Stock Market Tip and Investing Advice

Stock Market Tip and Investing Advice

Posted on March 14 2010

Stock market investing advice

Beginner stock market investing advice is far popular already in the internet. The individual investor will find it hard to make money in stocks. Almost  many individuals are ready to invest in stocks right now. Yet to make lots of money means you need to study and studying takes motivation, which is very hard if all you want to do is impatiently throw your money into stocks.

If you hate to study then here are some stock investing tips.

Throw out the rulebook as there are no set rules for investing and there are no guarantees of success.

The best analysts are those who make informed decisions because they have detailed reasons for buying a stock and for selling.

Determine how much risk you could take  as this depends on your goals, so have your goals formulated first.

Price is not often times the same as value and check a companies’ net worth, which is profit AFTER taxes.

Stock market tip

You have worked so hard and saved a lot of money. This time you want those savings to work for you and earn you even more money. The stock market is one of the easiest and best ways to do it, provided of course you know what you are doing.

Listed below are ten stock market tips for beginners that if followed will lead you to success.

1) Make sure to determine your goal. Once you know to define your goal, then you can create a trading strategy for achieving that goal.

2) Mutual funds are not for everyone. As advised, take the time to learn how to pick good stocks so you can easily make double even triple-digit gains rather easily.

3) No single stock trading strategy will work in all markets. You must have a store of at least three trading strategies.

4) If possible, avoid short selling. Short selling is not a good advice as it is a strategy used to create wealth when stocks are falling. It is extremely risky and your broker is in control.

5) Find a low cost broker and do your own investing. Those full service brokers charge hundreds of dollars to place one single trade. Online discount broker can do the same thing for $5 or even less.

6) Practice paper trading your stocks and strategies. “Paper Trading” simply means that you find the stocks to invest in and pretend you are buying them

7) Have an exit strategy. The stock market can be tough for beginners. Try to make a plan before buying and stick with it.

 Go over your trades yearly. Try to figure out why the losers lost and you should learn from it so you don’t make the same mistakes next year.

9) Try to at least master technical analysis. It is good to be able to predict the direction of any stock or index with fairly accurate results.

10) Learn how to pick winning stocks. Use a stock picking service if possible. You can find these all over the Internet.

Stock investing tip

In general, when investing in a stock it is easy to become distracted and lose focus. Maybe your stock picks have been going down recently and you are afraid of losing any more money. Maybe you have found another stock that you are interested in buying, but you need to sell your other stock first. Maybe you don’t like the ups and downs associated with investing in an individual stock.

Stock invesment software

There are various stock investment software options on the market today. By investing in the good stock picks which they generate, you can make a great deal of your money in short-term. I would like to recommend going for penny stock specific stock investment software. Some programs only target those cheap stocks because of the high profit potential associated with them. Because of these stocks have cheaper prices, penny stocks are a great deal more potentially profitable overall.

Good stock pick

So many investors and stock beginners today want to know how to find good stock picks for their portfolio. They are always finding for that next hot stick tip that they can make a killing off in the next 30 days of investing. The most common problem with most investors is that they take on a very short term outlook. This is the same of a number of business owners. In both business and stock investing, it’s only a small minority who ever make a significant amount of money. Why is this?

Instead of being committed to a strategy and sticking to it long term, the vast majority become so focused on finding that ‘get rich quick’ scheme they will jump from one stock to the next, and ultimately make very little money at all.

http://thegetwealthy.com/2010/03/stock-market-tip-and-investing-advice/

No turning back: Sterling is going to fall further over coming months, warns Unicredit

Europe's banks brace for UK debt crisis

UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

By Ambrose Evans-Pritchard, International Business Editor
Published: 8:20PM GMT 11 Mar 2010

Comments 111 | Comment on this article

No turning back: Sterling is going to fall further over coming months, warns Unicredit

The Italian-German group, Europe's second largest bank, said Britain's tax structure will make it hard to raise fresh revenue quickly enough to restore confidence in UK public finances.

"I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors," said Kornelius Purps, Unicredit 's fixed income director and a leading analyst in Germany.

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Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.

"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph.

"Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points."

Yields on 10-year gilts have already crept up to 4.14pc, compared to 3.94pc for Italian bonds, 3.48pc for French bonds, and 3.19pc for German Bunds, though part of this reflects worries about higher inflation in Britain.

Ian Stannard, currency strategist at BNP Paribas, said markets are fretting over how the UK will cover its deficit following the pause in quantitative easing by the Bank of England. The Bank has absorbed £200bn of debt, more than total Treasury issuance over the last year.

"The UK may have difficulty in attracting extra investors to fill the gap. We think they will have to do more QE as recovery falters," he said.

BNP Paribas expects sterling to drop to $1.31 against the dollar this year and reach parity against the euro despite troubles in Club Med. "We're very bearish on the UK," he said.

Big global banks are divided over Britain's economic prospects . Goldman Sachs is betting on a turbo-charged recovery as the delayed effects of sterling devaluation kick in. Britain's trump card is an average debt maturity of 14.1 years, nearly three times US maturities and double those of France. This greatly reduces the risk of a "roll-over" crisis.

UniCredit said Greece is better placed than the UK in coming months even if deficits look comparable. "The polls point to a minority government in the UK, while Greece's government can count on a majority to push austerity measures through parliament. Secondly, the British tax system offers less leverage for a rise in revenue," he said.

Paradoxically, Greek tax evasion creates scope for a surge in revenues from tougher enforcement. "It is not out of the question that we will see a positive surprise in Greece: is there any such hope for Britain?" said Mr Purps.

Still, while it is arguable whether a hung Parliament in Britain will lead to policy drift, analysts said Greece was in trouble already. The country was brought to a standstill on Thursday by the second general strike in weeks. Police clashed with rioters , again reducing Athens to a fog of tear gas. Observers said that did not augur well for a nation that has hardly begun its three-year ordeal of draconian cuts.

http://www.telegraph.co.uk/finance/economics/7423138/Europes-banks-brace-for-UK-debt-crisis.html

How important is critical illness cover?

With one in every five critical illness claims for breast cancer now could be the time to make sure you have the right protection.

By Kara Gammell
Published: 3:56PM BST 01 Oct 2009

Most home buyers purchase life assurance when they arrange a mortgage, but only a minority obtain another form of financial protection that they are five times more likely to need before they reach retirement.

Critical illness assurance pays a tax-free lump sum on diagnosis of any one of a list of serious illnesses – including cancer and heart attacks. Claims statistics suggest you are five times more likely to suffer from one of these than you are to die before you reach 65.

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The good news is that medical advances mean more people than ever are surviving conditions that might have killed earlier generations. For example, more than 90pc of men diagnosed with testicular cancer are still alive five years later, while more than 80pc of women diagnosed with breast cancer have the same survival rate, according to the Office for National Statistics.

Critical illness cover can provide cash to allow people to pursue a less stressful lifestyle while they recover from illness, or use it for any other purpose. But half of women in Britain have no life assurance, critical illness cover or income protection and a quarter rely on their partner's policies instead, according to a survey by Axa.

But with one in every five claims for critical illness cover for breast cancer, and about 46,000 people diagnosed each year, now is the time to make sure you have the right protection.

Critical illness is relatively cheap and, on the face of it, relatively straightforward. You insure a fixed sum at the outset – usually the outstanding balance on your mortgage – this is paid out on the diagnosis of one of the 30 or so conditions listed on the policy.

But why do very few woman have this protection?

This cover has come in for repeated criticism in recent years as many consumers have complained that insurers rely on complex medical definitions to decide who does and does not get a payout. To be fair to insurers, most have clearly listed the exact nature of the conditions covered in the policy terms and conditions. But to the average healthy consumer, terms such as "in situ carcinoma" or "pre-malignant or non-invasive cancer" are nearly meaningless. Most simply assume that if they have bought a policy it will pay out if they have cancer.

If you bought the policy from an independent financial adviser, they should explain that they only cover certain conditions, and that these conditions have to be of a specified severity to qualify for a payout.

Kevin Carr, spokesman from PruProtect, said: "Breast cancer is covered by critical illness policies, but many policies exclude 'early stage cancer' which is when cancer is considered to be non-invasive. Breast cancer may be considered 'early stage' even if a lumpectomy or mastectomy is required and therefore many insurers will not pay out. The other main exclusions are for certain types of prostate and skin cancer."

However, he said that there are a few insurers such as PruProtect, Axa, Royal Liver and Skandia who look at cases on a severity basis and will pay anything from 10pc to 100pc of the sum assured, depending on the condition.

Prudential takes a slightly different approach with its "serious illness" policy. It will make reduced payments to those with less severe types of breast cancer and other conditions typically not covered on a standard critical illness policy. Those buying a critical illness policy have the option of renewable or guaranteed premiums.

The latter are more expensive, but you know payments will remain level throughout the life of the policy – which may run for 20 years. Renewable premiums may be lower, but prices could rise if, for example, new screening methods result in more claims.

Mr Carr said: "Critics of this system say that it is too confusing for customers, but we disagree. When you break your wing mirror on your car, your car insurer does not pay out the total value of your vehicle. Our system is basic common sense."

Many insurers will have a detailed guide to the illnesses and conditions covered, which will be written clearly. Ask to see this, as well as the document setting out the policy's key features, benefits and exclusions.

Most people buy critical illness cover when they take on a major financial commitment, but it's important not to buy the first policy offered – shop around.

It also pays to start young when premiums will be relatively cheap, rather than leaving it until later in life when the price of cover will start to rise substantially.

Matt Morris, policy adviser at independent financial advisers LifeSearch, said: "Once you take out a critical illness policy, it is not usually worth making any changes to it and you have to be very careful when switching critical illness policies. But if you do, it is crucial you never cancel an existing policy until a new one is in place."

Survivors of cancer who want to take out this type of cover need not pay more than they have to, as Bupa, Fortis, LV= and Zurich will cut a client's premium if they exclude cancer from a policy.

There are more than 200 types of cancer, according to charity Cancer Research UK, and one in three people will develop some form of cancer during their lifetime.

Michael Whyte, chief underwriter for Aviva, said: "Critical illness and life policies are the type of policy nobody wishes to
need to claim against, yet evidence shows that these are vitally important policies that can support families and secure their financial wellbeing during the worst of times."

October is Breast Cancer Awareness Month. To make a donation to Cancer Research UK, call 08701 602040 or send a cheque to: Cancer Research UK, PO Box 1527, Oxford, OX4 9FG

http://www.telegraph.co.uk/finance/personalfinance/insurance/criticalillness/6251215/How-important-is-critical-illness-cover.html

Eurozone could risk 'sovereign debt explosion'

Europe's governments are at increasing risk of an interest rate shock this year as the lingering effects of the Great Recession drive debt issuance to record levels and saturate bond markets, according to Standard & Poor's.

By Ambrose Evans-Pritchard, International Business Editor
Published: 6:30AM GMT 12 Mar 2010

Comments 23 | Comment on this article

Italy has to refinance 20pc of its entire debt, tapping the bond markets for a total ?259bn this year

"Debt-related sovereign vulnerabilities have increased, particularly in the Eurozone, where we expect government borrowing will rise to further new peaks," said Kai Stukenbrock, the ratings agency's European credit analyst. "The resulting fiscal pressure from a sustained increase in financing cost could be significant in our view."

The warning comes as bond giant PIMCO spoke of a "sovereign debt explosion" that has taken the world into uncharted waters and poses a major threat to economic stability. "Our sense is that the importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood," said Mohamed El-Erian, the group's chief executive.

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Mr El-Erian said most analysts are still using "backward-looking models" that fail to grasp the full magnitude of what has taken place in world affairs since the crisis. Some 40pc of the global economy is in countries where governments are running deficits above 10pc of GDP, with no easy way out.

Standard & Poor's said Europe's states need to raise €1,446bn (£1,313bn) this year as the full damage inflicted by the credit collapse – masked last year by emergency stimulus measures – becomes ever clearer. This will become harder to fund cheaply as central banks start to tighten. "We believe that benchmark yields have benefited from liquidity injections into the financial sector and quantitative easing measures by the Bank of England and the Federal Reserve. As that support could eventually be withdrawn from 2010, excess supply in government bond markets could start driving benchmark yields back up. Such a development could add to fiscal pressure in a number of sovereigns with high deficits," it said.

Several states have come to rely on cheap short-term funding, storing up "roll-over risk" that will come to a head in coming months. Italy has to refinance 20pc of its entire debt – the world's third largest after Japan and the US – tapping the bond markets for a total €259bn this year. Belgium has to roll over 22pc of its substantial debt.

"This implies dependence on more or less constant access to financial markets," said the report.

Weaker states risk a double effect of rising yields on benchmark bonds as well as higher spreads as investors demand a greater risk premium in the harsher climate now facing heavily-indebted countries.

Greece has already seen a surge of 300 basis points in its long-term funding costs since the new Pasok government of George Papandreou revealed that the country's true budget deficit was 12.7pc, double the previous estimate.

The agency estimates that a sustained rise in yields of 300 basis points would raise the burden of interest costs each year by 3.9pc of GDP for Greece, 2.6pc for Portugal, and 2.5pc for Italy and Britain by the middle of the decade.

A jump of this kind would amount to an extra £35bn or so in annual interest costs, roughly equal to the UK defence budget. This would play havoc with UK public finances and force the Government to squeeze fiscal policy even further. S&P's warning clearly underscores the risk of waiting too long before restoring the deficit to a sustainable path.

The report said there had been a notable increase in "alternative channels of borrowing" that "embellish" the true debt picture. France's Société de Financement de l'Economie (SFEF) has issued €77bn of state-backed bonds since 2008 and the Caisse d'Amortissement de la Dette Sociale has amassed liabilities of €103bn. Austria's infrastructure financing companies, used to buttress state stimulus programmes, have €23bn in debts.

This hidden iceberg of debt kept off balance sheet is likely to be the next focus of bond vigilantes.


http://www.telegraph.co.uk/finance/economics/7424555/Eurozone-could-risk-sovereign-debt-explosion.html

Government to speed up reform of overseas tax

Businesses may have to rethink their overseas expansion plans after the Treasury signalled it would accelerate plans to reform the way that it taxes the profits earned by companies' foreign branches.

 

By Richard Tyler
Published: 4:53PM GMT 08 Mar 2010

Stephen Timms, the financial secretary to the Treasury, told accountants in London last week that the Government would clarify the taxation of overseas profits from branches and legislate in next year's Finance Bill.

Branches are permanent offices in overseas markets but are not structured in the same way as formal subsidiaries. They are used by a wide range of trading businesses as well as banks and insurance companies.

Ian Young, international tax manager at the Institute of Chartered Accountants of England and Wales, welcomed the Treasury's decision to tackle branch taxation more quickly.

"It's very sensible," he said. "We need to have a coherent tax system that they don't keep chopping and changing and modifying, which is what they seem to do at the moment. What businesses like is having some certainty."

The Association of British Insurers agreed. Kerrie Kelly, director general of the ABI, said: "A more modern regime will help global businesses remain headquartered in the UK as well as attract those domiciled abroad."

One impact could be that setting up an overseas presence becomes more expensive, Mr Young warned, as losses generated by an overseas office as it sets up could no longer be offset against UK profits.

"If we say you do something abroad we will not tax you, arguably you will not get relief if you make losses," he said. "It might discourage people as when you set up a business you have lots of expenses and not a lot of profits, or it could encourage you to do it in a different way, perhaps through a local agent."

http://www.telegraph.co.uk/finance/yourbusiness/7399645/Government-to-speed-up-reform-of-overseas-tax.html

Pound up as UK inflation expectations rise

Sterling rose on Thursday after a slight uptick in inflation expectations, though analysts still expected economic and political concerns to keep the pound under pressure ahead of an upcoming general election.

 

Reuters
Published: 12:45PM GMT 11 Mar 2010

Pound up as UK inflation expectations rise Photo: PA

The pound skidded to one-week lows against the dollar and euro on Wednesday after below-forecast manufacturing output figures added to a string of disappointing data.

But Britons' expectations for inflation over the next 12 months rose slightly, a survey from the Bank of England showed on Thursday, helping to underpin sterling, albeit temporarily.

 

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"Inflation expectations showed a modest uptick and sterling has moved up on the day, but this is not overly significant. I don't think it will have any impact on Bank of England policy ahead," said Lee Hardman, currency strategist at BTM-UFJ.

Hardman added sterling's bounce was most likely flow-driven, reiterating his bearish stance on the pound going into a UK general election, widely expected in May.

At 1139 GMT, sterling was trading up around 0.4pc versus the dollar at $1.5050, off a one-week low of $1.4873 hit on Wednesday. Euro/sterling was down around 0.4pc at 90.75 pence, retreating from a high of 91.30 hit on Wednesday.

The Bank of England's trade-weighted sterling index edged up to 76.7 after falling to a fresh 11-month low at 76.4 on Wednesday. Sterling has fallen 7pc on a trade-weighted basis from its January highs.

Analysts remained jittery the threat of a hung parliament after the election would stymie efforts to deal with the UK's spiralling budget deficit.

Adding to the negative mix was concern over Britain's sovereign ratings after Fitch Ratings highlighted on Tuesday the UK's deteriorating credit profile.

Prime Minister Gordon Brown said on Wednesday he believed Britain would maintain its coveted top credit rating and announced a pay freeze for top civil servants to help tame a record deficit.

But worries over the public finances prevailed, with the deficit heading for 12pc of GDP this fiscal year.

"Markets are currently not very receptive to an overly casual approach to national finances. As a result the period of weakness in sterling is likely to continue," said Commerzbank analysts in a note.

Data releases in the UK are now sparse ahead of BoE minutes and employment data due next Wednesday.

http://www.telegraph.co.uk/finance/currency/7420845/Pound-up-as-UK-inflation-expectations-rise.html

Get critical illness cover for peace of mind

Illnesses that used to be fatal are now survivable, so it makes sense to protect yourself from the fallout.

By Emma Wall
Published: 12:14PM GMT 23 Feb 2010

Phil Smith received £1.2m payout from his critical illness insurance after being diagnosed with skin cancer. He now has the all-clear and his family has financial security. Photo: Christopher Jones

Nearly two-thirds of the population have no form of financial protection if they die or become critically ill, despite advances in medicine and technology that mean more people are living longer and surviving illnesses that used to be fatal. In research conducted by insurer Aviva, most people aged 45 to 54, the age group most likely to claim, say they cannot afford protection.

But a debilitating illness can take years to recover from – and while your company may readily allow you sick leave, it can be restricted to a pay percentage or term length. Without a source of income, family savings can quickly dwindle on the essentials – let alone expensive medical care, or unexpected costs.

Although most homebuyers take out life cover to ensure loved ones are provided for in the event of their death, few people realise the financial implications of surviving – but in serious ill health.

"The diagnosis of a life-threatening illness can mean you will have to give up work temporarily or permanently and you may decide to pay for complementary treatments that are not available through the NHS to aid your recovery," warned Stephen Crosbie, of Aegon. "You're also still likely to incur costs such as mortgage repayments, loan repayments, utility bills and other living expenses."

Critical illness cover typically provides an individual with a lump-sum payment or monthly income if they survive for at least 14 days after being diagnosed with an illness that meets the policy's criteria. These can include cancer, Alzheimer's, multiple sclerosis, organ transplants, a stroke or heart attack among others. Cover cannot be purchased for a pre-existing illness and the younger and healthier you are, the lower your monthly premium – so it pays to be prepared. Premiums can be guaranteed or reviewable, meaning monthly payments are fixed for the term of the policy or can change on an annual basis. Customers can choose which type is best for them depending on their needs, as reviewable rates are initially cheaper, but the rates are reviewed every five years at which point they could increase. Guaranteed rates ensure customers pay the same premiums throughout the life of the policy.

As technology allows us to live longer, illness blights lives. Assuming you will be one of the lucky few is not practical – nearly two thirds of the population has not bought any form of protection, such as life insurance or critical illness cover, but one in three of us will be diagnosed with cancer, and every year about 146,000 people in Britain have a heart attack. Each year, 10,000 people under the age of 55 suffer a stroke.

Axa says that the average age at which people claim for critical illness cover is 43 for a man and 40 for a woman – a time when expenses are high, with children still at home and a mortgage outstanding. This means that without cover they may struggle.

You can buy critical illness cover in conjunction with life cover, and some company health policies include it as standard, so it is advisable to check what cover you have before taking out a new policy. Some life insurance policies may pay out if you are diagnosed with a terminal illness – but not if it is in the final year of the benefit term. If you are self-employed or run your own business, critical illness cover will not just protect your family should you become ill, but your business, too. Company policies may pay for your bills and mortgage, but they often won't stretch to other expenses such as child care or travel. Aviva offers ''integrated'' critical illness cover that includes life cover to a selected sum – usually the amount outstanding on the policy holder's mortgage.

When buying a critical illness cover, consider whether the policy matches your needs. For example, some insurers will automatically include children's critical illness cover to your plan – while others will have an option to include a spouse. You may want overseas cover should you spend time abroad, or are planning to retire overseas.

All of these inclusions will affect your premiums. Because of the individual requirements of a policy, these quotes from Axa are generalised, but

• a monthly premium for a healthy, non-smoking, 40-year-old male requiring £150,000 of critical illness cover over a 20-year term is £77. 
• The monthly premium for a healthy, non-smoking, 40-year-old female requiring £150,000 over a 20-year term is £73. 
• In comparison with life insurance, a monthly premium for a healthy, non-smoking, 40-year-old female requiring £150,000 of life cover over a 20-year term is £12. 
• The monthly premium for a healthy, non-smoking, 40-year-old male requiring £150,000 of life cover over a 20-year term is £15.

Life cover may be affordable, but you are much more likely to become seriously ill than die before you reach retirement age.

To illustrate how the later you leave it, the more expensive cover is, just five years on, 

• Axa's quote for a non-smoking male aged 45 years, based on a smaller benefit of £100,000 over a 20-year term, is £85 a month. 
• Fortis quotes the same individual £75 a month, and 
• PruProtect £96.

Statistics show that the number of critical illness claims paid out is increasing. In the past, insurers would have required a letter from the claimant's doctor detailing their full medical history. Due to new guidelines from the Association of British Insurers, now assurers require only medical details relating to the critical illness claim – so you are less likely to have your claim about cancer dismissed because of your non-disclosure about an ingrown toenail.

Additional information may be required if the insurer suspects the claim is fraudulent or the claimant is guilty of non-disclosure. 

• Non-disclosure can lead to a claim being dismissed, but only if the insurer can prove it was deliberate. 
• Alternatively, innocent or negligent non-disclosure relating to a misleading question or misinterpretation of the application form can still result in a payout.

It is not worth risking voiding your policy over misinterpretation, however, so it is always advisable to contact the insurer with any questions.

Do you require Life Insurance?

Telegraph Life Insurance, provided by Click, enables you to compare prices from major life insurances in one simple call. To find more, please call 0800 180 4158 or visit life-insurance.telegraph.co.uk.

http://www.telegraph.co.uk/finance/personalfinance/insurance/criticalillness/7298359/Get-critical-illness-cover-for-peace-of-mind.html

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