Know 3 Ways How You Can Lose All of Your Money in the Stock Market!

No one invests in the stock market to lose money. Yet it often seems like the people who lose their shirts outnumber those who strike it rich. While there's no guaranteed way to prevent losing money in the market, recognizing these three common blunders can save your portfolio from a lot of pain.

Fear and greed are said to be the two emotions that drive most investing decisions, and following either of them can lead you to lose all of your money. While it's not easy to be devoid of all emotion when putting your money in the stock market, reining them in can help keep you from losing your shirt.

With that in mind, here are three common mistakes many investors make, both those new to investing as well as some old salts who have been through a few market cycles. Although there's no guarantee you won't suffer losses on a stock, recognizing these forced emotional errors can help you minimize the pain your portfolio experiences.

1. Day-trading (or even frequent trading)

Jumping in and out of stocks trying to time entry and exit points is a sure-fire way to lose your money, which is why you'll find there are few if any day-traders who have a long-term record of success.

There is a certain allure to the "easy money" that comes from buying and selling stocks as they twitch higher and lower, but in reality, it's a (small-f) fool's errand. It's hard enough to figure out what a stock will do five or 10 years down the road, let alone how it's going to react tomorrow or 15 minutes from now -- or three seconds from now! Yet day-traders are flitting from one position to the next, racking up transactional costs and hoping each trade wins.

It's just not easy to successfully make winning bets like that time after time. Yet beyond day-trading, even moving in and out of positions over days or weeks isn't any easier. It gives the impression that you know the precise time to buy in or sell out, but actually, you almost always miss the top or bottom, and a stock runs away from you.

There's a reason the most successful investors -- Buffett, Lynch, Klarman, and more -- are long-term buy-and-hold types. It doesn't mean they never sell, it's just that the times they do are few and far between. You'd be better off emulating their strategies than trying to time a stock.

2. Playing penny stocks

Along with buy-and-hold, the investing legends don't invest in penny stocks, and the reason is simple: It's because they are losing propositions. While here and there you may be able to find one company that makes good on its promise, the vast majority of times, you're going to wind up on the losing side of the coin toss.

There are a few reasons for this. Penny stocks are so tiny, they tend to be very thinly traded, which makes them ripe for manipulation. They also tend to be built on "ideas," but have few ways of achieving them. They tout they're turning themselves into the next Microsoft or Wal-Mart, but often, their promoters are just seizing on the latest hot idea -- lithium batteries, solar power, rare earth minerals, gold mining, etc. -- and they're trying to churn up interest in the stock to get the price to jump, so they can bail out and reap a windfall while you're left holding essentially worthless paper.

Sure, controlling thousands of shares for a relatively paltry investment is exciting, and if they only run up a few nickels in value, you've got a terrific score. Unfortunately, few penny stocks do that without being some pump-and-dump scheme. Ultimately, this isn't investing, but gambling, and the odds of winning are worse than going to a casino.

3. Using margin

Leveraging an investment by taking on debt in a bid to amplify a stock's return can be a powerful tool in the right hands, but like credit card debt that can quickly mire a person in a lifetime of servitude to paying it off, using margin is generally a losing bet.

It's not that margin is a complicated or sophisticated tool. It's actually very easy. Too easy, in fact. You're taking a loan out on the value of your portfolio and using the proceeds to buy stock. Yet because it is so easy to misuse, it should only be employed sparingly, if at all.

The problem is, in a rising market like the one we're currently enjoying, it's easy to think you're an investing genius, and all your picks will do well. Tapping into margin to enhance your returns is only good until the next nasty downturn, and then buying stocks on margin can become quite painful.

All it takes is just one stock you've margined to the max to drop in value -- and it doesn't even have to fall all that far -- and you can be faced with the dreaded margin call: Either put more money into your account immediately, or face having your portfolio sold off to make up the difference.

Debt can be good. A mortgage, for example, can be an appropriate use of debt. But taking out a second mortgage and using the funds to go gamble in Las Vegas would be a misuse, and that is essentially what buying stocks on margin is. Picking good stocks with good businesses that are trading at reasonable valuations, and then holding them through thick and thin, will usually provide you with superior returns so you don't need to finance your portfolio with dangerous debt.

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David and Tom just revealed what they believe are the ten best stocks for investors to buy right now...and Wal-Mart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Source: MSN/Money -The Motley Fool

Why every investor should hold dividend stocks!

Video by CNBC

A company dividend is one of the cornerstones of capitalism. When a company is cash-flow positive for a reasonable length of time, it gives management an opportunity to reward shareholders for their loyalty in the form of a dividend.

Some investors may wonder why investing in dividend stocks is often considered an essential part of holding a long-term diversified portfolio. After all, is receiving a few cents per share really much to get excited about? Investing in dividend stocks goes way beyond just the dividend element of the company.

"Dividend-paying stocks can be an important component in an investor's portfolio, providing income, the potential for appreciation and diversification benefits that may reduce portfolio volatility," says Dan Kern, chief investment officer and president of Advisor Partners, an asset management firm in Walnut Creek, California.

It's that potential for price appreciation that can sometimes be lost on investors who only concentrate on seeking dividends. Yet the reason dividends are being paid is because a company's earnings can support it, which in turn means the company's stock price likely has been rising over time.

Kern also points out the importance of dividend stocks for retired investors. "They face the dual challenges of low interest rates and longer life expectancies. Dividend stocks can help with both challenges by providing a mix of income and capital appreciation," Kern says.

Kern also cautions against the trap many income investors fall into: buying stocks just because the dividend yield is high. "Too many investors flock to high-yielding stocks with dividends that may not be sustainable. We think a focus on sustainable dividends across sectors is the more effective approach to dividend investing," Kern says.

And yet sustainable dividend stocks generally don't boast very high payouts. What does a company signal when it pays a more modest dividend?

"We are in a generational low-yielding environment," says Linda Duessel, senior equity strategist at Federated Investors in Pittsburgh. "To simply seek high-yielding stocks could lead you to invest in riskier companies. We like quality high yield."

Steve Berg, CFO of O.penVAPE and a former managing director at Wells Fargo and UBS, points out what a more modest dividend may signal about a company. "A low payout could indicate the company's decision to retain more capital toward business development instead of stockholder payout, which could lead to future growth. As for the dividend itself, every percentage counts, and 4 percent still offers a spread nearly twice what is available on 10-year U.S. Treasury rates," Berg says.

Once an investor is paid a dividend, he is left with an interesting choice. Should he take the money and run, or reinvest the dividend back into the company's stock, or into some other stock? Much depends on why the investor chose the dividend stock in the first place.

"It's not always desirable to reinvest dividends," Kern says. "In many cases, clients rely on the dividend income for personal financial purposes. In other cases, it may make sense to redeploy dividend payments into portions of the portfolio that are underweight relative to the investor's target allocation. Part of the beauty of dividends is the flexibility they provide to the investor."

Duessel says it depends on whether the investor needs the cash. Retired investors often rely on dividends to supplement their income. "Perhaps you need cash, and in that case, you may not want to reinvest. If not, however, reinvesting dividends and owning shares of successful companies is a great way to build wealth over the long term," Duessel says.

Berg offers caution on reinvesting dividends: "It is not in your best interest if you're not overly optimistic about the company's future performance. While this doesn't equate to withdrawing investment from a company, the reinvestment of dividends should be reserved for when you have a specific reason for doing so beyond its convenience."

There's also the question of reinvesting dividends if a company is too successful. Many times, a company's share prices may have soared far beyond what the stock's intrinsic value truly is, or it may be relatively expensive compared with its peers or the market. So what sectors currently seem to offer stocks that are not overvalued and which also pay dividends?

Kern likes the financial sector. "Banks have made meaningful progress repairing their balance sheets and are benefiting from moderately improved economic conditions. Current valuations appear reasonable given the outlook for interest rates and the economy. We're less optimistic about sectors such as telecommunications and utilities, which both face challenges sustaining the current level of dividend payments," Kern says.

But Duessel says utilities are strong dividend stocks. "We currently also favor sectors that are less cyclical, such as utilities, which can serve as a helpful 'bond surrogate' for investors," Duessel says. However, she also says there is compelling value in technology.

Berg suggests looking at consumer discretionary stocks, which have seen improvement as the economy has improved, and consumers spend more money on items that go beyond basic household staples.

Of all the dividend stocks in the market, the ones that often get the most attention are the so-called "dividend aristocrats." Many managers place a lot of faith in these companies, as they have increased their dividend every year for at least 25 consecutive years.

Duessel is high on technology as being the source for future dividend aristocrats. "The technology sector currently is the place to find names of large-cap companies that are raising dividends. These are companies that are sitting on a lot of cash and have eschewed dividends for decades, so the sector is ripe with dividend opportunities," Duessel says.

Source: MSN/Money -2017 U.S. News & World Report

नायकदेखि निर्मातासम्म शेयर खेलाडी, लाखबाट लगानी सुरु गरेर करोडौंको पोर्टफोलियो बनाउँदै कलाकार ।

काठमाडौँ । पर्दामा अनेक चरित्र निभाएर दर्शकको मनमा राज गर्ने नायक आयुष रिजाल जब फुर्सद पाएर इन्टरनेट ‘ब्राउज’ गर्छन्, उनले ‘लग इन’ गर्न नछुट्ने साइट हो- नेपाल स्टक डट कम।

सुटिङ छैन र दिनभर फुर्सदमा छन् भने उनी पुग्ने थलो हो- शेयर ब्रोकरको अफिस। किनभने आयुषले नायकका अलावा आफ्नो अर्को परिचय पनि बनाइसकेका छन्- शेयर लगानीकर्ता। त्यसैले फुर्सदको पायो की बजारको गतिविधि अपडेट लिन आतुर भइहाल्छन् उनी।

Read more: नायकदेखि निर्मातासम्म शेयर खेलाडी, लाखबाट लगानी सुरु गरेर करोडौंको पोर्टफोलियो बनाउँदै कलाकार ।

Source: bizmandu

Mutual funds vs stocks: Find out which is better!

For a small fee, the investor gains from the stock-picking ability of the professional fund manager, does not have to track his portfolio and also benefits from tax exemption of portfolio gains.

Did you know that in India, individual investors hold more stocks than they have mutual funds? Only about 4.5% of the total market capitalization in India is held through equity funds, whereas direct holding by individuals is nearly 22% of the market capitalization.

Read more: Mutual funds vs stocks: Find out which is better!

Source: economictimes

म्युचल फण्ड भनेको के हो ?? सामान्य जानकारी सहित

काठमाडौँ, २०७३ भाद्र ३१ : सामान्यतया म्युचल फण्ड (Mutual Fund) भनेको धेरै साना-साना लगानीकर्ताहरुबाट संकलित कोष हो जसको व्यवस्थापन र संचालन पोर्टफोलियो म्यानेजरले गर्ने गर्छन । जो व्यक्तिलाइ दोश्रो बजार अर्थात् ब्रोकरबाट शेयर खरिद-बिक्रि गर्न जोखिम महसुस गर्छन तिनीहरुको लागि म्युचल फण्ड भनेको राम्रो लगानीको अवशर हुनसक्छ !

Read more: म्युचल फण्ड भनेको के हो ?? सामान्य जानकारी सहित

Source: nepbizinfo