- What Is the Cumulative Abnormal Return of an Investment?
The cumulative abnormal return (CAR) is a key metric used by investors and financial analysts to evaluate the actual performance of a stock or portfolio relative to what is expected. CAR measures the total abnormal returns of an investment over a specific period of time, often following an event like a merger, earnings report or… read more…
- Currency Revaluation: How Does It Work?
Currency revaluation is a process through which a country adjusts the value of its currency relative to other currencies, an adjustment typically undertaken by the government or central bank to correct economic imbalances, such as trade deficits or inflation. Companies operating internationally may also make currency revaluations to adjust any foreign currency holdings to reflect… read more…
- Americans’ Net Worth Sees Record Growth as Asset Preferences Shifted: Report
While nearly all Americans own assets in some form, varying risk tolerance, financial management, goals and more may lead individuals to prefer different asset classes over others. Oftentimes, these preferences may be in part based on more external factors, such as inflation and interest rates, which may impact the return on investments. From 2019 to… read more…
- Benefits of Diversifying Your Portfolio Internationally
By investing in diverse global markets, you can benefit from economic growth in different regions, hedge against domestic market volatility and gain access to a wider range of investment opportunities. The benefits of international diversification also include exposure to different currencies, which can enhance returns and provide a buffer against inflation. Embracing this approach can… read more…
- 5 Ways Monopolistic Competition Can Impact Your Investments
Monopolistic competition is a market structure that is characterized by many firms selling differentiated products. These can be similar but not identical, allowing each firm to have some degree of market power. By understanding how product differentiation, pricing strategies and marketing efficiency work, investors can gain insight into the risks and rewards associated with different… read more…
- Forget About ‘Timing the Market’: Schwab Research Reveals the Optimal Way to Invest
Can investors realistically time the market to maximize returns, especially over the long term? According to a recent study from Charles Schwab, perfect market timing is practically impossible. The firm’s research showed that most investors are better off investing as soon as possible using a buy-and-hold strategy rather than trying to predict short-term peaks and… read more…
- 10 Great Investing Quotes to Consider
Hearing “a penny saved is a penny earned” from your grandfather may not have instilled the necessary wisdom to save and invest successfully. Fortunately, dozens of successful businesspeople, investors and entrepreneurs have provided their knowledge through books, interviews and more. These quotes offer investors a snapshot of timeless financial advice to help you make smart… read more…
- The Stock Market Is Up, But Morningstar Says Now Is the Time to Invest in These Assets
Defensive stocks aren’t just for bear markets. That’s the reminder Morningstar gives investors in a recent market analysis. “After providing a cushion to investor portfolios during the bear market of 2022,” Morningstar’s Jülide Sengil writes, “defensive stocks have lagged the broader market as stocks rebounded this year. The good news for long-term investors looking for opportunities… read more…
- The Federal Reserve Now Listens to… Twitter?
Federal Reserve analysts have published a paper describing what they call the Twitter Financial Sentiment Index, or TFSI. The tool aims to gauge how investors and consumers feel by tracking social media posts about finances and credit markets. The Fed… read more…
- Can This SEC Rule Protect Your Crypto or Art Investments From Bankruptcy?
Your broker cannot use the funds in your portfolio. Not legally, at least. While seemingly intuitive, this requirement comes from an SEC regulation known as “the custody rule.” It requires that all investment advisors and similarly-situated entities keep client securities… read more…
- How Rising Rates Affect Bank Stock
Rising interest rates can be good or bad news for bank stocks — sometimes both at the same time. Banks can earn more money when they can charge more for loans, but borrowers may want fewer loans, which can depress… read more…
- Morningstar Reveals 2 Key History Lessons to Protect Your Portfolio Against Inflation
It’s no secret at this point — inflation continues to be a big issue for American consumers. The inflation rate year-over-year for March 2023 was 5% — and this is actually a bit of a dip, with inflation rates for… read more…
- Interest Rate for Series I Savings Bonds Falls to 4.3%: Here’s What it Means
Gone are the days of series I savings bonds paying almost 7% in interest. The U.S. Treasury announced Friday that the inflation-protected bonds would start paying investors 4.3% on May 1, down from the 6.89% that they’ve paid out over… read more…
- This Personality Trait Explains Why You’re Scared to Invest in Stocks
If you’ve found yourself thinking, “Only a crazy person would buy bonds these days,” you could be right. A new study from researchers at Northwestern, DePaul University and the London School of Economics finds that five major personality traits have… read more…
- Should You Invest All at Once or Spread it Out? Here’s What Vanguard Says You Should Consider
A financial windfall like an inheritance or salary bonus can be a wonderful opportunity for investing. But what’s the best way to invest your newfound wealth: all at once or little by little? New research from Vanguard suggests that you’re… read more…
- Morningstar Says to Look for Durable Dividends
Dividend stocks are the primary building blocks of income portfolios – that is, investment portfolios that aim to generate cash flow instead of simply growing in value. Picking which dividend stocks to buy, though, isn’t always easy. While the “instant… read more…
- The Dodd-Frank Act Explained (and How It’s Changed)
The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as Dodd-Frank, was passed in 2010 in the wake of the 2008 financial crisis. The Obama-era law aimed to prevent another financial meltdown. It increased regulation of the financial industry… read more…
- Congress Votes to Ban This Investment From Your 401(k): Here’s Where You Can Still Find It
ESG investing is a big trend. Citigroup is doing it. JP Morgan is doing it. Deutsche Bank is doing it. But a faction in Congress wants to make sure your retirement plan can’t do it. ESG investing stands for Environmental,… read more…
- You Can Now Make Money Making Fun of Jim Cramer
In the world of television commentators, few inspire more venom among certain portions of the internet as CNBC’s Jim Cramer. He was harshly criticized in the aftermath of the 2009 credit crisis, and he’s still frequently called out for his… read more…
- Now May Be the Time to Reduce Your Exposure to Emerging Markets
Prospects in 2023 for emerging market stocks to do as well as they did in 2022 may be dimming. Financial planning firm Facet recently advised clients that it is reducing their allocation of emerging market equities to 5% from 10%. The move,… read more…
- BlackRock Says Bonds Should Be Hot in 2023
For bond investors, 2022 was a year to forget — interest rates skyrocketed and the general rule is that for every 1% increase in interest rates, the bond’s price moves 1% in the other direction for every year of its… read more…
- Vanguard Sees Non-U.S. Equities, Emerging Market Bonds as Top Sectors in 2023
Vanguard has released its January 2023 investment and economic forecasts, and there are some interesting projections that all investors should consider. The forecast predicts faster economic growth in China than in the U.S. or Europe. When looking at investments, Vanguard… read more…
- Goldman Forecasts The Best Bond Market In 14 Years
For many investors, 2023 might be the first time to consider bonds in their adult lives. That’s the takeaway from an insight published recently by Goldman Sachs, which forecasts that 2023 bond yields will exceed stock dividends. This, the paper… read more…
- T. Rowe Price Says Actively Managed Funds Outperform Passive Funds 73% of the Time
The battle between passive and actively managed funds continues to rage on. Some of the top investing minds legends have consistently promoted the reliance on passive index investing to grow your wealth and the avoidance of actively managed funds. Between… read more…
- Do Gold Prices Go Up in a Recession?
With the economy volatile, many Americans are wondering if they should turn to one of the oldest investments on earth: gold. And the answer depends on your portfolio. But what about during a recession? Is gold still a wise choice?… read more…