Categoria: English

Men aren’t the only ones looking for a cure for hair loss. Some women are also affected. One solution is delving into the Internet for answers. Cyberspace will provide you with a number of solutions to this confidence-breaking problem. You can even sift through a variety of reviews posted by individuals who have tried specific products.

Depending on what you’re willing to spend, there is surely a cure for hair loss suitable to you. I recall when my older brother began losing his dew toward the end of high school. I felt awkward about this I must admit. Why do some guys start losing their hair at such a tender age? Much actually depends on genetics and stress. I’m guessing it was stress in this case since my mother’s father has a full head of hair.

If you watch television, then you’ve most likely spotted a hair loss commercial or two. Those sometimes quirky, yet cheesy ads don’t offer much solace when we start going bald up top or the forehead starts to expand. Luckily there are quality solutions at hand. The first step you should take concerning a cure for hair loss is consulting a family doctor or possibly a trichologist. He or she will be able to present you with some decent options.

The good news is many of these products are effective, but not so expensive these days. You can get your hair back. You just need to exhaust your resources in order to pinpoint that perfect cure for hair loss.

This certainly is the simplest choice, but it doesn’t have to be your only option. You can find an effective cure for hair loss if you do your homework. In the cosmetically advanced world we currently reside in, there’s no reason why you have to take your hair loss like a man.

Are you in desperate search of a cure for hair loss? Many men across the world are going through a daily struggle with hair loss. The inevitable affliction sadly becomes a reality for many of us. Although most men do not prefer a bald scalp, some are taking this route and avoiding the struggle altogether.

This can be helpful in your search for the right and ideal cure for hair loss. You’ve simply got to love the Internet. If you discover an over-the-counter cure for hair loss, you can likely pick it up at any corner drug store.

A few decades ago, research into the medical benefits of marijuana was common, and was funded by both private and public grants. Almost every major university had some program underway for studying the subject. But as government began a more aggressive approach to regulating or prohibiting drug use, marijuana research fell by the wayside. Many of the same studies became illegal, and those found to be doing such research faced harsh penalties, including extensive jail time.

But during recent years, scientists and medical doctors – as well as their own patients and groups dedicated to legalizing marijuana for medical use – have made headway, and now marijuana use is officially sanctioned in many jurisdictions. In places like California, for example, it is possible to obtain prescriptions to use it for medical purposes. Many who use this medicinal pot claim that it works well for treatment of chronic pain, treatment of glaucoma, and other maladies. Because of the increase in popularity of marijuana as a medical drug, many companies are hoping to profit from this drug, by growing, distributing, or otherwise providing marijuana to consumers who need it as a prescription medication.

The global healthcare company Bayer – known mostly for its household name aspirin products – for example, recently signed licensing agreements with a small biotech company in the United Kingdom that specializes in efficient deliver of the active ingredient in marijuana. By providing this active chemical component in an aerosol spray, the company hopes to attract those users who are concerned about the bad health effects of smoking pot. Other mega corporations are experimenting with ways to provide medical marijuana on a large scale. If the drug ever becomes legal, they want to be ready to capitalize on the new market and get the jump on their potential competition.

By buying stock in companies that are positioned to benefit from the future of medical marijuana, you can get in on the ground floor of any potential breakthrough in this biotech and healthcare sector. But because the drugs are not yet profitable – at least to those selling them legally – many investors who put money into backing companies that are primarily in the marijuana business may not see earnings for many years, if ever.

A safer bet is to buy into companies that are already profitable by selling prescription medicines. If marijuana research convinces legislators to allow it to be sold like ordinary medicine, these companies will surely get a piece of the action. They may get their market share of the business by packaging and distributing it, by coming up with new medicines based on it or by growing the raw product and converting it into usable prescription medicine. But in the meantime, if you have invested in these companies in order to take advantage of the profits that might come from marijuana, you don’t have to simply sit and wait for the future. By investing in solid, profitable companies, you will benefit immediately. And if the future is bright for medical pot, you’ll be positioned to take full advantage of the new and revolutionary products.

SIX STEPS and the IRREFUTABLE LAWS of the MARKET Every Investor and Trader MUST KNOW to Succeed

Step 1:

A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders’ information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.

Step 2:

Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.

Step 3:

A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.

Step 4:

Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.

Step 5:

A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called “gurus” start to tout the market.

Step 6:

As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.

The finale: The move ends, the market falls, and investors lose money.

When potential new investors are asked what they fear the most the answer is emphatically the worry of a stock market crash but it is only a worry if you are on the wrong side of the investment. Read on to find out why you should buy in a stock market crash.

Certainly if you are sitting with a nice portfolio and suddenly there is market crash you are going to feel the effects. But it’s a time with much potential which is why you should buy in a stock market crash. What a great time to add to your portfolio and benefit over the long haul. The modern day stock market crashes rebounds much quicker than the crash of 1929 which is another reason why you should buy in a stock market crash.

The crash of 1987 was a result of overvalued stock and a lack of liquidity. The crash of 2000 was the result of overvalued stock and corporate corruption. Many investors made themselves into millionaires during both of these crashes which is why you should buy in a stock market crash.

You might be surprised to find out that a stock market crash actually begins years before the actual crash. Prior to a crash there is a bull market with everything booming but at the end of every bull market is a bear market where things take a turn for the worst. That’s why you should buy in a stock market crash and then hold until it cycle back to a bull market.

Sometimes the market crashes because of a specific political or economic situation but generally a crash is panic generated by investors with no underlying reason. Smart investors get the checkbook out and start spending for you will definitely seek some nice financial rewards. It’s the reason why you should buy in a stock market crash.

During a stock market crash many loose big but there are also many excellent stock buys to be found. It’s a great time to have some extra cash kicking around even if it just a couple of hundred dollars. Now you know why you should buy in a stock market crash – the rest is up to you – just be ready for that next crash because it will come.

Now that you know why you should buy in a stock market crash you just need to wait for the crash.

It’s important that you understand the impact that a bear market has on your capital. The give and take of your investment capital is not equal. If you placed $100 into an investment and it declined 50% to $50, what is the rate of return you would need to earn back your original investment of $100?

Once you lose money, it takes a much greater return on the funds you have left to recapture your original investment. In this case, you would need a 100% gain on the remaining $50 to recapture your original $100 investment.

Looking at historical bear markets in the United States, we can conclude that the time to recovery from a bear market can take between six months and twenty five years! Declines in portfolio value have ranged from 20% to 86.7%! Not a good scenario for buy and hold investors. This is why you would be better off financially to never lose money in any one year and to only achieve half of the market’s returns in the positive years. Let us explain how this is possible. If you never lost money in the down market years, you would only need to capture 38.33% of the gains in the positive market years to equal a buy-and-hold position in the Nasdaq 100 index. More realistically, if your losses in the down market years were half the Nasdaq’s losses, you would only need to capture 63.37% of the Nasdaq’s gains in the positive market years to equal a buy-and-hold position.

The point we are making is that you don’t need to equal or outperform the performance of the market in the positive market years if you protect your capital in the down market years. Protecting your capital in the down market years has an exponential effect on growing your capital over time.

The objective of any stock market timing strategy should be to reduce risk and maximize returns – with risk reduction being the most important factor. All other things being equal, you want to invest in the least volatile, highest reward, lowest risk strategy possible.

You may be reading this today because you are tired of giving all of your own assets, or your client’s assets, away to a bear market. You may even be in the position where your retirement has been diminished to the point of having to change your retirement plans.

Whatever the reason, there are better ways to grow and protect your assets than the buy and hold (buy and hope) myth promoted by Wall Street.

Stock trading has numerous benefits as a viable part time occupation.

In contrast to a second job, there are no special qualifications to begin. The stock market doesn’t care about your level of success, education, ethnic origin or any personal characteristics. Complex employers, office politics or difficult employees do not play a part in trading. Additionally you have the freedom to trade from any location. If you follow a few simple rules you can run your business on your own terms.

The most important factor is to be clear about why you want to trade stocks. What do you hope to gain financially from learning to trade?

Are you looking to:

1. Create an enhanced lifestyle with supplemental income?

2. Replace a full time income with a passive income stream?

3. Become independently wealthy by creating a financial base independent of other income sources?

What would being a successful trader mean you? Imagine yourself making successful trades and gaining financially. Think about what it would feel like to have extra money in your bank account and to achieve your targets. With a clear picture of what you want and how that would feel you will be able to remain focused and motivated.

Your first task.

Your first task is to put one primary goal for your trading plan in writing. Additional goals you set can then support your primary plan.

Know Yourself

As well as learning to trade stocks it is essential that you understand yow you react under stress. Being aware of your own behaviour patterns and common causes of and reactions to stress when trading will help you to master stock trading.

The reason that many people lose money in the stock market is because they lack the proper knowledge base. Independent of trading styles there is one thing common to all successful traders; the use of a tested and proven system.

In learing to trade you must be willing to let go of pre-formulated ideas and start fresh, develop new successful habits, and the discipline necessary to trade successfully over time.

Are you willing to do this?

Successful stock market trading eludes many people because they don’t have contact with an experienced, successful trader or trading system that actually works. Going it alone can be potentially expensive when learning by trial and error. Investing in a solid education and taking advantage of the insights and experience of successful trader makes a lot of sense when learning to trade successfully.

As small investors look for ways to ensure a good return on their money, land sales are increasing in popularity. Profits, whilst not guaranteed, are often better than those from the stock market, for several reasons:

Less risk, more profit

Whilst some investors have a significant investment in the stock market, often with a comprehensive, well-managed portfolio, for most smaller investors, their experience of the market is limited to one or two companies and they are therefore more open to stock market fluctuations and risks. Company share prices can be affected by many external factors, often beyond the company’s control and, unless you are watching the market carefully day by day, you usually have to hold onto your shares for many years in order to turn a good profit.

By contrast, if you select the right land, or take the advice of a reliable land agent, you can realise potentially fantastic profits in a much shorter space of time. This is because the land that’s normally made available to smaller investors has been carefully chosen. Big land investors buy and then bank land that they think will be ear-marked for development in the future, and then either hold onto it, or parcel it up and sell it to private investors, who reap the benefits if planning permission is granted at a later date.

No maintenance required

Once you’ve bought your piece of land, you own it outright and can sell it whenever you choose. You don’t need to maintain it as you would a property and you don’t need to follow its fortunes day in, day out, to find out whether you’re making any money. If you need to raise money, you can sell your land quickly, whereas if your shares are at a low price, you won’t be able to make enough cash.

The best of both worlds

If you have thought of investing in land, but don’t want to get out of the stock market completely, then just broaden your portfolio by reducing your shareholdings and investing in land as well. You get the best of both worlds, and the chance to make a very health profit if you choose the land wisely.

Forex, the Foreign Exchange Market, is a worldwide market for buying and selling foreign currencies. The major currencies that are traded include the U.S. Dollar (USD), Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), Japanese Yen (JPY), and the Swiss Franc (CHF). The purpose of this article is not to go into the details of how Forex works, but to compare the benefits of trading in the Forex market versus trading the Equity (American stocks) or Futures markets (Commodities).

The Forex market is the largest market in the world with over 2 trillion dollars traded every day. This compares to the 200 billion dollars traded daily in the Equity and Futures market each. Because of this, the Forex market benefits from fairer prices, price stability, and better trade execution.

Forex has the advantage of being open 24 hours a day. The Forex market opens on Sunday afternoon and remains open until it closes on Friday afternoon. The Equity and Futures markets are only open Monday through Friday 8:30 a.m. to 5:00 p.m. Eastern Standard Time. This gives Forex traders the opportunity to trade around their personal schedule. Also, liquidity in the Equity and Futures markets are reduced after regular trading hours.

When trading Forex, you will not incur the commissions or transaction fees that exist in the Equity and Futures markets. You pay a spread on the currency pair you are trading and costs are very low, especially when compared to the other markets.

Investment leverage in the Forex market can be as high as a 200:1 margin. In the Equity and Futures markets your average margin is 4:1. This means that you can control $10,000 worth of currency with only a 50-dollar margin.

In the Equity and Futures markets, investors are expected to fund several thousand dollars to open a trading account. In the Forex market, you can open a mini account for only 300 dollars and begin trading.

In the Equity market, short selling is very risky and comes with limitations. In the Forex market, you are able to buy long or sell short any currency pair with no limitations or difference in risk.

As an investor in the Forex market, you are able to concentrate on only a few major currencies. There are seven major currencies yielding four major currency pairs that most Forex investors concentrate on. Whereas in the Equity market, investors have over 40,000 stocks to choose from when contemplating where to invest their money.

There are many factors to consider when deciding on which market you want to spend your time and money. The Forex market provides many benefits over the other major investment markets that will allow you, the investor, to make larger profits, take less risk, and spend more time with your personal life and less time investing.

Buying on margin means that you are buying your stocks with borrowed money.

If you are buying stocks outright, you pay $5,000 for 100 shares of a stock that costs $50 a share. They are yours. You’ve paid for them free and clear.

But when you buy on margin, you are borrowing the money to purchase the stock. For example, you don’t have $5,000 for those 100 shares. A brokerage firm could lend you up to 50% of that in order to purchase the stock. All you need is $2,500 to buy the 100 shares of stock.

Most brokerage firms set a minimum amount of equity at $2,000. This means that you have to put in at least $2,000 for the purchase of stocks.

In return for the loan, you pay interest. The brokerage is making money on your loan. They will also hold your stock as the collateral against the loan. If you default, they will take the stock. They have very little risk in the deal.

One way to think of buying on margin is that it is often comparable to buying a home with a mortgage. You are taking out the loan in the hopes that the value will go up and you will make money. You are in control of twice the amount of shares. All you have to see is the additional profit exceed the interest you have paid the brokerage.

However, there are risks to buying stock on margin. The price of your stock could always go down. By law, the brokerage will not be allowed to let the value of the collateral (the price of your stock) go down below a certain percentage of the loan value. If the stock drops below that set amount, the brokerage will issue a margin call on your stock.

The margin call means that you will have to pay the brokerage the amount of money necessary to bring the brokerage firms risk down to the allowed level. If you don’t have the money, your stock will be sold to pay off the loan. If there is any money left, you will be sent it. In most cases, there is little of your original investment remaining after the stock is sold.

Buying on margin could mean a huge return. But there is the risk that you could lose your original investment. As with any stock purchase there are risks, but when you are using borrowed money, the risk is increased.

Buying on margin is usually not a good idea for the beginner or normal, every day investor. It is something that sophisticated investors even have issues with. The risk can be high. Make sure that you understand all of the possible scenarios that could happen, good and bad.

A bull market is when the economy is doing fabulous, jobs are easy to find, and the gross domestic product is growing. Stock are going up and everything is peachy! That why a bull run in the stock market is the time to take profits higher. A bull market makes picking stocks very easy with everything is on the rise you just can’t go wrong.

But remember that bull market cannot last a lifetime which is why a bull run in the stock market is the time to take profits higher. Eventually it will turn around and suddenly you will be in a bear market. A bull market is forging ahead strongly can become dangerous with overvalued stock.

Bull markets are about optimism which is why a bull run in the stock market is the time to take profits higher. It’s an exciting time for an investor with rising indexes stock values go up which is why a bull run in the stock market is the time to take profits to a new level. Practice will make you a great player in no time.

If you aren’t familiar with options it’s a way for a small investment to become big. When you purchase a call option you buy the right to purchase the stock from the call seller at a named price and by a specified date.

On a bull run you never actually buy the stock but instead sell it to another investor for more than you paid for it before the expiration. That’s why a bull run in the stock market is the time to take profits to a new level.

You can sell your call option to anyone who is wants to exercise it. You can then sell your call for at least $20 more right now and if you hang on in the bull market you are likely to be able to get even more which is why a bull run in the stock market is the time to take profits higher.

That’s just one example of why a bull run in the stock market is the time to take profits to a new level. You can quickly see how easy it is. Only one word of advice – always have your exit strategy planned.

Now that you know why a bull run in the stock market is the time to take profits home what are you waiting for?

There are a lot of articles that talk about how to get in to the stock market. Which is great. A lot of people want to get in to the stock market but don’t know where to start. However once all of these people get in to the market, they need to know how to get out. After all the money you make on the stock is not made when you get in to the market. The money you make on the stock market is made when you get out of the market that is when you sell your stocks. Hopefully you will sell your stocks for a profit and that leaves you with a profit.

So how to get out, while staying on top? Well you need to work with your own stops and limits. What the heck?

· You need work with stops and limits, which means that you have a set of stop points and limits. So before you start you need to know where and when you are going to stop.

· It’s best to set your stops and limits early on, because once your emotions get involved. So for instance if you own a thousand shares in a company that is currently at $2.5 per share. You get excited because the price is steadily rising by a few cents every day. Something tells you to sell when they get to $3. Once it gets to $2.9 you decide to wait it out. Sure enough the stock rises to $3.50 over the next while and you decide to keep waiting it out. This is where it gets tricky, because as we all know what goes up must go down. So waiting it out can end up costing 50 cents a share when it drops and imagine the profit you would have made on your original buy price!

· Never expect to make a bundle in a week. You will have good weeks and of course you will have bad weeks. If you implement a range of stops and limits those bad weeks a little easier, or at least not completely wiped out.

· Never partake in revenge trading. Revenge trading means that once you lose money you start investing to get your money back. But this rarely works because if the market has just taken a dip it’s not a great time to get a whole range of new stocks. Wait till things have calmed down a bit.

· Most brokerage firms have an automated stop system that will immediately sell or put your stocks out there the minute they reach your stop point. This means that you won’t have the chance to renege on your stop point.

· Always sell and buy when you feel comfortable, never put yourself under the pressure of too many tips and trade gossip.

· You need to make sure that you never spend more in the stock market than you can live without. If you do take a dive you will find it very hard to recover if you have nothing.

· Periodically speak with an advisor and look over your portfolio. Don’t keep stocks that aren’t or do not look like they will growth and improve.

Penny Stocks can be a very effective way to provide you with a secondary income. They can be used to create passive income because they do not require you to be constantly watching over them. The problem that most people have when it comes to stocks is – not knowing the right time to sell.

Penny Stocks can rise very quickly but they can also fall quickly too. The reason that most investors hold onto a stock is because the fail to separate their emotions from their actions.

All of your penny stocks buying and selling should, of course, be based on sound research both of the market and the companies’ recent history. How the company is doing in terms of profitability, whether they are just about to, or have just announced profits, losses or new patents, discoveries and products, can all affect your decision on whether, or not, to buy.

Knowing the right time to sell your penny stocks however can sometimes seem, as much an art as a science, although getting it wrong can be fatal. Many people seem to put all their research efforts into knowing what penny stocks to buy and when to buy them.

Investors seem to forget about researching to sell stocks. Instead, they let their emotions take control and sell at the wrong time. Investors selling at the “wrong time” fall into two categories. These categories are, The Runners and The Sitters.

The Runners like to take profit way too early. They see their Penny Stocks rise a little and sell because they don’t want to “risk too much”. I’ve seen it time and time again; these people set out to earn a 25% Return on Investment and end up taking profit at 1%. Someone who takes profit twice at 25% earns a lot more than someone who takes profit twice at 1%. Usually, as soon as they sell a penny stock, it will rise even further and they’ll be wondering why they sold so early.

The Sitters are the heavily emotionally involved in their penny stocks. They are gamblers at heart and just do not want to let go of a losing position because “it could bounce back any day now”. When they do let go of their Penny Stocks – there is virtually nothing left. The sitters like to sit on a losing position. They like buying but dislike selling.

Do you want to be a Runner or a Sitter? Well, I hope you are neither. You want to be a winner. A winner will separate their emotions from their investment thinking and will also research when buying and also when selling. They will buy and they are not afraid of selling.

There is great deal of profit to be made from trading in Penny Stocks. But you have to know not only what to buy but also how long to keep it and when the best time to sell. The answer, as with most things in the world of finance, is good information and research. But that doesn’t end when you buy. Find out why your penny stocks are rising and this will put you in a much better position to know when to sell.

It is only fair to emphasize that on the worst day the Stock Exchange ever saw, it was still just a market place, an arena where buyer and seller could transact their business.

The brokerage community, composed as it was of professionals, might have been expected to cast a sterner, more skeptical eye on the weakening economic conditions so falsely reflected in the market’s soaring prices, but there were few enough, in truth, who smelled danger in the spring air of 1929. Euphoria was endemic. The Exchange was no giddier than its customers.

It is worth recalling briefly some of the events of those turbulent days, for in violent and exaggerated form the Crash spelled out the consequences of ignoring the basic principles of sensible investment. This is not to say that only foolish people lost money in 1929. Or even that wise ones could have read all the signs correctly at a time when the mirage of endless prosperity had pixilated much of the nation. Nor should that long-ago nightmare stand as a warning against investment today.

But in its stark outlines can be read many of the hard lessons every investor should know by heart.
The Crash, as every economist and social historian who sifted the ashes was quick to tell us, was a classic case of the wish transcending reality. First, of course, came the Boom. After a few unsettled years following World War I, the nation had straightened out economically and entered a period of joyful prosperity.

The automobile industry, producer of the new era’s most glittering symbol, was thriving. This was good news for the vast network of sub-contractors and suppliers of rubber, glass, and steel, of batteries, spark plugs, brake linings, and gasoline. Construction of office buildings, homes, and highways was increasing, and this fattened the producers of lumber, cement, electrical fixtures, and home appliances. Everywhere more power was needed.

The icebox was giving way to the electric refrigerator, the washtub to the washing machine. And more and more homes had backyard aerials enabling them to tune in on the wonderful world of radio. The utilities grew, merged, pyramided into enormous holding companies. The movies were springing into full bloom. Everywhere there was money and progress.

The stock market responded vigorously.

Beginning in 1924, prices moved steadily upward. Each year was better than the last. An impressive array of important people was being quoted to the effect that it now seemed clear the American people had found the secret of capitalistic perpetual motion. The words varied but the message was the same: a wise Providence had seen fit to endow us bountifully with this world’s goods. All that was required to achieve an endless prosperity was to have faith in America and keep moving. We were on the glory road.

Looking back, considering the bankers, tycoons, government executives, and assorted wizards who spoke—and the rest of us who listened, eager to believe—it all seems preposterous, vainglorious and naive. But in the Twenties it was hard to be pessimistic, hard even to be realistic. For America was indeed growing rich, and the end appeared to be never.

Actually, as we now know, the signs and portents of trouble ahead showed themselves early and were there for all to see. In 1927 it was well-known that speculation in securities was increasing. Loans to brokers and dealers inched upward,reaching a total of $3.7 billion, a sure indication that much—perhaps too much—trading was being conducted on margin.

Margin buying was then—and still is—common practice. The customer pays only part of the purchase price of his securities and borrows the balance from his broker, using the stock he buys as collateral for the loan. In a rising market, a buyer might put up $2,500 to buy 100 shares at 50, wait for a ten-point profit, sell, pay off his loan, and be $1,000 ahead—twice the profit he would have made buying outright only the 50 shares his original $2,500 would command. Trouble looms, however, if the stock should drop to the point where its value threatens to be insufficient to cover the loan.

Then the broker calls for more “margin”—funds to reduce the loan to a level equivalent to the new, lower value of the stock or, if the customer is unable to meet the call, sells him out.

When does the total of brokers’ loans—money loaned to them to loan to their customers—get too high? The Twenties did not know, but they were not frightened. President Coolidge did not think them too high. Treasury Secretary Mellon didn’t, either. And as long as the market soared upward, as though inflated with helium, they were right.

Apparently few paused to ponder the consequences of a general market drop and what it might do to the shoestring speculators.

People’s eyes were indeed lifted to the stars, for little attention was paid to events underfoot. By early 1928, business was exhibiting symptoms of distress. Overproduction and overexpansion were accompanied by serious unemployment. And the market reacted. Time and again, there were short but severe jolts indicating that all was not well, that the great bull market was not impervious, that what went up had a very good chance of coming down.

Still, it was also true that the market rebounded with astonishing vigor after these shocks. Following the election of President Hoover, the upward march resumed. The keener analysts were now stating firmly and unequivocally that the market level was dangerously high, but their warnings were lost in the anvil chorus of optimism that still pervaded Wall Street and its swelling army of customers. Playing the market was now everyone’s game.

The end of 1928 and the early months of 1929 brought further tremors, but once more the market rallied, and by midsummer stocks had climbed to undreamed-of peaks, and fears receded.
Brokers’ loans were over the $6 billion mark and, according to one post-mortem analysis, some 300 million shares of stock probably were being held on margin.

But why worry? Values were so astronomical, as September came, that there seemed no reason they should not go higher. Faulty logic? Of course. Yet who can blame the man who bought Montgomery Ward at 150 and saw it go to 450 in a year and a half for feeling that another 50 points was in prospect?

It is unfortunate that prices did not keep rising.
Knowing when to sell is always difficult and in the months running up to the crash it would have been very difficult to tell that a crash was just around the corner.

Now we have experience of the past we should be more cautious.
Good software programmes can give us some clues for the stock market and Forex in particular.

The phrase stock market crash brings to mind images of speeding ticker tape machines and panic on the trading floor. The common perception is that stock market crashes are random and unpredictable phenomenon. There is, however, a pattern to the markets larger fluctuations. The market crash is a familiar term but an unfamiliar concept.

To understand what happens in the market when a crash occurs, we first need to look to the period that precedes a crash. The cycle begins at a time when the stock market is weak and people are generally pessimistic about the financial future of themselves and country. The bear market has caused most people to sell many stocks in order to save some of their investment. This is the point where the smart investors can pick up undervalued stock at bargain prices. These smart investors know that the market will be turning in the near future and they can resell these stocks for a much higher price. This accumulation of undervalued stock causes the market to start to rise. The rising stocks will attract the attention of mutual funds, and as the mutual funds invest in the stock, billions of dollars are reintroduced to the market place. Mutual fund investments cause the market to gain even more as do investments by institutional investors. At this point, the market has begun to stabilize and stocks are no longer at bargain prices. Stock prices most likely reflect the intrinsic value of the stocks. Those who invested early have large profits.

The average investor though may still be skeptical about the stock market, given the recent bear market. As the stock prices continue to stabilize and more institutional investors get re- involved in the stock market, the individual investors begin to notice. The individual investors began buying stocks the market is flooded with capital since the individual investors make up the cast majority of total investors in the market.

This bull market exists as long as the market is on the rise and all stock involved are all gaining in value. Bull markets make everyone happy. Investors and companies alike are making money and enjoying it. There is a kind of euphoria in the country, and a feeling that things will only continue to go up from here.

At the peak of a bull market, many companies go public or make stock available for purchase to the public. An IPO is the term used when a company goes public. The reason IPOs show up when the market is in a bull period is because companies want to benefit from investor confidence. When individual investors are more optimistic, the company can gain the highest possible stock price. Individual investors often buy into IPOs with dollar signs in their eyes and anticipating instant riches from getting in on the ground floor of a companys stock history. Investing in IPOs is traditionally the method by that most small investors make their money. The bull market is further fueled and stocks begin doubling and tripling in value.

At this point, those smart investors who purchased the undervalued stock at the beginning of the cycle are sitting in a prime position. At the perceived top of the bull market these investors can sell their now overvalued stocks before the prices start to drop. In the height of a bull market, there are often incidents of widespread greed. Corporate scandals arise, retail investors start to use margin investing to gain more stocks, and irrational purchases are made. The market is perceived to have no end to its growth so people start doing whatever they can to gain more stock with the false expectation that they will be able to sell for profit later.

Once mutual funds and individual investors have fully invested their capital, the market becomes overbought. At this point the market can only go down. The speed of the downward trend is determined by the amount of negative news. As there are negative reports about stocks losing value, this causes more investors to sell and the cycle expands exponentially. The market always falls quicker than it has risen. If everyone tries to exit at the same time, there are no buyers for the stocks. If there is enough of a lack of buyers, the market can crash entirely. The capitulation of the market occurs when a massive amount of individual investors leave and the market bottoms out.

STOP trying to create the perfect trading system. There isn’t one.

Phew..what a relief. Stop spending all those hours creating more and more trading rules and realize this:

Money creation in the stock market is made from CONCENTRATION. That’s right. Trading the very best stocks atthe right time with enough capital to make a big difference.

You must go from wealth CREATION to wealth maintance in this game. Unless you plan on “investing” for the next 25+ years and building wealth slowly.. this is my plan of how you can make millions in the stock market:

In Darvas’s book “How I Made $2 Million…”

How many looked at his position sizing? In his early trades Darvas only trade 1 or 2 stocks at any one time on MARGIN! Only when he got upto over $500,000 did he start diversifying a little. Most people overlook these facts.

MY Momentum Stock PLAN:

CONCENTRATION BUILDS WEALTH DIVERSIFICATION MAINTAINS WEALTH

END GOAL:

$2 MILLION+ ACCOUNT MAKING 20-30% P.A

Start with:
$50,000 Trade 2 stocks with half capital in each.

RISK Per TRADE = 5%

When at $100,000 Trade 3 stocks with 1/3 capital in each.

Risk Per Trade = 3%

When at:

$500,000 Trade 5 stocks with 1/5 capital:

Risk Per Trade = 2%

When at $2 Million Trade 8 stocks with 1/8 capital:

Risk Per Trade = 1.25%

You first have to create wealth in order to maintain it. Whilst trading only two stocks at a time may be deemed to “risky” by the “professionals” you must be very selective on the stocks you trade. Quality beats quantity. Especially when you concentrate so much.

This is the only way a small account can break into the big time. You must not only focus your efforts in the early stages but you must also onlytrade the top 0.1% of stocks in the marketand get yourtiming SPOT ON.

Free stock quotes are valuable for looking at your investments and determining whether or not you want to trade in the stock market. There are several free stock quotes online and one of the most popular is Yahoo Finance. This site will allow you to search your stocks to see the growth or decline and determine if you want to buy or sell. Free stock quotes are ideal for the novice investor. They can practice their skills without investing any money until they are comfortable enough to actually invest. Once you decide to invest, though, you will need to get with a broker and there are additional fees associated with trading. However, there are many do it yourself places that only require a small fee and will often have valuable articles and free stock quotes so you can watch your portfolio continually to ensure you have made sound investments.

Before investing in the stock market, you should be aware of the basics of stock trading. This can be learned by doing some research online or by getting a book at your local library. Once you know the basics, you can start looking for individual investments. It is recommended that the novice investor start off with only the amount of money they can afford to lose. There are no guarantees you will earn money and sometimes you will lose it. So, it is important to carefully watch the stock market by looking at free stock quotes each day. You may want to buy or sell your stocks depending on how well the individual stock is doing and what forecasts are for the stock.

Free stock quotes are also great for classes in finance or the stock market. This is ideal for investor clubs, high school classes or college projects. You can either use mock money to track an investment from start to finish without actually putting in money or you can use pooled money to determine which investment you will watch and what you will do with it. This is a great way to have a bit of fun with a group while learning about investments and possibly making a bit of money.

Self-Confidence is an essential starting point for any business venture. This is true even more if the business is trading in the stock market because psychology plays such a major role. Keep reading, this might change your life!

About 10 years ago, I received a copy of the book “Think and Grow Rich!” written by Napoleon Hill. Today, I credit most of my success in business (including trading) to this book.

At first applying some of the principles described in this book appears a bit crazy – for example reading a Self-Confidence formula and a Definite Plan aloud every day. But you really have to look at it with an opened mind and believe me (and many peoples who have made millions) this stuff works:

Here is a brief overview (you really need to get the book):

– First – you must have a burning desire – for a trader this desire should be “to become a consistent winner in the stock market”.

– Second – you have to have a definite goal including the amount you want to make and the date by which you want this money to be in your account.

– Third – You need a definite plan, or what you will do in exchange for this money.

Here is an example of a plan – it is generic enough to be applied to most trading styles. Items specific to your style should be added. Your plan should be read aloud first thing in the morning and right before going to bed.

By December 31st 2006, I will make $200,000 dollars with my trading. In return for this money I will do the following:

– I will follow a trading plan to guide my trading – therefore my job will be one of patience and discipline

– I will plan each trade carefully – I will not jump into trades by fear of missing out

– I will monitor the market’s current picture

– I will monitor the current picture for each industry

– I will manage my trades to protect my capital and my profits

– I will protect my capital through good money management

– I will take responsibility for all my actions.

– I will trade to trade well and for the love of trading, not to trade often and not for the money. The money will come as a result of trading well.

– I will not be influenced by the opinions of others. I will reach my own decisions and follow them.

– I will build the self-trust necessary to operate in an unlimited environment which has no rules.

– I will be rigid in my rules and flexible in my expectations.

-I will never think that taking money from the market is easy and I will never assume that I know enough.

-I will have no particular expectation when I place a trade because I know that anything can happen.

-I will treat trading as a probability game in which I don’t need to know what is going to happen next in order to make money. All I need to know

is that the odds are in my favor before I put a trade

– I believe that I deserve this money. I believe that I will have this money in my possession. My faith is so strong that I can now see this money before my eyes. I can touch it with my hands. It is now awaiting transfer into my account. I am awaiting a plan by which to accumulate this money, and I will follow that plan when it is received.

Read (and reread) this book and apply its principles to your life – and notice the difference in your Self-Confidence.

Watching the numbers roll by on the bottom of your screen during a news cast might seem like nonsense to you. Those numbers are very important to many people because they make their fortune with stocks. They steadfastly watch the stock markets wanting to see how their investment is doing.

To understand the stock market you first need to understand what stocks are. Stocks are the capital raised by a company when they sell shares. Shares are offered through the stock market and the money taken in from those becomes the company’s stocks.

There are several major stock exchanges in the world where shares are traded. Company’s stocks are increased and decreased each day.

One of these stock markets is the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotations. The NASDAQ is a United States based stock market. It’s the world’s first electronic based stock market. It also trades more shares each day than any other stock market which means it has the most impact on stocks.

Another large stock market that is United States based is the Dow Jones Industrial Average. You might hear someone say that the Dow is up or down this is what they are referring to. Many stocks are introduced on the Dow.

Many other countries also have a great impact on stocks. In Europe almost each country has their own stock market this includes Portugal, Germany and Lisbon. The people living and working there follow invest in the stock market there and just like in North America the stocks rise and fall.

The people who handle the buying and trading are called stock brokers. Their job is to sell and trade the shares that their clients request. It’s a demanding and rewarding job being involved directly in stocks this way. Stock brokers can make a lucrative income and the ones that study the markets and understand all the ups and downs have a definite advantage.

For the everyday person to get involved in stocks they need to do a bit of research. It might be wise if a large amount of money is involved to talk to a stock broker. Their job is related to stocks and no one is better qualified to assist you.

Stock brokers are paid on commission and therefore their drive is to invest in shares that will ultimately turn a profit. Often a stock broker has extensive knowledge with just a few stocks and he concentrates on those. If you decide to invest in a share that a certain stock broker is very well versed in, it might be prudent to have him or her handle your dealings. They can offer the best advice as to when to buy and when to sell.

There are other avenues available for people interested in stocks and that’s the online stock trading companies. Many of these companies allow anyone to sign up and buy and trade their own shares. This can be a great way for someone to be introduced to the world of stocks and with some research and practice they can make themselves a profit.

There are as many different types of stock market investors as there are stocks to invest in. There is no one ‘bad’ type of investor, and there is no group of investors who will do better than the rest of the pack. Each personality type works in a different way. The stock markets need all types of investors to maintain a healthy balance.

Active Investors

These investors sometimes border on fanatics. They read everything on investing, study the stocks, and subscribe to magazines, associations, or newsletters. Their motivation can be to flip stocks and make money fast, or it can be the satisfaction of finding a treasure missed by Wall Street pundits. Whether driven by wealth or ego, this type of investor turns investing into their hobby and even passion.

These investors learn how to read financial statements, market predictions, economic analysis reports, and editorials. They learn the names of the world’s best economists, and are familiar with the London and New York Times Newspapers.

These investors prefer stocks that are rising and promise to be a forerunner for future outperformance. They have one focus, accelerating earnings, from a company which has tapped into a new product or innovation that promises to hit the market hard. There are many approaches to picking stocks, based on a number of factors including stock price behavior, markets, and earnings growth.

Passive Investors

These people are often interested in investing their money, but they do not want to spend their weekends studying financial statements, markets, and even weather reports. This type of investor laughs at the good luck mantras and charms used by some investors. They are often happy to put their money in the hands of a broker and walk away.

The passive investor creates a plan, researches stocks, invests, and then patiently waits for a return in the future. A passive investor takes a look at the company’s value, assets, debt, and financial health. They consider market and competition when estimating the company’s opportunity for success. They are not aggressive, or looking for a quick gain.

As long as their looses are not in the high-risk level, they leave their portfolio along. They follow the 10% rule when estimated acceptable loss. Once a stock falls 10% below what they paid, it is time to sell to the bargain hunters.

Bargain Hunter Investor

These investors circle like eagles waiting for the weak and wounded to fall, then they pick up the pieces. Many companies owe their survival in hard times to the bargain hunter. Kmart is one company that pulled through and recovered after Wall Street left it for dead.
The Player

At first glance this person may not seem to have a viable place in the market, but looks can be deceiving. This person wants to roll their money over and trade stocks constantly – that is part of the game. They are only interested in research and learning as long as there is money to play with.

There is a fundamental place for Chaos in the universe. Without Chaos there is no balance. The same applies to the stock market. Whether the player is using cash, or self-direct in their 401K, their main goal is to increase their money quickly, creating a feeding frenzy among some stocks, and then walking away before the market balances itself out.

There is a place for all investors, and while there are winners and losers in the market, the important thing is to pick a comfortable place and don’t let anyone force investors out of their comfort zones.

What is Support and Resistance Levels in Stock Trading?

Support and resistance are specific price areas or price levels which either support prices on declines in up trends or which resist prices on rallies in down trends.

In an up trend, short term and day traders will attempt to buy at support or at levels of support. In a down trend, short term and day traders will attempt to sell at resistance levels or in resistance areas.

If support and resistance levels cannot be determined, then you cannot define concise levels in which to establish entry or exit positions in your specific trade. It is of utmost importance for traders to develop effective strategies and methodologies for calculating support and resistance levels. These levels can be determined with the use of various trading tools like Point and Figure charts, Fibonacci numbers and Gann angles.

Day traders is in a definite advantage when it comes to the use of support and resistance levels, in as much that the day trader’s trade normally end when the trading day is over and if a bad trade or decision was made based on support or resistance levels it will not be repeated in the next trading day.

Determining support and resistance levels are somewhat different for the day trader than the position trader. This is because support and resistance levels for the day trader must be closer to the current market price that they are for the long term or position trader. Markets can only drop so far in one day, and consequently the determination of support and resistance levels by the day trader must be realistic in terms of what can be expected – however this does mean that day traders must be willing to use realistic technical support and resistance levels in order to establish their positions.

The following rule may appear very simple, yet it is enormously effective at isolating support and resistance levels and can be applied profitably in any market:

1. Follow a 3-day moving average of the highs, and a 3-day simple moving average of the lows.

2. Take the 3-day moving average of the highs to act as your resistance level, and the 3-day moving average of the lows to act as your support level.

3. Add a filter by drawing in the support of the lows if the trade has made a 3-day high in say, the last 3 days (you can use four or five days, depending on your trading methodology) This means that you will only draw in the 3-day moving average of the highs if the stock has made a 3-day low in the last three days – this means that you only want to sell when the short term is down.

This is a very simple method of trading stocks and commodities on a daily basis, and if calculated correctly they will work.

Exchanging commodities is a centuries old means of investing, trading, and managing money. It is believed by some historians that variances of the modern commodity exchange have been in existence for nearly 800 years. Exchanges that deal with company stocks are a much more recent development. It has been just over 200 years since the first American stock exchange opened on Chestnut Street in Philadelphia, and 190 years since that exchange moved to lower Manhattan and the New York Stock Exchange rang its first opening bell on Wall Street.

In the years since, the fortunes of American business and American investors have been made and lost countless times on the floors of that exchange, and usually with the help of stock brokers who, as members of the stock exchange, act as agents for buyers or sellers by facilitating transactions in accordance with the law. However, recent years have seen a change in the traditional broker-client relationship, and the advent of the Internet has spawned a new group of investors who eschew the help of brokers and try to make their fortunes trading stocks online.

When you purchase stock you are purchasing a share of ownership in a corporation. In the past, stock brokers acted as the intermediary agent that connected the client to the market. Typically, stock brokers would also be Certified Financial Planners, a qualification that allowed them to provide the client not only with market access, but with financial advice and management of their account.

In exchange for the service of the account and access to the markets the brokerage earned a commission in the form of a flat fee or a percentage of the trade, and those commissions could be quite sizable, especially if you were engaged in frequent trading. The desire to eliminate commissions while still accessing financial markets is the primary reason that so many investors can now be found trading stocks online.

The Internet has allowed investors the option of controlling their own financial direction and decisions. By trading stocks online an investor can avoid a significant portion of the fees and commissions that a traditional brokerage would charge – trades can cost as little as $5 dollars – but those savings come at a price. When trading stocks online through a discount online brokerage, the brokerage is only responsible for executing your trades in the market.

When it comes to advice, research, and account management, you are truly on your own. Therefore, trading stocks online is not something that should be entered into lightly. Successful investors usually have experience, expertise, research tools, and a basic market savvy that allows them to successfully, and profitably, navigate the complicated financial world. Investors who lack those skills are not likely to be good candidates for trading stocks online.

A hot tip on a new stock is usually not a good reason to get into trading stocks online. Experienced investors know that today’s hot tips are often tomorrow’s trash, and it takes more than some quick hits to be a successful online investor. However, if you are an individual with a strong financial background and an understanding of markets then you may be equipped to successfully manage your financial future on your own.

However, if you are not sure of the difference between a market order and a market maker, or ex-dividends and earnings per share, then saving money on commissions and fees probably will not offset the trading losses you are likely to incur. Trading stocks online is not for everyone, but if you want to try your hand then the Internet is the easiest way to access reputable discount online brokers who can provide you with the access you need to control your own financial destiny.

For every investor in the world, there are hundreds of people who think they cannot afford to get into the game. Worried about expensive brokerage fees and the prices of stocks themselves, these people walk away from opportunities to invest and make money that can be phenomenal. Thanks to trading stocks online, this doesn’t have to be the case.

Trading stocks online is a fairly new venture that opens the doors for investing to virtually anyone with an Internet account and a few dollars to play with. With stocks ranging in price from a few pennies all they way up to the thousands, the field for investing online is quite great. Even the smallest of investments can pay off for those who do their homework, too.

Before getting involved in trading stocks online, potential investors should do a few things. They include:

* Investigating sites: There are a lot of places to start trading stocks online. Some of these Internet sites are quite reputable, easy to use and bring to the table very little risk in and of themselves. However, since financial information will be transmitted over the Internet, it’s a good idea for potential investors to do a little research about the sites themselves before choosing one.

Things to consider here include reputation of the company hosting the service, the built in security, the pricing involved in transactions and even the advice available for investors – especially ones new to the game.

* Studying the market: Investing in the stock market, even in a small way does come with its risks. Jumping in without a basic understanding of the market, potential stock buys and the risks involved isn’t recommended. Fortunately, good online sites offer basic lessons about the market and what investors might expect.

* Understanding the site chosen: Once a site is chosen and the market is understood enough to make a buy or two, it’s a good idea for a potential investor to check out the site more closely. Things to look for here are how the site works, what it takes to buy and sell and how to go about getting help if it’s needed.

* Setting a budget: Playing the market is called that for a reason. Since there are no guarantees investments will pay returns, it’s a good idea to set a budget for investments and stick to that. Invest smartly and slowly and don’t commit more than you can safely afford to lose. As you make money, you can invest more if desired.

* Expect mixed results: Since a broker won’t be over your shoulder generally when you’re trading stocks online, it’s a good idea to expect some mixed results at the start. You might have some wins and some loses to face.

Trading stocks online is a great way for almost anyone to get involved in the stock market. With fast results and lower fees, this form of investing has opened a lot of doors for people. Since it’s real money involved, however, it’s a good idea for new investors to take it slowly and do their homework before jumping in.

Imagine you are trying to do car repairs, and the only tool you have is a hammer. Sure, you’ll be able to get some jobs done, but they won’t be done properly and you’ll most likely break something else in the process. Trading stocks online is much like that. There are many ways to trade, but only some of them truly work. Sometimes, investors end up losing money because they didn’t take the time to find the proper investment method or tool. Here are some tips that can help you to trade successfully.

If you want to reduce the risk that comes with holding an investment, you will want to look into the practice known as hedging. One of the best ways to hedge your investments is to take any shares you have in a company and sell them to the company’s opposition.

For stability, you will want to look to investing a pre-arranged amount of money each month into one or more mutual funds. Mutual funds are composed of shares from approximately 10 companies, and often focus on a specific area of the market, such as energy, paper, or currency. Although there is still a risk that you can lose money through your mutual funds, they are much more stable and have a much higher chance of recovery, based on the fact that they center on stocks from more than one company. Be patient if the market takes a downturn; don’t sell your funds or stock immediately. History has shown that if a market goes down, it will also go up.

Another online trading tactic is to look at the stock market and find good, stable companies whose stock has taken a downturn. The way to find them is to look for ones that have dividend yields. Pick several of these companies and invest equal amounts of money in buying stocks from each of them. Although there is risk involved with this method, the history and stability of these companies is often enough to pull them through the slump they may be experiencing. And when their stocks begin to rise in value, you will benefit from this wise trading investment.

The AllSportsMarket is a financial exchange using a professional trading platform to buy and sell issues of sports teams. It is just like the stock market, but with sports teams! You compete with other players for real money. Money is earned from the ups and downs of the prices of teams and from dividends paid when teams win. The AllSportsMarket is 24 hours, 365 days a year – you can trade at anytime and as often as you would like.

You can fund an account for as little as $25 or try the “no catch guest entry” to check out the user interface. Unlike the stock market, where you need a hefty upfront amount to get started, and gambling where you can lose all your money at once, you can start off with a minuscule amount of money and not lose it all in one shot.

Buy Low and Sell High

Just like the stock market, you make money off of the ups and downs of the underlying security. In the case of the AllSportsMarket, the security is the issue of the team. Buying shares with the intention of selling them later at a higher price to make a profit is called long. In ASM, you make the difference minus the total commissions you pay.

This is the simplest way to make your gains, but it does take some timing and patience. The big question is what do you consider high low? A good thing to look at is the prices of the rest of the teams in the league. You should expect that the better teams will have higher prices, but there will be the occasional discrepancies for one reason or another. With that said, you have a range of prices and you should look to buy good teams that are in the low price range. Do as much research as possible to find out what teams are being undervalued.

Dividends

Another way to make money (and one of the keys to success in ASM) is dividend payouts. Every game your team wins, the dividend pot grows. You are paid dividends based on league specific pay outs and payout schedules.

The dividend strategy is an approach to make gains from dividend payouts. This is where you buy shares of a team specifically to capture the dividend payout. There are different dividend payout schedules depending on the league you own shares in. The teams that have higher dividend reserves pay higher dividends. Dividend reserves change from game-to-game depending on the leagues specific rules of dividend transfers for the winner and loser of the game. In the trading platform they list the highest dividend reserves (see the figure on the right).

Dividends are great in the sense that they reward for choosing winning teams. For example, over the course of a long season, the Detroit Pistons will likely win more than they lose, and will therefore pay out a good amount of dividends.

You need to be careful when buying shares solely for dividends – the share price may go down leaving you with a net loss even after you capture the dividend.

Selling Short

You can also make money selling short. This involves borrowing a share and selling it expecting the share to decline in price so you can buy it back at a lower price. Selling short can be more risky due the fact that you can lose more than what you put in since the price has an unlimited upside potential. When you long, the stock can only go as low as $0.00 and you only lose as much as you put in. When you short you could lose what you put in and more.

If you’re playing in the stock market good for you – there is some potential for you to make some excellent profits. But before you get too wrapped up with investor advice here are three reasons not to trust stock market investment advice.

Here is one of three reasons not to trust stock market investment advice. If there is only one thing you remember about investing it is that a broker’s job is to have you buying up as many trades as possible because that’s how your broker get’s paid. Your job is not to make the broker money. They are not trained in analyzing the market only in completing a trade.

Reason two of three reasons not to trust stock market investment advice is to remember that online advisors have their own agenda and don’t take the free advice offered by the media either. Many times these financial institutes or programs have their own agenda on their mind driven by a lust for more money.

If you listen to these self proclaimed experts you will be in the poor house and know exactly why we gave you these three reasons not to trust stock market investment advice. Real world trade exports won’t be guaranteeing you will make money on a certain stock because they have no crystal ball.

Of all three reasons not to trust stock market investment advice here’s the best one. Online Investor advisors may have no training – You get that email that tells about this investment you can’t live without or you search and find investor XYZ. But who is advisor XYZ? What are his or her credentials? What makes them qualified to give you advice on a certain stock? Are they perhaps working with another motive to benefit them or their company?

There are of course excellent stock advisors but remember these are not the men and women that actually sell you stock. If these three reasons not to trust stock market investment advice haven’t convinced you you’ll learn the hard way.

Your advisor should have a healthy profile where you can see they know what they are talking about. These three reasons not to trust stock market investment advice without having adequate knowledge will set you on the right path.

Again these are only three reasons not to trust stock market investment advice there are plenty of others if you care to look a little deeper. But threes a good place to start.

When buyers and sellers meet to exchange shares of a company, then they do it at the stock exchange. Stock exchanges are virtual or physical market places which offer standardized procedures for stock trading. This is of benefit for both parties, buyers and sellers, because only an efficient and liquid stock market is a secure place to trade shares.

Stock markets play an important role in today’s economy. For a company it’s the best place to raise much money quickly. Companies sell shares to have more money for investments. They can achieve their business goals faster. Private investors can buy shares to become a partial owner of the company with voting rights at the shareholder meeting and the right of shared profits. For an investor it’s the only way to become part of a business and enjoy the chances for high profits without founding an own company. Stocks also limit the risks and liability. In the worst case, you loose the purchase price when the shares go worthless.

There are various different stock exchanges. The most important ones in the United States are the New York Stock Exchange (NYSE) and the NASDAQ. The NYSE is a physical market place while the NASDAQ is a virtual exchange. The NYSE, also known as the “Wall Street”, executes the orders to buy or sell shares through so called specialists in an “open outcry” system. Each specialist is responsible for a specific company. When an order to buy or sell stocks comes in then the specialist tries to match orders to receive an execution. Since all orders for the same stock come to the same specialist, he usually has enough shares to match the orders.

The NASDAQ works different because there is no specialist. There are several market makers per stock who are obligated to provide a current bid and ask price at all times. There are also electronic communication networks (ECN) which work 100% electronically. All orders are matched that way. Since there is no physical location of the NASDAQ like the NYSE trading floor, it’s a virtual stock exchange.

Today’s stock markets work very efficiently and fast. Advances in technology, especially the Internet, allowed the stock exchanges to grow rapidly the last years. Today everybody with a computer and Internet can trade stocks online with low transaction costs. Years ago stock trading was expensive and made sense only when you bought a large amount of shares. Now you can trade stocks in seconds and so inexpensively that so called day traders execute hundreds of trades per day from their home computer.

You still need a broker to get connected to the stock market. A broker is the intermediate between the investor and the stock exchange. He takes care that your orders are executed properly and timely. Discount brokers offer only order execution while full service brokers offer more services at a higher fee like research, advice and financial planning.

No matter which broker you choose, the stock market is an exciting place offering you the choice between thousands of companies. There are new opportunities every day.

This step is really important and most people just don’t get it. Listen carefully — you have to deferred, avoid, and reduce capital gains taxes to the bare minimum! Well, how do I do that you ask? The best thing to do of course is to completely avoid capital gains taxes. The only way to do that is to open a Roth IRA. The reason you avoid capital gains taxes is that you pay your income taxes first and then you never pay taxes on any profits of the money you put into your Roth IRA.

If you make a lot of money though, you can’t open a Roth. In that case you need to open a Standard IRA and of course if your company matches in a 401(k) you need contribute up to the matching. In a 401(k) make sure that you only buy a no-load indexed mutual fund. Get your accounts open! Get your accounts open! Get your accounts open! I can’t overemphasize or shout this loud enough. Once you have your account open you will be motivated to start investing — if you don’t know how to trade through such an account I can teach you.

Here is a key point if you trade in an individual trading account where you are subject to capital gains taxes. You have to remember that the short term capital gains tax is double the long term capital gains tax rate. That means that if you buy a stock now and then sell it in less than a year you will have to pay your regular income tax rate which is as high as 35%. On the other hand if you buy low and hold for the big multi year stock price raises your capital gains tax rate is only 15%. This is huge! Look, that means that you have to earn 20% just to overcome the hurdle when you buy and sell real fast like the get rich quick gurus want to teach you.

Get your accounts open. Here is a recap. First check to see if the company you work for offers a 401(k) plan with matching and contribute up to the matching. If you work for a university than open a 403(b) plan which can be even better than the 401(k). Restrict your investing in a 401(k) or 403(b) to no load indexed mutual funds. Second, if you can save more than the matching amount your employer offers then open a Roth IRA and contribute up to the maximum. Third, if you are a really hard core saver and investor like my wife and me open an individual trading account. Fourth, open your Roth and individual trading account at an online brokerage like Ameritrade.com or Etrade.com. This insures that you won’t get an earful of manure from a stock broker who just wants to nickel and dime you out of your account. Also by trading online yourself you will learn to become a self sufficient investor — the richest kind of all!

There are three main stock exchanges, or markets, globally. These are the NASDAQ stock market, the American stock exchange, and the New York stock exchange. The NASDAQ has the highest number of daily trades, followed by the New York stock exchange, and then the American stock exchange.

The NASDAQ stock market has three trading session, a pre-market session, a market session, and an after-market hours trading session. Quotes and order entries are from 7 a.m. until 8 p.m., and quotes are firm and open from 7 a.m. until 8 p.m. The Pre-market trading hours run from 7 a.m. until 9:30 a.m. Then market hours run from 9:30 a.m. until 4 p.m. After-market tradings hours kick in from 4 p.m. until 8 p.m. The Nasdaq stock market is also closed for holidays on New Year’s Day, Martin Luther King Jr’s Birthday, President’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

The New York Stock Exchange only has one set of market hours, and this is from 9:30 a.m. until 4 p.m Eastern Standard Time. It is also only open Monday through Friday, no weekends. There are several holidays which shut down this stock market. These are New Year’s Day, Martin Luther King Jr’s Birthday, President’s Day, Good Friday, Memorial Day, Independence and Labor Day, ad Thanksgiving and Christmas Day.

The American Stock Exchange also has trading hours from 9:30 a.m. until 4 p.m. Eastern Standard Time, and it follows the same holiday schedule as the New York Stock Exchange. This is a typical holiday schedule in the United States because of federally mandated holidays.

No matter which stock exchange you plan on trading on, knowing the market hours and when the trading occurs is an enormous benefit. The markets all keep close to the same hours and holiday closing schedules, however the NASDAQ market has three specific trading sessions, while the New York Stock Exchange and the American Stock Exchange only have one trading session.

By being aware of the stock market trading hours, you can figure out which markets provide the best trading opportunities and when. By knowing ahead of time when the markets open and when the quotes are given and accepted, it will help to maximize the profit potential. The stock market may only be open for less than half of each day, but the impact that these markets have on economies all over the world are enormous.

Dear Fellow Investor.

For several weeks now the stock markets have been in a very good shape right around the globe which must be a very soothing feeling especially for those that are still licking their wounds having to cope with losses.

But there’s a flip side to this positive global atmosphere. And that side is pretty dark especially for newbies. What I mean is that more than ever people are being bombarded with investment recommendations that resemble gambling more than anything else! These stock recommendations have absolutely nothing to do with a serious and thoughtful investment.

On October 6, 2006 I wrote a newsletter article about this topic. You can view this article by clicking on http://www.stockbreakthroughs.com/Newsletters/otc.htm

Not only several renowned newsletters are trying to draw investors into buying stocks that will allegedly double and tripple within days, but also spam emails are infesting the inboxes of many email accounts. I get hundreds of these emails every week that promise profits that are from another galaxy and beyond our imagination.

These newsletters and email spams recommend stocks that most of us have never even heard of.and in many cases we don’t even know how to pronounce the company’s name.

It makes my stomach turn when I read the recommendations of these “carnival barkers” because I know that, unfortunately, they will find common ground with a lot of beginners.

Attracted by the possibility (no matter how minute) of fast and huge profits, they will even charge at stocks that only cost a few cents – so called penny stocks – believing that one can’t lose much with these cheap stocks. WRONG!!! That’s a fallacy!

If a 10 cent stock drops to 1 cent it’s still a 90% loss no matter what! And that can happen easily! It sometimes goes faster than one expects because more often than not some dubious organisation is manipulating these kind of stocks. They buy them dirt cheap and then create a hype hoping and expecting that many investors will buy these allegedly “highly profitable” stocks not wanting to miss the boat.

And there are enough buyers that will fall for these tricks. This will then cause the stock price to go up and up, and as more people see this stock rise and shine even more will buy in fear of missing their big and fat chance, making the stock go up even further.

OK. Now this obviously sound good. That’s what we’re looking for. A rising stock. But before you know it, these shady organisations then sell these stocks as fast as possible cashing in the big bucks. This sell-off will cause the stock to drop significantly and before you catch wind of it your stock is basically worthless and your money is gone.

The peril here is that these stocks are OTC stocks. I also wrote an article about this topic. You can view it under: http://www.stockbreakthroughs.com/articles/otc.htm

Very few OTC stocks are successful in making the jump from this market to the NASDAQ, NYSE or any other major exchange due to their INABILITY to meet the listing requirements of the major exchanges.

These kind of securities are very risky because there’s no controling body or organisation like the SEC which oversees the securities industry and promotes full disclosure in order to protect the investing public against malpractices. That’s why you should be very wary of OTC stocks because they are either penny stocks or hold bad credit records.

I will never understand what makes people invest thousands of bucks in siberian uranium mines, chinese energy stocks or even an australian internet casino. Yes! You read correctly! You’ll be surprised what investments people come with.

And the same people will spend weeks and months paging through brochures and magazines when it comes to buying a new car or the latest plasma TV set. They’ll make comparisons, they’ll ask friends and relatives and go through all kinds of troubles just to get the real deal.

So why don’t they apply the same scrutiny when it comes to investing thousands of bucks in the stock market instead of using hunches and guess work rather than the brain???

Your hard earned money shouldn’t just be gambled away. It should be invested wisely and with scrutiny. That’s the only safe way to accumulate real financial wealth!

Yours in Successful Trading

Ricky Schmidt

The stock market investments has proving to yield more profits better than other financial investments in the financial market investments. With the stock investment, you are sure of an incessant opportunities of better profits, and above all…you are guarranteed of low risk of losing your money. Your portfolio manager will be on alert 24/5 to harness on your stock investments which fix you on full set of sleeping all day, and partying all night while your stock investment is growing more active by the day, and still making your money… even when you are out on your holidays.

The stock market has been accertained of its risk free and its profits potentials with the following other investments below, and the stock has been proven to be more yielding better than others below.

{1} Real Estate: ————- {Land & Building}
{2} Securities: ————– {Shares/Stocks and bonds}
{3} Trading: —————– {Buying/Selling/import & Export}
{4} Manufacturing: ———– {Goods & Services}
{5} Fixed Deposits: ———- {Banks/Building Societies}

Although, some investments are more lucrative than the other, but above all, ”The stock market” has still remained the most active, yielding, profitting and very lucrative among all others. A good example of one year investment trial has been conducted between the listed investments above, And yet ”The stock market” still emerge the leading profitting investment to yield potential profits among all others.

This statistic figures below has been monitored on 2 years on approximation investment prices as at between January 2006 to January 2008:-

Cost Of Price As At January 2006 Cost Of Price As At January 2008
{1} Land Cost:- 10,000 And 15,000 —— Current Price:- 13,000 And 18,000
{2} Buildings Cost:- 10,000 And 15,000 —— Building Cost:- 13,000 And 18,000
{3} Business Cost:- 10,000 And 15,000 —– Trading Cost:- 14,000 And 19,000
{4} Manufacturing Cost:- 100,000 And 15,000 — Manufacturing Cost:- 15,000 And 20,000
{5} Securities Cost, 10,000 And 15,000 —— Securities Cost:- 18,000 And 26,000

The statistics here show the result of changes in profit and in more yielding, lucrative and more profitable in each of the investments.

Statistics Of Changes In The Investment Profits As At January 2008.

Land Profits:- 13,000 And 18,000 ———– Profits Of:- 3,000 Each.
Building Profits:- 13,000 And 18,000 ——- Profits Of:- 3,000 Each.
Business Profits:- 14,000 And 19,000 ——– Profits Of:- 4,000 Each.
Manufacturing Profits:- 15,000 And 20,000 — Profits Of:- 5,000 Each.
Securities Profits:- 18,000 And 26,000 —— Profits Of: 8,000 And 11,000.

This statistic fagure above showed that the investment started at thesame time, and with thesame amount of capital investment, but with the changes and the transactions within the 2 years period of time, the securities stand solely as the highest yielding profitable investment with a huge difference of between 8,000 and 11,000 profits. The manufacturing is also another yielding investment within the same period of 2 years investment… thats to show you how profitting the stock markets and other securities markets stands to profit you money, you can even earn 3 times of your capital investment. You still earn money in stock market, even when you are sleeping or even when you are in a long distance holidays trip.

The stock market is the only assured investment that can prompt you enough chance to spend time with you family and your love one’s give, travel to the moon, engage other businesses and at the end of the day… you will still have so much to spend around with joy and happiness. Try investing into stock market today and you will see some changes in your financial capacity almost instantly, and to tell you the fact ” is INCESSANT”. You have absolutely nothing to lose order than profits, profits, profits and more profits. Read more from the authors links below.

More books and articles have been written on the stock market than on perhaps any other business subject in the world.

Most of these have as their purpose instructing the reader on exactly how he can invest to make a sizable amount of money, and if he really applies himself, how he can become rich in either three or five years.

One of the most useful books written appeared in 1961. It did not tell you how to get rich. It emphasized the difficulties of investing in the stock market and it performed a tremendous service in this way, plus isolating the significant factors which record and explain the ups and downs of the market.

To invest in the market by following the procedures outlined in that book is anything but easy.

It requires a considerable amount of work every day the stock market is in operation. The book is written more for the professional investor to tell him how to make maximum profits out of both the rises and falls of the market.

The average investor will not take the time or perform the work necessary to maximize his profits, and he is satisfied with something less than maximum profits over a period of time. It is this type of person that we are writing for, not the professional investor who often spends 100% of his time on investments. We are, furthermore, writing for the smaller investor, not for the larger, professional one.

When we talk about the stock market we are not trying to write one more treatise on how to get wealthy in the stock market.

We do not present it as the only outlet for funds, although it certainly is for many people who know only the stock market on the one hand and the savings bank on the other. We treat the stock market as one outlet for funds, an outlet that can be almost the only good outlet at certain times, and a terrible outlet at other times one that offers too much risk.

In 1960 the stock market for the non-professional investor was, in my opinion, a substandard investment. Other investments in my portfolio yielded 12% and 14% and sent checks monthly, and the underlying businesses grew stronger while a number of the major firms listed on the Stock Exchanges showed declining profits and the trend of the market was down until late in the year. An inexpert investor in the stock market during most of the year 1960 would have had the cards stacked against him.

If we consider investments primarily of the loan type, those in which a person or organization is obligated to return a given number of dollars, plus a profit, over a period of months or years. Above everything, the proper investigation of these risks and safeguards against losses have been stressed.

The stock market is good for long term investing especially through investment trusts
and unit trusts.

Forex is more risky but greater profits can be made. Good software will help you to reduce the risks if you trade the Forex.

For most people, the stock market is a scary thought because they have seen the devastating effects it can have when things go wrong. Stock plummeted after Enron, and even when mergers are announced as with the case of Chase and Bank One, the stock market feels the effects. Even DuPont has seen its stock prices drop when negative information is publicized, so the stock market, for the most part, is a fickle entity.

How does a new investor avoid the pitfalls of the stock market? Research is the only way, and it’s no ironclad guarantee. That means before you invest, you adopt the habit or reading the NYSE and DOW reports in the daily newspapers as well as reading the business section of the newspaper for any reports that may affect the stock prices of a company you may be considering. Of course, sadly, utility companies are always making money, but they are doing it at the expense of consumers like you and me. For some people, investing in the electric or water company is the only place they feel safe, but with all of the mergers of electric companies, that isn’t even a very safe investment in the 21st Century.

A new investor needs to do some heavy reading and studying before investing in the stock market. This is not something that should be decided impulsively, but rather needs fully researched over time. In addition to following the current trends in the stock market, the potential investor needs to also research past trends, and be sure to research far enough in the previous years to ascertain that the company stock is stable for the most part. This requires, as an educated guess, at least five years worth of research, maybe more if time allows. For those who have been in the working force for a few years, the trend has been one of difficulties, and sometimes the most stable company has seen their stock plunge during times of recession or bad publicity.

In addition to checking the history of a company, and the stock market overall, a potential investor should check the trends of companies who have been involved in mergers to see how their stock fared before the merger was announced, afterwards, during acquisition, and after acquisition. After all, the potential for a company after a merger may be a negative one, so it’s important to know how the stockholders and potential investors saw the strength of the company. The price of a company’s stock is a measure of its strength in the economy, and without that, strength, the stockholders can force an unfriendly merger, whereby the stockholders take over the company.

Once you have decided the safest investment for you to make, you need to decide on a financial advisor or broker. It isn’t wise to try to make a direct buy because although it may be cheaper, the services of a broker will prevent or lessen the financial loss in the event of a drop in price. A broker can see the trend and advise you to sell your stock in a given corporation based on trends that are showing. Unless you have learned a great deal about the stock market, there is no way you, as a new investor, can predict these things. The price you pay a broker for managing your account is well worth the peace of mind you will have in knowing your financial interests are uppermost in the mind of your broker. Even with mutual funds, if you have any stocks in your portfolio, which most mutual funds investors do, it’s important to have a broker who can move those stocks around in the event of a downhill trend.

Putting some of your savings into an IRA is a real no-brainer. So much so that, according to the latest figures, the average IRA account today contains well over $25,000.

But no matter which kind of IRA you have — traditional, simple, SEP, Roth, (not to mention 401K or Keogh plans), chances are your money’s invested entirely in market-oriented holdings – stocks, bonds, and mutual funds.

The reason for this is simple; almost all IRA plans share one common attribute –: they’re administered by someone else. Employer-sponsored plans are run by a company-designated custodian, and normally offer a limited choice of places for you to invest – an assortment of mutual funds, for example.

Even a privately-held IRA will usually be administered by your broker, banker, or financial advisor – so it’s no surprise that the investment options available will be the ones they’re most familiar with (and can most easily earn commissions on!).

But in order to derive maximum benefit from their tax-deferred status, your retirement savings have to be invested for maximum growth. And limiting your IRA to market-oriented vehicles may not be the best way to achieve this.

What long-term average return can you reasonably expect from stocks? According to some experts, a reasonable estimate is currently no more than 7% to 8%. No less an authority than Berkshire Hathaway founder Warren Buffett touts the following formula: “3 to 4% for real GDP growth + 2% for inflation + 2% for dividend yield = 7 to 8% long-term total return on stocks.” And, in his most recent annual letter to shareholders, Buffett said he’s “found very few attractive securities to buy.”

If Warren Buffett doesn’t think he can make much money in the stock market, what chance does he average guy have? If you decide it’s time to diversify your IRA beyond stocks, bonds and mutuals, the next question is… how?

With a Self-Directed IRA (SDIRA).

SDIRAs are nothing new – they’ve been an available IRA option right from the start. But not many people are aware of all the features of an SDIRA that just might make it the perfect choice for your retirement nest egg.

You may think you already have a Self-Directed IRA – after all, you can choose which stocks, bonds or mutual funds to purchase, right? But what if you found out about a house down the street that was going on the market for half its value…. or a private company paying 15% for a short-term bridge loan? Could you invest in either of these from your current IRA? With a real Self-Directed IRA you could.

As the name implies, the administrator of this IRA is… you. You decide how your money is invested. And your available choices are much wider – besides the usual securities, you can also expand into real estate, tax liens, judgments, and a long list of other “non-traditional” but lucrative investments.

Does this mean “anything goes”? No – remember, Uncle Sam intended your IRA account to be a good, safe place to save for your eventual retirement – so even SDIRAs include constraints on what’s considered a suitable investment choice. But your SDIRA will definitely give you more latitude to diversify your holdings.

Setting up your SDIRA is about as involved as opening a bank account. There are a few forms to fill out to open and fund your account. You can do this easily, once you’ve decided on a custodian and received their forms.

Is a Self-Directed IRA right for you? If you wouldn’t invest in anything but stocks, bonds and mutual funds anyway then, no. Stick with your current IRA.

But if you’re ready to expand your IRA beyond these traditional investments then you need a Self-Directed IRA. You can “rollover” some or all of your current IRA funds into it then take advantage of the myriad other investment options now available.

For a list of custodians that offer Self-Directed IRAs go to the Resources page of the link below. This link also discusses LandBanking, which may be the single best investment available, for IRA or non-IRA funds. It offers real estate appreciation without the normal hassles of real estate – finding the property, dealing with tenants and contractors, long, tedious closings… etc. Just a simple, affordable and passive investment with tremendous growth potential.

The best part? If your IRA falls into the “average” range mentioned above of $25,000… you already have more than enough to participate in and benefit from LandBanking!

The difference between 8% and 20, 30 or 40% adds up quickly, especially when tax deferred. Don’t let the opportunities available from a Self-Directed IRA pass you by. Click below for more info:

The second step you have to take to get yourself moving forward financially is to learn to monitor your finances. Computers can really help us today if we let them. Put all of your bills on auto pay and scrutinize everything monthly looking for wasted expenditures. If you have a spend thrift in your life that won’t stop them throw them off the train — divorce them or cut them out of the family. Over time you will know how much you can set aside to invest in the stock market.

That amount may start out very small. I was just talking last night with a 78 year old friend of mine who is a stock market millionaire. He told me that when he started working in the 1950s $250 was a lot of money to earn in a week. Stock sold then, just like it does today, for $10-$15 in solid companies — he worked for a solid company. He told me that he and his wife believed in the stock market and methodically and with great discipline saved and invested each week into the stock market.

At the time other company employees who did not save and invest had a lot more money to spend on finer cars and furnishings. My friend’s wife was a little frustrated to see the Jones always ahead materially but her husband assured her that things would be different in the future. Sure enough they are stock market millionaires now.

I asked my friend what advice he would give you. He said that it is imperative to just get started saving and investing in you retirement plan at work up to the matching. If you have extra money open a Roth and if you have more than that then the minimum Roth contribution open a individual trading account. The main thing he wanted you to know is that you have to get started no matter how small it is. If you don’t you will never get ahead.

Dear Fellow-Investor.

Whenever the stock markets have consolidated and broken down significantly, thousands of bargain hunters are on their way to try and find the one dirt cheap stock in the hope of cashing in large profits once it goes up again!

But when exactly is a stock cheap? For many investors a stock is only cheap when the price-earnings ratio (P/E ratio) is low. So the lower the price-earnings ratio the better it is for them on speculations that it will go to where it was before the stock dropped, if it goes up again.

To recap. A price-earnings ratio shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). A higher multiple means investors have higher expectations for future growth, and have bid up the stock’s price.

The thing about P/E ratios is that conservative investors should avoid stocks with a high P/E ratio because if these corporations disappoint with their earnings and don’t meet market expectations, the stock will drop dramatically like Whole Foods did dropping more than $20 at the beginning of November 2006.

If a stock has a low P/E ratio, where expectations aren’t that high, the reaction is far less dramatic if earnings and performance expectations aren’t met.

But if trading and investing in the stock market was that easy, everybody would just buy stocks with a low P/E ratio. To bad so sad that no one would have then had Starbucks in their portfoilo. A stock that shot up sky high in the past. A low P/E ratio doesn’t exist in Starbucks vocabulary!

If you disregard individual stocks that have dropped sharply and take a look at the broad market, you’ll surprisingly notice that a P/E ratio tells you absolutely nothing about whether a stock is going to go up or down in the future! Not only stocks with a high P/E ratio can drop, but also stocks with a lower one can.

A good example of the above is the following:

Within the last 4 years the Dutch financial company ING, having a low P/E ratio, climbed to the skies from $10 to over $40. That’s over 300% profits, whereas AIG (American International Group), also having a low P/E ratio, was virtually dead in comparison.

On the other hand, Starbucks and the German cosmetic company Beiersdorf kept on going up although both companies had a high P/E ratio whereas Whole Foods, also having a high P/E ratio, dropped from $80 all the way down to $40 in 2006, and EMC² is still hovering around $15 and hasn’t recovered yet since 2000 where the stock was trading at just over $100.

So as you can see, there are no rules whether a stock with a high or low P/E ratio is good or bad!

Why doesn’t this strategy work?

The problems already start at the very beginning. Which earnings should one take into account? The reported earnings from the previous year; the expected ones for the current year or even the forecasted earnings for the next year?

Because the stock market mainly looks at future performance and earnings, the future P/E ratio plays a more important role. But even the expected earnings of the current year can only be estimated let alone the one for next year. It all boils down to estimation and speculation which is quite common in the stock market. But if these estimates are wrong and market expectations aren’t met, investors are then commonly very disappointed and the stock or even the whole market goes down. And this happens every year somewhere along the line.

And this is not the only reason why a P/E ratio is not a good formula for success. The furure performance of a corporation depends on so many factors. A future stock price doesn’t only depend on earnings from the current year or the next. It also depends largely on how well the management does it’s job, whether the company has a strong product line or which possible problems the company may face.

An example of this is Apple (AAPL). When CEO Steve Jobs introduced the iPhone in Jan. 07, AAPL shot up by over $10 in two days. But then Cisco Systems (CSCO) claimed that they had the rights to the name iPhone and were contemplating to sue AAPL if they were to continue using the name iPhone. Well. Guess what happened? AAPL went down the following days losing it’s entire $10 gain.

So once again you can see that a P/E ratio, whether high or low, says way too little to base an investment decision on!

Conclusion

At the end of the day, P/E ratios or any other ratios are absolutely irrelevant. What matters most importantly in the long run are earnings and the overall performance and future outlook of a company! Short-term factors like oil prices, political turmoil etc. can influence the markets and they will more often than not! But in the end these factors are secondary and negledgible for long-term investments.

Yours In Successful Trading!

Ricky Schmidt

When it comes to investing, nothing kills good returns more than nationalism. And nationalism rules at large investment firms.

As of March, 2007, the major U.S. stock market index, the S&P 500 stands, at a notch above 12,000 stands below the 1,250 level it stood at seven and a half years ago. So over seven and a half years if your portfolio has tracked the S&P 500’s index as most U.S. professional money managers aim to do, you have slightly less money, in absolute terms than you had seven and a half years ago. In terms of purchasing power, with the rapid deflation of the dollar, your same amount of dollars buys much less today. That’s a whole lot of waiting for a whole lot of nothing.

And that’s the good news.

The bad news is, as of 2007, the performance of the U.S. stock market is likely to become even worse for the rest of this decade. Why? For starters, check out the poor credit quality of thousands of American companies, many of which like the American consumer, seem to be overleveraged in debt.

Standard & Poors, a highly respected financial services firm that ranks the credit ratings of corporations all over the world, released a report on May 24, 2006 that declared a “Downgrade Potential Across Credit Grades and Sectors.” Standard and Poors covers corporations based in Asia/Pacific, Canada, Europe, the Middle East, Africa, Latin America, and the U.S.

This report stated that 85% of the corporations at risk for a potential downgrade in their credit rating (a rating that judges the corporation’s ongoing financial viability) were based in the U.S. or Europe, with the majority (61%) based in the U.S.

A breakdown by sector looks even worse. 80% of the corporations at risk within the automotive industry for a credit downgrade, 88% within the consumer product industry, and 88% of the retail/restaurant industry were all BASED IN THE U.S.

And don’t think that these statistics are skewed because the U.S. constitutes the largest percentage of the global stock market capitalization. According to a February, 2006 Forbes Online report, 75% of all publicly traded companies are non- U.S. based corporations.

But back to my opening statement:

When it comes to investing, nothing kills good returns more than nationalism. And nationalism rules at large investment firms.

To illustrate this point, it’s not just the small cap stocks, but also the large cap stocks of foreign countries that don’t trade on the stock exchanges of other countries. The overwhelming majority of clients at large investment firms don’t hold some of the leading, most innovative, most well-managed and fastest growing companies simply because these stocks are not traded on their domestic stock markets. For example, Samsung, a Korean company that is a world leader in high-end electronic goods, and LVMH (Louis Vuitton Moet Hennessy) a French company that is a world leader in luxury brand goods including Pucci, Fendi, Tag Heuer, Sephora, Dom Perignon, Moet & Chandon, Givenchy, DKNY, and Hard Candy do not even trade on American stock exchanges. And it’s not just the American stock exchanges. These two companies don’t trade on a lot of Asian stock exchanges either.

To buy them, you either have to open up a foreign trading account or purchase them through market makers that have been known to mark the price of foreign stocks up by as much as 15%. This means on a round trip buy and sell of the stock, you’ve lost 30% already. While mark-ups this high are generally rare, it does happen. And most times, because brokers don’t do the research to discover what they’re trading at on the foreign exchanges, they pay these outrageous mark-ups without even realizing that they are doing so.

Sure, your financial consultant may have recommended that you start buying heavily into foreign markets, so you may say that I’m wrong. But think about when this happened. After there was major instability in your domestic markets or before? Was it a pro-active or re-active decision? If it was a reactive decision, it’s still better than no reaction, but still this means that there is no forward-thinking about these types of decisions at all. Furthermore, how is your financial consultant gaining exposure to foreign markets for you? Through crappy investment vehicles like mutual funds that get hammered with every correction or through investments in strong individual stocks? In addition, many times financial consultants at investment firms ignore outstanding companies merely because their firm does not provide analyst reports of this company for them to read.

When the conflict in the Middle East between Israel and Lebanon reached a peak in 2006, I remembered reading an article that stated that money was beginning to flow back into the U.S. dollar for investors seeking a safe haven for their money. Articles like this amaze me due to the complete lack of understanding journalists have about certain economic conditions. Just as they keep telling investors that the U.S. markets are the safest stock markets in the world, they’ll keep telling investors that the U.S. dollar is the safest currency to own – but that’s an entirely different article for another day.

Want to truly find the safest havens for your money?

Then learn how to invest yourself for you are more likely to be led astray as long as you continue to listen to financial journalists or allow someone else to manage your money.

Penny stocks, as the name suggests, are shares that are available at extremely cheap rates. Being available literally for pennies, you can purchase such stocks for as low as $2 per share. These stocks are usually of very small companies, which have a market capitalization of less than $500 million. They are not traded at the major stock exchanges like NASDAQ or NYSE, but are listed in the pink sheets or the OTCBB (Over The Counter Bulletin Board), because these stocks are of companies that are unable to meet their listing requirements. They are also referred to by other names such as pink sheet stocks, nano stocks, small caps, micro caps or juniors.

Investing in penny stocks is considered very risky as they are traded without any regulatory or listing requirements, which provide security to shareholders. There are no accounting standards, and the shareholder gets no information about the change of ownership of shares etc. This makes it a potential source of fraud.

However, with proper research, investment in penny stocks can be a tremendous earning potential. Not all companies listed with pink sheet stocks should be considered fraudulent. Some of them represent good companies, which are too small to meet the requirements of the NYSE or NASDAQ. Many such companies have a bright future. Unlike blue chip stocks, penny stocks have greater volatility; hence, they have the potential of sometimes reaping rich dividends in a relatively short span of time. Thus, investing in these startup companies at rock bottom prices can end up in making investors very wealthy.

However, finding these companies requires research. The number of shares that the company has on ‘float’ is one indicator that needs to be ascertained. ‘Float’ is the technical term for the number of shares of the company being traded. Since penny stock companies are unregulated, they are not bound to report these details to the public. The information, however, can be found in TV interviews, and the like, given by the representatives of the company occasionally, and are sometimes archived on their websites. There are forums on these websites where stock brokers chat with each other. You can also get the information on the message boards. Find and read the articles and reviews written about the company, which will give you a good idea of the float. For instance, if a company’s float were very high, it implies that it is merely issuing extra ones to keep afloat, hence would not be worth investing in. Companies that have five million to one hundred million shares are considered fit for investment.

The product of the company also needs to be scrutinized. For example, it is important to find out if the company would face obstacles in selling its products for various reasons, or whether patent issues would allow some other company to introduce a similar product in the market, all of which would affect the value of the stocks. Another important consideration would be whether the product is going to find appeal with the target consumers.

While investing in penny stocks may be more perilous than putting your money in bonds or the shares of established companies, the chances of striking it rich is also a strong possibility, which makes it a risk well worth taking.

While quite a bit of time and research goes into selecting stocks, it is often hard to know when to pull out – especially for first time investors. The good news is that if you have chosen your stocks carefully, you won’t need to pull out for a very long time, such as when you are ready to retire. But there are specific instances when you will need to sell your stocks before you have reached your financial goals.

You may think that the time to sell is when the stock value is about to drop – and you may even be advised by your broker to do this. But this isn’t necessarily the right course of action.

Stocks go up and down all the time, depending on the economy…and of course the economy depends on the stock market as well. This is why it is so hard to determine whether you should sell your stock or not. Stocks go down, but they also tend to go back up.

You have to do more research, and you have to keep up with the stability of the companies that you invest in. Changes in corporations have a profound impact on the value of the stock. For instance, a new CEO can affect the value of stock. A plummet in the industry can affect a stock. Many things – all combined – affect the value of stock. But there are really only three good reasons to sell a stock.

The first reason is having reached your financial goals. Once you’ve reached retirement, you may wish to sell your stocks and put your money in safer financial vehicles, such as a savings account.

This is a common practice for those who have invested for the purpose of financing their retirement. The second reason to sell a stock is if there are major changes in the business you are investing in that cause, or will cause, the value of the stock to drop, with little or no possibility of the value rising again. Ideally, you would sell your stock in this situation before the value starts to drop.

If the value of the stock spikes, this is the third reason you may want to sell. If your stock is valued at $100 per share today, but drastically rises to $200 per share next week, it is a great time to sell – especially if the outlook is that the value will drop back down to $100 per share soon. You would sell when the stock was worth $200 per share.

As a beginner, you definitely want to consult with a broker or a financial advisor before buying or selling stocks. They will work with you to help you make the right decisions to reach your financial goals.

Why is it that some people only buy one or two stocks? Others may have 15 stocks but have 50 percent of their investment assets in just one of those 15 stocks. In Wall Street we refer to this type of behavior as concentration. Some firms call it over-concentration. When this happens in a brokerage firm it is always considered dangerous. It is so dangerous, in fact, that if the brokerage firm is using a concentrated stock position as capital, then the market value of the security in question is given a haircut. This means that the full market value of the security is chopped by some fixed percentage in any capital computation. In other words, if you are over-concentrated, you don’t get full value. Some of you may have margin accounts. As you know, StocksAtBottom.com advocates cash ownership of stocks. If you own stocks on margin, it is our opinion that you will get sold out on margin. Normally in a margin account you put up 50 percent of the value of the stock you acquire in cash. If equity falls below 35 percent, you get a margin call. Now, brokerage firms love it when clients have 15 or 20 different stocks in a margin account. If there are some bonds in that account, guess what, they love it even more. Why? Because brokerage firms know that stocks represent risky investments. Something can always go wrong in any one situation. Maybe something can go wrong in any two situations. It’s tough to see something go wrong in 15 situations. That is the essence of diversification. SPREAD THE RISK AROUND. It makes a lot of sense. Some investors own 50 to 100 stocks. This is because they think they need that many to achieve the investment goals that they set out for themselves. In business school at a master’s degree level they teach you that to achieve true diversification you need to own something approaching 14 equity positions. It has been the experience of StocksAtBottom.com that 6 to 10 different equity positions is sufficient to achieve diversification. The one thing we know for sure is that it’s not one stock or two stocks. Own one or two and you get killed.

Putting all your eggs in one basket We advise all investors to own several stocks and to own more than one sector. Own more than one type of investment (that means equities, bonds, real estate, cash, you get the picture) or you will have problems. Sectors refer to stocks with broad themes. Examples are: * Energy * Semi-conductors * Housing * Auto * Consumer * Airlines * Personal Computers * Technology in general If you own 10 stocks, but they fall into only 2 sectors then you really have not achieved diversity in your portfolio. You see, when they come to get Ford Motor, usually General Motors is not that far behind. By the way, it’s great on the upside to own everything in one sector when that sector is going your way. There’s probably not a greater high in the world than when everything you own is going up. On the flip side, when you are overly concentrated in a sector that’s heading down, lower and lower every day, there is no worse emotional low. The depression can be almost unbelievable. There’s also the issue of owning more than one type of investment. There are equity investments, which are stocks. There are real estate investments, and bond investments. There are also venture capital investments, precious metals, and others such as oil and gas. To a large extent, you achieve diversity in your investment strategies by owning different types of investments, as well as investing in different sectors. Let’s go into a few real life examples. We at StocksAtBottom.com believe we have already made the equivalent of a lifetime of investing mistakes, so learn from a few of ours.

Arrow Electronics It was Christmas week in the early 1980’s. One of us was sitting at Bear Stearns as a limited partner at the time. We were doing very well as stockbrokers. It was the period of full commissions (no discounting), and clients were doing 10,000 share trades in $50 dollar stocks. Taking home an income of $500,000 to $1,000,000 in a year was no big deal at the time. We were loaded up on Arrow Electronics, a NYSE company in the semi-conductor sector. Business was fantastic, the future was bright, and things could not have been better. Since we were involved on the banking side as well, we had an open line of communication to the company. We knew we had a good thing going. The telephone rang on one of those beautiful days prior to Christmas when New York City is the place to be, Rockefeller Center all lit up with a 50 foot Christmas tree and all. “Hello.” A harried response, “There’s been a fire at the Tarrytown Hilton Executive Center, a lot of people are dead.” “Okay, that’s terrible, how does it affect me and by the way, what’s for lunch today?” “Buddy, you don’t understand,” the dead pan voice says. “What don’t I understand?” “The entire executive leadership of Arrow Electronics was in that fire.” All of them, every one of them had been killed by this monstrous tragedy. It was the worst Christmas imaginable for the wonderful families of this dedicated group of execs. The families never recovered, the company never recovered in terms of the people that were left, and the stock took years to recover. It plummeted from $32 per share to $4 per share in a matter of days. The recovery was slow and hard, it was agony all the way back on this particular stock. Arrow Electronics is an example of putting all your eggs in one basket. It is an example of owning just one stock. SAB does not care how much you know about a company, things can go wrong and do go wrong. You simply cannot own just one company because the risk on the downside is too great. YOU MUST DIVERSIFY IN ORDER TO SPREAD THE RISK.

Talking about the Stock Market we seem to mean a different dimension, not a physical location.
However, the Stock Market does have physical locations.

Wall Street, also known as the Dow, or the NYSE, is located in New York

Wall Street is the Address(or is it?)

Many people think of Wall Street and the Stock Market as one in the same, and indeed, it used to be that way.

Dutch settlers initially built a stockade here in 1653 for defense purposes.
In 1685 the stockade was torn down and a street was built called Wall Street.
In 1790 the first Stock Exchange was founded in Philadelphia which became the model for the New York Stock Exchange.

In 1817 the NYSE was officially opened.
The NYSE was moderately successful till the early 1900’s when the market entered a boom period which lasted more or less until 1929.

This boom period of course could not last forever, things were so out of kilter that people were mortgaging their homes and leveraging themselves to the limit to buy shares.
The boom period crashed in 1929 and caused the Great Depression.

The 1929 Crash was caused in part by the fact that the Stock Market was virtually unregulated, which it remained even until after the market crash of 1987 which saw the Dow suffer what was the largest losing day in the Market’s history.

Black Tuesday – October 29th, 1929

On Black Tuesday, a record of 16.4 million shares were traded and the ticker tape fell behind two and a half hours. On Monday, the stock market suffered a record one-day loss of around 13 percent. On Black Tuesday, the market suffered a loss of about 12 percent and did not recover for 22 years.

The economy eventually recovered from its catastrophic losses but the unregulated Stock Market practices that had partially caused the crash in the 1929 still existed and caused the stock market crash of 1987, which saw the Dow Jones suffer what was the largest single-day loss in the stock market’s history.

Today’s Stock Market

Today’s stock market consists of about 500,000 computers all networked with dealers for the NYSE or market makers for the NASDAQ. Up until recently the Dow still used human intervention but at present all trades are computerized.

The 2 most important stock market networks are the NYSE and NASDAQ.
NASDAQ is a relatively new Stock Trading System that has been computerized since its inception, where market makers normally lead trades.

It used to be that more risky stocks were traded on the NASDAQ than on the NYSE, but that distinction is fading.

The difference between the NYSE and Nasdaq is in the way securities on the exchanges are transacted between buyers and sellers.

The Nasdaq is a dealer’s market, wherein market participants are not buying from and selling to one another but to and from a dealer, which, in the case of the Nasdaq, is a market maker.

The NYSE is an auction market, wherein individuals are typically buying and selling to each other and there is an auction happening; the highest bidding price will be matched with the lowest asking price.

All these computers are linked to computers worldwide. These computers can be found in banks, small businesses, and large corporations.

These computers comprise the banking networks which make computerized transactions possible.
To give you an idea as to how much gets traded: in New York City Stock Market Trades amount to over $2.2 trillion dollars daily

How has the U.S. Stock Market done in Times of War?

The worst Stock Market returns were achieved during the Vietnam War.If this happened because of the uncertainty of the times is a good question. Stock Markets do not like uncertainty and will act negatively.

Returns during the Korean War however were excellent and averaged about 18% per year while 2nd world war returns averaged about 13% per year.

The 1987 Stock Market Crash

The crash of 1987 was one of the most remarkable financial catastrophies of the 20th century, perhaps since the start of the financial system several centuries ago. Why it was so strange because it should not have happened and even today we cannot fully comprehend that it did happen.

Markets fell, an unbelievable 23%, and that they did so all over the world at the same time.
It only lasted one day.

There is no explanation. No definite reason for the crash has been isolated.
The best that one can say is that there were too many similarities to the 1929 crash and that this became a self-fulfilling prophecy.