Volatility Definition Volatility is the amount and frequency with which an investment fluctuates in value. A volatile market gives traders opportunities to make money quickly, but also leaves room to lose money quickly as well. Planning Strategies for a Volatile Market Market volatility can bring about fear and loss for investors, but it can also provide some unique planning opportunities. One potential action to consider in volatile times might be capital tax-loss harvesting, a technique that enables investors to sell securities that have lost value in order to offset realized capital gains and maintain their desired exposures. Another strategy to…Read More
Diversification Definition Diversification is the process of owning different investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio, and also increase the potential for increasing returns. What is an Example of Diversification Strategy? A simplified example of a diversification strategy is a street vendor who sells both umbrellas and sunglasses, with the addition of some tourist trinkets. Having a mix of products like this ensures that he or she can earn money on both sunny and rainy days and is also selling some products that can generate income regardless…Read More
Margin Lending Definition Margin lending is the practice of borrowing money from a brokerage account while leveraging investment assets as collateral for the loan. Is Margin Lending a Good Idea? Margin borrowing is neither “good” nor “bad”, but rather a strategy that is better suited for some investors over others. Ideal candidates are those who have more substantial assets to use as collateral and those who wish to solve liquidity issues. There are several potential uses for margin lending, including as a “bridge loan” (a short-term loan used to cover cash flow needs), as a loan to pay down another…Read More
What are Equities? Equities are shares issued by a company which represent ownership in the company. Ownership of property, usually in the form of common stocks, as distinguished from fixed-income securities such as bonds or mortgages. Stock funds may vary depending on the fund’s investment objective. Equities vs. Stocks While often used interchangeably, the terms “equities” and “stocks” actually refer to slightly different things. Essentially, a “stock” is one of the most common types of equity, with “equity” referring to the general concept of ownership. What are Examples of Equities? Some of the most common forms of equity include: Common…Read More
In this letter: Monetary and fiscal policy remain very accommodative, translating to elevated valuations across markets. A new industry catchword for 2021. Risk tolerance should not be forgotten when times are good. As financial asset classes continue to exhibit strong risk on characteristics, there is emerging tension between the fuel supporting such risk taking (strong) and the valuations of both equities and fixed income (expensive). The Federal Reserve remains exceedingly accommodative, both by keeping rates at zero and by purchasing vast amounts of the issuance of Treasury bonds. The market seeks clues as to when these stances will change via…Read More
With sustainable and impact investing assets accounting for a fourth of the total U.S. net flows in 2020, it is clear that environmental, social, and governance (ESG) investing continues to grow in popularity. Despite this rapid interest in ESG investing, the data remains inconsistent, and investors are wondering what metrics to use to measure ESG results. In this blog, we detail the current landscape of ESG metrics, explain how we at Wealthspire evaluate funds in this space, and provide resources that can be used by the everyday investor. What is Impact Investing? Aligning investment portfolios with personal values can come…Read More
Growth stocks have been sluggish as of late and high valuations have many drawing parallels to the 90s tech boom. In this month’s “Markets in 2 Minutes”, Chris Maxey talks about how the Wealthspire Investment Team thinks about this going forward.