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- US Markets Slide Amidst Global Gloom - 12 August 2010
- FINRA – Protecting and Educating Investors - 17 June 2010
- Global Reporting Initiative - 12 February 2010
- The Practice of Greenwashing - 2 November 2009
- SEC Form 10-K: A Mine of Valuable Information - 22 October 2009
- Fallen Angels of the Stock Market - 20 July 2009
- Credit Rating Agencies - 10 July 2009
- Stock Market Volatility Sparks Interest In Investment Principles - 5 March 2009
- Hedge Funds Take Strain In Volatile Market - 28 October 2008
- Markets Remain Volatile as World Leaders Seek Solutions to Global Financial Crisis - 24 October 2008
- Could the Liquidity Theory Work for You? - 23 June 2008
- Mixed Reaction to RBS Stock Market Alert - 20 June 2008
- Differentiating between Cyclical and Non-cyclical Stocks - 5 June 2008
- The Real Math of Falling Stock Prices - 16 may 2008
- Does Marketing Myopia Cloud Your Stock Trade? - 31 March 2008
- What Do Women Want from the Stock Market? - 3 March 2008
- Stock Investment Tutorial from Sub-Prime Gainers (Part 1) - 8 February 2008
- Stock Investment Tutorial from Sub-Prime Gainers (Part 2) - 8 February 2008
- A Stock That Looks Inside Young Minds (Part 1) - 5 February 2008
Stock market investing is surely not for the faint-hearted, especially in these times where every new day seems to bring a new, and often unprecedented, challenge. Following the announcement by the U.S. Federal Reserve that it would begin buying government bonds in an effort to stimulate the persistently sluggish economy, stocks and interest rates plummeted on Wednesday, reflecting the trepidation of investors with regard to economic recovery. Other factors that impacted negatively on markets included the news from the U.S. Commerce Department that, primarily due to the fall in exports, the trade deficit for June widened to reach its highest level in 20 months. It follows that a decline in exports will lead to a slow-down in U.S. manufacturing, which is particularly disappointing, given that the manufacturing sector had shown the most promising signs of recovery earlier this year.
FINRA – Financial Industry Regulatory Authority, Inc. – is contracted by brokerage firms and trading markets to perform the function of market regulation in the United States, with the aim of maintaining market integrity and protecting investors by means of efficient regulation, ensuring compliance and technology-based services. It is a common misconception that FINRA is a government entity, when in fact it is a private corporation. It is the largest independent regulator for all securities conducting business in the US, with close to 4,700 brokerage firms, approximately 167,000 branch offices and roughly 635,000 registered securities representatives under its wing. Major exchanges contracting FINRA to oversee market regulation include the American Stock Exchange, the NASDAQ Stock Market, the Chicago Climate Exchange and the International Securities Exchange.
With concepts such environmental sustainability, carbon footprints and social responsibility becoming part of everyday business vocabulary, the Global Reporting Initiative (GRI) is serving an increasingly important role as it strives to "create conditions for the transparent and reliable exchange of sustainability information through the development and continuous improvement of the GRI Sustainability Reporting Framework" – as stated in its Mission Statement. So what is the GRI?
With the threat of global warming, increasing awareness of both individual and corporate carbon footprints, and a general trend toward saving the environment, going "green" is seen by many as being socially responsible and is becoming part of marketing strategies around the world. Environmentally conscious investors may even, to some extent, choose green companies over others when making investment choices. So, with the general trend toward all things green, the term "greenwashing", which was coined by American environmentalist Jay Westerveld back in 1986, has taken on greater significance. Greenwashing is a combination of the words "green" and "whitewashing" – a term which has long been used to describe trying to make something bad look good, but it remains fundamentally bad. And so the term greenwashing has come to be applied to the practice of spending more time and money advertising that a company or product is green, than actually implementing environmentally sound practices.
In the current economic climate, stock market investors need all the help they can get in making sound investment decisions. An invaluable decision making aid is the Form 10-K that public companies must submit to the Securities and Exchange Commission (SEC) within 60 days of the end of the fiscal year. This document, which can run into more than 100 pages, provides a comprehensive summary of a company's performance during the past fiscal year. While companies are obliged to make their Form 10-Ks available to the public, the annual report issued to shareholders as standard practice seldom contains as much detail as the 10-K, making this official document much sought after by investors wanting to gain meaningful insight into a specific company's worth as an investment.
While there may be some dissension in the world of finance with regard to the meaning of the term "fallen angels", in general it refers to stocks that were once highly sought after and, due to any number of reasons, have fallen from grace with investors. The recent spate of companies that have had their credit ratings downgraded to below investment grade or "junk" status are considered to be fallen angels.
With the global financial crisis reaching into everyone’s pockets, the average man in the street is beginning to take more of an interest in what makes the economy of a country work. And with headlines such as "Wall Street Tumbles", "Stocks Rally for Third Day In A Row" and "Stock Market Indexes On Brink Of Twelve Year Low" drawing attention to the stock market and the important role it plays in keeping the economy ticking over, Joe Citizen is starting to take more than just a passing interest in a field that he may have avoided in the past.
A report by the Bank of England on Tuesday noted that bank credit risks have been reduced and money market pressures have eased off following the recent financial sector bailouts across the United States and Europe. However, the report added that risks in the broader financial system remain, with hedge funds being particularly vulnerable in the current global financial crisis. An increase in redemption requests has put hedge funds under additional funding pressures, resulting in the third quarter of 2008 being one of the worst recorded by hedge funds.
Many investors, brokers, analysts and others who make a living from the U.S. stock markets have all but given up trying to understand why markets are remaining as volatile as they are and have resigned themselves to expect the unexpected as each new trading day dawns. While the reasons behind the current global financial crisis are no doubt many and varied, it would seem that fear is one of the key factors behind the ups-and-downs of the market, and the problem with fear is that it is by nature irrational.
The liquidity theory asserts that the stock market is no different from any other market in that it is all a matter of supply and demand. The liquidity theory claims that stock prices are determined by the number of shares in the stock market, together with the amount of money available to buy them, irrespective of what their fundamental value may be. Stock market liquidity trends are analyzed and the information is utilized to predict in which direction the market is headed.
The Royal Bank of Scotland (RBS) has sounded a warning to clients to be prepared for a crash in stock and credit markets on a global scale over the next three months. The negative impact of rampant global inflation on the major central banks is seen as the chief contributing factor to this gloomy outlook.
Although it is true that investors have no control over the cycles of a country’s economy, they are able to adjust their investing practices to cope successfully with the economy’s highs and lows. Having a well-balanced investment portfolio is dependent on an understanding of how industries are influenced by the economy before making stock market investments. For this reason it is important for investors to know the fundamental differences between cyclical and non-cyclical stock companies.
Downsides must have upsides. Take heart and enjoy the rule of bears. Stock market sentiment can work against you. Losses await those who flow with the investment tides. That is why salmon is precious. It fights adversity to thrive. You can do the same with stock price trends.
Have surveys of consumer confidence made your stock vision hazy? Do you worry that all corporations in which you own stocks are about to go bust? Are you vulnerable to prophets of doom? Try this dose of investment mood enhancers from the marketing medics:
Personal preferences will color most answers to this question. There is no requirement that every female must have exactly the same investment objectives. May such individuality rule the stock market! The only matter on which we can all agree is that Bernanke should hit the interest rate reduction button as often as possible.
Do not despair that only the rich, powerful, and connected have made windfalls from sub-prime, for the foresight for successful financial planning can be yours as well! Celebrity stock investors of Manhattan employ former Chair People of the US Federal Reserve, while their iconic financial institution neighbors appoint a former British Prime Minister to their Boards, but you can use business management fundamentals to achieve the same financial planning ends. There is never a guarantee that your earnings will match the fairy tale riches of former regulators, ambassadors, and politicians, but the downsides of losses-material and of face-are proportionately lower as well. We can all learn from the calculated moves of sophisticated and successful stock investors, and improve our own financial planning as a specific result. We are pleased to start this new series-participative as always- on how to profit from gross errors of financial governance.
Stock Investment Tutorial from Sub-Prime Gainers (Part 1)
Which is the Next Stock Market Bubble?
There are indications that individuals who have benefited from the sub-prime woes of 2007 are now focused on automobile loans and credit card debts for 2008. Some stock investors look forward to construction projects in territories liberated from their former rulers by US military forces, while others hope that the 30-year hiatus in new projects for US nuclear power plant manufacturers will soon be broken by India.
Since every generation is so different from its predecessor, we witness entirely new enterprise models on the stock market from time to time. Some veteran investor groups heap scorn on stocks representing values entirely different from their own, but there is undeniable stock investment merit in spotting dramatic new social trends. We are pleased to start a new series with this piece, looking for outstanding new stocks that represent tomorrow’s market opportunities. As always, we hope that this will stimulate dialog, and would love to interact with you on all stock investment, personal finance, and business management issues.
- Video: FAO's Abbassian Says Food Price Increases Not a `Crisis'
- Monday 6 September 2010, 2:37 pm - Video: BNY's Derrick Says Dollar `Won't End Up As Safe Haven'
- Monday 6 September 2010, 2:05 pm - Video: CER's Brady Says `Don't Underestimate' Will to Back Euro
- Monday 6 September 2010, 11:53 am - Video: Fink Says Japan's Leadership Changes 'Preventing' Reform
- Monday 6 September 2010, 11:30 am - Video: ANZ's Roberts Sees Wheat Price Increasing Until Year End
- Monday 6 September 2010, 11:03 am - Video: Gijsels Recommends Investors Hold `Above Average' Cash
- Monday 6 September 2010, 10:54 am
- GM Drop in Sales May Deter IPO Investors
- Thursday 2 September 2010 - Features - HP, Dell Lock Horns Over 3PAR
- Monday 30 August 2010 - Features - Market Makers
- Thursday 26 August 2010 - Markets - Investigation Into Flash-Crash Continues
- Monday 23 August 2010 - News - GM Moves Ahead With IPO Plans
- Thursday 19 August 2010 - News - US Small-Caps Take Strain in Current Economy
- Monday 16 August 2010 - News

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Suraj Anand: Thank you for a very good explanation of this term. ...
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