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The 60/40 portfolio pertains to an asset allocation that is 60 percent stocks and 40 percent bonds. The general thinking is that the 60 percent in stocks gives the portfolio a high enough risk asset allocation such that it can generate quality returns while the 40 percent in bonds gives diversification and a capital preservation […]

In this article, we cover trading and investing in the metaverse. But first, what is the metaverse? The metaverse is a space where users of a certain platform can interact in a computer-generated virtual-reality environment with other users. The metaverse is making a big push as the next big tech trend. Facebook even went so […]

Currencies rise and fall for various reasons, but FX is a fundamentally macro asset class. While equities may move a lot based on idiosyncratic factors happening at the company or the individual trading patterns of a singular entity, currencies are much more heavily influenced by country- or jurisdiction-level factors. Factors that influence the fall in […]

A country’s net international investment position (NIIP) is the value of all its foreign financial assets minus all its foreign financial liabilities. A country’s NIIP can be either positive or negative. A positive NIIP indicates that a country is a creditor to the rest of the world and a negative NIIP indicates that it is […]

The way money creation works in an economy and how the commercial banking system operates is broadly misunderstood. The way that it’s commonly taught in introductory economics textbooks is that a commercial bank takes in other people’s money (i.e., deposits) and then lends out this money in the form of loans. For non-bank financial institutions, […]

What Is a Joint Venture (JV)? A Joint Venture is a strategic alliance between two or more parties to undertake a specific project or business venture. The parties agree to create a new entity for the purpose of this venture and share resources, risks, rewards, and control over the enterprise.   Why Use Joint Ventures? […]

What Are Profitability Ratios? Profitability ratios compare a company’s earnings to other financial metrics such as its revenue, operating income, or assets. In general, profitability ratios show how well a company generates profits from its business activities. There are many different types of profitability ratios, but some of the most common include the gross margin […]

What Is The Quantity Theory of Money? The quantity theory of money is a simple economic theory that states that the price of goods and services is directly proportional to the amount of money in circulation. In other words, if the money supply increases, then prices will also increase. This theory is based on the […]

What Is the Empirical Rule? The empirical rule refers to the normal distribution and states that for data that is normally distributed, almost all of the data will fall within three standard deviations of the mean. In other words, if you take a normal distribution and plot it on a graph, almost all of the […]

What Is Preferred Stock? Preferred stock is a type of equity that typically pays fixed dividends and has priority over common stock in the event of a liquidation. Preferred shares generally have greater voting rights than common shares, but Common Stockholders elect the Board of Directors. Preferred Stock vs Common Stock – Key Differences Preferred […]