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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
How ECB Is Affecting Investment Markets?
Today was announced very interesting news. The news is about the fact that ECB (European Central Banks) lends 489 billion of Euros to the banks. It is a really huge amount of capital that flows from ECB to the fi
http://www.investingforbeginners.eu/how_ecb_is_affecting_investment_markets-p0-i18
Investing for Beginner
Many people are prepared to invest, and understand that investing would help to achieve many important goals of life.However, most of those people do not even start to invest, because do not know exactly how to do that,
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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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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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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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Finance Management
Financial management, asset management, investment management, wealth management in fact are similar processes only called in different names. An investments definition may include both financial assets and real
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Investment 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
Wealth Management
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
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Investment Guidelines
Investment guidelines – is an investment practice that is recommended to achieve set goals. Investment goals may be very various for different investors, but still there are some common guidelines like buy
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Investment Solutions
Investment solutions are services provided by investment banks or brokerage firms. These services may include common elements of investing: securities trading trough broker, online investing, securities depositor
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Investment Decision
An investment decision is a choice made by investor or investment manager trying to maximize the return and minimize the risk. The every decision maker tries to make the best choice for him, the same time better
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Bond Market
A bond market includes all the bonds (debt securities) that are issued and traded or just held. Bond market is a part of a whole financial market. This market covers all the fixed income securities that are
http://www.investingforbeginners.eu/bond_market
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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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.
http://www.investingforbeginners.eu/preferred_stock_preferred_shares
Book Value of Share
A book value of share is calculated dividing all company’s book value (less preferred equity) by its common share number. For example, if company’s book value is 1,000,000 USD and issued share nu
http://www.investingforbeginners.eu/book_value_of_share
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
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Dividend Payout Ratio
Payout ratio is a percentage that shows a portion of company’s income distributed as dividends. Formula Dividend payout ratio = common shares dividends / net income *For the sam
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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
http://www.investingforbeginners.eu/flipping
Buying on Margin
Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth? Buying on margin gets popularity during every strong bull market. Unfortunately, it be
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Investment Group
An investment group is an organization, which activity is closely related with investment. Still there can be no exact definition what investment group does because they might have different juridical forms
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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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Business Valuation
The goal of business valuation is to determine the correct market value of a business. Usually business valuation is performed by professional valuators / assessors who have required qualifications for the job.&n
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Commercial Bank
A commercial bank also commonly called just a bank is financial institution that has a license to provide financial services. The principal services provided by banks: Taking the deposits
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Private Markets
Private markets are opposite to public markets. Securities transactions in private markets are completed without help of stock exchange, but between two parties directly. If some company wants to sale its share i
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Investment Advisor
An investment advisor is a person or a company that is registered with the Securities and Exchange Commission (SEC) and provides investment consultancies for remuneration. Investment advisor might provide consult
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Financial Leverage
A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
http://www.investingforbeginners.eu/financial_leverage
Treynor Ratio
Treynor ratio is another popular ratio that is used to measure the performance of investment portfolio. This ratio compares the excess return (above risk free return) of a portfolio to beta of that portfolio. Whi
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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
http://www.investingforbeginners.eu/stagflation
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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Earnings Per Share
Earnings per share (EPS) shows how much of net earnings are allocated to one common share. EPS might give some guidance about the value of the share for shareholder. Share price compared to EPS is equal to P/E ra
http://www.investingforbeginners.eu/earnings_per_share
ROE
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
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ROA
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
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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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M&A
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
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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
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Management Buyout
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
http://www.investingforbeginners.eu/management_buyout
Market Value
The meaning of market value depends on the context for which the term is applied. Generally, market value is a price at which the buyer would agree to buy and seller would agree to sell the object without any ext
http://www.investingforbeginners.eu/market_value
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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Performance Based Compensation
Performance based compensation is a form of compensation for the investment management work depending on quality of results. Performance base compensation is very common in investment management industry and help
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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
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Safe Investments
Safe investments are investments that contain low risk and considered to be safe. Safe investments do not necessary have to be 100% safe because there is no 100% safe investments in this world as this world isn&r
http://www.investingforbeginners.eu/safe_investments
CIS countries
CIS countries (commonwealth of Independent States) is by Russia led group of countries that earlier belonged to the Soviet Union. However, not all the countries of the past Soviet Union’s belong to CIS coun
http://www.investingforbeginners.eu/cis_countries
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
http://www.investingforbeginners.eu/best_stocks
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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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
http://www.investingforbeginners.eu/investment_management_system
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
http://www.investingforbeginners.eu/investor_education
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
http://www.investingforbeginners.eu/investment_management_salaries
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
http://www.investingforbeginners.eu/private_equity_investor
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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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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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).
http://www.investingforbeginners.eu/working_capital_calculation
Pro Forma
Pro forma is a type of financial statement that reflects financial information under some conditional basis. For example, if company has discontinued some activity, it may provide normal income statement and pro
http://www.investingforbeginners.eu/pro_forma
Cost of Debt
Cost of debt shows what the capital cost of the company for its debt capital is. Basically company’s capital consists of two parts: debt capital and equity capital. (A mixed capital like mezzanine financing
http://www.investingforbeginners.eu/cost_of_debt
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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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
http://www.investingforbeginners.eu/technical_analysis_of_stocks
Non-Performing Loan Ratio
Non-performing loan ratio measures the quality of the loan portfolio of the financial institution. This financial ratio compares non-performing loans to the total loan portfolio (loans are assets for the bank), a
http://www.investingforbeginners.eu/nonperforming_loan_ratio
Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.
http://www.investingforbeginners.eu/leverage
