H - M Archives - HowTheMarketWorks

Money – Types of Stored Value

Kevin Smith — Tue, 05 Apr 2016 14:50:33 +0000

Definition When we think of money, stored value means anything that isn’t cash, but you can still use to transfer value – checks, debit cards, gift cards, and forms like that. These are used to transport some dollar amount which we can later exchange for goods and services. Each of these forms of stored value have their Read More...

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Money Creation

Kevin Smith — Wed, 13 Jan 2016 21:45:01 +0000

Definition: Money creation is accomplished through a system of borrowing and lending. Until the 1970’s, it was based on the total reserves of gold and silver. Details on Money Creation: Money is created principally by standards set by the federal reserve / central bank. The central bank will determine the amount loaned to it’s commercial Read More...

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Leveraged ETFs

Kevin Smith — Mon, 27 Jul 2015 16:05:39 +0000

ETFs are collections of assets into bundles you can invest in all at once, the most popular ones follow indecies (such as SPY following the S&P 500), which is one way for an investor to build a diverse portfolio without holding dozens of individual positions. However, using financial derivatives and debt, there are also “Leveraged ETFs”, Read More...

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Insurance

HTMW Team — Thu, 05 Sep 2013 19:07:11 +0000

Insurance is protection from losing or damaging something. It is defined as the transfer of loss risk in exchange for payment. Basically, if we damage or lose something that was insured, the insurance will cover the cost of having it fixed or replaced.

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Monopoly

HTMW Team — Mon, 27 May 2013 13:53:10 +0000

Monopoly, in economic terms, is used to refer to a specific company or individual has a large enough control of a particular product or service that allows them to influence it’s price or certain characteristics.

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Monopolistic Competition

HTMW Team — Mon, 27 May 2013 13:50:02 +0000

Monopolistic Competition is characterized as a form of imperfect competition.

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Money Supply

HTMW Team — Mon, 27 May 2013 13:47:02 +0000

Money supply is the total amount of money available in an economy at any particular point in time.

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Monetary Policy

Kevin Smith — Mon, 27 May 2013 13:42:06 +0000

Monetary Policy refers to the process by which the Monetary Authority of a given country implements a variety of measures to control the supply of money.

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Modern Portfolio Theory (MPT)

HTMW Team — Mon, 27 May 2013 13:31:17 +0000

Modern Portfolio Theory (MPT) is an investment theory whose purpose is to maximize a portfolio’s expected return by altering and selecting the proportions of the various assets in the portfolio.

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Momentum Investors

HTMW Team — Sat, 13 Apr 2013 19:01:59 +0000

An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.

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Inflation-Indexed Securities

HTMW Team — Wed, 03 Apr 2013 01:40:40 +0000

A security with a guarantee of a return rate that is higher than the rate of inflation if it is held to maturity

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Hedge Fund

HTMW Team — Thu, 28 Mar 2013 22:15:39 +0000

A hedge fund is one of the investment tools you will aspire toward as a serious investor. The first hedge fund came out in 1949 as a strategy to neutralize the effect of overall market movements on a portfolio.

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Hyperinflation

HTMW Team — Mon, 25 Mar 2013 22:13:55 +0000

Hyperinflation refers to out of control or extremely rapid inflation, where prices increase so quickly that the concept of real inflation becomes meaningless.

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Inflation

Kevin Smith — Mon, 25 Mar 2013 21:58:21 +0000

Inflation refers to the general rising of prices for goods and services in the economy, due to an increase in the amount of money and/or credit available.

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Market Capitalization

HTMW Team — Mon, 25 Mar 2013 21:34:50 +0000

In a cap-weighted index, large price moves in the largest components (companies) can have a dramatic effect on the value of the index.

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Various Risks of Investing

HTMW Team — Mon, 25 Mar 2013 20:46:07 +0000

Your ideal investment or investment portfolio gives you the most opportunity for the risk you can bear. In this sense, it is important to understand the risk inherent in an investment before you look for the opportunity.

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Institutional Investor

HTMW Team — Sun, 17 Mar 2013 03:11:35 +0000

A non-bank organization that regularly trades large blocks of stocks.

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Horizontal Analysis

HTMW Team — Wed, 13 Mar 2013 19:00:15 +0000

A way to evaluate potential profit on an investment by making a projection of growth over several years. For example, if a company makes a 7% profit increase in the prior quarter, an accountant could project 7% profit increase for the next quarter.

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Market Indicators (list of Market Indicators)

HTMW Team — Tue, 12 Mar 2013 21:26:47 +0000

A series of technical indicators used by traders to predict the direction of the major financial indexes.

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Market Index

HTMW Team — Fri, 08 Mar 2013 01:54:48 +0000

By aggregating the value of a related group of stocks or other investment vehicles together and expressing their total values against a base value from a specific date. Market indexes help to represent an entire stock market and thus give investors a way to monitor the market's changes over time.

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Maintenance Margin

HTMW Team — Thu, 28 Feb 2013 23:18:40 +0000

Definition: The minimum amount of equity that must be maintained in a margin account. NYSE and FINRA a 25% margin of the total market value of the securities in the margin account. This is a minimum for all margin accounts and many brokerages have higher maintenance margin requirements of 30-40%. Maintenance Margin example If you Read More...

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Initial Margin

HTMW Team — Thu, 28 Feb 2013 23:12:01 +0000

The percentage of the purchase price of stocks (that are purchased on margin) that an investor must pay for with his own cash or marginable securities.

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Margin Call

HTMW Team — Thu, 28 Feb 2013 23:11:15 +0000

Margin calls happen when your account value drops to a value below that allowed by a broker.

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Incubator

HTMW Team — Sat, 23 Feb 2013 19:17:13 +0000

A company that provides ideas to support growth and organization as well as introductions for new entrepreneurs to help their startup companies. These startups are usually technology-related.

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Horizontal Integration

HTMW Team — Sat, 02 Feb 2013 20:21:49 +0000

The merger of companies at the same stage of production in the same or different industries.

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Junk Bonds

HTMW Team — Thu, 17 Jan 2013 17:19:19 +0000

A high-risk bond with a low credit rating. Junk Bonds usually have a much higher yield than investment-grade bonds.

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Investment Software

HTMW Team — Wed, 31 Oct 2012 15:26:52 +0000

Learn about all the most popular Investing Software available. Our directory includes charting software, trading software from all the major brokerage houses, chart pattern identification software and many more.

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Mutual Fund Screener

HTMW Team — Mon, 08 Oct 2012 22:03:48 +0000

Mutual Fund screeners are available on countless websites and trading platforms. They allow users to choose trading instruments that are suitable for certain criteria profile.

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Loaded Mutual Fund

HTMW Team — Sat, 06 Oct 2012 21:05:02 +0000

A load mutual fund comes with a sales charge or commission.

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Mutual Funds

HTMW Team — Sat, 06 Oct 2012 17:35:24 +0000

A mutual fund is a form of professionally executed investment tool that merges money from numerous investors to buy securities.

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Leveraged ETFs

HTMW Team — Sat, 06 Oct 2012 20:16:50 +0000

An exchange-traded fund (ETF) that uses financial derivatives and debt to amplify the returns of an underlying index. Leveraged ETFs are available for most indexes, such as the Nasdaq-100 and the Dow Jones Industrial Average.

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Indexed ETFs

HTMW Team — Fri, 05 Oct 2012 15:46:17 +0000

A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover.

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IPO

HTMW Team — Wed, 03 Oct 2012 21:34:24 +0000

The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

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What is an Income Statement?

Mark Brookshire — Tue, 25 Sep 2012 05:31:49 +0000

Income statement (also referred to as profit and loss statement (P&L), revenue statement, statement of financial performance, earnings statement, operating statement or statement of operations is a company's financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the "bottom line").

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Limit Order

HTMW Team — Tue, 25 Sep 2012 02:17:16 +0000

A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute. A limit order can only be filled if the stock’s market price reaches the limit price. While limit orders do not guarantee execution, they help ensure that an investor does not pay more than a pre-determined price for a stock.

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Market Order

HTMW Team — Tue, 25 Sep 2012 02:16:16 +0000

A market order is an order to buy or sell a stock at the best available price. Generally, this type of order will be executed immediately. However, the price at which a market order will be executed is not guaranteed. It is important for investors to remember that the last-traded price is not necessarily the price at which a market order will be executed. In fast-moving markets, the price at which a market order will execute often deviates from the last-traded price or “real time” quote.

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Margin

HTMW Team — Mon, 24 Sep 2012 00:08:09 +0000

Margin is the amount of money supplied by an investor as a portion of the total funds needed to buy or sell a security, with the balance of required funds loaned to the investor by a broker, dealer, or other lender.

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Moving Average Convergence Divergence (MACD)

HTMW Team — Sun, 09 Sep 2012 21:30:39 +0000

The Moving Average Convergence-Divergence (MACD) indicator is one of the easiest and most efficient momentum indicators you can get. It was developed by Gerald Appel in the late seventies.

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