Death of bin Laden — How Will Markets React?

Monday, May 2nd, 2011

Stock-index futures were higher ahead of Monday’s (5/2) market opening, and commodity prices dipped in the wake of the confirmed death of terror leader Osama bin Laden in a U.S. military special-operations raid. Stocks were modestly higher just after the opening bell as analysts predicted a “feel-good rally” would permeate market sentiment for at least the short term.

Just after the closing bell of the New York Stock Exchange, however, all major stock indices were modestly lower as was crude oil, while precious metals were down sharply for the day.

But what about the longer term? (more…)

The Ups and Downs of Investing in Bonds

Friday, April 8th, 2011

Most anyone who holds bonds can tell you: As the stock market improves, life gets tougher for bond holders. An improving economy generally leads to higher interest rates, and that means lower bond prices.

If you look at the economy now, corporate earnings are strong and even unemployment is improving. So, many analysts suggest that investors should consider increasing the proportion of stocks to bonds in their portfolios.

Consider that many American companies and corporations have accumulated lots of cash, which makes their bond holders feel secure. With the economy looking up, however, (more…)

Trailing Stops, Protective Puts Help Protect Against Market Losses

Wednesday, March 16th, 2011

Don’t give back your hard-earned market gains! Managing the risk of loss is imperative for any savvy investor. Many investors use trailing stop-loss techniques as a risk-management tool. Other investors employ protective put options to insure against a sudden drop in the price of your stock. How does an investor decide which risk-management strategy to use?

It is helpful to understand the characteristics of each approach. Investopedia.com has a thorough treatment of the subject on its website. WEALTH has excerpted from that here:

A trailing stop adjusts the stop price at a fixed percent or number of points below the market price of a stock. (more…)

Weekly Options: A Flexible Way To Maximize Leverage

Wednesday, January 19th, 2011

Standard options — whether on individual equities, stock indices or other instruments — have long offered a more flexible, and potentially more l way to invest. But a relatively recent product called Weekly Options, or “Weeklies,” gives investors an even more efficient way to use leverage and target profits.

Weekly options have the same terms as standard options, except they expire every Friday instead of every third Friday.

In other words, you can now trade options on a select group of underlying assets that have expiration dates every week of the year. To be precise, they’re first listed on Thursday of each week and expire at the close of trading on Friday of the following week (adjusted for holidays). (more…)

Commodities, Weather, NIKE Hint at Market Trends

Monday, January 10th, 2011

 Stocks, as measured by the Dow Jones Industrial Average and the Standard & Poor’s 500 Index, have been trending gently upward in the last three weeks, including the traditionally slow trading sessions from just before Christmas to New Year’s. This notwithstanding Monday’s (1/10) modest burp.

Commodities were a mixed bag in that period as gold fell, crude oil jumped out to a new two-year high, and the grains rose to a one-year high as well, led by corn. But the new star of the show for commodities is sugar, which stormed out to a new high after word that a cold front had virtually wiped out Florida’s sugar cane crop, which is the largest in the United States. (more…)

Stock Market Wows Us! Still Room to Run?

Thursday, November 4th, 2010

The bears took a beating last Thursday (11/4) in covering their short sales to help propel the three major stock indices to two-year highs. Also adding fuel to the bullish fires was President Obama’s suggestion that he’ll consider extending all of the Bush tax cuts, including those for the wealthiest Americans, which he had balked on before. As Larry Kudlow pointed out on CNBC Thursday evening, this removes what would have been great incentive for investors to sell equities by the end of this year to avoid a feared tax hit. (more…)

Creating Your Own Investment Strategy

Thursday, November 4th, 2010

So you are an investor or have decided you will become one. How do you develop a solid investment strategy?

First, determine your goals. Then, establish how much time and money you have to invest. Finally, choose a mix of investment products that fit your situation.

Your Goals

Of course, every investor wants to earn money. But you must force yourself to be specific. How much money do you want to earn? How soon will you need those funds and for what purposes? (more…)

Write Covered Calls to Boost Your Stocks’ Profits

Saturday, October 2nd, 2010

Owning stock that you think is headed for the heavens is good, right? Well, yeah, we all love that.

 How about owning stock that may rise just a little—but let someone pay you a fee in return for your agreeing to sell them the shares at a modest profit? And perhaps doing this again and again, month after month, until—oh, either you get tired of making money, or the stock runs out of room to run?

Educated investors, including graduates of Wealth Magazine Investor Education, know this easy-to-use tactic to be writing covered calls. (more…)

Getting Ready for Retirement—What You Need to Do

Wednesday, September 22nd, 2010

Your initial reaction may be: Retirement? I’m YEARS away from retirement. I don’t have to think about that now.

Think again.

If you’re more than a decade away from retirement, now is the best time to begin preparing. Younger workers, of course, can use the power of compound interest to ensure a smooth financial picture in retirement. (more…)

Retirement Savings–Are You in the $6.6 Trillion Hole?

Tuesday, September 21st, 2010

Americans are a staggering $6.6 trillion shy of the savings they need for retirement. That’s the figure arrived at by Boston College’s Center for Retirement Research in a report published Monday, Sept. 20, 2010.

To get there, the researchers made an interesting and highly optimistic set of assumptions: All retirees will take out a reverse mortgage. And they’ll put (more…)