When you are assessing how well your investments have performed, don't forget to factor in inflation. If you are not keeping up with inflation, your money might be losing value.Read More
The net interest margin measures the profitability of investments which were made using borrowed funds. A negative net interest margin would suggest that borrowing to invest has caused overall profit to decline.Read More
CFDs are a member of the derivatives family. They enable investors to gain a leveraged exposure to both long and short positions in a variety of underlying assets including: Share, Indices, Commodities, ForexRead More
Arbitrage is a term used in finance for a 'risk free return'.
It occurs when there is a pricing inefficiency giving people the opportunity to simultaneously trade the same investment at different prices
For example, if you see that the same commodity is trading at $100 on Exchange A and $101 on Exchange B. You would place a sell on Exchange B (and receive $101) and a buy on Exchange A (and pay $100) . The buy and sell cancel each other out, and you are left with $1 which you made risk free.
Theoretically, these pricing inefficiencies correct themselves because the actions of arbitrage traders closes the gap in prices.
Streetonomics: A term made up by The Finance Guy, used to describe the application of Economics to every day life. The studies are in no way comprehensive. The information is not factual, it is at best conjecture, based on limited information using a knowledge of Economics he gained at University.. back in 1998.
The goal of Streetonomics, is to bring attention and discussion to topics we find fun and interesting. At times you will strongly agree with our views, at other times you will strongly disagree. We see things through our own eyes, and this is why conflicting opinions is a natural part of any economic discussion.
A simply definition of Finance would be 'the study of money'. One of our main goals at The Finance Guy, is financial literacy.
Kids who graduate from high school know how to measure the volume of any container, using a ruler, or can calculate probabilities of coin tosses, dice rolls or any other Vegas game,
If you ask a high school grad how compound interest works, they think you are speaking a foreign language.
Measuring things is useful, and if more of us understood the odds in Vegas, less of us would play. With all the life skills we learn at school, a general understanding of savings and loans, does not feature.
One of our goals at TFG, is to help increase financial literacy. There will be many mathematical formulas, but none of them are above 10th grade difficulty, and we will provide lots of calculators for you.