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   <a href="http://e-articles.info/e/a/title/The-pros-and-cons-of-stock-trading/">The pros and cons of stock trading</a>
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1. Mutual Fund Basics
Over the years, the stock market has outperformed any other investment. Unlike a mutual fund, however, individual investors frequently can’t purchase a large number of different securities to diversify their investment risk. Buying shares in a mutual fund solves this problem. When you invest in a mutual fund, the diversity of the portfolio reduces the risk of losing your total investment. Selecting the right fund may be difficult, but you can find plenty of online help. Assume that you have $1,000 to inves...

2. How to Screen Mutual Funds Online
The Internet provides a variety of mutual fund screening tools that sort thousands of mutual funds by criteria that you select. For example, you may want one type of fund for your children’s education — something long term because you don’t need the money for 10 to 20 years — and a different fund for your retirement to help you reduce your current tax liabilities. With these online screening tools, you can evaluate several funds that meet your financial needs. Most of the stock-screenin...

3. Advantages and Disadvantages of Mutual Funds
As a general rule, the first palce to start analyzing a fund is by by comparing its expense ratio to similar funds. All funds have fees and expenses, but the amounts vary. In addition to sales and redemption fees, the mutual fund’s prospectus indicates the fund’s management and administration expenses. The fund’s investment advisor generally receives 0.5 to 1.0 percent of the fund’s average daily net assets. Administrative expenses include legal, auditing, and accounting costs, along with the f...

4. Buying Mutual Funds Online Using an Online Broker
You have many choices in how you purchase mutual funds. In addition to purchasing directly from the mutual fund company, you can purchase mutual funds through registered representatives of banks, trust companies, stockbrokers, discount brokers, and financial planners. To purchase mutual funds via the Internet, go to an online broker’s Web site. (I list a few examples later in this section.) Register by completing the online application form. You have to provide the same information you normally provide f...

5. What you have to know to determine the fair value of a stock and the right price
You can use several methods to determine the fair value of a stock. Throughout the following sections, I discuss three of the more popular methods of determining the right price for a stock: Fundamental analysis Technical analysis Market timing Valuing securities is important to your financial health. Stocks are more difficult to value than bonds. Bonds have a limited life and a stated payment rate. Common stocks don’t have a limi...

6. Researching a Company`s SEC Filing
In the United States, publicly traded companies are required to file business and financial information with the Securities and Exchange Commission (SEC). These reports are entered into a government-sponsored database called EDGAR (www.sec.gov), which stands for Electronic Data Gathering, Analysis, and Retrieval. The SEC’s EDGAR service provides downloadable data that can be accessed by individual investors. You also can save SEC reports on a disk and read them at a later time. One disadvantage of this free ser...

7. How to Choose the Best Stock for the Right Goal
Selecting your own stocks can be hard work. The exciting thing is that the Internet has much of the information you need, and most of this information is free. With the power of your computer, you can utilize Internet data to gain real insight. As you start to determine which stocks you’re interested in, you should be aware of the different types of stocks. Stocks have distinct characteristics, and as general economic conditions change, they behave in special ways. Write a short list of your financia...

8. What Are Stocks
When you buy shares of a company, you purchase part ownership in that company. As a shareholder, you also expect to receive capital appreciation — the difference between your purchase price and the market price of your shares — on your investment. If the company prospers, your shares of stock increase in value. If company performance declines, the market value of your shares also decreases. Shareholders are the owners of corporations. If you buy just one share in a company, you are a sharehol...

9. The differences between open~end and closed~end mutual funds
An open-end mutual fund has an unlimited number of shares. You can buy these shares through either the mutual fund company or your broker. The Securities and Exchange Commission (SEC) requires that each mutual fund company calculate the NAV (net asset value) of each fund every day at the close of business. A closed-end mutual fund is a hybrid: part mutual fund and part stock. A closed-end mutual fund is a publicly traded investment company with a limited number of share...