Dividend Reinvestment Programs

A Dividend Reinvestment Plan, also called a DRP or DRiP, is a method of investing that allows an investor to gradually build a large amount of shares in a specific company. You can choose to get involved in a DRiP most easily if you are an employee of the company, but you can also choose to participate in a companies program as an external investor - since every companies program can be run on their own terms, you should contact the company directly. These plans have obvious appeal for investors, for several reasons:

* You can start out with a very small of shares, even as little as one share in a company.
* You usually have an automatic deduction set up that means you purchase a set price worth of the companies shares on a regular basis.
* When dividends are paid, these are reinvested into more shares.
* The share price for participants in a DRiP is discounted by many of the companies that run these programs
* Since you deal directly with the company, there are no brokerage fees.

It all sounds pretty good right? Well that's because it is! DRiP investing is a great way to invest your money, and provides better value than buying the same amount of shares through a broker in many cases. By setting up automatic deductions, you are forcing yourself to save money - money that you will probably never notice missing. However one point that you need to consider is that it is very important to diversify your portfolio. A DRiP only lets you invest in one company, so to achieve a balanced portfolio you will need to join the program with a range of companies, or else join a DRiP to complement your other investment strategies.

DRIP investing is a useful strategy for those who wish to grow their portfolio over time, but don't have significant assets starting out. However you should diversify your portfolio over time - this might mean participating in the DRIP programs of a range of companies.

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When Stock Paper Trading is of Great Use

If you are a novice in investing in the stock-markets, the best way to hone your skills would be to undertake some stock-paper trading. This is essentially a simulation game; if one may call it a game, where investors buy and sell paper stocks fictitiously.

You as an investor can undertake paper stock trading without committing any real money.

How Do You Do This?

There are various sites available on the internet which allows investors to undertake such trading. You can choose your stocks and build a portfolio on such a website without committing any real money.

Prices of stocks on such investment sites mirror the actual prices of stocks on markets where they are listed. Thus your portfolio valuation will move up or down depending on how the stocks you have 'bought' have performed in real life on that day.

Benefits Of Stock Paper Trading

This is good practice arena, and any potential investor should first spend some time doing such trading before venturing into the stock-market. It will give you an idea of how good your stock selection strategy is. It will show you how the sectors in which you have invested have performed, which in turn will make you realize whether you have invested in the right sectors.

While stock-prices vary according to the performance of each specific company, sectoral performances are based on broader macroeconomic indicators which affect that specific sector. You should therefore be in the right sector at the right time. Choosing a stock whose performance has historically been outstanding, but the outlook of the sector to which it belongs is bleak, owing to factors such as over capacity and new government regulations, may not work well for you.

All investors when they embark on the stock-investment path, do make mistakes. Many lose a lifetime of savings. It is therefore better that you practice your hand in stock paper trading before you take the plunge.
It is not that months spent on such practice will guarantee you good returns on the stock-markets. Returns will depend on the stocks you have bought and the overall condition of the sector and the economy.

What stock-paper trading trains you in is the manner of selecting potentially good return stocks and how to avoid pitfalls in the markets.

Options Available

Many companies provide this type of trading opportunities; some are free while others charge a fee for the service. Apart from the basics of trading in the markets, you can practice higher level investment options such as simultaneously setting up different positions to compare the payoffs in each, short selling, futures trading and leveraging.

It is a good idea to do some stock-paper trading before you put in real money into real stocks on the real stock-markets.

Mr. Albertina Belmont is a financial advisor and professional of finance area. He designed a website to avoid financial crisis and his website offers a huge free collection of stock trading information, stock trading tips and tricks. Visit us http://www.financeenquiry.com today and start to avoid your financial and stock trading problem every day activity in a realistic and music way.

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Stock Trade - Merits and Demerits

You require a deep knowledge of stock trade before venturing into the market. Almost 90% of people who start trading in the stock market get out of it in the first year, after losing money. Both lack of knowledge and overconfidence are the main reasons here. Hence, a high degree of mental strength and willpower is required to sustain in this area.

Stock Trade - Advantages

Good returns - Investing in stocks can give very good returns. Although there are many other options to invest your money but stock market is known to give the best profits.

Compound interest - One of the often ignored benefits of the stock market is the facility to earn compounded interest. Dividends paid by many stocks can be reinvested to earn extra returns. You can make your money grow faster this way.

Tax deferral - You're only taxed on the profits, not on earnings from the sale of the stock. After all, important thing is not what you make but what you keep after tax.

Diversification - By investing in stocks the investor can get exposure to a broad variety of areas in the economy.

Time - You don't need people and space for stock trading. In fact here you can work alone from the comfort of your home. There is also enough time left to have fun with family and pursue hobbies.

Flexible - Unlike your own business, where you have to bear losses and fight hard to make it lucrative, in trading, you can invest more in the stock you find profitable and sell some of which is not gainful. You have total control over your investment decision.

Stock Trade - Disadvantages

Loss of money - You can lose a lot of money in stock trade if the market goes down or if you make wrong choices - you can even end up broke.

Lot of hard work - The learning curve is very steep in the beginning. You also have to do a lot of homework and learn how to select your investments intelligently.

Sufficient funds - Be sure that you have enough savings to get you through a crisis before you trade in stocks. Otherwise, if your investments go down you may find yourself in trouble in even making ends meet.

No assurance - This is the chief disadvantage as there are many things which affect the market such as, political issues, natural disasters and government policies, etc., so you cannot be sure of growth.

One should enter into market only after understanding all these merits and demerits. Although everyone is not successful because share investment does not assure a fixed return but a wise investor who goes for stock trade can gain success and can make return of even 35 percent.

Mr. Albertina Belmont is a financial advisor and professional of finance area. He designed a website to avoid financial crisis and his website offers a huge free collection of stock trading information, stock trading tips and tricks. Visit us http://www.financeenquiry.com/category_view.php?catid=16 today and start taking advantage of to avoid your financial and stock trading problem every day activity in a realistic and music way.

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Stock Trading Terms That Novice Traders Must Be Aware of

There are several stock trading terms that are frequently used in the day trading market. If you are not a trader, it will be very difficult for you to understand what these terms actually mean unless you study them specifically. If you are considering entering the mystic world of stock trading, it is very important for you to be well aware of these terminologies first. You must be a good learner. You must know how to make the best use of every single opportunity to increase your knowledge about the market. Following is a brief rundown on some of the most common stock trading terms.

Trader
Traders refer to the individuals who transact financial instruments (such as, stocks) in financial markets. They sometimes do it on behalf of someone else, but most of the times, traders do it for themselves only. There can be different types of traders, such as head traders, pattern day traders, and commercial traders. A commercial trader is the person whose primary task is to use the future markets. The head trader is the one who works in a trading firm and supervises all the traders working for that firm. Pattern day traders on the other hand are primarily involved in trading securities 4-5 times a day over a period of five days.

Stock
"Stock" obviously is one of the most common stock trading terms. It mainly refers to a security or equity that entails ownership in a firm or company.

Current Market Value
The current market value indicates the actual value of a stock on the basis of the current market trends.

Capital Loss And Capital Gain
"Capital loss" and "capital gain" are two serious terms that traders and investors must be thoroughly aware of. Capital loss is often termed as CL, which refers to the loss that traders or investors have to suffer when they sell stocks at a price lower than the initial purchasing price. On the other hand, CG indicates capital gain, which refers to the profit resulting from the sale of the stocks at a price higher than the initial purchase price.

Volatility
Volatility, as it may sound, has nothing to do with the trader's temper. This is also one of the most-heard-of stock trading terms that is used to indicate the movement of securities. You have to calculate the annualized standard deviation of the daily changes in stock prices in order to determine the volatility.

Securities and Exchange Commission
In the United States of America, there is a specific administrative agency that regulates and governs the stock trading market - this agency is known as Securities and Exchange Commission.

Reaction And Rally
When the price of a stock suddenly decreases after seeing a rise, it is called reaction. On the other hand, rally refers to the increase in the prices of stock.

Tender Offer
When a company makes an offer to another company to buy their shares from their stockholders, this activity is referred to as tender offer.

Overall, having knowledge of these stock trading terms will definitely make things much easier for the novice traders.

Mr. Albertina Belmont is a financial advisor and professional of finance area. He designed a website to avoid financial crisis and his website offers a huge free collection of stock trading information, stock trading tips and tricks. Visit us http://www.financeenquiry.com/category_view.php?catid=16 today for more stock trading feature and help.

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The Bergamo Acquisition Corporation

The Bergamo Acquisition Corporation is probably not a name you will be very familiar with. It is not a household name, and yet it is a penny stock that could well be worth keeping a closer eye on at the moment.

Known by the symbol BGMO on the stock market, this company improved its stocks by nearly eight per cent -- 7.94% to be exact -- on the morning of 22nd October.

So what do we know about Bergamo? Is this a company which could produce more gains in the near future, qualifying it as a potential penny stock worth investing in? As always research and careful thought and planning should be put into place, although even then there is no guarantee that the penny stocks you choose will gain a profit.

So why is the Bergamo Acquisition Corporation worth looking at?

The business itself is based in Nevada but has interests in Pakistan. In fact, it focuses on three projects for the infrastructure in Pakistan. The focus is on clean energy and as such renewable energy and highly efficient products and plans are being put into place. Pakistan wants to move ahead and develop the country so that it can take advantage of its natural resources. And Bergamo is helping it achieve this aim.

It is this forward thinking, green energy thrust that is indicative of several penny stocks that are doing particularly well in these current times. Recycling and other green issues are proving to be good stocks to invest in, and with that 7.94% increase in a single morning, it could point to a stock that is worth buying in order to sell at a higher price later on.

Only time will tell if the increase in the value of the stock will continue. But Bergamo is certainly a promising company with plenty of time and effort invested in helping Pakistan sustain its energy needs for the future. And with a budget of $1.5 billion dollars available this is definitely a solid venture between Pakistan and Bergamo that will continue long into the future.

As such perhaps we could speculate that the value of the stock will improve as time goes by and more is completed. But since this is very early days at the moment, we can only wait to see how work progresses and the Bergamo Acquisitions Corporation handles the developments planned for Pakistan.

Next, check out our free stock picks that have made huge gains. Your #1 spot for top ten penny stock picks.

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Xtend Medical Corp

If you have been watching the stocks for the Xtend Medical Corp group recently, you will know they have gone through the roof. That might be a frequently used saying in the area of stocks and bonds, but in this case it is warranted. They have increased by over two thousand per cent, and some say they could go even higher.

While only time will tell whether that will happen or not, the reason why their shares have improved so much is worth looking at. Apparently they are looking to merge with another company. This is happening because they want to promote further technology in the medical field and they cannot do so without the help of another party.

What makes Xtend Medical Corp different from many of their counterparts is the fact that they think globally - even with regard to third world countries which can sometimes be left behind in this respect. The current product they are looking to have promoted is called the BioHarp. This works in an imaging capacity, so it is able to take complex pictures of the body in order to identify problems - most notably cancer cells.

The BioHarp is extremely versatile and very useful since it fits into your hand. This isn't a huge machine that people need to go and use - it can instead be taken to the patient. Consequently the potential is huge.

Of course the fact that the item has the ability to detect cancer by using nanotechnology holds a huge amount of potential. Could we imagine a world in which a device such as this gives more and more people the chance to fight cancer due to its earlier detection? Indeed we could - and because of this we can envisage those stocks going up further as time goes by.

News of the merger with this other company - BioHarp Korea - should give plenty of scope for higher stock prices in future days and weeks as well. We are not yet in a territory where the penny stock has become anything but. But even though it still qualifies as a penny stock it has certainly done well to increase in percentage by such a huge amount.

Could we see Xtend Medical Corp go even higher? It is more likely to go in that favourable direction than it is to go the other way, but of course caution should always be exercised when buying any type of stock.

Next, check out our free stock picks that have made huge gains. Your #1 spot for top ten penny stock picks.

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Understanding the Stock Index Trading System

A lot of people try their hand at trading stocks at some point in their lives. But you need discipline, determination and a willingness to learn if you hope to have any real success at it. More than that, you will also find it easier if you have some kind of stock index trading system to use.

It has been said -- and proved -- in the past that the stock market goes in cycles. Many things in life do this, and the stock market itself is no exception. Learning how it happens will help you to predict when it will happen as well, and having a system of some kind is useful to this success.

You may already be familiar with the concept of bear markets and bull markets. A bear market occurs when stocks are generally decreasing in value. Conversely a bull market describes a time when those same stocks are improving in value. A stock index trading system should be able to predict when these times will happen, so that you in turn can make the best deals at the best times.

The catch is that there are lots of different systems available to use. There is no reason of course why you cannot come up with your own system, but you need a significant amount of experience and knowledge to do this. Many companies online offer their own system -- usually at a cost -- which means you have to do your research to find one that you are happy to use.

A key point to remember with this type of trading is that it can easily be done online. You can also get better profits here than you may be able to get in other areas of stock trading. These are two of the main reasons why people focus in on this type of trading. If you are going to give it a try, make an effort to find out how many systems you can find online before deciding on a particular one. You may see the name WD Gann crop up too -- while he was alive he predicted many major events in the stock market, and many people even now use his methods and systems to trade themselves.

But whichever stock index trading system you use, you should know that it can make you a lot of money. As always, be cautious and accept the risk of loss too, but it could well lead you to a nice profit.

Next, check out our free stock picks that have made huge gains. Your #1 spot for top ten penny stock picks.

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