Tag Archive | "Shares"

Which Group Of Shares Or Currencies Should You Trade In?

Which Group Of Shares Or Currencies Should You Trade In?

Here are questions which should be asked about any stock group you are studying. Some of the answers will be contradictory; the significance of all of them will be relative. But each will contribute a plus or minus factor to your thinking about the industry you may wish to invest in.

1) Does the industry deal in necessities or “postponables”? Does it produce things people have to have in good times or bad—food, drugs, power, or heating supplies? Or can people put off buying its products to another year? There is one investor who holds meat-packing and distillery stocks, not notably high-grade issues, because of his conviction that, come hell or high water, beef and bourbon will be staples of the American diet.

The same question on a different level: Is the industry involved in durable or capital goods, such as locomotives, trucks, freight cars, ships, large buildings? These are expensive items with a long life, and are usually financed with long-term, fixed obligations. In a pinch, they are among the first things customers are prepared to do without.

2)Is the industry depression-resistant? Retail stores, tobacco, metal containers, and, again, food products have a reputation for stability, not only in terms of continuing consumer demand, but in terms of production costs and price structures which make them attractive as so-called defensive issues.

3)Is it an extractive industry? Does it deal in natural raw materials, such as oil, lumber, asbestos, metals? Stocks of these companies are considered good hedges against inflation because they represent a primary material, an asset already owned. The acquisition cost of oil underground, for instance, may already have been rationalized; henceforth all that can be inflated are the extraction and distribution costs.

4)How keen is competition within the industry? Usually competition is keenest where the differences are least. Automobiles, soaps and detergents, drugs, tobaccos, gasolines and motor oils—within these categories the companies all offer the consumer pretty much the same thing. The local power and light company, the telephone company, and the natural gas companies (except for the scramble to run pipelines here or there) are virtually without competition.

Cross-competition between industries is also a factor. This is not the struggle of Coke vs. Pepsi, or Tide vs. All, but whether new office buildings are going to have a skin of brick and mortar, aluminum sheets, or glass panels.

The container and packaging people are a lovely example of round-robin competition, as is perfectly evident from five minutes’ inspection of your supermarket’s shelves. Plastic squeeze-bottles of one sort or another have cut into glass as far as the packaging of cosmetics is concerned.

On the other hand, the appearance of liquid soaps has given glass an opportunity in a field that was exclusively the paper-carton supplier’s. The paper-carton manufacturer, meanwhile, has benefited from frozen foods at the expense of the tin-can producer. But the tin-can man has a new area in the pressure containers now used to dispense shaving cream, toothpaste, hair lotions, and anything else that can be squirted or sprayed—and that isn’t already in a plastic squeeze-bottle.

5) Are wages a big item in the industry? How large a percentage of total sales are they? This, of course, can bear heavily on net earnings and, consequently, dividends. In the chemical industry, the ratio of wages to sales is quite small.

In steel and railroading, which have vast numbers of employees and huge payrolls, it is quite large.

6) Do raw materials come from domestic sources or from abroad? Are their prices traditionally stable or volatile? This, of course, applies to the oil, rubber, and sugar companies, to some of the mining and metals companies, and to a few of the chemicals. This is, possibly, not so important as it once was, considering that few industries are totally dependent on foreign resources, and that political upheavals or wars are so far-reaching these days that almost everyone is affected to some degree, at home and abroad.

The question should also be broadened to include foreign markets: What percentage of income derives from sales abroad? This would affect air and shipping lines, distributors like W. R. Grace and U. S. Industries, and the export trade of the auto, machinery, movie, and electrical-equipment industries.

The investor will have to decide, too, whether he considers foreign trade a positive or negative item. Overseas markets may be uncertain or undependable, but they are also frontier areas of tremendous potentiality for an economy like that of the United States, which has lived so largely off its own people.

With Forex trading economic indicators will have to be studied as well.
Good Forex software can greatly help you with this task.

Forex software has become so good that it has artificial intelligence and can predict future currency movements with some accuracy.

You still need to be aware of the risks involved in any financial investing and only invest what you can afford to lose.

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The Most Profitable Groups Of Shares Or Currencies To Trade

The Most Profitable Groups Of Shares Or Currencies To Trade

In spite of the trend toward diversity, most of the hundreds of stocks in the stock market can be grouped into one product or service category or another.

Which group is for you? Well, there are about fifty clearly defined industries in this country, even more if you are particular enough to separate aircraft manufacturers from airline operators, or natural gas from oils, or Class 1 railroads from lesser lines. Even these groupings are by no means complete. The list could be fleshed out with banks, insurance companies, leather-products companies, glass and container manufacturers, shipbuilders and fleet operators, textile millers, sugar growers, and radio and television manufacturers and broadcasters.

All of this reflects the wonderful and confusing diversity of American industry. Among it all there should be a few good stocks to buy. Indeed, there are. But it will not take much investigation to learn that each of these industrial groupings has a reputation, and that even the best reputations may be subject to cyclical slumps. These reputations are variously described, but roughly they can be said to follow the gradations given to stocks. There are Blue Chip industries, there are “businessmen’s risks,” there are out-and-out speculations. Or, you might say, there are industries of investment caliber, those of good quality, those responsive to abrupt up-and downswings, or, again, those which are speculative. Some are growth industries, some have hit then: peak and leveled off on a comfortable plateau, some are on their way down and out.

As always, generalities must be taken with a grain of salt. Within a group, one stock or another may run entirely counter to the general trend, either up or down. (And it is precisely this sort of contrary action that occasionally enables shrewd traders to buck the trend and come up with a winner.)

Among the industries of solid reputations, you would have to put the utilities first. This has not always been so. Manipulation with public-utility holding companies was one of the skyrocketing scandals of the days before the Crash. In the 30 years since then, however, utilities have regained status among the solid rocks of the securities markets. They are rarely spectacular performers.

Rate regulation by state power commissions permits—and even maintains—a reasonable return on utility operations, but curbs all chance of runaway profits. All estimates of future power needs and consumption point upward. Many utilities are in the forefront of atomic-energy development. Conservative management, steady expansion of plant and generating capacity, and temperate market action maintaining yields at 4 to 5 per cent are factors which currently give the better utilities a Blue Chip rating.

Food production and packaging is another sound and basic industry. Processors of grain—the flour millers, cereal producers, and syrup manufacturers—dairymen, and frozen-food packagers are all steady performers and likely to remain so, as the population increases and the nation’s diet continues to improve. Strangely, despite America’s passion for beef and pork and lamb, the meat packers do not enjoy the same level of prosperity.

The drug manufacturers generally are a conservative group with an impeccable reputation and an enviable profit record. (You will see them classified as producers of “ethical” or “proprietary” drugs. The former are the medicines or medical ingredients that can be dispensed only by a doctor’s prescription. The latter are the drugstore items—cough syrups, cold tablets, vitamins, ointments, and pills—that health conscious America doses itself with to the tune of more than three billion dollars a year.) Competition among the drug companies is fairly fierce.

The company that comes up with a new antibiotic or tranquilizer enjoys a keen competitive edge. And so does the one whose trade name for a standardized product becomes more popular than the rest. As suppliers of a basic American necessity, however, the drug group ranks with the food and power producers.

Chemicals must also be near the top of any quality list. Certainly, few industrial groups have such a high percentage of truly outstanding companies or such a basic and vital economic function to perform. Interestingly enough, as this is written, they are just beginning to come back into favor. Several years ago they were among the bluest of Blues. Then overexpansion, overproduction, and similar corporate imbalances began to plague them, and took the bloom off the rose.

Earnings fell off. The performance of chemical stocks as a group lagged behind that of other industries. Now they are picking up again, and brokers’ letters are rediscovering opportunities in chemicals. Such short-term reactions are not serious enough to weaken the fundamental stability of the chemical group. But one of the points to be made about the reputation of any category of stocks is that it is never invincible.

Choosing pairs of currencies to trade against each other is another interesting study.
Here are some of the best: The Euro and the Swiss Franc. The British Pound and the Japanese Yen.

These are best traded with the U.S. dollar. So we could trade the U.S. dollar against any of the above currencies for a good return on our investment.

Using good Forex software will also help you considerably.

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Investing In Forex Or Shares What Should Your Aim Be?

Investing In Forex Or Shares What Should Your Aim Be?

A question that a lot of investors ask is whether they should aim for capital appreciation or a nice dividend.

With Forex this question does not arise as capital gain is the main objective.

A fat dividend and a high yield which persuades investors that the stock has been undervalued may well create a small stampede that boosts the price and thereby reduces the yield to more conventional levels.

It is also conceivable, however, that one could wait a discouragingly long time for Bethlehem and Youngstown to merge (the Government has frowned on the idea) or for Northern Pacific to make more from oil than from railroading.

The big problem of the capital-appreciation man is that he is dealing in forecasts and predictions—and on a larger scale than his brother who simply wants to figure the chances that General Foods will continue its dividend.

There are indicators which make the task something more than guesswork, but it is difficult nonetheless. Corporation directors are notoriously close-mouthed about any action affecting the fundamental structure of their company; it is most unlikely that the average investor can inform himself and act fast enough to gain an edge in this area of capital gains.

As for growth prospects, the field is wide open. But whether to pick an Ampex, a General Dynamics, or an Eastman Kodak is a puzzlement.

Every large and successful company today was once small, and investors who got aboard during the rise profited handsomely. But which of the hundreds of small electronics firms will be the General Electric of tomorrow—and which will go by the boards, as did so many promising automobile companies a generation ago? (Anybody got a closing price on Pierce Arrow?) And what, considering the amazing versatility of our ever-growing large corporations, is Mighty Atom Instruments, Inc., likely to do that Westinghouse can’t do better? Even assuming you have picked a winner, have you picked it early enough?

The prices of many so-called growth stocks today already reflect the optimism of buyers, possibly beyond the ability of the companies to earn as anticipated.

Remember, too, that in the rising market we have enjoyed for so many years, the real gain lies not in picking a merely successful company—the woods have been full of them—• but one which outruns the market.

It has been done, and can be done again. A bold investor who has studied the market closely can pick up a temporarily depressed or unpopular stock at a good price and reap the benefits of a subsequent rise. Or he may, in fact, sniff out the company due for a banner year.

But for the new investor, even the try for capital appreciation is best done on a long-term basis. Satisfy yourself that your stock is not overpriced, then buy and give it a chance to develop.

Safety of Principal: Essentially, this means bonds. The investor who is willing to forego a lively profit in the form of dividends or capital appreciation can be interested only in conserving the funds he has invested. This, customarily, is done by purchasing bonds which are a debt of the issuing company, not a stake in its earnings.

Bonds held to maturity will return their face amount to the holder. And bond interest must be paid along the way whether this leaves anything for the stockholders or not. Interest is paid at a fixed rate for a stated period of years; the rate usually is between 2.5 and 4.5 per cent, depending on the difficulty or ease of obtaining money at the time of issuance. Once it nits the market, however, an attractive bond, like a good stock, is frequently bid up to the point where the return is considerably less than if it had been bought at par.

Municipal bonds, issued by towns and cities to finance schools, sewage systems, water lines, and the like; state bonds issued to finance a variety of requirements; and public authority obligations, usually involved in the construction and operation of toll highways or bridges, are a category primarily of interest to the wealthy investor seeking tax relief. “Municipals,” as all three are loosely called, are tax-exempt. For the man in the 50 per cent bracket this means as much income from a bond yielding 3 per cent as from stocks earning 6.

Still and all, the new investor interested in bonds will by all odds do best by purchasing United States Savings Bonds, Categories E or F. They are the safest security anyone can buy. They are noncallable; they are not subject to the flue-tuations of other securities and other markets. (Corporate bonds are inclined to slump when stock prices are cheap and yields high, inclined to become expensive when stocks are high and yields begin to approach the levels customarily offered by bonds).

Another point: corporate bonds are usually issued in ,000 denominations, which places a significant holding beyond the reach of any but the wealthy or institutional investor.

If you are a Forex investor remember that as you are trying for a capital gain, this can Be risky and good Forex software will help you reduce risks.

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The Effect Of Politcal And Social Factors On Shares And The Forex

The Effect Of Politcal And Social Factors On Shares And The Forex

Political and social developments, you will find, can have an immediate or eventual effect on stock and currency prices as readily as economic factors.

When the Suez Canal was closed, stocks of companies obtaining appreciable amounts of oil from the Middle East reacted adversely, while domestic oils advanced, anticipating a greater demand on their production.

Washington, in all its ramifications, can alter the course of the market. The President, the Congress, the Supreme Court, and all the attendant Government agencies, bureaus, and committees can take action influencing the prospects for companies or industries.

Projections of the President’s Council of Economic Ad¬visors are important. Congressional action on the corporate tax structure, on the extent and direction of military spending, or on labor legislation can have far-reaching effect on business. So can a Supreme Court ruling or an opinion of the Justice Department.

The Bureau of Internal Revenue’s corporate or personal tax rulings, the Commodity Credit Corporation’s policies on commodity prices and lending, the Commerce Department’s business forecasts, the Farm Credit administration’s schedule of prices for agricultural products, the Interstate Commerce Commission’s rulings on railroad freight rates the list of actions and possible reactions is virtually endless.

The power of state utility commissions to regulate rates, the wages-and-hours demands of labor unions, and such revolutionary admistrative decisions as that of New York state, some years back, for the first time permitting certain trusts to invest funds in common stocks have direct impact on the financial and investment world.

Read widely and read regularly. Among other things, most financial information is carried in the form of charts, indexes, and averages that won’t make much sense until you have enough background to compare them with last month, the previous quarter, or a year ago.

Don’t expect to have hot tips or inside information re¬vealed to you. Most of the available market material is in the public domain, and the professionals have seen and di¬gested it before you. In any event, you are not yet ready to outwit the experts.

You are interested in getting into the habit of informing yourself and of staying alert to changes and trends. It will take a powerful lot of reading to decide whether Gulf is a better oil company than Standard of California, or whether General Mills grind finer than Pillsbury.

But if you want to know what new products or what new ventures a corporation is undertaking, or how one segment of industry is going compared with another, or what some analyst thinks of a certain stock, your reading will tell you.

In time, you will become selective. You will want to stay abreast of general business and market news, but, unless you are dealing in commodities, you will not pay much attention to the grain markets or coffee, sugar and onion futures. And you will probably not memorize freight-car loadings except insofar as you want an indication of how the railroads are getting along.

The internet can also help you with research and it is amazing how quickly information is received by everyone nowadays.

To protect yourself if you are trading on Forex, download some Forex software that can help you predict currency prices

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How Free Information Can Help Make You Rich Trading Forex Or Shares

How Free Information Can Help Make You Rich Trading Forex Or Shares

No one can predict the future with any high degree of accuracy, and the farther ahead the seer attempts to look, the less accurate he is likely to be.

Be receptive; good information is where you find it.

Second, you will find that the costliness of information does not necessarily reflect its value.

Much of the best material you will get is free.

Your primary sources of investment information are two: New York Stock Exchange member firms and the companies in which you are interested.

Your brokerage firm will provide accurate, up-to-date material, free for the asking. The increase in the number of new investors has launched many firms on broad-scale informational programs. Most of them have weekly market letters, monthly or quarterly surveys, analyses of individual stocks or industries.

(A recent tabulation shows that some 296 member firms now issue about 30,700 market letters, 15,500 pieces of sales literature, and 1,800 special reports— a stack of paper some 38 feet high and weighing around 975 pounds!)

The weekly letter is usually the work of a senior analyst whose job is to move around and tap professional opinion on current market trends, or to conduct field investigations of new developments in companies or industries. It is conversational, newsy, and necessarily not very exhaustive.

The monthly and quarterly surveys are more thoroughgoing, but the editorial and production time involved in putting them together makes them something less than up-to-the-minute. These usually compare performances, indicate trends, and carry ratings or opinions of various groups of stocks. You can get on the mailing list for these items very easily.

Also join selective internet message services to give you up to the minute information.

On request, your broker will also send you fact sheets on individual companies you may be interested in. These usually cover the basic elements of the company’s financial history: its capitalization, its earnings and dividend records, and the prices at which its stock has sold.

On request, too, you may get rather more elaborate studies of companies or industries, the range depending mostly on the versatility of your brokerage firm’s research department.

Finally, your broker should have booklets on specialized ventures, such as the Monthly Investment Plan, investment clubs,Forex or commodity trading.

Corporations are also very much aware of investor interest these days, and most of them are happy to send you annual reports, quarterly statements, stocks prospectuses, or other information, if requested.

These are frequently more ample than your broker can provide; annual reports contain balance sheets, consolidated income statements, and earnings records going back 10 or even 20 years, as well as general factual information on the company’s activities.

It must be remembered that companies are naturally prejudiced in favor of their own business interests, and are inclined to put their best foot forward.

This does not mean that their information cannot be trusted, but simply that an annual report, for instance, which is management’s accounting of its stewardship to stockholders, will put the company in the best light. It is possible that there will be an overenthusiastic view of its performance or prospects.

Secondary sources coming easily to hand, are ordinary newspapers some 600 of which now print daily stock tables and general circulation magazines dealing with business and finance.

These have the virtue of non-involvement with the financial community as such, and possibly a broader perspective on the news. On the other hand, they may lack some of the information readily found in more specialized financial publications.

If you are trading on the Forex download some Forex software to help you predict future price movements.

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Successful Investing For Income In Shares Or Forex

Successful Investing For Income In Shares Or Forex

Investment for income is generally a long-term proposition. It implies stability and it makes particularly good sense for people who do not expect to become market experts or security analysts.

In fact, there are respected authorities who state flatly that the investor who seeks anything more than income from securities must be classed as a speculator, a risky role to play for any but the most sure-footed professional.

Long term, it should be noted, does not mean forever. It does not mean buy-and-forget. Whatever your holdings, you should review them several times a year and stay alert for news indicating whether the prospects are good that your companies will continue to maintain their present level of earnings.

Unless you have strong reasons for dissatisfaction with an income stock, however, there is little to be gained by switching. Generally speaking, there is not enough difference in the yield, say, from two good-quality utility company stocks to justify the expense of selling one and buying the other. (Although 100 shares of a stock paying would produce more income annually than one paying .50, it would take more than a year to rationalize the commissions and taxes paid to sell the latter and buy the former).

Dividends have their own way of accumulating. Given the steady upward trend of stocks in this century, a well-chosen security will reward the investor who holds it patiently. In even five years there can be a dramatic increase in yield. Take, for instance, Central Illinois Public Service CIP on the ticker tape—a moderately well-rated small utility company serving agricultural, mining, and manufacturing areas of central and southern Illinois. In 1953 it hit a low of 17⅛ which meant a 6.7 per cent return in a .20 dividend. In 1955 the dividend was upped to .35; in 1956 it went to .60; in 1958 to .68; and in 1959 to .76. It is now .92.

Meanwhile, its price, reflecting the increased dividend, has more than doubled. At a recent quotation of 44, the yield was a respectable, but not unusual 4.3 per cent. The investor who bought at the 1953 low, however, is now receiving a quite spectacular 10.7 per cent return.

At this point, day-to-day dips and rises in Central Illinois Public Service mean little to the investor of seven years’ standing. By now the dividend would have to be cut more than a third before he found himself where he started, and 64 per cent—to 70 cents—before he reached the 4 per cent return of the man who bought at 40. These drastic cuts are not inconceivable. But the cushion for the investor who bought in 1953 is considerable. There would have to be some quite violent reversals in the price and prospects of CIP before he would be moved to sell out.

The problem of stability is a beguiling one. For many investors it represents the compromise between safety and risk. Safety, as we will see, offers a discouragingly low return. Risk is the privilege of those who can afford it exhilarating when one has dared and won, but painfully, most truly felt by the loser. Somewhere in between, most investors decide, there must be a sensible course, commensurately rewarding and so there seems to be. Stability is the touchstone. The gauges of stability are many.

The one hazard is that they are inevitably based on past performance. No one can say for sure when the downhill slide will begin, when the earnings will diminish, when the seemingly unshakable dividend will be cut or passed.

One gauge, nonetheless, is the consistency and longevity of a company’s dividend payments. A company that has rewarded its shareholders through fair weather and foul must not only be considered strong, but reasonably proud of its performance and eager to maintain public confidence in it.

These records are easy to check. Any broker, for instance, can supply you with a list of the 50 companies with the longest records for consecutive annual dividend payments. It is an impressive group, headed by the Pennsylvania Railroad, which has managed to pay a dividend every year since 1848.

There are no dividends from investing in currencies but you can make more money from a good movement in your currency pairs.

Using Forex software will help you to predict when and which ways different currencies are likely to move.

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An Industry Blueprint To Stocks And Shares

An Industry Blueprint To Stocks And Shares

In this day and age, a lot of things have changed from how they used to be, which can be new and exciting for most.

Because of the large size of the stock market, beginner investors appear to feel overwhelmed as to where to even activate investing their money. To most people, the stock market presents a messy web of options but does not reveal the highway map of clarity to guide their way along way in their investment adventure. The key to investing in the stock market is to become as educated as it is possible so that you know exactly what is taking place at all times. This helps people to make plausible and sound decisions about their money, thus, dropping the stress involved with investing.

The usual person, when beginning to entertain the idea of investing in the stock market, falls into one of two categories. Class one is the gambler who feels that investing is definitely a form of betting and no question what they do, they are certain that they will drop money slightly than make money. It seems that this opinion of investing in stocks is either formed from friends and family that have been baffled by the stock market or private experience and lost money. If someone has personally made losses in the stock market, it is pretty evident that they were not educated enough at the time of their investment in the stock market. Therefore, they must become educated as to what exactly the stock market is as well as how its system works in order to become a successful investor. Class two, on the other hand, represents the “go-getter” investor, which is an individual who knows that they should invest into the stock market for the safety of their monetary future, but they have absolutely no idea where to b

Essential to every economy is business…businesses that started out as small operations that have grown to become money making giants, raising capital by promoting stock in them to people who want to invest to make their futures financially secure. As small businesses start to grow, one of the supreme obstacles is generating enough money in order to develop into a superior operation. Businesses either scrounge the money in the form of a offer from a bank or venture capitalist, or someone that will invest money into a business in which they feel they will receive a high rate of return, or a reap from their investment into a business, in order to create the currency to expand. The most common choice for a business to gain money for the view of expansion is to take out a loan; however, there is no agreement that a bank will offer money to any given business.

What we have explored up to now is the most important information you need to know. Now, let’s dig a little deeper.

In this case, business owners roam to the stock market for help in the form of issuing stocks. Firm owners relinquish a tiny fraction of control over their business and in reciprocation; the stock market provides that business money that does not have to be salaried back, in order to guarantee expansion. As an added bonus, the business is permitted to “go public,” a saying that means a brand is selling stocks for itself for the first time, so that business owners no longer are required to borrow money from banks because they can merely use their own stocks for getting monies to use for expansion. Thus, as the business grows and sells their stocks to people, the better chance a sponsor has on gaining a return on their investment as opposed to a loss.

As an investor, it is to your advantage to efficiently study each and every business in which you propose to hold stocks. The more facts you know about any certain business, the easier it is to make a plausible decision as to whether you should hold stocks or want a different business in which to work with.

Try searching for a particular keyword from the title of this article on your search engine and you are sure to find a wealth of knowledge.

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When To Buy Shares Or Trade The Forex For Maximum Profits

When To Buy Shares Or Trade The Forex For Maximum Profits

Ideally, you buy stock or currencies at its lowest price and sell at its highest.

Practically speaking, you do the best you can between these unpredictable extremes.

For, as you will see, the low does not become apparent until your stock begins to rise above it, the high is not established until your stock begins to drop away.

Although all of us could wish it otherwise, no bells, no flashing lights, no 21-gun salutes ever mark the bottom or the top.

Timing your stock transactions, therefore, is perhaps the most delicate element of investment, the decision requiring the keenest judgment and the surest touch. Experience helps, although success is not necessarily proportional to it. Veterans of the market, men who have been buying and selling for 30 or 40 years, sometimes seem to have a sixth sense about turning points, up or down, for individual stocks, or industrial groups, or the market as a whole.

On what seems to be no discernible evidence, they will mutter, “Well, I think the market’s going to fall out of bed,” and, sure enough, within a week there is a 9 or 10 point reaction. Yet newcomers may also acquire this skill with surprising speed.

Since judgment is a subjective quality, there are no firm rules for applying it. But there are generalities that can begin to define objectives and delimit areas of choice. And there are a number of techniques which attempt, more or less successfully, to better the average results obtained from trying to calculate timing arbitrarily.

Most professionals will tell you, right off, not to try for the extremes. The surest way to miss tops or bottoms is to wait for that last extra point of gain, that one more point of drop. Usually, an investor is considered to have done very well if he buys or sells within 5 points of the limit on a moderate-to-wide swing, within a point or two over a narrow range.

Another way of looking at the ideal objective is to reverse it: try to avoid selling at the low or buying at the top. This may seem to be superfluous advice, but both have happened many times when emotion entered heavily into judgment. Buying near or at the top is a temptation when a stock has been rising swiftly and steadily and the investor is eager to get aboard. The top, after all, is only relative.

New tops may be within reach which will make the current one seem a reasonable buying level. Selling near or at a low is tempting when a stock has slid downward and the holder has become disenchanted with it. The impulse is to sell out, take the loss, avoid further trouble, and be well rid of the dog.

The correctness of these decisions cannot be judged in the abstract. They depend, first, on your objectives (See Chapter 3) and on how closely or satisfactorily you have realized them. And they depend on your analysis of the several dimensions of highness and lowness involved.

Buying for income is relatively easy. The indicated dividend divided by the current price will give the yield in percentage terms. If the yield suits you, and investigation suggests that it is likely to be maintained, the price is right, whether it is in the high, middle, or low range for the year.

The problem of the buyer-for-income in recent years, of course, has been the fact that a rising market has reduced yields to some very uninspiring levels. The average yield of 10 big oils in the first quarter of 1959 was 3 per cent. For five chemicals it was 2.24 per cent. For seven steels it was 3.85 per cent. Only the better railroads were around 5 per cent, as a group.

Strictly on an income basis, the investor would do better at the savings bank than in oils and chemicals, and might be considered to have missed his market in these categories. The choice then is whether to argue himself into accepting 3 or 3.5 per cent (or 2.2 if he wants G.E., 1.5 if he wants Dow) in a sought-after category, whether to switch categories, or whether to ignore the market until conditions are more to his liking. There may also be a temptation to jump into a stock that for some reason is still yielding 5 or 6 per cent, although it would be foolish to do so without determining why it has maintained a high price/dividend relationship when everything else is low.

If the objective is capital gain, timing becomes more crucial. Somehow you must determine how many more points above the current price your stock is likely to go, and whether this will be a satisfactory profit, considering that possibly 25 per cent of it will go for taxes.

All rises must be predicated on earnings, or the expectation of earnings. Take, for instance, a stock selling at 50 and paying . This is a 4 per cent yield, which, we’ll say, is about average for this market this year.

Now, news gets out that it is possible that the company will earn per share by year’s end. Since a 50-per cent payout is the general practice, a dividend rise to is indicated.

Naturally, there will be a small rush toward the stock and a rise in the market price, probably to 75, or the new equivalent of 4 per cent.

This is the simplest sort of cause-and-effect relationship, so simple, in fact, that it practically never happens just this way. If prices reacted exclusively on good or bad dividend news or expectations, the market would be far more static than it is. Still, earnings and the benefits there from that shower down on the stockholder are the basic premise of stock activity.

The biggest complicating factor is the general absence of hard information. It’s rare that a jump in earnings can be positively pin-pointed, or pin-pointed before a market rise has taken effect. As a result, most investors have to contend with a vast range of other investors’ hopes, guesses, anticipations, and facts.

Furthermore, the stocks believed to have the greatest potential for growth usually vary the general pattern. The Dows, Minneapolis Honeywells, Owens-Cornings, and Minnesota Minings have long since been pushed to levels where their dividend returns are virtually meaningless, and where perhaps even their growth potential has been completely discounted.

Still, these extremities were more marked when stocks generally were yielding 5 and 6 per cent. Now that so many yield 3 and under, the growth specials do not seem so unreasonable at less than 2.

If you are trading shares or Forex you can also benefit from software that can help you time your purchases and sales for maximum profit.

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The Secret Of Shares And Forex Clubs That Can Help You Succeed

The Secret Of Shares And Forex Clubs That Can Help You Succeed

By pooling your investment you will have more protection when your investment depreciates and you stand to gain more when it appreciates.

One of the secrets of pooled investment is that you will also gain a significant amount of knowledge. This will help to steer you on your way to success.

Most clubs are less than three years old, and that nine out of ten have a portfolio valued at less than ,000.

No concerted organizational or promotional effort One of the astonishing developments in stock ownership in the past 10 years has been the wildfire spread of investment clubs throughout the nation.

A New York Stock Exchange survey indicates that there are at least 20,000 clubs in existence, with a total membership of more than 277,000 people—and that more are forming, at a phenomenal rate, every day. The market value of the clubs’ holdings tops 0 million and they are pouring million of new investment into the market each month.

All this is the more remarkable when it is considered has created these clubs. They have sprung up spontaneously as the realization has spread that here is a device enabling people of modest means to educate themselves about investment and to acquire stock in an orderly, consistent, and intelligent manner.

In outline, a club’s members meet regularly, contribute funds equally, study investment possibilities carefully, and agree jointly on shares to be purchased or sold. The unique features of this procedure are, first, that by responsible group effort the members can learn the complexities of investment and, second, that by aggregating funds they can acquire stock with individual contributions even smaller than the Monthly Investment Plan minimum.

Most clubs are composed of neighbourhood friends or business associates. Sometimes they are employees of the same firm, sometimes members of a fraternal or religious group. The majority of clubs have all-male memberships, although some 3,800 include women, and something over 2,000 are exclusively for the ladies.

A group of policemen form the New York’s Finest Investment Club. A group of Maine business¬men, who have been long-time hunting companions, are now stalking profits as the Katahdin Investors Club. Some avid bridge players have become the Bridge Investors Club; the Johns-Manville Club is made up of J-M employees. Essentially, these alignments assure a pleasant social atmosphere and economic compatibility, so that everyone can contribute equally to the club’s program without strain.

The average club membership is 15, a few number 20. Many clubs start with six or eight, and grow as interest is aroused. Experience indicates that 12 to 15 members are best able to conduct the business of the club. Beyond that number, things get somewhat bulky and unmanageable.

It can be extremely helpful to have a lawyer, accountant, and/or banker among the members. This is not always possible, and many clubs are operating successfully without them, but if they are not members, they should be within hailing distance to give professional advice on legal and tax matters, where necessary.

Clubs should also establish an account with a brokerage and get to know the customer’s representative who is handling it. He can be a source of much useful information on the new and unfamiliar field the club is entering.

Many brokerage houses are happy to have representatives attend occasional club meetings to explain brokerage and market operations, security analysis, and economic trends.

With membership established, the club’s next step is to agree on objectives and procedures: How often shall it meet? How much shall each member contribute? How should stocks be selected? What should be done with dividends?

Clubs ordinarily meet once a month. Meeting less frequently than that slows activity to an unsatisfactory pace, more frequently places a greater demand on the members’ time than the funds involved warrant.

The usual investment is per person per month, although this depends entirely on the group’s level of income. Some clubs set the ante as high as 0 per month. Less than , of course, does not give the club much capital to work with, and will probably make progress seem discouragingly slow. More than makes it possible for a member to set up an individual MIP, and at 0 an investor could deal directly with a broker from time to time. In these latter instances, however, diversification would be harder to achieve and, of course, the burden of stock selection would be on the individual rather than decided by the shared wisdom of the group. It appears that most individuals find the club experience a good training ground in investment and that, after they learn their way around, some 40 per cent of them feel well enough oriented to open personal accounts.

Investments of to a month for groups of 10 to 15 people mean a fund of from 0 to 0, not an overwhelming amount, but enough to buy 10-share blocks at 30 or 5-share units at 60. The average club investment is about 0 a month.

Whatever the amount, most clubs feel that it is absolutely essential that all members invest equally. If individuals are allowed to have two or more memberships, or to invest twice or three times as much as the others, it will also be necessary to give them two or three votes in club affairs, thus unbalancing the share-and-share-alike mutuality which is basic to successful operation of this kind of organization. Twice as much money is not automatically a guarantee of twice as much good sense when the votes on investment are cast.

In selecting stocks for investment, procedures are as various as the ingenuity of the club permits. Some clubs start by accumulating shares of the company the members work for, or a company active in the area whose personnel and operations are known to the club.

Other clubs undertake a study of a different industry each month and then, perhaps, appoint a committee of several members to report on companies within the industry. Some clubs arrange visits to company headquarters, or branches, in their vicinity. They inspect oil fields, mines, mills, and manufacturing facilities. All of this, of course, is rudimentary, but it is the beginning of understanding and evaluation.

For the rest, it depends on the club’s objectives. Like you, it must decide whether to try for growth, dividends, or stability, whether it is in for a quick profit or for long term appreciation.

There are some Forex investment clubs that you can join by searching the internet that help to pool investors money.

It is well worth using Forex software to help you perform well when you trade on the Forex.

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Trading In Forex Will Soon Be Just As Popular As Shares

Trading In Forex Will Soon Be Just As Popular As Shares

Shares are now owned by millions of ordinary people worldwide.

By 1956, 37 million families owned automobiles a rise of 61 per cent in eight years. By 1956, 37 million married couples were living in their own households—an increase of 28 per cent over the total of ten years before. The ,000-a-year income, that mystical dividing line between scraping and comfort, had been achieved by 23 million families or individuals a jump of 153 per cent in ten years.

Inflation, subtle and invisible, had also set in and had begun to erode the value of a dollar. Yet it was not the catastrophic, runaway inflation of Germany in the Twenties, but a benign, “creeping” inflation the kind of mild stomach distress that accompanies rich living. Prices have risen inexorably. The generation of war babies is growing up in a world of ,000 cars, ,000 houses, theater tickets, books, 28-cent milk, and suits. A nickel buys almost nothing. Even the candy bar has jumped 20 per cent to six cents—and a mighty small candy bar it is, too.

The end is not yet. The Sixties are here, and it may be it could be that the shooting pains of inflation will be diagnosed as ulcerous. But for the present, the vigor of the economy seems generally to be overcoming the drags and resistances.

People have not only been spending more, but saving more. “Discretionary income,” that pleasant bulge over and beyond the budget for necessities, is at the command of most families. Consumer credit, which in the past has expanded dangerously beyond people’s ability to pay, has reached astronomic heights with an astonishingly low percentage of defaults.

The enormous and unremitting flow of dollars into the market place has returned unexampled profits to industry. Corporations have assiduously strengthened their underpinning, invested hugely in research, laid away cash surpluses, and still distributed the highest dividend totals in history.

The combination of these forces and these events and of many others, as well—has been faithfully noted by the stock market. It has surged upward strongly, scaling peaks like a mountain goat, past the frayed rope ends and broken ice axes marking the high point of 1929, and into the rarefied atmosphere beyond. As noted, about 12,500,000 people are making the trip.

Who are these people and what do they want? They are, for the most part, plain old American citizens who want a piece of the American future. They work, they earn, they put something by, and they believe they know a solid, reasonably safe, capitalistic investment when they see one. For nearly fifteen years, American business has been doing handsomely, as anyone with half an eye can tell. It’s a meager little town that hasn’t acquired an assembly plant, a parts depot, a retail outlet, a branch sales office, or some other piece of one industrial complex or another in the past decade. There is a fine glow of prosperity about these places, and if you can’t see it, your local friends who work there will be happy to tell you about it.

What doesn’t pop up under one’s nose is in the air. Never has industry seemed so glamorous. This is not to say that strikes and unemployment and other stubborn problems of the capitalistic pattern have been eliminated, but that there is a new gloss and glitter to industry’s ability to perform and produce. The accelerated technology of the postwar period has plunged stodgy old business into the frontiers of the universe. Missiles, rockets, electronic miracles of a thousand kinds are now meat-and-potatoes business not only for established giants like General Electric but for fresh young sprouts like Texas Instruments, Tracerlab, Ampex, Polaroid, and many other fast-growing corporations.

Ordinarily, such excitement would be noted almost exclusively by business and financial publications, except for the occasional rocket whose manufacturer’s name makes the front page of the paper. But through television, industry is now in every home. Not alone to sell foods, drugs, cosmetics, cigarettes, and appliances; radio had and has plenty to say about these, too. But to sell industry itself its resourcefulness, its inventiveness, its enormous concern with creature comforts and with national welfare. With tremendous visual impact, the institutional commercials of Westinghouse, U.S. Steel, duPont, Alcoa, and the rest are telling the success story of American business for all to hear.

Two prime requisites of an active stock market are hereby established. Across the country, people with “discretionary income” are becoming acquainted with the sweet smell of corporate success. There are buyers and something to buy they can easily buys shares or unit trusts and a lot of people are also investing on Forex.

As computers became more intelligent they can predict future price movements and take a lot of the risk out of Forex trading.

Soon Forex trading could be just as prevalent as owning stocks and shares.

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