General Definition A derivative is any contract that concerns the buying and selling of securities or commodities at a future date. For example: you’re a restaurant owner and you meet a great apple supplier. You currently have plenty of apples … Continue reading
Short Answer As an investment strategy, day trading is theoretically junk. Random Walk Theory Stock movements for short periods of time are completely random. The drunk staggering left and right from a light pole. There is no pattern. The “random walk theory” has … Continue reading
What is Fundamental Analysis? Fundamental Analysis is a way that people attempt to find how much a company is worth. They then try to buy the stock when the market price is below the actual value of the company. They … Continue reading
Short Answer: No, that is not a valid reason to leave the stock market. Market Timing is Impossible: You know the stock market has declined, you don’t know what it will do next. You do not know when there will be a massive correction. It may … Continue reading
What is a Stock Market Crash? The stock market declines or advances on a regular basis. Some of these swings back and forth are large. A market crash refers to major decline in stock prices. It happens every few years. The market … Continue reading
It is true that stocks have a higher expected rate of return over long periods. It is not true for each period. Stocks will sometimes do better and sometimes worse than bonds. The fluctuation is risk. If bonds are steady … Continue reading
Predicting future stock prices is theoretically impossible. The market is essentially efficient, meaning that all publicly available information is almost instantly reflected in the stock price. Anything you read or study about the company can not be used to predict. … Continue reading
The wealthy have invested their resources for thousands of years, likely since before history was recorded. There are references to investment management in biblical sources. The Talmud has a portfolio allocation (1/3 cash, 1/3 real estate, 1/3 business). Some of … Continue reading
In case you missed my newsletter I would like to define a mutual fund again. If you like you can see my other definition posts on stocks and bonds. A Mutual Fund is a legal entity where the manager collects money … Continue reading
Advice #1: Be skeptical of people that make you big promises. I’m not saying that extraordinary claims can’t be true but there is a lot of dishonesty in the financial industry. Be a prudent shopper. Advice #2: Always be aware … Continue reading