Reading Time: 3 minutes VTSAX and VOO are the two largest index funds investors should consider when building their portfolios.  The Vanguard Total Stock Market Index, commonly known as VTSAX, and the Vanguard S&P 500 Index ETF (VOO) might seem similar to investors. But there are essential differences between both funds that investors should consider before deciding which one to invest in.  This guide will go over these differences and give you a thorough explanation of both. The guide’s goal is to provide enough information on VTSAX vs VOO so you can decide which investment fund to build your portfolio around.  Before we begin, we must emphasize that this website doesn’t focus on investment recommendations. Instead, we aim to educate eager investors and provide guidance.  With all that said, let’s start. What Is Vanguard Total Stock Market Index Fund (VTSAX) Vanguard Total Stock Market Index Fund, or VTSAX, exists to track the performance of the U.S. stock market or CRSP US total market index. This fund holds a diverse range of stocks of all cap sizes. The list includes large, mid, and small-cap stocks and growth and value stocks. So far, VTSAX holds 3535 stocks with a low expense ratio of 0.04%, which means it charges low fees to investors. Investing in VTSAX is only possible with a minimal $3,000 initial investment.  What Is Vanguard S&P 500 Index Fund? On the other hand, VOO, or the Vanguard S&P 500 Index Fund, only tracks the performance of the 500 biggest publicly traded companies in the U.S., as the name suggests. In addition, this fund holds large-cap stocks primarily, with most stocks coming from the tech sector. As a result, VOO has a slightly higher expense ratio of 0.03%. Other than that, VOO holds only 508 shares and doesn’t offer the possibility to invest in fractional shares.  Now that you have a general idea of VTSAX vs VOO, let’s look at the main differences between both investment funds. VTSAX vs VOO Differences The differences between investment funds will provide even more information to plan your future moves. Despite being similar, there are significant differences between both funds.  Cap Size The first difference between VTSAX vs VOO is the cap size. Namely, VOO tracks only large caps. Given that the fund tracks the S&P 500 index, you will rarely find a mid-cap. On the other hand, VTSAX tracks large-caps, mid-caps, and small-caps.  VTSAX offers a more diverse portfolio. It includes stocks from different sectors and market capitalizations. For example, 84% of the VOO fund is made of large caps, compared to 73% for VTSAX.  This means two things. One, VTSAX is less susceptible to market fluctuations and the performances of specific sectors. Two, VOO is heavily susceptible to potential market fluctuations. Remember that VOO tracks the S&P 500 index, which predominantly includes companies from the tech sector. Considering that, it’s important to remember that VOO can succumb to market fluctuations more easily than VTSAX.  Performance Another difference in the VTSAX vs VOO debate is market performance. This is a crucial difference that investors must pay attention to. Looking at the historical performance of both funds, we can conclude the following: The stats show almost identical market performances. With that said, these numbers do not necessarily indicate future returns, as is the case with the performance over the past year. Given that, it’s essential to consider other factors when deciding between these two funds. Other Differences To finish up, we will name other differences investors should pay attention to when choosing between VTSAX vs VOO. Those are: Wrap Up Choosing between VTSAX vs VOO as the desired investment fund depends on several factors. None are most important than your goals and risk tolerance. For example, VTSAX may be better for investors looking to diversify their investment portfolio. On the other hand, VOO may be more suitable for investors looking to invest in the tech sector. Look at both sides to determine which investment fund is right for you.

Reading Time: 4 minutes It takes a bit of theoretical know-how to get a good grasp of a reverse IPO. Terms like reverse takeover (RTO) and reverse merger add to the problem, and many become frustrated by the ordeal of having to go through these unfamiliar terms. To make matters worse, the topic itself is rife with economic jargon that further deters even avid readers. However, there are those who, against all odds, have decided to try their hand at the material. And the results? Those who have managed to brave the initial hardships have realized that the topic is relatively easy to understand. Today, we will be covering the ins and outs of reverse IPOS without any extra nebulous concepts and unexplainable terms.So, without further ado – what is a reverse IPO? The Nature of a Reverse IPO At its core, a reverse IPO is a process that allows private companies to acquire public companies. This process, also known as a reverse merger or reverse takeover, exists because companies come to a point where they need to go public. Now, going public is a lengthy endeavor, as there are many hurdles that companies need to go through to finalize the process. So, what happens? As a result, there are cases where private companies are looking to bypass this process. During such cases, private companies can opt to branch out and acquire a given public company to avoid the ordeal of having to go public through normal means. Now, I can probably guess what you are going to ask. Is it that profitable? Yes. Many companies have decided to take this route and it’s all public information. In fact, 398 reverse mergers took place in 2021 alone, which shows precisely how worthwhile reverse IPOs are. It is worth noting that SPAC reverse mergers are also part of this number. In short, SPAC reverse mergers are reverse mergers that involve public shell companies. I am sure that the entire process seems vague. After all, what good does knowing about the process do without an in-depth look into the pros and cons? Many people have heard about reverse takeovers, but few understand why they are that important. Let us focus on the technical aspects of it all. Understanding the Process As we mentioned, companies employ reverse mergers, IPOs, and takeovers for practical reasons. One of the main reasons is that reverse IPOs can save the company a lot of money. Many costs come with going public, and it often involves hiring teams dedicated to successfully finalizing the process. After all, companies that go public need to raise funds and appeal to a lengthy list of government regulations. The reason why there are so many regulations is that a public company gains the ability to be publicly listed and can be part of the capital market. This is usually done through companies without active operations and allows private companies to enter the market without constraining fundraising. Private companies that decide to undergo this process are either already affiliated with a public company or have managed to find a shell company to aid them in this process. The private company needs many shares (often between 50% and 80%) to make the process worthwhile and effectively gain control of the other company. The process can ultimately benefit both sides. A private company can avoid many problematic aspects of going public while a public company can end up owning shares of a growing business and even enter a new market. As you can imagine, reverse mergers can involve various companies and are often followed by many variables. In reality, no two reverse mergers are the same, and the reasons for them can be drastically different. However, as a general overview, here are some of the benefits and drawbacks that analysts associate with reverse takeovers: Benefits From A Reverse IPO Fewer expenses – as previously mentioned, not all companies can go public, even if they want to. Reverse IPOs are often the only option for companies that cannot afford IPOs. After all, fundraising and hiring dedicated legal teams cost a fortune. Less time – part of why reverse takeovers are cheaper is that they also take less time. Even if companies still need some dedicated teams, the number of assignments the team has to complete is smaller, and so are the expenses. More exposure – reverse mergers can sometimes be crucial to companies looking to branch out and reach more markets. Whether it is through reputation alone or ease of access, foreign investments are often vital for developed businesses. Drawbacks Stocks slump – private companies that are part of a reverse merger can end up with a sharp decrease in stock worth when the process finishes. If the private company lacks the means to deal with the transition, it may be in for a rough patch and even bankruptcy. Legal troubles – if the merger is not conducted properly, companies can end up with more expenses than expected, and might even be considered a public company but still pay the expenses that a private firm is liable to cover. This can lead to potential violations that can end even a reputable company. Shell fails – in some cases, private companies go through shell companies to aid them for help. When mergers occur, companies inherently entangle reputations. Therefore, a private company can leave a mark on its reputation by association and vice versa. Let’s Conclude Reverse IPO, mergers, and takeovers are varied and sometimes difficult to grasp. The reason is that the process is not one that many people are aware of and even less understand thoroughly. Should that deter you, as a reader, from reading up on it? Absolutely not. Although seemingly niche, reverse mergers play a significant role in the stock market and can be quite useful to seasoned investors. Analyzing them, on the other hand, is harder than it seems, as there are numerous benefits and drawbacks that are involved. Still, when researching investment opportunities, you should pay

Reading Time: 4 minutes When it comes to stocks, most people want to know how to make profitable investments. In time, those people become experienced investors. Then, they either start looking for safer options that guarantee smaller profits or take more risks for more returns. Yet, while every investor knows that they can earn by investing, few know whether they could owe money in stocks. So, can you owe money in stocks? You can, but only if you meet specific conditions. Here is how you can lose more than you invest in stocks. The Basics Of Stocks Although most investors know this, it is best to mention that all investments involve a degree of risk. Whether you want to or not, if you decide to invest, you risk losing some and all of the money you have invested. Losing everything, however, is one of those scenarios that tend to happen rarely, if at all. Chances are, you will not find yourself in a situation where you risk losing everything you have invested. That is unless you decide to back a business in its initial stages or you are a majority shareholder. In that case, investing becomes slightly riskier than it usually is. Those kinds of investments are undertaken by experienced investors that are beyond the scope of this article or the information presented here. As a result, there is no need to go in-depth on the topic. So, back to our topic. Can you owe money in stocks? Can you lose more than you invest in stocks? These are two things that no investor wants to experience. Sadly, as we mentioned before, you can owe money in stocks and lose more than you invest. Surprisingly enough, it depends on how you have decided to invest. In The Red Firstly, can a stock go negative? That is the question that intuitively interests new investors. Ultimately, the answer is that shares can never reach negative values. Stock shares will never fall below zero, even if the company you chose to invest in goes bankrupt. That does not mean that you can never owe money in stocks. So, can you owe money in stocks? There is one way for you to lose money investing. If you borrow money from your broker by opening a margin account, you could end up with debt more significant than your stock’s worth. In most cases, brokers will offer you a standard margin account. The standard margin account means that the broker can loan you no more than 50% of the value of your account. If, for example, you were to deposit $1000 cash or securities, a broker could give you up to $500 to use. Why would a broker loan you anything? That 50% is additional buying power. You can use this buying power to purchase more stocks or even purchase some you could not afford. Is the broker, then, setting you up to fail? No, not really. It is in your best interest to have as much buying power as possible. The more you invest, the bigger the returns. There is no going around this principle of investing. That does not mean that ludicrous sums can save you from losing money on horrible investments. The only thing the broker is doing is giving you more investing power. The decisions, nevertheless, are always yours. Staying Safe Once again, can you owe money in stocks? Yes. Can you lose more than you invest in stocks? Yes. Can a stock go negative? Luckily, no. If you consider that you need a margin account to owe money in stocks, you will instantly realize that there is an easy fix to that problem. What is the fix? Do not open a margin account. It is as simple as that. The benefits of having a margin account are clear. The more money you have, the more you can invest. Does that mean that you must borrow money from your broker? No. If you feel like that is the best option for you, by all means, take it. If not, you can always opt for a cash account. Cash accounts are usually the best option for beginner investors who are unwilling to take more risks than they have to. To invest is to put your money on the line with the goal of profiting. That is already risky enough. You are by no means obliged to put money that you do not have on the line. That is where the cash account comes into play. One Cash Account, Please! Cash accounts allow investors to deposit their funds and use them as the sole resource for purchasing stocks. It means you will be limited to the capital you have at your disposal, which is both good and bad. While you will not go into debt, you will also have less buying power. Lastly, on the topic of staying safe, there is one more thing you might want to avoid if you are not willing to risk going into debt – short selling. Short selling is the practice of betting on a share price falling. Investors can take part in short selling through various means, such as borrowing and selling shares that you plan on repurchasing (expecting a fall) and returning. Investors do this in hopes of catching shares, capitalizing on their fall, and then returning them at a profit. While short selling is a complicated process, investors willing to look into it should research stocks retroactively and find a pattern. For example, based on Statista’s records of stocks with the most short sell positions, Sky Harbour Group (49.88%) is in the lead. Sky Harbour is tailed by Acrimoto Inc. (41.52%) Conn’s Inc. (42.51%), and Camping World Holdings Inc. (41.37%). These companies and their stock records can be a strong foundation for future research. Conclusion You can owe money in stocks. You can lose more than you invest. A stock can never go negative. Does that mean that you will unavoidable owe money if you invest? No, not