FAQs tagged as

Investing-Basics

  1. I keep hearing about the 50-day, 100-day and 200-day moving averages. What do they mean, how do they differ from each other, and what causes them to act as support or resistance?

  2. How do investors lose money when the stock market crashes?

  3. I want to try short selling, but how can I sell something that I don't own?

  4. Given a good bookkeeping system, would financial accounting be necessary?

  5. Why do companies postpone earnings announcements?

  6. What does CHIPS UID mean?

  7. On what days are the American stock exchanges closed?

  8. I would like to invest in a dividend-paying stock. How can I find out which stocks pay dividends?

  9. What constitutes an "intention to call a debt instrument before maturity" for tax purposes?

  10. How can I budget for both short-term expenses and long-term goals?

  11. What is the "random walk theory" and what does it mean for investors?

  12. What are elves?

  13. Where can I find a list of all of the stocks in the S&P 500?

  14. What does "after the bell" mean?

  15. Where does the name "Wall Street" come from?

  16. Why don't investors buy stock just before the dividend date and sell right afterwards?

  17. Where can I find historical stock/index quotes?

  18. If I own a stock in a company, do I get a say in the company's operations?

  19. How do you calculate the percentage gain or loss on an investment?

  20. I've heard some "market gurus" claim returns of up to 400% annually. Is this possible?

  21. Who employs the specialists at New York Stock Exchange (NYSE)? Do they work for themselves, for the NYSE or for brokerage firms?

  22. There are so many stockbrokers out there. How do I go about choosing the best one for me?

  23. Can a stock have a negative price-to-earnings (P/E) ratio?

  24. What is the weighted average of outstanding shares? How is it calculated?

  25. How do I calculate how much I've gained or lost on a stock holding?

  26. Which is a better measure for capital budgeting, IRR or NPV?

  27. Is a Canadian resident allowed to participate in a direct stock purchase plan from a U.S. company such as Pfizer?

  28. When computing the PEG ratio for a stock, how is a company's earnings growth rate determined?

  29. Why would a stock that pays a large, consistent dividend have less price volatility in the market than a stock that doesn't pay dividends?

  30. What is property, plant and equipment, and what does it mean?

  31. How does a depository bank benefit from issuing an ADR for a foreign company for free?

  32. Can investors short sell pink sheet or over-the-counter stocks?

  33. What are the advantages and disadvantages for a company going public?

  34. Is preferred stock an equity or a fixed-income security?

  35. Are mutual fund performance numbers reported net of fees (operating expenses and 12b-1)?

  36. When is a takeover bid legally canceled?

  37. When is earnings season?

  38. How much will it cost me to become a casual investor on my own?

  39. What is a back door listing?

  40. What was the Whitewater scandal?

  41. What's the difference between a mutual fund and a hedge fund?

  42. How rapidly can expanding sales reduce a firm's earnings?

  43. If the stock market is so volatile, why would I want to put my money into it?

  44. What does it mean when people say they "beat the market"? How do they know they have done so?

  45. Can a stock lose all its value? How would this affect a long or short position?

  46. What's the difference between absolute P/E ratio and relative P/E ratio?

  47. Are ETFs required to pay out a percentage of income as dividends?

  48. What are the minimum margin requirements for a short sale account?

  49. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always a better investment than a stock with a higher one?

  50. Is finance an art or a science?

  51. How do I find the CUSIP number for a particular stock?

  52. Where can I get bond market quotes?

  53. What is the difference between hedging and speculation?

  54. What happens if a company doesn't think it will collect on some of its receivables?

  55. What is the difference between a compiled and a certified financial statement?

  56. Why would a multinational corporation conduct a vertical foreign direct investment?

  57. What happens to my call options if the underlying company is bought out?

  58. Can I sell mutual fund shares below their minimum intial purchase amount without being penalized?

  59. How do I calculate my gains and/or losses when I sell a stock?

  60. I have a KSOP through my employer that I've invested 100% in company stock. I am now concerned that I'm not diversified and would like to move out of company stock and into mutual funds. Is this allowed with the funds I've contributed to the account?

  61. A cash buyout agreement has been announced for a stock I own, but why isn't my stock trading at a per-share price equal to the buyout price?

  62. Who was Parker Dozhier and why was he called a "bag man"?

  63. What is a blackout period?

  64. What is the incentive to buy a stock without dividends?

  65. What's the difference between pre-money and post-money?

  66. What exactly is a portfolio? Is it something I can carry around?

  67. I get multiple mailings to my house from companies that my spouse, children and I all own. Is there any way to stop the duplicate mailings?

  68. What is a split-adjusted share price?

  69. What does 'going public' mean?

  70. What does it mean to use technical divergence in trading?

  71. Is there such a thing as a nano cap or micro cap index?

  72. When short selling a stock, how long does a short seller have before covering?

  73. Short selling vs. purchasing a put option: how do the payoffs differ?

  74. How do I figure out my cost basis on a stock investment?

  75. What's the difference between short-term investments in marketable securities and equity?

  76. Do traders, market makers, specialists or others ever deliberately drive a stock's price down to "shake out" the last sellers?

  77. Why are big foreign companies considering delisting their American depositary receipts?

  78. In M&A how does an all-stock or all-cash deal affect the equity of the buying company?

  79. Is maximizing stock price the same thing as maximizing profit?

  80. What should I use as a benchmark for my small-cap stock portfolio?

  81. When looking at my online broker account, I see an account value, cash value and purchase power number. How are these calculated?

  82. How does a stock split affect cash dividends?

  83. Can you place a stop-loss order on a mutual fund?

  84. At what point in the ordering process does a broker charge commission?

  85. What is a rainmaker?

  86. What is the Pac-Man defense?

  87. Do I receive the posted dividend yield every quarter?

  88. What is a company's worth, and who determines its stock price?

  89. What is a stock split? Why do stocks split?

  90. What is the difference between a global fund and an international fund?

  91. How does the government influence the securities market?

  92. What does membership in the New York Stock Exchange entail, and why is it known as "owning a seat"?

  93. How can I buy an S&P 500 fund?

  94. Is it possible for a company to have a positive cash flow and a negative net income?

  95. What happens to the voting rights on shares when the shares are used in a short sale transaction?

  96. Why does my broker allow me to enter only day orders for short selling?

  97. What does it mean when financial news reports say that more issues were sold than bought?

  98. What is the difference between a merger and a takeover?

  99. Who are the key players in the bond market?

  100. What parties are involved in the creation of an American depositary receipt?

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