About half a million Americans aged 62 or older hold a reverse annuity mortgage today, according to the U.S. Department of Housing and Urban Development (HUD). As more Americans move into this age group, the volume will increase as well. But exactly what is a reverse mortgage and how does it work?
Any study of financial statements includes basic tests in two areas: profitability (and the growth trends that includes) and working capital, or the availability of liquid assets needed to fund current operations.
Market capitalization is important because it gives us an idea of how large a company is and, in turn, allows us to compare it to other companies of similar size. (Hence the popular large-cap, mid-cap and small-cap categorizations, which we’ll define below.)
Whether you’re a seasoned investor or are just getting started, chances are you come across one investing term more often than others: dividend yield. But while defining “dividend yield” is easy — the percentage of a stock price you earn from dividends, the portion of a company’s earnings usually paid out to shareholders on a quarterly basis — actually calculating a company’s dividend yield isn’t all that simple.
Some people define themselves as fundamentally-based investors, but in practice they are technically-based traders. If you intend to be a fundamental investor, you need to be aware of four practices or habits worth avoiding.
Tracking a financial trend seems easy enough. When researching investments, monitoring certain indicators, like a company’s net profits, for example, or its stock price, over a number of years to detect any patterns sounds like a no-brainer. But the fact is, the methods investors and traders employ to track trends — and their assumptions — are easily misunderstood.
Investors rely on accurate financial information to pick companies. But are you getting truly accurate information from a company’s balance sheet? Can you tell what a company is really worth based on a list of assets and liabilities? No.