Many people make the use of a financial advisor the best kind of one to use as a financial advisor that you pay a salary to who is not trying to sell you something. The financial advisers who are selling stock just plain have too much of a “Ax to grind” and should be avoided.

If you choose to pick your own stocks you do not need a financial adviser because if you lose money the only one you have to blame is your self. Buying stock in a company is a gamble but at least you can cut down the odds if you can't read a financial statement. This is what tells you what kind of shape the company is actually in. By reading the entire document you can also get many clues as to how the stock is apt to perform.

The actual mechanism of buying a stock is something that is performed by a broker. The only way you can buy a stock directly is from a company you already own stock in providing they allow for internal stock purchases. This way you avoid paying a commission to the broker.

If you decide to do your own market research there are several inexpensive online brokers that you can use. They have the advantage of receiving an extremely small commission. Other brokers receive much larger commissions, but they are full service brokers. As they also act as financial advisors receiving a commission on the stocks they sell.

Just remember that by investing in the stock market there are times when you think you might just as well have gone to Las Vegas with your money but the stock market rises and the stock market falls and the sun comes up in the east every morning.

One thing for certain – the older generation had it right. They were right because the price-to-earnings ratio – an important measure to gauge stocks – really does matter. “Old School” wins.

The PE ratio was scoffed at, shoved aside and analyzed away by analysts and brokers at investment firms over the last bull run. They claimed we were in a “new era” of investing. Don’t you remember all the buy recommendations on stocks with PE ratios of 30, 40, 50 and higher multiples? Stocks like Cisco Systems, GE, Intel and Microsoft were trading at such high multiples not so long ago. Cisco, for example, was trading at $34 a share on Nov. 6, 2007 (it’s now about $18) and in that same year reported diluted net income per share of $1.17. That equates to a PE ratio of nearly 30. The problem was stock prices were bid-up and PE ratios far out-stripped corporate earnings growth rates. Earnings certainly weren’t growing at mid-to-high double digits annually. No big company can do that for an extended period of time. Yet, PE ratios were right up there at 30 and 40 multiples. Analysts came up with a bunch of hyperbole and other “egghead” concepts to recommend stocks garnering such high multiples.

Yet, I was taught and trained to be wary of buying stocks with PE ratios exceeding 20. That’s what some finance teachers espoused – and that’s what I’ve come to believe.

Now we face the credit crunch, a crashing stock market and a looming deep recession. Equities are being re-priced today; the stock market has declined some 35% over the last 12 months. And Americans - and Angelinos, in particular, are feeling the pinch. And with that drop has come the precipitous fall in the price-to-earnings ratio. Now investors are willing to pay a much lower spread above corporate earnings to own stock – i.e. the PE ratio. Those same stocks which sold at 30 and 40 multiples are now trading near 10 to 15 times earnings or less. GE is now at about $14 a share (down from $38 in 2007), and over the last 12 months earned about $2.00 per share. The stock now trades at about  seven times earnings. Stocks have gotten comparatively cheap. Many more bargains exist today in the stock market. A stock with a nine multiple seems to be a much better buying opportunity than the same stock trading last year at a 40 multiple of earnings. I don’t think the businesses of GE, Coca -Cola, and Wal-Mart has changed that much over the last five to 10 years. Yet, investors are valuing them radically different – and much lower.

Today, it’s back to basics with stock market investing - the gray-haired finance teachers and old textbooks were right all along - the price-to-earnings ratio is an important valuation tool. It’s a great barometer to use when buying stocks. It’s time-tested too.

From now on I’ll just trust “old school” when buying stocks and not some newly-created analytical Wall Street technique. #

Mr. Lux, formerly an Account Executive with Morgan Stanley, is a graduate of UCLA and holds an MBA in finance and has been involved in real estate lending in the Los Angeles area for over 20 years. He is author of the investment book, Exposing the Wheel Spin on Wall Street. Ted can be reached at: tedlux@ca.rr.com

While many individuals have been told that buy and hold is a valid and profitable method of investment, those that have done so may very well have no gains over the last ten years. Today's market has dictated that short term trading is the only way to invest that works and will be the only way that works for the foreseeable future.

The market has been quite volatile for several months. The VIX index, also known as the fear indicator, measures this market volatility. Over the last few months, the VIX has blown through previous highs and has maintained its lofty record levels. While this makes for nervous long-term investors, those who have the skills to play the momentum have been making money on the swings.

The upside rallies have stalled mostly because there is no reason to hold for the long term. The economy outlook remains weak as consumer confidence plummets. The United States auto industry is a shambles, the housing market continues to contract and commercial real estate is seen as the next shoe to drop. It's no wonder that once investors have gained six to ten percent on their investment, they sell that rip. Many have even chosen to sell short on the way back down to the bottom of the current range. It is what is working now and there is no reason to fight the trend.

When will buy and hold come back? Many investors are waiting for the S&P 500 to approach or cross its 200-day moving average. Others are waiting for the VIX to come back down to Earth - somewhere around a level of 30. Some positive news about the economy turning around may also prompt long-term investment. For now none of these scenarios are close to happening and the successful investors will be effective short-term traders.

What is negotiation?

Negotiation is the way of businesses, living and life. Negotiation is where one person wants to trade an item(s) for a certain number of different item(s) to another person. But the other person thinks his item(s) are worth more. So what the to people do is they keep on naming numbers in between what they both want until they both agree.

Why should I negotiate?

The reason you should negotiate is actually quite clear. You might not get a very good deal. For example, you are a kid and you want a candy bar from your friend. But your friend thinks that he deserves at least $20 for it. Do you still want it? If you want it that bad, you should negotiate. That way, you don't pay $20 for something that is really worth around $1. So you negotiate. You say it is worth 1 dollar and will pay two. Your friend insists that you pay 10. You think that it is still unfair and insist on 5. He say's, “7 dollars and no less” you have that much so you pay him. You still don't get a very good deal but at least you shaved off 13 dollars from the price.

When should I use negotiation?

There are all kinds of times you should use the process of negotiation. If you want to sell your business is a good example. You are a old man who has never married or had kids.

Because of this, there will nobody to look after your company once you die. Another matter is you are also to old to handle the stress. You are sad to part with the company that has made you so many million dollars. This matter makes you stubborn about how much money you sell for. A buyer has made an offer but is the only one to offer you at all.

He has offered you only three million dollars. You where hoping to go for 5 million dollars. You tell him that. He say's, “I'm not buying for more than 4 million.”

You say, “4 and a half”. “deal” he would probably say. You didn't sell for 5 million,

But at least you still got the better deal.

How can I make successful negotiations?

You can make successful negotiations by making you offer sound good. Nobody knows how much something would be really worth. You could only make an educated guess.

Don't offer too much more or too much less than the other person is. If that is to much more or less than the educated guess, well tell them you are not stupid. If they don't give in, then only if you want to you close the deal.

Forex can also be termed as "the wonder market" so for anyone without any information on Forex can get the information about it at social gatherings and newspaper headlines since it is the current hot issue in the town.

Concept

When it comes to liquid and market trading and exchange of currencies, the Forex is the best business to invest on. Other markets like the stock market and future markets have been replaced by the arrival of Forex that has come a very long way to existence today. With the improved technology and world globalization, Forex has become the force behind the global economy.

Working

The Forex is an electronic market amassment of various banks that operates throughout the day to trade on cash market. Forex operates in a way that you can buy a bargain to acquire an appropriate legal tender at a future price in time.

The numbers of participants that are associated with the market are currency speculators, large banks, financial markets, institutions, and multinational corporations. Competition in Forex is high because the prices are not fixed like in the stock market and the firms compete in pricing to stay in business. The trading involves the exchange of currency from one country to another.

Growth and application

Of late, foreign exchange markets have gained a lot of popularity around the world. Statistics have shown that the Forex puts in about three point nine eight trillion dollars each day. The period beginning April 2005 to April 2006, registered a thirty-eight per cent increase in Forex trading which is above two times that of the year two thousand and one.

The factors that have greatly influenced the steady Forex growth include market shares, liquidity and political climate. Sources from Europe stock exchange discloses that seven percent of the total revenue collection comes from foreign exchange market.

Foreign exchange is coming up as a strong tool in the world money market as it suits the needs of modern complex innovations, fancy lifestyles, increasing human needs, advanced international ties and the advancing niche of man.

On top of what I said in the video, I would like to add that the bailout plan gives more power to the federal government. I believe the power should be with the people, and not the government. The whole point of the revolutionary war was because of a government that had too much power. The government should fear the people. The bailout plan is allowing the government mess around in the business world. What happened to the concepts of a free market?

I know that there are arguments as to why it was quote "a good idea" like, with out the bailout plan the stock market will crash, and that could cause us to fall into a depression, and unemployment could skyrocket. Well my response to that is, we have systems to keep the market from crashing. Lets say we did fall into a great depression, well the money that was used in the bailout could have been used to created jobs. Hello?! Does anyone remember The New Deal! That's what Franklin D. Roosevelt put into effect to help against unemployment.

Honestly in my opinion I believe the media used scare tactics, to make us think everything was worse than what it really was. The Media is more about ratings than the actual news. But that's another story.

Please give me your responses to this. It would be much appreciated. I want to hear what you have to say, either if you agree or disagree with me. Give me facts and points please.

The opposite of a bull market is a bear market--- a time when the stock prices drop. A bear market can last from two or three months up to two years, and it can be a frightening time for the beginning investor. Here's some help to get you through it.

When buying stocks, you should do some good research into the companies you are buying. Are they steady, well managed, reliable? If they are good companies in the first place, you don't want to sell them in a bear market, at a loss. In fact, the bear market is a good time to invest more money in solid stocks.

What if some of your stock picks were a mistake? If you are at the beginning of a bear market and the stocks are worth more than you paid for them, by all means sell. You can use the money to buy better quality stocks. But if the price is temporarily down because of a bear market, think twice before selling.

Some companies do go under, whether there is a bear market or not, and when you research a stock and find signs that the company may be going bankrupt, it's important to sell while you can still get some money out of it. But in a bear market when nearly all stocks are down, some stocks can be quite far down without any real danger of the company going out of business. In these cases it may make more sense to hang on to the stock until the price recovers a bit, even if you've quite definitely decided that you want out of that stock.

Panic selling can be the worst mistake an investor can make. One morning recently the business news reporters were anxiously predicting, based on early trading, that the market would lose over a thousand points in a single day. Inexperienced investors were probably scared into thinking maybe they should dump their whole portfolio, even at a loss. But by the end of the day the market was only slightly down, and two 'up' days followed.

One stock investment strategy that can help even things out is the dividend investment strategy. It consists of investing in companies that consistently pay out dividends. The ideal dividend stock has a history of increasing dividends. A good place to research dividend stocks is www.dividend.com, which rates all of the dividend stocks based on several factors.

In this way, your stocks will make money for you in two ways. First, they will, over time, go up in price, so that you can sell them at a profit. Secondly, you will receive quarterly dividends. Before you retire, these dividends can be reinvested in stocks. After, you can use the dividends as a source of income.

Studies have shown that investment in the stock market outperforms other investments such as bonds and annuities, which often don't even keep up with the rate of inflation. It requires research and can be a bit nerve-wracking, but stock market investment can be a good way to provide for your future.

It's different this time

This is unlike previous corrections because...blah, blah, blah. Every market correction is different, obviously, because no two occur with identical financial circumstance. There are, however, similarities which include panic selling, increased volatility (which is just a description of the depth and the height of price swings) and the decrease in company earnings that accompany a recession.

Go to cash

That is the perfect advice if, and only if, you possess two vital skills

1. The ability to predict a market downturn before anyone else does, and
   
2. The ability to predict a market upturn before anyone else does.
   

Those market pundits who tout their superior forecasting skills by showing that they predicted this downturn and sold all their stock last year must now "call the bottom" of this correction and reinvest their money before the upturn. There are trillions of dollars in money market funds being held "on the sidelines," consisting of people who sold in a panic as well as those who are hesitant to buy now. This extraordinary amount of cash will push the market up quickly when it is reinvested, and missing that upturn will likely result in foregoing the majority of the profit the market will enjoy in its turnaround. Who has successfully and consistently predicted market movements in both directions?

No one. So smart investors, who know that a market correction is a predictable event that happens about every 7 - 8 years, stay invested. After all, these investors invest only long term money in the stock market, and they know that long term means 5 - 10 years. They can wait it out.

Buy gold

Gold has always been a "hedge" against economic disaster. That means that when everything else goes down the drain, gold has tended to do well. Even Peter Lynch, in his book "Beating the Street," recommends holding about 5% of a portfolio in gold "just in case." When there is NOT an economic disaster, investing in gold is a pitiful investment that has underperformed virtually every other asset class.

The trouble is, when EVERYBODY is buying gold, the price is pushed up to ridiculous levels. The time to buy gold, if you want a hedge for your portfolio, is when nobody else wants it.
Now that you know what everybody says during a market correction that is WRONG, it may be interesting to hear what people say that DO know what they're talking about. Investment-wise, Warren Buffett comes to mind as a person who's done well over the years. Let's see what he has to say.

Cash combined with courage in a crisis is priceless

People with investment portfolios rarely have every cent invested in stocks. Rational people buy with some sort of discipline, be it "value," "growth," or modern portfolio theorists, who hold a percentage of their money in different asset classifications. With available cash during a market correction, a disciplined investor will buy opportunistically, in accordance with his or her investment guidelines, taking advantage of "sale" prices.

Don't invest in things you don't understand

If Google has a spin-off business that provides advertising business the use of research based target marketing using an algorithm consisting of historic web searches, and you don't know what the heck that means, but everybody's buying it and you see it on the cover of Time, Newsweek and the New Yorker, don't buy it.

Warren Buffett made a fortune buying companies like See's Candy, Wrigley's chewing gum and Gillette razor blades. He doesn't buy high tech companies because he doesn't understand them. If you do understand the business, by all means invest in it if it falls within your investment parameters. If not, buying something because everyone else is doing it is a very bad investment philosophy. Listen to Warren.

Don't try to catch a falling knife until you have a handle on the risk

It's all fine and good to take advantage of low prices. But as we've said (twice now), market corrections are marked by wildly volatile price swings. Note that the word "swings" is plural. You're likely to have more than one chance to buy at bargain prices, and the likelihood also exists that prices will go even lower as panic selling occurs. Don't be tempted to jump in too soon. Easy does it.

As Americans finding it difficult with the economic changes, it is now essential that you do not panic. Speak to people, professionals, who can answer your questions or have the ability to seek out the proper answers for you. After all, you wouldn't ask a plumber (Joe) for electrical advice, would you? No! There are many professional services out there, or Investment Advisors, that would be willing to assist the average person nowadays, because the average investor of today can become the wise valued investor of the future.

Good luck to you all!