- How Does Inflation Affect Stocks?
After more than 10 years of low inflation, we have seen a surge in inflation. A myriad of factors has converged to trigger inflation, including pandemic-related lockdowns, a massive monetary and fiscal stimulus and supply chain disruptions. Here’s an overview of how inflation affects equities and what kind of investing style does best during investing. Consider… read more…
- 6 Investments That Can Help Combat Inflation
With the consumer price index increasing during the last few years at a rate not seen for nearly 40 years, the investing challenge for the coming year is finding ways to generate real returns during exceptionally high inflation. Traditional inflation-resistant… read more…
- You Need to Know This About Growth Investing Strategies
Growth investing is a strategy that centers on choosing stocks and similar investments that have significant growth potential. A portfolio that’s growth-focused may include stocks, mutual funds, exchange-traded funds (ETFs) and other securities. The goal of growth investing is to… read more…
- How Venture Philanthropy Impacts Investment
Venture philanthropy uses techniques from the world of venture capital financing to support charitable and humanitarian goals. It differs from impact investing in several ways, including being oriented more toward the longer term, more like a partnership, investing in nonprofits instead of for-profits and not as concerned with getting a financial gain or even return… read more…
- What Is a Secondary Offering? How Does It Work?
Companies sometimes need capital to help with acquisitions and expansions. While an initial public offering (IPO) can help with that early in a company’s life, a company may have to return to the public sale of shares to generate more money. However, while post-IPO offerings can help a corporation, they can dilute the value of… read more…
- Investor’s Guide to Cyclical Stocks
One of the most common categories of investment securities is known as cyclical stocks. These are shares in companies that are sensitive to economic or business cycles. When an economy is contracting there prices are particularly vulnerable to a downturn; when an economy is expanding their prices are more likely than other categories of stocks… read more…
- Dividend vs. Growth Stocks: Key Differences
Investors use various strategies to select stocks, focusing on industries, price trends, or key metrics. A common approach is choosing between dividend and growth stocks. Dividend stocks generate income through regular payouts, while growth stocks offer returns through price appreciation and capital gains. Here’s how each works. Reading articles like this can equip you to… read more…
- Direct Indexing: What It Is and How It Works
Many investors use mutual funds and exchange-traded funds (ETFs) to diversify their portfolios, even when their balances are small. But there’s an alternative that offers several potential advantages to mutual fund and ETF investing. Known as direct indexing, it’s a technique that’s been available for decades, but costs and technological hurdles made it appealing primarily… read more…
- Understanding the Dividend Growth Model
Dividend growth modeling helps investors determine a fair price for a company’s shares, using the stock’s current dividend, the expected future growth rate of the dividend and the required rate of return for the individual’s portfolio and financial goals. The dividend growth model is relatively easy to perform and can provide a helpful way to… read more…
- Understanding Underweight Stock Ratings
Financial analysts who are employed by investment firms research stocks and provide their opinions to investors about their possible future performance. Their opinion takes the form of a rating. An Underweight stock rating indicates to investors that it may not be a good investment. In other words, if a stock is rated by Wall Street… read more…
- What Is a PIPE Investment?
When a company needs to raise capital, one of the ways it can do that is through a PIPE investment. This type of offering allows investors to purchase a certain number of restricted shares of stock from the company at… read more…
- How to Invest in the Bombay Stock Exchange
The oldest exchange in Asia is the Bombay Stock Exchange, based in Mumbai and now known as the BSE. Its roots go back to the 1850s. With a market capitalization of approximately $2.2 trillion, it is the second-largest stock exchange… read more…
- Understanding Currency Risk and Examples
When managing your investment portfolio, there are different types of risk that need to be factored in. Currency risk, which is risk associated with fluctuations in currency values, is one of them. It’s important to understand how currency risk may… read more…
- How Blank Check Companies (SPACs) Work
A special purpose acquisition company (SPAC), also known as a blank check company, is a publicly traded company created for the purpose of buying or merging with another company or companies. For reasons explained below, the Securities and Exchange Commission (SEC)… read more…
- What Are Dilutive Securities?
Dilutive securities are any financial instrument that can increase the number of shares a company has outstanding. Examples include convertible bonds, options, warrants and preferred stock. The effect of dilutive securities is to reduce the price of shares and earnings attributable to each share. That’s one reason many shareholders object when a board of directors… read more…
- Pros and Cons of Market Neutral Funds
Looking for an investment that can help manage risk in your portfolio? Consider market neutral funds, which aim to provide stable returns and mitigate risk in various stock market environments. But like with any investment strategy, it’s worth weighing the… read more…
- Using Alpha to Measure an Investment’s Performance
Risk is one of the most essential concepts to successful investing. Investors and capital-seekers looking for the right balance on any given security drive most market activity. Alpha measures an investment’s performance compared to a relevant market, like the Dow… read more…
- What Is a Dead Cat Bounce?
It is clear that, once upon a time, finance types had a little more fun with their jobs. How else to explain how “dead cat bounce” came to be a widely accepted piece of financial jargon? The odd term refers to… read more…
- Leverage: Definition and Use in Investing
Leverage is a common financial concept you may often hear in reference to maximizing investor returns. Commonly used by investors and companies alike, leverage is a technique that utilizes debt instead of equity to buy an asset. The expectation is… read more…
- Board of Directors: What Investors Need to Know
A company’s board of directors represents shareholders and supervises a company. As a result, directors are of particular importance to investors in individual stocks. It’s why all publicly traded companies have boards of directors. Meanwhile, many non-profits and non-public companies… read more…
- Small Cap Stocks: Definition and Pros & Cons
Small cap stocks are one type of stock investment you can hold in your portfolio that represent the stocks of smaller companies. These stocks differ from large cap and mid cap stocks in several key ways. There are several advantages… read more…
- Large-Cap Stocks: Definition and Pros & Cons
Large-cap, or large capitalization, stocks are a type of stock that belongs to very large, established companies like Apple and Microsoft. As a result of this, these stocks are often considered the safest of all equity investments. But like all other types of securities, large-cap stocks have both advantages and drawbacks. Investing in large-cap stocks is… read more…
- How to Calculate Compound Annual Growth Rate (CAGR)
The Compound Annual Growth Rate (CAGR) may be the key to better investment earnings. The CAGR formula calculates year-over-year growth rates and helps chart investment performance. It also allows investors to see how similar investments have fared over the same length of time. If you need a financial advisor, the CAGR formula can help you… read more…
- A Guide to Dividend Reinvestment Plans
A dividend reinvestment plan, or DRIP, is a vehicle that reinvests the money shareholders get from companies in cash dividends. Many investors favor DRIPs because of their ease, low-to-nonexistent fees and ability to strengthen returns over a long time horizon. By… read more…
- Top 5 Growth Stock Tips
Deciding which stocks to invest in can be difficult. There are different kinds of stocks and all of them have their advantages and disadvantages. Compared to value stocks, growth stocks can potentially generate higher returns over time and you can… read more…