Do Insurance Companies Earn Money? How Much Profit, If Any?

Do Insurance Companies Earn Money?

We have discussed countless insurance firms here on Buy Shares In. These companies are usually a good bet for investors, but why is that? Are these companies actually profitable in a world where they seem to be handing out huge payments, getting sued and falling foul of legal restrictions and fines?

There’s only one way to find out. So, if you’re interested in Blue Chip stock like State Farm, then read on to discover if insurance companies make money and just how they do it.

How Do Insurance Companies Work?

The insurance industry was formed hundreds of years ago when merchants were provided with a way to safeguard their ship’s cargo against loss. They were transporting vast sums of goods across huge oceans and it wasn’t uncommon for these ships to get pirated or wrecked. Insurance was therefore a way for them to minimize risks and it’s the same today, only you can get insurance for everything you own against most eventualities.

You pay money based on a factor of risk determined by the insurance company and they agree to pay you a lump sum in the event that something untoward happens and you suffer major financial loss. It seems like a risky business for them to get involved with. After all, the money they pay out is far higher than the money you will put in and surely there will be enough claimants for them to run at a loss? Well, yes and no.

How Do Insurance Companies Make Money

Insurance companies have three major expenditures and all of the money they receive is pushed into one of these three areas.

The first is the pool of money put in standby to pay for all of the claims made against them. They have a fairly good idea of just how many claims there will be and how much will be claimed over the course of a year and they always have more than enough to cover these costs, as you would expect.

The second expenditure is marketing. Customers don’t just rock-up to their door and start paying them money. They need to spend to bring them in and there is a marketing budget for this. The final pool of money is used to invest. This means they operate much like a bank does, knowing that their actual operation may lose them money from time to time but that they will always have that investment cash to turn to and that it will continue to turn over a big profit.

Do Insurance Companies Make Money on Premiums?

How Much do Insurance Companies Make

Every year is different. Insurance companies that underwrite for home content loss and residential properties will suffer bigger losses in years where there have been particularly damaging storms. Generally, they will spend between $0.90 and $0.98 of every $1 they receive on paying for claims.

As you can imagine, once you add the marketing costs into this then there isn’t much left. In fact, most insurance companies do not make money from the very thing that they were setup to do. Their earnings come from the investments they make. If you give them $10,000 over the course of 30 decades and then pass away leaving $150,000 to your family, then it looks like a sizable loss on the surface, but that $10,000 could have been doubled or tripled fairly easily and once interest is added, it grows quite quickly.

All insurance companies need to very delicately balance the books in order to make sure that fraud and underwriting doesn’t leave them deeply in the red at the end of the year. This is where premiums come in. They will offer you a figure based on the condition of your health or your home, as well as the amount of fraud that they can expect to receive over the course of a year. This is a complex process and while it’s not an exact science, it means they can predict what kind of payments they are expected to make over the course of a year and even a decade and adjust all future premiums accordingly.

These premiums are changed individually and across the board. So, if you have been an insurance paying homeowner for 20 years without incident then you can expect your prices to come down. If you suddenly make a homeowner claim then you can expect future premiums to increase. However, factors such as a year of bad storms and an increase in fraud will have just as much of an impact on your premiums.

It might not have anything to do with you, but they still need to make money and so they factor these things in. That’s why you see so many claims about cases of fraud sending everyone’s premiums up. It’s not just a scare tactic, it’s actually happening and because they are only earning a couple of cents on the dollar they have very fine margins to work with and will do what it takes to maintain these.

So, Do Insurance Companies Make Money?

As mentioned already, this is a somewhat yes and no answer, but the same can be said for many big businesses. There is a strange trend for them to lose money and focus instead on growth. Amazon is known to lose money on countless products just so they can be the cheapest retailer of said products and they are also known not to draw major profits because they invest them back into the company. The same can be said for Google, albeit to a lesser extent.

Then you have the banking industry which runs on margins that are as fine (if not finer) than the insurance industry. After all, they may make money from credit card interest and overdraft charges, but when you factor in all of the money they pay out in interest on saving accounts and current accounts, it’s easy to see how those margins are so fine.

That’s because their goal is just to get you money and essentially reward you for giving it to them. They then take this money, invest it and try to make significantly more investing it than they will ever pay to you in interest. Insurance companies operate in a similar way, even if the setup is a little different.

The Darker Side of Wall Street and New York Trading

Drugs and Wall Street

When things on Wall Street are good, they’re very good. But when they’re bad, it’s not only the market that reacts.

There’s a dark side to Wall Street; traders are eager to see a return on their investments. And brokers feel an urgent need to perform, regardless of market conditions. Unfortunately, this pressure can cause both investors and professionals to suffer. Many turn to drugs, and still others determine that the weight of the job is too much to handle.

What really happens on Wall Street when professionals feel burdened by financial hardship? What lies on the darker side of Wall Street? Are drugs as prevalent on Wall Street as popular culture would have us believe?

Drugs are, in fact, commonplace on Wall Street. From the doctor-prescribed to the more illicit street drugs, mind-altering substances have become par for the course among, in particular, brokers.

Financial Crisis and Mental Health

Consider the Great Depression. Prior to the United States stock market crash in 1929, the world-wide suicide rate remained constant, at about 12.1 per 100,000 people. Over the eleven years which followed, that number jumped to almost 19.

The United States suicide rate across 100 cities was an alarming 20 per 100,000 deaths. In Davenport, Iowa, for example, the number was highest, at 50.3. Other nations fared no better. Austrian suicides claimed 34.5 of every 100,000 deaths. There was an immediate spike in the numbers following the market crash, and those numbers continued to increase in the two years which followed. It wasn’t until the beginning of World War II that they began to decline.

The Great Depression is only one instance of a decline in mental health due to financial crisis. The global financial crash in 2008 prompted an additional 5,000 deaths, each ruled suicide. Most were men.

Alden Cass is a psychologist who works primarily with Wall Street professionals. In 2000, he published a study detailing the mental health of retail brokers. His findings? Approximately 23% of subjects suffered major depression. Of these, most were men, and most had among the highest income levels within the field.

This is in no way meant to be an exploration of suicide on Wall Street. Instead, the purpose to citing these facts is to bring to light just how acutely the financial and professional stresses of Wall Street can impact a person.

Financial stability has a tremendous impact on mental health. And, of course, not all who struggle with job-induced stress opt to end their lives. Some, it would seem, do just fine. Others have found a different way to cope with hardships: substance abuse.

Substance Abuse on Wall Street

You may remember the story of Jordan Belfort, a former stockbroker. Known as the Wolf of Wall Street, Belfort’s memoirs became popularized by the film of the same name.

Belfort’s memoirs, and the subsequent film adaptation, were among the first attempts by a Wall Street broker to truly illustrate just how stressful the financial culture can be. In “The Wolf of Wall Street,” Belfort describes Quaaludes, in particular, as a common drug of choice during the 1990s.

The 1990s weren’t the beginning of it, though. Wall Street brokers have long been on the radar of the DEA. One of the most notable cases was in 1987; the Drug Enforcement Administration conducted raids of four Wall Street brokerages. That morning, 19 employees were taken into custody for possession and distribution of cocaine.

Drug use on Wall Street has changed over the years. While cocaine has been a drug of choice since as early as the 1970s, Wall Street itself has changed. While there are still actual and literal brokerage offices on Wall Street, the modern trader takes a more remote approach.

The younger generations have become increasingly interested in trading, in particular day trading. As a result, drug use has changed, too. Sure, there are still Quaaludes. There’s still cocaine. But now, Ritalin, Adderal and Ecstasy have entered the “market.”

Provigil, Zoloft, Xanax, Lorazepam and even Viagra are prescribed to brokers, simply to deal with the stresses of the job. Uppers are most common, while marijuana is frequently consumed to counter them – to “chill out,” as it were.

But why? Wall Street brokers hold the American dream job: a fast-paced career in one of the financial capitals of the world. And money. Lots of money. Why are stock brokers and other Wall Street employees still turning to drugs?

Drugs and Wall Street: A Necessary Evil?

Darker Side of Wall Street

Stress is inexorably linked to addiction. And in addition to being linked with addiction, it’s also partially responsible for addiction treatment failure and relapse. Loneliness can prompt drug use. Peer pressure can, as well. Experimentation is commonly associated with the onset of addiction. “Will this Adderall help me get through the day any more easily?”

Wall Street employees sometimes work in excess of 120 hours each week. They hold the responsibility of others’ fortunes in their hands. They frequently miss a work-life balance, missing children’s birthday parties and anniversary celebrations. They are at constant war with both their minds and their bodies.

As a result, these people turn to that which may make them feel. Feel what? “Anything,” some have responded. Alcoholism is frequent amongst Wall Street brokers. Eating disorders are, as well. Then, of course, there are the drugs.

A vast majority of Wall Street brokers are phenomenally intelligent people. In interviews, these employees have described their decision to turn to drugs, claiming that they’d grown accustomed to being in control. Once work on Wall Street began, they no longer felt that way. Drugs allowed them some to regain some semblance of control.

Older employees have struggled with addiction caused by a change in mental health as well. These workers have noted that there are many more regulations now. So many, in fact, that it’s a full time job just to keep up with them. They’re not doing more work and making less money.

Old and young, seasoned and inexperienced, Wall Street employees continue to turn to drugs to make the career more bearable. Unfortunately, as noted previously, drugs aren’t always the answer. The suicide rate on Wall Street is 1.5 times the national average.

The Changing Landscape of Wall Street

Today, not all Wall Street employees report to an office, where they may be offered access to mental and physical health services. The internet has spawned a generation of DIY and virtual brokers; many brokers today can be found camped behind their computers in the confines of their homes.

The change in landscape doesn’t mean a change in addiction, however. Young brokers report an increased use of Adderall and Ecstasy, among others. Wall Street is known for its party culture, but that extends to those who aren’t physically in New York.

And it likely won’t stop. As long as the physical and mental demands of finance take a toll on those who work in the field, the drug use and suicide rate among these people will likely remain very high. While brokerage firms have begun to assist in providing interventions and mental health care, these services do little. Drug use is, simply, socially acceptable on Wall Street.

Business Travel Tips: How to Keeping Earning on the Move (5 Top Tips)

Business Travel Tips

Whatever your business is, there’s a good chance you will be pulled to and fro from your place of work to destinations all over the world. So, make sure you pay attention to these business travel tips to ensure you can continue to work regardless of where you are in the world.

Business Travel Tip 1: Book into Business Hotels

It really does make a difference to stay in a business hotel. They tend to have better Wi-Fi and you have more reason to complain if this is not working. They also offer concierge services and have business rooms and conference rooms where you can access everything from printers to landlines, faxes and more.

In 2017, all of that might seem a little redundant, but there are still uses for it and it’s a good thing to have at your disposal. These hotels also tend to be devoid of families, which means there are very few little children running up and down the hallways interrupting you with screams.

Check with sites like Booking.com (owned by Priceline) to find the best place to stay. The speed of the Wi-Fi is also important. You might be called upon to have a video conference, you might want to catch the opening and closing of the New York Stock Exchange to make some trades. Whatever your reason, you need fast connections and the speed are never shown in the descriptions of the hotels.

For this you have to look at the reviews. Focus on the negatives first. If it’s a business hotel, as it should be, then the guests should have similar needs and if they are leaving bad reviews then you better believe they would mention slow Wi-Fi if that indeed was an issue.

If these reviews say that the issue was intermittent or if the hotel has responded to say it was a one-off, then contact them beforehand. Let them know that a high-speed connection is essential and that you expect a discount or full refund if they are not able to provide this. If they refuse, move onto another hotel.

Business Travel Tip 2: Bring a Dongle

You just can’t trust hotel Wi-Fi, even if there are no bad reviews. You don’t want to be left in the lurch because half a dozen teenagers are hogging the connection by uploading pictures to Facebook (NASDAQ: FB) and Instagram.

So, as a backup plan take a Pay as You Go Dongle. These devices will allow you to connect to relatively quick Wi-Fi wherever you are. They can get expensive if you use them too much so they should not be a Plan A. But as a backup plan they are perfect. Just be sure to top it up before you leave.

Business Travel Tip 3: Pack Well and Light

Business Travel

Yo can move much quicker if you pack light and don’t take any big suitcases. You should aim for carry-on luggage only, maybe with a toiletry bag. You have to be familiar with the specifics of these and of quality luggage in general. Shop well and you can save yourself time and money right now, as well as space and effort later on.

The last thing you want is to be forced to wait for the carousel to spit out your bag after you’re late for a business meeting, or for you to have lost an essential item amongst all of your clothes. We like to pack light and tight, making sure that toiletries have their own bag, documents have their own folder, and everything else is orderly and neat.

Business Travel Tip 4: Look for Premium Programs ad Schemes

If you can’t afford to wait in long lines and to join the meat factory that are airports, then look at the expedited travel programs. These range from “VIP” schemes at the airport that allow you to skip lines, to frequent flier programs that reward you for your globe hopping exploits. Everyone from EasyJet (LON: EZJ) to American Airlines (NASDAQ: AAL) offer these.

They may seem like needlessly expensive extras right now, but if they are within budget they are well worth it. When you’re tired, late and you just want to get tot he hotel or to a meeting, you’ll be thankful if you can skip the lines at the airport, just as you’ll be thankful when your frequent flyer miles mean you can take free business trips.

Business Travel Tip 5: Rest in the Air

Here at Buy Shares In we have done a lot of business travel ourselves. We’re used to working in many different countries, to trading stocks and CFDs in all time zones and to generally being workaholics. Take it from us when we say that the best thing you can do in the air is to put your phone away, put the laptop down and don’t do any work whatsoever.

If you force yourself to work in the plane then you’ll be more fatigued and stressed when you land. Not only will this make it harder to endure meetings and work when you arrive, but it will also increase your jet lag and generally make your entire trip unbearable. We find that the best thing to do is just to relax, maybe by watching a film or reading a book.

If you take your mind off work completely then you will be fresher when you land and better prepared for all of the days to come. If you work on tight schedules, you can’t afford mistakes and you have a lot of responsibility, then this could be crucial.

Finally…

Our final business travel tip is to try and find time to enjoy yourself. We know you are there to work, but you’re seeing the world, so it’s only right that you experience it as well. You could travel the world for years, seeing it all but not knowing anything about the cultures, the language, the way of life.

You have been afforded a unique opportunity that many would kill for. So, whether you’re traveling domestically or internationally, make sure you find time to enjoy yourself and to see what local life is like.

Health Care Reform Pros and Cons for the US Economy

Health Care Reform

Health Care Reform. What is it? Why do we need it? Do we actually need health care reform in the United States?

The Patient Protection and Affordable Care Act, also known as Obamacare, was signed into law by President Obama in 2010. Now, the current administration is looking to repeal it.

There are pros and cons to health care reform; just as Obamacare has its benefits and its downsides, health care reform will impact the American population and our economy. So how, exactly, did the Affordable Care Act change the economy, and why are so many looking to do away with it?

The Patient Protection and Affordable Care Act

For a great many years, the United States government has struggled to devise a way to make Universal Healthcare an option for Americans. As one of only a handful of developed countries not covered under such a universal plan, lawmakers have spent many days in debate over how to make insurance accessible to everyone.

Health insurance products, prior to the ACA, had been at the discretion of the states. In Massachusetts, for example, MassHealth existed to ensure that all individuals were covered by health insurance. Those who qualified under specific income guidelines were granted the opportunity to take advantage of public health insurance. Those making above that income level could purchase private insurance, or be subject to a tax penalty.

Obamacare worked in much the same way. Private insurances were consolidated and purchased through the Marketplace. Those who chose not to purchase insurance, and who could not qualify for public assistance, were fined a penalty on their federal taxes.

So what was the result? Simply put, the result was a lot of uninsured people. The premiums of Obamacare, in its beginning stages, were just unattainable for many families who didn’t qualify for public aid. Medicaid was expanded in several states, but in others it was capped and made inaccessible. In short, people opted to pay high emergency care and as-needed health care costs in lieu of paying the high deductibles and premiums offered by the ACA.

Health Care Reform

Obamacare

The Affordable Care Act did have its benefits to the American economy. First, it caused an increase in consumer spending. Raised prescription drug costs and higher insurance spending contributed to this. Second, there was a decrease in state-level spending on healthcare. This, in turn, freed up money to be used against the national deficit. The Congressional Budget Office projected that, if left in place, the ACA would reduce the Federal deficit $16 trillion over ten years.

However, it can’t be left unsaid that Obamacare did leave many Americans uninsured. The current administration has referred to Obamacare as a “disaster;” while that may or not be so, there are certainly areas which could use improvement.

There have been at least five revisions to the proposed repeal, and the most significant point of note is this: under the new proposed plan, the administration would cut back considerably on Federal funding to Medicaid and Medicare recipients. This would leave approximately 19 million adults uninsured.

This spending cut, however, would free up state money to be utilized elsewhere. It would also theoretically increase consumer spending. That is, if those uninsured choose to pay the costs of emergency healthcare and prescription medication. There’s always the risk that those individuals may not seek medical attention at all.

Obamacare certainly has provided benefits to the economy. And the proposed changes have, thus far, fallen short. So what’s wrong with Obamacare, and how can lawmakers truly fix what’s currently in place?

The Trouble with Obamacare

The first problem with the Affordable Care Act is that the plans were expensive. While the costs of those plans were designed to decrease over the years, that fact did little to assist people who were forced to purchase insurance plans from the Marketplace. The choice was simple: pay a high premium, or pay a hefty fine.

The fines themselves were confusing. Depending upon family size, income, and other factors, each America was assessed a fine. Or a percentage of AGI. Or an amount that he or she was responsible to pay. The list goes on, and, like much of the US tax code, it may take an attorney to figure out.

Signing up for Obamacare was meant to be easy, but in fact was quite complex. New insurance agents were hired to assist, but often they were unfamiliar with the rules of the ACA. At the launch of the Marketplace, the website did not work at all. Confusion about plans and how to sign up caused many Americans to miss the deadlines.

For those who could afford the Marketplace plans, Obamacare was a great program. However, most of those individuals were already enrolled in company insurance plan, and the ACA just muddied the insurance process. Plans were cancelled and individuals were forced to re-enroll in different, sometimes inferior coverage.

The Affordable Care Act initially existed to provide all Americans with health insurance. And in fact, that likely would have been the result if left in place. But there were too many short-term problems with the program which were insurmountable to many Americans. This leaves the current administration under a lot of pressure.

What’s Next for Health Care Reform?

Affordable Care Act

Recently, President Donald Trump’s newest plan to replace Obamacare was voted against, and legislators are left, once again, at ground zero. Democrats and Republicans are in stark opposition, as Democrats want to leave Obamacare in place while the Republican Party seeks to repeal the law.

The problem for many is that a repeal of the law would be just that. A repeal, with no new plan in place as of yet. Opponents of the repeal see this as dangerous: Obamacare was initiated without enough planning, shouldn’t a new plan be fully developed and ready to replace the ACA?

Regardless of any lawmaker or American’s stance on Obamacare and the proposed health care reform, it’s clear that there are benefits to Obamacare and that there would be certain benefits to refining the law.

Done right, a universal healthcare plan such as the ones proposed by both parties would help to decrease the national deficit. Money would be freed up at the state level to be added to other programs. Consumer spending would increase as more Americans bought insurance and paid for health care. Unfortunately, it’s up to lawmakers to achieve all of these goals while still keeping health care accessible to all Americans. It’s not an easy task; hopefully the Trump administration can work together to find a solution.

The Stock Market Crash of 1929: How, Why, Can it Happen Again?

The Stock Market Crash of 1929

We at Buy Shares In like to give you the most recent stock market information. But sometimes history is worth taking a look at, too. Many of us think of the stock market crash of 1929 and the ensuing depression and wonder if history could repeat itself. In short, no. But if there were to be another stock market crash, there would be several similarities.

To determine if a crash similar to the crash of 1929 could happen today we need to first examine the root causes. It’s hard to place the blame on any one single factor. Buying stock on credit, inexperienced traders, and inflated stock prices all combined to create a volatile market that was primed for the bottom to fall out.

The Stock Market Crash: What Happened?

The 1920s, often known as the “Roaring 20s”, were a period of perceived prosperity and financial success in the United States. The rapid proliferation of industrial techniques and technology caused a sharp rise in production. With output soaring, businesses were faced with the challenge of attracting buyers in a competitive market. The answer was the rise of installment plans. “Enjoy while you pay” became a mindset of the American consumer.

Following World War I, the celebration of what was perceived as the end to global conflict increased consumer confidence. More and more individuals began investing in the stock market. Many saw the steadily rising market as a way to gain quick income. Banks and brokers exacerbated the problem by loaning individuals money to invest or by allowing them to buy additional stocks on the margins of held stock.

As stock prices continued to rise, investors saw opportunity and invested more and more, eventually leading to a situation where the value of a company’s total stock dramatically exceeded the actual value of the company. Unfortunately, the introduction of installment plans and the rapid rise in purchasing power meant that most families had, by the end of the decade, made the purchases they wanted to make. The result was a consumer economy that was saturated with goods. The boom had run its course, but investors continued to pump money into the market, inflating the bubble.

A Self-Correcting Stock Market

Governmental policies did little to stifle the ever-growing problem. Conservative presidents Warren G. Harding and Calvin Coolidge were hesitant to stand up against big business. Prosperity and strong economic times favored both presidents. Both believed that action to slow down what was seen as business growth would be seen as holding back the success of the free market and the national economy.

Inevitably the market had to correct itself. The problem with investing borrowed money was that when the market began to fall, investors had little choice but to sell their shares before the price dropped. This caused a massive selloff when the market began its largest fall on October 29, 1929. So many investors were trying to sell off their shares that the tickers of the time were unable to handle the volume. Many were reported to be delayed up to two hours, adding to the confusion and panic.

Could the crash happen again? Look at the situation which led to the crash of 1929 and compare it to today’s. The 1920’s were a time of increasing dependence upon credit, an inflated market, individual investors, and weak governmental regulation.

Could Another Stock Market Crash Happen?

A look at today’s dependence on credit gives a very similar image to that of the 1920s. Nearly every good or service can be paid for on credit. There are major credit cards, department store cards, fuel cards, etc. Add to these automobile loans, personal loans and mortgages and you begin to see a very similar image to that of the 1920s.

The largest difference between today’s investor and the investor of the 1920s is the rise of day trading. Today, the Average Joe can open their laptop and within a few clicks make whatever moves they want. While convenient, this has the potential to be catastrophic. Not all mobile investors are trained in the ups and downs of the market. In the face of what could be a short-term downward slide, there is potential for day traders to contribute to a massive sell-off.

Stock exchanges have put in place processes to help limit the amount of emotional or fear-based trading. Circuit Breakers, or pauses in trading designed to allow traders time to collect themselves are a great example. These pauses will undoubtedly have some effect on trained investors. The question is whether a break in trading will alleviate the panic in an untrained investor sitting behind a laptop. In today’s global economy, investors could simply sell their shares on a different exchange, expanding the problem.

Stock Market Education is Crucial

Educated investors know the best way to weather a downward slide in the market is to stay the course. For example, following the record loss of 777.68 points on September 29, 2008 the market bottomed out on March 6, 2009 at 6,443.27. In March of 2013 the Dow reached record levels previously set just a year before the 2008 drop.

This shows that the market is very resilient and has the potential to bounce back rather quickly in today’s world. The problem is that a large number of Americans are in or nearing retirement. These individuals have much more to lose if the market tanks and does not recover rapidly.

Finally, we have to examine the market to see if it is inflated. We are currently in the 2nd largest bull market in history. Since March 2009 the market has gained 14,591 points, or 232%. If this is indeed an inflated market, it will correct itself. The reaction of investors will determine if the downward movement in the market is merely a natural correction or a crash.

So, could another stock market crash happen today? Probably not on the same scale as the crash of 1929. Our market is very resilient, and it would be difficult to simulate the events of 1929.

But it’s extremely important that we educate ourselves about the stock market. Knowing when to sell and when to hold is only a small part of it. Investors also need to be mindful of avoiding panic. Such reactions only serve to make a falling stock market worse.

Dropbox Stock: Anticipating Stock Price and IPO

Buy Dropbox Stock

We live in quite a collaborative world. In our day to day lives, it’s not uncommon for us to share calendars, email pictures, send financial reports and even sign contracts using online collaboration software.

Of these programs, Dropbox has become one of the most widely used. Of course, some people opt for the free services provided by Microsoft One Drive or Google’s sharing applications. But Dropbox has long been a go-to for many people because of its simplicity and its security.

It’s made news that Dropbox may soon be issuing an IPO. When we learned this, we wanted to find out if Dropbox stock would be worth the buy. Here’s what we learned about the company and about its potential should the organization go public.

Can you Buy Dropbox Stock?

As of the time of this post, you can’t buy Dropbox stock; Dropbox is a privately owned company. The company is based in San Francisco, California, and was founded in 2007 by MIT students Arash Ferdowsi and Drew Houston. The premise behind the service is simple. It looks and acts like a memory card or a folder on your computer desktop, but it’s accessible from anywhere. Using the cloud, Dropbox registrants can share and access files from any internet enabled device.

The company has an estimated valuation of about $10 billion dollars, and it’s reached this success by maintaining an outstanding reputation for security. While Dropbox has weathered much criticism for data breaches and even password leaks, it’s managed to come out ahead in the end against competitors such as Box (NYSE: BOX), Google Drive and Mozy (NYSE: EMC).

Cloud computing has become an essential tool for both personal and business use, and more and more consumers are turning to secure services like Dropbox to protect and share information. While you can’t yet buy Dropbox stock, the service is expected to go public later in 2017.

When Will Dropbox Stock be Available?

Dropbox IPO

In 2016, Dropbox decided to delay its plans to issue an IPO. Technology, in particular cloud based computing, didn’t do well in the markets and Dropbox CEOs did not want to fall prey to a lousy market. But the company has announced that it will likely go public in the later months of this year.

In 2015, Box issued an IPO, and was at that point valued at about $2.4 billion. Since that time, the competitor has seen shares increase from the IPO price of $14 per share to its current price at around $19. But Box is now only valued at about $2.3 billion, a decrease from its 2014-2015 valuation.

Dropbox has also enlisted the financial backing of many venture investors. The company has raised $600 million from the likes of JP Morgan, Benchmark and Salesforce Ventures. The company has reported that its cash flow is positive, and despite being a free service, the company does make a little bit of cash through its storage programs. Its individual accounts cost users $10 per month for 1 terabyte of storage. Dropbox also offers corporate plans at a cost of $150 annually per employee.

Likely Dropbox Stock Price

Because Dropbox does not disclose its financial information, it’s difficult to predict what the Dropbox IPO will cost. Furthering the challenge of this prediction is that the company has very few competitors with a similar business structure.

For example, one Dropbox competitor is Google, with its Drive service. Google, of course, went public in 2004 with a price of $85 per share. But Alphabet wasn’t solely a cloud storage service. Similar to Google, Microsoft’s OneDrive is just one of many products offered by the company.

To determine a likely Dropbox stock price, it’s easiest to look at companies which are similar in services offered to Dropbox. At its IPO, share in Box were available at $14. Mozy is owned by parent company EMC. That stock went public in 1986, so to compare EMC with Dropbox would be like comparing apples to oranges. Time will tell what the Dropbox stock price will be, but analysts suggest it will be in the $20 range. This is in keeping with other technology offerings such as Box and Snapchat.

Will Dropbox Shares be Worth it?

The technology market is highly competitive and highly volatile. As mentioned, 2016 wasn’t a great year for technology stocks, and although 2017 is looking better, more investors are turning away from the industry.

Because of newly extended credit and because the company’s cash flow is in good shape, Dropbox will likely do reasonably well following an IPO. However, it’s important to note that Box, before its IPO in 2015, was also in good financial standing. Box stock has remained stagnant at best.

The key for both Box and Dropbox is to expand services. The companies may never be in direct competition with huge names in the industry like Google and Microsoft (NASDAQ: MSFT), but by increasing enterprise solutions and expanding services offered, both Dropbox stock and Box stock may see share prices rise. If Dropbox can succeed in offering more various services and retaining its reputation as a secure cloud storage solution, we think Dropbox shares will be worth it.

If they are going to launch their shares with an IPO, then they may just do that. After all, they know that they will be entering a competitive market and they know that they need to make an effort to standout. So, before you think about buying Dropbox shares in the future (if indeed they do have their IPO) then be sure to focus on any improvements they have or haven’t made.

Dropbox Stock Symbol

Dropbox Stock Symbol

When Dropbox does pull the trigger on the IPO, you’ll find the Dropbox ticker symbol and information pertinent to the stock on the Buy Shares In website. We obviously can’t yet quote a Dropbox stock price or give you information about the Dropbox stock symbol, but check back frequently. We will update our information as it comes available.

If you’re interested in learning about other tech stocks, be sure to check out our investment guides linked in the header above. Here, we’ve provided information about companies such as Instagram and Twitter (NYSE: TWTR) as well as a general overview of tech stock.

Also, be sure to check out our information about trading platforms. We cover a wide range of options for investors in our unbiased reviews. These reviews will show you how to buy shares in Dropbox or other companies.

Chinese Stock Market Crash: How, Why, and Can it Happen Again?

Chinese Stock Market Crash

Ranked by GDP, China is one of the biggest economies in the world. And according to Bloomberg, Forbes and US News, it’s expected to surpass the United States within the next several years.

But, as solid an economy as the Chinese have enjoyed, it’s not been unwavering. Back in the mid-2010s, the world watched the Chinese stock market crash, and economies across the globe were concerned, to say the least.

Why did the Chinese economy falter as it did? Could it happen again? Let’s look at what happened, and the probability that the Chinese stock market will experience a similar occurrence in the future.

The Chinese Stock Market

The Chinese stock market is comprised of three major exchanges. These are the Shanghai Stock Exchange, the Shenzhen Stock Exchange and the Hong Kong Stock Exchange.

These markets operate a bit differently than those in the United States or elsewhere in two ways. First, the companies listed within the exchanges used to be largely state owned. That means that the government had a substantial say in what happens to the markets.

The second way these markets differ is that investors treat them differently. Historically, the Chinese stock markets have offered a bit of a “casino” for investors, and although that’s becoming less and less the case, it’s an important difference.

Retail investors comprise around 85% of Chinese stock market activity, as opposed to about 25% in America. Chinese households prefer, instead, to invest in banking accounts and other assets.

So, to summarize, the Chinese stock markets and the businesses which are listed therein have been historically state owned. If the market appeared to be dipping, the Chinese government could easily inject money into the economy to bail their companies out.

The Chinese Stock Market Crash

Chinese Stock Exchange Crash

Up until 2015, the Chinese stock markets were impacted very little by other aspects of the economy. As a result, a stock market bubble was created as new investors began to enter the markets. Even businesses which had previously never traded were now enthusiastic about investing, and the bubble continued to grow.

Until it popped. On June 12, 2015, the Shanghai Stock Exchange lost a full third of its value, and the smaller exchanges experienced even more dramatic losses. The Chinese government worked frantically to prevent an economic catastrophe. They fed money to brokerages and compelled them to buy stocks, while ordering companies not to sell shares.

Meanwhile, markets across the world experienced panic as a result of this seemingly stable economy experiencing such a crisis. The Chinese economy was failing; how would this impact imports and exports, or the economies of other nations? Investors worldwide began to show signs of hesitancy.

The Chinese government’s bailout worked for a short time. The markets appeared to rebound a bit after the initial plummet, but over the next several months it saw more losses.

Chinese Stock Market Recovery

Chinese Stock Market Recovery

The Chinese government faced difficulty in 2015. Where government-owned businesses had once constituted the majority of traded stocks, now more privately owned companies were listed on the exchanges. With no way to bail these companies out, China was left facing a failing economy with no remedy.

In the months following the June 12 crash, Chinese stock markets remained turbulent, but then in early January of 2016, the markets were halted twice due to a 7% fall. On March 16, the Chinese stock market reached a 15 month low, further worrying both Chinese and global investors.

As stated, the Chinese government has a history of injecting money into the economy to ensure that the market remains stable. Following the low of March 16, the government did just that. Once again, a state backed agency offered loans to brokerages, assisting in balancing the teetering economy. Slowly, investor confidence rose again, and over the next several months, the Chinese economy was once again regaining in strength and declining in volatility.

Chinese Stock Market Crash: Can it Happen Again?

In short, the answer is yes. The Chinese stock market is wildly volatile, and booms and busts are not at all uncommon. In fact, the Chinese economy has very little to do with the stock market. It’s not uncommon for the economy to be suffering in terms of GDP or other factors, while the markets are booming. Likewise, the Chinese economy can be on the path to surpass the United States while the stock market is in trouble.

Because of this, investors don’t pay the same type of attention to the numbers as investors in the United States or other economies. They invest with very short term memory, and it’s likely that another bubble and subsequent crash will occur.

Secondly, the Chinese government has a huge hand in the stock market. A majority of stocks listed on, as an example, the Shanghai Stock Exchange are at least in part government owned. If the stock markets start slipping, it’s very easy for the government to issue a bailout. In the past, the state has attempted to change regulations to encourage more private investors, but haven’t been successful.

Finally, the Chinese stock market is heavily influenced by governmental rhetoric. The United States experiences this to some extent. As government leaders issue statements about the economy, investors react. But as a whole, US investing law remains unchanged. Chinese investors suffer a slightly different pattern. The government frequently issues statements which change policy entirely, and this causes investors to panic as they attempt to interpret the new rules.

Chinese Stock Market Crash: Speculation

Chinese Stock Market Recovery

There are other issues affecting the stock market which are worth a mention. High numbers of speculative investors as compared to the number of long term investors is a factor. The lack of reliable information about the companies listed within the exchanges is another. There is also a perception of the Chinese stock market being an avenue to “get rich quick.” Many investors have become very wealthy by playing the stock market, and there’s little incentive for long term investors.

So yes, the Chinese stock market can crash again. And it’s likely that it will. The Chinese government is sending its investors conflicting messages. While it claims to seek to create long term investors, it’s still too thickly involved in the markets to cause this to happen. Once the government lets the market drive itself, perhaps it won’t be as erratic.

What is Mock Stock Trading?

Mock Stock Trading

We’ve gotten some questions over the past few days about mock stock trading. We’d be happy to answer your questions, but it’s actually a topic that we’ve covered quite a bit here at Buy Shares In. So we’ll keep our answers short and sweet, and direct you to a few other resources that we’ve made available to you.

What is Mock Stock Trading?

Mock stock trading is pretty much exactly what it sounds like. Mock stock traders can trade the big names on the markets like Twitter and Microsoft, but use virtual currency to do it. Mock stock trading is a great way to learn how investment works before you put your own money at risk.

Is Mock Stock Trading Safe?

Yep! Mock stock traders use currency like points, virtual money or physical items like chips to buy and sell stocks. There are hundreds of free programs available online for users to try, like Plus500 and Trade.com. Each have a demo account that investors can open; they’ll use virtual money to build a portfolio and then buy and sell as if they were real stocks. There’s no risk to you, so feel free to spend all your virtual cash!

Why Should I Do Mock Stock Trading?

There are lots of good reasons to open a mock stock trading account. It’s an excellent way to learn the markets, first of all. Like we mentioned, there’s no monetary risk to you and you can trade thousands of virtual dollars. It’s exciting to see how much money you would have made if you’d bought into that IPO last year.

Another reason is to teach your kids about the stock markets. There are mock stock trading programs like Student Stock Trader that are marketed and designed for kids. It’s never to early to learn about the markets.

Finally, it’s just plain fun! Most of the free stock trading games you find online include the option to create your own game. Who needs an NCAA bracket when you and your buddies each have a killer virtual stock portfolio?

So How Do I Do It?

What is Mock Stock Trading?

This is the point where we direct you to other sections of the Buy Shares In website. We’ve done tons of reviews and have even played a few games ourselves, and have compiled them all for you on this site.

HowTheMarketWorks is a good place to start if you want a fun little game to play with your friends. The game is simple to set up, and even kids can play.

If you want a game to play that’s exclusively designed for kids, try Student Stock Trader or take a look at what we’ve got to say about stock market worksheets.

If you’re looking for a few reviews of programs we did and didn’t like, we’ve got a few of those, too. We covered a few stock market simulation games, as well as our more recent post about the best free stock trading games.

Take a look around, and let us know if you have any more questions! Have fun with your mock stock trading!

What is Premarket Stock Trading?

Premarket Stock Trading

Every now and then, we get a few questions about stock market terminology. The most common question that we’ve heard lately is “what is premarket stock trading?” Well, we’re happy to oblige! Here’s a summary of premarket trading, and its potential benefits to you.

What is Premarket Stock Trading?

Premarket stock trading is pretty much precisely what the name implies. It is all trading that occurs before the markets open. The New York Stock Exchange, for example, is open from 9:30 in the morning until 4:00 in the afternoon. So, premarket trading on the NYSE is anything that happens before 9 in the morning.

Generally speaking, most premarket trading happens between around 7 or 8 and 9:30 in the morning. And it’s important to note that not all brokerages will allow it. So because the markets aren’t yet open and not everyone will participate, there’s usually not a whole lot that goes on during premarket hours.

Should you Participate in Premarket Trading?

Premarket trading can be extremely beneficial to investors. There are a number of reasons for this. The first reason is that companies often release quarterly earnings reports in the wee hours of the morning, so an investor may be able to take advantage of any indicators that the reports may provide.

Secondly, the same applies for news. If an acquisition, a natural disaster or another event which could impact the markets occurs while the markets are closed, premarket trading will allow investors to jump on a transaction, rather than wait until the markets open.

Finally, there are a lot of people who make a living analyzing the stock markets. They’re studying market trends, economic indicators and other factors which could influence your transaction decisions. Reports of those economic indicators are released at 8:30 in the morning, an hour before the markets open. Premarket trading will allow you to use this news, and give you a head start on trading for the day.

How to Participate in Premarket Trading

Premarket Stock Trading Hours

As we mentioned, not all stock brokers will allow you to participate in premarket trading. Some brokers will restrict transactions to regular trading hours only, so make sure you do a bit of research with your broker before you decide you want to trade during premarket hours.

If you’re using an online platform or an app on your device, you should read the fine print before you sign up. But if your broker or app does allow it, it’s quite simple. Just designate the transaction that you’d like to perform, pay any applicable fees, and you’re set.

Premarket Trading Hours (US, UK)

Obviously, the premarket stock trading hours will differ from stock market to stock market and from timezone to timezone. There is no set time, as the premarket hours in one country could be the trading hours in another.

To see the exact hours for yourself on markets like the London Stock Exchange, as well as China Stock Market, just pay a visit to our Stock Market Trading Hours page. This will tell you when the stated hours are for each market; when the holidays and non-trading days are; and more. From this you can work out when the pre-market trading hours will be.

You can also pay a visit to the main stock market pages. All major stock exchanges have these, from the US markets to markets in Pakistan and Australia. As an example, the NYSE main page can be found on NYSE.com.

The Downside to Premarket Trading

It may sound pretty cool to be able to trade before the stock market wakes up. But as we mentioned, the markets are pretty thin, and it may actually work in your favor to wait. If you decide to do it anyway, be sure that your transactions are based on research and not following the lead of other investors.

The biggest reason you might have to wait is that when those earnings reports are released, thousands of other investors will decide that they either do or don’t like the results. They’ll be quick to make snap decisions, and buy or sell their stock without having fully comprehended the scope of the report.

So in summary, premarket trading is trading that occurs before the markets are open. Is it beneficial to you? Maybe. But you’ll need to make sure you put your research into it first, and avoid jumping to conclusions before you make that trade.

Tesco Finance: How this Big Chain is More Than Groceries

Tesco Finance

You know the name Tesco. It’s the biggest grocery store in the UK in terms of both revenues and market share. And if you’re not familiar with it, we suggest you check out our TSCO investment guide.

But what you may not know is that Tesco is more than just a grocery store. It’s the largest retailer in the UK, and a few years back it was stated that one in every seven pounds spent was spent at Tesco.

So what’s contributed to Tesco’s success? How did Tesco finance become such a popular investment? Let’s take a look at how the company grew from a tiny military surplus stall to the multi-billion retail giant that it is today.

Tesco’s Early Years

If you’ve read our Tesco investment guide, you’ll have a bit of background information about how the company was begun. Jack Cohen opened a little shop in Hackney, and as his sales grew, he expanded to own several shops. Soon after, he opened a few stores in the London area, and Tesco was created.

The name Tesco was formed when Cohen ordered a shipment of tea. The supplier’s name was T.E. Stockwell, and Cohen combined the letters T, E and S with the first two of his last name. At that time, Tesco was a retailer of army surplus materials, dry goods and tea. But as Cohen reached higher and higher profits, he began to sell groceries and opened several superstores.

Tesco Finance Today

Tesco PLC has come to rule the market in the UK by becoming more than just a one hit wonder. Originally opened as a grocery store, the company now claims quite a few subsidiaries. Diversity in the products that it offers has allowed TSCO to steer a straight course through an otherwise turbulent market.

One subsidiary, Tesco Lotus, is the company’s network of superstores in Thailand. In 1994, Tesco opened its first store in Thailand as a test market. The store was successful, and in 1998, Tesco Lotus was created. There are now 1,400 stores in the Lotus market.

The United States has Straight Talk, and the UK has Tesco Mobile. You may be familiar with how Straight Talk works. Users purchase a phone at Walmart, and the phones operate using AT&T and other towers. Tesco Mobile is similar in structure, and is also a subsidiary of Tesco.

Now, to understand the third subsidiary, think in terms of the Target REDCard. Target offers customers credit or debit cards. The cards can be reloaded online or at customer service, and used in the store to get discounts on Target products. Like Target, Tesco has a banking product. Tesco Bank offers a debit card for consumers, and also offers savings accounts and credit lines.

Tesco owns a few other subsidiaries as well. Dunnhumby is a market research company based in the UK but with a presence in the US. Tesco also owns subsidiaries for each of its markets in Ireland and Turkey, and owns Spenhill, its development branch. Such a diverse portfolio of subsidiaries has certainly contributed to the success of Tesco finance, and has created a brand that’s much more than just a grocery store.

Tesco Stores

What is Tesco Finance?

Along with its subsidiaries, Tesco finance relies on the success of the types of Tesco stores that have been launched. Tesco Extra is a hypermarket, much like a Super Target (NYSE: TGT) or Super Walmart (NYSE: WMT). Tesco Extra locations offer groceries as well as electronics, clothing and other products. The larger locations also offer services like opticians, photo services and gas stations.

Tesco also owns smaller locations; grocery stores with a few extra services. These locations don’t generally carry as many non-grocery products, but are still larger than Tesco’s Express and One Stop locations.

Tesco does offer an internet shopping service. Tesco Direct is the online extension of its stores, offering the apparel and household items available in its retail locations. There’s also the option to “pick up in store” for both the household items and grocery products.

The company’s got quite a broad range of stores, and that’s allowed them to generate profits through the sale of fuel, household goods and financial products. Having a one stop shopping business model allows Tesco to provide consumers with a perception of convenience. That is to say, if you can buy your milk, fill up your gas tank and subscribe to cell service all at the same location, why would you go anywhere else?

The Outlook for Tesco

In recent months, Tesco has reported a 30% rise in operating profit, but its shares are quickly falling. Inflation and accounting scandals are beginning to impact the company, and consumers are experiencing significantly higher food prices.

With that said, Tesco has always had a bit of a bizarre psychological approach to marketing. The company positions products within its stores to encourage impulse buys. But at the same time, Tesco reminds shoppers that in order to save money, they should skip the impulse buys. You can interpret this to mean one thing: Tesco finance is largely dependent on impulse buys.

You’ve probably heard someone joke about it before – it’s easy to walk into Walmart for a loaf of bread and walk out with a loaf of bread, a trash can, some motor oil and a rifle. It’s the same way with Tesco shopping. But UK consumers are finding it increasingly necessary to clutch their wallets just a little more tightly, and to not spend as freely on fuel and groceries, much less impulse buys. Tesco may soon see this frugality affect its bottom line.

So is it a good time to buy shares in Tesco? Honestly, it’s got a lot going on right now. It was recently hit with a fine of £129 million plus additional costs after a 2014 accounting scandal. We mentioned inflation and how that could hurt the company’s profits. And the UK based company will be more deeply hurt by recent political changes than competitors Aldi and Lidl simply due to its location.

But as we noted, Tesco is still seeing its profits rise, and the majority of its competition will face similar struggles with the economy. Overall, we think that with its huge market share and the persistence of its rising profits, Tesco remains a good buy for investors.