Category Archives: Stock Market Tips

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.

Tips you should know about stock trading

For many people, stock trading is something extremely difficult and scary. They consider it to be a large black hole that is going to take one’s money. In fact, stock trading is a real business for many people just like you. They simply use these tips to work with stocks effectively.

1.They are ready to start losing. Yes, trading stocks may not be profitable from your very first day. You are a novice and you should pay for your tuition – that’s how you do it.

2.They are persistent. Having started trading, they know: nothing is fast here. You need to spend a lot of time, discovering the ways market works.

3.They choose the good broker. It’s a very important step that influences your future trade. A company with good records will be ready to help you when you need it. And scammers will simply take your money away. So, be careful.

4.They start with a few. Actually, you don’t need have millions to start trading. $500-$1000 is enough. You just invest them and use your knowledge to multiply this money. It’s also a learning process that brings you a lot of experience.

5.They focus on a couple of stocks. It’s impossible to keep one’s eye on many different investment tools at the same time. You should pay attention to some really strong stocks that you know how to deal with.

6.They don’t play with cheap shares. As a rule, leading companies in their niches don’t sell their stocks less than for $15-20. That’s why buying $5 or $10 shares is the even more risky game than you think.

 

Keep calm and diversify your investments

The core principle, useful for any investor, is diversification. If you diversify your investments, you may be sure that any crisis or any other change on the market won’t make you lose your money. Instead of this, using this strategy, you will be able to earn in any situation. That’s why a portfolio that consists of the diversified investments is the most attractive tool for any investor. It simply helps to manage all the unpredictable risks that may appear on the market.

What is diversification?

But first, let’s start with the meaning of this term. First of all, diversification is a strategy of investing money, where the person uses a different tool to invest in. It helps lower the risks and increase the chances to get profits for the investor. In other words, diversification is the way to invest in different products at the same time.

Management difficulties

Many people understand that they shouldn’t put all the eggs in one basket if they don’t want to lose them all. But diversification is not that simple. It requires more time and energy to control all the tasks; that’s why nobody thinks of this seriously. As a rule, people understand that they had to diversify their investments when it becomes too late.

If you don’t want to lose your money, you shouldn’t put them all into one financial tool as well. Your best decision would be sharing all the risks between different tools and products. This allows decrease risks that exist in your niche and increase your chances to get profits at the same time. That’s why diversification should be your choice.

Develop your own watch list (when you trade several stocks)

Trading stocks require a lot of attention from a person, who takes part. You need to watch all the stocks, their movement and price changes. Some trading professionals (like the author of TradingSim blog) advise to follow them on a daily basis. But due to a large number of all stocks, he also adds that it would be better for you to focus on some certain sectors, like banking, retail, Internet, automotive, pharmaceuticals, etc. Paying attention to one or two sectors may be great for you: you will notice all the changes clearly. As a result, you will be able to make your own forecasts and trade with profit.
The specialists, who use this strategy, also claim that you need quite a lot of time for getting some results in this. As an author of TradingSim says, he needed several months to watch for the golden sector, for the gold-mining companies, which were presented on the gold market. During these months, he got an experience in understanding how the market works, how the prices change and how are they dependent. Simply following some sector allows understanding all the basics, required for successful trading.

Renewable power is a perfect way for investing

The investor interest to the real assets is growing all the time. It makes more attractive for people with deep pockets to invest their money in something real, some profitable assets, that will bring some income. In last years the interest to the renewable energy sources has grown, making this element and its development in the global infrastructure the fastest one. So, why is renewable energy so popular? Why people are ready to invest their money there?

First of all, such a high interest to renewables is connected with their role on the global energy market. According to several researches, their impact on the mankind grows – in 2015 almost 53% of the world energy generating was related to the renewables. Wind and solar energy sources become more spread all over the world. They lead us to the cheap energy, which is clean and limitless.

The only disadvantage of these types of energy sourcing is their price. It’s not a secret, that solar panels, as well, as the batteries for storing the power, are quite expensive for their massive production. This needs more investments, which promise high incomes to the shareholders.

Besides, the renewables have a huge perspective – more and more cars are produced with the ‘green’ engines, as well as the ecohouses, which use the portable systems for collecting the energy from the environment. They play a great role in investors’ preferences too.

Concluding all of these facts, we can say, that humans are definitely coming into the new era of renewables power carriers.