06) Financial Concepts: Random Walk Theory
This theory became highly popular because of a book – A Random Walk Down Wall Street, written by Burton Malkiel in 1973. This book is now regarded as an investment classic. The random walk...
05) Financial Concepts: Asset Allocation
An investor planning long-term investments should have a portfolio comprised chiefly of stocks, since it is no secret that common stocks lead most other financial instruments in performance. Investors who do not wish to...
04) Financial Concepts: Dollar Cost Averaging
Any professional investor will likely say that picking peaks and lows in the market is the most difficult call they have to make. Trying to time the market is a strategy that is extremely...
03) Financial Concepts: Diversification
A lot of individual investors cannot tolerate short-term fluctuations. In order to smooth out the ride, you should diversify your portfolio Diversification is a risk-management technique that mixes a wide array of investments within...
02) Financial Concepts: The Risk/Return Tradeoff
The risk/return tradeoff is often called the “ability-to-sleep-at-night” test. Some people can afford to financially skydive without even blinking an eye, but most cannot do so without a security harness. It is important to...
8) Futures Fundamentals: Conclusion
Trading in the futures market is risky. It can be especially complicated for those who are still new to investing. While it is not for everybody, the futures market can be suitable for a...
7) Futures Fundamentals: How to Trade
Futures trading is an advance investing instrument that is not suitable for everyone, especially beginners. If you feel you have enough experience in investing to get into futures trading, know the risks and how...
6) Futures Fundamentals: Strategies
A futures contract tries to predict the value of an index or commodity at some time in the future. Different strategies are used by speculators to make a profit out of rising and declining...
5) Futures Fundamentals: Characteristics
In the futures market, the definition of margin is different from how it is defined in the stock market. Here, margin is the initial deposit of “good faith” made into an account in order...
4) Futures Fundamentals: The Players
Players are classified into two categories: hedgers and speculators. Hedgers A person who buys or sells in the futures market to secure the future price of a commodity with the intent of selling at...
3) Futures Fundamentals: How the Market Works
The futures market is a centralized place where buyers and sellers all over the world can meet and enter into futures contracts. Pricing can be in the form of an open cry system or...
2) Futures Fundamentals: A Brief History
Some 150 years ago, before the North American futures market started, farmers would grow their crops then bring them to the market to sell. Without knowing before their arrival to the market how much...
6) Margin Trading: Conclusion
Margin trading can be compared to a gamble. It’s either you make lots of money, or lose all of it. But, usually the odds are not in your favor. These are the highlights of...
5) Margin Trading: The Risks
In the same way that leverage can increase profit, it can also increase losses just as much. Margin trading involves a lot of risk. Not only will you be “gambling” with your own money,...
4) Margin Trading: The Advantages
It is normal for companies to borrow money to finance projects. Similarly, investors can borrow money to boost their buying power. It is like doubling the funds in an account. Margin can dramatically increase...