Growth Stocks

By Ahmad Hassam

Capitalization or cap refers to the combined value of all the share of a company's stocks. The division between large cap, mid cap and small cap are often blurry and not sharp. When you start looking for good stocks, you often come across these terms like large cap, mid cap, small cap, growth and value. Let's discuss these terms for a moment.

Mid caps are companies with $1 to $5 Billion in capitalization and small caps are companies with $250 million to $1 Billion in capitalization. Anything below $250 million can be considered as micro cap. However the following divisions are generally accepted: Large caps are companies with over $5 Billion in capitalization.

Perhaps the most important ratio is the Price to Earnings Ratio (P/E). Now the most important term that you come across is growth stocks and value stocks. How do you determine this is a growth stock or a value stock? Suppose, company ABC stock is presently selling for $50. Now suppose that last year company ABC earned $5 for every share of the stock outstanding. This means stock ABC P/E ratio is 50/5=10. So the higher the P/E ratio, the more investors are willing to pay for the stock. What is the P/E ratio? The P/E ratio divides the price of the stock by the earnings per share.

Now the higher the P/E ratio, the more growth the company is supposed to have. So it can be either the company is growing real fast of the investor have high hopes of its growth. Now these hopes can be realistic or foolish, you never know! Now, if you follow financial news than you must know that the large growth companies always grab the headlines. But do the growth stocks really make best investment? The lower the P/E ratio, the more value the company has. Low P/E ratio companies are not considered to be the movers and shakers in the market.

Growth companies are usually adolescent companies usually in sectors like computers, technology, telecom while value companies are mature companies usually in sectors like insurance, banking, manufacturing. Now, if you follow financial news than you must know that the large growth companies always grab the headlines. But do the growth stocks really make best investment? The lower the P/E ratio, the more value the company has. Low P/E ratio companies are not considered to be the movers and shakers in the market. Is there any statistical study that can guide us as to the performance of these different categories of stocks? Eugene Fama did seminal research on stocks and stock market s in'70s. Most of his results were startling and broke many myths. According to Fama and French, two famous researchers who did ground breaking research on stocks, over the last 77 years, large growth stocks have only seen 9.9% annualized rate of return as compared to 11.5% for the large value stocks.

The most probable cause seems to be their immense popularity. Since most of the headlines are captures by high growth companies, investors seem to think that they are the best investments. Now intuitively you might have thought that growth stocks are better. What can be the reason for their lower performance over the years?

Think about Google, how its stock price shot up within a matter of weeks after it hit the market. Weeks after that it began to cool off. So large growth stocks tend to get overpriced before you are able to buy them! - 23211

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Try these cash printing Forex Signals from heaven. Discover a revolutionary Forex Robot System!

Introduction to Using ETF Trading Strategies to Increase Your ROI

By Patrick Deaton

There are many ETF trading strategies that offer a person just entering ETF the opportunity to reap great rewards when they are successfully used. However, in order to make the strategy perform at the level one desire, it is important that the correct strategy be paired with the style of trading that will be done.

Creating some safety nets that allow for experimentation and testing of different strategies and methods will be very helpful. One of the more important safety nets to set up early on is to set buy and sell limits. By setting limits, a person will be able to sell before they lose their gains as a result of an ineffective strategy.

In most cases, when a person finds the strategy and method that works effectively for them, they stick with it. This is the result of trying different strategies and discarding those that don't work. The strategy that will be most effective will depend in large part on the kind of trading that a person is going to do. The needs of a very active trades will be different than those needed by a person who is not regularly making trades.

Most people who have ETFs in their long term portfolio do not get highly involved in ETF trading strategies. These people often have ETFs managed by their broker and may review the ETF with their mutual funds on a yearly basis. When trading is done, it is through their broker as with other mutual funds.

Learning the structure and details of ETF trading will be of great assistance when a person is deciding on an ETF trading strategy or method. It can be very difficult to implement an effective strategy for a system that a person is not knowledgeable about. It will be very important to research each strategy as it related to the specific needs of the type of trading that is going to be done.

If a strategy is being considered that has no history of consistent effectiveness, there is an added element of risk in trading. When a person is involved in a riskier ETF trade, such as Leveraged or Inverse ETFs, this added risk is unacceptable.

Many financial advisers and long term ETF investors use the Buy and Hold Strategy. This strategy is designed more for low risk trading. The trades are spread across many sectors so the overall portfolio risk is reduced. This strategy does not require constant attention and is a relatively hands-off approach to trading. The strategy provides steady growth from varied financial products. This is also the down side of the strategy. The trader does not know what is happening in the market on a regular basis, does not follow the index, and misses many opportunities to take advantage of changes in the market that can result in significant gains in their portfolio.

A more active role in trading occurs with the Active Long-Term Trading Strategy. This is a variation of the Buy and Hold Strategy and provides more opportunity of an individual to make trades. However, it is also designed for long-term, steady growth. An individual may choose the level of involvement they want to have in the trading activities that take place and can be more proactive with their portfolio.

When deciding on a strategy it is very helpful to discuss one's goals and objectives with an individual who is knowledgeable in ETF trading strategies and the structure of ETF trading. By effectively pairing the correct strategy with the trading style that one has, there is a greater possibility for success in the trading arena. - 23211

About the Author:

Learn how it's very possible to make 6% per month in your investment accounts using etf trend trading! "Big A" is a recognized expert in the world of etf trend trading system and reveals etf secrets that have been kept under wraps by hedge traders for years. Get his free report and webinar today!

Teenager Car Insurance - Finding an Inexpensive Policy

By Andy Darwinson

There is no getting away from the fact that car insurance can be expensive and when it comes to teenager car insurance the cost can be exorbitant. The main reason that teenagers pay much higher insurance premiums than adults is because statistically, they have more accidents than drivers over the age of twenty five. Insurance companies regard teenagers as an insurance risk because of the high incidence of accidents among younger drivers.

While it is generally the case that if you are trying to insure a vehicle for a teenager you could pay through the nose, it is possible to get cheaper teenager car insurance if you know what to do. One of the things that insurers take into consideration when quoting to a customer, is the type of vehicle that they drive.

Some cars are more likely to be involved in an accident than others and very often these are the kind of vehicles that teenagers like to drive. Most teens may love the idea of driving around in a red corvette, but that is the type of car on which insurers will raise their premiums. Anybody, even a teenager who drives an ordinary, light colored four cylinder engine car, will get Brownie points from the insurance company in the shape of lower premiums.

Insurers recognize that certain people drive certain cars, and the car a person drives is often an indicator of the way that person will behave. Some cars speak to insurers of reckless drivers or drivers who are likely to get into trouble on the road. If an insurer believes that you are going to be a high risk, i.e., more likely to have an accident than some other drivers, they will up your premium payments.

Then again, it's not all about the car. You can also benefit from knowing how many miles a year you will be driving. Granted, this isn't the easiest thing to estimate, but it definitely helps. If your child won't be racking up the miles, the chance of them getting into an accident will be much less. If you go for the great looking car, and they spend a lot of time on the road, the premium will definitely be higher.

If you are the one paying for car insurance for your child, then it's going to be up to you to get the best insurance at the cheapest rate. They probably will be much happier with a sporty car, but having an unremarkable one is better then none at all. Then of course they could always pay for their own car insurance.

In the end, don't be afraid to ask questions. Your insurers will be able to answer all your questions, and if you choose the right one, they will be able to get you cheap teenager car insurance. Oh, and please don't forget to try and ensure them your teen won't be driving many miles each year. The end result is a lower insurance quote. - 23211

About the Author:

Looking for car insurance for young people or cheap female car insurance? Get all the tips and quotes at Cheap-Motor-Car-Insurance.com.

Amazingly Powerful Life Insurance Buying Tips

By Matt Sumerstone

If you are fairly young and just starting your family, the last thing you want to think about is dying. However, you need to understand the process of buying life insurance. Tips regarding this process can help you purchase the correct policy so that your family will be taken care of in the event of your death. Below you will find some interesting buying life insurance tips...

You should purchase life insurance now, when you are still young and healthy. Your premiums will be far lower because you are not as much of a risk for the insurance company as an older, less healthy person. In addition, you will have peace of mind knowing that your family is covered should something happen to you. Everyone who is married should have life insurance, especially if they have children. Below, we are going to give you some buying life insurance tips...

You may be tempted to sign up with whatever company speaks at office meetings, but this is not necessarily the best idea. In order to find the cheapest coverage and the most appropriate policy for your family's needs, you should comparison shop. The Internet is an excellent resource for learning about different life insurance policies.

Purchasing the policy online, however, is a bad idea. You need to meet with an agent face to face so that he or she can explain the policy to you. During the meeting, you should ask as many questions as possible.

Make sure you understand exactly what you're paying for. If the agent is evasive or makes you uncomfortable, do not go through with the purchase. There are plenty of other agents out there who will be happy to explain the policy to you in a way you can understand.

The agent should also be able to help you figure out if you need life insurance. Insurance is not useful if you do not own property or have a family; you shouldn't waste the money before you have enough assets to make it worthwhile.

You can purchase varying levels of coverage. In general, you should purchase 2-6 times the amount of money you are making each year to ensure that your funeral costs are paid for, as well as bills that may be left behind.

Dying is an uncomfortable subject. But buying life insurance tips are important to follow so that your family will not be destitute when you die. - 23211

About the Author:

The author enjoys writing about sports, education, and health topics. Visit his newest web site that discusses country kitchen cabinets and Shaker kitchen cabinets and more.

Cheap Car Insurance for Sports Cars

By Stacy Fox

Are you looking for U.S. cheap insurance for sports cars? Everyone knows that sports cars are expensive and if any damage is done, it is pricey to repair them. Additionally, drivers of these cars are considered to be high risk by the insurance companies and thus they charge higher rates.

If you are buying a performance car, it is a reasonable assumption that you want to drive very fast. When you drive fast, you are more likely to get into wrecks. Wrecked sports cars are pricey to repair.

Sports cars dominate the list of expensive vehicles to insure. The Nissan 2009 GT-R has the highest insurance bill of any car around. The $76,000 vehicle can costs on average $2533 a year to insure.

At the other end of the spectrum, the Ford Mustang G-T is the least expensive sports car to insure.

For reference, the Hyundai Santa Fe is the new vehicle with the lowest price insurance ticket.

So, how is the insurance rate on a sports car determined? The primary determinants are the price of the car and the average claims of drivers using that vehicle. Beyond that, insurers consider the horsepower to weight ratio and the 0 to 60 mph times. These are what distinguish a high performance car from a mid performance one.

Other factors that go into deciding how much your insurance policy is going to cost you include age (under 21 is very expensive), gender, marital status, how much the car is used, your odometer reading, and potentially a GPS system that tracks your driving.

Keep in mind that there are two types of insurance as well. Straight liability insurance covers only the other party. Because these cars are designed for speed, liability insurance is higher for sports cars than for other cars. But there is also comprehensive coverage which will get your own car repaired if it is damaged. You have to decide which is right for you.

That's the basic facts on U.S. cheap car insurance for sports cars. - 23211

About the Author:

US Cheap Car Insurance for Sports Cars is one of the many topics you will find about auto insurance at http://AutoLiabilityInsurance.org