How To Buy Good Stocks
Mar0
Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:
In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.
For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).
Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.
It is best to aviod stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock that is below $5 at anytime.
Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option inorder to protect your stock.
Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.
If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.
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Investment Bonds – How To Buy Them
Mar0
Bonds are one of the main stream types of investment along with stocks and real estate, and if you want to learn how to trade bonds make sure that you get a good education in the subject 1st. There are a number of important points that you must understand about bonds before you start investing in them. Not understanding these points may cause you to purchase the wrong bonds, at the wrong maturity date.
Like all investments it is very important to learn about what you are investing in, and certainly don’t just take the advice given to you by a bond seller without checking it out 1st yourself. The three most important points that must be considered when purchasing a bond include the par value, the maturity date, and the coupon rate.
The par value of a bond refers to the amount of money you will receive when the bond reaches its maturity date. In other words, you will receive your initial investment back when the bond reaches maturity.
The maturity date is the date that the bond will reach its full value. On this date, you will receive your initial investment, plus the interest that your money has earned.
Corporate and State and Local Government bonds can be “called” before they reach their maturity, at which time the corporation or issuing Government will return your initial investment, along with the cash that it has earned thus far. Federal bonds cannot be “called”.
The coupon rate is the interest that you will receive when the bond reaches maturity. This number is written as a percentage, and you must use other information to find out what the interest will be. A bond that has a par value of say $2000, with a coupon rate of 5% would earn $100 per year until it reaches maturity.
Because bonds are not issued by banks, many people don’t understand how to go about buying one. There are 2 ways this can be done.
You can use a broker or brokerage firm to make the purchase for you or you can go directly to the Government. If you use a brokerage, you will more than likely be charged a commission fee. If you want to use a broker, you should shop around for the lowest commissions!
Purchasing directly through the Government is not nearly as hard as it once was. There is a program called Treasury Direct which will allow you to purchase bonds and all of your bonds will be held in one account, that you will have easy access to. This will allow you to avoid paying a broker or brokerage firm.
More advanced traders may try to buy and sell bonds to take advantage of the price movements, you can even swing trade them. But this is a very risky business if you don’t know what you are doing, you will need to take a swing trading course if this was something that wanted to, but again most people just buy and hold.
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How To Invest For Retirement
Mar0
In order to provide for your retirement investing has become increasingly important over the years, as the future of social security benefits becomes unknown. There are of course many forms of investment, but the main two that are available to the average man in the street are real estate and stocks. If you are interested in investing in the stock market maybe you should read some of Warren Buffet books!.
It is a very normal need for men and women to want to insure their futures, and they know that if they are depending on Social Security benefits, and in some cases retirement plans, that they may be in for a rude awakening when they no longer have the ability. Investing wisely is the answer to the unknowns of the future because it has been shown that most people need much more money to live on in retirement that they think.
You may have been saving cash in a low interest savings account over the years. Now, you want to see that money grow at a faster pace. Perhaps you’ve inherited money or realized some other type of windfall, and you need a way to make that money grow. Again, investing is the answer.
Leaving money in a safe bank account earning maybe 5% a year, if you are lucky, is considered investing by many, but in general it’s a pretty poor deal, after accounting for inflation you are growing your money very little in real terms.
Investing is also a way of attaining the things that you want, such as a new home, a college education for your children, or expensive ‘toys.’ Of course, your financial goals and timeline will determine what type of investing you do.
Trading stocks can also be a form of investing if you have a medium to long term outlook, but make sure that you get some good trading education 1st.
If you want or need to make a lot of cash fast, you would be more interested in higher risk investing, which will give you a larger return in a shorter amount of time. If you are saving for something in the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time.
The overall purpose in investing is to create wealth and security, over a period of time. It is important to remember that you will not always be able to earn an income… you will eventually want to retire.
You also cannot count on the social security system to do what you expect it to do. As we have seen with Enron and other frauds, you also cannot necessarily depend on your company’s retirement plan either. So, again, investing wisely is the key to insuring your own financial future, but you must make smart investments.
When considering investments you have also got to be very carefull to avoid investment trading scams, things to look out for are unrealistic rates of return.
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What is Your Trader Type?: Scapler, Day Trader, Swing or Position
Mar0
Did you know that there are 4 mains types of trader and depending on what sort you are will determine many parts of your trading strategy and trading plan. The four types are: scalping, day trading, swing trading and position trading. When you determine the type of trader that you are it will also determine the time frame in which you will be making your trade. This will be a very important decision that you need to make when deciding how you want to learn to day trade.
1. Scalping Trader, if you scalp the markets this means that you are only looking for a few ticks profit per trade and you may only be in the trade for a few seconds or a minute at most. trading. Some people will also call this day trading but it’s really micro day trading, buying the bid and selling the offer, it’s high speed trading and you might end up doing 15-50 trades a day. This is a very stressful way of trading for many people.
2. Day Trader, the true day trader opens and closes their trade within the same trading session, usually this mean the same day, but unlike a scalper the trade may be held for a few minutes up to several hours. Usually day traders make about 2-5 trades a day and most of them will be in the 5-30 minutes range. This is a less stressful way of trading than scalping but it still requires a lot of attention and quick decision making.
3. Swing Traders, swing trading usually means that a position is held for between 1 to 5-10 days, although some swing traders may keep a trade on for longer most are within this time period. For many this is the idea way to trade because it allows you to review your trade overnight, at the very least you have several hours to make your trading decisions.
4. Position Traders, this just means that you are going to hold onto your trade for longer than a few days, maybe even as long as 1 to 2 months.
If you are still working out how to day trade then it may be better to go with the longer time frames as it gives you more time to think.
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Invest In A State Quarter Proof Set
Mar0
The US 50 State Quarters Program is the release of commemorative coins that have varied designs for each of the States. The main purpose of this program by the US Mint is to promote, if not revive the art of coin collection, which promptly succeeded. There are, and there have been, a lot of commemorative coins released by the United States Mint but this is the first time in a very long while that there has been a coin collection craze that is full blown and extremely competitive. The obvious proof of the people’s keen interest in the US 50 State Quarters Program is the sales garnered by the US Federal Government which, to date, has hit the $4.6 Billion mark.
Historic Significance
American are a patriotic people. This commemorative coin program is by far one of the most significant patriotic actions that the government has enacted and the people have supported it thoroughly. Each of the 50 coins represent the uniqueness of each state and what it symbolizes is that while there are 50 different States in the Federation, there is only one voice which is the product of independent unity that reigns supreme in every American’s heart and mind. Not only did the US 50 State Quarters program start a new age in coin collection in America but it also made its way to mainstream pop culture and television as a satire material.
The topic of state quarter even made it to late night talk shows. In any case, people seem to remain extremely interested in collecting these coins and they are prepared to pay the price for it. Coin Distribution The US government wanted to make sure that everyone could get involved in this program. Beginning in 1998. hundreds of thousands of the coins have been circulated.
Value and Material
Due to the number of coins circulated the value of circulated coins are minimal.However, a state quarter proof set will carry siginificant value as well as flawed or error coins. There has been a lots of confusion as to the collectible value of these coins which is aggravated by the fact that there are some pieces that have flaws in them such as the motto “In God We Trust” which became “in God We Rust” in some reverse sides.Look for errors and flaws for extra value.
Shopping Online
To date, there are still a lot of collectors who have yet to complete their set of the 50 coins, which has caused a very active selling market on auction sites online.People who are looking to complete their collection are putting up want ads in order to attract other collectors who are willing to sell some of their collections in exchange for a good sum of money.
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