Equity Trading

Investing in Stocks & Fundamental AnalysisSelecting Stocks in 4 Steps Using Fundamental Analysis

Designing and implementing a system to evaluate real corporate value is absolutely crucial if you are a stock investor. Here are the four (4) steps that any investor should follow before buying any stock.

 

I) Evaluating the Industry

First of all, you must define the core industry of any company by determining factors such are:

1) Level of Competition (local & global)

2) Current Growth Rate & Forward Growth Rate

3) Expected Changes in the level of Technology

4) Industry Leaders

5) Recent Acquisitions

6) Future Industry Threats and Risks

7) Macroeconomic and Monetary Conditions

Hedge Funds Investing

The first hedge fund was created in the US during 1949 by Alfred W.Jones. Since then investing through a hedge fund has become very popular worldwide, especially during and after the 90s decade. Today, there are about 8,500 hedge funds in the world and their total assets are estimated at about 1.5 trillion USD.

 

Lipper Hedge Funds Composite Index

Hedge fund investors have historically enjoyed higher returns than the average investors of common stocks. This can be justified by comparing the historical performance of the Lipper Hedge Funds Composite Index, during the last 10 years, to the US popular Index S & P 500. The Lipper Hedge Funds Composite 'track' changes in the performance of a certain number of hedge funds.

What is Lipper at Wikipedia

Thomson Reuters

Funds of Funds Hedge FundsHedge Fund Managers & Management Fees

A hedge fund consists two roles: the manager (general partner) and the investors (limited partners). Actually, a manager can also be a limited partner, as he may invest his own money in the hedge fund. Usually, the manager of a hedge fund is a prominent person in the community with special skills and many contacts. The management fee paid is charged to investors (limited partners). Usually, the annuity fees are equal to 1% of the total assets of the hedge fund. Additionally, the management fee may include also a certain proportion of the Fund’s annual total profits.

Peter Lynch's Secret Formula for Valuing a Stock's Growth

The Standard & Poor's 500 index includes 500 leading American companies listed on the NYSE or NASDAQ and captures 80% coverage of available market capitalization.

Ticker symbols: $SPX | ^GSPC | INX

The S&P 500 stock market index is based on the market capitalizations of 500 large American companies having common stock. S&P 500, introduced in 1923, as the ‘Composite Index’. On March 4, 1957, it expanded to its current 500 stocks basket. Today, it is one of the most traded equity indices in the world. The S&P 500 differs from other U.S. stock market indices, because of its weighting methodology.

S&P500 Calculation and Weighting

The S&P 500 has traditionally been a capitalization-weighted index. Since 2005, the index calculates the market capitalization of each company relevant to the S&P 500 using only the floating number of shares (shares available for public trading).

Table: Top 10 Shares by Index Weight in the S&P500

COMPANY

SYMBOL

INDUSTRY

Apple Inc.

AAPL

I.T.

Microsoft Corp

MSFT

I.T.

Amazon.com Inc

AMZN

Consumer

Facebook Inc A

FB

I.T.

Johnson & Johnson

JNJ

Health Care

Berkshire Hathaway B

BRK.B

Financial

JP Morgan Chase & Co

JPM

Financial

Exxon Mobil Corp

XOM

Energy

Alphabet Inc A

GOOGL

I.T.

Alphabet Inc C

GOOG

I.T.

Find the full list at Wikipedia: https://en.wikipedia.org/wiki/List_of_S%26P_500_companies

About TradingCenter

TradingCenter provides essential information and tools for learning and trading the Global Financial Markets. TradingCenter helps investors to improve their skills and their level of understanding regarding core mechanisms of the trading process.

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18 March 2019
17 March 2019
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