|Stocks & Mutual Fund Information|
Zero Sum Game
Most people think the stock market is a zero sum game because there is a buyer for each seller and seller for each buyer so each cancels the other and everything is equal. Not quite.
There are losers here, both the buyer and the seller because each one paid a commission to buy and a second commission to sell. This eats away at the profit of the winner and adds to the loss of the seller if he sold for less than he paid.
How does buying and selling of a stock effect the company? When you buy GM stock from your broker he is completing a transaction between you, the buyer, and someone else, the seller. The company has nothing to do with the transaction other than change the name of the shareholder on their record books. It has no effect on the corporation's finances. It is merely an expression by an individual; fund or pension plan that they think the company's stock will go up.
There is one time that purchasing a company's stock does affect their bottom line. That is when you purchase a new offering called an Initial Public Offering or IPO. The money that you pay for that stock then goes directly to the company and not to another individual. That cash is used as the company sees fit usually to fund expansion to increase both sales and profits.
Now think for a minute about the people who decided to sell their stock in Phillip Morris because they did not want to own a tobacco company stock. Will this make any difference to the company? Not a twit. The person who bought that stock was interested in only one thing ? will it go up so I can make a profit? That is why socially responsible investing makes no sense at all. It only makes the person feel better and is not a true investment decision.
Let's say you bought a stock at $20/share and sold it at $40. Double your money. Great. The guy that bought it sold it at $60 and that person sold it to someone for $80/share. Everyone is happy. So far. But this last stock buyer now watches the stock head down and he decides to get out at $60. Mr. $60 watches it drop to $20 where it dies and does not recover. Sounds like Lucent doesn't it? The last 2 buyers don't think this is a zero sum game.
Let me add that I think the smartest guy in the bunch was the one who took his loss and sold out at $60. He limited his loss and still has money left to find a better issue. He was smart enough not to "wait for it to go back up so he could get out even". Unfortunately, most people think this way. It may be close to a zero sum game, but you don't want to end up with the zero.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
E-mini Day Trading - Day Trading for Beginners - Stock Market Timing Software
I mean it when I say that. While plastic silverware is fine for picnics and parties, it is totally inappropriate in a surgeon's hand with an open brain in front of him. Not only are plastic forks built incorrectly to perform delicate surgery, their cheap construction may actually cause further injury to the patient. I don't know about you, but I sure wouldn't want someone prodding around inside my head with one of those things!
You have a lock on your house. You have a lock on your car. You have a lock on your tool shed. Do you have a lock to protect your stock market investments?
Starbucks Stock is Up
Starbucks earnings are up again and so is their stock slightly. It appears they are exporting America's weakness to caffeine and sugar around the world. This seems to serve the company's profits well and nations like China have quite an emerging population to sell to. Think of the exporting of tobacco and the riches the orient has given. Perhaps this is the answer to our advancing trade deficit. Should you have Starbucks in your portfolio?
Successful Trading ? Taking Profits - Part 2
Suppose your position has made a big move and you moved your stop to your purchase price as recommended. Then let's say your stock continues to make a big move and now we're asking again the questions we asked back in the first paragraph. The first profit taking technique you can use is a trailing stop. If you moved your stop to your purchase price, then you've already used a trailing stop. Now you can continue to move your stop up as the price rises until the market "stops" you out of the position. So in essence, what you're doing is letting the market decide when to take profits.
Trading Baskets II: The Crapolio, A Roll of the Dice in the Stock Market
In a previously written article, we expanded the use of the term "Trading Baskets" to include stocks from different sectors or industries. Now I want to share with you an approach to day trading or swing trading that I had some success with back in the wild and woolly, pinnacle days of day trading that may still work today. Unfortunately, this basket of stocks was dubbed "The Crapolilo", a name it just could not shake. You'll see why.
Stock Market Investments
If there is one term over-used when talking about making investments in the stock market I would think that term would be: buy low, sell high.
Long Term Financial Vehicles
Investing in long-term financial vehicles give you the most gains but it also puts your funds at greater risk. There is much truth to the saying, "there is no gain if there is no risk". Still you can reduce your chances of losing your hard earned money, by researching and taking time to understand what you are buying. Would you purchase a house you've only just seen on the outside? Both of these are serious investments and you need to arm yourself with the basic knowledge about the subjects.
Intervention. Now don't let that big word scare you. The talking heads on TV have been discussing it all week because the major banks of the world are going to "prop up" the Euro.
Structured Settlement; Lawyers in NY and Mutual Funds
Minority Report the movie may not be far off if the Head of the SEC has anything to say about it. At a Senate Banking Committee hearing on CSPAN, William Donaldson said that the beloved SEC can no longer sit back and "mop-up" after scandals break. This idea of Mopping up is interesting, because if the SEC has anymore regulations then everyone will be reduced to cleaning homes for a living although even Service Master owner of Merry Maids is doing lots of legal insider trading of their stock options and that alone is telling us that maybe just maybe all that Form 4 Action is a sign of things to come?
Understanding a Stocks PEG Ratio
A PEG ratio cannot be used alone but is a very powerful tool when integrated with the basics (price, volume and chart reading). You must enjoy crunching numbers and have a calculator handy to estimate your own PEG ratio. Access to quality statistical information from the web such as past earnings and future earning estimates is essential to calculate this fundamental indicator. A variety of websites produce a PEG ratio but I have not found one site that has a reliable PEG ratio that I can use for my own research, so I calculate it myself, ensuring accuracy with the final number.
Bad News is Good News
For weeks, no, months we have been bombarded with nothing but negative news about the economy in general and thousands of individual companies. The stock market has dropped thousands of points and more than $8 trillion in paper assets have disappeared.
It has fallen upon the consumer to make our economy strong. All the politicians, economists and talking heads on TV are telling him (that's you and me) to get out there and spend your money. Buy that new car, build a new house and fly off to some remote place for an expensive vacation.
How to Evaluate Load vs. No Load Mutual Funds
If you have been dealing with mutual funds for any length of time, you undoubtedly have faced the question of which is better: Load Funds or No Load Funds. If you are new to investing, "load" simply refers to the commission paid to the broker selling the fund. "No load" means there is no commission on the purchase or sale.
I receive emails from Morningstar. This company provides statistics and analysis of just about every publicly traded stock company you can think of as well as voluminous information on mutual funds around the world.
Stock Market Education; Day Trading for Beginnners; How to Pick Stocks
The trading method you employ to approach the stock market can make a big difference in your results.
Series 7 Exam
What is the Series 7 Exam? If you are looking to become a licensed Stockbroker, you need to know about the Series 7. The Series 7 is a 250 question exam that when passed, licenses you to act as a Registered Representative. Persons who receive this license are allowed to sell most securities. These securities would include: Stock, Bonds, Options, Mutual Funds and Annuities. The license itself is active while you are practicing it. Practicing with a Series 7 means that you are either employed or affiliated with a member firm. If you leave the business, your license will still remain active for 2 years after your last day with the firm. If you do not re-enter the business within 2 years, your license will expire. You would then have to re-take the exam again. The Series 7 exam itself is comprised of many topics although not equally divided. Approximately 50 questions will be on Municipal Bonds alone. Other major topics include Options, Industry Rules and Customer Account handling. The SERIES 7 is a multiple choice test graded on 250 questions administered on computer by an NASD testing vendor (Prometric Technology Center). 70% is needed to pass the SERIES 7 Exam. You will be given 6 hours to complete the exam in two 3 hour parts. Each question is worth .4 of a point. 175 questions correct will equal a passing grade. The score is not curved or rounded up so yes, if you get 174 questions right, you will get a 69.6% and you will fail. Each part also includes 5 experimental questions, which do not count on your total score. You will not know which ones are the experimental questions. Each exam is different, meaning if you take your test next to someone else, your test will not be the same. The percentages will be the same but the questions that each individual is tested on will be random. This applies to all Licensing exams but the difference between tests is less with smaller content exams like the Series 63. You will be given a calculator to use at the center. Applicants are not permitted to bring their own. Scrap paper will be given to you as well for you to use during the test. Once the test officially starts you can write down anything you want (Formulas, Rules etc.). The computer also offers the student the ability to change their answers at the end of the first or second part of the test. Meaning, if you wish to change an answer to a question in the first half, you will have to wait until the end of the first half to do it. Once the second half starts, you will be unable to view your first half. Basically, you are taking 2 different 125 question exams. Even if you are unsure what the correct answer to a question is, you must enter something before the next question is shown. Don't Cheat: Today, the testing centers require fingerprint verification when you take your test. A student was caught a few years ago on camera cheating in the testing room. This person had a tiny video camera device on his tie and a listening transmitter in his ear. He was actually filming his screen while someone else at another location was feeding him the answers. I didn't believe this one at first but several people told it to me. Pretty amazing. Needless to say, he was nabbed and busted. Just study and you will pass....and maybe learn something too! Good Luck!
Option Spread Trading
Spread trading is a technique that can be used to profit in bullish, neutral or bearish conditions. It basically functions to limit risk at the cost of limiting profit as well.
When will the stock market stop going down and start up again? If we knew that we'd all be jillionaires. So what do you do now while stocks are going down and stealing away your money every day?
A Triple Dipper: How to Make 3 Profits on 1 Stock Trade
This is a rather simple strategy with which I am sure a lot of seasoned traders are very familiar, possibly under some other name with which I am not familiar. I wanted to write about it because I don't see anyone talking about it anymore. Since the big hey-days of day trading and, of course, the burst of the Internet bubble of 2000, there seems to be a lack of patience that this strategy needs to work.
Maximizing a Stock Market Investment
Maximizing a stock market investment
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