On May 6, an apparent erroneous trading error caused the Dow Jones index to lose about 1,000 points, or nearly 9-percent of its total value, in about only a half an hours time.

During that time period, $862-billion was lost, with most of the capital being recovered in the next trading day when security values were pushed back up to prices better reflecting fair value.

The free fall was caused by an apparent trading error, that was made by an equities trader who mistakenly entered a “b” (indicating billion) for a futures trade on the Procter and Gamble stock (NYSE:PG), instead of the correct “m” (indicating million) button.

Read the full story

As the economy begins to pick up, more and more people begin to consider equities to get a higher return on their money. After knowing today that stock values have trended upwards with significant gains after they hit rock bottom about a little more than a year ago with the < !- google_ad_section_start ->credit< !- google_ad_section_end -> crunch, many people constantly say they should have purchased stocks. The truth is, no one could have predicted the now apparent upward trend, or the price floor, and even a close estimate of the time frame for the equities to rebound.

The truth is that the average investor would not bare the risk of putting all of their eggs in to one basket, like purchasing Apple (NASDAQ:AAPL) shares in July 2009 when they were trading at only $135 per share (though clearly a discount, still expensive), compared to $230 as at March 27, 2010. But that doesn’t mean the small investor can’t benefit from the hot equities market today, they could, by considering < !- google_ad_section_start ->mutual fund< !- google_ad_section_end ->s.

Mutual funds provide many benefits that are often over looked, misunderstood, or not even really known by the average investor.

There are two types of risks in purchasing stock, systematic risk and unsystematic risk. Systematic risk is simply the market risk, whereas unsystematic risk is firm specific risk. By having a small portfolio of less than 15 stocks, you are exposed to significant amounts of unsystematic risk. The market does not provide a risk premium for unsystematic risk because it can be diversified away. By adding about 30 stocks to your portfolio, much of the unsystematic risk disappears; adding more stocks only marginally reduces unsystematic risk, but usually about 30 stocks in a portfolio provides sufficient diversification to serve as a hedge to unsystematic risk. Since mutual funds are invested in many securities (often hundreds of stocks), you gain the added benefit of instant diversification, and optimal asset allocation, which instantly diversifies away unsystematic risk.

Read the full story

Swedish-based telecom network maker Ericsson has announced it will be investing $1.5 billion over the next five-years in South Korea to build a research center to create fourth-generation network equipment.

Under the plan, Ericsson will employee a total of 1,000 people at its South Korean-based unit, up from just under 100 current employees.

Ericsson CEO Carl-Henric Svanberg announced the plan today during a meeting in Sweden with South Korean President Lee Myung-Bak.

The new 4G wireless technologies will be sold around the world to telecoms.

PepsiCo has just announced a massive $1 billion dollar Russian investment over a three-year time frame.

The new $1 billion investment brings Pepsi’s total investment in Russia to $4 billion, according to a statement released by Pepsi today.

Pepsi CEO Indra Nooyi said today, “This investment reflects very clearly our great confidence in Russia and our long-term commitment to this very important market,”

The Pepsi investment marks the first significant foreign investment in Russia post the Georgia conflict in August 2008.

Read the full story

Queen’s Park has just announced am ambitious $9 billion plan to expand the Greater Toronto Area transit system. The Toronto Transit Commission (TTC) has already been drafting euro-style rail lines for years now.

The money will be used to build a new 33km light rail system moving across Eglinton Avenue from the Kennedy subway station in the city’s east end all the way to Pearson International Airport that is scheduled for completion by 2013. Read the full story