- What Is Discount Rate and Why Does It Matter? – Definition and Example
The discount rate is a financial term that can have two meanings. In banking, it is the interest rate the Federal Reserve charges banks for overnight loans. Despite its name, the discount rate is not reduced. In fact, it’s higher… read more…
- The Sharpe Ratio: Definition and How to Use It
As an investor, your objective is to balance the potential for returns with risk. When assessing risk, investors and financial advisors often apply the Sharpe ratio to their investment analysis. Just one popular method for evaluating stock, the Sharpe ratio is… read more…
- Understanding Mutual Fund Expense Ratios
If you’re investing in mutual funds or exchange-traded funds (ETFs), the fund manager will charge fees to cover their various expenses. Those fees are collectively rolled into what’s known as an expense ratio, which is expressed as a percentage. This… read more…
- What Is Series A Funding and How Do You Get It?
Series A funding is the first round of capital after a seed round that a startup company raises from professional investors in order to grow the business. Starting a company takes money — sometimes a lot of it. And after… read more…
- 11 Safe Investments to Protect Your Money
There’s always some risk involved with being an investor. However, there are strategies investors can use to be safer with their money, while also garnering some returns. For instance, you can keep your money liquid by investing in various types of… read more…
- Understanding Default Risk in Bond Investing
Default risk in bond investing refers to the chance that a bond-issuing company or government would fail to make its debt and interest payments. As a bond investor, you can lose 100% of your investment along with uncollected interest. But… read more…
- How Stock Buybacks Work and Why Companies Do Them
A stock buyback occurs when a company buys back its own shares from the market, typically in an effort to raise its share price for a number of reasons. Stock buybacks are typically done by profitable public companies instead of providing dividends as a way to reward some investors who are ready to sell. There… read more…
- What Investors Should Know About the Wash-Sale Rule
When an investment underperforms, tax-loss harvesting is a way to offset the tax impact of capital gains while maintaining your preferred asset allocation. Some robo-advisors even automate this process. The IRS allows investors to use realized losses to offset gains… read more…
- What Is Stock Correlation, and How Do You Find It?
Stock correlation describes the relationship that exists between two stocks and their respective price movements. It can also refer to the relationship between stocks and other asset classes, such as bonds or real estate. Even if you’ve turned over control… read more…
- A Guide to Investing for Beginners
While saving is the first step to building wealth, putting your savings to work through investing is typically the first step to growing that wealth. While stocks are usually the first thing people think to invest in, you can also… read more…
- What Is a Leveraged ETF?
Exchange-traded funds, or ETFs, are popular investment securities that track stock market indexes, a particular commodity, bonds, or a particular category of assets like tech stocks. A leveraged ETF is a particular type of ETF that uses debt or financial… read more…
- Investment Banking: Definition, Types & More
Investment banking is a sect of the banking industry focused on raising capital for companies, governments and other entities. Investment banks are typically private companies, and they may underwrite debt and equity securities, assist with mergers and acquisitions, provide financial advisory… read more…
- What Is an Investment Portfolio?
An investment portfolio is a basket of asset classes that typically include stocks, bonds, cash, real estate and more. Investors generally aim for a return by diversifying these securities in a way that reflects their risk tolerance and financial goals.… read more…
- How to Invest in Startups
Investing in startups may seem like an opportunity that only exists for those willing and able to drop a few million into a fledgling tech company housed in a garage or a Stanford dorm room. While that type of investor… read more…
- What Is the 60/40 Portfolio (And Should You Have One)?
Building an investment portfolio means determining the right mix of assets to help you reach your goals for the short and long term. One of the more conventional approaches financial advisors and experts suggest is the 60/40 portfolio. Going this… read more…
- What Is the SIPC, and What Does It Do?
There are many agencies and organizations in America that exist to protect consumers, including consumers on the investing markets. One of those organizations is the Securities Investor Protection Corporation (SIPC). The SIPC is a nonprofit, member-funded organization that helps clients… read more…
- What Is Current Ratio and How Do You Calculate It?
The current ratio is an accounting measure that tells you if a company can pay such short-term obligations as payroll and rent for the year. A good metric for investors to use when analyzing securities, the current ratio is a… read more…
- FINRA BrokerCheck: What It Is and How to Use It
Before signing on with a broker or investment advisor, you should look them up in the Financial Industry Regulatory Authority’s (FINRA’s) BrokerCheck. FINRA is authorized by Congress to oversee brokers and broker-dealers. The FINRA BrokerCheck database provides key information about individual brokers and… read more…
- What Is the Series 66 License?
The Series 66 license is required to work as an investment advisor in the United States. To obtain it, you must pass a rigorous exam covering methods of delivering investment advice and other topics. Below, we’ll tackle what the exam… read more…
- GDP: Definition, Examples and Economic Usage
Gross domestic product (GDP) measures the market value of all goods and services a country produces in a specific time frame. It’s used to gauge a nation’s economic growth and its people’s standard of living. GDP also guides investment decisions… read more…
- How to Use TreasuryDirect to Buy Government Bonds
Government bonds are one of the safest places to park cash. This is because they are backed by the full faith and credit of the U.S. government, so there’s virtually no risk of default. The tradeoff for safety, of course,… read more…
- Series 7 Exam: Qualifications and Preparation
The Series 7 exam is one of two exams that registered representatives of broker-dealers must pass to sell and trade most securities as a financial services professional. The exam mainly covers information about investments, their suitability for different investors, record-keeping… read more…
- What Is the Series 57 License?
A Series 57 license allows brokers to trade equities and convertible debt securities in the U.S. To obtain one, you must pass the Series 57 exam. This test covers topics like equity trading concepts and regulations around the financial services… read more…
- Ken Fisher: Everything You Need to Know
Ken Fisher, an investment analyst and self-made billionaire, is perhaps best known for founding Fisher Investments. The financial advisor firm based in Camas, Washington manages more than $96 billion for more than 40,000 clients, mostly high-net-worth individuals and institutional investors. Fisher currently serves as the firm’s executive chairman and co-chief investment officer. However, he has… read more…
- Should I Pay Down My Mortgage or Invest?
If you find yourself with some extra money, then you’ll need to decide what to do with it. If you have a mortgage worth hundreds of thousands of dollars, it may be tempting to put your windfall toward making extra… read more…