Author: Arabian Media staff

The failure of a small hedge fund doesn’t come as a particular surprise to anyone in the financial services industry, but the meltdown of a multi-billion-dollar fund certainly attracts most people’s attention. When such a fund loses a staggering amount of money, say 20% or more in a matter of months, and sometimes weeks, the event is viewed as a disaster. Sure, the investors may have recovered 80% of their investments, but the issue at hand is simple: Most hedge funds are designed and sold on the premise that they will make a profit regardless of market conditions. Losses aren’t…

The volatility in oil prices presents an excellent opportunity for traders to make a profit if they are able to predict the right direction. Volatility is measured as the expected change in the price of an instrument in either direction. For example, if oil volatility is 15% and current oil prices are $100, it means that within the next year, traders expect oil prices to change by 15% (either reach $85 or $115). If the current volatility is more than the historical volatility, traders expect higher volatility in prices going forward. If the current volatility is lower than the long-term average,…

Key Takeaways Child care costs range from about $6,250 to over $50,000 per year, depending on where you live and the type of care. For many, the monthly costs equate to an additional rent or mortgage payment. When deciding on what type of child care is best for your budget, consider a few things that my husband and I looked into: cost per hour, cost per day, and value. Some daycare and nanny services offer ways to save, like a nanny share or seasonal or promotional discounts. Whether you’re currently a parent, a soon-to-be parent, or even just a dog…

When looking to invest, you need to look at both risk and return. While return can be easily quantified, risk cannot. Today, standard deviation is the most commonly referenced risk measure, while the Sharpe ratio is the most commonly used risk/return measure. The Sharpe ratio has been around since 1966, but its life has not passed without controversy. Even its founder, Nobel laureate William Sharpe, has admitted the ratio is not without its problems. The Sharpe ratio is a good measure of risk for large, diversified, liquid investments, but for others, such as hedge funds, it can only be used…

In addition to death and taxes, inflation is another phenomenon that we can expect with near certainty over a period of time. The U.S. has actually gone through many brief periods of deflation, but in general, economic progress is accompanied by inflationary pressures. Inflation may occur when there is too much money in the system, which leads to an escalation in the price of goods. Of course, if a household’s two primary sources of wealth creation—asset and income appreciation—rise at a rate equal to or greater than inflation, the negative effects of inflation are neutralized. Yet, as we’ve seen time…

While buy low and sell high is a strategy that has resulted in big accumulations of wealth, this isn’t how the professionals find their success. Instead, a savvy investor strategically deploys their money in order to allow it to work in more than one way—they multitask their money. The retail investor who is accustomed to working with stocks can simultaneously put their money to work in three ways: Price action—The stock will hopefully rise in value. Dividend—The fee a company pays you in exchange for using your money. Call revenue—The money an investor pays you when you sell a covered call…

Reviewed by Cierra MurryBiotechnology is one of the strangest, scariest, sexiest, and most interesting corners of the stock market. In how many other industries are companies striving literally to save lives? Any industry can host a stock that has the potential to double, but what other industry can match biotechnology in the sheer number of stocks that could double if their companies' plans come to fruition?On the other hand, in how many other industries do companies burn through hundreds of millions of dollars, often with nothing to show for it? How many other industries rely on scientific mysteries that can be…

There are several different ways one can diversify a portfolio, such as the different categories of the Morningstar style box, which contain several different asset classes. But another common way to diversify is between the various sectors of the economy. This is usually accomplished with mutual funds that concentrate in one of the major sectors, such as natural resources or utilities. This article will examine the nature and composition of sector funds and the advantages and disadvantages that they present to investors. Key Takeaways Sector mutual funds focus on a specific sector of the economy, such as energy or technology.…

As a business owner, you probably realize that operating and owning a business can be fraught with pitfalls and risks. Turning a profit isn’t enough; you must also protect your business from claims and lawsuits. Debts and mortgage obligations to third parties and vendors, claims for damages caused by your employees, product or professional liability, and consumer-protection issues are just some of the risks you must deal with. If handled improperly, these risks could result in the loss of both business and personal assets. Knowing what risks you face and how to minimize or avoid them gives you the chance to…

Opening a robo-advisor investment account is as easy as opening an online financial or banking account. Most robo-advisory accounts will be opened online, although if you select Fidelity, Schwab, or another platform with a physical office, you can also open the account in person. Before opening your account, it’s wise to read reviews and explore the websites of several digital investment advisors to pick the one that fits your financial goals. After selecting a robo-advisor, create an account and answer a few questions related to your goals, age, timeline, and risk tolerance level. This information helps ensure that the mix…