Investment

Index Fund

Index investing is a form of passive investing that consists in archive the same return as a market index. Usually, it consist in purchasing shares of an index funds. Index funds are mutual funds that mimic the composition of a market index, like the S&P 500 or the Dow Jones Industrial.

NYSE capital market

The capital market is a set of institutions through which the supply and demand of long and mid term means of financing, like stocks and mid- and long-term debt, meet.

Through the monetary market, unlike the capital market, short term assets are bought and sold. Together, the capital markets and the monetary market form the financial market.

Examples of assets traded in the capital market:
- Stocks.
- Long term government bonds.
- Long term corporate bonds.

Invesor making capital budgeting

Capital budgeting is a process that assess the convenience of carrying out an investment or not. If there are many profitable investments available, the capital budgeting tries to find out which one is more advisable.

Credit Card

Good policies to minimize credit risk.

Investing money

What is an investment project

It is the planning of an expenditure of liquid resources, with the objective of taking actions that will lead to future profits.

- An investment project is made before the investment itself.

- An investment implies an expenditure of resources, but it doesn’t necessarily means that those resources are our own resources: a lot of investments are carried out by borrowing money.

And acquisition is when one company takes over another an establishes itself as the new owner. It usually takes place through the buyout of the majority shares package. This implies the control of every asset of the sold company.

The asset acquisitions strategy consists in the buyout of assets instead of shares. The buyer company doesn’t want to take control over the seller, it just want to acquire some assets he considers of value.

Asset acquisitions process requires the monetary valuation of every asset to be purchased. It’s a costly process.

Exchange Rate

The nominal exchange rate is defined as:

The number of units of the domestic currency that are needed to purchase a unit of a given foreign currency.

For example, if the value of the Euro in terms of the dollar is 1.37, this means that the nominal exchange rate between the Euro and the dollar is 1.37. We need to give 1.37 dollars to buy one Euro.

Home Investment

If you want to be a new small investor, this steps will help you during your first investments.

dices

Every investment has some risk. Risk is defined as the probability that the yield is lower than expected.

On average, riskier investments have a higher yield, in the long run.

Short term US treasury bill are included among the lowest risk investments, since they are backed by the U.S. government. Stocks prices have a higher volatility than bond prices.

Stock trading

Corporations divide it’s capital into shares. Thus, a share represents an indivisible unit of the capital of a corporation.

There are several kinds of shares, most important are:

  1. Ordinary shares
  2. Preference shares.

Ordinary shares are the most common type of share. Ordinary shares give their holders the following rights:

Subscribe to Investment