Investing for Beginners .EU, investing There can be no vulnerability without risk; there can be no community without vulnerability; there can be no peace, and ultimately no life, without community.
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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

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

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

  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

Sortino Ratio
  Sortino ratio is a financial ratio that is used to measure the performance of investment portfolio and is very similar to a Sharpe ratio. The main difference between Sortino ratio and Sharpe ratio is that Sharpe

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

Terminal Value
  Terminal value is a value of the business (or other asset) used in discounted cash flow (DCF) method that is added after the discontinuing of the cash flow forecasting.   DCF valuation is based on the sum

Investment in Options
  Options are very known derivatives and especially popular among investing speculators. Options has some attraction: every successful prediction can grow up invested amount a lot of times very quickly and potentia

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,

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

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

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

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

  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

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

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

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

  Wealth MANAGEMENT has a lot of similarities to investment MANAGEMENT also a lot in common with finance MANAGEMENT.  But the finance MANAGEMENT defines more corporate not a personal finance MANAGEMENT, while

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

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

  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

  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

Stock Split
  A stock split is a divide of existing company’s shares decreasing its face value. For every owned share an investor gets a several (or one) additional shares depending on split ratio, and the total out

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

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

  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

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

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

  Asset MANAGEMENT is a process when assets acquired, monitored and sold on purpose to achieve optimal investment results. There is no strong difference between investment MANAGEMENT and asset MANAGEMENT. However,

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,

Pioneer Investments
  Pioneer Investments is an US investment company that main business is investment MANAGEMENT. Now Pioneer Investments is a worldwide company, but its activity is mostly exposed to Italy, because it was acquired by

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

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

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

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

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

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

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

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

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

Business Organization Forms
  Business organization forms may be different vary over countries depending on corporate law. The most popular classification, also applied in US classifies such forms: Sole proprietorship Partnership Limited

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

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

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

Private Banking
  Private banking is a service provided for the richest clients of the commercial bank. Such clients have designated personal banker from the institution and they can call to that personal banker for any financial

Holding Company
  Holding company is a type of a company which main activity is to invest in other companies. Holding as itself does not do any activity instead of managing their subsidiary companies and searching for new investme

  A takeover is an acquisition of publicly owned corporation by another company. If non-control stake is acquired, it is not yet a takeover. The takeover occurs only when the acquirer gets a control to form managem

Corporate Finance
  Corporate finance is a niche of finance that deals with financial questions related to corporations.    The main goal of every company should be stockholders wealth maximization, but to achieve that m

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

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

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

  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

Investment Performance Measurement
  Many investors are happy about investment managers until the stock market is growing, but when the decline starts investment managers gets only the worst words about their job. However, this is wrong attitud

Investment MANAGEMENT Books
There are many books on the world that teaches how to manage investments. These are few recommendations for you:   Investing for Beginner Exposed, R. Lukosius. Amazing book for beginners or advanced investors wh

Investment Risk MANAGEMENT
  There are several main methods of investment risk MANAGEMENT:    Diversification. Diversification is the easiest and most of the times the cheapest way to reduce risk level of the investment portfol

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

Working Capital
  Working capital can be calculated from balance sheet data. There are few ways to calculate working capital, but the most accurate is this one (for operating working capital):   Working capital = total curr

Working Investment
  Working investment mostly refers to working capital, which is equal to current assets less current liabilities.    The other meaning of working investments might be that those are investments that are

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

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

  Correlation is a statistical measure that shows the relationship between two objects. Correlation may range between +1 and -1. If correlation between the objects is 0 that means they are not dependable on each ot

  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

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

Inventory Turnover Ratio
  Inventory turnover ratio shows how quickly company’s inventory is changing compared to its sales or cost of goods sold. This ratio shows how effectively inventory is managed in company’s production/di

  ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha

  ROA (Return on Assets) shows what profits are earned by company’s assets. Of course, assets alone usually do not earn the profit, because most of the times profit is the result of know-how and hard work of

  M&A (mergers & acquisitions) is a field of corporate finance in which corporations are acquiring other companies or are merging in between. Theoretically it doesn’t sound very impressive, but in rea

  A merger is a deal when two (theoretically possible more) companies are merging in between to achieve synergy. Mergers are part of M&A market and differ from acquisition by payment method for the stake. In me

  An acquisition is a takeover of one corporation by another when shares are bought and control of MANAGEMENT is overtaken. Acquisition is an M&A deal and as targets for acquisition usually become some competin

Hostile Takeover
  A hostile takeover is an acquisition of a target company when its MANAGEMENT doesn’t want the company to be overtaken by another corporation. The target of a hostile takeover may be only listed company whic

Friendly Takeover
  A friendly takeover is an acquisition of a target company when its MANAGEMENT doesn’t resist to be overtaken by another corporation. Most the deals in M&A are friendly when MANAGEMENT of one company neg

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

  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

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

Organic Growth
  An organic growth is a growth of the company when inner resources are used to get larger market share. Also organic growth may be achieved together with growth of the whole market segment or entering new markets

  Synergy is a popular term among MANAGEMENT of the companies as well as among M&A participants. In finance synergy means a savings in some costs when several units are merged. The theory says it should be like

Leveraged Buyout
  A leveraged buyout (LBO) is a takeover of a company when debt capital is the main financing source for the acquisition and the acquired assets are used as collateral to receive the needed debt. The LBO may be exe

  A MANAGEMENT buyout (MBO) is an acquisition of a company when company’s MANAGEMENT gets the control interest in the company. MANAGEMENT buyout can be placed on if existing shareholders agree to sell their s

Employee Buyout
  An employee buyout is a takeover of the company’s control interest by its employees (usually employee stock ownership plan). Compared to a MANAGEMENT buyout, employee buyout involves much more employees, an

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

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

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

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

Voting Right
  A voting right is a right provided by every common stock to participate in a shareholders’ meeting and vote for the decisions as MANAGEMENT election, audit company election and other important questions. Us

Active Investment
  Active investment (MANAGEMENT) is opposite to passive investment and means that investments are managed by some investment professional that picks the securities according to investment market tendencies and

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.

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

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

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

Investment MANAGEMENT System
  It is common to understand an investment MANAGEMENT system as investment MANAGEMENT software that helps in investment portfolio MANAGEMENT. While other people believe that investment MANAGEMENT system should do t

Investor Education
  Investor education is very important task to make investors achieve better results. It is hard to become the best specialist of investment MANAGEMENT in short time but every investor can learn to avoid the main m

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

Real Estate Investment MANAGEMENT
  Real estate investment MANAGEMENT is a MANAGEMENT of real estate portfolio. Real estate investments are different from standard investments (securities) and MANAGEMENT of real estate investments differs from inve

Investor’s ABC
  Investor’s ABC includes all the main topics that are necessary for every investor to avoid the most popular failures in investing and to achieve good investment results.    If you want to be rea

Investment MANAGEMENT Solutions
  Investment MANAGEMENT solutions are not much different from investment MANAGEMENT system and most of the times are applied as portfolio MANAGEMENT software that helps in administration of investment MANAGEMENT pr

Investment MANAGEMENT Consultations
  Investment MANAGEMENT consulting is part of investment MANAGEMENT business that helps for investors to manage their investments more effectively. Investment MANAGEMENT is one of the most crucial step in personal

Real Estate Investors
  Real estate investors are individuals or investment companies that are investing in real estate (property). There few main types of real estate investors:   • Real estate developers are investors that

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

Investment MANAGEMENT Process
  Investment MANAGEMENT process has several functions: Macroeconomics analysis and estimates Research of industry sectors Security picking Asset allocation Market timing Financial news covering Securitie

Private Equity Investor
  Private equity investor is a corporation or individual that is investing in stakes of unlisted companies. The only different between equity investor and private equity investor is that the last one invests in unl

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

Income Statement
  Income statement (also called statement of operations, profit and loss statement, P&L or other) is one of three main financial statements reported by the companies periodically. Income statement exposes compa

  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

Operating Margin
  Operating margin is a profitability percentage that shows what company’s profit margin is before it pays interests and taxes. Operating margin simply ignores capital structure (because ignores financial act

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

  Solvency analysis takes an important part in financial analysis and mostly is used by creditors. Creditors of the business (bondholders, banks that provide loans) don’t care much if company’s profit w

Debt to Asset Ratio
  Debt to asset ratio (also called as D/A ratio, Debt/Asset) measures how big is company’s debt compared to its assets. Debt to asset ratio is very similar to debt to equity (D/E) ratio but normally is lower

Financial Planning
  Financial planning is a type of financial analysis of which goal is to predict financial situation of the object in the future. There are two main trends where financial planning can be applied: in corporate fina

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

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

Working Capital Calculation
  There are few modifications of working capital calculation. All data that are needed for working capital calculation can be found in balance sheet (which is one the three main financial statements).

Working Capital Ratio
  Working capital ratio may have several meanings in practice:   (1) Working capital ratio = Working capital / Sales (2) Working capital ratio = Current ratio = Current assets / Current liabilities (3)

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

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

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

Investment Philosophy
  Investment philosophy must include the main rules of the investment MANAGEMENT process. It is a type of approach in which investor is tend to believe. Many investors believe in different things and have different

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

Price to Cash Flow Ratio
  Price to cash flow ratio (P/CF) and EV/CF ratio are similar but there are some differences. The main difference is that EV/CF also includes the effect of company’s financial debt which says a different

Operating Cash Flow
  Operating cash flow or ‘cash flow from operations’ (CFFO) is one of the most important among financial indicators and is used to measure company’s results in cash terms. While net income or oper

  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,

Annual Report
  Annual report is a report on company’s activity issued each year. Not every company issues an annual report and mostly such reports are issued by public companies or those that are preparing going public.&n

Accounts Payable Turnover
  Accounts payable turnover ratio shows how quickly company is paying to its suppliers for services or goods and materials. If payables turnover is very low, it may signify different reasons behind it: Company i

Receivables Turnover
  Receivables turnover ratio (also called as accounts receivable turnover) is a financial ratio that measures how efficiently company collects its receivables. If receivables turnover is very low, it means company

Average Collection Period
  Average collection period is a financial ratio that is used to measure how fast company collects its receivables. ‘Average collection period’ shows what is the average time period till company gets ca

Current Ratio
  Current ratio is a financial ratio that measures company’s financial liquidity in short term. In simple words, this ratio compares company’s short-term assets to its short term liabilities. If short-t

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

Cash Conversion Cycle
  Cash conversion cycle is a measure that shows how many days take to convert the cash of a company in to production and to sell it. However, the formula of conversion cycle also includes ‘days payable outsta

Days Payable Outstanding
  ‘Days payable outstanding’ ratio shows how long it takes the company to pay its liabilities to the suppliers. The longer period means that company is not in a hurry to settle up its debts to the suppl

Days Inventory Outstanding
  ‘Days inventory outstanding’ measures how efficiently company manages its inventory. Inventory often is the main part of working capital and it is very important to managed inventory efficiently. Ther

Cash Turnover Ratio
  Cash turnover ratio compares company’s sales to its cash and measures how effectively company is using cash assets. However, this financial ratio now is a bit outworn and is not very meaningful for most of

Gross Debt
  (1) Gross debt in corporate finance is often used as synonym for ‘total debt’, however there might be some differences depending on the version of the total debt. Technically, ‘gross debt’

  (1) Negotiable means the description of the price when it is or can be flexible depending on other conditions. All sold goods or services may have negotiable or fixed prices, and it depends on the sales strategy

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

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

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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