What Does the S&P 500 Index Measure and How Is It Calculated?
The S&P 500 Index The S&P 500 index measures the value of the stocks of the 500 largest corporations by market capitalization listed on the New York Stock Exchange or Nasdaq. The intention of Standard & Poor’s is to have a price that provides a quick look at the stockContinue Reading
Defaulting on Home Equity Loans and HELOCs
Home equity loans and home equity lines of credit (HELOCs) are affordable ways to tap the equity in your home to use for home improvements, pay for education, and pay off credit cards or other higher-interest types of debt. These debt instruments are secured by your property and typically haveContinue Reading
Standard Deviation vs. Variance: What’s the Difference?
Standard Deviation vs. Variance: An Overview Standard deviation and variance are two basic mathematical concepts that have an important place in various parts of the financial sector, from accounting to economics to investing. Both measure the variability of figures within a data set using the mean of a certain groupContinue Reading
What Is a Wash Sale?
A wash sale is a transaction in which an investor sells a losing security to claim a capital loss, and within 30 days before or after the sale you Buy substantially the same securities, Acquire substantially the same securities in a fully taxable trade, or Acquire an option to buyContinue Reading
Biden Administration Proposes a ‘Billionaires Minimum Tax’
On March 28, 2022, the Biden Administration proposed a minimum tax on extremely wealthy taxpayers in its FY 2023 budget. For tax years beginning after December 31, 2022, the so-called “billionaires minimum tax” would apply a 20% tax on the total income—generally including unrealized capital gains—of taxpayers whose wealth, measuredContinue Reading
What’s the Relationship Between R-Squared and Beta?
Beta and R-squared are two related, but different, measures. A mutual fund with a high R-squared correlates highly with a benchmark. If the beta is also high, it may produce higher returns than the benchmark, particularly in bull markets. R-squared measures how closely each change in the price of anContinue Reading
FINRA vs. the SEC: What’s the Difference?
FINRA vs. the SEC: An Overview With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA)—formerly, the National Association of Securities Dealers (NASD)—are two of theContinue Reading
Economic Order Quantity Model in Inventory Management
The economic order quantity (EOQ) refers to the ideal order quantity a company should purchase in order to minimize its inventory costs, such as holding costs, shortage costs, and order costs. EOQ is necessarily used in inventory management, which is the oversight of the ordering, storing, and use of a company’s inventory. InventoryContinue Reading
What Is Considered a Good Price-To-Book Ratio?
The price-to-book (P/B) ratio has been favored by value investors for decades and is widely used by market analysts. Traditionally, any value under 1.0 is considered a good P/B value, indicating a potentially undervalued stock. However, value investors often consider stocks with a P/B value under 3.0. It is important toContinue Reading
Top 10 Largest IPOs of All Time Worldwide
An initial public offering (IPO) is among the most important and significant steps any company can ever take in its lifetime. Not only does it represent a stage of growth, but it also gives investors a chance to own a piece of it. After all, going through the IPO processContinue Reading