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Stock Scans

There are thousands of stocks and that makes it challenging to research new stocks. Fortunately, with computers it is easy to identify stocks that warrant more attention. These computer programs are called screens, because they sift through lists of stocks and find the most promising stocks. Some people use several screens and see which stocks appear on multiple screens.


Sector Rotation

A major influence of a stock's performance is how well it's industry is performing.

Exchange-Traded Funds

You can trade the stock of individual companies or you can trade mutual funds that invest in multiple stocks. There is a third type of investment called Exchange-Traded Funds. These are baskets of stocks that enable you to invest in certain industries or countries. Similar to a mutual fund, the value of the ETF is based on the value of the underlying stocks or assets. The different is that the value of an ETF changes throughout the day, so it is attractive to active traders. Mutual funds are only valued once - at the end of the day.


Yield Curve

The yield curve shows the interest rates on a range of Government bonds from 3 months to 30 years. Interest rates have a two-fold impact on stocks. Low interest rates help stocks because some investors borrow money to invest. This "additional" capital increases demand for stocks. High interest rates hurt stocks because investors may opt to invest in bonds instead of stocks. This "shifting" of capital decreases the demand for stocks. Some people use the yield curve as a proxy for uncertainty. Long-term rates should be higher than short-term rates because you are lending your money for a longer period of time. The longer someone else has your money, the more chance there is that they may not be able to repay or that inflation erodes the spending power of interest payments and principle. When short-term rates are about the same as long-term rates, it means that people are afraid of the future and the demand for short-term bonds has risen, while the demand for long-term bonds has fallen. Alternate website for yield curve.

Inter-Market Technical Analysis