Investing for Beginners .EU, investing In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.
Harold S. Geneen

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Investing in Gold (I)
I will not be the first, and probably also will not be the last, who spoke about the Gold Rush that shakes down the world for the last few years. Just in this time it is a little different than in the days when desired f

Investing in Gold (II)
The upper limit of the price is even more difficult. In our times gold is not founded in streams as was shown in the movies. Now gold is mined from the deep earth and separated from gold dust, metal ore or rock. In natur

Investing in Uncertain Period
Investing always has some uncertainty, but there are some situations when rise even more questions than usually. The current situation is just like one of those uncertain periods. When the economic cycle so inconclusive,

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

Investing in Russia
  Investing in Russia has gotten really widely promoted for the last period. I can remember the talks that stocks in Russia are the cheapest over the world for not less than year. The fact, that those stocks are st

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

What to Do With investments in Current Turbulence?
  The question is really not an easy one. The problem is that there is no left any good investments on this world. Let’s looks at the most topical investments classes:   Stocks. Even before

Investing in Land - Agricultural REITs
  Investing in land I have noticed an increased interest in agricultural land investments during the last period. And I can it understand completely. When stocks are so volatile and bonds may offer such low return

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

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

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

Foundation of the Europe’s 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.

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

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

Problems in Greece: Is It Going to End?
  Greece sounds like a curse for all investors and all other participants of the financial market. Yes, it is a small country compared to the global or European economy by the size of a GDP or other economical indi

How to Beat the Stock Market
  Investing is good, but the real challenge for every portfolio manager is to beat the stock market, or beat the market. Of course the term ‘market’ is not very exact. In reality to beat the market is t

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

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

What means long term in investing?
When I talk to non-professional investors, I often get surprised on their interpretation of ‘long-term investment’. Of course, everyone wants to enjoy their lives and to do it fast, while not many are ready t

Is the Bubble of Commodities Going Down?
  It can be said that commodity bubble already went down. The prices of the most commodities have slumped significantly during several last months. But was there really a bubble? Yes, the prices have

Putting investment Indicators from Economy to Good Use
Putting investment indicators from economy to good use People in various professions – journalists, stock market traders, businessmen, or individuals looking at investing in property – usually refer to inv

The Most Known Investors: Who are they?
  Regularly, a magazine is releasing its top 100 billionaires of the world. These are the investment giants and the masters of investing.  We all know that the investing world is a world of strategies and the

investment psychology gains momentum in contemporary business world
  Many individuals make rational investment decisions, but others are swayed by their emotions, serving as clear-cut illustration of just how the mindset and behavior can affect finances, and this is an important a

Learning the basic investment concept: a good start in investing
The first step in investing is learning the investment concept itself. It is very important that you understand the basic rules in investing in order for your investment to profit and to prevent losses. As we all know,

Investing in financial institutions: why and how?
  A banking expert had said that conducting a thorough study on the financial health of a bank or credit institution is very important in investing. Actually, this is the investor’s primary homework, and this

BRIC Countries
  BRIC countries are the largest emerging economies over the world. The first letters of every country make a name of B R I C and those countries are: Brazil (population - 192m) Russia (population - 143m) Indi

(Are you looking for investment definition?)   investments are instruments that allow us to receive a higher amount of money than was spent. If someone spends 10 euros or dollars and he knows that he will receive

  Commodities are goods or products that are traded in exchanges. Usually not all the goods that are produced are traded in exchange, only those which can be standardized enough to trade them at the identical price

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

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,

Derivative Financial Instruments Derivatives are so called because they are constructed from other traditional securities, and operate the rights to them. Apart from the fact that there are some basic derivative instrum

Investing 10
Read the Top 10 most important things that you should do and 10 things that you should do not during investment process.   Those are the most important investing rules and you have to know and remember them. Of co

Investing Top 10
  INVESTING 10 things that you should try to do:     Always have an investment strategy and follow it strictly. Set up an investment strategy (investing rules) even before beginning of investing: t

Investing 10 NOT
  INVESTING 10 things that you should try NOT to do:     Do not let the emotions to take over control. The investment market is always full of emotions. It is very important to maintain sanity and

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

Investing for Beginners
  Investing can seem a hard thing to do for beginners. But investing for beginners isn‘t any harder than other things in the beginning. Many processes can look difficult until you don‘t know what is hid

Investing for Retirement
Investing for retirement may be one of the most reasonable investment objectives. Sometimes, people invest so they can afford expensive things that they otherwise could not afford without investing. For example

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

Investing for Beginners - Trading Account
  a href="">Investing for beginners helps on many questions that every investor should solve in beginning of investment process or before it. One of such starting questions sho

investment in Cash
Bank (saving) Accounts, Deposits, Deposit Certificates, Treasure Bills, Money Market Funds When we are talking about investment, cash is not only the real paper (or metal) money that are held in the wallet or under the

investment in Mutual Funds
investment Funds (Collective investment) investment in mutual funds is one of the most popular types of investment. A mutual fund is just a large and well diversified investment portfolio of many securities, in which ca

investment in Commodities
investment in Oil, gold, Silver, Copper, Wheat  Commodities (raw materials) are indeed a tangible asset class, but it can be also assigned to financial investments, because in current days most investments in commo

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

Non-Financial investments
  When talks go about investing and investments everybody focuses on financial investments forgetting that spectrum of investments is much broader. investment in non-financial investments is also popular, especiall

investment in Property
investment in housing and commercial real estate I don‘t know why, but historically in most places almost every countryman becomes to a property investment expert, or at least he thinks he is. And perhaps that's q

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 Collectibles
  Many kinds of collectibles may also be considered as investments, but their value and benefits are much more elusive, than more serious traditional investment instruments. Works of art, stamps, antiques, coins,

Investing in Commodities Directly
investment in Oil, Gold, Silver Directly   Commodities has been already described as financial investment. It was assigned to financial investments because investors are investing in commodities not directly but w

Direct investment
investment in Tangible Assets   Direct investment are very wide issue to study, but it‘s not so close to traditional investing. Direct investments are more related with business development and would depend

investment in Futures
  Futures - derivative financial instruments, which can help to acquire some object in the future with pre-agreed price.In the case of futures, the seller undertakes to sell the object, while the buyer to purchase

investment in Forwards
Forwards – derivative financial instruments almost identical to the future contracts. This contract represents the parties committed to sell and buy the object at the predetermined time and price.Difference between

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 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,

investment in Index-Linked Bonds
  Index-linked bonds are also known as structured bonds. This product is more popular in immature investment markets, where investors are not sufficiently educated. Diversity of index-linked bonds can be very high,

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 Index Funds
  investment index funds are contrast to the actively managed funds. These funds do not try to exceed the benchmark, openly saying that just going to keep with it.And the serious advantage of them – applied f

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

investment in ETF Funds
ETF (Exchange-Traded Fund) investment in ETFs has become increasingly popular pushing out traditional investment funds. Few main factors added to popularity of this investment: availability of ETF's and low taxes compar

Strategy investment
  Strategy investment refers to an investment strategy, which should be wise chosen according to investing person character and market environment. Investing always has to be strategic and foresee possible future e

investment Strategy in Growth Stocks
  Investing in the rapidly growing companies has always attracted the attention of all worlds’ investors, in particular, at the market rise. The reason why investing in growth stocks - so popular is very simp

Value Investing
investment strategy - Value Investing   Investing in value stocks is fundamentally different from investing in the growth companies. Stocks of growth company will rise up impressively during bull market when value

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

Market Timing at Investing
Investing During Change of Economic Cycles - Market Timing investment Strategy  Market timing is capturing of investment price movements "waves" trying to sell high and buy cheap. Simple as that.  Still it onl

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

investment Objectives for Beginners
The full investment objectives for beginners are very individual parameters. They were already mentioned briefly in article about benefits of investment. However, the basic investment objective is one - to make capital w

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

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 Strategy by Age
  It is very popular to allocate asset classes in investment portfolio according to investor’s age. And it has some reasonable justification: when investor’s age is changing – his risk tolerance a

investment Book:
  Investing for Beginners Exposed: Or What investment Consultants Hide from You   Rokas Lukosius (Author of the book and this website)   No matter whether you are a seasoned inv

Online Investing
Few decades ago all the investors was acquiring stocks calling to broker by phone or using some other way to contact him. However, computerization of the world has changed investing significantly. Online investing became

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.

investments in Ultra ETF
  Ultra ETF by most characteristics is similar to normal ETF but there is one main difference: if Ultra ETF follows the same index as normal ETF does, it makes it twice. For example, if normal ETF follows index tha

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

investment in Ultra Short ETF
  investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed b

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

investment Adviser
  investment advisor/adviser does the same jog as investment consultant does. But investment advisor is a term used by the Securities and Exchange Commission (SEC). So usually investment advisor refers to a company

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

  Speculation is an investment action made under intentions to earn large profits in short term. Usually such actions are very risky and lays somewhere between investing and gambling. It is hard to say where exactl

investment Definition
  investment definition may have two meanings:   1) An investment as a process (investing) when tangible or financial assets are acquired on purpose to earn more money (or other material benefits) than was s

Investing Definition
  Investing definition is similar to investment definition. Shortly, it is an acquisition of asset made on purpose to profit from it over time.   Investing is a process that may last from very short period a

investment Policy
  An investment policy is an investment philosophy, main principles to be used of an investor. investment policy may be written or not, and is needed for the investor to maintain attitudes during market turmoil. In

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 Techniques
  investment techniques are some combination of investment strategies and investment tactics. investment techniques usually are middle term oriented procedures that help to reach some predetermined result. It may i

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

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

investment Terms
  investment terms are most popular phrases and word combinations used in investment process. Most of the investment and financial terms you can find on investment dictionary.

Financial Market
  A financial market is a term widely used to describe virtual place/mechanism that allows meeting the sellers and buyers of the investment and other financial products. In current times buyers and sellers do not m

OTC Market
  OTC (Over-The-Counter) market is decentralized market where financial assets are traded. Decentralized market means a contrast to the exchange trading. OTC market doesn’t have one place (no physical, no vir

Stock Market
  A stock market represents all the stocks (shares) that are issued and traded or just held. Stock market (equity market) is a part of a whole financial market but more extensive term than Stock Exchange. Stock Exc

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

Derivative Market
  A derivative market is a totality of derivatives (futures, forwards, options, swaps and other) that have been created over the world. Some of the derivatives are standardized and are traded on Exchanges whil

Commodity Market
  A commodity market is one of the main financial market parts. Commodities are basic resources that are extracted from earth or are the result from agriculture activities. Some commodities, like cheese are already

FOREX Market
  FOREX market (foreign exchange market) is a global network of trading in different currencies. It is the most liquid financial market with huge turnovers continuously without breaks. Lot commercial banks, central

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

Bull Market
  A bull market is a market trend when investment market is increasing over longer period and is believed to increase in the future. Bull market is a well known term among investors and is opposite to bear mar

Bear Market
  A bear market is a market trend when investment market is decreasing over longer period and is believed to decrease in the future. Bear market is a well known term in the investment world and is opposite to bull

  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

  An investor is an individual or corporate unit that invests in any class of investments on purpose to earn some return from invested capital. There may be more criteria to distinguish very small investments

Share Investor
  A share investor is an investor who invests in shares (stocks) but not the other investments. If investor invests in different asset classes he is a regular investor. If investor is specializing in shares he must

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

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.

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

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

Stock Book Value
  Stock book value is a book value of one share. It is calculated dividing shareholders equity by share number and gives some very approximate investing guidance about the value of the stock. It is popular to look

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

Stock Market Crash
  A stock market crash is a investing term used to describe fast and sharp decrease of all or almost all stock prices on the exchange. However, there is no exact definition how long and how strong market fall shoul

  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 Yield
  A dividend yield is a ratio that shows how much investor gets dividends from the stock compared to its price. It is calculated dividing dividend per share by the share price.    Dividend yield is impo

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

Dividend Policy
  A dividend policy is a company’s written practice that describes dividend payments scale over time. Dividend policy may be as short as target dividend payout ratio or also include some reaction to a ch

Dividend Stocks
  Dividend stocks are called stocks that have high dividend yield and high dividend payout ratio. Normal dividend stocks should have stable 6%-10% dividend yield and possible 60-100% dividend payout ratio. High div

Initial Public Offering (IPO)
  An initial public offering (IPO) is a first introduce of company’s shares to the stock market. However, during initial public offering shares are sold not on the stock exchange but on network of clients by

  A greenshoe is an option to sell or buy shares during initial public offering IPO. This option is agreed between the company that goes public and the IPO organizer (some corporate finance firm).   The

  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

investment Tactics
  investment tactics are the rules for investment actions that help to react on market conditions and achieve more efficient results. investment tactics deal with lower scale questions than investment strategy, whi

Market Capitalization
  Market capitalization (market cap) is a company’s value (price) on the stock exchange. Market capitalization is calculated by multiplying the outstanding share number by the last share price on the exchange

Asset Management
  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,

Stock Exchange
  A stock exchange is an operator/company that takes bids from the sellers and buyers and executes transactions if conditions allow it. Usually stock exchanges offer trading not only for stocks but also for other f

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,

Market Timing
  Market timing is investor's actions when investments are switched between asset classes and may be a part of investment strategy. For example, if investor sees that stocks are very high and economical downturn is

Global investment
  Global investment is investment that includes investments from different world’s regions. investment can be local, regional or global. Local investment would focus on one country or state market, when regio

International investment
  International investment is investment that includes investments from different countries. If investor acquires investments in several countries, we could call him international investor. If investment portfolio

Diversified investments
  Diversified investments are investments that are well diversified, which should include regional diversification, allocation between asset classes, sectors, maturity, denomination of currencies and other characte

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

  A diversification is an investment technique or a part of an investment strategy, which is used to reduce the investment risk of the portfolio, including in it larger number of different securities or other inves

Fair investment
  Fair investment mostly refers to a term true investment used by Benjamin Graham. Also there are companies that use fair investment term in its name. Fair investment words give an impression, that clients will be

True investment
  True investment is a term used by Benjamin Graham to describe an investment that fits all his criteria of investment philosophy (policy). Later this term was used by Warren Buffet, but he followed Benjamin’

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

Real Estate investment Group
  Real estate investment group is mostly similar to the capital investment group. The main difference is that real estate investment group concentrates its investments on real estate property, when capital investme

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

Real Estate investment Trust (REIT)
  Real estate investment trust (REIT) is a corporate entity that invests exceptionally in to real estate sector. Usually securities of REIT’s are traded on stock exchange and every investor can easily acquire

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

Equity Fund
  An equity fund is a mutual fund that is investing in equity (stocks). Equity fund can be actively managed, index fund, listed index fund (ETF) and can invest in some specific sectors or regions, or can invest glo

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

  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

  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

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

Institutional Investor
  An institutional investor is an investor that is a corporation/institution. Institutional investors have high impact to investment markets and sometimes decisions of most known institutional investment manag

Retail Investor
  A retail investor is a small investor, which normally is an individual. Most of the investors in financial markets are retail investors, but retail investor makes an investments in much smaller amounts than

Large Cap Stocks
  Large cap stocks are stocks of those companies that have the highest market capitalization. All the stocks can be classified to large cap, mid cap and small cap (if ignoring modern classifications that include mo

Small Cap Stocks
  Small cap stocks are stocks of lower market capitalization. All stocks may be classified to large cap, mid cap and small cap (if ignoring mega, nano and other modern classification caps). There is no united class

Blue Chip Stocks
  Blue chip stocks are stocks of the biggest large cap companies. Blue chip stocks usually are safer than average investment in stocks, have stable cash flow and pay stable dividends according dividend policy. Blue

investment Report
  An investment report is a for investors prepared document on purpose to provide useful and objective information that would help to make an investment decision.     investment report may have many for

Hedge (Hedging)
  Hedge (hedging) is protection of investment portfolio against fluctuations using financial instruments. Hedge is very popular at investment theory, but not so popular at investment practice. In theory everything

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

investment Banking Services
investment banking services are corporate finance services provided by investment banks. investment banking includes such services like capital rising, securities issuing, IPO’s running, mergers and acquisitions

Brokerage Company
  A Brokerage Company is a financial institution that has a license to provide intermediary services for a securities trading to the clients. Every retail client cannot by securities on stock exchange by himself be

Credit Union
  A credit union is a financial intermediary institution controlled by its members, who brings deposits to the union and become a creditors of the institution. The principal services of the credit union are th

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

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

Insurance Company
  An insurance company may provide insurance services of two different directions: life insurance and non-life insurance. Non-life insurance is not very closely related (if to mention own insurance company’s

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

Sole Proprietorship
  A sole proprietorship is form of business that is owned by one individual. The main advantage of the sole proprietorship is the simplicity of starting business in this form. No weighty investments are needed. The

  A partnership is a business form created by not less than two parties and is non corporate business form.  Partnership may have different forms and usually is made by contract. Most often in current days par

  A corporation is a legal business form that is dominating over capital world. Most of the biggest businesses in the world are working under corporation form. Capital raising, transferring of shares, mergers &

Limited Liability Company
  A limited liability company (LLC) is a business form that has the same advantage like corporations have: a limited liability. Owners of LLC risk only their capital that was invested in company. Limited liability

Money Market
  A money market is the market, in which money market investments are traded. Such money market investments can be deposits certificates, bills or other short term high grade fixed income securities.

Capital Markets
  Capital markets are the markets, in which stocks and medium to long term bonds are traded. Could be said that capital markets include stock markets and bond markets and are a part of financial markets.   C

Mortgage Markets
  Mortgage markets are markets, in which credits, that include pledged real estate property, are created and traded. Usually in mortgage markets main players are financial institutions: retail banks sell such mortg

Primary Markets
  Primary markets are the markets, in which new capital investments are raised. The perfect example of primary market is an IPO, but even if it is not the first issue of securities for the company, it still counts

Secondary Markets
  Secondary markets are markets, in which securities are traded, but not acquired directly from the issuers. This is why secondary markets differ from primary markets, where securities are bought directly from issu

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

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

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

Penny Stocks
  Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc

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

investment Consultant
  An investment consultant is a job position in financial companies. Main functions of investment consultant: Help private investors to make a proper investment strategy according to investors risk tolerance. A

Growth Stocks
  Growth stocks are stocks of companies which earnings per share grow faster than average on the market. Such is theory, but if look in practical side, earnings grow faster most of the times only when economical cy

Dividend Growth Stocks
  Dividend growth stocks are stocks that are hard to find in reality. Because the stock must be either value stock (large dividend payments) either growth stock (small dividend payments) or either something in betw

Value Stocks
  Value stocks are opposite to growth stocks and attract investors not by growth perspectives but by stable cash and dividend flow. Market ratios (P/E, P/B and other) of value stocks are low and together with high

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

Value Penny Stocks
  Value penny stocks are stocks that have characteristics of both: value stock and penny stock. investment in value penny stocks isn’t very popular, because stock investors who seek for safety invest in norma

investment Market
  An investment market is a part of a financial market and represents all investments that were issued by corporations, governments or other entities. All the trades made by retail and institutional investors can b

Operating Leverage
  An operating leverage is a company’s EBIT (earnings before taxes and financial operations) sensitivity to changes of sales. As the sensitivity is measured to operating income (close to EBIT), the

Preemptive Right
  A preemptive right is a right of company’s shareholders to acquire more shares in case of new share issue proportionally. Usually such right is described in shareholder’s agreement.   Such righ

Mortgage Bond
  A mortgage bond is a bond that has some collateral to make the security safer as investment. In case of bond default the creditor gets back his money or part of it from the sale of the assets that were pledged. U

Diversifiable Risk
  A diversifiable risk is the risk that can be reduced by increasing number of investments in the investment portfolio. For example, company’s risk can easy diversifiable by choosing more companies. Even coun

Market Risk
  A market risk is a systematical risk that cannot be diversified. There are some risk factors that can make effect on the whole market: economical cycles, nature disasters, wars; and such are not diversifiable ris

investment Strategies
  investment (investing) strategy – often discussed by both amateur and professional investors, but in fact very rarely encountered. Amateurs usually imagine that they has an investment strategy only after th

Net Present Value (NPV)
  Net present value (NPV) is a value calculated by discounting all future net cash flows (net cash flow is calculated taking all the forecasted future income and subtracting from them forecasted expenses in every p

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

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

investment Growth
  An investment growth may have two different meanings: Most probable it refers to growth investing. It is an investment strategy or part of it, which concentrates on investments in stocks that grow faster than

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

Corporate investment
  A corporate investment is investment made by one corporation into another. All corporations try to keep the growth of the business. Some do it only organically, while others also proceeds mergers & acquisitio

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

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

Jensen’s Alpha
  Jensen’s alpha is used to measure the performance of an investment portfolio. The higher ratio means better performance of portfolio manager. Basically, this Jensen’s ratio shows the above market port

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

Sharpe Ratio
  Sharpe ratio measures the above risk free performance of investment portfolio in relation to its risk. This ratio was developed by William F. Sharpe which introduced the ratio in 1966. Now Sharpe ratio is the mos

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 investment
  Foreign investment means investment that is made by foreign capital. For example if you would invest in other country than you live (you are resident), then it would be a foreign investment. Also it can work othe

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

Return on investment
  Return on investment (ROI) is a percentage that shows profitability of an investment or investment portfolio. Return on investment calculation:   CALCULATION:   Return on investment = net in

investment Finance
  investment finance is finance that is related to investment. investment market is a part of financial market, so we can say that investment is a part of finance.    investment finance specializes on f

  Repo (repurchase agreement) is a contract between the investor, who borrows money, and the lender who lends money and takes (buys and resells) securities for collateral, in case if the investor will default to re

Margin Trading
  Margin trading is trading in securities when part of the investment portfolio is financed by borrowed money (the other part by your own capital). For example, you have investment portfolio of value $20k, end you

  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

  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

  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

  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

Inflation Linked Bonds
  Inflation linked bonds (or inflation indexed bonds) are bonds that have their principal linked to inflation, which means the value of the bond principal increases together with inflation. Such bonds are offering

Valuation Multiples
  Valuation multiples are stock ratios that include in the calculation share price and show whether stock is cheap or expensive compared to similar stocks.     Valuation multiples (or just multiples) ar

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

PEG Ratio
Price-to-Earnings to Growth Ratio   PEG ratio is quiet popular among retail investors, however professionals do not use it often because of this ratio subjectivity. PEG ratio shows how expensive is stock compared

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

P/NAV Ratio
Price to Net Asset Value    P/NAV ratio shows how expensive share is compared to its NAV (net asset value). This ratio is very similar to P/B ratio but in this case market values (not book values) are used. M

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

P/S Ratio
Price to Sales Ratio   P/S ratio shows the price of the stock compared to its sales. This ratio historically was quiet popular, but now EV/S ratio, which is more correct methodically, is used.

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

Cost of Equity
  Cost of equity is the rate of return that is required by equity owners from their investment. Of course, requirements of the shareholders have to be real and meet market conditions as well. Basically cost of equi

EBIT Multiple   EV/EBIT ratio is identical to EV/EBITDA ratio. The only difference is that EBIT instead of EBITDA is used.    EBITDA differs from EBIT at depreciation and amortization (DA). So EBITDA i

Stock Valuation
  Stock valuation is very important part of investing in stocks, and this part is the most time consuming and knowledge requiring. Stock valuation is a necessary and main step at stock picking process. The only way

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

DCF Valuation
Discounted Cash Flow Analysis   DCF valuation might be applied to any asset that generates positive free cash flow or is expected to generate that cash flow in the future. DCF valuation might be directly applied t

Replacement Cost Valuation
  Replacement cost valuation method is not very popular at stock valuation. Most of the investors are picking stocks with help of relative valuation or DCF valuation. Only when those two methods aren’t possib

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

  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

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

Discounted Cash Flow
  Discounted cash flow (DCF) is forecasted net cash flow of the company or other asset that is recalculated (discounted) to its current value. Discounted cash flow is important for investment assessing and mostly i

Depository Receipts
  Depository receipts are certificates that makes easier to invest in foreign stocks. Depository receipts lowers administration costs for foreign investment and makes foreign investments more trustful for local inv

Power of Compounding
  Power of compounding (compound interest) is a known description for fast increase in value when investment brings steady interests and interests are reinvested. The principle of the growth is the geometric progre

  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

  Warrants are derivative securities that give the right to acquire shares of the issuer at the predetermined price and time. From the holders position there is no difference between warrant and call option. The ma

Hedge Funds
  Hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu

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

Market Making
  Market making is a service provided by brokerage company to some listed company to increase liquidity in stock trading on stock exchange. Usually brokerage company gets paid for this service and has to maintain s

  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

Conflict of Interest
  A conflict of interest is very sensitive problem at financial intermediaries when interests of different groups (owners, investors, employees or other) cross each other. All employees in investment market should

Political Risk
  A political risk is related to political decisions and political environment development, and is one of the main risks when investing in emerging markets. Developed markets also contain political risk, but there

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

EBITDA Coverage Ratio
  EBITDA coverage ratio (also called EBITDA to Interest Coverage Ratio) shows company’s capability to deal with its financial leverage. If this ratio is too low, that may show company is in trouble and may ha

Profitability Margins
  Profitability margins are ratios that show how profitable company’s activity is. There may be many kinds of profitability margins. Normally profitability means some kind of profit divided by revenue. But al

  EBITDA margin is a profitability margin that shows how much of EBITDA earns company’s revenue relatively. The EBITDA margin is the best for profitability comparison of the companies if you want to measure e

Profit Margin
  Profit margin normally refers to net profit margin, which is net profit divided by sales. But one should remember that profit might be of different kinds (net profit, pretax profit, EBIT, EBITDA and gross profit)

  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

Margin Call
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth?     Margin call is a fabulous term which carries some mysticism. However, there is nothing

The Pros and Cons of Buying on Margin
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth?     The opportunity provided by buying on margin i

Psychology of Buying on Margin: Is it worth?
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons of Buying on Margin Psychology of Buying on Margin: Is it worth?     For the conclusion I would like to say that bu

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

Margin Calls
Margin call is a call by margin trading service provider to an investor who is buying on margin. Such calls are provided when assets (collateral) in the investment portfolio are losing value and reach the margin. Margin

Financial investment
  Financial investment is any financial asset that should provide a return for investor. Financial asset is an asset that doesn’t have tangible form and has some financial obligations to its owner. All securi

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

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

Equity Trading
  Equity trading is a process when equities are bought and sold through a trading platform. Equity trading is a synonym for trading stocks as equity in investment field is represented by stocks. Investing in equity

  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

  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

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

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

  An underwriter is a company (normally an investment bank) that organizes the selling of new security issues for the corporations. It is a financial intermediary that buys new issues of securities (shares or bonds

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

Employee Stock Options
  Employee stock options are options that are given to employees as part of motivation package and gives an opportunity for employees to acquire shares of the company in the future at a lower price. In their meanin

Go Public
  Go public means to get company’s shares listed on the stock exchange; the process also called floatation. To go public, company has to hire some investment banking firm that would help to execute an IPO (in

  Floatation means going public through an IPO. If companies go public they have to get listed their shares on some stock exchange. Each company’s may choose any stock exchange, but normally smaller companies

  Bearish is attitude of an investor if investor expects market to go down in the near future. Most often term bearish is applied for stock investments when is believed that stocks are going to decrease in value. T

  Bullish is an investor's attitude when he believes that the investment market is going to rise in the near future. Most of the times this term is applied for investments in stocks, when is believed that stock mar

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

Pig (investor)
  A pig is an animal known by every farmer. However, at investing pigs are also popular yet the meaning is different.   In investment world are two kinds of animals mentioned the most: bulls and bears. Bulli

Risk Tolerance
  Risk tolerance is a characteristic that describes the investor and his ability to withstand losses from investments. The higher risk tolerance of investor the more losses he/she may handle.    Investm

Risk Averse
  Risk averse is a characteristic of an investor who is avoiding risk. The more investor is avoiding the risk the more is he risk averse. Almost all the investors (as people are too) are more or less risk averse an

Growth Funds
  Growth funds are investment (mutual) funds that concentrate on investing in stocks of fast growing companies. Growth funds can be passively managed or actively-managed funds but all growth funds are riskier than

No-Load Fund
  No-Load fund is a fund that does not have a load fee which is paid by investor that acquires the mutual fund. There are two types of load fees: front-end load and back-end load, and ‘no-load fund’ sho

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

Balanced Fund
  A balanced fund is a mutual (investment) fund that invests in different asset classes: stocks, bonds and money market investments according to the fund’s investment strategy.    It may

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

Stock Option
  A stock option is derivative financial instrument that gives the holder of the option the right to buy some particular stock at the predetermined strike price till the end of the option (or at the end, depending

Financial Assets
  There are two main investment (asset) classes: financial assets and non-financial (tangible) assets. Both of them may have similar characteristics as yielding or increasing in value over long period; but financia

Index Options
  Index options are derivative financial instruments that provide for the buyer of the option the right (possibility) to make profits from index value changes. It may be a good investing instrument for the investor

High Return investments
  High-return investments (or high-yield investments) are investments that can provide the higher return than average investments, and of course such investments are riskier. The reality is that people have differe

Day Trader
  A day trader is a speculator that trades in stocks, currencies or some other securities within a very short period. Most of the trades are made by the trading in one day period. Day trader is a pure speculator, e

Stock Trader
  A stock trader is a speculator that is trying to make profits from quick changes in value of stocks or other securities that he trades. Stock trader have few differences from normal investor and the main differen

investment Bubble
  investment bubble is a jump in price of particular investment when price starts increasing faster and faster as long as the price reaches its peak and falls down to a similar to previous level, if there are no ot

Passive Income
  Passive income is an earnings that person receives consistently for a long term from some stable sources. One and most probable source of passive income may be income from investment.    For example,

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

Best investments
  Best investments are always wanted, but the reality is that there are no best investments for everyone. And if such investment would exist then those investments would become an investment bubble and would not st

investment Websites
  investment websites are websites that provide useful information about investing and investments or websites that allow you to open a trading platform and trade some investments online.    There are m

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

Money Investing
  Money investing is a hard task for beginners at investing. However, it is not a rocket science and can be learned by anyone who is really attracted to finances and have enough of time for it. Money is equal to ca

Short-Term investments
  Short term investments are investments that are suited for short term investing. There can be different understanding of short term investing but it is normal that investments for period till one year can be cons

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

Personal Investing
  Personal investing is investing when investments are made by an individual but not a corporation which is corporate investment.   Personal investing is a part of personal finance that is responsible for pe

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

Valuation Methods
  There are three main valuation methods used for business valuation or stock valuation:  Relative valuation is very easy to use and is the fastest method. That is why this method is so popular among fina

Valuation Consultants
  Valuation consultants are professionals that know everything about the value of an asset or business. The real market value consists of many parts and all of them may have critical importance to the value. Only e

Finance Advisor
  A finance advisor is a job title for a person who provides financial consultations for the clients. Financial advisor also includes functions of an investment advisor but may include more financial advisory funct

Stock Market Trading
  Stock market trading is similar to stock market investing; however, it is not exactly the same. At first, stock trading refers to a stock trader who trades stocks very often and do not invests for a long term. Lo

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

Stock Market Investing
  Stock market investing is investing in equity securities – stocks. Stock market investing differs from stock market trading because has longer term approach.    Stock markets cover stocks that a

Good Stocks
  Good stocks are those stocks that meet’s investors risk tolerance and investment strategy. Also good stocks should have upside potential to increase in value in the future. If stocks are already priced high

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

Buying Stocks
  Buying stocks is an easy thing. Of course, it is harder to pick good stocks. Every person, that has some capital, can open a trading platform and buy stocks, but the goal is not only to buy the stocks but to make

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

Trading Volume
  Trading volume is an amount of securities that was traded in the market over some period. Usually volume is measured for a trading session (day), week or month but other periods also may be used. Higher number of

Discount Broker
  A discount broker is a brokerage company that acts as an intermediary for securities trading and offers is used to offer its services for a lower commission fees. At the same time discount brokers provide less co

  (1) Market liquidity is a characteristic of a security or other traded investment that shows how easy it is convertible in to cash at a market value. Usually when investor decides to sell some investment and

  A broker is an intermediary that helps for retail or other investors buy their investments. Broker can be as a person (job title) or a brokerage company that acts as a financial intermediary between the seller an

Brokerage Account
  Brokerage account is an account provided to investor by a brokerage company or an investment bank. Brokerage account has changed during computerization and now almost all brokerage accounts have electronic interf

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

Bid-Ask Spread
  Bid-ask spread is the difference between the bid price and the ask price, or in other words it is a difference between the best offered price of a seller and the best given price by a buyer for a particular secur

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

Smart Investors
  Smart investors can be called investors that do smart decisions at investing process. Of course it is hard to tell what is really smart and what is not. The true is that investing is not about being smart because

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

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

Business Investor
  A business investor can indicate several types of investors. (1) Business investor may be an investor that is a firm and invests in different investments, or (2) investments that are made by any investor in to co

Undervalued Stocks
  Undervalued stocks are called those stocks that are believed to have higher target price than their stock price on the exchange. The higher is the difference the more stock is undervalued. If stock price in the m

Private Investors
  Private investors are individuals that are investing in to some assets for investment purpose. (1) There are two main types of investors: private investors and institutional investors (business investor). Also th

Small Business Investors
  Small business investors are private investors or business investors that are investing in to small businesses. Small businesses are also in need for capital and the best source for that capital might a bank beca

Angel Investors
  Angel investors are investors that have capital for investments and are investing in young companies that are in start-up stage and are needed for capital to exploit growth potential. The source of funding from a

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

Area Investors
Area investors are local business investors that are investing in their local living area. Area investing has some advantages. The main advantage is that local are investors know the nuances of the place and can be sure

Target Price
  Target price is a calculated price that should represent the market value of the stock and also can be called target value. Target price normally is calculated by analysts of investment banks of brokerage compani

Overvalued Stocks
  Overvalued stocks are those stocks that cost in stock market more than their target price is. Target price of the stock is calculated market value of a stock using stock valuation methods. The most popular method

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

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

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

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

Cash Flow Statement
  Cash flow statement is one of the three main financial statements (others are income statement and balance sheet). If income statement exposes income that was received according accounting standards, cash flow st

  Earnings are calculated gains of the company and should represent the profit of that business. There are several types of earnings:   Retained earnings are equal to net profit less dividends. Net earnin

  Profit is a term used in various finance fields and may have many meanings. Basically profit is the positive difference between the income and costs. If costs are higher than income, then instead of profit loss w

  The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu

Net Income
  Net income (net profit) is a financial indicator of the company that shows the real profitability of the business in accordance to its capital structure. Net income is equal to all revenue and gains less all expe

  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

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

  Return analysis is different from profitability analysis because usually return is measured as a profitability of the assets, investments, capital or other similar asset group but not as a profitability of the re

Debt to Equity
  Debt to equity ratio (also known as D/E ratio, Debt/Equity) measures how big is company’s debt compared to its book capital (equity). The higher is the debt to equity ratio the higher is the insolvency risk

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

Financial Forecasting
  Financial forecasting is a part of financial planning and also a part of a DCF valuation. But usually financial planning covers only a period of year or two while financial forecasting regularly covers about five

Asset Turnover Ratio
  Asset turnover ratio compares company’s sales and assets in order to identify the efficiency of assets used in the business. In simple words, it shows show much of sales are generated by company’s ass

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).

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

investment Formula
  If you are looking for some perfect investment formula, you should get disappointed because there is no secret investment formula that would be profitable for every investor. If there would be such perfect formul

Investing Formula
  Still looking for some magic investing formula? Well, you will be the lucky one if you will find it, but many investors are just failing in a way of finding that perfect investment formula. Maybe you can find it,

  Opex (operating expense) are expenses of the business and are related to the operational activity of the company.  Basically, every company has few types of expenses: COGS (cost of sales) include costs t

  Capex (capital expenditure) is company’s investment in long-term assets that are needed to continue the business or for future’s growth. The perfect examples of capital expenditure can be an acquisiti

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

  EBITA (earnings before interest, taxes and amortization) is a financial indicator that shows company’s earnings which are equal to pretax profit plus corporate tax and amortization.    EBITA is

Cash investments
  Cash investments are the safest investments over short-term period. Such investments include saving accounts, certificates of deposit, money market instruments (treasury bills, money market funds). The main crite

Asset Performance
  Asset performance is a return of an asset over some period. Usually performance is measured on annual basis. But basically performance of any asset depends on its riskiness and the period (most of the stocks and

  Sector is a segment of an economy that distinguishes oneself by some characteristics that belongs to that segment. There are a lot of different classifications used in practice to classify different business segm

Economic Cycle
  What is economical cycle? An economic cycle means the repeated changes of the economical trends. While during very long economical period economy always has up-trend because of technological evolution and increa

Cost of Capital
  Capital of every company consists of two parts: equity capital and debt capital (only if company has no financial debts it has only equity capital). Both these capital sources have their costs and this is cost of

  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,

  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

Profit Taking
  Profit taking is the selling of stocks or other investments after sharp rise in prices. Investors are say that they ‘took profit’ when they sold their stocks after good rise when they seceded with sto

Real Estate Flipping
  Real estate flipping always gets popular when economical cycle is increasing. It usually coincides with the period of real estate prices boom. It looks very simple when real estate prices are raising and some peo

Insider Trading
  Insider trading is an illegal activity in trading stocks when a stock trader is using information that was not officially disclosed. Such information is called inside information. Such trading is called ‘in

Intangible Assets
  All assets can be classified to three main groups: tangible assets, financial assets and intangible assets. Intangible assets are those assets that aren’t financial and don’t have a real physical form

Tangible Assets
  Basically all assets can be divided in tangible assets or non-tangible assets (intangible and financial). Tangible assets are those assets that exist physically and the value of them depends on their physical con

Rate of Return
  A rate of return is a percentage that shows what is the profit or loss gained on some investment on annual basis. There are many ways to calculate the rate of return including internal rate of return, arithmetica

Return on Invested Capital
  Return on invested capital (ROIC) or also called return on capital is a financial ratio employed to measure nominal company’s return that is earned by capital invested in operating asset. Basically return o

  CFROI or cash flow return on investment is a rate of return that measures the performance of corporation based on its cash flow generation ability. CFROI is not very popular but is still used by some companies an

Financial Ratios
  Financial ratios are ratios that are used in financial analysis or in other words that are using financial data of a company. Such financial data usually is found in financial statements (income statement, balanc

Fixed Asset Turnover
  Fixed asset turnover ratio is a financial ratio that measures how much of sales are created by company’s property, plant and equipment. The ‘higher asset turnover’ is the better, because it mean

Fundamental Analysis
  Fundamental analysis is the type of financial analysis that relies on company’s fundamentals. Those fundamentals depend on the target of the analysis. For example, fundamental analysis of stock depends on i

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

Capital Employed
  Capital employed is a value of capital investments in a company. Basically, the capital of each company can be classified in these types of capital: Equity capital  Debt capital Working capital

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

Return on Capital Employed
  Return on capital employed ratio (ROCE) measures company’s return compared to its employed capital. Return in this case is some kind of profit (mostly EBIT or NOPAT) and the capital employed means equity ca

CAGR Formula
  CAGR formula is used to calculate 'compound annual growth rate':   CAGR = (Value at the end / Value at the beginning) ^ (1 / Years) - 1 * Can be multiplied by 100%. Where: Value at t

  CAGR is used to measure return and means compound annual growth rate. This type of return measurement is very popular in investment finance because interest also earns interest and power of compounding cannot be

  (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

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.

Market Risk Premium
(Equity Risk Premium)   Every investment carries some level of risk and some level of potential return. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq

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

Front-End Load
  Front-end load (sales fee) was a very popular load fee in investment market for decades. This fee is paid by investors during the acquisition of mutual fund units and is some percentage (0%-5%) on the invested am

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

About Us
  The website INVESTING FOR BEGINNERS EU was created in order to educate investors and other participants of the financial markets in accordance to the highest standards.    investment process is not re

Internal Rate of Return
  An internal rate of return (IRR) is a ratio used very often to measure a profitability of some investment project. IRR is determined as a discount rate when NPV of the project is equal to zero. If IRR is higher t

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