Investing successfully is the key to reaching one’s long-term goals. Whether one has some money set aside to begin investing, or one has just come into a large lump sum of money, there are many ways to go about investing the money. There are several mainstream ways to invest that can work for both professional in the field or a novice, but one needs to weigh the risks associated with the probable gains. The point in the many ways to invest is that, no matter method one chooses to invest, the method should work so that it can earn one additional profit.
There are several methods of investing one’s money and these include the company stocks, certificate of Deposit, mutual funds and bonds. Pentheny G. article “analysis of stock market investment strategies,”
…show more content…
Stock market crash is a sudden decline in the average price of the stock
3. The crash of the (NYSE) in 1929 caused the great depression and the recent crash in the 2008.
II. Pros and Cons of financial investment
A. Cons of financial investments
1. Success of stock market is partly attributed to luck
2. Poor investment decision can lead to loss of vast amounts of money
B. Pros of financial investment
1. Intelligent decisions can yield significant capital gains and security
2. Analysis of trends in the stick market can lead to success of an investment
III. Shares of stock
A. Public trade through stockbrokers since the general public is not allowed to trade stock in the NYSE
1. The internet facilitates information needs by customers to trade stocks.
B. Return on investment of stock
1. Stock market depends on logical decisions, facts, and gut feeling.
2. Relative unpredictability of the stock makes it the most popular investment decision among private investors.
IV. Trading strategies of the stock market
A. Day Trading
1. Involves the strategy of buying ad trading a stock within a day
2. Relies on the daily fluctuations of the stock values
3. The internet facilitates day trading
B. Swing
The stock market crash had a colossal contribution to the Great Depression. The stock market crash rolled in after the golden time in the 1920’s; with it came the Great Depression trailing right behind. The stock market crash was caused by people investing in stocks with money they did not have, this was called buying on margin. When the stocks fell everyone lost an enormous amount of money that they had invested into the stocks. The stock market was the main cause that forced American into the Great Depression. The stocks were a towering success until the collapse; the crash forced many Americans into poverty because they had to sell almost everything they had to repa...
Before we invested, we decided to pick two types of companies to invest in. We would choose companies that had expensive stock but steady increasing prices and we would choose smaller companies that had cheaper stock but whom had a chance for potential huge price increases. If the smaller companies’ stock went down the bigger companies’ steadily increasing stock would even it out, but if the smaller companies’ stock price rose greatly, like we predict, we could sell and make a good profit. We found a big name company that had reliable stock prices pretty quick, but finding a small company whose stock price could rise was hard. We
Investing in stocks involves owning part of a company’s equity which effectively enables the shareholder to receive a portion of the company’s earnings and assets in form of dividends. Stocks are generally categorized as either common stocks or preferred stocks whereby common stock allow investors to vote on key issues but do not guarantee of dividends (Markowitz 78). Preferred stocks on the other hand do not provide voting rights but assure stockholders of dividend payments. Investing in stocks offers investors comparatively high returns relative to treasury securities but the investments also have high inherent risk. Stocks are purchased through licensed stockbrokers who range from the discounted order-taking online brokers, to the pricey full-service brokers and money managers (Sourd 112). Despite the type of broker an investor opts for, the stock market has the potential to generate high returns through an investment strategy. One of the main strategies employed is diversification which involves the purchasing of different stocks with varied performance and rates of returns in order to spread out the risk of the individuals stocks across a portfolio. Investing in stocks is therefore one of the most profitable alternatives of personal financial planning, and should be considered as one of the investment vehicles that generates an additional income stream.
Moreover, it is not difficult to learn how and where to invest, it is actually easier than doing many other things in the business field. The time value of money is an important factor to consider when thinking about investing in the market stock. Investing in the market stock can generate profit in the long and short run instead of keeping the same amount without investing or just looking for interest which is limited. The following are pros and cons of stock market investing:
However, there is still a significant degree of uncertainty as to the effectiveness of one strategy over another amongst institutional investors and scholars alike. The vast majority of experienced investors believe that diversification, patience, and value are the three columns of successful investing. On the other hand, many researchers are still in disagreement about how viable other strategies such as growth, short-term and concentrated investing can be. Do all successful investors share this common thread of patience, value, and diversification in their investments or are there a plethora of investing techniques that investors utilize to achieve
The greatest investors in the world all understand one common theme when it comes to successful investing, “markets are volatile and they fluctuate.” Whether it is real estate investing or investing in stocks, there is an inherent risk. Therefore, new investors who are trying to decide whether to invest their available capital in real estate or stocks must learn to understand their own risk tolerance. To understand risk successfully, new investors must first learn some of the pros and cons of both real estate investing and stock market investing.
There wasn’t just a single action or event that sparked the stock market crash. It was a series of bad judgements and choices made by the consumers, over looked by expenses and the era they had just experienced full of wealth and prosperity. Nobody saw this coming, or could even suspect this of happening. Consumers continuously invested in the stock market, leading to over speculation, poor government policies and and all around an unstable economy. Large investors catching wind of a bad outlook and future in the stock market, pulled their money out of the market and went straight to the banks. Because of the crash and its aftermath which revealed serious flaws in American economy, it led up to the Great Depression. The crash caused over 5,000 banks to close and for the many who invested their money only in banks, it was devastating crisis. Farmers started facing tough times when unemployment rates rose. Nobody had the money to pay for the food leaving farm prices dirt cheap, which meant lower income...
October 29, 1929 is the day it all came tumbling down. There were warning signs preceding the Great Crash, which evidently were the causes behind it in the first place. Backtrack to early 1929: the stock market was booming. The rise of easy credit allowed consumers to purchase more than they had before. However, in September of 1929, the stock market began to peak and fall in an uneven way. People sensed that something was wrong and stopped spending. Instead, on October 29, everyone tried to sell their shares, leading to a complete collapse of the stock market. Billions of dollars were lost that day. Due to the laissez-faire free market, the government had no role in helping the stock market. This plummeted America into the Great Depression, leaving nearly everyone affected in some
The Stock Market crash caused the Great Depression by making investors and companies losing majority of their money. The stock market crash happened on October 29, 1929 and was caused by the trading and selling of 12.9 million stocks. The Great Depression lasted from 1929 to 1939 and was the worst economic crisis which caused many people to become unemployed, businesses, and banks started to close and fail. Also the depression challenged American people and families by putting them in economic and social issues. Millions of people and families lost their savings and many banks which failed in the duration of the
Stock investment means you are purchasing a share of the company, therefore the company’s success determines the value of your investment. Buying stocks is not a difficult process; clarification of some important terminology and differentiation helps gives you the foundation to start investing.
There have been many issues that caused the stock market to crash. One major effect on the Great Depression was the current state of agriculture. The effect from both the Dust Bowl drought and the Great Depression made it hard on farmers in the early 1900’s; it was hard for farmers to produce crops (“The Ultimate AP US History”). Farmers with small businesses were forced to end their profession because of the new economic climate. As the farmers left the business of agriculture, there was less crop to sell the country (Pettinger). With the drop in prices after the war, it was difficult for farmers to stay current with loan payments (Romer and Pells).
The market crash itself took place on a fateful week in October of 1929, and was the primary cause of Great Depression that followed. It was the worst crash in the history of the stock exchange up to that point, and is arguably still the worst to have ever happened when considering the overall effect it had upon the nation, changing America by destroying life savings and the value of prospecting companies. It also took the market nearly 25 years to reach its previous peaks following the crash (Beattie). The crash was primarily caused by the exaggeration of share value, purchasing stock with borrowed money, and the effect of mass panic and lack of information. Overspeculation is likely to be the largest cause of the crash, when considering events that took place prior. In the 1920s, the
The Stock Market Crash started the Great Depression which lasted 10 years and affected not only United States other countries as well (Stock Market Crash of 1929). The Stock Market Crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate economic collapse, if it wasn't for the crash the great depression would have happened in the 1960s-70s (History.com Staff). The fundamental cause of the Great Depression was spending, which led to decline in production and after that business started shutting down (Great
The threat of online competitors is also present to every discount broker that has not switched to online trading or chooses to remain with their current business model and not offer online services. These online trading sites have unique trading capabilities that otherwise are not present at Edward Jones. They offer sound advice on stocks and other investments instantly. Each customer has to call their Edward Jones advisor in order to place a trade. This makes sense to Edward Jones because they want to help prevent the rash decisio...
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998