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Charting the Future: An Elliott Wave ApproachTechnical Analysis of Rajesh Exports Using Elliott Wave Theory Monthly Time Frame Analysis Elliott Wave Count and Structure: - The monthly chart of Rajesh Exports shows a clear Elliott Wave pattern, suggesting the completion of a corrective wave (C) of a larger degree wave ((2)) in Black, implying that a new bullish impulse is likely to begin wave ((3)) in Black. - The recent price action indicates the end of Wave (C), part of a larger correction that followed a significant impulse wave (5) earlier of wave ((1)) in Black. - This suggests that the stock is about to start a new bullish cycle, labeled as Wave (1) in Blue of a new impulse higher Primary degree wave ((3)) in Black. Bullish Divergence: MACD: The price shows hidden bullish divergence with the MACD, as the MACD line forms higher lows while the price makes lower lows on Monthly time frame. RSI: Similar hidden bullish divergence is observed with the RSI too on monthly time frame, reinforcing the bullish outlook. Daily Time Frame Analysis Bullish Divergence: MACD: The price shows bullish divergence with the MACD, with the MACD line forming higher lows while the price forms lower lows. RSI: The RSI also shows bullish divergence, adding further weight to the bullish scenario. Trigger Point: Trendline Breakout: The daily chart indicates a trendline breakout accompanied by a significant increase in volume. This breakout suggests a strong bullish sentiment and confirms the start of a new upward trend. Invalidation Level: The invalidation level for this bullish scenario is set at 261. If the price falls below this level, the bullish wave count would be invalidated. Targets: According to Elliott Wave Theory, the third wave (3) is typically the most powerful. Using the Fibonacci extension, the 161.8% target of Wave (1) places the possible price target near or above 1800. Summary Elliott Wave Count: Indicates a potential start of a new bullish impulse wave. Bullish Divergence: Both MACD and RSI on the daily and monthly charts show bullish divergence. Trendline Breakout: Confirmed with high volume, suggesting strong upward momentum. Invalidation Level: 261 Target: 161.8% Fibonacci extension of Wave (1) projects a target near or above 1800. The overall analysis suggests that Rajesh Exports is poised for a significant upward movement, with strong bullish indications from both the Elliott Wave counts and technical indicators. I am not Sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Hope this post is helpful to community Thanks RK💕 Disclaimer and Risk Warning. The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
NSE:RAJESHEXPOEducation
by RK_Chaarts
4
Investment or Trade Mindset With ExampleNow looking to this chart, if we have long term vision then my question is "How long ?" and "Why Long?". Many of you are already familiar with technical or fundamental analysis but my point is how to discriminate your mind into two half for a same script or same sector. Coming to the solution: Let's know about benefits -"FAYDA". If we can then we can ride long term and short term both and by hypothetical calculation it will shock will brain like anything else. Personally I have no interest to be biased for long term or short term. I can see only "Munafa" means profit. It's very simple. Step 1: For long term holding hold the script in account "A" And for short term use different account "B" Step 2: Well Define your long term system and short term system and place it in-front of your working table or place. Step 3: Even for analysis use two different drawing. Step 4: Even after doing these all your mind will disturb you. Just take a break of your screen by placing alert on your system. I hope this can help you. Kindly let me know something that I can discuss and share with you. In this way I am also learning. Thank you for reading.
NSE:INFYEducation
by dipanjanxsamanta
1
How does inflation affect the stock market?The world’s financial environment has become incredibly tangled and multifaceted. The global availability of information to investors, particularly in rural areas, thanks to the internet, has caused investor sentiment to shift from an emotional response to an analysis and data-driven one. Inflation serves as a prime example of this. In the past, most individuals viewed inflation as an indication of an unhealthy economy. However, in the present day, investors have become more knowledgeable about economic cycles and are capable of making sound investment decisions at each stage of a country’s economy. Therefore, today, we will discuss inflation in general and evaluate its influence on the stock markets in India. Let’s start with a topic on How does inflation affect the stock market. What is Inflation? In simple words, inflation refers to the gradual increase in the prices of goods and services. As the inflation rate rises, so does the cost of living, resulting in a decrease in purchasing power. As an example, suppose bananas were priced at Rs.100 per kilo in 2010. In an inflationary economy, the cost of bananas would have increased by 2020. Let’s assume that the price of a Banana is now Rs.200 per kilo in 2020. Thus, in 2010, with Rs.1000, you could buy 10kg of Banana. However, in 2020, due to the decrease in purchasing power caused by inflation, you would only be able to buy 5kg of Bananas for the same amount. To understand inflation in detail, let’s have a look at what is the reason behind inflation. So, there are two major factors behind an increase in the rate of inflation in the economy. 1) Demand > Supply One reason for an increase in the inflation rate is when the average income of individuals in an economy rises, and they want to purchase more goods and services. During such times, the demand for these products and services can exceed their supply, resulting in a scarcity of these goods and services. Consequently, buyers are willing to pay more for them, which leads to a general increase in prices. 2) Increase in the cost of production Another reason for an increase in the inflation rate is when the cost of production of goods and services increases due to an increase in the costs of raw materials, labour, taxes, etc. While this leads to an increase in the cost of production, it also causes a decrease in the supply of these goods and services. With the demand remaining constant, the prices tend to increase. Inflation and the Indian Stock Markets: The price of a share in the stock markets is determined by the interplay of demand and supply, which is influenced by a variety of factors, including social, political, economic, cultural, and so on. Anything that affects investors can have an impact on the demand and supply of stocks, and inflation is no exception. Here is a brief overview of the impact of inflation on stock markets: 1. The Purchasing Power of Investors Inflation, by definition, is a rise in the prices of goods and services, and it is also an indicator of the diminishing value of money. Therefore, if the inflation rate is 5%, then Rs.10, 000 today will be worth Rs.9, 500 after one year. If the inflation rate increases to 10%, then the same amount will be worth even less in the future. So, as the inflation rate increases, the purchasing power of investors decreases. This decrease in purchasing power can directly impact the stock market since investors would be able to purchase fewer stocks for the same amount. 2. Interest Rates When the inflation rate rises, the Reserve Bank of India ( RBI ) often increases interest rates for deposits and loans. This move is intended to encourage people to save money and limit excess liquidity, thereby reducing the inflation rate. However, as loans become more expensive, the cost of capital for companies also increases. Consequently, the projected cash flows of companies are valued lower, which can lead to lower equity valuations. 3. Impact on Stocks As the increase in the inflation rate, speculation about the future prices of goods and services can create a highly volatile market environment. Since prices are rising, many investors may speculate that companies will experience a drop in profitability. As a result, some investors might decide to sell their shares, leading to a drop in their market price. However, other investors who remain optimistic about the company’s future profitability may continue to buy these stocks, which can create a volatile environment in the stock market. Value stocks tend to perform well during times of inflation because they are often more established companies with stable earnings and a history of paying dividends, making them more attractive to investors seeking steady returns. In contrast, growth stocks are often newer companies with higher potential for future earnings, but they may not have established cash flows to support their valuations. When inflation rises, investors may become more risk-averse and prioritize stable, predictable returns over potential growth, leading to a decline in demand for growth stocks and a corresponding drop in their market prices. 4. Long-term benefits of increasing inflation rates on stock markets A certain level of inflation is required for an economy to grow, as it encourages spending and investment. A moderate and controlled rise in inflation rates can lead to an increase in the income of the people and help in boosting the economy. However, if the inflation rate goes beyond a certain limit, it can have a negative impact on the economy. Therefore, it is crucial to maintain a balance between inflation and economic growth. Conclusion: Investors should analyse the trend of inflation rates in recent years before making any investment decisions. Sudden spikes in inflation rates may cause uncertainty and volatility in the stock markets, while a gradual and steady rise in inflation rates can provide a conducive environment for businesses to grow and expand, leading to higher stock valuations. Additionally, investors should consider investing in sectors that perform well in an inflationary environment, such as energy, commodities, and real estate. ___________________________ 💻📞☎️ always do your research. 💌📫📃 If you have any questions, you can write me in the comments below, and I will answer them. 📊📌❤️And please don't forget to support this idea with your likes and comment
NSE:TCSEducation
by khushaljain023
What is Dow Theory?The Dow Theory is a financial concept based on a set of ideas from Charles H. Dow‘s writings. Fundamentally, it states that a notable change between bull and bear trend in a stock market will occur when index confirm it. The trend that is recognized is considered valid when there is strong evidence supporting it. The theory states that if two indicators move in the same way, the primary trend that is identified is genuine. However, if the two indicators don’t align, then there is no clear trend. This approach mainly focuses on changes in prices and trading volumes. It uses visual representations and compares different indicators to identify and understand trends. Dow Theory: The Dow Theory originated from the analysis of market price movements and speculative viewpoints proposed by Charles H. Dow. It served as a fundamental building block for technical analysis, especially in a time when modern software-based technical analysis tools did not exist. Robert Rhea’s book “The Dow Theory” thoroughly explores the evolution and significance of the theory in speculative endeavours, closely examining the Wall Street Journal editorials written by Charles H. Dow and William Peter Hamilton in the 19th century. This theory represents one of the earliest efforts to comprehend the market by considering fundamental factors that provide insights into future trends. The main version of the theory primarily focuses on comparing the closing prices of two averages: the Dow Jones Rail (or Transportation) (DJT) and the Dow Jones Industrial (DJI). The premise was that if one average surpassed a specific level, the other average would eventually follow suit. Dow used an analogy to illustrate this concept, likening the market to the ocean. He explained that just as waves rise to a certain point on one side of the beach, waves on another part of the beach will eventually reach that same point. Similarly, in the market, different sectors are interconnected, and when one sector shows a particular trend, others tend to follow suit as they are part of a larger whole. The Paradigms of Dow Theory: To comprehend the theory, it is essential to grasp the various rules formulated by Dow. These principles, often referred to as the tenets of Dow theory, serve as guiding paradigms Three major market trends: The tenets of Dow Theory classify trends based on their duration into primary, secondary, and minor trends. Primary trends can be either upward (uptrend) or downward (downtrend) and can last for months to years. Secondary trends move in the opposite direction to the primary trend and typically last for weeks or a few months. Minor trends, on the other hand, are considered insignificant variations that occur over a shorter time span, ranging from a few hours to weeks, and are considered less significant than the primary and secondary trends. Primary trends have three distinct phases: Bear markets can be divided into three distinct phases: distribution, public participation, and panic. In the distribution phase, there is a gradual selling off of assets by investors. The public participation phase occurs when more individual investors start selling their holdings, leading to a broader decline in the market. The panic phase is characterized by widespread fear and selling pressure, often resulting in a sharp and rapid decline in prices. On the other hand, bull markets experience three phases: accumulation, public participation, and excess. During the accumulation phase, astute investors start buying assets at lower prices, anticipating an upward trend. The public participation phase occurs as more investors join the market and buy assets, contributing to the market’s upward momentum. The excess phase represents a period of exuberance and speculative buying, often marked by overvaluation and unsustainable price increases. Stock market discount everything: Market indexes are highly responsive to various types of information. They can reflect the overall condition of an entity or the economy as a whole. For example, any significant economic events or problems in company management can impact stock prices and cause movements in the indexes, either upward or downward. Trend confirms with volume: When there is an uptrend, trading volume rises and decreases while a downtrend starts Index confirm each other: When multiple indices move in a consistent manner, following the same pattern, it indicates the presence of a trend. This alignment among indices provides a strong signal of market direction. However, when two indices move in opposite directions, it becomes challenging to determine a clear trend. In such cases, conflicting signals make it difficult to deduce a definitive market trend. Trends continue until solid factors imply the reversal: Traders should be careful of trend reversals, as they can often be mistaken for secondary trends. To avoid this confusion, Dow advises investors to exercise caution and verify trends with multiple sources before considering it a genuine reversal. How Does Dow Theory Work in Technical Analysis? The Dow Theory played a crucial role in the development of technical analysis in the stock market and served as its foundational principle. Which, approach to analysis highlights the importance of closely observing market data to identify trends, reversals, and optimal entry and exit points for maximizing profits. As the market is considered an indicator of future performance, the application of technical analysis based on the Dow Theory helps investors make profitable trading decisions by identifying established long-term, mid-term, or short-term trends. By using this approach, investors can gain insights into market dynamics and make informed decisions to enhance their trading outcomes. In conclusion: The Dow Theory has significantly influenced technical analysis in the stock market, serving as a cornerstone for its development and advancement. By analysing the careful examination of market data, this theory helps traders to identify trends, spot reversals, and determine optimal buy and sell points for maximizing profits. The market itself is considered a reliable indicator of future performance, and technical analysis aligned with the Dow Theory assists investors in making profitable trading decisions by detecting established long-term, mid-term, or short-term trends. By using this analytical framework, investors can gain valuable insights into market behaviour and make well-informed choices to improve their trading outcomes. The Dow Theory’s enduring impact continues to guide traders in their pursuit of success in the dynamic world of stock market investing. ___________________________ 💻📞☎️ always do your research. 💌📫📃 If you have any questions, you can write me in the comments below, and I will answer them. 📊📌❤️And please don't forget to support this idea with your likes and comment
NSE:NIFTYEducation
by khushaljain023
High Returns, Low Risk: Unveiling a Winning Investment StrategyI am pleased to introduce a robust long-term strategy that seamlessly combines performance with an enticing risk profile. This strategy involves strategically investing in ETFs indexed on the S&P 500 and ETFs backed by physical gold. Let's delve into the rationale behind selecting these two assets: S&P 500: 1. Automatic Diversification: Instant exposure to a diverse array of companies, mitigating the risk associated with the individual performance of a single stock. 2. Low Costs: ETF management fees are typically low, facilitating cost-effective diversification. 3. Liquidity: Traded on the stock exchange, S&P 500 ETFs offer high liquidity, enabling seamless buying or selling of shares. 4. Historical Performance: The S&P 500 has demonstrated consistent long-term growth, making it an appealing indicator for investors seeking sustained growth. 5. Ease of Access: Accessible to all investors, even those with modest investment amounts, requiring only a brokerage account. 6. Simple Tracking: The S&P 500 index simplifies market tracking, eliminating the need to monitor numerous stocks individually. 7. Dividends: Companies included often pay dividends, providing an additional income stream. 8. Long-Term Strategy: Ideal for investors pursuing a long-term approach, S&P 500 ETFs are pivotal for gradual wealth building. 9. Geographical Diversification: Investing in an S&P 500 ETF offers not just sectoral but also geographical diversification. Despite the U.S. base, many included companies have a global presence, contributing to international portfolio diversification. Moreover, Warren Buffett's 2008 bet, where he wagered $1 million on the passive S&P 500 index fund outperforming active fund managers over a decade, underscores the difficulty even seasoned financial experts face in surpassing the market's long-term return. This further strengthens the notion that choosing an S&P 500-linked ETF can be a prudent and effective investment strategy. Investment in Physical Gold ETFs: 1. Exposure to Physical Gold: Designed to reflect the price of physically held gold, providing direct exposure without the need for physical acquisition, storage, or insurance. 2. Liquidity: Traded on the stock exchange, physical gold ETFs offer high liquidity, allowing investors to buy or sell shares at prevailing market prices. 3. Diversification: Gold's unique reaction to market dynamics makes it a valuable diversification asset, potentially reducing overall portfolio risk. 4. Lower Costs: Compared to physically buying gold, investing in physical gold ETFs proves more cost-effective in terms of transaction costs, storage, and insurance. ETF management fees are also relatively low. 5. Transparency: Managers regularly publish reports detailing the gold quantity held, ensuring transparency about underlying assets. 6. Accessibility: Physical gold ETFs offer easy market access without the need for physical possession, appealing to investors avoiding gold storage and security management. 7. Gold-backed ETFs: These ETFs physically hold gold as the underlying asset, with investors often having the option to convert their shares into physical gold. After extensive research and backtesting across diverse ETFs covering various asset classes, including bonds, real estate, commodities, and stocks of financially stable companies, my findings notably highlight a standout option during times of crisis: physical gold ETFs. The strategy hinges on leading indicators, powerful economic tools. Leading Indicators: Leading indicators, or forward indicators, are crucial tools in economics and finance for anticipating future trends. In contrast to lagging indicators, which confirm existing trends, leading indicators provide early signals, aiding informed decision-making based on anticipated economic developments. Key characteristics include: Trend Anticipation: Early insight into upcoming changes in economic activity, facilitating preparedness for market developments. Responsiveness: Quick reactions to economic changes, sometimes preceding other indicators. Correlation with the Economy: Association with specific aspects of the economy, such as industrial production, consumer spending, or investments. Examples include: • Housing Starts: Providing early indications of the real estate market and construction investments. • Net New Orders for Durable Goods: Indicating business investment intentions and insights into the manufacturing sector's health. • US Stock Prices: Considered a leading indicator reflecting investor expectations. • Consumer Confidence: Measuring consumer perceptions and influencing consumer spending. • Purchasing Managers' Confidence and Factory Directors: Offering insights into production plans and future economic trends. • Interest Rate Spread: Indicating economic expectations and influencing borrowing and investment decisions. Returning to the strategy, I leverage entry points calculated by a meticulously developed strategy incorporating leading indicators applied to the SPY chart. The achieved performance of 3496% since 1993, with 15 closed trades, significantly surpasses a buy-and-hold position yielding 1654% in performance. Notably, the maximum drawdown is 5.44%, a stark contrast to the over 50% drawdown seen in an investment in the S&P 500. Upon the indicators signaling the end of the long position, I close my SPY positions and transition to positions in physical gold ETFs. In our example, choosing the GLD ETF yields a performance of 173%, adding to our total performance. While the maximum drawdown, considering the addition of the investment in physical gold ETFs, is 17.65%, slightly higher than the drawdown on the strategy applied to the SPY, it remains impressive for such a prolonged period. Now, if we conduct the backtest since 2007: SPY : performance of 751 %, max drawdown of 4.02 % GLD : Performance of 153 % Since 2015: SPY : performance of 131 % GLD : Performance of 37 % Disclaimer: The information shared is for educational purposes only and is not financial advice. Investing involves risks, and past performance is not indicative of future results. Consult with a qualified financial advisor before making investment decisions. The author is not liable for any financial losses incurred.
AMEX:SPYEducation
by Julien_Eche
6
Value InvestingValue Investing - Unearthing Hidden Gems in the Market Introduction In the world of investing, where trends and market sentiments often drive decision-making, value investing stands out as a timeless strategy embraced by legendary investors. Value investing involves searching for undervalued assets that have the potential to deliver substantial returns in the long run. In this blog post, we will delve into the art of value investing and how it allows investors to uncover hidden gems in the market. Understanding Value Investing Value investing is a strategy that seeks to identify assets trading at prices below their intrinsic value. These assets may be temporarily undervalued due to market fluctuations, unfavorable sentiment, or lack of attention from investors. Value investors believe that the market will eventually recognize the true worth of these assets, leading to price appreciation and potential capital gains. The Principles of Value Investing Intrinsic Value Assessment: Value investors analyze the fundamental strengths and weaknesses of a company or asset to estimate its intrinsic value. Fundamental analysis involves evaluating financial statements, earnings, cash flows, and competitive advantages. Margin of Safety: A key principle of value investing is the concept of a margin of safety. Investors aim to buy assets at prices significantly below their calculated intrinsic value to provide a cushion against potential errors in estimation. Patience and Long-Term Perspective: Value investing requires patience and a long-term perspective. It may take time for the market to recognize the undervalued asset's true potential and drive its price higher. Benefits of Value Investing Potential for High Returns: If the market eventually recognizes the true value of an undervalued asset, value investors can reap substantial returns on their investments. Less Susceptible to Market Fluctuations: Value investing tends to be less affected by short-term market trends and sentiments. Investors focus on the underlying fundamentals, which remain relatively stable over time. Contrarian Approach: Value investors often take a contrarian approach, going against prevailing market sentiments. This allows them to find opportunities that others might overlook. Key Strategies for Value Investing Stock Screening: Use stock screening tools to identify companies with low price-to-earnings (P/E) ratios, low price-to-book (P/B) ratios, and strong financials that indicate potential undervaluation. Focus on Dividends: Seek out companies with a history of paying dividends, as this may be a sign of financial stability and value. Avoiding "Value Traps": Be cautious of companies facing structural challenges that may not recover their intrinsic value over time. Conclusion Value investing is a time-tested strategy that has proven successful for legendary investors like Warren Buffett and Benjamin Graham. By focusing on the underlying fundamentals of undervalued assets and exercising patience, value investors can unearth hidden gems in the market and build a portfolio with the potential for significant long-term returns. Embrace the principles of value investing, conduct thorough research, and let your discerning eye lead you to those overlooked opportunities. As you refine your value investing skills, remember that great investment opportunities may sometimes be hidden in plain sight. Happy hunting for hidden gems in the market, and may the strategy of value investing guide you to prosperous investment decisions!
NASDAQ:TSLAEducation
by MindOverMarket
2
The Power of PatienceThe Power of Patience: Long-Term Investing Introduction In the fast-paced world of investing, where market volatility and hype can easily sway decisions, there's one timeless lesson that stands the test of time: the power of patience in long-term investing. In this blog post, we will explore the significance of adopting a long-term investment approach and the benefits it offers to investors who embrace patience as their ally in wealth-building. Understanding Long-Term Investing Long-term investing is an investment strategy focused on holding assets for an extended period, typically years or even decades, to capitalize on the power of compounding and ride the wave of the market's long-term growth. Unlike short-term trading, which aims for quick gains, long-term investing takes a patient and steady approach, emphasizing fundamental analysis and faith in the underlying value of assets. The Benefits of Patience in Long-Term Investing Harnessing the Power of Compounding: Patience allows investors to benefit from the magic of compounding, where investment returns generate additional returns over time. Compounding can significantly amplify wealth accumulation, especially when reinvesting dividends and capital gains. Weathering Market Volatility: Financial markets are inherently volatile, with short-term fluctuations driven by various factors, including economic news and geopolitical events. By staying patient and maintaining a long-term perspective, investors can ride out market fluctuations without being swayed by short-term noise. Reducing Transaction Costs: Frequent trading incurs transaction costs, such as brokerage fees and taxes, which can eat into returns. Long-term investors minimize these costs by holding assets for more extended periods, leading to better overall returns. Opportunity to Invest in Growth: Long-term investors have the luxury of being less concerned about short-term market movements. This freedom allows them to invest in growth-oriented assets and industries with the potential for substantial long-term gains. Benefiting from Dividends: Patience pays off when it comes to dividend investing. Many established companies offer regular dividends to shareholders. By holding on to these stocks for the long term, investors can enjoy a consistent income stream. Keys to Successful Long-Term Investing Invest in Strong Fundamentals: Focus on companies with solid financials, strong management teams, and a competitive advantage in their industries. Fundamental analysis provides insights into the long-term viability of potential investments. Diversify Your Portfolio: Diversification is a critical risk management tool. Spread your investments across different asset classes, sectors, and geographies to reduce the impact of individual asset volatility on your portfolio. Avoid Emotional Decision-Making: Emotions can lead to impulsive decisions in the face of market fluctuations. Stay committed to your long-term investment plan and avoid making knee-jerk reactions to short-term market movements. Regular Portfolio Review: While long-term investing involves holding assets for years, it's essential to periodically review your portfolio's performance and reassess your investment thesis. Conclusion Long-term investing with patience as its cornerstone is a time-tested strategy that has proven successful for countless investors over the years. By embracing the power of compounding, weathering market volatility, and staying committed to sound investment principles, patient investors have the potential to build substantial wealth and achieve their financial goals. So, take a deep breath, adopt a long-term perspective, and let the power of patience work its magic on your investment journey. Happy investing!
NASDAQ:TSLAEducation
by MindOverMarket
Understanding Market Corrections:Definition & Key ConsiderationsInvesting in the stock market has the potential to generate substantial wealth over the long term, although it comes with inherent risks. One notable obstacle that investors frequently encounter involves safeguarding their capital during periods of declining stock prices. When the market undergoes a downturn, the inclination to panic and sell off investments to evade additional losses can be strong. However, this reactive approach often results in even greater financial setbacks and hinders the ability to capitalize on future market rebounds. In this comprehensive article, we will delve into the concept of a market correction and delve into various strategies that can assist investors in preserving their capital amidst market downturns, enabling them to emerge stronger when the market inevitably recovers. Market Correction: A Comprehensive Explanation In the realm of financial markets, a market correction is a notable event characterized by a substantial decline in the value of a financial instrument. This decline typically ranges between 10% to 20% and can encompass individual stocks of a specific company or even extend to encompass entire market indices comprising a vast array of companies. The duration of a correction can vary significantly, ranging from as short as a single day to as long as a year, with the average duration spanning approximately four months. Market corrections can be triggered by a myriad of factors, each with its own unique catalyst. These factors can range from a company's disappointing financial performance and weak earnings report to more extensive global geopolitical conflicts. In some instances, corrections may occur seemingly without any discernible external cause. It is worth noting that market corrections are not exclusive to stocks alone. They can manifest in various other financial instruments such as commodities like oil, platinum, and grain, as well as currencies, funds, specific industry sectors, or even the entire market as a whole. This exemplifies the widespread impact that a correction can have across diverse segments of the financial landscape. To illustrate the significance of a market correction, let's consider an example from recent history. In the year 2018, the prices of over 500 companies experienced a decline of 10% or more. This widespread correction exemplifies how fluctuations in market conditions can influence a substantial number of companies simultaneously, affecting their valuation and investor sentiment. In conclusion, a market correction denotes a notable decline in the value of financial instruments, with the range typically falling between 10% to 20%. The causes behind these corrections can be diverse and encompass factors ranging from company-specific issues to broader global conflicts. Moreover, corrections can impact various financial instruments and market segments, underscoring their potential for wide-reaching consequences within the financial landscape. Example : AMZN stocks Daily chart showing a correction in 2018 - 2020 Market corrections are not uncommon events within the realm of financial markets. On average, a decline of 10-20% in the stock market transpires approximately once a year. These corrections, characterized by a significant decrease in stock prices, serve as reminders of the inherent volatility and fluctuations present in the market. While corrections of 10-20% occur relatively frequently, more profound market declines exceeding 20% are less frequent, transpiring approximately once every six years. These substantial corrections are often referred to as market collapses, signifying a more severe and prolonged downturn. One illustrative example of a market collapse occurred in response to the global pandemic outbreak in March 2020. The COVID-19 pandemic triggered a swift and severe decline in stock markets worldwide, leading to a precipitous drop of approximately 38% within a matter of days. This extreme correction exemplifies the impact of unforeseen events and external factors on market stability and investor sentiment. It is important to recognize that market corrections and collapses are not solely confined to a particular asset class or geographic region. They can have a broad-ranging effect, transcending national boundaries and impacting various financial instruments, indices, and markets worldwide. In summary, market corrections, defined by significant declines in stock prices, are regular occurrences, transpiring approximately once a year with a magnitude of 10-20%. Market collapses, on the other hand, encompass more profound declines exceeding 20% and typically transpire once every six years. These events serve as reminders of the dynamic nature of financial markets and their vulnerability to various factors, such as the recent pandemic-induced collapse in 2020, which had a profound impact on global markets. Example : SPX500 / US500 stocks Daily chart showing a correction in 2020 Investors who adopt a long-term investment strategy tend to navigate corrections with relative ease, primarily due to their extended investment horizon. By committing their funds for a substantial period, typically ranging from 5 to 10 years, these investors are less likely to be perturbed by temporary price declines. On the other hand, individuals who rely on leverage or engage in short-term trading bear the brunt of corrections, experiencing greater challenges and losses. The impact of a correction can be readily observed by examining the chart depicting the historical performance of any given company. By selecting the annual or five-year chart display, one can identify specific time periods when the asset's value experienced temporary declines. Additionally, it is crucial to consider the decrease in stock price subsequent to the ex-dividend date, commonly referred to as the dividend gap. It is essential to note that the dividend gap phenomenon is distinct from a correction and should be treated as such. What Causes A Correction? A correction in the stock market can be triggered by a multitude of factors and events that impact stock prices. These events can range from speeches given by company executives, investor reports, pandemics, regulatory changes, economic sanctions, natural disasters like hurricanes and floods, man-made disasters, to high-level meetings of world leaders. Even the most stable companies can experience declines in their stock prices due to these events. It is important to recognize that human behavior also plays a significant role in causing market corrections. The stock market is inherently driven by human participation and investor sentiment, which can sometimes lead to corrective actions. For instance, if a popular figure like Elon Musk garners significant attention and support, investors may pour money into his company beyond its actual earnings. Eventually, the overvaluation of such a "hyped" company may result in a decline in its stock price. Furthermore, investors often attempt to follow trends in the market. When a particular stock shows an upward trajectory, more people tend to invest in it, thus increasing its demand and subsequently driving up its price. However, as the price reaches a certain peak, some investors choose to sell their holdings to realize profits. This selling pressure can initiate a correction, causing those who entered the market later to incur losses. Therefore, blindly chasing market trends without careful analysis may prove detrimental. Additionally, corrections can exhibit seasonal patterns. For example, during the summer months, prior to holidays or extended weekends, investor participation in trading may decrease. This reduced trading activity leads to lower liquidity in stocks, creating an opportunity for speculators to exploit the situation. Such periods often witness sharp price fluctuations, potentially resulting in stock prices declining by 10-20%. It is crucial to understand that corrections are a natural part of the market cycle, and it is neither productive nor feasible to fear them indefinitely. The market cannot sustain perpetual growth, and corrections serve as necessary adjustments. By acknowledging their inevitability, investors can adopt strategies that are mindful of market dynamics and position themselves accordingly. How Long Do Corrections Last? Between the years 1980 and 2018, the US markets experienced a total of 37 corrections, characterized by an average drawdown of 15.7%. These corrections typically lasted for approximately four months before the market began to recover. Consider the following scenario: an investor commits $15,000 in January, experiences a loss of $2,355 during the correction, and by May, witnesses their portfolio rebounding to $15,999, based on statistical data. However, it is important to note that outcomes may deviate from this pattern. It is worth noting that the magnitude of a stock's decline directly impacts the duration of its recovery. As an illustration, during the financial crisis of 2008, US stocks tumbled by approximately 50%. The subsequent recovery of the stock market extended over a period of 17 months, primarily attributed to the active support provided by the US government and the Federal Reserve. This underscores the notion that severe market downturns necessitate more prolonged periods for recuperation, even with significant intervention from regulatory bodies. Dow Jones Industrial Average index drop in 2008 The timing of a market correction is often challenging for financiers and experts to predict with certainty. In retrospect, it becomes clear when a correction started, but identifying the precise moment beforehand is a complex task. Taking the aforementioned example of the market collapse in October 2007, it was not officially acknowledged until June 2008. This highlights the inherent difficulty in pinpointing the onset of a correction in real-time. Following a correction, the market's recovery period can vary significantly. In some instances, the market may swiftly regain stability and resume an upward trajectory. However, in other cases, it may take several years for the market to fully recover from a correction. The duration of the recovery depends on a multitude of factors, including the severity of the correction, underlying economic conditions, government interventions, and investor sentiment. Hence, it is crucial to recognize that financiers and market participants can only definitively determine the start and extent of a correction in hindsight. The future behavior of the market after a correction remains uncertain, and it is possible for the market to swiftly recover or take a considerable amount of time to regain stability. How To Predict A Correction Predicting the precise timing, duration, and magnitude of a market correction is inherently unreliable and challenging. There is no foolproof method to accurately forecast when a correction will occur, when it will conclude, or the extent to which asset prices will change. Some economists and analysts attempt to predict market trends by employing various theories. For instance, Ralph Elliott formulated the Elliott Wave Theory, which posits that markets move in repetitive waves. By determining the current phase of the market—whether it is in an upward or downward wave—one could potentially profit. However, if such theories consistently yielded accurate predictions, financial losses during corrections would be virtually nonexistent. It is crucial to acknowledge that market corrections are an inherent and inevitable part of market cycles. While attempting to predict corrections may be enticing, it is important to remember that they will inevitably occur, regardless of how long it has been since the previous one. Relying solely on the absence of a correction for an extended period as a basis for investment decisions warrants careful consideration and analysis rather than being treated as a definitive indicator. Advantages And Disadvantages Of Market Correction Advantages and disadvantages of market corrections can be summarized as follows: Advantages of a market correction: 1) Buying opportunities: Market corrections often present favorable buying opportunities for investors. Lower stock prices allow investors to acquire shares at discounted prices, potentially leading to long-term gains when the market recovers. 2) Rebalancing opportunities: Corrections can prompt investors to rebalance their portfolios. Selling overvalued assets and reinvesting in undervalued ones can help optimize investment returns and maintain a diversified portfolio. 3) Expectation adjustment: Market corrections can serve as a reality check, helping investors reassess their expectations and risk tolerance. This can lead to more informed investment goals and strategies. Disadvantages of a market correction: 1) Financial losses: Market corrections can result in substantial losses, particularly for investors who panic and sell their investments at lower prices. Reacting emotionally to market downturns may amplify the negative impact on portfolios. 2) Economic implications: Market corrections can have broader economic repercussions. They may lead to job losses, reduced consumer spending, and slower economic growth, potentially affecting industries and sectors beyond the financial markets. 3) Psychological impact: Market corrections can trigger fear, uncertainty, and anxiety among investors. These emotions may drive impulsive decision-making, such as selling investments hastily or hesitating to re-enter the market when conditions improve. It is important for investors to carefully evaluate the potential advantages and disadvantages of market corrections and consider their own risk tolerance, investment goals, and long-term strategies when navigating such market events. What Should You Do During A Correction? Correction can make an investor richer or poorer or have no effect at all. The impact of a market correction on an investor's wealth depends on their actions and decisions during that period. It is impossible to predict with certainty the duration or direction of asset value changes during a correction. However, there are general tips that can help investors navigate through a correction and potentially safeguard their finances: 1) Maintain a calm and rational mindset: During a correction, it is crucial to approach investment decisions with a cool head. Instead of making impulsive moves, take the time to understand the underlying causes of the correction and consider expert opinions and news. 2) Avoid excessive borrowing: It is advisable not to use borrowed money for investments, especially during a correction. This reduces the risk of incurring debts and potential losses. For beginners, it is often recommended to limit investments to the funds available in their brokerage accounts, particularly during a correction. 3) Assess company fundamentals: Evaluate the fundamental strength of a company by analyzing key metrics and ratios. Comparing a company's value with others in the same industry can provide insights. If a company is not overvalued, it may indicate that there is no fundamental reason for a correction, and its value may likely recover in due course. 4) View the correction as a buying opportunity: Prominent investors like Warren Buffett and Nathan Rothschild have emphasized that corrections present excellent opportunities for investment. If a stock's price has fallen, consider purchasing it based on the company's performance rather than solely focusing on the size of the discount. Maintaining some savings in cash allows for timely investments in undervalued assets. 5) Acknowledge the normalcy of corrections: It is important to recognize that corrections are a regular part of market cycles and serve as tests of an investor's composure. Following an investment strategy that includes provisions for investing during periods of 10-20% lower stock prices can help protect savings and optimize long-term returns. By adhering to these general tips and maintaining a disciplined investment strategy, investors can better navigate market corrections and potentially preserve and enhance their financial well-being. Conclusion In summary, market corrections are an intrinsic aspect of the stock market's ebb and flow, and it is essential for investors to anticipate and navigate them effectively. During such periods, the inclination to succumb to panic and hastily sell investments can be strong. However, maintaining composure and adhering to prudent strategies that safeguard capital are crucial for weathering corrections and emerging stronger when the market inevitably rebounds. While corrections present challenges, they also offer advantageous opportunities, such as the ability to acquire stocks at discounted prices. Conversely, the potential for substantial losses exists, emphasizing the importance of a measured approach. A long-term investment strategy, rooted in sound analysis rather than reactionary emotions, serves as a vital compass for surviving corrections. By focusing on the broader picture and resisting the temptation of short-term market fluctuations, investors can position themselves for long-term success amidst the natural ebb and flow of the market.
Editors' picks
NASDAQ:TSLAEducation
by FOREXN1
12
Peter Lynch's Updated Investment StrategiesPeter Lynch's Investment Model: Adapting the Wall Street Legend's Strategies to Today's Markets As someone who has been inspired by Peter Lynch, another of my investing mentors, I am excited to explore how his strategies can be adapted to the ever-evolving financial landscape. In this article, my goal is to share valuable insights that fellow investors can apply in today's dynamic markets while still drawing from the wisdom of this Wall Street legend. This is a follow-up to the article I wrote about Warren Buffett's investment model, as both figures have greatly influenced my investment approach. Peter Lynch has long been regarded as one of the most successful mutual fund managers in history. His investment strategy, which focuses on growth and finding "tenbaggers" (stocks that can increase in value tenfold), has proven to be highly effective. However, as the financial landscape evolves, it's essential to examine the continuing effectiveness of his approach in today's markets. This article will explore key aspects of Lynch's investment model and assess which elements remain relevant and which may have lost their edge. Section 1: The Core Principles of Peter Lynch's Investment Model 1.1 Growth investing and finding "tenbaggers" a. Earnings growth: Lynch focuses on companies with strong earnings growth potential, as this is often the primary driver of stock price appreciation. b. Market-beating returns: By identifying "tenbaggers," investors can achieve market-beating returns and significantly grow their portfolios. c. Industry trends: Lynch pays close attention to emerging trends and industries, which can provide opportunities to invest in high-growth companies. 1.2 Investing in what you know a. Understanding the business: Lynch emphasizes the importance of investing in companies whose business models are easy to understand, increasing the likelihood of making informed decisions. b. Personal experience: Investors can leverage their personal experience and knowledge to identify promising investment opportunities. c. Thorough research: Lynch advocates for thorough research and due diligence before making any investment decisions. 1.3 Valuation and price-to-earnings ratio (P/E) a. Relative valuation: Lynch often uses the P/E ratio to compare the valuation of different companies within the same industry. b. Earnings growth and P/E ratio: Lynch's strategy focuses on finding companies with high earnings growth rates trading at reasonable P/E ratios. c. PEG ratio: The price-to-earnings-to-growth (PEG) ratio is a key metric in Lynch's approach, which compares a company's P/E ratio to its expected earnings growth rate. Section 2: The Changing Landscape: Points of Lynch's Strategy Losing Effectiveness 2.1 Overemphasis on P/E ratio a. Limitations of P/E ratio: The P/E ratio may not accurately capture the value of companies with significant intangible assets or those experiencing temporary earnings fluctuations. b. Alternative valuation methods: Investors should consider incorporating alternative valuation methods, such as discounted cash flow (DCF) analysis and enterprise value-to-EBITDA (EV/EBITDA) ratio, to better assess a company's true worth. 2.2 Rigid focus on growth investing a. Cyclical nature of growth stocks: Growth stocks can be more susceptible to market fluctuations and economic downturns, making them potentially riskier investments. b. Value investing opportunities: A rigid focus on growth investing may cause investors to overlook undervalued stocks with strong fundamentals. c. Portfolio diversification: Balancing growth and value stocks can help manage risk and enhance overall portfolio performance. Section 3: Adapting Peter Lynch's Investment Model to Today's Markets 3.1 Incorporating technology and disruptive innovation a. Embracing technology: Investors should seek out companies with innovative technologies that have the potential to become industry leaders in their respective sectors. b. Identifying disruptive companies: The rapid pace of technological innovation has led to disruptive companies reshaping entire industries, with early investors often reaping substantial rewards. c. Balancing growth potential and risk: Investing in technology and disruptive companies may carry higher risks, but also the potential for greater rewards, which can be balanced through careful portfolio diversification. 3.2 Expanding the investment horizon a. Global opportunities: By investing in companies from diverse regions, investors can capitalize on global growth opportunities and reduce dependence on specific markets. b. Mitigating regional risks: Diversification across geographies helps to mitigate risks associated with regional economic downturns or political instability. c. Tapping into emerging markets: Investors can seek opportunities in emerging markets with strong growth potential and favorable demographic trends, further diversifying their portfolios. 3.3 Incorporating ESG factors and long-term sustainability a. Aligning with growth investing: Companies with strong ESG performance are more likely to be sustainable in the long term, aligning well with Lynch's growth investing approach. b. Improved risk management: Incorporating ESG factors into the investment decision-making process can help identify potential risks and opportunities that may not be apparent through traditional financial analysis. c. Attracting investor interest: As ESG investing gains traction, companies with strong ESG performance may attract increased investor interest, potentially driving higher valuations and returns. Peter Lynch's investment model has stood the test of time, but in today's dynamic and rapidly changing financial landscape, it's crucial to adapt and evolve his principles. By embracing new technologies, diversifying investments, incorporating ESG factors, and expanding the investment toolkit to include passive investing and quantitative analysis, investors can continue to benefit from the wisdom of this Wall Street legend and successfully navigate the complexities of modern markets. The spirit of Peter Lynch's investing philosophy remains relevant, but adapting and tailoring it to the current environment can help ensure continued success in today's investment world.
AMEX:FMAGEducation
by Julien_Eche
What should I look at in the Income Statement?The famous value investor, Mohnish Pabrai , said in one of his lectures that when he visited Warren Buffett, he noticed a huge handbook with the financial statements of thousands of public companies. It's a very dull reading, isn't it? Indeed, if you focus on every statement item - you'll waste a lot of time and sooner or later fall asleep. However, if you look at the large volumes of information from the perspective of an intelligent investor, you can find great interest in the process. It is wise to identify for yourself the most important statement items and monitor them in retrospect (from quarter to quarter). In previous posts, we've broken down the major items on the Income statement and the EPS metric: Part 1: The Income statement: the place where profit lives Part 2: My precious-s-s-s EPS Let's now highlight the items that interest me first. These are: - Total revenue The growth of revenue shows that the company is doing a good job of marketing the product, it is in high demand, and the business is increasing its scale. - Gross profit This profit is identical to the concept of margin. Therefore, an increase in gross profit indicates an increase in the margin of the business, i.e. its profitability. - Operating expenses This item is a good demonstration of how the management team is dealing with cost reductions. If operating expenses are relatively low and decreasing while revenue is increasing, that's terrific work by management, and you can give it top marks. - Interest expense Interest on debts should not consume a company's profits, otherwise, it will not work for the shareholders, but for the banks. Therefore, this item should also be closely monitored. - Net income It's simple here. If a company does not make a profit for its shareholders, they will dump its shares*. *Now, of course, you can dispute with me and give the example of, let's say, Tesla shares. There was a time when they were rising, even when the company was making losses. Indeed, Elon Musk's charisma and grand plans did the trick - investors bought the company's stock at any price. You could say that our partner Mr. Market was truly crazy at the time. I'm sure you can find quite a few such examples. All such cases exist because investors believe in future profits and don't see current ones. However, it is important to remember that sooner or later Mr. Market sobers up, the hype around the company goes away, and its losses stay with you. - EPS Diluted You could say it's the money the company earns per common share. So, I'm finishing up a series of posts related to the Income statement. This statement shows how much the company earns and how much it spends over a period (quarter or year). We've also identified the items that you should definitely watch out for in this report. That's all for today. In the next post, we will break down the last of the three financial statements of a public company - the Cash Flow Statement. Goodbye and see you later!
Editors' picks
NASDAQ:TSLAEducation
by Be_Capy
2
Number of Sunspots and Inflation CYCLESHi friends Today im going to explain about the relationship between Sunspot Numbers and Inflation rate from 1960 to now. so lets start with inventor of this theory : William Stanley Jevons's In 1875 and 1878 Jevons read two papers before the British Association which expounded his famous "sunspot theory" of the business cycle. Digging through mountains of statistics of economic and meteorological data, Jevons argued that there was a connection between the timing of commercial crises and the solar cycle. it called 5.31-Year Cycle too. In the stock market and in the economy, there are both natural frequencies and artificial excitation frequencies. The four-year presidential election cycle is a great example of an excitation frequency, and it has demonstrable effects on stock prices. The schedule of FOMC meetings 8x per year is another possible example of an artificial excitation frequency. When a demonstrable cycle period appears that one cannot tie to some manmade excitation frequency, then the supposition is that it is a "natural" frequency of the economic system. Something about the economy or the market results in an oscillation on a certain frequency which may not have a good outside explanation. Perhaps it is in how money flows. Perhaps it is in how human brains make decisions about surplus and scarcity. It is hard to know. This 5.31-year frequency in the CPIs cycle seems to fall into that category as a natural cycle, because the 5.31-year period does not match any known excitation frequency related to human activity nor the economic calendar. So that makes it probably a natural frequency. In above chart , there does seem to be a relationship between sunspots and the inflation rate. We see lots of instances when the peak of the sunspot cycle coincided with the peak of the inflation rate. There have been spikes in the inflation rate not tied to the sunspot cycle, such as the spike during the Arab Oil Embargo of 1973-74. this examples did, interestingly, come at the halfway point of the sunspot cycle, fitting the half-period harmonic principle(5.31 year cycle). The current rise in inflation fits both the longstanding 5.31-year cycle and the upswing in the sunspot cycle. Solar researchers expect the current sunspot cycle rise to end in July 2025, which is 3 years from now. But the 5.31-year cycle says a top in the inflation rate is expected right now. That would mean seeing the inflation rate bottoming around 2025 just as the sunspot cycle is peaking. Sometimes cycles present us with conflicts that are hard to reconcile. The point of the 5.31-year cycle that we can take away for right now is that the inflation rate should be falling for the next ~2.2 years. But that does not mean we get to zero percent inflation right away. The drops take a while to unfold. Inflation is likely with us for a while, and we have to get used to that idea.
ECONOMICS:USIRYYEducation
by TraderAmin-KZ
2
DCA for beginnersI made a visual explanation investing mid/long-term with DCA and of how effective DCA is and how to do it based on a weekly chart, no matter how much money you got, you can adapt to your capital Understand that this is an example amongst many other and you are not obligated to follow this strategy, it's just to guide if you're new to DCA. It's not a financial advice. also, it's important to understand the market cycles, and know when it's a bullrun, a bear market and an accumulation & expansion phase
Education
by kaiju_crypto
How To Analyze Any Chart From Scratch - Episode 12Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. Today we are going to go over a practical example on HNT, but you can apply the same logic / strategy on any instrument. Feel free to ask questions or request any instrument for the next episode. You can find the previous episodes below "Related Ideas" Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
HEducation
by TheSignalyst
54
How To Analyze Any Chart From Scratch - Episode 7Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. Today we are going to go over a practical example on MANA, but you can apply the same logic / strategy on any instrument. Feel free to ask questions or request any instrument for the next episode. You can find the previous episodes below "Related Ideas" Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
BINANCE:MANAUSDEducation
by TheSignalyst
23
How to Invest in the S&P 500 [FOR DUMMIES]In the investment world everybody expects you to know exactly how to buy into an Index Fund, which makes it very hard to find a good detailed non-outdated resource to learn from. While it’s easy to do once your set up, learning how to from nothing was difficult (at least for me). Before you even think about investing into the S&P 500 you need to know WHY. Because if you don't know WHY your investing into this you will panic sell when its the best time to be buying. Now while this part can be answered by a YouTube video I put some of the main reasons below. - The s&p 500 is a diverse Index Fund. (The term index fund means a portfolio set up for you to invest in.) - The s&p 500 holds the top 500 USA companies. (The diversity in big companies makes it a safe investment in the long term.) - The s&p 500, over a 15-year period, beat nearly 90% of actively managed investment funds. (Meaning us noobies can beat the pros!) - The S&P 500 has always recovered, there are lost decades which the market has stayed down for 10 years but in those 10 years you could be buying every single month! (Dollar Cost Averaging) - With the power of compounding your money will grow exponentially. Now what is Dollar Cost Averaging..? Dollar Cost Averaging is buying roughly equal amounts of an asset per month. Doesn't have to be equal but nothing to different, for example you don't want to buy $500 worth's one month and $1000 worth's another (only spend what you know you can be consistent with in the future). Dollar-cost averaging is a great investing strategy because, in the long term, it can protect the investor (you) from market volatility (up and down movement) and reduce the amount you'll spend buying shares. So, over time, you will end up investing in more assets for less. Now what is compounding..? Compounding is re-investing both your capital gains and dividends in order to get a higher payout the next time around again and again and again.. till your rich. Although with compounding comes a catch; if you panic sell before your desired target you've fell into your own trap, because compounding depends on time, and you just smashed the watch. Plus, you should never panic sell when the market crashes; be happy you’re getting everything on a sale! Now we have reviewed why you should invest into the S&P 500, what dollar cost averaging is, what compounding is, and why panic selling is stupid. But how do you buy it?!? I started by trying a brokerage called Vanguard. (a brokerage company is pretty much a middleman that connects buyers and sellers). I wanted to use Vanguard because I knew that I wanted low purchase fees; low purchase fees are good because in the long term it impacts how much you’re actually investing (less fees = more invested long term). Now let me tell you this, vanguard SUCKS, their customer service is terrible, the website is terrible, and they wouldn't even let me open an account for god’s sake because "their website was down". The only thing good about them is their index funds and low fees. What took me a while to learn was that I can purchase the SAME index funds but with a different broker. Now I do recommend you get an account with Charles Schwab they have real branches you can go to and ask questions in (not just a phone number like Vanguard) plus if you do want to call their wait time isn't over an hour like Vanguard, and their website is user friendly. How to make an account with Charles Schwab..? Search up "Charles Schwab", click on their website, Open an Account, and decide what type of brokerage account you want (if your just one person pick individual), then continue with the steps. If you’re below the age of 18 search up "create a custodial account Charles Schwab" and start from there, you will need your parents SSN, and other info. Now that you have a basic account set up your ready to invest; but wait there's more. You currently have a brokerage account which means your eligible to invest however much you want per year, although once you pull the money out you will be taxed on it based off your tax bracket. Along with your brokerage account you should set up a Roth IRA account. A Roth IRA account is a retirement account in short, your allowed to invest up to $6000 per year into it and once your 50 you can pull it out TAX FREE. (if you pull it out any sooner it will act as a brokerage account and tax you, so don't do that). Making a Roth IRA account requires paperwork which you fill in and then go to one of the many "Charles Schwab Branches" to turn in. You can ask customer support to send you the paperwork to your email which you must print out. This account pretty much assures you will be a millionaire at retirement. Ok I have both accounts.. now how to buy? Click on "trade", make sure you’re on the "Stocks & ETFs" Tab, click the "symbol search bar", and type "VOO" (Vanguard S&P 500 ETF). Now decide on how many shares you want (you can check the price here on trading view). It will have an option to turn on auto-reinvest dividends make sure to click that, & make sure you select "Market Order" so you get filled in immediately then click "order". Always invest the maximum of 6K into your Roth IRA and invest as much as you can into your brokerage account. Every 3 months re-invest your capital gains on both accounts. You can see how much your projected to earn in the future. Search up "compounding calculator" put in how much you’re going to be investing per month, how long, and at a 10% average rate of return. I hope this helps, comment and like. :)
AMEX:VOOEducation
by pastworks
3
Benefits of Long Term Investment 📊 Benefits of Long Term Investment 📊 ━━━━━━━━━━━━━ Reduces Transaction Fees (Cost) Every time you invest, there is a transaction fee incurred. If you invest for a long-term and avoid repeated investments, you save multiple fees. Tax Benefits (Tax) Long-term investments are taxed at rates lower than your income tax bracket. Stability (⚖) Long-term investments exhibit lower volatility compared to short-term investments. Best Saving Option (🧰) Long-term investments serve as a good savings option for post-retirement, future home, or college, education, etc. Compounding (📈) Long-term investments grow at a compound rate of interest. Hence, the gain in this type of interest is substantial. ━━━━━━━━━━━━━
BSE:SENSEXEducation
by dsp21486
Why Trend Lines are so important!Yesterday I put my main setup on the Activision Blizzard with SMA 20,50,100,200; Horizontal Ray and the trendlines. Many would see that in the past the price often had support at the range of 89-90 Dollar and would think that the share price would jump again including with the SMA200 support. But with implementing the Trendline-Function by connecting dots of the lower/higher spikes you get a good understanding in what the trend could looks like. This can be drawn in a timeline of a few years, months or days.
NASDAQ:ATVIEducation
by Chrlstlan
1 Year investment can get into 10X - HISTORY REPEATSMaybe the $ 400,000 Bitcoin dream announced in the analysis of others will come true ! With just a quick look at the status of past trends in Bitcoin, you will notice the price ceiling ( ATHs ) and price correction intervals. In each growth period (with more than +10,000% price increase) it has entered a corrective period and a large amount of growth has been taken from it. The correction time periods are almost the same, so the price floor can be easily discovered and based on the past average time, the end period of this period can be guessed. The point of suspicion here is just the interval when we see another foam in the bitcoin chart due to the corona virus. However, at the beginning of 2022, we will have another low, or at the beginning of 2023, when I know the probability of 2023 is higher. With this theory and by drawing a series of average growths of the past, you can easily realize the dramatic increase that is in front of you. We have just crossed the $ 1.5 trillion market cap, which could easily reach 5 or even 10 this year, which could achieve all of this price growth. So in the long run you win. Do not get involved in short-term emotions. Don't Get into FOMO, Keep Calm & Invest Long-Term
Editors' picks
BITSTAMP:BTCUSDEducation
by SasanSeifi
42
How NOT to Invest Lets me discuss basic human psychology. Most investors only want to invest when stocks are BOOMing and reaching an all time high! Does this sound like you? While most investors avoid stocks when they first begin or when they reach their lows. Some Rules of investing: 1) Buy when the stocks dips at appropriate levels & better yet at early stages - do your due diligence 2) Never buy ATH wait for a pull back or another opportunity (There is always another opportunity) 3) Check RSI Levels (Oversold) & MACD (Cross over downtrend) :: (BASIC TA) 4) Only invest in sound companies that you believe in the long-term 5) Buy the hype sell the news (To an extent) 6) When everybody is talking about it - its time to plan your exit 7) Be an early adopter on the technology bell curve not a late adopter or WORSE a LAGGARD. (Bitcoin @ $1 = Innovator - Bitcoin @ $100 Early Adopter... ect) Example: Chinese EV stocks Here is an example of LI Auto the time to buy was when nobody was talking about EV (Electronic Vehicle stocks) if you perhaps could see the future in these companies & foreign country opportunities. That was the time. Most people rushed in at $50 when the stock was HOT. As you can see the RSI was very overbought & MACD cross over. Now you can buy in at a much more FAIR cost @ 30 & on a 3 point trend line. If you believe in a stock this is the proper way to DCA. There was also a negative news event (big surprise) but I doubt much traction will come of it. Many Americans invest in Chinese stocks. Happy Trading!
NASDAQ:LIEducation
by GlobalHealthWealth
1
The future of Ethereum: The 2nd crypto and king of Dapps In this analysis for you, I will go for you to bring this analysis to discuss what is Ethereum. Ethereum is the 2nd cryptocurrency after of Bitcoin, Ethereum started on 2015 with Vitalik Buterin, He's the Ethereum's Co-Founder and the mission of Ethereum is to become one of the best crypto-solution for our life and leadership of Blockchain. Ethereum is an interesting proyect like Bitcoin to take in our radar, because as Ethereum is go to grow up throught the time, it's a good idea to invest in Ethereum and I like this proyect about their creation of other tokens, blockchain and the one of the blockchain solution to created a decentralized application calles Dapps. Also, in the past year, I havened a proyect to created with Ethereum called Cryptocraft World Revolution, that proyect is based for digital economy to make an easiy user interface with the plattform as created cities decentralized, an economy impery based as our world but using a kind of Blockchain that I wanna to created it. I admire a lot of Ethereum, also I compared this proyect as Cardano, because my own exit strategy for me is accumulate more and more Cardano, but any of Ethereum is another radar to take noticed on this crypto when is explode to reach level never see. That maket cycle is so repeat when Bitcoin was in the $320 USD on 2016. Well guys, that is my analysis on how I see a Ethereum for longest term!!! If you like it to reach the $17,000 USD as target for Ethereum. You can to get a like of this idea!!! Also, I share you in weekly the Elliot Waves Analysis. Look below: Also guys, on the next week, I will going to re-started to making a investment for long-term on cryptocurrencies. And I will started for the news as the community to bring about all of Bitcoin to explain what is Bitcoin, and all about of this money decentralized. And then, analyzed my altcoins that I want to know and making a study's autodidactic.
COINBASE:ETHUSDEducation
by harisonhbn9718
1
Special Analysis for EUR/USDin this technical analysis as education, we see an EUR/USD in long term very bullish. Why? Because there: If you keep watching up, we are in the strong support and a possible formation of Bat armonic pattern bearish or double top, as you want to see, maybe it's has for me a double top, and very strongest because in the past in the accumulation of 2014-2017 we having a bullish trend until the 2018. But, so, we are in the possible bull run to form in long term, because indicators in the RSI show us a bullish divergence in Monthly, and this is a good indicator for this currency EUR. I see an Euro very optimistic their economies and there are a good indicators so what EUR is could be the strengthen in the long term. In weekly, we have a very curious patter, because we are from August 2018 in the descendent and bearish channel from $!.17 USD from $!.06 USD, and then, in the RSI if you see, we are having in the ascendent channel in the RSI, and then, it's a good indicator what the force is strenghten on the price action. Also, as we broke up the descedent channel, we can to see a possible proyection and target again from the level of $1.24 USD. So, that it's a study of elliot wave analysis so we need to recover this information to take in our hand. And Daily in midterm, we proyect a drop until the $!.11 USD to later of the elliot wave analysis, we need to see an Euro bullish in this bull run of 2020. And also, I detect a hide bearish divergence and it's very neccesary to the price drop in that zone as I estimated in my previously technical analysis. Also i added in my link of related ideas a updates of EUR/USD so recently from yesterday That my friend, is all my technical analysis in Moonthly, Weekly and Daily timeframe, my expectative of the Euro is that I see that currency in the bull run agains the US Dollar.
Education
by harisonhbn9718
➕ Long-term trading ➖😍Hello, again😍 👌🏻Today we are completing trading methods!!! 👌🏻 👉🏻The last method, that traders are actively using is long-term trading.👈🏻 So, let's go ...💪🏻 📌“Buy and Hold” - this principle is most suitable for the logic of a long-term investor. 😏 There is even a curious joke: A daughter👧🏻 comes to her dad👨🏻, a long-term investor, and asks for money🤑: 👧🏻 - Dad, give me $ 100, I want to go to the disco with my friends. 👨🏻 - No, sorry, sweetheart. Now all my money’s in stocks. 👧🏻 - When you’ll sell them? 👨🏻 – Never! 👍🏻 Advantages of long – time trading: ➕Less stress: no need to constantly monitor the stock market. ➕Save time: you can devote the time saved from constantly following the market to other productive activities ➕Less hassle: you don’t need to learn different trading strategies or platforms. ➕Long-term trade helps to save on taxes. It is possible that while short-term traders can pay about 20% -30% of capital gains tax, long-term capital gains will be taxed at only 5% -15%. 👎🏻 Disadvantages of long – term trading: ➖Investments: long-term trading requires you to have free capital. And it should be free for many years. You must be prepared that a certain part of your capital will be blocked in one share, and you cann't use it to receive benefits from short-term trade. ➖Deep knowledge. Long-term trading requires an understanding of the assets you are investing in. You cannot just make decisions based on certain news, advice or rumors. It is also not enough to rely only on charts or indicator signals for buying or selling. You need to be a specialist in fundamental analysis - both of a single company and of the global economy. ➖Long-term trading requires a lot of patience. Failure to remain calm will create problems for the investor in the long run. ➖Age limits. You must have a life horizon in order to take advantage of the investment. 👉🏻Guys, especially beginners, I really hope, that with the help of my posts, you have definitely chosen the trading method for yourself or just learn something new.🙏🏻 🌟I tried to describe the main trading methods as clearly as possible.🌟 👍🏻Support me with like, I’ll prepare for you many more interesting training posts soon!💋 💙Stay with me💛 YOUR Rocket Bomb🚀💣 👇🏻👇🏻👇🏻PS Below I’ll leave links to all posts, that relate to trading methods👇🏻👇🏻👇🏻
BITSTAMP:BTCUSDEducation
by RocketBomb
14