Definition

When you are looking at a sequence of related numbers (for example, the price of a single stock over time, the height of all students in a classroom, or how many breakfasts you will get out of a box of a particular cereal), the “variance” is how far away the numbers get from the average. The higher the variance, the farther away most numbers are from the group’s average.

Consider two variables:

variance

Both of these variables have an average of 10, but variable 2 has a lot more “variance” than variable one, since it is usually a lot farther away from that average.

Technical Definition

The technical definition is as follows:

Consider the random variable X. The variance of X is defined as the estimated value of each element of X, minus the mean, squared.

Var(X) = E[(X – μ)^2]

where μ is the average of all the numbers you’re looking at.

To calculate this, imagine you have a set of 10 numbers:

5551212101314814

First, find the average of these 10. In this case, the average is 9.8.

Next, subtract 9.8 from each number in your set:

-4.8-4.8-4.82.22.20.23.24.2-1.84.2

This is how far each of these numbers are from the mean. Now you have to square each number:

23.0423.0423.044.844.840.0410.2417.643.2417.64

and the average of this set of numbers is your variance

Var(X) = 12.76

Why Do I Take A Square, Then Average?

We already know that the average of this sample is 10, and we subtracted 10 from all the numbers. This means that as our sample size grows (if we were using the example of students in a classroom, imagine if we kept looking at bigger and bigger class sizes), if we don’t take a square, the X – μ will always be very close to 0, since we will have the same amount of numbers above and below 0.

By taking the square, we make sure that all of these “errors” are above 0, and we can compare the variance of many different kinds of samples.

What Is Variance Used For?

Looking at differences in variance is the heart of all technical analysis; it is what stochastics is based on, along with every field in statistics. If you are looking to do any kind of analysis where there is any randomness to data, looking at variance is the only way to find valid conclusions.

Russia is the world’s top energy exporter, extracting and selling billions of barrels of crude oil and natural gas; a huge amount of the national budget (and therefore the method of payment for social services, the military, and much more) is paid for on taxes on these fossil fuels.

So there are few countries that were hit harder by the collapse of energy prices than Russia, which as little as a year ago based its budget forecasts on oil remaining comfortably over $100 a barrel. It isn’t just the government hurting either; a huge chunk of Russia’s private economy relies on the energy sector in one way or another. Entire cities and regions were built specifically to capitalize on energy reserves, and with the fall of prices, the economy as a whole has been contracting at over 5% a year.

Economists all over the world are showing the Russian government hurting seriously, with some creditors worrying how it will continue to pay its bills. Many experts believe it may need to remove some currency controls (which would lead to widespread inflation as the Ruble quickly devalues against other currencies), or even capital controls (as Greece recently resorted to, which controls how much capital people and companies can take out of the markets over a certain period of time).

Read More on Bloomberg

Facebook released its 2nd quarterly earnings yesterday, with some big shocks followed by a drop in stock prices.

Facebook has grown at an almost unprecedented pace since inception, and now their growth problem is that almost everyone already has a Facebook account, so they need to target other opportunities outside their core browser application and into new products and continue to push their mobile services.

The drop in stock prices reflects a 9% drop in profits; Facebook (FB) noted that this drop is because they are investing billions into the future development (and monetization) of some of their other projects, like the WhatsApp messaging service. It is also adding “smarter” ads to Instagram, and putting more resources into Oculus Rift, an upcoming virtual reality headset. It is also putting more resources into the development of the Facebook mobile apps, which have seen the cost-per-ad more than double over the last year.

Read More on Yahoo! Finance

Barclay’s financial analysts are regarded as some of the best in the world; it is no coincidence that they are one of the most respected capital management firms around. Usually when they make a recommendation, there is a good reason.

Today they have made a recommendation that came as a surprise; Google (GOOG), Facebook (FB), and Netflix (NFLX) are on their list of big, high-growth companies that might be worth a short sale.

Their findings are based on the fact that these companies have stock prices that are based largely on potential earnings growth, which can always fail to reach expectations, while its p/e ratio laggs behind most other stable stocks when considering its earnings today.

See their full recommendation list on Bloomberg.

Exchange traded funds

ETFs are collections of assets into bundles you can invest in all at once, the most popular ones follow indices (such as SPY following the S&P 500), which is one way for an investor to build a diverse portfolio without holding dozens of individual positions.

However, using financial derivatives and debt, there are also Leveraged ETFs, which amplify the risks, and returns, of whichever index it is following. These ETFs are different from a normal index ETF; instead of trying to mimic the annual return of the index it follows, it tries to double, or even triple, the Daily Return. This means that if the underlying index goes up by 1%, the Double Leveraged ETF would go up by 2% (although these numbers are not exact, the leveraged ETF often performs slightly below the target due to fees and other factors). However, this means that if the index goes down 1%, the leveraged ETF will go down by 2%, so what would have been a relatively small loss can grow very quickly.

There are many types of leveraged ETFs, from index trackers, to commodity trackers (leveraged oil and gold are among the most popular), and even many inverse ETFs, where when the index goes up by 1%, the ETF goes down by 2% (this is one way to “short” an ETF without actually short-selling).

Despite the risks, leveraged ETFs are very popular for day traders, since the extra volatility, the ups and downs in the price over the course of a day, make it attractive to traders who try to “buy low and sell high” on the same security many times throughout the day.

However, always remember that leveraged ETFs are one of the riskier investments you can make; they are usually designed to be bought and sold within the same day (hence amplifying “daily” returns instead of monthly or annually).

Most Popular Double-Leveraged ETF (2x)

SymbolIs It Inverse?Country TrackedETF NameGet A Quote And Chart
SDSInverseUSAProShares UltraShort S&P 500 FundClick Here For A Quote!
SSO USAProShares Ultra S&P 500 FundClick Here For A Quote!
TBTInverseUSAProShares UltraShort 20+ Year Treasury Bond ETFClick Here For A Quote!
QLD USAProShares Ultra QQQ FundClick Here For A Quote!
QIDInverseUSAProShares UltraShort QQQ FundClick Here For A Quote!
SKFInverseUSAProShares UltraShort Financials FundClick Here For A Quote!
SRSInverseUSAProShares UltraShort Real Estate FundClick Here For A Quote!
UYG USAProShares Ultra Financials FundClick Here For A Quote!
DXDInverseUSAProShares UltraShort Dow 30 FundClick Here For A Quote!
URE USAProShares Ultra Real Estate FundClick Here For A Quote!
TWMInverseUSAProShares UltraShort Russell 2000 FundClick Here For A Quote!
DIG USAProShares Ultra Oil & Gas FundClick Here For A Quote!
DDM USAProShares Ultra Dow 30 FundClick Here For A Quote!
UYM USAProShares Ultra Basic Materials FundClick Here For A Quote!
FLGE USACredit Suisse FI Large Cap Growth Enhanced ETNClick Here For A Quote!
SYTL USADirexion Daily 7-10 Year Treasury Bull 2x Shares ETFClick Here For A Quote!
LLDM USADirexion Daily FTSE Developed Markets Bull 1.25x Shares ETFClick Here For A Quote!
LLEM USADirexion Daily FTSE Emerging Markets Bull 1.25x Shares ETFClick Here For A Quote!
DUSTInverseUSADirexion Daily Gold Miners Bear 2x Shares ETFClick Here For A Quote!
NUGT USADirexion Daily Gold Miners Bull 2x Shares ETFClick Here For A Quote!
MDLL USADirexion Daily Mid Cap Bull 2x Shares ETFClick Here For A Quote!
RETL USADirexion Daily Retail Bull 2x Shares ETFClick Here For A Quote!
LLSP USADirexion Daily S&P 500 Bull 1.25x Shares ETFClick Here For A Quote!
SPUU USADirexion Daily S&P 500 Bull 2x Shares ETFClick Here For A Quote!
LLSC USADirexion Daily Small Cap Bull 1.25x Shares ETFClick Here For A Quote!
SMLL USADirexion Daily Small Cap Bull 2x Shares ETFClick Here For A Quote!
INDL USADirexion India Bull 2X ETFClick Here For A Quote!
BDCL USAETRACS 2x Wells Fargo Business Development Company Index ETNClick Here For A Quote!
RWXL USAETRACS Monthly Pay 2x Dow Jones International Real Estate ETNClick Here For A Quote!
CEFL USAETRACS Monthly Pay 2x Leveraged Closed-End Fund ETNClick Here For A Quote!
DVHL USAETRACS Monthly Pay 2x Leveraged Diversified High Income ETNClick Here For A Quote!
DVYL USAETRACS Monthly Pay 2x Leveraged Dow Jones Select Dividend Index ETNClick Here For A Quote!
MORL USAETRACS Monthly Pay 2x Leveraged Mortgage REIT ETNClick Here For A Quote!
SDYL USAETRACS Monthly Pay 2x Leveraged S&P Dividend ETNClick Here For A Quote!
HDLV USAETRACS Monthly Pay 2x Leveraged US High Dividend Low Volatility ETNClick Here For A Quote!
LMLP USAETRACS Monthly Pay 2x Leveraged Wells Fargo MLP Ex-Energy ETNClick Here For A Quote!
SPLX USAETRACS Monthly Reset 2x Leveraged S&P 500 Total Return ETNClick Here For A Quote!
MFLA USAiPath Long Enhanced MSCI EAFE Index ETNClick Here For A Quote!
EMLB USAiPath Long Enhanced MSCI Emerging Markets Index ETNClick Here For A Quote!
EMSAInverseUSAiPath Short Enhanced MSCI Emerging Markets Index ETNClick Here For A Quote!
URR USAMarket Vectors Double Long Euro ETNClick Here For A Quote!
DRRInverseUSAMarket Vectors Double Short Euro ETNClick Here For A Quote!
DAG USAPowerShares DB Agriculture Double Long ETNClick Here For A Quote!
AGAInverseUSAPowerShares DB Agriculture Double Short ETNClick Here For A Quote!
BDD USAPowerShares DB Base Metals Double Long ETNClick Here For A Quote!
BOMInverseUSAPowerShares DB Base Metals Double Short ETNClick Here For A Quote!
DYY USAPowerShares DB Commodity Double Long ETNClick Here For A Quote!
DEEInverseUSAPowerShares DB Commodity Double Short ETNClick Here For A Quote!
DTOInverseUSAPowerShares DB Crude Oil Double Short ETNClick Here For A Quote!
DGP USAPowerShares DB Gold Double Long ETNClick Here For A Quote!
DZZInverseUSAPowerShares DB Gold Double Short ETNClick Here For A Quote!
UBT USAProShares Ultra 20+ Year Treasury ETFClick Here For A Quote!
UST USAProShares Ultra 7-10 Year Treasury ETFClick Here For A Quote!
GDAY USAProShares Ultra Australian Dollar ETFClick Here For A Quote!
BOIL USAProShares Ultra Bloomberg Natural Gas ETFClick Here For A Quote!
UGE USAProShares Ultra Consumer Goods FundClick Here For A Quote!
UCC USAProShares Ultra Consumer Services FundClick Here For A Quote!
UCD USAProShares Ultra DJ-AIG Commodity ETFClick Here For A Quote!
UCO USAProShares Ultra DJ-AIG Crude Oil ETFClick Here For A Quote!
ULE USAProShares Ultra Euro ETFClick Here For A Quote!
XPP USAProShares Ultra FTSE/Xinhua China 25 Index FundClick Here For A Quote!
UGL USAProShares Ultra Gold ETFClick Here For A Quote!
RXL USAProShares Ultra Health Care FundClick Here For A Quote!
UJB USAProShares Ultra High Yield ETFClick Here For A Quote!
UXI USAProShares Ultra Industrials FundClick Here For A Quote!
IGU USAProShares Ultra Investment Grade Corporate ETFClick Here For A Quote!
KRU USAProShares Ultra KBW Regional Banking ETFClick Here For A Quote!
MVV USAProShares Ultra MidCap 400 FundClick Here For A Quote!
UBR USAProShares Ultra MSCI Brazil ETFClick Here For A Quote!
EFO USAProShares Ultra MSCI EAFE Index FundClick Here For A Quote!
EET USAProShares Ultra MSCI Emerging Markets Index FundClick Here For A Quote!
UPV USAProShares Ultra MSCI Europe ETFClick Here For A Quote!
EZJ USAProShares Ultra MSCI Japan Index FundClick Here For A Quote!
UMX USAProShares Ultra MSCI Mexico Investable Market ETFClick Here For A Quote!
UXJ USAProShares Ultra MSCI Pacific ex-Japan ETFClick Here For A Quote!
BIB USAProShares Ultra Nasdaq Biotechnology ETFClick Here For A Quote!
UWM USAProShares Ultra Russell 2000 FundClick Here For A Quote!
USD USAProShares Ultra Semiconductors FundClick Here For A Quote!
AGQ USAProShares Ultra Silver ETFClick Here For A Quote!
SAA USAProShares Ultra Small Cap 600 FundClick Here For A Quote!
ROM USAProShares Ultra Technology FundClick Here For A Quote!
LTL USAProShares Ultra Telecommunications ETFClick Here For A Quote!
UPW USAProShares Ultra Utilities FundClick Here For A Quote!
UVXY USAProShares Ultra VIX Short-Term Futures ETFClick Here For A Quote!
YCL USAProShares Ultra Yen ETFClick Here For A Quote!
TBZInverseUSAProShares UltraShort 3-7 Year Treasury ETFClick Here For A Quote!
PSTInverseUSAProShares UltraShort 7-10 Year Treasury Bond ETFClick Here For A Quote!
CROCInverseUSAProShares UltraShort Australian Dollar ETFClick Here For A Quote!
SMNInverseUSAProShares UltraShort Basic Materials FundClick Here For A Quote!
KOLDInverseUSAProShares UltraShort Bloomberg Natural Gas ETFClick Here For A Quote!
SZKInverseUSAProShares UltraShort Consumer Goods FundClick Here For A Quote!
SCCInverseUSAProShares UltraShort Consumer Services FundClick Here For A Quote!
CMDInverseUSAProShares UltraShort DJ-AIG Commodity ETFClick Here For A Quote!
SCOInverseUSAProShares UltraShort DJ-AIG Crude Oil ETFClick Here For A Quote!
EUOInverseUSAProShares UltraShort Euro ETFClick Here For A Quote!
FXPInverseUSAProShares UltraShort FTSE/Xinhua China 25 FundClick Here For A Quote!
GLLInverseUSAProShares UltraShort Gold ETFClick Here For A Quote!
RXDInverseUSAProShares UltraShort Health Care FundClick Here For A Quote!
SIJInverseUSAProShares UltraShort Industrials FundClick Here For A Quote!
MZZInverseUSAProShares UltraShort MidCap 400 FundClick Here For A Quote!
BZQInverseUSAProShares UltraShort MSCI Brazil Index FundClick Here For A Quote!
EFUInverseUSAProShares UltraShort MSCI EAFE FundClick Here For A Quote!
EEVInverseUSAProShares UltraShort MSCI Emerging Markets FundClick Here For A Quote!
EPVInverseUSAProShares UltraShort MSCI Europe Index FundClick Here For A Quote!
EWVInverseUSAProShares UltraShort MSCI Japan FundClick Here For A Quote!
SMKInverseUSAProShares UltraShort MSCI Mexico Investable Market Index FundClick Here For A Quote!
JPXInverseUSAProShares UltraShort MSCI Pacific ex-Japan Index FundClick Here For A Quote!
BISInverseUSAProShares UltraShort Nasdaq Biotechnology ETFClick Here For A Quote!
DUGInverseUSAProShares UltraShort Oil & Gas FundClick Here For A Quote!
SSGInverseUSAProShares UltraShort Semiconductors FundClick Here For A Quote!
ZSLInverseUSAProShares UltraShort Silver ETFClick Here For A Quote!
SDDInverseUSAProShares UltraShort Small Cap 600 FundClick Here For A Quote!
REWInverseUSAProShares UltraShort Technology FundClick Here For A Quote!
TLLInverseUSAProShares UltraShort Telecommunications ETFClick Here For A Quote!
TPSInverseUSAProShares UltraShort TIPS ETFClick Here For A Quote!
SDPInverseUSAProShares UltraShort Utilities FundClick Here For A Quote!
YCSInverseUSAProShares UltraShort Yen ETFClick Here For A Quote!
MLPL USAUBS ETRACS Leveraged Long Alerian MLP Infrastructure ETNClick Here For A Quote!
FBG USAUBS Fisher Enhanced Big Cap Growth ETNClick Here For A Quote!
TVIZ USAVelocityShares Daily 2x VIX Medium-Term ETNClick Here For A Quote!
TVIX USAVelocityShares Daily 2x VIX Short-Term ETNClick Here For A Quote!
HBU:CA CanadaBetaPro COMEX Gold Bullion Bull+ ETFClick Here For A Quote!
HZU:CA CanadaBetaPro COMEX Silver Bull+ ETFClick Here For A Quote!
HJU:CA CanadaBetaPro MSCI Emerging Markets Bull+ ETFClick Here For A Quote!
HPD:CA CanadaBetaPro MSCI Japan Bear+ ETFClick Here For A Quote!
HPU:CA CanadaBetaPro MSCI Japan Bull+ ETFClick Here For A Quote!
HQU:CA CanadaBetaPro NASDAQ-100 Bull+ ETFClick Here For A Quote!
HOU:CA CanadaBetaPro NYMEX Crude Oil Bull+ ETFClick Here For A Quote!
HNU:CA CanadaBetaPro NYMEX Natural Gas Bull+ ETFClick Here For A Quote!
HSU:CA CanadaBetaPro S&P 500 Index Bull+ ETFClick Here For A Quote!
HVU:CA CanadaBetaPro S&P 500 VIX Short-Term Futures Bull+ ETFClick Here For A Quote!
HXU:CA CanadaBetaPro S&P/TSX 60 Bull+ ETFClick Here For A Quote!
HEU:CA CanadaBetaPro S&P/TSX Capped Energy Bull+ ETFClick Here For A Quote!
HFU:CA CanadaBetaPro S&P/TSX Capped Financials Bull+ ETFClick Here For A Quote!
HMU:CA CanadaBetaPro S&P/TSX Global Base Metal Bull+ ETFClick Here For A Quote!
HGU:CA CanadaBetaPro S&P/TSX Global Gold Bull+ ETFClick Here For A Quote!
HTD:CA CanadaBetaPro U.S. 30-Year Bond Bear+ ETFClick Here For A Quote!
HZD:CA CanadaCOMEX Silver Bear Plus ETFClick Here For A Quote!
HBD:CA CanadaHorizons BetaPro COMEX Gold Bullion Bear Plus ETFClick Here For A Quote!
HOD:CA CanadaHorizons BetaPro NYMEX Crude Oil Bear Plus ETFClick Here For A Quote!
HND:CA CanadaHorizons BetaPro NYMEX Natural Gas Bear Plus ETFClick Here For A Quote!
HXD:CA CanadaHorizons BetaPro S&P/TSX 60 Bear ETFClick Here For A Quote!
HED:CA CanadaHorizons BetaPro S&P/TSX Capped Energy Bear Plus ETFClick Here For A Quote!
HFD:CA CanadaHorizons BetaPro S&P/TSX Capped Financials Bear Plus ETFClick Here For A Quote!
HGD:CA CanadaHorizons BetaPro S&P/TSX Global Gold Bear Plus ETFClick Here For A Quote!
HMD:CA CanadaHorizons BetaPro S&P/TSX Global Mining Bear Plus ETFClick Here For A Quote!
HJD:CA CanadaMSCI Emerging Markets Bear Plus ETFClick Here For A Quote!
HQD:CA CanadaNASDAQ-100 Bear Plus ETFClick Here For A Quote!
HSD:CA CanadaS&P 500 Bear Plus ETFClick Here For A Quote!
LAGR:LN Great BritainETFS Leveraged Agriculture ETFClick Here For A Quote!
LALL:LN Great BritainETFS Leveraged All Commodities ETFClick Here For A Quote!
LALU:LN Great BritainETFS Leveraged Aluminium ETFClick Here For A Quote!
LCOC:LN Great BritainETFS Leveraged Cocoa ETFClick Here For A Quote!
LCFE:LN Great BritainETFS Leveraged Coffee ETFClick Here For A Quote!
LCOP:LN Great BritainETFS Leveraged Copper ETFClick Here For A Quote!
LCOR:LN Great BritainETFS Leveraged Corn ETFClick Here For A Quote!
LCTO:LN Great BritainETFS Leveraged Cotton ETFClick Here For A Quote!
LOIL:LN Great BritainETFS Leveraged Crude Oil ETFClick Here For A Quote!
LNRG:LN Great BritainETFS Leveraged Energy ETFClick Here For A Quote!
LNEY:LN Great BritainETFS Leveraged Ex-Energy ETFClick Here For A Quote!
LGAS:LN Great BritainETFS Leveraged Gasoline ETFClick Here For A Quote!
LBUL:LN Great BritainETFS Leveraged Gold ETFClick Here For A Quote!
LGRA:LN Great BritainETFS Leveraged Grains ETFClick Here For A Quote!
LHEA:LN Great BritainETFS Leveraged Heating Oil ETFClick Here For A Quote!
LIME:LN Great BritainETFS Leveraged Industrial Metals ETFClick Here For A Quote!
LLEA:LN Great BritainETFS Leveraged Lead ETFClick Here For A Quote!
LLHO:LN Great BritainETFS Leveraged Lean Hogs ETFClick Here For A Quote!
LLCT:LN Great BritainETFS Leveraged Live Cattle ETFClick Here For A Quote!
LLST:LN Great BritainETFS Leveraged Livestock ETFClick Here For A Quote!
LNGA:LN Great BritainETFS Leveraged Natural Gas ETFClick Here For A Quote!
LNIK:LN Great BritainETFS Leveraged Nickel ETFClick Here For A Quote!
LPET:LN Great BritainETFS Leveraged Petroleum ETFClick Here For A Quote!
LPLA:LN Great BritainETFS Leveraged Platinum ETFClick Here For A Quote!
LPMT:LN Great BritainETFS Leveraged Precious Metals ETFClick Here For A Quote!
LSIL:LN Great BritainETFS Leveraged Silver ETFClick Here For A Quote!
LSFT:LN Great BritainETFS Leveraged Softs ETFClick Here For A Quote!
LSYO:LN Great BritainETFS Leveraged Soybean Oil ETFClick Here For A Quote!
LSOB:LN Great BritainETFS Leveraged Soybeans ETFClick Here For A Quote!
LSUG:LN Great BritainETFS Leveraged Sugar ETFClick Here For A Quote!
LTIM:LN Great BritainETFS Leveraged Tin ETFClick Here For A Quote!
LWEA:LN Great BritainETFS Leveraged Wheat ETFClick Here For A Quote!
LZIC:LN Great BritainETFS Leveraged Zinc ETFClick Here For A Quote!
DEL2:LN Great BritainETFX DAX 2X Long ETFClick Here For A Quote!
Sterling Great BritainETFX DAX 2X Long ETFClick Here For A Quote!
DES2:LN Great BritainETFX DAX 2X Short ETFClick Here For A Quote!
Sterling Great BritainETFX DAX 2X Short ETFClick Here For A Quote!
SEU2:LN Great BritainETFX Dow Jones EURO STOXX 50 Double Short ETFClick Here For A Quote!
Sterling Great BritainETFX Dow Jones EURO STOXX 50 Double Short ETFClick Here For A Quote!
LEU2:LN Great BritainETFX Dow Jones EURO STOXX 50 Leveraged ETFClick Here For A Quote!
Sterling Great BritainETFX Dow Jones EURO STOXX 50 Leveraged ETFClick Here For A Quote!
LUK2:LN Great BritainETFX FTSE 100 Leveraged ETFClick Here For A Quote!
SUK2:LN Great BritainETFX FTSE 100 Super Short Strategy ETFClick Here For A Quote!

Most Popular Triple-Leveraged ETFs (3x)

SymbolIs It Inverse?Country TrackedETF NameGet A Quote And Chart
FAZInverseUSADirexion Financial Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
FAS USADirexion Financial Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
TZAInverseUSADirexion Small Cap Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
TNA USADirexion Small Cap Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
TYOInverseUSADirexion 10-Year Treasury Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
TYD USADirexion 10-Year Treasury Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
TMVInverseUSADirexion 30-Year Treasury Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
TMF USADirexion 30-Year Treasury Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
MATL USADirexion Daily Basic Materials Bull 3x Shares ETFClick Here For A Quote!
BRZU USADirexion Daily Brazil Bull 3X Shares ETFClick Here For A Quote!
YANGInverseUSADirexion Daily FTSE China Bear 3x Shares ETFClick Here For A Quote!
YINN USADirexion Daily FTSE China Bull 3X Shares ETFClick Here For A Quote!
EURL USADirexion Daily FTSE Europe Bull 3x Shares ETFClick Here For A Quote!
BAR USADirexion Daily Gold Bull 3x Shares ETFClick Here For A Quote!
CURE USADirexion Daily Healthcare Bull 3x Shares ETFClick Here For A Quote!
JPNL USADirexion Daily Japan Bull 3x Shares ETFClick Here For A Quote!
JDSTInverseUSADirexion Daily Junior Gold Miners Index Bear 3x Shares ETFClick Here For A Quote!
JNUG USADirexion Daily Junior Gold Miners Index Bull 3x Shares ETFClick Here For A Quote!
MIDZInverseUSADirexion Daily Mid Cap Bear 3x Shares ETFClick Here For A Quote!
MIDU USADirexion Daily Mid Cap Bull 3x Shares ETFClick Here For A Quote!
GASL USADirexion Daily Natural Gas Related Bull 3x Shares ETFClick Here For A Quote!
RUSSInverseUSADirexion Daily Russia Bear 3x Shares ETFClick Here For A Quote!
RUSL USADirexion Daily Russia Bull 3x Shares ETFClick Here For A Quote!
SPXSInverseUSADirexion Daily S&P 500 Bear 3x Shares ETFClick Here For A Quote!
SPXL USADirexion Daily S&P 500 Bull 3x Shares ETFClick Here For A Quote!
KORU USADirexion Daily South Korea Bull 3x Shares ETFClick Here For A Quote!
TECSInverseUSADirexion Daily Technology Bear 3x Shares ETFClick Here For A Quote!
TECL USADirexion Daily Technology Bull 3x Shares ETFClick Here For A Quote!
DPKInverseUSADirexion Developed Markets Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
DZK USADirexion Developed Markets Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
EDZInverseUSADirexion Emerging Markets Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
EDC USADirexion Emerging Markets Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
ERYInverseUSADirexion Energy Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
ERX USADirexion Energy Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
LBJ USADirexion Latin America Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
DRVInverseUSADirexion Real Estate Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
DRN USADirexion Real Estate Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
SOXSInverseUSADirexion Semiconductor Bear 3X – Triple-Leveraged ETFClick Here For A Quote!
SOXL USADirexion Semiconductor Bull 3X – Triple-Leveraged ETFClick Here For A Quote!
ROLA USAiPath Long Extended Russell 1000 TR Index ETNClick Here For A Quote!
RTLA USAiPath Long Extended Russell 2000 TR Index ETNClick Here For A Quote!
SFLA USAiPath Long Extended S&P 500 TR Index ETNClick Here For A Quote!
BUNT USAPowerShares DB 3x German Bund Futures ETNClick Here For A Quote!
JGBD USAPowerShares DB 3x Inverse Japanese Govt Bond Futures ETNClick Here For A Quote!
ITLT USAPowerShares DB 3x Italian Treasury Bond Futures ETNClick Here For A Quote!
JGBT USAPowerShares DB 3x Japanese Govt Bond Futures ETNClick Here For A Quote!
LBND USAPowerShares DB 3x Long 25+ Year Treasury Bond ETNClick Here For A Quote!
UUPT USAPowerShares DB 3x Long US Dollar Index Futures ETNClick Here For A Quote!
SBNDInverseUSAPowerShares DB 3x Short 25+ Year Treasury Bond ETNClick Here For A Quote!
UDNT USAPowerShares DB 3x Short US Dollar Index Futures ETNClick Here For A Quote!
UDOW USAProShares UltraPro Dow 30 ETFClick Here For A Quote!
FINU USAProShares UltraPro Financials ETFClick Here For A Quote!
UMDD USAProShares UltraPro MidCap 400 ETFClick Here For A Quote!
TQQQ USAProShares UltraPro NASDAQ 100 ETFClick Here For A Quote!
URTY USAProShares UltraPro Russell 2000 ETFClick Here For A Quote!
UPRO USAProShares UltraPro S&P 500 Index FundClick Here For A Quote!
TTTInverseUSAProShares UltraPro Short 20+ Year Treasury ETFClick Here For A Quote!
SDOWInverseUSAProShares UltraPro Short Dow 30 ETFClick Here For A Quote!
FINZInverseUSAProShares UltraPro Short Financials ETFClick Here For A Quote!
SQQQInverseUSAProShares UltraPro Short NASDAQ 100 ETFClick Here For A Quote!
SRTYInverseUSAProShares UltraPro Short Russell 2000 ETFClick Here For A Quote!
SPXUInverseUSAProShares UltraPro Short S&P 500 Index FundClick Here For A Quote!
SMDDInverseUSAProShares UltraPro Short S&P MidCap 400 ETFClick Here For A Quote!
DWTIInverseUSAVelocityShares 3x Inverse Crude Oil ETNClick Here For A Quote!
DGLDInverseUSAVelocityShares 3x Inverse Gold ETNClick Here For A Quote!
DGAZInverseUSAVelocityShares 3x Inverse Natural Gas ETNClick Here For A Quote!
DSLVInverseUSAVelocityShares 3x Inverse Silver ETNClick Here For A Quote!
UWTI USAVelocityShares 3x Long Crude Oil ETNClick Here For A Quote!
UGLD USAVelocityShares 3x Long Gold ETNClick Here For A Quote!
UGAZ USAVelocityShares 3x Long Natural Gas ETNClick Here For A Quote!
USLV USAVelocityShares 3x Long Silver ETNClick Here For A Quote!

This week we are finally putting our new site to the full domain! You can now access the brand-new version of HowTheMarketWorks at www.howthemarketworks.com. If you have bookmarks saved to new.www.howthemarketworks.com, they will still work fine.

The old site, which hundreds of thousands of our active users know and love, has been moved to www.simvest.com. We will continue to support the old version if you wish to continue managing your portfolio, make trades, or create contests on the old site, but we do not plan on releasing any new features or updates to the old platform.

To celebrate the new site, we will be having a huge trading contest, where you can compete against a portfolio of Blue Chip stocks built by the HowTheMarketWorks team! There will be $500 in prizes, and every participant who beats the HTMW team will get a coupon for our Investing101 beginners investing course.

blue chip

As always, we have been putting in place tons of small changes every week. Happy trading!

Just a few years ago Gold was considered one of the safest investments one could make; politicians were arguing to resume backing US currency in Gold, “Cash For Gold” commercials and pawn shops sprouted up across every corner of the United States, and investors were putting more and more money into the precious metal as the value creeped upwards.

historical-gold-prices-100-year-chart-2015-07-26-macrotrendsToday, the price of gold has plummetted to almost half the peak, mining companies are losing money, and the overall price crash is starting to spread to copper, tin, and aluminium.

So what happened? The commercial usage for gold and other metals has only increased as the economy improves, but prices continue to fall.

The answer lies in the investment strategy of “hedging”, where one diversifies their investments across muliple sectors and investment types specifically so if one part of their portfolio declines in value, another part will increase. Gold is one of the most popular “hedge” assets on the market.

Gold is usually seen to have “intrinsic value”, meaning people want it just because it is gold, which is one reason it used to be the backing of many major currencies. Silver is regarded in the same way. This means that when the dollar starts to “lose value”, meaning there is high inflation or it becomes more difficult to import goods, people often will move their money into Gold and Silver as a relatively “Safe” place to hold their money until economic conditions improve. This means that the demand for gold as an investment can spike when the economy as a whole is most volatile, and decline when stability improves and other investment opportunities arise. Currently, the Dollar, Bonds, and Stocks are all gaining value, and the economy as a whole has been improving, so investors previously keeping huge amounts of capital invested in gold as a “hedge” are moving their money elsewhere, reducing its “investor demand”.

 

Read More about the commodities price crash on Bloomberg

Looking to make an investment, but don’t want to pick random stocks? Check out these ETFs, we have the top ETFs by annual, and 3 year, returns!

One-year

SymbolNameTypeAnnual ReturnAverage Daily VolumeChart and Quote
CNXTMarket Vectors ChinaAMC SME-ChiNext ETFChinese Stocks66.1269,955Click Here For Quote
SBIOALPS Medical Breakthroughs ETFHealthcare53.8396,925Click Here For Quote
BIBProShares Ultra Nasdaq BiotechnologyLeveraged Biotechnology50.22409,940Click Here For Quote
ASHSDeutsche X-trackers HrvstCSI500CHN A SCChinese Stocks49.6273,222Click Here For Quote
XIVVelocityShares Daily Inverse VIX ST ETNVolatility48.3617,375,470Click Here For Quote
SVXYProShares Short VIX Short-Term FuturesVolatility47.511,795,427Click Here For Quote
JPNLDirexion Daily Japan Bull 3X ETFLeveraged Japan40.311,512Click Here For Quote
XBISPDR® S&P Biotech ETFBiotechnology37.34735,331Click Here For Quote
BBPBioShares™ Biotechnology ProductsBiotechnology37.1719,513Click Here For Quote
RETLDirexion Daily Retail Bull 3X ETFLeveraged Retail34.5814,254Click Here For Quote
BZQProShares UltraShort MSCI Brazil CappedInverse Brazil33.0929,368Click Here For Quote
DXJHWisdomTree Japan Hedged Health Care ETFJapan Stock33.083,890Click Here For Quote
BBCBioShares™ Biotechnology Clinical TrialsHealth32.8430,053Click Here For Quote
DUSTDirexion Daily Gold Miners Bear 3X ETFLeveraged Inverse Gold32.246,215,939Click Here For Quote
BOMDB Base Metals Double Short ETNLeveraged Inverse Metals30.961,981Click Here For Quote
EZJProShares Ultra MSCI JapanLeveraged Japan27.275,631Click Here For Quote
CUREDirexion Daily Healthcare Bull 3X ETFLeveraged Healthcare27.23160,504Click Here For Quote
DXJFWisdomTree Japan Hedged Financials ETFJapanese Financial Stocks25.5813,120Click Here For Quote
IBBiShares Nasdaq BiotechnologyBiotechnology24.491,532,588Click Here For Quote

Three-year

SymbolNameTypeAnnual Return3 Year ReturnChart and Quote
CUREDirexion Daily Healthcare Bull 3X ETFLeveraged Healthcare27.2397.29Click Here For Quote
BIBProShares Ultra Nasdaq BiotechnologyLeveraged Biotechnology50.2293.74Click Here For Quote
TQQQProShares UltraPro QQQLeveraged DOW21.0671.18Click Here For Quote
FASDirexion Daily Financial Bull 3X ETFLeveraged Equities7.1270.8Click Here For Quote
FINUProShares UltraPro FinancialsLeveraged Financial Equities5.4870.16Click Here For Quote
RETLDirexion Daily Retail Bull 3X ETFLeveraged Retail34.5870.1Click Here For Quote
SOXLDirexion Daily Semicondct Bull 3X ETFLeveraged Technology-22.3965.7Click Here For Quote
RXLProShares Ultra Health CareLeveraged Healthcare21.1661Click Here For Quote
XIVVelocityShares Daily Inverse VIX ST ETNVolatility48.3659.9Click Here For Quote
SVXYProShares Short VIX Short-Term FuturesVolatility47.5158.9Click Here For Quote
UMDDProShares UltraPro MidCap400Leveraged Equities3.756.96Click Here For Quote
MIDUDirexion Daily Mid Cap Bull 3X ETFLeveraged Equities3.5856.56Click Here For Quote
UPROProShares UltraPro S&P500Leveraged S&P5002.8855.83Click Here For Quote
SPXLDirexion Daily S&P500® Bull 3X ETFLeveraged S&P5002.8255.2Click Here For Quote
URTYProShares UltraPro Russell2000Leveraged Russell20003.2453.68Click Here For Quote
TNADirexion Daily Small Cap Bull 3X ETFLeveraged Equities2.9252.67Click Here For Quote
UCCProShares Ultra Consumer ServicesLevereaged Customer Service15.9551.65Click Here For Quote
TECLDirexion Daily Technology Bull 3X ETFLeveraged Technology5.247.8Click Here For Quote
QLDProShares Ultra QQQLeveraged DOW14.9145.62Click Here For Quote
ZIVVelocityShares Daily Inverse VIX MT ETNVolatility16.6645.56Click Here For Quote

Definition:
The S&P 500 is currently the most followed stock index in the world. It works like a model portfolio holding stocks in 500 of the biggest, and most traded, companies in the United States, diversified across all 10 major sectors of the US economy. It is usually considered the benchmark against which other investments are compared; “beating the market” usually means to have better returns than the S&P 500.

If you wanted to match the S&P 500’s returns, it would be very difficult to buy into all 500 companies; even one share of each would cost nearly a hundred thousand dollars. However, the SPY ETF can be used instead; this ETF aims to match the S&P 500 index and provide comparable returns to investors.

History:

The S&P 500 index is produced by Standard & Poor’s, a ratings agency that has been active since 1860. During the early days of Wall Street, they released their first index of stocks, the S&P 90, which was designed to compete with the Dow Jones Industrial Average, another index of 30 of the country’s biggest companies. Over time, they also began to publish weekly reports with over 400 stocks. By 1957 their “big list” became so popular that they morphed their original, smaller index to include 500 stocks, becoming the index we now all know and love.

S&P 500 from Yahoo Finance
S&P 500 from Yahoo Finance

Companies In The S&P 500

Ticker symbolCompany NameQuote and ChartTrade on HTMW
MMM3M CompanyClick Here For Quote!Trade Now!
ABTAbbott LaboratoriesClick Here For Quote!Trade Now!
ABBVAbbVieClick Here For Quote!Trade Now!
ACNAccenture plcClick Here For Quote!Trade Now!
ACEACE LimitedClick Here For Quote!Trade Now!
ADBEAdobe Systems IncClick Here For Quote!Trade Now!
ADTADT CorpClick Here For Quote!Trade Now!
AAPAdvance Auto PartsClick Here For Quote!Trade Now!
AESAES CorpClick Here For Quote!Trade Now!
AETAetna IncClick Here For Quote!Trade Now!
AFLAFLAC IncClick Here For Quote!Trade Now!
AMGAffiliated Managers Group IncClick Here For Quote!Trade Now!
AAgilent Technologies IncClick Here For Quote!Trade Now!
GASAGL Resources Inc.Click Here For Quote!Trade Now!
APDAir Products & Chemicals IncClick Here For Quote!Trade Now!
ARGAirgas IncClick Here For Quote!Trade Now!
AKAMAkamai Technologies IncClick Here For Quote!Trade Now!
AAAlcoa IncClick Here For Quote!Trade Now!
AGNAllergan plcClick Here For Quote!Trade Now!
ALXNAlexion PharmaceuticalsClick Here For Quote!Trade Now!
ALLEAllegionClick Here For Quote!Trade Now!
ADSAlliance Data SystemsClick Here For Quote!Trade Now!
ALLAllstate CorpClick Here For Quote!Trade Now!
ALTRAltera CorpClick Here For Quote!Trade Now!
MOAltria Group IncClick Here For Quote!Trade Now!
AMZNAmazon.com IncClick Here For Quote!Trade Now!
AEEAmeren CorpClick Here For Quote!Trade Now!
AALAmerican Airlines GroupClick Here For Quote!Trade Now!
AEPAmerican Electric PowerClick Here For Quote!Trade Now!
AXPAmerican Express CoClick Here For Quote!Trade Now!
AIGAmerican International Group, Inc.Click Here For Quote!Trade Now!
AMTAmerican Tower Corp AClick Here For Quote!Trade Now!
AMPAmeriprise FinancialClick Here For Quote!Trade Now!
ABCAmerisourceBergen CorpClick Here For Quote!Trade Now!
AMEAmetekClick Here For Quote!Trade Now!
AMGNAmgen IncClick Here For Quote!Trade Now!
APHAmphenol Corp AClick Here For Quote!Trade Now!
APCAnadarko Petroleum CorpClick Here For Quote!Trade Now!
ADIAnalog Devices, Inc.Click Here For Quote!Trade Now!
AONAon plcClick Here For Quote!Trade Now!
APAApache CorporationClick Here For Quote!Trade Now!
AIVApartment Investment & MgmtClick Here For Quote!Trade Now!
AAPLApple Inc.Click Here For Quote!Trade Now!
AMATApplied Materials IncClick Here For Quote!Trade Now!
ADMArcher-Daniels-Midland CoClick Here For Quote!Trade Now!
AIZAssurant IncClick Here For Quote!Trade Now!
TAT&T IncClick Here For Quote!Trade Now!
ADSKAutodesk IncClick Here For Quote!Trade Now!
ADPAutomatic Data ProcessingClick Here For Quote!Trade Now!
ANAutoNation IncClick Here For Quote!Trade Now!
AZOAutoZone IncClick Here For Quote!Trade Now!
AVGOAvago TechnologiesClick Here For Quote!Trade Now!
AVBAvalonBay Communities, Inc.Click Here For Quote!Trade Now!
AVYAvery Dennison CorpClick Here For Quote!Trade Now!
BHIBaker Hughes IncClick Here For Quote!Trade Now!
BLLBall CorpClick Here For Quote!Trade Now!
BACBank of America CorpClick Here For Quote!Trade Now!
BKThe Bank of New York Mellon Corp.Click Here For Quote!Trade Now!
BCRBard (C.R.) Inc.Click Here For Quote!Trade Now!
BXLTBaxaltaClick Here For Quote!Trade Now!
BAXBaxter International Inc.Click Here For Quote!Trade Now!
BBTBB&T CorporationClick Here For Quote!Trade Now!
BDXBecton DickinsonClick Here For Quote!Trade Now!
BBBYBed Bath & BeyondClick Here For Quote!Trade Now!
BRK-BBerkshire HathawayClick Here For Quote!Trade Now!
BBYBest Buy Co. Inc.Click Here For Quote!Trade Now!
BIIBBIOGEN IDEC Inc.Click Here For Quote!Trade Now!
BLKBlackRockClick Here For Quote!Trade Now!
HRBBlock H&RClick Here For Quote!Trade Now!
BABoeing CompanyClick Here For Quote!Trade Now!
BWABorgWarnerClick Here For Quote!Trade Now!
BXPBoston PropertiesClick Here For Quote!Trade Now!
BSXBoston ScientificClick Here For Quote!Trade Now!
BMYBristol-Myers SquibbClick Here For Quote!Trade Now!
BRCMBroadcom CorporationClick Here For Quote!Trade Now!
BF-BBrown-Forman CorporationClick Here For Quote!Trade Now!
CHRWC. H. Robinson WorldwideClick Here For Quote!Trade Now!
CACA, Inc.Click Here For Quote!Trade Now!
CVCCablevision Systems Corp.Click Here For Quote!Trade Now!
COGCabot Oil & GasClick Here For Quote!Trade Now!
CAMCameron International Corp.Click Here For Quote!Trade Now!
CPBCampbell SoupClick Here For Quote!Trade Now!
COFCapital One FinancialClick Here For Quote!Trade Now!
CAHCardinal Health Inc.Click Here For Quote!Trade Now!
HSICHenry ScheinClick Here For Quote!Trade Now!
KMXCarmax IncClick Here For Quote!Trade Now!
CCLCarnival Corp.Click Here For Quote!Trade Now!
CATCaterpillar Inc.Click Here For Quote!Trade Now!
CBGCBRE GroupClick Here For Quote!Trade Now!
CBSCBS Corp.Click Here For Quote!Trade Now!
CELGCelgene Corp.Click Here For Quote!Trade Now!
CNPCenterPoint EnergyClick Here For Quote!Trade Now!
CTLCenturyLink IncClick Here For Quote!Trade Now!
CERNCernerClick Here For Quote!Trade Now!
CFCF Industries Holdings IncClick Here For Quote!Trade Now!
SCHWCharles Schwab CorporationClick Here For Quote!Trade Now!
CHKChesapeake EnergyClick Here For Quote!Trade Now!
CVXChevron Corp.Click Here For Quote!Trade Now!
CMGChipotle Mexican GrillClick Here For Quote!Trade Now!
CBChubb Corp.Click Here For Quote!Trade Now!
CICIGNA Corp.Click Here For Quote!Trade Now!
XECCimarex EnergyClick Here For Quote!Trade Now!
CINFCincinnati FinancialClick Here For Quote!Trade Now!
CTASCintas CorporationClick Here For Quote!Trade Now!
CSCOCisco SystemsClick Here For Quote!Trade Now!
CCitigroup Inc.Click Here For Quote!Trade Now!
CTXSCitrix SystemsClick Here For Quote!Trade Now!
CLXThe Clorox CompanyClick Here For Quote!Trade Now!
CMECME Group Inc.Click Here For Quote!Trade Now!
CMSCMS EnergyClick Here For Quote!Trade Now!
COHCoach Inc.Click Here For Quote!Trade Now!
KOThe Coca Cola CompanyClick Here For Quote!Trade Now!
CCECoca-Cola EnterprisesClick Here For Quote!Trade Now!
CTSHCognizant Technology SolutionsClick Here For Quote!Trade Now!
CLColgate-PalmoliveClick Here For Quote!Trade Now!
CPGXColumbia Pipeline Group IncClick Here For Quote!Trade Now!
CMCSAComcast Corp.Click Here For Quote!Trade Now!
CMAComerica Inc.Click Here For Quote!Trade Now!
CSCComputer Sciences Corp.Click Here For Quote!Trade Now!
CAGConAgra Foods Inc.Click Here For Quote!Trade Now!
COPConocoPhillipsClick Here For Quote!Trade Now!
CNXCONSOL Energy Inc.Click Here For Quote!Trade Now!
EDConsolidated EdisonClick Here For Quote!Trade Now!
STZConstellation BrandsClick Here For Quote!Trade Now!
GLWCorning Inc.Click Here For Quote!Trade Now!
COSTCostco Co.Click Here For Quote!Trade Now!
CCICrown Castle International Corp.Click Here For Quote!Trade Now!
CSXCSX Corp.Click Here For Quote!Trade Now!
CMICummins Inc.Click Here For Quote!Trade Now!
CVSCVS Caremark Corp.Click Here For Quote!Trade Now!
DHID. R. HortonClick Here For Quote!Trade Now!
DHRDanaher Corp.Click Here For Quote!Trade Now!
DRIDarden RestaurantsClick Here For Quote!Trade Now!
DVADaVita Inc.Click Here For Quote!Trade Now!
DEDeere & Co.Click Here For Quote!Trade Now!
DLPHDelphi AutomotiveClick Here For Quote!Trade Now!
DALDelta Air LinesClick Here For Quote!Trade Now!
XRAYDentsply InternationalClick Here For Quote!Trade Now!
DVNDevon Energy Corp.Click Here For Quote!Trade Now!
DODiamond Offshore DrillingClick Here For Quote!Trade Now!
DFSDiscover Financial ServicesClick Here For Quote!Trade Now!
DISCADiscovery Communications-AClick Here For Quote!Trade Now!
DISCKDiscovery Communications-CClick Here For Quote!Trade Now!
DGDollar GeneralClick Here For Quote!Trade Now!
DLTRDollar TreeClick Here For Quote!Trade Now!
DDominion ResourcesClick Here For Quote!Trade Now!
DOVDover Corp.Click Here For Quote!Trade Now!
DOWDow ChemicalClick Here For Quote!Trade Now!
DPSDr Pepper Snapple GroupClick Here For Quote!Trade Now!
DTEDTE Energy Co.Click Here For Quote!Trade Now!
DDDu Pont (E.I.)Click Here For Quote!Trade Now!
DUKDuke EnergyClick Here For Quote!Trade Now!
DNBDun & BradstreetClick Here For Quote!Trade Now!
ETFCE*TradeClick Here For Quote!Trade Now!
EMNEastman ChemicalClick Here For Quote!Trade Now!
ETNEaton CorporationClick Here For Quote!Trade Now!
EBAYeBay Inc.Click Here For Quote!Trade Now!
ECLEcolab Inc.Click Here For Quote!Trade Now!
EIXEdison Int’lClick Here For Quote!Trade Now!
EWEdwards LifesciencesClick Here For Quote!Trade Now!
EAElectronic ArtsClick Here For Quote!Trade Now!
EMCEMC Corp.Click Here For Quote!Trade Now!
EMREmerson Electric CompanyClick Here For Quote!Trade Now!
ENDPEndo InternationalClick Here For Quote!Trade Now!
ESVEnsco plcClick Here For Quote!Trade Now!
ETREntergy Corp.Click Here For Quote!Trade Now!
EOGEOG ResourcesClick Here For Quote!Trade Now!
EQTEQT CorporationClick Here For Quote!Trade Now!
EFXEquifax Inc.Click Here For Quote!Trade Now!
EQIXEquinixClick Here For Quote!Trade Now!
EQREquity ResidentialClick Here For Quote!Trade Now!
ESSEssex Property Trust IncClick Here For Quote!Trade Now!
ELEstee Lauder Cos.Click Here For Quote!Trade Now!
ESEversource EnergyClick Here For Quote!Trade Now!
EXCExelon Corp.Click Here For Quote!Trade Now!
EXPEExpedia Inc.Click Here For Quote!Trade Now!
EXPDExpeditors Int’lClick Here For Quote!Trade Now!
ESRXExpress ScriptsClick Here For Quote!Trade Now!
XOMExxon Mobil Corp.Click Here For Quote!Trade Now!
FFIVF5 NetworksClick Here For Quote!Trade Now!
FBFacebookClick Here For Quote!Trade Now!
FASTFastenal CoClick Here For Quote!Trade Now!
FDXFedEx CorporationClick Here For Quote!Trade Now!
FISFidelity National Information ServicesClick Here For Quote!Trade Now!
FITBFifth Third BancorpClick Here For Quote!Trade Now!
FSLRFirst Solar IncClick Here For Quote!Trade Now!
FEFirstEnergy CorpClick Here For Quote!Trade Now!
FISVFiserv IncClick Here For Quote!Trade Now!
FLIRFLIR SystemsClick Here For Quote!Trade Now!
FLSFlowserve CorporationClick Here For Quote!Trade Now!
FLRFluor Corp.Click Here For Quote!Trade Now!
FMCFMC CorporationClick Here For Quote!Trade Now!
FTIFMC Technologies Inc.Click Here For Quote!Trade Now!
FFord MotorClick Here For Quote!Trade Now!
FOSLFossil, Inc.Click Here For Quote!Trade Now!
BENFranklin ResourcesClick Here For Quote!Trade Now!
FCXFreeport-McMoran Cp & GldClick Here For Quote!Trade Now!
FTRFrontier CommunicationsClick Here For Quote!Trade Now!
GMEGameStop Corp.Click Here For Quote!Trade Now!
GPSGap (The)Click Here For Quote!Trade Now!
GRMNGarmin Ltd.Click Here For Quote!Trade Now!
GDGeneral DynamicsClick Here For Quote!Trade Now!
GEGeneral ElectricClick Here For Quote!Trade Now!
GGPGeneral Growth Properties Inc.Click Here For Quote!Trade Now!
GISGeneral MillsClick Here For Quote!Trade Now!
GMGeneral MotorsClick Here For Quote!Trade Now!
GPCGenuine PartsClick Here For Quote!Trade Now!
GNWGenworth Financial Inc.Click Here For Quote!Trade Now!
GILDGilead SciencesClick Here For Quote!Trade Now!
GSGoldman Sachs GroupClick Here For Quote!Trade Now!
GTGoodyear Tire & RubberClick Here For Quote!Trade Now!
GOOGLGoogle Inc Class AClick Here For Quote!Trade Now!
GOOGGoogle Inc Class CClick Here For Quote!Trade Now!
GWWGrainger (W.W.) Inc.Click Here For Quote!Trade Now!
HALHalliburton Co.Click Here For Quote!Trade Now!
HBIHanesbrands IncClick Here For Quote!Trade Now!
HOGHarley-DavidsonClick Here For Quote!Trade Now!
HARHarman Int’l IndustriesClick Here For Quote!Trade Now!
HRSHarris CorporationClick Here For Quote!Trade Now!
HIGHartford Financial Svc.Gp.Click Here For Quote!Trade Now!
HASHasbro Inc.Click Here For Quote!Trade Now!
HCAHCA HoldingsClick Here For Quote!Trade Now!
HCPHCP Inc.Click Here For Quote!Trade Now!
HCNHealth Care REIT, Inc.Click Here For Quote!Trade Now!
HPHelmerich & PayneClick Here For Quote!Trade Now!
HESHess CorporationClick Here For Quote!Trade Now!
HPQHewlett-PackardClick Here For Quote!Trade Now!
HDHome DepotClick Here For Quote!Trade Now!
HONHoneywell Int’l Inc.Click Here For Quote!Trade Now!
HRLHormel Foods Corp.Click Here For Quote!Trade Now!
HSPHospira Inc.Click Here For Quote!Trade Now!
HSTHost Hotels & ResortsClick Here For Quote!Trade Now!
HCBKHudson City BancorpClick Here For Quote!Trade Now!
HUMHumana Inc.Click Here For Quote!Trade Now!
HBANHuntington BancsharesClick Here For Quote!Trade Now!
ITWIllinois Tool WorksClick Here For Quote!Trade Now!
IRIngersoll-Rand PLCClick Here For Quote!Trade Now!
INTCIntel Corp.Click Here For Quote!Trade Now!
ICEIntercontinental ExchangeClick Here For Quote!Trade Now!
IBMInternational Bus. MachinesClick Here For Quote!Trade Now!
IPInternational PaperClick Here For Quote!Trade Now!
IPGInterpublic GroupClick Here For Quote!Trade Now!
IFFIntl Flavors & FragrancesClick Here For Quote!Trade Now!
INTUIntuit Inc.Click Here For Quote!Trade Now!
ISRGIntuitive Surgical Inc.Click Here For Quote!Trade Now!
IVZInvesco Ltd.Click Here For Quote!Trade Now!
IRMIron Mountain IncorporatedClick Here For Quote!Trade Now!
JECJacobs Engineering GroupClick Here For Quote!Trade Now!
JBHTJ. B. Hunt Transport ServicesClick Here For Quote!Trade Now!
JNJJohnson & JohnsonClick Here For Quote!Trade Now!
JCIJohnson ControlsClick Here For Quote!Trade Now!
JOYJoy Global Inc.Click Here For Quote!Trade Now!
JPMJPMorgan Chase & Co.Click Here For Quote!Trade Now!
JNPRJuniper NetworksClick Here For Quote!Trade Now!
KSUKansas City SouthernClick Here For Quote!Trade Now!
KKellogg Co.Click Here For Quote!Trade Now!
KEYKeyCorpClick Here For Quote!Trade Now!
GMCRKeurig Green MountainClick Here For Quote!Trade Now!
KMBKimberly-ClarkClick Here For Quote!Trade Now!
KIMKimco RealtyClick Here For Quote!Trade Now!
KMIKinder MorganClick Here For Quote!Trade Now!
KLACKLA-Tencor Corp.Click Here For Quote!Trade Now!
KSSKohl’s Corp.Click Here For Quote!Trade Now!
KHCKraft Heinz CoClick Here For Quote!Trade Now!
KRKroger Co.Click Here For Quote!Trade Now!
LBL Brands Inc.Click Here For Quote!Trade Now!
LLLL-3 Communications HoldingsClick Here For Quote!Trade Now!
LHLaboratory Corp. of America HoldingClick Here For Quote!Trade Now!
LRCXLam ResearchClick Here For Quote!Trade Now!
LMLegg MasonClick Here For Quote!Trade Now!
LEGLeggett & PlattClick Here For Quote!Trade Now!
LENLennar Corp.Click Here For Quote!Trade Now!
LVLTLevel 3 CommunicationsClick Here For Quote!Trade Now!
LUKLeucadia National Corp.Click Here For Quote!Trade Now!
LLYLilly (Eli) & Co.Click Here For Quote!Trade Now!
LNCLincoln NationalClick Here For Quote!Trade Now!
LLTCLinear Technology Corp.Click Here For Quote!Trade Now!
LMTLockheed Martin Corp.Click Here For Quote!Trade Now!
LLoews Corp.Click Here For Quote!Trade Now!
LOWLowe’s Cos.Click Here For Quote!Trade Now!
LYBLyondellBasellClick Here For Quote!Trade Now!
MTBM&T Bank Corp.Click Here For Quote!Trade Now!
MACMacerichClick Here For Quote!Trade Now!
MMacy’s Inc.Click Here For Quote!Trade Now!
MNKMallinckrodt PlcClick Here For Quote!Trade Now!
MROMarathon Oil Corp.Click Here For Quote!Trade Now!
MPCMarathon PetroleumClick Here For Quote!Trade Now!
MARMarriott Int’l.Click Here For Quote!Trade Now!
MMCMarsh & McLennanClick Here For Quote!Trade Now!
MLMMartin Marietta MaterialsClick Here For Quote!Trade Now!
MASMasco Corp.Click Here For Quote!Trade Now!
MAMastercard Inc.Click Here For Quote!Trade Now!
MATMattel Inc.Click Here For Quote!Trade Now!
MKCMcCormick & Co.Click Here For Quote!Trade Now!
MCDMcDonald’s Corp.Click Here For Quote!Trade Now!
MHFIMcGraw Hill FinancialClick Here For Quote!Trade Now!
MCKMcKesson Corp.Click Here For Quote!Trade Now!
MJNMead JohnsonClick Here For Quote!Trade Now!
WRKWestrock CoClick Here For Quote!Trade Now!
MDTMedtronic plcClick Here For Quote!Trade Now!
MRKMerck & Co.Click Here For Quote!Trade Now!
METMetLife Inc.Click Here For Quote!Trade Now!
KORSMichael Kors HoldingsClick Here For Quote!Trade Now!
MCHPMicrochip TechnologyClick Here For Quote!Trade Now!
MUMicron TechnologyClick Here For Quote!Trade Now!
MSFTMicrosoft Corp.Click Here For Quote!Trade Now!
MHKMohawk IndustriesClick Here For Quote!Trade Now!
TAPMolson Coors Brewing CompanyClick Here For Quote!Trade Now!
MDLZMondelez InternationalClick Here For Quote!Trade Now!
MONMonsanto Co.Click Here For Quote!Trade Now!
MNSTMonster BeverageClick Here For Quote!Trade Now!
MCOMoody’s CorpClick Here For Quote!Trade Now!
MSMorgan StanleyClick Here For Quote!Trade Now!
MOSThe Mosaic CompanyClick Here For Quote!Trade Now!
MSIMotorola Solutions Inc.Click Here For Quote!Trade Now!
MURMurphy OilClick Here For Quote!Trade Now!
MYLMylan N.V.Click Here For Quote!Trade Now!
NDAQNASDAQ OMX GroupClick Here For Quote!Trade Now!
NOVNational Oilwell Varco Inc.Click Here For Quote!Trade Now!
NAVINavientClick Here For Quote!Trade Now!
NTAPNetAppClick Here For Quote!Trade Now!
NFLXNetflix Inc.Click Here For Quote!Trade Now!
NWLNewell Rubbermaid Co.Click Here For Quote!Trade Now!
NFXNewfield Exploration CoClick Here For Quote!Trade Now!
NEMNewmont Mining Corp. (Hldg. Co.)Click Here For Quote!Trade Now!
NWSANews Corp.Click Here For Quote!Trade Now!
NEENextEra EnergyClick Here For Quote!Trade Now!
NLSNNielsen HoldingsClick Here For Quote!Trade Now!
NKENikeClick Here For Quote!Trade Now!
NINiSource Inc.Click Here For Quote!Trade Now!
NBLNoble Energy IncClick Here For Quote!Trade Now!
JWNNordstromClick Here For Quote!Trade Now!
NSCNorfolk Southern Corp.Click Here For Quote!Trade Now!
NTRSNorthern Trust Corp.Click Here For Quote!Trade Now!
NOCNorthrop Grumman Corp.Click Here For Quote!Trade Now!
NRGNRG EnergyClick Here For Quote!Trade Now!
NUENucor Corp.Click Here For Quote!Trade Now!
NVDANvidia CorporationClick Here For Quote!Trade Now!
ORLYO’Reilly AutomotiveClick Here For Quote!Trade Now!
OXYOccidental PetroleumClick Here For Quote!Trade Now!
OMCOmnicom GroupClick Here For Quote!Trade Now!
OKEONEOKClick Here For Quote!Trade Now!
ORCLOracle Corp.Click Here For Quote!Trade Now!
OIOwens-Illinois IncClick Here For Quote!Trade Now!
PCARPACCAR Inc.Click Here For Quote!Trade Now!
PLLPall Corp.Click Here For Quote!Trade Now!
PHParker-HannifinClick Here For Quote!Trade Now!
PDCOPatterson CompaniesClick Here For Quote!Trade Now!
PAYXPaychex Inc.Click Here For Quote!Trade Now!
PYPLPayPalClick Here For Quote!Trade Now!
PNRPentair Ltd.Click Here For Quote!Trade Now!
PBCTPeople’s United FinancialClick Here For Quote!Trade Now!
POMPepco Holdings Inc.Click Here For Quote!Trade Now!
PEPPepsiCo Inc.Click Here For Quote!Trade Now!
PKIPerkinElmerClick Here For Quote!Trade Now!
PRGOPerrigoClick Here For Quote!Trade Now!
PFEPfizer Inc.Click Here For Quote!Trade Now!
PCGPG&E Corp.Click Here For Quote!Trade Now!
PMPhilip Morris InternationalClick Here For Quote!Trade Now!
PSXPhillips 66Click Here For Quote!Trade Now!
PNWPinnacle West CapitalClick Here For Quote!Trade Now!
PXDPioneer Natural ResourcesClick Here For Quote!Trade Now!
PBIPitney-BowesClick Here For Quote!Trade Now!
PCLPlum Creek Timber Co.Click Here For Quote!Trade Now!
PNCPNC Financial ServicesClick Here For Quote!Trade Now!
RLPolo Ralph Lauren Corp.Click Here For Quote!Trade Now!
PPGPPG IndustriesClick Here For Quote!Trade Now!
PPLPPL Corp.Click Here For Quote!Trade Now!
PXPraxair Inc.Click Here For Quote!Trade Now!
PCPPrecision CastpartsClick Here For Quote!Trade Now!
PCLNPriceline.com IncClick Here For Quote!Trade Now!
PFGPrincipal Financial GroupClick Here For Quote!Trade Now!
PGProcter & GambleClick Here For Quote!Trade Now!
PGRProgressive Corp.Click Here For Quote!Trade Now!
PLDPrologisClick Here For Quote!Trade Now!
PRUPrudential FinancialClick Here For Quote!Trade Now!
PEGPublic Serv. Enterprise Inc.Click Here For Quote!Trade Now!
PSAPublic StorageClick Here For Quote!Trade Now!
PHMPulte Homes Inc.Click Here For Quote!Trade Now!
PVHPVH Corp.Click Here For Quote!Trade Now!
QRVOQorvoClick Here For Quote!Trade Now!
PWRQuanta Services Inc.Click Here For Quote!Trade Now!
QCOMQUALCOMM Inc.Click Here For Quote!Trade Now!
DGXQuest DiagnosticsClick Here For Quote!Trade Now!
RRCRange Resources Corp.Click Here For Quote!Trade Now!
RTNRaytheon Co.Click Here For Quote!Trade Now!
ORealty Income CorporationClick Here For Quote!Trade Now!
RHTRed Hat Inc.Click Here For Quote!Trade Now!
REGNRegeneronClick Here For Quote!Trade Now!
RFRegions Financial Corp.Click Here For Quote!Trade Now!
RSGRepublic Services IncClick Here For Quote!Trade Now!
RAIReynolds American Inc.Click Here For Quote!Trade Now!
RHIRobert Half InternationalClick Here For Quote!Trade Now!
ROKRockwell Automation Inc.Click Here For Quote!Trade Now!
COLRockwell CollinsClick Here For Quote!Trade Now!
ROPRoper IndustriesClick Here For Quote!Trade Now!
ROSTRoss StoresClick Here For Quote!Trade Now!
RCLRoyal Caribbean Cruises LtdClick Here For Quote!Trade Now!
RRyder SystemClick Here For Quote!Trade Now!
CRMSalesforce.comClick Here For Quote!Trade Now!
SNDKSanDisk CorporationClick Here For Quote!Trade Now!
SCGSCANA CorpClick Here For Quote!Trade Now!
SLBSchlumberger Ltd.Click Here For Quote!Trade Now!
SNIScripps Networks Interactive Inc.Click Here For Quote!Trade Now!
STXSeagate TechnologyClick Here For Quote!Trade Now!
SEESealed Air Corp.(New)Click Here For Quote!Trade Now!
SRESempra EnergyClick Here For Quote!Trade Now!
SHWSherwin-WilliamsClick Here For Quote!Trade Now!
SIALSigma-AldrichClick Here For Quote!Trade Now!
SIGSignet JewelersClick Here For Quote!Trade Now!
SPGSimon Property Group IncClick Here For Quote!Trade Now!
SWKSSkyworks SolutionsClick Here For Quote!Trade Now!
SLGSL Green RealtyClick Here For Quote!Trade Now!
SJMSmucker (J.M.)Click Here For Quote!Trade Now!
SNASnap-On Inc.Click Here For Quote!Trade Now!
SOSouthern Co.Click Here For Quote!Trade Now!
LUVSouthwest AirlinesClick Here For Quote!Trade Now!
SWNSouthwestern EnergyClick Here For Quote!Trade Now!
SESpectra Energy Corp.Click Here For Quote!Trade Now!
STJSt Jude MedicalClick Here For Quote!Trade Now!
SWKStanley Black & DeckerClick Here For Quote!Trade Now!
SPLSStaples Inc.Click Here For Quote!Trade Now!
SBUXStarbucks Corp.Click Here For Quote!Trade Now!
HOTStarwood Hotels & ResortsClick Here For Quote!Trade Now!
STTState Street Corp.Click Here For Quote!Trade Now!
SRCLStericycle IncClick Here For Quote!Trade Now!
SYKStryker Corp.Click Here For Quote!Trade Now!
STISunTrust BanksClick Here For Quote!Trade Now!
SYMCSymantec Corp.Click Here For Quote!Trade Now!
SYYSysco Corp.Click Here For Quote!Trade Now!
TROWT. Rowe Price GroupClick Here For Quote!Trade Now!
TGTTarget Corp.Click Here For Quote!Trade Now!
TELTE Connectivity Ltd.Click Here For Quote!Trade Now!
TETECO EnergyClick Here For Quote!Trade Now!
TGNATegnaClick Here For Quote!Trade Now!
THCTenet Healthcare Corp.Click Here For Quote!Trade Now!
TDCTeradata Corp.Click Here For Quote!Trade Now!
TSOTesoro Petroleum Co.Click Here For Quote!Trade Now!
TXNTexas InstrumentsClick Here For Quote!Trade Now!
TXTTextron Inc.Click Here For Quote!Trade Now!
HSYThe Hershey CompanyClick Here For Quote!Trade Now!
TRVThe Travelers Companies Inc.Click Here For Quote!Trade Now!
TMOThermo Fisher ScientificClick Here For Quote!Trade Now!
TIFTiffany & Co.Click Here For Quote!Trade Now!
TWXTime Warner Inc.Click Here For Quote!Trade Now!
TWCTime Warner Cable Inc.Click Here For Quote!Trade Now!
TJXTJX Companies Inc.Click Here For Quote!Trade Now!
TMKTorchmark Corp.Click Here For Quote!Trade Now!
TSSTotal System ServicesClick Here For Quote!Trade Now!
TSCOTractor Supply CompanyClick Here For Quote!Trade Now!
RIGTransoceanClick Here For Quote!Trade Now!
TRIPTripAdvisorClick Here For Quote!Trade Now!
FOXATwenty-First Century FoxClick Here For Quote!Trade Now!
TSNTyson FoodsClick Here For Quote!Trade Now!
TYCTyco InternationalClick Here For Quote!Trade Now!
USBU.S. BancorpClick Here For Quote!Trade Now!
UAUnder ArmourClick Here For Quote!Trade Now!
UNPUnion PacificClick Here For Quote!Trade Now!
UNHUnited Health Group Inc.Click Here For Quote!Trade Now!
UPSUnited Parcel ServiceClick Here For Quote!Trade Now!
URIUnited Rentals, Inc.Click Here For Quote!Trade Now!
UTXUnited TechnologiesClick Here For Quote!Trade Now!
UHSUniversal Health Services, Inc.Click Here For Quote!Trade Now!
UNMUnum GroupClick Here For Quote!Trade Now!
URBNUrban OutfittersClick Here For Quote!Trade Now!
VFCV.F. Corp.Click Here For Quote!Trade Now!
VLOValero EnergyClick Here For Quote!Trade Now!
VARVarian Medical SystemsClick Here For Quote!Trade Now!
VTRVentas IncClick Here For Quote!Trade Now!
VRSNVerisign Inc.Click Here For Quote!Trade Now!
VZVerizon CommunicationsClick Here For Quote!Trade Now!
VRTXVertex Pharmaceuticals IncClick Here For Quote!Trade Now!
VIABViacom Inc.Click Here For Quote!Trade Now!
VVisa Inc.Click Here For Quote!Trade Now!
VNOVornado Realty TrustClick Here For Quote!Trade Now!
VMCVulcan MaterialsClick Here For Quote!Trade Now!
WMTWal-Mart StoresClick Here For Quote!Trade Now!
WBAWalgreens Boots AllianceClick Here For Quote!Trade Now!
DISThe Walt Disney CompanyClick Here For Quote!Trade Now!
WMWaste Management Inc.Click Here For Quote!Trade Now!
WATWaters CorporationClick Here For Quote!Trade Now!
ANTMAnthem Inc.Click Here For Quote!Trade Now!
WFCWells FargoClick Here For Quote!Trade Now!
WDCWestern DigitalClick Here For Quote!Trade Now!
WUWestern Union CoClick Here For Quote!Trade Now!
WYWeyerhaeuser Corp.Click Here For Quote!Trade Now!
WHRWhirlpool Corp.Click Here For Quote!Trade Now!
WFMWhole Foods MarketClick Here For Quote!Trade Now!
WMBWilliams Cos.Click Here For Quote!Trade Now!
WECWisconsin Energy CorporationClick Here For Quote!Trade Now!
WYNWyndham WorldwideClick Here For Quote!Trade Now!
WYNNWynn Resorts LtdClick Here For Quote!Trade Now!
XELXcel Energy IncClick Here For Quote!Trade Now!
XRXXerox Corp.Click Here For Quote!Trade Now!
XLNXXilinx IncClick Here For Quote!Trade Now!
XLXL CapitalClick Here For Quote!Trade Now!
XYLXylem Inc.Click Here For Quote!Trade Now!
YHOOYahoo Inc.Click Here For Quote!Trade Now!
YUMYum! Brands IncClick Here For Quote!Trade Now!
ZBHZimmer Biomet HoldingsClick Here For Quote!Trade Now!
ZIONZions BancorpClick Here For Quote!Trade Now!
ZTSZoetisClick Here For Quote!Trade Now!

Old version of page – to edit live version, see https://www.howthemarketworks.com/teachers-guide/using-assignments/

GlaxoSmithKline, also known as Glaxo, or GSK, is one of the world’s leading pharmacutical manufacturers, producing billions of dollars of medication per year. Since 1987, they have been working on the development of a vaccine for Malaria, one of the world’s deadliest diseases.

Malaria is thought to have killed more humans than any other cause in the history of mankind, some experts believe it has killed nearly half of all humans who have ever lived. It is a parasite that transmits itself through mosquito bites, according to the World Health Organization, almost half the world’s population is still currently at risk for contracting the disease. It is so deadly that the Center for Disease Control, the United State’s government body responsible for containing epidemic illnesses, was created specifically to fight malaria outbreaks in the United States.

Currently, there are drugs available to treat the illness, but because it is so fast in its attacks, it can often be too late by the time people who catch the illness in remote areas can reach a hospital for treatment. The most effective measures have been mosquito eradication and sleeping under protective mosquito nets (the near-eradication of malaria in the United States was due in part to the widespread popularity of window screens), but an actual vaccine that can help prevent contracting the illness altogether has long been one of the “milestone achievements” sought after by medical researchers.

The approval of this vaccine, after decades of development and clinical trials, is a monumental occasion for disease control around the world.

Read More on Bloomberg

General Motors (Click Here for Quote) has doubled its year-on-year earnings, thanks mostly to a huge uptick in demand for its trucks.

The auto maker has long paid off its loans from the government taken out during the financial crash, and has been rapidly expanding in foreign markets over the last few years. Specifically, China has seen the bulk of its growth, where its profit margins are over 10%.

So why trucks, and why now? Trucks are profitable; while there certainly are many different kinds of trucks on the road, there are far fewer than a normal car, and construction companies require both light and heavy trucks for work crews. Whenever construction grows, particularly in places like China that has been on a construction frenzy over the past few decades, the demand for trucks grows too.

In the United States, new homes are being built at a much faster rate than just a few years ago, so construction crews are buying more trucks to use building more houses. Similarly, when construction slows down, the demand for trucks usually drops off even more quickly.

Read More about GM’s earnings on Yahoo! Finance

Some of the biggest oil producers in the United States are starting to get into bigger and bigger trouble as they have been struggling to cope with the crash of oil prices in the last few years.

Across the middle of the United States, between Texas and North Dakota, shale oil drilling and extraction, known as “Fracking”, was a boom industry during much of the financial crash, while other industries in the area floundered. This was supported by high oil prices; usually above $100 a barrel. However, since teh end of the financial crisis, the price of oil plummetted by almost half, now trading around $50 a barrel.

This means that producers who had developed their business plans assuming $100 a barrel now see their budgets cut in half, and many are scrambling to try to make up the difference. Until recently, Wall Street has stepped in and extended credit limits and bought stocks and bond issued by the producers, but those times may be coming to an end as the low prices may be here to stay.

Read More on Bloomberg

If you missed out, you can get the details on our latest monthly challenge, where you can win cash prizes by learning about investing, on our Contests Page (Click Here)!

The Top 5 performers by portfolio value were:

  1. RiskOn +43.80%
  2. igorski123 +41.97%
  3. Michael +28.19%
  4. nickbrown +15.58%
  5. dancegirl +11.14%

The HTMW Team Finishers were:

  • 318th: psimard -0.79%
  • 338th: ksmith -1.42%
  • 336th: TeamHTMW -1.86%
  • 338th: Rossman -2.01%

See The Trading Strategies From This Contest!

Phil Simard’s Blue Chip Investment Strategy - Final Rank: 318 / 518 Final Portfolio Value: $992,114,784.48 (-0.79%) Investment Strategy For The Blue Chip Investment Contest Since time was very limited for me in the Blue Chip Investment Challenge. I just tried to get as much profit as possible by trading SPXU and other triple leveraged ETF’s and trying to time the market. Read More...
Ross LoGiudice’s Blue Chip Challenge: Lessons from Diversifying - Final Rank: 338 / 518 Final Portfolio Value: $979,922,717.88 (-2.01%) Investment Strategy For This Contest I don’t know if what I did even qualifies as strategy. I purchased about 20 or stocks that were familiar and then I closed my eyes and crossed my fingers. The end result was losses across the board that ranged Read More...
Kevin Smith’s Blue Chip Challenge Investment Strategy - Final Rank: 331 / 518 Final Portfolio Value: $985,785,982.85 (-1.42%) Investment Strategy For This Contest This was a contest where I wanted to go big or crash hard. The news leading up to the contest was dominated by the crash in oil prices, so I figured that there would probably be a rebound coming soon. Read More...
Team HTMW Blue Chip Challenge Investment Strategy - Final Rank: 336 / 518 Final Portfolio Value: $981,381,149.90 (-1.86%) Investment Strategy For This Contest We picked blue chip stocks in the Dow Jones Industrial Average, and tried to balance analyst ratings, Price/Earnings (P/E) ratios, the latest news, and our own instincts. Even though there were only 30 stocks to choose from, it took hours to Read More...

About The Challenge

“Blue Chip” companies are the leaders in their field, and have assets of $1 billion or more. So this Summer, HowTheMarketWorks is giving you a billion dollars in virtual money to trade any US stocks, and try to beat our team!

The HowTheMarketWorks Team is building our own portfolio, made up of stocks that make up the Dow-Jones Industrial Average. To learn more about the DOW, which stocks are in it, and company information for all of them, Click Here!

Even better, the portfolio of the HowTheMarketWorks Team, along with all our trades, will be public in the Contest Forums for everyone to see!

Prizes

A Summer Trading Challenge wouldn’t be complete without prizes! Here’s what you can win:

  • The Top 5 portfolios will receive $100 Amazon gift cards
  • Every portfolio that beats the HowTheMarketWorks Team will receive a gift certificate for Investing101, along with a certificate showing their achievement
  • We will give out a random prize from our Shop to one random participant every week

Rules

  1. You can only trade US stocks and ETFs
  2. There will be a full audit at the end of the competition on all winners to verify any corrections due to stock splits, dividends, or any other corporate action our team may have missed. Only legitimate portfolio returns will be counted in the ranking.
  3. The usernames of the winners will be made public, but not their actual first name, last name, nor email address.
  4. No member of the HowTheMarketWorks Team is eligable for any prizes

Register For The Challenge!

If you are already a member of the new HowTheMarketWorks site, go to the “Contests” page and search for “Summer Blue Chip Challenge!” and join the contest!

If you have not registered to the new site, you can register and join the contest directly if you Click Here!

I’m A Teacher. What Is The Value Of This Contest For My Students?

Everything on HowTheMarketWorks is designed around education, and this challenge is no exception. In addition to the valuable experience your students can get from managing their own portfolio, our team will also be posting the reasons why we make every trade in the Team HowTheMarketWorks portfolio in the contest forums, so all participants get real exposure to some of the biggest factors that go into a stock purchase.

All teachers are also encouraged to participate! In addition to the same learning benefits everyone has, teachers will get a great primer on all the new features on our site, and if they win, $100 for classroom supplies never hurts!

Join Today!

Most Popular Canadian Stocks

Looking to trade Canadian stocks in your HowTheMarketWorks portfolio, but not sure where to look? You can find a list of the most popular Canadian companies, their symbol, and quotes here!

SYMBOL COMPANY NAME Quote And Chart Trade It On HTMW
RY Royal Bank of Canada Get Quote! Buy It On HTMW!
TD Toronto-Dominion Bank (The) Get Quote! Buy It On HTMW!
VRX Valeant Pharmaceuticals International, Inc. Get Quote! Buy It On HTMW!
BNS Bank of Nova Scotia (The) Get Quote! Buy It On HTMW!
CNR Canadian National Railway Company Get Quote! Buy It On HTMW!
GMM.U General Motors Company Get Quote! Buy It On HTMW!
SU Suncor Energy Inc. Get Quote! Buy It On HTMW!
ENB Enbridge Inc. Get Quote! Buy It On HTMW!
BMO Bank of Montreal Get Quote! Buy It On HTMW!
BCE BCE Inc. Get Quote! Buy It On HTMW!
BAM.A Brookfield Asset Management Inc. Get Quote! Buy It On HTMW!
MFC Manulife Financial Corporation Get Quote! Buy It On HTMW!
CNQ Canadian Natural Resources Limited Get Quote! Buy It On HTMW!
IMO Imperial Oil Limited Get Quote! Buy It On HTMW!
CP Canadian Pacific Railway Limited Get Quote! Buy It On HTMW!
TRI Thomson Reuters Corporation Get Quote! Buy It On HTMW!
TRP TransCanada Corporation Get Quote! Buy It On HTMW!
CM Canadian Imperial Bank Of Commerce Get Quote! Buy It On HTMW!
POT Potash Corporation of Saskatchewan Inc. Get Quote! Buy It On HTMW!
GWO Great-West Lifeco Inc. Get Quote! Buy It On HTMW!
MG Magna International Inc. Get Quote! Buy It On HTMW!
HSE Husky Energy Inc. Get Quote! Buy It On HTMW!
T TELUS Corporation Get Quote! Buy It On HTMW!
PWF Power Financial Corporation Get Quote! Buy It On HTMW!
L Loblaw Companies Limited Get Quote! Buy It On HTMW!
SLF Sun Life Financial Inc. Get Quote! Buy It On HTMW!
AGU Agrium Inc. Get Quote! Buy It On HTMW!
G Goldcorp Inc. Get Quote! Buy It On HTMW!
ATD.B Alimentation Couche-Tard Inc. Get Quote! Buy It On HTMW!
ENL Endo International plc Get Quote! Buy It On HTMW!
CVE Cenovus Energy Inc. Get Quote! Buy It On HTMW!
RCI.B Rogers Communications Inc. Get Quote! Buy It On HTMW!
ABX Barrick Gold Corporation Get Quote! Buy It On HTMW!
NA National Bank of Canada Get Quote! Buy It On HTMW!
GIB.A CGI Group Inc. Get Quote! Buy It On HTMW!
FFH Fairfax Financial Holdings Limited Get Quote! Buy It On HTMW!
SAP Saputo Inc. Get Quote! Buy It On HTMW!
PPL Pembina Pipeline Corporation Get Quote! Buy It On HTMW!
POW Power Corporation of Canada Get Quote! Buy It On HTMW!
QSP.UN Restaurant Brands International Limited Partne… Get Quote! Buy It On HTMW!
CPG Crescent Point Energy Corp. Get Quote! Buy It On HTMW!
SJR.B Shaw Communications Inc. Get Quote! Buy It On HTMW!
WN George Weston Limited Get Quote! Buy It On HTMW!
CCT Catamaran Corporation Get Quote! Buy It On HTMW!
IFC Intact Financial Corporation Get Quote! Buy It On HTMW!
IGM IGM Financial Inc. Get Quote! Buy It On HTMW!
ECA Encana Corporation Get Quote! Buy It On HTMW!
IPL Inter Pipeline Ltd. Get Quote! Buy It On HTMW!
FTS Fortis Inc. Get Quote! Buy It On HTMW!
QSR Restaurant Brands International Inc. Get Quote! Buy It On HTMW!
TCK.B Teck Resources Limited Get Quote! Buy It On HTMW!
TLM Talisman Energy Inc. Get Quote! Buy It On HTMW!
CIX CI Financial Corp. Get Quote! Buy It On HTMW!
FNV Franco-Nevada Corporation Get Quote! Buy It On HTMW!
CTC.A Canadian Tire Corporation, Limited Get Quote! Buy It On HTMW!
CSU Constellation Software Inc. Get Quote! Buy It On HTMW!
GIL Gildan Activewear Inc. Get Quote! Buy It On HTMW!
FM First Quantum Minerals Ltd. Get Quote! Buy It On HTMW!
OTC Open Text Corporation Get Quote! Buy It On HTMW!
REI.UN RioCan Real Estate Investment Trust Get Quote! Buy It On HTMW!
MRU Metro Inc. Get Quote! Buy It On HTMW!
SLW Silver Wheaton Corp. Get Quote! Buy It On HTMW!
DOL Dollarama Inc. Get Quote! Buy It On HTMW!
BIP.UN Brookfield Infrastructure Partners L.P. Get Quote! Buy It On HTMW!
TRQ Turquoise Hill Resources Ltd. Get Quote! Buy It On HTMW!
OCX ONEX Corporation Get Quote! Buy It On HTMW!
ARX ARC Resources Ltd. Get Quote! Buy It On HTMW!
TOU Tourmaline Oil Corp. Get Quote! Buy It On HTMW!
AEM Agnico Eagle Mines Limited Get Quote! Buy It On HTMW!
CU Canadian Utilities Limited Get Quote! Buy It On HTMW!
BPY.UN Brookfield Property Partners L.P. Get Quote! Buy It On HTMW!
CCO Cameco Corporation Get Quote! Buy It On HTMW!
ATD.A Alimentation Couche-Tard Inc. Get Quote! Buy It On HTMW!
BB BlackBerry Limited Get Quote! Buy It On HTMW!
KEY Keyera Corp. Get Quote! Buy It On HTMW!
MX Methanex Corporation Get Quote! Buy It On HTMW!
HR.UN H&R Real Estate Investment Trust Get Quote! Buy It On HTMW!
VET Vermilion Energy Inc. Get Quote! Buy It On HTMW!
ALA AltaGas Ltd. Get Quote! Buy It On HTMW!
EMA Emera Incorporated Get Quote! Buy It On HTMW!
SNC SNC-Lavalin Group Inc. Get Quote! Buy It On HTMW!
BEP.UN Brookfield Renewable Energy Partners L.P. Get Quote! Buy It On HTMW!
PEY Peyto Exploration & Development Corp. Get Quote! Buy It On HTMW!
EMP.A Empire Company Limited Get Quote! Buy It On HTMW!
WFT West Fraser Timber Co. Ltd. Get Quote! Buy It On HTMW!
RGL Royal Gold, Inc. Get Quote! Buy It On HTMW!
COS Canadian Oil Sands Limited Get Quote! Buy It On HTMW!
RCI.A Rogers Communications Inc. Get Quote! Buy It On HTMW!
HBC Hudson’s Bay Company Get Quote! Buy It On HTMW!
LNR Linamar Corporation Get Quote! Buy It On HTMW!
ACO.X ATCO Ltd. Get Quote! Buy It On HTMW!
MEG MEG Energy Corp. Get Quote! Buy It On HTMW!
PSK PrairieSky Royalty Ltd. Get Quote! Buy It On HTMW!
AYA Amaya Inc. Get Quote! Buy It On HTMW!
CCL.B CCL Industries Inc. Get Quote! Buy It On HTMW!
YRI Yamana Gold Inc. Get Quote! Buy It On HTMW!
ELD Eldorado Gold Corporation Get Quote! Buy It On HTMW!
FCR First Capital Realty Inc. Get Quote! Buy It On HTMW!
VII Seven Generations Energy Ltd. Get Quote! Buy It On HTMW!
EFN Element Financial Corporation Get Quote! Buy It On HTMW!
IAG Industrial Alliance Insurance and Financial Se… Get Quote! Buy It On HTMW!
VSN Veresen Inc. Get Quote! Buy It On HTMW!
FTT Finning International Inc. Get Quote! Buy It On HTMW!
BIN Progressive Waste Solutions Ltd. Get Quote! Buy It On HTMW!
CAE CAE Inc. Get Quote! Buy It On HTMW!
CEF.A Central Fund of Canada Limited Get Quote! Buy It On HTMW!
UFS Domtar Corporation Get Quote! Buy It On HTMW!
LUN Lundin Mining Corporation Get Quote! Buy It On HTMW!
CFP Canfor Corporation Get Quote! Buy It On HTMW!
K Kinross Gold Corporation Get Quote! Buy It On HTMW!
WCP Whitecap Resources Inc. Get Quote! Buy It On HTMW!
BRP Brookfield Residential Properties Inc. Get Quote! Buy It On HTMW!
AC Air Canada Get Quote! Buy It On HTMW!
MDA MacDonald, Dettwiler and Associates Ltd. Get Quote! Buy It On HTMW!
POU Paramount Resources Ltd. Get Quote! Buy It On HTMW!
RBA Ritchie Bros. Auctioneers Incorporated Get Quote! Buy It On HTMW!
DH DH Corporation Get Quote! Buy It On HTMW!
CWT.UN Calloway Real Estate Investment Trust Get Quote! Buy It On HTMW!
BBD.B Bombardier Inc. Get Quote! Buy It On HTMW!
WSP WSP Global Inc. Get Quote! Buy It On HTMW!
REF.UN Canadian Real Estate Investment Trust Get Quote! Buy It On HTMW!
GEI Gibson Energy Inc. Get Quote! Buy It On HTMW!
TA TransAlta Corporation Get Quote! Buy It On HTMW!
WJA WestJet Airlines Ltd. Get Quote! Buy It On HTMW!
CAR.UN Canadian Apartment Properties Real Estate Inve… Get Quote! Buy It On HTMW!
CGX Cineplex Inc. Get Quote! Buy It On HTMW!
CUF.UN Cominar Real Estate Investment Trust Get Quote! Buy It On HTMW!
BTE Baytex Energy Corp. Get Quote! Buy It On HTMW!
MFI Maple Leaf Foods Inc. Get Quote! Buy It On HTMW!
TFI TransForce Inc. Get Quote! Buy It On HTMW!
CU.X Canadian Utilities Limited Get Quote! Buy It On HTMW!
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Good Till Date Order Terms

If you have ever placed a limit or stop order on HowTheMarketWorks, you have see the “Good Till Day” order term on the trading menu:

A “Good-Till-Day” order is simply one that will cancel at the end of the trading day if it does not fill. So, for example, if you have Apple stock, and today you know they are releasing an Earnings Release, you know their price is probably going to change quite a bit today.

If you are worried about losing value, but don’t want to stare at the ticker all day, you can put a Sell Stop order at the price you would want to dump it at if the price starts falling, and set the order to cancel at the end of today.

If the price does start falling, the order will execute as soon as it hits your price threshold. If the price doesn’t fall, the order will cancel at the end of the day.

If you place a Good Till Day order after the market has closed, it will stay open until the end of the next trading day.

Why Use It?

Many people use Good Till Cancel orders, will will stay open until either they execute, or they cancel the order manually. One disadvantage to this is that you cannot execute a Market Order on stock you have an outstanding Limit Order on; this means that if you have a Stop order placed on your Apple stock, but the price goes up and you want to sell it, you would first have to cancel your Stop order before you can make a Sell market order.

Generally, people put Good Till Day orders on many Limit Orders for stocks they are hoping have a big spike during the day, and stop orders when they fear some market news may come out that will cause a long-term decrease in a stocks price.

Click Here to try it out!

How do I diversify my portfolio?

When it comes to investing, if you want to achieve long-term success you need to diversify your portfolio. Portfolio diversification is the process of spreading your investments across different asset classes, such as stocks, bonds, or real estate, as well as across different sectors or market capitalizations, to reduce risk and increase potential returns. When you diversify your portfolio, you create a more stable and resilient investing strategy that can handle market fluctuations, business or economic cycle changes, or other potential risks.

So, how do I diversify a portfolio?

This is a question every investor needs to ask themselves. With so many options available, it can be overwhelming to know where to start. Should you invest in index funds or individual stocks? Should you allocate a larger portion of your portfolio to real estate or digital assets? And how do you balance your investments to suit your individual risk tolerance and time horizon?

By taking a step-by-step approach to building a diversified portfolio, you can reduce your exposure to market volatility, and increase your chances of achieving your financial goals.

In this article, we’ll explain how to diversify your portfolio, including the benefits of diversification, how to identify the right asset classes for your portfolio, and advanced strategies for taking your portfolio to the next level. Whether you’re a seasoned investor or just starting out, this article will provide you with the framework you need to create a diversified portfolio that’s tailored to your needs and goals.

Portfolio Diversification

The Benefits of Diversification

There are a few major benefits of diversification. Investors diversify their investments because it helps to reduce risk, and either increases or stabilizes their returns. It also improves the long-term performance of their portfolio.
People invest in the stock market because they want to make more money than they could make by leaving it in the bank. Investors especially do not want to lose money. Capital Preservation is the idea that you want to preserve the money you have invested. Investors never want to be in a position where it would have been better to not have invested at all. So, to make sure that investors are protected from price swings, and to help simplify managing their portfolio, investors try to maintain a fully diversified portfolio.

Reduced Risk

One of the most significant advantages of diversification is its ability to reduce risk. When you invest in a single asset class, such as stocks or bonds, you’re exposed to the potential for significant losses if the market declines. If one asset class experiences a decline, the others can help offset the loss, reducing the overall risk of your portfolio. The same is true if you invest in multiple companies in the same sector or across different industries. It’s very unlikely that all companies in all sectors or industries will be equally impacted by changes in the financial markets.

Increased Potential Returns

Diversification can also help you achieve higher potential returns. This can help you achieve a higher overall return on your investments, as the returns from each investment can complement each other. In other words, the more stocks you own the more likely you are to own a stock that ends up doubling or tripling in price. For example, if you own an equal dollar amount of 10 different stocks and 9 of them stayed at the same price and one of them doubled, your portfolio would be up 10%.

Increased potential returns

However, a portfolio that consisted solely of stocks may experience significant growth over the long term, but it may also be subject to significant volatility. By adding bonds or other fixed-income investments to your portfolio, you can reduce the overall volatility and increase the potential for steady returns.

When you diversify your portfolio, you make sure that you never have “too many eggs in one basket.” If one of the stocks you have invested in starts to go down in price, you have limited your exposure to that stock by only having a smaller percentage of all your assets in that stock. For beginners, this can mean having no more than 20% of your portfolio in any one stock, ETF, or mutual fund. With real money, as you invest more money into your portfolio and as your portfolio grows in value, you should keep buying different stocks so that eventually you have less than 10% of your money in any one stock.

Diversification means that, for example, if you are investing in stocks in the Banking, Energy, Healthcare, Manufacturing, Luxury and IT industries, you would try to spread your money as evenly as possible across these industries. This way, if the Energy sector as a whole starts to have problems (for example, if the price of oil falls quickly), you don’t have to worry about your entire portfolio, and you have limited the losses you are exposed to from a single market shock.

Types of Diversification

There are 2 main types of diversification to think about as you first start investing.

1. Sector Diversification

With sector diversification you invest in different sectors of the economy, such as technology, energy, or manufacturing, to reduce the risk associated with a single sector. To diversify by sector means that you would split your investments across companies based on the type of business they do; energy companies would be oil producers, electricity companies, and companies that specialize in transporting materials needed for energy production. Manufacturing companies are firms that build everything from toys to cars to equipment to airplanes.

Sector diversification
Image by Jonathan from Pixabay

The idea behind sector diversification is if some larger trend negatively affects an entire industry, you want to protect the rest of your investments from being affected. For example, low oil prices caused a general decline in energy stocks (of course, with some companies still growing, and others hit especially hard). If you were holding shares in banking companies, these investments would not have been directly affected by this change.

Sector diversification

If you’re looking for a good way to find stocks in different sectors, Click Here to see how to research stocks by sector.

2. Stock Diversification

This is the basis of a well diversified portfolio, where you spread your money across several companies, instead of investing all your money in one stock or company. For example, if you want to put 10% of your money in the banking sector, that doesn’t mean you should put 10% of your money in Bank of America. You should have a few bank stocks in case one of your bank stocks is poorly managed and goes bankrupt. Individual stocks are more volatile than sectors, and sectors are more volatile than entire security types, so this is the core of all diversification.

Stock diversification
Image by Puneet Kumar from Pixabay

Other Types of Diversification

Geographic diversification

Geographic Diversification: where you invest in multiple countries or regions, exposing yourself to new risks like political instability, or currency exchange risk. However, you also can benefit from the higher potential growth in emerging markets or developing countries.

Size diversification
Image by Sergey from Pixabay

Size Diversification: is based on the size of the company, so you would invest in large-cap and small-cap companies to manage the risks of high-growth startups, versus the slower and more steady returns of larger established companies.

Time diversification

Time Diversification: involves separating your investments across different time horizons, so you have some short-term focused assets and some long-term securities so you can have positive future results as well as short-term gains.

Identifying Asset Classes

Each asset class has its own unique characteristics, risks, and potential returns, and by understanding these differences, you can make informed decisions about where to allocate your investments. Each asset class behaves differently in different market conditions. For example, during times of…

  • Economic growth: stocks tend to perform well, while bonds may experience lower returns.
  • Economic uncertainty: bonds may perform better, while stocks may decline in value.
  • Inflation: commodities such as gold or oil may appreciate, while bonds may decline in value.

We cover asset classes in more depth in the article, Basic Investing Strategies, however here is a short explanation for some of the main asset classes.

Stocks

When you invest in stocks you buy shares, or a percentage of ownership, in a company. Stocks have shown to be a great way to grow your wealth over the long-term, as you can earn money from capital gains or dividends. However, the stock market is also very volatile, so prices will fluctuate in the short-term and are considered a higher-risk investment.

Check out this Intro to Stocks article to understand the history and different types of stock. If you need some help picking stocks, check out this article on How to Pick Stocks.  

Bonds

When you invest in bonds you are buying a debt security, like an “I owe you” where you lend money to either a company (corporate bonds) or the government (treasury bills or T-notes). The borrower agrees to pay you back at a specific time in the future with interest.

Bonds are considered lower-risk than stocks since they have a fixed rate of return. However, the value of a bond is heavily affected by changes in interest rates. In recent years, the bond markets are experiencing a lot of volatility thanks to high inflation and rapid changes in interest rates.

Check out this Forbes article, The Bond Market Crash – And What One Can Do About It Now to learn more.

Real Estate

Real Estate

Any physical property, be it residential homes, commercial properties or agricultural land would be considered a real estate investment. You can earn money from the appreciation in value or from rental income. Investing in real estate is a great way to diversify your portfolio, however it’s more difficult to get access to your money or turn it into cash. Since it is less liquid than other assets, this type of investment is better suited to longer-term investing strategies.

Commodities

Commodities are physical goods or natural resources that are produced or extracted for sale. Commodities are often traded on markets, such as the futures market or the spot market. Some examples of commodities include:

  • Agricultural products (e.g. wheat, corn, soybeans)
  • Metals (e.g. gold, silver, copper)
  • Energy products (e.g. oil, natural gas, coal)
  • Precious stones (e.g. diamonds, rubies, emeralds)
  • Livestock (e.g. cattle, pigs, chickens)

There are a few ways you can invest in commodities; directly purchasing the physical goods, (e.g. gold coins), buying and selling futures contracts or options contracts or through Exchange-Traded funds (ETFs) that track the price of a commodity or a basket of commodities.

Commodity prices are notoriously volatile as prices fluctuate rapidly and unpredictably based on supply and demand.

Exchange-Traded-Funds (ETFs) & Mutual Funds

Exchange Traded Funds (ETFs) and Mutual Funds are good places to start investing because these securities are diversified themselves. ETFs and mutual funds take money from investors and invest that money in a variety of securities that meet the stated objective of that fund. The key difference between the two is that mutual funds are actively managed, so you will pay higher fees than with ETFs.

Some funds invest in large companies, some in European companies, some in utilities, some in commodities like gold and oil, etc. For example the ETF FHLC is a collection of Health Care stocks. If you are looking for an easy way to invest in a particular industry, without having to research which particular companies you want to choose, this is a quick route to take.

Learn more about Exchange-Traded-Funds (ETFs) as well as Mutual Funds by checking out these other articles.

Asset Allocation

Asset Allocation means owning a variety of investments like real estate, stocks, bonds, gold/silver and cash. Yes, cash is an investment! For many years, the rule of thumb was to subtract your age from 100, and have that percentage of your overall value invested in stocks (so if you are 18 years old, you would invest 82% of your portfolio in stocks). The idea is that over time stocks have consistently outperformed other investments so the younger you are, the more you should be invested in stocks. As you get older and closer to retirement (when you will rely on your investments) you have less time and you would prefer the low but consistent returns of bonds and cash. Another way of putting this is that younger investors are more risk-tolerant and older investors are more risk-adverse.

This line of thinking is getting to be a little out-dated, with the rising popularity of ETFs, more choices for mutual funds, and the ability to invest in riskier bonds, but the idea of making your portfolio more risk-averse over time can still be a good idea.

Asset allocation is different from diversification – you might have a wide asset allocation, with almost no diversification!

For example, if you divided a $10,000 portfolio between 3 asset classes (Stocks, ETFs, and Mutual Funds), you could have the following holdings:

  • Stocks: Celgene Corporation (CELG) and UnitedHealth Group (UNH)
  • ETF: SPDR S&P Biotech ETF (XBI)
  • Mutual Fund: Vanguard Health Care Fund (VGHCX)

You might be divided between 3 asset classes, but the entire portfolio is still concentrated on Healthcare/Biotechnology, so it is not diversified at all.

Building a Diversified Portfolio

Now that you understand the benefits of diversification and the different asset classes available, it’s time to build a diversified portfolio that’s tailored to your individual needs and goals.

Here’s a step-by-step guide to help you get started:

Step 1: Set Your Investment Goals and Risk Tolerance

Before you start building your portfolio, take time to define your financial goals and risk tolerance.

  • What do you want to achieve with your investments?
  • Are you looking to build your wealth over the long-term, or do you want to generate passive fixed income?
  • What level of risk are you willing to take on?

Your investment goals and risk tolerance will guide all investment decisions as you create a personalized investment plan.

Step 2: Allocate Assets to Different Classes

A common approach is to allocate your assets based on your risk tolerance and the time you have left before you retire. With the goal of being able to live off your investments for a comfortable standard of living. So, you may start as an aggressive investor and become a conservative one later in life.

  • Conservative investors: allocate 80% to bonds or fixed-income assets and 20% to stocks or high-growth assets.
  • Moderate investors: allocate 40% to bonds or lower-risk assets and 60% to stocks.
  • Aggressive investors: allocate 20% to bonds and 80% to stocks.

Step 3: Select Individual Securities or Funds Within Each Class

At this stage, you are actively researching and comparing your options to reduce exposure to any one particular security or sector. When selecting individual securities or funds, consider the following factors:

  • Performance: compare the financial statements or price history between similar alternatives so you pick the best performing one for you.
  • Risk: Consider the level of risk associated with each security or fund and ensure that it aligns with your risk tolerance.
  • Fees: check what fees you will need to pay to minimize the impact on your returns.

As you make your selection, make sure your portfolio is diversified across different asset classes, sectors, and geographic regions.

Step 4: Rebalance Your Portfolio Regularly

Remember to take time either annually (or monthly) to re-evaluate your financial situation. Depending on your lifestyle or circumstances, you may need to adjust your investing plan. Rebalancing your portfolio can help you stay disciplined and focused on your investing goals, rather than making emotional decisions based on market fluctuations.

Advanced Diversification Strategies

While a well-diversified portfolio is essential for managing risk and achieving long-term success, there are several advanced diversification strategies that can help you further optimize your investment portfolio.

Sector Rotation

Sector rotation involves shifting your investments between different sectors or industries in response to changes in the market or economy. This can help you capitalize on opportunities in emerging sectors or industries, while avoiding those that are declining.

For example, if you’re invested in the technology sector and it’s experiencing a downturn, you may consider shifting your investments to the healthcare sector, which is experiencing growth.

Diversifying your portfolio with sector rotation
Image by Jason Shivers from Pixabay

Style Diversification

Style diversification involves investing in different styles or approaches within a particular sector or industry. This can help you balance out blind spots, for example if you are mostly following a buy and hold strategy, (where you intend to keep your investment 5+ years) you can allocate a portion of your portfolio to be actively managed. So you can take advantage of any short-term price fluctuations through day trading, value trading or another investing strategy.

Alternatively, within the technology sector, you may want to invest in both value and growth stocks. Value stocks are those that are undervalued by the market, while growth stocks are those that are expected to grow rapidly.

Geographic Diversification

As mentioned earlier in this article, geographic diversification involves investing in different regions or countries around the world. This can help you capture opportunities in emerging markets, while managing risk.

For example, you may want to invest in emerging markets such as China or India, which are experiencing rapid growth. While also staying invested in developed markets such as the United States or Europe, which are more stable.

Alternative Investment Diversification

Alternative investments involve investing in assets that are not traditional stocks or bonds, such as private equity, cryptocurrencies, hedge funds, or real estate.

For example, you may want to invest a small portion of your portfolio in a private equity fund that invests in small businesses or startups. Or, you may want to invest in Bitcoin, Ethereum or other cryptos to get exposure to this new market.

Keep in mind these are more advanced strategies for a reason, before dabbling with any of them, get to know how well you respond to risk. The rewards of potentially earning a higher return may not be worth the stress of trying to manage complex financial instruments.

Common Mistakes to Avoid

Over- or Under-Allocating to a Particular Asset Class

One common mistake is to over- or under-allocate to a particular asset class. This can lead to a portfolio that is too concentrated in a single asset class, which can increase your risk. Diversifying is good, but don’t go too far! If you start diversifying too much, your portfolio starts to get thin. You might not lose much if one company starts to go down, but you also won’t gain much if another company you own starts doing very well. Beginners should usually build their first portfolio on HowTheMarketWorks with between 8 and 10 stocks, ETFs, or Mutual Funds at a time. You can always switch the investments you have, but try to avoid having too many, or two few, investments at once.

Over-Diversification can also make it more difficult to manage your investments. If you’re not able to follow-up with company news and stay on top of your investments, things could start turning bad, and you could start losing one before you even know why!

Ignoring Inflation Risk

Another common mistake is to ignore the risk of inflation. Inflation erodes your purchasing power, and the value of your investments over time. If your portfolio is heavily weighted towards fixed-income investments (bonds), or you’re keeping most of your money in cash or cash equivalents, you will be exposing yourself to significant inflation risk. As you develop your investing strategies, keep in mind that your rate of return needs to be above the rate of inflation, or else your portfolio is going down in value in real terms.

Failing to Rebalance the Portfolio Regularly

Finally, failing to rebalance your portfolio regularly is a very common mistake. Think of it like spring cleaning, but instead of taking everything out of the closet to see what you want to giveaway, you are evaluating whether you want to sell-off some of your investments instead. If you make a habit of reviewing each asset you’re holding, you’ll also be able to spot opportunities you may otherwise miss.

For example, a company you own received some bad press, so the stock price went down. You review their financial statements and discover the negative market sentiment, in the other words the attitude or feeling of other investors, does not line up with the real value of the company. You decide to buy some more shares and make a short-term gain.

Summary

Learning how to diversify your portfolio is all about creating a more stable and resilient portfolio that can withstand market fluctuations. If you’re ready to start building a diversified portfolio, here are some final thoughts to keep in mind:

  • Start small and gradually increase your investments as you become more comfortable with the process.
  • Don’t be afraid to ask for help or seek advice from a financial advisor if you’re unsure about any aspect of the process.
  • Be patient and disciplined and remember that diversification is a long-term strategy that requires time and effort to achieve.

And finally, we invite you to start building a diversified portfolio today on HowTheMarketWorks, a platform that allows you to test out your investing strategies before using real money.

To get started building a diversified portfolio, identify five sectors from the image above that you are interested in. From each of those 5 sectors, pick one stock that you are familiar with. Determine the tickers for those stocks, get quotes, review their charts, make sure those stocks are on upward trends, and then buy those stocks in your virtual account. If you started with $100,000 then invest about $10,000 in each of those 5 stocks. Don’t be afraid, it’s only play money and you need to jump in and start learning how the market works.

So what are you waiting for? Start building a diversified portfolio today and take the first step towards achieving your financial goals!

The most challenging aspect of starting to invest is picking the first few stocks to add to a portfolio. Every investor has their own techniques and strategies, but we want to give you the tools you need to place your first trades, and get your portfolio off to a running start.

Establish Goals

Before choosing your first stock, the first step is deciding what your goals are for your portfolio.

Risk and Reward

The biggest choice you will make will be balancing risk and reward – investing all your cash in very risky assets with high growth (or loss) potential, or focus on companies that you believe can be strong in the long run.

Diversification

Once you consider how risky you are feeling, next decide how you want to diversify your portfolio, which will help you decide how much cash to invest in each symbol. Your challenge may do this automatically – most challenges include a position limit, meaning you can only invest a certain percentage of your cash in any single stock.

You can check if your contest has a position limit rule on the Account Balances page.

  1. Go to Portfolio Summary under the the Stock Game menu.

2. Click on Trading Rules/Rates.

Once you establish the minimum number of securities you need, you can now start handpicking stock symbols by using a trading strategy. You can also create a mix of these strategies to get the best of each strategy.

Trading Strategies for Beginners

“Invest in what you know” strategy

The best way to start when buying stocks is to buy what you know, not trying to follow stock tips or read a bunch of technical analysis that you cannot follow. Think of it this way: if you already know a company, they have done well enough in the past to already become a household name today. This gives you, as the investor, a big advantage; you can see how that company is doing just by looking at their stores and reading normal business news.

Ask yourself the following questions:

  • Have they started to open new stores around me lately, or are they closing some shops?
  • Does there seem to always be a lot of people you know using their products, or are they still more obscure?
  • Does their current news look positive or negative?

If all three of these are positive, then this might be a good place to invest.

Earnings Strategy

An investor can always handpick stocks based on the earnings calendar. To do so, you would have to know your investment time horizons, and flip through the earnings calendar to find gems (i.e. stocks that you can buy and that will soar during its earning season, or stocks that will tank and that can be shorted beforehand).

The Earning Strategy is somewhat of an evolution of the “Invest in what you know” strategy – you will be looking for companies that you believe will have high earnings announcements coming up soon, which can cause their stock price to rise.

Once you have found your stocks, it is very important to analyze them and back-up your assumption of how the market will react to their earnings report.

An example of a well executed trade based on the earnings’ expectations would be NVDA. Before the presentation, NVDA was trading around 102 and soared continuously every since to 149.44 on the 7th of June!

diversification rule

The Passive strategy

If you are not sure which specific stock to select, you can always invest in ETFs and market indices. These products are already diversified for you and will track a specific market for you.

As an example, let’s say you want to invest in a gaming company, but don’t know which company in specific. You can always invest in an ETF that will track the gaming market for you. In this situation, you can invest in the Wedbush ETFMG Video Game Tech ETF (GAMR), which tracks this market for you. According to amplifyetfs.com, some of their top holdings are GameStop Corp, Bilibili, Keywords Studios PLC and Pearl Abyss, which means the stock picking and allocation tasks has been already taken care of by the Fund Managers of this ETF.

You can find a specific ETFs in the following link: https://etfdb.com/etfs/.  You can also subscribe to stock newsletters to get some professional advice.  For example, here is a popular stock service and their list of Best Stocks To Buy Now.

Stock screeners strategy

You can also use stock screeners to find good purchases and short sales. A Stock Screener is a program or website that will ask you some questions about what you are looking for in a stock, and return a list of stocks that match your criteria. You can then do extra research on these stocks to determine if they should be added to your portfolio.

One of the best stock screeners is Chaikin Analytics, which offers free 90 day usage for beginners (but the free period expires after that). Check it out here.

Getting Trading Ideas

HowTheMarketWorks also has a Trading Ideas page that will help you review the overall market’s health and help you adjust your stock picks.

Today’s Market Summary

This page is very useful for the start of your research. It presents the day’s market summary. It is useful because it tells you how the overall market is doing today. As an example, on May 17th, 2017, you would notice that indices such as SPY dropped 5 points due to the “Trump-Russia” investigation. This can be used as a signal to certain investors to buy more. If an investor purchased SPY during the dip, he/she would have gained more than $5 per share! It is always important to review how the overall market is doing and the market news today. This can help you to capture the perfect timing to buy stocks at their lowest price (or to short sale them at their peak).

spy

Earnings Release

This page presents stocks’ quarterly earnings pre-announcements with the current estimate and new range. A stock’s volatility increases when it is near the earnings report.

Analyst Ratings:

The Analyst Ratings page presents the recommendations given by brokerage firms and financial analysts. This page will be useful to analyze a stock’s recommendation trend and the current average recommendation.

Best/Worst ETFs

Looking for an ETF? This page is a great place to see what ETF is currently doing well and what ETF is not well performing. These ETF can signal current market trends and help you make choices based on that.

Popular Stocks

Wondering what other users are trading? This page presents our popular stocks and mutual funds. We also present top gainers and losers and hot stories that is moving the market today. You can also find our random stock generator, which generates 3 random stock ideas!

Upgrades/Downgrades

The Upgrade/Downgrade page presents all the changes in analysts’ recommendation of symbols.

Inflation is up in the latest Consumer Price Index report, showing the first total-year increase since the financial crash.

Prices increased about 0.3% in June, and 0.4% in May. This increase in prices is welcomed by many economists and analysts; raising prices is a good sign that the economy is growing. The Federal Reserve Bank currently is holding a 2% annual inflation target, but because of the strong dollar (meaning the US dollar is comparatively “stronger” than other currencies in the global markets, making it easier to import and harder to export).

Having some inflation is necessary to spur business growth; if there is some inflation, companies have an incentive to hire people and not hold cash. If inflation is too high, prices go up too fast for wages to keep up.

To find the current inflation rates, you can visit the Federal Reserve Bank of Saint Louis’s FRED research system by clicking here. For more on this inflation report, click here to read more on Bloomberg.

More good news for the US labor market, Jobless Claims have resumed their decent last week, after 3 weeks of climbing.

This continues to signal that the US economy is beginning to see strong growth, not just recovery, in the job market after several years of being plagued by high unemployment after the 2008 financial crash. This is consistent with the Fed’s announcement that interest rates will raise this year.

When looking at the labor market, there are three reports that economists and analysts are always looking out for: the Unemployment Rate, the New Hires, and the Jobless Claims report. The relationship between these three categories can tell us a lot about the labor market as a whole; the Unemployment Rate alone will tell us how many people are out of work and looking for a job, the New Hires tells us how many jobs were created, and the Jobless Claims tells us how many people lost their jobs in the last week. So by comparing them, you can see what has happened in the job market in the last week, month, or year.

For example, if the unemployment rate is unchanged, but the jobless claims and new hires both go up, we know that no new people entered the labor force, and the number of people who lost their jobs was equal to the number of people who got new ones, so the labor market as a whole is probably unchanged.

Conversely, if the unemployment rate goes up, while new hires and jobless claims stay the same, it means that more people who previously were not looking for a job just entered the labor market, so you have more people total looking for jobs.

For more information about any of these rates, visit the Bureau of Labor Statistics. For more information on this week’s jobless claims report,