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This Simple Stock Investing Strategy Reduces Risk

William Boyett — Tue, 24 Aug 2010 01:47:21 +0000

Your stock portfolio has to fight two major risks, the markets and inflation. Market risk is the chance that the value of your stock will drop. Inflation risk is that your portfolio will not grow fast enough to keep up with rising prices.

To combat these risks, many investors use a “Buy and Hold” approach for reducing market risk. Just how well does the “Buy and Hold” approach work in today’s volatile markets?

If we examine the S&P 500 Index, starting 50 years ago and ending at the end of last year (December 31, 2009) we can observe some very interesting facts:

1) Out of the last 50 years, stocks closed in the red in only 12 of them (less than 25% of the time). The biggest decline came in 2008 when the S&P lost 37%.
2) The worst average return for stocks over any five-year period was a decline of only 6.6%.
3) The worst 10-year return for stocks was 3.4%
4) Over any 15-year period, stocks have never posted an annual gain less than 4.1%.
5) The average annual gain over the entire 50-year period was 9.5%.

These figures are based on the S&P 500 Index. To replicate these returns for yourself you could buy into a mutual fund that invests in the S&P 500 stocks. Don’t forget you have to pay management fees, which could take 1% or more off your return.

The best part is, it takes no time! Just buy and forget for 50 years, and you too should get an average annual return of 9.5%.

Free Option Tools At TradeKing

William Boyett — Fri, 06 Aug 2010 20:35:33 +0000

One of my favorite things about TradeKing is its free tools for option trading. In the below 16 minute video, I’ll go over a couple of tools and how they can benefit your trading. Even if you don’t have an account at TradeKing, you should watch this video to discover the tools available and how you can use them to make big gains.

Get $50 when you open a TradeKing account today.

How To Calculate Intrinsic Value For An Option

William Boyett — Wed, 04 Aug 2010 21:09:12 +0000

Calculating the intrinsic and time value of an option is easy and simple once you know how. Watch this video as I explain how to calculate the intrinsic value, as well as the time value, of a Call option and a Put option.

How To Avoid Dumb Investing Mistakes

William Boyett — Fri, 16 Jul 2010 18:50:51 +0000

Here are some dumb investors I came across on Yahoo Answers and how you can avoid the same mistakes they are making. Watch the video now.

If you want more timely advice along with the markets next hot stocks, join me in my Insider Club for FREE!

Recent Hot Stocks – July 11 2010

William Boyett — Sun, 11 Jul 2010 19:58:53 +0000

As an investor it’s smart to follow the money. Big institutions and mutual fund managers have the money and power to drive prices higher when they decide to buy. Because of their size, they usually take months of buying before their positions in a company is filled.

Why not take advantage of their power and get in on the stocks they want and enjoy the ride as they push prices higher?

Whether you think the market is going up or down, below is a list of the industries and stocks that are performing the best in each type of market.

If you think the markets are in a downtrend from the April 23 top:

The best performing sector is the Real Estate Management/Developement sector which gained 51.52% since April 23. Some hot stocks in that sector: IRS, STWD, EJ, CRIC (listed in no particular order)

If you think the markets bottomed last Friday and are now in rally mode:

The best performing sector is the Steel sector which gained 10.89% since July 7 (four trading days ago). Some hot stocks in that sector: TIE, RTI, SID, SHLO (listed in no particular order)

The eight hot stocks listed above are some of my favorites as of this date. When to sell is up to you. To find more stocks in these sectors visit Yahoo Finance.