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What is an Earnings Call?

An earnings call is when a company opens up a teleconference line or webcast that the public can join to hear the company management talk about how the company performed recently, their plans for the future, and the market forces that exist in the current environment. Most publicly traded companies today have adopted this practice. Earnings calls may take place once a year or during earnings seasons after the quarterly earnings have been announced in a press release. Companies often have one executive whose job is to interface with the shareholders in such settings, but various executives are often given a chance to present some thoughts. Continue reading...

What is Mutual Fund Classification According to the Price to Earnings Ratio?

Managing a fund based on P/E Ratio generally tends to put valuation ahead of other criteria when selecting stocks. The main categories which can be derived from P/E Ratios are Growth and Value funds. Fund managers may intentionally invest in companies with a higher P/E than the market benchmark, because these tend to be considered Growth stocks. These companies are experiencing growth and are projected to continue to do so, which is seen in the high price of the stocks. Continue reading...

Should I Trust an Article Such as “Five Best Ways To Invest For Income?”

Yes and no. Avoid putting too much faith in “best” lists, but realize that at least three of these are probably going to irrefutable and fundamentally sound bits of advice, and probably delivered in a timely manner. Generally speaking, there is no such thing as the “best ways” to invest. However, such articles can help you to land on some timely strategies that you may not have acted on without prompting. Continue reading...

How to Spot a Forex Scam?

The world of forex trading offers significant opportunities for investors to profit from the ever-changing currency markets. However, it's essential to be aware of the potential pitfalls, as the allure of quick wealth has led to the proliferation of forex scams. In this article, we will delve into how to spot a forex scam, and we'll highlight key warning signs and red flags that should make you proceed with caution. Continue reading...

What is the Hindenburg omen and is there any merit to it?

The Hindenburg Omen is technical indicator meant to predict bear markets, sell-offs, and declines. It is named after the famous tragedy of the Hindenburg Zeppelin in Germany on May 6th, 1937. The “Omen” identifies several very complex technical patterns in the behavior of the NYSE, such as the number of new highs, new lows, and some other indicators. It claims to predict market crashes within a very short period of time (about 40 days). Continue reading...

Should I Listen to Commentators on Financial News Programs?

It’s easy to become drawn in by the financial media, but it’s important not to let them do your thinking for you. Commentators on the most reputable financial channels will always be sharp-looking, smooth-talking, and quoting a barrage of statistics that makes it seem like you didn’t know anything before you tuned in. Is this an indication of being camera-friendly? Without a doubt. Is it an indication of sound financial advice? Absolutely not. Continue reading...

What are Adjusted Earnings?

Adjusted Earnings are also known as pro forma, non-GAAP earnings, and are usually met with some cynicism. Non-GAAP methods of accounting for earnings are something that is not allowed to be used to mislead investors, according to SEC rules. GAAP stands for Generally Accepted Accounting Principles, and they represent the standards and SEC rulebook for a publicly-traded company’s accounting. There are times when it makes sense to use adjusted earnings instead of GAAP earnings because adjusted earnings will ignore non-recurring one-time expenses so that analysts can compare company performance in other areas without being distracted by a large one-time expense. Continue reading...

What are Fibonacci Numbers?

Fibonacci numbers are part of the Fibonacci sequence, where the two previous numbers are added together to calculate the next number in the sequence. The ratio of two Fibonacci numbers is the Golden Ratio, or 1.61803398875, which has been used since ancient times as the perfect proportion in architecture and other design. The Golden Ratio is also known as Phi (pronounced “fee”). Because Fibonacci numbers are found throughout the natural world, they have been integrated into some traders’ strategies for market analysis. Continue reading...

Can I Get Exposure to Virtual Currency Through ETFs, Mutual funds, or Stocks?

While there aren’t that many ways to use institutional-level, regulated vehicles to get exposure to bitcoin and other cryptocurrencies, there are some, and the market will likely expand. Money managers are finding ways to offer managed investments that offer exposure to cryptocurrencies, despite the hurdles presented by regulators and skepticism from large financial companies. On the over-the-counter market OTCQX, you can buy shares of the Bitcoin Investment Trust from Grayscale (Nasdaq: GBTC). This fund has seen massive gains recently but does come with a 2% fee. The Chicago Mercantile Exchange (CME) has stated that it would like to start trading cryptocurrency futures, but it may be a little time before this becomes a reality, due to significant red tape and guidance needed regarding cryptocurrencies. Continue reading...

Is there such a thing as the “pre-holiday effect?”

Pre-Holiday price fluctuations have been observed in many instances, but there a difference of opinion as to whether the markets are higher or lower just before holiday. Pre-Holiday Seasonality is the idea that prices will rise or fall before a holiday weekend in which the market will be closed for a day. When researching this phenomenon you may find colloquial wisdom stating that prices always rise before a holiday, but in actuality most of the evidence points the opposite direction: prices are most likely to close lower the day or two before a holiday weekend, and may remain low the day after the holiday, but this provides a possible opportunity to ride the upswing. Continue reading...

How Can You Use Elliott Wave Theory to Trade Breakouts?

The world of stock market trading has various theories and methodologies, and among the most intriguing is the Elliott Wave Theory (EWT). Developed by Ralph Nelson Elliott in the 1930s, EWT is based on the idea that stock markets, despite their seemingly random movements, move in repetitive wave patterns. These patterns are believed to reflect mass psychological swings between optimism and pessimism. Continue reading...

Is there such a thing as a “presidential election cycle” impact on stocks?

Some analysts have popularized the notion that the 4-year presidential election cycle holds secrets to bear and bull markets. Found in publications such as the Stock Traders Almanac, The Presidential Election Cycle is the theory that different phases of the presidential term are correlated to broad market conditions. As will many such theories, it may not hold up under a lot of scrutiny, but there are some correlations to be found. Continue reading...

A+/A1 — credit rating

A+ — S&P / Fitch A1 — Moody’s In the spectrum of ratings given to bonds and companies, A+/A1 is a very good rating to get, even if it is the 5th rating from the top. The Big Three ratings institutions, which are Fitch, Moody’s, and S&P, give ratings for creditworthiness after inspecting the books of companies who issue bonds. There are credit ratings given for companies and credit ratings given to bond issues. Continue reading...

How Do Reverse Mergers Offer a Shortcut to Going Public?

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What is Plaid?

If you've ever connected your bank account to popular financial apps like American Express, Venmo, or Upstart, you've likely encountered Plaid. This fintech powerhouse plays a pivotal role in the seamless exchange of financial information between users and financial service providers. In this article, we'll delve into what Plaid is, how it operates, and most importantly, whether it's safe to trust with your sensitive financial data. Continue reading...

Should I Trust an Article Such as “Five Awesome Value Stocks?”

Articles that list “great value” buys should be food for thought, but may not put food on your table. Value stocks are those with low Price to Earnings ratios. To say that a particular Value Stock has an “Awesome” value is to say that it has been significantly undervalued by the market. While sometimes the market is ignorant of the growth potential and strong fundamentals of a particular company, the author of such an article would have you believe there is a great big crystal ball in his office. Continue reading...

Should I Trust an Article Such as “What Are the Best Mutual Funds?”

Probably not, but it might get you thinking in the right direction. The short answer is “no.” The title of such an article should be enough to deter your from it. If such information were widely available, everyone would instantly act on it and nobody would be able to profit. In fact, if such lists are analyzed, almost none of the funds will appear on the next year’s list. That’s too bad, since mutual funds are not meant to be as liquid as stocks and ETFs, but are designed to be held for 3 years or more. Continue reading...

Is Life Insurance a Good Investment?

As a rule of thumb, life insurance should not be considered an investment at all, since it’s primary purpose is to provide insurance coverage. That said, some cash value policies have attractive features that can be appealing in certain circumstances. We will say that a smart investor who has done research and gotten good advice will generally not end up with a permanent cash value life insurance policy. Continue reading...

What is Investment Advice?

Professional investment advice is highly regulated, and all publications, seminars, correspondence and recommendations between professional advisors and clients must be kept on record and hold up to scrutiny. It is easy to mislead or misinform investors who have not had a chance to educate themselves, and their very livelihoods are at stake if their money is mishandled. Investment advice can be found at the local barber shop, bleachers, and beaches, but those who want to make sure their money is handled correctly will seek professional advice. Continue reading...

Is there such a thing as the “NFL effect?”

The “NFL Effect” suggests that the outcome of the Super Bowl can foretell market behavior. Some market statisticians have analyzed the correlation between the behavior of the stock market and the winner of the Super Bowl, and suggest that the DJIA will go up or down depending on whether the winner was from the AFC conference or the NFC conference. While the Super Bowl indicator has been right 33 times out of 41, to serious investors, this correlation does not imply causality. You can find lots of other time-series which are also strongly correlated to the stock market performance, such as the number of sunny days in the previous year. Continue reading...