Category Archives: Beginner Investor

Everything you need to know to start investing.

Three Pillars of the Economy – Jobs and Wages, Corporate Profits and Housing

We live in a world of numbers. No where is this more prevalent than on Wall Street. It seems that we have an index for just about everything. Trying to follow all this data is quite overwhelming. For this discussion we’ve chosen three areas for review. For investors, this is a thumbnail of the “big picture” of the US economy. They are Jobs and Wages, Corporate Profits and Housing.
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January 2015 – Turbulence Rules the Markets

Some market watchers hold that January sets the tone for the rest of the year. If this January is any indication we are in for a bumpy ride. The markets have reacted to cross winds both international and domestic.Continue Reading

Trading Woes on Black Thursday: January 15, 2015

Picture this. You are a very good trader, trading mainly with technical indicators. You use such tools as charts, Bollinger Bands, support and resistance, slow stochastic, money flow and several other indicators. These skills have served you well and you have a successful 10 year track record. You like the leverage of trading commodities and currencies. Currencies offer the greatest leverage, requiring only a 2% margin. That means that you put only $2.00 down for every $100 you trade. You are rather conservative and even though you have a $10,000 account you trade only $2,000. With a $2,000 margin at 2% you are controlling $100,000 of currencies. You are trading $2000 of EUR/CHF. Currencies are always spread trades. In this case you are buying the Euro (EUR and selling the Swiss Franc (CHF).Continue Reading

2015 – How is the World Doing?

It might be helpful to take a reading on various countries at the beginning of 2015 to help investors decide where to place their bets in the coming year. Some trends are affecting all major world economies while others are country specific.Continue Reading

Big Banks Win – Derivatives are Back

Once upon a time in the long ago we had banks that lent money to individuals and companies to expand and grow the economy. During the Great Depression lawmakers saw the need to rein in and regulate banks’ activities. The Glass Steagall Act of 1933 ruled that banks could not become involved in selling or trading securities. Separate Investment banks were organized that could underwrite and sell securities but they could not use depositor money.Continue Reading

Gold – The Long and Short of it.

It’s an understatement to say that gold is a mysterious commodity. There are wars in the Mid East and we have Russia and the United States verbally battling each other over Russia’s invasion of the Ukraine. The natural resource boom of 2011-12 is taking a breather, affecting the economies of Australia, Canada, South America and Africa. International conflicts usually drive investors to seek haven in precious metals. This time, however, they are running away from them with gold making new lows in the month of November. It is extremely difficult to make sense of these cross currents and come up with a rational sense of where gold is headed. A look at the fundamental and technical factors affecting gold trading will give us some insight about the market.Continue Reading

Market Volatility is Ramping Up-A Traders Game

Market Volatility is Ramping Up-A Traders GameContinue Reading

Investing in Human Genome Sequencing Companies

Medical technology is rapidly moving toward the development, treatment and cure of specific diseases or prolonged life treatments. These new drugs use human genome sequencing to determine a specific area of study. We often call these “designer drugs.”Continue Reading

Investors Look to Dow Transports for Growth and Dividends

With the media focused on Dow 17,000, we often overlook some promising investing opportunities in the Dow Transports. The Dow Jones Transportation Average was the first listing in 1884. It had nine railroad stocks in the index. The Dow Jones Industrial Average came later in 1896. Throughout the late 1800s and early 1900s, rail transportation dominated the way goods were shipped throughout the country. At one point in 1916, the US had 254,000 railroad lines. From then on railroads had to compete with trucks and air transportation and saw a loss of revenue and jobs. However, we are in the midst of a new revival of rail transportation with both ton miles shipped and net proceeds setting new records.Continue Reading

Investing in Small Cap Stocks

We have a group of stocks that we refer to as “Small Cap.” They are defined as having a Market Cap of between $250,000 and $2 billion. Many are start ups trying to bring a new product or service to market. For example we are seeing many of the biotech stocks in this category. Many of them have a promising new drug but it first must go through rigorous testing by the FDA. This is a lengthy process involving several stages of testing, often lasting up to three years. Only a small group make it through. These become he new “stars” of the investing world and their stocks rise, often very quickly.Continue Reading