Kurumi · · 4 min read What Is a Credit Rating? How Bond Ratings Work
A credit rating is a letter-grade opinion on how likely a borrower is to repay debt, set by agencies like S&P, Moody's, and Fitch.
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76 posts tagged “Investing”.
Kurumi · · 4 min read 
Kurumi · · 4 min read What Is Arbitrage? Risk-Free Profit, Explained
Arbitrage is profiting from a price gap for the same asset in different markets, buying low and selling high nearly simultaneously with minimal risk.
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Kurumi · · 4 min read What Is a DRIP? Dividend Reinvestment Plans
A DRIP automatically reinvests cash dividends into more shares, often commission-free, compounding returns without a manual trade each time.
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Kurumi · · 4 min read What Is the PEG Ratio? P/E Adjusted for Growth
The PEG ratio divides a stock's P/E by its expected earnings growth rate, giving a quick read on whether a high multiple is actually justified.
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Kurumi · · 4 min read Coupon Rate vs Yield to Maturity: Bond Math Explained
A bond's coupon rate is fixed at issuance; yield to maturity reflects its current price and time to maturity. How the two diverge and why it matters.
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Kurumi · · 4 min read What Is a Wash Sale? The Rule Explained
A wash sale disallows a tax loss when you rebuy a substantially identical security within 30 days before or after selling it at a loss.
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Kurumi · · 4 min read What Is a Target-Date Fund? Glide Paths Explained
A target-date fund is a single fund that shifts from stocks to bonds automatically as a chosen year approaches, following a preset glide path.
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Kurumi · · 4 min read What Is Diversification? Spreading Investment Risk
Diversification spreads money across uncorrelated holdings so no single loss sinks a portfolio — it cuts risk without necessarily cutting return.
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Kurumi · · 4 min read What Is Asset Allocation?
Asset allocation is how a portfolio is split across stocks, bonds, and cash — the mix that drives most of a portfolio's long-run risk and return.
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Kurumi · · 5 min read What Is a Rights Offering?
A rights offering lets existing shareholders buy new shares at a discount before anyone else, raising capital while giving current investors first refusal.
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Kurumi · · 4 min read What Is a Golden Parachute?
A golden parachute is a contract guaranteeing an executive a large payout if they're terminated after a merger or takeover, even without cause.
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Kurumi · · 4 min read Bull Market vs Bear Market: What's the Difference
A bull market is a sustained rise in prices; a bear market is a sustained decline, conventionally defined as a 20% drop from a recent high.
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Kurumi · · 4 min read What Is a Callable Bond? Issuer Call Options Explained
A callable bond lets the issuer repay the principal early, before maturity. It pays a higher yield than a comparable bond to compensate for that risk.
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Kurumi · · 4 min read What Is a Price-to-Book Ratio? P/B Explained
The price-to-book ratio compares a company's market price to its net asset value on the balance sheet, a classic value-investing screen. How it's calculated, and where it misleads.
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Kurumi · · 5 min read The Three Financial Statements, Explained
The income statement, balance sheet, and cash flow statement each answer a different question about a company. How they connect and what each one shows.
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Kurumi · · 4 min read What Is Cost Basis?
Cost basis is what you paid for an investment, adjusted for fees and reinvested dividends — it's the number capital gains tax is calculated from.
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Kurumi · · 4 min read Gross Margin vs Operating Margin vs Net Margin
Gross, operating, and net margin each strip out different costs to show profitability at a different layer of the income statement. Here's what each one isolates.
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Kurumi · · 4 min read The Rule of 72 Explained: Estimating Investment Growth
The Rule of 72 estimates how many years it takes an investment to double: divide 72 by the annual return rate. How accurate it is, and its limits.
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Kurumi · · 4 min read What Is a Stop-Loss Order? How It Works
A stop-loss order automatically sells a security once it falls to a set trigger price, capping downside without watching the market all day.
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Kurumi · · 5 min read Stock Buybacks vs Dividends: How They Differ
Buybacks and dividends both return cash to shareholders, but they differ in tax treatment, flexibility, and who benefits. How to compare the two.
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Kurumi · · 5 min read What Is Tax-Loss Harvesting? A Practical Guide
Tax-loss harvesting sells losing investments to offset capital gains and up to $3,000 of ordinary income each year, then reinvests the proceeds.
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Kurumi · · 4 min read 10-K vs 10-Q: What's the Difference?
A 10-K is a public company's audited annual report to the SEC; a 10-Q is its unaudited quarterly update. What each contains and when they're filed.
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Kurumi · · 4 min read What Is a Secondary Offering? Follow-On Stock Sales
A secondary offering is new or existing stock sold to the public after a company's IPO — how it differs from an IPO, and why it can dilute shareholders.
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Kurumi · · 4 min read What Is a Dutch Auction? Descending-Price Bidding Explained
A Dutch auction starts at a high price and descends until a buyer accepts — used in IPO pricing, treasury auctions, and some token sales.
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Kurumi · · 4 min read What Are Treasury Bills (T-Bills)? A Plain Explainer
Treasury bills are short-term government debt sold at a discount to face value, with the difference functioning as the interest paid to the holder.
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Kurumi · · 4 min read What Is a Moving Average? Reading Price Trends
A moving average smooths out price noise by averaging recent data points over a rolling window. How simple and exponential moving averages work.
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Kurumi · · 5 min read What Is Equity Dilution? How New Shares Affect Ownership
Equity dilution is the reduction in existing shareholders' ownership percentage when a company issues new shares. How it happens and what to watch for.
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Kurumi · · 4 min read Growth Stocks vs Value Stocks: Key Differences
Growth stocks are priced for future earnings expansion; value stocks trade below what their current fundamentals suggest. How to tell the two apart.
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Kurumi · · 4 min read What Is a Margin Call? Margin Trading Risk Explained
A margin call is a broker's demand for more cash or securities after a leveraged position loses value. How maintenance margin works and how it gets triggered.
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Kurumi · · 5 min read What Is Working Capital? The Formula and Why It Matters
Working capital is current assets minus current liabilities — a measure of whether a company can cover its near-term bills without raising new cash.
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Kurumi · · 5 min read What Is a Poison Pill? Shareholder Rights Plans
A poison pill lets shareholders buy discounted shares once an acquirer crosses an ownership threshold, diluting that stake to deter hostile takeovers.
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Kurumi · · 5 min read What Is a Credit Default Swap? CDS Explained
A credit default swap is insurance against a bond issuer defaulting: the buyer pays a premium, the seller pays out if the underlying debt fails.
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Kurumi · · 4 min read What Is a Covered Call?
A covered call is an options strategy where you sell a call against stock you already own, collecting premium in exchange for capping your upside.
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Kurumi · · 5 min read What Is Beta? Stock Volatility Explained
Beta measures how much a stock moves relative to the overall market — above 1 means more volatile, below 1 means less. How it's calculated and its limits.
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Kurumi · · 4 min read What Is a Stock Warrant?
A stock warrant gives the holder the right to buy shares directly from the company at a set price before expiration — issued by the company, not traded exchanges.
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Kurumi · · 4 min read What Is the Sharpe Ratio? Risk-Adjusted Returns
The Sharpe ratio measures return earned per unit of risk taken, letting investors compare two investments with different volatility on equal footing.
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Kurumi · · 4 min read Amortization vs Depreciation: What's the Difference
Depreciation spreads a tangible asset's cost over its useful life; amortization does the same for intangible assets and loan balances. How each works.
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Kurumi · · 4 min read What Is a 10-K Filing? How to Read One
A 10-K is a public company's audited annual report to regulators, covering financials, risk factors, and management discussion in far more detail than a press release.
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Kurumi · · 4 min read What Is EPS (Earnings Per Share) and How Is It Calculated?
EPS divides net income by outstanding shares to show profit per share. How basic and diluted EPS differ, and why EPS alone can mislead.
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Kurumi · · 5 min read What Is a Money Market Fund? Cash Investing Explained
A money market fund is a mutual fund that holds short-term, high-quality debt to preserve cash while paying interest. How it works and its risks.
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Kurumi · · 4 min read What Is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a triple-tax-advantaged account for medical expenses, paired with a high-deductible health plan. How HSAs work.
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Kurumi · · 4 min read Index Fund vs ETF: What's the Difference?
Index funds and ETFs can track the same index, but they differ in how they trade, their minimums, and their tax treatment. Here's how to choose between them.
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Kurumi · · 5 min read What Is a Sinking Fund?
A sinking fund sets aside money on a regular schedule to pay off a future debt or expense, reducing default risk and smoothing out a large future cost.
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Kurumi · · 5 min read What Is Bond Duration?
Bond duration measures how much a bond's price moves when interest rates change, expressed in years. Higher duration means more interest-rate risk.
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Kurumi · · 4 min read What Is a REIT? Real Estate Investment Trusts Explained
A REIT is a company that owns income-producing real estate and must pay out most of its taxable income as dividends, letting investors buy in like a stock.
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Kurumi · · 4 min read What Is a 529 Plan?
A 529 plan is a tax-advantaged investment account for education costs — contributions grow tax-free and qualified withdrawals aren't taxed at all.
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Kurumi · · 4 min read What Is a Certificate of Deposit (CD)?
A CD locks up cash for a fixed term in exchange for a fixed interest rate, usually higher than a savings account. How CDs work and their trade-offs.
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Kurumi · · 4 min read Market Cap vs Enterprise Value: The Difference
Market cap prices the equity alone; enterprise value adds debt and subtracts cash to price the whole business. How to use each correctly.
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Kurumi · · 4 min read What Is a 401(k)? Employer Retirement Plans Explained
A 401(k) is an employer-sponsored retirement account with pre-tax or Roth contributions, tax-advantaged growth, and often a matching contribution.
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Kurumi · · 4 min read What Is a Bond Ladder? Staggered Maturities Explained
A bond ladder splits an investment across bonds with staggered maturities, reducing interest-rate risk while keeping cash flowing back at regular intervals.
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Kurumi · · 4 min read Roth IRA vs Traditional IRA: Key Differences Explained
A Roth IRA taxes contributions upfront and grows tax-free; a traditional IRA defers tax until withdrawal. How the two account types compare.
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Kurumi · · 4 min read What Is a Yield Curve?
A yield curve plots bond yields against their maturities, and its shape signals what investors expect about growth, inflation, and interest rates.
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Kurumi · · 4 min read What Is a Stock Index? How the S&P 500 Is Built
A stock index tracks a basket of stocks with a single number, using a construction methodology that determines what moves it. Here's how it works.
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Kurumi · · 4 min read Market Order vs Limit Order: What's the Difference
A market order executes immediately at the best price; a limit order waits for your price or better. How each works and when to use them.
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Kurumi · · 4 min read What Is Compound Interest?
Compound interest earns returns on both your original principal and previously earned interest, causing growth to accelerate rather than stay flat.
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Kurumi · · 4 min read What Is a Leveraged Buyout (LBO)? Explained
A leveraged buyout uses borrowed money, secured against the target company's own assets, to fund most of an acquisition's purchase price.
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Kurumi · · 4 min read What Is an Economic Moat? Competitive Advantage, Explained
An economic moat is a durable competitive advantage that protects a company's profits from competitors over the long run. The main types, explained.
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Kurumi · · 5 min read What Is EBITDA? Earnings Before Interest, Tax & D&A
EBITDA strips out interest, taxes, depreciation, and amortization to show core operating profit. How it's calculated, why investors use it, and its limits.
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Kurumi · · 4 min read What Is a Hedge Fund? How It Differs From a Mutual Fund
A hedge fund is a pooled investment vehicle for accredited investors that uses leverage, derivatives, and short selling to chase absolute returns.
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Kurumi · · 4 min read What Is a SAFE? Simple Agreement for Future Equity
A SAFE is a startup funding contract that converts an investor's cash into equity at a future priced round, without interest or a maturity date.
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Kurumi · · 4 min read What Is a Convertible Note? Startup Financing Explained
A convertible note is short-term debt that converts to equity at a future funding round — how it works and how it differs from a SAFE.
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Kurumi · · 3 min read What Is a Mutual Fund? Pooled Investing Explained
A mutual fund pools money from many investors into one managed portfolio. How mutual funds work, their fees, and how they compare to ETFs.
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Kurumi · · 3 min read What Is an IPO? How Companies Go Public
An IPO is when a private company sells shares to the public for the first time and lists on an exchange. How the process works, and what changes after.
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Kurumi · · 5 min read What Is Free Cash Flow? The Metric Explained
Free cash flow is the cash a company generates after covering the capital spending needed to run its business. Why investors weight it over reported profit.
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Kurumi · · 4 min read What Is an Options Contract? Calls and Puts Explained
An options contract gives the holder the right, not the obligation, to buy or sell a stock at a set price by a set date. Calls and puts explained.
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Kurumi · · 4 min read What Is Short Selling? Betting Against a Stock
Short selling means borrowing shares to sell now, hoping to buy them back cheaper later — a bet on a falling price with theoretically unlimited risk.
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Kurumi · · 5 min read What Is a SPAC? Blank-Check Companies Explained
A SPAC is a shell company that raises money in an IPO, then merges with a private company to take it public without a traditional IPO process.
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Kurumi · · 4 min read What Is a Dividend? How Cash Payouts Work
A dividend is a portion of a company's profit paid directly to shareholders, typically in cash per share. How payouts, yield, and reinvestment work.
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Kurumi · · 4 min read What Is a Bond? Fixed-Income Investing Explained
A bond is a loan you make to a government or company in exchange for regular interest and repayment of principal at maturity. How pricing and yield work.
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Kurumi · · 4 min read How Startup Funding Rounds Work: Seed to Series C
Startup funding rounds move from pre-seed through Series C and beyond, each trading equity for capital at a higher valuation. How each stage works.
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Kurumi · · 5 min read What Is Dollar-Cost Averaging? A Simple Guide
Dollar-cost averaging means investing a fixed amount on a regular schedule regardless of price. How it works, and its real tradeoffs versus lump sum.
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Kurumi · · 4 min read What Is an ETF? Exchange-Traded Funds Explained
An ETF is a basket of securities that trades on an exchange like a stock. How creation and redemption work, and how ETFs differ from mutual funds.
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Kurumi · · 4 min read What Is a Stock Split? Why Companies Split Shares
A stock split increases a company's share count and lowers its price proportionally, leaving total market value and each investor's stake unchanged.
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Kurumi · · 5 min read What Is Market Cap? Company Valuation Explained
Market cap is share price times shares outstanding — the market's total price tag on a company. What it measures, what it misses, and why it matters.
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Kurumi · · 4 min read What Is a Stock Buyback? Share Repurchases, Explained
A stock buyback is a company using cash to repurchase its own shares, shrinking the share count. How buybacks work, why firms do them, and the trade-offs.
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Kurumi · · 5 min read What Is a P/E Ratio? Price-to-Earnings, Explained
The P/E ratio divides a stock's price by its earnings per share — a quick gauge of how much investors pay per dollar of profit. How to read it and its limits.
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