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What Should I Know About Roth IRAs?

Roth IRAs are a very popular and useful accumulation vehicle, and there are some things you should be aware of. Along with Traditional IRAs, Roth IRAs are very important retirement tools and should be taken into careful consideration while deciding upon the account that is right for you. The first thing you’ll want to know is whether you can contribute, based on income limitations, so check the current IRS website to find out. Continue reading...

What is a Coverdell ESA?

A Coverdell ESA is an account which can be used to save for educational expenses. These used to be called Educational IRAs until someone realized that didn’t make sense. A Coverdell Educational Savings Account (ESA) allows you to save money for your child’s future education costs. As opposed to a 529 Plan, which is limited to post-high school education, money from an ESA can be used as early as Kindergarten. Continue reading...

What is Net Income?

Net income is the amount of earnings left over once expenses have been deducted from sales. In short, it is the net amount of profit or loss. It is calculated by taking total earnings in a period (such as a quarter), and deducting all elements of the cost of doing business (labor, depreciation, fixed expenses, overhead, etc…) Net income is ultimately a measure of a company’s profitability, and its calculation should be scrutinized closely to ensure all expenses are being accounted for accurately. Continue reading...

What is GDP?

Gross Domestic Product (GDP) measures the production of all industries within a country, to get a picture of how the national economy is doing. GDP is one of the most important number to economists, and it is calculated every quarter. Growth for the current quarter compared to the previous quarter is a good sign. Two consecutive quarters of decline in GDP are an indication of a recession, but it is not the only metric used to make that call. Continue reading...

Who is an activist investor?

Who is an activist investor?

Activist investors buy enough voting shares to influence the decisions of a company, sometimes for political or moral reasons, sometimes for purely financial reasons. Activist investors can act alone or in groups, but their goal is to acquire enough shares of a company’s equity to influence the company’s decisions. Activist shareholders may need as little as 10% of shares to sway corporate governance. Continue reading...

B-/B3 — credit rating

B-/B3 — credit rating

B- — S&P / Fitch B3 — Moody’s In the world of junk bonds, a B3/B- rating is about as low of a rating as most investors will venture to explore. Bonds are rated by independent ratings institutions known as the Big Three: Moody’s, Fitch, and S&P. Two companies, S&P and Fitch, use the same symbols, and the B- in this example belongs to them. Moody’s has its own system, and the B3 in this example is theirs. Continue reading...

What is the Falling Wedge (Bullish) Pattern?

The Falling Wedge pattern forms when the price of a pair appears to be spiraling downward, and two down-­sloping lines are created with the price hitting lower lows (1, 3, 5) and lower highs (2, 4). The two pattern lines intersect to form a narrow triangle. Unlike Descending Triangle patterns, however, both lines need to have a distinct downward slope, with the top line having a steeper decline. This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. However, there is a distinct possibility that market participants will either pour in or sell out, and the price can move up or down with big volumes (leading up to the breakout). Continue reading...

What is the Rectangle Top (Bearish) Pattern?

The Rectangle Top pattern forms when the price of a pair is stuck in a range­bound motion, and it bounces between support and resistance levels. Two horizontal lines are formed (top: 1, 3, 5) and (bottom: 2, 4) as a result. Depending on who gives up first – buyers or sellers – the price can Breakout in either direction. This pattern is commonly associated with directionless markets. Usually the pattern performs better when there is a strong uptrend leading into the formation. Continue reading...

What is a Dividend?

A dividend is an income-like payment to an investor who holds stock. Dividends tend to be paid by companies who are well established and are not retaining their earnings for capital projects. There are several kinds of dividends, but the most common is the cash dividend. You are not likely to see dividends paid by companies whose stocks are categorized as Growth stocks. Growing companies are going to be ploughing money back into their company for years. Well-established companies tend to distribute some of their profits as dividends because it allows them to retain loyal shareholders and keep the price of the stock fairly steady. Continue reading...

What is the Descending Triangle (Bullish) Pattern?

What is the Descending Triangle (Bullish) Pattern?

The Descending Triangle pattern is formed when the price of a security establishes a support level (1, 3, 5) and bounces off that level to a declining resistance level, creating a down-­sloping top line (2, 4). The breakout can either be up or down, depending if the resistance or highest support level is broken first. This pattern is commonly associated with directionless markets since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. Continue reading...