The basis for technical analysis is the belief that stock prices move in predictable patterns. All the factors that influence price movement – company performance, the general state of the economy, natural disasters – are supposedly reflected in the stock market with great efficiency. This efficiency, coupled with historical trends produces movements that can be analyzed and applied to future stock market movements.

Technical analysis is not intended for long-term investments because fundamental information concerning a company’s potential for growth is not taken into account. Trades must be entered and exited at precise times, so technical analysts need to spend a great deal of time watching market movements.

Investors can take advantage of both upswings and downswings in price by going either long or short. Stop-loss orders limit losses in the event that the market does not move as expected.

There are many tools available to the technical analyst. Literally hundreds of stock patterns have been developed over time. Most of them, however, rely on the basic concepts of ’support’ and ‘resistance’. Support is the level that downward prices are expected to rise from, and Resistance is the level that upward prices are expected to reach before falling again. In other words, prices tend to bounce once they have hit support or resistance levels.

Charts

Technical analysis relies heavily on charts for tracking market movements. Bar charts are the most commonly used. They consist of vertical bars representing a particular time period – weekly, daily, hourly, or even by the minute. The top of each bar shows the highest price for the period, the bottom is the lowest price, and the small bar to the right is the opening price and the small bar to the left is the closing price. A great deal of information can be seen in glancing at bar charts. Long bars indicate a large price spread and the position of the side bars shows whether the price rose or dropped and also the spread between opening and closing prices.

A variation on the bar chart is the candlestick chart. These charts use solid bodies to indicate the variation between opening and closing prices and the lines (shadows) that extend above and below the body indicate the highest and lowest prices respectively. Candlestick bodies are coloured black or red if the closing price was lower than the previous period or white or green if the price closed higher. Candlesticks form various shapes that can indicate market movement. A green body with short shadows is bullish – the share opened near its low and closed near its high. Conversely, a red body with short shadows is bearish – the stock opened near the high and closed near the low. These are only two of the more than 20 patterns that can be formed by candlesticks.

Since the financial markets have been turned up-side down and banks are not lending, one method of financing has gained a lot of attention –securities based lending.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

For those with money invested in marketable securities, there is a golden opportunity to cash-in on the tremendous RE investment opportunities now available.  Today, there are multiple commercial & residential RE properties available for about 30% to 50% of what they were only two years ago.

If you are a forward-thinking investor who wants to retain the future ownership of your assets as well as leverage the present value of your securities for immediate cash needs, this can be a terrific program.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

Earnings per Share
The overall earnings of a company is not in itself a useful indicator of a share’s worth. Low earnings coupled with low outstanding shares can be more valuable than high earnings with a high number of outstanding shares. Earnings per share is much more useful information than earnings by itself. Earnings per share (EPS) is calculated by dividing the net earnings by the number of outstanding shares. For example: ABC company had net earnings of $1 million and 100,000 outstanding shares for an EPS of 10 (1,000,000 / 100,000 = 10). This information is useful for comparing two companies in a certain industry but should not be the deciding factor when choosing shares.

Price to Earning Ratio
The Price to Earning Ratio (P/E) shows the relationship between share price and company earnings. It is calculated by dividing the share price by the Earnings per Share. In our example above of ABC company the EPS is 10 so if it has a price per share of $50 the P/E is 5 (50 / 10 = 5). The P/E tells you how much investors are willing to pay for that particular company’s earnings. P/E’s can be read in a variety of ways. A high P/E could mean that the company is overpriced or it could mean that investors expect the company to continue to grow and generate profits. A low P/E could mean that investors are wary of the company or it could indicate a company that most investors have overlooked.

Either way, further analysis is needed to determine the true value of a particular stock.

Price to Sales Ratio
When a company has no earnings, there are other tools available to help investors judge its worth. New companies in particular often have no earnings, but that does not mean they are bad investments. The Price to Sales ratio (P/S) is a useful tool for judging new companies. It is calculated by dividing the market cap (stock price times number of outstanding shares) by total revenues. An alternate method is to divide current share price by sales per share. P/S indicates the value the market places on sales. The lower the P/S the better the value.

Price to Book Ratio
Book value is determined by subtracting liabilities from assets. The value of a growing company will always be more than book value because of the potential for future revenue. The price to book ratio (P/B) is the value the market places on the book value of the company. It is calculated by dividing the current price per share by the book value per share (book value / number of outstanding shares). Companies with a low P/B are good value and are often sought after by long term investors who see the potential of such companies.

Dividend Yield
Some investors are looking for shares that can maximize dividend income. Dividend yield is useful for determining the percentage return a company pays in the form of dividends. It is calculated by dividing the annual dividend per share by the share’s price per share. Usually it is the older, well-established companies that pay a higher percentage, and these companies also usually have a more consistent dividend history than younger companies.

Since the financial markets have been turned up-side down and banks are not lending, one method of financing has gained a lot of attention –securities based lending.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

For those with money invested in marketable securities, there is a golden opportunity to cash-in on the tremendous RE investment opportunities now available.  Today, there are multiple commercial & residential RE properties available for about 30% to 50% of what they were only two years ago.

If you are a forward-thinking investor who wants to retain the future ownership of your assets as well as leverage the present value of your securities for immediate cash needs, this can be a terrific program.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

There are many different stock indexes, the most common in the United States being the Dow Jones Industrial Average, the NYSE Composite index, and the S&P 500 Composite stock Price Index. stock indexes give an overall perspective about the economic health of a particular industry or share exchange.

There are several different ways to calculate indexes. An index based solely on the price of stocks is called a ‘price weighted index’. This type of index does not take into consideration the importance of any particular stock or the size of the company. An index which is ‘market value weighted’, on the other hand, takes into account the size of the companies. That way, price shifts of small companies have less influence than those of larger companies. Another type of index is the ‘market-share weighted’ index.  This type of index is based on the number of shares rather than their total value.

Index Funds

As well as giving an overall grade to a particular economy, indexes can also be an investment instrument.  Mutual funds based on indexes are known as ‘passively managed mutual funds’ and have been shown to consistently outperform managed funds. Mutual funds based on an index simply duplicate the holdings where the index is based on. Thus if the Dow Jones rises by 1% the fund based on the Dow Jones also rises by the same amount. This has the advantage of lower costs for research and transactions – savings that can be passed on to the investor who participates in these funds.

The Big Indexes

The Dow Jones Industrial Average is one of the best-known indexes in the United States. It follows the stock movements of 30 of the most influential companies in America including General Electric, Coca Cola and General Motors. It is a ‘price-weighted average’ index – thus giving more influence to more expensive shares. Some analysts feel that the price-weighting does not give an accurate picture of stock market movements and that 30 companies are not enough to form an accurate assessment.

The S&P 500 Index is based on 500 United States corporations. These companies are carefully chosen to represent a broad slice of economic activity. It is second in influence after the Dow Jones and is felt to be an accurate predictor of the state of the United States economy.

Outside of the United States the most influential index is the FTSE 100 Index.  This is based on 100 of the largest companies listed on the London stock Exchange. It is an indicator of the British economy and is one of the biggest indexes in Europe. Other important non-US indexes are the CAC 40 from France and the Nikkei 225 from Japan.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

With the advanced trading system of short selling, traders have discovered a new way to trade on the stock market: pessimistically. Short sellers hope for the decline of price on a certain stock so they can sell back the stock at a cheaper price than they sold it and pocket the difference.

Because short selling deals with borrowed securities, securities lending has become a huge business. To learn more about it, check out Naked Short Selling: The Illegal Hacking of the U. S. Financial System, an informative E-book that will help clarify the entire system.

However, a large risk has entered the stock exchange when it comes to short sellers: naked short sellers. Naked short sellers sell the stock short; however, they do not in fact own the borrowed stock and thus are selling their clients nothing but ‘naked’ (non existent) stock.

Basically what happens is when a short seller sells the borrowed securities to a client, he has three days to deliver the goods. However, if the short seller is selling ‘naked’ stock, then the goods are never actually delivered because they are never in the short seller’s possession.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

So now what? A naked short seller has failed to deliver leaving the buyer with nothing.

What happens next?

This is where the term ‘buying-in’ comes into action.

Due to the outburst of naked short sellers, the process of securities lending is bombarded with ‘failure to deliver’ issues. Therefore ‘buy-in notices’ are a regular occurrence.

Buying-in is the process where an investor is forced to repurchase the shares because the seller did not deliver the stocks. It is unfortunate for the buyer as he got ripped up. However, it is also unfortunate for the short seller as he will be forced to pay the difference in goods.

This is how it works: Once the allotted time for the goods to be delivered is past overdue (usually 10 days), then the unsatisfied buyer will notify the exchange about this issue, requesting a ‘buy-in’. During this time, a ‘buy-in’ notice will be sent to the seller of the borrowed securities who failed to deliver. If the seller fails to answer, then the broker will have to pay on their behalf. The seller will have to pay the broker back at whatever the shares are then worth.

Make sense or still confused? If so, for a better understanding check out Naked Short Selling: The Illegal Hacking of the U. S. Financial System.

Here’s an example. Say Dave bought 10,000 shares on XPY for $1.00 each from John. John claimed to borrow the shares from FRD but did not. When Dave does not get his shares, he puts in a buy-in notice. John does not answer this buy-in notice which means his broker, Bob must pay. Dave purchases 10,000 shares from Bob at $1.10 per share. John will be forced to pay this difference.

‘Buying-in’ is a hassle, yes. However, it is a needed due to the illegal process of naked short sellers. This is just one of the many issues caused by these abusive short sellers.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

It is generally accepted that the high-end real estate is feeling the brunt of the credit crisis right now. Given the higher unemployment, the uncertainty about the future of expensive properties, and the loss of a liquid jumbo lending market across the nation, I have yet to see any analysts bullish on properties worth more than $1 million. The “lower” end properties, however, are benefiting from low interest rates, renewed attention from mortgage investors and the US government, and demand for foreclosure sales. Interesting times…

What happened Monday in the markets? Well, after an ugly Friday afternoon, fixed income securities came roaring back with prices improving and rates inching lower. Most investors had intra-day price improvements. Locks and originations are down somewhat, which helps, The Fed was in doing their usual buy-back of securities, and the stock market losing a little steam didn’t hurt bonds either. For mortgage-backed securities, a 4.5% coupon security (which would contain 4.75-5.125% mortgages) is priced at about a .5 discount. But by the time an investor adds their servicing released premium of 1-2 points, suddenly the secondary market is paying .5-1.5 over par for these loans. There is still profit in originations!

We have the 2-yr auction today. Who will pony up to buy a piece of the $42 billion and earn about 1.02% for two years? We’ll see, but many expect it to go well. Ben Bernanke has been nominated by Obama for a second term as Federal Reserve Chief, which is helping to calm markets. We will also have the S&P/Case Shiller Index, and at 7AM PST we’ll have the Consumer Confidence numbers. Mortgage prices are roughly unchanged from Monday afternoon, and the 10-yr is chopping around 3.50%.

As noted above, Bernanke has been nominated for a second term. His nomination for a second four-year term, which would start in late January, requires Senate approval and was endorsed by the head of the Banking Committee, Christopher Dodd. So don’t look for too many surprises during the process.

Do you remember how there was a public opinion period for the HVCC, which passed, and then when HVCC was put in place everyone was upset? Well, apparently the Fed is addressing how mortgage loan officers are paid. Given that a loan originator or mortgage broker is any person who for compensation or other monetary gain arranges, negotiates, or otherwise obtains an extension of consumer credit for another person; you’ll have to check out the website below. I don’t have the attention span to go through the entire document, but it doesn’t look good!

Bank of America has agreed to pay $150 million to settle a lawsuit alleging Merrill Lynch executives mislead investors about the bank’s condition. The suit targeted a number of Merrill Lynch executives and board members, including the former CEO. We all remember that Bank of America formally acquired Merrill Lynch at the start of the year after agreeing to buy the struggling investment bank last fall.

In news that surprised no one, Taylor, Bean & Whitaker filed for Chapter 11 bankruptcy protection and said it may liquidate, three weeks after it closed its mortgage lending business. TBW said it plans to operate on a scaled-down basis as it works to recover, restructure and possibly liquidate its assets is not an easy task with more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

With so much involved in the day-to-day operations of running a business, many small business owners place investing in the back of their minds. However, this can be a dangerous way to operate. After all, when you’re the boss, you’re also in charge of your own retirement plan and in finding ways to reinvest in the company without damaging the capital you’ve already built.

Here are a few key tips in small business investing:

1. Your business is part of your portfolio.

When deciding on an investment strategy for your small business, do not neglect to consider your business as a part of your investment portfolio, since you may be able to tap into some of your existing equity or value in order to make new gains.

1. Tone down the entrepreneur.

When considering your investment strategy for your small business, consider risk. While the entrepreneurial spirit can make a person a successful business owner, it may also make them a horrible investor by encouraging them to take on too much risk. Slow down and understand when and where to be aggressive in your investments.

1. Strategize for capital preservation.

While your personal portfolio may be built around simple growth, your small business investment portfolio should strategize for capital accumulation and preservation. That way, when lean economic times come, your small business can lean on its portfolio to help generate income.

1. Diversify outside your business.

Small business owners may want to invest in their industry; after all, it is the industry they know best. But try to avoid putting all of your investments in one industry. If the industry falls on hard times, your business and your portfolio will both take a beating.

1. Allocate your assets.

It may be tempting to put all of your money in one place, but you need to properly allocate your assets to make them work for you. Stocks can make you a lot of money in the long term but can be risky short term; bonds are less volatile than stocks but also have a lesser yield, and cash in the form of savings and money market accounts do not earn much in comparison. Talk to a financial planner about properly allocating your assets to make your money work best for you and your goals.

6.  Talking with a financial planner.

This is probably one of the most important you can make. When making decisions on how to build your small business investment portfolio, consult someone who is as good as his or her job as you are at yours. Your financial planner can look at your business, manage risk, and help you to define goals that make sense for your business. Talking to a financial planner will ensure that you create an investment portfolio that makes good financial sense now and for the future.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

The ’stock Exchange’ is the correct term for the physical location for trading stocks. Each country may have many different stock exchanges and usually a particular company’s stocks are traded on only one exchange, although large corporations may be listed in several different locations.  Click here for information about Non-Purpose, Non-Recourse Securities Loans

Share exchanges exist throughout the world and it is possible to buy or sell shares on any of them. The only restriction is the opening hours of each exchange. Both the NYSE and Nasdaq for example operate from 9:30 a.m. to 4:00 p.m. Eastern Time from Monday to Friday. Other exchanges have similar opening hours based on their local time. If you want to trade on the Hong Kong stock Exchange your order will be executed sometime between 9:30 p.m. and 4:00 a.m. New York time.

The major share exchanges of the world are located in Japan (Tokyo stock Exchange), India (Bombay share Exchange), Europe (London stock Exchange, Frankfurt stock Exchange, SWX Swiss Exchange), the People’s Republic of China (Shanghai stock Exchange) and the United States.  The major exchanges in the US are the NYSE, Nasdaq, and Amex.

stock markets closely follow the economic health of a country. When the economy is doing well the market is bullish.  Bull markets occur during times of high economic production, low unemployment and low inflation. Bear markets, on the other hand, follow downtrends in the economy. Inflation and unemployment are rising and stock prices are falling.

Fluctuations in share prices are also driven by supply and demand, which in turn are determined to a large extent on investor psychology. Seeing a stock rise in price may cause investors to jump on the bandwagon and this rush to buy drives the price even faster. A falling price can have the same effect. These are short term fluctuations. share prices tend to normalize after such runs.

The stock exchange is only one of many opportunities to invest. Other popular markets include the Foreign Exchange Market (FOREX), the Futures Market, and the Options Market.

The FOREX is the biggest (in terms of value of trades) investment market in the world. FOREX traders buy one currency against another and can profit from small changes in value. Most FOREX trades are entered and exited in one 24 hour span, and traders have to keep a close watch on the market in order to make profitable trades.

The Futures Market is a market of contracts to buy and sell goods at specified prices and times. It exists because buyers and sellers of goods wish to lock in prices for future delivery, but market conditions can make the actual futures contract fluctuate considerably in value. Most investors in the futures market are not interested in the actual goods – only in the profit that can be realized in trading the contracts.

The Options Market is similar to the Futures Market in that an option is a contract that gives you the right (but not the obligation) to trade a share at a certain price before a specified date. They can be traded on their own or purchased as a form of insurance against price fluctuations within a certain time frame.

All three of these markets are quite risky and require considerable knowledge and experience to prevent substantial losses. They also require close attention to market movements. stocks, on the other hand, are less risky because movements of the market are usually gradual. Although short term investment strategies are possible, most view stocks as long term investments.

Click here for information about Non-Purpose, Non-Recourse Securities Loans

Green Funds are funds that invest in companies that are good for the global environment. Typically these companies will either be engaged directly in helping the environment,like innovative recycling, waste management, asbestos removal companies. Or, they have clean, sustainable, Green business models, meaning that their processes are not environmentally harmful

These Green funds have been gaining popularity recently as more and more investors are starting to think about helping the environment. Warnings of global warming and increasing rates of natural disasters are pretty spooky, and many believe that if we don’t start taking care of the environment, this Earth may not be a very nice place in the near future.

Green Energy mutual funds have interesting possibilities. Today, alternative Energy is everybody’s green choice. The only thing is, it’s not quite the time to go Green with alternatives yet. Most of these things like wind energy, solar energy, fuel cells, etc. are still in their developmental stages. That will mean that stuff is expensive and are not very profitable.

If you decide to dabble in a mutual fund investing, you will be faced with a slight challenge, which mutual fund do I choose? A great way to start this researching different funds’ past performance records and future goals. Along with this you should also consider the fees the mutual fund charges, it is usually a good idea to go with a fund that offers a low expense ratio and will avoid funds with additional sales charges.

Click here for information about Non-Purpose, Non-Recourse Securities Loans