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Investing Terms

Asset valuation review

Asset valuation review is the process where a regulatory body estimates the value of assets of a failed bank. This process is used so that a positional buyer would get the price for which to buy the assets of failed bank. When a bank or other financial institution fails, it is being turned to a […]

Market Failure

Market Failure Market failure is the situation in which for any given market there is lack of supplies that have high demand by consumers. When a market “fails” the economy suffers, because there is no balance with money spending, because other products that are good with quantity don’t sell, and that brings those products to […]

Venture-Capital-Backed IPO

DEFINITION of ‘Venture-Capital-Backed IPO’ When a company wants to sell its shares, the shares are called Initial Public Offering. As it is very risky to buy such IPO’s by a private investor, they back it up for some security. Venture capital is funding raised by companies that are starting their business.

Merger Arbitrage

Merger Arbitrage is a hedge fund strategy that implies simultaneous buying and selling the stocks of two companies that are in the process of merging. This strategy is used when the merger deal process is unsure to be finished. This uncertainty produces the price of the company that is being bought to be lower than […]

Relative Strength Index RSI

Relative Strength Index (RSI) Welles Wilder created the Relative Strength Index (RSI), in order to identify when the market is bearing extreme situation. Knowing whether market is overselling or overbuying, an investor can make better investments. RSI shows the important data in numbers from 0 to 100. The closer to the zero means it’s overbought. […]

Unsystematic risk or residual risk

Residual risk, or unsystematic risk, also known as nonsystematic risk represents the risk that investor has to bear regardless of investment. In example, this sort of risk is best avoided by having diverse portfolio of investment, and to spread percentage of investment onto different assets. So if one fails, only a small percentage is lost, […]

Value investing

Value investing is a simple form of investing, as to do that it doesn’t require having deep insight in finance, it doesn’t require having access to professional analyses or good handling with different types of charts. There are five basics concepts to cover in order to start value investing. First thing to know is that […]

Stock Market Capitalization to GDP Ratio

STOCK MARKET CAPITALIZATION TO GDP RATIO This is the ratio used to determine if the market is undervalued or overvalued. This ratio can be used to determine evaluation of any particular market, as well as the market overall. Stock market capitalization to GDP ratio is being calculated by inputting the data of stock market capitalization […]

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