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Buying shares in employer's company during IPO | So the key factor here, IMHO, is the amount we are talking about. $2K is just not a lot of money. If you lose every penny, you can recover. On the other hand it is unlikely to make you wealthy. So if I was you I would buy in, more for the fun of it all. Now if it was a large amount of money that we were talking abo... |
Is my wash sale being calculated incorrectly? | You add the wash sale loss to your cost basis for the other transaction so you would have two entries in your schedule d reporting 1.) Listing the $2000 loss as a wash 2.) The cost basis for your second transaction is thus $1000+$2000 = $3000 so when it was sold for $2000 you now have a reportable loss of $1000. For mo... |
What is the US Fair Tax? | The fair tax is a proposal to replace the US income tax with a sales tax. Pros of Fair Tax: It's a large change to the way the United States currently does things. The "Fair Tax Act of 2011" is H.R.25 in the US House and S.13 in the Senate. The full text of the bill is available at the links provided. There are some f... |
Pay online: credit card or debit card? | In the UK it is almost always better to purchase with a credit card for transactions above £100 but below £30,000. This is due to Section 75 of the Consumer Credit Act 1974 which makes your credit card company jointly liable if something goes wrong. In other words, if you buy something worth £1000 with your credit card... |
If I put in a limit order for the same price and size as someone else, which order goes through? | The one whose order gets to the exchange first. The exchange receives the orders and arranges them in First-In-First-Out order, by which they're then executed. At some point it is synchronized and put into a list. Whoever gets to that point first - gets the deal. |
Why do some companies (like this company) have such a huge per share price? | Simple answer is because the stocks don't split. Most stocks would have a similar high price per share if they didn't split occasionally. Why don't they split? A better way to ask this is probably, why DO most stocks split? The standard answer is that it gives the appearance that stocks are "cheap" again and encourage... |
Does a bond etf drop by the amount of the dividend just like an equity etf | Most bond ETFs have switched to monthly dividends paid on the first of each month, in an attempt to standardize across the market. For ETFs (but perhaps not bond mutual funds, as suggested in the above answer) interest does accrue in the NAV, so the price of the fund does drop on ex-date by an amount equal to the divi... |
Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”? | Though it seems unintuitive, you should rationally ignore the past performance of this stock (including the fact that it's at its 52-week high) and focus exclusively on factors that you believe should affect it moving forward. If you think it's going to go up even further, more than the return on your other options f... |
MasterCard won't disclose who leaked my credit card details | File a John Doe lawsuit, "plaintiff to be determined", and then subpoena the relevant information from Mastercard. John Doe doesn't countersue, so you're pretty safe doing this. But it probably won't work. Mastercard would quash your subpoena. They will claim that you lack standing to sue anyone because you did not... |
Bait-and-switch on new car lease | I strongly discourage leasing (or loans, but at least you own the car at the end of it) in any situation. it's just a bad deal, but that doesn't answer your question. Most new cars are "loss leaders" for dealerships. It's too easy to know what their costs are these days, so they make most of their money though financ... |
Starting a new job. Help me with retirement/debt planning please! | Your initial plan (of minimizing your interest rate, and taking advantage of the 401(k) match) makes sense, except I would put the 401(k) money in a very low risk investment (such as a money market fund) while the stock market seems to be in a bear market. How to decide when the stock market is in a bear market is a s... |
How do I use investments to lower my taxes [US]? | Consider the individual who pays $1,000,000 in taxes. His/her income must be substantial. That is what one should aim for. Investments for the most part, do not lower ones taxes. In one of John Grisham's novels, tax shelters are being discussed. Sorry, I do not remember which book. The discussion goes something ... |
What's a Letter of Credit? Are funds held in my bank for the amount in question? | Wikipedia has a detailed article explaining this. A standard, commercial letter of credit (LC) is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. So yes, they are primarily for use by businesses. If you will read the articl... |
Where should I park my rainy-day / emergency fund? | First off, you generally want to park your emergency fund somewhere that is "safe", meaning something that is not subject to market fluctuations. Your emergency fund is something you need to be able to count on when times are tough! That rules out things like stock market investments. Secondly, you need to think abou... |
What is the easiest way to back-test index funds and ETFs? | check pastsat-backtesting , backtesting tool, where one can can test on well known technical indicators without coding skills |
Buying a small amount (e.g. $50) of stock via eToro “Social Trading Network” using a “CFD”? | Is eToro legitimate? If you have any doubts about eToro or other CFD providers (or even Forex providers, which are kind of similar), just type eToro scam in Google and see the results. |
Calculate a weekly payment on a loan when payment is a month away | At time = 0, no interest has accrued. That's normal. And the first payment is due after a month, when there's a month's interest and a bit of principal due. Note - I missed weekly payments. You'd have to account for this manually, add a month's interest, then calculate based on weekly payments. |
Is it worth buying real estate just to safely invest money? | Investment is very uncertain, so I believe that unless you have loads of money, you should not play around with houses for the sole purpose of investing. Here are the questions which I would consider to judge the situation. Note that this is based on the current situation in The Netherlands Income: Your income is 1800 ... |
What governs the shape of price history graphs? | Dividend-paying securities generally have predictable cash flows. A telecom, electric or gas utility is a great example. They collect a fairly predictable amount of money and sells goods at a fairly predictable or even regulated markup. It is easy for these companies to pay a consistent dividend since the business is "... |
Filing taxes on stocks | You need to talk to an accountant who practices tax accounting, preferaby someone who is an Enrolled Agent (EA) with the IRS, and possibly an attorney who specializes in tax law. There are multiple issues here, and the executor of your father's estate might need to be involved here too. Presumably you were a minor in... |
static data for mutual funds/hedge funds | It's not really my field, but I believe it's all the information that doesn't change (i.e. isn't "real-time") about the business of hedge funds. For example, this site quotes: The product maintains comprehensive static data records including assets, depositories, accounts, settlement instructions and a wide rang... |
Purpose of having good credit when you are well-off? | I have never had a credit card and have been able to function perfectly well without one for 30 years. I borrowed money twice, once for a school loan that was countersigned, and once for my mortgage. In both cases my application was accepted. You only need to have "good credit" if you want to borrow money. Credit score... |
Why is it in a company’s interest to have high stock prices? [duplicate] | After the initial public offering, the company can raise money by selling more stock (equity financing) or selling debt (e.g. borrowing money). If a company's stock price is high, they can raise money with equity financing on more favorable terms. When companies raise money with equity financing, they create new shar... |
Huge return on investment, I feel like im doing the math wrong | And now it is at about $3. Many times "skeletons" are bought and inflated for various reasons. Some are legitimate (for example a private business merging into a defunct but public corporation to avoid wasting resources on going public), some are not (mainly pump-and-dump scams that are using "skeletons"). I don't know... |
Can someone explain how government bonds work? | The short of it is that bonds are valued based on a fundamental concept of finance called the "time value of money". Stated simply, $100 one year from now is not the same as $100 now. If you had $100 now, you could use it to make more money and have more than $100 in a year. Conversely, if you didn't invest it, the $10... |
What are some good, easy to use personal finance software? [UK] | I'm a big fan of Mint. I tried Wesabe prior to mint and at the time (about a year ago) it was lacking the integration of many of my accounts, so I had to go with Mint by necessity. Since then, Mint has gotten better almost monthly. I can do almost everything I want, and the budgeting tools (which would address your "6 ... |
Would it make sense to take a loan from a relative to pay off student loans? | I struggle to see the value to this risk from the standpoint of your mother-in-law. This is not a small amount of money for a single person to lend to a single person ignoring your personal relationship. Right now, using a blended rate of about 8% and a 5 year payment period, your cost on that $50,000 is somewhere i... |
devastated with our retirement money that we have left | The answers you've received already are very good. I truly sympathize with your situation. In general, it makes sense to try to build off of existing relationships. Here are a few ideas: I don't know if you work for a small or large company, or local/state government. But if there is any kind of retirement planning thr... |
Is it a good practice to keep salary account and savings account separate? | There are a lot of good answers, but I will share my experience. First, a savings account needs to be for savings. If your in the US you have "Regulation D" to deal with and that will bite you on the rear if you go over those limits. Specially easy to do if your purchasing from a savings account. Next having an "Inco... |
Why can't house prices be out of tune with salaries | Here's another way to think about. Let's assume it is 2011 and we have a married couple who are 25 and make a combined salary of $50,000/yr net. A suitable first house in their area is $300,000, six times their annual net salary. Assuming they could scrimp so that 1/2 of take-home went toward saving for their home, ... |
Formula to determine readiness to retire based on age, networth and annual expense | The standard interpretation of "can I afford to retire" is "can I live on just the income from my savings, never touching the principal." To estimate that, you need to make reasonable guesses about the return you expect, the rate of inflation, your real costs -- remember to allow for medical emergencies, major house re... |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | you either tell your financial department about them (e.g. I used to get a student's tax discount), or you file them separately. But you don't have to file anything by default. That is a comment connected to the question. In the united states you can almost achieve this. 90% of the numbers on my tax form are automate... |
Does exposure to financials in corporate bond funds make sense? | One reason a lot of bond ETFs like Financials are because of how financial companies work. They usually have amazing cash flows due to deposits and fees and therefore have little risk associated with paying their debts in the short term. The rest of VCSH contains companies with low default risk and good cash flow gene... |
Should I pay more than 20% down on a home? | The more you put down now, the less money you are borrowing. 30yrs of interest adds up. Even paying a small amount at the beginning of the mortgage can turn into a huge savings over the life of the loan. That's why you'll find advice to make extra mortgage payments in the beginning. The question is: Do you have a bet... |
Why does gold have value? | A lot of people probably don't agree with him, but Warren Buffett has some great quotes on why he doesn't invest in gold: I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about... |
Paying extra on a mortgage. How much can I save? [duplicate] | Can I pay $12,000 extra once a year or $1000 every month - which option is better? Depends when. If you mean 12K now vs 1K a month over the next 12 months, repeating this each year, now wins. If you mean saving 1K a month for 12 months then doing a lumpsum, the 1K a month wins. Basically, a sooner payment saves you mor... |
My friend wants to put my name down for a house he's buying. What risks would I be taking? | If you really want to help your friend buy a house, make a counter-offer to buy the house yourself and lease it to your friend, with the option to buy for original purchase cost, plus all interest paid so far to the bank, plus closing costs and other expenses incurred by you, minus payments made so far by the friend. O... |
What is KIRCHSTRASSE on my statement bill? | POS stands for Point of Sale (like a specific store location) which indicates that the purchase occurred by using your debit card, but it can also be the on-line transaction done via 3-D Secure. Checking with bank, they said that Kirchstrasse transaction could be related to direct marketing subscription service ordered... |
Is candlestick charting an effective trading tool in timing the markets? | Your questions In the world of technical analysis, is candlestick charting an effective trading tool in timing the markets? It depends on how you define effective. But as a standalone and systematic strategy, it tends not to be profitable. See for example Market Timing with Candlestick Technical Analysis: Using robust ... |
Debit cards as bad as credit cards? | This sounds more like a behavioral than a debit card issue to me TBH. Did you put the money you're putting away into a separate savings account that you (mentally) labelled 'for investment'? That's pretty much what I do (and I have a couple of savings accounts for exactly that reason) and even though I know I've got $x... |
Is CFD a viable option for long-term trading? | Something really does seem seedy that if I invest $2500, that I'll make above 50k if the stock doubles. Is it really that easy? You only buy or sell on margin. Think of when the stock moves in the opposite direction. You will loose 50k. You probably didn't look into that. Investment will vanish and then you will have d... |
Should we invest some of our savings to protect against inflation? | If I were in your shoes (I would be extremely happy), here's what I would do: Get on a detailed budget, if you aren't doing one already. (I read the comments and you seemed unsure about certain things.) Once you know where your money is going, you can do a much better job of saving it. Retirement Savings: Contribute u... |
How can you possibly lose on investments in stocks? | For whatever it's worth. Judging from the comments in the other answers, I think everyone is addressing your question, "How can you possibly lose money," there are a lot of ways to possibly lose money in the stock market. Here are my thoughts. This is a chart of the S&P 500 from about 1996 to about 2012. At the to... |
Are Index Funds really as good as “experts” claim? | Two main points to answer this in my opinion. First, most people don't start with say half a million dollar to buy all the stocks they need in one shot but rather they accumulate this money gradually. So they must make many Buys in their lifetime. Similarly, most people don't need to withdraw all their investment in on... |
Investment property refinance following a low appraisal? | Definitely don't borrow from your 401K. If you quit or get laid off, you have to repay the whole amount back immediately, plus you are borrowing from your opportunity cost. The stock market should be good at least through the end of this year. As one of the commentators already stated, have you calculated your net ... |
What actions can I take against a bank for lack of customer service? | I don't think the verbal confirmation from the branch manager is worth anything, unless you got it in writing it basically never happened. That said, what did you sign exactly? An application? I'd think they would be well within their rights to deny that, no matter what the branch manager said. If you actually signed a... |
Vanguard Target Retirement Fund vs. Similar ETF Distribution (w/ REIT) | Your approach sounds solid to me. Alternatively, if (as appears to be the case) then you might want to consider devoting your tax-advantaged accounts to tax-inefficient investments, such as REITs and high-yield bond funds. That way your investments that generate non-capital-gain (i.e. tax-expensive) income are safe f... |
In what order should I save? | This is a bit of an open-ended answer as certain assumptions must be covered. Hope it helps though. My concern is that you have 1 year of university left - is there a chance that this money will be needed to fund this year of uni? And might it be needed for the period between uni and starting your first job? If the ans... |
How would I use Google Finance to find financial data about LinkedIn & its stock? | When fundamentals such as P/E make a stock look overpriced, analysts often point to other metrics. The PEG ratio, for example, can be applied to cast growth companies in a better light. Fundamental analysis is highly subjective. For further discussion on the pitfalls of fundamentals, I suggest A Random Walk Down Wall ... |
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. |
What foreign exchange rate is used for foreign credit card and bank transactions? | On Credit Cards [I am assuming you have a Visa or Master card], the RBI does not decide the rate. The rate is decided by Visa or Master. The standard Sheet rate for the day is used. Additionally SBI would mark it up by few paise [FX mark-up spread]. This is shown as mark-up fee. The rate of USD Vs INR changes frequentl... |
What is the different between 2 :1 split and 1:1 split | I'm guessing you're conflating bonus share issuance with stock split. That seems very common to me, from a quick search; there's even some issues of terminology between the US and Europe, I think - it seems some Europeans may use Bonus Shares to mean Stock Split, as opposed to the more common meaning in the US of Stoc... |
How to work around the Owner Occupancy Affidavit to buy another home in less than a year? | In your particular condition could buy the condo with cash, then get your mortgage on your next house with "less than 20%" down (i.e. with mortgage insurance) but it would still be an owner occupied loan. If you hate the mortgage insurance, you could save up and refi it when you have 20% available, including the initi... |
How do I add my income to my personal finance balance? | Create an account called, say, "Paycheck". When you get paid, create an entry with your gross income as a deposit. For each deduction in your paycheck, create a minus (or expense) entry. After doing that, what will be left in the Paycheck account will be your net income. Simply transfer this amount to the real acco... |
Specifically when do options expire? | 4PM is the market close in NYC, so yes, time looks good. If "out of the money," they expire worthless. If "in the money," it depends on your broker's rules, they can exercise the option, and you'll need to have the money to cover on Monday or they can do an exercise/sell, in which case, you'd have two commissions but... |
Why deep in the money options have very low liquidity | One reason might be the 100% margin requirement on long options. Suppose I want to go long AAPL. I could get a deep ITM call or buy shares. $12,700 for 100 shares, with it's 25% margin requirement is like around $3200 locked up cash. Combine with a deep OTM Jan 2017 $70 strike put for $188, would give a $3400 margi... |
Is it prudent to sell a stock on a 40% rise in 2 months | Depends entirely on the stock and your perception of it. Would you buy it at the current price? If so, keep it. Would you buy something else? If so, sell it and buy that. |
Treatment of donations of appreciated stock to a IRC §501(c)(7) Social Club? | If cash donations are not deductable, stock contributions aren't either and I believe the same rules apply as for a private party. |
UK: Personal finance book for a twenty-something | I will definitely recommend the following books The above books will open lot of eyes to exactly know what you are doing with your personal finances in a day to day basis.These books will surely be in the top of my list which I will be giving away to my kins in my later stage. The concepts are universally the same, fee... |
What is the difference between shares and ETF? | A mutual fund has several classes of shares that are charged different fees. Some shares are sold through brokers and carry a sales charge (called load) that compensates the broker in lieu of a fee that the broker would charge the client for the service. Vanguard does not have sales charge on its funds and you don't n... |
Why ever use a market order? | I don't think you're missing anything. Many modern trading systems actually warn you when trying to enter a market order, asking if you are sure that you wouldn't prefer to set a limit. I fully agree with you that it is usually just better to define a limit even 20% higher than just doing a market trade. Let me give yo... |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | It depends on how much you save, how much your savings earns each year. You can model it with a very simple spreadsheet: Formula view: You can change this simple model with any other assumptions you wish to make and model. This spreadsheet presumes that you only make $50,000/year, never get a raise, that your saving... |
Dispute credit card transaction with merchant or credit card company? | Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go t... |
Withholding for unexpected Short-Term Capital Gains and Penalties | The safe harbor provision is based on the tax you or the prior year. So in 2016 this helped you as your tax was substantially increased from 2015. However, by the same token in 2017 your safe harbor amount is going to be very high. Therefore if 2017 is similar you will owe penalties. The solution here is to make estima... |
Using a Roth IRA instead of a college savings account | One problem with this plan is that the individual must have earned income to contribute to a Roth IRA. If you have an infant, unless she is the new Gerber baby or something like that, there is probably no legitimate way for her to earn income. If you own a business and have kids who are older, you can employ them to do... |
Debit card for minor (< 8 y.o.) | GreenLight offers a paid service for $5 per month that requires an adult primary account holder, and then unlimited accounts, including minors, as part of that service. I saw no minimum age requirement (see section "Minors as Sub-Account Cardholders"). https://www.greenlightcard.com/index.html Disclaimer: I haven't tri... |
What are some good ways to control costs for groceries? | All excellent answers. Scott W. already mentioned to look out for sales and many other answers are ways to be smart with portions: don't overbuy, or be smart with bulk buys. But, I'm surprised nobody mentioned one of the things I'd consider obvious about saving money on groceries: coupons! Coupons can save cash. We... |
Paypal website donations without being a charity | An answer from PayPal stated that donations may be turned on only for Business PayPal accounts that are verified for its non-profit status. Such PayPal Business account must be opened in the name of non-profit organization (not a single person) and go through verification process. One must provide the following informa... |
Capital Gains in an S Corp | These are all factually correct claims. S-Corporation is a pass-through entity, so whatever gain you have on the corporate level - is passed to the shareholders. If your S-Corp has capital gains - you'll get your pro-rata share of the capital gains. Interest? The same. Dividends? You get it on your K-1. Earned income? ... |
Should I keep most of my banking, credit, and investment accounts at the same bank? | I've had all my account with the same bank for all my life. Generally, the disadvantage is that if I want some kind of product like a credit extension or a mortgage, I have the one bank to go to and if they don't want to help me I'm out of luck. However, occasionally there are also perks like the bank spontaneously off... |
In the stock market, why is the “open” price value never the same as previous day's “close”? | Quoted from money.howstuffworks.com: NASDAQ has come up with an auction approach called the opening cross. Here's how it works. In the morning, a computer program looks at all the orders that have come in overnight in each different stock. Based on those orders, the program picks a price level that would be the best op... |
What happens to my stocks when broker goes bankrupt? | +1 to YosefWeiner. Let me add: Legally, technically, or at least theoretically, when you buy stock through a broker, you own the stock, not the broker. The broker is just holding it for you. If the broker goes bankrupt, that has nothing to do with the value of your stock. That said, if the broker fails to transfer your... |
Steps/Procedures to open an online stock trading account in the US | Since you are not starting with a lot of cash the commissions may eat into your account. So go with somebody that has no inactivity fee and low/free commission. I think there are number of sites and the ING sharebuilder.com comes to mind. Scottrade also one of the cheaper ones that i used. |
Are the “debt reduction” company useful? | Many of the services are scams, and those that are not are just doing something you can do yourself - as Jack points out. |
How do rich people guarantee the safety of their money, when savings exceed the FDIC limit? | The FDIC has been pretty good at recovery lost money from failed banks. The problem is the temporary loss from immediate needs. The best thing for anyone to do is diversify in investments and banks with adequate covered insurance for all accounts. Immediate access to available cash is always a priority that should be g... |
What does it mean that stocks are “memoryless”? | With my current, limited knowledge (see end), I understand it the following way: Are share prices really described as "memoryless"? Yes. Is there a technical meaning of the term? What does it really mean? The meaning comes from Markov Models: Think of the behavior of the stock market over time as a Markov Chain, i.... |
Debit cards as bad as credit cards? | If it is one of those debit cards you use just like a credit card without a PIN, I'd cancel it regardless of whatever you are trying to do with your finances. They just seem too dangerous to me. Unlike a credit card, if someone makes fraudulent purchases on a debit card the money is gone from your bank account until y... |
What is value investing? What are the key principles of value investing? | Value investing is an investment approach that relies on buying securities below their intrinsic values. There are two main concepts; one is the Intrinsic Value and the other is Margin of Safety. Intrinsic value is the value of the underlying business - if we are talking about stocks - that can be calculated through c... |
T-mobile stock: difference between TMUSP vs TMUS | The difference between TMUSP and TMUS is that the "with P" ticker is for a TMobile Preferred Stock offering. The "without P" ticker is for TMobile common stock. The difference between the apparent percentage yields is due to Yahoo! Stock misreporting the dividend on the preferred stock for the common stock, which has... |
How many days does Bank of America need to clear a bill pay check | We have a local bank that changed to a bill pay service. The money is held as "processing" when the check is supposed to be cut and shows as cleared on the date the check is supposed to be received. Because our business checking is with the same bank, we discovered recently that the although the check shows cleared f... |
Why is gold not a good investment? | Gold is not really an investment at all, because it doesn't generate an income. It's only worth money because people think it's worth money (it has some industrial uses, but most gold is used as a store of value and not for industrial purposes), not because of its income stream. |
Should I stockpile nickels? | Stockpile? No. Keep a few around? Sure, if you are a collector. I used to collect pennies and I thought the steel pennies from WWII were neat. I do believe I paid about $0.01 for them at the coin shop. They might be worth $0.15 if in great condition today. No harm in finding $20 worth of really nice nickels, maybe... |
What should I do with my money? | Edit: I a in the United States, seek advice from someone who is also in Australia. I am getting about 5.5% per year by investing in a fund (ticker:PGF) that, in turn, buys preferred stock in banks. Preferred stock acts a bit like a bond and a bit like a stock. The price is very stable. However, a bank account is FDIC... |
Am I understanding buying options on stock correctly | Options have legitimate uses as a way of hedging a bet, but in the hands of anyone but an expert they're gambling, not investing. They are EXTREMELY volatile compared to normal stocks, and are one of the best ways to lose your shirt in the stock market yet invented. How options actually work is that you're negotiating ... |
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... |
Is trading stocks easier than trading commodities? | I would not argue if its more difficult, its different, and it much depends what kind of stocks you refer to, i take large caps as example. The players are different. Companies and even govts may hedge in the commodities (futures) market while in big caps this and other entities mainly invest. (Of course there’s HFT in... |
Why do people buy new cars they can not afford? | Two reasons: Many people make lots of financial decisions (and other kinds of decisions) without actually running any numbers to see what is best (or even possible). They just go with their gut and buy things they feel like buying, without making a thoroughgoing attempt to assess the impact on their finances. I share... |
APR for a Loan Paid Off Monthly | If your APR is quoted as nominal rate compounded monthly, the APR is 108.6 %. Here is the calculation, (done in Mathematica ). The sum of the discounted future payments (p) are set equal to the present value (pv) of the loan, and solved for the periodic interest rate (r). Details of the effective interest rate calcula... |
What is the effect of dividends on the futures price of an index | A futures contract is based upon a particular delivery date. In the case of a stock index futures contract is a cash settled futures contract based upon the stock index value at a particular point in time (i.e. this is when the final settlement is determined). In your example, the S&P 500 (SPX) is a price return index... |
Capital gains on no-dividend stocks - a theoretical question | You are overlooking the fact that it is not only supply & demand from investors that determines the share price: The company itself can buy and sell its own shares. If company X is profitable over the long haul but pays 0 dividends then either Option (2) is pretty ridiculous, so (1) will hold except in an extreme "man... |
Explanation on Warren Buffett's famous quote | I think he was trying to say that in the long term the company's fundamental intrinsic value will drive the price of a company's stock, but in the short term stocks move on emotion and publicity that are not necessarily a reflection of their true underlying value. |
Facebook buying WhatsApp for 19 Billion. How are existing shareholders affected? | Of course it is a dilution of existing shareholders. When you buy milk in the supermarket - don't you feel your wallet diluted a little? You give some $$$ you get milk in return. You give some shares, you get Watsapp in return. That's why such purchases must go through certain process of approval - board of directors (... |
What do “cake and underwear” stocks refer to? | I interpret that to mean "vice" stocks and necessities. "Cake" may just be a nicer way of saying "sin" (see The Virtues of Vice Stocks) and includes "lesser sins" like sweets and soda in the group. "Underwear" likely means things that people are going to buy regardless of the economy - daily staples, which are general... |
Is accident insurance worth it for my kids who play sports | The general answer to any "is it worth it" insurance question is "no," because the insurance company is making a profit on the insurance.* To decide if you want the insurance, you need to figure out how much you can afford to pay if something happens, how much they cover, and how badly you want to transfer your risk to... |
If a company's assets are worth more than its market cap, can one say the shares must be undervalued? | You haven't mentioned how much debt your example company has. Rarely does a company not carry any kind of debt (credit facilities, outstanding bonds or debentures, accounts payable, etc.) Might it owe, for instance, $1B in outstanding loans or bonds? Looking at debt too is critically important if you want to conduct th... |
In a competitive market, why is movie theater popcorn expensive? | People have moods, that mean they don't have the same level of demand for luxuries every day. There might be some days when I'm feeling a bit poor, or feel like I need to save money, and the price I'm prepared to pay for a box of popcorn might be 50c. There might be other days, for example, the day after I receive my... |
What's the benefit of opening a Certificate of Deposit (CD) Account? | The benefit, as other answers have mentioned, is higher interest rates than are available compared to other comparable options. My bank keeps spamming me with offers for a sub 1% APR savings account that only requires a $10,000 balance, for example. While CDs and similar safe investments don't seem like they offer mu... |
Capitalize on a falling INR | By no means is this a comprehensive list, but a few items to consider: |
My friend wants to put my name down for a house he's buying. What risks would I be taking? | This is not a full answer and I have no personal finance experience. But I have a personal story as I did this. As Vicky stated Another point: there are various schemes available to help first time buyers. By signing up for this, you would exclude yourself from any of those schemes in the future. I did this for my ... |
GnuCash register reimbursements | You should be recording the reimbursement as a negative expense on the original account the expense was recorded. Let's assume you have a $100 expense and $100 salary. Total $200 paycheck. You will have something like this In the reports, it will show that the expense account will have $0 ($100 + ($100)), while income ... |
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