Unless you're wealthy or work on Wall Street, you probably only have a couple stocks to your name. That's perfectly okay, but unfortunately, the best way to track stocks is with expensive specialty software created for serial investors and business professionals. And you can't always listen to your broker either. Most of the time, they just want you to buy more stock so they can earn more commission. So how can the average person stay on top of their investments? Here are a few steps to learning more about your stocks.
1. Find your stock's ticker symbol
This might seem obvious, but you definitely need to know your stock's ticker symbol. This is a collection of up to five letters that is used as a shorthand on the stock exchange. It's a fast way to differentiate one stock from the others and it is the easiest way to research the company you've invested in. You can find your stock's symbol with a quick Google search. Some companies have symbols that make sense. For example, Apple goes by APPL. But others aren't quite as clear. Southwest Airlines goes by LUV on the stock exchange. So be careful because your stock's symbol might not be as logical as you would expect.
2. Search for the stock's information on financial databases
With your stock's ticker symbol in hand, you'll be able to quickly look up stock prices and another information about the company. Several news sites offer stock databases that are updated with real time information. The oldest and most efficient is Yahoo Finance, but Google Finance has similar features. When you visit these sites, just type your stock's symbol into the search and the information you need will pop up quickly. This is probably the fastest and easiest way to check the real-time price of your stock and monitor daily ups and downs.
3. Let an online portfolio do the heavy lifting
Checking your stock manually is probably more feasible if you're only invested in one company. But if you have two or more stocks you want to keep an eye on, you should set up an online portfolio. Google offers a free portfolio service where you can input your stocks and keep an eye on their fluctuations. Other websites like Mint and Wikinvest offer similar services. A drawback for these free services is that real-time stock quotes are delayed by about 15 minutes. But for the average small time stock owner, this delay isn't a big deal. If you really want up-to-the-second updates, you'll have to shell out some cash for a higher end stock tracking service.
4. Remember to keep stock fluctuations in context
The stock market can fluctuate greatly in a single day or a single week, but that doesn't mean the trend will continue. Stocks are very reactionary and can plummet one day and soar the next. Be careful not to make a snap decision based on one day's price fluctuations. Don't extrapolate too much based on an isolated incident. Some news stories carry much more weight for the company's future than others.
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When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.