Investment Decisions Can Be Aided By These Three Ratios

By Christopher Fitch

If you have ever made an investment decision and regretted it shortly after the trade was executed, you are not alone. Consider the following checklist consisting of three, basic pre-trade points. While these three points are not considered exhaustive, following them will easily help eliminate or at least reduce those post-trade doubts.

Without question, the most important consideration when it comes to purchasing a security is to understand the amount of risk it will bring to your portfolio. Since risk is virtually impossible to calculate, the next-best alternative is Beta, which is a measure of a security's volatility relative to the overall market's. Beta can be found at Yahoo! Finance.

Beta compares a stock's volatility to the overall market's. At 1.0, a security will match the market's movement. At a Beta of 3.0, that same security will move 3 times more than the market will. So, if he market rises by 2%, the security with a Beta of 3.0% will rise by 9%.

A second valuable figure to know is the Price to Earnings ratio that accompanies a security. While this fact alone will not determine whether or not one should invest in a particular security, it certainly helps the investor understand how that particular security's price compares to others in its sector. A Price to Earnings ratio of 6 for ABC Inc indicates that an investor is paying $6 for every $1 in earnings. If all of the other securities in that sector have P/E ratios of 30, then there is a reason to want to investigate why.

A third valuable statistic is the Earning Per Share (EPS) value of a share. This tells investors how much each share has contributed to the earnings of the company. So, an EPS of $7 tells someone who owns 100 shares that his or her ownership stake entitles him or her to $700 ($7 X 100 shares = $700). Alone, EPS is not really very useful, but when compared to other shares that perform in the same sector, it can provide investors with red flags or prompt them to do more digging (remember, if a company has more shares outstanding, the EPS will be diluted).

Beta, Price to Earnings and Earnings per Share do not collectively provide a green light or red light. In most cases, some sort of red flag will go up when investigating these figures and comparing them to other shares. These red flags should lead investors to the company's financial statements and accompanying notes to see what the company is really about and whether this is the type of investment they want to make. And with more time spent studying the company, the more comfort (or discomfort) an investor will have before making investment decisions. And that, after all, is the whole point. - 23200

About the Author:

Christopher Fitch is the founder of the Mutual Fund Site, a website that has been actively discussing Bond Funds while other sites have avoid the topic.

Buying Foreclosures As Investment Property

By Clark Walker

There are a lot of foreclosed homes that people can look at, in terms of investing in property with a view to making profits. At the end of the day, it is well known that if you want lasting financial security, investing in real estate is very sound and makes immense sense.

Foreclosure auctions are frequently cited in the media as a way for a smart investor to make quick profits. And while auction properties can certainly be profitable, the quickest thing about buying a home in an auction is the sale itself. Foreclosure auctions offer the variety of price, size and location to suit any investment property needs. Currently, the foreclosure market is hot, more and more individuals are facing foreclosure causing foreclosure auctions to be occurring continuously. These auctions can be very exciting, but don't end up in a bidding war and lose sight of what the value of the property truly is. Set a budget and stick to it.

The key to making a killing in real estate is to be able to buy a property at a price that is much lower than what it is worth and then not only selling it higher, but also perhaps weighing the rental option too. Many people also get good deals through the bank foreclosure routes, where apartments, condos, houses and other real estate can be bought at a price that is well below the going market rate. In a property that is being auctioned, you do not have the option to inspect the property, and when you get what is a cheap price, you may have to factor in some higher costs in terms of repair and maintenance too.

Dealing with banks on property has its own set of hassles. Banks are known to be quite unresponsive, and make you work much harder, including not taking calls and perhaps making you wait too long after the offer has been made. As banks cut their commissions, the agents of the buyer may lose out on money, which means the agents have to really slug it out to get deals for clients.

Foreclose auctions are becoming the rage nowadays. The main reason is that banks and government agencies want to get rid of property at the earliest, which also implies that you can get the cheapest rates possible during the distress sales that occur at this time. The bank REO department coordinates the bank foreclosure process and in most cases the discount is small as banks would like to get their money back to the largest extent.

When it comes to foreclosure listings, the dealing is between the individual and the bank or the mortgage lender. This means there is some scope of price banding and flexibility. The foreclosure sales take into account the loan balance, accrued interest and attorney fees, plus costs dealing with the foreclosure process admin. In order to buy here, you must have your check ready to pay the full amount on the spot.

If you want to get an idea of what all is available in terms of foreclosed properties you can look online as there are many such listings available on a wide array of foreclosure websites. - 23200

About the Author:

Clark Walker uses Atlanta rental property to fund his passive income.

Developing a Stock Option Trading Strategy

By Cudazi Berry

Before we start any discussion about the building of a suitable or successful stock option trading strategy it helps to first accept one fact - you must do your home work i.e. you must do the research. Without complete understanding about the particular underlying asset you are primarily operating while blindfolded, or in other words, you are just speculating.

Naturally, any investor is going to have their own opinions and personal outlook, but the facts and the data are going to usually indicate where any particular issue is headed. This means that one of the first steps for any serious investor to make is to conduct thorough research about the vehicles in which they intend to place their money.

Options trading means recognizing when to buy a "call" or a "put" option, and what to do with it before it ends. This is in fact the base of any stock option trading strategy because it is the main way to earn money in this place.

In all reality, the true "strategy" arrives when you know what to do with any investment in the face of market trends. For example, common stock option trading strategy states that a bullish market or stock requires the purchase of call option because the asset will be going to gain in value. This is defined as a long call strategy. . On the other side, when a market or particular issue is declining (known as being "bearish") most investors set out to purchase put options. This is referred to as a long put strategy. Either way, the investor is usually hoping simply to see the item move far enough in the given direction to both cover the cost of the premium and to deliver a profit.

If the above paragraph is confusing in any way, it is quite likely that you need to enhance your knowledge about options trading. This is actually the key part of any sound strategy because an investor cannot make the right choices without first knowing all of the "basics" of options trading. Even if you are planning to hire a brokerage or financial firm to help you with developing your portfolio, you must understand what it means to operate in options trading if you are going to see the greatest returns.

Once you understand whether buying or selling options are right for the particular issue and current market trends, you will also need to understand any other factors that might affect the outcome of the investment. This is best done through study; and modern investors have the Internet as well as formalized, guided programs to help them reach their goals. - 23200

About the Author:

Contact our trading experts for more information on stock option trading strategy at Ideal Trading International.

Penny Stocks Trading - How To Trade And How Someone Can Make Money Trading Shares

By Eric Stein

Everyone has a friend who has made 100% or 1000% on this or that stock. Many of those stories involved penny stocks trading. If you are an investor you probably receive e-mail from gurus trying to sell you their penny stock picks or their system. There is even a penny stock picking robot out on the market.

Prior to following an expert's advice, you should always perform your own research on penny stocks. Penny stocks can be defined as stocks that trade for less than $5.00 per share, or below $3.00. Some experts consider penny stocks to only be those that trade below $1.00 per share.

Why are these low priced stocks so popular with traders. It is due to their low price and the small amount of capital required to enter into a trade. The possibility for high percentage gains are greater. If you buy a stock for $100 and it goes up $2.00, you have a 2% gain. If you buy a stock for $2.00 and it goes up only $1.00, you have a 50% gain.

You can find hundreds of websites and experts offering penny stock picks for a fee. There are some who will send you free picks. You can also find a local trader or possibly a friend who trades these cheaper stocks to help you learn ways to trade. If you decide to subscribe to a service, see if you can get a free trial first as this allow you to see the picks in action and to see if they are any good!

Penny stocks can be rewarding and lucrative, but it also takes effort. You cannot expect to buy a stock and then check back in a few months to see how much you made. After you purchase some shares, you need to monitor them closely. These low priced stocks often have quick spikes in price which is how you make your money. If you are not watching, you may miss that quick rise in price.

Most online brokers permit low priced stocks to be traded. However, watch out for extra fees on low prices shares. Some brokers do not like to deal with these cheap stocks and they may charge you for trading over 1000 shares or 10,000 shares. With low priced stocks, you will often trade large lots and these fees can subtract from your profits.

If you enjoy trading and playing the stock market, penny stocks trading can be a great way to earn some profit. To start trading, you do not need a large account of money. Even with a small account, good profits can be made. - 23200

About the Author:

Everyone has a friend who has made 100% or 1000% on Day Stock Trading. Many of those successes involve penny stocks trading. If you're an investor you most probably receive e-mail from gurus trying to sell you their penny stock picks or their system.

Two Popular Orlando Areas

By Jack Chambers

Orlando is extremely popular among tourists from the US and other countries as well on account of its many wondrous attractions like Disney World, SeaWorld and Universal Studios. The city is also the favorite haunt of celebrities and offers exciting real estate and property options for discerning customers.

Real estate in Orlando is one sector that is booming and it would make sense to check out some of the best areas in Orlando to invest in.

Kissimmee

Kissimmee happens to be one of the most exciting localities in Orlando to buy or rent property in. Given its close proximity to Disney World and Universal Studios with its special theme parks, the area has caught the fancy of many real estate developers and buyers alike. The city was incorporated way back in'83, when the name of Kissimmee was given to the erstwhile locality of Allendale, which was its original name. Kissimmee is accessible from all parts of the US as well as Florida. There is an Amtrak Station, Greyhound stop as well as a well connected airport that adds to the attractions of Kissimmee as a property developer's favorite. It is no wonder that Kissimmee has a population of around 60,000 which makes it quite a well populated and busy neighborhood in Orlando. It is not like town growth and development has been hastened only by the tourism sector. A lot of business as well as industrial growth has also contributed to the rapid enhancement of the place. One can choose from a variety of houses and condos to move into in Kissimmee.

St. Cloud

St. Cloud is located in the Osceola County of Florida and has a history that dates back to the'70s, when efforts were made to drain the area of swamps. This was followed by prevalence of sugarcane plantations and certain architecturally aesthetic buildings that are part of the architectural heritage of the country (some of the original Orlando investment property). The most captivating attractions in the close vicinity of St. Cloud include the inimitable Disney World, Reptile World Serpentarium, Glades Adventure, Clarion Resort and Waterpark and the Good Samaritan Village. It is really no wonder that the growth of St. Cloud has been fuelled in no small measure due to its proximity to these notable tourist attractions.

Having come into being way back in the'70s, St. Cloud also has many modest priced houses dating back a hundred or more years. It also has many constructions of more recent vintage that are suitable for those who prefer modern residences. - 23200

About the Author:

Jack Chambers is a local resident in the Orlando area. He instructs people on Orlando investment properties while focusing on popular Orlando destinations.