment Strategy
"Buy and hold" is one of the most heralded investment strategies promoted today. "Buy and hold" is also one of the few investment methods where you are guaranteed to lose money 2 out of every 5 years...so why do it?
Investment Capital Gains
Have you bought any mutual funds this year or late last year while the market was doing its skyrocket thing? Last year it was hard to lose money. This year it has been easy.
Value Investing: Selecting From The Bargain Bin
Picking a beaten-down stock requires a different kind of selection process. Normally, most companies beaten down this far have no earnings to speak of. Of course, if the company continues to earn money, one can apply normal valuation techniques. By that measure, many of these stocks appear outrageously undervalued: an indication of great buys. But this may also be a red flag that things are "too good to be true".
Why Buy and Hold?
Since I can remember, and that's a long time ago, the Wall Street brokerage companies, mavens and mutual fund managers have been exhorting the mantra of Buy and Hold for all your investments. There have been erudite studies published that this is the only way to go.
Different Ways of Buying Stocks
Let's say you are interested in this one company. You read its annual report, like what you see and your calculation indicates that the stock is trading way below its fair value. You are excited. It is time to buy! Hang on for a second. There are several techniques of buying stocks out there. Some are better than the other. Let me explore several useful ones.
Shorting Stocks ? The Basics, Part II of II
After the publication of the first part of this two part series, I had a few questions asking if shorting stocks is legal and I will quickly reply with a big YES. Some people believe that shorting shares of American companies is not patriotic or does not seem like the right thing to do. Shorting stocks is not my primary method of making profits in the market as many of you already know, but it is a valid strategy that must be covered especially since the market has focused on red flag and shorting opportunities since December 2004. In the world of supply and demand, things go up and things go down, it's human nature. Stocks have been shorted for over a century and have provided investors with an alternative strategy to making profits.
Analyzing Growth Stocks: An Important Focus For Any Investor
Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find. Still, we need to look at the big picture once in a while. Since so much has changed lately, this may be a good time to "take stock". Many have reevaluated their investment strategies. The problem is that many of these reevaluations are moving people away from their goals. As the market has dropped, rather than moving toward buying at the cheaper prices, we've seen people move away from stocks, a strategy which has little long-term benefit.
Investment Research - The Dalbar Study
Very few people, even professionals, have heard of the Dalbar Study that originated in 1995. Its purpose is to determine the profitability of trading for the small investor of mutual funds. Their results are even worse than I thought.
One Way Street
Ever turn down a street, get half way and suddenly realize it is one way and you are going the wrong way? Is that the way you feel when you look at your stock brokerage statement?
Invest, Be Wrong, and Make Money in the Stock Market
I have been trading for several decades
and was an exchange member and floor trader for 17
years. You learn fast there or you go broke in a
hurry. As you can see I managed to hold my own
for a few years until I found the secret and
started to become a successful trader. Every
professional trader I know knows the one great
secret and that is to keep your losses small.
I know there are a lot of you out there who would like to "get even" with the stock market. Many are on the diet of "I hope, I hope". As a professional trader I can tell you that diet will make you very sick.
The Shadow knows. Remember him? It seems a shadow has a firm grip on this stock market. Since the terrible break in mid-April we had a rally and then a decline. Trying to choose a suitable stock or mutual fund has been like grasping at shadows.
Discover the Biggest Trading & Investing Online Mistake
Any online investor / trader seeks an excellent off or online future trading career opportunity. Despite this goal, did you know 95 percent of all traders go broke within the first two months? Why do investors lose vast amounts of wealth in one or more of the following markets ? option trading, forex trading or currency trading, stock trading, future or commodity trading etc? in such a short amount of time?
Investing in the Stock Market - When To!
Is really not as important as to how you invest in the stock market. And how you invest in the stock market should take into consideration what goals you are setting for that stock market investment.
Stock Trading Diversification
This is the continuing story of our two imaginary traders, Peter and Paul.
Trading Tips No 8: Picking the Best Stock Market Price
Carefully thinking through your goal as a trader is of prime importance, when picking the best stock market price. It is very difficult if not impossible to meet a goal that is ill defined. Is your goal to trade frequently, irrespective of market conditions irregardless of what the stock market price is? Or is it to trade for the excitement of it all. A more sober assessment would probably yield a goal of making money - but how much and at what risk? How do you determine what the best stock market price is? Ultimately, a well-defined trading goal should specify the desired average annual return and the corresponding equity drawdown that a trader is comfortable with, financially and emotionally.