Online Sock Trading

Should You Choose Stocks Or Bonds?

By: Bill Dufrane

The difference between stocks and bonds isn’t clear to those just starting in the wonderful world of investing. While stocks give investors part ownership of a company, bonds are loans made by investors to corporations or governments. Rather than benefiting from company profits the way that stock holders do, bond holders receive a fixed rate of return a fixed interest rate. Bonds only last for so long and have a termination date called the date of maturity. Also, they can take decades to mature, whereas stock exchanges happen with lightning speed every day. If you are just looking to make a quick buck with high risk, go for stocks. In comparison, if you need stability, say, for a retirement, you might choose bonds.

1. Risks Versus Rewards

As hinted at earlier, stocks have a higher rate of risk whereas bonds are more secure. Of course to say bonds are safer than stocks doesn’t automatically mean that you will always make money on bonds. A bond is an investment - and as such it may not be paid back. US government bonds are considered to be the safest type of bonds. Blue chip corporations (those with established performance records that span over many decades) are also very safe bond investments. Smaller corporations have a greater risk of defaulting on their bonds, but if the business goes bankrupt bond-holders are preferential creditors and will get compensated first.

2. Trading Bonds

Traditionally, bonds were the exclusive trading realm of huge corporations and banks. Not any more - even a savvy investor can begin trading bonds with as little as $5,000. Bonds bought and sold after the initial issues are quoted in increments of $100. A bond that is listed at 96 is selling for $96 per $100 face value.

3. Stocks Or Bonds?

Given what you have read so far, you might think that stocks are better for the short term and bonds for the long term, but the statistics do not lie. Bonds offer greater security and return on your investment than stocks, overall. The situation changes, however, when time spans of longer than 10 years are considered. The stock market has consistently outperformed bond investments by a large factor. This is because companies continue to increase in value and any short term fluctuations in the stock market become smoothed out. Overall, you should never put all your eggs in one basket - consider a bond as part of your portfolio to help cushion against market fluctuations. A mixture of investments is always the best choice.

Article Source: http://www.noviceinvesting.com/Article

For more great stocks related articles and resources check out stockhub.info

Trading

commodity future trading software (Commodity Trading) commodity future trading system
commodity future trading software (Commodity Trading) commodity future trading system December 21st, 2006 commodity future trading software commodity…

Momentum and Greed
Momentum is great. In fact, spotting early positive momentum in stocks is a critical part of my trading strategy. However, I always seem to get in…

Stocks Decline in Late Afternoon Trading (ABC News)
Dow, Nasdaq Slide in Late Afternoon Trading on Weakness in Regional Manufacturing

What Is A Stock Index?

By: Bill Dufrane

In the fast paced ever- changing world of todays stock market you need a quick way to analyze and graph the movement from day to day, month to month or year to year. Stock indexes such as the Dow Jones Industrial Average and Standard and Poors 500 give you a tool to do just that.

But what exactly is a stock market index? A stock market index is a listing of a group of stocks, and a number to go with them. The number that goes with them is used to track trends in the market, going up or down when the market does. In general the stocks have something in common, such as trading on the same exchange, or belonging to the same industry. The Indexes can be classified in a wide variety of ways. The most widely quoted Index in the world, the Dow Jones Industrial Average, is a broad based index designed to reflect the stock market as a whole and give an idea of investor sentiment on the state of the economy.

1. How Are Indexes Calculated?

Different Indexes are calculated in different ways and it is important for stock investors and traders to understand how the index they are using is calculated because the calculation method has a large impact on results. You need to know what is being measured and how. The Dow Jones Industrial Average, for instance, was originally just that. In the beginning, when there were no calculators or computers, and calculations needed to be done quickly and by hand, there were 12 stocks in the Dow Jones Index, that were counted up and then divided by 12. The results were expressed as points. Now, with computers the norm, the index is calculated differently.

Most stock indexes such as Standard & Poor’s 500 Index and the NASDAQ Composite Index are weighted and give more weight to larger companies. These are capitalization - weighted indexes (Capitalization is the total market value of any outstanding shares of a companies stock.) These indexes are not valid indicators of the price of the average stock in the index. Since there should be more investors in the larger companies they do give us an idea of price levels in an average investors holdings.

The Dow Jones Industrial Average, however is NOT capitalization- weighted. It is price weighted, giving more importance to higher priced stock then lower priced ones. The Dow Jones Industrial Average now includes 30 stocks. It is calculated by adding together the price of those stocks and then using a divisor. The Dow average is quoted in points and not dollars.

2. Types of Indexes

The most widely quoted indexes are the broad based indexes, that attempt to represent the movement of an entire stock market. They normally include the largest companies on the nations largest stock exchange. Standard and Poors 500 (S+P 500 index) and the Japanese Nikkei 225, as well as the Dow Jones industrial average, are examples of this type of index.

More specialized sorts of indexes are indexes like Morgan Stanleys Biotech, that consists of 36 American biotech firms, or NEMAs EIS (National Electrical Manufacturers Associations Electroindustry Stock Index) that tracks Electroindustry stocks.

Indexes that track companies of a certain size or a certain type of management are also fairly common.

3. Socially Responsible Indexes or Sri Indexes

Another specialized index type are those for Socially Responsible Investing indices that include only those companies satisfying ecological or other social criteria. Often called SRI or Socially Responsible Indexes, SRI indexes allow investors to watch stocks according to their beliefs and performance on Social issues, and may exclude companies such as arms or tobacco companies. They include The Calvert Group, Domini, the Dow Jones Sustainability Index, and the FTSE4Good indices

With so many ways of grouping stock it is often difficult to choose that index, if any, are the ones you should follow. Deciding what you want to track and how you want to track it is important. Make sure you pick the indexes that are right for your investment strategy, and easily understandable for you.

Article Source: http://www.noviceinvesting.com/Article

For more great mutual funds related articles and resources check out greatmutualfunds.info.

Trading

Bull Markets And Bear Markets

By: Adam Masterson

The difference between a bull and bear market is something that every sucessful investor knows. When the market moves downwards for a period of time the market is referred to as a bear market. Upward moving markets are bull markets. If a particular stock is doing well, it is said to be bullish. If it is losing value it is bearish. Of course, there are more to bull and bear markets than that, as you will soon discover.

1. Bull Also, Bear Markets

These terms refer only to long term fluxuations, not short term changes in the market conditions. This is because even during a bear market prices may increase temporarily.

2. A Reflection Of The Economy

Usually stock market conditions reflect the state of the economy. During bull markets the economy is doing well, unemployment is low and interest rates are reasonable. Bear markets usually occur during times of economic slowdown. Investors lose confidence and companies may begin laying off workers. At the extremes, an exaggerated bear market can lead to a crash brought on by panic selling. An exaggerated bull market can be caused by over-enthusiasm of investors. It leads to a market bubble that will eventually burst.

3. When To Make Money

Although most money can be made during bull markets, there are also opportunities during bear markets. Knowing the characteristics of each type of market allows investors to profit from them. As would be expected, when the market is bullish investors wish to buy up stock. The economy is doing well and people have extra money that they wish to invest in stocks. This creates a situation of short supply that drives up prices even higher. During bear markets, on the other hand, prices are falling so investors wish to unload their stocks and put their money in fixed-return instruments such as bonds. As money is withdrawn from the stock market, supply exceeds demand that drives prices down even further.

4. Bull Markets Offer The Best Opportunities

It is easiest to make money during a bull market. Getting in right at the beginning will allow you to make the most profits. During a bull market any dips in the market are temporary and should soon be corrected. The upward rising prices cant go on forever, though, so the investor needs to be able to gauge when the market reaches its peak and sell at that time.

5. When To Buy

Bear markets represent opportunities to pick up stocks at bargain prices. Getting in near the end of a bear market offers the greatest chance for profit. The prices will most likely fall before they recover, so the investor should be prepared for some short term loss. Short-selling is also an investment strategy during bear markets. Short selling involves selling stock that you do not own in the anticipation of further price drops, so that when it comes time to deliver you can buy the stock for less than you sold it.

Article Source: http://www.noviceinvesting.com/Article

For more great stock market related articles and resources check out optionshq.info

Trading

Report On Stock Research

By: Stu Pearson

The report of stock research contains all the information like the fair value estimate of a companys worth. Likewise, guides on when to buy and when to sell stocks as well as the selling prices of stocks are also discussed and displayed on the stock research report.

A stock research report is accomplished by expert analysts who are renowned in their own companies and their industries. Their reports mainly cover strengths and weaknesses, lines of business, whats good and bad about recent stock investment decisions as well as some projections of what to expect from a company in terms of its financial health.

The stock research report also tells you whether a company is worth buying or selling and just when to buy and sell stocks from this company. Knowing such information can help you in earning back a great deal of profits from your stock investment.

In addition, the significance of such reports cannot be taken for granted, especially in a world where the market is unstable, wherein in a blink of an eye you might lose everything you have invested. Stock research reports keep you up-to-date with the latest and timely developments happening in the stock market. Stock reports are just one of the services provided by most online stock research providers.

When you sign up or joined an online stock research provider you were provided with stock alerts regarding new analyst reports plus some daily commentaries. Aside from that, you will also enjoy the privilege of having daily dose of expert opinion about companies they cover in the news. They also have portfolio alerts that tell you when your portfolio is underperforming or outperforming.

With a stock research report you will always be guided on what course of actions to take especially if you cannot monitor your portfolio regularly. Remember that the stock investment requires for keen monitoring or else you will find yourself losing money instead of gaining back more profit.

However, the stock research report is not a free service, most providers of these types of reports only offer free-day trials for new members but afterwards would require for a monthly or annual subscription fee.

Be sure to correctly choose the stock research provider; opt for those highly regarded providers that already have names in the stock investment market. Dont be fooled by those stock research providers claiming that they have the best stock investment solutions and promises you very high rate of investment returns. These promises often times just remain to be a promise that can never be realized since the provider that you have chosen is really not that knowledgeable in stock investment.

Look for those providers that possess credible portfolios and to be really sure you may try to confirm by researching further the authenticity of their claims. You may also try to ask your friends, colleagues and family whether they are familiar with the provider you are investigating. Even better still, ask people in the stock market if they are familiar with the provider you are inquiring about. If it is really true that they are a reputable stock research provider, then their reputation will echo the sentiment.

Article Source: http://www.noviceinvesting.com/Article

Stu Pearson has an interest Business & Finance related topics. To access more information on free stock research or on stock research online, please click on the links.

Trading