One website I’ve found to be very efficient and dependable is Zacks.com and I’ve been using since 2006. When the opportunity came along to have them as an affiliate, I welcomed them aboard. Zachs is the one site that has become more helpful now than ever especially with the uncertainty of this so-called bubble within the stock market at this time. Their research is outstanding, as well as diverse. Zachs has been around since 1988 and has performed well over that time. According to the site, they’re up an average of 28% each year since their start.

As a premium member you have all that Zachs has to offer including up to date e-mails of stocks that you list in your portfolio. Find out about the latest rating of stocks, up to date information about what’s going on Wall Street, Mutual Funds, options, and ETF’s along with their Research Wizard program that will help you screen and back-test stocks that you’re interested in.

If you’re already a member, that’s great, but if you haven’t been a member before, here’s you opportunity to take advantage of a 30 day FREE trial of Zachs Investment Research premium membership. If after the 30 day FREE trial, you’re not satisfied with what Zachs has to offer, then just cancel it. I’m pretty certain that most of you will continue the great membership from Zachs.com

Click below to get your 30 day FREE trial of Zach’s Premium Membership. See you there!

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A DRIP is a program run in-house by a publicly listed company. They are often offered to employees of the company, but they are also open to external investors who can meet the companies minimum share threshold to participate – usually this threshold is quite low.

The benefit of DRIP investment is that you can start with a very low volume of shares, and gradually increase your shares over time. You usually set a fixed cash amount that you will use every month to buy more shares, and this can be set up to be automatically deducted from your bank account – in essence, it is a forced savings system. The strength of a DRIP lies in the fact that any dividends paid by the company on your shares are automatically reinvested, and this has a compounding effect on your number of shares over time. Many companies also offer shares to participants in the program at a reduced rate, and of course you pay no brokers fees if dealing directly with the company!

Although it might not suit day traders out for short term gain, a DRIP is a great tool to have in your arsenal when building a long term portfolio.

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Typically when you buy shares of a company, you buy at a low price and then sell it at a higher price than what you paid. In shorting a stock you “borrow the share from a broker and sell them at a certain price and at a later time, you buy those those shares at a lower price to return to the broker. There is more to it that just this simple explanation of the process.

1. Risk – There is more risk involved in shorting a stock then there is in buying a stock to go up (long) in value. If you borrow a stock while it’s trading at $20 and it runs up to $100, then you’re out $80 a share. Unlike when you “go long”, you can only lose $20 a share as it falls to $0.

2. Locating A Stock – In the past year there has been a law passed that prevents someone from borrowing stock if you can not locate any available shares. In recent years, a trader would borrow shares that no one had and wait for the price to drop to buy the covering shares, but how can he buy them if no one had any? In this case it was referred to “naked shorts”.

3. Outstanding Short Position – The number of shares of a company held short, it is measured in absolute numbers, and/or a percentage of the float of the stock. Usually if the position is more than 10%-20% of a company’s total shares, it means that the bad news has already been factored into the stock’s price. If you find a company with a large short position, you need to avoid it all together.

4. – Margin Account – To be allowed to short stocks you will need to open what is referred to as a margin account. A margin account is where the funds will come from for you to borrow the stock. Take into consideration that you will be charged from your broker a “broker loan rate” (fee) based on the price of the stock. Also you will not get any interest on the margin account or have it rolled over into a money market account on the funds not being used.

5. Liquidity – Just like I said about an outstanding short position, if a company has too many share outstanding (liquidity) you need to avoid the stock. A stock that is not highly liquid should not be shorted. In this case you may find yourself stuck in the stock where you may not be able quickly liquidate your position.

In a future post, I’ll discuss more stock shorting tips for you.

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Chasing a stock is a common mistake you need to be aware of, or your portfolio will take a beaten. This is when a stock had some good news come out and you missed the information when it was first released. In other words, the stock price made some good gains and you didn’t take advantage of the situation. I’ve seen stocks jump in value by over 30% and watch other traders try to guess at if the price would come back down temporarily so they could jump in. As the price goes up, they try to stay near the low end of the trading range, hoping for the pull-back. When the pull-back does come, it comes in the from of profit-taking from other trader and investors that got in on the initial news.

This can also take place over a period of a couple of days where the stock price jumps as much as 100% or better, only to have it come back down to levels of the original price before the move up.

Just because the stock price has moved up in a relative short period, doesn’t mean you should jump in for a quick gain. The traders that do that are very experienced in investing and this practice should be left for them to do. Any stock that you are planning to get into should be one that you’ve researched. You should be very familiar with it’s balance sheets, as well as other financial information in regards to the company. If not, take some time to check out a stock market site for information. You can never do enough research.

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One strategy that I use and I do use it quite a bit is referred to as channel trading. It’s help me many times in the past as well as made me plenty of money. It takes a while to really be able to do it, but it’s relatively easy. What is channel trading? It’s a technique that deals with a particular stock that a trader has been watching, where the price of the stock stays within a average range.

Stock prices do trade within a range that is typical to the value of the company. Let’s say that stock “XYZ” has been trading within the price range of $20 per share to $28 per share. When the price is down around the twenty dollar area you start building a position as the price of the stock gets over the twenty-seven dollar range you start getting ready to dump the shares.

Take into consideration that this is not a perfect system. There might be times that the stock will drop below the low range as well as the company having strong fundamental and a good balance sheet will push the price into a new range and you will have to start studying to figure out the new range. Sometimes profit-takers will sell off their position a little early because of fear within the markets.

If you look around you can find some good stocks that trade over a $20-$30 range. Of course most of those have a higher price tag (over $120 per share). Take your time and you will find many that will work great for you, but remember this is not an exact science. Before investing in any company, you must do your due diligence. As I always say, research is the key to successful stock trading. If you take your time and check out a good stock market site, you’ll save yourself headaches later on.

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The other day when the stock market went through a correction period, I remembered when I was able to minimize my losses by just dumping everything in the morning hours. Waiting until the “panic” and/or profit taking was finished to get back in to the stocks that I feel had no reason to lose value. It will happen to some great companies that are fundamentally sound when the market as a whole take a dive.

A couple of years ago I was listening to CNBC in the pre-market hours, they were say that things looked pretty grim. I went on to a few message boards as well as many different blogs that expressed the same news. According to the streamer that I use to follow my portfolio, the value of the portfolio had already lost about 2-3% of it’s value. I wasn’t comfortable with the overall message that was being put out there by the many different sources, so I dumped my entire portfolio at the opening bell.

I wasn’t happy about the fact that I did it, but I thought it was the best thing I could do at the time. As the day went on, the DOW, NASDAQ and the S&P 500 all fell another 4% or more. My thoughts were correct and what turned out to be a $2000-$3000 loss, could have been a $10,000 loss instead.

Of course that type of situation doesn’t take place every time the markets look grim in the pre-trading hours, but there will be days where you will see the writing on the proverbial wall. I didn’t like the small loss I did take, but I look back on it now and see that later on when the dust cleared in the final hours of that day, I jumped back in a made that money up and then some.

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If you have Sirius/XM radio, you can listen to the Bloomberg channel and a handful of others for up to date information. As for TV, you can watch CNBC. Their stock market coverage throughout the day is quite informative, but other than these few channels you really don’t have a wide variety of choices.

When it comes to the internet though, there is a ton of resources to get you started and the amount of information is endless. Of course you have a lot of the spammers out there and those who just want you to buy into their program or buy their e-book. Most of these people are not known in the investing community and all they talk about is their own self-proclaimed accomplishments of how they struck it rich.

One person that I would recommend is Jim Cramer, the over-the-top, happily-insane, entertainer and well informed in the investing world, host of Mad Money. He is also the chairman of the stock market website, The Street.com

I have been watching Cramer for as long as he’s been around and I learned a lot of things from him and I personally have made quite a bit of money from his recommendation. Yes, there are times that he will be wrong but when he does, he admits it, which I admire about him.

Jim Cramer is very knowledgeable in the stock market world and I trust his opinions and his techniques in choosing the right stocks. He is more of a fundamentalists analyst than a technical one.

There’s so much more to what Cramer can do for you than just his TV show. His website The Street.com has a few different services available that I know can help increase your knowledge and your portfolio. Action Alerts Plus is one of those programs that will give you the insight into why Cramer picks the stocks he does.

As a member, I receive his e-mails several times a day and they inform me as to what stocks he’s going to buy or sell before he does any trading. I also get a chance to study his portfolio.

The best part is that you can get a FREE two week trial of his service. If you don’t like it and want to cancel, no problem. During the two week FREE trail, you will be able to poke around and see what you need to do to make your portfolio a success.

I’ve been a member for a year and have made some good returns in a down market. With all the different places out there that want to get you to sign up before seeing anything, give Jim Cramer a try for two weeks of FREE and I sure you won’t be disappointed.

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I can sit here and tell you all about my positive and profitable experiences, but how much are you really going to learn by an experience where everything was done right?Those posts, and we have them here, have their place. They inspire and encourage but they don’t teach. That’s why on this site you will see both the positive and negative trades, but more of them will be the ones where I made mistakes and learned a huge lesson in the process.

I’ve said it before and believe me I’ll say it again and again, your emotions have no place in any of your trading decisions. If you think that people make it rich by playing hunches or a vibe that they had, I will tell you one of two things. Either they were very lucky or they are lying through their teeth. No matter what the reason, they took a very big risk.

In 2007 I was trading stocks in Sirius Satellite Radio and I was ahead several thousand dollars. Investors were coming into the stock and I was doing great. In the summer the announcement was made that they were going to merge with XM Satellite Radio to form one company and reduce expenses as well as increase revenue.

What I should have done there was to take my “marbles” and go home, but I figured this was the payday that I was waiting for. I’ve been a big fan of Howard Stern and subscribe to Sirius because of him. That’s where my emotions should have stayed.

Instead I took a position in the company after it dropped from where I sold out of all my shares. When the stock dropped some more because of the FCC delays on allowing the merger to go through, I bought more. At this point I was down 20% from cost basis.
After reading about all the hoopla that was circling the companies, I felt that this was all going to blow over and the stock would blast off. When the stock lost another 15% I had a feeling that this was just some sort of typical game that was being played during a long-dragged down fight between the FCC and the two companies.

At this point I lost all the profits that I made earlier in the year on the stock. I figured that I’ll make it all up once the deal was approved. I decided to buy as the stock fell. Not once, not twice, but three time.  Right after that third time, I realized this was a trade that was controlling me, not the other way around.

I was about to start selling when the news was released that the Department of Justice approved the two companies to merge. The price jumped over 33% and I was back in the green again with the trade. At that point I didn’t think anything was going to stop this from going through and I was going to hit it big.

My emotions got in the way (again) as I watched the politicians play their game in trying to destroy the companies and dragged their feet as we waited for the FCC’s word on the merger.

By the time the approval came from the FCC, the two companies had lost millions of dollars each and was expecting to lose more over the next two quarters. I held on for whatever rallies came and started to trim my position in the stock. Unfortunately by the time I got out of the stock I was down over 35%.

If you’re new to the stock market, try your hand at the free fantasy stock market out there. It might give you the experience you need without losing any money. If I had listened to my brain instead of my feelings, I would have gotten out right after the DOJ’s approval came out. I wouldn’t have made that much money, but I also wouldn’t have lost as much as I did.It’s a lesson I learned the hard way. Keep your emotions out of the stock trade. It’s the only was you will survive.

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