Saturday, September 22, 2012

21 Best Stock Market Secrets

These 21 simple yet effective secrets will make you more informed, empowered and confidence for better all-the-way investing success.

1. Anticipate rate increases with these indices

Wouldn't it be great if you could read Alan Greenspan's mind? Follow the National Association of Purchasing Management Production and Price indices, and you’ll get a handle on what the Federal Reserve Bank is going to do.Values above 50 in these indices mean production and price increases are speeding up; below 50,that they're slowing down. Whenever both have risen above 60 at the same time, the Fed chairman has responded by raising the discount rate. - Bloomberg Personal Finance

2. Simple questions help investors pick winners

Confused by all the factors that others use to pick stocks? Simple screening techniques involve"Yes" answers to questions like these: Does the company have a strong brand position within a growing industry? Is the company gaining or at least maintaining market share? Other questions include whether the company's strategy makes sense, and whether it's focused on a single set of products and services.— Kiplinger’s Personal Finance

3. Keep up with whisper numbers on the Web

Now you can get a sneak peek at the whisper numbers - insider estimates on corporate earnings - that can have a dramatic effect on the market. Several websites, such as, and, offer the general public a look at what Wall Street insiders already know. Since stock prices can turn on these numbers, it pays to be in the know. - Online Investor

4. Ride safe with convertibles

Still searching for the silver lining in the technology sell-off cloud? Try looking into convertible bonds. Converts are a higher yield over the stock and a more senior claim on assets in case of bankruptcy; you get equity exposure without undertaking the full risk of a common stock position. A convertible slides toward either the stock or the bond side. When the underlying common rises, it trades more like stock, and its fixed-income characteristics become less important to its value.- Forbes

5. Winning tech stocks tackle impossible jobs

Even if you're wary of the Net stock bandwagon,experts say you should try to keep about 30% of your portfolio in tech. One of the pros’ tricks for picking tech stocks is to choose those with business models that could never have been achieved without the Net. Stocks like eBay, for instance, allow a collaborative integration of previously impossible or difficult things. Another tip: pick Net companies with the momentum of sales growth beating the momentum of expense growth.- The Industry Standard

6. Warning: Steer clear of stock fraud

Unscrupulous scoundrels are out there to take advantage of investors. Peruse issuers’ public filing sand find the red flags: stock issued via warrants,convertible debt, or bridge loans that convert to stock-visit the Edgar database at sec. gov. Also, whenever you deal with new brokers, be sure to ask for their personal, and their firms’, disciplinary records. Be skeptical, and check out promoters who boast stocks cheaper than $5 a share.- Kiplinger’s Personal Finance

7. Volume is as crucial as price in market watch

Although pricing data is the most commonly-used indicator in analyzing stocks and the market,there's another, independent indicator that should be used to confirm price action. Volume is extremely useful for such indications as an impending bear market. Normally, volume rises with prices. However, rising prices and falling volume, or falling prices and rising volume, are clues that the market is about to take a dive.- Technical Analysis of Stocks & Commodities

8. Stop yourself from making buy, sell mistakes

If you're unsure about your buying and selling skills, as many investors are, try setting some limits for yourself. Use stop orders to be satisfied with 10-15% gains and similar losses. This kind of self-discipline prevents you from panic selling, and most particularly from having to worry about when to get out of a losing position-one of the hardest things most investors have to do.- Online Investor

9. Standbys are essential for secure success

"Dotcoms" will continue to come and go, so it pays(literally) to keep a diverse portfolio. Holding shares in financials, consumer goods, and pharmaceuticals will keep you financially dry when it rains on the Wall Street tech parade. Investing in one of these indices can help smooth out the peaks and valleys in a portfolio.-The Kiplinger Letter

10. Get on the right path with a good tracker

Checking the markets in the newspaper limits your info. Use a Web-based tracker to check your investments. Sophisticated trackers help you keep a handle on your asset allocation; track your capital gains; alert you to buy or sell; and even allow you to easily copy your portfolio. You will also be able to record all your investments -stocks, funds, and cash- and display them on the screen.- Online Investor

11. Buy from both ends

Truly conservative investors take the path of least risk. Check out the routes you typically leave uncharted, and devote at least some money to more growth-oriented companies. Covering all your bases-playing truly conservative-will certainly benefit when the road gets rough. Keep the bulk of your assets in a laid-back portfolio and put a sliver in a more-aggressive group of stocks.- Kiplinger’s Personal Finance

12. Trading workstation can make decisions a snap

Do you need your trading decisions to be simple and direct, with real-time market information to back them up? Check out Prophet Station, anew screening workstation that's fast, flexible,and above all, easy to use. ProphetStation ( boasts strong customer support and is altogether an excellent option for online traders who base their trading on simple principles.- Technical Analysis of Stocks & Commodities

13. Stock analysis is easy as 1-2-3

The basics of stock analysis aren't hard to master- if you know what they are, and where to get the information. The first question you should ask is "What does the company do?" Look at the shareholder letter in the annual report, andyou’ll get the answer. Question #2 is,"How fast is the company growing?"The answer lies in the income statement in the quarterly and annual reports.- Morningstar Stock Investor

14. Know thyself: Trade when you're at your peak

Traders who hit the markets on a bad day are headed for disaster. Among the questions you should ask yourself before trading every day is "Could I concentrate on a game of chess to beat a strong opponent right now? "If the answer is no, you're not ready to compete with the big boys in the market today. Other factors that effect trading performance are recent wins and losses, and whether you've been following a good trading plan in making those trades.- Technical Analysis of Stocks & Commodities

15. Accounts receivable hold clue to success

Looking for the truth in a maze of high-tech startups and upstarts? Find out where the bodies are buried by taking a look at quarterly balance sheets, in particular accounts receivable. Divide receivables by average sales per day to determine how fast a company collects. A good number, like Microsoft's, would be about 45 days. Taking more than six months to collect is bad news.- The Industry Standard

16. Time to ease out of tech and into bonds

With certain corrections going on in the market, it might be a good time to consider scaling back the percentage of your portfolio that's in tech stocks. Instead, consider buying high-quality bonds,which may well outperform the average stock between now and the next recession. When growth slows and interest rates drop again,bond prices rise. Also, the U.S. Treasury's plans to buy back most of its outstanding debt are causing long-term Treasury bonds to soar.- Your Money

17. Day-trading pros must pick professional venue

Serious day-trader wannabes must find reputable,quality off-floor venues where they can ply their trade. One crucial thing to look for in a company is a cost to you of one and a half to two cents per share and no more. Keeping your trade costs down is crucial because professionals know that even the best traders have good years and bad months too. Any firm that relies on the current hot market streak and gouges you for more isn't a place you want to trade. - Technical Analysis of Stocks & Commodities

18. Selling is such sweet sorrow

Although you should know when it’s time to sell,being overprotective and watching your stocks’every move is not the way. Review annually and set up an early-warning system. If you review more often, you’re probably not giving some stars a chance to shine. Scheduling a December review will allow you to match gains with losses for tax purposes just in time for tax-planning season.- Bloomberg Personal Finance

19. CEOs welcome investors to the conference room

Companies are understanding that their needs coincide with investors’ and are making efforts to be more personal. Visit a corporate website and access everything from the latest figures to executive speeches. Learn what institutional investors know, and possibly figure out something they haven’t!The Securities and Exchange Commission wants to change the rules of disclosure, proposing that large and small investors receive information at the same time. - Bloomberg Personal Finance

20. Stay on top of overlaps

Are you building your portfolio for diversity? Are you sure you're not sabotaging yourself? Make informed decisions when you diversify. Overlaps could creep up and undermine your efforts; funds that have a lot of overlap move up and down together, causing too much exposure to one sector and that’s risky business!Know how funds fit into your overall portfolio. There's software available to help you reduce overlaps.- Bloomberg Personal Finance

21. Don’t bank on stocks staying down

The best things - including big payoffs - come to those who wait. Buy bank stocks, even though they may be seemingly beaten. Their profits continue to grow, modestly at the very least,regardless of climbing interest rates. An exercise in patience is in order: be prepared to hold your shares until interest rates stabilize, and ready to profit when bank stocks rebound.- Morningstar Stock Investor

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