Overbought is a term used when analysis indicates demand seems to have been escalated by investor emotion or media hype, beyond the point where it can be sustained or supported by fundamentals. The increased demand drives the price of the security up for a short time, before the overbought security likely experiences an eventual sell-off and price decline. It is hard to determine when a security is overbought, but the Relative Strength Index (RSI), an momentum oscillator developed by Welles Wilder, is one tool that can help make a determination. In the RSI, the average gains and average losses over a specific time period (such as 14 days) are divided to calculate the Relative Strength, then normalized into the Relative Strength Index (RSI), which is range bound between 0 and 100. The RSI typically fluctuates between values of 70 and 30, with higher numbers indicating more momentum. According to this indicator, a security with an RSI over 70 (out of 100) can be considered overbought.
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Wealthy countries and non-government organizations frequently donate or lend resources to help the population of a country in dire economic need. This can come in the form of educational assistance, funds, materials, construction, food, medicine, and so on. On a macroeconomic scale, foreign aid constitutes one of the major forms of asset transfer between different parts of the world. Governments, charitable organizations, and NGOs donate or lend resources to countries that cannot supply their own needs effectively. Aid can be given altruistically, that is, just for the sake of doing good deeds, or it can be used as a tool for influence or personal gain, which is common.
Workers who earn income in foreign countries will frequently pay taxes on the income in the country in which the wages were earned. In such cases the worker may be eligible to take deductions for the amount of taxes paid so that their entire income is not subject to taxes again in their country of citizenship. Ex-patriot workers who earn income overseas are generally eligible for tax deductions, credits, or exclusions to account for the taxes that they have already paid on their income in the foreign country.
Market risk is the chance that an investment will not maintain its value when it is dependent on the many factors that influence the health of the economy and the stock market. Investors must be aware that investing money in a stock or mutual fund is to tie the fate of that money to the fate of the company or companies that they have invested in. The other side of the coin, of course, is the potential for gains. The potential gains of an investment are the premium that is paid to an investor in exchange for allowing a company or mutual fund to take risks with the investor’s money.
Capital, in its essence, is a term that encapsulates anything that bestows value or benefits to its proprietors. This could range from tangible assets like machinery in a factory to intangible ones like patents or intellectual property. While it's tempting to equate money directly with capital, the latter is more frequently linked with cash that's employed for productive or investment activities. Capital is the lifeblood that fuels the daily operations of a business and underpins its future expansion.
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