Blog Posts

When it comes to trading, many people fixate on their winning percentage as a measure of their success. However, it’s important to understand that a high winning percentage doesn’t necessarily mean you are making money, and a low winning percentage doesn’t necessarily mean you are losing money.   Key Takeaways – Good Trade Win Percentage […]

Immunization is a strategy used by portfolio managers to reduce interest rate risk. The goal of immunization is to generate a steady stream of income or keep the value of a portfolio constant over time. To do this, the manager chooses two bonds with different coupon rates and maturity dates; one provides income while the […]

What Is the Disposition Effect? The disposition effect is a behavioral bias that refers to the tendency of traders/investors to hold on to losing investments while selling winning investments too early. This behavior is driven by the emotional discomfort of realizing a loss and the psychological pleasure of realizing a gain. As a result, traders/investors […]

The S&P 500 is largely regarded as the world’s top equity index benchmark. Many investment managers track their performance relative to the S&P 500 and it’s commonly noted how difficult it can be to beat the S&P 500 “beat the market” over time. Given that, many wish to simply invest in the S&P 500 for […]

What Is a Frequency Distribution? A frequency distribution is a table that displays the frequency of various outcomes in a sample. The first column lists each unique value (or category) of the variable in question, and the second column lists how often that value occurs. For example, imagine you surveyed 100 people about which type […]

An interest rate is a percentage of the principal amount of money that a debtor (the one who borrowed) owes to a lender/creditor (the one who distributed the sum through a loan or a similar credit disbursement). There are five principal components of interest rate determination, and each affects the interest rate in its own […]

WACC stands for the weighted average cost of capital. WACC (commonly pronounced “whack”) is the average of the costs of all capital, including equity and debt, that a company has raised to finance its operations. WACC is used to discount a company’s future cash flows back to present value, in order to determine whether or […]

What Is Return on Invested Capital (ROIC)? Return on invested capital (ROIC) is a financial ratio that measures the profitability and efficiency of a company’s use of capital. It is commonly used to assess whether a company is using its resources in an efficient manner, and it is considered to be a good indicator of […]

Diversification has long been considered a crucial component of successful investing and trading, helping to reduce risk by spreading your trades and investments across a variety of assets, asset classes, countries, and currencies. However, in today’s world, achieving diversification has become more challenging. Inflation, geopolitical risks, and the need for inflation protection all present significant […]

A hedge fund and private equity firm both serve a similar purpose in that they both seek to generate returns on investment. However, there are key differences between the two. Hedge funds typically use more aggressive strategies involving liquid investments relative to private equity firms, which focus on illiquid investments. Hedge funds are typically open-ended […]