Money & Investing - Banks.com

When times change, savvy investors look for ways to use them to their advantage. Consider the stock market troubles. A few months ago, while many were abandoning ship, savvy investors were bargain hunting and buying more stock.

This mindset can also carry over to the types of stocks that you invest in. I thought this bit of investing news from Talk Stock Trading was interesting:

Today Dollar Tree surprised Wall Street by reporting a quarterly sales increase of eight percent and a profit increase of fourteen percent. The company posted sizable gains on the sale of food, cleaning products and health-care items as consumers sought relief from sky-high gas and food prices.

This Dollar Tree (DLTR) thing presents a promising investing idea. As worries of a recession (whether we are “technically” in one or not is irrelevant — people still feel the pinch) mount, consumers are cutting back. Whether it’s buying generic brands at the store, eating at restaurants less or buying products at the discount store, Americans are starting to see where they can cut back.

Other discount stores that may see some success include Family Dollar (FDO), Big Lots (BIG) and even Wal-Mart (WMT).

Looking for bargains

Of course, before deciding to invest in a stock, it is important to look things over carefully. Don’t just run with an investing idea because it seems like a good idea to other people. Check the fundamentals of the company, and determine whether or not it is likely to remain in a good position. And check for growth potential.

Thing of businesses that might see some popularity due to current economic conditions. This way you can hedge against inflation and try to find your own way of making the best of trying economic times.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, investing news, investing blog, investing idea,
recession, investments, WMT

Once again I’ve got a great reader question. Here it is:

I’ve been hearing a lot about ETFs lately from friends. What are they, and how can I trade them?

This is an excellent questions. ETFs offer yet another investment option for your portfolio. Let’s have a look at them:

ETFs: A definition

ETF stands for “exchange traded fund.” Essentially, this means that an ETF is a fund that is traded on a stock exchange as if it is a stock. It is a fund — or a group of stocks — that you can trade as if it were one financial instrument. It is important to note that ETFs do not contain mutual fund portfolios that are actively managed.

However, ETFs can contain financial instruments other than stocks. There are currency ETFs that track the performance of a variety of currencies being exchanged in forex trading. (Some forex traders use them as hedges.)

At any rate, you trade ETFs on the stock market as you would a stock, and the commissions and/or flat fees are similar on an exchange traded fund to what they would be on a regular stock.

Adding ETFs to your investment portfolio

It is worth noting that some ETFs are still considered somewhat volatile right now. They are gaining in popularity, though, because they can temper some of the riskier investments (like currencies) while still providing growth. And there are some conservative exchange traded fund options that grow at a slower pace.

Before adding ETFs, check your investment portfolio for diversity and your risk tolerance. If you need something a little different, and you can handle the risk, it might be a good choice.

The Street offers a look at 37 of the newest ETFs.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: ETFs, exchange traded fund, investing blog, investment portfolio,
risk tolerance, investments, forex trading

Right now, the stock market is enjoying some good news. As oil prices fall in commodities trading, US stocks gain as optimism ensues. (Of course, whether the oil prices will stay down long term is another question. The slide could be helped by profit taking.)

Today’s stock market news continues a general trend, over the past couple of months, toward recovery amongst equities in general. And one group that has been seeing some upward movement is in growth stocks. The Street reports on how the stock market has promoted growth stocks:

The equity markets have risen markedly over the past month, and whether there is enough steam to carry the growth style of funds higher is in doubt, given the less then encouraging economic news of late.

Of course, one can’t be too sure that the stock market — along with growth stocks — will keep going. Economic news, though better than most expected, is not necessarily signaling that the US will avoid a recession. And that could mean that growth stocks see a drop in the coming months.

What are growth stocks?

Growth stocks are those that have the potential to grow — and grow quickly. They are usually small cap stocks, and they are often in emerging technology sectors (though not always). They are generally very inexpensive, and they have the ability to make you a lot of money if you get in before they really take off.

On the other hand, growth stocks are also risky. They can just as easily tank, and this can leave you with large losses if you are not careful.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: stock market, stock market news, investing blog, growth stocks,
economy, investments, recession