Stock Investing 101.2: Opening an Account
In my first post on stock investing I discussed the definition of stock, how it is owned and how it is traded. In order to own and trade stock you must have a stockbroker. This entry, the second in a series of investor education, will discuss opening a brokerage account. To refresh on brokers, here is an excerpt from my previous entry: “Stocks are purchased through a broker. The broker acts a middleman between the stockholder and the rest of the market. With today’s technology the concept of a “stockbroker” is changing from a...
read moreWhy Investors Have No Love for Ron Paul
Investors tend to be an optimistic lot. They follow politics more than the average person, but for the most part keep their noses on the ground for wealth-generating opportunities. They understand presidents come and go, congresses fluctuate between mildly productive and dysfunctional, and the economy cycles up and down, but investors march on knowing that capitalism and free enterprise will continue to create opportunities. Politicians can slow or dent this system, but investors know the system is greater than any one man. One leader...
read moreAdvantages and Disadvantages of a Gold Standard
Advantages Long-term price stability has been described as the great virtue of the gold standard. The gold standard limits the power of governments to inflate prices through excessive issuance of paper currency. Under the gold standard, high levels of inflation are rare, and hyperinflation is nearly impossible as the money supply can only grow at the rate that the gold supply increases. Economy-wide price increases caused by ever-increasing amounts of currency chasing a constant supply of goods are rare, as gold supply for monetary...
read moreStock Investing 101.1: What is “Stock?”
Stock Investing 101: What is “Stock?” No one is born knowing how to invest in stocks. Even those born owning stocks (as some lucky kids are) still need to know how to manage them. Many people talk to me about stocks and investing, but when I press further many of them know almost nothing about investing basics. According to recent Gallup polls stock ownership in the U.S. is between 54% and 63%. This misleading study gives the appearance that half the nation invests in stocks. The truth is that most stock ownership is largely...
read moreAcquisitions as Confirmation of Value
Receiving positive confirmation is always nice, especially when it involves thousands of dollars of your own money. Value investors receive confirmation of their stock valuations as their purchases reach target price and are sold off. Another easy way to receive confirmation of your valuation is when another company moves to acquire your current holding at or close to your own target price. As everyday investors we try to understand what we invest in, but we do not know the intricacies of industries in which we have never been...
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