Thursday, December 22nd, 2011
During the great bull runs of the past two decades, finding value on Wall Street was child’s play. Novice investors struck gold day trading, and fund managers reaped huge returns at practically every turn.
But since the stock market’s 2008-09 meltdown, value investing has been no easy chore. Yet that hasn’t stopped the dedicated from scouring the world for the next big thing.
Value investors typically try to look beyond the markets’ daily ups and downs. Instead, they focus on fundamentals such as price-to-book and price-to-earnings ratios to ascribe value.
In most cases, value investors try to use their research to identify stocks whose book values exceed market valuations (more…)
Tags: contrarian, STOCK MARKET, stocks, value investing
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Saturday, December 10th, 2011
Call them prophets of gloom or the doomsday peddlers. Or, if you prefer, just go ahead and lump them all together into some even larger force that sounds darker and more conspiratorial: The Economic Cassandra Complex.
If you spend much time watching financial-news channels or surfing the Web for investment and economic advice, you know who they are: The Doomsayers. They might be urging you to dump your stocks, buy government bonds, hoard gold, brace for the “Greater Depression” by going into survivalist mode or simply to curl up under your desks to take cover from a sky that is perpetually falling.
Their voices grew ever louder over the past year, amplified by the ongoing realities of a “jobless recovery,” a sputtering stock market and nagging fears of a double-dip recession. (more…)
Tags: doomsayers, doomsday, double-dip recession, INVESTING, prophets of gloom, STOCK MARKET
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Friday, November 4th, 2011
Recent volatility in the stock market has dampened interest among many investors in initial public offerings of stock. But online coupon company Groupon has renewed interest in IPOs. As we post this story on Friday (11/4), Groupon has just offered its IPO. And despite some analysts’ gloomy reports on the company, this IPO has attracted lots of interest: Groupon’s stock jumped $9.52 to $29.52 in the first few hours after its IPO debuted.
But is an IPO a good opportunity for you?
The answer may not be instantly clear. (more…)
Tags: initial public offerings, INVESTING, IPO, STOCK MARKET, stocks
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Sunday, October 16th, 2011
With the stock market surging wildly up and down, many investors have been scared away from equities. But for most investors, a complete retreat from stocks is not the best move. What might make more sense is to rebalance your portfolio toward low-volatility stocks.
As The Wall Street Journal recently reported, the Standard & Poor’s Low Volatility Index, a portfolio of the 100 least-volatile stocks in the S&P 500 stock index, lost just 1.1 percent, compared with a 9.8 percent drop for the S&P 500 overall (more…)
Tags: beta, exchange traded funds, INVESTING, low volatility, S&P, STOCK MARKET, stocks
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Wednesday, October 12th, 2011
Recent dramatic fluctuations in the stock market have intensified the temptation to do something—anything—to avoid risk, to capitalize on what’s hot.
To change.
And there’s nothing wrong with change, in and of itself. Sometimes change is warranted. We all want to continue to get better at picking winning stocks or bonds, exchange-traded funds or commodities. But sometimes this urge to change should be resisted. (more…)
Tags: change, INVESTING, investing strategy, STOCK MARKET
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Wednesday, October 5th, 2011
Mutual funds can provide a good way to diversify your portfolio and protect you from the risk of investing in a specific stock. But how do you sort through the thousands of funds that are out there to find the right ones for you?
Here are some principles to consider.
1. Mutual funds can be made up of stocks or bonds. (more…)
Tags: INVESTING, large cap, mutual funds, S&P 500 Index, small cap, STOCK MARKET
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Friday, August 19th, 2011
Warren Buffett is arguably the world’s most revered investor. Millions around the world follow his every word hoping to gain wisdom in investing.
Buffett himself heavily relies on the ideas of Benjamin Graham, the father of “value investing.” One of the core ideas of “value investing” is known as the margin of safety.
The margin of safety calls on an investor to purchase securities only when the market price is significantly below its intrinsic value. (more…)
Tags: INVESTING, margin of safety, STOCK MARKET, value investing, Warren Buffett
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Tuesday, August 9th, 2011
Accelerating fears of a new global recession sent the Dow Jones Industrial Average plummeting more than 634 points Monday (8/8) — wiping out $1 trillion in market value.
The massive stampede out of stocks, the second plunge of more than 50 points in the last three trading days, was fueled in large part by reaction to the U.S. credit rating downgrade. The sell-off threatened to further sap confidence in the faltering U.S. economy, giving businesses and consumers another reason to cut back on spending, (more…)
Tags: credit rating, debt, INVESTING, Standard & Poor's, STOCK MARKET, stocks
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Tuesday, July 19th, 2011
The stock market’s volatility over the past few years has frightened many investors, and some have left the market for good. If you’re worried about the market but not yet ready to abandon it, perhaps it’s time to consider exchange-traded funds, or ETFs.
ETFs look like mutual funds but behave like stocks. And they are tailored to the small investor in that they offer low cost and quick diversification. You can buy as little as one share, unlike mutual funds which often require an initial investment of $3,000 or more.
ETFs mirror an index and don’t require a manager, so fees are usually quite small. (more…)
Tags: exchange traded funds, INVESTING, STOCK MARKET
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Saturday, July 2nd, 2011
All the major stock-market indices just finished their best week of gains (6/27-7/1) in two years, shaking off two months of softness in which investors fretted over the sluggish recovery, Greece’s debt troubles and the approaching end of the Federal Reserve’s $600 billion bond-buying program known as QE2, which concluded Thursday.
“The drivers [of the week’s advance] were end-of-quarter window dressing by managers wanting to look good, coupled to corporate-stock buybacks with a little dumb money thrown in for good measure,” Steven Evanson, president of Evanson Asset Management, told MarketWatch.com. (more…)
Tags: STOCK MARKET
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