In Short Within every market transaction there are buyers (demanders) and sellers (suppliers). Also, there are bystanders who are affected by the transaction that are not part of it. The effects on these bystanders are externalities. The costs and benefits … Continue reading
In Short Elasticity is how behavior in a market changes in response to a change in price. A demand curve can be described as elastic or inelastic. A supply curve can be described as elastic or inelastic. See post on … Continue reading
Last month, I wrote about how the Dow was down and almost every portfolio was up. I made the point that the Dow Jones Industrial Average is not the market. It is quick and easy sample to look at and … Continue reading
Introduction Previously I talked about supply and demand. In short, supply is how much of a good is being offered on the market. Demand is how many people want to buy that good. Equilibrium will tell you in a market … Continue reading
In Short A bubble is when the price of an asset rises far above any measure of its intrinsic value. People think prices will go up forever and buy (paying any price) because they think it will be able to … Continue reading
In Short In addition to objective measures of risks as I mentioned earlier, there is also an emotional side to risk, which is how much fluctuation a person can mentally handle within their portfolio. My Sensitivity Analysis Whenever I meet … Continue reading
What is Economics? Economics is the study of the interaction between people within a market context. For example: Person A sells chairs, how do they maximize their profit? What is the Market? A market in the context of economics refers … Continue reading
In Short It’s the most important rule in economics. Basically the more there is of a particular item, the less valuable each individual item is. The less there is, the more valuable each item. Example of Supply and Demand Imagine … Continue reading
In Short The stock market is a place where people can buy ownership in various companies around the world. It’s a marketplace. The same way someone would go to the supermarket to buy an apple, a person goes to the … Continue reading
In Short Real estate is an asset class with its own unique curve. It has advantages and disadvantages when compared to stocks. It should be a part of every portfolio. What is Real Estate? Real Estate is land and the … Continue reading