What is the NASDAQ?
The NASDAQ (National Association of Securities Dealers Automated Quotations) is an electronic marketplace for trading stocks, and is also used to track major Technology stocks. The NASDAQ Composite is an index of over 3,000 publicly traded companies on the NASDAQ stock market, which includes the world's biggest and most relevant technology companies - Apple, Google, Amazon, Intel, Oracle, and so on. Continue reading...
What is Lifestyle Inflation?
Lifestyle inflation is a term used in personal financial planning for the tendency of people to increase their spending and standard of living right along with any raises and monetary resources, even if it’s is at the detriment of any plans for debt reduction or long-term savings. Monetary inflation describes the phenomenon when more money has no more utility value than a lesser amount used to because the cost of goods is going up. Lifestyle inflation is when people select higher-priced goods and lifestyle spending habits when they have the money available to do so. Continue reading...
Why Use a Blockchain?
Blockchains create an indisputable digital record that is decentralized, i.e, cannot be changed by a single actor. Using blockchain is generally for digital security. Here are few reasons to use a blockchain: Tokenization A user can authenticate a unique physical item by pairing them with a corresponding digital token. In that sense, these tokens serve to connect the physical and digital worlds. With a token assigned to each physical good, that can revolutionize supply chain management, managing intellectual property to prevent against counterfeiting, and fraud detection. Continue reading...
What is Dow Theory?
Dow Theory is perhaps the longest-standing method of market analysis still used in modern finance. It suggests that markets experience primary trends (which last several years), intermediate trends (which last under a year), and minor trends (which last less than a month). Markets are in an upward trend if an average exceeds certain thresholds, followed by a similar movement from another average. Longer, larger trends are considered more predictive than smaller ones, though correctly reading the primary trend in the main goal. Continue reading...
What is the Price to Book Ratio (P/B Ratio)?
The price to book ratio compares a company’s current stock market price to its book value (which is generally speaking a company’s net assets). To calculate, an analyst need only divide a company’s latest market price by it book value, which is calculated by taking ‘Total Assets minus Intangible Assets and Liabilities.’ The P/B ratio gives some idea of what premium an investor is paying if the company went bankrupt immediately. Continue reading...
What are Debt Ratios?
Debt ratios give a relative picture of a company’s ability to repay debts, make interest payments, and meet other financial obligations. They generally compare the level of debt in a company to the level of assets. Debt ratios are key for investors and particularly creditors, to determine the overall level of financial risk faced by a company. Debt ratios that increasingly turn unattractive can serve as “canaries in a coal mine” that a company is in danger of bankruptcy or default. There are several types of debt ratios, such as debt-to-equity, debt-to-capital, cash flow to debt, and so on. Continue reading...
What is Inflation?
Inflation is the increase in the cost of goods and the decrease in the buying power of a denomination of currency. Inflation is measured in a few ways, and one is by the cost of a broad basket of consumer goods. Increases year to year are reflected as the rate of the Consumer Price Index (CPI), but be mindful that there are other indexes. Inflation is not only the effect of the cost of goods rising, but of the actual buying power of a currency decreasing. Continue reading...
What Should I Do With a Lump-Sum Distribution From My Pension Plan?
We encourage you to be responsible and keep the future in mind. The first thing to keep in mind is that it’s very easy to spend a lump sum right away without thinking about the consequences. While the monthly payment option protects your money from overspending, a lump sum should be handled with frugality and practicality in mind. A large portion of this amount should be invested safely and wisely, particularly if you are very near to your own retirement age, and you do not have time to ride out market fluctuations. When investing, you should consider a conservative estimate of you and your spouse’s life expectancies weighed against your annual income needs, adjusted for rising healthcare costs. Continue reading...
What is MSCI?
MSCI Inc. is a company that is best known for its global indices. MSCI also provides research and pricing capabilities to institutional investors. MSCI was formerly a branch of Morgan Stanley, but grew to be so big that they spun off and formed the independent company, MSCI Inc. Perhaps its best known and used index is the MSCI EAFE, which tracks broad performance of Europe, Asia, and the Far East. Continue reading...
What does 'call option' mean?
If you own a Call Option, you have the right (not the obligation) to purchase a security at an agreed-upon price from the seller of the option. Buying a call option means you are bullish on the security. For example, an investor may buy an August 2017 call on stock XYZ for $50/share (strike price). This means that the owner of this call option has the ability to buy XYZ on the expiration date (August) for $50/share. Continue reading...