A small-cap mutual fund is a group of small-cap stocks with a market capitalization of $300 million to $2 billion. Small-cap funds can be designed for various investment objectives, but investing in a group of companies helps mitigate risk and offers growth potential. However, small-cap investing involves higher risk due to price volatility and a […]
Capital gains treatment refers to the tax applied to capital gains from investments, with rates varying depending on the length of time the investor has held the security. Short-term rates are usually higher than long-term rates, so investors assess the impact on their tax burden before selling. Capital gains treatment is a term that has […]
A capitalization rate is a way to convert income into asset value. It is calculated by comparing the cost of acquiring an asset to the amount of income it generates over a specific period. It can be used to project future earnings and can be affected by various factors. A capitalization rate is essentially a […]
A tweezer top is a feature on candlestick charts that shows a strong bullish day followed by a strongly bearish day, indicating a possible trend reversal. Traders use this and other features to predict future trends, but do not base decisions solely on this data. The top of a tweezer is a feature of charts […]
Gross capitalized cost is the amount financed in a vehicle lease before capital cost reductions, including vehicle cost, taxes, fees, and rent. It determines monthly payments, and is similar to the financed amount of a loan. Leasing is a type of loan, and the gross capitalized cost includes all lease costs. Lessees can negotiate the […]
Capital revenues and expenditures are different from income and revenue expenses. Capital spending is an investment in long-term assets that will make the company stronger, while revenue expenses are day-to-day costs. Capital expenditures are recorded separately, but some companies engage in accounting fraud by combining them with revenues. Capital revenues and capital expenditures are aspects […]
A capitalization policy categorizes assets and sets dollar limits for purchases that can be recorded as assets instead of expenses. This improves a company’s financial picture and economic wealth. Depreciation is also part of the policy, representing the use of assets over time. A capitalization policy is part of a company’s asset acquisition process. National […]
The capital intensity ratio measures how much a company invests in total assets compared to its revenue. It is calculated by dividing the value of total assets by income earned over a period. A high ratio indicates a company needs to spend more to generate revenue and may struggle to stay afloat. Comparisons should be […]
Capital gains result from an asset’s appreciation in value, while capital losses occur when an asset depreciates. Capital gains tax varies depending on how long the asset was held, and capital losses can be used to offset gains. Many countries have their own rules regarding capital gains tax. Capital gains are gains that result from […]
Capital growth strategy involves long-term planning to increase the value of an asset, primarily through stocks. It can be high-risk but potentially high-reward, and portfolios may also include fixed income securities and low-risk items. Risk mitigation is important, and it is best suited to experienced money managers. Capital growth strategy is a long-term plan to […]
Mega cap refers to publicly traded companies with high market capitalization, typically over $200 billion. It is important to identify major players in the market, even for investors interested in smaller companies. Mega caps can set industry standards and investing in funds that include them can provide stability. Mega cap is a term used to […]
Capital notes are unsecured loans based on a company’s creditworthiness, while equity notes are higher risk and pay a higher interest rate. Banks and companies offer them to raise capital, and they are the lowest priority financial instrument in a structured investment vehicle. Investors should research the terms and level of risk before committing funds. […]
A country limit is the maximum amount a bank charges for all loans in a foreign country, based on factors such as exchange rates, economic health, and political climate. Each type of loan is covered by a national limit, and banks carefully evaluate individual borrowers. Limits are subject to change based on market conditions and […]
Large Cap refers to publicly traded stocks with a market value between $10 and $200 billion, such as General Electric. They are generally considered safe, but investors should review financial statements and industry outlooks. Large-cap mutual funds and Dow Jones index funds are easy ways to invest. Large Cap is an investment abbreviation for Large […]
A capital loss deduction allows taxpayers to offset the decline in the value of an asset and reduce taxable income. Tax codes vary by jurisdiction and may limit deductions to investment property, such as stocks, bonds, and rental real estate. A capital loss deduction is a reduction in taxable income that is allowed by a […]
Annual limits restrict interest and rate increases for a set period and limit contributions to benefit accounts. They prevent payment shocks and tax evasion. Lenders cannot exceed the annual limit on interest or fees, protecting borrowers from unfair situations. Annual caps also limit contributions to retirement accounts to prevent tax evasion. Lifetime limits cap the […]
A compounding rate is a ratio of the original cost of acquiring an asset to the amount of income it produces within a given time frame. Calculating a cap rate involves knowing the cost of capital and total revenue generated. Investors can calculate the rate for specific financial periods to determine whether to hold onto […]
