Alternative investing presents a whole new universe for investors to pump up their portfolios by adding resources that have the inherent capability to generate non-correlated returns. Alternative investments differ from stocks and bonds, and their liquidity is one of the reasons why. Most investors battle with the comparison and contrast between liquid and illiquid investment […]
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What is Options Trading? Options trading is a form of active investing where a trader buys or sells options contracts. Options contracts are agreements that give the holder the right to buy or sell an underlying asset at a specified price (strike price) within a specific time frame. Call options give the buyer the right […]
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What is Inverse Correlation? Inverse correlation, also known as negative correlation, refers to a relationship between two variables in which one variable increases as the other decreases. Understanding inverse correlation is important for investors because it can help them identify opportunities to diversify their portfolios and hedge against risk. In this article, we’ll delve into […]
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What Are Structured Notes? Structured notes are a type of financial instrument that combines a debt obligation — like a bond — with the potential for additional positive returns through the use of derivatives. Derivatives refer to financial contracts whose value is linked to an underlying asset or group of assets, also known as a […]
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If you have purchased a mutual fund or invested in a pension fund, you have added to institutional ownership of a security. For more complex and risky securities such as futures, institutional owners make up the majority of holdings. What is Institutional Ownership? Institutional ownership, also called institutional holdings, refers to the amount of an […]
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What Are Futures Contracts? Futures contracts are derivative contracts that give investors the right to buy or sell an asset for a predetermined price and amount at a set future date. A variety of asset classes can be used for futures contracts including individual stocks, ETFs, currencies or commodities. Futures contracts can be used to […]
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Hedging is a risk management strategy used to protect against potential losses by betting on positions in two opposite directions. As an investment strategy, hedging can be seen as a form of insurance, meaning for a fee, investors can hedge in order to limit the risk of loss in financial markets. What is Hedging? Hedging […]
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Investment decisions often come down to the question of risk vs reward. While individual risk tolerances can differ, a diversified investment portfolio is still the most common strategy to minimize the potential for loss. One of the easiest ways to do this is by looking at the correlation between different assets and deciding on an […]
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Diversified income streams can make it so that while uncontrollable financial shifts may affect some portions of your income, other income streams may be less affected. This can limit the risk to your finances. What Are Income Generating Assets? Income-generating assets are commonly known as financial resources that can produce a recurring profit over time. […]
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Alternative investments are often more complex than traditional investment products. That complexity can be associated with higher risks. Because alternative investments have a low correlation to traditional markets, the risks accompanying them are also different. While alternatives can provide higher returns and lower volatility due to portfolio diversification, it is important for investors to understand […]
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Fractional investing lets investors buy a portion of a stock or other investment instrument including alternative assets such as fine art.
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