The Perils of Timing the Stock Market
By:Terry Mitchell
Here's an illustration of why attempting to the time the stock market is so perilous.
Let's say you are tired of all the recent losses and decide to exit the market when the DOW is at 7500, with plans to get back in when you think it is safe again. Then it goes up to 8000 and you start to believe that the worst is over, so you get back in at that point.
However, it turns out to be a "sucker's rally" and the DOW goes down to 7000. You panic and get out again. Then it goes up to 8500 and you think the market is surely out of the woods this time, so you get back in.
But you are wrong and ride the DOW back down to 7000 before getting out again. Then it shoots back up to 8500 and you swear you will not be fooled again, so you stay on the sidelines this time. Finally, being extra cautious, you let it go all the way up to 10,000 before finally being convinced that the worst is indeed over.
You are right – this time it is. But look at all the gains you missed out on and unnecessary losses you took by trying to time the market instead of staying the course.
Therefore, no matter how low it might go, I do not plan to remove my retirement funds from the market until I reach an age at which keeping them in would no longer be prudent, i.e., I wouldn't have enough time left prior to retirement to recoup any potential losses. And at that point, I would have no intention of re-investing in the market.
Terry Mitchell is a software engineer, freelance writer, amateur political analyst, and blogger from Virginia, USA. He posts a least one article a day to his blog - http://commenterry.blogs.com - on subjects such as current events, politics, technology, society and culture, religion, health and well-being, self improvement, personal finance, trivia, and sports.
You can now have any article and blog post he writes – in advance, if you would like – for use in your book, newspaper, magazine, ezine, newsletter, website, or whatever!! This includes the thousands of articles and blog posts he's previously written. Contact him via this website or his blog for details.
5:14 AM | 0 Comments
The Bulls Will Return
by: Uche Vera I
In the wake of the third week of the second quarter of this year ,the stock market suddenly started going down .There was a kind of panic .The panic was understandable considering the fact that our market before then had been characterised by huge returns .And the beginning of this year was no exception .So obviously one has to panic when the bearish trend developed .
But if you had enough information ,you would know and understand that there was no way our market will remain in a bearish position .Ours is a developing market and it is an understatement to say that the potential for growth and returns in the market is huge. Let me give you a clear example .America has a population of over 300 million, a GDP in excess of $13 trillion and a market capitalisation of $15.35 trillion.South Africa has a GDP of $282bn and a market capitalisation of $759bn .In Nigeria we have a population of about 120 million ,a GDP of $160bn and a market capitalisation of $90 bn .Only about 2 million Nigerians are investors in the stock market .That is less than 3% .In the U .S 49 .7 % of the people invest in their markets ! The bulls will return. This clearly shows that our market in still emerging .
More people will definitely enter the market ,capitalisation will move up ,and more companies will get listed on the exchange .So the potential for more activities is quite huge . The Nigerian stock market is the best in the emerging market category of stock exchanges and among the best on return on investment .So ,the bulls will return. By the beginning of 2007 ,market capitalisation stood at N5.12 trillion and by December of that same year it has appreciated to about 100 % to N10.2 trillion .By the time we entered the third month of this year ,the market has appreciated by more than 20% to N12.6 trillion . Afri Invest west Africa recently in it's half year result collaborated the belief that our market will witness a steady bullish trend in the nearest future . So what is my point ? Even though the market is experiencing a bearish trend/volatility ,major indicators are strong and with the recent intervention of market regulators the correction of the market could have started in earnest .
What are you buying !! Our experts are suggesting that Transcorp should be included in your buying potfolio but definitely not in your selling . Starcomms joined the market on Monday at 13.56 . and gained close to 1.00 that same day .Wether it is a good buy ? Telecommunications is presently a lucrative sector and starrcomms has been involved in expansion projects ,so it is a good buy and it should be one of those equities you might want for keeps. Enjoy the rest of your week .
COPYRIGHT( C) 2008 Uche Vera Uche Vera is a journalism major .She writes on Business and Economy including general topics .She is a senior procucer and writer with a radio production outfit that specializes in business programming .visit her blog at http://financiallquotientt.wordpress.com
5:06 AM | 0 Comments
VIX Index
By: Viktor Ka
The VIX (CBOE Volatility Index) measures the market expectations of near-term volatility based on the S&P 500 stock index option prices. The VIX has been introduced in 1993, and since then it has been considered a world's premier barometer of investor sentiment and market volatility.
Until 2003 the VIX index calculation was based on the CBOE S&P 100 index (OEX). With the introduction of the new and revised, more robust calculation methodology the underlying index was changed to the CBOE S&P 500 Index options (SPX).
Another important step in the history of the VIX index was that on March 26, 2004, the VIX volatility index started to trade on the CBOE Futures Exchange (CFE).
The next step was introducing VIX options in 2006.
The VIX Futures and VIX Options were each named as most Innovative Index Products in 2004-2006 years.
The VIX volatility index is calculated in real-time by the Chicago Board of Exchange (CBOE) and is based on the weighted blend of prices of S&P 500 index options.
The VIX formula uses the current market prices for all out-of-the-money calls and puts for the front month and second month expirations with purpose to estimate the implied volatility of a synthetic, at-the-money option on the S&P 500 index, with 30 days to expiration.
It is commonly accepted by traders that that high VIX values are consistent with a greater degree of market uncertainty, while a low VIX value would point to the greater stability.
The VIX Index itself is quoted as a percentage rather than a dollar amount and there is no easy and simple way to estimate the VIX's "return". However, in this case traders uses VIX-based derivatives: VIX futures contracts (began trading in 2004), and VIX options (started to trade in February 2006).
In some cases, traders use VIX index used to analyze the overall sentiment for equity options rather than for the whole stock market. However, in many cases the relationship of the VIX to equity options can be easily overstated simply because different dynamics drive the volatility of the S&P 500 index options and individual equity options, and the two can often be uncorrelated. For instance, technology stocks are usually more volatile than the utility stocks and using VIX to represent the volatility of stock from these two sectors could be overly simplistic.
For more information visit QQQQ and SPY Options Trading Signals to see trading system based on the NASDAQ 100 and S&P 500 analysis.
7:37 AM | 0 Comments
How Will The Stock market Perform In 2008?
by: Steve Hill
The FTSE 100 made a gain of around three percent in 2007, this may not seem a lot but with all of the bad news that was floating around, including the credit crunch, this was not too bad. In this article I will be writing about how I think it will perform in 2008.
Firstly it is important to note that what I write in this article should not be seen as recommendations or financial advice, I am not qualified to do that. They are merely my opinions and the way in which I will be investing.
I believe that 2008 will prove to be a very challenging year; this is likely to be especially for the case for companies who depend on borrowing money and on consumer's spending money. We have already seen retail companies reporting poor sales figures for the Christmas and new period. It may therefore be worth avoiding these areas for now.
I actually think that financial stocks are looking quite cheap at present. Investing monthly into a fund which solely invests in these types of companies may prove prudent.
I like to invest in different funds on a monthly basis to take advantage of pound cost averaging; this is where your premium is able to purchase more units when the price falls.
The stock market in Japan has had quite a poor run in recent years and may well be due for an upturn. This is one region that I will be investing in 2008.
I am a person who likes to take a risk with my money and whom invests for the long term. I am also going to invest in the regions of China , Emerging Markets, Latin America and Asia for 2008. Wish me luck.
Steve Hill helps to promote a number of websites including:
http://www.stammering-stuttering.co.uk
http://www.adaptatech.co.uk
http://www.coach-life-london.co.uk
6:47 AM | 0 Comments
How Important is Stock Broker?
by George Kissi
How Important is Stock Broker?
Depending on the the style of investing that you expect be active in, you almost unwaveringly might have to enlist the services of a broker to take trouble of your investments Brokers are as per usual employed by brokerage firms and are well-suited to go fetch or sell stocks in stock exchanges. The dispute offten arises if one doubtlessly needs a broker especially since you pretty much bring to fruition your own buy and sell activities online. The assertion is an fervent yes! If you mean to trade stocks on the stock exchanges, you have got to have a broker. Your online trading ought to be routed through a clearing house through a brokerage firm.
Stockbrokers are dictated to pass two differing tests in order to obtain their license. These tests are very uncompromising, and most brokers have a precinct in business or finance, with a Bachelors or Masters Degree. They act as a mediator between buyers and sellers of a stock security.
It is straight expedient to reckon the circumfusion between a broker and a stock market analyst. An analyst basically analyzes the stock market, and makes some predictions about how the stock market will act out with regards to certain economic factors, or how specific stocks will carry into execution. A stock broker is only there to follow your instructions to either purchase or sell stocks.
Brokers reap their fortune from commissions on sales in most cases. When you inculcate your broker to purchase or sell a stock, they score a set percentage of the labor. Plentiful brokers charge a bloated ‘per action’ fee. Others charge you a fee based on your account size or account activity. The influential thing to put in mind is that as soon as your trade executes the broker gets paid his/her commission regardless of the outcome of your trade!
The two differentiated types of of brokers at liberty are Full service brokers and discount brokers. The former can generally deal out may more kinds of investments and financial/investment advice and is by and large paid in commissions. Discount brokers however conventionally do not deal out any advice and do nor research into any investments on your behalf. They just guise upon your intructions to procure or sell stocks and nothing more.
All things considered, the first-class decision you need to make as far as brokers is whether you prefer a full service broker or a discount broker. If you are fashionable to investing/trading, you may need to go with a full service broker to make certain that you are making a sound investments decision. They can also deal out you the skill that you lack at this point. Nonetheless, if you are already perceptive about the stock market, all you definitely need is a discount broker to swing your trades.
No matter what level of investing or trading you are at it is pivotal that you attain the intellect, mental capacity, and tools you need to be crowned with success. There are several free of charge online forums and disposable resources like my blog http://www.GeorgeKissi.com and the like that will facilitate both the beginer investor as well as the full-fledged investor.
George Kissi
About the Author
Find out more tips and strategies about how To be a successful Day Trader/investor for FREE at my blog: http://www.GeorgeKissi.com
Read More......6:47 PM | 0 Comments
Your Neighborhood Market - The Stock Market
THE STOCK MARKET
The stock market is a huge market. That's what it is, just a huge market where stocks (pieces of paper which represents portions of a company which may be traded as transferable certificates) are exchanged (bought or sold) with money as the bottom line exchange factor, just like in any grocery store on Main St. USA. Stocks are sold and bought in lots (100 stocks, 1000 stocks, etc...) or separately by stock.
The price of stocks is determined by Supply and Demand. This is the interplay of the quantity of products or goods offered for sale at certain price and the quantity of products or goods purchased or bought at those prices in a free market. This is a very important point, because it relates to everything you do when buying or selling. Think about selling your house now in this market... OK. Now, think about buying milk at the grocery market. It's the same market but at a different level.
Did you ever wonder why dairy products are very reasonable one week and then two weeks later the price is doubled?! This is supply and demand at work. The demand for certain product goes up, and then the price goes up. This is just like the stock market. Depending upon how good a company is producing, as in good products, showing good customer service, selling a great marketing program, the company may have a large demand and this means the price of stock will go up. If the company is favored in news releases, this will also tend to increase stock prices. This also works in the negative direction as well, where the company produces inferior products and has bad news releases about it.
Stock trading is easier than ever now with online companies like Scottrade, optionsXpress, schwab, etc. Trades are fast, commissions are low, training and advanced tools are at your fingertips.
EXCHANGES
Stocks are listed and traded at several organized exchanges in the United States, which make up the stock market. To be "listed" the company must meet certain criteria such as number of employees, size of company, how much profit the company makes, etc... Stocks and other securities (bonds, commodities, options...) are traded at exchanges with a physical location or on a computerized system. The reason exchanges were created was to provide a safe and fair platform where there were established rules and procedures to trade stocks and securities.
In the United States the Security and Exchange Commission (SEC) regulates the exchanges and ensures the rules and procedures are kept fair for all. There are four exchanges in the United States for trading stocks. They are:
* The New York Stock Exchange (NYSE) * Chicago Board of Exchange (CBOE) * The American Stock Exchange (AMEX) * The National Association of Securities Dealers Automated Quotes (NASDAQ)
Some of the exchanges are fully automated systems which electronically match buyers to sellers of stock. You must have a buyer of stock for every seller of stock in the market. Other exchanges are what are called "Open Outcry" auction systems. If you have ever watched stock market movies such as "Trading Places" or "Wall Street", you'll know what this looks like.
This huge market has, to some degree, an effect upon everyone whether you understand or not. If you are a fund market manager or a school teacher, you're affected by prices and commodities of the market. You both may drink orange juice and buy gasoline for your cars. You both may invest in company stock, commodities, mutual funds or securities of one way or the other. The point is that everyone invests. What you buy or what you sell someway relates back to the markets. This is YOUR market as well and your neighbor's.
Your investment into your knowledge of the markets will benefit you whether it's the relationship in stocks, commodities, mutual funds or saving accounts. The more you invest in you own knowledge, the better prepared you will be.About Author
J Nelson has been investing for over 15 years with the viewpoint of having fun with investing, not slaving over it. Finding solutions to financial investing can be an astronomical job, but there ARE solutions out there. Find out more at: http://stockinvestingreview.blogspot.com/ Read More......
6:37 PM | 0 Comments
Trading platinum using CFDs
by: Mike Estrey
In our daily reports, we comment on the background and outlook for the gold price, but from time to time we refer to other precious metals. One of these that can be traded using CFDs is platinum, and various contracts are available, as well of course as companies with interests such as Johnson Matthey and Aquarius Platinum, which have long appealed to stock market investors.
The metal itself
As gold is rare than silver, so platinum is around 35 times rarer than gold and is less widely found. Its main exploration areas are South Africa and Russia, and then Zimbabwe, Canada and South America.
Less than 90 tonnes of platinum are turned into jewellery, compared with 2,700 tonnes of gold, and it takes eight weeks and ten tonnes of ore to produce an ounce of platinum, against three tonnes mined to produce the same amount of gold. The current price (as shown by the January 2008 CFD) is $1401 per ounce, which is very close to an all time high.
Uses of platinum
Platinum has several unique properties which have led to its increasing industrial use, aswell as for jewellery. It is found in the automotive, aerospace, electronics and chemical industries, most notably in catalytic converters, where Johnson Matthey is a world leader.
It also has major uses in medicine, as it is not affected by the oxidisation reaction with blood. It has excellent conductivity, and is compatible with living tissue, making it ideal for use in pacemakers.
Its density makes it more durable than many other metals, and is extremely inert, being resistant to heat and acids with a melting point of 1,768C.
From a jewellery standpoint, the metal does not wear away, and although it can scratch, this is simply a displacement of the metal with no volume lost, which is not the case for gold.
Despite its super strength and density, platinum is highly pliable, and one gram can be drawn to produce a fine wire over a mile in length.
The outlook
Platinum is enjoying a major bull market in line with the rest of the precious metals sector. The usual supply demand arguments apply, with the long lag in developing new mine capacity being one of the main reasons why the sector is expected to continue to be rerated, aswell of course of the simple rarity value in a world of expanding demand.
From that demand point of view the outlook remains extremely positive, and the three biggest markets are now China, Japan and North America.
The bridal sector is an important market for jewellery, as in Japan platinum is still used in almost all engagement rings and over 80% of wedding rings. In the USA, platinum's share of the bridal market was non-existent twenty years ago, but is approaching 50% now.
Fuel cell technology
There has been a dramatic interest in fuel cell technology mainly as a result of increasing concerns about environmental degradation. Fuel cells do not burn fuel, which eliminates the air pollution associated with fossil fuels.
Almost all prototype fuel cell vehicles are powered by the proton exchange membrane fuel cell, which uses platinum as the primary catalyst, and all major automobile companies have expanding fuel cell programmes.
Demand is so far quite small, but the expectation is for gradual medium to long term growth, first in stationary fuel cells and later with the commercialisation of fuel cell vehicles.
Mike Estrey is the Head of Research for Blue Index, specialists in Online CFD Trading, Contracts for Difference and Online Forex Trading.
7:07 AM | 0 Comments
Trading Forex or Stock Market - Which Do You Choose?
You have had a desire to begin trading in the markets. You probably have heard allot about the stock market and its benefits, but what about trading forex. What are the advantages or disadvantages to trading forex over the stock market.
Lets begin by going over the major differences between the trading the forex market and trading the stock market. Well we have all heard about the scandals in the past regarding insider trading and stock manipulation in the stock market, but why have we not heard about any insider trading going on in the currency markets. You see the stock market has wall street as a centralized location. Where is the forex market located? Well it has no one specific location. Currencies are bought and sold between large financial institutions, businesses and different countries everyday. Prices in the currency market will fluctuate for a variety of reasons including news releases, trade reports,each countries economic conditions, etc. The forex market cannot be manipulated by any one person, so you can rest assured that your investment will not be affected by any fraudulent scam.
It takes an enormous amount of money to move the forex market in any one direction. Over two trillion dollars a day is traded in the forex market. Yes you heard me right, two trillion dollars. The stock market does not trade two trillion dollars in one month. I hope you can see now why it would be incredibly difficult for any one person or entity to move the market for any extended period of time. Another major difference between the trading forex and trading the stock market is leverage. When you open a forex trading account through a brokerage firm, you will generally be given 100:1 leverage. You can actually control $10,000 with a $100 account. While that sounds good. It can also hurt you if you do not know what you are doing. There are literally thousands of stocks to choose from. While there are only a handful of currencies that you would have to track makes it much easier to make a decision on what you will be trading.
One of the last things I want to go over is market hours.Since the forex market is a global market,time zones can vary greatly from country to country. Because of this fact, the forex markets are open for trading 24 hours a day. Since you are not limited to the normal business hours of the stock exchange, you have much more flexibility on the hours you choose to trade. This is not an exhaustive list of differences, but I hope you now have a better understanding of some of the major differences between Trading Forex and the Stock Market.
Eric Medina provides many more Free Forex Tips at www.forexprolive.com Get more info on Forex Trading signals and an exclusive live trading group focused on the Forex Markets
8:50 PM | 0 Comments
The Level of Confidence in the Stock Market and Our Social Contract
There is unsaid in our daily life a social contract between all the players. Individuals are able to live their daily lives in a manner without much fear because of this contract, unless one lives in an area where this contract has broken down. You might call this unseen force in ordinary life the confidence that people have that their persons, social, economic, spiritual lives will be protected from the actions of others in that society, or from their government. We have enacted laws, and have institutional structures to protect us, such as the judicial system and religion, however imperfect they are. We have laws on the books to protect the citizenry. The Ten Commandments states that it is not right, for example, for men or women to kill each other, or to steal, and so on.
The strength of the American society and free economic system shows that persons coming from different cultures can coexist peacefully while having ample opportunity to be upwardly mobile. This faith in our system of government and in our form of capitalism draws immigrants from all over the globe to participate in our democracy. Over the 200 plus years of our country, we have survived recessions, depressions, World Wars, and even a Civil War, when the political consensus was broken - and our democracy has persisted.
I came of age during the interesting period of the Vietnam War era, where society was divided between the supporters of the war, and many young people, who exited from society by "dropping out" and joining the growing "hippie" counterculture. The confidence that many young people had in their government's policies and its supporters was strained. In 1966, the stock market had passed 1000; a level which would not be seen again for 16 years afterward. Inflation was beginning to brew from keeping a foreign war going. Government had had a guns and butter policy - in other words, our society was rich enough to support a war and domestic spending - at the cost of the inflation racked 1970's, when stock returns were quite poor and the Dow fell under 600 in mid decade.
I was only thirteen and very impressionable when the movie "If", directed by Lindsay Anderson, starring young Malcolm McDowell, premiered in London in 1968. A friend of the family escorted me to the box office for the movie, rated X in those days in New York City, and we sat down to watch the film, which was the telling of a repressive British private school. I don't want to spoil the movie for you, (parental guidance strongly advised) but the social contract was broken in the movie between students and their elders - and the results are at the end of the film. Of course, the film is called "If." The contract, the confidence in their system, could not keep these British schoolboys, at least in the film, from uprooting the institutions with which they were surrounded.
There is also a definite factor of the influence of confidence in our economic life, and specifically the level of confidence underlying the stock market. Breaks in the market like the ones we have experienced recently stir up fears among investors that their economic life will be impaired - that if you are in the stock market you will lose a lot of money because the stock market is declining: a perceived truism. The break in the market causes a loss in confidence. Of course, one might say the stock market is merely reflecting the health of our domestic economy and the rest of the world's level of economic activity. So a loss of confidence in the market might reflect an ongoing recession, surging inflation, bank failures or mortgage defaults, etc., or the market drop might be a financial event, where the drop simply feeds on itself (such as the Crash of 1987).
Fear causes many investors to lose confidence and act in a manner that may be contrary to their economic interest in the market - for example, selling stocks when they are at bargain levels. In that case, the investor loses "confidence" in the market as it falls, and does not believe that it will continue to be a good store of value and continue to appreciate - so he may sell his stocks while feeling fear. I write about the idea of not being led around by one's emotions when investing in my article, Stock Market Investing and the Power of Contrary Opinion.
The exception to the rule of the viability of long term investment in the stock market is in the hands of our elected officials, who if they are not enlightened, may enact policies which cause the economy to fundamentally falter for an extended time, as in the 1930's and 1970's - or for the Federal Reserve to miscalculate and cause an ordinary recession to get deeper or to cause the economy to overheat. In my article, Hedge Funds, Derivatives, Debt, China, and the Risk of Systemic Market Panic, I write a bit of the systemic risks out there that could cause a economic breakdown in the economy and stock market.
So just as the social contract holds the bonds of our democracy together and permits its citizens the possibility of living full lives, the level of underlying confidence in our free market system keeps our stock market from a catastrophic breakdown. Only terrible miscalculation by our government officials or by the Federal Reserve serves to threaten this bond.
This article contains the opinions and ideas of its author and is designed to provide useful general information to the reader on the subject matter covered. The author may or may not have current positions in the investments mentioned in this work, and the author may from time to time make investments in a manner that is not described here. Past investment performance is no guarantee or prediction of future results and any investments made, based on the opinions and ideas contained in this work, may or may not be successful. The strategies contained herein may not be suitable for every investor or situation, and the author is not engaged in, and should not be construed to be,rendering legal, accounting, investment advisory or other professional services to the reader or any other person. Readers should consult their own advisers for advice particular to their individual circumstances.
About the Author
John Reizner was first exposed to financial markets when he started reading the stock quotes out of the newspaper to his businessman grandfather, who was legally blind, when he was about ten. His current e-book, A Way to Wealth - the Art of Investing in Common Stocks, is available at his website, http://www.ReiznersWay.com
6:06 AM | 0 Comments
Focus On Momentum Stocks- Utilizing Movements For Profit
Recently, the stock market has been performing, but not at very high levels. There has been a simultaneous increase in the focus on momentum stocks. This focus on momentum stocks is easy to understand when you consider their history: in the past, they have proven that they are a reliable system for generating income in the stock market.
Trade big, this is the key to stock market success. Any stock market strategy's success hinges on using the trading system to your advantage. There are several different strategies utilized by people today with focus on momentum stocks being one of those strategies.
The concept behind the stock market is to purchase shares of a company that is doing well or just starting off new. When you purchase them at a certain price you hope that the market will go up around that company's shares. At that time you are able to sell the stocks at a higher market price and make a profit on that sale.
Momentum stock strategies require that you more fully define both stocks and company types that you are willing to consider trading on. You will determine a stock or a particular market that is performing well, then take a certain stock on that market that appears to be moving with more momentum than other stocks in its industry group.
By taking this action, you put yourself in the position to own the best stocks that have the greatest likelihood to perform well within their group. You give yourself the best possible chance to succeed. Owning a stock that is in a state of positive momentum allows your stock shares to continue their positive direction of growth and achieve higher profits.
The momentum strategy in stock investment is one that frees you from the need to constantly buy and sell many shares and spread your investment funds among as many diverse stocks as possible. Instead, you ride the momentum of the market when it urges your company's stocks higher, and this is likely to be sustained when the momentum stock strategy is used.
Article Source: http://www.articlesnatch.com
About the Author:
For smart investors, the trend is to focus on momentum stocks. They have been proven to be useful in generating income in the stock market. This strategy requires that you fully define both stocks and company types that you are willing to consider trading on. By having a stock with momentum your market is encouraging your shares to continue to ride that momentum into higher levels of gain.
4:23 AM | 0 Comments
Stock Patterns Explained.
Paul Hegarty
When looking at stock charts what you see may not mean much to you. On these charts there are patterns. These patterns mean a lot to the investors that analyze such data to make their trades. There are many different indicators and no one indicator out weighs the other. However when taken into consideration relative to one another it begins to make sense. Recognizing these patters helps investors make successful predictions on future investments.
These patterns have names which helps identify their movement. There is a pattern called cup and handle. This particular pattern identifies a stock that starts high and then dips and comes back up again.
Another pattern is called head and shoulders. This identifies a stock that peaks then dips then peaks again higher than the previous peek. Then drops and finally peaks again. This is a pattern liked by bears.
One of the most popular patters is called the moving average. The moving average is a very strong indicator. Basically what it does is identify a stocks movement over a given period of time.
Another pattern is called the Relative Strength Index. This identifies a stock as follows. It compares the number of days a stock finishes up compared how many times it finishes down.
Another pattern is called the Money Flow Index. The money flow index goes beyond the relative strength index in that it takes into account the number of shares traded as well as the price.
Then there is the Bollinger Bands. This is a chart with a grouping of three lines. The middle line is the moving average. The other two lines which are the upper and lower lines are indicating market volatility. The more volatile the market the further apart these lines go. When there is little volatility they come close together.
The Stock Market If you want to discover your pot of gold in the stock market, then you have to know it inside out. And for all the inside-out information on the stock market explained in simple, concise, layman terms, all you need to do is click on this link: Stock Patterns.
Source: http://www.articlealley.com/article_220137_19.html
7:52 PM | 0 Comments
Pennystock Risks - 5 Tips to Pick High Return Stock Lists and Advisors to Eliminate Risk of Penny Stocks
by: Dexx Johnson
An unwanted side to investing in penny stock is how quickly you can lose money fast in a bad investment. Even though the rewards of penny stock investing are far greater than most investments you will find, the risks can be daunting.
If you are like me, you want high returns fast without losing money. I will show you two ways do avoid risk and get high returns, the slow way and the way I use (which I will mention at the bottom of the article).
Here is the long way, but one that works, to greatly reduce, perhaps even eliminate, the risks of penny stocks:
1. Beware Hot Stock Tips: You have most likely received a "hot tip" via spam email at some point or another. The promoter promised you fantastic guaranteed returns on your hot penny stocks investment. They word the email to make it a "once in a lifetime" opportunity to you. The best thing to do is delete the e-mail. Chances are you're being scammed by a "boiler room" scam operation. These shady operators buy up worthless shares at fractions of a penny and then attempt to flip them for a few dollars per share.
2. Trading Penny Stocks in Unregulated Exchanges: Unregulated environments do not have to meet the traditional requirements expected of most exchanged that involve penny stocks. Companies in these situations tend to be of lesser quality. Avoid stocks traded on the OTC or pink sheets.
3. Erratic Trading Activity: You should avoid purchasing penny stock that is trading erratically. You could be stuck with the shares for a long time since it's very hard to find a buyer.
4. Lack Of Reporting By Company: When you invest in a company, you want to know what you're buying. To give you an idea, you need their financial statements in order to properly evaluate the company. If no financial statements are issued, the company might have something to hide.
5. Company Hype: Be careful of companies that constantly issue statements that highlights the latest developments but provides no details on how it helps increase revenue or profits.
You may find all these tips frightening in the fact that it requires a lot of in-depth research to be done on all stocks you are considering purchasing, and you'd be right. However proper research is key to eliminating risk!
For those not accustomed to it, the stock market looks either a rosy picture or the dooms day scenario. In reality, it is a mixture of both. By investing in researched stocks, you can get the money of a life time or if you are not careful, you may lose the money of life time. While not every one can become Warren Buffet in stock market, at least you can avoid losses by avoiding the following 5 tips provided above.
I've been quite successful at the age of 24 using penny stocks to not only pay off my college tuition for the past two years, but also keep me debt free! This has been done through following the advice I outlined on my personal website Pick Top Penny Stocks.
Regardless of the method you use to do your research, just make sure you do research!
Enjoy, and here's to your success!
source:searchwarp.com
9:06 PM | 0 Comments
What You Dont Know That Is Hurting Your Portfolio...
By: Randy Martin
Investing in bonds and stock market investing are classified as investing in securities. Your risk appetite decides how much to invest and in which class. However during inflation times bonds give lower returns, but still are more safe as compared to stocks. Stock prices are volatile and have more risk associated with them, but can yield more.
You should invest partly in bonds and the balance in stocks. If you are older, invest less amount of money in stocks and more in bonds. However,if you are young,you should invest more in shares of companies. Choose those companies for stock market investing that have growth potential and proven track potential.
There different sizes and categories of shares- large, mid and small caps and penny stocks. A beginner should invest in large and mid cap companies and he can consider investing a small portion in small caps and hot penny stocks only after he has gained experience. These small caps and hot penny stocks are the riskiest but give the largest returns if handled properly which needs expertise and nerves of steel.
You should not jump in something Stock market investing; it needs a lot of time to learn the basics of stock market investing. You can start investing once you have gained some experience. It is suggested to invest small amounts of your money over a period of time rather than investing all the money at once.
Bond investing is quite easy as compared to stocks. You can get a list of high rated companies and government bonds from your banker or broker easily. Bonds will give you a good return only if you hold them for a long time period. On the other side people wanting returns in short period can look for investing in stocks and at the same time stocks can be held for long time too.
Do not consider the tips from others on which share to buy especially in the case of riskiest investments such as hot penny stocks. You can consider these risky investment options only after thorough research on the company concerned and all other related factors has been done. Have a good time investing!
Investing in bonds and stock market investing are classified as investing in securities. Your risk appetite decides how much to invest and in which class. However during inflation times bonds give lower returns, but still are more safe as compared to stocks. Stock prices are volatile and have more risk associated with them, but can yield more.
Evolve into an enriched investor by acquiring tips on stock market investing and how to trade penny stocks online - start making money once more.
Article Source: http://www.eArticlesOnline.com
5:50 AM | 0 Comments

