While the stock market has performed well over the long term (even when you include the 2008-09 meltdown), it can be brutal in the short term.

It is this timing issue that poses the greatest threat to retirement incomes. The conventional wisdom is that you should reduce your exposure in stocks as you approach and enter your retirement.

This is still good advice, however it is not that simple - few things are these days.

Follow me on Twitter

Tough Choices for Stock Investors Facing Retirement originally appeared on About.com Stocks on Thursday, August 26th, 2010 at 21:33:33.

Permalink | Comment | Email this

How do stock investors know which way the stock market is headed?

The short answer is: they don't. No one knows exactly what the stock market will do tomorrow. However, the stock market does give investors some clues.

One of the clues the suggests what the market is thinking is volume and price. These two pieces of information can give you a peek at where the market is headed.

Follow me on Twitter

How to Spot Stock Market Trends originally appeared on About.com Stocks on Tuesday, August 24th, 2010 at 19:02:45.

Permalink | Comment | Email this

Investing in the stock market has always involved some risk. A question stock investors must re-answer on a regular basis is how much risk is too much?

In many ways, risk is a subjective, personal determination. What is too risky for you may be just right for me.

Follow me on Twitter

Is the Stock Market Riskier or Does It Just Seem That Way? originally appeared on About.com Stocks on Monday, August 23rd, 2010 at 11:26:56.

Permalink | Comment | Email this

We're all human and make mistakes and that includes executives of companies. When company leaders stumble, watch the price of the company's stock for long-term trouble.

Of course, a "mistake" is not some accidental consequence, but a decision to choose one action over another. In some cases, the mistake involves something out of an executive's private life - a messy divorce, inappropriate relationships at work and so on.

However, there are "mistakes" that can seriously damage a company's future and those are the ones that long-term stock investors must fear.

Follow me on Twitter

When Company Executives Stumble Watch Stock Prices originally appeared on About.com Stocks on Friday, August 20th, 2010 at 11:03:32.

Permalink | Comment | Email this

Stocks posted the first gain Tuesday after four consecutive losing sessions. The optimists hope this signals a rally in the making.

Pessimists see nothing but gloom (as least for the traditionally unsettled August market).

Where are stocks in the real world?

The market (defined by the Dow for this purpose) is slowly sinking for the year. The Dow is down about 178 points for the year and 622 from the high. It is almost 900 points above the low so far in 2010.

What does all this mean? For long-term investors, nothing.

At least, that's the traditional thinking. Unfortunately, counting on a 10-year average return of 8% to 10% (which is the range most quote as the historical average) may not be working so well.

At the close of 2000, the Dow was 10,787. Tuesday's close was 10,405, which means you don't even need a calculator to see for the past 10 years, the Dow is essentially flat. (Actually, if you factor in inflation, the loss is even greater.)

The point is long-term investing is still the only answer for most investors, even if you will not be able to count on a steady historical growth factor.

Find an up market (hopefully) as you approach the date five years before you need the money and bail out of stocks. Put your money in high-grade bonds (commercial or Treasury) and bank CDs.

Be happy with holding on to what you got.

Market indexes are helpful, but only if you understand what they can and cannot tell us.

Follow me on Twitter.

Stocks Stuck in Rut originally appeared on About.com Stocks on Tuesday, August 17th, 2010 at 21:28:08.

Permalink | Comment | Email this

Investors in the stock market love numbers or, at least they should be familiar with some of the most important ratios and indicators.

It is also important that stock investors understand the context of any internal number.

Here are three indicators that you should check before buying (or selling) any stock.

Follow me on Twitter

Cash and Context - Important to Stock Investors originally appeared on About.com Stocks on Monday, August 16th, 2010 at 01:44:15.

Permalink | Comment | Email this

General Motors, the once proud symbol of America's manufacturing might, reported its second consecutive quarterly profit Thursday the day before its expected filing of papers for an initial public offering.

Investors in the stock market anticipate the initial public offering (IPO) could be the largest in U.S. market history. If you find a GM IPO a bit ironic, you're not alone. The company had been publicly traded for decades before collapsing into bankruptcy in 2009.

The bankruptcy wiped out GM stockholders and left ownership in the hands U.S. taxpayers (government loans to GM were converted to common stock), Canada, some bondholders and unions.

After stripping most of the debt out of the company (and shedding some 23,000 jobs), GM came out leaner and with a mandate to make a profit. The company has turned in two impressive quarters of profits.

The IPO will offer stock to the public and give the government a chance to reclaim some of the billions it pumped into GM to keep it afloat through the bankruptcy.

Will the GM IPO be a good deal for stock investors? Normally, IPO can be risky because they are usually associated with young, unproven companies whose products may not be fully accepted in the market.

In GM's case, every stock investor knows the company and its products. The question for stock investors is can GM maintain its lean profile and profitability? Undoubtedly, there will be many opinions on these questions as the IPO nears.

If you are interested in the GM IPO, it is important that you understand IPOs and how they work.

Follow me on Twitter

GM's IPO and Its Return to Profitability originally appeared on About.com Stocks on Thursday, August 12th, 2010 at 10:23:53.

Permalink | Comment | Email this