Investing Term Tuesday – Tax Selling.

This week’s investing term is all about investment decisions motivated by tax implications. It’s called tax selling and as the name suggests, it’s when an investor sells an asset at a loss, in order to pay less taxes when he sells an asset at a profit. The way this works is that the U.S. tax [...]

Investing Term Tuesday – January Effect.

In honor of just closing the books on January, I thought it might be nice to examine the January Effect.

The January Effect is an investing term that refers to a general increase in the stock market during the month of January. This effect is typically attributed to an increase in buying caused by the addition [...]

Investing Term Tuesday – January Barometer.

The January Barometer is based on the theory that the performance of the S&P 500 during the month of January is indicative of how the market will perform for the year. For example, if the S&P 500 is up for January, the January Barometer states that the stock market as a whole should end the [...]

Investing Term Tuesday: Commodity Index.

A commodity index is an index that tracks a collection of commodities in order to measure their performance.

Commodity indexes are often traded on exchanges, such as the Chicago Board of Trade (CBOT). By being traded on an open exchange, investors gain access to commodities without having to deal in the futures market.

The value of a [...]

Investing Term Tuesday: Riskless Society.

A riskless society is a fictional society where the markets of the world are sophisticated enough to anticipate and mitigate any and all risks. While the idea is credited to Dr. Kenneth Arrow and Gerard Debreu, it is similar to one of Einstein’s famous thought experiments, where the thinker hypothesizes an imaginary situation for [...]

Investing Term Tuesday – Gift Of Equity.

Since this is the gift-giving season, I thought it appropriate to share the Gift Of Equity in this investing term Tuesday.

The Gift Of Equity refers to the sale of a home to a family member at a price below the current market value. Sometimes it can be a sale to someone the with whom seller [...]

Investing Term Tuesday: Gold Fix.

The Gold Fix is the act whereby the price of gold is set, twice daily, by the 5 members of the London gold pool. This price is used as a benchmark for most of the global gold products and derivatives pricing.

This “fixing” of the gold price by the London gold pool is based on [...]

Investing Term Tuesday: Champagne Stock.

Champagne Stock is slang for a stock that has appreciated dramatically.

Champagne stocks make shareholders a great deal of money, usually relatively quickly. Champagne stocks are also commonly part of an industry or sector that is experiencing a bubble.

This term derives its meaning from the habit of individuals who hold such stocks to celebrate their good [...]