Saturday, February 28, 2009
Warren Buffett still optimistic after rough 2008
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OMAHA, Neb. - Warren Buffett says the economic turmoil that contributed to a 62 percent profit drop last year at the holding company he controls is certain to continue in 2009, but the revered investor remains optimistic.
Buffett released his annual letter to Berkshire Hathaway Inc. shareholders Saturday morning, and detailed the worst of his 44 years leading the Omaha-based company. But in between the news of Berkshire's sharply lower profit and its nearly $7.5 billion investment and derivative losses, Buffett offered a hopeful view of the nation's future.
He said America has faced bigger economic challenges in the past, including two World Wars and the Great Depression.
"Though the path has not been smooth, our economic system has worked extraordinarily well over time," Buffett wrote. "It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead."
Within Berkshire, Buffett said the company's retail businesses, including furniture and jewelry stores, and those tied to residential construction, such as Shaw carpet and Acme Brick, were hit hard last year, and they will likely continue to perform below their potential in 2009.
But he said Berkshire's utility and insurance businesses, which includes Geico, both delivered outstanding results in 2008 that helped balance out the other businesses.
Berkshire's 2008 net income of $4.99 billion, or $3,224 per Class A share, was down from last year's $13.21 billion, or $8,548 per share, in 2007.
The two analysts surveyed by Thomson Reuters on average expected Berkshire to report a 2008 profit of $5,534.50 per share. But the estimates typically exclude one-time items.
Buffett estimates Berkshire's book value - assets minus liabilities - declined 9.6 percent to $70,530 per share in 2008. Berkshire's book value declined only one other time under Buffett, and that was a 6.2 percent decline in 2001.
But Berkshire's 9.6 percent decline still beat the S&P 500's 37 percent decline in 2008, the report said.
Buffett devoted nearly five pages of his letter to Berkshire Hathaway shareholders to explaining the role derivatives played in the company's investment losses last year.
Buffett said he initiated all of Berkshire's 251 different derivative contracts because he believes they were mispriced in Berkshire's favor.
"If we lose money on our derivatives, it will be my fault," Buffett said.
Berkshire has received $8.1 billion in payments for derivatives which can be invested until the contracts expire years from now.
But Berkshire has to estimate the value of its derivatives every quarter. Buffett says he supports that mark-to-market accounting, but the formula used to estimate that value can produce absurd results for long-term contracts.
Buffett said he made at least one major investing mistake last year by buying a large amount of ConocoPhillips stock when oil and gas prices were near their peak.
Berkshire increased its stake in ConocoPhillips from 17.5 million shares in 2007 to 84.9 million shares at the end of 2008.
Buffett said he did not anticipate last year's dramatic fall in energy prices, so his decision cost Berkshire shareholders several billion dollars.
Buffett says he also spent $244 million on stock in two Irish banks that appeared cheap. But since then, he's had to write down the value of those purchases to $27 million.
Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility businesses. And it has major investments in such companies as Wells Fargo & Co. and Coca-Cola Co.
By JOSH FUNK, AP Business Writer Josh Funk
Buffett released his annual letter to Berkshire Hathaway Inc. shareholders Saturday morning, and detailed the worst of his 44 years leading the Omaha-based company. But in between the news of Berkshire's sharply lower profit and its nearly $7.5 billion investment and derivative losses, Buffett offered a hopeful view of the nation's future.
He said America has faced bigger economic challenges in the past, including two World Wars and the Great Depression.
"Though the path has not been smooth, our economic system has worked extraordinarily well over time," Buffett wrote. "It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead."
Within Berkshire, Buffett said the company's retail businesses, including furniture and jewelry stores, and those tied to residential construction, such as Shaw carpet and Acme Brick, were hit hard last year, and they will likely continue to perform below their potential in 2009.
But he said Berkshire's utility and insurance businesses, which includes Geico, both delivered outstanding results in 2008 that helped balance out the other businesses.
Berkshire's 2008 net income of $4.99 billion, or $3,224 per Class A share, was down from last year's $13.21 billion, or $8,548 per share, in 2007.
The two analysts surveyed by Thomson Reuters on average expected Berkshire to report a 2008 profit of $5,534.50 per share. But the estimates typically exclude one-time items.
Buffett estimates Berkshire's book value - assets minus liabilities - declined 9.6 percent to $70,530 per share in 2008. Berkshire's book value declined only one other time under Buffett, and that was a 6.2 percent decline in 2001.
But Berkshire's 9.6 percent decline still beat the S&P 500's 37 percent decline in 2008, the report said.
Buffett devoted nearly five pages of his letter to Berkshire Hathaway shareholders to explaining the role derivatives played in the company's investment losses last year.
Buffett said he initiated all of Berkshire's 251 different derivative contracts because he believes they were mispriced in Berkshire's favor.
"If we lose money on our derivatives, it will be my fault," Buffett said.
Berkshire has received $8.1 billion in payments for derivatives which can be invested until the contracts expire years from now.
But Berkshire has to estimate the value of its derivatives every quarter. Buffett says he supports that mark-to-market accounting, but the formula used to estimate that value can produce absurd results for long-term contracts.
Buffett said he made at least one major investing mistake last year by buying a large amount of ConocoPhillips stock when oil and gas prices were near their peak.
Berkshire increased its stake in ConocoPhillips from 17.5 million shares in 2007 to 84.9 million shares at the end of 2008.
Buffett said he did not anticipate last year's dramatic fall in energy prices, so his decision cost Berkshire shareholders several billion dollars.
Buffett says he also spent $244 million on stock in two Irish banks that appeared cheap. But since then, he's had to write down the value of those purchases to $27 million.
Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility businesses. And it has major investments in such companies as Wells Fargo & Co. and Coca-Cola Co.
By JOSH FUNK, AP Business Writer Josh Funk
Labels: berkshire hathaway, ConocoPhillips, stock trading investing, warren buffett
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Tuesday, February 24, 2009
Bernanke: Recession may end in '09; Stocks climb
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NEW YORK – Federal Reserve Chairman Ben Bernanke has reassured Wall Street by telling Congress the recession might end this year.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009. But he also said "there is a reasonable prospect" the recession will end this year. He warned that a recovery will require getting credit and financial markets to operate normally.
While Bernanke's assessment of the economy helped ease some pressure on the market, it also came after days of heavy selling that left the Dow Jones industrial average and the Standard & Poor's 500 index near 12-year lows, so a bounce in stocks wasn't a surprise. Stocks made cheaper by the selloff attracted bargain-hunting traders. Also, some, better-than-expected quarterly numbers from Home Depot Inc. helped cool some anxiety about the economy.
Stocks were also up ahead of a speech by President Barack Obama. Beaten-down financial shares gained as investors hoped for better insight into the government's plans to aid the industry which is struggling with bad debt.
The White House said Tuesday that Obama will provide more details about his plans to help stabilize the financial system. He is also expected to make the case that more has to be done to revive the economy. The speech is scheduled for 9 p.m. EST.
The continued focus on the stability of the financial system comes a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.
Investors are hoping Obama's speech will give them a better sense of how the government will proceed in its efforts to alleviate the effects of a recession now in its 14th month.
In mid afternoon trading, the Dow rose 151.81, or 2.1 percent, to 7,266.59. On Monday, the major indexes tumbled more than 3 percent, including the Dow, which fell 251 points. It was the lowest close for the blue chips since May 7, 1997.
Broader stock indicators also rose Tuesday. The S&P 500 index rose 19.79, or 2.7 percent, to 763.12. On Monday, it logged its lowest finish since April 11, 1997.
The Nasdaq composite index rose 30.40, or 2.2 percent, Tuesday to 1,418.12.
The Russell 2000 index of smaller companies rose 10.00, or 2.5 percent, to 404.58.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume amounted to 762.1 million shares.
Many analysts expect the market to remain volatile for the foreseeable future.
Ryan Larson, head of equity trading at Voyageur Asset Management, said the market is looking for insights into the Treasury Department's plans to "stress test" the banks and remove the toxic assets from their books.
"The market is desperately looking for more clues to piece together this bailout," he said.
Rich Hughes, co-president of Portfolio Management Consultants in Los Angeles, said the stock market's rallies are likely to be based on hope or on rebounds from selloffs. He contends Wall Street still hasn't seen the wrenching decline that is often needed to scare investors from the market and set the ground for a lasting recovery.
"The underlying fundamentals just aren't there to support anything that's sustainable right now," he said. "We haven't seen the capitulation that you'd want to see before you'd get thoroughly enthused."
The market's slide has been tough on long-term savers. An investor who in 1997 had $50,000 in a fund that tracks the S&P 500 would have lost money; the fund would now be worth $46,256. Still, stocks tend to perform better after steep pullbacks and their long-term returns often outpace other investments.
Bond prices fell Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.77 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.30 percent from 0.29 percent Monday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 65 cents to $39.09 per barrel on the New York Mercantile Exchange.
Home Depot posted a loss but the nation's largest home improvement retailer's results topped expectations when excluding costs for shutting four home-improvement brands. The stock rose $1.79, or 9.6 percent, to $20.50.
Target Corp. and Macy's Inc. said fiscal fourth-quarter earnings fell sharply as shoppers cut back on purchases. Office Depot Inc. posted a loss for the quarter. Target fell 15 cents, or 0.5 percent, to $28.28, while Macy's rose 78 cents, or 10.5 percent, to $8.18.
JPMorgan Chase Co. rose 99 cents, or 5.1 percent, to $20.50 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to preserve capital to protect itself should the ongoing recession worsen. The decision will save the bank about $5 billion per year.
Stocks fell in Europe after Monday's drop on Wall Street. Britain's FTSE 100 fell 0.78 percent, Germany's DAX index fell 0.73 percent, and France's CAC-40 fell 0.73 percent. Earlier, Japan's Nikkei stock average fell 1.5 percent.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009. But he also said "there is a reasonable prospect" the recession will end this year. He warned that a recovery will require getting credit and financial markets to operate normally.
While Bernanke's assessment of the economy helped ease some pressure on the market, it also came after days of heavy selling that left the Dow Jones industrial average and the Standard & Poor's 500 index near 12-year lows, so a bounce in stocks wasn't a surprise. Stocks made cheaper by the selloff attracted bargain-hunting traders. Also, some, better-than-expected quarterly numbers from Home Depot Inc. helped cool some anxiety about the economy.
Stocks were also up ahead of a speech by President Barack Obama. Beaten-down financial shares gained as investors hoped for better insight into the government's plans to aid the industry which is struggling with bad debt.
The White House said Tuesday that Obama will provide more details about his plans to help stabilize the financial system. He is also expected to make the case that more has to be done to revive the economy. The speech is scheduled for 9 p.m. EST.
The continued focus on the stability of the financial system comes a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.
Investors are hoping Obama's speech will give them a better sense of how the government will proceed in its efforts to alleviate the effects of a recession now in its 14th month.
In mid afternoon trading, the Dow rose 151.81, or 2.1 percent, to 7,266.59. On Monday, the major indexes tumbled more than 3 percent, including the Dow, which fell 251 points. It was the lowest close for the blue chips since May 7, 1997.
Broader stock indicators also rose Tuesday. The S&P 500 index rose 19.79, or 2.7 percent, to 763.12. On Monday, it logged its lowest finish since April 11, 1997.
The Nasdaq composite index rose 30.40, or 2.2 percent, Tuesday to 1,418.12.
The Russell 2000 index of smaller companies rose 10.00, or 2.5 percent, to 404.58.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume amounted to 762.1 million shares.
Many analysts expect the market to remain volatile for the foreseeable future.
Ryan Larson, head of equity trading at Voyageur Asset Management, said the market is looking for insights into the Treasury Department's plans to "stress test" the banks and remove the toxic assets from their books.
"The market is desperately looking for more clues to piece together this bailout," he said.
Rich Hughes, co-president of Portfolio Management Consultants in Los Angeles, said the stock market's rallies are likely to be based on hope or on rebounds from selloffs. He contends Wall Street still hasn't seen the wrenching decline that is often needed to scare investors from the market and set the ground for a lasting recovery.
"The underlying fundamentals just aren't there to support anything that's sustainable right now," he said. "We haven't seen the capitulation that you'd want to see before you'd get thoroughly enthused."
The market's slide has been tough on long-term savers. An investor who in 1997 had $50,000 in a fund that tracks the S&P 500 would have lost money; the fund would now be worth $46,256. Still, stocks tend to perform better after steep pullbacks and their long-term returns often outpace other investments.
Bond prices fell Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.77 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.30 percent from 0.29 percent Monday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 65 cents to $39.09 per barrel on the New York Mercantile Exchange.
Home Depot posted a loss but the nation's largest home improvement retailer's results topped expectations when excluding costs for shutting four home-improvement brands. The stock rose $1.79, or 9.6 percent, to $20.50.
Target Corp. and Macy's Inc. said fiscal fourth-quarter earnings fell sharply as shoppers cut back on purchases. Office Depot Inc. posted a loss for the quarter. Target fell 15 cents, or 0.5 percent, to $28.28, while Macy's rose 78 cents, or 10.5 percent, to $8.18.
JPMorgan Chase Co. rose 99 cents, or 5.1 percent, to $20.50 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to preserve capital to protect itself should the ongoing recession worsen. The decision will save the bank about $5 billion per year.
Stocks fell in Europe after Monday's drop on Wall Street. Britain's FTSE 100 fell 0.78 percent, Germany's DAX index fell 0.73 percent, and France's CAC-40 fell 0.73 percent. Earlier, Japan's Nikkei stock average fell 1.5 percent.
Labels: ben bernanke, recession, stock trading investing, stocks
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Sunday, February 15, 2009
The Advantages Of Trading Stock Options
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Just recently, options in stock trading have been getting the attention they deserve from many traders. However, for quite some time now, investing on options has created quite a stigma in the market especially with the financial media and a few popular figures attaching such implications that trading options may be too risky or dangerous.
What you should knowing about trading options however, is that there are a lot of advantages that one can get from it. And as long as you are smart in handling your trades and with the use of the right strategies, you may be able to prevent risks from actually happening.
Cost Efficient
One thing about stock options is that they are well capable of leveraging or borrowing money in order to increase returns. It can be very possible for an investor to obtain option positions that copy stock positions without going overboard with the cost. A strategy known as a stock replacement, allows mimicking stocks possible but in a cost efficient way.
For example, for you to be able to purchase 200 shares of a $50 stock, you must pay $10,000. But if you were going to purchase a couple of $20 stock options, with the options representing 100 shares each, then you would only have to outlay $4,000 instead of $10,000. As an investor, you would be able to gain $6,000 for you to use in your discretion.
Of course, the whole process may not be as instant and as simple as the example provided. But if you are able to choose the right stock option for the process, then you may be successful in your attempts for this strategy.
High Potential Returns
Another fact about stock options is that you can actually spend less money, but still make almost the same profit. Because of this, you can surely expect to gain a much higher percentage of returns as compared to normal stock trading. Of course, this would mean that you can actually earn so much more and your investment can surely pay off.
More Investment Alternatives Are Offered
Another very good advantage in trading options is the fact that they can offer more strategic alternatives for investment as compared to traditional stocks. Because options are very flexible, there can be a lot of way to use them.
Take in mind that options are actually the rights to trading a particular stock, and so, there may be various ways that an investor can actually use these rights to benefit him or herself.
The use of these options allow an investor to trade not only through stock movements, but through the passage of time and unpredictability in the market as well. And this can be very beneficial because most stocks rarely move significantly. Options strategically offer alternatives for a trader to do business in every type of market.
These are only a few of the major advantages of trading stock options, but as you can see, they are enough reason to tell you that going into this type of market can really be beneficial. With the low costs, direct access to stock options through the Internet, and with such benefits at hand, it is no wonder why stock options trading have become a part of the financial circles these days.
Browse Stock Trading
What you should knowing about trading options however, is that there are a lot of advantages that one can get from it. And as long as you are smart in handling your trades and with the use of the right strategies, you may be able to prevent risks from actually happening.
Cost Efficient
One thing about stock options is that they are well capable of leveraging or borrowing money in order to increase returns. It can be very possible for an investor to obtain option positions that copy stock positions without going overboard with the cost. A strategy known as a stock replacement, allows mimicking stocks possible but in a cost efficient way.
For example, for you to be able to purchase 200 shares of a $50 stock, you must pay $10,000. But if you were going to purchase a couple of $20 stock options, with the options representing 100 shares each, then you would only have to outlay $4,000 instead of $10,000. As an investor, you would be able to gain $6,000 for you to use in your discretion.
Of course, the whole process may not be as instant and as simple as the example provided. But if you are able to choose the right stock option for the process, then you may be successful in your attempts for this strategy.
High Potential Returns
Another fact about stock options is that you can actually spend less money, but still make almost the same profit. Because of this, you can surely expect to gain a much higher percentage of returns as compared to normal stock trading. Of course, this would mean that you can actually earn so much more and your investment can surely pay off.
More Investment Alternatives Are Offered
Another very good advantage in trading options is the fact that they can offer more strategic alternatives for investment as compared to traditional stocks. Because options are very flexible, there can be a lot of way to use them.
Take in mind that options are actually the rights to trading a particular stock, and so, there may be various ways that an investor can actually use these rights to benefit him or herself.
The use of these options allow an investor to trade not only through stock movements, but through the passage of time and unpredictability in the market as well. And this can be very beneficial because most stocks rarely move significantly. Options strategically offer alternatives for a trader to do business in every type of market.
These are only a few of the major advantages of trading stock options, but as you can see, they are enough reason to tell you that going into this type of market can really be beneficial. With the low costs, direct access to stock options through the Internet, and with such benefits at hand, it is no wonder why stock options trading have become a part of the financial circles these days.
Browse Stock Trading
Labels: advantages, options, stock, stock trading investing, trading
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Monday, February 9, 2009
Stock Trading Coaches
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Stock trading coaches are becoming ever more common, as the internet brings the world of financial trading within the reach of the masses. Modern computer technology has meant that the demand for stock trading coaches is now greater than ever, as people seek to take advantage of the new opportunities and get rich from the best penny stocks. Here we will show you how to go about choosing your stock trading coach.
Tip1 - The most important factor when selecting a stock trading coach is to look at the facts and figures. Coaches will try to sell their services by claiming a certain level of performance, and obviously you are looking for the highest figures possible within reason. There are obviously some numbers which are so high as to be unrealistic, and anyone who needs to invent his past is no good candidate for a coaching relationship.
Tip 2 - Be sure that a stock trading coach is exactly what you need. Having a coach in any endeavor can instil a sense of discipline into you that can reap great dividends. Coaches can give you a vital push, and they will demand effort and application. As world famous billionaire investor Warren Buffett has recently said, Risk comes from not knowing what you are doing. If your knowledge of stock trading is limited, a coach may be just what you need to help you make the big bucks from the best penny stocks.
Tip 3 - Be vary careful of unrealistic prices. You tend to get what you pay for in this world, and anything which seems too good to be true usually is. Stock trading coaches are certainly no exception. If someone genuinely has exceptional ability to make judgements in the stock markets, why aren't they making huge amounts of money with that knowledge instead of running coaching programs for peanuts? Some investors genuinely enjoy sharing their knowledge, but they will charge a market price for doing so.
Tip 4 - Don't make a long term commitment to a stock trading coach before you have had a trial period during which you can test the service. Anybody who is prepared to back their judgement by proving themselves to you first is far more likely to be a genuine prospect than someone who wants to take the front money and run. If a coach will not give you a trial, you should probably wonder why. It's hard to find the best penny stocks with a coach that isn't working out. Stock trading coaches can turn an unprofitable trader into a highly profitable one, if you can find the right one. Check out the links below to discover how you can access the best penny stock tips.
Source by http://ezinearticles.com/?Best-Penny-Stocks---How-To-Spot-Them-In-4-Easy-Steps&id=1035577
Tip1 - The most important factor when selecting a stock trading coach is to look at the facts and figures. Coaches will try to sell their services by claiming a certain level of performance, and obviously you are looking for the highest figures possible within reason. There are obviously some numbers which are so high as to be unrealistic, and anyone who needs to invent his past is no good candidate for a coaching relationship.
Tip 2 - Be sure that a stock trading coach is exactly what you need. Having a coach in any endeavor can instil a sense of discipline into you that can reap great dividends. Coaches can give you a vital push, and they will demand effort and application. As world famous billionaire investor Warren Buffett has recently said, Risk comes from not knowing what you are doing. If your knowledge of stock trading is limited, a coach may be just what you need to help you make the big bucks from the best penny stocks.
Tip 3 - Be vary careful of unrealistic prices. You tend to get what you pay for in this world, and anything which seems too good to be true usually is. Stock trading coaches are certainly no exception. If someone genuinely has exceptional ability to make judgements in the stock markets, why aren't they making huge amounts of money with that knowledge instead of running coaching programs for peanuts? Some investors genuinely enjoy sharing their knowledge, but they will charge a market price for doing so.
Tip 4 - Don't make a long term commitment to a stock trading coach before you have had a trial period during which you can test the service. Anybody who is prepared to back their judgement by proving themselves to you first is far more likely to be a genuine prospect than someone who wants to take the front money and run. If a coach will not give you a trial, you should probably wonder why. It's hard to find the best penny stocks with a coach that isn't working out. Stock trading coaches can turn an unprofitable trader into a highly profitable one, if you can find the right one. Check out the links below to discover how you can access the best penny stock tips.
Source by http://ezinearticles.com/?Best-Penny-Stocks---How-To-Spot-Them-In-4-Easy-Steps&id=1035577
Labels: coach, coaches, stock trading, stock trading investing, tips
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Wednesday, February 4, 2009
The Advantages Of Online Stock Trading
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The Internet is an advanced and handy tool in modern society. Gone are the days that its use limited to learning and socializing. But now, a growing trend for doing business, banking and investing has emerged through online networks. In fact, one of the fastest growing markets online is stock trading.
However, if you have grown accustomed to the traditional methods of the stock exchange, then having quite a few hesitations with buying and selling stocks online is understandable and quite normal.
But what you should know is that online trading can be very efficient and beneficial to you as an investor. With much perks on factors such as time, control, and cost, you can surely get used to how easy the hi-tech process can be. Here are the most evident advantages of online stock trading:
Faster Transactions
As what every investor and broker should know, time is a very essential element in trading stocks. The effect of whether or not you would be able to make profit or experience loss in your transaction will greatly depend on the time it takes to execute the trade.
In the traditional set-up, you have to call your broker and ask him to buy or sell the stock. Then this would then be followed by a process wherein your broker will negotiate with the trader for the price of the stock. Then, you would have to wait for your broker to call you for the price before you can make a decision on whether you should buy or sell. And then if you do decide to buy or sell the stock, your broker would have to make another call to order through the trader.
However, when you do transactions online, all it takes to be able to buy or sell stocks would be a single click of the mouse. Through this, a quicker exchange can be made, which may also ensure faster earnings.
Closer Control
Since trading is done through the Internet, you can watch over your stocks more closely. After all, you can always log in on your account anytime and view how your shares are fairing in the market anytime you want. This empowers you to be aware of the performance of your investment instead of having to wait for reports in the mail that may not come as often as you would like.
Through online exchange, you can also be free to make your own decisions to buy or sell stocks instead of relying on whether or not your broker will agree to execute a certain trade you might be interested in. In a way, you are empowered to trust your own intuition and take your own risks with your investments.
Lower Fees & Commissions
Another very good benefit of online stock trading is the lower stockbroker commissions and that you will have to pay as compared to the traditional method. If you trade in a sufficiently large volume of stocks, it can even be possible for you to be able to negotiate your broker's fees. Thus, you can save a lot of money and even earn more.
Although keeping up with the times and going hi-tech may seem quite intimidating at first, especially if you are used to more traditional methods, moving forward can always become a much more practical and reliable step for you to take in the long run.
With the many benefits that online stock trading can give you, buying or selling your stocks through the Internet can certainly be a great way to participate in the stock market. Not only are things made easier and more convenient for you, you can even save so much time and money, as well as gain more control on your investments.
Browse Stock Trading
However, if you have grown accustomed to the traditional methods of the stock exchange, then having quite a few hesitations with buying and selling stocks online is understandable and quite normal.
But what you should know is that online trading can be very efficient and beneficial to you as an investor. With much perks on factors such as time, control, and cost, you can surely get used to how easy the hi-tech process can be. Here are the most evident advantages of online stock trading:
Faster Transactions
As what every investor and broker should know, time is a very essential element in trading stocks. The effect of whether or not you would be able to make profit or experience loss in your transaction will greatly depend on the time it takes to execute the trade.
In the traditional set-up, you have to call your broker and ask him to buy or sell the stock. Then this would then be followed by a process wherein your broker will negotiate with the trader for the price of the stock. Then, you would have to wait for your broker to call you for the price before you can make a decision on whether you should buy or sell. And then if you do decide to buy or sell the stock, your broker would have to make another call to order through the trader.
However, when you do transactions online, all it takes to be able to buy or sell stocks would be a single click of the mouse. Through this, a quicker exchange can be made, which may also ensure faster earnings.
Closer Control
Since trading is done through the Internet, you can watch over your stocks more closely. After all, you can always log in on your account anytime and view how your shares are fairing in the market anytime you want. This empowers you to be aware of the performance of your investment instead of having to wait for reports in the mail that may not come as often as you would like.
Through online exchange, you can also be free to make your own decisions to buy or sell stocks instead of relying on whether or not your broker will agree to execute a certain trade you might be interested in. In a way, you are empowered to trust your own intuition and take your own risks with your investments.
Lower Fees & Commissions
Another very good benefit of online stock trading is the lower stockbroker commissions and that you will have to pay as compared to the traditional method. If you trade in a sufficiently large volume of stocks, it can even be possible for you to be able to negotiate your broker's fees. Thus, you can save a lot of money and even earn more.
Although keeping up with the times and going hi-tech may seem quite intimidating at first, especially if you are used to more traditional methods, moving forward can always become a much more practical and reliable step for you to take in the long run.
With the many benefits that online stock trading can give you, buying or selling your stocks through the Internet can certainly be a great way to participate in the stock market. Not only are things made easier and more convenient for you, you can even save so much time and money, as well as gain more control on your investments.
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Labels: advantages, benefits, online, stock trading, stock trading investing
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