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Financial Markets

Financial markets are where companies get capital to expand, as in the stock or bond markets, or hedge their risks, like the foreign exchange or commodities markets. Since these are traded on public exchanges, any investor can take advantage by trading these securities. However, it's complicated. Learn about financial markets here before you invest.
  1. Stocks and Investing FAQ (33)
  2. Stock Market Components (17)
  3. Mutual Funds FAQ (6)
  4. Bonds FAQ (16)
  5. Commodities Market FAQ (18)
  6. Hedge Fund FAQ (10)

An Introduction to the U.S. Financial Markets
An introduction to the financial markets, including a definition of financial markets, a description the components of the financial markets and how the markets impact the U.S. economy.

A definition that shows how capital is a key component of supply.

Wall Street
Wall Street is the heart of New York's financial district. As such, it symbolized all the trading of stocks, bonds, commodities and foreign exchange, and the derivatives that base their values on them.

What Is the S&P 500?
How the S&P 500 is different from other stock market indices.

Before investing in any kind of market, whether it be stocks, commodities or forex, you need to understand volatility.

Bull Market
A bull market is when asset prices keep rising. Rarely do prices rise in a straight line, so the way to identify a bull market is when the prices continue making higher highs (obviously) and higher lows (when they dip). A bull market usually refers to the stock market, but can occur in any asset class.

Diversified Investment
The definition of a diversified investment, and its advantages.

What Are Stocks?
Stocks are shares of a company. More than half of Americans own stocks, making it the most popular way to invest in financial markets. Find out how to buy stocks, and the best ways to invest.

What Is the Bond Market?
Describes the bond market, including corporate bonds, high yield bonds, Treasury bonds, savings bonds and municipal bonds.

Bear Market
The definition of a bear market in the stock market.

Mutual Funds
Mutual funds are a collection of stocks. They allow you to invest in many stocks at one time. The stocks are picked by fund managers, who are experts in their fields. This frees you up from having to analyze specific companies. The funds allow you to select any group of stock.

Financial derivatives include options, swaps and futures contracts. They derive their value from underlying assets. Understand how they are traded, and their risks.

What Are Hedge Funds?
A definition of hedge funds, who invests in them and why. How the growth of hedge funds has affected the financial markets and the U.S. economy. The LTCM crisis and 1998.

Private Equity
Private equity is private ownership of a corporation.

Dollar Index
The USDX dollar index can be traded either as a futures contract or an option. It allows companies to hedge against currency risk, and traders to make money based on the direction they think the dollar will go.

Forex Trading
Forex trading is how investors and corporations hedge risk from changing foreign currencies. This market has grown to a stunning $4 trillion per day. This greatly influences the value of the dollar, interest rates and inflation.

Financial Regulations
Insufficient Federal regulations for the financial industry have been blamed for the recession. Will increased regulations prevent another financial crisis.

Sarbanes-Oxley Act of 2002
Definition of how the Sarbanes-Oxley Act of 2002 affects the U.S. economy.

America, Welcome to the Poorhouse
Retirement planning is essential, but most Americans have no retirement plan. A great retirement planner is Jane White's book, America, Welcome to the Poorhouse.

What Are the Odds of Winning the Lottery?
Why winning the lottery is not the best way to plan for retirement. Ways to improve your odds.

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