Steven Nickolas

Key Takeaways A short squeeze occurs when increased buying activity among short sellers drives the security price higher, forcing more short sellers to cover their positions. Short covering involves purchasing the security to close out an open short position, which can limit losses or realize gains depending on the price movement. High short interest can lead to a short squeeze as many short sellers try to exit their positions simultaneously, causing a rapid price increase.

Key Takeaways Market risk, or systematic risk, impacts a broad spectrum of assets and cannot be diversified away. It is influenced by macroeconomic factors. Unsystematic risk, or specific risk, is unique to a company or industry and can be mitigated through diversification across different asset classes. Beta measures an investment's volatility compared to the market; a portfolio with a beta of 2 is 100% more volatile than the market.

Vanguard does not offer a pure gold fund; However, it does have a fund that invests about one-quarter of its portfolio in precious metals and mining companies, providing indirect exposure to this market: The Vanguard Global Capital Cycles Fund (VGPMX). Key Takeaways Vanguard's VGPMX indirectly exposes investors to gold and other precious metals. Twenty-five percent or more of the fund is invested in securities whose principal business activities are in the precious metals and mining industry.