Underneath the stock prices that you can look up on any stock quoting site, there's a dynamic process of bids and asks. A bid is the amount someone is willing to pay for a stock. The ask is the amount the seller is willing to accept.
Regular folks just go to their Ameritrade accounts and pay the market price for the stock at any given time. Wall Street players get into the weeds with the bid/ask, trying to get the best possible price (when you're dealing with millions of dollars, those fractions of a cent per share start to add up).
The phrase "bidding up" has a couple connotations. In its more general sense, it just means something like "sending the stock higher," as in "investors are really bidding up shares of Apple today."
On a more technical level, the phrase can refer to a strategy for acquiring shares at a time when a stock is rising quickly. Basically, if you try to get too cute with your bid when a stock is skyrocketing, you could end up under-bidding the market and not getting any stock at all.
Bidding up means that you take the fact that the stock is rising into account when you place your bid, over-bidding to make sure you find a matching ask. Of course, this process helps fuel the upward rise in the stock, which can last until people finally start saying to themselves, "This is stupid. I'm just going to go buy bonds instead for a while."
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Finance: What is an Aggressive Growth Fu...58 Views
Finance a la shmoop what is an aggressive growth fund a go-go fund
and/or a high-octane fund ah yes investment funds have oh so many [People put sticker notes on investment fund file]
labels there are income funds comprised mostly of bonds usually in high yielding
dividend kind of stocks and you can buy them managed like in the form of a
mutual fund or unmanaged in the form of an index fund there are growth and
income funds usually a combo of stocks and bonds so in theory the funds value [Value tree appears]
grows but it also throws off a lot of cash along the way then there are just
growth funds notice the word aggressive isn't in there on the volatility
spectrum well they live out here right-hand side of the bell curve when [Growth funds on right side of a bell curve]
times are good they're very good when times are bad they're also not good in a
good year a growth fund can be up 15 20 % maybe more in a bad year well down
the same so now tack on the word aggressive in front of [Man puts aggressive label on investment fund file]
that fund flavor and you can maybe double the volatility for the good and
the bad and the high-octane fund is you know an allegory for gasoline on a fire [Man with gasoline tank by a fire]
it can really roast you nicely and warmly in the cold night or it can well [Fire creates explosion and man runs away]
do that so what do aggressive growth funds like these invest in you know go
go aggressive let's go not just once but twice
well they invest in typically risky volatile stocks a whole lot of
technology stocks that are unproven small tech companies are regular
favorite of this class is this little company the next Amazon in 20 years or [Woman sat at a computer desk]
is it Pieceocrap.com well over long periods of time and
inside of bull market era like decades where the market generally goes
up like it has been since 2009 while aggressive growth funds might compound
at 11 12 13 14 15% something like that whereas a bit more conservative
just growth funds might only compound at 8 9 or 10% but those two
percentage points of compounding actually matter a lot over the long-run
remember that rule of 72 well take the compound interest and divide it into 72 [Rule of 72 on a 100 dollar bill]
and that's how long it takes to double well it applies here as well the
aggressive, in aggressive growth fund should in theory anyway add two percent
in returns or reward in good times thanks in large part to the added risk
taken in that category so 36 years pass and that aggressive growth fund all else
being equal should be double of what a normal growth fund should be but with a [Aggressive and Growth funds marked on a graph]
whole lot more volatility see that 2% divided into our little rule of 72 thing
there well that's 36 years to double with that extra 2% so if you can handle
the volatile, violent, flame field rocky mountain style peaks and volatility [Lava spews out of volcano]
valleys of depression canyon and kill me now cave well then you'll love the view
from Everest Lookout and punitive taxes peak if you're an investor like the
wealthy and aggressive go go high octane funds yeah go go for it [Woman skiing on mountain and falls off the edge]
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