Creative destruction is the dismantling of long-standing practices in order to make way for innovation and is seen as a driving force of capitalism. Creative destruction is most often used to describe disruptive technologies such as the railroads or, in our own time, the internet. The term was coined in the early 1940s by economist Joseph Schumpeter, who observed real-life examples of creative destruction, such as Henry Ford’s assembly line. Creative destruction can be seen across many different industries such as technology, retail, and finance. Creative destruction often has unintended consequences such as temporary losses of jobs, environmental issues, or inequity.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Terms

Investment Term for the Day - Creative Destruction

Business cycles are a type of fluctuation found in the aggregate economic activity of a nation -- a cycle that consists of expansions occurring at about the same time in many economic activities, followed by similarly general contractions (recessions). This sequence of changes is recurrent but not periodic. Business cycles are comprised of concerted cyclical upswings and downswings in the broad measures of economic activity—output, employment, income, and sales. The alternating phases of the business cycle are expansions and contractions (also called recessions). Business cycles are marked by the alternation of the phases of expansion and contraction in aggregate economic activity, and the movement among economic variables in each phase of the cycle. Aggregate economic activity is represented by not only real GDP but also the aggregate measures of industrial production, employment, income, and sales, which are the key coincident economic indicators used for the official determination of U.S. business cycle peak and trough dates.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Business Cycle

An amalgamation is a combination of two or more companies into a new entity. Amalgamation is distinct from a merger because neither company involved survives as a legal entity. Instead, a completely new entity is formed to house the combined assets and liabilities of both companies. The term amalgamation has generally fallen out of popular use in the United States, being replaced with the terms merger or consolidation even when a new entity is formed. But it is still commonly used in countries such as India. Amalgamation is a way to acquire cash resources, eliminate competition, save on taxes, or influence the economies of large-scale operations. Amalgamation may also increase shareholder value, reduce risk by diversification, improve managerial effectiveness, and help achieve company growth and financial gain. On the other hand, if too much competition is cut out, amalgamation may lead to a monopoly, which can be troublesome for consumers and the marketplace.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Amalgamation

Adverse selection refers generally to a situation in which sellers have information that buyers do not have, or vice versa, about some aspect of product quality. In other words, it is a case where asymmetric information is exploited. Asymmetric information, also called information failure, happens when one party to a transaction has greater material knowledge than the other party. Typically, the more knowledgeable party is the seller. Symmetric information is when both parties have equal knowledge. In the case of insurance, adverse selection is the tendency of those in dangerous jobs or high-risk lifestyles to purchase products like life insurance. In these cases, it is the buyer who actually has more knowledge. To fight adverse selection, insurance companies reduce exposure to large claims by limiting coverage or raising premiums.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Adverse Selection

Absolute advantage is the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time or to produce the same quantity of a good or service per unit of time using a lesser quantity of inputs, than its competitors. Absolute advantage can be accomplished by creating the good or service at a lower absolute cost per unit using a smaller number of inputs, or by a more efficient process. Absolute advantage explains why it makes sense for individuals, businesses, and countries to trade with each other. Since each has advantages in producing certain goods and services, both entities can benefit from the exchange.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Absolute Advantage 

Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to proportion, which means a process where whatever is being allocated will be distributed in equal portions. If something is given out to people on a pro-rata basis, it means assigning an amount to one person according to their share of the whole. While a pro-rata calculation can be used to determine the appropriate portions of any given whole, it is often used in business finance. Pro rata is also used to determine how much of a distribution from a qualified retirement account is taxable when the account contains before and after-tax dollars This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Pro Rata 

A put option is a contract giving the option buyer the right, but not the obligation, to sell—or sell short—a specified amount of an underlying security at a predetermined price within a specified time frame. This predetermined price at which the buyer of the put option can sell the underlying security is called the strike price. Put options are traded on various underlying assets, including stocks, currencies, bonds, commodities, futures, and indexes. A put option can be contrasted with a call option, which gives the holder the right to buy the underlying security at a specified price, either on or before the expiration date of the option contract.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Put Option

A prospectus is a formal document required by and filed with the Securities and Exchange Commission that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds. The prospectus can help investors make more informed investment decisions because it contains a host of relevant information about the investment or security. In areas other than investing, a prospectus is a printed document that advertises or describes an offering such as a school, commercial enterprise, forthcoming book, etc. All forms of prospectus exist to attract or inform clients, members, buyers, or investors. Companies that wish to offer bonds or stock for sale to the public must file a prospectus with the Securities and Exchange Commission as part of the registration process.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Prospectus

Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths. Five Forces analysis is frequently used to identify an industry's structure to determine corporate strategy. Porter's model can be applied to any segment of the economy to understand the level of competition within the industry and enhance a company's long-term profitability. Porter's 5 forces are: Competition in the industry Potential of new entrants into the industry Power of suppliers Power of customers Threat of substitute products This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Porter's 5 Forces

The Phillips curve is an economic theory that inflation and unemployment have a stable and inverse relationship. Developed by William Phillips, it claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment. The original concept of the Phillips curve has been somewhat disproven due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation. The inverse relationship between unemployment and inflation is depicted as a downward-sloping, concave curve, with inflation on the Y-axis and unemployment on the X-axis. Increasing inflation decreases unemployment, and vice versa.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Phillips Curve

Operating income is an accounting figure that measures the amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold. Operating income also called income from operations takes a company's gross income, which is equivalent to total revenue minus COGS, and subtracts all operating expenses. A business's operating expenses are costs incurred from normal operating activities and include items such as office supplies and utilities. Operating income is a measurement that shows how much of a company's revenue will eventually become profits considering its business operations. It's a measurement of what money a company makes only looking at the strictly operational aspect of its company. Operating income factors in two major types of expenses: cost of goods sold and operating expenses.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Operating Income

Fringe benefits are additions to compensation that companies give their employees. Some fringe benefits are given universally to all employees of a company while others may be offered only to those at executive levels. Some benefits are awarded to compensate employees for costs related to their work while others are geared to general job satisfaction. Employers use fringe benefits to help them recruit, motivate, and keep high-quality people. Common fringe benefits are basic items often included in hiring packages. These include health insurance, life insurance, tuition assistance, childcare reimbursement, cafeteria subsidies, below-market loans, employee discounts, employee stock options, and personal use of a company-owned vehicle. This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Fringe Benefits 

Futures are derivative financial contracts that obligate parties to buy or sell an asset at a predetermined future date and price. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date. Underlying assets include physical commodities and financial instruments. Futures contracts detail the quantity of the underlying asset and are standardized to facilitate trading on a futures exchange. Futures can be used for hedging or trade speculation. Futures—also called futures contracts—allow traders to lock in the price of the underlying asset or commodity. These contracts have expiration dates and set prices that are known upfront. Futures are identified by their expiration month.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Futures

Free carrier is a trade term dictating that a seller of goods is responsible for the delivery of those goods to a destination specified by the buyer. When used in trade, the word free means the seller has an obligation to deliver goods to a named place for transfer to a carrier. The destination is typically an airport, shipping terminal, warehouse, or other location where the carrier operates. It might even be the seller's business location. The seller includes transportation costs in its price and assumes the risk of loss until the carrier receives the goods. At this point, the buyer assumes all responsibility.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Free Carrier

Escrow is a legal concept describing a financial agreement whereby an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction. Escrow accounts are managed by the escrow agent. The agent releases the assets or funds only upon the fulfilment of predetermined contractual obligations. Money, securities, funds, and other assets can all be held in escrow. Escrow is a financial process used when two parties take part in a transaction and there is uncertainty about the fulfilment of their obligations. Situations that may use escrow can involve Internet transactions, banking, intellectual property, real estate, mergers and acquisitions, law, and more.This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

Investment Term for the Day - Escrow

An audio glossary of investment terms for young people and intending investors.Earn $SYBL as you listen by signin up on: https://tse.sybel.io/110927A6F4This show is part of the Spreaker Prime Network, if you are interested in advertising on this podcast, contact us at https://www.spreaker.com/show/4432332/advertisement

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Investment Terms

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