Financial Independence Retire Early (FIRE): Definition, Pros & Cons
The Financial Independence Retire Early (FIRE) movement has caught the attention of millions worldwide. It is based on the idea of retiring before the traditional 65-year benchmark, by aggressive saving and investing. QUOTE Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back […]
Investing vs Trading: Differences, Similarities, Types, Pros & Cons
Trading and investing are two distinct spheres within the realm of managing and growing your money, assets and wealth. A trader often has different goals and aspirations compared to an investor, and has an alternative market perspective. QUOTE I don’t think you can get to be a really good investor over a broad range without […]
Alpha vs. Beta in Investing Performance: Definition, Examples, Pros & Cons
Understanding the difference between alpha and beta gives you a new way to understand the true source of investing results, be it the specific selections you have made or the broader market. Big ideas QUOTE “The stock market is filled with individuals who know the price of everything, but the value of nothing.” Benjamin Graham […]
What is break-even analysis?
Break-even analysis is used to find the break-even point (BEP); the point a business needs to reach before it starts to make a profit from what it does. Breaking even is the tipping point between a business making or losing money, which makes break-even analysis ultra-important for any investor. FORMULA BEP = (Fixed Costs/Price Per […]
Top investing mistakes to avoid
Top investors not only make good choices but also avoid poor choices. Mistakes can happen when investing, but the difference is that good investors learn from and avoid repeating them. As human beings, it seems there are some investing mistakes we are all destined to make. If possible, the best way is to learn from […]
Extended-hours trading
Have you ever wondered how certain traders are active before and after traditional stock market hours? This is an introduction to extended-hours trading (EHT). Trading in the financial markets doesn’t strictly adhere to the conventional hours of major exchanges, such as the New York Stock Exchange or NASDAQ. There exists an often overlooked aspect of […]
Buy-Side vs Sell-Side Analysts
Buy-side and sell-side analysts are interrelated roles that help people and institutions make informed investment decisions. While there is a large overlapping skillset, they occupy separate positions within the broader financial industry. QUOTE I believe in analysis and not forecasting. – Nicolas Darvas (Hungarian investor and author) Big ideas Buy-side vs sell-side analysts: What’s the […]
What is dollar cost averaging?
Dollar cost averaging is a proven way to take advantage of long-term investment opportunities while removing tough decisions about timing buy and sell orders. Focusing your efforts on investing consistently over time yields better results than trying to time your investments perfectly. QUOTE “If you like spending six to eight hours per week working on […]
Should investors worry about inflation?
Inflation devalues the money you earn from investing, so it should be given some special consideration – but there is no need to worry! There are actions that you can take. Big ideas Why is inflation bad for investors? John Maynard Keynes, the legendary economist, described some inflation as a good thing. Keynes argued it […]
Market Risk Premium: Definition, Calculation, Use, and Examples
When it comes to investing, understanding the balance between risk and reward is essential. A central academic concept in this area is the market risk premium, one of the core principles used in the Capital Asset Pricing Model (CAPM). QUOTE Successful investing is about managing risk, not avoiding it. – Ben Bernanke (American economist) Big […]