Five Stocks Trading Under $5 That Could Win Under Tax Reform

Finally. It’s done. After months of speculation, tax reform has been completed. Now, analysts can get to work determining exactly how the new rules will affect various companies. It is almost certain there will be winners and losers. In all likelihood, the winners will outnumber the losers. That is generally bullish for the stock market trading. If there are more winners than losers, that means we should expect the overall level of earnings of publicly traded companies to rise. Rising earnings should lead to higher share prices. But, the details will require more analysis. In general ter...
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Wrapping Up Our Monthly Seasonal Strategy

Over the past year, we have shared trades based on a seasonal strategy. At the beginning of every month, we provided real time buy recommendations and we also tracked the results of the previous month’s recommendations. Now, after a year, we are able to show you the results for the past twelve months. This system was based on one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month...
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What the Fed’s Latest Interest Rate Hike Means for the Stock Market

“Fed watching” is among the most important tasks of traders. The Federal Reserve and central banks around the world have often had large impacts on stock market trading. This is because the central banks set interest rate policy. Stock markets are often driven by the outlook for interest rates. This is because interest rates are a baseline benchmark in the stock market and they provide a signal related to economic growth. Policy changes are interpreted to indicate changes in central banker’s outlook about the economy. For example, if the Fed is raising interest rates, this is a signal to...
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Six Cheap Stocks That Could Soar This Earnings Season

Earnings season is generally a time of increased volatility in the stock market. Traders know this from experience and it fits into standard financial theories. The academic community has demonstrated that stock markets in developed nations are informationally efficient. This means the current price reflects all of the information about a company. This is logical and there are alternative explanations but this one seems to fit the data very well. Notice that the theory merely says stock prices reflect what is known about the stock. It does not state that this is absolutely the correct pr...
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Timing Buys, or When to Buy

Right now, the stock market has been in an up trend for years and hasn’t suffered a pull back of 5% or more in more than a year. This seems like we could be near a significant top. And, that means now might not be the ideal time to buy new stocks. Of course, those same words could have been written at any time in the past few months. Not buying may seem like a cautious approach to take to the market, especially when it is going up. But, not buying carries perhaps the biggest risk to small investors. The arguments against buying have been in place for more than a year. In fact, most of th...
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Five Cash Rich Stocks Trading Under $5

The iPhone is one of the biggest commercial successes of all time. The product has changed the way many people live. Even those with Samsung or other smart devices benefit from the innovations of the iPhone. When the first iPhone was introduced, Apple’s legendary CEO Steve Jobs informed analysts that the company’s goal was to capture 1% to 2% of the worldwide cell phone market over the next year. Ten years later, Apple has sold an estimated 1 billion iPhones and has 20% to 40% of the market. The iPhone has always been sold at a premium price and high prices have led to large profits for ...
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Five Growth Stocks Trading Under $5

Once again, we are on the hunt for cheap stocks. This week, we focused on stocks under $5. The reason we like cheap stocks is because these are the ones that have been proven to be most likely to deliver large gains. One study looked at how low priced, or cheap, stocks performed relative to more expensive stocks. The study found that cheap stocks delivered more than six times the average return of the more expensive stocks in a typical quarter. That study defined cheap stocks as those priced below $5. We began with that as our starting point for this week’s search. We then limited our...
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Rules for Selling

Some investors seem to spend most of their time deciding what to buy. They should probably be spending an equal amount of time thinking about when they will sell. This might be uncomfortable because some investors associate selling with being wrong. The idea of selling losers is well known in stock market trading. There is the famous saying of “let winners run and cut losses quickly.” This idea is sometimes applied only to the initial purchase. Many investors are familiar with the idea of a “stop loss” which is a sell order that kicks in when the price falls by a predetermined amount. Th...
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The Best Trades for December

We are at the beginning of the last month of the year. Every single month we have provided real time buy recommendations for a successful trading strategy. Each month, we provide a list of stocks that have historically delivered gains for the next month. It’s time for us to update on this strategy. We are following one of the simplest seasonal trades possible. Few traders follow seasonal strategies although these strategies are often profitable. They are also relatively low risk because they limit market exposure to short periods of time. To apply this strategy, every month we are run...
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Are We Due for a Pullback?

In the summer of 2015, the stock market pulled back. The decline that accompanies that pullback would end in February 2016 after a 14% decline in the S&P 500. Since that time,the index has moved nearly straight up without a pullback. In this article, we look at whether or not that is unusual. Or, more specifically, we look at how unusual this winning streak has been and what the implications for the future price action are. To begin with, we need to define some terms: We are defining a pullback as a decline of at least 5% from a prior high but no more than 9.99%. A decline of at l...
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