The climate change topic seems to be heated these days, eco-friendly goods and services grow in demand and more people interested in renewable energy. So, let’s look at the opportunities this new green world has to offer to investors. We gathered green public companies in various industries (energy, automotive industry, food and farming) that you can consider to add to your portfolio to jump on the green trend and make some money off it.
Assets, liabilities, and equity are three core accounting concepts. It’s impossible to evaluate a company properly without a thorough knowledge of them. The word “equity” has many meanings but, in this article, we focus on equity in the general accounting sense, although we briefly cover other kinds of equity too.
Assets, liabilities and equity are three basic building blocks that form the balance sheet equation and any investor should have a deep understanding of what they mean. In this article, we’ll explain what liabilities are and we’ll also provide a real example using a balance sheet of a public company.
The main purpose of any investment is to generate more money than the amount invested, the time it takes to do so is called the payback period (PBP) in capital budgeting. Payback period is wildly used by investors and entrepreneurs when they consider to open a new enterprise, invest in an existing business, or when they try to pick the best opportunity among two or more possible options.
For many years, the majority of economists based their financial theories on a few basic assumptions: all market participants are perfectly rational (investors aren’t emotional at all), and they are also free from any biases or information processing errors. The real-life and practical economy showed that these assumptions don’t work in many cases and people tend to behave irrationally from time to time.
Alpha (α) and beta (β) are two crucial coefficients that are used for measurement of success of a particular portfolio. Beta represents the volatility of a particular asset (or the whole portfolio) versus the volatility of the benchmark. In this article, we’ll explain what beta is and give a few simple examples to demonstrate how it can be used.
There are two main types of stocks on the public market: common and preferred. Why do we need to have two distinct types of shares and what’s the difference between them? In this article, we’ll take a look at these two types of stocks (shares) to figure out which one would be a better choice for an investor.
Candlestick price chart in trading and technical analysis is a very common way to visualize price movements. It’s relatively easy to understand, it’s informative and this type of chart can give some additional helpful hints to a trader that a simple chart can’t provide.
Alpha (α) coefficient in investing is used for measurement of the success of a particular portfolio. Along with beta, the alpha coefficient helps portfolio managers to determine how certain picked assets performed against the market average. In this article, we’ll explain how to use alpha and why is it important for investors.
It’s usually justified to be skeptical about financial forecasting, yet most portfolio managers have certain expectations regarding the future rate of return on the investments they make. How does one figure out an expected return of a financial portfolio? In this article, we’ll explain a method that is commonly used to calculate the expected return.
Stock market technical analysis has many tools, techniques, and indicators that are used for price forecasting but one of them is particularly important: the concept of support and resistance levels. In this article we’ll explain how are those support and resistance levels supposed to work and how can you find them and why are they important.
It’s believed that investing is something that only the rich and old people should be interested in but an early start can bring many financial benefits. We’ll explain why you should start investing early and what benefits it can bring when you get older.
Traders use many strategies to minimize their risks and maximize their returns, but one of them is particularly common and useful: it’s the 1% risk rule. In this article, we’ll break down this simple yet effective risk management strategy and show how a portfolio manager can use it in his daily financial operations.
Today we are starting a new category on our website - stock forecasts. We’ll share an opinion on stocks' future prices, analyze them from technical and fundamental points of view, and give our recommendation on whether we would consider buying, holding or selling a particular market security.
When you open your first bank account an adviser would often propose you to get checking (otherwise known as current) and savings accounts. The first one, without any interest for your day-to-day transactions and the second one with a very small interest.
You can open almost any old book on wealth management, investing or smart capital allocation and you would find the same idea that seems to be extremely popular at all times: investing in real estate is a great option. Most of those books were written a while ago, has the situation regarding investing in real estate changed in these days?
Liquidity is a core concept in finance, capital management, and business and that’s why this term is often used in media by portfolio managers, market analysts, and various economists. Although this term is very popular, it’s not that easy for an outsider to understand what it means.
ETFs are relatively new financial instruments that were introduced in 1993 in the US and in 1999 in Europe. These financial tools create new opportunities for investors and they have become very popular nowadays. Today we’ll explore the essence of ETFs as well as why they are beneficial for investors.
When it comes to measuring dividend return of a particular stock, it’s important to understand what dividend yield is. It’s a rather simple concept but it may confuse some people because they’re expecting to see an absolute number, instead, they usually see some weird “yield” thing in the form of a fraction.
Market capitalization refers to the valuation of a certain company derived from the market value of its shares. It’s a simple, yet important metric in financial analysis that many investors look at regularly. Market capitalization in finance is often shortened to market cap.
There are plenty of useful market indicators which attract the attention of many investors and one of the most popular indicators is price to earnings (P/E) ratio. It shows the relation between the current market price of a security and its earnings per share (EPS).
A dividend is a payment given to the company’s shareholders on a regular basis. Generally speaking, this term means: ‘an additional outcome’ and it can also be used outside of finance and investing. If a farmer buys a cow, the milk it produces can be called a dividend and a growth in the cow’s weight can be called a capital gain, which at some point can be “cashed out”.
Time horizon measures an expected holding length of your investments and this term is often mentioned in relation to an investment strategy, meaning that a particular strategy (approach) can prefer a certain holding length. Some strategies, such as “buy and hold”, have a long time horizon, contrary to the day trading strategies which have an extremely short time horizon and, of course, there are many strategies in between.
Volatility of a security or an index means the magnitude of changes in its value (price) over time. In more scientific terms, it can be called ‘dispersion’. High volatility usually indicates higher potential returns because investors can make more money with each deal but, at the same time, it implies higher risks because the direction of future price changes is unknown.
A lot of people have a misconception about the amount of capital required to start investing and they think that only the rich people can be investors and traders. Actually you can create a new real investment portfolio with a relatively small sum of money.
There are a lot of ‘animal’ slang words in finance and there are many reasons for that. One of those reasons is that investors are animals too and sometimes they behave in the irrational, herd-ish ways. Today we’ll take a look at two of the most famous ‘animal’ terms in finance: a bull and a bear market.
Investing seems like an inherently risky affair for many people but it’s not true at all, you can actually choose what level of risk you’re comfortable with. Why would you choose a higher risk? There can be only one good reason: it should give you a higher return on investment.
Diversification has been an extremely popular term in finance and investing for many years. Almost any article, video or a book about personal finance or investing mentions diversification at some point. Why the idea of allocating your capital in various assets is that popular?
In general, a portfolio is just an organized collection of data created to serve a certain purpose. This beautiful word appeared in the English language in the 18th century and it was an adaptation of a much older Italian word ‘portafoglio’ (porto folio, port folio) which means ‘to carry’ something.
There is nothing wrong with managing your financial portfolio on your own (non-discretionary portfolio), although, in some cases, it may be preferable to find a qualified professional and let him manage your money. Those professionals are called portfolio managers. A portfolio manager is someone who fully controls a portfolio and makes all of the necessary investment decisions on behalf of the portfolio’s owner.