By Jonathan Langley

At the time of this article, Day Trading Robot is easily the best stock picking software available on the market today for these following reasons.

Day Trading Robot is the stock picking love child of an expert programmer as well as an expert and winning trader, James Holt, it being based in part on 23 of his winning trading strategies. It constantly analyzes real time market data around the clock using mathematical algorithms and notes which pricing patterns lead to large upswings in the market to add it to its trading "repertoire", consequently making this program is more advanced and capable with each day. It also focuses on smaller, lower risk/reward trades so that you can get in and out safely to see small gains over and over again as they build up.

Once Day Trading Robot notices a stock in the market begin to exhibit similar patterns to successful trend producing stocks in the past, it investigates it further to decide whether or not it will act in the same way and should therefore be deemed a sound trade.

In placing Day Trading Robot's weekly trades, I have experienced a very agreeable winning rate of 80%. Note that Day Trading Robot doesn't win every single trade, but it does win most and the gains which you get from these far outweigh any losses which you might experience.

Because all of the real work is done for you of painstakingly researching the market around the clock, all you've got to do is enact the trades. Because of this you don't need any real market experience beyond being able to enact simple trades by logging into an online trading account. Just from blindly placing every recommended trade, I've since experienced that very profitable winning rate of 80% as a result.

I wholly suggest that you don't take my word on this if you're still understandably skeptical about this system's ability to help you achieve your financial independence. As I briefly touched on, Day Trading Robot comes with an iron clad, 60 day full money back guarantee which convinced me to try it in the first place, as well. You don't even have to risk any money to test it as you can simply follow the recommended picks along in their progress in the market to gauge their performance, making the entire transaction risk free.

Try this best stock picking software risk free for 60 days, you won't regret it.

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Choosing the best stock broker can be a chore if you are not aware of what you need to be aware of. This choice really depends on the type of investment you plan to participate in. A broker is a person who can buy and sell stock on the stock exchange and usually is employed by a brokerage firm. If you are thinking of your need for a broker then the simple answer is yes if you plan to engage in buying and selling stocks on the stock exchange. This article will focus on finding the best stock broker for your needs.

To get their license all stock brokers are required to take and pass two tests. Most who have taken the tests will agree that they are pretty difficult to pass. In fact most brokers usually have some exposure to finance or business. Most brokers have at least a bachelors degree with many also having advanced degrees.

Since many people tend to confuse the roles and responsibilities of a stock market analyst and a stock broker I will define them here. A stock market analyst's role is to analyze the stock market and based on that data come up with a prediction of what it won't or will do in a given time frame. A stock broker's role is simply to buy or sell stocks based solely on your instructions.

You should also be aware that in most cases brokers earn their income on commissions from your stock transactions. This commission is generated whenever you participate in a stock buy or sell through your broker. Your broker will typically get a percentage of this fee as well. However, it should be noted that in a lot of cases the broker will charge a flat fee.

Keep in mind that there are more then one type of broker you can interact with. There are two general categories that exist:Full service brokers and discount brokers. The difference is usually in the amount of service you receive and the commission you pay. The Full service brokers will usually have a much larger set of services that they can do for you, in some cases offer investment advice and is usually paid in commissions.

On the other hand you have the discount broker. For the most part they do not offer investment advice or market research. They typically just execute the trades that you have asked for and that's it.

Given this knowledge then the biggest decision you will make when it comes down to choosing the best stock broker is deciding if it will be a discount or full- service one.

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It can be tempting to get into stocks that are offering high dividends. In fact for an investor the dividends can make up a huge amount of your total profit from that investment.

But there are a few things you are going to want to consider looking at if you are investing for the dividends.

1. Find out how much you are willing to take.

You should have a minimum amount you are willing to accept from your dividends. For example, if you only want to look for returns with a dividend of 7% annually or higher don't look at companies that are only offering a dividend of 3% annually. Remember the higher you ask for the harder it will be for you to find it.

2. Find stocks with dividends

After you find out how much you are willing to take you should go find stocks with a good dividend yield. Only invest in stocks or ETFs with a strong return.

3. Find stable companies

Obviously getting a 10% annual dividend isn't going to help you if the stock's price falls 80%. You are going to want to search out for strong companies with strong growth before you ever invest in it. When you buy for the dividends you buy for the long term so buy something that will be around for a while.
Stocks that are hot right now normally do not make a good return for an income investor because they can fall and fall hard.

4. Preferably growth

There is more ways to profit from a stock then its dividend. It would be nice to buy a strong undervalued company with a strong future and strong dividends. I believe it is very important to look for strength; dividends are not enough to make you profitable on a trade. The company has to be worth investing in even if it didn't pay dividends.

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Are you ready to invest in the stock market? When do you know it's time to start and how do you know your ready? Is it really a good idea to put all that money in the market? Are you worried?

So what will happen if you wait until you are ready or until you think you feel ready? You may never start investing your money. If you continue to live without investing for your future, you sacrifice your financial stability.

Investing in the stock market is about when you feel you are ready to start investing. Once you have learned whatever you can about investing, you just have to do it. Think about your future security.

The first most important thing to do when thinking about investing in the stock market is to learn everything you can about it. Don't start investing any kind of money until you know what you're doing. You could lose it all.

You might not be interested in taking all this time and effort to learn about stocks and investing. A lot of people aren't. Luckily, you have another option instead of taking all this time and effort.

There is a way to invest in stocks and still save a lot of time in effort. Normally if you are investing directly in stocks, you have to learn about what you're doing and continue researching. If instead you invest in mutual funds, you can forgo this.

That is why mutual funds are great. If you aren't up to learning all about stocks and doing stock research, you don't have to with mutual funds. You can leave all the learning and research to the fund manager.

Are you going to learn all you can about investing in the stock market and do your research week after week or are you going to invest in mutual funds and let the professionals take care of you? Don't worry, either way you are investing and building up your wealth.

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There are many different secrets that one can use to help them make better investment choices and therefore get a much better return the average. Perhaps none is more important than the secret of developing a mindset that allows you to see opportunities where others do not. This of course is when you will see the greatest returns.

Most people wait until an investment has already shown itself to be in an uptrend for a while before they are willing to put there money in. The problem with that is that the trend may soon be broken when it has already come that far. Most people lose money because they do the exact opposite of what you are supposed to do.

What are you supposed to do?

Everyone has heard the cliche of buy low and sell high. Yet, probably 90 percent of people do the exact opposite. Why is this?

For one, they may lack the confidence in themselves to spot an opportunity until they receive approval by watching other people get on board. This however is usually when an investment makes its biggest upward movement. I'll give you an example:

Stock A drops from 1.80 to 1.25 in one day. This is a great opportunity as it is still a good company, but there is widespread market panic. By the end of the day it rebounds to close at 1.50. Now, the best opportunity would have been to have gotten in around 1.25. Most people won't though.

Most people will wait until the next day when the opening price has jumped back to 1.80 and they have already missed out on a 40 percent plus 24 hour return.

You have to control your emotions and spot opportunities. The difference in your returns can be astounding!

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There are many very important points to remember when entering the lifestyle of the short selling ways. If you do not pay attention to what some of the basic rules to investing in either direction are, you may end up finding yourself in a world of hurt.

There are going to be those who would love to take all of the money that is in your pocketbook, and there are going to be those who want to teach you how to succeed in your personal investing strategies. This even refers to those traders out there who enjoy trading via pennystocks.
One piece of advice that can be given is that when you see the sideways action taking place in the stocks chart that you are watching, just wait for the crack to appear in that sideways action to start downtrending. This will be one of the indicators that you should most likely get ready to short sell that stock.

It is a fact that 90 percent of traders lose money in this investing industry. If your not careful, you will be swallowed up whole by some of the richest and smartest hedge funds in the world. This should be approached with great care and diligence. The one solid way to come up with your own strategy is by learning from someone that you connect with and that is very transparent for all to see.

There are many different forms of material that you can purchase online from other traders that have been doing this trading thing for quite some time. It is always best to learn from somebody else and the mistakes that they made trading, even in the pennystocking world.

You are expected to make a few mistakes while getting to know the way that things work in the investing world. If you do make a lot of money, do not let that go to your head too fast or at all. If you then start making trades based on what your ego wants you to do, you will lose all of that money you may have made in a real hurry.

There really is not one right style or strategy when trading pennystocks with your hard earned money goes, you need to pick one over time that you discover works for you very well. Since everyone is different from one another, we all will have our different ways of trading.

If you aim for home run style strategies, you will most likely find yourself striking out. You should aim for 10-20 percent gains within a few days or hours. Stick to stocks that are in play, don’t play random stocks with good stories you hear from friends, message boards, gurus, etc. Let the market tell you what’s hot, the market never lies, humans do.

Nobody knows exactly where stocks will end up on any given day, month or year except for the true market manipulators who you probably don’t know. If you did know them, be scared because they’re probably pretty powerful and they don’t like people with big mouths.

The stock market is basically one big casino. You should trust nobody, everybody’s out to get your money, even if you don’t realize it….especially when you don’t realize it. I mean, don’t even trust friends and family, it’s ugly, it’s a battlefield, it’s a battlefield casino.

In charts I trust. Those who ignore technical analysis might do fine over the long-term, or not. But in the short term, the best guide is technical analysis, for trading purposes at least. It is very important that you study what you are about to do for yourself and know what you have seen with your own eyes, you must look out for yourself.

Penny Stocks are the simplest most derided market niche of all, that’s why I love them to pieces. The people who play down here in the gutter are manipulator, sharks and suckers….there’s plenty of room for someone like you or me, who’s not the smartest or richest person out there, but one who is willing to research and do the hard work necessary to figure out the truth behind each penny stocks.

The key is finding setups where you have an edge. I don’t mean insider trading edge, I mean where you think you’re in a stock where the news type setup is so good and exciting, you know once other people hear about it over the next few days or weeks, they’ll get excited too. Then it’s a self-fulfilling prophecy, possibly and you’ll learn how to surf a wave of profits from others piggybanking the story.

By: Terry Detty

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You don't have to be rich to follow the ups and downs of the stock market, but -- and I can only guess -- it helps. I feel confident in making this assessment despite the dreary fact that I am not personally wealthy (This could be construed as an understatement.)

While it can't hurt to have some foundation in business finance, you might find it's a lot easier to get a handle on the markets now than ever before -- thanks to the information explosion of recent decades.

If you're interested, you can get up-to-date information (aside from formal education and text books) through business magazines and newspapers, and from seminars offered by brokerage firms, banks and other financial institutions.

And, if you can pull yourself away from Oprah, Donohue, Sally, et al (what I refer to as "the afternoon sleaze shows,") you may find it interesting to tune in to one of Cable TV's more worthwhile offerings: CNBC. The station provides an all-day diet of business news, interviews, special reports and analysis, along with up-to-the-minute Big Board and NASDAQ stock quotations.

If you'd lke an intellectual challenge -- or a financial challenge if you have dollars to invest -- you might want to take a little time to follow the fortunes, and misfortunes, of the Fortune 500. You just might find them fascinating, as I have.

Novice stock watchers, unless I miss my guess, tend to begin by following the ups and downs of one or more individual stocks. It doesn't take long to find out that the market's gyrations are a bit more complex than one might have thought on first impression.

While watching the market, always keep in mind that investors buy stocks for one overriding purpose: to make money!

Individual stocks do not always behave the way one might expect. They often shoot up when you expect them to go down and, conversely, tumble when you expect them to go up. But never fear, professional stock watchers will always have a scenario ready to explain any inexplicable moves.

Perhaps the most perplexing circumstance: A company reports dramatically improved earnings, but the stock takes a nosedive. You're left shaking your head, wondering: Isn't earnings what it's all about?

It ain't necessarily so.

Faceless analysts appear out of nowhere, it seems, to explain. Despite skyrocketing earnings, prospects for continued lofty results are not so great.

Or, perhaps, outside forces are coming into play: "Market conditions" are putting a curb on growth, interest rates are trending higher, the dollar is weak (or strong), tax increases are expected, the deficit is out of control, international competition is hurting longterm prospects for profits.

Or, maybe it's just something somebody said. Alan Greenspan, for instance, or, maybe, Lloyd Bentsen.

It's fun to try to figure out what the market's doing; and it can be profitable for anyone with a few dollars -- and a yen for risk.

The best advice is offered free by one brokerage house in its TV commercials: Buy low, (and, by inference,) sell high.

Good luck!

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Many new traders very often mistakenly associate investing with trading while both have very little in common. Other than buying, selling and order execution, investing and trading could not be further apart. New traders that are experienced in long term investment strategies are very often taken aback and shocked once they enter the world of trading for short term profits.

Investing very often only requires the fundamental aspect of stocks being considered as potential candidates for a long term investment portfolio. By fundamental it is meant the profit and loss, long term prospects and bottom line of the company in which stock is being considered for investment purposes. Trading however, takes an entirely different approach with most of the focus being on the technical side of the stock. By technical it is meant in terms of how the stock trades within the dynamics of the larger markets.

When we think of technical stock trading the trader should think in terms of charts and chart patterns as well as major and minor support levels at the very least. Sectors that are in favor and out of favor. Daily financial and economic data released by various agencies. Larger market trends. Federal Reserve announcements. Options expiration each month. All of these factors have an impact on the market and very little to do with the fundamentals of an individual stock, which is why there is such a large difference between investing and trading.

Novice traders should consider studying technical analysis and Japanese candlestick charting before venturing into the shark infested waters of stock trading for short term gains. What applies to investing with success will seldom work with trading since the dynamics are different with each. Taking the time to study market characteristics and patterns on a daily basis and then implementing a trading system that is first tested is the key to success with short term trading.

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Low volume stocks can make it much more difficult to trade profitable. For that reason it is better to stay out of these stocks regardless of how the set up looks.

Volume should be looked at every time you place a trade. What volume does is tell you exactly how much of a given stock was traded during the day. Every number counts as 2 trade's one buy and one sell. So if volume is 10 million it means 10 million people sold and 10 million people bought that day.

It is very important to look at volume because if volume is too low it could pose problems if you plan to make money trading it.

The first problem low volume stocks give you involves getting in and out. If there are only 40,000 trades on a given day you might find it very hard to get in especially at a price that you want to.

The second problem is similar, if a stock turns against you it could be hard to get out. Falling price on a low volume stock could make a crowd of sellers with no buyers around. By the time you get out you could have a loss so far under your original stops that, you would be hurting.

The last way low volume stocks work against you is the mere fact that you can't use the volume to help you. Normally you can use volume to help determine the strength of a price action. High volume on an up day means that the stock is likely to keep going up in the short term.

If volume is low to begin with however, it makes it harder to tell where high volume and low volume are. No one is trading the stock anyway.

So what is good volume? Every trader has a different opinion, but I believe you should be able to find a stock that is trading at least 1 million shares per day. That should allow you to move in and out pretty easily.

As your account gets bigger however you may want to move the bar up. Only trade stocks with more and more volume. Just remember to keep volume in mind the next time you make a stock trade.

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I am a huge stock market geek and a huge poker geek as well. I remember seeing not too long ago a world poker series; they were interviewing a guy from the semi finals who said he was an option player.

That made me think, trading which is one of my biggest hobbies is very similar to one of my other favorite hobbies poker. Now I know most people out there are not willing to believe that poker and trading are similar.

Most people associate poker with slot machines and gamblers, and the stock market with a way to invest your money and grow. The truth is people do make a living by both being poker players and by being stock market traders. Once more it takes the same qualities to be a good poker player as it does to be a good stock market trader.

In order to be a profitable poker player you must.

1. Have a strategy that wins in the long term, probabilities and reading people

2. Manage your risk, don't make stupid calls, fold when you are not sure

3. Win big when you win, all in, raising, reeling them in

In order to be a profitable trader you must

1. Have a strategy that wins in the long term

2. Manage your risk

3. Win big when you win

I'm not saying that the stock market only works when you get lucky. But I am saying that the stock market is not something to be taken likely. Most people believe they can just buy a stock today and sell it sometime later for a profit.

The stock market should be treated more as a poker game then a savings account. You cannot put all your money in one stock and hope for the best in the same way you would not go All in with a jack high and hope for the best. If you want to ultimately win you need a strategy that makes you money in the long run.

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Most people know that financial planners or broker-dealers are not likely to be churning their clients like wire houses, so this means that their trades would indicate a better trend of market dynamics then the day-to-day fluctuations in the market caused by program trading or straight stock brokers at wire houses. There are many charts that technical traders watch that help them see trends in the market, the question is; are charts of financial planner's trades of buying and selling a decent indicator of future trends in market direction?

One technical analyst who writes a column for one of the major newspapers in the financial sections states: "The theory behind using this indicator is that people tend to be bullish after they buy, and bearish when they sell."

Thus, if the financial planners are making lots of "buy-trades" they are bullish and tend to recommend a bullish outlook or perhaps call a buy-signal for their clients. Whereas, when making "sell-trades" they are telling their clients that the market is weak and thus, not telling them to buy yet?

Yes, perfectly logical or one could say "During the time they buy or sell," and for a short duration afterward. Yet, I take issue with this because many investment advisors during let's say December will be selling their junk to take the tax losses to save on income tax for their clients. And they plan on replacing these sales into better upside bets for the potential uptick, into solid companies or into safety.

Therefore, if they are selling for tax losses, then re-invest that money in another category, are they really "Bearish" during that period? I say, NO. If this is the case, then the financial planners will be both buying and selling in the same couple of days as they reposition portfolios.

So, your chart of this will have changes, but those changes will not indicate much of anything, and cannot be used as an adequate predictor of monthly, or quarterly trends in the overall market, and I am sure there are other cases which will cause this chart to give false readings.

Indeed, whereas I agree with this as a valuable chart, I also realize that there are other scenarios that play out during December each year as investment advisors protect their investors from tax hits. Now then, if we use such charts in a "café" of charts to look at trends in the market for technical analysis of when to buy at the bottom or sell at the top, it is of value. But investor beware, there is a lot more to this game than just looking at one type of chart. [read; "The Black Swam" for instance].

Well, we all know that the market and the economy are not the same and yes, it is a lot about perception, trust, confidence, and fear. Along with technical analysis, mathematics, policy, politics, currency, interest, regulations, taxes, etc.. I guess, it does make sense to study a little psychology and philosophy along with it all. I'd warn both technical analysts and day-traders not to over educate yourselves; so perhaps all this is worthy of some more thinking?

If you are seeking advice on financial matters please contact a licensed Financial Planner. I am not in the Securities Industry, have no licenses and am not a reliable source of information. I only call it how I see it.

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What are the differences between the two, and does one work better than the other?

Growth Stock Investing

This form of investing was especially popular in the dot com era - growth investors invested extensively in high growth industries such as biotechnology and dot coms back in 1999. Growth investors bet on the stock's strong future returns, and are willing to pay more than what the stocks are really worth based on today's returns. This can easily create speculative bubbles - the most famous recent growth investing bubble was the one that burst in March 2000. Nonetheless, growth investors will also look to traditional industries if they predict a possible major change in trend or change in consumer tastes.

In contrast to value investing, investing in growth stocks also means foregoing the dividend yields that traditional stalwarts would offer. This is because growth stocks are also usually small to medium cap stocks - while Microsoft might have been an excellent growth stock pick back then, it has now reached the maturing stage where it would be difficult to double its value in one year.

Value Investing

Value investing means to invest based only on the actual value of the company today. The company must have strong assets, low debt, strong earnings, strong cash flow and a stable, established market position. The most famous value investor is probably Warren Buffett, who mastered this approach on his path to becoming the wealthiest investor in the world.

Value investors such as Warren Buffett are bargain hunters. They pay careful attention to the times when stocks are under-priced. These are the times when the market prices the stock below what it is actually worth, actually due to short term fluctuations. They look for competitive barriers that build a strong moat for the company; these include intellectual property rights, strong brands, and so on. These companies whether financial storms relatively well, and provide greater portfolio security.

Growth Stock Investing versus Value Investing

Given the current market conditions, growth investing is gradually shifting out of favor. Present market conditions suggest that it is time for bargain-hunting - value investing. The question that hangs over us all is whether we have already hit rock bottom, or if the bottom is going to fall out altogether.

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Most people decide that the stock market is just too risky for them to put their hard earned money into. I know many savers out there who would rather put their money into a savings account then into the markets.

This way they can go for the sure thing, the government insured return, but what are you actually getting when you invest your money into a savings account? Say your bank pays you 2% interest in your savings account, and you put $10,000 into it.

After 1 year you have $10,200 and it appears you have found a safe way to let your money grow. But hold on; let's look at some facts first. Inflation normally hangs around the 3% range. This means that in order for you to have the same buying power as you did last year you need to have $10,300.

So even though you made $200 in paper money, you're buying power actually decreased by $100. And if you factor taxes into that you will find that saving accounts are the only for sure way to lose buying power and get taxed on it at the same time. Losing around 1% in value per year isn't exactly something you make up in the long run.

Now suppose you invest that money into the SPY which goes up 10% annually on average, you would have $11,000 after 1 year, on average and because you only need $10,300 to keep the same buying power not only is your paper money increasing but you're buying power is too.

And suppose you educate yourself to make 20%, 30% or more off of your money annually, that would do so much more for your wealth then a savings account ever could. Also what is the limit on the return you can expect from the market? There isn't one, your returns can be as large or as small as you can possible imagine and shoot for.

That isn't to say the markets are without risk. You always have the chance of losing money in the markets. But if you manage your risk and let your winners ride it can be a great place to make money.

by Shaun Rosenberg

About the Author

When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. Now I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.

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If you are an active investor who regularly buys and sells shares then it's absolutely imperative that you keep records of every single transaction. Not only will this help you prepare your tax forms at the end of the year, but it will also enable you to analyze every single trade you make.

If you really want to become a successful investor then you need to use some kind of trading method, otherwise you're effectively speculating that a share will go up, and pretty much gambling with your own money. Once you have a trading method and you start buying and selling shares, you can then look at every single trade in order to see which trades worked out well, and which ones lost you money.

There is no excuse really for not analyzing your trades. All stock broker accounts have full records of each trade you make so you can always log into your account and view them this way if you don't wish to keep a proper trading diary. The only way you are going to become a more profitable investor is by learning from your past mistakes and tweaking your system so that it generates more and more profitable trades.

It's very easy to idle along buying any shares that take your fancy or look temporarily oversold, but these impulse trades can be very expensive in the long run. This is why it's always a good idea to scrutinize every single trade. By doing so you can identify these bad trading decisions and eliminate them from your future trading.

Another benefit of keeping records is that you can assess how well you are doing when it comes to market timing. For example you can quickly see if you bought a share too soon, took profits too quickly, let losses accumulate too fast, and so on. Stop losses should be enforced rigidly and your winning trades should ideally be allowed to run as long as possible, so by viewing all of your trades, you will soon see if you are actually applying these rules or not.

So if you not as successful an investor as you would like, try looking at your share dealing records. This will give you valuable information such as where you are going wrong, why trades are not working out as you had expected, and what you can do to improve your profits in the future. As with most things, if you want to become better at something, then you have to learn from your mistakes.

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There is a ton of investors out there who have traditionally invested their hard earned money into the stock market and mutual funds who ask this question. The news media for years now have bad mouthed commodities into the ground calling gold a "barbeous relic" that has only lost value since January 1980 when the last precious metals bull market peaked. And of course, there were those ordinary investors who lost their shirts in the last bull market when they bought high and sold low, which is the exact opposite of what you want to do in any type of investment, so it's no wonder why most investors bad mouth gold and silver.

From the year 1980 to 2000 you had massive gains in the stock market particulary tech stocks that made a lot of money for a bunch of investors. During this same period gold and silver experienced a sever bear market caused by the central banks around the world selling their huge stockpiles onto the market especially silver. During this time gold went from $850/oz to $250/oz and silver went from $50/oz to $3/oz. The stock market bubble officially popped in 2000 causing the dumb money investors to once again lose money while the smart money sold their stocks a couple of years earlier and moved into the commodities sector such as oil, gold, and silver.

So you ask why should I invest my currency in silver? Let me give you a few reasons. First, since 2000 if you would have invested your currency into gold you would have seen a 190% return on your money. If you would have invested your money into silver you would have seen a 240% return on your money compared to just a 35% gain on the Dow Jones Industrial Average.

Secondly, we are in another precious metal bull market, which some experts say will last for a couple of decades just like the last stock market bull run.

Thirdly, with the U.S. government bailing out every business that they deem too big too fail. Giving these Wall Street companies billions of tax payers dollars that has to be printed out of thin air becuase we are bankrupt, leads to inflation and a lot of it. Gold and Silver are a hedge against inflation, which is why they have been rising since the turn of the century and they will continue to rise for the forseeable future.

Lastly, the United States is 10 Trillion Dollars in debt and with unfunded liabilities such as Social Security and Medicare the total U.S. debt is actually 52 Trillion dollars. The entire U.S. GDP is 13 Trillion annually, so how can the we ever expect to pay our bills to our creditors? Like all empires throughout history that used fiat currency the dollar will collapse and become worthless while gold and silver skyrocket to the moon. Those left holding dollars will cry and weep saying, "Why Did I Not Invest In Silver?"

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The world's stock markets have taken a hammering in 2008 with pretty much every single listed company seeing huge falls in their share price. Both large and small companies have been affected but smaller companies have been hit particularly hard and are looking really weak, so is it now worth buying shares in these companies or not?

Well my own personal view is that these smaller cap companies should be avoided, at least for now. There are very few buyers out there generally, and the investors that are buying are predominantly buying shares in solid profitable companies that are most likely to survive the impending recession and be in a strong position when the economy recovers.

While there are a few smaller companies that are doing well and likely to survive the credit crunch, they are definitely in the minority. Furthermore even the ones that are profitable are still largely out of favour with investors because at the moment people are looking for safe shares to invest in, and this generally means the largest and most established listed companies.

There are also real fundamental problems with these smaller companies that are a direct result of the credit crunch. The vast majority of these companies rely on credit to grow their businesses in a healthy economy, but in this weak economy when people have less money to spend, a lot of these businesses need credit just to survive. However as has been mentioned in the news on numerous occasions, the banks just aren't lending money at the moment, which is a crippling blow for small businesses.

The secret to successful investing is to buy profitable companies at low prices and hold on to them for several years when you should hopefully see substantial gains. However at the moment you cannot be confident about any small cap companies because quite simply you do not know if they will still be in business in a few years time.

These are really tough times and smaller companies are finding it particularly difficult, so my own investing strategy is currently to ignore all small cap stocks and focus on the larger companies that have a long record of income growth and dividend growth. These companies are the ones best equipped to deal with the forthcoming recession.

By James Woolley

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Public corporations have the option of keeping all of their profits each quarter to re-invest in the company, or to distribute some or all of them to their shareholders as a dividend. Growing companies often need as much cash as possible to finance their operations, such as building new manufacturing plants or running marketing campaigns, so they prefer to re-invest their profits. Older, more mature companies that are not growing very much often pay a dividend. Dividends are usually paid out as cash but shareholders are sometimes given the option of receiving extra shares of the company.

How Often Dividends are Paid

Dividends are usually distributed on a fixed schedule, such as every quarter or every month, but special dividends may be distributed at any time. For example, a $4 per share annual dividend paid quarterly would be paid as $1 per share every three months. The Dividend Yield is often mentioned along with the dollar amount. This is simply the annual dividend divided by the current stock price. For example, a $1.00 annual dividend with a share price of $10.00 results in a 10% yield.

Important Dates

People often wonder when they need to own the shares in order to receive the dividend. Typically, you need to own the stock three days before the Record Date for U.S. companies. Here are some important dates:

Declaration Date

This is when the company's board of directors formally announces the dividend, its amount, the date of record, and the payout date.

Ex-dividend Date

This is typically two days before the Record Date and anyone who buys shares on this day or later will not receive this dividend. However, anyone who sells shares this day that were purchased before this day will still receive the dividend. Also noteworthy is that the share price will often drop on this day by an amount approximately equal to the dividend being paid as investors realize the assets of the company will be dropping by this amount.

Record Date

Every shareholder who is properly registered on or before this date will receive the dividend. In most countries, this usually just means you must own the stock before the Ex-dividend Date, which is why the Ex-dividend Date is mentioned more often than the Record Date.

Payment Date

This is when the checks are mailed or the dividends are distributed directly to brokerage accounts.

Taxes on Dividends

In the U.S. dividends are currently taxed at a 15% rate for most individual shareholders. For other qualified individuals it may be much less. Also, if dividends are re-invested, there are certain cases where the dividends will not be taxed right then. However, in most cases there will be some sort of tax involved.

The Power of Dividends and Re-investment

Albert Einstein once said the most powerful force in the universe is the power of compound interest. That concept can be applied to dividends when you choose to have them re-invested. When your dividend is re-invested, it itself will earn money (or shares) on the next payout. In this way, your dividends are compounding, and over time that can really pay off. Many public companies offer Dividend Re-Investment Plans, or DRIPs, so it is wise to check your holdings to see what options are available.

Short-selling and Dividends

If a shareholder has short-sold a stock paying a dividend, it is required that they pay the dividend out of their own pocket to the investor(s) the shares were short-sold to. It is somewhat complicated to explain the reasoning, so please do further research on this topic if interested.

Where to Find Companies with Dividends

Most financial websites list dividend yields for each company but you need to find a website that has a Stock Screener with the ability to search for dividends, such as Yahoo! Finance.

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Stock market presents a good opportunity to make money. Share markets are governed by the stock exchanges. NASDAQ, BSE, and NSE are among some of the big stock exchanges. They deal in shares and we make profit buying and selling shares.

Why invest in shares? Usually people invest in Land or Real estate, Gold or Fixed deposits. These investments do give us some profit and all those investments are safest investments. When investing we have three most important points to consider 1 security for the investment 2 Returns from investment 3 Liquidity. The third point drives us to shares and to an extent second point too. In share market we can sell our shares anytime and the returns are higher if properly controlled.

What stock market or stock exchanges offer us? They offer us a collection of shares from different companies for us to buy and sell. In share markets we can make money from different modes. We can make money by buying shares at a lower price and selling at a higher price when the rates are higher. This income is called capital gains and which is taxable in India. We can make money from dividends which companies declare. We can make money from shares we don't have possession too. How? For example if we have strong reasons to believe that a certain company's market price is going to be affected we can sell the shares we have in possession and also sell more shares which we don't have possession. For example, a company XYZ which has a market value of 500 and we have 500 shares of that company. We believe that a Government regulation which is going to be announced is going to affect the market price of shares What we do here we sell 1000 shares out of which we have only 500 shares in possession. The remaining 500 shares we buy later in the evening at 450 and we make a quick profit in the losing shares 25000. This shows us we must have active presence over the happenings in the stock market.

Learning and making money on share market is easy but it requires your active involvement. Without active involvement and knowledge you may not have a good career on stock market. Learn more to have a great career.

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You are finally to the place where you have paid off most of your debt and are ready to start investing in the stock market. You may have many goals that you are hoping to fulfill in the market - from retirement to an European vacations. That's the first step already down: you know why you want to invest. Now you just need to know a few basics that tell you how.

The first thing you must do is learn how to understand stocks. A share of stock is the smallest unit of ownership in a business or company. If you own a share of a company's stock, you are basically a partial owner of the company.

With your ownership comes the right to vote on members of the board of directors and other important matters that the company must decide upon. If the company distributes profits to its shareholders, you will probably receive a portion of this profit based on how much stock you own.

Many financial advisors suggest stock ownership due to the limited liability. If a company loses a large lawsuit and is ordered to pay a huge judgment, you stock simply becomes worthless. You won't have to sell your personal assets in order to keep the company up and running. If you are a stock owner, you don't face a lot of the situations that a full fledge business owner could face. For example, creditors can't come after your personal assets, but they can in private-held companies.

There are two basic types of stock: common and preferred.

Common stock represents the majority of stock held by the public. The stock has voting rights of the owner, as well as the right to receive dividends. If a stock is being referred to as either "up" or "down"," you know that the stock in question is a common stock.

Preferred stock has fewer rights, except for dividends. Companies with preferred stock usually pay consistent dividends. Preferred stock has first dibs at the dividends and profits.

Investors often purchase preferred stock for the current income from dividends. They are looking for companies that make big profits and use preferred stock to pay out dividends.

Common stocks are highly liquid, in most cases. Small companies may not be traded frequently, but if you purchase a large company stock, there are daily opportunities to buy and sell shares.

Beginning investors should take the time to read all they can about how stocks, trading and investments work before they jump right in. Know what stock sectors there are, know the market index, how dividends work and the different types of stock. All of these will assist you in becoming a better investor.

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A stock split occurs when a corporation decides to issue new stock and distribute it to it's current stockholders. This is a decision made by the company's board of directors.

The most common stock split is a 2 for 1 split. When this happens the stockholder will now own twice as many shares as before the split but at half the price. The total value of your stock does not change. For instance, if you owned 100 shares before the split and the price was $50 a share, after the split you would own 200 shares at $25 a share. After the split the shareholder owns exactly the same percentage of the company as before the split, only the number or shares and share price has changed.

While a 2 for 1 split is the most common, companies also distribute 3 for 1 splits, 3 for 2 splits, 5 for 1 splits, etc.

Why does a Company Split their Stock?

Companies will split their stock when they feel that the share price has grown to the point that it will no longer be considered affordable by many investors. Since most stock transactions are in round lots (lots of 100 shares), the total cost for 100 shares might be out of reach for some investors. Once a stock price hits $100 a share, for instance, evidence shows that many investors consider it to be too expensive. If the price per share were reduced it would be more affordable. The effect of more people buying the shares will hopefully lead to a price gain.
What effect does a Stock Split have on the Share Price?

When a company splits it stock it sends the message that the company has been profitable and it will probably continue to prosper. Companies normally announce their upcoming stock split some time in advance. Many investors and traders search for these companies and consider them prime candidates for a further price increase.

In theory a stock split should have no impact on the value of the stock, it should be a neutral event. The only thing that has changed is the share price and number of shares. When you do the math you still have the same value and the same percentage of ownership in the company. In practice however, companies who split their stock most often see price increase when the split is announced or after the split actually occurs. The company knows this and is eager to see it's stock price increase.

Reverse Split

Sometimes a company will issue a reverse split. When this happens the shareholder will have less shares at a greater price. For example, a typical reverse split is a 1 for 10 split. For example, if a company has been trading at $1 a share and you have 100 shares, after a 1 for 10 split you will have 10 shares at $10 a share. A company might perform a reverse split when their share price has dropped to a very low level and they want to increase the share price to appear more respectable to potential investors. In addition, some exchanges will de-list a stock when the price drops below a certain level for 30 days.

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