Discretionary Account Definition. When Discretionary Trading Leads to Trouble. Value Line Index Definition. DEFINITION of 'Value Line Index' A stock index containing approximately 1,675 companies from the NYSE, American Stock Exchange, Nasdaq and over-the-counter market.
The Value Line Index has two forms: The Value Line Geometric Composite Index (the original equally-weighted index) and the Value Line Arithmetic Composite Index (an index which mirrors changes if a portfolio held equal amounts of stock.) These indexes are typically published in the Value Line Investment Survey, created by Arnold Bernhard, the founder and CEO of Value Line Inc. INVESTOPEDIA EXPLAINS 'Value Line Index' The "Value Line" where the index receives its namesake refers to a multiple of cashflow that Bernhard would superimpose over a price chart to normalize the value of different companies.
Value Line is one of the most respected investment research firms. Non-Systematic Risks - CFP.
FINRA - Home Page. Direct Participation Program (DPP) Definition. Capital Gains. Progressive Tax. Regressive Tax. Customer Accounts. Basis Points. Master over 2600 investment terms. Index: A - Risk Encyclopedia. Cyclical vs. Defensive Stocks, Equity in a nutshell - June 2013. Defensive stocks are usually said to be expensive, But this affirmation is not totally correct.
For a better, understanding, we are going to focus on three aspects that drive Cyclical and Defensive stocks performance and price. The first aspect is the beta of these stocks, also called the systemic risk. The beta coefficient is a statistical measure of the sensitivity of the stock vs. the market. In other words, if the be ta of a stock is 1.5, and the market drops by 10%, the stock is supposed to drop by 15%. The second aspect, is the stability of the Earnings Per Share (EPS).
The graph below shows this difference. The last aspect we are going to discuss is the Price Earnings Ratio or PE. Preemptive Right Definition. Defensive Stock Definition. DEFINITION of 'Defensive Stock' A stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market.
This is not to be confused with a "defense stock", which refers to stock in companies which manufacture things like weapons, ammunition and fighter jets. INVESTOPEDIA EXPLAINS 'Defensive Stock' Defensive stocks remain stable during the various phases of the business cycle. During recessions they tend to perform better than the market; however, during an expansion phase it performs below the market. To illustrate this phenomenon, consider a stock with a beta of 0.5. The utility industry is an example of defensive stocks because during all phases of the business cycle, people need gas and electricity. Also known as a "non-cyclical stock" because it is not highly correlated with the business cycle. Cyclical vs. Defensive Stocks, Equity in a nutshell - June 2013.
Cyclical Versus Non-Cyclical Stocks. Investors cannot control the cycles of the economy, but they can adjust their investing practices with its ebbs and flows.
Adjusting to economic transitions requires an understanding of how industries are characterized by their relationship to the economy. It's important for you to know the fundamental difference between cyclical and non-cyclical companies so that you can distinguish between sectors that are affected by economic changes and those that are more immune. Here we look at the industries that reside within these categories, and identify where it's best to put your money when the economy starts to decline. What Does Cyclical and Non-Cyclical Mean? These terms, cyclical and non-cyclical, refer to how highly correlated a company's share price is to economic fluctuations. The Concept The difference between cyclical and non-cyclical industries is simply the difference between necessity and luxury.
Contrast this to the new car you've had your eye on. Charting a Cyclical vs.
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