- How Does Diversification Protect Investors?
Investing can be a complex field layered with potential pitfalls and unforeseen risks, which is why so many investors seek diversification. The cornerstone of diversification is its potential to disperse risk. You can spread the risk of volatile investments or industries across multiple investments. It can be difficult finding the right diversification mix for you,… read more…
- What Is a Securities-Backed Line of Credit?
A securities-backed line of credit is a credit facility that uses as collateral a bundle of securities that you own. You can then borrow and repay against this credit at will in the same way that you can with a credit card. If you want to close the account or if the value of your… read more…
- Return on Equity vs. Return on Assets: Key Differences
Return on equity (ROE) and return on assets (ROA) determine how efficient a company can be at generating profits. Both formulas that can help investors determine how good a company is at turning a profit. Let’s take a look at both… read more…
- What Is Return on Invested Capital?
Return on invested capital (ROIC) is a financial metric that shows how well a company converts capital into profits. It measures the company’s efficiency and effectiveness at allocating its available capital to projects, products and investments that produce profits. Investors… read more…
- How Do Margin Loans Work?
Typically, margin investing works based on margin loans. These are loans that your brokerage extends so that you can purchase with a combination of your own funds and borrower money, giving you the liquidity to make larger purchases. They are… read more…
- What Is Halal Investing?
You’ve probably heard of values-based investing. Whether your religious beliefs, environmental goals or personal ethics are guiding your investment strategy, the wide array of investments available today allows you to build a portfolio that aligns with your values. Halal investing… read more…
- What Is Faith-Based Investing?
A foundational religious parable tells of two servants who invested their money in the marketplace and one who buried it in the ground. This story gives Christians lessons about serving God with their money and abilities. More broadly, faith-based investing… read more…
- What Is the Real Return of an Investment?
When measuring investment performance, it’s helpful to understand its real return. The real return on investment is what you earn after returns are adjusted for inflation and taxes. Nominal returns, on the other hand, don’t account for those deductions. Understanding… read more…
- How to Start Investing in Your 20s
The earlier you begin investing, the better off you’re likely to be in the long term. Here’s how you can get started if you’re still in your 20s. It’s never too early to start investing—as long as you do so wisely.… read more…
- Dollar-Cost Averaging vs. Lump Sum Investing
If you want to dip your toe into investing, it can be overwhelming. The terminology, risks and fees might make you want to just dump your funds in a savings account instead. But that would be a mistake – investing… read more…
- Protect Your Investments From Market Crashes With Theses 2 Strategies From Fidelity
When financial markets are falling fast, risk-averse investors may be tempted to cut and run. But cashing out your investments when markets are falling often means locking in investment losses. And knowing the right moment to reenter the market when… read more…
- SIPC vs. FDIC: Understanding Key Differences
Whether you’re saving money in a bank account or investing it in the market, you want some reassurance that it’s safe. The Federal Deposit Insurance Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC) ensure banks and other financial institutions,… read more…
- What Is a Good P/E Ratio? Is High or Low Better?
P/E ratio, or price-to-earnings ratio, is a quick way to see if a stock is undervalued or overvalued. And so generally speaking, the lower the P/E ratio is, the better it is for both the business and potential investors. The… read more…
- How to Open a CD Account
Certificates of deposit (CD) accounts allow depositors to earn a guaranteed interest rate in exchange for keeping their money in the account for a predetermined length of time. These accounts can have higher interest rates than those on traditional savings… read more…
- Angel Investing vs. Venture Capital
Angel investors and venture capitalists tend to operate in the same circles. While both invest in startup companies and new technologies, they’re otherwise very different. An angel investor is generally an individual looking to invest their own money in a… read more…
- Roth IRA vs. Mutual Fund: Key Differences
Investing is a key component of any plan to build wealth. And when shaping that plan, it’s important to consider two things: what to invest in and where to keep that money. A mutual fund, for example, is a popular… read more…
- What Is an Equity Stake in a Business?
Equity stake refers to the amount of ownership of a company owned by a person, organization or group of owners. It’s usually expressed in percentage terms, with 100% equity stake indicating complete ownership. Owning an equity stake in a company… read more…
- What Is After-Hours Trading? How Do You Do It?
After-hours trading happens outside the standard hours during which a stock exchange (such as the Nasdaq or New York Stock Exchange) is open. This trading can fall under post-market trading, which happens between 4:00 p.m. and 8:00 p.m., or pre-market… read more…
- What Is Survivorship Bias? And How It Can Be Used to Trick You
Survivorship bias isn’t a term you likely hear often, but you know exactly what it is. Ever listened to a sales pitch that opened with the most optimistic information, yet neglected to include the less-than-flattering details? This is a type… read more…
- Understanding Overweight Stock Ratings
A stock that is expected to outperform other stocks in its market sector gets an Overweight rating. Financial analysts who are employed by investment firms research stocks and provide their opinions to investors about their possible future performance. Their opinion takes… read more…
- Beginner’s Guide to Nickel Investing
Investing in nickel is a bet on the prospects of the industrial and manufacturing sectors, both of which use lots of this base metal. Nickel investing, and investing in other base metals like zinc, iron, aluminum and uranium, is different from investing… read more…
- Preferred Stock vs. Common Stock: What’s the Difference?
Publicly traded companies can offer shares of preferred stock or common stock to investors to raise capital. Both can pay dividends, though there can be differences in how much is paid out and when those payouts occur. Between the two,… read more…
- How to Get Rich Through Investing
If you want to be rich, many financial experts will suggest you invest. You can become rich in other ways than investing, of course, such as inventing something useful or starting a business. But the genius behind investing is that… read more…
- What Is the 200-Day Moving Average?
The simple moving average, or SMA, is one of the most common pieces of technical data that investors rely on. In the case of the 200-day SMA, it shows you the stock’s average price over the past 200 trading days.… read more…
- How to Save $1 Million Dollars in 10 Years
A common number that people generally seek to save is $1 million. It’s a good start to long-term retirement and is a threshold that people view favorably as they seek to reach their financial goals. Saving $1 million is doable,… read more…