The Basics - Investing FAQ for New Investors
The Beginner's Corner provides answers to frequently asked questions (FAQ) posed by new investors such as, "What is the Dow Jones?" and "What are stocks?".
Market Capitalization 101
Market capitalization is a term used on Wall Street that is extremely important. Although it is often heard on the nightly news and in financial textbooks, very few new investors know what market capitalization is or how it is calculated. It’s actually really easy and intuitive. After you read about the details of market cap, as it is often called for short, you’ll understand the concept and begin using it when putting together your own portfolio.
Market capitalization is a term used on Wall Street that is extremely important. Although it is often heard on the nightly news and in financial textbooks, very few new investors know what market capitalization is or how it is calculated. It’s actually really easy and intuitive. After you read about the details of market cap, as it is often called for short, you’ll understand the concept and begin using it when putting together your own portfolio.
The Entire Theory of Investing Using Murano Glass Beads
After having a conversation with one of the jewelry specialists at our luxury retail store, I decided to explain the entire reason investing generates much higher wealth than any other endeavor by creating a small, fictional company that sells nothing but murano glass beads as the product. Working through the numbers will allow you to see in only a few minutes the concept behind every IPO, every business sale, and every merger or acquisition.
After having a conversation with one of the jewelry specialists at our luxury retail store, I decided to explain the entire reason investing generates much higher wealth than any other endeavor by creating a small, fictional company that sells nothing but murano glass beads as the product. Working through the numbers will allow you to see in only a few minutes the concept behind every IPO, every business sale, and every merger or acquisition.
If One of the Companies I Invested In Goes Bankrupt, Will I Owe Money?
Have you ever wondered what happens if a stock you owns goes bankrupt? Will you owe money? What happens to your holdings? Get the answers to these often asked, but rarely answered, questions.
Have you ever wondered what happens if a stock you owns goes bankrupt? Will you owe money? What happens to your holdings? Get the answers to these often asked, but rarely answered, questions.
Things to Remember Before You Buy Your First Investment
Buying your first investment can be overwhelming. These keys and tips will help you think about some important things to consider before you sign your name to the check. Even though they are designed to be read before you've bought your first investment, they are still useful to even the most experienced financier!
Buying your first investment can be overwhelming. These keys and tips will help you think about some important things to consider before you sign your name to the check. Even though they are designed to be read before you've bought your first investment, they are still useful to even the most experienced financier!
The Four Ways to Make Money
According to research, only 10% of American millionaires inherited their money with the rest going out and earning it. How did they make money? In this article, we'll discuss the four ways to make money that serve as the foundation of nearly every fortune in the history of the world other than inheritance, theft, and other methods that simply aren't practical to the average person.
According to research, only 10% of American millionaires inherited their money with the rest going out and earning it. How did they make money? In this article, we'll discuss the four ways to make money that serve as the foundation of nearly every fortune in the history of the world other than inheritance, theft, and other methods that simply aren't practical to the average person.
Think of Your Stocks Like Real Estate
Think of stocks like real estate. People are often rational about the real estate they own but don't bring the same focus on value to the stocks they hold in their brokerage and retirement accounts. That's why so many regular investors do fine when owning real estate and property but fail miserably when it comes to the stock market.
Think of stocks like real estate. People are often rational about the real estate they own but don't bring the same focus on value to the stocks they hold in their brokerage and retirement accounts. That's why so many regular investors do fine when owning real estate and property but fail miserably when it comes to the stock market.
The Number 1 Secret to Coming Back from Big Investment Losses
There is a two part secret formula for coming back from large stock market investment losses that can help you shave years off the process of rebuilding your wealth and moving toward the life of your dreams. In this special feature, we discuss how regular dollar cost averaging and dividend reinvestment can help you recover from painful investment losses by lowering your weighted average cost basis.
There is a two part secret formula for coming back from large stock market investment losses that can help you shave years off the process of rebuilding your wealth and moving toward the life of your dreams. In this special feature, we discuss how regular dollar cost averaging and dividend reinvestment can help you recover from painful investment losses by lowering your weighted average cost basis.
Successful Investing Is Not Sexy
In the world of investing, most of the great gains are made in boring companies or index funds that aren't sexy. That means things like water utilities, power plants, banks, insurance, candy, chocolates. It all comes down to the price you pay for the asset and your focus on low costs and sufficient diversification.
In the world of investing, most of the great gains are made in boring companies or index funds that aren't sexy. That means things like water utilities, power plants, banks, insurance, candy, chocolates. It all comes down to the price you pay for the asset and your focus on low costs and sufficient diversification.
Why It Might Be a Horrible Mistake to Sell Out During a Down Market
If you are more than five years away from retirement, your 401(k) was invested in a broadly diversified, low-cost index fund, and you’ve sold off your assets as the market has collapsed, you have made a very, very stupid long-term decision. Believe me, I wish it could be sugar coated, but you’ve effectively just dumped your ownership of great American businesses such as Johnson & Johnson, Coca-Cola, Wal-Mart Stores, and General Electric to value investors at a fraction of their intrinsic value.
If you are more than five years away from retirement, your 401(k) was invested in a broadly diversified, low-cost index fund, and you’ve sold off your assets as the market has collapsed, you have made a very, very stupid long-term decision. Believe me, I wish it could be sugar coated, but you’ve effectively just dumped your ownership of great American businesses such as Johnson & Johnson, Coca-Cola, Wal-Mart Stores, and General Electric to value investors at a fraction of their intrinsic value.
Surviving a Roller Coaster Stock Market
Stock market volatility can be a problem for investors that don't have experience in the financial markets. These tips and tricks can help you survive stock market volatility and reduce your retirement risk.
Stock market volatility can be a problem for investors that don't have experience in the financial markets. These tips and tricks can help you survive stock market volatility and reduce your retirement risk.
How Do I Actually Make Money From Buying Stock?
How does an investor actually make money from buying stock? The return an investor makes comes from dividends and an increase in the price of the shares.
How does an investor actually make money from buying stock? The return an investor makes comes from dividends and an increase in the price of the shares.
Are You Gambling or Investing?
Some people treat Wall Street like a giant casino where luck, and not skill or analysis, is the determining factor in who succeeds and who fails. How do you know if you are gambling or investing?
Some people treat Wall Street like a giant casino where luck, and not skill or analysis, is the determining factor in who succeeds and who fails. How do you know if you are gambling or investing?
Does a High P/E Ratio Mean a Stock is Overvalued?
Does a high price to earnings ratio, or p/e ratio, mean a stock is overvalued? Not always. Sometimes a high p/e ratio can be justified if the investor is certain as a result of his or her analysis that the cash flows will increase enough to result in a higher earnings yield in the future.
Does a high price to earnings ratio, or p/e ratio, mean a stock is overvalued? Not always. Sometimes a high p/e ratio can be justified if the investor is certain as a result of his or her analysis that the cash flows will increase enough to result in a higher earnings yield in the future.
Know Your Opportunity Cost
As an investor, it is important to know your opportunity cost when building your portfolio. Opportunity cost can be defined as the expected yield of the next best investment available to you.
As an investor, it is important to know your opportunity cost when building your portfolio. Opportunity cost can be defined as the expected yield of the next best investment available to you.
The Three Primary Types of Financial Capital
There are three categories of financial capital that are important for you to know when analyzing your business or a potential investment. They each have their own benefits and characteristics. They include equity capital, debt capital, and specialty capital.
There are three categories of financial capital that are important for you to know when analyzing your business or a potential investment. They each have their own benefits and characteristics. They include equity capital, debt capital, and specialty capital.
What is Stock?
Find out what stock is and why companies issue it.
Find out what stock is and why companies issue it.
What is a Ticker Symbol?
The I.D. tag for stocks, learn what ticker symbols are and how they can help you research your investments.
The I.D. tag for stocks, learn what ticker symbols are and how they can help you research your investments.
Why Stocks Go Up and Down
The stock market is essentially a giant auction - only instead of antiques and heirlooms, it's ownership in businesses that's up for grabs. Find out why the stock market fluctuates.
The stock market is essentially a giant auction - only instead of antiques and heirlooms, it's ownership in businesses that's up for grabs. Find out why the stock market fluctuates.
What is the Dow Jones?
No matter who you are, you've heard of the Dow Jones. It's perhaps the most followed index in the world.
No matter who you are, you've heard of the Dow Jones. It's perhaps the most followed index in the world.
What is the NASDAQ?
The NASDAQ was the star of the bull market in the '90s. As a general rule of thumb, it is where most technology stocks are traded.
The NASDAQ was the star of the bull market in the '90s. As a general rule of thumb, it is where most technology stocks are traded.
What is the S&P 500?
The benchmark that all investments are measured against, the S&P has long been an important indicator on Wall Street.
The benchmark that all investments are measured against, the S&P has long been an important indicator on Wall Street.
What is a Broker?
If you are going to invest, you almost always have to have a broker. Just what do they do, and why should you pay them? Find out here.
If you are going to invest, you almost always have to have a broker. Just what do they do, and why should you pay them? Find out here.
What are Money Market Accounts?
A checking account meets a bond meets a savings account. Money markets are easy ways to save money and earn a higher rates of interest.
A checking account meets a bond meets a savings account. Money markets are easy ways to save money and earn a higher rates of interest.
What is a Dividend?
Some stocks pay dividends. This means that for every share you own, you are paid a portion of the company's earnings.
Some stocks pay dividends. This means that for every share you own, you are paid a portion of the company's earnings.
What is a Blue Chip Stock?
A few examples of blue chips are Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile. Find out why blue chips are favorable among investors.
A few examples of blue chips are Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile. Find out why blue chips are favorable among investors.
What is a Stock Split?
When a stock splits, it seems like everyone gets excited. Discover what stock splits are and their effect on a company!
When a stock splits, it seems like everyone gets excited. Discover what stock splits are and their effect on a company!
What is a Reverse Stock Split?
A reverse stock split is used to avoid delisting of a corporation's securities on a stock exchange. Following the Internet bubble, investors saw a flurry of reverse stock splits.
A reverse stock split is used to avoid delisting of a corporation's securities on a stock exchange. Following the Internet bubble, investors saw a flurry of reverse stock splits.
What are Penny Stocks?
They may be cheap, but they are high risk. Read about the appeal and risk of these low-priced stocks.
They may be cheap, but they are high risk. Read about the appeal and risk of these low-priced stocks.
What is a Certificate of Deposit?
CD's are one of the oldest and most conservative investments around. Get the low down on them.
CD's are one of the oldest and most conservative investments around. Get the low down on them.
What are Commodities?
High-Risk, High-Dollar investments, commodities are not for everyone. You can lose your shirt - or become an instant millionaire.
High-Risk, High-Dollar investments, commodities are not for everyone. You can lose your shirt - or become an instant millionaire.
Beginner's Corner
What are stocks? How do they work? What is the Dow Jones? How do bonds make money? If you need simple questions like these answered, the Beginner's Corner is the place for you! Drop in to learn all the basics.
What are stocks? How do they work? What is the Dow Jones? How do bonds make money? If you need simple questions like these answered, the Beginner's Corner is the place for you! Drop in to learn all the basics.
Do Not Despise the Day of Small Beginnings
Feel discouraged about investing small amounts? This short story about the success of Coca-Cola common stock should lift your spirits.
Feel discouraged about investing small amounts? This short story about the success of Coca-Cola common stock should lift your spirits.
What are the Summer Doldrums?
The summer doldrums is a phenomenon in the stock market where trading volume falls substantially as a result of investor psychology. Typically, the summer doldrums are a result of money managers spending more time on vacation and outdoors rather than inside reviewing financial statements and buying or selling stocks.
The summer doldrums is a phenomenon in the stock market where trading volume falls substantially as a result of investor psychology. Typically, the summer doldrums are a result of money managers spending more time on vacation and outdoors rather than inside reviewing financial statements and buying or selling stocks.