The Differences between Stocks and Bonds

Investors buy stocks to acquire a partial ownership in a particular company and buy bonds to make a loan to corporations or governments. While stockholders benefit from the company profits, the bondholders receive returns.

A fixed rated return is a percentage of the bond’s original offering price. The return is called a “coupon rate.” The principal amount of bonds is returned during the maturity date.

The risk of not being paid back with the principal amount is always carried by bonds. Although companies with higher credit worthiness are more likely to be safe investments, their coupon rates will be lower than those companies with lower credit ratings.

The safest type of bonds is the US Government bonds. Blue chip corporations, which are companies with established performance records for over several decades, are also considered to be safe bond investments.


Bonds, just like stocks, can be bought and sold on the open market. The fluctuation of their values is based on the level of interest rates in the general economy. For example, an investor who holds a $1000 bond that pays 5% per year in interest is capable of selling the bond at a price that is higher than the face value as long as the interest rates are below 5%. If the interest rates rise above 5%, the bond can still be sold but it is usually at a price that is less than the face value.

New bond issues are usually sold in $5000 increments while initial bond issues are quoted in $100 increments. A bond listed at 96 indicates a selling of $96 per $100 face value.


The risks and the potentials have to be weighed when deciding to invest either in stocks or bonds. Stocks carry a greater potential to increase in value but they also hold a greater vulnerability to market fluctuations. Investment grade bonds, which are rated BBB or better, carry slightly lower risks but offer relatively low yields.

Because they provide a stable investment that helps cushion against stock market fluctuations, bonds still have their place in most investor portfolios. A mixture of investments that includes stocks from different industries, bonds from various corporations, and other fixed-income investments is one strategic way of providing maximum growth while securing investment funds for the future.

USD CONTINUES TO SUFFER LOSSES

Yesterday on a whole saw a calmer day on financial markets and with the major currencies, though still somewhat choppy, remain well within familiar ranges. Overall, markets continue to look ahead to Friday’s speech by Fed Chairman, Ben Bernanke with speculation about whether or not he will use the opportunity to raise the prospect of further quantitative easing.

While, against this background, there is a reluctance to place large bets, the dollar initially had a somewhat weaker tone yesterday, with the main gainers commodity currencies such as the Australian and …

SWISS FRANC SUFFERS HEAVY SELLING

Risk appetite has improved, with stock markets bolstered yesterday by stronger than expected US consumer spending data which helped relieve some of the worst fears about the economy there slipping back into recession. This sees traditional safe haven currencies under pressure.

The Swiss franc has been particularly hard hit, loosing more than 2% against the euro and dollar at one stage. Here, downside was compounded by Friday’s threat by UBS to charge clients a fee on deposits as a measure to discourage them from hoarding the CHF in recent volatile market …

Risk Aversion Dominates USD Gains Euro Weakens

The FX markets are extremely cyclical at the moment, from one week to the next we are seeing wild swings in sentiment. Last week focus fell on the Pound and a host of negative news forced the Pound lower against the majority of the world’s most actively traded currencies. This week it would appear that focus has now shifted towards selling the Euro

what is Average Interest Rate in share trading

Understanding the average interest rate can engage utilizing certain tools that can help customers track the rates that are available from a variety of credit sources. These tools could include specific tracking software as well as websites that post the current averages on a number of items such as certificates of deposit, automobile loans, mortgage loans, credit cards, and home equity loans. Such weekly averages can assist borrowers compare a variety of rates within a specific category,
Note; hi friends this website ,blog give day trading tips calls for indian stock market bse sensex traders,


(Interest Expense - Accounts Payable)

= ------------------------------------------
Liabilities



•This is a rough estimate, the proportion does not account for all.
•Using the before tax or after tax interest outlay will produce different results.

Fundamental analysis about share market

Fundamental analysis is a stock assessment method that uses financial and economic analysis to predict the movement of stock prices.On a broader scope, you can perform fundamental analysis on industries or the economy as a whole.

Many investors use fundamental analysis alone or in combination with other tools to estimate stocks for investment purposes,Earnings per Share – EPS.Price to Earnings Ratio – P/E,Projected Earning Growth – PEG,Price to Sales – P/S,Price to Book – P/B,Dividend Payout Ratio,Dividend Yield,Book Value,Return on Equity,are the most popular tools of fundamental analysis. They focus on earnings, growth, and value in the market.

Some of the best-known investors have been fundamental analysts, including Peter Lynch, the legendary manager of the Fidelity Magellan mutual fund,most individual investors apply fundamental analysis in some way to pick stocks for their portfolios,

In this section we are present 19 basic fundamental analysis ratios to help you . This ratios are presented in a simplified manner to make them easier to understand,

INDIAN ONLINE TRADING SITES-BEST AND WORST

Before I dwell on this topic related to brokerage charges I can assure you after you have gone through the writeup you will be able to come to a firm conclusion that you are being overcharged by these brokerage firms and thus it is your every right to haggle them for a good brokerage rate as a penny saved is penny earned. Undertake the direct encounter of your brokers by showing them the brokerage charges in Reliance Money which is an aggressive player to brokerage charges ICICI which is a slow and steady winner. However off late it has come to notice that ICICIdirect has also improved and one can recheck the same as they keep coming with innovative schemes near festivals and try to bind you with minimum commitment of trade value. We have studied a number of models and have given due cognizance to brokerage charges for Sharekhan, Motilal Oswal, Reliance Money, SBIcap and number of operators in the field. The below analysis has been arrived at by virtue of personal experience and is an individual opinion and is in no way to defame any brokerage house in India as every entity has its pluses and minuses.

I have the opportunity of having been associated with a number of online trading platforms as a user or as an analyst.Time and again I have seen this question cropping up regarding the best online platform and for the sake of a beginner or a layman and to put all the doubt to rest, I hereby give my assessment on the sites accessed/used by me.

(a) Indiabulls: I can say with authority that "Power India Bulls" software provided by Indiabulls is ultimate and I have not seen any other software matching all the capabilities including updated live chart for any stock.The brokerage is also competitive to let a customer survive and take back something to home.The relationship managers and branch heads are cooperative and atleast I can say the same for Ludhiana branch where I am holding my account. Offlate Indiabulls is also going to introduce the security token system for online trading wef 29 Oct 2009.

(b) ICICIDirect Site is suitable for an individual who intend to hold scrips for a longer duration and number of transactions is limited.This site is useful for those who are not worried about speed of platform and use limit orders.I can say with authority here that the site is definitely not suitable for day trading unless these ICICI personnel intends to change the operating platform.If you can "Fill It and Forget It"(referring to orders) type guy similar to Honda ad type then the site may be suitable for you. The brokerage charged is highest among all the available online platforms. Moreover they have grown their boots and one may not be satisfied with their performance.

(c) Reliance Money : It is a new player in the field and has to establish itself before any final verdict can be passed.However be wary of their hiding details. They are charging on the basis of a card system where one has to buy the credit initially and thereafter all trades are available at very reasonable rates. However I was not happy with the speed of the platform. Reliance money has a security token system where a key is provided to you and you have to enter that key data every time one logs in the online trading platform.

(d) Indiainfoline(5 paisa) :The site has to improve on its relationship with its customers and definitely has to provide a competitive brokerage to its customer. They never responded to a number of phone calls sent through our office.

(e) ShareKhan: Definitely a good site with good research but only hiccup is their high brokerage linked to turnover.

Remaining all other accounts of other companies are almost on equal footing with warying brokerage plans.. So if you are the one ready to jump to open an online account then consider that speed of internet is an important criterion for any platform to function.

Thus keeping all consideration in mind IndiaBulls perform the best as at one or the other stage I operated above trading platforms and finally settled for Indiabulls with Powerindiabull feature.


If you are a layman and wondering how to open an online account and operate it than my article on ONLINE TRADING published in numerous magazines is being pasted on the blog shortly,so visit next time and have a view on it and leave your comments

NOTE : This is my personal observation that India Bulls is the best and in no way I am promoting the site.Its only my way to speak for the good work being done by the site as I never had any problem in terms on speed,payment,delivery of the scrips and of course the customer relationship managers to name a few.Its just my way of saying "Keep up the good work INDIABULLS community". I am no where eulogizing the site and thus please select your trade platform with due diligence else you will be filling the pockets of your broker.

The brokerage rate can be also viewed pictorially and same will provide an ease of accessment as we are undertaking the brokerage rates comparison for SBI Cap, 5 Paisa or Indiainfoline, Sharekhan, Motilal Oswal, Angel broking, ICICI direct, Indiabulls, HDFC securities, UTI securities, Reliance money, Geojit and now a new player has come on the scene is vantage trade which can also be checked as it aggresively marketing its products