Tulip Mania and the Stock Market

Is a tulip bulb worth $76,000? It is if people are willing to pay that much for it and that's exactly what happened in Holland in the 1630's. If it sounds unbelievable, you may have never heard of Tulip Mania. The story began in 1559 when Conrad Guestner brought the first tulip bulbs from Constantinople to Holland and Germany, and people fell in love with them. Tulip bulbs quickly became a status symbol for the wealthy as they were beautiful and hard to get. (more…)

The Dow Theory

The Dow theory has been around for almost 100 years, yet even in today's volatile and technology-driven markets, the basic components of Dow theory still remain valid. Developed by Charles Dow, refined by William Hamilton and articulated by Robert Rhea, the Dow theory addresses not only technical analysis and price action, but also market philosophy. (more…)

OptionMentoring.com – Review*

Many people may have heard of options and have seen that they can trade them in their online account, but, most people don't really understand options and could use an options trading mentor. An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, exchange-traded fund (ETF), or similar product. (more…)

The Effects of a Stock Split

The company I work for and invest a small amount in through the Employee Stock Purchase Plan has recently announced that they would be executing a 2-for-1 stock split. A stock split is simply the dividing of a company's existing stock into multiple shares. A stock split is usually a good indicator that a company's share price is doing well. However, a stock split doesn't give you any more value, just twice as many shares. (more…)

Can I rollover my 401k while still employed?

In recent conversations, the question has come up as to whether you call rollover your 401k to a traditional IRA while still employed at the sponsoring employer. There seems to be some confusion about this and rumors of new laws that allow it. The short answer to the question is, no. By law, you can not withdraw 401k contributions, that is, pre-tax salary deferrals, before severance, plan termination, turning 59 1/2, death, disability or hardship (and you can't roll over hardship withdrawals). ...

What active investors really do and what it costs them

A couple inherited $20,000 in 1985. The husband and his wife decided that they would put their windfall into mutual funds. They decided that they would split the money and each put $10,000 in their own account. They both selected the same stock mutual fund and put their money in on the first business day in January, 1986. (more…)

Fundamental Indexing vs. Traditional Indexing

Today, one of the biggest idea battles in investments is between fundamental indexing and traditional indexing. The idea behind fundamentally weighted indexes is to weight stocks in an index by some “fundamental” measure of value. The notion originated with Pasadena, Calif., money manager Robert Arnott and it has since been taken up by others, notably Jeremy Siegel, a finance professor at the University of Pennsylvania's Wharton School. (more…)

What are Hedge Funds?

The sums racked in by hedge-fund managers dwarf even the incomes of top corporate CEOs and Wall Street bankers. The average among them earned nearly $1.5 million a day, every day, for the entire year, or over $1,000 every minute. The top three pulled in over $1 billion each. Meanwhile, wages for the majority continue to stagnate or decline. So, what are hedge funds? (more…)

Do you understand the risks of stock ownership?

Aka: We're in the money! [youtube]D4FXrIPTZOk[/youtube]

What are REITs?

A real estate investment trust (REIT) is a real estate company that offers common shares to the public. In this way, a REIT stock is similar to any other stock that represents ownership in an operating business. But a REIT has two unique features: its primary business is managing groups of income-producing properties and it must distribute most of its profits as dividends. Congress created REITs in 1960 to make investments in large-scale, income-producing real estate accessible to smaller invest...