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Stock Market News & Media – How the Media Impacts Investments

The economy and related themes have been a major message woven into news & media reporting throughout the past year. With an average of over 40 million viewers every day, television news has a broad reach. With such a critical message and such a huge audience, it should be no surprise that the media has an impact on investors choices in the buying and selling stocks each day. This article exposes some of the little-known facts regarding the impact the media has on investor decisions and what they can do about it.

Following are six examples of ways in which news & media influence stock market investing.

1. Specific Referrals: Specific references from news & media sources to a company or stock symbol have considerable impact on investment activity associated with that stock. Furthermore, the response is quick. Within a matter of minutes, a stock price can begin to rise, if the media reference is positive, or it can begin to fall, if the media reference is negative.

2. Negative Impacts: Often, a specific referral within the news & media can impact stocks from other companies within the same sector or industry group as the referenced stock. Unfortunately, there are times when the referral results in inappropriate consequences.For example, a negative news reference to Stock #1 drives down the price of Stock #1. Stock #2 is in the same industry group as Stock #1 and the price of Stock #2 drops as well. It is highly likely that investors holding either Stock #1 as well as investors holding Stock #2 will both quickly sell their stock to capture any accrued gains or to limit their loss.Unfortunately, the negative news reference for Stock #1 may not be relevant to Stock #2. If this is the case, there is no legitimate reason for the price of Stock #2 to drop. Investors with knowledge of the company associated with Stock #2, often see this as an opportunity to quickly buy additional shares of Stock #2 to take advantage of the lower price.Generally, the market will quickly wake up to the unintentional negative impact and the price of Stock #2 will begin to rise back to its previous level. Knowledgeable investors are happy since they bought at a lower price. Those existing investors that sold Stock #2 are unhappy because they reacted to a falling stock price and now recognize that Stock #2 should not have dropped in price under these circumstances.

3. Overriding News: As pointed out earlier, stock prices respond quickly to news specific to a company. However, news reported later in the same day or week, can often override the earlier company specific news. The initial news may have caused a stock price to begin to rise, only to see a change in the direction of the price when the latter news report was released. In most cases, investors cannot anticipate this situation and its consequences are unfortunate, but real.

4. Who Can I Believe?: News & media sources often make extensive use of “guest experts” that are generally well-informed about some aspect of the economy or stock market. This is a positive element in their newscasts. However, listening to these experts demonstrates that even the experts seldom are in 100% agreement on the issue at hand. Most investors are looking for answers and may be frustrated by the lack of definitive answers to their questions. Although this may be a turn-off to some investors, it makes a positive contribution to the industry as a whole as it does provide investors with more pieces to the puzzle on the path to a better understanding of the “big picture”.

5. Do Not Run With The Bulls: News & Media reporting can produce a response that demonstrates “herd mentality”. Such a reaction is generally not based on sound investment principles but on the opinion of a group or individual that can start the bulls running.Over time investors tend to gain confidence in stock recommendations offered by a television financial personality or the editor of a financial newsletter. When this “leader of the bulls” makes a buy recommendation on a specific stock, generally after the market close of that trading day, the herd quickly responds by placing a buy order for that stock. When the market opens the next day, this large number of buy orders can cause the stock price to quickly surge or gap up and many of those buy orders get filled at prices considerably higher than the previous days closing price. When other investors see that stock price rising, they want to get in on the action and they place orders further driving up the price of the stock. Often, this inflated stock price is temporary and the price of the stock returns to more appropriate levels leaving some of the herd in a loss position.The best advice is “do not run with the bulls”. Wait to see what the price does over the coming week and then make a decision based on your own fundamental and technical analysis of that stock.

6. Watch Out For Old News: Many stock market traders fail to recognize the impact of institutional investors. Wikipedia defines institutional investors as “organizations that pool large sums of money and invest those sums in companies. Their role in the economy is to act as highly specialized investors on behalf of others.” Examples of institutional investors are banks, insurance companies, brokerages, pension funds, mutual funds, investment banking, and hedge funds.Institutional investors have the benefit of internal professional staff that specialize in studying the pros and cons of a company in order to determine whether that institution should buy that company stock. The media is not aware of the work of these professionals, nor the investment activity of the institution, until after the fact once the price may have been driven up. At that time, the media may unknowingly report the “old news” of the price rise. This report can cause the public to begin to buy that stock further driving up the price. This can result in artificially high prices that will eventually drop back down after the old news is no longer being reported.Watch for technical indicators that provide indication of institutional activity. Make an informed decision. Do not respond to old news.

Conclusion:

* Stock market investing is an adventure that should not be undertaken by an untrained person. However, with training, investment research, and a big picture view of the economy, it is possible to benefit from some wise investments.

* Appreciate news & media sources for who they are; everyday people reporting as best they can on a very complex global economy that is quickly changing and adjusting to a broad range of political and financial factors. Recognize that writers and reporters are not and cannot be experts in all things, so do not accept all news as gospel. Instead, develop a bigger picture view based on multiple media sources over a period of time. Factor that information into your training and experience to make wise investment decisions

Delay Before Starting To Do Stock Market Trading

You have probably heard lots of stories that you can make tons of money from cheap penny stocks or something similar so you thought you would see what it was all about. You probably do not want to be delayed at all and are eager to start investing in the stock exchanges as soon as possible. However, it is a tricky business and I recommend that you do delay a little until you understand it all more.

It is a lot easier to lose money than make it when stock market trading. Sure some lucky whatsits make a fortune in a week but they are very few and very far between. In truth you may have started investing without really realizing it with a bank savings account which is a very safe investment normally, although there have been some mishaps in the past couple of years.

One way to lose spending power on your money for certain though, is to stick it in a tin or put it in the safe at home. Inflation will bite into it and it will not be worth as much in real terms when you try to spend it. At least with the bank they do give you a little interest, albeit a pittance these days plus here is a government based scheme in place too just in case the financial institution gets into trouble.

When you get to the stage of wanting a bit more action with your investments consider the money markets. You will, however, have to commit to a bit longer time period to tie up your money. That is the main difference. A standard time frame is a year or 13 months. They will give you a higher interest rate for making this commitment.

Certificates of Deposit are the next upwards step on the ladder but an even longer period of time is needed for these. A lot of financial institutions offer a higher interest if you invest more money with them. They will do the same if you contract for a longer period as well.

Your intention through these steps is to gradually increase the amount of capital that you have to invest without too much risky. Whilst doing this you get the opportunity to learn all that you can about investing. There is plenty of information on the internet and in the bookstores to help you get a grip of stock trading.

Then, when you actually start real trading, do not get disheartened if you lose a bit on your first couple of trades. You cannot expect to understand everything right from day one.

I put money on the fact that you had several driving lessons when you fist tried to drive a car. You should look at trading in the stock market in exactly the same way. And, just like driving, do not go too fast at first. Gain the confidence slowly and you will be the winner.

Stock Market Investing Best Stocks to Buy

The best stocks to buy, is a question which revolves in the mind to all of us when it comes to online stock buying. What is hot and what is not. Which sectors and which markets should you be looking at today? Should you be looking at the banking market for instance! With so many banks going “tits up” throughout the world, it may appear to be a bad idea. However dare you take the risk as some of them which has dropped 400% plus may prove in the long term to be the best performing stocks, or what about stock mutual funds?

Make sure you have the most up todate news on your stock market investing. The financial times has proved a great institution and mine of proven informative information over the years. They not only give you the best investment stock to buy but also give you the reason why. Always read what the experts have to say.

Stock mutual funds have proven to be a best bet along with penney stocks. A stock broker online can also give you the best trading strategies for your online stock buying. Penny stock advice is a must to make it in this field of investing.They can give you personalised advice on how to maximise your returns and minimise your risks on your selected stocks by giving you different strategies for each.

Penny stock system money management principles trading will mean you need a free list of penny stocks to maximise your returns and minimise your risks when trading in any stock. Penny stock charts are also very useful and be easily downloaded. You may wish to consider other stock option advice for your stock day trading.

Stock market investing can be a minefield and it is highly recommended you seek stock option advice from an expert, to find the best stocks to buy. How to use your money wisely is not that simple. You have probably heard the old maxim that a fool and his money is soon parted!

Penny stock system trading needs patience and long term thinking and education. Seek product and book reviews. Knowledge is power and this especially applies to stock day trading. To gain that knowledge we recommend various books and products that will help you make smarter decisions. These are found easily on the internet. The best investment stock advice is out there, go and find it!

If you watch the news or read a newspaper, you are sure to have heard of the stock market. You read that shares in whoever inc. showed a 12% gain or a massive 20% loss, or the Japanese stock exchange average fell a whopping 500 points today, but does it really make any sense?

The credit crunch has opened a new world for us all, and has proven we cant play God!

If so, then you are like many of your fellow human beings. There is nothing easy about understanding the workings of the stock market. However, if you take the time to learn what there is to know, you may just wind up making a lot of money in investments, just observe the masses and do the opposite.