Tag - Investopedia

two puppies | the difference between SPX and SPY | Sheaff Brock

SPY and SPX—What’s the Diff and Does the Difference Matter?

In a rather cryptic and historical intro to the subject of options, Yahoo Finance states: “When it comes to the battle of SPY versus SPX, the first may have more volume, but the second has more value.” Size comparison: The SPDR S&P 500 (NYSE symbol SPY) is, in fact, the most widely traded contract on option exchanges. The SPX S&P 500 index options have far lower trading volume, but each contract is ten times the size of a SPY. Underlying security: Underlying the [...]

Risk and Volatility | Lesson from Warren Buffett | Sheaff Brock

The Lesson Warren Buffett Says Hasn’t Been Taught in Business School

“Risk is not the same as volatility, but that lesson has not customarily been taught in business schools,” Warren Buffett observes. “Volatility is far from synonymous with risk.” In a 2015 letter to shareholders, the Berkshire Hathaway CEO wrote about the difference between risk and volatility. Many investors, he observes, “conflate these concepts, costing themselves money.” Yes, stock prices will always be far more volatile than cash-equivalents, Buffett concedes, but over the long term, currency-denominated instruments are far riskier than [...]

Geopolitical Risk | Map of the World | Sheaff Brock

Geopolitical Risks One Factor in Investors’ “Wall of Worry”

“While a ‘wall of worry’ may sometimes consist of a single economic, political or geopolitical issue significant enough to affect consumer and investor sentiment, it more commonly comprises concerns on numerous fronts,” Investopedia explains. “The markets’ ability to climb a wall of worry reflects investor confidence that these issues will be resolved at some point.” Of course, “even when the financial markets are growing at a healthy rate, under financially sound circumstances, investors always find reasons to worry,” Investopedia [...]