Mutual Funds - Where to buy?

Let’s take a look at who wants to sell you mutual funds and what their motives and fees are:

Insurance Companies
Insurance companies are a dangerous place to buy mutual funds. They love using the words "mutual funds" because people trust mutual funds and it is a known product. The problem is that they prefer to sell loaded mutual funds and they like to wrap mutual funds into other products like variable annuities--often taking away the advantages that mutual funds offer (like liquidity and low fees). Insurance salesmen are after the commissions they receive when selling funds, which is why you won’t find insurance salesmen selling no-load funds.

Banks
Banks are great places for some products, but not mutual funds. Banks, too, love selling funds of the loaded variety, but rarely offer much variety (only one or two fund families). They, too, receive commissions. Banks are also known for having very limited or incorrect information about the mutual funds they sell. A study by Consumer Reports concluded that the odds of getting good advice at the bank about funds was worse than one in six (the sales people weren’t even asking the right questions and often gave wildly wrong answers).

Stock Brokers and Investment Advisors
These two groups are a little trickier. Some want to sell you loaded funds for a commission, others collect fees for advice while selling no-load funds and the last group charges a percentage of assets under management. Generally these companies are good for advice, but if you are a do-it-yourselfer, the next two choices are much better for you.

Discount Stock Brokers
This is a great way to purchase mutual funds. Many discount brokers will offer access to hundreds or thousands of mutual funds at no cost (no transaction fee). Though you can buy mutual funds directly with the fund companies, some people prefer discount brokers because they help simplify bookkeeping and are more up on technology than some of the smaller fund companies.

Mutual Fund Companies
The best way to buy mutual funds is to go straight to the source. By investing directly with the mutual fund companies, you can do so without transaction costs. Fund companies have no hidden agendas – they exist to serve their customers, which happen to be owners or shareholders. Here’s a list of fund families you can invest directly with.

STOCKS - Global Investing

                                        Global Investing

Although global investing may seem attractive, investors have to take into
account certain risks. Even though financial advisors recommend that investors
should have 20% of their portfolio in foreign stocks, you need to be aware of
the risks.

First of all, you need to take into consideration the differences in accounting
systems. Countries will have different ways of handling investors and keeping
track of their money. Their systems may be confusing for U.S. investors and
cause mix-ups when they look at the financial statement of a foreign company.

Second, you must also accept that you may not get the best prices for your
trades. The volume of smaller markets is considerably lower than that of the U.S.
In the U.S., your orders are quickly filled at your desired price. However, in
foreign markets, the price you want may be different from what you end up paying.
Since fewer investors trade in some of the foreign countries, the stocks are
less liquid, giving you a lower chance of meeting your bid or ask price. The
prices at which shares are bought and sold tend to produce lower profits because
investors may not be willing to buy for such a high price or sell for such a low
price. This causes a larger spread, the difference between the bid and ask
prices.

Third, you need to be aware of other risks, including economic and political
problems. In recent years, investors in Asian stock markets have been greatly
hurt because of the region's financial crisis. Countless countries are also
suffering from political meltdowns. For example, Brazil's economy is
questionable because of the upcoming Congress elections in October. Investors
are curious whether the Congress will focus on major economic proposals. If not,
the stock market could greatly suffer. Nearby, Latin American investors are also
suffering. The government is too busy dealing with other problems that it doesn?t
want to deal with corporations and investors. The government has also made no
effort to protect shareholders rights. This neglect has put the Latin American
stock markets on shaky ground.

Another problem is the numerous number of different currencies throughout the
world. Even each country in North America has its own currency including the
Canadian dollar and peso. Asian and European countries are no different. Just
like the U.S. dollar, the values of foreign currencies are constantly changing.
Also, investors may be informed of the exchange rate too late for their desired
order to be executed. Furthermore, an investor may have made a profit in the
foreign currency, but the ever-changing dollar could result in a loss after
conversion to American dollars. For instance, you buy the Italian stock Tiscali
at 50 euros per share and sell a few months later at 60 euros per share. That
would be a 20% gain for an Italian investor. A U.S. investor would make a larger
profit if the dollar was worth $.95 for every euro as opposed to $1.10. However,
if the dollar was $1.50 per euro, a U.S. investor would have lost money.

Investing globally can be hard to resist, especially with the wealth of
opportunities overseas and the ease of trading. Nevertheless, investors also
need to be aware of some risk factors. Aside from the political, economical, and
currency risks, confusion can arise just from different financial reporting
practices. Countries will have different systems from the U.S., and investors
just need to be ready to deal with them.

How to buy STOCKS? And why?

Buying stocks is not difficult, but you'll need a few days lead time if
you haven't done it before.

Sign up with a stock broker on their website. A broker is registered
with one or more "stock exchanges" (e.g. NYSE, NASDAQ, etc.) to execute
stock trades on your behalf within that exchange's market.
Send the broker an initial deposit of funds. (Your broker needs this
money to purchase your stocks.) The usual minimum is $2000. But can be
as little as $500.00. Some websites don't require a deposit at all.
Your broker must report your stock trades to the IRS. You will need to
fill out the required forms and mail them back to the broker, possibly
even before they will allow you to make your first trade. (Your broker
will send you the forms.)
Select your stock, notifying your broker of the company's "symbol" (a
3-4-letter code), the price you're willing to pay per share, and the
length of time for which your offer will be valid.

Instead of offering a specific amount (and a timeframe) for the stock,
you may purchase the stock "at market value", which executes immediately.
Although you should "diversify" your stock portfolio by owning stock in
several industries, buy stock primarily in industries you are familiar
with. (tech stocks if you're a geek, auto stocks if you read a lot of
car magazines, etc.)
Search for "online discount brokers" on a search engine to find a list
of brokers that you can use to buy and sell stocks online. Scottrade,
Etrade, and TD Waterhouse are just a few of the many options. Be sure to
compare their fees and see if they have any hidden fees before signing up.
"If in doubt, do naught".

The stock exchange is rarely a place where anyone 'gets rich quick'.
Sure, some occassional stocks and shares will rise quickly making their
owners money, but rarely will you become rich. Bear in mind that if an
investment doubles in one year (which is pretty rare) you needed to be
already wealthy to make a lot of money. If you invested a thousand, you
will have just 'made' a thousand. You aren't wealthy or rich yet.
Investment risk is lowered by knowledge. Every time. If you are buying
shares on the stock exchange, what does the seller know that you don't?
What do you know that the seller does not? You can bet your life that
the buyer or seller opposite you in any transaction has done some
serious research. If you don't do yours, who do you think will win? You
or the market?
It might help to find areas in which you have useful knowledge already.
Either that or decide on an area and slowly become an expert. For
example, if you worked in a bank for 10 years, you must know something
about banking. When you read an annual report from a bank, do you laugh
and see through the waffle or does it make real sense? If you can see
through the waffle of some far off CEO and CFO, you can start to compare
the relative prospects in the same market of competing firms. Hey - that
could be an opportunity!

Try to understand why you want to invest. This is the hardest thing -
looking at yourself.
Search for an area where you hold some intellectual strength. It is
tough enough to make money in the markets at the best of times, so why
disadvantage yourself by investing in things that you don't understand?
You will have areas of expertise that fund managers don't. Use that
advantage if you can. Warren Buffett describes this as his 'circle of
competence'.
Do plenty of research. Then do plenty more! There is more valuable
information available online than we can possibly imagine.
Learn to think independently. This is the biggest skill you can learn
towards becoming a successful investor.
Don't forget about dividends. Studies show that dividends make up most
of an invetors return over the long term. Find a way to reinvest those
dividends for improved returns.
Look for investments, not gambles. Learn to understand the difference.

Before buying stocks, make sure you have a decent idea of how to choose
which stocks to buy.
There is plenty of free advice from reputable people. I recommend
listening to Jim Cramer on MSNBC (see external links).
Make sure your broker is registered with the SEC. Stick to the brokers
advertising on network TV if you are unfamiliar with the industry.
Depending on the brokerage fees, it will be difficult (or take a long
time) to recoup an investment of less than $1500 on any single stock
purchase.
In addition to the price-per-share that you offer for the stock, your
broker will charge you a flat transaction fee, as well as an SEC
insurance fee. The SEC fee is about $5. You pay these extra fees when
both buying AND selling a stock.
realize that people who promote a stock often do so because they want to
sell it. In other words they hype a product in order to sell it. This
way of looking at things is called "Contrarianism". So when people say
"BUY", its actually time to "SELL", or if you don't hold stock already,
it maybe not the time to buy at all! Always DYOR (Do Your Own Research)
and then some.
It isn't easy. If everyone could become a billionaire by investing,
Warren Buffett would not be famous. It takes time, study and effort and
most importantly - independent thought. Not everyone has the will or
stamina to carry that through. Who doesn't suffer setbacks and
confidence knocks?
Though it may be a 'hobby', it isn't 'fun'. The world of investment is
dominated by investment banks and their bankers. They do all the big
deals, float companies, issue bonds, trade stocks, bonds, currencies and
commodities and make lots of money. They employ some of the world's
brightest young MBAs to figure out new and improved profit making
ventures. They do all this because it is a business, with real money and
real profits. Nobody is playing around.
If you want to be successful, you too need to view it as a business.
Here is big tip number one: if you are interested, go and do some
reading about Benjamin Graham. Buy his books and digest. It will take a
while, but it is the proper place to start. It was Ben Graham that first
coined the idea successful investment is businesslike.
If you really want to do well in investment on the stock exchange, then
you need to approach it as if it were your own business. A part-time
business perhaps, but still a business. That also means taking your
information sources seriously. There are many portfolio tracking systems
online, some free and others require monthly payment - get registered to
one! There are magazines that follow and report on stock markets and
shares each week - subscribe to one!

STOCKS - When do I sell?

STOCKS - When do I sell?

 
 
If your security reaches the pre-determined stop loss price, sell immediately.
If you are unable to monitor the price, place a “stop limit” order with your broker to sell automatically (or buy, if short) should the stop loss price be reached. These orders, often called “stop loss orders” or “stops,” allow you to make the decision once and forget about it. They also expose you to market manipulation—share prices can be driven up or down in order to trigger quantities of stop loss orders (often placed on round numbers). Notwithstanding this drawback, stop loss orders are a good idea for all but the most vigilant and disciplined investors.
The question of when to sell is happier for investments showing a profit. Or should be. As profits grow, greed tends to kick in. More is not quite enough. Also, when investors sell, they part with the source of the good feelings that came with their increasing profits, their increasing “worth.” This can be subtly difficult.
Some investors sell and afterwards agonize that they were too soon or too late. Profits that they might have had or did have are gone, as though they had been thrown away. Investors have been down on themselves for decades because they only doubled their money, selling at $8, then watching the price climb to $90, unable to bring themselves to buy back at higher prices a security they once owned at $4. Greed and ego entangle and paralyze. When to sell?
As usual, there are many answers, and investors must find the one that suits them best individually.
You cannot know, on any given day, that a price has topped (or bottomed, if short). If you close a position, it will almost always be too soon or too late. You are, in effect, guessing before or after the fact (of the top or bottom). Generally, it is better to guess after the fact, to wait until trend lines have turned, giving back some profit in order to be more sure.
Here again, on a decline, investors find it hard to sell and much easier to do nothing, hoping for the price to return to its former level. Many investors have ridden positions all the way up and all the way down. Some investors close their positions automatically if they have given back half their profits, a good idea.
Nothing requires you to sell all of a postion at once. Many investors find it more comfortable to sell part, locking in some profit and leaving the rest of the position in play. A common practice is to sell half of a position if it doubles,  thereby retrieving the original investment. Investors often move their stop loss orders along behind the price, keeping (they hope)  sufficient room for short term fluctuations. They risk being stopped out too soon in a long trend, but their profit is guaranteed.
Some investors have a core holding and a short term holding of the same security. They keep the core holding through larger price fluctuations and trade in and out with the short term holding, capitalizing on their knowledge and feel for the security. This is a good strategy for securities in gradual long term trends—if  you can handle operating in two modes at once.
It is famously said, “If you are losing sleep over an investment, sell down to the sleeping level.” George Soros, a hall of fame investor, sells if his back hurts. You must trade in a manner that feels right, that suits your capacity for risk and loss.
To sum up trading strategy: find your own way to follow the best and perhaps the oldest maxim in the market—cut your losses, and let your winnings ride.

STOCKS - When do I buy?

STOCKS - When do I buy?

 
 
Security prices cycle up and down, even within long term trends. If you plan to hold an investment for years, you will be less concerned with the daily, hourly, even minute by minute price moves that are crucial to the short term trader. Even long term investors, however, should monitor prices, perhaps on a daily or weekly basis, so as to add to their positions when prices are lower in the cycle.
Price and volume charts are the most helpful guides to understanding these cycles. The closing price for each successive time period is plotted, left to right. The vertical scale gives the price, from lower to higher. Some charts also show the opening price and the lowest and highest prices during the period.
The jagged line which connects the closing prices shows the stock to be climbing, falling, or moving sideways. If you compare hourly, daily, and weekly charts, you will find similarities, echoes, in the patterns of price movements. Technical analysts focus on these patterns, believing that the market has already evaluated the fundamentals of a security and that history, while not a perfect predictor, is the best guide to what’s coming. They invest in patterns.
Each stock, bond, future, or index has its own trading rhythm. A chart captures this best. If, after you buy a security, you plot its daily  chart (by hand on a piece of graph paper or by using a computer), you will become sensitized to its rhythm; you will know when it is trading normally and when it is not. This feel for your investment will make its normal ups and downs less stressful.
Volumes (numbers of shares traded during a period) are usually represented beneath the prices by vertical lines rising from a common base, higher lines for higher volumes. Price/volume charts have an urban, city skyline, look.
Volume is an important technical indicator. Increasing volumes together with increasing prices is a good sign. Increasing volumes with decreasing prices is a bad sign (unless you are short).
If you want to buy more shares of a stock whose price is falling with large volumes of trades, you should probably wait until the volumes decrease significantly. This usually indicates that the selling pressure is lightening. Conversely, if you want to sell a stock that is rising on increasing volume, you should probably wait until the volume lessens, indicating that the stock is running low on buyers and that the price is likely to  level or drop.
You will have noticed the “probables.” Nothing is sure in the market. There is a saying that, “No one but a liar ever bought at the bottom and sold at the top.” If, on average, you can buy in the lower third of a price cycle and sell in the upper third, you will do very well.
Analysis helps, but trades rarely work out just as you expect. Uncertainty and imprecision are ever present. Some investors live with this naturally; most adapt to it; but some want nothing to do with it. The latter should invest in short term treasuries and spend their energies making and saving money in good ways, rather than worrying about the market.
When you have decided to make an investment or a short term trade, you must make an equally important decision. How much to buy?

How do I choose a broker?

How do I choose a broker?

Brokers handle the mechanics of buying and selling. An account with a broker is the most convenient way to invest.
Opening an account is simple - fill out a form and send a check for the amount that you wish to have available for investment. You can add or withdraw money at any time. The broker will provide you with a toll free telephone number and an Internet site to use for placing orders and following your account. You will receive a monthly statement and, usually, a mailed confirmation of each trade.
The financial newspapers and magazines are filled with ads placed by brokers who want your account. You can write to them for information and/or visit their web sites. Costs and extra services vary widely. Brokers tailor their operations to fit different types of investors. An options trader will choose one broker; an investor who trades very low priced shares will choose another (whose commission is per trade rather than per number of shares traded).
It is quick and easy to change brokers. You do not have to sell your holdings, transfer cash to the new broker, and then re-buy everything. Your holdings are transferred directly to the new account. If you don't like the broker you have chosen, or if your investment style develops in a direction catered to by a different broker, switching will cost you only a minor fee and loss of trading access for a week or two.
Given the ease of switching, it is best to begin with less expensive brokers. You will not get a plush branch office where you can relax and be persuaded to buy more stock by well mannered arm twisters - I mean, customer representatives. You probably will not get an international debit card. But, you will be able to buy and sell independently, at the lowest cost, at any hour, using your own judgment. The money you save can be invested and work for you, not someone else.
When you choose a broker, unless you have a good reason to do otherwise, cheap is the way to go.

What is a mutual fund?

What is a mutual fund?

A mutual fund is a collection or pool of assets professionally managed for its shareholders. A fundњs total value divided by the number of shares outstanding gives the "net asset value (NAV)" of the fund.
When you invest in a mutual fund, your money is added to its pool and you are issued new shares at the NAV price. The total fund assets and the total fund shares increase in the same proportion; the net asset value per share is unchanged. When you sell your shares, you receive the current NAV per share. If it has risen, you make money.
Mutual funds exist to make investing easier. Funds point out that one check buys diversity and professional management. Diversity is good, to a point. Studies have shown that the benefit (decreased risk) of owning more than one stock, bond, or commodity rises sharply as the number increases to five or six and then less sharply until, after twenty, there is little additional gain. Most funds have many more than twenty holdings. The professional management is expensive and usually mediocre. The majority of funds, after paying management and trading expenses, do worse than the market as a whole.
There are thousands of mutual funds, specializing in every segment of the market. If you want to invest in the biotech industry and donњt have the time to learn about individual corporations, you can buy shares in a fund that invests only in biotechs. If you are convinced of the prospects for India, you have a choice of funds that invest only in Indian securities (stocks and bonds).
If you wish to invest some fraction of your money in stocks, but you arenњt interested in learning about various corporations, you can buy what is called an "index fundћ that holds every stock in an index and automatically mirrors that index, the Standard & Poors (S&P) 500, for example, or the Dow Jones. If you buy the same dollar amount of this fund every month or year, the cost over time will (by definition) be average; you avoid the possibility of buying only when the market is overpriced. This technique, "dollar averaging," is reasonable for a passive investor. Index funds have lower operating costs than other funds, and the quality of management is taken out of the picture.
Some mutual fund investors monitor a large number of funds on a daily or weekly basis and switch from top performer to top performer using various switch triggers. This can be a profitable strategy, but it requires constant monitoring. The rules change for how often different funds allow in and out trading, how expensive it is to switch, etc.
The best use of mutual funds is for those situationsа (another country) which are not practical for you to invest in directly.

What is an option?

What is an option?

Options confer the right (but not the obligation) to act within a period of time, usually to buy or sell something at a fixed price. In the market, options are traded for stocks, bonds, and futures.
A "call" is an option to buy. A "put" is an option to sell. The price at which the underlying asset can be bought or sold is called the "exercise" price, the "strike price, " or just the "strike." The expiration date is the last day on which the option can be exercised. The "premium" is the price paid for the option.
Puts and calls are sold in lots of 100. A quote of $2.50 for a March Q call with a strike price of 60 means that you will pay $250 for the right to buy 100 shares of Q for $60, good until the end of the expiration date in March.
Options, like futures, are used to lock in prices for a period. Short term investors trade them for capital gains. When you buy or sell an option, you are guessing not only the direction of a price movement but also the time in which it will happen. Compared to just buying and selling the underlying asset, this is like moving from two to three dimensional chess. Option trading strategies are complex and, for some people, very interesting.а Prices are volatile; money can be made or lost quickly.
In general, unless you are strongly attracted to the challenges posed by options and have a fair amount of time as well as money to invest, you should leave option trading to others.

What is a commodity?

What is a commodity?

Commodities are raw materials. Corn, coffee, cocoa, cotton, copper, crude oil, (to name a few beginning with "c"), almost all the materials needed in bulk by society, are bought and sold in what is known as the Њfuturesћ market.
Future contracts are for fixed amounts of a commodity to be delivered in regularly scheduled months. In the U.S., cotton futures are for 50,000 pounds, delivered in March, May, July, October, or December, depending on the contract. Crude oil futures are for 1000 barrels and trade for delivery in all months.
In addition to contracts for raw materials, futures are traded for bonds, currencies, and various market indices. These futures also have standardized amounts and delivery dates.
Buyers and sellers of futures use them to lock in prices ahead of the delivery month. Investors trade futures for capital gain. They sell the contract they bought (or buy the contract they sold) before its delivery month. These investors make the market more liquid for the producers and users; sometimes they even make money.
Commodity (futures) speculation is a deceptively high stakes game that is best left to professionals who have plenty of money to back them. If you have a strong interest in a commodity, you grow soybeans, say, or you are a foreign currency expert, if you have a sizable amount of risk capital (50-100% of the value of each contract traded), and if you are drawn to high risk / high gain short term investing, you should learn all you can about the futures market and begin cautiously. Otherwise, you will do better elsewhere.

What is a BOND?

What is a bond?

A bond is an IOU. When you "buy" a bond, you are lending money to an organization. The amount of the loan, called the "face value," is normally $1000. The organization promises to repay the loan on a fixed date, the "maturity date," and to pay interest until then at a fixed rate. The rate does not change during the life of the bond.
The interest, known as the "coupon," is paid at regular intervals usually semi-annually or annually. Zero coupon bonds pay their interest all at once on the maturity date. Some bonds are "callable;" the issuer has the right to pay the buyer back early. Other things being equal, callable bonds are less desirable.
Federal government bonds are known as "treasuries" or "T-bonds" (10-30 year maturities), "T-notes" (2-10 years), and "T-bills" (90 days -1 year). Bonds are sold by governments, states, counties, cities, corporations, and other organizations worldwide. The bond market is huge, much larger than the stock market.
A bondњs interest rate reflects both the general interest rates at the time of issue and the risk involved in lending the money. You will get a higher interest payment from a developing corporation than from the state of Florida; Florida is less likely to go out of business. General interest rates fluctuate gradually from low single digits to as high as 20% on rare occasions.
The interest rate on a given bond never changes. What happens to the value of that bond when general interest rates and the credit rating of the issuer change?

Bond prices

Bonds are often sold before they reach maturity. Bond prices rise when general interest  rates drop, and vice versa.
For example, if interest rates drop after a bond is issued, the bondњs value increases (assuming no change in the credit rating of the issuer). Why? Because, the owner of the bond is receiving larger coupon payments than new buyers of bonds that have the same face value but a lower interest rate. In the open market, increased demand for the older bond with its higher payment drives its price up until the new and old yields are in balance. The coupon payment amounts remain fixed and different on the old and the new bonds, but since a buyer is paying more for the old bond, its effective interest rate has dropped, bringing it in line with the general interest rate.
To further complicate the comparison, the secondary buyer of the old bond will receive the face value of the bond on its maturity date, not the price the buyer paid for it.
If you deal with bonds on a regular basis, the relationships of price, interest rates, and yield are easy enough to remember. Otherwise, every so often, you might have to step back, take a deep breath, and reason it through again. Bonds are fixed agreements; the world is constantly changing. The variable price in the market keeps them in sync.
Bond prices are quoted as a multiple of face value. For example, a $1000 bond quoted for sale at .97 will cost $970 (.97 times $1000) plus commission; a bid of 1.12 means that the bidder is willing to pay $1120. A bond quoted at 1 is said to be at "par." The buyer is paying par (face) value.

Why bonds?

Bonds are normally bought for their dependability. Owners know how much they will be paid and when. Treasuries are probably the safest of all investments.
Bonds are also traded for capital gain. An investor might decide, for instance, that the future for a country is bright, that its economy will strengthen, that its interest rates will eventually drop, and its older government bonds will rise in value. Or, a crisis in a corporation might cause its bonds to sell so cheaply that, if the corporation recovers, any buyers at that level will make a fortune as other investors regain confidence in the corporation and interest rates drop to normal levels.
In general, bonds offer a safer return than stocks, but less chance for capital gain. Portfolio advisors recommend a mix of bothЌmore bonds than stocks for the retired, more stocks than bonds for the young. Once again, the proportion must suit you.
Some investors prefer all stocks, some buy only bonds. An interesting strategy for the patient and thrifty is to save and to invest only in treasuries, a little more each year. U.S. treasuries can be bought directly from the government, paying no commission to a middle person (a broker). Waitresses, house painters, administrative assistants, and marine engineers have quietly achieved financial independence in this slow but sure way. There is a saying in the country: "It's not how much you make; it's how much you keep."

What is a stock?

What is a stock?

A stock represents ownership of a corporation. If you own all the stock (also called shares), you own all the assets of the corporation. If you own 40% of the stock, you own 40% of the assets and have a 40% vote at the shareholders' meeting. Big corporations have millions of shares outstanding and are owned by millions of shareholders.
Stocks are traded in the market at prices determined by supply and demand. Corporations go in and out of favor; prices rise and fall. Benjamin Graham, an eminent analyst, said that, "In the short run, the market is aа voting machine; in the long run, it is a weighing machine." In the long run, stocks trade at reasonable prices. If a company prospers, so will its shareholders.
When you buy shares, you are buying a piece of a corporation. It may be located on the other side of the world; you may not be able to put your piece of it on a shelf; but it is nonetheless real. You should ask the same questions that you ask before buying anything. Is it what you need? Is it a good value? Can you afford it?
The value of a stock changes continuously. Like money, it is worth what someone will give you for it. How do you know whether a particular stock is cheap or expensive?
If corporation Q has a million shares outstanding and the share price is $10, the market is saying that Q is worth ten million dollars. This amount (the number of shares times the share price) is known as the "market capitalization" ofа a corporation. It is a good starting place for evaluating the share price.
If corporation B has a share price of $50 and has 200,000 shares outstanding, its market "cap" is also ten million dollars, the same as that of Q even though their share prices are very different. You must know how many shares have been issued in order to know what the market thinks a corporation is worth.
Why do corporations have different numbers of shares? For one thing, they can begin with different numbers; it doesn't matter however many were originally issued, they represented 100% of the corporation's assets. Over time, corporations can issue more stock in order to raise money or to reward employees who have been given stock options. If share prices rise greatly, corporations often "split" their stock, halving the share price and doubling the number issued at the same time. There is no change in the market cap, but investors prefer trading lower priced shares. A growing corporation may split its shares over and over again.

Investing - Which investment is best?

Investing - Which investment is best?

The best investment is the one that suits you the best. Self knowledge is as crucial as market knowledge in finding the bestа investment.
Do you naturally look far ahead or do you focus on the present? Are you cautious, or drawn to risk, or both, at different times? How much money can you invest? How much time? How much loss can you tolerate? What interests you most out there in the world? How is your self control? Your own fear and greed, amplified by other investors, wait to stampede you into poor decisions. Top investors are as disciplined as samurai.
As you learn about various types of investments, you will find yourself more interested in some than in others. Your feelings are a good guide. The investments that interest you the most are likely to be the most productive; you will find them easier to learn about and more fun to monitor; your judgments will be more solid. There is no best way to invest for everyone, but there is a best way for you. If you begin by looking for that way rather than by focusing on profits, the profits will follow.

Money - How much can I make?

Money - How much can I make?

At the least, taking almost no risk, you can make more than enough to maintain the purchasing power of your money. The very best investors earn 20% or more annually on their investments.
If you reinvest the money you earn, you then make a percentage on the earnings as well as on the original amount. The investment is said to be "compounding". Dividing 72 by the percentage at which an investment is compounding gives an approximation of the time it takes for the investment to double. If you earn 12% annually and reinvest the earnings, your money will double in six years (72 divided by 12). In thirty years, you will have doubled your money five times, multiplied it by 32!
The power of compounding over longer periods is surprising. You might do the math to see what happens if you add a thousand dollars to your investments each year for X years compounding at Y percent. You can begin with small amounts of money and do very well.