Decrease in pensions and the decrease rate of interest on the deposited sum in banks or other similar organization are driving people to stock market to help secure their future. Time has come for you also too think of your future after retirement. Ask yourself whether you would be left with enough resources to live your life comfortably? If you are having some doubt then invests in penny stocks to get a high return in a short time.
The definition of penny stocks varies from stockbrokers to regulatory agencies. A stockbrokers define them as any stock that trades below $5 per share whereas a regulatory agencies classify them as a stock with a price below $2. In general a penny stock is spoken as any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board where the Pink Sheets are an exchange where no listing requirements are to be traded by the startup companies. It is not mandatory for a company to have any sales, nor does it have to reveal how many shares outstanding it has to qualify to get listed in the Pink Sheets. On the other hand similar to the Pink Sheets exchange the OTC (Over-The-Counter) Bulletin Board consists of relatively young companies either with no sales or a small amount of sales but sometimes the listed companies has to submit full report of their sales. Once the companies are ready to become fully or semi-reporting they switch off to Bulletin Board from the Pink Sheets.
Before you get started you need to look for the penny stock investor information where you could arm yourself with pros and cons of penny stock investing. There are many informational websites where you will find penny stock investor information that will assist you to grab your goal of securing your future. You can take the help of your broker (whose job is to collect the information investors need regarding penny stocks) to assist you in case you are unsure or do not understand the terms and conditions, the process, policies and etc. Learning the ropes of penny stock market will save you from the fraud before investing your hard earned money which the losers forget to do and mark the market as a successful way of losing money.
Remember your investment will go down the drain if you proceed without any proper knowledge.
The world of penny stocks is full of exciting small companies as well as scammers and cheats. Make the best use of the penny stock investor information so that you re not left holding a bag with a hole.
By: Stapin Brown
The Surging Interest in Dividends—Especially Among Boomers
In 1934, Benjamin Graham and David Dodd wrote in their classic Security Analysis, "The prime purpose of a business corporation is to pay dividends to its owners." Many investors agreed. They considered that the other way an investor can make money from owning stock--via increases in its price--was speculation in comparison to a steady flow of dividends.
But by the 1990's, investors' interest in dividends had pretty much dried up. With market prices rising 20% to 30% or more per year, and some individual stocks much faster than that, dividend yields of 2% or 3% were real yawners. They did not play much of a role in most investors' stock selections.
Times change. The bull market of 1982 to 2000 is history. So is the tech-telecom bubble of 1997-2000 that capped it off. The bubble deflated, leaving investors who held on with losses of 90% or more. Those losses have finally been made up on New York Stock Exchange and S&P 500 stocks, but they may not be made up in our lifetimes on NASDAQ stocks.
And guess what? The baby boomers--the first of whom (like myself) were born in 1946, are moving into retirement age. In 1999, the oldest boomers were 53 years old--accumulating money as fast as we could for retirement. Two percent or 3% dividend yields did not help much during the accumulation phase of our lives.
Now we are 60. For some of us, the accumulation phase is over, and for many others, it is coming to a rapid close. Several thousand boomers per day are retiring, taking packages, or otherwise ending their regular working lives.
And with retirement comes an interest in income! Retirees suddenly become less interested in two-baggers (a stock that doubles) than in satisfying their day-to-day money needs. For most boomer retirees, these needs are met through three sources:
• Pensions. Many (not all) boomer retirees have traditional pensions. Their number will dwindle each year, because so many companies that used to offer conventional retirement plans dropped them and are continuing to drop (or freeze) them as we speak. People in the leading edge of the boomer generation are more likely to have traditional pensions than people at the trailing edge. (The latter were born in 1957, and they are now 49 or 50 years old).
• Withdrawals from accumulated savings. Conventional advice is to limit these to 4% per year or so, or else you will outlive your money. (This category also includes annuities you may buy--an annuity basically automates the process of investing your savings and then withdrawing some of it each month and sending it to you as income.)
• Dividends! Suddenly, that 2% or 3% that looked like junk in 1999 has some attractive qualities. If a boomer has saved, say $500,000, a 3% yield kicks out $15,000 per year. Not a fortune, but a good chunk of many boomers' income needs in retirement.
Notice that I did not list Social Security. No boomer is eligible yet for Social Security. As boomers reach 62 or 65, of course, Social Security will kick in and become the fourth source for meeting daily money needs.
Let's recap this so far. Let's say that a boomer who is already retired receives a pension of $25,000 per year, and also that he or she takes a drawdown of 4% of $500,000 savings, which equals $20,000 more per year. That's $45,000 per year from those two sources. Let's further postulate that this retiree needs $60,000 per year to live a good lifestyle. As we've already seen, if the boomer's $500,000 in savings kicks out a 3% yield, that's where the extra $15,000 will come from.
So suddenly, a 3% dividend yield looks mighty interesting. In fact, it is the difference between a comfortable and uncomfortable retirement for our boomer. And boomers are displaying an increasing appreciation of formerly scorned dividends
I have a ringside seat on the explosion of interest in dividends and income. As the author of a book on stock investing, I advertise on Google--I purchase those little clickable text ads that appear along with your search results. The way it works is, I only pay Google when someone clicks on my ad and is transported to my book's Web site.
I have ads tied to a couple hundred investment-related search terms that might be typed in by a Google searcher. And I have noticed something very interesting: About 70% of my clicks come from the few search terms related to income and dividends. Terms like "dividend paying stocks," "dividend companies," or simply "dividends." In a recent week, for example, I got 46 clicks (for cost control, I limit the number of clicks I receive per day). Of those 46 clicks, 35 (more than three-quarters) came from dividend-related terms. This despite the fact that those search terms comprise only about 15% of all the search terms I cover.
Every time someone clicks on a Google ad, it is like a vote. It indicates interest. So it is very clear to me that investors searching on Google are showing a massive interest in dividends and income.
Happily, there is growing research that over the long term, dividend-paying stocks generate the best total returns. So the dividend-stock investor benefits in two ways: He or she gets an important income stream, and the stocks perform better overall. And there is yet a third advantage: Most dividends are taxed at 15% to the individual, which is lower than most investors' marginal tax rate. Thus, dividends are the most tax-advantaged form of income you can have.
The lesson for investors, especially those needing income in retirement, is this: Make sure that your portfolio has a good slug of dividend-paying stocks. It is not unreasonable to shoot for an overall portfolio yield of 4%, which is about twice the yield of the S&P 500 at the moment. There are many safe, "boring" stocks with 4%+ yields available at reasonable prices right now. Add some to your stock portfolio.
By: David Van Knapp
But by the 1990's, investors' interest in dividends had pretty much dried up. With market prices rising 20% to 30% or more per year, and some individual stocks much faster than that, dividend yields of 2% or 3% were real yawners. They did not play much of a role in most investors' stock selections.
Times change. The bull market of 1982 to 2000 is history. So is the tech-telecom bubble of 1997-2000 that capped it off. The bubble deflated, leaving investors who held on with losses of 90% or more. Those losses have finally been made up on New York Stock Exchange and S&P 500 stocks, but they may not be made up in our lifetimes on NASDAQ stocks.
And guess what? The baby boomers--the first of whom (like myself) were born in 1946, are moving into retirement age. In 1999, the oldest boomers were 53 years old--accumulating money as fast as we could for retirement. Two percent or 3% dividend yields did not help much during the accumulation phase of our lives.
Now we are 60. For some of us, the accumulation phase is over, and for many others, it is coming to a rapid close. Several thousand boomers per day are retiring, taking packages, or otherwise ending their regular working lives.
And with retirement comes an interest in income! Retirees suddenly become less interested in two-baggers (a stock that doubles) than in satisfying their day-to-day money needs. For most boomer retirees, these needs are met through three sources:
• Pensions. Many (not all) boomer retirees have traditional pensions. Their number will dwindle each year, because so many companies that used to offer conventional retirement plans dropped them and are continuing to drop (or freeze) them as we speak. People in the leading edge of the boomer generation are more likely to have traditional pensions than people at the trailing edge. (The latter were born in 1957, and they are now 49 or 50 years old).
• Withdrawals from accumulated savings. Conventional advice is to limit these to 4% per year or so, or else you will outlive your money. (This category also includes annuities you may buy--an annuity basically automates the process of investing your savings and then withdrawing some of it each month and sending it to you as income.)
• Dividends! Suddenly, that 2% or 3% that looked like junk in 1999 has some attractive qualities. If a boomer has saved, say $500,000, a 3% yield kicks out $15,000 per year. Not a fortune, but a good chunk of many boomers' income needs in retirement.
Notice that I did not list Social Security. No boomer is eligible yet for Social Security. As boomers reach 62 or 65, of course, Social Security will kick in and become the fourth source for meeting daily money needs.
Let's recap this so far. Let's say that a boomer who is already retired receives a pension of $25,000 per year, and also that he or she takes a drawdown of 4% of $500,000 savings, which equals $20,000 more per year. That's $45,000 per year from those two sources. Let's further postulate that this retiree needs $60,000 per year to live a good lifestyle. As we've already seen, if the boomer's $500,000 in savings kicks out a 3% yield, that's where the extra $15,000 will come from.
So suddenly, a 3% dividend yield looks mighty interesting. In fact, it is the difference between a comfortable and uncomfortable retirement for our boomer. And boomers are displaying an increasing appreciation of formerly scorned dividends
I have a ringside seat on the explosion of interest in dividends and income. As the author of a book on stock investing, I advertise on Google--I purchase those little clickable text ads that appear along with your search results. The way it works is, I only pay Google when someone clicks on my ad and is transported to my book's Web site.
I have ads tied to a couple hundred investment-related search terms that might be typed in by a Google searcher. And I have noticed something very interesting: About 70% of my clicks come from the few search terms related to income and dividends. Terms like "dividend paying stocks," "dividend companies," or simply "dividends." In a recent week, for example, I got 46 clicks (for cost control, I limit the number of clicks I receive per day). Of those 46 clicks, 35 (more than three-quarters) came from dividend-related terms. This despite the fact that those search terms comprise only about 15% of all the search terms I cover.
Every time someone clicks on a Google ad, it is like a vote. It indicates interest. So it is very clear to me that investors searching on Google are showing a massive interest in dividends and income.
Happily, there is growing research that over the long term, dividend-paying stocks generate the best total returns. So the dividend-stock investor benefits in two ways: He or she gets an important income stream, and the stocks perform better overall. And there is yet a third advantage: Most dividends are taxed at 15% to the individual, which is lower than most investors' marginal tax rate. Thus, dividends are the most tax-advantaged form of income you can have.
The lesson for investors, especially those needing income in retirement, is this: Make sure that your portfolio has a good slug of dividend-paying stocks. It is not unreasonable to shoot for an overall portfolio yield of 4%, which is about twice the yield of the S&P 500 at the moment. There are many safe, "boring" stocks with 4%+ yields available at reasonable prices right now. Add some to your stock portfolio.
By: David Van Knapp
Rate Yourself…A 20-Question Scorecard for Stock Investors
Are you a good stock investor?
This Stock Investing Scorecard will help you understand what you do well, as well as suggest where you might pay the most attention to improving your investment practices.
Score yourself from 0 (worst) to 5 (best) on each of the following. Then check your total score at the end to see where you stand.
1. I believe that the market is rational over the long term and rewards sensible, intelligent investing. I also recognize that the market is essentially unpredictable over very short periods such as a day or a week.
2. I always maintain a fiduciary duty to myself. I never forget Buffett's Rule #1: Don't lose money.
3. I know my investment goals and have clear strategies to reach them. I have written them out, and I review them at least once per year. I adjust or amend them when appropriate.
4. I only invest in excellent companies with sound business models that I understand. If I cannot comprehend how a company makes money, I will not invest in it. That helps me avoid the Enrons of the world.
5. I always determine a rational price for any stock. I only buy at a fair or advantageous price.
6. I know that a 50% loss on a stock followed by a 100% gain equals zero. Therefore, I am very careful to avoid a large loss on even a single stock.
7. I manage my portfolio intelligently and consistently. This does not mean that I trade a lot, but it does mean that I pay attention. I keep track of the results of each individual stock investment, and I make strategic decisions about what to keep and what to sell. My goal is to let my winners run and to sell my losers.
8. I know that any investment in the stock market carries risk. I actively manage that risk. I am willing to tolerate some short-term variability in my wealth in order to gain the long-term benefit of beating inflation through stocks. I am not willing to tolerate significant losses.
9. Before making any move in the market, I do everything I can to stack the odds in my favor. I know that the best results come when I have an edge. The edge can be better information, better analysis, an advantageous price, better risk management, or a combination of all of them.
10. I read, analyze, and do my own thinking. I am always striving to improve my investment practices. I never buy a stock solely on a tip.
11. Whenever I am interested in a company, I write out its "story" in a few sentences. This includes the company's business model, its strategies, its prospects for sustainable profits, and (especially) its competitive advantages. If I can't understand it enough to do that, I don't invest in it.
12. I only purchase a stock when it is showing strength. I want each of my investments to get off to a good start.
13. I always look for companies with the best prospects for long-term earnings growth. I know that over the long term, stock prices follow corporate earnings.
14. I invest only in dominant companies. They have competitive advantages that will enable them to sustain earnings growth.
15. I never trust management which has demonstrated a lack of integrity.
16. I have fun investing. I don't overextend myself, and I never put money into companies that make or do anything I don't admire.
17. I am wary of companies with excessive debt, because I know that it is as hard for them to handle as it would be for me. The mere fact that other companies in the same industry also carry lots of debt is no excuse, because I know that every company chooses its capital structure. No solid company needs to be over its head in debt.
18. Although I do not demand that a company pay dividends, I do consider the regular payment and raising of dividends to be a big plus factor.
19. I run my investments like a business. I am dispassionate when making buy, hold, or sell decisions. I never "fall in love" with a stock. If it is a loser, I let it go. I do not over-hold any stock just waiting (hoping) for it to get back to even.
20. If I cannot find good investment opportunities, I am never afraid to have some of my "stock money" in cash. I do not feel the need to be "fully invested" at all times.
How did you do? The maximum score is 100. If your score is high, congratulations! You are following a sound approach to investment success.
If your total score is below 80, that raises a serious question whether you should be investing in stocks at all. The good news is that you can improve your knowledge and practices in every area considered.
Focus on any low-scoring areas. If you gave yourself 0, 1, or 2 on any question, that is definitely a red flag. Concentrate on improving your practices in that area. My experience is that improving in any one area can have a significant impact on your overall success in the stock market.
Of course, the best investors are good across the board. That should be your ultimate goal. Investors sometimes go wrong by skipping essential steps. They make "one-time" exceptions. Don't do that. Follow best practices and adhere to your own written strategies and tactics, all of the time.
By: David Van Knapp
This Stock Investing Scorecard will help you understand what you do well, as well as suggest where you might pay the most attention to improving your investment practices.
Score yourself from 0 (worst) to 5 (best) on each of the following. Then check your total score at the end to see where you stand.
1. I believe that the market is rational over the long term and rewards sensible, intelligent investing. I also recognize that the market is essentially unpredictable over very short periods such as a day or a week.
2. I always maintain a fiduciary duty to myself. I never forget Buffett's Rule #1: Don't lose money.
3. I know my investment goals and have clear strategies to reach them. I have written them out, and I review them at least once per year. I adjust or amend them when appropriate.
4. I only invest in excellent companies with sound business models that I understand. If I cannot comprehend how a company makes money, I will not invest in it. That helps me avoid the Enrons of the world.
5. I always determine a rational price for any stock. I only buy at a fair or advantageous price.
6. I know that a 50% loss on a stock followed by a 100% gain equals zero. Therefore, I am very careful to avoid a large loss on even a single stock.
7. I manage my portfolio intelligently and consistently. This does not mean that I trade a lot, but it does mean that I pay attention. I keep track of the results of each individual stock investment, and I make strategic decisions about what to keep and what to sell. My goal is to let my winners run and to sell my losers.
8. I know that any investment in the stock market carries risk. I actively manage that risk. I am willing to tolerate some short-term variability in my wealth in order to gain the long-term benefit of beating inflation through stocks. I am not willing to tolerate significant losses.
9. Before making any move in the market, I do everything I can to stack the odds in my favor. I know that the best results come when I have an edge. The edge can be better information, better analysis, an advantageous price, better risk management, or a combination of all of them.
10. I read, analyze, and do my own thinking. I am always striving to improve my investment practices. I never buy a stock solely on a tip.
11. Whenever I am interested in a company, I write out its "story" in a few sentences. This includes the company's business model, its strategies, its prospects for sustainable profits, and (especially) its competitive advantages. If I can't understand it enough to do that, I don't invest in it.
12. I only purchase a stock when it is showing strength. I want each of my investments to get off to a good start.
13. I always look for companies with the best prospects for long-term earnings growth. I know that over the long term, stock prices follow corporate earnings.
14. I invest only in dominant companies. They have competitive advantages that will enable them to sustain earnings growth.
15. I never trust management which has demonstrated a lack of integrity.
16. I have fun investing. I don't overextend myself, and I never put money into companies that make or do anything I don't admire.
17. I am wary of companies with excessive debt, because I know that it is as hard for them to handle as it would be for me. The mere fact that other companies in the same industry also carry lots of debt is no excuse, because I know that every company chooses its capital structure. No solid company needs to be over its head in debt.
18. Although I do not demand that a company pay dividends, I do consider the regular payment and raising of dividends to be a big plus factor.
19. I run my investments like a business. I am dispassionate when making buy, hold, or sell decisions. I never "fall in love" with a stock. If it is a loser, I let it go. I do not over-hold any stock just waiting (hoping) for it to get back to even.
20. If I cannot find good investment opportunities, I am never afraid to have some of my "stock money" in cash. I do not feel the need to be "fully invested" at all times.
How did you do? The maximum score is 100. If your score is high, congratulations! You are following a sound approach to investment success.
If your total score is below 80, that raises a serious question whether you should be investing in stocks at all. The good news is that you can improve your knowledge and practices in every area considered.
Focus on any low-scoring areas. If you gave yourself 0, 1, or 2 on any question, that is definitely a red flag. Concentrate on improving your practices in that area. My experience is that improving in any one area can have a significant impact on your overall success in the stock market.
Of course, the best investors are good across the board. That should be your ultimate goal. Investors sometimes go wrong by skipping essential steps. They make "one-time" exceptions. Don't do that. Follow best practices and adhere to your own written strategies and tactics, all of the time.
By: David Van Knapp
Penny Stock Fortune, Are You Ready To Make Yours
There is no set formula on how to make a fortune in the stock market. If there was, there wouldn't be a need for all the how-to-books and the multitude of websites full of information on how to make a penny stock fortune. Can it be done? Can you make a fortune off just penny stocks?
It is possible that buying and selling penny stocks can make you a fortune, if you know the proper way to do it. It takes a lot of experience, mixed with a bit of skill, but it does happen. The biggest mistake people make is not researching and getting a good grasp of what penny stock trading is before they start. Going this route will have you losing money instead of making that penny stock fortune. Nothing good ever happens when your careless.
One thing that entices people to try their hand at penny stocks is the high return on their investment. Just think about it. If you purchase a stock at $0.31, sit back, watch it rise and sell at $1.09; that is a 251% increase. There are, on record, stocks that have increased by over 400% in a very short amount of time. Think of the possibilities if you spread your allotted penny stock money among many stocks. With returns of 200% and upwards of 400%, your penny stock fortune may not be as far in the distant future as you think.
The reason you won't find many penny stocks on Wall Street is because Wall Street doesn't talk about or even think about companies that haven't already proven themselves with large gains. If you get your advice from Wall Street you may be looking at a return of 3-5% a year. If you're happy with that small of a return, great; but if you are looking for more, then why not try making your fortune through penny stocks.
When you are ready to begin working towards your penny stock fortune then it's time to search for those penny stock guru's; the guys who do nothing but study penny stocks and email their picks to their subscribers, people like you and me. You won't know if you can make a penny stock fortune unless you try, and it's ok to be cautious, it's actually a good thing. Don't throw all your eggs in one basket so to speak. Start small, and gradually grow your portfolio. You won't make your penny stock fortune overnight, but you can make it over time.
By: Stapin Brown
It is possible that buying and selling penny stocks can make you a fortune, if you know the proper way to do it. It takes a lot of experience, mixed with a bit of skill, but it does happen. The biggest mistake people make is not researching and getting a good grasp of what penny stock trading is before they start. Going this route will have you losing money instead of making that penny stock fortune. Nothing good ever happens when your careless.
One thing that entices people to try their hand at penny stocks is the high return on their investment. Just think about it. If you purchase a stock at $0.31, sit back, watch it rise and sell at $1.09; that is a 251% increase. There are, on record, stocks that have increased by over 400% in a very short amount of time. Think of the possibilities if you spread your allotted penny stock money among many stocks. With returns of 200% and upwards of 400%, your penny stock fortune may not be as far in the distant future as you think.
The reason you won't find many penny stocks on Wall Street is because Wall Street doesn't talk about or even think about companies that haven't already proven themselves with large gains. If you get your advice from Wall Street you may be looking at a return of 3-5% a year. If you're happy with that small of a return, great; but if you are looking for more, then why not try making your fortune through penny stocks.
When you are ready to begin working towards your penny stock fortune then it's time to search for those penny stock guru's; the guys who do nothing but study penny stocks and email their picks to their subscribers, people like you and me. You won't know if you can make a penny stock fortune unless you try, and it's ok to be cautious, it's actually a good thing. Don't throw all your eggs in one basket so to speak. Start small, and gradually grow your portfolio. You won't make your penny stock fortune overnight, but you can make it over time.
By: Stapin Brown
Practice Before You Play
If you've been trading stock picks for any length of time, you know you need to treat your trading activities as an actual business. If you're at all good at noticing situations in which you're likely to make a profit, and if you invest accordingly, you stand to get a big return on your money.
Frequent trading is likely to produce trading skills. There really isn't any other way to get good at trading stock picks besides, well, trading. As they say, you have to get into the saddle in order to learn how to ride the horse.
One way you can get practice is using a "play" account. See if your brokerage can provide you with a virtual account so you can get some practice trading without actually losing real dollars and cents. Jumping straight in and trading on a real account is not the most advisable action. That's what virtual accounts are for!
It is strongly suggested that you get some practice time in before actually trading real money. If you don't learn the skills needed to become a talented investor you may lose all your money (which is the same as your inventory) before you've really gotten a chance to become a skilled trader.
Each trader is different and people learn at different speeds. However, since learning from your mistakes is often the best way to educate yourself, trading on a virtual account can be a much less expensive way to learn this valuable lesson.
Some people need to engage in hundreds and hundreds of trades before they become decent at gauging the profitability of future trades. Trading is a skill and skill knowledge is something you can't learn from books; it's a matter of knowing how to trade.
Don't get discouraged as you enter the learning process. After all, there is great potential for a profitable future in trading as long as you have the patience to realize that the learning curve is not steep and takes time.
How do people learn how to trade? Often a trader will make an educated guess at the profitability of a particular trade. Of course, a trader can't predict the future and thus will not know whether the trade will end up being successful.
Traders must learn how to interpret statistical data and read from it whether certain trades will be profitable. An experienced trader will be better able to hone skills that will make this process easier and more accurate.
By using a virtual account and being patient you will increase your chances of a successful business in trading. You, too, can create new horizons in the world of trading stock picks!
By: Stapin Brown
Frequent trading is likely to produce trading skills. There really isn't any other way to get good at trading stock picks besides, well, trading. As they say, you have to get into the saddle in order to learn how to ride the horse.
One way you can get practice is using a "play" account. See if your brokerage can provide you with a virtual account so you can get some practice trading without actually losing real dollars and cents. Jumping straight in and trading on a real account is not the most advisable action. That's what virtual accounts are for!
It is strongly suggested that you get some practice time in before actually trading real money. If you don't learn the skills needed to become a talented investor you may lose all your money (which is the same as your inventory) before you've really gotten a chance to become a skilled trader.
Each trader is different and people learn at different speeds. However, since learning from your mistakes is often the best way to educate yourself, trading on a virtual account can be a much less expensive way to learn this valuable lesson.
Some people need to engage in hundreds and hundreds of trades before they become decent at gauging the profitability of future trades. Trading is a skill and skill knowledge is something you can't learn from books; it's a matter of knowing how to trade.
Don't get discouraged as you enter the learning process. After all, there is great potential for a profitable future in trading as long as you have the patience to realize that the learning curve is not steep and takes time.
How do people learn how to trade? Often a trader will make an educated guess at the profitability of a particular trade. Of course, a trader can't predict the future and thus will not know whether the trade will end up being successful.
Traders must learn how to interpret statistical data and read from it whether certain trades will be profitable. An experienced trader will be better able to hone skills that will make this process easier and more accurate.
By using a virtual account and being patient you will increase your chances of a successful business in trading. You, too, can create new horizons in the world of trading stock picks!
By: Stapin Brown
Trading on the New York Stock Exchange
In terms of how much money is traded at any given day, the New York Stock Exchange is considered the largest exchange market in the world. It is also regarded as the leader in the equities market in terms of technology and investments coming in from all corners of the globe. Every day, the New York Stock Exchange is where the biggest companies buy and sell billions of dollars worth of shares.
The New York Stock Exchange consists of member-brokers who take on the trading of stocks (buying and selling) for clients, which are financially large companies based in different parts of the world. Combined, the value of companies that trade on the New York Stock Exchange is estimated at nearly four trillion dollars. Members of the New York Stock Exchange buy and sell millions of dollars worth of stock for their clients every single day.
Through the New York Stock Exchange, companies sell their stocks to the public in an effort to raise money to use in their business operations. For instance, big corporations like Sony or Coca-Cola sell stocks on the New York Stock Exchange to the public. Those who buy stocks from these large corporations become stock owners of the companies. US-based corporations are not the only ones that can sell stocks on the New York Stock Exchange. Currently, there are about 2,800 companies located from all over the world listed on the New York Stock Exchange.
Those who shares of large corporations are in part owners of those corporations and as such, these corporations must regard the shareholders as if they own a large portion of their stocks. The New York Stock Exchange requires all companies trading stock to provide their shareholders with complete financial reports the way they do their Chairman of the Board. You can find out more about stock trading at http://www.learningtotradestock.com
To safeguard the interest of investors, the New York Stock Exchange has regulations in place to monitor the activities of member-brokers. A seat in the New York Stock Exchange can cost a few million dollars.
Here are a few facts all about the New York Stock Exchange that you may find interesting:
* The Bank of New York was the first company that was listed with the New York Stock Exchange. The bank bought and sold stocks in 1792 beneath the Buttonwood Tree.
* Con Edison, which traded as the New York Gas Light Company in 1824, holds the record for the longest company listed in the New York Stock Exchange.
* In 1878, the New York Stock Exchange installed it first telephone. Five years later, in 1883, electric lights were installed.
If you are interested in investing on the New York Stock Exchange, you must get in touch with one of the member firms or one of the member firm's brokers. Before entrusting your money to a member firm or a broker in a member firm, ensure that they have the necessary licenses to trade at the New York Stock Exchange.
By: Dean Forster
The New York Stock Exchange consists of member-brokers who take on the trading of stocks (buying and selling) for clients, which are financially large companies based in different parts of the world. Combined, the value of companies that trade on the New York Stock Exchange is estimated at nearly four trillion dollars. Members of the New York Stock Exchange buy and sell millions of dollars worth of stock for their clients every single day.
Through the New York Stock Exchange, companies sell their stocks to the public in an effort to raise money to use in their business operations. For instance, big corporations like Sony or Coca-Cola sell stocks on the New York Stock Exchange to the public. Those who buy stocks from these large corporations become stock owners of the companies. US-based corporations are not the only ones that can sell stocks on the New York Stock Exchange. Currently, there are about 2,800 companies located from all over the world listed on the New York Stock Exchange.
Those who shares of large corporations are in part owners of those corporations and as such, these corporations must regard the shareholders as if they own a large portion of their stocks. The New York Stock Exchange requires all companies trading stock to provide their shareholders with complete financial reports the way they do their Chairman of the Board. You can find out more about stock trading at http://www.learningtotradestock.com
To safeguard the interest of investors, the New York Stock Exchange has regulations in place to monitor the activities of member-brokers. A seat in the New York Stock Exchange can cost a few million dollars.
Here are a few facts all about the New York Stock Exchange that you may find interesting:
* The Bank of New York was the first company that was listed with the New York Stock Exchange. The bank bought and sold stocks in 1792 beneath the Buttonwood Tree.
* Con Edison, which traded as the New York Gas Light Company in 1824, holds the record for the longest company listed in the New York Stock Exchange.
* In 1878, the New York Stock Exchange installed it first telephone. Five years later, in 1883, electric lights were installed.
If you are interested in investing on the New York Stock Exchange, you must get in touch with one of the member firms or one of the member firm's brokers. Before entrusting your money to a member firm or a broker in a member firm, ensure that they have the necessary licenses to trade at the New York Stock Exchange.
By: Dean Forster
Stock Investing--Never Invest Your Money in a Company with Untrustworthy Management
This news item, dated February 26, 2007, caught my eye:
"AES announced Monday that it plans to reschedule the release of its fourth-quarter and full-year results because of errors in its financial statements. AES had similar problems last year, when the company admitted material weaknesses in its accounting systems, particularly in its foreign operations. The company expects, as before, to restate its financial results. The company also announced that may have a stock-option dating issue."
In rating a company's quality--the very first step in deciding whether it is even a candidate for your investment dollars--management trustworthiness is a mandatory litmus test.
The Sensible Stock investor seeks unquestionable integrity of management. Here are examples of situations that should stick a big red flag on any company:
• Companies being sued on antitrust grounds.
• Companies that produce unsafe or harmful products and attempt to deny or evade responsibility.
• Companies that admit lying or misleading the investing public in any way.
• Companies whose reported financials are questioned, or which have a reputation for "aggressive accounting."
AES falls into the last category. First, it can't seem to get a handle on its own numbers. For two years in a row, it has had to delay or restate its financial results. In my book, that makes them "untrustworthy." I don't mean this in a personal way. They may all be good, honest guys there at AES. They may simply be incompetent. Their intent (whether to be honest or misleading) is not the issue. The real issue is, can you trust their numbers? Clearly you cannot.
If I were evaluating this company for possible investment, I'd save myself some time and toss it out as soon as I ran across this news item.
Note also that AES has a potential second problem: It may have a stock option back-dating issue. The admission of these issues--which are sometimes innocent but are often outright fraud--has become almost epidemic over the last year or so. Because the practice was so widespread, perhaps it shouldn't be considered a trustworthiness issue.
But then again, not every company that issues stock options backdated them. Backdating options, after all, moves money out of shareholders' pockets and into the pockets of management or board members. It is lying to shareholders. If management lies about that, what other subjects might they be misleading you on? New products? New markets? Operational improvements? How can you know?
With what kind of company would you rather place your bet? A company which effectively cheats its owners out of some of the profits to which they are entitled, or one that doesn't, keeping its owners' interests foremost. The question answers itself.
Some indicia of untrustworthiness are easily seen in public records. Has the company had a formal SEC investigation in the past year or two? Has it repeatedly taken "one-time" charges year in and year out? Has it recently restated earnings? Has its CEO or CFO resigned under questionable circumstances?
Depending on your point of view, an entire spectrum of factors can lead you to question a company's integrity. For example, Microsoft has been adjudged in court decisions to have used illegal tactics for years to preserve its monopoly in PC operating systems. Years after the issue first came to light, it is still fighting these charges in Europe. You may consider this proof of a lack of integrity and refuse to invest in Microsoft for this reason alone.
For another example, consider Daimler-Chrysler: At the time of the "merger" of Chrysler and Daimler-Benz, Jurgen Shrempp (CEO) said that there would be equality of the companies after the merger. Shrempp later retracted these statements, publicly acknowledged that he had misled, and appointed a German to head Chrysler. Many of Chrysler's executives left the company as the truth of the situation emerged.
So did a lot of investors: From early 1999 to early 2001, the stock dropped 50 percent. Now, in 2007, Chrysler is for sale. As Dr. Phil might ask, "So, how has that worked out for you?" Evidence of lack of integrity was there from practically the beginning.
Back to AES. Questions abound: Will AES ever be able to get a handle on its accounting? Can any of its reported numbers be relied upon? Has the company committed intentional fraud with its options practices? Does anybody there know what they are doing? Does AES' board have a clue?
With questions like these, why would anybody entrust their hard-earned money to buying AES stock? The Sensible Stock Investor certainly should not.
By: David Van Knapp
"AES announced Monday that it plans to reschedule the release of its fourth-quarter and full-year results because of errors in its financial statements. AES had similar problems last year, when the company admitted material weaknesses in its accounting systems, particularly in its foreign operations. The company expects, as before, to restate its financial results. The company also announced that may have a stock-option dating issue."
In rating a company's quality--the very first step in deciding whether it is even a candidate for your investment dollars--management trustworthiness is a mandatory litmus test.
The Sensible Stock investor seeks unquestionable integrity of management. Here are examples of situations that should stick a big red flag on any company:
• Companies being sued on antitrust grounds.
• Companies that produce unsafe or harmful products and attempt to deny or evade responsibility.
• Companies that admit lying or misleading the investing public in any way.
• Companies whose reported financials are questioned, or which have a reputation for "aggressive accounting."
AES falls into the last category. First, it can't seem to get a handle on its own numbers. For two years in a row, it has had to delay or restate its financial results. In my book, that makes them "untrustworthy." I don't mean this in a personal way. They may all be good, honest guys there at AES. They may simply be incompetent. Their intent (whether to be honest or misleading) is not the issue. The real issue is, can you trust their numbers? Clearly you cannot.
If I were evaluating this company for possible investment, I'd save myself some time and toss it out as soon as I ran across this news item.
Note also that AES has a potential second problem: It may have a stock option back-dating issue. The admission of these issues--which are sometimes innocent but are often outright fraud--has become almost epidemic over the last year or so. Because the practice was so widespread, perhaps it shouldn't be considered a trustworthiness issue.
But then again, not every company that issues stock options backdated them. Backdating options, after all, moves money out of shareholders' pockets and into the pockets of management or board members. It is lying to shareholders. If management lies about that, what other subjects might they be misleading you on? New products? New markets? Operational improvements? How can you know?
With what kind of company would you rather place your bet? A company which effectively cheats its owners out of some of the profits to which they are entitled, or one that doesn't, keeping its owners' interests foremost. The question answers itself.
Some indicia of untrustworthiness are easily seen in public records. Has the company had a formal SEC investigation in the past year or two? Has it repeatedly taken "one-time" charges year in and year out? Has it recently restated earnings? Has its CEO or CFO resigned under questionable circumstances?
Depending on your point of view, an entire spectrum of factors can lead you to question a company's integrity. For example, Microsoft has been adjudged in court decisions to have used illegal tactics for years to preserve its monopoly in PC operating systems. Years after the issue first came to light, it is still fighting these charges in Europe. You may consider this proof of a lack of integrity and refuse to invest in Microsoft for this reason alone.
For another example, consider Daimler-Chrysler: At the time of the "merger" of Chrysler and Daimler-Benz, Jurgen Shrempp (CEO) said that there would be equality of the companies after the merger. Shrempp later retracted these statements, publicly acknowledged that he had misled, and appointed a German to head Chrysler. Many of Chrysler's executives left the company as the truth of the situation emerged.
So did a lot of investors: From early 1999 to early 2001, the stock dropped 50 percent. Now, in 2007, Chrysler is for sale. As Dr. Phil might ask, "So, how has that worked out for you?" Evidence of lack of integrity was there from practically the beginning.
Back to AES. Questions abound: Will AES ever be able to get a handle on its accounting? Can any of its reported numbers be relied upon? Has the company committed intentional fraud with its options practices? Does anybody there know what they are doing? Does AES' board have a clue?
With questions like these, why would anybody entrust their hard-earned money to buying AES stock? The Sensible Stock Investor certainly should not.
By: David Van Knapp
Always Use Protection! Trailing Sell-Stops for Safe Investing
For most individuals, whether to sell a stock is the hardest decision in stock investing.
It sounds simple at first: "Sell your losers and let your winners run." Sure, obviously. But how do you know which stocks are your future long-term winners and losers? More to the point, how do you tell the difference--right now--between a stock that is only on a short-term losing streak as opposed to one which is destined to be a long term loser?
Clearly, it's easy to list your winners and losers as of right now. But that's not what this particular decision is about. This is about future events--unknowable by definition. Even if your stock is falling in price, you don't want prematurely to decide that you made a mistake buying it or that its prospects have reversed from bright to dim. It may not be a loser at all. It just may have hit a bad patch. Your original positive outlook on the company and its stock may be correct, and the optimum decision may be to give the stock more time to reach its profitable destination. A stock in a short-term stall can become a long-term winner.
On the other hand, we all know Rule #1 of investing: Don't lose. So you can't wait forever to make your decision when a stock's price keeps falling.
Every Sensible Stock Investor wants to take a strategic--not whimsical--approach to making sell decisions. You want to contain losses and sidestep risks.
The trailing sell-stop order is a very effective tool for sticking to a strategic approach. Let's make sure we understand what this order is. Then we'll talk about how to use them.
A trailing sell-stop order--which is a standard type of order available from all brokerages--has these characteristics:
• It is a "sell" order with a condition attached. You select the condition and attach it. When the condition is satisfied, the order to sell is executed--whether you are at work, in the bathroom, on vacation, or wherever.
• The condition is the "stop" price. That is the price you pre-select to trigger the sell order. If the stock's price falls to or through that point, the sell order is executed. You pre-select the trigger price when you are thinking objectively and strategically, not in the heat of a fast-moving market situation.
• It is a "trailing" order. Over time, as the price of your stock moves up, you reset the trigger price a little higher--say once per week. That way, the stop price trails along behind the stock's actual price, protecting you on the downside while not limiting your upside.
• It is a "standing" order. That means it just sits there until (1) it is executed, (2) it expires (3) you change it, or (4) you remove it.
Of course if the stock's price is going down, you leave the existing stop price alone. The whole idea is that it is there to protect you against losses. It does not take long to review and reset all the stop prices in a small portfolio--maybe a minute per stock online.
So trailing sell-stops are used to limit losses from your purchase price or to lock in the gains of your stocks as they advance. The trailing stops get you out if the stock suddenly starts to tumble. They work like ratchets, letting your stock price move up but not down past the trigger price you have selected.
I follow one hard-and-fast rule: Sell a new purchase before losing 10 percent in it. So as soon as I purchase a stock, I enter a sell-stop order too, usually at 8 percent less than I paid for it.
After a stock gains 10 percent for you, your stop price will have reached what you paid for it, so you will never lose money on that stock. After that hurdle has been cleared, how do you set the stop price? The goal is to give the stock enough room for normal volatility, while at the same time being restrictive enough so as not to let profits escape if the stock starts to go backwards.
There are two main methods to set stop prices. First, you can set the stop price as a percentage below today's price (but never below what you paid after the initial 10 percent hurdle has been cleared). I use the percentage approach most of the time. My "default" percentage is 15 percent, although I may change that (up or down) in certain situations.
• I might use a looser stop (such as 20 or even 25 percent) for a "blue chip" company that I really expect to hold onto for a long time. This would typically be a company that has a fat dividend yield.
• I usually use 10 percent if the "stock" is an ETF (exchange-traded fund). This is because funds are typically less volatile than company stocks, so they don't need as much wiggle room.
• And I might use a stop as low as 2 percent or 3 percent for a stock that I have decided to sell. The tight stop price lets me squeeze out any unexpected upside that the stock may have left in it, but it still gets me out with negligible damage if the stock falls at all.
The second way to set the stop price is to examine the stock's chart for the past year or so. You may see that while overall the stock has been rising, some significant surges and drops are part of its normal behavior. The dips may exceed any reasonable percentage sell-stop that you would normally set. But you don't want to sell the stock on such dips, because can see that the overall trend has been upward, and you believe that it will be continue to be that way.
In that case, what I usually do is have the charting software (available on most financial websites) draw the stock's moving average line (MA). Try MA's between 50 and 200 days. What you might discover is that although the stock has its ups and downs, it essentially never falls below one of those moving average lines--it always seems to "bounce" off the MA line and head back up. If that's the case, use that MA as the stop price.
If you employ trailing sell-stop orders, you will find from time to time that you are "stopped out" of a stock that, as things turn out, you would have been better off just hanging on to. But that's OK. Cutting losses and preserving gains are so important to overall success that the risk of getting stopped out is preferable to the risk of taking a large loss. And, if a stop-out proves to be a mistake, you can reverse it. As the situation clarifies, nothing prevents you from repurchasing the stock.
By: Dave Van Knapp
Dave Van Knapp is the author of "Sensible Stock Investing: How to Pick, Value, and Manage Stocks." Learn more about his step-by-step approach for individual investors at http://www.SensibleStocks.com .
It sounds simple at first: "Sell your losers and let your winners run." Sure, obviously. But how do you know which stocks are your future long-term winners and losers? More to the point, how do you tell the difference--right now--between a stock that is only on a short-term losing streak as opposed to one which is destined to be a long term loser?
Clearly, it's easy to list your winners and losers as of right now. But that's not what this particular decision is about. This is about future events--unknowable by definition. Even if your stock is falling in price, you don't want prematurely to decide that you made a mistake buying it or that its prospects have reversed from bright to dim. It may not be a loser at all. It just may have hit a bad patch. Your original positive outlook on the company and its stock may be correct, and the optimum decision may be to give the stock more time to reach its profitable destination. A stock in a short-term stall can become a long-term winner.
On the other hand, we all know Rule #1 of investing: Don't lose. So you can't wait forever to make your decision when a stock's price keeps falling.
Every Sensible Stock Investor wants to take a strategic--not whimsical--approach to making sell decisions. You want to contain losses and sidestep risks.
The trailing sell-stop order is a very effective tool for sticking to a strategic approach. Let's make sure we understand what this order is. Then we'll talk about how to use them.
A trailing sell-stop order--which is a standard type of order available from all brokerages--has these characteristics:
• It is a "sell" order with a condition attached. You select the condition and attach it. When the condition is satisfied, the order to sell is executed--whether you are at work, in the bathroom, on vacation, or wherever.
• The condition is the "stop" price. That is the price you pre-select to trigger the sell order. If the stock's price falls to or through that point, the sell order is executed. You pre-select the trigger price when you are thinking objectively and strategically, not in the heat of a fast-moving market situation.
• It is a "trailing" order. Over time, as the price of your stock moves up, you reset the trigger price a little higher--say once per week. That way, the stop price trails along behind the stock's actual price, protecting you on the downside while not limiting your upside.
• It is a "standing" order. That means it just sits there until (1) it is executed, (2) it expires (3) you change it, or (4) you remove it.
Of course if the stock's price is going down, you leave the existing stop price alone. The whole idea is that it is there to protect you against losses. It does not take long to review and reset all the stop prices in a small portfolio--maybe a minute per stock online.
So trailing sell-stops are used to limit losses from your purchase price or to lock in the gains of your stocks as they advance. The trailing stops get you out if the stock suddenly starts to tumble. They work like ratchets, letting your stock price move up but not down past the trigger price you have selected.
I follow one hard-and-fast rule: Sell a new purchase before losing 10 percent in it. So as soon as I purchase a stock, I enter a sell-stop order too, usually at 8 percent less than I paid for it.
After a stock gains 10 percent for you, your stop price will have reached what you paid for it, so you will never lose money on that stock. After that hurdle has been cleared, how do you set the stop price? The goal is to give the stock enough room for normal volatility, while at the same time being restrictive enough so as not to let profits escape if the stock starts to go backwards.
There are two main methods to set stop prices. First, you can set the stop price as a percentage below today's price (but never below what you paid after the initial 10 percent hurdle has been cleared). I use the percentage approach most of the time. My "default" percentage is 15 percent, although I may change that (up or down) in certain situations.
• I might use a looser stop (such as 20 or even 25 percent) for a "blue chip" company that I really expect to hold onto for a long time. This would typically be a company that has a fat dividend yield.
• I usually use 10 percent if the "stock" is an ETF (exchange-traded fund). This is because funds are typically less volatile than company stocks, so they don't need as much wiggle room.
• And I might use a stop as low as 2 percent or 3 percent for a stock that I have decided to sell. The tight stop price lets me squeeze out any unexpected upside that the stock may have left in it, but it still gets me out with negligible damage if the stock falls at all.
The second way to set the stop price is to examine the stock's chart for the past year or so. You may see that while overall the stock has been rising, some significant surges and drops are part of its normal behavior. The dips may exceed any reasonable percentage sell-stop that you would normally set. But you don't want to sell the stock on such dips, because can see that the overall trend has been upward, and you believe that it will be continue to be that way.
In that case, what I usually do is have the charting software (available on most financial websites) draw the stock's moving average line (MA). Try MA's between 50 and 200 days. What you might discover is that although the stock has its ups and downs, it essentially never falls below one of those moving average lines--it always seems to "bounce" off the MA line and head back up. If that's the case, use that MA as the stop price.
If you employ trailing sell-stop orders, you will find from time to time that you are "stopped out" of a stock that, as things turn out, you would have been better off just hanging on to. But that's OK. Cutting losses and preserving gains are so important to overall success that the risk of getting stopped out is preferable to the risk of taking a large loss. And, if a stop-out proves to be a mistake, you can reverse it. As the situation clarifies, nothing prevents you from repurchasing the stock.
By: Dave Van Knapp
Dave Van Knapp is the author of "Sensible Stock Investing: How to Pick, Value, and Manage Stocks." Learn more about his step-by-step approach for individual investors at http://www.SensibleStocks.com .
Stock Picks: Taking Advantage of Insider Trading
Using inside information to gain advantage in a trade is illegal. However, it still goes on all the time. Insider trading is always a bad idea, but that doesn't mean you can't benefit from other people's insider trading. Now, that is a good idea!
When insider trading is going on there are clues about it that can be read from market activity. By paying attention to these insider trading patterns you may be able to turn a pretty profit.
What sort of patterns should you look for? The key to monitoring other people's insider trading is to watch for significant changes in the price of stocks without any major news hitting the news wires about those same stocks.
If you suspect insider trading is going on, do a thorough check of the stock picks you think may be affected by it. Look to see if there are any particular changes that may be affecting the stock price.
Such changes are called "newsworthy events." If a newsworthy event is supposed to happen a day or two in the future, it's likely that the price of the stocks you're monitoring may change in anticipation. Newsworthy events include announcements from all sorts of research-related results, conferences, announcements of earnings, or other news items about the stock, such as facts about the CEO, etc.
Be careful to do a thorough investigation of the stocks for newsworthy events before concluding that insider trading may be occurring. After all, if you aren't very familiar with your stock, you may think insider trading is occurring when really you simply aren't fully informed about what's going on with the stock picks in question. This isn't insider trading, it's actually just normal everyday trading.
If you have a good broker, it's likely you'll be able to get aggregate news about which stocks have rapidly changing prices. This is a feature you should use in order to maximize your profit. There are also some software products that can assist you in scanning price moves on volume.
Once you get your scanning software, be sure to use it several times a day. The two most important times to use the software are fairly early in the morning, just after the stock market opens, and again just before it closes. These are the times when insider trading is most likely to occur. The software helps you check for significant price upswings which you can then investigate to see if they can be explained away by a newsworthy event.
Smart traders get the best of both worlds. They stay out of trouble with the law but still benefit from insider trading by paying close attention to their stock picks. Now you can do the same.
Article written by Doug Newberry
When insider trading is going on there are clues about it that can be read from market activity. By paying attention to these insider trading patterns you may be able to turn a pretty profit.
What sort of patterns should you look for? The key to monitoring other people's insider trading is to watch for significant changes in the price of stocks without any major news hitting the news wires about those same stocks.
If you suspect insider trading is going on, do a thorough check of the stock picks you think may be affected by it. Look to see if there are any particular changes that may be affecting the stock price.
Such changes are called "newsworthy events." If a newsworthy event is supposed to happen a day or two in the future, it's likely that the price of the stocks you're monitoring may change in anticipation. Newsworthy events include announcements from all sorts of research-related results, conferences, announcements of earnings, or other news items about the stock, such as facts about the CEO, etc.
Be careful to do a thorough investigation of the stocks for newsworthy events before concluding that insider trading may be occurring. After all, if you aren't very familiar with your stock, you may think insider trading is occurring when really you simply aren't fully informed about what's going on with the stock picks in question. This isn't insider trading, it's actually just normal everyday trading.
If you have a good broker, it's likely you'll be able to get aggregate news about which stocks have rapidly changing prices. This is a feature you should use in order to maximize your profit. There are also some software products that can assist you in scanning price moves on volume.
Once you get your scanning software, be sure to use it several times a day. The two most important times to use the software are fairly early in the morning, just after the stock market opens, and again just before it closes. These are the times when insider trading is most likely to occur. The software helps you check for significant price upswings which you can then investigate to see if they can be explained away by a newsworthy event.
Smart traders get the best of both worlds. They stay out of trouble with the law but still benefit from insider trading by paying close attention to their stock picks. Now you can do the same.
Article written by Doug Newberry
Real Time Stock Quotes For Trading Success
Many people are into online trading and are getting hooked on it simply because of the freedom it gives them to control their finances. Through online trading, they are able to instantly buy and sell stocks. As what many have discovered, online trading is a double-edged sword: you get all the glory if you successfully close transactions, and you only have yourself to blame if something goes wrong with buying and selling your stocks. Those who actively participate in the stock market via online trading use a variety of tools to help them in their decision making. One of the tools they use are real time stock quotes.
If you are serious about protecting your investment and you want to make money in the stock market on a consistent basis, access to real time stock quotes is a must. Just how important are real time stock quotes? Know that you can lose huge amounts of money if you base your stock buying or selling decisions on outdated stock quote information. Be aware that even stock quotes that are only minutes old are, in the trading world, considered outdated information; using them can cost you money. If you are selling stocks, real time stock quotes can help you identify the best times to sell. Likewise, if you are buying stocks, real time stock quotes can help you identify opportunities for buying stocks.
You can easily access real time stock quotes if you do your online trading in your computer at home. You can even do your online trading while you have the television on in one of the financial channels. However, access to real time stock quotes can be a challenge if you are on the road and access to a computer and the Internet are not readily available. You can probably map out your schedule for when you are on the road and park where you can have access to the Internet and then do your online trading.
But oftentimes the best opportunities for online trading come when you least expect it. How do you monitor the stock market even while you travel? It is now possible for online traders to have real time stock quotes sent to their PDAs or cell phones (or both). There are special services that offer to stream real time stock quotes data to your cell phone and PDA so you can keep tabs on the stock market regardless of what you're doing and where you are. You can learn more about stock trading over at http://www.learningtotradestock.com
Because of globalization, anything that happens in other countries can profoundly affect the U.S. markets. If you have significant stock portfolios, it is even more imperative that you get access to real time stock quotes each minute the major stock markets are open. Subscribe to a service that offers data streaming of real time stock quotes to your cell phone or PDA. This is the only way you can expect to make good decisions and keep your finances in good order regardless of where you are and what you are doing.
Article by Dean Forster of http://www.learningtotradestock.com . Find out more for free about successful stock trading at Learning To Trade Stock
If you are serious about protecting your investment and you want to make money in the stock market on a consistent basis, access to real time stock quotes is a must. Just how important are real time stock quotes? Know that you can lose huge amounts of money if you base your stock buying or selling decisions on outdated stock quote information. Be aware that even stock quotes that are only minutes old are, in the trading world, considered outdated information; using them can cost you money. If you are selling stocks, real time stock quotes can help you identify the best times to sell. Likewise, if you are buying stocks, real time stock quotes can help you identify opportunities for buying stocks.
You can easily access real time stock quotes if you do your online trading in your computer at home. You can even do your online trading while you have the television on in one of the financial channels. However, access to real time stock quotes can be a challenge if you are on the road and access to a computer and the Internet are not readily available. You can probably map out your schedule for when you are on the road and park where you can have access to the Internet and then do your online trading.
But oftentimes the best opportunities for online trading come when you least expect it. How do you monitor the stock market even while you travel? It is now possible for online traders to have real time stock quotes sent to their PDAs or cell phones (or both). There are special services that offer to stream real time stock quotes data to your cell phone and PDA so you can keep tabs on the stock market regardless of what you're doing and where you are. You can learn more about stock trading over at http://www.learningtotradestock.com
Because of globalization, anything that happens in other countries can profoundly affect the U.S. markets. If you have significant stock portfolios, it is even more imperative that you get access to real time stock quotes each minute the major stock markets are open. Subscribe to a service that offers data streaming of real time stock quotes to your cell phone or PDA. This is the only way you can expect to make good decisions and keep your finances in good order regardless of where you are and what you are doing.
Article by Dean Forster of http://www.learningtotradestock.com . Find out more for free about successful stock trading at Learning To Trade Stock
Stock Picks: Day Trading or Swing Trading
Trading stock picks is a great way to make a lucrative living, but trading is never a no-brainer. In the trading fast lane there are always trade-offs. In particular, there are trade-offs between day trading and swing trading. Each has pros and cons.
How do you decide whether to day trade or swing trade? When day trading, your position will always close, no matter how high or low it is, when the stock market closes at the end of the day. This means there's a greater potential for profit, you can use higher leverage, and you can make your money work harder. Your finger had better always be on the pulse of the market with day trading.
In a swing trading situation, your trade won't be completed the same day. It will probably close over the course of a few days. In other words, your trading finger doesn't have to stay quite as close to the market as it would in day trading. You can think of the swing trade as having a much broader scope than the day trade.
Day traders spend a lot of time very close to their stock. They have to pay unflagging attention to their positions, staying focused, and keeping their minds alert and plastered to the stock chart. If the position starts to fall rapidly, day traders must be ready to react in time.
This means you can't manage lots of positions at once. Do you have the margin to hold a position overnight? This margin can be as much as four to one in one day, but it can only be two to one overnight.
In addition, if the trade goes against you, the brokerage may force you to sell your position or even give you a margin call if you go right up against your margin limit. So, day traders can make a larger profit, which is incentive enough for most. Swing traders don't have to glue their eyes to the position. They have a larger time frame in which to sell their stocks if they should happen to lose value. And, of course, they can handle more positions due to not having to pay such close attention to each.
The most important thing to watch out for if you opt for swing trading is the threat of the "position trade". If it does come to a "position trade", you should realize you're eating up your margins. As mentioned before, in swing trades, overnight margin requirements don't allow you to work your money as hard.
Your choice about whether to day trade or swing trade will depend on where you find the most success. You will naturally lean toward one or the other. Just remember to minimize the risk and maximize the profit. Happy trading!
Article written by Douglas Newberry
How do you decide whether to day trade or swing trade? When day trading, your position will always close, no matter how high or low it is, when the stock market closes at the end of the day. This means there's a greater potential for profit, you can use higher leverage, and you can make your money work harder. Your finger had better always be on the pulse of the market with day trading.
In a swing trading situation, your trade won't be completed the same day. It will probably close over the course of a few days. In other words, your trading finger doesn't have to stay quite as close to the market as it would in day trading. You can think of the swing trade as having a much broader scope than the day trade.
Day traders spend a lot of time very close to their stock. They have to pay unflagging attention to their positions, staying focused, and keeping their minds alert and plastered to the stock chart. If the position starts to fall rapidly, day traders must be ready to react in time.
This means you can't manage lots of positions at once. Do you have the margin to hold a position overnight? This margin can be as much as four to one in one day, but it can only be two to one overnight.
In addition, if the trade goes against you, the brokerage may force you to sell your position or even give you a margin call if you go right up against your margin limit. So, day traders can make a larger profit, which is incentive enough for most. Swing traders don't have to glue their eyes to the position. They have a larger time frame in which to sell their stocks if they should happen to lose value. And, of course, they can handle more positions due to not having to pay such close attention to each.
The most important thing to watch out for if you opt for swing trading is the threat of the "position trade". If it does come to a "position trade", you should realize you're eating up your margins. As mentioned before, in swing trades, overnight margin requirements don't allow you to work your money as hard.
Your choice about whether to day trade or swing trade will depend on where you find the most success. You will naturally lean toward one or the other. Just remember to minimize the risk and maximize the profit. Happy trading!
Article written by Douglas Newberry
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