April 14, 2008

After Hours Trading…

When you talk about the stock market, you may notice that some people are completely lost at the mere mention of it. This is because trading stocks is often a very lucrative thing you can do to raise your wealth, it is also very confusing and can be very time consuming. There are tricks that many learn about %LINK%, and there are some that always stick with a broker because they don’t have the time or the inclination to learn all there is to know about trading stocks and making money. When you add after hours trading to the equation, things get even more complicated.

After hours trading is much like it sounds. You might think of it as putting in your order to buy or sell after the market has closed and before it opens the next day. Your transaction would be completed as soon as the market opens. This used to be something that was only open to corporations or private entities that would be buying or selling large blocks of stock, but after hours trading is now something that almost anyone could do. However, for most, there really is no need for doing this.

You may very well find that your options for after hours trading are very limited. You may only be able to state you want to sell at a certain price - once that stock hits that price at any time - or that you want to sell so many shares. You cannot do all of the things you can normally do during the traditional hours of the stock market. You may find that you can do a lot of overseas trading, but that is because those markets are on their normal working hours. You should take with someone who helps you with your money if you really want to understand what you can and cannot do.

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Filed under stock market investing by Tony Hosea

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April 7, 2008

Understanding Penny Stocks Guide

Penny stocks are regarded as risky investment instruments for investors because of the many drawbacks associated with them. Illiquidity is usually cited as one of the more popular reasons for this risk as shares of penny stocks don't usually change hands due to the lack of market support and so selling them might not be that easy for investors.

Since a savvy investor looks into the liquidity of his potential investment, understanding penny stocks will help to guide the small cap trader around these challenges. While liquidity is important, its one of several factors. 

Remember that most penny stocks are illiquid for a reason: there is no interest in the future potential of the stock. This suggests that either the investing public is completely unaware of the stock (no exposure within the investing community) or  when there is a build up of volume, it leads to lower share prices (pump and dump, with insiders dumping their shares).

Before you start to trade penny stocks, its important to research more about the company's potential. Learn not just the  idea, but whether or not they can sell their idea. If the company isnt making money, you wont see a genuine increase in share price.

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April 3, 2008

What Are Some Stock Market Basics

How would you like to be the owner of a business, and never have to show up to work? Imagine no commuting, no rush hour traffic.  All you need to do is sit back, and watch those dollars roll in.

Most people don't look at owning stocks as owning a piece of a business, but in fact, you are a part owner and in many cases, you have a say.  The best benefit of all, you can earn money, help make decisions that impact the business and never have to show up to work for a single day.

Investing in stocks is the cornerstone of any financial portfolio. Without investing in stocks, you wont be able to realize your retirement dreams (unless you actually work for a huge company as CEO and will be getting a package big enough for you not to have to worry about investing, in which case, you should be playing golf and not reading this).

The key to realizing your retirement dream is to know the road to financial freedom. It all starts with an understanding of stock market investing. Its not just knowing how to buy; that just scratches the surface. You'll need to have a full appreciation of what goes on each and every day in the stock market.

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March 26, 2008

Equity vs Debt - Which Is The Better Investment?

Imagine for a moment that you are a small business owner. You have been running your widgets company quite successfully, employing a small staff and enjoying the profits rolling in. So why would you share these profits with literally thousands of people?

The answer is simple: in order to grow, a company needs to either go into debt, sell a part of the company in order to raise money.  So you can either finance that growth by borrowing from the bank, or by issuing bonds. This is called debt financing.  So while you own 100% of the company, you owe a lot of money.

On the other hand, you could sell stock in the company.  No interest payments, no money to pay back. Only the promise that the shares will be worth more some day.  Of course, now these new shareholders now can lay claim to the assets and profits of the company.  This is called equity financing.

An IPO is an Initial Public Offering is the first sale of a companies stock that is issued from a private company.

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