Current stock market behavior – best opportunity to learn

Since last couple of months, the Wall Street has been behaving more weirdly. But on the other hand, it has given a very good opportunity for newbie stock traders and stock investors to learn more about how the stock market works.

The stock market has shown
• How wildly it can behave
• How the negative sentiment can affect the investor’s pocket
• How the traders can easily burn their hands if they do not put perfect stock market management strategy in place.
• How the maximum of the bull market strategies does not work in bear market
• How losing of money is more easy then making it
• How drastically the positive things can turn into negative
• How non-fundamental stock tends to fall heavily

The stock market is showing its ugly face. This is a tough market and making money in this tough market is even tougher. But one who is able to live with this and can implement proper and perfect strategy can still make money.

You have to assume that stock market will never work according to what you think and it will never allow you to make money. But it is your skill and knowledge that you need to use to pull out the money from the stock market.

The stock trader should know how the significant dip in stock market is an opportunity to enter and how any significant rise is an opportunity to exit.

The investors should need to examine the highly defensive stock and to remain invested in such a stock that has very good fundamentals and has very good growth prospectus ahead.

Hard decision, high risk taking ability, patience and cool mind are supportive tools that help to implement this in more perfect way to make money in stock market.

Wall Street Finished Higher After Early Losses

Wall Street saw a dramatic stock trading day on Wednesday, just the opposite that happened Tuesday. Strong recovery was seen in major indices in later session of market after a sharp fall in the stock market opening session.

A good pullback in hard-hit stocks of financial companies helped fuel the session's turnaround, while an upbeat forecast from Hewlett Packard Co. pulled technology issues higher and record prices for oil gave a boost to energy stocks.

It is quite hard for analysis to believe the worst is over for Wall Street, but looking at present scenarios it seems like Wall Street is going through consolidation phase. Consolidation phase is normally a narrow range where market tries to make a base. It happens normally after steep fall or sharp rise in the stock market.

At this point of time I feel the market will remain in narrow range. I don’t see sharp fall or sharp rise in near term. However good buy opportunity is seen in many stocks.

The Dow Jones industrial average rose 90.04, or 0.73%, to 12,427.26 after at one point being down nearly 110 points. Broader stock indicators also moved higher. The Standard & Poor's 500 index advanced 11.25, or 0.83%, to 1,360.03, and the Nasdaq composite index rose 20.90, or 0.91%, to 2,327.10.

Wall Street end Mixed Amid Inflation Fears

February 20, 2008

The major indices on Wall Street opened sharply higher on Tuesday and gave up a big early advance and closed mixed with modest losses due to weakness in financials and tech. Stock investors were concerned after the oil prices closed above $100 for the first time and put fuel on fears that inflation will baffle on already troubled economy. The rising inflation fear might make the Fed think again its preconception in the direction of lowering interest rates to help the troubled economy.

The market mood seems more cautious at this point of time. Investors are positioning themselves ahead of important economic reports that could give the stock market further direction. The most important economic data will be Wednesday's Labor Department report on consumer prices for January.

The hardly hit sector on Tuesday was Financial. As it is know that banks are facing more financial problems this year that dragged the sector sharply lower. There are reports that Lehman Brothers may face its rockiest quarter since the mortgage crisis began, noting it may face $1.3 billion in additional write-downs. Additional to this, the selling pressure came from the news that Credit Suisse had overvalued assets by about $2.85 billion, with the company blaming a small number of traders for the write-down.

The Dow Jones industrial average fell 10.99, or 0.09%, to 12,337.22 after being up more than 150 points earlier in the day stock trading session. The Standard & Poor's 500 index fell 1.21, or 0.09%, to 1,348.78; and the Nasdaq composite fell 15.60, or 0.67% to 2,306.20.

Service Sector Weakness plunges the Wall Street stocks

February 06, 2008

Wall Street saw another stock trading day of disaster as report came unexpected tightening in the service sector as confirmation the US economy is dipping into recession.

Heavy sell off seen at Wall Street plunged the Dow Jones industrials down 370 points. It was the Dow's biggest percentage drop in almost a year. The report from the Institute for Supply Management washed out the emerging hopefulness about the economy that had sent stocks surging higher last week.

The ongoing disaster at stock market is not stopping. Any news coming from the finance or economy side is not giving a sense of relief to investors to makeup their mind to take further positive positions in stock market.

At current situation according to me, the retail investors should stay away from online stock trading until a clear picture arises where the US economy is headed. However reports of weak service sector and decline in U.S. jobs suggest the economy is on a way to recession.

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

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.

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.

Volatility–a playing game in stock market

There are certain stock investor communities in stock market who feel volatility plays an important role in their profit margin in-fact they like to do stock trading whenever there is significant amount of volatilities in stock market. According to them volatile stock often gives them an advantage to make their stock trading successful. Any significant upward rise in stock which is volatile gives a sell signals while any significant dip gives a buy signal.

Volatility is a significant fluctuation in prices of stocks or swings in stock market. Any significant increase in volatility in stock market concerns a lot of stock investor as it does not gives any perfect direction to stock market but for genuine stock traders it is a positive signal to make money if there is good kind of volatilities in their selected best stocks.

There are many different views on volatility but according to me it gives a good chance for stock trader to become active and make their successful stock trading. Volatile stock shows significant movement in their prices which give chance for stock traders to enter in that stock and exit by making profit. It is a riskier job but for trader it is their daily business part. They know the exact entry point and exact exist point in these type of stocks.

If one has to become expert in trading volatile stock they need to have significant knowledge of stock market as well as has to know how the movements of stock happens and this only can be achieved by consistent monitoring the stock price movement on daily basis. One can use Newton law’s rule while stock trading on stocks which are volatile. According to Newton law’s every action has equal and opposite direction and same law applied to volatile stock also. Every significant upward action in volatile stock should need to have download reaction and every significant downward action in stock should need to have upward reaction.

Any view expressed in this website is solely of author’s personal view. Before stock investing or stock trading you should need to take advice of your stock market advisor.

Stock investor information

There are separate categories to define in stock trading - stocks investor and stock trader.

1. The first being long term stock investor. They normally buy and hold a stock position for couple of years to almost endless period. They may do some research on a stock before buying, maybe checking out some of the fundamentals such as the PE. ratio (price to earnings), valuations, dividend paid, market capital, or market analysts recommendation but to be a successful stock investor in stock market one much have a good fundamental and technical knowledge by which he can determine at which level which stock to buy and at which level to sell by making good profit.

The fundamental analysis knowledge means that the stock investor should have to know about the valuation of any particular stock, PE ratio, market capitalization, product, % of market that particular company hold etc. Fundamentalists study the cause, while technicians study the effect. "Price" is the final result of all forces that can affect a stock. Price even discounts the future, unknown news, while fundamentals reflect the past. It is because of this reality, we often see tops being made on good news and bottoms being made on bad news.

2. The second category consists of "stock traders." They hold a stock position for a few days or weeks or a month at the most. This group tends to treat the market as a business. They are not interested in fundamentals like the stock investor category. They are more interested in a stocks price movement, which they can determine by technique chart. When the people of this category make a stock purchase they know exactly where the exit points are. Their profit and loss points are predetermined. This group is guided by a set of predetermined rules, when a rule is met a reaction takes place either buying or selling.

Technical Analysis is basically the study of Price Chart, undertaken to get an idea about future price action of any traded stock. A Price Chart plots the quotes of a stock traded on a stock market. All past\present\future news relating to a stock, together with stock investors' opinion about it, determines the price of the stock on the trading floor. The "Value" discounts everything; therefore study of anything else is unnecessary. Technical Analysis comprise of a variety of techniques to study such price action over a period, by which stock trader can make a good decision at which price the shock has to buy and at which price it has to be sold. If stock trader is perfect in these things then that stock trader can make decent money in stock market.

How Technical Analysis helps stock investors and stock traders?
With the help of Technical Analysis, the stock investors and stock traders can enter the stock (long or short) when it starts trending, instead of locking their money during the periods of consolidation. Traders may look for such trending moves in daily (or shorter) charts, while the investors may look for such trending moves in weekly/monthly charts. Volatile market trading strategies are appropriate when the trader believes the market will move but does not have an opinion on the direction of movement of the market. As long as there is significant movement upwards or downwards, these strategies offer profit opportunities. A trader need not be bullish or bearish. He must simply be of the opinion that the market is volatile.

3. The third category consists of day traders. This category has all the characteristics of the 2nd group except they leave nothing to chance. All positions are closed before the end of the day, buying and selling without hesitation, according to their guidelines, strictly 100% business.

Lackluster stock trading day

Friday October 26, 2007

Wall Street saw a lackluster stock trading day on Thursday mostly dogged by credit and economic worries along with steady rise in crude oil prices. Over the last few days the oil prices are steadily rising high; giving a bit of concerns to stock investors; that might give rise to inflation and which might impact the economy a whole, however housing and credit data is now an ongoing concerns which is making the stock market to trade in a narrow zone. Investors are still confused about the definite direction of economy and whether the Fed will be forced to lower interest rates again to boost spending. The Fed cut interest rates last month by a 0.5% basis and now market is expect not the same amount of cut in interest but at least 0.25%, which will be somewhat positive news for the market, but still going forward the market will be having a tough days to gain momentum unless clear and good picture arise from housing and credit data front.

EMC - A data storage software and hardware company showed impressive result, which the market showed a thumbs-up and that stock was up 8.7% gained almost $1.97 to $24.40; however after a disappointing guidance from Symantec company the stock tumbled $2.52 and ended at $18.50.

The Dow Jones fell 0.02% or 3.33 to 13,671.92 after a strong volatile session. The blue chip index was temporarily down more than 100 points.

According to me if there is any interest rate cut by Fed next week, the stock investor definitely will take this as a positive note and maybe the market will rise higher, but still in coming days I don’t see the market will make any new highs unless clear pictures arise from the housing and credit data.

At this point from stock trading point of view, my strategy will be to take a short term trading position by buying in selective stock and at every significant high I would like to book my profit, and any significant deep of 500 to 600 points in the Dow Jones, I would like to do selective stock investing.

Stock Investing

Stock investing is an investment done in small, medium or big companies on short term, mid-term and long term basis for the companies which are listed on Stock Exchanges of each country. The main stock exchanges of the world are where large numbers of companies are listed and where big amount of buying and selling of stocks happens and they are DOW, S&P500, FTSE, DAX, Nikkei, MSCI, etc.

One has to be aware that investing in the stock market can be sometime or many a time loss making if not done in proper way but to discount loss making and to make a consistent profit from your online stock investing, one has to acquire good fundamental and technical knowledge of stock market. It is having said that investing in stock is an art of tactic by which one can make a consistent amount of profit and can make their good livings on it. One has to understand that investing in stock market is a part of nervousness and one has to pass through many ups and down to make oneself perfect in stock market.

Investing in stock is a pure business which one has to take a rational risk to gather steady rewards. With enough fundamental and technical knowledge and an adequate amount of discipline, you are all but definite to make a consistent profit in the stock market. Patience and willingness to intersperse your hard money savings across a portfolio of stocks, personalized to suit your age and risk profile will force your revenues at the same time cautions you against any major losses. Investing in a stock market is a method of buying assets in order to make money in the form of reasonably predictable income (dividends, interest, or rentals) and appreciation over the long term.

Why one should do stock investing?
Couple of decades back investing in the stock market for ordinary peoples was not so easy and safe and so utmost of peoples used to prefer to make their savings safe in bank and were satisfied with just very small interest that they used to get on their savings, but with the discovery of internet and advancement of technology the mentality of peoples has changed and instead of keeping their money safe in bank they are now willing to take little and some more risk to shoot up their earnings and to protect them against rising inflation and also with the intention to create wealth for better standard of living, vacations, retirement, etc. Also, it's exhilarating to appraise your stock investing returns and to see how they are accumulating at a faster rate than your salary.

When one should start stock investing?
If looking from stock market perspective you will never be able to catch any specific best time for making trade or stock investing as every day is a new day for stock market with tremendous changes in stock market mood. When entering in the stock market one has to keep a better view in his mind about the time horizon that he is looking for returns from his stock investment. Long term investor can enter the market anytime no matter market is going down or going up, medium and short term investors whom we can also calls as traders enters in the market with full study and risk that they are willing to adopt.

Rewards From Stock Investing

Stock investing basics

Stock investing tips

Learn Free Stock Investing and Stock Trading

Quarterly result - Important thing to know while doing any investment in stock

Mid Term Stock Investing

Fundamental Analysis for stock investing

Long Term Stock Investing

Stock portfolio

Stock portfolio is a very strong professional stock trading tool if managed in proper and effective way gives you high and high returns in stock market by any other mean is not that quite possible. Stock portfolio provides you an additional security and decreases your risk appetite in significant way in stock market.

Stock portfolio is a mixture of any number of stocks mostly preferable for small stock market investor or stock market trader is 10 to 15 numbers. Stock market traders prefer to have 10 to 15 numbers of best stock collections in their favorite stock portfolio which helps them to execute stock trading almost on daily basis. It always does not happened that day traders are able to conduct their day trading in only one specific stock on daily basis because they know that only one stock cannot give them a perfect entry point on daily basis to conduct day trading so to overcome this issues they prefers to have 10 to 15 stocks or more which helps them to give chance to enter in any 2-3 stocks for day trading on daily basis.

Professional stock market investors also prefer to maintain 5 to 10 numbers or a bit more of best stocks in their stock portfolio. By investing money not only in one stock but diverting the money in mixture of stock gives them an additional security and reduces their risk appetite. The stock portfolio consists of mixture of stocks such as large cap, mid cap, highly volatile stock, highly defensive stock, highly liquid stock, very less affected by external factor stock, etc. The stock investor prefers to maintain portfolio as per their investment horizon and amount of money they want to invest in their best stocks.

Now you might be thinking about how the stock portfolio will give high return and will reduce risk?
As it is know the stock trading or stock investing is a risky factor to make money. No doubt that if your stock pick selection is perfect from all angle chances are evergreen that you will make handsome of money, but still it is having said that there is still risk associated in it, because the external factors which might impact your stock pick is not in your hand and nor you can imagine it, which might cause the stock dump.
The external factors might consist of
• interest rate.
• crude oil dependence
• government policies
• natural disaster, and many more
which might negatively influence the specific stock pick you are holding, so to overcome this issue you need to make stock trading or stock investing in more than 2 to 3 stocks of different categories as mentioned above which will help you to trim down your risk associated only in one stock.

The stock portfolio is only established after a strong stock research which you want to include in your portfolio. Stock research includes the fundamental as well as technical study which gives a correct view about the overall performance of your favorite stock pick. The some of the categories in stock portfolio but not limited to are:

Large Caps
• Large cap stocks are stock with market capitalization of more than $5 billion such as IBM, Microsoft, Wal-Mart, etc
• You need to keep these types of stock in your stock portfolio because these stocks are consistently out performer in their whole history and will remain out performer in future also
• This stock has a deep market penetration, endurance and solid business management background and has a capacity to cope with any unsuitable condition.
• These stocks make consistent good innovative changes in their product which gives you an assurance and faith that you money is always safe and will give you high returns.

Mid Caps
Mid cap stocks are stock with market capitalization between $1 billion to $5 billion.
• There is slight risk as compared to large caps in doing stock trading or stock investment in these stocks because mid caps stocks does not always give that much of consistent performance as compared to large caps.
• Also there is lot of competition in mid cap companies which might impact their profit margin in significant way along with inconsistent market base
• But still if your have done strong stock research and have pick out a good mid cap stock which might sustain at any unsuitable condition and has a capacity to become a large caps in coming years then you have a very good potential to make good money in coming days.
• The advantage of investing your money in mid cap is that the mid cap stocks has a big room to become a large caps which will increase it market capitalization giving you high stock price return along with other benefits.

Small Caps
Small cap stocks are highly risky stocks and are also called as penny stocks.
• There is sudden inflow and sudden outflow of funds from these stocks which makes these stocks more vulnerable.
• If at any point any uncertain situation arise in the stock market, these small caps penny stocks are the first which are hammered significantly, but also if there is any strong rally in stock market, these stocks have a big potential to go high giving you high returns.

So to increase your efficiency and to maintain consistent profit from stock market you need to be more specific in selecting your stock portfolio. Consuming mixture of stock pick of different categories and of different business aspect will end up giving you consistent money at low risk.