EDU Articles
Learn about investing, trading, retirement, banking, personal finance and more.
What is the Equity Risk Premium?
The Equity Risk Premium (aka, Equity Premium) is the expected return of the stock market over the risk-free rate (U.S. Treasuries).
This number basically refers to the amount an investor should expect in exchange for accepting the risk inherent in the stock market. The size of the equity risk premium varies depending on the amount of risk of a portfolio, the market, or a specific holding investment, against the risk-free rate.
The more risk an investor takes, the higher the equity risk premium. As far as history goes, survey of academic economists gives an average equity risk premium range of 3-3.5% for a 1-year horizon, and 5-5.5% for a 30-year horizon.
What are Fixed Income Funds?
Is My Portfolio Diversified Enough?
What is short selling?
Short selling is done with the help of a brokerage/custodian, who will lend you the security so that you can sell it
Is there such a thing as a “presidential election cycle” impact on stocks?
Analysts have popularized the notion that the 4-year presidential election cycle holds secrets to bear and bull markets
If I Want to Establish a Money Purchase/Profit Sharing Plan, Do I Have to Establish One for All Owners of My Business?
A Money Purchase Plan does not have to be offered to every owner, only those who are considered employees as well
How volatile are commodities?
Commodities are more volatile than most assets. The supply-demand dynamics of commodities are continuously changing rapidly
How Often Can I Contribute to My 401(k)?
Contributions to a 401(k) account are generally taken out of compensation during payroll, before taxes are withheld
Who Can Contribute to a Roth IRA?
Most people will be able to contribute to a Roth, but once your income hits certain limits, you may need to find another way
What is an A-B Trust?
An A-B Trust is a plan which actually creates two trusts at the death of the first spouse, and is a strategy intended...
What is a Foreign Portfolio Investment (FPI)?
When foreigners purchase shares of domestic companies to add diversification it is known as Foreign Portfolio Investment
What is currency in circulation?
Currency in circulation tends to be defined as the currency held, without including long term deposits or investments
What is a Run Rate?
Run rate is an estimation of a future annual outlay or annual performance based on the most current numbers