Archive for January, 2009

Developing a Personal Savings Plan
(includes calculator)

There are many reasons why everyone should develop and stick to a savings plan. Unfortunately, survey data suggests that most of us do not have what most experts would consider an adequate level of savings, and no plans for building such an emergency reserve. Personal Finance begins with effective planning to have your [...]

The Cash Ratio and Stock Investing (includes calculator)

The Cash Ratio provides an indication of a company’s liquidity by measuring the amount of cash, cash equivalents and investments to cover current liabilities. The measure provides investors with a means of determining how quickly the company could satisfy its outstanding liabilities through the liquidation of its cash assets

The Importance of Revenue Growth in Stock Investing

A company’s expected revenue growth is one of the most important factors investors use in determining the potential future stock price of that company. The value of common stocks is, of course, closely tied to the earnings power of the company, so an understanding of the company’s growth potential for both the near and long-term [...]

The Benefits of Choosing a Roth IRA

A Roth IRA is an individual retirement plan that is similar to a traditional IRA in many ways. One of the primary differences, though, is that contributions to a Roth IRA are not tax-deductible and the qualified distributions from a Roth IRA account are tax-free. Like other retirement accounts, non-qualified distributions are subject [...]

Definition of a Secular Bear Market

A secular market trend is a long-term trend that usually lasts a decade or longer. Secular markets are seen not only in stocks, but also in currency, commodity and bond markets. Where a bull or bear market is driven by business cycles, a secular market is longer term, and usually driven by strong, [...]

Book Value Per Share and Value Investing

Investors often want to know the book value of a common stock to understand what they would receive as payment for each share with regard to the worth that is shown on the company balance sheet. In cases where a company is being liquidated, the book value is used at to pay off company shareholders. [...]

The Super Bowl Indicator and Stock Market Performance

The Super Bowl Indicator is based on the theory that if a team from the AFC division (the old AFL) wins, the stock market is destined to decline in the coming year. A win from the NFC division (the old NFL) indicates that the market is bound for a rally in the year ahead. [...]

The Bottom Fisher’s Stock Market Strategy

A stock market “bottom fisher” is an investor who looks to find bargains in stocks whose prices have recently declined. Most bottom fishers subscribe to the theory that, while investors may typically under-react to the bad news or poor performance surrounding a company, over time they tend to over-react, leading to significant opportunities to [...]

Recession and Defensive Stock Investing

A Defensive Stock is a stock that offers its investors stable earnings and a consistent dividend, regardless of the state of the stock market and the economy. These stocks tend to outperform the market during economic downturns but often under-perform during economic expansion. A defensive stock typically has a beta of less than [...]

Earnings Yield and Value Investing

The Earnings Yield is the ratio of a company’s last twelve months of earnings per share to its stock price. The result is an estimate of how much in earnings stockholders can expect to receive for each dollar paid for the stock. The earnings yield is the inverse of the Price/Earnings (P/E) ratio and [...]