Living Will Living Trust States your end-of-life health care decisions so there’s a record of them if you’re unable to express them yourself Can appoint a successor trustee to manage your assets if you become incapacitated Becomes null and void at your death Can distribute your assets according to your wishes after your death A … Read more
What Is Modern Portfolio Theory (MPT)? Key Takeaways Modern portfolio theory is an investing strategy. It focuses on minimizing market risk while maximizing returns. MPT uses diversification to spread investments across different asset classes. That creates higher returns at lower levels of risk. It generally advocates a buy-and-hold strategy with occasional rebalancing. Critics say that … Read more
Key Takeaways Brazil, India, Indonesia, South Africa, and Turkey were the first countries to be called the Fragile Five. One feature of the Fragile Five is that, in order to survive, the group relies on a great deal on a stable US economy. The World Economic Forum compiles a Fragile Five list that considers world … Read more
Key Takeaways Stockholders’ equity is the value of a business’s assets that remain after subtracting liabilities. This amount appears in the firm’s balance sheet as well as the statement of stockholders’ equity. For most companies, higher stockholders’ equity indicates more stable finances and more flexibility in case of an economic or financial downturn. Understanding stockholders’ … Read more
Key Takeaways Investment banks help corporations access capital markets. Some companies use investment banks for their initial public offerings (IPOs). Investment banks typically handle a company’s mergers and acquisitions. Commercial banks focus on deposits and loans but have some investment capabilities; investment banks aren’t as restricted in their investment activities. Definition and Examples of Investment … Read more
Key Takeaways The buy-and-hold strategy is a form of passive investing in which someone buys securities and intends to hold them for years—even decades. The central idea of this strategy is that it’s better to ride out any turbulence than to attempt to time the market. The buy-and-hold strategy may be used in conjunction with … Read more
Inflation-protected bonds protect investors from inflation. In the US, inflation-protected bonds are known as “Treasury Inflation-Protected Securities” (TIPS), but they are known by other names in other countries. The interest payout on this type of bond increases with inflation or decreases with deflation. However, at maturity, the principal repayment is either an inflation-adjusted principal or … Read more
Applying for a mortgage preapproval is an exciting step in the homebuying process. It means you’re ready to start moving away from Zillow browsing sessions and actually start getting serious about your homeownership goals. Before you apply for a mortgage preapproval, though, it’s important to know what you’re getting into. It can take some work, … Read more
Bitcoin is a major digital currency or cryptocurrency. Unlike the dollar, euro, pound, yen, peso, and other government-backed currencies, cryptocurrencies are not officially supported by any central bank or government. The currency has traditionally traded in an open marketplace similar to the stock market, where buyers and sellers can exchange their local money for bitcoin … Read more