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Friday, September 26, 2008

The Great Stock Market: Being a Stock Picker and Blue Stocks

By Zindy Maseko

The greatest show on earth takes place on the trading floor. Orders come in and traders in the center stage often times called the pit place the orders in between collecting their thoughts and barking back to the other performers. It is an amazing feat considering the onerous task at hand and the surrounding circumstances. On some days some traders would rather confront the ferocious lion than a day on the trading floor.

The show would not be complete without the critics, the clever and knowledgeable group of commentators and writers who explain or elaborate on the days events. It is similar to the play by play announcer at a Jai Alai game, the ball sometimes travels faster than the words can be uttered from any human form of speech. This could explain why stock market commentators speak in fast forward fashion.

Use your cupboard as a stock picker

There are experts in the field of making predictions on stock performance. But another expert in the field of some stocks may be you the consumer. Think about it, you pick products that for various reasons are your favorites. Your kitchen cupboard or shopping basket may be a very good prediction on the long term performance of the company stock.

A cautionary note is that even the best company may have a down year. The reasons could be management changes, and other economic pressures. The product is still good, but the internal structure of the company needs a quick fix. In these circumstances make a decision whether you want to weather the storm or wait until the company gets its act together. Sometimes the stormy days of a company can be a buying opportunity.

The blue chip stocks

The fact is that we take for granted the Blue Chip stocks both in our familiarity as an end user, but often times in the stock market. The Blue Chip stocks make up the S&P500 index. These stocks as a whole can be purchased as an index fund. Some Blue Chip stocks make up the Dow 100. These stocks on the whole are a bell weather of how the overall market is doing.

There are index funds of Blue Chip stocks that can be bought through a financial brokerage house. There are mutual funds that are designated as Blue Chip Funds in most family of funds offered in all of the major mutual funds companies. There is even a mutual fund company that offers a spider fund comprised of Blue Chip stocks that is similar to the S& P 500.

With the Blue Chip stocks, merit a good review in all times just like any type of investment, not just in times of market uncertainty.

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