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Table of Contents
Help Center
Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal Finance
Corporate Basics

Do I Need a more Specialized Financial Advisor?

Some advisors have practices that focus on specific types of investments or niche markets. If your investment portfolio seems to be lacking a particular area and you are not confident that your current advisor or you yourself can take on the challenge of incorporating the changes you desire, then you may want to speak with a more specialized advisor in that particular area. Similarly, some advisors focus on specific types of clients, such as medical professionals, and if such a category suites you then you may find that your needs are best met by someone who deals with people like you most often. There are some designations and certifications that advisors can earn beyond the standard ones, which may cause them to be sought out on certain topics or investments. Continue reading...

What is asset allocation?

What is asset allocation?

Asset allocation is theoretically the best way to control the return you experience, through diversification and rebalancing. Asset allocation theories provide you with mechanisms to diversify your money among various asset classes, such as stocks, bonds, real estate, commodities, precious metals, etc. The benefit of asset allocation is twofold: first, nobody knows which asset class will perform better at any given time, and second, various asset classes are not entirely correlated or have a negative correlation, which provides a hedge. If one asset class appreciates significantly, the other might not, but, if the allocation is done correctly, this may be exactly what the investor was looking for. Continue reading...

What is a bull call spread?

What is a bull call spread?

A bull call spread is a vertical spread that buys and sells calls in a way that benefits from upward price movement but limits the risk of the short position. Using calls options of the same expiration date but different prices, a bull call spread seeks to maximize profits for moderate price movements upward. A long position is taken in a call contract (meaning it is bought and held) that has a strike price near the current market price of the security or is at least lower than the other call contract used in this strategy. Continue reading...

What is a Keogh plan?

Keogh plans are any type of qualified plan at a sole proprietorship or partnership. Keogh plans come in various forms, and this is because they are actually quite a broad category. IRS Publication 560 (found here) divides workplace retirement plans into SIMPLE IRAs, SEP IRAs, and Qualified Plans. This last category, Qualified Plans, includes profit-sharing plans, 401(k)s, 403(b)s, money purchase plans, and defined benefit plans such as pensions and salary continuation plans. Continue reading...

What is a strike price?

What is a strike price?

A strike price names the price of the underlying security in options or derivative contract at which the underlying security will trade at settlement if it is exercised. In a call option, for example, the option would name a strike price, and if the current market price of the underlying security was more than the strike price, an investor who held the call contract would invoke his right to purchase the stock from the issuer/seller of the option at the strike price, which, remember is lower than the prevailing market price in this example, and the investor can turn around and sell it in the market at or near its most recent, and higher, price, for a profit. Continue reading...

What is Profit and Loss (P&L) Statement?

A Profit and Loss Statement, also referred to as an “income statement,” is a corporate statement that summarizes the revenues, costs and expenses incurred by a company during a specific time period, such as a quarter or a fiscal year. The main difference between a P&L statement and a balance sheet is that the P&L is designed to show changes in line items over the period analyzed, versus a balance sheet which simply shows a comprehensive snapshot of a company’s asset and liabilities on a set date. Continue reading...

What is Deflation?

Deflation is an economic term used to describe a trend of broad-based price declines for goods and services. Deflation is generally considered a big negative in the realm of economics. If a country is experiencing deflation, it is usually because demand for goods has fallen substantially, pushing prices down. It can also be tied to falling investment and government spending, both factors that signal weak demand in an economy. Continue reading...

What is the Interbank Rate?

What is the Interbank Rate?

The interbank rate is the average lending rate used between banks of comparable size and creditworthiness when they borrow money from each other. The Federal Funds Rate is the benchmark in America, while LIBOR (the London Interbank Offered Rate) is more prevalent elsewhere. These are indexes which are used to determine rates and terms for other financial instruments and swaps. The Prime Rate, or the rate banks will used for their most credit-worthy customers, is tied to the interbank rate but is slightly higher of course. In America the Federal Funds Rate is so called because the Central bank participates in the lending. This is sometimes called the overnight rate when it refers to money that is lent between banks overnight. Continue reading...

What is Chapter 11?

Chapter 11 is a type of bankruptcy filing a company can make to give itself time to reorganize and hopefully continue business. There are different types of bankruptcy filings a person or business can make, depending on how overwhelming their debt load is. Chapter 11 is a kind of bankruptcy filing that allows the corporate leadership to stay in control of a company while trading freezes on their stock and the company and its debts are reorganized. This is called “debtor in possession.” Continue reading...

What is the Lifetime Learning Credit?

The Lifetime Learning Credit is a federal tax credit to offset expenses associated with higher education. There is no age limit and the credit can be applied to part-time student courses, even if it is only one class. The credit is for 20% of the related expenses up to a maximum of a $2,000 credit per household. Tax credits are a dollar-for-dollar reduction of taxes due. The Lifetime Learning Credit can be used for higher education expenses, regardless of the age of the student, but there is a household limit per year. 20% of educational expenses up to a household maximum of $2,000 can be applied as an income tax credit. The credit exists to make it easier for Americans to increase their skill-set and education. Continue reading...