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Investment word of the day: An investment approach that chooses securities based on specific characteristics that determine risk and return is known as factor investing. It aims to boost returns, manage risks and enhance diversification by strategically focusing on particular factors. Types of factors The two major types of factors that influence investments are macroeconomic…
Investment word of the day: A significant incentive for investors is the receipt of a portion of the company’s profits. Dividends are a mechanism through which investors can obtain a share of a company’s profits. One of the key terms associated with dividends is ex-dividends. Here’s all you need to know about ex-dividend. What is…
Investment word of the day: Well-established, financially stable companies with a significant market share are popularly known as blue-chip companies. Many traders and investors prefer shares of blue-chip companies as they typically offer stability and regular dividends. What are blue-chip stocks? A blue-chip stock is issued by a large, established company known for its financial…
Investment word of the day: Mark to market is a financial metric that calculates the true value of a company’s assets and liabilities, which fluctuates over time. One of the major objectives of mark to market is to measure and evaluate the financial condition of a company based on existing market factors. This approach gives…
Investment word of the day: A follow-on public offering (FPO) allows a company already listed on the stock exchange to issue shares to investors to raise capital. It is the process through which companies that have already raised money through an initial public offering (IPO) issue additional shares for more funds. How does Sebi define…
Investment word of the day: Several companies announce various corporate actions, keeping in mind the financial health, interests of shareholders or to improve profitability. One such corporate action is the issue of bonus shares. What are bonus shares? The issue of bonus shares is a corporate action where additional shares are given to existing shareholders….
Investment word of the day: Listed companies opt for various corporate actions to address the interests of shareholders, increase profitability or for corporate restructuring. One such corporate action is a stock split. What is a stock split? A stock split is a corporate action that occurs when a company issues additional shares to shareholders, typically…
Investment word of the day: Employee stock ownership plans or employee stock option plans (ESOPs) are incentives beyond salaries, and the allotment of shares gives employees a sense of ownership in the company. The incentive aims to promote employee retention and encourage performance. Employees can benefit from selling shares or earning dividends based on company…
Investment word of the day: While profitability is the primary focus for both investors and businesses, risk management is an equally important factor. Hence, in this dynamic financial world, hedging gains prominence. Here’s all you need to know about hedging. What is hedging? Hedging is a strategy used by investors and businesses to safeguard against…