Fund picks and pans stocks

My understanding of the DOW or S&P500 index funds is that if GE represents say 1% of the S&P500, it will represent 1% of the value of the S&P500 index funds.

Since many people invest in these index funds to represent the market, won’t any company in the index be artificially inflated in price due to heightened demand?

Another way to ask this is: Do companies that join an index experience a bump in share price & do companies that leave experience a drop within a short amount of time?

Thanks!

My Related Websites

Mail this post

Technorati Tags: amount of time, amp, bump, dow, index funds, p500, share price, time thanks

Posted in Best Index Funds |

Tags: amount of time, amp, bump, dow, index funds, p500, share price, time thanks |

3 Comments »

3 Stocks for Beginners

January 22nd, 2009

The trick to finding the best penny stocks!

One of the hottest ways to make money in the stock market is taking a chance with what is known as "penny stocks" – shares that have incredibly low prices in the hopes that they jump up.

There’s the potential to make some huge dollars so let’s have a look at what makes the best penny stocks.

Obviously there’s a risk to investing in these stocks. The companies behind them aren’t "in the big times" yet and run the risk of going under. The best penny stocks, for obvious reasons, are ones that have been properly researched.

i need a list of symbols that represent stocks Choosing penny stocks in a reasonable fashion means having the business model of the company selling them independently appraised. This is like buying shares in any other company that’s being publicly traded. It’s important to understand the company’s business model, what they’re doing, who’s competing with them, what they make and what products are being offered.

The thing that makes penny stocks so appealing is that most businesses offering them are actually extremely simple. One typical example of a penny stock company is that of a mining company that profits only when the price of the material it extracts reaches a certain number. There are also a few oil exploration stocks that are valued in this way. The best penny stocks in terms of performance seem to be the ones that react to the price of an external commodity.

Penny stocks are rated as a high risk vehicle by the Securities and Exchange commission. Some of the risks you’ll encounter when dealing with these stocks include incomplete and indirect financial reporting, limited liquidity and even complete fraud. People who are playing with a day trading strategy will find that sudden demands for penny stock creates enormous volatility. Penny stocks are hard to short sell for this reason.

The financial reporting guidelines on the best penny stocks are actually pretty loose. Unlike the national exchanges, not much is required of companies that list this way – in fact, sometimes these stocks will just de list for a few days! In the investment type called Pink Sheets, penny stocks have nearly no regulatory requirements at all, including few to no minimum accounting standards or reporting guidelines.

Because these stocks aren’t standardized and don’t have an generally accepted requirements for accounting, they can be extremely vulnerable to being manipulated or even just plain fraud. People posing as independent observers can encourage people to run up the price, then they sell and de list the stock. This is the classic pump and dump scam.

Of course, that doesn’t mean you should never invest in penny stocks. There are lots of real, legitimate startup companies out there, and they need to have a good place to get up and running. If you’re able to pick a winner, you’ll get an impressive return.

If you’re able to find a company with lots of promise, you could get an enormous payday. The best penny stocks will land you a massive gain on your money! Even if you lose four out of five of your picks, the single winner you get will give you enough to forget about the other losses.

Bank Stocks Lead Wall Street RallyFor one day, at least, battered bank stocks actually helped the markets. Reports that the government was considering a deal to set up a “bad bank” to absorb toxic assets ignited a broad rally on Wednesday.

Asian Stocks End Higher
Stocks in Asia closed with gains as the US House of Representatives approved a stimulus bill of $819 billion.. Check out TheStreet for the latest stock market news and financial investment headlines.

Stocks up on plan for bad bank assets
NEW YORK — The optimism is building on Wall Street. Financial stocks led Wall Street sharply higher Wednesday on investor hopes the Obama administration will create banks to absorb the bad assets weighing down the..

Stocks signal lower open as jobless claims rise
Wall Street remains cautious following a government report that the number of people receiving unemployment benefits has reached an all-time high.

Mail this post

Technorati Tags: beginners, buy, dow, nasdaq, penny, sell, stocks

Posted in General |

Tags: beginners, buy, dow, nasdaq, penny, sell, stocks |

No Comments »