Short selling is something you will hear mentioned a lot if you like to watch any of the business TV channels or read any business-orientated magazine. Some people do get a bit confused by the idea of short selling, but it is not actually that difficult to understand.
In any economy, one thing is certain: the beginner investor is alive and well. In boom economies, this investor is filled with rampant enthusiasm and a desire to strike while the market is “hot” in order to get the maximum value possible. In recessionary economies, the beginner investor is still filled with rampant enthusiasm, albeit from a much different perspective. They are looking to come into the market while it’s down and make out like thieves in the night when it rises again. Perfect prediction is outside the capability of any human-created system, but the system of technical analysis allows us to come pretty close.
John Maynard Keynes called gold “the barbarous relic”. Now, long after Keynes’ school of economics became unfashionable, gold is once again in fashion, hitting an all time dollar record even when other metals and commodities have dived in price as a result of poor industrial demand. So what is driving the gold price?
Examine the table below. The first two columns in the listing provide the highest and lowest prices at which the stock has traded in the last 52 weeks. The next two columns give the name of the stock and its symbol. The next figure is the dividend payout. The 4.84 means that the firm paid shareholders an annualized cash dividend in the last quarter of $4.84 per share (i.e., the actual quarterly dividend was $1.21). Read the rest of this entry »
One is said to hedge a risk when the action taken to reduce one’s exposure to a loss also causes one to give up of the possibility of a gain. For example, farmers who sell their future crops before the harvest at a fixed price to eliminate the risk of a low price at harvest time also give up the possibility of profiting from high prices at harvest time. So, they are hedging their exposure to the price risk of their crops.
There is a fundamental difference between insuring and hedging. When you hedge, you eliminate the risk of loss by giving up the potential for gain. When you insure, you pay a premium to eliminate the risk of loss and retain the potential for gain.
Junk bonds, also known as high-yield bonds, are nothing more than speculative-grade (low-rated or unrated) bonds. Before 1977, almost all junk bonds were "fallen angels, " that is, bonds issued by firms that originally had investment-grade ratings but that had since been downgraded. In 1977, however, firms began to issue "original-issue junk."
Most mutual funds have an underwriter that has exclusive rights to distribute shares to investors. Mutual funds are generally marketed to the public either directly by the fund underwriter or indirectly through brokers acting on behalf of the underwriter. Direct marketed funds are sold through the mail, various offices of the fund, over the phone, and, increasingly, over the Internet. Investors contact the fund directly to purchase shares. For example, if you look at the financial pages of your local newspaper, you will see several advertisements for funds, along with toll-free phone numbers that you can call to receive a fund’s prospectus and an application to open an account with the fund.
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