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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
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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
US Debt Relief
Let me give you few facts at first that we would now what are we talking about: The General government gross debt in percent of GDP in the United States was reported at 83.21 percent of GDP in 2009 (90% of GDP
http://www.investingforbeginners.eu/us_debt_relief-p0-i13
Where Are the Investment Markets Moving Now?
Some of the market participants call the current situation a “crisis” others are starting to be convinced that we are in a bear market. While others just don’t know how to call it. Well, I call
http://www.investingforbeginners.eu/where_are_the_investment_markets_moving_now-p0-i14
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
http://www.investingforbeginners.eu/baltic_investment-p0-i21
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
Investment in Swaps
Swaps - an investment tool used rarely at investing process. Typically, these contracts are used by financial institutions or other big companies in order to exchange cash flows in different currencies. In fact,
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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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Spot Market
Spot markets are a contrast to the futures markets because in spot market transaction are completed immediately and in cash (or bank transfer). The spot market represents the real current prices on the market of
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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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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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Risk-Free Interest Rate
A risk-free interest rate is rate of interests that would be paid by fixed income securities that contains no risk at all. For a very long time short-term US Treasury securities was used to d
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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
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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
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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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Hyperinflation
Hyperinflation is an economical situation when inflation is extremely high. Regularly it is a result of inflation spiral and some disasters (as war), and is very dangerous for the economy. Just try imagine your b
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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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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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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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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
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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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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Floating Exchange Rate
Floating exchange rate is a regime of a currency which sets currency ratio naturally according to demand and supply in the market. Most of the biggest currencies (EUR, USD, GBP, JPY and others) are floating curre
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Pegged Exchange Rate
Pegged (fixed) exchange rate is a regime of currency which value is related to some other stronger currency or a portfolio of currencies. Many smaller emerging countries have their currencies pegged to USD or to
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Purchasing Power Parity
Purchasing power parity (PPP) is economical term used to compare purchasing power of the same currency (USD) in different countries. The principle is that for the same $1000 you may buy different a
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Eurobonds
Eurobonds are bonds that are issued in other that home currency. It does not mean that Eurobonds have to be denominated in Euros. Actually, most of the Eurobonds that are issued in Europe are in denominated in US
http://www.investingforbeginners.eu/eurobonds
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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Investment Information
Investment information is crucial to make good investment decisions. It is information that may help to make good investment solution and would help to reach for better investment results. The deta
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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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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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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
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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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Cost of Debt Calculation
The cost of debt is easy to calculate if they are required data. Actually, there are few methods to get the cost of debt, but some of those are more accurate some less. If you want that your result would be more
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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.
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