Five Biggest Stock Market Myths

Posted on 12.15.06 by StockPK Team @ 2:43 am    

When fiascos like the Enron bankruptcy, auditing scandals and analysts’ conflict of interest occur, investor confidence can be at an all-time low. Many investors are wonder whether or not investing in stocks is worth all the hassle. At the same time, however, it’s important to keep a realistic view of the stock market. Regardless of the real problems, common myths about the stock market often arise. Here we go over these myths in order to bust them.

Is Your Dividend At Risk?

Posted on 12.11.06 by StockPK Team @ 11:00 am    

Dividend cuts can surprise investors, even the big players. But that doesn’t mean it’s impossible to know ahead of time whether your dividend is at risk of being reduced. There are several factors that can indicate how safe your dividend income is.

Unlike safe investments such as bank deposits or Treasury bonds, dividends are not guaranteed. If a company runs into a cash crunch, cutting or eliminating dividend payment is one way it can try to save itself, but such action can send the wrong signals to the market. Even safe-haven companies can become dividend investment sinkholes.

Understanding Rights Issues

Posted on 12.08.06 by StockPK Team @ 1:00 pm    

Cash-strapped companies can turn to rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders a chance to buy new shares at a discount to the current trading price. Let’s look at how rights issue work, and what they mean for all shareholders.

Defining a Rights Issue and Why It’s Used

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called “rights”, which, well, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

The Get-Rich-Slow Scheme

Posted on 12.06.06 by StockPK Team @ 11:54 pm    

American society is more cutthroat than ever, and it takes not only great skill and smarts to get ahead, but often a willingness to cut corners, says David Callahan, a PhD and author of The Cheating Culture. “How do you get rich slow when you need $600,000 to buy an entry-level house in Westchester?” asks Callahan.

The truth is it’s a lot easier to get rich — and stay rich — today by going it slow rather than latching onto a get-rich-quick scheme. Best-seller lists are clogged with books that explain in great detail how to Start Late, Finish Rich, or become The Millionaire Next Door. But much of the advice boils down to some pretty simple rules to live by. Here are five steps to slowly gaining the kind of financial security most people only dream of:

Betting the Ranch: Risking Your Home to Buy Securities

Posted on 12.04.06 by StockPK Team @ 11:37 pm    

With a rising stock market, record low interest rates, and large gains in home value, some investors have taken out new mortgages, refinanced, or obtained line-of-credits secured by their homes for the specific purpose of investing in securities. The hope is that the investment will not only pay the mortgage, but also generate additional income. Unfortunately, it doesn’t always work out that way.

Investors who must rely on investment returns to make their mortgage payments could end up defaulting on their home loans if their investments decline and they are unable to meet their monthly mortgage payments. In short, investors who bet the ranch could lose it.

Trading Is Not Rocket Science!

Posted on 12.01.06 by StockPK Team @ 1:04 pm    

Despite what some people may lead you to believe; day trading, swing trading and trend trading is not anywhere as difficult as they would like you to think. It really boils down to two key components.

First, you have to have an approach that helps you identify trades that have a consistently high probability of making money. Once you have this you must exploit this “edge” over and over again.

The only way to do this is to use the necessary discipline to never deviate from your system. The minute you start tinkering or tweaking things is when you will lose your edge!!!

Measuring Company Efficiency

Posted on 11.30.06 by StockPK Team @ 1:09 pm    

Analyzing a company’s inventories and receivables is a reliable means of helping to determine whether it is a good investment play or not. Companies stay efficient and competitive by keeping inventory levels down and speeding up collection of what they are owed. In this article, we’ll take you through the process step by step.

Getting Goods Off the Shelf

As an investor, you want to know if a company has too much money tied up in its inventory. Companies have limited funds available to invest in inventory - they can’t stock a lifetime supply of every item. To generate the cash to pay bills and return a profit, they must sell the merchandise they have purchased from suppliers. Inventory turnover measures how quickly the company is moving merchandise through the warehouse to customers.

Investing: The Art Of Making Your Money Work For You

Posted on 11.28.06 by StockPK Team @ 5:57 pm    

There is a lot to know about investing. It all depends on what type of investing you are interested in as well. There are many different types of investment options out there. So what is investing, specifically?

Digging Deeper: The Mutual-Fund Prospectus

Posted on 11.27.06 by StockPK Team @ 12:59 am    

As a mutual-fund investor, you’ve probably heard over and over again that you should always consult a mutual fund’s prospectus before handing over your money. It’s also no secret, however, that the size of this document and the type of information inside can be hard to tackle. But don’t be too overwhelmed. Here is a guide to what a prospectus is, why it is important and what items should be central to your considerations.

The Secret of Reduced Margin Spreads

Posted on 11.19.06 by StockPK Team @ 11:00 am    

One of the best kept secrets in trading is that of reduced margin spreads. You cannot name a trading method that provides more safety or a greater return on margin than does a reduced margin spread, while also being one of the least time- consuming ways to trade. Have you ever asked yourself why it is that many of the largest, most powerful traders trade spreads? I’m going to show you why!

WHAT IS A REDUCED MARGIN SPREAD?