By Mike Darwin
The stock market is so crowded with shares of stock for sale that it is almost impossible to know how to find good stocks to invest in. There are shares of stock that are being sold at a high price and there are those being sold in a low price. There are those from well-known companies and there are those coming from virtual nobodies in the business world.
But how do you know what shares of stock are good investment options?
The answer lies in knowing how to analyze the trends of the stock market regarding a particular share of stock. Just as shares of stock are quite different, the trends accompanying them are different as well.
A share of stock, which is on a constant drop, is definitely not a good stock to invest in. You will definitely experience losses with this type. Shares of stock whose price remains constant are not good either. It is much worse if the price will drop. A good share of stock to invest in would be one whose price is on a constant rise and fall such that there will be a better chance to predict the outcome for purposes of selling for a profit.
When you have selected a share of stock, you must devote time to observe and analyze the trend accompanying it from the stock market charts. You must take note of the periods where the price drops and the periods where the price increases. You must also know when to mark the peak of the share of stock because this will be the ideal time to sell it.
There are many ways to earn money in the stock market. However, all these ways start out by knowing how to choose what the good stocks to invest in are.
Did you know that many average investors are making accurate stock investing decisions with top stock trading software? Find out more about stock trading robots here.
Article Source: http://EzineArticles.com/?expert=Mike_Darwin
Thursday, February 19, 2009
Wednesday, February 18, 2009
How to Select Stocks to Invest During a Downturn?
By Shweta Suri
While an individual is planning to invest in a company and purchase its stocks, it becomes very important to know and find out the answer to the following 6 questions. These questions can help you gain a sound and better understanding of the prevailing situation of business and market.
1) What is the source of cash flow?
To evaluate a business, the investor must know about all the sources from where a company generates cash. These evaluations must be based on some specific and reliable facts rather than assumptions.
2) What cash amount is generated?
After estimating the actual source of cash flows, the investors must estimate the actual amount of cash generated and also the timing of flow of cash into the business. Through this process the investors can have a sound understanding of the business and its financial conditions.
3) Is the cash flow in a sustainable condition?
Some people tend to invest in the stocks of a company by considering its profitability over the years. However, things do not function in the similar way and the astute have now realised that the past history holds least importance in the projection of the future cash flow and other business conditions.
Thus, it is recommended that those who wish to invest in a business must examine the sustainability of cash flow in it.
4) What capital amount is required to operate the business?
Different businesses require different amount of capital to operate their activities and generate profits. A manufacturing firm would require huge amount of capital to invest in their property, plant and equipments. While an agency that extends services would require very little capital expenditure for the smooth running of the business and generate profits.
5) What way the management treats the shareholders?
The management must treat the shareholders in a friendly and respectable manner as it is the most qualitative determinant towards success.
6) Are the actions of the management consistent?
Before actually investing in the stocks of a company, the investors must check out the present annual report of the firm. This can help the investors to analyse the consistency and keep a track on the promises made by the company and also evaluate its plans for the coming year.
If you wish to know more about investing in Stocks, please visit www.economynews.in
Shweta Suri
researcher
http://www.economynews.in
Article Source: http://EzineArticles.com/?expert=Shweta_Suri
While an individual is planning to invest in a company and purchase its stocks, it becomes very important to know and find out the answer to the following 6 questions. These questions can help you gain a sound and better understanding of the prevailing situation of business and market.
1) What is the source of cash flow?
To evaluate a business, the investor must know about all the sources from where a company generates cash. These evaluations must be based on some specific and reliable facts rather than assumptions.
2) What cash amount is generated?
After estimating the actual source of cash flows, the investors must estimate the actual amount of cash generated and also the timing of flow of cash into the business. Through this process the investors can have a sound understanding of the business and its financial conditions.
3) Is the cash flow in a sustainable condition?
Some people tend to invest in the stocks of a company by considering its profitability over the years. However, things do not function in the similar way and the astute have now realised that the past history holds least importance in the projection of the future cash flow and other business conditions.
Thus, it is recommended that those who wish to invest in a business must examine the sustainability of cash flow in it.
4) What capital amount is required to operate the business?
Different businesses require different amount of capital to operate their activities and generate profits. A manufacturing firm would require huge amount of capital to invest in their property, plant and equipments. While an agency that extends services would require very little capital expenditure for the smooth running of the business and generate profits.
5) What way the management treats the shareholders?
The management must treat the shareholders in a friendly and respectable manner as it is the most qualitative determinant towards success.
6) Are the actions of the management consistent?
Before actually investing in the stocks of a company, the investors must check out the present annual report of the firm. This can help the investors to analyse the consistency and keep a track on the promises made by the company and also evaluate its plans for the coming year.
If you wish to know more about investing in Stocks, please visit www.economynews.in
Shweta Suri
researcher
http://www.economynews.in
Article Source: http://EzineArticles.com/?expert=Shweta_Suri
Tuesday, February 17, 2009
Hot Stocks For 2009
By Steve Hill
2008 has entered the record books for all of the wrong reasons; the FTSE had its worst year ever! So what about 2009, how will stock markets from around the world perform and which are the stocks to follow? Well in reality you need a crystal ball to be able to answer these questions. 2009 may well be another tough year, Gordon Brown is certainly stating that it will be or is he just covering his own back?
I am a person who enjoys investing on the stock markets and I have to say that I am a bit of a gambler; I am quite prepared to take a risk with my disposable income in the hope that I can increase it etc. Just a quick note however, I am not a financial adviser and therefore anything that I write or suggest in this article should not be seen as advice.
I personally believe in investing an amount of money (an amount that I can afford) on a monthly basis instead of investing lump sums. This way I am able to take advantage of what is commonly referred to as pound cost averaging in the United Kingdom or dollar cost averaging in the United States. This is where when prices are high your monthly contribution may buy fewer shares or fund units but that when prices are low your investment buys more shares or fund units. During these volatile times this method of investing may prove to be the most prudent. Even though stock markets such as the FTSE has had a very poor 2008 and is therefore quite low there may well be significant falls ahead.
Call me a little crazy if you like but I think (and am also putting my money where my mouth is) that the areas to invest in 2009 could be Russia, China, India and Japan. I do not personally invest in individual stocks; I actually purchase units in what is called a collective investment. Let's all hope that 2009 is more prosperous, financially, than 2008! Good luck.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including: stuttering and DVD authoring.
Article Source: http://EzineArticles.com/?expert=Steve_Hill
2008 has entered the record books for all of the wrong reasons; the FTSE had its worst year ever! So what about 2009, how will stock markets from around the world perform and which are the stocks to follow? Well in reality you need a crystal ball to be able to answer these questions. 2009 may well be another tough year, Gordon Brown is certainly stating that it will be or is he just covering his own back?
I am a person who enjoys investing on the stock markets and I have to say that I am a bit of a gambler; I am quite prepared to take a risk with my disposable income in the hope that I can increase it etc. Just a quick note however, I am not a financial adviser and therefore anything that I write or suggest in this article should not be seen as advice.
I personally believe in investing an amount of money (an amount that I can afford) on a monthly basis instead of investing lump sums. This way I am able to take advantage of what is commonly referred to as pound cost averaging in the United Kingdom or dollar cost averaging in the United States. This is where when prices are high your monthly contribution may buy fewer shares or fund units but that when prices are low your investment buys more shares or fund units. During these volatile times this method of investing may prove to be the most prudent. Even though stock markets such as the FTSE has had a very poor 2008 and is therefore quite low there may well be significant falls ahead.
Call me a little crazy if you like but I think (and am also putting my money where my mouth is) that the areas to invest in 2009 could be Russia, China, India and Japan. I do not personally invest in individual stocks; I actually purchase units in what is called a collective investment. Let's all hope that 2009 is more prosperous, financially, than 2008! Good luck.
Steve Hill is a webmaster from Birmingham, he has interests in a number of websites including: stuttering and DVD authoring.
Article Source: http://EzineArticles.com/?expert=Steve_Hill
Monday, February 16, 2009
Stock Market Forecast For 2009
By James Cogburn
The stock market has declined over 40% since it reached the peak in October 2007. The S&P 500 index reached a high of 1,561.80 and over a year later has been trading in the 800 to 900 range. Does this mean the correction is over and we can now look for a new bull market to take place in 2009? We think it is unlikely. Why?
First, the market formed the left side of a parabolic pattern as the market essentially went straight up from 1982 to 2000. Even the 1987 crash now looks like a blip on a bubble formation.
In 1982 the index was at 103.71. Over the next 18 years it increased to 1,527.46. In other words the S&P 500 index increased by 1,500% in 18 years.
Starting in 2000 we had a sharp 3 year correction that sliced the gains over the last 18 years almost in half as the low on the S&P 500 index was 800.58. Then the market moved to a marginal new high at 1,561.80 over the next 4 years.
So to summarize we formed an ominous double top formation over a period of about 7 years. Since then in 2008 the market has started moving down again.
These types of double top patterns over long periods of time after a parabolic rise are very powerful chart patterns that signal much lower prices ahead. And when I say much lower, I mean much lower. It is not pleasant to say how this type of pattern often plays out, but here it is. The first real bounce would be expected down in the 800 area where the last correction ended. And in the latter part of 2008 that is exactly what has happened.
But I would not expect it to hold there for long. After that the next real hold area would be in the 450 area, but there is no guarantee it will even stop there. Even if it does we're probably in a depression or at least a painful recession.
Keep in mind this is an index of 500 stocks and some of them have earnings for now so I would not expect it to be as severe as some of the dot com stocks in 2000 that were taken to the moon on simply an expectation of earnings before the bubble burst. For example, YHOO topped out at around 200 and before it was over the stock was trading below 10 a couple of years later.
However, keep one thing in mind about earnings. If we go into a very serious recession or depression in the economy many of these companies will have negative earnings... in other words they will be losing money.
Bottom Line: The double top formation will not be broken unless the S&P 500 goes back above the old high of 1,561. This looks extremely unlikely in the next 12 months. I think the more likely scenario is that the market moves lower and at some point in 2009 the S&P 500 index dips below 500. The Federal Reserve and Congress are throwing trillions at the economy in hopes that we will avert a serious recession or depression. At this point I think the odds still favor a serious market and economic downturn despite their heroic efforts to stop this ugly scenario from unfolding. Only time will tell whether they will be successful, but I have my doubts unless and until I see encouraging signs in the economy. Until then the stock market is on shaky ground and subject to sudden and violent down days that will wipe out all those trying to pick the bottom in this market at this time before the final bottom is reached at much lower levels.
J. Cogburn
Quick Profit Stock Tips - http://www.QuickProfitStockTips.com/stock_tips.html
Article Source: http://EzineArticles.com/?expert=James_Cogburn
The stock market has declined over 40% since it reached the peak in October 2007. The S&P 500 index reached a high of 1,561.80 and over a year later has been trading in the 800 to 900 range. Does this mean the correction is over and we can now look for a new bull market to take place in 2009? We think it is unlikely. Why?
First, the market formed the left side of a parabolic pattern as the market essentially went straight up from 1982 to 2000. Even the 1987 crash now looks like a blip on a bubble formation.
In 1982 the index was at 103.71. Over the next 18 years it increased to 1,527.46. In other words the S&P 500 index increased by 1,500% in 18 years.
Starting in 2000 we had a sharp 3 year correction that sliced the gains over the last 18 years almost in half as the low on the S&P 500 index was 800.58. Then the market moved to a marginal new high at 1,561.80 over the next 4 years.
So to summarize we formed an ominous double top formation over a period of about 7 years. Since then in 2008 the market has started moving down again.
These types of double top patterns over long periods of time after a parabolic rise are very powerful chart patterns that signal much lower prices ahead. And when I say much lower, I mean much lower. It is not pleasant to say how this type of pattern often plays out, but here it is. The first real bounce would be expected down in the 800 area where the last correction ended. And in the latter part of 2008 that is exactly what has happened.
But I would not expect it to hold there for long. After that the next real hold area would be in the 450 area, but there is no guarantee it will even stop there. Even if it does we're probably in a depression or at least a painful recession.
Keep in mind this is an index of 500 stocks and some of them have earnings for now so I would not expect it to be as severe as some of the dot com stocks in 2000 that were taken to the moon on simply an expectation of earnings before the bubble burst. For example, YHOO topped out at around 200 and before it was over the stock was trading below 10 a couple of years later.
However, keep one thing in mind about earnings. If we go into a very serious recession or depression in the economy many of these companies will have negative earnings... in other words they will be losing money.
Bottom Line: The double top formation will not be broken unless the S&P 500 goes back above the old high of 1,561. This looks extremely unlikely in the next 12 months. I think the more likely scenario is that the market moves lower and at some point in 2009 the S&P 500 index dips below 500. The Federal Reserve and Congress are throwing trillions at the economy in hopes that we will avert a serious recession or depression. At this point I think the odds still favor a serious market and economic downturn despite their heroic efforts to stop this ugly scenario from unfolding. Only time will tell whether they will be successful, but I have my doubts unless and until I see encouraging signs in the economy. Until then the stock market is on shaky ground and subject to sudden and violent down days that will wipe out all those trying to pick the bottom in this market at this time before the final bottom is reached at much lower levels.
J. Cogburn
Quick Profit Stock Tips - http://www.QuickProfitStockTips.com/stock_tips.html
Article Source: http://EzineArticles.com/?expert=James_Cogburn
Friday, February 13, 2009
Here Are Four Tips to Make You Money in the Stock Market
By Grant Dougan
Day trading is becoming an increasingly hot way for the average Joe to earn cash. There are people that take advantage of day trading to supplement their regular income stream, while some people look at it as a full time occupation. Several people making sizable cash with day trading which explains why several people are tempted to try it out.
However, day trading isn't an automatic path to fast and easy money. You will want to understand some fundamentals. You want to have a certain level of knowledge when you get going so that you can make the best of your cash.
Obviously, buying stocks low and selling when the price is high is how you make cash in the markets. Of course, the big question is - how can a person know when to purchase and sell?
Use these insider day trading tips to increase your income potential.
Get prepared ahead of time. You should be alert and ready before executing your first trade. You don't have to spend hours with this, however you should visit a couple of key financial sites you read and it's a good idea to observe a few companies closely. It's critical to have a sound idea of the happenings in the markets.
You don't want to spend time on shares that have little volatility. Changes in share prices are the key for day trading. As you probably know, day trading means moving shares throughout the course of a day. You don't have time to wait around and discover what happens while other money making opportunities are passing you by.
Brush up on your quantitative analysis skills. Being able to interpret financial data and reports is important to being a profitable day trader. Dont be scared - you won't need to become a mathematics genius - but you will discover some basic computations that you will need to have a grasp of.
Develop lots of patience. The individuals who generate the most money are able to control their emotions at any point in time. It's important to hold a stable mind at all times.
If you use the discussed trading tips, you could be on your way to excellent income by day trading.. When you use the right tools and resources, you can take advantage of the unbelievable earnings potential that day trading makes available to you.
Use these day trading tips to help you boost your trading profits and earn some extra cash.
Click here to see a day trading system that has been consistently generating massive profits for it's users.
Article Source: http://EzineArticles.com/?expert=Grant_Dougan
Day trading is becoming an increasingly hot way for the average Joe to earn cash. There are people that take advantage of day trading to supplement their regular income stream, while some people look at it as a full time occupation. Several people making sizable cash with day trading which explains why several people are tempted to try it out.
However, day trading isn't an automatic path to fast and easy money. You will want to understand some fundamentals. You want to have a certain level of knowledge when you get going so that you can make the best of your cash.
Obviously, buying stocks low and selling when the price is high is how you make cash in the markets. Of course, the big question is - how can a person know when to purchase and sell?
Use these insider day trading tips to increase your income potential.
Get prepared ahead of time. You should be alert and ready before executing your first trade. You don't have to spend hours with this, however you should visit a couple of key financial sites you read and it's a good idea to observe a few companies closely. It's critical to have a sound idea of the happenings in the markets.
You don't want to spend time on shares that have little volatility. Changes in share prices are the key for day trading. As you probably know, day trading means moving shares throughout the course of a day. You don't have time to wait around and discover what happens while other money making opportunities are passing you by.
Brush up on your quantitative analysis skills. Being able to interpret financial data and reports is important to being a profitable day trader. Dont be scared - you won't need to become a mathematics genius - but you will discover some basic computations that you will need to have a grasp of.
Develop lots of patience. The individuals who generate the most money are able to control their emotions at any point in time. It's important to hold a stable mind at all times.
If you use the discussed trading tips, you could be on your way to excellent income by day trading.. When you use the right tools and resources, you can take advantage of the unbelievable earnings potential that day trading makes available to you.
Use these day trading tips to help you boost your trading profits and earn some extra cash.
Click here to see a day trading system that has been consistently generating massive profits for it's users.
Article Source: http://EzineArticles.com/?expert=Grant_Dougan
Thursday, February 12, 2009
Friday, October 10, 2008
Stocks and Shares - Tips For Investing Wisely
By Mike Drabble
Even with the present difficulties in the stock market, buying stocks and shares remains one of the most profitable ways for private individuals to invest their money. If the right stocks are selected, a healthy return on investment can be realised that will provide not only an increase in the value of the initial investment but also a regular income through dividend payments. It is important to remember, though, that such an income is by no means guaranteed: stocks and shares are risky investments and their value can fall as well as rise. If a share buyer is to have a chance of avoiding such bad investments, a number of factors must be considered before purchase.
The first is to determine why the shares in question are being bought. This may sound obvious, but relatively few amateur investors consider this. Are the shares being bought to provide an income? If so, the level of income desired must be determined and the past performance of the shares in question examined to check if such an income level is probable or even possible. With this desired outcome, other considerations such as corporate governance should be less important. Alternatively, shares may be purchased not to provide an income but to provide access to a company's AGM (Annual General Meeting) in order to question board members: in this case, past or possible future income is irrelevant, and a no more than the minimum of shares necessary to qualify for AGM attendance should be bought.
Once the reason for buying shares has been determined, it is essential that potential stock purchases be researched comprehensively and time taken to consider the impact of purchase. Again this appears self-evident, but too many small investors buy on a whim and end up with a diminishing investment due to a lack of research. A variety of factors must be considered, both specific to the company being invested in and external to it. What is the company's financial history? Is there any trend in reported profits? Is the share value close to its highest or lowest point over the last year, and if so what are the reasons for this? Are any external factors influencing the share price, such as impending government legislation or imminent changes to the supply of raw materials (for instance the increasing price of oil and gas and its effect on energy companies)? These are just a few of the questions that must be addressed when researching stocks to purchase: it is essential that no relevant question is left unanswered as gaps in research could lead to the purchase of shares in a risky company.
There are many sources of information for research into companies and their shares. Current and past prices and share trading volume can be ascertained from newspapers, websites and the like, while good sources of information on specific companies are the company's website and annual report: the latter should contain a substantial amount of financial and technical information, though of course it should be borne in mind that such information is likely to be presented in a way that suits the company.
Since if an investment declines in value no-one but the investor and his or her dependents will be affected, it is essential that investors take responsibility for research and to do everything possible to avoid risk: too many amateurs don't invest wisely and then seek to blame others for a bad investment, when almost without exception the cause is their own lack of research. The key when thinking of buying or selling stocks and shares is to research diligently, and to do so by using as many independent sources of information as possible, whether in the traditional media or on the web. One such source is the website http://www.sharesadvice.co.uk which explains the basic concepts of stocks and shares and gives advice on researching them as well as buying and selling. There are many others, though: the wise investor will seek out as many as possible before buying, as failing to do so can mean losing a substantial amount of money, something no serious investor wants.
Article Source: http://EzineArticles.com/?expert=Mike_Drabble
Even with the present difficulties in the stock market, buying stocks and shares remains one of the most profitable ways for private individuals to invest their money. If the right stocks are selected, a healthy return on investment can be realised that will provide not only an increase in the value of the initial investment but also a regular income through dividend payments. It is important to remember, though, that such an income is by no means guaranteed: stocks and shares are risky investments and their value can fall as well as rise. If a share buyer is to have a chance of avoiding such bad investments, a number of factors must be considered before purchase.
The first is to determine why the shares in question are being bought. This may sound obvious, but relatively few amateur investors consider this. Are the shares being bought to provide an income? If so, the level of income desired must be determined and the past performance of the shares in question examined to check if such an income level is probable or even possible. With this desired outcome, other considerations such as corporate governance should be less important. Alternatively, shares may be purchased not to provide an income but to provide access to a company's AGM (Annual General Meeting) in order to question board members: in this case, past or possible future income is irrelevant, and a no more than the minimum of shares necessary to qualify for AGM attendance should be bought.
Once the reason for buying shares has been determined, it is essential that potential stock purchases be researched comprehensively and time taken to consider the impact of purchase. Again this appears self-evident, but too many small investors buy on a whim and end up with a diminishing investment due to a lack of research. A variety of factors must be considered, both specific to the company being invested in and external to it. What is the company's financial history? Is there any trend in reported profits? Is the share value close to its highest or lowest point over the last year, and if so what are the reasons for this? Are any external factors influencing the share price, such as impending government legislation or imminent changes to the supply of raw materials (for instance the increasing price of oil and gas and its effect on energy companies)? These are just a few of the questions that must be addressed when researching stocks to purchase: it is essential that no relevant question is left unanswered as gaps in research could lead to the purchase of shares in a risky company.
There are many sources of information for research into companies and their shares. Current and past prices and share trading volume can be ascertained from newspapers, websites and the like, while good sources of information on specific companies are the company's website and annual report: the latter should contain a substantial amount of financial and technical information, though of course it should be borne in mind that such information is likely to be presented in a way that suits the company.
Since if an investment declines in value no-one but the investor and his or her dependents will be affected, it is essential that investors take responsibility for research and to do everything possible to avoid risk: too many amateurs don't invest wisely and then seek to blame others for a bad investment, when almost without exception the cause is their own lack of research. The key when thinking of buying or selling stocks and shares is to research diligently, and to do so by using as many independent sources of information as possible, whether in the traditional media or on the web. One such source is the website http://www.sharesadvice.co.uk which explains the basic concepts of stocks and shares and gives advice on researching them as well as buying and selling. There are many others, though: the wise investor will seek out as many as possible before buying, as failing to do so can mean losing a substantial amount of money, something no serious investor wants.
Article Source: http://EzineArticles.com/?expert=Mike_Drabble
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