The Skinny on Mutual Fund Investing

 
Mutual fund investing is a lot like Thai cooking. Everyone has heard of it, most know a little something about it, but very few actually know how to do it and do it well. To invest in mutual funds wisely, it is important to have a good grasp on what mutual funds are, how they work, and what the risks involved may be. The fact that mutual fund investments are often considered safer than stocks, options, and other investments often misleads people to think that their investment in mutual funds are risk free....
 

Stock Insurance

 
You have a lock on your house. You have a lock on your car. You have a lock on your tool shed. Do you have a lock to protect your stock market investments? Maybe you have a safe at home for your valuables such as jewelry, rare coins, special documents and even stock certificates. Wait a minute. Is that stock certificate protected just because it is surrounded with 3 inches of steel? Not really. The problem is that its value does fluctuate every day. It is OK so long as it is increasing because that is why you bought it....
 

Investing in Stocks and The Game of Monopoly

 
To begin, you might look at playing the stock market as though you were playing a game of Monopoly. That's right; for playing the stock market 'game' is not unlike playing a game of Monopoly. There are definite comparisons and parallels. In Monopoly there are a Boardwalk, a Marvin Gardens, Utilities, Railroads, etc. In the stock market you have the same type of properties (stocks), as in the game of Monopoly. For example, a Boardwalk may be a GE; a railroad, a CSX Corp.; Duke Energy, a utility. The rent a player collects in Monopoly could be compared to the dividends collected by a shareholder in the stock market....
 

Stock Market Volatility

 
In my opinion, due to the volatility of stock market prices (the rise and fall of stock prices), an investment plan should incorporate both the traits of stick-to-itiveness and common sense, and must have an advantageous, predetermined approach for maximizing each investment in the stock market. Stick-to-itiveness and common sense - oh, what powerful weapons they are when used for a long-term investment plan in the stock market! They mean making the common sense and advantages decision to: ? Purchase only those companies that have long-term histories of raising their dividend every year....
 

What Does it Take to be a Stock Trader?

 
It takes a total mental commitment to the task. It becomes a complete way of life. You cannot be a part timer. You cannot work at a regular job and trade stocks successfully. When you decide to make your living this way you must be willing to work365 days a year, 7 days each week, 24 hours every day with no time off. Iknow. How do I know? As an exchange member for 17 years and a floor traderI can personally tell you there is no time off. Never. Almost every wakingmoment is given to thinking about your current positions....
 

Complacency Indicator

 
If you haven't heard of the technical indicator with the stock market symbol VIX it is now time to pay some attention to it. When the number is running low, as it is now, around 15 to 18 it means everyone is happy and thinks the stock market is going to continue up or at least continue on its current path and there is no need to sell anything. This is a measure of complacency. When the number goes above 35 it means everyone is very nervous and thinks the market is going to fall. It is considered a contrarian indicator....
 

Zero Sum Game

 
Most people think the stock market is a zero sum game because there is a buyer for each seller and seller for each buyer so each cancels the other and everything is equal. Not quite. There are losers here, both the buyer and the seller because each one paid a commission to buy and a second commission to sell. This eats away at the profit of the winner and adds to the loss of the seller if he sold for less than he paid. How does buying and selling of a stock effect the company? When you buy GM stock from your broker he is completing a transaction between you, the buyer, and someone else, the seller....
 

9 Deadly Trading Mistakes!

 
The following are a list of nine things you want to avoid at all costs. Anyone of them can literally destroy your financial dreams and goals! 1. Trading with money you can't afford to lose. One of the greatest obstacles to successful trading is using money that you really can't afford to lose. Examples of this would be money that is supposed to be used to pay the mortgage, bills or your child's college tuition. This is sometimes referred to as "trading with scared money" and there is a very good reason for that....
 

Stocks Options Trading

 
Let's assume that you want to make some serious money and you have chosen to take things into your own hands rather than depend upon a "professional trader" to make your trading decisions. This is usually only recomended if you can afford to lose the money that you are trading with, and you appreciate the fact that there is much more upside potential with this added risk. In any case, you have decided on 3 stocks that you like and are now at your computer ready to purchase them. Before you decide to get into the market, you will want to do some research....
 

Dollar Cost Averaging

 
Dollar cost averaging is one of the most popular ideas in the investment community. Everyone seems to like it and it has become a watchword among stock and mutual fund brokers. If it is properly done you will make money, if not you will lose money or at best stay even. Let's examine the basic premise behind this method of investing. You decide to buy shares in Mouse Trap, Ltd.(symbol CHZ), a computer company that produces sophisticated hardware. The shares are now selling for $40 and you want to purchase approximately $1,000 worth each month....
 

Play another Day

 
Money management starts with protecting your capital, realizing profits and cutting losses. As I have stated in the past, without cash, you can't invest. Cash is king and learning to manage your money is the most important aspect to investing in stocks. The game is won by lowering your risk by properly turning the numbers in your favor. Cutting losses is the best insurance to keeping your cash. Emotions fuel the decisions of many investors; leading the pack is hope, fear and greed. In order to control these emotions, proper money management skills must be developed through a defined set of rules....
 
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