Articles on Stock markets
News, Research and Analysis
What is a market neutral fund?
Market neutral funds might be hedge funds or mutual funds or ETFs whose strategy is not based on bullish or bearish market predictions but instead seeks to be in a position to profit whether the market goes up or down.
Most mutual funds and ETFs out there are inherently bullish — you invest in those funds because you believe or hope that the industry or geographic region or cap-size that they invest in will grow in the future. Some funds offer bears a place to hole-up when the bubble inevitably bursts (or so they think).
Market neutral funds avoid making bets in either direction and instead seek to profit whether the market goes up or down. They do this by using long and short positions that basically balance one another out, but can also use derivative instruments and leverage. This strategy may limit returns, but it can also minimize risks. The strategy generally only seeks returns a few percentage points above the risk-free Treasury rate.
Equity-neutral hedge funds were shown by some research to have the lowest correlation to other hedge funds; they pick certain stocks to go long on in a category, at the discretion of the fund manager and mix their other long/short positions in the category to remain neutrally positioned for overall movement in the category.
Because these will all be uniquely blended according to the beliefs of their fund manager, they are basically market-neutral alternative investments.
What is Economies of Scale?
Economies of Scale is a concept that the efficiency of production rises as the quantity of goods produced increases
What is accommodation trading?
Accommodation Trading is when two traders enter into a non-competitive trade agreement which disregards the current price
What is an Accounts Payable Subsidiary Ledger?
The Accounts Payable Subsidiary Ledger will contain all of the transaction details for each credit and debit in a period
What is the “Riskless” (or Risk-Free) Rate of Return?
For comparisons of the risk/return ratio of an investment, one must start with a benchmark of a risk-free rate
What is a 529 Plan?
529 plans are accounts designed to help families save for the future college expenses of young family member
Where do I Get Started in Saving for Retirement?
Your employer is usually the best place to start, but you can also open your own retirement account (an IRA or Roth IRA)
What are Fibonacci Extensions?
A Fibonacci Extension is the prediction of a trend’s extent after an initial push and a retracement has been seen
What is a Takeover?
A takeover is an acquisition done through the procurement of enough equity interest to govern a company from the B of D
How to use the Arms Index (TRIN) in trading
The Arms Index is also called the Trin (short for “Trading Index”) because it seeks to indicate overbought or oversold conditions by serving as an index of trading activity