Why Leveraged ETFs Don’t Match Market Performance

No product on Wall Street draws more criticism than leveraged ETFs. Leverage funds are designed to multiply the performance of indexes, but often do so poorly in the long run. The ProShares Ultra S&P500 ETF (SSO) tracks twice the daily return of the S&P500 index every day. If the S&P 500 is up 1%, then […]

The College Student’s Guide to Investing

So, you worked all summer and now you have some extra cash on hand, maybe $1,000 or more. If so, nice job! Now, do you take that $1,000 and spent it on beer all year? Or do you take that money and invest it? Well, if you spent it on beer, you will drink fine […]

Investing Tip #258: If the Market is Likely to Move Wide in Either Direction, Buy a Put and a Call Option

Outcome of a forthcoming event, such as a presidential election or the FED’s announcement, affects the market. But you are not sure in which direction it will move. You simultaneously purchase both a call and a put option with the same underlying asset, strike price and expiration date. You will make a profit depending on […]

Investing Tip #245: Use Derivatives for Hedging

If you are a producer or consumer of any commodity, you can buy or sell derivatives to hedge against fluctuations in the movement of underlying commodity prices. You can use options, futures or swap agreements to minimize uncertainties in your business. If you want to learn more check out these resources: A Total Beginner’s Guide […]

Investing Tip #222: Stocks Follow the Law of Supply and Demand

The movements of the stock markets are based on the Supply & Demand of shares. The share price of a company with a lower number of outstanding shares will move easily compared to a company with a larger number of outstanding shares.  O’Neil’s research shows that more than 95% of companies that have shown huge […]

Investing Tip #221: Understand Signal by Change in Daily Trading Volume While Price Declines

Stock price decrease accompanied by increases in volume indicates there is higher selling pressure. This shows people are selling their holdings. The price may decrease further. On the other hand if the price declines but with decrease in volume, it indicates there’s no significant selling pressure. The price may not decline further. If you want […]

Investing Tip #203: Never Invest Your Emergency Fund in the Stock Market

The stock market is unpredictable. In case of urgency, you may be forced to sell your investments even if the market is low. Hence you should keep a separate emergency fund with banks that you can access whenever required. The banks offer fixed deposits schemes that allow you to withdraw before maturity too. You should […]

Investing Tip #201: Big Institutions’ Actions Impact the Stock Market

Big mutual funds, pension funds, hedge funds and banks have strong buying power. They buy and sell in bulk. Their action influences the market. For example, if a stock is included in a market index such as DJIA and S&P,   the Index Funds make purchases of the stock to rebalance their portfolio. This pushes up […]

The Professional Trader: Treating the Market as a Place of Work

Trading coaches and expert investors often discuss the importance of treating investment as a business, with the financial markets representing a place of work. This ethos has heralded the emergence of dedicated and professional traders, who adopt a strategic and structured approach towards trading and consider it as a measurable, money making venture. This philosophy […]

Diebold Turnaround Could Create Value for Investors

Diebold’s products are used almost every day by people across the world.  Diebold is best known as the manufactures of ATMs. It is in the midst of a turnaround that could generate value for investors.  It is not a sexy story, and that has left it under covered.  Often in those circumstances, investors can find […]