Investing - All Content

  1. What is the haircut rate imposed by clearing corporations?

    A haircut rate is a measure that reduces the value of any collateral used in a loan to ensure that when the effects of volatility ...
  2. What will happen to my U.S.-based stock portfolio if the U.S. dollar substantially ...

    The effect of a significant depreciation in the value of the U.S. dollar on the value of an investor's U.S-based portfolio ...
  3. How can I use market breadth to my advantage?

    Market breadth is a study that compares the number of companies on a given exchange that have created new 52-week highs to ...
  4. Payment Option ARMs: A Ticking Time Bomb?

    With these mortgages the loan's principal can continue to increase - even as payments are made.
  5. 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 ...
  6. Is finance an art or a science?

    The short answer to this question is "both". Finance, as a field of study and an area of business, definitely has strong ...
  7. 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 ...
  8. What is a treasury stock?

    Every company has an authorized amount of stock it can issue legally. Of this amount, the total number of shares owned by ...
  9. How does a person gain from an investment?

    There are two main ways in which a person gains from an investment. The first is by capital gains, the difference between ...
  10. Is it possible to buy mutual funds using a margin account?

    Because of the pricing/trading mechanisms used with mutual funds, they cannot be bought and sold like stocks. When trading ...
  11. Can a company declare a dividend that exceeds its earnings per share?

    Yes, it can. In fact, many well-known Fortune 500 companies have paid dividends in years where they posted negative earnings ...
  12. Learn To Invest In 10 Steps

    Want to invest but don't know where to start? Learn how to make your money work for you with these tips.
  13. Why Are Mortgage Rates Increasing?

    Learn how the secondary mortgage market and investor demand affect the cost of home ownership.
  14. 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 ...
  15. The Pros And Cons Of Institutional Ownership

    These big players can both create and destroy value for shareholders.
  16. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always ...

    The short answer? No. The long answer? It depends.The price-to-earnings ratio (P/E ratio) is calculated as a stock's current ...
  17. How To Use Gann Indicators

    This trendline-like technical analysis tool has been around for decades - but it still works.
  18. Defeasance Reduces Commercial Real Estate Fees

    Try this alternative to short-term variable-rate financing when using leverage to buy property.
  19. 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 ...
  20. Five Investing Pitfalls To Avoid, According to Investor's Business Daily

    Common sense or common folly? Discover some approaches to circumventing typical stumbling blocks on the road to profitable ...
  21. Why would my stock's value decline despite good news being released?

    More often than not, when a firm releases an earnings report the market will react to this news by adjusting the firm's stock ...
  22. ETN Credit Risk May Outweigh Benefits For Some

    Exchange-traded notes have many benefits, but they may not be suited to risk-averse investors.
  23. The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  24. 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.
  25. How many types of markets can an investor choose from?

    There are a wide variety of markets in which one can invest money. The main markets are stocks (equity), bonds, forex, derivatives ...
  26. Does issuing preferred shares offer a tax advantage for corporations?

    There is no direct tax advantage to the issuing of preferred shares when compared to other forms of financing such as common ...
  27. Divergences, Momentum And Rate Of Change

    Divergences may signal a change in market direction, but traders must also identify the speed of that change.
  28. Why do commercial bills have higher yields than T-bills?

    The reason that commercial bills have higher yields than T-bills is due to the varying credit quality of each bill type. ...
  29. Are eurodollars related to the currency called the euro?

    Eurodollars have little to do with the official currency of the European Union, the euro (EUR). In 1999, the euro was implemented ...
  30. Introduction To Stationary And Non-Stationary Processes

    What to know about stationary and non-stationary processes before you try to model or forecast.
  31. 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 ...
  32. What is socially responsible investing?

    In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to ...
  33. How do you calculate the cost basis for a mutual fund over an extended time period?

    Investors must pay taxes on any investment gains they realize. Subsequently, any capital gain realized by an investor over ...
  34. 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 ...
  35. Five Companies Leading The Green Charge

    Corporations that reduce their environmental footprint anticipate large long-term gains.
  36. Why do low interest rates cause investors to shy away from the bond market?

    The lower rates that are found on bonds, especially government-backed bonds, are often not seen as enough by investors. This ...
  37. 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 ...
  38. Five Strategies For Surviving Tough Times

    Cruise through a slowing economy - even when others are going off the rails.
  39. Index-Linked Certificates Of Deposit: Upside Potential, Low Risk

    Index-linked CDs generate returns similar to indexes, without the potential for loss.
  40. How do you calculate the percentage gain or loss on an investment?

    Calculating the percentage change of your investment is quite easy. All it takes is a little bookkeeping and either a simple ...
  41. 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 ...
  42. What is property, plant and equipment, and what does it mean?

    Property, plant and equipment (PP&E) is a term that describes an account on the balance sheet. The PP&E account is ...
  43. Why is it that when investors realize returns on a mutual fund, its price tends to ...

    Mutual funds have been in existence since 1924, when the first open-ended mutual fund was created. Since then, the market ...
  44. How can you lose more money than you invest shorting a stock? If you have no money ...

    The simple answer to this question is that there is no limit to the amount of money you can lose in a short sale. This means ...
  45. 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 ...
  46. Value Traps: Bargain Hunters Beware!

    Find out how to avoid getting sucked in by a deceiving bargain stock.
  47. What is the 'Rule of 72'?

    The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of ...
  48. What You Get When You Pay For Investment Services

    There are three value components in investing. Can you save money by doing some of them yourself?
  49. Stimulate Your Skills With Simulated Trading

    Think you can beat the Street? We'll show you how to test your abilities without losing your shirt.
  50. Triple Screen Trading System - Part 6

    Williams %R can confirm the strength of trends and warn of reversals. Find out how to use it as the second screen in this ...
  51. Why doesn't the price of a callable bond exceed its call price when interest rates ...

    A callable bond provides the issuer (borrowing entity) with an option to redeem the bond before its original maturity date. ...
  52. International Reporting Standards Gain Global Recognition

    Comparing financial numbers from corporations in different countries is possible with the adoption of IFRS.
  53. What's the difference between a load and no-load mutual fund?

    A mutual fund is simply a large group of people who lump their money together for a management company to invest. And, like ...
  54. Who or what are the turtles?

    The "turtles" was a nickname given to a group of traders who were a part of an experiment run by two famous commodity traders. ...
  55. How can I determine a stock's next resistance level or target price?

    Determining where the price of an asset will stop once it has created a new high is one of the most difficult tasks for any ...
  56. When does one sell a put option, and when does one sell a call option?

    The incorporation of options into all types of investment strategies has quickly grown in popularity among individual investors. ...
  57. Can you place a stop-loss order on a mutual fund?

    First, remember that a stop-loss order is a limit order placed with a broker to sell a stock when it reaches a certain price. ...
  58. Who's in charge of managing exchange-traded funds?

    An exchange-traded fund (ETF) is a security that tracks an index but has the flexibility of trading like a stock. Just like ...
  59. ADX: The Trend Strength Indicator

    Follow this tool to reduced risk and increase profit potential.
  60. Do Adaptive Moving Averages Lead To Better Results?

    These complex indicators can help traders interpret trend changes, but are they too good to be true?
  61. 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. ...
  62. Is it true that you can sell your home and not pay capital gains tax?

    It is true in most cases. When you sell your home, the capital gains on the sale are exempt from capital gains tax. Based ...
  63. Monte Carlo Simulation With GBM

    Learn to predict future events through a series of random trials.
  64. What does investment grade mean?

    Credit ratings provide a useful measure for comparing fixed-income securities, such as bonds, bills and notes. Most companies ...
  65. 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 ...
  66. What is a spider and why should I buy one?

    The term spider is the commonly-used expression to describe the the Standard & Poor's Depository Receipt (SPDR). This ...
  67. Bear Spray For Your 401(k)

    You can defend your retirement savings from the ravages of a bear market. We'll show you how.
  68. Mechanical Investing Not A Golden Key

    Direct paths to wealth are getting narrower, fewer and may be locked up tight.
  69. Which of the following statements regarding the performance of a mutual fund would ...

    A) Income and safety-oriented investors need look no further than the Muscat GNMA fund. Since the only investments held by ...
  70. Can investment real estate be purchased within an IRA and, if so, are there any pitfalls?

    Investment real estate can be purchased with an IRA provided the investment does not violate the prohibited transaction rules.An ...
  71. Sympathy Sell-Off: An Investor's Guide

    Find out how to tell whether your stock is a bargain or a bank breaker.
  72. The Fuel That Fed The Subprime Meltdown

    Take a look at the factors that caused this market to flare up and burn out.
  73. 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. ...
  74. 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 ...
  75. I have only $500 to invest, am I limited to buying only penny stocks?

    No, you are not required to invest only in penny stocks - investors are generally not restricted to a certain kind of stock ...
  76. What are 'death spiral' convertible bonds?

    Conventional convertible bonds give the bondholder the right to exchange the bond for a certain amount of the issuer's common ...
  77. Can an open-ended fund's price appreciate significantly?

    Theoretically, open-end mutual fund prices can experience a significant increase in price. However, three factors need to ...
  78. How does a stop-loss order work, and what price is used to trigger the order?

    A stop-loss order, or stop order, is a type of advanced trade order that can be placed with most brokerage houses. The order ...
  79. Who is Mr. Copper?

    A sense of mystery still surrounds Yasuo Hamanaka, a.k.a. Mr. Copper, and the magnitude of his losses. From his perch at ...
  80. What is a GTEM order?

    GTEM stands for "good 'til extended market". This is a type of duration order that investors can place with their brokers, ...
  81. How The Big Boys Buy

    Learn what those in-the-know look for when acquiring a company.
  82. Make Ex-Dividends Work For You

    Find out how to keep your dividends out of the tax man's hands.
  83. What are "I Bonds" and how can I buy them?

    The term "I Bond" is industry lingo for inflation-linked savings bonds issued by the U.S. Treasury. You've probably heard ...
  84. Side-By-Side Management May Favor Hedge Over Mutual Funds

    Having your firm handle both investments can spell disaster for your returns.
  85. I want to invest in equities, but I don't have much money. Is there a minimum number ...

    The short answer is "no" - you can buy a single share of any publicly traded company if you want to. Thus, if you have a ...
  86. Rate Freeze To Cool Mortgage Meltdown

    The U.S. government is offering help to subprime borrowers. Is this a cure or a curse?
  87. How do I open a Swiss bank account, and what makes them so special?

    Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account because you have ...
  88. What parties are involved in the creation of an American depositary receipt?

    An American depositary receipt (ADR) is a legal certificate issued by a recognized U.S. bank that represents a specific number ...
  89. The Impact Of Recession On Businesses

    Find out how this economic cycle affects both small and big business.
  90. Do all international markets trade between 9:30am and 4pm local time?

    The New York Stock Exchange and Nasdaq both trade between 9:30am and 4pm Eastern Time. All major stock exchanges trade at ...
  91. Einstein's Stock Tips: Gravity and Growth

    Can applying the theory of relativity help you pick a stock? Find out more here.
  92. Investment Services Stump Investors

    What you're getting isn't easy to determine. Find out how to get your money's worth.
  93. How do investors lose money when the stock market crashes?

    Over the last hundred years, there have been several large stock market crashes that have plagued the American financial ...
  94. Financial History: The Evolution Of Accounting

    Follow accounting from its roots in ancient times to the profession we now depend on.
  95. Are my investments insured?

    No. Whenever you invest in a stock, bond or mutual fund, there is no insurance against the possible loss of your initial ...
  96. Should I buy options that are in the money or out of the money?

    Choosing which specific option to buy can often be a complicated process, and there are literally hundreds of optionable ...
  97. Tic-Tac-Toeing Your Way To Better Returns

    Point-and-figure charts eliminate the noise surrounding a stock to help you determine where it's headed.
  98. What is political risk and what can a multinational company do to minimize exposure?

    For multinational companies, political risk refers to the risk that a host country will make political decisions that will ...
  99. 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 ...
  100. Battered Stocks That Bounce Back

    Companies with falling revenues can be profitable, but choose them with care.
Frequently Asked Questions
  1. What are the best technical indicators that complement the Relative Vigor Index (RVI)?

    Discover some of the best technical indicators that traders and analysts can employ to supplement the use of the relative ...
  2. What are the best technical indicators that complement the Relative Strength Index (RSI)?

    Learn some of the best additional technical indicators that can be used along with the relative strength index to anticipate ...
  3. Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined ...
  4. How can retirees protect their wealth in a bear market?

    Look at some helpful hints about how to protect your retirement nest egg when the stock market is underperforming or the ...
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