Free Stock Market Investing Tips

The Dow Theory
Charles H. Dow
Robert Rhea
E. George Schaefer
Richard Russell
The Dow Theory Today
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Globally registered shares, or global shares, are stocks listed in multiple markets worldwide. They maintain the same class of stock, regardless of the market where they are issued. They are denominated on the exchanges in the local currency, including any dividends to be paid. All shareholder records are kept in the foreign locale also. By issuing stocks in this manner, companies are able to provide shareholders around the globe with equal equity rights and are able to work around foreign ownership regulations.

As mentioned, global shares benefit investors facing restrictions in their holdings of foreign shares. By purchasing global shares of a foreign company listed on a local exchange, the investor is able to avoid any restrictions to foreign stock ownership since the foreign stock is issued locally. Issuing in local currency eliminates any currency conversion fees. Global shares were first issued by Daimler Chrysler in November 1998 in 21 markets and their ability to gain equity in foreign markets has encouraged other companies to issue their own global shares. Celanese AG issued global shares in 1999 and UBS followed suit in 2000. Still, the global share concept remains on the cutting edge of investment development and is likely to become more popular in the future as more companies seek to expand globally.

Global shares also provide opportunities for the firms they represent. By having large amounts of equity in a foreign market a firm can seek to acquire foreign firms through stock swaps. Elimination of currency conversion also provides issuers increased liquidity and higher trading volume. Also, when a company trades its stock around the globe, the trading day never stops but remains in fluid motion.

For over 20 years, Morningstar is the recognized, trusted leader in providing current information on mutual funds. Before Morningstar was founded, in 1984, complete information about fund performance, management, and historical fund information was not widely available to the individual investor. Morningstar changed all this by providing essential mutual fund analysis and commentary that was simply unavailable to the individual investor before.

What started out as the quarterly published Mutual Fund Sourcebook in 1984 has evolved today into on online investment information portal serving over 5.2 million investors, 210,000 financial advisors, and 1700 institutions worldwide. Since its inception, Morningstar has operated on the adage that mutual funds were created for individual investors and that affordable analysis and commentary should be available so these investors can make educated decisions with their hard-earned dollars. Morningstar continues with this theme today. For $69, an individual can sign up for a 3 month trial subscription to Morningstar and receive detailed, comprehensive reports and analysis on the 1600 funds out of nearly 14,000 on the market that Morningstar feels are “worthy of your attention.”

Morningstar also offers “Self-Study Investing Workshops” with in-depth instruction on fund investment topics that can be difficult to understand. Topics include: Methods for Investing in Mutual Funds, Five Questions to Ask before Buying a Fund, When to Sell a Fund, and 7 Sins of Fund Investing. Each workshop is priced at only $24.95 – far less than other widely publicized investment seminars. Morningstar really does have the individual investor in mind.

Much of Morningstar’s information is available online for free – without the in-depth commentary and analysis that comes with a subscription. Morningstar regular publishes its ‘Best and Worst’ list of funds that is freely available. Other lists showing average fund manager tenure are also available at no cost. Morningstar famously rates funds from 1 to the coveted 5-star rating. The 5-star list is available here: http://www.morningstar.com/aspxsl/full/fundStarRatingList.html

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.