What is Riding the Yield Curve?
A trading strategy that is based upon the yield curve and used for interest rate futures. Investors hope to achieve capital gains by employing this strategy. Read more for examples and further explanation including related video clips and also comments
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Tag: long term
Hodrick-Prescott (HP) Filter definition explanation
What is Hodrick-Prescott (HP) Filter?
A data-smoothing technique that is commonly applied to remove short-term fluctuations that are associated with the business cycle, thereby revealing long-term trends. Read more for examples and further explanation including related video clips and also comments
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Valuation Analysis definition explanation
What is Valuation Analysis?
A form of fundamental analysis that looks to compare the valuation of one security to another, to a group of securities or within its own historical context. Valuation analysis is done to evaluate the potential merits of an investment or to objectively assess the value of a business or asset.
Valuation analysis is one of the core duties of a fundamental investor, as valuations (along with cash flows) are typically the most important drivers of asset prices over the long term. Read more for examples and further explanation including related video clips and also comments
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Negative Butterfly definition explanation
What is Negative Butterfly?
A non-parallel yield curve shift in which long- and short-term yields decrease by a greater degree than intermediate rates. This yield curve shift effectively humps the curve, adding to the curvature of the yield curve. Read more for examples and further explanation including related video clips and also comments
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Deferred Payment Option definition explanation
What is Deferred Payment Option?
An option with all the characteristics of an American vanilla option, with one exception: payment is deferred until the original expiration date. Read more for examples and further explanation including related video clips and also comments
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Term definition explanation
What is Term?
1. The lifespan assigned to an asset or a liability, over which the value of the asset/liability is expected to either grow or shrink, depending on its nature.
2. The period of time assigned as the lifespan of any investment. In the case of debt, the time it takes for all payments to be made by the borrower and received by the lender. In the case of an equity investment, the time that elapses between the acquisition of the equity and its sale or removal from holdings for another reason. Read more for examples and further explanation including related video clips and also comments
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Fixed-Income Style Box definition explanation
What is Fixed-Income Style Box?
Created by Morningstar, a fixed-income style box is designed to visually represent the investment characteristics of bonds and bond mutual funds. This is a valuable tool for investors to use to determine the risk-return structures of their bonds/ bond portfolios and/or how these investments fit into their investing criteria.
Also referred to as a “”bond style box””. Read more for examples and further explanation including related video clips and also comments
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Substantial Gainful Activity – SGA definition explanation
What is Substantial Gainful Activity – SGA?
The threshold prescribed by the Social Security Administration (SSA) for determining eligibility for Social Security benefits. Substantial gainful activity (SGA) is a specified dollar amount. It is updated each year to reflect inflation, and it represents the minimum level of employability which will render a person productive and, therefore, ineligible for Social Security benefits. The SSA employs higher threshold levels of SGA for persons with specific disabilities, such as blindness. Read more for examples and further explanation including related video clips and also comments
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Berkshire Hathaway definition explanation
What is Berkshire Hathaway?
A holding company for a multitude of businesses run by Chairman and CEO Warren Buffett. Berkshire Hathaway is headquartered in Omaha, Nebraska and began as just a group of textile milling plants, but when Buffett became the controlling shareholder in the mid 1960s he began a progressive strategy of diverting cash flows from the core business into other investments.
Insurance subsidiaries tend to represent the largest pieces of Berkshire Hathaway, but the company manages hundreds of diverse businesses all over the world. Read more for examples and further explanation including related video clips and also comments
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Dumbbell definition explanation
What is Dumbbell?
An investment strategy, used mainly for bonds, where holdings are heavily concentrated in both very short and long term maturities. Read more for examples and further explanation including related video clips and also comments
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