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Posts by Eric Reed:
When it works, dividend growth investing is a best-case scenario for income investing. In this strategy you buy a stock that not only grows in value year after year, but it also pays you a steady yield in the process. On top of that, the payments themselves grow each year as the company earns value. With a dividend growth strategy you buy shares of a dividend-paying stock and hold them. You then use the stock’s dividend payments to buy more shares, which you also hold. Ideally over time your portfolio snowballs, growing off of its own returns. Of course, like all strategies dividend growth investment has its risks as well. Here’s what you need to know. Read more
Investment income is an umbrella term that includes just about any money you make from buying, holding and selling assets. However, there are three main forms of investment income, which we discuss below. Together these types of investment income are central to most retirement plans, every portfolio and even some people’s entire financial strategy. Consider working with a financial advisor as you evaluate your portfolio for its income-generating capacity. Read more
When you assign someone power of attorney you give them the authority to make decisions for you and on your behalf. Whatever the agent, as this person is called, decides will be as binding as if you’d made the decision yourself, so only give power of attorney to someone you absolutely trust. While a specific form is unnecessary for power of attorney, just about every jurisdiction offers one in order to help you understand this process. Here’s what you need to know. Read more
Failing health often robs people of their agency. Whether due to age or illness, many hospital patients can’t effectively communicate their own wishes. For legal matters, this is handled through… Read more
The FAANG stocks are a set of five high-value technology stocks. Together they make up nearly a fifth of the S&P 500’s total value. The “N” in FAANG stands for Netflix. One of the first major tech… Read more
Every investment class needs someone to manage it. From the market makers and clearing houses that ensure stock trading to the bankers who move currencies around the world, markets are not natural… Read more
A market sell-off happens when traders make a lot of sales very quickly. Sometimes a sell-off, which is a particularly aggressive form of a bear market, can encompass an entire market. Other times it… Read more
Coinbase has taken cryptocurrency legitimate. At least, that’s the position of many in the cryptocurrency community who see the company’s IPO as proof that digital assets have arrived as mainstream… Read more
Bitcoin is having a moment. Actually, Bitcoin has been having a moment for several years now. However, the past 12 months have been particularly noteworthy for the infamously volatile digital asset.… Read more
Oil prices have had a remarkable year. Historically volatile, like most commodities, oil prices tumbled during the pandemic to the point where they dipped into negative territory, meaning it cost… Read more
The Fama-French Three Factor model is a formula for calculating the rate of return on a given asset. Like many (if not most) such models, it offers an estimated value based on market factors at large… Read more
You have probably heard of securitization. It’s a way of turning non-financial assets into liquid securities that investors can buy and sell. Despite its role in the market crash of 2008 and… Read more
A joint-stock company is a company owned by several, generally private, investors. They’re an in-between creation, held more closely than a public company but more widely traded than a partnership.… Read more
Some of the more advanced trading platforms offer investors a service known as “Level 2 market data.” This usually comes as a premium feature, available for an additional price to investors who want… Read more
Iron condors and iron butterflies are very similar and popular options trading strategies. Both can profit by selling short positions in the face of low implied volatility, and both use long… Read more
A protective put might be the closest you can come to having your cake and eating it too, at least as far as finance is concerned. It is a strategy based on the elective nature of options contracts,… Read more
The iron butterfly options trading strategy aims to profit investors during periods of low volatility. Also known as the “short iron butterfly” or the “iron fly,” the strategy makes its money off… Read more
The iron condor is a strategy in options trading. As with all options strategies, it is based on assembling a position out of several contracts. In this case, the iron condor is built out of four… Read more
Penny trading is a tough business. A penny stock is formally defined as any stock whose price is less than $5 per share. This is the legal definition used by the SEC and other regulatory bodies,… Read more
One of the biggest trends in online trading has been the convergence of brokerage business models. Brokerages want your business, and it’s getting increasingly hard for any one of them to stand out.… Read more
A futures contract is one of the most complex and riskiest securities traded today. That’s because if you hold the wrong side of a futures contract, your losses aren’t capped by an up-front purchase… Read more
Discount brokerages have become the dominant model online. By historic terms, the online brokerage business is still just in its infancy. E*TRADE, which arguably started the modern era of online… Read more
It’s a little difficult to distinguish investment platforms based on price. Not long ago, platforms competed on a combination of features, fees and commissions. However, in recent years most services… Read more
Bitcoin will likely go down as one of history’s great examples of financial FOMO (fear of missing out). Not long ago early adopters literally couldn’t give this asset away, and now a single token… Read more
Options, which fall in the category of derivatives, have become one of the hottest securities online. In part this has to do with the rise of commission-free trading. Many services offer cheap trades… Read more
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