Assets & Markets

Stocks, bonds, real estate or cryptocurrencies — picking an asset to invest in can be hard. Learn how these assets work, compare their risks and understand the markets they trade in.

Frequently Asked Questions

  • When do markets open?

    Standard trading hours for major U.S. stock exchanges like the NYSE, Nasdaq and Cboe are 9:30 a.m. to 4:00 p.m. Eastern time Monday through Friday. They also offer pre- and post-market trading. The forex market is open for trading five days a week, at least eight hours per day. Due to the different time zones major global markets are in, you can trade 24-hours a day.

  • What are emerging markets?

    Emerging markets (EM) are the markets of developing countries that are rapidly growing and industrializing. Compared to developed economies, they are low- or middle-income economies and are still moving away from traditional economic sectors like agriculture. EM examples include some countries in Asia, Latin America and Africa. EM investors could benefit from rapid growth but also face high risk and volatility.

  • Why are stock markets down?

    Stock markets or stock indexes comprise of publicly traded companies. Share price of these companies is determined by supply and demand. Company, sector or economic news could impact share prices. For example, Amazon’s acquisition of Whole Foods saw shares of other retailers fall. That also reflects in the value of the index depending on the company or sector weight in the index. General economic weakness could also impact stock markets.

  • How to calculate return on assets?

    Return on assets (ROA) is calculated dividing a company’s net profits by its total assets. ROA allows you to see how much after-expense profit a company produces for each dollar in assets. It can be a good metric in evaluating a company’s financials. Be wary about comparing ROAs for different industries and sometimes companies in the same industry as different business models utilize assets differently.

  • How long do bear markets last?

    According to the SEC, a bear market is a 20% or more decline in a broad market index over at least a two-month period. Bear markets can occur in any asset class and are caused by loss in demand and investor confidence. They may or may not be accompanied by a recession. Invesco suggests that on average bear markets in U.S. stocks last 349 days, while according to Fidelity they typically occur every six years.

  • What is OTC market?

    The over-the-counter or OTC market is where securities are traded outside of a major exchange and through a broker-dealer network. You can trade a variety of instruments such as stocks, bonds, derivatives and commodities on the OTC markets. Companies with securities trading on the OTC markets often do not meet the listing requirements of major exchanges. Investing in OTC markets can be volatile and risky.

  • What is fixed income?

    Fixed income, as its name suggests, is an investment that generates a steady income stream. While not risk-free, fixed income instruments are considered more stable and less risky than other investments such as stocks. Short-term fixed income investments include savings accounts and short-term CDs and are impacted by the fed funds rate. Long-term investments like bonds face credit risk and duration risk.

  • What is a mutual fund?

    A mutual fund is a pooled investment that invests in a basket of securities called a portfolio. Each share of the fund represents an investor’s proportionate ownership of the portfolio and its returns. There are different types of mutual funds based on their investing strategy. Factors to keep in mind while selecting a fund include its investment objective, performance and expenses.

  • What does market cap mean?

    Market cap is the total value of a company's shares of stock. Its calculated by multiplying the share price with the total outstanding shares. This means it changes frequently as those variables change. Companies can be classified as large, mid or small caps based on market cap. Market cap shouldn’t be the sole indicator in investment decisions as it reveals little about a company’s financials.

  • What is a bullish market?

    A bullish market is a one that is expected to rise in value. An investor or trader can be bullish on the broader markets or specific assets when they expect an increase in value. Typically, bullish traders bet on or “go long” on the asset while bearish traders bet against or “short” the asset. Different markets such as those for stocks, commodities or forex are impacted by different economic and other factors.

Key Terms

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Asset
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Transportation Sector
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FAAMG Stocks
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S&P 600
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Housing Bubble
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Special Purpose Acquisition Company (SPAC)
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Fiat Money
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Terminal Value
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Asset Class
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Secondary Market
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Short-Term Gain
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Capital Markets
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Unsystematic Risk
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Parent Company
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Fund
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Failure To Deliver
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Service Sector
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Energy Sector
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Whipsaw
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Government Bonds
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Paid-in Capital
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Digital Assets
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Two-Sided Market
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Principal Protected Note (PPN)
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Crystallization of Asset Value
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Bottom Line
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Fund Manager
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Bond Valuation
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Froth in Investing
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Bull Trap
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Dutch Auction
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Exempt Interest Dividend
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Contract for Difference
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Securitization
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Feeder Fund
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Industrial Goods Sector
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Utilities Sector
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Inherited Stock
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Property Dividend
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Time-Weighted Return
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Stock Bottom
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Life-Cycle Fund
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Issuer
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Forward Rate
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Roadshow
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E-Mini
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High-Water Mark
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Dual-Class Stock
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Normalized Earnings