Stock Market

Retail investors are warming up to the market

January 6, 2011 By admin Leave a Comment

During the week of January 12, 2011, the stock market saw an increase of $3.8 billion from retail investors. The Wall Street Journal reported that the additional $3.8 billion was a result of retailers investing more than they took out of the market during the previous quarter. The extra money added 0.09% to the total assets pf United States stock funds.

Although the additional money excited investors, that excitement soon cooled after being reminded of the $35 billion that retail investors withdrew from the market in previous quarters. According to the Journal, retail investors took more money from the Market than invested in recent years so $3.8 billion is a mere reimbursement for all of the money taken out. In addition, the stock market is typically known to rise in January anyway so the $3.8 billion jump was nothing out of the ordinary.Although retail investors put money in the market this quarter, it’s just a drop in the bucket when compared with what they took out.

While a $3.8 billion increase assists in the Market’s overall recovery, the stock market needs more long-term investments in order to completely recover from the downfall. Over the past two years the economy has suffered over $100 billion in losses and three billion dollars is not going to help that much. In order to succeed once again, the Market must build a bridge of trust between consumers that ensures investors that all of their money and assets will not go down the toilet again. Investors have been burned once and are not planning to allow it to happen again, so the stock market needs to show major improvements before long-term investments take place again. If corporations really want the attention of small businesses in the Market, they will lower their stock prices and work hard to improve residual income.

Filed Under: Stock Market Tagged With: Market maker

Tips for Beginners in Trading

December 28, 2010 By admin Leave a Comment

The stock market is a scary place for a person who is just starting out in investing. Should one just dive in and hope for the best? Some people may actually choose this route, but the best route is to do your research. There are no guarantees in life and even less in finances, so do not risk your life savings on a hunch.

There are a few resources that can provide information on the ins and outs of the trading world. Many of the online trading sites offer information to guide you through the maze of terminology and ways of conducting a trade. Some online trading sites that have these resources are:

Fidelity, www.fidelity.com
Scottrade, www.scottrade.com
TD Ameritrade, www.tdameritrade.com
Charles Schwab, www.schwab.com
ING Sharebuilder, www.sharebuilder.com

There are also other sites that can provide information to help you get started in the financial markets. The US Securities and Exchange Commission has an online beginner’s guide to investing at www.sec.gov/investor/pubs/begininvest.htm which lists publications for a variety of investment topics and calculators. If you are not comfortable doing your own research you may want to consider a financial advisor. Financial advisors can be found as individual agents or as part of banks or other financial institutions. The National Association of Personal Financial Advisors (NAPFA) at www.napfa.org can help you locate a financial advisor in your area.

Whatever route you choose to invest your money make sure you know who you are dealing with and where your money is going. Do as much research as possible to know how processes work and what fees are involved. Also work with your accountant to determine how your investing plays into your taxes. Incorrect reporting can lead to headaches that could take a lot of time and money to straighten out. Therefore, take your time to understand what you are getting into. If you make the correct choices you can invest in a bright financial future.

Filed Under: Advice, Free Trade, International Markets, Stock Market, World Trade Tagged With: Investing online, Investment, ShareBuilder

Popular Stocks for Those Who Love Animals

December 27, 2010 By admin Leave a Comment

Often when investing many individuals seek to invest in companies that match their interests. For individuals who love pets and animals it can be hard to find companies that are considered animal friendly. There are a couple of different ways to approach this situation. One would be to invest in companies that are focused on providing products and services for animals. Examples of these type of companies would be as follows:

PetSmart (PETM) a retail pet store that is a major supporter of animal rescue which can be found at www.petsmart.com online. VCA Antech (WOOF) owns veterinary clinics and labs throughout the United States while IDEXX Laboratories (IDXX) is a company that makes several of the tests and other products used by veterinarians. Animal Health International (AHII) also is a maker of animal health products used by veterinarians and the public. One of the largest online pet supplies companies to the public is PetMed Express (PETS) and has been doing well in the stock market.

Another way of looking at pet friendly stocks are companies who do not necessarily sell pet supplies, but go out of their way to promote the well being of animals. For example, if you were looking to invest in an airline that was pet friendly Jet Blue (JBLU) would be a good choice. According to Petfinder.com, not only do they allow your small cats or dogs to fly on board with you, “if a pet becomes ill mid-flight, JetBlue will ring the cabin crew to see if there is a veterinarian on board who can treat the pet immediately – showing their dedication to the health of our furry friends”. See Jet Blue’s site at http://jetblue.com/jetpaws/ for more information on their JetPaws program. Also, many companies will list on their website any community involvement programs they support or have created. Do some research and you may find some great pet friendly investments.

Filed Under: Advice, International Markets, Stock Market, World Trade Tagged With: Business, Pet, Recreation, Veterinary medicine

History of the Stock Market

December 25, 2010 By admin Leave a Comment

Getting involved in the stock market can be exciting and challenging. Whenever you dive into a new area it is always a good idea to have some background information. How many individuals who invest in stocks actually know anything about how the whole process started? Stocks were not always the focus of trade in markets at the beginning. It is stated that in France in the 12th Century debts were traded and in the 13th Century a similar situation occurred in Antwerp. In the same period Venice had trading of government securities. Other countries had their own systems and it is said the first sold stock was in 1602 by a Dutch Company looking to get into the spice trade. So when did the United States first begin trading and what was traded?

In 1790 bonds were issued in an attempt to repay the debt of the Revolutionary War. In 1792 the first agreement was signed under a buttonwood tree and location was established in a coffee shop in New York City for trading. This location was on the current symbol of trading today, Wall Street. The first listed company was the Bank of New York. The New York Stock Exchange has its history online for review at http://www.nyse.com/about/history/1089312755484.html
and a variety of other information to help investors learn about the stock market.

There are many stock markets in today’s global marketplace, all with interesting and colorful histories. In doing research on the various markets one can learn a lot about one’s own country and other countries. It is important when planning where you are going in your future to know and understand your past. This is true not only for personal decisions but business decisions as well. Being an informed and educated investor will help you make the best decisions for your portfolio.

Filed Under: Advice, Free Trade, International Markets, Stock Market, World Trade Tagged With: Investing, New York Stock Exchange, Stock Market, Wall Street

Where Does the US Fit Into International Trade?

December 23, 2010 By admin Leave a Comment

The global market is ever expanding and highly competitive. So where does the United States fit into the ranks of the global competitors? According to the United Nations Conference on Trade and Development the United States is 2nd on the Trade and Development Index. The UNCTAD states that basically the TDI combines the following functions, it monitors the performance of trade and development of various countries, it identifies factors that can affect their performance and provides a “policy tool” to focus trade on development on both a national and international level while helping to reduce poverty. The UNCTAD site at www.unctad.org also offers many resources for information on the global market.

According to the International Trade Administration as of 2009 the United States was the world’s leaders in exporting commercial goods and services. The US was third in world merchandise exports. In merchandise exports the US follows behind Germany and China. Manufactured goods made up 81% of the total exports from the US and of 2008 the US had 288,747 known exporters operating in the country. There was a drop in exports from 2008 to 2009 from a value of 140 billion to 130 billion but import values fell from 2.55 trillion to 1.96 trillion. Of the imports 76% were manufactured goods.

A great deal of information on the United States and international trading can be found at the US Department of Commerce International Trade Commission at http://trade.gov under Data and Analysis and Statistics. If you want to keep up to date a monthly International Trade Update is available under Publications and International Trade Update. Also the International Trade Administration has the site Invest in America at www.investamerica.gov which focuses on foreign direct investment. The site contains investments guides, links to online investment magazines and journals and various other information such as contacts to Chambers of Commerce.

Filed Under: Advice, Free Trade, International Markets, Stock Market, World Trade Tagged With: Export, Foreign direct investment, International trade

What are the Various Types of Investments?

December 22, 2010 By admin Leave a Comment

For a beginning investor the world of finance can be frightening. The first question many ask are what types of investment vehicles are out there for the everyday person? Let’s take a basic look at some of the most popular types of investments. These investments are stocks and bonds. First let’s start with stocks.

Stocks come in two types: common and preferred. Both represent a claim of part ownership of a company’s assets and earning. Common stocks allow for dividends and the ability to vote when shareholder’s meetings take place within the company. Preferred stocks do not allow for voting yet they will receive dividends usually at a higher rate than common stock holders. There are different type of shares that can be classified by a company. The stocks represent parts or a shares of a total amount that a company has issued. The New York Stock Exchange has a page entitled Investor Education at www.nyse.com/about/education/1022630233386.html which is a good resource for a beginner information.

The Library of Economics and Liberty at www.econlib.org/library/Enc/Bonds.html states that bonds are “fixed-income financial assets essentially IOUs that promise the holder a specified set of payments. The value of a bond, like the value of any other asset, is the present value of the income stream one expects to receive from holding the bond”. The government is the main source to issue bonds, but corporations and municipal governments may also issue bonds to the public. U.S. Savings bonds are the most popular form of bond sold, but there are other types of bonds such as treasury bills, treasury notes and treasury bonds that individuals can purchase. Maturity rates differ from one type of bond to the next, so it is important that an individual do research in regards to maturity and interest rates.

Which investment type you choose should be decided upon after careful research. Look at your lifestyle and how much risk you are willing to take.

Filed Under: Advice, International Markets, Stock Market, World Trade Tagged With: Bonds, Business, Common stock, Investment

The World of Mutal Funds

December 21, 2010 By admin Leave a Comment

: Image via Wikipedia

Mutual funds can be wonderful investments for the beginning investor. According to the US Securities and Exchange Commission at www.sec.gov, a mutual fund “is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments”. There are a variety of companies that deal with mutual funds. Some of the more well known companies are Vanguard, T. Rowe Price, Dodge & Cox, and Fidelity.

There are several types of funds such as Money Markets, Bonds, Balanced or Stocks. Money market funds are those funds that invest in short-term securities such as commercial paper, repurchase agreements, or short-term bonds. Bonds are debts in which the borrower who is known as the issuer repays the holder at certain intervals with interest. Balanced funds are a combination of investments. Often these funds contain stocks, bonds and cash. Mutual funds which invest in stocks are usually seen as the mutual funds with higher risk, but has greater chance of higher returns.

As in any investment it is important to do your research to learn about the specific funds you are interested in investing in and each investment company should provide information about their funds. Mutual funds can offer a diversified portfolio, but one should still review as much information as possible before investing. Often rates of return will vary from fund to fund and the level of risk will also vary. When viewing information about a companies various funds often they will have the class, year to date performance, and average annual returns for 1 year, 5 years and some 10 years. Also some will list the average rate since inception and the inception date. Distributions may also be listed as well as risk level of the particular fund. With a little research the right fund is out there for you.

Filed Under: Advice, International Markets, Stock Market, World Trade Tagged With: Investment, Money market, Money market fund, Mutual fund, Stock

The Long and Short of Stock Market Trading

December 20, 2010 By admin Leave a Comment

The new investor should understand the primary types of trading that goes on in the stock market before attempting to make any stock picks. Confusion could happen without this knowledge, especially if the indicators for the different trading techniques become mixed up. For example, a day trader looks at the stock market very differently than a trader who does mostly or all long positions.

Day Trading and the Long Position

Day trading involves taking a position on a stock in the morning, monitoring it for a particular amount of change, and then getting out of the position fast in the same day. This kind of trading requires strong nerves and lots of luck to pull off successfully. If somebody claims to be a successful day trader, that person is likely just telling a tall tale. Most sane and secure investors prefer to take long positions that do not require absolute attention throughout the day. The long position means buying a stock, holding onto it for a relatively long period of time, and then selling the stock for, hopefully, a profit.

The Short Position

Taking a short position means betting that a company will fail. This is not intuitive for most nonprofessional traders, so leaving that game to the brokers is a good tip. However, the intriguing trick that the short position brings into the stock market is the ability to make money when stocks are falling as well as when they are rising. If this seems to be somewhat anti-capitalistic, it is — because shorting the market goes against the general grain of what most people understand as capitalism. Investments are supposed to fund companies, the companies are supposed to succeed and everybody’s supposed to make money. Due to this common view of the system, the long position is recommended for personally managed investing. The long position is simply easier to understand.

Filed Under: Advice, Free Trade, International Markets, Stock Market, World Trade Tagged With: Investing, Investor, Stock Market

Who Cares about International Stock Markets?

December 19, 2010 By admin Leave a Comment

The answer is a whole bunch of people. Some US stock market traders watch the close statistics of foreign markets such as the SETI 100 in Bangkok, the Russian RTS, and perhaps most commonly, the Japanese Nikkei. The traders hope to predict what the US markets will do the next day. Other US traders look longingly at the high gains in other countries and wonder how to get in on the action.

Investing in Foreign Stock Markets

The trouble with investing in foreign stock markets is that one really should be physically there to do it. Unless the trader has done extremely well, jumping on a plane to Bangkok will be out of the question. However, some of the action can be had through mutual funds or Exchange Traded Funds (ETFs). These are professionally managed investment vehicles that take almost all the worry out of investing in foreign markets. Instead of suffering over the performance of the foreign markets, the investor only needs to monitor the performance of the brokers who manage the funds. This sure beats globetrotting whenever some foreign market makes a move.

What’s Up with Forex?

Forex is just another way of referring to the foreign currency exchange, more technically known as the FX. This type of investing has to do with the relative values of nations currencies in a world marketplace. The dollar goes up and down, and so do the yen, pound, florin and peso. While these fluctuations have impacts on imports and exports, the FX is concerned with only the relative values. If the florin goes out the roof, it would be good to have obtained a load of them before the skyrocket took off. Then the florins could be sold for a lot of good old US dollars. Of course if the dollar is falling, that might not be the best currency to exchange for the florins. Some other more stable currency could be a better choice.

Filed Under: Advice, Free Trade, International Markets, Stock Market, World Trade Tagged With: Currency, Exchange-traded fund, Foreign exchange market, Forex, Investment, Stock Market

Making Intelligent Stock Selections

December 18, 2010 By admin Leave a Comment

Making intelligent stock selections is a lot easier than making choices that always return high profits. If playing the stock market resembles poker, the techniques being used may not be the right ones. Assuming that the companies in question are honest about their performances, some very simple questions need to be asked.

Growth Business or Stable Business?

An example of a growth company is Microsoft. It started out small and mostly unknown, then blossomed into quite a millionaire-maker. This is by far the exception to the rule. If a company is growing, it will be reflected in their annual reports and other financial documents. The history of the company’s stock price might indicate growth as well, but this is not always a sure thing. The basic principle is to know as much as possible about a company, its history and plans for the future before investing. If all or most of the indicators show growth, the investment will likely return a profit.

Stable businesses can be easily identified by their payment of dividends to stockholders. Investing in the stable company is similar to putting the money into a bank’s Certificate of Deposit (CD). However, the stock could also rise in value. If the stable company is also an industry leader, a rise in stock value will likely happen.

Speculative or Stable Investment?

This is a question that only the investor can answer. What kind of investment is being made, one that has promises for success or one that is as near a safe bet as anything? Perhaps the investment is a little of both. This depends on a lot of variables, but perhaps the most important is the investor’s gut feeling. For example, investing in alternative energy companies can be considered speculative because the market has not yet fully formed. On the other hand, the trend in energy seems to be toward alternatives. How the investor feels about this will have an important impact on the decision.

Filed Under: Advice, Free Trade, Stock Market, World Trade Tagged With: Business, Growth stock, Investing, Investment, Investor, Stock, Stocks and Bonds