Tag: long term

Capital Gain definition explanation

What is Capital Gain?
1. An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short term (one year or less) or long term (more than one year) and must be claimed on income taxes. A capital loss is incurred when there is a decrease in the capital asset value compared to an asset’s purchase price.

2. Profit that results when the price of a security held by a mutual fund rises above its purchase price and the security is sold (realized gain). If the security continues to be held, the gain is unrealized. A capital loss would occur when the opposite takes place. Read more for examples and further explanation including related video clips and also comments
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Corporate Governance Quotient – CGQ definition explanation

What is Corporate Governance Quotient – CGQ?
A metric developed by Institutional Shareholder Services (ISS) that rates publicly traded companies in terms of the quality of their corporate governance. Each public company covered by the metric is assigned a rating based on a number of factors that are considered by the ISS model. Factors used in the CGQ formula include board structure and composition, the executive and director compensation charter, and bylaw provisions. Read more for examples and further explanation including related video clips and also comments
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Forward Premium definition explanation

What is Forward Premium?
When dealing with foreign exchange (FX), a situation where the spot futures exchange rate, with respect to the domestic currency, is trading at a higher spot exchange rate then it is currently. A forward premium is frequently measured as the difference between the current spot rate and the forward rate, but any expected future exchange rate will suffice. 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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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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