Wall Street Showed Resilience

January 1, 2008

Wall Street ended in mixed and showed resilience in a year of economic turmoil.

After a year of high up and down swings, the Wall Street managed to finish 2007 with a modest gain regardless of crises in credit and housing market and concerns about an economy possibly headed for recession. Probably it was a mixed year of bull and bear and many analyses predict that the same will continue in year 2008 also.

The US stock market started 2007 with a short-lived rally and plunged in late February, with the Dow cracking almost 416 points in one day as concerns about subprime mortgages swept through the market, but within weeks, the stock investor were optimism about a strong global economy and solid domestic employment began pushing the stock price higher and on May 30, the S&P 500 hit an all-time high, surpassing its record reached at the end of the tech bubble seven years earlier, but all that distorted almost overnight in mid-summer with the subprime concern morphing into a credit freeze..

Financial stocks took a hard hit as their earnings outlook fogged up as well as shares of automakers, consumer goods that produce household goods, textiles, etc were also beaten down as stock market investors doubted the aptitude of consumers, who fuel two-thirds of the economy, to keep spending.

Even though the stock market gain was skimpy at best. Most of the analysts and stock traders noted that initial public offering activity was high, share buybacks were at record highs and investors in certain sectors were handsomely rewarded.

At the end of the year, the Dow Jones industrial average was up 13,264.82, up 6.4% for the year. The broader Standard & Poor's 500-stock index closed at 1468.36, up 3.5 % for the year.

According to me for stock investing I will look for sectors such as energy and healthcare and specific stock pick from power sector, internet companies and might take some risk in financial related stocks also, however for stock trading there are lot of stocks hanging around which could be good bet on a short term basis.

Worse than expected sales of new homes

December 30

The housing market had been showing signs of slowdown since last 12 months but it has been significantly plunged deeper into last month, with sales of new homes plunging to their lowest level.

The slowdown in housing market has worsened in November even more than most analysts expected, intensifying uncertainties that the US economy may be propel into a recession.

Housing market had been a worse performer in year 2006-2007 following a significant five years rally of record-breaking movement from 2001 through 2005. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners. New-home sales tumbled 9% in the month of November from October to a seasonally adjusted annual sales pace of 647,000 as per the Commerce Department reported Friday. That was the worst sales pace since April 1995.

According to many economists the worse performance of housing market will still continue in the coming year of 2008 and probably will keep rising. The crises in housing and mortgage market meltdown have lifted the probability that the country will fall into a recession.

Wall Street ended with an unpredictable week hardly mixed Friday after a government report of a sharp decline in new home sales stimulated fear that weakness in housing will keep on to afflict the economy. The major indexes lost ground for the week. The Dow Jones industrials, following an unpredictable session, managed to grasp out a small gain even as the bleak home sales report fueled to some stock market investors' angst. The Dow closed marginally up 6.26 points at 13,365.87.

Regardless of months of volatile stock trading sessions that has seen stocks surge and then relapse, the major indexes are going into the final trading session of 2007 with decent gains: The Dow is up 902.72, or 7.24%, while the S&P 500 is up 60.19, or 4.24 % and the Nasdaq is up 259.17, or 10.73%.

Worst development of housing and credit market had increase the concern of stock market investor as many believes 2008 will be tough year for stock market.

Online stock trading do’s and don’t do

Stock trading is generally complicated process and there are various factors which one has to learn before trading stock. There are lot of Do’s and Don’t do that needs to be aggressively methodized to make consistent profit from stock trading.

Do’s

• If you have good knowledge of stock market, stock behaviors, stock monitoring, technical analysis skills, fundamental analysis skills then only you go for online stock trading.
• If you are high risk taker person and if losing some money in stock trading does not affect your money management then only you elect to do online stock trading
• If you are a person who believes in patience with tremendous cool mind and does not gets frustrated at any unsuitable situation
• You should be able to gather the skill of studying other peoples mind… means what other stock traders or stock investor will do if certain stock is showing significant activities.
• You should be able to immediately develop to change your stock trading strategy accordingly if any unfavorable situation arises at any point.
• If you are person who can easily detect to ignore stock which will not give you profit.
• You should need to have sharp thinking and able to immediately detect the mistake you have done and keep remembering those mistakes whenever the same situation arise again and keep on studying various strategies which will work good for you.


Don’t do
• If you are novice to stocktrading, then don’t start online stock trading immediately but invest your time in gathering information and paperwork experience and then starting with very little budget.
• If you are person who don’t have cool mind and gets upset suddenly and also has characteristic of sudden fear in mind then this stock market trading business is not for you.
• The peoples who are not able to learn from their mistake and keep loosing their money and does not change their trading strategy accordingly the need arise.
• Don’t have sharp mind and does not takes immediate decision if any unsuitable condition appears.
• If you are not hard working person and does not keep updating with new strategy

Penny stock trader

Penny stock trader are traders who basically looks for trading stock which stock prices level are below $5. Owing to extremely low prices, these penny stocks become a point of attraction for maximum of the small, novice as well as retail individual online stock trader.

It is having said that penny stocks are highly risky for online stock trading but still maximum of the peoples tries to do it or falls in love or avoid without trading it and suffers heavy losses, but on the contrary it is also having said that expert penny stock trader who are really extraordinary makes lot of bucks through it, because they are different from losers, they acquire extraordinary talent, knowledge and skill which helps them to be winner in penny stock trading.

The some of the quality that penny stock traders have are listed below but not limited to following

• Trading penny stock has not more to do with fundamental analysis but needs to do lot with technical analysis so successful online penny stock traders attentively look after charts and protect some hours for market analysis. They identify the strongest sectors of the market and then the strongest stocks in those sectors. They identify the level through chart that they are going to enter at and approximate targets for the predictable move.

• Successful penny stock trader does not overtrade but only waits and watch for exact and accurate entry point and predetermines their target for exit.

• They know if the overall market is in trending zone or in trading zone and depending upon this they determines their timeframe for stock trading, whether they need to exit taking small profit or need to wait for large move. They know if the stock is in trending zone then they keeps their stock position long and as soon as they find the stock is loosing their support level they exist the stock. They also know if the stock is in trading zone then they buys such stocks at every weakness and sells stocks at strength.

• While trading penny stock they knows the risk they are taking and predetermines their trading losses and keeps strict stop losses to avoid big losses.

• Penny stock trader know penny stocks are not for stock investing and so they does not remain invested in such stock for long period but they exist as soon as they find their profit margin has achieved.

Wall Street Sink after Fed’s Meeting

December 12, 2007

On Tuesday Wall Street sink more than 300 points after the Fed decide to cut its benchmark interest rate by 0.25%, unsatisfied some stock investors who expect the central bank would take more belligerent actions.

After the flat opening on Dow Jones and remained quite for most of the trading session before the Fed interest rate cut decision, fell 300 points. Most of the stock market investors were anticipating at least there could be 0.50% basis cut in interest but with the 0.25% interest cut by the Fed leads the stock investors for profit booking and this made the Dow Jones to plunge more than 300 points, although Fed as expected also cut the discount rate, the rate it charges to lend directly to banks, by a quarter-point to 4.75 percent.

It is also having said that Fed signaled that further cuts are quite possible if a severe downturn in housing and crisis in mortgage lending worsen. Before the Fed decision the market was in descent mode and made and strong bounce-back after strongly tumbling below to 13K mark on Dow Jones.

The Dow fell 294.26, or 2.14 %, to 13,432.77 after dropping as much as 313.29. Strong fall was also seen on broader indexes. The Standard & Poor's 500 index fell 38.31, or 2.53%, to 1,477.65, and the Nasdaq composite index fell 66.60, or 2.45%, to 2,652.35.

Rise on Wall Street ahead of Fed’s meeting

December 11, 2007

Strong rally was seen on Dow Jones and NASDAQ on Monday with an expectation of interest rate cut by Federal Reserve in coming meeting.

Investors hang about ahead of the Federal Reserve decision on interest rate cut on Tuesday, but majority of policymakers are still split over whether there will be a 0.25 basis or 0.50 basis cut. The National Association of Realtors bestows stock investors about their forward-looking index of U.S. home sales rose in October for the second month in a line, but still investors expect the housing market to remain weak well into 2008, the association is forecasting sales and prices to start recovering modestly next year.

According to UBS the financial stocks have already discounted the worst case scenario and may be a good stock investing opportunity on a longer term.

As compared to last month which was worse volatile month for Wall Street, this month the Wall Street has showed excellent performance as investors gained more confident in the Fed's directness to loosening its policy again. The Dow Jones has rose more than 740 points over the last two weeks, a rally that has brought the blue-chip index to about 3% below the record close it reached Oct 9.

On Monday The Dow Jones closed at 101.45 points higher, or 0.74% to 13,727.03. The Standard & Poor's 500 index rose 11.30, or 0.75% to 1,515.96. The Nasdaq composite index rose 12.79, or 0.47%, to 2,718.95.

Myths of Stock Market

Many peoples who are unknown to stock market believe that stock market is a gambling place and there is always a high risk of losing money, and real fact is “yes” and also “no”. “Yes” because investing in stock or stock investing is like putting your hard money in a mysterious thing where returns are not known, and “no” because if you have stock market knowledge and knows the basic thing how to detect perfect stock then chance of never ending up in losing money is very much possible infact it will take you towards the wealth and end up you in high returns.

There are lots of people who have lost considerable amount of their hard earned money in stock market and also there are lots of peoples who have created wealth through stock market, so it definitely gives you a difference! Why some people are loosing money and how some people are making money?

The above picture clearly tells you that there is considerable amount of risk of losing money and also there is considerable amount of winning money in stock market, and to be on winner side you definitely need to put efforts and hard work and to gain stock market knowledge.

It is having said that since the invention of internet and its advance technology, the average person's interest in online stock trading has grown substantially. What was once a model of only rich people has now turned into the favorite destination of an ordinary individual for growing wealth. The advance technology of internet has now opened a door for ordinary individual to do online stock trading and so that nowadays nearly anybody can own stocks.

Online stock trading practice

Online stock trading practice is a must for a novice stock trader. “Practice makes the man perfect.” Stock trading is very tricky and complicated task and to execute this task successfully you need to practice yourself before trading in stock market.

Putting all your money in stock market is not vice at initial stage without acquiring considerable amount of knowledge and knowledge does not come only with theory but it comes with lot of practice, and for practice you need to have a platform which will help you to understand real aspect of stock market. Online stock trading consists of complicated process and to get aware with these complicated processes you need to practice.

Wall Street Survivor has launched a product where novice as well as trained stock trader and stock investor can participate in stock market without investing a dime. Wall Street Survivor will provide $100,000 virtual money (not real money) to novice as well as trained stock trader who want to participate in stock market. With the help of this platform novice as well as trained stock trader can learn and can practice more as much as they want to become skilled and knowledgeable with live stock market and can also compete with other stock trader for daily, weekly and monthly prizes worth of nearly $25,000.

Vivendi in plan to acquire major Activision Inc. stake

Vivendi the Game Makers is in plans to obtain a controlling stake in Activision Inc. and unite the company with Vivendi Games in a contract that would form a competitor to Electronic Arts Inc. as the world's largest video game publisher.

After the acquisition of Activision Ind the Vivendi Games will hold 52% stake in a new company to be called Activision Blizzard. On that basis, Activision and Vivendi valued the combined company at $18.9 billion.

After the transaction closes, expected in the first half of 2008, Activision Blizzard will launch a $4 billion all-cash tender offer to purchase up to 146.5 million Activision Blizzard common shares at $27.50 each. Vivendi also has agreed to acquire an additional $700 million of newly issued Activision shares, giving Vivendi about a 68 percent stake in Activision Blizzard if the tender offer is fully subscribed.

The combined company is targeting pro forma operating income of $1.1 billion and pro forma earnings per share of more than $1.20 in calendar year 2009. The acquisition will make available Activision Blizzard with the most consolidate and broadest collection of interactive entertainment assets in the industry.

Activision Blizzard will continue to operate as a public company traded on the Nasdaq Stock Market under the ticker ATVI.

The offer price is a 24 percent premium to Activision's closing price Friday of $22.15 per share.

According to me from mid term to long term stock investing point of view Activision Blizzard is great stock pick and one can lookup for substantial returns from this stock going forward.

Donating stock can be better than giving cash

Charities are happy to accept it, and you can save a substantial amount in taxes.

By Kathy M. Kristof, Los Angeles Times Staff Writer

Americans make about $200 billion in tax-deductible gifts to charity each year, and most of them are in cash.

But if you have stock in your investment portfolio that has risen significantly in value since you bought it, you might be better off donating the stock instead of cash.

Doing so can boost your tax savings, allowing you to give more to charity or simply enjoy the fact that the contribution costs you less money.

Charitable groups are happy to receive stock, said Gail Berlant, director for distinguished giving at the American Cancer Society's Los Angeles office.

"This is a wonderful way to donate to charity," she said. "Any nonprofit would really appreciate stock donations."


By giving away stock, you avoid selling the shares and realizing a capital gain that you would have to pay tax on. But the government still lets you deduct the current market value of the donated stock from your taxable income. The more the shares have gone up in price, the greater the advantage in giving them compared with writing a check.

"The added tax savings from donating appreciated securities over cash can be significant," said Steve Feinschreiber, senior vice president of research for Fidelity Investments in Boston

Let's say you want to give $10,000 to charity. If you make that gift in cash, you can take a $10,000 deduction on your federal and state returns. If your top combined tax rate is 35%, that saves you $3,500 in federal and state income tax.


But let's say you happen to have 1,000 shares of XYZ stock that you bought in 1985 for $1 a share and is now worth $10 a share, or $10,000.

If you sell those shares, you'll have to pay a 15% tax on your $9,000 capital gain, setting yourself back $1,350.

If instead you give those shares to charity, you get the same $10,000 deduction for the full market value of the stock -- and the same $3,500 in tax savings that results.

But you also don't pay any capital gains tax, saving $1,350. The total tax benefit of your gift: $4,850.

And you don't have to worry about increasing the charity's tax liability, because charities are exempt from income tax.


There are some tricks to getting the best bang for your donated shares, said Philip J. Holthouse, partner at accounting firm Holthouse Carlin & Van Trigt in Santa Monica.

First, you need to donate stock that you've owned for at least a year. If you've owned the stock less than a year, you can deduct only the amount you paid for the shares, not their current market value.

In the example above, that would mean you'd get only a $1,000 deduction, making the donation of such a short-term holding a much worse deal than giving cash.

Also, in deciding which stock in your portfolio to donate, you should choose the one that has gained the most in percentage terms since you bought it.

But what if you still want that stock in your portfolio? Simply buy shares of the same stock to replace the ones you're donating, Holthouse suggested.

With charitable donations of securities, Holthouse said, there are no "wash sale" rules requiring you to wait a certain amount of time before buying the same stock that you gave away. And the brokerage commission you would pay to acquire the shares would be small compared with your tax savings.

Your portfolio will hold the same stock as before, but you'll start off with no unrealized gain on the shares.

Replacing the stock in your investment account allows you to accomplish three goals: to provide a charity with a needed gift, to reduce the capital gains accumulating in your portfolio and to continue to own a stock that you believe has the ability to appreciate further.

Source link http://www.latimes.com/business/investing/la-fi-charitytax2dec02,1,145285.story?coll=la-headlines-business-invest

kathy.kristof@latimes.com

Investment

Investments or investing is an efficient and stronger tool mostly used for prosperous future financial by an entity or a retail individual, in broader term it can be differentiated in many different ways but the end result should be to increase your asset in longer term.

For an individual the investment should be more important because this is the only credible way where an individual can make their future financial situation protected. There are many different ways where one can look to invest their money to have consistent, sustainable and convincing returns in their future life. Some of the favorite and stronger investment classes could be insurance, real estate, stocks or shares, mutual funds, gold, etc.

Investing in stock or share is said to be quite risky as compared to other investing portfolio but it is also having said that returns on stock can be many more stronger than other investment classes, however just making an stock investing could not be the answer for it but executing it wisely and intelligently only could be worth otherwise chances of investment crisis is also possible.

Real estate is also a very good destination to invest money but this class also includes risk. 2007 year was worst performer year for US real estate investor due to slowdown in housing market as well as due to credit market crisis. The mortgage and credit crisis was caused by a large number of home owners unable to pay the mortgage as their home values declined.

Maximum of the peoples choose insurance as their most favorite class to invest their money as risk appetite in this class is extremely low or negligible and returns are also clearly visible depending upon the insurance plan they choose, however return on investment in this class could not be as worth as in other classes.

Gold is also said to be the best place to invest money but maximum of the individual does not buy gold as an investment but they buy gold for showing their wealth enhancement, for prosperity and it also shows a great sign of richness.

Some Stock Investing Tips

Stock investing strategy and specific guidelines if established and maintained properly can provide you high returns in mid to long term basis. Below you will find some of the useful stock investing tips.

1. Avoid investing in low market capitalization or low price stock probably stocks price which are lower than $5. The reason behind avoiding investing in these stocks is that maximum of these stock does not have good financial earning background. As it is know than earning is one of the main factors that drive the stock price up, if any company is not making any earning then it is always good to avoid making any investment in such stocks, no matter the price of these stocks are low.

2. Make investment in stocks (companies) which you know very well and has huge customer base with good financial history and great prosperity ahead for that company. Look around and you will find great investing idea.

3. Avoid making investment in only one stock; diversification is strong mantra in stock investing. Diversify your investment in few stocks maybe at least 2 to 3 stocks rather than only in one stock depending upon your investment budget.

4. Averaging stock is good stock investing strategy; you can also call it as systemic investment plan.

5. Invest only part of your money in stock at initial stage and increase them gradually once you are comfortable and become knowledgeable how stock market works.

6. Become value investor and invest your money in stock when there is massacre going on in stock market. Many stock market investors become panic and sells their stock at any price when there is massacre going on in stock market and this is stage where value investor emerge and find out highly appreciable stocks at low price and picks up them. Buying stocks when there is massacre going on in stock market require huge guts and deep understanding of stock which you are going to hold.

7. Know the difference between stock trading and stock investing and plan out your strategy according to it.