Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Posts Tagged ‘Stock Market Investing’

An Introduction to Investing in the Stock Market

Posted February 6, 2011 by Bernz

The economy is very different from what it was a decade ago, and all signs point to the fact that the economy will never be exactly the same.  In a perfect world the stock market would be predictable;  specific market conditions would correspond to specific results.  The stock market is nowhere near perfect though, and as a result a thorough understanding of how market conditions effects profit margins is very beneficial.  Global competition in the marketplace has introduced a whole new level of complexity to the process of investing, and items that were sure fire investments in the past no longer have that status.

Investing in the stock market at its core is a numbers game, but to be truly successful in the market it requires an understanding of the motivations behind why companies make certain financial moves.  There is a fine line between insider trading and being well-informed about a trade prospect.  The well-informed investor knows how to spread assets over a variety of different investments; diversifying is essential to saying competitive in the stop market.

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Posted in Investing Basics, Investing Strategies, Stock Market Investing, Stock Watch | 1 Comment »

Dogs of the Dow- Investing Strategy That Needs to be Retired?

Posted June 21, 2009 by Bernz

I was doing some research online about stock investing two days ago and came across this strategy and thought I should share my insights with my readers.

The Dogs of the Dow is an investing strategy first promoted 35 years ago by Michael O’Higgins, a fund manager who now runs his own firm. The strategy calls for choosing the 10 stocks in the Dow 30 index that have the highest dividend yields at the end of the year. You hold these stocks until the end of the following year when you re-balance your portfolio based on the new Dogs. A dividend yield is calculated by dividing the dividend by the stock’s price. Therefore, the stocks with the highest dividend yields have the lowest stock prices and may be ready for a jump.

Because all of the stocks in the Dow 30 are large cap, stable companies, the Dogs of the Dow strategy states that the companies chosen are likely to be solid in bad times and rise quickly in price in good ones. 2009’s Dogs are: Alcoa, AT&T, Bank of America, DuPont, General Electric, JPMorgan Chase, Kraft, Merck, Pfizer, and Verizon. (more…)

Posted in Financial Education, Investing Strategies, Stock Market Investing | 2 Comments »

Is This the Market of a Lifetime?

Posted March 25, 2009 by Bernz

It’s difficult for even the best prognosticators to get a handle on the stock market these days. The massive recession-that-might-be-a-depression that has gripped much of the industrialized world has brutalized stock markets in the US and abroad. Pension funds, college funds and savings accounts have all been hard hit. Recently, CNBC’s Jim Cramer took a verbal beating from Jon Stewart about his inability to predict the crash.

The Dow Jones Industrial Average has dropped to its lowest level in 12 years recently and continues to test that limit. But even with all of the warnings about the dangers of the market right now, some wise investors are in collection mode.

So, is there opportunity in the stock market right now or only grief and despair? Optimists point to the fact that all stocks are getting punished regardless of their fundamentals. That means that there are stocks that are currently undervalued lurking out there. The tricky part is finding the ones that will both weather the remainder of the recession and also do well when the markets turn around.

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Posted in Financial Education, Financial Goals, Index Funds, Investing Basics, Investing Strategies, Stock Market Investing, Stock Watch | 1 Comment »

Banking on American Banks: Why US Financial Institutions Will Survive the Crisis

Posted March 16, 2009 by Bernz

So far this year, the news has been pretty frightening. Banks have been taking huge bottom line hits on their assets. Some banks have teetered on the edge of financial collapse before receiving a $700 million life line from the federal government. Specters of the Great Depression dominated financial markets and, for the first time in two generations, people started wondering if their money was safe in some of the largest banks in the country.

To understand the banking crisis and why US banks will survive it, you have to understand the sub-prime mortgage fiasco. Most of us know that sub-prime mortgages were home loans made to those who couldn’t qualify for conventional bank mortgage financing, making them high risk. Most of these loans contained a low-interest teaser rate to attract new borrowers, but, buried deep in the fine print of the contract, lurked a much higher rate after the first few months. As the rates went up, so did defaults and the mortgage assets weren’t worth as much to banks. What made the situation worse is that banks and other financial institutions bundled these loans up into packages called mortgage-backed securities and sold them to various investors. Many of these investors were not aware of the risk of the underlying loans. Those securities that sat on banks’ balance sheets rotted away until no one was sure what their true value was, if any. As their assets deteriorated, banks ran into a liquidity crises where their current assets were in danger of not being sufficient to meet their current liabilities. That’s when the federal government stepped in with their bailout.

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Posted in Financial Education, Investing Basics, Loans, Misc, Saving Money, Stock Market Investing, Wealth Building | 1 Comment »

What to Do if Your Stock Portfolio is Down 40%

Posted March 13, 2009 by Bernz

These days, there may be nothing in the world more frightening than taking a peek at your investment or retirement portfolios, especially if they contain equities. Stock markets around the globe have been hit hard by the global recession and the value of both individual and corporate investments have been butchered across the board.

“Be fearful when others are greedy, Be greedy when others are fearful” ‘Warren Buffett’

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Posted in Financial Goals, Investing Strategies, Stock Market Investing, Wealth Building | 1 Comment »