Archive for May, 2009

May
16

Investing - Bearish Economy And A Bullish Market

Posted by: Scotty Smith | Comments (0)

When referring to the stock market, a bullish market is one that is just beginning to see a rise in prices. Usually this indicates optimism and investor confidence.

With so much talk about a depression, in today’s stock market a bullish trend does not necessarily follow results from a Bullish Market trend in previous years.

Investors have seen huge fluctuations in the markets the past several months. In fact, while the Dow Jones can experience the lowest Bearish Market indicators one day, the next it will often rally and start its way back towards being bullish.

Worried traders who act on speculation and psychological factors make the situation more volatile. Even experienced investors often have a hard time predicting market turns in this situation.

Trade Timing is The Key To Investing

It only makes sense that when the bear market has reached its ultimate low, that a Bullish Market will occur next. Being in the proper position to buy before pricing spikes is key. Savvy investors will be prepared.

Accurate anticipation of the market turning from its lowest point to the upswing is a trait that comes only from experience. Watch the professionals investors in order to figure out just when they think the stock market has hit bottom. Buying into the best stocks before prices spike is the only way to make a good profit.

The Stock Market Precedes the Economy

While it may be difficult to understand, the truth of the matter is that stock market movement precedes a change in the economy.

Savvy traders base their investing strategies largely on what is happening in the financial world. They pay attention to such current news as the fiscal stimulus package going forward in the United States, and the market reactionary trends in inflation and interest rates.

These trends and how they affect market pricing directly affects the global economy. High inflation and low growth will increase demand.

For any investor, buying at a point before the Bullish Market occurs is the best way to make a profit. However, accurate predictions of this sort are very difficult to make.

Post by
Scotty Smith
Planet Wealth

Categories : Stock Market Talk
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May
11

Stock Market Investing - Share Purchase Plans

Posted by: Scotty Smith | Comments (0)
Most investors today go ecstatic when the company they have been investing in comes out with share purchase plans.

What Are Share Purchase Plans?

For the uninitiated, Share Purchase Plans are nothing but issue of new shares to existing share holders that are capped to a particular amount of money, which is presently about $5000 according to the ASIC.

These shares come at a deep discount and without too much of paperwork and even disclosure requirements that share buying normally mandates.

Although it might seem to be a rosy picture at the outset, it might not always be the best bet for you as an investor? Each time you are presented with a scenario like this one, it is best to do a quick introspective analysis and try to compare the apparent costs and benefits using cost-benefit analysis.

Do Your Homework Before Investing

For starters, is the discounted share price worth it in the first place? The company will stand to gain from the Share Purchase Plan it had floated out, but will you stand to gain too? Has the share been doing well in the market? The share purchase plan has been floated by the company for an obvious reason and that is to raise easy cash, but do you have just as obvious a benefit?

Discounts on share prices and increased ownership in a company doesn’t equate to getting wealthy. Instead of grabbing every Share Purchase Plan that comes your way, a discerning investor must always keep their eyes open for anything that doesn’t fetch you good returns, by scrutinizing the company, its management and the reasons for the share purchase plan being floated out at this juncture.

Andrew Dimitri from Planet Wealth explains Share Purchase Plan Investing…

Post by
Scotty Smith
Planet Wealth

Categories : Stock Market Investing
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May
04

Stock Market Investing - Protected Equity Strategy

Posted by: Scotty Smith | Comments (0)
No matter what type of Stock Market Investing you are involved in, equity is inevitable in your investment portfolio. It could be that you are risk averse, or perhaps you are at that age in life where you don’t need to pick up risk, but equity is still important due to one reason alone: It beats inflation and the returns equity fetches over the long term are unbeatable.

Minimise Risk With A Protected Equity Strategy

But then, equity is risky too. How do you ensure that you are able to tap into equity but avoid the downside risk associated with it? Is there is a way to protect your investment portfolio? The resounding answer is yes, but at a cost.

One of the best ways to do this is to follow a Protected Equity strategy, that is to take a Protected Equity loan that is loaned out to you to allow you to make investments into equity related investments.

The best part is that you don’t have to bear any losses by paying up anything over and above the loan principal and the exorbitant rate of Interest (which is the cost we were talking about) in case the value of the equity investments you purchased diminishes due to market fluctuations.

Analyze Before Investing

When investing in a Protected Equity Strategy, the high cost of the interest is a large point of concern, and this is where your scrutiny is vital. It is important that you put things down on paper and perform a thorough analysis to see if the particular investment you are about to get into is profitable. Of course, don’t get struck by “paralysis by analysis” on the other extreme.

Andrew Dimitri from Planet Wealth Explains The Protected Equity Strategy…

Written By
Scotty Smith
Investing The Stock Market

Categories : Stock Market Investing
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