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When people think of personal finance or obtaining wealth, the subject that always comes up is stocks. The subjects of stock markets are an extremely exciting topic. However most people would rather only experience the gains without experiencing the loses.

Before you jump into the methodologies of picking stocks, you should know the common misconceptions. Quite a few new investors believe that there may be some sort of strategy that cant fail and will bring guaranteed success. However, there is no system that is foolproof when you get into stock picking.

This doesnt mean that it is impossible to obtain your wealth in the stock market. It is just that picking stocks is an art not an exact science. There are many reasons why this is true:

1. There are many reasons for the health of a company to be affected, that it is almost impossible to come up with a particular formula that will tell you if it will be successful. It is hard to determine which of the numbers are relevant; it is much easier to come up with data to support your decisions for choosing the stock.

2. A large amount of the data cant be measured. The information about a company that counts, like profits, are found easily. But how would one measure quality, like the staff of the company, the advantages of the company, or the reputation of the company. You must be able to use all of the information to come up with an educated guess regarding stocks.

3. Then there is always the human aspect in the moving of stocks and what you expect them to do may not always give you the results you were hoping for. Emotion will change unpredictably. Sometimes the stock market could be a very dangerous place.

Looking at a companys bottom line should not be used to pick your stocks. Think of every single stock strategy as part of your theory, a way of determining how this investment strategy will work in your plans. Will the strategy you choose fit into you personal goals, your time table, and your budget

Now you have reached a point when you should be asking why this is so important. Why would you worry The answer to these questions is the gaining of wealth. If you were to become good at picking stocks, you will be able to build your wealth. Take a company like Microsoft, if you invested in 10,000 in the brainchild of Bill Gates in 1986 and just held onto the stock, at 35,000, you would be looking at a total of 3.5 million dollars today. With that type of returns, people are trying to find the next big company like Microsoft.

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The Bollinger Band is the closest thing to The Holy Grail of technical analysis there is. Especially for large cap stock traders, it just cannot be beat for analyzing charts. Having said that however, there is probably no other technical indicator misused or misunderstood as often as the Bolinger Band (BB). This article is to provide the technical analyst with the basics needed to interpret the many faces of the BB.

Before we begin, let me explain the type of trading done at http://livingonlargecaps.blogspot.com. We trade large cap stocks, we generally hold stocks for less than two months, and make about 3-5 on an average trade. Done over and over again throughout the year, we have made over 50 annual returns for the last three years.

Now lets discuss what the Bollinger Band (BB) is. In its standard usage, the BB is derived from taking the 20 day moving average of the stock price. And then adding and subtracting two standard deviations of that stock price and placing a line above the moving average and below the moving average. Now without having to re-visit my statistics classes of some 25 years ago, I will try to clarify a standard deviation. It is simply a measurement of how far the price has deviated above or below the moving average. A stock going through a particularly volatile patch, will see its BBs expand, and a stock going through a calm period, will see them contract.

BBs are available on most charting software. Yahoo has them on their technical analysis charts, as do most other web sites that are dedicated to technical analysis. If you are unfamiliar with them I urge you to right now, go experiment with them, using a few stocks and market indicators like the Dow, or Nasdaq.

If you are familiar with technical analysis, and use indicators such as the RSI or stochastic. You know one of the unique things about the BBs is they are placed right on the stock charts. They are viewed in the context of the actual price movements. In fact, for me, they define the stock chart. Stock charts tell me way more about future movement with the BB placed on them. I rarely do any analysis without them, except for perhaps an initial viewing of a stock chart I am considering for watch list placement. BBs therefore do not give you a number, like most other indicators, they dont tell you an overbought or oversold condition. They just provide a visual, a story, of where a stock has been. Therefor you have to interpret.

But what can be learned is crucial, to guessing what will happen next. BBs can help you predict price movements, like no other tool. The trick is, to know what to look for. In other articles I will present what I require a price pattern to look like before I even consider it. But for this article, realize that price patterns need to be structured, calm, heading up, down or flat. But they cant be erratic. Erratic price patterns are never worth trading..

If the upper band and the lower band are not moving in unison then the pattern is erratic. There is one exception to this rule, and that is at the beginning of a powerful up or down move. Remember, the bands tell you where the price will fall in relative to the 20 day moving average. Well, if a powerful move is underway, then the price is moving away from the average, and the bands expand. Once the bands expand it is too late to trade that move, but the stock is worth watching, one can climb on board on the next pull back.

But trading the way we do on our blog ,at http://livingonlargecaps.blogspot.com, that has produced greater than 50 return three years running, we like the bands to move in unison. That shows predictability. And predictability is crucial in getting large returns. It is not the home run we are looking for, just hit after hit after hit. Load the bases repeatedly and you generate runs. OK enough baseball analogy. Here is an example, take the chart HIG. With BBs in place look at the chart in early June 2005. It is just after the powerful upward move, that occurred in May. First notice in May how the BBs expanded, as the stock shot straight up. Then in June the bands moved in unison. Around mid June the stock touched its 20 day moving average, then its formation started to bowl as it moved up. Buy it here. Once it hits a 5 profit move up a sliding stop, and ride the price up. Several things can be learned form this chart. The single most bullish pattern, is a stock that has small trading day ranges, and hugs the upper band. It rides it up between the 20 day average, and the top band. The bands are at an upward angle, that is not too steep. And everything moves in unison, both bands, the moving average, and most importantly for profits, the price.

If one should know anything about the stock market, it is this. It is ruled by emotions. Emotions are like springs, they stretch and contract, both for only so long. BBs measure this like no other indicator. A stock, especially widely traded large caps, with all the fundamental research in the world already done, will only lie dormant for so long, and then they will move. The move after such dormant periods will almost always be in the direction of the overall trend. If a stock is above its 200 day moving average then it is in an uptrend, and the next move will likely be up as well.

Look at the chart CIT, with the BBs of course. See how in June 2005, the BBs contract late in the month. While the price touches the lower BB. See how the stock is above the 200 day moving average. And more importantly the slope of the 200 day moving average is upward. The stock clearly wants to move up. The bands are ridiculously close together. Buy right here, an oversold stock, moving upward, with narrow bands. What happens next is the bands expand, I call it fish lips, I love fish lips. This stock could have been bought in June sold at exhaustion as the bands had expanded with an upper band touch. And then re-purchased in July and done again. While fish lips provide remarkable entry signals, they generally arent held as long as the upward unison movement of HIG mentioned above.

There you have the two most crucial lessons in Bollinger Bands. The HIG pattern I call riding the wave, and the CIT pattern I call fish lips. Riding the wave can usually be done longer up to two months, using stops along the way, one doesnt even really need to watch it, of course one can as they ca-ching in one those safe profits. The other pattern is fish lips, they are usually held for less than a month, and are exited upon upper band touches, or mare exactly retreats from upper band touches. (When the price touches the upper band and then retreats). Fish lips that re formed out of a flat pattern can often turn into riding the wave, and then are held longer.

CT Larsen has been trading stocks since 1990. Now trading large cap stocks exclusively. He has recorded three straight years of greater than 50 annual returns. You can read his blog at http://livingonlargecaps.blogspot.com.

f you dont act now while its fresh in your mind, it will probably join the list of things you were always going to do but never quite got around to. Chances are youll also miss some opportunities. -Paul Clitheroe

There are so many choices for investors when it comes to mutual funds. Which is great because investors do not have to settle on investments which almost meet their financial goals and risk levels. They can find a mutual fund that is a customized fit to their investment style. In the northern hemisphere alone, there are over 10,000 mutual funds available that investors can choose between. There are more funds then stocks. Each type of mutual fund has its own level of growth, risk, and rate of return. In addition, each fund has already established investment goals, industries, and investment techniques. There are three basic types of mutual funds equity funds, fixed income funds, and money market funds.

Money market funds are usually short term investments. Money market funds are similar to Treasury Bills. This is an extremely safe investment and there is almost no risk associated with investment in money markets. This is perfect of the investor who has an aversion to risk. However, remember with little risk come a small rate of return. A good way to balance that is to put a larger sum of money into a money market fund. The rate of return is usually double what a typical savings account would give you.

Income funds offer its investors a regular income usually paid out in the form of monthly dividends. This is why this type of investment is called a fixed income fund. The investment is usually in debt management of the government or large corporations. Most people who invest in income funds are investors who are extremely conservative or people in their retirement years. Income funds have a higher rate of return then money market funds but they do carry more risk with them.

Balance funds offer the investors just the right mix of income, low risk, and appreciation. The goal of this type of fund is to invest in a combination of all types of stocks to achieve a balanced and profitable investment portfolio. Most financial experts suggest that balance funds should be 60 equity and 40 income.

Equity funds are what most people think of when they hear the term mutual fund. This type of investment is long term and the goal is to slowly increase capital over a number of years. As retirement approaches more equity funds allow the investor to draw an income each month from the fund.

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With so many different companies offering such a wide variety of stocks and bonds, it can be difficult to keep track of which ones are good investments and which ones will cause you to lose money. If you arent sure how to tell the good stocks from those that arent so great, or simply dont have the time that youd need to keep track of all of the different stocks so as to know when its time to buy or sell, you might want to consider hiring a stock market analyst.

A stock market analyst is an individual, sometimes as a part of an investment firm, whose job it is to watch the changes in the market and keep track of which stocks and bonds are performing well and which ones arent.

If you think that you might be interested in hiring a stock market analyst but arent sure how you would go about doing so, then the information below should help you begin your search.

Find Local Analysts

The first step in hiring a stock market analyst is finding one to hire. You can often find listings for market analysts or investment services in your local phone directory, and many analysts are likely to advertise in the financial section of local newspapers and other financial publications. You might also try searching the internet for information about financial analysts in your area.

Once youve found the analysts that are closest to your area, its time to begin investigating the services that they offer and finding the one thats best for your investments.

Compare Prices and Services

Obviously, stock market analysts are going to charge for their services... after all, its how they make a living. You should take the time to see how much the various analysts in your area charge, and find out exactly what services that price covers. Some market analysts might have several different packages at different prices, offering different services for different amounts so as to cover a variety of different service needs and financial limits.

Take some time to compare the prices that each analyst charges and the packages that they offer, and when youve decided upon the one that offers the most services that you desire for the best price begin checking to see how good they are at their job.

Check References

Taking the time to check references and to see if your potential analyst has any major complaints against them can help you to avoid having to repeat your search in a short period of time. In most cases, youll find that businesses such as stock market analysts will have customers who are more than willing to allow the analyst to use them as a reference because of good experiences that theyve had. If they dont have any references that you can use, take a little time to ask around and see if you can uncover any good or bad experiences that others have had with them in the past.

Though it may seem like a lot of work, you want to make sure that the person that you hire will be able to do the job that youre hiring them for.

Making Your Decision

After youve done some checking around and gone over the information that the analyst has given you again, its time to make your decision. If it seems as though theyll do a good job in advising you on your stock choices, go ahead and hire them... if not, you should continue your search until you can find the one that will.

Paul Parker writes finance and loan articles for the Secured Loans UK Online website at http://www.securedloansukonline.co.uk

Dear Fellow-Investor.

While a weak employment report last Friday (April 4, 2008) seems to confirm the U.S. economy is in the early stages of a recession, investors that are looking at the longer term are already thinking about which stocks will work best for a recovery.

Many are saying that the future might be brightest for one of the worst performing sectors this year - technology - and one of the best - energy. And theyre also finding things to like about health-care stocks.

Although worries about the economy still loom over the stock market, there were hopeful signs last week as the Dow Jones soared nearly 400 points on Tuesday, April 4. The 8th largest gain for the Dow in its history.

Still, this month could be challenging as companies report first-quarter earnings and issue their expectations for the rest of the year. Many on Wall Street believe that earnings expectations for the second half of 2008, with forcasts of double-digit percentage growth, are too high and the U.S. market remains vulnerable to disappoint if those forecasts dont materialize.

Some had been looking to financials to help lead the stock market out of its downturn. While stability in bank and brokerage stocks may be necessary for the market to head higher, the kind of earnings growth that powered strong returns on financials in recent years now appears to have been driven by borrowing and moving certain assets off their balance sheets.

With the severity of the credit crunch and a downturn in consumers ability to spend, a steady flow of good news that would fuel a sustained rally may be in short supply for months.

But the steps taken by the U.S. Treasury and Federal Reserve to stabilize the financial system have some investors thinking that the worst of the selloff could be over. They were encouraged by the markets calm response to last Fridays, April 4, employment report showing a loss of 80,000 jobs in March 2008.

Technology companies are at the top of the list of many Fund managers. The sector that was expected to be strong this year, is down 15 since the SP 500 hit its all-time high in October 2007, making it among the worst performers of the indexes 10 sectors.

Tech companies have been hit way too hard. The reason behind this is suspected to be in investors thinking back to the last recession when holding tech stocks was the worst possible strategy. But the market shouldnt underestimate the profit growth this sector can generate over the longer term. Techs could miss expectations this year, but not for the next 2 -3 years!

One factor for the recent selloff of tech stocks is that financial companies traditionally are big buyers of new technology and their ability to spend might be compromised by their losses from the credit crunch and the economic slowdown.

And talking about health-care stocks. Some Fund managers are shying away from the big pharmaceutical companies that face the continuing problem of big drug products losing their patent protection. Instead, these Funds are taking a liking in biotechnology or medical equipment makers because whether its fixing the eyes, the knees or fixing hearts, theres always going to be a tailwind from an aging population.

Yours in Successful Trading,

Ricky Schmidt

http://www.stockbreakthroughs.com