Living on Large Cap Stocks--The Beginning

Like many stock market investors/traders, I too, lost my shirt in the nineties. High-tech stocks always seemed to offer such huge returns, and when you analyzed the charts they looked like can't miss opportunities. But as the decade wore on my stock portfolio value went on a steady nose dive. Until it virtually became non-existent.

At the time I was looking for stocks to hold for a few months, and then sell. Stocks that were likely to increase in a short time. I read all the books, learned fundamental and technical analysis, created and back tested stock trading systems. Subscribed to all the newsletters, the services, the gurus, and jumped around in my opinions so much, that even when I was right, I didn't allow my correctness time to pay off. Self-doubt, gut wrenching anxiety, not to mention unnecessary stress on an already dysfunctional marriage all added to my panicking. And the inevitable loss of my entire account.

Through it all I made right buys and short sells, but my convictions was never very strong, I couldn't stand the fluctuation of hi-tech stocks, and had no idea when to keep my position and when to dump it.

Usually I would dump winners at the exact worst time, and keep losers for way too long. I tried system trading, but grew weary of systems that worked when back testing but not in real time. In short, I went broke, lost my marriage, my house, and my confidence.

I paper traded large cap stocks for 3 years, averaging over 50% return on investment for 3 years. While I scrimped and saved, and hid money until I had a whopping total of $3000, to open a stock account.

Around 2001, I began sniffing around the market again. Now, though I had no money to trade with. However I remembered a time right at the end of 1999. When I had traded GE, several times successfully, it was in a nice up trend, with enough timely dips that allowed buying opportunities, and timely spots to also sell. I began wondering if I could buy and sell large cap stocks, and make a profit. I began, again pouring over charts, it was easier now, with the Internet, you could do it for free. I studied household names, and not so household names but always stocks over 5 billion in capitalization. In 2002, I began paper trading, based on a few quick judgments I made about chart formations, and using a few basic indicators. I did this in real time

I had no money to trade, now going through an expensive divorce, that was to leave me virtually broke for 3 years. I, still was fascinated with the idea of using large cap stocks, and the fascination kept me paper trading. I found these advantages to large caps; one they had real value, not blue sky. So often, hi-tech and biotech's only had future earnings to offer. Large caps had real worth, real property, real earning, etc. Information on them was readily available. I learned during the nineties, I will never have the latest information on stocks. But with large caps you don't really need it. Large caps charts were also more predictable, more reliable, upturns and down turns were within parameters, that were almost always followed. High tech could drop like a rock from the sky on rumors, rumors that I wouldn't even know about until the end of the day.

But was there enough volatility to trade in large caps. I was always bored with buy and hold and hope for a 7% return over the next ten years type strategy, I wanted some action. But what I found was there is enough volatility, if you can figure out how to predict it. Consider my first real trade of this year, I bought All-State Insurance ticker symbol ALL. I bought it in March of 2005, at that time its 52 week low was 43, and its high was 52. If you had bought it at the exact low and sold it at the exact high you would have made, 20% annual return. Not bad for such a safe investment. Of course it is impossible to do that. But what is very possible is to hold it for about 39 days, and make around 3%, in that time. That is almost a 30% annual return while holding a very safe stock for a very short time. And that is what I did.

And then I bought All State. This year I again hope to make over 50% return on investment, only in real dollars. Which let me tell you is much more exciting, than paper trading. Oh, I have started a successful side business, whose profts I place into my account. But more on this later. You can read my trades as they occur on my blog http://livingonlargecaps.blogspot.com/. And watch as in real time I attempt to prove you can make huge profits on large cap stocks.

CT Larsen trades Large cap stocks, for unusually high returns. You can follow his trades and learn his methods on his blog at http://livingonlargecaps.blogspot.com

Penny Stock Advice ... Can you really make a fortune day trading penny stocks ?

Profitable day traders recognize that trading low priced hot stocks is among the fastest & most effective ways to harvest BIG piles of cash in the stock market.

The problem is that if you don't know what stocks to look for and how to approach them while limiting your risk, you won't even get close to making some profits.

You don't necessarily have to trade low priced hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities while at the same time limiting your risk.

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Stocks

Stock represents a share of ownership in a corporation. A bond is a security that represents a debt owed by the corporation to the bondholder, but does not include the ownership privileges of a stockholder. Stocks and bonds are the staples of many investment portfolios. As an investor, it is important to have a clear understanding of just what these securities can and cannot be expected to offer by way of a return.

The exchanges When you invest in securities listed on the New York Stock Exchange (NYSE), you are participating in the growth of some of the largest U.S. and foreign corporations. The NYSE lists more than 1,800 stocks and over 2,400 corporate bonds. However, many more stocks and bonds are offered in other established and less well established markets. Among the markets that you may wish to participate in are the American Stock Exchange, the Pacific Stock Exchange, Boston Stock Exchange, Chicago Board Options Exchange and NASDAQ.

Common stock Common stocks - also called common shares, capital shares, or capital stock - represents units of ownership in a public corporation. Purchasers of common stock are granted specific rights that may include the right to:

* Vote at stockholders meetings, * Sell or otherwise dispose of their stock, * Have the right of first opportunity to purchase additional shares of common stocks issued by the corporation, * Share pro-rata with other common stockholders in any dividends distributed to common stockholders, * Receive annual reports and inspect the corporation's books and records, * Share in any assets remaining after creditors are paid if the corporation is liquidated.

A corporation may be authorized to issue more than one class of stock. For example, one class of common stock might have enhanced voting rights. Holders of this class would likely pay a higher price for their shares. Usually any additional classes of stock being offered are designated as "preferred stock."

Preferred stock Preferred stock gets its name from the preferences granted to its owners. These preferences may include the payment of dividends and distribution of assets in case of liquidation. Preferred stock generally does not carry a voting right. This type of stock is issued to raise additional capital without jeopardizing the controlling interests of the common stockholders.

Preferred stock may be participating or nonparticipating, cumulative or non-cumulative, callable, convertible, or some combination of these. The benefits of investing in this type of stock are often similar to those of bonds. Most preferred stock dividends offer a fixed rate of income.

Preferred stockholders have an ownership interest in a company's net worth. Such stock is subordinate to the company's debts to bondholders, but it is superior to common stock. Preferred stocks offer relative safeties of income, but preferred stock prices usually have a more modest growth potential than common stock.

You should discuss with your broker the various types of preferred stock available and whether they fit into your investment objectives.

How stock is valued Stock is often referred to as having par value, book value, and market value.

Par Value Par value is an arbitrary value set by the company at the time of issuance and is of little concern to most investors.

Book value Book value is calculated by dividing the total net assets of the company by the number of shares outstanding.

Market value The price at which shares of stock can be bought and sold is called the market value. Shares that are not publicly traded, however, will have no market value.

Vital information about public companies Information about public companies whose stock is traded on the New York Stock Exchange, American Stock Exchange, NASDAQ, or over-the-counter is contained in the documents these public companies file with the Securities and Exchange Commission (SEC).

Among the items reported are: * Financial statements * Description of business * Location and character of principal properties * Legal proceedings * Stock options and compensation of top executives * Proposed offerings of securities * Number of shareholders * Number of employees

Issuers of registered securities must file annual and other periodic reports that provide a public file of current information about the company. These reports include the 10-K, which provides a comprehensive overview of the company. The 10-K is filed within 90 days after the close of the company's fiscal year.

The 10-Q is a quarterly financial report filed by most companies, which although un-audited, provides a continuing view of a company's financial position during the year. The 10-Q must be filed 45 days after the close of the fiscal year quarter. To obtain copies of these reports, contact the SEC.

Dividends and yields Unlike interest on bonds or certificates of deposit that remains constant, dividends on stock can be reduced or eliminated in lean periods. Profits in good years, however, usually mean higher dividends, increased stock prices, and better returns for the stockholder.

Preferred stock dividends are usually paid at a fixed rate and before dividends are paid on common stock. In addition, most preferred stock dividends are cumulative, which means that if the company fails to pay a dividend when due, the unpaid dividend obligation will accumulate for the benefit of the preferred stock owners. These obligations must be paid in full before common stockholders receive any dividend payments.

Warrants A warrant is a type of security, usually issued together with a bond or preferred stock. The warrant entitles the holder to buy a proportionate amount of common stock at a specific price that is usually higher than the market price at the time the warrant is issued. A warrant is usually offered as a "sweetener," to enhance the appeal of the accompanying fixed-income securitie

Larry Westfall is the owner of DIY Investing - http://www.pennystockebook.com

So - You want to start trading stocks online

The advent of the Internet has brought some wondrous things to our front rooms. One of the best is online trading in the stock market

The primary reasons are 1) speed of execution and 2) transaction costs. Once you click your mouse button, your transaction can be completed in a matter of seconds for less than 10 dollars per trade.

Before you select an online broker (actually an online brokerage firm since everything is automated and you will have no need to speak to an actual broker), do some research and find a company that is right for you. Consider the transaction price, types of investments you plan to make, reliability of brokerage firm, etc. In other words - do your homework.

Here are some things to consider when selecting an online brokerage firm: ·Understand that most likely you are not linked directly to the market through your home computer and that the click of your mouse does not instantly execute trades or cancel orders. Your order goes through your brokerage firm electronically and is placed in the order received. Your brokerage firm is required to find the best price for you. Even though the order goes through the brokerage firm, a market order will be executed in a matter of seconds. Be careful with market orders in a fast moving market - use a limit order instead to minimize your risk. ·Determine if the stock quotes and account updates you receive are real-time or delayed. Even the quotes you see on the ticket on CNBC are delayed. Real-time quotes are provided by most brokerages - some for free, some for a fee. ·Check the on-line broker's ability to get the best price for investors. Most brokerage firms provide this information on their website. Again, you have to read through the site and request information. You want to find the best deal that suits your requirements. ·Receive information from the firm to substantiate any advertised claims concerning the ease and speed of online trading. There are many online firms that have specific securities that they specialize in - some are for penny stocks, some only trade the major markets, and some are for overseas, some for options. Do your Due Diligence and find the one best for you. ·Obtain information about entering and canceling orders (market, limit, and stop loss), and the details and risks of margin accounts (borrowing to buy stocks). Margin accounts are not for the novice. Basically it is a very expensive loan that can be called at the whim of the brokerage firm. They all have different rules about margin - best to not even go here. ·Get information from the firm about significant website outages, delays, and other interruptions that may affect your ability to execute trades. Make sure that the firm has an alternative way to execute trades. Most will allow phone calls directly to brokers for no additional fees if there is a computer problem. ·Review the firm's privacy and security policies. Determine if your name will be used for mailing lists or other promotional activities by the firm or any other party. You want to steer clear of mailing lists - unless you like receiving spam. Most of the major firms don't sell your info and the only email that you receive from them is your monthly statement information. ·Receive clear information about sales commissions, transaction fees, and conditions that apply to any advertised discount on commissions. Watch out for those hidden fees - some charge a "per share" fee for low cap stocks which can add hundreds of dollars to your transaction. Read the fine print. ·Know how to contact a customer service representative if problems occur. Request prompt attention and fair consideration. Be sure to keep good records to substantiate any problems that may occur. A company's 800-number is usually listed on the front page or the contact page of their web site. Email contact is also provided and they usually have an answer for you in one or two business days. ·Contact your local securities division to verify the registration status and disciplinary history (if any) of the online brokerage firm, or to file a complaint, if appropriate. You can also go to the Securities and Exchange Commission web page for additional information - www.sec.gov

Make an informed decision and make some money with online investing

http://www.pennystockebook.com

The Latest Investment Stocks Online Articles

Mutual Funds

A mutual fund is perhaps one of the most popular means of long term investing and is the vehicle of choice in IRAs and 401k accounts. A mutual fund is basically a way of investing in a pool of different companies in order to minimize risk.

Forex Trading

Forex traders rely on several parameters to conduct their trade. The more successful or experienced traders follow their instincts based on years of experience of trading in the forex market.

Online Stock Trading

With so many services being offered on the net, it is rather difficult to find a site that will best work for you. When choosing one, you have to make sure to look into the fees that they charge, the commissions and of course their reliability.

More articles coming soon!

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