EDU Articles
Popular articles
What is a market-with-protection order?
A market-with-protection order starts out as a regular market order to buy or sell at the market price. This kind of order will cancel the remainder of the order if the price moves before the entire order is filled, and it is immediately re-entered as a limit order with a price just above or below the market price. A market-with-protection order allows investors to hedge against the change that prices will move unexpectedly before their entire order is filled at the desired price. So an investor would submit an order to be executed at the current market price, and then, if the price moved, the order would automatically cancel the rest of the order and resubmit it as a limit order. Continue reading...
What should I look for in a good Mortgage Calculator?
Mortgage payment arrangements can be engineered in a number of ways, and a good mortgage calculator will give you enough flexibility to input the terms of your own. Ideally a mortgage calculator will be flexible enough to let you input the following: an adjustable rate, a rate cap, optional mortgage “acceleration” payments, balloon payments and resets, impound account calculations which take into account the property taxes and insurance you pay, as well as calculations which take any origination fees into account. Continue reading...
What is a commodity?
A commodity is usually a raw material or agricultural good which has an extremely high demand and very little price differentiation between competitors. If a good will not increase or decrease significantly in quality regardless of who brings it to market, and the demand is very high (such as for a good used in the production of many other products) it might be considered a commodity. Examples would be oil, silver, gold, steel and wheat, but a full list would be very extensive. Continue reading...
What is the Cost of Goods Sold?
The Cost of Goods Sold, or COGS, represents the overhead associated with the materials and labor, which were needed to produce the goods sold during a given period. The COGS calculation is only concerned with the production costs of a good, and does not take distribution and sales force costs into account. It will always include the direct materials cost and direct labor cost for each item, but indirect overhead associated with production, such facility costs, are distributed between Inventory and COGS, according to Generally Accepted Accounting Practices (GAAP). Continue reading...
What should I look for in a good “Rent or Own a House” calculator?
The decision process to rent or own a home can be made a little easier with a good rent-or-own calculator. In the ideal “Rent or Own a House” comparison calculator, you should be able to input the following: an assumed appreciation rate for residential real estate in the area, the cost of maintaining an owned home, rent increases, and potential tax benefits of owning versus renting. Make sure to use realistic or even pessimistic assumptions on the inputs, because once time has passed there will be no way to fix overly optimistic assumptions. Continue reading...
What should I look for in a good “Lease or Buy a Car” calculator?
Calculators are available to help you decide whether to lease or buy a car. Despite the advice of our older family members, many financial decisions will benefit from the use of math and technology, instead of just “rules of thumb,” and they will depend on the circumstances present at the time of the decision. Despite the fact that you may have purchased a vehicle or two in the past, you might benefit from using an online calculator that can help you compare whether it might be in your best interest to lease the vehicle this time or buy it. Continue reading...
What should I look for in a good Investment Performance Evaluation calculator?
A good investment performance calculator will give you the ability to input various cash flow scenarios and compute weighted returns, among other options. A really useful investment performance calculator will allow you to input various cash flow scenarios and to see weighted returns based on these. Dollar-and-time-weighted performance, dividend cash flows, deposits and withdrawals, as well as fees paid for various transactions, will all be incorporated in a good calculator. Continue reading...
Should I invest in gold?
Gold can provide diversification in a simple way, since it has a history of being generally non-correlated with most other asset classes. It is not necessarily a hedge against anything specific, as some claim, since its price movement is too random. Conventional wisdom says that investing in gold might be a good hedge against inflation or market cataclysms. Some of these beliefs are unfounded. The price of gold appears to go up only when it is in high demand (such as when the price has gone up some already), rather than in tandem to any specific market force such as inflation or interest rates. If investors have some idea of when other investors are going to pile in, such as during times of uncertainty, they will likely be able to ride an uptrend in gold prices for a while. Continue reading...
Should I buy physical gold instead of gold ETFs?
There are probably more important things you can do with your time than find a place to store your suitcase full of gold and hover over it like a mother hen. But it may be worth it to you, since owning shares of a gold ETF is not the same as owning actual gold. Gold ETFs work by holding some amount of gold in trust and then selling shares of the fund that owns it. There is a significant discrepancy between the dollar value of the gold which is held and the total value of the shares which are sold, however, and if there were ever a “run” on the fund, no one would be able to actually get gold bricks out of fund managers. Continue reading...
What are Utilities Stocks?
Utilities stocks are those who deal in services like water, electricity, gas, and other critical infrastructure. Recently, alternative energy has been added as a sub-sector due to its incremental rise in importance. Utilities are categorized as non-cyclical - even if the economy is in a recession, people still need water and electricity. For that reason, they are often treated as defensive stocks, which investors hope will outperform during more difficult economic times. There is little competition in the utilities sector, as the barrier to entry is generally extremely high for a new entrant, given the amount of infrastructure required. Continue reading...
What is Stagflation?
Stagflation is the occurrence of both stagnation, which is slowing growth and production levels, and inflation, which is the increase of the average cost of goods. If production costs rise for some reason, such as higher oil prices, it can cause economic growth to slow down and the supply of goods in the market to drop. This is known as stagnation. The weakened supply of goods in the market and the higher production costs of the goods will cause the retail prices of the good in the market to go up. Continue reading...
What is Revenue?
Revenue is a word describing any cash flowing into a business as a result of goods and services rendered. It is sometimes call gross income, and is a representation of income before all expenses. It is notable, though, that revenue only includes receivables in the current period. The Accounts Receivable on the company’ s books may include the entire cost of the goods or services rendered during that period, but the Revenue should generally only reflect the amount that is paid to the company in the current year. Continue reading...
Should I buy gold coins?
Gold bullion are an asset that will hold value due to their gold content; gold coins which are more numismatic, that is, collector’s items, may not retain the same value. The value of gold coins is twofold: the price of the gold in the coin and the numismatic value of the coin. There is an important distinction to be made, because some gold coins will have a lot of one, and not the other, and, if you want to make sure your investment is an investment in precious metal and not just a collector’s item, you should make sure you’re getting a coin that qualifies as bullion. Continue reading...
What is an OTC Stock?
Over-the-Counter securities transactions are done outside of formal exchanges, and the term could refer to private investments and contracts or transactions in unlisted securities, such as penny stocks. The major exchanges have requirements for being listed, pertaining mainly to the size of the company offering equity shares and the nature of the securities. Resources such as the Over the Counter Bulletin Board and "pink sheets" help to facilitate trades that cannot be performed on the largest exchanges, but there are several caveats to bear in mind. Continue reading...
If Everyone is Talking about Buying Gold, Should I Buy Some for My Portfolio as Well?
Gold is one of those things that gets plenty of hype and that most investors think they understand well. Gold, as any other commodity (silver, platinum, palladium, oil, wheat, copper, coffee beans, etc), might be a valuable part of your asset allocation. It is important to recognize, however, that gold is an extremely volatile commodity, and there is frequent chatter and hype surrounding it that easily influences many investors. Continue reading...
Why Should I be Extremely Careful with Commodities ETFs?
There are some things to keep in mind when investing in commodities and their ETFs. Most commodities trading revolves around who owns a hard asset and when. ETFs occupy a space in the commodities world that is somewhat unique. An ETF such as the Crude Oil Index does not physically buy millions of barrels of oil and store them. It buys financial instruments which theoretically should reflect the price of oil. Continue reading...
What are Fibonacci Channels?
Price movement often occurs in a range-bound way, even when an uptrend or downtrend is in effect. Fibonacci channels estimate support and resistance numbers using Fibonacci numbers, which are found throughout the natural world, in order to define possible places where reversals will occur. Fibonacci numbers are related to the study of chaos theory, which seeks to find order in complex systems. Since the markets have so many variables, but no lack of data, they are an excellent place to search for Fibonacci patterns. Continue reading...
Channel Up (Bullish)
A Channel Up pattern shows a clearly defined uptrend and describes the behavior of the price contained between upward sloping parallel lines. Higher highs and higher lows characterize this price pattern. This pattern is created via a lower trendline connecting the swing lows (1, 3, 5), and an upper channel line that joins the swing highs (2, 4, 6). A breakout above a Channel Up’s resistance line points to a continuation of the growth momentum, while a breakdown below the pattern’s support line can demonstrate a possible trend change. Continue reading...
Channel Down (Bearish)
A Channel Down pattern shows a clearly defined downtrend and describes the behavior of the price contained between downward sloping parallel lines. Lower lows and lower highs characterize this price pattern. This pattern is created via a lower trendline connecting the swing lows (1, 3, 5), and an upper channel line that joins the swing highs (2, 4, 6). A breakdown below a descending channel’s resistance line points to a continuation of the decline momentum, while a break out above the channel’s resistance line can show a possible trend change. Continue reading...
What is Bitcoin?
Bitcoin is a digital currency that is secured and maintained by a peer-to-peer network of millions of users online, making it a decentralized, fast, secure, cheap, and efficient as a digital currency. Bitcoin is a digital currency that can be acquired via traditional currency, trades, or work, and can be used for transactions in an ever-expanding network of users and merchants. It is legitimized and maintained by a peer-to-peer network of millions of users online, making it a decentralized, fast, secure, cheap, and efficient digital currency that exists independent of any centralized gatekeepers such as governments, regulated markets, or corporations. Continue reading...