Second-largest U.S. carrier United Airlines has raised domestic airfares by 3 to 5 percent Thursday to cope with soaring fuel costs. This is the airline’s third attempt to jack up the fare in just over two weeks, which may encourage other airlines to follow suit.

The increase, which applies everywhere in the U.S. except to and from Hawaii, is “part of our effort to pass on increases in our commodity costs that will help offset the significant and rapid rise in fuel,” said United spokeswoman Robin Urbanski.

The move comes just two days after Delta Air Lines Inc. Chief Executive Richard Anderson said domestic carriers need to raise tickets 15 to 20 percent just to break even at existing fuel prices. United parent UAL Corp., Delta and other major carriers reported billions of dollars in combined quarterly losses in recent days.

“This is the most challenging financial period in the history of the industry, just at the same time we have this unprecedented surge in jet fuel prices with no end in sight, we’re bumping up against a weakening economy,” said John Heimlich, chief economist of the Air Transport Association.

No other carrier immediately announced it was following suit. American Airlines, the nation’s largest carrier, and Southwest said they were evaluating the move.

United’s corporate parent earlier this week said it lost $537 million during the first three months of the year because of increased fuel costs. The carrier called the current environment “extraordinarily difficult” for airlines, and said it planned to cut flights and slash 1,100 jobs in an effort to cut costs.

The loss was worse than investors had been expecting, and the company’s shares shed a third of their value in a matter of hours. A rally among airline stocks Thursday won back only a fraction of those losses.

UAL shares rose $1.45, or 10.4 percent, to close at $15.40.

Trading the markets makes one a winner and another loser. As my mentor used to tell me, “Markets are summarized by greed, hope, fear and desperation”, all mistakes traders commit including me are always related to the four market moods. I have listed 5 of the most common mistakes we traders make and feel free to choose your own weakness.  

1.       Failing to cut losses

We have to admit that we are humans and we are susceptible in making mistakes. Failing to cut losses not only is expensive for your portfolio, but also a way to wipe it clean.

2.       Adding up to a Losing Position

Cutting loses is bad. Adding up to a losing position is even worse. Some people use this measure to bail out on a position. Simply put you bought 10 shares of XYZ at $50.00 and it fell to $45.00. Some people would buy another 10 shares at $45.00 and sell the whole position at $47.50. Sounds great right? Not really. It is not only getting riskier, but it also gives you more tension in your trading knowing that you are averaging down and might wipe your portfolio clean.

3.       Trading with Emotions

Remember what my mentor told me a while ago? Greed, Hope, Fear and Desperation is the way to go in telling what the current mood of the market is. We have to admit that we traders are motivated with greed, but we also need to understand that in order to be successful in this field, we have to operate like a system, operating without our emotions. Emotions cloud our judgement and logic.

4.       Loving A Position

Yes we understand you made a lot of money in that trade. Even if that issue made you a lot of money previously, you have to take into consideration that past performance is not an indication of future results. No shortcuts are to be made in trading. We really have to do our homework.

5.       Trading the Board and the News

Some trading hours could be boring. And when boredom and impatience strikes traders, all they do is look at the board or the Newswire and stare. Now here comes the fun part, you’ve been staring at ticker symbol ABC for quite some time and you see that it steadily rises to 7%. Sounds great right? You type a buy order at your terminal and the trade is executed. Minutes before closing, you see the ABC correcting and those people who are buying it 2 hours ago are now dumping it. Now you are forced to liquidate and cut your losses. Sounds familiar? Never enter a trade without a trading plan and without doing your homework. What separates gamblers from traders is that traders have systems and plans to follow while gamblers throw their darts at the board.

We have to admit that we cannot remove these overnight. It entails discipline and determination. After all, sometimes you have to get hurt in order to learn, and learning is required if you dream of beating the street.

There are two main schools of thought in analyzing the capital markets. Fundamental Analysis, the use of the company’s books and economic data to determine it’s value, and Technical Analysis, where the supply and demand of an issue, contract, commodity, etc. is being analyzed to forecast future results.

There are a lot of disparities between the two schools of thought. Fundamentalists would go long or short because of valuations while technicians go long or short because of trend continuations or reversal. A Fundamentalist could buy shares of an issue that is nose-diving with his belief that it’s getting cheaper, while a technician would definitely not like it in his portfolio because it broke major trend lines or averages.

There has been an unspoken conflict between the two schools of thought for the past years. A Fundamentalist could be buying the company because of its valuations while a Technician could be shorting it because of its trend.

Fundamentalists call Technical Analysis a “self-fulfilling prophecy” while Technicians do believe that all data are already discounted into the market and books can be cooked. While both of them can be true, the fact is, both of these schools of thought make money.

Ultimately, it’s for the investor to choose what he would like to believe in as long as it makes him money. After all, it’s the profits that really matters in the bloody streets.

The Nikkei 225 index slipped 38.29 points, or 0.3 percent, to 13,540.87 Thursday as cautious investors awaited the release of corporate earning results.

“The consensus is companies will report conservative forecasts but with perceptions that the credit crisis is easing, we look to be at a comfortable level for the overall market,” said Yoji Takeda, head of Asian investments at RBC Investment Management.

As worries about the global credit crunch starts to ease, Tokyo shares will likely be anchored around the 13,000 mark over the coming weeks.

Among blue chip stocks, shares in Japan’s top automaker, Toyota Motor Corp., edged down 0.2 percent to 5,130.00 yen.

The company on Wednesday announced its global sales in the January-March quarter rose 2.7 percent from a year ago to 2.41 million vehicles, beating its U.S. rival and the world’s top automaker General Motors, with 2.25 million units.

Shares in Japan’s No.2 automaker, Honda Motor Co. rose 0.3 percent to 3,210.00 yen, but Nissan Motor closed 0.5 percent lower to 870.00 yen.

The Topix index of all the Tokyo Stock Exchange First Section issues fell 6.82 points, or 0.5 percent, to 1,307.57.

In currencies, the dollar slipped against the yen, standing at 103.52 midafternoon in Tokyo from 103.68 late Wednesday in New York. The euro was quoted at 1.5851 to the dollar from 1.5896.

Johnson & Johnson’s Board of Directors has declared a 10.8% increase in the quarterly dividend rate, from $.415 per share to $.46 per share.

The increase was announced this morning at the Annual Shareholders Meeting in New Brunswick, NJ.

“In recognition of our solid results in 2007, our strong financial position, and our confidence in the future of Johnson & Johnson, the Board has voted to increase the dividend for the 46th consecutive year,” said William C. Weldon, Chairman and Chief Executive Officer of the Company.

At the new rate, the indicated dividend on an annual basis is $1.84 per share compared to the previous rate of $1.66 per share. The next quarterly dividend is payable on June 10, 2008 to shareholders of record as of May 27, 2008.

Credit Suisse Group declared a $2.1 billion net loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread. This is a first in the history of Switzerland’s second largest bank.

The company also disclosed net writedowns of $5.3 billion for big buyout loans and mortgage securities.

Although other operations of the bank did well, “[o]ur first-quarter results are clearly unsatisfactory,” said Chief Executive Officer Brady Dougan.

Credit Suisse is the first of the major European investment banks to report the quarter, but others have warned investors to brace for more write-downs.

The bank posted a net profit of $2.7 billion in the first quarter of 2007; however, Credit Suisse shares slid 43% in the last 12 months, despite efforts to reduce exposure to risk in the market.

“Other than the areas affected directly by the credit crisis, most of our businesses performed well, with revenues near, or in some cases above, those in the first quarter of 2007,” CEO Dougan said.

He said the bank “remains well positioned in an extremely challenging environment.”

Credit Suisse’s capital position is strong, Dougan said, adding that the bank would continue to manage its liquidity conservatively.

“I am confident that we will continue to serve as a safe haven for clients in uncertain and volatile markets, and to seize the opportunities that arise in times of market dislocation to create long-term value,” Dougan said.

Credit Suisse took the bulk of its writedowns - $2.64 billion - for collateralized debt obligations.

But it also marked down $1.67 billion for buyout loans granted but failed to sell to investors and $937 million for mortgage securities.

Credit Suisse trimmed its exposures to the troubled areas during the quarter. Leveraged loans outstanding fell to $20.6 billion. Subprime CDOs shrank to $695 million from $1.6 billion.

So you think you’re ready to buy your first stock, and you’re all geared up, ready to go to the stock exchange. But hey, wait a minute, you forgot something. You need a broker.

No sir, you can’t buy shares of stocks without a broker. You need a stockbroker to help you with the transaction.

Photo Credit: lumaxart

So what does a broker do?

• A stockbroker is first and foremost a salesperson;
• he works for a stock brokerage house; and
• carries out your transactions.

There are generally two types of stockbrokers:

• those who deal directly with their clients (regular brokers),
• and those who act as intermediaries between the client and a larger broker (broker-resellers).

Regular brokers typically are considered more reputable than broker-resellers.

Brokers are further subdivided into full-service brokers and discount-brokers.

Full-service brokers usually offer financial products, investment advice and research, and charge relatively high fees. They may offer stocks, bonds, derivatives, annuities, and insurance. A full-service broker is paid mostly by commissions.

This means that the full-service broker is paid not according to how well your portfolio is doing, but by how often you trade.

Discount brokers do not offer advice or research, but simply transact your business. Because of the limited services they render, discount brokers charge considerably lower fees. They also often offer online computer order entry services.

These brokers are usually paid a fixed salary to execute your trades. They don’t solicit, and they aren’t paid commissions.

So which type of broker should you choose? If you’re going to become a good investor then you should do your homework. Learn how to make your own decisions. Go for the discount-broker, and stay away from the full-service broker whose only interest lies in the commission he gets every time you trade.

Photo Credit: Petrick2008

The mutual fund is an intermediary firm that collects money from many investors to invest in stocks, bonds, short-term money market instruments, and/or other securities.

Each share represents an investor’s proportionate ownership of the fund’s holdings and its generated income.

What are the advantages of mutual funds?

• Professional Management - Professional money managers research, select, and monitor the performance of the securities the fund purchases.
• Diversification - when one investment is losing another might be gaining. This setup spreads your investments across a wide range of companies and industry sectors, greatly reducing your risk.
• Affordability - some mutual funds accommodate investors who don’t have a lot of money to invest by setting relatively low amounts for purchases.
• Liquidity - mutual fund investors, after paying charges and fees, can readily redeem their shares at the current net asset value (NAV) at any time.

What are the disadvantages of mutual funds?

• Costs despite negative returns - investors must pay sales charges, annual fees, and other expenses regardless of how the fund performs.
• Lack of control - investors cannot ascertain the exact make-up of a fund’s portfolio, nor can they directly influence which securities the fund manager buys and sells or the timing of those trades.
• Price uncertainty - with an individual stock, you can obtain real-time pricing information, but not so with a mutual fund. The price at which you purchase or redeem shares depends on the NAV, which might not be calculated until after the closing of major U.S. exchanges.

So, is investing in mutual funds for you?

Every investment has advantages and disadvantages, and features that may be important to one investor may not be important to you.

Whether or not any particular feature of mutual funds is advantageous to you will pretty much depend on your unique circumstances