Stock Market Investors » Investing in Stocks and Bonds

Investing in Stocks and Bonds - Articles

The Pros and Cons of Exchange-Traded Funds

Exchange-traded funds have unique features that distinguish them from other investment companies of the open-ended or UIT type.

Investing in Equity-Indexed Annuities Explained

Equity-indexed annuities are perhaps some of the most complex investment vehicles and as with any other investment, there are risks involved. Therefore, educate yourself well in order to make money out of investing in equity indexed annuities.

What Investors Need to Know about Arbitration

Before filing an arbitration claim against your brokerage firm, read this article - it will teach you the pros and cons of arbitration and the basic steps of initiating an arbitration procedure.

The T+3 Cycle Rule in Securities Trading

The T+3 cycle is the period within which an investor must settle his obligations with the brokerage firm that facilitated the trade. Learn the 4 things you should know about the T+3 Cycle Rule.

Bond Funds Safety

A common misconception among many investors is that bond funds present little or no risk. However, bond funds are also subject to a number of investment risks.

Understanding Mutual Companies

There are many banks, savings associations and insurance companies in the U.S. that are organized as mutual companies.

Direct Stock Purchase Plans

A lot of companies let investors buy stock directly from them through the company’s direct stock purchase plans. In this article you will learn more about the direct stock plans.

Convertible Securities: Convertible Bonds Explained

Know more about convertible bonds: generally, a convertible bond provides its holder with the option to convert the bond into a predetermined number of shares of stock in the issuing company.

Introduction to Microcap Stocks

Before you consider investing in microcap stocks, gather as much information as possible. This article will try to get you familiar with at least the basics of micro cap stocks.

Holding Your Securities: Direct Registration

Holding a security can be done in three ways - getting a physical certificate, registration in Street Name, and direct registration. In this article we will examine in greater details the direct registration option.

Holding Your Securities: Street Name Registration

Investors can choose to hold their securities with a physical certificate, street name registration, or direct registration. This article will examine in further details the third option - street name registration.

Holding Your Securities: Physical Certificate

When it comes to holding securities individual investors have up to three choices - Physical Certificate, Street Name Registration, or Direct Registration. This article will present you the advantages and disadvantages of choosing a physical certificate.

Buying Stock on Margin

Investing on margin is a high-risk strategy that can yield huge profits or huge losses if you are not careful. This article will help you better understand buying stock on margin and the risks involved.

Technology Stock Characteristics

Technology stocks represent one of the most attractive investment solutions. However, technology stocks are not deprived of their drawbacks.

Foreign Stock Characteristics

In today’s global economy investors are given the opportunity to purchase stocks of foreign companies. Foreign stocks provide an additional piece of diversification to your portfolio.

Small Cap Stocks Characteristics

In order to classify a stock as of small cap character its market value should be below $1 billion. Small cap stocks are generally considered to be highly volatile and if market conditions are not stable, they can carry a high level of risk.

Large Cap Stock Characteristics

The biggest players in the stock market are companies that have large market capitalization. Due to their large market capitalizations, such companies tend to have a major influence over the economic activities.

Introduction to Stocks

Stock represents a piece of ownership of a particular company. Though stock investing carries a certain degree of risk, it can be very profitable for an educated investor.

Investing in REITs - Advantages and Disadvantages

REITs stand for Real Estate Investment Trusts. REITs are most often viewed as alternative to bonds and trade much like stocks on the major stock markets.

Time, Risk and Investment Goals

When you begin stock investing you should clearly determine your goals for doing so. However, you should expect that your goals and the risk you are willing to take change over time because your way of life changes as well.

Mega Cap Stocks in Your Investment Portfolio

If you expect that bad economic times are nearing you should make sure that you put mega cap stocks in your portfolio in order to benefit from the relative security provided.

Stock Portfolio Balance Maintenance Techniques

When you establish your investment portfolio you should balance it among the different asset classes. If you fail to do so you may expose yourself to higher levels of risk.

Government Deficit and Stock Investors

Is the government deficit good for stock investors or not? And how can investors determine the effect of such a deficit on their investing?

Earnings Reports and Their Importance

Every quarter companies issue a report on the earnings they have generated. The failure to meet the expectations of the market analysts may result in a fall of the stock price of the company.

Determining the Number of Stocks to be Included in Your Portfolio

The number of stocks an investor should own is determined mainly by the situation in which the investor is in.

The Importance of Portfolio Rebalance

In the course of investing the portfolio may go out of balance. If a significant change in your asset proportions has occurred take immediate actions in order not to expose yourself to higher level of risk than you can face.

Asset Allocation Basics

In order to protect your assets from sustaining losses when a sector suffers a decline you should practice asset allocation, meaning you spread your resources among different categories of investments.

Foreign Stocks Basics

As part of your investment portfolio you should not overlook foreign stocks. Depending on your conservativeness regarding investing include the appropriate percentage of foreign stocks in your portfolio.

Stock Value Focus

You should be aware that price and value are different concepts and they should not be confused. For investors value is what matters.

Identifying a Value Stock

If you are a value investor there are some important financial numbers and business fundamentals you should look at when examining a potential value candidate.

The Simplified US Tax Code Proposals

The Simplified Income Tax Plan has made some changes in the tax code that would have an influence on the investment decisions of investors.

Tax-Free Investments

There are some ways in which you can legally minimize the tax burden you have to carry when you make an investment. There are certain investments that free form taxes and this article aims to familiarize you with these options.

Value Stocks vs Growth Stocks

Growth and value stocks are commonly used terms related to stock investing. The following article provides clarification on the meaning and characteristics of these stocks so that you are facilitated in your choice of each of them.

Relative Strength Indicator

Relative strength represents an indicator that assists investors in their stock picking. Additionally, it helps them evaluate the investments they hold relative to other investments.

Calculate Return on Investment

In order to better understand the return you get from your stocks, you need to master several formulas. The formulas will help you calculate the returns on your investment.

Price to Earnings Ratio Calculation

When evaluating a stock, most investors refer to the Price to Earnings (P/E) ratio in order to make more reasonable investment decisions. It is the ratio most often used by investor when it comes to evaluating stocks.

Price to Sales Ratio Calculation

Evaluating the stocks of a particular company is required before you jump with both legs into investing with it. The Price to Sales (P/S) ratio comes to assistance when you need a measurement of the worthiness of young companies just coming on the market .

Determining the Right Stock Price

Many times the market doesn’t price a stock in a realistic way. One way to find whether the market has undervalued or overvalued a particular stock is by using the price/sales ratio.

Company Valuation Methods - Debt Evaluation Formulas

When evaluating the possibility of purchasing a particular stock, debt of the company may represent a factor that can influence your decision.

Company Valuation Methods - Management Effectiveness Ratios

Before you purchase a stock, you should make an evaluation of it using many different criteria. One of them concerns the management of the company and its way of using the company’s resources.

Company Valuation Methods - Debt Evaluating

One of the factors you should consider when evaluating a stock is interest rates. This is especially important if the company from which you possess stocks has a debt which it should cover.

Price to Cash Flow Ratio vs Free Cash Flow

Both free cash flow and price to cash flow ratio present a useful way to find out the valuation the market assigns to the stocks of a particular company.

Simple Return vs Compound Annual Growth Rate Formula

The simple return and compound annual growth rate formulas will help you calculate the returns on your investment. This will further facilitate the identification of your current position as compared to where you should be regarding your financial goals.

PEG Ratio Calculation

A major characteristic of the stock market is that it is directed toward the future performance and projections. Aside from the P/E for measuring the future earnings growth is the PEG ratio.

Earnings per Share EPS Calculation

When deciding on the investment in certain stocks, many times investors are facing the challenge of comparing stocks from different industries and types. A useful tool for comparison can be earnings per share or EPS.

Return on Equity Calculation and Drawbacks

A measurement for evaluating the efficient use of resources by a company in producing earnings for its shareholders is the Return on Equity (ROE). Many investors successfully apply ROE as a tool for finding competitively advantageous companies.

Price to Book Ratio Calculation

Value investors search for companies that have been overlooked by the market. When deciding on a particular company, value investors look at such indicators as earnings growth, price to book ratio (P/B) and several others.

Dividend Payout Ratio Calculation

The meaning behind Dividend payout ratio (DPR) is the money that is paid out in the form of dividends by the company to its shareholders. Some financial experts say it is an important measurement, whereas others strongly disagree.

Dividend Yield Calculation and Drawbacks

In order to evaluate whether a particular stock represents a good investment in dividend terms, investors often use dividend yield as a measurement. It represents the percentage that the stock returns as compared to its price.

Long-Term Stock Investment vs Short-Term Trading

If you a long-term investor you should not pay attention to the pennies you can save from purchasing a particular stock. However, if you are trader interested in quick profit making every penny should matter.

Cyclical vs Non-Cyclical Stocks

In order to achieve a balanced portfolio of stocks both cyclical and non-cyclical stocks should be included. This should be done in order to be able to better face the changing cycles of the economy and the market as a whole.

Preferred Stocks Disadvantages

Despite their name, preferred stocks are less preferred than common stocks. So, unless you have firmly decided that a particular preferred stock exactly meets your financial goals, you should get familiar with their disadvantages.

Stock Basics

In order to get a clear view of how the stock market operates you should become familiar with the essence of stocks themselves.

Stocks and Inflation Rate

Inflation can eat up a substantial part of your earnings. So, whenever the levels of inflation go out of control you should be very careful about the negative impacts it may have on your investments.

Pick the Best Stock Type for You

Stocks carry their risks in terms of volatile prices, but over the long term they bring returns offered by no other investment solution and it is only a matter of the right stock pick for your needs.

Real Rate of Return on Investment Calculations

Everyone is interested in the real rate of return on the investments that have been made. However, many investors forget to adjust the rate to inflation and taxes, and as a result don't get real numbers.

Bond Default Risk

Even though they are characterized by high levels of security, bonds do bring their dangers and risk of bond default exists.

Types of Bonds

By definition, bonds represent a way for borrowing money from the public. Bonds are famous among investors for the high level of stability and security they offer.

US Treasury Bonds vs US Treasury Notes

While US treasuries are offered through qualified financial institutions or brokers, treasury notes are directly offered by the US Treasury at auctions.

Bond Tax Rules

Most financial advisors recommend the inclusion of bonds in every investment portfolio since they provide security in volatile market conditions. However, there are certain tax implications that you should keep in mind when you decide to purchase bonds.

Investing in Both Stocks and Bonds

Almost every financial expert recommends the inclusion of both stocks and bonds in investment portfolios. Since bonds are characterized by higher security, whereas stocks with higher volatility the first can be used as a tool to balance the negative effects of the latter.