- - Page 5 of 14 The Finance Gourmet

What Is After Hours Trading

July 25, 2018 by Finance Gourmet

Facebook reported some garish earnings guidance after the market closed today and the reaction was pretty big. In fact, it was so big, that news outlets and other investment analysts started publishing stories about how far down Facebook stock was trading “after hours.” When this happens, people have questions, mostly, What is After Hours Trading. After Hours Markets Although it never really matters to most people, the reality is that isn’t just one stock market. There are actually several different exchanges. A couple of decades ago, accessing these other exchanges wasn’t really the kind of thing that your average trader had much ability to do. Of course, times change. These days, with the advent of electronic trading, and online brokerages, it’s actually pretty easy to access the other exchanges, even if you don’t know you are doing it. After the standard trading markets — NYSE, NASDAQ, and AMEX – close at 4:00 PM Eastern, those other markets fire up offering After Hours Trading, sometimes referred to as Extended Hours trading. Most major brokerages offer their clients the ability to access those extra trading hours, although you usually have to sign some forms saying that you understand the risks. Basically, the …

Stock Market Correction

February 8, 2018 by Finance Gourmet

After Monday’s stock market fall, there was a run up yesterday on Tuesday, then a little drop on Wednesday, and now a 1000+ point market drop again today. So, let’s get a headcount before we proceed. Stock Market Results Last Few Days Monday: -1175 Tuesday: +567 Wednesday: -19 Thursday: -1033 Add it all up, and you get -1,660 for the week. Oh, and by the way, the market was down 666 points last Friday. From the market’s high point, this equates to a drop of a little over 10% putting us into correction territory. (A correction is usually defined as a drop of 10%.) Do We Panic Now? Take a look at what I wrote about Monday’s big stock market drop. Although the market has dipped even further, the result remains the same. For long-term investors with a well diversified portfolio, the best course of action is to ignore all short-term market moves. Even if this is the beginning of a recession (We are totally due for one) the long-term scenario is still the same. The ever higher march of inflation, plus a U.S. economy that always comes back eventually means that holding on, and continuing to invest is the best solution for long-term investing …

Stock Market Plunges – Shall We Panic?

February 5, 2018February 5, 2018 by Finance Gourmet

The Dow Jones Industrial Average fell almost 1,200 points. The headlines scream “Largest 1-Day Point Drop in History.” — They say “point drop,” because as a percentage, this declines isn’t even close to the worst. As the Dow increases in value, the percentage of a point becomes a smaller number. This 1,200 points is equal to 4.6%. That’s nothing to sneeze at, but it is not anywhere near as bad on a percentage basis as the 508 point Black Monday crash, which at the time was a drop of 22%. (Could a Black Monday type crash happen again?) Perspective is fun! The 2018 Crash Before we decide to panic, let’s look into our crystal ball and see what will happen in the next few days. First, don’t expect any of the politicians who were taking credit for the stock market rising to come out and accept any blame for the market falling, even though, if one is true, the other must be true as well. The reality is that politicians are never responsible for short-term market moves, no matter how much they try and take the credit. So, this crash isn’t their fault, but the runup wasn’t to their credit …

Stock Market Rising More

October 24, 2017 by Finance Gourmet

Anyone out there with their “the stock market is doomed” predictions acknowledging how much money they would have cost you if you had listened to them and gotten out of the markets in the last several months, or even the last year or two? No? Didn’t think so. It looks like the doomsdayers will have to wait a little bit longer as U.S. companies such as Caterpillar and 3M both reported pretty solid earnings this week driving up the stock market further. It’s a little hard to claim that there is no basis for increasing stock prices when stocks are actually doing well. Give it a week or two. Once earnings season has passed they’ll be back to tell you about how overbought, overvalued, and over-hyped the market is. How Long Will Stocks Keep Rising I don’t know how much longer the stock market will keep going up, and neither does anyone else. That’s why money mangers are always careful to compare themselves to the stock market, and not to their own predictions or track record of being right. Imagine how much more responsible financial analysis might be if you had to publish not only your trading record versus a …

Worried About Another Black Monday?

October 18, 2017 by Finance Gourmet

30 years ago, the stock market “crashed” on a single day. It was called Black Monday. At the time, I was in high school. I put aside the newspaper from that day thinking it would be a major collectors item in years to come. It hasn’t, but not because it wasn’t a big event. Black Monday was the name given to the biggest one day drop in the stock market. On October 19, 1987, the Dow Jones Industrial Average plunged 22.6% in one day. Back then, the Dow was still everything. The NASDAQ was the stock market where also-ran stocks that couldn’t qualify for the NYSE traded. The S&P 500 was known to savvy investors, but your average American still didn’t know much about the stock market beyond what showed up in 45 seconds on the nightly newscast. In fact, many of them didn’t own any stocks, unless they had a 401k account at work. Online trading was still in the future, and discount brokers took orders on the telephone. Unlike previous crashes, Black Monday did not start a panic. It did not lead to a depression. The drop was serious, and real. For the rest of 1987, the market …

Stock Market and the Eclipse

August 21, 2017 by Finance Gourmet

With all the scare mongering these days, I’m surprised to not have seen an article about the negative effects a solar eclipse has on the stock market. Has anyone even done the research? What if stock traders get spooked from inside their windowless room on the floor of the New York Stock Exchange? What if little old ladies and their dividend paying stocks worry eclipses erase dividends? What if everyone ruins their iPhone cameras taking pictures of the eclipse? (Actually, that might boost Apple stock when they get a big boost in iPhones sales and repair revenues.) Actually, a story like that is the worst kind of stock market prediction story, because it has a fixed event date. After today, you would have to take your lumps if you were wrong instead of just waiting to slowly, eventually become right, like all of the current, market top doomsday projectors are doing. Of course, an actual prediction with an actual date, would be infinitely more valuable. So, why doesn’t anyone do it? The same reason as always. It actually is impossible to time the markets. Trends come, and trends go, but knowing what will happen today, tomorrow, next week, next month, …

Inflation Disappears (Again)

August 11, 2017August 11, 2017 by Finance Gourmet

Update: Yea! It looks like I was right, and everyone has come around. It’s August now, and it looks like those low inflation numbers were neither an aberration, nor temporary. There simply is no inflation, the job market, while full, is not hot, and there is no need to raise rates the rest of 2017, so say we all 🙂 The Fed has been working to raise interest rates because of the specter of inflation. However, with the exception of energy prices, there really hasn’t been much in the way of inflation. As a result, the Fed keeps explaining that they think that all those reports of low inflation were temporary. That all took a bit of knock today as the U.S. Government reported that inflation in June was zero. That’s right, zero, as in no inflation (again). And that comes after the actual 0.1% drop in inflation in May. This is of course, a far cry from the Fed’s so-called target of 2.0% inflation, and calling two months in a row of data temporary starts to look like ignoring data, so the tone has changed. A lot hinges on the July report. Check out my Credit Sesame review. Fed …

Why You Shouldn’t Worry About a Market Top

July 24, 2017 by Finance Gourmet

Worried about whether or not the market is overvalued? Did the markets set ANOTHER record? You aren’t alone. Seemingly every day, a major financial website or magazine publishes an article about how the stock market is overvalued, how this is a top, and that you should feel very, very scared. But, should you even bother worrying about a market top? Not if you aren’t talking about short-term investments. If you are talking about a 401k , an IRA, or any other form of long-term investing, you should ignore all the market top talk. What To Do For a Market Top The biggest problem with a market top is knowing WHEN it is going to happen. Remember, the stock market does not move based upon absolute truth. Rather, the stock market is a popularity contest where people vote for companies, or their shares, by buying them, and vote against companies, or their shares, by selling them. It is driven entirely by people (and computer programs made to anticipate people’s reactions, but that is another article). What that means, is even if the market really is truly overvalued, right now, today, it still does not mean that the sell off will begin …

Another Stock Market Record

July 12, 2017 by Finance Gourmet

For the past year (and longer) we’ve been reading article after article about how the stock market is set to implode, and yet, here we are… another intra-day record high for the Dow Jones Industrial Index. The Market Will Go Down… Eventually The truth is that the stock market will go down sooner or later. It always does. And, when it does, many of the people writing these now year-old doomsday articles will attempt to claim credit for “predicting” the market crash. (Although, there may not be a crash. A simple months-long 5% correction would take care of a lot of the market’s pricing issues.) What they won’t do is tell you how much money they would have cost you if you had listened to them while the run up continued. Consider this: The Dow is up over 17% for the 1-year period. In other words, if you had gotten out when last year’s alarm bells started ringing, you would have missed a 17% increase in your investments. That 17% increase would have a very large cushioning effect on any sort of coming 10% correction, or even a 20% crash. In other words, if you had been listening to these …

Best Argument For a Coming Recession

May 4, 2017May 2, 2017 by Finance Gourmet

Recently, I wrote about how lots of various financial analysts and pundits predicting a coming stock market crash or imminent recession are more interested in trying to take credit for making a guess than in accurately predicting what the facts actually support. However, there is one very good case for predicting a recession coming in the next few years. Predicting Recessions It is as likely as not that the next recession will trigger the next stock market correction. Of course, the opposite has been known to happen as well. Most recently, the internet bubble popping took the economy with it, when it caused the bankruptcy and fire sale of dozens of formerly high-spending technology companies and sent their employees flooding onto the market, just when the demand for them vanished. On the other hand, the slow motion implosion of the housing market, and its affects on poorly leveraged, and managed, banking companies, followed by their panicked actions to stay alive, is what caused the so-called Great Recession of the Bush the Younger era. Is Acorns safe? Read this review. These days, most analysts like to predict a stock market crash based on “knowing” that the market is over-valued, or propped up …