- How the Future Value of an Investment Is Calculated
There is always risk associated with investing. Sure, you can diversify your portfolio or hedge against risk by purchasing low-risk securities such as bonds, money market funds, or certificates of deposit. You can also predict your portfolio’s growth based on… read more…
- What Is a Closed-End Fund and How Do You Invest?
Closed-end funds may not be something you’ve heard mentioned often. Your investment portfolio is more likely to include open-end funds, mutual funds or exchange-traded funds (ETFs) instead. However, closed-end funds can offer some advantages for investors. This guide explains what… read more…
- What Is Over-the-Counter (OTC) Stock Trading?
Securities that trade “over-the-counter,” or OTC, are not traded on a formal exchange. While the biggest publicly traded companies trade on stock exchanges like the New York Stock Exchange (NYSE) or NASDAQ, over-the-counter securities trade outside of them, through a… read more…
- Open-End Funds vs. Closed-End Funds
Mutual funds can be a good way to invest if you want to diversify your portfolio without buying individual stocks or bonds. Aside from knowing which share class you’re investing in, you also need to know whether you’re buying an open-end… read more…
- What the Current Yield of a Bond Tells You
Bonds can help the federal government or other agencies raise money for specific projects. They’re like loans that investors make to government agencies or corporations. A bond’s face value will give an investor some idea of what it’s worth. However,… read more…
- Asset-Backed Securities: Definition and How to Invest
Asset-backed securities, or ABS, are securities backed by a pool of fundamental assets. Typically, the pool of assets is a small group of loans or debt obligations that cannot individually be sold to individual investors. Packaging these assets as a single financial instrument allows them to be sold to investors. Since the underlying assets are… read more…
- What Is Technical Analysis and How Does It Work?
Technical analysis is one way to evaluate a stock to decide if it’s a good investment for you. If you’re a DIY stock trader, then understanding how this approach works can be helpful in shaping your portfolio. Here’s an overview… read more…
- How Fundamental Analysis Is Used to Analyze Stocks
Stocks are a great option for diversifying your investment portfolio. However, choosing the right ones isn’t always a simple process. Different investment tools and strategies, such as fundamental analysis, can help you decide which securities are worth your time and money.… read more…
- Understanding Active vs. Passive Investing Strategies
When it comes to investing, there are generally two different approaches you can take if you’re looking to grow your wealth. You can practice either active investing or passive investing. Both styles allow for financial return, but just in different ways. Whether you’re new to the stock market or you’re an experienced shareholder, it’s important… read more…
- What Are Advisory Shares and Who Gets Them?
Advisory shares are a type of stock option given to company advisors rather than employees. They may be issued to startup company advisors in lieu of cash compensation. Advisors are usually granted options to buy shares rather than given the… read more…
- What Is Internal Rate of Return (IRR)? Definition and Examples
The internal rate of return (IRR) measures the return of a potential investment. The calculation excludes external factors such as inflation and the cost of capital, which is why it’s called internal. IRR, which is expressed as a percentage, helps… read more…
- How to Trade Stocks After Hours
Though most stock market business takes place during the regular operating hours, even average investors can now trade after-hours through use various technology platforms. The stock market’s regular operating hours for buying and selling stocks and other securities are 9:30… read more…
- An Investor’s Guide to Asset Classes
Before jumping headfirst into the world of investing, it may be smart to educate yourself on where your money will be invested. This is where asset classes come in. Simply put, asset classes are groups of similar investments, like commodities… read more…
- Opportunity Zone Funds: Definition and How to Invest
Opportunity Zone Funds are investment vehicles that provide tax incentives for investors. Partnerships or corporations can establish Opportunity Zone Funds and then invest in a property located within a Qualified Opportunity Zone. These investment vehicles are designed to increase economic development and job creation in distressed communities, as well as offer tax benefits to investors.… read more…
- How to Invest in Commercial Paper
Looking for a low-risk means of diversifying your investment portfolio? Then you may want to consider investing in commercial paper. No, we’re not talking about buying stock in a paper company (though Dunder Mifflin would be our first choice). This… read more…
- What Is a Pattern Day Trader?
Day trading involves a degree of risk. Day traders are buying then selling or selling then buying the same security on the same day. The high-risk, high-frequency traders known as pattern day traders warrant regulatory scrutiny all their own. A… read more…
- Using Fractional Share Investing to Buy Pricey Stocks
If you can’t afford to buy a share of a pricey stock, fractional share investing is worth considering. Investors can purchase a fraction of a security (such as a mutual fund, stock or exchange-traded fund) with the hope to increase their holdings over time. Purchasing fractional shares makes investing accessible, especially to those beginning their… read more…
- Speculator vs. Investor: What’s the Difference?
If you’re betting on the rise and fall of securities, you may be a speculator, not an investor. Investors and speculators both put money into assets, enterprises and instruments in the hope of generating a profit. Beyond that, however, they… read more…
- APR vs. APY: What’s the Difference?
Both annual percentage rate (APR) and annual percentage yield (APY) describe the interest associated with either an investment or loan. Essentially, the difference boils down to this — APR is the rate charged for borrowing or earned through an investment… read more…
- Empower vs. Mint: Which Is Better for You?
Getting your finances under control isn’t easy. Young Americans have a lot of expenses. It isn’t as simple as learning to balance your checkbook, no matter what your parents might tell you. Empower and Mint are two of the most… read more…
- Saving vs. Investing: What’s the Difference?
It’s great to save money, but investing to really makes it grow. You may simply want to save money to avoid the risk of losing even minor gains. But it can be hard to make your money work for you… read more…
- What Is a Fixed Annuity and How Does It Work?
A fixed annuity is the most straightforward type of annuity, as it pays a predetermined interest rate on your account balance. According to the terms of your contract, your rate will last for a specific period of time. At the end of… read more…
- The Services Offering Free Stock Trading
Trading stocks in a brokerage account can be a great way to grow wealth alongside the money you may be investing in a 401(k) or individual retirement account. The only catch is the fees you may pay to make trades.… read more…
- What Is a Certified Investment Management Analyst (CIMA)?
Certified investment management analysts sit atop an entire industry of financial planners, having earned a top certification and are considered experts. Only about a third of Americans under 35 have money in the stock market, which makes the role these… read more…
- What Is Modern Portfolio Theory and How Is It Used?
Modern portfolio theory (MPT) focuses on how to maximize returns for a given amount of risk. However, it also attempts to strike the balance between risk and reward to keep those returns steady. By encouraging investors to diversify their portfolio… read more…