What you need to realize about solar stocks

Solar Industry has made a drastic comeback in recent years and has created a niche market for itself instead of competing with the Oil and Natural Gas resources for energy construction. Solar energy generation from solar panels have been made comparatively affordable than its initial cost due to decline in photo-voltaic cost and vast production by Chinese manufacturers. Solar energy production is way easier than other energy production from the other resources due to huge infrastructure involved. Solar sector is very recent and has taken only two and half years to get set for growth.

Investors should consider numerous things about the solar industry and solar stocks before taking their stand in the sector. First of all it is very essential to know that solar energy can not only produce electricity but can be used for heating and cooling. It is getting very popular with household utilities and not only rich but middle income people are also investing in solar energy. This has made the industry very attractive and it is on its ways to growth.

It is very essential to realize that around 75% of photo-voltaic installation in all over the word has been done in past two and half years and price of solar panel installation for US has been down by around 14% in 2012. The price of solar panel is slashed to half from what they were in 2008, which makes 100 times price decline from solar panel price in 1977.  This has been the reason that 21% more solar modules have been imported in second quarter of 2013 than second quarter of 2012. These are facts which indicate positive outcome and performance of solar sector now and in years to come.

Solar investment bonds have been very profitable for past years and investors have started realizing their potential to return value. Return on Investment (ROI) for solar power is far better than any other investment. Homeowner gain good return on investment when compared to investment in S&P 500 stock index in more than 25% states. In more than 75% states solar investments better returns than 30 year Treasury bonds. And return on investment from solar investment for 86% states are higher than 5 year Certificate of deposit returns. 

Credit Card- An Alternative to Hard Cash

Gone are the days when conventional banking was in fashion and everybody holding a pile of cash used to rush to the bank for account deposit and later used cheque books for withdrawals. In past three decades conventional banking transactions have transformed from cash withdrawals to card swiping using credit limits offered by financial institutions in form of credit card. But for our those buddies who feel lost when it comes to credit cards and have difficulty in choosing best credit card offers, credit card and its function would be explained in detail.

Credit card was invented for the kind of people who do not wish to carry a stack of cash with them all the time. These people can enter into any transaction and buy anything by just swiping their credit cards offered by a particular company, with whom this person has agreed upon to pay later. There is range of credit cards targeting different needs of different people. Some of the types of credit cards are:

Standard and Premium Credit Cards

These cards come with predefined limits set by the card issuer. The card issuer charges high interest rates if in case the card holder has not paid the particular sum which is required to be paid before specified date for amount spent by the card holder.

Premium credit cards on the hand charges high interest rate as they offer other benefits as well such as rewards point and cash-back facility on card usage.

Charge Cards

Unlike standard and premium cards, charge cards do not have predefined limits so one can spend as much as he wants but the amount has to be paid at the end of the period specified by the card issuer. This does not involve any interest rates but penalty is charged against late payments. Sometimes non-payments call for card cancellation and spending restrictions. One of the examples of best charge card is American Express credit cards.

Limited Purpose Cards and Secured Credit Cards

These cards are issued for specified thing that is one can swipe these cards on only those stores which are approved by the issuers. They are purpose specific cards and its examples are store and gas cards.

Secured Credit cards are targeted towards those who have no credit history. These individuals are supposed to deposit some security with the card issuer; security should be equal to the credit card limit. This is to ensure that it does not go as bad debts and there are number of best secured credit cards available.

Business Credit Cards

The term is self-explanatory, the business credit card is used solely for business purpose and individual can separate his personal transactions with the business one.

Some of the best credit card companies are Visa Inc. - (V), American Express Co (AXP), MasterCard (MA) and Discover Financial Network (DFS).

Merrill Edge Platform for Online Trading

Merrill Edge is a New York based company founded under the umbrella of Bank of America and provides online trading service which is responsible for providing information related to the Bank of America Merrill Lynch which is one of the leading financial service firms. Merrill Edge platform is also involved in assisting transfer of funds between Bank of America and Merrill Edge Investment firm along with customer services like Financial Solution Advisor and Merrill Edge Roadmap. The four main plans of company are; Retirement Plan further divided into Rollover IRA, Roth IRA and Traditional IRA, General Investing subdivided into Individual Investing, Join investing and Custodial Investing; Advised accounts and other popular accounts have Business Products, College Savings and Bank of America Products.

Merrill Edge online trading has a very simple policies and rules to follow such as no deposit requirement for opening account, zero commissions for mutual fund except for no load mutual funds, Stocks and ETFs ability to be traded for a small fee along with trading of options.  Traders holding a balance of $25000 in any form in account of Bank of America are allowed for zero commission 30 ETF trades. Clients who are honored with Platinum Privileges Program are also allowed for 30 ETF trades with no commission.

There are various mobile and desktop applications available for clients from the Merrill Edge Platform. This helps customers in online trading as they can easily access market analysis through Merrill Edge MarketPro. One can also be involved in online trading along with money transfer facility, trading of investment products and bill payments through mobile apps of iOS, Blackberry and Android.

According to Merrill Edge platform review the company has been granted with numerous awards and honors for its services and research. The company research has been ranked first by the Asia Best Stock Pricing analyst survey in 2012 whereas in the same year Wall Street rated BofA Merrill Lynch Global Research as second.

Simply Putting Discounted Cash flow Analysis

Whenever an investment decision is made, its pros and cons are always evaluated by the investor. Or in financial jargon you can replace pros and cons with risk and return associated to the investment. It could be any kind of investment such as investment in start-up businesses or acquiring some stocks of existing company but the main emphasis is on how much money is going to be made from this investment decision. The mostly used valuation technique is Discounted Cash Flow (DCF) method through which one arrives at the future cash flows expected from the investment. This valuation model’s main function is to adjust the future earnings with the time value of money which decreases year over year due to inflation. Discounted cash flow method use a discount rate to adjust projected cash flows for next five or ten years to calculate a Net present value of return on investment. Net present value (NPV) is derived by subtracting adjusted future cash inflows from future cash outflows.  The method could be used for analyzing any kind of investment.

One can ask the reasoning for discounting or adjusting the future cash flows. We will not go into the economical details but in a simpler way it could be said that the value of one dollar decreases over time that what if one dollar can buy two sweets today then next year most probably that one dollar could buy only 1 sweet. This is called time value of money. So let’s suppose if your investment yields $10000 today and $10000 in next two years then that $10000 earned today is greater than $10000 earned in next two years. So the earnings of next year need to be adjusted or discounted to get the present value of money. This is why discounted cash flow method is used as an investment analysis tool. However this asset valuation method like others also has some limitations but it is most widely used as one can only speculate or estimate the returns but could not derive accurate or actual value.