Question
stringlengths 14
166
| Answer
stringlengths 3
17k
|
|---|---|
Most common types of financial scams an individual investor should beware of?
|
Pretty much any financial transaction where they start by calling you on the phone is a scam. They aren't doing it for your benefit and the caller is on commission.
|
Where do large corporations store their massive amounts of cash?
|
Short term investments, treasuries, current accounts.
|
Double-entry accounting: how to keep track of mortgage installments as expenses?
|
Because a paying down a liability and thus gaining asset equity is not technically an expense, GnuCash will not include it in any expense reports. However, you can abuse the system a bit to do what you want. The mortgage payment should be divided into principle, interest, and escrow / tax / insurance accounts. For example: A mortgage payment will then be a split transaction that puts money into these accounts from your bank account: For completeness, the escrow account will periodically be used to pay actual expenses, which just moves the expense from escrow into insurance or tax. This is nice so that expenses for a month aren't inflated due to a tax payment being made: Now, this is all fairly typical and results in all but the principle part of the mortgage payment being included in expense reports. The trick then is to duplicate the principle portion in a way that it makes its way into your expenses. One way to do this is to create a principle expense account and also a fictional equity account that provides the funds to pay it: Every time you record a mortgage payment, add a transfer from this equity account into the Principle Payments expense account. This will mess things up at some level, since you're inventing an expense that does not truly exist, but if you're using GnuCash more to monitor monthly cash flow, it causes the Income/Expense report to finally make sense. Example transaction split:
|
How to rebalance a portfolio without moving money into losing investments
|
You are very correct, rebalancing is basically selling off winners to buy losers. Of course the thinking is that selling a winner that has already increased 100% on the basis that it has doubled so it is likely to go down in the near future. However, just look at Apple as an example, if you bought Apple in June 2009 for $20 (adjusted price) and sold it as part of rebalancing when it rose to $40 (adjusted price) in September 2010, you would have missed out on it reaching over $95 2 years later. Similarly you look to rebalance by buying assets which have been battered (say dropped by 50%) on the basis that it has dropped so much that it should start increasing in the near future. But many times the price can fall even further. A better method would be to sell your winners when they stop being winners (i.e. their uptrend ends) and replace them with assets that are just starting their winning ways (i.e. their downtrend has ended and are now starting to Uptrend). This can be achieved by looking at price action and referring to the definitions of an uptrend and a downtrend. Definition of an uptrend - higher highs and higher lows. Definition of a downtrend - lower lows and lower highs.
|
Buying a multi-family home to rent part and live in the rest
|
First, you can look up the property tax of the building you are in for an exact number. Go to you town's tax office or look at Zillow. You need to claim the rent as income, but will take all expenses as well as depreciation on half the building. The numbers may well work in your favor, especially as a resident landlord. I still own a rental in the next state, but it's 2 hour away, so I'm paying pros to do the simplest things. On site, you can handle all maintenance and save that way. If the cash flow looks like it's better than what you have right now, it might be time to buy. Without seeing the numbers I can't point out what you might be missing.
|
What does ES1 refer to in this picture?
|
That looks very much like an S&P 500 E-Mini index future. However, ES1 is a strange symbol. Futures have the month of expiry encoded in their symbol as well: http://commodities.about.com/od/understandingthebasics/ss/futurescontract_3.htm For example, the September 2011 future in this series would be ESU1. I'm not very familiar with Bloomberg so perhaps this is the front contract (i.e. the one that's closest to expiry (in the is case the September 2011 one)). Only problem is that prices don't exactly match what CME has (high of 1190 and low of 1186.25, for when this page gets out of date): http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500.html - but they are so close I suspect it must be some sort of S&P 500 index future.
|
Can individuals day-trade stocks using High-Frequency Trading (HFT)?
|
Yes you can, but to do so successfully, you need lots of money. You also need to be able to meet the criteria for being classified as a "professional trader" by the IRS. (If not, you'll be buried in paperwork.) The fact that you're asking about it here probably means that you do not have enough money to succeed at HFT.
|
Do I need to keep paper records for my business?
|
Scanned or electronic copies of invoices should be sufficient as long as they are accurate and you can deliver them during an audit. Also, if you have an accountant prepare your taxes you would either need to provide them a copy of the invoices or a summary of them with the corresponding amounts to be claimed. Personally I prefer to print out a paper copy and file that away with that quarter's and year's other tax documents. I do my own taxes and find paper copies handy as I can go through each invoice/receipt and make sure I have entered its information by ticking it. I find that when handling a large number of documents that paper copies are more easy to handle than electronic ones. In the end you will need to use a system that you feel comfortable with and are able to use effectively.
|
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.
|
Balance Sheets: How a company can save money for further investments
|
A company CAN hold on to money. This is called retained earnings. Not all money is due back to the owners (i.e. stockholders), but only the amount that the board of directors chooses to pay back in the form of dividends. There is a lot more detail around this, but this is the simple answer to your question.
|
What could be the cause of a extreme high/low price in after hours market?
|
Often these types of trades fall into two different categories. An error by broker or exchange. Exchange clearing out part of their books incorrectly is an example. Most exchanges make firms reopen their positions for after market hours. There may have been an issue doing so or exchange could incorrectly cancel positions. I was in the direct feed industry for years and this was a big issue. At the same time the broker can issue a no limit buy on accident (or has software that is prospecting and said software has a bug or written poorly). unscrupulous parties looking to feign an upswing or downswing in market. Let's say you hold 500k shares in a stock that sells for $11. You could possibly buy 100 shares for $13. Trust me you will find a seller. Then you are hoping that people see that trade as a "norm" and trade from there, allowing you to rake in $1M for spending an extra $200 - NOTE this is not normal and an extreme example. This was so common in the early days of NASDAQ after hours that they discontinued using the after hours trades as part of historical information that they keep like daily/yearly high or closing price. The liquidity allows for manipulation. It isn't seen as much now since this has been done a million times but it does still happen.
|
When I google a ticker like XLE or something, I see a price which updates frequently (about every second or so), where can I find this for options?
|
You probably will not find to many places if any that give you live quotes on options because for the general public there is not that high of a demand. Most people do not even know what stock options are. You can get update on some sites like CNBC, but you will have refresh constantly to get the latest option prices. You can also try an online broker, most of whom will let you have access to their tools and quotes if you sign up for an account. Some require a deposit before you can access those tools and some don't. Personally, I use TD Ameritrade and I do not believe they require a deposit to use their tools, but don't quote me on that.
|
What is the difference between a bad/bounced check and insufficient funds?
|
This may vary some by the state, but the general facts are consistent broadly. The elements of check fraud typically are: This means that not only do you have to have presented a check that is returned for insufficient funds, but you must have known at the time that it wouldn't be honored. It must typically also be given for present consideration, which is why the comments to the other answer correctly note that the post-dated check "scam" cooked up by the payday loan folks shouldn't generally be relevant under these laws; on the same site, they note the cases that are clearly not present consideration: So if I give you a check for $50 and it's returned for NSF because I screwed up my bank accounts and had all my money in savings, that's probably not fraud. But if I decide I really want a Tesla X and give Tesla Motors a check for $95,000, knowing I don't have $95,000, that's fraud. How the prosecutor proves knowledge is probably beyond the scope of Personal Finance and Money Stack Exchange, though I imagine it tends to commonly be done so by showing the person doesn't normally have that much money in their account.
|
How should I be contributing to my 401(k), traditional or Roth?
|
I'm of the opinion that it doesn't matter much unless something in your life changes in retirement. And since many retirement planners assume a default income target of 80 percent of pre-retirement income, I figure many people's tax bracket isn't moving much. The most interesting reason I know to Go Roth in a 401k is limits. You can only contribute like $17k, whether Roth or not. In a traditional contribution, some of the 17k you put in goes to taxes when taken out, but in a Roth contribution you pay taxes up front. So if you have more than $17k to invest, Roth lets you sneak some more into the system.
|
U.S. nonresident alien: Is my state tax refund taxable?
|
Federal income tax refunds received during 2016 are not taxable income for 2016 (or any other year) on either the Federal or the State tax return. The State income tax refund for 2015 received during 2016 is not taxable income on the State tax return for 2016. It is taxable income on the Federal tax return for 2016 only to the extent that you received a tax benefit (reduction in Federal income tax due) from deducting State income tax as an Itemized Deduction on your 2015 Federal return. If you didn't deduct State income tax because you deducted State sales tax instead, then the State income tax refund is not taxable income on the Federal tax return.
|
How Warren Buffett made his money
|
Despite Buffett's nearly perfect consistent advice over the past few decades, they don't reflect his earliest days. His modern philosophy seemed to solidify in the 1970s. You can see that Buffett's earliest days grew faster, at 29.5 % for those partners willing to take on leverage with Buffett, than the last half century, at 19.7%. Not only is Buffett limited by size, as its quite difficult to squeeze one half trillion USD into sub-billion USD investments, but the economy thus market is far different than it was before the 1980s. He would have to acquire at least 500 billion USD companies outright, and there simply aren't that many available that satisfy all of his modern conditions. The market is much different now than it was when he first started at Graham-Newman because before the 1960s, the economy thus market would collapse and rebound about every few years. This sort of variance can actually help a value investor because a true value investor will abandon investments when valuations are high and go all in when valuations are low. The most extreme example was when he tried to as quietly as possible buy up an insurance company selling for something like a P/E of 1 during one of the collapses. These kinds of opportunities are seldom available anymore, not even during the 2009 collapse. As he became larger, those investments became off limits because it simply wasn't worth his time to find such a high returner if it's only a bare fraction of his wealth. Also, he started to deviate from Benjamin Graham's methods and started to incorporate Philip Fisher's. By the 1970s, his investment philosophy was more or less cemented. He tried to balance Graham's avarice for price with Fisher's for value. All of the commentary that special tax dodges or cheap financing are central to his returns are false. They contributed, but they are ancillary. As one can see by comparing the limited vs general partners, leverage helps enormously, but this is still a tangent. Buffett has undoubtedly built his wealth from the nature of his investments. The exact blueprint can be constructed by reading every word he has published and any quotes he has not disavowed. Simply, he buys the highest quality companies in terms of risk-adjusted growth at the best available prices. Quantitatively, it is a simple strategy to replicate. NFLX was selling very cheaply during the mid-2000s, WDC sells frequently at low valuations, up and coming retailers frequently sell at low valuations, etc. The key to Buffett's method is emotional control and removing the mental block that price equals value; price is cost, value is revenue, and that concept is the hardest for most to imbibe. Quoting from the first link: One sidelight here: it is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately to people or it doesn't take at all. It's like an inoculation. If it doesn't grab a person right away, I find that you can talk to him for years and show him records, and it doesn't make any difference. They just don't seem able to grasp the concept, simple as it is. A fellow like Rick Guerin, who had no formal education in business, understands immediately the value approach to investing and he's applying it five minutes later. I've never seen anyone who became a gradual convert over a ten-year period to this approach. It doesn't seem to be a matter of IQ or academic training. It's instant recognition, or it is nothing. and I'm convinced that there is much inefficiency in the market. These Graham-and-Doddsville investors have successfully exploited gaps between price and value. When the price of a stock can be influenced by a "herd" on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical. and finally Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing. There is almost no information on any who has helped Buffett internally or even managed Berkshire's investments aside from Louis Simpson. It is unlikely that Buffett has allowed anyone to manage much of Berkshire's investments considering the consistent stream of commentary from him claiming that he nearly does nothing except read annual reports all day to the extent that he may have neglected his family to some degree and that listening to others will more likely hurt performance than help with the most striking example being his father's recommendation that he not open a hedge fund after retiring from Graham-Newman because he believed the market was topping, and he absolutely idolized his father.
|
Has anyone compared an in-person Tax Advisor to software like Turbo Tax?
|
If you have complicated taxes (own a business, many houses, you are self employed, you are a contractor, etc etc) a person can make the most of your situation. If you are a w-2 single job, maybe with a family, the programs are going to be so close to spot on that the extra fees aren't worth it. I would never bother using HR Block or Liberty or those tax places that pop up. Use the software, or in my state sometimes municipalities put on tax help days at the library to assist in filling out the forms. If you have tough taxes, get a dedicated professional based on at least a few recommendations.
|
What is this type of risk-free investment called?
|
My Credit Union offers a market-linked CD where the investment has FDIC protection if it is held to maturity, but otherwise they are linked with the S&P 500. it comes with this warning: Market-Link CDs are not appropriate for all depositors including clients needing a guaranteed interest payment or seeking full participation in the stock market. If redeemed prior to maturity, the amount received will be subject to market risk including interest rate fluctuations an issuer credit quality. So they still do exist. Another credit union I belong to has a similar product. The risk is that if you need the money early, there may be losses. There would also not be a way to switch to a more conservative posture as the CD approached maturity, if you were interested in protecting your gains.
|
Are credit cards not viewed as credit until you miss one payment?
|
K, welcome to Money.SE. You knew enough to add good tags to the question. Now, you should search on the dozens of questions with those tags to understand (in less than an hour) far more than that banker knows about credit and credit scores. My advice is first, never miss a payment. Ever. The advice your father passed on to you is nonsense, plain and simple. I'm just a few chapters shy of being able to write a book about the incorrect advice I'd heard bank people give their customers. The second bit of advice is that you don't need to pay interest to have credit cards show good payment history. i.e. if you choose to use credit cards, use them for the convenience, cash/rebates, tracking, and guarantees they can offer. Pay in full each bill. Last - use a free service, first, AnnualCreditReport.com to get a copy of your credit report, and then a service like Credit Karma for a simulated FICO score and advice on how to improve it. As member @Agop has commented, Discover (not just for cardholders) offers a look at your actual score, as do a number of other credit cards for members. (By the way, I wouldn't be inclined to discuss this with dad. Most people take offense that you'd believe strangers more than them. Most of the answers here are well documented with links to IRS, etc, and if not, quickly peer-reviewed. When I make a mistake, a top-rated member will correct me within a day, if not just minutes)
|
How come I can't sell short certain stocks? My broker says “no shares are available”
|
Shorts are difficult because you have to find someone to lend the stock to you. In contrast, put options don't require that. They also have some nice properties like you're only out the contract price. The options chain for BSFT will give you an idea of where the market is. Keep in mind that BSFT only IPO'd last year and announced blowout earnings recently. Make sure the P:E you're looking at is using recent earnings reports!
|
Should I pay more than 20% down on a home?
|
A few thoughts off the top of my head: Advantages of more than 20% down: Disadvantages of more than 20% down:
|
Advice on low-risk long-term strategy for extra cash?
|
You can buy dividend stocks, just buy and hold. you will get cash or extra stock every quarter. You can also sell covered calls on your dividend stocks, this will give you even more cash. you can also... actually this rabbit hole goes very deep. just stick with my first sentence.
|
Do Americans really use checks that often?
|
It is possible to not use checks in the US. I personally use a credit card for almost everything and often have no cash in my wallet at all. I never carry checks with me. If we wanted to, we could pay all of our monthly bills without checks as well, and many people do this. 30 years ago, grocery stores didn't generally accept credit cards, so it was cash or check, though most other kinds of stores and restaurants did. Now, the only stores that I have encountered in years that do not accept credit cards are a local chicken restaurant, and the warehouse-shopping store Costco. (Costco accepts its own credit card, but not Mastercard or Visa.) Still, we do pay the majority of our monthly bills via check, and it would not be shocking to see someone paying for groceries with a check. I can't name the last time I saw someone write a check at a store exactly, but I've never seen any cashier or other patrons wonder what a check-writer was trying to do. Large transactions, like buying a car or house, would still use checks -- probably cashier's or certified checks and not personal checks, though.
|
Is it irresponsible for me to lease a $300/month car for 18 months?
|
Presumably you need a car to get to work, so let's start with the assumption that you need to buy something to replace the car you just lost. The biggest difficulty to overcome in buying a car is the concept of the monthly payment. Dealers will play games with all of the numbers to massage a monthly payment that the buyer can swallow, but this usually doesn't end up giving the customer the best deal. The 18 month term is not normal for a lease, typically you'll see 24 or 36 months. You are focusing on another goal of paying your student loans by then which would free up much more money for other wants (like a car) but at what cost? The big difficulty of personal finance is the mental mind game of delaying gratification for greater long-term benefit. You are focusing on paying your student loans now so that you can be free of that debt and have more flexibility for the future. Good. You're tempted to spend another $5400 (assuming no down-payment or other surprise fees) to drive a car for 18 months. That doesn't sound any wiser than $5,000 for an unreliable used car that gave you more problems than you bargained for. Presumably you got some percentage of that money back from the insurance company when the car was totaled, but even if not, the real lesson should be finding a car that you can afford up-front, but also one that you can still use when the loan is paid off (like your education--that investment will keep giving even when the loans are a distant memory). My advice would be to look for a car that has about 30k miles on it and pay for it as quickly as possible, then drive it at least for 70-120k more miles before replacing it. You may wish for a newer car, especially in 3 or 4 more years when it starts to show its age, but you'll also thank yourself when you can buy a newer better car with cash and break out of the monthly payment game that dealers try to push on you. You might even enjoy negotiating with car salesmen when you see through their manipulations and simply work for the best cash price you can get.
|
Should I get cash from credit card at 0% for 8 months and put it on loans?
|
There are two issues here: arithmetic and psychology. Scenario 1: You are presently paying an extra $500 per month on your student loan, above the minimum payments. Your credit card company offers a $4000 cash advance at 0% for 8 months. So you take the cash advance, pay it toward the student loan, and then instead of paying the extra $500 per month toward the student loan you use that $500 for 8 months to repay the cash advance. Net result: You pay 0% interest on the loan, and save roughly 8 months times $4000 times the interest on the student loan divided by two. (I say "divided by two" because it's not the difference between $4000 and zero, but between $4000 and the $500 you would have been paying off each month.) Clearly you are better off. If you are NOT presently paying an extra $500 on the student loan -- or even if you are but it is a struggle to come up with the money -- then the question becomes, can you reasonably expect to be able to pay off the credit card before the grace period runs out? Interest rates on credit cards are normally much higher than interest rates on student loans. If you get the cash advance and then can't repay it, after 8 months you are paying a very steep interest rate, and anything you saved on the student loan will quickly be lost. What I mean by "psychological" is that you have to have the discipline to really repay the credit card within the grace period. If you're not very confidant that you can do that, this plan could go bad very quickly. Personally, I've thought about doing things like this many times -- cash advances against credit cards, home equity loans, etc, all give low-interest money that could be used to pay off a higher-interest debt. But it's easy to get into trouble doing things like this. It's easy to say to yourself, Well, I don't need to put ALL the money toward that other debt, I could keep a thousand or so to buy that big screen TV I really need. Or to fail to pay back the low-interest loan on schedule because other things keep coming up that you spend your money on instead, whether frivolous luxuries or true emergencies. And there's always the possibility that something will happen to mess up your finances, from a big car repair bill to losing your job. You don't want to paint yourself into a corner. Finally, maxing out your credit cards hurts your credit rating. The formulas are secret, but I understand that if you use more than half your available credit, that's a minus. How much it hurts you depends on lots of factors.
|
Why does Yahoo Finance list the 10y T note (TNX) at 1/10 of CBOE and Google Finance?
|
The CBOE states, in an investor's guide to Interest Rate Options: The Options’ Underlying Values Underlying values for the option contracts are 10 times the underlying Treasury yields (rates)— 13-week T-bill yield (for IRX), 5-year T-note yield (for FVX), 10-year T-note yield (for TNX) and 30-year T-bond yield (for TYX). The Yahoo! rate listed is the actual Treasury yield; the Google Finance and CBOE rates reflect the 10 times value. I don't think there's a specific advantage to "being contrary", more likely it's a mistake, or just different.
|
Is 0% credit card utilization worse than 1-20% credit card utilization for any reason other than pure statistics?
|
One rule of thumb is that having regular activity on at least three different revolving accounts will improve your score: I agree that it may not be a great idea to have too many open credit accounts (Trade Lines) reporting on your credit report but if you don’t have enough active accounts, it will prevent you from being approved for a home mortgage. Both Conventional (Fannie Mae and Freddie Mac) mortgage loans and Government loans (such as FHA and VA) require that you have a minimum number of reporting trade lines that are active or have been active within the most recent 24 month period of time. An example of meeting the mortgage loan requirement is having a revolving account (credit card) that has been reporting activity for the past 24 months plus 2 other trade lines that have had activity reported for 12 months each, both within the past 24 months.
|
What is the median retirement savings in the United States today?
|
I find this very hard to believe Believe it. The bottom quarter of American households have negative net worth, and the bottom three quarters have no more than a tiny amount saved up. https://en.wikipedia.org/wiki/Wealth_in_the_United_States#/media/File:MeanNetWorth2007.png In an emergency, 63% of Americans would not be able to come up with $500 without going into debt. http://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/ Nobody can retire with 5k in the U.S. The money will be gone within a year. Is it possible? Now you begin to see why the long-term stability of Social Security and Medicare are at present hot topics in American political life. Without them, a great many more Americans would die in poverty. What is the actual figure? The $5000 figure is accurate but irrelevant; that median includes people who are thirty years from retirement and people who are two days from retirement. The more relevant statistics are those restricted to people at or close to retirement age, and they can be found lower down in the article you cite, or in numerous other studies. Here's one from the GAO for example: http://www.gao.gov/products/GAO-15-419 The figures here are, unfortunately, no less terrifying: Now $104K is a lot better than $5K, but it's still not much to retire on. Why we believe that it is reasonable to throw out all the zeros before taking the median, I do not know. That seems like bad math to me. UPDATE: There is some discussion of this point in the comments; all I'm saying here is that this is a clumsy and possibly misleading way to characterize the situation. The linked report has the actual data, but let's try to summarize it here in a more meaningful way. Let's suppose that we make buckets for how dependent on SS is a retirement-age household to avoid starving to death, being homeless, and so on? Maybe these buckets are not ideal, and we could move them around a bit. The takeaways here are that the ratios of nothing:inadequate:barely adequate:comfortable is about 40:30:20:10. That only the top decile of retirement-age households can fund a comfortable retirement without help illustrates just how dependent on SS American households are. how do 50% of old Americans survive in their old age? Social Security and Medicare. As the cited GAO report indicates: "Social Security provides most of the income for about half of households age 65 and older." Do most old Americans rely on their children for financial support? One day I met a woman at a party and we were making small talk about her kids. She had a couple already and one more was on the way. "I want to have lots of children to support me in my old age", she said. "Do you support your parents?" I asked, which frankly seemed like an entirely reasonable question. "Of course not! I can't afford it. I've got a baby on the way and two more kids at home!" I left her to draw her own conclusions as to the viability of her retirement plan.
|
Harmony Gold Mining Company is listed on the NYSE and JSE at different prices?
|
The quotes on JSE are for 100 share lots. The quotes on NYSE are for single shares. That still leaves some price difference, but much less than you calculated. (EDIT: Equivalently, the price is quoted in 1/100th of a Rand. The Reuter's listing makes this explicit since the price is listed as ZAc rather than ZAR. http://www.reuters.com/finance/stocks/overview?symbol=HARJ.J) As noted in the other answer currently up, NYSE is quoting American Depositary Receipts (ADRs) for this company, which is not directly its stock. The ADR in this case, if you check the prospectus, is currently 1 share of the ADR = 1 share of the stock on its home market. A US institution (in this case it looks like BNY Mellon) is holding shares of stock to back each ADR. Arbitrage is possible and does happen. It's not perfect though, because there are a variety of other cost and risk factors that need to be considered. There's a good review here: Report by JP Morgan Some summary points:
|
How do you find out who the investors are in a U.S. stock? e.g. how ownership may be concentrated?
|
Companies absolutely know who ALL their shareholders are. Ownership is filed on Form 3/4 and in 10-Q/Ks. Look there. Guidelines for required disclosure are as follows: 1) Individuals must disclose when their ownership exceeds 5%; 2) Non-individual legal entities (read: companies; e.g. a hedge fund) must disclose when their ownership exceeds 10% (Form 13-F); and 3) All Officers and Directors Notice the word "required." For example, a entity (individual/company) may file "confidentiality letter" (which allows them to delay disclosing ownership) with the SEC as they are building a position. So at any given point in time the information that is publicaly available may not be "up-to-date." And in all cases beneficial owner(ship).
|
Does bull/bear market actually make a difference?
|
If you know what you are doing, bear markets offer fantastic trading opportunities. I'm a futures and futures options trader, and am equally comfortable trading long or short, although I have a slight preference for the short side, in that moves are typically much quicker to the down side.
|
Investment / Savings advice in uncertain economy
|
$23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed. Should I just keep my money in my savings account since I want to keep my money available? Or are there other options I have that are not necessarily long term may provide better returns? This all depends on your plans, if you're just trying to keep cash in anticipation of the next big dip, you might strike gold, but you could just as easily miss out on significant market gains while waiting. People have a poor track record of predicting market down-turns. If you are concerned about how exposed to market risk you are in your current positions, then you may be more comfortable with a larger cash position. Savings/CDs are low-interest, but much lower risk. If you currently have no savings (you titled the section savings, but they all look like retirement/investment accounts), then I would recommend focusing on that first, getting a healthy emergency fund saved up, and budgeting for your car/house purchases. There's no way to know if you'd be better off investing everything or piling up cash in the short-term. You have to decide how much risk you are comfortable with and act accordingly.
|
How is Butterfly Trade Strategy good if the mid Strike price is already past?
|
One way to look at a butterfly is to break it into two trades. A butterfly is actually made up of two verticals... One is a debit vertical: buy 490 put and sell the 460 put. The other is a credit vertical: sell a 460 put and buy a 430 put. If someone believes Apple will fall to 460, that person could do a few things. There are other strategies but this just compares the three common ones: 1) Buy a put. This is expensive and if the stock only goes to 460 you overpay for it. 2) Buy a put vertical. This is less expensive because you offset the price of your put. 3) Buy a butterfly. This is cheapest of the three because you have the vertical in #2 as well as a credit vertical on top of that to offset your cost. The reason why someone would use the butterfly is to pay less upfront while capitalizing on a fall to 460. Of the three, this would be the better strategy to use if that happens. But REMEMBER that this only applies if the trader is right and it goes to 460. There is always a trade off for every strategy that the trader must be aware of. If the trader is wrong, and Apple goes to say 400, the put (#1) would make the most money and the butterfly(#3) would lose money while the vertical (#2) would still gain. So that is what you're sacrificing to get the benefits of the butterfly. Also helps to draw a diagram to compare the strategies.
|
Should I buy a house with a friend?
|
Sure, form an LLC with an attorney's advice. You need a buyout clause, operating agreement, etc. If you're not married, never buy a home for personal use with someone else.
|
Who can truly afford luxury cars?
|
I want to add that in my country, Israel, the tax on cars is extraordinarily high. Cars in Israel cost in average twice or more then in the US (for example, a new VW golf with the cheapest configuration costs around 25kUSD). Israel's average salary is lower then US's average salary and the fuel in Israel costs twice. Therefore, having a regular car in Israel costs the same as having a luxury car in the US. Most households have a car. It's all about priorities.
|
What can I replace Microsoft Money with, now that MS has abandoned it?
|
I use http://moneydance.com/ it has Mac, Windows and Linux versions and works well for my needs.
|
Is an interest-only mortgage a bad idea?
|
If you took a fixed loan, but paid it off at the accelerated rate, you would ultimately pay less total dollars in interest. So compare the actual amount paid in interest over the course of the loan rather than the interest rate itself. That should be your answer. Also, plan on failing in your plan to pay it off and see how that will affect you.
|
What can I replace Microsoft Money with, now that MS has abandoned it?
|
How complicated is your budget? We have a fairly in depth excel spreadsheet that does the trick for us. Lots of formulas and whatnot for calculating income, outgo, expected and actual expenses, expenses budgeted over time (i.e. planned expenses that are semi-annual or annual) as well as the necessary emergency funds based on expenses. Took me a few hours to initially create and many tweaks over months to get just right but it's reliable and we know we'll never lose support for it. I'd be willing to share it if desired, I'll just have to remove our personal finance figures from it first.
|
How common are stock/scrip dividends (as opposed to cash dividends) in US equity markets?
|
Check out the NASDAQ and NYSE websites(the exchange in which the stock is listed) for detailed information. Most of the websites which collate dividend payments generally have cash payments history only e.g. Dividata. And because a company has given stock dividends in the past doesn't guarantee such in the future, I believe you already know that.
|
Understanding the Nasdaq insider trading information
|
Usually insiders are in a better position than you to understand their business, but that doesn't mean they will know the future with perfect accuracy. Sometimes they are wrong, sometimes life events force them to liquidate an otherwise promising investment, sometimes their minds change. So while it is indeed valuable information, as everything in fundamental analysis it must be taken with a grain of salt. Automatic Sell I think these refer to how the sell occurred. Often the employees don't get actual shares but options or warrants that can be converted to shares. Or there may be special predetermined arrangements regarding when and how the shares may be traded. Since the decision to sell here has nothing to do with the prospects of the business, but has to do with the personal situation of the employee, it's not quite the same as outright selling due to market concerns. Some people, for instance, are not interested in holding stock. Part of their compensation is given in stock, so they immediately sell the stock to avoid the headache of watching an investment. This obviously doesn't indicate that they expect the company will go south. I think automatic sell refers to these sorts of situations, but your broker should provide a more detailed definition. Disposition (Non Open Market) These days people trade through a broker, but there's nothing stopping you from taking the physical shares and giving them to someone in exchange for say a stack of cash. With a broker, you only "sell" without considering who is buying. The broker then finds buyers for you according to their own system. If selling without a broker you can also be choosy with who is buying, and it's not like anybody can just call up the CEO and ask to buy some stock, so it's a non-open market. Ultimately though it's still the insider selling. Just on a different exchange. So I would treat this as any insider sell - if they are selling, they may be expecting the stock to become less valuable. indirect ownership I think this refers to owning an entity that in turn owns the asset. For instance CEO of XYZ owns stock in ACME, but ACME holds shares of XYZ. This is a somewhat complicated situation, it comes down to whether you think they sold ACME because of the exposure to XYZ or because of some other risk that applies only to ACME and not XYZ. Generally speaking, I don't think you would find a rule like "if insider transactions of so and so kinds > X then buy" that provides guaranteed success. If such a rule was possible it would have been exploited already by the professionals. The more sensible option is to consider all data available to you and try to make a holistic evaluation. All of these insider activities can be bullish or bearish depending on many other factors.
|
Taxes on foreign and local dividends held in a TFSA
|
As far as I read in many articles, all earnings (capital gains and dividends) from Canadian stocks will be always tax-free. Right? There's no withholding tax, ie. a $100 dividend means you get $100. There's no withholding for capital gains in shares for anybody. You will still have to pay taxes on the amounts, but that's only due at tax time and it could be very minor (or even a refund) for eligible Canadian dividends. That's because the company has already paid tax on those dividends. In contrast, holding U.S. or any foreign stock that yields dividends in a TFSA will pay 15% withholding tax and it is not recoverable. Correct, but the 15% is a special rate for regular shares and you need to fill out a W8-BEN. Your broker will probably make sure you have every few years. But if you hold the same stock in a non-registered account, this 15% withholding tax can be used as a foreign tax credit? Is this true or not or what are the considerations? That's true but reduces your Canadian tax payable, it's not refundable, so you have to have some tax to subtract it from. Another consideration is foreign dividends are included 100% in income no mater what the character is. That means you pay tax at your highest rate always if not held in a tax sheltered account. Canadian dividends that are in a non-registered account will pay taxes, I presume and I don't know how much, but the amount can be used also as a tax credit or are unrecoverable? What happens in order to take into account taxes paid by the company is, I read also that if you don't want to pay withholding taxes from foreign > dividends you can hold your stock in a RRSP or RRIF? You don't have any withholding taxes from US entities to what they consider Canadian retirement accounts. So TFSAs and RESPs aren't covered. Note that it has to be a US fund like SPY or VTI that trades in the US, and the account has to be RRSP/RRIF. You can't buy a Canadian listed ETF that holds US stocks and get the same treatment. This is also only for the US, not foreign like Europe or Asia. Also something like VT (total world) in the US will have withholding taxes from foreign (Europe & Asia mostly) before the money gets to the US. You can't get that back. Just an honourable mention for the UK, there's no withholding taxes for anybody, and I hear it's on sale. But at some point, if I withdraw the money, who do I need to pay taxes, > U.S. or Canada? Canada.
|
Account that is debited and account that is credited
|
The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are "debit accounts", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are "credit accounts", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit.
|
What should I be aware of as a young investor?
|
I'm 39 and have been investing since my very early 20's, and the advice I'd like to go back and give myself is the following: 1) Time is your friend. Compounding interest is a powerful force and is probably the most important factor to how much money you are going to wind up with in the end. Save as much as you possibly can as early as you can. You have to run twice as hard to catch up if you start late, and you will still probably wind up with less in the end for the extra effort. 2) Don't invest 100% of your investment money It always bugged me to let my cash sit idle in an investment account because the niggling notion of inflation eating up my money and I felt I was wasting opportunity cost by not being fully invested in something. However, not having enough investable cash around to buy into the fire-sale dips in the market made me miss out on opportunities. 3) Diversify The dot.com bubble taught me this in a big, hairy painful way. I had this idea that as a technologist I really understood the tech bubble and fearlessly over-invested in Tech stocks. I just knew that I was on top of things as an "industry insider" and would know when to jump. Yeah. That didn't work out so well. I lost more than 6 figures, at least on paper. Diversification will attenuate the ups and downs somewhat and make the market a lot less scary in the long run. 4) Mind your expenses It took me years of paying huge full-service broker fees to realize that those clowns don't seem to do any better than anyone else at picking stocks. Even when they do, the transaction costs are a lead weight on your returns. The same holds true for mutual funds/ETFs. Shop for low expense ratios aggressively. It is really hard for a fund manager to consistently beat the indexes especially when you burden the returns with expense ratios that skim an extra 1% or so off the top. The expense ratio/broker fees are among the very few things that you can predict reliably when it comes to investments, take advantage of this knowledge. 5) Have an exit strategy for every investment People are emotional creatures. It is hard to be logical when you have skin in the game and most people aren't disciplined enough to just admit when they have a loser and bail out while they are in the red or conversely admit when they have a winner and take profits before the party is over. It helps to counteract this instinct to have an exit strategy for each investment you buy. That is, you will get out if it drops by x% or grows by y%. In fact, it is probably a good idea to just enter those sell limit orders right after you buy the investment so you don't have to convince yourself to press the eject button in the heat of a big move in the price of that investment. Don't try to predict tops or bottoms. They are extremely hard to guess and things often turn so fast that you can't act on them in time anyway. Get out of an investment when it has met your goal or is going to far in the wrong direction. If you find yourself saying "It has to come back eventually", slap yourself. When you are trying to decide whether to stay in the investment or bail, the most important question is "If I had the current cash value of the stock instead of shares, would I buy it today?" because essentially that is what you are doing when you stick with an investment. 6) Don't invest in fads When you are investing you become acutely sensitive to everyone's opinions on what investment is hot and what is not. If everyone is talking about a particular investment, avoid it. The more enthusiastic people are about it (even experts) the MORE you should avoid it. When everyone starts forming investment clubs at work and the stock market seems to be the preferred topic of conversation at every party you go to. Get out! I'm a big fan of contrarian investing. Take profits when it feels like all the momentum is going into the market, and buy in when everyone seems to be running for the doors.
|
How to calculate the number of months until a loan is paid off (given principal, APR and payment amount)?
|
Here is the derivation of the formula, with The loan is equal to the sum of the repayments discounted to present value.
|
Relation between inflation rates and interest rates
|
Possibly but not necessarily, though that can happen if one looks at the US interest rates in the late 1970s which did end with really high rates in the early 1980s. Generally interest rates are raised when inflation picks up as a way to bring down inflation.
|
If a country can just print money, is global debt between countries real?
|
The main driver behind countries not printing themselves out of debt is the fact that it will cripple the economy, destroy citizens savings, asset valuations and piss all the countries trade partners off so much that they may stop doing business with them. You will have a few different extremes, look at Zimbabwe as an example of a country that just prints money like no ones business. America is essentially devaluing its currency to compete with China. That annoys the Chinese because their holdings are devalued and as such you then see people moving away from US treasuries into more stable commodities and currencies.
|
Can a car company refuse to give me a copy of my contract or balance details?
|
The advice above is generally good, but the one catch I haven't seen addressed is which specific laws apply. You said that you are in Arkansas, but the dealer is in Texas. This means that the laws of at least two different states are in play, possibly three if the contract contains a clause stating that disputes will be handled in a certain jurisdiction, and you are going to have to do some research to figure out what actually applies. One thing that may significantly impact this issue is whether you were in TX or AR when you signed the contracts. If you borrowed the money in TX, and the lender is in TX, then it is almost certain that the laws of Texas will govern. However, if you were living in AR at the time you acquired the loan, particularly if you were in AR when you signed the papers, you have a decent case for claiming that the laws of Arkansas govern. I don't know enough about either state to know if one is more favorable to the consumer than the other, but it is a question you really want to have answered. That said, I would be shocked if any state did not have provisions requiring the lender to provide a copy of the terms and a detailed statement of the account and transaction history upon request. Spend some time on the web site of the Texas attorney general and/or legislator (because that is where the lender is, they are more likely to respect Texas law) to see if you can track down any specific laws or codes that you can reference. You might also look into the federal consumer protection laws, though I can't think of one off hand that would apply in the scenario you have described. Then work on putting together a letter asking them to provide a copy of the contract and a full history of the account. As others noted, make sure you send it certified/return receipt, or better yet use a private carrier such as fedex, and check the box about requiring a signature. Above all you need to get the dialog transferred to a written form. I can not stress this point enough. Everything you tell them or ask for from here out needs to be done in a written format. If they call you about anything, tell them you want to see their issue/offer in writing before you will consider it. You do not necessarily need a lawyer to do any of this, but you do need to know the applicable laws. Do the research to know what your legal standing is. Involve a lawyer if you feel you need to, but I have successfully battled several large utility companies and collection agencies into behaving without needing one.
|
Are there Investable Real Estate Indices which track Geographical Locations?
|
Yes. S&P/ Case-Shiller real-estate indices are available, as a single national index as well as multiple regional geographic indices. These indices are updated on the last Tuesday of every month. According to the Case-Shiller Index Methodology documentation: Their purpose is to measure the average change in home prices in 20 major metropolitan areas... and three price tiers– low, middle and high. The regional indices use 3-month moving averages, published with a two-month lag. This helps offset delays due to "clumping" in the flow of sales price data from county deed recorders. It also assures sufficient sample sizes. Regional Case-Shiller real-estate indices * Source: Case-Shiller Real-estate Index FAQ. The S&P Case-Shiller webpage has links to historical studies and commentary by Yale University Professor Shiller. Housing Views posts news and analysis for the regional indices. Yes. The CME Group in Chicago runs a real-estate futures market. Regional S&P/ Case-Schiller index futures and options are the first [security type] for managing U.S. housing risk. They provide protection, or profit, in up or down markets. They extend to the housing industry the same tools, for risk management and investment, available for agriculture and finance. But would you want to invest? Probably not. This market has minimal activity. For the three markets, San Diego, Boston and Los Angeles on 28 November 2011, there was zero trading volume (prices unchanged), no trades settled, no open interest, see far right, partially cut off in image below. * Source: Futures and options activity[PDF] for all 20 regional indices. I don't know the reason for this situation. A few guesses: Additional reference: CME spec's for index futures and options contracts.
|
Teaching school kids about money - what are the real life examples of math, budgeting, finance?
|
If these are children that may be employed, in a few years, it may well be worth walking them through some basics of the deductions around employment, some basic taxes, uses of banks, and give them enough of a basis in how the economy of the world works. For example, if you get a job and get paid $10/hour, that may sound good but how much do various things eat at that so your take-home pay may be much lower? While this does presume that the kids will get jobs somewhere along the way and have to deal with this, it is worth making this part of the education system on some level rather than shocking them otherwise. Rather than focusing on calculations, I'd be more tempted to consider various scenarios like how do you use a bank, what makes insurance worth having(Life, health, car, and any others may be worth teaching on some level), and how does the government and taxes fit into things. While I may be swinging more for the practical, it is worth considering if these kids will be away in college or university in a few years, how will they handle being away from the parents that may supply the money to meet all the financial needs?
|
What's a Letter of Credit? Are funds held in my bank for the amount in question?
|
In a domestic setting, Letters of Credit are often used to build public works needed to support a development. So if you're bulldozing a few 3 story buildings to build a 50 story tower, the municipality will build appropriate water/sewer/gas/road infrastructure, and draw from the developer's letter of credit to fund it. The 'catch' to the developer is that these things usually aren't revokable -- once the city/town/etc starts work, the developer cannot cut-off the funding, even if the project is cancelled. A letter of credit definitely isn't a consumer financing vehicle. The closest equivalent is a "line of credit" tied to an asset like a home.
|
401k Rollover - on my own or through my financial advisor?
|
Call up vanguard and tell them you want to do a rollover. They walk you through the process. Spend some time on reading up on asset allocation and benefits of indexing. 1.5% every year is steep and what do you have in return? The advisor's word that he'll make it up. How much did he manage to return during the last lost decade? It's a lose-win situation. He'll get his 1.5% no matter how the market does but that's not the deal you are getting. Go with Vanguard. You are already thinking correctly - diversification, rebalancing, low cost!
|
My employer is switching 401k plan providers. How might this work in practice?
|
Having gone though this type of event a few times it won't be a problem. On a specific date they will freeze your accounts. Then they will transfer the funds from custodian X to custodian Y. It should only take a day or two, and they will work it around the paydays so that by the time the next paycheck is released everything is established in the new custodian. Long before the switch over they will announce the investment options in the new company. They will provide descriptions of the options, and a default mapping: S&P 500 old company to S&P 500 new company, International fund old company to international fund new company... If you do nothing then on the switchover they will execute the mapped switches. If you want to take this an an opportunity to rebalance, you can make the changes to the funds you invest in prior to the switch or after the switch. How you contributions are invested will follow the same mapping rules, but the percentage of income won't change. Again you can change how you want to invest your contributions or matching funds by altering the contribution forms, but if you don't do anything they will just follow the mapping procedures they have defined. Loans terms shouldn't change. Company stock will not be impacted. The only hiccup that I would worry about is if the old custodian had a way for you to transfer funds into any fund in their family, or to purchase any individual stock. The question would be does the new custodian have the same options. If you have more questions ask HR or look on the company benefits website. All your funds will be moved to the new company, and none of these transfers will be a taxable event. Edit February 2014: based on this question: What are the laws or rules on 401(k) loans and switching providers? I reviewed the documents for the most recent change (February 2014). The documents from the employer and the new 401K company say: there are no changes to the loan balances, terms, and payment amounts. Although there is a 2 week window when no new loans can be created. All employees received notice 60 days prior to the switchover regarding new investments options, blackout periods.
|
Why might a robo-advisor service like Betterment be preferable to just buying a single well-performing index fund like SPY?
|
Good for lazy investors, time-restricted investors, investors with little knowledge, investors who want a hybrid of advice and tools without paying the crazy fees of mutual funds or an advisor. The biggest advantage, is that it is easy, quick and convenient If you have the time and knowledge, this might not be for you
|
How is your credit score related to credit utilization?
|
Curious, why are you interested in building/improving your credit score? Is it better to use your card and pay off the bill completely every month? Yes. How is credit utiltization calculated? Is it average utilization over the month, or total amount owed/credit_limit per month? It depends on how often your bank reports your balances to the reporting agencies. It can be daily, when your statement cycle closes, or some other interval. How does credit utilization affect your score? Closest to zero without actually being zero is best. This translates to making some charges, even $1 so your statement shows a balance each statement that you pay off. This shows as active use. If you pay off your balance before the statement closes, then it can sometimes be reported as inactive/unused. Is too much a bad thing? Yes. Is too little a bad thing? Depends. Being debt free has its advantages... but if your goal is to raise your credit score, then having a low utilization rate is a good metric. Less than 7% utilization seems to be the optimal level. "Last year we started using a number, not as a recommendation, but as a fact that most of the people with really high FICO scores have credit utilization rates that are 7 percent or lower," Watts said. Read more: http://www.bankrate.com/finance/credit-cards/how-to-bump-up-your-credit-score.aspx Remember that on-time payment is the most important factor. Second is how much you owe. Third is length of credit history. Maintain these factors in good standing and you will improve your score: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
|
Why is RSU tax basis based on remaining shares after shares are witheld?
|
You only got 75 shares, so your basis is the fair market value of the stock as of the grant date times the number of shares you got: $20*75. Functionally, it's the same thing as if your employer did this: As such, the basis in that stock is $1,500 ($20*75). The other 25 shares aren't yours and weren't ever yours, so they aren't part of your basis (for net issuance; if they were sell to cover, then the end result would be pretty similar, but there'd be another transaction involved, but we won't go there). To put it another way, suppose your employer paid you a $2000 bonus, leaving you with a $1500 check after tax withholding. Being a prudent person and not wishing to blow your bonus on luxury goods, you invest that $1500 in a well-researched investment. You wouldn't doubt that your cost basis in that investment at $1500.
|
Is it possible to improve stock purchase with limit orders accounting for volatility?
|
If you can afford the cost and risk of 100 shares of stock, then just sell a put option. If you can only afford a few shares, you can still use the information the options market is trying to give you -- see below. A standing limit order to buy a stock is essentially a synthetic short put option position. [1] So deciding on a stock limit order price is the same as valuing an option on that stock. Options (and standing limit orders) are hard to value, and the generally accepted math for doing so -- the Black-Scholes-Merton framework -- is also generally accepted to be wrong, because of black swans. So rather than calculate a stock buy limit price yourself, it's simpler to just sell a put at the put's own midpoint price, accepting the market's best estimate. Options market makers' whole job (and the purpose of the open market) is price discovery, so it's easier to let them fight it out over what price options should really be trading at. The result of that fight is valuable information -- use it. Sell a 1-month ATM put option every month until you get exercised, after which time you'll own 100 shares of stock, purchased at: This will typically give you a much better cost basis (several dollars better) versus buying the stock at spot, and it offloads the valuation math onto the options market. Meanwhile you get to keep the cash from the options premiums as well. Disclaimer: Markets do make mistakes. You will lose money when the stock drops more than the option market's own estimate. If you can't afford 100 shares, or for some reason still want to be in the business of creating synthetic options from pure stock limit orders, then you could maybe play around with setting your stock purchase bid price to (approximately): See your statistics book for how to set ndev -- 1 standard deviation gives you a 30% chance of a fill, 2 gives you a 5% chance, etc. Disclaimer: The above math probably has mistakes; do your own work. It's somewhat invalid anyway, because stock prices don't follow a normal curve, so standard deviations don't really mean a whole lot. This is where market makers earn their keep (or not). If you still want to create synthetic options using stock limit orders, you might be able to get the options market to do more of the math for you. Try setting your stock limit order bid equal to something like this: Where put_strike is the strike price of a put option for the equity you're trading. Which option expiration and strike you use for put_strike depends on your desired time horizon and desired fill probability. To get probability, you can look at the delta for a given option. The relationship between option delta and equity limit order probability of fill is approximately: Disclaimer: There may be math errors here. Again, do your own work. Also, while this method assumes option markets provide good estimates, see above disclaimer about the markets making mistakes.
|
Buy stock in Canadian dollars or US?
|
From a purely financial standpoint, you should invest using whatever dollars get you the best rate. The general rule of thumb that I've come across is that if you are making another person/company change your money into another nation's currency, they will likely charge a higher exchange rate than you could get yourself. However, it really depends on your situation, how easy it is for you to exchange money, what your exchange rate is, and what your broker is charging you to exchange to USD (if on the off chance this is truly nothing, then stick with CAD). Don't worry about the strength of the USD to CAD too much because converting your money before you make purchases doesn't allow you to buy more shares. For the vast majority of people, trying to work with national currency exchange rates makes things unnecessarily complex.
|
Buying a house, how much should my down payment be?
|
How much should my down payment be? Ideally 20% of the purchase price because with 20% of the purchase price, you don't have to pay a costly private mortgage insurance (PMI). If you don't have 20% down and come across a good property to purchase, it is still a good idea to go forward with purchasing with what you are comfortable with, because renting long term is generally never a good idea if you want to build wealth and become financially independent. How much should I keep in my emergency fund? People say 3-12 months of living expenses. Keep in mind though, in most cases, if you lose your job, you are entitled to unemployment benefits from the government. How long should my mortgage be? 30 year amortization is the best. You can always opt to pay more each month. But having that leverage with a 30 year loan can allow you to invest your savings in other opportunities, which can yield more than mortgage interest. Best of luck!
|
Get financial reports on Canadian companies
|
www.sedar.com is the official site that provides access to most public securities documents and information filed by public companies and investment funds with the Canadian Securities Administrators (CSA) in the SEDAR filing system. Now, I'm guessing - I think the doc is MDA - Management’s Discussion and Analysis of Financial Condition and Results of Operations. At least this is what appears listed for many companies.
|
Bonus issue - Increasing share capital
|
This is what is called "stock dividend". In essence the company is doing a split, the difference is in financial accounting and shouldn't concern you much as an individual investor. "Fully paid up", in this context, probably means "unconditioned", aka fully vested.
|
Selling put and call Loss Scenario Examples
|
See how you can only make the premium amount but your risk is the same as holding the stock when writing a put option.
|
Is there any way to pay online in a country with no international banking system
|
According to Paypal, they support transactions in Ethiopia: https://www.paypal.com/webapps/mpp/country-worldwide https://developer.paypal.com/docs/classic/api/country_codes/ However those appear to be limited to transferring money out of the country. (link) There is an article here (link) which talks about how to transfer money from paypal back to your bank in Ethiopia. It sounds like you have to set up a US bank account, withdraw the funds to that then somehow transfer the money from their to your bank. NOTE: I have no relationship to any of the sites above, nor do I know if the information is accurate or the trustworthiness of those businesses.
|
Would I ever need credit card if my debit card is issued by MasterCard/Visa?
|
I was hoping to comment on the original question, but it looks to me like the asker lives in the EU, where credit cards are a lot less common and a lot of the arguments (car rental, building up of credit etc) brought forward by people living in the US just don't apply. In fact especially airlines (and other merchants) will charge you extra when using a credit card instead of a debit card and this can add up fairly quickly. I hold a credit card purely for travelling outside the EU and occasionally I will travel for work and make my own arrangements, then it can come in handy as I am able to reclaim my expenses before I have to pay my credit card bill (in this case I will also claim the extra credit card fees from my employer). This however is for my personal convenience and not strictly necessary. (I could fill out a bunch of paperwork and claim the costs from my employer as an advance.) In the EU I find that if my VISA debit card will not work in a shop, neither will my credit card, so on that note it's pretty pointless. So to answer the asker question: If you live (and travel) in the EU you don't need a credit card, ever. If you travel to the US, it would be advantageous to get one. Occasionally banks will offer you a credit card for free and there's no harm in taking it (apart from the fact that you have one more card to keep track off), but if you do, set up a direct debit to pay it off automatically. And as other people have said: Don't spend money you don't have. If you are not absolutely sure you can't do this, don't get a credit card.
|
Not paying cash for a house
|
You could use the money to buy a couple of other (smaller) properties. Part of the rent of these properties would be used to cover the mortgage and the rest is income.
|
Can dividends be exploited?
|
The moment the dividend is announced, especially from a company that doesn't normally pay dividends, the dividend is factored into everybody's analysis. In the absence of any other news the price of apple would be expected to drop once the dividend in locked in. Why would I buy shares from you at full price one day after the dividend is paid, if I will have to wait for the next dividend? Also keep in mind the dividend was announced on July 24th, and is given to shareholders of record on August 13th. You are way behind the curve.
|
Should I make partial pre-payments on an actuarial loan?
|
The contract is not very clear. As much as I can understand it will still help if you make part prepayments. In an Rule 78 or Actuarial method, the schedule is drawn up front and the break-up of interest and principal for each month is calculated ahead. At the beginning both the reducing balance method as well as Actuarial method will give the same schedule. However in Actuarial method, if you make part prepayments, they get applied to the future principals, the interest are ignored. However the future interests are not reduced. Example: Say your schedule looks something like this; Monthly Payments say 100; Month | Principal | Interest 1 | 10 | 90 2 | 20 | 80 3 | 30 | 70 4 | 40 | 60 5 | 50 | 50 6 | 60 | 40 7 | 70 | 30 8 | 80 | 20 9 | 90 | 10 So lets say you have made 3 payments of 100, in the 4th month if you make 150 [in addition to 100], it would get applied to the principal of 4th, 5th and 6th month. So essentially you would save interest of 4th, 5th and 5th month. It would also reduce the total payments to 6. i.e. you will only have 7th, 8th, 9th due. The next payment you make of 100 will get applied to row 7. The disadvantage of this method over reducing balance is that the interest calculated for rows 7,8,9 don't change compared to reducing balance. However if you prepay in full, the unearned interest is calculated and returned as per the Actuarial Tables.
|
Home owners association for houses, pro/cons
|
Some examples where an HOA is a positive thing: 1) Amenities: Maybe it is professionally maintained landscaping at the front of the subdivision, or a playground, or community pool. An HOA provides a convenient way to have things like that and share the costs among all the people who benefit. 2) Legal Advocacy: I live in a neighborhood (rural) without an HOA. My neighbor decided to start an auto-repair shop on his property which was CLEARLY a violation of the covenants. There isn't really a Government body you can report them to that will swoop in and make them stop a neighbor from destroying your property values even if they signed an agreement when they bought it to the contrary. You need to hire a lawyer and sue them and that costs money and time. Also, in many cases if you wait too long they can get an exception grandfathered in because no one raised an issue about it. An HOA exists to watch for this kind of thing and nip it in the bud rather than making homeowners have to hassle with the time/expense. 3) Independence: Assuming no HOA, and assuming you are okay with suing your neighbor over violating a covenant. That makes for a very uncomfortable situation between you and that neighbor. Having a neutral 3rd party take action on your behalf anonymously can greatly help that situation. It's not all about making people ditch their basketball goals, or garden gnomes. They also protect you from other obnoxious stuff like junky mobile homes in high-end neighborhoods, the guy who blocks half the street permanently with his RV/Boat parked on the curb, three foot tall grass that is an eyesore and a fire hazard, a taco stand opening in your neighbors garage, etc.
|
How does stock dilution work in relation to share volume?
|
Let me answer with an extreme example - I own the one single share of a company, and it's worth $1M. I issue 9 more shares, and find 9 people willing to pay $1M for each share. I know find my ownership dropped by 90%, and I am now a 10% owner of a business that was valued at $1M but with an additional $9M in the bank for expansion. (Total value now $10M) Obviously, this is a simplistic view, but no simpler than the suggestion that your company would dilute its shares 90% in one transaction.
|
When should I start an LLC for my side work?
|
An LLC is overkill for 99% of 1 man small businesses. Side-businesses should remain as sole proprieterships until they get much larger and need the benefits of the LLC laws. You can still bill through a company name if you want to start building a brand: And set aside 25% of your gross income for Uncle Sam. He wants you to file a Schedule C with your regular 1040 at tax time. He doesn't care about your company. He just wants your social security number with a big fat check stuck to it. Be sure to maximize your tax savings by tracking your expenses like a hawk. Every mile is worth 50 cents. I recommend using a tracking system like the TaxMinimiser.com (buy the $4 version to see if you like it). Bottom line: EARN MONEY. Don't set up a "corporation".
|
Is Weiss Research, Inc. a legitimate financial research company?
|
It is a scam organization praying on fear of the simple minded. The facts Edelson presents are not accurate - http://www.sec.gov/litigation/admin/2006/ia-2525.pdf
|
How does an index rearrange its major holdings
|
An index will drop a company for several reasons: A fund decides how close they want to mirror the index. Some do so exactly, others only approximate the index.
|
Buying insurance (extended warranty or guarantee) on everyday goods / appliances?
|
I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs.
|
When to hire an investment professional?
|
Don't invest in regular mutual funds. They are a rip-off. And, most investment professionals will not do much to help your financial future. Here's the advice:
|
Is there a free, online stock screener for UK stocks?
|
Although this is an old question, it's worth pointing out that the Google Stock Screener now supports stocks traded on the London Stock Exchange. From the country dropdown on the left, select "United Kingdom" and use the screener as before.
|
When to use a stop limit order over a stop order
|
I would be using stop limit orders for stocks that are not too volatile. If you look at the chart and there are not many gaps especially after peaks, then you have more chance of being filled at your specified stop loss level using a stop limit order. If the stock is very volatile and has a large or many gaps down after most peak, then I would consider using a stop market order to make sure you do get out even if it is somewhat past your desired stop level. One think to consider is to avoid trading very volatile stocks that gap often. This is what I do, and using stop limit orders my stop level is achieved more than 95% of the time.
|
Making your first million… is easy! (??)
|
I realize that "a million dollars" is a completely arbitrary figure, but it's one people fixate on. Perhaps folks just meant it's getting easier because inflation has made it a far less lofty sum than when the word "millionaire" was coined. Your point is correct - it' relatively easier as the 1 million dollar nowadays is no where as valuable as compared in the old days after the inflation adjustment. However the way to achieve that is easier said than done: The most possible way is to run your own business (assuming you will make profit). For most of the people running a job to earn a living - the job income is the biggest factor. Being extremely frugal wouldn't help much if you don't maximize your income potential. Earning a million dollar through investment? How much capitals are you able to invest in? 5k? 50k? 500k? I see no way to earn 1 million with 5k from investment, I wouldn't call it easy. This again depends on your income. With better income of course you could dedicate a larger portion to investment, without exposing too much risk and having to affect your way of life. (3) Invest some part of your income over a long period of time and let the stock market do the work I'd say this is more geared towards beating the inflation and earn a few extra bucks instead of getting very rich (this is being very relative). Just a word of cautions, the mindset of investment being the shortcut to wealth is very dangerous and often leads to speculative behavior.
|
Purpose of having good credit when you are well-off?
|
Your dad may have paid an "opportunity cost" for that outright purchase. If the money he saved had been invested elsewhere, he may have made more money. If he was that well off, then his interest rate should have been the lowest possible. My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright. He didn't though. To do so would have meant cashing in on several investments. I don't know his interest rate but let's say it was 2.5%. If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money. Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks. Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions). The better your credit history, the better the cards/rewards you can get. You can build that credit history better by having these loans and making timely payments.
|
Should I pay half a large balance this month before I get my CC statement?
|
This can make a difference of a few points. When your balance is reported on a monthly basis to the bureaus that current balance is used to determine your utilization. Keeping it paid down will help in this case. If you are monitoring your credit regularly, you can see what time of the month your balance is reported and pay before then (just make sure you include enough padding to be sure your payment clears before the reporting date--normally only a business day or so, but weekends can throw it all off).
|
Changing Bank Account Number regularly to reduce fraud
|
Couple of my friends went through a fraud agent who ran off with their money and the landlords were none the wiser. So it always pays to be a bit diligent. Are they a well known letting agents nationally ? Many agents do have different accounts to manage their properties. Yours seems a case as such probably i.e. they manage the property on behalf of the landlord so keeping their monies differentiated. Did you sign an agreement ? If yes go through what is written in the agreement, most of it is same in all agreements but have a look anyway. Check if there is mention of deposit protection scheme. One thing you could do is go to a bank to do the transfer, the same bank where the letting agent holds their account and confirm from them if it is really a personal account or a business account. I am not sure how possible it is, but doesn't hurt to ask. If it is a personal account, then fraud is the most possible cause. The sort code should tell you which branch and which bank. Or the best option is to ask the estate agents to show a recent statement of the bank account, where the money is to be deposited into. Some tips
|
Calculating Pre-Money Valuation for Startup
|
Since you have no sales, I'd likely question how well could you determine the value of the company's assets in a reasonable fashion. You may be better to estimate sales and discount that back to a current valuation. For example, insurance companies could determine that if you wanted to be paid $x/month for the rest of your life, the present day value of that is $y. There are similar mechanisms for businesses but this does get tricky as the estimates have to be somewhat conservative and you have to be prepared for some other scenarios. For example, if you got the $200,000 then would you really never have to ask for more external equity financing in the future or is it quite likely that you'd want another infusion down the road? While you can mark it at $1,000,000 there will be questions about why that value that you'd have to answer and saying, "Cause I like big round numbers," may not go over well. My suggestion is to consider what kind of sales will the company have over the next 5 years that you could work back to determine a current price. If you believe the company can have $5,000,000 in sales over the 5 years then it may make sense to place the current valuation of $1,000,000 on it. I wouldn't look too much into the money and time you've invested as that isn't likely to go over well with investors that just because you've put in what is worth $x, the business may or may not be worth that. The challenge is that without sales, it is quite difficult to get an idea of what is the company worth. If it makes billions, then it is worth a lot more than a company that never turns a profit. Another way to consider this is the question of what kind of economic output do you think you could do working here for the next 5 years? Could you do thousands of dollars of work, millions of dollars or just a few bucks? Consider how you want this to be seen where if you want some help look up episodes of TV shows like "Dragon's Den" or "Shark Tank" as these give valuations often as part of the pitch which is what you are doing.
|
Definition of gross income (Arizona state tax filing requirements)
|
Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well.
|
Multiple mortgage pre-approvals and effects on credit score
|
The problem is not the credit score; it is the "competing" inquiries. Multiple inquiries will be considered as one if done withing a short time period (2 month, IIRC) and for the same kind of credit, because people do shop for rates, you're not the first one to do that. So don't worry about that. What you should be worrying about is banks asking questions about these inquiries, which is an annoying (at least for me) technicality. You'll have to explain to each of the banks that you want a pre-approval from that you're going to take the mortgage from them, and not from anyone else. In writing, with your signature notarized. Which is OK because it's done (the signature and notarizing) at closing, but you'll have to "convince" them that they're the chosen ones to get approved. Other than that it's pretty simple. I've done that (including the declaration that I'm not going to take any loans based on the other "competing" inquiries), and it worked fine when I took the original mortgage, and when I refinanced it later in a similar "shopping" fashion. Do it closer to the actual bidding, because closing does take at least 3-4 weeks, and the rate lock is usually for 30-60 days, so not much time to shop if you take that road.
|
Can you buy out a pink sheet listed company by purchasing all of the oustanding shares?
|
I suggest you contact head of the company your are interested in, ask if he or she owns a controlling interest. If so offer to buy him out.
|
If you buy something and sell it later on the same day, how do you calculate 'investment'?
|
You're confused because the source you cite leaves out one number that isn't relevant to the argument they're making: total costs. The number you're expecting, $9 x 365 or $3285 is the total cost of buying the jewelry which, when subtracted from the $3650 sales volume gives us the net profit of $365. The investment is the amount of money original put into a system our company. In this case the merchant bought his first piece of jewelry for $9, sold it for $10, took one dollar in profit and used the other 9 to reinvest by buying a new piece of jewelry. We can extend the analogy further. After 9 days of selling, the merchant will posses $18, allowing him to now buy 2 pieces of jewelry each morning and sell them for $20. Every day his costs will be $18 and he'll turn a $2 profit, all with the original investment of $9.
|
Why is the breakdown of a loan repayment into principal and interest of any importance?
|
The breakdown between how much of your payment is going toward principal and interest is very important. The principal balance remaining on your loan is the payoff amount. Once the principal is paid off, your loan is finished. Each month, some of your payment goes to pay off the principal, and some goes to pay interest (profit for the bank). Using your example image, let's say that you've just taken out a $300k mortgage at 5% interest for 30 years. You can click here to see the amortization schedule on that loan. The monthly payment is $1610.46. On your first payment, only $360 went to pay off your principal. The rest ($1250) went to interest. That money is lost. If you were to pay off your $300k mortgage after making one payment, it would cost you $299,640, even though you had just made a payment of $1250. Interest accrues on the principal balance, so as time goes on and more of the principal has been paid, the interest payment is less, meaning that more of your monthly payment can go toward the principal. 15 years into your 30-year mortgage, your monthly payment is paying $762 of your principal, and only $849 is going toward interest. Your principal balance at that time would be about $203k. Even though you are halfway done with your mortgage in terms of time, you've only paid off about a third of your house. Toward the end of your mortgage, when your principal balance is very low, almost all of your payment goes toward principal. In the last year, only $513 of your payments goes toward interest for the whole year. You can think of your monthly loan payment as a minimum payment. If you continue to make the regular monthly payments, your mortgage will be paid off in 30 years. However, if you pay more than that, your mortgage will be paid off much sooner. The extra that you pay above your regular monthly payment all goes toward principal. Even if you have no plans to pay your mortgage ahead of schedule, there are other situations where the principal balance matters. The principal balance of your mortgage affects the amount of equity that you have in your home, which is important if you sell the house. If you decide to refinance your mortgage, the principal balance is the amount that will need to be paid off by the new loan to close the old loan.
|
Does a failed chargeback affect my credit score?
|
I think your confusion comes from the negative impact when a creditor writes off your bad credit and ceases attempting to collect it. "Chargebacks" as you call them are an attempt to undo fraudulent charges on your card, whether from stolen credit card info or from a merchant who is using shady business practices. For what it's worth, if you joined on December 20, January 20 seems like a reasonable date for the next billing cycle, with the December 31 date reflecting the fact that their system couldn't automatically bill you the day you joined. I also think it's reasonable for you to ask them to refund the bill for the second month if you do not plan to use their gym further. So the dispute seems like a reasonable one on both sides. Good luck.
|
Why is retirement planning so commonly recommended?
|
In addition to what others have said, I think it is important to consider that government retirement assistance (whatever it is called in each instance) is basically a promise that can be revoked. I talked to a retired friend of mine just yesterday and we got onto that subject; she mentioned that when she was young, the promise was for 90% of one's pay, paid by the government after retiring. It is very different today. Yes, you can gamble that you won't need the saved money, and thus decide not to save anything. What then if you do end up needing the money you did not set aside, but rather spent? You are just now graduating college, and assuming of course that you get a decently-paying job, are likely going to have loads more money than you are used to. If you make an agreement with yourself to set aside even just 10-15% of the difference in income right from the start, that is going to grow into a pretty sizable nest egg by the time you approach retirement age. Then, you will have the option of continuing to work (maybe part-time) or quitting in a way you would not have had otherwise. Now I'm going to pull numbers out of thin air, but suppose that you currently have $1000/month net, before expenses, and can get a job that pays $1800/month net starting out. 10-15% of the difference means you'll be saving around $100/month for retirement. In 35 years, assuming no return on investment (pessimistic, but works if returns match inflation) and no pay rises, that will still be over $40K. That's somewhere on the order of $150/month added to your retirement income for 25 years. Multiply with whatever inflation rate you think is likely if you prefer nominal values. It becomes even more noticable if you save a significant fraction of the additional pay; if you save 1/3 of the additional money (note that you still effectively get a 50% raise compared to what you have been living on before), that gives you a net income of $1500/month instead of $1800 ($500/month more rather than $800/month more) which grows into about $110K in 35 years assuming no return on investment. Nearly $400 per month for 25 years. $100 per week is hardly chump change in retirement, and it is still quite realistic for most people to save 30% of the money they did not have before.
|
Is my mortgage more likely to be sold if I pre-pay principal?
|
There are two ways that mortgages are sold: The loan is collateralized and sold to investors. This allows the bank to free up money for more loans. Of course sometime the loan may be treated like in the game of hot potato nobody want s to be holding a shaky loan when it goes into default. The second way that a loan is sold is through the servicing of the loan. This is the company or bank that collects your monthly payments, and handles the disbursement of escrow funds. Some banks lenders never sell servicing, others never do the servicing themselves. Once the servicing is sold the first time there is no telling how many times it will be sold. The servicing of the loan is separate from the collateralization of the loan. When you applied for the loan you should have been given a Servicing Disclosure Statement Servicing Disclosure Statement. RESPA requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments). The language is set by the US government: [We may assign, sell, or transfer the servicing of your loan while the loan is outstanding.] [or] [We do not service mortgage loans of the type for which you applied. We intend to assign, sell, or transfer the servicing of your mortgage loan before the first payment is due.] [or] [The loan for which you have applied will be serviced at this financial institution and we do not intend to sell, transfer, or assign the servicing of the loan.] [INSTRUCTIONS TO PREPARER: Insert the date and select the appropriate language under "Servicing Transfer Information." The model format may be annotated with further information that clarifies or enhances the model language.]
|
Figuring out an ideal balance to carry on credit cards [duplicate]
|
I think this advice to carry a balance each month is nonsense. You're just wasting money that way. Personally, I have always paid off my credit cards every month for as long as I can remember, and my credit score is only 8 points below the max. The bigger factors by far are: It might be good advice to charge a small amount each month on your credit cards each month in order to keep seldom-used accounts active (remember, longer payment history is better), but there's no reason not to pay off the balance to avoid the interest charges. In short, the "ideal balance" to carry month-to-month on a credit card is zero.
|
How does shorting ETFs work? What are the costs and tax implications?
|
No, the expense ratio would be something you wouldn't be charged. If you bought shares of the ETF long, then the dividends are usually reduced by the expense ratio if you wanted to know where to find that charge in general. You would have to make up for any dividends the underlying stocks as part of general shorting since the idea is that once you buy to put back the shares, it has to appear as if they weren't missing in the first place. No, the authorized participant would handle changes to the underlying structure if needed.
|
Are credit cards not viewed as credit until you miss one payment?
|
Not sure what you mean by "missing". Credit card debt can be paid back in full when you get the bill, or you can "take a loan" and "pay in installments". If you do the latter, and pay back at least the minimum required amount on time, you are not "missing" your payment. Technically, you are taking a small, but expensive loan, and if you pay that loan back according to the terms and conditions that apply to your credit card, this is reported to the credit bureau and improves your credit. If you are really "missing your payment", paying late (more than a few days), less than minimum or nothing at all, this won't help to improve your credit. A "first-time offender" won't always be reported to the credit bureau, but if he is, it won't be a positive report.
|
Are there any consequences for investing in Vanguard's Admiral Shares funds instead of ETF's in a Roth IRA?
|
ETFs purchases are subject to a bid/ask spread, which is the difference between the highest available purchase offer ("bid") and the lowest available sell offer ("ask"). You can read more about this concept here. This cost doesn't exist for mutual funds, which are priced once per day, and buyers and sellers all use the same price for transactions that day. ETFs allow you to trade any time that the market is open. If you're investing for the long term (which means you're not trying to time your buy/sell orders to a particular time of day), and the pricing is otherwise equal between the ETF and the mutual fund (which they are in the case of Vanguard's ETFs and Admiral Shares mutual funds), I would go with the mutual fund because it eliminates any cost associated with bid/ask spread.
|
Why would you ever turn down a raise in salary?
|
In the UK, the government has recently announced that Child Benefit will no longer be paid to those who earn over £44k. This means that if you currently earn £43,999, and your employer offers you a raise of £10 per annum to £44,009, then you could be over £1k worse off as a result.
|
When is the best time to put a large amount of assets in the stock market?
|
Dollar Cost Averaging isn't usually the best idea for lump sum investment unless your risk tolerance is very low or your time horizons are low (in which case is the stock market the right place for your money). Usually you will do better by investing immediately. There are lots of articles around on the web about why DCA doesn't work over the long term. http://en.wikipedia.org/wiki/Dollar_cost_averaging http://www.efmoody.com/planning/dollarcost.html
|
what is shareholders' Equity in balance sheets?
|
Shareholder's Equity consists of two main things: The initial capitalization of the company (when the shares were first sold, plus extra share issues) and retained earnings, which is the amount of money the company has made over and above capitalization, which has not been re-distributed back to shareholders. So yes, it is the firm's total equity financing-- the initial capitalization is the equity that was put into the company when it was founded plus subsequent increases in equity due to share issues, and retained earnings is the increase in equity that has occurred since then which has not yet been re-distributed to shareholders (though it belongs to them, as the residual claimants). Both accounts are credited when they increase, because they represent an increase in cash, that is debited, so in order to make credits = debits they must be credits. (It doesn't mean that the company has that much cash on hand, as the cash will likely be re-invested). Shareholder's Equity is neither an asset nor a liability: it is used to purchase assets and to reduce liabilities, and is simply a measure of assets minus liabilities that is necessary to make the accounting equation balance: Since the book value of stocks doesn't change that often (because it represents the price the company sold it for, not the current value on the stock market, and would therefore only change when there were new share issues), almost all changes in total assets or in total liabilities are reflected in Retained Earnings.
|
Where to find CSV or JSON data for publicly traded companies listed with their IPO date?
|
Here is a list to Yahoo! Finance API. Not sure how much longer this will be support though: https://code.google.com/p/yahoo-finance-managed/wiki/YahooFinanceAPIs
|
Strategies to guarantee arrival time for transfers between banks
|
Transfers are defined to arrive on a specific number of business days, nearly always one business day (if you submit it before the cutoff time). The exact number of days depends on the receiver bank, but when you try to create a transfer, it will tell you when it will arrive, before you send it out.
|
What are the pros and cons of buying an item on installments with zero percent interest?
|
One small advantage to paying ahead is having an outstanding installment plan may preclude unlocking the phone for use on other carriers, for example during international travel. If unlocking is important, researching the particulars would be in order. I am more familiar with T-Mobile, and will use as a specific example. If I pay upfront, I can purchase the phone from Apple totally unlocked, and T-Mobile has no say in whether I use it on another carrier or not. (This actually costs a little more, because the phone from Apple doesn't come with a SIM, and T-Mobile charges for the SIM. At least as of iPhone 5s.) Looking at "Unlock your mobile wireless device, Unlock Requirements" on T-Mobile's website, at least some payment plans do not allow unlock until the phone is paid off. Obviously phones purchased for full price from T-Mobile start out paid off.
|
Would I qualify for a USDA loan?
|
I'd like to suggest a plan. First, I know you want to buy a house. I get that, and that is an awesome goal to work for. You need to really sit down and decide why you want a house. People often tell we that they want a house because they are throwing their money away renting. This is just not true. There is a cost of renting, that is true, but there is also a cost of owning. There are many things with a house that you will have to pay for that will add little or no equity/value. Now that equity is nice to have, but make no mistake under no circumstance does every dime you put into your house increase its value. This is a huge misconception. There is interest, fees, repairs, taxes, and a bunch of other stuff that you will spend money on that will not increase the value of your home. You will do no harm, waiting a bit, renting, and getting to a better place before you buy a house. With that out of the way, time for the plan. Note: I'm not saying wait to buy a house; I am saying think of these as steps in the large house buying plan. Get your current debt under control. Your credit score doesn't suck, but it's not good either. It's middle of the road. Your going to want that higher if you can, but more importantly than that, you want to get into a pattern of making debt then honoring it. The single best advise I can give you is what my wife and I did. Get a credit card (you have one; don't get more) and then get into a habit of not spending more on that credit card than you actually have in the bank. If you have $50 in the bank, only spend that on your credit card. Then pay it in full, 100%, every payday (twice a month). This will improve your score quite a bit, and will, in time, get you in the habit of buying only what you can afford. Unless there has been an emergency, you should not be spending more on credit than you actually have. Your car loan needs to get under control. I'm not going to tell you to pay it off completely, but see point 2. Your car debt should not be more than you have in the bank. This, again is a credit building step. If you have 7.5k in the bank and own 7.5k on your car, your ability to get a loan will improve greatly. Start envelope budgeting. There are many systems out there, but I like YNAB a lot. It can totally turn your situation around in just a few months. It will also allow you to see your "house fund" growing. Breaking Point So far this sounds like a long wait, but it's not. It also sounds like I am saying to wait to actually buy a house, and I'm not. I am not saying get your debt to 0, nor do I think you should wait that long. The idea is that you get your debt under control and build a nice solid set of habits to keep it under control. A look at your finances at this point Now, at this point you still have debt, but your credit cards are at 0 and have been, every payday for a few months. Your car loan still exists, but you have money in the bank to cover this debt, and you could pay it off. It would eat your nest egg, but you could. You also have 15k set aside, just for the house. As you take longer looking for that perfect house, that number keeps growing. Your bank account now has over $25,000 in it. That's a good feeling on its own, and if you stick with your plan, buy your house and put down $15k, you still have plenty of wiggle room between credit cards that are not maxed out, and a $7.5k "padding" in case the roof falls in. Again it sounds like I'm saying wait. But I'm not, I'm saying plan better. All of these goals are very doable inside one year, a rough year to be sure, but doable. If you want to do it comfortably, then take two years. In that time you're looking, searching and learning.
|
What options are available for a home loan with poor credit but a good rental history?
|
Take the long term view. Build up the cash. Once you have enough cash in the bank, you don't need a credit score. With 6 months living expenses in the bank after paying 20% down on a small house, he should have no issues getting a reasonably priced mortgage. However, if he waited just a bit longer he might buy the same house outright with cash. When I ran the computations for myself many years ago, it would have taken me half as long to save the money and pay cash for my home as it did for me to take a mortgage and pay it off.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.