Tag: stocks

Red Flag definition explanation

What is Red Flag?
An indicator of potential problems with a security. Most often used to refer to a stock, a red flag can be any undesirable characteristic that stands out to an analyst. There is no universal standard for identifying red flags; the method used will depend on the investment methodology being employed. Read more for examples and further explanation including related video clips and also comments
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National Association of Investors Corporation – NAIC definition explanation

What is National Association of Investors Corporation – NAIC?
A non-profit organization that is dedicated to providing investing education that allows individuals to earn positive long-term returns. The association is based in Michigan, and is comprised of investing clubs along with individual investors from around the United States. Read more for examples and further explanation including related video clips and also comments
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Investment definition explanation

What is Investment?
An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. Read more for examples and further explanation including related video clips and also comments
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Equity Style Box definition explanation

What is Equity Style Box?
A visual representation of the principle investment characteristics of stocks and stock mutual funds. The style box was created by Morningstar and is a valuable tool for investors to use to determine the risk-return structures of their stocks/stock portfolios and/or how these investments fit into their investing criteria

Also known as a “”stock style box””. Read more for examples and further explanation including related video clips and also comments
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Capital Gains Treatment definition explanation

What is Capital Gains Treatment?
The specific taxes assessed on investment capital gains as determined by the U.S. Tax Code. When a stock is sold for a profit, the portion of the proceeds over and above the purchase value (or cost basis) is known as capital gains. Capital gains tax is broken down into two categories: short-term capital gains and long-term capital gains. Stocks held longer than one year are considered long term for the treatment of any capital gains, and are taxed a maximum of 15% depending on the investor’s tax bracket. Stocks held less than one year are subject to short-term capital gains at a maximum rate of 35% depending again on the investor’s tax bracket. Read more for examples and further explanation including related video clips and also comments
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Xetra definition explanation

What is Xetra?
An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra platform offers increased flexibility for seeing order depth within the markets and offers trading in stocks, funds, bonds, warrants and commodities contracts.

The Xetra system was originally created for use on the Frankfurt Stock Exchange, but has expanded to be used by various stock exchanges throughout Europe. Read more for examples and further explanation including related video clips and also comments
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Value Investing definition explanation

What is Value Investing?
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company’s long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated.

Typically, value investors select stocks with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields. Read more for examples and further explanation including related video clips and also comments
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Market Value definition explanation

What is Market Value?
1. The current quoted price at which investors buy or sell a share of common stock or a bond at a given time. Also known as “”market price””.

2. The market capitalization plus the market value of debt. Sometimes referred to as “”total market value””. Read more for examples and further explanation including related video clips and also comments
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Darvas Box Theory definition explanation

What is Darvas Box Theory?
A trading strategy that was developed in 1956 by former ballroom dancer Nicolas Darvas. Darvas’ trading technique involved buying into stocks that were trading at new 52-week highs with correspondingly high volumes.

A Darvas box is created when the price of a stock rises above the previous 52-week high, but then falls back to a price not far from that high. If the price falls too much, it can be a signal of a false breakout, otherwise the lower price is used as the bottom of the box and the high as the top. Read more for examples and further explanation including related video clips and also comments
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