Investing in equities

If equities tempt you but you are scared to take the plunge during these volatile times, here's a complete step-by-step guide on investing in equities.

Step 1: Understand how the stock market works

When you read you begin with A-B-C. When you sing you begin with Do-Re-Mi. And when you invest in stocks you begin with business-company-shares.

Before you embark on your journey to invest in equities, teach yourself how the stock market works. Read this easy guide .

Step 2: Learn how to choose a stock
Having understood the markets, it is important to know how to go about selecting a company, a stock and the right price. A little bit of research, some smart diversification and proper monitoring will ensure that things seldom go wrong.

It's not that difficult: Just follow these 4 golden rules. And while you are at it< why don't you also check out How to buy low, sell high.

Step 3: Decide how much to invest
Since equities are high risk, high return instruments, how much you should invest would really depend on how much risk you can tolerate.

Once you have done that, use this asset allocation test to calculate exactly how much of your savings you should invest in equities.

Step 4: Monitor and review
Monitoring your equity investments regularly is recommended. Keep in touch with the quarterly-results announcements and update the prices on your portfolio worksheet atleast once a week. You can use Moneycontrol's Portfolio to update the prices of your equity holdings.

Also, review the reasons you earlier identified for buying a stock and check whether they are still valid or there have been significant changes in your earlier assumptions and expectations. And use an annual review process to review your exposure to equity shares within your overall asset allocation and rebalance, if necessary. Ideally, revisit the RiskAnalyser at every such review because your risk capacity and risk profile could have undergone a change over a 12-month period.

Finally, ensure that you avoid these seven most common investing mistakes and sail smoothly into your financial bright future.

Photograph: Jun Kokimura/Getty

Disclaimer: While we have made efforts to ensure the accuracy of our content (consisting of articles and information), neither this website nor the author shall be held responsible for any losses/ incidents suffered by people accessing, using or is supplied with the content.

TRW Automotive Attains 52-Week High - Analyst Blog

Shares of TRW Automotive Holdings Corp. (TRW) hit new 52-week high of $68.93 on Jul 5, which is above its previous level of $68.38, and closed at $68.73 on the same day. The closing price represented a strong one-year return of 81.4% and year-to-date return of 25.0%.

TRW Automotive, headquartered in Michigan, is a leading manufacturer of advanced technology products and services for the automotive markets. The company operates in 27 countries through its subsidiaries. It has a market cap of $8.3 billion. Average volume of shares traded over the last three months stood at approximately 944.4K.

Shares of the company started escalating due to improving fundamentals in the automotive components supplying market. However, the company failed to impress investors with its first quarter results on Apr 30.

TRW posted earnings of $1.51 per share in the first quarter of 2013, topping the Zacks Consensus Estimate of $1.46. However, earnings fell 6.8% from $1.62 per share in the first quarter of 2012 due to lower operating income on the back of a higher mix of lower margin business and planned increases in costs to support future growth. Net earnings dipped 10.4% to $189 million from $211 million a year ago. All of them excluded special items.

Revenues in the quarter were almost flat at $4.2 billion as the impact of increasing demand for TRW's innovative technologies and higher vehicle production volumes in China were offset by significantly lower vehicle production in Europe.

U.S. auto sales continue to improve driven by continued macroeconomic recovery, aging vehicles on the U.S. roads and strong demand for commercial vehicles from businesses. Seasonally adjusted annual sales rate in June this year reached its highest level of 15.9 million units since November 2007.

Currently, shares of TRW retain a Zacks Rank #3, which translates to a short-term rating (1–3 months) of Hold. Some other stocks that are performing well in the industry include Visteon Corp. (VC! ) and Magna International Inc. (MGA), each with a Zacks Rank #1 (Strong Buy), and Meritor Inc. (MTOR) with a Zacks Rank #2 (Buy).

2 Health Care Stocks Rising on Big Volume

DELAFIELD, Wis. ( Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

TrovaGene

TrovaGene (TROV) is a development stage molecular diagnostic company focused on the development and marketing of urine-based nucleic acid tests for patient/disease screening and monitoring. This stock closed up 6% to $10.02 in Friday's trading session.

Friday's Volume: 712,000

Three-Month Average Volume: 183,106

Volume % Change: 294%

From a technical perspective, TROV ripped higher here into all-time high territory with heavy upside volume. This stock has been uptrending strong for the last month and change, with shares soaring higher from its low of $5.75 to its new all-time high of $10.20. During that move, shares of TROV have been making mostly higher lows and higher highs, which is bullish technical price action. That move has also been accompanied by bullish upside volume flows.

Traders should now look for long-biased trades in TROV as long as it's trending above its recent breakout level of $8.83, and then once it sustains a move or close above its all-time high of $10.20 with volume that hits near or above 183,106 shares. If we get that move soon, then TROV will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that move are $13 to $15.

Addus HomeCare

Addus HomeCare (ADUS) provides a range of home- and community-based services to older adults and younger disabled individuals in the U.S. This stock closed up 10.16% at $21.46 in Friday's trading session.

Friday's Volume: 273,000

Three-Month Average Volume: 184,047

Volume % Change: 110%

From a technical perspective, ADUS ripped sharply higher here right above some near-term support at $18.58 and back above its 50-day moving average of $19.44 with above-average volume. This move also pushed shares of ADUS into breakout territory, since the stock took out some near-term overhead resistance at $20.94. Shares of ADUS are now starting to trend within range of triggering another major breakout trade. That trade will hit if ADUS manages to take out some resistance at $22 to its 52-week high at $23.71 with high volume.

Traders should now look for long-biased trades in ADUS as long as it's trending above $20.94 or its 50-day at $19.44 and then once it sustains a move or close above those breakout levels with volume that this near or above 184.047 shares. If that breakout triggers soon, then ADUS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $32.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

The Stark Truth Behind Goldman's Earnings "Beat"

U.S. stocks are roughly unchanged this morning, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 0.11% and 0.7%, respectively, as of 10 a.m. EDT. The S&P 500 is shooting for its ninth consecutive "up" day; if it succeeds, it will mark the longest winning streak achieved since November 2004.

Hewlett-Packard's board gets some new blood
Dow component Hewlett-Packard (NYSE: HPQ  ) has just added former Microsoft technologist Ray Ozzie to its board of directors. On the one hand, Ozzie brings exceptional knowledge and experience of the technology industry to HP's board: He founded two software companies that were ultimately bought by industry heavyweights and inherited the role of "chief software architect" at Microsoft from Bill Gates himself. While such expertise is welcome, the real problem with HP's board is that it is rudderless. Meanwhile, Ozzie seems to me too independent and intellectual to fill the leadership gap.

Another bank, another beat
In the wake of the earnings beats by Wells Fargo, JPMorgan, and Citi, Goldman Sachs (NYSE: GS  ) is the latest among the too-big-to-fail set to top expectations. In fact, Goldman blew past the $2.82 consensus earnings-per-share estimate in the second quarter, earning $3.70.

Before we start handing out high-fives, let's keep that performance in perspective. Goldman is doing a decent job at keeping its personnel costs in check: Compensation and benefits eat up 43% of revenue, which is consistent with the first quarter. Nevertheless, this remains an organization run for its employees, not its shareholders. Indeed, for all its vaunted profitability, it's a thin stream of profit that trickles down to the latter group. Goldman's annualized return on average common shareholders' equity was just 10.5% in the second quarter. That's hardly the sort of number that makes investors salivate. In fact, analysts reckon it's barely above the bank's 10% cost of capital.

Besides, with the civil trial of former Goldman banker Fabrice Tourre having started yesterday, Goldman has more pressing concerns regarding another, highly prized form of capital: reputational capital.

Between the questionable business practices and the opaque balance sheets, many investors are understandably hesitant about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Amazon Crosses the Gaming Line

Ever since Amazon.com (NASDAQ: AMZN  ) commandeered Google (NASDAQ: GOOG  ) Android for its own purposes, there's been a distinct line in the sand. Amazon has its forked version of Android that has no official association with the search giant or its content stores, while Google has its sanctioned version. Amazon just crossed that line.

The e-tail heavyweight is now expanding its GameCircle service to include all Android devices. GameCircle is Amazon's social gaming network that allows gamers to play each other and offers achievements and leaderboards. Up until now GameCircle had been exclusive to Kindle Fire devices.

By broadening its horizons, Amazon is taking a clear shot at the gaming community within Google's Android camp. Even though both companies operate Android-based ecosystems, this is effectively a move at cross-platform warfare. The search giant just made a similar push in May when it announced Google Play Game Services at Google I/O, which integrates across Android, Apple (NASDAQ: AAPL  ) iOS, and Web platforms. Apple's Game Center, which is only available for iOS, has also grown, to 240 million users.

Google is reportedly building a game console to pre-empt Apple, which may integrate gaming features into its Apple TV. Microsoft easily has an advantage in this department thanks to its popular Xbox 360. The software maker now has 46 million paying Xbox Live members. Those members are likely more engaged with Microsoft's gaming platform than their mobile counterparts.

For instance, Game Center users may be registered since the service is integrated into iOS and many games, but that doesn't mean those users are actually using the free service.

Online social gaming networks are key for multiplayer functionality, and no clear leader has emerged. That's an opportunity for companies looking to strengthen their platforms, and Amazon's expansion is a clear acknowledgement of this fact. That's particularly true considering that the tech giants are preparing to move into the living room, and gaming will be a big part of that.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

A Fool Looks Back

Netflix (NASDAQ: NFLX  ) had a good week. It started when the company teamed up with DreamWorks Animation (NASDAQ: DWA  ) to expand their relationship, and it culminated in an announcement that the Netherlands will be its next expansion market for the leading video service.

The deal with DreamWorks Animation comes at an important time. Many young families are still venting about the Nickelodeon and Nick Jr. content that was removed from Netflix's streaming platform late last month. Offering 300 hours of original programming from DreamWorks Animation -- primarily in the form of new shows that the computer-animation studio will create based on its growing arsenal of characters -- will give young viewers more reasons to keep checking out Netflix by next year.

This is also an important evolutionary step at Netflix. Subscribers need to understand that, unlike optical discs, streaming licenses don't last forever. Content goes both ways, and Netflix has more often than not found a way to make it up to subscribers when popular shows leave its digital vault.

The other big move by Netflix was to announce that it will go Dutch later this year. Pushing into the Netherlands makes sense. Netflix now has more than 6 million subscribers for its streaming service outside the United States.

Yes, Netflix is still losing a lot money overseas, but its international operating loss narrowed in its latest quarter to the lowest that it's been in more than a year.

Keep those passport stamps coming, Netflix.

Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.

Nokia (NYSE: NOK  ) was the subject of not one, but two rumored buyout reports. Things have been rough for the handset giant in recent years, but sometimes a stock gets too cheap to ignore. Idenix Pharmaceuticals (NASDAQ: IDIX  ) shed 31% of its value on Friday, after the FDA requested more information on the biotech's preclinical hepatitis-C drug candidate. Indenix will need to address those concerns before moving on to the critical human trials. The payoffs are huge when a young biotech can get a treatment on the market, but the approval process isn't for the faint of heart. Microsoft (NASDAQ: MSFT  ) backtracked on some of the controversial Xbox One features that were introduced a week earlier. It will no longer require users to go online every 24 hours, and gamers will be able to keep selling or lending their disc-based games.

Now look ahead
The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.