OTC Market and Acquisitions

otc market
If we are talking about financial markets and investment markets everybody know about stock exchanges. Most of the investors are buying stocks and other securities they only in stock exchanges and even doesn't know about  other possibilities or stock trading places. 

Other investors only know about they trading platform and even doesn't think about other questions how investments are traded. Te thing is that there are two types of markets: centralized markets as stocks exchanges and non centralized markets that also are called as OTC markets. 

OTC markets are those markets that create themselves naturally and if you would sell some financial instrument to your friend and it will be a transaction of OTC (over the counter) market. The name of OTC market is not very popular but in reality there are trillions of deals made in OTC market and it has very important share in OTC markets and that is natural way to develop even more in the future because of increasing computerization. 

For example acquisition of one big company by another is also an OTC market deals, especially if that acquisition is by privately held company and the target of the acquisition is also private company. Let's say one guy (shareholder) meets another guy (investor) and the last one buys the shares from the first one. That's how financial markets does the job. 

Of course if acquisitions are made for listed companies such acquisitions may get more complicated to explain. However acquisitions in M&A and OTC markets are very closely related and may be interesting to see the developments of these fields in the future. 


Investment: Stock Valuation

investment, stocks
Investment isn't an easy thing, especially when you understand what are you doing. If you don't understand the basic finances that lays beyond the surface of investment then you are just skying over the top of water, but when  you lose speed you immediately start to drawn. That's what happens when you you are investing in stocks and other investments but do not really know what are you doing. Believe or not, most of the investors are doing exactly that and almost every investor starts from this stage. 

The knowledge and wisdom comes slowly, after many years of experience in investing; only then some investor can say that he is really understand what is he doing. if you want get closer to that understanding and do it faster, you should get known about investment finances. The main thing in it is stock valuation. The goal of stock valuation is to determine the potential value of an investment (stock) and compare it to the price on stock exchange. If valuation says that the value is higher than stock price on the market it means that it can be a good investment opportunity. 

There are two main types of valuation of shares: relative valuation and DCF valuation. Comparative stock valuation is based on valuation multiples as price earnings (P/E) ratio, EV/EBITDA ratio, EV/S ratio, PEG ratio: investinforbeginners.eu, P/NAV ratio and many other ratios. Those ratios are calculated for the assessed company and for many comparable companies. Comparable companies have to very similar to the valued company. If companies will be different then comparison will be false - it is natural that different companies have different valuation multiples or ratios. Every business is different and valuation of every business is also different. It is a natural thing and every investor has to know it, otherwise he will fail in understanding the value of stocks and investment basics. 

DCF valuation is based on discounted cash flows. This method is very detailed and takes a lot of time ti prepare it. It is not advisable for beginners at investing and mostly is used by professionals. However, you don't have to do everything by yourself because you can find many investment researches on the net, where a lot DCF valuations are available. You may use those DCF valuations for your purpose in investment decisions. Of course you should trust it blindly and get you own analysis, but you won't be needed to do all the work by yourself and it will safe a lot of time, which can be spent for the search of new investments. 

Right valuation knowledge do not guarantees for you good results from investing in stocks, but you at least will know in what stocks you are investing, what is the risk, what is possible return compared to other stock and etc. 

If you are beginner at investing, you obviously have know how to valuate stocks and other investments. It is a basic which will lead you to the new ways later. Don't forget it.


Investing in Mutual Funds

A mutual fund is simply the gathering of money from several people or even companies, managed by an investment manager or an investment company, for the benefit of the shareholders. There are many types of mutual funds, depending on the type of investment the money is used for. The investment portfolio managers or company is paid a certain fee in investing and managing the fund. Because of this, the shareholders save themselves the trouble of trying to analyze market trends or even financial statements. It’s like one gives money to the fund, and the money is used in investing in some form of business or the other. One need not worry about its management.

Investment funds is one of the easiest ways to save money and get returns higher than other investments. One must be wise, though, and begin investing only in the type of mutual fund that one is familiar with. Remember, different mutual funds are placed in investments of different categories. Choose the one that you are more familiar with.

One only needs to have a brokerage account to begin investing in a mutual fund, just like investing in shares.
A mutual fund has two types based on the number of shares. A closed-end mutual fund has a specified number of shares that is bought and sold to shareholders. An open-end mutual fund has no specified number of shares; hence, many can actually join the fund and its pool of money increase.

Based on the costs for selling or buying mutual funds, there are three types. These are the Front Load, Back Load, and the No Load mutual fund. The first one charges a fee for buying a share; the second type charges only a fee once you sell a share; and the third one imposes no such fees. Remember, though, that all mutual funds charge a management fee depending on the type of fund and length of commitment to the fund.  

If you intend to purchase a share of a mutual fund, do some research first about its past performance. Compare it with the mutual funds of the same type. Also consider the period you plan to commit yourself to the mutual fund. Check also the reputation of the investment manager and his length of stay in overseeing the investing of the mutual fund. When managed properly, one can expect good returns from a mutual fund. But remember, that isn't easy to perform investment management performance measurement correctly.

However, investing in mutual funds is best choice only for small retail investors that chose passive way of investing. When investing in mutual funds you don’t need to much by yourself, but you have to pay for that.

Such investment funds normally have higher fees than ETF (exchange traded) funds or other index funds. So if you trust investment manager of the fund and you are sure that he will calculate all the valuation multiples as price and earnings ratio (also called as P/E ratio) and P/NAV ratio (price to NAV) and chose stocks properly, then it is ok. Otherwise, better look for other investment alternatives. 


How to Invest in Stocks

If you are thinking about trying your hands in the stocks market, then you have to find out everything that you can about investing in this field and making a killing out of every transaction that you take on. There are a lot of tools that you have to acquire before you try your hands in the investment field, to ensure that you would not have to deal with losses that are too big for you to handle. See to it that you keep the following considerations in mind as you try your hands in this very challenging field as stocks investments. As long as you stick to these pointers, you should be able to gain a stable career in the field of stocks investing

First and foremost, you have to establish the type of return that you are aiming for prior to investing on any type of stocks. If you aiming for short-term gain, then you have to see to it that you invest on stock options that will allow you that luxury. Make sure that you stick to investing on stable stocks if you are more interested in long-term gains, on the other hand. There are a lot of tools that you may use to assess how the choices that you have will most likely turn out. Make sure that you use as many of them as you can before you place your money on any type of stocks, to ensure that you would be able to meet the profit margin that you are after. 

In order to ensure that you will be investing your money on the best possible stocks, you have to prepare yourself to perform the necessary amount of research that will give you information as to how your options have fared in the past. After all, this is the best way though which you can gauge how they will work out for you in the future. Make sure that you spend enough time and effort in looking into the background of the investment options that you are considering to take on, for you to be able to gauge which ones will give you the profit that you want for your career. 


Factors to Consider When Investing

Investing entails a keen feasibility study.  Making a decision on investing should not just rely on the amount of money that you can invest, because solving an investment problem can’t be done in just a snap.  You cannot magically replace a lost investment.  It takes a long process and a series of systems improvement to get back in the game.

Here are some significant factors to consider when investing:
1.      Management Perspective.  If there is an aggressive management and a positive marketing perspective with an opened eye for innovations then there is a better chance for favourable results, success and productivity.  Electronics and communication is an example of industry that needs to aim for continuous improvement and latest innovations.  There should be no room for idleness when investing.
2.      Tactics of the competitor.  The tactics and marketing strategies of your competitor should be hardly taken into consideration.  If your competitor is very aggressive in investing modern machines and gadgets to increase profitability, make sure that you can cope with it or else your investments will eventually turn down and be wholly swallowed by the competitor. 
3.      Different opportunities presented by a higher technology.  You should know when to salvage your present equipment in order to cope with the demands of your customers.  Be sure to have reached your desire rate of return (ROI) by the time that you need to upgrade your whole system. 
4.      Sales Forecast.  Whether it is for short term or long term, your market study should always be visited and forecasted to ensure, maintain and increase sales.  To avoid putting your investment on critical phase, potential market should always be taken into consideration.
5.      Taxes.  Every investment entails a certain amount of tax to be paid.  Make sure to consider those in doing your feasibility study. 
6.   Budget and Cash flow.  Aside from determining the right budget to capitalize business, investing should know how that certain budget will flow during the actual business itself.  Cash flow should include proper timing of expenditure and the in and out of money should be properly anticipated.


Ten (10) Do’s and Don’ts When Investing

Ten (10) Do’s and Don’ts When Investing

  1. Be cautious and careful in accepting and responding to phone calls, emails and in making appointments with people who makes an offer regarding profitable schemes which says that you need to make an urgent or abrupt investment for beginners.
  2. When investing, always make room for doubts for given assurances in giving off quick profits or doubling your money for over a short span of time.
  3. Immediately turn down offers that pressure you to instantly give off your money.  Some may utter the lines like “You should make your payment now for tomorrow is just too late” or “Make sure to transfer your investment within the day for this is a first come first served basis and there are a lot of you who wants to grab this once in a lifetime opportunity.”
  4. In investing, always ask for the company’s factual basis like company registrations and other legal documents showing the companies information.  Verify these documents if they are true.  If so, track back their most recent records.  Keep in mind that papers and signatures are very easy to be falsified and forged nowadays.
  5. Be wise in investing and always take note of everything you here about the company you are planning to invest in to.  Be suspicious in a way with every rumors and tips about them.
  6. Do ask for some financial papers or other documents of same kind before you make a decision in investing.  Make sure to read these papers and understand the terms and conditions carefully before inking that contract.
  7. Before you consider investing, it is better to seek advices from a law maker, accountants or from any of your trusted mentors with regards to financial concerns.
  8. Trust you instincts.  If you are having questions and doubts about investing your money on a certain endeavor, make no pledges and sign no agreements.  It is better to wait and pursue investing on something that you are sure of than making an immediate decision and cry over a spilled milk in the long run.
  9. Do not be scared on hanging up a phone call from an advertiser of a certain business scheme who insists on persuading you to consider investing on them. 
  10. Make a call to the rightful Government Agency and confirm the reliability and status of the company.  Ask if the company is really credible for investing and if they are properly and legally licensed to do the business.
Of course, if it is not enough you may find more examples on Google about investments in stock market.

Investing For Beginners

How to start investment? Many beginners think about that. And I can't say or is it simple or difficult. For some people everything is difficult, for other everything is simple. 

The problem for starters in investment is that it may look simple, but only because you don't know exactly what you are doing. In such case you may get hurt. But when it will happen it will be too late to change that. That's why it is needed necessary to avoid beginners mistakes in investing. 

To avoid such mistakes, you have in beginning of investing to focus on few factors: 

  • To determine yours own risk tolerance level. You have to know how are you resistible for risk if it happens to lose money.
  • Try to pick for your self such investments that would follow yours risk tolerance. 
  • Make a good diversification. 
  • Try to get good advisers, but don't trust for nobody too much. Because nobody can know what the future will bring for sure. 
Of course, those are only few basics that you have to stick. But the knowledge will come slowly together with experience over time. Don't hurry. Investment is long process and there is no place for hurrying in it. 

As a fact, if you want to start investing you should open investment account. There are many brokerage firms that offer such services. For example, you can open online investment account in Scottrade broker, or any other broker that provides online investing services.