...my micro/macro economy & Global Economy, and to find that I need more time to remember and understand alll these, it's depressing. My mental judgment tells me that you know what you are saying. Thank you. (That still I´m not) you don´t need to be a PhD in Economics (even as having one can help): you DO need a lot of PATIENCE, you need a discipline of reading everyday A LOT about global economic & political news (discarding the garbage from real-value information), you need a strategy and need to follow it, and you need to remember Peter Lynch´s famous phrase: ¨The main organ in Investing is not the brains: it´s the stomach!¨ . Good investing & best regards. Also, when the stock market drops due to some economic event, we often get dollar rallies. The reason is because everyone is selling thier stock and trading it for Cash. If everyone wants cash, cash...
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...Basics:Stocks https://www.youtube.com/watch?v=Snsapamg8CU&list=PLFrErI4cWVHwU4ORy5i2TuzQBvxqVbelH Stocks A stock represents a partial ownership of a company. When you’re buying a stock, you’re buying a piece or a share of a company. By owning a share you get a small fraction of the company’s assets and have a claim on its future earnings. There are two ways in earning money from stock Stock appreciation – when a stock you own goes up in value, if the investor bought the stock in one price then the price went up the investor may sell the stock to another investor in a higher price. Therefore profiting from the added price value. Dividend – this is a periodic payment issued by some stocks. A dividend is like a payment of the company to the shareholders. The amount of money needed by a company to open and start operating is called a capital. The owner then may need to loan from the bank for the capital needed but that only means that they would be in great debt. A company could issue a share of stock, by issuing stocks which is also called going public a company can raise money without going into debt, instead it sells shares of ownership and claims to future earning to investors. For examples there’s a typical investor who has some extra cash, and he’s looking for an investment that has better returns than a savings account and he is accepting the risk of investing on a stock. He then saw a company that is likely to grow and thinks that buying a share will be a great investment...
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...Bumpy Ride for Stocks Post-Fed By JONATHAN CHENG Stocks bounced in and out of positive territory and the dollar and the 10-year Treasury note fell after the Federal Reserve said it would buy $600 billion in longer-term securities by the middle of next year as part of its latest effort to prime the domestic economy. The Dow Jones Industrial Average was down 11 points, or 0.1%, to 11178, while the Standard & Poor's 500-stock index fell less than one point to 1193 and the Nasdaq Composite fell less than one point to 2533. [pic]Getty Images A financial professional looks over at his screen on the floor of the New York Stock Exchange in the middle of the trading day Nov. 3. The 10-year Treasury note sank, pushing the yield up to 2.634%. Gold and metals also fell as the Fed said it would maintain its existing policy of reinvesting principal payments from its securities holdings, and purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011 at a pace of about $75 billion a month. The Fed said it would also "regularly review the pace of its securities purchases and the overall size of the asset-purchase program" as economic data flows in. Expectations of Fed easing had helped fuel a two-month surge on the stock market that has added 12% to the Dow. The Fed move was generally in line with market estimates, putting to rest the idea that the central bank would proceed on a more cautious step-by-step basis from the get-go. Anthony...
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...University: Date Submitted: Stock refers to instruments which signify ownership position in a corporation. Stocks stand for a claim on its proportional share in the profits and corporate assets. The stock market provides a stable and reliable method of gaining long term wealth. Ownership in a certain company is determined by the amount of shares a person holds divided by the number of shares outstanding. Most stocks used in companies provide voting rights allowing the shareholders have a proportional vote in making certain corporate decisions. It is only corporations that have stocks. Other types of companies, for example, limited partnership and sole proprietorship do not provide stocks. They take the form of preferred stock or common stock. Common stocks carry voting rights and can be applied in the decision of the corporate. On the other hand preferred stocks are different because they do not carry voting rights, but entitled to get a certain level of dividend payment before the divided can be provided to the shareholders. Just like any other forms of investments stocks have their own advantages and disadvantages. Stock trading represents one of the traditional methods of investing. It is the process by which stocks issued by companies are bought and sold to raise capital. The shareholder is entitled to the profit received by the company depending on the percentage his or her ownership. One of the main advantages of stocks is that they provide a great opportunity...
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.................................................................................7 What care should one take while investing?......................................................................8 What is meant by Interest?......................................................................................................8 What factors determine interest rates?...............................................................................8 What are various options available for investment?......................................................9 What are various Short-term financial options available for investment?.............9 What are various Long-term financial o ptions available for investment?............10 What is meant by a Stock Exchange?................................................................................11 What is an ‘Equity’/Share?......................................................................................................11 What is a ‘Debt Instrument’?.................................................................................................12 What is a Derivative?................................................................................................................12 What is a Mutual Fund?............................................................................................................12 What is an...
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...Advantages and Disadvantages of Preferred Stock Preferred stock offers several advantages and disadvantages when compare to common stock. It gains its name for the fact that it takes priority over common stock dividends are to be paid. In other words, preferred shareholders will also take precedence over common shareholders in the event a company is liquidated, however, they will not take precedence over creditors. From the investors’ perspective, a preferred stock is much less of a risk to own because the fixed dividend payments are guaranteed. In addition, the interest yield of preferred stocks is known for being less volatile than bonds. An important drawback of most preferred stocks is that they do not provide voting rights for the shareholder. In many ways, a preferred security works like a hybrid of a stock and bond. The face value of the asset is not going to fluctuate very much, thus leaving out the possibility for a windfall profit. In exchange, the holder of a preferred security will enjoy a steady stream of guaranteed dividend payments. It also provides the peace of mind knowing that your claims to assets will have priority if the company ever goes bankrupt. As an investment, I would choose common stock. Although the risk can be higher, there is a greater potential to experience a very large profit. If I was a significant shareholder in a company, I would choose common stock because it provides voting rights that can be used to vote on corporate affairs. This provides...
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...Stocks Stocks October 10, 2015 XACC/291 Stocks Many people wonder why preferred stock is referred to as preferred and what makes it more attractive to investors. Preferred stock shares are "preferred" because they have the preference over the common shares to receive dividends and company assets if the business is liquidated. If a company does not have enough cash to pay dividends to both the preferred shares and the common shares, the preferred shareholders must be paid first. Any Company or Corporation can issue two types of stock: Common and preferred. Common stock is defined as a partial ownership in a company and these are the shares that usually are referred to when discussing a company’s stock. Investors will always look at common and preferred stocks in many different ways. If I had to choose between preferred and common stock I would have to go with preferred stock. A Preferred Stock is very much like a bond, but usually without an expiration date. Typically Investors would buy preferred stocks for their income potential, and common stocks for their growth. Common stock, on the other hand, generally has far more opportunity for appreciation than preferred stocks to. So it can be a difficult choice and of course will vary but it seems that preferred stock would always be the more beneficial since they do not fluctuate much like common stock would. In addition preferred stocks can have several versions, but with common stock there is only one version...
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...theory stock returns have shown a noticeable volatility; thus if an investor desires to increase expected returns she must face a higher level of risk. Similarly, it has been proven that owing a group of financial securities can assist the investor to improve the return/risk tradeoff; that is owing eight stocks will produce an improved return/risk product over time versus owing one stock. Therefore, in evaluating a portfolio it is critically important to compare returns and risks involved; but in order to compare and evaluate returns and risks the investor has to know how to calculate these two important criteria (Markowitz, 1970). The return of a stock is based on its current price, its expected price plus distributed dividends. Therefore, if the current price of a stock is $40.00, its expected market price, let us say after a year, is increased to $50.00 and the distributed dividends amount to $5.00, its return is calculated as: [(Pt-Po) + DIV]/Po; Po is the current price of the stock, Pt is the price of the stock after one year and DIV are the distributed dividends per share. Substituting the above assumed numbers into the equation we have [($50-$40) +$5]/$40 = 0.25 or 25%. The risk of a stock is mainly measured by the standard deviation (Markowitz, 1987). In the case of a portfolio the expected return is the weighted average return of the returns of all the stocks included in the portfolio. The weight represents the amount that has been invested in each of the stocks included...
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...APPLICATION OF ARIMA MODEL FOR TESTING “SERIAL INDEPENDENCE” OF STOCK PRICES AT THE HSEC Cao Hao Thi – Pham Phu – Pham Ngoc Thuy School of Industrial Management HoChiMinh City University of Technology ABSTRACT The paper is an attempt to test the “serial independence” of stock prices at HoChiMinh City Stock Exchange Center (HSEC) in Vietnam by applying the ARIMA model for preliminary assessment in terms of its market efficiency. From findings derived, it appears to be that: (a) ARIMA model could be applied for testing the serial independence of stock prices at the HSEC; (b) It is failed to prove that the HSEC market is not a weak-form efficient one; and (c) the “sheep flock effect” psychology is a factor dominated at the HSEC during the past two years. INTRODUCTION The first stock exchange floor of Vietnam named “HoChiMinh City Stock Exchange Center” (HSEC) was officially opened in HCM City on July 20, 2000. After two and half years of operation, there are now 21 listed stocks and 41 bonds traded on the HSEC with a total capitalization of about VND 5,200 billion. This would be seen as a first success on the way of setting-up SEC in Vietnam. VN-Index of the HSEC, however, has experienced a truly ups and downs movement and changed considerable during almost last two years. In the first section on July 28, 2000, VN-Index was 100 points and increased to a peak of 571.04 points in June 25, 2001 before sliding to lower 150 points in the first...
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...using a buffer stock scheme to stabilise the price of a commodity such as sugar or tin. A buffer stock is an intervention system that aims to limit the fluctuations of the price of a commodity. A commodity is a good that is traded, but usually refers to raw materials or semi-manufactured goods that are traded in bulk. In free markets agricultural prices fluctuates from year to year depending on the level of output affecting both the famers’ income and ability to make long term plans. In some cases this has led to setting up buffer stocks to ensure consistent supply and income to farmers. The authorities sell from the stock when harvests are poor and buy in stock when harvests are good. This prevents huge price increases in bad times and low famers’ incomes when harvests are good. One reason why using a buffer stock scheme to stabilise the price of a commodity such as sugar or tin is a good idea is that it prevents fluctuations in the price of a commodity. This is because when the output of a commodity increases or decreases the government will be able to buy the excess stock and store it, or release the stock that they have stored. This means that, in the case of sugar and tin, there will not be a shortage causing an increase in price because the government will be able to release stock that they have previously stored to maintain the output and price, therefore leading to no fluctuations in the price of sugar and tin. Another reason why using a buffer stock scheme to stabilise...
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...When starting our stock track portfolio we set a benchmark to trade within the S&P 500 and to pay attention to different technology companies due to different phones and portable devices being released in recent news. So far we have only only purchased different equities based on recent information and keeping an eye on the market that in the past two months. We especially watched the market in early October when the market was very unpredictable. Our long term strategy thus far has made us ride out the stocks until it is necessary for Our first transaction was purchased on September 11th for 50 shares of Cisco Systems (CSCO) for $25.12 and it is currently selling at $23.26. Even though we are currently as a loss with this stock due to recent information they are down because of a recent joint venture that they are currently getting rid of 25% of their ownership so we are going to hold to see where this moves. Our next transaction was on September 18th of 30 shares for The Walt Disney Company (DIS) for 90.31 it is currently selling at $87.10, we are convinced the DIS is a solid that even though goes up and down it is a stable stock. The next stock we bought was Go-Pro (GPRO) on September 30th, in recent new Go-Pro has been under scrutiny due to a skier who was with his children in Switzerland and is claiming that due to the Go-Pro attachment to the helmet it hindered the use of the helmet when he fell which lead to his death. We bought 28 shares GPRO for $90.60 and it is currently...
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...Executive Summary With the unpredictable markets that have occurred in the past few months there truly was no need to go to any amusement park because no ride could take you on as many bumps, twist and drops that this economy has taken us investors on. The Stock-Trac Simulation was a great educational tool which gives beginners in the online trading world basic knowledge and tools to help succeed in the “world’s largest casino”. Today’s world is globalized and what makes a smart investor is someone who knows all about the different and diverse markets and companies of the world. For this assignment we had to invest in different companies and exchanges from all around the globe. Since we were new to investing, this project seemed to be a little overwhelming at first glance and we knew we needed some assistance in researching domestic and international markets. By using Yahoo Finance and Google Finance, we got the help and resources needed to create a diversified portfolio investing in bonds, futures, and stocks. Everyday as we would do our research on certain stocks and other investments, we continued to notice frightening downward trends in world exchanges from NYSE to Shanghai Stock Exchange. We knew before we began trading that there was high volatility in today’s market and it seemed to be causing unpredictable changes in price. These trends were causing havoc on the markets and many companies ending up going bankrupt or were on their last life line. Since this was a short...
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...According to “select data to screen on”, I select seven criteria to figure out which mutual fund that I believed is alluring to investments. My seven criteria are Morningstar Analyst Rating, Morningstar Risk, Annual Return, Year After Tax Return (no sale), Open to New Investment, Morningstar Rating and Equity Style box. Screening criterion: Morningstar Analyst Rating >= Gold Morningstar analyst rating is based on “funds past risk and load adjusted returns”. It analyzes the fund’s process, performance, people, parent and price. I choose Gold, which is the highest rating scale. According to Morningstar, “Gold is the Best-of-breed fund that distinguishes itself across the five pillars and has garnered the analysts' highest level of conviction”. I believe that professional rating is very important source for me to choose mutual fund. Morningstar Risk <= Below Average For long-term investment, I prefer below average risk investment. It is too risky to do a risky mutual fund as a long-term investment, because you could not predict future. 2013 Annual Return >=9 Annual return is very necessary criteria to consider if this mutual fund is profitable. I prefer the recently data, which could provide more helpful information for me to consider mutual fund. Based on the data, it shows average is 4.87 and top area is between 8.85-54.48. So I choose above 9, so my chosen mutual fund has the top annual return. 5 Yr AfterTax Return (no sale) >=14 After I choose...
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...Treasury stock is an outstanding share which was repurchased by the corporation. Treasury stock can be reported using the cost or par value method. The mostly commonly used method between the two is the cost method. The cost method only requires firms to record The par value method requires a company to record the cost of repurchased stock at the value that they assure to shareholders is backed. The cost method requires companies to record treasury stock at price it was purchased at. Recording the transaction of acquiring treasury stock below par value under the cost method would require a journal entry consisting of a debit to Treasury Stock and a Credit to cash, which ignores the loss or gain contributed. Using the par value method for the same situation requires a debit to Treasury Stock and Additional Paid in Capital –Treasury Stock and a credit to cash. The Additional Paid in capital account is used to account for the difference in the par values. If the stock is repurchased at price above par value the entry under cost method would remain the same. While the entry under the par value method would be a debit to treasury stock and a credit to Additional paid in capital-Treasury Stock and cash. Whether the stock was purchased under or above par value affects the recording of the resale of the treasury stock. If the stock is sold at a price below the purchase price but above par value it would be recorded as a credit to treasury stock for the purchase price and the...
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...Stock Market Assignment The stock market plays an important role in businesses today. Becoming an investor proved how important it is to understand the stock market. This assignment gave me the opportunity to research and invest in different companies and to learn about the stock market. I also had the opportunity to watch the S&P 500, NYSE, and the NASDAQ, and reflect on market changes and challenges. When choosing stocks to invest in, I was looking to create a diverse portfolio by choosing a variety of industries, price ranges, well known companies and some that were new to me. I visited their websites, read mission statements, and reviewed past performance, learning as much as I could about each company before investing. I viewed the price graphs using ClearStation when looking for companies to invest in. I was looking for companies who have had a gradual but consistent increase in stock price over the past three to six months. I was not willing to invest in a company who had extreme jumps in price. Overall I invested almost $200,000 in twelve different companies. Coke, Hertz, Best Buy, Crocs, Toro, and Bud were all brands I invested in because they were well known to me. These companies or products have been around for years and have a long standing relationship with the consumers. I was able to use the website ClearStation to view past stock market performance before investing. One of the things I was looking for in the mission statement or website was...
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