Jan 25th 2008
The imitation of the people around us is one of our more fundamental biological orders. The infants start to imitate facial expressions within one hour after birth, and we will seek above the imitating remainder of our lives of the words, faces, language of body, models of the word, social manias, modes — and of the investments — until we die. We have “neurons of mirror” in our brains to help us to do what everyone differently made. But why?
We want to be as the different one partly because it is a manner of going inside and of forming an identity of group, like Gerstner putting on the white shirt at IBM. And it is a product our to recommend innate to emulate chiefs, like the executives of IBM commutating with the color of Gerstner. By doing what everyone differently also puts out of box be an effective defensive strategy.
May 25th 2007
Buy low and sell high is the ultimate goal of a stock trader. Determining when to buy stocks is a challenging task. Stocks that have gone up recently, especially those with a lot of press, often attract even more buyers. This obviously drives the price up even higher. Following a few simple steps can make the process easier.
- Set your goals. There is nothing worst than jumping into the stock market without a goal. With a goal, you know when to stop. Determine how much you want to invest. The type of returns you’re expecting. And how long you want to invest your money for.
- Do a little research on the industry, the companies and the products you are interested in. Look at magazines, daily newspapers and company websites are particularly useful. Also, Internet-based news services can provide you with up-to-the-minute information on just about anything about stocks.
Apr 3rd 2007
Reverse stock splits, so what are they?
It’s the exact opposite of a regular stock split. Under a normal 2 for 1 stock split, the investor would receive 2 shares for each share they hold, and the price is cut in half. Now with a reverse stock split, the investor can receive 1 share for each 2 shares held, and the price is doubled. Like a regular stock split, this has no effect on the value of the investor’s holdings.
So, why is this being done by some companies? Many major stock market exchanges have minimum requirements for stock price levels. These reverse splits are typically done to keep the stock price above this minimum so they do not get booted off the exchange. If a stock does fall below this minimum, the exchange can remove the company off the exchange. A quick fix to this is to perform a reverse stock split.
Mar 13th 2007
In theory, a stock split shouldn’t change the value of a stock. Shareholders don’t get any richer; they just have more shares to look after. It’s no different than exchanging a dime for two nickels. Then what’s the point?
Stock splitting is a measure typically taken to attract the average retail investor. By splitting the stock, the price becomes more attractive to the average investor as oppose to when the share price was at a higher price. The reasoning is that more people will want to buy a stock at $25 than $50. Also, it’s common to see share price to go up after a split when investors buy the stock at a lower price.
Feb 20th 2007
A stock split is the process of decreasing the price of stock and increasing the number of shares proportionally. Stock splits are really rather easy to understand. A typical example is a 2-for-1 stock split. If you own 100 shares of a company that trades at $100 a share and it declares a 2-for-1 stock split, you will own a total of 200 shares at $50 a share after the split. This is no way affects the value of what the shareholders own, if you happen to own shares that are splitting.
Feb 3rd 2007
A Bond Credit Rating is a measure of the quality and safety of a bond (note or any security of indebtedness) by a credit rating agency, based on the issuer’s financial condition. These ratings determine the interest that an issuer must pay to attract purchasers to the bonds. The ratings are expressed as a series of letters and digits. Generally, a higher credit rating would lead to a more favorable effect on the marketability of a bond. Typically, AAA is highest (best), and D is lowest (worst). Anything below triple B is commonly known as a “junk bond”.
- Bonds rated “AAA†– Bonds that are rated “AAA†are judged to be of the best quality. These are the highest ratings that can be assigned by rating agencies. The investment risks for these bonds are quite low, meaning they’re safe investments. The bond issuer’s ability to pay interest and principal is extremely strong.
Jan 7th 2007
Day traders attempts to make profits by leveraging large amounts of capital to take advantage of small price movements in highly liquid stocks. There are 4 common day trading strategies by which traders attempt to make a profit: Trend following, Playing news, Range Trading, and Scalping.
Trend Following
This is the simplest and safest method of stock trading. It assumes that stocks which have been rising steadily will to continue to rise, and vice versa. The trend follower buys a stock which has been rising or short-sells a falling one, in the expectation that the trend will continue.
Playing News
The strategy to this is to buy a stock which has just announced goods news, or short sell on bad news. Such news will cause huge volatility in a stock, meaning a good opportunity for quick profits (or losses). Something a typical day trader would look for when picking their stocks.
Jan 6th 2007
In the realm of the stock market, it’s not unusual to see a stock rise up more than 20% in less than 5 minutes on a good momentum day. There are a few out there who are able to make upwards of $5000 on a single trade and at the same you’ll find beginner day traders who’ll lose all their hair because of a series of unwise trades.
Chances are if you’re new to the game day trading you wouldn’t know what stocks to look for and how to properly pick them. You could end up wasting cash instead of making your profits grow. It’s not as simple as just placing a bet in the casino. That’s why the most important aspect of stock trading is information. Gather as much information as you can about about the stocks you are intersted in. There is no such thing as information overload when you’re a stock trader. The more the better. That’s part of your homework as a stock trader, do your research.
Jan 6th 2007
Day trading is basically online stock tading with very short invesetments horizons. Short as in munites. Because they are doing this day in and day out, they are called traders, not investors in the traditional sense. In the past, day trading tools were only available to professionals in the field. But thanks to the power of the Internet, everything you need to get started is now conveniently online.
Some work next to eacher other in trading rooms, while others work from their home offices. It’s no surprise that day traders execute over a hundre trades a day with their glued to the computer screen tickers. This is possible because they typically don’t hold stocks overnight just in case there’s bad news. In fact, they may holds stocks for no more than a minute to limit risk.
Nov 18th 2006
A mutual fund is an investment vehicle which pools the money of many investors and invests their money in stocks, bonds, and other securities. The investment company is responsible for the management of the fund, and it sells shares in the fund to individual investors. The securities purchased are referred to as the fund’s portfolio which represents a portion of the holdings of the fund. When you give your money to a mutual fund, the fund manager invests your funds, along with the money contributed by the other shareholders.
Unlike stocks, whose value fluctuates by the minute, the value of the mutual funds is priced at the end of each day. The value of a fund is expressed in terms of its “net-asset value”, also known as NAV. NAV is basically the fund’s total value of it’s portfolio divided by number of shares outstanding. At the end of each day, the fund manager totals up the value of the holdings and then calculates the NAV of the mutual fund for that day.