1. GICS Vs. ICB: Competing Systems For Classifying Stocks

    Global Industry Classification Standards and the Industrial Classification Benchmark separate stocks into sectors.
  2. Get A Strong Hold On Profit With Strangles

    Forget straddles. These strangles are both liberating and legal in the investing world.
  3. Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  4. Financial Planners: Practice What You Preach

    "Do as I say and not as I do" doesn't make for a great professional reputation.
  5. Hidden Costs Of Product Rebates

    These cash incentives lure in consumers, who are often unable to collect on the deal.
  6. Combining Credit For A Happy Financial-Ever-After

    A couple's finances may not always be a match made in heaven. Find out when to say "I Do".
  7. Retirement Funds To Fund Startups

    Retired entrepreneurs who have "played it safe" and retirees who want to stretch their dollars are looking to invest here.
  8. Market Bottom: Are We There Yet?

    No one rings a bell when the bear market's over, but that doesn't mean there's no way to predict a bottom.
  9. What's the difference between "top-down" and "bottom-up" investing?

    Before we look at the differences between top-down and bottom-up investing, we should make it clear that both of these approaches have the same goal - to ferret out great stocks. Now, let's look at the different strategies used by top-down vs. bottom-up investors to select companies in which to invest.
  10. I'm a teacher. Which is better for me, a 401(k) or 403(b)? What is the difference? ...

    The first step is to check with your employer regarding any retirement plan(s) it provides for employees, as you can only participate in a plan sponsored by your employer. As an employee, you are not allowed to adopt any employer sponsored plan, including 401(k) and 403(b) plans.
  11. What qualifies a person as a day trader?

    As of Sept 28, 2001, the NASD (now, FINRA) and NYSE amended their definitions of day traders. A new term that they use is "pattern day trader". An investor can be classified as a pattern day trader by having one of the two following characteristics: He or she trades four or more times during ...
  12. Is it permissible for a 70-year-old person to buy an IRA?

    It depends. For Roth IRAs, there are no age restrictions. For Traditional IRAs, there are no age restrictions if you are establishing a new IRA to which you will transfer or roll assets from another IRA or eligible retirement plan, such as a qualified plan, 403(b) account or 457(b) account.
  13. What is the difference between fundamental and technical analysis?

    These terms refer to two different stock-picking methodologies used for researching and forecasting the future growth trends of stocks. Like any investment strategy or philosophy, both have their advocates and adversaries. Here are the defining principles of each of these methods of stock analysis: ...
  14. What's the difference between pre-money and post-money?

    The short answer to the question is that they differ in timing of valuation. Both pre-money and post-money are valuation measures of companies. Pre-money refers to a company's value before it receives outside financing or the latest round of financing, while post-money refers to its value after it gets ...
  15. Can I roll over a profit-sharing plan to an SEP IRA account without suffering any ...

    It depends. If the transaction is processed as a direct rollover to the SEP IRA, then no taxes will be withheld. Through a direct rollover, the assets are made payable to the SEP IRA custodian (or trustee or plan to which the assets are being rolled).
  16. What is the difference between a blend fund and a balanced fund?

    As both "blend"and "balanced" describe the particular asset mix of mutual funds, determining the exact distinctions between the two can be difficult.Blend funds, which contain only stocks and no fixed-income securities, are a type of equity fund that holds a mix of both growth stock and value stock.
  17. If an individual still has his or her former spouse as the beneficiary of an IRA, ...

    It depends. Generally, divorce does not effectively change a beneficiary designation unless the divorce decree makes a stipulation to change the beneficiary. It could be argued that the individual retirement account (IRA) owner wants the former spouse to remain the beneficiary of this IRA.
  18. Does the five-year rule apply if a non-spouse inherits an IRA after the required ...

    The five-year rule applies only when the IRA owner dies before the required beginning date (RBD). If the IRA owner dies after the RBD and did not satisfy the required minimum distribution (RMD) for the year of death, the beneficiary must satisfy the RMD on behalf of the deceased.
  19. Can I contribute to both a 529 plan and a Coverdell education savings account?

    You can contribute to both, and when your child is ready to attend college, as colleges do accept payments from both. There are some features and benefits that may make one account more favorable than the other. For instance, the Coverdell education savings account (formerly Education IRA) may be used ...
  20. What are soft dollars?

    The term soft dollars refers to the payments made by mutual funds (and other money managers) to their service providers. The difference between soft dollars and hard dollars is that instead of paying the service providers with cash (i.e. hard dollars), the mutual fund will pay in-kind (i.e.
  21. 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 interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.
  22. Is a company allowed to reduce its dividends?

    Yes. Companies have no restrictions - not from their exchange (NYSE, Nasdaq, AMEX, etc.), the SEC or the NASD - that require them to maintain a certain dividend level. However, it should be noted that the market often views a company's dividend reduction as a negative sign, which could result in a drop ...
  23. What is a boiler room operation?

    In the context of investing, the term "boiler room operation" refers to the use of high pressure sales tactics to sell stocks to clients who are "cold called", or called randomly, most likely after being picked out of a phone directory. Boiler rooms are often set up in inexpensive office spaces, where ...
  24. What's the difference between a straddle and a strangle?

    Straddles and strangles are both options strategies that allow the investor to gain on significant moves either up or down in a stock's price. Both strategies consist of buying an equal number of call and put options with the same expiration date; the only difference is that the strangle has two different ...
  25. 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 are that mutual funds offer diversification, convenience and lower costs. Many experts agree that almost all of the advantages of stock portfolio diversification (the benefits ...
  26. How do stock splits affect short sellers?

    The simple answer to this question is that stock splits do not affect short sellers in a material way. There are some changes that occur as a result of a split that do affect the short position, but they don't affect the value of the short position. The biggest change that happens to the portfolio is ...
  27. Are there tax penalties for closing my Roth IRA account?

    You can close your Roth IRA account without negative consequences if your total account balance is less than the accumulated amounts you deposited as regular contributions. Furthermore, if you distribute the total balance, you may be able to deduct the losses on your tax return.
  28. Why are some shares priced in the hundreds or thousands of dollars, while other just ...

    The answer can be found in stock splits - or rather, a lack thereof. The vast majority of public companies opt to use stock splits, increasing the number of shares outstanding by a certain factor (e.g. by a factor of two in a 2-1 split) and decreasing their share price by the same factor.By doing so, ...
  29. What is the difference between convertible and reverse convertible bonds?

    The difference between a regular convertible bond and a reverse convertible bond is the options attached to the bond. While a convertible bond gives the bondholder the right to convert the asset to equity, a reverse convertible bond gives the issuer the right to convert to equity.To review, convertible ...
  30. Once substantially equal periodic payments (SEPP) of an IRA have started, is the ...

    Typically, if you withdraw assets from an IRA or a qualified retirement plan sponsored by your employer while under the age of 59.5, you may owe ordinary income tax on these amounts, plus an additional 10% early-withdrawal penalty. However, you can avoid the early-withdrawal penalty by taking assets ...
  31. How do my siblings and I receive inherited pension benefit payments from our deceased ...

    Generally, the provisions of the plan document determine the distribution options available to beneficiaries of retirement plan assets. From a regulatory perspective, you are allowed to distribute the assets over the life expectancy of the oldest sibling.
  32. What technical tools can I use to measure momentum?

    One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the likelihood that it will continue. This is the primary purpose of indicators such as the moving average convergence divergence (MACD), stochastics, price rate of change (ROC) and the ...
  33. What Is The World Trade Organization?

    The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it?
  34. How does privatization affect a company's shareholders?

    The most recognized transition between the private and public markets is an initial public offering (IPO). Through an IPO, a private company "goes public" by issuing shares, which transfer a portion of ownership in the company to those who buy them. However, transitions from public to private also occur.
  35. What do the "BxA" numbers on my brokerage's trading screen mean?

    The letters 'B' and 'A' in the notation BxA refer to bid and ask, respectively. When you look at online stock quote data, some sources will provide you with a feed of the bid and ask outstanding order volumes for the stock in question. There is no standardized method for reporting this data, but usually ...
  36. What is dilutive stock?

    Dilutive stock is any security that dilutes the ownership percentage of current shareholders - that is, any security that does not have some sort of embedded anti-dilution provision. The reason why dilutive stock has such negative connotations is quite simple: a company's shareholders are its owners, ...
  37. 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 of its stock. A company may decide to use a reverse split to shed its status as a penny stock, or to avoid being delisted. A common type of reverse stock split is 1:2, which means ...
  38. 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 and physical assets. Furthermore, within each of these types of markets, there can be even more specialty markets.The market that is most familiar to the average investor ...
  39. What is a stock-for-stock merger and how does this corporate action affect existing ...

    First, let's be clear about what we mean by a stock-for-stock merger. When a merger or acquisition is conducted, there are various ways the acquiring company can pay for the assets it will receive. The acquirer can pay cash outright for all the equity shares of the target company, paying each shareholder ...
  40. How do you tell whether an option is American or European style?

    As a quick recap, American-style options are options that can be exercised at the strike price anytime before or on the date of expiration. European-style options, on the other hand, are options that can only be exercised at the time of expiration.All other things being equal, American-style stock options ...
  41. How can I sell private company stock?

    In some instances, both private and public companies may issue shares to their own employees as part of a compensation program. This action is designed to motivate employees by tying a portion of their earnings to the company's earnings. In some cases, people may eventually want to sell their shares.
  42. DMI Points The Way To Profits

    The directional movement index tells you whether to go long, short or stand aside.
  43. What does the diluted share price reveal about a company's financial strength?

    When a corporation releases its financial information, there are a few different variations used when reporting total earnings. These variations are: total dollar amounts, earnings as a percent of total revenue, earnings per share (EPS) and diluted EPS.
  44. 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 a summation of all a company's purchases of property, manufacturing plants and pieces of equipment to that point in time, less any amortization.
  45. 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 prove to have adverse effects on the multinational's profits and/or goals. Adverse political actions can range from very detrimental, such as widespread destruction due to revolution, ...
  46. What is the best time of the day to trade?

    Unlike traditional investing, trading, or day trading, has a very short-term focus. Analysis may be broken down to days, hours and even minutes. Because day trading focuses on such short time frames, the time of day in which a trade is made can be an important factor to consider.First thing in the morning, ...
  47. How do businesses decide whether to do FDI via green field investments or acquisitions?

    When businesses decide to expand their operations to another country, one of the more important dilemmas they can face is whether it is most beneficial to have the business take matters into its own hands and create a fresh new site of operations in the foreign country via a green field investment, or ...
  48. 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 roughly the same local times in each of their respective countries.The other major exchanges in North America are the Toronto Stock Exchange (TSX) in Canada, and Bolsa Mexicana De ...
  49. What does CHIPS UID mean?

    CHIPS UID stands for Clearing House Interbank Payments System Universal Identifier. This is just a fancy name for an electronic clearinghouse database system, which facilitates the transfer of funds from both individual consumers and institutions. It is the back end of the automated clearing house (ACH) ...
  50. 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 quotes service. For example, you can find this information on the Yahoo Finance website in Key Statistics under Share Statistics.If you are interested in acquiring more detailed ...
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