Archive for May, 2009
How To Pick Stocks And Mutual Funds Like A Winner
Monday, May 18th, 2009 | Finance | No Comments
The first thing you must always consider when picking stocks is how strong the underlying company really is. Failing to consider this one crucial point, could very well cost you a lot of money.
After thinking about the first crucial piece of information, you must make sure that the stock is valued correctly. Should you start to think that buying undervalued stocks means learning how to pick cheap penny stocks and mutual funds then you are sorely mistaken. Basically, knowing how to pick cheap penny stocks and mutual funds would be the same as buying stocks cheaply.
So what does this all mean? Buying cheap stocks means purchasing them when they are trading below face value. Being able to locate and purchase these cheap stocks is how the gurus make all their money on the market.
What do you do to buy a stock when it is cheap? First off you want to find a sector that is not doing as well as it should or will be performing well soon . Compare the PE multiples of your stock with that of it’s competitors. If the stock is looking favorable and the price should be getting higher, then you have on your hands an under priced stock. Buying the stock should be considered if you think the price should be higher.
Does this mean you should not learn how to pick cheap penny stocks and trade mutual funds? Of course not. Only a fool would deny themselves the opportunity to learn all they can about alternate investing strategies. Don’t be a fool and learn how to invest in mutual funds as well. You will be sorry if you don’t take the time to learn. Mutual funds could be the best way to grow your savings and retirement money consistently over several years. And who wants to be one of the broke and regretful fools?
What Is Going On In the Market
Thursday, May 14th, 2009 | Finance | No Comments
A funny thing has happened in the last 6-8 weeks. There are almost no sellers. Literally. The market has made a massive push and it really struggles to sell or stay down. It seems almost funny how bad it is to try to short for more than maybe 20 minutes at a time.As most traders find out - fighting the market is pointless, all you can do is react to what you are given.This action sure makes trading hard, the guys that are really getting the most out of it are the buy and hold.
One thing I know is that no matter what these guys do that are chasing and then bidding the market so it does not sell - it will sell eventually. The only way you actualy make money, whether day trading or longer term investing, is to lock in profits.Until then, its not reality. At some point they will tip the tide to the point where a majority are actually fearful of losing gains and then the selling is real.
A key pattern lately has been to break below support and then out of nowhere a massive burst of buying jams the market back to the highs.This sort of thing happens so often now, its completely expected. Often this can result in a new daily low (the break) , only to see a new daily high 30 minutes later as the buyers relentlessly chase the market (im sure shorts are in there too, trapped like dogs).
Even in the height of the bull market, we would repeatedly have 10-15+% corrections in the market that would last a month or so.And this was what happened when everything was good.Because of this I am not sure what is actually going on. Several theories are in play that I think about:
- Shorts are completely or mostly out of the market. The SEC messing with the short rules before caused a panic, and now there are many proposals again in regard to uptick rule and shorting. Rather than get caught, they are staying away from day trading and longer term positioning.
- Manipulation factor on high.There is a group of funds or banks backed by the Fed and Treasury whose goal it is to push the market higher to form the opinion that the economy has turned. The way the rescues happen like clockwork, the ramps into the close every friday, and other very odd trading behavior gives this some credence imo. Would be easy for the government to just give these guys money to push the market up.
- Traders all gone, algo's take over.This can happen also - computerized trading has taken over more of the futures market, which in turn drives stocks.Since no one tries to fight this trend, with all of them doing the same thing it just feeds on itself. This one I like too because the actual variance of price during the rally pushes is actually uncharacteristically low most of the time. I have seen the dow futures push up 100 pts in 20 minutes with maybe an 8-9 point max retrace the whole time.Of course this type of thing has happened before, but not nearly as often as it does now on a daily basis.
Whether any of these theories are true or not, I have no idea and may never find out. All I know is the trading action is very odd and I expect at least half if not more of this gain to be gone when this is done.Note that I am not predicting a top in the market, I am simply stating that what goes up almost always goes down - and the down is usually painfull. We could hit 9k, 10k etc.I relaly do not see 10,000 as possible right now, because GM, C and a few others are dead - they just don't have the fuel short term.
Maybe everyone just needs to learn to trade again – this is the new market to stay!
Just lost your job? 10 things to get you through the Nightmare.
Sunday, May 10th, 2009 | Finance | No Comments
Unemployment is a difficult thing to deal with at the best of times. With the challenges now facing the world’s economies, many are going to face this emotional rollercoaster for the first time in their working life, quickly needing to find ways of saving money and identifying saving tips. It is therefore vital to realise that you are not alone and by acting positively you will improve your chances significantly of finding new work. You therefore need to understand it for what it is, acknowledge it and move on.
Taking each of these in turn:
Recognise it for what it is; a period of acute stress. There are many contributors to this stress, including….
• A journey into unknown territory – “what is going to happen to me?”
• A feeling that you are letting people down, particularly your immediate family. This feeling is likely to be much stronger if you have dependents or young children. Your family dreams may be interrupted.
• A range of completely new practical challenges, like trying to understand the benefits system.
• Be anxious about rising debts, often including, in a few cases, worry about having your home repossessed if you have a mortgage.
• Difficulty in adjusting to a new life style with a different income – “how will we keep up with our friend’s social scene”.
• Panic about how friends and family and even just other people might see you.
• Reducing levels of self worth – “how did I fail?”
• Anger at former employees or circumstances leading to the unemployment
• Lack of motivation “what is the point?”
Accept the situation. This may be hard to do, but once it has been achieved in a meaningful (not superficial) way you can get on with repairing the damage.
Move on positively and swallow your pride. You’ll need to make changes and manage the financial consequences of lost income. Do not hide from decisions. Some of the things to put on your agenda to consider include:
• Make sure that you access any benefits that you are entitled to straight away. The means testing may feel intrusive, but it is imperitive not to misuse your time. It is very difficult to get any form of benefits paid for the period when you should have claimed and did not know how to.
• Review your budget in detail. When you have completed this, do it again taking out the bits that you can live without. Make every penny count by finding ways of saving money.
• Speak immediately to your bank and other financial relationships before any damaging situations arise. They are professional and should give you some breathing space, particularly in relation to your house or mortgage.
• Dont bury your head in the sand. The best way to get back into employment is to get out and speak to people, so find out what friends and previous colleagues are doing. Tell people you are looking for work when visiting places like business networks or social events. Word gets around and generally people are willing to help. You will quickly discover that you are not alone.
• Turn the job loss into a long term opportunity. What do you really want to do? Redo your resume and decide where you might want to be in the future.
Finally, take advantage of any assistance that is available from family, friends and associates. Look online for any help available during this difficult period. For example, look for personal finance systems that can help you to manage your money better and to coach you about saving money. There are also a variety of sources online for saving tips that could be valuable, so seek them out.
Trading Automated? Stock Market Trading Software The Good and Limitations
Tuesday, May 5th, 2009 | Finance | No Comments
Every brainchild of human thought seems to be inevitably fraught with complications, especially when money is mixed in. It pains one to visualize the inner workings of something like the stock market, especially now that the world is besieged by global economic and financial recession. Many companies are struggling to be rid of the vise grip of the crisis that has already claimed many others, not just any companies, but known ones. With such influential organizations rising and falling, stock traders need all the help they can get trying to make sense of stock market figures that might some might even try their luck in automated trading via stock software.
The World Wide Web spawns as many useful things as it does subterfuges, and taking advantage of a computer’s forte of data gathering and analysis, stock software are today common tools in a trader’s repertoire. These software come in a variety of ranges: from observational systems designed to gather and organize data to analytic software that analyzes stock market information to actual AI traders that do the decision making as well. The data observation and gathering plus the analysis parts make such market research software virtual assistants to stock traders and are quite accurate and useful. But the decision making software is rather dubious.
It may be true that a computer is the best machine to analyze such twisted data as stock market figures and also best suited for performing the analysis based on a predefined principle or theorem like fundamental or technical analysis, but it is also true that the stock market can at times be beyond logic. The 1987 stock market crash for example; until now, no probable cause has ever been proven to cause a drop of 22. 6% in the Dow Jones Index. None logical, at least. Even if today’s computers had been there, they could not have been able to foretell such an event happening. The same is true today, in more minute terms. Even if trends do occur in Gaussian distribution, no computer can accurately pinpoint an outlier possibility and thus make use of it. Furthermore, the Efficient Market Hypothesis of Professor Eugene Fama effectively negates a computer’s potential to break the bank, or in this case, beat the market. Stating that it is not possible to consistently outperform the market from information from the market, though the hypothesis has its drawbacks and contenders, is sound enough to ring true for the case of a investment management software.
Foreign Exchange
Monday, May 4th, 2009 | Business and Management | No Comments
foreign exchange is market where exchange of currencies takes place for another currency. Foreign exchange is the exchange activity takes place between currencies and provides liquidity and accessibility to the traders availing the service provided. Foreign exchange is referred as a market or network which provides service to the customers or traders all over the world. Foreign exchange is the market where exchange of currencies takes place for more and different number of foreign county. Foreign exchange is nothing but buying and selling of foreign currencies in exchange of another. In the foreign exchange market, more of number of foreign currencies will be exchanged by the members and other traders with fluctuations of market price.
Foreign exchange is created to provide more useful services to the customer, traders and participants. Some of the participants or traders of foreign exchange market are commercial banks, central banks, investment banks, brokers, registered dealers, global money managers, option traders and speculators. The rate of exchange fixed for the foreign economy varies as per the demand and fluctuation of foreign exchange market. Foreign currencies will be exchanged based on the requirement and demand for other foreign currency. The difference in the rate of foreign currencies will be made on the political, economic factors and with reference to the stability of the market.