Stock Market News FAQs
Having a trusted source of up-to-date information is paramount whether you are a seasoned investor, contemplating investing in stocks, or simply realize that keeping up with what the markets are doing is a vital part of being in business. By deciding to make Rocketnews part of your daily routine, you can be confident that you are getting all the breaking stock market news and information feeds you need.
Information and understanding is the key to getting started in the stock market. Learn what you need to know from the people and companies that are making the news by checking with Rocketnews and its news feeds for the latest stock market news. There is no reason to stay on the sidelines when you can become a part of the exciting and rewarding world of trading by being equipped with the knowledge and confidence you will gain from stories and articles found in the Rocketnews.
Stock Market News
The topics below will provide a review for stock market news:
- The Stock Market for Beginners
- The Stock Market
- How Does the Stock Market Work?
- Stock Market for Dummies
The Stock Market for Beginners
Today’s successful traders started as beginners and learned from the experience traders utilizing a wide variety of online stock market web tools. In addition, reading recommended books and articles provides information and conventional market wisdom needed to succeed. Analyzing today’s stock market news provides helpful information on the tools of the trade, tips on current opportunities, and expert advice on trends as well as valuable information on how to hone your trading skills. Subscribing to Rocketnews will start a learning process of understanding market trends and key indicators of stock market trading.
Insight into market news and how traders think can help personalize customize trading strategies. Gone are the days of “buy and hold” stock market strategies. Rocketnews provides valuable information and trends in today’s market. The market is driven by news and having a real-time news source on such topics as fixed-income or balanced funds, international equity funds, Canadian and U.S. equity funds, the global real estate fund markets helps shape market strategies. Learning which funds suit a person’s trading style and staying in the news is part of the daily due diligence of a stock trader. To trade with confidence, an investor must spend time subscribing and reading the most up-to-date stock market news. Staying competitive in today’s global market requires daily knowledge of where the NASDAQ and DOW are trading and movements of oil prices and the currency markets. Following the markets and understanding how they affect your business and your investments is easier with the latest news, information and informative articles you will find every day in Rocketnews.
The Stock Market
The magnitude of the world stock market was projected at about $36.6 trillion USD at the start of October 2008. The entire world derivatives market has been projected at about $791 trillion face or at eleven times the size of the whole world economy.
Stock markets are a public market for the trading of company stock and derivatives at an settled price; these include securities listed on a stock exchange and shares privately traded.
Stocks are traded on stock markets or exchanges which are a corporate entity that specialized in bringing together buyers and sellers to a listing of stocks and securities. The stock market in the United States includes the New York Stock Exchange (NYSE), the NASDAQ or Pink Sheets. In Canada, it is the Toronto Stock Exchange (TSE) or the TSX Venture Exchange. Major European stock exchanges include the London Stock Exchange, the Deutsche Börse, and the Paris Bourse. Asian stock markets include the Hong Kong Stock Exchange, the Tokyo Stock Exchange, and the Bombay Stock Exchange. In Latin America, stock markets include the BM&F Bovespa and the BMV.
How Does the Stock Market Work?
Supply and demand is the invisible hand that creates a stock market. The number of shares of stock determines the supply and the amount of shares investors want to purchase dictates demand. For every share bought, there is someone selling. The stock market functions as a store where individuals, companies and institutions go to buy and sell stock. The store or institution that governs and brokers these transactions in the stock market is the stock exchanges. Stock market exchanges are where the sellers find buyers facilitate buying and selling as well as to set the market value (price) of the shares.
The Stock Market Today
As mentioned above, the main North American exchanges are the NASDAQ, the New York Stock Exchange (NYSE), the ECNs (electronic communication networks like the NASDAQ) and other regional exchanges like the ASE (American Stock Exchange) and the PSE (Pacific Stock Exchange). Until the 1990s, most trading was completed through exchanges like the NYSE, American and Pacific Exchanges. Now most trading is made through the NASDAQ using the ECNs and thousands of other firms with access to facilitate trading.
How are Stocks Valued?
Stocks are valued in two primary ways. First is a worth produced through analysis of cash flow, sales or earnings, like operational cash flow, IBIDA, gross profit, or net profit. The second value is determined by the amount a buyer is willing to pay for a particular share of stock and by how much the seller is willing to sell a stock for. Stock values change over time as buyers and sellers vary the way they evaluate individual stocks. However, investors can become more or less confident in the future of stocks depending on overall economic factors (i.e. banking, government monetary and fiscal policies, war, etc).
A basic assessment of a company is the valuation use to rationalize stock prices. This type of valuation methodology is called Price Earnings ratio or P/E ratio. The P/E ratio is equal to a stock’s market capitalization divided by its after-tax earnings over a 12-month period. This appraisal is based on historic ratios and statistics of the company. It aims to determine a stock price based on measurable company results (i.e. the past) and extend those results as expected results for the future (all things being equal). This type of valuation is characteristically what determines stock prices over the longer term. Companies with high P/E ratios are considered more “risky” investments than those with low P/E ratios. A high P/E ratio indicates higher outlooks for company performance.
Supply and demand is the other way stocks are valued. The more people that want to buy the stock, the higher its price will be. And conversely, the more people that want to sell the stock, the lower the price will be. This form of valuation is very hard to understand or predict, and is often drives the short-term stock market trends.
Stock Market for Dummies
Invest in tax-sheltered instruments – 401K, 403B and IRAs. Investing in tax deferred plans provide immediate returns (i.e. tax savings) and postpones the tax implications of growth. In 401K and 403B plans, you invest your earnings before taxes, so you start with more. For example, if you received a paycheck for $4,000 gross pay, after taxes you’d be left with approximately $2,400 to invest. However, if you could invest the full $4,000 in a tax deferred account, the earnings return on $4,000 instead of $2,400 would perform significantly better over time. Also, some employers offer matching investments that could make the $4,000 investment equivalent to a $8,000 investment. The moral of the story is to put as much as possible into tax deferred investments.
Do not time the market. It is not possible to time the stock market, otherwise it would be too easy to make money. However, there are well defined disciplines to investing that over the long run of the market can provide reasonable returns. Timing the market is driven by emotion. Often, it is better to have professional firms manage your core investments.
Use dollar cost averaging. Buying stocks on a regular basis, like once a month or quarterly per year, means that you will be buying at an average price. By averaging the price you buy at, even when the market is falling, you can protect yourself from buying high and take advantage of falling markets. Timing the market may mean that you are buying at too high or too low a valuation.
Diversify your Investments. Investments are not just stocks. Diversifying your investments into other asset classes including real estate (a house), cash (savings account or CD) and bonds, help provide a measure of protection from the foibles of the stock market. So, if an asset class underperforms, other asset classes may perform better.
Maximize Tax Rate for Capital Gains. When buying stocks, hold them for more than one year to get taxed at the long term capital gains rate, which is currently 18%. If you sell before one year, you will be taxed at your income tax rate, which is usually higher than 18%.
Diversify your Stocks into Mutual Funds. The common mistake is to buy too few stocks or be unbalanced in your portfolio. This is difficult because there are so many stocks to choose from, but limited resources to buy. Mutual funds are solution to this problem. It allows the individual investor to buy many stocks through a single share, the mutual fund share. But even a portfolio of mutual funds should be diversified across different types of funds. A mutual fund may even be your starting point to invest. Diversification is key to protection in the market and it is always best to seek professional advice for someone interested in you long term success, not just to sell you a fund or stock.
The market does garrentte success. In fact, it can often deliver the opposite. For those that do not have an appetite for the complexities of the market and taking risk with their money, bonds and CDs are great alternatives. They may not perform to the same levels of the market, but unlike stocks, they won’t produce loses.
Markets and trends can change rapidly and can greatly affect your business and your personal investments. Rocketnews helps you be prepared for these changes and trade with confidence with up-to-the minute stories, news and information. So whether you have been trading for years or are just beginning your adventure into the stock market, make sure you check in with Rocketnews and stay informed. The global economy is expanding and will continue to do so; make certain you have the most current information provided by information sources around the globe. The best way to read about current events is by reviewing the news feeds in Rocketnews.