Discretionary Account
What is a discretionary account and why do you need one A discretionary account is an investing account in which the investor has given the investment advisor discretion over the account's investments. The advisor has the authority to buy and sell securities without needing to get the client's permission first. Discretionary accounts are often used by wealthy investors who don't have...
White Shoe Firm
The White Shoe Firm - The Top Three Reasons Not to Hire a White Shoe Firm Despite their name, a white shoe firm can seem a little too stiff for the common man. Perhaps it is too rigid because of its name - "The White Shoe Firm"? If so, read on to find out why. You might be surprised! There...
Mosaic Theory
What is the mosaic theory and what does it involve The mosaic theory is a method of analysis used by security analysts to gather information about a corporation. The mosaic theory involves collecting public, non-public, and non-material information about a company to determine the underlying value of its securities and to enable the analyst to make recommendations to clients based...
Risk Neutral
What is risk neutrality and why is it important Risk neutrality is the idea that people are indifferent between different outcomes that have the same expected value. In other words, if you have a 50% chance of winning $100 and a 50% chance of losing $100, you are considered risk neutral because your expected value is $0. This concept is important...
Historical Cost Accounting
What Is Historical Cost Accounting? Historical cost accounting is a method of accounting that reports an asset or liability at its historical cost, instead of its current value. Historical cost accounting is a common method for businesses and organizations to use, since it enables them to measure and analyze their finances without constantly adjusting their values. This type of accounting...
Financial Distress
What is financial distress and how can it impact your life Financial distress is a state of financial strain that can be caused by a variety of factors, including job loss, medical bills, and credit card debt. It can lead to feelings of anxiety and depression, and can even cause physical symptoms such as headaches and gastrointestinal problems. If you're experiencing...
Volatility Smile
The Volatility Smile and Its Importance to Options Traders The term "volatility smile" has been used to describe the behavior of financial options. Volatility smiles are a parameter in the Black-Scholes formula that must be adjusted to match market prices. This article will discuss the definition of the volatility smile and its importance to options traders. This article explains why...
Market Breadth
Market Breadth and Divergence A security analysis indicator that shows how well stocks are moving in a trend is known as market breadth. Market breadth is the ratio of advancing stocks to declining ones. Divergence is the opposite of market breadth. If there is a large increase in the number of advancing stocks, market breadth is generally considered to be...
Adjustable Life Insurance
What is adjustable life insurance and how does it work Adjustable life insurance is a type of whole life insurance that gives policyholders the ability to make changes to their death benefit and premium payments. Unlike traditional whole life insurance, which locks in rates for the life of the policy, adjustable life insurance allows policyholders to adjust their coverage as...
Discontinued Operations
What are discontinued operations? Discontinued operations are a business, group of components, or nonprofit activity that has ceased operations. These activities are usually not profitable or in existence any longer, and their demise means that the company no longer exists. Contingent liabilities related to discontinued operations are also considered to be discontinued operations. However, there is no definitive definition of...