How does Efficient Market Account for Fear, Greed and Risk Taking?In the last decade we have endured a number of market bubbles ending in catastrophic losses for investors and bankruptcy for more than a few corporations. In the Efficient Market world, all securities are priced, or discounted to their exact and correct price because investors are rational, and can take into consideration all known information about the security, and thus price...more
ES Emini Day Trading: Setting Profit Limits and Loss Limits a Good IdeaThis particular topic is one that is sure to stir up some traders, and rightfully so. The question is a simple one, really, and I am asking whether you should stop trading when you hit a pre-set profit goal. The argument is a tough one to respond to, and I suspect that as I get older I am getting more conservative.Here is a fact about my trading: When I am between...more
Many people want to play on the stock market in hopes of making the magical selection that will provide them with lots of disposable income and make all their dreams come true. Although it might seem like the stock market is a place where you get thousands of dollars in return for a small investment, there are actually a lot of very complex processes and equations that go into determining who makes money, and who does not. More often than not, naive investors will sink all their money into one prospect only to have it shudder and die within a few months. Not all investing is created equal, and if you want the best dividends, you need to understand how the process works and what to look out for. The first thing to understand is exactly what dividends are. When a company goes public and starts to trade its stock on the big boards, they begin to take on public shareholders. These shareholders can be investment firms, banks, or normal people that are interested in gaining something back on their money. In a certain sense, these people become partial owners of the company, and when the company does well, it usually rewards them for their initial investment. When a successful company...more
These days it seems like everyone is worried about their financial stability, and whether their savings are safe and sound. In the past few years, many people have seen market changes and economic instability affect their savings accounts and retirement funds, and it can be very disheartening to learn that all of the money you worked so hard to put...more
Many people are looking for a safe way to invest their money that will allow them to supplement their income or save for retirement. No matter what you want the end result of your investing to be, it is important that you proceed carefully, and fully understand the risks and benefits of the stocks you're interested in, and the potential successes...more
Gold has had a tremendous year. The flight to the perceived safety of gold, as well as the US Dollar weakness, has pushed the metal straight through the $1,000 per ounce mark and up to $1,200.However, it has not been a smooth upward journey. Investors should be aware that 'pull backs' in gold can be very violent indeed. We have had two major retracements in the last four years from fast rallies. Both of these finally ran out of steam but not before wiping out at least 25% of the price. If the same were to happen this time, Gold would slip towards the $900 mark.The acceleration of the gold market towards the end of 2009 was remarkably similar to the March/May move of 2006 and Oct/March 2007/2008. Both of these rallies saw sharp pull backs before regaining the upward momentum. The current target for the more aggressive gold bulls remains $1400. This level is a good deal closer now than when it was first mentioned by certain analysts. Having said this, it must be mentioned that Gold is having problems getting to $1,400.As it turns out, the problems concerning Dubai presented a massive buying opportunity. Of course, Dubai did give us the lesson that the markets are prone to sharp...more
In the UK, many investors like to trade the movement of the FTSE 100. Looking more closely it appears that the sellers are still waiting for the blowout move to the upside that might signal the final exhaustion move. Since March 2009 the moves higher...more
As the major economies start to stabilise and the risk of a depression thankfully fades into the distance many people are reflecting on a few important points. Firstly, how did it all happen? Secondly, how can they better protect themselves in the...more
Stock options are hot topic for every institutional investors and individuals who are trying to chase a good and positive results in stock market. On the contrary, option trading may not be applicable to everyone. You may not be capable of it. Assess...more
Some companies prefer to go public by doing a reverse merger. This means that, in the long run if you have a privately held company, that you can merge it with a publicly held company that will be referred to as a shell. In other words, this shell...more
Should I rollover my 401(k) or 403(b) into an IRA?If you wonder what to do with the 401(k) or 403(b) you will end up with because you're leaving your employer, consider all your options so you can make a decision that fits your circumstances....more
Online share trading has caught up with many, and people have taken it up seriously, either as a hobby or as a career. It is infact an incredible way of investing money and puts you into a position of control. However, like any other business, online...more