Does “Buying the Dip” Work For Bitcoin?
We’ve covered that “buying the dip” is a sub-optimal strategy for purchasing stocks. But would it work for Bitcoin?
We’ve covered that “buying the dip” is a sub-optimal strategy for purchasing stocks. But would it work for Bitcoin?
So you just closed on your mortgage and youâre beginning to settle into your new home (and your new loan). Youâre assessing the many things that will need to be fixed and changed to make your house a home. Then you receive an urgent notice in the mail regarding something called âmortgage protection insuranceâ or… Read More »What Is Mortgage Protection Insurance? And Do You Actually Need to Buy It?
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I want to retire early with 1 million dollars. That statement has a nice ring to it, huh? I don’t think I’ve worked with a client yet that didn’t want to retire early, or wouldn’t be ecstatic if they had a $1 million portfolio. But as most of us already know, $1 million isn’t what […]
The post GF¢043: [Case Study] Can You Retire Early with Only 1 Million Dollars? appeared first on Good Financial Cents®.
Hold onto your hats, folks. It’s rant time!
Based on what I’m hearing on Facebook, Twitter, and in real life, it’s time for a refresher course on the difference between investing and speculation. Although these two concepts share some commonalities, they’re very different things.
Let me start by telling a story, one I’ve told many times before. It’s the story of the worst “investor” I’ve ever known: me.
Before my financial turnaround, I didn’t really understand what the stock market was for. I viewed it as a sort of casino, I guess. I believed investors gambled on individual stocks and hoped that they’d outperform the rest of the market.
So, that’s what I did. I treated the stock market as if it were a casino. I’d pick a stock, put all my money into it, and cross my fingers. I took risky gambles hoping to strike it rich.
Unsurprisingly, I lost a ton of money.
I wasn’t investing; I was speculating. I was gambling. I was trying to pick winning cards at the casino. But that’s how I thought the stock market worked.
After writing at Get Rich Slowly for a while, my viewpoint changed. As I became better educated, I realized that the stock market is not a casino. It’s a marketplace. It’s a tool that allows people to buy shares of businesses. (This is obvious, but trust me: Most people don’t understand this.)
When I buy a piece of one business, I’m taking on the risk associated with that business. We hear all the time that most small businesses don’t survive seven years, right? Well, even big businesses go under. Even big businesses lose money. There’s always risk associated with owning a business.
In the world of investing, “risk” is the probability that you’ll lose money. (There are many types of investment risks, by the way.) The notion of “return” is fundamentally tied to the concept of “risk”. The greater the risk — the greater the chance you’ll lose money — the higher your potential returns (gains) are.
One difference between investment and speculation is the amount of risk involved. When you put your money into something with minimal risk, you’re investing. When you put your money into something with high risk, you’re speculating. Like I said at the start, there are plenty of commonalities in the two actions — but the element of risk is a huge differentiating factor.
One way to mitigate risk is to own pieces of several businesses. Owning many businesses is even better. This practice is known as diversification. Diversification reduces risk. It allows you to enjoy the profits and benefits without getting screwed when one business goes under. This is investing. Putting all of your money into one stock and hoping that it increases in value is speculation.
An options chain is like a menu of all the available options contracts for a specific security. The options chain, or options matrix, shows the listed puts, calls, the expiration dates, strike prices, and volume and pricing information for the underlying asset, within a given maturity. An options chain provides detailed quote and price information, […]
The post Options Chain: Definition & How to Read an Options Chain appeared first on SoFi.
Americans anticipate income growth to slow and inflation to stay elevated in the Federal Reserve Bank of New York’s survey of consumer expectations. Median expected growth in household income declined 1.3 percentage point to 3.3% in the January survey, the largest monthly drop in data going back almost ten years, the New York Fed said … [Read more…]
When you first start out investing as a college graduate, or when you’ve finally been able to get rid of your debt, it can be daunting to know where to put your money, and what you should invest in. What will give your money the best returns? What investments are lower risk, while still giving […]
The post Put Your Money To Work By Investing For The Long Term appeared first on Bible Money Matters and was written by Peter Anderson. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.
Are you an active investor who sometimes needs some expert guidance and support in your online trades? If so, then you might want to try investing with Zacks Trade, a discount broker that offers a variety of valuable trading tools and features. Take a look below to see some of Zacks Trade’s key features, fees, […]
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Experts from the Urban Institute, the Lincoln Institute of Land Policy and Housing Finance Strategies offered their takes on where the housing affordability crisis is heading.