Portfolio diversification is a strategy that helps investors manage risk. Investors often choose to diversify among industries for stocks, for instance. But they also consider diversification within different assets types. Bonds are an alternative to stocks that can provide for diversification, if you understand how to use them. Should you consider adding bonds to your […]
Selling put options can be a great way to help increase the value of your portfolio without taking on too much risk. At its core, a put sale allows investors to get paid to potentially buy shares of a company they like at a price they like. But what if you have no interest in […]
Most people often have a notion of what volatility means. They understand, at least conceptually, that it has to do with data of situations that vary over time. Weather is one example. Investments are another. Volatility when applied to the stock market is a fuzzier concept to many. It is one of the main factors […]
Many people check the food labels of the items they buy in the grocery store. Labels can help give them an indication of what they buy to eat is good for them. Similarly, publicly listed companies have the equivalent of a label that investors can use to check the soundness of companies. It comes in […]
With interest rates at record lows, many analysts are questioning the benefits of running the classic 60%/40% (equity to fixed) balanced portfolio. The historical argument for such a portfolio hinges on the non-correlated performance of stocks and bonds. During times of equity drawdowns, fixed income securities typically provided offsetting positive performance, so over time the […]
You may have heard it before. When you buy an options contract, you obtain the right to buy (for calls) or sell (for puts) shares of stocks before a predetermined period. You are not required to buy or sell, however. The price that you buy and sell is known as the strike price. The predetermined […]
“I’ll buy it when it’s a little cheaper.” It’s a common statement made by investors. Unfortunately, for those on the fence about buying shares, that day rarely comes. When a stock does get cheap enough, markets may be in selloff mode, and then the potential buyer still sits on the sidelines. But there’s a way […]
When you start investing, you may learn about “paper trading” as a method to test your trading skills. Some people believe it’s an excellent method to learn and become a proficient trader. Others think it’s a waste of time. Let’s go over some of the pros and cons of paper trading. If you have never […]
At some point in your options trading experiences, you’re likely to read or hear about “Greeks.” You may think that someone is referring to what type of food they want for lunch. However, in options trading it has to do with indicators on options prices. This article will help you get up to speed with […]
Most investors have heard horror stories about buying and selling options. And they are all true! Some of those stories are when someone has placed all their investment capital into one stock and prayed that it will go up. This isn’t investing. It’s rolling the dice at a casino. The house always comes out ahead. Let’s […]
