This was a pretty horrible week for the market with two 100-point days and Friday closing on the lows.

During these past few days Sir Alan told us things are looking up and the economy is basically strong. Mr. Market didn?t hear him. It seems that jaw boning can?t get people to buy. In fact there were more sellers than buyers.

If you go back in history it is a truism that has become conventional wisdom that the stock market goes up during an election year. The reasoning is obvious. The president – who ever he is – in office will pull out all the stops to create the illusion that the economy is in good shape and he is the one who takes credit for it. Both Mr. Bush and the Fed chairman better get their best top hat out and reach way down for that white rabbit.

It is going take some real magic to get folks in a buying mood. The lower it goes the less likely they are to buy. Of course, brokers are calling and telling investors, ?This is the break to buy. Stocks are cheap. Better get on board now. You can?t let this opportunity pass by. You can?t afford to be out of the market.? And on and on with the platitudes. Don?t believe any of that hog wash.

What brokers should be telling investors is to protect their money by placing stop loss orders. You can be sure that won?t happen. The big brokerage firms frown on stops and punish brokers who encourage customers to use them. Fortunately, when I was a broker I worked for company that did not penalize this concept and I refused to take a customer who would not place stops when they bought something. That is why I never lost customers and had them for years.

This year the major indexes (DOW, S&P, and NASDAQ) are down. Not a great deal, but definitely lower. This means for those who invest in index mutual funds that they are running a loss. Brokers always say, ?You are in for the long haul? so not to worry about what is happening now. That?s what they told you in 2000 and you still have not recovered your losses from then.

No brokerage firm tells the true story of the secular bull and bear markets. These have occurred with great regularity for the past 200 years and will, if history continues to repeat, follow the same course. The shortest secular bear has been 8 years and the longest 25 years. At a minimum we are not half way through this one. Prudent investors (and I hope that?s you) will protect their portfolios with stop loss protection on every position. Every broker and financial planner will advise against it, but it your money not theirs.

The market is not magic. Hocus pocus and white rabbits will not make it go up for very long. Illusions are not where it?s at. Forget the brokers? abracadabras and place your stop loss protection today.

Al Thomas’ 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 at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know.

1-888-345-7870; al@mutualfundstrategy.com

The main principle of fundamental analysis is to find profitable companies to invest in by comparing revenues, sales, management, etc. There are two types of drivers to look at in fundamental analysis: internal drivers and external drivers.

Internal drivers are company factors that are directly related to the actual business in question. For example, liabilities, assets, revenue, income, products, management, etc. It is these characteristics in a company that you will be comparing to other companies in the same industry. This allows the trader to get a general understanding of where this company ?sits? in relation to other companies with similar businesses. A trader can also use these internal numbers to calculate many different ratios that will help determine if the company is currently undervalued or overvalued.

Who is the management? What have they done in the past? What is the quality and diversity of the management team? All these questions can lead to a lengthy discussion about the particulars of each individual in management. Traders should use reports, news, internet, and other sources to help make an informed decision about the management team.

What are the company products and/or services? How does it compare to other competitive products? What?s unique? Why is it better? If you would not be willing to buy the company?s product why would you invest in that company? Companies with inferior products, weak development/product cycles, poor quality companies tend not to last very long. (I?m sure there are some exceptions to that rule, but it can be considered bad policy to invest in companies with bad products).

Production is very important when it comes to companies that produce oil/gas, wood, power, metals etc. Their value depends highly on their production output as well as the current value of the product. The more a company produces, the more it can earn. As well, these specific commodities vary in cost, the higher the value of the product, the higher the potential for profit. Oil is a perfect example of this relationship. As global oil prices rise so does the value of oil companies.

Profit margins are important, or for that matter, profit in general is important. Profit can be considered the keystone to fundamental analysis – the more profitable the company, the higher the potential for dividends as well as price growth. Most valuation techniques compare profit in some form or another to that of similar companies.

Companies that have not yet attained net profit are still in the early stages of development. While these companies generally have a larger growth potential, they also have more risk. Companies that are producing net income can generally be considered established in the market place. There is less risk, and typically, the price of the stock will reflect that. The axiom here is that the more the company makes, the more the company is worth.

Is there an institutional presence? The level of institutional presence is determined by the amount of shares outstanding that are owned by institutional investors (mutual funds, pension funds, investment houses, etc). As small companies mature, there is a point where they will be recognized by institutional investors. When these institutions begin investing in a company, the stock price will reflect that recognition (also when they sell out, it will be noticed in the stock price as well). Larger and more established companies typically have larger percentile institutional presence than smaller companies (micro-caps tend to have little to none).

While the study of volume patterns is in the realm of technical analysis, volume can also be used as a fundamental indicator. Does the company you are looking at have enough share volume to sell your shares at a later date?

External drivers are factors which are outside the company?s influence that can affect profitability. For example, the economy, inflation, interest rates, politics, bond market, etc. External drivers can be interpreted differently by different individuals. Remember, there is no magic formula.

Alex Martin is an senior analyst with MHP Systems Inc. http://www.chartfilter.com

Most brokers have not learned their trade – investing. Webster says that means putting money into something (stocks) for the purpose of obtaining an income or profit. When people look at their brokerage statements these days they must wonder where their broker went to school. Investors could have done better with a dartboard.

Brokers are not taught to make money. They are taught all the regulations that come out of Washington that must be followed so the brokerage company will not be sued. To my knowledge none of them are taught the basic fundamentals of increasing customers’ wealth or protecting the customers’ capital from loss.

Brokerage houses hire people to do reports about companies. They call them analysts, but today those jobs have deteriorated into snow jobs to get people to buy stock in a particular company. When you read the report you will find it very professionally done with pretty pictures and graphs and charts. Wow! I’ll buy that. And a few months later you will wish you hadn’t. When you have a loss the standard reply is, Don’t worry. You are in for the long haul. The market always comes back. In your lifetime? Today there are hundreds of stocks that have lost 50% to 90% of their value and there is absolutely no hope they will ever recover those losses. But?.you are in for the long haul. You now have the Buy and Hold philosophy.

Why do so many people cling to this doctrine?

You have a stock you bought for $40 per share that went up to some profitable number and now is down below $10/share. You’re out 75% of your money. You are waiting for it to go back up so you can get out even and I will tell you even is a loser.

Many years ago I heard a story about how they used to catch monkeys in Africa. A hole was made just big enough for the monkey to get his outstretched hand in a hollowed out coconut shell. Fruit and sweets were placed inside. The monkey put his hand in and gripped the goodies, but could not remove his clinched fist. It refused to let go even when the hunter came to put him in a cage. All the monkey had to do was let go of the candy and he could have escaped.

Many investors are the same way about the stock they bought. They won’t let go. The investor does not want to admit he was wrong. You are not wrong until you sell – just broke. Small losses will not hurt you, but holding on can put you in the poverty cage. Buy and Hold conventional wisdom will break you. Learn to let go of the losers quickly and you will preserve your capital.

Al Thomas’ 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 at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

This is an outstanding online newsletter, entitled "Day Trading Robot" this week, Penny Stock Pick any hot topics.

Since the traffic in the newsletter is gone, stocks have consistently selects its winners, and may be avaluable resource to identify what are the best to invest in penny stock recommendations stock computer program on the basis of recommendations by a stock of properties.

Subscribe to the newsletter can be an extremely cost effective alternative to stock analysis software programs the money to buy one of these heavy stock analysis.

Another advantage of signing a stock analysis newsletter, isBenefits of reading a recommendation report that stock has been completely studied and analyzed for you, saving you time and effort to research stocks.

It may invest the trust of a computer program for penny stocks better to say? Not the stock market a gamble? The simple answer is that yes, you can trust a program. And no, the stock market is not a game of chance. No one can predict the future of the house. Buta computer is very good at analyzing data and make projections on the sole basis of these data.

stock valuation may be round is considered a valuable tool for stock picking that. Imagine buying a car without knowing its value, or investing thousands of dollars in property with no potential. Sounds scary? But that is exactly what cash amounts if the deals without assessing their value.

Smart investment requires much effort. If you want to invest in shares, the first thing to look out for is his assessment. Evaluation of a > Stock price or value is the 'real' in it. If you need to do the evaluation you do not need to study the stock chart every time or worry about market development in interest rates or stocks. Do not invest in stocks without knowing the value, because this is like putting a dead end where you have no idea what you end up with.

Investment in shares is worthless as risking your money conscious. While fluctuations> Exchange can not be avoided with the precise evaluation of one, you can minimize the risk factor. This will ensure that you do not shoot in the dark, and do significant investments. Use the measurement of inventories serve as a guide for buying and selling shares.

Instead of paying your hard earned money into shares worthless, it is better to be patient and in-depth research to determine the value of the stock before buying. Did not become a mathematicianGenius or not a stock market guru. All you need is a basic mathematical skills and strength to search for all evaluation information available.

You can not take advantage of the market valuation, if you do not understand or appreciate its importance in the share. Spend a great deal in purchase of shares on what others say, can also lead to losses. Nor should we buy on the basis of media hype, as can be deceiving, and you may end up losing every pennyinvested. Owning shares in a company as actions can be an excellent tool for building wealth for you as it grants you the right to everything the company owns. Therefore, the valuation of the company, the profit is generated and how beneficial it is to prove to you a profitable company. The assessment may be especially beneficial for middle-class investors, the stock market due to limited resources only to overcome losses

Thus, the assessmentwould be to buy shares, as the deciding factor. As you can appreciate the value of something you buy on the basis of an established standard, the stocks must be evaluated to determine whether the investment will bring you back or not. Be aware there are companies that make huge profits on the Stock Exchange, but their stocks are worthless. So a lot of time to carry out its own research to help you choose the right stocks for your portfolio.

1. Penny stocks are a penny for a reason.

While we all dream of investing in the next Microsoft or the nearest Home Depot, the truth is, the probability that you will find that once again are slim in a decade of success.These businesses are starting and bought an empty box because it was cheaper than an IPO, or simply do not have a business plan convincing enough to justify an investment banker for the money for an IPO. This does not make a bad investment, but should be realistic about the kind of society that relate to investment

2. Trading volume

Find a consistent high volume of shares traded. Given the volume average can be misleading. If ABC trades 1million shares today, and not the rest of the week's trading, which appear daily average of 200 000 shares. To access and egress at a rate of return, it must be consistent volume. Also look at the number of transactions per day. E 'for sale or an insider? Liquidity should be the first thing to see. If there is no volume, you will end up holding "dead money" to put the only way to sell shares to the bid, sell more to the discharge pressurewhat to sell at a lower price.

3. The company's know-how to make a profit?

While it is not uncommon to see a start-up in a loss, it is important to run, why do they look to lose money. E 'feasible? Will they also financed (with the consequent dilution of the shares) to search or have a partnership that encourages companies to look for?

If your company knows how to make a profit, the company can grow money for their business,greater value for shareholders. Need some research to find these companies, but if you want to reduce the risk of loss of your capital and increase the chances of a return much higher.

4. If you are planning an entry and exit – and stick to it.

Penny stocks are volitile. Will move rapidly up and down faster. Remember, if you buy shares at $ 0.10 and $ 0.12 in a sale, the investment represents a 20% return on. A drop of 2 cents leaves you with a 20%Loss. Many stocks trade in this sector on a daily basis. If capital investment is $ 10 000, 20% loss is a loss of $ 2000. Do this 5 times and you're out of money. Keep your stops close by. If you get stopped out, go to the next opportunity. The market tells you something, and if you admit it or not, his hearing is usually better.

If the plan was to sell at $ 0.12, and jumps to $ 0.13, or 30% win, or better yet, place your stop at $ 0.12. Lock theProfit, not limiting the upside potential.

5. How have you held?

Most people find penny stocks through a mailing list. There are many good penny stock newsletter, but there are as many pumps and dumping. They, along with insiders, load stocks, companies are starting to pump unsuspecting subscribers to the newsletter. Purchase of these securities, while the sale of sensitive information. Guess who wins here.

Not allNewsletter are bad. After processing in the industry for the last 8 years I have seen my share of unscrupulous companies and promoters. Some are paid in shares, sometimes in restricted shares (an agreement under which the shares can not be sold for a predetermined time), others in cash.

As the good from the bad company website? Simply subscribe to and track investments. There was a legitimate way to earn money? They have a track record of its subscribersgreat opportunity? You start to notice quickly if you subscribe to a good newsletter or not.

Another suggestion I would offer is not more than 20% of the total portfolio to invest in penny stocks. It invests to make money and preserve capital to fight another battle. If you have too much risk of losing capital increase of the opportunity cost of capital. While 20% growth, it must do more than enough money to make a healthy return. Penny stocks are riskybeginning, because your money at risk?

To calculate the market capitalization of a company (market capitalization), it is necessary to multiply limited company is the price for the amount of outstanding shares. By doing this calculation you can find out what the total dollar value of all shares of the Company at any time. Penny stocks are shares traded outside the stock market like the others, but the market traded in the over-the-counter (OTC). For trade in mostPiano> an agent acting on behalf of investors, and is a direct transaction between the investor and third. The broker receives a commission for facilitating trade.

A majority of all transactions charged by brokers as principle transactions Penny. This means the broker to pay any commission, but makes its money on the spread and buying and selling in a reasonable time. There is no single price at which penny stocks to buyand sold, but there are a number of different prices. The difference between the bid and ask price is called the "spread. The spread of many penny stocks are usually around 25-33%, but can often 50-100% or even more. There are always two and two prices tender offer, these are known as internal and external supply and demand. Note that it is provided outside and I ask that is of great interest in general. Penny stocks are also subject to mark the prices. Here, a broker heldthe penny stocks on his behalf and was therefore given the volatility of the price risk associated with some of the markets.

While penny stocks is linked to rather complicated and there are many problems with penny stocks trade, and millions of dollars in losses, many companies still trade in them because they contribute, for example, struggling companies just starting phase. The best way to find a good investment is to talk with your broker. But in penny stocksMarket intermediaries to be very careful, the only attempt to sell, and maybe not your best interests in mind.

If you are interested in long-term investments, trade, and it is important to know the volatility. There are several tips that volatility may refer the application should be utilized. If investors are looking for a bit 'of money with the possibility of, is usually believed in the intrinsic value of the share and the margin of safety. This provides a guide for them to buy shares. If the margin of safety and value of> Dissapper Stock, is a good time to sell the shares before the price drop.

It 's always better to buy shares at a lower price, the profit gain. If you know the volatility in stock, you will be able to get prices for stocks are the lowest.

In determining the volatility of a security is necessary to select a specific time and write down the value of the field for several days. Note the depths, heights, close, openPrices and average values. All these values must be recorded at the same time each day. Add to all these values and divide by the number of days. These will give you an average price. Once you have the median, you should add or subtract prices daily and write it. Multiply the number obtained with themselves, for the variance. Add all the numbers, the square and find the square root of the figure. The square root is obtained, the volatility of your baseInvestment decision on. This number is usually represented as a percentage.

If you are looking for investments, you should think of the volatility. This will avoid dangerous from an investment in shares. This investment advice, but also helps you get the shares at a good price and sell them at a profit.

The meaning and purpose of the investment in shares after a stock to give the time that you can increase prices in some months. You are not looking for a stock is priced at only $ 5, but want to go up months ago to $ 500 over the next three? Is not it?

So how do you go for an election campaign? What are the factors, the months of stock price to rise in a few short? In this article we will be on the basis of discussion> Equity investing. If you buy a stock are actually buying a small piece of property of the company.

If the company does well, will have its rise, and the company does badly, the share price decline. Investing is so easy. Well, wait, the devil is in the details. How do you know which company is good and a good performance in the future?

Assuming that the company is developing very well, butPrice goes down instead of up. What do you think? Stock prices are determined by markets. Markets are places where buyers and sellers, what you buy to satisfy investors or sell shares call. Now the stock price depends on what investors expect the company's future performance is not close to its current performance. In the short term, stock prices can be irrational and try to understand the reason behind the price volatility maycrazy. But at the price of stocks in companies has long linked to performance des

So the stock price depends on market expectations about future company performance. This point is very important to understand. Think of the initial public offering of Google. The stock price shot in a week, as the expectation of the audience was very high. cooled below the price a bit '. So if people expect a companyvery good performance in the future, although not good at this time, its stock price.

Well, if you look at a company, you look at the results there is a profit, management, IT products, markets, the IT industry and so on, before forming a reasonable expectation of future potential. Sometimes the growth potential of the sector is much more important than the company itself.

For example, in a high growth sector, will be aa generalOutlook for the business' work in this industry share price increase. As soon as the economy and industry leading company!

into action can make a plant more than one. You do not need a brokerage account and you invest your own stock in, however, you can invest in sharesMutual funds and leave the money management and stock picking to professional investors.

Equity Funds offer diversification and professional money management only a moderate cost to you. To keep costs low, invest in no-load equity funds.

Now need a basic guide to help you invest the funds in fundraising has different invest in. To increase diversification, May 3 is to invest in two o. Basically there are two main criteria forEquity fundraising.

First, the Fund will invest primarily in large cap, mid cap or small-cap stocks? Second, is to emphasize growth stocks, value stocks or invest in both (that would be characterized as "core" or "mixture" of funds)?

You now have nine basic categories of equity investment schemes (3×3, above) to choose from. For example, you can start investing with a large-CAP, Blend Stock Fund. You could add a Mid-Cap Growth Fund for diversification.

Now, someDefinitions. A large-cap shares count as General Electric or Wal-Mart. Company's market capitalization (CAP), an increase the number of shares of a company is outstanding times the market price of each share. This (market capitalization) will give you the total market value of the company. Mid-cap stocks are stocks of companies with a lower market value of total and small-cap stocks have lower market value.

Growth stocks have an equity investment in companies Sales and profits growing at a pace faster than the average. Investors buy stocks for growth in the appreciation of the price (with the hope of the stock price to increase significantly) … not for dividends.

value stocks are an investment, the ratio of stocks is more affordable (lower PE) and / or pays a higher dividend than other titles. They are often purchased because they seem to be underestimated (perhaps a bargain).

This blend fund invests in stocks with large> Stock exchange market … Growth and value stocks. A Mid-Cap Growth Fund invests primarily in shares of growth of smaller firms (in terms of market capitalization).

In the collection of equity funds, here are your nine basic choices for diversified general equity funds: Large Cap Blend (core), Large Cap Growth, large-cap value, mid-cap blend, mid-cap growth, mid Cap Value, Small-cap blend, small-cap growth, value small caps.

In general, large-cap blend funds, whicheverSafer. Small-Cap Growth Fund is more risky, but it excellent growth potential in a roaring bull market have.