- What’s Contango and What Does It Tell Investors?
Investors trade in commodities as a way to diversify their portfolios and take advantage of the price fluctuations of goods. Commodities are broadly categorized as one of four types – metal, energy, livestock and meat and agricultural. You can invest in commodities through futures contracts, options and exchange-traded funds (ETFs). When trading in commodity futures,… 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…
- 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…
- How Investors Use the CBOE Volatility Index
The CBOE Volatility Index (VIX) gives investors a measure of how much the stock market is expected to fluctuate over the next 30 days. VIX is often called the “fear index,” because it can indicate the level of investor concern. A higher VIX indicates an expectation of larger price moves up or down. A lower… read more…
- REIT vs. Real Estate: Which Is Better?
Real estate can make for a strong addition to any investment portfolio, allowing you to grow your wealth while diversifying your assets. When it comes to adding real estate investments, however, there are two main approaches to consider: investing in… read more…
- Investor’s Guide to Equity REITs
If you’re looking to add real estate to your investment portfolio without the added hassle of managing properties, maintenance and vacancies, an equity REIT might be the answer. Equity REITs let you invest in a variety of different properties, earn passive income and further diversify your portfolio to protect its growth. But how do equity REITs… 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…
- How Liquidity Premiums Are Calculated and Paid
A liquidity premium is the extra compensation required to get an investor to buy a security that is more difficult to sell quickly at a fair market price than an alternative. In other words, a security with a high liquidity risk – one that is difficult to sell relatively quickly at a fair price –… read more…
- Investor’s Guide to Debt Securities
During a bull market, investors flock to equity securities to try to earn the highest possible returns. But, the risk inherent in equity securities remains. To reduce risk and achieve diversification, an investment portfolio needs to contain a variety of types of securities. Debt securities add some much-needed diversification to a balanced portfolio. They also… read more…
- Guide to Renewable Energy Investments
Renewable energy is the future. The declining supply of fossil fuels, like coal, and climate change, which carbon-based energy has helped the cause, are the two main reasons for our movement toward renewable energy. Renewable energy investment can be an attractive investment for many investors due to its potential, but it also may be risky due… read more…
- How Is the Hash Rate of Your Cryptocurrency Calculated?
A cryptocurrency’s hash rate, also called hash power, is the measure of a cryptocurrency miner’s performance. The faster the hash rate, the more profit a cryptocurrency miner can make. Even though the Securities and Exchange Commission (SEC) is going slowly in approving digital currency for trading in the financial marketplace, it has approved a digital… read more…
- Understanding How a Risk Reversal Works
Risk reversal can be used as a hedging strategy for options trading. An investor buys one option and writes or sells another within the same expiration month. This type of strategy is designed to help options traders minimize downside risk when taking long or short positions. It’s typically more common to seek risk reversals used… 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…
- Futures vs. Stocks: Key Differences
Futures and stocks are two of the major classes of financial assets available to retail investors. They each may offer returns on your investments, but for different reasons. Both have significant risks, but futures are generally considered riskier than stocks.… 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…
- Dividend Rate vs. Dividend Yield: What They Tell Investors
Investing in dividend-paying stocks can be an attractive option for those seeking steady income. With a wide range of dividend stocks available, making informed financial decisions requires a solid understanding of how these investments work. Key concepts to grasp include the dividend rate — often simply called a dividend — and the dividend yield. Understanding… read more…
- Regulation D Exemptions: Financial Advisor Guide
Before companies can go public and list their shares for trade on an exchange, there are some regulatory hoops they need to jump through first. Federal securities laws require any offer or sale of a security to be registered with… read more…
- How to Read Stock Charts: An Investor’s Guide
Starting your journey as a new investor can feel overwhelming, especially when faced with the need to learn certain foundational skills. One key skill worth mastering is reading stock charts. These charts provide a snapshot of a stock’s performance at any given moment, offering valuable insights. At first glance, stock charts might appear complex, but… read more…
- What Investors Need to Know About Meme Stocks
Investing trends come and go, and the rise of the meme stock is one of the latest to make the rounds. Defining meme stocks is difficult, but generally they’re stocks that manage to gain a lot of attention from investors thanks largely to social media chatter. They may be value stocks, growth stocks; they may… 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…
- Warrants vs. Options: Which Should You Buy?
Publicly traded companies can issue stock warrants and stock options to attract investors and raise capital. A warrant gives an investor the right to buy a stock at a set price by a specific date. A stock option conveys the right to buy or sell a stock at a certain price by a predetermined date.… read more…
- Premium vs. Discount Bonds: Which Should You Buy?
Bonds can help to balance out risk in a portfolio while also generating income in the form of interest from regular coupon payments. When a bond is issued it’s assigned a fixed par value and a set maturity date. A… read more…
- Ex-Dividend Date vs. Record Date: Key Differences
Investors who rely on dividend income must understand four critical dates to effectively manage and plan their investments. These dates include the declaration date, the ex-dividend date, the record date and the payment date. While the declaration and payment dates are generally straightforward, the ex-dividend and record dates often create confusion among investors. The nuances… 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…