Investing - All Content

  1. Why can you short sell an ETF but not an index fund?

    To answer this question, we should first define exactly what an index fund is. An index fund is a mutual fund, or a basket ...
  2. What is a "socially responsible" mutual fund?

    As the name suggests, socially responsible mutual funds invest exclusively in socially responsible investments. Securities ...
  3. International Reporting Standards Gain Global Recognition

    Comparing financial numbers from corporations in different countries is possible with the adoption of IFRS.
  4. What is the ideal number of stocks to have in a portfolio?

    First off, there is no single correct answer to this question - it will depend on a number of factors such as your country ...
  5. Economic Meltdowns: Let Them Burn Or Stamp Them Out?

    Whether the Fed should intervene in market bubbles is up for debate. Learn about both sides here.
  6. What is the difference between a simple moving average and an exponential moving ...

    The only difference between these two types of moving average is the sensitivity each one shows to changes in the data used ...
  7. What is the short/current long-term debt account on a company's balance sheet?

    A lot of confusion can arise with this balance sheet account. After all, how can something be both long and short? Despite ...
  8. Common Risks That Can Ruin Your Retirement

    These unexpected bumps can sideline your post-work plans and prevent you from riding out your assets.
  9. How is spread calculated when trading in the forex market?

    First, remember that in the forex markets investors trade one currency for another. Therefore, currencies are quoted in terms ...
  10. A Deeper Look At Alpha

    The Jensen index helps investors compare realized returns to what should've been achieved.
  11. 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 ...
  12. Why are big foreign companies considering delisting their American depositary receipts?

    American depositary receipts (ADRs) were developed to give investors an easier way to invest in foreign companies. An ADR ...
  13. World's Wackiest Stock Indicators

    Can butter production help you predict the market's next move? Find out here.
  14. 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 ...
  15. Can a church issue a bond?

    The North American Securities Administrators Association (NASAA) has acknowledged that "church bonds" are allowed to be issued ...
  16. Immunization Inoculates Against Interest Rate Risk

    Big-money investors can hedge against bond portfolio losses caused by rate fluctuations.
  17. How is the Parabolic SAR used in trading?

    The parabolic SAR is a popular indicator that is mainly used by traders to determine the future short-term momentum of a ...
  18. 10 Steps To Retire A Millionaire

    Making this dream come true takes work, but it's well worth the effort.
  19. How do I avoid paying excess taxes on securities I have sold?

    If you dispose of securities during the tax year, the profit or losses from the transaction are either capital gains or losses. ...
  20. House Your Retirement With Self-Directed Real Estate IRAs

    Investors are now able to invest directly in real property, mortgages and other assets.
  21. Why do longer term CDs pay a higher rate than the short-term CDs?

    To address this question, let's employ the concept of distance. In the city, a short taxi ride from your hotel to a convention ...
  22. Bear Spray For Your 401(k)

    You can defend your retirement savings from the ravages of a bear market. We'll show you how.
  23. What is the "random walk theory" and what does it mean for investors?

    The random walk theory is the occurrence of an event determined by a series of random movements - in other words, events ...
  24. 10 Tips For Choosing An Online Broker

    Investing online is cheaper, safer and easier than ever before. Find out how to choose the broker that will help you get ...
  25. Profiting From The Bollinger Squeeze

    Learn how Bollinger's "squeeze" can help you determine breakout direction.
  26. Trader's Corner - An Interview With A Success

    You too can use the strategies of one man who turned $11,000 into more than $18 million in 18 months.
  27. Where Top Down Meets Bottoms Up

    Find the investing "sweet spot" by combining these two styles.
  28. Top 5 Reasons For A Stock Slide

    Prices seldom drop without cause. Find out what might make your stock hit the skids.
  29. Solving Mixed Options Problems On The Series 7

    Learn to ace the questions that involve both options contracts and stock positions.
  30. Principal-Protected Investments: Risks, Fees And Regulations

    Discover if these instruments hit the right note for you.
  31. Mechanical Investing Not A Golden Key

    Direct paths to wealth are getting narrower, fewer and may be locked up tight.
  32. What is market capitulation?

    By definition, capitulation means to surrender or give up. In financial circles, this term is used to indicate the point ...
  33. What's the smallest number of shares I can buy?

    Unlike mutual funds, which can be purchased in fractional units, shares of stock cannot be divided. So, the smallest number ...
  34. For Companies, Green Is The New Black

    Sustainability and reducing environmental impact are hot corporate objectives. Find out why.
  35. What is a stripped bond?

    The quick answer to this question is that a stripped bond is a bond that has had its main components broken up into a zero-coupon ...
  36. I will be receiving monies from a QDRO executed pursuant to my divorce. I would like ...

    There are several issues to consider: The early distribution penalty - Assets distributed from a qualified plan in accordance ...
  37. If I have a number of stock shares and that company reports earnings of X amount ...

    Simply? Yes and no.Part of the answer to your question is "no" because when a company reports $X of earnings per share in ...
  38. If the price of the bond falls, does that mean the company won't pay me the par value?

    When you buy a bond, you are loaning money to the issuer. Because a bond is a loan, the interest paid to the bondholder is ...
  39. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ...
  40. 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, ...
  41. Which option is better on a mutual fund: a growth option or a dividend reinvestment ...

    When selecting a mutual fund, an investor has to make an almost endless number of choices. Among the more confusing decisions ...
  42. Does the party loaning shares in a short sale transaction benefit in any way other ...

    To answer this question, we first need to clarify who is doing the lending in a short sale transaction. Many individual investors ...
  43. How does a point change in a major index effect its equivalent exchange-traded fund?

    The S&P 500 and Dow Jones Industrial Index (DJIA) are two of the most well-known indexes tracking the movement of the ...
  44. What is a basis point (BPS)?

    A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial ...
  45. Taking The Sting Out Of Investment Loss

    Get a hold of yourself! Take losses in stride and learn to invest dispassionately.
  46. How can I hedge against rising diesel prices?

    In early 2007, the New York Mercantile Exchange announced that traders would be able to buy or sell futures contracts on ...
  47. What is the difference between a logarithmic price scale and a linear one?

    The interpretation of a stock chart can vary among different traders depending on the type of price scale used when viewing ...
  48. Is tracking error a significant measure for determining ex-post risk?

    Before we answer your question, let's first define tracking error and ex-post risk. Tracking error refers to the amount by ...
  49. Value Investing + Relative Strength = Higher Returns

    Buying value stocks that are moving higher helps investors steer clear of value traps.
  50. Does a stock dividend dilute the price per share as would a forward stock split?

    Every corporation has the same goal in mind: to maximize shareholder wealth. This goal is fulfilled in two different ways, ...
  51. How does a depository bank benefit from issuing an ADR for a foreign company for ...

    For domestic investors the benefits of increasing the portion of their portfolio that they invest in foreign companies is ...
  52. The Globalization Of Financial Services

    The key to survival for many financial institutions will be to efficiently serve a global customer base.
  53. What effect does a company's dividend reinvestment plan have on its stock price? ...

    When a dividend is received, an investor has two options: to keep the proceeds in a bank account or reinvest them. For the ...
  54. Who sets the price of commodities?

    Commodities are extremely important as they are essential factors in the production of other goods. A wide of array of commodities ...
  55. What do the bracketed numbers following a technical indicator mean?

    In technical analysis, it is common to see a series of numbers following a given technical indicator, usually in brackets. ...
  56. Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  57. What happens to my call options if the underlying company is bought out?

    Typically, the announcement of a buyout offer by another company is a good thing for shareholders in the company that is ...
  58. Questioning The Virtue Of A Short Sale

    This controversial strategy is blamed for making and breaking markets. Read on to learn more.
  59. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ...
  60. I sold my house. Can I exclude the gain from my income?

    Generally, you are required to include the gain from the sale of your home in your taxable income. However, if the gain is ...
  61. I would like to invest in a dividend-paying stock. How can I find out which stocks ...

    There are several accessible sources to help investors identify dividend-paying stocks. Here are a few we can recommend: ...
  62. Why A Falling Stock Is Not Always A Bargain

    Learn how to successfully trade pullbacks and to avoid being crushed by "falling safes."
  63. Short Selling Risk Can Be Similar To Buying Long

    If more people understood short selling, it would invoke less fear, which could lead to a more balanced market.
  64. How do I calculate the percentage gain or loss for my portfolio when all of the stocks ...

    Finding the total percentage gain or loss on a portfolio requires a few simple calculations. First, you should understand ...
  65. 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 ...
  66. The Wall Street Animal Farm: Getting To Know The Lingo

    Finance professionals speak a different language, but the terms they use are more familiar than you think.
  67. Take Control With Investing Absolutes

    Uncover the three things most good stocks have in common: performance, profitability and value.
  68. How much will it cost me to become a casual investor on my own?

    Understanding the costs associated with becoming a casual investor is important if you want to be successful. It is important ...
  69. What causes a recession?

    According to the National Bureau of Economic Research (NBER), recession is defined as "a significant decline in economic ...
  70. Why did dotcom companies crash so drastically?

    The craze of the dotcom bubble and the flood of capital that came with it led to many back-of-the-napkin business models ...
  71. 6 Ways To Maximize The Value Of Your 401(k)

    From matching employer contributions to proper asset allocation, we'll tell you how to get the most out of your plan.
  72. Trade Takeover Stocks With Merger Arbitrage

    This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions.
  73. Peer Comparison Uncovers Undervalued Stocks

    Learn how to put one of the top equity analysis tools to work for you.
  74. Who Is To Blame For The Subprime Crisis?

    From lenders to buyers to hedge funds, it appears everyone has blood on their hands.
  75. What does it mean when a bond is selling at a premium? Is it a good investment?

    When the terms premium and discount are used in reference to bonds, they are telling investors that the purchase price of ...
  76. How are the interest charges calculated on my margin account?

    One way that investors borrow funds from brokerages is through margin accounts; it is these interest charges that allow them ...
  77. High-Risk Retirement Portfolio Not Always Taboo

    Find out how much risk your portfolio can take and whether your money will last.
  78. I have a short period of time (1 year or less) during which I will have money to ...

    If you only have a short period of time in which to invest your money (i.e. less than one year), there are several investment ...
  79. Fatal Seduction Of The Municipal Bond Insurers

    Learn how a foray into CDOs and other exotic products ruined an industry's image.
  80. Bond Yield Curve Holds Predictive Powers

    This measure can shed light on future economic activity, inflation levels and interest rates.
  81. Where can I get a company's prospectus and/or financial statements?

    These types of company documents have become increasingly accessible with the advent of the Internet. Most companies have ...
  82. Investment Suitability 101

    This a fundamental concept from both a legal and practical perspective.
  83. What is an efficient market and how does it affect individual investors?

    When people talk about market efficiency they are referring to the degree to which the aggregate decisions of all the market's ...
  84. Stocks Are No.1

    Historically, stocks provide the highest returns - but only under certain conditions.
  85. If I short sell $5,000 worth of stock and the stock becomes worthless, I have made ...

    The simple answer is that the maximum return of any short sale investment is in fact 100%. However, the concepts underlying ...
  86. The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  87. What are the minimum margin requirements for a short sale account?

    In a short sale transaction, the investor borrows shares and sells them on the market in the hope that the share price will ...
  88. Overseas Investing No Protection Against Downturn

    The U.S. economy affects many other countries. Find out what this can mean for overseas investments.
  89. My certificate of deposit (CD) has just matured and I plan to contribute $10,000 ...

    Your regular Roth IRA contribution can't exceed $4,000 annually. If you are at least age 50 by Dec 31, 2005, you can contribute ...
  90. Value Investing Using The Enterprise Multiple

    This simple measure can help investors determine whether a stock is a good deal.
  91. Why do companies issue debt and bonds? Can't they just borrow from the bank?

    Companies issue bonds to finance operations. Most companies can borrow from banks, but view direct borrowing from a bank ...
  92. The Basics Of Game Theory

    Break down and examine the potential consequences of economic/financial scenarios.
  93. Do stop or limit orders protect you against gaps in a stock's price?

    Many individuals are hesitant to invest in the stock market because of the large gaps in prices talked about in the news. ...
  94. Is there a difference between ADR and ADS?

    American depositary receipts (ADRs) allow foreign equities to be traded on U.S. stock exchanges; in fact, this is how the ...
  95. Multivariate Models: The Monte Carlo Analysis

    This decision-making tool integrates the idea that every decision has an impact on overall risk.
  96. How does a stock split affect cash dividends?

    When a company decides to issue a stock split (or stock dividend), a couple of possibilities could occur concerning what ...
  97. Why do all mutual fund tickers have an X at the end?

    It's true that all mutual funds' tickers have an X at the end of their symbol. The reason for this is to distinguish between ...
  98. Are mutual fund performance numbers reported net of fees (operating expenses and ...

    The answer depends on how you define "operating expenses."Let's look at a cinematic metaphor to clear up this apparent ambiguity. ...
  99. Who bears the risk of bad debts in securitization?

    Bad debts arise when borrowers default on their loans. This is one of the primary risks associated with securitized assets, ...
  100. Mark-To-Market Mayhem

    Did this accounting convention contribute to the credit crisis of 2008? Find out here.
  101. What is the "Nifty 50"?

    The Nifty 50 was a group of the 50 most popular large cap stocks on the New York Stock Exchange in the 1960s and 1970s. The ...
Frequently Asked Questions
  1. Why is the Accumulative Swing Index helpful for traders and/or investors?

    Find out why J. Welles Wilder believed that the accumulative swing index could be used in the futures markets to indicate ...
  2. How is the Aroon oscillator interpreted by traders?

    Learn more about the Aroon oscillator, a technical indicator developed to spot trends in price movements for any given stock ...
  3. What is the Aroon indicator formula and how is the indicator calculated?

    Read about the two formulas used to derive Aroon up and Aroon down, the dual indicators that make up the Aroon system, and ...
  4. What does a Bullish Homing Pigeon pattern tells a trader?

    Learn about a double candlestick pattern called the bullish homing pigeon, a bullish indicator that is composed of two consecutive ...
Trading Center