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Stock Investing

Getting Familiar with Some Mantras

Stock investing has a lot of big words under it that often get market players confused. In the stock market arena, words like analysts and stockbrokers sound right.

But then there are a host of other terminologies that can be classified as propagandist, perpetrated by Wall Street. These are words that mean to brainwash investors and get them all caught up in the hype.

Stock Investing and the Wall Street Mantras

The brainwashing tactics or mantras of Wall Street can take the form of numbers like stock ratings 1, 2, 3, 4, etc. They could also be stars like 1 star or 2 star. The mantras could also be words or groups of words – neutral, attractive/unattractive, market perform, market under-perform, market overweight, market equal weight, sell, buy or strong buy/sell.

The Wall Street stock investing mantras have become so ingrained in stock investing people's minds that they've managed to create multibillion-dollar industries.

There are plenty other kinds of mantras.

Bollinger Bands deal with channels that particular stocks are trading in based on their “moving averages.” Stochastics tell when stocks are 25 percent oversold or 75 percent overbought.

The Relative Strength Index (RSI) is an indicator of stock investing trade volume. MACD divergence/convergence refers to rising or dipping stock investing prices in relation to the moving averages.


Other mantras include momentum, 50- or 200-day moving averages, pendants, bull markets, double bottoms, P/E ratio, flags, triple tops and a whole lot more. These mantras all serve a useful purpose.

People into stock investing will find such tools extremely handy as they help generate commissions. But for investors' dollar-cost averaging in the long-term, such mantras appear meaningless.

Here's another familiar Wall Street stock investing concept – consensus estimates. These are figures based on analysts' combined estimates that cover public companies.

Analysts typically give a consensus concerning companies' earnings per share and return. These numbers are usually calculated for each quarter and fiscal year. Company size and number of analysts involved determine the pool size from which estimates of future earnings are derived.

Of course there's the mother of all Wall Street stock investing mantras – mutual funds. These are companies that pool money from various investors and invest them in bonds, securities, stocks, assets, short-term money markets or a combination of these. Combined holdings of mutual fund firms are called portfolios.

Illegal trading has caused some mutual fund firms serious damage. One mutual fund was fined $125 million while another, $100 million. How these companies will pay the fines is a big question. Investors in a fund pay for the company's operational expenses and marketing management fees. These are known as hidden fees. At this point, it is still too soon to tell whether the mutual funds industry has “ridden a perfectly decent horse to its death.”

There's a huge amount of stock investing dollars funding Wall Street people's salaries.

Only recently, a former CEO of the New York Stock Exchange (NYSE) Richard Grasso was made to resign after his two-year salary numbers were exposed. His salary consisted of $24 million for two years, a payment package of $139.5 million and a check worth $48 million.

That's just one individual in Wall Street!

Who paid his salary?

Well, if the funds weren't taken from stock investing dollars, this doesn't explain why managers of Pension funds got hopping mad after learning of his salary size, even threatening to pull out billions worth of Pension funding dollars from the NYSE.

While where Grasso's salary came from is still a mystery, one thing remains certain, not a single cent came from Stockopoly investors.

 

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