What this means is that in the event that the company were liquidated, all debts would be serviced first, including bonds issued by the company, and the remaining balance would be divided amongst shareholders. If a company has a respectable debt-to-equity ratio, it can improve the appeal of a company’s stock and lead to a higher market price for the shares.
Shareholders equity is the amount on a company’s balance sheet that remains after all liabilities have been subtracted from a company’s assets. For stockholders, this is encouraging because it means that they will be likely to get something for their shares if the company is liquidated or perhaps if an offer is made to existing shareholders in the event of a merger or acquisition.
It basically means that stock shares have an inherent value. The market value of a stock may increase from there, because there is a demand from investors for companies with strong fundamentals. Looking at the books of a company and their position in the market in relation to their peers is known as fundamental analysis.
Many investors, especially older investors, made decisions for their portfolio based on fundamentals. Today, many investors make short-term decisions in the market that are based on technical analysis methods which use price and trade volume to make decisions based more on the market demand for a security rather than the fundamentals of the company behind the stock.
The worst day for the markets, in terms of the largest single-day point loss by the Dow Jones, was September 29th, 2008
Large Cap mutual funds primarily invest in companies with the highest market capitalizations
A put time spread is an options strategy that has the investor implementing a short put and a long put at the same price
Private Placements — How To Get Information The answer is, you can’t. Private placements have no reporting or registration requirements with the SEC or other entities
There are many ways to diversify a portfolio, but all of them center around a strategy of owning different types of asset classes
REPO is shorthand for Repurchase Agreement. It is a money-market practice to buy/sell government securities overnight
Money market securities are essentially IOUs issued by governments, financial institutions and large corporations
Futures markets are the formal exchanges on which futures contracts are bought and sold for financial products
The A-/A3 rating is considered Investment Grade, but it is getting closer to the Junk Bond range
The Ascending Triangle pattern has a horizontal top line representing a resistance level, and an upward-sloping bottom