In Short When someone buys or sells stocks, mutual funds, ETFs, etc. they have the choice to use multiple types of orders. Market Order The order is done immediately at the current security price. Market orders have to pay the … Continue reading
Category Archives: Definitions
In Short When a currency becomes less valuable relative to another currency. Explanation The value of all currencies (US Dollar, Euro, Pound, etc.) are defined relative to each other. For example: right now one US dollar is worth about .762 … Continue reading
Definition When you buy a security there is time between when you buy the security and when you pay for that security. The date you buy is the buy date. The date you pay the money is the settlement date. … Continue reading
In Short An ETF (Exchange Traded Fund) is a basket of securities that attempts to duplicate the performance of a multiple of an index. See here for the definition of a stock index. There are also commodity indexes. Their Benefit … Continue reading
Defining Standard Deviation Standard deviation refers to the fluctuation in the value of your portfolio. The ups and downs of a portfolio can be thought of as a roller coaster. How scary is the roller coaster? A roller coaster that is … Continue reading
In Short As a portfolio gets larger, the growth occurs on an expanding base, which means the amount of growth you experience each year is increasing. Compounding means you are earning money on your past earnings. For Example Say you … Continue reading
Overview All companies on the stock market are required to provide information on their company to the public. They are required to provide financial statements (income statement, balance sheet, statement of cash flows). See previous post for information on those … Continue reading
Quick Definition Over time things gets more expensive. A dollar today can buy less stuff than a dollar 30 years ago, and it can buy more stuff than a dollar 30 years from now. Inflation means the purchasing power of … Continue reading
Definition Opportunity Cost is the value of the best alternative choice that you decide to forego. Example 1 You are trying to decide whether or not to wake up early tomorrow to go for a run or to sleep in. … Continue reading
What are Taxes? Think of the government as a giant company. By living in the country, we are in essence agreeing to buy all of the goods and services that the company (the government) provides. The taxes are the payment. … Continue reading