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Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal Finance
Corporate Basics
What is a bear call spread?

What is a bear call spread?

A bear call spread seeks to make money on the sale of call options but does not believe the underlying security will increase. A Bear Call Spread strategy is utilized when one believes that the price of the underlying stock will go down (but not significantly) in the near future. It entails selling a call short at a lower price than you buy a long call, which is done to realize a net credit at the outset. Continue reading...

What are the Basics of Annuities?

Annuities are financial products/contracts generally sold by insurance companies to protect an investor’s assets against downside market risk and long life expectancies. Investors have to pay premiums/fees in order to secure the guarantees. Annuities are very important investment instruments, and can be an indispensable part of your overall investment portfolio. Keep in mind that annuities are very aggressively marketed, and it is very important to understand exactly how they work. Continue reading...

What is the minimum investment in a typical hedge fund?

What is the minimum investment in a typical hedge fund?

Hedge funds can require initial investments that are quite large. This may be somewhere between $250,000 to $10,000,000. They will generally only accept Accredited Investors, meaning high net worth individuals that pass SEC standards which exempt the fund from some reporting and disclosure requirements. While the minimum investment varies, most Hedge Funds will accept only so-called accredited investors. Continue reading...

What Types of Life Insurance Exist?

What Types of Life Insurance Exist?

There are more than a few types of life insurance, and more are introduced as time passes. There is group life, term life, whole life, universal life, variations of these, as well as situations that use these products in contexts that warrant their own category such as bank owned life insurance (BOLI), captive insurance companies, and others. Term life insurance is the most common type of life insurance, and it serves as pure insurance, with no cash value, and a limited time in which it has level premiums or will pay the guaranteed death benefit. Continue reading...

What is a Market Maker?

What is a Market Maker?

A market maker is a broker-dealer firm or a registered individual that will hold a certain number of shares of a security in order to facilitate trading. There could be as many as 50 market makers for one particular security, and they compete for customer order flows by displaying buy and sell quotations for a guaranteed number of shares. The market maker spread refers to the difference between the amount a market maker is willing to pay for a security and the amount that the other party is willing to sell it. Continue reading...

What is the Equity Multiplier?

The Equity Multiplier is a number used to compare companies, arrived at by dividing total assets by owner’s equity, and it gives an idea of what proportion of the company’s assets have been financed through equity vs debt. In general a low Equity Multiplier is a good sign because it means that a higher proportion of equity has been used to acquire assets, as opposed to funding assets with debt. However, the absence of significant debt could mean that the company lacked the credit rating to issue debt or take out loans. Continue reading...

What is a Non-Current Asset?

A non-current asset is an asset on the balance sheet that is not expected to convert into unrestricted cash within a year’s time. Non-current assets may include such things as intellectual property and production/operations equipment - meaning they likely do not have a need to convert to cash. From a balance sheet standpoint, non-current assets are capitalized rather than expensed - meaning the company can allocate the asset’s cost of the asset over the number of years for which the asset will be used, instead of allocating it all in the year it was purchased. Continue reading...

What is an ABA Routing Transit Number?

What is an ABA Routing Transit Number?

Most people recognize this as a “routing number.” The American Bankers Association (ABA) assigns a number to each banking institution registered with them, for the purposes of electronic transfers; this is commonly known as a routing number, and officially an RTN, or Routing Transit Number. Consumers and bank clients are familiar with this number as the 9-digit number that appears beside their account number on the bottom of their personal checks. Every client with a particular bank will have have the same routing number on their checks. Continue reading...

What is the Federal Unemployment Tax Act (FUTA)?

The Federal Unemployment Tax Act was passed in 1939, and it set up trust funds for the purpose of providing unemployment insurance. Businesses, not individuals, are taxed to provide funds for the program. There are 53 state funds (including D.C., Puerto Rico, and the Virgin Islands), 4 federal accounts, and 2 associated with railroad retirement. The Federal Unemployment Tax helps states fund their own unemployment programs. Continue reading...

What is the Broadening Wedge Ascending (Bearish) Pattern?

What is the Broadening Wedge Ascending (Bearish) Pattern?

The Broadening Wedge Ascending pattern forms when a security price progressively makes higher highs (1, 3, 5) and higher lows (2, 4), following two widening trend lines. This pattern may form when large investors spread their buying over a period of time. When initial buying occurs, other market participants react to rising price and jump on the bandwagon to participate. Then value investors begin to sell, believing the price has risen too much, which spurs the original large investor to resume buying again. Once these activities stop, the price may break out in either direction. Continue reading...