Secrets To Buying Stocks
We all know the market goes up and the market goes down. Thousands of people will give you advice on what their favorite stock is. But there are no magic answers as to which stocks will make you money, and which won't. When you are looking at investing in stocks here are three theoretical terms that might give you something to think about.
DEAD CAT BOUNCE: This is the effect seen when a stock price rises after a sustained period of downward movement. Often people start to buy again thinking the turn around has happened and then the stock drops even further.
Why this is important for stock trading: No one can really predict when a market or stock recovery will happen. It can however provide an opportunity for investors to buy or sell quickly to take advantage of the temporary price increase.
THE BELLWETHER STOCK: This is a market indicating stock, one that predicts the direction of the market.
What does this mean for me? These types of stocks may not be attractive purchases in their own right; there may be little chance of growth realization. But they are stocks to watch when predicting where the market will go next. The biggest investors in these stocks tend to be the big institutional investors.
THE JANUARY EFFECT: This is the effect that sees the beginning of a new year heralding higher stock prices in January. It has been attributed to tax factors and to investor sentiment. People often unconsciously expect prices to rise in a new year.
Why is this important? It has been shown in investigations that the January effect is real. However in recent years it has become more difficult to take advantage of. So it may be useful to watch for, but it is unlikely to be a reliable way to make money. - 23210
DEAD CAT BOUNCE: This is the effect seen when a stock price rises after a sustained period of downward movement. Often people start to buy again thinking the turn around has happened and then the stock drops even further.
Why this is important for stock trading: No one can really predict when a market or stock recovery will happen. It can however provide an opportunity for investors to buy or sell quickly to take advantage of the temporary price increase.
THE BELLWETHER STOCK: This is a market indicating stock, one that predicts the direction of the market.
What does this mean for me? These types of stocks may not be attractive purchases in their own right; there may be little chance of growth realization. But they are stocks to watch when predicting where the market will go next. The biggest investors in these stocks tend to be the big institutional investors.
THE JANUARY EFFECT: This is the effect that sees the beginning of a new year heralding higher stock prices in January. It has been attributed to tax factors and to investor sentiment. People often unconsciously expect prices to rise in a new year.
Why is this important? It has been shown in investigations that the January effect is real. However in recent years it has become more difficult to take advantage of. So it may be useful to watch for, but it is unlikely to be a reliable way to make money. - 23210