Archive for August, 2011

As I predicted at the end of last week, when the stock market goes down heavily in a short period of time, it’s due to bounce back to correct itself. The Stock Market today sees a small gain, unfortunately, the gain is very small.

The Dow Jones Industrial Average increased just 37 points at the closing bell, increasing to 10,854. It is still under the 11,000 mark. It actually saw the 11,000 mark today with a day high of 11,020. When it hit the 11,000 mark earlier today, it seemed as if the market will keep rallying, but tensions in the economy, especially in the financial sector, has brought things down.

The Nasdaq Composite only gained just over 3 points today. And the S&P 500 gained just 0.28 points.

But what about Gold?

The price of Gold Rallied once again reaching almost 1,900 points at today’s high. It balanced with a gain of about 45 points for a total of $1,889 an ounce. It’s incredible how quickly Gold has risen this year. Many are claiming that it’s just a bubble and that it will burst sooner or later. The price of Gold is increasing too high, too quickly and these claims may be correct. In fact, today, Gold has seen a huge drop earlier in the day. It dropped below $1,700 and for a moment, it seemed as if it’ll keep going down. But it rallied back up just as quick.

The following graph is provided by Yahoo! Finance. This shows the huge drop in Gold price earlier today, makes the whole graph look ‘V’ shaped. I would not be surprised if the price of Gold keeps going up and eventually hits $1,900 an ounce this week. I do believe that this is a bubble and that it will burst. But I also believe that this bubble is looking strong and sturdy and it may keep growing through the coming weeks.

Price of Gold Graph

Price of Gold Graph

The banking sector isn’t really helping the economy. Bank of America (BAC) dropped almost 8% today coming near it’s 52 week low of $6.31 per share. JP Morgan Chase (JPM) dropped 0.94 points or almost 2.75% for the day. JPM reached it’s 52 week low earlier today. Citigroup (C) dropped an almost 3% as well and just like Chase, it has reached its 52 week low earlier today.

Even with the Stock Market seeing Green overall, certain companies and stocks have limited just how well the stock market has done, or should have done today.

Some stocks that have helped the stock market go into the green include Hewlett Packard (HPQ) which increased 3.6% today, after dropping 20% at the end of last week. Universal Display Corporation (PANL) rallied 24.5% today. That is a huge jump for this stock going up to $34.76. This stock has been steadily dropping over the past few weeks and have turned around today. It’s still no where near it’s 52 week high of $63.58. They’re not too far off, if they can release some more good news in the coming weeks, they should be able to rally some more.

The market today has seen its ups and downs. Some stocks have made it very hard for the overall market to rally. But today, we saw a positive score on the stock market and it was a great feeling compared to the downward movement we’ve been seeing over the past few weeks. The price of gold has rallied once again and in my opinion, it will keep going up because gold seems to be the most reliable constant in terms of value. It started the year at $1,400 and it shows no signs of stopping. But if you are looking to invest in Gold, I would advise that you very carefully think about it because if they’re right, and it is a bubble, it could burst soon because the faster a bubble grows, the quicker it explodes.

Online Stock Brokers

Years ago, to make a trade, you either had to call your stock broker, who was an actual person, and ask him or her to buy a stock for you. The process could take several minutes from the time of the call to the actual purchase and the actual stock price may have changed. The other way is to be on the floor at the New York Stock Exchange and make a purchase there. Either way, it wasn’t very convenient for people like you and me who have other things to do and other places to be. Thanks to the technological revolution we have been experiencing in recent history, trading stocks has never been easier. Thanks to Online Stock Brokers, you and I can trade from the comfort of our own home and without relying on a third party human to make the trades for us.

There are many online stock brokers now. They all have their advantages and disadvantages over one another, but they all make trading much easier and in most cases, cheaper.

Commissions paid to online stock brokers are far less than what you would have to pay an actual person to trade for you. Most online stock brokers also provide traders with various tools that allow you to deeply research into companies you may be interested in investing with. These tools include watch lists, research sections, as well as individual reports of companies by various analysts that you would normally not find on the internet.

Watch lists allow you to keep track of various stocks without actually purchasing them. Some brokers have special features with their watch lists such as notifications and the ability to export the information to a spreadsheet like Microsoft Excel.

Watch List notifications are very handy tools because you may not have the time you need to keep an eye on the stock all day long. You may want to set up a notification that notifies you when the stock has reached a certain price so that you can purchase it. Notifications in most cases can be set up to receive emails and text messages to your cell phone.

Most of these online stock brokers also come with live streaming quotes. These streams are updated live and allow you to buy and sell stocks in seconds. These quotes are much more reliable than the quotes you get from places like Yahoo Finance or MSN Money. In my opinion, this is the best tool any online stock broker can provide because it is all real-time so you won’t miss your opportunity to purchase or sell shares the price you want.

Another handy advantage of an online stock broker is the ability to set your own orders. There are different orders such as limit, stop, and stop limit orders. These orders allow you to place certain parameters for your future orders. For example, if you own 10 shares of Citigroup  and would like to sell them when the price of the stock reaches $30, you can set up a stop order or to sell at $30. The system will then automatically sell your shares whenever the value of Citigroup reaches $30. This is a great way to maximize profits or or minimize losses.

I’ve told you quite a bit about what online stock brokers offer, so you may be asking, what are some good online stock brokers.

I personally use Scottrade. I have been using their system for almost two years and I don’t regret it. Their trade price is $7 per trade. This means that I pay $7 in commission whenever I sell or buy a stock. They provide great tools including an awesome streaming quotes software. I generally have it running on the side of my monitor or in the background where I monitor stocks that I own and stocks that I am keeping my eye on for the future. If you’d like to try Scottrade, you can actually get 3 free trades by signing up with my referral number, VXPP8981. You can also click the following link to be forwarded to the sign up page: Click to Sign up with Scottrade.

You will get 3 free trades worth $21, and I will get 3 free trades. It’s a great way to get started and make your first purchase. They do require a $500 minimum deposit so make sure you’re ready when you do sign up!

Another great stock broker is E-Trade. You may have seen commercials on it with the talking baby, I guess the message they are throwing out there is that it’s so easy that a baby could do it. I have an account with E-Trade, however, I never actually put any funds in there. Their regular trades cost $9.99 per trade but they lower it to $7.99 if you make more than 150 trades per quarter. I am not a heavy investor, I only have a few trades a year.

E-Trade is also running a promotion where you get a $500 sign up bonus if you start an account with $2,000. This is also a great way to get started. But remember, you may have to pay interest taxes on the $500! You can sign up at E-Trade.com.

Another broker that has been making a breakthrough into the market over the past few years is Think Or Swim. They are currently owned by TD Ameritrade so their promotions and prices have been combined. They offer a flat $9.99 per trade  and now, if you open with $2,000 or more, they give you free trades for 30 days. If you make 20 trades your first month, you’ll be saving about $200. That’s a great way to start as well.

Another option you have is actually called Options House. They have been around for a while and they offer some of the lowest commission rates I have seen. They have a flat commission of $3.95 per trade. I have actually thought about moving here from Scottrade or even just opening a second broker account with them and conduct all of my future trades here. They require a minimum deposit of $1,000 to open a cash account. They are currently running a new promotion where you can get a 100 commission free trades, value of almost $400, if you open an account with a deposit of $3,000 and use the coupon code FREE100 when signing up.

Scottrade, E-Trade, Think or Swim, TD Ameritrade, and Options House are just five out of the many other options that you have when you have to choose an online stock broker. Other brokers include names like Schwab, TradeMonster, and OptionsXpress. They all have their advantages and disadvantages over one another. This articles serves to provide you with general information regarding online stock brokers.

The internet makes it easier for all of us to invest. But don’t allow companies to take advantage of you. Always do your own research and speak to representatives from stock broker companies that interest you before making an informed decision. In the future, I hope to provide you with more in depth reviews of some of these stock broker companies to help you with your research in finding the perfect stock broker for your needs.

Happy Investing!

Gold Sets a New Record

The price of Gold Soared for the second day in a row and broke records once again. Today, the price of gold hit a record $1,880 per ounce. This just proves that the economy is getting even worse. During time of economic turmoil, the price of gold always rises because of the fear of a country’s own currency lowering in value.

If you think about it, Gold is actually pretty worthless to the average person. You can’t go to the local grocery store with a bar of gold and expect the cashier to accept the gold as currency. So why are people and institutions and even some countries buying enormous amounts of gold?  The simple answer may be that gold has been seen as something that’s constantly valuable throughout human history. This rare and shiny metal seems to always catch the eye of human beings. The value of gold is more trustworthy than a piece of paper (or cotton) in your hand with a dollar value on it.

What can we expect to see from gold in the coming future? If the economy doesn’t turn around, we could see the price of gold getting to new heights. Personally, I would not be surprised if I saw the price of Gold jump to over $2,000 an ounce in the near future. And if inflation keeps up, it will only drive the price of gold even higher. Even though the price of gold seems to be very high right now, it’s actually not very high if you take inflation into consideration.

Another outcome is that the gold bubble may burst. Just like a regular bubble, the price of gold (the gold bubble) is being inflated, and some believe that just like any bubble, it will burst and the price will come crashing down. Although that’s a possibility, we would need something very dramatic to happen in our global economy. As long as there are economic troubles, high jobless rates, war, and anything else bad that you can think of, the gold bubble will keep gaining more energy.

At this moment, the price of gold seems to only be going up. Gold has had the biggest rally this week since 2007. Risky investors may believe that this is a great time to invest in gold because the price will keep going up. That may be true, but it could also be that gold is about to hit a ceiling and it will come crashing down. If you are looking to invest in gold, I’d highly advise that you carefully think about it before you make a decision. It could be the best move you will ever make in your financial life, or it could be the worst.

The current price of gold is holding at under $1,850. It has been steadily dropping since the opening bell. We will have to see whether the gold rally continues into next week or whether some investors are using this opportunity to cash out.

Stocks Plunge as Gold Soars

Over the past few weeks, we have seen the Stock Market be extremely volatile. It has gone down dramatically and have come back up the same way. Whenever you hear something about an economy at home or abroad, the stock markets plunge, and when more news comes out, the prices stabilize almost as quickly. And whenever stock prices fall, Gold prices soar. Earlier today, Gold prices hit a record high of $1,830 per ounce. Gold prices have doubled since 2007 and it is almost up 20% since this past June.

Today the Dow Jones Industrial Average fell 445 points (or 3.9%) an hour after the opening bell. It was reported to have been down 528 points earlier. It was down below the 11,000 mark for quite some time. It has gone back up at this time but the market today is very volatile and I would not be surprised if the Dow Jones went back below 11,000 and stayed there by the time the markets close later today. It has already happened several times in the past few weeks and unless something big happens in the global economy, it’ll most likely happen again over the coming weeks.

The S&P 500 fell 4.2% (or 49 Points) and the Nasdaq Composite fell 112 Points (or 4.5%). The price of crude oil also dropped almost $4 to $83.63 in the fear that the weaker economy will equal less demand for the product. This won’t affect gas prices too greatly, it may go down a few cents as it has during almost every drop this year.

This is not the end. This is what volatility is. The Stock Market is experiencing extreme mood swings and even though the it’s down almost 400 points right now, it will go back up and then go back down again. News about more crisis in the US and Europe will continue to come in, inflation will increase prices of every day items that we buy, and it’ll keep happening until all the debt issues are solved, and personally, I don’t see it happening any time soon because of the lack of cooperation we have been seeing in governments.

Until then, we can only sit back and watch. We’ve seen recessions like this several times in the stock market’s history, even though it may not get better tomorrow or next week, but it will get better eventually and then we can all leave this turmoil in our past.

 

Update 4:14PM:

The Dow Jones finished at below 11,000 points at the closing bell with 10,990 dropping more than 419 Points. . The Nasdaq Composite drops 131 points finishing off at 2,380. And the S&P 500 drops 53 Points finishing off at 1,140.

Price of Oil drops even more for a total drop of $6 so far today for a current price of $81.61.

We will have to see whether the big drop continues onto tomorrow or whether things bounce back like it has recently after a big drop like we experienced today.

Welcome to Stocksicity

Welcome to Stocksicity! A new blog dedicated to the business of the Stock Market.

I will comment on the day’s trades. I will also try to point out individual stocks and comment on them if I have something to say. It could be about the day’s highest gainer or biggest loser.

Because I am the only person involved, updates may not come every day.  I will update as often as I can with as much information as I can.

Thanks for visiting Stocksicity!