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• Are Investments in Innovations Worthwhile? - 25 June 2008

The ultimate goal of innovation is to implement positive change, and innovation is an important factor for the increase of wealth in an economy. However, often the financial benefits of innovation are only realized in the long term. This can be a problem for a management team that is focused on appeasing investors above all else and are, therefore, driven by quarterly results. They may be reluctant to invest in innovation, no matter how promising, for fear of negatively impacting on short-term financial performance.

• Could the Liquidity Theory Work for You? - 23 June 2008

The liquidity theory asserts that the stock market is no different from any other market in that it is all a matter of supply and demand. The liquidity theory claims that stock prices are determined by the number of shares in the stock market, together with the amount of money available to buy them, irrespective of what their fundamental value may be. Stock market liquidity trends are analyzed and the information is utilized to predict in which direction the market is headed.

• A Look at Market Capitalization - 17 June 2008

A public company’s market capitalization (also referred to as market cap) is the total market value of its outstanding shares i.e. all issued shares in the hands of investors. This measurement of corporate or economic size of a company is calculated by multiplying the number of outstanding shares by the price of one share, thereby providing a total value for the company’s shares, and therefore for the company as a whole. Instead of using sales or total asset figures to determine the size of a company, investors make use of market capitalization figures.

• Random Walk Hypothesis - 16 June 2008

The financial theory known as the "random walk hypothesis" proposes that stock market prices develop according to a random walk and, therefore, stock market prices are completely unpredictable. This hypothesis is widely accepted by economists, investors and other financial behaviorists, who continue to believe that stock prices are random making it impossible to consistently outperform market averages.

• Understanding Reverse Stock Splits - 9 June 2008

A reverse stock split reduces the number of a company’s shares, which in turn increases the earnings per share, while the company’s market capitalization remains the same. This makes the stock appear to be more valuable than before the split, when in fact nothing has changed. There are a number of reasons why a company may choose to undertake a reverse stock split, let’s consider some of them.

• Differentiating between Cyclical and Non-cyclical Stocks - 5 June 2008

Although it is true that investors have no control over the cycles of a country’s economy, they are able to adjust their investing practices to cope successfully with the economy’s highs and lows. Having a well-balanced investment portfolio is dependent on an understanding of how industries are influenced by the economy before making stock market investments. For this reason it is important for investors to know the fundamental differences between cyclical and non-cyclical stock companies.