- What Are Equity Capital Markets (ECM)?
If you own a company that is looking to get an initial public offering (IPO), you might need to raise equity capital from financial institutions. However, you can do that through equity capital markets, which are broader than the stock… read more…
- All You Need to Know About Risk Parity
All investors seek a balance between risk and return that works for their temperament and circumstances. Allocation of capital drives many investment strategies, but some focus on risk allocation instead. One such strategy is risk parity, which spreads risk across… read more…
- What Is a Private Equity Fund?
It’s likely that most investors rarely thin about the world of private equity, even though private equity funds control billions of dollars in assets. In the best cases, they reap enormous returns for their investors and help launch some dynamic… read more…
- Behavioral Economics: A Guide for Investors
Investing and financial planning can all be about numbers, so it’s easy to see why economists long assumed people approach these subjects logically. Researchers have found abundant evidence that people often are more irrational about finances, investing and reading markets… read more…
- An Introduction to Investing in the Bond Market
The bond market is a safe harbor when the stock market starts going pear-shaped, or just feels a bit wobbly. They come in all shapes and sizes from Treasury to junk and are often a very strong option for someone… read more…
- What Is a Market Profile and How Do You Use One?
Investing smart means using the right tools. Whether that’s considering a stock’s volatility metrics or its price history, you won’t invest as well without the proper resources. One such resource? The market profile chart, first used in 1984. A market… read more…
- What Is the Time-Weighted Return (TWR)?
If you’re an investor, chances are you’re looking for a reliable way to keep tabs on how your money is doing. And while various methods exist to measure the performance of an investment portfolio, calculating the time-weighted return (TWR) is the… read more…
- What Is Proprietary Trading?
A financial firm is said to practice proprietary trading if it invests its own money to make profits for itself, instead of earning commissions by trading on a client’s behalf. While the firm’s clients don’t benefit from proprietary trading, it… read more…
- Efficient Frontier: Definition, Benefits and Uses
As an investor, wouldn’t it be nice to know that your portfolio both limits your risk and maximizes return? Ideally, it will do just that. The efficient frontier is a set of investment portfolios that maximizes returns while minimizing risk. Learn… read more…
- Flash Crash: Definition, Examples, and Implications
A flash crash occurs when electronic securities trading systems trigger a dramatic drop in price and rebounds within minutes. While flash crash occurrences are happening more often, many investors still don’t understand what causes them. Read on to learn how… read more…
- What is a Block Trade?
One hundred is a lot of shares. Literally, when trading stock one “lot” is defined as 100 shares. A round lot is any number of shares evenly divisible by 100, while any other amount is considered an “odd lot.” Block traders do not deal in lots of shares. They operate on a scale several orders… read more…
- What Is Tail Risk In Investing?
The edge case scenario is realistic, but too remote to come up in daily events. Arguably, how well you manage unlikely outcomes largely defines your skill in a profession. Lawyers call them “bad cases,” and warn every first year law… read more…
- CFA vs. CAIA: What Is the Difference?
A chartered financial analyst (CFA) is a financial advisor who has earned the title of CFA through extra accreditation, including a rigorous three-part test, from the CFA Institute . A Chartered Alternative Investment Analyst (CAIA) specializes in alternative investments such… read more…
- The Capital Asset Pricing Model (CAPM), Explained
With investing, the higher the risk, the more an investor expects to earn. The capital asset pricing model (CAPM) tries to estimate how much you can expect to earn given the amount of risk. The model is often used in… read more…
- What is the ‘Dogs of the Dow’ Investing Strategy?
When tracking your investment portfolio, you might compare it against a stock market index such as the Dow Jones Industrial Average. Ideally, you want investments to beat the Dow. The Dogs of the Dow investing strategy attempts to identify value… read more…
- Systematic Risk: What Investors Need to Know
Investing in the stock market inevitably brings risk, and diversifying a portfolio doesn’t eliminate it. There’s always a systematic risk. In other words, there’s always an inevitable risk that affects a market segment or the market as a whole. Systematic… read more…
- Swing Trading: Definition, Strategies and Risks
If you’re stock market regular, you’ve likely heard of day trading: The buying and selling of securities within the same trading day. But maybe you’d like a slightly longer lead time for such transactions. Enter swing trading, which is basically… read more…
- How a Price-Weighted Index Works
Assessing the value of a company or security can take a few different forms. You can measure all stocks or securities equally, or use market capitalization. Another choice: a price-weighted index, in which each member company’s stock in an index… read more…
- What Is the Bid-Ask Spread?
Since buying and selling stock is a key component of investing, it’s important for investors to understand trading terminology — especially the term “bid-ask spread.” If you have no idea what that means or how it affects your investment mix… read more…
- What Is High-Frequency Trading?
High-Frequency Trading (HFT) is controversial. Some investors say it lets people capitalize on opportunities that vanish really quickly. Others say that HTF distorts the markets by processing large numbers of orders in fractions of a second. Regardless, this trading method uses algorithms to analyze multiple markets and identify investing opportunities based on those conditions. If… read more…
- Systemic Risk: What You Need to Know
Systemic risk is the risk that a company-level event could destabilize an entire industry. Think back to the financial crisis of 2008, when many companies deemed “too big to fail” did exactly that. To safeguard your investments for the next… read more…
- What Are Restricted Stock Awards (RSAs)?
Restricted stock has become a common offering among employers in the last 20 years. There are two main types: restricted stock awards (RSA) and restricted stock units (RSU). Both can be lucrative parts of a compensation package, but they have… read more…
- A Guide to Reading Stock Tickers
If you’ve ever watched a financial news program or visited a website that covers the stock market, you might notice an endlessly cycling parade of numbers, symbols and abbreviations. These collectively make up a stock ticker, which provides snapshots of… read more…
- What Is an Endowment, and How Do They Work?
An endowment is comprised of money donated to a non-profit organization. This sum of money is typically placed in an endowment fund, which is then invested. The return from those investments are used to fund the organization’s operations or grow… read more…
- What is Private Equity and What Do Private Equity Firms Do?
If you have a diverse investment portfolio you’ve probably bought publicly traded stocks on the open market. But some investors operate in an alternate, well-funded investment universe. In the world of private equity, well-funded investment firms make big investments in… read more…