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What is the incentive for a bank to refinance a mortgage at a lower rate? | Banks make money on load origination fees. The "points" you pay or closing costs are the primary benefit to the banks. A vast majority of the time risks associated with the mortgage are sold to another party. FYI, the same is true with investment banks. In general, the transaction costs (which are ignored by modern finance theory) are the main thing running the incentives for the industry. |
How much will a stock be worth after a merger? | If this is a one to one share exchange with added cash to make up the difference in value, you're getting 1 share of XYZ plus $19.20 in cash for each share of ABC. They calculated the per share price they're offering ($36) and subtracted the value of XYZ share at the time of the offer ($16.80) to get the cash part ($19.20). The value of XYZ after is subject to investor reaction. Nobody can accurately predict stock values. If you see the price dropping, owners of XYZ are selling because they feel that they no longer wish to own XYZ. If XYZ is rising, investors feel like the merger is a positive move and they are buying (or the company is buying back shares). Bottom line is the cash is a sure thing, the stock is not. You called it a merger, but it's actually a takeover. My advice is to evaluate both stocks, see if you wish to continue owning XYZ, and determine whether you'd rather sell ABC or take the offer. The value of ABC afterwards, if you decline the offer, is something that I cannot advise you on. |
Do ETF dividends make up for fees? | It depends. Dividends and fees are usually unrelated. If the ETF holds a lot of stocks which pay significant dividends (e.g. an S&P500 index fund) these will probably cover the cost of the fees pretty readily. If the ETF holds a lot of stocks which do not pay significant dividends (e.g. growth stocks) there may not be any dividends - though hopefully there will be capital appreciation. Some ETFs don't contain stocks at all, but rather some other instruments (e.g. commodity-trust ETFs which hold precious metals like gold and silver, or daily-leveraged ETFs which hold options). In those cases there will never be any dividends. And depending on the performance of the market, the capital appreciation may or may not cover the expenses of the fund, either. If you look up QQQ's financials, you'll find it most recently paid out a dividend at an annualized rate of 0.71%. Its expense ratio is 0.20%. So the dividends more than cover its expense ratio. You could also ask "why would I care?" because unless you're doing some pretty-darned-specific tax-related modeling, it doesn't matter much whether the ETF covers its expense ratio via dividends or whether it comes out of capital gains. You should probably be more concerned with overall returns (for QQQ in the most recent year, 8.50% - which easily eclipses the dividends.) |
Splitting Hackathon Prize Money to minimize tax debt | A simple option is to ask your teammates to send you their portion of the tax bill. This option makes everyone's taxes easier, especially since it is very likely that they have already sent in their tax returns. |
Is this trick enough to totally prevent bankrupcy in a case of a crash? | Your strategy fails to control risk. Your "inversed crash" is called a rally. And These kind of things often turn into bigger rallies because of short squeezes, when all the people that are shorting a stock are forced to close their stock because of margin calls - its not that shorts "scramble" to close their position, the broker AUTOMATICALLY closes your short positions with market orders and you are stuck with the loss. So no, your "trick" is not enough. There are better ways to profit from a bearish outlook. |
How to deposit a cheque issued to an associate in my business into my business account? | Have the check reissued to the proper payee. |
I'm only spending roughly half of what I earn; should I spend more? | Keep saving or investing, but set aside a relatively modest amount for "fun money". That way, you can go have a good time without thinking too much about what you're spending within the limits you spend for yourself. You don't need to spend lavishly to have a good time! Not having the stress on your shoulders of worrying about money is a huge thing. Savor it! |
Do I not have a credit score? | You can't get your credit score for free, just the report with the information the score is based on. If you got credit reports through annualcreditreport.com, the Score tab would typically contain an advertisement for purchasing your score. If you have an ad-blocker enabled, that might be blocked, explaining the blank page. Try turning off any browser extensions that alter how pages are shown. The accounts page/tab/section should show something like "0 open accounts" or similar, to indicate that it is loading data. Your lack of credit history probably does mean you don't have a credit score, so it's probably not worth paying anything to find that out. The focus should be on the accuracy of the underlying report, since you can do something about that. Should I be worried? I'd say no on that. You'll have an easier time getting credit (and better terms) in the future if you start now with some account, even if it's a secured credit card you don't use much, because the age of the oldest and average accounts are factors in credit scoring models. |
Incorporating real-world parameters into simulated(paper) trading | I think you're on the wrong track. Getting more and more samples from the real world does not make your backtest more accurate, it just confirms that your strategy can withstand one particular sample path of a stochastic process. The reason why you find it simple to incorporate fees, commissions, taxes, etc. is because they're a static and constant process -- well they might change over time but most definitely uncorrelated to the markets. Modelling overnight returns or the top levels of the order book the next day is serious work. First you have to select a suitable model (that's mostly theoretical work but experience can help a lot). Then, in order to do it data-driven, you'd have to plough through thousands of days of sample data on a set of thousands of instruments to get a "feeling" (aka significant model parameters). Apropos data mining, I think Excel might be the wrong tool for the job. Level-2 data (even just the first 10 levels) is a massive blob. For example, the NYSE OpenBook historical data weighs in at a massive 15 TB compressed (uncompressed 74 TB) for the last 10 years, and costs USD 200k. Anyway, as for other factors to take into account: So how to account for all this in a backtest? Personally, I would put in some penalty terms (as % on a return basis) for every factor you want to consider, don't hardcode them. You can then run a stress test by exploring these parameters (i.e. assign some values in the range of 0 to whatever fits). Explore them individually (only set one penalty term at a time) to get a feeling how the strategy might react to stress from that factor. Then you can run the backtest with typical (or observed) combinations of penalty factors and slowly stress them altogether. Edit Just to avoid confusion about terminology. A backtest in the strict sense (had I implemented this strategy X years ago, what would have happened?) won't benefit from any modelling simply because the real-world "does the sampling" for us. However, to evaluate a strategy's robustness you should account for the additional factors and run some stress tests. If the strategy performs well in the real-world or no-stress scenario but produces losses once a tiny slippage occurs every now and again, you could conclude that the strategy is very fragile. The key is to explore the maximum stress the strategy can handle (by whatever measure); if a lot you can call the strategy robust. The latter is what I personally call a backtest; the first procedure would go by the name "extension towards the past" or so. Some lightweight literature: |
How do I explain why debt on debt is bad to my brother? | The only thing that comes to mind is a recent HBO Real Sports segment (http://www.youtube.com/watch?v=WDjkbgrgcmo) on a couple of NFL players who blew all of their money. Seeing how they've ended up might make the right impression, but given that your brother ran up $148K in debt, I'm not optimistic. |
Why is a stock dividend considered a dividend? What makes it different from a stock split? | A stock dividend isn't exactly a split. Example: You have 100 shares of stock worth $5 a share (total value $500). The company wants to distribute a dividend worth 1%. You could expect a check for $5. But If they wanted to do a stock dividend they could send you 0.01 shares for every share you own, in your case you will be given a single share worth $5. Now you own 101 shares. Why a share dividend? It doesn't take cash to give the dividend. It keeps the money invested in the company. Some investors re-invest a cash dividend, some don't. A cash dividend is generally taxable income for the investor; a stock dividend isn't. Some investors prefer one over the other, but it depends on their specific financial picture. Neither a stock dividend, a cash dividend or split changes anything. The split changes the price to meet a goal. The cash dividend lowers the price by sending excess cash to the investors. The stock dividend lowers the price by creating new shares and retaining cash. It company picks the message and the method. depending on their goals and situation. Remember that a company may want to give a dividend because they have a history of doing so, but not have the cash to do so. It is like a split because the number of shares you own will go up, and the price per share will go down. But a split is generally done to bring the price of a share to within a specific range. The company sees a benefit to having a stock mid priced, instead of very high or very low. |
Pros & cons of investing in gold vs. platinum? | It is only wise to invest in what you understand (ala Warren Buffet style). Depending on how much money you have, you might see fit to consult a good independent financial advisor instead of seeking advice from this website. A famous quote goes: “Those who say, do not know. Those who know, do not say” |
Can a company block a specific person from buying its stock? | A more serious problem: how do you know who's really buying your stock? "Shell companies" are an increasingly obvious problem in corporate and tax accountability. There are jurisdictions where companies can be created with secret lists of directors and shareholders. If stock is bought by one of these companies, it is very hard to trace it to a particular individual. |
What caused this drop? | I do not fully understand the transactions involved, but it appears that there was a reverse stock split (20:1) and some legal status change as well on June 29th. This seems to be the cause for the change in valuation of the stock as the dates match the drop. https://www.otcmarkets.com/stock/RMSLD/filings |
Is it common for a new car of about $16k to be worth only $4-6k after three years? | It isn't common to lose that much value in 3 years, but it is possible. If you don't take care of small dents, scratches, etc., you can quickly reduce the value far beyond what you might expect looking at graphs. Another big factor is the trim level of the car that you purchase. If you spend $30,000 for the highest trim level of a car, instead of $22,000 for the lowest trim level, the higher trim car could lose 50% of it's value while the lower trim car loses only 35%. There's no way to know why the OP of your linked question had such a large loss, but again, that's not the usual experience. It is definitely a good idea to consider used though. |
Are there any other investing methods I should look into? | 401Ks and IRAs are types of retirement accounts. They have rules regarding maximum amount of investments per year; who can invest; destructibility; and the tax treatment of the growth. Stock, bonds, mutual funds, ETFs are all types of investments that can exist either inside or outside of the retirement account. Some 401Ks restrict the type of investments you can have, others allow you to own almost anything. Any investment is a risk, and there is no guarantee that it will grow. Look around the site for beginning investment advice. You should start with the 401K offered by your company especially if they have matching funds. That is free money. Many suggest you invest enough to get the match, then invest with an IRA. Look into IRAs because under US tax law you can still make a 2013 investment up until tax day 2014. Take the time before tax day to decide on Roth or Regular IRA. The more exotic investments take more time to understand and should not be a concern until you have laid out your basic retirement accounts. |
Is there a candlestick pattern that guarantees any kind of future profit? | I would go even farther than Victor's answer. There is little evidence that candlestick patterns and technical analysis in general have any predictive power. Even if they did in the past, of which there is some evidence, in modern times they are so easy to do on computers that if they worked algorithmic traders would have scanned almost all traded stocks and bought/sold the stock before you even had a chance to look at the graph. While the best technical traders who are very good at quickly using pattern recognition across many indicators as Victor mentioned might be able to add some advantage. The odds that a pattern so simple to code such as Bullish Engulfing would have predictive power is tiny. |
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan? | You seem to think that you are mostly paying interest in the first year because of the length of the loan period. This is skipping a step. You are mostly paying interest in the first year because your principle (the amount you owe) is highest in the first year. You do pay down some principle in that first year; this reduces the principle in the second year, which in turn reduces the interest owed. Your payments stay the same; so the amount you pay to principle goes up in that second year. This continues year after year, and eventually you owe almost no interest, but are making the same payments, so almost all of your payment goes to principle. It is a bit like "compounded interest", but it is "compounded principle reduction"; reducing your principle increases the rate you reduce it. As you didn't reduce your principle until the 16th year, this has zero impact on the interest you owed in the first 15 years. Now, for actual explicit numbers. You owe 100,000$ at 3% interest. You are paying your mortgage annually (keeps it simpler) and pay 5000$ per year. The first year you put 3000$ against interest and 2000$ against principle. By year 30, you put 145$ against interest and 4855$ against principle. because your principle was tiny, your interest was tiny. |
Owning REIT vs owning real estate - which has a better hypothetical ROI? | You've already hit on the big difference. If you buy a property, you've made a big commitment, for better or worse. If you bought wisely, you'll be very happy. If not, you could go bankrupt. An REIT spreads out the risk, but the reward isn't as great. There's less barrier to entry in buying shares of an REIT than there is in buying an investment property: money, time, maintenance. The answer for you depends on what level of effort you want to put into your investment. If you are all ready to pick up an investment property, make the down payment, get appraisal and inspection, clean up the house, and fill it with tenants, then go for it. Otherwise, research some REITs and buy some shares. (Disclaimer: I have a rental property that's doing pretty well now.) |
Interest on Amount Exceeding CC Balance? | In the US, if your monthly statement was issued by the credit card company on January 1 and it showed a balance of $1000, then a payment must be made towards that balance by January 25 or so, not February 1 as you say, to keep the card in good standing. The minimum payment required to keep the card in good standing is specified in your monthly statement, and failure to meet this requirement can trigger various consequences such as an increase in the interest rate charged by the credit card company. With regard to interest charges, whether your purchase of $2000 on January 3 is charged interest or not depends entirely on what happened the previous two months. If you had paid both your monthly statements dated November 1 and December 1 of the previous year in full by the their respective due dates of November 25 and December 25, and the $1000 balance on the January 1 statement is entirely due to purchases (no cash advances) made in December, then you will not be charged interest on your January purchase of $2000 as long as you pay it off in full by February 25 (the charge will appear on your February 1 statement). But, if you had not paid your December 1 statement in full by December 25, then that $1000 billed to you on January 1 will include purchases made during December finance charges on the unpaid balance from the previous month plus finance charges on the purchases made during December. The finance charges will continue to accumulate during January until such time as you pay off the bill in full (these charges will appear on your February 1 statement), hopefully by the due date of January 25. But even if you pay off that $1000 in full on January 25, your charge of $2000 on January 3 will start to accumulate finance charges as of the day it hits the account and these finance charges will appear on your February 1 statement. If you paid off that $1000 on January 10, say, then maybe there will be no further finance charges on the $2000 purchase on January 3 after January 10 but now we are getting into the real fine print of what your credit card agreement says. Ditto for the case when you pay off that $1000 on January 2 and made the $2000 charge on January 3. You most likely will not be charged interest on that $2000 charge but again it depends on the fine print. For example, it might say that you will be charged interest on the average of the daily balances for January, but will not be charged interest on purchases during the February cycle (unless you miss the February 25 payment and the whole cycle starts all over again). As a general rule, it takes two monthly cycles of payment in full by the due date before one gets into the state of no finance charges for new purchases and effectively an "interest-free" loan of $2000 from January 3 (date of purchase) till February 25 (due date of payment). Matters become more complicated when cash advances are taken from a credit card which are charged interest from the day they are taken but don't trigger finance charges on new purchases or the so-called "zero percent balance transfer offers" are accepted. |
Is insurance worth it if you can afford to replace the item? If not, when is it? | As a rule, purchasing fairly priced (minus a spread) insurance on items you can afford to replace is a bad idea. However, in addition to the points mentioned in the previous answers, one should note that many types of insurance are UNDERpriced because on average people do not make claims even though they are entitled to them. If you purchase something moderately priced at Best Buy and get the extended warranty and it breaks down a year later, you will be unlikely to even remember that you purchased the insurance much less go through the trouble of making a claim. More likely you will just go buy a replacement or whatever the latest and greatest iteration is. It's like homeowner's insurance--an amazing number of things is covered but no one ever makes claims, so it is cheap. If you are a person who remembers and utilizes warranties and insurance, there are many types of insurance that will save you money in expectation. The other thing is that you know more about your own riskiness than the insurer does. I had a girlfriend who bought super comprehensive insurance on her crappy old car. I was quite stern with her about it but could not change her mind. She totaled it a few months later. They bought her a replacement. She got in a more serious accident with that car and got yet another one in addition to payment of her medical care, which did not even go to her health care insurance. Yes, her rates went up, but not fast enough to deal with how risky she was. Another example: I used to carry an e-book reader around in my shirt pocket and read it any time I had a chance. Cheap item and not that delicate, but since I had it with me all the time and used it constantly, it was a big risk for the store. The extended warranty would have been a great idea. In short, avoid extended warranties and insurance on things you can afford to lose unless you know that you are high risk or are otherwise more likely than average to make a claim. |
Will there always be somebody selling/buying in every stock? | Will there be a scenario in which I want to sell, but nobody wants to buy from me and I'm stuck at the brokerage website? Similarly, if nobody wants to sell their stocks, I will not be able to buy at all? You're thinking of this as a normal purchase, but that's not really how US stock markets operate. First, just because there are shares of stock purchased, it doesn't mean that there was real investor buyer and seller demand for that instrument (at that point in time). Markets have dedicated middlemen called Market Makers (NASDAQ) or Specialists (NYSE), who are responsible to make sure that there is always someone to buy or sell; this ensures that all instruments have sufficient liquidity. Market Makers and specialists may decide to lower their bid on a stock based on a high number of sellers, or raise their ask for a high number of buyers. During an investor rush to buy or sell an instrument (perhaps in response to a news release), it's possible for the Market Maker / specialist to accumulate or distribute a large number of shares, without end-investors like you or I being involved on both sides of the same transaction. |
How to amend an amended return? | File a 2nd amended return that corrects the mistake I made on the 1st amended return This. Pay the $500 before April 27th and try to get it back later This. |
Moving Coin Collection to Stapled Coin Pockets | I would be wary of having coins in containers with cardboard. Ideally you want the coins to be in an airtight envelope made of plastic to minimize any chance of oxidation or reaction with chemicals in the air. Cheap, retail coins like you would find in a Whitman collection are not generally going to hold value well. Sometimes you can sell a collection and break even if you have a nice complete set, but in general VF coins with common dates will not appreciate at all. Investment coins usually are high-priced items that sell for thousands each, not the sort thing you find in Whitman folders. In general, collectibles are bad investments in the US because IRS rules tax gains as ordinary income. So, unless you sell them under the table or have really low income, you lose a lot of your profit. If you enjoy collecting, focus on the fun of it, worrying about investment in coin collections is a joy killer. A Parting Anecdote... When I was a kid I painstakingly assembled a lot of BU rolls, because that was the hot thing back then. I wrote on them "DO NOT OPEN FOR 10 YEARS". You know how much a 1980 BU roll of Lincoln cents is worth now, 40 years later? $2.00 on eBay. Some days I spend more on lunch than the worth of my entire Lincoln cent collection. |
At what age should I start or stop saving money? | As all said, the age limitation thing is nothing, and saving money not necessarily means to live poor nor Skimpy, spend your needs and try to get what you need instead of what you want, the 24 years old is a good start for saving money, the whole life still in front of you Good luck! |
How to teach personal reconciliation and book balancing | If you are wanting to teach your kids basic accounting principles there is some good stuff on Khan Academy. However most of the stuff takes practice to really make it hit home and its kinda boring (Especially to kids who may or may not care about it). Maybe if you help them set up an account on Mint so that they are at least aware of their finances. Think it also has a heap of videos you can watch that teaches basic personal finance. If you actually want them to understand the techniques and methods behind creating & maintaining a personal ledger/journal and reconciling it against a bank account you are getting into what undergraduates study and there are plenty of first year textbooks around. Look around for a second hand one that is a few revisions old and they are usually dirt cheap (I scored one for only a dollar not that long ago). I feel like the mindset is what matters most. Journals and all that jazz are easy if you have the right mindset. That is something that you really have to demonstrate to your children rather than teach. Meaning you yourself keeping your finances in order and showing them how you organise and file your bills/ credit cards etc. (So they learn the importance of keeping financial records; meaning in the future when its talked about it doesn't fall on deaf ears) Emphasize the whole "living within your means" because even if they don't understand bookkeeping or learn anything else at least their finances won't turn out too bad. |
For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it? | Valuation by definition is what an item is worth, not what you paid for it. Net worth should be market value for fixed assets or "capital" goods. I would consider this cars, real property, furniture, jewelry, appliances, tools, etc. Everything else can be valued by liquidation value. You can use valuation guides for tax deductions as a way to guide your valuation. Insurance companies usually just pick a percentage of your home's value as a guesstimate for content value. I could see doing this as a way to guide purchase decisions for appliances, cars or the like. But if you are trying to figure out the market value of your socks and underwear, I would argue that you're doing something that's a little silly. |
Tax deductions on empty property | If the building has no income, it also probably has minimal expenses. The heat, water and electricity costs are nearly zero. They are letting the value depreciate, and taking it off the taxes. I also suspect the condition of the building is poor, so any effort to make the building productive would be very costly. Many cities combat this by setting the tax on empty buildings or empty lots at a much higher rate. Or they set the value of the property at a high valuation based on what it could generate. Sometimes this is only targeted at some sections of the city to encourage development. They also offer tax breaks when the owner of a house has the house as their principal residence. |
CFD market makers: How is the price coupled to the underlying security? | CFD providers typically offer CFDs to investors using either the direct market access (DMA) model or the market maker (MM) model. Direct Market Access The DMA model gives you access to trade the Underlying instrument on the relevant Exchange from which the CFD is then derived. All CFD Transactions under the DMA model have corresponding trades in the Underlying instrument. Under the DMA model, providers typically charge their clients Commission based on the notional contract value of the CFD. Market Maker The MM model uses the price of the Underlying instrument to derive the price of the CFD that is offered. Trading under the MM model does not necessarily mean that your CFD will be reflected by a corresponding trade in the Underlying instrument. Under the MM model each CFD Transaction creates a direct financial exposure for the provider, which may or may not be hedged in the Underlying instrument. Where the financial exposure is not hedged, the market risk may increase for the market maker. The MM model enables the provider to offer CFDs against synthetic assets, even if there is little Liquidity in the Underlying instrument, which can result in a wider range of products on offer than with the DMA model. Volatility and Illiquidity in the Underlying instrument can affect the pricing of MM CFDs. The MM model can charge its clients Commission based on the notional contract value or it can incorporate costs and fees in the dealing Spread, which represents the difference in price at which the issuer is prepared to Buy and Sell the CFD. What Do I use and why? I have traded with both DMA and MM models and prefer the MM. The big advantage with MM is that they will provide a market even when the underlying is very illiquid and only might have a few trades each day. Regarding the spread of the MM to the spread of the underlying, I have found the MM to be practically in line with the underlying spread about 95% of the time. The other 5% it may have been slightly wider than the spread of the underlying by usually 1c or 2c. Most MMs aim to give you the best spread they can because they want to keep your business. If they gave too wide a spread (compared to the underlying) it wouldn't be long before they had no customers. |
What is a reasonable rate of return and fee structure for a Roth IRA? | A Roth IRA is just an account wrapper. Inside a Roth IRA you can have a plain 0.1% savings account, or a brokerage account, or an annuity or whatever. There's no rate of return for a Roth IRA. That particular calculator seems to assume you'll be wrapping a brokerage account in a Roth IRA and investing in the stock market. Over a long period 6% is probably a reasonable rate of return considering the S&P 500 has returned about 7% over the last decade. |
Financial implications of purchasing a first home? | Congrats! Make sure you nail down NOW what happens to the house should you eventually separate. I know lots of unmarried couples who have stayed together for decades and look likely to do so for life; I've also seen some marriages break up that I wouldn't have expected to. Better to have this discussion NOW. Beyond that: Main immediate implications are that you have new costs (taxes, utilities, maintenance) and new tax issues (mortgage interest and property tax deductability) and you're going to have to figure out how to allocate those between you (if there is a between; not sure whether unmarried couples can file jointly these days). |
Calculating the total capital of a company? | I was wondering how do we calculate the total capital of a company? Which items should I look for in the financial statements? Total capital usually refers to the sum of long-term debt and total shareholder equity; both of these items can be found on the company's balance sheet. This is one of the calculations that's traditionally used when determining a company's return on capital. I'll use the balance sheet from Gilead Sciences' (GILD) 2012 10-K form as an example. Net long-term debt was $7,054,555,000 and total stockholder equity was $9,550,869,000 which should give a grand total of $16,605,424,000 for total capital. (I know you can do the math, but I always find an example helpful if it uses realistic numbers). You may sometimes hear the term "total capital" referring to "total capital stock" or "total capital assets," in which case it may be referring to physical capital, i.e. assets like inventory, PP&E, etc., instead of financial capital/leverage. And how do I calculate notes payable? Is the same as accounts payable? As the word "payable" suggests, both are liabilities. However, I've always been taught that accounts payable are debts a business owes to its suppliers, while notes payable are debts a business owes to banks and other institutions with which it has signed a formal agreement and which use formal debt instruments, e.g. a loan contract. This definition seems to match various articles I found online. On a balance sheet, you can usually determine notes payable by combining the short-term debt of the company with the current portion of the long-term debt. These pieces comprise the debt that is due within the fiscal year. In the balance sheet for Gilead Sciences, I would only include the $1,169,490,000 categorized as "Current portion of long-term debt and other obligations, net" term, since the other current liabilities don't look like they would involve formal debt contracts. Since the notes payable section of GILD's balance sheet doesn't seem that diverse and therefore might not make the best example, I'll include the most recent balance sheet Monsanto as well.1 Monsanto's balance sheet lists a term called "Short-term debt, including current portion of long-term debt" with a value of $36 million. This looks like almost the exact definition of notes payable. 1. Note that this financial statement is called a Statement of Consolidated Financial Position on Monsanto's 10-K. |
Why doesn't Japan just divide the Yen by 100? | So their programmers don't have to deal with floating point arithmetic. This is why they're so far ahead in technology! |
Which shareholders cause news-driven whole market stock swings? | News-driven investors tend to be very short-term focussed investors. They often trade by using index futures (on the S&P 500 index for instance). |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | If you are still paying off debt, then you should have about $1000 in savings and put all you can towards non-mortgage debt. If you don't have any debt besides your mortgage, then add up all of your monthly expenses including food, gas, utilities and keep 3-6 months in liquid savings. Whether you keep 3 or 6 months depends on how safe your income is. If you have a steady safe job, you might be safe with 3 months. But, if your employer is cutting back or you are in a commission based job or self employed - then lean more towards 6 months expenses. Congrats on your new home! |
Where can I find definitive terms for a preferred share? | This site has the best information I could find, other than a Bloomberg terminal: Quantumonline.com QUANTUMONLINE.COM SECURITY DESCRIPTION: SCANA Corp., 2009 Series A, 7.70% Enhanced Junior Subordinated Notes, issued in $25 denominations, redeemable at the issuer's option on or after 1/30/2015 at $25 per share plus accrued and unpaid interest, and maturing 1/30/2065 which may be extended to 1/30/2080. Interest distributions of 7.70% ($1.925) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the record date which is the business day prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank equally with all existing and future unsecured and subordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below. |
Where can I find announcements of official GDP figures for the US and other countries? | For press releases about economic data, the Bureau of Economic Analysis press release page is helpful. Depending on the series, you could also look at the Bureau of Labor Statistics press release page. For time series of both historical and present data, the St. Louis Federal Reserve maintains a database such data, including numerous measures of GDP, called FRED. They list nearly 15,000 series related to GDP alone. FRED is extremely useful because it allows you to make graphs that indicate areas of recession, like this: On the series' homepage, there's a bold link on the left side to download the data. If you simply need the most recent data, it's listed below the graph on that page. If you're interested in a more in-depth analysis, you can use the Bureau of Economic Analysis as well, specifically the National Income and Product Accounts, which are most of the numbers that feed into the calculation of GDP. FRED also archives some of these data. Both FRED and the BEA compile data on numerous other economic benchmarks as well. Other general sources for a wide range of announcements are the Yahoo, Bloomberg, and the Wall Street Journal economic calendars. These provide the dates of many economic announcements, e.g. existing home sales, durable orders, crude inventories, etc. Yahoo provides links to the raw data where available; Bloomberg and the WSJ provide links to their article where appropriate. This is a great way to learn about various announcements and how they affect the markets; for example, the somewhat disappointing durable orders announcement recently pushed markets down a few points. For Europe, look at Eurostat. On the left side of the page, they list links to common data, including GDP. They list the latest releases on the home page that I previously linked to. For the sake of keeping this question short, I'm lumping the rest of the world into this paragraph. Data for many other countries is maintained by their governments or central banks in a similar fashion. The World Bank's databank also has relevant data like Gross National Income (GNI), which isn't identical to GDP, but it's another (less common) macroeconomic indicator. You can also look at the economic calendar on livecharts.co.uk or xe.com, which list events for the US, Europe, Australasia, and some Latin American countries. If you're only interested in the US, the Bloomberg or Yahoo calendars may have a higher signal-to-noise ratio, but if you're interested in following how global markets like currency markets respond to new information, a global economic calendar is a must. Dailyfx.com also has a global economic calendar that, according to them, is specifically geared towards events that affect the forex market. As I said, governments and central banks compile a lot of this data, so to make searching easier, here are a few links to statistical agencies and central banks for major countries. I compiled this list a while ago on my personal machine, so although I think all the links are accurate, leave a comment if something isn't quite right. Statistics Australia / Brazil / Canada / Canada / China / Eurostat / France / Germany / IMF / Japan / Mexico / OECD / Thailand / UK / US Central banks Australia / Brazil / Canada / Chile / China / ECB / Hungary / India / Indonesia / Israel / Japan / Mexico / Norway / Russia / Sweden / Switzerland / Thailand / UK / US |
Is it possible to split taxation of funds earned from a crowdfunding campaign over multiple years? | I think you should really start a limited company for this. It'll be a lot simpler to spread the income over multiple years if your business and you have completely separate identities. You should also consult an accountant, if only once to understand the basics of how to approach this. Having a limited company would also mean that if it has financial problems, you don't end up having to pay the debts yourself. With a separate company, you would keep any money raised within the company initially and only pay it to yourself as salary over the three years, so from an income tax point of view you'd only be taxed on it as you received it. The company would also pay for project expenses directly and there wouldn't be any income tax to pay on them at all. You would have to pay other taxes like VAT, but you could choose to register for VAT and then you'd be able to reclaim VAT on the company's expenses but would have to charge VAT to your customers. If you start making enough money (currently £82,000/year) you have to register for VAT whether you want to or not. The only slight complication might be that you could be subject to corporation tax on the surplus money in the first year because it might seem like a profit. However, given that you would presumably have promised something to the funders over a three year period, it should be possible to record your promises as a "liability" for "unearned income" in the company accounts. In effect you'd be saying "although there's still £60,000 in the bank, I have promised to spend it on the crowdfunded thing so it's not profit". Again you should consult an accountant at least over the basics of this. |
How do I calculate ownership percentage for shared home ownership? | You and your husband are fronting all the money upfront. I'm guessing this will cost you around 67,000 once closing costs and fees are included. So obviously you would be hundred percent owners at the beginning. You'll then pay 31% of the mortgage and have your sister pay the remaining 69%. This puts your total investment at the end at 67k + 74.4k + 31% of interest accrued, and your sisters total investment at 165.6k+69% of interest accrued. If you hold the full length of the mortgage, your sister will have invested much more than you( assuming 30 year fixed rate, and 3.75%, she'd pay 116.6k in interest as opposed to your 49.6k) She will have spent 282.2k and y'all will have spent 191k. However if you sell early, your percentage could be much higher. These calculations don't take into account the opportunity cost of fronting all the cash. It could be earning you more in the stock market or in a different investment property. Liability also could be an issue in the case of her not being able to pay. The bank can still come after you for the whole amount. Lastly and most importantly, this also doesn't include the fact that she will be living there and y'all will not. What kind of rent would she be paying to live in a similar home? If it is more than 1400, you will basically be subsidizing her living, as well as tying up funds, and increasing your risk exposure. If it is more than 1400, she shouldn't be any percent owner. |
How do I pick the right company for investing services? | Traditional brokers There are tons of players in this market, especially in USA. You have traditional brokers, brokers tied to your bank and a bunch of startups. The easiest is probably a broker tied to your bank, because you probably don't have to wait to fund your brokerage account and can start trading immediately. Often the older/traditional brokers don't have very intuitive interfaces, it's the startups who do a better job at this. But honestly it doesn't really matter, because you can use reporting services that are different from the services you use to execute your trades. Meaning that you only use the interface of your broker to execute trades (buy or sell), and use third party services to monitor your holdings. Monitoring services: Google Finance, Yahoo Finance, Sigfig, Morningstar,... are services allowing you to monitor your holdings. But you can't execute trades with them. Start-ups: Then there are a bunch of startups that offer investment services besides the traditional brokers. Start-up > Robinhood The most ambitious one is Robinhood, which offers the same service as a traditional broker, but completely free (most of the traditional brokers charge a flat fee and/or percentage when buying/selling hodlings) and with an intuitive interface. They're mobile first, but announced they will be launching their service on the web soon. Start-up > Acorns Another popular, mobile-first start-up is Acorns. They offer a lazy-investing service which rounds your everyday purchases and uses the change to invest. It's great when investing is not on your mind, but you still want to invest without realizing it. Start-ups > Robo-advisors Robo-advisors auto-invest your money across a bunch of funds picked based on your risk profile. Because the robo-advisers are fairly new, they often have the most intuitive interfaces. These robo-advisors often don't allow you to pick individual holdings, so these services are best when you want to passively invest. Meaning you don't want to look at it very often, and let them do the investing for you. There are tons of robo-advisor start-ups: Betterment, Wealthfront, Personal Capital, Sigfig, FutureAdvisor,... Also bigger parties jumped on this trend with their offerings: Schwab Intelligent Portfolios, Ally Managed Portfolio, Vanguard Personal Advisor, etc. Summary: It's fun to pick individual stocks, but if you start out it can be overwhelming. Robinhood is probably the best start, they have reduced functionality, but gets you going with an attractive interface. But soon you'll realize it's extremely hard to beat the market. Meaning that hand-picking stocks statistically gives you a worse return than just buying into the general stock market (like S&P500). So you can decide to just buy one fund with a traditional broker that covers the general stock market. Or you can decide to try out one of the many robo-advisors. They haven't been around that long, so it's hard to tell how effective these are and whether they beat the market. If you're young, and you believe in start-ups (who often try to challenge the traditional players), try out one of the robo-advisors. If you want to play a bit and are addicted to your smartphone, try out Robinhood. If you are addicted to your phone, but don't want to check up on your investments all the time, go for Acorns. Of course you can combine all these. Lastly, there are tons of cryptocurrencies which might give you a large return. Tons of startups offer intuitive interfaces to trade cryptocurrencies like Coinbase, Gemini, Kraken. But beware, there is a lot of risk involved in trading cryptocurrencies, it's completely unregulated etc. But definitely check them out. Oh, and you can also invest by giving out loans through LendingClub, Prosper etc. Who can you trust? Above gives you an overview of your options intermingled with some reasoning. But regarding your question "who can I trust" in terms of advice, it's up to yourself. Most traditional broker services don't give you any advice at all, you're on your own. Robo-advisors don't give you advice either, but let their proprietary algorithm do the job. Are these reliable? Nobody can tell, they haven't been around long enough, and they need to go through a bear market (a crash) to see how they respond during rough times. Some robo-advisors offer you personal consultancy (I believe Sigfig and PersonalCapital) does this (limited to a few hours per year). But obviously they'll try to promote their robo-advisor services. |
What happened to Home Depot's Stock in 1988? | It's got to be a bad chunk of data on Google. Yahoo finance does not show that anomaly for 1988, nor does the chart from Home Depot's investor relations site: |
Should I sell my stocks to reduce my debt? | Put yourself in this position - if you had no debts and no investments, would you borrow money at those rates to invest in the stock market? If no, then pay off the debts. If yes, then keep them. |
How can I determine how much my car insurance will cost me? | Insurance rates are based on statistics manipulated by experts in actuarial "science". Actuaries look at how many times different makes and models get into accidents or are targeted by thieves, and how expensive it is to repair them. Many auto and finance sites will publish lists of the best and worst insurance risks. Family style cars like minivans and family sedans fair well, while sports cars get more expensive insurance. New models will get the risk of similar models until there is statistical data on them. One other take away from this discussion is that inexpensive insurance usually coincides with cheap repair costs, lowering your total cost of operation for your vehicle. |
Investing in third world countries | I strongly recommend you to invest in either stocks or bonds. Both markets have very strict regulations, and usually follow international standards of governance. Plus, they are closely supervised by local governments, since they look to serve the interests of capital holders in order to attract foreign investment. Real estate investment is not all risky, but regulations tend to be very localized. There are federal, state/county laws and byelaws, the last usually being the most significant in terms of costs (city taxes) and zoning. So if they ever change, that could ruin your investment. Keeping up with them would be hard work, because of language, legal and distance issues (visiting notary's office to sign papers, for example). Another thing to consider is, specially on rural distant areas, the risk of forgers taking your land. In poorer countries you could also face the problem of land invasion, both urban and rural. Solution for that depends on a harsh (fast) or socially populist (slow) local government. Small businesses are out of question for you, frankly. The list of risks (cash stealing, accounting misleading, etc.) is such that you will lose money. Even if you ran the business in your hometown it would not be easy right? |
How to diversify IRA portfolio given fund minimum investments and IRA contribution limits? | If you have other savings, the diversification occurs across the accounts. e.g. my 401(k) has access to the insanely low .02% fee VIIIX (Vanguard S&P fund) You can bet it's 100% in. My IRAs are the other assets that make the full picture look better allocated. A new investor has the issue you suggest, although right now, you can deposit $5500 for 2013, and $5500 for 2014, so with $11K available, you can start with $6 or $9K and start with 2 or 3 funds. Or $9K now, but with $500 left over for the '14 deposit, you can deposit $6K in early '15. The disparity of $3K min/$5500 annual limit is annoying, I agree, but shouldn't be a detriment to your planning. |
Responsible investing - just a marketing trick? | A share is just a part ownership of a company. If you buy a share of a green stock in the open market, you now just own part of a green company. Just like if you buy a house, the money you paid moves to the former owner, but what you are getting is a clear asset in return that you now own. Via mutual funds/indexes this can get a little more complicated (voting rights etc tend to go to the mutual/indexing company rather than the holders of the fund), but is approximately the same thing: the fund buys assets on the open market, then holds them, buys more, or sells them on behalf of the fund investors. |
Ideal investments for a recent college grad with very high risk tolerance? | An ideal investment for a highly risk tolerant college grad with a background in software and programming, is a software company. That's because it's the kind of investment that you will be able to judge better than most other people, including yours truly. Hopefully, one day the software company for a highly risk tolerant investor will be your own.(Ask Bill Gates or even Michael Dell, although the latter was more involved in hardware.) |
Why would anyone buy a government bond? | Great question. There are several reasons; I'm going to list the few that I can think of off the top of my head right now. First, even if institutional bank holdings in such a term account are covered by deposit insurance (this, as well as the amount covered, varies geographically), the amount covered is generally trivial when seen in the context of bank holdings. An individual might have on the order of $1,000 - $10,000 in such an account; for a bank, that's basically chump change, and you are looking more at numbers in the millions of dollars range. Sometimes a lot more than that. For a large bank, even hundreds of millions of dollars might be a relatively small portion of their holdings. The 2011 Goldman Sachs annual report (I just pulled a big bank out of thin air, here; no affiliation with them that I know of) states that as of December 2011, their excess liquidity was 171,581 million US dollars (over 170 billion dollars), with a bottom line total assets of $923,225 million (a shade under a trillion dollars) book value. Good luck finding a bank that will pay you 4% interest on even a fraction of such an amount. GS' income before tax in 2011 was a shade under 6.2 billion dollars; 4% on 170 billion dollars is 6.8 billion dollars. That is, the interest payments at such a rate on their excess liquidity alone would have cost more than they themselves made in the entire year, which is completely unsustainable. Government bonds are as guaranteed as deposit-insurance-covered bank accounts (it'll be the government that steps in and pays the guaranteed amount, quite possibly issuing bonds to cover the cost), but (assuming the country does not default on its debt, which happens from time to time) you will get back the entire amount plus interest. For a deposit-insured bank account of any kind, you are only guaranteed (to the extent that one can guarantee anything) the maximum amount in the country's bank deposit insurance; I believe in most countries, this is at best on the order of $100,000. If the bank where the money is kept goes bankrupt, for holdings on the order of what banks deal with, you would be extremely lucky to recover even a few percent of the principal. Government bonds are also generally accepted as collateral for the bank's own loans, which can make a difference when you need to raise more money in short order because a large customer decided to withdraw a big pile of cash from their account, maybe to buy stocks or bonds themselves. Government bonds are generally liquid. That is, they aren't just issued by the government, held to maturity while paying interest, and then returned (electronically, these days) in return for their face value in cash. Government bonds are bought and sold on the "secondary market" as well, where they are traded in very much the same way as public company stocks. If banks started simply depositing money with each other, all else aside, then what would happen? Keep in mind that the interest rate is basically the price of money. Supply-and-demand would dictate that if you get a huge inflow of capital, you can lower the interest rate paid on that capital. Banks don't pay high interest (and certainly wouldn't do so to each other) because of their intristic good will; they pay high interest because they cannot secure capital funding at lower rates. This is a large reason why the large banks will generally pay much lower interest rates than smaller niche banks; the larger banks are seen as more reliable in the bond market, so are able to get funding more cheaply by issuing bonds. Individuals will often buy bonds for the perceived safety. Depending on how much money you are dealing with (sold a large house recently?) it is quite possible even for individuals to hit the ceiling on deposit insurance, and for any of a number of reasons they might not feel comfortable putting the money in the stock market. Buying government bonds then becomes a relatively attractive option -- you get a slightly lower return than you might be able to get in a high-interest savings account, but you are virtually guaranteed return of the entire principal if the bond is held to maturity. On the other hand, it might not be the case that you will get the entire principal back if the bank paying the high interest gets into financial trouble or even bankruptcy. Some people have personal or systemic objections toward banks, limiting their willingness to deposit large amounts of money with them. And of course in some cases, such as for example retirement savings, it might not even be possible to simply stash the money in a savings account, in which case bonds of some kind is your only option if you want a purely interest-bearing investment. |
What does “Yield Curve” mean? | Yield is the term used to describe how much income the bond will generate if the bond was purchased at a particular moment in time. If I pay $100 for a one year, $100 par value bond that pays 5% interest then the bond yields 5% since I will receive $5 from a $100 investment if I held the bond to maturity. If I pay $90 for the same one year bond then the bond yields 17% since I will receive $15 from a $90 investment if I held the bond to maturity. There are many factors that affect what yield creditors will accept: It is the last bullet that ultimately determines yield. The other factors feed into the creditor’s desire to hold money today versus receiving money in the future. I desire money in my hand more than a promise to receive money in the future. In order to entice me to lend my money someone must offer me an incentive. Thus, they must offer me more money in the future in order for me to part with money I have. A yield curve is a snapshot of the yields for different loan durations. The x-axis is the amount of time left on the bond while the y-axis is the yield. The most cited yield curve is the US treasury curve which displays the yields for loans to the US government. The yield curve changes while bonds are being traded thus it is always a snapshot of a particular moment in time. Short term loans typically have less yield than longer term loans since there is less uncertainty about the near future. Yield curves will flatten or slightly invert when creditors desire to keep their money instead of loaning it out. This can occur because of a sudden disruption in the market that causes uncertainty about the future which leads to an increase in the demand for cash on hand. The US government yield curve should be looked at with some reservation however since there is a very large creditor to the US government that has the ability to loan the government an unlimited amount of funds. |
Extended family investment or pay debt and save | I would suggest, both as an investor and as someone who has some experience with a family-run trust (not my own), that this is probably not something you should get involved with, unless the money is money you're not worried about - money that otherwise would turn into trips to the movies or something like that. If you're willing to treat it as such, then I'd say go for it. First off, this is not a short or medium term investment. This sort of thing will not be profitable right away, and it will take quite a few years to become profitable to the point that you could take money out of it - if ever. Your money will be effectively, if not actually, locked up for years, and be nearly entirely illiquid. Second, it's not necessarily a good investment even considering that. Real estate is something people tend to feel like it should be an amazing investment that just makes you money, and is better than risky things like the stock market; except it's really not. It's quite risky, vulnerable to things like the 2008 crash, but also to things like a local market being a bit down, or having several months with no renter. The amount your fund will have in it (at most $100x15/month) won't be enough to buy even one property for years ($1500/month means you're looking at what, 100-150 months before you have enough?), and as such won't have enough to buy multiple properties for even longer, which is where you reach some stability. Having a washing machine break down or a roof leak is a big deal when you only have one property to manage; having five or six properties spreads out the risk significantly. You won't get tax breaks from this, of course, and that's where the real issue is for you. You would be far better off putting your money in a Roth IRA (or a regular IRA, but based on your career choice and current income, I'd strongly consider a Roth). You'll get tax free growth, less risky than this fund AND probably faster growing - but regardless of both of those, tax free. That 15-25% that Uncle Sam is giving you back is a huge, huge deal, greater than any return a fund is going to give you (and if they promise that high, run far and fast). Finally, as someone who's watched a family trust work at managing itself - it's a huge, huge headache, and not something I'd recommend at least (unless it comes with money, in which case it's of course a different story). You won't agree on investments, inevitably, and you'll end up spending huge amounts of time trying to convince each other to go with your idea - and it will likely end up being fairly stagnant and conservative, because that's what everyone will be able to at least not object to. It might be something you all enjoy doing, in which case good luck - but definitely not my cup of tea. |
Is it better to wait for a market downturn to do a Roth conversion? | On average, the market will be down 1 year out of 4. 26 of the last 100 years on the S&P were negative. The Roth conversion offers a unique opportunity to convert early in the year, and decide at tax time next year whether you are happy with the result. Of course, if your fund or stock is up, you are likely better off, paying the $1250 tax on the $5000 conversion that's now worth $6000 or more. If it's down, you can recharacterize. The volatility of the market helps makes this process more attractive. If my converted shares dropped quite a bit, the recharacterization is far more desirable than a small drop or no drop at all. Of course we don't wish for that drop, any more than we wish for our house to burn down to make our insurance pay off. To be clear, you'll benefit from a conversion she the market goes up. The downturn only lets you reverse the bad move. |
Source of income: from dividends vs sale of principal or security | The trend in ETFs is total return: where the ETF automatically reinvests dividends. This philosophy is undoubtedly influenced by that trend. The rich and retired receive nearly all income from interest, dividends, and capital gains; therefore, one who receives income exclusively from dividends and capital gains must fund by withdrawing dividends and/or liquidating holdings. For a total return ETF, the situation is even more limiting: income can only be funded by liquidation. The expected profit is lost for the dividend as well as liquidating since the dividend can merely be converted back into securities new or pre-existing. In this regard, dividends and investments are equal. One who withdraws dividends and liquidates holdings should be careful not to liquidate faster than the rate of growth. |
Ways to avoid being labeled a pattern day trader | Sorry but you already provided the answer to your own question. The simple answer is to 'not day trade' but hold things for a longer period and don't trade a large number of different stocks every week. Seriously, have a look at the rules and see what it implies.. an average of 20 buys and sells of longer term positions PER DAY is a pretty fair bit of trading, that's really churning through the positions compared to someone who might establish positions with say 25 well picked stocks and might change even 5 of those a week to a different stock. Or even a larger number of stocks but seeking to hold them for over a year so you get taxed at the long term cap gains rate. If you want to day trade, be prepared to be labeled as such and deal with your broker on that basis. Not like they will hate you given all the fees you are likely to rack up. And the government will love you also, since you'll be paying short term gains taxes. (and trust me, us bogelheads appreciate the liquidity the speculative and short term folks bring to the market.) In terms of how it would impact you, Expect to be required to have a fairly substantial balance ($25K) if you are maintaining a margin account. I'd suggest reading this thread My account's been labeled as "day trader" and I got a big margin call. What should I do? What trades can I place in the blocked period? |
Learn investing as a programmer | My master's thesis was on using genetic algorithms and candle stick method. If you are familiar, the AI was used to answer questions like "what is a long day", which is not formally defined in most candle stick texts. So in theory unlimited potential for learning including teaching machines to learn. Wall street pays pretty well for such developers, and if you are young and single man Manhattan is pretty sweet place to be. In practicality your formula for building wealth is the same as everyone else's: get out of debt, build an emergency fund, and invest. Initially invest in growth stock mutual funds through a 401K (assuming US). |
Deducting business expenses paid for by gift card | To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes: |
Is it ever logical to not deposit to a matched 401(k) account? | One situation where it would be prudent not to contribute would be if expenses are so tight that you cannot afford to contribute because you need that cashflow for expenses. |
Do I need to write the date on the back of a received check when depositing it? | You do not need to write anything on the second line. There are a variety of helpful things that you can add, e.g.: For Deposit Only. This tells the bank to deposit the check into your account and ignore other signatures. Your account number. Especially useful when added to "For Deposit Only". A countersignature. This tells the bank to pay the check to someone other than you. Countersigned checks used to be much more common than they are now. Someone who didn't have a bank account might ask someone who did to cash a check for them. See also: Four ways to endorse a check which gives the correct format for endorsing a check in these ways. |
What happens to unvested RSUs when a public company is bought out by private firm? | I would ask your HR or benefits department to be certain, but here's how I read that without any specific knowledge of the situation: What is right to receive the RSU consideration? Company A was bought by Company B. You had unvested Restricted Stock Units in A, which is now gone. B is saying that you now have the right to receive consideration equivalent to the value of those RSUs in A. Since B is private, there's no publicly traded stock, so it will likely be in cash, but read the rest of the paperwork or talk to HR to be certain. For example, if you had 100 RSUs vesting next year and the price of stock in A was $50 when the company was bought, those RSUs would be worth $5,000. B is give you the right to consideration for those RSUs, hopefully for somewhere around $5,000. That consideration is unvested, meaning you must stay employed until the vesting period in order to claim that right. If you are fired without cause (i.e. laid off), you will receive those unvested claims as compensation. I assume the same will be applicable if employee leaves the company Probably not. In any situation, if you voluntarily leave a company, any unvested stock, RSUs, options, etc. are forfeited. |
Can capital gains be used to fund an IRA with tax advantages? | IRA contribution must be from your earned income in the sense that you cannot contribute to IRA more than you have in earned income. If all your income is capital gains - you cannot contribute anything to IRA. Once you're within the income limit restriction, it doesn't matter what other money you have, because as you said - once in your account, its all just money. But what you're describing is basically "I deposit $850 from my salary into an IRA and then go pay for my gas with the $850 I have from the capital gains", so you're not paying any less taxes here. If it makes you feel any better, you can describe it to yourself the way you did. It doesn't really matter. |
How do I explain why debt on debt is bad to my brother? | This is not the case with your brother only. There are many business which run on this premise. It goes till the time all the conditions are in control and get busted when things goes out of way. You have mentioned the loan amount and not the monthly repayment amount. Even if you say, a new loan will not solve his problem, what are the way out ? Telling things nicely sometime does not work especially when facts are otherwise. Hence you need to make a compete case study which should also consider his capacity to pay. As of now it seems he has debts of around 20 months of his earning, which can be considered high, depending upon the terms of major loan such as car loan and personal loan. A case study is way out. You can explain him with such case study that he should not go for further loans. |
Two 1099B for same stock | It looks like what you're calling a name change was registered as a merger that resulted in an exchange of stock. If that's the case, then what you've been told is correct. You've got one long-term sale and one short-term sale. Based a quick read of the Form 8937 that was filed, it looks like there were multiple entities involved in this event, more than one of which existed prior to it. https://www.mylan.com/-/media/mylancom/files/form%208937%20for%20mylan%20n%20v.pdf |
How to interpret stock performance charts “vs S&P 500” | tl;dr: The CNN Money and Yahoo Finance charts are wildly inaccurate. The TD Ameritrade chart appears to be accurate and shows returns with reinvested dividends. Ignoring buggy data, CNN most likely shows reinvested dividends for quoted securities but not for the S&P 500 index. Yahoo most likely shows all returns without reinvested dividends. Thanks to a tip from Grade Eh Bacon, I was able to determine that TD Ameritrade reports returns with reinvested dividends (as it claims to do). Eyeballing the chart, it appears that S&P 500 grew by ~90% over the five year period the chart covers. Meanwhile, according to this S&P 500 return estimator, the five year return of S&P 500, with reinvested dividends, was 97.1% between July 2012 to July 2017 (vs. 78.4% raw returns). I have no idea what numbers CNN Money is working from, because it claims S&P 500 only grew about 35% over the last five years, which is less than half of the raw return. Ditto for Yahoo, which claims 45% growth. Even stranger still, the CNN chart for VFINX (an S&P 500 index fund) clearly shows the correct market growth (without reinvesting dividends from the S&P 500 index), so whatever problem exists is inconsistent: Yahoo also agrees with itself for VFINX, but comes in a bit low even if your assume no reinvestment of dividends (68% vs. 78% expected); I'm not sure if it's ever right. By way of comparison, TD's chart for VFINX seems to be consistent with its ABALX chart and with reality: As a final sanity check, I pulled historical ^GSPC prices from Yahoo Finance. It closed at $1406.58 on 27 Aug 2012 and $2477.55 on 28 Aug 2017, or 76.1% growth overall. That agrees with TD and the return calculator above, and disagrees with CNN Money (on ABALX). Worse, Yahoo's own charts (both ABALX and VFINX) disagree with Yahoo's own historical data. |
How can someone with a new job but no credit history get a loan to settle another debt? | The more I think about this the more I think you are actually better off letting it go to collections. At least then you would be able to agree an affordable repayment schedule based on your real budget, and having a big dent in your credit score because it's gone to collections doesn't actually put you in any worse position (in terms of acquiring credit in the future) than you are now. Whoever is the creditor on your original loan is (IMO) quite unreasonable demanding a payment in full on a given date, especially given that you say you've only been made aware of this debt recently. The courts are usually much more reasonable about this sort of thing and recognise that a payment plan over several years with an affordable monthly payment is MUCH more likely to actually get the creditor their money back than any other strategy. They will also recognise and appreciate that you have made significant efforts to obtain the money. I'm also worried about your statement about how panicked and "ready to give up" you are. Is there someone you can talk to? Around here (UK) we have debt counselling bureaus - they can't help with money for the actual debt itself, but they can help you with strategies for dealing with debt and will explain all parts of the process to you, what your rights and responsibilities are if it does go to court, etc. If you have something similar I suggest you contact them, even just to speak to someone and find out that this isn't the end of the world. It's a sucky situation but in a few years you'll be able to look back and at least laugh wryly at it. |
What are some time tested passive income streams? | Last year was a great opportunity for dividend stocks and MLPs. I have a few which are earning 6-9% of my investment basis cost. Municipal bonds are a good value now. If you have the connections, passive investments in convenience franchises or other commercial property are a good income stream. A Dunkin Donuts used to be an amazing money printing machine. |
Why do 10 year-old luxury cars lose so much value? | Personally, I buy newer luxury cars for two reasons. 1) Status symbol Newer cars have the latest looks, performance, and features like heated side mirrors and sensors that adjust cruse control speed when in heavy traffic etc. 2) Older cars have more wear and tear. No one has spent any significant amount of time in the car before and therefore you know the history of what the car has been through, like buying a new pair of pants. You know that no one has pissed in them ;). After I have pissed in and tore up my now older luxury car, I sell it off and get a new one. Cars wear out and as they get older, they need parts replaced. My brother's Mazda, for example, just blew the head gasket after buying the car new and driving 130k miles over a four year period. Part of the luxury for owning a new car is the luxury of time, not having your car spend any significant amount of time in a garage being worked on, unless you buy a Land Rover of course ;). |
What is the meaning of “short selling” or “going short” a stock? | Rich's answer captures the basic essence of short selling with example. I'd like to add these additional points: You typically need a specially-privileged brokerage account to perform short selling. If you didn't request short selling when you opened your account, odds are good you don't have it, and that's good because it's not something most people should ever consider doing. Short selling is an advanced trading strategy. Be sure you truly grok selling short before doing it. Consider that when buying stock (a.k.a. going long or taking a long position, in contrast to short) then your potential loss as a buyer is limited (i.e. stock goes to zero) and your potential gain unlimited (stock keeps going up, if you're lucky!) Whereas, with short selling, it's reversed: Your loss can be unlimited (stock keeps going up, if you're unlucky!) and your potential gain is limited (i.e. stock goes to zero.) The proceeds you receive from a short sale – and then some – need to stay in your account to offset the short position. Brokers require this. Typically, margin equivalent to 150% the market value of the shares sold short must be maintained in the account while the short position is open. The owner of the borrowed shares is still expecting his dividends, if any. You are responsible for covering the cost of those dividends out of your own pocket. To close or cover your short position, you initiate a buy to cover. This is simply a buy order with the intention that it will close out your matching short position. You may be forced to cover your short position before you want to and when it is to your disadvantage! Even if you have sufficient margin available to cover your short, there are cases when lenders need their shares back. If too many short sellers are forced to close out positions at the same time, they push up demand for the stock, increasing price and deepening their losses. When this happens, it's called a short squeeze. In the eyes of the public who mostly go long buying stock, short sellers are often reviled. However, some people and many short sellers believe they are providing balance to the market and preventing it sometimes from getting ahead of itself. [Disambiguation: A short sale in the stock market is not related to the real estate concept of a short sale, which is when a property owner sells his property for less than he owes the bank.] Additional references: |
Are services provided to Google employees taxed as income or in any way? | In many countries, giving something free to the employee is considered a taxable income equivalent, and taxes have to be paid on it. As it cannot be assigned to specific employees, the company pays a flat tax on it, so it actually costs the company more. Also, not all employees value it equally, or consider it as a part of their income, so reducing the salary accordingly would not be considered ok by many employees. As a result, the company can only do it as an additional offer, which is too expensive for small businesses. |
On what quantity the Dividend is given in India? | So My question is if I purchased the shares on 03-08-15 then will I get the dividend? Yes if you purchase on 3-Aug, the shares will actually get credited to your account on 5-Aug and hence you will hold the shares on 6-Aug, the record date. |
What is the preferred way to finance home improvements when preparing to sell your house? | In planning to buy a house, and sort out how to handle the costs of some initial renovations, I've been considering using Lowes and Home Depot credit cards (hopefully this will count differently than the typical credit cards I think you're referring to): http://www.homedepot.com/webapp/wcs/stores/servlet/ContentView?pn=Credit_Center&langId=-1&storeId=10051&catalogId=10053 http://www.lowes.com/cd_Credit+Card+Accounts+from+Lowes_781778798_ You should definitely read the fine print first, as the interest rates can shoot up after the first 6 months if you don't pay the balance in full on some of them. Also, Lowes has a project card that gives you the 6 month no interest (only a minimum payment), and you don't have to pay off the full balance at the end. This one even has more reasonable rates, so this could be a good way to go. |
Using property to achieve financial independence | Be very careful about buying property because it has been going up quickly in recent years. There are some fundamental factors that limit the amount real-estate can appreciate over time. In a nutshell, the general real-estate market growth is supported by the entry-level property market. That is, when values are appreciating, people can sell and use the capital gains to buy more valuable property. This drives up the prices in higher value properties whose owners can use that to purchase more expensive properties and so on and so forth. At some point in a rising market, the entry-level properties start to become hard for entry-level buyers to afford. The machine of rising prices throughout the market starts grinding to a halt. This price-level can be calculated by looking at average incomes in an area. At some percentage of income, people cannot buy into the market without crazy loans and if those become popular, watch out because things can get really ugly. If you want an example, just look back to the US in 2007-2009 and the nearly apocalyptic financial crisis that ensued. As with most investing, you want to buy low and sell high. Buying into a hot market is generally not very profitable. Buying when the market is abnormally low tends to be a more effective strategy. |
Using credit cards online: is it safe? | The answer: don't use your actual card number. Some banks offer virtual credit card numbers (services like Apple Pay are functionally the same). Bank of America's virtual cards work like this: The virtual card number is different from your actual card number, so the merchant never sees your real card number. In fact, the merchant cannot even tell that you are using a virtual card. You can set the maximum amount to be charged. You can set the expiration date from 2 to 12 months. Once the merchant has made a charge on that virtual card, only THAT MERCHANT can make any further charges on that same virtual card. It is not possible to discover the real card number from the virtual card number. So the result is that your risk is reduced to the merchant not delivering the order, or charging too much (but not over the limit you set). There is nothing to be stolen since your real info never goes over the internet, and once a merchant has used the virtual card once, no other merchant can use it. Other banks may have virtual cards which have fewer features. The only DISadvantage of this is that you have to go to the bank's website whenever you want to make a purchase from a new merchant. But you don't have to worry about them stealing your real credit card information. |
First time investing advice (Canada) | Question One: Question Two: Your best reference for this would be a brokerage account with data privileges in the markets you wish to trade. Failing that, I would reference the Chicago Mercantile Exchange Group (CME Group) website. Question Three: Considering future tuition costs and being Canadian, you are eligible to open a Registered Education Savings Plan (RESP). While contributions to this plan are not tax deductible, any taxes on income earned through investments within the fund are deferred until the beneficiary withdraws the funds. Since the beneficiary will likely be in a lower tax bracket at such a time, the sum will likely be taxed at a lower rate, assuming that the beneficiary enrolls in a qualifying post secondary institution. The Canadian government also offers the Canada Education Savings Grant (CESG) in which the federal government will match 20% of the first $2500 of your annual RESP contribution up to a maximum of $500. |
Is it unreasonable to double your investment year over year? | Wealth gained hastily will dwindle but whoever gathers little by little will increase it. Proverbs 13:11 (ESV) Put another way... "Easy come, easy go" You cannot sustain 100% annual ROI. Sooner than you think you will hit a losing streak. Casinos depend on this truth. You may win a few rolls of the dice. But betting your winnings will eventually cause you to lose all. |
Recent college grad. Down payment on a house or car? | Buy a car. Unless you definitely know you are living in the area for a good long time, avoid buying a house and get a car instead. |
Is it worth it to buy TurboTax Premier over Deluxe if I sold investments in a taxable account? | For tax year 2014, TurboTax Deluxe no longer supports Schedule D.* TurboTax Premier is required if you need to use Schedule D. Alternatively, H&R Block Tax Software Deluxe will handle Schedule D at a fraction of the cost of TurboTax Premier. Update: Beginning with tax year 2015, TurboTax has reversed their disastrous decision and put the functionality back into Deluxe, making it once again an acceptable choice for the OP's situation. See this answer for more details. H&R Block Deluxe still handles this at less cost. * Technically**, TurboTax Deluxe does include Schedule D and other schedules in what they call form mode; however, if you decide to use them, TurboTax Deluxe cripples itself, eliminating many of the features on this chart that you may have gotten used to, such as interview guidance and e-file. ** See https://xkcd.com/1475/ |
Why can't house prices be out of tune with salaries | There's a few things going on here. If we fixed rates (and terms) over time we'd expect a pretty tight chart of home prices to income, almost lockstep. Add a layer of growth above that in boom times due to the wealth effect (when stocks are way up, we have extra money to blow on bigger houses) and the opposite when markets are down. Next, the effect of rates. With long term rates dropping from 14% in 1985 to 5% in 2003, the amount that can be bought for the same monthly payment rises dramatically as rates fall. Easy to lose site of that and the fact that the average size house has increased about 1.5% per year over the last 40 years, surely that can't continue. When you normalize all these factors, houses cost fewer hours-worked almost at the peak of the market than 25 years ago. Mike's logical example of extrapolating out is very clever, I like it. In the short term, we'll see periods that are booms and busts, but actual prices will straddle the line representing the borrowing power of a week's pay. |
Best way to start investing, for a young person just starting their career? | The most important thing is to start. Don't waste months and years trying to figure out the "optimal" strategy or trying to read all the best books before you start. Pick a solid, simple choice, like investing in your company sponsored 401(k), and do it today. This I Will Teach You To Be Rich post on barriers has some good insight on this. |
How safe is a checking account? | Money in a U.S. checking account is FDIC insured, so it's "safe" in the sense that you don't have to worry about a run on the bank or going out of business. Purchase fraud is something else entirely -- you need to check with your bank and see what their policy is for unauthorized charges made with your debit card. Federal rules apply: report fraud within two days and your liability is limited to $50. The maximum liability rises to $500 after that. But many banks have a $0 fraud policy. Look at their web site and see what the policy is for your bank. source: http://blogs.wsj.com/totalreturn/2015/05/19/fraud-worries-debit-vs-credit-cards/ |
Are services provided to Google employees taxed as income or in any way? | Companies often provide cafeteria, or catering services, to employees tax-free at subsidized rates. I'll use "cafeteria" as an illustration. The IRS says that in order to avoid lunch being taxed as income, the employees must pay the "direct costs" of the lunch, food and labor. In addition to those costs, cafeterias add two more items to come up with the total tab; "overhead," (the cost of renting the space), and of course, profit. The company can waive the last two, and charge employees only materials and labor. That's why subsidized cafeteria food can cost as little as half of what it would cost elsewhere. |
Ongoing Automatic Investment Fee | Reading the plan documentation, yes, that is what it means. Each purchase by bank debit, whether one-time or automatic, costs $2 plus $0.06 per share; so if you invested $50, you would get slightly less than $48 in stock as a result (depending on the per-share price). Schedule of Fees Purchases – A one-time $15.00 enrollment fee to establish a new account for a non-shareholder will be deducted from the purchase amount. – Dividend reinvestment: The Hershey Company pays the transaction fee and per share* fee on your behalf. – Each optional cash purchase by one-time online bank debit will entail a transaction fee of $2.00 plus $0.06 per share* purchased. – Each optional cash purchase by check will entail a transaction fee of $5.00 plus $0.06 per share* purchased. – If funds are automatically deducted from your checking or savings account, the transaction fee is $2.00 plus $0.06 per share* purchased. Funds will be withdrawn on the 10th of each month, or the preceding business day if the 10th is not a business day. – Fees will be deducted from the purchase amount. – Returned check and rejected ACH debit fee is $35.00. |
Where can I get interesting resources on Commodities? | Here are some pretty big name news agencies which have a section dedicated to commodities: CNN Bloomberg Reuters |
Payroll taxes on exercised stock options | The trickiest thing is the federal tax. It's typical to withhold 25% federal on this type of event. If your federal marginal rate was already towards the top of that bracket, you'll owe the missing 3% as you enter the 28% bracket. Nothing awful, just be aware. |
Investing: P/E Ratio basic question | While on the surface it might not make sense to pay more than one dollar to get just one dollar back, the key thing is that a good company's earnings are recurring each year. So, you wouldn't just be paying for the $1 dollar of earnings per share this year, but for the entire future stream of earnings per share, every year, in perpetuity -- and the earnings may grow over time too (if it remains a good company.) Your stock is a claim on a portion of the company's future. The brighter and/or more certain that future, the more investors are willing to pay for each recurring dollar of earnings. And the P/E ratio tells you, in effect, how many years it might take for your investment to earn back what you paid – assuming earnings remain the same. But you would hope the earnings would grow, too. When a company's earnings are widely expected to grow, the P/E for the stock is often higher than average. Bear in mind you don't actually receive the company's earnings, since management often decides to reinvest all or a portion of it to grow the company. Yet, many companies do pay a portion of earnings out as dividends. Dividends are money in your pocket each year. |
Pay off credit card debt or earn employer 401(k) match? | For easy math, say you are in the 25% tax bracket. A thousand deposited dollars is $750 out of your pocket, but $2000 after the match. Now, you say you want to take the $750 and pay down the card. If you wait a year (at 20%) you'll owe $900, but have access to borrow a full $1000, at a low rate, 4% or so. The payment is less than $19/mo for 5 years. So long as one is comfortable juggling their debt a bit, the impact of a fully matched 401(k) cannot be beat. Keep in mind, this is a different story than those who just say "don't take a 401(k) loan." Here, it's the loan that offers you the chance to fund the account. If you are let go, and withdraw the money, even at the 25% rate, you net $1500 less the $200 penalty, or $1300 compared to the $750 you are out of pocket. If you don't want to take the loan, you're still ahead so long as you are able to pay the cards over a reasonable time. I'll admit, a 20% card paid over 10+ years can still trash a 100% return. This is why I add the 401(k) loan to the mix. The question for you - jldugger - is how tight is the budget? And how much is the match? Is it dollar for dollar on first X%? |
How to compute real return including expense ratio | Returns reported by mutual funds to shareholders, google, etc. are computed after all the funds' costs, including Therefore the returns you see on google finance are the returns you would actually have gotten. |
Is it possible for US retail forex traders to trade exotic currencies? | The vast majority of retail Forex brokers are market makers, rather than ECNs. With that said, the one that fits your description mostly closely is Interactive Brokers, is US-based, and well-respected. They have a good amount of exoitcs available. Many ECNs don't carry these because of the mere fact that they make money on transactions, versus market makers who make money on transactions and even more on your losses. So, if the business model is to make money only on transactions, and they are as rarely traded as exotics are, there's no money to be made. |
Settlement of Shares Underlying a Covered Call Option | It's a covered call. When I want to create a covered call position, I don't need to wait before the stock transaction settles. I enter it as one trade, and they settle at different times. |
Is it possible to make money by getting a mortgage? | The likely reason the mortgage is "tricky to get" is the adviser is probably recommending an interest-only mortgage in which there is no repayment of principle before maturity. That would allow you to deduct the amount of the interest expense from your taxable income. Your investment grows compound tax deferred and the principal invested (the mortgage balance) is completely tax free since it never qualifies as income for tax purposes. Example ideal scenario: Refinance $100,000 on a 5/1 ARM-interest only at 3%. Invest the $100,000 at 6%. Each year you effectively pay taxes on only the gains greater than interest. If you reinvest the profits it looks something like: Net Profit: $12,309 Effective Tax Rate: 13.21% |
Is it safer to send credit card number via unsecured website form or by e-mail? What safer options are there? | Most people cannot use pgp/gpg and setting it up would, in order to do that correctly, require voice fingerprint verification. Don't. Just write a word doc and either encrypt it when saving using the "save as" function or encrypt it using zip and email that to them. Then call them and tell them the password. Done. |
May I Invest as a non accredited investor? | Without knowing the specifics it is hard to give you a specific answer, but most likely the answer is no. If they limit the participation in the site to accredited investors, this is probably not something they are doing willingly, but rather imposed by regulators. Acredited investors have access to instruments that don't have the same level of regulatory protection & scrutiny as those offered to the general public, and are defined under Regulation D. Examples of such securities are 144A Shares, or hedgefunds. |
Should I worry too much about saving my 20% down before buying my first house? | The only problem that I see is that by not giving the 20% right away, you might need to pay PMI for a few months. In addition, in the case of conventional loans, I heard that banks will not remove the PMI after reaching 80% LTV without doing an appraisal. In order to be removed automatically, you need to reach 78% LTV. Finally, I think you can get a better interest by giving 20% down, and you can get a conventional loan instead of a FHA loan, which offers the option to avoid the PMI altogether (on FHA, you have two PMIs: one upfront and one monthly, and the monthly one is for the life of the loan if you give less than 10%). |
Effect of Job Change on In-Progress Mortgage Application | I recommend you ask this question to a qualified mortgage broker. We just closed on our first house. My wife & I have had several years of stable jobs, good credit scores, and a small side business with 1040 Schedule-C income... and we were surprised by the overwhelming amount of documentation we needed for the loan. For example, we had 3 checks deposited to our bank account for $37.95. We had to provide copies of the checks, deposit slip and a letter explaining the deposit. One reason we might have had so much trouble: the mortgage broker we selected sold our loan to a very picky lender. On the plus side, we obtained a competitive rate with extremely low closing costs on a 30 year fixed mortgage. However, I can't imagine the headaches we would've incurred if one of us were changing jobs to 1099 income. |
Which countries allow eChecks? | eChecks (and ACH) are a (desperate?) try of the US banking system to get into the 21st century. All EU countries (and some others) have direct deposits and transfers as the standard way of transferring money since about 20 years, and since about 5 years it is cost-free and one-day across all the EU. The rest of the world runs mostly country specific system, as there is not that large a demand for cross country shifting, and exchange rates are also an issue in any such transaction. Because they have different ways that work fine since decades, other countries will consider the eCheck idea as a step backwards and will probably ignore it, so your answer is 'none'. International companies work with banks in a different relationship than retail customers, so they can do things you and me cannot do - depending on size and volume. Some large companies get a banking license and then handle their own stuff; medium sized companies make favorable contracts with banks (they are golden goose customers - never an issue, no brick and mortar presence needed, banks love them), or they simply suck up the transfer cost (if you move millions, who cares about a 40 $ fee). Small businesses whine and live with what they get... |
Can I write off time I spent working on my business? | To expand a little on what littleadv said, you can only deduct what something cost you. Even if you had done volunteer work for a charity as a sole prop you could only deduct your actual costs. If you paid an employee to do charity work or to learn something related to the business that would be deductible as a normal business expense. Some common sense would show that if you could deduct something that didn't cost you anything (your time) you could deduct away all of your income and avoid paying taxes altogether. Back to your more nuanced question could 2 businesses you own bill each other for services? Yes, but you will still have to pay taxes for money earned under each of them. You will also need to be careful that the IRS does not construe the transactions as being done solely to lower your tax bill. |
Principal 401(k) managed fund fees, wow. What can I do? | Would anything happen if you bring this issue to the attention of the HR department? Everyone in the company who participates in the 401(k) is affected, so you'd think they'd all be interested in switching to a another 401k provider that will make them more money. |
Any problem if I continuously spend my credit card more than normal people? | Sometimes when you are trying to qualify for a loan, the lender will ask for proof of your account balances and costs. Your scheme here could be cause for some questions: "why are you paying $20-30k to your credit card each month, is there a large debt you haven't disclosed?". Or perhaps "if you lost your job, would you be able to afford to continue to pay $20-30k". Of course this isn't a real expense and you can stop whenever you want, but still as a lender I would want to understand this fully before loaning to someone who really does need to pay $20-30k per month. Who knows this might hiding some troublesome issues, like perhaps a side business is failing and you're trying to keep it afloat. |
Better ways to invest money held by my small, privately-held Canadian corporation? | Since you are talking about a small firm, for the long term, it would be advisable to invest your money into the expansion - growth, diversification, integration - of your business. However, if your intention is to make proper use of your earnings in the short term, a decent bank deposit would help you to increase the credit line for your business with the benefit of having a high enough liquidity. You can also look at bonds and other such low risk instruments to protect your assets. |
If I want a Credit Card offered through a different Credit Union should I slowly transition my banking to that CU? | I don't have an account with either of those CUs, but I do have membership at 2 different CUs. If they accept credit card payments online via transfer from another institution, there's no reason to move your money, unless there are other benefits (higher interest rates). All the CUs would likely require is membership ($5 deposit minimum?). If you were to get a card through Chase or Capital One, you wouldn't be expected to open a checking/savings account with them and transition over to those accounts. |
Using Fibonacci Extensions to set profit targets? | I have never seen a backtest showing that prices tended to be attracted by / to revert around Fibonacci levels. The fact that many people use them doesn't mean that they can be turned into a profitable system... I have on the other hand seen many backtests showing that they don't do anything, such as the one described in this article: At least in this sample of market data, using this particularly specification for swings, we find no evidence that Fibonacci ratios are significant in the market. Perhaps I have missed something significant, or perhaps I am merely completely wrong in my analysis, but one thing should be clear—the burden of proof should lie on the people offering arcane and complex methodologies, when simpler methods work just as well or better in the marketplace. If Fibonacci ratios are the key to the markets, where are the quantitative tests? Where’s the proof? |
Are option contracts subject to mark to market rules | If I sell a covered call, on stock I own 100%, there is no risk of a margin call. The stock goes to zero, I'm still not ask to send in more money. But, if bought on margin, margin rules apply. A naked put would require you to be able to buy the stock if put to you. As the price of the stock drops, you still need to be able to buy it at the put strike price. Mark to market is just an expression describing how your positions are considered each day. |
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