1. Technical analysis:

   Like the name suggests it is the study of the stock markets over a period of time to predict how they will behave in the coming days. Meant strictly for the experts the charts use complicated mathematical analysis to sense a possible trend. Once the trend is spotted, assuming it will continue over the next few days, you have the ability to predict the market.

2. Fundamental Analysis:

   Again a mathematical method, it seeks fundamental value of stocks hidden in the stock market. Also known as quantitative analysis, this method involves gaining insight into the company's current performance to predict the future. Fundamental analysts look at revenue, expenses, assets, liabilities and all the other financial aspects of a company to derive at the companys intrinsic value and how it will perform in the future.

3. Follow your instinct:

   This works! And works pretty well in many cases. Millionaires have been made simply because they had the guts to listen to their gut feeling and take the right decision. If you are an experienced player, over a period of time you tend to understand how the market works, what the factors that influence the markets are and how to spot a trend. That's right. You don't have to be a technical analyst to understand trends. You need to be smart. You need to understand the factors that will cause a particular stock to rally in a falling market and vice versa. Read as much financial news as you can and listen to your heart.

4. Consult your neighborhood astrologer:

   If nothing else works, get to the nearest astrologer or tarot card reader and he will be able to predict the market for you!
   
   No amount of analysis will help you if you do not know how to use that information. Do not get into the part of predicting the market but get into making the most of your investment. Understand group psychology and know how people think when faced with volatile markets. Have patience and stand firm on what you have decided upon. When the whole world was against the greatest investor of all times, he had the guts to stand firm and have patience to reap the fruits of his investments. Do not follow investments without ample study. Understand the stock you plan to buy, the financials of the company, it's values and it's plans for the future.

Just follow the simple rules above and you will never feel the need to predict the market; you will be content reaping the benefits!

What are stocks?

When you buy stocks, or shares, you're buying part of a company. A company will offer a number of shares for sale. You can buy some, hold them as long as you like, buy more, or re-sell them.

Buying and selling is also known as trading. Once trading begins, the price of the stock can rise or fall.

Most stock is bought and sold at a stock exchange. Examples of stock exchanges are Nasdaq, the New York Stock Exchange, and the London Stock Exchange. You can also buy over-the-counter (OTC) stocks, which are not listed on stock exchanges.

You don't buy and sell stocks yourself, but act through a stock broker or brokerage firm. Usually you make the decisions, and the broker represents you on the market. You can also choose to let the broker invest your money for you.

You might buy stock at a low price, and sell at a higher price to make a profit. Or, you might invest in companies that will pay regular dividends over several years, for a more stable flow of income. The stock you buy depends on your financial goals, and your personal investment style.

There are two types of stocks: common, and preferred.

• Common stocks give you voting rights in the company. If you want to stage a hostile takeover, you would buy up as many voting shares in the company as possible. In general, common stocks give you a say in the way the company is run. Dividends fluctuate, depending on the fortunes of the company.

• Preferred stocks return a fixed amount, with regular payments, but you have no voting rights. If the company has financial problems, the dividends on preferred stocks are paid before those of common stocks.

A company pays dividends in cash, or in shares. Taxes may apply to cash dividends.

Price of Stock

What determines the price of stock?

Broadly speaking, the price of stock depends on supply and demand. The more people buying the stock, the more its price rises.

The market price of a stock is not the same as its intrinsic (real) value. A stock price can rise, simply because other people are buying. People may buy in hopes of quick wealth, or because they have emotional ties to the product or service - or, just because everyone else is doing it.

Scams, such as Pump and Dump, take advantage of this. Worthless stocks become inflated in price by increased buyer activity, based on hype and high-pressure sales.

Avoid stock market scams and bad investments, with five simple rules.

1. Research, research, research.
   
   Research is your best friend on the stock market. Usually, companies offering stock for sale must disclose financial statements and other company information. Know the company history, the key players and company structure. Look at past performance, and strategies for the future. Know the industry as well as the company. Examine the economic factors affecting its success or failure.
   
   Never invest in a company or industry you don't understand. If you do, it's not an investment. It's a blind gamble.

2. Put personal feelings aside

   Emotional factors can affect the price of stocks. Often, stock prices are driven by greed, emotion, or pure ignorance.
   
   Keep a cool head. Don't buy out of impulse or passion.
   
   Don't buy into wind power, for example, because you believe in saving the environment. Buy because the company has a solid performance record, a strong demand for its product or service, and good potential for growth and profit.
3. Diversify your stock portfolio
   
   Buy stock in more than one company. If you're just starting out, choose at least three or four different companies. Even the most reliable stocks can take a sudden dip.
   
   For instance, Maple Leaf Foods (MFI) stock was $16 a year ago. Recently, several people died of listeria found in Maple Leaf meats. In August of this year, stock hit an all-time low of $7.60.
   
   MFI stock is now rising again, largely due to investor interest in the low prices. The company has a solid history and will probably bounce back. However, this illustrates the potential for a sudden price dive even in established companies.
   
   If your portfolio includes several investments, you have a backup if one or two do poorly. Even seasoned investors make mistakes, or are subject to factors beyond their control.
4. Know when to hold 'em
   
   If a company's revenues go down, so do the stock prices. Is it temporary, and will the company recover? Wise investors know when to hold their stock, and when to cut losses, and sell.
   
   Don't listen to gossip or rumors. People will offer stock market tips, or claim to know stock market secrets, wink wink nudge nudge. Inform yourself, do your research, and make your own decisions.
5. The greater the risk, the greater the reward
   
   In general, the more risk you're willing to take, the more potential for high return. Also, the more chance the investment will fail, and you lose your money.
   
   Reliable companies command higher stock prices. Returns are less, but so is the risk.
   
   If a stock offers high return with low risk, be wary.

Experiment without Spending

Before investing your hard-earned money, set up a mock portfolio with several stocks. Follow your investments online, and chart their progress. Amend your choices, "buy and sell", and watch them perform in real time, without risking a penny.

What is the Capital Gains Tax?

As usual, the tax man is after a piece of your pie. If you sell your stock at a profit, a capital gains tax applies. Taxes may also apply to stock dividends.

You have a capital gain if you sell your stock for a higher price than you paid. If you sell your stock for less than you paid, it's known as a capital loss.

If you hold your stock for longer than a year, it's a long-term capital gain. Under a year, you have a short-term capital gain. Short term capital gains are taxed as regular income.

Long-term capital gains holders pay a tax of up to 15%. However, in 2008, investors in the 10 - 15% tax bracket paid a long-term rate of 0%. This won't change until the year 2010, when the rate will go back to 15%.

Be aware of the tax advantages or disadvantages of any stock you purchase.

What's Your Investment Style?

Are you a hard-nosed rogue or an armchair softie? Does losing money fill you with stress and worry, or do you hunger for challenge? Are you looking for a quick profit, or a long-term retirement strategy?

Understand yourself and your goals before you invest. Read up on the investment styles and strategies of top investors like Warren Buffett, his mentor Benjamin Graham, and people like Kirk Kerkorian or Jesse Livermore. You'll find that their styles are different, but they all believe in the five simple rules listed above.

Stock Brokers

When you're ready to invest, choose a stockbroker or brokerage firm that you trust. Licensed brokers are either full-service or discount brokers.

• Full-service brokers charge a higher fee. They provide information, details and guidance to the investor.

• Discount brokers charge a lower fee, provide minimal information, and usually don't give any guidance.

Decide on the type of service that's best for you. Again, research is your friend.

With a basic understanding of the stock market, you can make confident, informed decisions, and increase your chances of investment success.

Ben Graham is the father of two basic stock market disciplines: security analysis, and value investing.

Graham believed that stock market prices were often wrong, because of the emotional factors involved. He developed the concept of "Mr. Market", an emotional and unstable character, to explain fluctuations in the market.

Mr. Market appears every day in your office, and offers to sell you some stock. One day, he might be hysterical with glee, and the next he's morose and hopeless. The intrinsic value of the stock doesn't change, but the price varies with the moods of Mr. Market.

Graham acquired his wealth by targeting undervalued companies. He looked for companies whose stock prices were temporarily down, but whose fundamentals were sound for the long run.

Ben Graham is the mentor of investment guru Warren Buffett, and has influenced several generations of stock market investors.

Warren Buffett b.1930

Also known as the "Oracle of Omaha", Warren Buffett is the world's richest man in 2008. He uses a value investing strategy influenced by Ben Graham.

Buffett buys companies as long-term investments, at a discount to their intrinsic value. He stresses the importance of research, and looks for companies with strong management, good potential for long-term return, and an attractive price.

His investment strategy involves discipline, patience and value. While he claims no investment favorites, Buffett is currently interested in family-owned businesses in Europe, and predicts hard times for newspapers.

Buffett owns Berkshire Hathaway, whose first-quarter profit plunged 64% this year, with $991 million in investment losses. In July, Berkshire Hathaway offset the loss by announcing the sale of Anheuser-Busch to a Belgian company for $2.49 billion, earning a profit from the purchase price of 1.9 billion in 2005.

The world's richest man pays himself a salary of $100,000 a year. It's a figure that hasn't changed in twenty-seven years.

Peter Lynch b.1944

Peter Lynch bought into Automatic Data Processing (ADP) and Yum! Brands' (YUM) Taco Bell, before Wall Street noticed their existence.

Peter Lynch uses a bottom-up approach and concentrates on a company's fundamentals, instead of listening to market chatter. He invests for the long run, and pays little attention to short-term market fluctuations.

His chameleon investment style adapts with the times, but he relies on core principles. He believes that no one can predict economic fluctuations. Lynch advocates research, and warns against long shots for building wealth.

Kirk Kerkorian b.1917

Kirk Kerkorian turned 91 this year, and has a net worth of $16 billion. Known as the father of the mega-resort in Las Vegas, Kerkorian is a self-made man, who started earning money for his family at age nine. As a young man he learned to box. Under his brother's tutelage, Rifle-Right Kerkorian fought his way to the Pacific amateur welterweight championship.

In World War II, Kerkorian learned to fly with the Royal Air Force. After the war, he bought a Cessna and began flying wealthy passengers into the small railway town of Las Vegas.

He quickly saw the potential of Vegas. In 1947, Kerkorian gave up gambling, bought a local airline for $60,000, and renamed it Trans International. He operated the airline for twenty-one years, then sold to Transamerica for $104 million.

His most famous success was a piece of Vegas land, purchased for just over $960,000, in 1962. He leased the land to Caesar's Palace for four million, and sold it to them six years later, for five million more.

His fortune comes from shares in DaimlerChrysler, MGM Mirage (MGG) and Metro-Goldwyn-Mayer (MGM). He has a talent for identifying opportunities early. Kerkorian will buy, sell and then return to a company. He twice sold MGM, then took it over for a third time in 1996.

Kerkorian's recent investment in Ford Motor Co. kept stock trading at its highest levels in almost six months.

Jesse Livermore 1870-1940

Jesse Livermore made and lost millions, and once declared bankruptcy. He was notorious for short selling during the stock market crashes in 1907 and 1929, to the point that JP Morgan asked him to stop.

Livermore focused on markets as a whole, instead of on individual stocks. He would adopt a buy-and-hold strategy in a bull market, and sell when it lost momentum.

His fluctuating fortunes came from breaking two of his own rules: never listen to stock tips; and, always cut losses short.

Livermore always had an exit strategy. He committed suicide in 1940, owing more than a million dollars.

Edward Lampert b.1962

Lampert is Chairman of Sears Holdings Corporation (SHLD) and the founder of ESL Investments, Inc. Lampert created ESL at the age of twenty-five, in 1988. The company's returns average 29% a year, and Lampert is number sixty-eight on the Forbes list of 2008.

He looks for a mature business that is easy to understand, and has a strong cash flow. He targets companies with the potential to generate a large cash flow over the long run. Lampert is less focused on the management team, and willing to bring about changes in the company structure to realize a profit.

His numerous investments in the retail sector include Home Depot (HD). Other investments include CIT Group (CIT) and AutoNation, Inc. (AN).

George Soros b.1930

George Soros is a Hungarian-born American investor, speculator, philanthropist and political activist.

He's infamously known for breaking the bank of England on Black Wednesday, 1992, by selling short more than $10 billion worth of pounds.

His investment strategy revolves around the knowledge that financial markets are chaotic, and prices depend on the human beings who buy and sell. Often, buyers and sellers act out of emotion, rather than cool logic.

Soros looks for opportunities by studying value and market price of assets. He follows a theory of reflexivity, based on the idea that investor bias affects market transactions.

These days, Soros prefers philanthropy over speculation. By 2003 he had given away more than four billion dollars to help the underprivileged, in nations such as South Africa, Central Europe and Russia. In 2007 he gave $100 million to fund internet access in Russian universities.

George Soros holds shares in BUCY - Bucyrus International Inc.; ANR - Alpha Natural Resources Inc. and WIND - Wind River Systems Inc.

Carl Icahn b.1936

Icahn made headlines in 1985 with his hostile takeover of TWA. He's known as a tough negotiator and clever market strategist.

Icahn takes minority stakes in public companies and pushes for change. He does not believe in following trends. Icahn says, "... consensus thinking is generally wrong. If you go with a trend, the momentum always falls apart on you. So I buy companies that are not glamorous and usually out of favor. It's even better if the whole industry is out of favor."

In May, Carl Icahn took on internet giant Yahoo (YHOO). Icahn bought as many as 50 million shares, preparing for a proxy fight to remove Yahoo's Board of Directors. On July 21, 2008, he agreed to join the Board of Directors and end the hostilities ... at least for now.

Philip Fisher 1907-2004

Fisher was a formative thinker in the growth stock school of investing. His book, "Common Stocks and Uncommon Profits", is a standard for investors. Fisher believed in investing for the long haul, and wrote that the best time to sell a stock was "almost never".

Fisher did extensive research to help build his wealth, and preferred the technique he called "scuttlebutt" or the business grapevine, to seek out information.

Fisher bought Motorola in 1955, when it was a radio manufacturer. He held onto it until his death in 2004.

William J. O'Neil

At the age of 30, O'Neil was the youngest ever to have a seat on the New York Stock Exchange. He's the founder of Investor's Business Daily, and author of two successful books.

O'Neil uses a mix of quantitative and qualitative strategies in his investing approach.

His investment style is to seek out the growth stocks that have the highest profit potential and will show a swift price rise. He coined the acronym CANSLIM to identify such stocks.

Bill O'Neil's motto is "buy the strong, sell the weak." He seeks out companies that perform as leaders, with something new to offer, and a proven rise in current and annual earnings.

Every great investment guru has an individual approach, but all follow the same basic rules: know the company and the market; never listen to market gossip; and always keep a cool head.

Have the clouds lifted and are the crises a thing of the past? Although there are a lot of bad loans still in the bank's portfolios - mortgages that are either in or near default, credit card debt of people in bankruptcy, and loans to builders that may not be paid, the banks are nevertheless making money on new loans. The yield spread (the difference between short-term rates paid on deposits and long-term rates received on mortgages) is very favorable for the banks currently. Wells Fargo (ticker: WFC), although taking a large write-down on non-performing loans, just announced a profitable quarter and increased its dividend. Even Citibank (ticker: C), which was threatened with insolvency before raising capital last year announced a profitable quarter and maintained its dividend. Both banks are paying in excess of a 5% dividend.

Here are the positives for bank stocks for the next three-to-five years: the worst news is already out and included in stock prices, the large bolus of adjustable rate mortgages has already moved through the adjustment cycle with just another six months of these large monthly volumes of adjustable rate mortgages getting reset, the steep yield curve contributing to profitable current operations, and the Federal Reserve Bank not taking steps to increase interest rates. These trends point to banks working their way out of the crisis back to profitability. Strong banks with good management will survive, their stock prices will increase, and dividend yields will shrink. Wells Fargo (WFC), Citibank (C), Bank of America (BAC), Regions Financial (RF), and Wachovia (WB) should survive the storm that hit the banking sector and provide favorable long-term returns.

An analysis that was released in 2003 mentioned, in 10-12 forthcoming years the price of gold will reach USD 8,000 per Troy ounce. At this moment (June 2008) the price of gold is around USD 900 per Troy ounce. The price 8,000 was estimated happen to 2013-2015 so if in 2008 someone invested USD 9,000 for gold, then to 2013-2015 he will have gold with a value of USD 80,000. In other words he scooped up the profit from the price increase that reached 888,89 percent.

If that happened, then there is not any other instrument of investment that could overcome the gold, even the fixed deposit or the share. One factor we can pay attention: gold always experienced the price increase since the ancient time. The price increase of gold was most fantastic happened in 2001 where at the same moment paper currency precisely experienced decline. At this time the price increase of the gold is speeded up by the rate of inflation and US dollar fluctuation. The expert says gold does not have the effect of inflation or zero inflation effect.

Gold is a unique commodity and only available in limited amount in the world.

The choice of gold investment at this time was thought most beneficial compared with the other option because it is "immune" inflation. Gold is very good for investment diversification after having investment in the share or property. Recently producers of gold experience the decline in production so the price of gold is confirmed will always rise.

The investment observer said that gold demand will rise when two matters happen: the condition of a country is uncertain and when inflation rate is high. In such condition gold is thought as safest investment. Other observer added when high inflation occurs, the price of gold will rise higher than inflation rate. Statistics showed, when inflation rose 10 percent, then the price of gold would rise 13 percent. If inflation rose 20 percent, gold would rise to 30 percent. However, when inflation 100 percent, then gold price will jump to 200 percent. Ought to be considered also, the price of gold will tend constant when low or negative inflation occur.

However, gold investment also had several weaknesses. Several of them are as follows:

1. Not practical. The prospective investor must also consider that buying gold is impractical
2. Difficult storage and handling. When the storage is poor, oxidation process can occur and it can change the colour of gold. The storage of gold in huge amount often is not enough to be placed in the house. The investor could lease safe deposit box available in banks for consideration of the security,
3. Gold tended to be the speculation implement because did not produce revenue stream.
4. The value of gold only depended on the perception that is easy changed.
5. Risk of lost, can be stolen or robbed
6. The Investment return is relatively stable and not more stimulating when being compared by the share or property.
7. Gold investment also really is not suggested for short-term investment because of it's hedging characteristic.

We had better not keep physical gold when investing. Generally the form of gold is bar resembled coal, 95 percent (22 rust) or 99 percent (24 rust). This kind is thought as the most beneficial for investment because when it is sold, the price will follow international standard. The other form is coin shape. There is also gold that has the shape of jewellery. This form in fact not more beneficial for investment because the investor must bear the price of the production and the model of jewellery is subjective. There is also bank that has gold savings product. To buy and sell gold could be carried out in the jewellers shop. The update price of gold can be monitored in the Kitco site, Gold Price, or UBC Gold.

As for whether it is the right time to buy gold, the expert still suggesting the prospective investor to wait and see. The market was still fluctuating, so it's better wait and see before deciding to buy gold. However if you will invest for long period, you may buy gold at this moment.

For example, you might buy 25 shares in a company which we will call Alpha and each shares costs you $1. You total investment is $25 for those 25 shares.. You put a stop loss order on your investment, predetermining that you will not risk losing more than 20% of your investment. This way, when the stocks lose $6.25 you can sell them to make sure that you don't lose any more money. You will be protecting yourself against losing more than 20$ of your original investment by putting the stop loss order in place as soon as you buy them.

The big advantage of a stop order is that you don't have to keep checking your stocks every day because once your predetermined figures are reached, buying and selling will take place automatically. There is no need to worry in case you have missed major changes in the price of your stocks which can happen several times a day during active periods. This is very useful if you are a busy professional person who finds it difficult to find the time to do this.

The disadvantage here is that you stocks may be rising rapidly in price but you can't change your mind and hang on to them a bit longer in the hope of an increase in your profit. you may notice that one of you stocks has shown no losses for a long time and is holding steady but you have to sell it once it shows the percentage of profit you decided on in the beginning. You could be losing potentially larger profits by doing this.

A stop order can protect your investment and regulate losses but if it is applied when it isn't really needed to protect an investment, it can stop you making higher profits and actually cost you money in the long run because you cannot change your mind if your stocks start performing much better than you had thought they would..

They are traded on the Toronto Stock Exchange and can even be acquired by investors who have small amounts of cash to invest. I have followed most of these for several years and have not changed my mind about them being the best way to make your money work hard for you. As with most income investments, buy and hold is the most sensible way to maximize the benefit to your financial situation.

All yields shown are based on recent (2008 April) market prices and are before income tax.

1. Sentry Select Diversified Income Trust
   

   Followed for 63 months, generates at least 13%/year yield

2. Rogers Sugar Income Fund

   Followed for 50 months, generates about 9%/year yield

3. Yellow Pages Income Fund

   Followed for 36 months, generates about 10%/year yield

4. Canwel Building Materials Income Fund

   Followed for 35 months, generates about 16%/year yield

5. Cominar Real Estate Investment Trust

   Followed for 28 months, generates about 6%/year yield

6. Boston Pizza Royalty Income Trust

   Followed for 27 months, generates about 12%/year yield

7. Penn West Energy Trust

   Followed for 22 months, generates about 13%/year yield

After looking at many different types of investments over the last 20 or more years, including those that generate regular dividends, and those that have appreciated in value, I have come to the conclusion that speculation on market price is not for me. Regular distributions on a monthly basis are what suits my investment plan the best and produces the least stress for the greatest gain. If you are interested, each of these have a web presence, provides a history of their distributions, the underlying company value, the tax implications and the possibility of future growth.

These are not investments on which to speculate. Having said that, in the past couple of years, with the economic climate, and the changing Canadian tax laws which effect some of these investments in 2011, there have been opportunities for larger investors to generate significant gains using the buy low / sell high strategy based on market price fluctuations. However, I advise sticking with regular income as a goal, and selling only when absolutely necessary. This is a hard lesson I have learned over the last 5 or 6 years and I recently thought that sharing this experience with others was something I felt compelled to do, even though this information may be "old news" to some.

Who Wouldn't Be Nervous?

I was teaching a Securities Analysis class at UCLA when nearby Orange County declared bankruptcy. A student asked me to explain why. Another student quipped, "It's too complicated."

I explained it within ten minutes, and not one student failed to understand it. The one who thought it would be too complicated said, "It that it?"

Yes. This stuff is easy to understand when it's explained in English.

The Dollar

The value of the dollar is down. The value is measured against other currencies, though. That's good news and bad news. Good news is other countries can buy more of our stuff. It used to be that a Euro was worth about a dollar. Now one Euro buys about $1.50. The stuff we sell overseas is half off. Winner? US companies who sell a lot of stuff overseas.

Bad news is we have to spend more of our dollars to buy their stuff. Like oil. You might have noticed that oil's gone up. I can bore you to death with a myriad of other causes, but one very big one is that our dollar is worth less. We have to spend more of them to buy imported stuff. Winner? Overseas companies who sell us a lot of stuff.

Unemployment

Unemployment is up. This statistic is as important as whether you have a job. If you do, it's just a signal of a slowing economy. If you don't, it's the end of the world. Either way, the question is, why have businesses let people go? The answer is maddening.

If you own a business, and everybody is saying that people have stopped spending, you are unlikely to expand your business. The data say that spending is holding, though. We may be buying at WalMart rather than Macy's, but spending is not down. It's a fear thing - everybody's talking about bad times, so we act like times are bad. That includes business owners, who decide whether to hire or not.

Housing Market

The housing market situation is a correction. Housing prices, like stocks, gold, cars and taxes, go up and down. These corrections happen about every decade or so. Some are mild - sometimes prices are just stagnant for a few years, then begin normal appreciation. Some are severe. This one's severe.

The severity was caused by lenders making "zero down" and "no doc" loans. Zero down means what it sounds like. No money down. Well, if housing prices go down at all, people who put no money down will owe more that the property is worth. No doc loans are loans that require no documentation to prove things like how much you make and how much you've saved.

If housing prices always go up, there's no problem. There will be equity in the price appreciation. But nothing always goes up. Some of these zero down people now owe more than their property is worth. And there are lots of them.

They probably wouldn't have qualified for a conventional (20% down, 30 year mortgage, with payment no more that 30% of gross income) loan. Now we know why.

So, they lose their homes, and a lot of these homes go on the market. When there are more sellers than buyers, sellers lower prices until buyers start buying. That happened to internet stocks and now it's happening, to a much lesser degree, to houses. The last time it happened in housing was the early 1990's. We lived through that, and we'll live through this, too. By 2012, this will be forgotten by all except those who lost their homes.

Stock Market

In a normal (20%) correction. Companies that get most of their income from overseas (see Dollar) are doing best. Housing stocks and housing lenders (see Housing) are doing worst.

The reason no one knows for sure whether we're in a correction, is that a correction is two consecutive quarters of contraction (negative growth). We won't know until July whether that's true.

We do know that people feel less rich because they don't have oodles of equity in their house, and while spending is not Decreasing, it's not likely to go up a lot. And consumer spending is 2/3 of US Gross Domestic Product.

Corrections happen about every ten years or so, and the last one was in 2001. Since the stock market tends to ‘discount' prices six months in the future, most of the smarter people I listen to think that the economy will improve in the second half of this year, so the stock market is probably about finished correcting.

Nobody Can Get a Loan

Banks have to keep a percentage of their assets (which are loans) in cash. That is called capitalization.

When loans are bad, an extra amount, called ‘reserves' is put aside to cover people who don't pay them back. Right now, a lot of people aren't paying back mortgages (see Housing).

Because banks have to put this extra amount aside, they don't have as much to lend out. So, they only lend to people with really good credit and lots of assets. If you're not one of those people, banks don't want to lend to you right now. They have enough problem loans.

If your credit is good and you have lots of assets, you'll have no problem getting a loan.

Bailing Out Brokerages

J.P Morgan bought Bear Stearns for a song. Sort of.

Bear put lots of investors in mortgages. Not regular mortgages, but little slices of mortgages. Here's how it works.

Banks make home loans and bundle them into packages. Here are a bunch of loans, sliced into pieces - some with only the interest part of the mortgage payments, some with only the principal part. Because mortgages were very highly rated by bond insurers, little old ladies bought them for income.

Some of these loans, though, were ‘no down' and ‘no doc' loans. Some weren't. When these loans started to be problems, they weren't owned by the banks that made them. They were owned by hedge funds, mutual funds, and lots of little old ladies who bought little pieces of them from brokers.

Bear had a lot of these things. No one knows how many, or what they're worth.

Before they were bought by J.P Morgan, Bear's book value (my favorite way of valuing a financial company) was about $74/share. On the following Monday, there stock was selling for $2 and change/share. That's because nobody, not the Fed, not J.P. Morgan, not Bear, nobody knew how many of these things were on their books. They just knew there were a lot.

The Fed knows how nervous people are, and didn't want to have a brokerage failure, with people panicking about their money market accounts and thinking their accounts were worthless. So they were very, very persuasive with J.P. Morgan about buying Bear. They made lots of promises to help if things went wrong, because they thought it would be cheaper than a panic.

The Sky is Not Falling

This is a rough patch. In the next president's mid-term, these stories won't make the first five pages of the paper.

Tourists and investors should include Oman in their itineraries because, for one, Oman is in the stage of developing its state as a haven for economic growth and prosperity. Such is the investment climate which Oman presents. Investment opportunities range from petrochemicals, fertilizers and manufacturing industries that depend on cheap energy, not to mention the unlimited supply of oil deposits that are still being discovered as of the moment. Oman's strategic location opens the doors to a large energy source in the world which enhances its economic capacity.

Much like its Middle Eastern neighbor countries, this country looks forward to a brighter future from its diverse real estate, which is home to popular tourist attractions. Oman is a promising tourist destination with its large hotels and tourist resorts. Wadis, deserts, beaches, and mountains are areas which make Oman unique to its neighboring countries. Jebel Shams is Oman's tallest mountain, highest point, and is a popular destination for tourists who like to go camping. Most of the major malls are located in the capital. Tourists may also enjoy activities such as sand skiing in the desert, mountain-climbing, camel racing, and camping

Since Oman's economy has been drastically transformed in the late 70's to the present, the country is set to face major developments to support its economic and social plans. Having been ruled by a Sultanate, it is economically stable and generally free from party politics. This allows national policies which are market-oriented and encourages private sector development as the mechanism for prosperity and growth.

Oman's commercial oil export which begun in the late 60's continually grows as more oil fields are still being discovered and developed in the different properties in the country. Investors are ensured of financial growth and prosperity since the country itself never ceases to uncover oil ventures which have helped the country flourish in the oil industry.

Although oil prices tanked in 1998, Oman has been able to bounce back by diversifying its economy through emphasizing on tourism and natural gas. No investment will lose with its financial endeavors in this rich country since Oman's Basic Statute of the State expresses in Article 11, that, "The National Economy is based on justice and the principles of a free economy.”

A free market is ideal since prices are determined generally by demand and supply and is not interfered by the government in terms of regulation of costs, supply and demand. This is one of Oman's attractive investment features. Oman's free market policy is ideal for any organization planning to put up their business in it primarily because the prices of goods and services are arranged by the mutual consent of both sellers and buyers. Thus, parties with business negotiations in the country have a lot to gain by investing in Oman. Countries which implement this principle, such as Hongkong, Singapore, Australia and other industrialized countries are assured of prosperity and excellent economy which benefits not only their citizens but the world's economy as well.

Oman envisions a lot of development plans which shall be realized by 2020 with regard to securing its economic growth. This nation is basically ideal for anyone who aspires for a good life, as not only is it a country full of economic and investment opportunities but one where business can be mixed with life's pleasures.