Category Archives: Stock Secrets

The power of focusing

In many different spheres focusing is the best strategy for gaining success. People say that if you focus on one thing, you succeed, without wasting your time and energy on any additional actions. The same approach is used in stock trading. Let’s talk more about this.
Successful stock trading needs a lot of attention to the financial tools you use. If you watch for any stock growth, you know for sure the way it behaves, the way its price changes. This allows you forecasting the future behavior of the stock’s indicators and, as a result, brings you some money. But how can you choose the stock to follow for?
There are two possible ways to do it. The first one is picking the most popular stock, which is traded by the majority of the users. The second way is choosing the tool, which is your favourite one; or which you have an experience in trading.
Talking about the most popular stocks, we should mention the stocks of Apple (AAPL), S&P, QQQ, GOOG (Google), TSLA (Tesla), NFLX (Netflix), FB (Facebook), etc.
After you chose any one or two stocks, you should pick the right strategy for trading them. First, you have to learn the trading pattern, which is appliable to it. Second, chose the technical indicators, which will be suited best. Also it’s worth paying more attention to your own discipline and psychological attitude to the trade.
These tips, either as some trading experience will change the way you make money trading.

Terrorists’ attacks influence travel companies shares

Last years were full of different terrible terrorist attacks, which killed hundreds of people on the streets of Europe. It doesn’t dramatically influence the level of tourists, who come here, but it still has a great impact on the prices of shares of travelling companies, who bring people to France, Germany, Belgium and other top-visited countries, which became the victims of terrorist attacks.

The best way to discover, what kind of results may occur, is to analyze the market after some of the attacks, which have already happened. For example, after the Paris attack, which happened on the 13th of November, the French stock market dropped over just 1% in its price. Actually, it climbed back after this. So, we can’t say that terrorists influence the whole market. Their impact can be better seen on the travel companies, which have already lost over 2 billion dollars in price through the whole Europe. This sum is amazing if we compare some of the actual losses of travel business companies. French hotels Accor S.A. shares lost almost 5% of their price, Air France shares dropped over 6%. These numbers are amazing, are they?

The specialist’s advice to those, who want to protect their investments, to pay attention to those companies, which are more protected from losses. First of all, they must belong to some strategical fields, like defence, oil and gas industry, banks and so on. Diversifying can bring its fruits, so think well how to split your investment portfolio.

Municipal Bonds – Part Two

Buying Strategies
The most basic strategy for investing in municipal bonds is to purchase a bond with an attractive interest rate, or yield, and hold the bond until it matures. The next level of sophistication involves the creation of a municipal bond ladder. A ladder consists of a series of bonds, each with a different interest rate and maturity date. As each rung on the ladder matures, the principal is reinvested into a new bond. Both of these strategies are categorized as passive strategies because the bonds are bought and held until maturity.

Investors seeking to generate both income and capital appreciation from their bond portfolio may choose an active portfolio management approach whereby bonds are bought and sold instead of held to maturity. This approach seeks to generate income from yields and capital gains from selling at a premium.

The Bottom Line
Investing in municipal bonds can have a long-term impact on your income stream and your portfolio. To learn more about the benefits of municipal bonds, contact an investment professional or thoroughly research them yourself before investing your money.

Municipal Bonds – Part One

Municipal bonds come in the following two varieties:

  • general obligation bonds
  • revenue bonds

General obligation bonds, issued to raise immediate capital to cover expenses, are supported by the taxing power of the issuer. Revenue bonds, which are issued to fund infrastructure projects, are supported by the income generated by those projects. Both types of bonds are tax exempt and particularly attractive to risk-averse investors due to the high likelihood that the issuers will repay their debts.

Risk Factors
While buying municipals bonds is viewed as a conservative investment strategy, it is not risk-free. The following are the risk factors:

Credit Risk: If the issuer is unable to meets its financial obligations, it may fail to make scheduled interest payments and/or be unable to repay the principal upon maturity. To assist in the evaluation of an issuer’s creditworthiness, ratings agencies (such as Moody’s Investors Service and Standard & Poor’s), analyze a bond issuer’s ability to meet its debt obligations, and issue ratings from ‘Aaa’ or ‘AAA’ for the most creditworthy issuers to ‘Ca’, ‘C’, ‘D’, ‘DDD’, ‘DD’ or ‘D’ for those in default. Bonds rated ‘BBB’, ‘Baa’ or better are generally considered appropriate investments when capital preservation is the primary objective. To reduce investor concern, many municipal bonds are backed by insurance policies guaranteeing repayment in the event of default.

Interest-Rate Risk
: The interest rate of most municipal bonds is paid at a fixed rate. The rate does not change over the life of the bond. If interest rates in the marketplace rise, the bond you own will be paying a lower yield relative to the yield offered by newly issued bonds.

 

How Oil Prices Affect Stock Markets

 

Researchers at the Federal Reserve Bank of Cleveland looked at movements in the price of oil and stock market prices and discovered, to the surprise of many, that there is little correlation between the two. Their study does not necessarily prove the price of oil has a very limited impact on stock market prices; it does suggest, however, that analysts cannot really predict the way stocks react to changing oil prices.

It is popular to correlate changes in major factor prices, such as oil, and the performance of major stock market indexes Conventional wisdom holds that an increase in oil prices will raise input costs for most businesses and force consumers to spend more money on gasoline, thereby reducing the corporate earnings of other businesses. The opposite should be true when oil prices fall.

So why can’t Fed economists find a stronger correlation between stock market and oil prices? There are several likely explanations. The first and most obvious is there are lots of factor prices in the economy, such as wages, interest rates, industrial metals, plastic and computer technology, that can offset changes in energy costs. Another possibility is that corporations have become increasingly sophisticated at reading futures markets and are better able to anticipate shifts in factor prices; a firm should be able to switch production processes to compensate for added fuel costs. Some economists suggest that general stock prices often rise on the expectation of an increase in the quantity of money, which occurs independently of oil prices.

Stock prices rise and fall based on future corporate earnings reports, intrinsic values, investor risk tolerances and a large number of other factors. Even though stock prices are commonly aggregated and lumped together, it is very possible oil prices affect certain sectors much more dramatically than others. In other words, the economy is too complex to expect one commodity to drive all business activity in a predictable way.