Avoiding the emotional trapsWhy is it so important to think about emotions when it comes to investing?Emotions lead us to make bad decisions when investing our money. We tend to attach more than monetary value to money; sometimes we put our ego on the line with it. For example, we may buy a stock for $50, watch it go down to $30, and refuse to sell it until it goes back up to $50 because we don't want to admit failure. That's just one example of how emotions can get in the way of...
You’re surrounded by opportunities to put your money into one thing or another. But doing so means taking a risk: You know you could lose part or even all of it, but you hope you’ll win back more—a lot more. Where are you?Knowing only the above, you could be on Wall Street or in Las Vegas. However, investing in securities differs markedly from gambling on a horse or a hand. Unlike betting on double-zero, putting your money in legitimate investments gives you a tangible, immediate asset...
The final benchmark in your quest to purchase suitable long-term is value. While you should aim to own a portfolio of well-run growth stocks, you have to be able to recognize when a stock is selling for a bargain price, and when it's selling at a premium.Unfortunately, stocks don't come with manufacturer's suggested retail prices, so you'll have to figure out for yourself when a stock is selling at a reasonable price, and when it's too expensive. To do this, you need...
nce you've identified that a company is growing at a reasonable rate, and that it will continue to do so in the foreseeable future, you'll want to turn to aspects of quality. You want to make sure that your portfolio is built upon a stable foundation. You want the companies in your portfolio to be well-managed enterprises. Besides being able to grow its sales, the company has to be able to generate sufficient profits from those sales. The company also has to be able to provide a sufficient...
Once you've decided that a company has grown its sales and earnings at acceptable rates, you need to determine if it can sustain that growth over the next five years. In most cases, it is prudent to expect a somewhat lower rate of growth than the company has experienced in the past.When projecting future growth rates, you should keep in mind thatRates of growth for any company typically decline over time Growth rates differ by industry and by size of company. Earnings cannot...
Buying stocks that you can hold in your portfolio for years and years is quite a different process than buying a stock that you expect to sell next week! Of course, there is never a guarantee that once you buy a stock with an eye to the long-term you'll never have to sell it, either. But identifying companies that are more likely to turn in a solid performance over the next five to ten years is not that difficult, if you focus on three key areas. The three key benchmarks of long-term stock analysis...
When considering at a company's growth, begin by looking at its sales or revenues growth first. In order to turn a profit, a company must first generate revenues:Revenues - Expenses = ProfitsAs is obvious from this equation, without revenues, there can be no profits. On a long term basis, companies must always increase their revenues in order to increase their earnings. (Also, expenses must also not increase too much or too fast, but more on that later.)How much revenue growth should...
A favorite word among investment advisors is diversification. All too often, however, this word is left undefined. In fact the regularity of its mention has a very negative effect, investors are so comfortable with the word that they forget to ask what it truly means to be well diversified.First and most importantly, the investor needs to move beyond the simple notion that diversification is reached after a certain number of securities are held within a portfolio. You always hear magic thresholds...
Is a donkey bullish? Is an elephant bearish? Or does it matter at all to financial markets which party occupies the White House? A look back at market performance as measured by the Dow Jones Industrial Average across 18 administrations suggests that using such political equations to predict financial markets is, well, mostly bull. As presidential candidate of USA once put it, it’s the economy, stupid.Consider the presidents who have presided over bull markets. The single longest bull run in...
Many investment magazines and books offer asset allocation advice. That is, they help you decide how much to invest in asset classes like large-caps, small-caps, international stocks, bonds and cash.Asset allocation is important, but it is also important to implement an asset allocation plan intelligently. This means developing a strategy for deciding which types of securities and mutual funds to hold within these broad asset classes.What is core and explore? Recently, I did some work on...
- Daily Technical Analysis
- Economic Indicators
- Forex and Currency Trading FAQs
- Forex Basics
- Forex Broker Review
- Learn Forex Trading
- Market Analysis and Forecasting
- Market information sheets
- Planning and Research
- Risk & Money Management
- Stock Market and Investing
- Technical Analysis: Chart Patterns
- Tips and Tricks
- Trade Management
- Trading Basics
- Trading Idea
- Trading Psychology
- Trading strategy
- Trading Tools & Resources
- Weekly Technical Analysis