How to Invest in Insurance Companies on the Stock Market
Insurance is big business throughout the world. In 2008 ING, the world's largest insurer did $124.6 billion in annual revenue. If you would like to capitalize on this business then here are a few ideas on how to invest in insurance companies on the stock market.
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Instructions
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Open up an online brokerage account. The three companies that stand out are E-Trade, Ameritrade and Scott Trade, which have all been around for more than 10 years. As of 2009 the minimum to open up an account is around $500. Other companies worth looking at include Think or Swim, and OptionsXpress.com. Each of these companies is a member of the financial industry regulatory authority (FINRA) and the security investor protection corporation (SIPC). These organizations help to regulate brokerage firms and keep them accountable.
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Find an insurance company to invest in. Below is a list of a few of the largest insurance companies in the world that are worth looking at, along with their ticker symbols:
AXA (AXA) is a French-based company and is the largest in the world because the French save a lot of their money via insurance policies.
ING (ING) is a Dutch company and as of 2008 ranks as the 6th largest insurer in the world.
Aviva (AV) is a UK based company and is the 5th biggest insurance company in the world.
Aetna (AET) is an American company and deals in health care, group insurance and pensions.
Well Point (WLP) is another American company and is the biggest in the United States conducting business in all 50 states through the Blue Cross and Blue Shield brands.
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Determine the trend of the market. When the S&P 500 is above the 200 day moving average the stock market is in an uptrend and only then do you want to purchase these stocks. When the market is below the 200 day moving average you should stand aside until it resumes an uptrend.
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Determine the trend of the stock. Look for a stock above its 200 day moving average. If it is below it wait until it crosses above it to make the purchase.
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Use fundamental analysis. An easy way to analyze a stock is to use the website at Investors Business Daily. It's an inexpensive solution that costs only $20 a month as of 2009. When you type in the ticker symbol of the stock you wish to analyze it will give you a grade from A+ being the best to E being the worst. This is based off of William O Neil's proprietary system detailed in his book How to Make Money In Stocks. Ideally you should only purchase a stock when the market is above the 200 DMA, the stock is above it's 200 DMA and the stock is at least a B+ or higher.
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