The golden cross is a commonly referenced technical indicator in stock market analysis when a short-term moving average crosses a longer-term moving average in the positive direction indicating a possible bullish move. While this type of move can be described with a variety of moving averages, typically the golden cross refers to when the 50-day moving average crosses the 200-day moving average as the 50-day moving average moves higher. The above image demonstrates what a stock chart might look like and how the 200-day and 50-day moving averages move along with the periodic stock price. When the 50-day moving average crosses above the 200-day moving average, this would be considering the golden cross. Note that the opposite

Earnings before interest and taxes (often called EBIT) is a funny term but is a very commonly cited accounting metric in business. The EBIT formula is used to determine and analyze a company's profitability. EBIT is sometimes referred to as operating earnings or operating profit. Essentially, EBIT is a great way to look at the profitability health of a company. EBIT is often used for valuation purposes when attempting to determine the valuation of a company for investment or acquisition purposes. What is the EBIT Formula? There are a few different ways to do the EBIT formula, though, in one sense, they all refer to the same thing. Here are the main ways the EBIT formula is typically utilized: EBIT = Net Income + Interest +

Businesses need to keep demand for their products as high as possible so that they can grow, but that’s not always easy. The way demand works is complex, with a number of factors affecting it. As we'll see in this article, the determinants of demand are a crucial factor in business operation and economics. Anyone can benefit from learning about the basics behind these forces can help shed light on the ebbs and flows of what’s driving the economic engine behind consumer-facing industries. Companies can develop strategies to take advantage of the impact of some of these factors of demand, also called “determinants.” However, not all of the determinants of demand are within a company’s power to control. Still, fully understanding how

Asset allocation strategies are usually over simplified and are often discussed around two groups of people: those far away from retirement and those either near or at retirement. In typical financial planning, asset allocation shifts towards more and more conservative as you get older and as you get closer to needing the money. As we've looked at previously, asset allocation is actually very overstated in importance for investors during retirement. The reason for this is sequence of returns risk. But that's a separate topic. In this article, we're going to look at asset allocation for young or new investors. This is a group that is rarely mentioned specifically with respect to asset allocation strategy, so let's try to give this group some

Investing your money for a solid gain or return is always the goal when deploying capital. But how to double your money? Investing with the goal of doubling your money has a number of important variables such as risk, rate of return and duration of the time required. We’ll look at a few different ways to attempt to double your money and provide insight into what kind of returns you might expect for various investments, and how long such returns would take to double the initial investment. First, let’s jump into three ways for learning how to double your money. How to double your money using the rule of 72 What is the rule of 72? The rule of 72 is a simple method for determining how long it will take to double your money in an

The PE ratio is one of the most common and important metrics involved in stock market analysis. The PE ratio gives investors some indicator of valuation or how expensive a stock might be at a given point in time. But what is a good PE ratio? What is the range of PE ratios that warrants buying the stock? It’s a trickier answer than you might suspect because of all the variables and some of the limitations with the PE ratio itself. In this article, we’ll consider what is a good PE ratio along with discussions of the imitations of the PE ratio and some alternative valuation metrics. As we begin, let’s first break down what exactly the PE ratio is. To get the PE ratio, you need to know the earnings per share (EPS) of the stock. Once you

An investment policy statement (IPS) is traditionally a document that a financial planner produces for an investor in which the investor signs off on the document. The investment policy statement states the overall objectives of the investment plan and guides future adjustments and changes to the investments. As more investors manage their own investments and assets, more individuals have began crafting investment policy statements for themselves as a written down guide and set of rules to manage one's own investments. We've mapped out a series of previous articles in which we describe three sets of rules to manage our investments (how to buy individual stocks, when to buy stocks and when & how to rebalance), and these rules have led

If you’re investing money, you have probably explored the world of stocks, which are a very common way to build wealth. Typically when people mention investing and building wealth, they are referring to the stock market. While stocks have been around for many decades, other instruments offer investors ways to deploy capital into the stock market such as mutual funds and ETFs. To properly navigate the investment world, investors need answers to important questions such as how is an ETF different from a stock? How do you buy ETFs? What kind of ETFs make sense to own? Your choices in stock investments are quite diverse, with companies of all sizes in various industries offering shares. You can invest in lower risk, established companies for

Boat financing has many similarities to other types of loans, but there are some distinct characteristics when getting a boat loan. The basic premise is similar in that there typically involves a down payment that represents a portion of the purchase price, and the remaining portion of the purchase being paid over time (and you pay interest on this portion). The bank or lender that is providing you with the money makes money on the interest as you pay down the loan over time. You can get boat financing through banks and credit unions, or like auto dealers and loans, many boat dealers themselves will have internal personnel to provide boat financing to you at the time of purchase. While it can sometimes be a more simple and seamless

A credit card is an essential financial tool in today’s world and choosing your first credit can be a challenging decision. If you’re getting your first credit card, you’ll want to consider a few key things before crossing this major money milestone. You can save a lot of time and money if you understand the basic features of credit cards and how to compare them. With the right card, you can build healthy credit that will open doors to many other financial benefits. You may even earn a bit of extra cash or perks like free airfare or hotel stays. Everyone has a different financial situation. So, the right card for you will depend on your own budget, income, spending habits and debt load, among other factors. You may have already a