- Risk-On in the Stock Market: Investment Guide
Stock market investing is often about following trends. Traders, investors and analysts often try to gauge investor sentiment to understand which direction the winds are blowing so that they can profit from them. A “risk-on” environment indicates that investors are… read more…
- Beginner’s Guide for Retail Investors
There are so many choices, acronyms and tax codes in the investing world that many people get intimated and never start. While there are complex investments available, beginning to invest doesn’t have to be difficult. In this beginner’s guide to investing, we’ll cover the basics to help you get started with your first investment. Additionally,… read more…
- Understanding How the Secondary Market Works
The secondary market is where investors buy and sell previously issued securities. It is important to the economy because it promotes capital formation and provides for price discovery based on the economic laws of supply and demand. In addition, it enhances liquidity and, because it is heavily regulated, gives participants a measure of assurance that… read more…
- Stakeholder vs. Shareholder: Key Differences
Many people have a vested interest in the success of a company. If you own a portion of it, you want it to succeed because then you get a cut of the profits. Folk like that are called “shareholders.” If… read more…
- What Does Risk Return Tradeoff Tell Investors?
Risk return tradeoff is an investing term that describes the relationship between the risk an investor takes and the level of returns he realizes. The two move in tandem: as risk increases, so does the potential for higher returns. Likewise, the less risky an investment is, the lower the returns or rewards are likely to… read more…
- What Is Sector Rotation? An Investment Guide
Sector rotation involves moving investments from one stock sector to another to keep pace with a changing economy. As the economy moves through different cycles, some stock sectors may perform better than others. Rotating investments allows investors to manage risk while potentially boosting returns, based on where the economy is at any given time. This… read more…
- What Is a Shareholder? – An Investment Guide
Companies sell shares of stock to raise capital. Investors and other entities that purchase those shares are called shareholders. A shareholder is also known as a stockholder. Being a stockholder means you have an ownership stake in that company. The… read more…
- What Is Distressed Debt? An Investment Guide
Distressed debt is debt that belongs to companies or government entities that are struggling financially. These entities may be in bankruptcy or in danger of having to file bankruptcy because their financial obligations are too great. Distressed debts can create opportunities for investors who purchase them at a discount. Investors can profit if the company… read more…
- What’s Short Interest and What Does It Tell Investors?
Short interest measures how many shares of a specific stock are the object of investors’ negative outlook. These “short shares” have been borrowed by investors to sell and have not yet been repurchased to close out the position. It can be expressed as either an absolute value (the number of shares) or a percentage relative… read more…
- What Does an Activist Investor Do?
Activist investors have steadily carved out a niche for themselves, establishing investment portfolios built around social and political goals. For example, activist investors made the news recently when hedge fund Engine No. 1, which works on environmental issues, secured multiple seats on the board of Exxon Mobil. Here’s how activist investors work. A financial advisor… read more…
- How to Set Smart Goals for Your Investments
When you set up an investment portfolio, it’s essential to have a strategy. That doesn’t have to mean complexity. You can make plans as simple as “minimize risk” or “save for retirement.” In fact, most investors do exactly that. But you do need a sense of what you want to achieve and how you’ll get… read more…
- Investor’s Guide to Marketable Securities
Most investors build their investment portfolios with a diversified array of stocks, bonds and other assets. These highly liquid investments are known as marketable securities and make up the majority of the assets that investors buy. In this article, we’ll define what marketable securities are, identify the major types of marketable securities and share how… read more…
- What Is Margin Debt and How Do Investors Use It?
Most investors buy and sell stocks, bonds and other securities using the assets in their brokerage accounts. Sometimes, investors want to be able to withdraw money from their accounts without actually selling any of their investments. Investors can accomplish this by borrowing against their portfolios. This is known as margin debt. There are many reasons… read more…
- Beginner’s Guide to Mortgage REITs
More than 65% of Americans currently own real estate, according to Census Bureau data. While a good portion probably live in the homes that they own, there are many homeowners who instead purchase property for investment purposes. Investing in real estate isn’t for everyone, though, as there are many aspects of owning a real estate investment… read more…
- Beginner’s Guide to Platinum Investment
Platinum, a precious metal, is used in the industrial and manufacturing markets, particularly in vehicle pollution control devices. As the global economy rebounds from the pandemic, platinum’s price is likely to rebound since it is used in manufacturing. It also… read more…
- Beginner’s Guide to Natural Gas Investing
Natural gas investing is a bet on the prospects of the oil and gas energy sector. The industrial and manufacturing sectors use natural gas for a variety of applications, including residential heating and cooling, buses and cars powered by natural gas, electric power generation and a wide variety of manufactured industrial products. Natural gas investing… read more…
- Distribution vs. Dividend: Key Differences
When it comes to investing, understanding the difference between a distribution and a dividend is essential for making informed financial decisions. While these terms are often used interchangeably, they refer to distinct concepts that can impact your investment returns and tax obligations in different ways. A dividend typically refers to a payment made by a… read more…
- What Is a Leveraged Buyout?
A leveraged buyout (LBO) occurs when one company acquires another using debt as the means to complete the acquisition. LBOs allow companies to purchase other companies without tying up significant amounts of their own capital reserves. The company that’s executing a… read more…
- Mutual Funds vs. Stocks: Key Differences
Mutual funds and stocks each offer specific types of advantages to investors. In general, stocks tend to offer higher returns while mutual funds tend to offer greater stability. The right one for you will depend on your goals, risk profile and investment strategy. To find out which works best for you, here is a comparison… read more…
- Understanding Devaluation and How It Affects You
If you’ve ever traveled to another country, you’ve probably noticed that exchange rates change over time. When you exchange money, you might get more or less than you expected. One reason for this difference is currency devaluation. Understanding devaluation is important not just for travelers but also for investors who deal with multiple currencies. Here’s… read more…
- Sector vs. Industry: Stock Market Definitions
Two of the more common business terms you may hear are “sector” and “industry.” They are often used to describe the same thing, but they’re not actually the same. Within the world of business and finance each one has a precise – and distinct – meaning and one shouldn’t be confused with the other. If… read more…
- Understanding Reversion to the Mean
Do prices eventually return to normal? Will housing prices decline to more sustainable levels, and can blockchain tokens find long-term stability? Do stock prices always recover after a crash, or is the idea of a financial reset just a myth? These questions touch on the concept of reversion to the mean, a fundamental principle in… read more…
- Hedge Fund vs. Index Fund: Key Differences
Index funds minimize risk by tracking a market metric, like the S&P 500 or a specific industry as a whole. Hedge funds maximize profits by taking high-risk positions and making investments that mitigate those risks. Below we’ll review what you need to know about these radically different investment vehicles. You can also consider working with… read more…
- SPAC vs. IPO: Key Differences
In the last few years, something called a special purpose acquisition company (SPAC), has become a popular way to raise capital. A SPAC, also known as a blank check company, bears some resemblance to an initial public offering (IPO), which is a more well-known means of raising capital. But there are key differences. In both… read more…
- Forex vs. Stocks: Key Differences
The foreign currency market (forex) has a lot in common with the stock market. Both are speculative ways of investing, meaning that they offer higher risks and higher rewards than many other assets. Both markets move faster than many other investments, and like most investments, both have grown with the rise of online investment platforms. Forex… read more…