What to Look for in an Online Broker Lesson 108

  Learning how to  trade by studying in a college environment, or studying online with us at http://www.youcontrolinvesting.com/ prevents you from making mistakes that can cost you money. A new investor needs to understand the different products available (bonds, stocks, ETF's, CD's IRA's) and more, to place your money into for the purpose of inceasing your financial wealth.

  Learn everything you can in your studies, and by reading other material to get a more rounded feel for investing. When you are ready to start trading in a real trading account, you have many choices to pick from.

  One choice is a full service broker. a full service broker does all the thinking and picking for you, but is required to talk to you first before making changes to your account (Trading). This is a great way to go for the person that doesn't want to take control of his or her money account. Be advised that for the full service offered, you will be charged a fee of about $50.00 per trade. Each office has its own fee schedule for the services offered.

  Your second option is an online broker. You will need a broker to allow you to do the trading you plan to do. Your online broker is the middle man needed to be able to do electronic traking. The services offered vary, so we are going to cover a few things to look for.

  There are many brokerage firms to choose from. The first thing to do, is for us to decide what it is we need from our new broker. I'll provide some ideas for you, but you may think of other needs you would like.

  Experience in the Industry; Check to see how long a broker has been doing business. Some have been around 25-30 years.

  Brick and Mortar; A building in your area is not required for your broker to be top notch, but some people feel better having an office to walk into if needed. Seeing the faces of the people that are on the other side of the computer your looking at is nice. Some brokers have as many as 455 branches to help you.

  Customer Service; There are times when you need some help to your questions. I suggest you call the customer service number of the broker you're considering. See how  long you wait for someone to answer, and if there is a email, send in a question to time the response.

  Account Protection; I would look for a broker that is a member of (SIPC) Securities Investor Protection Corporation. SIPC's focus is restoring funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms. The other protection I look for is (FINRA) Financial Industry Regulatory Authority. FINRA is the largest independent regulator for all securities firms doing business in the United States. These are the minimums for the protection of your money. Some brokers offer their own money to correct a loss to the customer, due to theft of the accounts funds.

  Instruction / Training area; Does the broker's site provide tutorials on using all the tools the site provides, this is very helpful.

  Trading Tools; What research tools are available? You need to have several different tools to do your research so that you don't need to leave the broker's site because it doesn't offer much and is very limited. After completing our course at http://www.youcontrolinvesting.com/ you will know what to look for. The charts (Tools) you need as a minimum; Slow Stochastic, (MACD) Moving Average Convergence and Divergence, (RSI) Relative Strength Index, Bollinger Bands, and Volume.

  Fees; Look for no inactivity charges because you will not be trading everyday. Normally you will buy a stock, and wait anywhere from a few days to several months before selling. Lets not be charged at a higher rate because we are doing the right thing by waiting for our stock to rise in price.

  Commissions; This is the fee you pay for your trading. Look for a broker that charges only one fee no matter how much or how little your trade. Some brokers charge a lower fee for frequent traders an a higher fee for light infrequent traders Depending on the broker's services, you could pay as little as $4.00 a trade to as much as $50.00. You need to look and compare trade fees with services offered.

  Brokers; There are many brokers to choose from, this is only a short list. More can be found by goint to investment sites and looking at the brokerage advertisements. You can also use google or bing to find a broker. Decide on you requirements and check carefully to be sure the broker meets your needs.

Etrade.com, Ameriprise.com, Scottrade.com, Optionhouse.com, Forex.com, Thinkorswim.com

If you would like more information on this or other investment questions please see our other site http://www.youcontrolinvesting.com/  for information, or to contact us for instruction.

Bruce Cortez

 

When Wall Street is in Turmoil Lesson 107

  -The Date I wrote this 24 Jan. 2010-

  President Obama said he planned to work with Congress to prevent banks from investing in or sponsoring hedge funds of private equity firms, or to engage in "proprietary' trading (When a firm trades for direct gain instead of commission dollars. Essentially, the firm has decided to profit from the market rather than from commissions from processing trades), unrelated to serving bank customers. He also proposed new limits on the size of financial institutions, based on the market share of their liabilities, in addition to their share of deposits. Proprietary trading at commercial banks will be banned. Banks are banks, trading is trading. No more intermingling of the two. Banks can't own hedge funds (An aggressively managed protfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns), or private equity vehicles. Period! The size of banks will be limited. Details of how any of this will work are nonexistent. This uncertainty is what the market (investors) don't like, and there are lots of questions to be answered. Because of the uncertainty of how the Obama adminstration plans to control banks, and to what degree, the stocks of the major banks lowered.

  The DOW is composed of thirty corporations, with the banks of (BAC), and (JPM), included. The other banks I listed are also affected by Obama's proposed bank requirements.

(BAC) Bank of America, (GS) Goldman Sachs, (MS) Morgan Stanley, (USB) US Bancorp,

(JPM) JPMorgan Chase, (C) Citygroup, Inc,

(Most of the corporations in the DOW lowered in price, because of the uncertainty)

 The President's plan to split up big banks accelerated the disturbance yesterday (Friday 22), sending fears of a new wave of regulation through the markets (investors). Companies have been reporting results (earnings reports) that match or beat estimates, their stocks aren't moving higher - a signal, analysts say, that Wall Street forecasts may have gotten ahead of results (the prices we see today are higher than they should be).

  What you just read is an example of the thinking that goes on in the heads of investors on Wall Street (The Market / investors). The market is constantly evaluating world events, products. earnings reports, and anything that may influence a product, service, or growth rate of corporations. As you read earlier, the market doesn't like "uncertainty".

  Because we can expect that things will happen all the time that may effect our investments, we need to do our homework on the stock we're thinking of putting our hard earned money on. When we know that the companies stock we are buying is worth more than what we paid, then we can take comfort knowing that we will be making money with our investment.

  If the price of our stock lowers, as it will from time to time, then we can take advantage of the opportunity and buy more on the way down (like a professional). The best part of this, is that before you invested, you learned that the stock you were looking at is the best stock for you to put your money into.

  The chance of losing your money is not a worry to the person that does homework before buying a stock. 1) You know the quality of the company you're buying. 2) You know how the company makes its money, and  3) You know you invested in a company that has a history of good performance. You will sleep well at night without worries.

  You Can learn more about investing by going to http://www.youcontrolinvesting.com/ . For a very low tuition fee, you will receive a textbook, instructor by email, and on going information about  Wall Street, stocks, funds, ETF's and other information you may ask about, or we believe is important to you.

  Take a look at what we have to offer and ask for lesson #1 ROIC, Return on Investment Capital, by email. We offer this lesson free to you. You will see how easy it is to learn proper investing methods. Our methods will make you a confident investor. Our promotion page explains the free offer.

      Good Investing,

 Bruce Cortez, instructor

http://www.youcontrolinvesting.com/

 

 

Penny Stocks Lesson 106

  If you wish to make a large profit with a small amount of money buy penny stocks (which I don't recommend, I'll explain later).
 

Penny stocks are shares that trade from a fraction of a penny to $5.00.

  The idea of large profits is exciting. Let me explain with an example. Suppose you have $500.00 to invest. The penny stock investor looks for a very low priced stock at about a dollar or less. Now suppose this great penny stock costs .49 cents per share. Now we do simple division, $500.00 divided by .49 cents equals 1,020 shares that can be bought (to keep the math simple we won't include the broker's commission). Now let's say the stock price increases to $1.00, the increase to you is a profit of .51 cents per share. Let's do the math to look at your money's increase. 1,020 shares that you own multiplied by .51 cents increase in price and you now have $520.00 more than what you started with. As always, you need to sell your stock to keep your profits. When you sell, you get back the $500.00 started with, and the $520.00 profit this stock made. The total you now have in your trading account is $1,020.00. This sample stock trade went well when you first look at the results, which is the money made.

 Did this increase happen in a few days, months, or years?

  With penny stocks the risk of losing your principal (the $500.00), is very high. Penny stocks are priced low for a reason. They are riskier than the average investments, and companies are small, or new. There is no growth history in any of its fundamentals (you learn about fundamentals in our textbooks and instruction). The company could be a consistently poor performer, or it may take a very long time for the price of the stock to increase, how long will this take (we have no history)?

Penny stocks have the ability to turn a small investment into a fortune

  Penny stocks are a speculaton play (because you think you can make some money here, with no proof of performance). This concept goes back to the oil well drillers. The driller believes the oil well will be a money maker, but is running out of money to continue drilling, so the driller goes to the public (you and me) for more money to continue drilling. If the well hits oil, everybody invested makes money, but if the well is dry, then all involved lose all the money invested. Some make money, others lost money (which will you be)? The wells were new with no history of oil production. All that these drillers had is a belief the well would find oil, and a desire to continue drilling using investor's money (the investors hoped to make lots of money quickly).

  A well that is making money, with a history of performance, would be a good place to invest. You will pay more per share for this well ($20-$35 or more). The upside is that you have a history of the wells performance to research (1year,5year,10year), and have reasonable expectation that you will not lose your investment, with the addition of profits paid to you for investing.  (Your research would begin with "ROIC" Return On Investment Capital, which we offer in lesson #1 free at http://www.youcontrolinvesting.com/ ).

Speculation investing, not recommended, but for fun only. 

  If you have quality investments growing for your future, then you're doing well. A small investment in penny stocks, to add some interest to investing, would be good. Speculation helps to remove boredom from the investor.

  Don't be fooled by computer programs that are said to pick penny stocks correctly. No where have I read or heard from any source (other that the promoter), that these programs are reliable or in anyway consistant. Before sending in your money for the purchase of one of these programs, check with the Better Business Bureau for complaints (I would stay away from these programs).

  Avoid promises of winning picks that will make you a fortune. Question everything you read and see in emails and online at penny stock sites. Not all sites and offers are going to help you invest safely.

  For more information on investing wisely and safely see our site http://www.youcontrolinvesting.com/ . You can request our free lesson #1 "ROIC". You will learn how easy it is to pick quality stocks, and begin investing in stocks and watch your money grow. Try lesson #1 on us, it's free.

Good Investing.

           http://www.youcontrolinvesting.com/

email; Bruce@YouControlinvesting.com

Be a Leader Not a Follower Lesson 105

  Each day we hear of a stock "that's on fire," "can't be stopped," "exploding," "looks to double,"and other terms that indicate we're missing something. We get a sense that we're missing out on something that will create wealth for us in a short time. This type of excitement on the radio, news print, or the internet more often than not will cost you money in loses. Investing in a stock by following hype is a great way to gain nothing.

  Buying a stock without looking at its quality, is like buying a car because you were told, "it's a great car." There are great cars to be had, but all cars like all stocks aren't great.

  If a stock is said to be "exploding and looks to double," we have no idea what is causing this stock to increase in value. We have no clue at what price is the best for us to pay, and we have no idea at what price to sell. We also don't know how much more this stock will continue to go up (did this increase begin or is the increase stopping). The other thing we don't know is the qualifications of the person making these exciting comments about a stock.

  I suggest we look at this kind of "helpful" information, like hearing about how great a certain horse ran and won at the trackm as old news. By the time you got this "helpful" information about this horse winning by a "length", the race already happened, it's over, it's done, and there is no point trying to put money on this horse race that is now history.

  The news talks about this great stock going up, but this is after the stock went up (If they told us before the increase, that would be "helpful"). The radio announcer is excited about stock xyz, but this (race) has already happened, so don't put your money on a stock that you heard about, because the increase that everybody is talking about, has already happened (hold on to your money).

  When we hear that a stock "popped", the price increase already happened, Owners of a stock, in anticipation of a "pop" (Leaders) profited. Those that bought after the "pop" (Followers), got nothing except to watch the price go back down.

  All of us need to be leaders in investing. A leader picks the stocks that have meaning (we like the product or what the company represents), and are willing to do homework to learn abour the company and decide at what price your willing to pay in order to make a profit.

  A follower only hears about a stock, doesn't do any homework, and pays too much for a stock that may not perform as hoped. If you get in late you pay too much, and watch the stock lower in value, you now have three choices. Number 1, Hold till the price rises again (when?), Number 2, Sell at a loss (bummer), and number 3 learn how easy it is to do the homework that is required, before investing, to prevent this from happening again.

  For more information on this and other important subjects visit our site; http://www.youcontrolinvesting.com/ to learn how to get started investing the right way at a low cost. For our low price you will receive a textbook to learn with and use as a reference. We also will provide current information by Email, about Wall Street, so that you will be better informed, and become a good investor.

Buying Stocks to Support the Companies That Support Your Opinions Lesson 104

  "Sixteen bodies are found within 24 hours in the Mexican city of Tijuana, in what police say is part of a spate of drug-related killings".

  "Mexican officials say drug-related killings in the country have soared by 50 percent this year, with many recent deaths bunched along the U.S. border".

  "A news report that open-borders advocates would prefer that you not see. The Mexican Drug Cartel is now operating with relative impunity on both sides of the Mexican border."

  "El Monte residents paid tribute today (Jan.01, 2010) to a 33-year old school board member who was abducted and killed in Mexico".

  These are headlines in the papers and online, that tell of killings, kidnappings, and drugs that kill many others, and the huge amount of work that law enforcement has in front of them. Many times we wish to do something, but we as individuals feel there is nothing we are able to do to effect change.

  Buying and supporting the companies (stocks) that supply law enforcement with the tools to combat the enemy, is important to those that need and use the equipment. When we buy a companies stock, the money invested gives companies the capital to continue with research and development for new and better products. When we invest in the companies that support the direction we wish to see our world move into, we get a sense of helping to combat the problem.

  These companies I mention are not to promote them in any way as an investment. You need to decide that for yourself, but I only wish to indicate that by your action in investments you can help to make a difference in our future.

  Most people have heard of Smith & Wesson, ticker symbol (SWHC). This company supplies police almost everywhere with the firearms needed to perform their job. Today this company is the world's largest manufacture of handcuffs, and at some time or another, every military agency has used and depended on the products of this company.

  DuPont, ticker symbol (DD)
 
  DuPont does many things for the improvement of our lives. DuPont created a fabric that was intended to be used for tires, but was found to be effectivce in bulletproof vests. This product (Kevlar) is credited with saving the lives of more than 3000 law enforcement officers. DuPont also produces health care, medical, and electronics, enabling the manufacture of advanced OLED, LCD, and PDP displays and more.

  SELEX Galileo Inc. ticker symbol (FNC.MI)

  This company provides products to our government to support our military, and our border protection units. Mobil ground surveillance units of variors forms, are able to patrol coastal or rough terrain with all-terrain vehicles. SELEX can also be mounted on fixed based structures.

  SELEX has a radar contract with the U.S. Coast Guard, the Vixen 500E Radar integration for the US Customs and Border protection. This electronic equipment can be integrated into unmanned aerial border surveillance aircraft.

  I don't own any of the companies mentioned in this blog. There are many other companies here in the United States that in some form contribute to the protection of our nation's boarders and its people. Companies that manufacture computers and its components, aircraft manufactures, or the equipment that is needed to do a particular operation on the aircraft, are worth a look. The companies that produce fuels, lubricants, electronic components, batteries or equipment to protect those that are protecting us, need our financial support. Buying a part of a company (stock) that has meaning to you, and supports what you believe in, is how you are making a difference to all of us.

  For more information on investing visit our site http://www.youcontrolinvesting.com/ and request a free first lesson to get started moving forward in this new year.


Good Investing,

 Bruce Cortez
http://www.youcontrolinvesting.com/
 Email Bruce@YouControlinvesting.com

How to decide which company (stock) is worth looking at for investing Lesson103

  The information that is needed to evaluate any company's stock, is available online for free. Free means that extra work may be needed by you to get the answers you need. For those that are starting out in learning about stock research, you don't need to spend any money to pay for a full service research company. I find that if you spend extra time doing the work, with extra effort, you will retain what you learn better.

  The first thing I like to look at is companies that do the same type of service or create the same product. My example of this is Home Depot, and Lowe's. Both of these companies provide tools, paint, sheet rock, and lumber. The question here is which of these two is the best? Another example is CVS, Rite Aid, and Walgreens. These three provide similar services and products. These three have flowers, drugs, and over the counter medicines. The question again is, which of these three is the best?

  A quick and easy check is looking at how the company manages its money. For this we look at its "ROIC", Return On Investment Capital. This number is important because we need to see if money is being made by the company, or is the company losing money trying to do what it does.

  The company spends money to operate. Equipment to be maintained and replaced, supplies, electricity, gas, license, permits, insurance, advertising, employees pay, and other miscellaneous items all cost money. The question is, after all these expenses are paid at the end of the year, how much money does the company have, and how fast is this earned money growing?

  For example; if it took $100,000 to operate the company for the year, and after all bills are paid for the year, this company has made $10,000. The ROIC growth rate in this example is 10% ($10,000 is 10% of $100,000). We always want to see 10% growth rate or greater. If you know nothing else about this company, at least you know that management knows how to properly use money in a manner that won't cause bankruptcy.

  From this one quick check we can learn that sales/revenue, the total dollars the business took in from selling its products, is at a rate to allow financial growth. Because of this the EPS (earnings per share), which tells us how much the business is profiting per share of ownership, can be expected to be growing.

  This one quick check saves you lots of time researching a company, and keeps you from doing alot of work needlessly. ROIC gives us the answer we need quickly and tells us that continued research is worth our time or not. There is more research required of any company we are thinking of investing in, but ROIC is always the starting point.

  For more information on learning how to pick quality stocks, see our site at http://www.youcontrolinvesting.com/ and learn how easy it is to be a successful investor. This is the perfect time to make your move.