Is There Such a Thing as a Lower-Risk Stock Investment? 4 Facts You Need to Know

A lower-risk stock investment? Is this for real? This might be what’s going on your mind as soon as you read the title of this post, but we’re not kidding about this. You can reduce that risks that come with stock investing.

Here are the basic facts about stocks that you must keep in mind as you invest in the stock market:

Stock prices go up and down rapidly.

It’s a reality that stock investors must accept to have realistic expectations. There are two strategies that you can use to make the most out of that reality: momentum investing and value investing. Momentum investing involves a rising stock, hoping that more buyers will jump in. On the other hand, value investing entails buying an undervalued stock.

Stocks are the most volatile investment vehicles.

A stock you’ve invested in will steeply rise and fall in a short span of time. This makes stocks more volatile (and higher-risk investment) than other investment vehicles such as bonds and money markets.

As a stock investor, you’re an owner of a company.

Because of that, you reap the gains when the company whose shares you bought perform well. You’ll also suffer losses when the company performs poorly. Know your rights and duties as a part-owner: this will give you an idea of the possibilities in terms of growth and failure of the company.

Taxes are part of the costs of stock investing.

Every dividend you get and profit you earn from selling stocks are taxed. So consider that when computing your total return—it needs to overcome the cost of taxes as well as inflation.

Remember that every investment comes with risks. It’s inevitable—but you can surely minimize risks and avoid losing all your investments by being well-informed about the realities of stock investing.

5 Stock Market Highlights from May 2017 to Watch Out For

What are the highlights in the stock market for the month? Here is our news round-up of the development in the stock market:

1. The impact of the French presidential election on the stock market

  • There is a return to the risk-on assets worldwide because of Emmanuel Macron’s win, which was welcomed by anti-European Union forces and investors.
  • The first week of May saw promising earning figures that beefed up the major indices.

2. Tax reform to take effect

  • The so-called biggest tax reduction in history has begun to materialize with a recently released plan.
  • Although the plan matches the expectations, the stock market appears to be quite disappointed with it. Stock prices were down in early May following the announcement of the tax cut.

3. Key economic indicators down

  • Pending property sales decreased despite the rebound in new house sales.
  • New unemployment claims dramatically increased to more than 200,000.
  • The advance GDP growth, CB Consumer Confidence Index, and the Durable Goods Report failed to meet the targets.

4. Market internals are still positive overall

  • Remaining steady is the number of new lows, decreasing to 41 on the NASDAQ and 19 on the New York Stock Exchange (NYSE).
  • The Advance/Decline line continues to make all-time-high records. Advancing issues outnumber declining stocks by a 6:1 ratio on the NASDAQ and a 4:1 ratio on the NYSE.
  • There is a boost in the average number of new highs, with 246 on the NASDAQ and 252 on the NYSE.

5. Bullish market after the strong performance in April

  • For the first time ever, NASDAQ went above the 6,000 level.
  • Also posting a new all-time high record is the Russell 2000.
  • The benchmark keeps its 50-day moving average stable at the end of the first week of May.

Analysts anticipate the outcomes of the Federal Reserve meeting on the second half of May, where the base interest rate will be decided on. We’ll keep on updating you about the recent developments on Wall Street.

The Different Types of Stock Orders for Trading Stocks: A Guide for New Investors

First-time investors will be able to make effective stock investment decisions if they know all their options when it comes to purchasing and selling stocks. This article will discuss the various types of stock orders that are available for anyone who is aspiring to make it big in the stock market:

Market order

The most common stock order type, a market order involves requesting to purchase or sell a stock at the current rate in the stock market.

Pro tip: Ignore the last-trade price. If you’re selling stocks, look at the bid price. And if you’re buying stocks, look at the ask price.

Stop-market order

It’s a request to purchase or sell a stock at a price you specify, which means the broker will have to execute the trade when the stock goes above or below a threshold you set. The goal here is to reduce your losses.

Pro tip: Be careful when making a stop-market order because a quick but temporary decrease in the stock price isn’t a good scenario.

Stop-limit order

This type of order is very much the same as a stop-market order. What sets them apart is that in a stop-limit order, the request is transformed into a limit order and not a market order.

Limit order

This type of stock order is essentially similar to a stop-market order, except for the purpose of using it. You make a limit order to maximize your profits. This makes it ideal for stock investors who cannot track their investment portfolios all the time.

Pro tip: Do keep in mind that limit orders are done on a first-come, first-served basis. So, for example, you specify a limit order at $50. You’ll need to wait until the other orders at that price are executed.

There are many other types of stock orders, but these are the basic ones that beginners have to understand in order to make the most out of their investments in the stock market.