Category: Stock Market

On Friday, fears of the possibility of the mounting debt crisis in Europe affecting the fragile economy and the banks in the United States ruled, as markets plunged. Although fears of a slide back by the US into recession were soothed by a government report in July on employment. The Dow Jones average also showed a rise of 171 points right after the beginning of trading. After rising early on, the Dow Jones average plummeted more than four hundred points down to 243 just prior to noon. Then it rose again by 400 points in almost one hour’s time and was up 135. The rest of the day, the index of blue chip stocks kept bouncing. At times, it varied by as high as 100 points in thirty minutes. The Dow Jones Industrial Average ended up at 61 points, or about 0.5 per cent. The bouncing was due to worries about weakening economies all over the world. The slow down is affecting even countries  [...]

Advising for the sticks and bond mix of a portfolio always sound palatable for the investor and they often fall prey by experimenting with their portfolio. I know any investors who simply avoid reading advices as they don’t want their portfolio to get harmed by changing the proportion of stock and bond. Both these expressions come from people having extreme experience in the stock market. While the former group of investors faces losses in the market, the later group is highly contented with the returns they get. Both the expressions are not good and both the groups require portfolio rebalancing. Portfolio rebalancing is not any kind of magic that will shower hefty return to an investor; it is just a process of changing the proportion of stocks and bond in the investment portfolio. The former group is surely losing in their investment and thus rebalancing will help them to make a good  [...]

Using a put option always works well when the market is choppy and volatile. In order to take advantage of any volatility that might occur, you can use a put option or a call option to increase your earnings from the investments you have made and you can also decrease your investment losses. The person that owns the right to use a put option has the right to sell stocks once a certain price is hit, while those that would sell a put option must buy at a certain, pre-determined price. If you own a call option, you can buy at a certain price while if you sell call options you must sell once a certain price is hit. Commonly, a put option is used for the owner of a stock as a failsafe mechanism. It allows him to build some insurance in place if the stock price were to plummet. Think of it as a safety net. Let’s illustrate this point with an example. Let’s take a fictional company called  [...]

Almost everybody in the stock market is on a rampant hunt for those stocks, which are beating the market, excepting a few investors who are dedicated to indexing approach. The individual stock selection involves huge risks and hence, the expectation of market-beating stocks originates among investors. Investors are always finicky in taking advices that claim to offer easy techniques for identifying such profit making stocks. But when long-term investors in the stock market, shares their experience about the trend of such stocks, then one can easily rely on them. Stock market investors will feel themselves in a safe ground once they have successfully identifies market-beating sticks for investment. There are certain traits of these stocks that need to be noted. Investors playing in the stock market for a long time can only notice these traits. But fortunate like you get to know these facts  [...]

Every investor in the stock market should be able to better understand their investments, and the easiest way to be able to do so is to read the language of stock market charts. All stock market charts have one simple goal; to graphically depict the movement of stocks, mutual funds or an index that investors are likely to put their money into. These stock market charts can be availed free of charge simply by searching for it online and even in real time if they were to only look around for it for a little bit. But all said and done, the internet is the best and quickest place to find free charts for you to read into. Simply put, there is a great deal of volatility in the stock markets and it is always a challenge to unravel even for the most experienced heads. Indeed, in order to better help investors, there are a lot of tools that have been created with sole intention of better predicting  [...]

The time for waiting is now done with. After a two month surge on the part of the US stock market, the day of reckoning is almost upon us. Some investors, having put their money where their mouth is, will now see if they got their hearts deepest, darkest, desire; an increased say for the Republicans in the White House and loads of money for nothing. The American stock market have factored in the Republicans winning more seats thanks to the mid-term elections and many investors have their fingers crossed over this as it is a prospect that will be received as being largely business-friendly. Couple that with the Federal Reserve pumping billions through quantitative easing and purchasing Treasury debt and you will understand just why it is the final countdown for many that have invested themselves in this scenario. Tuesday is the day we understand the power-play of politics and just how it  [...]

In what can only be dubbed a very surprising move, the price of stocks and commodities took a tumble as China's central bank implemented an interest rate hike that no one ever saw coming. After weeks and months of being pilloried by the Western world to act as a more global citizen instead of just looking out for their own interests, China has taken cognizance and begun to move along the path to being a better economic citizen of the world. Investors had a lot to mull over, with mixed housing data, corporate earnings and selling reports by influential groups of bondholders making things even more murky. Many of these bondholder groups have been posturing with the Bank of America to pick up bad mortgages to the tune of $47 billion. These bad mortgages had been looked after by Countrywide, a division of the Bank of America that is now a problem child for big daddy. China hiked its Prime  [...]

If you want further proof of the growing clout of Asia as an economic force, look no further than the bond markets of these countries, for they are booming and have expanded over the course of this last decade. The west all too often takes for granted the manner in which they can borrow in their local currency, and symptomatic of this is the ease with which the Federal Reserve was able to issue 30 year Treasury bonds even at the height of the crisis that grips the world. Not many nations can claim to do this, for it is a luxury. And emerging nations just aren't able to do it on the same scale as the U.S. has. More often than not they turn to the foremost capital market in the known world, namely the U.S. Dollar market. South Korea is a prime example of just how Asian markets have developed. Let your mind wander back to 1997 when the Asian financial crisis pummeled the region like a boxer  [...]

Monday, October the 11th was a red-letter day in the annals of history for the S&P 500 index. Three years ago to the date, the S&P 500 index hit its all-time intra-day peak of 1576.09. Not even two days prior to that, the index hit its all time high closing figure of 1565.15. Those were halcyon days, and things have gone south since then, a series of events that have catastrophic and largely unforeseen in nature and it has gone on to severely alter the economic reality as we know it. For all we care, three years could have been 3 eons ago since things are so different now to what it was then that things might well be told in a grandfatherly way…“I remember when the S&P 500 index hit its high of 1576.09. Those were good days; politicians were noble and prices were reasonable.” Consider a handful of the events of the past 3 years; Lehman Brothers now have a whole lot in  [...]