FAQs tagged as

Investing-Basics

  1. What does "buy and hold" mean?

  2. What is a CUSIP number?

  3. Can preferred stocks be traded like common stocks? Are their prices the same?

  4. Which option is better on a mutual fund: a growth option or a dividend reinvestment option?

  5. How do stock splits affect short sellers?

  6. What is the cheapest, fastest way to research, buy and trade stock?

  7. What is the difference between a company's book value per share and its intrinsic value per share?

  8. What does the term "stock-for-stock" mean?

  9. How long does a stock that has done a reverse split keep the letter "D" at the end of its symbol?

  10. What is a stock-for-stock merger and how does this corporate action affect existing shareholders?

  11. What happens to the stock of a public company that goes bankrupt?

  12. What methods can be used to fund a forex account?

  13. Where do companies keep their cash?

  14. What is options backdating?

  15. Where do investors tend to put their money in a bear market?

  16. Why do share prices fall after a company has a secondary offering?

  17. What is a trailing commission?

  18. What is hedging as it relates to forex trading?

  19. What should I consider when I select an executor for my will?

  20. Why should investors pick less risky investments as they approach retirement?

  21. How do investors "chase the market"? It this a bad thing?

  22. What is a margin account?

  23. What's the difference between the Dow Jones Industrial Average and the S&P 500?

  24. Why would a stock have no par value?

  25. What is the difference between the Dow and the Nasdaq?

  26. How do I find historical prices for stocks?

  27. What is the "percentage off the 52-week high or low"? How is this calculated?

  28. What are defensive stocks?

  29. How do I take qualitative factors into consideration when using fundamental analysis?

  30. How can you lose more money than you invest shorting a stock? If you have no money left in your account, how do you pay it back?

  31. Does a stock split lead to the gapping up/down of the stock?

  32. Can investment real estate be purchased within an IRA and, if so, are there any pitfalls?

  33. What will happen to my U.S.-based stock portfolio if the U.S. dollar substantially decreases in value?

  34. Does issuing preferred shares offer a tax advantage for corporations?

  35. Which is the best index to use to study the possible future price action of a given small-cap stock?

  36. How does the required rate of return affect the price of a stock, in terms of the Gordon growth model?

  37. What is the difference between principles-based accounting and rules-based accounting?

  38. When should a company recognize revenues on its books?

  39. If a company moves its dividend record date forward, does the ex-dividend date change too?

  40. How does the ISIN numbering system work?

  41. How can unethical executives use options backdating to evade taxes?

  42. My family owns an old railroad bond from 1938. Is there any way to find out whether this still has any value?

  43. What is a liquidity squeeze?

  44. What are the advantages of using a mini forex account for trading?

  45. How do proxy fights work?

  46. What is a blank-check company?

  47. What is dead money?

  48. How do companies use the Pac-Man defense?

  49. What's the difference between "top-down" and "bottom-up" investing?

  50. Can you short sell ETFs?

  51. Where did the bull and bear market get their names?

  52. What is a wrap account and what are the advantages of using one?

  53. What is a penny stock?

  54. Can you short sell stocks that are trading below $5? My broker says that I can't.

  55. What is the best way to measure the total market?

  56. Why do accountants use debits and credits instead of simple pluses and minuses? Why is the notation for a debit "DR"?

  57. How does a pump and dump scam work?

  58. Why do you need a margin account to short sell stocks?

  59. If one of your stocks splits, doesn't that make it a better investment? If one of your stocks splits 2-1, wouldn't you then have twice as many shares? Wouldn't your share of the company's earnings then be twice as large?

  60. How can I hedge against rising diesel prices?

  61. What is the difference between IAS and GAAP?

  62. Do stop or limit orders protect you against gaps in a stock's price?

  63. What is the difference between amortization and depreciation?

  64. Why would my stock's value decline despite good news being released?

  65. Why do some stock quotes appear in bold print in the newspaper?

  66. Are ETFs subject to the short sale uptick rule?

  67. Is an earnings surprise priced into the opening value by market makers or does the buyer/seller response drive the price?

  68. Why do brokers ask for personal information before they make any trades?

  69. Why would a company make drastic cuts to its dividend payments?

  70. What is an Islamic investment policy?

  71. What is the difference between a collateralized mortgage obligation (CMO) and a collateralized bond obligation (CBO)?

  72. What is the best method of analysis for forex trading?

  73. How long does it take for a merger to go through?

  74. What is a "daisy chain"?

  75. How is something "brought over the wall" in an investment bank?

  76. What exactly is insider trading?

  77. What's the difference between publicly- and privately-held companies?

  78. What's the difference between a Nasdaq market maker and a NYSE specialist?

  79. Are my investments insured?

  80. I will be receiving monies from a QDRO executed pursuant to my divorce. I would like to take a portion of the money as a distribution to pay for a new home. What are the tax implications of doing this?

  81. What is a treasury stock?

  82. What is a pure play?

  83. Why did the New York Stock Exchange report prices in fractions before it switched to decimal reporting?

  84. What's the difference between old- and new-economy stocks?

  85. What is the ideal number of stocks to have in a portfolio?

  86. Why are some shares priced in the hundreds or thousands of dollars, while other just as successful companies have more normal share prices? For example, how can Berkshire Hathaway's be over $80,000/share, when the shares of even larger companies are only

  87. I placed a limit order to buy a stock after the market closed, but the stock's price gapped above the entry price and my order never got filled. How can I prevent this from happening?

  88. In an IPO, who is a greensheet distributed to and for what purpose?

  89. What causes a significant move in the stock market?

  90. What are the disadvantages of using net present value as an investment criterion?

  91. What does the diluted share price reveal about a company's financial strength?

  92. What are the determinants of a stock's bid-ask spread?

  93. Do noise traders have any long-term effect on stock prices?

  94. Do all international markets trade between 9:30am and 4pm local time?

  95. Where can I find the number of shares shorted on a specific stock?

  96. What are the fifth-letter identifiers on the Nasdaq?

  97. Is it possible to buy mutual funds using a margin account?

  98. What are managed futures?

  99. How can I prevent commissions and fees from eating up my trading profits?

  100. What is a "dog and pony" show?

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