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Kurtis Hemmerling
Kurtis Hemmerling is a personal finance enthusiast that has been putting his passion into writing since 1998. His goal is to demystify the investment world to benefit the readership of Money Crashers.

7 Common Lies Told by Mutual Fund Managers and How to Avoid Them

By Kurtis Hemmerling

mutual fund performanceIs your mutual fund advisor stringing you along with a lie? Are you getting the facts, or a skillfully staged show full of smoke, mirrors, and misdirection?

If you decide to invest in mutual funds, it’s very important to do your research and not blindly follow your advisor’s advice and claims.

Here are some of the most common myths and questionable practices surrounding mutual funds, and how you can combat them.

Mutual Fund Myths

1. “Mutual funds perform better than stocks since they are managed by experts.”

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Stock Market Timing Strategies – Do They Really Work?

By Kurtis Hemmerling

market timing stock chartsSome analysts claim that they are able to time the stock market and only invest during bull markets. The premise is simple: Buy stocks when the aggregate market is climbing and sell at the onset of a bear market.

In theory, you can maximize gains and virtually eliminate losses.

But is this possible? Do such strategies exist?

An Example of Market Timing

The conglomeration of publicly traded companies is often represented by a smaller cross-section of stocks called an index. For our example, we will use the well-known Standard and Poor’s 500 index, or S&P 500. This index is focused on large American companies and is typically used to gauge the stock market in general.

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52-Week High Stocks – Is It Time to Buy or Sell?

By Kurtis Hemmerling

stock price highWhen you see a stock heading towards a 52-week high, what is your initial reaction? Do you think that the stock is hitting powerful resistance and you should sell? Or is the stock about to rally with high momentum?

This is a difficult and highly debated issue with many theories and analysis supporting different views.

A 52-week high is simply the highest price at which shares have traded over the past year. Numerically, this reference point holds no special value, but on a psychological level, it has a profound impact on investors and can greatly influence the share price.

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How to Place a Trailing Stop-Loss Order – Example, Pros & Cons

By Kurtis Hemmerling

trailing stop loss chartOne of the most difficult decisions investors have to make is when to take profits and when to cut losses short. Some traders will prematurely sell as a stock rises while others will hang onto their shares far too long as prices plummet.

How can you prevent from making the latter mistake? The trailing stop-loss order is one tool that can help you trade with discipline.

Let’s look at what the trailing stop-loss is, how it works, and the pros and cons of using it.

Trailing Stop-Loss Order

The trailing stop-loss order is actually a combination of two concepts. There is the “trailing” component and the “stop-loss” order.

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6 Investment Risk Management Tips for Buying Stocks

By Kurtis Hemmerling

risk management stocks cliffNot to knock the popular mutual fund screening filters, but it seems a little deceptive to suggest that one can simply check off boxes for “low risk” and “high performance” to find investment opportunities that will reliably beat the odds in the stock market with minimal risk.

If lowering risk and attaining high rewards were as simple as ticking two boxes, why wouldn’t everyone do it? What incentive would there be to pick high risk and low reward stocks? And who would need the investing genius of Warren Buffett, the Joseph Piotroski F-Score system that gained 138.8% in 2010, or the likes of William O’Neil with his high-growth CAN SLIM methodology?

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Free Cash Flow Definition & Calculation for Evaluating Stocks

By Kurtis Hemmerling

cash flow faucetWith thousands of dividend-paying blue chip stocks in the market, how can you figure out which ones are wise investments? Do you know what to look for to judge whether or not a company can sustain dividends?

When it comes to high-growth companies that don’t pay dividends, can you determine if their growth strategy is exceeding their budgets?

One smart method for evaluating the health of a dividend-paying company or a growth stock is to analyze its free cash flow.

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What Is a Covered Call Option Explained – Selling & Writing Strategies

By Kurtis Hemmerling

covered call optionsDo you own shares of stock in a publicly traded company? You might think that your only trading options are to either buy or sell these shares, but when you factor in financial derivatives, the number of investing strategies available to you increases drastically.

One such strategy, known as the covered call option, allows you to create additional income, boost dividends, and hedge against a falling market.

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How to Invest in Gold – Stocks, Funds & Bullion

By Kurtis Hemmerling

invest in goldAmid government debt, economic uncertainty, and political unrest, you’re one of many investors aware of the frightening factors that can lead to heightened levels of inflation.

Given these concerns and the potential erosion of the value of paper currency, gold has become a more popular investment option than it ever was before.

But how do you include gold in your personal investment portfolio? Seven great tools are available to you.

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Fama and French Three Factor Model for Stock Investing

By Kurtis Hemmerling

3 factor modelA logical investor might assume that the best performing stocks are massive, cash-rich companies that have been in existence for decades. A reasoning mind tells us that smaller companies (i.e. small and micro-cap stocks) present a higher risk with less padding to fall on during economic crises. Others might argue that small stocks might be a suitable investment, but only if they are high-growth companies that are aggressively increasing net profits annually. But most might agree that small companies with low growth potential that trade close to their intrinsic value do not present valuable investments.
But does historical and empirical data back up this intuitive response or does it lead us in another direction? The answer is somewhat surprising, and the research behind the answer brings us to the Three Factor Model.

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Dividend Payout Ratio Formula & Definition – Analyzing Blue Chip Stocks with High Dividends

By Kurtis Hemmerling

dividend payout ratiosWhen it comes to picking the best blue chip dividend-paying stock, all that really matters is dividend size, right? Wrong!

As a blue chip investor, you know how important it is to do your research. And you also know how much data is available. Even well-trained investors can find it overwhelming.

If dividends are your priority, then you can’t just look at the size and frequency of a company’s recent payments. You also need to look at the dividend payout ratio when you’re analyzing stocks. Otherwise, you could end up buying shares of a sinking ship that is cleverly masked with unsustainable high-yield dividends.

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4 Factors Affecting Historical & Future Gold Prices – Will It Go Up?

By Kurtis Hemmerling

gold pricesIn 2002, gold traded for less than $300 per troy ounce. In 2010, the rate popped above $1,400.

Why did gold’s value rocket up so high? How much higher do some analysts predict gold prices will soar?

Experts have four main theories to try to explain the rise in gold prices. While no theory is 100% perfect, each one has played a role in the recent cost of gold.

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Price/Earnings to Growth (PEG Ratio) Definition Explained – Calculating Growth Stock Valuation

By Kurtis Hemmerling

growth stock handStocks go up in price for a number of reasons: a favorable news report, an entire sector rising, the appearance of undervaluation based on historical fundamental data, or trading by technical analysts based on bullish price and volume patterns.

For a stock to sustain a steep price increase, it should be expected to experience high revenue and earnings growth. But is expected growth alone enough to decide if a company represents a good valuation? Of course not. One also needs to look at the stock price to determine if it represents a strong valuation relative to the company’s expected growth.

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CAN SLIM Stock Trading Investment Strategy – How to Pick High-Growth Stocks

By Kurtis Hemmerling

canslim bull marketWith thousands of publicly traded companies to choose from, you may wonder how you can single out a handful of stocks that have the potential for significant capital gains. Many methods for picking stocks exist, from Warren Buffett’s value investing mentality to the Joseph Piotroski F-Score method.

One particularly useful strategy for detecting high-growth stocks uses the acronym CAN SLIM. What is this approach? How profitable is it and who invented this unique stock trading system?

Below, you will find a detailed description of this high-growth investing system that uses both fundamental and technical analysis, and how you can utilize it.

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Buffettology: Warren Buffett Quotes & Value Investment Strategy for Stock Picks

By Kurtis Hemmerling

warren buffettWhile it may be tempting to throw yourself into the dramatic highs and lows of investing in the stock market in search of instant gratification, it’s not necessarily the most profitable choice. Warren Buffet has spent his career watching investors pounce on “hot” companies, only to flounder when the market takes a plunge. All the while, he’s been steadily accumulating wealth by taking an entirely different approach.

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How to Pick Winning Stocks that Gain 138.8% – Joseph Piotroski F-Score Value Investing Model

By Kurtis Hemmerling

piotroski stocks upPlaying and investing in the stock market is a gamble. But you can decrease and manage investment risk when you have a strategy that works, like Joseph Piotroski.

The American Association of Individual Investors tracks 63 separate stock picking strategies that include a mix of growth, value, momentum, changes in earnings estimates, and insider buying. By the end of December 2010, the winning strategy for the year was from Joseph Piotroski with a 138.8% stock market gain over 12 months. You can see the rankings for yourself on the AAII scoreboards.

What is his system and how can you pick similar stocks? Read on…

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