Free Stock Market Investing Tips

The major indexes dropped by about 1.5% in the first day of trading in 2008.

Primarily due to recession fears, stocks sold off in the first day of trading this year. A worse than expected manufacturing report sparked the selloff. Energy stocks did well due to oil reaching $100/barrel at one point during trading today.
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As we head into the first day of stock trading tomorrow, let’s recap what worked and didn’t in 2007: Read the rest of this entry »

The US stock market has a long history dotted with a lot of ups and downs. The stock market is made up of two exchanges – the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations system (NASDAQ).
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These funds invest in real estate investment trusts (REITs) which are firms investing in real estate (equity) or mortgages on real estate (debt) or a combination of the two. A fund focused largely on equity would be valued on the property invested in and the rents received from the property. The valuation of property is not tied to interest rates. Funds focused on the debt side of real estate are valued based upon the ability of the financed to pay their mortgages. Interest rates can have a big impact on these REITs. As indexes, both types of funds seek to mimic the performance of the real estate market.

Much has been in the news lately about the American housing market slump and mortgage crunch. It would be easy to think that in today’s market, it would not be wise to invest in a real estate index fund. But the opposite is probably true. One of the most popular real estate index funds, Dow Jones U.S. Real Estate Index Fund (IYR) is down from its 52 week high of 94.99 at 72.65 on August 31, 2007. This shows a rebound from the 52 week low at 66 after the news about mortgage companies going bankrupt broke. IYR is still a bargain at the current price. It looks like the real estate bubble won’t burst any further for this well-established REIT.

The best known mortgage REIT, Annaly Mortgage Management (NLY), is similarly off its 52 week high of a little over 16 at the current price of 14.10 and is similarly making a rebound. This is another investment that is probably bargain priced. After all, mortgages don’t go away once the mortgage house goes under, but are bought and sold by different firms. When the fed meets in September to lower interest rates as speculation leads us to believe it will, that will only drive the stock price of funds like NLY up.