Use the current ratio when evaluating a stock

This article will tell the reader how to calculate a company's current ratio and exactly what this figure tells the investor about the company.

The first thing that you will need to do is obtain a company's balance sheet. Lets say that you wanted to calculate Wal-Mart's current ratio. An easy way to get their balance sheet is to go to www.yahoo.com and type in their ticker symbol in the quote area. On the left side of the page is a list of different pieces of data about the company. Under the Financial tab click "Balance Sheet". Next Click the Annual tab at the top.

Now we need to introduce the Current Ratio formula. It is as follows:

Current Assets / Current Liabilities

This step is easy. On the Balance Sheet find the Total Current Assets title and get their latest value recorded. Now under the Liabilities section locate the Total Liabilities section and get the latest value recorded. Now just plug these values into the formula discussed above. For example here is WMT's current ratio:

47,585,000 / 58,454,000 = .8140 (Current Ratio)

Now we need to understand what this figure means. Simply Put this figure tells us that Wal-Mart can convert their current assets to cash and pay off about 81% of their current Liabilities.

You might be asking yourself "Is this Good?" Now you might want to evaluate what some of WMT's competitors current ratio's are. Costco has a current ratio of 1.058 and Target has a Current Ratio of 1.529. Both of these companies can pay off all of their current liabilities and still have current assets left over. In this evaluation Target has the most favorable current ratio because they can pay off their liabilities a little over 1.5x with their current assets. Remember to always compare a companies current ratio to other companies within the same industry. In this example Wal-Mart would still have about 18-19% of their current liabilities remaining they used their current assets to pay off their obligations.

How to Read The Signs of The Stock Market

Reading signs from the stock market can be very difficult, but in the end the stock market is a very good predictor of many other things so those who can read the signs of the market are a step ahead of the rest.

The way the stock market trades over a period of time is generally a sign of something, but it can be very difficult to discern exactly what it is. Experience following the market and watching market trends helps a great deal. What else can help you read the stock market? Look below.

A large amount of volatility, or huge swings in both directions is generally a sign of uncertainty on Wall Street. This kind of volatility is particularly evident in bear markets and when the economy is going into a recession.

The stock market generally moves several months in advance of the economy as a whole. For example, if the economy is recovering from a recession the market generally bounces back six months or so before the actual economy does.

Wall Street hates uncertainty The number one thing that the stock market does not like is uncertainty. It has been said that the market can deal with good news and bad news, but it cannot handle uncertainty and I completely agree with that. Even when the news is bad, transparency is what the market wants.

When too many traders get either bullish or bearish it is often the time that a contrarian trade works well. Extremely high levels of strategists and traders that are bullish generally means the market is near a high and vice versa.

The number one most important rule of reading the stock market is to make sure you don't make too much of one day's trading. A day does not a trend make, so you'd be wise to keep that in mind!

by ehow.com

NOT Buy and Hold Stocks

"Buy and Hold" is a popular investment strategy. This article attempts to prove that strategy wrong, and provide a better alternative.

"Buy-and-Hold" is a passive investment strategy in which an investor buys stocks and holds them for long periods of time, regardless of movements in the market. An investor who uses a "buy-and-hold" strategy selects stocks, and once they are purchased, is not worried about short-term price movements or technical indicators.

Conventional investing wisdom tells us that with a long time horizon, stocks generate a higher return than other assets like bonds. But there is debate over whether a buy-and-hold strategy is actually better than an active investing strategy. Both sides have valid arguments. A buy-and-hold strategy has tax benefits, because long-term investments tend to be taxed at a lower rate than short-term investments. But now let's look at how a more active investing strategy would render greater returns.

Look at the picture for this article. The graph represents the performance of Apple's stock from July of 2005 to the end of 2006. The stock goes from $40 in July of '05 to $87 in February of '06. Then it goes back down by July of '06 and back up to $90 in December. If you were a buy-and-hold investor and bought Apple stock at $40 in July of 2005 and sold it at $90 in December of 2006, you would have made a great profit - more than doubling your money.

Now let's examine what a more active investor might have done (obviously hindsight is 20/20). Ideally, you would have bought the stock at $40. At that point, you must be constantly researching the stock, following its fluctuations, and looking for an opportunity to sell the stock to take some profit. If you were doing this, you might have been able to sell the stock at let's say $80.

Continuing to follow your stock, you would have had the opportunity to buy Apple stock back at around $50, and sold it after it went back up past $85 to $90. This strategy of active investing obviously has the potential to generate much greater returns than the typical buy-and-hold style. * I will not attempt to teach in this article how exactly to know when to buy and when to sell a stock (I have written other articles titled "How to Know When to Buy a Stock" and "How to Know When to Sell a Stock"). But through reading books and practicing yourself, you will be able to create your own investments strategy that best suits your personality and needs.

By how.com

Invest in the Stock Market During this Financial Crisis

Our economy has experienced some tumultuous times of late. Has the market hit a bottom? Is it time to jump back in and invest in the stock market....?

The stock market has dropped about 37% in the past year. Investment accounts and retirement funds have undoubtedly plummeted as well. It is tough to know what to do in this environment. Experts disagree with each other daily on CNBC. The big mutual fund managers have lost money too. I don't pretend to be any smarter than all the experts. So you can take my advice for what it's worth. But I do believe that I can provide some valuable tips.

Be Cautious This has to be the most important aspect of your investment strategy. Caution. Don't begin investing all your cash in the market at once. It it too difficult to 'call a bottom'. You nor I nor anyone knows when exactly the bottom is. Maybe we already hit a bottom. But maybe not. And that's why you have to be cautious.

Do Your Research You must know everything about the stock or mutual fund you plan to purchase. Read every single news story about it before you buy it. Look at the cash flow statement (available on Yahoo Finance) - make sure the company has sufficient cash to operate in this crazy environment.

Buy Slowly Once you have made your decision to buy a stock, don't buy it all at once. For example, if you plan on buying 100 shares total, buy it in four sets of 25. This way, if it goes down after your first purchase, you can buy some more - on sale. After you've made your decision to buy, be firm with that decision. If it goes down, don't panic. Use it as an opportunity to buy more shares at a better price. These steps are obviously basic, but very essential.

By ehow.com

Buy Homebuilder Stocks

Investing in homebuilder stocks in this market might seem counterintuitive. But this article explains why now is the best time to invest in homebuilder stocks.

Investing in homebuilder stocks before the housing market makes its turn-around might not seem like a good idea at first. But if you want to make the most money off of homebuilder stocks, it is imperative that you buy before the turn-around officially starts.

Once the turn-around begins, keep your eye out. All the big mutual funds will begin to put their money into the stocks, making the prices rise quickly. At the time that you think everything is going perfectly, that there is no way your homebuilder stocks will go down, that time is the time to sell. Remember - you haven't made a profit until you've sold the stock.

Before you buy a homebuilder stock - do your research. These stocks can be quite volatile. Read everything you can about them. Here are a few stocks that I think are the best of the group: KB Home (ticker: KBH) Lennar (LEN) Meritage Homes (MTH).

By ehow.com

Buy Financial Stocks

Investing in financial stocks can be a great move at times. This article explains how to invest in the right financial stocks.

Investing in financial stocks is almost always going to be a risky investment, especially during our economy's current financial crisis. The important thing to remember in times like these is that more than ever, it is essential that you do your research before purchasing any financial stock.

When investing in financial stocks, keep in mind that lower interest rates are always better for the companies. As interest rates approach 5% or higher, I would recommend selling all financials.

I would only consider (obviously) investing in the best of the best. So here is a list of what I believe are the best financial stocks to own (in order): Goldman Sachs (ticker: GS) JP Morgan Chase (JPM) Morgan Stanley (MS) Wells Fargo (WFC) Bank of America (BAC) A good place to learn more about investing is the Investment Strategies forum.

Buy Energy Stocks

With Oil plummeting as of late, now is the perfect time to start investing in energy stocks.

Oil has been plummeting in price during the past couple months. This price drop has brought down with it all stocks related to energy services.

Now is the time to buy! Please use discretion before purchasing a stock, especially in this volatile market. Do extensive research on any company before you buy its stock. But below I included a few stocks that are definitely worth considering.

A list of some top performing energy stocks to possibly invest in (with the ticker symbols in parenthesis): Exxon Mobile (XOM) Chevron (CVX) Headwaters Incorporated (HW) Petrobras (PBR)

By ehow.com

Buy Chinese Stocks

China is an up and coming world power. If you know what to invest in, you can make a lot of money. This article teaches a few ways to buy Chinese stocks.

China is on the rise. It will be one of the premier global powers very soon. But when investing in China, one must be very careful. It is an extremely volatile market. But there is plenty of money to be made - if you know what you are doing.

Step2

Before making any purchases of Chinese stocks, you must do extensive research. As I said, the market is very volatile. I would read every news story about the particular stock before you buy it. Study everything out thoroughly. Here is a list of quality Chinese stocks to consider, with the ticker symbol in parentheses and its industry: China Fund (CHN), banking China Mobile (CHL), telecommunications China Life Insurance (LFC), insurance Baidu (BIDU), search/advertising Petrochina (PTR), oil Canadian Solar (CSIQ), solar energy

Step3

Again, research is critical. I recommend typing the ticker symbol into Yahoo Finance and then clicking on the "Analyst Estimates" tab on the left. This will show you what the analysts covering the company expect them to earn next quarter and next year. I good rule of thumb (although it may seem counter-intuitive) is to buy the stock when everyone is saying there is no way it can go up. That's when you look for a good buying opportunity. Similarly, sell the stock when everyone is saying that there is no way it can go down.

Buy Brazilian Stocks

Brazil is an up and coming world power. If you know what to invest in, you can make a lot of money. This article teaches a few ways to buy Brazilian stocks.

Brazil is on the rise. It will be one of the premier global powers very soon. But when investing in Brazilian stocks, one must be very careful. It is an extremely volatile market. But there is plenty of money to be made - if you know what you are doing.

Before making any purchases of Brazilian stocks, you must do extensive research. As I said, the market is very volatile. I would read every news story about the particular stock before you buy it. Study everything out thoroughly. Here is a list of quality Brazilian stocks to consider, with the ticker symbol in parentheses, and its industry: Petrobras (PBR), Oil Vale (RIO), Mining Brasil Telecom (BTM), Telecommunications Vivo (VIV), Telecommunications Gol Linhas (GOL), Airline

Again, research is critical. I recommend typing the ticker symbol into Yahoo Finance and then clicking on the "Analyst Estimates" tab on the left. This will show you what the analysts covering the company expect them to earn next quarter and next year. I good rule of thumb (although it may seem counter-intuitive) is to buy the stock when everyone is saying there is no way it can go up. That's when you look for a good buying opportunity. Similarly, sell the stock when everyone is saying that there is no way it can go down.

By ehow.com

Buy Alternative Energy Stocks

With oil plummeting as of late, now is the perfect time to invest in alternative energy stocks.

Investing in Alternative Energy stocks is not too difficult. And with the way oil is rising, it is the time to start. Research is necessary before purchasing any stock. But there are some areas that are better than others to invest in.

Step2

The typical Alternative Energy sectors that investors focus on are Solar and Wind stocks. Taking a long-term view of the economy and the environment, these stocks should steadily continue to rise over time.

Step3

Here is a list of some good alternative energy stocks to consider (including the ticker symbols): First Solar (FSLR) Canadian Solar (CSIQ) Clean Energy (CLNE) Broadwind Energy (BWEN) And for a less direct play, General Electric (GE).

By ehow.com

How to Buy Agriculture Stocks

Investing in agriculture stocks can be a great move, especially since we all depend on them for food. This article explains how to do so.

We all need the services of the agriculture industry. Therefore, investing in agriculture stocks will always be a good investment, as long as you time it right. These stocks are sensitive to the economy. They depend strongly on legislation from the government (i.e. tax breaks, etc.).

Step2 Do your research thoroughly before buying an agriculture stocks. Here are some names to consider (ticker symbols included): John Deere (DE) Mosaic (MOS) Potash (POT) Bunge (BG) Monsanto (MON)

Again, research is critical. I recommend typing the ticker symbol into Yahoo Finance and then clicking on the "Analyst Estimates" tab on the left. This will show you what the analysts covering the company expect them to earn next quarter and next year. I good rule of thumb (although it may seem counter-intuitive) is to buy the stock when everyone is saying there is no way it can go up. That's when you look for a good buying opportunity. Similarly, sell the stock when everyone is saying that there is no way it can go down.

By ehow.com

use "moving averages" to buy stocks.

You always want to be in "harmony" with the markets when trading stocks. Here's a simple tool that will keep you on the "right side" of the trade.

WHAT IS A MOVING AVERAGE?: Simply take the last 20 days closing prices, add them together, then divide by 20. This price is plotted along a line (moving average). Most all charting software does this for you.

Only buy a stock if prices are trading above the 20-day moving average.

Institutional investors (hedge-funds, banks, mutual-funds, etc.) control most stock prices. They will "support" the stock at the 20-day moving average if they think it's going higher in the short-term. Use this to your advantage

Tips & Warnings

• This is an important rule that should not be broken or you will be fighting the "trend." Something you never want to do. "Flow" with the trend, never fight it.
• See our other trend trading articles for more tips.
• This is the opinion of the writer and not a offer to buy any securities. Investing in securities involves risk. Consult a professional before making any investment decisions.

By ehow.com

Understand Penny Stocks

Investment and stock market lingo can be confusing sometimes, but it is important to know about the economy. Here is a brief tutorial on what penny stocks are.

Know that a penny stock is a stock investment that is traded in the market (usually small markets as opposed to the major exchanges) for substantially low prices.

Step2

Realize that penny stocks in many cases are considered fairly risks due to their decreased capitalization and their prices. Why are they so cheap after all? Another thing to consider is that penny stocks are not as well researched and information about them are often minimal to say the least.

Step3

Remember though that even with its low price, is it worth it to risk money on an investment that doesn't have a lot of following or a confident history behind them? Remember, penny stocks are not actually sold for a penny! You do have some sort of investment in them, so you must weigh the pro's and con's of the lower price with the higher risks. Most penny stocks though sell for less then a few dollars per share, and there are some bigger name companies that do sell shares for this amount so looks can be deceiving! It is always best to research the stock and its company before buying. It will save you more money in the process.

By ehow.com

Invest in Brazil's Stock Market

With US stock market underperforming the global markets over the last few years, it is a good idea to diversify your investment internationally. Emerging markets have been turning in impressive returns over the recent past, especially the BRIC countries (Brazil, Russia, Indian and China). While they are not immune to US economic woes, their fundamentals remain strong into the foreseeable future. Brazil’s economy is booming and here is how you can easily take advantage.

Buy Brazil stock market tracking ETFs.
For instance, iShares MSCI Brazil (EWZ) offers an easy way to participate. You can buy and sell them just like you would any other stock.

Buy mutual funds focused on Brazil companies.
For instance Fidelity’s Latin American Fund (FLATX).

Buy Brazil stocks.
If you are able to research companies listed in other markets, you have couple of ways to buy their stocks. You can either open trading account in the market of your choice (your broker might support this already (Tip: pay attention to transaction fees) or you can look for ADRs of foreign companies which are listed in NYSE (such as PBR, BTM).

Buy US stocks that are diversified internationally.
There is nothing wrong with sticking with the US companies that you know and trust but keep in mind that companies that have business abroad would likely give you better return on investment due to better growth prospects and favorable currency exchange rates. Think of Coke, Pepsi, Procter & Gamble, Phillip Morris etc.

Tips & Warnings

• Evaluate risks vs. rewards. Any investment has an element of risk. Emerging markets have greater returns and hence greater risks but the fundamentals continue to be in their favor.

Find High Paying Dividend Stocks

There are many ways to profit from stocks if you pick or get hints on which stocks will bring more profits for you and when to buy them.

Look for consistent dividend paying stocks because The higher the dividend yield, the better for you.

Try to know the valuations this will help you determine the value of the company's stock.Also try to check the previous monthly and yearly prices of the stocks before considering if you should pick that stock.

If you think that you cannot predict well which stocks to pick that will give you good profits then you can follow the link in my resource area,the guys behind it are the best stock experts i have come across and they allow you to join their newsletter and you will be receiving stock picks,This newsletter is sent out weekly via email (usually on a Sunday evening)and it includes a stock the robot has picked for the week.Now These stocks often rise over 100% within a matter of days making you more money.

Tips & Warnings

• Don't rush into picking any stocks without good clarification on the stock and knowing what will happen to it.

Stock Market Tutorial No.1 - Financial Basics

This is a video I found at YouTube from "Featureman" about stock market tutorial for beginner.

Download and Use the Yahoo Finance Stock Market Tools

Yahoo Finance offers a premium subscription service that allows users to download and use stock market tools that offer real-time information, such as streaming stock quotes.

Start at the Yahoo home page (see Resources below).

Click on the 'Finance' link.

Find the 'My Portfolios' tab and choose 'MarketTracker' from the pull-down menu. This is where you will download the service.

Look for buttons that allow you to choose between being billed annually or monthly. Click on the button that corresponds to your preference. You may be offered the chance to sign up for a free trial period.

Complete the data form on the following page. You will need to provide your name and address. Enter the information into the provided boxes and use the pull-down menus. Click 'Continue.'

Read the agreement terms that appear on the following page. You will need to indicate whether you are a professional or non-professional by clicking on the correct circle on the page. Type your name into the Signature box, and click 'Signature Confirmed' to continue.

Read the agreement that appears on the following page. Click on the 'I Agree' box if you agree to the terms. If you are a non-professional, you will need to provide additional information about your employer.

Click the 'I Agree' box, and then type in 'I Agree.' Then click the button that says 'I Agree.' Verify your password to continue if requested to.

Provide a credit card number. If you have a promotional code, click the 'Click Here To Redeem' link. Otherwise, click 'Continue.'

Review the confirmation information that appears on the next page, and then click 'I Agree, Place Order.'

Use Yahoo Finance Stock Market Tools

Use the tools to see real-time quotes from the Yahoo Finance home page (see Resources below).

Use MarketTracker to keep track of your personal portfolio. Click on the 'My Portfolio' link on the Yahoo Finance home page, and then choose 'MarketTracker' from the pull-down menu. Click 'Yes' when prompted to install a desktop shortcut.

Click on the desktop shortcut to launch a window that displays real-time stock quotes.

Sign in at the Yahoo Finance home page at any time to access your MarketTracker tools.

Go to the Yahoo Finance Help section on premium services at any time to get additional assistance using your tools (see Resources below).

Tips & Warnings

• Change your password periodically to ensure account security.

How to Buy Fannie Mae's stocks share

How do you like to earn money in this giant mortgage company? You might wonder if you can still earn when this company is buried in debt. But if you want and interested to see if you can get return with your investment then you might like to try investing in this company. But remember it's all up to you if you are willing to take a risk.

The first thing you need to do is ask yourself if how much you are willing to risk for investment. And also how much you can afford to lose if in case your investment is going to take a wrong turn.

If you have your money then look for stock broker online like Scot trade. This broker seems so cheap to buy and sell your share if in case you do not like the investing thing in the future. Fidelity is another stock broker that you can get an account with and then start buying your favorite stocks or mutual funds or bonds online.

I used stock broker that does not charge me much in buying or trading my share like share builder but you choose what fits to your needs.

Once you have your account set up in any broker you like then deposit your fund so that you can buy your Fannie Mae share and then you will be called a stock shareholder. You do not need to invest too much money if you cannot afford to lose it someday just give it a try and see.

Now search in the box inside your portfolio and see what available stocks that your chosen broker has to offer for you. The symbol for Fannie Mae company is FNM so that's what you are trying to buy. Right now is really cheap to buy and if someday that price will go up then you will make money for sure. Just try it and wish you will get some return in the future.

How to possibly make more money than in the stock market

Tired of losing money in stock market, in your retirement funds, in the bank. Here is an alternative.

In todays market, it is hard to make money for your investments.
First you should decide if your current plan will be ok in time (once market straightens itself out)

If you decide to change or add to your investment portfolio, one option to consider is lending money to others.

In a way, you become a "bank" loaning money with interest.

One such site to view is http://www.prosper.com/join/pathfinderonline
You will need to bid on the loan and win the bid. In addition there are fees given back to the site.

In todays market, it is worthwhile to check out all options.

decide between stocks and mutual funds

This will help you decide whether stocks or mutual funds are the right investment for you.

Decide how much money you have to invest. The amount of money that you have will greatly influence which investment choice you should make.

Decide how you want to diversify your portfolio. Will you do it through stocks or mutual funds. A diversified portfolio is essential to succeeding in investing.

Weigh the advantages of mutual funds over stocks. Mutual funds allow you to be diversified instantly and have less risk than individual stocks do. The pooling of investors money makes mutual funds very efficient.

Weigh the advantages of stocks over mutual funds. The reality is, 80% of money managers underperform the S&P 500, so that professional management you're paying for might not be worth it. Stocks allow you to have complete control over your investment portfolio. While stocks have a greater risk, they also have a much higher potential reward.

If you have under $10,000 to invest you should likely choose a mutual fund since it will be costly to diversify your portfolio in individual stocks. If you have a larger amount, AND you are willing to put in the time and research needed to hold individual stocks, they might be the right path for you.