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What was the dot.com bubble?

What was the dot.com bubble?

In the world of investing, certain phrases catch on like wild fire. Before you know it, you’re hearing catchphrases on the news, on analyst shows and even on the street from strangers. Maybe no other phrase exemplifies this better than the dot.com bubble. The dot.com bubble was a mini-crash of sorts in the stock market that only affected one segment of stock: the internet company.

The origin of the dot.com bubble can be traced back to 1994. The rise of the Internet from being a Department of Defense secret to a widely used tool in everyday life caused the formation of thousands of new businesses seemingly overnight. Many of these dot.com’s were not run by people who knew that much about business, but the ease of starting their own company over the Internet was so simple, most investors didn’t realize this.

As people poured onto the Internet, excitement grew as to the possibility of reaching such a large number of people so easily and so cheaply. It was, however, the misunderstood nature of the Internet that caused the eventual dot.com crash. Reaching all those people and getting them to buy your product turned out to be a little more difficult than most thought.

Three particular companies that would come to represent the dot.com age were WorldCom, who would end up not surviving the bubble, Netscape, which is still in business today but is considered an also-ran by many, and Yahoo, who isn’t the industry leader it use to be, but is still doing quite well.

The “bubble” referred to in the name comes from investors speculating about a companies future, and as the stock for that company begins to rise, the bubble builds. It’s called a bubble because the speculation and the rise in stock prices isn’t based on any real, ironclad evidence that the company is really worth all the hype.

The Dot.coms began to fail en masse midway through 2000. The Nasdaq market felt the full brunt of these failures since so much of their listed companies were dot.coms. Many companies, such as WorldCom and Pets.com ended up going out of business, costing investors millions. Others, such as Yahoo and Amazon survived, with Amazon being stronger than ever.

It’s unknown if there will be another dot.com bust in the future. With Google having bought YouTube for over a billion dollars, anything is possible. But one hopes that investors will be more careful this time and heed the lessons of dot.com bubble’s past.

Mike Steup Affiliates

WebHilfe Erhard Küster

What is the Dow?

What is the Dow?

If you turn on your local financial news, you’re bound to hear the phrase Dow Jones Industrial Average at some point. Most people assume that this just means the stock market, or that it refers to the New York Stock Exchange. But what is the Dow, and what exactly does it measure?

The Dow is a market average. It is used by investors to figure out how certain companies that are being traded are doing. The Dow isn’t the only market average out there, there is the S&P 500 and The Russel 2000, as well.

The Dow takes into account 30 industrial stocks of well-known companies. The 30 companies are likely ones you’ve heard of, like Goodyear, Exxon, IBM or General Motors. The Dow calculates the rises and falls of these 30 stocks and presents a picture of how the overall market and the overall economy are doing. While it may sound complicated, it really isn’t. The Dow is simply a list of 30 companies that have their estimated values averaged together with a particular formula.

The other averages follow essentially the same methods. The S&P 500 uses the values of 500 major companies, while the Russel 2000 keeps up with 2,000 companies that are smaller than the ones used in the S&P and Dow.

The key to following the Dow or any of the other market indexes is to look for trends. Market analysts can decipher problems or benefits in the current economy by looking for particular stocks that go up in certain situation, and particular stocks that go down in others.

The Dow company, now known as Dow Jones & Company was founded in 1882 and they classify themselves as a financial information and publishing firm.

The Dow is responsible for the publication of the Wall Street Journal, maybe the most well known financial publication in the world. The Journal’s first issue was on July 8, 1889. Dow also publishes several other financial publications, as well as Barron’s Magazine.

The Dow also runs several websites dedicated to financial news and information, such as CareerJournal.com and OpinionJournal.com.

The Dow also has a hand in the broadcasting world, where it helps to provide financial content for the CNBC cable network, as well as two finance-oriented radio shows.

The Dow Jones & Company machine is one of the most powerful forces in American investing. Their indices are the industry standard, and the Wall Street Journal has the second highest circulation of any newspaper in North America. The Dow helped to start finance in the US and they look to be a big part of finance in the future.

Mike Steup Affiliates

WebHilfe Erhard Küster

What is stock?

What is stock?

For those that are new to investing, learning the lingo that is used on Wall Street and in economics classrooms around the globe is essential. When you hear the phrase “stock market” you get a vague picture of a group of men and women running around like crazy people with slips of paper in their hands and yelling out numbers and words that you can’t quite make out. To understand what’s going on, let’s start at the beginning and find out what stock is.

Stock can be described as the wealth (or capital) raised by a company or a corporation from the issuance of shares.

If you own stock in a company, say Microsoft, that would make you a shareholder in Microsoft. If you take all the shares available from Microsoft, or any other company and put them together, that is called Microsoft’s market capitalization. This is figured by multiplying the current price of a stock times the number of shares.

Stock falls into four major categories. There is common stock, preferred stock, duel class stock and treasury stock. Common stock is, just like the name says, the most common kind of stock available. Ownership of common shares usually comes with some voting rights when it comes to decisions made by the corporation. Preferred stock is different from common stock in the sense that they usually get paid more dividends and usually come with extra rights and decision making abilities for the company they are for. Dual Class stock is a combination of the previous two kinds of stock and the rights attached to each share vary. Finally, treasury stock are shares that were once issued to the public, but have since been bought back by the company.

The history of stocks goes back many hundred years to the Dutch East India Company, who began offering shares of their stock as far back as 1602. The East India Company helped to pioneer the idea of joint ownership and helped the economic growth in Europe at that time.

The most popular place to trade stocks in the United States is, of course, the New York Stock Exchange, where millions of shares change hands on a daily basis.

The world of economics and stock trading can be very exciting and very profitable for those that know the ins and outs. Hopefully, this article helped shed some light on what stocks are and how they are used by companies.

Mike Steup Affiliates

WebHilfe Erhard Küster

What is a commodity?

What is a commodity?

For someone outside of the Wall Street marketplace, understanding the world of stocks, bonds, P E Ratios and some of the other jargon that’s used every day in the business section of the newspaper can be difficult. One such term that many people may use but not exactly understand is commodity. Most people know that commodities are traded like stocks and that they can be worth a lot of money, but if you ask more specifically, what is a commodity, many people wouldn’t be able to tell you.

So, what exactly is a commodity?

When talking about a commodity, there are a few qualities they usually have. Commodities are manufactured by more than one company and the quality of the commodity is the same from company to company. You wouldn’t be able to tell one companies product from another if you tried.

Sound confusing? It’s not, really. Things like oil, electricity and lumber are considered commodities. A product like, say, clothing wouldn’t be, because people can tell the difference between company A’s clothes and company B’s clothes. If you have a barrel of oil in front of you, it’s pretty much going to be the same as a barrel of oil from another company. The term that’s used in economics to describe this is product differentiation. If you can tell the two products apart, it’s not a commodity.

Historically, commodities are priced based on their “marginal cost,” which means the cost it takes to take the oil from the ground, barrel it and ship it. In today’s market, however, most commodities are priced higher based on things like one companies ability to do the job either faster or slower.

Other products fall into the commodity category like wheat, orange juice and pork bellies (the belly-part of a pig that bacon is made from). More recent commodities include Internet bandwidth and some computer chips.

A famous movie from the early 1980’s Trading Places was about a group of men who tried to make money on the commodities market. While the movie was fictitious, it showed how quickly large amounts of money can be made on the commodities market, and how quickly it can all be lost.

Understanding a little about what goes on on Wall Street can be a fun way to be introduced to the world of economics. While this introduction just skimmed the surface, the next time you hear someone mention commodities, you’ll know exactly what their talking about.

Mike Steup Affiliates

WebHilfe Erhard Küster

What is a bond?

What is a bond?

With the proper savings plan or with a lucky financial windfall, many of us are ready to start investing. However, if you didn’t take any economics classes in high school or in college, you may not be familiar with the basics. Having seen the morning financial news for years, you’re probably familiar with terms like stocks, bonds, commodities and Wall Street, but you might not know exactly what they mean. Let’s take a closer look at exactly what a bond is.

A bond is described as a debt security. Now, don’t let that term confuse you, consider it much like an I.O.U. When you invest in the bond market, what you’re doing is giving your money to something, whether it is a corporation, a government, a federal agency or a municipality that is known as a bond issuer. Now, what do you get in return for this act of faith? You get interest. When you buy the bond, you agree to receive a particular interest rate from whoever you bought it from, and then once the bond “matures,” you get however much you bought the bond for back (usually the face value of the bond.)

The different types of bonds you can choose from are varied. Most people have heard of war bonds that are issued by the country to raise money for war. These were extremely popular during World War II and became a very patriotic thing to do. There are also things like asset and mortgage backed securities bonds, bonds issued by foreign governments and many other kinds.

Now, bonds sound like a pretty good investment, but it doesn’t sound like something that’s going to make you rich overnight. Well, that may be true but that doesn’t mean that bond investing is a bad thing. Think of investing in bonds as good long-term planning. They are perfect for families that need to save for their kids’ college education. If you don’t have kids, don’t worry, bonds are a fantastic way to save for retirement. Bonds are also highly recommended to have as part of your investment portfolio. No matter how much risk you can afford, it’s good to have a rock solid investment, too, so if things don’t’ work out well with your other investments, you have something reliable to fall back on.

Today’s bond market is varied and there are options for everyone, whether you’re just out of college and are looking ahead or if you are a Wall Street high roller and you need an anchor to your portfolio. Investing in bonds can be a fun and educational way to begin investing, and you likely won’t lose your shirt in the process.

Mike Steup Affiliates

WebHilfe Erhard Küster

Improving how to spend your money

Money may not be with you all throughout the year. There are downs and ups when we talk about the financial resources and income of an individual or family. In dealing with financial difficulties, there is a need to have budgeting techniques as early as possible. There is a need for us on how to master the art of stretching the capacity of our available money.

It is but normal to commit errors especially when you are not yet used to doing things your job calls for you to. But, do not make those mistakes that you would surely regret in the long run. As soon as you could, you have to develop a great way of managing to budget your money. There are some tips you could remind yourself of. These would be points you could use in making or establishing good means to improve the way you budget your money.

• Make a list of your unwanted budgeting habits. This includes all those you think of being not useful or helpful for you and your financial needs and financial security.
• You plan on what to do in order to tae the first steps in changing your old habits or acts in which they made your budget method a failure.
• Manage your income and the amount of money you spend by preparing a sort of tally sheet of such information.
• Prepare your spend plan. This must include your foreseen expenditures.
• Collect receipts and note bigger amount spent
• Limit spending by looking for some alternatives to it
• As much as possible do not uses much credit card or checks.

Those above-mentioned points are really a great reminder for you. If followed, you would clearly see the improvement in your budget techniques. It would surely result to better financial management capacities for you.

When this is achieved, you would definitely live a more satisfactory life. The right way of how you budget what you need as a winning one in the field of financing one’s self.

Mike Steup Affiliate

WebHilfe Erhard Küster

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