A beginner stock trader often wonders why share prices keep on changing in rapid succession. How to get at the correct valuation of a particular share? Why this arithmetic is so difficult? For a carefree investor, these issues do not matter much. He works by taking risks. The analysts and researchers have devised many models for the guidance of the investors. The techniques are applicable to stocks as per the circumstances of the case.
Experimental techniques for stocks from the point of a new investor should help to build a healthy portfolio. One, who has never been in the share trade, needs to get introduced to terminologies like Bear and a Bull Market, mood of the market, day trading, buying and selling the shares through the internet, etc. As you study the literature you come across extraordinary success stories related to the Exchange and also the great market crashes. In between all these uncertainties, one wishes to find the comfort level and establish one's identity as an investor.
One such option for the new entrant is the Compound Stock Exchange (CSE) technique. With not much brisk action in this from the beginner's point of view, it has many positive aspects. The rules are specific about the shares to be purchased, when to be purchased, and the timings to sell a particular option. This method offers protection against poor decisions that are likely to result in losses. Your earnings are assured to be not less than 3-6% per month. However intelligent may be the approach for investment, the chances of wrong judgment as for one or two shares of the portfolio are real. CSE saves you from the total loss position and gives you some hope and encouragement with assured returns, till such time your shares recoup their original health.
The "Value Investing" method followed by Warren Buffet is another experiment that has paid rich returns on investment. Warren has built immense fortunes employing such methods and the level of success achieved by him has no parallel in the share market history. This is supposed to be a simple method as for explanation, but actually not so simple to implement. But when it is properly done, it is worth the efforts. As per this procedure, you buy a share/commodity for less than its real worth. But this methodology requires detailed study of the company. One interesting explanation by Warren is not to invest in shares that solely rely on a particular commodity such as gas and oil. The reason is, the prices of the commodities swing up and down and hence growth can not be assured. Any company that relies on commodities identical to another company in the line has to face tough competition, and it will have the adverse effect on the price of the share. The chances of downward slide are more.
Nobody has ever been able to go to the root cause of the upward and downward swings in shares and yet research and analysis as for its causes goes on unabated. The new findings encourage for a while only to be overwhelmed by certain other developments in the changing market conditions. But experience gives confidence to the investor to move ahead in the stock market.

A blue chip stock is the stock of a well-established company, having stable finances. The word blue chip comes from casinos, where the blue chip refers to the counter that has the highest value.
Most blue chip stocks pay reasonable dividends; this is even when the company is performing worse than usual. The stocks of multibillion-dollar turnover companies like Microsoft, P&G etc are among the top blue chip stocks. They are relatively safe as compared to other options of investment.
Why to invest in blue chip stocks?
There are plenty of reasons why investing in blue chip stocks is a good option, they are:
1. Proved track record: The companies will have a proven track record. Even when the industry trends are slipping down, they suffer very little. These companies must have gone through same issues earlier and will have a clear idea on how to tackle these situations.
2. Diversity: These companies have diversified interests and will not focus on only one sector or product. Due to this they suffer less when one sector slows down because the other sectors which are performing better will make up for the losses.
3. Stable growth: These companies will have stabilized growth as opposed to new companies. New companies can profit in one quarter then have losses in the next, their growth is uneven. The blue chip stocks can easily give a return of 15% compounded per year without fail.
4. Best long term bets: Top blue chips stocks can be the best bets for long-term investments. They provide great results over the long term. These companies will have a proper foundation and after a period of time there will be only one way to go i.e. UP. Keep them as your first option when you plan to invest over long term.
The main question here is how to recognize a blue chip stock?
Four ways to identify a blue chip stock:
1. Strong balance sheet:
These companies will have very strong balance sheets. Moderate to low debts will be seen along with a history of consistent dividends.
2. Strong order book:
These companies are characterized by strong order books consisting of billions of dollars. Strong order books will indicate that the growth of the company will not come to a halt at any point. The company will keep growing without fail and that is very important for an investor.
3. Market cap:
The market cap of blue chip stocks will be among the highest in the stock market. When the market cap of a particular stock is billions of dollars then, it must be a top blue chip stock.
4. Diversified interests:
These companies will have diversified interests and will not focus on one particular sector or interest. If a stock shows these characteristics then it can be termed as a blue chip stock.
Well I hope this article gave you enough information about blue chip stocks. Use this information to find the best blue chip stocks to invest in and let the money roll in. Blue chip stocks can turn out to be your personal money-minting machine.

The stock market isn't magic and no one can predict with accuracy how it will perform. However, there is a ton of money to be made by investing in it and there are several ways to protect yourself from losing big. Following are 3 stock market secrets that will keep your money safe.
1 ) Diversify. If you have all of your money invested in one stock and it goes broke you'll lose your entire investment. The best idea is to have a diverse portfolio with both high and low risk stocks. If the high risk stocks pay off you stand to win big. If they don't, you've got the low risk stocks to pick up the slack.
2 ) Have a back-up plan. Having a certain amount of money held back as a cash cushion can help tremendously. If you want to make aggressive and risky buys that you have reason to believe will pay off big, it can be difficult to justify if you're spending your entire savings. However, if you have a nice cash cushion to get you back in the game should the worst happen, you'll be able to invest in the stock market with confidence.
3 ) Balance. Not only do you not want to focus all of your stock on one high or low risk type of stock, you don't want to focus on one industry either. You want to make sure that your portfolio covers a range of different industries

Dynamic Trading Strategy, for lack of a better name, is a trading philosophy which utilizes Put and Call options in combination with the underlying stock or futures contract to achieve limited risk, unlimited profit, and maximum flexibility in any trading situation while avoiding the trader's 'death trap' of being constantly 'whipsawed' out of one's position. Given that there are only three things a stock can do (go up, down, or sidewise) a dynamic trading strategy is rather straightforward.
For instance, if you decide a stock is probably headed significantly higher, first, determine the amount of risk involved for 100 shares. To do this, look for a 'suitably priced', nearest in-the-money strike price Put option with a reasonable expiration date. Risk = stock + put - strike. (Note: Risk = time value of the Put option, in this situation.) This combination of long stock and long Put is known as a 'synthetic' Call.
Next, add three times the 'risk' to the price of the stock. If the resulting 'target' price seems 'reasonable', you have found a 'suitably priced' option. Three to one is a proper initial reward/risk ratio.
Money management dictates the amount and size of the position. To do this, determine the maximum dollar amount to be risked on the trade. This should be a percentage of total capital. Many traders consider 2% to be reasonable.
Dividing the maximum risk amount by the risk involved for 100 shares determines the number of trading units or 'size' of the position.
Dynamic Trading Strategy, without risking any capital, has just answered the three questions every trader must know before putting on a trade:
1. How much can I lose, if I'm wrong?
2. How much can I win, if I'm right?
3. How long will it take to find out?
Not needing to place 'stop loss' orders, thereby avoiding the fate of becoming a victim of 'search and destroy' missions (that is to say 'ambushes', the object of which is to 'whipsaw' traders out of their positions) means getting a good night's sleep every night, regardless of what the market does to try to defeat you (and it will try).
However, because your 'worst case' scenario is known going in, it cannot due you further harm, no matter what. Even if the stock should go to 'zero', your Put protection is total.
Dynamic Trading Strategy is flexible
When, how, and under what circumstances to close out one's position is a matter of style and personal choice.
One can choose to close out the position all at once or take it off in stages.
Strategist's, for instance, have been known to phase out their positions in thirds:
The first third when the profit covers the 'risk amount' of the entire position. Accomplishing this leaves the remaining position 'risk free'. (Note: From this point forward, trailing stop orders, actual or mental, can be used.)
The second third at a predetermined target of the trader's choosing. This is where the trader can make use of 'contingent' orders, such as OCO's (one-cancels-other).
The final third is where the trader 'tries for the fences', allowing the market to take out the position with a trailing 'stop' order or, if the 'tape' is indicating evidence that a 'top' is being put in, simply exit the position.
Alternatively, at the discretion of the trader, the position could 'morph' into a 'fence' by selling Call options. Keep in mind that all that is needed to turn the position into a 'risk free' situation is to take in enough Call premium to cover the time value of the Put options owned.
On another tack, if volatility is low, one might initially buy Call options as a substitute for a long stock position. Again, maximum risk is limited while profit potential is unlimited.
On any decent rally, the stock could be 'shorted' with out risk. If the stock declines, the 'short' stock position would be bought in or 'covered'. The trader then waits for the next rally and 'shorts' the stock again.
The first time the profits from the 'shorting' operations exceeds the cost of the Call options owned the position, from that time forward, becomes 'risk free'.
If the stock continues to rise after being 'shorted', the trader simply 'exercises' or 'calls' the stock to close out the position. The profit was locked in the moment the underlying stock was 'shorted'. The combination of long Calls and short stock is known as a 'synthetic' Put.
All of the above can be applied just as easily in reverse to declining market scenarios by shorting stock and buying Call options (synthetic Put) or simply using a Put option as a substitute for being short stock.
A long Put position can 'morph' into a synthetic Call position simply by adding long stock.
The synthetic Call can morph into a 'bearish fence' by adding short Put options to the position.
The moment long stock is added to a profitable long Put position, the position becomes 'risk free'. The stock can be bought on a significant decline with impunity. Profits can be taken on rallys or exercised on further declines. The trader wins, either way.
As a trading philosophy, a dynamic trading strategy is hard to beat, wouldn't you agree?

When trading it is important to concentrate on your plan not your money. If you have a plan and are following it through the money will come.

If you concentrate on how much money you are making or losing it will be extremely stressful. Not only that you will find it more difficult to make money. You will start to take profits too early as you try to hold onto the profits that you have made.

This is probably the biggest disadvantage to keeping your eye on how much money you are making. It can cause you to take profits as soon as you have them, especially when you are on a losing streak.

But taking out profits too early and not letting them run and grow can have a number of disadvantages. The biggest one is you might not be able to pay for your losses when you are right. Let's face it you are going to be wrong when trading.

Everyone makes mistakes or places a bad trade. The important part is making enough when you are right to be able to (at least) pay for when you are wrong. If you are consistently taking profits too early and not letting them run you might be involved in a losing game.

Counting your money on the table also will make you not want to exit losing trades in hopes that they will come back. This only leads to bigger losses and opportunity cost. Even if the stock does come back and you break even after 5 years, you would have missed hundreds of great opportunities to make your money grow.

On the other hand concentrating on a plan can be great because it lets you find out what you are doing wrong (or right). It will let you stay into good stocks longer and let you get out of bad stocks faster. In the long run concentrating on a plan can help you do much better

Don't Buy Anything

Screaming! Hollering! Gyrations!
BUY! BUY! BUY! Is this the bottom? What are you buying now?

That's all you hear on CNBC-TV, from brokers and so-called financial planners. The right question is, "What should I sell now?"

Brokers are not taught to protect clients money. Money the customer worked hard to accumulate slowly Is disappearing. The poor (and getting poorer) investor is listening to the chorus singing, "the market always comes back", "you have good quality stocks so just hold on to them", "you don't have a loss until you sell" and "you can't time the market", These refrains and many others are told to keep the unknowledgeable investor from selling. Once that money goes into a money market fund the brokerage company no longer makes any money on that account.

Even without generating commissions the brokers skim about 1% every year. Doesn't sound like much, does it? Think about the hundreds of millions of dollars in all those accounts. Even worse are the mutual funds that skim about 2% every year.

In the current bear market that is going to go on for several more years (yes, I said years, remember 2000-2003) investors are going to lose several Trillion dollars. (Yes, that's a T.)

There will be rallies to draw in the last few bucks of Joe Sixpack. When looking back to the 2000 fiasco there were rallies, but ultimately the S&P lost 40% and the NASDAQ lost 78%.

Can that happen again? No one knows for sure, but the trend now (and 'now' is what counts) is down with a capital "D".

Investors have been taught to buy, but the big secret on Wall Street is knowing when to sell. Brokers and financial planners are not taught exit strategies.

To prove this the investor can call his broker or expert financial planner to ask this simple question: "What is your exit strategy?" Have him explain iot in full - if he has one - and then have him send you a letter outlining it completely. This will be your only proof when you go to arbitration to get back your money he has lost..

If the investor can't get it he has two choices: 1. Stay with him and lose your money or 2. find a new broker. Some mutual funds are worse as they will not give any help at all and in fact many have redemption fees of 1% or 2% that are charged when the customer wants to get out or even transfer to the money market within a fund family.

Whatever fantasy your financial "expert" comes up with don't believe it. Don't buy anything until this bear market has run its course.

Most of us are not able to predict when a Stock Market Crash will happen. This means we might be one of the unfortunate investors caught on the wrong side of a crash. If this happens to you, here are a few tips for minimising the damage to your portfolio.

Tip No1
The first tip is to be prepared. Before you make any investment, be just as cautious as you would be if you knew for certain that there would be a Stock Market Crash next week. It is better to be safe than sorry, especially when your hard earned cash is involved.

Tip No 2
Most brokers allow you to place stops for all your open positions. You are strongly advised to take advantage of this facility. Stock prices are known to fall as much as 20% during a Wall Street crash. To make matters worse, very few of them recover to their previous levels in a hurry. While a stop will not guarantee your exit price during a crash, in many cases it will help you exit at a more favourable price than if you did not have one in place.

Tip No 3
The amount of money you lose during a crash is directly proportional to your position size. The smaller your position size - the less money you will lose. Limit your position size to less than 2% of your capital, and you are likely to survive even the worst Stock Market Crash.

Tip No 4
Hedging is a strategy used liberally by Stock Market professionals, and for good reason. Whilst hedging can be an expensive exercise, it will save your skin when things go horribly wrong such as during a Stock Market Crash. These days, there are many instruments like options that make hedging possible even for small retail investors.

One of the worst things that can happen to any investor is to be caught on the wrong side of a crash. Fortunately, the tips I have presented will go a long way towards cushioning the blow.

Internet plays the dominant role as for the future of stock exchanges. The changes in the system have wiped out the traditional modalities of buying and selling of shares. Electronic networks are dominating the scene. The investment activities have multiplied. The day to day volume of the operations has reached staggering heights with corresponding increase in the number of brokers. The dealings have turned out methodical, systematic and instant access has rendered the verifying procedures easy. Gain or loss, an investor can deal confidently and will know his position with the click of the mouse.

ECNs have reduced the possibility of front running. The lightening speed with which the transactions take place, without any manual intervention, has made it virtually impossible for the traders to acquire prior knowledge of customer's incoming orders and do the balancing act. The future of the stock exchanges is bright, as they have multiple roles to play in the economy. The companies are able to raise capital for expansion by selling shares to the investing public. The Exchange impacts most of the commercial activities. Some of them are:

Mobilizing savings for investment: The intelligent investing public is always on the lookout for better avenues for getting higher profits. When they draw their savings from institutions like Commercial Banks, and amount kept as idle deposit and invests more prudently in shares, such money goes to promote business activity. The economic sectors that are in dire need of resources, like commerce and industry and agriculture get their demands, paving way for higher productivity and growth.

Facilitating company growth: Business means opportunities; business means timing, making the right move at the right time. In this era of industrial and internet revolution, decisions to expand and change the production lines, acquisition of necessary business assets, takeovers and mergers will have to be taken fast. The share market makes it possible for the businessman to grow through fusion or acquisition.

Redistribution of wealth: This establishment is not founded to felicitate redistribution of wealth. But this consequential action just happens. The investors share the wealth of dividends declared and increase in the prices of shares which will result in capital gains. They get their portion of wealth of the profitable businesses.

Investment opportunities for small investors: The future of the small investors is more or less safe, if they are guided properly. Such guidance is neither costly nor it is far to seek. Buying shares depends upon one's affordability and as such it is the convenient mode. You have the freedom to invest. With no differentiation between the small and big investors, this is a place where justice to the investors is assured.

Capital raising by the Government for development and social welfare projects:

Towards creating a welfare society, the first duty of the Government is to create infrastructure. Sewage and water treatment plants, housing projects are financed by floating bonds. The public lends money to the government through the medium of Exchange. The bonds apparently offer tax concessions to the investing public, but in reality they do not seem to provide the actual relief in the over all context. Sooner or later, the government will tax the citizens to repay the bonds on redemption and the expenses devolved in managing the issue of bonds together with interest. It is just like "rob Peter to pay Paul."

The future of stock exchanges is intimately linked to the overall economic health of the nation. They progress like a train that speeds on two parallel tracks.

Those who have no money have the problem of earning money. Those who have money have the problem of earning more profits with their money. To put it in financial terms, they have the problems of investment. The moneyed individuals (no such term) are not necessarily the best investors. The fear of incurring losses always grips the minds of the rich. Nevertheless, the craze for increasing wealth seizes the minds of the rich people

Stock Exchange is the connecting bridge between the investors and the capital market-for the companies planning business expansion to increase profits. The work of the broker is not to function in a haphazard manner. He must plan for each investor, depending upon his needs and the amount of investment. He has to create the suitable portfolio, to hit the financial goals of the investor. He has to work-in tandem with the rules and regulations of the exchange, and proves worthy of the trust reposed on him by the management of the establishment on the one hand, and that of the investor on the other.

Most exchanges have a physical location (the necessity for this type of arrangement is waning in this internet era), where dealers and brokers meet to finalize orders from individual and institutional investors to buy and sell securities. The volume of literature on shares that you find in the market is the direct outcome of what transpires within the exchange. Prices of shares are raised, lowered, discovered and rediscovered here on moment to moment to basis. The story within may not be the true merit of the share, without. Since money transfers are done from one source to the other on the basis of such transactions, the importance of exchanges can not be minimized.

Name a financial service and you have it, with the framework of rules and regulations of the Stock exchange. It is also referred to as he Corporate Debt or Capital Market.

Three broad categories of the financial services provided at the Exchanges are:

The Public Debt Market: This is the market for government securities (also known as gilt-edged securities). These are fixed interest bearing and dated securities. This market is controlled by the Reserve Bank of India and Bankers to the Government.

PSU Bond Market: deals with bonds floated by Public Sector units, Nationalized Banks and financial institutions to raise Tier II capital. Debentures floated by Corporate also come under his category.
The Equity Market for floating of equity or preference share capital by corporate:

Once the investor buys the shares, they can not be en-cashed just as you do in banks for fixed deposits, but through the exchange, you can sell or purchase them. The investments, from this genre have liquidity. The profit (may be loss as well) earned on the shares is disbursed to the investor as dividends, bonus shares etc. The prime goal of any financial management is to increase the shareholder's wealth.

The role of the exchanges is to look after both the Primary Market and the secondary Market. The former deals with new public issues of all categories of securities, bonds and equity/preference shares. The secondary market deals with the day to day buying and selling of securities of all types. Without being listed, one can not carry out transactions relating to buying and selling of shares.

If there is one institution that is commonly feared most by the Reserve Bank and the Finance Ministry of a country, it is the Stock Exchange. The goings on within it and its role is the concern of these institutions.

The question about what moves the tock market is quite complicated. There are several visible and invisible factors that cause the rise and fall in stock market. There are several issues on political, economic and social level that include inflation, change in interest rates, earnings of the people, oil and energy prices, war, peace and terrorism, political and domestic situation and so on. While some of these factors may have long-term consequences for the stock market, others may have only short-term implications.

What, however, drives the market crazy is the uncertainty factor. What the stock market is most sensitive to is the surprises. When something unusual occurs in the country, the stock market immediately reacts to it. Stock market radars are extremely sensitive to changes.

This can be illustrated by an example. If the Federal Reserve Board's Open Market Committee-Fed- thinks of raising the interest rates by one quarter percent, the stock market will not react much. If contrary to the expectation, the Fed raises the interest rate by one-half percent, the market will feel shocked.

So any news which can surprise the market can rattle it, be it on the economic front, terrorist attack and similar other incident. If the news is really good, it also shows its impact in form of rise in stock prices.

The cumulative effect of these factors, whether good or bad, creates market phases such as bulls phase, bears' phase or secular phase.

A bull market is also referred to as a bull run. A bull market is characterized by a rise in stock prices. It keeps most investors happy. It creates and strengthens their confidence and makes them optimistic about the returns on their investments. Therefore they tend to invest in stocks in the hope of making big in the near future.

A notable example of bull market was in the 1990s when the US and several international markets had a very happy time because the financial markets went up very rapidly. The US stock markets had a bull run from 1983 to 2007 except for brief periods of slumps.

Bear market is associated with fall in prices and lots of pessimism. Investors fear losses. A negative sentiment prevails in the market and investors want to sell their stocks fearing further downfall.

The most glaring example of bear phase in the history of United States was after the Wall Street Crash of 1929 that continued from 1930 to 1932 generating what was called the Great Depression. A milder version of bear market occurred from about 1973 to 1982 when the economy became stagnant. It resulted in energy crisis and high unemployment in the early 1980s.

A bear market is often characterized by the constant price fluctuations. A bear market does not mean just a simple fall in stock prices. It may result in substantial price fall. Although you cannot give a clear definition of bear market, it is often characterized by a fall in price by around 20% in a period of two months. A recent example of bear market is current state stock markets of world in the year 2008.

A bear market should not be confused with a period of correction. Correction also results in fall in stock markets, but a period of correction is usually short lived. Moreover correction usually occurs during the bull phase. The price fall does not surpass 15-20%. The bear markets last longer and suffer much greater price falls from top to bottom.

A period of correction in stock prices is usually a welcome opportunity for smart stock market investors. They try to buy high value stocks when most people try to sell them away at reduced prices. The profit from their sales as soon as the correction period, which is usually short lived, is over.

When the stock market price shows downward trend, the analysts begin to debate whether it is actually a correction, a rally, or the start of a bear market or even a bull market. In any case it is usually impossible to arrive at any correct decision. In fact, whether the market is actually passing through a correction or a truly bear phase can be determined only after that phase is over.

It must, however, be noted that a bear market howsoever depressing it may be, rarely wipes out the real (inflation adjusted) gains made during the previous bull market. On the other hand the bulls that succeed the bears often make up for the real losses of any bear market.

Commodities Market is an upcoming and fiercely growing market after the Stock Market. In this, Multi-Commodities like Bullion (Gold, Silver), Cement, Chemicals, Cotton, Dry Fruits, Food Grains, Gur & Sugar, Iron & Steel, Jute & Jute Goods, Kirana, Metals, etc. are traded on a day to day basis. Interests of individual investors are catching on fast in this type of Exchange.

There are 3 National Exchanges for enabling the purchase and sale of commodities, futures and options. These are:

1. Multi-Commodity Exchange of India Ltd. (MCX)
2. National Commodities and Derivatives Exchange Ltd. (NCDEX)
3. National Multi-Commodity Exchange of India Ltd.

Under these 3 National Exchanges, there are a dozen active Bourses for trading, more than 2,000 brokers operating in 6,000 terminals and 10,000 active traders. All these are tracking the commodities prices round the clock. In the very First year of its commencement, Commodities Trading in India clocked an annual turnover of Rs.1400 Billion and is estimated to cross Rs.10,000 Billion during this fiscal alone.

The MCX has setup centres in Ahmedabad, Mumbai and Delhi for physical delivery of futures contracts in commodities. It plans to spread this network to Kolkata and Chennai. The NCDEX has recently launched in association with International Petroleum Exchange, London (IPE), the IPE Brent Crude Futures Contract, which is a landmark step towards integrating Indian Energy Markets with global Energy Markets. The MCX has tied up with Chicago Climate Exchange to trade in Carbon and Sulphur Financial Instruments for the global emissions marketplace. In near future, MCX will tie-up with, European Climate Exchange.

The Commodities and Futures Market has a separate regulator called the Forwards Markets Commission (FMC). The FMC has been setup on the lines of the Securities and Exchange Board of India (SEBI) and has statutorily received the autonomous governing body status.

As the Commodities Market is in infancy stage and on the aggressive growth path, it requires innovations, ideas. The human resource required to operate the market and exchange is tremendous. The Exchange needs professionals from all walks of life. They are : Graduates (BComs, BScs), Post Graduates (Economics, Labour, Agriculture), Chartered Accountants, Company Secretaries, Cost & Works Accountants, MBAs (Finance, Operations, Systems, Human Resource, Marketing, International Business), Law Graduates, MCAs, MCMs and so on. Having the National Stock Exchange's Certification in Financial Markets (NCFM) is an added advantage. The pay packages range from Rs 4 lacs to Rs 6 lacs p.a.

These professionals are required for Business Development, Market Operations, Warehousing, Research & Development, Network & Security, Corporate Communication, Product Knowledge Management, Liaisoning, Corporate Relations, Human Resource, Secretarial, Legal Compliances, Customer Relations, Estate Management and so on.

Are there any good stocks to get into these days? I know that we are all familiar with the stock market's recent decline, therefore can we really expect to find some good stocks to invest in that can yield significantly great returns? Well, the answer is "yes". There are opportunities available today that can allow us to purchase some really good stock that can provide both short term and long term gains.

So, what are good stocks to invest in given this current market? To find the best stocks out there, you must look for stocks that are priced very low. These can be either penny stock investments or undervalued stock investments. When a penny stock or an undervalued stock is purchased, then you will be able to profit with smaller stock price margins. It would only require that your stock price only increase by a few cents or dollars for you to obtain a significant increase in your return.

Like penny stocks, undervalued stocks can be priced well below their value within the stock market. It may take the market some time to realize that the price should be adjusted higher than the current price. It is best to invest during this window of opportunity as you will make the greatest return.

So, where do you look to find these good stocks? You must perform your own research to find these bargains. Research the news, financial reports, and the stock market analyst's recommendations for ideas. It can become a tedious process.

Reacting to the market is a lesson every trader should learn. It is much simpler and much more profitable then to just react to the market then to try to understand it.

Too many traders try to explain a big move. For instance most people will say that stocks fell because of the unemployment numbers that just came out, or the interest rates that were announced or some other important news factor that came out today.

And they may be right, there could be hundreds of reasons why the market falls on any given day, but is it really worth it to find out. In most cases the answer is no.

Stocks fall because of panic, more sellers than buyers. Stocks shoot up because of greed, more buyers than sellers. Many times it can actually help you to weed out all the noise that comes from Wall Street and make decisions based on what you see.

If you are a technical trader that is what you should do. Don't concern yourself with the fact that everyone says we are in the worst depression since whenever. Concentrate on the basics, is the market up trending? Is it down trending? Has it broken support? Any Chart patterns forming?

The basics will help you to stay calm and look at the market with a clear mind rather than looking at it with hundreds of news reports running through your head. Perhaps the most important reason for just reacting to the market is that it helps to eliminate bias.

You can listen to the news and hear all the reasons why a given stock is going to go up. The problem is when it comes time to see how the stock is actually performing you will have a bias to the upside. Even if the stock is in a strong downtrend you can always find some news out there that can justify buying it.

But justifying your buying isn't always enough. If a stock is clearly trending down and breaking through support there is no reason for you to buy it. In fact you may even want to short it.

Basically it does not help you to try to explain or rationalize things by looking at the short term news reports. It can help you much more to weed all the useless junk out and concentrate on your own specific trading rules

Do you want to know how to make safe investments? Does such a thing even exist in today's economic crisis. Well, there are many ways to make safe investments. I am not talking about risk free investments than barley earn you anything. I am talking about investments that have the potential to earn you good money very quickly. How can a investment like this be safe? I am going to tell you to find such an investment. Even in this economic crisis, there are amazing investments just waiting for you.

The thing I invest in most, and this surprises many people, is penny stocks. You see, penny stocks are not really as risky as a majority of people think. Sure, there are some penny stocks that will eat you money and give you absolutely nothing in return. All you have to do is now how to identify these stocks and avoid them. It is not that hard once you know what to look for.

The first thing you should look for is trends. Trends are a pattern in a stock price over time. You can use this information to see if the penny stock jumps around randomly in value or follows a decent pattern. If you find a decent pattern, you have found a good company that is doing good. You can use this pattern to pick the perfect times to buy and sell.

Trade volume is another big factor to look at. If a company is getting several hundred thousand trades a week, then it has some serious attention and is going to be a low risk investment. I do not touch stocks with less than 100,000 weekly trades.

If you are tired of feeling trapped in this economic crisis, then quit looking at the bad side and use it to your advantage. The people who become very wealthy are the ones that adapt to situations and use them for their gain.

There is no one, sure-fire recipe to invest in the stock market successfully. However you can set yourself a plan, and stick to it. Investing in the stock market doesn't have to be complicated. It can be as simple or as complicated as you have the time for. Your investment strategy should suit you and your lifestyle. If you want to become a day trader then you need to offer yourself to the stock market on a full-time basis. But if you want to enter the stock market as an investor, the strategies outlined below will be useful to keep in mind.

1. Always research your market first. Before jumping into any kind of investment watch the market trend. Is it a Bull or a Bear market? What market industry are you most interested in?

2. When you have decided on a market industry, work out who the market leaders are and investigate the companies you are most interested in. Find out all you can about them.

3. Now that you have worked out who you are interested in investing in, think about how many companies you want to invest in. If you are just starting out, keep the amount of companies you want to invest in to a small number. Pick out the market leaders and follow them.

4. Work out the best time to buy in. If you are not sure when the best time is, avoid companies who are expecting good results in their quarterly and annual reports. These companies usually will see a rise in their share prices just before good results are released.

5. Work out if you are investing for growth or income. If it is for growth, go for growth industries. You may have to wait longer for pay back in growth industries, but overall results are generally better.

6. Don't listen to rumors about companies. You should avoid investing in any company on the strength of the latest rumors.

7. If possible, invest in a market leader that is overpriced. Why would you want to do that? A market leader (such as McDonalds) is entrenched in the market as a strong performer. Market leaders perform well over a substantial period of time. It is worth investing in them.

8. Buy low and sell high. This is the most common strategy and a good one to adopt, although hard to work it out when you are a new investor. If everyone could do this, we'd all be rich! You will get better at this as you gain more experience in reading the market.

9. Buy and hold. Once you have studied your market and selected the best company for you to invest in, buy the stocks and hold on to them. Try not to panic sell if the stock price slips a little. You will need to have an exit strategy, just in case, but making money on the stock market can take patience.

10. Know your exit strategy (for example a drop of 25% of the buy in value). Once you have reached your exit strategy, sell. This is known as the stop loss limit and should be adhered to, to avoid getting caught in a market crash.

11. Buy and change often, especially if you are investing in value (income) stocks. If you know your market well you will know if there is a limit to the expected gains from a particular company. If you think you have reached the potential of your shares in this company then sell and select another investment.

12. Try and keep the emotional element out of your investing. The stock market does not always act as you think it will and can be a perilous place when certainty turns to fear.

Remember that a lot of factors influence how a company will perform and your strategy will not be foolproof. However, find out what will work for you and follow that strategy. It will help you keep track of what you want to achieve with your investments.

The global financial crisis has so far decimated the stock market with even quality companies with no debts being hammered. However what this means is that there are currently some excellent bargains to be had if you are investing with a long term view.

Of course it's recommended that you should have a well diversified portfolio, but I've always felt that there's nothing wrong with weighting your portfolio towards companies in those hot sectors that you think will do well in the next few years. So with most sectors having been hit by the global financial crisis, which sectors should you be looking to invest in that are likely to do well in the next 2-5 years?

Well this does not constitute professional financial advice and should not be seen as a recommendation, but my own view is that with commodity prices falling and oil prices having dropped substantially, this has now presented an excellent opportunity to snap up some bargains in the mining and oil sectors.

A lot of companies within these sectors are now trading on ridiculously low PE ratios and have been completely oversold by the market. Yes the drop in commodity and oil prices will inevitably hit their bottom line, but the fact is that a lot of the larger companies in these sectors are extremely well run, have little or no debts and are in a great position to snap up the smaller mining and oil companies who are not so well equipped to deal with falling commodity and oil prices.

There is also the fact that in the next few years these prices should eventually rise back up again, which will boost these companies' profits. For example, as I write this article the oil price is currently trading at $64, but in my view oil will rise back up again and should be trading above $100 in the next few years because it is after all a finite resource and there is still massive demand from rapidly expanding countries such as China and India.

Of course share prices in these companies could fall even further which is why I personally am drip-feeding money back into the markets at these levels. There will come a time in a few years time when the economy will be in better shape and the banks will have sorted themselves out. As a result share prices in general should be a lot higher, but for me the best bargains are in the mining and oil sectors. These companies should be trading a lot higher at some point in the next few years, and in the meantime you can always collect the nice dividends that are paid out by the larger more profitable companies in these sectors.

How are mutual funds different from stocks and bonds?


If you buy a share of stock, you own part of that company. For every share you buy, your ownership increases. Stocks are equity investments because you have equity in the company. In order to make money with stocks, you have to sell your stock at a higher price than you purchased it for a capital gain.


If you buy a bond, you have lent money to the company for a specified period of time. You do not own any of the company. In order to make money with bonds, you lend money to the company, and every year or six months, they pay you interest. When the time is up and your bond has reached maturity, the company repays the money you lent them. You also have the option of selling the bond before maturity.


A mutual fund is simply a mix of stocks, bonds, or both. They often include other investments as well such as derivatives. A large amount of people pool their money together and purchase a wide variety of securities. This allows those with little to invest to be able to diversify their portfolio.


Instead of buying shares of stock in one company or a handful of companies that you choose, or buying bonds of different companies, you buy shares of a mutual fund. A fund manager assigned to that mutual fund manages the portfolio and chooses the investments. You make money similarly to stocks by selling your mutual fund shares for a gain.


Which should you invest in?


You may be wondering why you would invest in a mutual fund if you could just buy the stock or why you would buy the stock or bonds if you could just invest in the mutual fund. Basically, you are wondering why you would choose one over the other when they include the same things.


One benefit of a mutual fund is that if you have a small amount of money, you will be able to diversify your portfolio. For example, if you want to invest $1,000, you may only be able to invest in a few different companies because you can only buy whole shares of stock. Similarly, if you want to buy a bonds, you would probably only be able to buy one, which would be risky in that you’d either get a very low rate of return, or lose all your money if the bond turned bad.


A mutual fund is foolproof diversification. You don’t have to choose the right stocks or bonds, which leads us to the next point. If you are the average person and don’t have a college degree in finance, it’s likely you don’t know much about investing. If you don’t know how to research and pick stocks, you are probably wary of your own choices, worried that you might lose money.


With mutual funds, a fund manager makes the choices, so you can feel a little more confident in the chosen stocks. Also, you can see a funds past performance when choosing a mutual fund. This helps give you a little more piece of mind.


Ultimately, mutual funds are great for the average person who doesn’t have a lot of money to invest, a lot of knowledge about investing, or the time to spend choosing investments and managing a portfolio.

Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875.

BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized. It migrated from the open outcry system to an online screen-based order driven trading system in 1995. Earlier an Association Of Persons (AOP), BSE is now a corporatised and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualisation, BSE has two of world's best exchanges, Deutsche Börse and Singapore Exchange, as its strategic partners.

Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market.

Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion . An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature , and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation agreement with Deutsche Börse. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs through its iShares® brand, has created the 'iShares® BSE SENSEX India Tracker' which tracks the SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market.

BSE has tied up with U.S. Futures Exchange (USFE) for U.S. dollar-denominated futures trading of SENSEX in the U.S. The tie-up enables eligible U.S. investors to directly participate in India's equity markets for the first time, without requiring American Depository Receipt (ADR) authorization. The first Exchange Traded Fund (ETF) on SENSEX, called "SPIcE" is listed on BSE. It brings to the investors a trading tool that can be easily used for the purposes of investment, trading, hedging and arbitrage. SPIcE allows small investors to take a long-term view of the market.

BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It has a nation-wide reach with a presence in more than 450 cities and towns of India. BSE has always been at par with the international standards. The systems and processes are designed to safeguard market integrity and enhance transparency in operations. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certification. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT).

BSE continues to innovate. In recent times, it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street.

In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. While the Directors Database provides a single-point access to information on the boards of directors of listed companies, the ICERS facilitates the corporates in sharing with BSE their corporate announcements.

BSE also has a wide range of services to empower investors and facilitate smooth transactions:

Investor Services: The Department of Investor Services redresses grievances of investors. BSE was the first exchange in the country to provide an amount of Rs.1 million towards the investor protection fund; it is an amount higher than that of any exchange in the country. BSE launched a nationwide investor awareness programme- 'Safe Investing in the Stock Market' under which 264 programmes were held in more than 200 cities.

The BSE On-line Trading (BOLT): BSE On-line Trading (BOLT) facilitates on-line screen based trading in securities. BOLT is currently operating in 25,000 Trader Workstations located across over 450 cities in India.

BSEWEBX.com: In February 2001, BSE introduced the world's first centralized exchange-based Internet trading system, BSEWEBX.com. This initiative enables investors anywhere in the world to trade on the BSE platform.

Surveillance: BSE's On-Line Surveillance System (BOSS) monitors on a real-time basis the price movements, volume positions and members' positions and real-time measurement of default risk, market reconstruction and generation of cross market alerts.

BSE Training Institute: BTI imparts capital market training and certification, in collaboration with reputed management institutes and universities. It offers over 40 courses on various aspects of the capital market and financial sector. More than 20,000 people have attended the BTI programmes



Awards


The World Council of Corporate Governance has awarded the Golden Peacock Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR).
The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31 2007 have been awarded the ICAI awards for excellence in financial reporting.
The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technology

Drawing from its rich past and its equally robust performance in the recent times, BSE will continue to remain an icon in the Indian capital market.

Have you lost some money in the stock market recently? You are definitely not alone. Investing in the stock market can be quite risky if you don't know what you are doing. With the current market, it can be even more riskier as there are so many unknowns. This is the biggest issue that many people have in regards to investing any money in the stock market right now. However, now is the perfect time to invest as you can find some really great bargains and have the opportunity to make some money.
So, what stocks are good to invest in now? Undervalued stocks and penny stocks are the best ones going right now. These types of stocks only take a small increase in price for you to make money. Stocks are being under priced these days because of the market downturn. Given maybe six months to a year ago, these stocks would have been priced at double what they are today.
Like any good investor knows, history will repeat itself. These undervalued stocks will increase their value in the stock market again. So, we want to purchase these now at a low price and sell at a high price later. Do you remember the buy low and sell high concept?
Adding penny stocks and undervalued stocks to our investment strategy will definitely increase the amount that we can earn from the stock market. We will be able to finally use the stock market to our advantage as it reshapes itself and the playing field becomes more level.
You can begin earning money today in the stock market. What are you waiting for?

Source-www.savetaxindia.blogspot.com