Financial traders use correlation to describe the movement of securities – how and when they move – relative to each other during a given time period. These relationships lend themselves well to pairs trading, where traders have developed an understanding of correlations and their behavior that allow them to confidently exploit slight changes to minimize risk and maximize profitable transactions. Continue reading...
Generally associated with mutual funds and exchange traded funds, the expense ratio represents the total annual management fee. The expense ratio is the annual management fee charged to shareholders by ETFs and mutual funds. The annual fee typically comprises the annual management fee, 12b-1 fees (which are associated with research costs), operating costs, and all other administrative type fees that go into the product. The expense ratio encompasses all of these fees as one percentage. Continue reading...
Mutual funds that do not charge a front-end or back-end sales load are known as no-load funds. What are Load Mutual Funds? While no-load mutual funds do not require the investor to pay sales charges (i.e., commissions) when buying or selling that fund, it’s important to remember that nothing is free, especially in the world of financial services. The portfolio manager of the fund and his team of analysts still have their salaries, bonuses, retirement benefits, and so on, and fees are needed to pay for it. Continue reading...
“Load” mutual funds are those which have a fee structure that includes a front-end or back-end sales charge. All funds have expenses, but not all funds have loads. Loads are sales charges that are part of the fee structure of a mutual fund. Each mutual fund will typically offer a few types of shares classes to its investors, and the main difference between the share classes are their fee structures. There are front-end loads, which come out of your initial investment and can be up to 5%. Continue reading...
Deposits are cash, checks, and electronic transfers that banking customers put into their personal or corporate bank accounts. Deposits will increase the balance, or pay off a debt, within a bank account. Deposits may not show up on an account balance until they have cleared from the institution or account from which the check is written or the electronic transfer was requested. The types of accounts that can receive bank deposits include but are not limited to checking, savings, and money market accounts. Bank Certificates of Deposit (CDs) can be purchased with an initial deposit that satisfied minimum amount. Deposits are considered liabilities on the balance sheet of the bank, since they are obligated to pay that money out when a customer requests it. Continue reading...
A partnership is a business owned by two or more people, usually designated as an LLC. They play a role in the operation of the business, and are responsible for the legal and financial liabilities. In a partnership, as in a sole proprietorship, there is no legal shield against law suits and liabilities unless they have filed as an LLC or S-Corp. If the partnership were to be sued, without any kind of legal shield in place, the owners would be held completely accountable. Continue reading...
Tier 1 Capital are the core asset holdings of a bank. They are disclosed, liquid, risk-averse assets, and are used by regulators to evaluate a bank's compliance with capital requirements. Banks lend out about as much money as they can in general. They must have capital on hand to absorb losses and remain solvent. The Basel Accord is an international agreement dealing with capital reserve requirements for banks, enacted after the meltdown of 2008. Continue reading...
Between September 1 and October 4, energy stocks surged while cryptocurrencies and tech faced sharp declines. U.S. large-caps outperformed small-caps as volatility spiked for blue-chip stocks. Dive into the key market trends and sector performances in this comprehensive review! Continue reading...
A week of rising volatility saw U.S. small-cap stocks dip while inverse ETFs gained as investors turned cautious. Discover the market trends, sector resilience, and global shifts shaping November's financial landscape. Continue reading...
Many examples of open-source software exist today, including the code for Bitcoin and other cryptocurrencies. “Open-source” describes software or code that is available for anyone to use, modify, study, or share without incurring any cost. In most cases, the open-source software has been created through unrestricted and collaborative community involvement, which is sometimes called “crowd-sourced.” The word “source” in this case refers to the source code that lays the foundation for software programs. In some cases, the same source code can be used as the foundation for many different software applications built on top of it. For example, the Valve Corporation’s game engine code, ironically named Source, has been used to create approximately 50 different games, many of them by independent developers using the open-source code. Continue reading...
During the week of July 1 to July 5, financial markets experienced a dynamic range of performances. Base metals saw an uptick, while natural gas prices dropped sharply. Major indexes and cryptocurrencies showed significant movements, reflecting broader market trends and investor sentiments. Notable gains in sectors such as technology and commodities contrasted with declines in healthcare and industrials, providing a comprehensive overview of the week's economic landscape. Continue reading...
Discover how U.S. market indexes performed and how volatility trends are shaping trading strategies. Learn about AI-powered trading robots tailored for both high and medium volatility stocks, offering precision and risk management for traders. Dive into the latest market dynamics now! Continue reading...
W.D. Gann developed a suite of technical analysis tools around the 1930s, with Gann Fans being among the most essential in his toolkit. Gann fans are a collection of lines placed on a price chart that, in theory, help traders gauge potential price changes. Gann theorized that prices were likely to be sequentially bound by markers; that is, if a price broke through one marker, it would be likely to use the next ones as its new support or resistance level. The range between the lines gets wider the further they extend from the origin, which makes Gann fans suitable for long-term charting in which the number of traders and the size of total market cap grows over time. Continue reading...
When it comes to the global business landscape, size often matters. The largest companies in the world not only wield immense economic influence but also play a crucial role in shaping our everyday lives. In this article, we will take a closer look at the top 10 largest companies globally, as of January 2023, ranked by their 12-month trailing revenue. Continue reading...
Unlock the secrets of the Correlation Coefficient! 📈 Dive into its power to decipher relationships in finance. Learn how it aids investors, without the complexities of risk. Discover the strength, applications, calculations, and limitations of this vital tool. 🤝💼 #Investing #Finance101 Continue reading...
Buying a stock means taking an ownership position in a publicly traded company. Once you purchase a stock, you become a shareholder. A company has two ways of acquiring capital needed for growth: borrowing it (often in the form of issuing bonds), or selling shares of their company's equity, which is known as stock. In other words, when you buy shares of a company’s stock, you are buying a claim to the company's profit margin, because you are technically a part-owner in the company. Those who hold shares of Common Stock, the most typical form of stock, have voting rights in the election of the company’s board members. Continue reading...
A SIMPLE IRA must be established by an employer with fewer than 100 employees. An employer can establish a SIMPLE IRA if they have no more than 100 employees who earned $5,000 or more during the preceding calendar year. The employer cannot have any other type of qualified retirement plan going while a SIMPLE IRA is in effect. SIMPLEs should be established between Jan 1 and October 1 of the first year of the plan, unless the business started after that. Plans can be set up relatively quickly and can even use automatic enrollment if employees are given the ability to opt-out. Continue reading...
A reverse stock split consolidates stocks at a certain ratio and reduces the number of shares outstanding while increasing the value of each share, as opposed to a regular stock split, which divides existing stocks into more shares which are worth less apiece. A normal stock split, which increases the number of shares an investor owns without increasing the total value of his or her interest in the company, has the benefit of increasing liquidity with the shares and possibly narrowing the bid/ask spread. A reverse stock split reduces the number of shares in circulation by effectively combining the existing shares at a certain ratio (such as, 2 shares now equals 1 share). Continue reading...
The Nepalese Rupee (NPR) stands as the official currency of Nepal, a nation rich in natural beauty and cultural heritage. Administered by the Nepal Rastra Bank, Nepal's central bank, the NPR is an integral part of the country's economic landscape. In this article, we will delve into the history, characteristics, and significance of the Nepalese Rupee, a currency symbolized by Rs and Rp. The journey of the Nepalese Rupee began in 1932 when it was introduced, effectively replacing the previously used Nepalese Mohar. Since then, it has played a pivotal role in the economic development of Nepal. Continue reading...