Strategies

Investing in Real Estate Investment Trusts (REITs)

A Real Estate Investment Trust (REIT) is an investment vehicle where a corporation is formed to investment in various types of real estate such as office buildings, shopping centers, hotels, or other types of real estate related assets. REITs enable their investors to directly participate in the ownership or funding of real estate ventures [...]

Sector Investing for Portfolio Balance

Stock investors often classify stocks by the type of business in which the company engages. By grouping like companies in this way, investors are able to more easily make comparisons when analyzing potential stock investments. The most common segmenting identifies a stock as either defensive or cyclical and further segments companies based on [...]

Factors to Consider When Picking Stocks for Investment

When considering any type of stock investment, the investor needs to understand the potential future performance of the company and the factors than can influence that performance. Listed below are the three primary factors that can impact how well a company does in both the near and longer-term.

The Overall Health of the Economy: The [...]

Six Approaches to Asset Allocation

Developing an asset allocation strategy is about diversifying your investments across multiple investment classes (e.g. stocks, bonds, and cash) in order to align this mix of assets with your investment objectives and risk tolerance. With proper diversification, the fluctuations in the performance of the portfolio are minimized as declines in any particular asset class [...]

How and When to Rebalance Your Portfolio

Rebalancing is the process of bringing the various asset classes of your portfolio back to their appropriate weight in order to meet investment and risk objectives. Investors rebalance their portfolios to maintain the mix of stocks, bonds and other assets that was outlined in their original investment plan. If any part of your [...]

Investment Risk and Modern Portfolio Theory

Modern Portfolio Theory (MPT) is a financial hypothesis that proposes the use of diversification by rational investors as a means to minimize risk without sacrificing returns. Originally developed by Nobel Prize winner Harry Markowitz and published in 1952, MPT argues that looking at the expected risk and return of a single stock is not [...]

The Benefits and Drawbacks of Preferred Stock Investing

Some companies issue two types of stock: common and preferred stock. While each offers a portion of ownership in the company, there are significant differences between the two. Preferred stock is often seen as a hybrid instrument; a mix between a stock and a bond. Although preferred stock is an equity security, [...]

Understanding Stock Analyst Recommendations

A securities or stock analyst is a financial professional who studies companies and industries to analyze investment opportunities. Through their research, the analyst may provide one of a number of recommendations or ratings, including “strong buy”, “buy”, “neutral”, “sell”, and “strong sell”. The analyst will often be employed by a bank or another [...]

Four Good Reasons to Sell a Stock

Knowing the right time to sell a stock can be as difficult as determining when to buy. Even professional traders and money managers can struggle with this decision. It’s easy to make yourself believe that a stock that is down will come back and it can be just as tough to make a sell [...]

The Benefits and Risks of Investing in
Unit Investment Trusts

A Unit Investment Trust (UIT) is one of three types of investment companies (the other two being mututal funds and closed-end funds). A UIT offers a fixed (unmanaged) portfolio of securities to provide investors with the opportunity for income through dividends and/or capital gains through price appreciation. While the portfolio of a UIT [...]