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A secular trend is something that changes over time, but is not necessarily an element in a repeated, continuing cycle.

What is the Advance Decline Ratio? The advance decline ratio is used to determine how the market performed on a given day. It does this by comparin...

What is the Dow Theory? Dow Theory is a collection of indicators and definitions of the types of market signals for indicating a Bull or Bear marke...

What is the Efficient Markets Theory? The Efficient Markets Theory says that stocks trade at their fair value all of the time, assuming all informa...

What are Capital Markets? The most often context used for “Capital Markets” is in corporate finance and investment banking, and it refers prima...

What are overbought and oversold? Hit play to find out.

What is Alpha? Alpha is an investing term that describes the success of an investment. It looks at the investment’s ability to beat beta (or mark...

What is short interest theory? Watch this not-so-short video to find out.

What is a thin market, and has it been on Jenny Craig recently?

What is Above Full Employment Equilibrium? Above Full Employment Equilibrium happens when an economy is basically doing more than it realistically...

What is Counterparty Risk? Counterparty risk is the risk to either party within a transaction that the other will not or be unable to abide by the...

What is the Fast Market Rule? The fast market rule is something that is used in the U.K. to keep the market under control when any sort of crash ha...

What is the Dow Jones Industrial Average? The Dow Jones Industrial Average is usually just called the Dow. It’s an average of 30 of the most well...

What is Arbitrage? Arbitrage is a trading strategy used to make risk-free money. The investor buys a security in one market and sells it in another...

What do you need to retire? Retirement - think: 401k, pension fund, IRA, roth IRA, etc. All of these savings socked away while you worked hard are...

What is After Tax Yield? After tax yield is simply how much an investment makes (or yields) after taxes have been paid. This term refers to bond yi...

What is the S&P 500? It's Standard & Poor's 500 generally largest companies, with a U.S. domestic bias. The S&P 500 is usually what investors think...

A liquid market is a market featuring high trading volumes, i.e. investors actually want to put their cash to work.

What is a Country Basket (Index Fund)? Investing internationally can be a challenge, as foreign exchange, different accounting rules, time zones an...

What is a Day Trade? A day trade is a trade done in the public markets where the buy and the sell are both done on the same day, thus marking the n...

What is a Family of Funds? A family of funds refers to all of the funds managed by an investment firm. These firms offer investors the ability to invest in the family of funds and the investor enjoys the benefits of the diversification that results from this.

What is Crowding out? Crowding out is a phenomenon that occurs when the government enters into a sector in an economic fashion and its size creates a domino effect of other consequences that create disincentives for comparable or related actions in the private sector. For example, when the government enacts a stimulus package, an accompanying rise in interest rates may make financing projects in the private sector too costly.

Who is Warren Buffett, and how do we get him to give us a loan...?

What are CEOs, CFOs, and COOs? The “C” level executives in a corporation are the corporate officers responsible for the management decisions and processes of conducting the company’s business. The Chief Executive Officer (CEO) is akin to the captain of a ship. The CEO has the final authority on any corporate decisions and is responsible for the company’s overall success or failure. The Chief Financial Officer (CFO) is responsible for overseeing all of the company’s financial compliance with taxes, accounting, etc. as well as prudently managing the company’s funds to maximize value and profits for the shareholders. The Chief Operations Officer (COO) is akin to a ship’s XO; the COO implements all major decisions that are made by the CEO to whatever departments are required and coordinates whatever inter departmental cooperation may be necessary to execute the task(s) at hand.

The random walk hypothesis is a financial theory that suggests the market is unpredictable, and can't be beaten. (Cough-cough-B.S.)

What is a Buy and Hold Strategy? A buy and hold strategy can be thought of as what someone might use in a retirement account or college account (comprised of stock) for a young child. They make investments and let them sit there without changes for a long time regardless of any movements in price because these movements should be short-term.

What is the Black Scholes Model? The Black Scholes Model is used to determine the price of call options. It looks at the change in stock price over time also using time value of money as well as the strike price and expiration date for the option.

How do you judge the performance of an index fund? For index funds, they're really just a reflection of the stocks and bonds they, uh... reflect. So if the stocks in the fund are doing okay... well, the fund is probably doing okay, too. Relative performance is everything. The S&P 500, NASDAQ, and the Dow are the typical measuring sticks.

Trading volume is the number of shares trading back and forth at a given time.

What's the difference between senior and junior debt? No matter the differences, we know the similarity: you don't want to be in either of them.

What is a registration statement? A registration statement is the set of documents that accompany a filing of securities with the SEC for sale in the public markets. There are various types of registration statements that bear different designations. For example, the S-1 statement pertains to shares being registered in an IPO. A Form 10 registration statement requires the filing company to regularly file 10-Q quarterly and 10-K annual financial reports as per the regulations for fully reporting companies.

What are Above Par and At Par? Above par is when bonds trade at higher prices than face value. At par is when bonds are trading at face value. It seems to make sense that bonds would trade at their face value, but above par trading happens when interest rates are dropping, creating a lesser yield and higher price as they have an inverse relationship.

What is asset allocation? Asset allocation is the process of executing an investment strategy that is tailored to a particular investor’s risk tolerance and return on investment goals. While investors would like to get as large a return as they can, those with weak stomachs will blanche at the volatility of option and high flying tech stocks and may endure less sleepless nights invested in large cap equities or bonds, eschewing the higher potential returns for greater peace of mind. Asset allocation also needs to be regularly reviewed and adjusted should market conditions change in order to minimize losses or erosion of gains.

What is the Relative Strength Index? The Relative Strength Index is a technical analysis indicator that measures trading direction trends over the course of 14 trading sessions (on average) and calculates the degree of up and down percentages to determine whether or not the asset in question may be indicating an overbought or oversold signal.

NAV isn't a cool new navigation app...it's how mutual fund shares are valued or priced at the end of each trading day.

What is amortization? Amortization tracks the decline in value of a contract or service, usually paid for in advance. You received $10,000 in advance to water Ms. Maple's lawn for 10 months. She amortizes your watering to the tune of a decline in value of that contract of $1,000 as each month goes by.

What are Weighted Averages and Expected Values? Weighted averages are averages calculated to account for the number of changes that a variable, such as price, may have, especially when the same asset may have been added to the portfolio in varying quantities and price costs over time for a cumulative total. Expected Values is an anticipated prediction of an asset’s value over a specified time that is calculated as the total of possible results times their statistical probability.

What is the difference between short-term and long-term liabilities? Short-term liabilities show up on the balance sheet. They need to be paid in the short-term using the inflow from cash and accounts receivable, as shown on the balance sheet. These are things like accounts payable and employee salaries. Long-term liabilities are things like loans and such that the company won’t need to pay back for over a year.

What is Capital Gains Tax? Capital gain taxes are taxes collected by the IRS on trading profits from investments in equities, real estate, or any other type of transaction in which something defined as an asset is bought and then resold at a profit. The amount of assessed capital gains taxes is contingent upon the length of time the asset was held.

Strategic asset allocation means allocating your assets...strategically. Yup, no crazy plot twists here.