Finance posts
3 March 2021financeFinance is a broad term encompassing many things about the financial management, development, and measurement of financial resources and investments. In particular, it concerns the issues of why and how an individual, firm or government get the funds necessary to satisfy their economic objectives-called capital in the business context. The key factors of analysis are time preference, interest rates, risk, and flexibility. These in turn depend on the objectives of the individual or group making the investment decisions, as well as the characteristics of the instruments involved. The three areas of Finance are Law, Statistics and Business. Finance focuses on budgeting, borrowing and issuing securities. Finance can be of several types such as personal, business or government finance, but finance mostly deals with banks and other financial institutions, including central banks. A bank makes loans to other banks and then lends its own funds to businesses, individuals and governments. Finance is also involved in other aspects of banking, such as purchasing bank assets and recovering them for customers. This involves purchasing the assets of other banks, borrowing funds from banks and issuing commercial paper. Finance has many aspects, which make up a comprehensive system of financial instruments and concepts. As an example, consider the difference between savings, income, lending, purchasing and maturity. In fact, even the concept of finance is so broad that it includes such diverse areas as market economics, corporate finance, fiscal policy, international trade, and housing finance just to name a few. [...]
3 March 2021financeFinance is a broad term encompassing a variety of things about the study, development, management and allocation of funds. In particular, it concerns the questions of who, what, when and where an individual, business or governmental agency get the funds required for their activities and how they use those funds. The field is also concerned with the behavior of the market participants as well as the effects of changes in supply or demand on the prices or value of goods or services. Changes in financing methods and interest rates are among the many topics that Finance students learn about. Some of the topics that Finance students learn about include: public finance, private finance, venture capital, insurance and pension financing, bank lending, business credit, commodity markets, international finance, corporate law, and banking regulations. The first two topics, public finance and private finance, pertain to how the government funds its activities; the latter topic, however, takes into account the role of private organizations, corporations and insurance companies in public funding. Insurance companies, for instance, may lend their own funds or by funds from the government. Venture capital refers to private investors providing start-up capital to small businesses. Bank lending involves loans from the Federal Reserve or other major banks. The third topic, corporate finance, is concerned with raising or managing capital for the operation of financial activities such as buying and selling of securities, interest rates on loans and other assets, mergers and acquisitions and property financing. In addition, corporate finance helps determine which types of transactions should be made, which costs should be included in the cost of doing business and that tax benefits are available. Financial activities associated with mergers and acquisitions include the negotiation of buyouts, which can be very expensive, as well as the determination of prices for the acquired businesses. While these types of financial transactions tend to generate high long-term capital gains, they can also create short-term cash flow problems if the acquired businesses don’t generate enough revenue to cover the debt payments and other charges related to the transactions. [...]
19 February 2021financeFinance is a broad term for various things about the study, development, management and distribution of funds and other financial investments. In particular, it deals mainly with questions of how and when an individual, business or government obtains the funds necessary to meet its objectives and goals-called capital in the business context. It also involves the decisions and actions that a government takes on issues of budgeting, allocation of public funds, management of economic stimulus packages, etc. The discipline also has various theories and concepts involved such as microeconomics, macroeconomics, investment theory, economic development, international trade, and entrepreneurship. The major components of finance are asset pricing, time pricing, capital pricing, portfolio theory, financial analysis and monetary theory. Finance is also an important subfield of economics, but is not as closely related to it as some people think. For instance, while economics uses theory to explain how the economy functions, finance uses real world data to understand the behavior of real markets and firms. This makes a lot of difference in the models used to create financial theories and the methods by which they are tested in practice. For instance, in economic theory, time value of money is primarily based on the existence of a physical time horizon, whereas the models used to test it in practice depend largely on the ability of banks to extend credit. Finance, by contrast, is concerned mostly with the time value of money concept and its application to the behavior of specific economic firms. Another important area of finance is banking, money management and the provision of financial services. The scope of this discipline is not only to analyze the risks associated with bank loans and other bank products, but also to understand the usefulness of banks for their customers. This is done by understanding both the need for banking and the ability of banks to provide it. Banking is basically an example of finance that involves the use of leverage or debt, government bonds, stocks or other assets as collateral for bank loans. [...]
15 February 2021Stock marketIn the past decade the stock market has experienced a dramatic rise, which is now changing the way people perceive the industry. Whereas in the past the only people who saw the industry to be lucrative were financial experts and Wall Street brokers, today anyone with even a basic knowledge of what can be done in the stock market can make money. Today’s investors include everyday people and professionals who are using the Internet as an educational tool, and even full-time professionals who are following their career’s path through the market. It is important to understand how the stock market works so that you understand what happens on a daily basis. First, after the company makes it big the initial stock price spikes up and down, and this allows investors to grab onto a bargain. However, often the stock price will drop after a certain point and become stale, meaning no one is making any money. As the company makes it’s way through the economy and provides results to the stock price will usually rebound, hopefully higher this time, and continue to increase in value. However, if you invest in the wrong stocks the opposite can happen. If the market doesn’t perform the way you expected it to then you could end up losing money. It’s important to understand the way the market works so that you don’t accidentally purchase shares that will fall in value the second the company makes it’s next profit announcement, and you also have to learn to determine if the market is actually moving in a positive or negative direction. By taking the time to educate yourself about the stock market you can build wealth instead of losing it. [...]
15 February 2021Stock marketA stock market, equities market, or share exchange is an establishment where investors may buy and sell shares of stock in a company. The price of a share of stock is determined by supply and demand, which are influenced by factors such as company performance, industry classification, investment style, and sector preference. These may also include securities listed on a publicly traded stock exchange, which are traded in an electronic way on a securities exchange. However, a stock market can also be a private inter-bank market or exchange. Investors use shares of the stock market to take advantage of fluctuations in the value of a particular company. This also gives an opportunity for large-scale investors to enter the market. Usually, shares of the stock market are bought and sold on a daily basis, with traders buying and selling thousands of shares at any given time. Some investors use derivatives such as futures and options to manipulate the value of the shares of stock, and/or other financial instruments such as forward contracts to speculate on the behavior of underlying securities. One type of investment in the stock market involves a trading strategy known as Dollar Cost Averaging. This is based on the Dow Theory, named after Dow Jones, who developed the technique of using opening and closing prices to identify potential breakout stocks. Dow Jones developed this technique to help investors focus on “hot” stocks. Another popular strategy of buying and selling the same stocks multiple times is called price action. Both these strategies are used by institutional investors and everyday day traders. [...]
15 February 2021Stock marketAn exchange-traded fund, or stock market, is a pooled collection of investors’ claims on specific companies; these can include securities listed on the Major Exchange, or exchanges, including the New York Stock Exchange and the NASDAQ. Within the scope of this article, however, we will only be discussing exchange-traded funds. Exchange-traded funds are offered by hedge funds and mutual funds, as well as other individual institutional investors. When these funds are created, they typically use one or more investments to create a portfolio, each of which is assigned to a particular investment strategy; for instance, one fund might focus on technology, another on energy, and another on a fixed income. This way, each of these individual investors’ positions on different companies within their portfolio yields a return. Some of the things that investors track inside of an exchange-traded fund include index funds and stock indices. The advantage of using index funds is that they are less influenced by individual stocks and portfolios; what’s more is that these types of index funds are often more stable. Investors that focus on individual stocks are often looking for quick gains and don’t have a comprehensive diversified portfolio; meanwhile, those who buy into a comprehensive portfolio but are not interested in quick gains also don’t have to worry about the potential volatility of one or two particular investments within their portfolio. One disadvantage is that index funds don’t provide a strong return on your initial capital. They are designed only to track a number of generic index rates, not specifically tailored to your own financial goals. Another option for stock investing is day trading or swing trading. Day trading is a style of investing that exploits short-term price fluctuations to make a lot of money in a short amount of time. Swing trading, on the other hand, is more geared towards long-term investments. It utilizes a technique called trend trading, in which you purchase stocks that have already reached certain highs or lows; you then use technical analysis to predict that the prices will continue to rise or fall and then purchase them when the prices are already high, allowing you to reap in all of the profits. [...]