Category: Where to Invest

Where to invest is the most common question when someone decides to enter the markets. It doesn’t matter what the market is. It could be a stock market or Forex, or cryptocurrency market. The question will always be the same: Where to invest.
Traders-Paradise aims to give you some clues, to give you some hints of where to invest in.
The possibilities are enormous and if you want to make a profit or secure your future, investing is the most profitable solution. In turn, you’ll enjoy knowing that you made a better choice than savings can ever be. Moreover, you could earn a lot by investing a little money.

Here you will find great articles about new technologies, investment opportunities, all with suggestions.

The main goal that Traders-Paradise has is to show you how investing process can be easy and profitable. If you want to get more knowledge about investing, this place is top for you. Traders-Paradise knows that investing may sound strange and difficult. But, if you have any doubts about investing this is the place where you can find all answers.

The website Traders-Paradise will show you where should you start and how to begin your investing journey. You may read different financial websites but this one is unique due to its true fact-checking, honesty, clear, serious, and comprehensive observations on a given subject. You’ll have a true and detailed picture of the world of investing. That is a common goal for both you and Traders-Paradise’s team.

We wish you profitable investing.

  • Today’s 3 trading opportunities ( July 13, 2021 )

    Today’s 3 trading opportunities ( July 13, 2021 )

    Our trading algorithm found many opportunities today. Here are 3 of them + the best trading strategies our algo-trader found.

    Please note: These strategies might take up to few weeks to end. Be patient.

    Dollar Tree Inc. (Symbol: DLTR) – Current price: $98.95

    Strategy
     Take Profit = $106.56 
     Stop Loss = $87.44

    Click “Play” to see what actually happened:


    Ball Corporation(Symbol: BLL)- Current price: $84.76

    Strategy
     Take Profit = $87.43 
     Stop Loss = $80.31

    Click “Play” to see what actually happened:


    IBM (Symbol: IBM)- Current price: $140.92

    Strategy
     Take Profit = $145.03 
     Stop Loss = $133.96

    Click “Play” to see what actually happened:

     

  • How to find and use the best online stocks trading platforms?

    How to find and use the best online stocks trading platforms?

    update: 2/1/22

    Choosing an online broker platform is one of the most important decision you will make as an investor. And the most powerful tool in your hands..
    Every trader has it’s own investment style of trading, and abundance of brokers’ offers allow individuals to choose what best fits their needs.
    If you’re an active trader looking to try your hand at beating the markets, you probably have a good idea of what you want from a brokerage: low costs, premium research, innovative strategy tools and a rich with features trading platform.

    The era of online stock brokers makes the world as high-risk/high-reward investing available to the wide public.

    Profitable investing takes time and a lot of hard work.

    It also requires you to use a brokerage service that fits your investing goals, educational needs, and learning style.

    If you are new investors, selecting the right online brokerage can mean the difference between a breathtaking new income stream and a short-lived struggle against disappointment, followed by inevitable frustrating handover.

    You have to know one thing, there’s no sure-fire way to guarantee investment returns, but there is a way to set yourself up for success by selecting the online brokerage that best suits you.
    We’ll try to show you all the important things you should be looking for in your ideal brokerage on your path to find the best online broker.

    For a starter, take a moment to focus in on what is most important to you in a trading platform, before you start clicking on brokerage ads.

    You’ll be surprised!

    The most important is to recognize your own needs.

    You must know them.

    If you are the novice, you may prioritize things such as basic educational resources, large glossaries, easy access to support service or the ability to have practice trades before you start playing with real money.

    A really experienced investor, possibly someone who executed hundreds of trades already but is looking for a new broker, is going to prioritize advanced charting capabilities, conditional order options or the ability to trade derivatives, mutual funds, commodities, and fixed-income securities, as well as stocks.

    And you have to be honest with yourself about where you are right now in your investing tour and where you want to go. Do you want to try your hand at day-trading but don’t know where and how to start? Do you like the idea of tailoring your own portfolio, or you want to pay a professional to provide it done right?

    For now, we suggest you start with these crucial deliberations as a way to determine which of the brokerage features would be the most important to you.

    To help yourself to find and use the best online stocks trading platforms be honest when you are answering these questions.
    a) How much do you already know?
    Obviously, no one knows everything. But the question is how comfortable you feel when risking your own funds. Again, we encourage you to start with a demo account (you can find at the end of this book a link to a demo account).
    b) What kind of trades will you want to execute?
    Stocks? Forex? Crypto? Daily?
    c) Are you an active or passive investor?
    Are you the type of person who can start a trade, let it go with its strategy and leave it aside, or you’re the type of person who checks his portfolio daily, read about it, sign up to newsletters, etc.
    d) What kind of help do you need?
    Do you need help on learning how to trade? On what to trade? Recommendations? Or maybe you want to do it all by yourself?
    e) What are your goals?
    This is an important question. Your goal is to make a profit, of course. But, how much you’re willing to lose? How “hard and dangerous” your trades look? How much profit you want to gain and monetize and how much you want to leave at your broker account to use for more money? These questions will act as your guidelines.
    Be brutally honest with yourself about how much time, energy, and effort you are willing to put into your investments. Your answers may change over time, no one can anticipate all their needs and goals for the rest of the life. Just start with where you are right now and go with the flow.

    Pay attention to several more things such as:

    * Does the brokerage website offer two-factor authentication
    * Do they clearly explain how they use encryption or “cookies” to protect your account information and how they work?
    * Try searching the web for reviews of the brokerage, using keywords like “insurance claim”, “fraud protection”, “customer support”, “chargebacks”, “easy withdrawal”
    * Will the company reimburse you for losses resulting from fraud? etc.

    And then test the broker’s platform.

    We recommend you trying out our preferred trading platform, for free. In this link can open a free demo account with virtual $100,000.
    Your capital is at risk.

    Every brokerage should have a decent description of what kinds of tools and resources its trading platform offers.
    But sometimes the best way to evaluate platform quality is to give it a test drive.

    For brokers that allow you to open an free or demo account, it might be worth the effort to go through the signup process just to access and test the trading platform.

  • The Hottest Investing Trend Today – ESG

    The Hottest Investing Trend Today – ESG

    The Hottest Investing Trend Today - ESG
    ESG investors who combine these stocks with traditional assets and generate better returns. ESG stocks become the hottest investing trend.

    By Guy Avtalyon

    Everyone would like to know what is the hottest investing trend today. Despite many expectations that it easily could be pharmaceuticals or biotech stocks due to the current pandemic, the new investing trend is quite surprising. Some would expect that developing a new vaccine for the new coronavirus could attract investors’ attention. But it looks that some other industry has more potential. Some other stocks are able to generate better returns. We are talking about ESG investing. 

    Yes, that’s true. ESG stocks generate better returns than the overall market all the time. And it is pretty interesting if we know the ESG stocks carry less volatility then many many other stocks. Even if it is surprising, ESG investing is a fast-growing trend. So if anyone asks you what is the hottest investing trend today, you\re free to say ESG and you’ll be right.

    What is ESG investing?

    ESG investing is also known as sustainable investing. It is all about environmental, social, and governance. These three classes are massively under investors’ attention and a lot of money is already invested in this sector. We can discuss whether it is a smart investment decision or not but data shows it is. Take a look at this chart below. 

    The chart shows the S&P 500 ESG index’s relative performance. We can see that it has outperformed its benchmark by approximately 3 percentage points during the past 52-weeks.

    Investing is related to the future. No matter what are you looking for the main goal of investing is to improve your future. Stocks also want to develop their better performances in the future, so it looks like they have the same goal as investors. But why is ESG the hottest investing trend today? How does it become such a profitable class for investors? As we said, ESG stocks generate better returns, they generate profits and hence, reward all investors involved. 

    Why is ESG the hottest investing trend now?

    The global trend for many years is sustainability. That means the sustainable company plans the future and plans to be present in the future, not just to shine for a few years, to get a few bucks and turn all operations off.
    ESG investing is a common term for investments that seek better returns. The other goal is the long-term impact on the environment, society. Sustainable investing comes in forms of ESG, impact investing, socially responsible investing or SRI, and also, values-based investing. The other school of thought adds ESG under the umbrella of SRI where there is also, ethical investing and impact investing.

    The Financial Times describes ESG  as “a generic term… used by investors to evaluate corporate behavior and to determine the future financial performance of companies.” 

    Today, almost the whole of civilization is working on sustainability, and the businesses that do the same are popular and supported. Bank of America published a study that shows that 86% of customers believe companies should consider ESG problems. For example, data from that study reveals that 94% of Generation Z and 87% of Millennials are very interested in this issue. For them it is important, (well, not only for these two generations), that the companies’ focus is on renewable energy, waste management, diversity. Also, consumers showed a great level of determination in the answers about the company’s reputation toward their focuses on the environment. How the companies treat it is maybe one of the main criteria when customers have to decide if the company has a good or bad reputation. 

    Sustainable investing strategies

    ESG is the hottest investing trend today. It outperformed the market in recent years. So it looks the gap in returns will only grow as time goes by.
    ESG investing is influential, and it’s only increasing. Bank of America estimates that $20 trillion is going to flow into ESG funds in the next two decades. For the purpose of comparison and to have a real picture how big is that amount you have to know that the entire S&P 500 is worth about $25.6 trillion. 

    ESG investing strategies are not new but here are some tips.

    Choose the best in the class. This strategy includes the selection of the best performing or most modernized companies recognized by ESG analysis. 

    Investing strategy based on engagement activities such as active ownership of shares, voting on company governance is one of them, for example. The goal of this long-term process is to influence the behavior of the ESG company. 

    ESG integration into traditional financial analysis and investment decisions. This strategy focuses on the possible impact of ESG issues on company outlook. That in turn may change the investment decision. For example, if the impact of ESG is positive, the company is likely to look more favorable as an investment opportunity. 

    As you can notice, momentum is growing. Shareholders are demanding action more and more. The consequences arise for companies that fail to adjust.
    Conscious capitalism is a management strategy that highlights adjusting the business with shareholders to share success. A company that matches that goal not only runs for profits to shareholders, but also takes care of employees, the environment, clients, and community. That generates long-term profitability.

    How to trade  ESG stocks

    First, do your research. Open an account to trade ESG stocks. Fund your account and pick the company. You can use your account to invest in ESG stocks by buying shares or trade on the price movement using spread betting or CFDs. You can go long or short on ESG stocks like with any other stock. Also, you don’t need to take ownership of any shares.

    Where to find the hottest investing trend?

    For example, tech startups are some of the hottest investing trends. They broadly implement sustainable practices and make up a respectable part of ESG investing. Innovation-focused companies that develop advanced technologies, do it in a way that is in the best interest of civilization. For example, Microsoft or Apple, both are among the largest sustainability-focused companies. They generated great returns to their investors in the past few decades. And also, the important part is their reputation among customers. It’s excellent. 

    Since ESG investing isn’t all about the environment, something is about community impact or employee satisfaction. These companies are recognized as employee-friendly, also. These characteristics will drive their share prices in the future to stay on the top in the investment world.

    Still, some will argue that taking this approach in investing could mean reducing returns. But some researches advise otherwise. For example, you can choose the easiest approach and buy ESG-focused ETFs that track the index. Some of them outperformed their benchmarks last year and continue this year also. ESG investments had record amounts of capital inflows in Q1 this year.

    ESG has a great influence on reducing risk. Adding ESG stocks in investment portfolios can help investors to reduce risk. Consider ESG and prioritize stocks. They have to align with the values most important for you. Use the ratings from an ESG agency to examine the company.
    One note, climate change ruled the headlines at the beginning of this year. Seizing fossil fuels is an issue per se, many companies announced that would limit investment in coal, for example. So, ESG investments are possible to have strong growth in the coming years and decades. ESG investing is the hottest investing trend today and an excellent way to profit.

  • What is GARP And GARP Investing?

    What is GARP And GARP Investing?

    What is GARP And GARP Investing?
    The definition of GARP stock can vary but is based on the P/E to PEG ratio, which divides the P/E ratio by the growth rate.

    What is  GARP or longer, Growth At a Reasonable Price? Growth at a reasonable price or short GARP is an investment strategy. This strategy unites the principles of both growth and value investing. How does it do that?  When you find the companies that have consistent earnings growth but don’t sell at too high valuations. This term was introduced by investor Peter Lynch.  

    While combining principles of growth investing and value investing it serves traders to pick individual stocks. GARP investors look for companies with steady earnings growth that is higher than market levels. That means they are eliminating companies that have very high valuations. The general goal is to avoid the extremes in any type, growth, and value investing.

    GARP investors invest in growth stocks but such that have multiples low price/earnings (P/E) in average market conditions.

    What is GARP Investing?

    GARP investing or growth at a reasonable price is a combination of value and growth investing, as we said. GARP investors seek companies that are slightly undervalued but with sustainable growth potential. Their criteria are almost the mixture of those that the value and growth investors use. Stable earnings growth is still on top position as one of the most important features but also valuation has a great influence on whether they pick a particular stock or not.

    Building such a portfolio that consists of “Growth At a Reasonable Price stock” isn’t just picking the stocks with an equivalent amount of growth and value. The point is to choose the stock that each has qualities of both, value and growth.

    Aggressive growth investors never pay too much attention to the value of the stock. Here are some reasons why they should consider the value of the stock. Let’s say that growth investors profiting from stocks with excellent earnings growth. Such companies are beating all earnings estimates all the time. Do they have any guarantee that the companies will resume performing with success and how long? They could make a profit only if the company proceeds to generate high profit and grow constantly. But what will happen if it stops to do so? 

    Here we have the value in the scene. Value is important to understand the level of investors’ expectations related to the particular stock. Also, value is helpful to gauge how far some growth stock could drop if it starts to sink. To put this simple, value adds a portion of reasonable thoughts and exact estimates into the calculation. 

    How does GARP work?

    A basic formula for finding GARP is the PEG ratio. It is aimed to measure the balance between growth and value. The optimal PEG ratio should be one or under the one.

    Here is how it worksLet’s say the company is trading at $50 per share with EPS forecasted to rise for15% over the year. 

    P/E ratio = $50/$5 = $10
    PEG ratio = 10/15 = 0,66

    This PEG which is less than 1, makes this company a good candidate for GARP.

    Why does Growth At a Reasonable Price matter?

    This could be an added explanation of what is GARP. GARP helps investors to avoid the possible problems or traps that they may have with complete investing in growth or value stocks. If growth stocks rise too high they may create a bubble that could burst in a minute. On the other hand, value stocks can stay the same in the price for a long time. With GARP investors could find the golden middle zone. The investment stability where they can benefit from rising prices of growth stocks but, at the same time, they’ll be protected with value stocks if the growth starts to fall.

    Some may say that GARP stocks will underperform growth stocks in a growth market. Also, such will notice that GARP stocks will underperform value stocks too but in the value market. Despite these criticisms and objections, GARP could easily outperform in combined markets and could do it over a long time.

    What is a GARP strategy?

    It is a mixed approach to growth and value stock-picking. This kind of investor obtains a combination of returns. In other words, the GARP investing strategy is hybrid.
    In GARP investing it is necessary to look for low price/book ratios and a PEG ratio of less than one, as we said.

    P/B ratio = current price/book value per share
    PEG ratio = P/E ratio/predicted growth in earnings

    We said a GARP investor will obtain a combination of returns. This actually means, when markets are dropping it is better for value investors. Hence, markets are rising. It is better for growth investors. On the other hand, GARP investors could benefit from any market condition because they are somewhere between the mentioned types of investors but unite characteristics of both.

    What is it in essence?

    Growth At a Reasonable Price investing doesn’t have inflexible limits for adding or eliminating stocks. The basic benchmark is the PEG ratio. The PEG presents the ratio between a company’s valuation (P/E ratio) and its required earnings growth rate for the next several years, for example. If stocks have a PEG of 1 or less,  that means the P/E ratio is in line with predicted earnings growth. This helps to find a stock that is trading at a reasonable price.

    During a bear market or other declines in stocks, the returns of GARP investors could be higher than the growth investors can get. However, in comparison to the value investors, GARP investors may have average or under average returns. But since GARP investors hold stocks with characteristics of both growth and value stocks, the average returns they get is higher than average returns for growth and value investors can get from their investments separated.

    Bottom line

    GARP stocks are picked by a joining of earnings growth and valuation when investors want to evaluate the right picks. The idea behind this is to recognize cheap stocks with a growing possibility in the future. Hence, the earnings growth of GARP stocks is notable above that of the market.

    GARP is the abbreviation for “growth at a reasonable price” and represents truly a combination of value and growth investing. So, GARP investors seek for a stock that is trading for somewhat less than its predicted value but has earnings growth potential. GARP stocks are slightly lowered but can grow soon. So, what is GARP? It’s all about how to find stocks that have a future.

  • Defensive Stocks Are Excellent Investment But…

    Defensive Stocks Are Excellent Investment But…

    Defensive Stocks Are Excellent Investment But...
    Defensive stocks provide dividends and stable earnings but the low volatility may cause fewer gains during bull markets.

    By Guy Avtalyon

    Several days ago, the website U.S.News posted an article about defensive stocks. As always, great and concrete suggestions.  You can find their suggestions with an explanation of why the proposed defensive stocks are best picks for this June.
    Here is one quotation about these stocks.

    “More conservative investors who value both capital appreciation and preservation of capital might look to these stocks.” was written The U.S. News. 

    This might mean this kind of stock is less risky than most of the stocks in the market.

    Further, in the same article, you’ll find a short description of what criteria investors should use when picking defensive stocks. For example, market capitalizations should be above $50 billion, such companies should have at least a 10-year track of continuous paying dividends, etc. All is followed by the list of these stocks that look like the best choice for June this year.

    That simply imposed the topic, what are these stocks. Why buy them? How to choose? Where to look for them? 

    What are defensive stocks?

    A long time ago it would be very easy to answer. You could be easily trapped listening to some financial experts saying how defensive stocks are boring investments. Moreover, you could hear they are too conservative. It might be true, even today. These stocks come into utilities, healthcare, and staples sectors. Well, one could think: Yeah, these sectors are not excited, not at all, so why should I invest there. We would like to ask you something. Would you like to invest in some company that generates steady cash flow, pays dividends regularly? Yes? We didn’t expect any other answer.  Would you be surprised if we tell you that, for example, tobacco companies were viewed as defensive stocks?

    But recently, investors changed their views of what these stocks are. Today, you can see that some technology companies are considered defensive stocks. Even if the definition is changed, the purpose isn’t, these stocks still have to play well during the recession. Nevertheless, these stocks have, as it always was, to provide stable earnings and regular dividends no matter what condition is the overall market. Period! 

    Are the defensive stocks less risky?

    Since there is a constant demand for such companies’ products, these stocks seem much more steady and strong during many different aspects of the business cycle.

    And here is the confusing part for some investors, especially if they are beginners. They aren’t the same as defense stocks. Do you know what we mean? Defense stocks are stocks of the companies that are producing munition, guns, war jets, etc.

    Nowadays, companies with stable earnings growth, but also with innovative goods, pricing strength, are recognized as defensive stocks. Don’t be surprised if they can stir the waters. If we consider cash flow and the company’s power, nowadays Alphabet could be such a company, for example. 

    How to recognize defensive stocks

    When uncertain time in the market comes everyone would like to protect the investment portfolio, the capital invested. Especially if it is connected to high volatility. Investors are looking for stable investments during such rough times. They would like, for sure, to increase their exposure to these stocks. For example, giants like Coca-Cola are recognized as defensive stocks. Non-cyclical stocks are recognized as defensive stocks also.

    These companies have stable performances and the ability to overcome weak economic circumstances. They are also paying dividends. That might be a good reason to choose them primarily because dividends can mitigate the influence of the stock’s price dropping. These companies will rarely go bankrupt during the market downturn.

    When things in the stock market get insecure, why would you like to own any stock? Honestly, you could find more safe places out there to invest in. The answer is profit. Defensive stocks provide a higher dividend yield than you can get with safe-havens. For example, Treasury bills will never provide you such an amount in interest rate. Moreover, defensive stocks mitigate investors’ fears because they aren’t as risky as other stocks. Take a look at what investment managers do when uncertain economic times come. They are moving to defensive stocks.

    Better isn’t always the best

    Defensive stocks are better performers than the overall market during recessions, for example. But nothing is so perfect even these stocks. Due to their low beta, when everything is blooming in the market, they could perform below the market. Less risk, less profit, that’s it.

    For example, suppose a stock has a beta of 0,5 and the market falls for 2% in one week. Not a big deal, you’ll lose 1% of your investment. But what if we have the opposite situation and the price increases 2% in one week? Well, the defensive stock with a beta of 0,5 will increase by only 1%.

    Beta shows the stock’s vulnerability or risk. Defensive stocks have beta under 1 which means they are less volatile. A conservative investor, who is, by default, with less risk-tolerance type, will choose defensive stocks that will deliver stable returns.

    Advantages and disadvantages of Defensive stocks

    They are often suitable for long-term investors because they are less risky than other stocks. These stocks together have a higher Sharpe ratio than the entire stock market. With less risk involved, you could beat the market. What else we need to understand is that defensive stocks are better investment choices than other stocks. 

    But there are some disadvantages also.

    The low volatility of these stocks is one of them. This means smaller gains when the market is bullish. That could be the reason why some investors if not many, don’t like defensive stocks. These stocks usually cannot outperform the market in such a period. So, when investors need them most to profit more, they could betray them. There is one interesting thing about defensive stocks. When the market downturn is finished, some investors move to these stocks, but the truth is they had to do that earlier. After the market downturn is too late. The only thing that investors could catch is a lower rate of return. Think ahead of these stocks.

    Why should you choose to invest in them?

    For example, you don’t have a decent knowledge of the market condition. Also, if you are the risk-averse type of investor. Seeking for dividend-paying stocks is one of the reasons because these stocks provide regular dividends. Additionally, defensive stocks are a great choice when the markets are volatile. 

    These stocks managed to perform well even during the recessions. There are some goods that people will always need no matter what the economic situation is. For example, electricity, soap, or gas, everyone would need gas or soap even if the apocalypse is coming.

    To summarize, defensive stocks have beta lower than 1, they are less volatile, they provide regular dividends. The main drawback is that they usually couldn’t generate high returns. But during the recession, they are excellent as protection for your other investments. Beta indicates the stock’s vulnerability or risk factor. This kind of stock has beta lesser than 1 which implies that they are less volatile. A conservative investor who is afraid of taking risks can invest in defensive stocks that will give stable returns.
    These stocks are also recognized as non-cyclical stocks because they are not deeply associated with the business cycle. Here are a few types of defensive stocks. Such stocks are utilities, consumer staples, healthcare, gas, electricity, pharmaceuticals.

  • Disruptive Technology – Keep an Eye On

    Disruptive Technology – Keep an Eye On

    5 Disruptive Technologies Investors Should Keep an Eye On
    Image source: Pexels

    by Micky Oliver

    Every investor, whether a newbie or a veteran, wants good returns on their investment. But in investing, there are no guarantees to reaping high profits. As mentioned in a previous Traders Paradise post, investors should learn how to temper expectations to prevent disappointment. However, if you want to increase your chances of long-term returns, you ought to consider disruptive technology—innovations that alter the way that consumers, industries, or businesses operate.

    Investing in disruptive technology is something that investors have always done, and often with great success. One prominent example is Masayoshi Son’s investment in industry trailblazers like Uber, Slack, and WeWork. Through his Japanese conglomerate Softbank, he was able to take early bets on these companies, and now the way we work, travel, and life has changed for the better.

    Success stories like this have urged investors to keep an eye out on technologies that could potentially revolutionize industries. If you, too, want to place your bets, here are five disruptive technologies that may be worth investing in:

    Advanced artificial intelligence (AI) and analytics

    AI has already been adopted by many industries, but it appears that its full potential hasn’t been realized. While we already reap its benefits every day with our continued use of things like ridesharing apps, voice assistants, and mobile check deposits, there is a whole crop of emerging uses of AI. This includes adaptive machine learning, edge analytics, transfer learning, generative adversarial networks, and more, as mentioned in the Tech Republic. And as technology continues to evolve, there will be more opportunities for investment.

    Blockchain

    It may seem like blockchain technology has lost its novelty since having gone mainstream, but tech writer James Gonzales explains that it’s seeing lots of use outside of the finance industry, with new applications in the legal sector ranging from the creation of smart contracts to corporate filings and notarizations. While these use cases are still primarily theoretical, they could potentially have a transformative impact, making them worth investing in.

    Space exploration as a disruptive technology

    Renowned entrepreneurs like Elon Musk, Richard Branson, Jeff Bezos, and Paul Allen have long been at the forefront of investing in space exploration technology. Business journalist Derin Cag highlighted that there is already quite a bit of progress in this domain, most notably the NASA-spearheaded space colonization projects, including the National Space Society, and International Space Development Conference. Given the prediction that the human population could exceed one trillion people in the 22nd century, it may be a good time to explore investment opportunities in space colonization as it’s likely that disruptive macro technologies will get invested as a result.

    Green IT

    Green technologies are nothing new, but as Tech World noted, renewed discussions about climate change propelled its resurgence. New advancements in green IT include renewable energy sources, electric vehicles, and environmentally-friendly services, all of which allow companies to increase resource productivity and efficiency, cut on costs, as well as decrease their environmental impact. In an effort to cut their emissions and go carbon neutral, organizations continue to invest in environmental technology, which led to an all-time high of $393.8 billion in transactions. As Greenpeace head of IT Andrew Hatton noted, going green is not only the ethical thing to do, but it also makes the most financial sense.

    High-speed travel as a disruptive technology

    Another disruptive technology impact, that is predicted to have a second coming, is high-speed travel, which reemerged thanks in part to Elon Musk’s Hyperloop project. In 2003, when the Concorde went out of commission, the high-speed travel industry took a massive downturn. But its demise was expected due to its exorbitant costs and defiance to noise regulations. With Hyperloop, a sealed tube with reduced air resistance through which a pod, or in this case, a train, would move at impressive speeds, people can travel from London to Scotland in just 45 minutes. It managed to secure $80 million in funding, and we can soon enjoy a mode of travel that solves many complex long-distance issues. Supersonic flights, aircraft that can travel faster than the speed of sound, may soon follow. 

    Investing in disruptive technology can be intimidating due to the sheer complexity of the underlying products, but if you manage to hit the jackpot, the rewards are astounding.

     

     

  • Time To Buy Stocks Is Right Now!

    Time To Buy Stocks Is Right Now!

    Time To Buy Stocks Is Right Now!
    The advantage of buying stocks right now is that you can get more for your money. If you are young, the more you do with your money now, the more it will be able to grow throughout your lifetime.

    By Guy Avtalyon

    Yes, this is time to buy stocks.  That would be a short answer but here is why this is a time to buy stocks. 

    Stock prices are changing violently because of the economic slowdown caused by a new coronavirus outbreak. So, the volatility makes it especially challenging to answer this question because it may vary on a daily basis. Maybe the most critical part of any investment decision is the stock valuation on which we base our decisions, should we buy or sell the stock. Moreover, that can tell us a lot about other investors’ feelings toward some particular stock. So, you need an explanation of our observation that this is time to buy stocks.

    Here are some real examples but we have to go back in the old days. 

    The historical overview

    It was the year 1974.

    In the period of 1973-1974 bear market ultimately bottomed. It marked a 43% decline for the Dow Jones in a time frame of two years or even less. This bear market ended December 6, 1974, when the Dow Jones hit 577.60. The large sell-off caused a lot of damage to the U.S. market and it took approximately 20 years to entirely recover. But, at the same time, every investor who had guts to buy stocks then, had great returns later.

    The second occasion was in 1982. 

    The Bear Market of 1982. The market had been falling for almost one year and two months, actually exactly 451 days. In just one day, it was February 22, the S&P 500 Index was down for almost 21%. Inflation in the US was at 13.58% but also, it was a rough year for the rest of the world. But some investors were smart and made their life-time investment by buying stocks.

    The next was the stock market crash of 1987. 

    This market crash originally came from the US but had a great impact on the global economy. In October that year, DJIA fell by 22,6%. It was a well-known Black Monday. Until then, Dow Jones never had such a drop in one day. And as in previous cases, some investors made smart choices,  and bought stocks rather than sell them and it was a very profitable decision for them.

    Horrible 2008/09

    The most recent event, before 2020, happened in 2008 and 2009. This bear market actually lasted from October 9, 2007, to March 9, 2009. 

    The S&P 500 Index lost about 50% of its value, and the DJIA fell 777.68 points in intraday trading. It was the largest drop point fall until this year’s market crash. Also, some were smarter than others and they bought the stocks instead of selling them. In other words, during the market’s crashes during history, the most successful investors were buying.

    What do these events have in common?

    They were all connected to some kind of crisis. And each market situation was characterized by capitulation. 

    The stock market capitulation means giving up. It is the point when investors are giving up on attempting to recover lost gains caused by falling stock prices. For example, a stock you own has dropped by 20%. You have two alternatives: to wait it out with hope the stock starts to appreciate again, and the other solution is to compensate for your loss by selling the stock. When most of the investors choose to wait it out, the stock price will probably continue almost stable. But if most of the investors choose to give up on the stock, the stock price will decrease further and sharply. When this event is relevant to the entire market, it is a market capitulation.

    What else is in common for these market crashes? The most profitable investors were buying stocks. It looks like selling wasn’t the right option for them.

    So, we can easily conclude that time to buy stocks is right now. This is an amazing chance to buy stocks because they are cheap now.

    When is the right time to buy stocks?

    The truth is that almost all investors are scared. The possibility of losing all capital is enormous and some of them are starting to get out of the market. Everyday volatility, stock prices changes in milliseconds, have a great influence on investors’ emotions.

    The markets’ crashes, we mentioned above, weren’t quite severe as this one is. This bear market marked a 20% drop from the recent market highs. So, despite the fact that this drop is so sharp, it could be a good time to buy stocks.

    Yes, we know that investing in this time may sound strange and nonsense for someone. But, at the same time, if you are seeking long-term investment it could be the best time. For example, you can buy some blue-chips at a very favorable price. Such are, for instance, Walt Disney, or Coca-Cola. Just follow the KIS rule and look at the most prominent. These companies and similar survived through previous market crashes and came out stronger providing great returns.

    You can create real wealth in stocks now. Just don’t watch from the sideline. React and do it now.

    Is this time good to buy stocks?

    Stop dreaming and guessing. Listen to good advice only. Have an investing plan.
    Start investing with an edge, that will give you an advantage over other investors. Buy the stocks that were the best players last year. 

    Watch what the world’s billionaires do, the path they made. Allow them to show you what stock to buy. They are strong enough to fight for their investments, but at the same time, they will increase the value of yours. 

    It isn’t time yet to estimate the accurate impact the coronavirus pandemic will have on the companies. The results will differ by company. Some will manage better than others, but that’s how things go. What we can do is to find the company built to last. Take a look at their revenues for the past several years or at least for the last one. Some did great. So buy its stock at a discount. 

    You have to know that this pandemic will have influence over the next several years. Just don’t panic. This is not the time for that. This is a time to buy stocks if you have some extra money that you’ll not need in the coming years. Just invest it in brands. This lesson came from history. 

    Investing is more available than ever. That means you don’t have to rely on some difficult strategy to start earning money. You can buy options, you have help from free trading platforms, apps to create an investment plan that matches your goals, and risk tolerance. You are investing for the long haul. Ignore the panic and understand why it is the right time to buy stocks. Set clear goals, and recognize your limits. Keep in mind, investing in stocks is one of the easiest ways to put your money to work.

  • How to Invest When the Coronavirus Pandemic Sends the Stock Market Down

    How to Invest When the Coronavirus Pandemic Sends the Stock Market Down

    How to Invest When the Coronavirus Pandemic Sends the Stock Market Down
    The markets entered the bear territory but it isn’t the reason to stop investing. Actually, despite the coronavirus pandemic and oil wars, it is the opposite.

    By Gorica Gligorijevic

    When the market comes into this situation the logical question that smart investors ask is how to invest when the coronavirus pandemic sends all markets down. 

    Should we stay away and wait for market consolidation or to act and profit? Let’s change our positions for a sec. Instead of being investors, let’s try to assume how managers of the companies are acting now. Yes, some closed up. But we don’t want to talk about them, we would like to discuss serious, responsible managers with the ability to project future actions related to their business and the companies. Like them who are investigating and planning how to beat the competition, or how to become more competitive after all, the investors should do the same thing. Investing should be a game without ending, renewed all the time. Investors may move their assets from one industry to others but should never stop investing. 

    So, the question of how to invest when the coronavirus pandemic sends all markets down sounds logical for amateurs. Professionals are looking even now for new and better opportunities. 

    One reason is to overcome this market down and the other is to find market players that can produce a bigger profit. The market is here and it will never stop working. So, why would we do the opposite?

    What can generate gains during the pandemic?

    This pandemic influences markets all over the world. Coronavirus outbreak hits almost all countries on the globe and as well their economies. 

    Global markets had been beaten almost overnight. The main problem, according to some analysts, is investors getting panic in the downturn markets. The events are accelerating sharply, faster than spreadsheets and charts could predict them. Advanced investors shift into funds, options, or some commodities to hedge their investment portfolios. The others with a lack of experience, haven’t time to do that. Also, badly timed and wrongly settled hedges may produce big losses. Moreover, put protection is becoming incredibly expensive. Market makers avoid the opposite side of the trade.

    But maybe it is even worse for those who shifted into cash to find a better buying opportunity after the outbreak. Yes, cash is the position too, but if you stay too long in that position might cause the earning of zero. Yet, it is better than losing capital but you’ll miss the opportunity to profit. Yes, even now while markets are down you can still earn. There are some industries and sectors where you can invest especially now. Of course, no one can guarantee that stocks will rise forever, but why don’t we call stats as help. 

    How to Invest in Biotech stocks

    Here are some ideas on how to invest when the coronavirus pandemic causes all markets to drop.

    So, according to data biotech stocks are a good choice right now. Also, health care. Maybe more than ever both sectors are active these days. The virus COVID-19 is still greatly new and the subject of many scientific types of research. They are all looking for COVID-19 treatments. The companies involved can be a great opportunity. For example, large and mid-cap companies from that sector. According to data, closed near 52-week highs at the end of last week. On the last trading day, they played very well. For example, MASI which is a large seller of pulse oximetry to hospitals. Or CNC, and some others like QDEL, just take a look at its historical data

    Or maybe Roche Holding AG ROG,  which gained 3.7% in premarket trading today (Thursday, March, 19) just after they announced its plans to work on Phase 3 clinical testing Acterma. It is a drug used in rheumatoid arthritis treatments but showed good results in treating patients with COVID-19 with severe pneumonia.  

    Roche announced it is in consultations with the FDA. This company needs the authorities’ approval to start research with the Biomedical Advanced Research and Development Authority. It is expected that about 330 patients from all over the world will take part in that. Recently, Roche got FDA’s approval for manufacturing COVID-19 tests for the U.S. 

    Roche’s stock fell 7.7% in the last 12 months.

    Small-cap companies from the same sector are not such a good choice because there are too many speculations around them and it is possible for investors to end up with losses faster since those companies could disappear overnight.

    How to Invest in Safe-haven stocks

    Do you know how important soup is important today? What do you think, can some producers of soup be a safe-haven investment? The example of Campbell Soup Company shows us it can. 

    Popular safe havens are running a bit better than their growth equals. They are paying high dividends reducing the losses caused by lower prices. For example, Campbell Soup Company is paying a 2.84% forward dividend yield. Moreover, the company is trading near a 52-week high after its earnings report. 

    Also, Mondelez International traded at $46.55 and with a dividend yield of 2.45%. This sweets producer is a super-force: Toblerone, Oreo, Cadbury, Belviva, TUC. The company produces pre-packaged goods. And that kind of producer is among the most desired safe-haven stocks right now since its goods can be used at consumers’ homes. There is no need for visiting restaurants and being in the crowd.  

    MDLZ stock is outperforming the S&P 500 by more than 10%. For some investors, the problem with this company can be its exposure to China, and store shelves are less stocked now. But the company’s branch in China is very close to setting the situation to normal. 

    Maybe Johnson & Johnson a 134 old company? It is one of the largest healthcare companies in the world. The company covers pharmaceuticals, medical materials, and devices, surgical and orthopedic robotics, etc. It has well-known products  Band-Aid and Tylenol. The analysts are optimistic about the company’s long-term growth prospects.

    How to invest during the coronavirus pandemic?

    This can be an ethical and financial question. Both are inappropriate. Money has to work. 

    It is true, in just several weeks, the Coronavirus pandemic hit almost a third of the world market cap. The Sensex is 20% below from its highest highs reached just two months ago. The Indian equity market bounced back last Friday. The other markets have fallen even more.
    The coronavirus spreading caused panic all over the world and lessened the confidence of investors.

    The other unpleasant events happened also. For example, the crude oil war between Russia and Saudi Arabia has added volatility to the markets. But something has changed. It isn’t all about the coronavirus outbreak, the other things influence the markets also.
    The commodities and currency market are in turbulence because of the crude oil war. This is a crash of huge magnitude. It will take time for confidence to come back but that doesn’t mean we have to sit aside. This can be a great opportunity to invest. 

    The stock market condition today

    Stock market volatility is normal, and also discouraging but doesn’t have to be. For some investors, it is almost impossible to avoid panic and sell-off, we know that.
    One of Wall Street’s main stock benchmarks, the Dow Jones, dropped and entered bear market territory on Wednesday, March 11. Dow Jones has been in a bull market since the financial crisis in 2008-09. Also, the big volatility is present, partially due to the oil price war but also, due to the fears of the coronavirus. Of course, that is stressful for investors. But they know, as much as we know, that stopping investing is the worst scenario ever. 

    So, how to invest when the coronavirus pandemic sends all markets down sounds illogical for professionals. Investing must continue. And we show you where and how. Stay invested! Maybe this can help.

  • Safe Haven Assets Where Investors Have Begun Piling Into

    Safe Haven Assets Where Investors Have Begun Piling Into

    safe-haven assets
    Safe-haven assets are a fundamental place to avoid economic downturns. They express the markets that can protect the investment from losses when the market falls.

    The safe-haven assets are investments that investors start piling into during intense market volatility and uncertainty. The main goal is to take a position into investments that are recognized as safe from losses. Even more, they have the capacity to rise in price while the bulk of other assets are declining value. 

    Safe-haven assets provide investors to limit their exposure to losses when market downturns and protect their capital invested. Like we have now when almost all markets plunged. When the markets enter tumultuous times like this one, the value of investments falls sharply. Investors are seeking assets that are not correlated to the markets. These kinds of assets are safe-haven assets.

    So, we can say that safe-haven assets are able to hold or grow in value during the market turbulence.

    Do anything to minimize the risk

    Risk is real if you want to invest in stock markets. But it isn’t necessary to be exposed to great risks if you can avoid it. The point is to minimize the risks all the time, during the life of your investment. But when the market is declining almost all assets become too risky. In order to protect their capital, investors leave their position in unsafe assets and start buying something safer.
    Safe-haven assets are those that don’t carry a high risk of loss. Historically that was cash, real estate, mutual funds, CDs, etc. You may ask, is gold a safe-haven asset? Gold as much as silver are historically used as a hedge against market or political uncertainty or the devaluation of a currency. But having in mind that gold coins have varied during the unstable political situations, it might be a wrong choice. Anyway, commodities are risky.

    Better pick s risk-free assets, such as sovereign debt instruments or hold gold and silver trough futures.

    What are safe-haven assets?

    Safe-haven assets are the necessary answer to economic downturns. They are the markets that can protect investors from losses when other assets and markets fall. How can they protect your investment portfolio?
    Safe-haven assets are holdings where investors and traders set their money to protect against major droppings. Safe-haven assets must allow protection from losses.

    But what are the characteristics of safe-haven assets?

    If you want trade safe-haven assets you must pay attention to liquidity. Such assets must have high liquidity. Why is this characteristic so important? Because that will provide you to enter and exit positions at a price you determine but without slippage. Further, safe-haven markets must have limited supply.  You don’t want the assets with a supply that passes their demand. It is more likely for such an asset to decrease in value. For example, gold has a deficit of supply, but higher value when demand increases. 

    True safe-haven assets have to hold a certain level of demand in the future. So you, as an investor, must believe in the assets’ future, you must be confident about it. For example, that is the reason why silver isn’t so good investment choice. Yes, it has many purposes now, but it can be replaced in the future by some other material. On the other side, you might recognize copper as safe-haven assets because of its importance that increases over time. Almost every day, science, the industry find new ways to use copper.

    Can you see where the essence of safe-haven assets? It is permanent. We cannot ever say that some temporary high valued asset belongs to the corpus of safe-haven assets. 

    Is gold the ultimate safe-haven asset?

    For many investors, gold is a safer asset to buy and hold, safer than cash, because it is a tangible asset. Further, no one can print more gold as it is possible with banknotes. This is important because it provides the value of gold not being changed in this way. From the historical point, gold served as insurance during unfavorable economic circumstances. Gold prices regularly rise when drastic events happen. Moreover, gold is negatively correlated to the US dollar. Meaning, when the dollar is strong it is costly to buy and hold. That drives gold prices lower. And vice versa. Investors know this. Whenever the US dollar was trading lower, they started piling into gold.

    What are other safe-havens?

    When the market records turbulent circumstances the value of most investments falls sharply. So, investors want to buy assets that are negatively correlated to the overall market. They are moving their investments into safe-haven assets.
    That can be defensive stocks, such as consumer goods, utility, biotechnology, healthcare. These stocks tend to resist the market’s downturn. People are buying food, drugs, they need health care and groceries.  Also, don’t think that real estate due to its lack of liquidity isn’t a safe-haven asset. The real estate has a constant income flow that can offset the liquidity. 

    Infrastructure is also safe-haven assets. So, even though the markets are going down there are plenty of ways to stay invested.

    Building a safe-haven assets portfolio will need some additional attention to optimizing returns. But the results may be quite surprising. But there are safe-haven currencies also. For example, the Japanese Yen (JPY) is seen as one of the most stable safe-haven currencies.

    Can we trade safe-haven assets?

    Of course, we can. So after we’ve recognized safe-havens assets, want to trade them. The question is how and when to trade them. The possibility isn’t questionable. Let’s say this way, a market downturn is likely to hit due to the factors you can recognize. 

    If you want to move a chunk of your portfolio into safer assets there are several things you have to consider.

    First of all, trading safe-haven stocks is practiced as a defensive tool. The aim is to overcome a declining economy as even defensive stocks may not generate a positive return. It’s true that the slow economy will let safe-haven stocks beat the market, but it doesn’t mean that you will profit.

    When trading safe-haven stocks examine the beta of stocks before investing. Beta points the relationship between the stock and the market. If the beta is 1, that means the stock price is fully correlated with the market, but when the beta is above 1, the stock is more volatile than the market, and finally, when the beta is closer to zero the correlation with the market is smaller. Knowing the beta of the stock will enable you to hedge against volatility. 

    The P/E ratio will show you if the safe-haven stocks are undervalued or overvalued. The safe-haven stocks are well-known for being undervalued.  Also, the stocks with high dividends, meaning greater than 6%, are a good pick for safe-haven stocks. At least, as much as the stock from a well-established company. Well-known brands or large-cap stocks will lose less in value than small-caps during the market downturns.

    All these factors are important and you have to evaluate them before picking your safe-haven assets and adjust your new holdings to your risk appetite.

    Currencies as safe-haven assets

    Some currencies are recognized as safe-havens. In periods when the market is extremely volatile, currency traders would like to move their cash into safe-haven currencies as protection. Those kinds of currencies are the Swiss franc, the euro, the Japanese yen, and the U.S. dollar.

    Forex traders have to pay attention to some currencies that might act differently to market shifts than others. Also, there is always a question of what currencies suit to be safe-havens. 

    Bottom line

    The “safe-haven” refers to financial assets that investors turn to protect their profit from periods of market turbulence.
    Safe-haven currencies, safe-haven stocks, gold, have historically preserved or increased their value during market downturns. They gave good protection against losses. Why shouldn’t they do such a thing for us now?

    One suggestion before doing anything in real: use our preferred trading platform virtual trading system and check the two formula pattern.

  • ROI or Return On Investment – The Efficiency Of Investment

    ROI or Return On Investment – The Efficiency Of Investment

    ROI or Return On Investment
    ROI is a useful method to compare different investment opportunities, but it has limits

    ROI or Return on Investment estimates the gain or loss created on an investment related to the amount of money invested. Investors use ROI to compare the performance of different investments or to compare a company’s profitabilities. In essence, the Return on Investment measures the gain or loss of some investment relative to the capital invested. 

    The main goal of investing is profit, so it’s essential to seek investments that give the biggest potential return. ROI or Return on investment is the ratio of profitability that measures how big return will be on some investment relative to the costs. Commonly, you can see ROI as a percentage. This measure is very important when you want to evaluate an investment.

    Also, ROI is a valuable tool when you want to compare several investment opportunities. 

    For example, you have some dilemma in which company to invest in because you saw several interesting options. And it seems that all of them are good. What are you going to do? Of course, you are going to estimate the efficiency of each company particularly to reveal which one is able to generate more profits.

    How to calculate ROI or Return on Investment?

    To calculate ROI just divide the net return on investment by the cost of investment and multiply the result by 100 since ROI is expressed in percentages.

    The formula looks like this:

    ROI = (Net Return / Cost of Investment) x 100

    For example, you invested $10.000 in some stock a year ago. Now you sold it for $15.000. Let’s calculate the return on your investment.

    $15.000 – $10.000 = $5.000
    Your net return is $5.000. Let’s go further by following the formula. 

    ROI = ($5.000/$10.000) x 100 = 50%
    And you find ROI on your investment is 50%. The calculation is quite simple.
    To calculate ROI you can use this formula too:

    ROI = ((Final Value of Investment – Initial Value of Investment)/Cost of Investment)) x 100%

    Calculate ROI for different investments

    The basic ROI formula reveals how much an investment generated overall. But, if you want to compare ROI from several investments, you will need to take into consideration the amount of time needed for some investment do give you return.

    For example, let’s say you want to compare the ROI from two separate investments. Let’s do this using our previous example. The capital invested is $10.000. One year later you sold the shares for $15.000 and gained $5.000, so the ROI is 50%.

    But two years prior to this purchasing you bought some stake of shares of the other company and you invested, let’s say, the same amount of $10.000. After 3 years of holding it, you sold these shares for $16.000.

    Let’s calculate the ROI for this investment.

    ($6.000 / $10.000) x 100% = 60%

    ROI is 60%. Great! 

    Wait for a moment. It just seems that this second investment yielded a higher ROI. You had to hold this investment 3 years to generate a return of 60%. In other words, time matters. 

    The first investment generated 50% after one year, the second returned more but after 3 years. It generated 60% which means the annual return of just 20%. When you compare these two investments and their annual yields it’s clear that you made a better investment decision in the first example. To put this simply, even if you have a better overall return on some investment think about the amount of time you needed to reach it. The annual ROI is what will tell you about how good your investment is. Do it for each investment in your portfolio and you’ll figure out the winners.

    The other methods to calculate the return

    There are more precise methods to calculate return on investment. ROI isn’t the only one and has its limits. 

    To be honest, calculating ROI is an excellent way to compare investment chances. But one of the limitations of ROI is the lack of risk estimation. ROI formula doesn’t factor it into consideration. The risk estimation is very important particularly when you need to calculate actual returns. ROI is good to show you a potential return on your investment. But will it tell you how much you can lose? Not necessarily. 

    You must know that higher returns are in tight connection with more risk. The Higher returns, the more risk involved. This is particularly true for stocks. They have higher returns than bonds, for example, but at the same time, they are riskier. 

    Almost the same is for companies. When the company has a lower credit rating, it will offer a higher interest rate on bonds to balance the investors’ risk. 

    For example, you purchased the bonds from a company described above. It offered you much higher returns on its bonds and you might think it is a better opportunity than some company with good credit rating. And you made a calculation and saw ROI of, let’s say, 60% after one year. So, let’s see why it wasn’t a smart decision. What will you do if that company fails to pay interest rates? Well, you’ll end up literally without any returns. 

    Can you see where the point is? ROI is great but it measures only the potential return on investment, not actual. For proper decision, you will need a Real Rate of Return that takes into account inflation, taxes, and other factors. Also, the Net Present Value (NPV) is more suitable for investors like to estimate returns in the far future.

    This metric is helpful

    As most important, it is a simple metric, and easy to calculate and understand. You cannot misunderstand it. Moreover, it is a general measure of profitability applied everywhere all over the world. When you see that some investment has an ROI of 30% that is the same in the US or Europe or Africa. Thanks to its simplicity ROI is good enough for estimation the efficiency of a single investment or to compare the returns from several different investments.

    What is a good ROI?

    Investment returns must beat inflation, taxes, and fees because no one would like to hold an average investment. We all need excellent investments. That’s the whole wisdom, to earn a higher rate of return on investments. 

    A good ROI depends on the investment. The truth is that you have to keep expectations rational. For example, if you are expecting to gain 20% from blue-chips over the next 10 years, we have to say your expectations are pretty much unrealistic. It isn’t going to happen. Whoever promises you that, plays on your inexperience. For instance, the stock market’s average annual return is about 10%, for more aggressive investors it was about 15% per year. And it was almost the same for the last 100 years. Take it or leave it. Whoever promises you a moon is lying or trying to fraud you. 

    Bottom line

    ROI or Return on Investment calculation isn’t an accurate metric but it is a good way to reach the approximate figures. You can always expect some deviation or error in ROI calculation.
    ROI is rated as the single most significant measure of the efficiency of an investment. A better ROI means that investment has satisfying results. When you want to compare the ROI of different investments it is important to compare the companies from the same or similar sectors.
    This metric is very connected to what happened in the recent past. You have to follow a simple rule of thumb: the lower the recent returns, the higher the future returns. And vice versa.

Traders-Paradise