Blog Posts

A currency defense is an economic policy implemented by a government in order to protect its currency’s value from speculators in the foreign exchange market. A currency defense can take many different forms, but typically involves intervention in the foreign exchange market to buy or sell the currency in order to keep its value within […]

Commodities are nowhere near as popular as stocks and bonds as an asset class. Pension funds largely concentrate their holdings in stocks, bonds, and other forms of equity like real estate and alternatives. Retail traders and investors have very little exposure to commodities. The main players in commodities are those who need to physically transact […]

What Is Operating Leverage? Operating leverage is a financial ratio that measures the percentage of fixed costs in relation to variable and overall total costs. It is commonly used to calculate the break-even point, and is a key metric in determining a company’s profitability. The operating leverage ratio can be expressed as:   Operating Leverage […]

In this article, we cover the basics of cash flow analysis. In trading and investing, cash flow is what gives businesses value. The value of a business is the amount of cash you can take from it over its life discounted back to the present. So, understanding cash flow gets at the heart of where […]

Companies buy back shares for a number of reasons. One key reason is to return value to shareholders. By reducing the number of shares outstanding, each remaining share becomes more valuable as earnings are spread over fewer shares. By reducing the amount of outstanding common stock, companies can improve their return on equity (ROE), making […]

In this article, we’re going to look at cases of countries in the 20th century where there were full wipeouts, and near-wipeouts, of financial wealth. This is based on 60/40 portfolios (i.e., 60 percent stocks, 40 percent government bonds) and based on real (inflation-adjusted returns). A 60/40 stock-bond mix is often taken as a fairly […]

Emerging technologies are those which are new and haven’t yet been widely adopted among the public. But these trends and new markets that will be developed out of them can lead to outsized gains for traders and investors. Emerging Tech and Trading Many traders believe the future will be a slightly modified version of the […]

The 3-fund portfolio – often called the Boglehead 3-fund portfolio after Vanguard’s late founder John C. Bogle – is a simple, low-cost portfolio that consists of just three index funds. The Boglehead 3-fund portfolio has become one of the most popular investment portfolios among DIY investors because it is easy to understand and implementation is […]

Mutual funds and ETFs are similar and different in various ways. Both of them are investment vehicles that pool money from various investors to purchase a set of investments. In this article, we explore those differences and similarities.   Mutual Fund vs. ETF – Key Takeaways Mutual funds are actively managed by professional fund managers […]

The present value formula is a financial tool that can be used to assess the current value of an investment. This formula takes into account the time value of money, which is the idea that money today is worth more than money in the future. In other words, the present value formula can be used […]