Timing Stock Market Investment: How To Do It

"Timing stock market investments affects the value of the stocks that are bought or sold in the market. Market timing affects the profit returns of a buyer or a seller in the stock market. It is also a method of strategic importance in the stock market. Market timing is attributed to logic and can become an acquired skill. It is a skill that can be an asset to a person who participates in the market, whether as an investor, or as a stock broker who knows how to play with stock market timing."

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Stock Market: Tips on Investing in a Tough Stock Market

The stock market is in the phase of the economic cycle where it is considered a tough market for investors. Merely buying a stock and waiting for its price to rise is a tricky strategy presently. Here are tips for investing in the stock market now:

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How to Invest in a Tough Stock Market
By Matt Fox

In today's stock market you need to know why a market can change on a dime and how you can beat the market at it's own game. The changes in the markets are based on cyclical stocks that are influenced by economic growth commonly known as Gross Domestic Product or GDP growth. Normal economic growth is usually between -2% to 5%. When the economy is running at full speed, at or near 5%, the Federal Reserve will try to slow the economy if inflation seems to be becoming a problem. The only tool the Fed can use to slow the economy is by raising interest rates. Higher rates will slow the economy. This situation exists today. We have a roaring economy and the Fed has increased rates to a level where the economy is slowing down.

Cyclical stocks are stocks that are interest rate sensitive and rise and fall with the rates. Financials, house builders, retailers, auto manufacturing and tech companies are all cyclical in nature. These companies sell items that consumers or businesses will purchase only when the economy is improving or doing very well. Secular stocks are stocks that are not interest rate sensitive. These are the health companies, supermarkets and food companies. Secular companies sell items that people use on a daily basis and don't need a roaring economy to be purchased.

A tough stock market will be beaten if the companies that are cyclical in nature are sold and secular companies are bought. The strength of the underlying financials are still important, but if strong companies with a long history of good management and quality earnings are purchased, you will be much more likely to earn a profit than with the cyclical stocks that will fall regardless of the strength of management. Because you know when the stock market is changing you can play the proper stocks at the proper time.

One additional tip is needed to produce the most income from your investments. These huge companies with quality management will get beaten down to a level where the growth investors can't take the pain anymore and will sell to you, the value investor, who is purchasing stocks in companies that will bounce back at much lower prices than normal. These companies will cycle up and down with rates and you can act accordingly to maximize your investment.

Matt Fox is a successful investor in the stock market, real estate market and in private deals with individuals and businesses. He is currently writing a book giving his secrets to successful investing. Read his blog at http://www.bizmaker.blogspot.com for more investing tips and business advice.

Article Source: http://EzineArticles.com/?expert=Matt_Fox

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Technorati tags: stock investing, stock market analysis, stock market.

Stock Investment vs. Mutual Funds

Stock investment decisions generally present a greater variety of issues for the investor than for the person putting money into mutual funds. Here you will gain insight into the comparison between these two types of investment.

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Which One is Better for Investing: Mutual Funds or Stocks
By Mostafa Soleimanzadeh

Comparison between Mutual Funds and Stocks

Diversification

Mutual fund companies invest in a variety of stocks, bonds, and money-market investments, so mutual funds carry much lower risk than stocks.

Professional Management

Mutual funds enable investors to pool their money and place it under professional investment management. These managers have been around the industry for a long time and have the academic credentials to back it up.

[Editor’s note: With stock investment, you--or your broker--are the management and that may be good, depending on your information sources.]

Greater Upside Potential

Individual stocks have a greater upside potential than most mutual funds. Fluctuation in stocks is greater than mutual funds, so you have greater chance to earn more return.

Risk and Return

In general, Risk and return depend each other, the greater the risk, the higher the potential return; the lower the risk, the lower the expected return. Mutual funds try to reduce their risk by investing in a diversified group of individual stocks, bonds, or other securities.

[Editor’s note: Mutual funds come in a variety of ranges of risk and expected rates of return. Selections of individual stocks also come in a variety of ranges of risk -- witness stock investment in dividend-paying blue chip stocks versus speculative stocks that do not pay meaningful dividends. Risk is often tied to the price variability of a stock investment.]

Efficiency

Mutual funds have large sums of money to invest and often they trade commission-free and have personal contacts at the brokerage firms.

Conclusion

By investing in stocks you can get more return than mutual funds but, by investing in mutual funds your risk is lower. Mutual funds are great for funding retirement plans and investors that don't have the time or energy to consider individual stocks.

It is noticeable that most expert traders in stock market invest in mutual funds too. I recommend investing in both of mutual funds and stocks but, if you have experience, time and energy you can invest most of your money in individual stocks.

By Mostafa Soleimanzadeh. Investing in the Stock Market Tips, Learn how to Invest in Mutual Funds.

Article Source: http://EzineArticles.com/?expert=Mostafa_Soleimanzadeh

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Technorati tags: mutual funds, stocks, investment, stock investment.