Stocks Information
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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.Spread trading is defined as opening a position by buying and selling the same type of option (ie. Call or Put) at the same time. For example, if you buy a call optio...(related: Stocks)
Option Trading Basics
Options trading can increase the profits you make when trading Stocks if you understand how to use them and know what you are doing. Options can be a very useful tool that the average investor can use to enhance their returns.This article - Options Trading Basics, looks at what options are and discusses some of the options trading strategies traders can use with these versatile instruments.Options - An OverviewOptions give the buyer the right, but not the obligation, to buy (a call option) or sell (a put option) the underlying Stock or futures contract at a specified price up until a specified date.In other words, options are like tradable insurance contracts.An investor can purchase a Put option as insurance against a decline in the Stock price or a Call option in case the Stock rises. Buying an option gives t...(related: Stocks)
Outsourcing
It's about time someone spoke the truth concerning outsourcing. The politicians sure won't. They prefer to do finger-pointing saying it is "his fault". It is those greedy manufacturers who want to make bigger profits by having cheap labor in Asia perform your task for less money.Did anyone ever tell you that if it wasn't for outsourcing you might not havea job? Did anyone ever tell you that the underwear, shoes, jewelry and hundreds of other items you own would cost much more if it wasn't for outsourcing? Probably not.Sure, many tasks are being sent overseas. Why? Just because it is cheaper? No, because the manufacturer that item had to do it in order to be able to compete with other companies making a similar product. If your company...(related: Stocks)
Overseas Investing: Going Against The Mainstream
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This strategy works in the short term, but can lead to difficulty in the longer haul. It also prevents investors from find...(related: Stocks)
Overvalued & Underbought
With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?The SEC...(related: Stocks)
Paddle Your Canoe
At some time in your life you have been on a river in a canoe and hopefully you had a paddle. You know about being up the creek without one.You quickly learned that paddling up stream is much harder than paddling down stream. The lesson of going with the flow can be applied to many aspects of life and especially to the stock market. In the creek it is...(related: Stocks)
Pamplona, The Wild Investment Bulls
You remember (they show it on TV every year)the running of the wild bulls in Pamplona,Spain. Some of the nuttier people get out theircapes and stand in their path as they comeroaring down the street.Our would-be matadors wave their home madecloaks at the bulls hoping the bulls will chargeat it and not at them. The list of casualties atthe end o...(related: Stocks)
Parachute Investing
Ever jumped out of an airplane? It's OK ifyou have on a parachute. Pretty dumb if you don't.Every buy any stocks, mutual...(related: Stocks)
Pathways
During our travel down life's path we come to many places where the trail divides and we must make a decision. Some involve psychological (emotional) choices ? marriage, divorce, leaving home, career changes, etc. Others are monetary ? buying a new car, home, starting your own business, investing, etc. Many are interwoven having aspects of both psychological and monetary.The marriage decision means you have decided to live and share everything with a partner and also support that partner in every way including financial.Investing in anything is at first mostly financial, but as you accumulate a larger and larger amount it begins to have a grip on your emotions. Greed and fear are the two great motivators in the investment community. Everyone wants to buy th...(related: Stocks)
Patterns
The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time. Don't you believe it.When I was a floor trader people would ask me how do you make sense of what is going on with all that yelling and arm-waving? To the uninitiated it does look turbulent, but to those who are in the middle it is understandable and orderly. It took me a while before it became "normal".Your broker at this time may be telling you that such-an-such stock is a great "value" because it has come down ...(related: Stocks)
Peer Groups
Whenever I see mutual fund comparisons in the trade publications and in the financial section of the newspaper they almost always mention a specific fund and tell you how good it is in relation to its peer group. A peer group is a specialized sector of mutual funds that all invest in about the same type of stocks or areas of the world or size of companies or some such categorization.Does this help you make money?No.Why?You have several dogs. A minature poodle, a regular poodle and a very...(related: Stocks)
Pension Plans
If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account.There are two kinds of formal retir...(related: Stocks)
Perfect Storm
Having lived aboard a sailboat for 2 years I was stricken when I saw the movie "PERFECT STORM". I know these are things you want to avoid at all costs. Even little storms can play havoc with your life style on a boat.From a world view it looks like we are headed into a perfect storm of world macroeconomics. That means every one in the world is going to be impacted economically by the developing global economics. The more economically developed the country the worse they will be affected. Those third-world countries just working their way to becoming second-world countries can easily be set back 30 to 50 years.What am I talking about?People need food and shelter and after they have the basic necessities they will buy nonessentials such as entertainment and toys (boat...(related: Stocks)
Performance Funds
Mutual funds are doing more and more to discourage investors from leaving them and taking their money to a better performing fund. What does better performing mean? It has nothing to d...(related: Stocks)
Picking Mutual Funds To Outperform The Market
With over 6,000 mutual funds available, it may be tempting to pick funds from a popular star or index rating system. Savvy investors, however, balance multiple factors in their selection process. Ratings represent only the historical performance of funds and cannot predict the future. Performance consistency, management skill, and expense limitations are among the many factors that influence a fund's prospects. Each must be carefully evaluated to improve your chances of finding a fund to outperform the market.Create a planDefine your financial goals. Are you saving for retirement? Putting money aside for a home? Funding a child's college education? Your answer will have...(related: Stocks)
Planning Your Dive And Diving Your Plan ? Trading!
A colleague of mine just returned from a scuba diving trip inCozumel, which just happens to be one of my favorite places todive. Anyway, she was telling me about an unexpect...(related: Stocks)
Play Another Day
Money management starts with protecting your capital, realizing profits and cutting losses. As I have stated in the past, without cash, you can't invest. Cash is king and learning to manage your money is the most important aspect to investing in stocks. The game is won by lowering your risk ...(related: Stocks)
Political Investing
We have two candidates for president that have really different ideas on how to make the economy grow.Bush believes in the entrepreneurial approach. People should be allowed to invest in themselves. He even wants to let people have some of the 15% that now goes to the Social Security "trust fund". Folks, there ain't no such thing. All the money the government takes out of your paycheck goes into the general f...(related: Stocks)
Precision Money Management
This article describes the model of a natural relationship between trading system performance, trade position size, stop loss settings and profit goals. The model consists of algebraic equations that specify the trade size and stop loss settings needed to meet profit goals over a specified time period for any consistently used trading system for which historical performance data is available.Most of us think of a trailing stop loss when the...(related: Stocks)
Price Targets
Every day in any financial publication you will find the Wall Street mavens giving their predictions on many stocks. It was issued here and should go there. It is now under...(related: Stocks)
Price To Earnings Ratio - P/e
After finding the price of a particular stock, usually the next number everyone looks at is the P/E ratio.P/E is the ratio of a company's share price to its per-share earnings.A P/E ratio of 10 means that...(related: Stocks)
Prospering With Mutual Funds: How Anyone Can ?afford? An Investment Advisor
Recently I was invited to appear on a live CNNfn television show to discuss my article "How to evaluate Load vs. No Load Mutual Funds." (You can read that article on my website Prosperity
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.Where did the idea that consumer borrowing is a recipe for prosperity? As I recall when I was a kid my Dad told me to work hard, save my money and invest wisely. That still seems like a good idea. Where have I gone wrong to want to live within my means and save some of what I earn?Corporations have also taken on huge amounts of debt. Many businesses were happy with a net, net profit of 5% to ...(related: Stocks)
Protect Your 401k
Checked your 401K lately? Going back to about a year ago many of these retirement accounts have shrunk by 30%, some even more. What Happened?You have been putting money in for years and your employer may have been contributing to your plan also. It is not supposed to get smaller. You are planning to spend that mon...(related: Stocks)
Protectionism
First let's see what protectionism is. According to Mr. Webster it is the advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services.That sounds pretty good. It is something that will protect the jobs of our workers from goods that can be produced elsewhere and undercut the prices of our l...(related: Stocks)
Psychology ? How To Reduce Negative Thoughts Relating To Trading?
The thinking process of the brain relating to the psychology of trading involves:-- Beliefs -- Feelings -- Values -- Dispositions and -- FaithThe positive or negative energy brings power to a person's actions, which ultimately determines whether a person is a winner or a loser. You can change for the better or for the worst. The old saying goes: For as a man thinks in his heart so he is. -- Trading is the most difficult money making skill to master, because the market represents the aspects of people and life. It is necessary to scratch the surface and explain what psychology means and how it relates to trading. W...(related: Stocks)
Quality Investment Information: Standing Firm In The Face Of Opposition
THERE'S SOMETHING TO BE SAID FOR standing firm in the face of opposition. Interestingly, most of the best stock decisions have come at times when the mainstream is saying precisely the opposite. Predictions like these can be valuable if one is to build an investment strategy around their view of the world.The appraisal by the minority over the past few years that inflation would return (while most of Wall Street was bemoaning DEflation) has proven to be true. As we've pointed out in the past, it can be readily observed in oil prices, real estate, and dozens of other commodities where no source of cheap imports is available.As Steve Forbes remarks in Forbes Magazin...(related: Stocks)
Race Horses And Mutual Funds
For years investors have been taught to lookinto the composition of a mutual funds. In otherwords the "experts" want you to take the time toanalyze the stocks within the mutual fundportfolio, categorize them by industry group andtry to understand the objective of the fundmanager. This is nonsense.When I go the track I look to see what the horsehas been doing for the last several races. Idon't give a hoot what he had for breakfast. AllI want to know is has he been fast? Is there agood chance he will finish in the money in thenext race? I only want to know how he has beenperforming.Most mutual fund managers, except those whofollow index funds, are always trad...(related: Stocks)
Rebalance And Diversify
The stock market has not been very kind to your investments lately. Your broker knows this so you may have received a call from him suggesting it is time to 'rebalance and diversify' your portfolio....(related: Stocks)
Red, Green, Yellow - Or - Stop, Go, Go Very Fast: Which Describes Your Online Trading?
Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals.In the USA, where I live, all the traffic lights are red, yellow, green -red for stop, yellow for slow down or caution and green for go.The lights always change in order from red to yellow to greenand back again to red after a time.How drivers relate to the changing lights is NOT always the same.There are three types of drivers and responses to seeing a green light:Type one drivers believe the light will change to red at any moment. Inanticipation of the change, they begin to slow down far in advance.I call them "Red Lighters."Type two drivers know green means it'...(related: Stocks)
Risk Control
Everything you invest in has risk so you want to do your research before you put your money on the line.For example, when McDonald's opens a new restaurant (please, don't call it a hamburger joint) they will investigate as many of the relevant facts as possible. The demographics of the area - age and income of those within a certain driving distance. Who, where and how much is local competition? The number of cars driving by each day will be counted and will be tallied at one-hour increments. Local labor costs must be figured in. The cost of acquiring the land and construction of a new building or rental of an existing location is estimated. These and many other factors are added up to get an idea of the approximate operating costs and amortization of fixed assets.
Robert Rodriguez Weathers The Stock Market
Robert Rodriguez likes to buy stocks at their lows. When there are not enough stocks hitting new lows, he closes his fund and piles up cash. This is what he has been doing lately. His moves deserve attention for good reasons, his $1.7 billion FPA Capital Fund has averaged an annual total return of more than 17% over the last 20 years, net of sales charge, handily beating all the benchmarks by wide margins.As Robert Rodriguez finds slim pickings in the stock market, his goal has changed to capital preservation. The cash position in his fund has been in steady increase. On March 31, 2005 , it is at 34%. As a reference, between 1984 and 1997, his cash level was rarely above 5% and most of the time it was less than 2%. Now he is sitting on this big trunk of cash, awaiting opportun...(related: Stocks)
Roller Coaster
I love roller coasters. The steeper the better. High and fast and curvy. Yahoo! Let's go again. But to get to the drop off point you have a slow grind up.Kinda reminds me of the stock market for the past 3 years. From 1982 to 2000 it was 18 years of up, up and away with very little down. From 2000 it was over the edg...(related: Stocks)
Seecrets On Investment: Tired Of Making Huge Losses In The Stock Market ? Part 2
Fundamental analysis.Fundamentals analysis says the best way to predict the future trends of a stock is to understand the financial figures of the underlying company. The fundam...(related: Stocks)
Selection Vs Direction
As I have said many times before in this column it really doesn't make any difference what you buy ? stocks, funds or indexes - it takes smarts to know when to sell. Direction of the general market is more important than selec...(related: Stocks)
Selling Strategies - Setting A Stop Loss
Sometimes the best way of lowering exposure to risk is not to invest at all! However, when we make the decision to jump into the muddy waters of the stock market, its always a good idea to have a life jacket ready, just in case.We all have stories of that "must have" "can't lose" stock that looking back, we didn't really need to buy, and it definitely lost. So, how to best protect yourself when the markets disagree with your due diligence? Trailing stop loss.Its important to understand the psychology of investing. When we make money, there is instant euphoria. When we start to lose money, there is a sudden "deer caught in the headlights" type of emotion, which makes us unable...(related: Stocks)
Selling
The stock market has been going up for more than 7 months and many investors who held on through the big crash of 2000 are seeing their portfolios get back some of what had disappeared. Is now the time to sell those equities that are 'even' with what you paid for them? No.The reason I say "no" is because that is a guess and to be a successful investor you don't want to be guessing. That is a sure way to go broke. Then what is a better way? When you talk with a broker he never ...(related: Stocks)
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 stil...(related: Stocks)
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Catnip Of The Stock Market
I have watched my cat play with a bag of catnip. At first he is having fun and slowly he becomes drunk with pleasure and then finally he becomes so tipsy he falls over to sleep it off. The pleasure part is great, but I am not sure if he awakes without a hangover.Rocket (that's his name) reminds me of a one of those people who buy a stock and hold it. At first while it is going up there is great pleasure and then euphoria until they know they are market geniuses. That's the drunken stage. Finally when the market turns against them they fall over not having enough sense to quit (sell) and later when realization returns they have a huge hangover (called hindsight) - and no money.Can these 4-footed animals teach us 2-footed beasts anything? Can we be smart enou...(related: Stocks)
Mutual Fund Commissions
You have heard about a particular mutualfund from a friend, saw it advertised on TV or readabout it in some publication thought it would bea good buy. Next you call your broker to get hisadvice before you buy because he is an expertand is there to help you make money.<...(related: Stocks)
Kiss Formula
There are formulas for just about everything,but it has been shown that the simpler theformula or method of doing a particular taskthe better it works. It has evolved down toKISS ? Keep It Simple Stupid.This also applies to trading in the stockmarket. There are literally hundreds offormulas, both technical and fundamental thatare easily available to investors. Each ...(related: Stocks)
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