IRA Fee Schedule Revised
(reprinted from the January 1999 issue)
Fahnestock and Co. Inc., our clearing firm, has advised Freedom
Investments that the fee structure for self-directed IRAs has been revised. Beginning in
1999, the annual fee for each IRA will be $35. In addition, this fee will be charged to
the account in February each year. IRA Account holders have the option to submit a check
to cover the fees; however the check must be received by Freedom by February 1. Any checks
received after that date will be returned to the client. The only way to
"reimburse" the IRA for the fee that has been debited would be to consider it a
1998 IRA contribution (if received by April 15) or a 1999 IRA contribution.
From the NYSE:
The New York Stock Exchange is open from Monday through
Friday 9:30 a.m. to 4:00 p.m. EST and will observe the following holidays:
1999
Good Friday Apr 2
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IMPORTANT!!
Due to recent changes implemented by the exchanges, Freedom
Investments, Inc. is required to have a properly executed "Market Data
Agreement" for each customer receiving a real-time quote.
Currently there are two ways a customer can receive a Real Time
quote:
1) Complete a Market Data Agreement and receive Real Time individual
quotes and Real Time snap quotes and at a cost of $25 per month, non-professional, for
each account listed.
Or,
2) Complete a Market Data Agreement and receive delayed
individual quotes, but Real Time snap quotes at no charge.
NOTE: a "snap quote" is the quote given prior to submitting
an order to Freedom via the TradeFlash software using the "On Line – Real time
link" option on the transmission control screen or Freedom’s Internet site.
Included with your statement is a letter describing snap quotes and
our real-time quotes policy. If you wish to receive real-time quotes,
you MUST return the letter to us. If you wish to receive Real Time quotes,
check one of the boxes on the letter. (Delayed quotes require no documents.) Then return
the completed document to Freedom Investments and contact our customer
service department to request a market data agreement.
If you have any questions concerning the Market Data Agreement or the
fees, please contact Freedom’s customer service at (800) 944-4033 or fax (800)
830-1855 or E-mail: support@freedominvestments.com.
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Education Corner
(Editor's Note): To read the complete article or for additional
helpful information, go to the web site of the New York Stock Exchange: http://www.nyse.com
You and the Investment World - The New York
Stock Exchange
http://www.nyse.com/public/educat/uinvestw/toc.htm
Reprinted with permission of NYSE
Chapter 5
Why Stock Prices Go Up and Down
If you didn't know better, you might think the stock market had a mind
of its own. Simply watch the stock prices for a week and chances are you'll see them drop
or rise - sometimes by dramatic amounts. Trying to make sense of those shifts might seem
difficult, but closer examination would reveal that stock prices are shaped by concrete
forces. Stock analysts, in fact, make their living charting these forces and their effects
on companies, industries and national and international economies.
An understanding of these forces can do more than help you formulate an
investment strategy - it will also help you see how events and trends can shape everything
from the availability of goods and services to job opportunities.
Supply and Demand
There's an old saying on Wall Street that a stock is worth what
somebody is willing to pay for it. And that's true - the price of a stock is determined by
buyers. As they gain new information, investors decide whether they are willing to pay
more for a stock or less. Their changing perceptions continually push stock prices up or
down.
Simply put, the price of a stock - or for any product or service, for
that matter - is determined by supply and demand. The supply of stocks is based on the
number of shares a company has issued, or sold to the public. The demand for stocks is
created by people wanting to buy those shares from the people who already own them. If
people think they will make money on a stock, they will want to buy it.
But here's the catch: supply is limited, and not everyone who wants to own a company's
stock can. The more that people desire to own a stock, the more they will be willing to
pay for it. High demand for a stock pushes up its price. Similarly, as the value of a
stock increases, owners are more reluctant to sell it.
The rise continues until prospective buyers decide the price has gone too high. Then,
fewer people are willing to buy the stock at the high price. Stock owners who are anxious
to sell must lower the price at which they are willing to sell. The stock's price falls
until investors believe the stock is again worth the price at which owners are willing to
sell.
The Company's Financial Health
The laws of supply and demand explain why stock prices fluctuate. But
how do investors and analysts arrive at their decisions as to whether a stock is worth
buying or selling at a given price? Above all, they examine the financial health of the
company offering the stock. Investors are not likely to put a high value on stock in a
company that's going to lose money. They look for a business with a history of making
strong profits and consistently paying healthy dividends.
While history is important, investors also analyze a company's future
prospects. A company with a poor profit history might have a promising future, and one
with a good history might be on the way down. Therefore, careful investors also review how
a company fares against its competition and whether it's being run by experienced,
responsible people who keep up with current trends. If a company is viewed by potential
investors as increasing efficiency or producing new, innovative products, its stock is
likely to rise in price.
Alternatively, trouble on the horizon - damaging lawsuits, threats of a
strike, more intense competition, or more stringent regulation - can depress the value of
a company's stock. When a major oil company announced that it was filing for bankruptcy,
for instance, the value of its stock dropped 11 percent.
A report that someone or some company is trying to buy a certain
business usually pumps up that business's stock prices. That's because the purchaser has
to buy a majority of the stock to gain control of the company. To do so, the suitor must
persuade stockholders to sell their stock by offering an attractive price or their shares.
Sentiment may also count. For example, when the owners of the Boston
Celtics basketball team offered shares of stock in 1986, analysts suggested that the stock
was overvalued. But investors - most of them Celtic fans - had a high regard for the team
and were willing to pay the price to be associated with it.
An Industry's Financial Health
Another important factor to consider is the health of a company's whole
industry.
A company's stock prices may go up or down depending on whether
investors think its industry is about to expand (grow bigger) or contract (grow smaller).
For example, a company may be doing well financially, but if its industry is declining,
investors might question the company's ability to keep growing. In that case, the
company's stock price may fall.
Many industries expand and contract in cycles. For example, home
building declines when interest rates rise.
Watch for the continuation of this series in future issues of TORCHLIGHT. -
editor
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Nothing herein is to be construed as a solicitation of
any transaction. The information presented has been obtained from sources considered to be
reliable, but it is not purported to be complete or without error. Freedom Investments
Inc. and Fahnestock & Co. Inc. and/or the officers and directors, and/or members of their families, may
at times have positions in any securities mentioned. |
