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Fractional Reserve Banking and Insolvency | A bank is insolvent when it can no longer meet its short-term obligations. In this example, the bank is insolvent when depositors withdraw more cash than the bank can pay out. In this case, it's probably something in the range of $600-700k, because the bank can borrow money from other banks using assets as collateral.... |
Why is early exercise generally not recommended for an in-the-money option? | Investopedia states: While early exercise is generally not advisable, because the time value inherent in the option premium is lost upon doing so, there are certain circumstances under which early exercise may be advantageous. For example, an investor may choose to exercise a call option that is deeply in-the-m... |
Should I use a bank or a credit union for my savings account? | Your instructor's numbers do not seem to have any basis in current reality. At this page you can see a comparison of interest rates offered by banks and credit unions. In the most recent table for June 2014, banks paid an average interest rate of 0.12 percent on savings accounts, while credit unions paid an average of... |
Most common types of financial scams an individual investor should beware of? | If an offer "is only valid right now" and "if you don't act immediately, it will expire" that is almost always a scam. |
Is it possible to make money by getting a mortgage? | In the Netherlands its cheaper in some cases to have a mortgage then to own a house. Example: If you own a house you pay more taxes (because you own something expensive you have to pay "eigendoms belasting" < owners tax). So if you instead of owning the house, keep the mortgage low and only pay the mortgage interest... |
How to deal with the credit card debt from family member that has passed away? | First, when a debt collector says, "It's to your advantage to give me money now", I'd take that with a grain of salt. My ex-wife declared bankruptcy and when debt collectors couldn't find her, they somehow tracked me down and told me that I should tell her that it would be to her advantage to pay off this debt before t... |
Buy tires and keep car for 12-36 months, or replace car now? | New tires will increase the resale value of the car; while not by the full cost of the tires, it will not be entirely a sunk cost. You'd need to factor that in and find out how much the new tires increase the resale value of the car to determine how much they would truly cost you. However, I suspect they would cost yo... |
What assets would be valuable in a post-apocalyptic scenario? | This is a long term investment but can be very useful during tough times. Be prepared not only to take but to give as well. Moreover: |
Would extending my mortgage cause the terms to be re-negotiated? | Run the numbers in advance. Understand what are the current rates for an additional 2nd mortgage, what are the rates for a brand new mortgage that will cover the additional funds. Understand what they are for another lender. Estimate the amount of paperwork involved in each option (new first, new 2nd, and new lender).... |
Why did the stock chart for Facebook's first trading day show an initial price of $42 when the IPO price was $38? | I'd add, this is actually the way any stock opens every day, i.e. the closing price of the prior day is what it is, but the opening price will reflect whatever news there was prior to the day's open. If you watch the business news, you'll often see that some stock has an order imbalance and has not opened yet, at the n... |
Why is everyone saying how desperately we need to save money “in this economy”? | This was called Financial repression by Edward S. Shaw and Ronald I. McKinnon from Stanford (https://en.wikipedia.org/wiki/Financial_repression). Financial repression is the situation, when government is stealing from people, who rely heavily on saving, rather then on spending. Meaning that your saving rates will be a ... |
Why does a stock's price fluctuate so often, even when fresh news isn't available? | Investors are "forever" comparing the prices of stocks to other stocks. As others have pointed out, this is done faster and more frequently nowadays with high-speed computer programs. There may be no "fresh" news on stock A, but if there is fresh news on stock B (as there usually is), the news on B affects the COMPARIS... |
Where does the money go when I buy stocks? | When you buy a share of stock, you are almost always buying from someone who previously purchased that share and now wants to sell it. The money -- minus broker's fee -- goes to that other investor, which may be a person, a company (rarely the company that issued the stock, but that will occasionally be the case), an i... |
How long should I keep an uncleared transaction in my checkbook? | Typically I'll carry the charge for quite awhile, up to a year. If it hasn't cleared by then, I contact the institution that should have received the money to see what they want to do about it. If they tell me not to worry about it, then I change the payee to be "Overdraft Protection", and consider it as having been ... |
How can it be possible that only ~10% of options expire worthless, and only ~10% are exercised? | You gave your own answer - the 80% is positions, not contracts. Most actors on the option market have no interest in the underlying asset. They want "just" exposure to its price movement. It makes more sense to close your position than to be handed over bushels of wheat or whatever. |
Does the IRS reprieve those who have to commute for work? | No. Regular W2 employees cannot deduct housing or transportation costs related to their employment. However, in the US, many employers offer Parking and/or Transit FSA programs which are usually collectively referred to a Commuter Benefits FSA programs, this is particularly common among larger employers with locatio... |
Long term saving: Shares, Savings Account or Fund | There is no rule of thumb (although some may suggest there is). Everybody will have different goals, investment preferences and risk tolerances. You need to figure this out by yourself by either education yourself in the type of investments you are interested in or by engaging (and paying for) a financial advisor. You ... |
How does a change in market cap affect a company's operational decisions? | In practical terms, it shouldn't. Market cap changes every day (assuming public trading, of course) or even second-by-second, and focusing on investor sentiment toward your company's stock is not the wisest way to make strategic decisions. That being said, company execs do need to be mindful of unusual swings in their... |
Options for dummies. Can you explain how puts & calls work, simply? | Here's my attempt at "Options for Kids" "Hey kid... So you have this video game that you paid $50 for that you want to sell two months from now" "Yes, Mr. Video Game Broker, but I want to lock in a price so I know how much to save for a new Tickle Me Elmo for my baby sister." "Ok, for $3, I'll sell you a 'Put' option s... |
Using pivot points to trade in the short term | What are Pivot Points? Pivot Points indicate price levels that are of significance in technical analysis of securities. Pivot Points are used to provide clarity for a trader as they are a predictive indicator of where a security might go. There are at least 6 different types of Pivot Points (Woodie Pivot Point, Fibonac... |
Stopping Payment on a Check--How Long Does it Take? | Is this a USA bank to a USA bank transaction? If so, it will clear in one to two business days. Once cleared, the landlord cannot stop pay it. He can, however, dishonestly claim it was a fraudulent check and attempt a chargeback. If you want absolute certainty the money will not be recalled, go to the landlord's ban... |
What expenses do most people not prepare for that turn into “emergencies” but are not covered by an Emergency Fund? | Extended illness/disability that prevents you from being able to work. Edit: Leigh Riffel: So, why should this be expected, and how should it be planned for? Some of us may be fortunate enough that this never happens, but I've known enough unlucky people to have seen that it can and does happen. Prepare for it with: |
What is a good 5-year plan for a college student with $15k in the bank? | I just checked TCF's rates, and they only pay a miserly rate of 0.25%. Banks like Capital One or Sallie Mae pay about 1.15%, which is more than 4x, though still nothing great. Do you expect to use these funds in 5 years (e.g. for down payment on a house), or could you contribute them to an IRA? |
What are some time tested passive income streams? | Any kind of savings account is a passive income stream. |
Who gets how many shares when an IPO is oversubscribed? | A broker will only get so many shares for any IPO. They will give their highest profit customers priority, but try to keep the smaller ones happy as well. So where my TWTR order today was for 1000 shares, I actually was granted 100. In the dotcon* bubble of the late 90's, there were some stocks I saw as many as 1000 h... |
Will I be able to purchase land? | If there is land for sale, you can buy it. The United States doesn't have many restrictions on the purchase of land. However, you need to be able to afford it. Dependent on where you are looking $20,000 can either be a lot or very little land, I suspect that the question you were looking to ask is 'can I afford it?'. H... |
Paying myself a dividend from ltd company | Adding to webdevduck's answer: Before you calculate your profits, you can pay money tax-free into a pension fund for the company director (that is you). Then if you pay yourself dividends, if you made lots of profit you don't have to pay it all as dividends. You can take some where the taxes are low, and then pay more ... |
How can I invest in an index fund but screen out (remove) certain categories of socially irresponsible investments? | It would involve manual effort, but there is just a handful of exclusions, buy the fund you want, plug into a tool like Morningstar Instant X Ray, find out your $10k position includes $567.89 of defense contractor Lockheed Martin, and sell short $567.89 of Lockheed Martin. Check you're in sync periodically (the fun... |
What does the Fed do with the extra money it is printing? | First of all, just for the sake of clarity, the Federal Reserve doesn't actually "print" money - that's the job of the BEP. What they do is they buy US Treasury bonds - i.e., loan money to the US government. The money they do it with are created "from thin air" - just by adding some numbers in certain accounts, thus it... |
Is short selling a good hedging strategy during overzealous market conditions? | Right, wrong or indifferent I see account gains of nearly 50% so far this year; now being January 23, 2016. That is mostly staying on the short side. I am not adverse to long positions at all; only hop to the other side when the tide turns. I will probably end up castrating myself on the fence at some point. |
Why would analysts recommend buying companies with negative net income? | The biotechnology sector as a whole is a popular buy recommendation among some analysts these days for a few reasons. Some analysts feel that the high costs in R&D, even without much profit, are a positive sign for growth because it means a company is working towards finding the next "blockbuster drug" or the next cla... |
Should I sell a 2nd home, or rent it out? | If you can generate a higher ROI by renting than by cashing out and investing, then you should rent it out. Please consider your risk tolerance as well. It's always a personal decision whether to assume higher risk for a higher return. |
Formula that predicts whether one is better off investing or paying down debt | you should always invest if your investment rate of return is higher than your interest rate Your next line, about standard deviation is dead on. There are too many variables to give an exact answer here, in my opinion. The main reason is that one variable isn't easy to quantify - One's risk tolerance. Clearly, the... |
Which is better when working as a contractor, 1099 or incorporating? | I'll just re-post my comment as an answer as i disagree with Michael Pryor. According to this article (and few others) you may save money by incorporating. These factors don’t change the general payroll tax advantage of an S corporation, however: A S corporation can often save business owners substantial amount... |
My Boss owes money but I am named on letter from debt collection agency (UK) | You havent signed a contract, so you are only an authorised contact so you have nothing to worry about at all. Your credit reference can only be affected if you are a signed party on the contract. I would imagine that they wont remove your details as you may assist them by contacting your emplorer, and effectively ch... |
If I helped my friend to file taxes; can I represent her on a phone call with FTB? | In order for you to be able to talk to the FTB on someone's behalf, that someone has to submit form 3520. Note that since you're not a professional, this form must be paper-filed (CRTP, EA, CPA or attorneys can have this filed on-line). Once the form is accepted by the FTB, you can contact the FTB on behalf of your fri... |
Should I use put extra money toward paying off my student loans or investing in an index fund? | First, I'd like to congratulate you on your financial discipline in paying off your loans and living well within your means. I have friends who make more than twice your salary with similar debt obligations, and they barely scrape by month to month. If we combine your student loan debt and unallocated income each mont... |
When one pays Quarterly Estimated Self Employment Taxes, exactly what are they paying? | From the IRS page on Estimated Taxes (emphasis added): Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, se... |
Are BIC and SWIFT code the same things? | BIC and IBANN are used in EU (and some other OECD countries) for inter bank transfers. SWIFT is used everywhere for interbank transfers. In the US - IBAN system is not (yet, hopefully) available, so you have to use SWIFT. The codes may look the same, but these are different systems. More details here. |
Do I need to file taxes jointly with my girlfriend if we live together? | In Ontario, common law marriage requires 3 years of cohabitation, and doesn't give rights to property (which remains separate). I'd say in your situation you can still file as single, but I'd suggest asking your tax accountant to be sure. |
Why invest for the long-term rather than buy and sell for quick, big gains? | As an easy way to answer... look at an index, let's say the S&P 500. Look at the price this last October, and predict where it will move in November... easy right? It already happened, and you have the benefit of hindsight. The move looks like such a consistent, obvious continuation of the previous up and down patte... |
How do you quantify investment risk? | Another approach would be more personalized, which is to measure the risk of missing your goals, rather than measuring the risk of an investment in some abstract sense. Financial planners do this for example with Monte Carlo simulation software (see http://en.wikipedia.org/wiki/Monte_Carlo_method). They would put in a ... |
What are the economic benefits of owning a home in the United States? | To add to what other have stated, I recently just decided to purchase a home over renting some more, and I'll throw in some of my thoughts about my decision to buy. I closed a couple of weeks ago. Note that I live in Texas, and that I'm not knowledgeable in real estate other than what I learned from my experiences in t... |
Is it prudent to sell a stock on a 40% rise in 2 months | Did you buy near the bottom? Suppose you did then the price is still 16% below. 50% fall and then 40% increase leaves a 16% gap. So there could still be upside. However, it appears that you are talking about a small-cap that is volatile. I wouldn't hold it. I would take the money and invest elsewhere. If you have a lot... |
Canceling credit cards - insurance rate increase? | The comments section to Dilip's reply is overflowing. First - the OP (Graphth) is correct in that credit scoring has become a game. A series of data points that predicts default probability, but of course, offers little chance to explain why you applied for 3 loans (all refinancing to save money on home or rentals) go... |
Option spreads in registered accounts | From my own personal experience, you cannot trade spreads in RRSP or TFSA accounts in Canada. You can only buy options (buy a call or buy a put) or you can sell calls against your stock (covered call selling). You will not be able to sell naked options, or trade any type of spread or combo (calendars, condors, etc). I ... |
Combined annual contribution limits for individuals [duplicate] | Your contribution limit to a 401(k) is $18,000. Your employer is allowed to contribute to your 401(k), usually a "matching contribution". That matching contribution comes from your employer, so is not subject to your personal contribution limit. A contribution to a regular 401(k) is typically made with pre-tax money ... |
Does a rescheduled conference call generally mean “something's wrong” with a company? | Does the market automatically assume a rescheduled call means something major, like the auditors aren't signing the financials, is going on? Yes. (If so, why?) People - including investors - are emotional. And suspicious. And paranoid. Financial discussions tend to make everything sound like a cold, clinical science, a... |
How do I protect myself from a scam if I want to help a relative? | What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue withou... |
Is it okay to be married, 30 years old and have no retirement? | The question regarding your snapshot is fine, but the real question is what are you doing to improve your situation? As John offered, one bit of guidance suggests you have a full year's gross earnings as a saving target. In my opinion, that's on the low side, and 2X should be the goal by 35. I suggest you look back, ... |
Should I buy out my brother on a property we will inherit before making improvements? | In the end you, your dad, and your brother should come to an agreement so there's no surprises or unfulfilled expectations, but here's my opinion: If you can afford to make the additions now: I would offer to pay fully for the addition, with the understanding that the additional value that it generates is yours. That ... |
Debt collector has wrong person and is contacting my employer | Request verification in writing of the debt. They are required to provide this by law. Keep this for your records. Send them a notice by certified mail stating that this is not your debt and not to contact you again. Indicate that you will take legal action if they continue to try and collect. Keep a log of if/when th... |
When's the best time to sell the stock of a company that is being acquired/sold? | What's your basis? If you have just made a 50% gain, maybe you should cash out a portion and hold the rest. Don't be greedy, but don't pass up an opportunity either. |
What can my relatives do to minimize their out of pocket expenses on their fathers estate | Also the will stipulated that the house cannot be sold as long as one of my wife's aunts (not the same one who supposedly took the file cabinet) is alive. This is a turkey of a provision, particularly if she is not living in the house. It essentially renders the house, which is mortgaged, valueless. You'd have to put... |
Best way to start investing, for a young person just starting their career? | Warren Buffett answered this question very well at the 2009 Berkshire Hathaway annual meeting. He said that it was important to read everything you can about investing. What you will find is that you will have a number of competing ideas in your head. You will need to think these through and find the best way to sol... |
Personal finance management: precise or approximately? | Here is what we do. We use YNAB to do our budgeting and track our expenses. Anything that gets paid electronically is tracked to the penny. It really needs to be, because you want your transaction records to match your bank's transaction records. However, for cash spending, we only count the paper money, not the coi... |
Do I need a business credit card? | I finally got one to separate my business and personal expenses. It will make accounting at the end of the year a lot easier. |
Why is day trading considered riskier than long-term trading? | Often times the commission fees add up a lot. Many times the mundane fluctuations in the stock market on a day to day basis are just white noise, whereas long term investing generally lets you appreciate value based on the market reactions to actual earnings of the company or basket of companies. Day trading often invo... |
Unusual real estate market with seemingly huge rental returns | You are suggesting that a 1% return per month is huge. There are those who suggest that one should assume (a rule of thumb here) that you should assume expenses of half the rent. 6% per year in this case. With a mortgage cost of 4.5% on a rental, you have a forecast profit of 1.5%/yr. that's $4500 on a $300K house. If ... |
Financing Education through Credit Card or Student Loans | I would use student loans and avoid credit card debt if debt is your only option. Here are the advantages I see: Disadvantages: |
Where to Park Proceeds from House Sale for 2-5 Years? | There are some high-yield savings accounts out there that might get you close to 1 percent. Shorter term CDs might also serve you well here- rates are above 1 percent, even with 1-2 year terms: http://www.nerdwallet.com/rates/cds/best-cd-rates/ |
Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | If you think your cash will buy fewer goods in the future due to inflation, are there goods you will want or need in the future that you can purchase now? I think the cost of storage would need to be less than the inflation in price for this to make sense. If you used commodity trading there may not actually be a stora... |
What is inflation? | I've seen a lot of long and complicated answers here so here is my simple and short answer: Let's say the economy consists of: 10 apples and 10$. Then an apple costs 1$. If you print 10$ more you have: 10 apples and 20$. Then an apple costs 2$. That is it! It's not what Kenshin said: Over time, prices go up! However I... |
Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? | In a word, no. If your income is high enough to have to file a return, you have to file a return. My accountant has a nice mindset for making it more palatable. I'll paraphrase: "Our tax system is ludicrously complicated. As a result, it is your duty as an American to seek out and take advantage of every deduction and ... |
Is it necessary to pay tax if someone lends me money to put into my mortgage? | I can't vouch for Australian law, but in the US there is actually a recognized mechanism for "in-family loans" which ensures that it's all fully documented for tax purposes, including filing it as an official second mortgage. (Just did that recently in my own family, which is why I'm aware of it.) We're required to cha... |
What is Fibonacci values? | This is how I've understood this concept. Fibonacci nos/levels/ratios/%s is based on concept of sequential increment. You may find lot of info about Fibonacci on net. In stock market this concept is used to predict psychological level. While a trend is form, usually price tend to accumulate/consolidate at these level. ... |
Are my purchases of stock, mutual funds, ETF's, and commodities investing, or speculation? | I'd argue the two words ought to (in that I see this as a helpful distinction) describe different activities: "Investing": spending one's money in order to own something of value. This could be equipment (widgets, as you wrote), shares in a company, antiques, land, etc. It is fundamentally an act of buying. "Specu... |
Can Per Diem deductions include family travel, meals and housing? | You cannot deduct anything. Since you're actually moving, your tax home will move with you. You can only deduct the moving expenses (actual moving - packing, shipping, and hotels while you drive yourself there). |
Which set of earnings is used to work out the P/E of a stock | @jlowin's answer has a very good discussion of the types of PE ratio so I will just answer a very specific question from within your question: And who makes these estimates? Is it the market commentators or the company saying "we'd expected to make this much"? Future earnings estimates are made by professional analysts... |
What can I replace Microsoft Money with, now that MS has abandoned it? | I have used Quicken for over 10 years. It has always provided the information I needed and I have always received good support from Intuit. |
How should I report my RSUs in my tax return | Your employer should send you a statement with this information. If they didn't, you should still be able to find it through E*Trade. Navigate to: Trading & Portfolios>Portfolios. Select the stock plan account. Under "Restricted Stock", you should see a list of your grants. If you click on the grant in question, you sh... |
Is inflation a good or bad thing? Why do governments want some inflation? | Sensitive topic ;) Inflation is a consequence of the mismatch between supply and demand. In an ideal world the amount of goods available would exactly match the demand for those goods. We don't live in an ideal world. One example of oversupply is dollar stores where you can buy remainders from companies that misjudg... |
Short Selling Specific to India | In India, as suggested above, short/long position can be taken either in F&O or Spot market. The F&O segment short/long can be kept open for appx. 3 months by taking position on the far contract. In intra-day/Spot market, usually the position has to be squared at the end of day or the broker will square it during expir... |
Why are estimated taxes due “early” for the 2nd and 3rd quarters only? | There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet. If you operate on an accrual basis, then the income acc... |
Why would a company care about the price of its own shares in the stock market? | The main reason is that a public company is owned by its share holders, and share holders would care about the price of the stock they are owning, therefore the company would also care, because if the price go down too much, share holders become angry and may vote to oust the company's management. |
Should I set a stop loss for long term investments? | The emphasis of "stop loss" is "stop", not "loss". Stop and long term are contradictory. After you stop, what are you going to do with your cash? Since it's long term, you still have 5+ years to before you use the money, do you simply park everything in 0.5% savings account? On the other hand, if your investment holds ... |
How to read a chart after a split? | The share price on its own has little relevance without looking at variations. In your case, if the stock went from 2.80 to 0.33, you should care only about the 88% drop in value, not what it means in pre-split dollar values. You are correct that you can "un-split" to give you an idea of what would have been the dollar... |
How to find out the amount of preferred stock of Coca Cola Company? | Coca Cola doesn't seem to have any preferred shares outstanding. From the annual report, it does say that the number of common shares outstanding was 2,294,316,831 as of February 22, 2011. (cover page, right before the horizontal break) But normally, you can find it either toward the beginning of the document or in the... |
Who should pay taxes in my typical case? | Once you turn 18 you should open an account in your own name and transfer the assets there. Currently your mom is the one responsible as far as the IRS cares with respect to taxes as it is her name on the account. The taxes due will be based on your mom's tax rate. As a good child you can reimburse your mom for the tax... |
Taxable Website Ad Revenue | If the $5000 is income, then you need to pay income taxes on it. That's simply the way it works. Hourly rate has nothing to do with whether or not you pay taxes. If it helps, try to think of the $5000 as the first $5000 you make for the year. Now it's covered by your standard deduction and you're not paying taxes on... |
Should I Use an Investment Professional? | Agree with the above poster regarding causation vs. correlation. Unless you can separate out the variables questions like this are somewhat impossible to answer. Additionally, one of the fundamental issues is the Agency Problem. Depending on the fee structure the advisor might be more interested in their own self bene... |
When can you adjust for (and re-allow) a disallowed year-end (December) wash-sale loss? | Disallowed losses are created when you buy a stock */- 30 days of a sale at a loss. When you sell and have no shares left, the loss is taken. You can't have no shares and leftover disallowed loss. |
What does “profits to the shareholders jumped to 15 cents a share” mean? | It's a way to help normalize the meaning of the earnings report. Some companies like Google have a small number of publicly traded shares (322 Million). Others like Microsoft have much larger numbers of shares (8.3 Billion). The meaning depends on the stock. If it's a utility company that doesn't really grow, you don't... |
How does conversion of Secured Convertible Notes work? | Let's assume that the bonds have a par value of $1,000. If conversion happens, then one bond would be converted into 500 shares. The price in the market is unimportant. Regardless of the share price in the market, the income per share would be increased by the absence of $70 in interest expense. It would be decreas... |
Buy tires and keep car for 12-36 months, or replace car now? | If the car is in otherwise good shape, it's always less expensive to keep it longer. Think of it this way: you have to buy new tires no matter what. It's just a question of whether or not those new tires are attached to a new car or your current car. |
US taxes and refunding/returning payment | Get the worker put it in writing, and deduct it in December under constructive receipt rules. The fact that you're getting the actual cash in January isn't significant as long as you've secured the payment. Verify this with a tax adviser, but that's what I would do. |
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: |
How credible is Stansberry's video “End of America”? | I know nothing about the guy, but I think the "premium" products (Penny stock recommendations, a newsletter devoted to earning 12% per year, every year, etc) sold by his firm speak for themselves. |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | There are a few potential downsides but they are minor: If you forget to make the payment the interest hit the following month could be significant. With many cards the new charges will be charged interest from the start if the previous payment was late/missed. Just make sure you don't forget to pay the entire bill. If... |
What option-related strategies are better suited to increasing return potential? | I think you need to be very careful here. Covered calls don't reduce risk or increase performance overall. If they did, every investment manager would be using them. In a typical portfolio, over the long term, the gains you give up when your stock goes beyond the strike of your calls will negate the premiums you receiv... |
What can I do with a physical stock certificate for a now-mutual company? | I found the following on a stock to mutual conversion for insurance firms for Ohio. Pulling from that link, Any domestic stock life insurance corporation, incorporated under a general law, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital ... |
Going long vs short, mechanisms involved | My instinct says that there should be no difference. Your instincts are right. Your understanding of math is not so much. You sold $100K at the current price of 7500000RUB, but ended up buying at 3500000, you earned 3500000RUB. That's 100% in USD (50% in RUB). You bought 7500000RUB for the current price of $100K, but s... |
Does investing more money into stocks increase chances of profit? | Have a read of this PF&M article, which @Blackjack has an excellent answer that speaks around risk. Answers which suggest that the return is proportional to the amount invested is a very simplistic argument. It is far more complex than that. I would content that your initial question Does investing more money into stoc... |
Buying from an aggressive salesperson | My advice is to quit worrying about the salesman's tactics. They are a distraction. What do you want? How much are you willing to pay for it. If you want the instrument, decide how much you want to pay for it. Round down to the next even hundred. Take that much in $100 bills. Put the money in his hand and say, "... |
Can you explain “time value of money” and “compound interest” and provide examples of each? | I will just explain the time value of money in general, descriptive terms and save the math for someone else. Imagine: You have half a million dollars. I'd like to borrow it all from you. I'll pay it all back, every penny, but no more. And I'll pay it back in about, oh, thirty years or so. (Imagine also that you can be... |
Will paying off my car early hinder my ability to build credit? | 12% is ridiculously high and routine for loans with no credit history, esp. from the dealer. I don't think though paying off would hurt your credit - you've already got installment loan on your report, and you have history of payments, so it shouldn't matter how long the history is (warning: this is kind of guesswork c... |
Should we prepay our private student loans, given our particular profile? | See my recent answer to a similar question on prepaying a mortgage versus investing in IRA. The issue here is similar: you want to compare the relative rates of funding your retirement account versus paying down your debt. If you can invest at a better rate than you are paying on your debt, with similar risk, then you ... |
Put on a put option | I doubt that this exists, but it could theoretically. After all, a share is kind of an option to a company's future success, and so a call is already a second level on indirection. The better approach would be to 'create your own Put-Puts', by investing less money (A) in the Put you wanted to invest into, and put the s... |
Who could afford a higher annual deductible who couldn't afford a higher monthly payment? | It's simple. Most people don't spend $6000 a year in medical care. As for myself, there's probably only $400 or less, mostly in annual checkups and the like. If you are the type to require more medical care, then you will pay more per month. I know a person with asthma, kidney stones, and inflammatory issues. This per... |
I spend too much money. How can I get on the path to a frugal lifestyle? | For many folks these days, not having a credit card is just not practical. Personally, I do quite a bit of shopping online for things not available locally. Cash is not an option in these cases and I don't want to give out my debit card number. So, a strategy is this: use a credit card for a purchase. Then immediately,... |
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