Investing

Investing 101: A Beginner’s Guide to Investing Strategies

How to Invest Without Becoming Obsessed

Even though it sounds like you need a college degree for it, investing is a lot less scary if you learn the basics first. So, even if you’re just a high school graduate, it can still become your career. All you have to do is be confident and create a plan that will lead you through life.

Why Does it Sound Scary?

It all comes down to our family life and our childhood. People who grew up in poor households are usually scared to talk about money and investments. Meanwhile, those that are well-off are also confused because their parents can rarely give them financial advice that makes sense.

The times have also changed, and what was normal once, it’s not anymore. Your parents are probably encouraging you to buy a house when there’s a housing bubble. But, they think that’s a good idea because, in their time, prices only went up – and almost never down.

Nevertheless, your first investment will be the hardest one you’ll make.

What is the Point of Investing?

When it comes to money, everyone has a different goal in mind. As you get older, your opinions change, and your confidence grows. So, by the time you’re ready to invest, you’ll know which path to follow.

However, there’s one basic goal you should keep in mind – safe and stable retirement. By working hard and curbing your spending habits, you can invest that money difference into assets that will give you more money. Thus, by the time you retire, you’ll have something that’s making you enough cash to live comfortably.

It’s vital to work hard for your goal. If you think that investing is just a simple way of earning extra cash, then you can stop reading this article right now. However, if you want to retire at a reasonable age, you’ll have to learn how to spend less and use that money for different investments.

The goal doesn’t include selling any investments. Wealthy people don’t do that because they would only lose money that way. Instead, they invest in assets that bring them enough cash flow for their comfortable lifestyle. And, the best part is that you can also pass down these assets to your descendants. Now that’s a goal you should strive to achieve.

Types of Investments

People usually start by investing in stocks and bonds. When you buy a stock, you become a partial owner of the company. Meanwhile, a bond is an indebtedness security, and mutual funds actually own bonds or stocks instead of you. Whichever you pick, the choice will depend solely on your financial circumstances and needs.

But, there are other ways as well. You can invest in REITs – real estate investment trusts. Nevertheless, when you are a beginner, it’s best to focus on the funds, as well as on the bonds and stocks they hold.

Having said that, it’s vital to know if you should invest if you have any sort of debt. Credit card debt, student loans, and mortgage debts are all factors you should consider because it might be futile to invest if you’re indebted.

Debt Pay Off vs. Investing

It’s needless to say that you should cover at least the minimum debt payments before you start investing. However, there are other choices if you have some leftover money from your paycheck:

1. Pay off all your debts.

You should consider your interest rate. If it’s more than 10%, you shouldn’t invest. Instead, use that money to eliminate the debts. Why? Well, because the stock market is volatile, and there’s never a guarantee. But, your debt is quite real, and if you don’t pay it off, it can lead to bankruptcy.

2. Use the money to invest in funds, bonds or stocks.

If your interest rate is less than 5%, then it makes sense to invest. It would serve you well in the future to have some extra money lying around. However, investing in bonds might not be that useful. Even if the interest rate is higher than your debt rate, it might not be a good investment after all. Therefore, choose your securities wisely.

3. Do both at the same time.

Benjamin Graham gave all investors, including Warren Buffett, a great piece of advice about investment money. He said that it would be better if you held on to no more than 75% of the total amount in a single asset class. Thus, you can use that same logic and figure out how much money you can actually invest.

If your debt has a low-interest rate, then you should use about 25% of your additional income to pay it off. Meanwhile, you can use what’s left for stocks. However, if investing becomes too expensive (fund and stock prices might go up), then 75% of the additional income should go to the debts. The remainder – 25% – should go to stocks.

Needless to say that you should just pay off your debts if they have a high-interest rate. And, if the situation is a bit more complex than that, then a financial adviser could help you out. They will know how to solve your debts, and they will also give you investment ideas that will bring you more money.

Saving vs. Investing

Before you start to invest, it’s vital to resolve some of the issues you might have. You ought to be employed, and you also need to have insurance coverage. The personal debts you’ve made should be under control, and if you lose your job, you should have an emergency savings fund to soften the blow.

Saving money is not the same thing as investing. If you lose your job, and you don’t have an emergency fund, you’ll have to sell your investments. Thus, all your efforts will be futile.

Lifetime Investing 101

We will now explain two long-term strategies. However, bear in mind that they naturally assume that you’ll continue to hold down a job in the next few decades.

The first one is a minimal effort strategy, while the second one might seem like that as well. But, it’s actually a bit more complex, and you will need to learn more about investing to implement it.

1. Mutual Funds & Margin of Safety Strategy

Jack Bogle is an educator (and the Vanguard Group founder) who has spent a part of his life explaining how you can use cheap no-load index mutual funds to build your wealth. The main idea behind it is to implement dollar-cost averaging, which means regularly buying the same dollar amount of a specific fund.

Thus, you don’t have to time your purchases, and it is more likely that your average purchase price will show the real value.

But, if you’re unemployed, you cannot use this strategy. You won’t be able to buy stocks when they are dirt cheap. For example, in 2006 and 2007, most investors were spending parts of their paychecks on stocks. By the time the financial crisis rolled in, they didn’t have enough money to buy cheap stocks. Thus, they missed a fantastic chance.

There is an easy solution for this, though. You can establish an investment reserve fund – sort of like an emergency fund, but for your investments. If you add at least $100 per week to it, by the time you reach $2,400, you’ll have enough money to freely invest for about six months.

If you feel bad because you have to part with the money, then you should curb those feelings. The most affluent investors are emotionally detached – and that’s why they often make small investments.

Here’s a practical example for you (bear in mind that it refers to dividend reinvestment). Let’s say that you have $6,000 and you want to invest in the VTSMX (Vanguard Total Stock Market Fund). If you invested the total sum in September of 2007, you would have $290 more by August of 2012.

But, if you decide to invest just $100 per month, that investment grows a lot more. So, by 2012, it would have increased to about $7,689. Thus, the solution is obvious: go slow, and you’ll easily win the race.

Mutual Funds – A Warning

There’s one more thing you should know. If you are planning to invest in a low-cost mutual fund, then you probably already know that the initial investment is sometimes quite high. It’s usually between $3,000 and $5,000. Hence, it would be wise to find a mutual fund that has a low initial investment, even if it has high expenses.

But, some poor-quality funds are counting on that, and they will try to attract you with their low initial investment. Don’t get fooled – look what the high-quality providers are offering. Check out Fidelity, Vanguard, and Charles Schwab.

2. Buy and Hold Strategy

Just like Benjamin Graham said – it’s far easier to achieve decent investment results than the superior ones. Achieving superior results is often trickier than it might look.

That statement is true even today, even though most ignore it for regular “stock picking.” Small investors are after the psychological reward, even if it eats up their gains.

For example, if you buy stocks worth $500, you can subtract the $10 broker commission immediately. Then, you might be able to sell the stocks when they experience a 4% rise. But, you’ll have to pay the commission fee again, thus earning nothing.

Winning trades can eat up your gains because you have to pay taxes and various transaction costs. Not to mention that you’ll have to go against computer programs and PhD-level math experts who are just waiting to pick your pockets.

So, what can you do? Well, there’s a huge value in the buy and hold strategy. And, that value increases if the stocks are paying dividends to you for a great number of years. Reinvesting dividends is the right way to go because it could lead to incredible results. And, most of the time, dividend reinvestment is a free service offered by many online brokers.

Buy and Hold Strategy Still Exists

One fantastic example of this strategy is the Corporate Leaders Trust. This mutual fund has never given up on the stocks it holds, even though it’s about the same age as Warren Buffett.

A $10,000 investment in the LEXCX in 1935 would be worth millions today. And, during the past decade, it has outperformed the likes of Berkshire-Hathaway and S&P 500 – pretty amazing, if you ask us. Thus, it’s no wonder it always has a Morningstar five-star rating.

The CFA, Kevin McDevitt, explained the fund’s aim in its 75-year birthday message. He said that they had long-term investments in mind, which meant that they had to find blue-chip stocks that would thrive over the years. That sort of thinking was influenced by fundamentals of a company – not the earnings projections. Thus, if you find reasonably-priced stocks with dividend payouts from reputable brands, you will amass wealth just by holding onto the stocks. People will continue using those products, which means that you will never have to worry about the company going under.

It sounds a lot easier than it actually is, but it’s worth considering.

How to Invest Without Losing Your Money

The first thing you should do is learn how to determine the company’s value. If it makes sense to buy the whole company, then becoming a partial owner will also sound reasonable.

There’s a bit of math included in all that, but in time, you’ll get the hang of it. You should learn as much as you can about the company you’re planning to invest in – and that includes reading the financial statements as well. However, in the end, it all comes down to one thing: how long would it take for you to return your initial investment if you bought the whole company and all its debts? Also, assume that you would, in this situation, collect 100% of the profits until the end of time.

When you understand it like this, you will realize why a $1 stock is not that cheaper than a $50 one. But, now the plot thickens.

It’s easy to do it this way if you’re sure that the company will generate steady profits in the future. However, products come and go, and that especially applies to the tech sector. Nokia was once the king of mobile phones, and Apple was then just a $7 stock. Now, the situation is a lot different.

So, you have to think about the products as well. If nobody will use them in the future, and nobody is using them now, then why invest in them? Also, investing in companies you don’t believe in is a futile strategy. If you hate cigarettes, investing in tobacco companies will make you feel even worse.

Lastly, remember to diversify. Even if some of your stocks fail, one fantastic investment can cover all your losses. And, if you don’t overpay in the beginning, and hold on to your diverse set of about 30 stocks, you will experience grand results.

Then again, if this all sounds complicated to you, you can always purchase a mutual fund. Thus, you can own the entire stock market, and avoid the potential investing research headaches. It all comes down to the amount of free time you have.

Build Your Investing Knowledge

Investing requires a lot of patience, money, and confidence. That will make or break your investing career, so you should always strive to learn more about it. Here is a reading list you can start with:

 

  1. “The Intelligent Investor” by Benjamin Graham. Even though this is a fantastic investing book by itself, the writing style might bother you. So, you can always read the “The Rediscovered Benjamin Graham” which consists of lectures and interviews.

 

  1. Warren Buffett’s annual letters. The investor writes these every year, and you can download them for free from the Berkshire-Hathaway website.

 

  1. Joshua Kennon from About.com. Kennon knows how to explain both the basic and the more advanced concepts about finance. What’s more, he knows how to clarify a successful person’s view about money.

 

  1. If you want to know the bare facts, then you ought to read something from Morgan Housel of The Motley Fool. Meanwhile, if you’re interested in the individual stock analysis, “Crossing Wall Street” blog by Eddy Elfenbein is a must.

 

  1. TheStreet investment guides. These guides first appeared in 1996, and they are a fantastic source of knowledge for beginners. By reading them, you can learn more about the basics and all the essential financial terms. But, if you are a bit more advanced, their daily stock ideas are also worth checking out.
Posted by Judy Romero in Investing

How to Pick Your First Broker

Truth be told, one can start investing even without a brokerage account. When you are a young investor, choosing a perfect broker for yourself can often be much different than it would be for experienced investors of the same level of experience. You choose a broker in a similar way as you choose a stock – with a lot of careful consideration, as not all investors require the same brokers.

What Is a Broker?

Before choosing one for yourself, you should know what a broker actually is. Basically, we have two kinds of brokers: ones who are engaged directly with clients (regular brokers), and ones who function as mediators between a larger broker and a client (broker-resellers).

Regular brokers are usually believed to be more respectable than broker-resellers. That doesn’t mean that resellers are bad, but you should learn a bit more about their ways before you sign up with them. Regular brokers such as TD Ameritrade, Ally Invest, Fidelity, and Capital One Investing belong to recognized organizations. For example, they are members of the FINRA (Financial Industry Regulatory Authority) and the Securities Investor Protection Corporation.

Full-Service Vs. Discount Brokers

Let’s break it down even further and learn the distinction between discount brokers and full-service brokers. You might have guessed from the name – full-service brokers provide significantly more services than discount brokers. But, the services aren’t exactly cheap. When you hire a full-service broker, he will do much of the legwork for you, giving you plenty of one-on-one advice and customized suggestions and research.

When it comes to discount brokers, many of them will provide the option to request a broker solely for advice on a specific trade with your current brokerage account. Be cautious, though, because once you execute that trade, you will end up paying considerably more (in execution fees) after having consulted with an actual broker than you would with a plain online trade.

If you are a young investor, it is probably your best bet to go with discount brokers. Although some people advise new investors to hire full-service brokers, that’s not financially feasible for a young person who has just started investing. Moreover, many investors have used online discount brokers in recent years. They provide various tools suitable for inexperienced investors who aren’t always sure what their next step should be. Also, when you start slowly, you’ll be able to learn much more about investing if you do some of the work on your own.

Fees and Costs

Although trade executions fees are important, there are other types of brokerage fees one should take into account as well. Most people under 30 are limited by their budget. Before investing, it is essential that you look at the fees that could apply to you. By doing that, you will make sure that you get the most of the money you invest. Here are some examples of additional costs you should consider.

Minimums

To start a brokerage account, most brokers require minimum balances. With an online discount broker, the number usually ranges between $500 and $1,000.

Margin

New investors often don’t want to open a margin account straight away, but it’s something to consider in the future. The minimum balance is normally higher for margin accounts. Also, be sure to take a look at the interest your broker will charge you when you make a trade on margin.

Withdrawal

Even though the money belongs to you, it isn’t always easy to get it out of your account. Some brokers will charge you to make a withdrawal. Furthermore, they might not let you take any money if it will drop your balance below the minimum. With some accounts, you can write checks from them, but those normally require a much higher minimum balance. You should have a good understanding of the rules regarding the withdrawal of your money from your account.

Complicated Fee Structures

Even though the majority of brokers have comparable fee schedules, some have complicated fee structures. These structures can make it hard to spot hidden fees. Complex fee structures are typical among broker-resellers who might use them as a selling point to attract clients.

If your potential broker has an unorthodox fee structure, it’s even more important to confirm that he is legitimate. He has to look out for your interests, and his fee structure has to complement your investing style. When the rates seem too good to be true, they might be. Be sure to read about fee summaries and your account agreement thoroughly. Additional fees can be hidden there.

What Kind of Investor Are You?

The answer to this question should affect the selection of your broker. There isn’t one perfect broker for everyone. So, it might be smart to determine your investment style before you start to invest.

The Trader

If you don’t hold onto stocks for long periods of time, you are a trader. Traders are typically interested in dirty and quick gains that are based on short-term price volatility. Also, they make a lot of trade executions in a short amount of time. If this is how you envision yourself, search for a broker with low execution fees. Otherwise, your returns could be eaten up by high trading fees. You should know that active trading requires experience. Frequent trading and a new investor are often a match that results in negative returns.

The Buy-and-Hold Investor

A buy-and-hold investor, also known as a passive investor, holds onto stocks for the long term. They let the value of their position increase in worth over longer periods of time and then reap the benefits sometime later. Buy-and-hold investors’ main concern is staying away from brokers with monthly fees. A somewhat higher trade commission shouldn’t concern them.

Other Factors to Consider

If you find that your investment style falls between a buy-and-hold investor and an active trader, you are not the only one. In this case, additional factors will be crucial when picking the best broker for yourself. For example, an extremely young investor (a minor) won’t be able to open his own brokerage account. But, some brokers have made it possible to set up custodial accounts and thus offer fee structures that suit teenagers. This way, people can start investing at a young age.

The Bottom Line

There will come a time when you’ll have to make a decision and choose a broker. It is essential to balance your needs as a client and as an investor. Another thing that is crucial is good customer service.

Your first broker doesn’t have to be your broker forever. However, you will have a much better shot at making money as an investor if you take your time and do your research before choosing the right one.

Posted by Judy Romero in Investing
Retiring and Looking At Investments?

Retiring and Looking At Investments?

If you are retired and you read this, I would like to extend my sincere congratulations for having the luxury of a pension. I’m sure you’re anxious or maybe the curiosity to understand how to better manage their pensions and activities to help his years as a boarder a comfortable financially so they can concentrate on enjoying life without the inconvenience of worrying about money.

1) to examine the pension plan

The first step you must take is to find himself exactly how your retirement plan in detail. Read the fine print and ask if uncertain. All retirement plans are equal. Normally, you should note if the pension is his whole life, or if it is still a certain age. Pension plan to provide an element of insurance for you? How much you pay each month? Where are the payments are made on an annual basis? Are organizations that provide these benefits to insured and what would happen if these organizations could fail in certain situations? There are ways to get tax credits and reliefs of his pension?
These are some questions you should ask questions about the plan.

Figure 2) for its core activities and liabilities

Now we understand better its security plan is important for you to look closely at the resource base of assets and liabilities that most people have is their home and possibly their own cars or other vehicles. However, these activities can become obligations. If you’re one of those people who have managed to pay their homes and vehicles, without having to rely on contributions, it’s great! But if you’re the majority, who still have your house every month and for vehicles to meet, we must consider whether you can reduce the total long term liabilities.

dollar-appreciation

One possibility is to try to repay their debts as possible. We all know that the payment installments usually involve heavy interest rates and may end up paying three times the original price of the house of the vehicles. Paying their debts before it reduces the interest payable. Now I understand that you should keep the money in hand and there is inflation, if the money later, maybe a bit ‘of money is worth less, but in general, by hand or the bank is an illusion. In fact, it happened in the house and car, why not reduce the amount spent?

At this point you probably have some smart investors who believe that the use of money to invest, we can easily offset the interest earned on our liabilities. But this violates the first principle of investment, for example, you should only invest what is needed (for example, the surplus).
This brings us to our good neighbor, the financial investment, if the mutual funds, shares such as Royal Mail that pay dividends, bonds or other financial products. I remember, was highlighted in our financial profile has changed. For example, the typical owner should review their financial investments and reallocate the funds to ensure that the reduction of the likelihood. For the most part, the days of the need to speculate heavy to be put aside in favor of safer investments.

3) Take care of yourself

Surprised by the fact that it is a financial advice? If you think that the main cause of the cost of many pensioners are actually medical expenses. The little money saved by not going for regular health screening are often overwhelmed by the costs incurred by the retiree discovers he has a serious illness. This is not meant to scare, but it’s just a reminder. Do not bore you with statistics. Suffice it to say that at this age, as older adults face a higher risk of having a serious disease like cancer, heart disease, stroke … and so on.

Now the good news is that if you care of themselves physically, decreases the chances of it happening. Simple things like walking regularly, cut the consumption of tobacco and alcohol, or better still to stop smoking, staying socially and mentally active and higher dividends and so on is the best plan to invest freely. As pensioners, which should include regular checks to detect early signs of disease, preferably twice a year, or at least once a year.

4) Insurance

However, some serious diseases and disasters occur. Fortunately, if you followed the suggestion above, would have been recognized previously, but still pay the bills and so hospital to recover. This is where the insurance cover may seem a waste of money for some, but believe me, those who find themselves suddenly down with a serious illness and harassment by the hospital bills, you probably wished that he had received assurances. It seems ridiculous that people could buy insurance for their vehicles, yet none of their bodies. What is more important?

If you agree that your body is important and that hospital bills are ridiculously expensive, it remains only to find that an insurance company that should, if your retirement plan does not include insurance with him. The good news is that insurance is relatively cheap nowadays and often with a tie in the investment plans. As a pensioner, what is important to you is to ensure that insurance is very affordable and still cover the medical expenses and hospital care. There are more of these policies, and is only a matter of choosing one that suits you.

Another issue to consider is your home. It may be inconceivable to believe that his house, literally, it could burn or destroy, but natural disasters and accidents happen all the time around the world. The smart thing to do is get a basic insurance for your house if you do not already have one.

5) make a will

Why leave things to chance? In several regions, generally the government has sent its lawyer to divide the assets of a person under the laws of succession in that country. But if you want to cut exactly as you want, it’s a good idea to make a will.

6) Finding funds and continue to work

As a retiree, you may want to continue working in any capacity, whether independent or part-time vocations to fill the time. But if you are physically unable to work due to medical conditions or otherwise, you can get financial aid. There are many organizations that can help you if you are in a financial crisis and its retirement plan is not sufficient for their basic needs.

If you are unsure, contact with other retirees in their region to share information. Or simply use the Internet and the public to ask where to find help. The leaders of the local community, his former company, friends and local religious leaders are all people who can give an idea on how to get help.

7) Calculate the costs

Now that you have an idea of its assets, liabilities, insurance requirements, income and the like, it’s time to create an actual plan for how the cost of the amount you can pay each month.

Do this slowly. All guides on-line is essentially the same as a guide. No matter how many articles to read, nothing can replace this process for every elderly person is unique and has its own needs and desires. I really recommend you get a good solid financial consultant for this step, or someone very good with the finances that you know and trust. There is often a good financial planning professionals who are ready to run your finances at a very low cost.

However, to avoid this step, remember that the situation may change in future and, if possible, some basic plans should be taken into account.

Once done, you’re on track to enjoy their retirement. Although the management and knowing your finances may seem like a conventional accounting of all, I’m sure the financial freedom and confidence that comes with it is worth the time and effort.

Posted by Judy Romero in Investing, Investment, Stock Market
Get Ready for the Breakout to New Highs

Get Ready for the Breakout to New Highs

It’s been a volatile year so far, and we’re only 6 months in.

The markets looked pretty shaky in January and February when they plunged more than -11% in one of the worst starts to a year ever. But then they just as quickly made it all back and then some.

The Brexit vote’s surprise outcome the other week sent stock reeling once again. But within days, the markets were right back to where they were when they started.

After all of the market’s machinations, the S&P is now up 2.89%.

Even though the bears were growling each time the market pulled back, the bulls won out as they have been doing since this bull market began in March 2009.

And now it looks like the markets are poised for a massive breakout sending stocks to brand new all-time highs.

Fundamentals

The fundamentals of the market look strong.

It’s true that Q1 2016’s GDP gave pause to the market with its advance estimate of only 0.5%. (This was in sharp contrast to Q4 2015’s 1.4% reading.) But the revised Q1 ’16 estimate a month later showed the economy did better than originally thought at 0.8%. Then, just last week, the final estimate for Q1 GDP showed the economy grew by 1.1%, which was even better than all of the Q1 estimates along the way.

But historically, at least over the last couple of years, Q1 has been notoriously weak, only to surge higher in the next quarter. Take Q1 ’14 for example, which came in at -0.9%, but then exploded higher in Q2 with a 4.6% print; or Q1 ’15 at just 0.6%, which was then followed by a Q2 growth rate of 3.9%. Both of those years saw the S&P trek higher as the US economy continued to expand.

We won’t get Q2 ‘16’s GDP estimate until July, 29th. But the Federal Reserve Bank of Atlanta’s ‘GDP Now’ forecast is putting it at 2.6%, painting a picture of a strengthening US economy.

Underscoring this is the robust Employment numbers showing unemployment at a 9 year low at 4.7%, with an average of nearly 200,000 new jobs created each month over the last year.

Consumer Confidence is also strong at 98.0, putting it within just a few points of its best reading since this bull market began. A strong consumer is an important metric when you consider that consumer spending accounts for roughly 70% of the US economy.

The list of improving economic reports goes on and on, from Manufacturing, to Services, to Housing, and more.

Let’s also not forget what the professional investors are doing since they are the ones who truly move the market. And one look at the State Street Investor Confidence Index (which tracks actual buying and selling of stocks from institutional investors), shows that the smart money is still bullish. A reading above 100 shows portfolio managers adding equities to their portfolios, which is a sign of confidence in the market. The latest report showed a combined reading of 105.9 with all three major regions including North America, Asia, and Europe, all recording scores above the 100 threshold.

chart Economy

Technicals

The technicals of the market are also strong.

When the market plummeted in the beginning of the year, I remained confident that it was nothing more than a long overdue correction, rather than the start of a bear market.

Why? For one, a bear market doesn’t officially even begin until the market falls by at least 20%. And from its peak in May of 2015 to its lows in Feb. of 2016, it was ‘only’ down -15.21% at its worst.

But why was I so confident the market was going to turn around? The chart said it all.

In the chart below (long-term weekly chart), you can see a trendline drawn from the lows in March of 2009 (beginning of the bull market) to the second point of the trendline in October 2011 (the lowest point following the highest high that preceded it). That trendline remained intact for the entire bull move, but had not yet been tested since those two points were established.

Knowing that a mature trend should successfully test that trendline at least once after it’s been established (resulting in at least three touch points), said to me that we’d find strong support at that level, which was just under the 1,800 mark.

As it approached that line, getting as low as 1,810.10 on February 10th, the market showed its resilience and strongly bounced backed. The Relative Strength Index oscillator at the bottom of the chart also foreshadowed the rally to come as it flashed bullish divergence while the market took out last August’s correction lows, and January’s lows as well, but registered ‘higher lows’ on its RSI readings. (The ‘higher low’ RSI readings while the market is making ‘lower lows’ in price shows it’s being made on less strength and conviction.)

Within the next 11 weeks, it soared 16.63%, closing higher in all but 3 of those spectacular weeks as it regained the closely watched 2,100 level.

Currently, the market remains above 2,100, and is above the downward slanting resistance line that connects the all-time high from May ’15, to the reactionary high in November ’15, to last month’s high in June ‘16. And with the market trading above all of its moving averages (10-day, 20-day, 50-day, and 200-day moving averages), it appears to have the momentum at its back to push onto new highs.

Targets

I’m expecting the market to make new all-time highs by the end of this upcoming earnings season (if not sooner). With the market only 1.49% from the old highs, it won’t take much to do so.

Why earnings season? For one, it’s been a great catalyst to propel the market higher. Over the last 29 earnings seasons (going all the way back to Q1 2009 when the bull market began), the median return for the S&P 500 was 2.35%. And 21 out of the last 29 periods (72%) were winners.

Moreover, there’s a greater chance (70%) of having a positive earnings season if the last earnings season was positive as well. And last earnings season saw the market up 2.38%.

Combine that with all of the good news out there both fundamentally and technically and it’s hard to come up with a good reason why it won’t make new highs.

Some may point to Brexit fears as potentially holding the market back. But, I’m highly skeptical it will even happen. And the narrative that’s taking shape right now suggests that the powers that be are looking for a political way to walk that non-binding referendum back and stay within the EU. But even if it does happen, Article 50 isn’t expected to be triggered for at least 3 months until a new Prime Minister is elected (or possibly not even until next year). And from that point, the Brexit still won’t go into effect until a two-year long process takes place for Britain and the EU to negotiate new trade agreements that will govern economic, labor, and immigration activity once they leave.

Even though it appeared as if everything had changed over there with the recent vote, in all actuality, it doesn’t seem like anything has changed at the moment, and maybe never will.

When the market finally does breakout, I’m expecting it to be big and fast. With bullish sentiment from retail investors at an 11 year low, and neutral sentiment at a 16 year high, there are a lot of people expected to pile into the market once this happens in a fear-of-missing-out-rush to get back in.

I’m expecting a move to 2,250 and even 2,300 to take place by year’s end, which would represent anywhere from a nearly 7% gain to more than a 9% gain from current levels.

And if that’s what’s in store for the indexes, then there are even bigger gains to be seen in the right individual stocks.

Three Picks for the Coming Breakout

Here are three picks that should benefit from the upcoming breakout and are poised to gain even more in the process.

1) iShares Russell 2000 Small-Cap ETF (IWM)

The iShares Russell 2000 Small-Cap ETF tracks the performance of the Russell 2000 Index. It represents virtually all the different sectors, but with a greater weighting towards the more aggressive Technology (16.69%), Financial Services (16.23%), Industrials, (13.39%), and Healthcare (13.33%) sectors, which make up nearly 60% on the index.

Granted, it holds thousands of stocks (hence the 2000 part of its name), but the ETF’s top 10 holdings are: Steris (STE), CubeSmart (CUBE), Treehouse Foods (THS), West Pharmaceutical (WST), MarketAxess (MKTX), Tyler Technologies (TYL), Sovran Self Storage (SSS), Manhattan Associates (MANH), Piedmont Natural Gas (PNY), and Vail Resorts MTN).

As far as valuations go, it has an average P/E ratio of 19.65 (just above the S&P’s 18.57), a P/B ratio of just 1.84 (below the S&P’s 2.57), and a P/S ratio of only 1.10 (vs. the S&P’s 1.80).

Performance-wise, the Russell has some catching up to do to the broader market. While the S&P is up 2.89% YTD, the Russell is only up 1.02%. And even though the broader market is just 1.49% away from their all-time highs, the Russell has to rally 10.74% to match their best levels. But that’s exactly what I’m expecting them to do and then some with a price target of 1,350 by the end of the year for a potential gain of 16.70%.

2) Lowe’s (LOW)

Lowe’s Companies is a retailer of home improvement products with a special emphasis on retail do-it-yourself and commercial business customers. They offer products and services that cover virtually every area of your home improvement needs including home décor, home maintenance, home repair, lawn & garden care, and more. They also provide solutions for commercial buildings and customers as well.

They are a Zacks Rank #2 Buy, with a VGM Score of A, in an industry (Building Products-Retail/Wholesale) ranked in the top 7% of Zacks Ranked Industries. With retail and housing/construction both doing well, this is a great stock to straddle both spaces.

Valuation-wise, they also have a Style Score rating of A, which is underscored by their industry beating and market beating PEG ratio of 1.27 vs. 1.48 and 1.79 respectively. Their P/S ratio also comes in below the market at 1.11 vs. the S&P’s 1.80. And growth-wise (also an A rating), they’re outperforming the market as well with a projected sales growth rate of 7.27% and projected earnings growth of 22.47% in comparison to the S&P’s sales and earnings outlook of 2.83% and 5.95%.

Looking at their chart, you can see they have traced out a large bullish rectangle pattern for more than a year. They finally broke out to the upside in May, although they quickly retested (albeit successfully) their old resistance area turned new support, before shooting back up. My short-term price target over the next 3 months comes in at $89.90 for a 12.94% increase. Longer-term, over the next 6-12 months, I’m looking for a move to $102.50 (before it goes even higher) for a potential gain of more than 28%.

3) Thermo Fisher Scientific (TMO)

Thermo Fisher Scientific, headquartered in Waltham, Massachusetts, is in the Medical Instruments industry and they provide analytical instruments, equipment, reagents & consumables, software, and services for research, manufacturing, analysis, discovery, and diagnostics.

They are a Zacks Rank #3 Hold, but their industry is ranked in the top 37% of Zacks Ranked Industries. The Healthcare industry is also one of the top job creators generating more than 487,000 new jobs over the last 12 months making it the top job creating sector. And more new jobs goes hand in hand with an increase in economic activity to warrant all the new hiring. And an increase in economic activity usually means more new sales and an increase in earnings.

You can see this in their projected sales growth numbers at 5.88% (which is more than double the S&P) and their projected EPS growth at 9.97% (which is nearly a 70% lift over the market). And all the while their net margins are coming in at 11.49%, beating both the broader market and their industry.

Chart-wise, they too have been tracing out a large bullish rectangle pattern before recently breaking out to the upside. But the recent Brexit inspired pullback sent TMO back down to successfully retest their previous breakout point (which was not that far off from their supporting 200-day moving average either). Since then, TMO has bounced back nicely and are poised to continue their gains. They report earnings on 7/27 and that could be the catalyst to send prices to new all-time highs. And with 28 positive EPS surprises in a row, I’m betting they positively surprise once again. My near- term price target is focused on $164 for a 9.90% increase, while longer-term I’m looking for $190 for a potential gain of over 28%.

Summary

Even though this bull market has gone on for more than 7 years now, I don’t think it’s about to stop anytime soon.

And we’re still years away for it to become the longest running bull market in history.

But history is being made right now. And this bull market’s story is still being told.

Could some of the economic numbers be better than they are? Of course. But the slower growth (key word being growth), and lack of excesses in the economy, has elongated the typical 5 year boom and bust cycle to a potential 8-10 year cycle if not longer.

Also, when you stop to consider the earnings yield on the S&P 500 (5.70% using F1 Estimates) in comparison to the yield on the 10-year Treasury (1.46% and seemingly going lower), there’s almost nowhere else to go to get a better return than stocks.

For stocks to be considered the better value, their risk-based earnings yield should trade at least at a 200 basis point premium to the 10-Year’s risk-free return. With the S&P’s earnings yield trading at more than a 400 basis point premium, stocks should enjoy exceptional demand for a long time to come.

Make sure you’re positioned for the potential upcoming breakout and be a part of history.

Thanks and good trading.

Posted by Judy Romero in Investing, Stock Market, Trading
What to Do When the Market is Too Hot

What to Do When the Market is Too Hot

Lately, I’ve been reading quite a bit about how the market is getting overheated.  Some even say the market is in or near a bubble and soon will burst.  Once that happens, most expect large losses and price drops coming from the stocks in the market.

The S&P 500 is widely accepted as a good measure of overall stock market activity.  So far, year to date returns for the S&P 500 are up 24.48% as of December 13, 2013.  In 2012, the S&P 500 return was up 13.4%.  As you can see, the market has had quite a good run over the past 2 years and investors should have done fairly well with their portfolios.

The higher returns over the past couple years has many investors worried.  The stock market goes up and it goes down.  We can’t always expect it to go up.  Many investors and pundits become worried when the market reaches new highs, expecting that it won’t be long before it comes back down again.

This is irrational thinking.  We should not be thinking about the market reaching new highs in the form of prices.  The S&P 500 being at it’s all time high price really tells investors nothing.  As investors, to really find meaning from the market price, we need to look at it in terms of valuation.

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Looking at the market in terms of valuation means comparing the S&P 500′s price to the underlying earnings from the companies making up the index.  Most recently, the S&P 500 has a P/E ratio of 18.4 on 12/13/13.  A year ago, the P/E was 16.8.  Historically, the average has been right around 14.  So what this means is that certainly the S&P 500 is currently trading at a higher valuation than it was last year and even based on it’s historical average.  However, one thing that should be clear is that a P/E of 18.4 is most definitely not a bubble.

While the market may pull back at some point to align itself closer to historical norms, I don’t think we will see a sharp decrease due to any sort of bubble burst in the stock market.

The stock market is getting heated.  Prices are climbing.  Valuations are climbing.  Investors need to have a plan of action for when the market is starting to become overpriced.  There are a few paths of action dividend growth investors may consider in this type of situation.

Continue with your plan.  Yes, the market valuation is getting higher and many companies are becoming overpriced (not bubble territory yet but certainly prices that smart investors aren’t as interested in).  However, there are still many dividend growth companies that are trading at reasonable or even under valuations!  There are still quite a few companies on my list of Top 35 Dividend Growth Stocks that I believe are still at price points worth buying.  Later this week, I’ll write an article highlighting some of the companies I believe still worthy of buying at current valuations.  Definitely, if the investor is willing to do a little digging, more companies trading at reasonable valuations worth buying can be found.  Many dividend growth investors, me included, will want to continue with our buying of more shares of dividend growth stocks.  Until I cannot find a single company worth buying at it’s current price, I will continue to be a buyer for the long term.
Sell Put options.  This is a method many investors can use to earn a return while waiting for prices to come down to levels where they are willing to buy.  Selling put options means that you are giving someone the right to sell 100 shares of stock for each option at a given price.  In return for this right or option, the person will pay you a premium at the start of the contract.  You keep this premium whether they decide to sell their stock to you or not in the end (when the option expires).  For example, I may sell a January 35.50 Put option to someone for Microsoft for a premium of $0.23/share or $23 total.  I will receive $23 up front.  Then if the price of Microsoft drops from it’s current price of $36.69 down to $35.50 (or lower), the person who bought the put option may exercise it forcing me to buy the 100 shares of MSFT for $35.50 each.  My cost basis on each share will be the $35.50 I pay minus the $0.23/share premium I received.  My cost basis per share is then $35.27.  This means I am buying the shares at a 3.87% discount from where they are currently trading.  If you are willing to buy at this discounted level then you may want to do the option.  If not then I would advise not doing the option trade.  Option trading is an advanced strategy and I would recommend anyone interested to do a little research before jumping into this strategy.
Continue holding current positions, hold off on buying anything new and collect cash for when prices come back down.  If you feel prices are getting too high and are not comfortable buying anything with the market so heated, then one option is to put your plan on hold.  Collect the cash you normally would use for buying and keep it in a savings account.  Accumulate this cash so that you can put it to use when market prices come down to a level you are more comfortable buying at.  You may want to hold your current investments rather than selling because you want to own for the long term, you don’t really know what the market is going to do from this point (could continue going up) and you want to collect dividends.
Sell out of current investments, collect cash for new purchases when market prices come down.  There are certainly some investors that may feel more comfortable selling their stocks right now and getting out of the market completely.  This isn’t what I’d recommend, but certainly if that is what makes you able to sleep at night then that is what you should be doing.

Personally, I feel I am still able to find good valued companies worth buying, even in today’s heated market environment.  I have no idea what the future direction of the market will be.

The year 2014 could bring a small slow drop in prices, a large drop in prices, another large gain in prices.  We really don’t know.  There is nothing stopping the market from continuing it’s climb eventually to reach true bubble territory.

I am a long term investor, I buy my companies for the long run.  I won’t sell them unless I believe they are trading at absolutely ridiculous valuations, which they currently are far from.

My personal plan is to continue with my plan.  Making purchases of new shares and new companies as I have money available.  I am becoming more interested in options strategies and may decide to implement some of those in 2014 but feel I must do a little more research before jumping down that path.

How about you?  Do you feel the market is valued to high?  Are you afraid of a crash soon?  Are you continuing to buy or holding off or trying new strategies?  Share your thoughts in the comments below!

Posted by Judy Romero in Financial Statement, Investing, Stock Market
Monitoring Your Dividend Growth Stock Portfolio

Monitoring Your Dividend Growth Stock Portfolio

One of the great advantages of dividend growth stock investing is that you don’t have to be a slave to your portfolio.  You aren’t a day trader staring at charts on your computer all day long.  You don’t have to check your portfolio daily, weekly or even monthly if you don’t want to.  You can travel, work, play and live your life without worrying how your portfolio is doing or if their is something you need to be doing in your portfolio.  In dividend growth stock investing we are buying high quality blue chip stocks which are many times the leaders in their industries.  These companies have shown a history of growth and consistently growing dividend payments.  We can sleep well at night knowing management is doing a good job running these great companies and our stock value will hold up nicely.

Buy and Hold Portfolio

So dividend growth stock investing can be referred to as buy and hold.  Yes as a dividend growth stock investor I prefer to buy my stocks and ideally hold them forever as I collect ever growing dividends year after year from the companies I own.  However, sometimes things change.  The economy changes, consumer behavior changes or management changes.  Change can cause what was once a great investment for our portfolio to possibly be not as good.  Since things can change it does require us to monitor our portfolio at times.  So a benefit is that you don’t have to constantly be watching your portfolio day in and day out but I would not recommend a buy and completely forget approach either.

 Growth Stocks

How Often Should I Monitor My Stock Holdings?

Ask that question to 5 different dividend growth investors and I imagine you will probably get 5 different answers.  Some say you need to monitor monthly while others might say review your portfolio once a year.  Here at Dividend Growth Stock Investing, I believe you should do a quarterly portfolio review.   I plan my reviews for April, July, October and January after the completion of each calendar quarter.  Now I’m not going to sit here and say I never look at my portfolio outside my plan reviews.  I typically look at my portfolio daily and definitely weekly but this is more because I love stock investing rather than because I must be monitoring.  I believe if you monitor once a quarter you will be doing fine.

What Do I Keep Track of When Reviewing My Portfolio?

There are a few things I like to look at when I do my quarterly dividend growth stock portfolio reviews.  I monitor income earned by the total portfolio, income paid by the individual companies and do a review of the individual companies I own.  You might also want to keep track of portfolio diversification and weighting of individual companies in your portfolio

The first and in my opinion most important metric to keep track of is the total income earned by your portfolio.  I keep an Excel spreadsheet where I keep track of each quarter’s income.  I want to make sure that my dividend income earned this previous quarter is higher compared to the dividend income earned in the same quarter one year ago.  If this amount has gone down then I need to figure out why.  Possibly a company decreased their dividend rate which will signal a sell for that stock.  Another reason quarterly income could decrease is if I made a sell throughout the year and kept the proceeds in cash or investing in a stock with a lower dividend yield.  Either way I want to make sure I understand what is happening with my income since this is my most important part of my portfolio as a dividend growth investor.

Next I review the previous 6 quarterly dividend payments made by each company I own.  I want to make sure each company I own is increasing their dividend rates annually.  When reviewing their previous dividend payments I should see that the rate has been increased at least once.  Otherwise I will possibly want to review the company and think about making a change.  As dividend growth investors we want the dividend rate to be growing.  Our goal is an income that will be able to meet our financial needs while growing to keep pace or outpace inflation.  Companies that aren’t annually increasing their dividends aren’t a good match for a portfolio with this goal.

I also like to review the individual companies I own each quarter.  I look for any good or bad news that has come out in the last quarter about the company.  I keep a file on each security I own since the day I bought it and will add anything I believe to be significant to that file.  I also like to monitor the fundamentals of the company and the current valuation of the company.  Is the company continuing to grow earnings?  Is the company valued too high where I may want to think about selling or is the company undervalued where I may want to add to my position?  On an annual basis I will do a more extensive review of each company to make sure the annual reported earnings numbers are growing, dividends are growing, debt levels are good, etc.

One last thing you may want to monitor with your dividend stock portfolio is the diversification and weighting of individual companies making up the portfolio.  To help decrease risk of our investing portfolio it is important to have some diversification and to make sure that one or two stock holdings aren’t making up the majority of your portfolio.  I typically review this when making new purchase decisions and try to keep the portfolio in balance with those new purchases.  However there could be a big price movement during a quarter causing the portfolio to become significantly unbalanced which you may want to address.  Since I don’t like to sell for this reason, I will try to solve the situation through new future purchases.

Conclusion

As a dividend growth stock investor you don’t need to be constantly watching your portfolio.  This is one of the big reasons dividend growth stock investing is a perfect strategy for many investors who don’t have the time or interest of constantly watching their investments.  I recommend reviewing your portfolio at least quarterly while others believe you can even get away with checking things out once a year.

Posted by Judy Romero in Investing, Investment, Stock Market
What are Dividend Raise and Dividend Cut?

What are Dividend Raise and Dividend Cut?

There is a very delicate balance between the dividends that a company pays to the investors, the shares price of that company, dividend raise and dividend cuts.

Companies that regularly increase their dividends (such as dividend champions) attract a lot of investors. When shopping around for dividend paying companies, the dividend raise chart is very important. You need to find companies that do increase their dividends each year, or your investments will be eroded by inflation. However, it’s not realistic and sustainable, for a company, to increase dividends at unusually high rates.

What is a sustainable rate when it comes to dividend raise?

A dividend raise around 10% yearly covers the inflation and manages to bring you good profits, without endangering the future of the company. A dividend payments growth rate around 5-10 % per year can be considered as standard procedure. But, if a company announces an important increase in dividends payments, this information should raise a little red flag. Sudden increase in dividend payment is not always a good sign: it could be a strategy used by that company to increase the price of shares.

When Dividend raises occur

Dividend increase is a mechanism that companies sometimes use to keep the price of their shares up. Since investors are looking to make more money with their investments, they will look after stocks that are able to increase their dividend years after years.

Therefore, solid companies will be able to raise the dividend payout without busting their dividend payout ratio. If a company sees its cash flow and net profit increasing, it will vote a dividend payout increase in order to share the wealth with their shareholders. When this occur, the dividend payout ratio remains about the same and investors receive more money in their pocket. This is when dividend raises should always occur. However…

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Beware of Dividend raises – look behind the numbers

During a recession, there are periods when a company’s stock start going down. A lot of investors will feel the urge to get rid of their shares in this situation and the price will continue to go down. To stop this chain reaction, companies might increase their dividends, to attract new investors and to raise the price of the shares.

There are serious risks associated with this strategy. When a company pays more dividends then it can actually afford, the company may remain vulnerable, without financial resources for growth and development.

There are also companies that finance dividends raise from borrowed money. That’s a huge vulnerability of a company, and you should avoid companies with high debt levels.

Dividend Achievers, Dividend Champions and Dividend Aristocrats

For safe, profitable long-term investments pick companies that have constant, average raises of dividend payments. The companies that, during the last 25 years, maintained a steady raise of dividends are known as dividend aristocrats. Investing a part of your money in companies from this exclusivist group is a good way to make sure you build a strong, safe portfolio.

For example, Colgate-Palmolive maintained a steady dividend raise over the last 48 years. The most recent increase was in February 2011, when the company approved a 9,8% dividend raise. The annual dividend payment increased by 13% per year, since 2001.

Depending on the number of years of consecutive dividend increase, there are 3 categories of solid dividend payers. Here are the complete lists:

Dividend Aristocrats List

Dividend Achievers List

Dividend Champion List

Dividend cuts – when they occur and what they tell you about a company?

Dividend cut is a collocation that all investors fear and want to avoid. However, sometimes companies have to cut the dividend payments to the shareholders, in order to improve the company’s operations or even to save the company from bankruptcy.

If the earnings of a company were far lower then estimated, the only realistic solution for that company to remain competitive on the long term is a dividend cut.

Companies try to avoid it, because it generates a lot of mistrust among shareholders, determining them to start selling stocks, which can cause important financial losses to a company. In most cases, the company stock will drop significantly upon the dividend cut announcement.

But economic turmoil can determinate any company, even those formerly in dividend aristocrats group, to make use of dividend cuts. For example, in 2009, a lot of banks from United States were forced to cut drastically their dividends. US Bancorp cut dividends by 88%, while Citigroup and Bank of America slashed their dividends to just one cent.

A Dividend cut is not a solution preferred by a company’s executives or shareholders, but it’s a decision that sometimes needs to me made. If a company cut dividends, it’s never a good sign as it is usually one of the company’s last resorts. By cutting the dividend, the company knows that it will lost a lot of capital market and interest from investors. Maybe it’s time for you to leave to boat too…

On the other side, a dividend cut means cheaper shares, so if you consider that the company has long term potential; it’s the right time to invest. However, there is a combination of factors that you should really avoid, when it comes to investing your money: dividend cuts, high debt level and low cash flow. This combination is hard to overcome by any company, so place your money elsewhere.

In the end, if you are looking to build a long term growth dividend portfolio, you are better off avoiding companies with low dividend raise and sell companies that cut their dividends.

You can find financial information about a company on the company’s website or use our dividend resources to look over more companies.

Posted by Judy Romero in Dividend Stocks, Investing
Successful Stock Market Timing Depends On Trend

Successful Stock Market Timing Depends On Trend

Historically, the stock market is in general in Trends

Trend investors depend on the change to generate their work tactics. Simply put a stock market that simply can’t later be timed. However the market which trends up as well as down can be.

History indicates us the monetary stock market is generally trends. You will go back hundreds of years. You’ll look at the stock markets, commodity markets, Dutch Tulips, you name, & they’re most often in trends that do not trends.

History also shows us that trends might last much longer that anybody expects.

For example, after a huge upward trend during most of 1990s, U.S. stock markets have been in a downward trend (bear market) since 2000 to early 2003. Any chart will easily show you the trends.

For the next several years, in 2007, monetary stock market was in a strong uptrend. And then we suffered an additional declining trend, but members of the Swing Timing Alert make profits, instead of obtain fifty% losses that almost all traders have suffered.

Later a bull market in the 2009, the stock market has now taken sharp decline corrective remains near its low.

Over all, financial markets are in specified trends regarding 80% of time. This was the case for many years.

Sideways Stock market Are In fact excellent news

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However what are these sideways occasions? The period that test our patience & our willpower?

The good news is that sideways stock market is always either the base or the top of the fresh trend. Which means the subsequent trend is across the corner when we are lasting sideways markets. We simply own to create certain we are on the board & profiting during it occurs.

This is where buying and sell investing arrives in. We generally determine the set of regulations which may determine when a trend has started. If trend won’t leave us. Even if this remains, we stay at the trend, regardless of how long it ends! Month or maybe years. Sticking on to the trend losses, as per our predefined rules, we quit.

Cut your losses short & let your winners run. Ever listen that saying?

Think about the ability of this type of trading approach is. You not at all fail to take a trend whether up or down. A high as well as less, you’ll get Whipsaw quick as market turns into unstable & lies trends take place in the stock market to merge and define how the subsequent trend can go.

If we discover a Whipsaw, the outcome will be a slight loss or benefit since our little regulations of money management, created in the system doesn’t allow fails to develop. But that is just the Whipsaw precursor to a upper trend. In actual fact, they may be regarded an interesting instance, because we know they are only planning our subsequent big trend & benefit.

80/20 Law

Have you ever hear of the 80/20 law, as well identified as Pareto Strategy? Dr. Joseph Juran invented the Pareto Principle, later learning the work of the Wilfredo Pareto, and financial expert of the 19th century.

The Pareto principle tells that a small amount of your work (usually approximately twenty percent) might develop a overwhelming bulk of consequences (in general about eighty percent).

Expanding Pareto to trading, it follows that just about eighty% of the gains should take place from only twenty% of the trades.

Which implies they likely might be numerous tiny trades that gain minute, however just twenty% of trades you will made about all the gains.

Consider how significant that generates every buy and sell!

After a little loss it is human to feel like giving up. It’s the sentimental battle that market traders have to succeed!

Markets are driven by emotions (concern and greed). But investors usually utilize the changes resulted by these emotions, to make their profits.

If you give into these feelings, you could lose!

Now at Swing Timing Alert, we always discover the latest trend with profits is close.

Members turn into nervous. Economic reports will become overly positive or negative. The number of reasons why the stock market can’t go higher (or lower) increase.

Soon after is when the big trade takes place, and we execute our large returns for the year.

It happened in the year 2008 when everybody was bearish, but our purchase signals in that month place us with fine more than eighty% returns.

At the end of the day

We are now in center of the corrective decline that lots of forecasters were calling the start of a latest bear market. One stock market letter is seeking the Dow at the sub 1000 level.

We have not still observed facts of such long term decline and have recently entered bullish positions in our aggressive approaches. Those bullish positions begin to unwind this week as stock market are strike ferocious selling, even after buying quite similar days last week.

The jury stays out. There is as yet no concluding answer. But understanding that you may be on proper side of every trend means you will be in the subsequent rally or bull market; or out of next steep decline or bear market.

These are a lot more than comforting thoughts. They’re important to beneficial strategies in difficult times.

You can’t expect to make profits on your investment without using a tried & tested system! Here’s the Stock Market Timing system which works effectively even in a crisis situation. Subscribe to Swing Timing Alert & learn the most effective stock market timing system for trading the Stocks.

Posted by Judy Romero in Investing, Investment, Stock, Stock Market
Swing Trading Software

Swing Trading Software

Swing trading is a trading methodology using technical investigation in order to establish the predictable trading trend of a particular stock.  Profit is earned by buying the stock at the low end and then selling it at the high end of expected trend.  It is termed by others as channel trading or channeling and is best described by its famous short period of trading policies.  Swing traders seldom hold on a position longer than five days.  Most often they get employed and dismissed by a company on the same day.  Swing trading is suitable to experienced individual shareholders and day to day dealers.

Swing trading happens very fast, as prices of stocks may rise within minutes.  The time frame is very short for swing traders.  They quickly identify a trend that has a tendency to have an extensive rise in stock volume.  When the stock value reaches its peak then the swing trader quickly sells these stocks as fast as possible.  This can only happen if the overall market of stocks has no specific prejudice.  In other words, the market in general does not head in one particular direction.  If it does, then it is very hard to recognize trending stocks because most of the stock prices just follow the market drift.

Trade Software

Swing trading software is now available to help investors and day traders in determining which stocks to buy and then when to sell these stocks.  It is also known as Day trading software and is a great help in computing and predicting suitable stocks that will yield profit when bought during its decline in price and then subsequently sold during the rise in its price.  Users of this kind of software will find it easy to swing trade stock for the reason that the software will do all the necessary computation within minutes compared to manual computing that takes hours long.

Swing trading software is currently being used by experienced and newbie investors alike.  To be able to maximize the utilization of this kind of software, the user must be able to understand the different stages of stocks in a stock market.  The first stage is called flat trading.  In this particular period, the stock has recovered from a downward trend but is not yet ready to rise up yet.  During this stage, the investors find the base of the stock.  The second stage is called the upward swing.  This is the tricky stage where the price of stocks constantly fluctuates.  If the price goes up, then it goes to the third stage called resistance.  In this period, the price of the stocks reaches its peak.  After reaching the peak, the prices of the stocks will go downward again.  This is the fourth stage commonly termed as downward movement.  Once the newbie swing trader understands these stages, then he or she is ready to gain experience in swing trading.

Since the function of swing trading software is to identify the best trend of a particular stock and computer whether or not to swing trade that particular stock or not it is very similar to stock trading software.  The difference is that in stock trading software any kind of stock, whether the stock will yield profit or not, can be processed.  Swing trading software on the other hand is concerned with only fluctuating prices of stocks that have a low end trend first but will eventually pick up a high trend after a few hours or a couple of days at most.

Most swing trading software available in the market today offer real time results.  This is an important feature for the simple reason that swing trading is mainly based on a spike in the price trend of a particular stock.  The user of the software must be alerted during the time the rise in the prices happen for the software to be considered as a real-time application.  Once the software alerts the user, the latter can now make the suitable decisions based on the data and information that the software has gathered together with the latest news and events that are currently happening in the prices of the stock to be swing traded.

Also similar to swing trading software is the option trading software.  The former is used as an independent program or application from Microsoft Excel.  It has been programmed using a different programming language by its developers.  Most swing trading software boasts of its user-friendly interfaces and easy to understand instructions and step by step guides in the world of swing trading.  Option trading software, on the other hand, is a stock trading option application or program that is used with Microsoft Excel.  Most kinds of option trading software use Black-Scholes option price model in order to imitate and evaluate different stock option trading stratagems. It is primarily used by experienced and veteran swing traders as it is not as user-friendly as most swing trading software.

Investors and day traders engaged in swing trading stock buys low priced stocks that have a potential trend to have high prices in just a short span of time.  They make use of expected market buy and sell algorithms or a scientifically calculable set of trade rules that can predict the future of stocks in the market.  As of the year 2000, many banking firms invest time and money in researching these algorithms in order to further expound the theories behind it.  These investments and research led to the further development of the swing trading system.  This system is now widely used in stock markets all over the world in analyzing the rate of growth of a particular stock in a short period of time.

Today, Forex markets are one of the largest buy and sell markets available in the world and also one of the most accurate.  The different rises in international commodities like oil and natural disasters like hurricanes and earthquakes can send the Forex market into a downfall or steep climb.  Forex Swing Trading is the application of swing trading into the Forex market by taking advantage of the surges in international commodities, the different financial status of multi-million companies together with calamities and disasters that strike the heart of these companies that may give a rise or fall to their stocks.

Veteran investors and experienced traders take advantage of option trading software together with swing trading strategies and other swing trading applications in order to make huge amounts of profit.  Together with the latest news regarding stock market prices usually coupled with a good hunch, these people have matured into making instant decisions about buying and selling of stocks.  By employing a good swing trading strategy, they find out what particular type of stock to buy at a particular time and when the price this type of stock will skyrocket.  When the prices are at its peak, they will now sell these stocks in order to garner profit.

The most fundamental swing trading approach includes extensive preparation for the upcoming trading week.  Most veteran investors prepare during the weekends in order to be ready for the opening of the stock market on the first working day of the week, usually Monday.  They spend this time gathering the necessary data and information coupled with the necessary computations and predictions of the stocks that can be potentially swing traded.  Swing trading software, option trading software and forex trading software are a great help in gathering accurate computations and predictions.  You will necessarily find this kind of software in the possession and use of experienced swing traders.

Although swing trading is a famous way of making profit thru buying and selling of stocks, it is accompanied with huge risks.  There are times when the prediction using scientifically based computations will not follow these computations.  This is a big risk that swing traders undertake whenever they buy stocks.  However, by using swing trading software, option trading software and forex trading software, the risks involved are greatly reduced.  Just make it a point to buy the software with the most accurate computations and predictions in order to have more precise data or information in choosing what type of stock to trade at a particular span of time.

To find the right swing trading software, the application must have numerous features that will help the swing trader in gathering the right information and computations in order to justify their predictions.  Since a swing trader cannot be present at the stock exchange 24 hours a day, the swing trading software must offer live updates regarding the latest in stock trends.  This should compose of stocks that have a huge potential in rise coupled with an accurate prediction of the trend of the stock.  Also, the swing trading software must also have compatibility with different mobile form platforms.  Given that a swing trader cannot be in front of his or her computer everyday, whenever there are updates in the stock market, an alert in the for of a text message must be sent to the swing trader in order to for him or her to initiate the proper action.  The swing trader must also have access to the software thru his or her mobile phone in order to engage in trading the stocks even when not in front of a personal computer terminal.

Posted by Judy Romero in Investing, Stock, Stock Market, Trading