Archive for the ‘Stock Market’ Category

How To Invest in Gold

The diversified portfolio has a small position in the gold market. For some investing in gold means holding gold coins. Some speculators buy gold contact futures on the commodity exchange. Future contracts are risky because you are betting that the price of gold will go higher in the future. The contract requires a relatively small up front payment, but there can be daily fluctuations that require you have funds to back the dips in the price of daily gold.

The reasons investors have been interested in gold is that the old reasoning was that if the stock market was down the gold market was generally up. This reasoning has become a possibility, but not an axiom of the current marketplace. The weakness in the dollar generally brings a surge in the price of gold. The current price for gold is in the range of $670. Prices have fluctuated within a range of $664 and the current high of $672. Traders think gold could easily go as high as $1,000 an ounce.

Investing in gold stocks and precious metal index funds can be purchased through a stock broker. A stock broker specializing in this area is very important because the investment needs savvy investment advice. Most of the larger brokerage houses have individuals that are specialized in the area of commodities and precious metal stocks.

There are certain international gold stocks that are noteworthy. A Canadian based international player in the gold market is Agnico-Eagle Mines. It trades on the New York Stock Exchange and the Toronto Stock Exchange under the stock ticker AEM. The stock is also sold on the Frankfurt Stock Exchange. This company has more than a thirty year history in the production of gold. Since the 1970s AEM has produced over four million ounces of gold. The company is international and has operations in Canada, United States, Mexico, Sweden and Finland.

If your Stock Market facts are out-of-date, how will that affect your actions and decisions? Make certain you don’t let important Stock Market information slip by you.

Other noteworthy gold stocks include; Barrick Gold Corp, Goldcorp Inc., Kinross Gold Corp., and Newmont Mining. All of these gold stocks are currently trading on the upside, but it is advisable for all investors to make sure these stocks fit your investment risk potential.

In recent years the price of gold has been as low as the $450 an ounce range. Since the late 1970s gold has made huge profits for holders of gold. The key to owning gold is to know the various resistance points and to assess the global market for the use of gold. It is used primarily in jewelry manufacturing and other types of manufacturing. Currently in India there is a small slow down in the use of gold for jewelry making. The same applies to a degree in China. Whether it is enough of a slow down to effect the price of gold is uncertain.

Investors who trade in gold should seek the advice of an analyst that can factor in all the various aspects that effect the price of gold. If you own gold as a hedge against a weak dollar you should look for any strengthening in the dollar. The important thing to remember is to gage your investment in gold to a level that you are comfortable. If you bought spot gold at $600 an ounce, you might consider a rise to $720 a good profit. The ride to $1,000 an ounce may be bumpy and there is no telling when it will reach that level if it does as speculators have gambled.

There are numerous gold mining stocks on the market and if you are interested in a small investment you can find these stocks in the $5 to $12 range The smaller gold mining stocks do carry a risk because a great deal of overhead goes into making a mining company profitable.

The range of risk and amount you decide to invest in gold is a personal choice. It is always advisable to seek the expert advise of a stock expert or commodity expert before leaping into this market. Another sage piece of advise I learned is to trust my sense of cashing out before the price of gold drops significantly due to outside pressures or manipulations.

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Choosing Your Stock Market Broker

A stock market broker is a licensed investor on their own right or a trader. They either work for a company or on their own or can invest in the stock market for individual investors or corporations.

Only members of the stock exchange can conduct transactions, and even if you want to trade online, you will still need a broker because individuals do not have access to the electronic markets.

Investor needs

The specific needs of the investor are the first consideration in the choice of a stock market broker. If you as the investor want to receive advice on which stocks to buy or to sell and yet are uncomfortable with making trades on the internet, you need to hire a full-service broker.

On the other hand, those investors who are confident and knowledgeable to make their own trading decisions are better off with discount brokers.

Competitors

When finished with deciding on the type of broker you want to hire, you as the investors are advised to compare a few competitors in order to find out if there are significant differences in costs.

This is significant because you may want to hire your broker for a number of trades to be made. Other pertinent details would include the amount of cash to be deposited, the type of margin accounts to be used, and the kind of services to be rendered.

Qualifications

Stockbrokers in the U.S. must first take Series 7 and Series 63 examinations in order to receive their stockbroker license. Beginners in the business of stock brokerage must first learn the market.

Many expert brokers first started out spending long hours on the phone building up their client base. These expert brokers have expanded on the success of their former customers.

Once you begin to move beyond basic background information, you begin to realize that there’s more to Stock Market than you may have first thought.

The key point here is credibility because stockbrokers often advise their clients on the best and most suitable investments.

Functions

A good stockbroker must have the ability to explain the workings of the stock exchange to his clients. After the orientation and the client has a working knowledge of what to expect, the stockbroker can then collect information on the client?s needs and financial ability.

The stockbroker may draw up an investment plan and the stockbroker will put the order out on the floor of the securities exchange by phone or by computer.

Once the transaction is done, the client (now the buyer) pays for the stocks. The broker then performs the clearing and settlement procedures and transfers the stock title accordingly.

Choices

As a beginning investor, it is important to decide right away whether you want to hire a discount stock market broker or a full-service broker.

Discount brokers supply a minimal level of service, but they also allow you to make trading decisions online. Full-service brokers will provide the same, plus in-depth analysis if necessary. They will also give out advice with each trade. The only difference is that their services call for higher commissions and fees.

Commitment

Schedule a meeting first before committing to any brokerage house. You are supposed to know your broker personally before handing him your money.

Find out what exactly is the specialty of your potential broker. It is quite acceptable to first question each stockbroker about their different trading styles and what they typically handle.

Welcome to the fascinating world of stocks, brokers and the stock market.

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By Anders Eriksson, proud owner of this top ranked web hosting reseller site: GVO

Reaping Rewards From The Stock Market

When you think about Stock Market, what do you think of first? Which aspects of Stock Market are important, which are essential, and which ones can you take or leave? You be the judge.

Many people say that to be successful in the stock market, the most important thing that you should realize is you capability to survive in this dog-eat-dog-world industry. This means that knowing what you really want and being ready to face all the challenges and difficulties that come along with the industry.

Nowadays, the number of people who engage in trading for the stock market continues to increase for the simple reason that the money investment could flourish in no time. But since trading in the stock market is business itself, it takes a wise and practical trader to reap rewards from it.

If you want to reap the rewards of trading in stock market in no time then you should know how to start small. The stock market or stock trading is considered as one of the most viable sources of income there is.

Compared to other industries, trading in the stock market can make a person or a trader a millionaire for just one whole day transacting. This is because the type of the type of training concerns,

Trading stocks is believed to be the most successful industries one can get into for as long as he or she has the skills, the knowledge, the ability, the enthusiasm, and the drive to push forward. Although there other industries that can offer the same amount of income that can be generated from stock market, it is quite incomparable in terms of the advantages that this industry brings.

Truthfully, the only difference between you and Stock Market experts is time. If you’ll invest a little more time in reading, you’ll be that much nearer to expert status when it comes to Stock Market.

Before anything else, make sure that you prepare and equip yourself. This is very important because it will help you adjust to the set up easily. Preparing and equipping yourself involves a lot of data gathering and being knowledgeable about the industry. You must also prepare yourself physically, emotionally, and mentally so you can cope up and overcome the trials and difficulties that will come along your way.

If you are fit to indulge in stock trading but having doubts on it, consider the following advantages:

- think of how much that you can benefit in training the stock market. The major advantage of getting into trading stocks is the flexibility of its business schedule. This is the biggest rewards that one can get from trading stocks in the market. Since the industry runs 24/7, you can create your own trade on schedule at your chose pace and time.

- consider the absence or relatively low costs of transactions. Another major reason why people are jumping into the bandwagon of trading in the stock market is because there is relatively low cost of transaction or sometimes, there is really none at all. In trading stocks in the market, the only thing that needs charging is the services of brokers or commissioners.

- the availability of wide array of trading vehicles is also a major benefit one could get. This is also another great feature of being involved in the stock market because it gives people options in carrying out their transactions. In stock trading, transactions can come in several forms, which can suit the need of the trader or broker.

As your knowledge about Stock Market continues to grow, you will begin to see how Stock Market fits into the overall scheme of things. Knowing how something relates to the rest of the world is important too.

About the Author
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Surviving The Stock Market

The only way to keep up with the latest about Stock Market is to constantly stay on the lookout for new information. If you read everything you find about Stock Market, it won’t take long for you to become an influential authority.

If you are one of those who are trying to get his or her luck in the stock market by trading, then the best thing that you could do is to familiarize yourself with the nature of the venture.

It is best if you have already mastered the basics when it comes to stock market and trading so you will know exactly what are you getting into. If you are already armed with the basics, then you could somehow estimate where your involvement in stock trading could take you.

The keys to success

If you are not careful and prepared enough, chances are you are not going to make it in stock market. This is because the industry?being the largest in the world that generates billions of transactions non-stop?takes a lot of knowledge, experience, guts, and decisiveness in order to be successful.

To be able to become successful in the stock market, one must be very wise in dealing with transactions. One must also know where to trade, the peak season for the trading, the techniques to be used, and the updated strategies to generate as many transactions as possible.

The information about Stock Market presented here will do one of two things: either it will reinforce what you know about Stock Market or it will teach you something new. Both are good outcomes.

Aside from the qualities mentioned, you can survive the world of trading in stock market if you:

- have the ability to decide on the length of the transactions. This is very, very crucial for a trader to ensure that he or she still has a portion of the market that can be penetrated. A successful smart trader should decide first if he or she would go long term or short term on the process. This is a very crucial decision because it will somehow give direction to the transaction and will somehow give a hint, which one will be very successful for you.

- controlling emotions. The biggest problems that majority of the traders in the stock market are having the idea what to expect in the industry. Studies show that the biggest problem that most people in trading stocks experience is dealing with their emotions.

- have enough guts to start big. Although short term stock trading can do a beginner good?by closing transactions in short period of time?it will do them bad in the future because these have no stability. They say that it is better to plot a stock and trade it to ensure that this is where the direction and stability can be seen.

- have the ability to detach from emotional baggage. This is indeed very hard because most of the time?especially in the times of need to generate transactions?traders become anxious that there will be no transaction that will take place within the day. There are also those that let their emotions rule over their rational thinking, which usually leads to incorrect means of dealing with the problem at hand. Although it’s human nature to experience certain levels of emotional dilemma, it is best to detach yourself from these if you really want to be successful in the stock market.

About the Author
By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

Investing in the Oil Sector

There is advantages to investing in areas of the stock market that you know or have some personal experience with on a daily basis. Nearly everyone is effected in one way or another by the commodity oil. If you are an individual you take note of prices at the gas pump, heating bill and other uses of oil. If you are a business owner the price of oil is a factor in the operation of your business. For the purposes of this article the two areas that will be covered is oil & gas and oil service stocks. The first area oil & gas covers some of the big oil stocks whose names you may know. The second area is the oil service stocks that support and aid the extraction and distribution of oil.

Big Oil & Gas:

For all the rhetoric and interesting speculation about “green energy,” and the alternative fuels like ethanol, biomass, and wind energy the present circumstances places the lion share of energy that moves the world in the lap of the oil industry. Names you not only hear about, but have been around in one shape or another for a century. Chevron, Exxon-Mobil, Conoco-Philips, British Petroleum, Royal Dutch Shell and Hess Corporation. These companies have an individual market capitalization of hundreds of billion of dollars, with the exception of Hess that has a mere 19 billion in market cap. It is hard to imagine a more solid group of stocks with as much clout as this elite club.

All of the stocks mentioned above are involved in exploration, distribution and marketing of oil products around the world. Their influence and their financial worth allows them to invest in costly drilling, manufacturing and distribution of oil in all of its forms. While the rhetoric continues about building and providing alternative sources of energy. These companies presently support a significant percentage of the every day uses of energy. Some of the big oil companies even support blends of biomass fuels and ethanol as a compliment to their own primary purposes.

The cost of purchasing stock in this stock is relatively cheap when you consider the likes of Google selling for in excess of $500 per share. Still other intellectual property stocks on the market and conglomerates sell for in excess of $200 a share. The range of prices in Big Oil is between $61 to $89 per share. What you get is a stock that is capitalized with billions of dollars, has a management team that is beyond exceptional and an underlying product “oil” that is in short supply.

Is everything making sense so far? If not, I’m sure that with just a little more reading, all the facts will fall into place.

For the moral investor that blames Big Oil for the environmental mess, wars and other maladies the world faces the only American not to blame are the Amish with their horse and buggies. Still, the Amish may leave a smaller foot print, but we all have in one way or another impacted and contributed to the need Big Oil has satisfied and will continue to do so. At present there is small improvements everyone can do, but Big Oil’s contribution to a strong economy, and living in a modern society is not going to be replaced any time soon.

The best bet for future stock growth and for pure investment is in oil & gas. Of the Big Oil stocks that are worth looking at Royal Dutch Shell and Conoco-Philips are the two that have some noteable room for short term growth. Another reason to consider Conoco-Philips is that George Soros recently took a position in this company. In investing it is good to follow the leaders. Review the institutional investors in all of the stocks mentioned above and make a decision on which company you think will be a good addition to your portfolio. If in time you make a huge gain take a portion of the profits and contribute to a fledgling “green energy” cooperative.

Oil Service Stocks:

The oil sector would not be complete without mentioning the drillers who get that precious commodity out of the ground, ocean bed or frozen tundra. The oil drilling stocks are rumored by some financial experts to be waning in appeal or topped out. In order to put this in perspective the long history of the oil drilling companies goes back a century. These tough minded riggers and engineers made the oil industry what it is today. The inventive engineers and scientists found astounding ways to detect and then extract oil from the most harsh environmental challenges. The oil drilling stocks are part and parcel of the oil industry.

Recently two of the biggest players in the drilling industry, Transocean Inc, (RIG) and Global Santa Fe Corp. (GSF) announced merger plans. Individually, RIG sells for around $70 per share and RIG in the neighborhood of $102. These companies are backed by billions of dollars and their institutional investors are stellar. Another drilling company of note is Diamond Drilling. This drilling stock is owned by Fidelity Funds, Vanguard Funds, Loews Corp. and Thornburg Investments to name just a few. The oil drilling stocks merit a good look and watch for buying opportunities if there are dips in the near future. In the alternative you can choose a mutual fund from one of the institutional investors mentioned in this piece that focuses on the oil sector.

This has been a brief overview of the oil sector. Review your investment objectives and seek the advice of licensed estate planner or stock broker. Company prospectives are available on-line and by mail.

Of course, it’s impossible to put everything about Stock Market into just one article. But you can’t deny that you’ve just added to your understanding about Stock Market, and that’s time well spent.

About the Author
By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

Pricing In The Stock Market

Understanding the stock market does not only involve why businesses sell shares of their companies and why investors buy these shares. Today, there are aspects on the business of stock market that are still unclear to most people. The most obvious are the stock prices and pricing.

Pricing of stocks

Scanning the newspapers, many people are confused and still could not understand about the pricing of stock prices as they see or read it.

Among the wide variety of stock prices, what puzzles the layman would be (1) why some well-known and giant companies are being traded for relatively very low prices and (2) why some little-known companies are being sold for excessively high prices.

Investor confidence

To some extent, the prices of stocks for each company are determined by the confidence of investors based on either a real or a perceived performance of the stock.

Among the requisites of a company to its shareholders are financial status reports as reported on a quarterly basis. These would include the company cash flow, sales, and its earnings for the period.

You would think all this disclosure would suffice. The truth of the matter is that the company?s worth based on its financial reports can be overridden or undermined by speculations, unfounded or not.

Rumors

Stock market rumors are some of the most devastating one can see. It virtually derails some carefully-laid out reports and scientific data and such. Rumors usually affect the fate of the company?s stocks.

If you find yourself confused by what you’ve read to this point, don’t despair. Everything should be crystal clear by the time you finish.

A sample would be an ongoing rumor that states that a particular company is planning to make a strategic move. Like a crowd rush in a train station, investors would come flocking in just to buy stocks from that company.

Supply and demand

The principle of supply and demand also applies to the stock market. If there is a sudden rush of interest from investors, expect a rise on the prices.

If there is fear among them, prices will promptly plummet downwards. The worth and the performance of a company are considered to be the biggest factors to determine the prices of stocks.

Reading stock quotes

In daily market summaries of newspapers or online sources, there are sections where there is information on the current prices and market movements of stocks around the clock. (Stock brokers also provide stock quotes that can be accessed via phone or the internet.)

This stock quote table contains useful information that can help investors make their decisions in buying or selling the stocks. For would be investors, it is necessary to be able to decipher the data listed there.

The first column is a 3 or 4-character ticker symbol. (sample: BCE means Bell Canada Enterprises and MSFT stands for Microsoft.) The newspaper price was the closing price for the day. (It is updated every few minutes at the internet.)

Change is the difference between the previous day?s closing price and the current quote. High indicates the highest price while Low is the lowest price sold.

Volume is the number of shares traded, and the 52-week High and Low is the highest and the lowest prices the previous year. Some tables have additional columns to make room for more data (like the Bid and Ask prices, etc.)

For would be investors, stock market pricing should be among the first areas in the business that needed to be learned and mastered. They are the heart of the business.

Hopefully the sections above have contributed to your understanding of Stock Market. Share your new understanding about Stock Market with others. They’ll thank you for it.

About the Author
By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

Investing for the Sports Fan

The avid sports fan has a place in the Stock Market. If you have a passion for sports either as an amateur player or sports fan there are great stocks for you to invest. The sports retail and manufacturing industry is worth billions in revenue. Passions do not come cheap so maybe you can turn your enjoyment into making a few dollars.

Dick’s Sporting Goods is a multi sport equipment, apparel and general store. The passion of the owner Dick borrowed $300 from his grandmother and opened a bait and tackle store in 1958. Today Dick’s Sporting Goods is located in 34 states with 315 stores. In addition, he owns Golf Galaxy a multi-channel golf specialty retailer with 77 stores. The stock sells on the New York Stock Exchange with the stock ticker DKS. The stock currently sells for about $70 per share. It enjoys a market cap of over 3.5 billion dollars. The stock has some big name holders like Citigroup, Oppenheimer and Goldman Sachs.

Foot Locker Inc. is another sports shoes and apparel shop that has a significant market share of sports market. The stock sells on the NYSE for $16.71 a share. It trades under the stock ticker FL. It has some room to go back up to the $40 range where it belongs. Some weakening in the retail area and other concerns have weighed on this stock. It is a good stock and worth watching.

Truthfully, the only difference between you and Stock Market experts is time. If you’ll invest a little more time in reading, you’ll be that much nearer to expert status when it comes to Stock Market.

Cabela’s is a Nebraska sports and apparel company that sells on-line. It has store outlets that are an adventure for any shopper. Cabela’s is a success story and when the jitters in the market subside it will soar. It is priced currently in the high $20 range and worth every dime. It trades under symbol CAB.

Nike Inc. is a familiar brand name for most sports fans and enthusiasts. The stock is sold on the New York Stock Exchange. The stock symbol is NKE. The company sells apparel, shoes and accessories. The company has a 28.2 billion dollar market share. Nike employs over 32,000 employees. Nike is priced currently at $58 per share. The stock is expected to climb as high as $70 per share. Some of the major holders are Barclay’s Global Fund, Fidelity Blue Chip Fund, Vanguard 500 Index Fund and some other blue ribbon funds.

The combined efforts of Molson Brewing Company of Canada and Coors Brewing Company in recent years created the Molson Coors Brewing Company. The market cap and distribution of the company is tremendous. It employs 11,000 people. It has plans to open a new subsidiary. It is going through a shift in upper management, but it is a sold investment to keep on your radar. The stock symbol is TAP and sells in mid to high $80. The company has a blue ribbon list of holders of the stock. Barclays Global Fund, Vanguard Group, and Goldman Sachs are a sample of their investors.

The sports fan has lots of opportunities to invest in their passion and enjoy the game as a participant in the sheer fun of making a few dollar in the process.

About the Author
By Anders Eriksson, proud owner of this top ranked web hosting reseller site: GVO

Trends And Timing In The Stock Market

The following article lists some simple, informative tips that will help you have a better experience with Stock Market.

From grizzly stock market veterans all to the way to savvy market observers, almost every one would concede that in the business of trading two things are of the essence: timing and trends.

Trends are important because they affect the market in big sweeping tides. Timing, on the other hand, is the learned investor?s inner business radar at work. The more experienced he is, the better is his sense of timing.

Market trends

Market trends are the tendency of particular stock prices to go up or down for considerable periods of time ? triggered by some big events, influential persons, or sometimes whatever is the current fashion.

A simple case in point is the September 11 terrorist attack. It had set off a trend where stock market prices for tech companies went down.

Product demands

World events would also have great effects on the stock market. Oil crises and some political problems in concerned countries would definitely have an effect on world oil prices.

To those who have to buy oil and gas, the prices would go high. Those with investments in oil stocks would be raking it in because of the high demand and the high price. Demand for a product affects the price of its stock.

Price fluctuations

The first factor that influences price is the basic law of supply and demand. If the company has only a few shares of stock to sell, and there are a lot of interested buyers, there would a rise in price.

Is everything making sense so far? If not, I’m sure that with just a little more reading, all the facts will fall into place.

Working the other way around is the fact that when there are a lot of shares but few interested buyers, the stock?s price goes down.

Outside factors

Usually, big world events affect stock market trends ? wars, the economy, oil prices and currency collapses. New oil discovery does the same influence on the market, albeit the other way around.

The upward movements in prices of certain market sectors that last for months or years are nicknamed bull trends. Those that are on the down movement trend in prices are called bear trends.

Timing

Timing is that special knack of investors who knows the exact time to buy or to sell any stock. For most investors, timing is simply being alert.

They watch market prices closely, keeping an eye on the rise (or decline) of prices looking for a trend. If they see a trend and the market is rising, they tend to hold onto their stocks.

On the other hand, if the market price of a stock seemed to go on a downward roll, most investors tend to sell their shares because they want to hold onto the profits they have already made.

Timing, for most investors, is actually identifying the trends in the market needed to identify in turn the right time to buy or to sell. The enterprising investor takes advantage of news about the economy, interest rates, conflicts and many others.

Last words

Timing and trends in stock market mean many different things to different investors. Those who want to make a quick dollar do their buying and selling regularly. However, if you are investing for the future, you do not look at the market the same way as everybody.

About the Author
By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

Investing in Stocks Direct From the Company

There are companies that allow an investor to purchase stocks directly from the company. This is perfectly okay according to the Securities and Exchange Commission. These are called Direct Stock Plans. It is called a DSPP. The company may require that you already have stocks through employment with the company. It is not required in all companies.

The Direct Stock Plan operates differently than buying stock through a broker. There is no commission charged for these stock plans, but there can be a small fee. The other difference is that the company buys and sells the stock at a given time. The investor cannot sell or trade stocks at will. The investor may turn the stocks over to a broker to sell, but the broker cannot charge a commission. You may be charged a fee by the company. It depends on your agreement.

If you have a favorite company, like the Walt Disney Company, Coca Cola or other brand names in the United State you may be able to implement a Direct Stock Plan to purchase stocks on a regular basis. You can review the list of stocks in your local library or check out the company you are interested in by accessing the company web site.

Another method of investing direct in a company is by way of the Direct Dividend Reinvestment Plan. It is commonly called a DRIP. The good aspect of this type of plan is that instead of receiving the dividends you agree to reinvest the dividends in more stock in the company. It is a regular Direct Stock Plan with a reinvestment agreement. You may do the same reinvestment plan with your other stocks and mutual funds even if you have a broker.

Think about what you’ve read so far. Does it reinforce what you already know about Stock Market? Or was there something completely new? What about the remaining paragraphs?

The advantage is that if the company allows a private investor to purchase stocks directly this would allow you to set up a pay check withdrawal each pay period for the purposes of the stock plan. There are various advisory services that can assist you in locating companies that offer these direct stock purchase plan. I would suggest that you find companies you are interested in a make an inquiry with investor relations.

The advantage to contacting the individual company yourself is that it allows you to use your preferences and then do a small amount of leg work. The company representative will give you the necessary forms and provide you with individual advice on how to set up pay roll deduction. In turn you can contact your banking institution, employer human resources or bill payer and set up the account.

It will astound you the number of very good companies that will allow you to buy stocks direct
by setting up a plan. The range of possibilities include, utility companies, fast food stocks, entertainment and retail stocks.

If you have a solid company that has shown solid performance this may be a good option for investing.
The only thing you have to lose is your time. The time it takes in gathering the information has a big payoff. It will save you commission fees and provide you with a long term relationship with your favorite company.

That’s the latest from the Stock Market authorities. Once you’re familiar with these ideas, you’ll be ready to move to the next level.

About the Author
By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

Stock Market For Beginners

The stock market is also known as the equity market where companies have access to capital and investors. Once investors had bought shares of the company, they look forward to potential gains of their investments in the future performance of the company.

Stock exchanges

With the exchanges as the main players, the stock market is like a big superstore, a buying and selling place where people buy stocks. These exchanges are where the buyers and sellers are matched.

The primary exchanges in the U.S. are the NASDAQ, the New York Stock Exchange (NYSE), all of the ECNs (electronic communication networks) and some regional exchanges like the American Stock Exchange and the Pacific Stock Exchange.

A few years back, all the trading was done in the traditional exchanges like the NYSE and the like. Now, almost all the trading is done through the NASDAQ which uses ECNs and thousands of other firms with access to the NASDAQ for trading.

Electronic buy-and-sell

Here is a sample on how a stock market transaction is done today. First, you open an account with say, E*Trade by sending E*Trade a $1,000 check. E*Trade then deposits the check into a trading account listed under your name.

You log on to E*Trade and place an order to buy 100 shares of stock in Company X. (The stock is currently trading at $5.) E*Trade uses its networks to tell NASDAQ and all its related networks that there is a demand for 100 shares of Company X.

NASDAQ finds someone who is willing to sell 100 shares of Company X and instantly facilitate the trading of stocks between you and the person selling the shares.

You can see that there’s practical value in learning more about Stock Market. Can you think of ways to apply what’s been covered so far?

The data is sent to a clearinghouse where it is processed and the shares will now be registered to you. The actual stock certificates are held ?in street names? and do not need to change hands, although you can request that the certificates be transferred to your name.

How stocks get valued

Stocks are valued two ways. One is created using some type of cash flow, sales or fundamental earnings analysis.

The most common is the P/E ratio (Price to Earnings Ratio). This valuation method is based on historic ratios and statistics. The aim is to assign value to a stock based on measurable attributes. The form is what usually drives long-term stock prices.

Supply and demand

The other valuation follows how much the investors is willing to sell them. Both of these values changes as investors change the way they analyze stocks. In short, the stocks are valued based on supply and demand.

If more people want to buy them, the price goes higher. Conversely, the more people that want to sell the stocks, the lower the price.

Market forces

In the short run, the market is driven by simple human emotions of greed and fear. In periods of prosperity, the market usually rises above its real earnings.

In tough times, political uncertainties and other negative factors, the stock market often performs worse than its underlying fundamentals. In the long run, however, the stock market is driven by several underlying economic, financial and global growth.

You can’t predict when knowing something extra about Stock Market will come in handy. If you learned anything new about Stock Market in this article, you should file the article where you can find it again.

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By Anders Eriksson, now offering the host then profit baby plan for only $1 over at Host Then Profit

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