The Complete Shareholder Proxy Vote Guide
Companies are bringing more social, environmental, economic and corporate issues to a shareholder proxy vote. Some of the proposals are no more than a litmus test to public sentiment, but it’s a start to broader corporate reform and a good thing for shareholders.
Of course, for this trend to continue, shareholders need to take part, which seems to be the biggest obstacle. Whether you have 100 shares or 100,000, it doesn’t matter. It’s your money invested in these companies and a wasted opportunity by not voting.
As a shareholder, understanding your rights, the proxy voting process and knowing the SEC proxy rules is the best way to stay involved. How you vote could have a direct impact on the company and your money going forward.
What is a Proxy Vote?
Every year there is an annual meeting and in between, any number of special meetings can pop up that need a shareholder’s vote. These votes can be done in person. But jumping on a plane every time a shareholder vote is needed can be excessive. Read more…
Shorting A Stock: Profiting On The Way Down
Shorting a stock is a high risk, high reward strategy. It goes against the market trend. It’s unnatural.
Everyone and their brother wants the market to go up, not the short seller. Shorting a stock is not the popular choice, but there are profits in going against the crowd.
Most of our investments go like this: we buy shares of a stock or ETF. Those shares will rise in value because our research says so. Then we’ll sell, make a cool profit and move to the next investment. That’s the simplified version. Shorting a stock or a short sale is the opposite.
What is a Short Sale?
The SEC defines shorting a stock as:
A short sale is the sale of a stock that an investor does not own or a sale which is consummated by the delivery of a stock borrowed by, or for the account of, the investor. Short sales are normally settled by the delivery of a security borrowed by or on behalf of the investor. The investor later closes out the position by returning the borrowed security to the stock lender, typically by purchasing securities on the open market. Read more…
Build Your Own (Cheaper) Mutual Fund
Two of the biggest arguments against mutual funds are high costs and poor performance. When your mutual fund starts under performing and increasing costs, instead of finding another mutual fund money sink, build your own.
When a mutual fund is started, it’s built around a goal. Something that easily explains to investors how all that money will be invested. There’s a hitch, though. With an active manager you just never know how much they veer off course from that goal. And when they fail, it only costs you more. Which is just one of many limitations.
Costs limit your investment performance. There is no way to cut costs entirely. So we have to focus on keeping it to a minimum. This keeps more money invested and growing over the years.
Then there is the performance issues. Your money has a goal (at least it should have a goal). So you search through all the possible funds to, hopefully, find a few that sync up with your goal and don’t eat away too much of your profits.
It all works out for a while until the cost and performance of those mutual funds don’t live up to expectations. So you look for another fund to put your money in and the cycle starts all over, compounding the costs.
Of course, there is another, cheaper option. Read more…
What Type Of Investment Strategy Should You Use?
People are constantly on the lookout for the perfect investment strategy. That Holy Grail of constant profitable returns. Unfortunately, no strategy is perfect in the sense that it will guarantee good returns. In fact, I’ll argue that only having one strategy limits our ability to invest profitably.
Currently, investment strategies are a popularity contest. The strategy with the best returns last year or the one most recently written about, tends to get the most attention. Good for the strategy and book publishers, but is it best for new investors just starting out? Hardly! Because what works for me may not work for you. Instead, it should come down to your comfort level, knowledge (hopefully), time, and your financial situation.
Trading Strategy
Trading is definitely not for everyone. It’s time-consuming, stressful and short-term oriented. Trading can have a timeline of seconds, days, weeks or a couple of months. But the goal is to reach a target price, sell, and walk away. Traders take advantage of short-term trends, news, and speculation to make fast money.
An extreme example of this, Read more…
Jim Cramer’s Action Alerts PLUS Review
If you have ever watched CNBC for more than two minutes you have probably come across what appears to be an over caffeinated personality known as Jim Cramer. A successful ex-hedge fund manager that has turned his love for everything stocks into a successful second career as an author, market commentator for CNBC and host of his own show Mad Money. Love him or hate him, he provides an insight to the stock market through the eyes of a seasoned investor.
What is Action Alerts PLUS
Jim Cramer’s Action Alerts PLUS is a subscription service through TheStreet.com. It was started in 2001 as a way to follow the investment decisions for his charitable trust portfolio. The charitable trust was setup with Cramer’s own money and the goal of giving any realized profits to charity.
The Action Alerts PLUS service alerts subscribers by email and through the website when Cramer and his research team recommend a stock to be bought or sold. As well as providing subscribers with a reference tool for investing and trading in the stock market.
What To Expect From The Service
Goodbye 2011: Best And Worst Market Awards
Part of having a finance blog offers me the opportunity to add my two cents every now and then. With that in mind I’ve come up with the Novel Investor Best and Worst Awards for 2011, relating to stocks and ETFs that may or may not have been part of your portfolio this past year.
In order to come up with the stock list, I eliminated all penny stocks and limited the list to the more well known companies. For the ETF list all leveraged ETFs were eliminated. Something to keep in mind before getting into the winners or losers, these are not investment recommendations and past performance doesn’t equate to future performance so invest at your own risk.
Best Stock of 2011 – Mastercard (MA)
In a time when debt has been the biggest topic in personal finance, Mastercard stock was one of the best performers of the year. Finishing the year up 64%. Thanks in large part to the growing cashless society we’re moving towards. The Fed allowing banks to charge more for debit card fees didn’t hurt either.
Worst Stock of 2011 – Research In Motion (RIMM)
Proof that not keeping up with tech trends is bad. The maker of Blackberry phones has been destroyed with the advances in the smart phone thanks to the Apple IPhone and the growth of Android smartphones. RIMM failed to get on board and has been killed because of it. Starting off January at $58/share and ending the year around $14/share, for a loss of -76%.
My two cents is this company is done. The current smartphone wars will come down to Android and Apple. Very reminiscent of the operating system war of the 90s. Android is the new Windows for smartphones. Hopefully better, but there’s only one real winner in Google.
Best and Worst Stock Award – Netflix (NFLX)
Want To Invest In Stocks? Consider This First
So you’re thinking about investing in stocks? There’s a lot to consider before finally taking the plunge into individual stocks. Additional risk factors, new learning curve, costs involved, liquidity and where to start, are just a few of the concerns. But when you finally boil it all down, the biggest thing to consider before buying stocks is time. Do you have the time? There’s a finite number of hours each week. Are you willing to give up some of them to manage your money?
Investing in stocks is more than just getting that “hot stock tip” from your neighbor or friend. You may be able to get by on luck a couple times betting on stocks this way, but it usually turns out bad. In reality it involves keeping up with all the news, ratings changes, and earnings reports. And that’s just the day to day stuff. There’s also the initial research that needs to be done with stock screeners, research sites, financial statements, balance sheets, and a whole list of other tools. So you still want to invest in stocks? Read more…
