Posts Tagged ‘basics about investing’

CompareBroker hits the ground running in 2010

Sunday, January 31st, 2010
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We are happy to announce that CompareBroker has ramped up plans to hit the market harder in 2010. We specifically are planning to generate simple and easy to understand content for novice investors. Next few months we will be focusing on novice investors as we believe that aspiring investors still have a hard time finding resources that are tailored for them. Usually companies in the business of training such people lose their focus and start generating generic content. Does not help anyone, does it?

So we decided to shed our desire to be part of a big herd of mediocre website and come up with stuff that can truly help the budding investors in recently graduated or about to graduate college kids for example.

In order to accomplish this goal, we have hired additional analysts who are dedicated to study the market trend from the perspective of new and aspiring investors and generate tools and articles that will help such audience. Let me take this opportunity to showcase a few sample posts made by CompareBroker analysts in past week or so:

1. I have seen different companies posting articles about how to select your broker. One point that such articles fail to account for is the fact that new investors need not understand the entire stock market industry. All they need is just couple of suggestions… they are not interested in researching which tools to use. Its our job to do the research on behalf of them. That is exactly what we have done in the following example: Simple Guide to Choose a Brokerage Firm

2. We should be lookout for the recent development in the industry and any significant update has to be brought to the attention of concerned people. Lightspeed trading recently slashed their minimum balance requirement further. Now Lightspeed is the top choice for day trading community and with their minimum at just 1,000USD, they have become a irrestibable choice. Such a news needs to be shared with our investor community, so we decided to dedicate an article about it: Lightning fast Lightspeed Trading becomes even cheaper On that note, Lightspeed is currently offering 10,000$ cash back in the trading fees, can you believe that? Check out that insanely amazing offer

Online Stock, Options and Futures Trading

At the end I would like to conclude with wishing everyone a happy trading and prosperous year ahead.

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Posted in CompareBroker, How to choose a brokerage firm, Learn how to invest, Uncategorized | No Comments »

How to invest stocks: investing basics

Tuesday, September 29th, 2009

Investment is a science. Anyone thinking they can come into the market without knowing the investing basics and  start investing and make money is someone who is going to be broke very quickly. It is important that an investor knows about basics about investing such as earnings per share, the price/earning ratio and book value so that they can know what they are getting into and what kind of return they are going to get.
Earnings per Share

The earnings per share are the earnings that you will receive on your initial investment. Companies are required in the United States to report the earnings per share on their income statement.
It is possible to determine the earnings per share quite easily using some simple calculations.

For the basic formula, use this:
Earnings per Share =  Profit/Weighted Average Common Shares
For the net income formula, use this:
Earnings per Share =  Net Income/Weighted Average Common Shares
For the continuing operations formula, use this:
Earnings per Share = Income from Continuing Operations/ Weighted Average Common Shares

Book Value
The book value, or carrying value as it is sometimes called, is the value of an asset according to its balance sheet. With assets, the value is based on the original cost of the asset, minus the deprecation, as well as the amortization costs against it. To determine the book value of a company, you need to take its total assets and subtract its intangible assets and liabilities. In the stock market, book value is used as a value metric that determines the lowest point for a stock price if it were in a worst-case scenario. This is because when a business is completely liquidated, the book value is what is remaining after all debts and other payments have been paid. Investors will also use the book value per share to determine earnings when the reconciliation of the opening value and closing value has been done.

Price/Earning Ratio

The price/earnings ratio of a stock determines the price paid per share, in relation to the net income or profit earned by the company per share. If a company has a high price/earning ratio, this means that the stock is more expensive because investors pay more for each unit of net income. The price/earnings ratio will show the investor demand for a company share, allowing individuals to see where the company’s value may go, and whether or not it is a good investment.

It is important to remember that shares in a company are determined by several factors including the market supply and demand, the company’s future performance, the company’s recent performance, the risk in the company and the prospects for companies of this type in that sector. In order to determine the price/earnings ratio, an investor will divide the price of one share in the company by the profits earned by the company per share. This means that if the stock rises in value, but the earnings stay the same or go down, then the price/earnings ratio will go up.

Investing is something that can help you build up your savings and help you live a retirement that you can really enjoy. However, it is important that all new investors take the time to learn how to get the most out of their investments, and to ensure they invest safely. By knowing the concepts of book value, earnings per share and price/earnings ratio, you can ensure your investing is safe and planned out.
Further Readings:

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Posted in CompareBroker, investing stocks and bonds, online broker commissions, share trading offers | 4 Comments »