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American Eagle Could Soar Again

Oct 1

Posted by admin in Stocks Mutual Funds

When investors look ahead to what may be great investments for the next year, they much too often focus on what were big winners from the previous year. For example, shares of Google (GOOG) more than doubled in price during 2005. So, quite naturally, Google gets a lot of attention these days as a good investment choice.

But investing in what\’s currently popular isn\’t usually the most profitable move. The big winners in the future are much more likely to be stocks that are unpopular right now but happen to represent ownership in great businesses.

One such business may be American Eagle Outfitters (AEOS). American Eagle caters to teenage shoppers who tend to change preferences in clothing retailers based on which way the wind is blowing.

The stock is down about 30% in the last five months. However, American Eagle happens to be a very good business that can be bought at a bargain price. A high return on capital virtually guarantees that a business is a good one. And American Eagle certain qualifies on that count. By my calculations, its return on capital (earnings before interest and taxes divided by net working capital and net fixed assets) is 48%.

And shares of American Eagle can be bought at a bargain price right now. Its earnings yield (earnings before interest and taxes divided by enterprise value) appears to be about 17%.

A good company at a cheap price. That\’s a combination that makes money for patient investors. American Eagle may be flying low right now. But look for the eagle to soar again.

This article is for education purposes only and should not be considered to be investment advice.

(C) Larry Holmes

Larry Holmes invites you to visit http://www.smart-money-report.com/
Your common sense guide for financial and investment success.

Writen By : Larry Holmes

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When And How To Invest In Bonds

Sep 30

Posted by admin in Stocks Mutual Funds

If you\’ve been considering making an investment but aren\’t exactly sure what you should invest in, you might want to consider making an investment in bonds. An investment that is usually grouped together with stocks, many people aren\’t overly sure what bonds are or how they operate? a lack of understanding that can cause some people to overlook a potentially lucrative investment opportunity.

If you\’re one of these people and have been wondering exactly what bonds are and how you should invest in them, then read on? the information below was designed for you.

Defining Bonds

The first thing that you need to know before investing in bonds is exactly what bonds are. Bonds are a type of loan certificate issued by governments, states, and some corporations for a period of time greater than one year, as a means of raising money? when you buy a bond, you are for all intents and purposes loaning that amount of money to the issuer.

Bonds generally pay an interest rate to the purchaser, building interest until the bond matures at which point the original investment is repaid along with the interest that has been accrued along the way.

Researching Bonds

The history of bonds can be researched in much the same way that the history of stocks can be, though there isn\’t as much potential for great profits or losses in the bond market due to the bond\’s nature.

Information that can be gathered on bonds includes the issuer of the bond, the date issued, and the date that the bond is set to mature. Some other information may be available as well, depending upon the method used to research the bonds.

Advantages and Disadvantages of Bonds

Since bonds are considered to be a type of loan, there is a bit more security in bonds than in stocks in the instance that the issuer suffers financial setbacks or goes under. Since they are generally being repaid with interest, there is not the same fear of sudden loss of value that is associated with stocks. Bonds are also considered to be a debt of the issuer, and bondholders are given the same priority on the issuer\’s income as other debts in the case of financial problems.

Unlike stocks or equities, however, bonds do not convey any portion of ownership or control in the issuing agency or company.

Choosing Potential Investments

When looking at bonds to potentially invest in, you should take into consideration the issuer, the interest rate that is being paid on the bond, as well as the date that the bond was originally issued and the date when the bond is set to mature. Ideally, you would want to invest in bonds that have good interest rates over a longer period of time, though this means that your investment won\’t mature until that time has passed.

Choose your potential bond investments based upon this criteria in order to find the bonds that will pay out the most to you upon maturation? some shorter-term bonds may also be chosen if you\’re wanting to try and reap some profits in less time, however.

Deciding to Invest

When making your final decision to invest in bonds, you should make sure that you can afford to invest in a longer-term investment than you may be used to.

Some bonds may take several years to mature, at which time your investment will pay off? just make sure that you understand the patience involved, and you\’re sure to get the most out of your bond investments.

You may freely reprint this article provided the following author\’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Writen By : John Mussi

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Investments And How To Find Them

Sep 30

Posted by admin in Stocks Mutual Funds

There are risks involved in all investing. The skill of investing is knowing which risks are worth taking, and which should be avoided. Finding and knowing which risks to take is the essence of good investing and the whole reason that investments can pay such a high reward. It cannot be done without careful research and analysis. You must give yourself every chance to make the right decision. Investing without carrying out sufficient research is like playing roulette. You are giving yourself virtually no chance of covering your investments and avoiding disaster.

There are certain steps you will have to take in order to give yourself a fighting chance of being a successful investor. If you are considering investing in company shares on the stock market, then you should be aware that all publicly traded companies must provide investors and potential investors with access to company financial data. This data is generally available from the company so if you are considering buying into a company, then get access to this information and satisfy yourself that the company is in a good financial state before parting with any money.

Be Aware

If you do research a company, and are taking a look at its financial position, then you should look back two to three years into the past. You probably don?t need to go back further than this but if you go back less, there may be important trends in the finances that you will miss. Take special note of the quarterly statements and the revenue and earnings per share.

You should be trying to identify trends in certain figures. While these are no guarantee of what might happen In the future it is undeniable that an upward trend in revenue and profits will be a positive sign to look out for.

Once you have satisfied yourself with the basic financials of the company and that the prospects of making good profits into the future are favourable you will be in a position to consider putting money into the share. There is an ongoing debate over whether it?s preferable to buy shares that will increase in value, or shares that pay good dividends and the answer to this question must always lie with the individual investor. What must be remembered however is that there is little point in chasing dividends. This refers to the practice of buying a share just before a dividend is expected to be announced. The price of the share will already have taken the dividend into account so you will be paying for it in any case.

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk At the Personal Loan Store you can find some of the latest personal loans explained in detail.

Writen By : Joseph Kenny

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Every Path Has Puddles

Sep 24

Posted by admin in Investing, Stocks Mutual Funds

On the path of life there will be some
rain and therefore puddles. Most are shallow
and we easily splash through them and occasionally
there might be a very deep one. Learning to
navigate them will make the journey more
pleasant.

Your investment journey to the pot of
gold at the end of the rainbow will require your
not stepping into those deep holes. It is almost
impossible to know the depth of any pothole so
an investor must have a strategy for the
unexpected and it must be in place before the
foot sinks out of sight.

Every professional trader (and you are a
trader whether you believe it or not) has an exit
strategy for his portfolio. Those who do not are
doomed to sink out of sight in a very deep and
muddy pool. When any stock, mutual fund or ETF
is purchased it must be determined prior to
purchase how much the investor (trader) is
willing to lose or how take profit.

It is pretty stupid to sit and watch an Enron,
Delta or AT

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Investment Canary

Sep 24

Posted by admin in Investing, Stocks Mutual Funds

Years ago before all the electronic sensors
miners would take a canary down into the shaft.
He was a very pampered bird as he represented
life or death. If he dropped off his perch
unconscious the miners ran for the exit as fast
as possible. The little guy had detected poison
fumes. Yes, they carried the canary out when
they left.

There are many pitfalls in life that are not
life or death, but it would be nice if we could
have a special ?canary? to warn us of a
calamity. One of those major catastrophes would
be the loss of a large portion of retirement
funds. There are few investment canaries, but
most are complicated or expensive; however,
there is one that will warn you and costs less
than a canary. In fact it is free.

Most brokers don?t know about it, many don?t
want to learn and most brokerage houses will not
allow them to use this simple signal. Brokers
are in business to get and keep your money
?working? (for them). Your cash in a money
market account does not fall into that category.
They never want you to sell even when your
equities are going down and you are losing your
shirt, pants and underwear. ?Hang in there. The
market always comes back.?

You need a ?canary?.

As long as stocks are going up Mr. Mushroom
can sit back fat, dumb and happy as he did in the
1990s. Since 2000 the scenario has changed.
Hopefully Joe Mushroom did not lose all his
money from 2000 to 2003, but many took a big
hit. It need not happen again.

The investor needs to know the general
direction of the market and especially the
direction of his stocks and funds. Most
investors who are saving for retirement have
jobs and other commitments that do not allow
them to be active traders. They need a very,
very simple method that can be looked at once a
week or even once a month.

Once a week or even once a month you can
go on the Internet (and if you don?t have that
connection you can do it at the library?s
computer). Find www.bigcharts.com. It?s free.
Put in the symbol of the mutual fund or stock in
which you are interested and click on the red
box marked ?Interactive?. I like to use a 5 year
time period which can be selected.

Scroll down on the left to ?indicators? in
small print, click and then choose Moving
Averages, SMA and to the right put in 200. Click
Display Chart and you are done.

As long as that red 200-day line is moving
up the investor should hold his position. The
canary is singing. When it turns down sell. It
doesn?t get any simpler than that. This is an
investment canary for the long term investor.

When the canary falls of his perch (the 200 line
turns down) run, don?t walk to the nearest exit.

Al Thomas\’ best selling book, \”If It Doesn\’t
Go Up, Don\’t Buy It!\” has helped thousands
of people make money and keep their profits with
his simple 2-step method. Read the first chapter
to receive his market letter for 3 months at
www.mutualfundmagic.com to discover why he\’s
the man that Wall Street does not want you to
know.

Comments to al@mutualfundmagic.com

Copyright Albert W. Thomas All rights reserved.

Writen By : Al Thomas

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Rear View Mirror

Sep 24

Posted by admin in Investing, Stocks Mutual Funds

Buying a stock or mutual fund is like a driver
who is going down the road at high speed, but is
using looking in the rearview mirror as a guide.
He can see fine out the back, but has no
idea what is ahead. Sound familiar?

Your broker is going to help you with driving;
I mean picking stocks and mutual funds, so your
car (investment) will stay in the road and not
crash. He is going to send you all kinds of
information. You know – green sheets, pink
sheets, blue sheets, full color slick pages,
brochures, booklets and more: turn right, turn left,
put on the brake, speed up, slow down. He might
even get you in on an interview on the Internet
with the CEO of some company. Wow!

Or you can buy special reports from
Morningstar. They are not too expensive. The
dedicated investor might want to visit the
company headquarters especially if it is a new
public offering. Of course, the investor might
want to check out the background of the company
officers by inquiring at the NASD (National
Association of Securities Dealers) and the SEC
(Securities and Exchange Commission) in
Washington.

Have any of the corporate officers been
involved in other companies that have failed?
You can ask these questions and more.

What does all this information mean? Isn?t this
looking in the rearview mirror? Some of what you
have found is ancient history and some is not
quite ancient, maybe a little mildewed. It is
supposed to help the investor get an idea if the
company is financially sound and is expanding so
he can expect his investment to grow.

Are these guides any good?

Everything is past performance. The required
imprint according to regulations on every piece
of sales literature is, ?Past performance is no
guarantee of future performance?. Basically all
the information you have is worthless; you are
looking in the mirror.

If you invest you should determine before you
put any money on the line how much you are
willing to lose. Will you stick with this hummer
if it goes to zero or have you determined what
percentage you are willing to part with if it
declines? Do you have an exit strategy for both
loss and when to take profit? Most investors
have neither.

Every professional investor I know has an exit
plan. He knows how many dollars he will give
back if he if wrong and if his stock selection
is positive he has some idea of a price
objective or having the price performance tell
him where to sell.

The great secret of the market is not buying.
It is selling. Until the investor learns how to
sell he will never make money in the market.

Looking at past performance (the rearview
mirror) may make the investor feel better, but
it is not the way to keep your investments on
the road to success.

Al Thomas\’ best selling book, \”If It Doesn\’t
Go Up, Don\’t Buy It!\” has helped thousands
of people make money and keep their profits with
his simple 2-step method. Read the first chapter
to receive his market letter for 3 months at
www.mutualfundmagic.com to discover why he\’s
the man that Wall Street does not want you to
know.

Comments to al@mutualfundmagic.com

Copyright Albert W. Thomas All rights reserved.

Writen By : Al Thomas

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Vanishing Funds

Sep 20

Posted by admin in Finance, Stocks Mutual Funds

No, not the money you have in your brokerage account, but mutual funds. This year so far more than 600 mutual funds have vanished. Where did they go and what happened to the money in those funds that belongs to the investors? The mutual funds were either liquidated or merged out of existence.

Not to worry. Investors did not lose any money, but there could be tax consequences. If the mutual fund is in a tax-sheltered plan of some kind it won\’t make any difference as far as taxes go; however, if the investor is not in a tax shelter he will be responsible for the capital gains taxes, if any. When a fund manager liquidates a stock for a profit within the portfolio the profit must be declared and a capital gain distribution sent to all investors in the fund.

The situation is different if there is a merger. The stocks within the fund are absorbed into the surviving fund and may or may not be sold depending on the investment philosophy of the fund manager. For the investor who wants to be invested in a particular type of fund this may deviate from his personal goals.

The big and famous funds don\’t merge or liquidate, but in fund families such as Fidelity, Liberty, Janus, etc. they have been known to merge their weak funds into stronger ones. The prime reason being that the fund is not making any money and is unable to attract new investors. Usually the fund is taken into one that has a similar portfolio and this helps a fund family as it buries the losers and shores up their overall track record. It does reduce overall expenses and works to the advantage of the investor. You must be aware that sometimes money is moved from one non-performing fund to another. You have to find this out for yourself.

One good thing about the liquidation of a poor performer is that it forces the investor to move his money from a bad situation to (hopefully) a better one.

This year is not going to be a banner year for the majority of mutual funds. It should force many investors to take a closer look at what these fund managers have done with their money. At this time it might be a good idea to evaluate what your funds have done for you lately. If over the past few years they have not outperformed the S

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