Category Archives: Stock Market Advices

The Basics Of Stocks

Almost all financial advisors will tell you that you can never start too early when it comes to saving and investing. As it becomes easier and more accessible, investing in the stock market is now an option that everyone can take part of. Like all investments, it is important that you do your homework first and understand the risks and advantages that come with the stock market. Although it may seem easy enough, making sure you at least know the basics can help you prevent a monetary loss that you cannot afford. Here are some basic tips to make sure you are on the right track.

Financial Metrics

It’s important that you understand the definitions of the different metrics, such as ROE (return on equity), CAGR (compound annual growth rate), and EPS (earnings per share). They are calculated differently and the differences between them can be critical.

The Right Stock at the Right Time

It is very important that you know how “technical” and “fundamental” analysis are performed and how it plays into your stock market strategy.

Different Order Types

You should know the difference between the different types of market orders that are commonly used by investors, such as limit orders, stop limit orders and stop market orders.

Different Investment Accounts

Although cash accounts are the most commonly used, regulations require margin accounts for specific types of trades. You should know how it is calculated and the maintenance margin required.

What is active trading?

The term ‘active trading’ is used to define a strategy of trading stocks in short terms. In other words, active traders think of the share cost movements not in perspective, but in the next minutes and hours. Obviously, active traders make profits in short terms.

The strategy of active trading may be split into 4 most popular strategies.

Day trading

This active trading style is probably one of the most famous. It’s a method of buying and selling stock within one day, making profits ‘on fly’. The main principle of day traders is ‘no leaving opened positions overnight’. As a rule, day traders are professionals, who have enough experience to switch their strategies fast enough for getting profits.

Position trading

This type of trading may require both short-term strategies and the long-term ones. The main principle of this strategy is catching the trend and benefiting from the wave that is caused by it. The main task of each trader is exiting the trend when its influence lowers down.

Swing trading

When the trend ends, the price volatility appears, because the new trend is trying to be established. The swing traders buy or sell stocks during this price volatility. As a rule, they create a bunch of rules, using analytical tools. The main requirement for the swing traders is to predict the right direction of the stock price movement.

Scalping

Being the quickest strategy of active trading, scalping is also one of the simplest. The main task of a trader, using this strategy, is buying the stock at the bid price and selling at the asking price, getting the difference between these two points.

The benefits from investing in renewables

In the previous aricle we’ve already talked about the popularity of the renewable energy sources on the investment market. In this article we’d like to continue talking about the renewables and tell more about the benefits, which come from investing in this sphere.

1.First of all, putting your money in the renewable sources, you should understand, that it’s a long-term perspective. This is not ‘raise and repeat’, this is a long-term investment, which promises a stable income. So it’s attractive for people, who’d like to save their money.

2.High returns may also be offered in this sphere. When investing in renewable sources programmes on early stages, the investors may get some pretty good interests from their money. So multiplying your cash is also an aim for those, who goes here.

3.Diversification is another benefit, which is hunted by the deep-pocketed people. Renewabe projects depend less on some temporary things, like economics and politics. They are moore connected with some ‘natural’ effects, like wind and solar. As you understand, they are much more stable.

4.Inflation is not able to harm your investments, if we are talking about the real assets. Wind and solar energy generation is a great way to save your money and protect it from the inflation.

5.Perspective is everything in renewable niche. Each year the traditional energy sources, like oil and gas, become less demanded. Many countries in the world are struggling to sell them. At the same time, more and more money get invested in some renewable projects. Here is where the future comes.

Knowing When To Hold’em And When To Fold

There is quite a disconnect between the novice looking to make some kind of positive return and the insiders who know how the game is played when it comes to the stock market. Many have been lured in by the promise of positive returns but just like gambling have ended up losing their hard earned investments. Though there are some courses, paid and free, that one can take in order to better their prospects, it is an unfortunate reality that like most investment tools, there are pitfalls. For anyone looking to make meaningful returns on the stock market there is need to understand when to sell and when to hold on to stock.

The first thing to take note of is the state of affairs with the company or organization that the person has stocks with. These details are called the ‘fundamentals’ and are a major influence on how the share prices of the stock will perform. If a business’ fundamentals decline, this is a great reason to let go of their shares. This then gives rise to the importance of being up to date with economic and industry trends within your investment area.

Another reason to shift has more to do with other prospects rather than the stock itself.  Any industrious investor will keep abreast with developments in the markets. In situations where you come across a better performing stock or prospects that offer greater returns, it’s always a good idea to consider offloading your less lucrative portfolio. The challenge comes in being able to accurately pinpoint and select divestment decisions which will earn you better in the long run. Consulting a broker or advisor can mitigate losses in this direction.

Macroeconomic conditions also play a role in individual investment decisions. When a company files for bankruptcy, which happens a lot in the current economic times, it may be time to pack up. In most cases, bankrupt entities would have been bleeding income for extended periods before actually filing and as such their stock will more often than not be worth nothing to the shareholders.

In a nutshell, buying and selling of stock is not an exact science. Sometimes an investors needs to go with his guts while at other times reading into current affairs and the markets can make all the difference.

The ABC of Insider Trading

Anyone who has ventured into the world of stock market investing will have, at some point encountered the term ‘’insider trading.’’ This term alone is enough to make most market players cringe in fear, conjuring images of billion – dollar pyramid schemes and betrayed hardworking investors. It is however interesting to note that despite the infamy that this practice has gained over the years, not many people have a firm grasp on what insider trading really is. The first thing to know is that there are two main forms of insider trading.

Firstly, insider trading can be of a legal nature. In this case, people who hold strategic offices in corporations follow the set out guidelines when buying and selling stock in their firms. This practice is very common, given that employees of companies that are publicly traded, albeit in executive positions, usually own shares or stock in their own firms.

The practice is often considered a form of ‘’insider trading’’ given the fact that the company’s employees possibly have information to their disposal, that is not readily accessible to the general public. The information can take the form of a new product offering, a planned merger or takeover, an upcoming appointment or a great performance report. All these can be factors that impact the company’s share price.  A major feature in this type of trading is that the players have to consistently report their activities to the relevant securities and exchange authority after a sale or purchase of stock.

On the other hand, insider trading becomes illegal when the people on the inside carry on share trade based on information that the general public doesn’t have. When a trader has information about a company and acts on it before the public are aware of it, is regarded as a fraudulent activity. By so doing the general public is considered short changed as the investment playing field is not level or equal.

The penalties of insider trading can be dire. A person can look at up to 20 years imprisonment if successfully convicted of securities fraud. Usually an accompanying charge of mail and wire fraud can be added to the indictment which itself holds a maximum of 20 years in jail as well.