A trading system is of no use without the tools to implement the system. In today’s age of personalized stock marketing, you can either spend a whole lot of time learning the market’s ins and outs-or you can get software that will do everything for you. However, choosing a package, or deciding whether to use one at all, can be very confusing to a beginner. This is especially true when you consider that there are literally hundreds of software packages available to assist traders.

Stock charting software comes in many shapes and sizes. But most models independently track the market on a constant basis and give you graphs and alerts to show when you should buy or sell.

Here is the video on Youtube:

The rapid advance of internet and stock trading technology during the late 90′s has bred a new kind of investor – one who is more independent and hands-on than ever before.

Technical analysis has risen in popularity in recent years because it provides independent investors with the tools to make informed investing decisions.

Here is the video on Youtube:

This video covers the daily charts of the S&P 500 (SPX), Dow Jones Diamonds (DIA), Nasdaq Composite (COMP), and Russell 2000 (RUT). Today I discuss a break out for the RUT as well as the push by the other indices to challenge their recent peaks.

Here is the video on Youtube:

Learning what are the factors affecting the best time to sell stocks is a key attribute of investments. While rather a bit of time and inquiry goes into deciding stocks, it’s much hard to know when to pull out – specially for first time investors. The good news is that if you’ve chosen your stocks carefully, you won’t require to pull out for a very long time, such as when you’re ready to retire. But there are particular cases when you’ll require to sell your stocks before you’ve reached your financial goals.

You may believe that the time to sell is when the stock value is about to drop – and you may even be advised by your broker to do this. But this isn’t necessarily the right course of action.

Stocks go up and down all the time, depending on the economic system…and of course the economy depends on the stock exchange also. This is why it’s so difficult to determine whether you should sell your stock or not. Stocks go down, but they also tend to go back up.

You’ve to do more inquiry, and you’ve to keep up with the stability of the companies that you invest in. Changes in corporations have a profound impact on the value of the stock. For example, a new CEO may affect the value of stock. A plummet in the industry may affect a stock. Several things – all combined – affect the value of stock. But there are actually only three good reasons to sell a stock.

The first reason is having reached your financial goals. Once you’ve reached retirement, you may want to sell your stocks and set your money in securer financial vehicles, such as a savings account.

This is a common practice for those who have invested for the aim of financing their retirement. The second reason to sell a stock is if there are major changes in the business you’re investing in that cause, or will cause, the value of the stock to drop, with little or no possibility of the value rising again. Ideally, you’d sell your stock in this situation before the value begins to drop.

If the value of the stock spikes, this is the third reason you may prefer to sell. If your stock is valued at $100 per share today, but drastically rises to $200 per share next week, it’s a great time to sell – specially if the outlook is that the value will drop back down to $100 per share soon. You’d sell when the stock was worth $200 per share.

For a beginner, you definitely prefer to consult with a broker or a financial advisor before purchasing or selling stocks. They’ll work with you to help you make the right decisions to reach your financial goals.

I am going to use the definition from investopedia.com as it makes complete sense and doesn’t get too confusing (below the definition is further explanation and a current real time example, using Apple Computer).:

The PEG Ratio:
“The PEG ratio compares a stock’s price/earnings (“P/E”) ratio to its expected EPS growth rate. If the PEG ratio is equal to one, it means that the market is pricing the stock to fully reflect the stock’s EPS growth. This is “normal” in theory because, in a rational and efficient market, the P/E is supposed to reflect a stock’s future earnings growth.

If the PEG ratio is greater than one, it indicates that the stock is possibly overvalued or that the market expects future EPS growth to be greater than what is currently in the Street consensus number. Growth stocks typically have a PEG ratio greater than one because investors are willing to pay more for a stock that is expected to grow rapidly (otherwise known as “growth at any price”). It could also be that the earnings forecasts have been lowered while the stock price remains relatively stable for other reasons.

If the PEG ratio is less than one, it is a sign of a possibly undervalued stock or that the market does not expect the company to achieve the earnings growth that is reflected in the Street estimates. Value stocks usually have a PEG ratio less than one because the stock’s earnings expectations have risen and the market has not yet recognized the growth potential. On the other hand, it could also indicate that earnings expectations have fallen faster than the Street could issue new forecasts.”
- provided by www.Investopedia.com

PEG Ratio Example:
Using Apple Computer Inc., I will demonstrate how to calculate the PEG ratio without relying on other websites.

First, you will need to gather the past earnings numbers; going back at least 2 years and going forward two years. (All data is from Thursday, June 23, 2005)

AAPL:
2003: 0.09
2004: 0.36
2005: 1.31 (E)
2006: 1.52 (E)

Now we need to calculate the growth from year to year.
Subtract the earnings of 2004 by 2003 and then divide by 2003.
Repeat the process to determine the growth rate for the following years:

2004: (0.36-0.09)/0.09 x 100 = 300% growth rate

2005: (1.31-0.36)/0.36 x 100 = 264% growth rate

2006: (1.52-1.31)/1.31 x 100 = 16% growth rate

Now, take the current price (we will use the close from Thursday, June 23, 2005: $38.89) and divide it by 2004 earnings and then by the 2004 growth rate:

2004: 38.89/ 0.36 / 300 = .36 PEG Ratio
2005: 38.89/ 1.31 / 264 = .11 PEG Ratio
2006: 38.89/ 1.52 / 16 = 1.59 PEG Ratio

Using the definition from above, Investopedia states that a stock is evenly valued at a PEG ratio of 1 in a rational and efficient market. Please note that the stock market is not very rational or efficient so we only use this number as a secondary indicator and tool, after our fundamental and technical analysis is complete.

Apple’s PEG Ratio of 0.11 for 2005 was discounted into the price when these estimates first hit the street, giving us the big run-up late last year. Going forward, the stock’s earning potential looks to slow considerably and the PEG ratio clearly shows us the tremendous jump in numbers from 2005 to 2006. A PEG ratio of 1.59 for 2006 is not the best rating going forward but still under the red flag ratio of 2.00.

Finally, once you determine the PEG ratio of the stock you are looking to buy, take the time to calculate the PEG ratio for the “sister stocks” in the industry group to see if they have higher or lower PEG ratios. Keep in mind, PEG ratios don’t work for companies with negative or non-existent earnings numbers.

By Chris Perruna

Chris Perruna – http://www.marketstockwatch.com

Chris is the founder and president of MarketStockWatch.com, an internet community that teaches you how to invest your money with solid rules. We don’t stop at just showing you our daily and weekly screens, we teach you how to make you own screens through education. Through our philosophy, you will be able to create your own methods and styles to become successful.

There is more to future charts than just patterns on the wall. They can be a crucial aspect in a company’s success. Through these charts, investors can predict the future outcome and trends on the market.

Make sure you are aware of the terms used to describe the graphs to be able to make full use of them.

The first question many would ask is on what a price chart basically is. It is, in fact a lineage of prices that you plot against time intervals. It can therefore be called a time series plot as well.

When we are talking about futures commodity graphs, the y axis would represent price changes and the x axis would represent the time intervals on which the changes are noted.

Analysts use such charts to track the changes or stability of their stocks, and investors use them to predict the future trends in the market. They prove as vital tools to the traders looking to invest in shares that are on their way up, and that is why many a time you will see traders hiring analysts.

The 4 different kinds of charts in use in the trading industry are:

a. Line Charts,
b. Bar Charts,
c. Candle Stick Charts
d. Point and Figure Charts.

1. Line Charts – The line graphs are generally the simplest to make, and to interpret as well. They are made by connecting price points of the shares over a time periods on the other axis as mentioned earlier. The price points are normally selected from closing prices of the stock. Investors tend to prioritize the closing price, since it gives uniformity to the analysis and does not allow fluctuations to affect their judgment.

2. Bar Charts – They are a series of high and low lines that are used to depict the rise and fall in stock prices. They are the easiest to read, and they are color coded, making them very effective as well.

3. Candlestick Chart – This was first used in Japan by a successful silk trader hundreds of years ago. It can be made on a daily basis, or using intraday prices or even a weekly basis, long term.

4. Point And Figure Chart – This is one that is purely price based, and not time based. Although the x axis is present, it is not given importance as in other graphs.

Every kind of graph you may use has its own pros and cons, and there is a lot of variety to choose from as well. So don’t try to achieve your result from the same kind of graph, move on to others to save time. Make sure you have at least three or four versions of graphs at your disposal.

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The population in developing countries will continue to grow. This will help balance on consumer spending during the decline of the peak consumption in the late 2015 to 2025 from most of the industrialized and wealthiest countries in the world. Most of the consumption will shift to the developing countries such as India, but Africa will still be in crisis.

Real wages per capita will continue to rise while profits will tend to decline. This marks the turn of lower wages for employees, to the expense of profits overall. Business will now be depending highly on their skilled labor, as replacement for retiring workers will be coming in through immigration from outside sources, which are more educated and experienced with new technologies.

Some sampling reflects those who do plan to retire do not have any savings at this time. Most Social Security benefits will not supplement sufficiently to cover the rising cost of living during retirement over the next 15 to 20 years. Most Gen X’ers will not be able to compete against the more experienced and skilled baby boomers.

Baby boomers looking at retirement do have some options. They can liquidate their homes in favor of smaller homes or apartment living. Cut down on travel and other expenses. I don’t believe that after working 35 to 40 years that this option will be what one would want, but that is an option. Financial planning will also be helpful, yet with the retirement draw down by 2015 the returns may not be enough, and other supplemental actions will have to be taken in order to build a stable future income.

Real estate in 2015 will also receive more declines being that there will be less of a demand. Health care such as retirement communities will see some increase but not as much because cost for this special retirement housing and care, will also rise. Less consumer spending will lesson demand and supplies will be handled on order to fill basis.

Technology will take up the slack on the fill to order, in that machines will be set up to manufacture other machines. Let us say you order a computer, when the order is taken then it is merely inputted into a machine which will build it on site and process to shipping.

What this also means is that one will truly experience and enjoy the Golden Information Age. That rapid telecommunications, less manual labor, and more focused specialized areas will develop, giving everyone more of the good life, but it will come at the cost of your labor.

This pretty much changes everything. Should you want to still retire in your sixties, you will need to have a plan in place that will more than support you for at least another 20 years after retirement. This will most likely come as a shock to some but not to those who have looked forward into the future with realistic expectations.

Cost of living may level a bit, but will continue to rise. So if you are living at a cost of 40K now expect to spend 60k when you retire to just keep up with your current lifestyle.
There maybe arguments generated by “financial planners” but most of them are not seeing past today’s statistics.

Just remember, the draw down from retirement plans will affect your returns, over the next eight years. The way to figure what you need to retire is simple. Take your current income plus your expenses and add 20%. If you have a lifestyle of 40K per year and your living expenses are 15K add them together (40K+15K) should be about 55K then multiply that by 20% (55K*.20) 55K + 11K = 66K is what you need to continue your current lifestyle over the next 10 to 20 years.

Life expectancy rate for men in the US is currently at 74.4 and for women in the US it is 79.8. (Measures from 2003) In either case the raise in retirement age is not for enjoyment of going into your golden years where you can do what you want. You will either be restricted in movement by economics or health. Health technologies will extend life expectancy over the next 5-10 years to as much as 15 more years on top of that. Which means that you most likely be broke before you expire.

Now is a good time to start looking at other sources of income that will more than supplement social security. Remember, that congress is also looking at cutting off your social security benefits if your pension or 401k yields more than 70K a year. Your retirement lifestyle is at risk.

The good news is that the internet which has a global reach; will also experience a boom over the next few years, taking those who have already established businesses into a whole new vista of possibilities the likes which no one has seen before. This is the scope of the future, those off the information highway, will suffer due to their own ignorance, and not because this information is not available.

Should anyone doubt these trends, you can research them through many agencies, such as Labor Statistics, Censes Bureaus and recent breakthroughs in Stem Cell research.

Life is expensive. There is another way to live, that doesn’t cost as much, but it isn’t any good.

Part 1 was featured yesterday.

About the Author

John Tebar Life Coach, Business Consultant, Entrepreneur, Author. Free weekly newsletter at http://holisticlifeplanningandresearch.com

There are many factors at this time that point to the fact that the idea of retirement will be coming to a close. One of the primary factors is mainly demographic in nature. Though the US still has replacement population above the current workforce, Europe and Japan are already seeing there replacement workforce dipping below those who would seek retirement in the next few years. This will put a strain on their productivity and lower demands for consumer spending that has not been seen for over 600 years.

Eighty million baby boomers here in the US will be drawing down their pensions, retirement savings and passive investments over the next eight years, which will push the stock market into a longer term bearish trend. The US economy will be strained by this, Japan and European economies will take a severe beating.

What this means is that in order to offset most of the draw downs from retirement earnings and withdrawals on the social security system plus other governmental welfare supplemental transfers, they must raise the payment of full benefits of retirement to the age of 75.

Over the next 2-5 years there will be a continued flattening of most major corporations. Though we have seen the corporate flow of downsizing and rightsizing; that is not by any means over. The technology explosion will be showing up with major advancements in information and communications. This will lesson the need for middle managers and redundant workers. There will be ample jobs for redundant workers, as they will be absorbed by new business start ups. Middle managers however will have to be retrained with specialized skills in order to keep pace with the technology boom that will be unleashed over the next 2 years. There will be a need for managers to develop people skills in working with employees under their charge. The benefits of using more complex customized programming such as SAP will outweigh the cost of doing so.

The advancement of technology will be in the areas of computers, telecommunications, and the internet. Moore’s law will keep working in the advent of the advancement of computers that will most likely be 5 times more powerful than what we have in the commercial market today. Along with that robotics that will start to replace more of the manual industrial jobs.

By 2025 most auto industries will be sent to the orient mainly China. The reason is with the projected demographics and its impact to the economy, the decline of average consumer spending, it would not be cost effective to build and sell automobiles here in the US, Europe or Japan.

Health industries will be getting more attention, for the aging population that will be working longer. Advancements in Gene therapies and stem cell research will also be giving these workers a better quality of life but at a price none the less. This will also boost positions in the health field inclusive of fitness, such as Personal Trainers and Aerobic Instructors.

Specialists in any field at this time will then be the one’s to write their own ticket especially those involved in Computer Programming, Network Administration and Information Technologies.

Most management activities will lean toward decision models and knowledge management systems. This will create major middle management unemployment, in an economy that will have over 10 million jobs available for the right people with specialized skills. Most corporations will attempt to keep their best workers paying more and be willing to retrain them, than letting them go to retirement.

By 2009 the peak spending of most baby boomers will occur and along with that robotics or artificial intelligence will start to pick up the pace in replacing the factory workers on their manual labor. There will be a great economic boom during 2009. The NASDAQ will see incredible growth from 2010 to 2015 and should hit 6500. For those in retirement or going into retirement they should be watchful for good investment in the technologies industry during this period.

Part 2 will be featured tomorrow.

About the Author

John Tebar Life Coach, Business Consultant, Entrepreneur, Author. Free weekly newsletter at http://holisticlifeplanningandresearch.com

The old man’s counsel was simple and direct: “Sell,” he said. “Sell back to the sleeping point.”

Although there is no doubt that this advice smacks of imprecision, there is a good bit of wisdom in it. We may fairly assume that neither the young man nor his adviser knew for sure which way the market was going, but both were aware that the market was sufficiently shaky to cause legitimate worry. Translated into somewhat more orthodox investment terms, the advice meant: “Sell enough of your stocks so that a market collapse won’t destroy you, but keep enough so that if your fears turn out to be groundless, and the market rises, you’ll still profit to some extent; in the meantime, get some sleep.”

At first glance, it may seem cynical on the old man’s part not to outline for his protege an exact and detailed course of action. But he could not honestly guarantee that he knew exactly what action might turn out to be best. Furthermore, the young man didn’t want someone to tell him precisely what to do. All he wanted was some help in easing the pressure at a critical point, and the help he got seems eminently sensible.

In a real sense, the investment formulas are designed to help you in the same way that the old man’s advice helped his young friend – they inject an element of caution in your investing when caution seems advisable, they reduce the provision for caution when risks seem relatively low, and permit you to benefit from rising prices for common stocks. Moreover, once you incorporate a formula into your investment program, it works more or less automatically, thus allowing you to sleep nights in the knowledge that you are continuously hedging against various possibilities.

But just as the investment sage left it up to the young man to decide exactly what the “sleeping point” might be in his particular case, you can select a formula appropriate to your own temperament, financial circumstances and proclivity to insomnia. As will be made clear in later pages of this book, any of the formulas can be adjusted to suit the needs and preferences of any investor.

Although formulas are designed to give unhedged and unambiguous indications for action, the investor should not feel that he is therefore giving up all personal control over his investments when he adopts a formula, since he selects it himself to fit his own requirements. A formula does not try to tell you what to do – it merely helps you do what you are already doing more profitably.

For example, formulas cannot tell you which stocks to buy. This book assumes that anyone interested in formulas is already a relatively sophisticated investor and knows what kind of stocks he wants to buy, how to select them and where to go for advice in his particular areas of interest. But – by supplementing his knowledge of which securities with considerations of the equally important questions of when to own them and in what quantity – formulas can supply a valuable added dimension to his investment results and help put the management of his portfolio on a more professional level.

Author Description

Who Else Wants To Learn A Simple, Step-By-Step System For Generating Quick & Easy Profits, Trading Forex? – FREE FOR A LIMITED TIME – http://www.forextradingstrategies.org

You might be able to find some out-of-date stock research information at your local library, but up-to-date, real-time research data was something that cost thousands of dollars.

This was the paradigm on Wall Street for decades, but then came the internet. Not only did the web provide discounted commissions through online brokers, but also a plethora of informative stock research.

While reading books on the market, watching CNBC, and following the business press are all vital elements of any new investor’s education, the most important thing to do before buying your first stock is research it thoroughly.

Thanks to the internet, research has never been easier to come by, or less expensive to access. In fact, most stock research is completely free of charge!

Stock Research – What To Look For

There are two basic elements of research – fundamental and technical.

Fundamental stock research involves examining a company’s published financial documents. These include the income statement, the balance sheet, and the statement of cash flows.

Several web sites make this data available free of charge. Most have all three financial statements dating back three to five years for literally thousands of publicly traded companies. The best sites for fundamental research are Yahoo! Finance and MSN Money.

Technical stock research examines the price movements of the stock. Most technical analysis involves studying patterns in the charts of a stock’s daily pricings. This form of research has certainly been made easier by modern technology, as in the past, technical analysts used to plot charts by hand.

Now you can find great charts for stock research on Yahoo! Finance, and Smartmoney.com. If you’re willing to pay for your technical research, consider investors.com, which has a great service called Daily Graphs.

Other Sources of Stock Research – Newspapers and Magazines

SmartMoney is probably the best monthly magazine for research purposes. They frequently profile stocks and mutual funds in easy to understand terminology, and therefore, it’s great for the novice investor.

Forbes is another great magazine for stock research. It is published bi-weekly, with about 1/3 of its pages devoted to the stock market. The politically sensitive should be forewarned, however, that Forbes has a very pronounced conservative bent. If you like your journalism free of partisanship, consider Fortune, which is also published every other week.

The Wall Street Journal is a daily newspaper, and probably the most famous source of research. It can be purchased on most newsstands for only $1.00 an issue, and it normally has promotions running that allow you to subscribe for much less than that. Despite the paper’s New York City headquarters, daily delivery is available in all but the most remote U.S. locations.

But in all honesty, The Wall Street Journal pales in comparison to Investor’s Business Daily (IBD), which is almost uniformly recognized as the best source of stock research for serious investors.

Although the paper’s editorial pages are aggressively Republican, its reporting is geared towards the individual investor – whereas The Wall Street Journal’s target audience is business executives.

Best of all, IBD publishes a special Monday edition (actually released on Saturday) that features detailed charts of its top 100 rated stocks.

Subscription Web Sites – Morningstar.com

As far as subscription web sites go, MorningStar (morningstar.com) is probably the most respected of all. It offers detailed research reports on over 1000 companies, in a simple, concise format.

Although MorningStar is best known for its mutual funds research, it is also a great source for research information. However, at $13.95 per month, it is a bit pricey – you could subscribe to SmartMoney magazine for an entire year at that price.

The good news is that there are a bevy of sources from which you can get your stock research. The bad news is that there might be a little too much of it. Whenever conducting research, be sure to consult at least two sources.

There are a lot of opinions out there, and in cyberspace especially, some investment opinions aren’t worth the paper that they’re not printed on.

Author Description

William Smith lives in Florida with his wife and three cats. William writes frequently on many subjects that may be of interest to all. Discover all the joys and secrets of backgammon at Backgammon Board Game