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Buying an option in the money, at the money, or out of the money | 1 reason is Leverage.... If you are buying out of the money options you get much more bang for your buck if the stock moves in your favor. The flipside is it is much more likely that you would lose all of your investment. |
At what point does it become worth it to file an insurance claim? | We learned the hard way on this one. First, our area was hit with what was called an "inland hurricane" where we forced to file a claim as our home received extensive damage. Within the same year, we also incurred an electrical surge which took out our older big screen tv (one of those big monstrosities that sits on... |
First time consultant, doubts on Taxation | I would look into the possibility that the promise "that no taxes will be withheld" is all about your status as a 'consultant'. They may be meaning you to be treated like a business they buy services from. In Canada the distinction is very watery and I presume the same in India. If you agree to become a business, the... |
Why pay estimated taxes? | Your logic is not wrong. But the risk is more significant than you seem to assume. Essentially you are proposing taking a 2.6% loan to buy stocks. Is that a good strategy? On average, probably. But if your stocks crash you might have significant liabilities. In 1929, the Dow Jones dropped 89%. In 1989, >30%. In 2... |
Does a disciplined stock investor stick with their original sell strategy, or stay in and make more? | One of things I've learned about trading on the stock market is not to let your emotions get to you. Greed and fear are among them. You may be overthinking. Why not keep it simple, if you think it can go up to $300 a share, put in a stop loss at $X amount where you would secure your invested money along with some gains... |
Is there a correlation between self-employment and wealth? | Many studies show that the wealthiest households are self employed and small business owners. But there is significant risk associated, and so the wealth cannot really be enjoyed. |
Is there any instance where less leverage will get you a better return on a rental property? | There are two obvious cases in which your return is lower with a heavily leveraged investment. If a $100,000 investment of your own cash yields $1000 that's a 1% return. If you put in $50,000 of your own money and borrow $50,000 at 2%, you get a 0% return (After factoring in the interest as above.) If you buy an invest... |
Can an unmarried couple buy a home together with only one person on the mortgage? | I did that. What is allowed changes over time, though — leading up to the crisis, lenders would approve at the flimsiest evidence. In particular, my SO had only been in the country a couple years and was at a sweet spot where lack of history was no longer counting against her. Running the numbers, the mortgage was a f... |
What are the costs to maintain an Inc? | According to this FAQ published by the state of Delaware, your annual filing fees will be: Anything above and beyond that is based on company income. If you decide to file an LLC in Delaware instead of a Corporation your annual tax is $300. As others have mentioned in comments to your original question it's worth explo... |
Trading : how to deal with crashes (small or big) | You can buy out of the money put options that could minimize your losses (or even make you money) in the event of a huge crash. Put options are good in that you dont have to worry about not getting filled, or not knowing what price you might get filled with a stop-loss order, however, put options cost money and their ... |
Where can I invest my retirement savings money, where it is safer than stocks? | Does your employer provide a matching contribution to your 401k? If so, contribute enough to the 401k that you can fully take advantage of the 401k match (e.g. if you employer matches 3% of your income, contribute 3% of your income). It's free money, take advantage of it. Next up, max out your Roth IRA. The limit is... |
How can rebuilding a city/large area be considered an economic boost? | You're entirely correct. It's one of those "broken window" fallacies. Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one o... |
Is investing in an ETF generally your best option after establishing a Roth IRA? | It's hard to know what to tell you without knowing income, age, marital status, etc., so I'll give some general comments. ETFs come in all varieties. Some have more volatility than others. It all depends on what types of assets are in the fund. Right now it's tough to outpace inflation in an investment that's "safe" ... |
Why so much noise about USA's credit rating being lowered? | Because the USA is the world's biggest economy - everybody in the world works with the USA (even if the american companies are not direct suppliers, they are surely somewhere in the supply chain). If USA credit rating is lower, that means american companies will find it harder to get loans to finance their business (i.... |
As a 22-year-old, how risky should I be with my 401(k) investments? | As a 22 year old planning for your financial life, it is obvious to say that saving as much as you can to invest for the long run is the smartest thing to do from a financial point of view. In general, at this point, aged 22, you can take as much risk as you'll ever will. You're investing for the very long term (+30/+... |
Buying real estate with cash | To give the seller cash at the closing, you will need to borrow the money ahead of time, which means a mortgage is out. A bank will only make a mortgage if they get the deed. Therefore, you will have to borrow a different way, such as through a more-expensive home equity loan. |
Investing/business with other people's money: How does it work? | You can either borrow money... credit card, line of credit, re-finance your home, home equity line of credit, loan, mortgage, etc. Or you have other invest in your company as equity. They will contribute $X to get Y% of your company and get Z% of the profits. Note amount of profits does not necessarily have to equate... |
Possible replacement for Quicken | Do you use any other online features of Quicken? How many unique ticker symbols do you have? How often do you really need to update the prices? You can always continue to use Quicken, and enter the stock prices by hand. Maybe update them once a month to get an idea of how your investments are doing. That should work... |
Free cash flow and capex on morningstar.com | Free Cash Flow (FCF) is not a metric/data point which represents any ACTUAL cash flow of a company. FCF is a data point which communicates how much cash a company has after Operating cash requirements and cash expenditures "required" to grow and maintain the existing business. FCF can be used to pay dividends, buy back... |
Would I ever need credit card if my debit card is issued by MasterCard/Visa? | My view is from the Netherlands, a EU country. Con: Credit cards are more risky. If someone finds your card, they can use it for online purchases without knowing any PIN, just by entering the card number, expiration date, and security code on the back. Worse, sometimes that information is stored in databases, and those... |
How to invest in a currency increasing in value relative to another? | On international stock exchanges, they trade Puts and Calls, typically also for currencies. If for example 1 NOK is worth 1 $ now, and you buy Calls for 10000 NOK at 1.05 $ each, and in a year the NOK is worth 1.20 $ (which is what you predict), you can execute the Call, meaning 'buying' the 10000 NOK for the contracte... |
Where can you find dividends for Australian Stock Market Shares (ASX) for more than 2 years of data? | You can register with an online broker. You can usually join most online brokers for free and only have to fund your account if you decide to place a trade. You may also check out the website of the actual companies you are interested in. They will provide current and historic data of the company's financials. For BHP ... |
How should one refuse to father in law (Chinese) when he wants to borrow money? | In these situations, one solution is to use the "I was just about to ask you the same thing..." response. This is kind of a famous way to deal with people asking you for money, whether it's someone asking to borrow "$10 at lunch time" or "$3000 for a car" or the like. So: Person X asks you for money, say $2000. Your re... |
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. |
Evidence for Technical Analysis [duplicate] | To answer your original question: There is proof out there. Here is a paper from the Federal Reserve Bank of St. Louis that might be worth a read. It has a lot of references to other publications that might help answer your question(s) about TA. You can probably read the whole article then research some of the other ... |
What exactly is a “bad,” “standard,” or “good” annual raise? If I am told a hard percentage and don't get it, should I look elsewhere? | What makes a "standard" raise depends on how well the economy is doing, how well your particular industry is doing, and how well your employer is doing. All these things change constantly, so anyone who says, "a good raise is 5%" or whatever number is being simplistic. Even if true when he said it, it won't necessarily... |
Equation to determine if a stock is oversold and by how much? | To my knowledge, there's no universal equation, so this could vary by individual/company. The equation I use (outside of sentiment measurement) is the below - which carries its own risks: This equations assumes two key points: Anything over 1.2 is considered oversold if those two conditions apply. The reason for the... |
What are my options to make my money work for me? | As stated in the comments, Index Funds are the way to go. Stocks have the best return on investment, if you can stomach the volatility, and the diversification index funds bring you is unbeatable, while keeping costs low. You don't need an Individual Savings Account (UK), 401(k) (US) or similar, though they would be h... |
What are the common moving averages used in a “Golden Cross” stock evaluation? | The 'standard' in such moving average crossover systems is 50/200. The numbers are essentially arbitrary as long as the long term average is greater than the short term and there is some different between the averages in terms of the smoothing they provide (i.e. comparing a 74 day MA to a 75 day MA isn't what the syste... |
Walking away from an FHA loan | According to the Trulia reference on the issue, New York is a recourse state. Recourse means that the lender can go after you for the difference between the foreclosure discharge amount (in New York - the higher of the FMV or the actual sale price) and the debt balance. That includes garnishing your wages, seizing your... |
When is it better to rent and when is better buy in a certain property market? | The first question is low long will you wish to stray there? It costs of lot in legal changes other changes plus taxes to buy and sell, so if you are not going to wish to live somewhere for at least 5 years, then I would say that renting was better. Do you wish to be able to make changes? When you rent, you can... |
What are some factors I should consider when choosing between a CPA and tax software | I'm glad keshlam and Bobby mentioned there are free tools, both from the IRS and private software companies. Also search for Volunteer Income Tax Assistance (VITA) in your area for individual help with your return. A walk-in tax clinic strength is tax preparation. CPAs and EAs provide a higher level of service. For ... |
Want to buy above market price? | Yes, you can do this buy placing a conditional order to buy at market if the price moves to 106 or above. Once the price hits 106 your market order will hit the market and you will purchase the stock at 106 or above. You can also place a tack profit order at 107 linked to your initial conditional buy order, so that onc... |
Who can truly afford luxury cars? | It very much depends on whether you want to drive around in an expensive car, or whether you want an expensive car parked on your driveway. And whether you want to buy a new car, or a used one. And whether you know a reliable garage that doesn't rip you off or not. For example, if my wife who drives maybe 5,000 miles ... |
What did John Templeton mean when he said that the four most dangerous words in investing are: ‘this time it’s different'? | This refers to the faulty idea that the stock market will behave differently than it has in the past. For example, in the late 1990s, internet stocks rose to ridiculous heights in price, to be followed soon after with the Dot-Com Bubble crash. In the future, it's likely that there will be another such bubble with anot... |
Company revenue increased however stock price did not | The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. But that result doesn't indicate that the company is making money. The word for making money is profit, not revenue. Profit equals r... |
Investment for beginners in the United Kingdom | Before jumping into stock trading, do try Mutual Funds and Index funds, That should give you some good overview of the equity markets. Further, do read up on building a balanced portfolio to suit your need and risk apetite. This would help you decide on Govt. bonds and other debt instruments. |
What are the tax implications of exercising options early? | Despite a fair number of views, no one besides @mbhunter answered, so I'll gather the findings of my own research here. Hopefully, this will help others in similar situations. If you spot any errors, please let me know! |
What is the theory behind Rick Van Ness's risk calculation in the video about diversification? | The calculation and theory are explained in the other answers, but it should be pointed out that the video is the equivalent of watching a magic trick. The secret is: "Stock A and B are perfectly negatively correlated." The video glasses over that fact that without that fact the risk doesn't drop to zero. The rule is... |
If the U.S. defaults on its debt, what will happen to my bank money? | I have been through default in Ukraine august 1998. That was a real nightmare. The financial system stopped working properly for 1 month, about 30% of businesses went bankrupt because of chain effect, significant inflation and devaluation of currency. So, it is better to be prepared, because this type of processes resu... |
Switch from DINK to SIWK: How do people afford kids? | As this is anonymous, can you give us actual numbers? I can make guesses based on your percentages, but it would help. Lets assume you both make $35k (since you said child care would take up the bulk of your wife's income, it must be fairly low incomes) The answer usually isn't a simple "do this", but small adjustments... |
Am I doing the math for this covered call/long put strategy correctly? What risks do I run with this strategy? | FYI: GM has an earnings announcement on April 24th. I think you were trying to create a safe trade by profiting if GM's price fell within a probable range. The chart of the Iron Condor captures just about a standard deviation of movement. So as long as GM is between 31.28 - 37.22 in 34 days you keep the max profit o... |
What are the pros and cons of investing in a closed-end fund? | The pros and cons of investing in a closed end fund both stem from the fact that the price per share is likely to differ from the net asset value (NAV) of the underlying assets. That could work to your advantage if the fund is selling for LESS than NAV, or at a discount. Then you get the "benefit of the bargain" and ho... |
How to keep control of shared expenses inside marriage? | Websites like neobudget dot com or mint dot com can help you see where your money is going, especially if you use mostly checks, debit cards, or credit cards for your purchases. They are less useful if you use cash often. |
How can I determine if my rate of return is “good” for the market I am in? | A good way to measure the performance of your investments is over the long term. 25-30% returns are easy to get! It's not going to be 25-30% in a single year, though. You shouldn't expect more than about 4% real (inflation-adjusted) return per year, on average, over the long term, unless you have reason to believe that... |
How to sell a stock in a crashing market? | What is essential is that company you are selling is transparent enough. Because it will provide additional liquidity to market. When I decide to sell, I drop all volume once at a time. Liquidation price will be somewhat worse then usual. But being out of position will save you nerves for future thinking where to step ... |
What does cryptocurrency mean for governments? | Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income. |
Is it a good idea to rebalance without withdrawing money? | Rebalancing has been studied empirically quite a bit, but not particularly carefully and actually turns out to be very hard to study well. The main problem is that you don't know until afterward if your target weights were optimal so a bad rebalancing program might give better performance if it strayed closer to optim... |
What is a “Subscription Rights Offering” of a stock one owns? | After a company goes public, if it wants to raise more money, then it does this by secondary public offering or rights issue. In subscription rights issue gives the right to existing share holders to buy new shares at equal proportion. So if every one buys, they maintain the same percentage of ownership. Generally the ... |
What is the purpose of property tax? | Property taxes, at least in Canada, are levied by the municipality or city in which the property is situated. For many cities, it is a significant source of income. Part of the justification from the municipal point of view is that the land is serviced, in that it generally has city services like water, sewer, garbage... |
What U.S. banks offer two-factor authentication (such as password & token) for online banking? | There are very few banks which offer two-factor authentication. Part of the reason is cost. Providing a token to every account-holder is expensive, not just in the device or system, but in providing support and assistance to the millions of people who won't have the faintest idea how it works and complain that they n... |
Wash sales + restricted stock in USA: grant date or vesting date? | The vesting date. Look at publication 525, under stock options, where they talk about ESPP: Your basis is equal to the option price at the time you exercised your option and acquired the stock. The timing and amount of pay period deductions do not affect your basis. |
Which banks have cash-deposit machines in Germany? | HypoVereinsbank (member of UniCredit group), a few savings banks ("Sparkasse") and VR Banks offer cash (bill) deposit machines. However, it can take a few business days until the deposit is credited to your checking account, which has to be with the same bank. Google for "Bargeldeinzahlungsautomat" (=cash deposit mach... |
Do classes have to pay sales tax on materials used? | In most jurisdictions, both the goods (raw materials) and the service (class) are being "sold" to the customer, who is the end user and thus the sale is subject to sales tax. So, when your friend charges for the class, that $100 is subject to all applicable sales taxes for the jurisdiction and all parent jurisdictions ... |
What is the best source of funding to pay off debt? | Thirty thousand in credit card debt is a "big elephant to eat" so to speak. But you do it by taking a bite at a time. One positive is that you do not want to borrow from your 401K. Doing so is a horrible idea. The first question you have to ask yourself and understand, is how you accumulated 30K in credit card debt ... |
Should the poor consider investing as a means to becoming rich? | What could a small guy with $100 do to make himself not poor To answer the question directly, not much. Short of investing in something at the exact moment before it goes bananas, then reinvesting into a bigger stock and bigger etc, it's super high risk. A better way is to sacrifice some small things, less coffee, less... |
How can I get a wholesaler ID number? | This is a state by state thing, and I'm cheating because I know you are in New York State: |
Do stock prices drop due to dividends? | Yes, the stock price drops on the ex-dividend date by roughly the amount of the dividend. There is even academic research testing this and confirming that the popular rule of thumb works well. |
Do high interest rates lead to higher bond yields or lower? | Imagine that the existing interest rate is 5%. So on a bond with face value of 100, you would be getting a $5 coupon implying a 5% yield. Now, if let's say the interest rates go up to 10%, then a new bond issued with a face value of 100 will give you a coupon of $10 implying a 10% yield. If someone in the bond market b... |
how do I calculate rate of return on call options that are spread | You don't necessarily have to use a LEAP to do a spread. Since you are doing a covered call, I'm assuming that you would be comfortable with having that call exercised and you are bullish on the stock. So doing a spread trade with the short call option would essentially be capping your maximum profit without risking th... |
How to interpret these explanatory graphs (about option strategies)? | The blue line is illustrating the net profit or loss the investor will realise according to how the price of the underlying asset settles at expiry. The x-axis represents the underlying asset price. The y-axis represents the profit or loss. In the first case, the investor has a "naked put write" position, having sold ... |
How best to grow my small amount of money starting at a young age? [duplicate] | (Congrats on earning/saving $3K and not wanting to blow it all on immediate gratification!) I currently have it invested in sector mutual funds but with the rise and fall of the stock market, is this really the best way to prepare long-term? Long-term? Yes! However... four years is not long term. It is, in fact, bord... |
What is a good service that will allow me to practice options trading with a pretend-money account? | Try ThinkOrSwim by TDAmeritrade. It allows you to paper trade with a powerful trading platform. There's also a mobile app so you can trade on the go. Good luck! |
Is there any online personal finance software without online banking? | neobudget.com is a website that does exactly what you are describing. It is set up for electronically using the envelope system of budgeting. Disclosure: neobudget was founded by a former coworker of mine. |
Shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance | For a personal finance forum, this is too complicated for sustained use and you should find a simpler solution. For a mathematical exercise, you are missing information required to do the split fairly. You have to know who overlaps and when to know how to do the splits. For an extreme example, take your dates given:... |
How are stock buybacks not considered insider trading? | Companies already have to protect themselves against employees trading the company's shares with insider information. They typically do that in a number of ways: Taken together, this tends to mostly mitigate the risk of employees trading with insider information, though it's probably not perfect. In practice, the compa... |
Am I putting myself at any security risks by putting all my money in one bank institution? | For small amounts I wouldn't be too concerned. There are two factors I can think of: For relatively small amounts and when dealing with reputable banking institutions there should be little concern of banking with a single bank. It's what most people do. |
How do you measure the value of gold? | We measure the value of gold by comparing it to other things. Sorry, but there is no better answer than that. There is no gold standard (pun intended) by which objects can be measured in value because "value" is a subjective term. It would be comparable to asking how funny is an object. Different objects are funny to d... |
How can I tell if this internet sales manager is telling me the real “true cost” of a new car to the dealer | Consumer Reports offers a service that can tell you detailed actual cost to a dealer for a specific model and accessories -- real cost after rebates, not just invoice price. It costs a bit to order these reports, but if you are serious about buying a new car they are a highly recommended tool -- cu is independent and w... |
What exactly is a “derivative”? | There are a few unsavory factors that have led to the creation of new derivatives: |
Is dividend taxation priced in derivatives? | While derivative pricing models are better modeling reality as academia invests more into the subject, none sufficiently do. If, for example, one assumes that stock returns are lognormal for the purposes of pricing options like Black Scholes does, the only true dependent variable becomes log-standard deviation otherwis... |
Why buy a vertical spread if I could instead buy a naked call? | Figured it out. Vertical spreads significantly reduce the amount of "buying power" on the account needed vs. buying / selling pure calls / puts. So even though the transaction fees may more double in some instances, it may be worth it in order to operate with pricier underlying instruments. Spreads are also considere... |
Are AAA private-sector corporate bonds safer than government bonds? | Haven't there been examples of governments defaulting, delaying payment and imposing haircuts on investors? Greece and Argentina come to mind. Quite a few Govt have defaulted in the past or were very of default or crisis. Most 3rd world countries or developing countries have under gone stress at some point. Greece was ... |
Personal Loan: How to define loan purpose | I would imagine that it goes beyond purpose and also addresses the demographic as a poor credit risk. Those seeking a post secondary education are a poor credit risk. They are at the beginning of their careers so tend to have low income, a short credit history, and a very short time of managing money on their own. Al... |
Australian stocks - any dividend tax or capital gains tax? | For non Australian residents: Dividends withholding tax rate is 30%. Depending upon your country of residence where there is a tax treaty in place to avoid double taxation, then this can be reduced. Note that only dividends that are unfranked are subject to this (in Australia, if tax has already been paid by the comp... |
How to evaluate stocks? e.g. Whether some stock is cheap or expensive? | nan |
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. |
Converting annual interbank rates into monthly rates | The formula you're looking for is Thus, from 3% p.a. you get ca. 0.247% per month. However, as you see 0.25% is a good approximation (generally, small rates give good approximation). |
Can the U.S. government retroactively tax gains made earlier in the fiscal year? | You're certainly referring to "Ex Post Facto" laws, and while the US is constitutionally prohibited from passing criminal laws that are retroactive, the US Supreme Court has upheld many tax laws that apply tax code changes retroactively. You might ask a similar question on Law.SE for a more thorough treatment of the le... |
What were the main causes of the spike and drop of DRYS's stock price? | Because it's a declining company and used as an institutional sized pump and dump with a new toxic financing every week. Look up Kalani Investments - they're behind it all. |
Can an ETF, open at a price other than what the pre-market was at? | If you're talking about an ETF trading on Arca, it's probably because of the opening auction: The match price is the price that maximizes the volume that can be executed within the Auction Collars. The Core Open Auction will use the match price closest to the closing price of the previous trading day (based on normal m... |
What happens if futures contract seller defaults? | MD-Tech answered: The answer is in your question: derivatives are contracts so are enforced in the same way as any other contract. If the counterparty refuses to pay immediately they will, in the first instance be billed by any intermediary (Prime Broker etc.) that facilitated the contract. If they still refuse to pay... |
Where was the huge scandal in the Wells Fargo scandal? | The Wells Fargo scandal was and still is a big deal because Wells Fargo opened over 1.5 million unauthorized bank and credit card accounts. The credit card accounts were opened without authorization, which means people's credit scores and reports were pulled without permission. That is considered fraud and identity the... |
Will a Barclaycard Visa help me in building up credit score? | Payment history is probably the most significant contributor to your credit score. Having a solid history of making, at least the minimum, payments on time will have a positive impact on your credit score. Whether or not this specific transaction means anything to that equation is up for debate. If you have no cred... |
Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? | I would start with The Intelligent Investor. It's more approachable than Security Analysis. I read the revised edition which includes post-chapter commentary and footnotes from Jason Zweig. I found the added perspective helpful since the original book is quite old. Warren Buffet has called Intelligent Investor "the b... |
Claiming business expenses for a business with no income | Yes you can claim your business deductions if you are not making any income yet. But first you should decide what structure you want to have for your business. Either a Company structure or a Sole Trader or Partnership. Company Structure If you choose a Company Structure (which is more expensive to set up) you would cl... |
What are useful indexes for rapid evaluation of country investment risk? | Rather than using the Human Development Index or Ease of Doing Business, if you primary purpose is for investments, you need to consider the Country rating provided by various agencies like These would tell as to how good the country is for investment in general. Just to highlight a difference, China may not fare very... |
Why do governments borrow money instead of printing it? | My answer is that when confronted with the obvious, the most common human reaction is to seek reasons for it, because things have to be right. They have to have a reason. We don't like it when things suck. So when finding out that you are being ripped off every day of your life, your reaction is "There must be a logic... |
What are good games to play to teach young children about saving money? | We play Cash Flow and Cashflow for Kids by Robert Kiyosaki. Our kids love it. |
How much would it cost me to buy one gold futures contract on Comex? | Brokers usually have this kind of information, you can take a look at interactive brokers for instance: http://www.interactivebrokers.co.uk/contract_info/v3.6/index.php?action=Details&site=GEN&conid=90384435 You are interested in the initial margin which in this case is $6,075. So you need that amount to buy/sell 1 fut... |
Moving Coin Collection to Stapled Coin Pockets | I would be wary of having coins in containers with cardboard. Ideally you want the coins to be in an airtight envelope made of plastic to minimize any chance of oxidation or reaction with chemicals in the air. Cheap, retail coins like you would find in a Whitman collection are not generally going to hold value well. So... |
How does Portfolio Turnover affect my investment? | may result in more taxes when Fund shares are held in a taxable account. When the fund manager decides to sell shares of a stock, and those shares have grown in value, that growth is a capital gain. If that fund is part of a taxable account then the investors in the fund will have to declare that income/gain on their... |
Is the “Bank on Yourself” a legitimate investment strategy, or a scam? | I haven't read the book and have no intention of reading it. This definitely looks like a forced savings plan with "Whole Life Insurance" as the theme – which is pretty bad for someone who is able to take care of his finances. It would be good for someone who is not very good with his finances and wants to be forced in... |
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 be... |
Purchasing options between the bid and ask prices, or even at the bid price or below? | Yes, almost always. I trade some of the most illiquid single stock options, and I would be absolutely murdered if I didn't try to work orders between the bid/ask. When I say illiquid, I mean almost non-existent: ~50 monthly contracts on ALL contracts for a given underlying. Spreads of 30% or more. The only time you s... |
Buy small-cap ETF when you already have large-cap of the same market | Yes, you should own a diverse mix of company sizes to be well diversified. While both will probably get hit in a recession, different economies suit different sized companies very differently in many cases, and this diversity positions you best to not only not miss out in cases where small companies do better out of re... |
Why do people buy new cars they can not afford? | I would answer your question very simply: marketing works. "If you don't have a new F-150, you are not a real man." for men, and "If you don't have a new Honda Pilot your kids are in danger." for woman. One observation that reinforces this are the amount of new(er) Buicks on the road. Five years ago, they were prett... |
What market conditions favor small cap stocks over medium cap stocks? | Small cap companies are just smaller, so the risk for them to fail is higher but the potential for higher returns is also higher. |
Can I open a Demat account in India from abroad? | You need 2 things One a Demat Account and second a Broker Account. If you need to trade online, then an agreement [Power of Attorney] between Your Saving Bank Account, the Demat Account and the Trading Account. So there are quite a few forms that need signature and proof of identify. Physical presence is required. |
Can I transfer my Employee Stock Purchase Plan assets to a different broker? | I have an ESPP with E*Trade; you can transfer stock like that via a physical (paper) asset-transfer form. Look for one of those, and if you can't find it, call your brokerage (or email / whatever). You own the shares, so you can generally do what you want with them. Just be very careful about recording all the purchase... |
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