Investing - All Content

  1. What is the salad oil scandal?

    Before Bre-X, there was Allied Crude Vegetable Oil Refining Corporation. In 1962, Anthony "Tino" De Angelis set about to ...
  2. What is a Chinese hedge?

    A Chinese Hedge is a form of arbitrage by which an investor shorts a convertible bond and buys the underlying common stock. ...
  3. What is "hot money"?

    "Hot money" refers to funds that are controlled by investors who actively seek short-term returns. These investors scan the ...
  4. Getting Positive Results With Market-Neutral Funds

    Find out how these mutual funds can add some flavor to your bland portfolio.
  5. Municipalities Free Up Cash With Chapter 9

    Find out what happens to municipalities when they need money, but have no other option than bankruptcy.
  6. How do I use a barbell strategy?

    The barbell strategy is an investment strategy that involves purchasing both short-term and long-term bonds and securities ...
  7. How do I use a premium put convertible?

    Holders of convertible bonds face all the pitfalls that traditional bondholders face - liquidity risk, interest rate risk ...
  8. When Things Go Awry, Insurers Get Reinsured

    Guru Warren Buffett is making this sector popular. Learn more here.
  9. How did derivatives trader Nick Leeson contribute to the fall of Barings Bank?

    When an earthquake shook Kobe, Japan in 1995, it also broke open an ongoing scandal within the walls of Barings Bank. At ...
  10. The Uptick Rule: Does It Keep Bear Markets Ticking?

    This rule prevents traders from driving stocks down, but its effect on market volatility is debatable.
  11. Commodity Funds 101

    These funds make investing in gold, oil or grain an easier prospect.
  12. Borrowing Smart In A Debt-Filled World

    Leveraging your money can have many perks, but it's not always the smartest financial plan.
  13. Moral Hazards: A Bump In The Contract Road

    Learn how this phenomenon can cause a party in an agreement to behave differently than expected.
  14. What is a wild-card play?

    A wild-card play is a term related to futures contracts. A future is a financial contract obligating a buyer to purchase, ...
  15. Financial Media 4-1-1 For Investors

    Cut through the information clutter and decipher the useful news from the useless.
  16. Limiting Losses

    It is impossible to avoid them completely, but there is a systematic method you can use to control them.
  17. How did currency trader John Rusnak hide $691 million in losses before being caught ...

    In 1993, Allfirst Bank hired a currency trader to shift the bank's forex (FX) operations from a merely hedging endeavor to ...
  18. Your client has a net short-term gain of $3,000 and a net long-term loss of $8,0 ...

    I. The short-term gain is fully taxableII. $3,000 of capital loss is deductible against earned incomeIII. There is a long-term ...
  19. Taking The Sting Out Of Investment Loss

    Get a hold of yourself! Take losses in stride and learn to invest dispassionately.
  20. GICS Vs. ICB: Competing Systems For Classifying Stocks

    Global Industry Classification Standards and the Industrial Classification Benchmark separate stocks into sectors.
  21. The Crash Of 1929 - Could It Happen Again?

    Learn about the series of events that triggered the Great Depression.
  22. Finding Short Candidates With Technical Analysis

    Learn how to distinguish tops and bottoms in the equity market when short selling.
  23. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ...
  24. What are the advantages and disadvantages of buying stocks instead of bonds?

    This is a common question among investors. Stocks and bonds differ dramatically in their structures, payouts, returns and ...
  25. If the stock market is so volatile, why would I want to put my money into it?

    In this question, volatility refers to the upward and downward movement of price. The more prices fluctuate, the more volatile ...
  26. How does the government influence the securities market?

    Governments generally say they don't like to take an active role in the securities market (except for regulating it); however, ...
  27. I've heard some "market gurus" claim returns of up to 400% annually. Is this possible?

    To answer your question in a word: No! Although we wish such a phenomenal investment system were real, the claims you speak ...
  28. What are the "Dogs of the Dow"?

    The Dow Jones Industrial Average (DJIA) is an index of 30 of the most significant, mature and respected companies in the ...
  29. What is the difference between fast and slow stochastics in technical analysis?

    The main difference between fast and slow stochastics is summed up in one word: sensitivity. The fast stochastic is more ...
  30. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ...
  31. I live in the U.S. How can I trade stocks in China and India?

    Foreign markets have always been an object of envy to domestic investors because the indexes in some foreign countries have ...
  32. Can I make money using put options when prices are going up?

    It seems counterintuitive that you would be able to profit from an increase in the price of an underlying asset by using ...
  33. How long does a stock that has done a reverse split keep the letter "D" at the end ...

    A reverse split is a corporate action whereby a company reduces the number of shares outstanding and increases the price ...
  34. Where can I find information about pre- and after-hours trading on the NYSE and the ...

    The stock market, particularly the NYSE and Nasdaq, is traditionally open between 9:30am and 4pm EST. Over time, with the ...
  35. Can an option have a negative strike price?

    The simple answer is that, at least when it comes to exchange traded options, an option can't have a negative strike price ...
  36. How do I buy an over-the-counter stock?

    The process of purchasing over-the-counter (OTC) stocks is different than purchasing stock from companies on the NYSE and ...
  37. Where can I find the number of shares shorted on a specific stock?

    For general shorting information such as the short interest ratio, you can usually go to any website that features a stock ...
  38. What do you call a candlestick with no shadows, and what does it mean?

    A candlestick with no shadow is regarded as a strong signal of conviction by either buyers or sellers depending on whether ...
  39. At what point in the ordering process does a broker charge commission?

    When placing a market order for a security through a broker, there will be a commission accompanying the service. The fee ...
  40. What are the oldest mutual funds, by date of inception?

    Mutual funds were first introduced in the United States by MFS Investment Management in 1924. Although not public until 1928, ...
  41. Does investing in sustainable or "green" companies provide lower returns?

    To determine the kinds of returns that can be expected from investments in sustainable or "green" companies, the distinction ...
  42. Can private corporations issue convertible bonds?

    The first step to answering this question requires defining the term "private corporation". Many times, the term "private ...
  43. Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  44. Triple Screen Trading System - Part 7

    This system identifies the intraday price movements that indicates entry points for your buy or sell orders.
  45. A Logical Method Of Stop Placement

    If holding on to losing trades is human nature, this tool will help protect you from yourself.
  46. Terrorism's Effects On Wall Street

    Terrorist activity tends to have a negative impact on the markets. Find out how to take cover.
  47. Sympathy Sell-Off: An Investor's Guide

    Find out how to tell whether your stock is a bargain or a bank breaker.
  48. Investment Clubs Pool Assets, Expertise

    Forming a network of other like-minded investors and professionals can bolster returns.
  49. Mechanical Investing Not A Golden Key

    Direct paths to wealth are getting narrower, fewer and may be locked up tight.
  50. From The Printing Press To The Internet

    Find out how this invention contributed to the development and evolution of the U.S. economy.
  51. Value Traps: Bargain Hunters Beware!

    Find out how to avoid getting sucked in by a deceiving bargain stock.
  52. Get Into Low-Cost Futures Trading With Synthetics

    If you can't trade commodity futures outright, these vehicles provide a less expensive alternative.
  53. Spotlight On The Solar Industry

    Before you buy into the hype, learn how the industry works and how to spot the winners.
  54. Common Risks That Can Ruin Your Retirement

    These unexpected bumps can sideline your post-work plans and prevent you from riding out your assets.
  55. Warren Buffett's Best Buys

    The Oracle of Omaha's "Rip van Winkle" approach has served him well. Read on to learn more.
  56. Socially Responsible Investing Vs. Sin Stocks

    Can your principles make you richer or poorer? Find out if it pays pick your portfolio based on ethics.
  57. Can you short sell ETFs?

    ETFs (an acronym for exchange-traded funds) are treated like stock on exchanges; as such, they are also allowed to be sold ...
  58. Why are P/E ratios generally higher during times of low inflation?

    Inflation affects equity prices in several ways. Most importantly, investors are willing to pay less for a certain level ...
  59. What exactly is a portfolio? Is it something I can carry around?

    The quick answer to this question is that a portfolio is a collection of stocks, bonds and/or other investment assets. A ...
  60. Can a stock lose all its value? How would this affect a long or short position?

    The answer to the first part of this question is pretty straightforward: yes, stocks are able to lose all their value in ...
  61. What is a "socially responsible" mutual fund?

    As the name suggests, socially responsible mutual funds invest exclusively in socially responsible investments. Securities ...
  62. Why would a person choose a mutual fund over an individual stock?

    There are a number of reasons why an individual may choose to buy mutual funds instead of individual stocks. The most common ...
  63. What happens when the lender of the borrowed shares in a short sale transaction wants ...

    In a short sale transaction, shares are borrowed from the lender by the short seller and sold in the market. The lender of ...
  64. What is the pitchfork indicator that I keep hearing about, and how do I use it?

    The technical indicator known as Andrew's Pitchfork is not that well-known, and it's rarely used by novice traders. However, ...
  65. What's the difference between net present value and internal rate of return? How ...

    Both of these measurements are primarily used in capital budgeting, the process by which companies determine whether a new ...
  66. What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ...
  67. What's the difference between institutional and non-institutional investors?

    There are a number of differences between institutional investors and non-institutional investors. If you are considering ...
  68. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  69. What is the difference between municipal bonds and standard money market funds?

    The primary difference between municipal bonds - also known as "munis" - and money market funds is that municipal bonds are ...
  70. Can a corporation deduct dividend payments to shareholders before taxes are calculated?

    Corporations may not legally deduct the dividend payments before taxes but there is another approach - a corporate structure ...
  71. How are futures used to hedge a position?

    Futures contracts are one of the most common derivatives used to hedge risk. A futures contract is as an arrangement between ...
  72. Why do companies issue 100-year bonds?

    Although it is rare, companies do issue bonds that exceed an average person's life expectancy. For example, multi-billion ...
  73. What happens when a circuit breaker is put into effect?

    A circuit breaker represents a situation where the Securities and Exchange Commission (SEC) and National Association of Securities ...
  74. Why do share prices fall after a company has a secondary offering?

    The best way to answer this question is to provide a simple illustration of what happens when a company increases the number ...
  75. How is margin interest calculated?

    Before running a calculation you must first find out what rate your broker-dealer is charging to borrow money. The broker ...
  76. How can I prevent commissions and fees from eating up my trading profits?

    First off, understand that there is no universal system regarding trading commissions charged by brokerage firms. Some charge ...
  77. What is foreclosure investing?

    Foreclosure investing involves the purchase of houses that are somewhere in the process of being confiscated by lenders due ...
  78. When is a dividend payment recognized in the shareholders equity portion of the balance ...

    From an accounting point of view, shareholders' equity is decreased by the total dividend amount on the date it is declared ...
  79. Spotting Breakouts As Easy As ACD

    Wondering what it means to be a "logical trader"? Take a look at this system devised by Mark Fisher.
  80. Spotting Cash Cows

    We show you why some of these companies stand apart from the herd.
  81. Triple Screen Trading System - Part 8

    Making use of the tightest stops in entering and exiting positions is what this three-part system is all about.
  82. Anticipate Trends To Find Profits

    Monitoring your trades in real-time can help you anticipate their outcomes.
  83. Capital Gains Tax Cuts For Middle Income Investors

    Find out how TIPRA plans to slash taxes for those in the 10-15% tax bracket.
  84. Reining In CEO Rewards

    Could bloated CEO compensation be to blame for the widening gap between the rich and the ultra-rich?
  85. The History Of Information Machines

    Discover how technology changed the way we exchange information when trading.
  86. How Will The Subprime Mess Impact You?

    The subprime collapse could mean doom and gloom for housing, equities and the overall economy.
  87. Due Diligence In 10 Easy Steps

    Got a hot stock tip? Follow up on it with these tips to avoid getting burned.
  88. Why Warren Buffett Envies You

    The Oracle of Omaha can move over - there's a new investor in town.
  89. The Impact Of Recession On Businesses

    Find out how this economic cycle affects both small and big business.
  90. The Risks Of Mortgage-Backed Securities

    Find out how weighted average life guards against prepayment risk.
  91. An Introduction To Canadian Income Trusts

    Yields in excess of 10% aren't rare, but these unique investments need to be chosen very carefully.
  92. Mark-To-Market Mayhem

    Did this accounting convention contribute to the credit crisis of 2008? Find out here.
  93. The 2007-08 Financial Crisis In Review

    If you don't know how the recession began, read on to learn more.
  94. Do I receive the posted dividend yield every quarter?

    First things first: a company with common stock that pays a dividend will typically distribute the dividend every quarter. ...
  95. Why do stock prices change following news reports?

    Stock prices move up and down every minute due to fluctuations in supply and demand. If more people want to buy a particular ...
  96. Where can I find the P/E ratios for the Dow and S&P 500?

    When it comes to valuing stocks, the price-to-earnings (P/E) ratio is one of the oldest and most frequently used metrics. ...
  97. What is the difference between a global fund and an international fund?

    In the English language, "global" and "international" tend to be used interchangeably - hence the confusion in the investing ...
  98. Why do interest rates tend to have an inverse relationship with bond prices?

    At first glance, the inverse relationship between interest rates and bond prices seems somewhat illogical, but upon closer ...
  99. What is the difference between yield and return?

    Because investors are very concerned with how well their investments are performing or how they are expected to perform, ...
  100. Are IPOs available to short sell immediately upon trading, or is there a time limit ...

    The quick answer to this question is that an IPO can be shorted upon initial trading, but it is not an easy thing to do at ...
Frequently Asked Questions
  1. Why would a company make drastic cuts to its dividend payments?

    A dividend cut occurs when a dividend paying company either completely stops paying out dividends (a worst-case scenario) ...
  2. I lost my share certificate. Do I still own the stock?

    Regardless of whether a shareholder loses his or her stock certificate, that person still owns the shares. However, in order ...
  3. What is an echo bubble?

    To understand the term "echo bubble", you have to understand what a bubble is. A financial or economic bubble occurs when ...
  4. What is the formula for calculating the debt-to-equity ratio?

    Find out how to use this fundamental financial ratio to help assess a company's performance.
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