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Posts Tagged ‘investments’

It’s been a wild and wooly couple of weeks on the international stock markets. But is the recent slide grinding to a halt…or just taking a breather before tumbling some more? And more importantly, what does it mean to astute penny stock investors?

Wall Street recently stumbled to its worst week of the year, and global stock markets fell dramatically on concerns about rising interest rates and slowing growth. After rising almost 9% in the first four months of the year, the Dow Jones industrial average has fallen about 6.5% from a six-year high, reached May 10, 2006.

Stocks have been ailing because penny stock investors fear the Fed could be so focused on inflation that it ignores signs of an economic slowdown, raises interest rates too high and sends the economy into a recession.

Global stock markets were sent reeling last week after golden-tongued U.S. Federal Reserve Chairman, Ben Bernanke shocked penny stock investors in saying the Fed will continue raising interest rates to keep inflation in check.

And that decision will have a direct impact on the penny stock market. Higher interest rates hurt penny stock prices because investors believe it will curb economic growth and corporate profits.
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You have seen their ads and you may have wondered if they are worth a second look. What am I talking about? Online banks! Also known as internet banks, these are financial institutions who provide the majority of their banking services over the internet. Typically, online banks offer consumers high savings rates, low loan rates, and a mix of other services. Let’s look at 7 winners in this fast growing field:

1. E Trade Bank Part of E Trade Financial, the discount internet stockbroker. E Trade Bank offers checking accounts, money markets, and certificates of deposits as well as a VISA credit card.

2. Netbank Along with offering checking and money market accounts, Netbank provides mortgage and home equity lines of credit to customers. With tie-ins to affiliated companies Netbank also offers Auto, Homeowners, Condo/Co-op & Renters Insurance and Life, Health, Long Term Care & Dental Insurance.

3. Virtual Bank VirtualBank, a division of Lydian Private Bank, is a federally chartered bank regulated by the Office of Thrift Supervision. The bank offers checking, savings, and credit card services to customers.

4. Ever Bank This leading internet provider of banking services offers the most extensive, and varied services of any online institution. Ever Bank offers business and personal checking accounts, mortgages, home equity loans/lines of credit, reverse mortgages, a VISA credit card, and world currency accounts. This latter category is for investing in Deposit accounts and CDs denominated in any major world currency.
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I like maxims and quips. Little phrases that tell a big story. I like the parables in the Bible because a child can say “I get it,” and an aged student can say “Oh… now I get it.” The principle of keeping it simple is a good one for most of life’s situations including trading. And while trading skills are not easy to master, they involve simple principles.

Mastery in most areas of life includes learning to conserve extraneous movement and effort. When it is done right it looks simple and onlookers often say “Well, I could do that.” But the “wanna be” soon finds that it is not as easy as it seems. Trading can be frustrating and discouraging, but when the market seems to get you down and you feel like you will never get it, remember Sean Connery’s famous line, “Impossible, but doable.”

Too often, traders experience real highs and real lows. While the give and take is normal and expected, big swings are usually the result of changing stride or technique inappropriately. Finding your stride or niche can really make the trading life a lot more consistent and smooth and therefore, profitable. Getting to know a few terrific trading stocks rather than collecting all the potential candidates from recommendations and scans begins to overwhelm a trader and changes the rifle shot accuracy to a shotgun splatter.

So, a while back in a Trader Talk Live training a student wrote “- the past 7 days of trading have been absolutely fantastic. I have confirmed again the value of following just a few stocks and getting to learn (as much as possible) their behavior. PD is one of my all time favorites”. She was referring to a principle that is trained in the Trader’s Forge two day trading camp that I conduct once a month. I advise students to build a stable of good trading stocks and get to know them. Pick your favorite 6-10 and back trade them repeatedly. Learn to recognize the patterns of behavior. Does it behave in similar ways around earnings? Does it make clean or sloppy turns? Does it have a tendency to throw certain chart patterns? In doing so, you get a feel for the traders who influence the stock and improve your chances to repeatedly tap that stock for pattern trades.

The patterns we observe are the behavior of people. Key Traders are interacting with various levels of traders, brokers, fund managers and the public. This cast of players is unique in each stock or group of stocks, bonds, commodities etc. Hence, unique patterns develop and that is the key. Instead of flitting around like a butterfly from bush to bush looking for a new flower, you can find certain flowers that keep producing on a regular cycle. You develop a routine and learn the cycle so that you can just stick around and harvest over and over again.
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