Investing

A:

The stock market crashed in 1929 because investors had put too much capital into the stocks by borrowing large amounts of money that they did not truly have. Large sums of money were invested in certain stocks because many investors thought that they were a sure thing.

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  • Why is investing important?

    Q: Why is investing important?

    A: One of the main reasons investing money is important is that it helps to create more money. As opposed to just saving money in a bank account, investing money involves choosing to use that money to buy interest or stock in order to earn a return on the money.
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  • Where can I get up-to-date stock market prices?

    Q: Where can I get up-to-date stock market prices?

    A: Up-to-date stock market prices are available on the websites of financial media sources such as CNN Money, Bloomberg News and the Wall Street Journal. Prices may also be available from websites of individual exchanges, such as the NASDAQ Stock Market.
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  • How do you get started investing in foreign currency?

    Q: How do you get started investing in foreign currency?

    A: Investors can start foreign currency trading by opening a Forex trading account, buying foreign currency CDs, or investing in mutual funds, exchange traded funds or exchange traded notes. Each of these methods comes with different initial investment requirements and unique risks. To be successful in foreign currency investing, it is critical that an investor understand the basic tenets of currency trading and choose the most suitable method of investment.
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  • How does inflation affect interest rates?

    Q: How does inflation affect interest rates?

    A: As inflation occurs, the central bank is able to adjust interest rates, thus encouraging economic growth. Without adjusted interest rates, there would be little growth during times of inflation as people's purchasing power becomes less. When interest rates are lowered, people are able to continue to purchase regardless of the fact that the purchasing power has lessened.
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  • How much does the government fund NASA?

    Q: How much does the government fund NASA?

    A: For fiscal year 2014, which covers Oct. 1, 2013 to Sept. 30, 2014, Congress approved $17.6 billion in federal funding for NASA. The agency expects to receive slightly less — $17.5 billion — for fiscal year 2015.
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  • What is a bull market?

    Q: What is a bull market?

    A: A bull market most commonly refers to increasing stock prices on exchanges such as the NYSE and Nasdaq. It is also used to describe bond and commodity price increases. A bull market is an indication of overall economic health.
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  • What is the difference between a command and a market economy?

    Q: What is the difference between a command and a market economy?

    A: The government has more authority in a command economy, while private citizens and companies have more influence in a market economy, according to Infoplease from Pearson Education. The government directs the types and levels of production in a command market. Private producers choose the amount of goods to supply the market in a market economy.
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  • Why did the stock market crash in 1929?

    Q: Why did the stock market crash in 1929?

    A: The stock market crashed in 1929 because investors had put too much capital into the stocks by borrowing large amounts of money that they did not truly have. Large sums of money were invested in certain stocks because many investors thought that they were a sure thing.
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  • What is the difference between direct and indirect investments?

    Q: What is the difference between direct and indirect investments?

    A: Direct investments are those in which the investor owns the particular assets himself, while indirect investments are investments made in vehicles that pool investor money to buy or sell assets, according to Red Mountain Asset Research. A direct investor invests in the asset itself, whereas an indirect investor invests in the expertise of the people using his investment money, notes the National Association of Real Estate Investment Trusts.
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  • What is the difference between assets and liabilities?

    Q: What is the difference between assets and liabilities?

    A: An asset is something a business owns that helps produce economic value going forward, according to Chron Small Business, and a liability is an obligation to pay money to a business or entity going forward. Companies sometimes opt to sell assets to pay off liabilities.
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  • How do companies maximize shareholder wealth?

    Q: How do companies maximize shareholder wealth?

    A: According to the Harvard Business Review, companies maximize shareholder value by managing their relationships with all of their stakeholders. Companies use a variety of strategies and investment options to maximize the wealth of their shareholders and create value for customers.
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  • What are toxic assets?

    Q: What are toxic assets?

    A: "Toxic assets" are assets than cannot be sold and are guaranteed to lose money. Most assets can become "liquid" by selling them off for money. Assets that cannot be sold are "illiquid," as no money can be made from them.
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  • How are stock prices determined?

    Q: How are stock prices determined?

    A: Initially, stock prices are set by the company with the help of an investment bank and approval of the exchange, according to Jean Folger for Investopedia. After the initial public offering, the market determines the price of the stock.
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  • What causes stock market prices to fluctuate?

    Q: What causes stock market prices to fluctuate?

    A: Psychology, as much as business basics, dictates the rise and fall of stock prices, says HowtheMarketWorks.com. From a business standpoint, the Federal Reserve System, the value of the dollar, inflation, deflation and politics are all major factors that make stock prices fluctuate, reports StockMarketPrimer.com.
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  • What is capital rationing?

    Q: What is capital rationing?

    A: Investopedia defines capital rationing as the act of limiting the number of new projects or investments undertaken by a company. This is done to slow down the spending of capital so that older projects can be completed or to insure that new projects or investments offer higher rates of return.
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  • What is the Wall Street bull statue?

    Q: What is the Wall Street bull statue?

    A: The Wall Street bull statue, officially titled Charging Bull, is a sculpture by Arturo Di Modica that is located in Bowling Green, New York City, at the intersections of Broadway and Morris streets, just a block north of the South Ferry building at the southern tip of Manhattan. The bronze sculpture weighs more than 3.5 tons and measures 18 feet long. Di Modica and friends left the sculpture in front of the New York Stock Exchange, beneath a Christmas Tree as a gift to the world, in December 1989.
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  • What is a revenue model?

    Q: What is a revenue model?

    A: A revenue model is a system through which a business generates income from its products and services. The revenue model is a key component of any business model. It is a business plan that guides a company in generating income by creating value for its customers.
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  • Why is shareholder wealth so important?

    Q: Why is shareholder wealth so important?

    A: Shareholder wealth is important because the shareholders own the company, and in a capitalist society, the measure of a company's value is in the profits it generates for the owners. The primary goal of a for-profit business firm is maximizing shareholder wealth, according to About.com.
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  • What are crude oil futures?

    Q: What are crude oil futures?

    A: Crude oil futures are contracts related to various types of unrefined oil that are traded in global markets. Crude oil, the most traded commodity in the world, is bought and sold primarily on the New York Mercantile Exchange in the United States.
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  • What is a good ROI percentage?

    Q: What is a good ROI percentage?

    A: A return of 7 percent is considered a good ROI for someone who invests in the stock or real estate markets, notes Joshua Kennon for About.com. A positive ROI range for bonds is anywhere from 2 to 4 percent.
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  • How do mutual funds work?

    Q: How do mutual funds work?

    A: Mutual funds work by combining the money of many investors into a single, professionally managed investment. The resulting pool of money can be invested in a wide variety of investments, including stocks, bonds or even other mutual funds.
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