Tag Archive | Technology

Position Sizing: Key to Maximizing Returns

In a time when market volatility and equity preservation is of utmost importance, determining the correct number of shares to buy, or “position sizing”, is key to maximizing returns and minimizing risk.

The common investor generally doesn’t spend much time thinking about how many shares to buy or how significant of a position to take.  Instead, most investors use a common methodology of trading the same number of shares each time, which usually translates to a specific dollar amount.  Other, more sophisticated investors, opt to allocate a certain percentage of their portfolio value to a specific position. Following this train of thought, a new position in a portfolio of $100,000 would transcribe either a $10,000, or 10%, investment or a usual position of 50 shares.

Although these methods may work for some, using the volatility of a specific portfolio is likely to be the most effective decision tool.  Measuring a portfolio’s overall volatility enables an investor to decide on what percentage of that portfolio he is willing to risk losing on the new position.  This methodology is better explained through the following example. Read More…

Stocktouch Issued A Buy Rating From SmartStops.net

Stocktouch is an amazing app designed for both the iPhone and iPad by Visible Market Inc. According to Visible Market, the app concept was developed from a need to bring clarity to financial information, “we found the way financial information is typically presented to be confusing: we felt we could do something more immersive than index summaries and line charts.” I think they got it right.

I tried it out on my iPhone and it was just like having the market at my fingertips. Stocktouch brings up to the minute real time financial data and information together in one interactive format. Designed by a gamer, Stocktouch includes nice sound effects and is visually pleasing, making the experience for the user quite exceptional. The technology platform is the first of its kind to apply a video game engine to visualize statistical data, which is combined with a proprietary compression technology that transmits information at 20x the speed of comparable apps allowing the application to deliver up-to-the-minute market trends and numbers through a visually-intuitive, game-like, iOS-native interface.

As an investor, I found most of the data that I might follow on a particular stock to be offered in this app. I particularly liked the heat map that is initially divided into 9 sectors which show the current state of the market visually by spanning red or green depending on the market conditions. Shades of red indicate stocks are losing value while shades of green indicate stocks are gaining in value. Then when one scrolls out it dials down to individual stocks in each sector. You can easily do a search and find a specific stock, scroll through the available information for that stock and then see it immersed back into the sector stocks on the heat map. Another feature I liked was the ease of being able to save your favorite stocks. Then, when you go back to the heatmap, the marked favorites float up above the other stocks in the grid. The heat map is interesting because you can view it from several perspectives, from arrangements in a spiral pattern showing large to small companies, to arrangements ranked by percentage gains, volume, market cap or alphabetically. Another great feature on the Stocktouch is the ability to see a sector or individual stock’s previous returns spanning from 1 day up to 5 years. Stocktouch is a well thought out app that provides a plethora of useful information.

It’s hard to find anything that is missing or to dislike about this app. One feature that would compliment the current market data provided is some kind of analytical tool. SmartStops automated risk assessment decision tool might be perfect for this app. SmartStops.net provides real time information when a stock is experiencing unusual risk beyond the normal risk of the marketplace and covers both equity securities and ETFs.

Priced at $4.99, this app is a cost-effective purchase. Stocktouch efficiently captures the financial marketplace at your fingertips.

Four ETFs Driven By Apple and IBM’s Stellar Performance

Technology giants, Apple Inc. (AAPL) and International Business Machines (IBM) reported stellar quarterly earnings, smashing analyst expectations and shinning a ray of light on the technology sector and the exchange traded funds (ETFs) that track it.

Apple reported a fourth quarter increase in revenue to $26.7 billion, while boasting gross margins of 38.5 percent and net income of $6 billion, or $6.43 per share, beating Apple’s own forecasts of revenues of $23 billion and a gross margin of 36 percent.  Furthermore, these numbers crushed the $3.38 billion in net income that the Cupertino, California-based company boasted for the same period the previous year.  This jump in revenue was primarily driven by increased consumer spending and hence better than expected sales, which included 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs and 19 million iPods.  Analysts were expecting sales in the realm of 15.5 million iPhones, 6.2 million iPads, 4.2 million Macs and 19 million iPods.  Read More…

Four ETFs To Play Microsoft’s Income Jump

Core products pushed revenues and net income up at Microsoft (MSFT) in the third quarter, further extending out the exceptional earnings season witnessed by the technology giants and giving further support to the Software HOLDERs ETF (SWH), the iShares Dow Jones US Technology (IYW) and the Technology Select Sector SPDR (XLK) and the Vanguard Information Technology ETF (VGT).

According to Microsoft’s Chief Financial Officer, demand for both Windows and Office products have thrived as businesses of all sizes increased technology purchases.  Furthermore, a new version of Microsoft’s flagship software, Windows 7, has sold more than 240 million licenses since its debut a year ago, making it the fastest selling operating system in the company’s history.   Another factor that aided in Microsoft’s performance was sales of Office 2010 which generated $5.13 billion in the quarter and, similar to Windows 7, sold 20 percent more units since the product’s launch that it did of the previous version of Office during the same time period.  Read More…

Three Tech ETFs To Be Boosted By Mobile Phones

The launch of new products, rapid growth smartphones and an increase in replacement sales enabled the mobile phone sector to post second quarter growth paving the path to opportunity for the Technology Select Sector SPDR (XLK), the iShares S&P Global Technology (IXN) and the PowerShares QQQ (QQQQ).

According to research firm IDC, manufacturers of mobile handsets shipped a more than 317 million units worldwide in the second quarter of 2010, marking an increase of 15% year-over-year.  One reason behind this demand is the increased appeal of smartphones.  The research firm further stated that sales of smartphones, which account for nearly 19.8% of all mobile device sales, grew nearly 50% year-over-year and is expected to continue to grow.  Drivers behind this exponential growth included an improved business environment, healthy operator subsidies, vigorous competition between vendors, and a growing tide of lower-cost models. Read More…

Changes In Consumer Spending Boost Appeal in Technology

Despite an uptick in personal savings rates and lackluster results on overall consumer spending, electronics are causing consumers to reopen their wallets, further boosting the appeal of the technology sector.

According to a report released by the Commerce Department, outlays of televisions, computers, video and telephone equipment grew by 1.8% in the first six months of 2010, compared to the first half of pre-recession 2007.  In comparison, during the same time periods, sales of appliances decreased by 3.6% and that of furniture declined by a whopping 11%, indicating that consumer trends are shifting.  The report also indicated that overall consumer spending remained flat in June from the previous month and U.S. personal savings as a percentage of disposable income rose 6.4% from a month earlier.  Read More…

Three Tech ETFs To Play Apple And Microsoft

After reporting stellar quarterly financials, Apple (AAPL) and Microsoft (MSFT) remain attractive and for good reason.

In the fiscal third quarter, innovation king Apple, boasted revenues of $15.7 billion, up more than 61% from a year ago, yielding profits of $3.51 per share.  These results smoked Wall Street’s revenue expectations by nearly $1 billion and painted a rosy picture for the second-largest U.S. listed stock by market cap. 

One reason Apple is likely to continue to shine is that demand for the iPhone 4 remains insatiable despite reports of reception problems.  Additionally, the Cupertino, California-based technology firm recently updated its all-in-one iMac desktop computer line with new chips from Intel (INTC) and better graphics, which is expected to further boost appeal of iMacs.  In the most recent quarter, Apple sold 1 million desktop Mac units, an increase of 18% from the prior year, generating nearly $1.3 billion in revenue.  Currently, it is estimated that Apple is the fourth largest computer vendor in the U.S. with nearly 8.8% of the market share, giving the company the opportunity to grab more market share. Read More…

Follow

Get every new post delivered to your Inbox.

Join 889 other followers

%d bloggers like this: