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Eric Reed

Retirement and Investing Expert

Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.

Posts by Eric Reed:

by Eric Reed Sep 02, 2020

One of the most important principles in options trading is known as put-call parity. The term describes a functional equivalence between a put option and a call option for the same asset, over the same time frame and on the same expiration date. When the prices of otherwise equivalent put and call options are not in parity it creates an opportunity for arbitrage. In other words, traders can profit off nothing more than the imparity (misalignment) of the contracts. This makes put-call parity an essential concept in options trading. To refine your understanding of put-call parity and how it can play into your overall options investment strategy, consider consulting with a financial advisor. Read more

by Eric Reed Sep 01, 2020

When analysts talk about changes to market prices, interest rates or other financial metrics, they often do so in terms of “basis points.” A basis point is equal to a change of 0.01%, useful shorthand in an industry where fortunes can change on fractions of a percent. The prevalence of the term underscores just how massive financial transactions have become and, thus, why even seemingly microscopic changes in yield can render or ruin fortunes. Here’s what you need to know to better understand – and be able to use – a key Wall Street term, something that’s especially useful as you talk to your financial advisor. Read more

by Eric Reed Sep 01, 2020

Investors have two primary emotions, fear and greed, according to CNN Money. The news service believes in this so much that it has created a metric around the idea. The Fear and Greed Index measures how investors across the entire stock market are feeling at any given point. When they’re fearful, expect selloffs and retrenched positions; when they’re greedy, expect buyers to snap up securities. Here’s how it works. Read more

by Eric Reed Sep 01, 2020

A covered call is an investment strategy designed to manage risk. In it, investors take two positions: First, they buy a number of shares in a given company. Then, they sell an equal number of call… Read more

by Eric Reed Aug 25, 2020

Investors call someone “bullish” if that person believes that stocks, or any other security for that matter, will go up,. They call a someone “bearish” if that person believes that stocks will go… Read more

by Eric Reed Aug 25, 2020

The value or price of gold has risen since mid-March 2020, reflecting worries across the financial world about how much purchasing power major paper currencies hold. In light of the deep recession… Read more

by Eric Reed Aug 19, 2020

The federal poverty level is a key consideration in assessing anyone’s eligibility to receive government benefits. Your access to many state and federal safety net programs is often based on where… Read more

by Eric Reed Aug 14, 2020

The Trump administration has decided to allow defined contribution plans, like 401(k) plans, to make private equity investments. Such investments will not be available as standalone options. Instead… Read more

by Eric Reed Aug 12, 2020

Geographic arbitrage is a term coined by the FIRE movement (Financial Independence, Retire Early). FIRE advocates combine investments and a typically high-paying job to achieve the dream of retiring… Read more

by Eric Reed Jul 29, 2020

A publicly traded company is required by the Securities and Exchange Commission (SEC) to disclose substantial information about its governance, business model and finances. This information allows… Read more

by Eric Reed Jul 29, 2020

A quick ratio tests a company’s current liquidity and solvency. It is a measure of whether the company can pay its short-term obligations with its cash or cash-like assets on hand. (Short term… Read more

by Eric Reed Jul 29, 2020

The Misery Index, otherwise known as the Economic Discomfort Index, is used to measure overall hardship in an economy. It is a back-of-envelope calculation that putatively indicates how the average… Read more

by Eric Reed Jul 28, 2020

Growth stocks are sometimes seen as the holy grail of investing. Many investors hope to find them; many traders promise to know them already. Finding a growth stock can help your portfolio gain years… Read more

by Eric Reed Jul 22, 2020

Your credit score is a numerical representation of how responsible you are with your finances and, by extension, how trustworthy you are as a borrower. So if your credit score has fallen, whether… Read more

by Eric Reed Jul 17, 2020

With millions of Americans depending on 401(k) and IRA assets for their retirement income, a market downturn can wipe out decades of investment in a single go. And while young workers at least have… Read more

by Eric Reed Aug 25, 2020

8/25 Update: On August 8, President Trump signed an executive measure authorizing extra federal unemployment assistance to resume. Specifically, it calls for $300 in weekly federal assistance and … Read more

by Eric Reed Jul 13, 2020

Portfolio risk is one of the most essential challenges for any investor. More ambitious portfolios can generate greater rewards, creating more wealth in a single year than cautious portfolios can… Read more

by Eric Reed Jul 13, 2020

Discounted cash flow, or DCF, is a tool for analyzing financial investments based on their likely future cash flow. When an investment will cost more money to buy, generate less money in return, or… Read more

by Eric Reed Jul 08, 2020

They say that hindsight is 20/20. There’s also an old joke that economists have predicted nine of the last five recessions. These two sayings encapsulate, respectively, the concepts of “lagging” and … Read more

by Eric Reed Jun 30, 2020

A tax cliff happens when a small increase to your income triggers an increase in your tax bill. Personal income taxes increase gradually as a proportion of income; even if your income increases to… Read more

by Eric Reed Jun 23, 2020

A PEG ratio is a tool used in fundamental stock analysis by investors to assess a share’s value. It measures a stock’s price-to-earnings ratio against the anticipated earnings growth for the… Read more

by Eric Reed Jun 23, 2020

The phrase “buying to cover” describes the final step in an investment tactic, known as short selling, that seeks to profit from a bearish market. Investors who believe a security or index is going… Read more

by Eric Reed Jun 18, 2020

Unemployment is a messy statistic. Every month the U.S. Bureau of Labor Statistics publishes its civilian unemployment rate or what is more commonly referred to as simply “the unemployment rate.”… Read more

by Eric Reed Jun 10, 2020

Times of economic uncertainty and market instability tend to affect the housing market, frequently including drops in average home prices. Yet for all the economic and financial convulsions of the… Read more

by Eric Reed May 27, 2020

Despite a recent bounce-back, stock prices have fallen sharply since the coronavirus first emerged. For some investors this may not prove much of a problem. Historically stocks have rebounded… Read more