What are Value Stocks?

Value Stocks Definition Value stocks are stocks that currently trade below the intrinsic value of the company. A value investor typically considers various fundamentals of the business to determine the value of the company. If the market price is below the value of the company as determined by the investor, the stock is considered as… [Read More]

Deflation Definition – How Does It Affect the Economy

What is Deflation? – Definition Deflation is a period of falling prices of goods and services in the economy. This is the opposite of inflation, which is when general prices rise over time. Normally, economies are inflationary over the long term. This means that the value of money declines over time. A dollar is able… [Read More]

Value Premium Definition

Is Value Premium a Free Lunch?

Value premium refers to the observation that value stocks tend to return better than growth stocks on a risk-adjusted basis. Fama and French defined the value premium as the difference in returns between high book to market stocks and low book to market stocks, also referred to as HML. Value premium has been shown to… [Read More]

What is Stock? Definition, Types and How to Value Them

Stock Definition Stock, equity or share as used in finance represents a part ownership in a company. Ownership of a stock entitles the owner (stockholder or shareholder) with all the profits distributed in form of dividends in direct proportion to the amount of shares owned. For example, consider a hypothetical company that has issued 100… [Read More]