Money FAQ - Investment and Stocks

What is "Selling Short"?

ACCER1 — Wed, 06 Jun 2007 17:26:10 +0000

Short selling involves selling borrowed securities in the hope or expectation of replacing them at a lower cost in the future. Short sales may be used conservatively, as when you try to lock in the takeover premium in a stock-for-stock merger. Short sales may also be used more aggressively to try to profit from an expected decline in the price of a specific security. Although each stock fund is allowed to sell securities short, most funds have historically limited themselves to the more conservative uses of short sales.
Is there ever a time to use this aggressively? Why would you?

What are Liquid Securities?

ACCER1 — Wed, 06 Jun 2007 17:23:42 +0000

The vast majority of the securities that various groups buy are supposed to be traded on an organized stock exchange or an established over-the-counter market and are considered "liquid" securities. Occasionally, they may buy a private placement of stock that is not immediately marketable, shares of a public company that are temporarily restricted from open market trading, or shares that are so inactively traded that there is no publicly available market price that can be used to value the security position on a day-to-day basis.

Which Funds are best for investing in options and futures?

ACCER1 — Wed, 06 Jun 2007 17:21:29 +0000

Some stock funds are allowed considerable investment flexibility, and each fund is bound by a slightly different set of investment restrictions. The Prospectus and Statement of Additional Information for the funds describe these restrictions and risks relating to each fund. However, I don't know much about futures. I do know that with "Put and Call Options" Groups are allowed to buy and sell options in all of the stock funds. As a practical matter, they have sold (written) puts and/or calls in each of the funds but they generally do not buy puts and calls.

What Funds invest in foreign stocks?

ACCER1 — Wed, 06 Jun 2007 17:17:38 +0000

A small percentage of each stock fund may be invested in foreign securities. However, some groups rarely buy foreign stocks because they generally fall outside their "circle of competence." Differences in language, accounting standards, culture, and unfamiliarity with foreign economies and business practices place some groups at a disadvantage to others who have more experience in foreign markets.
Does anyone know of any groups with experience in this matter?

What is the best Investment once you reach 45?

writealways — Sat, 02 Jun 2007 20:42:51 +0000

My brother is soon to be 45 and only has his employment retirment fund that he's put minimal in until now. I've tried to encourage him to increase his contribution but until he started having to think about his kids college tuition and saw the trouble his in-laws are having making ends meet, he hadn't thought it important.

Investing in Futures

writealways — Fri, 01 Jun 2007 20:30:09 +0000

Since I'm from Mississippi, I'm familiar with futures and am trying to find out if this would be a good investment for me. I know there is a good deal of risk involved, but if you're careful, wouldn't the return be better than regular stocks? Do you go to the same broker as when you buy stocks?

I'm looking at corn and rice because I'm familiar with them. I'm also familiar with cotton, but can't find anything about futures with cotton.

Would oil or gasoline or natural gas work the same way as futures or would it be under the company as stock?

Choosing an online Broker

writealways — Fri, 01 Jun 2007 17:03:52 +0000

I'm trying to decide on an online broker. Do you go by reviews from people who've used their services before or by their affiliations? So far, I haven't found much information to alert me if a particular stockbroker on the Internet is competent or even if they might be scamming you. So far, this is the only site I've found I feel comfortable with. http://www.stocksandmutualfunds.com/broker-comparison-chart.html

Any help with this would be really appreciated! I'm trying to make an informed choice and I'm not a financial person at heart.

Best Resources For Stock & Trading Data

angelicwriter — Fri, 01 Jun 2007 16:49:12 +0000

I have roughly around $2,000 to invest in stock. Possessing the proper knowledge before making a specific stock trade is very important because it's your money being invested. If you don't have the knowledge and experience of a Wall Street stock broker yourself where can you find vital information on stocks? What are the best resources for stock & trading data that every investor should read and pay close attention to? What are the best books, media, news, & online resources to study?

Are Penny Stocks A Safe Investment?

angelicwriter — Fri, 01 Jun 2007 16:29:03 +0000

Being new to the stock market and a little overwhelmed with the large range of choices of stock to choose to invest in, the penny stocks caught my attention. Common stocks that trade for less than $5 a share seemed like a good start for someone new to investing. I know the risks are high for losing but with such a small investment it doesn't seem to be too big of a loss. I heard that there is a lot of penny stock fraud and scams such as the illegal pump and dump scheme so is it better to not invest in a penny stock and invest in a higher priced stock?

401K Management

technoflutemom — Thu, 31 May 2007 20:56:08 +0000

I am in my early 30s with just over $100K in my 401k. We have a balanced distribution in the fund and have had very good growth over the past few years. At what age should we start moving toward a more conservative 401k profile? Right now, the 401k is my only retirement fund, although we also have a savings account for short term savings and CD for midterm savings. Should I be exploring other options such as a Roth IRA? What benefits would that offer, and what percentage of my investment money would you recommend I put in an IRA rather than the 401k?