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What forms (S-1, 8-K, etc) and keywords in news headlines signify dilution? | Possibles: stock offering, secondary placement, increase authorized number of shares, shelf registration. |
How can I invest in US Stocks from outside the US with a credit card instead of a bank account? | You'll have to take cash from your Credit Card account and use that to trade. I doubt any brokerage house will take credit cards as it's trading without any collateral (since credit cards are an unsecured credit) |
Which forex brokerage should I choose if I want to fund my account with over a million dollars? | Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools. |
Value of credit score if you never plan to borrow again? | Only reason I can think of is that having a credit card, or several, is handy for buying stuff on-line, or not having to haul around a fat wallet full of cash. Of course for some of us, getting the cash back and 0% interest periods are nice, too, even if we don't really need the money. Same as for instance trying to get good mpg when you're driving, even if you could easily afford to fill up a Hummer. It's a game, really. |
Shares in stock exchange and dividend payout relationship | It would be 0.22 * Rs 5 per share, i.e. Rs 1.1 per share. For 1000 share it would be Rs 1.1 * 1000, i.e. 1100 |
Economics of buy-to-let (investment) flats | Surely the yield should be Yield = (Rent - Costs) / Downpayment ? As you want the yield relative to your capital not to the property value. As for the opportunity cost part you could look at the risk free rate of return you could obtain, either through government bonds or bank accounts with some sort of government guarantee (not sure what practical terms are for this in Finland). The management fee is almost 30% of your rent, what does this cover? Is it possible to manage the property yourself, as this would give you a much larger cushion between rent and expenses. |
Is 401k as good as it sounds given the way it is taxed? | Before anything, I see that no one mentioned the one thing about 401(k) accounts that's just shy of magic - The matching deposit. In 2015, 42% of companies offered a dollar for dollar match on deposits. Can't beat that. (Note - to respond to Xalorous' comment, the $18K OP deposits can be nearly any percent of his income. The typical match is 'up to' 6% of gross income. If that's the case, the 401(k) deposits are doubled. But say he makes $100K. The $18K deposit will see a $6K match. This adds a layer of complexity to the answer that I preferred to avoid, as I show with no match at all, and no change in tax brackets, the deferral alone shows value to the investor.) On to the main answer - Let's pull out a spreadsheet - We start with $10,000, and assume the 25% bracket. This gives a choice of $10,000 in the 401(k) or $7500 in the taxable account. Next, let 20 years pass, with 10% return each year. The 401(k) sees the full 10% and after 20 years, $67K. The taxable account owner waits to get the 15% cap gain rate and adjusts portfolio, thus seeing an 8.5% return each year and carrying no ongoing gains. After 20 years of 8.5% returns, he has $38K net. The 401(k) owner on withdrawal pays the 25% tax and has $50K, still more than 25% more money that the taxable account. Because transactions within the account were all tax deferred. EDIT - With respect to davmp's comment, I'll offer the other extreme - In his comment, he (rightly) objected that I chose to trade every year, although I did assign the long term 15% cap gain rate, he felt the annual trade was my attempt to game the analysis. Above, I offer his extreme case, a 10% return each year, no trade, no dividend. Just a cap gain at the end. The 401(k) still wins. I also left the tax (on the 401(k)) at withdrawal at 25%, when in fact, much, if not all will be taxed at 15% or lower, which would put the net at $57K or 30% above the taxable account final withdrawal. The next issue I'd bring up is that the 401(k) is taken out at the top (marginal) tax rate, e.g. a single filer with taxable income over $37,650 (in 2016) would save 25% on that 401(k) deduction. Of course if the deduction pulls you under that line, I'd go Roth or taxable. But, withdrawals start at zero. Today, a single retiree has a standard deduction ($4050) and exemption ($6300) for a total $10,350 "zero bracket" with the next $9275 taxed at 10%. This points to needing $500K in pre tax accounts before withdrawals each year would get you past the 10% bracket. (This comes from the suggestion of using 4% as an annual withdrawal rate). Last - the tax discussion has 2 major points in time, deposit and withdrawal, of course. But, the answers here all ignore all the time in between. In between, you see that for any number of reasons, you'll drop from the 25% bracket to 15% that year. That's the time to convert a bit of money to Roth and 'top off' the 15% bracket. It can happen due to job loss, marriage with new spouse either not working or having lower income, new baby, house purchase, etc. Or in-between, a disability put you out of work. That permits you to take money out with no penalty, and little chance of paying even the 25% that you paid going in. This, from personal experience with a family member, funded a 401(k) with 28% money. Then divorced and disabled, able to take the $10K/yr to supplement worker's comp (non taxed) income. |
Should I start investing in property with $10,000 deposit and $35,000 annual wage | In general people make a few key mistakes with property: 1) Not factoring in depreciation properly. Houses are perpetually falling down, and if you are renting them perpetually being trashed by the tenants as well - particularly in bad areas. Accurate depreciation costs can often run in the 5-20% range per year depending on the property/area. Add insurance to this as well. 2) Related to 1), they take the index price of house price rises as something they can achieve, when in reality a lot of the house price 'rise' is just everyone having to spend a lot of money keeping them standing up. No investor can actually track a house price graph due to 1) so be careful to make reasonable assumptions about actual achievable future growth. 3) Failure to price in the huge transaction costs (often 5%+ per sale) and capital gains/other taxes (depends on the exact tax structure where you are). These add up very fast if you are buying and selling at all frequently. 4) Costs in either time or fees to real estate rental agents. Having to fill, check, evict, fix and maintain rental properties is a lot more work than most people realise, and you either have to pay this in your own time or someone else’s. Again, has to be factored in. 5) Liquidity issues. Selling houses in down markets is very, very hard. They are not like stocks where they can be moved quickly. Houses can often sit on the market for years before sale if you are not prepared to take low prices. As the bank owns your house if you fail to pay the mortgage (rents collapse, loss of job etc) they can force you to fire sale it leaving you in a whole world of pain depending on the exact legal system (negative equity etc). These factors are generally correlated if you work in the same cities you are buying in so quite a lot of potential long tail risk if the regional economy collapses. 6) Finally, if you’re young they can tie you to areas where your earnings potential is limited. Renting can be immensely beneficial early on in a career as it gives you huge freedom to up sticks and leave fast when new opportunities arise. Locking yourself into 20yr+ contracts/activities when young can be hugely inhibiting to your earnings potential – particularly in fast moving jobs like software development. Without more details on the exact legal framework, area, house type etc it’s hard to give more specific advise, but in general you need a very large margin of safety with property due to all of the above, so if the numbers you’re running are coming out close, it’s probably not worth it, and you’re better of sticking with more hands off investments like stocks and bonds. |
I'm 23 and was given $50k. What should I do? | nan |
Does the stock market create any sort of value? | With regards to "the stock market," there are actually two markets involved here: PRIMARY MARKET Value is created in the primary market where capital is exchanged for a residual interest in an opportunity. As a theoretical example, if a person operating solo (or with a small team) were to discover or create a breakthrough product, such as an retro-aging pill, that person likely wouldn't have the financial means to fully capitalize on his new-found idea. Others with more capital may also soon discover his idea or improve upon it and exploit it before he has a chance to. For a real life example, a person studying at a California university during the 1990s discovered a method to index internet webpages and was approached by some students after a talk on the subject. He returned to his native southern Europe country seeking funds to develop the web-indexing business and failed to do so. Two of the students that approached him found capital readily available from investors in their campus sphere; their business is today one of the biggest in the world. They had exchanged part of their residual interest for capital to develop their business. The primary market of the stock market works mostly same in creating value. It is also dependent upon the secondary market. SECONDARY MARKET The secondary market indicates the day-to-day value of an enterprise. That market allows shareholders to manage their risk appetites and the enterprise's operators to execute their shareholders' interest for gains. In most cases, a secondary market reference will be used for pricing a primary market issuance. Without that reference, capital would be allocated less efficiently creating additional costs for all involved, issuers and investors. Consider what would happen if you sought to purchase a house and the mortgage lenders had no indication what the property was worth. This would make capital very expensive or possibly deny you access to credit. By having an indication, all involved are better off. That is value creating. There are some large developed economies' equity markets, such as that in Germany, where many large enterprises stay privately held and credit financing, mostly from banks, is used. The approach has proven successful as well. So why do some nations' financial markets still rely on capricious stock markets when private credit financing may do just fine in many cases? It's largely a matter of national culture. Countries such as the Netherlands, the UK and the US have long had active equity markets in continuous use that investors have trusted for centuries. CONCLUSION When leaders of an enterprise wish to grow the business to a large size with investment from the stock market, they aren't limited by the size of their banks' capital. Those leaders and their prospective investors will rely on the secondary market to determine values. In addition, if the leaders raise equity instead of debt capital, they are usually accorded more flexibility to take risks since shareholders usually have their own flexibility to transfer those risks to other investors if for any number of reasons they choose to do so. Stock markets create value in many other ways. The above are the main ways. |
Optimal balence of 401K and charitable savings | Two things I would recommend doing: I would save a minimum of 15% into retirement. By young I will assume that you are under 30. 15K/year + company match will grow into a sick amount of money by the time you are in your 60s. So you have a net worth that is north of 5 million. What kind of charitable giving can you do then? Answer: What ever you want! Also it could be quite a bit more then that. Get a will. It will cost a little bit of money, but for someone like you it is important to have your wishes known. |
Why are American-style options worth more than European-style options? | OK, my fault for not doing more research. Wikipedia explains this well: http://en.wikipedia.org/wiki/Option_style#Difference_in_value Basically, there are some cases where it's advantageous to exercise an American option early. For non-gold currency options, this is only when the carrying cost (interest rate differential aka swap rate or rollover rate) is high. The slight probability that this may occur makes an American option worth slightly more. |
Should a high-school student invest their (relative meager) savings? | Between 1 and 2 G is actually pretty decent for a High School Student. Your best bet in my opinion is to wait the next (small) stock market crash, and then invest in an index fund. A fund that tracks the SP500 or the Russel 2000 would be a good choice. By stock market crash, I'm talking about a 20% to 30% drop from the highest point. The stock market is at an all time high, but nobody knows if it's going to keep going. I would avoid penny stocks, at least until you can read their annual report and understand most of what they're claiming, especially the cash flow statement. From the few that I've looked at, penny stock companies just keep issuing stock to raise money for their money loosing operations. I'd also avoid individual stocks for now. You can setup a practice account somewhere online, and try trading. Your classmates probably brag about how much they've made, but they won't tell you how much they lost. You are not misusing your money by "not doing anything with it". Your classmates are gambling with it, they might as well go to a casino. Echoing what others have said, investing in yourself is your best option at this point. Try to get into the best school that you can. Anything that gives you an edge over other people in terms of experience or education is good. So try to get some leadership and team experience. , and some online classes in a field that interests you. |
Does reading financial statements (quarterly or annual reports) really help investing? | Wow, I cannot believe this is a question. Of course reading the 10Ks and 10Qs from the SEC are incredibly beneficial. Especially if you are a follower of the investing gurus such as Warren Buffett, Peter Lynch, Shelby Davis. Personally I only read the 10K's I copy the pertinent numbers over to my spreadsheets so I can compare multiple companies that I am invested in. I'm sure there are easier ways to obtain the data. I'm a particular user of the discounted free cash flow methodology and buying/selling in thirds. I feel like management that says what they are going to do and does it (over a period of years) is something that cannot be underestimated in investing. yes, there are slipups, but those tend to be well documented in the 10Qs. I totally disagree in the efficient market stuff. I tend to love using methodologies like Hewitt Heisermans " It's Earnings that Count" you cannot do his power-staircase without digging into the 10Qs. by using his methodology I have several 5 baggers over the last 5 years and I'm confident that I'll have more. I think it is an interesting factoid as well that the books most recommended for investing in stocks on Amazon all advocate reading and getting information from 10Ks. The other book to read is Peter Lynch's one-up-wall-street. The fact is money manager's hands are tied when it comes to investing, especially in small companies and learning over the last 6 years how to invest on my own has given me that much more of my investing money back rather than paying it to some money manager doing more trades than they should to get commision fees. |
How do government bond yields work? | Imagine a $1,000 face value bond paying 10% interest semi-annually. That means every 6 months there is $50 being paid. Now, if the price of that bond doubled to $2,000, what is the yield? It is still paying $50 every 6 months but now sports a 5% yield as the price went up a great deal. Similarly, if the price of the bond was cut in half to $500, now it is yielding 20% because it is still paying out the $50 every 6 months. The dollar figure is fixed. What percentage of the price it is can vary and that is why there is the inverse relationship between prices and yields. Note that the length of the bond isn't mentioned here where while usually longer bonds will have higher yields, there can be inverted yield curves as well as calls on some bonds. Also, inflation-indexed and convertible bonds could have different calculations used as principal adjustments or possible conversion to stock can change a perception on the overall return. |
How can I find out what factors are making a stock's price rise? | A few days ago they launched Fannie Mae Guaranteed Multifamily Structures (link) but who knows? It's a penny stock now. Google Finance is pretty good at marking news right on the chart for a particular stock. That's how I tracked that piece of news down. Can't say that it precipitated a lot of people buying the stock, but Google Finance isn't a bad place to start looking. |
What is a good rental yield? | The rule of thumb I have always heard and what we rent our rental house at is 1% per month at the minimum (in the US). The rent has to cover the mortgage, the property taxes, the homeowners insurance, your income taxes (on the rent), the maintenance of the property and the times when the property is vacant. Even at 1% per month that doesn't leave a whole lot of profit compared to what you put in. I have no idea why anybody would buy a rental property in Australia if all they could get is 5% per year before expenses. They couldn't possibly be making money in that investment, not to mention the aggravations of getting late night phone calls because something broke in the rental house. No way I would make that investment. |
In what state should I register my web-based LLC? | In this case not only that you must register in California (either as domestic, or as foreign if you decided to form elsewhere), you'll also be on the hook for back-taxes if you didn't do it from the start. FTB is notorious for going after out-of-state LLCs that Californians open in other States trying to avoid the $800 fee. |
How long should I keep my bills? | In normal cases you don't need it beyond 3-6 months. Beyond this destroy it. However in certain cases its required to be kept; For example if you need to prove that you are legally occupying a place/property and do not have relevant documents, the utility receipts can play a role in establishing that you were occupying a place and using it. In case you are not originaly a resident by birth, and your citizenship is at dispute, these records help. More so if the records are not maintained properly by the utitlity companies themsleves as in most developing countries. In India, these help for many individual who are occupying goverment properties for decades and then resolution is passed that people staying for past 25 yrs now own it, other become illegal and are evicted. For such cases, you could keep a history record say one per year, for past 5 years, and then one for every 5 year of a particular month ... basically in a systematic way. Other than that, just junk them. |
Pending euro payment to a usd account | Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’. |
How to calculate how much house I can afford? | $100K of mortgage debt at 4%, 30 years will result in a $477/mo mortgage. It would take about $23K in income to have 25% of the monthly income cover the mortgage. This means, that with no other large debts, a bank will lend you about 4X your income. If, instead of 25%, we decided that having 20% of income go to the mortgage, the ratio drops to just over 3X. In the end, it comes down to keshlam's advice regarding a budget. I think the question can't be answered as asked, given the fact that you offer no numbers. For the average person, credit card debt, student loans, and cars payments add up to enough to chip away at the amount the bank will lend you. Since (per one of the linked questions) the maximum debt service should be 36%, you start with that and subtract all current payments. If this doesn't suffice, let us know what, exactly you're looking for . |
What should I be aware of as a young investor? | nan |
What is a good 5-year plan for a college student with $15k in the bank? | You can put them in a 5 years CD and getting a maximum of %2.5 APY if you're lucky. If you put 15k now, in 5 years you'll have $1.971. If it sounds good then take a look at the current inflation rate (i'm in usa)... If you want to think about retirement then you should open a Roth IRA. But you won't be able to touch the money without penalties (10% of earnings) before you get 59 1/2 years old. Another option would be to open a regular investment account with an online discounted broker. Which one? Well, this should be a totally separate question... If you decide to invest (Roth IRA or regular account) and you're young and inexperienced then go for a balanced mutual fund. Still do a lot of research to determine your portfolio allocation or which fund is best suited for you. Betterment (i never used it) is a no brainer investment broker. Please don't leave them in a generic checking or low interest savings account because you'll save nothing (see inflation again)... |
When do I need to return short stock to the lender | If the owner of the stock wants it back, they "call" it back. There are no guarantees of how long you can keep it for your short, or the cost involved to hold it. Usually, everyone knows about a particular set-up (e.g. a warrant or convertible bond mispricing) that is attractive for arbitrage. This causes the associated stock to be in high demand thus expensive to borrow for shorting, or impossible to find for any price at all. |
Taking Losses To Save On Tax | No, if you are taking a loss solely and purely to reduce the tax you have to pay, then it is not a good strategy, in fact it is a very bad strategy, no matter what country you are in. No investment choice should be made solely due to your tax consequeses. If you are paying tax that means you made a profit, if you made a loss just to save some tax then you are loosing money. The whole point of investing is to make money not lose it. |
First concrete steps for retirement planning when one partner is resistant | To answer your question: As far as what's available in addition to your 401(k) at work (most financial types will say to contribute up to the match first), you may qualify for a Roth IRA (qualification is based on income), if not, then you may have to go with a Traditional IRA. You and your husband can each have one and contribute up to the limit each year. After that, you could get just a straight up mutual fund, and/or contribute up to limit on your 401(k). My two cents: This may sound counter-intuitive (and I'm sure some folks will disagree), but instead of contributing to your 401(k) now, take whatever that amount is, and use it to pay extra on the car loan. Also take the extra being paid on the mortgage and pay it on the car loan too. Once the car loan is paid off, then set aside 15% of your gross income and use that amount to start your retirement investing. Any additional money beyond this can then go into the mortgage. Once it's paid off, then you can take the extra you were paying, plus the mortgage and invest that amount into mutual funds. You may want to check out Chris Hogan's Retire Inspired book or podcast as well. |
How does start-up equity end up paying off? | In the real world, there are only two times you'll see that 5% become worth anything - ie, something you can exchange for cash - 1) if another company buys them; (2) if they go public. If neither of these things happen, you cannot do anything with the stock or stock options that you own. |
When entering a Futures contract, must the margin deposit be idle or can I profit from it? | In theory, an FCM may accept various types of collateral, including assets such as cash, treasuries, certain stocks, sovereign debt, letters of credit, and (as of 2009, I think,) gold. In practice, most will want you to post cash or cash. Some will take treasuries, but I think you'll generally have a hard time posting securities or other riskier asset classes at most shops, as dealing with the margining around them is more complex (and less profitible). |
Search index futures in Yahoo Finance or Google Finance | Options - yes we can :) Options tickers on Yahoo! Finance will be displayed as per new options symbology announced by OCC. The basic parts of new option symbol are: Root symbol + Expiration Year(yy)+ Expiration Month(mm)+ Expiration Day(dd) + Call/Put Indicator (C or P) + Strike price Ex.: AAPL January 19 2013, Put 615 would be AAPL130119P00615000 http://finance.yahoo.com/q?s=AAPL130119P00615000&ql=1 Futures - yes as well (: Ex.: 6A.M12.E would be 6AM12.CME using Yahoo Finance symbology. (simple as that, try it out) Get your major futures symbols from here: http://quotes.ino.com/exchanges/exchange.html?e=CME |
Personal finance software for Mac that can track stocks and mutual funds? (Even manual updating of share prices will do.) | I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat). |
Why have U.S. bank interest rates been so low for the past few years? | There's two competing forces at work, and they are at work worldwide. Banks can get money from several sources: Through inter-bank borrowing and from raising capital. Capital can come from from selling assets, stock offerings, deposits, etc. The money the banks get from depositors is capital. In the United States, the Federal Reserve regulates the amount of capital that banks must maintain. If there was no requirement for capital then there would be zero demand for capital at an interest rate above the inter-bank offering rate. As capital requirements have risen, banks are allowed to make less loans given a certain amount of capital. That has caused an increased demand for capital from depositors. As described in this Federal Reserve ruling, effective January 1st, 2014 the Federal Reserve is again raising capital requirements. As you can see here money can be borrowed, in the United States, at .0825% (100 - 99.9175). Currently interest rates paid to borrowers are quite high compared to prevailing inter-bank rates. They could see more upward pressure given the fact that banks will be forced to maintain an increased amount of capital for a given amount of loans. |
Schwab wants to charge me interest on the money I received for selling TSLA short | I agree with Mark. I was quite confuse about the short position at first but then I did a lot of learning and found out that as long as you have enough cash to cover your margin requirement you do not pay any interest since you do not have a debit on your margin balance. This is not true for a long position though, supposed you have 5k cash and 5k margin balance, if you buy 10K worth of stocks then you will need to pay interest on the 5k of the margin balance since it is a debit. Since shorting is done at a credit basis, you actually get interest from the transaction but you still may need to pay the borrowing fees for the stocks so they could simply balance each other out. I have shorted stocks twice through two different companies and neither time I noticed any interest charges. But make sure you have enough cash to cover your margin requirement, because once your margin balance is used to covered your position then interest would accrual. Learn. |
Accepting high volatility for high long-term returns | Modern portfolio theory dramatically underestimates the risk of the recommended assets. This is because so few underlying assets are in the recommended part of the curve. As investors identify such assets, large amounts of money are invested in them. This temporarily reduces measured risk, and temporarily increases measured return. Sooner or later, "the trade" becomes "crowded". Eventually, large amounts of money try to "exit the trade" (into cash or the next discovered asset). And so the measurable risk suddenly rises, and the measured return drops. In other words, modern portfolio theory causes bubbles, and causes those bubbles to pop. Some other strategies to consider: |
How to acquire assets without buying them? | Assets can be acquired in different ways and for different purposes. I will only address common legal ways of acquiring assets. You can trade one asset for another asset. This usually takes place in the form of trading cash or a cash equivalent for an asset. The asset received should be of equal or greater value than the asset given in the eyes of the purchaser in order for the trade to be rational. Take this example: I am selling a bike that has been sitting on my porch for a few months. It's worth about $25 to me. My friend, Andy, comes by and offers $90 for it. I happily accept. Andy valued the bike at $110. This transaction produced value for both parties. I had a value benefit of $65 (90 - 25) and Andy had a value benefit of $20 (110 - 90). You can receive an asset as a gift or an inheritance. Less common, but still frequent. Someone gives you a gift or a family member dies and you receive an asset you did not own previously. You can receive an asset in exchange for a liability. When you take out a loan, you receive an asset (cash) which is financed by a liability (loan payable). In your case: Why would I buy a mall if having assets worth the same amount as the mall? I must value the mall more than the assets I currently have. This may stem from the possibility of greater future returns than I am currently making on my asset, or, if I financed the purchase with a liability, greater future returns than the cost associated with payment on the principal and interest of the liability. |
Can I use same stock broker to buy stocks from different stock markets? | In the US there is only one stock market (ignoring penny stocks) and handfuls of different exchanges behind it. NYSE and NASDAQ are two different exchanges, but all the products you can buy on one can also be bought on the other; i.e. they are all the same market. So a US equities broker cannot possibly restrict access to any "markets" in the US because there is only one. (Interestingly, it is commonplace for US equity brokers to cheat their customers by using only exchanges where they -- the brokers -- get the best deals, even if it means your order is not executed as quickly or cheaply as possible. This is called payment for order flow and unfortunately will probably take an Act of Congress to stop.) Some very large brokers will have trading access to popular equity markets in other countries (Toronto Stock Exchange, Mexico Stock Exchange, London Stock Exchange) and can support your trades there. However, at many brokers or in less popular foreign markets this is usually not the case; to trade in the average foreign country you typically must open an account with a broker in that country. |
Roth IRA - Vanguard or Fidelity? If a college student had to pick one? | Well, a couple things to keep in mind: Even if you have enough to meet the minimum initial amount, you need to have at least that much income in the year you make the contribution. You'll probably be best served saving up in a savings account so that by the time you have an income (and can thus make contributions), you have enough cash to meet the minimum initial contribution. |
What does ES1 refer to in this picture? | That looks like a Bloomberg terminal. And like @Jer said, it would appear to be the symbol for the S&P 500 E-mini index future. Although it doesn't look right all on its own, as it should have a modifier indicating the month (or quarter) of expiry. However, since it appears on a Bloomberg terminal in the image, I checked a source for Bloomberg Symbol Lists and found one of two possibilities for ES1. It is most likely the S&P 500 e-mini future: CME E-Mini Futures E-Mini S&P 500 ES1 INDEX the only alternative was LIFFE 3 Month Euroswiss ES1 COMDTY I think the former is far more likely, as the latter has the COMDTY commodity tag instead of INDEX as the tag in the image. Also, it isn't the ESI which pertains to Ethibel Sustainability Indices and something with the Eurozone (also Bloomberg Indices). Here we go! Excerpt straight is from a presentation presentation on charting from a business school PDF see pp.12-13, and appears to be a straight excerpt from September 2007 Bloomberg documentation. I didn't know any other way to imbed it besides taking a screen shot then uploading to imgur. Or of course, see pp.12-13 in the referenced PDF I've attached. See |
What should I consider when selecting a broker/advisor to manage my IRA? | I've not gotten an answer so far. Since I've started my search for a new financial planner here are the criteria I am using: |
What is a 10 Year Treasury Note and How Can it be Used to Calculate the Intrinsic Value of a Stock? | It's a form of debt issued by the United States Treasury. As the name implies, a 10-year note is held for 10 years (after which you get the face value in cash), and it pays interest twice per year. It's being used in the calculator to stand for a readily available, medium-term, nearly risk-free investment, as a means of "discounting" the value that the company gains. The explanation for why the discounting is done can be found on the page you linked. As a Canadian you could use the yield of comparable Canadian treasury securities as quoted by Bank of Canada (which seem to have had the bottom fall out since the new year), although I don't suppose American notes would be hard for a Canadian investor to come by, so if you wanted to be conservative you could use the US figure as long as it's higher. |
Why do banks encourage me to use online bill payment? | One other aspect of this is that the bank will plan to eventually approach the merchant that they are sending paper checks to and say "why don't you sign up with us and give us your ACH info, and we won't send you checks?" And a lot of merchants will say "sure", because someone has to open those checks and take them down to the bank, and that isn't free. And that time while the money is in the mail, or sitting on someone's desk to be deposited, that is money that isn't working for you. So everyone wins. |
What are some sources of information on dividend schedules and amounts? | I second the Yahoo! Finance key stats suggestion, but I like Morningstar even better: http://quote.morningstar.com/stock/s.aspx?t=roic They show projected yield, based on the most recent dividend; the declared and ex-dividend dates, and the declared amount; and a table of the last handful of dividend payments. Back to Yahoo, if you want to see the whole dividend history, select Historical Prices, and from there, select Dividends Only. http://finance.yahoo.com/q/hp?s=ROIC&a=10&b=3&c=2009&d=00&e=4&f=2012&g=v |
Pros and cons of using a personal assistant service to manage your personal finances? | When you want to hire personal assistants, you must be sure that you are hiring in a trusted company or the person you talk to have been proven by a lot of people. You must be wise in choosing one because these people will handle some of your personal things and data. |
What are the pros and cons of investing in a closed-end fund? | One advantage not pointed out yet is that closed-end funds typically trade on stock exchanges, whereas mutual funds do not. This makes closed-end funds more accessible to some investors. I'm a Canadian, and this particular distinction matters to me. With my regular brokerage account, I can buy U.S. closed-end funds that trade on a stock exchange, but I cannot buy U.S. mutual funds, at least not without the added difficulty of somehow opening a brokerage account outside of my country. |
What is a typical investment portfolio made up of? | An investment portfolio is typically divided into three components: All three of those can be accessed through mutual funds or ETFs. A 401(k) will probably have a small set of mutual funds for you to pick from. Mutual funds may charge you silly expenses if you pick a bad one. Look at the prospectus for the expense ratio. If it's over 1% you're definitely paying too much. If it's over 0.5% you're probably paying too much. If it's less than 0.1% you have a really good deal. US stocks are generally the core holding until you move into retirement (or get close to spending the money on something else if it's not invested for retirement). International stocks are riskier than US stocks, but provide opportunity for diversification and better returns than the US stocks. Bonds, or fixed-income investments, are generally very safe, but have limited opportunities for returns. They tend to do better when stocks are doing poorly. When you've got a while to invest, you should be looking at riskier investments; when you don't, you should be looking for safer investments. A quick (and rough) rule of thumb is that "your age should match the portion of your portfolio in bonds". So if you're 50 years old and approaching retirement in 15 years or so, you should have about 50% in bonds. Roughly. People whose employment and future income is particularly tied to one sector of the market would also do well to avoid investing there, because they already are at risk if it performs badly. For instance, if you work in the technology sector, loading up on tech stocks is extra risky: if there's a big bust, you're not just out of a job, your portfolio is dead as well. More exotic options are available to diversify a portfolio: While many portfolios could benefit from these sorts of holdings, they come with their own advantages and disadvantages and should be researched carefully before taking a significant stake in them. |
How do you save money on clothes and shoes for your family? | I'm all for thrift stores and yard sales. When they're littler they're more into comfort, perhaps insisting on certain colors, but somewhere around 13 they start to become more fashion conscious. If you want name brand clothes for kids, hit yard sales or consignment stores in better neighborhoods. Other places are Ross's or Marshall's. Both carry name brands. It's just you never know what they'll have. Another stategy is to buy fewer clothes. If you do laundry twice a week, you just don't need as much. Aim for mix and match. Also have play clothes for rough and tumble wear and "good" clothes for school and church. All these help keep costs down. My sister and I maintained an informal exchange between the cousins. This helped a good deal. A church in our neighborhood has a yearly clothing giveaway. That kind of thing may be an option for you as well. Or you could request needed items on Yahoo's freecycle. I see alot of clothes being given or requested on that site. I had one son who ripped out knees. Double kneed pants were a great investment. It looked like a rather large patch of fusible interfacing attached to the inside knee area. So it might work if you tried that on exisitng pants. Hope these help. |
Prize Money, Taxes and Foreign / International Students | The committee folks told us Did they also give you advice on your medication? Maybe if they told you to take this medicine or that you'd do that? What is it with people taking tax advice from random people? The committee told you that one person should take income belonging to others because they don't know how to explain to you which form to fill. Essentially, they told you to commit a fraud because forms are hard. I now think about the tax implications, that makes me pretty nervous. Rightly so. Am I going to have to pay tax on $3000 of income, even though my actual winning is only $1000? From the IRS standpoint - yes. Can I take in the $3000 as income with $2000 out as expenses to independent contractors somehow? That's the only solution. You'll have to get their W8's, and issue 1099 to each of them for the amounts you're going to pay them. Essentially you volunteered to do what the award committee was supposed to be doing, on your own dime. Note that if you already got the $3K but haven't paid them yet - you'll pay taxes on $3K for the year 2015, but the expense will be for the year 2016. Except guess what: it may land your international students friends in trouble. They're allowed to win prizes. But they're not allowed to work. Being independent contractor is considered work. While I'm sure if USCIS comes knocking, you'll be kind enough to testify on their behalf, the problem might be that the USCIS won't come knocking. They'll just look at their tax returns and deny their visas/extensions. Bottom line, next time ask a professional (EA/CPA licensed in your State) before taking advice from random people who just want the headache of figuring out new forms to go away. |
Should I pay off investment property mortgage | I would not recommend using your own money to pay off something that is not a strong asset. Use the savings where it will have the maximum return. Why not put (some of) the savings into another investment mortgage? Thanks to the leverage your return would be much higher than 5.5%, plus you would have more income. |
Why should we expect stocks to go up in the long term? | Does it make sense for stocks to earn a premium indefinitely? Yes. There is good reason to think that the stock market will make money indefinitely: the stock market is the primary mechanism through which investors bear market risk, which requires compensation. If you think of all the owners of firms (stockholders and bondholders, generally) the risk premium that stocks earn stocks is the way bondholders pay equityholders to bear the risk that they do not wish to. Will stock prices always go up in the long run? As long as companies pay out less in dividends than their profit, prices will go up. That could change if we were to change our corporate culture and/or tax practices so that firms paid out more in dividends. However, for the purposes of your question, I think it doesn't matter much whether the investor makes money as dividends or capital gains. Does the 5-7% guess apply only to the US market? I didn't write (nor read) the books in question, but most likely that is a global number. The US dominates the global equity market, so it's often a good proxy. However, international returns taken together have no less risk and earn no less over long horizons in general. The particular examples you have pointed out are special cases that only apply to a part of the global economy and a particular time period. There are plenty of examples of stock markets and time periods that did much better than the US market to offset your examples. Is 5-7% a reasonable long-term estimate of equity returns? Equity will always earn more in expectation than risk-free securities will. How much more depends on major economic factors. 5-7% has been a good estimate for the market risk premium for many, many decades (stocks should earn this plus whatever the risk-free rate is). However, that is just an empirical observation, not a rule. It can change. Some day technological progress could slow down or stop, we could run out of important resources in a way that we can't compensate for, our population permanently could stop growing, aliens could invade, etc. Down the road it is certainly possible for expected equity returns to go down and never go back up again. This would result from a permanent, global, economic shift that I think would be pretty obvious. That is, you wouldn't have to look at stock prices to know it was happening. |
How it actually works? Selling a call on a stock I hold, but has done poor, might the market thinks may rise | What you are proposing is called a "covered call" strategy. It is a perfectly reasonable speculative play on how far the stock will move within a certain amount of time. If your belief that the stock's volatility is such that it is unlikely to reach the strike price before the maturity is greater than the markets (which it seems it is), then go ahead and sell the call. |
Plan/education for someone desiring to achieve financial independence primarily through investing? | The basic problem here is that you need to have money to invest before you can make a profit from it. Now if you have say $500K or more, you can put that in mutual funds and live modestly off the profits. If you don't have that $500K to start out with, you're either looking at a long time frame to accumulate it - say by working a job for 30+ years, and contributing the max to your 401k - or are playing the market trying to get it. The last is essentially gambling (though with somewhat better odds than casinos or horse racing), and puts you up against the Gambler's Ruin problem: https://en.wikipedia.org/wiki/Gambler's_ruin You also, I think, have a very mistaken idea about the a typical investor's lifestyle. Take for instance the best known one, Warren Buffet. No offence to him, but from everything I've read he lives a pretty boring life. Spends all day reading financial reports, and what sort of life is that? As for flying places being exciting, ever tried it? I have (with scientific conferences, but I expect boardrooms are much the same), and it is boring. Flying at 30,000 ft is boring, and if it's a commercial flight, unpleasant as well. A conference room in London, Paris, or Milan is EXACTLY the same as a conference room in Podunk, Iowa. Even the cities outside the conference rooms are much of a muchness these days: you can eat at McDonalds in Paris or Shanghai. Only way to find interest is to take time from your work to get outside the conference rooms & commercial districts, and then you're losing money. |
Is it true that Income Tax was created to finance troops for World War I? | The Income Tax was put into effect during the Civil War, but was later revoked because it was deemed "Unconstitutional". It was re-instated in 1913, just one year before World War 1. This is largely the reason why people think it was created "for the war", when it actually pre-dated World War 1. Edit: I don't have any sources, per-se. This is just what little information I remember from Grade 10 History class. I remember this because I had a real ethical problem with how the government instituted the Income Tax, since it is effectively a tax on Productivity. I find this absurd, since it motivates people to do less, in an effort to be taxed less. This in turn promotes workers doing "cash jobs" and other such things to get around it. I personally have refused a raise because it would put me into a higher tax bracket, and I wouldn't actaully see the new money. In exchange, I asked for other non-monetary perks instead. I personally think this situation should not exist. ...however, I don't have a better solution. So I suppose I can't really pass judgment. :) |
HSBC Hong Kong's “Deposit Plus” Product: What is it, and what strategies to employ? | 15-19% gains also includes 15-19% and greater losses. They may not be required to disclose that to you in Hong Kong. If it isn't a leveraged account then that isn't too bad. Hong Kong is a nice jurisdiction, The US Federal Government is the only person you don't hide your assets from - but they dont want anything - so just report the accounts as commanded and you'll be A-Okay. |
Why would people sell a stock below the current price? | The person may just want to get out of that position in order to buy a different stock, he or she feels may go up faster. There is really a lot of reasons. |
Saving for retirement without employer sponsored plan | You might consider working on getting your new employer to sponsor a 401k, there may be options where you can invest and they aren't required to add anything as a match (which gives you higher limits). If they don't match, they may just be liable for some administration fees. If you have any side business that you do, you might also be eligible for other "self-employed" options that have higher limits (SEP, Simple - I think they may go up to $15k) although, I'm not sure the nitty gritties of them. |
Is real (physical) money traded during online trading? | This is somewhat of a non-answer but I'm not sure you'll ever find a satisfying answer to this question, because the premises on which the question is based on are flawed. Money itself does not "exist physically," at least not in the same sense that a product you buy does. It simply does not make sense to say that you "physically own money." You can build a product out of atoms, but you cannot build a money out of atoms. If you could, then you could print your own money. Actually, you can try to print your own money, but nobody would knowingly accept it and thus is it functionally nonequivalent to real money. The paper has no intrinsic value. Its value is derived from the fact that other people perceive it as valuable and nowhere else. Ergo paper money is no different than electronic money. It is for this reason that, if I were you, I would be okay with online Forex trading. |
Is CFD a viable option for long-term trading? | CFDs should not be used as a buy and hold strategy (which is risky enough doing with shares directly). However, with proper money and risk management and the proper use of stop losses, a medium term strategy is very plausible. I was using CFDs in the past over a short time period of usually between a couple of days to a couple is weeks, trying to catch small swings with very tight stops. I kept getting wipsawed due to my stops being too tight so had too many small loses for my few bigger wins. And yes I lost some money, almost $5k in one year. I have recently started a more medium term strategy with wider stops trying to catch trending stocks. I have only recently started this strategy and so far have 2 loses and 3 wins. Just remember that you do get charged a financing fee for holding long position overnight, buy for short position you actually get paid the funding fee for overnight positions. My broker charges the official interest rate + 2.5% for long positions and pays the official rate - 2.5% for short positions. So yes CFDs can be used for the longer term as long as you are implementing proper money and risk management and use stop losses. Just be aware of the implications of using margin and all the costs involved. |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | Is playing the lottery a wise investment? --Probably not. Is playing the lottery an investment at all? --Probably not though I'll make a remark on that further below. Does it make any sense to play the lottery in order to improve your total asset allocation? --If you follow the theory of the Black Swan, it actually might. Let me elaborate. The Black Swan theory says that events that we consider extremely improbable can have an extreme impact. So extreme, in fact, that its value would massively outweigh the combined value of all impacts of all probable events together. In statistical terms, we are speaking about events on the outer limits of the common probablity distribution, so called outliers that have a high impact. Example: If you invest $2000 on the stock market today, stay invested for 20 years, and reinvest all earnings, it is probable within a 66% confidence interval that you will have an 8 % expected return (ER) per year on average, giving you a total of roughly $9300. That's very much simplified, of course, the actual number can be very different depending on the deviations from the ER and when they happen. Now let's take the same $2000 and buy weekly lottery tickets for 20 years. For the sake of simplicity I will forgo an NPV calculation and assume one ticket costs roughly $2. If you should win, which would be an entirely improbable event, your winnings would by far outweigh your ER from investing the same amount. When making models that should be mathematically solvable, these outliers are usually not taken into consideration. Standard portfolio management (PM) theory is only working within so called confidence intervals up to 99% - everything else just wouldn't be practical. In other words, if there is not at least a 1% probability a certain outcome will happen, we'll ignore it. In practice, most analysts take even smaller confidence intervals, so they ignore even more. That's the reason, though, why no object that would fall within the realms of this outer limit is an investment in terms of the PM theory. Or at least not a recommendable one. Having said all that, it still might improve your position if you add a lottery ticket to the mix. The Black Swan theory specifically does not only apply to the risk side of things, but also on the chance side. So, while standard PM theory would not consider the lottery ticket an investment, thus not accept it into the asset allocation, the Black Swan theory would appreciate the fact that there is minimal chance of huge success. Still, in terms of valuation, it follows the PM theory. The lottery ticket, while it could be part of some "investment balance sheet", would have to be written off to 0 immediately and no expected value would be attached to it. Consequently, such an investment or gamble only makes sense if your other, safe investments give you so much income that you can easily afford it really without having to give up anything else in your life. In other words, you have to consider it money thrown out of the window. So, while from a psychological perspective it makes sense that especially poorer people will buy a lottery ticket, as Eric very well explained, it is actually the wealthier who should consider doing so. If anyone. :) |
Unable to understand logic behind why there is no exit load on liquid fund | I think you are having trouble understanding what 'liquid' means. Liquidity refers to how easily an asset can be converted to cash. More liquid = more easily converted to cash, less liquid, less so. Any kind of exit load is going to make an asset less liquid due to the penalties associated with making the sale. So, the whole point of liquid funds is to give people the option of selling quickly if they need to. Since an exit load is meant to discourage this behavior, liquid funds tend not to have one. The point isn't what the financial institution 'gets', it's about offering a service to clients with a particular investment need. |
Saving tax for long term stock investment capital gain by quiting my current job? | The capital gains is counted towards your income. If you cash out 1 Million dollars, you have a 1 Million dollar income for that year, which puts you at the 39.6% tax bracket. However, because that 1 Million dollars is all long term capital gains, you will only have to pay 20% of it in long term capital gains taxes. The best you can do is to cash the 1 Million dollars through several years instead of just all at once. This will put in a lower tax bracket and thus will pay lower capital gains tax. |
What are some pre-tax programs similar to FSA that I can take advantage of? | There is a dependent care spending account for child care related expenses. Also Medical and Dental expenses over a certain % of your income maybe deductible on your tax return. |
Do I have to explain the source of *all* income on my taxes? | You can report it as illegal income and you don't have to elaborate any further. For instance, spirit the cash off to a state where pot is legal and set up a dispensary. That is not legal at the Federal level, so it is in fact "illegal income" vis-a-vis your Form 1040 and that's all you say. Make sure you look, walk, and quack like a fairly successful pot distributor. That will most likely be the end of their inquiry, since they're not terribly driven to investigate the income you do report. Having to give 33% of it to the IRS is generally strong motivation for folks to not report fake income. You're not claiming the money is from pot, you're allowing them to infer it. |
In India, what is the difference between Dividend and Growth mutual fund types? | After searching a bit and talking to some investment advisors in India I got below information. So thought of posting it so that others can get benefited. This is specific to indian mutual funds, not sure whether this is same for other markets. Even currency used for examples is also indian rupee. A mutual fund generally offers two schemes: dividend and growth. The dividend option does not re-invest the profits made by the fund though its investments. Instead, it is given to the investor from time to time. In the growth scheme, all profits made by the fund are ploughed back into the scheme. This causes the NAV to rise over time. The impact on the NAV The NAV of the growth option will always be higher than that of the dividend option because money is going back into the scheme and not given to investors. How does this impact us? We don't gain or lose per se by selecting any one scheme. Either we make the choice to get the money regularly (dividend) or at one go (growth). If we choose the growth option, we can make money by selling the units at a high NAV at a later date. If we choose the dividend option, we will get the money time and again as well as avail of a higher NAV (though the NAV here is not as high as that of a growth option). Say there is a fund with an NAV of Rs 18. It declares a dividend of 20%. This means it will pay 20% of the face value. The face value of a mutual fund unit is 10 (its NAV in this case is 18). So it will give us Rs 2 per unit. If we own 1,000 units of the fund, we will get Rs 2,000. Since it has paid Rs 2 per unit, the NAV will fall from Rs 18 to Rs 16. If we invest in the growth option, we can sell the units for Rs 18. If we invest in the dividend option, we can sell the units for Rs 16, since we already made a profit of Rs 2 per unit earlier. What we must know about dividends The dividend is not guaranteed. If a fund declared dividends twice last year, it does not mean it will do so again this year. We could get a dividend just once or we might not even get it this year. Remember, though, declaring a dividend is solely at the fund's discretion; the periodicity is not certain nor is the amount fixed. |
When is the best time to put a large amount of assets in the stock market? | It's a tricky question w/out more context. If your only options are between stock/funds and letting it sit (i.e. in a saving or CD), I'd have to say option one is the way to go (but that's based on my situation, and you did ask "if you .."). However, I think the true answer is "it depends." It depends on your risk tolerance and what are your short-term vs. long-term financial needs. Only after answering those questions you can then seek to strategize and diversify investment accordingly. |
US sanctions against foreign citizens | US Sanctions are usually very nuanced and you should look them up yourself. It may be widely reported that "US sanctions X-country" and it may be widely understood that it means all funds from anybody in that country are blocked, that USUALLY isn't the case (or "many times" isn't the case, I'm not going to bother quantifying that) Many times it is a comprehensive list of certain individuals and businesses that are blocked. The US Treasury publishes a list of these organizations. This misinterpretation can trickle down to companies. You would think big financial companies understand regulations, but they typically just react to how things are reported and have no uniform understanding of the financial regulations they are subject to. Private companies create unique and arbitrary company policies in reaction to the spirit of a regulation. So could it be that all Iranians cannot interact with the US financial system? Sure, thats possible. Could it be a lot more nuanced? Sure. Does it matter if the broker will actually investigate your SSN with USCIS? Maybe, maybe not. Does it matter if you disclose you are a dual citizen if they claim they can just check your SSN? The financial institution is the one liable for misinterpreting sanctions. Let the consequences guide your actions. |
Does revenue equal gross profit for info product business? | What about web-hosting fees? Cost of Internet service? Cost of computer equipment to do the work? Amortized cost of development? Time for support calls/email? Phone service used for sales? Advertising/marketing expenses? Look hard--I bet there are some costs. |
How safe is a checking account? | US checking accounts are not really secure, though many people use them. One form of check fraud has been highlighted by Prof. Donald Knuth and carried out by Frank Abagnale, as portrayed in the film Catch Me If You Can. Basically, anyone can write a check that would draw from your account merely by knowing your account number and your bank's ABA routing number. With those two pieces of information (which are revealed on every check that you write), anyone can print a working check, either using a laser printer with MICR (magnetic ink character recognition) toner, or by placing an order with a check-printing company. The only other missing element is a signature, which is a pretty weak form of authentication. When presented with such a check, your bank would probably honor it before finding out, too late, that it is fraudulent. A variant of this vulnerability is ACH funds transfers. This is the mechanism through which you could have, say, your utility company automatically withdraw money from your account to pay your bill. Unfortunately, the transfer is initiated by the recipient, and the system relies largely on trust with some statistical monitoring for suspicious patterns. Basically, the whole US checking system is built with convenience rather than security in mind, since other institutions are able to initiate withdrawal transactions by knowing just the ABA number and account number. In practice, it works well enough for most people, but if you are paranoid about security, as you seem to be, you don't want to be using checks. The European system, which has largely eliminated checks in favor of payer-initiated push transactions, is safer by design. |
Why buy insurance? | Insurance is bought for peace of mind and to divert disaster. Diverting disaster is a good/great thing. If your house burned down, if someone hit your car, or some other devastating event (think medical) happened that required a more allocation than you could afford the series of issues may snowball and cause you to lose a far greater amount of money than the initial incident. This could be in the form of losing work time, losing a job, having to buy transportation quickly paying a premium, having to incur high rate debt and so on. For the middle income and lower classes medical, house, and medical insurance certainly falls into these categories. Also why a lot of states have buyout options on auto insurance (some will let you drive without insurance by proving bonding up to 250K. Now the other insurance as I have alluded to is for peace of mind mainly. This is your laptop insurance, vacation insurance and so on. The premise of these insurances is that no matter what happens you can get back to "even" by paying just a little extra. However what other answers have failed to clarify is the idea of insurance. It is an agreement that you will pay a company money right now. And then if a certain set of events happen, you follow their guidelines, they are still in business, they still have the same protocols, and so on that you will get some benefit when something "disadvantageous" happens to you. We buy insurance because we think we can snap our fingers and life will be back to normal. For bigger things like medical, home, and auto there are more regulations but I could get 1000 comments on people getting screwed over by their insurance companies. For smaller things, almost all insurance is outsourced to a 3rd party not affiliated legally with a business. Therefore if the costs are too high they can simply go under, and if the costs are low they continue helping the consumer (that doesn't need help). So we buy insurance divert catastrophe or because we have fallen for the insurance sales pitch. And an easy way to get around the sales pitch - as the person selling you the insurance if you can have their name and info and they will be personally liable if the insurance company fails their end of the bargain. |
What evidence exists for claiming that you cannot beat the market? | No such evidence exists, because many people do beat the market. And many people fail to earn market rate of return. The way you achieve the former is generally to take risks that also increase the likelihood of the latter. The amount of time and effort you invest may bias that result, but generally risk and potential reward tend to track pretty closely since everyone else is making the same evaluations. You can't prove a negative. We can't prove unicorns don't exist either. We can advise you that hunting for one is probably not productive; many others have been trying, and if there was one we'd probably have seen at least something that encourages us to continue looking. Not impossible, but the evidence is far from encouraging. Market-rate-of-return can be achieved fairy reliably with minimal risk and minimal effort, and at mostly long-term tax rates. I consider that sufficient for my needs. Others will feel otherwise. |
Making $100,000 USD per month, no idea what to do with it | Your #1 problem is the Government both in it's form as a taxation outfit and as a 'law and order' outfit. You'd be very surprised at how fast a bank seizes your bank account in response to a court order. Purchase 100 Mexican 50 Peso Gold (1.2 oz/ea). These coins are cheap (lowest cost to get into) and will not be reportable on sale to taxing authorities. That money is out of the banking system and legal system(s). Do not store them in a bank! You need to find a tax strategist, probably a former IRS agent / CPA type. With the rest remaining money... There's an old saying, Don't fight the Fed. As well as "The trend is your friend". So, the Fed wants all savers fully invested right now (near 0 interest rates). When investing, I find that if you do exactly opposite what you think is the smart thing, that's the best thing. Therefore, it follows: 1) Don't fight the Fed 2) Do opposite of smart 3) Do: Fight the Fed (and stay 100% out of the market and in cash) We're looking like Japan so could remain deflationary for decades to come. Cash is king... |
Can the Philadelphia Center City District Tax be deducted on my Schedule-A? | My basic rule of thumb is that if the the bill come from a government office of taxation, and that if you fail to pay the amount they can put a tax lien on the property it is a tax. for you the complication is in Pub530: Assessments for local benefits. You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property. You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge. If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. An assessment for a local benefit may be listed as an item in your real estate tax bill. If so, use the rules in this section to find how much of it, if any, you can deduct. I have never seen a tax bill that said this amount is for new streets, and the rest i for things the IRS says you can deduct. The issue is that if the Center City tax bill is a separate line or a separate bill then does it count. I would go back to the first line of the quote from Pub 530: You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Then I would look at the quote from the CCD web site: The Center City District (CCD) is a business improvement district. Our mission is to keep Philadelphia's downtown, called Center City, clean, safe, beautiful and fun. We provide security, cleaning and promotional services that supplement, but do not replace, basic services provided by the City of Philadelphia and the fundamental responsibilities of property owners. CCD also makes physical improvements to the downtown, installing and maintaining lighting, > signs, banners, trees and landscape elements. and later on the same page: CCD directly bills and collects mandatory payments from properties in the district. CCD also receives voluntary contributions from the owners of tax-exempt properties that benefit from our services. The issues is that it is a business improvement district (BID), and you aren't a business: I did find this document from the city of Philadelphia explain how to establish a BID: If the nature of the BID is such that organizers wish to include residential properties within the district and make these properties subject to the assessment, it may make sense to assess these properties at a lower level than a commercial property, both because BID services and benefits are business-focused, and because owner-occupants often cannot treat NID assessments as tax-deductible business expenses, like commercial owners do. Care must be taken to ensure that the difference in commercial and residential assessment rates is equitable, and complies with the requirements of the CEIA. from the same document: Funds for BID programs and services are generated from a special assessment paid by the benefited property owners directly to the organization that manages the BID’s activities. (Note: many leases have a clause that allows property owners to pass the BID assessment on to their tenants.) Because they are authorized by the City of Philadelphia, the assessment levied by the BID becomes a legal obligation of the property owner and failure to pay can result in the filing of a lien. I have seen discussion that some BIDS can accept tax deductible donations. This means if a person itemizes they can deduct the donation. I would then feel comfortable deducting the tax because: If you can't deduct it that would mean the only people who can't deduct it are home owners. So deduct it. (keep in mind I am not a tax professional) |
When would one actually want to use a market order instead of a limit order? | You put in a market order when you want to sell to whomever raises their hand first. It results in the fastest possible liquidation of your stock. It's appropriate when you need to sell now, regardless of price. An example of when to use it: It's 3:55 PM, the market's going to close in 5 minutes and you need to sell some stocks to make some kind of urgent payment elsewhere. If instead you have a limit order in place, you might not reach the limit price before the market closes, and you'll still own the stock, which might not be what you want. |
What is “beta” for an investment or a portfolio, and how do I use it? | I don't think either of these answers are accurate. A beta of 0 means that your stock/portfolio does not change accordingly or with the market, rather it acts independent. A beta above 0 means the stock follows what the market does. Which means if the market goes up the stock goes up, if the market goes down, the stock goes down. If the stock's beta is more than 1 the stock will go up more if the market goes up, or go down more if the market goes down. Inversely if the stock is less than 0 the stock will follow the market inversely. So if the market goes up, the stock goes down. If the market goes down, the stock goes up. Again a greater negative beta, the more this relationship will be exaggerated. |
What are the advantages/disadvantages of a self-directed IRA? | The main advantage and disadvantage I can see in a scenario like this are - how savvy and good an investor are you? It's a good way to create below-market average returns if you're not that good at investing and returns way above market average if you are... |
How can I diversify investments across currencies in ISA? | Just buy a FTSE-100 tracker. It's cheap and easy, and will hedge you pretty well, as the FTSE-100 is dominated by big mining and oil companies who do most of their business in currencies other than sterling. |
What should my finances look like at 18? | The golden rule is "Pay yourself first." This means that you should have some form of savings plan set up, preferably a monthly automatic withdrawal that comes out the day after your pay is deposited. 10% is a reasonable number to start with. You are in a wonderful situation because you are thinking about this 10-15 years before most of us do. Use this to your advantage. You are also in a good situation if you can defer the purchase of the house (assuming prices don't rise drastically in the next few years -- which they might.) If your home situation is acceptable, then sit down with the parents and present a plan. Something along the lines of: I'd like to move out and start my life. However, it would be advantageous to stay here for a few years to build up a down payment and reserve. I'm happy to help out with expenses, but do need a couple years of rent-free support to get started. Then go into monk mode for one year. It's doable, and you can save a lot of cash. Then you're on the road to freedom. |
Does a stock really dip in price on the ex-dividend date? And why would it do this? | The stock price is what people think a company is worth, this is made up of When a company pays out a dividend the money in the company’s bank account reduces, therefore the value of the company reduces. When a company says they are going to pay a larger dividend than expected, we start to expect they are going to make more profit next year as well. So stock price tends to go up when a company says it is increasing the dividend, but down on the day then money leaves the companies bank account. There is normally many months between the two events. |
What is an effective way to convert large sums of US based investments to foreign currencies? | A stock, bond or ETF is basically a commodity. Where you bought it does not really matter, and it has a value in USD only inasmuch as there is a current market price quoted at an American exchange. But nothing prevents you from turning around and selling it on a European exchange where it is also listed for an equivalent amount of EUR (arbitrage activities of investment banks ensure that the price will be equivalent in regard to the current exchange rate). In fact, this can be used as a cheap form of currency conversion. For blue chips at least this is trivial; exotic securities might not be listed in Europe. All you need is a broker who allows you to trade on European exchanges and hold an account denominated in EUR. If necessary, transfer your securities to a broker who does, which should not cost more than a nominal fee. Mutual funds are a different beast though; it might be possible to sell shares on an exchange anyway, or sell them back to the issuer for EUR. It depends. In any case, however, transferring 7 figure sums internationally can trigger all kinds of tax events and money laundering investigations. You really need to hire a financial advisor who has international investment experience for this kind of thing, not ask a web forum! |
Does the Black-Scholes Model apply to American Style options? | as no advantage from exerting American call option early,we can use Black schole formula to evaluate the option.However, American put option is more likely to be exercised early which mean Black schole does not apply for this style of option |
Is selling put options an advisable strategy for a retiree to generate stable income? | I am close to retirement and sell cash secured puts and covered calls on a regular basis. I make 15 % plus per year from the puts. Less risky than buying stocks, which I also do. Riskier than bonds, but several times the income. Example: I owned 4,000 shares of XYZ, which I bought last year at 6.50 and was at 7.70 two months ago. I sold 3,000 shares, sold 10 Dec puts @ 7.50 (1,000 shares) for $.90 per share and sold 10 Dec calls at 10.00 for $.20. Now I had cash from the sale of 3,000 shares ($23,100) plus $900 cash from the sale of the puts, plus $200 cash from the sale of the calls. Price is now at 6.25. Had I held the 4,000 shares, I would be down $5,800 from when it was 7.70. Instead, I am down $1,450 from the held 1,000 shares, down $550 on the put and up $200 on the calls. So down $1,800 instead of down $5,800. I began buying XYZ back at 6.25 today. |
What are the top “market conditions” to follow? | The very term 'market conditions' is subjective and needs context. There are 'market conditions' that favor buying (such as post crash) or market conditions that favor selling (such as the peak of a bubble). Problem with mutual funds is you can't really pick these points yourself; because you're effectively outsourcing that to a firm. If you're tight on time and are looking for weekly update on the economy a good solution is to identify a reputable economist (with a solid track record) and simply follow their commentary via blog or newsletter. |
Looking at Options Liquidity: what makes some stocks so attractive for options traders? | The penny pilot program has a dramatic effect on increasing options liquidity. Bids can be posted at .01 penny increments instead of .05 increments. A lot of money is lost dealing with .05 increments. Issues are added to the penny pilot program based on existing liquidity in both the stock and the options market, but the utility of the penny pilot program outweighs the discretionary liquidity judgement that the CBOE makes to list issues in that program. The reason the CBOE doesn't list all stocks in the penny pilot program is because they believe that their data vendors cannot handle all of the market data. But they have been saying this since 2006 and storage and bandwidth technology has greatly improved since then. |
Why is property investment good if properties de-valuate over time? | As some others have pointed out, it's key to remember the difference in market value and accounting value. To simplify things, book value is the only item that specifically depreciates... it happens in the world of accounting to try to time "when did I use a long term asset?" with "when did I obtain value from that asset?" For a house, governments usually allow owners to claim depreciation of the building over a set period of time. This does not affect your resale value of the house. Similarly, for a commercial property, governments set laws for how an individual or a company can time the "use" of that asset vs. their accounting. Some companies can have totally depreciated ("zero cost") assets that are still very productive. Market Property values are derived from 3 specific sources: Value in Trade is an estimate of the value that others would be willing to pay for a similar asset. That's why you can buy a house today, and in a "normal" market, the same house should be worth a similar amount of money in the future. Value in Use can be more interesting... this is where a farmer can extract $100,000 in value per year from 10 acres of land. But as a region develops, a manufacturing company can generate $300,000 per year from the same 10 acres of land. The company can buy out the farmer at a 'fair' price (>$100,000 per year) and still net positive from the investment. Income Approach tends to be focused on properties that have a cash flow, but can be adapted to other property estimates. It evaluates the current "business case" for any property with the cost of money down, the overall investment price, and the expected value from any returns. Remember, the market value is very simply, the price you could obtain if you sold the asset at a given time. It is rarely considered in terms of "how much will this go down?". Book value is an accounting exercise and declines by a set amount every year, because it means you can estimate the "cost" of owning an asset vs the value it generates in a particular time period. |
What are the advantages of a Swiss bank account? | A lot of Americans have used Swiss bank accounts to avoid paying taxes. However recently several large Swiss banks have started disclosing the details on some of their customers to the IRS. There isn't much security in Swiss banking at this point in time. |
Should I worry too much about saving my 20% down before buying my first house? | The only problem that I see is that by not giving the 20% right away, you might need to pay PMI for a few months. In addition, in the case of conventional loans, I heard that banks will not remove the PMI after reaching 80% LTV without doing an appraisal. In order to be removed automatically, you need to reach 78% LTV. Finally, I think you can get a better interest by giving 20% down, and you can get a conventional loan instead of a FHA loan, which offers the option to avoid the PMI altogether (on FHA, you have two PMIs: one upfront and one monthly, and the monthly one is for the life of the loan if you give less than 10%). |
Is 401k as good as it sounds given the way it is taxed? | When you are investing for 40 years, you will have taxable events before retirement. You'll need to pay tax along the way, which will eat away at your gains. For example, in your taxable account, any dividends and capital gain distributions will need taxes paid each year. In your 401(k) or IRA, these are not taxable until retirement. In addition, what happens if you want to change investments before retirement? In your taxable account, taxes on the capital gains will be due at that time, but in a retirement account, you can change investments anytime you like without having to pay taxes early. Finally, when you do pull money out of your 401(k) at retirement, it will be taxed at whatever your tax rate is at retirement. After you retire, your income will probably be lower than when you were working, so your tax rate might be less. |
Please explain: What exactly is a CDS or “Credit Default Swap”? | From my understanding, a CDS is a financial product to buy protection against an event of "default" (default of payment). Example: if General Motors owes me money $10,000,000 (because I own GM bonds for example) and I wish to protect myself against the event of GM not repaying the money they owe me (event called "credit default"), I pay FinancialCompany_X (the seller of the CDS) perhaps $250,000 per year against the promise that FinancialCompany_X will pay me in case GM is not paying me. This way I protected myself against that risk. FinancialCompany_X took the risk (against money). A CDS is in fact an insurance. Except they don't call it an insurance which enabled the financial industry to avoid the regulation that applies to insurances. There is a lot of infos here: http://en.wikipedia.org/wiki/Credit_default_swap |
How to rebalance a passive portfolio if I speculate a war is coming? | Normally, in a war everybody suffers and the entire economy goes down. Military contractors do better than average, but the average sucks. The way to take advantage of knowing a war is coming is to leave as soon as possible. There are strategic materials that can become valuable in a war, but such investments are generally very specialized and not something an ordinary investor would be in a position to exploit. The most profitable businesses in war are food, oil, and ammunition. |
Estimated Taxes Fall Short of tax liability — how do I pay extra online (Federal and NYS) | If you qualify for the safe harbor, you are not required to pay additional quarterly taxes. Of course, you're still welcome to do so if you're sure you'll owe them; however, you will not be penalized. If your income is over $150k (joint) or $75k (single), your safe harbor is: Estimated tax safe harbor for higher income taxpayers. If your 2014 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2015 or 110% of the tax shown on your 2014 return to avoid an estimated tax penalty. Generally, if you're under that level, the following reasons suggest you will not owe the tax (from the IRS publication 505): The total of your withholding and timely estimated tax payments was at least as much as your 2013 tax. (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen.) The tax balance due on your 2014 return is no more than 10% of your total 2014 tax, and you paid all required estimated tax payments on time. Your total tax for 2014 (defined later) minus your withholding is less than $1,000. You did not have a tax liability for 2013. You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. If you paid one-fourth of your last year's taxes (or of 110% of your last-year's taxes) in estimated taxes for each quarter prior to this one, you should be fine as far as penalties go, and can simply add the excess you know you will owe to the next check. |
W2 vs 1099 Employee status | Careful. I would personally need a LOT more than $5 more per hour to go from W-2 employment to 1099 employment. It boils down to two reasons: (1) employers pay a huge amount of taxes on behalf of their employees, and (2) you would have to pay all of your own withholding up front. Your current proposal from them doesn't account for that. There are also risks that you face as a 1099. On the first item, your employer currently pays 6.2% of your Social Security tax. You pay the other 6.2%. If you go to 1099 status, you will be self-employed as an independent contractor and have to pay the full 12.4% out of your increased 1099 wages. On the second item, your employer also does your withholding out of your paychecks based on what you tell them on a form W-4. If you're disciplined enough to pay this out yourself in estimated taxes every time you get a paycheck, great. Many people aren't and just see a much bigger paycheck with no taxes out of it, and end up with a large tax bill at the end of the year. Overall, there are some other considerations like healthcare and other benefits. These will not be available to you as a 1099 employee. You can also be terminated spontaneously, unless you have a specific contract length with the company. As I see it, not including any benefits you would receive, you're looking at LESS money in your pocket at $50/hr as a contractor than at your $48/hr. Your pay net social security deductions is: $48 x 40 hrs x 52 weeks = 99,840 * .938 = 93,649.92. As a 1099 @ $50/hr you would net $50 x 40 hrs x 52 weeks = 104,000 * .876 = 91,104. Then there are the rest of taxes, etc to figure out your real take-home pay. I'm not a tax advisor, but I would be very careful to get the whole picture figured out before jumping. I would ask for a lot more with the added risk you would take as an independent, too. |
How can I set up a recurring payment to an individual (avoiding fees)? | Many U.S. banks now support POPMoney, which allows recurring electronic transfers between consumer accounts. Even if your bank doesn't support it, you can still use the service. See popmoney.com. |
When an in-the-money stock option expires does the broker always execute it or does its value become worthless if the owner doesn't execute it? | It depends on the broker, each one's rules may vary. Your broker should be able to answer this question for how they handle such a situation. The broker I used would execute and immediately sell the stock if the option was 25 cents in the money at expiration. If they simply executed and news broke over the weekend (option expiration is always on Friday), the client could wake up Monday to a bad margin call, or worse. |
Any reason to be cautious of giving personal info to corporate fraud departments? | I can't address the psychology of trust involved in your question, but here are some common sense guidelines for dealing with your issue. Make sure you know who you are talking to. Call the company you need to speak to via a publicly available phone number. An email or something you got in a letter might be from a different source. If you use a website, you should be sure you are on the correct website. Keep careful records. Make good notes of each phone call and keep all emails and letters forever. Note the time, name and/or ID of the person you spoke to and numbers called in addition to keeping notes on what actions should be done. Keep your faxing transmission receipts and shipping tracking numbers too. If you are nervous, ask them why they want the info. The fraud department should be able to explain it to you. For example, they probably want your social because that is how your credit report is identified. If they are going to fix a credit report, they will need a social. It is doubtful they would have a good explanation why they need your mother's maiden name. Ask for secure transmission, or confirm they have it. Postal mail isn't so secure, but I'll go out on a limb and say most fax machines today are not really fax machines, but software that deals in PDFs. At some point you will have to realize you will have to transmit something. No method is perfect, but you can limit your exposure. Help them do their jobs. If you are (understandably) nervous, consider their motivations: corporate profit. BUT that could very well mean not running afoul of the law and (with any luck) treating customers the best way they know to earn business. If you stymy the fraud department, how can they help you? If the ID theft was serious enough, document your issue for future law enforcement so you getting pulled over for speeding doesn't result in you going to jail for whatever crime the other person did. Perhaps the fraud department you are dealing with can assist there. Finally, while you work with fraud departments to clear up your name and account, work on the other end to limit future damage. Freeze your credit. See if you bank or credit card have monitoring. Use CreditKarma.com or a similar if you cannot find a free service. (Please don't ever pay for credit monitoring.) |
What drives the stock of bankrupt companies? | What drives the stock of bankrupt companies? Such stock is typically considered "distressed assets". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? "There's a sucker born every minute." - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity. |
Do stock option prices predicate the underlying stock's movement? | Option prices can predict the range of movement of the underlying, but not if the underlying is going up or down. An option price gives an implied volatility for an underlying . That IV number helps predict a range for the underlying price over the next few days,months, upto a year. |
What is the best cross-platform GPL personal finance tool available? | I use "Money Manager Ex" which is a Windows application I use on PC to log my transactions and for simple statistic. They have two versions, simple standlone application and self-hosted web app. |
How are shares used, and what are they, physically? | For some very small private companies I know of (and am part of), paper stocks do exist. You can sit at the table with the damn things in your hand and wave them in people's faces. They tell everyone how much of the company you own as a result of the money you ponied up. On the other hand, most stocks are now electronic. Nothing to hold. Just electronic records to review. They still represent how much you own of the company because of some amount of money you have put at risk, but they aren't anywhere near as much fun as the old-fasioned paper proofs. (As MrChrister notes, you can pay a small fee to get paper if you like, even for some big companies. Some of these paper stocks are remarkably elaborate and fine looking, but hardly necessary.) (You can see more info about what stocks are and what sort of stocks exist here: http://www.wikinvest.com/wiki/What_is_a_stock%3F) |
Are warehouse clubs like Costco and Sam's Club worth it? | I know that for me personally, if I buy that giant box of Goldfish instead of the bags, it doesn't mean I'm saving money... just eating a lot more Goldfish. The trick, I think, to buying in bulk is to make sure that you're not consuming in bulk. You're not likely to go through more dishwasher detergent just because you bought the big bottle, but you may find the kids are eating a lot more fruit snacks, or you're throwing away half of that huge bag of baby carrots that went bad, because you bought in bulk. |
Are Forex traders forced to use leverage? | Actually, most of the forex traders do not prefer the practice of leveraging. In forex trading, a contract signed by a common trader is way more than any common man can afford to risk. It is not a compulsion for the traders to use leveraging yet most of the traders practice it. The other side of it is completely different. Trading companies or brokers specifically like it because you turn into a kind of cash cow when your account gets exhausted. As for trader, most of them don’t practice leveraging. |
Why would people sell a stock below the current price? | Why would people sell below the current price, and not within the range of the bid/ask? There are many scenarios where this is deliberate but all of them boil down to the fact that the top level's bid doesn't support the quantity you're trying to sell (or is otherwise bogus[1]). One scenario as an example: You're day-trading both sides but at the end of the day you accumulated a rather substantial long position in a stock. You don't want to (or aren't allowed to[2]) be exposed overnight, however. What do you do? You place an order that is highly likely to go through altogether. There's several ways to achieve that but a very simple one is to look at the minimum bid level for which the bid side is willing to take all of your shares, then place a limit order for the total quantity at that price. If your position doesn't fit into the top level bid that price will well be lower than the "current" bid. Footnotes: [1] Keyword: quote stuffing [2] Keyword: overnight margin (aka positional margin, as opposed to intraday margin), this is highly broker dependent, exchanges don't usually distinguish between intraday and overnight margins, instead they use the collective term maintenance margin |
How much financial information should a buyer give an estate agent? | My guess is they are fishing for business for their in-house finance person. In the UK, all the estate agency chains (and many of the smaller outfits) have financial advice firms they are affiliated with, often to the extent that a desk in each branch will be for 'the finance guy' (it's usually a guy). The moment you show any sign of not quite having the finances for a place you like, they will offer you a consultation with the finance guy, who "will be able to get you a deal". On commission, of course. What you need to say with regards to financing is (delete as applicable) "I am a cash buyer" / "I have an Agreement In Principle". And that's it. They do not 'need' to know any more, and they are under obligation to pass your offer on to the vendor. |
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