
Margin means buying securities, such as stocks, by using funds you borrow from your broker. Buying stock on margin is similar to buying a house with a mortgage. If you buy a house at a purchase price of [more…]
When you make investments, you have the potential to make money (called a return). Money in a bank account pays interest, which is your return. You earn that small amount of interest for allowing the bank [more…]
Financial strength ratios go by many names (liquidity, solvency, financial leverage), but they all point to the same thing: What is a business's financial strength and position? A balance sheet–oriented [more…]
For currency trading newbies, the best way to get a handle on currency trading is to open a practice account at any of the online foreign exchange (forex) brokers. Most online forex brokers offer practice [more…]
If you leave your job, the most sensible thing to do with your 401(k) from a tax-management point of view is a 401(k) direct rollover (also known as a trustee-to-trustee transfer) of the money. With this [more…]
When you go back to work after you retired early and already started collecting Social Security, you could end up with reduced benefits. It all depends on whether you've reached your full retirement age [more…]
Hedge funds are designed to reduce an investment risk (called hedging) while maintaining a good return on investment. You can sort hedge funds into two basic categories: absolute-return funds and directional [more…]
You can’t control what happens in the markets, but you can turn market turbulence into opportunities. Consider actions like these during market declines: [more…]
Roth IRAs allow you to place money in a long-term savings plan and defer income tax on the amount you invest and the investments earnings. Roth IRAs allow an annual contribution of up to [more…]
Categorizing the phases of the market enables you to adjust your trading strategies based on current market conditions. The idea: Trade aggressively when you're confident in your market assessment, but [more…]
Contributing to a 529 plan may seem quite simple — you write the check or get the money automatically withdrawn from your checking account, and those funds get deposited into the 529 plan. [more…]
Before you invest in anything, you first must make sure that you have a strong economic foundation. If you don't, your situation is like building a brick house on shifting sand. You need to ensure that [more…]
The foreign exchange (forex) market is open and active 24 hours a day from Monday morning in New Zealand through Friday night in New York. At any given moment, currency trading desks in dozens of global [more…]
The foreign exchange (forex) market is often described as the world's most liquid financial market, and that's true. But it doesn't mean that currencies aren't subject to varying liquidity conditions that [more…]
Returns on savings bonds are so low that they’ll never make you rich. In fact, returns are so low that large pension funds and other big investors don’t purchase savings bonds. However, for many individuals [more…]
With the advent of the telegraph, stocktraders could receive daily price quotes. Many cities had bucket shops — storefront businesses where traders could bet on changes in stock and commodity prices. They [more…]
As baby boomers enter retirement age, estate planning and sound investing loom large as they plan for a happy retirement and for leaving their children a legacy. Annuities offer a way to invest your money [more…]
A fixed deferred annuity is the insurance industry's version of a savings account. It helps you earn a modest rate of interest safely and allows you to postpone the payment of income taxes on your earnings [more…]
Traditionally, investors and traders want to buy low and sell high. They buy a position in a security and then wait for the price to go up. It's not a bad way to make money, especially because if the country's [more…]
Market turmoil causes investors to question their own judgment and seek different approaches, but the only thing investors really need to do is follow some fundamental principles. Consider the following [more…]
Oh sure, the strength of our economy and the vigor of our industry rely much on the progress of science, the foundations of democracy, and the labors of a motivated and educated workforce. But what [more…]
With valuation ratios, a company's stock price enters your investment analysis. Valuation ratios include the ever-popular price to earnings (P/E) ratio, along with price to sales [more…]
People invest in mutual funds for four fundamental reasons: professional management, diversification, convenience, and marketability. The following sections outline these benefits, which make mutual funds [more…]
Short selling involves selling a stock you don’t actually own in order to profit from a decline in price. So when you short a stock, you want the value to drop. [more…]