In the past, the investor could pick a stock and forget about it. The expectation was for the stock to increase in value, and when the money was needed from the investment it would be there consistantly. The details of how the company operates, its earnings, balance sheets, dividends, revenue, return on invested capital, return in equity, debt ( long and short term) were of no concern. The investor of the past expected the stock that he owned to rise as reliably as the sun rises each morning in the East to begin another day.
The investor expects the stock to rise in value each day and each year without having to do anything at all except to pick a stock, then forget about it. Like a plane in flight, the passenger thinks that the pilot needs only to set the autopilot, he will then take a nap, and when near the destination airport, he will wake-up, take the controls, and land the plane. Because of the pilots knowlege of the many problems he must control to have each and every flight have a successful completion, he pays attention to each and every detail of the flight.
The mentality of the past, of putting a stock on auto-pilot and forgetting about it, is the worst thing that the investor of today can do. In the path of a plane is high terrain, weather, equipment malfunction, and more. In the path of the investor we have world economic problems, weather, competition in the market place, new financial rules set forth by the Fed Reserve, inflation, and interest just to mention a few. To fly a plane instruction is needed to be a pilot, and to invest instruction is also needed.
The new and advanced investor should know that the market is always changing. Today as I write this China is planning to start buying Euro Zone debt to back the euro currency, just as China has been buying U.S. Treasuries to back and support the dollar. China wants to diversify itself in currencies, because it does not want to rely uniquely on the U.S. dollar. This will effect the investing markets.
China is planing to build airliners, and sell them world wide. The effect of this on Boeing (BA) will be huge, and with China trading at an unfair advantage due to their currency manipulation Chinese made airliners are expected to be priced well below those made be Boeing.
China is worried about a lack of jobs in their country, and inflation. China is doing things to slow their economy. The world sees this action as a lower demand in commodities. Commodity markets see this as a reduction in need. Prices are falling for crude oil, wheat, gold, silver, copper and other metals. Stocks that are involved in commodities are also being effected to the down-side, and at the same time the dollar is stronger.
Weather has a great effect on what goes on in the markets. Cold freezing weather damages many crops, which effects companies that require the crops to create revenue, like Del Monte (DLM). Del Monte will need to pay more for what's left of the crops needed to produce product, because of this, profits will be reduced. High winds that damage property are a plus for companies that sell tools, nails, and wood for pre-storm protection. Then after the storm these same companies supply the tools, nails, wood, and paint for the repairs. Two companies in this area that everybody knows are Lows (LOW), and Home Depot (HD).
Anyone planning to place their money in the market either by buying stocks, or by being in a work place 401K or similar retirement account needs to be informed as to the hazards when investing. Just being told that the options are 'low risk', 'medium risk', and 'high risk' is not enough. What is ment by risk? Most people don't know, so they mark the same box as the other guy who also doesn't know. There is comfort in being with a group who do the same.
As a pilot completes his preflight cockpit check list, he makes sure the attitude indicator gyro is spinning to provide horizon and wings level information, the compus is correct in relation to the runway he's on, flight controls are free and correct, before beginning his take-off run. Then as the flight progresses he is vigilant as to every need of the flight by constantly getting current information concerning his flight.
The investor needs to always pay attention to the stock he or she is planning to buy. All the information needed is provided online free of charge. Yahoo.com, and MSN.com are only two of the many sites that offer this information for free. For instructions to get started visit http://www.youcontrolinvesting.com/ and ask for your free lesson 1 about ROIC. The lesson is free, and the instructions will let you know that you can be a profitable investor.
If your money is in a 401K or similar account, you still need to watch your money. A 401K account normally offers funds, which are a blend of stocks and bonds. Because funds have stocks as part of the 'package', you should take a look to see what companies (stocks) are in the package. If you see that the fund is heavy with banks and other financials, which you believe are bad to own at this time, then you should look at another fund being offered. The funds Prospectus is yours for the asking, and explains everything about the fund.
The money manager is the person or persons that created or guides the investment direction of the fund. If you don't have an interest in doing alot of work in researching for the best fund for you, or the information is overwelming, then we can keep things simple. This is not the best thing to do, but better than nothing.
Start by learning the ticker symbol of the fund you are looking at. The paper work you received about your retirement account should have it, or perhaps going to the website of your retirement account, will provide you with the ticker symbol. Example; ticker symbol (FCNTX) for Fidelity Contrafund. Now with the ticker symbol in hand we go to the computer and in the address window type in Morningstar.com and click.
Morningstar is all about fund research, it's what they do. In the 'Quote' window type in the fund symbol, and click again. What you will see is all the information about your fund, and what you're looking for is the name of the person controlling your money. For (FCNTX) the name William Danoff is the manager. If a fund is managed by a 'Team' or similar (no names given), I would move on the the next fund on my list.
Look on the Morningstar page for articles about the funds' money manager to learn about his skills in making money for the fund. If you want more information about the manager, go to google.com and type in the managers name. If you learn that the manager cannot make money when all is wonderful, then stay away from the fund, but if the manager is making money when everything is filled with doom and gloom, then that's the person for you. It takes time, but you can eliminate the bad from the good.
For more information on investing email me Bruce@YouControlinvesting.com or visit http://www.youcontrolinvesting.com/ and go to our 'Contact Us' page. We look forward to helping you understand investing which will give you a brighter financial future.
Good Investing,
Bruce Cortez
More information, with daily market updates at www.Twitter.com/StockMktTeacher , come follow me.
The investor expects the stock to rise in value each day and each year without having to do anything at all except to pick a stock, then forget about it. Like a plane in flight, the passenger thinks that the pilot needs only to set the autopilot, he will then take a nap, and when near the destination airport, he will wake-up, take the controls, and land the plane. Because of the pilots knowlege of the many problems he must control to have each and every flight have a successful completion, he pays attention to each and every detail of the flight.
The mentality of the past, of putting a stock on auto-pilot and forgetting about it, is the worst thing that the investor of today can do. In the path of a plane is high terrain, weather, equipment malfunction, and more. In the path of the investor we have world economic problems, weather, competition in the market place, new financial rules set forth by the Fed Reserve, inflation, and interest just to mention a few. To fly a plane instruction is needed to be a pilot, and to invest instruction is also needed.
The new and advanced investor should know that the market is always changing. Today as I write this China is planning to start buying Euro Zone debt to back the euro currency, just as China has been buying U.S. Treasuries to back and support the dollar. China wants to diversify itself in currencies, because it does not want to rely uniquely on the U.S. dollar. This will effect the investing markets.
China is planing to build airliners, and sell them world wide. The effect of this on Boeing (BA) will be huge, and with China trading at an unfair advantage due to their currency manipulation Chinese made airliners are expected to be priced well below those made be Boeing.
China is worried about a lack of jobs in their country, and inflation. China is doing things to slow their economy. The world sees this action as a lower demand in commodities. Commodity markets see this as a reduction in need. Prices are falling for crude oil, wheat, gold, silver, copper and other metals. Stocks that are involved in commodities are also being effected to the down-side, and at the same time the dollar is stronger.
Weather has a great effect on what goes on in the markets. Cold freezing weather damages many crops, which effects companies that require the crops to create revenue, like Del Monte (DLM). Del Monte will need to pay more for what's left of the crops needed to produce product, because of this, profits will be reduced. High winds that damage property are a plus for companies that sell tools, nails, and wood for pre-storm protection. Then after the storm these same companies supply the tools, nails, wood, and paint for the repairs. Two companies in this area that everybody knows are Lows (LOW), and Home Depot (HD).
Anyone planning to place their money in the market either by buying stocks, or by being in a work place 401K or similar retirement account needs to be informed as to the hazards when investing. Just being told that the options are 'low risk', 'medium risk', and 'high risk' is not enough. What is ment by risk? Most people don't know, so they mark the same box as the other guy who also doesn't know. There is comfort in being with a group who do the same.
As a pilot completes his preflight cockpit check list, he makes sure the attitude indicator gyro is spinning to provide horizon and wings level information, the compus is correct in relation to the runway he's on, flight controls are free and correct, before beginning his take-off run. Then as the flight progresses he is vigilant as to every need of the flight by constantly getting current information concerning his flight.
The investor needs to always pay attention to the stock he or she is planning to buy. All the information needed is provided online free of charge. Yahoo.com, and MSN.com are only two of the many sites that offer this information for free. For instructions to get started visit http://www.youcontrolinvesting.com/ and ask for your free lesson 1 about ROIC. The lesson is free, and the instructions will let you know that you can be a profitable investor.
If your money is in a 401K or similar account, you still need to watch your money. A 401K account normally offers funds, which are a blend of stocks and bonds. Because funds have stocks as part of the 'package', you should take a look to see what companies (stocks) are in the package. If you see that the fund is heavy with banks and other financials, which you believe are bad to own at this time, then you should look at another fund being offered. The funds Prospectus is yours for the asking, and explains everything about the fund.
The money manager is the person or persons that created or guides the investment direction of the fund. If you don't have an interest in doing alot of work in researching for the best fund for you, or the information is overwelming, then we can keep things simple. This is not the best thing to do, but better than nothing.
Start by learning the ticker symbol of the fund you are looking at. The paper work you received about your retirement account should have it, or perhaps going to the website of your retirement account, will provide you with the ticker symbol. Example; ticker symbol (FCNTX) for Fidelity Contrafund. Now with the ticker symbol in hand we go to the computer and in the address window type in Morningstar.com and click.
Morningstar is all about fund research, it's what they do. In the 'Quote' window type in the fund symbol, and click again. What you will see is all the information about your fund, and what you're looking for is the name of the person controlling your money. For (FCNTX) the name William Danoff is the manager. If a fund is managed by a 'Team' or similar (no names given), I would move on the the next fund on my list.
Look on the Morningstar page for articles about the funds' money manager to learn about his skills in making money for the fund. If you want more information about the manager, go to google.com and type in the managers name. If you learn that the manager cannot make money when all is wonderful, then stay away from the fund, but if the manager is making money when everything is filled with doom and gloom, then that's the person for you. It takes time, but you can eliminate the bad from the good.
For more information on investing email me Bruce@YouControlinvesting.com or visit http://www.youcontrolinvesting.com/ and go to our 'Contact Us' page. We look forward to helping you understand investing which will give you a brighter financial future.
Good Investing,
Bruce Cortez
More information, with daily market updates at www.Twitter.com/StockMktTeacher , come follow me.
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Excellent lesson
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