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How Much Money Should I Set Aside for Emergencies?
Research suggests that more than half of adult Americans do not have sufficient savings needed for emergency purposes. Here’s a startling but true piece of information: most surveys conducted in the past few years indicate that more than half of adult Americans do not have any kind of emergency fund at all, and even fewer have enough to cover three months of living expenses in the event of an unexpected event, like job loss or health emergency. Continue reading...
Is my portfolio diversified enough?
Diversification is intended to reduce the volatility of price movements in individual securities, but many people are not sure what proper diversification looks like. It depends. You should definitely have exposure to at least two asset classes: equities and bonds. Within each asset class, diversification is also important. In your equity portfolio, you should have exposure to stocks with various capitalizations (such as Large Cap, Mid Cap, and Small Cap), various geographical areas (such as the Europe), Developing Markets, and Emerging Markets. Continue reading...
What are some strategies for diversifying a portfolio?
There are many ways to diversify a portfolio, but all of them center around a strategy of owning different types of asset classes. For equity investors, perhaps the best strategy for diversifying a portfolio is to own companies from different sectors in different style categories, maybe even across the globe. The S&P 500 has ten different sectors, and a very broadly diversified portfolio should have exposure to each one in some capacity. Continue reading...
How Should I Invest my First Thousand Dollars Saved?
If you already have an emergency fund, you should put your $1,000 into a brokerage account and buy an ETF. Keep it simple – buy an ETF that corresponds to the S&P 500, and leave your money there for as long as possible. What Should My First Savings Vehicle Be? Should I Trust an Article Such as “Five Best Ways To Invest For Income?” Continue reading...
What is active money management?
Active management is when an investor or money manager attempts to outperform an index or benchmark, using tactical strategies. Many economists and financial professionals believe that the markets are efficient. This means that all available financial information has already been built into the prices of securities, and that you cannot outperform the market by making specific selections of stocks, timing the market, reallocating your assets regularly, following the advice of market pundits, or finding the best portfolio managers. Continue reading...
What are Other Mutual Fund Classifications?
Let’s look at some of the classifications for mutual funds that are determined using criteria other than market cap and P/E ratios. What is Mutual Fund Classification According to the Price to Earnings Ratio? What is Mutual Fund Classification According to Market Capitalization? Besides the main classifications for equity mutual funds which are derived from market cap and price-to-earnings ratio, many other categories for mutual funds exist. These criteria may be based on how much exposure a fund has to a specific industry, sectors or geographical regions, as well as the types of management strategies that the fund uses and which kinds of assets are held. Continue reading...
What is a Reverse Stock Split?
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...
What is a Home Debtor?
In contrast to the term “home owner,” home debtor is reserved for those who will seemingly never be able to pay off the mortgage(s) on their home, or who have already defaulted. Most Americans live in homes that they pay on, but are still primarily owned by the bank that loaned them money. Banks have insurance to protect them against mortgage defaults. Home mortgage loans are the primary way that Americans by homes today. Continue reading...
How large are market fluctuations?
Fluctuations are represented in terms of volatility, and different types of investments experience different levels of volatility. The answer here depends on which market you’re talking about. Generally speaking, the capital markets in fixed instruments, such as government bonds, are the least volatile. Market fluctuations of the price of commodities, small-cap stocks, and emerging markets are the largest, and can be as high as 30-40% per year. Continue reading...
Emerging Leaders in Oncology: Best Trending Stocks
The biotechnology and pharmaceutical sector has always been a hotbed of innovation and investment, particularly in the field of oncology. Cancer, one of the leading causes of death worldwide, has driven companies to develop groundbreaking treatments and technologies. Investors seeking growth potential in their portfolios often turn their attention to the stocks of companies leading the charge in this crucial battle. In this article, we delve into the top stocks within the oncology theme, highlighting notable companies, their market capitalization, and what makes them stand out in this competitive sector. Continue reading...
Exploring Top Food Industry Stocks and Emerging Trends
In the diverse world of food industry stocks, several notable companies stand out for their market presence and innovative approaches. This article delves into the financial aspects and market dynamics of these companies, exploring how they are adapting to changing consumer preferences and the impact on their stock performance. Continue reading...
An In-Depth Analysis of the Top Food Retailers and Emerging Trends
The food retail industry, a vital segment of the global economy, encompasses companies that specialize in selling food, beverages, and household products. This article delves into the financial aspects of this industry, focusing on notable companies such as Walmart (WMT), Target Corp (TGT), and Kroger Co (The) (KR), analyzing their market performance, capitalization, and competitive strategies. Continue reading...
What is market exposure?
Market exposure is the degree to which an investor is participating in the risks and returns of the market as a whole or a particular sector. Exposure can have a positive or negative connotation, but, as they say, “nothing ventured, nothing gained.” Market exposure allows an investor to participate in the potential upside of the market, but can also subject the investor to the inherent risks. Some people save money religiously but are not likely to retire the way they want to because they aren’t willing to let their money be risked in the market. Continue reading...
What is market research?
Market research is the process of evaluating a possible opportunity for entering into a market with a new product or company, or for evaluating the effectiveness of a product or company in a market that they are already invested in. Market research can also be important for decisions regarding mergers and acquisitions. It may involve surveys and market study groups. Sometimes a company will conduct its own market research, but often third-party companies are hired for the task. These companies may specialize in sampling and surveying methods for consumer groups, and/or statistical analysis of a business model or product’s chance of success in a given market. Companies may look to such analysts if they are considering a merger or acquisition, or of launching a new product. Continue reading...
Are the markets efficient?
The concept of an efficient market is more applicable today than it was when it was conceived, a truly efficient market is nearly impossible. The Efficient Market Hypothesis states that random new information will affect the value of securities, and that new information disseminates so quickly among rational investors that it is futile to try to beat the “market portfolio.” Thirty years ago, this was more of a theory than an observable phenomenon, and plenty of inefficiencies in the dissemination of information and the pricing of securities could be pointed out. Continue reading...
What is market share?
Market share is the percentage of the total amount of similar products sold in a marketplace that are constituted by a particular product or the products of a particular company. This sometimes used synonymously with the term Market Penetration. Most industries have many competitors offering essentially the same services and products; in fact that is a sign of a healthy capitalistic marketplace. The market share of a company is the proportion of the total sales in that industry that belong to their company. Continue reading...
Navigating the Future of Generic Drugs: Top Companies and Emerging Trends
The pharmaceutical industry has always been a focal point for investors, but in recent years, the generic drugs segment has garnered significant attention. This article delves into the financial aspects of this industry, highlighting notable companies and market trends that shape its future. Continue reading...
What Is Market Capitalization?
Market capitalization is a measure of a company’s size, in terms of the value of its total outstanding shares. Most readers have probably heard of large-cap, mid-cap, and small-cap stocks. These classifications are based on the market capitalization of a company, which is defined as the number of a company's outstanding shares multiplied by the price of one share. For example, if company ABC issued 1,000 shares and it is trading at $10/share, then the market capitalization of company ABC is 1,000 x 10 = $10,000. The largest company by market capitalization as of the time of this writing is Apple Inc. Its market capitalization exceeds $750 billion. Continue reading...
What are futures markets?
Futures markets are the formal exchanges on which futures contracts are bought and sold for commodities, financial products, and interest rates. Futures markets constitute a large part of the financial system and are an attempt by participants to hedge against some of the volatility and risks to which they might be exposed as time passes, especially where contracts await resolution or payment. Futures contracts might be created for financial instruments, commodities, and other derivative interests. The Chicago Mercantile Exchange, the Intercontinental Exchange (ICE) and the Eurex Exchange are large parts of the international network of futures markets and clearing houses. Continue reading...
What is secondary market?
The secondary markets are where most trading goes on today, where the trades are made investor-to-investor using shares that were issued sometime before, and profits are made by investors and not the underlying company who issued the shares originally. The secondary market is a term used to describe the market created by those who are selling and buying shares which were issued some time ago in what's called the primary market. Continue reading...