Rick Munarriz, Popular Investments advisor from the Motley Fool thinks Google stocks and Gold are the two most popular investments in this age and time. Based on the above facts, a question can be posed: Between a share in Google and 1 once of Gold which is a better investment. As at 4th January 2008, investing in gold was profitable than investing in Google stocks, with 1 once of gold selling at $ 859.19 while I share of Google selling at $657 in the U.S stock market.

Comparisons between investments in precious metals and investments in financial instruments like stock are always a subject of debate in the financial world. In this decade particularly stocks have shown impressive performances in the various stock exchange markets in the world from the FTSE to the Dow Jones. The skyrocketing prices of stocks can be attributed to stable political environment in U.S.A, U.K and other developed countries. In the last seventy years there has been no war or a major political crisis in the major players in the global economy. The legal structures and the financial infrastructure in the developed world over the last seventy years have improved dramatically facilitating the smooth flow of trade in stock exchanges across the world. With all these factors about stocks noted, it still cannot be concluded that stocks are better than gold.

The year was 2008 and the world financial system was greeted by the rudest shock it has ever had. In a span of less than 24 hours, over 5 major stock exchange markets crashed leaving investors with losses running in billions of dollars. In that instance it was very clear that financial markets are the most vulnerable of markets in the world. It was immediately appreciated that the stability and certainty associated with investing in gold cannot be found in investments in stocks and bonds. Stocks are primarily short term investments. The person who buys stocks with the intention of selling them within a short period of time is bound to benefit more than the person who buys stocks for long run intentions. However when it comes to gold, gold is ideal for the investor with short term motives as well as the investor with long run motives. When the market is bullish gold can be purchased and sold at a massive price when the market becomes bearish. In the long run, the prices of gold are stable swinging in the range of $700- $1200 for 1 once of gold.

For the small scale investor, investing in gold entails purchasing gold coins or gold bars. The small scale investor can also own gold bank accounts or purchase gold exchange traded funds. Gold exchange traded funds are usually sold and traded in the major stock exchanges in the world. Large scale investors like commercial banks and central banks also keep more than 20% of their reserves in gold.

Investing in gold is the only way to store wealth over the long run without depreciation in the value of the wealth. Gold is also a profitable tool of investment in the short run.

When you ask most investors for their preferred stocks, you’ll seldom hear them share a blue chip name like Johnson & Johnson, Kraft Foods or Wal-Mart. Instead they will tell you about some amazing growth stock that will be the next Google, Microsoft or Apple.

These investors believe that by simply buying growth stocks with the maximum earnings growth potential that they will make money. Sadly our research clearly shows this not to be true…not even close.

In this article we will dispel the myth about investing in growth stocks and shine the light on a path that has more consistently paved the way to profits.

Research Says…

We know that many of you are still shaking your heads in doubt. Certainly we must be joking, right? Unfortunately our research details beyond a shadow of a doubt the vast under performance of growth stocks over the past decade.

Stocks with the lowest projected growth rates actually generated the highest return of +5.4% per year. Yes, we know that doesn’t sound like much, but remember the average return of the S&P 500 over that stretch was an anemic -3.3% thanks to two ferocious bear markets.

Each level of additional earnings growth came with decreasing levels of profits for investors. As we look at the most aggressive growth stocks with 30%+ expected earnings growth, we find an embarrassingly low -9.7% return. This begs an obvious question…

Why Don’t Growth Stocks Pan Out?

The early investors in growth stocks generally do quite well. They take the early risk when almost no one has heard of the company. As the company bangs out earnings surprise after earnings surprise it gains more investor attention and a much higher share price.

However, at some point the company will be “priced for perfection”. Meaning that the PE gets too inflated as people are so sure that the good times will just keep rolling (think of a mini version of the late 90s tech bubble).

Unfortunately the exceptional growth stock rarely holds up over time. At some point, as the company tries to expand so rapidly, it will stumble. Even if that just means going from a 50% growth rate to a 40% growth rate. On the surface 40% still sounds great…but not to the investors who expected 50%+. So of course the growth stock will tank. And tank fast.

We are sure you’ve had a few of these growth stocks in your portfolio over the years. So we don’t have to prompt you how rapidly the losses add up. That, in a nutshell, is the danger of investing in growth stocks.

So What Does Work?

Indeed you could look at the stats and conclude that stocks with lower projected growth rates generally outperform. That is true. But we can do a heck of a lot better than that 5.4% return.

The key is to find growth stocks that exceed expectations no matter the growth rate. Meaning that a growth stock that is expected to grow profits by 5% and ends up growing by 7%, will do very well. Ditto for a growth stock expected to grow 30% that ends up at 35% actual earnings growth.

I know on the surface it sounds like you need a crystal ball to predict which companies will beat their earnings projections. Gladly it’s actually much easier than you think because Len Zacks has done the hard work for you.

In the mid-1970s Len Zacks realized that growth stocks that had big earnings surprises continued to outperform the market over the next several months (this is what academics call the Post Earnings Announcement Drift (PEAD)…yes, I know it sounds more like a medical problem than a means in which to invest in growth stocks).

But Len went a step further. He wanted to find indicators that would show him growth stocks more likely to have positive earnings surprises BEFORE they happened. If you could do that, then the odds of success were firmly stacked in your favor.

For the next several years Len worked feverishly to discover these indicators. Gladly for all of us he did find 4 leading indicators of future earnings surprises. Three of these measures are ways of looking at brokerage analyst earnings estimate revisions. The last being an analysis of past earnings surprises.

Each factor is potent by itself. Blending them together creates an almost unfair advantage for investors…that advantage is now called the Zacks Rank stock rating system.

I know you’ve probably heard this story countless times before from us that the Zacks #1 Ranked buy stocks have a 28% annualized return since 1988.

So if you’ve heard the story, then let me ask you a more personal question:

Why haven’t you used it???

Yes, it’s true the Zacks Rank is part of our Zacks Premium subscription service. But we give you a 30 day free trial to use this resource with absolutely no obligation to buy. And beyond the Zacks Rank for 4400 stocks, you also get our equity research reports, stock screening strategies and even our new mutual fund rank covering nearly 19,000 funds.

If you’ve had great success on your own as an investor, then don’t bother with this free trial. You are set. However, if you think your portfolio could do better, then please take me up on this invitation to try the Zacks Rank and all our other resources built to help you outpace the market.

About Zacks Premium Free Trial https://www.zacks.com/registration/free_trial_terms.php

Bright Investment Research

Ashburn, VA (PRWEB) November 16, 2010

Two new websites have been launched under the high yield investment umbrella to help stock traders find value plays in the market. Dividend Paying Stocks (DPS) was launched to help dividend investors find high yielding and high earning stocks. Cheap Stocks Now (CSN) was built to help value investors find quality undervalued stocks with high growth and returns.

DPS specializes in finding dividend paying stocks based on industry. There are 16 different industries covered. Each industry list has stocks that yield 3% or more.

“We have found that most dividend investors are more interested in the industry of the dividend stock than the yield itself. That pushed us to create an in depth industry list.” – Alexander Ramsay – DPS.

The DPS dividend site also lists stocks based on dividend per share and yield. All stocks that make the list have a positive EPS. Stocks without a positive earnings per share ratio have a hard time paying a dividend. Dividend investors are looking for solid investment choices where they believe that their yield will be safe and continue to be paid throughout the lifetime of their investment.

CSN has a different focus. Cheap stocks are of great interest to value investors. CSN was built to help stock traders find undervalued investments. Some of the most popular lists on this site are the hot cheap stocks, low p/e stocks and the high growth penny stocks lists.

Undervalued stocks provide an opportunity for big returns. Penny stocks are always interesting to stock traders looking to make a big gain. The problem is that these stocks often come with a lot of risk.

CSN helps investors reduce their risk by identifying cheap stocks with strong financial ratios. Penny stocks with a high earnings and growth can be solid investments. Other factors to consider are the price to earnings ratio and cash on hand. CSN helps reduce the risk of penny stock picking by using these key data points.

Both dividend paying stocks and cheap stocks now provide free investment research information to investors. CNS also provides a top 25 cheap stock list for free to those that sign up for their email updates. Please visit each website for more information.

###

©Copyright 1997-

, Vocus PRW Holdings, LLC.
Vocus, PRWeb, and Publicity Wire are trademarks or registered trademarks of Vocus, Inc. or Vocus PRW Holdings, LLC.

When you ask most investors for their preferred stocks, you’ll seldom hear them share a blue chip name like Johnson & Johnson, Kraft Foods or Wal-Mart. Instead they will tell you about some amazing growth stock that will be the next Google, Microsoft or Apple.

These investors believe that by simply buying growth stocks with the maximum earnings growth potential that they will make money. Sadly our research clearly shows this not to be true…not even close.

In this article we will dispel the myth about investing in growth stocks and shine the light on a path that has more consistently paved the way to profits.

Research Says…

We know that many of you are still shaking your heads in doubt. Certainly we must be joking, right? Unfortunately our research details beyond a shadow of a doubt the vast under performance of growth stocks over the past decade.

Stocks with the lowest projected growth rates actually generated the highest return of +5.4% per year. Yes, we know that doesn’t sound like much, but remember the average return of the S&P 500 over that stretch was an anemic -3.3% thanks to two ferocious bear markets.

Each level of additional earnings growth came with decreasing levels of profits for investors. As we look at the most aggressive growth stocks with 30%+ expected earnings growth, we find an embarrassingly low -9.7% return. This begs an obvious question…

Why Don’t Growth Stocks Pan Out?

The early investors in growth stocks generally do quite well. They take the early risk when almost no one has heard of the company. As the company bangs out earnings surprise after earnings surprise it gains more investor attention and a much higher share price.

However, at some point the company will be “priced for perfection”. Meaning that the PE gets too inflated as people are so sure that the good times will just keep rolling (think of a mini version of the late 90s tech bubble).

Unfortunately the exceptional growth stock rarely holds up over time. At some point, as the company tries to expand so rapidly, it will stumble. Even if that just means going from a 50% growth rate to a 40% growth rate. On the surface 40% still sounds great…but not to the investors who expected 50%+. So of course the growth stock will tank. And tank fast.

We are sure you’ve had a few of these growth stocks in your portfolio over the years. So we don’t have to prompt you how rapidly the losses add up. That, in a nutshell, is the danger of investing in growth stocks.

So What Does Work?

Indeed you could look at the stats and conclude that stocks with lower projected growth rates generally outperform. That is true. But we can do a heck of a lot better than that 5.4% return.

The key is to find growth stocks that exceed expectations no matter the growth rate. Meaning that a growth stock that is expected to grow profits by 5% and ends up growing by 7%, will do very well. Ditto for a growth stock expected to grow 30% that ends up at 35% actual earnings growth.

I know on the surface it sounds like you need a crystal ball to predict which companies will beat their earnings projections. Gladly it’s actually much easier than you think because Len Zacks has done the hard work for you.

In the mid-1970s Len Zacks realized that growth stocks that had big earnings surprises continued to outperform the market over the next several months (this is what academics call the Post Earnings Announcement Drift (PEAD)…yes, I know it sounds more like a medical problem than a means in which to invest in growth stocks).

But Len went a step further. He wanted to find indicators that would show him growth stocks more likely to have positive earnings surprises BEFORE they happened. If you could do that, then the odds of success were firmly stacked in your favor.

For the next several years Len worked feverishly to discover these indicators. Gladly for all of us he did find 4 leading indicators of future earnings surprises. Three of these measures are ways of looking at brokerage analyst earnings estimate revisions. The last being an analysis of past earnings surprises.

Each factor is potent by itself. Blending them together creates an almost unfair advantage for investors…that advantage is now called the Zacks Rank stock rating system.

I know you’ve probably heard this story countless times before from us that the Zacks #1 Ranked buy stocks have a 28% annualized return since 1988.

So if you’ve heard the story, then let me ask you a more personal question:

Why haven’t you used it???

Yes, it’s true the Zacks Rank is part of our Zacks Premium subscription service. But we give you a 30 day free trial to use this resource with absolutely no obligation to buy. And beyond the Zacks Rank for 4400 stocks, you also get our equity research reports, stock screening strategies and even our new mutual fund rank covering nearly 19,000 funds.

If you’ve had great success on your own as an investor, then don’t bother with this free trial. You are set. However, if you think your portfolio could do better, then please take me up on this invitation to try the Zacks Rank and all our other resources built to help you outpace the market.

About Zacks Premium Free Trial https://www.zacks.com/registration/free_trial_terms.php

Video – Stock Market Exit Strategy —- Do you understand yours? Great poker players use them. Strategies like money management and selection of where to be aggressive with your plays. The combination of them both can make for great or terrible results. Many gamblers in poker, sports, blackjack, stocks have been known to win or lose a lot of money. That is because the winners are skilled enough where they can overcome the odds and make profits. Unskilled players will be on the short end of the stick due to being under skilled and poor risk management. Therefore do the best research you can on the internet and try to attempt to find people you can trust from any and all the sources you encounter. This way you are able to find the right books, videos, people and web pages you need. This is why my personal guess for best classes are real commodities that can hold value over a reasonable period of time. Silver has long term holding value as it can be held like money and passed on through several generations. Sometimes, playing at a casino can be very fun and that is why it is great these financial institutions let us play. The sad truth is many people are putting up a majority amount of their money into this casino and they do not even realize that it is there. The worst part is that the casino you go to or play online contains bet sizes that are much lower with higher short term risk. What is smarter however? Putting most of your money into these equity accounts, or taking a certain percentage of that money and having a wild weekend in Vegas. If you lose money, its like losing a dozen percent on stocks (or much less). If you are playing stocks and winning, that would mean you are better than the average player and good enough to beat the rake (spreads and commission fees). This means you still need an exit strategy for the game of getting out of this dollar. Time is lower each day and anyone that has dollars in paper and computer databases will be in trouble.

Financial advisers use equities to trade stocks. Because they have done a terrific job of not letting people know that this type of trading is in fact casino trading. The proof is in the many people whom have lost their shirts on poor equity trading and pension funds being hammered. Many sold for losses or received gains that did not surpass inflation. Remember for every winner there always has to be a loser and the house always wins in the casino.

Technically speaking the long term strategy on chart patterns is for the 50 day moving average to be declining for two days and a close below it. This means if you decide to use this method for selling longs it would be smart to be active trading the following day and at any point you see that it will close below the 50 then sell by 3:59pm EST as this pattern could result in a 2% gap down type of day or worse.

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http://StockTips.Weebly.com

Visit the site above and learn more about Stocks Trading & Investing Tips. Outstanding stock market performance and trading tips for investors from retired Wall Street MIllionaires.

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