Investing Basics
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What is a Portfolio?
Understanding a portfolio A portfolio is like a financial report card that shows how you’ve chosen to spend your money. For most people, it’s a mix of stocks, bonds, and cash. But it can also include other cool stuff like foreign currencies, gold, art, real estate, or even investments in private companies. The key to…
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What is an Investment?
Understanding investments Investing involves exchanging resources (such as money or credit) for assets (like stocks or real estate) in the hopes of reaping future benefits. For instance, an investor might purchase stocks with the expectation that they will appreciate in value or provide dividends. Similarly, a student may invest in their education by pursuing a…
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What is Market Capitalization?
Understanding market capitalization Market capitalization is the dollar value of a company’s outstanding shares. This is calculated by multiplying the total number of shares by the price of each share. As the stock price or the number of shares outstanding changes, the company’s market cap will also change. Companies are categorized into three market cap…
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What are Bull and Bear Markets?
Understanding bull and/or bear markets It looks like investors enjoy having an animal mascot to represent market trends. The terms bull and bear markets are commonly used in investing to convey positive (bull) or negative (bear) sentiments. A bull market typically refers to a 20% increase from the market’s low point, while a bear market…
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What is the S&P 500?
Understanding the S&P 500 Standard & Poor’s is a financial services company famous for the S&P 500 Index, which it introduced in 1957. This index combines the stock prices of 500 companies across different sectors into one number, providing a snapshot of the US stock market’s performance. The index is weighted based on the market…
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What is the Stock Market?
Understanding the stock market Stocks are traded on stock markets, where buyers and sellers of shares in publicly traded companies meet. Stock markets function similar to auctions, with buyers stating the highest price they’re willing to pay (“the bid”) and sellers stating the lowest price they’re willing to accept (“the ask”). When a trade is…
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What can I invest in? An overview of assets
Investing is the act of buying an asset with the hope of earning a profit later on. The whole idea is to “let your money do the work for you”. Investing is like sending a climbing team up a mountain… When climbing a mountain, you’ll encounter different paths. Some are short and steep, while others…
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Three things to do before you start investing
Think of investing as a lifelong journey, much like a marathon. You can’t just jump into it like Forrest Gump; you need to train. To begin, it’s important to set a goal. Are you training for a half marathon or a full one? Perhaps you have your sights set on running cross-country? In that case,…
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Why should you think about investing?
On a daily basis, you most likely make small decisions regarding money, such as purchasing groceries, shopping online, and saving money for bills. However, it’s important to keep in mind that your financial life isn’t solely about these short-term expenses. It’s equally important to think about what’s on the horizon. The decisions you make today…
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What are Futures?
Understanding futures If you know that you’ll need something in the future and it’s currently being sold at a good price, you have the option to purchase it now and store it for later use. These contracts involve the buyer and seller reaching an agreement on the price, quantity, and future delivery date of an…