Concepts in Focus
A Tax Deduction and a Tax Credit Reduce Different Numbers
A money book may mention a deduction and a credit with the same dollar amount. In the United States, those labels affect different stages of a tax…
Financial ideas, carefully read
Open the reading room
Concepts in Focus
A Bond’s Current Yield Changes When Its Price Changes
A fixed annual coupon payment can represent different percentages of the price paid for a bond. That is why a book’s coupon figure and current-yield figure…
Concepts in Focus
Net Asset Value Needs a Per-Share Step Before You Compare It with a Share Price
A fund’s total net asset value and its net asset value per share are related numbers with different scales. Comparing the total directly with one share’s…
Everyday Money
Order Received Is Not the Same Message as Order Executed
Submitting an investment order starts a process. A confirmation that a platform received the instruction does not necessarily mean that a trade has already…
The Reading Desk
A Dividend Calendar Contains Different Kinds of Dates
A dividend announcement may list several dates that look similar in a diary but perform different jobs. Learning their labels is more useful than assuming…
Concepts in Focus
The Gap Between Bid and Ask Belongs in a Trading Example
A quote can show one price at which buyers are bidding and another at which sellers are asking. Treating those as a single interchangeable price hides the…
Concepts in Focus
More Shares After a Split Do Not Automatically Mean More Wealth
A stock split changes the number of shares used to represent an ownership interest. In a simplified proportional example, doubling the share count while…
Concepts in Focus
A Bond’s Face Value and Its Market Price Answer Different Questions
A bond example may display both a face value and a purchase price. They can differ, so a reader needs to know which amount is being used before following…