Strategies
What is the Stock Market Calendar Effect?
The Calendar Effect, as it applies to the stock market, is a collection of theories that seek to explain dramatic price changes in market indexes based on certain days, months, or times of the year. The term is sometimes also applied to multi-year effects, such as the U.S. Presidential cycle. While many of these [...]
The Basics of CFD (Contract for Difference) Trading
A contract for difference or “CFD” is a tradable instrument and a contract between two parties, a “buyer” and a “seller”, to document that the seller will pay the buyer the difference between an asset’s current value and the value of the asset at the time of the contract. If the difference is negative [...]
The Value Averaging Approach to Portfolio Management
Value averaging or “dollar value averaging” is an investing strategy whose popularity has increased in recent years. Under a value averaging strategy, the investor looks to invest greater amounts when share prices are lower and smaller amounts as share prices rise. The value averaging approach helps minimize the investor’s downside risk by protecting [...]
Five Things to Consider When Choosing
an Online Stock Broker
One of the main decisions a new stock investor is faced with is choosing an online stock broker. While the low commissions, powerful research tools, and account linking provided by online brokers has made online investing easy, hidden fees complicated pricing structures, and confusing offerings can create challenges for new investors. The key [...]
Minimize Portfolio Risk Through Asset Class Selection
An asset class is a group of securities that have similar characteristics and market tendencies. Most financial experts advise investors to diversify portfolio components across multiple asset classes in order to minimize risk and stabilize returns. While the three primary asst classes are stocks, bonds, and money market instruments, some investment professional add [...]
How and When to Use a Trailing Stop Order
A trailing stop order (or “trailing stop loss order”) is a stop loss order that sets the stop price at a fixed amount below the market price for long positions. For stock investors, the appeal of a trailing stop loss is that if the market price goes up, the stop loss order price increases [...]
Stock Investors: Test a Company’s Financial Strength
Choosing the right stocks for investment is about finding good stocks at the right price in order to enjoy capital appreciation and (in some cases) the income provided through dividend payments. In addition to proper valuation analysis, the investor also needs to confirm through the due diligence process that the company is financially [...]
Quiz: Determine Your Investment Risk Profile
When strategizing to achieve their financial goals, investors need to determine the appropriate mix of investment alternatives that can provide the desired level of return while keeping risk at a tolerable level, given their risk profile. Investment risk describes the chance that the actual return they will receive from an investment will be different [...]
Choosing a Stock Investment Strategy for You
Over the last two decades, the average person’s interest and participation in stock market investing has skyrocketed. Perhaps people have more clearly seen the power in owning stock and having a vested interest in the success or failure of a company of their choosing. While this type of investing was once seen as [...]
When and Why to Invest in Cyclical Stocks
A cyclical stock is a stock that tends to rise during good economic times and fall when the economy slows down. The performance of these stocks, and usually the stocks of its competitors, will vary depending on the phase of the business cycle. Identifying cyclical stocks is not difficult as the industries they [...]
