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Why are taxes on actively managed funds higher than those on index funds? | This depends on the particular index, of course. Capital gains taxes occur when stock is sold (for a profit). This occurs less frequently in an index fund: Where an active manager frequently buys and sells stocks (after all, he wants to be active :-) ), the index fund only sells stocks when the particular stock leaves ... |
How many days does Bank of America need to clear a bill pay check | This just happened to me with a Wells Fargo Bill Pay check. WF put a stop payment on the check. The money was taken out of my account immediately yet it is going to take 3-5 days to reappear in the account. I question these banking practices. Georgia Bank and Trust Company of GA does not do this. The Bill Pay check... |
What is the best way to invest in gold as a hedge against inflation without having to hold physical gold? | GLD, IAU, and SGOL are three different ETF's that you can invest in if you want to invest in gold without physically owning gold. Purchasing an ETF is just like purchasing a stock, so you're fine on that front. Another alternative is to buy shares of companies that mine gold. An example of a single company is Randgold... |
Why have I never seen a stock split? | Are you sure you're not just looking at prices that are adjusted for the split, e.g. Yahoo? For example, Gilead Sciences (GILD) split a few months ago, but if you look at a price chart, there isn't an interruption even though the split is clearly marked. (Look in the past six months; it split in January). However, you ... |
Why do people take out life insurance on their children? Should I take out a policy on my child? | My parents and I were suckered into buying this kind of thing when I was in high school. The sales people literally told us that it could be used to pay off student loans - they left out the "in the event of your death" part. We knew it was a life insurance policy, but were told that it would "mature" 6 months after gr... |
Is it taxable if someone return me money? | The $10,000 is not taxable to either of you, but the $500 is taxable income to you - and a deductible business expense for your friend. |
Why are U.S. credit unions not open to everyone? | It's required by law. 12 USC 1759 (b) requires that membership in a credit union be limited to one or more groups with a "common bond", or to people within a particular geographic area. For lots more gory details on how this is interpreted and enforced, you can read the manual given to credit unions by the National Cr... |
Is it normal to think of money in different “contexts”? | Well, this relates to how you interpret something's value. We can use that magazine and restaurant as an example. For you the extra $10-$30 more on a decent meal or wine is worth it while $5 for a magazine entertainment on a train ride might not be. This is how all markets work, people make decisions about how they val... |
mortgage vs car loan vs invest extra cash? | It depends on your tax rate. Multiply your marginal rate (including state, if applicable) by your 3.1% to figure out how much you are saving through the deduction, then subtract that from the 3.1% to get the effective rate on the mortgage. For example, if you are in the 28% bracket with no state tax impact from the mor... |
RSU taxation: when am I taxed, and how much? | Restricted Stock Units are different from stock options because instead of buying them at a particular strike price, you receive the actual shares of stock. They are taxed as ordinary income at the time that the restriction is lifted (you don't have to sell them to be taxed). Usually, you can choose to have a percentag... |
How much power does a CEO have over a public company? | This is a very good question and is at the core of corporate governance. The CEO is a very powerful figure indeed. But always remember that he heads the firm's management only. He is appointed by the board of directors and is accountable to them. The board on the other hand is accountable to the firm's shareholders an... |
Clear example of credit card balance 55 days interest-free “trick”? | Well, I answered a very similar question "Credit card payment date" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this... |
Are warehouse clubs like Costco and Sam's Club worth it? | I'm guessing it depends on how much you'd be paying for membership. If you save more than the membership costs you and you actually use the products you buy and they don't get thrown away, then it's worth it. I'm not a member of a warehouse club but I do have a membership for another wholesale outlet, so I know a littl... |
Buying a house, Bank or rent to own? | 'Rent to own' is not a precise, single agreement. It can be whatever the seller and you agree to. It's a unique seller that would agree to this. Keep in mind, most sellers are needing to get their money in full to buy their next house. You might find an investor willing to work with you, but only for an inflated price,... |
Can I buy put options on an ADR? | Some ADRs have standardized options that trade on US exchanges. If your stock/ADR is one of those, then you find the put option through most brokerages that deal with stock options and trade the option like you would on a regular stock. If your ADR does not have standardized options, then your options will depend on ... |
What could cause a stock to trade below book value? | A company's stock value is indicative of the market's collective belief of the future of the company. The relationship of between price and book value will vary according to the quality of the company, the category of stock, etc. In extreme cases, say Bank of America, the stock trades at a fraction of book, because BOA... |
Investing in hemp producers in advance of possible legalization in Canada? | Hemp is already pretty easily grown by farmers here. Canada had 50,000 acres of legal hemp in 2006, but it's been in decline the last 3 years due to the cost, lack of demand, and the high values of some other crops. It's also difficult to harvest due to its size. It's possible that the demand for hemp products will i... |
Can you beat the market by investing in double long ETFs? [duplicate] | Here is a simple example of how daily leverage fails, when applied over periods longer than a day. It is specifically adjusted to be more extreme than the actual market so you can see the effects more readily. You buy a daily leveraged fund and the index is at 1000. Suddenly the market goes crazy, and goes up to 2000 -... |
Pay index fund expense ratios with cash instead of fund balance | It seems at most a cosmetic difference - nothing keeps you from adding the 9$ cash to the fund the same day the fees are deducted from the shares. |
Dividends - Why the push to reinvest? | There can be a good reason if you own shares issued in a different country: For example, if you are in the UK and own US shares and take the dividend payments, you get some check in US dollars that you will have to exchange to UK£, which means you pay fees - mostly these fees are fixed, so you lose a significant percen... |
Someone asks you to co-sign a loan. How to reject & say “no” nicely or politely? | Oh, how about something like "I'd rather not. It exposes me to more financial liability than I want. If you were in the hospital, or some emergency like that, it might be different, but..." |
Why is there such disparity of max contribution limits between 401K accounts and regular IRA accounts? | The 401k was not written with the specific intent of enabling retirement savings. Why do tax advantages favor employees of large employers... It seems that large businesses have been more effective at influencing legislators despite that there are more people are employed by small than large businesses. |
Do I need to be proactive about telling the tax man (HMRC) I earn more than the child benefit threshold? | unregister for child benefit but apparently If I do that then my wife will stop getting the automatic national insurance stamp each year and will lose years of state pension You probably got this wrong according to Citizen's Advice. You can choose not to receive any Child Benefit, if you don't want to pay the extra tax... |
Will having a secondary signee with bad credit on a mortgage raise or lower interest? | between two people purchasing a house together, one with good and one with bad credit, will having both persons on the loan raise the interest rates. If the house deed is on both names, generally the Bank would insist the loan should also be on both of your names. This to ensure that Bank has enough leverage to recover... |
Do people tend to spend less when using cash than credit cards? | I thought I'd see if the credit card companies had anything to say about this while trying to get merchants to sign up. I went to visa.com, clicked "Run Your Business" in the top nav, then "Accept Visa Payments". This page has a "More benefits of accepting Visa" link with an overlay (which I can't easily link directly ... |
Why would you elect to apply a refund to next year's tax bill? | It is a bad deal. It saves the government from processing your refund as a check or an ACH deposit, and lets them keep your money -- money that they overwithheld! -- interest-free for another year. Get it back. :) |
Why do governments borrow money instead of printing it? | Yes - Simply put, printing money is called "monetizing the debt" and would result in some nasty inflation. It's a no-no as it quickly devalues the currency and makes it far more difficult to borrow in the future, an entire generation will remember getting burned by it. If, say, Canada's currency were suddenly worth hal... |
What software do you recommend for Creating a To-The-Penny, To-The-Day Budget? | I've tried Mint, and I've tried Quicken. Now, I think Quicken is an annoying, crashy little piece of software, but it is also quite capable; overall I think it has the features you want. You can enter your bills, broken down by category, in advance. You can enter your paychecks, broken down by category (gross income, f... |
When is Cash Value Life Insurance a good or bad idea? | Here's what I'd consider: |
In a competitive market, why is movie theater popcorn expensive? | I'm kind of shocked that no formal behavioral modeling has been proposed as an explanation yet. One such model would be steep (hyperbolic, quasi-hyperbolic) discounting. Consumers would rather pay for popcorn later than for an expensive movie ticket now. For instance, consumers might when purchasing the ticket see a ... |
how much of foreign exchange (forex/fx) “deep liquidity” is really just unbacked leverage and what is the effect? | In essence the problem that the OP identified is not that the FX market itself has poor liquidity but that retail FX brokerage sometimes have poor counterparty risk management. The problem is the actual business model that many FX brokerages have. Most FX brokerages are themselves customers of much larger money center ... |
Value investing | The June 2014 issue of Barclays Wealth's Compass magazine had a very nice succinct article on this topic: "Value investing – does a rules-based approach work?". It examines the performance of value and growth styles of investment in the MSCI World and S&P500 arenas for a few decades back, and reveals a surprisingly co... |
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