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Investing in Gold (II)
The upper limit of the price is even more difficult. In our times gold is not founded in streams as was shown in the movies. Now gold is mined from the deep earth and separated from gold dust, metal ore or rock. In natur
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Investing in Uncertain Period
Investing always has some uncertainty, but there are some situations when rise even more questions than usually. The current situation is just like one of those uncertain periods. When the economic cycle so inconclusive,
http://www.investingforbeginners.eu/investing_in_uncertain_period-p0-i7
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
http://www.investingforbeginners.eu/investing_in_africa-p0-i8
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
http://www.investingforbeginners.eu/investing_in_russia-p0-i9
Investment in Bulgaria
Starting from the very beginning I will try to make clear why I am bullish about investing Bulgarian stock market. At first I would suggest to look at the chart below. Five year Bulgarian stock market in
http://www.investingforbeginners.eu/investment_in_bulgaria-p0-i10
What to Do With Investments in Current Turbulence?
The question is really not an easy one. The problem is that there is no left any good investments on this world. Let’s looks at the most topical investments classes: stocks. Even before
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Investing in Land - Agricultural REITs
Investing in land I have noticed an increased interest in agricultural land investments during the last period. And I can it understand completely. When stocks are so volatile and bonds may offer such low return
http://www.investingforbeginners.eu/investing_in_land_agricultural_reits-p0-i12
stocks Riskier than Bonds?
It is so common that stocks are riskier investments than bonds; nobody is even considering this question. Would I doubt it? Of course not, stocks are stocks and bonds are bonds. But I would like to look at it fro
http://www.investingforbeginners.eu/stocks_riskier_than_bonds-p0-i15
Foundation of the Europes Financial Market
The key question in Europe now is how European Union will look after few years from now. This question is the most important at these days for all the Europe and may have affect to the entire world.
http://www.investingforbeginners.eu/foundation_of_the_europes_financial_market-p0-i16
Bond Investment: Government Bonds and Corporate Bonds
Corporate Bonds and Government Bonds Today I want to discuss another untraditional topic. However, this topic concerns the most traditional investments – bonds. Bonds been used for very long time a
http://www.investingforbeginners.eu/bond_investment_government_bonds_and_corporate_bonds-p0-i17
How to Beat the Stock Market
Investing is good, but the real challenge for every portfolio manager is to beat the stock market, or beat the market. Of course the term ‘market’ is not very exact. In reality to beat the market is t
http://www.investingforbeginners.eu/how_to_beat_the_stock_market-p0-i20
Baltic Investment
Baltic Stock Exchange Baltic stock exchange now belongs to the world gigantic stock exchange NASDAQ OMX, and now is called NASDAQ OMX Baltic. Historically Lithuania, Latvia and Estonia had their own nati
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European Dividend stocks
Before getting to the exact stocks, at first, please let me explain why I have chosen European dividend stocks as a topic. For the beginning, lets solve the question why dividend stocks. The true is that many inv
http://www.investingforbeginners.eu/european_dividend_stocks-p0-i22
What means long term in investing?
When I talk to non-professional investors, I often get surprised on their interpretation of ‘long-term investment’. Of course, everyone wants to enjoy their lives and to do it fast, while not many are ready t
http://www.investingforbeginners.eu/what_means_long_term_in_investing-p0-i23
Is the Bubble of Commodities Going Down?
It can be said that commodity bubble already went down. The prices of the most commodities have slumped significantly during several last months. But was there really a bubble? Yes, the prices have
http://www.investingforbeginners.eu/is_the_bubble_of_commodities_going_down-p0-i24
Investment psychology gains momentum in contemporary business world
Many individuals make rational investment decisions, but others are swayed by their emotions, serving as clear-cut illustration of just how the mindset and behavior can affect finances, and this is an important a
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Learning the basic investment concept: a good start in investing
The first step in investing is learning the investment concept itself. It is very important that you understand the basic rules in investing in order for your investment to profit and to prevent losses. As we all know,
http://www.investingforbeginners.eu/learning_the_basic_investment_concept_a_good_start_in_investing-p0-i28
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
How Investment Horizon Affects Your Investment Portfolio?
All investors have an investment horizon, which is the amount of time that they're willing to keep their money on the market. In layman's terms, it measures how long one is willing to wait before selling one's securiti
http://www.investingforbeginners.eu/how_investment_horizon_affects_your_investment_portfolio-p0-i32
BRIC Countries
BRIC countries are the largest emerging economies over the world. The first letters of every country make a name of B R I C and those countries are: Brazil (population - 192m) Russia (population - 143m) Indi
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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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Commodities
Commodities are goods or products that are traded in exchanges. Usually not all the goods that are produced are traded in exchange, only those which can be standardized enough to trade them at the identical price
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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 stocks
stocks (shares) are investments that attract the most attention in financial markets, and perhaps stocks are worth it, because investors can expect the highest return from stocks among the range of traditional investme
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Investing for Retirement
Investing for retirement may be one of the most reasonable investment objectives. Sometimes, people invest so they can afford expensive things that they otherwise could not afford without investing. For example
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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 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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Asset Management
Definition Asset management which also is called as investment management has many similarities to finance management but investment management is more specific and narrow area of finance. Invest
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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 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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Strategy Investment
Strategy investment refers to an investment strategy, which should be wise chosen according to investing person character and market environment. Investing always has to be strategic and foresee possible future e
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Investment Strategy in Growth stocks
Investing in the rapidly growing companies has always attracted the attention of all worlds’ investors, in particular, at the market rise. The reason why investing in growth stocks - so popular is very simp
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Value Investing
Investment strategy - Value Investing Investing in value stocks is fundamentally different from investing in the growth companies. stocks of growth company will rise up impressively during bull market when value
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Investing in Unprofitable Companies
Investment Strategy - Unprofitable Companies Investing in companies that are still unprofitable is more difficult than investing in profitable companies, but may also be very successful. If the company will turn around
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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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Investment Strategy by Age
It is very popular to allocate asset classes in investment portfolio according to investor’s age. And it has some reasonable justification: when investor’s age is changing – his risk tolerance a
http://www.investingforbeginners.eu/investment_strategy_by_age
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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Investment Securities
Investment securities may have different understandings as a term, but most commonly investment securities are securities held on investment purpose to get a return from invested capital over mid-long term.
http://www.investingforbeginners.eu/investment_securities
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 Adviser
Investment advisor/adviser does the same jog as investment consultant does. But investment advisor is a term used by the Securities and Exchange Commission (SEC). So usually investment advisor refers to a company
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Investment Techniques
Investment techniques are some combination of investment strategies and investment tactics. Investment techniques usually are middle term oriented procedures that help to reach some predetermined result. It may i
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Stock Market
A stock market represents all the stocks (shares) that are issued and traded or just held. Stock market (equity market) is a part of a whole financial market but more extensive term than Stock Exchange. Stock Exc
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Bull Market
A bull market is a market trend when investment market is increasing over longer period and is believed to increase in the future. Bull market is a well known term among investors and is opposite to bear mar
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Bear Market
A bear market is a market trend when investment market is decreasing over longer period and is believed to decrease in the future. Bear market is a well known term in the investment world and is opposite to bull
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Share
A share is a unit of firm’s ownership, which represents the rights and obligations of the shareholder (owner of the shares). If investor owns all shares of the company he is a complete owner, but if he
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Shareholder
A shareholder (stockholder) is a individual or company that owns some shares of stock in a corporation. Technically, every investor who is investing in shares is a shareholder for as long as he holds those s
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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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Share Investor
A share investor is an investor who invests in shares (stocks) but not the other investments. If investor invests in different asset classes he is a regular investor. If investor is specializing in shares he must
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Common Shares (Stock)
Common stocks (shares) are ordinary shares - securities that represent a proportional ownership of the firm including all the material (like dividends) and non-material (voting) rights. Common shares are the trad
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Preferred Stock (Preferred Shares)
A preferred stock or preferred shares are other type of shares than common shares. They are called preferred only because of priority over common shares in case of a firm’s termination.
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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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Stockholder Wealth Maximization
Stockholder wealth maximization is a main goal for firm’s managers in corporate finance. Stockholder wealth maximization is above the profit maximization because of long term orientation and better risk man
http://www.investingforbeginners.eu/stockholder_wealth_maximization
Dividends
Dividends are capital payments from companies to theirs shareholders. Normally dividends are paid by cash and usually but necessary once a year. Every company’s common share of the same class gets equal div
http://www.investingforbeginners.eu/dividends
Dividend Yield
A dividend yield is a ratio that shows how much investor gets dividends from the stock compared to its price. It is calculated dividing dividend per share by the share price. Dividend yield is impo
http://www.investingforbeginners.eu/dividend_yield
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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Dividend stocks
Dividend stocks are called stocks that have high dividend yield and high dividend payout ratio. Normal dividend stocks should have stable 6%-10% dividend yield and possible 60-100% dividend payout ratio. High div
http://www.investingforbeginners.eu/dividend_stocks
Stock Buyback
A stock buyback (share repurchase) is a company’s purchase of its own stock on the market. It is contrary way to pay out capital for shareholders to dividends. Stock buybacks are getting more and more
http://www.investingforbeginners.eu/stock_buyback
Initial Public Offering (IPO)
An initial public offering (IPO) is a first introduce of company’s shares to the stock market. However, during initial public offering shares are sold not on the stock exchange but on network of clients by
http://www.investingforbeginners.eu/initial_public_offering_ipo
Greenshoe
A greenshoe is an option to sell or buy shares during initial public offering IPO. This option is agreed between the company that goes public and the IPO organizer (some corporate finance firm). The
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Flipping
Flipping is partly an investment strategy, partly a speculation when investor resells acquired property quickly on purpose to get fast profit. Flipping is most common in IPO’s when retail inv
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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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Market Timing
Market timing is investor's actions when investments are switched between asset classes and may be a part of investment strategy. For example, if investor sees that stocks are very high and economical downturn is
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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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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
http://www.investingforbeginners.eu/equity_fund
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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Derivatives
Derivatives are securities (financial instruments) that are created by financial intermediaries synthetically, and are based on price or value of some primer assets or indicator. Usually such underlying assets ar
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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 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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Retail Investor
A retail investor is a small investor, which normally is an individual. Most of the investors in financial markets are retail investors, but retail investor makes an investments in much smaller amounts than
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Large Cap stocks
Large cap stocks are stocks of those companies that have the highest market capitalization. All the stocks can be classified to large cap, mid cap and small cap (if ignoring modern classifications that include mo
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Small Cap stocks
Small cap stocks are stocks of lower market capitalization. All stocks may be classified to large cap, mid cap and small cap (if ignoring mega, nano and other modern classification caps). There is no united class
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Blue Chip stocks
Blue chip stocks are stocks of the biggest large cap companies. Blue chip stocks usually are safer than average investment in stocks, have stable cash flow and pay stable dividends according dividend policy. Blue
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Investment Report
An investment report is a for investors prepared document on purpose to provide useful and objective information that would help to make an investment decision. Investment report may have many for
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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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Capital Markets
Capital markets are the markets, in which stocks and medium to long term bonds are traded. Could be said that capital markets include stock markets and bond markets and are a part of financial markets. C
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Secondary Markets
Secondary markets are markets, in which securities are traded, but not acquired directly from the issuers. This is why secondary markets differ from primary markets, where securities are bought directly from issu
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Junk Bonds
Junk bonds are bonds that have a speculative-grade credit rating, which is BB or lower. Junk bonds are riskier but they have higher yields. The spread between junk bond yield and safe bond yield (c
http://www.investingforbeginners.eu/junk_bonds
Penny stocks
Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc
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Cheap stocks
Cheap stocks are such stocks that are traded at low valuation multiples. For example, if you see a telecom or utility company of which P/E is equal to 6 and EV/EBITDA is equal to 3, you may say it is a cheap stoc
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Growth stocks
Growth stocks are stocks of companies which earnings per share grow faster than average on the market. Such is theory, but if look in practical side, earnings grow faster most of the times only when economical cy
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Dividend Growth stocks
Dividend growth stocks are stocks that are hard to find in reality. Because the stock must be either value stock (large dividend payments) either growth stock (small dividend payments) or either something in betw
http://www.investingforbeginners.eu/dividend_growth_stocks
Value stocks
Value stocks are opposite to growth stocks and attract investors not by growth perspectives but by stable cash and dividend flow. Market ratios (P/E, P/B and other) of value stocks are low and together with high
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Value Penny stocks
Value penny stocks are stocks that have characteristics of both: value stock and penny stock. Investment in value penny stocks isn’t very popular, because stock investors who seek for safety invest in norma
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Investment Market
An investment market is a part of a financial market and represents all investments that were issued by corporations, governments or other entities. All the trades made by retail and institutional investors can b
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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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Diversifiable Risk
A diversifiable risk is the risk that can be reduced by increasing number of investments in the investment portfolio. For example, company’s risk can easy diversifiable by choosing more companies. Even coun
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Market Risk
A market risk is a systematical risk that cannot be diversified. There are some risk factors that can make effect on the whole market: economical cycles, nature disasters, wars; and such are not diversifiable ris
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Investment Growth
An investment growth may have two different meanings: Most probable it refers to growth investing. It is an investment strategy or part of it, which concentrates on investments in stocks that grow faster than
http://www.investingforbeginners.eu/investment_growth
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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Corporate Investment
A corporate investment is investment made by one corporation into another. All corporations try to keep the growth of the business. Some do it only organically, while others also proceeds mergers & acquisitio
http://www.investingforbeginners.eu/corporate_investment
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
http://www.investingforbeginners.eu/quantitative_investment_management
Foreign Direct Investment
Foreign direct investment (FDI) traditionally was understood as investment that is made by foreign country in direct assets, for example factory, including land, building and machinery. When financial markets evo
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Return on Investment
Return on investment (ROI) is a percentage that shows profitability of an investment or investment portfolio. Return on investment calculation: CALCULATION: Return on investment = net in
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Investment Finance
Investment finance is finance that is related to investment. Investment market is a part of financial market, so we can say that investment is a part of finance. Investment finance specializes on f
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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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Inflation
Inflation is a percent that reflects a price increase of goods and services portfolio. When inflation occurs, money is losing its purchasing power. For example, if inflation would keep at 8% for 9 years (it would
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Deflation
Deflation is a process opposite to inflation and occurs when inflation is negative. Deflation means that prices of goods and services are decreasing. Such situation when prices are decreasing is not very common i
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Stagflation
Stagflation is an economical situation, when high inflation and stagnation of the economy come together. It is very difficult situation, because it not allows using monetary politics efficiently to revitalize the
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Valuation Multiples
Valuation multiples are stock ratios that include in the calculation share price and show whether stock is cheap or expensive compared to similar stocks. Valuation multiples (or just multiples) ar
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P/E Ratio
P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im
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PEG Ratio
Price-to-Earnings to Growth Ratio PEG ratio is quiet popular among retail investors, however professionals do not use it often because of this ratio subjectivity. PEG ratio shows how expensive is stock compared
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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
EV/S Ratio
Enterprise Value to Sales Ratio EV/S ratio shows how expensive firm is compared to its sales. This multiple is important when company is unprofitable or profits margins are very low and turnaround is expected in
http://www.investingforbeginners.eu/ev_s_ratio
P/S Ratio
Price to Sales Ratio P/S ratio shows the price of the stock compared to its sales. This ratio historically was quiet popular, but now EV/S ratio, which is more correct methodically, is used.
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EV/EBITDA Ratio
EBITDA Multiple EV/EBITDA ratio shows how expensive firm is compared to its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). EV to EBITDA multiple is mostly used by professionals because
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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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DCF Valuation
Discounted Cash Flow Analysis DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t
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Replacement Cost Valuation
Replacement cost valuation method is not very popular at stock valuation. Most of the investors are picking stocks with help of relative valuation or DCF valuation. Only when those two methods aren’t possib
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ADR (American Depository Receipt)
ADR (American Depository Receipt) is a form of international stock trading when a certificate (security) that might be traded in some US stock exchange in US dollars and represents shares of foreign company. The
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GDR (Global Depository Receipt)
GDR (Global Depository Receipt) is a security’s certificate that is traded on some European stock exchange and represents shares of foreign company. GDR normally is denominated in one of the main currencies
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Depository Receipts
Depository receipts are certificates that makes easier to invest in foreign stocks. Depository receipts lowers administration costs for foreign investment and makes foreign investments more trustful for local inv
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CAPM
CAPM (Capital Asset Pricing Model) is method widely used for equity cost calculation. Equity cost should show the return that investor should expect/seek from an investment that contains specific level of risk.&n
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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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Market Making
Market making is a service provided by brokerage company to some listed company to increase liquidity in stock trading on stock exchange. Usually brokerage company gets paid for this service and has to maintain s
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Conflict of Interest
A conflict of interest is very sensitive problem at financial intermediaries when interests of different groups (owners, investors, employees or other) cross each other. All employees in investment market should
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Profit Margin
Profit margin normally refers to net profit margin, which is net profit divided by sales. But one should remember that profit might be of different kinds (net profit, pretax profit, EBIT, EBITDA and gross profit)
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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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The Pros and Cons of Buying on Margin
Buying on Margin Costs of Buying stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth? The opportunity provided by buying on margin i
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Psychology of Buying on Margin: Is it worth?
Buying on Margin Costs of Buying stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth? For the conclusion I would like to say that bu
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Costs of Buying stocks on Margin
Buying on Margin Costs of Buying stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? We won’t talk about the possible losses in here. The goal of this paragraph is t
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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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Trading stocks
Trading stocks is a process when stocks are bought and sold on the stock market. How differs trading stocks and investing in stocks? Well, it is the same, just is common to think that investing is a long term pro
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Trading Platform
Trading platform is an electronic tool provided by brokerage company or other financial intermediary that allows for investor to buy and sell stocks or other securities using his computer. In other words trading
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Equity Trading
Equity trading is a process when equities are bought and sold through a trading platform. Equity trading is a synonym for trading stocks as equity in investment field is represented by stocks. Investing in equity
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White Knight
A white knight is a friendly (for the target) bidder who gives a better offer to acquire stake in the company than “hostile” bidder during hostile takeover. White knight is one of the strategies used
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Poison Pill
A poison pill is one of the strategies used to avoid hostile takeover. Poison pills are some rules in company’s charters that give some extra rights for corporation. Poison pills may be rights to acquire mo
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Employee Stock Options
Employee stock options are options that are given to employees as part of motivation package and gives an opportunity for employees to acquire shares of the company in the future at a lower price. In their meanin
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Bearish
Bearish is attitude of an investor if investor expects market to go down in the near future. Most often term bearish is applied for stock investments when is believed that stocks are going to decrease in value. T
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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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Par Value
Par value also is called face value or nominal value, and is a nominal amount of money that shows how much of money is related to the security nominally. Par value is used most commonly for two types of securitie
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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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Risk Tolerance
Risk tolerance is a characteristic that describes the investor and his ability to withstand losses from investments. The higher risk tolerance of investor the more losses he/she may handle. Investm
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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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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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Stock Option
A stock option is derivative financial instrument that gives the holder of the option the right to buy some particular stock at the predetermined strike price till the end of the option (or at the end, depending
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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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Day Trader
A day trader is a speculator that trades in stocks, currencies or some other securities within a very short period. Most of the trades are made by the trading in one day period. Day trader is a pure speculator, e
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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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Best Investments
Best investments are always wanted, but the reality is that there are no best investments for everyone. And if such investment would exist then those investments would become an investment bubble and would not st
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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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Short-Term Investments
Short term investments are investments that are suited for short term investing. There can be different understanding of short term investing but it is normal that investments for period till one year can be cons
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Company Valuation
Company valuation is the same as business valuation. The only difference between company valuation and business valuation may occur if value of company’s stocks has to be determined instead of the whole bus
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Stock Market Trading
Stock market trading is similar to stock market investing; however, it is not exactly the same. At first, stock trading refers to a stock trader who trades stocks very often and do not invests for a long term. Lo
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Stock Price
A stock price is the last price of a share (stock) that was traded in a stock exchange for a particular stock. If stock exchange is closed at the moment, then the last stock price will be closing price for that s
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Stock Market Investing
Stock market investing is investing in equity securities – stocks. Stock market investing differs from stock market trading because has longer term approach. Stock markets cover stocks that a
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Good stocks
Good stocks are those stocks that meet’s investors risk tolerance and investment strategy. Also good stocks should have upside potential to increase in value in the future. If stocks are already priced high
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Best stocks
Best stocks would depend on criteria of the particular investor. Of course, you could say that best stocks should be the stocks that will increase the most in the future. But reality is that nobody knows about th
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Buying stocks
Buying stocks is an easy thing. Of course, it is harder to pick good stocks. Every person, that has some capital, can open a trading platform and buy stocks, but the goal is not only to buy the stocks but to make
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Stock Symbol
Stock symbol is symbol that is created for stocks by stock exchange to be easier recognizable for participants of the financial market. Stock symbol mostly is called as stock ticker.
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Stock Ticker
A stock ticker also called as a stock symbol actually is some code that is given for a p stock. Every stock that is listed on any stock exchange has some stock ticker by which is recognized. The stock ticker is n
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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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Broker
A broker is an intermediary that helps for retail or other investors buy their investments. Broker can be as a person (job title) or a brokerage company that acts as a financial intermediary between the seller an
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Ask Price
Ask price is the lowest price at which seller of a security is willing to sell indicated amount of securities. In stock exchange many investors leave their sell orders through their brokers and every sell order t
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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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Bid-Ask Spread
Bid-ask spread is the difference between the bid price and the ask price, or in other words it is a difference between the best offered price of a seller and the best given price by a buyer for a particular secur
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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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Undervalued stocks
Undervalued stocks are called those stocks that are believed to have higher target price than their stock price on the exchange. The higher is the difference the more stock is undervalued. If stock price in the m
http://www.investingforbeginners.eu/undervalued_stocks
Finding Investors
Finding investors might be a hard task if you have no required knowledge for that. Most probably you are looking some business investors or angel investors that would invest in to your business. And the success o
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Target Price
Target price is a calculated price that should represent the market value of the stock and also can be called target value. Target price normally is calculated by analysts of investment banks of brokerage compani
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Overvalued stocks
Overvalued stocks are those stocks that cost in stock market more than their target price is. Target price of the stock is calculated market value of a stock using stock valuation methods. The most popular method
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Target Value
Target value is a calculated market value of the stock that should show the expected price of the stock. If target value is higher that stock price on the stock exchange, that should mean the analyst that made th
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Financial Statements
Financial statements are periodically by the companies issued reports that provide the most important financial information about company’s financial condition and success of activity. There
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Balance Sheet
Balance sheet is one of the three main financial statements (others are income statement and cash flow statement). Balance sheet also might be called a statement of financial position because this statement expla
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Earnings
Earnings are calculated gains of the company and should represent the profit of that business. There are several types of earnings: Retained earnings are equal to net profit less dividends. Net earnin
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Income
The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu
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Loss
Loss (net loss) is a financial situation of the company when its revenue is lower than expenses. It is natural that every company tries to receive a profit instead of a loss, but not every succeeds that. Some com
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Financial Analysis
Financial analysis is an important part of investing, especially if investor wants better results from his investments. Of course it is possible to ignore financial analysis and make investment decisions based on
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Return
Return analysis is different from profitability analysis because usually return is measured as a profitability of the assets, investments, capital or other similar asset group but not as a profitability of the re
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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 Blue Chip stocks
Stock investments require high degree of financial knowledge and the understanding of market realities, but only if you are seeking for the most efficient result. Yet, the reality is that there are millions of pe
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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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Investment Formula
If you are looking for some perfect investment formula, you should get disappointed because there is no secret investment formula that would be profitable for every investor. If there would be such perfect formul
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Price to Free Cash Flow
Price to free cash flow (P/FCF) or EV/FCF ratio are ratios that compare company's price to its free cash flow. The main difference between those two ratios is that EV/FCF also includes the eff
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Free Cash Flow Yield
Free cash flow yield (FCF yield) show how much of cash that may be distributed to shareholders the business earns compared to its price on the stock exchange (including both: equity value and debt value or just e
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Free Cash Flow
Free cash flow of the company shows how much of cash business has earned in the reality over the period. There are many ways to determine the free cash flow of the company, and most often this indicator is provid
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Asset Performance
Asset performance is a return of an asset over some period. Usually performance is measured on annual basis. But basically performance of any asset depends on its riskiness and the period (most of the stocks and
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Economic Cycle
What is economical cycle? An economic cycle means the repeated changes of the economical trends. While during very long economical period economy always has up-trend because of technological evolution and increa
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Beta
What is beta? Beta is a ratio that measures volatility of an investment in relation to the whole market. In other words, it shows how the price of stock was changing compared to the whole market. Theoretically,
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Volatility
What is volatility? Volatility definition can be short: volatility is the size of the amplitude in investment’s value changes over time. In simple words, it describes the riskiness of the security because
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Profit Taking
Profit taking is the selling of stocks or other investments after sharp rise in prices. Investors are say that they ‘took profit’ when they sold their stocks after good rise when they seceded with sto
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Inside Information
Inside information is information of the company that was not publicly disclosed. Such information is daily routine for company’s managers, finance department employees or product department employees as th
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Insider Trading
Insider trading is an illegal activity in trading stocks when a stock trader is using information that was not officially disclosed. Such information is called inside information. Such trading is called ‘in
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Fundamental Analysis
Fundamental analysis is the type of financial analysis that relies on company’s fundamentals. Those fundamentals depend on the target of the analysis. For example, fundamental analysis of stock depends on i
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Technical Analysis of stocks
Technical analysis of stocks is widely known type of stock analysis. Technical analysis is completely opposite to fundamental analysis. While fundamental analysis relies on company’s ability to generate cas
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Market Risk Premium
(Equity Risk Premium) Every investment carries some level of risk and some level of potential return. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq
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Privately Held Corporation
Privately held corporation or closely held corporation is a company, which doesn’t have its shares listed on the stock exchange. If a corporation is closely held it not necessary means that it is small busi
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