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IPOs are initial public offerings of a private company ready to turn public and trade on an exchange
If there is a lot of hype surrounding the IPO, it may be a good strategy to immediately sell them while the frenzy is on
Another way to participate in IPOs is to pick up shares of mutual funds and ETFs that invest in them for you
You may find it difficult to find IPO shares to buy if you are not already a very active and wealthy investor
Many studies have investigated the benefits of purchasing IPOs, and the results might surprise you
Gold ETFs work by holding some amount of gold in trust and then selling shares of the fund that owns it
The value of gold coins is twofold: the price of the gold in the coin, and the numismatic value of the coin
Conventional wisdom says that investing in gold might be a good hedge against inflation or market cataclysms
Contango is when the price of a futures contract is higher than the current spot price of a commodity
Real estate investments fall into a wide spectrum of subsets. You can invest in residential property, commercial, etc.
Conventional wisdom is that real estate investments are a good hedge against inflation, and they often have tax advantages
REITs are similar to mutual funds, except that they only invest in real estate properties, related companies, and assets
Hedge funds are private investment groups that attract high net worth individuals and use riskier investment strategies
Hedge funds have historically been very secretive. Now, they are a little more transparent, but not fully
Some hedge funds will require investors to fit the Qualified Purchaser criteria, which requires a portfolio of $5 million
About half of all hedge funds are obligated to disclose their performance, and it can be found online through Morningstar
Hedge funds are sometimes the highest-earning investment vehicles, and sometimes they do that much worse than everything else
Hedge funds can require initial investments that are quite large. This may be somewhere between $250,000 to $10,000,000
Hedge funds can employ many strategies and focus on virtually any kind of investing style. As of 2016, the are over 12,000
In reality, only a small portion of venture capital is directed at seed money for startups. The rest is directed at...
There are large venture capital firms, which might invest in any start-up company if they think the company has potential
Minimum investments into venture capital funds tend to be vast sums of money. They tend to be for $1 million or more
Venture capitalists are now helping newer companies achieve success in return for large equity positions in the business
Private placements may be for non-public companies, or it may be a private offering of a publicly traded company
Different opportunities to invest in private placements may present themselves to wealthy individuals over time
Private Placements — How To Get Information The answer is, you can’t. Private placements have no reporting or registration requirements with the SEC or other entities
Collateralized Debt Obligations (CDOs) are bond-like investments backed by debts such as mortgages
A Credit Default Swap is a contract that provides a hedge against credit default risk
In essence, the risk associated is separated from the actual asset and is passed on to a counter-party for a premium
A derivative is a security which monetizes the risk or volatility associated with a reference asset
Futures markets are the formal exchanges on which futures contracts are bought and sold for financial products
Futures contracts constitute a binding agreement to trade a commodity or share at a future date at an agreed-upon price
Index futures are futures contracts written on an index in which a large position can be held with a small margin
Forward contracts are agreements to exchange specific assets on a specific date, at a price determined at the outset
Naked shorting means that the seller has not located or secured the security being short sold, and is in many cases illegal
Some securities, such as IPOs, are prohibited from being purchased on margin or for serving as margin for other purchases
Meaning: OTC (over-the-counter) stocks are bought and sold outside an official stock exchange, via a dealer network.
A penny Stock is a term for equity shares valued below $5, many of which are not registered with the SEC and trade OTC
The Pink Sheets used to be printed on pink paper and contained the bid and ask prices of penny stocks
The secondary markets are where most trading goes on today, where the trades are made investor-to-investor using shares
A short position is a sale made by an investor for a security which he or she will deliver to the buyer in the near future
Short interest is a term used to describe how many short positions are open for a given security or market at a given time
A short sale is the sale of a security not owned by an investor, which the investor has borrowed from the broker to sell
A short squeeze occurs when many short-sellers attempt to cover their positions at the same time, and it drives prices up
Triple witching hour is when three types of derivatives expire at once, which happens once every quarter in the US
An accelerated return note (ARN) is an unsecured debt instrument that uses derivatives to offer leveraged return
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