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What was the “Dot Com” Bubble?
The late 1990’s saw a huge uptick in the number of tech startups, as the age of the Internet took hold and new companies scrambled for a share of the action. As more and more people began to access the world (wide web) of information, new technology companies became more and more abundant in an effort to tap the commercial potential of having a global customer base. This led to excessive valuations of companies that didn't even yet have earnings, as investors poured money in hoping for the "next big thing." Continue reading...
What is Fiscal Policy?
Fiscal Policy refers to the tactics used by a central government to influence the nation’s economy, whether by setting tax and/or spending policies. Fiscal policy is related to monetary policy, in that they are both aimed to either boost an economy or temper growth to avoid overheating. A fiscal policy conducive to growth would aim to have low taxes and higher level of spending. When a government invokes “austerity” measures, it means they are trying to cut spending most likely to reel-in budget deficits or overall debt levels. Continue reading...
What are Tax Benefits of Annuities?
Annuities are unique products in that they provide the owner with tax-deferred growth, much like an IRA or a Roth IRA. Annuities can provide the owner with some tax benefits, in that the growth of the principle grows tax-deferred. Once you are ready to withdraw the money, your earnings will be taxed at your ordinary income tax rate, though the amount you contributed to the annuity will not be taxed. Continue reading...
What does notional value mean?
Notional Value is used in futures, options, and forex markets to describe the total value of the principal of a contract or transaction, especially when either none or only part of that value has actually been exchanged. Notional value is used most often in interest rate swaps and futures contracts, and is "notional" because either no principal changed hands at the beginning of the contract (such as in an interest rate swap), or only a small payment was used to buy a larger position (such as in a futures contract). Continue reading...
What is Weighted Average?
A weighted average is a calculation considers the relative importance or relevance of a piece of data. Weighted averages multiply numbers in the average by a predetermined factor, like time, that enhances the relevance given to the number. One example of a weighted average is the Exponential Moving Average (EMA), an alternative to the Simple Moving Average (SMA) line which gives greater weight to the more recent data. SMAs are effective in their simplicity, but their efficacy is most closely tied to how they are used. Continue reading...
What is a Home Equity Line of Credit (HELOC)?
Much like a Reverse Mortgage or Second Mortgage, a HELOC gives homeowners the ability to convert their home equity into cash. A HELOC is a line of credit secured by the equity in your home. Homeowners can choose when to use the funds, and there are repayments due according to a schedule in the contract. It functions as a revolving line of credit, similar to a credit card with large limits. Some people find themselves interested in a HELOC if they have a large balloon payment due on a loan, perhaps even their home mortgage loan. They are also sometimes used as a debt consolidation tool to pay off credit cards and other outstanding debts (but, for this, fixed-rate home equity loans are more popular). Continue reading...
How to use the Detrended Price Oscillator in trading
The Detrended Price Oscillator (DPO) is a relatively uncomplicated tool of analysis that can be used to simplify a chart and identify conditions ripe for buying or selling. It turns the moving average line of a price chart into a flat horizontal axis, with prices plotted according to their distance from the moving average. Moving averages are important components of many technical indicators. A simple moving average determines the average of a range of closing prices for a security or index for a specific period of time. An exponential moving average is a moving average that gives more weight to the most recent data. Simple moving averages are not weighted for time the way that exponential moving averages are, which has the effect of snapping the chart to the most current information, while simple moving averages have lag. Continue reading...
What is the Three Rising Valleys (Bullish) Pattern?
The Three Rising Valleys pattern forms when three minor Lows (1, 3, 5) arranged along an upward sloping trend line. It often appears at the end of a declining trend – an indication that buyers are overtaking sellers, which ultimately pushes the price higher. This type of formation happens when investors shift into buying mode following a consolidation period. Once the price breaks out from the top pattern boundary, day traders and swing traders should trade with an UP trend. Consider buying a security or a call option at the breakout price level. To identify an exit, compute the target price level by adding the pattern’s height (highest price minus the lowest price within the pattern) to the breakout level (the highest high). When trading, wait for the confirmation move, which is when the price rises above the breakout level. Continue reading...
What is the definition of a conglomerate?
Unlock the world of conglomerates in this insightful exploration. Discover their formation, advantages like risk diversification and capital allocation, and challenges such as the conglomerate discount and complexity. Delve into their historical rise and contemporary examples like Reliance Industries, Meta Platforms Inc., and Amazon. Stay tuned to witness the versatility of conglomerates in the ever-changing business landscape. #Conglomerates #BusinessInsights #Diversification Continue reading...
Top Catalog Retail Stocks
The retail landscape has been revolutionized by the advent of e-commerce, giving rise to a category of companies that specialize in catalog retail. This segment features companies that either market or list items sold by other retailers and businesses, playing a pivotal role in the ever-evolving world of digital commerce. Continue reading...