Tag Archive | "stocks"

The Bullish Case For Stocks

Bullish On Stocks

With major stock market indexes making new record highs, is there still a bullish case to be made for stocks? Can stocks continue to move higher from record high levels?   It may be hard for many investors to accept, but one can still make a bullish case for stocks, even with the record highs and lofty stock valuations. The key is to think outside of the box regarding what the records highs really represent and take into consideration what may happen in the not too distant future in regards to corporate earnings. It is earnings that ultimately determine the direction of stocks, and therefore, earnings need to be the central part of any analysis regarding stock market direction.

The Bullish Case For Stocks | Make Adjustments For Inflation

One way that the bullish case for stocks can be made is by looking at major stock market indexes through the prism of inflation. The media loves to focus on previous stock market index highs without taking into account how inflation factors into stock prices. While the Dow Jones Industrial Average, Standards and Poors 500 (S&P 500) Index and NASDAQ Composite Index making new nominal highs makes good headlines and creates a splash in the media, surpassing previous highs that were set years ago does not tell the full story.

For example, the last time the NASDAQ Composite Index made a high just above the 5,000 level (5,046.86 to be precise) was during the dot.com bubble days of the year 2000. It took fifteen years for this record level to be exceeded. In April 2015, this previous peak for the NASDAQ Composite Index was eclipsed when the NASDAQ Composite Index raced above 5,100 on the back of a long bull market run and the incredible performance of its major component, Apple Computer (NASDAQ: AAPL).


However, just breaching the former record level is not that great of an accomplishment. Since the NASDAQ Composite Index peaked at 5,046 in 2000, the overall economy has undergone fifteen years of inflation. While inflation has been relatively subdued during this fifteen time period, it is still a factor when determining inflation-adjusted record levels for stocks. In fact, the NASDAQ Composite Index peaked above the 6,300 level in 2000, when inflation since the year 2000 is factored into the index’s 2000 peak.

Taking into consideration the inflation-adjusted peak, the reality is that the April 2015 nominal high in the NASDAQ Composite Index above the 5,100 level is actually more than twenty-three percent lower than the 2000 NASDAQ Composite Index inflation-adjusted peak of 6,300. In other words, despite media headlines heralding a new NASDAQ Composite Index record high, on an inflation-adjusted basis, the NASDAQ Composite Index needs to gain more than twenty-three percent to make an actual new high.

How does this all relate to the bullish case for stocks?   It means that despite major stock market indexes making nominal new highs during 2015 that beat previous records, these indexes, and subsequently their underlying stocks, have room to move more than twenty percent higher before they reach the inflation-adjusted peak levels set during the dot.com boom that peaked in 2000. This is important information to understand, as is means the current stock market bull-run has room to continue higher.

The Bullish Case For Stocks | Other Reasons To Be Bullish

There are many ways to make the bullish case for stocks, even as stocks endure one of the longest bull runs in history and reach valuations that are well above the average historic price to earnings ratio (P/E ratio) of fifteen.

Bullish Case For Stocks

The main reason to be bullish on stocks for the foreseeable future is that central banks around the world continue to pursue easy money policies. With the exception of the United States, most of the central banks in important economies around the world are providing some type of monetary stimulus in the form of Quantitative Easing (QE). On top of this stimulus, central banks are maintaining unusually low interest rates, which is making stocks attractive investments in comparison to fixed price interest bearing assets that are based on central bank policies.

Another reason to be bullish on stocks is that corporate earnings, while taking a breather in the United States, continue to grow throughout the world. This is boosting world stock markets, even as the United States stock markets have trouble moving appreciably higher. While the first half of 2015 has been tough for United States domiciled companies’ earnings for a number of reasons, from the strong United States dollar to the crash in oil prices, these factors appear to be self-correcting. The second half of 2015 should provide a better earnings backdrop for United States based companies, which in turn should boost the stock market towards the later part of 2015.

The United States Federal Reserve is expected to start raising interest rates at some point during the second half of 2015.   While this will likely be bearish for stocks around the time that interest rates are initially raised, history tells us that the first two years interest rate increases is typically a bullish time for stocks. This is because the economy is usually strong when the Federal Reserve raises interest rates, which provides a lift to corporate earnings and to stocks. It is also because certain sectors of the stock market outperform during times when interest rates are rising. Specially, the financial sector does better than the overall stock market, because financial stocks make more money as interest rate spreads widen during interest rate hikes. The bullish performance of financial stocks often leads the entire stock market higher.

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Research is the Key to Investing in High Risk Stocks

Understanding high risk stocks is the key to investing success

high risk stocksInvesting in high risk stocks presents the potential to make significant returns. As with all investments, the possibility exists that the individual may lose their capital if the stock does not perform well. It is very important that the perspective investor know how to identify good risks, consider their features, familiarize themselves with the various types available to them, and understand the potential that exists regarding earnings and loss. Research is a savvy investor’s best resource when they are considering which stocks to invest in.

The first step in the process of investing is the ability to identify the difference between high and low risk stocks. Typically, low risk stocks are found in established companies and these usually prove to increase slowly and consistently over long periods of time. There is, of course, the possibility that the value will take a sudden downward trend, this is a risk that all investors accept. On the other hand, high risk stocks tend to make rapid, significant returns or similarly fast losses.

The success or failure of high risk stocks are affected by many conditions

The volatility and unpredictable nature of high risk stocks are the attributes that make them potentially valuable. The stocks of new companies are typically considered high risk and may skyrocket as investors speculate on their success, only to plummet after launch. There is also the consideration of new or emerging legal or internal problems that may cause a previously profitable company to lose value suddenly.

A wise investor will consider all of the possible conditions that have the ability to affect their capital and make educated decisions based on comprehensive research. Understanding the different types of stocks, their individual features, and the potential for that particular stock to perform positively or negatively is vital to the success of an investment. Investing in the stock market always poses some inherent risk; however, high risk stocks are naturally more dangerous than others.

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High Risk Stocks Offer the Best of Both Worlds!

High Risk Stocks Pack A Powerful Pecuniary Punch

high risk stocksIdeally, high risk stocks offer correspondingly higher returns. All stock offerings have the potential to become high-risk at any time. Nonetheless, certain immutable economic factors render some stocks inherently riskier when compared to others. Accurate identification of superior high risk securities is reducible to two primary tasks: definition and desirability.

Defining High Risk Stocks

Relatively risky business concerns that need to raise capital offer high risk stocks. Short-term factors like trade volume always influence stocks’ relative risk levels. However, stocks consistently characterized as “high-risk” originate from riskier commercial ventures. This higher perceived risk results from a greater statistical likelihood of ultimate business failure and concurrent loss of investors’ capital.




Following Are A Few High Risk Stock Characteristics:

*   Absent or inadequate registration

*   Brand new business venture

*   Corporate under capitalization

*   Managerial deterioration

*   Overall industry weakness

Picking Good High Risk Stock Investments

Many investors are pleasantly surprised to learn that good high-risk securities actually exist. The key to selecting desirable high-risk stock investments is being able to accurately distinguish between perception and reality. Many stocks are categorized as high risks merely due to statistical probabilities. Such theoretical figures do not mean that the eventual failure of a business is certain, however. Look to the following indicators to glean a fuller view of the stock’s probable future performance:

*   Strong quarterly reports

*   Huge industry growth potential

*   Product/service innovation

*   Unique competitive advantage

*   Exceptional value

*   High demand within non-saturated markets

Investors must evaluate these and many other factors when assessing the financial feasibility of various offerings. The relative risk levels of “risky” stocks vary widely by features like revenue consistency, debt/income ratio, and cyclical cost conversions. These interactive factors are dynamic and complicated. However, the effort invested in learning how to identify the best high risk stocks is well worthwhile!

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A Few Pointers Before You Day Trade Stock Picks

Look Into This Day Trade Stock Picks Crystal Ball

day trade stock picks

When looking for some day trade stock picks, careful thought is more important than the address of a local gypsy woman with plenty of free parking. The reason for this is that almost any stock can be a candidate for day trading at some point in the year, but very few stocks are sure-fire winners every day of the week. It can be easy to day trade stock picks. Drag out the dartboard and let fly. After you have given away that first hundred thousand, sit down and take stock of what you have learned from this very expensive educational experience. A few conclusions will no doubt leap to mind.

The Two Underlying Requirements For Good Day Trade Stock Picks

The first thing you want for a day trade stock picks candidate is volatility. Day traders move very fast. If a stock simply sits on the board and does nothing for an hour, the day trader loses, because the name of the game is to keep your money actively moving at all times. You have to go to where the action is.

The next thing you want for your day trade stock picks is an offshoot of volatility, namely trading range. This means that a dollar move on Apple is not going to do you much good if you are a day trader. It is such a microscopic percentage of the stock’s price, that you are essentially unable to make any money off of such a move. A one point move on a stock trading in the ten to fifteen dollar range offers the chance to make some serious cash, particularly if it yo-yos up and down all day long. There is no need to fall in love with particular day trade stock picks, so long as the stock you settle upon moves fast, far, and frequently.

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Keys for Learning How to Trade Stock for Beginners

 Discovering How to Trade Stocks for Beginners

Learning how to trade stocks for beginners can be a daunting mission for those who have no experience investing. You have probably heard horror stories of people losing their fortunes from one wrong move.  Thankfully, this is not usually the case for smart and cautious investors. A well diversified investment portfolio can help to protect you from these circumstances.

Learn How to Trade Stocks for Beginners

How to Trade Stocks for BeginnersFor a beginner, there are two key elements to keep in mind—diversity and stability. The stock market is not a get-rich-quick scheme. If you want a fast paying gamble, go to the track, as you would probably have better odds. Learning how to trade stocks for beginners involves careful study of potential investments. Look for companies that show gradual improvement rather than those whose charts look like roller coasters. Every stock will experience slight ups and downs, but be wary of those which rise and fall without any steady gain. Spread your assets over a broad range of investments, including categories such as energy, technology, and commodities. By diversifying your investments, you protect yourself if one area suffers a big hit. The other stocks balance it out.

Beginner’s Luck

As you figure out how to trade stock for beginners, beware of your new found success. Those who profit greatly from the beginning may find their ego swelling more quickly than their knowledge.  They get gutsier with trades and make disastrous mistakes. Keep a level head. Find a trading strategy that works and stick with it until there is reason to change it.

As you become involved in the stock market, give yourself time to grow and learn.  Learning strategies and tips for success takes time and effort. Do not be discouraged if profits start lower than you had expected. With time and research, you can master how to trade stocks for beginners.

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Mining Company Stocks: Think Gold

Weighing Your Options On Mining Company Stocks

mining company stocks

Gold will always be a solid investment, and will keep going higher if the world keeps printing money, but mining company stocks will always be worth a look, although there are some who would disagree.

While it is true that gold is more rare than platinum, it is also not as hard to get to, which is why so many people seek it. Mining companies search the world for precious metals, they need investments to fund their ventures, and that is where you come in.

Mining Company Stocks and Their Commodities

Gold is a commodity, and many experts would tell you it is best to buy the coins. However, if you buy mining company stocks your investment may be worth more than the actual gold. The reason is that the value of gold stocks are more sensitive to the price of gold because they are valued on their anticipated profits. Of course, oftentimes a company will search for years and come up empty. However, should they make a major discovery, you will be rewarded for your trust in them. In other words, you need to ask yourself if you feel a bird in the hand is worth two in the bush. Now, if you are considering silver, it is worth noting that while many companies are prospecting and coming up empty, you want to find a company that is actually making silver. As strange as it sounds, there are companies out there with the resources to do it.

Mining company stocks can be bought through your brokerage account, and whether you decide to opt for the bird in hand, or go for the two in the bush, remember the other old adage, courtesy of the construction industry: measure twice, and cut once.

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