Five Interesting Ways to Get Involved in the Stock Market Monday, Sep 13 2021 

By Jacob Maslow–Branded Content

Are you shopping around for a way to get involved in the stock market? Fortunately, in the era of online investing, there are multiple ways to put your money to work in the securities exchanges, aside from traditional approaches like buying and holding blue chip stocks. Today’s market savvy investors know how to pool their resources, follow social trends, leverage the power of low-cost issues, earn profits from day trading, minimize risk by owning index funds, and reaping the rewards of owning shares that pay regular dividends. For anyone who finds the traditional strategies boring and limited, the following approaches offer a fresh way of earning a potential profit on investments of any size.

Social Investing

Numerous brokerage sites allow account holders to follow a guru, or selected member who has years of experience in a particular niche, like consumer goods or the financial sector. New members can simply follow the leader, whose purchases and sales are listed on the site so whoever wishes can replicate their actions.

Penny Stocks

There is no set-in-stone definition of what a penny stock is, but most agree that any shares priced below the $5 level qualify for the title. One of the best things about penny stocks is that you can purchase multiple shares for a modest amount of money. Plus, you can review a penny stock trading guide that teaches the basics for beginners who want to start out with accurate information. 

Another key benefit of this asset class is that many of the low-cost shares have plenty of room to grow. Of course, there are no guarantees that any corporation, large or small, will be a long-term success. But unlike blue chips and other high-priced issues, penny shares sometimes rise in price considerably. You need not be a mathematician to see the difference between an investment the costs $5 and rises to $50, compared to one that costs $200 and rises to $225. Penny stocks represent a potentially large upside and a relatively small downside in most cases.

Day Trading

If you’re the type who doesn’t like to hold positions overnight, and enjoy the fast-paced action of doing several transactions per day, day trading might be your best choice. People who day trade go to cash before the end of each session and typically specialize in just one or two companies’ stocks. Deals move at lightning speed and you’re never left wondering, at day’s end, whether you notched a profit or a loss.

Index Funds

If you prefer to play the entire market all at once, or even an entire sector of it, index funds offer the opportunity to take part in the general movement of the whole securities market or the segment that interests you. For instance, you can buy shares of various funds that track the Dow or S&P, or buy into indices that include only financial institution, or only manufacturing company issues.

Dividends-Only Shares

Some build portfolios that consist exclusively of dividend paying stocks, which means they receive payouts on a regular basis. There are aristocrat companies that have long histories of paying dividends every quarter. For many years, there have been people who only purchase these kinds of stocks.

Photo Courtesy of Jacob Maslow//Cosmic Press

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How to screen stocks Sunday, Mar 14 2021 

By Jacob Maslow — Branded Content

The science of stock screening has been around for more than a century, even since there were large, centralized exchanges where people could buy and sell corporate ownership shares. Indeed, some of the most effective screening methods are as old as the hills, but they are ever-popular because they give investors peace of mind. None of the methods listed below guarantees that you’ll screen out faulty, weak companies and screen in the best ones.

However, logic can be the best guide when you examine the reasoning behind each of the techniques. For millions of active traders and investors, it’s helpful to combine several of the strategies. Here’s the general philosophy behind each of the four major screening systems.

PE Ratio

P/E ratio, or price-per-earnings ratio, as a way of identifying financially strong companies is one of the simplest and most favored selection tools. There are two steps to calculating the number. First, find earnings-per-share by dividing the company’s earnings by the number of outstanding shares. Then, divide the share price (P) by the earnings-per-share (E). If the number is below 15, it’s said that the stock is a good buy. P/E ratios above 15 indicate an issue that is too expensive and thus does not represent a wise investment.

Penny Stocks

The most accessible screening tool of all asks a question: “is the share priced below $5?” If the answer is yes, then it’s classified as a penny stock and comes with all sorts of unique features, some positive and some negative. However, some traders only deal in this segment, while others avoid it. So many active investors opt of penny-shares because you don’t need a ton of capital to get started.

Here’s an example of using two tools at the same time. Look at a list of companies you’re thinking about investing in. Assume there are 250 corporate names on the roster. First, you might decide to eliminate all the non-penny offerings, and end up with (again, just as an example) 50 company names remaining. Next, you’d eliminate all the ones whose P/E ratio is above 15. Perhaps that would leave you with ten or so candidates, from which you could further screen or opt to purchase all of them.

News

The internet makes a news-search easy. Find all recent news stories on any corporation you have on your might buy list. Look for negative and positive news from within the past six months or an entire year. There are no hard-and-fast rules with this technique, but once you’re finished reading, you’ll have an excellent feel for how the organization is doing in terms of overall performance, profits, and prospects.

The Trend

Charts come in handy for research, and you’ll need them to find the price trend of the shares that interest you. This screen involves eliminating any company that is not in a current up-trend, defined by the 50-day moving average above the 200-day moving average. This simple method is often used as an initial screen by long-term investors.

Photo Courtesy of Jacob Maslow // Cosmic Press

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