Whenever a person or a corporation or a government entity spends some money to purchase an asset (movable, immovable or otherwise) of any kind with an intention to make profit in the future such activity is referred as investment. Investments can be for long term and short term. Certain investment carries risk while the others do not. Similarly some investments guarantee returns while the others do not. When you have money to invest you must analyze many factors and then take a decision.
Investment is a vital activity in financial planning. Investment is important for many reasons. Firstly most of them generate greater revenue when compared with savings though the fact remains that certain investment doesn't necessarily give you returns. Investments can appreciate your asset value improve your bank balance and may be of a great recourse to start a business or take care of oneself in the old age. You must properly learn to invest money from the loans.
Sources to Invest
There are many options available for investment. You can choose to put your money in government or private sector. Similarly you can also invest in properties like land and building or in bonds and other financi al instruments that yield interest.Your locality may have specific sources for micro cap investing money. Information pertaining to this can be had from the local market. If you wish to learn to invest money you must get to know the ways to invest money, and the place to invest money or where to invest money. You must be able to answer the following questions effectively:
How to invest money
Reasons to invest money
Sources for Investing:
Some of the sources for investing in the Market are as follows
Real Estates
When a person or a group of persons or a business entity buys building and landed properties with an intention to sell them in the future at high prices or to rent the property for business and commercial purpose or to engage in business at a later stage it is referred as real estate investment. Investing in real estates involves lot of risks and at the sa me time it happens to be lucrative if one is able to strike the right deal.The prices of real estates depend on many factors both internal and external. Some of the external and internal factors which influence the real estate market are government regulation, economic factors like price and demand. Some of the internal factors include the current trend of real estate market and competitors. Access eager real estate investors and start flipping houses online now.
Gold
This is another important commodity for investment. The price for gold depends mainly on the demand in your country. The quantity of oil that your country can produce or supply or posses at a particular time also decides the price. Gold prices can also decline drastically or increase all on a sudden. However they are not as risky as investing in the stock market.
Mutual Funds
Mutual funds are collective investments undertaken by commercial entities. They collect funds fro m individual and institutional investors and invest them in various stock options. The returns and risks are shared according to t he individual contribution in the total sum. Mutual funds are also less risky when compared with stock markets. Lesser risks and service of financial experts with regards to investing in stock market has contributed to the popularity of mutual funds and today it remains to be a financial instrument highly demanded in the market. Even if you have little money to invest you can choose this scheme.
Sunday, August 24, 2008
Whenever a person or a corporation or a government entity spends some money to purchase an asset (movable, immovable or otherwise) of any kind with an intention to make profit in the future such activity is referred as investment. Investments can be for long term and short term. Certain investment carries risk while the others do not. Similarly some investments guarantee returns while the others do not. When you have money to invest you must analyze many factors and then take a decision.
Investment is a vital activity in financial planning. Investment is important for many reasons. Firstly most of them generate greater revenue when compared with savings though the fact remains that certain investment doesn't necessarily give you returns. Investments can appreciate your asset value improve your bank balance and may be of a great recourse to start a business or take care of oneself in the old age. You must properly learn to invest money from the loans.
Sources to Invest
There are many options available for investment. You can choose to put your money in government or private sector. Similarly you can also invest in properties like land and building or in bonds and other financi al instruments that yield interest.Your locality may have specific sources for micro cap investing money. Information pertaining to this can be had from the local market. If you wish to learn to invest money you must get to know the ways to invest money, and the place to invest money or where to invest money. You must be able to answer the following questions effectively:
How to invest money
Reasons to invest money
Sources for Investing:
Some of the sources for investing in the Market are as follows
Real Estates
When a person or a group of persons or a business entity buys building and landed properties with an intention to sell them in the future at high prices or to rent the property for business and commercial purpose or to engage in business at a later stage it is referred as real estate investment. Investing in real estates involves lot of risks and at the sa me time it happens to be lucrative if one is able to strike the right deal.The prices of real estates depend on many factors both internal and external. Some of the external and internal factors which influence the real estate market are government regulation, economic factors like price and demand. Some of the internal factors include the current trend of real estate market and competitors. Access eager real estate investors and start flipping houses online now.
Gold
This is another important commodity for investment. The price for gold depends mainly on the demand in your country. The quantity of oil that your country can produce or supply or posses at a particular time also decides the price. Gold prices can also decline drastically or increase all on a sudden. However they are not as risky as investing in the stock market.
Mutual Funds
Mutual funds are collective investments undertaken by commercial entities. They collect funds fro m individual and institutional investors and invest them in various stock options. The returns and risks are shared according to t he individual contribution in the total sum. Mutual funds are also less risky when compared with stock markets. Lesser risks and service of financial experts with regards to investing in stock market has contributed to the popularity of mutual funds and today it remains to be a financial instrument highly demanded in the market. Even if you have little money to invest you can choose this scheme.
Investment is a vital activity in financial planning. Investment is important for many reasons. Firstly most of them generate greater revenue when compared with savings though the fact remains that certain investment doesn't necessarily give you returns. Investments can appreciate your asset value improve your bank balance and may be of a great recourse to start a business or take care of oneself in the old age. You must properly learn to invest money from the loans.
Sources to Invest
There are many options available for investment. You can choose to put your money in government or private sector. Similarly you can also invest in properties like land and building or in bonds and other financi al instruments that yield interest.Your locality may have specific sources for micro cap investing money. Information pertaining to this can be had from the local market. If you wish to learn to invest money you must get to know the ways to invest money, and the place to invest money or where to invest money. You must be able to answer the following questions effectively:
How to invest money
Reasons to invest money
Sources for Investing:
Some of the sources for investing in the Market are as follows
Real Estates
When a person or a group of persons or a business entity buys building and landed properties with an intention to sell them in the future at high prices or to rent the property for business and commercial purpose or to engage in business at a later stage it is referred as real estate investment. Investing in real estates involves lot of risks and at the sa me time it happens to be lucrative if one is able to strike the right deal.The prices of real estates depend on many factors both internal and external. Some of the external and internal factors which influence the real estate market are government regulation, economic factors like price and demand. Some of the internal factors include the current trend of real estate market and competitors. Access eager real estate investors and start flipping houses online now.
Gold
This is another important commodity for investment. The price for gold depends mainly on the demand in your country. The quantity of oil that your country can produce or supply or posses at a particular time also decides the price. Gold prices can also decline drastically or increase all on a sudden. However they are not as risky as investing in the stock market.
Mutual Funds
Mutual funds are collective investments undertaken by commercial entities. They collect funds fro m individual and institutional investors and invest them in various stock options. The returns and risks are shared according to t he individual contribution in the total sum. Mutual funds are also less risky when compared with stock markets. Lesser risks and service of financial experts with regards to investing in stock market has contributed to the popularity of mutual funds and today it remains to be a financial instrument highly demanded in the market. Even if you have little money to invest you can choose this scheme.
Saturday, August 23, 2008
Comodity markets?
A market that transacts business with commodities of all nature referred as commodity markets. Commodity market was initially meant only for agricultural products and that too in the local market. Industrializations, globalizations, technological advancements, increasing demand from consumers and intense competition from other players has paved way for commodity markets to cross boundaries and break barriers with regards to the commodity traded.
Commodity markets deal in the trade of commodities like gold, cotton, crude oil, orange juice etc. Many items both perishable and non perishable, finished goods, raw materials and semi finished goods will be traded in this market at the international level. Commodity market does not necessarily require you to buy or sell the commodities but you can even exchange them.
Commodity market works on certain principles. Firstly the trading has to be done only for standard products. Secondly the transaction takes place through a future contract. According to this contract the commodities will be sold or bought on a future date. However the price at which they are sold will be the price agreed during the contract.Similarly commodity marketing also makes use of another type of contract called spot contract. In this contract the goods are to be transferred as soon as the contract is made. However it has also been argued that the purpose of a spot contract is to exercise a future contact in due course of time. Some of the commodities investing market are commodity food market, commodity petroleum market and commodity fund investing.
Investing in Commodities
Commodity investing was initially received well only by a few sectors. Commodities investing were first restricted to the trade and exchange of commodities meant for regular and day to day use. However the awareness in the subsequent stages has brought all sectors into the manifold of commodity investing and has enabled speedy movements, transfer and transaction of goods and services. The following are the benefits of investing in commodities market:
Reduced Risks
As an investor your chances of risks are very less if you choose to invest in commodity. Therefore the gains from commodity investing will be helpful for you to balance other losses due to other financial instruments in your portfolio. The chances of risks are lower because commodity investing primarily deals with diverse items. Moreover when the contracts are entered for a future date at the current time you can exercise reasonable care and see to it that the chances of risks are reduced or nil.
Helps to Fix Price Easily
The performance of commodity market can be monitored by analyzing the performance of bond and share market because in most cases a commodity market will perform well when the others don't perform and vice versa. It is therefore possible to easily predict the prices and make the contracts by considering the ups and downs in other markets. A prerequisite for this is that the assets in the commodity market should not be correlated with the stock and bond market.
Commodity markets deal in the trade of commodities like gold, cotton, crude oil, orange juice etc. Many items both perishable and non perishable, finished goods, raw materials and semi finished goods will be traded in this market at the international level. Commodity market does not necessarily require you to buy or sell the commodities but you can even exchange them.
Commodity market works on certain principles. Firstly the trading has to be done only for standard products. Secondly the transaction takes place through a future contract. According to this contract the commodities will be sold or bought on a future date. However the price at which they are sold will be the price agreed during the contract.Similarly commodity marketing also makes use of another type of contract called spot contract. In this contract the goods are to be transferred as soon as the contract is made. However it has also been argued that the purpose of a spot contract is to exercise a future contact in due course of time. Some of the commodities investing market are commodity food market, commodity petroleum market and commodity fund investing.
Investing in Commodities
Commodity investing was initially received well only by a few sectors. Commodities investing were first restricted to the trade and exchange of commodities meant for regular and day to day use. However the awareness in the subsequent stages has brought all sectors into the manifold of commodity investing and has enabled speedy movements, transfer and transaction of goods and services. The following are the benefits of investing in commodities market:
Reduced Risks
As an investor your chances of risks are very less if you choose to invest in commodity. Therefore the gains from commodity investing will be helpful for you to balance other losses due to other financial instruments in your portfolio. The chances of risks are lower because commodity investing primarily deals with diverse items. Moreover when the contracts are entered for a future date at the current time you can exercise reasonable care and see to it that the chances of risks are reduced or nil.
Helps to Fix Price Easily
The performance of commodity market can be monitored by analyzing the performance of bond and share market because in most cases a commodity market will perform well when the others don't perform and vice versa. It is therefore possible to easily predict the prices and make the contracts by considering the ups and downs in other markets. A prerequisite for this is that the assets in the commodity market should not be correlated with the stock and bond market.
Thursday, August 21, 2008
how to do stock market research?
As you enter the world of stock trading, you gradually realize that you cannot survive, much less succeed, here unless you do a serious stock market research.
Stock market research is a highly intricate process and requires lots of time, expertise and experience. you've to learn to do significant and analytical research in order to study price movement of various stocks. While significant research involves studying the financial documents of the company whose stock you're interested in, the technical research involves analyzing the charts and graphs that try to predict the stock movement within a specific time frame.
All this work requires lots of time, attention and perseverance, which isn't every one's cup of tea. Most stock traders do a part of the research themselves and also receive expert's guidance from their stock broker as well.
It must be clearly understood that the job of your broker isn't limited to just executing your orders instantly. He also provides you the appropriate and efficient research facilities and tools through research section of his site that enable you to take important trading decisions fast and efficiently.
Some of these facilities include latest stock market price quotes and charts, news headline, symbol finder, stock screener, market scanner and so on.
When you think of trading a particular stock, first of all you have to find its trading symbol. This symbol identifies the stock. You enter the symbol on the relevant page of the site and get its price latest to the second. You can find whether the price of the stock is going up or down and also by what percentage it's doing so. The interface provides the opening price of the stock on that day, the high and the low levels the price reached, its bid price and ask price, the 52-week highest and the lowest price, the average trade volume and so on. You may also see a graph showing the price movement of the stock in course of the trading day. All this information is of crucial importance for an investor and even slightly wrong information can play havoc with trading prospects.
News headlines are another cardinal feature of the significant stock market research. The latest news flashes point to the overall market scenario of the trade and industry at local, regional, national and international levels. The news flashes provide every piece of information that may be necessary in formulating your trading decisions. The newsflashes contain information about the important companies whose stocks may appear interesting to the investors. You get to know the opinions of important government functionaries about the trade and economy of the country. for example, your anxiety about the effects of inflation on the country economy may be reduced by the news flashed on 3rd June, 2008 at 8.49 a.m that said: Fed Talk: Bernanke Sees Inflation Moderating Next Year.
The newsflashes too are updated by seconds.
Yet another important tool which may be called by any name, say stock screener, provides information about hot stocks in various industrial sectors. You can get the required information in three simple steps in a matter of seconds. You have to choose the name of the industry from the pull down list, then choose the sector and click on the View Results button to see the position of the stocks under the chosen sector. You also find the names of the most active stocks on a particular day.
If you're interested in investing in ETFs, you can seek out ETF Center on the relevant page of the site. You can get a snapshot of the overall ETF investment scenario. Here too you can get the latest price of a particular ETF, the percentage change in price whether it's going up or down along with the total trade volume at a particular time on any working day. The page also contains the open price, last price, day change, day high and low, 52-week high and low price position, average daily volume, shares outstanding, premium/ discount amount, premium/discount percentage and so on. This information is followed by the daily performance chart of the fund. The page also provides the dividend payment details. The portfolio data contains information about the average P/E, average P/B, average market cap, average turn over and so on.
The latest to the second information can be provided only if the site of the broker is backed by the latest state-of-the-art technology.
Stock market research is a highly intricate process and requires lots of time, expertise and experience. you've to learn to do significant and analytical research in order to study price movement of various stocks. While significant research involves studying the financial documents of the company whose stock you're interested in, the technical research involves analyzing the charts and graphs that try to predict the stock movement within a specific time frame.
All this work requires lots of time, attention and perseverance, which isn't every one's cup of tea. Most stock traders do a part of the research themselves and also receive expert's guidance from their stock broker as well.
It must be clearly understood that the job of your broker isn't limited to just executing your orders instantly. He also provides you the appropriate and efficient research facilities and tools through research section of his site that enable you to take important trading decisions fast and efficiently.
Some of these facilities include latest stock market price quotes and charts, news headline, symbol finder, stock screener, market scanner and so on.
When you think of trading a particular stock, first of all you have to find its trading symbol. This symbol identifies the stock. You enter the symbol on the relevant page of the site and get its price latest to the second. You can find whether the price of the stock is going up or down and also by what percentage it's doing so. The interface provides the opening price of the stock on that day, the high and the low levels the price reached, its bid price and ask price, the 52-week highest and the lowest price, the average trade volume and so on. You may also see a graph showing the price movement of the stock in course of the trading day. All this information is of crucial importance for an investor and even slightly wrong information can play havoc with trading prospects.
News headlines are another cardinal feature of the significant stock market research. The latest news flashes point to the overall market scenario of the trade and industry at local, regional, national and international levels. The news flashes provide every piece of information that may be necessary in formulating your trading decisions. The newsflashes contain information about the important companies whose stocks may appear interesting to the investors. You get to know the opinions of important government functionaries about the trade and economy of the country. for example, your anxiety about the effects of inflation on the country economy may be reduced by the news flashed on 3rd June, 2008 at 8.49 a.m that said: Fed Talk: Bernanke Sees Inflation Moderating Next Year.
The newsflashes too are updated by seconds.
Yet another important tool which may be called by any name, say stock screener, provides information about hot stocks in various industrial sectors. You can get the required information in three simple steps in a matter of seconds. You have to choose the name of the industry from the pull down list, then choose the sector and click on the View Results button to see the position of the stocks under the chosen sector. You also find the names of the most active stocks on a particular day.
If you're interested in investing in ETFs, you can seek out ETF Center on the relevant page of the site. You can get a snapshot of the overall ETF investment scenario. Here too you can get the latest price of a particular ETF, the percentage change in price whether it's going up or down along with the total trade volume at a particular time on any working day. The page also contains the open price, last price, day change, day high and low, 52-week high and low price position, average daily volume, shares outstanding, premium/ discount amount, premium/discount percentage and so on. This information is followed by the daily performance chart of the fund. The page also provides the dividend payment details. The portfolio data contains information about the average P/E, average P/B, average market cap, average turn over and so on.
The latest to the second information can be provided only if the site of the broker is backed by the latest state-of-the-art technology.
Wednesday, August 20, 2008
Creating a succesful portfolio
Is your mutual fund not providing the type of performance you're looking for? you're not alone. According to statics over a ten year period from April 30th, 1995 to April 30th, 2005 78.6% of active mutual fund managers failed to beat the S&P 500? That means that if you invested in mutual funds during this time period your fund had only a 20% chance of outperforming the S&P 500. These managers are supposed to be the so called experts in the stock market, yet they can't even beat the performance of an index that measures general marketing conditions?
There is an age old saying, if you want something done right do it yourself and this saying certainly applies to the stock market. With just a little research in your spare time, you can create your own portfolio that can trounce the pathetic performance of these mutual funds and grow your money at a rate you would be proud of.
As of May 30th, 2007, the S&P five hundred over a five year period is up over 42%. That is an average growth rate of 8.4% a year. If you can create a portfolio that can exceed 8.4% a year yourself, you'll not only be outperforming the S&P 500, but you'll also be outperforming most of the mutual fund managers. So how do you build your own portfolio so you can fire your mutual fund? Here are some tips:
Tip 1 - don't fight the indexes. The three general indexes that measure market performance are the Dow Jones Industrial average, the Standard & Poor five hundred Index and the NASDAQ composite index. Take a look at a one year chart for these indexes. What direction is the chart moving? If the indexes are downward, monitor your current positions cautiously, sell and take profits when appropriate and don't buy into any new positions until the general market is headed back up. Three out of every four stocks follow the general market trend. attempting to find winners in a downward market is like attempting to swim upstream. It can be done, but the odds are against you.
Tip two - Change is necessary. The best performing stocks perform well because there is a change that takes place that causes the increase in price. for example, Apple's stock is up over 50% from one year ago. What change took place almost a year ago that is driving such a large increase in stock value? seek out a change in products, a change in financial performance, a change in management or a change in the industry.
Tip three - Show me the money. How the company is performing financially is one of the key fundamentals to driving stock price. If the company is consistently growing sales revenues, net profits and corporate earnings at a high rate quarterly and annually, that is a clear sign that you may have a winner on your hands.
So make absolutely sure you consider these three tips if you want to build a portfolio that will make your mutual fund manager jealous. Doing so will allow you to be able to fire your mutual fund!
There is an age old saying, if you want something done right do it yourself and this saying certainly applies to the stock market. With just a little research in your spare time, you can create your own portfolio that can trounce the pathetic performance of these mutual funds and grow your money at a rate you would be proud of.
As of May 30th, 2007, the S&P five hundred over a five year period is up over 42%. That is an average growth rate of 8.4% a year. If you can create a portfolio that can exceed 8.4% a year yourself, you'll not only be outperforming the S&P 500, but you'll also be outperforming most of the mutual fund managers. So how do you build your own portfolio so you can fire your mutual fund? Here are some tips:
Tip 1 - don't fight the indexes. The three general indexes that measure market performance are the Dow Jones Industrial average, the Standard & Poor five hundred Index and the NASDAQ composite index. Take a look at a one year chart for these indexes. What direction is the chart moving? If the indexes are downward, monitor your current positions cautiously, sell and take profits when appropriate and don't buy into any new positions until the general market is headed back up. Three out of every four stocks follow the general market trend. attempting to find winners in a downward market is like attempting to swim upstream. It can be done, but the odds are against you.
Tip two - Change is necessary. The best performing stocks perform well because there is a change that takes place that causes the increase in price. for example, Apple's stock is up over 50% from one year ago. What change took place almost a year ago that is driving such a large increase in stock value? seek out a change in products, a change in financial performance, a change in management or a change in the industry.
Tip three - Show me the money. How the company is performing financially is one of the key fundamentals to driving stock price. If the company is consistently growing sales revenues, net profits and corporate earnings at a high rate quarterly and annually, that is a clear sign that you may have a winner on your hands.
So make absolutely sure you consider these three tips if you want to build a portfolio that will make your mutual fund manager jealous. Doing so will allow you to be able to fire your mutual fund!
Tuesday, August 19, 2008
Advantages of using a stock broker as a new investor.
If you're new to the world of stock trading and investments, you likely realize that there is tremendous pressure in the financial world today. New investment opportunities are being discovered every day that can potentially bring wealth and prosperity to your portfolio. Also, online stock investing has opened the door wide for overseas stock trading, giving you more investment opportunities than ever. As a new investor, all these can be overwhelming. So, how do you make wise decisions concerning your finances? How do you manage and invest your money while protecting your assets? As a new investor, a stock broker may be your answer. Continue reading to discover some lucrative benefits of using a stock broker as a new investor.
What is a Stock Broker?
A stock broker is someone who buys and sells stocks for an investor. Stocks, also called equities, are simply shares of ownership in a particular company. If you own five hundred shares in a company that are worth $2.00 per share, you actually have $1,000 in equity. Your profits are decidedby how much you pay for the equities initially, the commissions paid to your broker, and how much the equities are worth when you sell or trade them. A broker is licensed and regulated by the federal government or an overseas authority, depending on where they're located. Stock brokers receive a commission when buying or selling stocks. This is how they earn a profit. they're also advisors, recommending which stocks to buy or which to avoid.
Recommending a Venture
Stock brokers can assist you by recommending ventures in stock market trading or investing. A venture is a business decision or investment that has the potential to earn profits. You invest initial capital in hopes to earn more profits in return. One benefit of using a stock broker is he/she can recommend ventures based on their research. You might not have the knowledge or time to research the stock market. A stock broker does this for you. It's a full-time job for them, so they're able to recommend ventures that look promising. They can help you discover hidden treasures in the market you would not find on your own.
Managing Your Portfolio
Your stock portfolio shows your initial capital, profits or losses, a record of past stock trades, etc. A portfolio reveals if you're experiencing prosperity or misfortune. Either way, you should always be aware of your financial standing. A stock broker helps by managing your portfolio and keeping it up-to-date so you'll always know where you stand.
Helping you Learn the Ropes of Investing
A stock broker can help you learn the ropes of investing if you're new to stock trading. There are terms and legalities you should be familiar with before you venture to trade stocks on your own. A stock broker will advise you, educate you and guide you through the stock exchange process. This is very beneficial if you decide to trade stocks on your own later.
Overseas Stock Investments
Trading overseas has become commonplace in today's world of online technology. A stock broker who is familiar with overseas trading can help you expand your investment range to stocks around the world. Every day, people are reporting how they made their fortune in overseas stock investing. It's a real way to gain wealth with the right stock investments in place. A stock broker can help you expand to this market easily because they comprehend how the different currencies are used as well as how and where to invest overseas.
Using an Online Stock Broker
The days of high stock broker commissions are gone. Online stock brokers often charge minimal commissions because of their low overhead costs. Even overseas investments can easily be made with the click of a mouse. you've the benefit of working with a stock broker directly from your home instead of visiting an office or calling the broker. This saves both time and money for you and the broker.
Managing Mutual or Equity Funds
A stock broker can also help you manage your mutual funds, or equity funds. These are funds that are invested in a variety of stocks, thus, spreading your capital among more then one companies - not only one. Investment opportunities in mutual funds can often result in long-term profits. Many investors use these to build a retirement fund. The benefit of using an experienced stock broker is they've been watching different equity funds for years and know the long-term patterns of these investments. You can benefit from their years of observation, and avoid long-term losses.
There are many other benefits of using a stock broker as an investment and financial advisor if you're new to stock trading. don't miss investment opportunities that could bring wealth and prosperity in the near future!
What is a Stock Broker?
A stock broker is someone who buys and sells stocks for an investor. Stocks, also called equities, are simply shares of ownership in a particular company. If you own five hundred shares in a company that are worth $2.00 per share, you actually have $1,000 in equity. Your profits are decidedby how much you pay for the equities initially, the commissions paid to your broker, and how much the equities are worth when you sell or trade them. A broker is licensed and regulated by the federal government or an overseas authority, depending on where they're located. Stock brokers receive a commission when buying or selling stocks. This is how they earn a profit. they're also advisors, recommending which stocks to buy or which to avoid.
Recommending a Venture
Stock brokers can assist you by recommending ventures in stock market trading or investing. A venture is a business decision or investment that has the potential to earn profits. You invest initial capital in hopes to earn more profits in return. One benefit of using a stock broker is he/she can recommend ventures based on their research. You might not have the knowledge or time to research the stock market. A stock broker does this for you. It's a full-time job for them, so they're able to recommend ventures that look promising. They can help you discover hidden treasures in the market you would not find on your own.
Managing Your Portfolio
Your stock portfolio shows your initial capital, profits or losses, a record of past stock trades, etc. A portfolio reveals if you're experiencing prosperity or misfortune. Either way, you should always be aware of your financial standing. A stock broker helps by managing your portfolio and keeping it up-to-date so you'll always know where you stand.
Helping you Learn the Ropes of Investing
A stock broker can help you learn the ropes of investing if you're new to stock trading. There are terms and legalities you should be familiar with before you venture to trade stocks on your own. A stock broker will advise you, educate you and guide you through the stock exchange process. This is very beneficial if you decide to trade stocks on your own later.
Overseas Stock Investments
Trading overseas has become commonplace in today's world of online technology. A stock broker who is familiar with overseas trading can help you expand your investment range to stocks around the world. Every day, people are reporting how they made their fortune in overseas stock investing. It's a real way to gain wealth with the right stock investments in place. A stock broker can help you expand to this market easily because they comprehend how the different currencies are used as well as how and where to invest overseas.
Using an Online Stock Broker
The days of high stock broker commissions are gone. Online stock brokers often charge minimal commissions because of their low overhead costs. Even overseas investments can easily be made with the click of a mouse. you've the benefit of working with a stock broker directly from your home instead of visiting an office or calling the broker. This saves both time and money for you and the broker.
Managing Mutual or Equity Funds
A stock broker can also help you manage your mutual funds, or equity funds. These are funds that are invested in a variety of stocks, thus, spreading your capital among more then one companies - not only one. Investment opportunities in mutual funds can often result in long-term profits. Many investors use these to build a retirement fund. The benefit of using an experienced stock broker is they've been watching different equity funds for years and know the long-term patterns of these investments. You can benefit from their years of observation, and avoid long-term losses.
There are many other benefits of using a stock broker as an investment and financial advisor if you're new to stock trading. don't miss investment opportunities that could bring wealth and prosperity in the near future!
Mutual funds that act like hedge funds.
Today we take a look at mutual funds that are not structured like typical mutual funds, but act more like hedge funds for managing risk in your portfolio.
Today we take a look at mutual funds that are not structured like typical mutual funds, that is, funds that don't invest exclusively in stocks and bonds. These can be powerful additions to the risk management of our investment portfolio. Appropriate use of these mutual funds can be quite effective in providing both diversification and hedging of your investment portfolio. According to the Securities and Exchange Commission, there are several types of hedge funds. However, one of the more conservative strategies is the Long/Short fund. Long / Short Funds: Long/Short which includes sector and market neutral/relative value funds. These funds try to exploit perceived anomalies in the prices of securities. Long/short equity is the most frequently used strategy among hedge funds. Arbitrage Funds: Another of the lower risk strategies is Risk/Merger Arbitrage. These funds attempt to profit from pending merger transactions by, for example, taking a long position in the stock of the company to be acquired in a merger, leverage buyout or takeover and simultaneously taking a short position in the stock of the acquiring company. Since these approaches to hedging are fairly conservative, they are ones that would be most appropriate in managing portfolio risk. Since most of these have a low correlation to the overall market some investment advisors even recommend using these mutual funds as alternatives to bond funds in your portfolio. Morningstar has even added a category called Long/Short to its listing of mutual funds. Morningstar has arbitrage mutual funds fall into that same category. There are many new entrants into this field. While there may be several of the newer funds that are excellent offerings, the most straightforward way to judge the risk management performance of these funds is to look at their history during at least some part of the most recent bear market (2000 2002). Some example mutual funds that fared reasonably well in the last bear market include: Merger Fund (MERFX): This fund has been around for over 10 years. The basic approach is to capture the spread between the share price of companies that might be acquired and the proposed purchase price. This is done by buying the shares of the target firms of deals and occasionally shorting the stocks of the acquiring firm. This fund did fairly well during the bear market, although it had only fair performance in 2005. Schwab Hedged Equity Fund (SWHIX): A clone of its older sibling (SWHEX) that has significantly lower minimum investment, its managed by a group that has a long history of success in the small cap stock arena. The volatility of this fund is well below the market, and its returns have been good for a long/short fund. Gateway Fund (GATEX): This fund has been around for years. It has a unique approach of holding large cap stocks with high dividend yields and selling covered calls for extra income, while holding put options to guard against a market downturn. Once again did reasonable well in the bear market years. Calamos Market Neutral (CVSIX): One of the older offerings in the long/short group, it has a good track record that extends back through the 2000-2002 bear market. This fund utilizes a convertible arbitrage approach to target an 8-10% long term annual return. (This one has a sales load.) Hussman Strategic Growth (HSGFX): This is a hard one to categorize. John Hussman runs the fund, and buys stocks based on his valuation models, and then hedges against market risk by synthesizing a short position in a couple of the major indices with short call options. The hedge varies based on his appraisal of current market conditions. This is not your typical mutual fund, but over the last several years has had a very low drawdown, with reasonable returns. As you can see, the universe of mutual funds that adopt the best strategies of hedge funds is increasing. These funds are a powerful tool in building a diversified, low risk portfolio, hedging away some of the market risk while keeping a reasonable return for your investments. But keep in mind that while all these fall into Morningstars category of long/short funds, they each have unique approaches to the concept of hedging. So before you invest in any of them be sure you understand the specifics of each approach to ensure it is a good fit for your portfolio.
Today we take a look at mutual funds that are not structured like typical mutual funds, that is, funds that don't invest exclusively in stocks and bonds. These can be powerful additions to the risk management of our investment portfolio. Appropriate use of these mutual funds can be quite effective in providing both diversification and hedging of your investment portfolio. According to the Securities and Exchange Commission, there are several types of hedge funds. However, one of the more conservative strategies is the Long/Short fund. Long / Short Funds: Long/Short which includes sector and market neutral/relative value funds. These funds try to exploit perceived anomalies in the prices of securities. Long/short equity is the most frequently used strategy among hedge funds. Arbitrage Funds: Another of the lower risk strategies is Risk/Merger Arbitrage. These funds attempt to profit from pending merger transactions by, for example, taking a long position in the stock of the company to be acquired in a merger, leverage buyout or takeover and simultaneously taking a short position in the stock of the acquiring company. Since these approaches to hedging are fairly conservative, they are ones that would be most appropriate in managing portfolio risk. Since most of these have a low correlation to the overall market some investment advisors even recommend using these mutual funds as alternatives to bond funds in your portfolio. Morningstar has even added a category called Long/Short to its listing of mutual funds. Morningstar has arbitrage mutual funds fall into that same category. There are many new entrants into this field. While there may be several of the newer funds that are excellent offerings, the most straightforward way to judge the risk management performance of these funds is to look at their history during at least some part of the most recent bear market (2000 2002). Some example mutual funds that fared reasonably well in the last bear market include: Merger Fund (MERFX): This fund has been around for over 10 years. The basic approach is to capture the spread between the share price of companies that might be acquired and the proposed purchase price. This is done by buying the shares of the target firms of deals and occasionally shorting the stocks of the acquiring firm. This fund did fairly well during the bear market, although it had only fair performance in 2005. Schwab Hedged Equity Fund (SWHIX): A clone of its older sibling (SWHEX) that has significantly lower minimum investment, its managed by a group that has a long history of success in the small cap stock arena. The volatility of this fund is well below the market, and its returns have been good for a long/short fund. Gateway Fund (GATEX): This fund has been around for years. It has a unique approach of holding large cap stocks with high dividend yields and selling covered calls for extra income, while holding put options to guard against a market downturn. Once again did reasonable well in the bear market years. Calamos Market Neutral (CVSIX): One of the older offerings in the long/short group, it has a good track record that extends back through the 2000-2002 bear market. This fund utilizes a convertible arbitrage approach to target an 8-10% long term annual return. (This one has a sales load.) Hussman Strategic Growth (HSGFX): This is a hard one to categorize. John Hussman runs the fund, and buys stocks based on his valuation models, and then hedges against market risk by synthesizing a short position in a couple of the major indices with short call options. The hedge varies based on his appraisal of current market conditions. This is not your typical mutual fund, but over the last several years has had a very low drawdown, with reasonable returns. As you can see, the universe of mutual funds that adopt the best strategies of hedge funds is increasing. These funds are a powerful tool in building a diversified, low risk portfolio, hedging away some of the market risk while keeping a reasonable return for your investments. But keep in mind that while all these fall into Morningstars category of long/short funds, they each have unique approaches to the concept of hedging. So before you invest in any of them be sure you understand the specifics of each approach to ensure it is a good fit for your portfolio.
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