- What Are Over-the-Counter (OTC) Stocks?
Over-the-counter (OTC) stocks are also known as unlisted stocks. Typically offered by small companies, they are traded through market makers, rather than through stock exchanges like the New York Stock Exchange or Nasdaq. As a result, OTC stocks generally have a lower volume of trade than exchange-listed stocks and come with a higher degree of risk. Penny… read more…
- A Guide to Unit Investment Trusts (UITs)
If you have an investment portfolio or a 401(k), you’ve probably invested in a mutual fund. You may have also invested your savings in an ETF. Another similar option for investors who don’t want to buy individual securities is a… read more…
- What Is Working Capital and Why Does It Matter?
Working capital measures a business’s operating liquidity, but it does so much more. It also can be a good indicator of a company’s efficiency and financial health, as well as how well it manages debt, payroll, and inventory. These are… read more…
- How Pump and Dump Investing Schemes Work
You don’t have to watch movies like “The Wolf of Wall Street” or “Boiler Room” to know what pump and dump scheme is about. Brokers pitch penny stocks to customers in high volume despite its questionable returns. Once the buyers dry… read more…
- What Is Regulation T (Reg T) and Why Does It Exist?
Buying on margin lets investors increase potential return with borrowed money, but it’s a big risk. The Federal Reserve Board’s Regulation T, or Reg T, limits that risk. This collection of rules limits how customers can trade using cash accounts.… read more…
- Market Correction: Definition, Duration and Everything Else You Need to Know
When people talk about a market correction, it sounds like a euphemism for falling stock prices. But it’s actually a technical term for a 10% or bigger drop in the price of an index (or individual security) from the last… read more…
- What Is a Call Provision and What Does It Mean?
A call provision allows an issuer to pay a bond early. Most bonds have a fixed maturation and value. If you buy a 10-year bond, you get back your capital plus a fixed interest rate in a decade. Call provisions are… read more…
- What Assets Are Considered Liquid Assets?
Liquid assets are things that can be quickly converted into cash without losing value. These come in many different forms, such as cash, stocks, other marketable securities, money market funds and more. Liquid assets are different from their illiquid or fixed… read more…
- What Are Exchange-Traded Notes (ETNs)?
When is debt not ordinary debt? When it’s packaged as exchange-traded notes. An exchange-traded note (ETN) is pegged to a market index but functions like a bond. At maturity, ETNs pay out the return of the index it tracks. However,… read more…
- What Are Investment Securities?
When you’re starting to invest, you’ll begin to take cash and buy different types of investments, or securities. There are many versions of securities you can invest in, and the ones you choose depend on what type of investor you… read more…
- How to Buy Foxconn Stock in the U.S.
As the largest multinational electronic manufacturers in the world, Foxconn (also known as Hon Hai Industry Co.) offers a variety of consumer electronics, component and computer electronic products. Led by founder, chairman and CEO Terry Gou, the Taiwanese manufacturer also operates in both domestic and overseas markets. With its global footprint, many investors are looking… read more…
- How to Invest in Marijuana Stocks
Marijuana stocks are becoming more popular as more states legalize the medical and recreational use of the drug. In fact, you can now even invest in marijuana stocks through a normal brokerage account. However, just like any other type of stock, marijuana stocks can be risky, even if market growth is encouraging. That’s because stocks… read more…
- What Is Monetary Policy, and How Does It Work?
In the U.S., the Federal Reserve determines monetary policy, while Congress controls fiscal policy. Generally, monetary policy seeks either to stimulate the economy or cool it down through managing money supply and demand. Steering monetary policy is the Fed’s main responsibility.… read more…
- A Beginner’s Guide to Investing in Foreign Currency
Investing in foreign currency can be a great way to diversify your portfolio. Foreign currency trading, or forex for short, is a little more complex than trading stocks or mutual funds, or shoring up your investment strategy with bonds. Learning… read more…
- What Is the Principal of an Investment Account or Loan?
In investing, the principal is the cash you put into an investment account. If you’re borrowing money, the principal is the actual amount you borrow, before interest begins to apply. For both loans and investment accounts, the principal represents the foundation upon which everything else is paid off or built, respectively. It’s a fundamental concept… read more…
- How Inverse ETFs Work
While a typical exchange-traded fund (ETF) lets you invest in a sector, index or industry, an inverse ETF lets you bet against them. Inverse ETFs see gains when a market or index goes down. They can be less risky and… read more…
- Penny Stock Promoters: What to Watch Out for
Never trust a get-rich-quick scheme. This may be the most important thing you need to know about penny stock promoters. Since they aren’t in it for you, here’s a breakdown of what you need to know to protect yourself and your money. What Is a Penny Stock? Historically, penny stocks have been considered any stock… read more…
- What Is a Collateralized Debt Obligation (CDO)?
A collateralized debt obligation, or CDO, is a financial instrument that institutions use to combine individual loans into one financial product. These products are then sold to investors on the secondary market. CDOs are one specific type of derivative that… read more…
- How to Buy Tesla Stock
There are a number of ways to buy Tesla stock, but the simplest are to do it either through a brokerage account or with the help of a financial advisor. Tesla is one of the most popular and innovative American… read more…
- How to Buy Apple Stock
Apple Inc. is a technology company that specializes in computer software, electronics, media devices and online services. Founded in 1976 by Steve Jobs and Steve Wozniak in Cupertino, California, the company now offers its products all around the world. In… read more…
- Economic Indicators: Definition, Types, Examples and Usage
Economic indicators are key stats about the economy that can help you better understand where the economy is headed. These indicators can help investors decide when to buy or sell investments. For example, if the stock market is at its… read more…
- How Limit Orders Work in Stock Trading
Limit orders are increasingly important as the pace of the market quickens. Computer algorithms execute more than half of all stock market trades each day. Limit orders that restrict buying and selling prices can help investors avoid portfolio damage from… read more…
- What Are Interval Funds, and How Do They Work?
In an interval fund, an investment company will regularly offer to repurchase shares from shareholders. Those repurchases come at various intervals, hence the name. Before you decide to invest in interval funds, though, it’s worth considering how they function and… read more…
- Return on Equity (ROE): Definition and Examples
Return on equity (ROE) measures how well a company generates profits for its owners. It is defined as the business’s net income relative to the value of its shareholders’ equity. It reveals the company’s efficiency at turning shareholder investments into profits.… read more…
- The Different Types of Mutual Fund Classes
Mutual funds can simplify the diversification of your portfolio. Mutual fund share classes will determine just how much that diversification will cost. While mutual funds will let you invest in a collection of stocks and bonds through index funds or exchange-traded funds (ETF), mutual fund share classes may determine which fit your budget best. Mutual… read more…