Four Cheap Gold Miners

Investors value gold for many reasons. Some see the yellow metal as protection against economic collapse. These investors tend to accumulate physical gold as coins or bars believing they will be able to use their gold to prosper under extremely adverse economic or social conditions. Other investors believe the financial system will continue to function in the future, but acknowledge gold tends to rise under adverse conditions and maintain positions in the metal through investment accounts owning ETFs, futures or gold mining stocks. Some investors simply view gold as a trading vehicle to be bought in up trends and sold ...
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Five Stocks Under $5 Analysts Believe Could Gain At Least 50% in the Next Year

Analyst estimates are an important component of Wall Street culture. Despite their importance, many individual investors ignore estimates, perhaps because they don’t understand the importance of Wall Street research. Research is expensive to produce and large firms don’t charge customers for their research. This fact points to the value of the research Wall Street produces.Wall Street isn’t known for giving things away. Free research isn’t really free. Customers pay for research through commissions and fees and sometimes they direct business to firms because of the quality of the research.Research departments consist of individuals with access to high-priced data systems who ...
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Two Important Questions Investors Must Ask

Successful investors spend a great deal of time analyzing what to buy. Many investors who are less than successful also spend a great deal of time analyzing what to buy. The difference between success and failure can come down to the second question, the one less successful investors often fail to consider – the question of when to buy. Successful investors consider “when” to be as important as “what” while less successful investors may believe a good company can be bought at any price.For example, Cisco Systems (Nasdaq: CSCO) is a great company which makes great products and records billions ...
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Getting Ready for Taxes

Many investors think about taxes in April every year, at the time the bill comes due. This explains why we see so many ads every March and April about funding retirement accounts for the previous year. If investors didn’t complete tax planning in the old year, funding a retirement account is one of the few options for reducing taxes at the last minute. While funding a retirement account is important as a tax strategy and to provide income in the future, there is more to tax planning and now is the ideal time to look at this year’s taxes.To be ...
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Income for Bears: Covered Call Strategies

There are times when a trader is certain prices will fall. At times like this, they can sell stocks they believe are overvalued and move to cash. But there could be valid reasons that make a trader reluctant to sell. For example, selling a position that has been held for years could create a large tax bill. While selling could avoid a loss the tax bill could be more than the amount that would be lost. Or the trader might believe that prices are likely to decline in the short term but believes the stock will deliver large gains in ...
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Volatility Might Be All That Matters to Traders

Volatility is a term that almost every trader is familiar with but it is also a term many traders may not fully understand. The textbook definition of volatility isn’t very useful to many traders and that can lead to misperceptions. When properly understood, traders can benefit a great deal from volatility.For some reason, volatility is usually considered to be equivalent to risk. This seems to have grown out of the way risk is defined in the academic community. In financial theory, the idea of volatility is defined as the amount a stock goes up and down in price and is ...
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Options Strategies to Benefit When Markets Are Going Nowhere

Traders often hear options are a versatile trading tool but it’s not always clear why that’s true. Options can be used to benefit from bull and bear markets with limited risk or they can generate income when a trader has a clear opinion on the market direction that turns out to be correct. But options can also be used to profit when you don’t have a market opinion. Straddles, strangles and spreads can be useful tools and add to the versatility of options.Straddles allow a trader to take positions on both sides of the market (straddling the strike price) and ...
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Why Stock Prices Move

Stock prices move up and down but much of their movement is difficult to explain. We often see headlines explaining that changes in the price of oil or the Japanese yen affected stock prices but that seems unlikely to be the real reason the price of a company that sells sports collectibles in California, for example, moves up or down 3% in a day. In addition to headlines, there are a couple of academic theories about why stock prices move. The Efficient Market Hypothesis (EMH) is probably the most popular academic theory but a new theory, the Adaptive Market Hypothesis ...
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