Real Estate or Stocks - Helpful hints for stock trading
Re: Stocks.
In a former job, I was an analyst for one of the largest Banks in S. FL. Over the years I've invested small amounts in different stocks at different times and had good success. Scottrade.com is a good way to start accumulating investments. They only charge $7.00 per trade. You can trade online and follow your portfolio's performance. You can make "good till canceled" orders to buy and sell. The minimum opening of an account is around $500. I'd recommend trading "Known" companies versus penny stocks. I have a few favorites I'll mention to you. Merck (MRK), Bristol Myers (BMY), Pfizer (PFE), Glaxo Smith Kline (GSK), Coca Cola (KO), Home Depot (HD). Some drug companies pay dividends and Merck and Pfizer are returning a little over 4% on an investment today at their current price. Americans are getting older, on average, and more and more people are becoming dependent on medications for maintaining their health. The baby boomers were born starting in 1945 to about 1959. They're Ages 45 to 60, and getting older! In the next 10 to 30 years, they'll become more and more dependent on medication. I see lots of opportunity for drug companies to increase sales, profits, and dividends in the coming years. My senior year Macro Economics professor (Myron Slovin) in college(Georgia Tech) gave me some very helpful stock buying advice in 1981. Myron was the chief economist to the chairman of the Federal Reserve under Burns (the guy before Voelker and Greenspan). His investment advise has been the primary reason for my success. There are his 5 keypoints Here goes.
Point 1.
Look at the 52 week high (H), 52 week low (L), current price (C) and dividend rate (D) (in %) for the company you're thinking about purchasing.
Make these calculations:
H/L, and C/L, and D/C.
IE,
52 high = $35.36, 52 low = $25.50, $35.36/$25.50 = 1.3867
current = $32.02, 52 low = $25.50, $32.02/$25.50 = 1.2557
dividend rate = Annual dividend divided by current price or, $1.52 /$32.02 = 4.75% dividend rate, also known as a yield.
(The example above is based on Merck (MRK) on 12-29-05. Here's an example of what you're "ideally" looking for:
You want the H/L to be 1.25 or higher. This means the price has fluctuated enough to make a profit during a "normal" year just based on changes in the stock price. You want the C/L to be approaching 1.0. This means that you're a smart investor by default. You're purchasing the stock near the lowest point during the last year and are smarter, by comparison, than all the other investors for buying near the low point. You don't always have to buy only when the C/L is near 1.0. MRK is at 1.25 vs 1.3867. Not near the low, however there's a 4.75% dividend. Not too bad.
POINT 2.
Only buy stocks for companies that are "good corporate citizens". They're respected by the community. Enron could be an example of a "bad" corporate citizen. Certain "dirty" industries should be avoided. Use you're "gut" to decide if they're "good". If you're not sure, ask you're friends if they think the company is a good citizen. If the price continues to fall, be willing to buy more at the cheaper price. Be willing to be patient and wait for prices to increase. It might take a year or longer, depending on why the price dropped.
POINT 3.
Ask "Why is the stock price nearing a new 52 week low?" Are they approaching bankruptcy, like Delta recently did? Has there been some "bad" press, like Exxon and the oil spill in Alaska years back? Are they being sued in a class action suit? Has their competition created a "better mouse trap"and is getting a greater percentage of the market share? "Look before you leap" or purchase.
Point 4
There are Bulls who believe the market is going UP, and Bears who believe the market is going DOWN, and PIGS who belive the price is going to double or make them rich. NEVER be a PIG in the market. Be willing to take profits (sell your investments) when the market conditions have changed and the long-term outlook has shifted for that company.
POINT 5
DON'T invest more money into a specific company or the market than you can afford to LOOSE. If you have nightmares about a company going out of business and/or loosing all your money in a market correction, you have too much money in stocks. Spread your risk into different companies, or bonds, or other type investments. "Don't put all you eggs in one basket.
"Good luck!
In a former job, I was an analyst for one of the largest Banks in S. FL. Over the years I've invested small amounts in different stocks at different times and had good success. Scottrade.com is a good way to start accumulating investments. They only charge $7.00 per trade. You can trade online and follow your portfolio's performance. You can make "good till canceled" orders to buy and sell. The minimum opening of an account is around $500. I'd recommend trading "Known" companies versus penny stocks. I have a few favorites I'll mention to you. Merck (MRK), Bristol Myers (BMY), Pfizer (PFE), Glaxo Smith Kline (GSK), Coca Cola (KO), Home Depot (HD). Some drug companies pay dividends and Merck and Pfizer are returning a little over 4% on an investment today at their current price. Americans are getting older, on average, and more and more people are becoming dependent on medications for maintaining their health. The baby boomers were born starting in 1945 to about 1959. They're Ages 45 to 60, and getting older! In the next 10 to 30 years, they'll become more and more dependent on medication. I see lots of opportunity for drug companies to increase sales, profits, and dividends in the coming years. My senior year Macro Economics professor (Myron Slovin) in college(Georgia Tech) gave me some very helpful stock buying advice in 1981. Myron was the chief economist to the chairman of the Federal Reserve under Burns (the guy before Voelker and Greenspan). His investment advise has been the primary reason for my success. There are his 5 keypoints Here goes.
Point 1.
Look at the 52 week high (H), 52 week low (L), current price (C) and dividend rate (D) (in %) for the company you're thinking about purchasing.
Make these calculations:
H/L, and C/L, and D/C.
IE,
52 high = $35.36, 52 low = $25.50, $35.36/$25.50 = 1.3867
current = $32.02, 52 low = $25.50, $32.02/$25.50 = 1.2557
dividend rate = Annual dividend divided by current price or, $1.52 /$32.02 = 4.75% dividend rate, also known as a yield.
(The example above is based on Merck (MRK) on 12-29-05. Here's an example of what you're "ideally" looking for:
You want the H/L to be 1.25 or higher. This means the price has fluctuated enough to make a profit during a "normal" year just based on changes in the stock price. You want the C/L to be approaching 1.0. This means that you're a smart investor by default. You're purchasing the stock near the lowest point during the last year and are smarter, by comparison, than all the other investors for buying near the low point. You don't always have to buy only when the C/L is near 1.0. MRK is at 1.25 vs 1.3867. Not near the low, however there's a 4.75% dividend. Not too bad.
POINT 2.
Only buy stocks for companies that are "good corporate citizens". They're respected by the community. Enron could be an example of a "bad" corporate citizen. Certain "dirty" industries should be avoided. Use you're "gut" to decide if they're "good". If you're not sure, ask you're friends if they think the company is a good citizen. If the price continues to fall, be willing to buy more at the cheaper price. Be willing to be patient and wait for prices to increase. It might take a year or longer, depending on why the price dropped.
POINT 3.
Ask "Why is the stock price nearing a new 52 week low?" Are they approaching bankruptcy, like Delta recently did? Has there been some "bad" press, like Exxon and the oil spill in Alaska years back? Are they being sued in a class action suit? Has their competition created a "better mouse trap"and is getting a greater percentage of the market share? "Look before you leap" or purchase.
Point 4
There are Bulls who believe the market is going UP, and Bears who believe the market is going DOWN, and PIGS who belive the price is going to double or make them rich. NEVER be a PIG in the market. Be willing to take profits (sell your investments) when the market conditions have changed and the long-term outlook has shifted for that company.
POINT 5
DON'T invest more money into a specific company or the market than you can afford to LOOSE. If you have nightmares about a company going out of business and/or loosing all your money in a market correction, you have too much money in stocks. Spread your risk into different companies, or bonds, or other type investments. "Don't put all you eggs in one basket.
"Good luck!
posted by Atlanta Ga Homes Real Estate at 3:26 PM
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