Q. What is a stock?
A. A stock is actually a stock certificate that implies ownership of the company for which the certificate is issued. Once an investor has purchased the stock of a company, they share in the risks and rewards of the company. If investors feel the company is worth more than the current price, the price of that companies stock will rise. Likewise, if investors believe the price is overvalued, they will sell off their shares, causing prices of the stock to fall.
Q. What is a Mutual Fund?
A. A Mutual Fund is a group of stocks put together by a company for those individuals who either don't know how to invest their own money or don't have the time. Investors are able to purchase a Mutual Fund similar to how they would purchase an individual stock. The performance of the fund is the weighted average of all the stocks that make up the fund. Due to the fact that Mutual Funds are a basket of stocks, they are an easy way to diversify your portfolio with a single purchase.
Q. What is a 401k or 403b?
A. A 401k or 403b are retirement accounts set up by an employer for the employees. A 401k is a for-profit retirement plan and a 403b is a non-profit retirement plan. 403B accounts are found at schools, hospitals etc. Each account generally has a fixed set of investment choices. Using the Ross Jardine web site, you can review your investment choices and select those which best match your investment goals.
Q. How do I evaluate my retirement account or investments in general?
A. There are many investing strategies. Different strategies will appeal to different investors. The Ross Jardine web site was designed to give you the tools needed to research your investment choices and implement an investment plan. If you are struggling with the next step in your investments call the enrollment specialists and ask about the available education programs at 800-968-9792
Q. How do I find good investments?
A. Finding stocks consistent with your investing strategy can be very difficult. This is probably the biggest reason why the mutual fund industry exists. Using the robust search tools provided by Ross Jardine Pre-Built Searches under the SEARCH tab will help you find stocks that match your investment strategy.
Q. What is the best measurement to use when evaluating a stock?
A. The trend. On an up-trending stock, the trend represents consistent buying pressure. When a stock is going up it is because institutions and "BIG MONEY" are buying it. An individual investor rarely has enough consistent buying power to affect a stock price.
Q. What makes a trend go up?
A. Fundamentals are what cause a stock to be purchased by institutions. Fundamentals refer to the financial well being of a company. How do they make money? What is the demand for the company's products or services? How much debt do they have? These are some simplified examples of questions an analyst might ask. Analysts from mutual fund companies, pension funds and insurance companies study the fundamentals and make the decision to buy or sell stock. If these institutions believe a stock is worth more than the market is currently paying for it, they will drive the price up to its fair value. The RESEARCH tab will help you discover the fundamentals of any given stock.
Q. How do I know whether the stock will go up or not?
A. There are no guarantees when investing in the stock markets. Understanding risk versus reward will clear up the decision process. If a stock is selling for $20 and we believe it will go to $30 the risk to reward ratio of 2:1 or 50%. The stock can also go down. To protect against significant loss, a stop order should be set to sell the stock if it drops below a set price. If a stop of $18 was set, the stock would sell automatically at the next available price after the stock hit or went through the $18 price level.
Q. What is a Stop order?
A. A "Stop" is a trigger. When the trigger is hit an order is activated. The most common use of a stop is a sell order. When a stock is purchased it is difficult to monitor it all of the time. A stop allows an investor to decide an acceptable loss or risk level and set an order to protect the investment capital. There are many ways to use a stop. An investment coach can help you learn more about where to place your stop loss to augment your strategy.
Q. What is a broker and who is the best?
A. A broker acts as the middle man between the investor and the stock exchange. There are several types of brokers. Full service brokers offer many services to clients and advise clients on where to put their money. The higher commission full service brokers charge compensates them for their advice. A discount broker does not give advice, but offers access to the market. Commissions are much cheaper. Which type of broker is best depends entirely on the needs and desires of the individual investor. Each individual investor will want to carefully consider their options before opening their account. To learn more visit the Brokers section of the Education area of the Strategy tab.