Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: American Idols Tickets - How to Score American Idols Tickets (and How Not To!) - Where to Find American Idol Tickets to Meet Singles Free - How to Meet Singles Free

Invest Market Stock - Invest In The Market With Stock For Large Gains

stocks time lot debt

The stock market is one of the most interesting enigmas in the world. A lot of the time, the stock market will go up when it should be going down, and it will go down when it should be going up. Both of these phases relate to irrational exuberance and unnecessary panic. The most important thing to remember with the stock market is that perception is more important than reality – in the short term. Therefore, if you’re someone who wants to trade stocks, then psychology is a more important factor than the facts. This means it will be important to go with the herd, or to remember the saying that ‘the trend is your friend.’ On the other hand, if you want to invest in the market for the long term, it’s important to stick with logic. For instance, if unemployment is near 10%, debt is at its highest level in history, and there are many geopolitical issues to worry about, it might be best to play it conservative. This does not meat to avoid investing in the market with stocks. It means that it would be wise to buy and hold stocks that are not very volatile. For example, IBM and Exxon Mobil are considered safe blue chip stocks. Stocks like these might not earn 15% per year, but a steady 6% with a nice dividend can’t hurt. And in uncertain times, you won’t have to worry about losing a fortune. Most importantly, when the economy eventually turns around, optimism will be rampant. This, in turn, will drive the stock market higher. At that time, long term 6% gains will turn into long term 12% gains, dividends will increase, and more capital will be available for riskier ventures.

The stock market is in a turbulent and unpredictable time right now, but let’s assume normal stock market conditions. In these situations, there are specific things you need to look for before investing money in a stock. The first thing you need to do is go to the company’s key statistics. You will find a lot of important information here. For those who are looking for fast gains, the first thing to look at is the BETA. If that number is high – over 2.0 – then this is a volatile stock, which means it’s possible to make a lot of money in a short period of time. Of course, it’s also possible to lose a lot of money in a short period of time, so make sure you have an exit strategy. The most common and sensible exit strategy is a trailing stop. This means that when a stock goes down in price by a certain percentage, let’s say 5%, it will automatically sell – even if you’re on the beach. This is a great way to lock in gains. A 20% gain might turn into a 15% gain, but barring a gap down on devastating and shocking news, it will never be a disaster. For those looking to invest in the market with stock as a long term play, the number one thing to look at is cash vs. debt, especially in today’s world. The companies with a lot of cash on hand will be able to grow, whereas the companies with enormous piles of debt will be outshined by their competitors.

There is a nice little hidden secret about investing in the market with stock, which has to do with young companies. Keep in mind that the biggest gains in the world are made in the stock market, but only if you get in very early. Think of Microsoft before it was Microsoft, or Apple before it reinvented itself. These are two great examples of stocks that went from the ground floor to the penthouse in a very short period of time. The way to find these opportunities is to look for young companies with a ton of cash, no debt, and a lot of insider buying. Cash vs. debt is actually a play on a takeover. Young cash-rich companies are often bought. When they are, stockholders are rewarded handsomely. And heavy insider buying is an indication of confidence, but always make sure these numbers are in the millions. Now you know more about how to invest in the market with stock. Make the most of it.

Investment Interest Rates - Things You Should Know About Investment Interest Rates [next] [back] Mens Prada Shoes - Investing in Prada Shoes for Every Man - Prada Shoes for Men – Pay for Quality - Why Men Should Buy Prada Shoes

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or