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Investing in Africa
Investing in Africa even sounds a little extreme. But investing in Africa not only sound extremely - it is like this in fact. If we would distinguish developed and emerging markets, then most of the Africa’s countr
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Investing in Russia
Investing in Russia has gotten really widely promoted for the last period. I can remember the talks that stocks in Russia are the cheapest over the world for not less than year. The fact, that those stocks are st
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How ECB Is Affecting Investment Markets?
Today was announced very interesting news. The news is about the fact that ECB (European Central Banks) lends 489 billion of Euros to the banks. It is a really huge amount of capital that flows from ECB to the fi
http://www.investingforbeginners.eu/how_ecb_is_affecting_investment_markets-p0-i18
How Oil Price Influence Investment Markets?
After Saudi and Russia decisions to increase supply oil has smashed to the unseen levels. But, what's next? Everything revolves around oil and it's inevitable that the fluctuations in the oil industry will
http://www.investingforbeginners.eu/how_oil_price_influence_investment_markets-p0-i31
Investments
(Are you looking for investment definition?) Investments are instruments that allow us to receive a higher amount of money than was spent. If someone spends 10 euros or dollars and he knows that he will receive
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Interest Coverage Ratio
Interest coverage ratio shows company’s ability to pay interests for its financial debts. Interest coverage ratio is a ratio between operating profit (EBIT to be more exact) and expenses for interests. The
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Investing
Investing - what is that exactly? Probably you have heard many different definitions of investing. However, what is the essence of it? The essence is very simple: investing - a present sacrifice for the future.If
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Investment in Bonds
Debt (fixed income) securities Bonds are fixed income securities and the principle of them is simple - the issuer of the bonds attracts the money from the investors and commits to pay back for the investors until end of
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Investment in Cash
Bank (saving) Accounts, Deposits, Deposit Certificates, Treasure Bills, Money Market funds When we are talking about investment, cash is not only the real paper (or metal) money that are held in the wallet or under the
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Investment in Mutual funds
Investment funds (Collective Investment) Investment in mutual funds is one of the most popular types of investment. A mutual fund is just a large and well diversified investment portfolio of many securities, in which ca
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Investment in Commodities
Investment in Oil, gold, Silver, Copper, Wheat Commodities (raw materials) are indeed a tangible asset class, but it can be also assigned to financial investments, because in current days most investments in commo
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Direct Investment
Investment in Tangible Assets Direct investment are very wide issue to study, but it‘s not so close to traditional investing. Direct investments are more related with business development and would depend
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Investment in Actively-Managed funds
Active Mutual (Investment) funds Actively managed investment funds usually are those mutual funds that choose not copy the index (benchmark), but is trying to beat it, so could give for investing person a higher return,
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Investment in Index funds
Investment index funds are contrast to the actively managed funds. These funds do not try to exceed the benchmark, openly saying that just going to keep with it.And the serious advantage of them – applied f
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Investment in Fund of funds
If each normal investment fund invests in underlying assets directly, the fund of funds is investing solely in other funds that invest directly in shares, bonds or other assets.If such funds distributors would ar
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Investment in ETF funds
ETF (Exchange-Traded Fund) Investment in ETFs has become increasingly popular pushing out traditional investment funds. Few main factors added to popularity of this investment: availability of ETF's and low taxes compar
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Investing in funds
Investment funds Strategy Indeed, investing in mutual funds is not complete investment strategy, but only a part of it, or more precisely, only the choice of investment instrument. For example, if the strategy d
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Investing Benefits For Beginners
Is the investment really worth it? Many investing beginners ask a question: why to invest? There can be different answers. Some might even say that is not worth to invest. Why let your money into uncertainty if yo
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Finance Management
Financial management, asset management, investment management, wealth management in fact are similar processes only called in different names. An investments definition may include both financial assets and real
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Investment Manager
Investment management or finance management are particularly a lot of attention and responsibility requiring areas. It does not matter whether you manage your money whether corporate funds, in any case, it is important t
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Online Investing
Few decades ago all the investors was acquiring stocks calling to broker by phone or using some other way to contact him. However, computerization of the world has changed investing significantly. Online investing became
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Investments in Ultra ETF
Ultra ETF by most characteristics is similar to normal ETF but there is one main difference: if Ultra ETF follows the same index as normal ETF does, it makes it twice. For example, if normal ETF follows index tha
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Investment in Normal ETF
Normal ETF (exchange-traded fund) is an ETF that is not a Short ETF/Ultra ETF. Usually ETF is a traded index fund that follows some specific index (might be various indices: equities, bonds, commodities, specific
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Investment in Short ETF
Investment in Short ETF is very different from regular investing. “Short” – means short selling transactions when securities are loaned and sold with obligation to return it after some pre-agree
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Investment in Ultra Short ETF
Investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed b
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Investment Solutions
Investment solutions are services provided by investment banks or brokerage firms. These services may include common elements of investing: securities trading trough broker, online investing, securities depositor
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Investment Industry
An investment industry is a part of whole financial industry of the world. Finance sector includes not only investment industry but also other financial services: corporate finance, public finance, insurance
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FOREX Market
FOREX market (foreign exchange market) is a global network of trading in different currencies. It is the most liquid financial market with huge turnovers continuously without breaks. Lot commercial banks, central
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Investor
An investor is an individual or corporate unit that invests in any class of investments on purpose to earn some return from invested capital. There may be more criteria to distinguish very small investments
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Reverse Stock Split
Reverse stock split is a merge of existing company’s shares increasing its face value. For several owned shares an investor gets one share depending on reverse split ratio, when total outstanding shares num
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Dividend Payout Ratio
Payout ratio is a percentage that shows a portion of company’s income distributed as dividends. Formula Dividend payout ratio = common shares dividends / net income *For the sam
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Market Capitalization
Market capitalization (market cap) is a company’s value (price) on the stock exchange. Market capitalization is calculated by multiplying the outstanding share number by the last share price on the exchange
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Stock Exchange
A stock exchange is an operator/company that takes bids from the sellers and buyers and executes transactions if conditions allow it. Usually stock exchanges offer trading not only for stocks but also for other f
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Investment Portfolio
An investment portfolio is a composition of different investments made on purpose to achieve the highest return at predetermined risk level. Investment portfolio can include all kinds of investments: stocks,
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Buying on Margin
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? Buying on margin gets popularity during every strong bull market. Unfortunately, it be
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Investment Group
An investment group is an organization, which activity is closely related with investment. Still there can be no exact definition what investment group does because they might have different juridical forms
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Capital Investment Group
Capital investment group is an organization that can have many juridical forms. Usually capital investment group is privately held or public organization, that invests in stakes of non-listed companies, real esta
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Real Estate Investment Group
Real estate investment group is mostly similar to the capital investment group. The main difference is that real estate investment group concentrates its investments on real estate property, when capital investme
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Financial Investment Group
Financial investment group usually is different from capital investment group. Regularly financial investment group includes a brokerage firm and provides standard functions: financial consultations, investment m
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Venture Capital
A venture capital is a capital provided by capital investment groups or private equity funds for small start up businesses. There are not many opportunities for young fast growing companies. If they
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Private Equity Fund
A private equity fund is a fund that invests in a stakes of non-listed companies (private equity). Investment in private equity funds is much different from investment in mutual funds. They are illiquid, riskier
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Equity Fund
An equity fund is a mutual fund that is investing in equity (stocks). Equity fund can be actively managed, index fund, listed index fund (ETF) and can invest in some specific sectors or regions, or can invest glo
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Mutual Fund
A mutual fund is a collective investment vehicle that is consisted of fund units, which are sold for retail investors. Practically, mutual fund is a large investment portfolio, in which can take a part even small
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Pension funds
Pension funds are investment funds established on purpose to generate income for retirement. They are very useful in economy when society gets older and number of population decreases, because a working class is
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Securities
Securities are financial instruments that represent rights to some assets. Securities can be listed or non-listed. Listed securities are traded on securities exchanges, which commonly are called as stock exchange
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Institutional Investment
Institutional investment is an investment that is made by an organization/institution. Usually, institutional investments are large scale and has important role in financial markets. Most institutional investment
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Institutional Investor
An institutional investor is an investor that is a corporation/institution. Institutional investors have high impact to investment markets and sometimes decisions of most known institutional investment manag
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Investment Bank
An investment bank is a financial institution that has a license of bank and specializes exclusively on investment services. In the USA investment banking services was separated from other banking activity u
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Brokerage Company
A Brokerage Company is a financial institution that has a license to provide intermediary services for a securities trading to the clients. Every retail client cannot by securities on stock exchange by himself be
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Financial Intermediary
A financial intermediary is a financial institution that works in a financial market connecting money owners (savers) and credit seekers (borrowers). Of course, financial intermediaries are active not only i
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Investment Management Company
An investment Management Company or Asset Management Company is a firm that has a license and provides investment management services. Such management company can manage private investment portfolios, invest
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Insurance Company
An insurance company may provide insurance services of two different directions: life insurance and non-life insurance. Non-life insurance is not very closely related (if to mention own insurance company’s
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Life Insurance
A life insurance is a service provided by insurance companies trying to bring more financial stability in to the lives of people. Looking from investment point life insurance is two products c
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Money Market
A money market is the market, in which money market investments are traded. Such money market investments can be deposits certificates, bills or other short term high grade fixed income securities.
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Preemptive Right
A preemptive right is a right of company’s shareholders to acquire more shares in case of new share issue proportionally. Usually such right is described in shareholder’s agreement. Such righ
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Financial Leverage
A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
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Direct Investments in Stocks
Direct investments in stocks are investments made without financial intermediaries (only theoretically). It means an investor buys stock directly from the company without intermediation of stock exchange or broke
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Investment Management Fees
Investment management fees (fees that are paid straight to investment manager) basically are one of these types: Performance based fee. Performance based fee is calculated according to increase of inve
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Total Expense Ratio
‘Total expense ratio shows all expenses of investment fund. It is a good measure that shows you how much of different fees you are really paying when investing in some fund. Total expense ratio is a percent
http://www.investingforbeginners.eu/total_expense_ratio
INVESTMENT MANAGEMENT HOW TO MANAGE YOURS INVESTMENTS PROPERLY
Investment management is a complete science and if you are expecting to become a professional investment manager in few hours you should get disappointed. However, there are several most important guidelines at i
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Quantitative Investment Management
Quantitative investment management says, “Don’t worry about investment management, and let to do the job for the computer”. It is a completely different approach compared to ‘value d
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Sharpe Ratio
Sharpe ratio measures the above risk free performance of investment portfolio in relation to its risk. This ratio was developed by William F. Sharpe which introduced the ratio in 1966. Now Sharpe ratio is the mos
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Repo
Repo (repurchase agreement) is a contract between the investor, who borrows money, and the lender who lends money and takes (buys and resells) securities for collateral, in case if the investor will default to re
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Margin Trading
Margin trading is trading in securities when part of the investment portfolio is financed by borrowed money (the other part by your own capital). For example, you have investment portfolio of value $20k, end you
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P/B Ratio
P/B (P/Bv or price-to-book) ratio shows how expensive stock is compared to its books value. Company’s book value (also called equity, capital, shareholders funds etc.) is equal to company’s total assets les
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P/NAV Ratio
Price to Net Asset Value P/NAV ratio shows how expensive share is compared to its NAV (net asset value). This ratio is very similar to P/B ratio but in this case market values (not book values) are used. M
http://www.investingforbeginners.eu/p_nav_ratio
Stock Valuation
Stock valuation is very important part of investing in stocks, and this part is the most time consuming and knowledge requiring. Stock valuation is a necessary and main step at stock picking process. The only way
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Relative Valuation
Comparative analysis Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi
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Hedge funds
Hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu
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Free Float
Free float is a proportion of company’s shares that are really traded in the market. Normally, free float is lower than the total outstanding number of shares, because most of the largest shareholders do no
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EBITDA Coverage Ratio
EBITDA coverage ratio (also called EBITDA to Interest Coverage Ratio) shows company’s capability to deal with its financial leverage. If this ratio is too low, that may show company is in trouble and may ha
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Margin Call
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? Margin call is a fabulous term which carries some mysticism. However, there is nothing
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Margin Calls
Margin call is a call by margin trading service provider to an investor who is buying on margin. Such calls are provided when assets (collateral) in the investment portfolio are losing value and reach the margin. Margin
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Financial Investment
Financial investment is any financial asset that should provide a return for investor. Financial asset is an asset that doesn’t have tangible form and has some financial obligations to its owner. All securi
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Greenmail
A greenmail is one of the strategies used to avoid hostile takeover. Greenmail is used when significant stake of an acquisition target is held by hostile company which tries to overtake the control of company tar
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Bullish
Bullish is an investor's attitude when he believes that the investment market is going to rise in the near future. Most of the times this term is applied for investments in stocks, when is believed that stock mar
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Investment Products
Investment products basically are investments that are packed and adopted for every investor. The best example of investment product could be mutual funds or any other investment funds that are well diversified a
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Growth funds
Growth funds are investment (mutual) funds that concentrate on investing in stocks of fast growing companies. Growth funds can be passively managed or actively-managed funds but all growth funds are riskier than
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No-Load Fund
No-Load fund is a fund that does not have a load fee which is paid by investor that acquires the mutual fund. There are two types of load fees: front-end load and back-end load, and ‘no-load fund’ sho
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Performance Based Compensation
Performance based compensation is a form of compensation for the investment management work depending on quality of results. Performance base compensation is very common in investment management industry and help
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Fund Manager
A fund manager is an employee of investment management company which is responsible for the management of the fund’s assets. Most of the times, more than one person is involved in fund’s management bu
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Balanced Fund
A balanced fund is a mutual (investment) fund that invests in different asset classes: stocks, bonds and money market investments according to the fund’s investment strategy. It may
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Portfolio Manager
A portfolio manager is an investment professional that takes over the management of an investment portfolio. There are many types of managed investment portfolios: mutual funds, pension funds, insurance funds, po
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Financial Assets
There are two main investment (asset) classes: financial assets and non-financial (tangible) assets. Both of them may have similar characteristics as yielding or increasing in value over long period; but financia
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High Return Investments
High-return investments (or high-yield investments) are investments that can provide the higher return than average investments, and of course such investments are riskier. The reality is that people have differe
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Stock Trader
A stock trader is a speculator that is trying to make profits from quick changes in value of stocks or other securities that he trades. Stock trader have few differences from normal investor and the main differen
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Investment Services
Investment services is a spectrum of financial services provided by investment banks, brokerage houses, investment management companies and other financial intermediaries that work in investment finance segment.
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Passive Investment
Passive investment (management) is an investment style when investors skips the steps of securities picking and market timing and invests mainly in index funds that have the lowest expenses. P
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Money Investing
Money investing is a hard task for beginners at investing. However, it is not a rocket science and can be learned by anyone who is really attracted to finances and have enough of time for it. Money is equal to ca
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Liquidity
(1) Market liquidity is a characteristic of a security or other traded investment that shows how easy it is convertible in to cash at a market value. Usually when investor decides to sell some investment and
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Investment Fund Management
Investment fund management is not much different from simply investment management or asset management. Investment fund is large investment portfolio and the composition of that portfolio depends on particular fu
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Investment Management Salaries
The media always pay a lot of attention to investment management salaries and maybe those salaries are worth it. Investment management business as investment management consulting or investment fund management re
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Investment Management Business
Investment management business is a large part of a financial industry and is very important for investment banks and other investment companies because investment management business has quite good profitability
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Equity Investors
Equity investors are investors that are investing in equity investments: listed stocks or similar ownership securities, stock funds, unlisted stock stakes or other half-equity strategies (equity loan, mezzanine f
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Business Investor
A business investor can indicate several types of investors. (1) Business investor may be an investor that is a firm and invests in different investments, or (2) investments that are made by any investor in to co
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Turnover Ratio
(1) Turnover ratio of mutual fund shows how quickly assets of the fund are changing. Actively managed investment funds have higher turnover ratio than passively managed funds, and normally turnover ratio is measu
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Working Capital Management
Why Working Capital Is Important? Working capital is one of the main parts of company’s finances and every manager, even of the small company, manages working capital despite the fact he knows about that o
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Investments in Small Cap Stocks
Investments in Small Cap Stocks Investments in small cap stocks could be compared to penny stock investments but the term ‘penny stocks’ is not specific enough. The thing is that the determination of
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Stocks and Commodities
You may ask how stocks and commodities related are. And the answer is simple: everything is related and especially in financial markets. Normally, if some of the main asset class (as stocks) looses or gains
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Cash Investments
Cash investments are the safest investments over short-term period. Such investments include saving accounts, certificates of deposit, money market instruments (treasury bills, money market funds). The main crite
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Cash Ratio
Cash ratio is a financial ratio that measures company’s financial liquidity over short term. It compares company’s cash reserves to short-term liabilities. If ‘cash ratio’ is high, it may
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CAGR Formula
CAGR formula is used to calculate 'compound annual growth rate': CAGR = (Value at the end / Value at the beginning) ^ (1 / Years) - 1 * Can be multiplied by 100%. Where: Value at t
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Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.
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Back-End Load
Back-End Load (redemption fee) is a load fee which is similar to ‘front-end load’ but is paid when investor sells his mutual fund units instead of during the acquisition as in case of ‘front-end
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Front-End Load
Front-end load (sales fee) was a very popular load fee in investment market for decades. This fee is paid by investors during the acquisition of mutual fund units and is some percentage (0%-5%) on the invested am
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Load Fee
'Load fee' is a fee that is paid during the selling process of the mutual fund. The sales load fee is also called as sales fee or distribution fee because normally it is paid by investor during sales-distribution
http://www.investingforbeginners.eu/load_fee
