Markets still “fragile” after more banks struggle 💬

He crushed the market in 2022… He delivered a perfect track record to his One Ticker Trader readers, going 11–for–11. [Main_Logo]( At Capability Stocks, we are serious about being your “eyes and ears” for special opportunities for you to take advantage of. The message below from one of our partners is one we think you should take a close look at. Dear Reader, The financial news website TheStreet.com warned about five regional banks that have “above average” capital or liquidity risk. This comes on the heels of both SVB and Signature Bank collapsing. And UBS coming to the rescue of Credit Suisse. If you’re an investor, you have to be wondering… what’s next? Is my bank safe? Is my money safe? Market Wizard Larry Benedict loves trading in lousy markets. In fact, he keeps delivering winners. He crushed the market in 2022… He delivered a perfect track record to his One Ticker Trader readers, going 11–for–11. Previously, he went 20 straight years on Wall Street without a single losing year. And when the market plummeted 37% in 2008, he delivered 23% returns… Now he’s sharing an over–the–shoulder “demo” of his winning strategy in action. He calls it the One Ticker Retirement Plan… It takes less than 10 seconds to demonstrate.  [Watch it here](  Sincerely, Lauren Wingfield Managing Editor, The Opportunistic Trader Investment Article Talk Read Edit View history Tools From Wikipedia, the free encyclopedia This article is about investment in finance. For investment in macroeconomics, see Investment (macroeconomics). For other uses, see Investment (disambiguation). "Invest" redirects here. For the term in meteorology, see Invest (meteorology). This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Investment" – news · newspapers · books · scholar · JSTOR (February 2017) (Learn how and when to remove this template message) Investment is traditionally defined as the "commitment of resources to achieve later benefits". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditure and receipts are defined in terms of money, then the net monetary receipt in a time period is termed as cash flow, while money received in a series of several time periods is termed as cash flow stream. Investment science is the application of scientific tools (usually mathematical) for investments.[1] In finance, the purpose of investing is to generate a return from the invested asset. The return may consist of a gain (profit) or a loss realized from the sale of a property or an investment, unrealized capital appreciation (or depreciation), or investment income such as dividends, interest, or rental income, or a combination of capital gain and income. The return may also include currency gains or losses due to changes in the foreign currency exchange rates. Investors generally expect higher returns from riskier investments. When a low-risk investment is made, the return is also generally low. Similarly, high risk comes with a chance of high losses. Investors, particularly novices, are often advised to diversify their portfolio. Diversification has the statistical effect of reducing overall risk. Investment and risk An investor may bear a risk of loss of some or all of their capital invested. Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk. Savings bear the (normally remote) risk that the financial provider may default. Foreign currency savings also bear foreign exchange risk: if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavourably so that the value of the savings account decreases, measured in the account holder's home currency. Even investing in tangible assets like property has its risk. And similar to most risks, property buyers can seek to mitigate any potential risk by taking out mortgage and by borrowing at a lower loan to security ratio. In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors and a greater level of uncertainty. Industry to industry volatility is more or less of a risk depending. In biotechnology, for example, investors look for big profits on companies that have small market capitalizations but can be worth hundreds of millions quite quickly.[2] The risk is high because approximately 90% of biotechnology products researched do not make it to market due to regulations and the complex demands within pharmacology as the average prescription drug takes 10 years and US$2.5 billion worth of capital.[3] History [icon] This section needs expansion. You can help by adding to it. (October 2018) The Code of Hammurabi (developed during his reign between 1792-1750 BC) provided a legal framework for investment, establishing a means for the pledge of collateral by codifying debtor and creditor rights in regard to pledged land. Punishments for breaking financial obligations were not as severe as those for crimes involving injury or death.[4] In the medieval Islamic world, the qirad was a major financial instrument. This was an arrangement between one or more investors and an agent where the investors entrusted capital to an agent who then traded with it in hopes of making a profit. Both parties then received a previously settled portion of the profit, though the agent was not liable for any losses. Many will notice that the qirad is similar to the institution of the commenda later used in western Europe, though whether the qirad transformed into the commenda or the two institutions evolved independently cannot be stated with certainty.[5] In the early 1900s, purchasers of stocks, bonds, and other securities were described in media, academia, and commerce as speculators. Since the Wall Street crash of 1929, and particularly by the 1950s, the term investment had come to denote the more conservative end of the securities spectrum, while speculation was applied by financial brokers and their advertising agencies to higher risk securities much in vogue at that time.[6] Since the last half of the 20th century, the terms speculation and speculator have specifically referred to higher risk ventures. Investment strategies Value investing Main article: Value investing A value investor buys assets that they believe to be undervalued (and sells overvalued ones). To identify undervalued securities, a value investor uses analysis of the financial reports of the issuer to evaluate the security. Value investors employ accounting ratios, such as earnings per share and sales growth, to identify securities trading at prices below their worth. Warren Buffett and Benjamin Graham are notable examples of value investors. Graham and Dodd's seminal work, Security Analysis, was written in the wake of the Wall Street Crash of 1929.[7] The price to earnings ratio (P/E), or earnings multiple, is a particularly significant and recognized fundamental ratio, with a function of dividing the share price of the stock, by its earnings per share. This will provide the value representing the sum investors are prepared to expend for each dollar of company earnings. This ratio is an important aspect, due to its capacity as measurement for the comparison of valuations of various companies. A stock with a lower P/E ratio will cost less per share than one with a higher P/E, taking into account the same level of financial performance; therefore, it essentially means a low P/E is the preferred option.[8] An instance in which the price to earnings ratio has a lesser significance is when companies in different industries are compared. For example, although it is reasonable for a telecommunications stock to show a P/E in the low teens, in the case of hi-tech stock, a P/E in the 40s range is not unusual. When making comparisons, the P/E ratio can give you a refined view of a particular stock valuation. For investors paying for each dollar of a company's earnings, the P/E ratio is a significant indicator, but the price-to-book ratio (P/B) is also a reliable indication of how much investors are willing to spend on each dollar of company assets. In the process of the P/B ratio, the share price of a stock is divided by its net assets; any intangibles, such as goodwill, are not taken into account. It is a crucial factor of the price-to-book ratio, due to it indicating the actual payment for tangible assets and not the more difficult valuation of intangibles. Accordingly, the P/B could be considered a comparatively conservative metric. Growth investing Growth investors seek investments they believe are likely to have higher earnings or greater value in the future. To identify such stocks, growth investors often evaluate measures of current stock value as well as predictions of future financial performance.[9] Growth investors seek profits through capital appreciation – the gains earned when a stock is sold at a higher price than what it was purchased for. The price-to-earnings (P/E) multiple is also used for this type of investment; growth stock are likely to have a P/E higher than others in its industry.[10] According to Investopedia author Troy Segal and U.S. Department of State Fulbright fintech research awardee Julius Mansa, growth investing is best suited for investors who prefer relatively shorter investment horizons, higher risks, and aren’t seeking immediate cash flow through dividends.[9] Some investors attribute the introduction of the growth investing strategy to investment banker Thomas Rowe Price Jr., who tested and popularized the method in 1950 by introducing his mutual fund, the T. Rowe Price Growth Stock Fund. Price asserted that investors could reap high returns by “investing in companies that are well-managed in fertile fields.”[11] Momentum investing Momentum investors generally seek to buy stocks that are currently experiencing a short-term uptrend, and they usually sell them once this momentum starts to decrease. Stocks or securities purchased for momentum investing are often characterized by demonstrating consistently high returns for the past three to twelve months.[12] However, in a bear market, momentum investing also involves short-selling securities of stocks that are experiencing a downward trend, because it is believed that these stocks will continue to decrease in value. Essentially, momentum investing generally relies on the principle that a consistently up-trending stock will continue to grow, while a consistently down-trending stock will continue to fall. Economists and financial analysts have not reached a consensus on the effectiveness of using the momentum investing strategy. Rather than evaluating a company’s operational performance, momentum investors instead utilize trend lines, moving averages, and the Average Directional Index (ADX) to determine the existence and strength of trends.[13] Dollar cost averaging Dollar cost averaging: If an individual invested $500 per month into the stock market for 40 years at a 10% annual return rate, they would have an ending balance of over $2.5 million. Dollar cost averaging (DCA), also known in the UK as pound-cost averaging, is the process of consistently investing a certain amount of money across regular increments of time, and the method can be used in conjunction with value investing, growth investing, momentum investing, or other strategies. For example, an investor who practices dollar-cost averaging could choose to invest $200 a month for the next 3 years, regardless of the share price of their preferred stock(s), mutual funds, or exchange-traded funds. Many investors believe that dollar-cost averaging helps minimize short-term volatility by spreading risk out across time intervals and avoiding market timing.[13] Research also shows that DCA can help reduce the total average cost per share in an investment because the method enables the purchase of more shares when their price is lower, and less shares when the price is higher.[13] However, dollar-cost averaging is also generally characterized by more brokerage fees, which could decrease an investor’s overall returns. The term “dollar-cost averaging” is believed to have first been coined in 1949 by economist and author Benjamin Graham in his book, The Intelligent Investor. Graham asserted that investors that use DCA are “likely to end up with a satisfactory overall price for all [their] holdings.”[14] Intermediaries and collective investments Investments are often made indirectly through intermediary financial institutions. These intermediaries include pension funds, banks, and insurance companies. They may pool money received from a number of individual end investors into funds such as investment trusts, unit trusts, and SICAVs to make large-scale investments. Each individual investor holds an indirect or direct claim on the assets purchased, subject to charges levied by the intermediary, which may be large and varied. Approaches to investment sometimes referred to in marketing of collective investments include dollar cost averaging and market timing. Famous investors Investors famous for their success include Warren Buffett, who ranked second in the Forbes 400 list of the March 2013 edition of Forbes magazine.[15] Buffett has advised in numerous articles and interviews that a good investment strategy is long-term and due diligence is the key to investing in the right assets. Edward O. Thorp was a highly successful hedge fund manager in the 1970s and 1980s who spoke of a similar approach.[16] The investment principles of both of these investors have points in common with the Kelly criterion for money management.[17] Numerous interactive calculators which use the Kelly criterion can be found online.[18] Investment valuation Free cash flow measures the cash a company generates which is available to its debt and equity investors, after allowing for reinvestment in working capital and capital expenditure. High and rising free cash flow, therefore, tend to make a company more attractive to investors. The debt-to-equity ratio is an indicator of capital structure. A high proportion of debt, reflected in a high debt-to-equity ratio, tends to make a company's earnings, free cash flow, and ultimately the returns to its investors, riskier or volatile. Investors compare a company's debt-to-equity ratio with those of other companies in the same industry, and examine trends in debt-to-equity ratios and free cashflow. Finance Article Talk Read Edit View history Tools From Wikipedia, the free encyclopedia For other uses, see Finance (disambiguation). "Financial" redirects here. For the Georgian newspaper, see The Financial. Part of a series on Finance Philippine-stock-market-board.jpg Markets Instruments Corporate Personal Public Banking Regulation · Financial law Economic history icon Business and Economics portalicon Money portal vte Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, which is the study of production, distribution, and consumption of money, assets, goods and services (the discipline of financial economics bridges the two). Finance activities take place in financial systems at various scopes, thus the field can be roughly divided into personal, corporate, and public finance.[a] In a financial system, assets are bought, sold, or traded as financial instruments, such as currencies, loans, bonds, shares, stocks, options, futures, etc. Assets can also be banked, invested, and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. A broad range of subfields within finance exists due to its wide scope. Asset, money, risk and investment management aim to maximize value and minimize volatility. Financial analysis is the viability, stability, and profitability assessment of an action or entity. In some cases, theories in finance can be tested using the scientific method, covered by experimental finance. Some fields are multidisciplinary, such as mathematical finance, financial law, financial economics, financial engineering and financial technology. These fields are the foundation of business and accounting. The early history of finance parallels the early history of money, which is prehistoric. Ancient and medieval civilizations incorporated basic functions of finance, such as banking, trading and accounting, into their economies. In the late 19th century, the global financial system was formed. In the middle of the 20th century, finance emerged as a distinct academic discipline, separate from economics.[1] (The first academic journal, The Journal of Finance, began publication in 1946.) The earliest doctoral programs in finance were established in the 1960s and 1970s.[2] Finance is today also widely studied through career-focused undergraduate and master's level programs. [3][4] The financial system Bond issued by The Baltimore and Ohio Railroad. Bonds are a form of borrowing used by corporations to finance their operations. Share certificate dated 1913 issued by the Radium Hill Company NYSE's stock exchange traders floor c 1960, before the introduction of electronic readouts and computer screens Chicago Board of Trade Corn Futures market, 1993 Oil traders, Houston, 2009 Main article: Financial system See also: Financial services, financial market, and Circular flow of income As above, the financial system consists of the flows of capital that take place between individuals and households (personal finance), governments (public finance), and businesses (corporate finance). "Finance" thus studies the process of channeling money from savers and investors to entities that need it. [b] Savers and investors have money available which could earn interest or dividends if put to productive use. Individuals, companies and governments must obtain money from some external source, such as loans or credit, when they lack sufficient funds to operate. In general, an entity whose income exceeds its expenditure can lend or invest the excess, intending to earn a fair return. Correspondingly, an entity where income is less than expenditure can raise capital usually in one of two ways: (i) by borrowing in the form of a loan (private individuals), or by selling government or corporate bonds; (ii) by a corporation selling equity, also called stock or shares (which may take various forms: preferred stock or common stock). The owners of both bonds and stock may be institutional investors – financial institutions such as investment banks and pension funds – or private individuals, called private investors or retail investors; see Financial market participants. The lending is often indirect, through a financial intermediary such as a bank, or via the purchase of notes or bonds (corporate bonds, government bonds, or mutual bonds) in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary earns the difference for arranging the loan.[6][7][8] A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Investing typically entails the purchase of stock, either individual securities, or via a mutual fund for example. Stocks are usually sold by corporations to investors so as to raise required capital in the form of "equity financing", as distinct from the debt financing described above. The financial intermediaries here are the investment banks. The investment banks find the initial investors and facilitate the listing of the securities, typically shares and bonds. Additionally, they facilitate the securities exchanges, which allow their trade thereafter, as well as the various service providers which manage the performance or risk of these investments. These latter include mutual funds, pension funds, wealth managers, and stock brokers, typically servicing retail investors (private individuals). Inter-institutional trade and investment, and fund-management at this scale, is referred to as "wholesale finance". Institutions here extend the products offered, with related trading, to include bespoke options, swaps, and structured products, as well as specialized financing; this "financial engineering" is inherently mathematical, and these institutions are then the major employers of "quants" (see below). In these institutions, risk management, regulatory capital, and compliance play major roles. Areas of finance As outlined, finance comprises, broadly, the three areas of personal finance, corporate finance, and public finance. These, in turn, overlap and employ various activities and sub-disciplines – chiefly investments, risk management, and quantitative finance. Personal finance Wealth management consultation – here the financial advisor counsels the client on an appropriate investment strategy Main article: Personal finance Further information: Financial planner Personal finance is defined as "the mindful planning of monetary spending and saving, while also considering the possibility of future risk".[9] Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, investing, and saving for retirement.[10] Personal finance may also involve paying for a loan or other debt obligations. The main areas of personal finance are considered to be income, spending, saving, investing, and protection.[11] The following steps, as outlined by the Financial Planning Standards Board,[12] suggest that an individual will understand a potentially secure personal finance plan after: Purchasing insurance to ensure protection against unforeseen personal events; Understanding the effects of tax policies, subsidies, or penalties on the management of personal finances; Understanding the effects of credit on individual financial standing; Developing a savings plan or financing for large purchases (auto, education, home); Planning a secure financial future in an environment of economic instability; Pursuing a checking and/or a savings account; Preparing for retirement or other long term expenses.[13] Corporate finance Dōjima Rice Exchange, the world's first futures exchange, established in Osaka in 1697. Dōjima Rice Exchange, the world's first futures exchange, established in Osaka in 1697 Main articles: Corporate finance and Financial management Further information: Strategic financial management Corporate finance deals with the actions that managers take to increase the value of the firm to the shareholders, the sources of funding and the capital structure of corporations, and the tools and analysis used to allocate financial resources. While corporate finance is in principle different from managerial finance, which studies the financial management of all firms rather than corporations alone, the concepts are applicable to the financial problems of all firms,[14] and this area is then often referred to as "business finance". Typically, then, "corporate finance" relates to the long term objective of maximizing the value of the entity's assets, its stock, and its return to shareholders, while also balancing risk and profitability. This entails [15] three primary areas: Capital budgeting: selecting which projects to invest in – here, accurately determining value is crucial, as judgements about asset values can be "make or break" [16] Dividend policy: the use of "excess" funds – are these to be reinvested in the business or returned to shareholders Capital structure: deciding on the mix of funding to be used – here attempting to find the optimal capital mix re debt-commitments vs cost of capital The latter creates the link with investment banking and securities trading, as above, in that the capital raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares. Re risk management within corporates, see below. Financial managers – i.e. as distinct from corporate financiers – focus more on the short term elements of profitability, cash flow, and "working capital management" (inventory, credit and debtors), ensuring that the firm can safely and profitably carry out its financial and operational objectives; i.e. that it: (1) can service both maturing short-term debt repayments, and scheduled long-term debt payments, and (2) has sufficient cash flow for ongoing and upcoming operational expenses. See Financial management § Role and Financial analyst § Corporate and other. Public finance President George W. Bush, speaking on the Federal Budget in 2007, here requesting additional funds from Congress 2020 US Federal Revenues and Outlays Main article: Public finance Public finance describes finance as related to sovereign states, sub-national entities, and related public entities or agencies. It generally encompasses a long-term strategic perspective regarding investment decisions that affect public entities.[17] These long-term strategic periods typically encompass five or more years.[18] Public finance is primarily concerned with: [19] Identification of required expenditures of a public sector entity; Source(s) of that entity's revenue; The budgeting process; Sovereign debt issuance, or municipal bonds for public works projects. Central banks, such as the Federal Reserve System banks in the United States and the Bank of England in the United Kingdom, are strong players in public finance. They act as lenders of last resort as well as strong influences on monetary and credit conditions in the economy.[20] Development finance, which is related, concerns investment in economic development projects provided by a (quasi) governmental institution on a non-commercial basis; these projects would otherwise not be able to get financing. See Public utility § Finance. A public–private partnership is primarily used for infrastructure projects: a private sector corporate provides the financing up-front, and then draws profits from taxpayers and/or users. [Atl_logo]( You are receiving this e-mail because you have expressed an interest in the Financial Education niche on one of our landing pages or sign-up forms on our website. How to whitelist us? Just [Follow our instructions](. 737 Main St Suite 100 Safety Harbor, FL, 34695, USA. [Privacy Policy]( | [Terms & Conditions]( | [Unsubscribe]( © 2023 Capability Stocks. All Rights Reserved.